# CENTRAL PACIFIC FINANCIAL CORP (CPF) Informational only - not investment advice. CIK: 0000701347 SIC: 6022 State Commercial Banks SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Depository Institutions](/major-group/60/) > [SIC 6022 State Commercial Banks](/industry/6022/) Latest 10-K filed: 2026-02-27 SEC page: https://www.sec.gov/edgar/browse/?CIK=701347 Filing source: https://www.sec.gov/Archives/edgar/data/701347/000070134726000021/cpf-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 314162000 | USD | 2025 | 2026-02-27 | | Net income | 77480000 | USD | 2025 | 2026-02-27 | | Assets | 7409241000 | USD | 2025 | 2026-02-27 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000701347.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 167,139,000 | 182,562,000 | 198,294,000 | 216,383,000 | 212,418,000 | 218,762,000 | 232,656,000 | 282,657,000 | 306,099,000 | 314,162,000 | | Net income | 46,992,000 | 41,204,000 | 59,486,000 | 58,322,000 | 37,273,000 | 79,894,000 | 73,928,000 | 58,669,000 | 53,412,000 | 77,480,000 | | Diluted EPS | 1.50 | 1.34 | 2.01 | 2.03 | 1.32 | 2.83 | 2.68 | 2.17 | 1.97 | 2.86 | | Assets | 5,384,236,000 | 5,623,708,000 | 5,807,026,000 | 6,012,672,000 | 6,594,583,000 | 7,419,089,000 | 7,432,763,000 | 7,642,796,000 | 7,472,096,000 | 7,409,241,000 | | Liabilities | 4,879,561,000 | 5,123,673,000 | 5,315,301,000 | 5,484,152,000 | 6,047,850,000 | 6,860,822,000 | 6,979,892,000 | 7,138,981,000 | 6,933,711,000 | 6,816,660,000 | | Stockholders' equity | 504,650,000 | 500,011,000 | 491,725,000 | 528,520,000 | 546,733,000 | 558,267,000 | 452,871,000 | 503,815,000 | 538,385,000 | 592,581,000 | | Net margin | 28.12% | 22.57% | 30.00% | 26.95% | 17.55% | 36.52% | 31.78% | 20.76% | 17.45% | 24.66% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000701347.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 0.64 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.61 | reported discrete quarter | | 2023-Q2 | 2023-03-31 | | 16,187,000 | | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.60 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 69,324,000 | | 0.53 | reported discrete quarter | | 2023-Q3 | 2023-06-30 | | 14,475,000 | | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 72,412,000 | | 0.49 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 74,113,000 | 14,866,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 74,402,000 | 12,945,000 | 0.48 | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | 12,945,000 | | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | 15,817,000 | | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 75,840,000 | | 0.58 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 77,897,000 | | 0.49 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 77,960,000 | 11,345,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 77,206,000 | 17,760,000 | 0.65 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 17,760,000 | | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | 18,271,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 78,120,000 | | 0.67 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 79,959,000 | | 0.69 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 78,877,000 | 22,875,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 77,096,000 | 20,725,000 | 0.78 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/701347/000070134726000028/cpf-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-29 Report date: 2026-03-31 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, including the Dodd-Frank Act, 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 efforts 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; 42 Table of Contents •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 March 31, 2026, Central Pacific Bank operated 27 branches and 55 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 commitment to creating opportunity and serving our community continues in the present day as we strive to deliver exceptional customer service and tailored financial products to meet the unique needs of our customers and the communities we serve. This legacy continues to shape our mission to deliver exceptional customer service and tailored financial products that meet our customers' needs, 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 and homeowners. 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 43 Table of Contents 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 non-interest 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 March 31, 2026 and December 31, 2025. This policy requires significant judgment and involves inherent complexity. [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high ITEM 7.                                                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's discussion and analysis of financial condition and results of operations should be read in conjunction with the accompanying Consolidated Financial Statements under "Part II, Item 8. Financial Statements and Supplementary Data." Forward-Looking Statements and Factors that Could Affect Future Results Certain statements contained in this annual report on Form 10-K 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," "goal," "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, 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, including the Dodd-Frank Act, 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 efforts 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; 40 Table of Contents •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; •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. 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 as described in "Part I, Item 1A. Risk Factors" of this report. 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. Introduction We are a bank holding company that, through our banking subsidiary, Central Pacific Bank, offers full service commercial banking primarily in the State of Hawaii. We strive to provide exceptional customer service and products that meet our customers' needs. Our products and services consist primarily of the following: •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 and homeowners. 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 diversification into U.S. 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 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 income contribute meaningfully to non-interest revenue. •Wealth Management: The Company offers non-deposit investment products, annuities, investment management, trust custody, estate planning, and financial advisory services. 41 Table of Contents Executive Overview We believe we delivered solid financial performance while managing and mitigating risks that arose in 2025. •We recorded net income of $77.5 million, or $2.86 per diluted common share in 2025, compared to $53.4 million, or $1.97 per diluted common share in 2024. •Results in 2025 were impacted by $1.5 million in pre-tax expenses related to the consolidation of the Company's former operations center into its main headquarters ("Operations Center Consolidation") in the third quarter of 2025. Results in 2024 were impacted by a pre-tax loss on sales of investment securities of $9.9 million related to an investment securities portfolio repositioning ("Repositioning Loss") and pre-tax expenses related to our evaluation and assessment of a strategic opportunity of $3.1 million ("Strategic Expense"). •Excluding the impact of the Operations Center Consolidation, non-GAAP adjusted net income was $78.6 million, or $2.91 per diluted common share in 2025. (See Tables 1-6 for reconciliations of the adjusted non-GAAP financial measures.) Excluding the impact of the Repositioning Loss and Strategic Expense, non-GAAP adjusted net income was $63.4 million, or $2.34 per diluted common share in 2024. (See Tables 1-6 for reconciliations of the adjusted non-GAAP financial measures.) •We recorded return on average assets ("ROA") and return on average shareholders' equity ("ROE") ratios of 1.06% and 13.62%, respectively, in 2025, compared to ROA and ROE ratios of 0.72% and 10.25%, respectively, in 2024. Excluding the impact of the Operations Center Consolidation in 2025 and Repositioning Loss and Strategic Expense in 2024, adjusted ROA and ROE ratios (non-GAAP) was 1.07% and 13.81%, respectively, in 2025, compared to adjusted ROA and ROE ratios (non-GAAP) of 0.86% and 12.10%, respectively, in 2024. (See Table 3 - Adjusted Return on Average Assets and Adjusted Return on Average Shareholders' Equity for a reconciliation of the non-GAAP adjusted ROA and ROE.) •Asset quality remains strong as our nonperforming assets totaled $14.4 million, or 0.19% of total assets at December 31, 2025, compared to $11.0 million, or 0.15% of total assets at December 31, 2024. •Our loan portfolio declined by $43.8 million, or 0.8% in 2025, primarily due to run-off of our home equity loan portfolio of $76.9 million, consumer loan portfolio of $62.9 million, and residential mortgage loan portfolio of $53.3 million, partially offset by increases in our commercial mortgage loan portfolio of $93.8 million and our construction loan portfolio of $68.0 million. •Total deposits declined by $34.2 million, or 0.5% in 2025, primarily due to the run-off of high-cost time deposits greater than $250,000 of $53.5 million. Our core deposit portfolio grew by $19.3 million, or 0.3%. •Our capital position and consistent profitability allowed us to pay cash dividends of $1.09 per share in 2025. In addition, in 2025 we repurchased an aggregate of 788,261 shares of common stock under our share repurchase program at an aggregate cost of $23.3 million, or an average of $29.60 per share. Business Environment 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 broader macroeconomic trends, real estate, and tourism. A favorable business climate in Hawaii is generally characterized by expanding gross state product, low unemployment, and rising personal income; while an unfavorable business climate reflects the opposite. Labor Market and Economic Indicators The Department of Labor and Industrial Relations reported that Hawaii's seasonally adjusted annual unemployment rate was 2.2% in the month of December 2025, a decline from 3.0% in December 2024 and well below the national seasonally adjusted unemployment rate of 4.4%. The State of Hawaii's Department of Business, Economic Development and Tourism ("DBEDT") projects Hawaii's seasonally adjusted annual unemployment rate to average 3.0% in 2026. DBEDT estimates that real personal income grew by approximately 1.7% in 2025, while real gross state product grew by approximately 1.6% for 2025. DBEDT projects real personal income to grow by 1.6% and real gross state product to grow by 1.5% for 2026. According to the University of Hawaii Economic Research Organization ("UHERO") December 2025 forecast, Hawaii is expected to be impacted by weakening U.S. and global conditions, declining tourism, particularly from international markets, and stalled job growth. Inflation is anticipated to rise due to tariff impacts, while construction remains the primary source of economic strength. Real personal income and real gross state product is forecast to remain flat in 2026. These projections 42 Table of Contents assume continued high tariffs, federal spending cuts, and no immediate U.S. recession, though downside risks remain elevated due to policy uncertainty and global economic fragility. Real Estate Market Real estate lending, particularly residential mortgage 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 2025. According to the Honolulu Board of Realtors, the median price for a single-family home on Oahu was $1,139,000 for the year ended December 31, 2025, representing an increase of 3.5% from the median resale price of $1,100,000 for the year ended December 31, 2024. The median resale price for condominiums on Oahu was $507,250 for the year ended December 31, 2025, representing a decrease of 1.5% from the median resale price of $515,000 for the year ended December 31, 2024. Oahu unit sales volume increased by 3.5% for single-family homes, and decreased by 1.1% for condominiums in 2025 from 2024. If the residential and commercial real estate markets we have exposure to deteriorate, our results of operations could be negatively impacted. See the "Overview of Results of Operations—Concentrations of Credit Risk" section for a further discussion on how a deteriorating real estate market, combined with the concentration risk within our portfolio, could have a significant negative impact on our asset quality and credit losses. Tourism Trends In 2025, Hawaii’s tourism industry continued its post‑pandemic recalibration, with visitor volumes stabilizing while visitor spending increased. According to the Hawaii Tourism Authority ("HTA"), total visitor arrivals declined modestly to approximately 9.6 million in 2025, down 0.6% from the 9.7 million visitors in 2024, reflecting softening demand in certain international markets and capacity constraints, particularly on Oahu. Despite the modest decline in arrivals, overall visitor demand remained resilient, led primarily by the U.S. Mainland market, which accounted for the majority of air arrivals and remained relatively flat year over year. Importantly, total visitor spending reached a record high of $21.75 billion in 2025, representing an increase of approximately 5.7% from the $20.58 billion in 2024, driven by higher per‑visitor expenditures rather than growth in headcount. Average daily visitor spending rose to a record $273 per person, reflecting higher lodging rates, increased spending on food and beverage, and continued preference for higher‑end accommodations and experiences. This shift toward a higher‑spending visitor partially offset the impact of lower arrival volumes and underscores a continued evolution toward a value‑focused tourism model. International travel showed selective improvement. Visitor arrivals from Japan increased approximately 3% year over year to about 732,000, signaling early signs of recovery in Hawaii’s most critical international market, although volumes remain well below pre‑pandemic levels. In contrast, arrivals from Canada and other international markets remained soft, weighing on overall growth. Looking ahead to 2026, UHERO, in it's December 2025 forecast report, projects a period of moderation for Hawaii’s tourism sector. Total visitor arrivals by air are expected to decline by approximately 1.3% to 9.5 million in 2026, reflecting continued weakness in international markets, rising travel costs, and broader macroeconomic headwinds associated with a mild economic recession. Correspondingly, visitor spending is forecast to decline by approximately 2.4% to $20.33 billion in 2026, as slower arrival volumes and easing pricing power outweigh recent gains in per‑visitor spending. Despite this near‑term softness, UHERO anticipates that the tourism downturn is cyclical rather than structural, with conditions expected to stabilize in 2026 and gradually improve in 2027 and 2028, supported by recovering international demand, particularly from Japan, continued Maui recovery, and sustained investment in major construction and infrastructure projects statewide. Interest Rates and Monetary Policy Changes in monetary policy, including interest rate adjustments, can significantly influence: 1.Interest income on loans and securities, 2.Interest expense on deposits and borrowings, 3.Loan origination and deposit growth, 4.Fair value of assets and liabilities, among other areas. 43 Table of Contents To combat inflation, the FRB aggressively increased interest rates beginning in early 2022, when the Federal Funds Rate target range was 0.00% to 0.25%, up to a 22-year high, 5.25% to 5.50% by mid-2023. The rate remained unchanged until September 2024, when the Federal Open Market Committee ("FOMC") initiated a series of rate cuts, lowering the target range to 4.25% to 4.50% by year-end 2024. In September 2025, the FOMC implemented its first rate cut of the year, 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. The FOMC also signaled the possibility of one more cut in 2026 as they aim to balance employment and inflation goals. Other Economic Considerations Beyond monetary policy, other factors, including inflationary pressures, labor shortages, regulatory changes, geopolitical conflicts, supply chain disruptions, and potential bank failures, could adversely impact the economy and our financial results. These conditions may affect cash flow, loan demand, deposit growth, credit quality, noninterest income, and expenses. Recent Industry Developments Beginning in March 2023, the banking industry experienced significant volatility following several high-profile regional bank failures. These events resulted in industry-wide concerns regarding liquidity, deposit outflows, unrealized or unrecognized losses on investment securities, and overall consumer confidence in the banking sector. In response, the Company implemented a series of proactive measures during the first half of 2023, including enhanced client outreach and liquidity contingency planning. These actions focused on maximizing funding sources and increasing liquidity monitoring to mitigate potential risks. Industry conditions stabilized in 2024 and 2025, and we believe the Company maintained a strong balance sheet and liquidity position throughout this period. As of December 31, 2025, the Company held $378.7 million in cash and approximately $2.52 billion in additional liquidity sources, including available borrowing capacity and unpledged investment securities. Total available sources of liquidity represented approximately 116% of uninsured and uncollateralized deposits as of December 31, 2025. We believe the Company's deposit base remains well-diversified and long-tenured, with approximately 62% of total deposits insured by the FDIC or otherwise collateralized as of December 31, 2025. The Company’s capital also remained strong, with leverage, Common Equity Tier 1 capital, Tier 1 risk-based capital, and total risk-based capital ratios of 9.8%, 12.7%, 13.6%, and 14.8%, respectively, as of December 31, 2025, all exceeding the regulatory standards for "well-capitalized" institutions. 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 judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, income, and expenses, as well as related disclosures. Certain accounting policies inherently involve significant judgement and estimation due to their complexity and the uncertainty of future events. Actual results may differ materially from those estimates, and changes in assumptions or circumstances after the balance sheet date could result in material differences in future periods. Accounting estimates are considered critical when alternative estimates could reasonably have been used or when changes in those estimates are reasonably likely to occur and would materially impact the Consolidated Financial Statements. Management has discussed the development and selection of the critical accounting policy and estimate described below with the Audit Committee of the Board of Directors, and the Audit Committee has reviewed the related disclosures. We believe the most critical accounting policy in preparing our Consolidated Financial Statements is the determination of the allowance for credit losses on loans. Allowance for Credit Losses on Loans Management considers the policies related to the allowance for credit losses ("ACL") on loans to be the most critical to the financial statement presentation. The ACL on loans is determined in accordance with Accounting Standards Codification (“ASC”) 326, "Financial Instruments – Credit Losses", and reflects management’s estimate of expected credit losses over the life of loans in the portfolio as of the balance sheet date. The ACL is established through provisions for credit losses recorded in 44 Table of Contents current earnings. Loan balances are charged off against the allowance for credit losses when management determines the loan is uncollectable. Subsequent recoveries of amounts previously charged off are credited to the allowance. The ACL is measured on a collective basis for loans with similar risk characteristics. We stratify the loan portfolio into homogeneous groups and estimate expected credit losses based on the net amount expected to be collected over the life of the loans. Our methodology incorporates relevant information about past events, current conditions, and reasonable and supportable forecasts. For additional details on the risk factors considered by management in establishing the ACL, refer to Note 1 - Summary of Significant Accounting Policies in the accompanying notes to the Consolidated Financial Statements. Overview of Results of Operations 2025 vs. 2024 Comparison In 2025, we recognized net income of $77.5 million, or fully diluted earnings per share ("EPS") of $2.86, compared to net income of $53.4 million, or EPS of $1.97, in 2024. Our ROA and ROE for 2025 was 1.06% and 13.62%, respectively, compared to 0.72% and 10.25%, respectively, in 2024. We recorded a provision for credit losses of $15.7 million in 2025, compared to a provision of $9.8 million in 2024. The higher provision for credit losses was primarily due to movements in loan balances by segment, partially offset by improvements in the economic forecast, combined with an overall loan balance decline during the year. Net interest income increased by $29.2 million from 2024 to 2025, primarily driven by higher average yields earned on loans and investment securities, combined with lower average rates paid on interest-bearing deposits and the payoff of the Company's subordinated notes. Other operating income increased by $13.1 million from 2024 to 2025. The increase in other operating income was primarily due to a $9.9 million loss on sale of investment securities related to a portfolio repositioning completed in the fourth quarter of 2024, compared to a loss on sale of investment securities of less than $0.1 million in 2025. In addition, we recorded higher other service charges and fees, which increased by $1.2 million, largely due to higher investment services fees of $0.7 million and ATM and debit card fees of $0.6 million, and higher income from bank-owned life insurance ("BOLI"), which increased by $0.8 million. See Table 9 - Components of Other Operating Income for more information. Other operating expense increased by $6.1 million from 2024 to 2025. The increase was primarily driven by higher salaries and employee benefits of $7.8 million, computer software expense of $2.6 million, legal and professional services of $1.4 million, and $1.5 million in expenses related to the consolidation of the Company's former operations center into its main headquarters. The higher salaries and employee benefits was largely attributable to higher base salaries and incentive accruals. These increases were partially offset by $3.1 million in expenses related to the evaluation of a strategic opportunity in 2024, an impairment charge on intangible assets of $1.3 million in 2024, and higher directors' deferred compensation plan expense of $0.9 million in 2024. Significant fluctuations in directors' deferred compensation plan expenses are primarily due to stock market volatility. See Table 10 - Components of Other Operating Expense for more information. 2024 vs. 2023 Comparison In 2024, we reported net income of $53.4 million, or EPS of $1.97, compared to $58.7 million, or EPS of $2.17, in 2023. ROA and ROE were 0.72% and 10.25%, respectively, in 2024, compared to 0.78% and 12.38%, respectively, in 2023. We recorded a provision for credit losses of $9.8 million in 2024, compared to $15.7 million in 2023. The decrease was primarily driven by improvements in the economic outlook and changes in loan portfolio composition, combined with an overall decline in loan balance in 2024. Net interest income increased by $1.7 million from 2023 to 2024, primarily due to higher average yields earned on loans and investment securities, partially offset by higher average rates paid on interest-bearing deposits. Other operating income decreased by $7.9 million from 2023 to 2024. The decrease was primarily due to a $9.9 million loss on sale of investment securities related to a portfolio repositioning completed in the fourth quarter of 2024, compared to a $2.1 million loss primarily attributable to a similar repositioning completed in 2023. Additionally, the Company recognized a $5.1 million gain on the sale of a real estate office property in 2023. These decreases were partially offset by higher other service charges and fees of $2.0 million and higher income from BOLI of $1.7 million in 2024, The increase in BOLI income was primarily attributable to stock market volatility and higher death benefit income, partially offset by higher deferred 45 Table of Contents compensation expense included in salaries and employee benefits and other operating expense. See Table 9 - Components of Other Operating Income for more information. Other operating expense increased by $8.4 million from 2023 to 2024. The increase was primarily due to higher salaries and employee benefits of $3.9 million, $3.1 million in expenses related to the evaluation of a strategic opportunity in 2024, an impairment charge on intangible assets of $1.3 million in 2024, and higher directors' deferred compensation plan expenses of $1.2 million. Fluctuations in directors' deferred compensation plan expenses are primarily driven by stock market volatility. These increases were partially offset by a $2.3 million non-recurring charge related to the early termination of a branch lease in 2023. See Table 10 - Components of Other Operating Expense for more information. 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 to investors and other stakeholders in understanding its financial performance and position, by excluding certain transactions that are non-recurring, non-operational, or not indicative of ongoing results. The Company believes that these non-GAAP measures offer a useful perspective for evaluating performance trends over time and are intended to support period-to-period comparisons. The Company believes they are valuable tools for both investors and management in assessing historical results and forecasting future performance. Non-GAAP financial measures may not be comparable to similarly entitled measures reported by other companies. The following reconciling adjustments from GAAP to non-GAAP adjusted financial measures are limited to: 1.net pre-tax expenses of $1.5 million related to the consolidation of the Company's former operations center into its main headquarters in the third quarter of 2025, 2.pre-tax loss on sales of investment securities related to an investment portfolio repositioning of $9.9 million and $1.9 million in the fourth quarter of 2024 and fourth quarter of 2023, respectively, 3.pre-tax expenses related to the evaluation and assessment of a strategic opportunity of $3.1 million in the third quarter of 2024, 4.pre-tax gain on sale of a real estate office property of $5.1 million in the fourth quarter of 2023, and 5.pre-tax branch lease termination expense of $2.3 million in the fourth quarter of 2023. Management does not consider these transactions to be representative of the Company's core operating performance. The related income tax effects were calculated using an assumed effective tax rate of 23%. Table 1. Non-GAAP Financial Measures Year Ended December 31, 2025 (dollars in thousands, except for per share data) Reported Adjustment Non-GAAP Adjusted Financial Measures: Net income $ 77,480  $ 1,167  $ 78,647  Diluted earnings per share $ 2.86  $ 0.05  $ 2.91  Pre-provision net revenue (non-GAAP) $ 113,993  $ 1,516  $ 115,509  Return on average assets 1.06  % 0.01  % 1.07  % Return on average shareholders' equity 13.62  % 0.19  % 13.81  % Efficiency ratio (non-GAAP) 61.05  % (0.51) % 60.54  % As of December 31: Tangible common equity ratio (non-GAAP) 8.00  % 0.01  % 8.01  % 46 Table of Contents Year Ended December 31, 2024 (dollars in thousands, except for per share data) Reported Adjustment Non-GAAP Adjusted Financial Measures: Net income $ 53,412  $ 10,011  $ 63,423  Diluted earnings per share $ 1.97  $ 0.37  $ 2.34  Pre-provision net revenue (non-GAAP) $ 77,865  $ 13,002  $ 90,867  Return on average assets 0.72  % 0.14  % 0.86  % Return on average shareholders' equity 10.25  % 1.85  % 12.10  % Efficiency ratio (non-GAAP) 68.91  % (3.81) % 65.10  % As of December 31: Tangible common equity ratio (non-GAAP) 7.21  % 0.12  % 7.33  % Year Ended December 31, 2023 (dollars in thousands, except for per share data) Reported Adjustment Non-GAAP Adjusted Financial Measures: Net income $ 58,669  $ (705) $ 57,964  Diluted earnings per share $ 2.17  $ (0.03) $ 2.14  Pre-provision net revenue (non-GAAP) $ 92,520  $ (915) $ 91,605  Return on average assets 0.78  % —  % 0.78  % Return on average shareholders' equity 12.38  % (0.14) % 12.24  % Efficiency ratio (non-GAAP) 63.95  % (0.09) % 63.86  % As of December 31: Tangible common equity ratio (non-GAAP) 6.57  % —  % 6.57  % The following table presents a reconciliation of the Company's non-GAAP adjusted net income and adjusted diluted EPS for the periods presented, excluding the reconciling adjustments discussed above: Table 2. Adjusted Net Income and Diluted Earnings per Share Year Ended December 31, 2025 2024 2023 (dollars in thousands, except per share data) GAAP net income $ 77,480  $ 53,412  $ 58,669  Add: Pre-tax net loss related to an investment portfolio repositioning —  9,934  1,939  Less: Pre-tax net gain on sale of a real estate office property —  —  (5,128) Add: Pre-tax expenses related to the consolidation of operations center 1,516  —  —  Add: Pre-tax expenses related to a strategic opportunity —  3,068  —  Add: Pre-tax branch lease termination expense —  —  2,274  Total pre-tax adjustments (non-GAAP) 1,516  13,002  (915) Less: Income tax effect (assumes 23% ETR) (349) (2,991) 210  Total adjustments, net of tax (non-GAAP) 1,167  10,011  (705) Adjusted net income (non-GAAP) $ 78,647  $ 63,423  $ 57,964  Diluted weighted average shares outstanding 27,045,170  27,157,120  27,080,518  GAAP EPS $ 2.86  $ 1.97  $ 2.17  Add: Total adjustments, net of tax (non-GAAP) 0.05  0.37  (0.03) Adjusted EPS (non-GAAP) $ 2.91  $ 2.34  $ 2.14  47 Table of Contents The following table presents a calculation of the Company's non-GAAP adjusted ROA and adjusted ROE for the periods presented, excluding the reconciling adjustments discussed above: Table 3. Adjusted Return on Average Assets and Adjusted Return on Average Shareholders' Equity Year Ended December 31, (dollars in thousands) 2025 2024 2023 Average assets $ 7,338,368  $ 7,378,207  $ 7,479,243  Add: Total adjustments, net of tax (non-GAAP) 584  3,093  (176) Adjusted average assets (non-GAAP) $ 7,338,952  $ 7,381,300  $ 7,479,067  ROA (GAAP net income divided by average assets) 1.06  % 0.72  % 0.78  % Add: Total adjustments, net of tax (non-GAAP) 0.01  0.14  —  Adjusted ROA (non-GAAP) 1.07  % 0.86  % 0.78  % Year Ended December 31, (dollars in thousands) 2025 2024 2023 Average shareholders' equity $ 569,009  $ 521,008  $ 473,819  Add: Total adjustments, net of tax (non-GAAP) 584  3,093  (176) Adjusted average shareholders' equity (non-GAAP) $ 569,593  $ 524,101  $ 473,643  ROE (GAAP net income divided by average shareholders' equity) 13.62  % 10.25  % 12.38  % Add: Total adjustments, net of tax (non-GAAP) 0.19  1.85  (0.14) Adjusted ROE (non-GAAP) 13.81  % 12.10  % 12.24  % Pre-Provision Net Revenue ("PPNR"), is a non-GAAP financial measure that excludes provision for credit losses and income tax expense from net income. The Company believes that PPNR is a useful tool for evaluating its ability to generate earnings from operations before accounting for credit costs. The following table presents a reconciliation of the Company's non-GAAP PPNR and adjusted PPNR for the periods presented, excluding the reconciling adjustments discussed above: Table 4. Adjusted Pre-Provision Net Revenue Year Ended December 31, (dollars in thousands) 2025 2024 2023 GAAP net income $ 77,480  $ 53,412  $ 58,669  Add: Income tax expense 20,801  14,627  18,153  Pre-tax income 98,281  68,039  76,822  Add: Provision (credit) for credit losses 15,712  9,826  15,698  Pre-provision net revenue (non-GAAP) 113,993  77,865  92,520  Add: Total pre-tax adjustments (non-GAAP) 1,516  13,002  (915) Adjusted pre-provision net revenue (non-GAAP) $ 115,509  $ 90,867  $ 91,605  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 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 and adjusted efficiency ratio for the periods presented, excluding the reconciling adjustments discussed above: 48 Table of Contents Table 5. Adjusted Efficiency Ratio Year Ended December 31, (dollars in thousands) 2025 2024 2023 Total other operating expense $ 178,707  $ 172,591  $ 164,143  Less: Pre-tax expenses related to the consolidation of operations center (1,516) —  —  Less: Pre-tax expenses related to a strategic opportunity —  (3,068) —  Less: Pre-tax branch lease termination expense —  —  (2,274) Less: Total other operating expense adjustments (non-GAAP) (1,516) (3,068) (2,274) Adjusted total other operating expense (non-GAAP) $ 177,191  $ 169,523  $ 161,869  Net interest income $ 240,883  $ 211,733  $ 210,000  Total other operating income 51,817  38,723  46,663  Add: Pre-tax net loss related to an investment portfolio repositioning —  9,934  1,939  Less: Pre-tax net gain on sale of a real estate office property —  —  (5,128) Total other operating income adjustments (non-GAAP) —  9,934  (3,189) Adjusted total other operating income (non-GAAP) 51,817  48,657  43,474  Adjusted total revenue (non-GAAP) $ 292,700  $ 260,390  $ 253,474  Efficiency ratio (non-GAAP) 61.05  % 68.91  % 63.95  % Less: Total pre-tax adjustments (non-GAAP) (0.51) (3.81) (0.09) Adjusted efficiency ratio (non-GAAP) 60.54  % 65.10  % 63.86  % The Company's efficiency ratio improved to 61.05% in 2025, compared to 68.91% in 2024 and 63.95% in 2023. The improvement in our efficiency ratio in 2025 compared to 2024, was primarily driven by the aforementioned increases in net interest income and other operating income, which more than offset the increase in other operating expense. 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, excluding the reconciling adjustments discussed above: Table 6. Adjusted Tangible Common Equity Ratio December 31, (dollars in thousands) 2025 2024 Total shareholders' equity $ 592,581  $ 538,385  Less: Intangible assets —  —  Tangible common equity ("TCE") 592,581  538,385  Add: Total adjustments, net of tax (non-GAAP) 1,167  10,011  Adjusted TCE (non-GAAP) $ 593,748  $ 548,396  Total assets $ 7,409,241  $ 7,472,096  Less: Intangible assets —  —  Tangible assets 7,409,241  7,472,096  Add: Total adjustments, net of tax (non-GAAP) 1,167  10,011  Adjusted tangible assets (non-GAAP) $ 7,410,408  $ 7,482,107  TCE ratio (non-GAAP) (TCE to tangible assets) 8.00  % 7.21  % Add: Total adjustments, net of tax (non-GAAP) 0.01  0.12  Adjusted TCE ratio (non-GAAP) 8.01  % 7.33  % 49 Table of Contents Net Interest Income The following table presents average balances of interest-earning assets and interest-bearing liabilities, along with the related yields and rates. Net interest income, when annualized and expressed as a percentage of average interest-earning assets, is referred to as "net interest margin." Interest income, which includes loan fees, and resultant yield information, is presented on a taxable-equivalent basis using a federal statutory tax rate of 21%. Table 8 - Analysis of Changes in Net Interest Income (Taxable-Equivalent) provides a breakdown of changes in net interest income between periods. For each category of interest-earning assets and interest-bearing liabilities, changes are analyzed based on: (i) volume, calculated as the change in average balance, multiplied by the prior period's average yield or rate; and (ii) rate, calculated as the change in average yield or rate, multiplied by the current period's average balance. Any change in interest income not solely attributable to volume or rate is allocated proportionately between the two factors. 50 Table of Contents Table 7. Average Balances, Interest Income and Expense, Yields, and Rates (Taxable-Equivalent) 2025 2024 2023 (Dollars in thousands) Average Balance Average Yield/ Rate Amount of Interest Average Balance Average Yield/ Rate Amount of Interest Average Balance Average Yield/ Rate Amount of Interest Assets Interest-earning assets: Interest-bearing deposits in other financial institutions $ 164,721  4.31  % $ 7,096  $ 220,526  5.26  % $ 11,593  $ 134,150  5.34  % $ 7,163  Investment securities, excluding valuation allowance: Taxable (1) 1,356,467  2.86  38,849  1,334,695  2.49  33,278  1,365,067  2.11  28,789  Tax-exempt (1) (3) 138,415  2.58  3,572  141,688  2.26  3,199  150,399  2.45  3,686  Total investment securities 1,494,882  2.84  42,421  1,476,383  2.47  36,477  1,515,466  2.14  32,475  Loans, incl. loans-held-for-sale (2) 5,320,258  4.96  263,906  5,358,059  4.82  258,192  5,508,530  4.42  243,315  Federal Reserve Bank ("FRB") and Federal Home Loan Bank ("FHLB") stock 23,948  6.22  1,489  6,896  7.38  509  11,317  4.23  478  Total interest-earning assets 7,003,809  4.50  314,912  7,061,864  4.34  306,771  7,169,463  3.95  283,431  Noninterest-earning assets 334,559  316,343  309,780  Total assets $ 7,338,368  $ 7,378,207  $ 7,479,243  Liabilities and Equity Interest-bearing liabilities: Interest-bearing demand deposits $ 1,357,433  0.13  % $ 1,826  $ 1,287,628  0.17  % $ 2,159  $ 1,359,240  0.13  % $ 1,701  Savings and money market deposits 2,302,973  1.48  34,178  2,263,273  1.64  37,043  2,195,763  1.00  21,979  Time deposits up to $250,000 442,001  2.33  10,309  538,216  3.16  17,025  415,541  2.15  8,917  Time deposits over $250,000 591,162  3.35  19,823  687,404  4.23  29,059  795,917  3.81  30,288  Total interest-bearing deposits 4,693,569  1.41  66,136  4,776,521  1.79  85,286  4,766,461  1.32  62,885  Federal funds purchased and securities sold —  —  —  1  5.57  —  —  —  —  FHLB advances and other short-term borrowings —  —  —  17  5.58  1  23,322  4.88  1,139  Long-term debt 127,707  5.59  7,143  156,218  5.81  9,079  148,922  5.80  8,633  Total interest-bearing liabilities 4,821,276  1.52  73,279  4,932,757  1.91  94,366  4,938,705  1.47  72,657  Noninterest-bearing deposits 1,824,581  1,794,469  1,933,666  Other liabilities 123,502  129,973  133,053  Total liabilities 6,769,359  6,857,199  7,005,424  Shareholders' equity 569,009  521,008  473,819  Non-controlling interest —  —  —  Total equity 569,009  521,008  473,819  Total liabilities and equity $ 7,338,368  $ 7,378,207  $ 7,479,243  Taxable-equivalent net interest income $ 241,633  $ 212,405  $ 210,774  Taxable-equivalent adjustment (3) (750) (672) (774) Net interest income $ 240,883  $ 211,733  $ 210,000  Interest rate spread 2.98  % 2.43  % 2.48  % Net interest margin 3.45  % 3.01  % 2.94  % (1) At amortized cost. (2) Includes nonaccrual loans. (3) 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%. 51 Table of Contents Table 8. Analysis of Changes in Net Interest Income (Taxable-Equivalent) 2025 Compared to 2024 2024 Compared to 2023 Increase (Decrease) Due to Change In: Increase (Decrease) Due to Change In: (Dollars in thousands) Volume Rate Net Change Volume Rate Net Change Interest-earning assets Interest-bearing deposits in other financial institutions $ (2,933) $ (1,564) $ (4,497) $ 4,606  $ (176) $ 4,430  Investment securities, excluding valuation allowance: Taxable 543  5,028  5,571  (634) 5,123  4,489  Tax-exempt (73) 446  373  (215) (272) (487) Total investment securities 470  5,474  5,944  (849) 4,851  4,002  Loans, incl. loans-held-for-sale (1,805) 7,519  5,714  (6,628) 21,505  14,877  FRB and FHLB stock 1,258  (278) 980  (187) 218  31  Total interest-earning assets (3,010) 11,151  8,141  (3,058) 26,398  23,340  Interest-bearing liabilities Interest-bearing demand deposits 135  (468) (333) (87) 545  458  Savings and money market deposits 676  (3,541) (2,865) 671  14,393  15,064  Time deposits up to $250,000 (3,043) (3,673) (6,716) 2,649  5,459  8,108  Time deposits over $250,000 (4,055) (5,181) (9,236) (4,123) 2,894  (1,229) Total interest-bearing deposits (6,287) (12,863) (19,150) (890) 23,291  22,401  FHLB advances and other short-term borrowings (1) —  (1) (1,138) —  (1,138) Long-term debt (1,655) (281) (1,936) 430  16  446  Total interest-bearing liabilities (7,943) (13,144) (21,087) (1,598) 23,307  21,709  Taxable-equivalent net interest income $ 4,933  $ 24,295  $ 29,228  $ (1,460) $ 3,091  $ 1,631  The banking and financial services industry in Hawaii is highly competitive. Net interest income remains our primary source of earnings and is derived from the difference between interest income earned on loans, investment securities and other interest-earning assets, and the interest expense we pay on deposits, borrowings, and other interest-bearing liabilities. On a taxable-equivalent basis, net interest income totaled $241.6 million in 2025, which increased by $29.2 million, or 13.8%, from $212.4 million in 2024, which increased by $1.6 million, or 0.8%, from $210.8 million in 2023. The increase in 2025 was primarily due to higher average yields earned on loans and investment securities, which increased interest income, combined with lower average interest-bearing deposit balances and lower average rates paid on interest-bearing deposits, which reduced interest expense. In addition, interest expense of long-term debt decreased, primarily due to lower average rates paid and repayment of $25.0 million in FHLB long-term advances and $55.0 million in subordinated notes in the first quarter of 2025 and fourth quarter of 2025, respectively. These positive variances were partially offset by a decline in average loan balances which reduced interest income, combined with declines in the average balance and average yield earned on interest-bearing deposits in other financial institutions, which also reduced interest income. Investment Portfolio Repositioning In the fourth quarter of 2024, the Company executed an investment portfolio repositioning of its available-for-sale ("AFS") investment securities portfolio. The Company sold 24 lower-yielding AFS investment securities with a book value of $106.5 million, and received proceeds of $96.6 million, which resulted in gross realized losses of $9.9 million. No gross gains were realized on the sale. The specific identification method was used to determine the cost of securities sold. The securities sold had a weighted average yield of 2.1% and a weighted average duration of 3.6 years. With the proceeds, the Company purchased higher-yielding AFS investment securities totaling $101.6 million with a weighted average yield of 4.9% and a weighted average duration of 4.1 years. 52 Table of Contents In the fourth quarter of 2023, the Company executed a similar investment portfolio repositioning of its AFS investment securities portfolio. The Company sold 17 AFS investment securities with a book value of $30.0 million, weighted average yield of 3.25%, weighted average duration of 3.4 years, and received proceeds of $28.1 million, which resulted in gross realized losses of $1.9 million. No gross gains were realized on the sale. The specific identification method was used to determine the cost of securities sold. With the proceeds, the Company purchased higher-yielding AFS investment securities totaling $28.3 million with a weighted average yield of 5.68% and a weighted average duration of 2.5 years. Interest Rate Swap In the first quarter of 2022, the Company entered into a forward starting interest rate swap on certain municipal debt securities with a notional amount of $115.5 million. Under the terms of the swap, the Company pays the counterparty a fixed rate of 2.095%, and receives a floating rate based on the Federal Funds effective rate. The swap became effective on March 31, 2024 and matures on March 31, 2029. In 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 as of December 31, 2025. All other terms of the interest rate swap remained unchanged. In 2025 and 2024, the Company recorded $2.7 million and $2.6 million, respectively, of interest income on taxable investment securities related to the swap. Interest Income On a taxable-equivalent basis, interest income totaled $314.9 million in 2025 which increased by $8.1 million, or 2.7%, from the $306.8 million in 2024, which increased by $23.3 million, or 8.2%, from $283.4 million in 2023. The increase in taxable-equivalent interest income in 2025 from 2024 was primarily due to an increase in the average yields earned on loans and investment securities of 14 basis points ("bps") and 37 bps, respectively, resulting in higher interest income of approximately $7.5 million and $5.5 million, respectively. The increase in the average yield earned on investment securities was partially attributable to the portfolio repositioning completed in the fourth quarter of 2024. In addition, the $17.1 million increase in average FRB and FHLB stock and the $18.5 million increase in average investment securities resulted in higher interest income of approximately $1.3 million and $0.5 million, respectively. These increases were partially offset by decreases in the average balance and average yield earned on interest-bearing deposits in other financial institutions of $55.8 million and 95 bps, respectively, resulting in a decrease in interest income of approximately $4.5 million, and a decrease in average loans of $37.8 million, resulting in lower interest income of approximately $1.8 million. The increase in taxable-equivalent interest income in 2024 from 2023 was primarily due to increases in the average yields earned on loans and investment securities of 40 bps and 33 bps, respectively, resulting in higher interest income of approximately $21.5 million and $4.9 million, respectively. The increase in the average yield earned on investment securities was partially attributable to income of $2.6 million from the aforementioned interest rate swap that became effective on March 31, 2024. In addition, increases in the average balance and average yield earned on interest-bearing deposits in other financial institutions resulted in higher interest income of approximately $4.4 million. These increases were partially offset by decreases in the average loans and investment securities balances of $150.5 million and $39.1 million, respectively, resulting in lower interest income of approximately $6.6 million and $0.8 million, respectively. Interest Expense In 2025, interest expense was $73.3 million which represented a decrease of $21.1 million, or 22.3%, compared to $94.4 million in 2024, which was an increase of $21.7 million, or 29.9%, compared to $72.7 million in 2023. Following rate cuts beginning in September 2024, the average rate paid on interest-bearing deposits of 1.41% in 2025 decreased by 38 bps from 2024, resulting in a decrease in interest expense of approximately $12.9 million. Average interest-bearing deposits decreased by $83.0 million, resulting in a decrease in interest expense of approximately $6.3 million. Decreases in the average balance and average rate paid on long-term debt of $28.5 million and 22 bps, respectively, resulted in a total decrease in interest expense of approximately $1.9 million. FHLB long-term advances of $25.0 million at 4.62% and subordinated notes of $55.0 million at 4.75% were repaid in the first quarter of 2025 and fourth quarter of 2025, respectively. 53 Table of Contents The average rate paid on interest-bearing deposits of 1.79% in 2024 increased by 47 bps from 2023, resulting in an increase in interest expense of approximately $23.3 million. Increases in the average balance and average rate paid on long-term debt of $7.3 million and 1 bps, respectively, resulted in a total increase in interest expense of approximately $0.4 million. Net Interest Margin Our net interest margin was 3.45%, 3.01% and 2.94% in 2025, 2024 and 2023, respectively. The increase in our net interest margin in 2025 from 2024 was primarily due to the increases in the average yields earned on loans and investment securities, combined with decreases in the average rates paid on interest-bearing deposits and long-term debt. The decrease in our net interest margin in 2024 from 2023 was primarily due to the increases in the average yields earned on loans and investment securities, partially offset by increases in the average rates paid on interest-bearing deposits and long-term debt. Other Operating Income The following table presents components of other operating income and the total as a percentage of average assets for the periods presented: Table 9. Components of Other Operating Income Dollar Change Percent Change Year Ended December 31, 2025 2024 2025 2024 (Dollars in thousands) 2025 2024 2023 to 2024 to 2023 to 2024 to 2023 Mortgage banking income: Net loan servicing fees $ 1,715  $ 1,913  $ 1,931  $ (198) $ (18) (10.4) % (0.9) % Amortization of mortgage servicing rights (843) (776) (705) (67) (71) 8.6  10.1  Net gain on sale of residential mortgage loans 1,628  1,257  721  371  536  29.5  74.3  Unrealized gain (loss) on interest rate locks (47) 77  (42) (124) 119  (161.0) (283.3) Loan placement fees 1,032  917  687  115  230  12.5  33.5  Total mortgage banking income 3,485  3,388  2,592  97  796  2.9  30.7  Service charges on deposit accounts 9,024  8,656  8,753  368  (97) 4.3  (1.1) Other service charges and fees 23,765  22,553  20,531  1,212  2,022  5.4  9.8  Income from fiduciary activities 6,201  5,761  4,895  440  866  7.6  17.7  Income from bank-owned life insurance 7,452  6,619  4,870  833  1,749  12.6  35.9  Net (loss) gain on sales of investment securities (30) (9,934) (2,074) 9,904  (7,860) (99.7) 379.0  Other: Equity in earnings of unconsolidated entities 106  (21) (22) 127  1  (604.8) (4.5) Income recovered on nonaccrual loans previously charged-off 173  187  439  (14) (252) (7.5) (57.4) Other recoveries 98  90  180  8  (90) 8.9  (50.0) Net unrealized losses on loans held for sale 71  (78) —  149  (78) (191.0) N.M. (*) Commissions on sale of checks 279  298  312  (19) (14) (6.4) (4.5) Gain on sale of premises and equipment —  —  5,128  —  (5,128) N.M. (*) (100.0) Other 1,193  1,204  1,059  (11) 145  (0.9) 13.7  Total other operating income - other 1,920  1,680  7,096  240  (5,416) 14.3  (76.3) Total other operating income $ 51,817  $ 38,723  $ 46,663  $ 13,094  $ (7,940) 33.8  (17.0) Ratio of total other operating income to average assets 0.71  % 0.52  % 0.62  % (*) Not meaningful ("N.M.") Total other operating income of $51.8 million in 2025 increased by $13.1 million, or 33.8%, from the $38.7 million earned in 2024, which decreased by $7.9 million, or 17.0%, from the $46.7 million earned in 2023. The increase in other operating income in 2025 from 2024 was primarily due to a loss on sale of investment securities of $9.9 million related to an investment portfolio repositioning completed in the fourth quarter of 2024, compared to a loss on sale of investment securities of less than $0.1 million in 2025. In addition, the Company recorded higher other service charges and 54 Table of Contents fees, which increased by $1.2 million, largely due to higher investment services fees of $0.7 million and ATM and debit card fees of $0.6 million, and higher income from BOLI, which increased by $0.8 million, primarily attributable to higher death benefit income. The decrease in other operating income in 2024 from 2023 was primarily due to a loss on sale of investment securities of $9.9 million related to an investment portfolio repositioning completed in the fourth quarter of 2024, compared to a loss on sale of investment securities of $2.1 million primarily due to an investment portfolio repositioning completed in the fourth quarter of 2023 and a gain on sale of a real estate office property of $5.1 million completed in the fourth quarter of 2023. These decreases were partially offset by higher other service charges and fees of $2.0 million and higher income from BOLI of $1.7 million. Significant variances in income from BOLI are primarily attributable to volatility in the equity markets and higher death benefit income. The Company has certain company-owned life insurance policies (included in income from BOLI) used to hedge its deferred compensation plans, which are tied to the equity markets and had gains in 2024 and 2023, therefore, the Company has also recognized offsetting increases in deferred compensation expense in other operating expenses in 2024 and 2023. 55 Table of Contents Other Operating Expense The following table presents components of other operating expense and the total as a percentage of average assets for the periods presented: Table 10. Components of Other Operating Expense Dollar Change Percent Change Year Ended December 31, 2025 2024 2025 2024 (Dollars in thousands) 2025 2024 2023 to 2024 to 2023 to 2024 to 2023 Salaries and employee benefits $ 93,754  $ 85,941  $ 82,050  $ 7,813  $ 3,891  9.1  % 4.7  % Net occupancy 17,675  18,001  18,185  (326) (184) (1.8) (1.0) Computer software 20,627  18,015  17,726  2,612  289  14.5  1.6  Legal and professional services 11,218  9,790  9,959  1,428  (169) 14.6  (1.7) Equipment 3,724  3,881  3,958  (157) (77) (4.0) (1.9) Advertising 3,392  3,615  3,888  (223) (273) (6.2) (7.0) Communication 3,220  3,177  3,010  43  167  1.4  5.5  Other: Pension plan and SERP 455  431  380  24  51  5.6  13.4  Foreclosed assets —  —  —  —  —  N.M. (*) N.M. (*) Charitable contributions 372  557  454  (185) 103  (33.2) 22.7  FDIC insurance assessment 3,326  3,482  4,133  (156) (651) (4.5) (15.8) Miscellaneous loan expenses 1,079  1,401  1,291  (322) 110  (23.0) 8.5  ATM and debit card 3,626  3,552  3,364  74  188  2.1  5.6  Armored car 1,734  1,804  1,701  (70) 103  (3.9) 6.1  Entertainment and promotions 2,238  1,998  2,015  240  (17) 12.0  (0.8) Stationery and supplies 661  668  740  (7) (72) (1.0) (9.7) Directors' fees and expenses 1,616  1,162  1,287  454  (125) 39.1  (9.7) Directors' deferred compensation plan 595  1,528  360  (933) 1,168  (61.1) 324.4  Strategic expenses —  3,068  —  (3,068) 3,068  (100.0) N.M. (*) Amortization and impairment of intangible assets —  1,461  39  (1,461) 1,422  (100.0) 3,646.2  Branch consolidation costs 1,516  —  —  1,516  —  N.M. (*) N.M. (*) Loss on disposal of fixed assets 3  55  12  (52) 43  (94.5) 358.3  Loss on sale of loans —  —  197  —  (197) N.M. (*) (100.0) Early termination of lease —  —  2,274  —  (2,274) N.M. (*) (100.0) Other 7,876  9,004  7,120  (1,128) 1,884  (12.5) 26.5  Total other operating expense - other 25,097  30,171  25,367  (5,074) 4,804  (16.8) 18.9  Total other operating expense $ 178,707  $ 172,591  $ 164,143  $ 6,116  $ 8,448  3.5  5.1  Ratio of total other operating expense to average assets 2.44  % 2.34  % 2.19  % (*) Not meaningful ("N.M.") Total other operating expense of $178.7 million in 2025 increased by $6.1 million, or 3.5%, from total operating expense of $172.6 million in 2024, which increased by $8.4 million, or 5.1%, compared to 2023. The increase in total other operating expense in 2025, compared to 2024, was primarily due to higher salaries and employee benefits of $7.8 million, computer software expense of $2.6 million, and legal and professional services of $1.4 million. The higher salaries and employee benefits was largely attributable to higher base salaries and incentive accruals. In addition, the Company recognized $1.5 million in expenses related to the consolidation of the Company's former Operations Center into its main headquarters in 2025. These increases were partially offset by $3.1 million in expenses related to the evaluation of a strategic opportunity in 2024, lower amortization and impairment of intangible assets of $1.5 million, and lower directors' deferred compensation plan expenses of $0.9 million. Significant fluctuations in directors' deferred compensation plan expenses are primarily due to stock market volatility. 56 Table of Contents The increase in total other operating expense in 2024, compared to 2023, was primarily due to expenses related to a strategic opportunity in 2024 of $3.1 million, higher salaries and employee benefits of $3.9 million, amortization and impairment of intangible assets of $1.4 million, and higher directors' deferred compensation plan expenses of $1.2 million. These increases were partially offset by a non-recurring charge of $2.3 million related to the early termination of a branch lease in 2023. Significant fluctuations in directors' deferred compensation plan expenses are primarily due to volatility in the equity markets. Income Taxes In 2025, the Company recorded income tax expense of $20.8 million, compared to $14.6 million in 2024, and $18.2 million in 2023. The effective tax rate was 21.2% in 2025 compared to 21.5% in 2024 and 23.6% in 2023. The increase in income tax expense in 2025 from 2024 was primarily due to higher pre-tax income. The decrease in the effective tax rate in 2025 from 2024 was primarily driven by the recognition of higher tax credits and higher tax-exempt income. The decrease in income tax expense in 2024 from 2023 was primarily due to lower pre-tax income. The decrease in the effective tax rate in 2024 from 2023 was primarily attributable to higher tax-exempt income from BOLI as a percentage of pretax income, combined with additional tax credits recognized and tax return-to-provision adjustments in 2024. As of December 31, 2025, the valuation allowance on our net deferred tax assets ("DTA") totaled $3.4 million, which related to our DTA from 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. Net of this valuation allowance, the Company's net DTA totaled $23.6 million as of December 31, 2025, compared to a net DTA of $17.8 million as of December 31, 2024, and is included in other assets in the Company's consolidated balance sheets. On August 16, 2022, the Inflation Reduction Act ("IRA") of 2022 was signed into law to implement new tax provisions and provide various incentives and tax credits. The IRA created a 15% corporate alternative minimum tax and an excise tax of 1% on stock repurchases from publicly traded U.S. corporations, among other changes. As of December 31, 2025, the Company determined that neither this Act nor changes to income tax laws or regulations in other jurisdictions had a significant impact on income tax expense. As of December 31, 2025, the Company estimates that it will owe and therefore has accrued approximately $0.2 million in excise tax on the Company's stock repurchases in 2025. Investment Portfolio The following table presents the amounts and distribution of investment securities held as of the dates presented: Table 11. Distribution of Investment Securities December 31, 2025 December 31, 2024 (Dollars in thousands) HTM (Amortized Cost) AFS (Fair Value) Total HTM (Amortized Cost) AFS (Fair Value) Total Debt securities: States and political subdivisions $ 41,925  $ 117,041  $ 158,966  $ 42,016  $ 116,833  $ 158,849  U.S. Treasury obligations and direct obligations of U.S Government agencies —  100,025  100,025  —  81,200  81,200  Collateralized loan obligations —  40,827  40,827  —  31,140  31,140  Mortgage-backed securities: Residential - U.S. government-sponsored entities and agencies 520,466  407,053  927,519  554,914  414,471  969,385  Residential - Non-government agencies —  15,363  15,363  —  16,926  16,926  Commercial - U.S. government-sponsored entities and agencies —  67,903  67,903  —  67,161  67,161  Commercial - Non-government agencies —  —  —  —  9,927  9,927  Total $ 562,391  $ 748,212  $ 1,310,603  $ 596,930  $ 737,658  $ 1,334,588  Investment securities totaled $1.31 billion at December 31, 2025, which decreased by $24.0 million, or 1.8%, from the $1.33 billion held at December 31, 2024, which increased by $55.0 million, or 4.3%, from the $1.28 billion at year-end 2023. 57 Table of Contents The decrease in the investment securities portfolio reflects principal runoff, maturities and calls totaling $115.9 million, partially offset by purchases of investment securities of $50.6 million, amortization of unrealized losses on investment securities transferred to held-to-maturity of $6.8 million, a market valuation increase on the AFS portfolio of $34.8 million, and amortization and accretion of premiums and discounts of $1.3 million. The fluctuations in market valuation on the AFS portfolio continues to be driven by changes in market interest rates. To mitigate the potential future impact to capital through AOCI, in 2022, the Company transferred 81 investment securities that were classified as AFS to HTM. The investment securities had an amortized cost basis of $762.7 million and a fair market value of $673.2 million. On the dates of transfer, these securities had total net unrealized losses of $89.5 million. There was no impact to net income as a result of the reclassifications. Maturity Distribution of Investment Portfolio The following table presents the maturity distribution of the investment portfolio and weighted-average yields by investment type and maturity grouping at December 31, 2025. 58 Table 12. Maturity Distribution of Investment Portfolio Portfolio Type and Maturity Grouping Carrying Value Weighted Average Yield (1) (Dollars in thousands) Available-for-sale portfolio: Debt securities - States and political subdivisions: Within one year $ 817  2.63  % After one but within five years 12,480  3.92  After five but within ten years 12,564  4.04  After ten years 91,180  2.29  Total debt securities - States and political subdivisions 117,041  2.66  Debt securities - U.S. Treasury obligations and direct obligations of U.S. Government agencies: After one but within five years 26,055  4.21  After five but within ten years 51,394  3.76  After ten years 22,576  4.68  Total debt securities - U.S. Treasury obligations and direct obligations of U.S. Government agencies 100,025  4.09  Debt securities - Collateralized loan obligations: After ten years 40,827  5.54  Total debt securities - Collateralized loan obligations 40,827  5.54  Residential mortgage-backed securities - U.S. GSEs and agencies: After one but within five years 274  2.11  After five but within ten years 1,738  2.79  After ten years 405,041  2.96  Total residential mortgage-backed securities - U.S. GSEs and agencies 407,053  2.96  Residential mortgage-backed securities - Non-government sponsored entities ("Non-GSEs") and agencies: After ten years 15,363  4.73  Total residential mortgage-backed securities - Non-GSEs and agencies 15,363  4.73  Commercial mortgage-backed securities - U.S. GSEs and agencies: After one but within five years 15,448  4.38  After five but within ten years 2,293  1.43  After ten years 50,162  2.29  Total commercial mortgage-backed securities - U.S. GSEs and agencies 67,903  2.73  Total available-for-sale portfolio $ 748,212  3.22  % Held-to-maturity portfolio: Debt securities - States and political subdivisions: After ten years $ 41,925  2.26  % Total debt securities - States and political subdivisions 41,925  2.26  Residential mortgage-backed securities - U.S. government-sponsored entities ("GSEs") and agencies: After ten years 520,466  1.88  Total residential mortgage-backed securities - U.S. GSEs and agencies 520,466  1.88  Total held-to-maturity portfolio $ 562,391  1.91  % Total investment securities $ 1,310,603  2.66  % (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%. 59 The weighted-average yield of the investment portfolio was 2.66% as of December 31, 2025, which increased by 4 bps from 2.62% as of December 31, 2024. Financial Condition Total assets were $7.41 billion at December 31, 2025 which decreased by $62.9 million, or 0.8%, from the $7.47 billion at December 31, 2024. Total liabilities were $6.82 billion at December 31, 2025 which decreased by $117.1 million, or 1.7%, from the $6.93 billion at December 31, 2024. The decreases in total assets and total liabilities in 2025 were primarily due to declines in loans and deposits in 2025. Loan Portfolio Our lending activities are focused on commercial and industrial loans, commercial mortgages, and construction loans to small and medium-sized companies, business professionals, and real estate investors and developers, as well as residential mortgages, home equity and consumer loans to home-buyers and individuals. Our strategy for generating commercial loans has traditionally relied upon teams of commercial real estate and commercial banking officers who are responsible for client prospecting and business development. To manage credit risk (i.e., the ability of borrowers to repay their loan obligations), management analyzes the borrower's financial condition, repayment source, collateral and other factors that could impact credit quality, such as national and local economic conditions and industry conditions related to respective borrowers. The general underwriting guidelines require analysis and documentation to include among other things, overall creditworthiness of borrower, guarantor support, use of funds, loan term, minimum equity, loan-to-value standards, repayment terms, sources of repayment, covenants, pricing, collateral, insurance, and documentation standards. All loan requests considered by the Company must have a clearly defined, legitimate purpose and a determinable primary source of repayment along with a secondary source of repayment. All loans should be supported by appropriate documentation including, current financial statements, credit reports, collateral information, asset verification, tax returns, title reports, and appraisals (where appropriate). We score consumer and small business loans using underwriting matrices ("Scorecards") developed based on the results of an analysis from a reputable national credit scoring company commissioned by our Bank. The Scorecards use the attributes that were determined to most highly correlate with probability of repayment. Those attributes include, but are not limited to the following: (i) credit score, (ii) credit limit amount, and (iii) debt-to-income ratio. Loans, net of deferred fees and costs, totaled $5.29 billion at December 31, 2025, which decreased by $43.8 million, or 0.8%, from the $5.33 billion at December 31, 2024, which decreased by $106.1 million, or 2.0%, from the $5.44 billion held at December 31, 2023. The decrease in total loans included net decreases in the following loan portfolios: home equity of $76.9 million, or 11.4%, consumer of $62.9 million, or 12.3%, residential mortgage of $53.3 million, or 2.8%, and commercial and industrial of $12.3 million, or 2.0%. These decreases were offset by net increases in commercial mortgage of $93.8 million, or 6.2% and construction of $68.0 million, or 46.8%. In 2025, we did not foreclose on any loans. In addition, we recorded loan charge-offs of $16.7 million. The following table presents outstanding loans, net of deferred fees and costs, by class as of the dates presented: Table 13. Loans by Class (Dollars in thousands) December 31, 2025 December 31, 2024 Commercial and industrial $ 594,592  $ 606,936  Construction 213,191  145,211  Residential mortgage 1,839,191  1,892,520  Home equity 600,082  676,982  Commercial mortgage 1,594,433  1,500,680  Consumer 447,607  510,523  Total loans, net of deferred fees and costs 5,289,096  5,332,852  Allowance for credit losses (59,621) (59,182) Net loans $ 5,229,475  $ 5,273,670  60 The following table presents outstanding loans by class and geographic location as of the dates presented: Table 14. Loans by Geographic Distribution (Dollars in thousands) December 31, 2025 December 31, 2024 Commercial and industrial: Hawaii $ 453,619  $ 430,167  U.S. Mainland 140,973  176,769  Total commercial and industrial 594,592  606,936  Construction: Hawaii 153,392  145,182  U.S. Mainland 59,799  29  Total construction 213,191  145,211  Residential mortgage: Hawaii 1,839,191  1,892,520  Total residential mortgage 1,839,191  1,892,520  Home equity: Hawaii 600,082  676,982  Total home equity 600,082  676,982  Commercial mortgage: Hawaii 1,202,078  1,201,989  U.S. Mainland 392,355  298,691  Total commercial mortgage 1,594,433  1,500,680  Consumer: Hawaii 219,573  274,712  U.S. Mainland 228,034  235,811  Total consumer 447,607  510,523  Loans, net of deferred fees and costs: Hawaii (1) 4,467,935  4,621,552  U.S. Mainland (2) 821,161  711,300  Total loans, net of deferred fees and costs $ 5,289,096  $ 5,332,852  (1) Hawaii loans include Guam loans, which represent less 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. The Company strategically supplements its core Hawaii loan portfolio by selectively pursuing commercial, commercial real estate, and consumer loan opportunities on the U.S. Mainland. This approach enhances geographic, asset class, and rate type diversification, supports growth, and generally provides higher yields, while maintaining the Company's disciplined credit standards and underwriting practices. Hawaii loans totaled $4.47 billion, and accounted for 84% of the total loan portfolio as of December 31, 2025. The remaining $821.2 million, or 16% of the total loan portfolio, is made up loans on the U.S. Mainland. Commercial and Industrial Loans in this class consist primarily of term loans and lines of credit to small and middle-market businesses and professionals. The borrower's business is typically regarded as the principal source of repayment, although our underwriting policy and practice generally requires additional sources of collateral, including real estate and other business assets, as well as personal guarantees where possible to mitigate risk. Risk of credit losses could be greater in this loan class relative to secured loans where a greater percentage of the loan amount is usually covered by collateral. Nonetheless, any collateral or personal guarantees obtained on commercial loans can mitigate the increased risk and help to reduce credit losses. Our approach to commercial lending involves teams of lending and cash management personnel who focus on relationship development including loans, deposits and other bank services to new and existing commercial clients. 61 In 2025, our commercial and industrial loan portfolio decreased by $12.3 million, compared to an increase of $31.2 million in 2024. In 2025, the Company reclassified $58.3 million in Hawaii consumer loans to the Hawaii commercial and industrial loan class. This reclassification was based on the loans' structure and characteristics, which more closely aligned with commercial and industrial lending criteria. Hawaii commercial and industrial loans totaled $453.6 million at December 31, 2025, compared to $430.2 million at December 31, 2024. U.S. Mainland commercial and industrial loans totaled $141.0 million at December 31, 2025, compared to $176.8 million at December 31, 2024. Real Estate—Construction Construction loans include both residential and commercial development projects. Each construction project is evaluated for economic viability. Construction loans pose higher credit risks than secured loans. In addition to the financial strength of the borrower, construction loans have the added element of completion risk, which is the risk that the project will not be completed on time and within budget, resulting in additional costs that could affect the economic viability of the project and market risk at the time construction is complete. The construction loan portfolio increased by $68.0 million in 2025 compared to a $40.3 million decrease in 2024. These fluctuations are driven by the start and completion of construction projects and are consistent with a normal construction cycle. Hawaii construction loans totaled $153.4 million at December 31, 2025, compared to $145.2 million at December 31, 2024. U.S. Mainland construction loans totaled $59.8 million at December 31, 2025, compared to $29 thousand at December 31, 2024. Interest Reserves Our policies require interest reserves for construction loans, including loans to build commercial buildings, residential developments (both large tract projects and individual houses), and multi-family projects. The outstanding principal balance of loans with interest reserves was $181.1 million at December 31, 2025, compared to $102.2 million in the prior year, while remaining interest reserves was $23.6 million, or 13.0% of the outstanding principal balance of loans with interest reserves at December 31, 2025, compared to $9.7 million, or 9.5% of the outstanding principal balance of loans with interest reserves at December 31, 2024. Interest reserves allow the Company to advance funds to borrowers to make scheduled payments during the construction period. These advances typically are capitalized and added to the borrower's outstanding loan balance, although we have the right to demand payment under certain circumstances. Our policy is to determine if interest reserve amounts are appropriately included in each project's construction budget and are adequate to cover the expected duration of the construction period. The amount, terms, and conditions of the interest reserve are established when a loan is originated, although we generally have the option to demand payment if the credit profile of the borrower changes. We evaluate the viability and appropriateness of the construction project based on the project's complexity and feasibility, the timeline, as well as the creditworthiness of the borrowers, sponsors and/or guarantors, and the value of the collateral. In the event that unfavorable circumstances alter the original project schedule (e.g., cost overruns, project delays, etc.), our policy is to evaluate whether or not it is appropriate to maintain interest capitalization or demand payment of interest in cash and we will work with the borrower to explore various restructuring options, which may include obtaining additional equity and/or requiring additional collateral. We may also require borrowers to directly pay scheduled interest payments. Our process for assessing whether construction projects are moving as planned are detailed in our lending policies and guidelines. Prior to approving a loan, the Company and borrower generally agree on a construction budget, a proforma monthly disbursement schedule, and sales/leaseback assumptions. As each project progresses, the projections are measured against actual disbursements and sales/lease results to determine if the project is on schedule and performing as planned. The specific monitoring requirements for each loan vary depending on the size and complexity of the project and the experience and financial strength of the borrower, sponsor and/or guarantor. At a minimum, to ensure that loan proceeds are properly disbursed and to assess whether it is appropriate to capitalize interest or demand cash payment of interest, our monitoring process generally includes: 62 •Physical inspection of the project to ensure work has progressed to the stage for which payment is being requested; •Verification that the work completed is in conformance with plans and specifications and items for which disbursement is requested are within budget; and •Determination that there continues to be satisfactory project progress. In certain rare circumstances, we may decide to extend, renew, and/or restructure the terms of a construction loan due to cost overruns or project delays and restructuring can result in additional funds being advanced or an extension of the maturity date of the loan. Prior to the loan being restructured, our policy is to perform a detailed analysis to ensure that the economics of the project remain feasible and that the risks to the Company are within acceptable lending guidelines. Real Estate—Mortgage The following table sets forth information with respect to the composition of the Real Estate—Mortgage loan portfolio as of the dates indicated. Table 15. Mortgage Loan Portfolio Composition December 31, 2025 December 31, 2024 (Dollars in thousands) Amount Percent Amount Percent Residential: Closed-end $ 1,839,191  45.6  % $ 1,892,520  46.6  % Home equity line-of-credit ("HELOC") 600,082  14.9  676,982  16.6  Subtotal 2,439,273  60.5  2,569,502  63.2  Commercial: Owner-occupied nonfarm nonresidential 372,662  9.2  371,275  9.1  Other nonfarm nonresidential 892,100  22.1  832,088  20.4  Multi-family 329,671  8.2  297,317  7.3  Subtotal 1,594,433  39.5  1,500,680  36.8  Total mortgage loans $ 4,033,706  100.0  % $ 4,070,182  100.0  % Residential Residential mortgage loans include fixed-rate and adjustable-rate loans primarily secured by single-family owner-occupied primary residences in Hawaii. Maximum loan-to-value ratios of 80% are typically required for fixed-rate and adjustable-rate loans secured by single-family owner-occupied residences, although higher levels are permitted with accompanying mortgage insurance. First mortgage loans secured by residential properties generally carry a moderate level of credit risk. With an average loan origination size of approximately $0.6 million, marketable collateral and a stable Hawaii residential real estate market, credit losses on residential mortgage loans have historically been minimal. However, economic conditions including unemployment levels, future changes in interest rates and other market factors can impact the marketability and value of collateral and thus the level of credit risk inherent in the portfolio. Closed-end residential mortgage loan balances as of December 31, 2025 totaled $1.84 billion, decreasing by $53.3 million, or 2.8%, from the $1.89 billion held at year-end 2024, which decreased by $35.3 million, or 1.8%, from the $1.93 billion held at year-end 2023. The decrease in closed-end residential mortgage loan balances in 2025 was primarily due to lower origination activity primarily attributable to the high interest rate environment which began in 2022. All closed-end residential mortgage loans were concentrated in Hawaii. Residential mortgage loans held for sale at December 31, 2025 totaled $1.1 million, a decrease of $4.6 million, or 80.9%, from the December 31, 2024 balance of $5.7 million, which increased by $3.9 million, or 218.4%, from the December 31, 2023 balance of $1.8 million. We did not securitize any residential mortgage loans in 2025, 2024 and 2023. Home Equity Home equity lines of credit ("HELOCs"), which typically carry floating or fixed interest rates, are underwritten using a qualifying payment which assumes the line is fully drawn and is amortizing as if it was in the repayment period. Underwriting criteria include a minimum FICO score, maximum debt-to-income ratio ("DTI"), and maximum combined loan-to-value ratio 63 ("CLTV"). HELOCs are monitored based on default, delinquency, end of draw period, and maturity. All HELOCs originated since early 2011 have a ten-year draw period followed by a 20-year repayment period during which the principal balance will be fully amortized. HELOC balances as of December 31, 2025 totaled $600.1 million, decreasing by $76.9 million, or 11.4%, from the $677.0 million held at December 31, 2024, which decreased by $59.5 million, or 8.1%, from the $736.5 million held at December 31, 2023. All HELOCs were concentrated in Hawaii. Commercial Mortgage Real estate mortgage loans secured by commercial properties represent a sizable portion of our loan portfolio. Our policy requires that loans be made for sound purposes, have a definite source and/or plan of repayment established at inception, and be backed up by reliable secondary sources of repayment and satisfactory collateral with good marketability. Loans secured by commercial property carry a greater risk than loans secured by residential property due to operating income risk. Operating income risk is the risk that the borrower will be unable to generate sufficient cash flow from the operation of the property. The commercial real estate market and interest rate conditions through economic cycles will impact risk levels. Commercial mortgage balances as of December 31, 2025 totaled $1.59 billion, increasing by $93.8 million, or 6.2%, from the $1.50 billion held at December 31, 2024, which increased by $117.8 million, or 8.5%, from the $1.38 billion held at December 31, 2023. The increase in commercial mortgage balances in 2025 was primarily due to increased demand from both new and existing customers. Hawaii commercial real estate loans totaled $1.20 billion at December 31, 2025, compared to $1.20 billion at December 31, 2024. U.S. Mainland commercial real estate loans totaled $392.4 million at December 31, 2025, compared to $298.7 million at December 31, 2024. Consumer Loans The following table sets forth the major components of our consumer loan portfolio as of the dates indicated. Table 16. Consumer Loan Portfolio Composition December 31, 2025 December 31, 2024 (Dollars in thousands) Amount Percent Amount Percent Automobile $ 278,084  62.1  % $ 242,640  47.5  % Purchased unsecured consumer and home improvement 95,994  21.4  138,174  27.1  Other revolving credit plans 39,238  8.8  94,209  18.5  Other 34,291  7.7  35,500  6.9  Total consumer $ 447,607  100.0  % $ 510,523  100.0  % For consumer loans, credit risk is managed on a pooled basis. Considerations include an evaluation of the quality, character and inherent risks in the loan portfolio, current and projected economic conditions and past loan loss experience. Consumer loans represent a moderate credit risk. Loans in this class are either unsecured or secured by personal assets such as automobiles. The average loan size is generally small and risk is diversified among many borrowers. Our policy is to utilize credit-scoring systems for most of our consumer loans, which offer the ability to manage credit exposure based on our risk tolerance and loss experience. From time to time, we will tactically deploy funds, which are not utilized in our current short-term core lending markets, by purchasing certain consumer loan portfolios. Consumer loans totaled $447.6 million at December 31, 2025, decreasing by $62.9 million, or 12.3%, from December 31, 2024 of $510.5 million, which decreased by $120.0 million, or 19.0%, compared to the $630.5 million held at December 31, 2023. At December 31, 2025, automobile loans, primarily indirect dealer loans and loans purchased from third-party originators, comprised 62.1% of consumer loans outstanding. Total automobile loans of $278.1 million at December 31, 2025 increased by $35.4 million, or 14.6%, from December 31, 2024 of $242.6 million, which decreased by $40.3 million, or 14.3%, from $283.0 million at December 31, 2023. In 2025, we purchased $99.6 million in U.S. Mainland automobile loans, which included a $2.1 million premium over the $97.5 million outstanding balance. In 2024, we purchased U.S. Mainland automobile loans totaling $49.4 million, which 64 included a $1.9 million premium over the $47.6 million outstanding balance. In 2023, we purchased U.S. Mainland automobile loans totaling $15.7 million, which included a $0.6 million premium over the $15.2 million outstanding balance. Purchased unsecured consumer and home improvement loans of $96.0 million at December 31, 2025 decreased by $42.2 million, or 30.5%, from December 31, 2024 of $138.2 million, which decreased by $75.2 million, or 35.2%, from $213.4 million at December 31, 2023. In 2025 and 2024, we did not purchase any U.S. Mainland unsecured consumer loans. In 2023, we purchased U.S. Mainland unsecured consumer loans under forward flow purchase agreements with outstanding balances totaling $3.9 million at par. Other revolving credit plans include extensions of credit to individuals and totaled $39.2 million at December 31, 2025, which decreased by $55.0 million, or 58.4%, from December 31, 2024 of $94.2 million, which decreased by $6.0 million, or 6.0%, from $100.3 million at December 31, 2023. The decline from December 31, 2024 to December 31, 2025 was primarily due to the reclassification of $58.3 million in other revolving credit plans to the commercial and industrial loan class. This reclassification was based on the loans' structure and characteristics, which more closely aligned with commercial and industrial lending criteria. Other consumer loans of $34.3 million at December 31, 2025 decreased by $1.2 million, or 3.4%, from December 31, 2024 of $35.5 million, which increased by $1.6 million, or 4.7%, from $33.9 million at December 31, 2023. Concentrations of Credit Risk As of December 31, 2025, approximately $4.25 billion, or 80.3% of loans outstanding were secured by real estate, including construction loans, residential mortgage loans, home equity loans, and commercial mortgage loans. As of December 31, 2024, t approximately $4.22 billion, or 79.0% of loans outstanding were secured by real estate, including construction loans, residential mortgage loans, home equity loans, and commercial mortgage loans. The majority of our loans are made to companies and individuals with headquarters in, or residing in, the State of Hawaii. Consistent with our focus of being a Hawaii-based bank, 84% of our loan portfolio was concentrated in the Hawaii market, while 16% was concentrated in the U.S. Mainland as of December 31, 2025. As of December 31, 2024, 87% of our loan portfolio was concentrated in the Hawaii market, and 13% was concentrated on the U.S. Mainland. Our foreign credit exposure as of December 31, 2025 and December 31, 2024 was minimal and did not exceed 1% of total assets. Maturity Distribution and Sensitivities of Loans to Changes in Interest Rates Commercial loans and commercial mortgage loans with variable interest rates are underwritten at the current market interest rate. For commercial loans and commercial real estate loans with an initial fixed-rate period that are not fully amortizing, underwriting is also based on the current market interest rate. At the end of the fixed-rate period and/or maturity, the projected loan balance at that time is underwritten using an interest rate equal to the current market interest rate plus 2% per annum. For variable-rate residential mortgage loans with initial fixed-rate periods of five years or less, qualifying payments are calculated using the greater of (a) the note rate plus 2% per annum, or (b) the fully indexed rate. For variable-rate loans with a fixed-rate period of longer than five years, qualifying payments are based on the greater of the note rate or the fully indexed rate. The qualifying payment for HELOCs is based on the fully indexed rate plus the required principal and interest payment during the repayment period, assuming the line is fully drawn. For consumer lines of credit, qualifying payments are calculated using a percentage of the credit limit that exceeds the actual required payment based on the fully indexed interest rate. The following table presents the maturity distribution and sensitivities of the loan portfolio to changes in interest rates at December 31, 2025. Maturities are based on contractual maturity dates and do not factor in principal amortization. This differs from the assumptions used in the net interest income sensitivity analysis included in Table 25 - Net Interest Income Sensitivity. 65 Table 17. Maturity Distribution and Sensitivities of Loans to Changes in Interest Rates Maturing One Year or Less Over One Through Five Years Over Five Through Fifteen Years Over  Fifteen Years Total Percentage (Dollars in thousands) Commercial and industrial: With fixed interest rates $ 6,728  $ 168,282  $ 76,770  $ —  $ 251,780  42.3  % With variable interest rates 36,075  229,491  18,186  59,060  342,812  57.7  % Total commercial and industrial 42,803  397,773  94,956  59,060  594,592  100.0  % Construction: With fixed interest rates 1,377  33,619  9,376  —  44,372  20.8  % With variable interest rates 77,410  64,090  25,198  2,121  168,819  79.2  % Total construction 78,787  97,709  34,574  2,121  213,191  100.0  % Residential mortgage: With fixed interest rates 246  14,543  245,236  1,269,495  1,529,520  83.2  % With variable interest rates 2  1,284  22,811  285,574  309,671  16.8  % Total residential mortgage 248  15,827  268,047  1,555,069  1,839,191  100.0  % Home equity: With fixed interest rates 6,732  10,665  33,277  26,697  77,371  12.9  % With variable interest rates 3,260  4,677  23,053  491,721  522,711  87.1  % Total home equity 9,992  15,342  56,330  518,418  600,082  100.0  % Commercial mortgage: With fixed interest rates 27,755  521,084  224,285  —  773,124  48.5  % With variable interest rates 149,454  465,005  206,850  —  821,309  51.5  % Total commercial mortgage 177,209  986,089  431,135  —  1,594,433  100.0  % Consumer: With fixed interest rates 12,658  290,542  40,415  67,722  411,337  91.9  % With variable interest rates 5,420  2,909  —  27,941  36,270  8.1  % Total consumer 18,078  293,451  40,415  95,663  447,607  100.0  % All loans: With fixed interest rates 55,496  1,038,735  629,359  1,363,914  3,087,504  58.4  % With variable interest rates 271,621  767,456  296,098  866,417  2,201,592  41.6  % Gross loans $ 327,117  $ 1,806,191  $ 925,457  $ 2,230,331  $ 5,289,096  100.0  % 66 Nonperforming Assets, Accruing Loans Delinquent for 90 Days or More, Restructured Loans Still Accruing Interest The following table presents nonperforming assets ("NPAs") and accruing loans delinquent for 90 days or more as of the dates presented: Table 18. Nonperforming Assets, Past Due and Restructured Loans (Dollars in thousands) December 31, 2025 December 31, 2024 Nonaccrual loans (1) Commercial and industrial $ 591  $ 414  Residential mortgage 10,572  9,044  Home equity 2,608  952  Consumer 615  608  Total nonaccrual loans 14,386  11,018  Other real estate owned ("OREO") Total other real estate owned ("OREO") —  —  Total nonperforming assets ("NPAs") 14,386  11,018  Accruing loans delinquent for 90 days or more Real estate: Residential mortgage 664  323  Home equity 485  78  Consumer 403  373  Total accruing loans delinquent for 90 days or more 1,552  774  Total NPAs and accruing loans delinquent for 90 days or more $ 15,938  $ 11,792  (Dollars in thousands) December 31, 2025 December 31, 2024 Ratios: Ratio of nonaccrual loans to total loans 0.27  % 0.21  % Ratio of NPAs and accruing loans delinquent for 90 days or more to total loans and OREO 0.30  % 0.22  % Ratio of classified assets and OREO to tier 1 capital and ACL 8.56  % 3.17  % Year-to-date changes in NPAs: Balance at beginning of year $ 11,018  $ 7,008  Additions 11,663  11,632  Reductions: Payments (1,882) (1,991) Return to accrual status (3,338) (650) Charge-offs, valuation and other reductions (3,075) (4,981) Total reductions (8,295) (7,622) Balance at end of year $ 14,386  $ 11,018  Nonperforming assets, which includes nonaccrual loans, nonperforming loans classified as held for sale, and other real estate owned, totaled $14.4 million, or 0.19% of total assets at December 31, 2025, compared to $11.0 million, or 0.15% of total assets at December 31, 2024. Nonperforming assets at December 31, 2025 were comprised entirely of nonaccrual loans totaling $14.4 million, none of which were loans classified as held for sale. The majority of the nonaccrual loans are in the residential mortgage class which are well-collateralized with strong loan-to-value ratios. The increase in nonperforming assets in 2025 was attributable to $11.7 million in gross additions, offset by $1.9 million in repayments, $3.3 million in loans returned to accrual status, and $3.1 million in charge-offs, valuation adjustments and other reductions. Net changes to nonperforming assets by class during 2025 included net increases in residential mortgage loans of $1.5 million and home equity loans of $1.7 million. 67 Loans delinquent for 90 days or more still accruing interest totaled $1.6 million at December 31, 2025, compared to $0.8 million at December 31, 2024. During the year ended December 31, 2025 and 2024, the Company did not modify any loans for borrowers experiencing financial difficulty that were determined to be material under management's judgment for further disclosure. Criticized loans at December 31, 2025 increased by $38.3 million from December 31, 2024 to $71.2 million, or 1.3% of the total loan portfolio. Within criticized loans, special mention loans declined by $5.0 million to $3.6 million, or 0.1% of the total loan portfolio, and classified loans increased by $43.3 million to $67.6 million, or 1.3% of the total loan portfolio. The increase in criticized loans was primarily due to the downgrade of an owner-occupied commercial real estate loan to classified during the second quarter of 2025. The loan remains performing and is adequately collateralized. The Company's ratio of classified assets and other real estate owned to Tier 1 capital plus the ACL increased from 3.17% at December 31, 2024 to 8.56% at December 31, 2025. Provision and Allowance for Credit Losses on Loans As described above under the "Critical Accounting Policies and Use of Estimates" section, the provision for credit losses ("Provision") for loans is determined by management's ongoing evaluation of the loan portfolio and our assessment of the ability of the ACL on loans to cover expected credit losses for loans. Our methodology for determining the adequacy of the ACL and Provision for loans takes into account many factors, including the level and trend of nonperforming and potential problem loans, net charge-off experience, current repayment by borrowers, prepayment assumptions, fair value of collateral securing specific loans, changes in lending and underwriting standards and general economic factors, nationally and in the markets we serve. The Company maintains its ACL at an appropriate level as of a given balance sheet date to absorb management's best estimate of expected credit losses in its loan portfolios that will likely be realized over the expected life of our loan portfolio. This is based upon management's comprehensive analysis of the risk profiles particular to the respective loan portfolios. Analysis of the appropriateness of the ACL on loans is performed quarterly to coincide with financial disclosure to the public and to the regulatory agencies and is governed by a policy and methodology approved by the Audit Committee of the Board of Directors. 68 The following table presents certain information with respect to the ACL on loans as of the dates and for the periods presented: Table 19. Allowance for Credit Losses on Loans Year Ended December 31, (Dollars in thousands) 2025 2024 2023 Allowance for Credit Losses ("ACL") for Loans Balance at beginning of period $ 59,182  $ 63,934  $ 63,738  Charge-offs: Commercial and industrial 5,187  2,977  1,962  Residential mortgage —  383  —  Consumer 11,496  16,866  17,245  Total 16,683  20,226  19,207  Recoveries: Commercial and industrial 836  536  720  Construction 4  —  1  Residential mortgage 34  36  77  Home equity 30  6  57  Consumer 3,378  3,934  3,313  Total 4,282  4,512  4,168  Net loan charge-offs 12,401  15,714  15,039  Provision for credit losses for loans 12,840  10,962  15,235  Balance at end of period $ 59,621  $ 59,182  $ 63,934  Average loans outstanding $ 5,320,258  $ 5,358,059  $ 5,508,530  Ratios: ACL to total loans 1.13  % 1.11  % 1.18  % ACL to nonaccrual loans 414.44  % 537.14  % 912.30  % Net loan charge-offs to average loans outstanding 0.23  % 0.29  % 0.27  % The Company's ACL on loans at December 31, 2025 totaled $59.6 million, which increased by $0.4 million, or 0.7%, from $59.2 million at December 31, 2024, which decreased by $4.8 million, or 7.4%, from $63.9 million at December 31, 2023. The ACL as a percentage of loans was 1.13%, 1.11%, and 1.18% as of December 31, 2025, 2024 and 2023, respectively. During 2025, we recognized a Provision of $15.7 million, which included a Provision for loans of $12.8 million, and a Provision for off-balance sheet credit exposures of $2.9 million. During 2024, we recognized a Provision of $9.8 million, which included a Provision for loans of $11.0 million, offset by a credit to the Provision for off-balance sheet credit exposures of $1.1 million. During 2023, we recognized a Provision of $15.7 million, which included a Provision for loans of $15.2 million, and a Provision for off-balance sheet credit exposures of $0.5 million. The increase in our ACL on loans as a percentage of total loans from December 31, 2024 to December 31, 2025 and the increase in the Provision in 2025 reflects improvements in the economic forecast while maintaining adequate coverage for our loan portfolio. Our ACL on loans as a percentage of our nonaccrual loans decreased to 414% at December 31, 2025, from 537% at December 31, 2024, which decreased from 912% at December 31, 2023. 69 Overall, the Company maintained strong credit quality as represented by nonperforming assets of $14.4 million, $11.0 million, and $7.0 million at December 31, 2025, 2024 and 2023, respectively. Net charge-offs were $12.4 million, $15.7 million, and $15.0 million, respectively, for the years ended December 31, 2025, 2024 and 2023. The following table presents the allocation of the ACL by loan class as of the dates indicated. The Company applies specific allocations on individually evaluated loans and general allocations to loan classes based on management's assessment of credit risk and estimated loss rates. Table 20. Allocation of Allowance for Credit Losses on Loans December 31, 2025 December 31, 2024 (Dollars in thousands) ACL on Loans ACL % of Loan Class Loan Class as a % of Total Loans ACL on Loans ACL % of Loan Class Loan Class as a % of Total Loans Commercial and industrial $ 7,982  1.34  % 11.2  % $ 7,113  1.17  % 11.4  % Construction 3,815  1.79  4.0  2,316  1.59  2.7  Residential mortgage 14,219  0.77  34.9  15,267  0.81  35.5  Home equity 1,242  0.21  11.3  2,335  0.34  12.7  Commercial mortgage 19,544  1.23  30.1  18,882  1.26  28.1  Consumer 12,819  2.86  8.5  13,269  2.60  9.6  Total $ 59,621  1.13  % 100.0  % $ 59,182  1.11  % 100.0  % In accordance with GAAP, loans held for sale and other real estate assets are not included in our assessment of the ACL. The following table presents the ratio of annualized net charge-offs (recoveries) to average loans by loan class for the periods presented: Table 21. Annualized Net Charge-offs (Recoveries) to Average Loans by Loan Class Year Ended December 31, 2025 2024 2023 Commercial and industrial 0.08  % 0.05  % 0.02  % Residential mortgage —  0.01  —  Consumer 0.15  0.23  0.25  Total 0.23  % 0.29  % 0.27  % Deposits The primary source of our funding comes from deposits in the Hawaii market. In this competitive market, we strive to distinguish ourselves by providing exceptional customer service in our branch offices and through digital channels, and establishing long-term relationships with businesses and their principals. Our focus has been to develop a large, stable base of core deposits, which are comprised of non-interest bearing and interest-bearing demand deposits, savings and money market deposits, and time deposits less than $250,000. Time deposits in amounts of $250,000 and greater are generally considered to be more price-sensitive than relationship-based and are thus given less focus in our marketing and sales efforts. 70 The following table sets forth the composition of our deposits by category as of the dates indicated. Table 22. Deposits by Category (Dollars in thousands) December 31, 2025 December 31, 2024 Noninterest-bearing demand deposits $ 1,891,198  $ 1,888,937  Interest-bearing demand deposits 1,388,107  1,338,719  Savings and money market deposits 2,346,522  2,329,170  Time deposits up to $250,000 433,629  483,378  Core deposits 6,059,456  6,040,204  Other time deposits greater than $250,000 412,188  500,693  Government time deposits 138,120  103,114  Total time deposits greater than $250,000 550,308  603,807  Total deposits $ 6,609,764  $ 6,644,011  The Company's deposit portfolio is well-diversified and reflects a long standing commitment to relationship-based banking. As of December 31, 2024, approximately 53% 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 established relationships with Japanese and Korean regional banks, corporations, and non-resident alien individuals, 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. Total deposits were $6.61 billion at December 31, 2025 which decreased by $34.2 million, or 0.5%, from total deposits of $6.64 billion at December 31, 2024. Total deposits at December 31, 2024 decreased by $203.6 million, or 3.0%, from $6.85 billion at December 31, 2023. The decrease in deposits in 2025 reflects net decreases in other time deposits greater than $250,000 (excluding government time deposits) of $88.5 million and other time deposits up to $250,000 totaling $49.7 million. The net decreases were partially offset by increases in government time deposits of $35.0 million, savings and money market deposits of $17.4 million, interest-bearing demand deposits of $49.4 million, and noninterest-bearing demand deposits of $2.3 million. The Company did not hold any wholesale, brokered or listing service deposits at December 31, 2025. Our loan-to-deposit ratio at December 31, 2025 was 80.0% compared to 80.3% at December 31, 2024. Core deposits, which the Company defines as demand deposits, savings and money market deposits, and time deposits up to $250,000, totaled $6.06 billion at December 31, 2025, and increased by $19.25 million, or 0.3%, from December 31, 2024, which increased by $0.05 billion or 0.9% from December 31, 2023. Core deposits represented 91.7% of total deposits at December 31, 2025, compared to 90.9% at December 31, 2024, and 87.4% at December 31, 2023. All deposits are insured up to applicable limits by the Deposit Insurance Fund of the FDIC. Estimated uninsured deposits totaled $2.78 billion, or approximately 42% of total deposits, as reported in the Bank's FDIC Call Report as of December 31, 2025, compared to $2.82 billion, or approximately 42% of total deposits as of December 31, 2024. Fully collateralized deposits totaled approximately $281.0 million and $282.3 million as of December 31, 2025 and December 31, 2024, respectively. Excluding fully collateralized deposits, estimated uninsured deposits totaled $2.49 billion, or approximately 38% of total deposits as of December 31, 2025, and $2.54 billion, or approximately 38% of total deposits as of December 31, 2024. 71 The table presents the contractual maturities of our time deposits greater than the FDIC insurance limit of $250,000 as of December 31, 2025. Table 23. Contractual Maturities of Time Deposits Greater Than $250,000 (Dollars in thousands) Remaining maturity: Three months or less $ 333,394  Over three months through twelve months 212,912  Over one year through three years 3,486  Over three years 516  Total $ 550,308  For additional information regarding the contractual maturities of our time deposits, See Note 9 - Deposits to the Consolidated Financial Statements under "Part II, Item 8. Financial Statements and Supplementary Data." The table below presents information regarding the average balances and average rates paid for certain deposit categories for the periods presented. Table 24. Average Balances and Average Rates Paid on Deposits Year Ended December 31, 2025 2024 (Dollars in thousands) Average Balance Average Rate Paid Average Balance Average Rate Paid Noninterest-bearing demand deposits $ 1,824,581  —  % $ 1,794,469  —  % Interest-bearing demand deposits 1,357,433  0.13  1,287,628  0.17  Savings and money market deposits 2,302,973  1.48  2,263,273  1.64  Time deposits 1,033,163  2.92  1,225,620  3.76  Interest-bearing deposits 4,693,569  1.41  4,776,521  1.79  Total deposits $ 6,518,150  1.01  % $ 6,570,990  1.30  % Average balances are computed using daily average balances. The average rate paid on time deposits decreased by 84 bps in 2025 and the average rate paid on savings and money market deposit rates decreased by 16 bps. The average rate paid on total interest-bearing deposits decreased 38 bps to 1.41% in 2025 from 1.79% in 2024, which increased from 1.32% in 2023. The average rate paid on all deposits decreased 29 bps to 1.01% in 2025 from 1.30% in 2024, which increased from 0.94% in 2023. Based on the Federal Open Market Committee's December 2025 decision to reduce the federal funds rate by 25 basis points, bringing the target range to 3.50% to 3.75%, and its accompanying dot plot projecting a single additional rate cut in 2026, the Company now anticipates interest rates will decline modestly through 2026. However, rates remain subject to shifts in inflation dynamics, labor market conditions, and economic data, and the Fed has signaled a cautious, data-dependent approach to further policy easing. Notwithstanding this external rate environment, the Company expects overall deposit rates to decline gradually, as maturing time deposits reprice. Further, the direction and magnitude of rate movements in our deposit base will continue to depend on the amount of deposit growth required to maintain adequate liquidity, competitive pricing pressures within the market, and the Fed’s evolving guidance and economic outlook. In summary, while the Company believes policy rates are likely to drift lower modestly over time, the pace and extent of these changes will be determined by both external macroeconomic trends and internal liquidity and strategic considerations. Contractual Obligations The Company has various contractual obligations and future cash commitments that are expected to have an impact on its liquidity and capital resources. The Company believes that it will be able to fund these obligations through a combination of 72 operating cash flows, existing cash on hand, and available credit facilities. The Company's primary contractual obligations relate to long‑term debt, obligations associated with the Company's Supplemental Executive Retirement Plan ("SERP") obligations, noncancellable operating lease arrangements primarily related to branch premises, and unfunded commitments related to investments in LIHTC partnerships and other unconsolidated entities. The Company routinely evaluates its capital structure and may refinance, modify, or repay obligations before their scheduled maturities if market conditions and strategic considerations warrant. Components of long-term debt are discussed in Note 10 - Short-Term Borrowings and Long-Term Debt to the Consolidated Financial Statements under "Part II, Item 8. Financial Statements and Supplementary Data." The Company's SERP obligations are discussed in Note 14 - Retirement Benefits to the Consolidated Financial Statements under "Part II, Item 8. Financial Statements and Supplementary Data." Operating leases are discussed in Note 15 - Operating Leases to the Consolidated Financial Statements under "Part II, Item 8. Financial Statements and Supplementary Data." Unfunded commitments related to our investments in LIHTC partnerships and other unconsolidated entities are discussed in Note 6 - Investments in Unconsolidated Entities to the Consolidated Financial Statements under "Part II, Item 8. Financial Statements and Supplementary Data.". In addition to the contractual obligations noted above, the Company enters into numerous purchase obligations that arise from agreements to purchase goods or services in the ordinary course of business. These purchase obligations include, but not limited to, software licensing agreements, equipment maintenance contracts, and professional service contracts supporting bank operations at specified terms. Some of these contracts are renewable or cancellable annually or in shorter time intervals. To secure favorable pricing, we may also commit to contracts that may extend several years. Other material cash requirements may also include general corporate operating activities and capital transactions. Contractual obligations do not include off-balance sheet arrangements. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees written, forward foreign exchange contracts, forward interest rate contracts and interest rate swaps and options. These instruments and the related off-balance sheet exposures are discussed in detail in Note 20 - Financial Instruments With Off-Balance Sheet Risk to the Consolidated Financial Statements under "Part II, Item 8. Financial Statements and Supplementary Data." 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, regulatory capital requirements, and overall risk. 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 or share repurchases. Common and Preferred Equity Total shareholders' equity was $592.6 million at December 31, 2025, reflecting an increase of $54.2 million, or 10.1%, from the $538.4 million at December 31, 2024, which increased by $34.6 million, or 6.9%, from December 31, 2023. The increase in shareholders' equity from December 31, 2024 to December 31, 2025 was primarily attributable to net income of $77.5 million and other comprehensive income of $27.2 million, partially offset by cash dividends paid of $29.4 million and the repurchase of 788,261 shares of common stock at a total cost of $23.3 million, under the Company's stock repurchase program. During 2025, the Company repurchased approximately 2.9% of its common stock outstanding at December 31, 2024. The increase in shareholders' equity from December 31, 2023 to December 31, 2024 was primarily attributable to net income of $53.4 million and other comprehensive income of $8.2 million, partially offset by cash dividends paid of $28.1 million, and the repurchase of 49,960 shares of common stock at a total cost of $0.9 million. During 2024, the Company repurchased approximately 0.2% of its common stock outstanding at December 31, 2023. The ratio of total shareholders' equity to total assets was 8.0% at December 31, 2025, compared to 7.2% at December 31, 2024 and 6.6% at December 31, 2023. The increase in the ratio of shareholders' equity to total assets from 2024 to 2025 was primarily attributable to higher net income in 2025, and lower unrealized losses on available-for-sale investment securities recorded in accumulated other comprehensive income as of December 31, 2025 compared to December 31, 2024, partially offset by higher repurchases of common stock under the stock repurchase program during the year ended December 31, 2025. 73 The increase in our ratio of shareholders' equity to total assets from 2023 to 2024 was primarily attributable to lower unrealized losses on available-for-sale investment securities recorded in accumulated other comprehensive income as of December 31, 2024 compared to December 31, 2023, and lower repurchases of common stock under the stock repurchase program during the year ended December 31, 2024. Book value per share was $22.47, $19.89, and $18.63 at year-end 2025, 2024 and 2023, respectively. The increase in book value per share from 2024 was primarily attributable to the increase in shareholders' equity from December 31, 2024 to December 31, 2025, as described above. Trust Preferred Securities As of December 31, 2025, we have two remaining statutory trusts, CPB Capital Trust IV ("Trust IV") and CPB Statutory Trust V ("Trust V"), which issued a total of $50.0 million in floating rate trust preferred securities. On July 3, 2023, following the cessation of the LIBOR benchmark rate on June 30, 2023, the Company amended the debt agreements of Trust IV and Trust V to adopt the CME Term Secured Overnight Financing Rate ("SOFR"), plus a tenor spread adjustment. Under Accounting Standards Codification ("ASC") 848, these modifications were accounted for as a continuation of the existing contracts. The $30.0 million in floating rate trust preferred securities of Trust IV now bear interest at the three-month CME Term SOFR plus a tenor spread adjustment of 0.26% plus 2.45%. The $20.0 million in floating rate trust preferred securities of Trust V now bear an interest rate at the three-month CME Term SOFR plus a tenor spread adjustment of 0.26% plus 1.87%. 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. The Company is not considered the primary beneficiary of Trusts IV and V. Therefore, the trusts are not considered variable interest entities and are not consolidated in the Company's financial statements. Instead, the junior subordinated debentures are reported as liabilities on the Company's consolidated balance sheets, while the Company's investments in the common securities of the trusts are recorded under investment in unconsolidated entities in the Company's consolidated balance sheets. Subordinated Notes On October 20, 2020, the Company completed a $55.0 million private placement of ten-year fixed-to-floating rate subordinated notes, which was used to support regulatory capital ratios and for general corporate purposes. These notes were subsequently exchanged for registered notes with identical terms at the end of the fourth quarter of 2020. The notes bore a fixed interest rate of 4.75% for the first five years through November 1, 2025, after which the interest rate resets quarterly to the then current three-month Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York, plus 456 basis points. The subordinated notes were callable on any quarterly interest payment date on or after November 1, 2025. On September 11, 2025, the Company provided notice to the trustee of its plan for full redemption of the subordinated notes, at par, on November 1, 2025. On October 1, 2025, the Company notified holders of its 4.75% fixed-to-floating rate subordinated notes due in 2030, that it would be redeeming the notes in full on the November 1, 2025 call date. These notes, which totaled $55.0 million in principal outstanding were redeemed at par in November 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 which fund payments on the outstanding trust preferred securities and subordinated notes. CPF relies on dividends from the Bank to meet its obligations. On a stand-alone basis, CPF had an available cash balance of $5.5 million as of December 31, 2025, compared to $23.0 million as of December 31, 2024. 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 $234.7 million and $196.8 million, as of December 31, 2025 and 2024, respectively. 74 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 and subordinated notes. There is no assurance that dividends will continue at the current rate or at all. For further information, see the "Dividends — Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities" section. Share Repurchases We repurchase shares of our common stock when we believe such repurchases are in the best interests of the Company and our shareholders. In January 2026, the Company’s Board of Directors approved a new authorization to repurchase of up to $55.0 million of its common stock from time to time in the open market or in privately negotiated transactions (the "2026 Repurchase Plan"), pursuant to a newly authorized share repurchase program. The 2026 Repurchase Plan replaces and supersedes in its entirety the 2025 Repurchase Plan. In January 2025, the Company’s Board of Directors authorized a new share repurchase program (the "2025 Repurchase Plan") allowing the Company to repurchase of up to $30 million of its common stock in open market or privately negotiated transactions. The 2025 Repurchase Plan superseded the prior repurchase authorization in its entirety. In 2025, 788,261 shares of common stock, at a cost of $23.3 million, were repurchased under the Company's 2025 Repurchase Plan. In January 2024, the Company’s Board of Directors authorized a new share repurchase program (the "2024 Repurchase Plan") allowing the Company to repurchase of up to $20 million of its common stock in open market or privately negotiated transactions. The 2024 Repurchase Plan superseded the prior repurchase authorization in its entirety. In 2024, 49,960 shares of common stock, at an aggregate cost of $0.9 million, were repurchased under the 2024 Repurchase Plan. The Company will continue to monitor the environment, capital needs, and assess risk and return as part of its ongoing capital management decisions on future share repurchases, and there can be no assurance that the Company will repurchase shares of its common stock in the future. Transaction Risk Transaction risk refers to the risk to earnings or capital arising from problems in delivering service, activities, or products. This risk is significant for any bank and is closely interconnected with other risk categories across most Company activities. Transaction risk is influenced by internal controls, information systems, employee integrity, and operating processes. It occurs daily as transactions are processed and is inherent in all products and services offered by the Company. The Company categorizes transaction risk by major area as high, medium or low. Our audit plan ensures that high-risk areas are reviewed annually. We employ both internal auditors and independent audit firms to test key operational controls and audit information systems, compliance programs, loan programs, and trust services. Effective management of transaction risk depends on the design, documentation, and implementation of well-defined procedures and controls. However, any system of controls, no matter how well designed, can only provide reasonable assurance, not absolute certainty, that objectives will be achieved. Compliance Risk Compliance risk is the risk to earnings or capital arising from violations of, or non-conformance with, laws, rules, regulations, prescribed practices, or ethical standards. It may also arise when laws or rules governing certain products or activities are ambiguous or untested. Compliance risk exposes the Company to potential fines, civil money penalties, damages, and contract voidance. It can also lead to reputational harm, reduced business value, limited growth opportunities, and diminished enforceability of contracts. To mitigate this risk, the Company engages independent external firms to conduct compliance audits and identify program weaknesses. Compliance risk has no single source, it is inherent in all activities and often overlaps with operational risk and transaction risk. A portion of this risk, sometimes referred to as legal risk, encompasses not only consumer protection laws but all applicable laws, ethical standards, and contractual obligations. It also includes exposure to litigation across all aspects of banking, both traditional and non-traditional. 75 Our risk management policies and code of ethical conduct serve as the foundation for controlling compliance risk. A critical component of this effort is employee training and development. The Director of Compliance is responsible for designing and executing a comprehensive compliance training program, in consultation with internal and external legal counsel, to ensure employees receive training appropriate to their roles. The Company's risk management program includes a risk-based audit approach to identify internal control deficiencies. Independent audits are conducted under the direction of the Director of Internal Audit, supplemented by external firms, and supported by periodic monitoring by risk management personnel. An annual Audit Plan is developed and presented to the Audit Committee for approval. Our risk management team conducts ongoing monitoring of compliance efforts, focusing on areas with heightened exposure. Monitoring activities verify adherance to established policies and procedures, and any material exceptions are reported to the appropriate department head, the Audit Committee, and the Board Risk Committee. We also recognize that customer complaints can highlight weaknesses in our compliance program. Accordingly, all complaints receive prompt attention. The Director of Compliance reviews formal complaints to determine if significant compliance risk exists and communicates findings to the Board Risk Committee. Strategic Risk Strategic risk refers to the risk to earnings or capital arising from adverse strategic decisions or the improper implementation of those decisions. This risk is influenced by the alignment between the Company's goals, the resources allocated to achieve those goals, and the quality of execution. The Company identifies and evaluates strategic risks as part of its annual strategic planning process. Offsite planning sessions are conducted with members of the Board of Directors and Executive Committee, incorporating a comprehensive review that includes: an economic assessment, competitive analysis, industry outlook, and regulatory and risk review. A primary measure of strategic risk is peer group analysis, where key performance ratios are compared to U.S. banks of similar size and complexity, as well as banks operating in the Hawaii market. This comparison helps to identify potential weaknesses and opportunities for improvement. Another important measure is the evaluation of actual results versus expected outcomes for prior strategic initiatives. This comparison provides insight into the effectiveness of strategy execution and informs future decision-making. 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. 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 and off-balance sheet contracts represents the EVE for each scenario. The EVE results 76 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 reflects our static net interest income sensitivity analysis as of December 31, 2025. The simulations estimate net interest income assuming no balance sheet growth. 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. Table 25. Net Interest Income Sensitivity December 31, 2025 December 31, 2024 Estimated Net Interest Income Sensitivity Estimated Net Interest Income Sensitivity Rate Change Gradual Instantaneous Gradual Instantaneous +300 bps 2.58  % 4.33  % 3.03  % 4.00  % +200 bps 1.60  % 2.93  % 1.91  % 2.68  % +100 bps 0.60  % 1.49  % 0.84  % 1.36  % -100 bps (0.83) % (1.06) % (1.36) % (2.21) % -200 bps (1.54) % (2.57) % (2.93) % (4.74) % -300 bps (2.35) % (4.51) % (4.55) % (7.41) % Liquidity Risk 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 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, the Federal Reserve discount window, and brokered deposits. 77 At December 31, 2025, the Company had $378.7 million in cash on its balance sheet and approximately $2.52 billion in total other liquidity sources, including available borrowing capacity and unpledged investment securities. Total available sources of liquidity as a percentage of uninsured and uncollateralized deposits was approximately 116% at December 31, 2025. Refer to Note 10 - 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. Off-Balance Sheet Arrangements In the normal course of business, we enter into off-balance sheet arrangements to meet the financing needs of our banking customers. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees written, forward foreign exchange contracts, forward interest rate contracts, interest rate swaps and options, and risk participation agreements. These instruments and the related off-balance sheet exposures are discussed in detail in Note 20 - Financial Instruments With Off-Balance Sheet Risk to the Consolidated Financial Statements under "Part II, Item 8. Financial Statements and Supplementary Data." In the unlikely event that we must satisfy a significant amount of outstanding commitments to extend credit, liquidity may be adversely impacted, as may credit risk. The remaining components of off-balance sheet arrangements, primarily interest rate options and forward interest rate contracts related to our mortgage banking activities, are not expected to have a material impact on our consolidated financial position or results of operations. 78