Bank of Hawaii CEO to retire


POSTED: Tuesday, April 20, 2010

Allan Landon, the unassuming leader of Bank of Hawaii Corp. who helped navigate the company's turnaround a decade ago and then built on that success, plans to retire during the second half of this year and turn over the reins to President Peter Ho.

The 62-year-old Landon, chairman and chief executive officer of the state's second-largest bank in terms of assets, disclosed his plans yesterday in conjunction with the release of the bank's first-quarter earnings, which soared 46.3 percent from the year-earlier quarter and blew past analysts' estimates.

Bankoh was helped by a net gain of $20 million from the sales of investment securities, as well as $2.8 million in net interest it received from a commercial real estate loan that the bank had written off several years ago.

Landon said the timing was right to step down and turn over leadership of the bank to Ho, whom Landon declared as “;ready.”;

“;It's probably a pretty good time,”; Landon said. “;Peter is the right guy to lead the bank, and it's a good time to get the next generation to take the reins. The decision is something we've been working on for a long time. We have a process here to make sure we have a successor for everyone on the management team.”;

Ho, 45, said he appreciated the confidence shown in him by Landon and the board of directors.


“;I consider myself fortunate to step into the role when the organization is in a position of strength—not only locally, but nationally. If you look across the banks locally, it's clear that transition is a big issue for many. We wanted to make sure we had certainty in our transition and we like the team we have in place. We have a tremendous team, and I'm excited to begin this transition.”;

Landon, who served as the chief financial officer under former Bankoh CEO and turnaround specialist Michael O'Neill before succeeding him in September 2004, said he hasn't decided yet what to do with his spare time.


“;It would be pretty hard to leave paradise,”; said Landon, whose total compensation in 2009 was $1.4 million, according to the latest company proxy. “;I've been here for 10 years. I'm the luckiest guy in the world. I get a great job in a beautiful place and work with wonderful people. I've got a few friends who say it's pretty hard to envision me drinking lemonade all day long, so we'll have to see what comes along and hopefully there will be other opportunities to do some interesting work.”;

Brett Rabatin, senior research analyst of Birmingham, Ala.-based Sterne Agee, said he wasn't surprised by the announcement.

“;It's a natural that Peter Ho is going to succeed him as CEO, and the transition makes a lot of sense,”; Rabatin said. “;Al's been a great steward and was very instrumental with Mike O'Neill when the company was going through its turnaround 10 years ago. I don't think it changes things much for what they're going to do from a shareholder perspective.”;

Bankoh's stock jumped $2.32, or 4.8 percent, yesterday to a 52-week high of $50.92 after the company reported earnings of $52.7 million, or $1.09 a share, compared with $36 million, or 75 cents a share, a year earlier. The bank's core earnings, which exclude the sale of the investment securities and the net interest recovery, was 82 cents a share. The consensus by analysts surveyed by Thomson First Call was for 63 cents a share and by FactSet was 69 cents a share.

Revenue rose 7.2 percent to $179.4 million from $167.4 million.

During the quarter, the bank set aside $20.7 million for potential loan losses, but it was less than the $26.8 million loan-loss provision in the fourth quarter of 2009 and the $24.9 million provision in the year-earlier first quarter.

“;The Hawaii economy is showing signs of stabilization,”; Landon said.

Analyst David King of San Francisco-based RBC Capital Markets Corp. called Bankoh's results “;a pretty good quarter.”;

“;The two biggest things were the higher (net interest) margin (3.72 percent compared with 3.57 percent in the fourth quarter) and continued deposit growth ($9.4 billion, up from $9.41 billion in the fourth quarter and $9.21 billion in the year-earlier quarter),”; he said.

Separately, the bank maintained its quarterly dividend at 45 cents a share. It will be payable June 14 to shareholders of record at the close of business on May 28.