Top two isle banks
post profit gains

First Hawaiian's 1.5%
profit increase reflects the isles'
weak economy

By Rick Daysog
Star-Bulletin

First Hawaiian Inc. today reported a mild 1.5 percent increase in its first quarter earnings, a fallout of Hawaii's continued weak economy.

First Hawaiian said its net income was $20.5 million for the three months ending March 31, up from $20.2 million in the year-earlier period.

On a per-share basis, the parent of First Hawaiian Bank earned 65 cents, which is identical to its first quarter 1996 net.

The company's earnings matched Wall Street's expectations. Analysts surveyed by Zacks Investment Research had forecast earnings of 65 cents a share.

"Hawaii's gradual recovery is continuing but economic data and low consumer confidence suggest that growth is likely to be slow in the near future," said Walter Dods, First Hawaiian's chairman and chief executive officer.

The soft economy raised the level of First Hawaiian's nonperforming loans by 11.5 percent to $109.2 million, the bank said. The company said its soon-to-be completed merger of Pioneer Federal Savings into First Hawaiian Bank will help address the weak business climate.

The merger, announced last summer, eventually will save First Hawaiian $5 million a year by closing 14 branches and moving their business to nearby First Hawaiian branches. The company also plans to convert five Pioneer branches into First Hawaiian branches.

At the end of the quarter, the bank holding company said its assets increased 9.1 percent to 8.1 billion from the year-earlier period while total deposits jumped 12.5 percent to $6 billion. Loans were up 14.2 percent to $5.9 billion.

First Hawaiian said the higher loans, deposits and assets were due to its recent purchase of 34 branches in the Pacific Northwest, which the company said was booming. The banks operate under First Hawaiian's Pacific One Bank subsidiary.

Bancorp up