Central Pacific Financial Corp.'s stock lost more than 20 percent of its value yesterday as it continued to free-fall on the heels of last week's announcement that it lost $183.1 million in the third quarter and that it was anticipating enforcement action to be taken against it by federal and state regulators due to the bank's financial condition.

The parent of Central Pacific Bank received more bad news after the market closed. Fitch Ratings downgraded the long-term issuer default rating of the bank to “;CCC”; from “;B,”; and Standard & Poor's said, effective Monday, it will replace Central Pacific in the SmallCap 600 Index with Compellent Technologies Inc., a network storage solution provider.

Bank officials did not return calls yesterday for comment.

Central Pacific's shares have given up more than half their value since the bank said Thursday its commercial real estate portfolio in the California and Hawaii markets continues to deteriorate and that it expects the economic conditions to persist through the coming quarters. The company also said it expects to enter into a formal agreement with the Federal Deposit Insurance Corp. and the Hawaii Division of Financial Institutions over the bank's need to address its asset quality, capital needs and liquidity.

Fitch said the downgrade of the bank's rating reflects the significant escalation of credit problems both in its California and Hawaii loan portfolios.

“;While Fitch expected the company to endure increased credit stress in its Hawaii portfolio, as well as in its still-sizable exposure to California real estate, the recent level of deterioration exceeded Fitch's original projections,”; the agency said. “;Credit deterioration, which is not expected to abate in the near term, has generated sizable losses and caused considerable erosion to the bank's capital position.

“;Fitch believes that the company will continue to generate material losses, which will continue to erode capital and reduce the benefit of any potential capital augmentation.”;

Central Pacific Chairman and Chief Executive Officer Ron Migita said Thursday the bank is exploring all options to raise additional capital, including a public offering and selling shares to private-equity investors.

“;We're raising capital to meet the challenge in a difficult economic climate so we can navigate through this downturn and emerge as a stronger bank when the economy recovers,”; Migita said. “;We think things on the mainland appear to be stabilizing somewhat, but the Hawaii economy traditionally has lagged the mainland, so until such time that the (Hawaii) unemployment level stops increasing (7.2 percent in September) and jobs are being created, I think we're going to be in for some challenging times here in Hawaii.”;

But Fitch said that the prospects for raising sufficient equity from external sources to absorb expected losses and meet enhanced regulatory capital requirements are limited.

Fitch said the bank is now in violation of existing regulatory agreements, which call for the bank to maintain enhanced capital levels that exceed the minimum regulatory requirements to be considered “;well capitalized.”; Fitch said the bank no longer is maintaining a leverage ratio of 9 percent.

S&P, meanwhile, said it was replacing Central Pacific in the index because the company's market share had fallen below the minimum market capitalization of $35 million to remain in the index. The market cap necessary to be added to the index is currently $200 million.

Central Pacific's stock fell 21.3 percent, or 30 cents, to $1.11 yesterday on the New York Stock Exchange after trading as low as $1.04. Its market cap is now $31.9 million.

Analyst Joseph Gladue of B. Riley also cut his rating on the stock to “;neutral”; from “;buy”; and lowered his target price to $1.50 from $3.50, while analyst Robert Bohlen of Keefe, Bruyette and Wood maintained his rating on the stock at “;market perform”; but lowered his target price to $1 from $1.90.