CPB Inc., the state's third-largest commercial bank holding company, said net income for the quarter that ended March 31 rose to $7.5 million, or 93 cents per share, from $5.3 million, or 62 cents, in the same period a year ago. It was the company's eleventh consecutive quarter of record earnings.

"The strong quarterly results were achieved despite the events of Sept. 11, which adversely affected the state economy and loan growth," said Clint Arnoldus, the company's new chairman and chief executive officer.

Arnoldus, the former president of Pasadena, Calif.-based Community Bank, joined CPB in January as president. Today Arnoldus added chairman and CEO to his list of titles during the bank's annual shareholders' meeting, replacing Joichi Saito, who will continue on with the bank as an honorary chairman.

"I am confident that Clint's leadership and strategic vision, in concert with our management team, will allow the company to continue to grow and prosper," Saito said.

The Honolulu-based bank holding company was among many on Wall Street that benefitted during the quarter from declining interest rates.

The company's revenues grew 12 percent to $25.2 million, up from $22.6 million the same year-ago quarter. Interest expense declined 48 percent to $7.9 million from $15.3 million as money paid on deposits and debt declined. It was more than enough to offset 15 percent drop in interest income from the lower rates.

Fees on deposit accounts rose to $1.1 million, up 26.5 percent from $857,000 in the same period a year ago. Gains on the sale of securities totaled only $480,000 during the quarter, but that was up 133.3 percent from $180,000 a year ago.

Improving asset quality helped the company, with total nonperforming assets declining 45 percent to $3.9 million from $7.1 million a year. Provision for loan losses declined during the quarter to $300,000, down from $700,000 a year ago.

"Based on recent economic data from the state, as well as internal analysis of our loan portfolio, we believe that credit quality will remain relatively strong," said Neal Kanda, CPB's chief financial officer.

Total assets rose to $1.9 billion at the end of the quarter, up 5 percent from $1.8 billion a year ago. Loans grew to $1.3 billion, up 3 percent form $1.2 billion and deposits jumped 7 percent to $1.5 billion from $1.4 billion in the same year earlier period.