Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Q2 2020 Earnings Presentation
22 slides from Central Pacific Financial Corp New's earnings presentation, Jul 29, 2020
Slide 1: Second Quarter 2020 Earnings Supplement
A. CATHERINE NGO President & Chief Executive Officer SecondDAVID Quarter S. 2020 MORIMOTO EarningsExecutive Supplement Vice President & Chief Financial Officer AUGUST 2018 July 29, 2020 1
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, credit losses, net interest margin or other finan
Slide 3: SBA Paycheck Protection Program (PPP)
SBA PAYCHECK PROTECTION PROGRAM (PPP) Originated Over 7,200 loans Total funded Over $550 million Average loan size $0.1 million Total fee income $21 million • Significant funds deposited in CPB contributing to over $400MM growth in DDA balances in the second quarter of 2020 • New business relationsh
Slide 4: Total Loan Portfolio
TOTAL LOAN PORTFOLIO Total Loan Portfolio of $5,003MM Outstanding Balance as of 6/30/20 Loan Portfolio Highlights $ in Millions • Diversified Loan Portfolio Commercial & – 46% Commercial Consumer Industrial – 54% Consumer $527 / 11% $548 / 11% • Predominantly Hawaii PPP Focused CRE - Investor $526 /
Slide 5: Commercial & Industrial – Industry Composition
COMMERCIAL & INDUSTRIAL – INDUSTRY COMPOSITION Healthcare $95 / 17% Loan Portfolio Details • Strong borrowers; many are Other Industries essential businesses $154 / 28% • Well established, locally owned and operated by strong management Foodservice • Borrowers have access to capital $52 / 9% $548MM
Slide 6: Paycheck Protection Program [PPP] – Industry Composition
PAYCHECK PROTECTION PROGRAM [PPP] – INDUSTRY COMPOSITION Other industries Foodservice $73 / 14% $77 / 15% Loan Portfolio Details • Over 7,200 loans made Transportation & Warehousing • Granular with average $24 / 5% outstanding loan amount of $76,000 Manufacturing Healthcare • $389MM to existing cust
Slide 7: Commercial Real Estate – Property Type Composition (Owner Occupied)
COMMERCIAL REAL ESTATE – PROPERTY TYPE COMPOSITION Other $25 / 10% Loan Portfolio Details Restaurant • Strong borrowers that operate out $12 / 5% of their own properties • Well-collateralized with WA LTV of 66%1 Industrial $116 /50% • 77% secured in Hawaii and 23% in Mainland 1 Owner Occupied − HI W
Slide 8: Commercial Real Estate – Property Type Composition (Investor)
COMMERCIAL REAL ESTATE – PROPERTY TYPE COMPOSITION Self Storage $25 / 3% All Other Restaurant $23 / 3% Loan Portfolio Details $27 / 3% • Seasoned real estate investors Hotel $59 / 6% • Well-collateralized with WA LTV of Multi-Family 59%1 $303 / 34% • 94% secured in Hawaii and 6% in Mainland/Guam Com
Slide 9: High Risk Industries
HIGH RISK INDUSTRIES Criticized Outstanding % of as % of Balance Total Loans Total Loans $ Millions (Excl. PPP) (Excl. PPP) (Excl. PPP) C&I CRE PPP Healthcare $ 108 2.4% 0.1% $ 95 $ 13 $ 75 Retail Trade 71 1.6% 0.3% 49 22 32 Manufacturing 69 1.5% 0.3% 48 21 26 Foodservice 65 1.4% 0.2% 52 13 77 Accom
Slide 10: Residential Mortgage
RESIDENTIAL MORTGAGE Investor & Second Home $319 / 19% Loan Portfolio Details • 100% in Hawaii; 90% on Oahu • 83% of loan balance are loans <$1.0MM • Average outstanding loan amount of $436,000 $1,658MM • WA LTV 61%1 33% • WA FICO 773 1Based on LTV at origination. Owner Occupied $1,339 / 81% 10
Slide 11: Home Equity
HOME EQUITY Investor & Second Home $69 / 13% Loan Portfolio Details • 100% in Hawaii; 85% on Oahu • 52% of loan balance are lines/loans <$250 thousand • Average outstanding loan amount of $133,000 • 52% are 1st mortgages • 21% are 2nd mortgages behind $511MM CPB 1st mortgage 10% • WA CLTV 63%1 • WA
Slide 12: Consumer
CONSUMER Total Consumer Loan Portfolio Details • Total Consumer − HI WA FICO 737 Personal Auto $253 / 48% − ML WA FICO 7591 $274 / 52% • Auto $527MM − HI WA FICO 729 11% − ML WA FICO 7501 • Personal − HI WA FICO 755 − ML WA FICO 7641 • Total undrawn commitments of $111MM Auto Personal Private Mainla
Slide 13: Loan Payment Deferrals
LOAN PAYMENT DEFERRALS Construction $7 / 1% Loan Portfolio Details Commercial $568MM Deferrals Booked; & Industrial 13% of Total Loan Portfolio (excl PPP) $116 / 21% • Commercial Real Estate, Construction, and Commercial & Commercial Industrial Loans Real Estate − 3-6 months principal or $202 / 36%
Slide 14: Loan Payment Deferrals – C&I and CRE by Industries
LOAN PAYMENT DEFERRALS – C&I AND CRE BY INDUSTRIES % of C&I and CRE Loan Loan Total Loans $ Millions Count Balance (Excl. PPP) Real Estate and Rental & Leasing 129 $ 167 3.7% Foodservice 68 45 1.0% Transportation & Warehousing 51 20 0.5% Healthcare 115 20 0.4% Manufacturing 107 13 0.3% Retail Trade
Slide 15: Loans Rated Special Mention
LOANS RATED SPECIAL MENTION Wholesale Trade $2 / 2% Manufacturing Loan Portfolio Details $2 / 2% Healthcare $116MM Special Mention Loans; $4 / 3% Other Industries Real Estate and 3% of Total Loan Portfolio (excl PPP) $7 / 6% Rental & Leasing $59 / 51% Credit Risk Management Approach Accommodation •
Slide 16: Second Quarter 2020 Highlights
SECOND QUARTER 2020 HIGHLIGHTS • Quarterly results impacted by Net Income $9.9 Million provision for credit loss expense due to COVID-19 • Pre-tax, Pre-provision earnings Diluted EPS $0.35 remained strong Pre-Tax, $23.5 Million • Loan growth driven by PPP loans Pre-Provision of over $525 million at
Slide 17: COVID-19 Impact on Customer Behavior
COVID-19 IMPACT ON CUSTOMER BEHAVIOR . COVID-19 accelerated the migration to digital banking . Strong momentum and ideal timing for the RISE2020 digital banking new product launch in August 2020 17
Slide 18: Community Support
COMMUNITY SUPPORT CPB Foundation is actively helping the community Timely and creative solutions to meet urgent needs during the pandemic 18
Slide 19: Appendix
A. CATHERINE NGO President & Chief Executive Officer DAVIDAPPENDIX S. MORIMOTO Executive Vice President & Chief Financial Officer AUGUST 2018 19
Slide 20: Solid Capital & Liquidity Position
SOLID CAPITAL & LIQUIDITY POSITION Regulatory Capital Ratios STRONG CAPITAL As of June 30, 2020 . $150 million capital cushion to the 16.0% 13.6% Total well-capitalized Total RBC minimum of 14.0% RBC 10% at 6/30/20 1.1% 12.0% 1.1% . 2Q2020 PTPP earnings of $23.5 Tier 2 10.0% million Tier 1 8.0% CET1
Slide 21: Strong Credit Metrics
STRONG CREDIT METRICS Classified Assets Allowance for Credit Losses (ACL) 10.00% $50 1.90% $70 9.00% 1.80% $65 $45 8.00% 1.70% $60 1.60% 7.00% $40 Incurred Loss Method $55 6.00% 1.50% $35 $50 5.00% 1.40% $45 4.00% $30 1.30% $40 3.00% 1.20% $25 2.00% 1.10% $35 1.00% $20 1.00% $30 2Q19 3Q19 4Q19 1Q20
Slide 22: Non-GAAP Financial Measures - Excluding PPP
Non-GAAP Financial Measures- Excluding PPP Jun. 30, Jun. 30, 2020 PPP 2020 Actual Exclusions1 Adjusted Net Interest Income2 $ 49.4 $ (2.5) $ 47.0 Total Interest-Earnings Assets $ 6,073.4 $ (379.9) $ 5,693.4 Net Interest Margin3 3.26% 3.31% Tangible Common Equity4 $ 544.3 $ 544.3 Total Assets $ 6,633
Central Pacific Financial — Q2 2020 Earnings Presentation on 6ix