Charges lower Bankoh earnings
By John Duchemin
Advertiser Staff Writer
Bank of Hawai'i Corp. earnings dropped slightly in the first quarter of 2003 because of millions of dollars in one-time charges.
Net income for the $9.5 billion bank was $29.8 million in the quarter, down from $31.1 million in first-quarter 2002, the company announced yesterday.
Because of an expensive computer system renovation project, the bank took a $7.4 million one-time charge in the first quarter of this year. Excluding one-time charges, the bank's earnings increased by several million dollars.
The bank also reported improved credit quality and increased deposits.
Credit quality has steadily improved since late 2000 as the bank has charged off, divested or recovered tens of millions of dollars in bad loans and other non-performing assets. Non-performing assets fell to $44.2 million at the quarter's end, compared to $90.7 million at the end of first-quarter 2002.
Deposits grew to $6.9 billion, up from $6.5 billion the previous year.
Assets — which include loans and other income-earning items — fell from $10.2 billion to $9.4 billion, as the bank used hundreds of millions of dollars in accumulated cash and short-term securities to pay down debt and buy back stock.
Despite the overall drop in income, the bank saw per-share earnings increase. Bank of Hawai'i earned 47 cents per share of stock in first-quarter 2003, compared to 41 cents per share last year.
The per-share amount rose because the bank has repurchased hundreds of millions of dollars in stock in the past year, meaning the profits are spread over fewer shares.
The results were on target with analysts' estimates, which called for per-share earnings between 45 cents and 48 cents. Bank of Hawaii forecasts earnings of $131 million this year.
In other Bank of Hawaii news, company chairman and chief executive Michael O'Neill clarified a stinging remark he made last week about Central Pacific Bank chairman Clint Arnoldus, who had earlier offended O'Neill. In the Bank of Hawaii shareholder's meeting last week, O'Neill suggested Arnoldus would make a good finance minister for Iraq.
O'Neill said he was responding to an earlier Arnoldus allegation that Bank of Hawaii, the state's second-largest bank, is less "local" than Central Pacific, the fourth-largest banking company.
"I was not attacking, I was counterpunching," O'Neill said. "It's not our style to talk about our competitors, but if they shoot a volley at us, we're not going to just sit here."
