cpf-20260630

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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 June 30, 2026

☐ 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 July 31, 2026 was 25,747,432 shares.

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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Form 10-Q

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		Page

Part I.	Financial Information	3

Item 1.	Financial Statements (Unaudited)

	Consolidated Balance Sheets - June 3 0 , 2026 and December 31, 2025	3

	Consolidated Statements of Income - Three and s ix months ended June 3 0 , 2026 and 2025	4

	Consolidated Statements of Comprehensive Income - Three and six months ended June 3 0 , 2026 and 2025	5

	Consolidated Statements of Changes in Equity - Three and six months ended June 3 0 , 2026 and 2025	6

	Consolidated Statements of Cash Flows - Six months ended June 30 , 2026 and 2025	8

	Notes to Consolidated Financial Statements	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	45

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	69

Item 4.	Controls and Procedures	69

Part II.	Other Information	70

Item 1.	Legal Proceedings	70

Item 1A.	Risk Factors	70

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70

Item 5.	Other Information	70

Item 6.	Exhibits	71

Signatures		72

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	As of
(dollars in thousands)	June 30, 2026		December 31, 2025
Assets
Cash and due from financial institutions	$	96,678	$	88,200
Interest-bearing deposits in other financial institutions	286,593		290,453
Investment securities:
Debt securities available-for-sale, at fair value	835,378		748,212
Debt securities held-to-maturity, at amortized cost; fair value of: $474,928 as of June 30, 2026 and $495,845 as of December 31, 2025	545,215		562,391

Total investment securities	1,380,593		1,310,603
Loans held for sale	2,364		1,084
Loans	5,308,322		5,289,096
Allowance for credit losses	(60,581)		(59,621)
Loans, net of allowance for credit losses	5,247,741		5,229,475
Premises and equipment, net	100,231		100,620
Accrued interest receivable	23,419		23,559
Investment in unconsolidated entities	57,738		61,349
Other real estate owned	924		—
Mortgage servicing rights, net	8,364		8,672

Bank-owned life insurance	185,134		180,717
Federal Reserve Bank ("FRB") and Federal Home Loan Bank of Des Moines ("FHLB") stock	24,744		25,836
Right-of-use lease assets	23,311		24,822
Other assets	63,226		63,851
Total assets	$	7,501,060	$	7,409,241
Liabilities and Equity
Deposits:
Noninterest-bearing demand	$	1,917,502	$	1,891,198
Interest-bearing demand	1,407,574		1,388,107
Savings and money market	2,376,831		2,346,522
Time	993,847		983,937
Total deposits	6,695,754		6,609,764

Long-term debt	76,547		76,547
Lease liabilities	24,063		25,549

Accrued interest payable	6,044		7,068
Other liabilities	102,321		97,732
Total liabilities	6,904,729		6,816,660
Contingent liabilities and other commitments (see Note 18)
Equity:

Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding: none as of June 30, 2026 and December 31, 2025	—		—
Common stock, no par value, authorized 185,000,000 shares; issued and outstanding: 25,806,418 as of June 30, 2026 and 26,374,967 as of December 31, 2025	359,364		381,158
Additional paid-in capital	107,534		107,308
Retained earnings	217,789		191,383
Accumulated other comprehensive loss	(88,356)		(87,268)


Total equity	596,331		592,581
Total liabilities and equity	$	7,501,060	$	7,409,241

See accompanying notes to consolidated financial statements.

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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands, except per share data)	2026		2025		2026		2025
Interest and dividend income:
Loans, including fees	$	65,553	$	65,668	$	129,876	$	129,787
Interest and dividends on investment securities:
Taxable investment securities	9,732		9,871		18,942		19,672
Tax-exempt investment securities	684		709		1,366		1,417

Deposits in other financial institutions	2,331		1,484		4,831		3,738
Dividend income on FRB and FHLB stock	389		388		770		712
Total interest income	78,689		78,120		155,785		155,326
Interest expense:
Deposits:
Demand	757		443		1,279		895
Savings and money market	7,554		8,414		15,056		17,276
Time	6,488		7,616		13,153		15,723

Long-term debt	1,056		1,851		2,105		3,937
Total interest expense	15,855		18,324		31,593		37,831
Net interest income	62,834		59,796		124,192		117,495
Provision for credit losses	4,382		4,987		6,735		9,159
Net interest income after provision for credit losses	58,452		54,809		117,457		108,336
Other operating income:
Mortgage banking income	693		744		1,342		1,341
Service charges on deposit accounts	2,250		2,124		4,549		4,271
Other service charges and fees	6,330		5,957		12,119		11,723
Income from fiduciary activities	1,580		1,501		3,003		3,125
Income from bank-owned life insurance	2,999		2,260		3,398		2,757




Other	768		427		1,783		892
Total other operating income	14,620		13,013		26,194		24,109
Other operating expense:
Salaries and employee benefits	25,372		22,696		48,457		44,515
Net occupancy	4,299		4,253		8,621		8,645
Computer software	4,952		5,320		9,997		10,034
Legal and professional services	2,607		2,873		4,991		5,671
Equipment	822		950		1,629		2,032
Advertising	762		832		1,759		1,719
Communication	840		901		1,663		1,934



Other	6,526		6,121		12,729		11,468
Total other operating expense	46,180		43,946		89,846		86,018
Income before income taxes	26,892		23,876		53,805		46,427
Income tax expense	6,070		5,605		12,258		10,396
Net income	$	20,822	$	18,271	$	41,547	$	36,031
Per common share data:
Basic earnings per share	$	0.80	$	0.68	$	1.59	$	1.33
Diluted earnings per share	$	0.80	$	0.67	$	1.58	$	1.33

Basic weighted average shares outstanding	25,999,122		26,988,169		26,137,665		27,037,388
Diluted weighted average shares outstanding	26,109,241		27,069,677		26,261,252		27,139,969

See accompanying notes to consolidated financial statements.

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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2026		2025		2026		2025
Net income	$	20,822	$	18,271	$	41,547	$	36,031
Other comprehensive (loss) income, net of tax:
Net change in unrealized (loss) gain on investment securities	(2,381)		1,728		(4,299)		12,983

Amortization of unrealized losses on investment securities transferred to held-to-maturity	1,241		1,305		2,384		2,448
Net change in fair value of derivatives	533		(1,126)		826		(2,667)
Supplemental Executive Retirement Plan	—		—		1		—
Total other comprehensive (loss) income, net of tax	(607)		1,907		(1,088)		12,764
Comprehensive income	$	20,215	$	20,178	$	40,459	$	48,795

See accompanying notes to consolidated financial statements.

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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)


(dollars in thousands, except per share data)	Common Shares Outstanding	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		Accum. Other Comp. Loss		Total











Balance at March 31, 2026	26,115,229	$	—	$	370,633	$	106,501	$	204,494	$	(87,749)	$	593,879
Net income	—	—		—		—		20,822		—		20,822
Other comprehensive loss	—	—		—		—		—		(607)		(607)
Cash dividends paid ($0.29 per share)	—	—		—		—		(7,527)		—		(7,527)

Common stock repurchases under share repurchase program	(321,858)	—		(11,269)		—		—		—		(11,269)
Common shares withheld to satisfy tax obligations related to share‑based compensation	(306)	—		—		(10)		—		—		(10)
Share-based compensation	13,353	—		—		1,043		—		—		1,043

Balance at June 30, 2026	25,806,418	$	—	$	359,364	$	107,534	$	217,789	$	(88,356)	$	596,331


(dollars in thousands, except per share data)	Common Shares Outstanding	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		Accum. Other Comp. Loss		Total












Balance at March 31, 2025	27,061,589	$	—	$	402,400	$	104,849	$	153,692	$	(103,565)	$	557,376
Net income	—	—		—		—		18,271		—		18,271
Other comprehensive income	—	—		—		—		—		1,907		1,907
Cash dividends paid ($0.27 per share)	—	—		—		—		(7,287)		—		(7,287)

Common stock repurchases under share repurchase program	(103,077)	—		(2,577)		—		—		—		(2,577)
Common shares withheld to satisfy tax obligations related to share‑based compensation	(987)	—		—		(27)		—		—		(27)
Share-based compensation	23,911	—		—		1,211		—		—		1,211

Balance at June 30, 2025	26,981,436	$	—	$	399,823	$	106,033	$	164,676	$	(101,658)	$	568,874

See accompanying notes to consolidated financial statements.

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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (continued)

(Unaudited)


(dollars in thousands, except per share data)	Common Shares Outstanding	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		Accum. Other Comp. Loss		Total
Balance at December 31, 2025	26,374,967	$	—	$	381,158	$	107,308	$	191,383	$	(87,268)	$	592,581


Net income	—	—		—		—		41,547		—		41,547
Other comprehensive loss	—	—		—		—		—		(1,088)		(1,088)
Cash dividends paid ($0.58 per share)	—	—		—		—		(15,141)		—		(15,141)

Common stock repurchases under share repurchase program	(643,254)	—		(21,794)		—		—		—		(21,794)
Common shares withheld to satisfy tax obligations related to share‑based compensation	(40,607)	—		—		(1,396)		—		—		(1,396)
Share-based compensation	115,312	—		—		1,622		—		—		1,622

Balance at June 30, 2026	25,806,418	$	—	$	359,364	$	107,534	$	217,789	$	(88,356)	$	596,331


(dollars in thousands, except per share data)	Common Shares Outstanding	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		Accum. Other Comp. Loss		Total
Balance at December 31, 2024	27,065,570	$	—	$	404,494	$	105,054	$	143,259	$	(114,422)	$	538,385


Net income	—	—		—		—		36,031		—		36,031
Other comprehensive income	—	—		—		—		—		12,764		12,764
Cash dividends paid ($0.54 per share)	—	—		—		—		(14,614)		—		(14,614)

Common stock repurchases under share repurchase program	(180,393)	—		(4,671)		—		—		—		(4,671)
Common shares withheld to satisfy tax obligations related to share‑based compensation	(26,965)	—		—		(798)		—		—		(798)
Share-based compensation	123,224	—		—		1,777		—		—		1,777

Balance at June 30, 2025	26,981,436	$	—	$	399,823	$	106,033	$	164,676	$	(101,658)	$	568,874

See accompanying notes to consolidated financial statements.

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CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
(dollars in thousands)	2026		2025
Cash flows from operating activities:
Net income	$	41,547	$	36,031
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	6,735		9,159
Depreciation and amortization of premises and equipment	3,449		3,563
Loss on disposal of premises and equipment	—		10
Non-cash lease expense	25		87
Cash flows from operating leases	(2,494)		(2,559)

Amortization of mortgage servicing rights	478		397
Net accretion of discount on investment securities	(718)		(543)
Share-based compensation	1,622		1,777

Net gain on sales of residential mortgage loans	(402)		(468)
Proceeds from sales of loans held for sale	18,944		37,653
Originations of loans held for sale	(19,992)		(31,523)
Equity in the earnings of unconsolidated entities	(39)		(33)
Distributions from unconsolidated entities	82		13
Net increase in cash surrender value of bank-owned life insurance	(3,399)		(2,757)
Deferred income tax	(783)		(3,238)
Net tax expense from share-based compensation	—		137

Net change in other assets and liabilities	16,172		7,805
Net cash provided by operating activities	61,227		55,511

Cash flows from investing activities:
Purchases of investment securities available-for-sale	(125,068)		(50,592)
Proceeds from maturities, prepayments and calls of investment securities available-for-sale	33,140		41,623


Proceeds from maturities, prepayments and calls of investment securities held-to-maturity	19,996		19,370

Loan payments, net	14,101		99,776
Purchases of loan portfolios	(39,319)		(65,463)


Purchases of bank-owned life insurance	(1,018)		(726)
Proceeds from bank-owned life insurance death benefits	—		2,060

Purchases of premises, equipment and land	(2,989)		(2,888)

Contributions to unconsolidated entities	(4,203)		(650)
Net redemption (purchases) of FRB and FHLB stock	1,092		(17,887)
Net cash (used in) provided by investing activities	(104,268)		24,623

Cash flows from financing activities:
Net increase (decrease) in deposits	85,990		(99,022)


Repayments of long-term debt	—		(25,000)
Cash dividends paid on common stock	(15,141)		(14,614)
Repurchases of common stock and other related costs	(21,794)		(4,671)
Common shares withheld to satisfy tax obligations related to share‑based compensation	(1,396)		(798)
Net proceeds from issuance of common stock and stock option exercises	—		—
Net cash provided by (used in) financing activities	47,659		(144,105)

Net increase (decrease) in cash and cash equivalents	4,618		(63,971)

Cash and cash equivalents at beginning of period	378,653		380,941
Cash and cash equivalents at end of period	$	383,271	$	316,970

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Unaudited)


	Six Months Ended June 30,
(dollars in thousands)	2026		2025
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest expense paid	$	30,569	$	39,127
Income taxes paid, net	3,652		2,222


Supplemental disclosure of non-cash information:

Net reclassification of loans to other real estate owned	924		—



Lease liabilities arising from obtaining right-of-use lease assets	499		1,888
Amortization of unrealized losses on investment securities transferred to held-to-maturity at fair value	3,217		3,325

See accompanying notes to consolidated financial statements.

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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, 2025. 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 on Loans

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

The ACL on loans represents management's estimate of expected credit losses over the life of the Company’s loan portfolio as of a given balance sheet date. The ACL on loans is measured on a collective basis when similar risk characteristics exist. Management estimates the ACL balance using relevant internal and external information, including historical experience, current conditions, and reasonable and supportable forecasts of future economic conditions. When future forecasts are no longer supportable, management reverts to historical loss data.

The Company's ACL model incorporates a one-year reasonable and supportable forecast period and reverts to historical loss data 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 data 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 and practices, imprecision in forecasting future economic conditions, loan profile, lending staff, problem loan trends, loan review, collateral values, credit concentrations, 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.

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The Company generally segments its portfolio by the loan classes established in the Federal Financial Institutions Examination Council ("FFIEC") Call Report, with additional sub-segments to better reflect underlying portfolio dynamics. The following is a description and associated risk characteristics of each loan segment:

Commercial and industrial loans

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 as construction loans pose higher credit risks than typical secured loans. The predominant risk characteristics of this segment are the financial strength of the borrower, project completion risk (the risk that the project will not be completed on time and within budget), and geographic location.

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 include 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 changes, delinquency, and draw period maturity.

Consumer loans

Consumer loans consist of unsecured consumer lines of credit and non-revolving (term) consumer loans, including automobile 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.

During the second quarter of 2025, the Company updated its ACL model to combine revolving and non-revolving consumer loans under the Discounted Cash Flow ("DCF") methodology due to immateriality of the revolving loan portfolio. The impact of this update was immaterial.

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Purchased consumer loans

Purchased consumer loans consist of dealer and unsecured consumer loans. 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.

Segment

Expected Credit Loss Methodology

Historical Look-Back Period

Economic Forecast Length

Reversion Method

Commercial and industrial

DCF

2008 to present

One year

One year
(straight-line
basis)

Construction

DCF

Commercial real estate - Multi-family

DCF

Commercial real estate - All others

DCF

Residential mortgage

DCF

Home equity

DCF

Consumer

DCF

Consumer - Purchased

WARM

The Company utilizes the DCF methodology for all segments, except for purchased consumer loans, as management believes the DCF methodology provides better alignment with the Current Expected Credit Losses ("CECL") standard by incorporating more granular assumptions and forward-looking forecasts.

The DCF analysis is performed using an industry-leading software platform and leverages historical data. The Company uses the Moody's baseline forecast, which includes a one-year economic forecast period, followed by a one-year, straight-line reversion to the historical averages of the macroeconomic variables used. During the second quarter of 2025, the Company updated its forecast models to incorporate post-COVID-19 pandemic data, while continuing to exclude periods impacted by the COVID-19 pandemic period due to abnormal and volatile behavior.

For purchased consumer loans, the Company applies the Remaining Life methodology, also known as the Weighted Average Remaining Maturity or ("WARM") methodology, due to the pooled nature of this portfolio.

The following is a description of the methodologies utilized to measure expected credit losses:

Discounted Cash Flow

The DCF methodology estimates CECL reserves as the difference between the amortized cost of a loan and the present value of expected future cash flows. Expected future cash flows are projected based on assumptions of Probability of Default/Loss Given Default ("PD/LGD"), prepayments and recovery rates. The expected cash flows are discounted using the loan’s effective interest rate.

Remaining Life or Weighted Average Remaining Maturity

Under the Remaining Life, or WARM methodology, lifetime expected credit losses are calculated by applying a historical loss rate over this remaining life of the loan pool. The remaining life is adjusted for expected prepayments. This method is used for pooled portfolios where individual loan-level modeling is not practical.

Impact of Recently Issued Accounting Pronouncements on Future Filings

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses". ASU 2024-03 requires public entities to disclose, in the notes to the financial statements, disaggregated information about specified categories of expenses included within income statement line items. The amendments in ASU 2024‑03 are effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

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The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position or results of operations.

In September 2025, the FASB issued ASU 2025‑06, "Intangibles—Goodwill and Other—Internal‑Use Software (Subtopic 350‑40): Targeted Improvements to the Accounting for Internal‑Use Software," which clarifies and modernizes the guidance for costs related to internal‑use software. The amendments remove references to project stages and clarify the capitalization threshold for software development costs. ASU 2025‑06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position or results of operations.

In September 2025, the FASB issued ASU 2025‑07, "Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract." The ASU introduces a scope exception from derivative accounting for certain non-exchange-traded contracts with underlyings based on the operations or activities specific to one of the parties to the contract, such as ESG-linked metrics or litigation funding arrangements. Additionally, the ASU clarifies that share-based noncash consideration received from a customer for the transfer of goods or services should initially be accounted for under Topic 606, with other guidance (e.g., Topic 815 or Topic 321) applied only when the right to receive or retain such consideration becomes unconditional. ASU 2025-07 is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years, with early adoption permitted. Entities may apply the guidance prospectively to new contracts or on a modified retrospective basis through a cumulative-effect adjustment to opening retained earnings in the year of adoption. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position or results of operations.

In November 2025, the FASB issued ASU 2025‑08, "Financial Instruments—Credit Losses (Topic 326): Purchased Loans", which introduces the concept of purchased seasoned loans ("PSLs") and requires entities to apply the gross‑up approach to PSLs at acquisition (i.e., recognize an allowance for expected credit losses as an adjustment to the loan’s amortized cost basis rather than through Day 1 earnings). This change eliminates the historical Day 1 "double count" of expected credit losses for many acquired loans and is expected to improve comparability and better align accounting with acquisition economics, including in business combinations. Under ASU 2025-08, loans (excluding credit cards, debt securities, and trade receivables) are PSLs if (i) acquired in a business combination, or (ii) obtained more than 90 days after origination and the acquirer was not involved in origination. Existing accounting for purchased credit‑deteriorated ("PCD") assets is unchanged. ASU 2025-08 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and is to be applied on a prospective basis. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position or results of operations.

In November 2025, the FASB issued ASU 2025-09, "Derivatives and Hedging (Topic 815)", which simplifies hedge accounting by (i) permitting aggregation of forecasted transactions with similar risk exposure, (ii), enabling hedge accounting for “choose-your-rate” debt interest payments, (iii) permitting hedging of variable price components that are clearly and closely related to the nonfinancial forecasted asset being purchased or sold, (iv) expanding the use of net written options as hedging instruments, and (v) eliminating the recognition and presentation mismatch for a dual hedge strategy. ASU 2025-09 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and is to be applied on a prospective basis. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position or results of operations.

In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270)", which clarifies and reorganizes ASC 270 by improving navigability, specifying required interim disclosures, clarifying which entities the guidance applies to, and introducing a principle to disclose material events occurring since the last annual period. The update is effective for interim reporting periods in fiscal years beginning after December 15, 2027, with both prospective and retrospective adoption permitted, and to be applied on a prospective or retrospective basis. Early adoption is permitted and the amendments can be applied on a prospective or retrospective basis. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position or results of operations.

2. INVESTMENT SECURITIES

The following tables present the amortized cost, fair value and related ACL on available-for-sale ("AFS") and held-to-maturity ("HTM") investment securities as of June 30, 2026 and December 31, 2025 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:

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	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		ACL
(dollars in thousands)
June 30, 2026
Available-for-sale:
Debt securities:
States and political subdivisions	$	140,397	$	18	$	(24,597)	$	115,818	$	—
Corporate securities	10,000		18		(42)		9,976		—
U.S. Treasury and other government-sponsored entities and agencies	96,442		170		(1,530)		95,082		—
Collateralized loan obligations	103,671		37		(204)		103,504		—
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	469,152		1,066		(40,264)		429,954		—
Residential - Non-government agencies	15,107		143		(786)		14,464		—
Commercial - U.S. government-sponsored entities and agencies	77,808		209		(11,437)		66,580		—

Total available-for-sale investment securities	$	912,577	$	1,661	$	(78,860)	$	835,378	$	—


	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value		ACL
(dollars in thousands)
June 30, 2026
Held-to-maturity:
Debt securities:
States and political subdivisions	$	41,838	$	—	$	(6,334)	$	35,504	$	—



Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	503,377		51		(64,004)		439,424		—



Total held-to-maturity investment securities	$	545,215	$	51	$	(70,338)	$	474,928	$	—


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		ACL
(dollars in thousands)
December 31, 2025
Available-for-sale:
Debt securities:
States and political subdivisions	$	141,163	$	55	$	(24,177)	$	117,041	$	—

U.S. Treasury and other government-sponsored entities and agencies	100,215		1,103		(1,293)		100,025		—
Collateralized loan obligations	40,960		32		(165)		40,827		—
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	442,221		3,032		(38,200)		407,053		—
Residential - Non-government agencies	15,935		150		(722)		15,363		—
Commercial - U.S. government-sponsored entities and agencies	79,040		415		(11,552)		67,903		—

Total available-for-sale investment securities	$	819,534	$	4,787	$	(76,109)	$	748,212	$	—

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	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value		ACL
(dollars in thousands)
December 31, 2025
Held-to-maturity:
Debt securities:
States and political subdivisions	$	41,925	$	—	$	(7,226)	$	34,699	$	—



Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	520,466		131		(59,451)		461,146		—



Total held-to-maturity investment securities	$	562,391	$	131	$	(66,677)	$	495,845	$	—

The Company did not transfer any investment securities that were classified as AFS to HTM during the three and six months ended June 30, 2026 and 2025.

During the three and six months ended June 30, 2026, the Company recorded a total of $1.7 million and $3.2 million, respectively, in amortization of unrecognized losses on investment securities previously transferred from AFS to HTM. During the three and six months ended June 30, 2025, the Company recorded a total of $1.8 million and $3.3 million, respectively, in amortization of unrecognized losses on investment securities previously transferred from AFS to HTM.

The Company elected to not estimate credit losses on accrued interest receivable, as any uncollectible accrued interest receivable is written off 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. As of June 30, 2026 and December 31, 2025, accrued interest receivable on investment securities totaled $5.2 million and $4.5 million, respectively.

The amortized cost, estimated fair value and weighted average yield of the Company's AFS and HTM investment securities as of June 30, 2026, are presented below, grouped by contractual maturity. Expected maturities may differ from contractual maturities due to the issuer's option to call or prepay obligations, with or without penalties. Securities that are not due at a single maturity date, such as mortgage-backed securities and other asset-backed investments, are presented separately.


(dollars in thousands)	Amortized Cost		Fair Value		Weighted Average Yield (1)
June 30, 2026
Available-for-sale:
Debt securities:
Due in one year or less	$	1,388	$	1,380	2.83	%
Due after one year through five years	64,561		63,016		3.72
Due after five years through ten years	48,442		47,505		4.49
Due after ten years	132,448		108,975		2.65
Collateralized loan obligations	103,671		103,504		5.07
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	469,152		429,954		3.05
Residential - Non-government agencies	15,107		14,464		4.62
Commercial - U.S. government-sponsored entities and agencies	77,808		66,580		2.75

Total available-for-sale securities	$	912,577	$	835,378	3.38	%

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(dollars in thousands)	Amortized Cost		Fair Value		Weighted Average Yield (1)
June 30, 2026
Held-to-maturity:
Debt securities:



Due after ten years	$	41,838	$	35,504	2.26	%

Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	503,377		439,424		1.86



Total held-to-maturity securities	$	545,215	$	474,928	1.89	%

(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 six months ended June 30, 2026 and 2025.

Investment securities with carrying values totaling $689.8 million and $736.7 million as of June 30, 2026 and December 31, 2025, respectively, were pledged to secure public deposits, borrowings from the Federal Reserve Discount Window and other financial obligations.

As of June 30, 2026 and December 31, 2025, the Company did not hold investment securities of any one issuer, other than the U.S. Government and its agencies, that exceeded 10% of shareholders' equity.

The following tables summarize AFS and HTM investment securities that were in a loss position as of the dates presented. The data is aggregated by major security type and the length of time the securities have been in a continuous loss position.

There were a total of 194 and 179 AFS investment securities that were in an unrealized loss position, without an ACL, as of June 30, 2026 and December 31, 2025, respectively. There were a total of 81 and 81 HTM investment securities that were in an unrecognized loss position, without an ACL, as of June 30, 2026 and December 31, 2025, respectively.


	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2026
Available-for-sale:
Debt securities:
States and political subdivisions	$	7,248	$	(95)	$	102,373	$	(24,502)	$	109,621	$	(24,597)
Corporate securities	4,958		(42)		—		—		4,958		(42)
U.S. Treasury and other government-sponsored entities and agencies	43,801		(200)		10,808		(1,330)		54,609		(1,530)
Collateralized loan obligations	62,689		(197)		10,005		(7)		72,694		(204)
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	57,690		(505)		245,291		(39,759)		302,981		(40,264)
Residential - Non-government agencies	4,242		(67)		6,543		(719)		10,785		(786)
Commercial - U.S. government-sponsored entities and agencies	—		—		48,150		(11,437)		48,150		(11,437)

Total	$	180,628	$	(1,106)	$	423,170	$	(77,754)	$	603,798	$	(78,860)

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	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses
June 30, 2026
Held-to-maturity:
Debt securities:
States and political subdivisions	$	—	$	—	$	35,504	$	(6,334)	$	35,504	$	(6,334)



Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	—		—		431,029		(64,004)		431,029		(64,004)



Total	$	—	$	—	$	466,533	$	(70,338)	$	466,533	$	(70,338)


	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, 2025
Available-for-sale:
Debt securities:
States and political subdivisions	$	2,196	$	(12)	$	105,922	$	(24,165)	$	108,118	$	(24,177)

U.S. Treasury and other government-sponsored entities and agencies	20,687		(48)		11,976		(1,245)		32,663		(1,293)
Collateralized loan obligations	21,002		(99)		10,020		(66)		31,022		(165)
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	—		—		261,335		(38,200)		261,335		(38,200)
Residential - Non-government agencies	—		—		6,954		(722)		6,954		(722)
Commercial - U.S. government-sponsored entities and agencies	—		—		49,246		(11,552)		49,246		(11,552)

Total	$	43,885	$	(159)	$	445,453	$	(75,950)	$	489,338	$	(76,109)


	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, 2025
Held-to-maturity:
Debt securities:
States and political subdivisions	$	—	$	—	$	34,699	$	(7,226)	$	34,699	$	(7,226)



Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	—		—		450,997		(59,451)		450,997		(59,451)



Total	$	—	$	—	$	485,696	$	(66,677)	$	485,696	$	(66,677)

Investment securities in an unrealized or unrecognized loss position are evaluated at least quarterly to determine whether a credit loss exists. This evaluation includes a review of changes in the investment securities' credit ratings issued by major rating agencies and assessments of the issuers' financial condition. For mortgage-related securities, the Company also considers delinquency and loss data related to the underlying collateral, changes in subordination levels for the Company's position within the repayment structure, and remaining credit enhancement relative to projected credit losses.

The Company has reviewed its AFS and HTM investment securities that are in an unrealized or unrecognized loss position and determined that the losses are not related to credit quality, but are primarily attributable to changes in interest rates and volatility in the financial markets since the time of purchase. All of the investment securities in a loss position continue to be rated investment grade by one or more major rating agencies.

As of June 30, 2026 and December 31, 2025, the Company did not intend to sell the AFS and HTM securities that were in a loss position, and it was not more likely than not that the company would be required to sell such securities before recovery of

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their amortized cost basis. The Company evaluated these securities for credit losses and concluded that the decline in fair value was not attributable to credit factors. Accordingly, no ACL was recorded on these securities.

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)	June 30, 2026		December 31, 2025



Commercial and industrial	$	590,404	$	594,592

Construction	211,007		213,191
Residential mortgage	1,815,342		1,839,191
Home equity	577,283		600,082
Commercial mortgage	1,686,361		1,594,433
Consumer	427,925		447,607



Loans, net of deferred fees and costs	$	5,308,322	$	5,289,096

Interest income on loans is accrued at the contractual rate of interest based on the unpaid principal balance. The Company has elected to not measure an estimate of credit losses on accrued interest receivable, as any uncollectible accrued interest receivable is written off in a timely manner. Accrued interest receivable on loans is reported together with accrued interest receivable on investment securities and other assets in the consolidated balance sheets. As of June 30, 2026 and December 31, 2025, accrued interest receivable on loans totaled $17.6 million and $18.3 million, respectively.

The Company did not transfer any loans to the held for sale category during the three and six months ended June 30, 2026 and 2025 and did not sell any loans originally held for investment during the three and six months ended June 30, 2026 and 2025.

Purchased Loans

The following table presents loan purchase activity by class at the time of purchase for the periods presented. None of the purchased loans were classified as purchased credit deteriorated ("PCD"), and there were no loans categorized as PCD during the periods presented.


(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
Purchases of U.S. Mainland Consumer - Dealer:	2026		2025		2026		2025
Outstanding balance	$	23,183	$	32,787	$	38,655	$	64,227
Premium	341		1,000		664		1,236
Purchase price	$	23,524	$	33,787	$	39,319	$	65,463

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. These loans are individually evaluated to determine

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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:


	June 30, 2026		December 31, 2025
(dollars in thousands)	Secured by 1-4 Family Residential Properties			Allocated ACL		Secured by 1-4 Family Residential Properties		Allocated ACL



Residential mortgage	$	9,268		$	—	$	10,572	$	—
Home equity	5,619			—		2,608		—



Total	$	14,887		$	—	$	13,180	$	—

Other Real Estate Owned and Foreclosure Proceedings

As of June 30, 2026, the $0.9 million balance of other real estate owned includes a residential real estate property recorded as a result of foreclosure. As of December 31, 2025, the Company did not own a foreclosed property. The Company did not sell a foreclosed property during the three and six months ended June 30, 2026 and 2025.

The Company had $8.7 million and $10.3 million of residential mortgage and home equity loans collateralized by residential real estate properties that were in the process of foreclosure as of June 30, 2026 and December 31, 2025, respectively. The Company did not have any commercial real estate loans in the process of foreclosure as of June 30, 2026 and December 31, 2025.

Nonaccrual and Past Due Loans

For all loan types, the delinquency status is determined based on 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 or More Past Due		Nonaccrual Loans		Total Past Due and Nonaccrual		Loans Not Past Due		Total Loans		Nonaccrual Loans With No ACL
June 30, 2026



Commercial and industrial	$	1,212	$	317	$	—	$	192	$	1,721	$	588,683	$	590,404	$	—

Construction	—		—		—		—		—		211,007		211,007		—
Residential mortgage	45		1,983		—		9,268		11,296		1,804,046		1,815,342		9,268
Home equity	488		1,011		—		5,619		7,118		570,165		577,283		5,619
Commercial mortgage	881		383		—		—		1,264		1,685,097		1,686,361		—
Consumer	3,322		1,203		286		543		5,354		422,571		427,925		—

Total	$	5,948	$	4,897	$	286	$	15,622	$	26,753	$	5,281,569	$	5,308,322	$	14,887


(dollars in thousands)	Accruing Loans 30 - 59 Days Past Due		Accruing Loans 60 - 89 Days Past Due		Accruing Loans 90 Days or More Past Due		Nonaccrual Loans		Total Past Due and Nonaccrual		Loans Not Past Due		Total Loans		Nonaccrual Loans With No ACL
December 31, 2025



Commercial and industrial	$	461	$	218	$	—	$	591	$	1,270	$	593,322	$	594,592	$	—

Construction	—		—		—		—		—		213,191		213,191		—
Residential mortgage	6,399		2,030		664		10,572		19,665		1,819,526		1,839,191		10,572
Home equity	1,029		809		485		2,608		4,931		595,151		600,082		2,608
Commercial mortgage	—		—		—		—		—		1,594,433		1,594,433		—
Consumer	3,357		1,312		403		615		5,687		441,920		447,607		—

Total	$	11,246	$	4,369	$	1,552	$	14,386	$	31,553	$	5,257,543	$	5,289,096	$	13,180

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Loan Modifications for Borrowers Experiencing Financial Difficulty

The Company did not execute any material loan modifications for borrowers experiencing financial difficulty, either individually or in the aggregate, during the three months ended June 30, 2026 and 2025, or during the six months ended June 30, 2025.

In the first quarter of 2026, the Company executed one loan modification for a borrower experiencing financial difficulty. The modification consisted of a term extension on a commercial and industrial loan with an amortized cost basis of $1.0 million at the time of modification. The modified loan represented 0.16% of commercial and industrial loans as of June 30, 2026. The financial effect of the modification for the term extension was not material.

The Company did not grant any concessions involving principal forgiveness or interest rate reductions during the three and six months ended June 30, 2026 and 2025.

As of June 30, 2026, the modified loan remained current and was performing in accordance with its modified terms. No payment defaults were recorded during the period ended June 30, 2026 related to loans modified for borrowers experiencing financial difficulty within the preceding twelve months.

When the Company determines that a modified loan, or a portion thereof, is uncollectible, the loan is charged off. The amortized cost basis of the loan is reduced by the amount charged off, with a corresponding reduction to the allowance for credit losses.

Credit Quality Indicators

The Company categorizes loans into risk ratings based on the evaluation of the borrower's ability to meet debt obligations such as: current financial information, historical payment experience, credit documentation, publicly available 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 regularly on an ongoing basis. For more information about the Company's credit quality indicators, refer to Note 3 - Loans and Credit Quality included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

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 total loans. In addition, the following tables present gross charge-offs of loans by origination year during the periods presented.

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(dollars in thousands)	Amortized Cost of Term Loans by Year of Origination												Amortized Cost of Revolving Loans
June 30, 2026	2026		2025		2024		2023		2022		Prior				Total
















Commercial and industrial:
Risk Rating
Pass	$	40,635	$	45,706	$	156,380	$	27,412	$	51,322	$	140,025	$	114,166	$	575,646
Special Mention	1,773		—		1,342		—		—		—		—		3,115
Substandard	1,934		1,430		2,071		3,471		972		1,618		147		11,643


Subtotal	44,342		47,136		159,793		30,883		52,294		141,643		114,313		590,404
Construction:
Risk Rating
Pass	313		92,646		38,826		11,392		14,965		20,858		—		179,000

Substandard	—		—		—		—		—		32,007		—		32,007


Subtotal	313		92,646		38,826		11,392		14,965		52,865		—		211,007
Residential mortgage:
Risk Rating
Pass	78,222		86,858		53,832		72,787		227,931		1,286,444		—		1,806,074

Substandard	—		—		—		233		660		8,375		—		9,268


Subtotal	78,222		86,858		53,832		73,020		228,591		1,294,819		—		1,815,342
Home equity:
Risk Rating
Pass	44		447		1,323		9,183		23,960		44,192		492,515		571,664

Substandard	—		—		—		1,185		—		—		4,434		5,619


Subtotal	44		447		1,323		10,368		23,960		44,192		496,949		577,283
Commercial mortgage:
Risk Rating
Pass	171,902		195,011		124,390		91,746		202,073		839,762		—		1,624,884
Special Mention	—		—		2,018		—		—		3,955		—		5,973
Substandard	—		—		35,420		2,178		5,884		12,022		—		55,504


Subtotal	171,902		195,011		161,828		93,924		207,957		855,739		—		1,686,361
Consumer:
Risk Rating
Pass	24,328		100,288		75,356		40,552		74,114		71,962		40,495		427,095

Substandard	—		67		115		94		—		405		149		830


Subtotal	24,328		100,355		75,471		40,646		74,114		72,367		40,644		427,925
Total	$	319,151	$	522,453	$	491,073	$	260,233	$	601,881	$	2,461,625	$	651,906	$	5,308,322


(dollars in thousands)	Gross Charge-Offs by Year of Origination
Six Months Ended June 30, 2026	2026		2025		2024		2023		2022		Prior		Total



Commercial and industrial	$	—	$	276	$	684	$	214	$	114	$	1,121		$	2,409
Real estate:

Residential mortgage	—		—		—		9		14		—			23


Consumer	5		499		740		349		1,830		1,161			4,584

Gross charge-offs	$	5	$	775	$	1,424	$	572	$	1,958	$	2,282		$	7,016

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(dollars in thousands)	Amortized Cost of Term Loans by Year of Origination												Amortized Cost of Revolving Loans
December 31, 2025	2025		2024		2023		2022		2021		Prior				Total
















Commercial and industrial:
Risk Rating
Pass	$	63,780	$	166,412	$	34,598	$	56,913	$	47,935	$	115,991	$	103,393	$	589,022
Special Mention	—		660		1,869		—		—		—		—		2,529
Substandard	—		1,056		805		—		103		480		597		3,041


Subtotal	63,780		168,128		37,272		56,913		48,038		116,471		103,990		594,592
Construction:
Risk Rating
Pass	57,887		24,133		24,091		48,970		17,741		40,369		—		213,191




Subtotal	57,887		24,133		24,091		48,970		17,741		40,369		—		213,191
Residential mortgage:
Risk Rating
Pass	95,400		72,780		79,382		237,379		556,527		786,487		—		1,827,955

Substandard	—		—		246		2,263		405		8,322		—		11,236


Subtotal	95,400		72,780		79,628		239,642		556,932		794,809		—		1,839,191
Home equity:
Risk Rating
Pass	416		988		10,944		25,112		15,989		31,915		511,625		596,989

Substandard	—		—		1,185		—		—		1,423		485		3,093


Subtotal	416		988		12,129		25,112		15,989		33,338		512,110		600,082
Commercial mortgage:
Risk Rating
Pass	204,072		146,975		92,107		204,149		210,061		681,060		5,771		1,544,195
Special Mention	—		—		593		—		—		471		—		1,064
Substandard	—		32,987		2,200		5,978		2,194		5,815		—		49,174


Subtotal	204,072		179,962		94,900		210,127		212,255		687,346		5,771		1,594,433
Consumer:
Risk Rating
Pass	81,799		85,641		54,227		97,994		71,458		17,527		37,944		446,590

Substandard	95		101		81		109		148		483		—		1,017


Subtotal	81,894		85,742		54,308		98,103		71,606		18,010		37,944		447,607
Total	$	503,449	$	531,733	$	302,328	$	678,867	$	922,561	$	1,690,343	$	659,815	$	5,289,096


(dollars in thousands)	Gross Charge-Offs by Year of Origination
Six Months Ended June 30, 2025	2025		2024		2023		2022		2021		Prior		Total



Commercial and industrial	$	—	$	2,140	$	145	$	188	$	140	$	825		$	3,438





Consumer	—		501		512		2,986		1,234		608			5,841

Gross charge-offs	$	—	$	2,641	$	657	$	3,174	$	1,374	$	1,433		$	9,279

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

The following tables present by segment, the activities in the ACL on loans during the periods presented:


(dollars in thousands)
Three Months Ended June 30, 2026	Commercial & Industrial		Construction		Residential Mortgage		Home Equity		Commercial Mortgage		Consumer		Total
Beginning balance	$	7,620	$	3,827	$	14,211	$	1,410	$	20,043	$	12,822	$	59,933


Provision (credit) for credit losses on loans	1,700		492		(1,106)		(341)		1,310		1,249		3,304

Gross charge-offs	(1,353)		—		(23)		—		—		(2,283)		(3,659)
Gross recoveries	198		—		10		6		—		789		1,003
Net (charge-offs) recoveries	(1,155)		—		(13)		6		—		(1,494)		(2,656)
Ending balance	$	8,165	$	4,319	$	13,092	$	1,075	$	21,353	$	12,577	$	60,581


(dollars in thousands)
Three Months Ended June 30, 2025	Commercial & Industrial		Construction		Residential Mortgage		Home Equity		Commercial Mortgage		Consumer		Total
Beginning balance	$	7,423	$	2,282	$	15,936	$	1,808	$	19,523	$	13,497	$	60,469


Provision (credit) for credit losses on loans	2,480		1,078		(2,065)		(768)		742		2,343		3,810

Gross charge-offs	(2,858)		—		—		—		—		(2,864)		(5,722)
Gross recoveries	195		3		7		9		—		840		1,054
Net (charge-offs) recoveries	(2,663)		3		7		9		—		(2,024)		(4,668)
Ending balance	$	7,240	$	3,363	$	13,878	$	1,049	$	20,265	$	13,816	$	59,611


(dollars in thousands)
Six Months Ended June 30, 2026	Commercial & Industrial		Construction		Residential Mortgage		Home Equity		Commercial Mortgage		Consumer		Total
Beginning balance	$	7,982	$	3,815	$	14,219	$	1,242	$	19,544	$	12,819	$	59,621


Provision (credit) for credit losses on loans	2,219		502		(1,122)		(179)		1,809		2,799		6,028

Gross charge-offs	(2,409)		—		(23)		—		—		(4,584)		(7,016)
Gross recoveries	373		2		18		12		—		1,543		1,948
Net (charge-offs) recoveries	(2,036)		2		(5)		12		—		(3,041)		(5,068)
Ending balance	$	8,165	$	4,319	$	13,092	$	1,075	$	21,353	$	12,577	$	60,581


(dollars in thousands)
Six Months Ended June 30, 2025	Commercial & Industrial		Construction		Residential Mortgage		Home Equity		Commercial Mortgage		Consumer		Total
Beginning balance	$	7,113	$	2,316	$	15,267	$	2,335	$	18,882	$	13,269	$	59,182


Provision (credit) for credit losses on loans	3,199		1,044		(1,406)		(1,298)		1,383		4,793		7,715

Gross charge-offs	(3,438)		—		—		—		—		(5,841)		(9,279)
Gross recoveries	366		3		17		12		—		1,595		1,993
Net (charge-offs) recoveries	(3,072)		3		17		12		—		(4,246)		(7,286)
Ending balance	$	7,240	$	3,363	$	13,878	$	1,049	$	20,265	$	13,816	$	59,611

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The following table presents the activities in the reserve for off-balance sheet credit exposures, which is reported within other liabilities on the Company's consolidated balance sheets, for the periods presented. The related provision (credit) for off-balance sheet credit exposures is included in the provision for credit losses on the Company's consolidated statements of income for the periods presented.


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2026		2025		2026		2025
Beginning balance	$	5,071	$	2,837	$	5,442	$	2,570


Provision for off-balance sheet credit exposures	1,078		1,177		707		1,444
Ending balance	$	6,149	$	4,014	$	6,149	$	4,014

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)	June 30, 2026		December 31, 2025
Investments in low income housing tax credit partnerships	$	54,929	$	58,496
Investments in common securities of statutory trusts	1,547		1,547
Investments in affiliates	76		120
Other	1,186		1,186
Total	$	57,738	$	61,349

As of June 30, 2026 and December 31, 2025, the Company's total commitments to fund low-income housing tax credit ("LIHTC") partnerships were $80.0 million and $80.0 million, respectively.

Unfunded commitments related to LIHTC partnerships totaled $21.7 million and $25.9 million as of June 30, 2026 and December 31, 2025, respectively. These amounts were included in other liabilities in the Company's consolidated balance sheets.

The Company accounts for its investments in LIHTC partnerships using the proportional amortization method, and these investments are reported in investments in unconsolidated entities in the Company's consolidated balance sheets.

The following table presents the expected payments for unfunded commitments related to LIHTC and other partnership investments as of June 30, 2026. The table includes expected funding for the remainder of fiscal year 2026, the next five succeeding fiscal years, and all years thereafter:


(dollars in thousands)
Year Ending December 31,	LIHTC		Other		Total
2026 (remainder)	$	8,113	$	553	$	8,666
2027	2,667		—		2,667
2028	5,482		—		5,482
2029	4,921		—		4,921
2030	141		—		141
2031	46		—		46
Thereafter	349		—		349
Total unfunded commitments	$	21,719	$	553	$	22,272

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


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2026		2025		2026		2025
Proportional amortization method:
Amortization expense recognized in income tax expense	$	1,784	$	1,533	$	3,568	$	3,067
Tax credits recognized in income tax expense	2,086		1,794		4,172		3,588

The Company has a commitment of $2.0 million to the JAM FINTOP Banktech Fund, L.P. ("JAM FINTOP"). The Company does not have the ability to exercise significant influence over the JAM FINTOP, and the investment does not have a readily determinable fair value. Accordingly, the Company determined that the cost method of accounting for the investment was appropriate.

In 2025, the Company received a distribution of proceeds from the sale of one of JAM FINTOP's portfolio companies of $0.9 million. The proceeds were treated as a return on capital and applied against the cost basis of the investment in JAM FINTOP.

The Company's unfunded commitment related to the JAM FINTOP investment was $0.6 million and $0.6 million as of June 30, 2026 and December 31, 2025, respectively. These amounts are included in other liabilities in 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:


(dollars in thousands)	June 30, 2026		December 31, 2025
Mortgage loan portfolio serviced for:
Federal National Mortgage Association	$	720,516	$	741,186
Federal Home Loan Mortgage Corporation	409,672		429,933
Federal Home Loan Bank	286		303
Total loans serviced for others	$	1,130,474	$	1,171,422

The following tables present changes in the carrying value and the fair market value of mortgage servicing rights for the periods presented:


	Three Months Ended				Six Months Ended
(dollars in thousands)	June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Beginning balance	$	8,520	$	8,418	$	8,672	$	8,473
Additions	57		223		170		360
Amortization	(213)		(205)		(478)		(397)
Ending balance	$	8,364	$	8,436	$	8,364	$	8,436


Fair market value, beginning balance	$	11,642	$	12,079	$	11,301	$	12,387
Fair market value, ending balance	$	11,467	$	11,897	$	11,467	$	11,897

The Company measures its mortgage servicing rights ("MSRs") using the amortization method, amortizing MSRs proportionally over the period of expected net servicing income. New MSRs and amortization are reported within mortgage banking income, while ancillary income is recorded in other operating income. MSRs are recognized when loans are sold with servicing retained and pooled by similar characteristics.

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MSRs are initially recorded at fair value at the time of loan sale based on a discounted cash flow model prepared by a third-party service provider using market-based assumptions. Thereafter, MSRs are carried at the lower of amortized cost or fair value and are evaluated for impairment at each reporting date. Key assumptions used in estimating fair value include mortgage prepayment speeds, discount rates, servicing income, and servicing costs. These assumptions are subjective and require management judgment and are updated periodically to reflect changes in market conditions, loan characteristics, and expected borrower behavior.

MSRs are classified as Level 3 assets within the fair value hierarchy because the valuation relies on significant unobservable inputs. The Company estimates fair value using discounted cash flow models that incorporate expected servicing cash flows, prepayment assumptions, and servicing costs. Changes in prepayment speeds, which are influenced by interest rates, home prices, and borrower behavior, can have a significant impact on MSR fair values. Generally, declining interest rates increase prepayment activity and reduce MSR value, while rising rates decrease prepayment activity and may increase MSR values.

Fair value estimates and underlying assumptions are reviewed periodically and, where available, compared with observable market data and third-party valuations.

The following table presents the key assumptions used in estimating the fair market value of MSRs as of the dates presented:


	June 30, 2026		December 31, 2025


Weighted average discount rate	9.5	%	9.5	%
Weighted average prepayment speed assumption	11.2		12.3

The Company evaluates MSRs for impairment at each reporting date. Impairment exists when the carrying amount of the MSRs exceeds their estimated fair value. Any impairment is recognized through a valuation allowance, with subsequent recoveries recognized to the extent of previously recorded impairment. The Company noted no impairment related to its MSRs as of June 30, 2026.

7. DERIVATIVES

The Company utilizes both designated and undesignated derivative financial instruments to manage exposure to interest rate fluctuations. All derivatives are measured at fair value and reported in other assets or other liabilities on the consolidated balance sheets, depending on their position.

For derivative instruments that are designated as cash flow hedging instruments, the effective portion of the changes in the fair value of the derivative is recorded in accumulated other comprehensive income (loss) ("AOCI"), net of tax, until the hedged cash flows impact earnings. Any ineffective portion of the hedge is immediately recognized 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 had no interest rate lock commitments outstanding as of June 30, 2026 and December 31, 2025.

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The Company had $1.7 million and $1.1 million of forward sale commitments outstanding as of June 30, 2026 and December 31, 2025, respectively.

Risk Participation Agreements

The Company may enter into credit risk participation agreements ("RPA") with financial institution counterparties related to interest rate swaps on participation loans. 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.

RPAs are accounted for as undesignated derivatives and are measured at fair value, with changes in fair value recorded in current period earnings.

The Company had RPAs with total notional amounts of $52.0 million and $52.4 million as of June 30, 2026 and December 31, 2025, respectively.

Back-to-Back Swap Agreements

The Company has established a program in which it originates variable-rate loans and simultaneously enters into variable-to-fixed interest rate swaps with borrowers. To offset interest rate exposure, the Company also enters into equal and opposite swap agreements with third-party financial institutions. These back-to-back swap agreements are designed to economically offset each other, allowing the Company to maintain a variable rate loan while providing the borrower with fixed-rate payments.

The Company's net cash flow from these arrangements equals the interest income earned on the variable-rate loan. These back-to-back swap agreements are considered free-standing derivatives and are recorded at fair value in either other assets or other liabilities on the Company's consolidated balance sheet. Changes in fair value are recognized in current period earnings.

As of June 30, 2026, the Company had entered into swap agreements with borrowers totaling $63.8 million in notional amount, compared to $60.7 million as of December 31, 2025. These agreements were offset by back-to-back swap agreements with third-party financial institutions for the same notional amounts. The Company received $8.4 million and $6.6 million in counter-party cash collateral related to the back-to-back swap agreements as of June 30, 2026 and December 31, 2025, respectively.

Interest Rate Swap

To mitigate interest rate risk, the Company entered into a forward starting interest rate swap during the first quarter of 2022, with a notional amount of $115.5 million, designated as a fair value hedge of certain municipal debt securities. Under the terms of the swap, the Company pays 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 matures on March 31, 2029.

During the second quarter of 2025, a $1.0 million municipal debt security underlying the hedge was called, resulting in a partial termination of the interest rate swap and a reduction of the notional amount to $114.6 million. All other terms of the interest rate swap remained unchanged.

The interest rate swap is carried at fair value on the Company’s consolidated balance sheet, recorded in other assets (if the fair value is positive) or other liabilities (if the fair value is negative). The changes in the fair value of the interest rate swap are recognized in interest income. Unrealized gains or losses on the hedged municipal securities, attributable to changes in benchmark interest rates, are recorded as adjustments to the carrying value of the hedged debt securities and offset in the same interest income line item.

The Company uses the long-haul method to assess hedge effectiveness, which is a statistical regression analysis that consists of historical observations of prior period periodic changes in fair value of both the hedge and the hedged item. The assessment is based on the Federal Funds benchmark interest rate component of the hedged item only with changes in credit unhedged. The assessment is performed on a quarterly basis. As of June 30, 2026, the hedge was determined to be highly effective, and the Company expects the hedge to remain effective for the duration of the swap.

During the three months ended June 30, 2026 and 2025, the Company recognized net interest income of $0.4 million and $0.7 million, respectively, from net periodic settlements on its interest rate swap, which is included in interest income on taxable

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investment securities. For the six months ended June 30, 2026 and 2025, the Company recognized net interest income of $0.8 million and $1.5 million, respectively, from the swap.

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	June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025
Interest rate lock and forward sale commitments	Other assets / other liabilities	$	—	$	—	$	5	$	4


Risk participation agreements	Other assets / other liabilities	—		—		—		3
Back-to-back swap agreements	Other assets / other liabilities	2,878		3,045		2,878		3,045

Derivative Financial Instruments Designated as Hedging Instruments

Asset Derivatives

Liability Derivatives

Fair Value at

(dollars in thousands)

Balance Sheet Location

June 30,
2026

December 31,
2025

June 30,
2026

December 31,
2025

Interest rate swap

Other assets / other liabilities

5,242

4,163

—

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 June 30, 2026

Interest rate lock and forward sale commitments

Mortgage banking income

(30)

Loans held for sale

Other income

Risk participation agreements

Other service charges and fees

Three Months Ended June 30, 2025

Interest rate lock and forward sale commitments

Mortgage banking income

(1)

Loans held for sale

Other income

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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)

Six Months Ended June 30, 2026

Interest rate lock and forward sale commitments

Mortgage banking income

(1)

Loans held for sale

Other income

Risk participation agreements

Other service charges and fees

Back-to-back swap agreements

Other service charges and fees

Six Months Ended June 30, 2025

Interest rate lock and forward sale commitments

Mortgage banking income

(43)

Loans held for sale

Other income

Back-to-back swap agreements

Other service charges and fees

176

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 June 30, 2026

Interest rate swap

Interest income

413

Three Months Ended June 30, 2025

Interest rate swap

Interest income

749

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)

Six Months Ended June 30, 2026

Interest rate swap

Interest income

831

Six Months Ended June 30, 2025

Interest rate swap

Interest income

1,467

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)	June 30, 2026		December 31, 2025
Investment securities, available-for-sale:
Carrying amount of the hedged assets	$	92,040	$	92,517
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets	(5,510)		(4,385)

8. SHORT-TERM BORROWINGS AND LONG-TERM DEBT

The following table presents the Company's long-term debt, which is based on original maturity and consists of advances under the arrangement with Federal Home Loan Bank of Des Moines (the "FHLB") and junior subordinated debentures as of the dates

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presented. These borrowing agreements may include customary financial covenants, with which the Company was in compliance as of June 30, 2026 and December 31, 2025.


(dollars in thousands)	June 30, 2026		December 31, 2025




Long-term debt:
Federal Home Loan Bank long-term advances	$	25,000	$	25,000
Junior subordinated debentures	51,547		51,547

Total	$	76,547	$	76,547

At June 30, 2026, future principal payments on long-term debt based on redemption date or final maturity are as follows:


(dollars in thousands)
Year Ending December 31,
2026 (remainder)	$	—
2027	—
2028	25,000
2029	—
2030	—
2031	—
Thereafter	51,547
Total	$	76,547

Federal Home Loan Bank Advances and Other Borrowings

The Bank is a member of the Federal Home Loan Bank of Des Moines. As of June 30, 2026, the Bank maintained a $1.87 billion line of credit, compared to $1.80 billion as of December 31, 2025. The undrawn amount under this arrangement was $1.75 billion as of June 30, 2026, compared to $1.68 billion as of December 31, 2025. There were no short-term borrowings outstanding under this arrangement as of June 30, 2026 and December 31, 2025.

As of June 30, 2026 and December 31, 2025, there was a $25.0 million long-term advance under the FHLB arrangement bearing an interest rate of 4.02%.

The FHLB also provides standby letters of credit on behalf of the Bank to secure certain public deposits. If the FHLB is required to make a payment under a standby letter of credit, the amount is converted to an advance. As of June 30, 2026, standby letters of credit under this arrangement totaled $95.6 million, compared to $95.6 million as of December 31, 2025. These letters of credit reduce the available borrowing capacity under the total line of credit, similar to outstanding advances.

In accordance with the collateral provisions of the Advances, Security and Deposit Agreement with the FHLB, the Bank pledged certain real estate loans with a carrying value of approximately $2.72 billion and $2.76 billion as of June 30, 2026 and December 31, 2025, respectively, as collateral for the FHLB advances and standby letters of credit.

The Bank also had access to the Federal Reserve Discount Window, with additional unused borrowing capacity of $201.5 million and $206.4 million as of June 30, 2026 and December 31, 2025, respectively. Certain commercial and commercial real estate loans with a par value totaling $95.4 million and $98.9 million as of June 30, 2026 and December 31, 2025, respectively, were pledged to the Federal Reserve as collateral on the line of credit. In addition, investment securities with a par value of $165.8 million and $172.0 million as of June 30, 2026 and December 31, 2025, 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 assets.

Additionally, the Bank had unused unsecured credit lines with other lenders totaling $75.0 million that was available as of June 30, 2026 and December 31, 2025.

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Junior 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	June 30, 2026		December 31, 2025		Interest Rate
CPB Capital Trust IV ("Trust IV")	$	30,928	$	30,928	Three-month CME Term SOFR + tenor spread adjustment of 0.26% + 2.45%
CPB Statutory Trust V ("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, the Company established CPB Capital Trust IV ("Trust IV"), a wholly-owned statutory trust. Trust IV issued $30.0 million in floating rate trust preferred securities, bearing interest at three-month London Interbank Offered Rate ("LIBOR") plus 2.45%, with a maturity date of December 15, 2034. The principal assets of Trust IV consist of $30.9 million in the Company's junior subordinated debentures, which carry identical interest rate and maturity terms. Trust IV issued $0.9 million in common securities to the Company.

In December 2004, the Company formed CPB Statutory Trust V ("Trust V"), another wholly-owned statutory trust. Trust V issued $20.0 million in floating rate trust preferred securities, bearing interest at three-month LIBOR plus 1.87%, also maturing on December 15, 2034. The principal assets of Trust V include $20.6 million in the Company's junior subordinated debentures, with matching interest rate and maturity terms. Trust V issued $0.6 million in common securities to the Company.

Following the cessation of LIBOR, the interest rate benchmark transitioned to three‑month CME Term Secured Overnight Financing Rate ("SOFR") plus a 0.26% tenor spread adjustment, in addition to the original contractual margin of 2.45% and 1.87% for Trust IV and Trust V, respectively.

The trust preferred securities, the junior subordinated debentures, and the common securities issued by Trusts IV and V are redeemable in whole or in part on any interest payment date, or in whole but not in part within 90 days following the occurrence of certain specified events. The Company provides a full and unconditional guarantee of each trust's obligations related to its trust preferred securities.

Subject to certain exceptions and limitations, the Company may elect to defer interest payments on the junior subordinated debentures for up to 20 consecutive quarterly periods without triggering default or penalty. This would result in a corresponding deferral of distribution payments on the related trust preferred securities.

The Company's investments in the common securities of Trusts IV and V are recorded under investment in unconsolidated entities, while the junior subordinated debentures are reported as liabilities on the Company's consolidated balance sheets. The trusts are not consolidated in the Company's consolidated financial statements as the Company is not the primary beneficiary of these variable interest entities.

Under applicable regulatory guidelines and interpretations, the junior subordinated debentures qualify for inclusion in Tier 1 capital, subject to certain limitations.

9. EQUITY

As a Hawaii state-chartered bank, Central Pacific Bank may only pay dividends to the extent it has Statutory Retained Earnings, as defined under Hawaii banking law, which differs from GAAP retained earnings. As of June 30, 2026 and December 31, 2025, the Bank had Statutory Retained Earnings of $240.1 million and $234.7 million, respectively.

Dividends are payable at the discretion of the Board of Directors and may be restricted by federal and Hawaii state laws, regulatory guidance from the FRB, and covenants set forth in various agreements we are a party to, including covenants set forth in our junior subordinated debentures. There is no assurance that dividends will continue at the current rate, or at all.

The Company repurchases shares of its common stock when it believes such repurchases are in the best interests of the Company.

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In January 2025, the Company’s Board of Directors authorized a share repurchase plan (the "2025 Repurchase Plan"), permitting the repurchase up to $30.0 million of the Company's common stock in open market or privately negotiated transactions. The 2025 Repurchase Plan replaced and superseded in its entirety the share repurchase plan previously approved by the Company's Board of Directors, which had $19.1 million in remaining repurchase authority.

In the year ended December 31, 2025, a total of 788,261 shares of common stock, at a cost of $23.3 million, were repurchased under the 2025 Repurchase Plan.

In January 2026, the Company's Board of Directors authorized a share repurchase plan (the "2026 Repurchase Plan"), permitting the repurchase of up to $55.0 million of the Company's common stock. Repurchases may be made from time to time in the open market or through privately negotiated transactions. The 2026 Repurchase Plan replaced and superseded in its entirety the 2025 Repurchase Plan previously approved by the Company’s Board of Directors, which had $6.7 million in remaining repurchase authority.

During the six months ended June 30, 2026, the Company repurchased 643,254 shares of common stock at an aggregate cost of $21.8 million under the 2026 Repurchase Plan. As of June 30, 2026, $33.2 million remained available for repurchase under the 2026 Repurchase Plan. There can be no assurance that share repurchases will continue at the current rate or at all.

The Company accounts for share repurchases under the cost method, recording the total cost of repurchased shares as a reduction of common stock until their future disposition is determined. These shares are held as authorized but unissued and may be reissued from time to time on such terms, prices, and conditions as determined by the Board of Directors.

In connection with the Company's recapitalization in 2011, the total number of authorized shares of common stock was increased to 185,000,000. From the completion of the Company’s 2011 recapitalization through June 30, 2026 and December 31, 2025, the Company has repurchased an aggregate of 18,165,760 and 17,522,506 shares, respectively.

10. 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. For more information about the Company's revenue-generating activities, refer to Note 12 - Revenue From Contracts with Customers included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.


	Three Months Ended June 30, 2026						Three Months Ended June 30, 2025
(dollars in thousands)	In-Scope		Out-of-Scope		Total		In-Scope		Out-of-Scope		Total
Other operating income:
Mortgage banking income	$	326	$	367	$	693	$	197	$	547	$	744
Service charges on deposit accounts	2,250		—		2,250		2,124		—		2,124
Other service charges and fees	5,760		570		6,330		5,311		646		5,957
Income from fiduciary activities	1,580		—		1,580		1,501		—		1,501
Income from bank-owned life insurance	—		2,999		2,999		—		2,260		2,260




Other	379		389		768		—		427		427
Total other operating income	$	10,295	$	4,325	$	14,620	$	9,133	$	3,880	$	13,013

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	Six Months Ended June 30, 2026						Six Months Ended June 30, 2025
(dollars in thousands)	In-Scope		Out-of-Scope		Total		In-Scope		Out-of-Scope		Total
Other operating income:
Mortgage banking income	$	550	$	792	$	1,342	$	439	$	902	$	1,341
Service charges on deposit accounts	4,549		—		4,549		4,271		—		4,271
Other service charges and fees	11,000		1,119		12,119		10,458		1,265		11,723
Income from fiduciary activities	3,003		—		3,003		3,125		—		3,125
Income from bank-owned life insurance	—		3,398		3,398		—		2,757		2,757




Other	1,112		671		1,783		—		892		892
Total other operating income	$	20,214	$	5,980	$	26,194	$	18,293	$	5,816	$	24,109

11. SHARE-BASED COMPENSATION

Restricted and Performance Stock Units

Under the Company's 2023 Stock Compensation Plan, restricted stock units ("RSUs") and performance stock units ("PSUs") were awarded to certain non-officer directors and management personnel. These awards typically vest over two-, three- or five-year periods from the grant date and are subject to forfeiture until performance and employment conditions are achieved.

Compensation expense is generally measured based on the fair value of the Company's stock on the grant date, and is recognized over the applicable vesting period.

The following table presents the activities of RSUs and PSUs for the six months ended June 30, 2026:


(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	289,154	$	24.27
Changes during the period:
Granted	117,319	30.36
Forfeited	(35,298)	24.63
Vested	(102,907)	22.89		$	3,537
Non-vested RSUs and PSUs, end of period	268,268	27.42

The following table presents the activities of RSUs and PSUs for the six months ended June 30, 2025:


(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	284,151	$	22.48
Changes during the period:
Granted	105,751	30.17
Forfeited	(1,763)	35.19
Vested	(101,865)	25.49		$	3,018
Non-vested RSUs and PSUs, end of period	286,274	24.18

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12. SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS

The Bank has a Supplemental Executive Retirement Plan ("SERP") which provides supplemental retirement benefits to former officers of the Company. The SERP holds no plan assets other than employer contributions that are paid as benefits during the year.

The projected benefit obligation of the unfunded SERP is recorded in other liabilities on the Company's consolidated balance sheets. As of June 30, 2026, the projected benefit obligation was $8.8 million, compared to $8.9 million as of December 31, 2025. The Company expects to pay approximately $0.6 million in benefit payments under the SERP in the next 12 months.

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


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2026		2025		2026		2025
Interest cost	$	107	$	114	$	214	$	228
Amortization of net actuarial gain	—		—		1		—



Net periodic benefit cost	$	107	$	114	$	215	$	228

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

13. OPERATING LEASES

The Company leases certain land and buildings for its bank branches and ATMs. Some leases include renewal options, which are evaluated and included in the measurement of right-of-use ("ROU") assets and lease liabilities when it is reasonably certain that the options will be exercised, in accordance with ASC 842, "Leases."

All leases are classified as operating leases. Several leases contain variable payments, primarily related to common area maintenance costs and Hawaii state tax rates.

The Company has elected the short-term exemption, for leases with terms of 12 months or less. Such leases are excluded from the calculation of the ROU assets and lease liabilities and are not included on the Company's balance sheets. The Company has also elected to account for lease and non-lease components as a single lease component for all classes of underlying assets.

The most significant assumption in applying ASC 842 is the discount rate. Because most lease agreements do not specify an implicit interest rate, the Company estimates the discount rate using the collateralized borrowing rate it would pay for a loan with a similar term.

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 June 30,						Six Months Ended June 30,
(dollars in thousands)	2026			2025			2026			2025
Lease cost:
Operating lease cost	$	1,259		$	1,336		$	2,519		$	2,643
Variable lease cost	1,132			643			1,426			1,262

Total lease cost	$	2,391		$	1,979		$	3,945		$	3,905

Other information:
Operating cash flows from operating leases	$	(1,262)		$	(1,279)		$	(2,494)		$	(2,559)
Weighted-average remaining lease term - operating leases	8.9 years			10.0 years			8.9 years			10.0 years
Weighted-average discount rate - operating leases	4.18		%	4.13		%	4.18		%	4.13		%

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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 June 30, 2026, for the remainder of fiscal year 2026, the next five succeeding fiscal years and all years thereafter:


(dollars in thousands)	Undiscounted Cash Flows		Lease Liability Expense		Lease Liabilities
Year Ending December 31,
2026 (remainder)	$	2,510	$	479	$	2,031
2027	4,257		843		3,414
2028	3,432		722		2,710
2029	3,016		619		2,397
2030	3,036		519		2,517
2031	2,683		420		2,263
Thereafter	10,166		1,435		8,731
Total	$	29,100	$	5,037	$	24,063

During the third quarter of 2025, as part of a strategic consolidation of the Company's Operations Center into its main headquarters, the Company terminated its lease for the Operations Center, which was originally scheduled to run through 2038. As a result of the lease termination, the Company recognized a reduction of the ROU asset of $4.7 million, a reduction of the ROU liability of $4.1 million, and a credit of $0.6 million to other operating expense.

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 June 30,				Six Months Ended June 30,
(dollars in thousands)	2026		2025		2026		2025
Total rental income recognized	$	414	$	481	$	780	$	949

The following table presents estimated lease payments, based on the Company's leases as lessor as of June 30, 2026, for the remainder of fiscal year 2026, the next five succeeding fiscal years, and all years thereafter:


(dollars in thousands)
Year Ending December 31,
2026 (remainder)	$	759
2027	1,402
2028	965
2029	806
2030	669
2031	578
Thereafter	691
Total	$	5,870

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14. 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 June 30, 2026
Net change in fair value of investment securities:
Net unrealized losses on AFS investment securities arising during the period	$	(3,243)	$	(862)	$	(2,381)

Less: Amortization of unrealized losses on investment securities transferred to HTM	1,687		446		1,241
Net change in fair value of investment securities	(1,556)		(416)		(1,140)

Net change in fair value of derivatives:
Net unrealized gains arising during the period	724		191		533

Net change in fair value of derivatives	724		191		533









Other comprehensive loss	$	(832)	$	(225)	$	(607)


(dollars in thousands)	Before Tax		Tax Effect		Net of Tax
Three Months Ended June 30, 2025
Net change in fair value of investment securities:
Net unrealized gains on AFS investment securities arising during the period	$	2,347	$	619	$	1,728

Less: Amortization of unrealized losses on investment securities transferred to HTM	1,773		468		1,305
Net change in fair value of investment securities	4,120		1,087		3,033

Net change in fair value of derivatives:
Net unrealized losses arising during the period	(1,529)		(403)		(1,126)











Other comprehensive income	$	2,591	$	684	$	1,907


(dollars in thousands)	Before Tax		Tax Effect		Net of Tax
Six Months Ended June 30, 2026
Net change in fair value of investment securities:
Net unrealized losses on AFS investment securities arising during the period	$	(5,877)	$	(1,578)	$	(4,299)

Less: Amortization of unrealized losses on investment securities transferred to HTM	3,217		833		2,384
Net change in fair value of investment securities	(2,660)		(745)		(1,915)

Net change in fair value of derivatives:
Net unrealized gains arising during the period	1,124		298		826



SERP:

Amortization of net actuarial gain	1		—		1



SERP	1		—		1

Other comprehensive loss	$	(1,535)	$	(447)	$	(1,088)

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(dollars in thousands)	Before Tax		Tax Effect		Net of Tax
Six Months Ended June 30, 2025
Net change in fair value of investment securities:
Net unrealized gains on AFS investment securities arising during the period	$	17,634	$	4,651	$	12,983

Less: Amortization of unrealized losses on investment securities transferred to HTM	3,325		877		2,448
Net change in fair value of investment securities	20,959		5,528		15,431

Net change in fair value of derivatives:
Net unrealized losses arising during the period	$	(3,622)	$	(955)	$	(2,667)











Other comprehensive income	$	17,337	$	4,573	$	12,764

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 June 30, 2026
Balance at beginning of period	$	(91,669)	$	3,533	$	387	$	(87,749)




Other comprehensive (loss) income before reclassifications	(2,381)		533		—		(1,848)
Reclassification adjustments from AOCI	1,241		—		—		1,241
Total other comprehensive (loss) income	(1,140)		533		—		(607)

Balance at end of period	$	(92,809)	$	4,066	$	387	$	(88,356)


(dollars in thousands)	Investment Securities		Derivatives		SERP		AOCI
Three Months Ended June 30, 2025
Balance at beginning of period	$	(109,093)	$	4,953	$	575	$	(103,565)





Other comprehensive income (loss) before reclassifications	1,728		(1,126)		—		602
Reclassification adjustments from AOCI	1,305		—		—		1,305
Total other comprehensive income (loss)	3,033		(1,126)		—		1,907

Balance at end of period	$	(106,060)	$	3,827	$	575	$	(101,658)


(dollars in thousands)	Investment Securities		Derivatives		SERP		AOCI
Six Months Ended June 30, 2026
Balance at beginning of period	$	(90,894)	$	3,240	$	386	$	(87,268)





Other comprehensive (loss) income before reclassifications	(4,299)		826		—		(3,473)
Reclassification adjustments from AOCI	2,384		—		1		2,385
Total other comprehensive (loss) income	(1,915)		826		1		(1,088)

Balance at end of period	$	(92,809)	$	4,066	$	387	$	(88,356)

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(dollars in thousands)	Investment Securities		Derivatives		SERP		AOCI
Six Months Ended June 30, 2025
Balance at beginning of period	$	(121,491)	$	6,494	$	575	$	(114,422)





Other comprehensive income (loss) before reclassifications	12,983		(2,667)		—		10,316
Reclassification adjustments from AOCI	2,448		—		—		2,448
Total other comprehensive income (loss)	15,431		(2,667)		—		12,764

Balance at end of period	$	(106,060)	$	3,827	$	575	$	(101,658)

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 June 30,
Details about AOCI Components	2026		2025





Amortization of unrealized losses on investment securities transferred to HTM:
Amortization	$	1,687	$	1,773	Interest and dividends on investment securities
Tax effect	(446)		(468)		Income tax benefit
Net of tax	1,241		1,305










Total reclassification adjustments from AOCI for the period, net of tax	$	1,241	$	1,305


	Amount Reclassified from AOCI				Affected Line Item in the Statement Where Net Income is Presented
(dollars in thousands)	Six Months Ended June 30,
Details about AOCI Components	2026		2025





Amortization of unrealized losses on investment securities transferred to HTM:
Amortization	$	3,217	$	3,325	Interest and dividends on investment securities
Tax effect	(833)		(877)		Income tax benefit
Net of tax	2,384		2,448

SERP:
Amortization of net actuarial gain	1		—		Other operating expense - other




Tax effect	—		—		Income tax expense
Net of tax	1		—

Total reclassification adjustments from AOCI for the period, net of tax	$	2,385	$	2,448

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15. 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 June 30,				Six Months Ended June 30,
(dollars in thousands, except per share data)	2026		2025		2026		2025
Net income	$	20,822	$	18,271	$	41,547	$	36,031

Weighted-average shares outstanding for basic earnings per share	25,999,122		26,988,169		26,137,665		27,037,388
Add: Dilutive effect of employee stock options and awards	110,119		81,508		123,587		102,581
Weighted-average shares outstanding for diluted earnings per share	26,109,241		27,069,677		26,261,252		27,139,969

Basic earnings per share	$	0.80	$	0.68	$	1.59	$	1.33
Diluted earnings per share	$	0.80	$	0.67	$	1.58	$	1.33

Anti-dilutive employee stock options and awards	1,963		5,623		410		3,040

16. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Disclosures about Fair Value of Financial Instruments

The following summarizes the methods and assumptions used to estimate the fair values of the Company's financial instruments:

Short-Term Financial Instruments

The carrying values of short-term financial instruments are considered to approximate fair values, as they are readily convertible to cash. These instruments include cash and due from financial institutions, interest-bearing deposits in other financial institutions, accrued interest receivable, most short-term FHLB advances and other short-term borrowings, and accrued interest payable.

Investment Securities

Fair values of investment securities are determined using market price quotations provided by third-party pricing services, which apply pricing models supported by current market data. Where quoted market prices are unavailable, fair values are based on comparable securities.

Loans

Fair values of loans are estimated using discounted cash flows models applied to portfolios of loans with similar financial characteristics including the type of loan, interest terms, and repayment history. Cash flows are discounted using estimated market rates that reflect credit and interest rate risks. These rates are derived from market data and borrower-specific information. The weighted average discount rate used in the valuation of loans was 6.85% as of June 30, 2026, and 6.33% as of December 31, 2025. Fair value measurements are based on the exit price notion, in accordance with ASU 2016-01.

Loans Held for Sale

Fair values 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.

Loans transferred from held-for-investment to held-for-sale are reported at fair value, net of estimated selling costs on the consolidated balance sheets.

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Mortgage Servicing Rights

MSRs are initially recorded at fair value determined by a discounted cash flow model prepared by a third-party service provider using market-based assumptions at origination. Subsequent impairment assessments are performed at each reporting period and use current market assumptions. Key assumptions include mortgage prepayment speeds, discount rates, servicing income, and costs. These inputs are subjective and require management judgment. Changes in assumptions are made to reflect evolving market trends and loan product types.

MSRs are classified as Level 3 assets in the fair value hierarchy due to significant unobservable inputs. The Company’s valuation techniques rely on discounted cash flow models reflecting expected cash flows, prepayment behavior, and cost structures. Fair value measurements and related assumptions are reviewed periodically and validated against market data and third-party valuations.

Deposit Liabilities

For deposits with no stated maturity, such as noninterest-bearing demand deposits and interest-bearing demand and savings accounts, fair value equals the carrying amount, representing the amount payable on demand.

For time deposits, fair value 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 4.04% as of June 30, 2026 and 3.81% as of December 31, 2025.

Long-Term Debt

Fair values of long-term debt are estimated by discounting scheduled cash flows over the contractual borrowing period using estimated market rates for similar borrowing arrangements. The weighted average discount rate used in the valuation of long-term debt was 6.09% as of June 30, 2026 and 6.12% as of December 31, 2025.

Derivatives

Fair values of derivative financial instruments are based on current market values, when available. If there are no relevant comparable values, fair values are based on pricing models using current assumptions for forward sale commitments, interest rate lock commitments, risk participation agreements, back-to-back swap agreements, and interest rate swaps.

Off-Balance Sheet Financial Instruments

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 of Fair Value Estimates

Fair value estimates are made at a specific point in time and are based on relevant market conditions and available 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 and assumptions 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 inherently subjective in nature and involve uncertainties and matters of significant judgment. Changes in assumptions could significantly impact the estimates.

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Fair value estimates are limited to existing on- and off-balance sheet financial instruments and do not include the estimated value of future business or non-financial assets and liabilities such as deferred tax assets and premises and equipment.


(dollars in thousands)					Fair Value Measurement Using
June 30, 2026	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)
Financial assets:
Cash and due from financial institutions	$	96,678	$	96,678	$	96,678	$	—	$	—
Interest-bearing deposits in other financial institutions	286,593		286,593		286,593		—		—
Investment securities	1,380,593		1,310,306		60,136		1,243,671		6,499
Loans held for sale	2,364		2,364		—		2,364		—
Loans	5,308,322		5,014,807		—		—		5,014,807
Mortgage servicing rights	8,364		11,467		—		—		11,467


Accrued interest receivable	23,419		23,419		616		4,747		18,056

Financial liabilities:
Deposits:
Noninterest-bearing demand	1,917,502		1,917,502		1,917,502		—		—
Interest-bearing demand and savings and money market	3,784,405		3,784,405		3,784,405		—		—
Time	993,847		987,696		—		—		987,696

Long-term debt	76,547		75,351		—		—		75,351
Accrued interest payable	6,044		6,044		80		—		5,964


(dollars in thousands)							Fair Value Measurement Using
June 30, 2026	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)
Off-balance sheet financial instruments:
Commitments to extend credit	$	1,350,744	$	—	$	1,105	$	—	$	1,105	$	—
Standby letters of credit and financial guarantees written	2,835		—		43		—		43		—

Derivatives:

Forward sale commitments	1,714		(5)		(5)		—		(5)		—
Risk participation agreements	51,986		—		—		—		—		—
Back-to-back swap agreements:
Assets	63,772		2,878		2,878		—		2,878		—
Liabilities	(63,772)		(2,878)		(2,878)		—		(2,878)		—
Interest rate swap agreements	114,580		5,242		5,242		—		5,242		—

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(dollars in thousands)					Fair Value Measurement Using
December 31, 2025	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)
Financial assets:
Cash and due from financial institutions	$	88,200	$	88,200	$	88,200	$	—	$	—
Interest-bearing deposits in other financial institutions	290,453		290,453		290,453		—		—
Investment securities	1,310,603		1,244,057		61,291		1,176,050		6,716
Loans held for sale	1,084		1,084		—		1,084		—
Loans	5,289,096		5,016,971		—		—		5,016,971
Mortgage servicing rights	8,672		11,301		—		—		11,301


Accrued interest receivable	23,559		23,559		651		4,075		18,833

Financial liabilities:
Deposits:
Noninterest-bearing demand	1,891,198		1,891,198		1,891,198		—		—
Interest-bearing demand and savings and money market	3,734,629		3,734,629		3,734,629		—		—
Time	983,937		978,868		—		—		978,868

Long-term debt	76,547		73,579		—		—		73,579
Accrued interest payable	7,068		7,068		102		—		6,966


(dollars in thousands)							Fair Value Measurement Using
December 31, 2025	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)
Off-balance sheet financial instruments:
Commitments to extend credit	$	1,337,099	$	—	$	1,063	$	—	$	1,063	$	—
Standby letters of credit and financial guarantees written	2,624		—		39		—		39		—

Derivatives:

Forward sale commitments	1,095		(4)		(4)		—		(4)		—
Risk participation agreements	52,435		(3)		(3)		—		(3)		—
Back-to-back swap agreements:
Assets	60,660		3,045		3,045		—		3,045		—
Liabilities	(60,660)		(3,045)		(3,045)		—		(3,045)		—
Interest rate swap agreements	114,580		4,163		4,163		—		4,163		—

Fair Value Measurements

The Company classifies its financial assets and liabilities measured at fair value into a three-level hierarchy, 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 — Fair value is based on 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 — Fair value is based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuation techniques for which all significant assumptions are observable in the market.

•Level 3 — Fair value is determined by using model-based techniques that rely on significant assumptions not observable in the market. These unobservable assumptions reflect the Company's own estimates of assumptions that market participants

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would use in pricing the asset or liability. Techniques may include the use of discounted cash flow models and other similar methods that require the use of significant judgment or estimation.

Fair value is measured based 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. The Company also prioritizes the use of observable inputs and minimizes reliance on unobservable inputs when developing fair value estimates.

Fair Value Hierarchy Transfers

During the six months ended June 30, 2026, the Company did not transfer any financial assets or liabilities to or from Level 3.

In 2025, the Company transferred its back-to-back swaps from Level 3 to Level 2 of the fair value hierarchy due to a change in valuation methodology.

Recurring and Nonrecurring Fair Value Measurements

The Company uses 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, the Company may be required to record other financial assets, such as loans held for sale, individually evaluated loans, mortgage servicing rights, and other real estate owned, at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically involve application of 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:


(dollars in thousands)			Fair Value at Reporting Date Using
June 30, 2026	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale securities:
Debt securities:
States and political subdivisions	$	115,818	$	—	$	109,980	$	5,838
Corporate securities	9,976				9,976		—
U.S. Treasury and other government-sponsored entities and agencies	95,082		60,136		34,946		—
Collateralized loan obligations	103,504		—		103,504		—
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	429,954		—		429,954		—
Residential - Non-government agencies	14,464		—		13,803		661
Commercial - U.S. government-sponsored entities and agencies	66,580		—		66,580		—


Total available-for-sale investment securities	835,378		60,136		768,743		6,499



Derivatives:

Forward sale commitments	(5)		—		(5)		—

Back-to-back swap agreements:
Assets	2,878		—		2,878		—
Liabilities	(2,878)		—		(2,878)		—
Interest rate swap agreements	5,242		—		5,242		—
Total derivatives	5,237		—		5,237		—
Total	$	840,615	$	60,136	$	773,980	$	6,499

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(dollars in thousands)			Fair Value at Reporting Date Using
December 31, 2025	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale securities:
Debt securities:
States and political subdivisions	$	117,041	$	—	$	110,993	$	6,048

U.S. Treasury and other government-sponsored entities and agencies	100,025		61,291		38,734		—
Collateralized loan obligations	40,827		—		40,827		—
Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	407,053		—		407,053		—
Residential - Non-government agencies	15,363		—		14,695		668
Commercial - U.S. government-sponsored entities and agencies	67,903		—		67,903		—


Total available-for-sale investment securities	748,212		61,291		680,205		6,716



Derivatives:

Forward sale commitments	(4)		—		(4)		—
Risk participation agreements	(3)		—		(3)		—
Back-to-back swap agreements:							—
Assets	3,045		—		3,045		—
Liabilities	(3,045)		—		(3,045)		—
Interest rate swap agreements	4,163		—		4,163		—
Total derivatives	4,156		—		4,156		—
Total	$	752,368	$	61,291	$	684,361	$	6,716

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		Total
Balance at December 31, 2025	$	6,048	$	668	$	6,716
Principal payments received	(134)		(12)		(146)
Unrealized net (loss) gain included in other comprehensive income	(76)		5		(71)

Balance at June 30, 2026	$	5,838	$	661	$	6,499

Balance at December 31, 2024	$	6,165	$	682	$	6,847
Principal payments received	(129)		(12)		(141)
Unrealized net gain (loss) included in other comprehensive income	65		1		66

Balance at June 30, 2025	$	6,101	$	671	$	6,772

The Company estimates the fair value of Level 3 financial assets and liabilities using a discounted cash flow model that calculates the present value of estimated future principal and interest payments. Based on this methodology, the estimated aggregate fair value of Level 3 financial assets and liabilities measured at fair value on a recurring basis was $6.5 million as of June 30, 2026, compared to $6.7 million as of December 31, 2025.

The weighted-average discount rate is the primary unobservable input used in the fair value measurement of the available-for-sale debt securities. The weighted average discount rate utilized was 6.21% as of June 30, 2026, 5.92% as of December 31, 2025, and 6.04% as of June 30, 2025. These discount rates were derived by incorporating a credit spread over the FHLB Fixed-

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Rate Advance curve. A significant increase in the weighted-average discount rate could result in a lower fair value, while a decrease could result in a higher fair value.

There were no financial assets or liabilities measured on a nonrecurring basis as of June 30, 2026 and December 31, 2025.

17. SEGMENT INFORMATION

The Company evaluated its operating segments in accordance with ASC 280, "Segment Reporting" and determined that it operates as one reportable segment: banking operations.

The Company provides a comprehensive range of financial services, including construction and real estate development lending, commercial lending, residential mortgage lending, consumer lending, trust services, retail brokerage services, and our retail branch offices. These services are aggregated into a single segment because there is no material difference in the products or services offered based on customer type or geographic location. All activities are closely aligned with the Company's core business of providing financial services and are subject to similar risks and returns. Additionally, no single customer accounts for more than 10% of total revenue, and all operations are domestic, located in the State of Hawaii.

The Company's Executive Committee, which is designated as the chief operating decision maker ("CODM"), evaluates performance and makes strategic decisions based on consolidated financial information. The CODM does not assess performance or allocate resources based on individual product lines or geographic regions. Instead, performance is evaluated holistically using consolidated metrics such as total revenue, net income, and risk management of the Company. Resources are allocated to support the Company's overall business strategy.

Revenue is primarily generated from loans, investments, and deposits, as presented in the Company's consolidated balance sheets. Significant expenses include interest expense, provisions for credit losses, and salaries and employee benefits, as reflected in the Company's consolidated statements of income. Segment performance is assessed using consolidated net income, with a primary focus on net interest income, rather than gross interest income and expense.

The accounting policies applied to the segment are consistent with those described in Note 1 - Summary of Significant Accounting Policies to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC.

18. CONTINGENT LIABILITIES AND OTHER COMMITMENTS

The Company and its subsidiaries are involved in legal proceedings arising in the ordinary course of business. The outcome and timing of resolution for these matters are inherently uncertain. However, based on information currently available and after consultation with legal counsel, management believes that the ultimate disposition of these matters will not have a material adverse effect on the Company's financial condition or results of operations.

In the normal course of business, the Company has contingent liabilities and other commitments, such as unused loan commitment, unused letters of credit and items held for collections, that are not reflected in the accompanying consolidated financial statements. Management does not anticipate any material losses arising from these off-balance sheet exposures. A reserve for off-balance sheet credit exposures is appropriately recorded in other liabilities on the Company's consolidated balance sheets.

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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, payment or nonpayment of dividends, net interest income, capital position, credit losses, 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 or 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," "aim," "seek," "expect," "intend," "forecast," "hope," "target," "continue," "remain," "estimate," "will," "should," "may," and other similar expressions are intended to identify forward-looking statements, although such terminology is not the exclusive means of doing so.

While we believe that our forward-looking statements and their underlying assumptions are reasonably based, such statements are inherently subject to risks and uncertainties that may cause actual results to differ materially from expectations. Factors that may lead to such differences include, but are not limited to:

•the persistence or resurgence of current inflationary pressures in the United States and our market areas, and their effect on market interest rates, economic conditions, and credit quality;

•the impact of the current U.S. administration's economic policies, including potential international tariffs, geopolitical instability, trade tensions, and other cost-cutting or fiscal initiatives;

•disruptions in the economy, including the effects of government shutdown(s) and supply chain disruptions;

•labor contract disputes, and potential strikes impacting both the U.S. National and Hawaii economies;

•adverse trends in the real estate or construction industries, including rising inventory levels or declining property values;

•deterioration in borrowers' financial performance leading to increased loan delinquencies, asset quality issues, or loan losses;

•the impact of local, national, and international economies and natural disasters (such as wildfires, volcanic eruptions, hurricanes, tsunamis, storms, floods, or earthquakes) on our markets and major industries within Hawaii;

•weakness in domestic economic conditions, including higher unemployment levels, instability in the financial industry, deterioration in the real estate markets, and declines in consumer or business confidence;

•revisions to estimates of reserve requirements under applicable regulatory and accounting standards;

•the adverse effects of bank failures on customer confidence, deposit behavior, liquidity, and regulatory responses;

•the adverse effects of pandemics, epidemics, and other public health emergencies, including their impact on Hawaii's tourism and construction sectors, and on our borrowers, customers, vendors, and employees;

•the impact of legislative and regulatory developments, changing capital and consumer protection rules, and new regulations affecting our operations and competitiveness

•the costs and effects of legal and regulatory proceedings, including actual or threatened litigation and the results of governmental and regulatory exams and orders, as well as the costs of ongoing or potential compliance efforts;

•the effect of accounting standard changes adopted by regulatory agencies, the Public Company Accounting Oversight Board ("PCAOB"), or the Financial Accounting Standards Board ("FASB"), and the cost and resources associated with implementation;

•changes in trade, tariff, monetary, or fiscal policies and laws, including actions by the Board of Governors of the Federal Reserve System

•increased competition among financial institutions, and other financial service providers;

•market volatility and monetary fluctuations;

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•declines in our market capitalization or changes in the price of the Company’s common stock;

•the effects and cost of acquisitions, dispositions, or strategic transactions we may make or evaluate;

•political instability, acts of war or terrorism, or other geopolitical conflicts;

•shifts in consumer spending, borrowings and savings behaviors;

•technological changes and developments;

•cybersecurity incidents, data privacy breaches, or fraud involving us or third-party vendors;

•deficiencies in our internal controls over financial reporting or disclosure controls and procedures, and our ability to remediate them;

•our ability to achieve efficiency ratio improvement goals;

•our ability to attract and retain key personnel;

•changes in our personnel, organization, compensation, and benefit plans;

•risks related to the United States fiscal debt, deficit and budget uncertainties; 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, respectively, and in particular, the discussion of "Risk Factors" set forth herein and therein. 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.

General

Central Pacific Financial Corp. ("CPF"), a Hawaii corporation and registered bank holding company under the Bank Holding Company Act of 1956, as amended (the "BHC Act"), was organized on February 1, 1982. CPF serves as the bank holding company for its principal subsidiary, Central Pacific Bank, which was incorporated in its present form in the State of Hawaii on March 16, 1982, following a holding company reorganization. The Bank's 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, including the Bank and other consolidated subsidiaries.

As of June 30, 2026, Central Pacific Bank operated 27 branches and 56 ATMs across the State of Hawaii, offering full-service community banking.

Central Pacific Bank was founded by World War II veterans who, despite returning home as war heroes, faced limited banking opportunities in Hawaii. In response, they established the Bank to serve individuals and small businesses that lacked access to financial services at the time. This legacy continues to guide our commitment to creating opportunities and servicing our community through exceptional customer service and tailored financial products that meet the evolving needs of our customers, including:

•Loans: The Company's loan portfolio includes commercial and industrial loans, commercial mortgages, and construction loans to small and medium-sized businesses, professionals, and real estate investors and developers. The Company also offers residential mortgages, home equity loans, and consumer loans to individuals. Lending activities represent a core source of interest income, which is a key driver of our overall revenue. The Company aims to maintain a strong and diversified loan portfolio, primarily in Hawaii, with selective expansion into mainland markets.

•Deposits: The Company offers a comprehensive suite of deposit products and services including checking, savings, and time deposit accounts, as well as cash management solutions and digital banking capabilities. The Company's extensive branch and ATM network across the State of Hawaii supports convenient access for its customers. The interest paid on

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deposits is a key component of interest expense, which significantly influences overall earnings. In addition, fees and service charges on deposit accounts, along with card interchange contribute meaningfully to other operating revenue.

•Wealth Management: The Company offers non-deposit investment products, annuities, investment management, trust custody, estate planning, and financial advisory services.

Our foundational principles are based on continuing to be a leading bank for small businesses, and a professional and reliable resource to meet Hawaii’s housing needs. To drive growth, diversify our balance sheet, and strengthen resilience, we also focus on markets and niche segments that differentiate our Bank, which includes strategic partnerships with financial institutions in Japan and Korea.

Basis of Presentation

This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying unaudited consolidated financial statements under "Part I, Item 1. Financial Statements." 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, 2025 filed with the U.S. Securities and Exchange Commission (the "SEC") on February 27, 2026, including the "Risk Factors" disclosed 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 management to make certain judgments, estimates and assumptions that affect reported amounts and disclosures. Actual results may differ from these estimates, and such differences could be material to the financial statements.

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

Management determined the allowance for credit losses ("ACL") on loans is a critical accounting policy as of June 30, 2026 and December 31, 2025. This policy requires significant judgment and involves inherent complexity. Additional information regarding this policy is provided in Note 1 - Summary of Significant Accounting Policies included in the accompanying notes to the consolidated financial statements, as well as in Note 1 and the section titled "Critical Accounting Policies and Use of Estimates" within Management's Discussion and Analysis of Financial Condition and Operating Results in the Company's 2025 Annual Report on Form 10-K.

Executive Overview

The Company reported net income of $20.8 million, or $0.80 per diluted share for the three months ended June 30, 2026, compared to net income of $18.3 million, or $0.67 per diluted share for the same period in 2025. Net income for the six months ended June 30, 2026 was $41.5 million, or $1.58 per diluted share, compared to net income of $36.0 million, or $1.33 per diluted share for the six months ended June 30, 2025.

During the three months ended June 30, 2026, the Company recorded a provision for credit losses of $4.4 million, compared to a provision of $5.0 million during the same period in 2025. During the six months ended June 30, 2026, the Company recorded a provision for credit losses of $6.7 million, compared to a provision of $9.2 million during the same period in 2025. The decreases in the provision were primarily driven by lower net charge-offs in the three and six months ended June 30, 2026, compared to the same periods in 2025.

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	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Return on average assets	1.12		%	1.00		%	1.12		%	0.98		%
Return on average shareholders’ equity	13.94			13.04			13.92			13.04

Basic earnings per share	$	0.80		$	0.68		$	1.59		$	1.33
Diluted earnings per share	0.80			0.67			1.58			1.33

Non-GAAP Financial Measures

To supplement its consolidated financial information, the Company utilizes certain non-GAAP financial measures. These measures are not intended to be considered in isolation or as a substitute for comparable GAAP results. The Company believes these non‑GAAP financial measures provide meaningful insight into its financial performance and position by excluding transactions that may be non‑recurring, non‑operational, or not indicative of ongoing results. These measures are used by management and investors to evaluate performance trends over time, support period‑to‑period comparisons, and assess historical results and future performance.

Non-GAAP financial measures may not be comparable to similarly entitled measures reported by other companies. The results for the three months ended June 30, 2026 were not materially impacted by items outside of the normal course of business.

Efficiency Ratio

A key measure of operating efficiency monitored by the Company is the efficiency ratio, which is derived from GAAP-based amounts. It is calculated by dividing total other operating expenses by total pre-provision revenue (defined as net interest income plus total other operating income). The Company believes that the efficiency ratio, a non-GAAP financial measure, provides a useful supplemental metric that enhances understanding of its business performance and operating efficiency. However, this ratio should not be viewed as a substitute for GAAP results and may not be comparable to similarly titled measures reported by other companies. The following table presents the Company's efficiency ratio for the periods presented:


	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2026			2025			2026			2025
Total other operating expense	$	46,180		$	43,946		$	89,846		$	86,018





Net interest income	$	62,834		$	59,796		$	124,192		$	117,495
Total other operating income	14,620			13,013			26,194			24,109
Total revenue	$	77,454		$	72,809		$	150,386		$	141,604

Efficiency ratio (non-GAAP)	59.62		%	60.36		%	59.74		%	60.75		%

The improvements in the efficiency ratio in the three and six months ended June 30, 2026, compared to the same periods in 2025, were primarily driven by higher net interest income and other operating income, which more than offset the increases in other operating expense.

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Tangible Common Equity Ratio

The tangible common equity ("TCE") ratio, a non-GAAP financial measure, is calculated by dividing tangible common equity by tangible assets. The following table presents the Company's TCE ratio and adjusted TCE ratio as of the dates presented:


(dollars in thousands)	June 30, 2026			December 31, 2025			June 30, 2025
Total equity	$	596,331		$	592,581		$	568,874
Less: Intangible assets	—			—			—
TCE	$	596,331		592,581			568,874



Total assets	$	7,501,060		$	7,409,241		$	7,369,567
Less: Intangible assets	—			—			—
Tangible assets	$	7,501,060		7,409,241			7,369,567



TCE ratio (non-GAAP)	7.95		%	8.00		%	7.72		%

Material Trends

Our operations are primarily concentrated in the State of Hawaii, making our performance highly sensitive to local economic, environmental, and industry-specific conditions — particularly those affecting real estate, tourism, and broader macroeconomic trends. A favorable business climate in Hawaii is typically characterized by expanding gross state product, low unemployment and rising personal income, while an unfavorable climate reflects the opposite.

Labor Market and Economic Indicators

The Hawaii State Department of Business, Economic Development and Tourism ("DBEDT") reported that Hawaii's seasonally adjusted unemployment rate was 2.6% in June 2026, slightly higher than 2.4% in March 2026 and well below the national seasonally adjusted unemployment rate of 4.2%. University of Hawaii Economic Research Organization ("UHERO") forecasts Hawaii's seasonally adjusted unemployment rate to remain relatively steady at 2.4% for the full year 2026.

The U.S. conflict with Iran impacted oil prices contributing to an increase in inflation which is projected to reach 4.8% mid-year and remain at higher levels through 2028. According to UHERO, Hawaii's Real GDP is expected to grow 1% this year but could soften depending on the impact of oil prices.

Construction remains strong with job growth ranging from 2% on Oahu to 6% on Maui County due to large federal contracts, the development of the $4 billion New Aloha Stadium Entertainment District ("NASED"), and rebuilding after the Maui wildfires.

Real Estate Market

Real estate lending, particularly residential and commercial mortgage loans, is a core focus of the Company. Consequently, our performance is closely tied to the health of Hawaii's real estate market. Despite mixed results, Hawaii's housing market remained resilient in the six months ended June 30, 2026. According to the Honolulu Board of Realtors, sales of Oahu single-family homes rose 8.5%, while Oahu condominium sales fell 9.4% for the six months ended June 30, 2026, compared to the same period in 2025. The median sale price of Oahu single-family homes stayed relatively flat at $1.2 million in the six months ended June 30, 2026, compared to the same period in 2025. The median sale price of Oahu condominiums increased by 4.0% to $520,000 in the six months ended June 30, 2026, compared to $500,000 in the same period in 2025.

Tourism Trends

According to preliminary data from the DBEDT, 4.18 million visitors arrived in the Hawaiian Islands during the five months ended May 31, 2026, an increase of 2.9% from 4.06 million visitors during the same period in 2025. Visitor arrivals from Japan

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are improving with a 8.6% increase year-over-year. Visitor spending totaled $9.67 billion in the five months ended May 31, 2026, up 6.2% from $9.11 billion in the same period in 2025.

While tourism has performed reasonably well through the start of the year, UHERO's May 2026 report anticipates tourism levels to soften through the rest of the year as jet fuel prices have roughly doubled, coupled with stagnant tourism from international markets, particularly in Japan with the depreciation of the yen. Tourism from international markets other than Japan face challenges with the deterioration in foreign attitudes toward U.S. domestic and foreign policy.

Interest Rate Environment

Changes in monetary policy, including interest rate adjustments, can significantly influence interest income on loans and investment securities, interest expense on deposits and borrowings, loan origination and deposit growth, and the fair value of assets and liabilities, among other areas.

In September 2025, the Federal Open Market Committee ("FOMC") implemented its first rate cut of 2025, reducing the target range by 25 basis points ("bps") to 4.00% to 4.25%. This decision was driven by signs of a weakening labor market and moderated economic growth, despite inflation remaining above the Fed’s 2% target. During the fourth quarter of 2025, the FOMC cut rates twice by 25 bps to a target rate of 3.50% to 3.75% at the end of 2025.

In July 2026, the FOMC maintained the target range for the federal funds rate at 3.50% - 3.75%, unchanged from the meetings earlier in the year. While economic activity continued to expand at a solid pace, inflation remained above the Federal Reserve's target and uncertainty surrounding the economic outlook, including the potential effects of developments in the Middle East conflict and global energy markets, supported the Committee's decision to keep rates unchanged.

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 six months ended June 30, 2026 and 2025 is presented below. Net interest margin is calculated as annualized net interest income, adjusted to a taxable-equivalent basis using a federal statutory tax rate of 21%, expressed as a percentage of average interest-earning assets.

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(dollars in thousands)	Three Months Ended June 30,
	2026						2025						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	$	253,598	3.69	%	$	2,331	$	134,270	4.43	%	$	1,484	$	119,328	(0.74)	%	$	847
Investment securities:
Taxable (1)	1,362,100		2.86		9,732		1,379,213		2.86		9,871		(17,113)		—		(139)
Tax-exempt (1) (2)	134,964		2.56		866		139,103		2.58		897		(4,139)		(0.02)		(31)
Total investment securities	1,497,064		2.83		10,598		1,518,316		2.84		10,768		(21,252)		(0.01)		(170)
Loans, including loans held for sale (3)	5,300,949		4.96		65,553		5,307,946		4.96		65,668		(6,997)		—		(115)
FRB and FHLB stock	24,720		6.28		389		24,565		6.33		388		155		(0.05)		1
Total interest earning assets	7,076,331		4.47		78,871		6,985,097		4.49		78,308		91,234		(0.02)		563
Noninterest-earning assets	357,491						329,047						28,444
Total assets	$	7,433,822					$	7,314,144					$	119,678

Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	1,442,933	0.21	%	$	757	$	1,357,049	0.13	%	$	443	$	85,884	0.08	%	$	314
Savings and money market deposits	2,367,169		1.28		7,554		2,275,799		1.48		8,414		91,370		(0.20)		(860)
Time deposits up to $250,000	428,642		2.14		2,290		439,738		2.32		2,546		(11,096)		(0.18)		(256)
Time deposits over $250,000	561,485		3.00		4,198		603,652		3.37		5,070		(42,167)		(0.37)		(872)
Total interest-bearing deposits	4,800,229		1.24		14,799		4,676,238		1.41		16,473		123,991		(0.17)		(1,674)


Long-term debt	76,547		5.53		1,056		131,431		5.65		1,851		(54,884)		(0.12)		(795)
Total interest-bearing liabilities	4,876,776		1.30		15,855		4,807,669		1.53		18,324		69,107		(0.23)		(2,469)
Noninterest-bearing deposits	1,830,681						1,827,225						3,456
Other liabilities	129,066						119,002						10,064
Total liabilities	6,836,523						6,753,896						82,627


Total equity	597,299						560,248						37,051
Total liabilities and equity	$	7,433,822					$	7,314,144					$	119,678

Net interest income (taxable-equivalent)					63,016						59,984						3,032
Taxable-equivalent adjustment (2)					(182)						(188)						6
Net interest income (GAAP)					$	62,834					$	59,796					$	3,038

Interest rate spread			3.17	%					2.96	%					0.21	%

Net interest margin (taxable-equivalent) (4)			3.57	%					3.44	%					0.13	%

(1) At amortized cost.
(2) Interest income and resultant yield information for tax-exempt investment securities is expressed on a taxable-equivalent basis using a federal statutory tax rate of 21%.
(3) Includes nonaccrual loans.
(4) Annualized net interest income and expense in the NIM calculation are based on the day count interest payment conventions at the interest-earning asset or interest-bearing liability level (i.e. 30/360, actual/actual, actual/360).

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(dollars in thousands)	Six Months Ended June 30,
	2026						2025						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	$	264,183	3.69	%	$	4,831	$	169,991	4.43	%	$	3,738	$	94,192	(0.74)	%	$	1,093
Investment securities:
Taxable (1)	1,340,531		2.83		18,942		1,377,957		2.86		19,672		(37,426)		(0.03)		(730)
Tax-exempt (1) (2)	135,240		2.55		1,729		139,345		2.57		1,794		(4,105)		(0.02)		(65)
Total investment securities	1,475,771		2.80		20,671		1,517,302		2.83		21,466		(41,531)		(0.03)		(795)
Loans, including loans held for sale (3)	5,284,805		4.94		129,876		5,309,768		4.92		129,787		(24,963)		0.02		89
FRB and FHLB stock	24,935		6.17		770		22,541		6.32		712		2,394		(0.15)		58
Total interest earning assets	7,049,694		4.45		156,148		7,019,602		4.46		155,703		30,092		(0.01)		445
Noninterest-earning assets	365,363						331,655						33,708
Total assets	$	7,415,057					$	7,351,257					$	63,800

Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	1,425,501	0.18	%	$	1,279	$	1,356,209	0.13	%	$	895	$	69,292	0.05	%	$	384
Savings and money market deposits	2,369,182		1.28		15,056		2,310,429		1.51		17,276		58,753		(0.23)		(2,220)
Time deposits up to $250,000	430,682		2.16		4,621		448,557		2.42		5,377		(17,875)		(0.26)		(756)
Time deposits over $250,000	559,589		3.07		8,532		603,785		3.46		10,346		(44,196)		(0.39)		(1,814)
Total interest-bearing deposits	4,784,954		1.24		29,488		4,718,980		1.45		33,894		65,974		(0.21)		(4,406)


Long-term debt	76,547		5.55		2,105		141,758		5.60		3,937		(65,211)		(0.05)		(1,832)
Total interest-bearing liabilities	4,861,501		1.31		31,593		4,860,738		1.57		37,831		763		(0.26)		(6,238)
Noninterest-bearing deposits	1,826,788						1,813,142						13,646
Other liabilities	129,855						124,767						5,088
Total liabilities	6,818,144						6,798,647						19,497


Total equity	596,913						552,610						44,303
Total liabilities and equity	$	7,415,057					$	7,351,257					$	63,800

Net interest income (taxable-equivalent)					124,555						117,872						6,683
Taxable-equivalent adjustment (2)					(363)						(377)						14
Net interest income (GAAP)					$	124,192					$	117,495					$	6,697

Interest rate spread			3.14	%					2.89	%					0.25	%

Net interest margin (taxable-equivalent) (4)			3.55	%					3.37	%					0.18	%

(1) At amortized cost.
(2) Includes taxable-equivalent adjustment using a federal statutory tax rate of 21%.
(3) Includes nonaccrual loans.
(4) Annualized net interest income and expense in the NIM calculation are based on the day count interest payment conventions at the interest-earning asset or interest-bearing liability level (i.e. 30/360, actual/actual, actual/360).

Net interest margin was 3.57% for the second quarter of 2026, an increase of 13 bps from 3.44% for the same quarter in 2025. Net interest margin was 3.55% for the six months ended June 30, 2026, an increase of 18 bps from 3.37% in the same period in 2025. The increase in net interest margin for the three and six months ended June 30, 2026 was primarily attributable to decreases in the average rates paid on interest-bearing deposits and long-term debt, partially offset by a decline in the average yield earned on interest-bearing deposits in other financial institutions and investment securities.

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Rate-Volume Analysis

For each category of interest-earning assets and interest-bearing liabilities, changes in interest income or expense are analyzed based on two factors: (i) changes in average balances (volume) and (ii) changes in weighted average interest rates (rate). The change in volume is calculated by multiplying the change in average balance by the prior period's average yield or rate. The change in rate is calculated by multiplying the change in average yield or rate by current period's average balance. Any residual change in interest income or expense not solely attributable to volume or rate is allocated proportionately between the two factors.


	Three Months Ended June 30, 2026 Compared To June 30, 2025				Six Months Ended June 30, 2026 Compared To June 30, 2025
	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	$	1,318	$	(471)	$	847	$	2,075	$	(982)	$	1,093
Investment securities:
Taxable (1)	(139)		—		(139)		(531)		(199)		(730)
Tax-exempt (1) (2)	(25)		(6)		(31)		(51)		(14)		(65)
Total investment securities	(164)		(6)		(170)		(582)		(213)		(795)
Loans, including loans held for sale (3)	(115)		—		(115)		(520)		609		89
FRB and FHLB stock	3		(2)		1		77		(19)		58
Total interest earning assets	1,042		(479)		563		1,050		(605)		445




Interest-bearing liabilities:
Interest-bearing demand deposits	28		286		314		43		341		384
Savings and money market deposits	335		(1,195)		(860)		453		(2,673)		(2,220)
Time deposits up to $250,000	(64)		(192)		(256)		(210)		(546)		(756)
Time deposits over $250,000	(354)		(518)		(872)		(748)		(1,066)		(1,814)
Total interest-bearing deposits	(55)		(1,619)		(1,674)		(462)		(3,944)		(4,406)


Long-term debt	(772)		(23)		(795)		(1,813)		(19)		(1,832)
Total interest-bearing liabilities	(827)		(1,642)		(2,469)		(2,275)		(3,963)		(6,238)

Net interest income (taxable-equivalent)	$	1,869	$	1,163	$	3,032	$	3,325	$	3,358	$	6,683

(1) At amortized cost.
(2) Interest income and resultant yield information for tax-exempt investment securities is expressed on a taxable-equivalent basis using a federal statutory tax rate of 21%.
(3) Includes nonaccrual loans.

Net interest income (expressed on a taxable-equivalent basis) was $63.0 million for the second quarter of 2026, an increase of $3.0 million, or 5.1% from $60.0 million for the same quarter of 2025. Net interest income (expressed on a taxable-equivalent basis) was $124.6 million for the six months ended June 30, 2026, an increase of $6.7 million or 5.7% from $117.9 million for the same period in 2025. The increases for the three and six month period ending June 30, 2026 were primarily driven by higher average balances on interest-bearing deposits in other institutions, combined with lower average rates paid on interest-bearing deposits which significantly reduced interest expense. These positive variances were partially offset by a decline in the average yield earned on interest-bearing deposits in other financial institutions and the average balance on investment securities which reduced interest income.

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Other Operating Income

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


	Three Months Ended June 30,
(dollars in thousands)	2026		2025		$ Change		% Change
Other operating income:
Mortgage banking income	$	693	$	744	$	(51)	-6.9	%
Service charges on deposit accounts	2,250		2,124		126		5.9
Other service charges and fees	6,330		5,957		373		6.3
Income from fiduciary activities	1,580		1,501		79		5.3
Income from bank-owned life insurance	2,999		2,260		739		32.7




Other:
Equity in earnings of unconsolidated entities	26		32		(6)		-18.8

Income recovered on previously charged-off loans	28		57		(29)		-50.9
Other recoveries	26		23		3		13.0
Unrealized gains on loans held for sale	4		3		1		33.3
Commissions on sale of checks	205		81		124		153.1


Other	479		231		248		107.4
Total other operating income	$	14,620	$	13,013	$	1,607	12.3

Total other operating income for the second quarter of 2026 was $14.6 million, which increased by $1.6 million, or 12.3%, from $13.0 million in same quarter in 2025. The increase was primarily due to increases of $0.7 million in income from bank-owned life insurance ("BOLI"), and $0.3 million in fee income generated from investment services (included in other service charges and fees). The Company has certain company-owned life insurance policies used to hedge market risks associated with its deferred compensation plans, which are tied to the equity markets, therefore, the Company has also recognized offsetting increases in deferred compensation expense in other operating expenses.


	Six Months Ended June 30,
(dollars in thousands)	2026		2025		$ Change		% Change
Other operating income:
Mortgage banking income	$	1,342	$	1,341	$	1	0.1	%
Service charges on deposit accounts	4,549		4,271		278		6.5
Other service charges and fees	12,119		11,723		396		3.4
Income from fiduciary activities	3,003		3,125		(122)		-3.9
Income from bank-owned life insurance	3,398		2,757		641		23.2




Other:
Equity in earnings of unconsolidated entities	39		33		6		18.2

Income recovered on previously charged-off loans	84		93		(9)		-9.7
Other recoveries	47		53		(6)		-11.3
Unrealized gains on loans held for sale	7		78		(71)		-91.0
Commissions on sale of checks	299		156		143		91.7


Other	1,307		479		828		172.9
Total other operating income	$	26,194	$	24,109	$	2,085	8.6

Total other operating income for the six months ended June 30, 2026 was $26.2 million, which increased by $2.1 million, or 8.6%, from $24.1 million for the same period in 2025. The increase was primarily due to increases of $0.7 million in debit card program extension consideration (included in other operating income-other), $0.6 million in income from BOLI due to favorable equity market performance, and $0.4 million in fee income generated from investment services.

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Other Operating Expense

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


	Three Months Ended June 30,
(dollars in thousands)	2026		2025		$ Change		% Change
Other operating expense:
Salaries and employee benefits	$	25,372	$	22,696	$	2,676	11.8	%
Net occupancy	4,299		4,253		46		1.1
Computer software	4,952		5,320		(368)		-6.9
Legal and professional services	2,607		2,873		(266)		-9.3
Equipment	822		950		(128)		-13.5
Advertising	762		832		(70)		-8.4
Communication	840		901		(61)		-6.8



Other:
SERP expense	107		114		(7)		-6.1
Foreclosed asset expense	1		—		1		N.M.
Charitable contributions	151		177		(26)		-14.7
FDIC insurance assessment	878		845		33		3.9
Miscellaneous loan expenses	291		351		(60)		-17.1
ATM and debit card expenses	806		838		(32)		-3.8
Armored car expenses	417		464		(47)		-10.1
Entertainment and promotions	423		530		(107)		-20.2
Stationery and supplies	302		208		94		45.2
Directors' fees and expenses	311		567		(256)		-45.1
Directors' deferred compensation plan expense	977		260		717		275.8









Other	1,862		1,767		95		5.4
Total other operating expense	$	46,180	$	43,946	$	2,234	5.1

Total other operating expense for the second quarter of 2026 was $46.2 million, which increased by $2.2 million, or 5.1%, from $43.9 million for the same quarter in 2025, primarily driven by higher salaries and employee benefits of $2.7 million due to higher deferred compensation expense and incentive accruals, and higher directors' deferred compensation plan expense.

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	Six Months Ended June 30,
(dollars in thousands)	2026		2025		$ Change		% Change
Other operating expense:
Salaries and employee benefits	$	48,457	$	44,515	$	3,942	8.9	%
Net occupancy	8,621		8,645		(24)		-0.3
Computer software	9,997		10,034		(37)		-0.4
Legal and professional services	4,991		5,671		(680)		-12.0
Equipment	1,629		2,032		(403)		-19.8
Advertising	1,759		1,719		40		2.3
Communication	1,663		1,934		(271)		-14.0



Other:
SERP expense	215		228		(13)		-5.7
Foreclosed asset expense	1		—		1		N.M.
Charitable contributions	425		323		102		31.6
FDIC insurance assessment	1,774		1,695		79		4.7
Miscellaneous loan expenses	608		649		(41)		-6.3
ATM and debit card expenses	1,547		1,694		(147)		-8.7
Armored car expenses	845		889		(44)		-4.9
Entertainment and promotions	991		834		157		18.8
Stationery and supplies	414		378		36		9.5
Directors' fees and expenses	622		868		(246)		-28.3
Directors' deferred compensation plan expense	1,105		(7)		1,112		-15,885.7









Other	4,182		3,917		265		6.8
Total other operating expense	$	89,846	$	86,018	$	3,828	4.5

Not meaningful ("N.M.")

Total other operating expense for the six months ended June 30, 2026 was $89.8 million, which increased by $3.8 million, or 4.5%, from $86.0 million for the same period in 2025. The increase was primarily driven by higher salaries and employee benefits of $3.9 million and higher directors deferred compensation plan expenses of $1.1 million. The increases were partially offset by decreases in legal and professional services of $0.7 million and equipment expenses of $0.4 million.

Income Taxes

The Company recorded income tax expense of $6.1 million for the second quarter of 2026, compared to $5.6 million for the same quarter in 2025. For the six months ended June 30, 2026, the Company recorded income tax expense of $12.3 million, compared to $10.4 million for the same period in 2025. The increases in income tax expense were primarily attributable to higher pre-tax income.

The effective tax rate ("ETR") for the second quarter of 2026 was 22.57%, compared to 23.48% for the same quarter in 2025. The decrease in the Company's effective tax rate was primarily attributable to an increase in tax-exempt income.

For the six months ended June 30, 2026, the ETR was 22.78%, compared to 22.39% for the same period in 2025.

The Company's net deferred tax asset ("DTA"), net of valuation allowance, totaled $24.8 million as of June 30, 2026, compared to $23.6 million as of December 31, 2025. These amounts were included in other assets on the Company's consolidated balance sheets.

The valuation allowance on the Company's net DTA totaled $3.4 million and $3.4 million as of June 30, 2026 and March 31, 2026, respectively. The valuation allowance on our net DTA relates to net apportioned net operating loss ("NOL") carryforwards for California state income tax purposes as the state has suspended the use of NOL carryforwards for the tax years 2024 through 2026.

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Financial Condition

Total assets were $7.50 billion as of June 30, 2026, an increase of $91.8 million, or 1.2%, from $7.41 billion as of December 31, 2025. The increase was primarily driven by increases in investment securities and loans.

Investment Securities

Investment securities totaled $1.38 billion as of June 30, 2026, an increase of $70.0 million, or 5.3%, from $1.31 billion as of December 31, 2025. The increase in the investment securities portfolio reflected purchases of $125.1 million, and amortization of unrecognized losses on investment securities transferred to HTM of $3.2 million, partially offset by principal runoff and net accretion of discount totaling $52.4 million, and a $5.9 million decrease in the market valuation of the AFS portfolio.

The average taxable-equivalent yield earned on investment securities was 2.83% in the second quarter of 2026, compared to 2.84% in the same quarter in 2025. For the six months ended June 30, 2026, the average taxable-equivalent yield earned on investment securities was 2.80%, compared to 2.83% in the same period in 2025. The decreases in average yields earned on investment securities was primarily due to lower income recorded from the Company’s interest rate swap.

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Loans

The Company strategically supplements its Hawaii loan portfolio by selectively pursuing commercial, construction, commercial real estate, and consumer loan opportunities on the U.S. Mainland. This approach supports growth, enhances geographic, asset class and rate type diversification, generally provides higher yields, while maintaining the Company's disciplined credit standards and underwriting practices.

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


(dollars in thousands)	June 30, 2026		December 31, 2025
Commercial and industrial:


Hawaii	$	462,398	$	453,619


U.S. Mainland	128,006		140,973


Total commercial and industrial	590,404		594,592
Construction:
Hawaii	115,469		153,392
U.S. Mainland	95,538		59,799
Total construction	211,007		213,191
Residential mortgage:
Hawaii	1,815,342		1,839,191

Total residential mortgage	1,815,342		1,839,191
Home equity:
Hawaii	577,283		600,082

Total home equity	577,283		600,082
Commercial mortgage:
Hawaii	1,210,573		1,202,078
U.S. Mainland	475,788		392,355
Total commercial mortgage	1,686,361		1,594,433
Consumer:
Hawaii	208,631		219,573
U.S. Mainland	219,294		228,034
Total consumer	427,925		447,607




Loans, net of deferred fees and costs:
Hawaii (1)	4,389,696		4,467,935
U.S. Mainland (2)	918,626		821,161
Total loans, net of deferred fees and costs	$	5,308,322	$	5,289,096

(1) Hawaii loans include Guam loans, which represent less than one percent of total Hawaii loans.

(2) For secured loans, classification as U.S. Mainland is made based on where the collateral is located. For unsecured loans, classification as U.S. Mainland is made based on the location of the borrower.

Loans, net of deferred costs, totaled $5.31 billion as of June 30, 2026, an increase of $19.2 million, or 0.4%, from $5.29 billion as of December 31, 2025. The increase was primarily driven by an increase in commercial mortgage loans of $91.9 million, partially offset by decreases in residential mortgage loans of $23.8 million, home equity loans of $22.8 million, consumer loans of $19.7 million, commercial and industrial loans of $4.2 million, and construction loans of $2.2 million.

The Hawaii loan portfolio decreased by $78.2 million, or 1.8%, from December 31, 2025. The decrease was primarily due to decreases in construction loans of $37.9 million, residential mortgage loans of $23.8 million, home equity loans of $22.8

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million, consumer of $10.9 million. These decreases were partially offset by increases in commercial and industrial loans of $8.8 million, and commercial mortgage loans of $8.5 million.

The U.S. Mainland loan portfolio increased by $97.5 million, or 11.9%, from December 31, 2025. The increase was primarily driven by increases in commercial mortgage loans of $83.4 million and construction loans of $35.7 million, partially offset by decreases in commercial and industrial loans of $13.0 million and consumer loans of $8.7 million. During the six months ended June 30, 2026, the Company purchased $39.3 million in U.S. Mainland consumer automobile loans, which were largely offset by portfolio runoff.

The average yield earned on loans was 4.96% in the second quarter of 2026, relatively consistent from the same quarter in 2025. For the six months ended June 30, 2026, the average yield earned on loans was 4.94%, compared to 4.92% in the same period in 2025. The increase in the average yield earned in the six months ended June 30, 2026 was primarily due to higher new production loan yields compared to run-off yields.

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Maturity Distribution and Sensitivities of Loans to Changes in Interest Rates

The following table sets forth the maturity distribution and sensitivities of the loan portfolio to changes in interest rates at June 30, 2026. Maturities are based on contractual maturity dates and do not factor in principal amortization.


	Maturing
(dollars in thousands)	One Year or Less		Over One Through Five Years		Over Five Through Fifteen Years		Over Fifteen Years		Total		Percentage










Commercial and industrial:
With fixed interest rates	$	7,569	$	153,836	$	96,638	$	—	$	258,043	43.7	%
With variable interest rates	30,105		201,845		39,782		60,629		332,361		56.3	%
Total commercial and industrial	37,674		355,681		136,420		60,629		590,404		100.0	%

Construction:
With fixed interest rates	1,371		33,299		20,921		—		$	55,591	26.3	%
With variable interest rates	65,831		54,927		31,968		2,690		155,416		73.7	%
Total construction	67,202		88,226		52,889		2,690		211,007		100.0	%

Residential mortgage:
With fixed interest rates	217		9,556		213,030		1,252,456		$	1,475,259	81.3	%
With variable interest rates	4		1,023		16,815		322,241		340,083		18.7	%
Total residential mortgage	221		10,579		229,845		1,574,697		1,815,342		100.0	%

Home equity:
With fixed interest rates	6,594		7,125		27,602		29,484		$	70,805	12.3	%
With variable interest rates	3,869		3,490		13,837		485,282		506,478		87.7	%
Total home equity	10,463		10,615		41,439		514,766		577,283		100.0	%

Commercial mortgage:
With fixed interest rates	71,401		339,328		340,122		—		$	750,851	44.5	%
With variable interest rates	199,368		484,890		251,252		—		935,510		55.5	%
Total commercial mortgage	270,769		824,218		591,374		—		1,686,361		100.0	%

Consumer:
With fixed interest rates	15,156		229,485		83,257		61,647		$	389,545	91.0	%
With variable interest rates	7,434		3,664		—		27,282		38,380		9.0	%
Total consumer	22,590		233,149		83,257		88,929		427,925		100.0	%






Total loans	$	408,919	$	1,522,468	$	1,135,224	$	2,241,711	$	5,308,322

Loans:
With fixed interest rates	$	102,308	$	772,629	$	781,570	$	1,343,587	$	3,000,094	56.5	%
With variable interest rates	306,611		749,839		353,654		898,124		2,308,228		43.5	%
Total loans	$	408,919	$	1,522,468	$	1,135,224	$	2,241,711	$	5,308,322	100.0	%

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Nonperforming Assets and Accruing Loans 90 Days or More Past Due

The following table presents nonperforming assets ("NPAs") and accruing loans 90 days or more past due as of the dates presented:


(dollars in thousands)	June 30, 2026			December 31, 2025			$ Change		% Change
Nonperforming Assets
Nonaccrual loans:



Commercial and industrial	$	192		$	591		$	(399)	(67.5)	%


Residential mortgage	9,268			10,572			(1,304)		(12.3)
Home equity	5,619			2,608			3,011		115.5

Consumer	543			615			(72)		(11.7)

Total nonaccrual loans	15,622			14,386			1,236		8.6

Other real estate owned ("OREO"):






Residential mortgage	924			—			924		N.M.




Total OREO	924			—			924		N.M.
Total NPAs	16,546			14,386			2,160		15.0

Accruing Loans 90 Days or More Past Due






Residential mortgage	—			664			(664)		(100.0)
Home equity	—			485			(485)		(100.0)

Consumer	286			403			(117)		(29.0)

Total accruing loans 90 days or more past due	286			1,552			(1,266)		(81.6)

Total NPAs and accruing loans 90 days or more past due	$	16,832		$	15,938		$	894	5.6

Ratio of nonaccrual loans to total loans	0.29		%	0.27		%			0.02	%
Ratio of NPAs to total assets	0.22		%	0.19		%			0.03	%

Ratio of NPAs and accruing loans 90 days or more past due to total loans and OREO	0.32		%	0.30		%			0.02	%


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, 2025	$	14,386
Additions	6,296
Reductions:
Payments	(1,066)
Return to accrual status	(899)

Charge-offs, valuation adjustments and other reductions	(2,171)
Total reductions	(4,136)

Balance at June 30, 2026	$	16,546

Nonperforming assets totaled $16.5 million, or 0.22% of total assets as of June 30, 2026, compared to $14.4 million, or 0.19% of total assets as of December 31, 2025.

Criticized loans increased by $52.8 million from December 31, 2025 to $124.0 million, or 2.3% of total loans, as of June 30, 2026. Within criticized loans, special mention loans increased by $5.5 million to $9.1 million, or 0.2% of total loans and classified loans increased by $47.3 million to $114.9 million, or 2.2% of total loans. The increase in criticized loans during the six months ended June 30, 2026 was primarily driven by the downgrades of two commercial lending relationships due to

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borrower-specific factors. The relationships consisted of loans with aggregate outstanding balances of $24.6 million and $23.4 million, respectively. The increase was attributable to the unique circumstances of these borrowers and we believe was not reflective of broad-based deterioration in overall portfolio credit quality. The loans within these relationships remain well-collateralized, and management continues to closely monitor the credits and related collateral values.

The Company's ratio of classified assets and other real estate owned to Tier 1 capital plus the ACL was 14.57% as of June 30, 2026, which increased from 8.56% as of December 31, 2025.

Allowance for Credit Losses

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


	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2026			2025			2026			2025
Allowance for Credit Losses ("ACL") on Loans:
Balance at beginning of period	$	59,933		$	60,469		$	59,621		$	59,182



Provision for credit losses on loans	3,304			3,810			6,028			7,715

Charge-offs:



Commercial and industrial	(1,353)			(2,858)			(2,409)			(3,438)


Residential mortgage	(23)			—			(23)			—


Consumer	(2,283)			(2,864)			(4,584)			(5,841)

Total charge-offs	(3,659)			(5,722)			(7,016)			(9,279)

Recoveries:



Commercial and industrial	198			195			373			366

Construction	—			3			2			3
Residential mortgage	10			7			18			17
Home equity	6			9			12			12

Consumer	789			840			1,543			1,595

Total recoveries	1,003			1,054			1,948			1,993
Net charge-offs	(2,656)			(4,668)			(5,068)			(7,286)


Balance at end of period	$	60,581		$	59,611		$	60,581		$	59,611

Average loans, net of deferred fees and costs	$	5,300,949		$	5,307,946		$	5,284,805		$	5,309,768
Ratio of annualized net charge-offs to average loans	0.20		%	0.35		%	0.19		%	0.27		%
Ratio of ACL to total loans	1.14		%	1.13		%	1.14		%	1.13		%

Ratio of ACL to nonaccrual loans	388		%	400		%	388		%	400		%

The ACL as a percentage of total loans was 1.14% as of June 30, 2026, compared to 1.13% as of December 31, 2025 and 1.13% as of June 30, 2025.

The following table presents the allocation of the ACL by loan class as of the dates indicated. The Company applies specific allocations to individually evaluated loans and general allocations to loan classes based on management's assessment of credit risk and estimated loss rates.

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	June 30, 2026						December 31, 2025
(dollars in thousands)	ACL on Loans		% of ACL by Loan Class		Loan Class as a % of Total Loans		ACL on Loans		% of ACL by Loan Class		Loan Class as a % of Total Loans



Commercial and industrial	$	8,165	13.5	%	11.1	%	$	7,982	13.4	%	11.2	%

Construction	4,319		7.1		4.0		3,815		6.4		4.0
Residential mortgage	13,092		21.6		34.1		14,219		23.8		34.9
Home equity	1,075		1.8		10.9		1,242		2.1		11.3
Commercial mortgage	21,353		35.2		31.8		19,544		32.8		30.1
Consumer	12,577		20.8		8.1		12,819		21.5		8.5

Total	$	60,581	100.0	%	100.0	%	$	59,621	100.0	%	100.0	%

The following table presents the ratio of annualized net charge-offs (recoveries) by loan class to average loans for the periods presented:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025



Commercial and industrial	0.09	%	0.20	%	0.08	%	0.12	%





Consumer	0.11		0.15		0.11		0.15

Total	0.20	%	0.35	%	0.19	%	0.27	%

Deposits

The Company's deposit portfolio is well-diversified and reflects a long-standing commitment to relationship-based banking. As of June 30, 2026, approximately 54% of deposit customers have maintained accounts with the Bank for over 10 years, underscoring the stability and loyalty of the customer base.

While the Company's deposit-gathering efforts are primarily focused in Hawaii, its strategy also extends beyond local markets. Through strategic partnerships with financial institutions in Japan and Korea, the Bank continues to attract U.S. dollar deposits from international sources. These relationships support deposit growth and diversification while aligning with the Company's prudent risk management practices.

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


(dollars in thousands)	June 30, 2026		December 31, 2025		$ Change		% Change
Noninterest-bearing demand deposits	$	1,917,502	$	1,891,198	$	26,304	1.4	%
Interest-bearing demand deposits	1,407,574		1,388,107		19,467		1.4
Savings and money market deposits	2,376,831		2,346,522		30,309		1.3
Time deposits up to $250,000	421,811		433,629		(11,818)		(2.7)
Core deposits	6,123,718		6,059,456		64,262		1.1
Other time deposits greater than $250,000	441,059		412,188		28,871		7.0
Government time deposits	130,977		138,120		(7,143)		(5.2)

Total time deposits greater than $250,000	572,036		550,308		21,728		3.9
Total deposits	$	6,695,754	$	6,609,764	$	85,990	1.3

Total deposits were $6.70 billion as of June 30, 2026, an increase of $86.0 million, or 1.3%, from $6.61 billion as of December 31, 2025. The Company did not hold any wholesale, brokered, or listing service deposits as of June 30, 2026.

Core deposits, which we define as demand deposits, savings and money market deposits, and time deposits up to $250,000, totaled $6.12 billion as of June 30, 2026, an increase of $64.3 million, from $6.06 billion as of December 31, 2025. Core deposits represented 91.5% of total deposits as of June 30, 2026, compared to 91.7% as of December 31, 2025.

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The average cost of total deposits was 90 bps in the second quarter of 2026, compared to 102 bps in the same quarter in 2025. For the six months ended June 30, 2026, the average cost of total deposits was 90 bps, compared to 105 bps in the same period in 2025.

All deposits are insured up to applicable limits by the Deposit Insurance Fund of the FDIC. Estimated uninsured deposits totaled $2.83 billion, or 42% of total deposits, as reported in the Company's Federal Financial Institutions Examination Council ("FFIEC") Call Report as of June 30, 2026, compared to $2.78 billion, or 42% of total deposits as of December 31, 2025.

Fully collateralized deposits totaled approximately $282.0 million as of June 30, 2026, compared to $281.0 million as of December 31, 2025. Excluding fully collateralized deposits, estimated uninsured deposits totaled $2.54 billion, or 38% of total deposits as of June 30, 2026, compared to $2.49 billion, or 38% of total deposits as of December 31, 2025.

The following table presents the remaining maturity of time deposits in excess of the FDIC insurance limit of $250,000 as of June 30, 2026:


(dollars in thousands)	June 30, 2026
Remaining maturity:
Three months or less	$	355,464
Over three through twelve months	212,225
Over one year through three years	4,347

Total	$	572,036

Capital Resources

The Company conducts ongoing assessments of its capital adequacy, evaluating projected sources and uses of capital in conjunction with the size and quality of its assets, anticipated business performance, changes in monetary and fiscal policy, and regulatory capital requirements. As part of this process, the Board of Directors regularly reviews the Company's capital position—including the call and maturity dates of existing capital instruments—to determine whether additional capital should be raised (via debt or equity) or whether capital may be returned to shareholders through dividends and/or share repurchases.

Common Equity

Total shareholders' equity was $596.3 million as of June 30, 2026, compared to $592.6 million as of December 31, 2025. The change in total shareholders' equity was primarily attributable to net income of $41.5 million for the six months ended June 30, 2026, partially offset by the repurchase of $21.8 million in common stock under the Company's stock repurchase program, cash dividends paid of $15.1 million, and other comprehensive loss of $1.1 million.

The ratio of total shareholders' equity to total assets was 7.95% as of June 30, 2026, compared to 8.00% as of December 31, 2025. Book value per share was $23.11 as of June 30, 2026, compared to $22.47 as of December 31, 2025.

Holding Company Capital Resources

Under the Dodd-Frank Act, CPF is required to serve as a source of financial strength to the Bank. CPF is responsible for meeting its own obligations, including payments on its junior subordinated debentures that fund trust preferred securities.

CPF relies on dividends from the Bank to meet its obligations. On a stand-alone basis, CPF had an available cash balance of $5.9 million as of June 30, 2026, compared to $5.5 million as of December 31, 2025.

As a Hawaii state-chartered bank, the Bank may only pay dividends to the extent it has Statutory Retained Earnings, as defined under Hawaii banking law, which differs from GAAP retained earnings. The Bank had Statutory Retained Earnings of $240.1 million as of June 30, 2026, compared to $234.7 million as of December 31, 2025.

Dividends are subject to the discretion of the Board of Directors and may be restricted by federal and Hawaii state laws, regulatory guidance from the FRB, and covenants set forth in various agreements the Company is a party to, including covenants set forth in our junior subordinated debentures. There can be no assurance that dividends will continue at the current rate or at all.

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Share Repurchases

On January 27, 2026, the Company's Board of Directors authorized a share repurchase plan (the "2026 Repurchase Plan"), permitting the repurchase of up to $55.0 million of the Company's common stock. Repurchases may be made from time to time in the open market or through privately negotiated transactions. The 2026 Repurchase Plan replaced and superseded in its entirety the share repurchase program previously approved by the Company's Board of Directors.

During the six months ended June 30, 2026, the Company repurchased 643,254 shares of common stock at an aggregate cost of $21.8 million under the 2026 Repurchase Plan. As of June 30, 2026, $33.2 million remained available for repurchase under the plan. There can be no assurance that share repurchases will continue at the current rate or at all.

Trust Preferred Securities

As of June 30, 2026, the Company maintained two statutory trusts, CPB Capital Trust IV ("Trust IV") and CPB Statutory Trust V ("Trust V"), which issued a combined $50.0 million in floating rate trust preferred securities. These securities, along with the underlying junior subordinated debentures and the common securities issued by the trusts, are redeemable in whole or in part on any interest payment date for Trust IV and V, or at any time in whole but not in part within 90 days following the occurrence of certain events.

The Company provides a full and unconditional guarantee of each trust's obligations related to its trust preferred securities. Subject to certain exceptions and limitations, the Company may defer interest payments on the subordinated debentures for up to 20 consecutive quarters without default or penalty. As of June 30, 2026, the Company was current on all required interest payments and had not exercised its right to defer interest payments on the subordinated debentures.

Regulatory Capital Ratios

The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. These requirements include both quantitative measures, based on assets, liabilities, and certain off-balance-sheet exposures calculated under regulatory accounting principles, and qualitative assessments by regulators. For banks, capital adequacy is also governed by prompt corrective action regulations. Failure to meet minimum capital requirements may result in regulatory enforcement actions.

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.

For a further discussion of regulatory 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" section of the Company's 2025 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. As of June 30, 2026 and December 31, 2025, the leverage capital, tier 1 risk-based capital, total risk-based capital, and CET1 risk-based capital ratios for both the Company and the Bank exceeded the thresholds required for a "well-capitalized" designation under applicable regulations.

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	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.
June 30, 2026
Leverage capital	$	734,382	9.7	%	$	302,860	4.0	%	N/A		N/A
CET1 risk-based capital	684,382		12.7		243,311		4.5		N/A		N/A
Tier 1 risk-based capital	734,382		13.6		324,415		6.0		N/A		N/A
Total risk-based capital	801,111		14.8		432,553		8.0		N/A		N/A


December 31, 2025
Leverage capital	$	729,850	9.8	%	$	297,858	4.0	%	N/A		N/A
CET1 risk-based capital	679,850		12.7		241,149		4.5		N/A		N/A
Tier 1 risk-based capital	729,850		13.6		321,531		6.0		N/A		N/A
Total risk-based capital	794,911		14.8		428,708		8.0		N/A		N/A


Central Pacific Bank
June 30, 2026
Leverage capital	$	726,101	9.6	%	$	302,611	4.0	%	$	378,264	5.0	%
CET1 risk-based capital	726,101		13.4		243,043		4.5		351,063		6.5
Tier 1 risk-based capital	726,101		13.4		324,058		6.0		432,077		8.0
Total risk-based capital	792,830		14.7		432,077		8.0		540,096		10.0


December 31, 2025
Leverage capital	$	720,980	9.7	%	$	297,503	4.0	%	$	371,879	5.0	%
CET1 risk-based capital	720,980		13.5		240,630		4.5		347,577		6.5
Tier 1 risk-based capital	720,980		13.5		320,840		6.0		427,787		8.0
Total risk-based capital	786,041		14.7		427,787		8.0		534,734		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. As of June 30, 2026 and December 31, 2025, the Company and the Bank's risk-based capital exceeded the required CCB.

Market Risk

Market risk represents the potential for loss in financial instruments arising from adverse changes in market rates and prices, including interest rates, foreign exchange rates, commodity prices, and equity prices. The Company's primary market risk exposure is interest rate risk, which arises when rate-sensitive assets and rate-sensitive liabilities mature or reprice during different periods or in differing amounts.

Asset/Liability Management and Interest Rate Risk

The Company's earnings and capital are sensitive to interest rate fluctuations. Interest rate risk is inherent in the Company's core activities, including loan origination, deposit gathering, investment portfolio management, and other interest-bearing funding sources. Asset/liability management seeks to align the maturities and repricing characteristics of rate-sensitive assets and liabilities to achieve financial objectives while managing risk.

The Company's Asset/Liability Management Policy is designed to optimize the risk-adjusted return to shareholders while maintaining consistently acceptable levels of liquidity, interest rate risk and capital adequacy. The Asset/Liability Management Committee ("ALCO") oversees interest rate risk utilizing a detailed and dynamic earnings and capital simulation model that evaluates earnings and capital under various interest rate scenarios and balance sheet forecasts.

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Earnings sensitivity is typically measured by estimated changes in net interest income ("NII") under different rate scenarios. Capital sensitivity is typically 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. Adverse interest rate risk exposures are managed through the shortening or lengthening of the duration of assets and liabilities.

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 over time, as well as against other financial institutions, but are not intended to represent management's forecast. 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 presents the Company's 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. 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. The results indicate that the Company's balance sheet is relatively well-positioned against movements in interest rates and remains within ALCO Policy risk limits that have been approved by the Board of Directors.


	June 30, 2026				December 31, 2025
	Estimated Net Interest Income Sensitivity				Estimated Net Interest Income Sensitivity
Rate Change	Gradual		Instantaneous		Gradual		Instantaneous
+300 bps	3.53	%	5.64	%	2.58	%	4.33	%
+200 bps	2.40	%	3.81	%	1.60	%	2.93	%
+100 bps	1.27	%	1.93	%	0.60	%	1.49	%
-100 bps	(0.43)	%	(1.58)	%	(0.83)	%	(1.06)	%
-200 bps	(1.25)	%	(3.36)	%	(1.54)	%	(2.57)	%
-300 bps	(2.24)	%	(6.26)	%	(2.35)	%	(4.51)	%

Liquidity and Borrowing Arrangements

The Company's objective in managing liquidity is to maintain a prudent balance between sources and uses of funds in order to economically meet the cash requirements of customers for loans and deposit withdrawals, while also supporting lending and investment opportunities as they arise. Liquidity is monitored daily in relation to changes in loan and deposit balances to ensure optimal utilization, maintenance of adequate levels of readily marketable assets, and access to reliable short-term funding sources.

To support this objective, the Company performs regular liquidity stress testing under a range of scenarios to evaluate its ability to withstand potential liquidity stress events. Forecasts of Company cash flows are updated and analyzed periodically, and more frequently during periods of elevated liquidity risk.

Historically, core deposits have provided us a stable and low-cost funding base, although they remain subject to competitive pressures in the Company's market. A significant portion of deposits are granular, long-tenured, and relationship-based. In

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addition to core deposits, the Company also has access to a variety of other short-term and long-term funding sources, including proceeds from maturities of our loans and investment securities, as well as secondary funding sources available to meet our liquidity needs, such as the FHLB, secured repurchase agreements, and the Federal Reserve discount window.

As of June 30, 2026, the Company had $383.3 million in cash on its balance sheet and approximately $2.70 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities. 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, 2025. There have been no material changes in our cash requirements from known contractual and other obligations since December 31, 2025.

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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 reporting period, and in accordance with 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 design and effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on this 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 were 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) during the period covered by this report that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note 18 - Contingent Liabilities and Other Commitments to the consolidated financial statements in Part I of this Form 10-Q, incorporated herein by reference.

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, 2025, as filed with the SEC on February 27, 2026.

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

Issuer Purchases of Equity Securities

During the three months ended June 30, 2026, the Company repurchased 321,858 shares of common stock, at a cost of $11.3 million or $35.01 per share, under the Company's 2026 Repurchase Plan.

As of June 30, 2026, $33.2 million in share repurchase authorization remained available for repurchase under the Company's 2026 Repurchase Plan. The Company makes no assurance regarding the timing or extent of future repurchases under this 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
April 1-30, 2026	19,824	$	33.19	19,824	$	43,816,882
May 1-31, 2026	153,035	34.45		152,729	38,555,137
June 1-30, 2026	149,305	35.83		149,305	33,206,180
Total	322,164	35.01		321,858	33,206,180

(1) During the three months ended June 30, 2026, 306 shares were acquired from employees in connection with income tax withholding obligations related to the vesting of restricted stock 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 June 30, 2026, none of the Company's directors or officers (as defined under Rule 16a-1(f)) adopted, modified or terminated any trading arrangements under Rule 10b5-1 or non-Rule 10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K) involving the purchase or sale of the Company's common stock.

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Item 6. Exhibits


Exhibit No.						Document

3.1						Restated Articles of Incorporation, as amended, of the Registrant (incorporated by reference to the Registrant’s Form 10-Q filed with the SEC on August 5, 2025).

3.2						Amended and Restated Bylaws of the Registrant (incorporated by reference to the Registrant’s Form 8-K filed with the SEC on July 25, 2025).

10.1						Change in Control Agreement with Arnold D. Martines, Chairman, President, and Chief Executive Officer (incorporated by reference to the Registrant’s Form 8-K filed with the SEC on July 2, 2026)

10.2						Form of Executive Officer Change in Control Agreement (incorporated by reference to the Registrant’s Form 8-K filed with the SEC on July 2, 2026)









31.1						Rule 13a-14(a) Certification of Chief Executive Officer in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 *

31.2						Rule 13a-14(a) Certification of Chief Financial Officer in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 *

32.1						Section 1350 Certification of Chief Executive Officer in accordance with Section 906 of the Sarbanes-Oxley Act of 2002 **

32.2						Section 1350 Certification of Chief Financial Officer in accordance with Section 906 of the Sarbanes-Oxley Act of 2002 **



101.INS						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document *

101.SCH						Inline XBRL Taxonomy Extension Schema Document *

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document *

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document *

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document *

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document *

104						Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101)


*						Filed herewith.

**						Furnished herewith.

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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:	August 6, 2026	/s/ Arnold D. Martines
		Arnold D. Martines
		Chairman, President and Chief Executive Officer
		(Principal Executive Officer)



		/s/ Dayna N. Matsumoto
		Dayna N. Matsumoto
		Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)