OCTOBER 28, 2020 Third Quarter 2020 Earnings Supplement FORWARD LOOKING STATEMENTS This document may contain forward-looking statements concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the payment or nonpayment of dividends, capital position, credit losses, net interest margin or other financial items; statements of plans, objectives and expectations of Central Pacific Financial Corp. or its management or Board of Directors, including those rel ...

Central Pacific Financial Corp. (NYSE:CPF) Q2 2020 Earnings Conference Call July 29, 2020 1:00 PM ET Company Representatives Paul Yonamine - Chairman, Chief Executive Officer Catherine Ngo - President Arnold Martines - Executive Vice President, Chief Banking Officer Anna Hu - Executive Vice President, Chief Credit Officer David Morimoto - Executive Vice President, Chief Financial Officer Conference Call Participants Andrew Liesch - Piper Sandler Jackie Bohlen - KBW David Feaster - Raymond James Laurie Hunsi ...

Financial Performance - Net income for Q2 2020 was $9.9 million, or $0.35 per diluted share, down from $13.5 million, or $0.47 per diluted share in Q2 2019[243]. - For the first half of 2020, net income was $18.2 million, or $0.65 per diluted share, compared to $29.6 million, or $1.03 per diluted share in the same period of 2019[243]. - Pre-tax, pre-provision income for Q2 2020 was $26.5 million, up from $23.8 million in Q2 2019[244]. - Return on average assets decreased to 0.61% in Q2 2020 from 0.92% in Q2 2019[246]. - Return on average shareholders' equity fell to 7.34% in Q2 2020 from 10.73% in Q2 2019[246]. - Net interest income for the three months ended June 30, 2020, was $49.4 million, an increase of 8.4% from $45.6 million in the same period of 2019[306]. - Net interest income for the six months ended June 30, 2020, was $97.4 million, representing a 7.1% increase from $90.9 million in the same period of 2019[306]. Credit Losses and Provisions - The provision for credit losses increased significantly to $11.2 million for Q2 2020, compared to $1.9 million in Q2 2019, reflecting the impact of COVID-19[245]. - The Company expects to incur significant credit losses and increased allowance for credit losses due to the economic impact of COVID-19, particularly affecting borrowers' ability to make loan payments[264]. - Provision for credit losses on loans was $10.6 million for the three months ended June 30, 2020, compared to $1.4 million in the same period of 2019, reflecting a significant increase due to adverse economic conditions from the COVID-19 pandemic[318]. - The Company recorded a provision for credit losses on loans of $20.0 million for the six months ended June 30, 2020, reflecting anticipated deterioration due to the COVID-19 pandemic[365]. - The allowance for credit losses (ACL) increased by $19.4 million, or 40.4%, to $67.3 million as of June 30, 2020[346]. - The allowance for credit losses (ACL) as a percentage of total loans increased from 1.08% at December 31, 2019, to 1.35% at June 30, 2020, and was 1.50% excluding the PPP loan portfolio[367]. Operational Adjustments Due to COVID-19 - The ongoing COVID-19 pandemic has caused significant disruptions, leading to economic instability and affecting the company's operations[248]. - The bank temporarily closed 13 branches during the pandemic, with 22 branches remaining operational[257]. - The Company has implemented COVID-19 relief programs, including loan payment deferrals for residential and commercial customers, with deferrals typically lasting 3 to 6 months[278]. - Loan payment forbearances or deferrals were made for borrowers impacted by the COVID-19 pandemic, totaling $567.9 million, or 11.3% of total loans[361]. - The Company has waived non-CPB ATM fees and early withdrawal fees on time deposits to support customers during the pandemic, although these fees were reinstated on July 1, 2020[267]. Loan and Deposit Trends - As of June 30, 2020, the Company had loan payment deferrals on outstanding balances of $567.9 million, representing 11.3% of total loans (12.7% excluding PPP loans)[283]. - The Company funded over 7,200 PPP loans totaling over $550 million from April 3 to June 30, 2020, receiving gross processing fees of over $21 million[279]. - Total loans increased by $553.9 million, or 12.4%, to $5.00 billion at June 30, 2020, driven by a $526.4 million increase in Paycheck Protection Program loans[346]. - Total deposits increased by $674.7 million, or 13.2%, from $5.12 billion at December 31, 2019, to $5.79 billion at June 30, 2020[370]. - Core deposits totaled $5.02 billion at June 30, 2020, an increase of $764.7 million, or 18.0%, from December 31, 2019[371]. Asset and Equity Growth - Total assets increased to $6,468,129 thousand, up from $5,856,465 thousand, representing a growth of 10.4%[303]. - Total equity increased to $540,804 thousand, compared to $504,749 thousand, reflecting a growth of 7.1%[303]. - Shareholders' equity totaled $544.3 million at June 30, 2020, compared to $528.5 million at December 31, 2019, driven by net income of $18.2 million[374]. - The total shareholders' equity to total assets ratio decreased to 8.21% at June 30, 2020, from 8.79% at December 31, 2019, primarily due to an increase in total assets from PPP loans[375]. Market and Economic Conditions - Daily visitors to Hawaii declined by 99% in May 2020 compared to the same period last year, contributing to an unemployment rate of approximately 13.9% in June 2020[262]. - Total visitor arrivals in Hawaii decreased by 49.5% for the five months ended May 31, 2020, compared to the same prior year period, with April and May seeing a decline of approximately 99%[294]. - The unemployment rate in Hawaii was 13.9% in June 2020, down from 23.5% in May, with a total seasonally adjusted labor force of 612,800[296]. Strategic Initiatives - The RISE2020 initiative, launched in Q2 2019, aims to enhance customer experience and improve shareholder returns, with significant progress made despite COVID-19 challenges[300]. - The development of the new online and mobile banking platforms is in the final stages of pilot testing, with a public launch scheduled for late August 2020[300].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, No Par Value CPF New York Stock Exchange FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF ...

Financial Data and Key Metrics Changes - Net income for Q1 2020 was $8.3 million or $0.29 per diluted share, with a return on average assets of 0.55% and return on average equity of 6.21% [32] - The total provision for credit losses was $11.1 million, influenced by the new CECL methodology and the economic impact of COVID-19 [32] - The allowance for credit losses stood at $59.6 million or 1.32% of outstanding loans [34] Business Line Data and Key Metrics Changes - Total loans increased by $63 million or 1.4% sequentially, primarily from residential and commercial mortgage loans [16] - Core deposits grew by $45 million or 1.1% sequentially, while the average cost of total deposits decreased by five basis points to 36 basis points [16] Market Data and Key Metrics Changes - The bank has seen significant demand for the Paycheck Protection Program (PPP), approving over 4,200 loans totaling nearly $490 million [18] - Approximately $300 million in loan payment deferrals were granted, representing less than 7% of the total loan portfolio [21] Company Strategy and Development Direction - The company is focused on digital initiatives, including the development of new online and mobile banking platforms as part of the RISE2020 initiative [11] - The company is committed to supporting employees, customers, and the community during the COVID-19 crisis, including temporary branch closures and remote work arrangements [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the gradual return of tourism to Hawaii by late summer or early fall, contingent on the pandemic's trajectory [7][54] - The company is prepared to handle the crisis with strong financial, credit, liquidity, and capital provisions [36] Other Important Information - The efficiency ratio increased to 63.9% in Q1 2020, primarily due to a decrease in other operating income [34] - The company has suspended its share repurchase program and implemented cost-saving measures across various operational areas [31] Q&A Session Summary Question: Are you accepting applications from new clients for PPP loans? - The majority of applications received were from existing customers, but non-customers were also accepted to support the broader community [40] Question: How do you view the RISE2020 initiatives amidst expense-saving opportunities? - The company continues to progress with RISE2020, focusing on technology and infrastructure, while postponing non-essential components [42][43] Question: What are your thoughts on the allowance for loan losses? - The allowance for loan losses increased to 132 basis points, with potential for further reserve builds depending on economic conditions [46][47] Question: What is the current sentiment among your customers? - There is significant concern among businesses in the tourism sector, while other sectors like grocery and construction are performing well [49][50] Question: What is the outlook for mortgage banking? - The company projects a strong pipeline for Q2, estimating about $220 million in production driven by unique partnerships and market conditions [61] Question: Can you provide an update on your construction lending? - The construction portfolio is now focused on supporting middle-market affordable condo builds, significantly different from past practices [71]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2019 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission file number: 001-31567 Central Pacific Financial Corp. (Exact name of registrant as specified in its charter) Hawaii 99-0212597 (State or other jurisdiction of incorporation or organi ...

Financial Data and Key Metrics Changes - Net income for Q4 2019 was $14.2 million or $0.50 per diluted share, compared to $14.6 million or $0.51 per diluted share in the previous quarter [11] - For the full year 2019, net income was $58.3 million or $2.03 per diluted share, compared to $59.5 million or $2.01 per diluted share in 2018 [11] - Return on average assets for Q4 was 0.95% and for the full year was 0.99% [11] - The efficiency ratio for Q4 was 62.81%, slightly up from 62.48% in the prior quarter [15] Business Line Data and Key Metrics Changes - Total loans increased by $82 million or 1.9% from the previous quarter and by $371 million or 9.1% year-over-year [9] - Core deposits increased by $103 million or 2.5% sequentially and by $243 million or 6.1% year-over-year [10] - Nonperforming assets were $1.7 million, representing 3 basis points of total assets [10] Market Data and Key Metrics Changes - The Hawaii economy is performing well, with annual visitor arrivals expected to exceed 10 million for the first time [8] - The company reported strong growth in construction activity and the military's growing importance in Hawaii [8] Company Strategy and Development Direction - The company is executing the RISE2020 initiative to enhance customer experience and drive long-term growth [7] - Investments in branch and ATM modernization are underway, with construction at the main branch headquarters [8] - The company aims to increase core deposits through further investments in technology and workforce [22] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the solid financial performance and positive momentum at the end of 2019 [17] - The company anticipates mid-single digit loan growth for 2020 and aims to exceed this guidance [26] - The effective tax rate is expected to be in the 24% to 26% range going forward [15] Other Important Information - The company repurchased 165,700 shares in Q4 2019 and 797,000 shares for the full year, returning $48.5 million in capital to shareholders [6] - The allowance for loan and lease losses was $48.0 million or 1.08% of outstanding loans [14] Q&A Session Summary Question: Margin performance and asset repricing - Management confirmed that the $1.1 million in nonrecurring interest was the only unusual item affecting the margin [19] - There is potential for further downward repricing on the asset side, but the company is pleased with the fourth quarter results [19] Question: Loan growth expectations for 2020 - The company is guiding for mid-single digit loan growth for 2020, with hopes to exceed this guidance [26] Question: Deposit growth strategies - The company plans to grow core deposits through cross-selling and enhancing customer relationships [27] Question: CECL preparations - The company is on track with CECL preparations and plans to disclose a range of reserves in the upcoming 10-K filing [33] Question: Capital return strategy - The company will maintain its quarterly dividend and be opportunistic with share repurchases, having approved a new $30 million repurchase plan [34]

Financial Performance - Net income for the three months ended September 30, 2019, was $14.6 million, or $0.51 per diluted share, compared to $15.2 million, or $0.52 per diluted share for the same period in 2018[198] - Net income for the nine months ended September 30, 2019, was $44.1 million, or $1.53 per diluted share, compared to $43.7 million, or $1.47 per diluted share for the same period in 2018[198] - Return on average assets for the three months ended September 30, 2019, was 0.99%, down from 1.06% in the same period of 2018[200] - Return on average shareholders' equity for the three months ended September 30, 2019, was 11.11%, compared to 12.54% for the same period in 2018[200] Investment and Expenses - The company plans to invest approximately $40 million in the RISE2020 initiative during the remainder of 2019 and throughout 2020[214] - The company expects annual RISE2020-related expenses to approximate $7 million by the start of 2021[214] - The efficiency ratio is expected to be in the 63-65% range in 2019 and 2020, with a long-term target of 57% by the end of 2022[214] Economic Indicators - Hawaii's unemployment rate was 2.7% in September 2019, compared to 2.6% in September 2018, remaining below the national average of 3.5%[206] - Visitor arrivals to Hawaii increased by 5.2% to 7.1 million in the eight months ended August 30, 2019, but visitor spending decreased by 0.5% to $12.1 billion[204] - The median sales price for single-family homes on Oahu was $785,000, a decrease of 0.5% from $789,000 in the same prior year period[207] Asset and Liability Management - Total assets increased to $5,907,207 thousand, up from $5,709,825 thousand, reflecting a growth of $197,382 thousand[218] - Total interest-bearing liabilities reached $3,920,304 thousand, up from $3,802,028 thousand, an increase of $118,276 thousand[218] - Total equity stood at $524,083 thousand, an increase of $39,346 thousand from $484,737 thousand[218] - Total interest-earning assets amounted to $5,527,532 thousand, compared to $5,418,924 thousand, an increase of $108,608 thousand[218] Interest Income and Expense - Net interest income rose to $45,837 thousand, compared to $43,570 thousand, an increase of $2,267 thousand[218] - Interest expense for the three months ended September 30, 2019, was $8.3 million, a 22.3% increase from the same period in 2018[227] - Net interest income for the three months ended September 30, 2019, was $45.8 million, an increase of 5.2% from $43.6 million in the same period of 2018[222] - The net interest margin for the three months ended September 30, 2019, was 3.30%, an increase of 10 basis points from 3.20% in the same period of 2018[229] Loan and Lease Performance - Loans and leases, including loans held for sale, increased to $4,293,455 thousand, up from $3,941,511 thousand, a growth of $351,944 thousand[218] - Average loans and leases increased by $351.9 million for the three months ended September 30, 2019, contributing approximately $3.6 million to the increase in interest income[225] - The Hawaii loan portfolio increased by $229.7 million, or 6.3%, from December 31, 2018, primarily due to increased demand from customers[256] - The residential mortgage portfolio grew by $130.5 million, or 9.1%, while the commercial mortgage portfolio increased by $93.6 million, or 9.0%[255] Nonperforming Assets and Charge-offs - Nonperforming assets decreased to $1.36 million at September 30, 2019, down from $2.74 million at December 31, 2018, representing a reduction of 50.3%[263] - The total nonperforming assets, accruing loans delinquent for 90 days or more, and restructured loans still accruing interest totaled $10.45 million at September 30, 2019, down 35.2% from $16.14 million at December 31, 2018[263] - The total charge-offs for the three months ended September 30, 2019, were $2.63 million, compared to $2.49 million for the same period in 2018[268] Operating Income and Expenses - Total other operating income for the three months ended September 30, 2019, was $10.3 million, a decrease of $0.6 million, or 5.1%, from $10.8 million in the prior year[237] - Total other operating expense for the three months ended September 30, 2019, was $34.9 million, an increase of $0.9 million, or 2.7%, from $34.0 million in the prior year[243] - Salaries and employee benefits accounted for $20.6 million in the three months ended September 30, 2019, reflecting an 8.5% increase from $19.0 million in the prior year[243] Capital and Dividends - Shareholders' equity totaled $525.2 million at September 30, 2019, an increase from $491.7 million at December 31, 2018, driven by net income of $44.1 million[276] - The cash dividend declared on October 22, 2019, was $0.23 per share, a 9.5% increase from the previous year's $0.21 per share[280] - The total risk-based capital ratio was 13.7% as of September 30, 2019, exceeding the minimum required ratio of 8.0%[290] Liquidity Management - The bank's liquidity management aims to balance sources and uses of funds to meet cash requirements for loans and deposits[295] - The bank has additional unused borrowings available at the Federal Reserve discount window of $65.6 million as of September 30, 2019[298] - The carrying value of real estate loans securing FHLB advances was $2.42 billion as of September 30, 2019[297]

Financial Data and Key Metrics Changes - Net income for Q3 2019 was $14.6 million or $0.51 per diluted share, compared to $13.5 million or $0.47 per diluted share in the previous quarter [9] - Return on average assets was 0.99% and return on average equity was 11.11% [9] - Net interest income increased by $0.3 million to $45.6 million sequentially, with a net interest margin of 3.30% [9][10] - Efficiency ratio improved to 62.5% from 65.1% in the prior quarter [10] Business Line Data and Key Metrics Changes - Total loans increased by $121 million or 2.8% from the previous quarter and by $390 million or 9.8% year-over-year [7] - Non-performing assets were $1.4 million, representing 2 basis points of total assets [8] - Total deposits increased by 1.2% sequentially and by 0.7% year-over-year, with core deposits contributing almost all growth [8] Market Data and Key Metrics Changes - Visitor arrivals in Hawaii increased by 5.2% year-to-date as of August, while visitor expenditures decreased by 0.5% [6] - Forecasted job growth for 2019 is 0.4%, real personal income growth is 1.2%, and real GDP growth is 1.1% [6] Company Strategy and Development Direction - The company launched RISE2020, a comprehensive initiative aimed at enhancing customer experience and driving long-term growth [6] - Plans for Q4 include launching a new website, upgrading online and mobile banking platforms, and implementing a commercial loan origination system [6] - The company is focusing on branch modernization and digital banking initiatives [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a positive momentum and achieving enhanced goals through the RISE2020 initiative [12] - Economic conditions in Hawaii are projected to grow, albeit at a slower rate than previous years, with construction activity as a bright spot [6] Other Important Information - The company repurchased 140,600 shares during the quarter, totaling 631,300 shares year-to-date, returning $37.2 million in capital to shareholders [5] Q&A Session Summary Question: Impact of outsourcing mortgage servicing on revenue and expenses - Management indicated that outsourcing was aimed at enhancing regulatory compliance and allowing employees to focus on mortgage growth, not primarily for cost reduction [14] Question: Outlook on loan yields and net interest margin - New loan yields for the quarter were 4.12%, with guidance for net interest margin maintained at 3.25% to 3.35% [16][17] Question: Future of the investment securities portfolio - The investment portfolio is expected to remain at 18% to 20% of total assets, with no significant further rundown anticipated [17] Question: Expense outlook for Q4 and 2020 - Expected operating expenses for Q4 are $35 million to $36 million, with a range of $36 million to $38 million for 2020, incorporating RISE2020 investments [21][34] Question: Progress on Japanese deposit accounts - Japanese deposits increased to approximately $545 million, with continued focus on this market opportunity [28] Question: Traction on new online and mobile banking platform - The new platform is on schedule for rollout in early 2020, with no traction yet as it has not been established [26] Question: Charge-offs in consumer category - Charge-offs were attributed to a mix of Prosper and the Hawaii consumer portfolio, with the Prosper balance holding steady around $74 million [40][41] Question: Commercial loan growth outlook - Management expressed optimism for C&I growth in the fourth quarter and next year, despite medium loan growth in Hawaii [44]

Financial Performance - Net income for Q2 2019 was $13.5 million, or $0.47 per diluted share, compared to $14.2 million, or $0.48 per diluted share in Q2 2018[191]. - For the six months ended June 30, 2019, net income was $29.6 million, or $1.03 per diluted share, compared to $28.5 million, or $0.95 per diluted share in the same period of 2018[191]. - The return on average assets for 2019 was 0.92%, down from 1.00% in 2018, while the return on average shareholders' equity was 10.73% in 2019, down from 11.83% in 2018[192]. - The company recorded income tax expenses of $4.4 million and $9.5 million for the three and six months ended June 30, 2019, respectively, compared to $3.9 million and $7.7 million in the same prior year periods[237]. Operational Initiatives - The company plans to invest approximately $40 million in the RISE2020 initiative, which aims to enhance customer experience and drive long-term growth[205]. - RISE2020 is expected to increase annual operating expenses by approximately $7 million when fully implemented by the start of 2021[205]. - The company expects its efficiency ratio to be in the 63-65% range in 2019 and 2020, targeting a 15% return on average shareholders' equity by the end of 2022[205]. Asset and Liability Management - Total assets increased to $5,856,465,000 from $5,663,697,000, reflecting a growth of 3.4%[211]. - Total equity grew to $504,749,000 from $480,985,000, indicating an increase of 4.3%[211]. - Total interest-bearing liabilities increased to $3,897,619,000, compared to $3,776,053,000, marking a rise of 3.2%[211]. - Total loans and leases, including loans held for sale, reached $4,171,558,000, an increase of 8.7% from $3,836,739,000[211]. Interest Income and Expenses - Net interest income rose to $45,594,000, up from $42,920,000, representing an increase of 6.2%[211]. - The interest rate spread improved to 3.07%, up by 0.06% compared to the previous period[211]. - Interest expense for the three months ended June 30, 2019, was $8.7 million, an increase of 49.5% from the same period in 2018[219]. - The net interest margin improved to 3.33%, up by 0.13% from the previous period[211]. Market Conditions - Hawaii's unemployment rate was 2.8% in June 2019, compared to 2.4% in June 2018, remaining below the national average of 3.7%[199]. - Visitor arrivals in Hawaii increased by 4.2% to 5.2 million in the first half of 2019, but visitor spending decreased by 2.0% to $8.9 billion[197]. - The median sales price for single-family homes on Oahu was $775,000 in the first half of 2019, a decrease of 0.5% from the same period in 2018[200]. Nonperforming Assets and Loan Quality - Total nonperforming assets decreased to $1.258 million at June 30, 2019, down from $2.737 million at December 31, 2018, representing a reduction of 54.0%[253]. - Nonaccrual loans totaled $982 thousand at June 30, 2019, a decrease of 57.7% from $2.323 million at December 31, 2018[253]. - The allowance for loan and lease losses was $48.267 million at June 30, 2019, compared to $47.916 million at December 31, 2018, reflecting a provision of $1.404 million for the three months ended June 30, 2019[257]. Shareholder Returns - The Company declared a cash dividend of $0.23 per share on July 23, 2019, a 9.5% increase from the previous year's dividend of $0.21 per share[269]. - The Company repurchased approximately 1.7% of its common stock outstanding as of December 31, 2018, totaling 490,700 shares at a cost of $14.0 million in the first half of 2019[265][272]. - The Company has $29.9 million remaining available for repurchase under its newly authorized share repurchase program as of June 30, 2019[272]. Risk Management - The primary market risk exposure for the company is interest rate risk, managed through asset/liability management strategies[294]. - Interest rate risk sensitivity analysis indicated a potential increase in net interest income of 1.54% with a 100 basis point increase in rates and a decrease of 4.24% with a 100 basis point decrease[285][286]. - The simulation model used to measure interest rate risk indicates that the mix of rate-sensitive assets and liabilities would not exceed established policy limits for net interest income fluctuations[295].