HONOLULU, Hawaii-Bank of Hawaii Corporation yesterday reported diluted earnings per share of $0.92 for the third quarter of 2012, up $0.02 from diluted earnings per share of $0.90 in the second quarter of 2012 and unchanged from diluted earnings per share of $0.92 in the third quarter of 2011. Net income for the third quarter was $41.2 million, up $0.5 million compared to net income of $40.7 million in the previous quarter, and down $2.1 million from net income of $43.3 million in the same quarter last year.
Loans grew 2.0 percent during the third quarter with loan and lease balances increasing to $5.78 billion at September 30, 2012. Total deposits declined during the third quarter of 2012 due to management's planned reduction in government time deposits. The net interest margin remained stable at 2.98 percent. The allowance for loan and lease losses decreased by $1.5 million to $131.0 million and represented 2.27 percent of outstanding loans and leases at September 30, 2012.
"Bank of Hawaii Corporation had good results for the third quarter of 2012," said Peter S. Ho, Chairman, President, and CEO. “We were pleased to see the growth in total loans this quarter and strong mortgage banking results. Our overall credit quality is improving, which allowed us to further reduce our reserves. Capital continues to be strong.”
The return on average assets for the third quarter of 2012 was 1.22 percent, up from 1.19 percent in the second quarter of 2012. The return on average equity for the third quarter was 16.02 percent compared to 16.19 percent for the previous quarter. The efficiency ratio for the third quarter of 2012 was 58.13 percent compared to 56.77 percent in the previous quarter.
For the nine months ended Sept. 30, 2012, net income was $125.8 million, up $5.0 million compared to net income of $120.8 million for the same period last year. Diluted earnings per share were $2.77 for the nine-month period in 2012, up $0.23 from diluted earnings per share of $2.54 for the same period in 2011. The year-to-date return on average assets was 1.23 percent compared to 1.24 percent for the same period in 2011. The year-to-date return on average equity was 16.49 percent, up from 15.85 percent for the nine months ended September 30, 2011. The efficiency ratio for the nine-month period ended September 30, 2012 was 57.76 percent, down from 58.86 percent for the same period last year.
Results for the nine months ended Sept. 30, 2012 included a gain of $3.5 million on the early termination of leveraged leases for two cargo ships offset by a loss of $1.0 million on the sale of an aircraft lease, expenses of $1.2 million for the final phase of a refresh of the Company's personal computers, and expenses of $1.0 million related to the launch of a new consumer credit card product. Results for the same period in 2011 included net gains of $6.1 million on the sales of investment securities and a gain of $2.0 million related to a contingent payment from the sale of the Company's proprietary mutual funds in 2010. These gains were offset by a litigation settlement of $9.0 million and a $2.0 million donation to the Bank of Hawaii Foundation. (BOH)