Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (May 2016)
27 slides from Central Pacific Financial Corp New's investor presentation, May 13, 2016
Slide 1: Central Pacific Financial Corp. May 2016
A. CATHERINE NGO President & Chief Executive Officer DAVID S. MORIMOTO Executive Vice President & Chief Financial Officer May 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements 1 This presentation may contain forward-looking statements concerning: projections of revenues, income/loss, earnings/loss per share, capital expenditures, dividends, capital structure, or other financial items, plans and objectives of management for future operations, fut
Slide 3: Corporate Profile
Corporate Profile 2 Founded in 1954 by Japanese-American veterans of World War II Fourth largest financial institution in Hawaii. 2011: $345 million recapitalization, including rights offering. Profitable every quarter since recapitalization CPF stock price is up ~ 125% from recapitalization
Slide 4: Shareholder Value Drivers
Shareholder Value Drivers 3 Strong Hawaii Market Relationship Banking Growth Opportunities Asset Quality Improvements Technology & Efficiency Enhancements Capital Optimization
Slide 5: Hawaii at a Glance
Population of 1.4 million (2015). Eight major islands – Oahu is home to 70% of the state’s total population. Real State GDP (2015) $70.8 billion, +2.0% from 2014. Forecasts expect a 2.3% increase in 2016. Unemployment rate (2015) 3.2% is below the national unemployment rate of 5.0%. Econom
Slide 6: Diversity of Tourism – Visitor Arrivals
Diversity of Tourism – Visitor Arrivals 5 Source: Hawaii Tourism Authority US West 41.2% US East 21.0% Japan 17.6% Canada 6.1% Australia 4.7% China 2.2% Korea 2.3% Europe 1.7% Other 3.4% Visitor Arrivals 2015
Slide 7: Consistently Lower Unemployment Rates
6 Source: Department of Labor, Bureau of Labor Statistics. Note: National data as of April 2016 and Hawaii data as of March 2016. Consistently Lower Unemployment Rates 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% U.S. 5.0% Hawaii 3.1%
Slide 8: Strong Real Estate Market
7 Source: Honolulu Board of Realtors & National Association of Realtors . Data as of March 2016. Strong Real Estate Market $725.0 $224.3 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 T h ous an d s Existing Single Family Ho
Slide 9: Continued Growth and Development
Continued Growth and Development 8 1. Residential High-Rise Condominium Development in Honolulu Proposed master plan includes 22 new high-rise towers in Honolulu. Ten developments have completed successful sales and begun construction or have completed construction over the past few years. 2. Ra
Slide 10: Hawaii Banking Market
Hawaii Banking Market Note: Deposit data as of March 31, 2016. For consistency, total deposits at the regulated depository level. Source: SNL Financial 9 Total Deposits Market Rank Institution Type Ownership Branches (millions) Share 1 First Hawaiian Bank Bank Private - BNP 62 $16,054 38.3% 2 Bank o
Slide 11: CPB Branch Positioning
Kauai (2) Oahu (27) Maui (4) Hawaii (2) CPB Branch Positioning ($ millions) March 31, 2016 10 Total Assets $5,242 Total Loans $3,309 Total Deposits $4,497 Total Branches 35
Slide 12: Relationship Banking Growth Opportunities
Relationship Banking Growth Opportunities 11 Launched a customer experience initiative to create a competitive advantage and differentiate ourselves from the rest of the market. Identified and focused on select market niches. Established a strategic alliance with a regional bank in Japan to de
Slide 13: Strong Loan Growth
Strong Loan Growth 12 1Q2016 net growth of $97 million, or 3.0% unannualized. $4,030 $3,042 $2,169 $2,064 $2,204 $2,631 $2,932 $3,212 $3,309 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 2008 2009 2010 2011 2012 2013 2014 2015 1Q2016 Balances Outstanding Comml Mtg Construct/Dev C&I
Slide 14: Core Deposit Franchise
Core Deposit Franchise 13 $4.5 billion in deposits as of 3/31/2016, with total core deposits at 81% Noninterest-Bearing DDA 25% Interest-Bearing DDA 19% Savings & Money Mkt 33% CDs < $100M 5% CDs > $100M 4% Government CDs 14%
Slide 15: Total Deposit Cost Advantage
Total Deposit Cost Advantage 14 Note: National peer group is comprised of publicly traded U.S. banks with total assets between $3 and $5 billion. Source: SNL Financial 1.63% 1.09% 0.64% 0.30% 0.14% 0.11% 0.09% 0.09% 0.11% 2.41% 1.67% 1.09% 0.79% 0.56% 0.42% 0.36% 0.37% 0.39% 0.00% 0.50% 1.00% 1.50%
Slide 16: Significantly Reduced NPAs
$122 $500 $303 $195 $90 $47 $42 $16 $16 $- $100 $200 $300 $400 $500 $600 2008 2009 2010 2011 2012 2013 2014 2015 1Q2016 Million s C&D Comml Mtg Res Mtg C&I/Other Significantly Reduced NPAs 15 0.30% of Total Assets
Slide 17: Strong Reserve Coverage
Strong Reserve Coverage 16 Note: National peer group is comprised of publicly traded U.S. banks with total assets between $3 and $5 billion. Source: SNL Financial 2.97% 6.75% 8.89% 5.91% 4.37% 3.19% 2.53% 1.97% 1.88% 1.50% 1.93% 1.97% 1.82% 1.61% 1.44% 1.22% 1.07% 1.04% 0.00% 1.00% 2.00% 3.00% 4.00%
Slide 18: Technology & Efficiency Enhancements
Technology & Efficiency Enhancements 17 2014/ 2015 Completed 2016 Underway Outsourced the Core System – Established a data governance foundation and a more disciplined IT resource management model. Outsourced Items Processing – Under declining processing volumes, converted IP related fixed costs
Slide 19: Targeting Improved Efficiency Ratio
40% 60% 80% 100% 120% 2008 2009 2010 2011 2012 2013 2014 2015 1Q2016 Efficiency Ratio Targeting Improved Efficiency Ratio 18 Normalize balance sheet composition and net interest income over time. Improve efficiencies by leveraging data warehouse and branch automation functionalities. Enhance c
Slide 20: Capital Optimization
Capital Optimization 19 Reinstated quarterly cash dividend of $0.08 per share in 3Q2013. Increased cash dividend by 25%, 20%, and 17% in 3Q2014, 1Q2015, 4Q2015, respectively. Aggregate cash dividends of $51 million returned to our shareholders since 3Q2013. Share repurchase activity to optim
Slide 21: Shareholder Value Drivers
Shareholder Value Drivers 20 Strong Hawaii Market Relationship Banking Growth Opportunities Asset Quality Improvements Technology & Efficiency Enhancements Capital Optimization
Slide 22: Appendix
APPENDIX @&. CENTRAL PACIFIC Y’ FINANCIAL CORP
Slide 23: Financial Highlights
Financial Highlights 22 ($ in millions) 3mos ended 3/31/2016 2015 2014 2013 2012 2011 Balance Sheet (period end data) Loans and leases $3,309.0 $3,211.5 $2,932.2 $2,630.6 $2,203.9 $2,064.4 Total assets 5,242.2 5,131.3 4,853.0 4,741.2 4,370.4 4,132.9 Total deposits 4,496.6 4,433.4 4,110.3 3,936.2 3,6
Slide 24: Loan and Credit Composition
Loan and Credit Composition 23 ($ in Millions) Balance % Balance % $ % Hawaii Portfolio Residential Mortgage $1,459 44% $1,300 44% $159 12% Commercial Mortgage 646 20% 586 20% 60 10% Commercial & Ind/Leasing 358 11% 318 11% 40 13% Construction 98 3% 109 4% -11 -10% Consumer & Other 270 8% 253 9% 17
Slide 25: Nonperforming Portfolio Marked to Market
Nonperforming Portfolio Marked to Market 24 [1] NPA includes nonaccrual loans, loans held for sale, and other real estate owned. [2] Net losses includes charge-offs, write-downs, losses on sale, and recoveries to date in respective loan buckets. Note: NPAs are evaluated for impairment on a quarterly
Slide 26: Stable Net Interest Margin
Stable Net Interest Margin 25 NIM has been stable for over 2 years. Expect NIM to be in the 3.25 t0 3.35% range over the next couple of quarters. Future improvements in the NIM will result from continuing to grow the loan portfolio and stabilizing the investment and loan yields. 4.02% 3.62% 2.
Slide 27: CPF Peer Comparison - 1Q2016
CPF Peer Comparison- 1Q2016 26 [1] NPA includes nonaccrual loans, loans held for sale, and other real estate owned. Source: SNL Financial. National peer group is comprised of publicly traded U.S. banks with total assets between $3 and $5 billion. Financial data for CPF and National PG as of March 31
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