Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (December 2020)
27 slides from Central Pacific Financial Corp New's investor presentation, Dec 8, 2020
Slide 1: December 2020 Investor Presentation
December 2020 Investor Presentation PAUL YONAMINE Chief Executive Officer CATHERINE NGO President DAVID MORIMOTO Chief Financial Officer
Slide 2: Forward Looking Statements
2 2 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 f
Slide 3: Corporate Profile
3 3 CORPORATE PROFILE Founded in 1954 by Japanese- American veterans of World War II Over 65 years later, Central Pacific continues to work for our customers, shareholders, employees and the community Note: Assets as of September 30, 2020, other Market Information as of November 30, 2020. • 31 Centr
Slide 4: Experienced & Prepared Leadership
4 4 EXPERIENCED & PREPARED LEADERSHIP Paul Yonamine Chairman & CEO Catherine Ngo President • Over 40 years of executive management experience • As President of IBM Japan, led the Company through the 2011 Tohoku earthquake, tsunami and radiation after-effects • Led KPMG Consulting through the SARS ou
Slide 5: Third Quarter 2020 Highlights
5 5 THIRD QUARTER 2020 HIGHLIGHTS Net Income $6.9 Million Diluted EPS $0.24 Pre-Tax, Pre-Provision Earnings $23.7 Million Loan Growth +$27 Million +0.5% Normalized Net Interest Margin* 3.26% * Normalized for PPP impact to NII, refer to slide 27 for additional details. • Quarterly results continue to
Slide 6: Strong Credit Metrics
6 6 STRONG CREDIT METRICS Incurred Loss Method * Excludes the PPP loan portfolio from total loans. * Peer Average includes banks $3-7B in assets. Source S&P Global. $0 $20 $40 $60 $80 $100 3.00% 5.00% 7.00% 9.00% 11.00% 13.00% 15.00% 3Q19 4Q19 1Q20 2Q20 3Q20 Classified Assets Classified Assets + ORE
Slide 7: Loan Payment Deferrals Continue to Decline
7 7 LOAN PAYMENT DEFERRALS CONTINUE TO DECLINE • Loan deferrals continue to decline with 5% of the overall portfolio on deferral as of 11/30/20 • Consumer and small business loans (reported in C&I) were automatically granted a 2nd deferral to support clients in need • 3-month payment deferrals were
Slide 8: PPP Initiatives Ongoing
8 8 PPP INITIATIVES ONGOING FORGIVENESS PROCESS: • PPP borrowers initially slow to apply for forgiveness with less than 20% having applied as of 11/30/20; volume of applications now starting to increase • SBA has been relatively quick in forgiveness processing time • As of 11/30/20, 474 PPP loans wi
Slide 9: Digital Banking, Revenue Enhancements, Branch Transformation, Operational Excellence
9 9 1 2 DIGITAL BANKING REVENUE ENHANCEMENTS BRANCH TRANSFORMATION OPERATIONAL EXCELLENCE • Launched cpb.bank website in November 2019 • Launched new online and mobile banking platforms in August 2020 • Full ATM network upgrade completed in November 2020 • Outsourced residential mortgage loan servic
Slide 10: COVID-19 Impact on Customer Behavior
10 10 COVID-19 IMPACT ON CUSTOMER BEHAVIOR COVID-19 accelerated the migration to digital banking Strong momentum and ideal timing for the RISE2020 digital banking strategy new product launch which occurred in August 2020
Slide 11: Newly Upgraded Online/Mobile Platforms & ATMs
11 11 NEWLY UPGRADED ONLINE/MOBILE PLATFORMS & ATMS New online/mobile platform publicly launched late August 2020. New mobile app rating 4.7 & 4.4 out of 5 stars* on Apple and Android respectively Complete personal financial management (PFM) all in one-site, with account aggregation, budgeting,
Slide 12: Branch Consolidation Initiative
12 12 BRANCH CONSOLIDATION INITIATIVE • 31 total branches, with 23 on the island of Oahu (pictured) • 4 branches identified in red were consolidated into neighboring branches in 2020 • 4 additional branches remain temporarily closed due to the COVID-19 pandemic
Slide 13: Resilient Hawaii Market Strengths and Recovery Factors
13 13 RESILIENT HAWAII MARKET STRENGTHS AND RECOVERY FACTORS • Re-opened tourism on October 15 for trans- Pacific travelers with a negative COVID-19 test • While tourism drives ~20% of GDP, government/defense and real estate makes up another ~45% of GDP • Construction and development in Hawaii conti
Slide 14: Solid Capital & Liquidity Position
14 14 $170 million capital cushion to the well-capitalized Total RBC minimum of 10% at 9/30/20 3Q2020 PTPP earnings of $23.7 million $55 million subordinated note offering completed in October 2020, provides additional Tier 2 capital and anticipated to increase CPF Total RBC by ~120 bps SOLID
Slide 15: Appendix
15 15 APPENDIX
Slide 16: Total Loan Portfolio
16 16 TOTAL LOAN PORTFOLIO Commercial & Industrial $528 / 10% Paycheck Protection Program $529 / 11% Construction $118 / 2% Residential $1,680 / 33% Home Equity $534 / 11% CRE – Owner Occupied $232 / 5% CRE – Investor $909 / 18% Consumer $500 / 10% Total Loan Portfolio of $5,031MM Outstanding Balanc
Slide 17: Commercial & Industrial – Industry Composition
17 17 COMMERCIAL & INDUSTRIAL – INDUSTRY COMPOSITION Healthcare $94 / 18% Transportation & Warehousing $67 / 13% Foodservice $51 / 10% Real Estate and Rental & Leasing $48 / 9% Retail Trade $43 / 8% Manufacturing $40 / 8% Wholesale Trade $23 / 4% Other Industries $162 / 30% $528MM 10% Loan Portfolio
Slide 18: Paycheck Protection Program (PPP)
18 18 PAYCHECK PROTECTION PROGRAM [PPP] Foodservice $77 / 14% Healthcare $75 / 14% Construction $72 / 14% Professional, Scientific and Technical Services $59 / 11% Administrative and Waste Management $34 / 7% Retail Trade $34 / 6% Real Estate and Rental & Leasing $28 / 5% Manufacturing $26 / 5% Whol
Slide 19: Commercial Real Estate – Property Type Composition
19 19 COMMERCIAL REAL ESTATE – PROPERTY TYPE COMPOSITION Loan Portfolio Details • Strong borrowers that operate out of their own properties • Well-collateralized with WA LTV of 65% • 94% secured in Hawaii and 6% in Mainland − HI WA LTV 66% − ML WA LTV 55% • Long term relationships averaging 15 years
Slide 20: Commercial Real Estate – Property Type Composition
20 20 COMMERCIAL REAL ESTATE – PROPERTY TYPE COMPOSITION Loan Portfolio Details • Seasoned real estate investors • Well-collateralized with WA LTV of 59% • 77% secured in Hawaii and 23% in Mainland/Guam − HI WA LTV 61% − ML/Guam WA LTV 55% • Long term relationships averaging 12 years • Average outst
Slide 21: High Risk Industries
21 21 HIGH RISK INDUSTRIES Loan Portfolio Details • Well established, locally owned and operated by strong management • Borrowers have access to capital with good liquidity • Long term relationships averaging 12 years • Granular with average outstanding loan amount of $263,000 • Criticized loan expo
Slide 22: Residential Mortgage
22 22 RESIDENTIAL MORTGAGE Owner Occupied $1,369 / 81% Investor & Second Home $311 / 19% $1,680MM 33% Outstanding Balance as of 9/30/20 $ in Millions Loan Portfolio Details • 100% in Hawaii; 89% on Oahu • 83% of loan balance are loans <$1.0MM • Average outstanding loan amount of $438,000 • WA LTV 62
Slide 23: Home Equity
23 23 HOME EQUITY Owner Occupied $466 / 87% Investor & Second Home $68 / 13% $534MM 11% Outstanding Balance as of 9/30/20 $ in Millions Loan Portfolio Details • 100% in Hawaii; 85% on Oahu • 50% of loan balance are lines/loans <$250 thousand • Average outstanding loan amount of $139,000 • 55% are 1s
Slide 24: Consumer
24 24 CONSUMER Outstanding Balance as of 9/30/20 $ in Millions Personal $236 / 47% Auto $264 / 53% $500MM 10% Hawaii $209 / 79% Mainland $55 / 21% Private Banking $55 / 23% Hawaii $78 / 33% Mainland $103 / 44% $264MM 5% $236MM 5% Total Consumer Auto Personal Loan Portfolio Details • Total Consumer −
Slide 25: Loans Rated Special Mention
25 25 LOANS RATED SPECIAL MENTION Loan Portfolio Highlights $149MM Special Mention Loans; 3.3% of Total Loan Portfolio (excl PPP) Credit Risk Management Approach • Ongoing monitoring of all risk rated loans and frequent high-touch of majority borrowers • Assessment for risk rating migration based on
Slide 26: Loans Rated Classified
26 26 LOANS RATED CLASSIFIED Note Excludes Substandard Loans Held For Sale (LHFS) totaling $6.6MM Other Industries include: Other Services; Professional, Scientific and Technical; Construction; Utilities; Retail Trade; Wholesale Trade Loan Portfolio Highlights $48MM Classified Loans; 1.1% of Total L
Slide 27: Non-GAAP Financial Measures- Excluding PPP
27 27 Non-GAAP Financial Measures- Excluding PPP 1. Net interest income excludes PPP interest income less an assumed funding cost of 0.25% and PPP net loan fee income; Total Interest- Earning Assets excludes average PPP loan balances during the quarter-ended 9/30/20; Total Assets excludes PPP loan b
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