Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (December 2017)
26 slides from Central Pacific Financial Corp New's investor presentation, Dec 13, 2017
Slide 1: Central Pacific Financial Corp. December 2017
A. CATHERINE NGO President & Chief Executive Officer DAVID S. MORIMOTO Executive Vice President & Chief Financial Officer December 2017
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 ~ 222% from recapitalization
Slide 4: Shareholder Value Drivers
Shareholder Value Drivers 3 Strong Hawaii Market Relationship Banking Growth Opportunities Asset Quality Improvements Efficiency Enhancements Capital Optimization
Slide 5: Hawaii at a Glance
Population of 1.4 million (2016). Four major islands – Oahu is home to 70% of the state’s total population. Real State GDP (2016) $72.9 billion, +2.0% from 2015. Forecasts expect a 1.9% increase in 2017. State unemployment rate of 2.5% is below the national unemployment rate of 4.2% (Septemb
Slide 6: Diversity of Tourism – Visitor Arrivals
Diversity of Tourism – Visitor Arrivals 5 Source: Hawaii Tourism Authority 2016 Growth Regions Korea +27% US West +4% US East +4% US West 40.9% US East 20.9% Japan 16.6% Canada 5.4% Australia 4.5% China 1.9% Korea 2.7% Europe 1.6% Other 5.5% Visitor Arrivals 2016
Slide 7: Strong Real Estate Market
6 Source: Honolulu Board of Realtors & National Association of Realtors. Data as of September 2017. Strong Real Estate Market $757.0 $254.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3Q17 T h ous an d s Existing Single Family Home M
Slide 8: Continued Growth and Development
Continued Growth and Development 7 1. Residential High-Rise Condominium Development in Honolulu Proposed master plan includes 22 new high-rise towers in Honolulu. Thirteen developments have completed successful sales and begun construction or have completed construction over the past few years.
Slide 9: Continued Growth and Development
Continued Growth and Development 8
Slide 10: Hawaii Banking Market
Hawaii Banking Market Note: Deposit data as of September 30, 2017. 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 Public - BNP 62 $17,605 38.1% 2 Ban
Slide 11: CPB Branch Positioning
Kauai (2) Oahu (27) Maui (4) Hawaii (2) CPB Branch Positioning ($ millions) September 30, 2017 10 Total Assets $5,569 Total Loans $3,636 Total Deposits $4,927 Total Branches 35
Slide 12: Relationship Banking Growth Opportunities
Relationship Banking Growth Opportunities 11 Launched a company-wide customer experience initiative. Targeted small business market niches – CPB won the 2017 Overall SBA Lender of the Year Award. Initiated strategic business development agreements with Hokuyo Bank in 2015 and with the TSUBASA
Slide 13: Strong Loan Growth
Strong Loan Growth 12 5.75 Year CAGR +11% +25% +19% -8% +5% $4,030 $3,042 $2,169 $2,064 $2,204 $2,631 $2,932 $3,212 $3,525 $3,546 $3,592 $3,636 $0 $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 2016 1Q17 2Q17 3Q17 Balances Outstanding Comml Mtg C
Slide 14: Core Deposit Franchise
Core Deposit Franchise 13 $4.9 billion in deposits as of September 30, 2017, with total core deposits at 80% Noninterest- Bearing DDA 28% Interest-Bearing DDA 19% Savings & Money Mkt 30% CDs < $100M 4% CDs > $100M 5% 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 $7 billion (84 banks). Source: SNL Financial 1.63% 1.09% 0.64% 0.30% 0.14% 0.11% 0.09% 0.09% 0.12% 0.18% 0.21% 0.25% 2.35% 1.59% 1.05% 0.78% 0.54% 0.40% 0.34% 0.33% 0
Slide 16: Significantly Reduced NPAs
Significantly Reduced NPAs 15 0.11% of Total Assets $144 $500 $303 $196 $90 $47 $42 $16 $9 $9 $9 $6 $- $100 $200 $300 $400 $500 $600 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q17 2Q17 3Q17 Million s C&D Comml Mtg Res Mtg C&I/Other
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 $7 billion (84 banks). Source: SNL Financial 2.97% 6.75% 8.89% 5.91% 4.37% 3.19% 2.53% 1.97% 1.61% 1.56% 1.47% 1.41% 1.48% 2.00% 2.08% 1.97% 1.69% 1.48% 1.23% 1.11% 0.98%
Slide 18: Targeting Improved Efficiency Ratio
Targeting Improved Efficiency Ratio 17 Normalize balance sheet composition and net interest income over time. Improve efficiencies by leveraging data warehouse and branch automation functionalities. Enhance customer profitability with predictive analytics. Implement commercial loan originati
Slide 19: Capital Optimization
Capital Optimization 18 Reinstated quarterly cash dividend of $0.08 per share in 3Q2013. Increased cash dividend by 25% in 3Q2014, 20% in 1Q2015, 17% in 4Q2015, 14% in 3Q2016 and 13% in 2Q2017. Aggregate cash dividends of $81 million returned to our shareholders since 3Q2013. Share repurchas
Slide 20: Shareholder Value Drivers
Shareholder Value Drivers 19 Strong Hawaii Market Relationship Banking Growth Opportunities Asset Quality Improvements Efficiency Enhancements Capital Optimization
Slide 21: Appendix
APPENDIX RA! XW FINANCIAL CORP
Slide 22: Relative Value Comparison
Relative Value Comparison 21 Note: National peer group is comprised of publicly traded U.S. banks with total assets between $3 and $7 billion (84 banks). Source: SNL Financial National Peer CPF Average ROAA 0.90% 0.96% ROATCE 9.26% 10.73% Net Interest Margin 3.27% 3.46% Efficiency Ratio 64.02% 59.87
Slide 23: Financial Highlights
Financial Highlights 22 ($ in millions) QTD QTD QTD 3Q17 2Q17 1Q17 2016 2015 2014 2013 2012 2011 Balance Sheet (period end data) Loans and leases $3,636.4 $3,591.7 $3,545.7 $3,524.9 $3,211.5 $2,932.2 $2,630.6 $2,203.9 $2,064.4 Total assets 5,569.2 5,553.1 5,443.2 5,384.2 5,131.3 4,853.0 4,741.2 4,37
Slide 24: Loan and Credit Composition
Loan and Credit Composition 23 ($ in Millions) Balance % Balance % $ % Hawaii Portfolio Residential Mortgage $1,267 35% $1,161 33% $106 9% Home Equity 397 11% 351 10% 46 13% Commercial Mortgage 801 22% 743 22% 58 8% Commercial & Ind/Leasing 399 11% 368 11% 31 8% Construction 95 3% 105 3% -10 -10% Au
Slide 25: Stable Net Interest Margin
Stable Net Interest Margin 24 NIM has been stable around 3.30% for the last 3 years. Expect NIM to be in the 3.20 t0 3.30% 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 yield
Slide 26: Glossary of terms and definitions
ALLL – Allowance for loan and lease losses, a calculated reserve established to cover estimated incurred credit losses. CAGR – Compound annual growth rate, an annualized growth rate over multiple time periods. Common Equity Tier 1 Capital – A regulatory definition of risk based capital measured by d
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