Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (June 2020)
35 slides from Central Pacific Financial Corp New's investor presentation, Jun 9, 2020
Slide 1: Central Pacific Financial Corp. Investor Presentation June 2020
PAUL YONAMINE A. CATHERINEChief Executive Officer NGO President & Chief Executive Officer CATHERINE NGO DAVIDPresident S. MORIMOTO Executive Vice President & Chief FinancialDAVID Officer MORIMOTO Chief Financial Officer AUGUST 2018 ANNA HU Chief Credit Officer JUNE 2020
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This document may contain forward-looking statements concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the payment or nonpayment of dividends, capital position, net interest margin or other financial items; sta
Slide 3: COVID-19 Support
COVID-19 SUPPORT EMPLOYEES CUSTOMERS COMMUNITY • Work from home with • Loan payment • CPB Foundation is 70% of all employees deferrals and supporting the setup on VPN mortgage community with forbearance successful initiatives • Temporarily closed including: smaller footprint • ~6,800 PPP loans branc
Slide 4: Experienced & Prepared Leadership
EXPERIENCED & PREPARED LEADERSHIP Paul Yonamine Catherine Ngo Chairman & CEO President • Over 40 years of executive • Over 27 years of banking management experience experience • As President of IBM Japan, led the • Joined CPF/CPB in 2010 and Company through the 2011 helped lead the Company through T
Slide 5: Creating Value Beyond Banking
Paul Yonamine, CREATING VALUE BEYOND BANKING CEO, advocating to the HI State Senate for a “Travel Safety Bubble” with Japan 5
Slide 6: First Quarter 2020 Highlights
FIRST QUARTER 2020 HIGHLIGHTS • Quarterly results impacted by Net Income $8 Million new CECL accounting standard and declining economic conditions Diluted EPS $0.29 • Pre-tax, Pre-provision earnings remained strong Pre-Tax, $21 Million Pre-Provision • Solid liquidity and capital; Earnings balance sh
Slide 7: Shareholder Value Drivers
SHAREHOLDER VALUE DRIVERS 1 RISE2020 STRENGTH IN HAWAII SOLID CAPITAL, INVESTING TARGET NICHE MARKET & LIQUIDITY AND FOR THE MARKETS & KEY POSITION CREDIT FUTURE PRODUCT OFFERINGS 7
Slide 8: RISE2020 Initiatives
• Best-in-class online and • Best-in-class small mobile banking business and cash platforms 1 management products DIGITAL • cpb.bank website REVENUE • Japan business BANKING ENHANCEMENTS development • Digital marketing, data 2 analytics and mining • Enterprise-wide sales management tools • Co-workin
Slide 9: COVID-19 Impact on Customer Behavior
COVID-19 IMPACT ON CUSTOMER BEHAVIOR . COVID-19 accelerated the migration to digital banking COVID-19 Impact 1/3 . Strong momentum and ideal timing branches closed for the RISE2020 digital banking strategy new product launch in Summer 2020 9
Slide 10: Shareholder Value Drivers
SHAREHOLDER VALUE DRIVERS 1 RISE2020 STRENGTH IN HAWAII SOLID CAPITAL, INVESTING TARGET NICHE MARKET & LIQUIDITY AND FOR THE MARKETS & KEY POSITION CREDIT FUTURE PRODUCT OFFERINGS 10
Slide 11: Target Niche Market Opportunities
TARGET NICHE MARKET OPPORTUNITIES . SBA Lender of the Year Category II, 7 years SMALL in a row, with more loans originated than the BUSINESSES 3 other large Hawaii banks combined CPB leads the Hawaii . Relationships with physician and dental Small Business market organizations and schools have been
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 0.06% Free checks
Slide 14: Shareholder Value Drivers
SHAREHOLDER VALUE DRIVERS 1 RISE2020 STRENGTH IN HAWAII SOLID CAPITAL, INVESTING TARGET NICHE MARKET & LIQUIDITY AND FOR THE MARKETS & KEY CPF POSITION CREDIT FUTURE PRODUCT OFFERINGS 14
Slide 15: Resilient Hawaii Market
RESILIENT HAWAII MARKET $789K STRENGTHS AND RECOVERY FACTORS • 2nd lowest COVID-19 infection rate in • While tourism drives ~20% of GDP, the US with only 644 confirmed government/defense and real estate makes cases*; a safe place to travel up another ~40% of GDP • Restarting tourism in summer with •
Slide 16: Attractive Position in Hawaii Market
ATTRACTIVE POSITION IN HAWAII MARKET LARGE SMALL INSTITUTIONS INSTITUTIONS . First Hawaiian Bank . Territorial Savings . $21B total assets . $2B total assets . . 58 branches $6.1B total assets . 30 branches . 35 branches . Bank of Hawaii . Hawaii National Bank . $19B total assets . $0.7B total asset
Slide 17: Shareholder Value Drivers
SHAREHOLDER VALUE DRIVERS 1 RISE2020 STRENGTH IN HAWAII SOLID CAPITAL, INVESTING TARGET NICHE MARKET & LIQUIDITY AND FOR THE MARKETS & KEY POSITION CREDIT FUTURE PRODUCT OFFERINGS 17
Slide 18: Solid Capital & Liquidity Position
SOLID CAPITAL & LIQUIDITY POSITION Regulatory Capital Ratios As of March 31, 2020 STRONG CAPITAL . $150 million capital cushion to the 16.0% 13.4% Total well-capitalized Total RBC minimum of 14.0% RBC 10% at 3/31/20 Tier 2 1.1% 12.0% 1.0% . 1Q2020 PTPP earnings of $21 million Tier 1 10.0% . 8.0% Est
Slide 19: Strong Credit Metrics
STRONG CREDIT METRICS Allowance for Credit Losses Delinquencies (ACL) Past Due 90+ Days $65 1.90% CECL 0.50% $5 $60 1.70% $55 0.40% $4 Incurred Loss Method 1.50% $50 0.30% $3 1.30% $45 $40 1.10% 0.20% $2 $35 0.90% $30 0.10% $1 0.70% $25 0.00% $0 0.50% $20 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19
Slide 20: Shareholder Value Drivers
SHAREHOLDER VALUE DRIVERS 1 RISE2020 STRENGTH IN HAWAII SOLID CAPITAL, INVESTING TARGET NICHE MARKET & LIQUIDITY AND FOR THE MARKETS & KEY POSITION CREDIT FUTURE PRODUCT OFFERINGS 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: Total Loan Portfolio
TOTAL LOAN PORTFOLIO Total Loan Portfolio of $4,512MM Outstanding Balance as of 3/31/20 Loan Portfolio Highlights $ in Millions • Diversified Loan Portfolio Commercial & – 40% Commercial Consumer Industrial – 60% Consumer $560 / 13% $575 / 13% Construction • Predominantly Hawaii $101 / 2% CRE - Inve
Slide 23: Commercial & Industrial - Industry Composition
COMMERCIAL & INDUSTRIAL – INDUSTRY COMPOSITION Healthcare Loan Portfolio Details $107 / 19% • Strong borrowers; many are Other essential businesses Industries • Well established, locally $173 / 30% owned and operated by strong management • Borrowers have access to $575MM Retail Trade capital with go
Slide 24: Commercial Real Estate - Property Type Composition
COMMERCIAL REAL ESTATE – PROPERTY TYPE COMPOSITION Other $27 / 11% Loan Portfolio Details • Strong borrowers that operate out of their own Retail properties $25 / 11% • Well-collateralized with WA LTV of 64% Industrial • 93% secured in Hawaii and $116 / 49% 7% in Mainland Owner Occupied − HI WA LTV
Slide 25: Commercial Real Estate - Property Type Composition
COMMERCIAL REAL ESTATE – PROPERTY TYPE COMPOSITION Self Storage Other $25 / 3% $23 / 2% Loan Portfolio Details Hotel $59 / 7% • Seasoned real estate investors • Well-collateralized with WA Multi-Family $305 / 34% LTV of 55% • 77% secured in Hawaii and 23% in Mainland/Guam − HI WA LTV 57% Retail Inve
Slide 26: High Risk Industries
HIGH RISK INDUSTRIES As of March 31, 2020 $ Millions Outstanding % of total Criticized as a % Balance loans of total loans C&I CRE Healthcare $ 122 2.7% 0.1% $ 107 $ 15 Retail Trade $ 90 2.0% 0.3% $ 67 $ 23 Manufacturing $ 71 1.6% 0.4% $ 48 $ 23 Food Service $ 61 1.3% 0.3% $ 47 $ 14 Accommodation $
Slide 27: Residential Mortgage
RESIDENTIAL MORTGAGE Investor & Second Home $318 / 20% Loan Portfolio Details • 100% in Hawaii; 89% on Oahu • 84% of loan balance are loans <$1.0MM • Average outstanding loan amount of $434,000 $1,632MM • WA LTV 60% 36% • WA FICO 779 Owner Occupied $1,314 / 80% 27
Slide 28: Home Equity
HOME EQUITY Investor & Second Home $64 / 13% Loan Portfolio Details • 100% in Hawaii; 85% on Oahu • 54% of loan balance are lines/loans <$250,000 • Average outstanding loan amount of $90,000 52% are 1st mortgages $505MM • • 23% are 2nd mortgages 11% behind CPB 1st mortgage • WA CLTV 58% • WA FICO 78
Slide 29: Consumer
CONSUMER As of March 31, 2020 Loan Portfolio Details $ Millions Outstanding % of total • Hawaii Consumer Balance loans − WA FICO 737 Auto (Hawaii) $ 218 5% Auto (Mainland) 71 2% • Mainland Consumer Total Auto 289 7% − WA FICO 758 Private Banking (Hawaii) 54 1% • Total undrawn commitments Other Consu
Slide 30: COVID-19 Loan Deferrals & Forbearance
COVID-19 LOAN DEFERRALS & FORBEARANCE Central Pacific has implemented borrower relief programs to provide assistance to our customers. COML RE AND C&I RESIDENTIAL MORTGAGE • Principal or Principal & Interest • Principal & Interest payment deferrals for 3-6 months are forbearance provided for 3 month
Slide 31: Corporate Profile
CORPORATE PROFILE Founded in 1954 by Japanese-American veterans of World War II MARKET INFORMATION NYSE TICKER CPF Over 65 years later, Central Pacific continues Assets $6.1B to work for our customers, shareholders, employees and the community. Market Cap $490 Mil Share Price $17.40 Dividend Yield 5
Slide 32: Financial Highlights
FINANCIAL HIGHLIGHTS QTD YEAR ENDED DECEMBER 31, ($ in millions) 1Q20 2019 2018 2017 2016 2015 Balance Sheet (period end data) Loans and leases $4,512.0 $4,449.5 $4,078.4 $3,770.6 $3,524.9 $3,211.5 Total assets 6,108.5 6,012.7 5,807.0 5,623.7 5,384.2 5,131.3 Total deposits 5,136.1 5,120.0 4,946.5 4,
Slide 33: Loan Portfolio Trend
LOAN PORTFOLIO TREND (2011- Balances Outstanding 1Q 2020) $5,000 8.25 Yr. $4,449$4,512 CAGR $4,500 $4,078 $4,000 $3,771 $3,525 $3,500 $3,212 +11.1% $3,042 $2,932 $3,000 $2,631 $2,500 $2,169 $2,204 $2,064 +19.7% Millions $2,000 $1,500 +15.0% -5.5% $1,000 +6.1% $500 $0 2009 2010 2011 2012 2013 2014 20
Slide 34: Hawaii Deposit Pricing Advantage
HAWAII DEPOSIT PRICING ADVANTAGE Total Deposit Cost 2.50% 2.35% 2.00% 1.63% 1.59% 1.50% 1.05% 0.89% 0.94% 1.00% 0.78% 0.81% 1.09% 0.54% 0.52% 0.48% 0.40% 0.36% 0.39% 0.36% 0.50% 0.30% 0.34% 0.33% 0.64% 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 2
Slide 35: Non-GAAP Financial Measures - Pre-Tax, Pre-Provision Earnings
Non-GAAP Financial Measures- Pre-Tax, Pre-Provision Earnings Three-Months Ended $ Millions % Change Mar. 31, Dec. 31, Mar. 31, 2020 2019 2019 QoQ YoY Net Interest Income $ 47.8 $ 47.9 $ 45.1 0% 6% Other Operating Income 8.9 9.8 11.7 -9% -24% Total Revenue 56.7 57.7 56.8 -2% 0% Other Operating Expens
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