Bank of Hawaii achieves record quarterly profit

An improved outlook on loan performance helped Bank of Hawaii Corp. earn a record quarterly profit in the three months ended June 30.

The state’s second-largest bank reported Monday that it earned $67.5 million in the second quarter.

This profit compared with $38.9 million in the same quarter a year earlier and was a record for any previous quarter in the bank’s history.

Bank of Hawaii also set records for deposits and assets in the April-June period as consumers and businesses poured over $2 billion into the financial institution during the quarter.

“Core loans and deposits continue to grow, and asset quality remains solid,” Peter Ho, the bank’s chairman, president and CEO, said in a statement. “Bank of Hawaii Corporation continued to perform well during the second quarter of 2021.”

The bank said consumer deposits rose by $1 billion, or 12%, to $9.8 billion in the second quarter from $8.8 billion in the same quarter of 2020. Commercial deposits rose by $1.4 billion, or 19%, to $8.7 billion in the recent quarter from $7.3 billion a year earlier. Other deposits, which include public funds, rose by $284 million, or 21%, to $1.6 billion from $1.4 billion in the same comparable period.

Total deposits for the bank increased 16% to an all-time-high of $20.2 billion in the second quarter from $17.4 billion a year earlier.

Bank of Hawaii also said total assets rose to a record $22.7 billion in the second quarter from $19.8 billion in the same quarter of 2020.

The bank said an assessment of the quality of its assets, which include loans, continues to improve and resulted in $16.1 million being removed from a reserve to cover potential credit losses. This reduction helped boost the bank’s second-­quarter profit and was the second consecutive quarterly withdrawal from the reserve following a buildup last year as the local economy was battered by impacts from the corona­virus pandemic.

During the second quarter of 2020, Bank of Hawaii added $40.4 million to its reserve for credit losses.

Net interest income, which is the difference between what the bank generates from loans and pays out in deposits, slipped about 3% to $123.5 million in the second quarter from $126.7 million a year earlier, partly due to lower interest rates.

Bank of Hawaii’s noninterest income, which includes charges and fees, fell roughly 13% to $44.4 million in the recent quarter from $51.3 million a year earlier. The bank said the decline was largely due to a $14.2 million gain in the year-ago quarter from selling stock in Visa, which topped a $3.7 million gain in the recent quarter from selling investment securities.

Shares of Bank of Hawaii stock closed at $83.24 Monday after company financial results were released, up from $82.13 on Friday.

The bank’s board of directors declared a quarterly cash dividend of 70 cents per share of common stock that is payable Sept. 15 to shareholders of record at the close of business Aug. 31.

The dividend represents an increase from 67 cents previously.

SECOND-QUARTER NET

$67.5 million

YEAR-EARLIER NET

$38.9 million