Bankoh parent’s First-quarter net profit at Bank of Hawaii parent Pacific Century Financial Corp. dropped 15.3 percent to $33.7 million, compared to $39.8 million in the first quarter of 2000, the company said today.
net drops 15.3%
Sales of its credit card unit
Bankoh cutting jobs, non-Hawaii operations By Russ Lynch
and a secured-payment
network help Pacific Century
stay out of the red
Star-Bulletin
And the earnings statement shows that the company was saved from posting a loss by two unusual income items in the quarter.
One was a profit of $75.4 million from the sale of its credit card business to American Express and the other was a gain of $20.9 million from the sale of Star Systems Inc., a large national secured-payments network in which Pacific Century held a small stake.
Per-share net income in the latest quarter, including those one-time gains, was 42 cents, down 16 percent from 50 cents in the first quarter of last year.
On the plus side, Pacific Century said its ongoing effort to improve the quality of its assets allowed it to reduce non-performing assets 12.4 percent to $119.5 million at the end of the latest quarter from $136.4 million a year earlier.
The company said non-performing assets are at the lowest level since March 1998.
Pacific Century's stock jumped 94 cents, or 4.4 percent, to $22.10 today on the New York Stock Exchange. Its stock is up 25 percent since Jan 1.
"The first quarter's results clearly demonstrated that we are delivering on our intent to resolve credit issues and position the company for improved performance," said Michael E. O'Neill, Pacific Century chairman and chief executive officer.
Along with the earnings statement, O'Neill issued a new corporate strategic plan that will dispose of some business outside Hawaii and allow it to concentrate on its core business in the islands.
The process of improving asset quality incurred major expenses in the latest quarter, taken now to improve future performance. Pacific Century wrote off $97.7 million in the 2001 quarter, such as charging off $66.7 million in loans its shared with other banks in international syndicates, $10 million in commercial real estate loans and $5.6 million in foreign loans.
Recognizing the bad loans, the company increased its provision for possible future loan losses to $52.5 million in this year's first quarter, from $13.5 million in the same quarter of 2000.
In its ongoing operations, Pacific Century's first-quarter net interest income dropped 4.1 percent to $134.1 million this quarter, from $139.8 million last year. The company's assets, loans and deposits as of March 31 were all down from last year. Assets were $13.7 billion, down 3.8 percent from a year-earlier $14.3 billion. Net loans of $8.5 billion were down 8.7 percent from $9.3 billion and deposits of $8.8 billion were down 3.6 percent from $9.1 billion.