Big 2 isle banks
gain despite economy
Bank of Hawaii's parent
By Rick Daysog
and First Hawaiian keep up with
Wall Street's expectations
Star-BulletinHawaii's two largest banks shrugged off the effects of the ill economy, posting modest income gains for the second quarter. Pacific Century Financial Corp., parent of Bank of Hawaii, earned $35.6 million for the three months ending June 30, 1997 -- a 2.9 percent increase from the year earlier's $34.6 million.
First Hawaiian Inc. saw its second-quarter 1997 income rise 7.3 percent to $22.3 million from $20.7 million in the same period last year.
On a per-share basis, Pacific Century netted 89 cents, a 6 percent jump from second-quarter 1996's 84 cents. First Hawaiian earned 70 cents per share, up 4.5 percent from the year earlier's 67 cents.
"Considering the poor environment in Hawaii, it's positive that the two large banks had reasonable gains," said Gregg Robertson, president of Cadinha & Co., a local brokerage company. "The task for them is to keep this kind of performance going."
The results were identical to Wall Street's expectations. Analysts surveyed by Zacks Investment Research forecasted second quarter earnings of 89 cents for Pacific Century and 70 cents for First Hawaiian.
Shares of both companies saw little action on Wall Street today. Pacific Century's stock closed at $48.37-1/2, down 12-1/2 cents from yesterday on the New York Stock Exchange. Shares of First Hawaiian were unchanged at $35.37-1/2 on the Nasdaq market.
Both banks said their higher incomes came despite the weak economy. First Hawaiian Chief Executive Officer Walter Dods said his bank's index of leading economic indicators -- which are used to predict future economic activity -- has shown little change over the past six months.
Robertson noted that both banks are well positioned for future earnings growth due to their recent mainland acquisitions.
Last month, Pacific Century completed its $183 million purchase of Encino-based CU Bancorp., which lists about $800 million in assets. The company said it hopes to acquire one or two additional West Coast banks over the next two years, tripling its size in that region.
Last year, First Hawaiian expanded to the Pacific Northwest when it acquired 33 branches from U.S. Bancorp and American National Bank for a total of $53 million.
Both companies reported increases in total loans. As of June 30, Pacific Century listed net loans of $8.7 billion, up 5.4 percent from $8.2 billion last year. First Hawaiian's loans totaled $6 billion, a 6.6 percent increase from the year earlier's $5.7 billion.
Nonperforming assets from overdue loans also were up. Pacific Century said its nonperforming assets rose during the second quarter to $93.6 million, or 1.04 percent of total loans, from $84 million, or 0.98 percent of total loans in the year-earlier period.
First Hawaiian said its nonperforming assets as of June 30 totaled $97.9 million, or 1.25 percent of total assets. In the year-earlier period, the company's nonperforming assets totaled about $78.9 million, or 0.98 percent of total assets.
Total assets at Pacific Century were up 3.5 percent to $14.2 billion from last year's $13.7 billion while deposits rose 9.5 percent to $11.1 billion from $10.1 billion.
At First Hawaiian, assets declined 2.9 percent during the latest second quarter to $7.8 billion from the year-earlier's $8.1 billion while deposits were flat at $5.9 billion.
