CPB parent’s
earnings rise 5.3%

Reduced loan losses is one
of the factors cited for
the increase

By Russ Lynch
Star-Bulletin

Central Pacific Bank's parent CPB Inc. cut its bad loans nearly in half, helping the company record a 5.3 percent increase in second-quarter profit.

CPB today reported a net income of $3.98 million for the quarter ending June 30, up from $3.78 million in the year-earlier period.

Per-share profit was up by a higher percentage than the overall net income, 13.9 percent, because a stock buy-back had lowered the number of shares outstanding. The profit was 41 cents a share in the latest quarter, up from the year-earlier 36 cents.

CPB also raised its second-quarter dividend to 14 cents, from 13 cents last year, a 7.7 percent increase.

The bank-holding company reduced its second-quarter nonperforming loans by 46.7 percent to $10.5 million as of June 30, from $19.7 million a year earlier. Loans delinquent 90 days or more were down 54 percent at $3.1 million, from $6.8 million. The company cut its provision for loan losses by 37.8 percent to $700,000, from $1.1 million a year ago.

Its net interest margin -- the difference between what it paid to attract deposits and what it earned on the money -- rose to 4.68 percent from 4.62 percent. The result was a second-quarter net interest income of $16.3 million, up 6.9 percent from $15.2 million in last year's quarter.

On June 30, CPB had assets of $1.58 billion, up 3.6 percent from $1.52 billion a year ago. Deposits of $1.26 billion were up 4.3 percent from $1.21 billion. Loans of $1.16 billion were up 10.2 percent from $1.06 billion.

Central Pacific Bank is the third-largest commercial bank in Hawaii, behind Bank of Hawaii and First Hawaiian, and has 27 branches in the state.