Central Pacific increases profit, raises dividend

Central Pacific Bank boosted its earnings 12.3% in the January-March period amid strong loan growth and announced it was increasing its dividend for the third time in the last six quarters.

The parent company of the state’s fourth-largest bank was scheduled to announce before the market opened today that net income increased to $16 million, or 55 cents a share, to beat analysts’ consensus estimate by 5 cents. A year earlier Central Pacific Financial Corp. earned $14.3 million, or 48 cents a share.

Loans jumped 7.5% to $4.1 billion on what the bank called “broad-based gains in every loan category.”

Central Pacific said it is raising its dividend by 2 cents a share to 23 cents. It will be payable June 17 to shareholders of record at the close of business May 31.

“We are pleased that our consistent earnings combined with solid asset quality and capital position has allowed us to increase our cash dividend,” Chairman and CEO Paul Yonamine said.

The bank’s net income benefited during the quarter from a $2.6 million gain on the sale of MasterCard Class B stock. That was partially offset by $1.3 million that Central Pacific set aside in reserve for potential loan losses.

“Our team continues to work on building customer relationships and we look forward to continuing to execute on our strategies during the rest of the year,” President Catherine Ngo said.

Deposits slipped 0.6% from the year-earlier period to $4.9 billion primarily due to a decrease in government certificates of deposit. Central Pacific said the reduction in the higher-interest-rate government time deposits was by design.

Total assets increased 3.4% to $5.8 billion.

The bank’s net interest income — the difference between how much Central Pacific pays for deposits compared with what it charges to lend out money — rose 6.6% to $45.1 million. Its net interest margin improved to 3.34% from 3.21% in the year-earlier quarter.

The bank’s noninterest income, which includes service charges and fees, jumped 30.4% to $11.7 million from $9 million primarily due to the MasterCard stock gain.

The bank reduced its nonperforming assets, essentially delinquent loans not accruing interest and foreclosed real estate, by 2.9% to $3.3 million.

Central Pacific’s stock rose 62 cents, or 2.1%, to $29.54 on Tuesday and is up 21.3% since the start of the year.

First-quarter net

$16 million

Year-earlier net

$14.3 million