Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Q3 2020 Earnings Presentation
26 slides from Central Pacific Financial Corp New's earnings presentation, Oct 28, 2020
Slide 1: Third Quarter 2020 Earnings Supplement
Third Quarter 2020 Earnings Supplement OCTOBER 28, 2020
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This document may contain forward-looking statements concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the payment or nonpayment of dividends, capital position, credit losses, net interest margin or other finan
Slide 3: Third Quarter 2020 Highlights
THIRD QUARTER 2020 HIGHLIGHTS • Quarterly results continue to be Net Income $6.9 Million impacted by provision for credit loss expense due to COVID-19 Diluted EPS $0.24 • Pre-tax, Pre-provision earnings remained strong Pre-Tax, $23.7 Million • Mortgage banking business Pre-Provision continues to out
Slide 4: Strong Credit Metrics
STRONG CREDIT METRICS Classified Assets Allowance for Credit Losses (ACL) 15.00% $100 1.90% $100 13.00% $80 1.70% $80 11.00% $60 1.50% $60 9.00% Incurred Loss Method $40 1.30% $40 7.00% 5.00% $20 1.10% $20 3.00% $0 0.90% $0 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20* 3Q20* Classified Assets + OREO
Slide 5: RISE2020 initiatives: digital banking, branch and operational transformation
• Launched cpb.bank • Committed to best-in-class website in November 2019 small business and cash management products, with • Launched new online and new platform fully rolled out mobile banking platforms 1 in July 2020 in August 2020 • Enhanced sales • Full ATM network upgrade DIGITAL REVENUE manag
Slide 6: COVID-19 Impact on Customer Behavior
COVID-19 IMPACT ON CUSTOMER BEHAVIOR . COVID-19 accelerated the migration to digital banking . Strong momentum and ideal timing for the RISE2020 digital banking strategy new product launch which occurred in August 2020 6 6
Slide 7: Newly Upgraded Online/Mobile Platforms & ATMs
NEWLY UPGRADED ONLINE/MOBILE PLATFORMS & ATMS . New online/mobile platform publicly launched late August 2020. New mobile app rating 4.8 & 4.5 out of 5 stars* on Apple and Android respectively . Complete personal financial management (PFM) all in one-site, with account aggregation, budgeting, and go
Slide 8: Branch Consolidation Initiative
BRANCH CONSOLIDATION INITIATIVE • 35 active branches prior to the pandemic, with 27 on the island of Oahu (pictured) • 13 temporarily closed in April 2020; 6 have since re-opened • 3 branches identified in red were consolidated into neighboring branches and digital channels in 3Q 2020; 4th branch in
Slide 9: Resilient Hawaii Market
RESILIENT HAWAII MARKET State of Hawaii STRENGTHS AND RECOVERY FACTORS Real Gross State Product (GSP) 2019 Tourism • Re-opened tourism on October 15 for trans- Other*, 24% Related, 23% Pacific travelers with a negative COVID-19 test Healthcare, • While tourism drives ~20% of GDP, 7% government/defen
Slide 10: Solid Capital & Liquidity Position
SOLID CAPITAL & LIQUIDITY POSITION Regulatory Capital Ratios STRONG CAPITAL As of September 30, 2020 . $170 million capital cushion to the 16.0% well-capitalized Total RBC minimum of 13.9% Total 10% at 9/30/20 RBC 14.0% 1.1% . 3Q2020 PTPP earnings of $23.7 12.0% 1.2% million Tier 2 10.0% . $55 milli
Slide 11: Total Loan Portfolio
TOTAL LOAN PORTFOLIO Total Loan Portfolio of $5,031MM Outstanding Balance as of 9/30/20 $ in Millions Commercial Consumer & Industrial Loan Portfolio Highlights $500 / 10% $528 / 10% Paycheck Protection • Conservative and Program Diversified Loan Portfolio CRE – Investor $529 / 11% $909 / 18% – 46%
Slide 12: Commercial & Industrial – Industry Composition
COMMERCIAL & INDUSTRIAL – INDUSTRY COMPOSITION Outstanding Balance as of 9/30/20 $ in Millions Healthcare Loan Portfolio Details $94 / 18% • Many borrowers are essential Other businesses Industries $162 / 30% • Well established, locally owned and operated by strong management Borrowers have good liq
Slide 13: Paycheck Protection Program [PPP]
PAYCHECK PROTECTION PROGRAM [PPP] Outstanding Balance as of 9/30/20 $ in Millions Other Industries Foodservice $75 / 14% $77 / 14% Transportation Loan Portfolio Details & Warehousing • Over 7,000 loans made $24 / 5% • Granular with average Wholesale Trade outstanding loan amount of $25 / 5% Healthca
Slide 14: Commercial Real Estate – Property Type Composition (Owner Occupied)
COMMERCIAL REAL ESTATE – PROPERTY TYPE COMPOSITION Outstanding Balance as of 9/30/20 $ in Millions Other Loan Portfolio Details $26 / 11% • Strong borrowers that operate out of their own properties Restaurant $11 / 5% • Well-collateralized with WA LTV of 65% Industrial $112 / 48% • 94% secured in Ha
Slide 15: Commercial Real Estate – Property Type Composition (Investor)
COMMERCIAL REAL ESTATE – PROPERTY TYPE COMPOSITION Outstanding Balance as of 9/30/20 $ in Millions Self Storage $24 / 3% Other Loan Portfolio Details Restaurant $26 / 3% $27 / 3% • Seasoned real estate investors Hotel $48 / 5% • Well-collateralized with WA LTV of 59% Multi-Family $310 / 34% • 77% se
Slide 16: High Risk Industries
HIGH RISK INDUSTRIES Outstanding Balance as of 9/30/20 $ in Millions Payment % of Total Deferral Criticized Outstanding Loan Total as % of as % of Balance Portfolio Payment Total Loans Total Total Loans Industry (Excl. PPP) (Excl. PPP) Deferral (Excl. PPP) Criticized (Excl. PPP) C&I CRE PPP Foodserv
Slide 17: Residential Mortgage
RESIDENTIAL MORTGAGE Outstanding Balance as of 9/30/20 $ in Millions Investor & Second Home $311 / 19% Loan Portfolio Details • 100% in Hawaii; 89% on Oahu • 83% of loan balance are loans <$1.0MM • Average outstanding loan amount of $438,000 • WA LTV 62%1 $1,680MM • WA FICO 773 33% • Criticized loan
Slide 18: Home Equity
HOME EQUITY Outstanding Balance as of 9/30/20 $ in Millions Investor & Second Home $68 / 13% Loan Portfolio Details • 100% in Hawaii; 85% on Oahu • 50% of loan balance are lines/loans <$250 thousand • Average outstanding loan amount of $139,000 • 55% are 1st mortgages • 19% are 2nd mortgages behind
Slide 19: Consumer
CONSUMER Outstanding Balance as of 9/30/20 $ in Millions Total Consumer Loan Portfolio Details • Total Consumer Auto Personal $264 / 53% $236 / 47% − HI WA FICO 697 − ML WA FICO 7581 $500MM 10% • Auto − HI WA FICO 675 − ML WA FICO 7501 • Personal Auto Personal − HI WA FICO 707 Mainland 1 $55 / 21% −
Slide 20: Loan Payment Deferrals Continue to Decline
LOAN PAYMENT DEFERRALS CONTINUE TO DECLINE Re- $ Millions % of Deferral As of Sept. 30, 2020 On 1st Deferral On 2nd Deferral On 3rd Deferral Total Active Deferrals Asset Class1 Total back on Payment Rate2 $ Count $ Count $ Count $ Count $ Count RESIDENTIAL MORTGAGE 29.1 72 74.0 144 - - 103.1 216 5%
Slide 21: Loan Payment Deferrals – Portfolio & Industry
LOAN PAYMENT DEFERRALS – PORTFOLIO & INDUSTRY Outstanding Balance as of 9/30/20 $ in Millions Deferrals By Loan Portfolio CRE and C&I Deferrals By Industry Other Services Healthcare $3 / 2% $4 / 3% Real Estate and Consumer Other Industries Rental & Leasing $54 / 19% $8 / 5% Residential $47 / 35% $10
Slide 22: Loans Rated Special Mention
LOANS RATED SPECIAL MENTION Outstanding Balance as of 9/30/20 $ in Millions Loan Portfolio Highlights Utilities Construction $149MM Special Mention Loans; $3 / 2% $5 / 4% 3.3% of Total Loan Portfolio (excl PPP) Other Industries $12 / 8% Credit Risk Management Approach Real Estate and • Ongoing monit
Slide 23: Loans Rated Classified
LOANS RATED CLASSIFIED Outstanding Balance as of 9/30/20 $ in Millions Residential/HELOC $5 / 11% Loan Portfolio Highlights $48MM Classified Loans; Foodservice 1.1% of Total Loan Portfolio (excl PPP) $2 / 3% • Real Estate and Rental & Leasing Other Industries Real Estate and $2 / 5% Rental & Leasing
Slide 24: Appendix
APPENDIX 24 24
Slide 25: Corporate Profile
CORPORATE PROFILE Founded in 1954 by Japanese- American MARKET INFORMATION veterans of World War II NYSE TICKER CPF Over 65 years later, Central Assets $6.6B Pacific continues to work for our customers, shareholders, Market Cap $382 Mil employees and the community Share Price $13.57 Dividend Yield 6
Slide 26: Non-GAAP Financial Measures - Excluding PPP
Non-GAAP Financial Measures- Excluding PPP Sept. 30, Sept. 30, 2020 PPP 2020 Actual Exclusions1 Adjusted Net Interest Income2 $ 49.3 $ (3.4) $ 45.9 Total Interest-Earnings Assets $ 6,160.4 $ (544.7) $ 5,615.7 Net Interest Margin3 3.19% 3.26% Tangible Common Equity4 $ 543.9 $ 543.9 Total Assets $ 6,6
Central Pacific Financial — Q3 2020 Earnings Presentation on 6ix