Central Pacific Bank to leave California market

AP News
Posted: Dec 09, 2009 8:30 PM

Central Pacific Bank will shut down its California operations by 2012 after suffering significant losses on bad loans to homebuilders in that state.

The Honolulu-based bank operates only one branch in California, located in Pasadena. Eighteen employees will be affected.

Its parent, Central Pacific Financial Corp., suffered a third-quarter loss of $183.1 million on deteriorating commercial real estate markets and declining property values in Hawaii and California.

Chairman Ronald Migita says the bank has made no loans in California in more than 18 months. But he says it still held about $622 million in loans and leases, many of them in California, at the end of the third quarter.

Migita noted that economic challenges in Hawaii remain challenging.