After losing tens of millions on bad loans to California homebuilders, Central Pacific Bank is shutting down its Mainland operations.

The company said yesterday that it will close all of its West Coast operations by 2012 and refocus on its core Hawai'i business.

"Our Mainland team continues to reduce our exposure in California as we shift gears to fully concentrate on the Hawai'i market," said Ronald Migita, the company's president and CEO.

"We have not made a loan in California in more than 18 months and have been diligent in reducing our loan portfolio there."

Shares of the bank's parent, Central Pacific Financial Corp., rose 7 cents, or 6.25 percent, to close at $1.19 on the New York Stock Exchange yesterday.

Central Pacific's Mainland business operates out of a single office in Pasadena, Calif. The office has 18 employees.

As of Sept. 30, the bank said its Mainland construction and commercial real estate loans totaled $865.8 million.

Many of those loans will be sold off, restructured or paid off between now and 2012, the company said.

With $5.2 billion in assets, Central Pacific is the state's third-largest financial institution.

During the second quarter 2008, the company's parent reported a $146.3 million net loss due to problem loans to California residential developers hard-hit by the subprime lending crisis.

That came after Central Pacific Financial posted a $44.5 million loss in fourth quarter 2007 stemming from similar troubled loans to California homebuilders.

Some of those same economic problems are starting to hurt the company's Hawai'i portfolio.

In October, Central Pacific Financial posted a record $183.1 million net loss due in part to an increase in problem commercial loans here.

"The economic conditions in Hawai'i remain challenging," Migita said.

"The ability to stay focused on our core business is part of an overall strategy to help the bank weather this prolonged downturn and position us to contribute to the recovery of the state's economy."