Central Pacific Financial Reports Third Quarter 2025 Earnings of $18.6 Million

3rd Quarter Highlights:

• Net income of $18.6 million, or $0.69 per diluted share.
• Adjusted net income (non-GAAP), excluding $1.5 million in pre-tax expenses related to the consolidation of the Company's operations center, was $19.7 million, or $0.73 per diluted share.
• Return on average assets of 1.01%; return on average equity of 12.89%
• Net interest margin of 3.49%, increased by 5 bps from 3.44% in the prior quarter
• Total loans of $5.37 billion, increased by $77.4 million from the prior quarter
• Total deposits of $6.58 billion, increased by $32.7 million from the prior quarter
• Repurchased 78,255 shares of common stock at a total cost of $2.3 million during the quarter, and 258,648 shares at a total cost of $7.0 million year-to-date

Other Highlights:

• Central Pacific partnered with The Kyoto Shinkin Bank to expand its presence in Japan by fostering relationship-building opportunities among small to mid-sized customers of both institutions
• Central Pacific to redeem $55.0 million in subordinated notes at par during the fourth quarter
• CPF Board of Directors approved an increase in the quarterly cash dividend to $0.28 per share

Central Pacific Financial Corp. (NYSE:CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $18.6 million, or $0.69 per fully diluted earnings share ("EPS"), for the third quarter of 2025. This compares to net income of $18.3 million, or EPS of $0.67, in the prior quarter and $13.3 million, or EPS of $0.49, in the same quarter last year. Results for the third quarter of 2025 included $1.5 million in pre-tax expenses related to the consolidation of the Company's former operations center into its main office. Excluding this item, adjusted net income (non-GAAP) for the third quarter of 2025 was $19.7 million, or EPS (non-GAAP) of $0.73.

"Central Pacific delivered another strong quarter, highlighted by continued margin expansion, solid earnings, and growth in both loans and deposits," said Arnold Martines, Chairman, President and CEO. "Our net interest margin increased to 3.49%, reflecting disciplined balance sheet management and improved asset yields. With our strong earnings and capital position, in the fourth quarter we will redeem our subordinated debt and increase our quarterly cash dividend. Additionally, our new partnership with Kyoto Shinkin Bank marks an exciting step forward in deepening Hawaii–Japan business ties and expanding our international reach. These achievements reflect our continued positive momentum and commitment to providing exceptional service to our customers, and delivering long-term value to our shareholders."

Earnings Highlights

Net interest income for the third quarter of 2025 totaled $61.3 million, which increased by $1.5 million, or 2.5% from the prior quarter, and increased by $7.5 million, or 13.8%, compared to the same quarter last year. Net interest margin ("NIM") for the third quarter of 2025 was 3.49%, an increase of 5 basis points ("bp" or "bps") from the prior quarter, and an increase of 42 bps from the same quarter last year. The sequential quarter increase in net interest income and NIM was primarily driven by higher average yields earned on loans, up 5 bps, and investment securities, up 3 bps, partially offset by a 2 bps increase in average rates paid on interest-bearing deposits.

The Company recorded a provision for credit losses of $4.2 million in the third quarter of 2025, compared to a provision of $5.0 million in the prior quarter, and a provision of $2.8 million in the same quarter last year. The current quarter provision for credit losses included $3.4 million for credit losses on loans and $0.8 million for off-balance sheet exposures. The decrease from prior quarter was primarily driven by lower net charge-offs.

Other operating income for the third quarter of 2025 totaled $13.5 million, compared to $13.0 million in the prior quarter, and $12.7 million in the same quarter last year. The increase was largely driven by a $0.5 million increase in investment services income, included in other service charges and fees.

Other operating expense for the third quarter of 2025 totaled $47.0 million, compared to $43.9 million in the prior quarter, and $46.7 million in the same quarter last year. The increase was primarily attributable to higher salaries and employee benefits of $2.1 million related to incentive accruals and commissions, and $1.5 million in one-time expenses related to the operations center consolidation.

The efficiency ratio was 62.84% in the third quarter of 2025, compared to 60.36% in the prior quarter and 70.12% in the same quarter last year. Excluding the $1.5 million in expenses related to the operations center consolidation, the adjusted efficiency ratio (non-GAAP) was 60.81% for the third quarter of 2025.

The effective tax rate for the third quarter of 2025 was 21.4%, compared to 23.5% in the prior quarter, and 22.0% in the same quarter last year. The decrease in the Company's effective tax rate in the third quarter of 2025 was primarily attributable to the impact of the donation of real estate in connection with the consolidation of its operations center, and an increase in projected tax-exempt income.

Balance Sheet Highlights

As of September 30, 2025, total assets were $7.42 billion, which increased by $51.9 million, or 0.7% from $7.37 billion at June 30, 2025, and an increase of $6.0 million, or 0.08% from $7.42 billion at September 30, 2024.

Total loans, net of deferred fees and costs, were $5.37 billion at September 30, 2025, which increased by $77.4 million, or 1.5% from $5.29 billion at June 30, 2025, and increased by $24.6 million, or 0.5% from $5.34 billion at September 30, 2024. The average yield earned on loans during the third quarter of 2025 was 5.01%, compared to 4.96% in the prior quarter and 4.89% in the same quarter last year.

Total deposits were $6.58 billion at September 30, 2025, which increased by $32.7 million or 0.5% from $6.54 billion at June 30, 2025, and decreased by $5.3 million, or 0.1% from $6.58 billion at September 30, 2024. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.98 billion at September 30, 2025. Core deposits increased by $24.6 million, or 0.4% from $5.96 billion at June 30, 2025, and increased by $15.2 million, or 0.3% from $5.97 billion at September 30, 2024. The average rate paid on total deposits during the third quarter of 2025 was 1.02%, compared to 1.02% in the prior quarter, and 1.32% in the same quarter last year.

Asset Quality

Nonperforming assets totaled $14.3 million, or 0.19% of total assets at September 30, 2025, compared to $14.9 million, or 0.20% of total assets at June 30, 2025 and $11.6 million, or 0.16% of total assets at September 30, 2024.

Net charge-offs in the third quarter of 2025 totaled $2.7 million, compared to net charge-offs of $4.7 million in the prior quarter, and net charge-offs of $3.6 million in the same quarter last year. The decrease in net charge-offs was primarily due to a $2.0 million full charge-off of a commercial and industrial loan during the second quarter of 2025. On an annualized basis, net charge-offs as a percentage of average loans was 0.20% in the third quarter of 2025, compared to 0.35% in the prior quarter, and 0.27% in the same quarter last year.

The allowance for credit losses on loans was 1.13% of total loans as of September 30, 2025, compared to 1.13% at June 30, 2025, and 1.15% at September 30, 2024.

Capital

Total shareholders' equity at September 30, 2025 was $588.1 million, compared to $568.9 million at June 30, 2025 and $543.7 million at September 30, 2024.

During the third quarter of 2025, the Company repurchased 78,255 shares of common stock at a total cost of $2.3 million, or an average price of $29.95 per share. As of September 30, 2025, $23.0 million remained available under the Company's share repurchase authorization.

The Company's regulatory capital ratios remained strong, with 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 15.7% at September 30, 2025.

On October 1, 2025, the Company notified holders of its 4.75% fixed-to-floating rate subordinated notes due 2030, that it would be redeeming the notes in full on the November 1, 2025 call date. These notes, which currently total $55.0 million in principal outstanding, will be redeemed at par.

On October 28, 2025, the Board of Directors declared a quarterly cash dividend of $0.28 per share. The dividend represents an increase of 3.7% from $0.27 per share in the third quarter of 2025 and will be payable on December 15, 2025, to shareholders of record as of November 28, 2025.

Strategic Partnership

On October 6, 2025, Central Pacific Bank ("CPB") entered into a strategic partnership with The Kyoto Shinkin Bank ("KSB"), with the signing of a Memorandum of Understanding, to create a stronger economic bridge between Hawaii and Japan. The partnership will expand business opportunities and connect customers of both institutions across the Pacific for the benefit of both banks.

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 third quarter of 2025 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 November 28, 2025, 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 $7.42 billion in assets as of September 30, 2025. 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.

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