Bank of Hawaii Corp. topped $20 billion in assets for the first time, hit record deposits and set aside fewer reserves for potential loan losses than previous periods as the company’s third-quarter earnings easily beat analysts’ estimates.

The state’s second-largest bank, which like all financial institutions has been dealing with effects of the pandemic on customers’ accounts, reported today that it recorded a $28.6 million loan-loss provision. But that was far less than the $40.4 million it set aside in the second quarter and $33.6 million in the first quarter.

Bankoh reported Monday that its net income fell 27.3% to $37.8 million, or 95 cents a share. Still, that easily topped analysts’ consensus estimate of 84 cents, according to research firm Thomson Reuters.

In the year-earlier quarter, Bank of Hawaii had earnings of $52.1 million, or $1.29 a share, when it only had a loan-loss provision of $4.3 million.

Loan-loss provisions, which allow for uncollected loans and loan payments, are an expense that reduces income for any given quarter that they are taken. However some or all of it can be later returned to a company’s income statement to increase earnings if it turns out the reserve is no longer needed.

“Our financial results for the third quarter largely reflect current conditions at the local, national and global level,” Bank of Hawaii Chairman, President and CEO Peter Ho said in a statement. “Our long-standing commitment to conservatism, liquidity and capital strength positions us relatively well to these extraordinary items.”

Shares fell $1.17, or 1.9%, on an overall dismal day for the stock market.

Bankoh Chief Risk Officer Mary Sellers said at the end of the third quarter that customer loan balances on payment deferrals or extensions totaled $1.5 billion, or 13% of total loans.

“During the quarter, we continued to receive very few new requests for payment relief,” she said on the bank’s earnings conference call. “We elected to provide initial payment relief of up to six months for our customers, given the degree to which Hawaii was impacted, the provision supported under the CARES Act and our capacity to do so.”

Sellers said these payment deferrals began to expire in September with customers returning to their normal payment schedules beginning in October and continuing through November and December. She said that as of Oct. 23 that customer loan balances on payment deferrals have been reduced to $1 billion, or 8.6%, of total loans. This is an $839 million, or 45% decline, from the second quarter, she said.

She said the bank’s portfolio construction “built on conservative underwriting and disciplined portfolio management will continue to provide a superior outcome, and allow us to continue to support our customers and community through these unprecedented times.”

“The (loan-loss) reserve reflects our best estimate of losses in the portfolio, given the company’s credit risk profile, and the current economic outlook and forecast for our market,” Sellers added.

Bankoh’s deposits during the quarter jumped 15.6% from the year-earlier period to an all-time high of $17.74 billion.

Loans also were strong as they increased 8.4% to $11.79 billion while assets rose 13.8% to $20.1 billion.

Revenue slipped 3.2% to $165.9 million but beat analysts’ estimate of $162.5 million

The bank’s net interest margin, which is the difference between what the bank generates from its loans and pays out in deposits, considerably worsened by 34 basis points to 2.67% from 3.01% in the year-earlier quarter, and was off by 16 basis points from 2.83% in the second quarter.

”This is a dynamic environment,” Ho said on the conference call. “This is certainly an uncertain and generational sort of situation. But the company, for the most part has been built to weather exactly these kinds of occurrences.”

Bankoh maintained its quarterly dividend at 67 cents a share. It will be payable Dec. 14 to shareholders of record at the close of business Nov. 30.