Bank of Hawaii Reports Continued Neighbor Island Delinquencies

File photo.

By Sonia Isotov

Bank of Hawaii yesterday reported earnings and income gains, despite a continued and increasing delinquencies from consumer loans and leases, and particularly from residential first mortgage and home equities on the neighbor islands.

Accruing consumer loans and leases that were past due 90 days or more were $10.9 million at the end of September 30, 2011, up from $7.8 million at June 30, 2011 and $10.5 million at September 30, 2010.  Residential first mortgage and home equity delinquencies continue to be centered on neighbor islands.

Restructured loans not included in non-accrual loans or accruing loans past due 90 days or more were $33.1 million at September 30, 2011 and primarily comprised of residential mortgage loans with lowered monthly payments to accommodate the borrowers’ financial needs for a period of time.

Peter Ho, President and CEO, Bank of Hawaii. Courtesy photo.

“Our balance sheet remained strong, with high levels of capital and liquidity and adequate reserves. Revenues continue to be challenged by lower interest rates at the net interest income line, and by changes due to regulatory rulings of the non-interest income line. Our expenses all remain well controlled and our asset quality remains a strength for the organization. Return on assets for the quarter was just a touch ahead of 1.3%, and return on equity was 16.8%,” said Peter Ho, president and chief executive officer, Bank of Hawaii, in the bank’s quarterly corporate earnings conference call with analysts and investors yesterday.

Bank of Hawaii Corporation yesterday reported earnings per share of $0.92 for the third quarter of 2011, up $0.18 per share from $0.74 in the previous quarter.  Net income for the third quarter of 2011 was $43.3 million, up $8.2 million compared to net income of $35.1 million in the second quarter of 2011.

Deposit growth remained strong during the third quarter, increasing to above $10.0 billion at September 30, 2011. Loan and lease balances were flat for the quarter as growth in commercial lending was offset by weak consumer loan demand.  The allowance for loan and lease losses decreased by $1.6 million to $143.4 million and represents 2.68% of outstanding loans and leases.