Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (February 2019)
26 slides from Central Pacific Financial Corp New's investor presentation, Feb 14, 2019
Slide 1: A. CATHERINE NGO PresidentPAUL & YONAMINEChief Executive Officer Chief Executive Officer DAVID S. MORIMOTO
A. CATHERINE NGO PresidentPAUL & YONAMINEChief Executive Officer Chief Executive Officer DAVID S. MORIMOTO ExecutiveA. CATHERINE Vice President NGO & PresidentChief Financial Officer AUGUST 2018 DAVID S. MORIMOTO Chief Financial Officer FEBRUARY 2019
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 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, futur
Slide 3: Corporate Profile
CORPORATE PROFILE Founded in 1954 by Japanese-American veterans of World War II 65 years later, Central Pacific continues to MARKET work for our customers, shareholders, INFORMATION employees and the community. NYSE TICKER CPF Assets $5.8B Market Cap $844 Mil Share Price $29.24 Dividend Yield 2.80%
Slide 4: CPB Branch Positioning
CPB BRANCH POSITIONING Oahu (27) Kauai (2) Maui (4) 35 BRANCHES IN THE STATE OF HAWAI'I Hawai'i (2) Concentrated on Oahu where 70% of the State’s population lives. 4
Slide 5: Shareholder Value Drivers
SHAREHOLDER VALUE DRIVERS 1 STRONG HAWAII MARKET & 12 ATTRACTIVE MARKET POSITION NICHE GROWTH OPPORTUNITIES 3 SUPPORTED WITH 2 STRONG EFFICIENCY PRODUCTS IMPROVEMENT OPPORTUNITY 4 SOLID CAPITAL AND CREDIT 5
Slide 6: Strong Hawaii Market
STRONG HAWAII MARKET REAL GDP HOUSING ECONOMIC DRIVER LABOR MARKET $79.5B in 2017 $788,000 Tourism drives 2.5% up 1.2% from Median single 20% of Hawaii Unemployment 2016. family home price GDP; 9.8M visitor compared to on Oahu arrivals and 3.9% nationally $17.8B in visitor spending Note: Housing, Ec
Slide 7: Diversity of Tourism – Visitor Arrivals
DIVERSITY OF TOURISM – VISITOR ARRIVALS Europe Visitor Arrivals 1.5% Australia / New 2018 China Korea Zealand 1.4% 2.3% Other 4.2% 4.4% Canada 5.4% US West 42.9% Japan 16.0% 2018 GROWTH REGIONS US West +10% US East US East +8% 21.9% Australia/New Zealand +3% Canada +3% Source: Hawaii Tourism Authori
Slide 8: Significant Hawaii Residential Development
SIGNIFICANT HAWAII RESIDENTIAL DEVELOPMENT . Kaka’ako: 22 New High- Rise Condominiums in Honolulu. 13 completed, 9 in progress or planning. . Ho’opili: 11,750 new home development project with building permits of $4.6B underway in West Oahu . Koa Ridge: 3,500 new home development project underway in
Slide 9: Significant Hawaii Public & Commercial Development
SIGNIFICANT HAWAII PUBLIC & COMMERCIAL DEVELOPMENT . Rail Construction for 20-mile route on Oahu with an estimated cost of $8.3B . Modernization of the Daniel K. Inouye International Airport in Honolulu, $1.3B project . Atlantis Resort Development in West Oahu, 26 acres with an estimated cost of $2B
Slide 10: Attractive Position in Hawaii Market
ATTRACTIVE POSITION IN HAWAII MARKET LARGE SMALL INSTITUTIONS INSTITUTIONS . First Hawaiian Bank . Territorial Savings . $20B total assets . $2B total assets . . 61 branches $5.7B total assets . 29 branches . 35 branches . Bank of Hawaii . Hawaii National Bank . $17B total assets . $0.6B total asset
Slide 11: Niche Banking Growth Opportunities
NICHE BANKING GROWTH OPPORTUNITIES . SMALL SBA Lender of the Year Category II, 7 years in a row, with more loans originated than the BUSINESSES 3 other large Hawaii banks combined CPB leads the Hawaii . Streamlined credit underwriting, Small Business market documentation and booking processes . Rela
Slide 12: Small Business Online Banking Product
SMALL BUSINESS ONLINE BANKING PRODUCT . Valuable tool for small businesses to automate banking transactions and processing . Multi-user logins . Mobile functionality . No monthly fees . Strong and consistent client enrollments since product launch in July 2016 12
Slide 13: Flagship Deposit Product - Exceptional Plan
FLAGSHIP DEPOSIT PRODUCT- EXCEPTIONAL PLAN Plan links personal deposit accounts with a combined minimum balance of $10,000 and offers numerous free benefits and services to the customer. PRODUCT SUMMARY CUSTOMER BENEFITS Total Balances $1.4 Billion ATM fees waived Wtd Avg Rate 0.11% Free checks
Slide 14: Deposit Pricing Sensitivity
DEPOSIT PRICING SENSITIVITY CYCLE TO DATE YEAR OVER YEAR 4Q15 4Q18 Beta 4Q17 4Q18 Beta Fed Funds 0.50% 2.25% 1.75% 1.50% 2.25% 0.75% Total Deposit Rates 0.09% 0.43% 0.34% 19% 0.28% 0.43% 0.15% 20% Core Rates ($4.0B) 0.06% 0.10% 0.04% 2% 0.07% 0.10% 0.03% 4% Non-Core Rates ($0.9B) 0.2
Slide 15: Efficiency Ratio Improvement with Further Opportunity
EFFICIENCY RATIO IMPROVEMENT WITH FURTHER OPPORTUNITY 120% Efficiency Ratio 100% 80% 63.6% 60% 40% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 EFFICIENCY INITIATIVES . Reallocate assets from the investment securities portfolio to the loan portfolio. . Reduce higher cost public deposits an
Slide 16: Strong Capital Position & Continued Optimization
STRONG CAPITAL POSITION & CONTINUED OPTIMIZATION Regulatory Capital Ratios As of December 31, 2018 18.0% 14.7% Total CASH DIVIDENDS RBC 16.0% . $0.21 per share in 4Q18, up 17% YoY 1.2% . Dividend yield of 2.80%* 14.0% 1.6% . Dividend payout ratio of 39% in 4Q18 12.0% and 41% for the year ended 2018
Slide 17: Solid Credit Position
SOLID CREDIT POSITION $600 $500 Non-Performing Assets $500 $400 $303 Millions $300 $196 $200 $144 0.05% of $90 Total Assets $100 $47 $42 at 12/31/18 $16 $9 $4 $3 $- 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 C&D Comml Mtg Resi Mtg/Home Equity C&I/Other 17
Slide 18: Strong Reserve Coverage
STRONG RESERVE COVERAGE ALLL/Total Loans 10.00% 8.89% 9.00% 8.00% 7.00% 6.75% 5.91% 6.00% 5.00% 4.37% 4.00% 3.19% 2.97% 2.00% 1.97% 2.53% 3.00% 2.08% 1.97% 1.69% 1.61% 1.48% 1.48% 1.33% 1.23% 2.00% 1.11% 0.98% 0.94% 1.17% 1.00% 0.00% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 CPF Peer No
Slide 19: Shareholder Value Drivers
SHAREHOLDER VALUE DRIVERS 1 STRONG HAWAII MARKET & 12 ATTRACTIVE MARKET POSITION NICHE GROWTH OPPORTUNITIES 3 SUPPORTED WITH 2 STRONG EFFICIENCY PRODUCTS IMPROVEMENT OPPORTUNITY 4 SOLID CAPITAL AND CREDIT 19
Slide 20: Thank You
A. CATHERINE NGO President & Chief Executive Officer DAVIDTHANK S. MORIMOTO YOU Executive Vice President & Chief Financial Officer AUGUST 2018 20
Slide 21: Appendix
A. CATHERINE NGO President & Chief Executive Officer DAVIDAPPENDIX S. MORIMOTO Executive Vice President & Chief Financial Officer AUGUST 2018 21
Slide 22: Financial Highlights
FINANCIAL HIGHLIGHTS YEAR ENDED DECEMBER 31, ($ in millions) 2018 2017 2016 2015 2014 Balance Sheet (period end data) Loans and leases $4,078.4 $3,770.6 $3,524.9 $3,211.5 $2,932.2 Total assets 5,807.0 5,623.7 5,384.2 5,131.3 4,853.0 Total deposits 4,946.5 4,956.4 4,608.2 4,433.4 4,110.3 Total shareh
Slide 23: Strong Loan Growth (2011-2018)
STRONG LOAN GROWTH (2011- 2018) Balances Outstanding 7 Yr. $4,500 CAGR $4,030 $4,078 $4,000 $3,771 $3,525 $3,500 $3,212 $3,042 $2,932 $3,000 +11.3% $2,631 $2,500 $2,204 $2,169 $2,064 Millions $2,000 +21.1% $1,500 +18.1% -11.8% $1,000 +5.8% $500 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20
Slide 24: Loan Portfolio Composition
LOAN PORTFOLIO COMPOSITION ($ IN MILLIONS) DECEMBER 31, 2018 DECEMBER 31, 2017 CHANGE BALANCE % BALANCE % $ % Hawaii Portfolio Residential Mo rtgage $1,428 35% $1,341 35% $87 6% Ho me Equity 469 11% 412 11% 57 14% Co mmercial Mo rtgage 861 21% 807 21% 54 7% Co mmercial & Ind/Leasing 439 11% 401 11%
Slide 25: Hawaii Deposit Pricing Advantage
HAWAII DEPOSIT PRICING ADVANTAGE Total Deposit Cost 2.50% 2.35% 2.00% 1.63% 1.59% 1.50% 1.09% 1.05% 1.00% 0.78% 0.64% 0.54% 0.52% 0.40% 0.36% 0.39% 0.50% 0.30% 0.34% 0.33% 0.23% 0.14% 0.11% 0.09% 0.09% 0.12% 0.00% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 CPF Peer Note: National peer gr
Slide 26: Creating Value for Our Employees & the Community
CREATING VALUE FOR OUR EMPLOYEES & THE COMMUNITY BEST PLACES TO WORK . Central Pacific Bank has been awarded as one of the “Best Places to Work” by Hawaii Business Magazine for the last 9 years in a row. . Average employee tenure for VP’s and above is 12 years. COMMUNITY FOCUS . CPB Foundation has g
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