Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (September 2024)
26 slides from Central Pacific Financial Corp New's investor presentation, Sep 3, 2024
Slide 1: Investor Presentation September 2024
Investor Presentation September 2024
Slide 2: Forward-Looking Statements
2Central Pacific Financial Corp. Forward-Looking Statements This document and any accompanying oral presentation may contain forward-looking statements (“FLS”) concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, payment or nonpayment of di
Slide 3: Corporate Profile: celebrating 70-year legacy
3Central Pacific Financial Corp. celebrating legacy MARKET INFORMATION NYSE TICKER CPF SUBSIDIARY CPB TOTAL ASSETS $7.4 BILLION MARKET CAP $749 MILLION SHARE PRICE $27.66 DIVIDEND YIELD 3.8% Central Pacific Financial Corp. (CPF) is a Hawaii-based bank holding company. Central Pacific Bank (CPB) was
Slide 4: 2nd Quarter 2024 Financial Highlights
4Central Pacific Financial Corp. 2nd Quarter 2024 Financial Highlights • Net income of $15.8MM increased 22% from prior quarter • NIM expanded 14 bps sequential quarter • Core deposits grew $16.7MM from prior quarter • TCE ratio improved to 7.0% • Quarterly cash dividend maintained at $0.26 2Q24 1Q2
Slide 5: CPF Value Drivers
5Central Pacific Financial Corp. CPF Value Drivers Resilient Hawaii Economy Diversified Loan Portfolio Valuable Deposit Franchise Focus on Driving Efficiency Solid Credit & Capital Profile Digital Leader in Hawaii 1 2 3 4 5 6
Slide 6: Resilient Hawaii Economy: Tourism and Employment
6Central Pacific Financial Corp. Tourism Visitor arrivals compared to pre-pandemic 93% 1 Employment Unemployment Rate July 2024 2.9% 1 FACTORS FOR A FAVORABLE HAWAII OUTLOOK • Maui tourism recovery from Maui wildfires in August 2023 continues with visitor arrivals at 80% of the previous year in July
Slide 7: Diversified Loan Portfolio
7Central Pacific Financial Corp. • Conservative growth approach and healthy pipeline in the current environment • Strong relationship-focused loan portfolio, with nearly 80% secured by real estate • Overall portfolio yield improved 13 bps to 4.80% in the 2Q24 Diversified Loan Portfolio2 1.22 1.34 1.
Slide 8: Hawaii Residential Market and Housing Partner
8Central Pacific Financial Corp. HAWAII RESIDENTIAL MARKET • Housing prices continue to be strong with median single-family home price of $1.1MM 1 • Affordability and lack of inventory present ongoing challenges CPB GO-TO HOUSING PARTNER • Every step from housing construction development to individu
Slide 9: Innovative & Proven Programs: Bank for Small Businesses
9Central Pacific Financial Corp. Innovative & Proven Programs • Business Exceptional – Successful 2023 campaign provided a cash bonus for small businesses to open a checking account, which resulted in over $50MM in deposit growth and 85 new small business relationships • Non-Profit Plus – Ongoing pr
Slide 10: Valuable Deposit Franchise
10Central Pacific Financial Corp. Valuable Deposit Franchise • 59% of deposits FDIC insured; 64% including collateralized deposits • 55% Commercial (Average account balance of $103,000) / 45% Consumer (Average account balance of $19,000) • 52% Long-tenured customers with CPB 10 years or longer • No
Slide 11: CPF Deposit Cost Advantage
11Central Pacific Financial Corp. CPF Deposit Cost Advantage 1 HI Peers includes BOH & FHB 2 Nat’l Peers includes publicly traded banks with total assets of $3-10B Source: S&P Global. Data as of June 30, 2024. Low rate sensitive, relationship-based deposit portfolio provides significant cost advanta
Slide 12: Japan Connections and Strategic Alliances
12Central Pacific Financial Corp. Leadership Connections Strategic Alliances Best Service Level Captive Insurance Deposits CPB Foundation with Mana Up Hawaii sponsored the first Aloha Market at Tokyo Haneda Airport in November 2023 showcasing 40 Hawai’i brands CPB and Tokyo Star Bank alliance announ
Slide 13: Focus on Driving Efficiency
13Central Pacific Financial Corp. Focus on Driving Efficiency4 27 branches down 8 (-23%) since 2020 Branch Consolidation 726 FTE down 84 (-10%) since 2020 FTE Initiatives 50+ processes being standardized and automated Process Automation $1.3MM 2024 savings + additional in progress Vendor Contract Sa
Slide 14: Solid Credit Profile
14Central Pacific Financial Corp. 0.11% 0.12% 0.13% 0.19% 0.19% 0.09% 0.20% 2Q23 3Q23 4Q23 1Q24 2Q24 NPAs/Total Loans 5 * NPA increase relates to 2 Hawaii construction loans to a single borrower that subsequently paid off in full in mid-July 2023. 2Q23 NPAs/Total Loans ratio is 0.11% excluding the 2
Slide 15: Solid Capital Position
151Central Pacific Financial Corp. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Tier 1 Leverage CET1 Total Capital Regulatory Capital Ratios As June 30, 2024 Regulatory Minimum Well-Capitalized CPF Solid Capital Position 9.3% $270MM capital cushion to well capitalized minimum 11.9% 15.1% STRONG
Slide 16: Digital Leader in Hawaii
161Central Pacific Financial Corp. ACH, 75% ATM, 5% Mobile, 5% Branch, 15% 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 Retail Mobile Users 1 Digital Leader in Hawaii6 1 Excludes account clean-up that occurred in September 2023. 2 Defined as logging into online or mobile banking at least
Slide 17: Appendix
17Central Pacific Financial Corp. Appendix
Slide 18: Commercial Real Estate Portfolio
18Central Pacific Financial Corp. Commercial Real Estate Portfolio OFFICE RETAIL TOTAL BALANCE $174.2MM $296.0MM % OF TOTAL CRE 12% 20% % OF TOTAL LOANS 3% 6% WA LTV 55% 65% WA MONTHS TO MATURITY 69 65 INVESTOR / OWNER-OCCUPIED $129.1MM / $45.1MM $218.5MM / $77.5MM CRITICIZED / % OF LOAN CATEGORY $0
Slide 19: Consumer Loan Portfolio
19Central Pacific Financial Corp. • Total Hawaii Consumer $287MM / Total Mainland Consumer $255MM • Weighted average origination FICO: • 744 for Hawaii Consumer • 737 for Mainland Consumer • Mainland Consumer net charge-offs peaked in 4Q23 and declined for 2 consecutive quarters in 2024 thus far • M
Slide 20: Allowance for Credit Losses
20Central Pacific Financial Corp. • $2.4MM provision for credit loss on loans in 2Q24 driven by net charge-offs, offset by a credit of $0.2MM to the reserve for unfunded commitments, for a total provision for credit loss of $2.2MM • Strong ACL coverage ratio of 1.16% for 2Q24 Note: Totals may not su
Slide 21: High Quality Securities Portfolio
21Central Pacific Financial Corp. High Quality Securities Portfolio • $1.3B or 17% of total assets • 92% AAA rated • Portfolio mix: AFS 52% / HTM 48% • $29.7MM in investment securities purchased in 2Q24 at weighted average yield of 4.73% • Interest rate swap on $115.5MM of municipal securities start
Slide 22: Available Sources of Liquidity
22Central Pacific Financial Corp. • Ample alternative sources of liquidity available • Available sources of liquidity total 121% of uninsured/uncollateralized deposits Available Sources of Liquidity $ Millions June 30, 2024 Cash on Balance Sheet 299 Other Funding Sources: Unpledged Securities 509 FH
Slide 23: Historical Financial Highlights
23Central Pacific Financial Corp. (*) Certain amounts in prior years were reclassified to conform to current year's presentation. These reclassifications had an immaterial impact to our previously reported efficiency ratios. Note: Totals may not sum due to rounding. Historical Financial Highlights (
Slide 24: CPB Named Best Bank in Hawaii
24Central Pacific Financial Corp. CPB Named Best Bank in Hawaii by Newsweek, Forbes, and Honolulu Star-Advertiser • Newsweek’s Best In State Bank 2024 • Forbes’ Best-In-State Banks 2024 • Forbes’ America’s Best Banks 2024 • Honolulu Star-Advertiser’s Best Bank in Hawaii 2024
Slide 25: Environmental, Social & Governance (ESG) Focus
25Central Pacific Financial Corp. Environmental, Social & Governance (ESG) Focus 2023 ESG Report available here: https://www.cpb.bank/esg
Slide 26: Mahalo
26Central Pacific Financial Corp. Mahalo
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