Fees help boost net at Bankoh

The company beats analysts’ earnings forecasts by a penny

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Bank of Hawaii Corp.'s net income increased 1.8 percent in the third quarter on the strength of revenue generated from fees and other charges.

The bank said yesterday it had net income of $47.8 million, or 96 cents a share, compared with $46.9 million, or 92 cents a share, a year earlier.

Analysts had been looking for 95 cents a share.

Revenue rose 1.6 percent to $159.8 million, with noninterest income up 7.7 percent. Net interest income fell 1.8 percent.

Bank of Hawaii Corp. said yesterday that net income rose 1.8 percent in the third quarter on the strength of revenue from trust and asset-management fees, mortgage banking, service charges on deposits, and insurance.

Third-quarter net: $47.8 million Year-earlier net: $46.9 million

The state's second-largest bank in terms of assets posted earnings of $47.8 million, or 96 cents a share, versus $46.9 million, or 92 cents a share, a year earlier. That was 1 cent better than analysts' estimates.

Revenue rose 1.6 percent to $159.8 million.

"Due to concerns about asset quality, market conditions and liquidity were quite challenging in the third quarter," Bank of Hawaii Chairman and Chief Executive Allan Landon said. "The bank had little difficulty managing through those conditions."

Noninterest income, which includes fees and service charges, rose 7.7 percent to $61.2 million from $56.9 million.

Net interest income, reflecting the difference between what Bankoh pays depositors and what it brings in from loans, slipped 1.8 percent to $98.6 million from $100.4 million.

The bank's net interest margin fell to 4.03 percent from 4.20 percent a year ago.

Assets increased 1.7 percent to $10.6 billion from $10.4 billion. Loans and leases grew 1.7 percent to $6.6 billion from $6.5 billion. And deposits gained 2.4 percent to $7.9 billion.

"The results are about what we expected in that profitability was pretty stable with the net interest margin only down a little bit (from 4.12 percent in the second quarter), and asset quality was a nonevent," FTN MidWest Research analyst Brett Rabatin said.

Nonperforming assets were $4.3 million, down from $5.4 million a year ago.

The bank increased its provision for credit losses to $4.1 million from $2.8 million, primarily due to higher losses from automobile loans that the bank had purchased from dealers.

Separately, the bank's board of directors boosted the stock dividend 7.3 percent to 44 cents from 41 cents. It will be payable Dec. 14 to shareholders of record at the close of business on Nov. 30.

The board also increased the authorization under the bank's share repurchase program by an additional $100 million.