Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (November 2023)
28 slides from Central Pacific Financial Corp New's investor presentation, Nov 7, 2023
Slide 1: Investor Presentation November 2023
Investor Presentation November 2023
Slide 2: Forward-Looking Statements
2Central Pacific Financial Corp. 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, n
Slide 3: Corporate Profile and Market Information
3Central Pacific Financial Corp. MARKET INFORMATION NYSE TICKER CPF SUBSIDIARY CENTRAL PACIFIC BANK (CPB) TOTAL ASSETS $7.6 BILLION MARKET CAP $427 MILLION SHARE PRICE $15.78 DIVIDEND YIELD 6.6% Central Pacific Financial Corp. is a Hawaii-based bank holding company. Central Pacific Bank (CPB) was fo
Slide 4: Lahaina, Maui Loan Exposure
4Central Pacific Financial Corp. Lahaina, Maui Loan Exposure Exposure is manageable and with mitigating factors, losses are not anticipated to be material • Loan Payment Deferral Programs being offered for all loan types for those impacted by the wildfire. • As of 9/30/23, 3- to 6-month loan payment
Slide 5: 3rd Quarter 2023 Financial Highlights
5Central Pacific Financial Corp. 3rd Quarter 2023 Financial Highlights • Improved liquidity position with greater cash position, deposit growth and modest loan decline • Total deposits grew by $69 million (+1.0%) • Strong capital and asset quality • Quarterly cash dividend maintained at $0.26 • Fitc
Slide 6: CPF Value Drivers
6Central Pacific Financial Corp. CPF Value Drivers Strong Hawaii Economic Position Diversified Loan Portfolio Valuable Deposit Franchise Focus on Driving Efficiency Solid Credit & Capital Profile Digital Initiatives to Expand Future Growth 1 2 3 4 5 6
Slide 7: Strong Hawaii Economic Position
7Central Pacific Financial Corp. Tourism Visitor arrivals compared to pre-pandemic 89% 1 Employment Unemployment Rate September 2023 2.8% 1 FACTORS FOR A FAVORABLE HAWAII OUTLOOK ▪ Maui tourism recovery is beginning, and impact to the overall State economy expected to be limited ▪ Japanese visitor r
Slide 8: Diversified Loan Portfolio
8Central Pacific Financial Corp. Continued focus on moderating near-term loan growth Strong and diverse loan portfolio, with over 75% secured by real estate Diversified Loan Portfolio2 3.53 3.77 4.08 4.45 4.55 5.01 5.55 5.56 5.52 5.51 3.00 3.50 4.00 4.50 5.00 5.50 6.00 2016 2017 2018 2019 2020 2021
Slide 9: Residential Mortgage Strength
9Central Pacific Financial Corp. Residential Mortgage Strength CPB RESIDENTIAL MORTGAGE LEADER • Instrumental in driving passage of Hawaii bill in 2023 that expands low-income housing tax credit investments • Market strength in purchased mortgages; less reliance on refinance market • Lead lender on
Slide 10: Small Business Leader
101Central Pacific Financial Corp. Small Business Leader 2022 SBA HAWAII LENDER OF THE YEAR FOR THE 13TH CONSECUTIVE YEAR Originated more 7(a) SBA loans based on count and dollar amount than the 3 other large Hawaii banks combined1 Niche Markets • CPB has strong market share in the dental and physic
Slide 11: Valuable Deposit Franchise
11Central Pacific Financial Corp. • 57% of deposits FDIC insured; 65% including collateralized deposits • 56% Commercial / 44% Consumer • Long-tenured: 51% with CPB 10 years or longer • Average consumer account balance $19,000 • Average commercial account balance $114,000 • No brokered deposits Valu
Slide 12: CPF Deposit Cost Advantage
12Central Pacific Financial Corp. 1.08% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1Q23 2Q23 3Q23 Total Deposit Cost CPF Peer average* Fed Funds CPF Deposit Cost Advantage * Public banks $3-10 billion in total a
Slide 13: Japan Competitive Advantage
13Central Pacific Financial Corp. Leadership Connections Strategic Alliances Best Service Level Captive Insurance Deposits CPF Chairman Emeritus, Paul Yonamine A distinguished leader in the Japanese business market. He serves on the Board of Directors of SMBC and Seven & i Holdings CPB and Tokyo Sta
Slide 14: Focus on Driving Efficiency
14Central Pacific Financial Corp. Focus on Driving Efficiency4 27 branches down 8 (-23%) since 2020 Branch Consolidation 731 FTE down 79 (-10%) since 2020 FTE Initiatives 50+ processes being standardized and automated Process Automation $600K 2023 savings + additional in progress Vendor Contract Sav
Slide 15: Expense Management
15Central Pacific Financial Corp. • Positive trend with YTD expenses down 3% • Rightsizing salaries & benefits expense • Workflow and automation efficiencies • Vendor contract negotiations • Other efficiency initiatives in progress Expense Management 42.0 40.4 42.1 39.9 39.6 3Q22 4Q22 1Q23 2Q23 3Q23
Slide 16: Solid Credit & Capital Profile
16Central Pacific Financial Corp. 0.08% 0.09% 0.10% 0.20% 0.12% 3Q22 4Q22 1Q23 2Q23 3Q23 NPAs/Total Loans 0.12% 0.12% 0.16% 0.24% 0.28% 3Q22 4Q22 1Q23 2Q23 3Q23 Annualized NCO/Avg Loans Solid Credit & Capital Profile * NPA increase relates to 2 Hawaii construction loans to a single borrower that sub
Slide 17: Solid Capital Position
171Central 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 of September 30, 2023 Regulatory Minimum Well-Capitalized CPF Solid Capital Position 8.7% STRONG CAPITAL AND SHAREHOLDER RETURN • TCE ratio of 6.1% and
Slide 18: Digital Initiatives to Expand Future Growth
181Central Pacific Financial Corp. Mobile App – Best in Market1 • CPB’s mobile app is rated 4.9 (out of 5) in the Apple store • Mobile app includes value added tools, including budgeting and cash flow to help manage money • CreditSense enables customers to monitor their credit scores and explore CPB
Slide 19: Appendix
19Central Pacific Financial Corp. Appendix
Slide 20: Historical Financial Highlights
20Central 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 21: Commercial Real Estate Portfolio
21Central Pacific Financial Corp. Commercial Real Estate Portfolio OFFICE RETAIL TOTAL BALANCE $193.8MM $246.4MM % OF TOTAL CRE 14% 18% % OF TOTAL LOANS 4% 5% WA LTV 55% 65% WA MONTHS TO MATURITY 73 64 INVESTOR / OWNER-OCCUPIED $144.8MM / $49.0MM $193.2MM / $53.2MM Diverse CRE portfolio, primarily H
Slide 22: Consumer Loan Portfolio
22Central Pacific Financial Corp. • Total Hawaii Consumer $338MM / Total Mainland Consumer $345MM • Weighted average origination FICO: • 742 for Hawaii Consumer • 739 for Mainland Consumer • YTD Annualized NCO %: • HI Auto 0.2% • HI Other 0.7% • Mainland Auto 0.9% • Mainland Home Improvement 2.5% •
Slide 23: Allowance for Credit Losses
23Central Pacific Financial Corp. • $4.5MM provision for credit loss on loans in 3Q23 driven by net charge-offs, plus a $0.4MM reserve for unfunded commitments, for a total provision for credit loss of $4.9MM • ACL coverage ratio increased to 1.17% for 3Q23 Note: Totals may not sum due to rounding.
Slide 24: High Quality Securities Portfolio
24Central Pacific Financial Corp. High Quality Securities Portfolio • $1.3B or 17% of total assets • 81% government agency bonds • 92% AAA rated • Portfolio mix: HTM 51% / AFS 49% • Portfolio unrealized loss: HTM $108.2MM / AFS $147.1MM • Total portfolio unrealized loss $255.3MM vs $468.6MM book equ
Slide 25: Available Sources of Liquidity
25Central Pacific Financial Corp. • Ample alternative sources of liquidity available • Available sources of liquidity total 122% of uninsured/uncollateralized deposits Available Sources of Liquidity * BTFP eligible securities at par, other unpledged securities at market value. $ Millions September 3
Slide 26: Recognized as Best Bank in Hawaii
26Central Pacific Financial Corp. Central Pacific Bank recognized by Newsweek and Forbes – Best Bank in Hawaii* * Newsweek ranked CPB best small bank in Hawaii for 2023. Forbes named CPB best bank in Hawaii for 2022.
Slide 27: Environmental, Social & Governance (ESG) Focus
27Central Pacific Financial Corp. Environmental, Social & Governance (ESG) Focus * Amounts for 2022Y. Source: 2022 ESG Report can be found here: https://www.cpb.bank/esg. *
Slide 28: Mahalo
28Central Pacific Financial Corp. Mahalo
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