株探米国株
英語
エドガーで原本を確認する
000070134712/312024Q3FALSEhttp://fasb.org/us-gaap/2023#InterestReceivablehttp://fasb.org/us-gaap/2023#InterestReceivablehttp://fasb.org/us-gaap/2023#InterestReceivablehttp://www.centralpacificbank.com/20240930#MortgageBankinghttp://www.centralpacificbank.com/20240930#OtherNoninterestIncomehttp://www.centralpacificbank.com/20240930#MortgageBankinghttp://www.centralpacificbank.com/20240930#OtherNoninterestIncomehttp://www.centralpacificbank.com/20240930#OtherServiceChargesAndFeeshttp://www.centralpacificbank.com/20240930#MortgageBankinghttp://www.centralpacificbank.com/20240930#OtherServiceChargesAndFeeshttp://www.centralpacificbank.com/20240930#MortgageBankinghttp://www.centralpacificbank.com/20240930#OtherNoninterestIncomehttp://www.centralpacificbank.com/20240930#OtherServiceChargesAndFeeshttp://fasb.org/us-gaap/2023#InterestAndDividendIncomeOperatinghttp://fasb.org/us-gaap/2023#InterestAndDividendIncomeOperatinghttp://fasb.org/us-gaap/2023#InterestIncomeExpenseNethttp://fasb.org/us-gaap/2023#InterestIncomeExpenseNethttp://fasb.org/us-gaap/2023#DebtSecuritiesAvailableForSaleExcludingAccruedInterestP2YP3Yhttp://fasb.org/us-gaap/2023#OccupancyNethttp://fasb.org/us-gaap/2023#OccupancyNethttp://fasb.org/us-gaap/2023#OccupancyNethttp://fasb.org/us-gaap/2023#OccupancyNetxbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:purecpf:securitycpf:loancpf:propertycpf:segmentcpf:period00007013472024-01-012024-09-3000007013472024-10-1800007013472024-09-3000007013472023-12-3100007013472024-07-012024-09-3000007013472023-07-012023-09-3000007013472023-01-012023-09-300000701347cpf:CommonSharesOutstandingMember2023-12-310000701347us-gaap:CommonStockMember2023-12-310000701347us-gaap:AdditionalPaidInCapitalMember2023-12-310000701347us-gaap:RetainedEarningsMember2023-12-310000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310000701347us-gaap:RetainedEarningsMember2024-01-012024-03-3100007013472024-01-012024-03-310000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310000701347cpf:CommonSharesOutstandingMember2024-01-012024-03-310000701347us-gaap:CommonStockMember2024-01-012024-03-310000701347us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310000701347cpf:CommonSharesOutstandingMember2024-03-310000701347us-gaap:CommonStockMember2024-03-310000701347us-gaap:AdditionalPaidInCapitalMember2024-03-310000701347us-gaap:RetainedEarningsMember2024-03-310000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-3100007013472024-03-310000701347us-gaap:RetainedEarningsMember2024-04-012024-06-3000007013472024-04-012024-06-300000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300000701347cpf:CommonSharesOutstandingMember2024-04-012024-06-300000701347us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300000701347cpf:CommonSharesOutstandingMember2024-06-300000701347us-gaap:CommonStockMember2024-06-300000701347us-gaap:AdditionalPaidInCapitalMember2024-06-300000701347us-gaap:RetainedEarningsMember2024-06-300000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-3000007013472024-06-300000701347us-gaap:RetainedEarningsMember2024-07-012024-09-300000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300000701347cpf:CommonSharesOutstandingMember2024-07-012024-09-300000701347us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300000701347cpf:CommonSharesOutstandingMember2024-09-300000701347us-gaap:CommonStockMember2024-09-300000701347us-gaap:AdditionalPaidInCapitalMember2024-09-300000701347us-gaap:RetainedEarningsMember2024-09-300000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300000701347cpf:CommonSharesOutstandingMember2022-12-310000701347us-gaap:CommonStockMember2022-12-310000701347us-gaap:AdditionalPaidInCapitalMember2022-12-310000701347us-gaap:RetainedEarningsMember2022-12-310000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-3100007013472022-12-310000701347us-gaap:RetainedEarningsMember2023-01-012023-03-3100007013472023-01-012023-03-310000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310000701347cpf:CommonSharesOutstandingMember2023-01-012023-03-310000701347us-gaap:CommonStockMember2023-01-012023-03-310000701347us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310000701347cpf:CommonSharesOutstandingMember2023-03-310000701347us-gaap:CommonStockMember2023-03-310000701347us-gaap:AdditionalPaidInCapitalMember2023-03-310000701347us-gaap:RetainedEarningsMember2023-03-310000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-3100007013472023-03-310000701347us-gaap:RetainedEarningsMember2023-04-012023-06-3000007013472023-04-012023-06-300000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300000701347cpf:CommonSharesOutstandingMember2023-04-012023-06-300000701347us-gaap:CommonStockMember2023-04-012023-06-300000701347us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300000701347cpf:CommonSharesOutstandingMember2023-06-300000701347us-gaap:CommonStockMember2023-06-300000701347us-gaap:AdditionalPaidInCapitalMember2023-06-300000701347us-gaap:RetainedEarningsMember2023-06-300000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-3000007013472023-06-300000701347us-gaap:RetainedEarningsMember2023-07-012023-09-300000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000701347cpf:CommonSharesOutstandingMember2023-07-012023-09-300000701347us-gaap:CommonStockMember2023-07-012023-09-300000701347us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300000701347cpf:CommonSharesOutstandingMember2023-09-300000701347us-gaap:CommonStockMember2023-09-300000701347us-gaap:AdditionalPaidInCapitalMember2023-09-300000701347us-gaap:RetainedEarningsMember2023-09-300000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-3000007013472023-09-3000007013472023-10-012023-12-310000701347us-gaap:USStatesAndPoliticalSubdivisionsMember2024-09-300000701347us-gaap:CorporateDebtSecuritiesMember2024-09-300000701347us-gaap:USTreasurySecuritiesMember2024-09-300000701347cpf:MortgageBackedSecuritiesResidentialUSGovernmentSponsoredEntitiesMember2024-09-300000701347cpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2024-09-300000701347us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2024-09-300000701347cpf:MortgageBackedSecuritiesCommercialNonGovernmentAgenciesMember2024-09-300000701347us-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310000701347us-gaap:CorporateDebtSecuritiesMember2023-12-310000701347us-gaap:USTreasurySecuritiesMember2023-12-310000701347cpf:MortgageBackedSecuritiesResidentialUSGovernmentSponsoredEntitiesMember2023-12-310000701347cpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2023-12-310000701347us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2023-12-310000701347cpf:MortgageBackedSecuritiesCommercialNonGovernmentAgenciesMember2023-12-310000701347us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-09-300000701347us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2024-07-012024-09-300000701347us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2024-01-012024-09-300000701347us-gaap:AccumulatedNetInvestmentGainLossAttributableToNoncontrollingInterestMember2024-07-012024-09-300000701347us-gaap:AccumulatedNetInvestmentGainLossAttributableToNoncontrollingInterestMember2024-01-012024-09-300000701347us-gaap:AccumulatedNetInvestmentGainLossAttributableToNoncontrollingInterestMember2023-07-012023-09-300000701347us-gaap:AccumulatedNetInvestmentGainLossAttributableToNoncontrollingInterestMember2023-01-012023-09-300000701347us-gaap:AssetPledgedAsCollateralWithoutRightMemberus-gaap:MortgageBackedSecuritiesMember2024-09-300000701347us-gaap:AssetPledgedAsCollateralWithoutRightMemberus-gaap:MortgageBackedSecuritiesMember2023-12-310000701347us-gaap:ResidentialMortgageBackedSecuritiesMember2024-09-300000701347cpf:MortgagebackedSecuritiesIssuedbyPrivateEnterprisesResidentialMember2024-09-300000701347us-gaap:CommercialMortgageBackedSecuritiesMember2024-09-300000701347us-gaap:ResidentialMortgageBackedSecuritiesMember2023-12-310000701347cpf:MortgagebackedSecuritiesIssuedbyPrivateEnterprisesResidentialMember2023-12-310000701347us-gaap:CommercialMortgageBackedSecuritiesMember2023-12-310000701347cpf:CommercialAndIndustrialPortfolioSegmentMember2024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMember2023-12-310000701347us-gaap:ConstructionLoansMembercpf:RealEstatePortfolioSegmentMember2024-09-300000701347us-gaap:ConstructionLoansMembercpf:RealEstatePortfolioSegmentMember2023-12-310000701347cpf:ResidentialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2024-09-300000701347cpf:ResidentialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2023-12-310000701347us-gaap:HomeEquityLoanMembercpf:RealEstatePortfolioSegmentMember2024-09-300000701347us-gaap:HomeEquityLoanMembercpf:RealEstatePortfolioSegmentMember2023-12-310000701347cpf:CommercialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2024-09-300000701347cpf:CommercialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2023-12-310000701347us-gaap:ConsumerPortfolioSegmentMember2024-09-300000701347us-gaap:ConsumerPortfolioSegmentMember2023-12-310000701347cpf:ConsumerUnsecuredLoanMemberus-gaap:ConsumerPortfolioSegmentMember2024-07-012024-09-300000701347cpf:ConsumerAutomobileLoanMemberus-gaap:ConsumerPortfolioSegmentMember2024-07-012024-09-300000701347us-gaap:ConsumerPortfolioSegmentMember2024-07-012024-09-300000701347cpf:ConsumerUnsecuredLoanMemberus-gaap:ConsumerPortfolioSegmentMember2024-01-012024-09-300000701347cpf:ConsumerAutomobileLoanMemberus-gaap:ConsumerPortfolioSegmentMember2024-01-012024-09-300000701347us-gaap:ConsumerPortfolioSegmentMember2024-01-012024-09-300000701347cpf:ConsumerUnsecuredLoanMemberus-gaap:ConsumerPortfolioSegmentMember2023-01-012023-09-300000701347cpf:ConsumerAutomobileLoanMemberus-gaap:ConsumerPortfolioSegmentMember2023-01-012023-09-300000701347us-gaap:ConsumerPortfolioSegmentMember2023-01-012023-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:ConstructionLoansMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:ConstructionLoansMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:ConstructionLoansMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:ConstructionLoansMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:ResidentialMortgageMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:ResidentialMortgageMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:ResidentialMortgageMember2024-09-300000701347us-gaap:ResidentialMortgageMembercpf:RealEstatePortfolioSegmentMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:ResidentialMortgageMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:HomeEquityLoanMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:HomeEquityLoanMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:HomeEquityLoanMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:HomeEquityLoanMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:CommercialRealEstateMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialRealEstateMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:CommercialRealEstateMember2024-09-300000701347us-gaap:CommercialRealEstateMembercpf:RealEstatePortfolioSegmentMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:CommercialRealEstateMember2024-09-300000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2024-09-300000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2024-09-300000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2024-09-300000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2024-09-300000701347us-gaap:FinancingReceivables30To59DaysPastDueMember2024-09-300000701347us-gaap:FinancingReceivables60To89DaysPastDueMember2024-09-300000701347us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2024-09-300000701347us-gaap:FinancialAssetNotPastDueMember2024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-12-310000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-12-310000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-310000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:ConstructionLoansMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:ConstructionLoansMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:ConstructionLoansMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:ConstructionLoansMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:ResidentialMortgageMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:ResidentialMortgageMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:ResidentialMortgageMember2023-12-310000701347us-gaap:ResidentialMortgageMembercpf:RealEstatePortfolioSegmentMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:ResidentialMortgageMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:HomeEquityLoanMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:HomeEquityLoanMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:HomeEquityLoanMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:HomeEquityLoanMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:CommercialRealEstateMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialRealEstateMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:CommercialRealEstateMember2023-12-310000701347us-gaap:CommercialRealEstateMembercpf:RealEstatePortfolioSegmentMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:CommercialRealEstateMember2023-12-310000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-12-310000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-12-310000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-310000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-12-310000701347us-gaap:FinancingReceivables30To59DaysPastDueMember2023-12-310000701347us-gaap:FinancingReceivables60To89DaysPastDueMember2023-12-310000701347us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-310000701347us-gaap:FinancialAssetNotPastDueMember2023-12-310000701347cpf:A14FamilyResidentialPropertiesMembercpf:RealEstatePortfolioSegmentMembercpf:ResidentialRealEstateLoanMember2024-09-300000701347cpf:NonfarmNonresidentialPropertiesMembercpf:RealEstatePortfolioSegmentMembercpf:ResidentialRealEstateLoanMember2024-09-300000701347cpf:A14FamilyResidentialPropertiesMembercpf:RealEstatePortfolioSegmentMemberus-gaap:HomeEquityLoanMember2024-09-300000701347cpf:NonfarmNonresidentialPropertiesMembercpf:RealEstatePortfolioSegmentMemberus-gaap:HomeEquityLoanMember2024-09-300000701347cpf:A14FamilyResidentialPropertiesMember2024-09-300000701347cpf:NonfarmNonresidentialPropertiesMember2024-09-300000701347cpf:A14FamilyResidentialPropertiesMembercpf:RealEstatePortfolioSegmentMembercpf:ResidentialRealEstateLoanMember2023-12-310000701347cpf:NonfarmNonresidentialPropertiesMembercpf:RealEstatePortfolioSegmentMembercpf:ResidentialRealEstateLoanMember2023-12-310000701347cpf:A14FamilyResidentialPropertiesMembercpf:RealEstatePortfolioSegmentMemberus-gaap:HomeEquityLoanMember2023-12-310000701347cpf:NonfarmNonresidentialPropertiesMembercpf:RealEstatePortfolioSegmentMemberus-gaap:HomeEquityLoanMember2023-12-310000701347cpf:A14FamilyResidentialPropertiesMembercpf:RealEstatePortfolioSegmentMembercpf:CommercialRealEstateLoanMember2023-12-310000701347cpf:NonfarmNonresidentialPropertiesMembercpf:RealEstatePortfolioSegmentMembercpf:CommercialRealEstateLoanMember2023-12-310000701347cpf:A14FamilyResidentialPropertiesMember2023-12-310000701347cpf:NonfarmNonresidentialPropertiesMember2023-12-310000701347us-gaap:NonperformingFinancingReceivableMember2024-09-300000701347us-gaap:NonperformingFinancingReceivableMember2023-12-310000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:PassMember2024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:SpecialMentionMember2024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:SubstandardMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:PassMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMembercpf:ResidentialRealEstateLoanMemberus-gaap:PassMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMembercpf:ResidentialRealEstateLoanMemberus-gaap:SubstandardMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:PassMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:SubstandardMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMembercpf:CommercialRealEstateLoanMemberus-gaap:PassMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMembercpf:CommercialRealEstateLoanMemberus-gaap:SpecialMentionMember2024-09-300000701347cpf:RealEstatePortfolioSegmentMembercpf:CommercialRealEstateLoanMemberus-gaap:SubstandardMember2024-09-300000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:PassMember2024-09-300000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:SubstandardMember2024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:PassMember2023-12-310000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:SpecialMentionMember2023-12-310000701347cpf:CommercialAndIndustrialPortfolioSegmentMemberus-gaap:SubstandardMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:PassMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:ConstructionLoansMemberus-gaap:SpecialMentionMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMembercpf:ResidentialRealEstateLoanMemberus-gaap:PassMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMembercpf:ResidentialRealEstateLoanMemberus-gaap:SpecialMentionMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMembercpf:ResidentialRealEstateLoanMemberus-gaap:SubstandardMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:PassMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMemberus-gaap:HomeEquityLoanMemberus-gaap:SubstandardMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMembercpf:CommercialRealEstateLoanMemberus-gaap:PassMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMembercpf:CommercialRealEstateLoanMemberus-gaap:SpecialMentionMember2023-12-310000701347cpf:RealEstatePortfolioSegmentMembercpf:CommercialRealEstateLoanMemberus-gaap:SubstandardMember2023-12-310000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:PassMember2023-12-310000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:SubstandardMember2023-12-310000701347us-gaap:ConsumerPortfolioSegmentMemberus-gaap:UnlikelyToBeCollectedFinancingReceivableMember2023-12-310000701347cpf:CommercialAndIndustrialPortfolioSegmentMember2024-01-012024-09-300000701347cpf:RealEstatePortfolioSegmentMember2024-01-012024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMember2023-01-012023-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMember2024-06-300000701347us-gaap:ConstructionLoansMembercpf:RealEstatePortfolioSegmentMember2024-06-300000701347cpf:ResidentialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2024-06-300000701347us-gaap:HomeEquityLoanMembercpf:RealEstatePortfolioSegmentMember2024-06-300000701347cpf:CommercialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2024-06-300000701347us-gaap:ConsumerPortfolioSegmentMember2024-06-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMember2024-07-012024-09-300000701347us-gaap:ConstructionLoansMembercpf:RealEstatePortfolioSegmentMember2024-07-012024-09-300000701347cpf:ResidentialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2024-07-012024-09-300000701347us-gaap:HomeEquityLoanMembercpf:RealEstatePortfolioSegmentMember2024-07-012024-09-300000701347cpf:CommercialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2024-07-012024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMember2023-06-300000701347us-gaap:ConstructionLoansMembercpf:RealEstatePortfolioSegmentMember2023-06-300000701347cpf:ResidentialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2023-06-300000701347us-gaap:HomeEquityLoanMembercpf:RealEstatePortfolioSegmentMember2023-06-300000701347cpf:CommercialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2023-06-300000701347us-gaap:ConsumerPortfolioSegmentMember2023-06-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMember2023-07-012023-09-300000701347us-gaap:ConstructionLoansMembercpf:RealEstatePortfolioSegmentMember2023-07-012023-09-300000701347cpf:ResidentialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2023-07-012023-09-300000701347us-gaap:HomeEquityLoanMembercpf:RealEstatePortfolioSegmentMember2023-07-012023-09-300000701347cpf:CommercialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2023-07-012023-09-300000701347us-gaap:ConsumerPortfolioSegmentMember2023-07-012023-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMember2023-09-300000701347us-gaap:ConstructionLoansMembercpf:RealEstatePortfolioSegmentMember2023-09-300000701347cpf:ResidentialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2023-09-300000701347us-gaap:HomeEquityLoanMembercpf:RealEstatePortfolioSegmentMember2023-09-300000701347cpf:CommercialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2023-09-300000701347us-gaap:ConsumerPortfolioSegmentMember2023-09-300000701347us-gaap:ConstructionLoansMembercpf:RealEstatePortfolioSegmentMember2024-01-012024-09-300000701347cpf:ResidentialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2024-01-012024-09-300000701347us-gaap:HomeEquityLoanMembercpf:RealEstatePortfolioSegmentMember2024-01-012024-09-300000701347cpf:CommercialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2024-01-012024-09-300000701347cpf:CommercialAndIndustrialPortfolioSegmentMember2022-12-310000701347us-gaap:ConstructionLoansMembercpf:RealEstatePortfolioSegmentMember2022-12-310000701347cpf:ResidentialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2022-12-310000701347us-gaap:HomeEquityLoanMembercpf:RealEstatePortfolioSegmentMember2022-12-310000701347cpf:CommercialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2022-12-310000701347us-gaap:ConsumerPortfolioSegmentMember2022-12-310000701347us-gaap:ConstructionLoansMembercpf:RealEstatePortfolioSegmentMember2023-01-012023-09-300000701347cpf:ResidentialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2023-01-012023-09-300000701347us-gaap:HomeEquityLoanMembercpf:RealEstatePortfolioSegmentMember2023-01-012023-09-300000701347cpf:CommercialRealEstateLoanMembercpf:RealEstatePortfolioSegmentMember2023-01-012023-09-300000701347srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2024-07-012024-09-300000701347srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2023-07-012023-09-300000701347srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2024-01-012024-09-300000701347srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2023-01-012023-09-300000701347cpf:FundCommitmentsMember2024-09-300000701347cpf:FundCommitmentsMember2023-12-310000701347cpf:LowIncomeHousingTaxCreditMember2024-09-300000701347cpf:LowIncomeHousingTaxCreditMember2023-12-310000701347cpf:OtherPartnershipsMember2024-09-300000701347cpf:JAMFINTOPBanktechFundLPMember2021-12-310000701347cpf:OtherPartnershipsMember2023-12-310000701347cpf:SwellFinancialIncMember2022-03-310000701347srt:MaximumMembercpf:SwellFinancialIncMember2023-01-012023-03-310000701347cpf:SwellFinancialIncMember2023-01-012023-03-310000701347cpf:SwellFinancialIncMember2024-01-012024-09-300000701347cpf:SwellFinancialIncMember2023-01-012023-12-310000701347us-gaap:FederalNationalMortgageAssociationCertificatesAndObligationsFNMAMember2024-09-300000701347us-gaap:FederalNationalMortgageAssociationCertificatesAndObligationsFNMAMember2023-12-310000701347us-gaap:FederalHomeLoanMortgageCorporationCertificatesAndObligationsFHLMCMember2024-09-300000701347us-gaap:FederalHomeLoanMortgageCorporationCertificatesAndObligationsFHLMCMember2023-12-310000701347us-gaap:FederalHomeLoanBankCertificatesAndObligationsFHLBMember2024-09-300000701347us-gaap:FederalHomeLoanBankCertificatesAndObligationsFHLBMember2023-12-310000701347cpf:MortgageServicingRightsMember2023-12-310000701347cpf:MortgageServicingRightsMember2024-01-012024-09-300000701347cpf:MortgageServicingRightsMember2024-09-300000701347cpf:MortgageServicingRightsMember2022-12-310000701347cpf:MortgageServicingRightsMember2023-01-012023-09-300000701347cpf:MortgageServicingRightsMember2023-09-300000701347cpf:MortgageServicingRightsMemberus-gaap:MeasurementInputDiscountRateMember2024-09-300000701347cpf:MortgageServicingRightsMemberus-gaap:MeasurementInputDiscountRateMember2023-12-310000701347cpf:MortgageServicingRightsMemberus-gaap:MeasurementInputConstantPrepaymentRateMember2024-09-300000701347cpf:MortgageServicingRightsMemberus-gaap:MeasurementInputConstantPrepaymentRateMember2023-12-310000701347us-gaap:InterestRateLockCommitmentsMemberus-gaap:NondesignatedMember2024-09-300000701347us-gaap:InterestRateLockCommitmentsMemberus-gaap:NondesignatedMember2023-12-310000701347cpf:RiskParticipationAgreementsMemberus-gaap:NondesignatedMember2024-09-300000701347cpf:RiskParticipationAgreementsMemberus-gaap:NondesignatedMember2023-12-310000701347cpf:BackToBackSwapAgreementsMemberus-gaap:NondesignatedMember2024-09-300000701347cpf:BackToBackSwapAgreementsMemberus-gaap:NondesignatedMember2023-12-310000701347us-gaap:InterestRateContractMemberus-gaap:NondesignatedMember2024-09-300000701347us-gaap:InterestRateContractMemberus-gaap:NondesignatedMember2023-12-310000701347us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-310000701347us-gaap:NondesignatedMembercpf:InterestRateLockandForwardSaleCommitmentMemberus-gaap:CashFlowHedgingMember2024-07-012024-09-300000701347us-gaap:NondesignatedMembercpf:LoansHeldforsaleMemberus-gaap:CashFlowHedgingMember2024-07-012024-09-300000701347us-gaap:NondesignatedMembercpf:InterestRateLockandForwardSaleCommitmentMemberus-gaap:CashFlowHedgingMember2023-07-012023-09-300000701347us-gaap:NondesignatedMembercpf:LoansHeldforsaleMemberus-gaap:CashFlowHedgingMember2023-07-012023-09-300000701347us-gaap:NondesignatedMembercpf:BackToBackSwapAgreementsMemberus-gaap:CashFlowHedgingMember2023-07-012023-09-300000701347us-gaap:NondesignatedMembercpf:InterestRateLockandForwardSaleCommitmentMemberus-gaap:CashFlowHedgingMember2024-01-012024-09-300000701347us-gaap:NondesignatedMembercpf:BackToBackSwapAgreementsMemberus-gaap:CashFlowHedgingMember2024-01-012024-09-300000701347us-gaap:NondesignatedMembercpf:InterestRateLockandForwardSaleCommitmentMemberus-gaap:CashFlowHedgingMember2023-01-012023-09-300000701347us-gaap:NondesignatedMembercpf:LoansHeldforsaleMemberus-gaap:CashFlowHedgingMember2023-01-012023-09-300000701347us-gaap:NondesignatedMembercpf:BackToBackSwapAgreementsMemberus-gaap:CashFlowHedgingMember2023-01-012023-09-300000701347us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2023-07-012023-09-300000701347us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2023-01-012023-09-300000701347us-gaap:FederalHomeLoanBankAdvancesMember2024-09-300000701347us-gaap:FederalHomeLoanBankAdvancesMember2023-12-310000701347us-gaap:SubordinatedDebtMember2024-09-300000701347us-gaap:SubordinatedDebtMember2023-12-310000701347us-gaap:SeniorSubordinatedNotesMember2024-09-300000701347us-gaap:SeniorSubordinatedNotesMember2023-12-310000701347us-gaap:FederalHomeLoanBankBorrowingsMember2024-09-300000701347us-gaap:FederalHomeLoanBankBorrowingsMember2023-12-310000701347srt:MinimumMemberus-gaap:FederalHomeLoanBankBorrowingsMember2023-12-310000701347srt:MinimumMemberus-gaap:FederalHomeLoanBankBorrowingsMember2024-09-300000701347srt:MaximumMemberus-gaap:FederalHomeLoanBankBorrowingsMember2024-09-300000701347srt:MaximumMemberus-gaap:FederalHomeLoanBankBorrowingsMember2023-12-310000701347us-gaap:AssetPledgedAsCollateralMemberus-gaap:FederalHomeLoanBankBorrowingsMember2024-09-300000701347us-gaap:AssetPledgedAsCollateralMemberus-gaap:FederalHomeLoanBankBorrowingsMember2023-12-310000701347us-gaap:FederalReserveBankAdvancesMember2024-09-300000701347us-gaap:FederalReserveBankAdvancesMember2023-12-310000701347us-gaap:AssetPledgedAsCollateralMemberus-gaap:FederalReserveBankAdvancesMember2024-09-300000701347us-gaap:AssetPledgedAsCollateralMemberus-gaap:FederalReserveBankAdvancesMember2023-12-310000701347cpf:PacificCoastBankersBankPCBBMember2024-09-300000701347cpf:PacificCoastBankersBankPCBBMember2023-12-310000701347us-gaap:JuniorSubordinatedDebtMembercpf:TrustIVMember2024-09-300000701347us-gaap:JuniorSubordinatedDebtMembercpf:TrustIVMember2023-12-310000701347cpf:TrustIVMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:JuniorSubordinatedDebtMember2024-01-012024-09-300000701347cpf:TrustIVMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:JuniorSubordinatedDebtMember2024-01-012024-06-300000701347cpf:TrustIVMembercpf:TenorSpreadAdjustmentMemberus-gaap:JuniorSubordinatedDebtMember2024-01-012024-06-300000701347cpf:TrustIVMembercpf:TenorSpreadAdjustmentMemberus-gaap:JuniorSubordinatedDebtMember2024-01-012024-09-300000701347us-gaap:JuniorSubordinatedDebtMembercpf:TrustVMember2024-09-300000701347us-gaap:JuniorSubordinatedDebtMembercpf:TrustVMember2023-12-310000701347cpf:TrustVMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:JuniorSubordinatedDebtMember2024-01-012024-06-300000701347cpf:TrustVMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:JuniorSubordinatedDebtMember2024-01-012024-09-300000701347cpf:TrustVMembercpf:TenorSpreadAdjustmentMemberus-gaap:JuniorSubordinatedDebtMember2024-01-012024-09-300000701347cpf:TrustVMembercpf:TenorSpreadAdjustmentMemberus-gaap:JuniorSubordinatedDebtMember2024-01-012024-06-300000701347us-gaap:JuniorSubordinatedDebtMember2024-09-300000701347us-gaap:JuniorSubordinatedDebtMember2023-12-310000701347cpf:CPBCapitalTrustIVMember2004-09-012004-09-300000701347cpf:TrustIVMembercpf:LondonInterbankOfferedRateLIBOR1Memberus-gaap:JuniorSubordinatedDebtMember2004-09-012004-09-300000701347us-gaap:SubordinatedDebtMembercpf:CPBCapitalTrustIVMember2024-09-300000701347cpf:CPBCapitalTrustVMember2004-12-012004-12-310000701347cpf:TrustVMembercpf:LondonInterbankOfferedRateLIBOR1Memberus-gaap:JuniorSubordinatedDebtMember2004-12-012004-12-310000701347us-gaap:SubordinatedDebtMembercpf:CPBCapitalTrustVMember2024-09-300000701347us-gaap:SubordinatedDebtMembersrt:MaximumMember2024-01-012024-09-300000701347us-gaap:SubordinatedDebtMember2024-01-012024-09-300000701347us-gaap:SeniorSubordinatedNotesMembercpf:SubordinatedNotesDue2030Member2024-09-300000701347us-gaap:SeniorSubordinatedNotesMembercpf:SubordinatedNotesDue2030Member2023-12-310000701347cpf:SubordinatedNotesDue2030Memberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:SeniorSubordinatedNotesMember2024-01-012024-06-300000701347cpf:SubordinatedNotesDue2030Memberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:SeniorSubordinatedNotesMember2024-01-012024-09-300000701347us-gaap:SeniorSubordinatedNotesMembercpf:SubordinatedNotesDue2030Member2020-10-200000701347us-gaap:SeniorSubordinatedNotesMembercpf:SubordinatedNotesDue2030Member2020-10-202020-10-200000701347cpf:SubordinatedNotesDue2030Memberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:SeniorSubordinatedNotesMember2020-10-202020-10-200000701347cpf:MortgageBankingIncomeMember2024-07-012024-09-300000701347cpf:MortgageBankingIncomeMember2023-07-012023-09-300000701347cpf:ServiceChargesonDepositAccountsMember2024-07-012024-09-300000701347cpf:ServiceChargesonDepositAccountsMember2023-07-012023-09-300000701347cpf:OtherServiceChargesandFeesMember2024-07-012024-09-300000701347cpf:OtherServiceChargesandFeesMember2023-07-012023-09-300000701347cpf:IncomefromFiduciaryActivitiesMember2024-07-012024-09-300000701347cpf:IncomefromFiduciaryActivitiesMember2023-07-012023-09-300000701347cpf:IncomefromBankownedLifeInsuranceMember2024-07-012024-09-300000701347cpf:IncomefromBankownedLifeInsuranceMember2023-07-012023-09-300000701347cpf:NetLossesGainsOnSalesOfInvestmentSecuritiesMember2024-07-012024-09-300000701347cpf:NetLossesGainsOnSalesOfInvestmentSecuritiesMember2023-07-012023-09-300000701347cpf:OtherMember2024-07-012024-09-300000701347cpf:OtherMember2023-07-012023-09-300000701347cpf:MortgageBankingIncomeMember2024-01-012024-09-300000701347cpf:MortgageBankingIncomeMember2023-01-012023-09-300000701347cpf:ServiceChargesonDepositAccountsMember2024-01-012024-09-300000701347cpf:ServiceChargesonDepositAccountsMember2023-01-012023-09-300000701347cpf:OtherServiceChargesandFeesMember2024-01-012024-09-300000701347cpf:OtherServiceChargesandFeesMember2023-01-012023-09-300000701347cpf:IncomefromFiduciaryActivitiesMember2024-01-012024-09-300000701347cpf:IncomefromFiduciaryActivitiesMember2023-01-012023-09-300000701347cpf:IncomefromBankownedLifeInsuranceMember2024-01-012024-09-300000701347cpf:IncomefromBankownedLifeInsuranceMember2023-01-012023-09-300000701347cpf:NetLossesGainsOnSalesOfInvestmentSecuritiesMember2024-01-012024-09-300000701347cpf:NetLossesGainsOnSalesOfInvestmentSecuritiesMember2023-01-012023-09-300000701347cpf:OtherMember2024-01-012024-09-300000701347cpf:OtherMember2023-01-012023-09-300000701347us-gaap:ShareBasedCompensationAwardTrancheOneMembercpf:RestrictedStockUnitsRSUsAndPerformanceStockUnitsPSUsMember2024-01-012024-09-300000701347us-gaap:ShareBasedCompensationAwardTrancheTwoMembercpf:RestrictedStockUnitsRSUsAndPerformanceStockUnitsPSUsMember2024-01-012024-09-300000701347us-gaap:ShareBasedCompensationAwardTrancheThreeMembercpf:RestrictedStockUnitsRSUsAndPerformanceStockUnitsPSUsMember2024-01-012024-09-300000701347cpf:RestrictedStockUnitsRSUsAndPerformanceStockUnitsPSUsMember2023-12-310000701347cpf:RestrictedStockUnitsRSUsAndPerformanceStockUnitsPSUsMember2024-01-012024-09-300000701347cpf:RestrictedStockUnitsRSUsAndPerformanceStockUnitsPSUsMember2024-09-300000701347us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2024-09-300000701347us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2023-12-310000701347us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2024-07-012024-09-300000701347us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2023-07-012023-09-300000701347us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2024-01-012024-09-300000701347us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2023-01-012023-09-300000701347cpf:GainLossOnUnrealizedLossesOnDerivativeInstrumentsMember2024-07-012024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2024-07-012024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-07-012024-09-300000701347cpf:GainLossOnUnrealizedLossesOnDerivativeInstrumentsMember2023-07-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2023-07-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2023-07-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-07-012023-09-300000701347cpf:GainLossOnUnrealizedLossesOnDerivativeInstrumentsMember2024-01-012024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2024-01-012024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-01-012024-09-300000701347cpf:GainLossOnUnrealizedLossesOnDerivativeInstrumentsMember2023-01-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2023-01-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2023-01-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-01-012023-09-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-06-300000701347cpf:DebtSecuritiesDerivativesFairValueHedgeHeldToMaturityMember2024-06-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-06-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-07-012024-09-300000701347cpf:DebtSecuritiesDerivativesFairValueHedgeHeldToMaturityMember2024-07-012024-09-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-09-300000701347cpf:DebtSecuritiesDerivativesFairValueHedgeHeldToMaturityMember2024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-09-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-06-300000701347cpf:DebtSecuritiesDerivativesFairValueHedgeHeldToMaturityMember2023-06-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-06-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-07-012023-09-300000701347cpf:DebtSecuritiesDerivativesFairValueHedgeHeldToMaturityMember2023-07-012023-09-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-09-300000701347cpf:DebtSecuritiesDerivativesFairValueHedgeHeldToMaturityMember2023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-09-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-12-310000701347cpf:DebtSecuritiesDerivativesFairValueHedgeHeldToMaturityMember2023-12-310000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-12-310000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-01-012024-09-300000701347cpf:DebtSecuritiesDerivativesFairValueHedgeHeldToMaturityMember2024-01-012024-09-300000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-09-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-12-310000701347cpf:DebtSecuritiesDerivativesFairValueHedgeHeldToMaturityMember2022-12-310000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-12-310000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-01-012023-09-300000701347cpf:DebtSecuritiesDerivativesFairValueHedgeHeldToMaturityMember2023-01-012023-09-300000701347us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000701347cpf:AccumulatedNetUnrealizedLossOnHeldToMaturitySecuritiesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300000701347cpf:AccumulatedNetUnrealizedLossOnHeldToMaturitySecuritiesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000701347us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300000701347us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-09-300000701347us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000701347cpf:AccumulatedNetUnrealizedLossOnHeldToMaturitySecuritiesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-09-300000701347cpf:AccumulatedNetUnrealizedLossOnHeldToMaturitySecuritiesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-09-300000701347us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000701347us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-09-300000701347us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000701347us-gaap:EmployeeStockOptionMember2024-07-012024-09-300000701347us-gaap:EmployeeStockOptionMember2023-07-012023-09-300000701347us-gaap:EmployeeStockOptionMember2024-01-012024-09-300000701347us-gaap:EmployeeStockOptionMember2023-01-012023-09-300000701347us-gaap:CarryingReportedAmountFairValueDisclosureMember2024-09-300000701347us-gaap:EstimateOfFairValueFairValueDisclosureMember2024-09-300000701347us-gaap:FairValueInputsLevel1Member2024-09-300000701347us-gaap:FairValueInputsLevel2Member2024-09-300000701347us-gaap:FairValueInputsLevel3Member2024-09-300000701347us-gaap:CommitmentsToExtendCreditMember2024-09-300000701347us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:CommitmentsToExtendCreditMember2024-09-300000701347us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:CommitmentsToExtendCreditMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:CommitmentsToExtendCreditMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:CommitmentsToExtendCreditMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:CommitmentsToExtendCreditMember2024-09-300000701347cpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2024-09-300000701347us-gaap:CarryingReportedAmountFairValueDisclosureMembercpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2024-09-300000701347us-gaap:EstimateOfFairValueFairValueDisclosureMembercpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2024-09-300000701347us-gaap:FairValueInputsLevel1Membercpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2024-09-300000701347us-gaap:FairValueInputsLevel2Membercpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2024-09-300000701347us-gaap:FairValueInputsLevel3Membercpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2024-09-300000701347us-gaap:InterestRateLockCommitmentsMember2024-09-300000701347us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:InterestRateLockCommitmentsMember2024-09-300000701347us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:InterestRateLockCommitmentsMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateLockCommitmentsMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateLockCommitmentsMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateLockCommitmentsMember2024-09-300000701347cpf:RiskParticipationAgreementMember2024-09-300000701347us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMembercpf:RiskParticipationAgreementMember2024-09-300000701347us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMembercpf:RiskParticipationAgreementMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMembercpf:RiskParticipationAgreementMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMembercpf:RiskParticipationAgreementMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMembercpf:RiskParticipationAgreementMember2024-09-300000701347cpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2024-09-300000701347us-gaap:CarryingReportedAmountFairValueDisclosureMembercpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2024-09-300000701347us-gaap:EstimateOfFairValueFairValueDisclosureMembercpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2024-09-300000701347us-gaap:FairValueInputsLevel1Membercpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2024-09-300000701347us-gaap:FairValueInputsLevel2Membercpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2024-09-300000701347us-gaap:FairValueInputsLevel3Membercpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2024-09-300000701347cpf:BackToBackSwapAgreementsPayVariableReceiveFixedMember2024-09-300000701347us-gaap:FairValueInputsLevel1Membercpf:BackToBackSwapAgreementsPayVariableReceiveFixedMember2024-09-300000701347us-gaap:FairValueInputsLevel2Membercpf:BackToBackSwapAgreementsPayVariableReceiveFixedMember2024-09-300000701347us-gaap:FairValueInputsLevel3Membercpf:BackToBackSwapAgreementsPayVariableReceiveFixedMember2024-09-300000701347us-gaap:InterestRateSwapMember2024-09-300000701347us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:InterestRateSwapMember2024-09-300000701347us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:InterestRateSwapMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateSwapMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateSwapMember2024-09-300000701347us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-12-310000701347us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-310000701347us-gaap:FairValueInputsLevel1Member2023-12-310000701347us-gaap:FairValueInputsLevel2Member2023-12-310000701347us-gaap:FairValueInputsLevel3Member2023-12-310000701347us-gaap:CommitmentsToExtendCreditMember2023-12-310000701347us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:CommitmentsToExtendCreditMember2023-12-310000701347us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:CommitmentsToExtendCreditMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:CommitmentsToExtendCreditMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:CommitmentsToExtendCreditMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:CommitmentsToExtendCreditMember2023-12-310000701347cpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2023-12-310000701347us-gaap:CarryingReportedAmountFairValueDisclosureMembercpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2023-12-310000701347us-gaap:EstimateOfFairValueFairValueDisclosureMembercpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2023-12-310000701347us-gaap:FairValueInputsLevel1Membercpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2023-12-310000701347us-gaap:FairValueInputsLevel2Membercpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2023-12-310000701347us-gaap:FairValueInputsLevel3Membercpf:StandbyLettersOfCreditAndFinancialGuaranteesMember2023-12-310000701347us-gaap:InterestRateLockCommitmentsMember2023-12-310000701347us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:InterestRateLockCommitmentsMember2023-12-310000701347us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:InterestRateLockCommitmentsMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateLockCommitmentsMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateLockCommitmentsMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateLockCommitmentsMember2023-12-310000701347cpf:RiskParticipationAgreementMember2023-12-310000701347us-gaap:CarryingReportedAmountFairValueDisclosureMembercpf:RiskParticipationAgreementMember2023-12-310000701347us-gaap:EstimateOfFairValueFairValueDisclosureMembercpf:RiskParticipationAgreementMember2023-12-310000701347us-gaap:FairValueInputsLevel1Membercpf:RiskParticipationAgreementMember2023-12-310000701347us-gaap:FairValueInputsLevel2Membercpf:RiskParticipationAgreementMember2023-12-310000701347us-gaap:FairValueInputsLevel3Membercpf:RiskParticipationAgreementMember2023-12-310000701347cpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2023-12-310000701347us-gaap:CarryingReportedAmountFairValueDisclosureMembercpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2023-12-310000701347us-gaap:EstimateOfFairValueFairValueDisclosureMembercpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2023-12-310000701347us-gaap:FairValueInputsLevel1Membercpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2023-12-310000701347us-gaap:FairValueInputsLevel2Membercpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2023-12-310000701347us-gaap:FairValueInputsLevel3Membercpf:BackToBackSwapAgreementsReceiveFixedPayVariableMember2023-12-310000701347cpf:BackToBackSwapAgreementsPayVariableReceiveFixedMember2023-12-310000701347us-gaap:FairValueInputsLevel1Membercpf:BackToBackSwapAgreementsPayVariableReceiveFixedMember2023-12-310000701347us-gaap:FairValueInputsLevel2Membercpf:BackToBackSwapAgreementsPayVariableReceiveFixedMember2023-12-310000701347us-gaap:FairValueInputsLevel3Membercpf:BackToBackSwapAgreementsPayVariableReceiveFixedMember2023-12-310000701347us-gaap:InterestRateSwapMember2023-12-310000701347us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:InterestRateSwapMember2023-12-310000701347us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:InterestRateSwapMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateSwapMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateSwapMember2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialUSGovernmentSponsoredEntitiesMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialUSGovernmentSponsoredEntitiesMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialUSGovernmentSponsoredEntitiesMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialUSGovernmentSponsoredEntitiesMember2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesCommercialNonGovernmentAgenciesMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesCommercialNonGovernmentAgenciesMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesCommercialNonGovernmentAgenciesMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesCommercialNonGovernmentAgenciesMember2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMember2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2024-09-300000701347us-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300000701347us-gaap:InterestRateSwapMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300000701347us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateSwapMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300000701347us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300000701347us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateSwapMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialUSGovernmentSponsoredEntitiesMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialUSGovernmentSponsoredEntitiesMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialUSGovernmentSponsoredEntitiesMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialUSGovernmentSponsoredEntitiesMember2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesCommercialNonGovernmentAgenciesMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesCommercialNonGovernmentAgenciesMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesCommercialNonGovernmentAgenciesMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMembercpf:MortgageBackedSecuritiesCommercialNonGovernmentAgenciesMember2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMember2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-12-310000701347us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-12-310000701347us-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310000701347us-gaap:InterestRateSwapMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310000701347us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateSwapMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310000701347us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310000701347us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateSwapMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310000701347cpf:MortgageRevenueBondsMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310000701347cpf:MortgageRevenueBondsMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2023-12-310000701347cpf:MortgageRevenueBondsMemberus-gaap:InterestRateSwapMember2023-12-310000701347cpf:MortgageRevenueBondsMember2023-12-310000701347cpf:MortgageRevenueBondsMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-01-012024-09-300000701347cpf:MortgageRevenueBondsMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2024-01-012024-09-300000701347cpf:MortgageRevenueBondsMemberus-gaap:InterestRateSwapMember2024-01-012024-09-300000701347cpf:MortgageRevenueBondsMember2024-01-012024-09-300000701347cpf:MortgageRevenueBondsMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-09-300000701347cpf:MortgageRevenueBondsMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2024-09-300000701347cpf:MortgageRevenueBondsMemberus-gaap:InterestRateSwapMember2024-09-300000701347cpf:MortgageRevenueBondsMember2024-09-300000701347cpf:MortgageRevenueBondsMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-310000701347cpf:MortgageRevenueBondsMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2022-12-310000701347cpf:MortgageRevenueBondsMemberus-gaap:InterestRateSwapMember2022-12-310000701347cpf:MortgageRevenueBondsMember2022-12-310000701347cpf:MortgageRevenueBondsMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-01-012023-09-300000701347cpf:MortgageRevenueBondsMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2023-01-012023-09-300000701347cpf:MortgageRevenueBondsMemberus-gaap:InterestRateSwapMember2023-01-012023-09-300000701347cpf:MortgageRevenueBondsMember2023-01-012023-09-300000701347cpf:MortgageRevenueBondsMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-09-300000701347cpf:MortgageRevenueBondsMembercpf:MortgageBackedSecuritiesResidentialNonGovernmentAgenciesMember2023-09-300000701347cpf:MortgageRevenueBondsMemberus-gaap:InterestRateSwapMember2023-09-300000701347cpf:MortgageRevenueBondsMember2023-09-300000701347cpf:MortgageRevenueBondsMemberus-gaap:MeasurementInputDiscountRateMembersrt:WeightedAverageMember2024-09-300000701347cpf:MortgageRevenueBondsMemberus-gaap:MeasurementInputDiscountRateMembersrt:WeightedAverageMember2023-12-310000701347srt:WeightedAverageMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-09-300000701347srt:WeightedAverageMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

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 September 30, 2024

or

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to              

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 organization) (I.R.S. Employer Identification No.)
 
220 South King Street, Honolulu, Hawaii 96813
(Address of principal executive offices) (Zip code)
 
(808) 544-0500
(Registrant's telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer Accelerated filer 
Non-accelerated filer 
Smaller reporting company 
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of registrant's common stock, no par value, on October 18, 2024 was 27,064,501 shares.


CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Form 10-Q

Table of Contents
  Page
 

2

PART I.   FINANCIAL INFORMATION

Item 1. Financial Statements

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

As of
(dollars in thousands) September 30,
2024
December 31,
2023
Assets    
Cash and due from financial institutions $ 100,064  $ 116,181 
Interest-bearing deposits in other financial institutions 226,505  406,256 
Investment securities:
Available-for-sale debt securities, at fair value 723,453  647,210 
Held-to-maturity debt securities, at amortized cost; fair value of: $546,990 at September 30, 2024 and $565,178 at December 31, 2023
606,117  632,338 
Total investment securities 1,329,570  1,279,548 
Loans held for sale 1,609  1,778 
Loans 5,342,609  5,438,982 
Less: allowance for credit losses (61,647) (63,934)
Loans, net of allowance for credit losses 5,280,962  5,375,048 
Premises and equipment, net 104,575  96,184 
Accrued interest receivable 23,942  21,511 
Investment in unconsolidated entities 54,836  41,546 
Mortgage servicing rights, net 8,513  8,696 
Bank-owned life insurance 175,914  170,706 
Federal Home Loan Bank of Des Moines ("FHLB") stock 6,929  6,793 
Right-of-use lease assets 32,192  29,720 
Other assets 69,819  88,829 
Total assets $ 7,415,430  $ 7,642,796 
Liabilities    
Deposits:    
Noninterest-bearing demand $ 1,838,009  $ 1,913,379 
Interest-bearing demand 1,255,382  1,329,189 
Savings and money market 2,336,323  2,209,733 
Time 1,153,299  1,395,291 
Total deposits 6,583,013  6,847,592 
Long-term debt, net of unamortized debt issuance costs of $263 at September 30, 2024 and $445 at December 31, 2023
156,284  156,102 
Lease liabilities 33,807  30,634 
Accrued interest payable 12,980  18,948 
Other liabilities 85,621  85,705 
Total liabilities 6,871,705  7,138,981 
Contingent liabilities and other commitments (see Note 16)
Equity    
Preferred stock, no par value, authorized 1,000,000 shares;
issued and outstanding: none at September 30, 2024 and December 31, 2023
—  — 
Common stock, no par value, authorized 185,000,000 shares;
issued and outstanding: 27,064,501 at September 30, 2024 and 27,045,033 at December 31, 2023
404,494  405,439 
Additional paid-in capital 104,794  102,982 
Retained earnings 138,951  117,990 
Accumulated other comprehensive loss (104,514) (122,596)
Total equity 543,725  503,815 
Total liabilities and equity $ 7,415,430  $ 7,642,796 

See accompanying notes to consolidated financial statements.
3


CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands, except per share data) 2024 2023 2024 2023
Interest income:        
Interest and fees on loans $ 65,469  $ 62,162  $ 192,710  $ 180,886 
Interest and dividends on investment securities:
Taxable investment securities 8,975  7,016  24,652  21,497 
Tax-exempt investment securities 551  709  1,804  2,226 
Interest on deposits in other financial institutions 2,775  2,412  8,589  3,566 
Dividend income on FHLB stock 127  113  384  369 
Total interest income 77,897  72,412  228,139  208,544 
Interest expense:        
Interest on deposits:        
Demand 484  460  1,473  1,234 
Savings and money market 10,235  6,464  27,655  14,520 
Time 11,040  11,268  36,203  26,464 
Interest on short-term borrowings —  —  1,139 
Interest on long-term debt 2,287  2,292  6,848  6,329 
Total interest expense 24,046  20,484  72,180  49,686 
Net interest income 53,851  51,928  155,959  158,858 
Provision for credit losses 2,833  4,874  9,008  11,045 
Net interest income after provision for credit losses 51,018  47,054  146,951  147,813 
Other operating income:        
Mortgage banking income 822  765  2,475  1,981 
Service charges on deposit accounts 2,167  2,193  6,405  6,441 
Other service charges and fees 5,947  5,203  17,077  15,182 
Income from fiduciary activities 1,447  1,234  4,331  3,623 
Income from bank-owned life insurance 1,897  379  4,653  2,855 
Net loss on sales of investment securities —  (135) —  (135)
Other 454  408  1,158  1,544 
Total other operating income 12,734  10,047  36,099  31,491 
Other operating expense:        
Salaries and employee benefits 22,299  19,015  64,280  61,886 
Net occupancy 4,612  4,725  13,809  13,509 
Computer software 4,590  4,473  13,258  13,700 
Legal and professional services 2,460  2,359  7,286  7,714 
Equipment 972  1,112  2,977  2,990 
Advertising 889  968  2,704  2,843 
Communication 740  809  2,234  2,378 
Other 10,125  6,150  21,866  16,601 
Total other operating expense 46,687  39,611  128,414  121,621 
Income before income taxes 17,065  17,490  54,636  57,683 
Income tax expense 3,760  4,349  12,569  13,880 
Net income $ 13,305  $ 13,141  $ 42,067  $ 43,803 
Per common share data:        
Basic earnings per share $ 0.49  $ 0.49  $ 1.55  $ 1.62 
Diluted earnings per share $ 0.49  $ 0.49  $ 1.55  $ 1.62 
Basic weighted average shares outstanding 27,064,035  27,042,762  27,054,737  27,022,141 
Diluted weighted average shares outstanding 27,194,625  27,079,484  27,137,985  27,081,541 

See accompanying notes to consolidated financial statements.
4


CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2024 2023 2024 2023
Net income $ 13,305  $ 13,141  $ 42,067  $ 43,803 
Other comprehensive income (loss), net of tax:
Net change in fair value of available-for-sale investment securities 19,942  (18,061) 15,036  (12,880)
Amortization of unrealized losses on investment securities transferred to held-to-maturity 1,413  1,488  3,993  4,164 
Net change in fair value of derivatives (3,177) 2,313  (946) 3,190 
Supplemental Executive Retirement Plans (1) (12) (1) (37)
Total other comprehensive income (loss), net of tax 18,177  (14,272) 18,082  (5,563)
Comprehensive income (loss) $ 31,482  $ (1,131) $ 60,149  $ 38,240 

See accompanying notes to consolidated financial statements.
5


CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)

Common
Shares
Outstanding
Preferred
Stock
Common
Stock
Additional Paid-In Capital Retained Earnings Accum.
Other
Comp.
Loss
Total
  (dollars in thousands, except per share data)
Balance at December 31, 2023 27,045,033  $ —  $ 405,439  $ 102,982  $ 117,990  $ (122,596) $ 503,815 
Net income —  —  —  —  12,945  —  12,945 
Other comprehensive loss —  —  —  —  —  (1,727) (1,727)
Cash dividends declared ($0.26 per share)
—  —  —  —  (7,033) —  (7,033)
Common stock repurchased and retired and other related costs (49,960) —  (945) —  —  —  (945)
Share-based compensation 47,253  —  —  148  —  —  148 
Balance at March 31, 2024 27,042,326  —  404,494  103,130  123,902  (124,323) 507,203 
Net income —  —  —  —  15,817  —  15,817 
Other comprehensive income —  —  —  —  —  1,632  1,632 
Cash dividends declared ($0.26 per share)
—  —  —  —  (7,036) —  (7,036)
Share-based compensation 21,318  —  —  1,031  —  —  1,031 
Balance at June 30, 2024 27,063,644  $ —  $ 404,494  $ 104,161  $ 132,683  $ (122,691) $ 518,647 
Net income —  —  —  —  13,305  —  13,305 
Other comprehensive income —  —  —  —  —  18,177  18,177 
Cash dividends declared ($0.26 per share)
—  —  —  —  (7,037) —  (7,037)
Share-based compensation 857  —  —  633  —  —  633 
Balance at September 30, 2024 27,064,501  $ —  $ 404,494  $ 104,794  $ 138,951  $ (104,514) $ 543,725 

Common
Shares
Outstanding
Preferred
Stock
Common
Stock
Additional Paid-In Capital Retained Earnings Accum.
Other
Comp.
Loss
Total
  (dollars in thousands, except per share data)
Balance at December 31, 2022 27,025,070  $ —  $ 408,071  $ 101,346  $ 87,438  $ (143,984) $ 452,871 
Net income —  —  —  —  16,187  —  16,187 
Other comprehensive income —  —  —  —  —  11,256  11,256 
Cash dividends declared ($0.26 per share)
—  —  —  —  (7,025) —  (7,025)
Common stock repurchased and retired and other related costs (101,760) —  (2,205) —  —  —  (2,205)
Share-based compensation 82,235  —  —  (158) —  —  (158)
Balance at March 31, 2023 27,005,545  —  405,866  101,188  96,600  (132,728) 470,926 
Net income —  —  —  —  14,475  —  14,475 
Other comprehensive loss —  —  —  —  —  (2,547) (2,547)
Cash dividends declared ($0.26 per share)
—  —  —  —  (7,029) —  (7,029)
Common stock repurchased and retired and other related costs (23,750) —  (355) —  —  —  (355)
Share-based compensation 63,997  —  —  809  —  —  809 
Balance at June 30, 2023 27,045,792  $ —  $ 405,511  $ 101,997  $ 104,046  $ (135,275) $ 476,279 
Net income —  —  —  —  13,141  —  13,141 
Other comprehensive loss —  —  —  —  —  (14,272) (14,272)
Cash dividends declared ($0.26 per share)
—  —  —  —  (7,031) —  (7,031)
Common stock repurchased and retired and other related costs (4,500) —  (72) —  —  —  (72)
Share-based compensation 1,877  —  —  553  —  —  553 
Balance at September 30, 2023 27,043,169  $ —  $ 405,439  $ 102,550  $ 110,156  $ (149,547) $ 468,598 

See accompanying notes to consolidated financial statements.
6


CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Nine Months Ended September 30,
(dollars in thousands) 2024 2023
Cash flows from operating activities:    
Net income $ 42,067  $ 43,803 
Adjustments to reconcile net income to net cash provided by operating activities:  
Provision for credit losses 9,008  11,045 
Depreciation and amortization of premises and equipment 5,133  5,204 
Loss on disposal of premises and equipment 55 
Cash flows from operating leases (4,246) (3,950)
Amortization of mortgage servicing rights 583  538 
Net amortization and accretion of premium/discounts on investment securities 1,558  2,385 
Share-based compensation 1,812  1,204 
Net loss (gain) on sales of investment securities —  135 
Net gain on sales of residential mortgage loans (923) (565)
Proceeds from sales of loans held for sale 47,771  30,143 
Originations of loans held for sale (46,679) (28,473)
Equity in losses of and distributions from unconsolidated entities 24  56 
Net increase in cash surrender value of bank-owned life insurance (4,653) (3,203)
Deferred income tax expense 13,369  8,955 
Net tax expense (benefit) from share-based compensation 191  (20)
Net change in other assets and liabilities (858) 16,234 
Net cash provided by operating activities 64,212  83,500 
Cash flows from investing activities:    
Proceeds from maturities of and calls on available-for-sale investment securities 38,819  44,812 
Purchases of investment securities available-for-sale (95,533) (19,057)
Proceeds from sale of investment securities —  1,405 
Proceeds from maturities of and calls on held-to-maturity investment securities 30,987  29,823 
Net repayments of loans 111,592  46,520 
Purchases of loan portfolios (27,115) (19,659)
Proceeds from sales of loans originated for investment —  9,629 
Purchases of bank-owned life insurance (2,803) — 
Proceeds from bank-owned life insurance death benefits 2,248  2,627 
Net purchases of premises, equipment and land (13,579) (10,969)
Net return of capital from unconsolidated entities —  495 
Contributions to unconsolidated entities (17,930) (395)
Net sales of FHLB stock (136) (1,849)
Net cash provided by investing activities 26,550  83,382 
Cash flows from financing activities:    
Net (decrease) increase in deposits (264,579) 138,522 
Net decrease in FHLB advances and other short-term borrowings —  (5,000)
Proceeds from long-term debt —  50,000 
Cash dividends paid on common stock (21,106) (21,085)
Repurchases of common stock and other related costs (945) (2,632)
Net cash (used in) provided by financing activities (286,630) 159,805 
Net (decrease) increase in cash and cash equivalents (195,868) 326,687 
Cash and cash equivalents at beginning of period 522,437  112,044 
Cash and cash equivalents at end of period $ 326,569  $ 438,731 


CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)

Nine Months Ended September 30,
(dollars in thousands) 2024 2023
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 78,148  $ 37,673 
Income taxes —  7,316 
Supplemental disclosure of non-cash information:
Lease liabilities arising from obtaining right-of-use lease assets 6,187  — 
Amortization of unrealized losses on investment securities transferred to held-to-maturity at fair value 5,425  3,644 

See accompanying notes to consolidated financial statements.
7


CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements of Central Pacific Financial Corp. and Subsidiaries (herein referred to as the "Company," "we," "us," or "our") have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

These interim condensed consolidated financial statements and notes should be read in conjunction with the Company's consolidated financial statements and notes thereto filed on Form 10-K for the fiscal year ended December 31, 2023. In the opinion of management, all adjustments necessary for a fair presentation have been made and include all normal recurring adjustments. Interim results of operations are not necessarily indicative of results to be expected for the year.

Allowance for Credit Losses for Loans

The allowance for credit losses ("ACL") for loans is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on loans. The Company’s policy is to charge off a loan against the ACL during the period in which the loan is deemed to be uncollectible and all interest previously accrued but uncollected, is reversed against current period interest income. Subsequent receipts, if any, are credited first to the remaining principal, then to the ACL for loans as recoveries, and finally to interest income.

The ACL for loans represents management's estimate of all expected credit losses over the expected life of the Company’s loan portfolio as of a given balance sheet date. Management estimates the ACL balance using relevant information available from both internal and external sources, regarding the collectability of cash flows impacted by past events, current conditions, and reasonable and supportable forecasts of future economic conditions. When the Company is unable to forecast future economic events, management may revert to historical information.

The Company's ACL model incorporates a reasonable and supportable forecast period of one year and reverts to historical loss information on a straight-line basis over one year when its forecast is no longer deemed reasonable and supportable. Historical loss experience provides the basis for the Company’s expected credit loss estimate. Adjustments to historical loss information may be made for differences in current loan-specific risk characteristics, such as differences in underwriting standards, portfolio mix, or when historical asset terms do not reflect the contractual terms of the financial assets being evaluated.

The Company's ACL model may also consider other adjustments to address changes in conditions, trends, and circumstances such as local industry changes that could have a significant impact on the risk profile of the loan portfolio and provide for adjustments that may not be reflected or captured in the historical loss data. These factors include: lending policies, imprecision in forecasting future economic conditions, loan profile, lending staff, problem loan trends, loan review, collateral, credit concentration, or other internal and external factors.

The Company uses Moody’s Analytics ("Moody's"), a firm widely recognized and used for its research, analysis, and economic forecasts, for its economic forecast assumptions. The Company generally uses Moody’s most recent Baseline forecast, which is updated at least monthly with a variety of upside and downside economic scenarios and includes both national and Hawaii-specific economic indicators. In addition, the Company uses a qualitative factor for forecast imprecision to account for economic and market volatility or instability.

8

The ACL for loans is measured on a collective or pool basis when similar risk characteristics exist. The following is a description and the risk characteristics of each segment:

Commercial and industrial loans - SBA Paycheck Protection Program loans

Paycheck Protection Program (“PPP”) loans are considered lower risk as they are guaranteed by the Small Business Administration (“SBA”) and may be forgivable in whole or in part in accordance with the requirements of the PPP.

Commercial and industrial loans - Others

Commercial and industrial loans consist primarily of term loans and lines of credit to small- and middle-market businesses and professionals. The predominant risk characteristics of this segment are the cash flows of the business we lend to, global cash flows including guarantor liquidity, as well as economic and market conditions. Although our underwriting policy and practice generally requires secondary sources of support or collateral to mitigate risk, cash flow generated from the borrower’s business is typically regarded as the principal source of repayment.

Construction loans

Construction loans include both residential and commercial development projects. Each construction project is evaluated for economic viability and construction loans pose higher credit risks than typical secured loans. Financial strength of the borrower, completion risk (the risk that the project will not be completed on time and within budget) and geographic location are the predominant risk characteristics of this segment.

Commercial real estate loans - Multi-family

Multi-family mortgage loans can comprise multi-building properties with extensive amenities or a single building with no amenities. The predominant risk characteristic of this segment is operating risk or the ability to generate sufficient rental income from the operation of the property.

Commercial real estate loans - Others

Commercial real estate loans are secured by commercial properties. The predominant risk characteristic of this segment is operating risk, which is the risk that the borrower will be unable to generate sufficient cash flows from the operation of the property. Interest rate conditions and the commercial real estate market through economic cycles also impact risk levels.

Residential mortgage loans

Residential mortgage loans primarily includes fixed-rate or adjustable-rate loans secured by single-family owner-occupied primary residences in Hawaii. Economic conditions such as unemployment levels, future changes in interest rates, Hawaii home prices and other market factors impact the level of credit risk inherent in the portfolio.

Home equity lines of credit

Home equity lines of credit include fixed or floating interest rate loans and are also primarily secured by single-family owner-occupied primary residences in Hawaii. They are underwritten based on a minimum FICO score, maximum debt-to-income ratio, and maximum combined loan-to-value ratio. Home equity lines of credit are monitored based on credit score, delinquency, end of draw period and maturity.

Consumer loans - Other revolving

Other revolving consumer loans consist of unsecured consumer lines of credit. The predominant risk characteristics of this segment relate to current and projected economic conditions, as well as employment and income levels attributed to the borrower.

9

Consumer loans - Non-revolving

Non-revolving consumer loans consist of non-revolving (term) consumer loans, including automobile dealer loans. The predominant risk characteristics of this segment relate to current and projected economic conditions, as well as employment and income levels attributed to the borrower.

Purchased consumer loans

Purchased consumer loans consist of dealer and unsecured consumer loans. Credit risk for purchased consumer loans is managed on a pooled basis. The predominant risk characteristics of this segment include current and projected economic conditions, employment and income levels, and the quality of purchased consumer loans.

The following table presents the Company's loan portfolio segments and the methodology used to measure expected credit losses. The historical look-back period is 2008 to present, economic forecast length is one year and the reversion method is one year (on a straight-line basis) for all segments.

Expected Credit Loss Methodology Historical Look-Back Period
Economic Forecast Length
Reversion Method
Loan Segment
After
June 30, 2023
June 30, 2023
and Prior
Commercial and industrial - SBA PPP Zero Loss Zero Loss 2008 to present One year One year
(straight-line
basis)
Commercial and industrial - All others DCF PD/LGD
Construction DCF PD/LGD
Commercial real estate - Multi-family DCF PD/LGD
Commercial real estate - All others DCF PD/LGD
Residential mortgage DCF Loss-Rate Migration
Home equity DCF Loss-Rate Migration
Consumer - Other revolving DCF Loss-Rate Migration
Consumer - Non-revolving DCF Loss-Rate Migration
Consumer - Purchased portfolios
WARM WARM

During the third quarter of 2023, the Company updated its methodology to measure expected credit losses from the Probability of Default/Loss Given Default ("PD/LGD") or Loss-Rate Migration methods to the Discounted Cash Flow ("DCF") method for all segments except the SBA PPP and purchased consumer loan segments. The Company believes that the DCF methodology has better alignment with the Current Expected Credit Losses ("CECL") standard for forward looking forecasting, while also factoring in more detailed assumptions. At the time of the methodology update, the Company ran the ACL model under both the current and previous methodologies and noted that the changes to the ACL model and the differences in methodologies did not result in a material impact to the Company's financial statements and as a percentage of the ACL. The Company is utilizing an industry leading software platform to perform the DCF analysis using a historical look back period of 2008 to present.

The Company continues to use the Moody's baseline forecast with an economic forecast length of one year and a one-year, straight-line reversion method. We revert to the historical average of the macroeconomic variables being used. Forecast models exclude the post-2019 COVID-19 pandemic period due to abnormal and volatile behavior.

The ACL on the purchased consumer loan portfolios continues to be calculated using the Remaining Life methodology (also known as the Weighted Average Remaining Maturity or "WARM" methodology) as this portfolio is evaluated on a pooled basis. Because SBA PPP loans are guaranteed by the SBA and may be forgivable in whole or in part in accordance with the requirements of the PPP we anticipate zero losses on these loans and accordingly apply a Zero Loss methodology.

10

The following is a description of the methodologies utilized to measure expected credit losses from the third quarter of 2023 to present:

Discounted Cash Flow

The DCF methodology calculates CECL reserves as the difference between the amortized cost of a loan and the discounted expected value of future cash flows. Expected future cash flows are calculated based on assumptions of PD/LGD, prepayments and recovery rates, and are discounted using the loan’s effective interest rate.

Remaining Life or Weighted Average Remaining Maturity

Under the remaining life or WARM methodology, lifetime losses are calculated by determining the remaining life of the loan pool, and then applying a loss rate over this remaining life of the loan. The methodology considers historical loss experience to estimate credit losses for the remaining balance of the loan pool. The calculated loss rate is applied to the contractual term (adjusted for prepayments) to determine the loan pool’s current expected credit losses.

The following is a description of the methodologies utilized to measure expected credit losses as of June 30, 2023 and prior:

Probability of Default/Loss Given Default

The PD/LGD calculation is based on a cohort methodology whereby loans in the same cohort are tracked over time to identify defaults and corresponding losses. PD/LGD analysis requires a portfolio segmented into pools, and we elected to then further sub-segment by risk characteristics such as Risk Rating, loans modified for borrowers experiencing financial difficulty, TDRs prior to the adoption of ASU 2022-02 and nonaccrual status to measure losses accurately. PD measures the count or dollar amount of loans that defaulted in a given cohort. LGD measures the losses related to the loans that defaulted. Total loss rate is calculated using the formula 'PD times LGD'.

Loss-Rate Migration

Loss-rate migration analysis is a cohort-based approach that measures cumulative net charge-offs over a defined time-horizon to calculate a loss rate that will be applied to the loan pool. Loss-rate migration analysis requires the portfolio to be segmented into pools then further sub-segmented by risk characteristics such as days past due, delinquency counters, loans modified for borrowers experiencing financial difficulty, TDRs prior to the adoption of ASU 2022-02 and nonaccrual status to measure loss rates accurately. The key inputs to run a loss-rate migration analysis are the length and frequency of the migration period, the dates for the migration periods to start and the number of migration periods used for the analysis. For each migration period, the analysis will determine the outstanding balance in each segment and/or sub-segment at the start of each period. These loans will then be followed for the length of the migration period to identify the amount of associated charge-offs and recoveries. A loss rate for each migration period is calculated using the formula: net charge-offs over the period divided by beginning loan balance.

Other

Under both the previous and current methodologies utilized to measure expected credit losses, if a loan ceases to share similar risk characteristics with other loans in its segment, it will be moved to a different pool sharing similar risk characteristics. Loans that do not share risk characteristics are evaluated on an individual basis based on the fair value of the collateral or other approaches such as the discounted cash flows methodology. Individually evaluated loans are not included in the collective evaluation.

Impact of Recently Issued Accounting Pronouncements on Future Filings

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". ASU 2023-09 expands existing income tax disclosures for rate reconciliations by requiring disclosure of certain specific categories in the rate reconciliation, as well as additional qualitative information about the reconciliation, and additional disaggregated information about income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and is to be applied on a prospective basis. The Company does not expect ASU 2023-09 to have a material impact on its consolidated financial statements.

11

2. INVESTMENT SECURITIES

The amortized cost, gross unrecognized/unrealized gains and losses, fair value and related ACL on available-for-sale ("AFS") and held-to-maturity ("HTM") debt securities at September 30, 2024 and December 31, 2023 are as follows:

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value ACL
(dollars in thousands)
September 30, 2024
Available-for-sale:        
Debt securities:        
States and political subdivisions $ 147,833  $ 18  $ (24,670) $ 123,181  $ — 
Corporate securities 35,373  —  (2,819) 32,554  — 
U.S. Treasury and other government-sponsored entities and agencies 59,632  1,323  (1,725) 59,230  — 
Mortgage-backed securities:        
Residential - U.S. government-sponsored entities and agencies 433,493  857  (48,054) 386,296  — 
Residential - Non-government agencies 18,085  471  (722) 17,834  — 
Commercial - U.S. government-sponsored entities and agencies 101,018  425  (12,414) 89,029  — 
Commercial - Non-government agencies 15,331  (7) 15,329  — 
Total available-for-sale investment securities $ 810,765  $ 3,099  $ (90,411) $ 723,453  $ — 

Amortized Cost Gross Unrecognized Gains Gross Unrecognized Losses Fair Value ACL
(dollars in thousands)
September 30, 2024
Held-to-maturity:
Debt securities:
States and political subdivisions $ 42,013  $ —  $ (7,283) $ 34,730  $ — 
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies 564,104  63  (51,907) 512,260  — 
Total held-to-maturity investment securities $ 606,117  $ 63  $ (59,190) $ 546,990  $ — 

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value ACL
(dollars in thousands)
December 31, 2023
Available-for-sale:        
Debt securities:        
States and political subdivisions $ 156,432  $ 13  $ (29,810) $ 126,635  $ — 
Corporate securities 35,731  —  (4,317) 31,414  — 
U.S. Treasury and other government-sponsored entities and agencies 28,105  33  (1,941) 26,197  — 
Mortgage-backed securities:  
Residential - U.S. government-sponsored entities and agencies 441,898  95  (63,607) 378,386  — 
Residential - Non-government agencies 19,322  366  (980) 18,708  — 
Commercial - U.S. government-sponsored entities and agencies 58,318  —  (7,404) 50,914  — 
Commercial - Non-government agencies 15,144  —  (188) 14,956  — 
Total available-for-sale investment securities $ 754,950  $ 507  $ (108,247) $ 647,210  $ — 

12

Amortized Cost Gross Unrecognized Gains Gross Unrecognized Losses Fair Value ACL
(dollars in thousands)
December 31, 2023
Held-to-maturity:
Debt securities:
States and political subdivisions $ 41,959  $ —  $ (6,706) $ 35,253  $ — 
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies 590,379  61  (60,515) 529,925  — 
Total held-to-maturity investment securities $ 632,338  $ 61  $ (67,221) $ 565,178  $ — 

During the first quarter of 2022, the Company entered into a forward starting interest rate swap, with a notional amount of $115.5 million, that was designated as a fair value hedge of certain municipal debt securities. The Company pays the counterparty a fixed rate of 2.095% and receives a floating rate based on the Federal Funds effective rate. The fair value hedge became effective on March 31, 2024 and has a maturity date of March 31, 2029.

During the three and nine months ended September 30, 2024, the Company recorded income from the interest rate swap of $1.1 million and $1.9 million, respectively, in interest income on taxable investment securities on the Company's consolidated statements of income.

During the three and nine months ended September 30, 2024, the Company recorded a total of $1.9 million and $5.4 million, respectively, in amortization of unrecognized losses on investment securities transferred from AFS to HTM. During the three and nine months ended September 30, 2023, the Company recorded a total of $2.0 million and $5.7 million, respectively, in amortization of unrecognized losses on investment securities transferred from AFS to HTM.

The Company elected to not measure an estimate of credit losses on accrued interest receivable as the Company writes off any uncollectible accrued interest receivable in a timely manner. Accrued interest receivable on investment securities is reported together with accrued interest receivable on loans and other assets in the consolidated balance sheets.

Accrued interest receivable on investment securities totaled $4.2 million and $4.0 million as of September 30, 2024 and December 31, 2023, respectively.

The amortized cost, estimated fair value and weighted average yield of our AFS and HTM debt securities at September 30, 2024, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

(dollars in thousands) Amortized Cost Fair Value
Weighted Average Yield (1)
Available-for-sale:    
Debt securities:
Due in one year or less $ 4,287  $ 4,300  5.88  %
Due after one year through five years 58,844  56,071  2.78 
Due after five years through ten years 58,523  57,627  3.92 
Due after ten years 121,184  96,967  2.43 
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies 433,493  386,296  2.27 
Residential - Non-government agencies 18,085  17,834  5.59 
Commercial - U.S. government-sponsored entities and agencies 101,018  89,029  2.73 
Commercial - Non-government agencies 15,331  15,329  4.55 
Total available-for-sale securities $ 810,765  $ 723,453  2.67  %

13

(dollars in thousands) Amortized Cost Fair Value
Weighted Average Yield (1)
Held-to-maturity:    
Debt securities:
Due after ten years $ 42,013  $ 34,730  2.26  %
Mortgage-backed securities:    
Residential - U.S. government-sponsored entities and agencies 564,104  512,260  1.90 
Total held-to-maturity securities $ 606,117  $ 546,990  1.92  %

(1)Weighted-average yields are computed on an annual basis, and yields on tax-exempt obligations are computed on a taxable-equivalent basis using a federal statutory tax rate of 21%

The Company did not sell any investment securities during the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2023, the Company sold two AFS commercial mortgage-backed securities issued by non-government agencies. The investment securities had a cost basis of $1.5 million and were sold at a loss of $0.1 million.

Investment securities with carrying values totaling $796.8 million and $990.4 million at September 30, 2024 and December 31, 2023, respectively, were pledged to secure public funds on deposit, Federal Reserve Bank borrowings and other financial transactions.

There were no holdings of investment securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders' equity at September 30, 2024 and December 31, 2023.

The following tables summarize AFS and HTM investment securities, which were in a loss position as of the dates presented, aggregated by major security type and length of time in a continuous loss position. There were a total of 212 and 208 AFS investment securities which were in an unrealized loss position, without an ACL, at September 30, 2024 and December 31, 2023, respectively. There were a total of 82 HTM investment securities which were in an unrecognized loss position, without an ACL, at September 30, 2024 and December 31, 2023.

Less Than 12 Months 12 Months or Longer Total
(dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses
September 30, 2024
Available-for-sale:
Debt securities:            
States and political subdivisions $ 4,600  $ (33) $ 111,552  $ (24,637) $ 116,152  $ (24,670)
Corporate securities —  —  32,554  (2,819) 32,554  (2,819)
U.S. Treasury and other government-sponsored entities and agencies 1,308  (26) 14,498  (1,699) 15,806  (1,725)
Mortgage-backed securities:            
Residential - U.S. government-sponsored entities and agencies 23,295  (183) 329,454  (47,871) 352,749  (48,054)
Residential - Non-government agencies —  —  7,992  (722) 7,992  (722)
Commercial - U.S. government-sponsored entities and agencies 1,275  (107) 68,444  (12,307) 69,719  (12,414)
Commercial - Non-government agencies —  —  5,425  (7) 5,425  (7)
Total $ 30,478  $ (349) $ 569,919  $ (90,062) $ 600,397  $ (90,411)

14

Less Than 12 Months 12 Months or Longer Total
(dollars in thousands) Fair Value Unrecognized Losses Fair Value Unrecognized Losses Fair Value Unrecognized Losses
September 30, 2024
Held-to-maturity:
Debt securities:
States and political subdivisions $ —  $ —  $ 34,730  $ (7,283) $ 34,730  $ (7,283)
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies —  —  504,405  (51,907) 504,405  (51,907)
Total $ —  $ —  $ 539,135  $ (59,190) $ 539,135  $ (59,190)

Less Than 12 Months 12 Months or Longer Total
(dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses
December 31, 2023
Available-for-sale:
Debt securities:            
States and political subdivisions $ 534  $ (1) $ 114,601  $ (29,809) $ 115,135  $ (29,810)
Corporate securities —  —  31,414  (4,317) 31,414  (4,317)
U.S. Treasury and other government-sponsored entities and agencies 2,893  (87) 16,286  (1,854) 19,179  (1,941)
Mortgage-backed securities:            
Residential - U.S. government-sponsored entities and agencies —  —  367,887  (63,607) 367,887  (63,607)
Residential - Non-government agencies —  —  8,169  (980) 8,169  (980)
Commercial - U.S. government-sponsored entities and agencies 6,467  (1) 44,447  (7,403) 50,914  (7,404)
Commercial - Non-government agencies 9,663  (130) 5,293  (58) 14,956  (188)
Total $ 19,557  $ (219) $ 588,097  $ (108,028) $ 607,654  $ (108,247)

Less Than 12 Months 12 Months or Longer Total
(dollars in thousands) Fair Value Unrecognized Losses Fair Value Unrecognized Losses Fair Value Unrecognized Losses
December 31, 2023
Held-to-maturity:
Debt securities:
States and political subdivisions $ —  $ —  $ 35,253  $ (6,706) $ 35,253  $ (6,706)
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies 8,853  (33) 512,378  (60,482) 521,231  (60,515)
Total $ 8,853  $ (33) $ 547,631  $ (67,188) $ 556,484  $ (67,221)

Investment securities in an unrecognized or unrealized loss position are evaluated at least on a quarterly basis, and include evaluating the changes in the investment securities' ratings issued by rating agencies and changes in the financial condition of the issuer. For mortgage-related securities, delinquency and loss information with respect to the underlying collateral, changes in levels of subordination for the Company's particular position within the repayment structure, and remaining credit enhancement as compared to projected credit losses of the security are also evaluated.

The Company has evaluated its AFS and HTM investment securities that are in an unrecognized or unrealized loss position and has determined that the unrecognized or unrealized losses on the Company's investment securities are unrelated to credit quality and primarily attributable to changes in interest rates and volatility in the financial markets since purchase. All of the investment securities in an unrecognized or unrealized loss position continue to be rated investment grade by one or more major rating agencies. The Company does not intend to sell the AFS and HTM securities that were in an unrecognized or unrealized loss position as of September 30, 2024 and December 31, 2023, and it is unlikely that the Company will be required to sell these securities before recovery of its amortized cost basis that may be at maturity.
15

Therefore, the Company has not recorded an ACL on these securities and the unrecognized or unrealized losses on these securities have not been recognized into income.

3. LOANS AND CREDIT QUALITY

The following table presents loans by class, excluding loans held for sale, net of deferred fees and costs as of the dates presented:

(dollars in thousands) September 30, 2024 December 31, 2023
Commercial and industrial $ 599,556  $ 576,038 
Real estate:
Construction 158,523  185,994 
Residential mortgage 1,897,526  1,927,206 
Home equity 695,175  734,500 
Commercial mortgage 1,472,230  1,384,579 
Consumer 520,014  630,898 
Gross loans 5,343,024  5,439,215 
Deferred fees and costs, net (415) (233)
Total loans, net of deferred fees and costs $ 5,342,609  $ 5,438,982 

Interest income on loans is accrued at the contractual rate of interest on the unpaid principal balance. Accrued interest receivable on loans totaled $17.5 million and $17.1 million at September 30, 2024 and December 31, 2023, respectively, and was reported together with accrued interest receivable on investment securities and other assets on the consolidated balance sheets. Accrued interest receivable on loans is excluded from the estimate of credit losses.

During the three months ended September 30, 2023, the Company transferred one loan to the loans held for sale category. The loan did not have any credit concerns at the time of transfer and thus was transferred to loans held for sale at its amortized cost of $9.8 million. The loan was sold during the three months ended September 30, 2023 for $9.6 million, or a loss of $0.2 million, which was recorded in other operating expense.

The Company did not transfer any other loans to the held for sale category during the three and nine months ended September 30, 2024 and 2023 and did not sell any other loans originally held for investment during the three and nine months ended September 30, 2024 and 2023.

The following tables present the loan purchase information at the time of purchase by class during the periods presented. None of these loan purchases were categorized as purchased credit deteriorated ("PCD") and there were no loans categorized as PCD during the periods presented. There were no loan purchases made during the three months ended September 30, 2023.

Three Months Ended September 30, 2024
(dollars in thousands) U.S. Mainland Consumer - Unsecured U.S. Mainland Consumer - Automobile Total
Purchases:
Outstanding balance $ —  $ 14,731  $ 14,731 
Premium —  921  921 
Purchase price $ —  $ 15,652  $ 15,652 

16

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
U.S. Mainland Consumer - Unsecured U.S. Mainland Consumer - Automobile Total U.S. Mainland Consumer - Unsecured U.S. Mainland Consumer - Automobile Total
Purchases:
Outstanding balance $ —  $ 27,115  $ 27,115  $ 3,932  $ 15,159  $ 19,091 
Premium —  1,168  1,168  —  568  568 
Purchase price $ —  $ 28,283  $ 28,283  $ 3,932  $ 15,727  $ 19,659 

Foreclosure Proceedings

The Company did not own any foreclosed properties as of September 30, 2024 and December 31, 2023. The Company did not sell any foreclosed properties during the three and nine months ended September 30, 2024 and 2023.

The Company had $3.8 million and $2.3 million of residential mortgage loans collateralized by residential real estate property that were in the process of foreclosure at September 30, 2024 and December 31, 2023, respectively.

The Company did not have any commercial real estate loans in the process of foreclosure at September 30, 2024. The Company had commercial real estate loans totaling $0.1 million in the process of foreclosure at December 31, 2023.

Nonaccrual and Past Due Loans

For all loan types, the Company determines delinquency status by considering the number of days full payments required by the contractual terms of the loan are past due. The following tables present by class, the aging of the recorded investment in past due loans as of the dates presented. The following tables also present the amortized cost of loans on nonaccrual status for which there was no related ACL as of the dates presented:

(dollars in thousands) Accruing
Loans
30 - 59 Days
Past Due
Accruing
Loans
60 - 89 Days
Past Due
Accruing
Loans
90+ Days
Past Due
Nonaccrual
Loans
Total
Past Due
and
Nonaccrual
Loans Not
Past Due
Total Loans Nonaccrual
Loans
With
No ACL
September 30, 2024              
Commercial and industrial $ 1,924  $ 688  $ —  $ 376  $ 2,988  $ 596,459  $ 599,447  $ — 
Real estate:    
Construction —  —  —  —  —  158,126  158,126  — 
Residential mortgage —  1,990  13  9,680  11,683  1,886,236  1,897,919  9,680 
Home equity 387  254  135  915  1,691  695,432  697,123  915 
Commercial mortgage 203  —  —  —  203  1,470,107  1,470,310  — 
Consumer 4,644  1,667  481  626  7,418  512,266  519,684  — 
Total $ 7,158  $ 4,599  $ 629  $ 11,597  $ 23,983  $ 5,318,626  $ 5,342,609  $ 10,595 

(dollars in thousands) Accruing
Loans
30 - 59 Days
Past Due
Accruing
Loans
60 - 89 Days
Past Due
Accruing
Loans
90+ Days
Past Due
Nonaccrual
Loans
Total
Past Due
and
Nonaccrual
Loans Not
Past Due
Total Loans Nonaccrual
Loans
With
No ACL
December 31, 2023              
Commercial and industrial $ 513  $ 169  $ —  $ 432  $ 1,114  $ 574,593  $ 575,707  $ — 
Real estate:    
Construction —  —  —  —  —  185,519  185,519  — 
Residential mortgage 3,082  2,140  —  4,962  10,184  1,917,605  1,927,789  4,855 
Home equity 804  400  229  834  2,267  734,257  736,524  834 
Commercial mortgage —  —  —  77  77  1,382,825  1,382,902  77 
Consumer 5,677  2,329  1,083  703  9,792  620,749  630,541  — 
Total $ 10,076  $ 5,038  $ 1,312  $ 7,008  $ 23,434  $ 5,415,548  $ 5,438,982  $ 5,766 
17


Collateral-Dependent Loans

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral, which are individually evaluated to determine expected credit losses. The following tables present the amortized cost basis of collateral-dependent loans by class and the related ACL allocated to these loans as of the dates presented:

(dollars in thousands) Secured by
1-4 Family
Residential
Properties
Secured by
Nonfarm
Nonresidential
Properties
Total Allocated
ACL
September 30, 2024
Real estate:
Residential mortgage $ 9,679  $ —  $ 9,679  $ — 
Home equity 915  —  915  — 
Total $ 10,594  $ —  $ 10,594  $ — 

(dollars in thousands) Secured by
1-4 Family
Residential
Properties
Secured by
Nonfarm
Nonresidential
Properties
Total Allocated
ACL
December 31, 2023
Real estate:
Residential mortgage $ 6,450  $ —  $ 6,450  $ 47 
Home equity 834  —  834  — 
Commercial mortgage —  77  77  — 
Total $ 7,284  $ 77  $ 7,361  $ 47 

Loan Modifications for Borrowers Experiencing Financial Difficulty

Since the adoption of ASU 2022-02 on January 1, 2023 and during the three and nine months ended September 30, 2024, the Company has not had any material modifications to loans either individually or in the aggregate for borrowers experiencing financial difficulty.

Troubled Debt Restructurings Prior to the Adoption of ASU 2022-02

Prior to our adoption of ASU 2022-02, we accounted for a modification to the contractual terms of a loan that resulted in granting a concession to a borrower experiencing financial difficulties as a troubled debt restructuring ("TDR").

There were $0.8 million of TDRs included in nonperforming assets at September 30, 2024, compared to $0.9 million at December 31, 2023. There were $1.9 million of TDRs that were still accruing interest at September 30, 2024, compared to $2.1 million at December 31, 2023. None of the TDRs still accruing interest at September 30, 2024 and December 31, 2023 were more than 90 days delinquent.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans by credit risk. This analysis includes non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk rating of loans.

Pass. Loans classified as pass are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement.

18

Special Mention. Loans classified as special mention, while still adequately protected by the borrower's capital adequacy and payment capability, exhibit distinct weakening trends and/or elevated levels of exposure to external conditions. If left unchecked or uncorrected, these potential weaknesses may result in deteriorated prospects of repayment. These exposures require management's close attention so as to avoid becoming undue or unwarranted credit exposures.

Substandard. Loans classified as substandard are inadequately protected by the borrower's current financial condition and payment capability or of the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize the orderly repayment of debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or orderly repayment in full, on the basis of current existing facts, conditions and values, highly questionable and improbable. Possibility of loss is extremely high, but because of certain important and reasonably specific factors that may work to the advantage and strengthening of the exposure, its classification as an estimate loss is deferred until its more exact status may be determined.

Loss. Loans classified as loss are considered to be non-collectible and of such little value that their continuance as bankable assets is not warranted. This does not mean the loan has absolutely no recovery value, but rather it is neither practical nor desirable to defer writing off the loan, even though partial recovery may be obtained in the future. Losses are taken in the period in which they surface as uncollectible.

19

The following tables present the amortized cost basis, net of deferred fees and costs, of the Company's loans by class, credit quality indicator and origination year as of the dates presented. Revolving loans converted to term as of and during the periods presented were not material to the total loan portfolio. In addition, the following tables present gross charge-offs of loans by origination year during the periods presented.

(dollars in thousands) Amortized Cost of Term Loans by Year of Origination Amortized Cost of Revolving Loans
September 30, 2024 2024 2023 2022 2021 2020 Prior Total
Commercial and industrial:
Risk Rating
Pass $ 125,093  $ 56,889  $ 75,837  $ 71,370  $ 26,287  $ 149,077  $ 88,324  $ 592,877 
Special Mention —  587  297  2,579  —  —  —  3,463 
Substandard 2,380  236  58  121  —  312  —  3,107 
Subtotal 127,473  57,712  76,192  74,070  26,287  149,389  88,324  599,447 
Construction:
Risk Rating
Pass 6,508  19,346  47,954  35,859  13,342  35,117  —  158,126 
Subtotal 6,508  19,346  47,954  35,859  13,342  35,117  —  158,126 
Residential mortgage:
Risk Rating
Pass 55,009  92,858  261,649  596,350  400,545  480,913  —  1,887,324 
Substandard —  —  1,599  294  1,862  6,840  —  10,595 
Subtotal 55,009  92,858  263,248  596,644  402,407  487,753  —  1,897,919 
Home equity:
Risk Rating
Pass 1,231  11,997  29,158  18,224  7,611  24,418  603,434  696,073 
Substandard —  —  —  —  —  915  135  1,050 
Subtotal 1,231  11,997  29,158  18,224  7,611  25,333  603,569  697,123 
Commercial mortgage:
Risk Rating
Pass 122,037  95,562  238,401  225,176  112,347  657,231  5,911  1,456,665 
Special Mention —  623  —  1,438  —  5,185  —  7,246 
Substandard —  —  —  1,088  —  5,311  —  6,399 
Subtotal 122,037  96,185  238,401  227,702  112,347  667,727  5,911  1,470,310 
Consumer:
Risk Rating
Pass 32,636  91,838  192,185  103,112  24,048  19,153  55,605  518,577 
Substandard 20  40  254  175  35  578  1,107 
Subtotal 32,656  91,878  192,439  103,287  24,083  19,731  55,610  519,684 
Total $ 344,914  $ 369,976  $ 847,392  $ 1,055,786  $ 586,077  $ 1,385,050  $ 753,414  $ 5,342,609 

20

(dollars in thousands) Amortized Cost of Term Loans by Year of Origination Amortized Cost of Revolving Loans
December 31, 2023 2023 2022 2021 2020 2019 Prior Total
Commercial and industrial:
Risk Rating
Pass $ 83,333  $ 82,649  $ 77,551  $ 32,831  $ 42,162  $ 152,940  $ 90,177  $ 561,643 
Special Mention —  —  2,916  —  —  944  93  3,953 
Substandard 37  1,189  576  662  571  7,026  50  10,111 
Subtotal 83,370  83,838  81,043  33,493  42,733  160,910  90,320  575,707 
Construction:
Risk Rating
Pass 8,434  52,596  69,203  18,878  2,136  31,090  2,778  185,115 
Special Mention —  —  404  —  —  —  —  404 
Subtotal 8,434  52,596  69,607  18,878  2,136  31,090  2,778  185,519 
Residential mortgage:
Risk Rating
Pass 101,473  266,314  609,648  414,430  144,312  385,452  —  1,921,629 
Special Mention —  —  —  —  —  268  —  268 
Substandard —  1,057  299  931  818  2,787  —  5,892 
Subtotal 101,473  267,371  609,947  415,361  145,130  388,507  —  1,927,789 
Home equity:
Risk Rating
Pass 12,229  32,208  19,589  8,766  6,372  17,379  638,917  735,460 
Substandard —  —  —  —  66  998  —  1,064 
Subtotal 12,229  32,208  19,589  8,766  6,438  18,377  638,917  736,524 
Commercial mortgage:
Risk Rating
Pass 96,479  256,660  202,933  115,055  112,578  566,325  6,311  1,356,341 
Special Mention —  —  —  —  10,513  9,638  —  20,151 
Substandard —  —  2,587  —  1,654  2,169  —  6,410 
Subtotal 96,479  256,660  205,520  115,055  124,745  578,132  6,311  1,382,902 
Consumer:
Risk Rating
Pass 88,593  261,752  144,341  36,431  27,970  10,538  59,130  628,755 
Substandard 58  231  205  87  83  1,084  10  1,758 
Loss —  —  —  —  —  28  —  28 
Subtotal 88,651  261,983  144,546  36,518  28,053  11,650  59,140  630,541 
Total $ 390,636  $ 954,656  $ 1,130,252  $ 628,071  $ 349,235  $ 1,188,666  $ 797,466  $ 5,438,982 

(dollars in thousands) Gross Charge-Offs by Year of Origination
Nine Months Ended September 30, 2024 2024 2023 2022 2021 2020 Prior Total
Commercial and industrial $ 69  $ 150  $ 241  $ 203  $ 33  $ 1,168  $ 1,864 
Real estate:
Residential mortgage —  —  175  —  —  208  383 
Consumer 75  518  7,944  3,243  408  951  13,139 
Gross charge-offs $ 144  $ 668  $ 8,360  $ 3,446  $ 441  $ 2,327  $ 15,386 

(dollars in thousands) Gross Charge-Offs by Year of Origination
Nine Months Ended September 30, 2023 2023 2022 2021 2020 2019 Prior Total
Commercial and industrial $ 143  $ 239  $ 145  $ —  $ 265  $ 751  $ 1,543 
Consumer 4,988  4,158  871  627  621  11,269 
Gross charge-offs $ 147  $ 5,227  $ 4,303  $ 871  $ 892  $ 1,372  $ 12,812 

21

4. ALLOWANCE FOR CREDIT LOSSES AND RESERVE FOR OFF-BALANCE SHEET CREDIT EXPOSURES

The following tables present by class, the activities in the ACL for loans during the periods presented:

(dollars in thousands) Real Estate  
Three Months Ended September 30, 2024 Commercial and Industrial Construction Residential Mortgage Home Equity Commercial Mortgage Consumer Total
Beginning balance $ 7,071  $ 3,798  $ 15,389  $ 3,829  $ 17,337  $ 14,801  $ 62,225 
Provision (credit) for credit losses on loans 617  (1,230) 1,052  (1,360) 1,204  2,757  3,040 
Subtotal 7,688  2,568  16,441  2,469  18,541  17,558  65,265 
Charge-offs (663) —  (99) —  —  (3,956) (4,718)
Recoveries 158  —  —  —  934  1,100 
Net (charge-offs) recoveries (505) —  (91) —  —  (3,022) (3,618)
Ending balance $ 7,183  $ 2,568  $ 16,350  $ 2,469  $ 18,541  $ 14,536  $ 61,647 

(dollars in thousands) Real Estate
Three Months Ended September 30, 2023 Commercial and Industrial Construction Residential Mortgage Home Equity Commercial Mortgage Consumer Total
Beginning balance $ 6,946  $ 3,654  $ 12,233  $ 3,965  $ 17,365  $ 19,686  $ 63,849 
Provision (credit) for credit losses on loans (330) 953  1,727  (913) 1,738  1,351  4,526 
Subtotal 6,616  4,607  13,960  3,052  19,103  21,037  68,375 
Charge-offs (402) —  —  —  —  (4,710) (5,112)
Recoveries 261  10  —  —  982  1,254 
Net (charge-offs) recoveries (141) 10  —  —  (3,728) (3,858)
Ending balance $ 6,475  $ 4,608  $ 13,970  $ 3,052  $ 19,103  $ 17,309  $ 64,517 

(dollars in thousands) Real Estate
Nine Months Ended September 30, 2024 Commercial and Industrial Construction Residential Mortgage Home Equity Commercial Mortgage Consumer Total
Beginning balance $ 7,181  $ 4,004  $ 14,626  $ 3,501  $ 17,543  $ 17,079  $ 63,934 
Provision (credit) for credit losses on loans 1,488  (1,436) 2,082  (1,038) 998  7,515  9,609 
Subtotal 8,669  2,568  16,708  2,463  18,541  24,594  73,543 
Charge-offs (1,864) —  (383) —  —  (13,139) (15,386)
Recoveries 378  —  25  —  3,081  3,490 
Net (charge-offs) recoveries (1,486) —  (358) —  (10,058) (11,896)
Ending balance $ 7,183  $ 2,568  $ 16,350  $ 2,469  $ 18,541  $ 14,536  $ 61,647 

(dollars in thousands) Real Estate
Nine Months Ended September 30, 2023 Commercial and Industrial Construction Residential Mortgage Home Equity Commercial Mortgage Consumer Total
Beginning balance $ 6,824  $ 2,867  $ 11,804  $ 4,114  $ 17,902  $ 20,227  $ 63,738 
Provision (credit) for credit losses on loans 558  1,740  2,096  (1,077) 1,201  5,758  10,276 
Subtotal 7,382  4,607  13,900  3,037  19,103  25,985  74,014 
Charge-offs (1,543) —  —  —  —  (11,269) (12,812)
Recoveries 636  70  15  —  2,593  3,315 
Net (charge-offs) recoveries (907) 70  15  —  (8,676) (9,497)
Ending balance $ 6,475  $ 4,608  $ 13,970  $ 3,052  $ 19,103  $ 17,309  $ 64,517 

22

The following table presents the activities in the reserve for off-balance sheet credit exposures, included in other liabilities, during the periods presented. The (credit) provision for off-balance sheet credit exposures is included in the provision for credit losses on the Company's income statement during the periods presented.

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2024 2023 2024 2023
Beginning balance $ 3,312  $ 3,664  $ 3,706  $ 3,243 
(Credit) provision for off-balance sheet credit exposures (207) 348  (601) 769 
Ending balance $ 3,105  $ 4,012  $ 3,105  $ 4,012 

5. INVESTMENTS IN UNCONSOLIDATED ENTITIES

The following table presents the components of the Company's investments in unconsolidated entities as of the dates presented:

(dollars in thousands) September 30, 2024 December 31, 2023
Investments in low-income housing tax credit partnerships, net of amortization $ 51,152  $ 37,838 
Investments in common securities of statutory trusts 1,547  1,547 
Investments in affiliates 87  111 
Other 2,050  2,050 
Total $ 54,836  $ 41,546 

The Company had commitments to fund low-income housing tax credit ("LIHTC") partnerships totaling $63.5 million and $47.8 million as of September 30, 2024 and December 31, 2023, respectively. Unfunded commitments related to LIHTC partnerships totaled $20.0 million and $22.0 million at September 30, 2024 and December 31, 2023, respectively, and were included in other liabilities in the Company's consolidated balance sheets. The investments were accounted for under the proportional amortization method and were included in investments in unconsolidated entities in the Company's consolidated balance sheets.

The following table presents the expected payments for the unfunded commitments of LIHTC and other partnerships as of September 30, 2024, for the remainder of fiscal year 2024, the next five succeeding fiscal years, and all years thereafter:

(dollars in thousands)
Year Ending December 31, LIHTC Other Total
2024 (remainder) $ 1,406  $ 803  $ 2,209 
2025 10,519  —  10,519 
2026 7,564  —  7,564 
2027 36  —  36 
2028 30  —  30 
2029 36  —  36 
Thereafter 386  —  386 
Total unfunded commitments $ 19,977  $ 803  $ 20,780 

The following table presents amortization and tax credits recognized associated with our investments in LIHTC partnerships for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2024 2023 2024 2023
Proportional amortization method:
Amortization expense recognized in income tax expense $ 1,012  $ 714  $ 2,372  $ 2,142 
Tax credits recognized in income tax expense 1,155  891  2,756  2,675 
23


In 2021, the Company committed $2.0 million to the JAM FINTOP Banktech Fund, L.P. The Company does not have the ability to exercise significant influence over the JAM FINTOP Banktech Fund, L.P. and the investment does not have a readily determinable fair value. As a result, the Company determined that the cost method of accounting for the investment was
appropriate. The Company had $0.8 million and $1.0 million in unfunded commitments related to the investment as of September 30, 2024 and December 31, 2023, respectively, which was included in other liabilities in the Company's consolidated balance sheets.

During the first quarter of 2022, the Company invested $2.0 million in Swell Financial, Inc. ("Swell"). The Company did not have the ability to exercise significant influence over Swell and the investment did not have a readily determinable fair value. As a result, the Company determined that the cost method of accounting for the investment was appropriate.

During the third quarter of 2023, the Company entered into a transaction with Swell whereby Swell repurchased the Company’s entire preferred and common stock equity investment in exchange for $0.5 million in cash and certain intellectual property rights and a platform usage fee agreement related to products that may be launched by Swell or its affiliates in the future (not to exceed $1.5 million in value).

Due to the aforementioned events, the Company performed an impairment analysis and concluded the intellectual property rights and the platform usage fee agreement received in exchange for the Company's investment in Swell were not impaired as of September 30, 2024 and December 31, 2023. The intangible assets, net of accumulated amortization, totaling $1.4 million and $1.5 million as of September 30, 2024 and December 31, 2023, respectively, were included in other assets on the Company's consolidated balance sheets.

6. MORTGAGE SERVICING RIGHTS

Mortgage loans serviced for others are not reported on the Company's consolidated balance sheets. The following table presents mortgage loans serviced for others by investor, which totaled $1.19 billion and $1.22 billion at September 30, 2024 and December 31, 2023, respectively.

(dollars in thousands) September 30, 2024 December 31, 2023
Mortgage loan portfolio serviced for:
Federal National Mortgage Association (FNMA) $ 725,880  $ 736,042 
Federal Home Loan Mortgage Corporation (FHLMC) 462,367  485,270 
Federal Home Loan Banks (FHLB) 454  483 
Total loans serviced for others $ 1,188,701  $ 1,221,795 

The following table presents changes in mortgage servicing rights ("MSR") for the periods presented:

(dollars in thousands)
Balance at December 31, 2023 $ 8,696 
Additions 400 
Amortization (583)
Balance at September 30, 2024 $ 8,513 
Balance at December 31, 2022 $ 9,074 
Additions 261 
Amortization (538)
Balance at September 30, 2023 $ 8,797 

24

The following table presents the fair market value and key assumptions used in determining the fair market value of MSR as of the dates presented:

(dollars in thousands) September 30, 2024 December 31, 2023
Fair market value, beginning of year $ 12,185  $ 12,061 
Fair market value, end of period 11,637  12,185 
Weighted average discount rate 9.5  % 9.5  %
Weighted average prepayment speed assumption 11.4  11.2 

The Company performs an impairment assessment of its MSR whenever events or changes in circumstance indicate that the carrying value of the MSR may not be recoverable. The Company noted no impairment or triggering events related to its MSR at September 30, 2024.

7. DERIVATIVES

The Company utilizes various designated and undesignated derivative financial instruments to reduce its exposure to movements in interest rates. The Company measures all derivatives at fair value on its consolidated balance sheet. In each reporting period, the Company records the derivative instruments in other assets or other liabilities depending on whether the derivatives are in an asset or liability position. For derivative instruments that are designated as cash flow hedging instruments, the Company records the effective portion of the changes in the fair value of the derivative in accumulated other comprehensive income (loss) ("AOCI"), net of tax, until earnings are affected by the variability of cash flows of the hedged transaction. The Company immediately recognizes the portion of the gain or loss in the fair value of the derivative that represents hedge ineffectiveness in current period earnings. For derivative instruments that are not designated as hedging instruments, changes in the fair value of the derivative are included in current period earnings.

Derivative financial instruments are subject to credit and counterparty risk, which is defined as the risk of financial loss if a borrower or counterparty is either unable or unwilling to repay borrowings or settle transactions in accordance with the underlying contractual terms. Credit and counterparty risks associated with derivative financial instruments are similar to those relating to traditional financial instruments. The Company manages derivative credit and counterparty risk by evaluating the creditworthiness of each borrower or counterparty and requiring collateral where appropriate.

Interest Rate Lock and Forward Sale Commitments

The Company enters into interest rate lock commitments on certain mortgage loans that are intended to be sold. To manage interest rate risk on interest rate lock commitments, the Company also enters into forward loan sale commitments on the loans that are intended to be sold. The interest rate lock and forward loan sale commitments are accounted for as undesignated derivatives and are recorded at their respective fair values in other assets and other liabilities, with changes in fair value recorded in current period earnings. These instruments serve to reduce the Company's exposure to movements in interest rates.

The Company was party to interest rate lock commitments on $1.6 million and $1.8 million of mortgage loans at September 30, 2024 and December 31, 2023, respectively. The Company was not a party to any forward sale commitments on mortgage loans at September 30, 2024 and December 31, 2023.

Risk Participation Agreements

The Company enters into credit risk participation agreements ("RPA") with financial institution counterparties for interest rate swaps related to loans in which it participates. The RPAs entered into by us and a participant bank provide credit protection to the financial institution counterparties should the borrowers fail to perform on their interest rate derivative contracts with the financial institutions. The RPAs are accounted for as undesignated derivatives and are recorded at fair value, with changes in fair value recorded in current period earnings.

The Company was party to RPAs with total notional amounts of $35.4 million and $36.0 million at September 30, 2024 and December 31, 2023, respectively. The fair value of the RPAs was insignificant to the consolidated financial statements at September 30, 2024 and December 31, 2023.

25

Back-to-Back Swap Agreements

The Company established a program whereby it originates a variable rate loan and enters into a variable-to-fixed interest rate swap with the customer. The Company also enters into an equal and offsetting swap with a highly rated third-party financial institution. These "back-to-back swap agreements" are intended to offset each other and allow the Company to originate a variable rate loan, while providing a contract for fixed interest payments for the customer. The net cash flow for the Company is equal to the interest income received from a variable rate loan originated with the customer. These back-to-back swap agreements are free-standing derivatives and recorded at fair value on our consolidated balance sheet in other assets or other liabilities.

The Company was party to swap agreements with its borrowers with total notional amounts of $50.4 million and $51.1 million at September 30, 2024 and December 31, 2023, respectively, offset by swap agreements with third party financial institutions with the same total notional amounts. The Company received $9.0 million and $9.6 million in counter-party cash collateral related to the back-to-back swap agreements at September 30, 2024 and December 31, 2023, respectively.

Interest Rate Swap

During the first quarter of 2022, the Company entered into a forward starting interest rate swap, with an effective date of March 31, 2024. This transaction had a notional amount of $115.5 million and was designated as a fair value hedge of certain municipal debt securities. The Company pays the counterparty a fixed rate of 2.095% and receives a floating rate based on the Federal Funds effective rate. The fair value hedge has a maturity date of March 31, 2029.

The interest rate swap is carried on the Company’s consolidated balance sheet at its fair value in other assets (when the fair value is positive) or in other liabilities (when the fair value is negative). The changes in the fair value of the interest rate swap are recorded in interest income. The unrealized gains or losses due to changes in fair value of the hedged debt securities due to changes in benchmark interest rates are recorded as an adjustment to the hedged debt securities and offset in the same interest income line item. At September 30, 2024, the hedge was determined to be effective and the Company expects the hedge to remain effective during the remaining term.

During the three and nine months ended September 30, 2024, the Company recorded income from the interest rate swap of $1.1 million and $1.9 million, respectively.

The following tables present the location of all assets and liabilities associated with our derivative instruments within the consolidated balance sheets as of the dates presented:

Derivative Financial Instruments Not Designated as Hedging Instruments Asset Derivatives Liability Derivatives
Fair Value at Fair Value at
(dollars in thousands) Balance Sheet Location September 30,
2024
December 31,
2023
September 30,
2024
December 31,
2023
Interest rate lock and forward sale commitments Other assets / other liabilities $ —  $ —  $ $ 34 
Back-to-back swap agreements Other assets / other liabilities 2,875  3,547  2,875  3,547 
Derivative Financial Instruments Designated as Hedging Instruments Asset Derivatives Liability Derivatives
Fair Value at Fair Value at
(dollars in thousands) Balance Sheet Location September 30,
2024
December 31,
2023
September 30,
2024
December 31,
2023
Interest rate swap Other assets / other liabilities $ 5,202  $ 6,440  $ —  $ — 

26

The following tables present the impact of derivative instruments and their location within the consolidated statements of income for the periods presented:

Derivative Financial Instruments
Not Designated as Hedging Instruments
Location of Gain (Loss)
Recognized in
Earnings on Derivatives
Amount of Gain (Loss)
Recognized in
Earnings on Derivatives
(dollars in thousands)
Three Months Ended September 30, 2024    
Interest rate lock and forward sale commitments Mortgage banking income $
Loans held for sale Other income 17 
Three Months Ended September 30, 2023  
Interest rate lock and forward sale commitments Mortgage banking income (16)
Loans held for sale Other income
Back-to-back swap agreements Other service charges and fees 36 
Derivative Financial Instruments
Not Designated as Hedging Instruments
Location of Gain (Loss)
Recognized in
Earnings on Derivatives
Amount of Gain (Loss)
Recognized in
Earnings on Derivatives
(dollars in thousands)
Nine Months Ended September 30, 2024  
Interest rate lock and forward sale commitments Mortgage banking income $ 32 
Back-to-back swap agreements Other service charges and fees 80 
Nine Months Ended September 30, 2023  
Interest rate lock and forward sale commitments Mortgage banking income (8)
Loans held for sale Other income
Back-to-back swap agreements Other service charges and fees 71 
Derivative Financial Instruments
Designated as Hedging Instruments
Location of Gain (Loss)
Recognized in
Earnings on Derivatives
Amount of Gain (Loss)
Recognized in
Earnings on Derivatives
(dollars in thousands)
Three Months Ended September 30, 2024
Interest rate swap Interest income $ 1,148 
Three Months Ended September 30, 2023
Interest rate swap Interest income (121)
Derivative Financial Instruments
Designated as Hedging Instruments
Location of Gain (Loss)
Recognized in
Earnings on Derivatives
Amount of Gain (Loss)
Recognized in
Earnings on Derivatives
(dollars in thousands)
Nine Months Ended September 30, 2024
Interest rate swap Interest income $ 1,924 
Nine Months Ended September 30, 2023
Interest rate swap Interest income (180)

27

The following table presents the amounts recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of the periods presented:

Line Item in the Consolidated Balance Sheets


(dollars in thousands) September 30, 2024 December 31, 2023
Investment securities, available-for-sale:
Carrying Amount of the Hedged Assets $ 93,635  $ 90,636 
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (5,531) (6,817)

8. SHORT-TERM BORROWINGS AND LONG-TERM DEBT

The following table presents long-term debt, which is based on original maturity and consists of advances under the arrangement with Federal Home Loan Bank of Des Moines, junior subordinated debentures and subordinated notes as of the dates presented:

(dollars in thousands) September 30, 2024 December 31, 2023
Long-term debt:
Federal Home Loan Bank long-term advances $ 50,000  $ 50,000 
Subordinated debentures 51,547  51,547 
Subordinated notes, net of unamortized debt issuance costs 54,737  54,555 
Total $ 156,284  $ 156,102 

Federal Home Loan Bank Advances and Other Borrowings

The Bank is a member of the Federal Home Loan Bank of Des Moines (the "FHLB") and maintained a $1.85 billion line of credit as of September 30, 2024, compared to $1.93 billion at December 31, 2023. At September 30, 2024, $1.72 billion was undrawn under this arrangement, compared to $1.81 billion at December 31, 2023. There were no short-term borrowings outstanding under this arrangement at September 30, 2024 and December 31, 2023. There were $50.0 million in long-term advances under the FHLB arrangement bearing interest rates between 4.02% and 4.62% at September 30, 2024 and December 31, 2023.

The FHLB provides standby letters of credit on behalf of the Bank to secure certain public deposits. If the FHLB is required to make a payment on a standby letter of credit, the payment amount is converted to an advance at the FHLB. Standby letters of credit under this arrangement that are used to collateralize certain government deposits totaled $83.6 million as of September 30, 2024, compared to $72.0 million as of December 31, 2023. The letters of credit are counted against the total line of credit, the same as the current outstanding debt, to determine the undrawn or total available line of credit.

In accordance with the collateral provisions of the Advances, Security and Deposit Agreement with the FHLB, the FHLB advances and standby letters of credit available at September 30, 2024 and December 31, 2023 were secured by certain real estate loans with a carrying value of approximately $3.12 billion and $3.16 billion, respectively.

The Bank had additional unused borrowings available at the Federal Reserve Discount Window of $242.8 million and $285.8 million at September 30, 2024 and December 31, 2023, respectively. Certain commercial and commercial real estate loans with a par value totaling $130.1 million and $135.1 million at September 30, 2024 and December 31, 2023, respectively, were pledged as collateral on our line of credit with the Federal Reserve. In addition, investment securities with a par value of $187.3 million and $196.7 million as of September 30, 2024 and December 31, 2023, respectively, were pledged to the Federal Reserve in support of the line of credit. The Federal Reserve does not have the right to sell or repledge these loans and investment securities.

The Bank had additional unused and unsecured credit lines available totaling $75.0 million at September 30, 2024 and December 31, 2023.

28

Subordinated Debentures

The following table presents the Company's junior subordinated debentures outstanding, which are recorded in long-term debt on the Company's consolidated balance sheets as of the dates presented:

(dollars in thousands)
Name of Trust September 30, 2024 December 31, 2023 Interest Rate
CPB Capital Trust IV $ 30,928  $ 30,928 
Three-month CME Term SOFR + tenor spread adjustment of 0.26% + 2.45%
CPB Statutory Trust V 20,619  20,619 
Three-month CME Term SOFR + tenor spread adjustment of 0.26% + 1.87%
Total $ 51,547  $ 51,547 

In September 2004, we created a wholly-owned statutory trust, CPB Capital Trust IV ("Trust IV"). Trust IV issued $30.0 million in floating rate trust preferred securities which bore an interest rate of three-month LIBOR plus 2.45% and maturing on December 15, 2034. The principal assets of Trust IV are $30.9 million of the Company's junior subordinated debentures with an identical interest rate and maturity as the Trust IV trust preferred securities. Trust IV issued $0.9 million of common securities to the Company.

In December 2004, we created a wholly-owned statutory trust, CPB Statutory Trust V ("Trust V"). Trust V issued $20.0 million in floating rate trust preferred securities which bore an interest rate of three-month LIBOR plus 1.87% and maturing on December 15, 2034. The principal assets of Trust V are $20.6 million of the Company's junior subordinated debentures with an identical interest rate and maturity as the Trust V trust preferred securities. Trust V issued $0.6 million of common securities to the Company.

On July 3, 2023, after the cessation of the LIBOR benchmark rate on June 30, 2023, the Company amended its Trust IV and Trust V debt agreements to replace the LIBOR-based reference rate with an adjusted CME Term Secured Overnight Financing Rate ("SOFR") plus a tenor spread adjustment. Accounting Standards Codification ("ASC") 848 allows us to account for the modification as a continuation of the existing contract without additional analysis.

The Company is not considered the primary beneficiary of Trusts IV and V. Therefore, the trusts are not considered variable interest entities and are not consolidated in the Company's financial statements. Rather the subordinated debentures are shown as liabilities on the Company's consolidated balance sheets. The Company's investments in the common securities of the trusts are included in investment in unconsolidated entities in the Company's consolidated balance sheets.

The floating trust preferred securities, the junior subordinated debentures that are the assets of Trusts IV and V and the common securities issued by Trusts IV and V are redeemable in whole or in part on any interest payment date on or after December 15, 2009 for Trust IV and V, or at any time in whole but not in part within 90 days following the occurrence of certain events. Our obligations with respect to the issuance of the trust preferred securities constitute a full and unconditional guarantee by the Company of each trust's obligations with respect to its trust preferred securities. Subject to certain exceptions and limitations, we may elect from time to time to defer interest payments on the subordinated debentures, which would result in a deferral of distribution payments on the related trust preferred securities, for up to 20 consecutive quarterly periods without default or penalty.

The subordinated debentures are included in Tier 1 capital, with certain limitations applicable, under regulatory guidelines and interpretations.

Subordinated Notes

The following table presents the Company's subordinated notes outstanding as of the dates presented:

(dollars in thousands)
Description September 30, 2024 December 31, 2023 Interest Rate
October 2020 Private Placement $ 55,000  $ 55,000 
4.75% for the first five years. Resets quarterly thereafter to the then current three-month SOFR plus 456 basis points.

29

On October 20, 2020, the Company completed a $55.0 million private placement of ten-year fixed-to-floating rate subordinated notes, which will be used to support regulatory capital ratios and for general corporate purposes. The Company exchanged the privately placed notes for registered notes with the same terms and in the same aggregate principal amount at the end of the fourth quarter of 2020. The subordinated notes bear a fixed interest rate of 4.75% for the first five years through November 1, 2025 and will reset quarterly thereafter for the remaining five years to the then current three-month SOFR, as published by the Federal Reserve Bank of New York, plus 456 basis points.

The subordinated notes are included in Tier 2 capital, with certain limitations applicable, under current regulatory guidelines and interpretations. The subordinated notes had a carrying value of $54.7 million and $54.6 million, net of unamortized debt issuance costs of $0.3 million and $0.4 million at September 30, 2024 and December 31, 2023, respectively.

9. REVENUE FROM CONTRACTS WITH CUSTOMERS

The following table presents the Company's other operating income, segregated by revenue streams that are in-scope and out-of-scope of ASC 606, "Revenue from Contracts with Customers" for the periods presented:

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023
(dollars in thousands) In-Scope Out-of-Scope Total In-Scope Out-of-Scope Total
Other operating income:
Mortgage banking income $ 352  $ 470  $ 822  $ 216  $ 549  $ 765 
Service charges on deposit accounts 2,167  —  2,167  2,193  —  2,193 
Other service charges and fees 5,234  713  5,947  4,874  329  5,203 
Income from fiduciary activities 1,447  —  1,447  1,234  —  1,234 
Income from bank-owned life insurance —  1,897  1,897  —  379  379 
Net (losses) gains on sales of investment securities —  —  —  —  (135) (135)
Other —  454  454  —  408  408 
Total other operating income $ 9,200  $ 3,534  $ 12,734  $ 8,517  $ 1,530  $ 10,047 


Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
(dollars in thousands) In-Scope Out-of-Scope Total In-Scope Out-of-Scope Total
Other operating income:
Mortgage banking income $ 626  $ 1,849  $ 2,475  $ 541  $ 1,440  $ 1,981 
Service charges on deposit accounts 6,405  —  6,405  6,441  —  6,441 
Other service charges and fees 15,252  1,825  17,077  13,655  1,527  15,182 
Income from fiduciary activities 4,331  —  4,331  3,623  —  3,623 
Income from bank-owned life insurance —  4,653  4,653  —  2,855  2,855 
Net (losses) gains on sales of investment securities —  —  —  —  (135) (135)
Other —  1,158  1,158  —  1,544  1,544 
Total other operating income $ 26,614  $ 9,485  $ 36,099  $ 24,260  $ 7,231  $ 31,491 

10. SHARE-BASED COMPENSATION

Restricted and Performance Stock Units

Under the Company's 2023 Stock Compensation Plan, the Company awarded restricted stock units ("RSUs") and performance stock units ("PSUs") to certain non-officer directors and senior management personnel. The awards typically vest over a two-, three- or five-year period from the date of grant and are subject to forfeiture until performance and employment targets are achieved. Compensation expense is typically measured as the market price of the stock awards on the grant date, and is recognized over the specified vesting periods.
30


The following table presents the activities of RSUs and PSUs for the nine months ended September 30, 2024:

(dollars in thousands, except per share data) Shares Weighted Average Grant Date Fair Value Per Share Fair Value of RSUs and PSUs That Vested During the Period
Non-vested RSUs and PSUs, beginning of period 224,579  $ 24.76 
Changes during the period:    
Granted 137,911  19.41 
Forfeited (1,648) 20.59 
Vested (75,113) 23.73  $ 1,466 
Non-vested RSUs and PSUs, end of period 285,729  22.48 

11. SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS

In 1995, 2001, 2004 and 2006, the Bank established Supplemental Executive Retirement Plans ("SERP"), which provide certain (current and former) officers of the Company with supplemental retirement benefits. On December 31, 2002, the 1995 and 2001 SERP were curtailed. In conjunction with the September 2004 merger with CB Bancshares, Inc. ("CBBI"), the Company assumed CBBI's SERP obligation.

The projected benefit obligation of the unfunded SERP is recorded in other liabilities on the Company's consolidated balance sheets. The projected benefit obligation was $9.2 million and $9.3 million at September 30, 2024 and December 31, 2023, respectively.

The following table presents the components of net periodic benefit cost for the SERP for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2024 2023 2024 2023
Interest cost $ 107  $ 112  $ 323  $ 336 
Amortization of net actuarial gain —  (19) —  (57)
Amortization of net transition obligation —  — 
Net periodic benefit cost $ 107  $ 95  $ 323  $ 285 

All components of net periodic benefit cost are included in other operating expenses in the Company's consolidated statements of income.

12. OPERATING LEASES

The Company leases certain land and buildings for its bank branches and ATMs. In some instances, a lease may contain renewal options to extend the term of the lease. Renewal options that are likely to be exercised have been recognized as part of our right-of-use assets and lease liabilities in accordance with ASC 842, "Leases". Certain leases also contain variable payments that are primarily determined based on common area maintenance costs and Hawaii state tax rates. All leases are operating leases and we do not include any short-term leases in the calculation of the right-of-use assets and lease liabilities. The most significant assumption related to the Company’s application of ASC 842 was the discount rate assumption. As most of the Company’s lease agreements do not provide for an implicit interest rate, the Company uses the collateralized interest rate that the Company would have to pay to borrow over a similar term to estimate the Company’s lease liabilities.

31

The following table presents total lease cost, cash flow information, weighted-average remaining lease term and weighted-average discount rate for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2024 2023 2024 2023
Lease cost:
Operating lease cost $ 1,605  $ 1,285  $ 4,345  $ 3,937 
Variable lease cost 484  918  2,346  2,740 
Less: Sublease income —  —  —  (34)
Total lease cost $ 2,089  $ 2,203  $ 6,691  $ 6,643 
Other information:
Operating cash flows from operating leases $ (1,564) $ (1,258) $ (4,246) $ (3,950)
Weighted-average remaining lease term - operating leases 10.53 years 10.85 years 10.53 years 10.85 years
Weighted-average discount rate - operating leases 4.04  % 3.96  % 4.04  % 3.96  %

The following table presents a schedule of annual undiscounted cash flows for our operating leases and a reconciliation of those cash flows to the operating lease liabilities as of September 30, 2024, for the remainder of fiscal year 2024, the next five succeeding fiscal years and all years thereafter:

(dollars in thousands) Undiscounted Cash Flows Lease Liability Discount on Cash Flows Lease Liability
Year Ending December 31,
2024 (remainder) $ 1,297  $ 319  $ 978 
2025 5,166  1,180  3,986 
2026 5,125  1,032  4,093 
2027 4,333  891  3,442 
2028 3,486  776  2,710 
2029 3,083  677  2,406 
Thereafter 19,201  3,009  16,192 
Total $ 41,691  $ 7,884  $ 33,807 

In addition, the Company, as lessor, leases certain properties that it owns. All of these leases are operating leases. The following table presents lease income related to these leases that was recognized for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2024 2023 2024 2023
Total rental income recognized $ 519  $ 497  $ 1,539  $ 1,622 

32

The following table presents estimated lease payments, based on the Company's leases as lessor as of September 30, 2024, for the remainder of fiscal year 2024, the next five succeeding fiscal years, and all years thereafter:

(dollars in thousands)
Year Ending December 31,
2024 (remainder) $ 315 
2025 1,207 
2026 1,074 
2027 1,017 
2028 608 
2029 553 
Thereafter 1,294 
Total $ 6,068 

13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present the components of other comprehensive income (loss) for the periods presented:

(dollars in thousands) Before Tax Tax Effect Net of Tax
Three Months Ended September 30, 2024      
Net change in fair value of investment securities:      
Net unrealized gains on AFS investment securities arising during the period $ 27,092  $ 7,150  $ 19,942 
Amortization of unrealized losses on investment securities transferred to HTM 1,920  507  1,413 
Net change in fair value of investment securities 29,012  7,657  21,355 
Net change in fair value of derivatives:
Net unrealized losses arising during the period (4,317) (1,140) (3,177)
Net change in fair value of derivatives (4,317) (1,140) (3,177)
SERP:      
Amortization of net actuarial gain (2) (1) (1)
SERP (2) (1) (1)
Other comprehensive income $ 24,693  $ 6,516  $ 18,177 

33

(dollars in thousands) Before Tax Tax Effect Net of Tax
Three Months Ended September 30, 2023      
Net change in fair value of investment securities:      
Net unrealized losses on AFS investment securities arising during the period $ (24,729) $ (6,569) $ (18,160)
Reclassification adjustments from AOCI realized in net income 135  36  99 
Amortization of unrealized losses on investment securities transferred to HTM 2,026  538  1,488 
Net change in fair value of investment securities (22,568) (5,995) (16,573)
Net change in fair value of derivatives:
Net unrealized gains arising during the period 3,151  838  2,313 
Net change in fair value of derivatives 3,151  838  2,313 
SERP:      
Amortization of net actuarial gain (19) (7) (12)
Amortization of net transition obligation — 
SERP (17) (5) (12)
Other comprehensive loss $ (19,434) $ (5,162) $ (14,272)


(dollars in thousands) Before Tax Tax Effect Net of Tax
Nine Months Ended September 30, 2024      
Net change in fair value of investment securities:      
Net unrealized gains on AFS investment securities arising during the period $ 20,427  $ 5,391  $ 15,036 
Amortization of unrealized losses on investment securities transferred to HTM 5,425  1,432  3,993 
Net change in fair value of investment securities 25,852  6,823  19,029 
Net change in fair value of derivatives:
Net unrealized losses arising during the period (1,286) (340) (946)
Net change in fair value of derivatives (1,286) (340) (946)
SERP:    
Amortization of net actuarial gain (2) (1) (1)
SERP (2) (1) (1)
Other comprehensive income $ 24,564  $ 6,482  $ 18,082 

34

(dollars in thousands) Before Tax Tax Effect Net of Tax
Nine Months Ended September 30, 2023      
Net change in fair value of investment securities:      
Net unrealized losses on AFS investment securities arising during the period $ (17,675) $ (4,696) $ (12,979)
Reclassification adjustments from AOCI realized in net income 135  36  99 
Amortization of unrealized losses on investment securities transferred to HTM 5,670  1,506  4,164 
Net change in fair value of investment securities (11,870) (3,154) (8,716)
Net change in fair value of derivatives:
Net unrealized gains arising during the period $ 4,329  $ 1,139  $ 3,190 
Net change in fair value of derivatives 4,329  1,139  3,190 
SERP:      
Amortization of net actuarial gain (58) (17) (41)
Amortization of net transition obligation
SERP (52) (15) (37)
Other comprehensive loss $ (7,593) $ (2,030) $ (5,563)


The following tables present the changes in each component of accumulated other comprehensive income (loss), net of tax, for the periods presented:

(dollars in thousands) Investment Securities Derivatives SERP AOCI
Three Months Ended September 30, 2024      
Balance at beginning of period $ (130,248) $ 7,260  $ 297  $ (122,691)
Other comprehensive income (loss) before reclassifications 19,942  (3,177) —  16,765 
Reclassification adjustments from AOCI 1,413  —  (1) 1,412 
Total other comprehensive income (loss) 21,355  (3,177) (1) 18,177 
Balance at end of period $ (108,893) $ 4,083  $ 296  $ (104,514)

(dollars in thousands) Investment Securities Derivatives SERP AOCI
Three Months Ended September 30, 2023      
Balance at beginning of period $ (141,252) $ 5,522  $ 455  $ (135,275)
Other comprehensive income (loss) before reclassifications (18,160) 2,313  —  (15,847)
Reclassification adjustments from AOCI 1,587  —  (12) 1,575 
Total other comprehensive income (loss) (16,573) 2,313  (12) (14,272)
Balance at end of period $ (157,825) $ 7,835  $ 443  $ (149,547)

35

(dollars in thousands) Investment Securities Derivatives SERP AOCI
Nine Months Ended September 30, 2024      
Balance at beginning of period $ (127,922) $ 5,029  $ 297  $ (122,596)
Other comprehensive income (loss) before reclassifications 15,036  (946) —  14,090 
Reclassification adjustments from AOCI 3,993  —  (1) 3,992 
Total other comprehensive income (loss) 19,029  (946) (1) 18,082 
Balance at end of period $ (108,893) $ 4,083  $ 296  $ (104,514)

(dollars in thousands) Investment Securities Derivatives SERP AOCI
Nine Months Ended September 30, 2023      
Balance at beginning of period $ (149,109) $ 4,645  $ 480  $ (143,984)
Other comprehensive income (loss) before reclassifications (12,979) 3,190  —  (9,789)
Reclassification adjustments from AOCI 4,263  —  (37) 4,226 
Total other comprehensive income (loss) (8,716) 3,190  (37) (5,563)
Balance at end of period $ (157,825) $ 7,835  $ 443  $ (149,547)


The following tables present the amounts reclassified out of each component of AOCI for the periods presented:

Amount Reclassified from AOCI Affected Line Item in the Statement Where Net Income is Presented
(dollars in thousands) Three Months Ended September 30,
Details about AOCI Components 2024 2023
Sale of AFS investment securities:
Realized loss on sale of AFS investment securities $ —  $ 135  Net loss on sale of investment securities
Tax effect —  (36) Income tax benefit
Net of tax —  99 
Amortization of unrealized losses on investment securities transferred to HTM:
Amortization 1,920  2,026  Interest and dividends on investment securities
Tax effect (507) (538) Income tax benefit
Net of tax 1,413  1,488 
SERP:      
Amortization of net actuarial gain (2) (19) Other operating expense - other
Amortization of net transition obligation —  Other operating expense - other
Total before tax (2) (17)
Tax effect Income tax expense
Net of tax (1) (12)
Total reclassification adjustments from AOCI for the period, net of tax $ 1,412  $ 1,575 

36

Amount Reclassified from AOCI Affected Line Item in the Statement Where Net Income is Presented
(dollars in thousands) Nine Months Ended September 30,
Details about AOCI Components 2024 2023
Sale of AFS investment securities:
Realized loss on sale of AFS investment securities $ —  $ 135  Net loss on sale of investment securities
Tax effect —  (36) Income tax benefit
Net of tax —  99 
Amortization of unrealized losses on investment securities transferred to HTM:
Amortization 5,425  5,670  Interest and dividends on investment securities
Tax effect (1,432) (1,506) Income tax benefit
Net of tax 3,993  4,164 
SERP:      
Amortization of net actuarial gain (2) (58) Other operating expense - other
Amortization of net transition obligation —  Other operating expense - other
Total before tax (2) (52)
Tax effect 15  Income tax expense
Net of tax (1) (37)
Total reclassification adjustments from AOCI for the period, net of tax $ 3,992  $ 4,226 
14. EARNINGS PER SHARE

The following table presents the information used to compute basic and diluted earnings per share for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands, except per share data) 2024 2023 2024 2023
Net income $ 13,305  $ 13,141  $ 42,067  $ 43,803 
Weighted average common shares outstanding - basic 27,064,035  27,042,762  27,054,737  27,022,141 
Dilutive effect of employee stock options and awards 130,590  36,722  83,248  59,400 
Weighted average common shares outstanding - diluted 27,194,625  27,079,484  27,137,985  27,081,541 
Basic earnings per share $ 0.49  $ 0.49  $ 1.55  $ 1.62 
Diluted earnings per share $ 0.49  $ 0.49  $ 1.55  $ 1.62 
Anti-dilutive employee stock options and awards —  23,830  62  24,281 

15. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Disclosures about Fair Value of Financial Instruments

Fair value estimates, methods and assumptions are set forth below for our financial instruments.

Short-Term Financial Instruments

The carrying values of short-term financial instruments are deemed to approximate fair values. Such instruments are considered readily convertible to cash and include cash and due from financial institutions, interest-bearing deposits in other financial institutions, accrued interest receivable, the majority of FHLB advances and other short-term borrowings, and accrued interest payable.
37


Investment Securities

The fair value of investment securities is based on market price quotations received from third-party pricing services. The third-party pricing services utilize pricing models supported with timely market data information. Where quoted market prices are not available, fair values are based on quoted market prices of comparable securities.

Loans

Fair values of loans are estimated based on discounted cash flows of portfolios of loans with similar financial characteristics including the type of loan, interest terms and repayment history. Fair values are calculated by discounting scheduled cash flows through estimated maturities using estimated market discount rates. Estimated market discount rates are reflective of credit and interest rate risks inherent in the Company's various loan types and are derived from available market information, as well as specific borrower information. The weighted average discount rate used in the valuation of loans was 6.28% and 6.86% as of September 30, 2024 and December 31, 2023, respectively. In accordance with ASU 2016-01, the fair values of loans are measured based on the notion of exit price.

Loans Held for Sale

The fair value of loans classified as held for sale are generally based upon quoted prices for similar assets in active markets, acceptance of firm offer letters with agreed upon purchase prices, discounted cash flow models that take into account market observable assumptions, or independent appraisals of the underlying collateral securing the loans. We report loans previously held for investment that were transferred to loans held for sale, if any, at fair value, net of estimated selling costs on our consolidated balance sheets.

Deposit Liabilities

The fair values of deposits with no stated maturity, such as noninterest-bearing demand deposits and interest-bearing demand and savings accounts, for the purposes of this disclosure, are shown to equal the carrying amount which is the amount payable on demand. The fair value of time deposits is estimated by discounting future cash flows using rates currently offered for FHLB advances of similar remaining maturities. The weighted average discount rate used in the valuation of time deposits was 4.75% and 5.48% as of September 30, 2024 and December 31, 2023, respectively.

Long-Term Debt

The fair values of our long-term debt is estimated by discounting scheduled cash flows over the contractual borrowing period at the estimated market rate for similar borrowing arrangements. The weighted average discount rate used in the valuation of long-term debt was 6.15% and 6.83% as of September 30, 2024 and December 31, 2023, respectively.

Derivatives

The fair values of derivative financial instruments are based upon current market values, if available. If there are no relevant comparable values, fair values are based on pricing models using current assumptions for interest rate swaps and options.

Off-Balance Sheet Financial Instruments

The fair values of off-balance sheet financial instruments are estimated based on the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties, current settlement values or quoted market prices of comparable instruments.

Limitations

Fair value estimates are made at a specific point in time based on relevant market and financial instrument information. These estimates do not reflect any premium or discount that could result from offering for sale at one time our entire holdings of a particular financial instrument. Because no market exists for a significant portion of our financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates cannot be determined with precision as they are subjective in nature and involve uncertainties and matters of significant judgment.
38

Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of future business and the value of assets and liabilities that are not considered financial instruments. For example, significant assets and liabilities that are not considered financial assets or liabilities include deferred tax assets, premises and equipment and intangible assets.

      Fair Value Measurement Using
(dollars in thousands) Carrying
Amount
Estimated
Fair Value
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
September 30, 2024          
Financial assets:          
Cash and due from financial institutions $ 100,064  $ 100,064  $ 100,064  $ —  $ — 
Interest-bearing deposits in other financial institutions 226,505  226,505  226,505  —  — 
Investment securities 1,329,570  1,270,443  36,453  1,226,934  7,056 
Loans held for sale 1,609  1,609  —  1,609  — 
Loans 5,342,609  5,023,606  —  —  5,023,606 
Accrued interest receivable 23,942  23,942  489  4,054  19,399 
Financial liabilities:          
Deposits:          
Noninterest-bearing demand 1,838,009  1,838,009  1,838,009  —  — 
Interest-bearing demand and savings and money market 3,591,705  3,591,705  3,591,705  —  — 
Time 1,153,299  1,146,531  —  —  1,146,531 
Long-term debt 156,284  150,081  —  —  150,081 
Accrued interest payable 12,980  12,980  123  —  12,857 

      Fair Value Measurement Using
(dollars in thousands) Notional
Amount
Carrying
Amount
Estimated
Fair Value
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
September 30, 2024          
Off-balance sheet financial instruments:  
Commitments to extend credit $ 1,267,835  $ —  $ 1,244  $ —  $ 1,244  $ — 
Standby letters of credit and financial guarantees written 2,807  —  42  —  42  — 
Derivatives:
Interest rate lock commitments 1,585  (2) (2) —  (2) — 
Risk participation agreements 35,395  —  —  —  —  — 
Back-to-back swap agreements:
Assets 50,426  2,875  2,875  —  —  2,875 
Liabilities (50,426) (2,875) (2,875) —  —  (2,875)
Interest rate swap agreements 115,545  5,202  5,202  —  —  5,202 
39

      Fair Value Measurement Using
(dollars in thousands) Carrying
Amount
Estimated
Fair Value
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
December 31, 2023          
Financial assets:          
Cash and due from financial institutions $ 116,181  $ 116,181  $ 116,181  $ —  $ — 
Interest-bearing deposits in other financial institutions 406,256  406,256  406,256  —  — 
Investment securities 1,279,548  1,212,388  —  1,205,238  7,150 
Loans held for sale 1,778  1,778  —  1,778  — 
Loans 5,438,982  5,089,292  —  —  5,089,292 
Accrued interest receivable 21,511  21,511  342  4,043  17,126 
Financial liabilities:          
Deposits:          
Noninterest-bearing demand 1,913,379  1,913,379  1,913,379  —  — 
Interest-bearing demand and savings and money market 3,538,922  3,538,922  3,538,922  —  — 
Time 1,395,291  1,385,473  —  —  1,385,473 
Long-term debt 156,102  153,073  —  —  153,073 
Accrued interest payable 18,948  18,948  85  —  18,863 

      Fair Value Measurement Using
(dollars in thousands) Notional
Amount
Carrying
Amount
Estimated
Fair Value
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
December 31, 2023
Off-balance sheet financial instruments:            
Commitments to extend credit $ 1,275,331  $ —  $ 1,210  $ —  $ 1,210  $ — 
Standby letters of credit and financial guarantees written 3,301  —  50  —  50  — 
Derivatives:
Interest rate lock commitments 1,807  (34) (34) —  (34) — 
Risk participation agreements 36,022  —  —  —  —  — 
Back-to-back swap agreements:
Assets 51,059  3,547  3,547  —  —  3,547 
Liabilities (51,059) (3,547) (3,547) —  —  (3,547)
Interest rate swap agreements 115,545  6,440  6,440  —  —  6,440 

Fair Value Measurements

We group our financial assets and liabilities at fair value into three levels based on the markets in which the financial assets and liabilities are traded and the reliability of the assumptions used to determine fair value as follows:

•Level 1 — Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities traded in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

•Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

•Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in
40

pricing the asset or liability. Valuation techniques include use of discounted cash flow models and similar techniques that requires the use of significant judgment or estimation.

We base our fair values on the price that we would expect to receive if an asset were sold, or the price that we would expect to pay to transfer a liability in an orderly transaction between market participants at the measurement date. We also maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements.

We use fair value measurements to record adjustments to certain financial assets and liabilities and to determine fair value disclosures. Available-for-sale securities and derivatives are recorded at fair value on a recurring basis. Periodically, we may be required to record other financial assets at fair value on a nonrecurring basis such as loans held for sale, individually evaluated loans, mortgage servicing rights, and other real estate owned. These nonrecurring fair value adjustments typically involve application of the lower of cost or fair value accounting or write-downs of individual assets.

The following tables present the fair value of financial assets and liabilities measured on a recurring basis as of the dates presented:
    Fair Value at Reporting Date Using
(dollars in thousands) Fair Value Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
September 30, 2024        
Available-for-sale securities:        
Debt securities:        
States and political subdivisions $ 123,181  $ —  $ 116,843  $ 6,338 
Corporate securities 32,554  —  32,554  — 
U.S. Treasury and other government-sponsored entities and agencies 59,230  36,453  22,777  — 
Mortgage-backed securities:        
Residential - U.S. government-sponsored entities and agencies 386,296  —  386,296  — 
Residential - Non-government agencies 17,834  —  17,116  718 
Commercial - U.S. government-sponsored entities and agencies 89,029  —  89,029  — 
Commercial - Non-government agencies 15,329  —  15,329  — 
Total available-for-sale investment securities 723,453  36,453  679,944  7,056 
Derivatives:
Interest rate lock commitments (2) —  (2) — 
Interest rate swap agreements 5,202  —  —  5,202 
Total derivatives 5,200  —  (2) 5,202 
Total $ 728,653  $ 36,453  $ 679,942  $ 12,258 

41

    Fair Value at Reporting Date Using
(dollars in thousands) Fair Value Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
December 31, 2023        
Available-for-sale securities:        
Debt securities:        
States and political subdivisions $ 126,635  $ —  $ 120,199  $ 6,436 
Corporate securities 31,414  —  31,414  — 
U.S. Treasury and other government-sponsored entities and agencies 26,197  —  26,197  — 
Mortgage-backed securities:        
Residential - U.S. government-sponsored entities and agencies 378,386  —  378,386  — 
Residential - Non-government agencies 18,708  —  17,994  714 
Commercial - U.S. government-sponsored entities and agencies 50,914  —  50,914  — 
Commercial - Non-government agencies 14,956  —  14,956  — 
Total available-for-sale investment securities 647,210  —  640,060  7,150 
Derivatives:
Interest rate lock commitments (34) —  (34) — 
Interest rate swap agreements 6,440  —  —  6,440 
Total derivatives 6,406  —  (34) 6,440 
Total $ 653,616  $ —  $ 640,026  $ 13,590 

The following table presents changes in Level 3 financial assets and liabilities measured at fair value on a recurring basis for the periods presented:
Available-For-Sale Debt Securities:
(dollars in thousands) States and Political Subdivisions Residential - Non-Government Agencies Interest Rate Swap Agreements Total
Balance at December 31, 2023 $ 6,436  $ 714  $ 6,440  $ 13,590 
Principal payments received (163) (18) —  (181)
Unrealized net gain (loss) included in other comprehensive income 65  22  (1,238) (1,151)
Balance at September 30, 2024 $ 6,338  $ 718  $ 5,202  $ 12,258 
   
Balance at December 31, 2022 $ 6,584  $ 684  $ 5,986  $ 13,254 
Principal payments received (172) (17) —  (189)
Unrealized net gain (loss) included in other comprehensive income (49) 4,149  4,104 
Balance at September 30, 2023 $ 6,363  $ 671  $ 10,135  $ 17,169 

Based on a discounted cash flow model that calculates the present value of estimated future principal and interest payments, the estimated aggregate fair value of Level 3 financial assets and liabilities measured at fair value on a recurring basis was $12.3 million and $13.6 million as of September 30, 2024 and December 31, 2023, respectively.

The weighted-average discount rate was used as the significant unobservable input in the fair value measurement of the available-for-sale debt securities. The weighted average discount rate utilized was 5.72% and 6.12% as of September 30, 2024 and December 31, 2023, respectively, which was derived by incorporating a credit spread over the FHLB Fixed-Rate Advance curve. Significant increases (decreases) in the weighted-average discount rate could result in a significantly lower (higher) fair value measurement.
42


The significant unobservable input used in the fair value measurement of the Company's interest rate swap is the weighted-average discount rate. The weighted average discount rate utilized was 3.42% and 3.34% as of September 30, 2024 and December 31, 2023, respectively.

There were no financial assets or liabilities measured on a nonrecurring basis as of September 30, 2024 and December 31, 2023.
16. LEGAL PROCEEDINGS

We are involved in legal proceedings that arise in the ordinary course of our business. The outcome of these matters and the timing of ultimate resolution is inherently difficult to predict. Based on information currently available to us, we do not expect that the ultimate costs to resolve these matters will have a material adverse effect on our financial condition or operations.

43

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements and Factors that Could Affect Future Results

Certain statements contained in this quarterly report on Form 10-Q that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), notwithstanding that such statements are not specifically identified. In addition, certain statements may be contained in our future filings with the U.S. Securities and Exchange Commission ("SEC"), in press releases and in oral and written statements made by us or with our approval that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the payment or nonpayment of dividends, capital position, credit losses, and net interest margin or other financial items; (ii) statements of 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 and regulatory actions; (iii) statements of future economic performance including anticipated performance results from our business initiatives; and (iv) any statements of the assumptions underlying or relating to any of the foregoing. Words such as "believe," "plan," "anticipate," "seek," "expect," "intend," "forecast," "hope," "target," "continue," "remain," "estimate," "will," "should," "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

While we believe that our forward-looking statements and the assumptions underlying them are reasonably based, such statements and assumptions are by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect. Accordingly, actual results could differ materially from those statements or projections for a variety of reasons. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

•the effects of inflation and interest rate fluctuations;
•the adverse effects of recent bank failures and the potential impact of such developments on customer confidence, deposit behavior, liquidity and regulatory responses thereto;
•the adverse effects of the COVID-19 pandemic virus (and its variants) and other pandemic viruses on local, national and international economies, including, but not limited to, the adverse impact on tourism and construction in the State of Hawaii, our borrowers, customers, third-party contractors, vendors and employees, as well as the effects of government programs and initiatives in response thereto;
•supply chain disruptions;
•labor contract disputes and potential strikes impacting both the U.S. National and Hawaii economies;
•the increase in inventory or adverse conditions in the real estate market and deterioration in the construction industry;
•adverse changes in the financial performance and/or condition of our borrowers and, as a result, increased loan delinquency rates, deterioration in asset quality, and losses in our loan portfolio;
•the impact of local, national, and international economies and events (including natural disasters such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, and earthquakes) on the Company's business and operations and on tourism, the military, and other major industries operating within the Hawaii market and any other markets in which the Company does business;
•deterioration or malaise in domestic economic conditions, including any destabilization in the financial industry and deterioration of the real estate market, as well as the impact of declining levels of consumer and business confidence in the state of the economy in general and in financial institutions in particular;
•changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements;
•the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), changes in capital standards, other regulatory reform and federal and state legislation, including but not limited to regulations promulgated by the Consumer Financial Protection Bureau (the "CFPB"), government-sponsored enterprise reform, and any related rules and regulations which affect our business operations and competitiveness;
•the costs and effects of legal and regulatory developments, including legal proceedings and lawsuits we are or may become subject to, or regulatory or other governmental inquiries and proceedings and the resolution thereof, the results of regulatory examinations or reviews and the effect of, and our ability to comply with, any regulations or regulatory orders or actions we are or may become subject to, and the effect of any recurring or special FDIC assessments;
44

•the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board ("PCAOB"), the Financial Accounting Standards Board ("FASB") and other accounting standard setters and the cost and resources required to implement such changes;
•the effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System (the "FRB" or the "Federal Reserve");
•securities market and monetary fluctuations, including the impact resulting from the elimination of the London Interbank Offered Rate Index;
•negative trends in our market capitalization and adverse changes in the price of the Company's common stock;
•the effects of any acquisitions or dispositions we may make or evaluate, and the costs associated with any potential or actual acquisition or disposition, including re-engagement in any potential acquisition process;
•political instability;
•acts of war or terrorism;
•changes in consumer spending, borrowings and savings habits;
•technological changes and developments;
•cybersecurity and data privacy breaches and the consequence therefrom;
•failure to maintain effective internal control over financial reporting or disclosure controls and procedures;
•our ability to address deficiencies in our internal controls over financial reporting or disclosure controls and procedures;
•changes in the competitive environment among financial holding companies and other financial service providers;
•our ability to successfully implement our initiatives to lower our efficiency ratio;
•our ability to attract and retain key personnel;
•changes in our personnel, organization, compensation and benefit plans;
•our ability to successfully implement and achieve the objectives of our Banking-as-a-Service ("BaaS") initiatives, including adoption of the initiatives by customers and risks faced by any of our bank collaborations including reputational and regulatory risk; and
•our success at managing the risks involved in the foregoing items.

For further information with respect to factors that could cause actual results to materially differ from the expectations or projections stated in the forward-looking statements, please see the Company's publicly available Securities and Exchange Commission filings, including the Company's Form 10-K for the last fiscal year and in particular, the discussion of "Risk Factors" set forth therein and herein. We urge investors to consider all of these factors carefully in evaluating the forward-looking statements contained in this document. Forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events except as required by law.

Overview

Central Pacific Financial Corp. ("CPF") is a Hawaii corporation and a bank holding company. Our principal business is to serve as a holding company for our bank subsidiary, Central Pacific Bank. We refer to Central Pacific Bank herein as "our Bank" or "the Bank," and when we say "the Company," "we," "us" or "our," we mean the holding company on a consolidated basis with the Bank and our other consolidated subsidiaries.

Central Pacific Bank is a full-service community bank with 27 branches and 56 ATMs located throughout the State of Hawaii as of September 30, 2024.

The Bank offers traditional deposit and lending products and services to consumer and business customers such as accepting demand, money market, savings and time deposits, originating loans, including commercial loans, construction loans, commercial real estate loans, residential mortgage loans, and consumer loans and fiduciary and investment management services.

Basis of Presentation

Management's discussion and analysis of financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements under "Part I, Item 1.
45

Financial Statements (Unaudited)." The following discussion should also be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (the "SEC") on February 21, 2024, including the “Risk Factors” set forth therein.

Critical Accounting Policies and Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires that management make certain judgments and use certain estimates and assumptions that affect amounts reported and disclosures made. Actual results may differ from those estimates and such differences could be material to the financial statements.

Accounting estimates are deemed critical when a different estimate could have reasonably been used or where changes in the estimate are reasonably likely to occur from period-to-period and would materially impact our consolidated financial statements as of or for the periods presented. Management has discussed the development and selection of the critical accounting estimates noted below with the Audit Committee of the Board of Directors, and the Audit Committee has reviewed the accompanying disclosures.

The Company identified a significant accounting policy, which involves a higher degree of judgment and complexity in making certain estimates and assumptions that affect amounts reported in our consolidated financial statements. At September 30, 2024 and December 31, 2023, the significant accounting policy that we believed to be the most critical in preparing our consolidated financial statements is the determination of the allowance for credit losses ("ACL") on loans. This is further described in Note 1 - Summary of Significant Accounting Policies included in the accompanying notes to the consolidated financial statements, Note 1 - Summary of Significant Accounting Policies included in the accompanying notes to the consolidated financial statements for the year ended December 31, 2023, and the section titled "Critical Accounting Policies and Use of Estimates" in Management's Discussion and Analysis of Financial Condition and Operating Results included in the Company's 2023 Annual Report on Form 10-K.

Financial Summary

Net income for the three months ended September 30, 2024 was $13.3 million, or $0.49 per diluted share, compared to net income of $13.1 million, or $0.49 per diluted share for the three months ended September 30, 2023. Net income during the third quarter of 2024 was impacted by $3.1 million in pre-tax expenses related to our evaluation and assessment of a strategic opportunity.

Net income for the nine months ended September 30, 2024 was $42.1 million, or $1.55 per diluted share, compared to net income of $43.8 million, or $1.62 per diluted share for the nine months ended September 30, 2023.

During the three months ended September 30, 2024, the Company recorded a provision for credit losses of $2.8 million, compared to a provision of $4.9 million during the three months ended September 30, 2023. The decrease was primarily due to a decrease in loan balances outstanding and improvements in the Hawaii economic forecast assumptions used in the Company's estimate of the ACL.

During the nine months ended September 30, 2024, the Company recorded a provision for credit losses of $9.0 million, compared to a provision of $11.0 million during the nine months ended September 30, 2023.

The Company's pre-provision net revenue ("PPNR"), a non-GAAP financial measure which excludes the provision for credit losses and income tax expense from net income, for the three months ended September 30, 2024 was $19.9 million, compared to $22.4 million for the three months ended September 30, 2023. The Company's PPNR for the nine months ended September 30, 2024 was $63.6 million, compared to $68.7 million for the nine months ended September 30, 2023. The decrease in PPNR for the three and nine months ended September 30, 2024 is primarily due to the aforementioned expenses related to a strategic opportunity. See the following section titled "Non-GAAP Financial Measures" for reconciliation of PPNR.

46

The following table presents annualized returns on average assets ("ROA") and average shareholders' equity ("ROE"), and basic and diluted earnings per share ("EPS") for the periods presented. ROA and ROE are annualized based on a 30/360 day convention.

Three Months Ended September 30, Nine Months Ended September 30,
  2024 2023 2024 2023
Return on average assets 0.72  % 0.70  % 0.76  % 0.78  %
Return on average shareholders’ equity 10.02  10.95  10.91  12.33 
Basic earnings per share $ 0.49  $ 0.49  $ 1.55  $ 1.62 
Diluted earnings per share 0.49  0.49  1.55  1.62 

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in addition to our GAAP results to provide useful information which we believe are better indicators of the Company's core activities. This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be comparable to similarly entitled measures reported by other companies.

The reconciling adjustments from GAAP or reported financial measures to non-GAAP adjusted financial measures are limited to the $3.1 million in pre-tax expenses related to our evaluation and assessment of a strategic opportunity. Management does not consider these expenses to be representative of the Company's core earnings.

Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
Financial Measures:
Net income $ 13,305  $ 13,141  $ 42,067  $ 43,803 
Diluted earnings per share $ 0.49  $ 0.49  $ 1.55  $ 1.62 
Pre-provision net revenue (non-GAAP) $ 19,898  $ 22,364  $ 63,644  $ 68,728 
Return on average assets 0.72  % 0.70  % 0.76  % 0.78  %
Return on average shareholders' equity 10.02  % 10.95  % 10.91  % 12.33  %
Efficiency ratio (non-GAAP) 70.12  % 63.91  % 66.86  % 63.89  %
As of September 30, 2024 and 2023:
Tangible common equity ratio (non-GAAP) 7.31  % 6.12  %
Adjusted Financial Measures (Non-GAAP):
Adjusted net income $ 15,667  $ 13,141  $ 44,429  $ 43,803 
Adjusted diluted earnings per share $ 0.58  $ 0.49  $ 1.64  $ 1.62 
Adjusted pre-provision net revenue (non-GAAP) $ 22,966  $ 22,364  $ 66,712  $ 68,728 
Adjusted return on average assets 0.85  % 0.70  % 0.80  % 0.78  %
Adjusted return on average shareholders' equity 11.75  % 10.95  % 11.51  % 12.33  %
Adjusted efficiency ratio (non-GAAP) 65.51  % 63.91  % 65.26  % 63.89  %
As of September 30, 2024 and 2023:
Adjusted tangible common equity ratio (non-GAAP) 7.34  % 6.12  %

47

Adjusted Net Income and Diluted Earnings per Share

The following table presents a reconciliation of the Company's adjusted net income and adjusted diluted EPS for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands, except per share data) 2024 2023 2024 2023
GAAP net income $ 13,305  $ 13,141  $ 42,067  $ 43,803 
Add: Pre-tax expenses related to a strategic opportunity 3,068  —  3,068  — 
Less: Income tax effects (assumes 23% ETR) (706) —  (706) — 
Expenses related to a strategic opportunity, net of tax
2,362  —  2,362  — 
Adjusted net income (non-GAAP) $ 15,667  $ 13,141  $ 44,429  $ 43,803 
Diluted weighted average shares outstanding 27,194,625  27,079,484  27,137,985  27,081,541 
GAAP diluted EPS $ 0.49  $ 0.49  $ 1.55  $ 1.62 
Add: Expenses related to a strategic opportunity, net of tax 0.09  —  0.09  — 
Adjusted diluted EPS (non-GAAP) $ 0.58  $ 0.49  $ 1.64  $ 1.62 
Adjusted Pre-Provision Net Revenue

The Company believes that PPNR, a non-GAAP financial measure, is useful as a tool to help evaluate the ability to provide for credit costs through operations. The following table presents a reconciliation of the Company's PPNR and adjusted PPNR for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2024 2023 2024 2023
GAAP net income $ 13,305  $ 13,141  $ 42,067  $ 43,803 
Add: Income tax expense 3,760  4,349  12,569  13,880 
Pre-tax income 17,065  17,490  54,636  57,683 
Add: Provision (credit) for credit losses 2,833  4,874  9,008  11,045 
PPNR (non-GAAP)
19,898  22,364  63,644  68,728 
Add: Pre-tax expenses related to a strategic opportunity 3,068  —  3,068  — 
Adjusted PPNR (non-GAAP)
$ 22,966  $ 22,364  $ 66,712  $ 68,728 
The higher adjusted PPNR in the third quarter of 2024 was primarily due to higher net interest income of $1.9 million compared to the year-ago period. The higher net interest income was primarily due to higher average yields earned on interest-earning assets, which outpaced the higher average rates paid on interest-bearing deposits.

The lower adjusted PPNR in the nine months ended September 30, 2024 was primarily due to lower net interest income of $2.9 million compared to the year-ago period. The lower net interest income was primarily due to higher average balances and rates paid on interest-bearing deposits driven by the high interest rate environment in 2024, which outpaced the higher average yields earned on loans and investment securities.

Adjusted Efficiency Ratio

The Company believes that the efficiency ratio, a non-GAAP financial measure, provides useful supplemental information that is important to a proper understanding of the Company's business results and operating efficiency, which is calculated by dividing total other operating expense by total revenue (net interest income and total other operating income).

48

The following table presents a calculation of our efficiency ratio and adjusted efficiency ratio for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2024 2023 2024 2023
Total other operating expense $ 46,687  $ 39,611  $ 128,414  $ 121,621 
Less: Pre-tax expenses related to a strategic opportunity (3,068) —  (3,068) — 
Adjusted total other operating expense (non-GAAP) $ 43,619  $ 39,611  $ 125,346  $ 121,621 
Net interest income $ 53,851  $ 51,928  $ 155,959  $ 158,858 
Total other operating income 12,734  10,047  36,099  31,491 
Total revenue $ 66,585  $ 61,975  $ 192,058  $ 190,349 
Efficiency ratio (non-GAAP) 70.12  % 63.91  % 66.86  % 63.89  %
Less: Pre-tax expenses related to a strategic opportunity (4.61) —  (1.60) — 
Adjusted efficiency ratio (non-GAAP) 65.51  % 63.91  % 65.26  % 63.89  %

Our adjusted efficiency ratio increased to 65.51% in the third quarter of 2024, compared to 63.91% in the year-ago quarter.
For the nine months ended September 30, 2024, our adjusted efficiency ratio increased to 65.26%, compared to 63.89% in the year-ago period.

The higher adjusted efficiency ratio in the third quarter of 2024, compared to the same year-ago period, was due to higher other operating expense, partially offset by higher net interest income and other operating income.

The higher adjusted efficiency ratio in the nine months ended September 30, 2024, compared to the same year-ago period, was due to higher other operating expense and lower net interest income, partially offset by higher other operating income.

49

Adjusted Return on Average Assets and Adjusted Return on Average Shareholders' Equity

The following table presents a calculation of our adjusted ROA and adjusted ROE for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2024 2023 2024 2023
Average assets $ 7,347,403  $ 7,510,537  $ 7,378,479  $ 7,472,890 
Add: Expenses related to a strategic opportunity, net of tax 2,362  —  787  — 
Adjusted average assets (non-GAAP) $ 7,349,765  $ 7,510,537  $ 7,379,266  $ 7,472,890 
ROA (GAAP net income divided by average assets) 0.72  % 0.70  % 0.76  % 0.78  %
Add: Expenses related to a strategic opportunity, net of tax 0.13  —  0.04  — 
Adjusted ROA (non-GAAP) 0.85  % 0.70  % 0.80  % 0.78  %
Average shareholders' equity $ 530,928  $ 480,118  $ 513,914  $ 473,856 
Add: Expenses related to a strategic opportunity, net of tax 2,362  —  787  — 
Adjusted average shareholders' equity (non-GAAP) $ 533,290  $ 480,118  $ 514,701  $ 473,856 
ROE (GAAP net income divided by average shareholders' equity) 10.02  % 10.95  % 10.91  % 12.33  %
Add: Expenses related to a strategic opportunity, net of tax 1.73  —  0.60  — 
Adjusted ROE (non-GAAP) 11.75  % 10.95  % 11.51  % 12.33  %

Adjusted Tangible Common Equity Ratio

The following table presents a calculation of our tangible common equity ("TCE") ratio and adjusted TCE ratio as of the dates presented:

(dollars in thousands) September 30, 2024 September 30, 2023
TCE (non-GAAP) $ 542,335  $ 467,114 
Add: Expenses related to a strategic opportunity, net of tax 2,362  — 
Adjusted TCE (non-GAAP) $ 544,697  $ 467,114 
Tangible assets (non-GAAP) $ 7,414,040  $ 7,636,440 
Add: Expenses related to a strategic opportunity, net of tax 2,362  — 
Adjusted tangible assets (non-GAAP) $ 7,416,402  $ 7,636,440 
TCE ratio (non-GAAP) 7.31  % 6.12  %
Add: Expenses related to a strategic opportunity, net of tax 0.03  % —  %
Adjusted TCE ratio (non-GAAP) 7.34  % 6.12  %

Material Trends

The majority of our operations are concentrated in the State of Hawaii. As a result, our performance is significantly influenced by the strength of the real estate markets, economic environment and environmental conditions in Hawaii. Macroeconomic conditions also influence our performance. A favorable business environment is generally characterized by expanding gross state product, low unemployment and rising personal income, while an unfavorable business environment is characterized by the reverse.

50

On August 8, 2023, a series of wildfires broke out on the Island of Maui, in Kula, Upcountry Maui, Kihei, and most devastatingly in the town of Lahaina. The wildfires took the lives of at least 100 people and destroyed over 2,200 structures, of which approximately 86% were residential homes. The disaster area had more than 800 business establishments with about 7,000 employees. The Company did not sustain any damages to its facilities on Maui.

Visitors to Maui decreased by approximately 57% in September 2023 compared to September 2022 but has started to recover at a slow but steady pace as West Maui officially reopened to visitors in early October 2023 and government officials are encouraging travelers to return to Maui, while avoiding the affected area, to support its economic recovery. In August 2024, visitors to Maui were up by approximately 80% compared to August 2023, but still down by 25% from August 2019. The unemployment rate for the Island of Maui was 8.4% in September 2023 and has since improved to 4.0% in September 2024.

In response to the Maui wildfires, the Company provided three to six months interest and/or principal loan payment deferrals to customers who were directly impacted by the wildfires on a case-by-case basis, which have all ended and returned to current payment status as of September 30, 2024.

Despite the Maui wildfires, Hawaii’s economy continued its recovery from the COVID-19 pandemic. According to preliminary statistics from the Hawaii Tourism Authority ("HTA"), a total of 6.5 million visitors arrived to the Hawaiian Islands during the eight months ended August 31, 2024, mainly from the U.S. Mainland, compared to 6.7 million in the same prior year period and 7.1 million from the same period in the pre-pandemic and record year in 2019. Average daily visitors from Japan were up approximately 27% during the eight months ended August 31, 2024 compared to the same prior year period, but were down by approximately 54% from the same period in 2019.

Total spending for visitors arriving in the eight months ended August 31, 2024 was $14.06 billion, down 2.3% from $14.39 billion in the same period last year, and up by 16.6% from $12.06 billion in the eight months ended August 31, 2019.

According to a September 2024 report by the University of Hawaii Economic Research Organization ("UHERO"), total visitor arrivals by air are expected to be approximately 9.7 million in 2024, which is an increase of approximately 0.9% from 9.6 million last year. Visitor spending is expected to decline approximately 4.0% to $19.89 billion in 2024 from last year's record year for visitor spending of $20.71 billion.

The Department of Labor and Industrial Relations reported that Hawaii's seasonally adjusted annual unemployment rate was 2.9% in the month of September 2024, compared to 3.0% in the month of September 2023 and the national seasonally adjusted unemployment rate of 4.1% in the month of September 2024. UHERO projects Hawaii's seasonally adjusted annual unemployment rate to remain low at approximately 3.0% in 2024.

Real estate lending is one of the primary focuses for the Company, including residential mortgage and commercial mortgage loans. As a result, the Company is dependent on the strength of Hawaii's real estate market. While the Hawaii housing market continues to experience some moderation in sales activity, there continues to be strong demand and low inventory. According to the Honolulu Board of Realtors, sales of Oahu single-family homes in the nine months ended September 30, 2024 were up 5.8%, while sales of Oahu condominiums were down 5.6% from the same prior year period. The Oahu single-family home median price in the nine months ended September 30, 2024 rose by 4.8% to $1.10 million from $1.05 million in the same prior year period. The Oahu condominium median price in the nine months ended September 30, 2024 rose by 1.0% to $510,000 from $505,000 in the same prior year period.

Hawaii's economy is measured by the growth of real personal income and real gross state product. UHERO projects real personal income to grow by 1.4% and real gross state product to grow by 1.0% in 2024.

Results of Operations

Net Interest Income and Net Interest Margin

A comparison of net interest income and net interest margin on a taxable-equivalent basis for the three and nine months ended September 30, 2024 and 2023 is presented below. Net interest margin is defined as annualized net interest income, on a taxable-equivalent basis using a federal statutory tax rate of 21%, as a percentage of average interest earning assets.

51

(dollars in thousands) Three Months Ended September 30,
2024 2023 Variance
Average
Balance
Average
Yield/
Rate
Interest
Income/
Expense
Average
Balance
Average
Yield/
Rate
Interest
Income/
Expense
Average
Balance
Average
Yield/
Rate
Interest
Income/
Expense
Assets          
Interest earning assets:  
Interest-bearing deposits in other financial institutions $ 203,657  5.42  % $ 2,775  $ 177,780  5.38  % $ 2,412  $ 25,877  0.04  % $ 363 
Investment securities:
Taxable (1) 1,340,347  2.68  8,975  1,354,039  2.07  7,016  (13,692) 0.61  1,959 
Tax-exempt (1) (2) 141,168  1.98  697  149,824  2.40  897  (8,656) (0.42) (200)
Total investment securities 1,481,515  2.61  9,672  1,503,863  2.10  7,913  (22,348) 0.51  1,759 
Loans, including loans held for sale 5,330,810  4.89  65,469  5,507,248  4.49  62,162  (176,438) 0.40  3,307 
FHLB stock 6,928  7.31  127  10,975  4.09  113  (4,047) 3.22  14 
Total interest earning assets 7,022,910  4.43  78,043  7,199,866  4.01  72,600  (176,956) 0.42  5,443 
Noninterest-earning assets 324,493      310,671      13,822   
Total assets $ 7,347,403      $ 7,510,537      $ (163,134)  
Liabilities and Equity
Interest-bearing liabilities:                  
Interest-bearing demand deposits $ 1,267,135  0.15  % $ 484  $ 1,339,294  0.14  % $ 460  $ (72,159) 0.01  % $ 24 
Savings and money market deposits 2,298,853  1.77  10,235  2,209,835  1.16  6,464  89,018  0.61  3,771 
Time deposits up to $250,000 534,497  3.15  4,238  449,844  2.33  2,637  84,653  0.82  1,601 
Time deposits over $250,000 647,728  4.18  6,802  844,842  4.05  8,631  (197,114) 0.13  (1,829)
Total interest-bearing deposits 4,748,213  1.82  21,759  4,843,815  1.49  18,192  (95,602) 0.33  3,567 
Long-term debt 156,247  5.82  2,287  156,005  5.83  2,292  242  (0.01) (5)
Total interest-bearing liabilities 4,904,460  1.95  24,046  4,999,820  1.63  20,484  (95,360) 0.32  3,562 
Noninterest-bearing deposits 1,787,209    1,894,256    (107,047)
Other liabilities 124,806      136,343      (11,537)  
Total liabilities 6,816,475      7,030,419      (213,944)  
Total equity 530,928      480,118      50,810   
Total liabilities and equity $ 7,347,403      $ 7,510,537      $ (163,134)  
Net interest income     $ 53,997      $ 52,116      $ 1,881 
Interest rate spread 2.48  % 2.38  % 0.10  %
Net interest margin   3.07  %     2.88  %     0.19  %  
(1)  At amortized cost.
(2) Includes taxable-equivalent adjustment using a federal statutory tax rate of 21%.

Net interest income (expressed on a taxable-equivalent basis) was $54.0 million for the third quarter of 2024, representing an increase of $1.9 million, or 3.6% from $52.1 million in the year-ago quarter. The increase in net interest income from the year-ago quarter was primarily due to higher average yields earned on interest earning assets, combined with declines in average interest-bearing demand balances and average time deposits over $250,000 balances. These positive variances were partially offset by declines in average investment securities and loans and higher average rates paid on interest-bearing deposits.

Interest Income

Taxable-equivalent interest income was $78.0 million for the third quarter of 2024, representing an increase of $5.4 million, or 7.5%, from $72.6 million in the year-ago quarter. The increase during the third quarter of 2024, compared to the year-ago quarter was primarily attributable to an increase in average yield earned on loans of 40 basis points ("bp" or "bps"), resulting in an increase in interest income of approximately $5.3 million and an increase in average yield earned on investment securities of 51 bps, resulting in an increase in interest income of approximately $1.9 million, combined with increases in the average balance and average yield earned on interest-bearing deposits in other financial institutions resulting in an increase in interest income of approximately $0.4 million.
52

The increase in the average yield earned on investment securities was partially attributable to income of $1.1 million from an interest rate swap that became effective on March 31, 2024. These increases were partially offset by decreases in average loans and investment securities balances of $176.4 million and $22.3 million, respectively, resulting in decreases in interest income of approximately $2.0 million and $0.1 million, respectively.

Interest Expense

Interest expense was $24.0 million for the third quarter of 2024, representing an increase of $3.6 million, or 17.4%, from $20.5 million in the year-ago quarter. Due to the high interest rate environment, average rates paid on interest-bearing deposits of 1.82% increased by 33 bps from the year-ago quarter, resulting in an increase in interest expense of approximately $4.9 million. The increase was partially offset by a decrease in average interest-bearing deposits of $95.6 million, resulting in a decrease in interest expense of approximately $1.3 million.
Net Interest Margin

Our net interest margin of 3.07% for the third quarter of 2024 increased by 19 bps from 2.88% in the year-ago quarter. The increase in net interest margin for the third quarter of 2024 was primarily attributable to increases in average yields earned on interest-bearing deposits in other financial institutions, investment securities and loans, which outpaced the increase in average rates paid on interest-bearing deposits.

In an effort to rein in inflation, the FRB aggressively increased interest rates since the first quarter of 2022 when the Federal Funds Rate target was 0.00% to 0.25%. Since then, the FRB has raised the Federal Funds Rate by more than five percentage points, up to a 22-year high, 5.25% to 5.50% in July 2023. The Federal Funds rate remained at that level until September 2024. At the September 2024 Federal Open Market Committee ("FOMC") meeting, the FOMC lowered interest rates by 50 bps to 4.75% to 5.00%, as they gained greater confidence that inflation is moving sustainably towards its 2% target.

53

(dollars in thousands) Nine Months Ended September 30,
2024 2023 Variance
Average
Balance
Average
Yield/
Rate
Interest
Income/
Expense
Average
Balance
Average
Yield/
Rate
Interest
Income/
Expense
Average
Balance
Average
Yield/
Rate
Interest
Income/
Expense
Assets
Interest earning assets:
Interest-bearing deposits in other financial institutions $ 210,464  5.45  % $ 8,589  $ 91,202  5.23  % $ 3,566  $ 119,262  0.22  % $ 5,023 
Investment securities:
Taxable (1) 1,333,394  2.47  24,652  1,376,294  2.08  21,497  (42,900) 0.39  3,155 
Tax-exempt (1) (2) 142,085  2.14  2,284  151,611  2.48  2,818  (9,526) (0.34) (534)
Total investment securities 1,475,479  2.43  26,936  1,527,905  2.12  24,315  (52,426) 0.31  2,621 
Loans, including loans held for sale 5,372,247  4.79  192,710  5,525,476  4.37  180,886  (153,229) 0.42  11,824 
FHLB stock 6,885  7.43  384  11,687  4.21  369  (4,802) 3.22  15 
Total interest earning assets 7,065,075  4.32  228,619  7,156,270  3.90  209,136  (91,195) 0.42  19,483 
Noninterest-earning assets 313,404  316,620  (3,216)
Total assets $ 7,378,479  $ 7,472,890  $ (94,411)
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits $ 1,279,256  0.15  % $ 1,473  $ 1,373,831  0.12  % $ 1,234  $ (94,575) 0.03  % $ 239 
Savings and money market deposits 2,246,478  1.64  27,655  2,188,585  0.89  14,520  57,893  0.75  13,135 
Time deposits up to $250,000 544,823  3.22  13,125  394,464  1.88  5,544  150,359  1.34  7,581 
Time deposits over $250,000 714,763  4.31  23,078  775,615  3.61  20,920  (60,852) 0.70  2,158 
Total interest-bearing deposits 4,785,320  1.82  65,331  4,732,495  1.19  42,218  52,825  0.63  23,113 
FHLB advances and other short-term borrowings 22  5.60  31,182  4.88  1,139  (31,160) 0.72  (1,138)
Long-term debt 156,188  5.86  6,848  146,513  5.78  6,329  9,675  0.08  519 
Total interest-bearing liabilities 4,941,530  1.95  72,180  4,910,190  1.35  49,686  31,340  0.60  22,494 
Noninterest-bearing deposits 1,793,854  1,957,267  (163,413)
Other liabilities 129,181  131,577  (2,396)
Total liabilities 6,864,565  6,999,034  (134,469)
Total equity 513,914  473,856  40,058 
Total liabilities and equity $ 7,378,479  $ 7,472,890  $ (94,411)
Net interest income $ 156,439  $ 159,450  $ (3,011)
Interest rate spread 2.37  % 2.55  % (0.18) %
Net interest margin 2.95  % 2.98  % (0.03) %
(1)  At amortized cost.
(2) Includes taxable-equivalent adjustment using a federal statutory tax rate of 21%.

Net interest income (expressed on a taxable-equivalent basis) was $156.4 million for the nine months ended September 30, 2024, representing a decrease of $3.0 million or 1.9% from $159.5 million in the nine months ended September 30, 2023. The decrease from the year-ago period was primarily due to higher average balances and average rates paid on interest-bearing deposits and long-term debt, combined with a decrease in average loans and investment securities balances. These negative variances were partially offset by increases in average yields earned on interest-earning assets.

Interest Income

Taxable-equivalent interest income was $228.6 million for the nine months ended September 30, 2024, representing an increase of $19.5 million, or 9.3%, from $209.1 million in the year-ago period. The increase was primarily attributable to increases in average yields earned on loans and investment securities of 42 bps and 31 bps, respectively, resulting in increases in interest income of approximately $16.9 million and $3.5 million, respectively. The increase in the average yield earned on investment securities was partially attributable to income of $1.9 million from an interest rate swap that became effective on March 31, 2024.
54

In addition, the increase in average balance and yield earned on interest-bearing deposits in other financial institutions of $119.3 million and 22 bps, respectively, resulted in an increase in interest income of approximately $5.0 million. These increases were partially offset by a decrease in average loan balances of $153.2 million during the nine months ended September 30, 2024, compared to the year-ago period, resulting in a decrease in interest income of approximately $5.0 million.

Interest Expense

Interest expense was $72.2 million for the nine months ended September 30, 2024, which increased by $22.5 million, or 45.3%, from $49.7 million in the year-ago period. Due to the high interest rate environment, average rates paid on interest-bearing deposits of 1.82% increased by 63 bps and average interest-bearing deposit balances increased by $52.8 million from the year-ago period, resulting in increases in interest expense of approximately $22.3 million and $0.8 million, respectively.

Net Interest Margin

Our net interest margin of 2.95% for the nine months ended September 30, 2024 decreased by 3 bps from 2.98% in the year-ago period. As previously discussed, the decrease in net interest margin for the nine months ended September 30, 2024 compared to the year-ago period was primarily attributable to the aforementioned increases in average rates paid on interest-bearing deposits and long-term debt, which outpaced the increases in average yields earned on interest-earning assets.

Rate-Volume Analysis

For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to: (i) changes in average balances (volume) and (ii) changes in weighted average interest rates (rate). The change in volume is calculated as change in average balance, multiplied by prior period average yield/rate. The change in rate is calculated as change in average yield/rate, multiplied by current period volume. The change in interest income not solely due to change in volume or change in rate has been allocated proportionately to change in volume and change in average yield/rate.

55

Three Months Ended September 30, 2024
Compared To September 30, 2023
Nine Months Ended September 30, 2024
Compared To September 30, 2023
Increase (Decrease) Due to: Increase (Decrease) Due to:
(dollars in thousands) Volume Rate Net Change Volume Rate Net Change
Interest earning assets:
Interest-bearing deposits in other financial institutions $ 343  $ 20  $ 363  $ 4,676  $ 347  $ 5,023 
Investment securities:
Taxable (1) (71) 2,030  1,959  (680) 3,835  3,155 
Tax-exempt (1) (2) (52) (148) (200) (175) (359) (534)
Total investment securities (123) 1,882  1,759  (855) 3,476  2,621 
Loans, including loans held for sale (1,993) 5,300  3,307  (5,040) 16,864  11,824 
FHLB stock (41) 55  14  (152) 167  15 
Total interest earning assets (1,814) 7,257  5,443  (1,371) 20,854  19,483 
Interest-bearing liabilities:
Interest-bearing demand deposits (18) 42  24  (77) 316  239 
Savings and money market deposits 258  3,513  3,771  389  12,746  13,135 
Time deposits up to $250,000 497  1,104  1,601  2,116  5,465  7,581 
Time deposits over $250,000 (2,036) 207  (1,829) (1,632) 3,790  2,158 
Total interest-bearing deposits (1,299) 4,866  3,567  796  22,317  23,113 
FHLB advances and other short-term borrowings —  —  —  (1,138) —  (1,138)
Long-term debt (1) (4) (5) 424  95  519 
Total interest-bearing liabilities (1,300) 4,862  3,562  82  22,412  22,494 
Net interest income $ (514) $ 2,395  $ 1,881  $ (1,453) $ (1,558) $ (3,011)
(1)  At amortized cost.
(2) Includes taxable-equivalent adjustment using a federal statutory tax rate of 21%.

Other Operating Income

The following tables present components of other operating income for the periods presented:

  Three Months Ended September 30,
(dollars in thousands) 2024 2023 $ Change % Change
Other operating income:
Mortgage banking income $ 822  $ 765  $ 57  7.5  %
Service charges on deposit accounts 2,167  2,193  (26) -1.2 
Other service charges and fees 5,947  5,203  744  14.3 
Income from fiduciary activities 1,447  1,234  213  17.3 
Income from bank-owned life insurance 1,897  379  1,518  400.5 
Net loss on sales of investment securities —  (135) 135  -100.0 
Other:  
Equity in earnings of unconsolidated entities 13  (6) -46.2 
Income recovered on previously charged-off loans 52  48  8.3 
Other recoveries 19  34  (15) -44.1 
Unrealized gains on loans held for sale 17  13  325.0 
Commissions on sale of checks 74  77  (3) -3.9 
Other 285  232  53  22.8 
Total other operating income $ 12,734  $ 10,047  $ 2,687  26.7 

56

For the third quarter of 2024, total other operating income was $12.7 million, which increased by $2.7 million, or 26.7%, from $10.0 million in the year-ago quarter. The increase was primarily due to higher income from bank-owned life insurance ("BOLI") of $1.5 million, other service charges and fees of $0.7 million, and income from fiduciary activities of $0.2 million. The higher income from BOLI was primarily attributable to volatile equity market returns and their impact on corporate-owned life insurance policies used to hedge deferred compensation expense.

  Nine Months Ended September 30,
(dollars in thousands) 2024 2023 $ Change % Change
Other operating income:
Mortgage banking income $ 2,475  $ 1,981  $ 494  24.9  %
Service charges on deposit accounts 6,405  6,441  (36) -0.6 
Other service charges and fees 17,077  15,182  1,895  12.5 
Income from fiduciary activities 4,331  3,623  708  19.5 
Income from bank-owned life insurance 4,653  2,855  1,798  63.0 
Net loss on sales of investment securities —  (135) 135  -100.0 
Other:
Equity in earnings of unconsolidated entities (24) (12) (12) 100.0 
Income recovered on previously charged-off loans 147  385  (238) -61.8 
Other recoveries 63  156  (93) -59.6 
Unrealized gains on loans held for sale —  (3) -100.0 
Commissions on sale of checks 221  237  (16) -6.8 
Other 751  775  (24) -3.1 
Total other operating income $ 36,099  $ 31,491  $ 4,608  14.6 

For the nine months ended September 30, 2024, total other operating income was $36.1 million, which increased by $4.6 million, or 14.6%, from $31.5 million in the year-ago period. The increase from the same year-ago period was primarily due to higher other service charges and fees of $1.9 million, income from BOLI of $1.8 million, income from fiduciary activities of $0.7 million, and mortgage banking income of $0.5 million. The higher other service charges and fees was attributable to higher investment services fees, ATM and debit card fees and fees on foreign exchange. The higher income from BOLI during the nine months ended September 30, 2024 was primarily attributable to volatile equity market returns.

57

Other Operating Expense

The following tables present components of other operating expense for the periods presented:

Three Months Ended September 30,
(dollars in thousands) 2024 2023 $ Change % Change
Other operating expense:
Salaries and employee benefits $ 22,299  $ 19,015  $ 3,284  17.3  %
Net occupancy 4,612  4,725  (113) -2.4 
Computer software 4,590  4,473  117  2.6 
Legal and professional services 2,460  2,359  101  4.3 
Equipment 972  1,112  (140) -12.6 
Advertising 889  968  (79) -8.2 
Communication 740  809  (69) -8.5 
Other:
SERP expense 107  95  12  12.6 
Charitable contributions 182  103  79  76.7 
FDIC insurance assessment 871  1,019  (148) -14.5 
Miscellaneous loan expenses 283  354  (71) -20.1 
ATM and debit card expenses 910  874  36  4.1 
Armored car expenses 432  569  (137) -24.1 
Entertainment and promotions 534  450  84  18.7 
Stationery and supplies 170  204  (34) -16.7 
Directors’ fees and expenses 281  308  (27) -8.8 
Directors' deferred compensation plan expense 1,196  113  1,083  958.4 
Strategic expenses 3,068  —  3,068  N.M.
Loss (gain) on disposal of fixed assets 38  (4) 42  -1,050.0 
Loss on sale of loans —  197  (197) -100.0 
Other 2,053  1,868  185  9.9 
Total other operating expense $ 46,687  $ 39,611  $ 7,076  17.9 
Not meaningful ("N.M.")

For the third quarter of 2024, total other operating expense was $46.7 million, which increased by $7.1 million, or 17.9%, from $39.6 million in the year-ago quarter. The increase was primarily due to higher salaries and employee benefits of $3.3 million, $3.1 million in expenses related to our evaluation and assessment of a strategic opportunity, and directors' deferred compensation plan expense of $1.1 million. The higher salaries and employee benefits and directors' deferred compensation plan expense were partially attributable to volatile equity market returns and are consistent with the increase in income from BOLI which is used to hedge the deferred compensation expenses.

58

Nine Months Ended September 30,
(dollars in thousands) 2024 2023 $ Change % Change
Other operating expense:
Salaries and employee benefits $ 64,280  $ 61,886  $ 2,394  3.9  %
Net occupancy 13,809  13,509  300  2.2 
Computer software 13,258  13,700  (442) -3.2 
Legal and professional services 7,286  7,714  (428) -5.5 
Equipment 2,977  2,990  (13) -0.4 
Advertising 2,704  2,843  (139) -4.9 
Communication 2,234  2,378  (144) -6.1 
Other:
SERP expense 323  285  38  13.3 
Charitable contributions 510  394  116  29.4 
FDIC insurance assessment 2,752  3,126  (374) -12.0 
Miscellaneous loan expenses 992  946  46  4.9 
ATM and debit card expenses 2,681  2,520  161  6.4 
Armored car expenses 1,373  1,278  95  7.4 
Entertainment and promotions 1,368  1,321  47  3.6 
Stationery and supplies 552  641  (89) -13.9 
Directors’ fees and expenses 882  978  (96) -9.8 
Directors' deferred compensation plan expense 1,538  (279) 1,817  -651.3 
Strategic expenses 3,068  —  3,068  N.M.
Loss (gain) on disposal of fixed assets 54  (2) 56  -2,800.0 
Loss on sale of loans —  197  (197) -100.0 
Other 5,773  5,196  577  11.1 
Total other operating expense $ 128,414  $ 121,621  $ 6,793  5.6 
Not meaningful ("N.M.")

For the nine months ended September 30, 2024, total other operating expense was $128.4 million and increased by $6.8 million, or 5.6%, from $121.6 million in the same year-ago period. The increase was primarily due to the aforementioned $3.1 million in expenses related to a strategic opportunity, higher salaries and employee benefits of $2.4 million, and higher directors' deferred compensation plan expense of $1.8 million compared to the same year-ago period. The higher salaries and employee benefits and directors' deferred compensation plan expense were partially attributable to volatile equity market returns and are consistent with the increase in income from BOLI which is used to hedge the deferred compensation expenses. These increases were partially offset by lower computer software expense of $0.4 million, legal and professional services of $0.4 million, and FDIC insurance assessment of $0.4 million.

Income Taxes

The Company recorded income tax expense of $3.8 million for the third quarter of 2024, compared to $4.3 million in the same year-ago period. The effective tax rate ("ETR") for the third quarter of 2024 was 22.03%, compared to 24.87% in the same year-ago period.

The Company recorded income tax expense of $12.6 million for the nine months ended September 30, 2024, compared to $13.9 million in the same year-ago period. The effective tax rate for the nine months ended September 30, 2024 was 23.00%, compared to 24.06% in the same year-ago period.

The decrease in income tax expense and the effective tax rate for the three and nine months ended September 30, 2024 was primarily attributable to higher tax-exempt BOLI income, additional low-income housing tax credits recognized, and lower pre-tax income compared to the same year-ago periods.

59

The Company's net deferred tax assets ("DTA"), net of valuation allowance, totaled $22.5 million and $29.5 million at September 30, 2024 and December 31, 2023, respectively, and was included in other assets on our consolidated balance sheets. The decrease in DTA was primarily due to projected utilization of net operating loss carryforwards, which arose in 2022 due to unrealized losses on investment securities.

The valuation allowance on our net deferred tax assets ("DTA") at September 30, 2024 and December 31, 2023 totaled $4.4 million, which related entirely to our DTA from net apportioned net operating loss ("NOL") carryforwards for California state income tax purposes, as the Company does not expect to generate sufficient income in California to utilize the DTA.

Financial Condition

Total assets were $7.42 billion at September 30, 2024 and decreased by $227.4 million, or 3.0%, from $7.64 billion at December 31, 2023, as loans, net of deferred costs, decreased by $96.4 million and excess liquidity was used to pay off high-cost government time deposits that matured during the nine months ended September 30, 2024.

Investment Securities

Investment securities totaled $1.33 billion at September 30, 2024, which increased by $50.0 million, or 3.9%, from $1.28 billion at December 31, 2023. The increase in the investment securities portfolio reflected purchases of $95.5 million and an increase in the market valuation on the AFS portfolio of $25.9 million, partially offset by principal runoff of $71.4 million.


60

Loans

The following table presents outstanding loans by category and geographic location as of the dates presented:

(dollars in thousands) September 30,
2024
December 31,
2023
$ Change % Change
Hawaii:        
Commercial and industrial $ 411,209  $ 421,736  $ (10,527) (2.5) %
Real estate:
Construction 134,043  163,337  (29,294) (17.9)
Residential mortgage 1,897,919  1,927,789  (29,870) (1.5)
Home equity 697,123  736,524  (39,401) (5.3)
Commercial mortgage 1,157,625  1,063,969  93,656  8.8 
Consumer 277,849  322,346  (44,497) (13.8)
Total loans 4,575,768  4,635,701  (59,933) (1.3)
Less: ACL (47,789) (48,189) 400  (0.8)
Loans, net of ACL $ 4,527,979  $ 4,587,512  $ (59,533) (1.3)
U.S. Mainland:        
Commercial and industrial $ 188,238  $ 153,971  $ 34,267  22.3 
Real estate:
Construction 24,083  22,182  1,901  8.6 
Commercial mortgage 312,685  318,933  (6,248) (2.0)
Consumer 241,835  308,195  (66,360) (21.5)
Total loans 766,841  803,281  (36,440) (4.5)
Less: ACL (13,858) (15,745) 1,887  (12.0)
Loans, net of ACL $ 752,983  $ 787,536  $ (34,553) (4.4)
Total:        
Commercial and industrial $ 599,447  $ 575,707  $ 23,740  4.1 
Real estate:
Construction 158,126  185,519  (27,393) (14.8)
Residential mortgage 1,897,919  1,927,789  (29,870) (1.5)
Home equity 697,123  736,524  (39,401) (5.3)
Commercial mortgage 1,470,310  1,382,902  87,408  6.3 
Consumer 519,684  630,541  (110,857) (17.6)
Total loans 5,342,609  5,438,982  (96,373) (1.8)
Less: ACL (61,647) (63,934) 2,287  (3.6)
Loans, net of ACL $ 5,280,962  $ 5,375,048  $ (94,086) (1.8)

Loans, net of deferred costs, totaled $5.34 billion at September 30, 2024, which decreased by $96.4 million, or 1.77%, from $5.44 billion at December 31, 2023. The decrease was primarily due to decreases in consumer of $110.9 million, home equity of $39.4 million, residential mortgage of $29.9 million, and construction of $27.4 million. These decreases were partially offset by increases in commercial mortgage of $87.4 million and commercial and industrial of $23.7 million.

The Hawaii loan portfolio decreased by $59.9 million, or 1.3%, from December 31, 2023. The decrease reflected decreases in consumer of $44.5 million, home equity of $39.4 million, construction of $29.3 million, residential mortgage of $29.9 million and commercial and industrial of $10.5 million. These decreases were partially offset by an increase in commercial mortgage of $93.7 million.

The U.S. Mainland loan portfolio decreased by $36.4 million, or 4.5%, from December 31, 2023. The decrease was primarily attributable to a decrease in consumer loans of $66.4 million, as the Company continued its strategy to let the US. Mainland consumer loan portfolio to runoff with minimal purchases year-to-date. The decrease was partially offset by an increase in commercial and industrial loans of $34.3 million.

61

Nonperforming Assets and Accruing Loans 90+ Days Past Due

The following table presents nonperforming assets and accruing loans 90+ days past due as of the dates presented:

(dollars in thousands) September 30,
2024
December 31,
2023
$ Change % Change
Nonperforming Assets ("NPAs")    
Nonaccrual loans:    
Commercial and industrial $ 376  $ 432  $ (56) (13.0) %
Real estate:
Residential mortgage 9,680  4,962  4,718  95.1 
Home equity 915  834  81  9.7 
Commercial mortgage —  77  (77) (100.0)
Consumer 626  703  (77) (11.0)
Total nonaccrual loans 11,597  7,008  4,589  65.5 
Other real estate owned ("OREO") —  —  —  N.M.
Total NPAs 11,597  7,008  4,589  65.5 
Accruing Loans 90+ Days Past Due
Real estate:
Residential mortgage 13  —  13  N.M.
Home equity 135  229  (94) (41.0)
Consumer 481  1,083  (602) (55.6)
Total accruing loans 90+ days past due 629  1,312  (683) (52.1)
Total NPAs and accruing loans 90+ days past due $ 12,226  $ 8,320  $ 3,906  46.9 
Ratio of nonaccrual loans to total loans 0.22  % 0.13  % 0.09  %
Ratio of NPAs to total assets 0.16  0.09  0.07 
Ratio of NPAs and accruing loans 90+ days past due to total loans and OREO 0.23  0.15  0.08 
Ratio of classified assets and OREO to tier 1 capital and ACL 2.93  3.41  (0.48)
Not meaningful ("N.M.")

The following table presents year-to-date activities in nonperforming assets for the period presented:

(dollars in thousands)
Balance at December 31, 2023 $ 7,008 
Additions 10,196 
Reductions:  
Payments (1,228)
Return to accrual status (579)
Charge-offs, valuation and other adjustments (3,800)
Total reductions (5,607)
Net increase 4,589 
Balance at September 30, 2024 $ 11,597 

Nonperforming assets totaled $11.6 million, or 0.16% of total assets at September 30, 2024, compared to $7.0 million, or 0.09% of total assets at December 31, 2023. The increase in nonperforming assets from December 31, 2023 was primarily attributable to additions to nonaccrual loans totaling $10.2 million, partially offset by $1.2 million in repayments of nonaccrual loans, $0.6 million in loans returned to accrual status and $3.8 million in net charge-offs, valuation and other adjustments.
62

The majority of the nonaccrual loans are in the residential mortgage category which are well-collateralized with strong loan-to-value ratios.

Criticized loans at September 30, 2024 declined by $17.1 million from December 31, 2023 to $33.0 million, or 0.6% of the total loan portfolio. Special mention loans declined by $14.1 million to $10.7 million, or 0.2% of the total loan portfolio. Classified loans declined by $3.0 million to $22.3 million, or 0.4% of the total loan portfolio.

The Company's ratio of classified assets and other real estate owned to tier 1 capital and the ACL was 2.93% at September 30, 2024, which decreased from 3.41% at December 31, 2023.

Allowance for Credit Losses

The following table presents certain information with respect to the ACL as of the dates and for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2024 2023 2024 2023
Allowance for Credit Losses:
Balance at beginning of period $ 62,225  $ 63,849  $ 63,934  $ 63,738 
Provision (credit) for credit losses on loans 3,040  4,526  9,609  10,276 
Charge-offs:
Commercial and industrial (663) (402) (1,864) (1,543)
Real estate:
Residential mortgage (99) —  (383) — 
Consumer (3,956) (4,710) (13,139) (11,269)
Total charge-offs (4,718) (5,112) (15,386) (12,812)
Recoveries:
Commercial and industrial 158  261  378  636 
Real estate:
Construction —  — 
Residential mortgage 10  25  70 
Home equity —  —  15 
Consumer 934  982  3,081  2,593 
Total recoveries 1,100  1,254  3,490  3,315 
Net charge-offs (3,618) (3,858) (11,896) (9,497)
Balance at end of period $ 61,647  $ 64,517  $ 61,647  $ 64,517 
Average loans, net of deferred fees and costs $ 5,330,810  $ 5,507,248  $ 5,372,247  $ 5,525,476 
Ratio of annualized net charge-offs to average loans 0.27  % 0.28  % 0.30  % 0.23  %
Ratio of ACL to total loans 1.15  % 1.17  % 1.15  % 1.17  %
Ratio of ACL to nonaccrual loans 532  % 970  % 532  % 970  %

Our ACL totaled $61.6 million at September 30, 2024, compared to $63.9 million at December 31, 2023 and $64.5 million at September 30, 2023.

During the third quarter of 2024, we recorded a provision for credit losses on loans of $3.0 million and net charge-offs of $3.6 million. During the nine months ended September 30, 2024, we recorded a provision for credit losses on loans of $9.6 million and net charge-offs of $11.9 million.

63

The decrease in the provision for credit losses on loans during the three and nine months ended September 30, 2024, compared to the same year-ago periods, was primarily due to a decrease in loan balances outstanding and improvements in the Hawaii economic forecast assumptions used in the Company's estimate of the ACL in the three and nine months ended September 30, 2024.

Our ratio of ACL to total loans was 1.15% at September 30, 2024, compared to 1.18% at December 31, 2023 and 1.17% at September 30, 2023.

In accordance with GAAP, loans held for sale and other real estate assets are not included in our assessment of the ACL.

Deposits

The following table presents the composition of our deposits by category as of the dates presented:

(dollars in thousands) September 30,
2024
December 31,
2023
$ Change % Change
Noninterest-bearing demand deposits $ 1,838,009  $ 1,913,379  $ (75,370) (3.9) %
Interest-bearing demand deposits 1,255,382  1,329,189  (73,807) (5.6)
Savings and money market deposits 2,336,323  2,209,733  126,590  5.7 
Time deposits up to $250,000 536,316  533,898  2,418  0.5 
Core deposits 5,966,030  5,986,199  (20,169) (0.3)
Other time deposits greater than $250,000 492,221  486,812  5,409  1.1 
Government time deposits 124,762  374,581  (249,819) (66.7)
Total time deposits greater than $250,000 616,983  861,393  (244,410) (28.4)
Total deposits $ 6,583,013  $ 6,847,592  $ (264,579) (3.9)

The Company's deposit portfolio is diversified and long-tenured as it is built upon a business model based on long-term customer relationships. Approximately 52% of deposit customers have been banking with us for more than 10 years.

Our total deposits of $6.58 billion at September 30, 2024 decreased by $264.6 million, or 3.9%, from total deposits of $6.85 billion at December 31, 2023. The decreases in government time deposits of $249.8 million, noninterest-bearing demand deposits of $75.4 million, and interest-bearing demand deposits of $73.8 million were partially offset by increases in savings and money market deposits of $126.6 million, other time deposits greater than $250,000 of $5.4 million, and time deposits up to $250,000 of $2.4 million. Due to the high interest rate environment, we continued to see a shift in the composition of the deposit portfolio from demand deposits to savings and money market and time deposits. The decline in government time deposits was largely due to planned runoff of high-cost government time deposits that matured during the nine months ended September 30, 2024.

Our core deposits, which we define as demand deposits, savings and money market deposits, and time deposits up to $250,000, totaled $5.97 billion at September 30, 2024 and decreased by $20.2 million, from $5.99 billion at December 31, 2023. Core deposits as a percentage of total deposits was 90.6% at September 30, 2024, compared to 87.4% at December 31, 2023. Our average cost of total deposits was 132 bps during the nine months ended September 30, 2024, compared to 84 bps during the same year-ago period.

The Company had estimated uninsured deposits of $2.74 billion, or 42% of total deposits as of September 30, 2024, compared to an estimated $2.91 billion, or 42% of total deposits as of December 31, 2023. The Company had fully collateralized deposits of approximately $305.8 million and $536.3 million as of September 30, 2024 and December 31, 2023, respectively. The Company's estimated uninsured deposits, excluding fully collateralized deposits, totaled $2.44 billion, or 37% of total deposits as of September 30, 2024, compared to the estimated $2.37 billion, or 35% of total deposits as of December 31, 2023.

64

The following table presents the amount of time deposits in excess of the FDIC insurance limit of $250,000 by remaining maturity as of September 30, 2024:

(dollars in thousands) September 30, 2024
Remaining maturity:
Three months or less $ 333,726 
Over three through twelve months 271,845 
Over one year through three years 10,912 
Over three years 500 
Total $ 616,983 

Capital Resources

In order to ensure adequate levels of capital, we perform ongoing assessment of projected sources and uses of capital in conjunction with an analysis of the size and quality of our assets, the anticipated performance of our business, changes in monetary and fiscal policies, and the level of risk and regulatory capital requirements. As a part of this assessment, the Board of Directors reviews our capital position on an ongoing basis to ensure it is adequate, including, but not limited to, the need for raising additional capital or the ability to return capital to our shareholders, including the ability to declare cash dividends or repurchase our securities.

Common Equity

Our total shareholders' equity was $543.7 million at September 30, 2024, compared to $503.8 million at December 31, 2023. The change in total shareholders' equity was primarily attributable to net income of $42.1 million, partially offset by cash dividends declared of $21.1 million, the repurchase of $0.9 million in shares of our common stock under our stock repurchase programs, and other comprehensive income of $18.1 million in the nine months ended September 30, 2024.

Our total shareholders' equity to total assets ratio was 7.33% at September 30, 2024, compared to 6.59% at December 31, 2023. Our book value per share was $20.09 and $18.63 at September 30, 2024 and December 31, 2023, respectively.

Holding Company Capital Resources

CPF is required to act as a source of strength to the Bank under the Dodd-Frank Act. CPF is obligated to pay its expenses and payments on its junior subordinated debentures which fund payments on the outstanding trust preferred securities and subordinated notes.

CPF relies on the Bank to pay dividends to fund its obligations. In order to meet its ongoing obligations, on a stand-alone basis, CPF had an available cash balance of $23.1 million and $22.1 million as of September 30, 2024 and December 31, 2023, respectively.

As a Hawaii state-chartered bank, the Bank may only pay dividends to the extent it has retained earnings as defined under Hawaii banking law ("Statutory Retained Earnings"), which differs from GAAP retained earnings. The Bank had Statutory Retained Earnings of $190.4 million and $169.1 million as of September 30, 2024 and December 31, 2023, respectively.

Dividends are payable at the discretion of the Board of Directors and there can be no assurance that the Board of Directors will allow the Company to continue to pay dividends at the same rate, or at all, in the future. Our ability to pay cash dividends to our shareholders is subject to restrictions under federal and Hawaii law, including restrictions imposed by the FRB and covenants set forth in various agreements we are a party to, including covenants set forth in our subordinated debentures and subordinated notes.

Share Repurchases

In January 2024, the Company’s Board of Directors approved a new authorization to repurchase up to $20.0 million of its common stock from time to time in the open market or in privately negotiated transactions (the "2024 Repurchase Plan"), pursuant to a newly authorized share repurchase plan. The 2024 Repurchase Plan replaces and supersedes in its entirety the 2023 Repurchase Plan.

65

During the nine months ended September 30, 2024, the Company repurchased 49,960 shares of common stock, at an aggregate cost of $0.9 million under the Company's share repurchase program. As of September 30, 2024, $19.1 million remained available for repurchase under the Company's 2024 Repurchase Plan.

Trust Preferred Securities

As of September 30, 2024, the Company has two statutory trusts, CPB Capital Trust IV ("Trust IV") and CPB Statutory Trust V ("Trust V"), which issued a total of $50.0 million in floating rate trust preferred securities. The trust preferred securities, the underlying floating rate junior subordinated debentures that are the assets of Trusts IV and V, and the common securities issued by Trusts IV and V are redeemable in whole or in part on any interest payment date on or after December 15, 2009 for Trust IV and V, or at any time in whole but not in part within 90 days following the occurrence of certain events.

On July 3, 2023, after the cessation of the LIBOR benchmark rate on June 30, 2023, the Company amended its Trust IV and Trust V debt agreements to replace the LIBOR-based reference rate with an adjusted CME Term Secured Overnight Financing Rate ("SOFR") plus a tenor spread adjustment. Accounting Standards Codification ("ASC") 848 allows us to account for the modification as a continuation of the existing contract without additional analysis. The $30.0 million in floating rate trust preferred securities of Trust IV bear an interest rate of three-month CME Term SOFR plus a tenor spread adjustment of 0.26% plus 2.45% and the $20.0 million in floating rate trust preferred securities of Trust V bear an interest rate of three-month CME Term SOFR plus a tenor spread adjustment of 0.26% plus 1.87%.

Our obligations with respect to the issuance of the trust preferred securities constitute a full and unconditional guarantee by the Company of each trust's obligations with respect to its trust preferred securities. Subject to certain exceptions and limitations, we may elect from time to time to defer subordinated debenture interest payments, which would result in a deferral of dividend payments on the related trust preferred securities, for up to 20 consecutive quarterly periods without default or penalty.

The Company determined that its investments in Trust IV and Trust V did not represent a variable interest and therefore the Company was not the primary beneficiary of each of the trusts. As a result, consolidation of the trusts by the Company were not required.

Subordinated Notes

On October 20, 2020, the Company completed a $55.0 million private placement of ten-year fixed-to-floating rate subordinated notes, which was used to support regulatory capital ratios and for general corporate purposes. The Company exchanged the privately placed notes for registered notes with the same terms and in the same aggregate principal amount at the end of the fourth quarter of 2020. The notes bear a fixed interest rate of 4.75% for the first five years through November 1, 2025 and will reset quarterly thereafter for the remaining five years to the then current three-month SOFR, as published by the Federal Reserve Bank of New York, plus 4.56%. The subordinated notes had a carrying value of $54.7 million at September 30, 2024, which was net of unamortized debt issuance costs of $0.3 million that is being amortized over the expected life.

Regulatory Capital Ratios

The Company and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

Federal banking agencies previously issued an interim final rule that delayed the estimated impact on regulatory capital resulting from the adoption of CECL. The interim final rule provided banking organizations that implement CECL before the end of 2020 the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of capital benefit provided during the initial two-year delay. The federal banking agencies subsequently issued a final rule that made certain technical changes to the interim final rule. The changes in the final rule apply only to those banking organizations that elected the CECL transition relief provided under the rule. The Company elected this option and the transition period ends for the Company on December 31, 2024.

General capital adequacy regulations adopted by the FRB and FDIC require an institution to maintain minimum leverage capital, tier 1 risk-based capital, total risk-based capital, and common equity tier 1 ("CET1") capital ratios. In addition to these uniform risk-based capital guidelines and leverage ratios that apply across the industry, the regulators have the discretion to set individual minimum capital requirements for specific institutions at rates significantly above the minimum guidelines and ratios.
66

For a further discussion of capital requirements for the Company and the Bank and the effect of forthcoming changes in required regulatory capital ratios, see the discussion in the "Business — Supervision and Regulation" sections of our 2023 Form 10-K.

The following table presents the regulatory capital ratios for the Company and the Bank, as well as the minimum capital adequacy requirements applicable to all financial institutions, as of the dates presented. The leverage capital, tier 1 risk-based capital, total risk-based capital, and CET1 risk-based capital ratios for the Company and the Bank as of September 30, 2024 and December 31, 2023, were above the levels required for a "well capitalized" regulatory designation.

  Actual Minimum Required
for Capital Adequacy
Purposes
Minimum Required
to be
Well Capitalized
(dollars in thousands) Amount Ratio Amount
Ratio [1]
Amount Ratio
Central Pacific Financial Corp.            
September 30, 2024            
Leverage capital $ 698,312  9.5  % $ 295,022  4.0  % N/A N/A
CET1 risk-based capital 648,312  12.1  240,780  4.5  N/A N/A
Tier 1 risk-based capital 698,312  13.1  321,040  6.0  N/A N/A
Total risk-based capital 818,063  15.3  428,054  8.0  N/A N/A
December 31, 2023            
Leverage capital $ 676,536  8.8  % $ 305,843  4.0  % N/A N/A
CET1 risk-based capital 626,536  11.4  246,457  4.5  N/A N/A
Tier 1 risk-based capital 676,536  12.4  328,609  6.0  N/A N/A
Total risk-based capital 799,175  14.6  438,146  8.0  N/A N/A
Central Pacific Bank            
September 30, 2024            
Leverage capital $ 724,934  9.8  % $ 294,454  4.0  % $ 368,068  5.0  %
CET1 risk-based capital 724,934  13.6  240,211  4.5  346,972  6.5 
Tier 1 risk-based capital 724,934  13.6  320,281  6.0  427,042  8.0 
Total risk-based capital 789,685  14.8  427,042  8.0  533,802  10.0 
December 31, 2023            
Leverage capital $ 704,512  9.2  % $ 305,375  4.0  % $ 381,719  5.0  %
CET1 risk-based capital 704,512  12.9  245,926  4.5  355,227  6.5 
Tier 1 risk-based capital 704,512  12.9  327,902  6.0  437,203  8.0 
Total risk-based capital 772,151  14.1  437,203  8.0  546,503  10.0 

[1] Under the Basel III Capital Rules, the Company and the Bank must also maintain a 2.5% Capital Conservation Buffer ("CCB") to avoid becoming subject to restrictions on capital distributions and certain discretionary bonus payments to management. The CCB is calculated as a ratio of CET1 capital to risk-weighted assets, and effectively increases the required minimum risk-based capital ratios.

Market Risk

Market risk is the risk of loss in a financial instrument arising from adverse changes in market rates/prices such as interest rates, foreign currency rates, commodity prices and equity prices. Our primary market risk exposure is interest rate risk that occurs when rate-sensitive assets and rate-sensitive liabilities mature or reprice during different periods or in differing amounts.
67


Asset/Liability Management and Interest Rate Risk

The Company is subject to interest rate risk in the normal course of business through the activities of making loans and taking deposits, as well as from our investment securities portfolio and other interest-bearing funding sources. Our earnings and capital are sensitive to risk of interest rate fluctuations. Asset/liability management attempts to coordinate our rate-sensitive assets and rate-sensitive liabilities to meet our financial objectives. Potentially adverse interest rate risk exposures are managed through the shortening or lengthening of the duration of assets and liabilities.

The Asset/Liability Management Committee ("ALCO") manages interest rate risk utilizing a detailed and dynamic simulation model to analyze earnings and capital in various interest rate scenarios and balance sheet forecasts. Earnings are typically measured by estimated changes in net interest income ("NII") under different rate scenarios. Capital impact is measured through an Economic Value of Equity ("EVE") analysis which monitors the impact of the durations of rate sensitive assets and liabilities. The EVE analysis simulates the cash flows for all on- and off- balance sheet instruments under different rate scenarios which are then discounted to determine a present value for each scenario. The net present value of our assets and liabilities represents the EVE for each scenario. The EVE results for each scenario are then compared to the base scenario to determine the Company’s sensitivities to longer term rate exposures. The results of the analyses are shared with the Board of Directors and informs strategic actions to mitigate and optimize our risk position and profitability.

The ALCO simulation model used to measure and manage interest rate risk exposures includes both dynamic and static balance sheet and rate scenarios. The dynamic model scenarios provide an enhanced view that enables management and the Board of Directors to have a realistic view of the expected impact to earnings and capital from forecasted non-parallel movements in interest rates as well as balance sheet changes. On the other hand, static rate scenarios are a measurement of embedded interest rate risk in the balance sheet as of a point in time and incorporate various hypothetical interest rate scenarios that may include gradual or immediate parallel rate changes. The static scenarios have the benefit of comparability against prior periods and other financial institutions. Both dynamic and static model simulations include the use of a number of key modeling assumptions including prepayment speeds, pricing spreads of assets and liabilities, deposit decay rates and the timing and magnitude of deposit rate changes in relation to changes in the overall level of interest rates. The assumptions are typically based on analyses of institution specific actual historical data and trends. Market information is also incorporated where relevant and appropriate. Assumptions are periodically reviewed and updated by ALCO. During periods of increased market volatility, assumptions will be reviewed more frequently. While management believes the assumptions are reasonable, actual behaviors and results may likely differ.

The following table reflects our static net interest income sensitivity analysis as of the dates presented. The simulations estimate net interest income assuming no balance sheet growth under a flat interest rate scenario. The net interest income sensitivity is measured as the change in net interest income in alternate interest rate scenarios as a percentage of the flat rate scenario. The alternate rate scenarios assume rates move up or down 100 bps, 200 bps or 300 bps in either a gradual (defined as the stated change over a 12-month period in equal increments) or an instantaneous, parallel fashion.

Our Asset/Liability Management Policy seeks to maximize the risk-adjusted return to shareholders while maintaining consistently acceptable levels of liquidity, interest rate risk and capitalization. The ALCO Policy requires that simulated changes in NII should be within certain specified ranges, or steps must be taken to reduce interest rate risk. The net interest income sensitivity table shows that the Company’s balance sheet is relatively well-matched against movements in interest rates and within our ALCO Policy risk limits that have been approved by the Board of Directors.

September 30, 2024 December 31, 2023
Estimated Net Interest Income Sensitivity Estimated Net Interest Income Sensitivity
Rate Change Gradual Instantaneous Gradual Instantaneous
+300 bps 2.20  % 1.97  % 1.69  % 2.51  %
+200 bps 1.38  % 1.40  % 1.00  % 1.61  %
+100bps 0.59  % 0.74  % 0.39  % 0.68  %
-100bps (1.31) % (2.00) % (1.26) % (1.73) %
-200 bps (2.78) % (4.19) % (2.53) % (3.59) %
-300 bps (4.31) % (6.85) % (3.86) % (5.65) %

68

Liquidity and Borrowing Arrangements

Our objective in managing liquidity is to maintain a balance between sources and uses of funds in order to economically meet the cash requirements of customers for loans and deposit withdrawals and participate in lending and investment opportunities as they arise. We monitor our liquidity position in relation to changes in loan and deposit balances on a daily basis to ensure maximum utilization, maintenance of an adequate level of readily marketable assets and access to short-term funding sources.

The high profile regional bank failures in the first half of 2023 drove several precautionary actions to ensure adequate liquidity including carrying higher levels of on-balance sheet liquidity, limited portfolio reinvestments, and efficient allocation of collateral to maximize funding sources. The higher level of on-balance sheet liquidity was carried through the remainder of 2023 and is seen in the financial results. Additionally, the Company performs regular liquidity stress testing under a variety of scenarios to ensure that liquidity is adequate under certain potential liquidity stress events. Further, forecasts of Company cash flows are updated and analyzed periodically and more frequently during periods of elevated liquidity risk.

Core deposits have historically provided us with a sizable source of relatively stable and low cost funds, but are subject to competitive pressure in our market. A significant portion of our deposits are granular, long-tenured, and relationship-based. In addition to core deposit funding, we also have access to a variety of other short-term and long-term funding sources, which include proceeds from maturities of our loans and investment securities, as well as secondary funding sources available to meet our liquidity needs, such as the Federal Home Loan Bank of Des Moines (the "FHLB"), secured repurchase agreements and the Federal Reserve discount window.

As of September 30, 2024, the Company had $326.6 million in cash on its balance sheet and approximately $2.55 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was 118%. Refer to Note 8 - Short-Term Borrowings and Long-Term Debt in the accompanying notes to the consolidated financial statements in this report for information on the Company's borrowing arrangements.

Information regarding our material contractual obligations is provided in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes in our cash requirements from known contractual and other obligations since December 31, 2023.

69

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures regarding market risks, refer to "Market Risk" and "Asset/Liability Management and Interest Rate Risk" of Part I, Item 2, "Management’s Discussion and Analysis of Financial Condition and Results of Operations."

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report and pursuant to Rule 13a-15 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), the Company's management, including the principal executive officer and principal financial officer, conducted an evaluation of the effectiveness and design of the Company's disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon that evaluation, the Company's principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the period covered by this report, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
70

PART II.   OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in legal proceedings that arise in the ordinary course of our business. The outcome of these matters and the timing of ultimate resolution is inherently difficult to predict. Based on information currently available to us, we do not expect that the ultimate costs to resolve these matters will have a material adverse effect on our financial condition or operations.

Item 1A. Risk Factors

There have been no material changes from the Risk Factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 21, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On January 24, 2024, the Company's Board of Directors approved a new share repurchase authorization of up to $20.0 million of its common stock from time to time in the open market or in privately negotiated transactions, pursuant to a newly authorized share repurchase plan (the "2024 Repurchase Plan").

During the three months ended September 30, 2024, the Company did not repurchase any shares of common stock under the Company's share repurchase program.

As of September 30, 2024, $19.1 million in share repurchase authorization remained available for repurchase under the Company's 2024 Repurchase Plan. We cannot provide any assurance as to whether or not we will continue to repurchase common stock under our share repurchase program.

  Issuer Purchases of Equity Securities
Period
Total
Number
of Shares
Purchased [1]
Average
Price Paid
per Share
Total Shares
Purchased as
Part of Publicly
Announced
Programs
Maximum Dollar
Value of
Shares That
May Yet Be
Purchased Under
the Program
July 1-31, 2024 —  $ —  —  $ 19,054,953 
August 1-31, 2024 415  25.79  —  19,054,953 
September 1-30, 2024 —  —  —  19,054,953 
Total 415  $ 25.79  —  19,054,953 

[1] During the three months ended September 30, 2024, 415 shares were acquired from employees in connection with income tax withholding obligations related to the vesting of restricted stock and/or performance stock units. These purchases were not included within the Company's publicly announced share repurchase program.

Item 5. Other Information

Rule 10b5-1 Trading Arrangements

During the three months ended September 30, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f)) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (in each case, as defined in item 408 of Regulation S-K) for the purchase or sale of the Company's common stock.

71

Item 6. Exhibits
 
Exhibit No.   Document
   
31.1
31.2
32.1
32.2
101.1
Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language (“Inline XBRL”) *
104
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101.1)
* Filed herewith.
** Furnished herewith.


72

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
  CENTRAL PACIFIC FINANCIAL CORP.
 
   
   
Date: October 30, 2024 /s/ Arnold D. Martines
  Arnold D. Martines
 
Chairman, President and Chief Executive Officer
  (Principal Executive Officer)
/s/ David S. Morimoto
  David S. Morimoto
  Senior Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

73
EX-31.1 2 exhibit311-q32024093024.htm EX-31.1 Document

Exhibit 31.1
 
Rule 13a-14(a) Certification of Chief Executive Officer in
Accordance with Section 302 of the Sarbanes-Oxley Act of 2002
 
I, Arnold D. Martines, President and Chief Executive Officer of Central Pacific Financial Corp. (the “Company”), certify that:
 
(1)I have reviewed this quarterly report on Form 10-Q of the Company;
 
(2)Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

(3)Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report;

(4)The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(e)) for the Company and we have:
 
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and

(d)disclosed in this quarterly report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
 
(5)The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
 
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
 
Date: October 30, 2024 /s/ Arnold D. Martines
  Arnold D. Martines
  Chairman,
President and Chief Executive Officer
(Principal Executive Officer)


EX-31.2 3 exhibit312-q32024093024.htm EX-31.2 Document

Exhibit 31.2
 
Rule 13a-14(a) Certification of Chief Financial Officer in
Accordance with Section 302 of the Sarbanes-Oxley Act of 2002
 
I, David S. Morimoto, Senior Executive Vice President and Chief Financial Officer of Central Pacific Financial Corp. (the “Company”), certify that:
 
(1)I have reviewed this quarterly report on Form 10-Q of the Company;
 
(2)Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

(3)Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report;

(4)The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(e)) for the Company and we have:
 
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and

(d)disclosed in this quarterly report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
 
(5)The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
 
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
 
Date: October 30, 2024 /s/ David S. Morimoto
  David S. Morimoto
  Senior Executive Vice President and Chief Financial Officer
  (Principal Financial and Accounting Officer)


EX-32.1 4 exhibit321-q32024093024.htm EX-32.1 Document

Exhibit 32.1
 
Section 1350 Certification of Chief Executive Officer in
Accordance with Section 906 of the Sarbanes-Oxley Act of 2002
 
In connection with the Quarterly Report of Central Pacific Financial Corp. (the “Company”) on Form 10-Q for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Arnold D. Martines, President and Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
 
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material aspects, the financial condition and results of operations of the Company.
 
Date: October 30, 2024 /s/ Arnold D. Martines
  Arnold D. Martines
  Chairman,
President and Chief Executive Officer
(Principal Executive Officer)
 
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
 
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.


EX-32.2 5 exhibit322-q32024093024.htm EX-32.2 Document

Exhibit 32.2
 
Section 1350 Certification of Chief Financial Officer in
Accordance with Section 906 of the Sarbanes-Oxley Act of 2002
 
In connection with the Quarterly Report of Central Pacific Financial Corp. (the “Company”) on Form 10-Q for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David S. Morimoto, Senior Executive Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
 
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2)The information contained in the Report fairly presents, in all material aspects, the financial condition and results of operations of the Company.
 
Date: October 30, 2024 /s/ David S. Morimoto
  David S. Morimoto
  Senior Executive Vice President and Chief Financial Officer
  (Principal Financial and Accounting Officer)
 
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
 
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.