The bank said net income for the three months that ended June 30 was $30.03 million, or 48 cents per diluted share, down from $31.02 million, or 42 cents, in the second quarter last year.

Michael O’Neill, chairman and CEO, said he was pleased with the results, adding that had it not been for the expense related to the technology conversion, the bank would have earned about $37 million in the quarter.

O’Neill said nearly three years ago when he was hired, the bank announced a three-year plan to improve asset quality, get rid of operations not carrying their weight and replace the technology system. “We have accomplished all three,” O’Neill said in an interview. “I’m feeling good. We are formulating a new three-year plan that we will make public in January.”

The second-quarter results were an improvement on the first quarter, when net income was $29.8 million, and the bank spent only $7.4 million on its systems conversion.

Some Bank of Hawaii customers complained they couldn’t access their accounts by phone or ATM after the bank completed the systems conversion July 7.

O’Neill said the problems with the ATMs have been resolved as well as most other problems. “When you do something with this kind of scope, it is virtually impossible to not impact some customers. It was a relatively small number of customers that were impacted. Virtually all issues raised have been addressed,” he said.

The bank’s earnings met Wall Street estimates of 48 cents a share. Its stock price fell 20 cents today to close at $33.84. The bank’s shares have risen 11.35 percent this year.

The bank also said it would pay a dividend of 19 cents a share on Sept. 15 to shareholders of record as of Aug. 22. The company said it anticipates that an increase in the dividend, which has been steady at 19 cents for four quarters, will be announced with the third-quarter earnings release.

During the second quarter of 2003, Bank of Hawaii repurchased 2.2 million shares of common stock at a total cost of $73 million.

In the first of this year, the bank’s total assets fell 2.8 percent to $9.55 billion from $9.82 billion a year ago. The bank said total assets decreased $273 million due to reductions in short-term investments as excess liquidity was utilized for share repurchases and debt reduction that offset loan growth.

Nonperforming assets were $42.0 million at the end of the quarter, a decrease of $2.2 million, or 5.0 percent, from non-performing assets of $44.2 million at the end of the previous quarter.

The bank’s net interest margin, or the difference between what it pays to borrow money and what it earns lending it, was 4.12 percent in the second quarter, up from 3.97 percent a year ago.

The bank said commercial loans declined slightly from the previous quarter as managed reductions in syndicated lending and lease financing offset growth in Hawai‘i commercial lending. The decrease in consumer loans was largely the result of reductions in residential mortgages as the bank returned to selling new loans in the secondary market. O’Neill said the bank sold its housing loans because rates had dropped so far it became more attractive to take a one-time fee from selling the loan than to continue earning the interest.