Bank of Hawaii Corp. revealed Monday the first look at how COVID-19 is affecting local financial institutions.

As expected, it wasn’t pretty.

The state’s second-largest bank reported that its net income tumbled 40.9% in the first quarter after it set aside $33.6 million to cover potential loan losses tied to the pandemic. The bank also suspended stock buybacks beginning in mid-March.

Bank of Hawaii’s move mirrored actions announced last week by the nation’s largest banks, which collectively set aside billions of dollars for potential loan defaults and suspended stock buybacks.

However, Bankoh did declare a quarterly dividend of 67 cents a share that is payable June 12 to shareholders of record at the close of business May 29. Companies in some other industries have suspended or reduced their dividends, but Federal Reserve Chairman Jerome Powell said earlier this month that he doesn’t think it’s necessary at this point for banks to touch their dividends.

Bankoh, which has temporarily closed 37 of its 68 branches in Hawaii and the West Pacific, posted net income of $34.7 million, or 87 cents a share, compared with $58.8 million, or $1.43 a share, in the year-earlier period.

“We were pleased with our overall financial performance during the first quarter of 2020 despite the challenges related to COVID-19,” Bankoh Chairman, President and CEO Peter Ho said in a statement. “Our strong balance sheet includes a high-quality securities portfolio, good asset quality, high levels of liquidity, and a solid capital base that will allow us to provide the financial support to our customers and communities needed to emerge from the COVID-19 crisis.”

Bankoh said it processed more than 2,100 Paycheck Protection Program loans totaling in excess of $525 million to small businesses, and electronically distributed 65,000 stimulus payments totaling $112 million to its customers.

The bank said it also made 5,200 modifications to both its commercial and consumer loans, representing 9.8% of its outstanding loans.

During the quarter, the bank’s loans rose 7.6% to $11.35 billion while its deposits increased 5.2% to $16.06 billion. Its total revenue gained 2.1% to $172.1 million.

Like many companies, Bankoh has been conducting much of its business remotely. The company said approximately 80% of its 1,300 downtown headquarter employees are working remotely. Bankoh also has set up teams and location sites to perform certain operational functions.

“The reason to do that, obviously, is to create some redundancy in the event that we had a situation subsequently,” Ho said on the company’s earnings conference call.

He added that about 60% of the bank’s overall workforce is working from home, 25% working on-site and 15% awaiting activation. Ho said the bank has not reduced its head count.

Bank of Hawaii earnings by Honolulu Star-Advertiser on Scribd