Central Pacific Financial Corp., which lost more than $364 million in 2009 and 2010, has now made money in three straight quarters as the Honolulu company continues to shed problem assets.
The $4.1 billion-asset Central Pacific said Friday that it earned $11.6 million in the third quarter, up 41% from the second quarter and a significant improvement over the $73 million it lost in last year's third quarter. Its earnings per share of 28 cents beat consensus analysts’ estimates by a dime.
John C. Dean, Central Pacific's president and chief executive, attributed the results to a sharp decrease in nonperforming assets that resulted in a credit to its loan-loss provision for the second straight quarter.
Nonperforming assets declined 10% from the second quarter, to $223.3 million, due to pay-downs and pay-offs totaling $27.5 million, sales of foreclosed properties totaling $9.8 million and chargeoffs equaling $5 million. Year over year its total nonperforming assets have fallen more than 41%.
"We are pleased to report our third consecutive profitable quarter and remain encouraged by the progress we are making in our recovery plan," Dean said in a news release.
Central Pacific's turnaround began late last year after it raised $375 million of fresh capital through a private placement and an agreement with the Treasury Department to convert preferred shares it issued under the Troubled Asset Relief Program to common stock. At Sept. 30, its total risk-based capital-to-assets ratio was 23.94%, compared to 8.57% at the same time last year.
The company said in its earnings announcement that it also reduced future interest expense by paying down $120.5 million of advances from the Federal Home Loan Bank of Seattle. The prepayment resulted in a one-time loss of $6.2 million.
Also during the quarter Central Pacific reached a $1.2 million settlement of a class- action lawsuit relating to overdraft fees it charged customers.
Central Pacific's shares were trading at $11.98 midday Friday, up two cents from Thursday's closing price.