Central Pacific Bank posted nearly double-digit loan growth and higher net interest income in the third quarter but saw its earnings dip 4.2% due to various expenses.
The parent of the state’s fourth-largest bank, Central Pacific Financial Corp., reported before the market opened today that the bank’s profit fell to $14.6 million, or 51 cents a share. Despite the lower earnings, it still beat analysts’ estimates by 2 cents a share. In the year-earlier period, the bank earned $15.2 million, or 52 cents a share.
Central Pacific’s loans jumped 9.8% to $4.37B. Its overall deposits rose 0.7% to $5.04B while its core deposits, which include savings and money market deposits, and time deposits less than $100,000, rose 3.5%.
In an environment when banks’ margins nationwide have been squeezed by lower interest rates, Central Pacific boosted its net interest income — the difference between what it collects on loans and what it pays for deposits — by 5.4% to $45.6M from the year-earlier period. Its net interest margin rose 10 basis points to 3.30%.
The bank’s earnings were impacted by $1.2 million in expenses for RISE2020, which is the company’s new $40 million modernization plan to upgrade technology and facilities. Also, the bank incurred an expense for setting aside $1.5 million as a loan-loss provision. That compares to a loan-loss credit that the bank recognized in the third quarter of 2018 by returning $600,000 to its income statement that previously had been set aside for potential loan losses.