Central Pacific Bank, benefiting from the new federal tax law and strong loan growth, posted a 9.2 percent increase in earnings and raised its dividend for the second consecutive quarter.
The parent of the state’s fourth-largest bank was scheduled to announce before the market opened today that net income for the first quarter rose to $14.3 million, or 48 cents a share, from $13.1 million, or 42 cents a share, in the year-earlier period.
Central Pacific Financial Corp. also boosted its dividend by 2 cents, to 21 cents a share. It will be payable June 15 to shareholders of record at the close of business May 31. In the previous quarter the bank raised its dividend by a penny a share.
| FIRST-QUARTER NET
$14.3 million
YEAR-EARLIER NET
$13.1 million
|
“(It was) another solid quarter of net income driven primarily by continued loan and deposit growth,” Central Pacific President and CEO Catherine Ngo said in a statement. “Our earnings and strong capital position have allowed our company to increase our quarterly cash dividend and continue executing on our stock repurchase plan.”
The bank repurchased $10.1 million worth of its shares at an average cost of $29.36 per share during the quarter. Central Pacific’s stock rose 64 cents to $31.02 Tuesday.
Central Pacific, like other banks locally and nationwide, benefited from the Tax Cuts and Jobs Act, which went into effect Jan. 1 and reduced the federal corporate tax rate to 21 percent from 35 percent. In the first quarter Central Pacific’s effective tax rate was 20.5 percent compared with 34.2 percent in the year-earlier period. The bank said it recorded income tax expense of $3.7 million last quarter compared with $6.8 million in the year-ago period.
During the quarter the bank’s loans rose 7.6 percent to $3.8 billion, primarily on the strength of its Hawaii portfolio. Deposits rose 4.2 percent to $5 billion, and assets rose 3.8 percent to $5.7 billion.
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, plunged 61.1 percent last quarter to $3.4 million from $8.8 million in the year-earlier period.
