Shares of Central Pacific Bank's parent company fell 36 percent after the company posted a record loss for the third quarter.

For more than two years, Central Pacific Financial Corp. has struggled with troubled commercial loans on the Mainland.

Yesterday, the company posted a net operating loss of $71.7 million, or $2.54 per share, during the three months ending Sept. 30 due in part to increased problem commercial loans in Hawaii.

Central Pacific also recorded two noncash charges totaling $111.4 million — one for goodwill impairment and another for a tax valuation allowance — that increased the company's third quarter net loss to $183.1 million.

The quarterly loss tops the company's previous record of $52 million in the second quarter 2008.

"Our quarterly results continue to be adversely affected by increased credit costs resulting from further deterioration in the Hawaii and California commercial markets and the resultant decline in property values in those sectors," said Ronald Migita, Central Pacific's CEO.

"We continue to expect these challenging economic conditions to persist over the coming quarters and to result in further credit deterioration."

Shares of Central Pacific fell 83 cents or 36 percent to close at $1.52 on the New York Stock Exchange yesterday. The stock rose about 7 cents to $1.59 in after hours trading yesterday.

As of Sept. 30, the bank listed assets of $5.2 billion, which was down 6 percent from the year-earlier period. Deposits were up 2.2 percent to nearly $3.9 billion while net loans and leases dropped 18.3 percent to nearly $3.3 billion.

During the quarter, the company said it issued $334 million in new residential mortgage loans. Year-to-date, the bank originated $1.5 billion in new mortgages in Hawaii.

Central Pacific said it took a $103.7 million charge during the quarter due largely to troubled loans to Mainland and Hawaii commercial real estate borrowers.

The company said its $50 million goodwill impairment write-down is the result of the decline in the company's market capitalization, which now stands at $43.7 million.

The goodwill impairment charge has no impact on Central Pacific's regulatory capital, tangible equity or cash flows, the company said.

The company also disclosed the bank is the subject of a formal enforcement action by the Federal Deposit Insurance Corp. and Hawaii's banking regulators. Central Pacific said it expects to consent to the regulators' enforcement action, which will require the bank to strengthen its capital, improve asset quality and maintain liquidity consistent with its near-term strategy.

The bank said it intends to comply with the requirements and has already implemented a number of measures toward that end.