Magazine article American Banker

2Q Earnings: Bank of Hawaii Tops Estimates

Magazine article American Banker

2Q Earnings: Bank of Hawaii Tops Estimates

Article excerpt

Bank of Hawaii Corp. said Monday that its second-quarter net income rose 28% from a year earlier.

Growth in fee revenue, continued expense discipline, and a large tax benefit fueled the increase, Bank of Hawaii said.

Net income of $47.7 million came to 95 cents a share, up a penny from the first quarter and 23 cents from a year earlier, the Honolulu company said. Analysts had expected earnings of 93 cents a share, according to Thomson Financial.

Though net income topped the estimate, it benefited from some unusual items.

Noninterest income rose 9% from a year earlier, to $58 million, and net interest income fell 1%, to $99.1 million, because of rising funding costs, the $10.7 billion-asset company said. It said fee income growth was widespread and included an 11% rise in trust and asset management fees and a 14% jump in deposit service charges.

"Fee income has been the source of revenue growth for us," Allan R. Landon, Bank of Hawaii's chairman and chief executive, said in an interview Monday.

Bank of Hawaii's efficiency ratio improved 57 basis points from a year earlier, to 50.88%. Noninterest expense fell 3% from the first quarter and rose 1% from a year earlier, to $79.8 million.

Expense control "is something we've been working on for a number of years, and it is something that is paying off in this environment now," Mr. Landon said. "But we continue to look for opportunities to grow. We would happily spend more if we could find good places to get a return. …

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