UPDATE 2-Bank of Hawaii profit tops Street on securities gain

* Q4 EPS $0.84 vs est $0.75

* Sees $25.7 mln gain from sale of investment securities

* Net interest margin down 86 basis points

* Provisions for loan losses up 44 pct

* Shares down 7 pct (Recasts, adds analyst's comment, updates share movement)

Jan 25 (Reuters) - Bank of Hawaii Corp (BOH.N) posted a fourth-quarter profit that beat Wall Street estimates, propped up by a gain on the sale of investment securities.

However, at least one analyst said the gain was non-recurring and that the bank holding company's lower margins could affect earnings in 2010.

Shares of the company were down 7 percent at $45.60 in morning trade on the New York Stock Exchange.

The bank's net interest margin --the difference between what the bank earns on loans and pays on deposits-- stood at 3.57 percent, down 86 basis points from last year.

Net interest income fell to $103.5 million from $105.8 million.

"We suspect the decline came from an inability to materially reduce deposits costs from an already low level and a sharp decline in yield on its securities portfolio," Morgan Stanley analyst Ken Zerbe said in a note to clients.

The company earned $40.5 million, or 84 cents a share, compared with $39.3 million, or 82 cents a share, last year.

Analysts on average had expected the company to earn 75 cents a share, excluding special items, according to Thomson Reuters I/B/E/S.

Provision for credit losses rose to $26.8 million from $18.6 million last year.

Net charge-offs rose more than two-fold to $25.8 million.

Non-interest income rose 48 percent to $80.8 million, largely due to net gains of $25.7 million on sales of investment securities. (Reporting by Jochelle Mendonca in Bangalore; Editing by Aradhana Aravindan and Anil D'Silva)