Bank of Hawaii (NYSE:BOH) said the island's stabilizing economy and slowly improving credit quality helped the bank achieve a better-than-expected third-quarter profit.
The Honolulu-based bank posted net income of $44.1 million, or 91 cents a share, compared with $36.5 million, or 76 cents a share, in the same quarter last year.
Earnings were ahead of average analyst estimates polled by Thomson Reuters of 79 cents.
“The Hawaii economy remains stable and we are pleased with our year-to-date financial results, including our improved credit quality,” said Bank of Hawaii CEO Peter S. Ho.
Interest income was $98.8 million, down from $109.2 million in the year-earlier period, due largely to lower interest rates and loan balances, offset partially by slight growth in deposits.
“We are hopeful that our loan balances will begin to stabilize in the near future although we remain cautious about revenue headwinds resulting from financial reform legislation, the possibility of lower interest rates, and the ability to generate sustained future loan growth,” Ho said.
The company improved on credit losses, down to $13.4 million from $7.5 million a year ago, while charge-off fell slightly to $13.4 million from $22.3 million in the fiscal 2009 period.
“Overall credit quality reflected the slowly improving Hawaii economy during the third-quarter of 2010,” the company said in a statement, attributing growth to an improving tourist industry.
During the period April through July, visitors to Hawaii increased 8.4% compared with the prior year period.