Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Q4 2023 Earnings Presentation
21 slides from Central Pacific Financial Corp New's earnings presentation, Jan 31, 2024
Slide 1: 4th Quarter 2023 Earnings Supplement
4 Quarter 2023 th Earnings Supplement January 31, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements This document may contain FLS 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 financial items; statements
Slide 3: 4th Quarter 2023 Financial Highlights
4th Quarter 2023 4Q23 3Q23 2023Y Financial Highlights NET INCOME / $14.9MM / $13.1MM / $58.7MM / DILUTED EPS $0.55 $0.49 $2.17 • Growth in net income and PPNR QoQ PPNR $23.8MM $22.4MM $92.5MM • Solid liquidity position with sizable cash position, RETURN ON ASSETS and modest loan and deposit portfoli
Slide 4: 4Q Balance Sheet Repositioning Summary
2 4Q Balance Sheet Repositioning Summary • Completed investment portfolio restructuring which is expected to add $0.7 million to annual pre-tax income • Sold available-for-sale debt securities with a book value of $30.0 million, weighted average yield of 3.3%, weighted average duration of 3.4 years,
Slide 5: Resilient Hawaii Economy
1 Resilient Hawaii Economy FACTORS FOR A FAVORABLE HAWAII OUTLOOK ▪ Maui tourism recovery faster than anticipated ▪ Japanese visitor return increasing, currently at ~49% of pre-pandemic levels Visitors from Japan to Hawaii1 Employment Tourism Housing Unemployment Rate Visitor arrivals Oahu Median Si
Slide 6: Diversified Loan Portfolio
2 Diversified Loan Portfolio Loan Portfolio Composition as of December 31, 2023 Loan Balances Outstanding-Excluding PPP Consumer Commercial & 12% Industrial 6.00 11% Construction 5.55 5.44 3% 5.50 5.01 5.00 Commercial $ Billions 4.55 Mortgage 4.45 4.50 25% 4.08 4.00 3.77 Residential 3.53 Mortgage 3.
Slide 7: Lahaina, Maui Loan Exposure
Lahaina, Maui Exposure Composition Lahaina, Maui Loan Exposure as of December 31, 2023 Total Outstanding Balance of $103MM (1.9% of Total Loans) Consumer Exposure is manageable and with mitigating C&I $4MM, 4% factors, losses are not anticipated to be material $14MM, 14% • Loan Payment Deferral Prog
Slide 8: Relationship Deposits – Diversified & Granular
3 Relationship Deposits – Diversified & Granular Total Deposits Deposit Portfolio Composition 7.00 6.85 Time 6.74 Noninterest 6.64 20% Bearing Demand 6.50 28% 6.00 5.80 $ Billions 5.50 5.12 4.96 4.95 5.00 4.61 4.50 Savings & Money Interest Bearing Market Demand 4.00 32% 20% 2016 2017 2018 2019 2020
Slide 9: 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 beta of 23% as 3.00% of 4Q23 91 bps funding advantage 2.00% 1.00% 0.00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 10: 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% 1.28% 1.34% 1.09% 0.06% 0.05% 0.92% 0.03% 0.03% 0.02% 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 NPAs/Total Loans Annualized NCO/
Slide 11: Allowance for Credit Losses
Allowance for Credit Losses • $5.0MM provision for credit loss on loans in 4Q23 driven by net charge-offs, offset by a credit of $0.3MM to the reserve for unfunded commitments, for a total provision for credit loss of $4.7MM • ACL coverage ratio increased to 1.18% for 4Q23 $ Millions 4Q22 1Q23 2Q23
Slide 12: High Quality Securities Portfolio
High Quality Securities Portfolio Investment Portfolio Composition • $1.3B or 17% of total assets as of December 31, 2023 Non-Agency • 92% AAA rated Corporate CMBS/RMBS Other 3% 2% 2% • Portfolio mix: AFS 51% / HTM 49% Municipal 13% • Portfolio unrealized loss: HTM $67.2MM (down $41.0MM QoQ)/ AFS $1
Slide 13: Available Sources of Liquidity
Available Sources of Liquidity • Ample alternative sources of liquidity available • Available sources of liquidity total 125% of uninsured/uncollateralized deposits $ Millions December 31, 2023 Cash on balance sheet 522 Other Funding Sources: Unpledged securities* 284 FHLB available borrowing capaci
Slide 14: Expense Management
Expense Management Total Other Operating Expense ($ Millions) 42.1 42.5 Ongoing Initiatives: 40.4 39.9 39.6 2.3 * • Rightsizing salaries and benefits expense • Workflow and automation efficiencies 40.2 • Vendor contract negotiations • Other efficiency initiatives in progress 4Q22 1Q23 2Q23 3Q23 4Q23
Slide 15: Solid Capital Position
Solid Capital Position Regulatory Capital Ratios As of December 31, 2023 $250MM 16.0% 14.6% capital 14.0% cushion to STRONG CAPITAL AND SHAREHOLDER RETURN 12.0% 11.4% well capitalized 10.0% 8.8% minimum • TCE ratio of 6.6% and CET1 ratio of 11.4% 8.0% 6.0% • Maintained quarterly cash dividend at $0.
Slide 16: Appendix
Appendix Central Pacific Financial Corp. 16
Slide 17: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio CRE Portfolio Composition as of December 31, 2023 OFFICE RETAIL Storage Other 3% 2% Shopping Center 3% TOTAL BALANCE $187.7MM $259.6MM Industrial/Warehouse 28% Hotel 8% % OF TOTAL CRE 14% 19% Office % OF TOTAL 14% 4% 5% LOANS Restaurant 1% WA LTV 56% 64% Retail Apart
Slide 18: Consumer Loan Portfolio
Consumer Loan Portfolio Consumer Portfolio Composition as of December 31, 2023 • Total Hawaii Consumer $322MM / Total Mainland Consumer $308MM ($ Millions) • Weighted average origination FICO: Mainland Unsecured • 743 for Hawaii Consumer $102 , 16% • 738 for Mainland Consumer HI Auto $189 , 30% • YT
Slide 19: Recognized in Newsweek's America's Best Regional Banks for 2024
Central Pacific Bank recognized in Newsweek’s America’s Best Regional Banks for 2024 • Recognized for exceptional customer service, digital banking tools, and financial resources available to the community • Based on our creditworthiness, profitability, net loan activity and public image Central Pac
Slide 20: 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. 20
Slide 21: Mahalo
Mahalo Central Pacific Financial Corp. 21
Central Pacific Financial Corp New — Q4 2023 Earnings Presentation on 6ix