Central Pacific net rises 4.1%
Central Pacific Financial Corp. said yesterday its net income rose 4.1 percent in the first quarter but that it was lowering its full-year guidance due to flattening deposit activity.
The state's fourth-largest bank in terms of assets posted earnings of $20.1 million, or 65 cents a share, compared with $19.3 million, or 63 cents a share, a year earlier. Analysts were looking for 66 cents a share.
Revenue rose 0.8 percent to $64.8 million from $64.4 million.
The parent of Central Pacific Bank said it was reducing its earnings per share for 2007 to a range of $2.75 to $2.85, down from the $2.80 to $2.90 range that it forecast three months ago.
"The guidance we gave at the fourth-quarter earnings call was based on certain assumptions for both loan growth and deposit growth," Chief Financial Officer Dean Hirata said. "Deposit growth was virtually flat this quarter from the fourth quarter."
Net interest income, the difference between what the bank pays depositors and what it brings in from loans, rose 2.9 percent to $53.7 million from $52.2 million. Net interest margin was 4.52 percent compared with 4.64 percent a year ago.
Noninterest income, which includes services and fees, fell 8.3 percent to $11.2 million from $12.2 million.
Total assets rose 4.9 percent to $5.5 billion from $5.2 billion a year ago. Total deposits grew 4.5 percent to $3.8 billion from $3.7 billion but were up just $1.1 million from the fourth quarter. And total loans and leases rose 7.8 percent to $3.9 billion from $3.6 billion, with mainland loan production offices accounting for 70 percent of the loan growth and Hawaii operations accounting for the remaining 30 percent.
The bank's provision for loan and lease losses in the quarter was $2.6 million compared with $525,000 a year earlier, largely due to a commercial loan charge-off of $2.9 million from a single unidentified borrower. Net loan charge-offs in the quarter were $4.3 million compared with $405,000 a year ago.
"We feel we did have a solid quarter in a challenging interest-rate environment," Hirata said. "We continue to have solid asset quality and we're very excited about our new deposit delivery system, Remote Deposit Central, (that allows customers to deposit checks from their office or home)."
Nonperforming assets decreased to a three-year low of $1.6 million, or 0.03 percent of total assets, compared with $6.1 million, or 0.12 percent, a year earlier.