Central Pacific Bank’s earnings soared 28.6 percent in the third quarter as loans increased nearly double digits and tax expenses declined due to the new federal law.
The holding company of the state’s fourth-largest bank was scheduled to announce before the market opened today that net income for the third quarter rose to $15.2 million, or 52 cents a share, from $11.8 million, or 39 cents a share, in the year-earlier period. Loans rose 9.4 percent to $4 billion.
It was “another quarter of solid financial performance highlighted by strong loan growth and improved efficiency,” said Paul Yonamine, who took over as chairman and CEO of holding company Central Pacific Financial Corp. on Oct. 1.
The bank’s income tax expense fell to $4.9 million last quarter from $6.4 million in the year-ago quarter by virtue of an effective tax rate of 24.3 percent compared with 35 percent in the year-ago quarter.
Central Pacific continued reducing its nonperforming assets, which had swelled to $496 million in March 2010 in the wake of the California real estate meltdown. The bank’s nonperforming assets, essentially delinquent loans not accruing interest and foreclosed real estate, dropped 49.3 percent last quarter to $3 million from $6 million in the year-earlier period.
“The continued improvement in the efficiency ratio (a 3 percent change) is reflective of the execution of our strategic initiatives and the continued great work of our employees,” said Catherine Ngo, the former chairwoman and CEO of Central Pacific Financial Corp. who is continuing to serve as president of the holding company as well as president and CEO of the bank.
Central Pacific’s stock closed Tuesday unchanged at a 52-week low of $24.53.