In a tough year for the nation's banking industry, Bank of Hawaii Corp. outshone its peers, according to a new study.

In an annual survey dubbed the "All-Star Banking Team," US Banker magazine rated Bank of Hawaii as the nation's top performing large bank thanks in large part to its recent cost-cutting efforts and robust profit margins, which topped 45 percent during the third quarter.

The magazine said Bank of Hawaii led all U.S. banks with a return on equity of 26.96 percent, outpacing the second place finisher, TCF Financial Corp. of Minnesota, which had a return on equity of 25.03 percent.

US Bancorp was third with an ROE of 22.16 percent.

"It sure helps to have a solid economy and a good marketplace," said Allan Landon, Bank of Hawaii's chairman and chief executive officer.

Bank of Hawaii's lack of exposure to the subprime lending crisis, which sent earnings and stock prices of major Mainland lenders plunging, also helped.

The bank's strong ties to the Asia markets were another benefit, the magazine said.

"The Hawaiian banks are benefiting from a wave of Asian money pouring in through tourism and business ventures," Mark Fitzgibbon, director of research for Sandler, O'Neill & Partners, told the magazine.

"With the dollar so weak, there's been a big influx of activity."

Founded in 1897, Bank of Hawaii is the state's second largest financial institution with assets of more than $10.5 billion and 71 branches in Hawai'i.

US Banker is a leading trade magazine and is a sister publication of the American Banker newspaper. The magazine's study looked at the finances of the nation's largest publicly traded banks and did not include First Hawaiian Bank, the state's largest financial institution, which is a unit of BancWest Corp.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.

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