Al Landon’s swan song as the leader of Bank of Hawaii Corp. turned out to be a strong quarter.

On a day in which the bank reported a 50.2 percent jump in second-quarter earnings, the 62-year-old Landon said he was stepping down as chairman and chief executive officer on Friday.

Landon said in April he was retiring in the second half of this year, but had given no specific date. Taking over as chairman and CEO will be President and Chief Banking Officer Peter Ho, 45.

"Peter’s going to be super for the Bank of Hawaii," Landon said yesterday. "He’s a great banker, he’s a fine leader, he knows our market, he’s steady and balanced."

The change in leadership should have little impact on the bank’s operations from a shareholder’s perspective, said senior research analyst Brett Rabatin of Birmingham, Ala.-based Sterne Agee. "It’s an orderly baton pass from one good manager to another, so I don’t think it will change how Bank of Hawaii operates," Rabatin said.

Landon said he sold his Kahala home last week and plans to move next week with his wife, Sue, to their Park City, Utah, condominium to be closer to family. He said he has no specific plans.

"We have a superb team here, and Bank of Hawaii’s in great shape," Landon said.

It wasn’t always that way. In the 1990s the bank, then known as Pacific Century Financial Corp., had stretched itself thin with overseas and mainland expansion, and earnings were being eroded by an underperforming loan portfolio.

Michael O’Neill began the bank’s turnaround when he joined as CEO in November 2000. He transformed the bank into a leaner and more efficient operation, elevated earnings to record highs and increased shareholder value nearly fourfold.

Landon continued that momentum with solid quarterly results, and in December the bank was named "America’s Best Bank" by Forbes magazine.

Last quarter, Bank of Hawaii benefited from a $15 million net gain on sales of investment securities, which helped lift earnings to $46.6 million, or 96 cents a share, compared with $31 million, or 65 cents a share, a year ago. The bank also received $1.2 million from the sale of leased equipment in the quarter. Analysts’ consensus was 74 cents a share, excluding one-time benefits, according to First Call. Excluding those nonrecurring items, Rabatin said Bank of Hawaii’s earnings were in line with expectations.

Revenue rose 6.2 percent to $172.8 million from $162.7 million. Total deposits edged up 3.4 percent to $9.32 billion from $9.02 billion, and total assets grew 5.4 percent to $12.86 billion from $12.19 billion.

But loans and leases slumped 11.5 percent, or $709 million, to $5.44 billion from $6.15 billion.

"We’re in the same boat as a lot of banks right now," Ho said. "Our loan growth isn’t as robust as we’d like it, and there are a lot of reasons behind that. On the commercial front we just haven’t seen a healthy resumption in investment, which is what drives loan demand. Until we get people willing to invest back in the marketplace, we’ll be a little bit hamstrung. Businesses are also still maintaining a pretty conservative posture, and there’s a tendency in the marketplace to hang on to cash and pay down debt.

"On the consumer front, it shouldn’t really come as a surprise that consumers are pretty conservative and reducing debt loans rather than increasing debt loans," Ho said. "At some point the pendulum will swing the other way, but it may take us a while before we get there."

Still, the bank sees signs that the economy is gradually improving, and plans to buy back its own shares during the third quarter, which will raise the value of remaining shares.

"We think our capital level has reached a point of adequacy, given the environment, such that it’s an appropriate time to begin the buyback program," Ho said. "We just won’t jump in with both feet and will take a measured approach."

Ho will receive an annual base salary of $750,000, the same salary Landon received, according to a filing yesterday with the Securities and Exchange Commission. In an April SEC filing, the bank said Ho would be given 15,000 shares of stock when he made CEO. In 2009 Ho received a base salary of $625,000 and total compensation of nearly $1.2 million. Landon’s total compensation in 2009 was nearly $1.4 million.

Bank of Hawaii’s stock closed down 54 cents yesterday at $50.29 on the New York Stock Exchange.