Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (February 2024)
28 slides from Central Pacific Financial Corp New's investor presentation, Feb 27, 2024
Slide 1: Investor Presentation February-March 2024
Investor Presentation February-March 2024
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: Corporate Profile
3Central Pacific Financial Corp. celebrating legacy MARKET INFORMATION NYSE TICKER CPF SUBSIDIARY CPB TOTAL ASSETS $7.6 BILLION MARKET CAP $523 MILLION SHARE PRICE $19.37 DIVIDEND YIELD 5.4% Central Pacific Financial Corp. (CPF) is a Hawaii-based bank holding company. Central Pacific Bank (CPB) was
Slide 4: 4th Quarter 2023 Financial Highlights
4Central Pacific Financial Corp. 4th Quarter 2023 Financial Highlights • Growth in net income and PPNR QoQ • Solid liquidity position with sizable cash position, and modest loan and deposit portfolio decline • Strong capital and asset quality • Completed balance sheet repositioning to consolidate pr
Slide 5: 4Q Balance Sheet Repositioning Summary
5Central Pacific Financial Corp. 4Q Balance Sheet Repositioning Summary2 • Completed investment portfolio restructuring which is expected to add $0.7 million to annual pre-tax income • Sold available-for-sale debt securities with a book value of $30.0 million, weighted average yield of 3.3%, weighte
Slide 6: CPF Value Drivers
6Central Pacific Financial Corp. CPF Value Drivers Resilient Hawaii Economy Diversified Loan Portfolio Valuable Deposit Franchise Focus on Driving Efficiency Solid Credit & Capital Profile Digital Leader in Hawaii 1 2 3 4 5 6
Slide 7: Resilient Hawaii Economy
7Central Pacific Financial Corp. Tourism Visitor arrivals compared to pre-pandemic 90% 1 Employment Unemployment Rate December 2023 2.9% 1 FACTORS FOR A FAVORABLE HAWAII OUTLOOK • Maui tourism recovery from Maui wildfires in August 2023 faster than anticipated with visitor arrivals at 75% of the pre
Slide 8: Diversified Loan Portfolio
8Central Pacific Financial Corp. Conservative loan growth in the current environment Strong and diverse loan portfolio, with over 75% secured by real estate Diversified Loan Portfolio2 3.53 3.77 4.08 4.45 4.55 5.01 5.55 5.44 3.00 3.50 4.00 4.50 5.00 5.50 6.00 2016 2017 2018 2019 2020 2021 2022 2023
Slide 9: Driving Hawaii Homeownership Solutions
9Central Pacific Financial Corp. HAWAII RESIDENTIAL MARKET • Housing prices continue to be strong with median single-family home price of $1.0MM 1 • Affordability and lack of inventory present ongoing challenges CPB GO-TO HOUSING PARTNER • Every step from housing construction development to individu
Slide 10: Small Business Leader
10Central Pacific Financial Corp. Innovative & Proven Programs • Business Exceptional – Successful campaign provided a cash bonus for small businesses to open a checking account, which resulted in over $50MM in deposit growth and 85 new small business relationships • Non-Profit Plus – Ongoing progra
Slide 11: Valuable Deposit Franchise
11Central Pacific Financial Corp. • 58% of deposits FDIC insured; 65% including collateralized deposits • 56% Commercial / 44% Consumer • Long-tenured: 52% with CPB 10 years or longer • Average consumer account balance $19,000 • Average commercial account balance $109,000 • No brokered deposits Valu
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 2022 2023 Total Deposit Cost CPF Peer average* Fed Funds CPF Deposit Cost Advantage * Public banks $3-10 billion in total assets as of 3Q23
Slide 13: Japan Competitive Advantage
13Central Pacific Financial Corp. Leadership Connections Strategic Alliances Best Service Level Captive Insurance Deposits CPB Foundation with Mana Up Hawaii sponsored the first Aloha Market at Tokyo Haneda Airport in November 2023 showcasing 40 Hawai’i brands CPB and Tokyo Star Bank alliance announ
Slide 14: Focus on Driving Efficiency
14Central Pacific Financial Corp. Focus on Driving Efficiency4 27 branches down 8 (-23%) since 2020 Branch Consolidation 720 FTE down 79 (-10%) since 2020 FTE Initiatives 50+ processes being standardized and automated Process Automation $940K 2023 savings + additional in progress Vendor Contract Sav
Slide 15: Expense Management
15Central Pacific Financial Corp. Ongoing Initiatives: • Rightsizing salaries and benefits expense • Workflow and automation efficiencies • Vendor contract negotiations • Other efficiency initiatives in progress Expense Management 40.4 42.1 39.9 39.6 42.5 4Q22 1Q23 2Q23 3Q23 4Q23 Total Other Operati
Slide 16: Solid Credit & Capital Profile
16Central Pacific Financial Corp. 0.09% 0.10% 0.09% 0.12% 0.13% 0.20% 0.11% 4Q22 1Q23 2Q23 3Q23 4Q23 NPAs/Total Loans 0.06% 0.04% 0.04% 0.05% 0.07% 0.06% 0.12% 0.20% 0.23% 0.34%0.12% 0.16% 0.24% 0.28% 0.41% 4Q22 1Q23 2Q23 3Q23 4Q23 Annualized NCO/Avg Loans All Other NCO/Avg Loans Mainland Consumer N
Slide 17: Solid Capital Position
171Central Pacific Financial Corp. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Tier 1 Leverage CET1 Total Capital Regulatory Capital Ratios As of December 31, 2023 Regulatory Minimum Well-Capitalized CPF Solid Capital Position 8.8% $250MM capital cushion to well capitalized minimum 11.4% 14.6%
Slide 18: Digital Leader in Hawaii
181Central Pacific Financial Corp. ACH, 76%ATM, 4% Mobile, 5% Branch, 15% 85% Consumer deposits processed digitally 34,771 49,778 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Retail Mobile Users 1 Digital Leader in Hawaii6 1 E
Slide 19: Appendix
19Central Pacific Financial Corp. Appendix
Slide 20: Historical Financial Highlights
20Central Pacific Financial Corp. (*) 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. Note: Totals may not sum due to rounding. Historical Financial Highlights (
Slide 21: Commercial Real Estate Portfolio
21Central Pacific Financial Corp. Commercial Real Estate Portfolio OFFICE RETAIL TOTAL BALANCE $187.7MM $259.6MM % OF TOTAL CRE 14% 19% % OF TOTAL LOANS 4% 5% WA LTV 56% 64% WA MONTHS TO MATURITY 71 61 INVESTOR / OWNER-OCCUPIED $142.0MM / $45.7MM $210.6MM / $49.0MM Diverse CRE portfolio, primarily H
Slide 22: Consumer Loan Portfolio
22Central Pacific Financial Corp. • Total Hawaii Consumer $322MM / Total Mainland Consumer $308MM • Weighted average origination FICO: • 743 for Hawaii Consumer • 738 for Mainland Consumer • YTD NCO %: • HI Auto 0.3% • HI Other 0.9% • Mainland Auto 1.1% • Mainland Home Improvement 3.3% • Mainland Un
Slide 23: Lahaina, Maui Loan Exposure
23Central Pacific Financial Corp. Lahaina, Maui Loan Exposure Exposure is manageable and with mitigating factors, losses are not anticipated to be material CRE $49MM, 47% Residential $29MM, 28% HELOC $7MM, 7% C&I $14MM, 14% Consumer $4MM, 4% Lahaina, Maui Exposure Composition as of December 31, 2023
Slide 24: Allowance for Credit Losses
24Central Pacific Financial Corp. • $5.0MM provision for credit loss on loans in 4Q23 driven by net charge-offs, offset by a credit of $0.3MM to the reserve for unfunded commitments, for a total provision for credit loss of $4.7MM • ACL coverage ratio increased to 1.18% for 4Q23 Note: Totals may not
Slide 25: High Quality Securities Portfolio
25Central Pacific Financial Corp. High Quality Securities Portfolio • $1.3B or 17% of total assets • 92% AAA rated • Portfolio mix: AFS 51% / HTM 49% • Portfolio unrealized loss: HTM $67.2MM (down $41.0MM QoQ)/ AFS $107.7MM (down $39.4MM QoQ) • Total portfolio unrealized loss $174.9MM (down $80.4MM
Slide 26: Available Sources of Liquidity
26Central Pacific Financial Corp. • Ample alternative sources of liquidity available • Available sources of liquidity total 125% of uninsured/uncollateralized deposits Available Sources of Liquidity * BTFP eligible securities at par, other unpledged securities at market value. $ Millions December 31
Slide 27: Newsweek America's Best Regional Banks 2024
27Central Pacific Financial Corp. Central Pacific Bank recognized in Newsweek’s America’s Best Regional Banks for 2024 • Recognized for exceptional customer service, digital banking tools, and financial resources available to the community • Based on our creditworthiness, profitability, net loan act
Slide 28: Mahalo
Central Pacific Financial Corp. 28 Mahalo
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