Posted on: Wednesday, January 26, 2005

Central Pacific's merger with City Bank boosts results

By Deborah Adamson
Advertiser Staff Writer

Central Pacific Financial reported a 44 percent increase in net income for the fourth quarter, its first full quarter of earning since merging with the parent of City Bank. But earnings per share dropped because of an increase in the number of shares.

The revenue growth and net income mostly resulted from the addition of City Bank's business to Central Pacific's operations.

Central Pacific paid $423.1 million for CB Bancshares, of which $88.9 million was in cash. The merger of the bank holding companies closed in September.

2004 vs. 2003

Fourth-quarter revenue: $55 million vs. $26.7 million

Fourth-quarter net income: $13.1 million vs. $9.1 million

Fourth-quarter earnings per share: 46 cents vs. 55 cents

2004 revenue: $142 million vs. $106 million

2004 net income: $37.4 million vs. $33.9 million

2004 earnings per share: $1.87 vs. $2.07

Total assets: $4.7 billion vs. $2.2 billion

Highlights

• Operating income, which excludes merger-related costs, rose 80 percent to $16.4 million, or 57 cents a share.

• Fourth-quarter net interest income rose 110 percent to $46.3 million from a year ago.

• Total loans increased by 115 percent to $3.1 billion.

• Total deposits up increased by 90 percent to $3.3 billion.

• Market capitalization rose to $1 billion from $483 million.

• Merger-related expenses were $6.3 million in 2004.

What they are saying

"We are pleased that we achieved strong operating performance in a transitional year for our company."

— Clint arnoldus | CEO

"A couple of things drove the numbers — the margin moved up a little bit and the company had relatively strong loan growth."

— Brett Rabatin | Analyst

What's next

• Bank subsidiaries — Central Pacific Bank and City Bank — will be combined over the Presidents Day weekend. Branches will reopen under the Central Pacific Bank banner on Feb. 22.

• Central Pacific reaffirmed 2005 earnings expectations of $2.50 to $2.60

• Expect further merger-related expenses to be incurred in future quarters, said Brett Rabatin, an analyst with FTN Midwest Research in Nashville.