UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to _________
Commission file number 0-10777
CPB INC.
(Exact name of registrant as specified in its charter)
Hawaii 99-0212597
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
220 South King Street, Honolulu, Hawaii 96813
(Address of principal executive offices) (Zip Code)
(808)544-0500
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock, No Par Value, $1.25 Stated Value;
Outstanding at March 31, 1996: 5,263,222 shares
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements listed below are filed as a part hereof.
Page
Consolidated Balance Sheets - March 31, 1996 and
December 31, 1995 F-1
Consolidated Statements of Income - Three months ended
March 31, 1996 and 1995 F-2
Consolidated Statements of Cash Flows - Three months
ended March 31, 1996 and 1995 F-3
Notes to Consolidated Financial Statements F-4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
CPB Inc. (the "Company") posted first quarter 1996 net income of
$3.554 million, increasing by 3.3% over the $3.442 million earned
in the first quarter of 1995. The increase in net income was due
to a combination of the increase in fees on loans and a decrease in
the provision for loan losses, which outpaced the impact of the
decline in other operating income and the increase in other
operating expense. As of March 31, 1996, total assets of $1,378.9
million increased by $7.0 million or 0.5%, net loans of $971.3
million increased by $1.1 million or 0.1%, and total deposits of
$1,121.7 million decreased by $16.6 million or 1.5% when compared
with year-end 1995.
The following table presents return on average assets, return on
average stockholders' equity and earnings per share for the periods
indicated.
Three Months Ended
March 31,
1996 1995
Annualized return
on average assets 1.04% 1.00%
Annualized return
on average
stockholders' equity 10.57% 11.14%
Earnings per share $0.68 $0.66
The State of Hawaii's economy has demonstrated signs of
recovery in certain sectors, and local economists are optimistic
that there will be further improvement in the next year. Labor 1
market conditions declined during the first quarter of 1996, due
mainly to the recent federal government shutdowns. In addition,
planned reductions in federal defense spending is expected to
adversely impact job growth and the construction industry.
However, the visitor industry remains strong. Total visitor
arrivals during 1995 exceeded 1994 levels by an estimated 3.2%, and
1996 activity is expected to surpass 1995 levels. With the
development of the Hawaii Convention Center currently in
progress, and as the U.S. and Japanese economies rebound,
expectations are that growth in the visitor industry will
continue to improve. In summary, the Hawaii economy is expected to
grow modestly in 1996; however, a lack of significant
improvement may have an adverse impact on the Bank's growth and may
also result in higher levels of nonperforming loans and related
loan losses. Consequently, the results of operations of the
Company for the remainder of 1996 will depend on the speed,
strength and duration of the economic recovery in the State of
Hawaii.
Results of Operations
Net Interest Income
A comparison of net interest income for the three months ended
March 31, 1996 and 1995 is set forth below on a taxable
equivalent basis using an assumed income tax rate of 35%. Net
interest income, when expressed as a percentage of average
interest earning assets, is referred to as "net interest margin."
Three Months Ended
March 31,
1996 1995
(Dollars in thousands)
Interest income $26,428 $26,014
Interest expense 10,589 10,592
Net interest income $15,839 $15,422
Annualized net
interest margin 5.02% 4.82%
Interest income increased by $414,000 or 1.6% in the first
quarter of 1996 as compared to the same period in 1995 due
primarily to an increase in fees on loans. Average interest
earning assets of $1,262.9 million for the three months ended March
31, 1996 decreased by $17.3 million or 1.4%, while the yield on
interest earning assets increased to 8.37% from 8.13%. Interest
and fees on loans increased by $295,000 or 1.4%, while average
loans outstanding decreased by 1.7%. The increase in interest and
fees on loans reflects an increase of $301,000 in fees on loans,
attributable primarily to a few large loan
transactions. Interest on taxable investment securities
increased by $725,000 or 22.7% due primarily to an increase of
$46.0 million or 20.3% in related average balances. Interest on
2
deposits in other banks and interest on Federal funds sold and
securities purchased under agreements to resell for the first
quarter of 1996 decreased nearly 100% from the first quarter of
1995 due to a decrease in average balances during the period.
Interest expense for the first three months of 1996 remained
relatively unchanged, decreasing by $3,000 as compared to the same
period in 1995. The rate on interest-bearing liabilities for the
first quarter of 1996 as compared to the same period in 1995
increased to 4.00% from 3.88%. However, average interest-bearing
liabilities of $1,060.1 million for the first quarter of 1996
decreased by $32.1 million or 2.9% when compared to the first
quarter of 1995. The rise in interest rates, a continued movement
of funds into higher-yielding certificates of deposits and
increased competition for deposits contributed to a rise in the
cost of deposits. At the same time, the decline in total deposits
led the Bank to seek higher-cost external sources of funds.
As a result, net interest income for the first quarter of 1996
increased by $414,000 or 1.6%, and net interest margin increased to
5.02% from 4.82%. Due to the expectation of strong
competition for both loans and deposits, no assurances can be given
that the Company will be able to maintain net interest margin at
its current level for the remainder of 1996.
Provision for Loan Losses
Provision for loan losses is determined by Management's
ongoing evaluation of the loan portfolio and assessment of the
ability of the allowance for loan losses to cover inherent
losses. The Company, considering current information and events
regarding the borrowers' ability to repay their obligations, treats
a loan as impaired when it is probable that the Company will be
unable to collect all amounts due according to the
contractual terms of the loan agreement. When a loan is
considered to be impaired, the amount of the impairment is
measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate or, if the loan is
considered to be collateral dependent, based on the fair value of
the collateral. Impairment losses are included in the
allowance for loan losses through a charge to the provision for
loan losses. For smaller-balance homogeneous loans (primarily
residential real estate and consumer loans), the allowance for loan
losses is based upon Management's evaluation of the quality,
character and inherent risks in the loan portfolio, current and
projected economic conditions, and past loan loss experience. The
allowance is increased by provisions charged to operating expense
and reduced by charge-offs, net of recoveries.
3
Provision for loan losses, loan charge-offs, recoveries, net loan
charge-offs and the annualized ratio of net loan charge-offs to
average loans are set forth below for the periods indicated.
Three Months Ended
March 31,
1996 1995
(Dollars in thousands)
Provision for
loan losses $450 $825
Loan charge-offs $155 $130
Recoveries 49 43
Net loan charge-offs $106 $ 87
Annualized ratio of
net loan charge-offs
to average loans 0.04% 0.03%
The provision for loan losses of $450,000 for the first
quarter of 1996 decreased by $375,000 or 45.5% from the same period
in 1995 due to the lower level of nonperforming assets and loan
delinquencies. Net loan charge-offs of $106,000 and $87,000 for
the first three months of 1996 and 1995, respectively, when
expressed as an annualized percentage of average total loans, were
0.04% and 0.03%, respectively. Consumer loans comprised
approximately 97% of loan charge-offs during the first quarter of
1996. The allowance for loan losses expressed as a percentage of
total loans was 2.07% and 2.04% at March 31, 1996 and December 31,
1995, respectively. This ratio increased due to lower-than-
expected loan charge-offs and a lack of loan growth.
Management believes that the allowance for loan losses at March
31, 1996 was adequate to cover credit risks inherent in the loan
portfolio. However, continuation of current economic
conditions in the State of Hawaii may adversely affect borrowers'
ability to repay, collateral values and, consequently, the level of
nonperforming loans and provision for loan losses.
Nonperforming Assets
The following table sets forth nonperforming assets, accruing
loans which were delinquent for 90 days or more and restructured
loans still accruing interest at the dates indicated.
March 31, December 31,
1996 1995
(Dollars in thousands)
Nonaccrual loans $ 3,582 $ 3,583
Other real estate 2,231 2,231
Total nonperforming assets 5,813 5,814
4
Loans delinquent for 90
days or more 22,582 9,189
Restructured loans still
accruing interest 5,974 5,974
Total nonperforming assets,
loans delinquent for
90 days or more and
restructured loans still
accruing interest $34,369 $20,977
Total nonperforming assets as a
percentage of total loans and
other real estate 0.58% 0.59%
Total nonperforming assets and
loans delinquent for 90 days
or more as a percentage of
total loans and other real
estate 2.86% 1.51%
Total nonperforming assets,
loans delinquent for 90 days
or more and restructured loans
still accruing interest
as a percentage of total loans
and other real estate 3.46% 2.11%
Nonperforming assets, loans delinquent for 90 days or more and
restructured loans still accruing interest totalled $34.4 million
at March 31, 1996, increasing by $13.4 million or 63.8% over year-
end 1995. Nonaccrual loans, loans delinquent for 90 days or more
and restructured loans still accruing interest were
comprised primarily of loans secured by commercial or residential
real property in the State of Hawaii. Nonaccrual loans of $3.6
million were comprised of one large commercial real estate loan and
several residential real estate loans. In May 1995,
nonaccrual loans totalling $11,250,000 were paid in full, along
with all previously unaccrued interest thereon. Other real estate
of $2.2 million at March 31, 1996 consisted of several residential
properties. Loans delinquent for 90 days or more and still
accruing interest totaled $22.6 million at March 31, 1996,
increasing by $13.4 million or 145.8% from year-end 1995.
Increases in delinquencies occurred in the residential real estate
and commercial loan portfolios. Management continues to closely
monitor loan delinquencies and is increasing its efforts to
determine the extent of loss exposure on these and all other loans.
A continued decline in the general economic conditions may result
in further increases in nonperforming assets,
delinquencies, net loan charge-offs and provision for loan
losses.
5
Other Operating Income
Total other operating income in the first quarter of 1996 of
$2,601,000 decreased by $221,000 or 7.8% from the first quarter of
1995. The primary factor in the decline was a decrease in
partnership income of $271,000 or 70.2% due to operating losses
from the leasing of the recently-completed Kaimuki Plaza and the
effects on vacancies and lease rates of an oversupply of office
space in the Honolulu area.
Other Operating Expense
Total other operating expense of $12,052,000 for the first
quarter of 1996 increased by $377,000 or 3.2% from the first
quarter of 1995. Salaries and employee benefits of $6,610,000
increased by $375,000 or 6.0% due in part to $175,000 in
severance payments related to a staff reduction plan, coupled with
an increase in number of employees resulting from the
establishment of three new in-store branches during the fourth
quarter of 1995. Net occupancy expense of $1,608,000 increased by
$250,000 or 18.4% due to a combination of branch openings,
scheduled rental increases on other bank facilities and costs
related to the relocation and consolidation of the Bank's
Consumer Banking Division. Other expense of $3,158,000 decreased
by $255,000 or 7.5%. A reduction of $600,000 in the Federal
Deposit Insurance Corporation deposit assessment was partially
offset by increases in computer software and charge card related
expenses.
Income Taxes
Income tax expense totalled $2,331,000 and $2,252,000 for the
three months ended March 31, 1996 and 1995, respectively. The
effective tax rate for the first quarter of 1996 and 1995 was
39.61% and 39.55%, respectively.
Financial Condition
Total assets at March 31, 1996 of $1,378.9 million increased by
$7.0 million or 0.5% over December 31, 1995. Investment securities
of $297.5 million increased by $13.8 million or 4.9%, and total
loans of $991.8 million increased by $1.4 million or 0.1%, while
interest-bearing deposits in other banks of $49,000 decreased by
$7.1 million or 99.3% during the first quarter of 1996.
Total deposits at March 31, 1996 of $1,121.7 million decreased by
$16.6 million or 1.5% from year-end 1995, while Federal funds
purchased and securities sold under agreements to repurchase of
$10.5 million and other borrowed funds of $97.5 million increased
by $8.0 million or 320.0% and $15.4 million or 18.7%,
respectively, over that same period. Noninterest-bearing
deposits of $160.1 million decreased by $10.4 million or 6.1%, and
interest-bearing deposits of $961.6 million decreased by $6.2
million or 0.6%. Core deposits (noninterest-bearing demand,
interest-bearing demand and savings deposits, and time deposits 6
under $100,000) at March 31, 1996 of $848.3 million decreased by
$29.8 million or 3.4% during the first quarter of 1996.
Decreases in business checking accounts of $11.1 million,
personal savings accounts of $7.9 million and time deposits under
$100,000 of $3.5 million contributed to the decline in core
deposits. Time deposits of $100,000 or more increased by $13.1
million, consistent with an ongoing trend of deposits moving to
higher-rate instruments.
Capital Resources
Stockholders' equity of $133.8 million at March 31, 1996
increased by $1.3 million or 1.0% from December 31, 1995. A $1.1
million change in the unrealized gain(loss) on investment
securities available for sale, net of taxes, offset increases
attributable to net earnings. When expressed as a percentage of
total assets, stockholders' equity was 9.71% and 9.66% at March 31,
1996 and December 31, 1995, respectively. On March 18, 1996, the
Board of Directors declared a quarterly cash dividend of $0.24 per
share, increasing by 9.1% over the $0.22 per share declared in the
first quarter of 1995. Dividends declared in the first quarter of
1996 totalled $1,263,000 compared with
$1,152,000 in the first quarter of 1995. The Company's objective
with respect to capital resources is to maintain a level of capital
that will support sustained asset growth and anticipated credit
risks and to ensure that regulatory guidelines and
industry standards are met.
Regulations on capital adequacy guidelines adopted by the Federal
Reserve Board (the "FRB") and the Federal Deposit
Insurance Corporation (the "FDIC") are as follows. An
institution is required to maintain a minimum ratio of qualifying
total capital to risk-weighted assets of 8%, of which at least 4%
must consist of Tier I capital, essentially common stockholders'
equity (before unrealized loss on investment securities) less
intangible assets. The FRB and the FDIC have also adopted a
minimum leverage ratio of Tier I capital to total assets of 3%.
The leverage ratio requirement establishes the minimum level for
banks that have a uniform composite ("CAMEL") rating of 1, and all
other institutions and institutions experiencing or
anticipating significant growth are expected to maintain capital
levels at least 100 to 200 basis points above the minimum level.
Furthermore, higher leverage and risk-based capital ratios are
required to be considered well capitalized or adequately
capitalized under the prompt corrective action provisions of the
FDIC Improvement Act of 1991.
7
The following table sets forth capital requirements applicable to
the Company and the Company's capital ratios as of the dates
indicated.
Required Actual Excess
At March 31, 1996:
Tier I risk-based capital ratio 4.00% 12.43% 8.43%
Total risk-based capital ratio 8.00% 13.69% 5.69%
Leverage capital ratio 4.00% 9.87% 5.87%
At December 31, 1995:
Tier I risk-based capital ratio 4.00% 12.35% 8.35%
Total risk-based capital ratio 8.00% 13.61% 5.61%
Leverage capital ratio 4.00% 9.61% 5.61%
The increase in retained earnings, which exceeded the rate of
growth in risk-weighted assets in the first quarter of 1996,
contributed to the increase in capital ratios.
In addition, FDIC-insured institutions such as the Bank must
maintain leverage, Tier I and total risk-based capital ratios of at
least 5%, 6% and 10%, respectively, to be considered "well
capitalized" under the prompt corrective action provisions of the
FDIC Improvement Act of 1991.
The following table sets forth the Bank's capital ratios as of
the dates indicated.
Required Actual Excess
At March 31, 1996:
Tier I risk-based capital ratio 6.00% 11.14% 5.14%
Total risk-based capital ratio 10.00% 12.40% 2.40%
Leverage capital ratio 5.00% 9.24% 4.24%
At December 31, 1995:
Tier I risk-based capital ratio 6.00% 11.05% 5.05%
Total risk-based capital ratio 10.00% 12.31% 2.31%
Leverage capital ratio 5.00% 8.99% 3.99%
Liquidity and Effects of Inflation
A discussion of liquidity and effects of inflation is included in
the 1995 Annual Report to Shareholders. No significant
changes in the Company's liquidity position or policies have
occurred during the quarter ended March 31, 1996.
8
PART II. OTHER INFORMATION
Items 1 to 3 and Item 5.
Items 1 to 3 and Item 5 are omitted pursuant to instructions to
Part II.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders (the "Meeting") of the Company
was held on April 23, 1996, for the purpose of
considering and voting upon the following matters:
1. Election of three persons to the Board of Directors for a
term of three years and to serve until their successors
are elected and qualified;
2. Ratification of the appointment of KPMG Peat Marwick LLP
as the Company's independent accountants for the fiscal
year ending December 31, 1996; and
3. Transaction of such other business as may properly come
before the Meeting and at any and all adjournments
thereof.
The following table presents the names of directors elected at
the Meeting, as well as the number of votes cast for, votes cast
against or withheld, and abstentions or nonvotes for each of the
directors nominated. A total of 4,111,137 shares, or 78.1% of
eligible shares, were represented at the Meeting.
Votes Cast
Against or Abstentions
Name For Withheld or Nonvotes
Alice F. Guild 4,083,531 27,606 None
Daniel M. Nagamine 4,077,031 34,106 None
Naoaki Shibuya 4,111,137 None None
In addition to the above directors, the following directors will
continue to serve on the Board of Directors until the
expiration of their respective terms as indicated.
Expiration
Name of Term
Paul Devens 1997
Dennis I. Hirota, Ph.D. 1998
Stanley Hong 1997
Kensuke Hotta 1998
Joichi Saito 1998
Yoshiharu Satoh 1997
9
The ratification of the appointment of KPMG Peat Marwick LLP as
independent accountants for the fiscal year ending December 31,
1996 was approved with a total of 4,090,089 votes cast for, 3,196
votes against or withheld and 17,852 abstentions or
nonvotes.
There were no other matters brought before the Meeting which
required a vote by shareholders.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the
first quarter of 1996.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CPB INC.
(Registrant)
Date: May 8, 1996 /s/ Joichi Saito
Joichi Saito
Chairman of the Board and
Chief Executive Officer
Date: May 8, 1996 /s/ Neal Kanda
Neal Kanda
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
11
CPB INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
(Dollars in thousands, except per share data) 1996 1995
ASSETS
Cash and due from banks $ 49,034 $ 50,274
Interest-bearing deposits in other banks 49 7,140
Investment securities:
Held to maturity, at cost (fair value of $120,584
and $137,347 at March 31, 1996 and December 31,
1995, respectively) 120,870 136,693
Available for sale, at fair value 176,581 146,934
Total investment securities 297,451 283,627
Loans 991,764 990,356
Less allowance for loan losses 20,500 20,156
Net loans 971,264 970,200
Premises and equipment 25,221 25,452
Accrued interest receivable 10,428 9,454
Investment in partnership 6,336 6,221
Due from customers on acceptances 641 1,443
Other assets 18,506 18,098
Total assets $1,378,930 $1,371,909
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing deposits $ 160,070 $ 170,494
Interest-bearing deposits 961,623 967,825
Total deposits 1,121,693 1,138,319
Federal funds purchased and securities sold under
agreements to repurchase 10,500 2,500
Other borrowed funds 97,462 82,104
Bank acceptances outstanding 641 1,443
Other liabilities 14,787 15,036
Total liabilities 1,245,083 1,239,402
Stockholders' equity:
Preferred stock, no par value, authorized 1,000,000
shares, none issued - -
Common stock, no par value, stated value $1.25 per
share; authorized 25,000,000 shares; issued and
outstanding 5,263,222 and 5,251,762 shares at
March 31, 1996 and December 31, 1995, respectively 6,579 6,565
Surplus 45,429 45,337
Retained earnings 82,661 80,370
Unrealized gain (loss) on investment securities,
net of taxes (822) 235
Total stockholders' equity 133,847 132,507
Total liabilities and stockholders' equity $1,378,930 $1,371,909
Book value per share $25.43 $25.23
<FN>
See accompanying notes to consolidated financial statements.
</FN>
F-1
CPB INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
(Dollars in thousands, March 31,
except per share data) 1996 1995
Interest income:
Interest and fees on loans $22,134 $21,839
Interest and dividends on
investment securities:
Taxable interest 3,921 3,196
Tax-exempt interest 44 35
Dividends 258 187
Interest on deposits in other banks 17 380
Interest on Federal funds sold and
securities purchased under
agreements to resell 1 327
Total interest income 26,375 25,964
Interest expense:
Interest on deposits 9,157 8,450
Interest on Federal funds purchased,
securities sold under agreements
to repurchase and other borrowed
funds 1,432 2,142
Total interest expense 10,589 10,592
Net interest income 15,786 15,372
Provision for loan losses 450 825
Net interest income after
provision for loan losses 15,336 14,547
Other operating income:
Service charges on deposit accounts 672 676
Other service charges and fees 1,407 1,318
Partnership income 115 386
Fees on foreign exchange 271 294
Investment securities gains - 30
Other 136 118
Total other operating income 2,601 2,822
Other operating expense:
Salaries and employee benefits 6,610 6,235
Net occupancy 1,608 1,358
Equipment 676 669
Other 3,158 3,413
Total other operating expense 12,052 11,675
Income before income taxes 5,885 5,694
Income taxes 2,331 2,252
Net income $ 3,554 $ 3,442
Per common share:
Net income $0.68 $0.66
Cash dividends declared $0.24 $0.22
Weighted average shares outstanding
(in thousands) 5,261 5,235
<FN>
See accompanying notes to consolidated financial statements.
</FN>
F-2
CPB INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
(Dollars in thousands) 1996 1995
Cash flows from operating activities:
Net income $ 3,554 $ 3,442
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for loan losses 450 825
Provision for depreciation and
amortization 676 658
Net amortization and accretion of
investment securities 292 498
Net gain on investment securities - (30)
Federal Home Loan Bank stock
dividends received (258) (187)
Net change in loans held for sale (1,759) 1,266
Deferred income tax benefit (606) (404)
Partnership income (115) (386)
Decrease (increase) in accrued
interest receivable and other
assets (293) 4,807
Decrease in accrued interest payable
and other liabilities (32) (1,293)
Net cash provided by operating
activities 1,909 9,196
Cash flows from investing activities:
Proceeds from maturities of and
calls on investment securities
held to maturity 15,512 3,977
Purchases of investment securities
held to maturity - (3,000)
Proceeds from sales, maturities and
calls on investment securities
available for sale 1,961 321
Purchases of investment securities
available for sale (33,091) (5,120)
Net decrease in interest-bearing
deposits in other banks 7,091 7,364
Net loan repayments (originations) 245 (20,429)
Purchases of premises and equipment (445) (1,130)
Net cash used in investing
activities (8,727) (18,017)
Cash flows from financing activities:
Net increase (decrease) in deposits (16,626) 35,756
Proceeds from Federal Home Loan
Bank intermediate-term advances 10,000 10,000
Repayments of Federal Home Loan
Bank intermediate-term advances (10,193) (5,964)
Net increase (decrease) in other
short-term borrowings 23,551 (35,214)
Cash dividends paid (1,260) (1,152)
Proceeds from sale of common stock 106 -
Net cash provided by financing
activities 5,578 3,426
Net decrease in cash and cash
equivalents (1,240) (5,395)
Cash and cash equivalents:
At beginning of period 50,274 61,604
At end of period $49,034 $56,209
Supplemental disclosure of cash flow
information:
Cash paid during the period
for interest $10,538 $12,104
Cash paid during the period
for income taxes 480 800
Supplemental disclosure of noncash
investing and financing activities:
Transfer of loans to other real estate $ - $ 850
<FN>
See accompanying notes to consolidated financial statements.
</FN>
F-3
CPB INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The financial information included herein is unaudited, except
for the consolidated balance sheet at December 31, 1995.
However, such information reflects all adjustments (consisting
solely of normal recurring adjustments) which are, in the opinion
of management, necessary for a fair statement of results for the
interim periods.
The results of operations for the three months ended March 31,
1996 are not necessarily indicative of the results to be expected
for the full year.
F-4