Bank of Hawaii's third-quarter profits rose on stronger loan growth and a vibrant state economy — forces that helped it overcome declining mortgage banking income.
Net income for the $17.3 billion-asset company totaled $45.9 million, up 6% from the year-ago quarter. Earnings per share were $1.08, meeting analysts’ median estimates, according to FactSet Research Systems.
“Bank of Hawaii’s financial results remained strong through the third quarter of 2017,” Chairman and CEO Peter Ho said in a press release Monday. “Loan and deposit balances increased, asset quality remained solid, our net interest margin was stable, and our core expenses declined during the quarter.”
The state of Hawaii’s strong economy helped, too, with an unemployment rate of 2.5% and an 8.5% yearly increase in tourism spending during the first eight months of 2017. Single-family home and condo sales increased 5% and 5.8%, respectively, and median home and condo sales prices increased 3.4% and 5.4% through the first nine months of this year.
The Honolulu bank's net interest income totaled $119.2 million, up 12%. The net interest margin expanded 12 basis points to 2.92%.
Total loans and leases rose 10% to $9.6 billion. The commercial loan portfolio increased 6% to $3.7 billion, while consumer loans increased 12% to $5.8 billion. Total deposits increased 9% to $15 billion.
Noninterest income fell 12% to $42.4 million, largely due to a decline in mortgage banking income, which tumbled to $3.2 million from $6.4 million. It was not immediately clear why mortgage income fell even though home sales and prices had strengthened. The bank was scheduled to have a conference call to discuss its quarterly results Monday afternoon.
Noninterest expenses rose 1.3% to $88.6 million.
The company increased its provision for credit losses to $4 million from $2.5 million, to keep up with loan and lease growth. Net chargeoffs to total loans and leases rose 4 basis points to 0.15%.