Central Pacific Financial Corp. reported a sharp drop in first-quarter profit today as the fallout from loans made to California homebuilders continued to weigh on earnings.

The parent company of Central Pacific Bank said preliminary results show it earned $1.7 million, or 6 cents a share, in the January-to-February quarter. That compared with earnings of $20.1 million, or 65 cents per share in the same quarter a year earlier.

Despite the problems in California, the bank's Hawai'i operations are continuing to do well, officials said.

"I just want to emphazied that the issues that impacted us this quarte are isolated to California," said Clint Arnoldus CPF's chief executive officer. "The company's capital position and operating fundamentals are really solid, and Hawai'i continues to be a very strong perdormer."

Central Pacific also reported Net growth in loans and leases of $149.8 million, or 3.6 percent, from Dec. 31, 2007, excluding the effects of loans transferred to held for sale and loan charge-offs. Net credit costs totaled $29.7 million, including provision for loan and lease losses, partially offset by a decrease to the reserve for unfunded commitments.

The bank also received cash proceeds totaling $900,000 million for partial redemption of the company's equity interest in Visa Inc.