December 14, 2009 (FinancialWire) — Central Pacific Financial Corp. (NYSE: CPF) said that its primary subsidiary, Central Pacific Bank, has agreed to a Stipulation to the Issuance of a Consent Order with the Federal Deposit Insurance Corp. and the Hawaii Division of Financial Institutions. The Consent Order requires CPB to improve its capital position, asset quality, liquidity, and management oversight, among other matters.

CPB said it has elected to continue its participation in the extended FDIC insurance program, which in addition to the $250,000 coverage per depositor, provides unlimited insurance coverage on transactional accounts earning less than a one-half percent interest rate.

The Consent Order requires CPB to take numerous actions that include increasing its Tier 1 Capital to maintain a minimum leverage capital ratio of 10% and total risk-based capital ratio of 12%, as well as the development of a contingency plan if those ratios are not attained by March 31, 2010.

An adequate allowance for loan and lease losses must be maintained at all times, and the amount of commercial real estate loans, particularly land development and construction loans, must be reduced systematically. The company said it has filed a form 8-K with the U.S. Securities and Exchange Commission reporting this Consent Order, which can be referenced for more information.

CPB recently announced its plan to exit the California market, where many of its commercial real estate loans are located, and to focus on business development in Hawaii. The bank has not made a loan in California for more than 18 months and plans to wind down or dispose of its existing California loan portfolio over the next two years. Hawaii-based Central Pacific Bank operates 37 branches, a residential mortgage subsidiary, and more than 100 ATMs throughout the State of Hawaii.

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