Profits rose to $8.3 million, or 51 cents per share, from $7.9 million, or 48 cents per share, in the same three-month period last year.

The Hawai'i-based parent of Central Pacific Bank said lower interest rates hurt profits, but that earnings benefitted from a borrower paying a one-time $1.3 million loan prepayment penalty.

Expenses associated with the company's ongoing hostile takeover attempt of rival City Bank parent CB Bancshares Inc. totaled $617,000 in the quarter. In the second quarter, Central Pacific took a $620,000 charge for advertising related to the acquisition bid, which was announced in April. The bank has previously said it will capitalize, or absorb, other expenses related to the merger such as legal fees.

The company said in its earnings release yesterday that it remains committed to the acquisition, which is being fought over by both banks in court. Central Pacific also said it is proceeding with efforts to secure necessary regulatory approvals for the takeover.

Total deposits grew to $1.73 billion, an 8 percent increase over $1.61 billion in the third quarter of last year.

Total assets increased by 8 percent from $1.98 billion in the third quarter of 2002, to $2.13 billion in the quarter ended Sept. 30.

"The company continued to perform well in a challenging interest rate environment," said Clint Arnoldus, company chairman, president and chief executive officer.

Neal Kanda, Central Pacific chief financial officer, said the company expects more loan growth in the fourth quarter and earnings per share of $2.05 to $2.07, which would mean fourth-quarter earnings of 53 cents to 55 cents per share.

Shares of Central Pacific stock closed yesterday at $24.65, down 37 cents after the earnings announcement. Company earnings were in line with analyst estimates.