Press Release

HONOLULU--(BUSINESS WIRE)-- Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $20.7 million, or $0.78 per fully diluted earnings share ("EPS"), for the first quarter of 2026. This compares to net income of $22.9 million, or EPS of $0.85, in the prior quarter and $17.8 million, or EPS of $0.65, in the first quarter last year.

"We delivered strong net income in the first quarter, marked by balance sheet growth, healthy net interest margin, and disciplined expense management,” said Arnold Martines, Chairman, President and CEO. “We are proud to be named as Hawaii SBA lender of the year for the 17th time, reflecting our ongoing commitment to supporting small businesses in our community. I want to express my sincere appreciation to our employees and customers for their continued dedication and partnership."

Earnings Highlights

Net interest income for the first quarter of 2026 totaled $61.4 million, which decreased by $0.7 million, or 1.2% from the prior quarter, and increased by $3.7 million, or 6.3%, compared to the same quarter last year. Net interest margin ("NIM") for the first quarter of 2026 was 3.53%, a decrease of 3 basis points ("bp" or "bps") from the prior quarter, and an increase of 22 bps from the same quarter last year. The sequential quarter decrease in net interest income and NIM was primarily driven by lower average yields earned on loans, down 6 bps, and investment securities, down 5 bps, partially offset by a 6 bps decrease in average rates paid on interest-bearing deposits. The sequential quarter decrease in net interest income was also due to a $60.0 million decrease in average loans and two less days in the current quarter.

The Company recorded a provision for credit losses of $2.4 million in the first quarter of 2026, compared to a provision of $2.4 million in the prior quarter, and a provision of $4.2 million in the same quarter last year. The current quarter provision for credit losses included $2.7 million for credit losses on loans offset by a $0.3 million credit for off-balance sheet credit exposures. The decrease from the year ago quarter was primarily driven by lower loan balances and changes in the economic forecast used in our current expected credit losses model.

Other operating income for the first quarter of 2026 totaled $11.6 million, compared to $14.2 million in the prior quarter, and $11.1 million in the same quarter last year. The sequential quarter decrease was primarily due to a decrease in income from bank-owned life insurance of $2.4 million and lower mortgage banking income of $0.5 million, partially offset by income related to a debit card program contract extension consideration of $0.7 million (included in other income). The decrease in income from bank-owned life insurance was largely driven by $1.4 million in death benefits recognized in the prior quarter, combined with equity market volatility and the impact on corporate-owned life insurance ("COLI") policies used to hedge deferred compensation expense.

Other operating expense for the first quarter of 2026 totaled $43.7 million, compared to $45.7 million in the prior quarter, and $42.1 million in the same quarter last year. The decrease from the prior quarter was primarily attributable to lower salaries and employee benefits of $1.4 million due to lower incentive accruals and lower deferred compensation expense, along with a reduction in legal and professional services of $0.5 million.

The efficiency ratio was 59.87% in the first quarter of 2026, compared to 59.88% in the prior quarter and 61.16% in the same quarter last year.

The effective tax rate for the first quarter of 2026 was 23.0%, compared to 18.9% in the prior quarter, and 21.2% in the same quarter last year. The increase in the Company's effective tax rate was primarily attributable to additional tax credits recognized in the previous quarter and a decrease in tax-exempt income.

Balance Sheet Highlights

As of March 31, 2026, total assets were $7.50 billion, which increased by $86.1 million, or 1.2% from $7.41 billion at December 31, 2025, and an increase of $90.1 million, or 1.22% from $7.41 billion at March 31, 2025.

Total loans, net of deferred fees and costs, were $5.32 billion at March 31, 2026, which increased by $31.3 million, or 0.6% from $5.29 billion at December 31, 2025, and decreased by $14.2 million, or 0.3% from $5.33 billion at March 31, 2025. The average yield earned on loans during the first quarter of 2026 was 4.93%, compared to 4.99% in the prior quarter and 4.88% in the same quarter last year.

Total deposits were $6.70 billion at March 31, 2026, which increased by $89.6 million or 1.4% from $6.61 billion at December 31, 2025, and increased by $103.3 million, or 1.6% from $6.60 billion at March 31, 2025. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $6.13 billion at March 31, 2026. Core deposits increased by $74.9 million, or 1.2% from $6.06 billion at December 31, 2025, and increased by $158.7 million, or 2.7% from $5.98 billion at March 31, 2025. The average rate paid on total deposits during the first quarter of 2026 was 0.90%, compared to 0.94% in the prior quarter, and 1.08% in the same quarter last year.

Asset Quality

Nonperforming assets totaled $14.5 million, or 0.19% of total assets at March 31, 2026, compared to $14.4 million, or 0.19% of total assets at December 31, 2025 and $11.1 million, or 0.15% of total assets at March 31, 2025.

Net charge-offs in the first quarter of 2026 totaled $2.4 million, compared to net charge-offs of $2.5 million in the prior quarter, and net charge-offs of $2.6 million in the same quarter last year. On an annualized basis, net charge-offs as a percentage of average loans was 0.18% in the first quarter of 2026, compared to 0.18% in the prior quarter, and 0.20% in the same quarter last year.

The allowance for credit losses on loans was 1.13% of total loans as of March 31, 2026, and remained unchanged from 1.13% at December 31, 2025 and March 31, 2025.

Capital

Total shareholders' equity at March 31, 2026 was $593.9 million, compared to $592.6 million at December 31, 2025 and $557.4 million at March 31, 2025.

During the first quarter of 2026, the Company repurchased 321,396 shares of common stock at a total cost of $10.5 million, or an average price of $32.75 per share. As of March 31, 2026, $44.5 million remained available under the Company's share repurchase authorization.

The Company's regulatory capital ratios remained strong, with a leverage ratio of 9.7%, a Common Equity Tier 1 ratio of 12.6%, a Tier 1 risk-based capital ratio of 13.5%, and a total risk-based capital ratio of 14.7% at March 31, 2026.

On April 28, 2026, the Board of Directors declared a quarterly cash dividend of $0.29 per share. The dividend will be payable on June 15, 2026, to shareholders of record as of May 29, 2026.

Conference Call

The Company's management will host a conference call today at 2:00 p.m. Eastern Time (8:00 a.m. Hawaii Time) to discuss its first quarter of 2026 financial results. Individuals are encouraged to listen to the live webcast of the presentation by visiting the investor relations page of the Company's website at http://ir.cpb.bank. Alternatively, investors may participate in the live call by dialing 1-800-715-9871 and entering the conference ID: 6299769.

A replay of the call will be available through May 29, 2026, by dialing 1-800-770-2030 and entering the same conference ID: 6299769, and on the Company's website. Information which may be discussed in the conference call is provided in an earnings supplement presentation on the Company's website at http://ir.cpb.bank.

About Central Pacific Financial Corp.

Central Pacific Financial Corp. is a Hawaii-based bank holding company with approximately $7.50 billion in assets as of March 31, 2026. Its primary subsidiary, Central Pacific Bank, operates 27 branches and 55 ATMs in the State of Hawaii. Central Pacific Financial Corp. is listed on the New York Stock Exchange under the symbol "CPF." For additional information, please visit: cpb.bank.

Equal Housing Lender
Member FDIC
NYSE Listed: CPF

Forward-Looking Statements

This document may contain forward-looking statements ("FLS") concerning, among other things: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, payment or nonpayment of dividends, net interest income, capital position, credit losses, net interest margin, or other financial items. These statements may also include the plans, objectives, and expectations of Central Pacific Financial Corp. (the "Company") or its management or Board of Directors, including those relating to business plans, use of capital resources, products or services, and regulatory developments or actions. In addition, such statements may address anticipated economic performance, the expected impact of business initiatives, and the assumptions underlying any of the foregoing.

Words such as "believe," "plan," "anticipate," "aim," "seek," "expect," "intend," "forecast," "hope," "target," "continue," "remain," "estimate," "will," "should," "may," and other similar expressions are intended to identify FLS, although such terminology is not the exclusive means of doing so.

While we believe that our FLS and their underlying assumptions are reasonably based, such statements are inherently subject to risks and uncertainties that may cause actual results to differ materially from expectations. Factors that may lead to such differences, include, but are not limited to: the persistence or resurgence of inflationary pressures in the United States and our market areas, and their effect on market interest rates, economic conditions, and credit quality; the impact of the current U.S. administration’s economic policies, including potential international tariffs, geopolitical instability, trade tensions, and other cost-cutting or fiscal initiatives; the adverse effects of bank failures on customer confidence, deposit behavior, liquidity, and regulatory responses; the effects of pandemics, epidemics, and other public health emergencies, including their impact on Hawaii's tourism and construction sectors and on our borrowers, customers, vendors and employees; supply chain disruptions, labor contract disputes, strikes; adverse trends in the real estate or construction industries, including rising inventory levels or declining property values; deterioration in borrowers' financial performance leading to increased loan delinquencies, asset quality issues, or loan losses; the impact of local, national, and international economic conditions and natural disasters (such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, floods, or earthquakes) on our markets and major industries within Hawaii; weakness in domestic economic conditions, including instability in the financial industry, deterioration in real estate markets, and declines in consumer or business confidence; revisions to estimates of reserve requirements under applicable regulatory and accounting standards; the impact of legislative and regulatory developments, including the Dodd-Frank Act, changing capital and consumer protection rules, and new regulations affecting our operations and competitiveness; the costs and effects of legal and regulatory proceedings, including actual or threatened litigation and the efforts of governmental and regulatory exams and orders, as well as the costs of ongoing or potential compliance efforts; the effect of accounting standard changes adopted by regulatory agencies, the PCAOB, or the FASB, and the cost and resources associated with implementation; changes in trade, monetary, or fiscal policy, including actions by the Federal Reserve; market volatility and monetary fluctuations, including the transition away from the LIBOR Index; declines in our market capitalization or the price of our common stock; the effects and cost of acquisitions, dispositions, or strategic transactions we may make or evaluate; political instability, acts of war or terrorism, or other geopolitical conflicts; shifts in consumer spending, borrowing, and savings behaviors; technological changes and developments; cybersecurity incidents, data privacy breaches, or fraud involving us or third-party vendors; deficiencies in internal control over financial reporting or disclosure controls and procedures, and our ability to remediate them; increased competition among financial institutions and other financial service providers; our ability to achieve efficiency ratio improvement goals; our ability to attract and retain key personnel; changes in our personnel, organization, compensation and benefit plans; and related reputational or regulatory exposures; and risks related to the United States fiscal debt, deficit, and budget uncertainties.

For further information on factors that could cause actual results to differ materially from the expectations or projections expressed in our FLS, please refer to the Company's filings with the U.S. Securities and Exchange Commission, including the Company's most recent Form 10-K, particularly, the discussion of "Risk Factors" set forth therein.

We urge investors to consider all of these factors carefully in evaluating the FLS contained in this document. FLS speak only as of the date on which such statements are made. We undertake no obligation to update any FLS to reflect events or circumstances occurring after the date on which such statements are made, or to reflect the occurrence of unanticipated events, except as required by law.