Central Pacific Financial (CPF) 8-K Results of Operations and Financial Condition

Exhibit 99

Investor Contact:	Dean Hirata	Media Contact:	Ann Takiguchi Marcos
	EVP & Chief Financial Officer		VP & PR/Communications Officer
	(808) 544-6882		(808) 544-0685
	dean.hirata@centralpacificbank.com		ann.takiguchi@centralpacificbank.com

NEWS RELEASE

CENTRAL PACIFIC FINANCIAL CORP. REPORTS FOURTH QUARTER RESULTS

HONOLULU, January 25, 2005 – Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank and City Bank, today reported net income for the fourth quarter of 2004 of $13.1 million, or $0.46 per share, compared to $9.1 million, or $0.55 per share reported for the same period in 2003.  For the year ended December 31, 2004, net income was $37.4 million, or $1.87 per share, as compared to $33.9 million, or $2.07 per share, recorded in 2003.

Operating earnings, defined as the Company’s net income before deduction of merger-related expenses, net of tax, which are reported in periods with merger-related costs, for the fourth quarter of 2004 was $16.4 million, or $0.57 per share, as compared to the $9.1 million, or $0.55 per share, recorded during the same period of 2003.  Operating earnings for the year ended December 31, 2004 was $43.7 million, or $2.18 per share, up from $34.8 million, or $2.12 per share, recorded last year.  There were $3.3 million in merger-related expenses, net of tax, recorded in the fourth quarter of 2004 and $6.3 million, net of tax, for the year ended December 31, 2004.

The Company’s merger with CB Bancshares, Inc. (“CBBI”) was accounted for under the purchase accounting method, and CBBI’s revenues and expenses are included in the consolidated financials from September 15, 2004, the date of closing.  In connection with the merger, the Company issued 11.9 million common shares and paid $88.9 million in cash for a total merger consideration of $423.1 million, based on the Company’s stock price as of the closing date.

2004 Financial Highlights

•      Merger with CB Bancshares, Inc. closed on September 15, 2004.

•      Total assets increased by 115%, loans increased by 115% and deposits increased by 90%, due primarily to the merger.

•      Market capitalization increased to $1 billion from $483 million a year ago, due primarily to the merger.

•      Return on average tangible stockholders’ equity was 19.16% and return on average assets was 1.25%.  Excluding merger-related expenses, return on average tangible stockholders’ equity was 21.46% and return on average assets was 1.46%.

“We are pleased that we achieved strong operating performance in a transitional year for our Company” commented Clint Arnoldus, Chief Executive Officer of CPF.  “In the first full quarter following the merger, loans increased by $100 million, excluding the impact of a $65 million residential mortgage loan bulk sale, and deposits increased by $29 million.  We believe we are extremely well positioned for 2005.”

“The Company has made significant progress in planning and preparing for a successful merger of our two subsidiary banks which is scheduled to take place in February 2005, “remarked Arnoldus.  “We anticipate achieving substantial strategic and business synergies as a result of the merger through 2005 and 2006.  Accordingly, we expect to see a

reduction in other operating expense and an improvement in operating efficiency as certain cost-savings related to the merger are phased in throughout 2005.”

Financial Highlights

Fourth quarter net interest income increased 110% to $46.3 million from the $22.1 million recorded in the fourth quarter of last year.  The growth in net interest income was attributable to a 105% increase in average interest earning assets and a 7 basis point increase in the net interest margin from the year ago period.  The fourth quarter 2004 net interest margin of 4.60% also improved from the 4.54% reported in the third quarter of 2004 as yields on interest-earning assets benefited from the tightening of monetary policy.

Net interest income for 2004 increased to $120.2 million or 33% over the $90.1 million reported in 2003.  The growth in 2004 was attributable to a 41% increase in average interest-earning assets that was partially offset by a 28 basis point decline in the net interest margin.

Provision for loan and lease losses in the fourth quarter of 2004 was $950,000, compared to no provision in the fourth quarter of 2003.  The higher provision was primarily attributable to the strong growth in the loan portfolio.

Other operating income increased 98% to $9.1 million for the fourth quarter of 2004 from $4.6 million for the comparable period in 2003.  The fourth quarter of 2004 included $5.1 million in income from operations of subsidiaries acquired from CBBI in the merger and a $620,000 net gain on a bulk sale of $65 million in residential mortgage loans.  Additionally, the Company recognized $193,000 in net security losses in the fourth quarter of 2004 as compared to $788,000 in net security gains in the year ago period.

Other operating expense increased 143% to $35.4 million in the fourth quarter of 2004 from $14.6 million for the comparable period in 2003.  The fourth quarter of 2004 included $13.5 million in expenses from operations of subsidiaries acquired from CBBI in the merger, $5.4 million in merger-related expenses and $838,000 in charitable contributions.

The effective tax rate for the fourth quarter of 2004 was 30.81%, as compared to 24.63% for the fourth quarter of 2003.  The Company’s investments in high-technology businesses in Hawaii generate tax benefits that decline over time and as a result the Company projects its effective tax rate will approximate 32% over the coming quarters.

Asset Quality

At December 31, 2004, nonperforming assets totaled $10.9 million or 0.23% of total assets, as compared to $3.6 million or 0.17% of total assets at December 31, 2003.  The increase was primarily attributable to several commercial mortgage loans that are secured by commercial property.

The allowance for loan and lease losses as a percentage of total loans and leases was 1.64% at December 31, 2004 as compared to 1.72% at December 31, 2003.

Net loan charge-offs totaled $126,000, or 0.02% of average loans, in the fourth quarter of 2004 as compared to $31,000, or 0.01% of average loans, in the year ago period.

Balance Sheet Analysis

At December 31, 2004, total assets increased by 115% to $4.7 billion and total loans increased by 115% to $3.1 billion from December 31, 2003.  Total deposits at December 31, 2004 increased by 90% to $3.3 billion and shareholders’ equity increased by 192% to $567.9 million from a year earlier.  These substantial increases are principally due to the merger, which accounted for approximately 85% of the growth in total loans and deposits.

2

Business and Earnings Outlook

Based on current economic and business conditions, management reaffirms its 2005 EPS guidance of $2.50 to $2.60.

Conference Call Information

Central Pacific Financial Corp. will conduct a conference call today at 4:00 p.m. Eastern Time (11:00 a.m. Hawaii Time) to discuss its quarterly results.  To participate in the call, please call 1-800-811-0667 or visit the investor relations page of the Company’s website at http://investor.centralpacificbank.com.  A playback of the call will be available by dialing 1-888-203-1112 and entering the passcode 144144.  Additionally, a replay will be available on the Company’s website.

About Central Pacific Financial Corp.

Central Pacific Financial Corp. is the fourth largest financial institution in Hawaii with $4.7 billion in assets.  Its primary subsidiaries are Central Pacific Bank and City Bank, with a combined 45 branch offices statewide, including five supermarket branches and more than 100 ATMs.  For additional information, please visit our web site at http://www.centralpacificbank.com.

**********

Forward-Looking Statements

This document may contain forward-looking statements concerning projections of revenues, income, earnings per share, capital expenditures, dividends, capital structure, or other financial items, concerning plans and objectives of management for future operations, concerning future economic performance, or concerning any of the assumptions underlying or relating to any of the foregoing.  Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts, and may include the words “believes”, “plans”, “intends”, “expects”, “anticipates” or words of similar meaning.  While we believe that our forward-looking statements and the assumptions underlying them are reasonably based, such statements and assumptions, are by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect.  Accordingly, actual results could materially differ from projections for a variety of reasons, to include, but not limited to: the impact of local, national, and international economies and events on the company’s business and operations and on tourism, the military, and other major industries operating within the Hawaii market; the impact of legislation affecting the banking industry; the impact of competitive products, services, pricing, and other competitive forces; movements in interest rates; loan delinquency rates; and trading of the company’s stock.  For further information on factors which could cause actual results to materially differ from projections, please see the company’s publicly available Securities and Exchange Commission filings, including the company’s Form 10-K for the last fiscal year.  The company does not update any of its forward-looking statements.

#####

3

CENTRAL PACIFIC FINANCIAL CORP.  AND SUBSIDIARIES

Financial Highlights - December 31, 2004

(Unaudited)

	Three Months Ended December 31,						%		Year Ended December 31,						%
(in thousands, except per share data)	2004			2003			Change		2004			2003			Change
INCOME STATEMENT
Net income	$	13,132		$	9,097		44.4	%	$	37,394		$	33,940		10.2	%
Net income - adjusted (1)	16,386			9,113			79.8	%	43,653			34,795			25.5	%
Per share data:
Diluted:
Net income	0.46			0.55			-16.4	%	1.87			2.07			-9.7	%
Net income - adjusted (1)	0.57			0.55			3.6	%	2.18			2.12			2.8	%
Cash dividends	0.16			0.16			0.0	%	0.64			0.64			0.0	%
PERFORMANCE RATIOS
Return on average assets (2)	1.12		%	1.70		%			1.25		%	1.64		%
Return on average assets - adjusted (1), (2)	1.40		%	1.66		%			1.46		%	1.68		%
Return on average stockholders’ equity (2)	9.38		%	18.96		%			12.37		%	18.33		%
Return on average stockholders’ equity - adjusted (1), (2)	11.71		%	18.99		%			14.44		%	18.79		%
Return on average tangible equity (2)	25.48		%	18.96		%			19.16		%	18.33		%
Return on average tangible equity - adjusted (1), (2)	29.20		%	18.99		%			21.46		%	18.79		%
Efficiency ratio	63.77		%	56.34		%			60.57		%	52.97		%
Efficiency ratio - adjusted (1)	54.05		%	56.24		%			53.26		%	51.61		%
Net interest margin (2)	4.60		%	4.53		%			4.51		%	4.79		%
Dividend payout ratio	34.04		%	28.07		%			33.68		%	30.19		%

	December 31,						%
	2004			2003			Change
BALANCE SHEET
Total assets	$	4,657,442		$	2,170,268		114.6	%
Loans	3,099,830			1,443,154			114.8	%
Loans, net	3,049,127			1,418,380			115.0	%
Deposits	3,327,026			1,753,284			89.8	%
Shareholders’ equity	567,862			194,599			191.8	%
Book value per share	20.17			12.11			66.6	%
Market value per share	36.17			30.04			20.4	%
Tangible equity ratio	5.39		%	8.97		%

	Three Months Ended December 31,				%		Year Ended December 31,				%
	2004		2003		Change		2004		2003		Change
SELECTED AVERAGE BALANCES
Total assets	$	4,672,658	$	2,146,698	117.7	%	$	3,000,778	$	2,069,582	45.0	%
Interest-earning assets	4,092,572		1,997,096		104.9	%	2,719,565		1,922,787		41.4	%
Loans, net of unearned interest	3,124,812		1,436,957		117.5	%	1,986,872		1,374,251		44.6	%
Other real estate	580		35		1557.1	%	722		480		50.4	%
Deposits	3,323,615		1,719,540		93.3	%	2,243,737		1,679,766		33.6	%
Interest-bearing liabilities	3,410,840		1,605,143		112.5	%	2,228,973		1,552,922		43.5	%
Stockholders’ equity	559,728		191,946		191.6	%	302,400		185,164		63.3	%

	December 31,				%
	2004		2003		Change
NONPERFORMING ASSETS
Nonaccrual loans	$	10,289	$	3,597	186.0	%
Other real estate	580		0		0.0	%
Total nonperforming assets	10,869		3,597		202.2	%
Loans delinquent for 90 days or more (still accruing interest)	344		669		-48.6	%
Restructured loans (still accruing interest)	701		—		—
Total nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured loans (still accruing interest)	$	11,914	$	4,266	179.3	%

	Three Months Ended December 31,								Year Ended December 31,
	2004			2003					2004			2003
Loan charge-offs	$	1,541		$	154		900.6	%	$	2,931		$	1,844		58.9	%
Recoveries	1,415			123			1050.4	%	1,754			1,721			1.9	%
Net loan charge-offs (recoveries)	$	126		$	31		306.5	%	$	1,177		$	123		856.9	%
Net loan charge-offs to average loans (2)	0.02		%	0.01		%			0.06		%	0.01		%

	December 31,
	2004		2003
ASSET QUALITY RATIOS
Nonaccrual loans to total loans	0.33	%	0.25	%
Nonperforming assets to total assets	0.23	%	0.17	%
Nonperforming assets, loans delinquent for 90 days or more (still accruing interest) and restructured loans (still accruing interest) to total loans & other real estate	0.38	%	0.30	%
Allowance for loan losses to total loans	1.64	%	1.72	%
Allowance for loan losses to nonaccrual loans	492.79	%	688.74	%

(1)Excludes after-tax merger-related expenses (see Reconciliation of Non-GAAP Financial Measures)

(2)Annualized

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures

At or for the three months and year ended December 31, 2004 and 2003

(Unaudited)

	Three Months Ended December 31,								Year Ended December 31,
(in thousands, except per share data)	2004			2003			% Change		2004			2003			% Change
Net income	$	13,132		$	9,097		44.4	%	$	37,394		$	33,940		10.2	%
Merger-related expenses, net of tax	3,254			16			20237.5	%	6,259			855			632.0	%
Net income, excluding merger-related expenses (j)	$	16,386		$	9,113		79.8	%	$	43,653		$	34,795		25.5	%
Basic earnings per share	$	0.47		$	0.57		-17.5	%	$	1.90		$	2.12		-10.4	%
Merger-related expenses, net of tax	0.12			—			—		0.32			0.05			540.0	%
Basic earnings per share, excluding merger-related expenses	$	0.59		$	0.57		3.5	%	$	2.22		$	2.17		2.3	%
Diluted earnings per share	$	0.46		$	0.55		-16.4	%	$	1.87		$	2.07		-9.7	%
Merger-related expenses, net of tax	0.11			—			—		0.31			0.05			520.0	%
Diluted earnings per share, excluding merger-related expenses	$	0.57		$	0.55		3.6	%	$	2.18		$	2.12		2.8	%
Return on average assets	1.12		%	1.70		%			1.25		%	1.64		%
Merger-related expenses, net of tax	0.28			—					0.21			0.04
Return on average assets, excluding merger-related expenses	1.40		%	1.70		%			1.46		%	1.68		%
Return on average equity	9.38		%	18.96		%			12.37		%	18.33		%
Merger-related expenses, net of tax	2.33			0.03					2.07			0.46
Return on average equity, excluding merger-related expenses	11.71		%	18.99		%			14.44		%	18.79		%
Efficiency ratio:
Net interest income	$	46,288		$	22,050				$	120,172		$	90,053
Other operating income	9,261			3,788					22,037			14,878
Total operating revenue (a)	$	55,549		$	25,838				$	142,209		$	104,931
Other operating expense (b)	$	35,426		$	14,556				$	86,131		$	55,578
Merger-related expenses	(5,403		)	(26		)			(10,392		)	(1,420		)
Total other operating expense, excluding merger-related expenses (c)	$	30,023		$	14,530				$	75,739		$	54,158
Efficiency ratio [ (b) / (a) ]	63.77		%	56.34		%			60.57		%	52.97		%
Efficiency ratio, excluding merger-related expenses [ (c) / (a) ]	54.05		%	56.24		%			53.26		%	51.61		%
Effective tax rate:
Net income before taxes (d)	$	18,980		$	12,070				$	53,976		$	49,609
Merger-related expenses	5,403			26					10,392			1,420
Net income before taxes, excluding merger-related expenses (e)	$	24,383		$	12,096				$	64,368		$	51,029
Income taxes (f)	$	5,848		$	2,973				$	16,582		$	15,669
Tax impact of merger-related expenses	2,149			10					4,133			565
Income taxes, excluding tax impact of merger-related expenses (g)	$	7,997		$	2,983				$	20,715		$	16,234
Effective tax rate [ (f) / (d) ]	30.81		%	24.63		%			30.72		%	31.58		%
Effective tax rate, excluding tax impact of merger-related expenses [ (g) / (e) ]	32.80		%	24.66		%			32.18		%	31.81		%
Return on tangible equity:
Average shareholders' equity	$	559,728		$	191,946				$	302,400		$	185,164
Average intangible assets	(335,281		)	—					(98,987		)	—
Total tangible equity (h)	$	224,447		$	191,946				$	203,413		$	185,164
Net income	$	13,132		$	9,097				$	37,394		$	33,940
Amortization of intangible assets	1,166			—					1,579			—
Total tangible net income (i)	$	14,298		$	9,097				$	38,973		$	33,940
Return on tangible equity [ (i) / (h) ]	25.48		%	18.96		%			19.16		%	18.33		%
Return on tangible equity - adjusted [ (j) / (h) ]	29.20		%	18.99		%			21.46		%	18.79		%

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)	December 31, 2004			December 31, 2003			Annual Change
							$			%
ASSETS
Cash and due from banks	$	84,869		$	63,851		$	21,018		32.9	%
Interest-bearing deposits in other banks	52,978			5,145			47,833			929.7	%
Federal funds sold	25,600			2,000			23,600			1180.0	%
Investment securities:
Held to maturity, at cost (fair value of $101,621 at December 31, 2004 and $35,721 at December 31, 2003)	101,088			34,316			66,772			194.6	%
Available for sale, at fair value	797,697			520,641			277,056			53.2	%
Total investment securities	898,785			554,957			343,828			62.0	%
Loans held for sale	17,736			6,660			11,076			166.3	%
Loans and leases	3,099,830			1,443,154			1,656,676			114.8	%
Less allowance for loan and lease losses	50,703			24,774			25,929			104.7	%
Net loans and leases	3,049,127			1,418,380			1,630,747			115.0	%
Premises and equipment	77,099			56,125			20,974			37.4	%
Accrued interest receivable	18,298			8,828			9,470			107.3	%
Investment in unconsolidated subsidiaries	11,536			2,184			9,352			428.2	%
Due from customers on acceptances	547			—			547			N.M.
Other real estate	580			—			580			N.M.
Goodwill	285,348			—			285,348			N.M.
Core deposit premium	49,188			—			49,188			N.M.
Other assets	85,751			52,138			33,613			64.5	%
Total assets	$	4,657,442		$	2,170,268		$	2,487,174		114.6	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing deposits	$	594,401		$	338,004		$	256,397		75.9	%
Interest-bearing deposits	2,732,625			1,415,280			1,317,345			93.1	%
Total deposits	3,327,026			1,753,284			1,573,742			89.8	%
Short-term borrowings	88,900			3,507			110,393			3147.8	%
Long-tem debt	587,380			184,184			378,196			205.3	%
Bank acceptances outstanding	547			—			547			N.M.
Minority interest	12,782			10,062			2,720			27.0	%
Other liabilities	72,945			24,632			48,313			196.1	%
Total liabilities	4,089,580			1,975,669			2,113,911			107.0	%
Shareholders’ equity:
Preferred stock, no par value, authorized 1,000,000 shs, none issued	—			—			—			N.M.
Common stock, no par value; authorized 100,000,000 shares; issued and outstanding 28,159,395 shares at December 31, 2004 and 16,063,957 at December 31, 2003	11,792			9,589			2,203			23.0	%
Surplus	394,605			45,848			348,757			760.7	%
Retained earnings	167,801			142,635			25,166			17.6	%
Deferred stock awards	(174		)	(50		)	(124		)	-248.0	%
Accumulated other comprehensive income	(6,162		)	(3,423		)	(2,739		)	-80.0	%
Total shareholders’ equity	567,862			194,599			373,263			191.8	%
Total liabilities and shareholders’ equity	$	4,657,442		$	2,170,268		$	2,487,174		114.6	%

CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended										Twelve months ended
	December 31,					Change					December 31,					Change
(In thousands, except per share data)	2004			2003		$			%		2004			2003		$			%
Interest income:
Interest and fees on loans and leases	$	49,668		$	21,464	$	28,204		131.4	%	$	120,684		$	88,922	$	31,762		35.7	%
Interest and dividends on investment securities:
Taxable interest	7,759			4,147		3,612			87.1	%	24,181			16,307		7,874			48.3	%
Tax-exempt interest	1,389			1,012		377			37.3	%	4,466			3,841		625			16.3	%
Dividends	22			263		(241		)	-91.6	%	679			1,027		(348		)	-33.9	%
Interest on deposits in other banks	211			19		192			1010.5	%	289			92		197			214.1	%
Interest on Federal funds sold and securities purchased under agreements to resell	68			12		56			466.7	%	90			42		48			114.3	%
Total interest income	59,117			26,917		32,200			119.6	%	150,389			110,231		40,158			36.4	%
Interest expense:
Interest on deposits	7,142			3,084		4,058			131.6	%	16,863			14,380		2,483			17.3	%
Interest on short-term borrowings	494			9		485			5388.9	%	735			43		692			1609.3	%
Interest on long-term debt	5,193			1,774		3,419			192.7	%	12,619			5,755		6,864			119.3	%
Total interest expense	12,829			4,867		7,962			163.6	%	30,217			20,178		10,039			49.8	%
Net interest income	46,288			22,050		24,238			109.9	%	120,172			90,053		30,119			33.4	%
Provision for loan and lease losses	950			—		950			N.M.		2,083			700		1,383			197.6	%
Net interest income after provision for loan and lease losses	45,338			22,050		23,288			105.6	%	118,089			89,353		28,736			32.2	%
Other operating income:
Income from fiduciary activities	534			503		31			6.2	%	2,224			1,793		431			24.0	%
Service charges on deposit accounts	2,668			1,322		1,346			101.8	%	7,150			4,551		2,599			57.1	%
Other service charges and fees	2,832			1,318		1,514			114.9	%	7,025			5,196		1,829			35.2	%
Fees on foreign exchange	165			161		4			2.5	%	648			576		72			12.5	%
Investment securities gains (losses)	(193		)	788		(981		)	-124.5	%	(19		)	956		(975		)	-102.0	%
Other	3,062			484		2,578			532.6	%	4,990			2,762		2,228			80.7	%
Total other operating income	9,068			4,576		4,492			98.2	%	22,018			15,834		6,184			39.1	%
Other operating expense:
Salaries and employee benefits	16,393			7,327		9,066			123.7	%	43,252			29,220		14,032			48.0	%
Net occupancy	3,155			1,033		2,122			205.4	%	6,550			4,198		2,352			56.0	%
Equipment	1,131			600		531			88.5	%	3,151			2,457		694			28.2	%
Amortization of core deposit premium	1,936			—		1,936			N.M.		2,581			—		2,581			N.M.
Communication expense	834			436		398			91.3	%	2,267			1,651		616			37.3	%
Professional services	4,172			599		3,573			596.5	%	8,660			2,503		6,157			246.0	%
Computer software expense	845			520		325			62.5	%	2,450			1,841		609			33.1	%
Advertising expense	1,248			316		932			294.9	%	2,885			3,038		(153		)	-5.0	%
Other	5,712			3,725		1,987			53.3	%	14,335			10,670		3,665			34.3	%
Total other operating expense	35,426			14,556		20,870			143.4	%	86,131			55,578		30,553			55.0	%
Income before income taxes	18,980			12,070		6,910			57.2	%	53,976			49,609		4,367			8.8	%
Income taxes	5,848			2,973		2,875			96.7	%	16,582			15,669		913			5.8	%
Net income	$	13,132		$	9,097	$	4,035		44.4	%	$	37,394		$	33,940	$	3,454		10.2	%
Per share data:
Basic earnings per share	$	0.47		$	0.57	$	(0.10	)	-17.5	%	$	1.90		$	2.12	$	(0.22	)	-10.4	%
Diluted earnings per share	0.46			0.55		(0.09		)	-16.4	%	1.87			2.07		(0.20		)	-9.7	%
Cash dividends declared	0.16			0.16		—			N.M.		0.64			0.64		—			N.M.
Basic weighted average shares outstanding (000’s)	28,099			16,057		12,042			75.0	%	19,637			16,027		3,610			22.5	%
Diluted weighted average shares outstanding (000’s)	28,718			16,397		12,321			75.1	%	20,018			16,397		3,621			22.1	%