By Howard Dicus - bio | email
HONOLULU (HawaiiNewsNow) - The parent company of Central Pacific Bank has posted a $72.5 million summer quarter loss after creating a larger cushion in case more loans go bad.
The company also said it may be just a few days away from raising fresh capital/
"It has been working with a private equity investors and believes it is close to agreeing with the investors on the material terms for an investment of approximately $98 million of a contemplated $325 million capital raise," Central Pacific Financial Corp. said Tuesday.
The parent company said the bank set another $79.9 million aside in the third quarter as a provision for loan losses. This brings the total cushion to 9.19% of total loans, up from 7.69% at the end of the previous quarter.
An additional provision for loan losses means the money is taken off the bottom line - hence the red ink for the quarter - but is actually still on hand if more loans become, as bankers say, "non-performing."
There are fewer loans to go that route: during the quarter, CPB sold $124.1 million in loans made on the mainland under previous management. More than a third of this value was, in fact, non-performing at the time of the sale. This lowers than bank's loan to deposit ratio to 74.3%, down from 81.8% just three months earlier.
Copyright 2010 by HawaiiNewsNow. Copyright 2010.
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