CPB earnings jump 14.5%

The bank’s assets passed $2 billion
for the first time in 2002

By Dave Segal

CPB Inc., capping off a record year of earnings, posted a 14.5 percent jump in fourth-quarter net income as total assets surpassed the $2 billion mark for the first time.

The parent of Central Pacific Bank, which switched to the New York Stock Exchange from the Nasdaq Stock Market on Dec. 31, also saw its stock have a banner year as it soared 86.7 percent to outperform all other Hawaii companies.

"We had a very strong quarter and a very strong year that set a very solid foundation for us to build from," Clint Arnoldus, the chairman, president and chief executive officer of CPB, said today. "We had great success in increasing our market share. We were successful in changing the public perception of the bank so that they understand us better. We also were very successful in the (stock) market with our bank."

Net income in the final three months was $10.2 million, or 62 cents a share, compared with $8.9 million, or 55 cents a share, a year earlier. Revenues rose 12 percent to $27.6 million from $24.6 million.


For the year, CPB's net income increased 16 percent to a record $33.3 million, or $2.04 a share, from $28.7 million, or $1.72 a share, a year earlier. Earnings-per-share growth was 19 percent.

Arnoldus said he expects modest growth this year but sees CPB continuing to outpace the Hawaii economy.

"Even modest growth is very healthy," Arnoldus said. "I think we'll do better than the 2 percent growth forecast by economists primarily because we're growing our market share ... We're looking at eight to 10 percent growth in our loans and deposits and 10 to 12 percent growth in earnings per share."

Total assets in 2002 grew to $2.03 billion, a 10 percent increase from $1.84 billion a year earlier. Total loans rose to $1.29 billion, a 2 percent gain from $1.27 billion on Dec. 31, 2001 as an increase in commercial loans offset an interest-rate-induced decline in residential mortgage loans. And total deposits increased to $1.64 billion, a 13 percent gain over $1.45 billion a year earlier. Noninterest-bearing deposits increased 28 percent to $305.4 million and accounted for 19 percent of total deposits.

In the fourth quarter, net interest income, or the difference between interest earned on loans and investments minus interest paid on deposits, increased 8 percent before the loan loss provision to $22.7 million from the year-ago period. The net interest margin remained stable at 5.06 percent compared with 5.05 percent a year earlier.

CPB, which will be releasing a new television commercial on Super Bowl weekend starring its "fiercely loyal" dog Alex, also will be ringing the closing bell at the NYSE on Jan. 29.

"I think it will be a great event for Hawaii, not just for our bank," Arnoldus said. "Our bank is going to make it very Hawaiian. We'll be wearing aloha shirts and passing out flower leis and doing everything we can to make it a unique event. We hope the CNBC (financial network) reporters will wear the leis all day that we're sending them to call attention to the closing bell. I think it will be very positive to see one of the Hawaii companies moving over to the exchange and getting that recognition for us."

CPB is now one of just four Hawaii companies trading on the NYSE. The others are Bank of Hawaii Corp., Hawaiian Electric Industries Inc. and ML Macadamia Orchards LP.

Central Pacific Bank

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