Bankoh parents net
up 4.1% in quarter
Improving economies inBy Russ Lynch
Hawaii and in Asia are
cited for the gain
Pacific Century Financial Corp., parent of Bank of Hawaii, had a strong first quarter, reporting a profit of $35.4 million, up 4.1 percent from $34 million in the same period last year.
The company, which also owns Pacific Century Bank on the mainland, said its per-share earnings of 44 cents in the latest quarter were up 4.8 percent from 42 cents a year ago.
First-quarter net interest income was up 1.5 percent at $143.8 million, from $141.7 million in the 1998 quarter. Net noninterest income was up 15.7 percent at $61.2 million vs. $52.9 million in the year-earlier period.
The company's shares slipped 6 cents to $22.44 today in trading on the New York Stock Exchange. Pacific Century's earnings, announced after the market closed yesterday, were in line with Wall Street analysts' expectations.
Lawrence M. Johnson, Pacific Century chairman and chief executive officer, said Hawaii's economy is beginning to look better.
"We see encouraging signs of economic stabilization in Asia as well as indications of improvement in Hawaii's economy," he said in a statement.
Johnson said those factors and the company's ability to gain from the strong mainland economy and favorable interest rates indicate continuing earnings improvement.
As of March 31, Pacific Century had assets of $14.93 billion, up 1 percent from $14.78 billion at the end of March 1998. Net loans of $9.2 billion were up 1.9 percent from $9.03 billion a year earlier. Deposits of $9.4 billion were unchanged.
At the end of the first quarter, the company had nonperforming assets and overdue loans totaling $185 million, a 55.7 percent increase from $118.8 million on March 31 1998.
One reason for the increase was Pacific Century's acquisition of two banks in French Polynesia last May, which was after the end of the first quarter, said David A. Houle, Pacific Century executive vice president, treasurer and chief financial officer. Pacific Century acquired all their assets, along with the nonperforming ones, Houle said.
Nonperforming assets also grew since the start of this year because of the transfer of six loans totaling $19.5 million to nonperforming status. Included are two commercial real estate loans in Hawaii, totaling $14 million.
Many loans listed as nonperfoming -- because they are past due by 90-plus days or for other reasons -- are fully collectible and arrangements generally can be made to get them paid off or at least to get payments back on schedule, Houle said today. During the latest quarter the company wrote off two commercial and industrial loans, worth a total of $6.4 million, as no longer collectible.
Bank of Hawaii, Pacific Century's biggest subsidiary and the largest commercial bank in Hawaii, acquired Triad/IAG Insurance Agency in January, getting it into the property and casualty insurance business.
Johnson said the acquisition broadens the services that the bank offers.