Central Pacific Bank’s parent company said it will set aside between $12 million and $17 million for potential loan losses in the third quarter, and that it has issued $55 million in notes to raise capital.

The loan-loss provision is up from $10.6 million in the second quarter and $9.3 million in the first quarter amid a faltering Hawaii economy with an unemployment rate that in September spiked to a nation-high 15.1%. Central Pacific, which disclosed the preliminary update in a filing Tuesday with the Securities and Exchange Commission, said it continues to build loan-loss reserves given the overall economic climate and that the additional third-quarter provision is largely driven by the economic forecast update provided by Moody’s.

The state’s fourth-largest bank, which like other institutions has been impacted by COVID-19, also said in the same filing that it has completed a private placement with registration rights of $55 million in 10-year fixed-to-floating rate subordinated notes due in 2030 to certain qualified institutional buyers and institutional accredited investors.

The company said it intends to use the net proceeds from the offering for general corporate purposes and capital flexibility.

“Our offering of the Notes was well received by the investment community and will provide the Bank with additional capital at an attractive interest rate,” Central Pacific Financial Corp. President and CEO Paul Yonamine said in a statement. “The successful issuance of the Notes will allow the Bank to continue to support our customers and community while also providing future capital flexibility.”

The notes bear a fixed interest rate of 4.75% for the first five years and will reset quarterly thereafter for the remaining five years.

Central Pacific, which will release its third-quarter earnings on Wednesday, said in the filing that it expects its earnings per share for the quarter to be in the range of 20 cents to 33 cents a share compared with 35 cents a share in the second quarter. Analysts had been looking for EPS of 34 cents a share for the third quarter, according to business information firm Thomson Reuters.

The bank said its net interest margin, which is the difference between what it generates from loans and pays out in deposits, will be in the range of 3.15% to 3.25%, or 3.20% to 3.30% excluding Paycheck Protection Program loans. The bank’s net interest margin in the second quarter was 3.26%, or 3.31% excluding PPP.

Central Pacific said that deferrals in the quarter dropped to $349 million, or 8% of loans, excluding PPP, as of Sept. 23, compared with $568 million, or 13% of loans, excluding PPP, as of June 30.

Shares of the company edged up 6 cents to $14.49 on Wednesday.

“Following reduced guidance, we would expect CPF shares to come under pressure,” Compass Point Research &Trading LLC analyst Laurie Havener Hunsicker said Wednesday in a research note. “We would use this opportunity to continue to buy shares (in front of third-quarter earnings), with a preferred entry in the mid-$13ish range.”

Hunsicker said she maintained her buy rating on the stock but revised her 12-month price target to $19, from $20, and lowered her full-year earnings estimate to 92 cents a share from $1.26 due to the uncertainty around timing of PPP forgiveness. She said she removed PPP forgiveness gains previously factored into the EPS figure.