Posted on: Tuesday, April 24, 2001
Pacific Century reports net drop
By Frank Cho
Advertiser Staff Writer
Pacific Century Financial Corp., parent company of Bank of Hawaii, said first-quarter net income fell 15.3 percent, reflecting higher loan provisioning and lower fee and interest income.
The Honolulu-based bank holding company said net income for the quarter ended March 31 was $33.7 million, or 42 cents a share, down from $39.8 million, or 50 cents, in the same year-earlier period.
Earnings for the first quarter included a one-time gain of $75.4 million from the sale of its $209 million credit card portfolio in March, and $20.9 million related to the sale of its interest in Star Systems Inc.
But the company also recorded $97.7 million in loan losses during the quarter. Provisioning for loan losses increased 288 percent to $52.5 million, compared with $13.5 million in the year-earlier quarter.
Nonperforming assets fell 34.7 percent to $119.5 million from $183 million at the end of 2000.
"The first quarter's results clearly demonstrated that we are delivering on our intent to resolve credit issues and position the company for improved financial performance," said Michael O'Neill, Pacific Century's chairman and chief executive.
"The company's next 12 to 18 months will be a transition period for us," O'Neill said. "The company's size, market franchise and business mix will change and the company's underlying performance is being positioned for improvement."
The net earnings were in line with analysts' estimates of between 33 cents and 44 cents a share. Its stock rose 94 cents to $22.10 in trading today.
Net interest income for the quarter was $134.1 million, down from $139.8 million in the same quarter a year ago, mostly because of higher interest paid on timed deposits and other borrowings, and $2.4 million in losses from lease residuals.
When gains from the sale of credit card and securities sales are excluded, non-interest income, adjusted for a $3.3-million write-down in an equity investment, stands at $62.5 million.
