Bank of Hawaii Corp., the No. 2 bank in the state, reported fourth-quarter net income that was 20 percent lower than a year earlier's results as it took charges to cover its share of lawsuit liabilities as a member bank of Visa U.S.A. Inc. anti-trust litigation and $1.7 million in expenses related to customer fraud loss.

The company said earnings fell to $40.9 million, or 83 cents a share in the three months ended Dec. 31. A year earlier it had recorded a profit of $50.9 million, or $1.01 cents a share.

"The company achieved its primary performance objectives for 2007 in spite of the increased expenses recognized in the fourth quarter," said Allan Landon, Bank of Hawaii chairman and chief executive officer, in a statement.

"The Hawaii economy appears stronger than other regions of the U.S. economy and, as we begin 2008, the Bank of Hawaii is well positioned to address the challenges ahead," Landon said.

The company also told analysts and investors on a conference call that the Hawai'i economy looks "pretty solid" as 2008 begins and said that visitor industry clients are fairly positive about the next several months. It also said the outlook could change if the Mainland economy slows appreciably, affecting the Hawai'i economy.

The company would have earned 90 cents a share if not for the lawsuit costs. Five analysts surveyed by Bloomberg L.P. had expected Bank of Hawaii would report a profit of 94 cents a share on this basis. The bank's shares rose 31 cents to $47.91.

Bank of Hawaii, which has restricted ownership shares in Visa, said the bottom-line results included a $5.6 million pretax expense, or 7 cents a share, for its portion of the Visa anti-trust lawsuit. The bank said it may recoup some of this in the future as Visa sells shares in a public offering.

The 2006 fourth-quarter results included tax accrual adjustments of $6.2 million, or 12 cents a share.

The bank's also reported: