Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (November 2022)
24 slides from Central Pacific Financial Corp New's investor presentation, Nov 17, 2022
Slide 1: Investor Presentation November 2022
Investor Presentation November 2022
Slide 2: Forward-Looking Statements
2Central Pacific Financial Corp. Forward-Looking Statements This document may contain forward-looking statements (“FLS”) concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the payment or nonpayment of dividends, capital position, credit l
Slide 3: Central Pacific Financial - Corporate Profile
3Central Pacific Financial Corp. Central Pacific Financial - Corporate Profile MARKET INFORMATION NYSE TICKER CPF SUBSIDIARY CENTRAL PACIFIC BANK (CPB) TOTAL ASSETS $7.3 BILLION MARKET CAP $573 MILLION SHARE PRICE $21.14 DIVIDEND YIELD 4.9% Central Pacific Financial Corp. is a Hawaii-based bank hold
Slide 4: 3rd Quarter 2022 Financial Highlights
44Central Pacific Financial Corp. 3rd Quarter 2022 Financial Highlights • Strong loan growth of 9% on an annualized basis • Net interest income grew by $2.4 million or 4.5% from the prior quarter • NIM expansion of 12 bps sequential quarter • Strong asset quality with NPAs at 0.06% of total assets •
Slide 5: CPF Investment Highlights
5Central Pacific Financial Corp. CPF Investment Highlights Well positioned to capitalize on improving Hawaii trends Consistent & sustainable growth Valuable deposit franchise Focus on driving efficiency Strong credit & capital profile Digital & BaaS initiatives to expand future market & growth 1 2 3
Slide 6: Factors for a Favorable Hawaii Outlook
6Central Pacific Financial Corp. FACTORS FOR A FAVORABLE HAWAII OUTLOOK Rebound in International visitors expected • Japanese visitors to Hawaii expected to increase as travel restrictions have been removed Military spending serves a prominent and growing role in Hawaii’s economy • Defense spending
Slide 7: Loan Portfolio Composition
7Central Pacific Financial Corp. C&I 10% Construction 3% Residential Mortgage 35% Home Equity 13% Coml Mortgage 25% Consumer 14% Loan Portfolio Composition as of September 30, 2022 Core loans grew in 3Q 2022 by 9.2% on a linked quarter annualized basis Strong and diverse loan portfolio, with over 75
Slide 8: Residential Mortgage Strength
8Central Pacific Financial Corp. Residential Mortgage Strength SMALL BUSINESSES HAWAII RESIDENTIAL MARKET • Housing prices continue to be very strong with median price of $1.05 million • While demand has cooled slightly, properties continue to move quickly with median days on market at 19 days CPB R
Slide 9: Small Business Leader
9Central Pacific Financial Corp. Small Business Leader SMALL BUSINESSES 2021 Lender of the Year Category 2 by the SBA’s Hawaii District Office Originated more SBA loans based on count and $ than the 3 other large Hawaii banks combined1 Innovative Programs & Technology CPB Foundation started a fina
Slide 10: Japan Competitive Advantage
10Central Pacific Financial Corp. Japan Competitive Advantage • Paul Yonamine, CPF CEO, is on the Board of Directors of Sumitomo Mitsui Banking Corporation (SMBC) and Seven & i Holdings. He previously served as the IBM Japan President and led KPMG Consulting in Japan • Hikaru Utsugi, head of CPB Int
Slide 11: Deposit Portfolio Composition
11Central Pacific Financial Corp. • Strong deposit portfolio consisting of 92% core deposits and a total deposit cost of just 0.14% in the 3Q 2022 • Total interest-bearing deposit repricing beta of 11% thus far in this cycle 4,000 4,500 5,000 5,500 6,000 6,500 7,000 2016 2017 2018 2019 2020 2021 3Q2
Slide 12: CPF Deposit Cost Advantage
12Central Pacific Financial Corp. 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q1 2022 Q2 2022 Q3 2022 Total Deposit Cost CPF Peer average* Fed Funds 47 bps funding advantage CPF Deposit Cost Advantage * U.S. Public ba
Slide 13: Branch Consolidation and FTE Reduction for Efficiency
13Central Pacific Financial Corp. Branch Consolidation - 8 branches consolidated since 2020 (-23%) - Currently operating 27 branches in the State of Hawaii FTE Reduction - Reduced total FTE from 833 to 774 over the last 2 years (-7%) through attrition enabled by efficiency gains SUCCESSFUL EXECUTION
Slide 14: Strong and Diversified Loan Portfolio, Credit Quality
14Central Pacific Financial Corp. Strong and diversified loan portfolio combined with solid credit risk management CPF credit quality compares favorably to peer banks 0.08% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Nonperforming Loans / Total Loans 1.19% 0.50%
Slide 15: Strong Credit Profile to Weather a Recession
15Central Pacific Financial Corp Strong Credit Profile to Weather a Recession Key Strength Factors: • Loan portfolio is over 75% secured by real estate with strong LTVsReal Estate Focus • 83% of total loan portfolio is in Hawaii • Hawaii real estate values are exceptionally strong and have a track r
Slide 16: Regulatory Capital Ratios and Shareholder Return
1616Central Pacific Financial Corp. 0.0% 4.0% 8.0% 12.0% 16.0% Tier 1 Leverage CET1 Total Capital Regulatory Capital Ratios As of September 30, 2022 Regulatory Minimum Well-Capitalized CPF 13.7% 10.6% Solid Capital Position 8.7% STRONG CAPITAL AND SHAREHOLDER RETURN • Maintained quarterly cash divid
Slide 17: Shaka Digital Bank and Banking-as-a-Service
17Central Pacific Financial Corp. Shaka - Hawaii’s first fully digital bank account • Successful launch with over 4,000 accounts opened in the first 6 months • Product expansion and continued development ongoing • Unique brand marketing and social-media strategy • Meeting the needs of younger genera
Slide 18: Swell Risk Management
18Central Pacific Financial Corp. Swell Risk Management Strategy is being adjusted as appropriate to mitigate evolving risks • Continue to go slowly, learn and iterate • Financial impact to CPF has been immaterial to date; anticipate less than $4 million in loan/deposit balances by year-end 2022 • E
Slide 19: Mahalo
Mahalo
Slide 20: Appendix
20Central Pacific Financial Corp. Appendix
Slide 21: Central Pacific Bank ranked #1 Best-in-State Bank in Hawaii for 2022
21Central Pacific Financial Corp. Central Pacific Bank ranked #1 Best-in-State Bank in Hawaii for 2022
Slide 22: Historical Financial Highlights
22Central Pacific Financial Corp Historical Financial Highlights (*) Certain amounts in prior years were reclassified to conform to current year's presentation. These reclassifications had an immaterial impact to our previously reported efficiency ratios. ($ in millions) 3Q 2Q 1Q 2021 2020 2019 2018
Slide 23: Net Interest Income Rate Sensitivity
23Central Pacific Financial Corp. • Stable, low-rate sensitive core deposit base has supported NIM expansion • 3Q 2022 NIM increased by 12 bps sequential quarter to 3.17% due to asset sensitivity and the rising rate environment * Immediate reflects an instantaneous, parallel rate shock, whereas grad
Slide 24: Environmental, Social & Governance (ESG)
24Central Pacific Financial Corp. Environmental, Social & Governance (ESG) 2021 ESG report released in early 2022 can be viewed here: https://www.cpb.bank/esg
Central Pacific Financial — Investor Presentation (November 2022) on 6ix