Bank of Hawaii net income down 24.5% due to lawsuit settlement
By Dave Segal
Article from: Star- Advertiser
Bank of Hawaii Corp.’s earnings fell 24.5 percent in the second quarter amid a $9 million lawsuit settlement and a large investment securities gain a year earlier that didn’t occur in the most recent period.
The state’s second-largest bank said today that net income was $35.1 million, or 74 cents a share, compared with $46.6 million, or 96 cents a share, a year ago.
Revenue fell 15 percent to $147 million from $172.8 million.
Analysts were forecasting earnings per share of 78 cents, but excluding the tentative settlement arising from claims that the bank improperly charged overdraft fees on debit card transactions, the bank’s earnings per share would have easily beat forecasts at 86 cents, according to Sterne Agee analyst Brett Rabatin.
The bank also had a lower-than-normal tax rate of 29.1 percent last quarter compared with 34.4 percent a year ago. Had the tax rate been a more traditional 34 percent, the bank’s earnings per share would have been 81 cents, still above forecasts, Rabatin said.
Bank of Hawaii’s earnings also were affected by a net gain of $15 million in the second quarter of 2010 from the sale of investment securities. There were no investment securities sales last quarter.
“I’m very pleased with the operational direction of the company,” said Peter Ho, Bank of Hawaii’s chairman, president and CEO. “Unfortunately, this quarter in particular, there was so much noise in the numbers with the $9 million settlement and we’re (comparing) with last quarter and the second quarter of a year ago which had significant one-time securities gains.”
Ho cited solid loan growth, an increase in core loan deposits and improved credit quality among the highlights for the quarter.
Bankoh’s stock fell 21 cents, or 0.5 percent, to $46.14 on the New York Stock Exchange.