Bankoh profit beats estimates
Bankoh’s profit rises, surprising analysts
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Bank of Hawaii Corp.
, the state's second-largest bank in terms of assets, posted a 1.2 percent increase in second-quarter net income yesterday and easily beat analysts' earnings-per-share estimates by 7 cents.
The bank attributed the better-than-expected quarter to an expansion in net interest margin, improved noninterest revenue and keeping core expenses under control.
Bankoh posted earnings of $48.3 million, or $1 a share, compared with $47.7 million, or 95 cents a share, a year earlier. Analysts were looking for earnings per share of 93 cents.
Revenue rose 6.9 percent to $167.9 million from $157.1 million.
The bank's net interest margin widened to 4.41 percent from 4.12 percent in the year-ago period.
Bankoh also increased its provisions for loan and credit losses as higher oil prices increased the risk in the bank's air transportation leasing portfolio and a weakening economy continued to pose a threat to customers' ability to repay their loans.
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Bank of Hawaii Corp.'s earnings rose 1.2 percent in the second quarter -- blowing past analysts' estimates by 7 cents a share -- as its net interest margin expanded, noninterest revenue improved and core expen- ses remained under control.
Second-quarter net
$48.3 million
Year-earlier net
$47.7 million
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The state's second-largest bank in terms of assets said yesterday it also increased its provisions for loan and credit losses as higher oil prices increased the risk in the bank's air transportation leasing portfolio and a weakening economy continued to pose a threat to customers' ability to repay their loans.
Bankoh posted net income of $48.3 million, or $1 a share, compared with $47.7 million, or 95 cents a share, a year earlier. Analysts were looking for earnings per share of 93 cents.
Revenue rose 6.9 percent to $167.9 million from $157.1 million.
The bank's net interest margin widened to 4.41 percent from 4.12 percent in the year-ago period and from 4.17 percent in the previous quarter.
Analyst Brett Rabatin of Nashville, Tenn.-based FTN MidWest Research said the bank did "a fantastic job of managing down the cost of CDs in the quarter," as well as improving its core funding base and reducing its overall cost of funds.
"They obviously shrunk the balance sheet a little bit, but it's the only bank I have (out of the 23 that I cover) that's still buying back shares (220,000 shares for $11.4 million in the quarter), which means they're in the enviable position of not having any credit-quality issues. So they're able to manage their capital ratios like a bank would in normal times."
Net interest income rose 8.4 percent to $107.4 million during the quarter from $99.1 million a year earlier while noninterest income, which includes service charges and fees, increased 4.3 percent to $60.5 million from $58 million.
The bank boosted its allow-ance for loan and lease losses to $102.5 million from $91 million a year earlier due to the air transportation exposure. Bankoh also more than doubled its second-quarter provision for credit losses to $7.2 million from $3.4 million in the year-earlier period. The provision exceeded net charge-offs of $4.7 million by $2.5 million in the quarter.
Total nonperforming assets rose 5.8 percent to $6.7 million from $6.3 million.
Bankoh Chairman and Chief Executive Al Landon said not expanding the bank outside the state has proven to be "the right decision at the right time."
He said the bank has been focused on improving convenience and customer service. During the quarter, Bankoh debuted a Hawaiian Airlines mileage Visa card, opened a new branch in Mililani, started online accounts for checking and savings, introduced free checking and announced 31 new ATM sites with Aloha Petroleum.
Total assets fell 3.3 percent to $10.4 billion from $10.7 billion. Total loans and leases fell 0.7 percent to $6.5 billion from $6.6 billion. And total deposits decreased 4.9 percent to $7.9 billion from $8.3 billion.
The bank also maintained its dividend at 44 cents a share. It will be payable Sept. 15 to shareholders of record at the close of business on Aug. 29.