Central Pacific Financial — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income totaled $22.8 million ($0.88 diluted EPS) for the third quarter of 2026, compared to $20.8 million ($0.80 diluted EPS) in the prior quarter and $18.6 million ($0.69 diluted EPS) in the same quarter last year.
• Net interest income increased $1.6 million (2.6%) sequentially to $64.5 million and $3.2 million (5.2%) year-over-year to $64.5 million.
• Net interest margin (NIM) expanded 5 basis points sequentially to 3.62% and 13 basis points year-over-year to 3.62%.
• Provision for credit losses was $1.9 million in Q3 2026, down from $4.4 million in the prior quarter and $4.2 million in the same quarter last year.
• Other operating income was $12.4 million, a decrease from $14.6 million in the prior quarter and $13.5 million in the same quarter last year.
• Other operating expense was $44.8 million, down from $46.2 million in the prior quarter and $47.0 million in the same quarter last year.
• The efficiency ratio improved to 58.27% in Q3 2026 from 59.62% in the prior quarter and 62.84% in the same quarter last year.
• Return on average assets (ROA) was 1.22% and return on average equity (ROE) was 15.28%.
• Total assets were $7.45 billion as of September 30, 2026, a decrease of 0.7% from June 30, 2026, and an increase of 0.4% from September 30, 2025.
• Total loans were $5.31 billion, stable from the prior quarter and down 1.0% from September 30, 2025.
• Total deposits were $6.66 billion, down 0.5% from the prior quarter and up 1.3% from September 30, 2025.
• Nonperforming assets were $14.0 million (0.19% of total assets) as of September 30, 2026, down from $16.5 million in the prior quarter.
• Net charge-offs were $2.7 million (0.20% of average loans annualized), consistent with the prior quarter and the same quarter last year.
• The allowance for credit losses on loans was 1.13% of total loans as of September 30, 2026.
• Total shareholders' equity was $581.4 million, a decrease of 2.5% from the prior quarter.
• Long-term debt was $76.5 million as of September 30, 2026, down from $131.5 million at September 30, 2025.

Guidance and Future Outlook:

• The press release does not contain specific forward-looking financial guidance, revenue targets, or earnings forecasts.
• Management stated the company is "well positioned to serve our customers, support our communities, and deliver meaningful value to our shareholders."

Business Segments and Product Lines:

• The company operates 27 branches and 56 ATMs in the State of Hawaii.
• Income from bank-owned life insurance decreased $2.4 million sequentially due to equity market volatility.
• Salaries and employee benefits decreased $1.2 million sequentially, and other expenses decreased $1.0 million, primarily due to lower deferred compensation expenses related to equity market performance.

Market and Competitive Landscape:

• The press release does not provide specific data on market share, competitive positioning, or detailed market trends beyond general references to equity market volatility and interest rate environments.

Risks and Challenges:

• Risks include inflationary pressures, market interest rate fluctuations, U.S. administration economic policies, geopolitical instability, and trade tensions.
• Potential challenges include disruptions in the economy, labor contract disputes, adverse trends in real estate or construction, and deterioration in borrower financial performance.
• Specific risks for the Hawaii market include natural disasters (wildfires, volcanic eruptions, hurricanes, tsunamis, storms, floods, earthquakes) and their impact on tourism and construction sectors.
• Risks also include bank failures affecting customer confidence, regulatory developments, cybersecurity incidents, and changes in accounting standards.

Management Commentary and Tone:

• Arnold Martines, Chairman, President and CEO, stated: "We delivered another quarter of strong financial performance, driven by net interest margin expansion, disciplined expense management, and solid asset quality."
• Management highlighted that the sequential increase in net interest income and NIM was primarily driven by an increase in loan yields and higher average balances and yields earned on investment securities.
• The tone is positive, emphasizing strong performance and disciplined management.

Other Key Points:

• The Board of Directors declared a fourth-quarter cash dividend of $0.31 per share, an increase of 3.3% from the prior quarter. The dividend is payable on December 15, 2026, to shareholders of record as of November 30, 2026.
• The Company repurchased 294,110 shares of common stock at a total cost of $11.2 million during the quarter, at an average price of $38.18 per share.
• $22.0 million remained available under the Company's share repurchase authorization as of September 30, 2026.
• The effective tax rate for the quarter was 24.5%, up from 22.6% in the prior quarter and 21.4% in the same quarter last year, primarily due to an increase in pre-tax income and lower tax-exempt income.
• Regulatory capital ratios remained strong, with a leverage ratio of 9.7%, Common Equity Tier 1 ratio of 12.7%, Tier 1 risk-based capital ratio of 13.6%, and total risk-based capital ratio of 14.8%.
• The decrease in shareholders' equity was primarily attributed to a decline in Accumulated Other Comprehensive Income (AOCI) resulting from a decrease in the fair value of the available-for-sale investment portfolio due to rising market interest rates.
• 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.