Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Q3 2023 Earnings Presentation
20 slides from Central Pacific Financial Corp New's earnings presentation, Oct 25, 2023
Slide 1: 3rd Quarter 2023 Earnings Supplement
3 Quarter 2023 rd Earnings Supplement October 25, 2023
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: 3rd Quarter 2023 Financial Highlights
3rd Quarter 2023 3Q23 2Q23 Financial Highlights NET INCOME / $13.1MM / $14.5MM / DILUTED EPS $0.49 $0.53 • Improved liquidity position with greater cash position, deposit growth and modest loan decline PPNR $22.4MM $23.3MM • Total deposits grew by $69 million (+1.0%) RETURN ON 0.70% 0.78% ASSETS (RO
Slide 4: Lahaina, Maui Loan Exposure
Lahaina, Maui Loan Exposure Exposure is manageable and with mitigating factors, losses are not anticipated to be material Total Total Estimated $ Millions Outstanding Outstanding Not-Impacted Mitigating Factors As of 7/31/23 As of 9/30/23 As of 9/30/23* CRE 51 49 40 Fire hazard insurance required Re
Slide 5: Strong Hawaii Economic Position
1 Strong Hawaii Economic Position FACTORS FOR A FAVORABLE HAWAII OUTLOOK ▪ Maui tourism recovery is beginning, and impact to the overall State economy expected to be limited ▪ Japanese visitor return accelerating over 50% of pre- pandemic levels Visitors from Japan to Hawaii1 Employment Tourism Hous
Slide 6: Diversified Loan Portfolio
2 Diversified Loan Portfolio Loan Portfolio Composition as of September 30, 2023 Commercial & Loan Balances Outstanding-Excluding PPP Consumer Industrial 12% 10% 6.00 Construction 5.55 5.56 5.52 5.51 4% 5.50 5.01 5.00 4.55 Commercial $ Billions 4.45 Mortgage 4.50 25% 4.08 4.00 3.77 Residential Mortg
Slide 7: Relationship Deposits – Diversified & Granular
3 Relationship Deposits – Diversified & Granular Total Deposits Deposit Portfolio Composition 7.50 Time 20% Noninterest 6.87 Bearing Demand 7.00 6.74 6.75 6.81 6.64 29% 6.50 $ Billions 6.00 5.80 5.50 5.12 4.96 4.95 5.00 Savings & Money Interest Bearing 4.61 Market Demand 4.50 32% 19% 4.00 2016 2017
Slide 8: CPF Deposit Cost Advantage
CPF Deposit Cost Advantage High valued deposit franchise with proven history of funding cost advantage 6.00% Total Deposit Cost 5.00% 4.00% Cycle-to-date total deposit 3.00% beta of 21% as of 3Q23 2.00% 80 bps funding advantage 1.00% 1.08% 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 9: Strong Asset Quality
5 Strong Asset Quality Strong Credit Risk Management continues to drive low levels of problem assets Delinquencies 90+Days/Total Loans Criticized/Total Loans 1.39% 1.39% 1.28% 1.34% 1.09% 0.06% 0.05% 0.03% 0.03% 0.03% 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 NPAs/Total Loans Annualized NCO/
Slide 10: Allowance for Credit Losses
Allowance for Credit Losses • $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 $ Millions 3Q22 4Q22 1Q23 2Q23 3Q23 Beginning Ba
Slide 11: High Quality Securities Portfolio
High Quality Securities Portfolio Investment Portfolio Composition as of September 30, 2023 • $1.3B or 17% of total assets Non-Agency Corporate CMBS/RMBS Other 2% 2% 2% • 81% government agency bonds Municipals 13% • 92% AAA rated • Portfolio mix: HTM 51% / AFS 49% • Portfolio unrealized loss: HTM $1
Slide 12: Available Sources of Liquidity
Available Sources of Liquidity • Ample alternative sources of liquidity available • Available sources of liquidity total 122% of uninsured/uncollateralized deposits $ Millions September 30, 2023 Cash on balance sheet 439 Other Funding Sources: Unpledged securities* 288 FHLB available borrowing capac
Slide 13: Expense Management
Expense Management • Positive trend with YTD expenses down 3% Total Other Operating Expense ($ Millions) • Rightsizing salaries & benefits expense 42.0 42.1 • Workflow and automation efficiencies 40.4 39.9 39.6 • Vendor contract negotiations • Other efficiency initiatives in progress 3Q22 4Q22 1Q23
Slide 14: Solid Capital Position
Solid Capital Position Regulatory Capital Ratios As of September 30, 2023 $230 Mil 16.0% capital 14.1% 14.0% cushion to STRONG CAPITAL AND SHAREHOLDER RETURN 12.0% 11.0% well 10.0% 8.7% capitalized • TCE ratio of 6.1% and CET1 ratio of 11.0% 8.0% minimum 6.0% • Maintained quarterly cash dividend at
Slide 15: Appendix
Appendix Central Pacific Financial Corp. 15
Slide 16: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio CRE Portfolio Composition as of September 30, 2023 OFFICE RETAIL Storage Other 3% 4% TOTAL BALANCE $193.8MM $246.4MM Shopping Center Industrial/Warehouse 3% 28% Hotel 7% % OF TOTAL CRE 14% 18% Office % OF TOTAL 4% 5% 14% LOANS Restaurant 1% WA LTV 55% 65% Retail Apar
Slide 17: Consumer Loan Portfolio
Consumer Loan Portfolio Consumer Portfolio Composition as of September 30, 2023 • Total Hawaii Consumer $338MM / Total Mainland Consumer $345MM ($ Millions) Mainland- • Weighted average origination FICO: Unsecured $121 , 18% • 742 for Hawaii Consumer • 739 for Mainland Consumer HI- Auto $203 , 30% •
Slide 18: Central Pacific Bank recognized by Newsweek and Forbes – Best Bank in Hawaii
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. Central Pacific Financial Corp. 18
Slide 19: Environmental, Social & Governance (ESG) Focus
Environmental, Social & Governance (ESG) Focus * Central Pacific Financial Corp. * Amounts for 2022Y. Source: 2022 ESG Report can be found here: https://www.cpb.bank/esg. 19
Slide 20: Mahalo
Mahalo Central Pacific Financial Corp. 20
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