Bankoh net
beats forecasts
Bank of Hawaii Corp. continued its momentum last quarter as net income rose 17.4 percent from a year ago and blew past analysts' estimates.
The Honolulu-based company, operating without its turnaround architect Michael O'Neill for the first time in nearly four years, posted third-quarter earnings yesterday of $43.1 million, or 78 cents a share. That beat the consensus of 74 cents forecast by 10 analysts, according to Thomson Financial. A year ago, Bank of Hawaii had net income of $36.7 million, or 61 cents a share.
"Bank of Hawaii had another good quarter and I am pleased by the ongoing improvement demonstrated by our financial results," said Allan Landon, the chairman, CEO and president of Bank of Hawaii.
Landon, who has been president since last December, assumed the other titles on Sept. 1 after O'Neill stepped down as chairman and chief executive.
"The Hawaii economy remains solid and we remain confident that we are well on the way to achieving the goals of our three-year plan," Landon said.
Bank of Hawaii also raised its forecast for this year's net income, saying it will range from $166 million to $168 million, up from the range of $163 million to $167 million that it had predicted at midyear.
The bank's board also boosted its dividend 10 percent to 33 cents a share from 30 cents a share. It will be paid Dec. 14 to shareholders as of Nov. 29.
"The Hawaii economy looks good, our net interest margin picked up this quarter, our credit quality is good and our expenses are under control," Landon said.
He said O'Neill left a good framework that he intends to follow.
"I try not to change a thing," he said. "What we have now seems to be working pretty well. We're just going to follow our strategy on focusing on Hawaii, our customers and growth. They're all pretty important to us and we'll continue to work on that."
Assets rose 2.4 percent to $9.6 billion from $9.4 billion a year ago. Total loans and leases gained 4.4 percent to $5.8 billion from $5.6 billion. Total deposits increased 4.4 percent to $7.4 billion from $7.1 billion a year ago. The company gained approximately 2,000 non-interest bearing checking accounts during the quarter from the previous quarter.
"The bank's dramatic improvement is pretty much behind us," Landon said. "The higher-risk strategies of changing our direction and focus are done and have paid off. Now, we're looking forward to good performance and steady, modest improvement."
Bank of Hawaii's net interest margin, which reflects the difference of what the bank pays depositors and what it brings in from loans, rose to 4.4 percent from 4.2 percent a year ago. Net interest income increased 8.4 percent to $98.8 million from $91.1 million a year ago.
Noninterest income, which includes revenue from service charges and fees, slipped 1.4 percent to $53.1 million from $53.8 million a year ago. Last quarter included a gain of $5.2 million on the sale of assets at the end of a leveraged lease transaction. The year-ago quarter included a $3.1 million prepayment fee on a commercial real estate loan.
Noninterest expense fell 5.3 percent to $84.2 million from $88.9 million a year ago. The year-ago period included $4.3 million in systems replacement costs.
