Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (September 2018)
26 slides from Central Pacific Financial Corp New's investor presentation, Sep 4, 2018
Slide 1: A. CATHERINE NGO PresidentA. CATHERINE & Chief Executive NGOOfficer President & Chief Executive Officer
A. CATHERINE NGO PresidentA. CATHERINE & Chief Executive NGOOfficer President & Chief Executive Officer DAVID S. MORIMOTO ExecutiveDAVID Vice S. President MORIMOTO & ExecutiveChief Financial Vice PresidentOfficer & Chief Financial Officer AUGUST 2018 SEPTEMBER 2018
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 Over 60 years later, Central Pacific continues MARKET to work for our customers, shareholders, INFORMATION employees and the community. NYSE CPF Assets $5.7B Market Cap $841 Mil Share Price $28.66 Divd Yld 2.93% CAGR 15%
Slide 4: CPF Branch Positioning
CPF 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 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 $75.3B in 2017 $782,000 Tourism drives 2.1% up 1.7% from Median single 20% of Hawaii Unemployment 2016 family home price GDP; 9.4M visitor the lowest in on Oahu arrivals and the nation $16.8B in visitor spending Note: Real GDP and Ec
Slide 7: Diversity of Tourism – Visitor Arrivals
DIVERSITY OF TOURISM – VISITOR ARRIVALS Visitor Arrivals Europe 1.2% 2018 Korea Other China 2.5% 1.7% 4.3% Australia / New Zealand 3.9% US West Canada 42.0% 6.2% Japan 15.2% 2018 GROWTH REGIONS US West +11% US East Australia/New Zealand +9% 23.0% Korea +9% US East +8% Europe +6% Canada +6% Source: H
Slide 8: Significant Residential Development
SIGNIFICANT 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 Centra
Slide 9: Significant Public & Commercial Development
SIGNIFICANT 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 Source
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 Business banking and branch collaboration together with streamlined credit BUSINESSES underwriting, documentation and booking processes . Relationships with physician and dental organizations and schools have been successful in growing market share . SBA Le
Slide 12: Small Business Online Banking Product
SMALL BUSINESS ONLINE BANKING PRODUCT . Valuable tool for small businesses to automate banking transactions and processing . 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 $1.3 Billion ATM fees waived Wtd Avg Rate 0.08% Free checks
Slide 14: Deposit Pricing Sensitivity
DEPOSIT PRICING SENSITIVITY CYCLE TO DATE YEAR OVER YEAR 4Q15 2Q18 Beta 2Q17 2Q18 Beta Fed Funds 0.25% 2.00% 1.75% 1.25% 2.00% 0.75% Total Deposit Rates 0.09% 0.37% 0.28% 16% 0.21% 0.37% 0.16% 21% Core Rates ($4.0B) 0.06% 0.09% 0.03% 1% 0.06% 0.09% 0.03% 3% Non-Core Rates ($1.0B) 0.2
Slide 15: Efficiency Ratio Improvement with Further Opportunity
EFFICIENCY RATIO IMPROVEMENT WITH FURTHER OPPORTUNITY Efficiency Ratio 120% 100% YTD 2Q18 Efficiency Ratio: 64.9% 80% 60% 40% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD 2Q18 EFFICIENCY INITIATIVES . Reallocate assets from the investment securities portfolio to the loan portfolio. . Levera
Slide 16: Strong Capital Position & Continued Optimization
STRONG CAPITAL POSITION & CONTINUED OPTIMIZATION Regulatory Capital Ratios CASH DIVIDENDS As of June 30, 2018 18.0% . $0.21 per share in 3Q18, up 17% YoY 15.7% Total . Dividend yield of 2.93% 16.0% RBC 1.3% . Dividend payout ratio of 44% in 2Q18 14.0% . Aggregate dividends paid of $98.1 2.2% million
Slide 17: Solid Credit Position
SOLID CREDIT POSITION $600 Total Nonperforming Assets $500 $500 $400 $303 Millions $300 $196 $200 $144 0.06% of Total Assets at 6/30/18 $90 $100 $47 $42 $16 $9 $4 $4 $- 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2Q18 C&D Comml Mtg Resi Mtg/Home Equity C&I/Other 17
Slide 18: Strong Reserve Coverage
STRONG RESERVE COVERAGE ALLL/Total Loans 10.00% 8.89% 9.00% 8.00% 7.00% 6.75% 5.91% 6.00% 5.00% 4.37% 4.00% 3.19% 2.97% 2.53% 3.00% 1.97% 1.61% 2.00% 2.08% 1.97% 1.33% 1.69% 2.00% 1.48% 1.48% 1.29% 1.24% 1.23% 1.11% 0.98% 0.94% 0.96% 0.94% 1.00% 0.00% 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 19: Shareholder Value Drivers
SHAREHOLDER VALUE DRIVERS 1 STRONG HAWAII MARKET & 12 ATTRACTIVE POSITION NICHE GROWTH OPPORTUNITIES 3 SUPPORTED WITH 2 STRONG EFFICIENCY PRODUCTS IMPROVEMENT OPPORTUNITY 4 SOLID CAPITAL AND CREDIT 19
Slide 20: Thank You
A. CATHERINE NGO President & Chief Executive Officer DAVIDTHANK S. MORIMOTO YOU Executive Vice President & Chief Financial Officer AUGUST 2018 20
Slide 21: Appendix
A. CATHERINE NGO President & Chief Executive Officer DAVIDAPPENDIX S. MORIMOTO Executive Vice President & Chief Financial Officer AUGUST 2018 21
Slide 22: Financial Highlights
FINANCIAL HIGHLIGHTS ($ in millions) QTD QTD Year ended December 31, 2Q18 1Q18 2017 2016 2015 2014 2013 Balance Sheet (period end data) Loans and leases $3,881.6 $3,816.1 $3,770.6 $3,524.9 $3,211.5 $2,932.2 $2,630.6 Total assets 5,681.5 5,651.3 5,623.7 5,384.2 5,131.3 4,853.0 4,741.2 Total deposits
Slide 23: Strong Loan Growth
STRONG LOAN GROWTH Balances Outstanding $4,500 6.5 Year $4,030 $3,881 CAGR $4,000 $3,771 $3,525 $3,500 $3,212 $3,042 $2,932 $3,000 +11.4% $2,631 $2,500 $2,169 $2,204 $2,064 $2,000 Millions +22.1% $1,500 +17.7% $1,000 -12.6% $500 +5.9% $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2Q18 Comml M
Slide 24: Loan Portfolio Composition
LOAN PORTFOLIO COMPOSITION ($ in Millions) June 30, 2018 June 30, 2017 Change Balance % Balance % $ % Hawai'i Portfolio Residential Mortgage $1,377 35% $1,250 34% $127 10% Home Equity 431 11% 395 11% 36 9% Commercial Mortgage 830 21% 768 21% 62 8% Commercial & Ind/Leasing 412 11% 395 11% 17 4% Const
Slide 25: Hawaii Deposit Pricing Advantage
HAWAII DEPOSIT PRICING ADVANTAGE 2.50% 2.35% Total Deposit Cost 2.00% 1.59% CPF Peer 1.50% 1.63% 1.05% 0.78% 1.00% 1.09% 0.57% 0.64% 0.54% 0.36% 0.52% 0.40% 0.34% 0.33% 0.50% 0.64% 0.37% 0.30% 0.32% 0.00% 0.23% 0.14% 0.11% 0.09% 0.09% 0.12% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q18 2Q18
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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