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CORRESP
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    letter.htm

              Central Pacific
      Plaza

              PO Box 3590

              Honolulu  Hawaii
      96811-3590

              Telephone
      808-544-0500

              Fax Line
      808-531-2875

      August
21, 2008

        Mr. Kevin
W. Vaughn

        Branch
Chief

        Securities
and Exchange Commission

        Division
of Corporation Finance

        Mail Stop
4561

        Washington,
DC 20549

                Re:

                Central
      Pacific Financial Corp.

                Form
      10-K for Fiscal Year Ended December 31,
2007

                Form
      10-Q for the period Ended March 31,
2008

                File
      No. 001-31567

        Dear Mr.
Vaughn:

      This letter constitutes the response of Central
Pacific Financial Corp., a Hawaii corporation
(the “Company”), to the comment letter of the Securities and Exchange Commission
(the “Commission”) dated August 7, 2008. If after reviewing this letter,
the Commission has further concerns or comments, we would be pleased to provide
any necessary additional information.

      In our letter, we refer to the Staff of the Commission
as the “Staff” and to the Form 10-K for the
fiscal year ended December 31, 2007 as the
“2007 Form 10-K”. We refer to the Form 10-Q for the fiscal quarter ended March
31, 2008 as the “Q1 2008 Form 10-Q”. Comment numbering used for each response
set forth below corresponds to the comment numbering used in the Staff’s
letter.

      2007 FORM
10-K

      Our Services, Page
4

                1.

                We
      note the references in this section to the maintenance of appropriate
      reserves that are required for certain loan products.  Please
      address the following regarding this
disclosure:

                ·

                Please
      tell us the specific nature of these reserves.  Tell us if you
      require interest reserves on any of your loan
  products.

                  ·

                  If
      you do require interest reserves, please tell us the amount of such loans
      and accompanying reserves as of June 30, 2008 and the three previous
      quarter ends.

                ·

                Tell
      us how you monitor such projects throughout their lives to make sure the
      properties are moving along as planned such that it is appropriate to
      continue to capitalize the interest to the
loan.

                ·

                Tell
      us whether you have ever extended, renewed or restructured terms of the
      related loans, and the reasons for the
change.

      Response: The reserves noted
in the Company’s description of its loan products are interest reserves. The
Company requires interest reserves for the following loan types:

                ·

                Construction
      loans, including loans to build commercial buildings, residential
      developments (both large tract projects and individual houses), and
      multi-family projects; and

                ·

                Land
      development loans, including loans to fund the acquisition of both raw
      land and entitled land being acquired for infrastructure and/or capital
      improvements.

      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 the
Company has the right to demand payment under certain circumstances. The Company
ensures 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 the Company has the option to demand payment if the
credit profile of the borrower changes. The Company evaluates 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/guarantors, and the value of the collateral.

      In the
event that unfavorable circumstances alter the original project dynamics (e.g.,
cost overruns, project delays, etc.), the Company will evaluate whether or not
it is appropriate to maintain interest capitalization or demand payment of
interest in cash and will work with the borrower to explore various
restructuring options, which may include obtaining additional equity and/or
requiring additional collateral. The Company may also require borrowers to
directly pay scheduled interest payments.

      Outstanding
loan balances and related interest reserves as of June 30, 2008 and the
preceding three fiscal quarters were as follows (in
thousands):

                June
      30, 2008

                March
      31, 2008

                Dec.
      31, 2007

                Sept.
      30, 2007

                Outstanding
      Principal of Loans

                  with
      Interest Reserves

              $
              643,948

              $
              691,304

              $
              898,561

              $
              888,583

                Remaining
      Interest Reserves

              $
              30,092

              $
              38,537

              $
              57,103

              $
              59,951

      The
Company’s process for ensuring that construction/land development projects are
moving as planned are detailed in the Company’s lending policies and
guidelines.  Prior to approving a loan, the Company and the borrower
agree on a construction budget, a pro forma monthly disbursement schedule, and
sales/leaseback assumptions.  As each project progresses, the
projections are measured against actual disbursements and sales/lease results to
ensure that the project is on track and performing as planned.

          2

      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/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, the Company’s monitoring
process includes:

                ·

                Physical
      inspection of the project to ensure work has progressed to the stage for
      which payment is being requested;
and

                ·

                Verification
      that the work completed is in conformance with plans and specifications
      and items for which disbursement is requested are within
      budget.

      In
certain circumstances, the Company will decide to extend, renew, and/or
restructure the terms of a construction/development loan.  Reasons for
the restructure can range from cost overruns to project delays and the
restructuring can result in additional funds being advanced or an extension of
the maturity date of the loan.  Prior to the loan being restructured,
the Company performs 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.

      Nonperforming Assets,
Accruing Loans Delinquent for 90 Days or More, Restructured Loans Still Accruing
Interest, page 39

                2.

                We
      note in your disclosure that non-accruing loans increased approximately
      57% in 2008 just prior to the filing of this Form 10-K.  Please
      tell us the basis for your assertion that your loss exposure to nonaccrual
      loans was adequately provided for at December 31, 2007 considering the
      apparent significant increase in nonaccrual
  loans.

      Response: The 57% increase was attributable to six California
residential construction loans made to two
borrowers totaling $35.7
million. As disclosed in its
2007 Form 10-K, the Company placed these loans on nonaccrual
status in January of 2008.
The specific
events that led to these loans being
placed on nonaccrual status
occurred in the early part
of 2008. Because Management believed that this information was
meaningful to readers of the Company’s filings, the Company disclosed this subsequent event in the
Management’s Discussion & Analysis
section of its 2007 Form
10-K.

      Four of
these loans, with an aggregate outstanding principal balance of $18.4 million,
were considered impaired at December 31, 2007 and together were assigned a
specific reserve of $1.9 million in accordance with SFAS 114, Accounting by Creditors for
Impairment of a Loan. The specific reserve for these four loans was based
on the estimated fair value of the collateral
securing these loans at December 31, 2007. The fair value of the collateral was based on
independent appraisals received and Management’s consideration of market
conditions at the time.

      The
remaining two loans, with an aggregate outstanding principal balance of $17.3
million, were classified as Substandard at December 31, 2007 in accordance with
the Company’s internal loan grading system. As prescribed by the Company’s
allowance for loan and lease loss methodology, these loans were evaluated as
part of a group of loans with similar risk characteristics consistent with the
provisions of SFAS 5 (As Amended), Accounting for
Contingencies. Based on this approach, these loans had a reserve of
$3.4 million at December 31, 2007.

          3

      Based on the discussion above, Management
believes that these loans were adequately provided for in the Company’s
allowance for loan and lease loss estimate at December 31, 2007.

                Financial Statements,
      beginning on page 48

                Principles of
      Consolidation, page 56

                3.

                Please
      tell us in detail and more clearly disclose in your future filings how you
      determined that it is appropriate not to consolidate the 50% owned
      mortgage brokerage companies.  Also, please tell us the specific
      nature of the contributions to unconsolidated subsidiaries reflected in
      the statements of cash flows, including a discussion of any contractual
      requirement to provide contributions to these
  subsidiaries.

      Response: At June 30, 2008,
the Company had investments in eight 50% owned mortgage brokerage companies with
a total carrying value of $0.7 million. The Company concluded that these
investments are not required to be consolidated under FASB Interpretation No.
46(R), Consolidation of
Variable Interest Entities- An Interpretation of ARB No. 51”(“ FIN 46(R)”)
or Accounting Research Bulletin No. 51 (As Amended), Consolidated Financial
Statements (“ARB 51”). Accordingly, the Company concluded that accounting
for these investments under the equity method, as prescribed by Accounting
Principles Board Opinion No. 18 (As Amended), The Equity Method of Accounting for
Investments in Common Stock (“APB 18”), is appropriate.

      One of
the eight mortgage brokerage companies referred to above did not meet the
definition of a variable interest entity as none of the conditions in paragraph
5 of FIN 46(R) exist. As this entity is not a variable interest entity as
defined by FIN 46 (R), the Company concluded that consolidation was not
required. Furthermore, the Company does not have a controlling financial
interest in this entity and, as a result, is not required to consolidate this
entity under ARB 51.

      The
remaining seven mortgage brokerage companies do meet the variable interest
entity criteria in paragraph 5 of FIN 46(R). However, the Company determined
that it is not required to consolidate these entities as the other 50% owners of
these entities each receive a majority of the respective entity’s expected
residual returns, and thus, are considered to be the primary beneficaries under
paragraph 14 of FIN 46(R). Furthermore, the Company does not have a controlling
financial interest in any of these seven mortgage brokerage companies and
as a result, is not required to consolidate any of these entities under ARB
51.

      The
Company notes the Staff’s comment and we propose to expand our disclosure in
future annual filings as follows:

      “We have
a 50% ownership interest in each of the following mortgage brokerage companies:
Pacific Access Mortgage, LLC; Lokahi Mortgage, LLC; Gentry HomeLoans, LLC; Towne
Island Mortgage, LLC; Pacific Island HomeLoans, LLC; Hawaii Resort Lending, LLC,
Laulima Financial, LLC and Pacific Portfolio, LLC. The Company has concluded
that these investments do not meet the consolidation requirements under
Financial Accounting Standards Board Interpretation No. 46(R) (as amended),
“Consolidation of Variable
Interest Entities - An
Interpretation of ARB No. 51” or Accounting Research Bulletin No. 51
(As Amended), Consolidated Financial
Statements (“ARB 51”).
Accordingly, these investments are accounted for using the equity method
and are included in Investment in Unconsolidated Subsidiaries.”

          4

      The
contributions to unconsolidated subsidiaries reflected in the Company’s
Statements of Cash Flows represent the Company’s capital contributions in
exchange for ownership interests in various partnerships. As the Company’s
acquired ownership percentage in these unconsolidated subsidiaries is less than
20% and the Company is unable to exercise significant influence over these
unconsolidated subsidiaries, the Company has concluded that accounting for these
investments under the cost method is appropriate.

      In May
2008, the Company acquired an ownership interest in a partnership that invests
in low-income housing rental projects in the State of Hawaii. The Company
subscribes to an agreed upon dollar amount and contributes its funds to the
partnership in accordance with this agreement.  As of June 30, 2008,
the bank had subscribed to a maximum investment of $5.0 million and has
contributed $0.1 million to this partnership. The Company does not have any
contractual requirement to provide contributions to any other unconsolidated
subsidiaries.

                4.

                Please
      tell us and revise future filings as appropriate to disclose your total
      investment in unconsolidated subsidiaries accounted for under the equity
      and cost methods and your policy for determining impairment of these
      assets.

      Response: At June 30, 2008,
the Company’s investments in unconsolidated subsidiaries accounted for under the
equity and cost methods were $0.7 million and $16.0 million,
respectively.

      The
Company’s policy for determining impairment includes an evaluation of whether a
loss in value of an investment is other than temporary. Evidence of a loss in
value includes absence of an ability to recover the carrying amount of the
investment or the inability of the investee to sustain an earnings capacity
which would justify the carrying amount of the investment. The Company performs
impairment tests whenever indicators of impairment are present. If
the value of an investment declines and it is considered other than
temporary, the investment is written down to its respective fair value in the
period in which this determination is made.

      The
Company notes the Staff’s comment and will expand its disclosures in future
annual filings to include its total investment in unconsolidated
subsidiaries accounted for under the equity and cost methods and the
Company’s policy for determining impairment of these assets (as documented
above).

      Reclassifications and
Corrections, page 56

                5.

                We
      note a $2 million tax benefit recognized in 2007 as a result of your
      detailed analysis of your tax positions.  Please tell us how
      this analysis coincided with your implementation of FIN 48 such that
      current period recognitio