Tuesday, January 19, 1999

CPB earnings
fall 2.3% after
loan losses

The Central Pacific Bank's
parent had to set aside
more cash

By Russ Lynch


After setting aside $1.2 million to cover loan losses in the final months of 1998, Central Pacific Bank parent CPB Inc. reported a 2.3 percent dip in its fourth quarter net income.

The company today reported a profit for the latest quarter of $3.8 million, or 38 cents a share, down from $3.9 million, or 37 cents a share, in the fourth quarter of 1997.

Info Box The lower profit came after a $1.2 million provision for loan losses during the quarter, a 60 percent increase from a $750,000 provision for loan losses in the last quarter of 1997.

For the full year, CPB reported an 0.7 percent profit increase, to $15.1 million, vs. $15 million for 1997. Per-share income was $1.46 for 1998, up 2.8 percent from $1.42 in 1997.

The per-share percentage increase was higher than the net profit percentage increase because the bank holding company had fewer shares outstanding, due to a stock buy-back.

Joichi Saito, board chairman and chief executive, said in a statement that the company was pleased with the full-year profit increase despite the continuing sluggishness in Hawaii's economy.

During the year, the bank reduced its nonperforming assets and delinquent loans by 44.6 percent, to $19.4 million at year end compared with $35.1 million at the end of 1997.

During the year, the bank added one supermarket branch, at the Kaheka Street Daiei supermarket, bringing its total of store branches to eight. CPB last year bought back 837,000 of its 10.6 million shares of common stock and has the approval of its directors to buy about another 200,000 of its shares, depending on market conditions. In July, the bank upgraded its computer system, a major step in making sure that its systems are Year 2000 compliant. In September, the bank sold its credit card portfolio, for a gain of $4.5 million.

CPB ended the year with assets of $1.6 billion, up 4.3 percent from $1.5 billion at the end of 1997. Deposits of $1.3 billion were up 6.4 percent from $1.2 billion and loans at year-end were up 6.3 percent at $1.09 billion, from $1.02 billion at the end of 1997.

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