Higher noninterest expenses and lower net interest income drove down Bank of Hawaii's (BOH) quarterly earnings.

The Honolulu company reported a nearly 5% drop in profits, to $41.2 million, in the third quarter compared with a year earlier. Earnings per share remained flat at 92 cents, the $13.4 billion-asset company said Monday.

Noninterest expense was $84.9 million, up about 1%. That included an increase in profit sharing and incentive accruals of $1 million because profits rose from the second to the third quarter. It also included $1 million related to the launch of a new consumer credit card product. Mortgage banking expenses, including overtime and commissions, also increased.

Net interest income fell 3% year over year, to $93.6 million, as the net interest margin declined 11 basis points, to 2.98%. Net interest income was even with the second quarter.

Total loans were $5.8 billion, up 8% from a year earlier. The commercial portfolio rose 6%, to $2.2 billion, and consumer loans expanded 9%, to $3.6 billion.

Noninterest income was $52.4 million, up almost 3% from a year earlier as trust and asset management fees rose 2%, to $11.1 million. Mortgage banking noninterest income more than doubled to $11.7 million.

Bank of Hawaii did not record a provision for credit losses during the quarter compared with a charge of $2.2 million a year earlier. Net chargeoffs fell almost 60%, to $1.5 million, year over year.

For the first nine months of the year, Bank of Hawaii reported earnings of $125.8 million, up 4% from a year earlier.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.