This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Bank Stocks Bringing Home the Bacon (Mmm... Bacon)


8. Bank of Hawaii

Shares of Bank of Hawaii (BOH) of Honolulu closed at $42.22 last Friday, for a year-to-date decline of 8%. Based on a quarterly payout of 45 cents, the shares have a dividend yield of 4.26%.

The company's year-to-date ROA was 1.24% as of Sept. 30, and its five-year average ROA was 1.50%.

Bank of Hawaii had $13.3 billion in total assets as of Sept 30, with 80 branches throughout Hawaii and other Pacific islands.

SNL Financial reported that Bank of Hawaii CFO Kent Lucien said at the Bank of America Merrill Lynch Banking and Financial Services Conference on Nov. 16 that the company's "number one priority" was its dividend, "and maintaining the dividend," and that the bank planned "to use all of the remaining current earnings toward repurchases." Lucien said that Bank of Hawaii might repurchase another $100 million in shares, after $30 million in third-quarter buybacks, depending on share prices and other factors.

Third-quarter net income was $43.3 million, or 92 cents a share, compared to $35.1 million, or 74 cents, in the second quarter, and $44.1 million, or 91 cents a share, in the third quarter of 2010. The provision for loan losses declined to $2.2 million in the third quarter from $13.4 million a year earlier.

The year-over-year earnings reduction reflected a 30% reduction in service charges on deposit accounts, to $9.8 million, springing from the new regulatory requirements in the middle of the third quarter of 2010, requiring banks only to provide overdraft protection on ATM or debit card overdrafts for customers opting-in for the service.

Another factor in the year-over-year earnings decline was $7.9 million in gains on investment securities, booked during the third quarter of 2010.

Third-quarter net interest income was $96.8 million, declining from $98.6 million a year earlier. The net interest margin declined to 3.09% in the third quarter from 3.27% a year earlier.

Brett Rabatin of Sterne Agee called Bank of Hawaii "a consistent performer with solid profitability (whose shares are supported by a consistent buyback and high dividend yield)," following the company's third-quarter earnings release, but has a neutral rating on the shares, as "catalysts for BOH are limited in the next few quarters given trepidation regarding revenue pressure in the low interest rate environment."

The shares trade for 13 times the consensus 2012 EPS estimate of $3.20, among analysts polled by FactSet, and two times tangible book value, according to SNL.

Out of 12 analysts covering Bank of Hawaii, four rate the shares a buy, five have neutral ratings, and three recommend investors sell the shares.

While the shares do appear expensive in the current heavily discounted environment for bank stocks, it's important to remember that sell-side analysts are forced to consider one-year outlooks for their price targets and investment recommendations. Bank of Hawaii has been a clear winner over the long haul, with very few surprises.

4 of 11

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs