CPB posts 10th
record quarter

Central Pacific Bank parent's
earnings jump 74 percent

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By Dave Segal
dsegal@starbulletin.com

CPB Inc., showing little sign of slowing despite the economic slump, posted a 73.6 percent jump in fourth-quarter net income and recorded its 10th straight quarter with record earnings.

The parent of Central Pacific Bank, which earlier this month announced a change in top management due to pending retirements, said it had net income of $8.88 million, or $1.12 a share, compared with $5.12 million, or 59 cents a share, in the last quarter of 2000. The 2001 earnings included a federal income tax benefit of $1.6 million.

Without the benefit, the bank holding company's earnings rose $7.28 million, or 92 cents a share, which represented a 42.3 percent gain from the same quarter a year earlier.

CPB, which is Hawaii's third-largest commercial bank, is preparing for a major transition as Clinton L. Arnoldus, the former chairman, president and chief executive of Pasadena, Calif.-based Community Bank, takes over those roles for CPB at the April shareholders meeting.

Arnoldus, who currently is serving as president and chief operating officer at CPB, will succeed Joichi Saito as chairman and CEO when Saito retires. Naoaki Shibuya, the former president who moved to vice chairman when Arnoldus came on board, also is retiring.

CPB, which announced its earnings after the market closed yesterday, said that total assets increased 1.1 percent to $1.84 billion from $1.82 billion and total deposits grew 6.4 percent to $1.45 billion from $1.36 billion but that net loans slipped 1.9 percent to $1.24 billion from $1.27 billion.

The company, which on Sept. 17 approved a sixth buyback program to repurchase 3.5 percent, or approximately 290,000 shares, of its 8.2 million shares of common stock outstanding, saw its earnings per share jump as the number of available shares of stock decreased 6.3 percent. Earnings per share rose 89.8 percent counting the tax benefit and increased 55.9 percent without it.

CPB also said that nonperforming assets, loans delinquent for 90 days or more and restructured loans, decreased by 70.1 percent in the quarter, to $3.6 million from $12.3 million a year earlier. The company's provision for loan losses fell 70 percent to $300,000 from $1 million.

For the year, CPB said net income rose 47.7 percent to a record $28.7 million from $19.4 million in the previous year while earnings per share jumped 60.6 percent to $3.50 from $2.18.

Saito cited improving efficiencies at all levels for the bank's continued string of record numbers.

"Our performance for the year is reflected in key financial benchmarks such as our efficiency ratio of 55 percent and our return on equity of 19 percent," he said.

CPB's stock rose 90 cents, or 2.9 percent, to $32 today on the Nasdaq. The stock has gained 8.8 percent this year.