The aggressive write-downs of its problem loans in California appears to be paying off for Central Pacific Bank.

The company's parent, Central Pacific Financial Corp., said yesterday it expects to report a net profit of $2.2 million to $3.2 million during third quarter 2008, reversing a $143.2 million net loss during the previous quarter.

On a per-share basis, the company said it expects to net between 8 cents and 11 cents per share for the three months ending Sept. 30, 2008, compared with a net loss of $5.10 per share during the three months ending June 30.

"Despite the turmoil and uncertainty in the financial markets, the fundamentals and overall safety and soundness of our bank remain strong and we believe we are well positioned to meet the needs of our customers during these challenging times," said Ronald Migita, CPF's chairman and chief executive officer.

CPF's shares traded as high as $16.35 on the news before closing at $15.38 yesterday. That was up 2.8 percent from Tuesday's close of $14.96 per share.

By comparison, the Dow Jones Industrial Average declined 733 points or 7.9 percent yesterday.

Central Pacific, the state's third largest financial institution, charged off $73.9 million during second quarter 2008 due to loans to California homebuilders hard-hit by the nation's subprime mortgage crisis.

In the recently completed third quarter, the company said it expects to charge off between $8 million and $9 million.

Central Pacific, which will announce its third quarter results on Oct. 31, also said it expect to record credit costs of $22 million to $24 million for third quarter 2008, down sharply from the previous quarter's $116.1 million.

The company has about $100 million worth of loans to homebuilders in California, which is off sharply from about $300 million last year.

Central Pacific was able to write down its problem loans without laying off employees or reducing products and services to its local bank customers.