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CORRESP
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    commentletter.htm

              Central Pacific
      Plaza

              PO Box 3590

              Honolulu  Hawaii
      96811-3590

              Telephone
      808-544-0500

              Fax Line
      808-531-2875

      December
26, 2008

        Mr. Kevin
W. Vaughn

        Branch
Chief

        Securities
and Exchange Commission

        Division
of Corporation Finance

        Washington,
DC 20549

                  Re:

      Central Pacific Financial Corp.

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

      Form 10-Q for the Periods Ended March 31, June 30 and September 30,
      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 December
11, 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 and December
31, 2008 as the “2007 Form
10-K” and “2008 Form 10-K,”
respectively. We refer to the Form 10-Q for
the fiscal quarter ended March 31 and June
30, 2008 as the “Q1 2008 Form
10-Q” and “Q2 2008 Form 10-Q,”
respectively.

          Comment numbering used for each response set forth below
corresponds to the comment numbering used in the Staff’s
letter.

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

          Financial Statements,
beginning on page 48

          Note 1. Summary of
Significant Accounting Policies, page 56

          Reclassifications and
Corrections, Page 56

                    1.

                    Please
      refer to your response to prior comment 2 of our comment letter dated
      October 16, 2008. Regarding your proposed revisions to future fillings,
      please include language that the correction of out of period amounts was
      also not material to the periods in which the errors originated, as set
      forth in your response. Also, please footnote the rate reconciliation
      table in future filings to disclose the quantitative effect of the
      corrections on the specific line item of your rate
      reconciliation.

          Response:

          The
Company notes the Staff’s comment and in relevant future filings will include
language that the correction of out of period amounts was not material to the
periods in which the errors originated. Furthermore, the Company will also
footnote the rate reconciliation table in those future filings to disclose the
quantitative effect of the corrections on the specific line item of the rate
reconciliation.

          Goodwill and Other
Intangible Assets, page 59

                    2.

                    We
      note your response to prior comment 3 from our comment letter dated
      October 16, 2008 regarding the valuation methodologies used to determine
      the fair value of your reporting units. Please respond to the following
      questions regarding the different methodologies
  used:

                    ·

                    Tell
      us why you decided to only use one valuation methodology for your
      commercial real estate reporting unit and two methodologies (capitalized
      earnings and guideline company method) to determine the fair value of your
      Hawaii market reporting unit.

          Response:

          For the
Commercial Real Estate reporting unit, the Company concluded that a market
approach was not appropriate in light of the rapid deterioration in the
California real estate sector.  This deterioration led to uncertainty
in the marketplace and made it difficult to reliably adjust market multiples to
account for this volatility.  As a result, the Company relied solely
on the use of a discounted cash flow methodology.

          Consistent
with past practice for the Hawaii Market reporting unit, the Company determined
that there were appropriate market metrics for guideline companies and
sufficient underlying financial information was available to support the use of
a market approach.  Accordingly, the Company was able to apply both an
income approach (capitalized earnings method) and a market approach
(guideline company method) for this reporting unit.

                    ·

                    Tell
      us why you performed a more limited capitalized earnings method for
      determining the fair value of your Hawaii Market, as opposed to a
      discounted cash flows method.

          Response:

          The
Company utilized the capitalized earnings method instead of a discounted cash
flow method to value its Hawaii Market reporting unit based on the stability of
its forecasted earnings stream.  The financial performance of the
Hawaii Market reporting unit has been, and is expected to remain, relatively
stable in comparison to the Commercial Real Estate reporting
unit.  This stability is primarily attributable to the fact that the
Hawaii Market reporting unit’s operations are conducted exclusively in the state
of Hawaii, which has not experienced the same challenging market conditions
faced on the mainland.  Accordingly, the Company concluded that the
use of the capitalized earnings method, in combination with the guideline
company method, provided a reasonable indication of fair value.

          When
completing future goodwill impairment tests, the Company will continue to
evaluate the methodologies used to ensure that the derived fair values for each
of its reporting units are appropriate and properly consider current market
conditions.

                    ·

                    Tell
      us whether a control premium assumption was used in the guideline company
      method. If so, please tell us what the assumption was and how it was
      derived.

              2

          Response:

          A control
premium assumption of 20% and 24% was used in the Guideline Company approach at
June 30, 2008 and December 31, 2007, respectively. These percentages were
derived from industry-based transaction control premiums of recently completed
acquisitions of banks and thrifts using the following two screening criteria:
(1) transactions involving US banks and thrifts with asset sizes ranging from
$250 million to $5 billion and (2) banks and thrifts located in the states of
Hawaii, California, Oregon, and Washington.

                    ·

                    Tell
      us how you selected the 10 publicly traded guideline companies. As part of
      your response, please tell us whether you assumed any different multiples
      for allocation methods to account for any differences between your Hawaii
      Market and the comparable
companies.

          Response:

          Guideline
companies were selected based on the following criteria:

                    ·

                    Each
      company was engaged in regional commercial banking operations in the
      western region of the United
States;

                    ·

                    The
      lines of businesses of each company were closely-aligned with that of our
      Hawaii Market reporting unit;

                    ·

                    Each
      company was reasonably comparable in size to our Hawaii Market reporting
      unit in terms of total assets and similar loan composition;
      and

                    ·

                    Adequate
      financial information about each company was publicly
      available.

          After
identifying a preliminary list of potential guideline companies, the Company
researched and reviewed the business description of each company. The Company
then eliminated institutions that were not involved in similar lines of business
or did not face opportunities and risks similar to the Hawaii Market reporting
unit. Based on this qualitative process, the Company selected the 10 publicly
traded companies most similar to the Hawaii Market reporting unit.

          In order
to account for relative differences between our Hawaii Market reporting unit and
the guideline companies with respect to size, risk, growth, and profitability,
the Company considered several multiples and incorporated both an earnings
multiple (both pre-tax and after-tax) and a tangible book value multiple
(excluding goodwill and other intangible assets). Inclusion of an earnings
multiple provided the Company with an estimate of fair value based on the
earnings capacity of the Hawaii Market reporting unit in comparison to the
comparable companies; whereas inclusion of a tangible book multiple provided the
Company with an estimate of fair value based on the Hawaii Market reporting
unit’s tangible equity in comparison to the comparable companies.

                    ·

                    Tell
      us the fair values of the Hawaii Market reporting unit under both of your
      methodologies and whether you performed any analysis to understand any
      significant differences between the two methodologies. Additionally,
      please tell us how you ultimately arrived at the fair value estimate you
      arrived at (i.e. weighting of the two
  methodologies).

              3

          Response:

          The fair
value of the Hawaii Market reporting unit for each methodology used was as
follows:

                    At
      December 31,

                    2007

                    At
      June 30,

                    2008

                    (Dollars
      in thousands)

                    Capitalized
      Earnings

                  $
                  365,300

                  $
                  332,600

                    Guideline
      Company

                  368,150

                  327,500

                    Difference
      ($)

                  $
                  (2,850
                  )

                  $
                  5,100

                    Difference
      (%)

                  -1
                  %

                  2
                  %

          At
December 31, 2007, the Company applied a weighting of 30% and 70% to the
capitalized earnings and guideline company methods, respectively.  At
June 30, 2008, the capitalized earnings and guideline company methods were
weighted 50% each.

          Because
the fair values derived under both methodologies were consistent at both
December 31, 2007 (difference less than 1%) and June 30, 2008 (difference less
than 2%), an analysis to understand the differences between the two
methodologies was not considered necessary.  In addition, because the
derived fair values under both methodologies were so similar, adjusting the
relative weighting of the two methodologies would not have resulted in a
material difference to the fair values ultimately used as of each valuation
date.

                    ·

                    Tell
      us why you increased the long-term growth rate assumption by 1.0% from
      December 31, 2007 to June 30, 2008 in your capitalized earnings
      methodology.

          Response:

          During
the first and second quarters of 2008, the Hawaii Market reporting unit reported
improved net interest income and non-interest income from the preceding
quarters. This improvement was largely attributable to enhancements made to the
reporting unit’s branch infrastructure and significant growth in its residential
mortgage operation. Additionally, in July 2008, the Company finalized and
announced plans to expand its wealth management line of business. Based on these
enhancements and the Company’s renewed emphasis on investing in and growing its
core Hawaii franchise, the Company believes a 3.0% long-term growth rate is a
reasonable proxy for its future income expectations.

                    ·

                    Tell
      us what discount rates you used under the capitalized earnings methodology
      and how you arrived at those
estimates.

          Response:

          The
Company utilized a discount rate of 12.75% and 14.60% at December 31, 2007 and
June 30, 2008, respectively. The discount rates used equaled the Company’s
estimate of its cost of equity capital. To calculate its cost of equity capital,
the Company utilized the Capital Asset Pricing Model (CAPM).

          When
applying the CAPM,  the Company’s cost of equity capital was derived
by adjusting the “risk free rate” (20-year US Treasury rate) at the time of the
valuation by an estimated equity risk premium based on industry data and an
“equity beta” specific to the guideline companies selected.  These
results were then adjusted for “unsystematic risk factors,” including a “size
premium” and company specific risks. The methodology used to select guideline
companies was generally consistent with the methodology described
above.

              4

                    ·

                    Tell
      us whether your capitalized earnings methodology contained any
      normalization adjustments and if so, how they impacted your
      analysis.

          Response:

          The
Company incorporated a normalization adjustment for its provision for loan and
lease losses.  This normalization adjustment increased the net income
amount used in the Company’s capitalized earnings approach by approximately $3.1
million.

                    ·

                    Tell
      us the nature of the capital requirement charge under your capitalized
      earnings methodology, and how that impacts your
  analysis.

          Response:

          The
Company’s use of a capital requirement charge was necessary to reflect the fact
that the Hawaii Market reporting unit needs to retain a certain level of capital
to fund future growth. The capital requirement charge used in the Company’s
analysis was a 7.0% tangible equity to tangible assets ratio. This capital
requirement charge reduced the amount of cash flows available to common equity
holders in the Company’s analysis.

                    ·

                    Tell
      us the implied control premiums derived from the reconciliation to market
      capitalization you performed as of June 30, 2008 and December 31, 2007.
      Additionally, please provide us with more information about the research
      performed by SNL Financial related to control
  premiums.

          Response:

          The
implied control premiums derived from our reconciliation to the Company’s market
capitalization was 15.5% and 31.7% at June 30, 2008 and December 31, 2007,
respectively.

          In
assessing the reasonableness of the implied control premiums at each valuation
date, the Company considered observable transaction premiums from comparable
companies that have been acquired in private transactions (including mergers and
acquisitions).  The implied control premium at June 30, 2008 was on
the low end of these comparable transaction premiums, whereas the implied
control premium at December 31, 2007 was on the high end.  To ensure
the reasonableness of the implied control premium at December 31, 2007, the
Company also considered recent trends in its market capitalization leading up to
the valuation date as follows:

          At
November 30, 2007 and December 24, 2007, the Company’s market capitalization was
$587.8 million and $573.7 million, respectively.  Based on the derived
fair values of the Company’s reporting units at December 31, 2007, these market
capitalizations resulted in implied control premiums of 18.8% and 21.8% for each
respective period.  On December 31, 2007, the Company’s market
capitalization dropped to $530.8 million, which increased the implied control
premium to 31.7% at the valuation date.  The Company believes that the
increase in the implied control premium to 31.7% during the last week of
December 2007 was attributable to uncertainty surrounding the magnit