Central Pacific reports $183 million loss

Central Pacific says 3rd-quarter loss of $183 million due to commercial real estate downturn

• On 8:21 pm EDT, Thursday October 29, 2009

HONOLULU (AP) -- Central Pacific Financial Corp. on Thursday blamed a third-quarter net loss of $183.1 million on deteriorating commercial real estate markets and declining property values in Hawaii and California.

The Honolulu-based parent company of Central Pacific Bank has faced higher credit costs because of the commercial real estate downturn, bank chairman Ronald K. Migita said.

Those challenging economic conditions will likely continue over the coming quarters, he said. In response, the bank aims to reduce its credit risk by selling off loans, possibly through bulk sales, Migita said.

Central Pacific said its $183.1 million net loss amounted to $6.38 per diluted share. The bank saw its shares fall 35.3 percent to $1.52 Thursday.

Central Pacific had a non-cash goodwill impairment charge of $50 million during the quarter. It also had a non-cash charge related to the establishment of a valuation allowance against the company's net deferred tax assets totaling $61.4 million.

Without the charges, the company would have had a net loss of $71.1 million, or $2.54 a share. In the third quarter of last year, company had a net income of $3 million, or $0.11 per diluted share.

The goodwill impairment charge had no impact on Central Pacific's regulatory capital, tangible equity or cash flows, and was directly attributable to the current quarter decline in its market capitalization, the company said.

As of Sept. 30, Central Pacific's remaining goodwill totaled $102.7 million, the bank said.

In addition, the company said it established a valuation allowance against its net deferred tax assets as a result of its recent net operating losses.

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