The Honolulu bank holding company's profit from operations for the three months ended Sept. 30 rose to $3.7 million, or 92 cents a share, from $3.3 million, or 85 cents, in the same year-earlier quarter.

The company, however, took charges related to certain investments of $951,000 in the just-ended quarter, and $4 million in the same year-ago period. When the charges are included, the company reported net income of $2.7 million, or 69 cents a share, compared with a net loss of $676,000, or 18 cents a share, from the same quarter in 2001.

CB Bancshares is Hawai'i's fourth-largest bank holding company and has been working to reduce its costs while increasing fee income from financial services.

Because of the low interest-rate environment, CB Bancshares has steadily been reducing its exposure to fixed-rate, long-term assets such as real-estate loans and replacing short-term deposits with longer-term deposits and borrowings.

For the first nine months of 2002, CB Bancshares said operating profits surged to $10.8 million, or $2.75 a share, up 17.2 percent from $9.2 million, or $2.37 a share, in the same period a year ago.

Net interest income rose to $19.2 million during the quarter and $57.7 million for the nine months that ended Sept. 30, up 1.1 percent and 11 percent, respectively. Net interest margins increased to 5.27 percent, up 91 basis points from the same period in 2001.

During the quarter, the company received regulatory approval to open its first branch on Kaua'i. The branch will open in November and be the company's first in-store branch.

CB Bancshares said noninterest income for the third quarter was $3 million, down $9,000, or 0.3 percent. For nine months, noninterest income rose $1.5 million to $10.7 million, an increase of 16.5 percent from a year ago on increased revenues from service fees.

CB Bancshares reported total assets of $1.6 billion as of Sept. 30, down 5 percent from the same quarter a year ago. Loans were $1.1 billion, down 13.3 percent, and deposits were $1.1 billion, down 2.9 percent from a year ago.

Nonperforming loans and nonperforming assets, a growing concern in the banking industry nationally, were $15.3 million and $16.7 million, respectively, representing declines of 9.8 percent and 18.6 percent. The bank said the decrease in nonperforming assets was largely because of $2 million in commercial loans and $2.2 million in other real estate owned.