A Wall Street analyst has cut his 2009 earnings forecast for Bank of Hawaii, citing the weakening local economy and increase credit exposures.

But Morgan Stanley’s Ken Zerbe noted that the bank continues to have a strong capital and reserve position, high quality funding sources and minimal exposure to a construction downturn.
Zerbe lowered his estimate for Bank of Hawaii’s 2009 earnings from $2.51 per share to $2.33 in a report today.
“We continue to view BOH as a well-run, conservative bank that has been largely isolated from many of the Mainland credit problems, at least up until recently,” Zerbe wrote.
“Following our meeting with management, we expect the pace of credit deterioration to increase, including potentially large increase in charge-offs during 2Q09.”