$9 million tax charge eats into Bank of Hawaii's income | The Honolulu Advertiser

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$9 million tax charge eats into Bank of Hawaii's income | The Honolulu Advertiser | Hawaii's Newspaper

Posted on: Tuesday, July 25, 2006

$9 million tax charge eats into Bank of Hawaii's income

Advertiser Staff

Bank of Hawaii's second-quarter 2006 net income fell 20 percent because of a one-time, $9 million charge brought on by new federal tax legislation.

BY THE NUMBERS

Net income: $37.2 million, down 20 percent from a year ago.

Per-share income: 73 cents, down 16.1 percent from a year ago.

Total assets: $10.33 billion, up 2.7 percent from a year ago.

Loans and leases: $6.44 billion, up 4.7 percent from a year ago.

Deposits: $7.77 billion, up 0.5 percent from a year ago.

REASONS

A new federal tax law eliminated an exemption for foreign operations, prompting the bank to take a one-time $9 million charge. Without the charge, the bank's second-quarter income would have been about $46 million.

The bank's net interest income dropped by $1 million to $100.1 million because of increased deposit costs.

Nonperforming assets dropped 50.8 percent to $5.4 million from a year-earlier's $10.9 million.

WHAT THEY ARE SAYING

"Our underlying financial performance continues to be strong despite the disappointing effect of this change in tax legislation. ... We are especially pleased with our commercial and consumer loan growth, asset quality and expense control."

Allan Landon
Chairman and CEO, Bank of Hawaii

WHAT'S NEXT

Bank of Hawaii said it expects to earn about $178 million for the full year, reflecting the company's strong credit quality and the continued growth in the local economy.

The bank's board of directors has authorized the company to buy back about $100 million of Bank of Hawaii stock.

Wall Street analysts expect the bank's stock to trade between $55 a share and $61 a share during the next 12 months.

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