CENTRAL PACIFIC FINANCIAL REPORTS FIRST QUARTER 2025 EARNINGS OF $17.8 MILLION (Form 8-K)

CENTRAL PACIFIC FINANCIAL REPORTS FIRST QUARTER 2025 EARNINGS OF $17.8 MILLION

Highlights include:

•Net income of $17.8 million, or $0.65 per diluted share

•Return on average assets of 0.96% and return on average equity of 13.04%

•Efficiency ratio improved to 61.16%

•Net interest margin of 3.31% increased by 14 bps from 3.17% in the previous quarter

•Total loans of $5.33 billion increased by $1.7 million from the previous quarter

•Total deposits of $6.60 billion decreased by $48.0 million from the previous quarter. Core deposits of $5.98 billion decreased by $64.6 million from the previous quarter.

•Total risk-based capital and common equity tier 1 ratios of 15.6% and 12.4%, respectively

•The CPF Board of Directors approved a quarterly cash dividend of $0.27 per share

HONOLULU, HI, April 23, 2025 - Central Pacific Financial Corp. (NYSE: CPF) (the "Company"), parent company of Central Pacific Bank (the "Bank" or "CPB"), today reported net income of $17.8 million, or fully diluted earnings per share ("EPS") of $0.65 for the first quarter of 2025, compared to net income of $11.3 million, or EPS of $0.42 in the previous quarter and net income of $12.9 million, or EPS of $0.48 in the year-ago quarter. Results for the previous quarter were impacted by a pre-tax loss related to an investment portfolio repositioning of $9.9 million, as previously reported.

"Our first quarter financial results were solid and continue to trend favorably. Through our balance sheet optimization and strong focus on meeting the needs of our customers, we were successful in continuing to meaningfully grow net interest income and net interest margin. Our asset quality has improved further with a decline in net charge-offs and continued low levels of non-performing assets. With our strong capital, liquidity and credit positions, we believe we are well positioned to navigate the current operating environment," said Arnold Martines, Chairman, President and Chief Executive Officer.

Earnings Highlights

Net interest income was $57.7 million for the first quarter of 2025, which increased by $1.9 million, or 3.5% from the previous quarter, and increased by $7.5 million, or 15.0% from the year-ago quarter. Net interest margin ("NIM") was 3.31% for the first quarter of 2025, an increase of 14 basis points ("bp" or "bps") from the previous quarter and an increase of 48 bps from the year-ago quarter. The sequential quarter increase in net interest income and NIM was primarily due to a 19 bps decline in average rates paid on interest-bearing deposits, combined with a higher average yield earned on investment securities of 24 bps, partially offset by a decline in the average yield earned on loans of 3 bps. The higher average yield earned on investment securities in the first quarter of

2025 was primarily due to the investment securities portfolio repositioning completed in the fourth quarter of 2024. Interest income on investment securities also included $0.7 million in income from an interest rate swap, compared to $0.6 million in the fourth quarter of 2024.

The Company recorded a provision for credit losses of $4.2 million in the first quarter of 2025, compared to a provision of $0.8 million in the previous quarter and a provision of $3.9 million in the year-ago quarter. The provision in the current quarter consisted of a provision for credit losses on loans of $3.9 million and a provision for off-balance sheet exposures of $0.3 million. The increase in the provision from the previous quarter was primarily driven by the macro-economic forecast used in our current expected credit losses model.

Other operating income totaled $11.1 million for the first quarter of 2025, compared to $2.6 million in the previous quarter and $11.2 million in the year-ago quarter. The increase in other operating income from the previous quarter was primarily due to the aforementioned $9.9 million pre-tax loss on an investment securities portfolio repositioning completed in the previous quarter, partially offset by lower income from bank-owned life insurance of $1.5 million.

Other operating expense totaled $42.1 million for the first quarter of 2025, compared to $44.2 million in the previous quarter and $40.6 million in the year-ago quarter. The decrease in other operating expense from the previous quarter was primarily due to an impairment charge on intangible assets of $1.4 million (included in other) recorded in the previous quarter.

The efficiency ratio improved to 61.16% for the first quarter of 2025, compared to 75.65% in the previous quarter and 66.05% in the year-ago quarter. Excluding the aforementioned pre-tax loss related to an investment portfolio repositioning of $9.9 million, the adjusted efficiency ratio (non-GAAP) for the previous quarter was 64.65%.

The effective tax rate was 21.2% for the first quarter of 2025, compared to 15.4% in the previous quarter and 23.5% in the year-ago quarter. The effective tax rate in the fourth quarter of 2024 included additional tax credits recognized and tax return to provision adjustments.

Balance Sheet Highlights

Total assets of $7.41 billion at March 31, 2025 decreased by $66.9 million, or 0.9% from $7.47 billion at December 31, 2024, and was relatively flat compared to $7.41 billion at March 31, 2024. The Company had $276.9 million in cash on its balance sheet and $2.54 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities at March 31, 2025.

Total loans, net of deferred fees and costs, of $5.33 billion at March 31, 2025 was relatively flat compared to $5.33 billion at December 31, 2024, and decreased by $66.9 million, or 1.2% from $5.40 billion at March 31, 2024. Average yields earned on loans during the first quarter of 2025 was 4.88%, compared to 4.91% in the previous quarter and 4.67% in the year-ago quarter.

Total deposits of $6.60 billion at March 31, 2025 decreased by $48.0 million or 0.72% from $6.64 billion at December 31, 2024, and decreased by $22.8 million, or 0.3% from $6.62 billion at March 31, 2024. Core deposits, which include demand deposits, savings and money market deposits and time deposits up to $250,000, totaled $5.98 billion at March 31, 2025, and decreased by $64.6 million, or 1.1% from $6.04 billion at December 31, 2024 and increased by $80.2 million, or 1.4% from $5.90 billion at March 31, 2024. Average rates paid on total deposits during the first quarter of 2025 was 1.08%, compared to 1.21% in the previous quarter and 1.32% in the year-ago quarter.

Asset Quality

Nonperforming assets totaled $11.1 million, or 0.15% of total assets at March 31, 2025, compared to $11.0 million, or 0.15% of total assets at December 31, 2024 and $10.1 million, or 0.14% of total assets at March 31, 2024.

Net charge-offs totaled $2.6 million in the first quarter of 2025, compared to net charge-offs of $3.8 million in the previous quarter, and net charge-offs of $4.5 million in the year-ago quarter. Annualized net charge-offs as a percentage of average loans was 0.20%, 0.29% and 0.34% during the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively.

The allowance for credit losses, as a percentage of total loans was 1.13% at March 31, 2025, compared to 1.11% at December 31, 2024, and 1.18% at March 31, 2024.

Capital

Total shareholders' equity was $557.4 million at March 31, 2025, compared to $538.4 million and $507.2 million at December 31, 2024 and March 31, 2024, respectively.

During the first quarter of 2025, the Company repurchased 77,316 shares of common stock at a total cost of $2.1 million, or $27.09 per share. As of March 31, 2025, $27.9 million in share repurchase authorization remained available under the Company's share repurchase program.

The Company's leverage, common equity tier 1, tier 1 risk-based capital, and total risk-based capital ratios were 9.4%, 12.4%, 13.4%, and 15.6%, respectively, at March 31, 2025, compared to 9.3%, 12.3%, 13.2%, and 15.4%, respectively, at December 31, 2024.

On April 22, 2025, the Company's Board of Directors declared a quarterly cash dividend of $0.27 per share on its outstanding common shares. The dividend will be payable on June 16, 2025 to shareholders of record at the close of business on May 30, 2025.

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 the quarterly 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 (conference ID: 6299769). A playback of the call will be available through May 23, 2025 by dialing 1-800-770-2030 (playback 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 $7.41 billion in assets as of March 31, 2025. Central Pacific Bank, its primary subsidiary, operates 27 branches and 55 ATMs in the State of Hawaii. Central Pacific Financial Corp. is traded on the New York Stock Exchange (NYSE) under the symbol "CPF." For additional information, please visit: cpb.bank

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