Central Pacific Financial (CPF) in Honolulu reported a jump in first-quarter profit as its asset quality improved and it recorded a tax benefit worth nearly $120 million.

The $4.6 billion-asset company said Friday that it made a first-quarter profit of $137.3 million, of which $119.8 million was due to a non-cash tax benefit it recorded from a pool of deferred tax assets established in 2009. Excluding this tax gain, Central Pacific earned a quarterly profit of$17.5 million, 30% higher than in the first quarter of 2012.

Net interest income ticked up less than 1%, to $30.7 million. Central Pacific's loan portfolio grew 9%, to $2.3 billion, but net interest margin tightened by 16 basis points, to 3.06%.

Central Pacific recorded a $6.6 million credit for loan losses, compared to a credit of $5 million in the year-prior period, as its credit-risk profile improved. Net chargeoffs rose 10%, to $3 million. Nonperforming assets fell 45%, to $118 million.

Noninterest income fell 6%, to $12.5 million, as rental income from foreclosed properties fell by $1.3 million and revenue from service charges on deposit accounts dropped by $700,000. Noninterest expense fell 9%, to $32.2 million, as legal and professional fees fell by $1.7 million and provision for mortgage repurchases dropped by $1.3 million.

The Federal Reserve Board lifted an enforcement action against Central Pacific in February.

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