By Frank Cho
Advertiser Staff Writer
CB Bancshares Inc., the parent company of City Bank, said its fourth-quarter profit from operations rose 23.2 percent for the quarter, reflecting more fee income and fewer expenses.
Excluding a one-time merger and restructuring-related charge in the fourth quarter of 1999, the Honolulu-based bank holding company recorded earnings of $3 million, or 95 cents a share last year, compared to $2.5 million, or 74 cents a share, in the same period in 1999.
When $9 million in one-time charges related to the merging of its International Savings and Loan Association subsidiary and write-off of goodwill are included, CB Bancshares reported a loss of $6.3 million, or $1.92 a share, in the final three months of 1999.
"Thanks to the loan and deposit growth, along with continued improvement in efficiency, we achieved the highest earnings in our history," said Ronald Migita, CB Bancshares’ president and chief executive officer, referring to the company’s financial performance last year.
The company’s stock price fell 25 cents yesterday to close at $30.25 in lighter-than-normal trading before the earnings report was released.
A string of interest rate hikes by the Federal Reserve last year increased the bank’s cost of funds and hurt interest income. Net interest income fell 2.6 percent in the fourth quarter to $14.6 million from just under $15 million a year ago.
Non-interest income rose 19.5 percent to $2.9 million from $2.4 million in 1999, helped by a $239,000 gain from increased fees and other service charges, a $132,000 profit from the sale of real estate, and $108,000 from the increased cash value of life insurance on certain bank officers.
For the year ended Dec. 31, operating profits were $11.2 million, or $3.49 a share, compared to $9.1 million in 1999.
Annual net interest income rose 4.2 percent to $61 million, before provision for credit losses, compared to $53.5 million a year earlier. Non-interest income was $10 million over the same period, a $2.9 million decrease.
Non-interest expenses fell 5.8 percent, or $2.9 million last year. That helped improve the company’s efficiency rate to 64.89 percent.
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