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. The per share income was higher last quarter because a share buyback in the quarter meant there were fewer shares outstanding.

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, a 19 percent increase from a year ago.

"I'm feeling good," O'Neill said. He said nearly three years ago, when he was hired, the bank announced a plan to improve asset quality, get rid of operations not carrying their weight and replace the technology system.

"We have accomplished all three," he said. "We are formulating a new three-year plan that we will make public in January."

The total cost of the new technology system is expected to be a bit more than $35 million. The bank has paid about $31 million and expects to pay the last $4.4 million in this quarter. The bank said its seven-year outsourcing agreement with Metavante Corp. should reap annual cost savings of more than $17 million. The bank has said it would lay off about 200 employees as it shifts to the new system.

Some Bank of Hawaii customers complained they couldn't access their accounts by phone or ATM after the bank converted accounts to the new system 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. In trading yesterday, Bank of Hawaii shares fell 20 cents to $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.

O'Neill said the increased dividend along with buying back more shares and increasing operating income are the three ways he intends to increase shareholder value.

During the second quarter, the bank repurchased 2.2 million shares of common stock at a total cost of $73 million. From the beginning its current stock repurchase program to the end of the second quarter, the bank has bought 25.2 million shares. Share repurchases reduce the number of outstanding shares, which raises the earnings per share and thus raises the company's stock price.

In the first half 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 because of reductions in short-term investments as excess liquidity was used 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 percent, from nonperforming 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.