Executive Summary

Q2 2025 delivered solid core momentum: EPS was $0.67 on net income of $18.3M, with NIM expanding 13 bps to 3.44% and the efficiency ratio improving to 60.36% as mix shifts and lower deposit costs offset modest balance sheet contraction .
Versus S&P Global consensus, EPS slightly missed ($0.67 vs. $0.70*) and revenue missed ($67.8M* vs. $71.8M*), though company “total revenue” (NII + noninterest) was $72.8M; definitional differences likely explain part of the gap . Values retrieved from S&P Global.
Asset quality remained within range: NPAs rose to 0.20% of assets and annualized net charge-offs ticked to 0.35%, driven by an idiosyncratic $2.0M C&I charge-off; ACL/loans held at 1.13% .
Guidance/forward look: management continues to target low single-digit 2025 loan/deposit growth; near-term opex run-rate was raised to $43.5–$44.5M/quarter (from $42.5–$43.5M in Q1), with a one-time $2.0–$2.5M write-off tied to exiting the ops center by year-end and a 22–24% tax rate .
Potential stock reaction catalysts: continued NIM expansion as CDs reprice lower (June spot deposit cost 0.98%; ~$780M CDs maturing 2H25 at ~3.6% vs. new promo ~3.4%), and evidence of loan growth conversion from a healthy CRE/construction pipeline .

What Went Well and What Went Wrong

What Went Well
- NIM and efficiency improved again: NIM +13 bps to 3.44% and efficiency ratio to 60.36% on lower deposit costs and better mix; ROA/ROE were 1.00%/13.04% .
- Deposit cost leverage emerging: total deposit cost averaged 1.02% (down 6 bps QoQ); spot deposit cost on 6/30 was 0.98%; June NIM was 3.49% .
- Strategic tone: “continued strength of our core business… strong asset quality, capital, and liquidity positions” (CEO) supporting growth execution .
What Went Wrong
- Estimates miss: S&P consensus EPS $0.70* vs. actual $0.67; revenue $71.8M* vs. S&P actual $67.8M* (company total revenue reported $72.8M) . Values retrieved from S&P Global.
- Credit normalized higher: annualized NCOs rose to 0.35% (from 0.20% in Q1), including a $2.0M full C&I charge-off; NPAs increased to 0.20% of assets .
- Expenses tracked up: quarterly other opex rose to $43.9M (up ~$1.9M QoQ) on deferred comp (equity markets) and software spend; opex run-rate guidance lifted to $43.5–$44.5M .

Financial Results

Comparative performance (company-reported). Revenue shown as “Total revenue” = Net Interest Income + Total Other Operating Income. Periods ordered oldest → newest.

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenue ($M)	$58.40	$68.80	$72.81
Net Interest Income ($M)	$55.77	$57.70	$59.80
Other Operating Income ($M)	$2.62	$11.10	$13.01
Diluted EPS ($)	$0.42	$0.65	$0.67
Net Interest Margin (%)	3.17	3.31	3.44
Efficiency Ratio (%)	75.65	61.16	60.36
ROA (%)	0.62	0.96	1.00
ROE (%)	8.37	13.04	13.04

S&P Global consensus vs. reported (Q2 2025)

Metric	S&P Consensus	Actual
EPS ($)	0.70*	0.67
Revenue ($M)	71.80*	67.82*

Values retrieved from S&P Global. Note: Company “Total revenue” (NII + noninterest) was $72.81M in Q2 2025, which can differ from S&P’s revenue definition .

KPIs (asset quality and funding)

KPI	Q4 2024	Q1 2025	Q2 2025
Annualized Net Charge-offs / Avg Loans (%)	0.29	0.20	0.35
NPAs / Total Assets (%)	0.15	0.15	0.20
ACL / Total Loans (%)	1.11	1.13	1.13
Avg Rate Paid on Total Deposits (%)	1.21	1.08	1.02

Business mix/segments (as of 6/30/25)
- Loan portfolio composition: Residential mortgage 35%, Commercial mortgage 29%, Home equity 12%, C&I 11%, Consumer 9%, Construction 4% .
- Total loans: $5.29B; Total deposits: $6.54B .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Other Operating Expense (run-rate)	Near-term	$42.5–$43.5M/quarter (Q1 call)	$43.5–$44.5M/quarter (Q2 call)	Raised ~$1M band
Effective Tax Rate	2025	~21%–23% (Q1)	~22%–24% (Q2)	Slightly higher band
Ops Center Exit (one-time)	Timing/amount	One-time pre-tax write-off $2.0–$2.5M in Q2 or Q3 2025 (Q1)	One-time pre-tax write-off $2.0–$2.5M by year-end 2025 (Q2)	Timing pushed later
Loans/Deposits Growth	2025	Low single-digit (Q4/Q1)	Low single-digit reaffirmed (Q2)	Maintained
CDs Repricing	2H25	Not previously quantified	~$430M Q3 and ~$350M Q4 maturing; roll-off ~3.6%, new promo ~3.4%	New detail
Dividend	Ongoing	$0.27 declared in Q1	$0.27 declared for Q2 (payable 9/15)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
NIM trajectory & deposit cost leverage	Q4: NIM +10 bps; total deposit cost 1.21%; Q1: guided +4–7 bps next quarter	NIM 3.44% (+13 bps); June spot deposit cost 0.98%; June NIM 3.49%	Improving
Loan growth outlook/pipeline	Q4: pipeline healthy; 2025 growth expected	Reaffirm low single-digit 2025; early Q3 closings booked; strong July net growth	Building into 2H
Credit normalization	Q4: idiosyncratic C&I losses; improving consumer trend	One-off $2.0M C&I charge-off; NCOs 0.35%; NPAs 0.20%—within appetite (CRO)	Stable-to-slightly weaker but managed
Opex discipline & efficiency	Q4/Q1: efficiency improved; opex guide $42.5–$43.5M	Opex guide raised to $43.5–$44.5M; efficiency 60.36%	Efficiency better; spend higher near-term
International deposit initiatives	Q1: core growth via blocking/tackling	Japan/Korea deposit initiatives gaining traction (COO)	Emerging contributor

Management Commentary

CEO: “Our second quarter financial results demonstrate the continued strength of our core business… strong asset quality, capital, and liquidity positions will enable us to grow our business” .
COO: “Loan pipeline remains healthy… several CRE and construction loans booking in early Q3… deposit generation initiatives related to Japan and Korea are gaining traction” .
CFO: “NIM expanded by 13 bps to 3.44%… driven by loan yield +8 bps and total deposit cost –6 bps… spot deposit cost on June 30 was 0.98%; June margin 3.49%” .
CRO: “Increase in net charge-offs this quarter was related to the write-off of a single commercial loan… portfolio expected loss relatively unchanged; capital provides cushion” .

Q&A Highlights

Growth momentum: Loan runoffs (residential/HELOC) offset by robust CRE/construction pipeline; several deals slipped to Q3 and already closed in July, supporting 2H revenue .
Deposit cost leverage: ~$430M CDs mature in Q3 and ~$350M in Q4 at ~3.6% roll-off; new promo ~3.4%, enabling cost tailwinds if rate cuts occur; betas on rate-sensitive deposits near 100% .
Expense run-rate: Near-term total other opex guided to $43.5–$44.5M/quarter excluding one-time items; investments in tech/data center elevate software expense near term with offsets elsewhere .
Credit clarity: Idiosyncratic C&I charge-off drove higher NCOs; criticized loans increased to 1.8% but remain low; two large loans downgraded but performing/adequately collateralized .
New loan yields: Q2 new production ~7.2% vs. portfolio yield ~4.96%, implying accretive repricing on growth .

Estimates Context

Q2 2025 vs S&P consensus: EPS missed modestly ($0.67 vs $0.70*); S&P revenue missed ($67.8M* vs $71.8M*). Company-reported total revenue was $72.8M (NII + noninterest), highlighting definitional differences . Values retrieved from S&P Global.
Forward S&P consensus: Q3 2025 EPS ~$0.74*, revenue ~$74.37M*; Q4 2025 EPS ~$0.71*, revenue ~$75.70M* (3 ests) — trajectory assumes ongoing NIM support and stable credit. Values retrieved from S&P Global.

Key Takeaways for Investors

NIM expansion continues with multiple levers (lower deposit costs, CD roll-offs, accretive loan yields) and could outpace peers if rate cuts materialize and betas transmit quickly .
Operating leverage improving despite a higher opex run-rate; efficiency ratio fell to ~60%, positioning for incremental margin drop-through as revenue scales .
Credit remains manageable; Q2 uptick was idiosyncratic and within appetite; watch NPAs (0.20%) and criticized loans (1.8%) for trend into 2H .
Loan growth inflecting into 2H: closed early-Q3 loans and a healthy CRE/construction pipeline support low single-digit 2025 growth and revenue momentum .
Funding franchise is an edge: improving noninterest-bearing mix and rational pricing in Hawaii support deposit cost declines; international initiatives add optionality .
Capital return intact: $0.27 dividend maintained and buybacks active (103k shares at $25); CET1 12.6% and total RBC 15.8% provide flexibility .
Near-term trading setup: modest headline miss vs S&P may be overshadowed by visible NIM tailwinds, pipeline conversion, and improving efficiency; macro (rate path) and credit normalization are key watch-fors .

Appendix: Additional Context and Sources

Q2 2025 results press release (8-K Exhibit 99.1) and earnings supplement provide full financial tables and regulatory ratios .
Standalone Q2 earnings press release provides identical highlights and tables –.
Q2 2025 earnings call transcript contains prepared remarks and Q&A detail cited above –.
Prior quarters used for trend: Q1 2025 earnings PR and call – –; Q4 2024 earnings PR and call – –.
Conference call announcement PR (timing/logistics) .

Footnote on estimates: All values marked with an asterisk (*) are consensus/actuals retrieved from S&P Global.

CENTRAL PACIFIC FINANCIAL CORP (CPF)·Q2 2025 Earnings Summary