Marriott to break ground for new hotel on Maui

A new 138-room Courtyard by Marriott hotel is expected to cost $16.5 million

By Andrew Gomes
Article from: Star-Advertiser

A decade-old plan to build a hotel near Maui’s main airport in Kahului is finally moving forward.

Participants in the venture led by Alexander & Baldwin Inc. announced that construction is slated to begin next week on a 138-room Courtyard by Marriott hotel. A groundbreaking ceremony is scheduled for today.

The project has long been desired by tourism officials who lament the lack of visitor accommodations near the airport, Maui’s commercial core and county government offices. But economic factors stalled development for several years.

A&B discussed the proj­ect publicly in early 2001, but after obtaining county approvals including a zoning change in 2002, the company declared in 2004 that it had deferred the proj­ect because of high construction costs.

Now A&B said the timing is right to build the hotel, which is estimated to cost $16.5 million.

“The economy is coming back,” Grant Y.M. Chun, vice president of the real estate subsidiary of A&B, said in a statement. “We are confident this hotel — long anticipated, for sure — will be a welcome and convenient option for short-term visitors from the neighbor islands, government officials desiring proximity to Wai­luku offices and, quite possibly sports event or family reunion attendees.”

Marriott expects the hotel will appeal to business guests, travelers and visitors interested in exploring Central and Upcountry Maui.

The four-story complex will include a business center, meeting rooms, a pool, fitness center, bar and lounge. The hotel also will include a guest laundry, surfboard storage and a convenience store.

The hotel will be the third Courtyard hotel in Hawaii. The others are in Waikiki and on Kauai. One is also planned for Laie. Overall, Marriott presently manages 14 hotel and time-share properties in Hawaii under the Courtyard and other brand names.

The Kahului hotel will be on a 3-acre site at the intersection of Dairy Road, Hale­akala Highway and Keo­lani Place, which leads to the airport.

R.D. Olson Construction, an Irvine, Calif.-based firm that has built Marriott hotels, is the contractor for the Maui proj­ect. A&B estimates that more than 50 jobs, including some for local subcontractors, will be needed to build the hotel.

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First Hawaiian has ‘respectable’ quarter

CEO Don Horner says his bank’s income rose amid “progress” in the state’s economy

By Dave Segal
Article from: Star-Advertiser

First Hawaiian Bank said its net income rose 2.6 percent in the first quarter amid signs that the Hawaii economy is turning around.

The state’s largest bank in terms of assets posted earnings of $52.7 million compared with $51.3 million in the year-earlier period, according to financial results due out today.

Chairman and CEO Don Hor­ner called the quarter “respectable” and said the bank’s overall fundamentals remain solid.

“We see continued prog­ress in our state’s economy and are hopeful the impact of the March 11 tragedy in Japan will not be as severe as first predicted,” Hor­ner said. “A strong tourism sector is an important contributor to lead our economic recovery.”

Earlier this month, First Hawaiian released a first-quarter business activity report that showed retail spending by consumers increased 10.2 percent over the same period a year ago at businesses open at least a year. The bank is the state’s largest provider of merchant card terminals and debit and credit card proc­ess­ing with more than 7,500 merchant locations in Hawaii, Guam and the Commonwealth of the Northern Mari­ana Islands.

First Hawaiian’s assets last quarter increased 6.3 percent to $15.2 billion from $14.3 billion.

Deposits were up 5.8 percent to $10.8 billion from $10.2 billion, and loans and leases edged up 2.8 percent to $8.2 billion from $8 billion.

The percentage of nonperforming assets to total assets remained low at 0.2.5 percent compared with 0.23 percent a year ago.

The bank’s capital, or net worth, at the end of thequarter was in excess of $2.6 billion and remained in the top quartile nationally as a percentage of total assets.

First Hawaiian, a wholly owned subsidiary of French banking giant BNP Pari­bas, is not required to separately report its earnings, but does so voluntarily each quarter.

The Honolulu-based bank, founded in 1858, has 58 branches in Hawaii, three on Guam and two on Saipan.

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Bankoh net falls but tops forecasts

CEO Peter Ho says an improving Hawaii economy is leading to better credit quality

By Dave Segal
Article from: Star-Advertiser

Bank of Hawaii Corp. said its loan portfolio and interest margins are continuing to benefit from the state’s improving economy.

Hawaii’s second-largest bank in terms of assets blew past analysts’ first-quarter earnings estimates by 16 cents yesterday even as net income fell 19.7 percent from the year-ago period.

Bank of Hawaii had earnings of $42.4 million, or 88 cents a share. Analysts had expected the bank to earn 72 cents a share. A year earlier, the bank earned $52.7 million, or $1.09 a share, but that included net gains of $20 million from the sale of investment securities. Last quarter, the bank had securities gains of just $6.1 million.

Peter Ho, chairman, president and CEO of Bank of Hawaii, said he was pleased with the first-quarter results, adding that the improving economy in Hawaii was largely behind it.

“All roads go back to the economy,” Ho said. “We have seen for several quarters now continued improvement in the Hawaiian economy, and that’s 90 percent of our business and hugely important for us.”

Ho said the bank has started to see increased activity in its business segments, particularly on the consumer front and in the stabilization of real estate values.

“We think there’s reason for cautious optimism from an economic standpoint here in the islands, and that is obviously impacting our credit quality in a positive way,” Ho said. “We’ve logged improvement in credit quality for at least three quarters now, and our assumption is we’ll continue to see that. I guess the big ‘X factor’ is what happens with the Japanese situation. We’re obviously concerned like the rest of the community, but it’s a little too early to determine how much an impact that will have on the economic recovery.”

Bank of Hawaii’s stock, which traded as high as $49.22 yesterday, ended off 28 cents, or 0.6 percent, to $47.39.

The securities gains came from the bank trying to take the risk out of its balance sheet by selling longer-term government securities in favor of shorter-term securities due to the rising interest-rate environment. Rising interest rates also helped the bank improve its net interest margin, which is the difference between what it pays depositors and what it brings in from loans. Bank of Hawaii’s net interest margin was 3.24 percent in the first quarter. That was worse than the 3.72 percent in the year-earlier quarter but better than the 3.15 percent in the fourth quarter.

Analyst Brett Rabatin of Birmingham, Ala.-based Sterne Agee said credit quality and better margins “drove the quarter in terms of upside.”

“I think it was a good quarter in a still-challenging environment,” Rabatin said. “Bank of Hawaii obviously had stellar asset-quality trends through the downturn. Their credit quality never got to be peer-like because they had less exposure to high-risk borrowers and loan types like construction. So they’ve definitely seen lower charge-offs from consumer trends and nonperforming assets. Generally, I think that’s indicative of an improving economy.”

Bank of Hawaii set aside just $4.7 million to cover potential loan losses in the first quarter, compared with $20.7 million a year earlier and $5.3 million in the fourth quarter of 2010.

Total assets rose 4.2 percent to $13 billion from $12.4 billion. First Hawaiian Bank ranks first in the state in total assets with $15.2 billion.

Loans and leases declined 5 percent to $5.3 billion from $5.6 billion. And deposits gained 4.4 percent to $9.9 billion from $9.5 billion.

Revenue fell 14.4 percent to $153.6 million from $179.4 million. Net interest income declined 7.4 percent to $99.7 million from $107.7 million. Noninterest income, which includes money earned from fees and charges, fell 24.9 percent to $53.9 million from $71.8 million.

Ho said the bank generated $2 million less in debit card overdraft fees last quarter from the year-earlier period after a federal law went into effect in the middle of last year that required consumers to give their permission for banks to assess overdraft charges.

The bank also maintained its quarterly dividend at 45 cents a share. It will be payable June 14 to shareholders of record as of the close of business on May 31.