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Shares of

Pacific Century Financial

(BOH) - Get Bank of Hawaii Corporation Report

warmed up Monday as the Hawaiian bank named a high-profile executive to lead a turnaround.

The stock popped $1.38, or 10.2%, to $14.94 after a late Friday announcement that the bank hired former

Bank of America

(BAC) - Get Bank of America Corporation Report

Vice Chairman and CFO Michael O'Neill as chairman and CEO. Noting his solid track record, analysts say they expect Pacific Century to sharpen its focus on the core Hawaiian banking business.

The stock could surely use some help. Pacific Century, formerly Bank of Hawaii, has tumbled about 40% over the past year as deteriorating credit quality and rising loan risk have dented profits. As the stock has plunged, talk of a sale of the bank has arisen.

But the move to put a "world-class CEO on their team suggests they will remain independent," says Jim Bradshaw, bank analyst at

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D.A. Davidson

in Portland, Ore. (He rates the stock an outperform and his firm hasn't done any underwriting for Pacific Century.) Bradshaw says it is likely the bank will choose to "divest or significantly downsize its syndicated loan portfolio," where many of its problems have cropped up. "They will get back to the core business and core franchise, which is performing quite well," he predicts.

Chocolate or Strawberry?

"O'Neill is the best guy for the job," says Rosalind Looby, banks analyst at

Credit Suisse First Boston

. "This is not your plain vanilla bank." (She rates the stock a hold and her firm hasn't done any recent underwriting, though it provides advisory services to Pacific Century.)

With little detail as of yet about O'Neill's plans for the bank, many analysts are wondering what will happen to Pacific Century's often troublesome operations on various Pacific islands. Analysts say Pacific Century's operations in Fiji, for instance, suffered greatly after a government coup forced the bank to take a charge to write down risky loans.

Pacific Century was one of the first banks at which credit problems, particularly with syndicated loans, began to surface over the last year and a half, analysts say. (A syndicated loan is one shared by three or more institutions.) It also ran into problems with its real estate loans in Hawaii and was forced to bulk up its loan loss provision, essentially a cushion against bad loans, in recent quarters. Also troubling for investors in the third quarter was the bank's memorandum of understanding with bank regulators, which is an agreement that requires regular reports on efforts to reduce problem assets.

But Brock Vandervliet, banks analyst at

Lehman Brothers

, said he believes with O'Neill on board, the bank will continue to move "questionable loans off its books and start generating solid earnings." (He rates the stock a neutral and said he is not aware of any recent underwriting for Pacific Century by Lehman Brothers.)

"Bringing on O'Neill as CEO makes us feel very confortable with the process," says Bradshaw. "Over the next 12 months he ought to have the company in a pretty good position to be generating improved core profitabilty."