Bank of Hawaii Corp. reported a 37 percent drop in first quarter income, reflecting continued weakness in the state's economy.

The company earned $36 million, or 75 cents per share, during the three months ending March 31, down from $57.2 million, or $1.18 per share, in the year-earlier period.

The results were largely in line with Wall Street's expectations. Analysts surveyed by First Call had forecasted earnings of 74 cents per share.

Bank of Hawaii's stock dropped $3.51 yesterday to close at $32.89 on the New York Stock Exchange.

"Our profitability remained solid even as business activity in Hawai'i slowed," said Allan Landon, Bank of Hawaii's chairman and CEO. "Bank of Hawaii has a strong balance sheet and is well prepared for future economic developments and opportunities."

The bank said deposits increased by $921 million to $9.2 billion at the end of the quarter, while total assets were up by $625 million to $11.45 billion.

Total loans and leases were down $241 million to $6.34 billion at the end of the first quarter. Bank of Hawaii said its allowances for loan and lease losses rose by $11 million from the year-earlier quarter.

The year-to-year income comparisons are skewed by $25.3 million in one-time gains during the first quarter of 2008. The gains came from the sale of Bank of Hawaii's stake in Visa and the early buyout of an aircraft lease.