Pacific Century sees rise in profits

By Frank Cho
Advertiser Staff Writer

Second-quarter profits quadrupled from a year ago for Bank of Hawaii's parent company as it eliminated bad loans, and sold its California subsidiary and other assets as part of a plan to focus business on Hawai'i.

Pacific Century Financial Corp. reported yesterday that net income for the three months ended June 30 was $26.7 million, or 32 cents a share, compared with $6.7 million, or 8 cents a share, in the 2000 quarter.

Still, the bank's earnings fell short of analysts' estimate of 36 cents a share, and its stock fell 2 percent to close at $24.90 yesterday in heavy trading of 1.2 million shares.

The bank said it will buy back as much as $70 million worth of shares, making existing shares more valuable.

Adjusted for one-time gains and other restructuring costs, the bank's core earnings per share for the quarter were 37 cents, on net income of $30.9 million.

"From an asset quality standpoint, they do appear to have turned the corner," said Jim Bradshaw, a Portland, Ore.-based analyst with D.A. Davidson.

Pacific Century has been operating under increased scrutiny from banking regulators since last year because of the amount of problem loans.

In a sign of how far Pacific Century has come in cleaning up its loan portfolio, the bank needed to set aside only about $6 million for credit losses in the second quarter, down from about $83 million in the year-ago quarter.

"That is the prime driver for the improved quarter," said Allan Landon, vice chairman and chief financial officer.

For the first six months, net income of $60.4 million was up 30 percent from the year-ago figure of $46.5 million. Total assets were $12.8 billion, which the company said was on track with its strategic plan.

The board declared a quarterly cash dividend of 18 cents per share on outstanding shares, payable Sept. 17 to shareholders of record as of Aug. 24.

Reach Frank Cho at fcho@honoluluadvertiser.com or 525-8088.