Central Pacific Bank’s net income more than tripled in the fourth quarter amid strong loan growth and a one-time $7.4 million tax expense that cut into earnings a year ago.
The parent company of the state’s fourth-largest bank was scheduled to announce before the market opened today that net income increased to $15.8 million, or 54 cents a share, from $4.3 million, or 14 cents a share, in the year-earlier period. Without the one-time expense, Central Pacific Financial Corp.’s net income for the quarter still was up 35.1 percent, or $4.1 million.
Loans jumped 8.2 per- cent to $4.08 billion from $3.78 billion.
“We had a strong end to the year with significant loan growth and both ROA (return on assets) and ROE (return on equity) improvements,” said Paul Yonamine, chairman and CEO of the parent company. “We plan to carry this momentum into 2019 as we drive forward our strategic initiatives to continue to enhance shareholder value.”
The return on assets measured how much of a profit Central Pacific was able to generate from its assets, while the return on equity measured how it used reinvested earnings to generate additional earnings.
Central Pacific’s $7.4 million noncash expense in the first quarter of 2017 was the result of reductions it took on the value of future tax credits to bring it into compliance with the new lower corporate tax rate. That tax rate went into effect at the start of last year and reduced the federal corporate tax rate to 21 percent from 35 percent.
The bank continued reducing its nonperforming assets, which had swelled to $496 million in March 2010 in the wake of the California real estate meltdown. Central Pacific’s nonperforming assets, essentially delinquent loans not accruing interest and foreclosed real estate, declined 24.5 percent last quarter to $2.7 million from $3.6 million in the year-earlier period.
“Strong loan growth has been a consistent driver of our performance throughout the year while our asset quality remained strong,” Central Pacific President Catherine Ngo said.
Central Pacific’s stock rose 35 cents Tuesday to close at $27.06.
FOURTH-QUARTER NET
$15.8 million
YEAR-EARLIER NET
$4.3 million
