City Bank parent's profits soar
By Deborah Adamson
Advertiser Staff Writer
The parent of City Bank said today that first-quarter profits more than doubled as revenue rose and the quality of loans improved.
First quarter ended March 31
"Higher profit results were due to improved credit quality, which resulted in a lower provision for credit losses, and an increase in loan volume and production," said Wayne Miyao, a spokesman for City Bank.
CB Bancshares
CB Bancshares reported a net income of $9.8 million, or $2.21 a diluted share, in the quarter ended March 31 compared with profits of $3.97 million, or 92 cents a share, in the same period a year ago.
But excluding a $1.43 million one-time gain and $235,000 in expenses related to fighting a hostile takeover bid by Central Pacific Financial, the bank had profits of $8.6 million, or $1.94 a share, in the just-concluded quarter. There were no similar expenses in the year-ago quarter.
Total operating revenue — comprising net interest income and noninterest income — was $28.7 million, up 20 percent from last year's $23.8 million.
Total assets rose by 13 percent to $1.9 billion, deposits increased by 14 percent to $1.3 billion and loan volume went up by 16.6 percent to $1.3 billion. The provision for credit losses fell by 88 percent to $500,000 in the quarter as asset quality improved.
City Bank's profit performance is central to its contention that Central Pacific's offer to purchase the company falls short of its true worth.
In March, Central Pacific raised its offer price for the second time to roughly a third higher than its original bid.
Central Pacific has given City Bank until Thursday to consider its latest offer, and start or schedule merger negotiations. If not, Central Pacific has said it's prepared to quit the deal.
"Yes, we will walk away and go about our business," said Wayne Kirihara, senior vice president of marketing and product management. "We're serious about what we said."
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
