Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (June 2015)
28 slides from Central Pacific Financial Corp New's investor presentation, Jun 8, 2015
Slide 1: Central Pacific Financial Corp June 2015
CENTRAL PACIFIC FINANCIAL CORP LANCE A. MIZUMOTO President & Chief Banking Officer A. CATHERINE NGO President & Chief Operating Officer DAVID S. MORIMOTO Senior Vice President & Treasurer June 2015
Slide 2: Forward-Looking Statements
a nn no OEE OEE 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 o
Slide 3: Recent Executive Appointments
TT TT ATT TEEPE AAA Recent Executive Appointments Internal leadership succession ensures a smooth transition and consistency of strategy, core values and culture John C. Dean Chairman & Chief Executive Officer Executive Chairman of the Board A.Catherine Ngo _ President & Chief Operating Officer Pres
Slide 4: Corporate Profile
RR RRA ERT ARORA RELA AAMAS NAA AAO Corporate Profile Founded in 1954 by Japanese-American veterans of World War II = Fourth largest financial institution in Hawaii " Total assets of $5.0 billion = Deposit market share of 1% = 2011: $345 million recapitalization, including rights offering = Profitab
Slide 5: Strong Hawaii Market
Strong Hawaii Market Relationship Banking Growth Opportunities Asset Quality Improvements Technology & Efficiency Enhancements Capital Optimization
Slide 6: Hawaii at a Glance
iON TEL le DENN NE TOM Ms AE Hawaii at a Glance = Population of 1.4 million (2014) = Eight major islands - Oahu is home to 70% of the state’s total population = Real GDP (2014) $72.0 billion, +2.1% from 2013. Preliminary estimates indicate a 2.5% increase in 2015 = Unemployment rate (2014) 4.4% is 7
Slide 7: Diversity of Tourism
Diversity of Tourism Visitor Arrivals in 2014 by Air China Korea Other Australia _ 2.0% 21% 62% 3.8% Canada 6.4% US West 39-9% Japan 18.5%
Slide 8: Consistently Lower Unemployment Rates
etcetera Consistently Lower Unemployment Rates 0% 409 3" 2" 0 09 ogo oe Source: Department of Labor, Bureau of Labor Statistics. Note: Data is as April 2015.
Slide 9: Strong Real Estate Market
rence nee Strong Real Estate Market Existing Single Family Home Median Sales Price $800.0 Oahu $675.0 Thousands £ ° 9 ° 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 —Oahu —U.S. Source: Honolulu Board of Realtors (April 2015), National Association of Realtors (March 2015, released quar
Slide 10: Continued Growth and Development
enemies Continued Growth and Development 1. Residential High-Rise Condominium Development in Honolulu = Proposed master plan includes 22 new high-rise towers in Honolulu = Seven developments with approximately 2,400 units have completed successful sales and begun construction or have recently comple
Slide 11: Hawaii Banking Market
Hawaii Banking Market Total Deposits Market Type Ownership Branches _(millions) Share 1 First Hawaiian Bank Bank Private - BNP 62 $15,175 38.1% | 2 Bank of Hawaii Bank Public B 13,032 32.8% 3 American Savings Bank Savings Bank Private - HEI 56 4,790 12.0% 4 Central Pacific Bank Bank Public 36 4189 1
Slide 12: CPB Branch Positioning
CPB Branch Positioning é @ Oahu (28) > Maui (4) et (s millions) March 31, 2015 Total Assets $4,966 Hawaii (2) Total Loans $2,968 Total Deposits $4,189 Total Branches 36 FINANCIAL CORP
Slide 13: Relationship Banking Growth Opportunities
Relationship Banking Growth Opportunities Central Pacific HomeLoans TOW, ommercia & Sty. eau Business Banking Vannc International Banking Utilizing data warehouse and customer relationship management system to provide a single view of customer and increase cross sales and improve retention by antici
Slide 14: Strong Loan Growth
$4,500 $4,030 $4,000 J $3,500 $3,000 = g § $2,500 $- 2008 = Comml Mtg Strong Loan Growth Balances Outstanding Year over year growth of $271 million, or 10.05%. 3-Year CAGR of 12.53%. $3,042 $2,932 $2,968 | | $2,631 ] = $2,169 $2,064 $2;204 — | | 2009 2010 2ou 2012 2013 2014 Qu 2015 = Construct/Dev C
Slide 15: Core Franchise
Core Franchise $4.2 Billion in Deposits as of 3/31/2015, with total core deposits at 79% Government CDs Noninterest- CDs > $100M 16% Bearing DDA 5% 25% CDs < $100M 5%
Slide 16: Total Deposit Cost Advantage
nearer enti Total Deposit Cost Advantage 1.63% 0.50% 0.64% 0.30% 0.00% 0.14% 2008 2009 2010 2011 2012 2013 2014 Qi 2015 —*-CPF Peer Note: National peer group is comprised of publicly traded U.S. banks with total assets between $3 and $5 billion. Source: SNL Financial CENTRAL PACIFIC FINANCIAL CORP
Slide 17: Significantly Reduced NPAs
Millions Significantly Reduced NPAs $500 $500 $400 $303 $300 $195 $200 $122 0.82% of $go Total Assets $100 fi $47 $42 $41 ‘ | et 2008 2009 2010 2011 2012 2013 2014 Qi 2015 =aC&D mCommiMtg mResMtg mC&I/Other NTRAL PACIFIC FINANCIAL CORP
Slide 18: Strong Reserve Coverage
ern Strong Reserve Coverage ALLL/Total Loans 10.00% = 9.00% oe 8.00% 6.75% 7.00% 6.00% ca 5.00% 4.00% . 9 3.00% - 937 97% 82% 2.00% 1.00% 0.00% 9 > oa # mCPF © Peer Note: National peer group is comprised of publicly traded USS. banks with total assets between $3 and $5 billion. Source: SNL Financial
Slide 19: Technology & Efficiency Enhancements
2014/ 2015 Completed 2015/ 2016 Underway Technology & Efficiency Enhancements = 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 co
Slide 20: Targeting Improved Efficiency Ratio
nents Targeting Improved Efficiency Ratio 200% Q4 2015 Target Efficiency Ratio: Mid/High 60s 150% 100% 50% 0% | 1 r r r r 1 2008 2009 2010 2011 2012 2013 2014 Qi2015 Normalize balance sheet composition and net interest income over time Improve efficiencies by leveraging data warehouse and branch aut
Slide 21: Capital Optimization
annette Capital Optimization = Reinstated quarterly cash dividend of $0.08 per share in 3Q2013; Increased cash dividend by 25% and 20% in 3Q2014 and 1Q2015, respectively = Aggregate cash dividends of $24M paid since 3Q2013 = Share repurchase activity to optimize the capital structure = Repurchased $
Slide 22: Strong Hawaii Market
Strong Hawaii Market Relationship Banking Growth Opportunities Asset Quality Improvements Technology & Efficiency Enhancements Capital Optimization
Slide 23: Appendix
APPENDIX A. CENTRAL PACIFIC INANCIAL CORP
Slide 24: Financial Highlights
annette Financial Highlights (s in millions) Year Ended December 31, 2013, 2012 Balance Sheet (period end data) Loans and leases $2,967.8 $2,932.2 $2,630.6 —_$2,203.9 $2,064.4 $260.4 Total assets 4965-9 4,853.0 4741-2 4370-4 432.9 3,938.1 Total deposits 4188.6 4,103 3,936.2 3,680.8 34435 3032.9 Tota
Slide 25: Loan and Credit Composition
enn ntact Loan and Credit Composition ($ in Millions) / 33/2 /33/ Change Hawaii Portfolio Residential Mortgage $1,301 44% s1180 40% $121 10% Commercial Mortgage 586 20% 554. 19% 32 6% Commercial & Ind/Leasing 318 1% 2p 9% 46 1% Construction 109 4% 83 3% 26 31% Consumer & Other 252 8% 23 8% 45 6% Tot
Slide 26: Nonperforming Portfolio Marked to Market
AEN WTO ELA NS ALLEN NEL IEA Ml abe Nonperforming Portfolio Marked to Market Net Los: Total UPB Current Balance Net Effective ota in Millions) Balance [1] __to Date Reserves __ of Reserv Mark Hawai Residential Mortgage 314.8 sig $16.7 $0.0 $14.8 89% Commercial Mortgage 10.9 3A 14.0 0.0 10.9 78% C&d/
Slide 27: Net Interest Margin Relatively Stable in 1Q15
cranes Net Interest Margin Relatively Stable in 1Q15 Net Interest Margin 4.50% 40% 4.00% 360% = 1Q 2015 NIM declined 4 $4 ak 39% ~~? bps vs. 4Q14 as result of: 3.00' 2.50% = Lower yields on 2.00% interest earning ut assets 0.50% = Expect NIM to be in the 0.00% 3.20 to 3.30% range over the next coupl
Slide 28: CPF Peer Comparison
rennin CPF Peer Comparison National PG Central Pacific Financial Corp. Median Total Assets (smm) 4,966 4106 TCE/TA (%) 1437 10.05 Total RBC Ratio (%) 18.54 15.12 ROAA (%) 0.85 1.00 ROATCE (%) 75 10.7 Net Interest Margin (%) 3.28 3.55 Efficiency Ratio (%) RI 62.1 ALLL/Gross Loans (%) 2.41 119 NPAs'/T
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