Fitch Rates Central Pacific Financial Corp

Business Wire, Feb 23, 2005

NEW YORK -- Fitch Ratings has assigned a 'BBB' long-term issuer rating and an 'F2' short-term issuer rating to Central Pacific Financial Corp. (CPF) and its bank subsidiary, Central Pacific Bank. The Rating Outlook is Stable. A complete list of ratings for CPF and Central Pacific Bank is noted at the end of this release.

Fitch's ratings are based on the company's sound financial profile, particularly its good operating performance, sound credit quality, and solid core funding base. However, Fitch's ratings also recognize that CPF has a considerable amount of potential integration risk, as the company only recently merged following the long unsolicited takeover of CB Bancshares, Inc. Additionally, Fitch's ratings consider that the company has limited earnings diversity, and the loan portfolio is concentrated geographically and by product type.

The operating performance of the newly combined company has been good thus far, driven by a relatively strong net interest margin and low credit costs. That said, earnings are heavily spread income dependent, with over 80% of total revenue derived from net interest income. CPF's low credit costs are representative of the company's solid asset quality. However, the loan portfolio has a concentration in commercial real estate, which represents almost 50% of total loans. Furthermore, while the company has been growing its U.S. mainland-based loan book, the portfolio remains geographically concentrated in Hawaii.

The company's capital base is considered sound, although the capital structure does contain a considerable amount of trust-preferred securities. CPF's recent announcement to raise additional common equity strengthens Fitch's view toward the company's capital position. Fitch believes CPF needs to maintain a healthy capital and reserve position given its geographic and product concentrations.

CPF is a $4.7 billion banking company that is headquartered in Honolulu, HI. The company is the product of the September 2004 merger of Central Pacific Financial Corp. and CB Bancshares, Inc. Through its bank subsidiary, Central Pacific Bank, the company operates a network of 37 branches throughout Hawaii. The company also has loan production offices in Northern and Southern California, as well as in Washington.

Central Pacific Financial Corp.

-- Long-term issuer 'BBB';

-- Short-term issuer 'F2';

-- Individual 'B/C';

-- Support '5'.

Central Pacific Bank

-- Long-term deposits 'BBB ';

-- Long-term issuer 'BBB';

-- Short-term deposits 'F2';

-- Short-term issuer 'F2';

-- Individual 'B/C';

-- Support '5'.

CPB Capital Trust I, II, & IV

CPB Statutory Trust III & V

-- Trust-preferred securities 'BBB-'.