Posted on: Friday, April 20, 2001

CB Bankshares' profits up 15%; loans worrisome

By Frank Cho
Advertiser Staff Writer

CB Bancshares Inc., the parent company of City Bank, said yesterday that first-quarter earnings surged 15.1 percent, reflecting increased revenue from fees and the sale of securities.

The state's No. 4 bank-holding company in terms of assets said net income for the quarter ended March 31 rose to $2.8 million, or 83 cents a share, from $2.4 million, or 75 cents, in the year-earlier period.

But increasing problem loans are affecting the company's financial performance. Nonperforming loans jumped 32.9 percent in the first quarter, to $17.4 million from $13.1 million in the same year-ago period.

Other nonperforming assets and real estate rose 6.7 percent to $20.1 million, from $18.6 million a year ago.

"The increase in nonperforming loans was primarily due to an increase in the commercial category," the company said in a statement today. CB Bancshares raised its provision for credit losses 47.4 percent to $2.8 million, up from $1.9 million in the same quarter last year.

"The increase in the provision for credit losses was primarily related to the increase in charge-offs and nonperforming loans," the company said. It also said future levels of credit losses will directly reflect the state's economic performance in the months ahead.

CB Bancshares released its earnings just before the end of the trading day in New York yesterday. Its stock price closed up slightly at $36.60, a 52-week high. Trading totaled 200 shares, far below its daily average of about 1,400 shares.

When a one-time gain of $480,000 recovered from a nonperforming loan is excluded, net interest income rose 6.9 percent to $15.8 million in the first three months of 2001 from the same period last year.

The company said loans outstanding rose 9.1 percent to $109.4 million, helping it raise more interest income.