Bank firm enjoys rise in profits
By Frank Cho
Advertiser Staff Writer
CB Bancshares Inc., parent company of City Bank, said second-quarter profits rose 13.4 percent, reflecting higher fee and interest income at the company's banking subsidiary and stabilization of the level of problem loans.
CB Bancshares, Honolulu's fourth-largest bank holding company in terms of assets, said net income for the three months ended June 30 rose to $3.1 million, or 89 cents a share, from $2.8 million, or 78 cents a share, in the same quarter a year ago.
"The increase in earnings reflect our lower cost of funds and increases in service charges and fees," said Dean Hirata, CB Bancshares' chief financial officer.
For the first six months of 2001, net income rose 14.2 percent to $5.9 million from $5.2 million during the same six-month period last year.
The company has benefited from falling interest rates, which have helped increase its net interest margins. City Bank's margin improved to 4.15 percent from 4.06 percent a year ago.
Net interest income jumped 10.1 percent last quarter to $17.2 million from $15.6 million in the same quarter a year ago, helped by the recovery of nearly a half-million dollars in interest on a single nonperforming commercial loan.
Fee income and gains from the sale of securities soared 24.1 percent during the second quarter to $3.1 million. Noninterest expenses rose 10.7 percent to $13.1 million from $11.8 million.
Nonperforming loans fell slightly during the three months that just ended to $17.4 million, a decrease of $18,000, or .01 percent, from a year ago. Nonperforming assets rose 1.4 percent to $20.4 million at the end of the second quarter.
The bank set aside $2.3 million for credit losses during the second quarter, a 21.1 percent increase from the $1.9 million it set aside during the same year-earlier period.
The company said it believes its level of nonperforming assets has stabilized and current provisioning is adequate.
