Central Pacific Bank Reports Strong Q1 Amid Strategic Shifts

HONOLULU, HI – April 29, 2026 – Central Pacific Financial Corp. (NYSE: CPF), the parent company of Central Pacific Bank, announced a robust start to 2026, reporting first-quarter net income of $20.7 million. While this figure represents a sequential dip from the prior quarter, it marks a significant 16% increase from the $17.8 million earned in the same period last year, underscoring the bank's resilient performance and strategic execution in a dynamic economic environment.

The earnings, which translate to $0.78 per diluted share, were propelled by solid balance sheet growth, a healthy net interest margin, and disciplined expense management. The results arrive as the bank also celebrates its 17th recognition as the Hawaii Small Business Administration (SBA) Lender of the Year, reinforcing its foundational role in the local economy.

“We delivered strong net income in the first quarter, marked by balance sheet growth, healthy net interest margin, and disciplined expense management,” said Arnold Martines, Chairman, President and CEO, in the company's press release. “We are proud to be named as Hawaii SBA lender of the year for the 17th time, reflecting our ongoing commitment to supporting small businesses in our community.”

Navigating the Interest Rate Environment

A key indicator of the bank's profitability, its net interest margin (NIM), stood at 3.53% for the first quarter. This reflects a modest 3 basis point decrease from the previous quarter but a substantial 22 basis point improvement from the 3.31% reported in the first quarter of 2025. The slight sequential dip was attributed primarily to lower average yields on loans and a shorter quarter, factors that were partially offset by a decrease in the average rates paid on deposits.

This performance is particularly noteworthy given the broader interest rate climate. Following a series of rate cuts by the Federal Reserve in late 2025, the central bank has since held rates steady through early 2026 amid persistent inflationary pressures. Central Pacific’s ability to expand its margin year-over-year demonstrates effective management of its assets and liabilities. The bank’s NIM of 3.53% remains highly competitive within the regional banking sector, positioning it favorably against local peers like First Hawaiian Inc., which reported a NIM of 3.19% for the same period.

Net interest income, the core revenue stream for the bank, totaled $61.4 million. This was down slightly from $62.1 million in the prior quarter but up a healthy 6.3% from $57.7 million in the first quarter of 2025, highlighting strong year-over-year earning power.

A Foundation of Growth and Quality

Central Pacific Financial's balance sheet showed continued strength and strategic repositioning. Total assets grew by $86.1 million during the quarter to reach $7.50 billion. This growth was funded by a parallel increase in total deposits, which climbed by $89.6 million to $6.70 billion. The bank continues to cultivate a stable, low-cost funding base, with core deposits—comprising checking, savings, and smaller time deposits—making up over 90% of its total deposit portfolio.

On the lending side, the bank is actively optimizing its portfolio for higher returns. While total loans remained relatively stable at $5.32 billion, there has been a deliberate shift in composition. The bank has been reducing its exposure to lower-yielding, long-duration residential mortgages and home equity lines, reallocating capital toward higher-yielding commercial mortgage and construction loans. This strategic pivot is supported by a solid loan pipeline and a resilient Hawaiian economy, which continues to benefit from strong tourism and a low unemployment rate of just 2.3%.

Asset quality, a critical measure of a bank's health, remained exceptionally stable. Nonperforming assets were a negligible 0.19% of total assets, consistent with the previous quarter. The provision for credit losses was $2.4 million, a decrease from the $4.2 million set aside in the same quarter last year, reflecting confidence in the credit quality of the loan book and favorable changes in economic forecasts used in its loss models.

A Commitment to Community and Shareholders

Beyond the financial metrics, Central Pacific Bank reaffirmed its deep-seated commitment to the local community. Being named the top SBA lender in Hawaii for the 17th time is more than an accolade; it is a core part of the bank's identity and business strategy. This sustained focus on empowering small businesses not only fuels local economic activity but also strengthens the bank's brand and customer loyalty across the islands.

This community-focused approach is paired with a strong commitment to delivering shareholder value. The company's board declared a quarterly cash dividend of $0.29 per share, a 3.6% increase from the prior quarter's dividend. This decision reflects management's confidence in the bank's earnings power and capital strength.

Furthermore, the bank continued its share repurchase program, buying back 321,396 shares for $10.5 million during the first quarter. With $44.5 million remaining under its current repurchase authorization, the company has ample capacity to continue returning capital to its investors. These shareholder-friendly actions are supported by a robust capital position, with regulatory ratios such as the Common Equity Tier 1 ratio of 12.6% and the total risk-based capital ratio of 14.7% remaining well above required minimums. This strong capital base provides a solid foundation for continued growth, community investment, and shareholder returns.