Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (August 2016)
26 slides from Central Pacific Financial Corp New's investor presentation, Aug 1, 2016
Slide 1: Investor presentation August 2016
A. CATHERINE NGO President & Chief Executive Officer DAVID S. MORIMOTO Executive Vice President & Chief Financial Officer August 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements 1 This presentation may contain forward-looking statements concerning: projections of revenues, income/loss, earnings/loss per share, capital expenditures, dividends, capital structure, or other financial items, plans and objectives of management for future operations, fut
Slide 3: Corporate Profile
Corporate Profile 2 Founded in 1954 by Japanese-American veterans of World War II Fourth largest financial institution in Hawaii. 2011: $345 million recapitalization, including rights offering. Profitable every quarter since recapitalization CPF stock price is up ~ 145% from recapitalization
Slide 4: Second Quarter 2016 Highlights
Net income of $12.1 million and ROA of 0.93%. Total loans increased by $398 million, or 13% and total deposits increased by $223 million, or 5% from the prior year. Relatively stable net interest margin of 3.29%, compared to 3.32% in the 2Q2015. Efficiency ratio of 66.7%, compared to 71.5% i
Slide 5: Shareholder Value Drivers
Shareholder Value Drivers 4 Strong Hawaii Market Relationship Banking Growth Opportunities Asset Quality Improvements Technology & Efficiency Enhancements Capital Optimization
Slide 6: Hawaii at a Glance
Population of 1.4 million (2015). Four major islands – Oahu is home to 70% of the state’s total population. Real State GDP (2015) $70.8 billion, +2.0% from 2014. Forecasts expect a 2.3% increase in 2016. State unemployment rate of 3.3% is below the national unemployment rate of 4.9% (June 20
Slide 7: Diversity of Tourism – Visitor Arrivals
Diversity of Tourism – Visitor Arrivals 6 Source: Hawaii Tourism Authority US West 41.2% US East 21.0% Japan 17.6% Canada 6.1% Australia 4.7% China 2.2% Korea 2.3% Europe 1.7% Other 3.4% Visitor Arrivals 2015 2015 Growth Regions China +12% Australia +7% US West +7%
Slide 8: Strong Real Estate Market
7 Source: Honolulu Board of Realtors & National Association of Realtors . Data as of June 2016. Strong Real Estate Market $760.0 $249.8 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 T h ous an d s Existing Single Family Home Median Sal
Slide 9: Continued Growth and Development
Continued Growth and Development 8 1. Residential High-Rise Condominium Development in Honolulu Proposed master plan includes 22 new high-rise towers in Honolulu. Thirteen developments have completed successful sales and begun construction or have completed construction over the past few years.
Slide 10: Continued Growth and Development
Continued Growth and Development 9
Slide 11: Hawaii Banking Market
Hawaii Banking Market Note: Deposit data as of March 31, 2016. For consistency, total deposits at the regulated depository level. Source: SNL Financial 10 Total Deposits Market Rank Institution Type Ownership Branches (millions) Share 1 First Hawaiian Bank Bank Private - BNP 62 $16,054 38.3% 2 Bank
Slide 12: CPB Branch Positioning
Kauai (2) Oahu (27) Maui (4) Hawaii (2) CPB Branch Positioning ($ millions) June 30, 2016 11 Total Assets $5,283 Total Loans $3,404 Total Deposits $4,405 Total Branches 35
Slide 13: Relationship Banking Growth Opportunities
Relationship Banking Growth Opportunities 12 Launched a customer experience initiative to create a competitive advantage and differentiate ourselves from the rest of the market. Identified and focused on targeted market niches. Established a strategic alliance with a regional bank in Japan to
Slide 14: Strong Loan Growth
$4,030 $3,042 $2,169 $2,064 $2,204 $2,631 $2,932 $3,212 $3,309 $3,404 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 2008 2009 2010 2011 2012 2013 2014 2015 1Q2016 2Q2016 Balances Outstanding Comml Mtg Construct/Dev C&I Consumer/Other Res Mtg Million s Strong Loan Growth 13 YTD 2016
Slide 15: Core Deposit Franchise
Core Deposit Franchise 14 $4.4 billion in deposits as of 6/30/2016, with total core deposits at 81% Noninterest-Bearing DDA 26% Interest-Bearing DDA 19% Savings & Money Mkt 31% CDs < $100M 5% CDs > $100M 4% Government CDs 15%
Slide 16: Total Deposit Cost Advantage
Total Deposit Cost Advantage 15 Note: National peer group is comprised of publicly traded U.S. banks with total assets between $3 and $5 billion. Source: SNL Financial 1.63% 1.09% 0.64% 0.30% 0.14% 0.11% 0.09% 0.09% 0.11% 0.12% 2.41% 1.67% 1.09% 0.79% 0.56% 0.42% 0.36% 0.37% 0.39% 0.00% 0.50% 1.00%
Slide 17: Significantly Reduced NPAs
$144 $500 $303 $196 $90 $47 $42 $16 $16 $15 $- $100 $200 $300 $400 $500 $600 2008 2009 2010 2011 2012 2013 2014 2015 1Q2016 2Q2016 Million s C&D Comml Mtg Res Mtg C&I/Other Significantly Reduced NPAs 16 0.28% of Total Assets
Slide 18: Strong Reserve Coverage
Strong Reserve Coverage 17 Note: National peer group is comprised of publicly traded U.S. banks with total assets between $3 and $5 billion. Source: SNL Financial 2.97% 6.75% 8.89% 5.91% 4.37% 3.19% 2.53% 1.97% 1.88% 1.79% 1.50% 1.93% 1.97% 1.82% 1.61% 1.44% 1.22% 1.07% 1.04% 0.00% 1.00% 2.00% 3.00%
Slide 19: Technology & Efficiency Enhancements
Technology & Efficiency Enhancements 18 2014/ 2015 Completed 2016 Underway Core System Outsource – Focus on core competency of relationship banking and outsource non-core tasks where feasible. Items Processing Outsource – Under declining processing volumes, converted IP related fixed costs to va
Slide 20: Targeting Improved Efficiency Ratio
40% 60% 80% 100% 120% 2008 2009 2010 2011 2012 2013 2014 2015 1Q2016 2Q2016 Efficiency Ratio Targeting Improved Efficiency Ratio 19 Normalize balance sheet composition and net interest income over time. Improve efficiencies by leveraging data warehouse and branch automation functionalities. En
Slide 21: Capital Optimization
Capital Optimization 20 Reinstated quarterly cash dividend of $0.08 per share in 3Q2013. Increased cash dividend by 25% in 3Q2014, 20% in 1Q2015, 17% in 4Q2015 and 14% in 3Q2016. Aggregate cash dividends of $55 million returned to our shareholders since 3Q2013. Share repurchase activity to o
Slide 22: Shareholder Value Drivers
Shareholder Value Drivers 21 Strong Hawaii Market Relationship Banking Growth Opportunities Asset Quality Improvements Technology & Efficiency Enhancements Capital Optimization
Slide 23: Appendix
APPENDIX RA! XW FINANCIAL CORP
Slide 24: Financial Highlights
Financial Highlights 23 ($ in millions) 6/30/2016 3/31/2016 2015 2014 2013 2012 2011 Balance Sheet (period end data) Loans and leases $3,403.9 $3,309.0 $3,211.5 $2,932.2 $2,630.6 $2,203.9 $2,064.4 Total assets 5,283.0 5,242.2 5,131.3 4,853.0 4,741.2 4,370.4 4,132.9 Total deposits 4,405.1 4,496.6 4,4
Slide 25: Loan and Credit Composition
Loan and Credit Composition 24 ($ in Millions) Balance % Balance % $ % Hawaii Portfolio Residential Mortgage $1,502 44% $1,352 45% $150 11% Commercial Mortgage 716 21% 588 20% 128 22% Commercial & Ind/Leasing 360 11% 342 11% 18 5% Construction 95 3% 80 3% 15 19% Consumer & Other 279 8% 257 8% 22 9%
Slide 26: Stable Net Interest Margin
Stable Net Interest Margin 25 NIM has been stable for over 2 years. Expect NIM to be in the 3.25 t0 3.35% range over the next couple of quarters. Future improvements in the NIM will result from continuing to grow the loan portfolio and stabilizing the investment and loan yields. -3.41% 1.51% -
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