Bank of Hawaii reports record high earnings

Bank of Hawaii Corp.’s second-quarter net income totaled $54.7 million — $1.30 earnings per share, a record high for the state’s second-largest financial institution.

BOH reported Monday a 22.5 percent increase in net income, up from $44.7 million, or $1.05 earnings per share, in the year-earlier quarter.

“The Hawaii economy continues to perform well, due to a healthy construction pipeline in both the public and private sectors, continued strong performance in Hawaii’s tourism industry and rising real estate prices,” said BOH President and CEO Peter Ho in the bank’s quarterly earnings call.

Loans grew 7.1 percent to $10.1 billion at the end of the quarter from $9.4 billion a year earlier, while assets inched up 0.8 percent to $17.1 billion, compared with $17 billion a year earlier. Total deposits climbed 1.1 percent to $14.9 billion from $14.8 billion.

The bank’s revenue includes net interest income, the difference between what the bank takes in on loans and pays out on deposits, and noninterest income, derived mainly from service charges and fees. Net interest income rose 7 percent to $121.8 million compared with $115.3 million, while noninterest income fell 8.7 percent to $41.3 million from $45.2 million, largely due to lower mortgage banking income and declining service charges.

“BOH is a top performing, whistle-clean bank, operating in one of the most desirable markets in the U.S., ranking No. 2 in Hawaii with a 32 percent deposit market share,” Laurie Havener Hunsicker, an analyst for Compass Point LLC, wrote Monday in a research report. “BOH trades at a premium to its peers.”

Bank of Hawaii reported 12 loans affected by the lava from Kilauea Volcano (four mortgage and eight home equity) with loan exposure in the Puna district totaling $13.1 million. BOH’s total loan exposure on the Big Island is $719 million.

The bank’s stock price was up 0.1 percent to $84.66 on Monday. The financial results were released before the market opened.