City Bank parent's profits up 171 percent
By Deborah Adamson
Advertiser Staff Writer
The parent of City Bank, which is scheduled to merge with Central Pacific Financial Corp. later this year, reported a 171 percent increase in its net income for the second quarter from a year ago, the company's best showing ever.
CB Bancshares, which reported quarterly results yesterday for the last time as an independent company, earned $11.8 million, or $2.63 a diluted share, compared with $4.36 million, or 99 cents, in the year-ago quarter. The company said most of the gain was from one-time items, which if excluded would have left the bank with a 27 percent increase in earnings per share.
Revenue net interest income plus non-interest income climbed 35 percent to $34.8 million.
Total assets soared to a record $1.9 billion in the quarter, up 11 percent from a year ago.
"We're extremely pleased with the second quarter results," said Chief Financial Officer Dean Hirata, who will assume the same position at Central Pacific Financial once the merger of the two banks is completed in September. "The growth in loans and core deposits that we saw in the second quarter as well as the first six months of the year, we expect to remain strong."
Net interest income rose by 6.5 percent to $20.5 million. Noninterest income soared by 122 percent to $14.3 million.
Service charges, fees and investments contribute to noninterest income. Included is a net realized gain of $2.9 million from the sale of securities, $4 million from the settlement of an undisclosed lawsuit and $2.7 million from the sale of commercial real estate the bank foreclosed upon.
Excluding certain one-time items, earnings per share would have been $2.07 compared with $1.63 a share a year ago, also an adjusted figure.
Hirata said the quality of loans continued to improve, leading to a smaller provision for losses. Nonperforming loans fell by 60 percent to $4.2 million as the Hawai'i real estate market strengthened. Provision for credit losses dipped 9 percent to $500,000 in the quarter.
Noninterest expenses fell 12.7 percent to $16.3 million, mainly from a decline in merger-related costs.
For the six months ended June 30, the bank earned $21.6 million, up 60 percent from a year ago. Earnings per share soared by 153 percent to $4.84. Revenue came to $63.5 million, up 28 percent to $49.5 million.
Shares of CB Bancshares fell by $1.92 to $90.24 yesterday. The earnings report was released after the market's close.
Reach Deborah Adamson at email@example.com or 525-8088.