Central Pacific says it's seeking investors
By Rick Daysog
Advertiser Staff Writer
The parent of Central Pacific Bank said it is in discussions with outside investors to acquire a stake in the local bank.
The disclosure by Central Pacific Financial Corp. comes as the company reported a record loss of $292.8 million for 2009.
"Currently, we are in discussions with potential investors," said company Chairman and CEO Ronald Migita.
"We are exploring all capital-raising options, including private equity placements and public offerings."
Central Pacific declined to identify the potential investors.
Shares of Central Pacific slipped 2 cents yesterday to close at $1.62 on the New York Stock Exchange.
Central Pacific, one of the state's largest financial institutions, has been hard-hit by the real estate downturn in California.
Last year, the bank received $135 million of Troubled Asset Relief Program funding.
Despite the additional capital, Central Pacific continued to lose money, forcing the company to enter into a consent agreement in December with the Federal Deposit Insurance Corp. and the state Division of Financial Institutions.
The deal requires the company to increase its capital position and improve its asset quality.
For the fourth quarter, Central Pacific said it lost $77.8 million, or about $2.64 per share.
That compared with a net profit of $3.2 million, or 11 cents per share in the year-earlier period.
The company reported a record loss of $183.1 million, or $6.38 per share, during the third quarter of 2009 as it took charges related to troubled loans made to Mainland and Hawai'i commercial real estate borrowers.
The bank said its total assets at the end of the fourth quarter were down about 9 percent to $4.9 billion while loans and leases declined 22.5 percent to $3.1 billion.
Deposits were off 7.6 percent to $3.6 billon.
During the quarter, Central Pacific said it sold $204.4 million worth of California and Hawai'i commercial real estate loans and closed two of its California offices, one in Pasadena and the other in Roseville.
The company said it plans to consolidate two of its Honolulu branches with nearby offices. Its 1600 Kapi'olani Blvd. office will be folded into its Ke'eaumoku branch, while the bank's Bethel Street location in Downtown Honolulu will be consolidated into its main branch at 220 S. King St.
No Hawai'i employees were terminated as a result of the branch closings.