Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (March 2017)
25 slides from Central Pacific Financial Corp New's investor presentation, Mar 6, 2017
Slide 1: David S. Morimoto, EVP & CFO, March 2017
DAVID S. MORIMOTO Executive Vice President & Chief Financial Officer March 2017
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 ~ 317% from recapitalization
Slide 4: 2016 Financial Highlights
Net income of $47.0 million and ROA of 0.90%. Total loans increased by $313 million, or 10% from 12/31/2015. Total deposits increased by $175 million, or 4%. Relatively stable net interest margin of 3.27% in 2016, compared to 3.30% in 2015. Efficiency ratio of 66.7%, compared to 68.9% in 2
Slide 5: Shareholder Value Drivers
Shareholder Value Drivers 4 Strong Hawaii Market Relationship Banking Growth Opportunities Asset Quality Improvements Efficiency Enhancements Capital Optimization
Slide 6: Hawaii at a Glance
Population of 1.4 million (2016). Four major islands – Oahu is home to 70% of the state’s total population. Real State GDP (2016) $72.9 billion, +2.0% from 2015. Forecasts expect a 1.8% increase in 2017. State unemployment rate of 2.9% is below the national unemployment rate of 4.7% (Decembe
Slide 7: Diversity of Tourism – Visitor Arrivals
Diversity of Tourism – Visitor Arrivals 6 Source: Hawaii Tourism Authority 2016 Growth Regions Korea +27% US West +4% US East +4% US West 40.9% US East 20.9% Japan 16.6% Canada 5.4% Australia 4.5% China 1.9% Korea 2.7% Europe 1.6% Other 5.5% Visitor Arrivals 2016
Slide 8: Strong Real Estate Market
7 Source: Honolulu Board of Realtors & National Association of Realtors . Data as of January 2017. Strong Real Estate Market $730.0 $230.4 $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 ou sa n ds Existing Single Family Home Median
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 December 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 Public - Partial 62 $16,800 38.1% 2
Slide 12: CPB Branch Positioning
Kauai (2) Oahu (27) Maui (4) Hawaii (2) CPB Branch Positioning ($ millions) December 31, 2016 11 Total Assets $5,384 Total Loans $3,525 Total Deposits $4,608 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 $3,525 $- $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 2016 Balances Outstanding Comml Mtg Construct/Dev C&I Consumer/Other Res Mtg M ill io n s Strong Loan Growth 13 5 Year CAGR +15% +33%
Slide 15: Core Deposit Franchise
Core Deposit Franchise 14 $4.6 billion in deposits as of 12/31/2016, with total core deposits at 81% Noninterest-Bearing DDA 28% Interest-Bearing DDA 19% Savings & Money Mkt 30% CDs < $100M 4% 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 $7 billion. Source: SNL Financial 1.63% 1.09% 0.64% 0.30% 0.14% 0.11% 0.09% 0.09% 0.12% 2.35% 1.59% 1.05% 0.78% 0.54% 0.40% 0.34% 0.33% 0.36% 0.00% 0.50% 1.00% 1.50%
Slide 17: Significantly Reduced NPAs
$144 $500 $303 $196 $90 $47 $42 $16 $9 $- $100 $200 $300 $400 $500 $600 2008 2009 2010 2011 2012 2013 2014 2015 2016 M ill io n s C&D Comml Mtg Res Mtg C&I/Other Significantly Reduced NPAs 16 0.17% 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 $7 billion. Source: SNL Financial 2.97% 6.75% 8.89% 5.91% 4.37% 3.19% 2.53% 1.97% 1.61% 1.48% 2.00% 2.08% 1.97% 1.69% 1.48% 1.23% 1.11% 0.98% 0.00% 1.00% 2.00% 3.00% 4.00%
Slide 19: Targeting Improved Efficiency Ratio
40% 60% 80% 100% 120% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Efficiency Ratio Targeting Improved Efficiency Ratio 18 Normalize balance sheet composition and net interest income over time. Improve efficiencies by leveraging data warehouse and branch automation functionalities. Enhance cus
Slide 20: Capital Optimization
Capital Optimization 19 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 $65 million returned to our shareholders since 3Q2013. Share repurchase activity to o
Slide 21: Shareholder Value Drivers
Shareholder Value Drivers 20 Strong Hawaii Market Relationship Banking Growth Opportunities Asset Quality Improvements Efficiency Enhancements Capital Optimization
Slide 22: Appendix
APPENDIX ENTRAL PACIFIC XW FINANCIAL CORP
Slide 23: Financial Highlights
Financial Highlights 22 ($ in millions) 2016 2015 2014 2013 2012 2011 Balance Sheet (period end data) Loans and leases $3,524.9 $3,211.5 $2,932.2 $2,630.6 $2,203.9 $2,064.4 Total assets 5,384.2 5,131.3 4,853.0 4,741.2 4,370.4 4,132.9 Total deposits 4,608.2 4,433.4 4,110.3 3,936.2 3,680.8 3,443.5 Tot
Slide 24: Loan and Credit Composition
Loan and Credit Composition 23 ($ in Millions) Balance % Balance % $ % Hawaii Portfolio Residential Mortgage $1,217 34% $1,134 35% $83 7% Home Equity 361 10% 302 9% 59 20% Commercial Mortgage 768 22% 643 20% 125 19% Commercial & Ind/Leasing 374 11% 341 11% 33 10% Construction 98 3% 82 3% 16 20% Auto
Slide 25: Stable Net Interest Margin
Stable Net Interest Margin 24 NIM has been stable around 3.30% for the last 3 years. Expect NIM to be in the 3.20 t0 3.40% 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 yield
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