Business Description

Central Pacific Financial Corp. is a Hawaii corporation and a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the "BHC Act"). CPF was organized on February 1, 1982, and serves as the holding company for its principal subsidiary, Central Pacific Bank. The Bank was incorporated in its present form in the State of Hawaii on March 16, 1982, following a holding company reorganization. Its predecessor entity was originally incorporated in the State of Hawaii on January 15, 1954. CPF reports financial results on a fiscal year ending December 31, and operates as a single reportable segment: banking operations. Throughout this document, "Central Pacific Bank" is referred to as "our Bank" or "the Bank" and "the Company," "we," "us" or "our," refers to Central Pacific Financial Corp. on a consolidated basis. The terms "Central Pacific Financial Corp.," "CPF," or "the holding company", refers to the parent company on a standalone basis. Branch Network Through our Bank and its subsidiaries, we provide full-service commercial banking through 27 bank branches and 55 ATMs located across the State of Hawaii. Our administrative and main offices are located in Honolulu, and we operate 20 branches on the island of Oahu. In addition, we have four branches on Maui, two on Hawaii Island, and one on Kauai. Products and Services Central Pacific Bank offers a full range of deposit and lending products and services to consumer and business customers. These include accepting demand, money market, savings, and time deposits, as well as originating commercial and industrial, construction, commercial real estate, residential mortgage, home equity, and consumer loans. We also offer cash management, digital banking, fiduciary and investment management services. Our Bank's deposits are insured by the Federal Deposit Insurance Corporation ("FDIC") up to applicable limits. The Bank became a member of the Federal Reserve System ("Federal Reserve") in January 2025, making the Federal Reserve Bank ("FRB") its primary federal regulator. Financial Performance Drivers We derive income primarily from interest and fees on loans, interest and dividends on investment securities, and fees related to deposit and other services. Major operating expenses include interest paid on deposits and borrowings, salaries and employee benefits, and general operating costs. Our relationship-based Hawaii retail and small business deposits provide stable, low-cost funding to support balance sheet growth and margin optimization. We seek to diversify funding sources through strategic partnerships with customers in Japan and Korea. Lending Activities Through our Bank, we concentrate our lending activities in five principal areas: (1) Residential Mortgage Lending. Includes fixed-rate and adjustable-rate loans primarily secured by single-family, owner-occupied residences in Hawaii, as well as home equity lines of credit and loans. We typically require loan-to-value ratios of not more than 80%, although higher levels are permitted with mortgage insurance. Changes in interest rates, economic conditions, and other market factors impact collateral values and borrower financial condition, affecting credit risk. A portion of our first mortgage originations are sold in the secondary market, while the remainder is retained in our loan portfolio. (2) Commercial and Industrial Lending. Consists primarily of term loans and lines of credit to small and middle-market businesses and professionals in Hawaii. Operating cash flow from the borrower's business is typically the primary source of repayment, but our underwriting generally requires additional collateral, such as real estate and business assets, and personal guarantees where possible to mitigate risk. (3) Commercial Mortgage Lending. Includes loans secured by commercial real estate, such as multi-family residential properties, industrial facilities, warehouses, offices, retail spaces, healthcare facilities, hotels, and religious dwellings. 3 Table of Contents Underwriting generally requires net cash flow from the property to cover the debt service while maintaining reserves, with liquidation of collateral considered as a secondary source of repayment. (4) Construction Lending. Includes loans for construction, land development, and other land loans for residential and commercial projects. (5) Consumer Lending.…