For months now, Central Pacific Financial Corp. has been aiming at a moving target in trying to raise capital.

And after a staggering $183 million third-quarter loss because of rising loan trouble, the target just moved again.

"We expect the required capital amount to be substantially higher than projected prior to the third quarter," Ronald K. Migita, the Honolulu company's chairman, president and chief executive officer, said on a conference call.

He said that, as a result, the $5.4 billion-asset Central Pacific would consider other options to add capital in addition to a planned stock offering.

Analysts said it would have to, because now the offering is unlikely to be enough to pull in the $200 million that they estimate it needs, especially with the company's share price falling.

Still, Joe Gladue, an analyst at B. Riley & Co., said he is cautiously optimistic. "At this point I am not sure their problems are insurmountable," he said.

Central Pacific has been after capital since the summer.

In July it announced plans for a $100 million offering. But its share price plunged 35% that month, prompting it to call off the offering. The company said it did not have enough shares available to raise the amount of money it needed at the time.

In October, stockholders increased the number of shares it could issue by 85%, to 185 million. But the share price kept dropping.

The company conceded that this could cause the offering to fall short of the new capital target.

It has a loan review under way to gauge the extent of its trouble and calculate how much it needs to raise.

But the company also announced that it expects to receive a formal regulatory order requiring it to maintain capital above the typical levels.

Several observers said the offering could be a difficult sell, though the loan review should help.

To attract investors, companies generally need to demonstrate that loan deterioration has stopped and that they can use the fresh capital to grow. "The problem for a company in distress is to demonstrate to new and old shareholders that they have a handle on their problems, and investors won't pour fresh money in only to have it washed away with significant additional loan losses," said Charlie Crowley, a managing director in investment banking at Stifel, Nicolaus & Co. Inc.

Gladue said that the loan uncertainty is an issue, but that Central Pacific has an attractive franchise in Hawaii and California, so can tout its growth potential.

He said investors would consider the company more seriously after it completes the loan review.

"I guess the question is how much more trouble they can have in commercial real estate and construction segments," he said. "They have taken a lot of losses on the construction portfolio on the mainland. If they have taken most of the charges for those loans, and the charges get smaller, then they can recover from this."

The $183 million quarterly loss Central Pacific announced last week included a $142.5 million provision for loan losses, a $50 million goodwill charge and a $61 million valuation allowance on its deferred tax asset.

It was the second consecutive loss for the company, following a $34.4 million loss in the second quarter. It had earned $3 million in the third quarter of 2008.

Credit costs skyrocketed, with the provision roughly double what it was in the second quarter and five times higher than in the year-earlier period.

Nonperforming assets at Sept. 30 totaled $418 million, or 8.09% of total assets, compared with 4.73% in the second quarter and 2.41% a year earlier.

Though its bank unit remained well capitalized by typical standards, it is short of a capital requirement in its December memorandum of understanding.

According to the bank's call report, it had a leverage ratio of 8.02% at Sept. 30. The regulators had imposed a 9% requirement.

The company said a formal order is pending now.

Analysts said its share price makes its capital needs daunting. Its stock — which closed at $1.12 Wednesday — has lost about 91% of its value over the past year.

"It gets harder and harder the further the stock price goes down," Gladue said.

A research note from KBW Inc.'s Keefe, Bruyette & Woods Inc. said that to raise $200 million, Central Pacific would have to sell shares at or above $1.32 per share.

"We believe the company may have to seek other forms of capital in addition to common equity," the note said.

But additional capital options for all banking companies are limited, observers said. "In general, there are a number of banks of all sizes that have been under regulatory pressure to raise capital," Crowley said. "For the most part, the trust-preferred securities market has been dead, and forms of capital other than common equity have not been used widely."

Albert Savastano, an analyst at Fox-Pitt Kelton Cochran Caronia Waller LLC, said Central Pacific could issue convertible preferred shares with a high dividend or "punishment feature" to encourage shareholders to vote to convert them to common shares.

"That is a way to force it, if you will," he said.

Wayne Kirihara, a Central Pacific spokesman, said all possibilities are under consideration, including a private-equity infusion.

"A public offering is one option, also private equity or a combination of the two."

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