1. Bank of Hawaii
Shares of Bank of Hawaii closed at $44.64 Friday, down 2% year-to-date. The company was featured Tuesday as part of
Best In Class
Based on a quarterly payout of 45 cents, the forward dividend yield on the shares is 4.03%.
Net income for the first half of 2010 was $99.3 million or $2.05 a share, increasing from $67 million or $1.40 a share in the first half of 2009. Bank of Hawaii's ROE for the first half of 2010 was 20.56%, by far the strongest earnings performance by that measure among U.S. bank and thrift holding companies with more than $10 billion in total assets. ROE exceeded 20% for all of the previous five years, except for 2009, when the company's return on equity was 16.42% according to SNL Financial.
Total assets were $12.9 billion as of June 30 and the nonperforming assets ratio was 0.44%. The ratio of net charge-offs to average loans for the first half of 2010 was 1.17%. The company's tier 1 leverage ratio was 7.09% as of June 30 and its total risk-based capital ratio was 18.19%. The tangible common equity ratio was 7.65%.
Shares trade for 2.2 times tangible book value according to SNL Financial and at a forward P/E of 13.3 based on the consensus earnings estimate of $3.35 for 2011. The forward P/E would fall to 11.8 based on the 2012 consensus earnings estimate of $3.79 a share.
Out of nine analysts covering the company, two have buy ratings, six recommend holding the shares and one recommends investors sell the shares.
As discussed in
Bank of Hawaii: How to Play It
, Bank of Hawaii, with strong capital, an attractive dividend yield, an active stock buyback program and an amazing track record for earnings, is a worthy choice for investors looking to hold a quality bank name for many years.
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Written by Philip van Doorn in Jupiter, Fla.
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