Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Q2 2023 Earnings Presentation
19 slides from Central Pacific Financial Corp New's earnings presentation, Jul 26, 2023
Slide 1: 2nd Quarter 2023 Earnings Supplement
2nd Quarter 2023 Earnings Supplement July 26, 2023
Slide 2: Forward-Looking Statements
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 losses, net interest margin or oth
Slide 3: Strong Hawaii Economic Position
Strong Hawaii Economic Position FACTORS FOR A FAVORABLE HAWAII OUTLOOK ▪ Tourism back up to pre-pandemic levels ▪ Substantial Federal government contracts and military investments ▪ Increase in public and private investments to address housing shortage ▪ Strong real estate market with stable prices
Slide 4: 2nd Quarter 2023 Financial Highlights
2nd Quarter 2023 2Q23 1Q23 Financial Highlights NET INCOME / $14.5 Mil / $16.2 Mil / • Improved liquidity position with greater cash DILUTED EPS $0.53 $0.60 position, deposit growth and modest loan decline PPNR $23.3 Mil $23.1 Mil • Pre-Provision Net Revenue (PPNR) stable RETURN ON 0.78% 0.87% ASSET
Slide 5: Diversified Loan Portfolio
Diversified Loan Portfolio Loan Portfolio Composition Loan Balances Outstanding-Excluding PPP as of June 30, 2023 6.00 Consumer C&I 13% 10% 5.55 5.56 5.52 Construction 5.50 4% 5.01 5.00 $ Billions 4.55 4.45 4.50 Coml Mortgage 4.08 25% 4.00 3.77 Residential Mortgage 3.53 35% 3.50 3.00 Home Equity 201
Slide 6: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio CRE Portfolio Composition Storage Other as of June 30, 2023 2% 5% Shopping Center Industrial/Warehouse 3% 28% Hotel 7% Mainland 24% Owner-Occupied 25% Office 14% Investor Hawaii 75% Restaurant 76% 1% Retail Apartment 17% 23% • Diversified CRE portfolio, primarily Haw
Slide 7: Consumer Loan Portfolio
Consumer Loan Portfolio Consumer Loan Portfolio as of June 30, 2023 • Total Hawaii Consumer $328MM / Total Mainland Consumer $386MM (in Millions) Mainland- • Weighted average origination FICO: Unsecured $143 , 20% • 742 for Hawaii Consumer • 739 for Mainland Consumer HI- Auto $220 , 31% • YTD Annual
Slide 8: Relationship Deposits - Diversified & Granular
Relationship Deposits - Diversified & Granular Total Deposits Deposit Portfolio Composition 7.00 6.81 Time 6.74 6.75 6.64 18% Noninterest Bearing Demand 6.50 30% 6.00 5.80 $ Billions 5.50 5.12 4.96 4.95 5.00 4.61 Savings & Money 4.50 Market Interest Bearing 32% Demand 20% 4.00 2016 2017 2018 2019 20
Slide 9: CPF Deposit Cost Advantage
CPF Deposit Cost Advantage High valued deposit franchise with proven history of funding cost advantage 6.00% 5.00% Total Deposit Cost 4.00% 3.00% Cycle-to-date int- bearing deposit beta of 24% 2.00% 63 bps funding advantage 1.00% 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 10: Strong Asset Quality
Strong Asset Quality Delinquencies 90+ Days/Total Loans Criticized/Total Loans 1.75% 1.39% 1.39% 1.28% 1.34% 0.06% 0.02% 0.03% 0.03% 0.03% 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 NPAs/Total Loans Annualized NCO/Avg Loans 0.24% ** 0.20% * 0.16% 0.12% 0.12% 0.09% 0.09% 0.10% 0.08% 0.08% 2Q22
Slide 11: Strong Credit Profile to Weather a Recession
Strong Credit Profile to Weather a Recession Key Strength Factors: Majority of Loans in • 83% of total loan portfolio is in Hawaii • Hawaii real estate values are exceptionally strong and have a track record of Hawaii outperforming the nation during past recessions • Loan portfolio is over 75% secur
Slide 12: Allowance for Credit Losses
Allowance for Credit Losses • $4.1MM provision for credit loss on loans in 2Q23 driven by net charge-offs, plus a $0.2MM reserve for unfunded commitments, for a total provision for credit loss of $4.3MM • ACL coverage ratio increased to 1.16% for 2Q23 $ Millions 2Q22 3Q22 4Q22 1Q23 2Q23 Beginning Ba
Slide 13: High Quality Securities Portfolio
High Quality Securities Portfolio Investment Portfolio Composition as of June 30, 2023 Non-Agency • $1.3B or ~17% of total assets Corporate 2% CMBS/RMBS 2% Other 2% Municipals • 81% government agency bonds 13% • 92% AAA rated • No securities sales YTD • HTM/AFS portfolio unrealized loss $68.7MM / $1
Slide 14: Available Sources of Liquidity
Available Sources of Liquidity • Ample alternative sources of liquidity available • Available sources of liquidity total 128% of uninsured/uncollateralized deposits $ Millions June 30, 2023 Cash on balance sheet 311 Other Funding Sources: Unpledged securities* 492 FHLB available borrowing capacity 1
Slide 15: Solid Capital Position
Solid Capital Position Regulatory Capital Ratios As of June 30, 2023 $220 Mil 16.0% capital 13.9% cushion to STRONG CAPITAL AND SHAREHOLDER RETURN 14.0% 12.0% 10.9% well 10.0% 8.7% capitalized • TCE ratio of 6.3% and CET1 ratio of 10.9% 8.0% minimum 6.0% • Maintained quarterly cash dividend at $0.26
Slide 16: Appendix
Appendix
Slide 17: Central Pacific Bank recognized by Newsweek and Forbes – Best Bank in Hawaii
Central Pacific Bank recognized by Newsweek and Forbes – Best Bank in Hawaii* * Newsweek ranked CPB best small bank in Hawaii for 2023. Forbes named CPB best bank in Hawaii for 2022. Central Pacific Financial Corp. 17
Slide 18: Environmental, Social & Governance (ESG) Focus
Environmental, Social & Governance (ESG) Focus * Central Pacific Financial Corp. * Amounts for 2022Y. Source: 2022 ESG Report can be found here: https://www.cpb.bank/esg. 18
Slide 19: Mahalo
Mahalo Central Pacific Financial Corp. 19
Central Pacific Financial Corp New — Q2 2023 Earnings Presentation on 6ix