5. Bank of Hawaii

Shares of Bank of Hawaii ( BOH) of Honolulu closed at $44.05 Monday, returning 3% during 2012, with a three-year total return of 15% and a five-year return of 6%.

The shares traded for twice their tangible book value, according to Thomson Reuters Bank Insight, and for 12.6 times the consensus 2013 earnings estimate of $3.49 a share, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $3.49.

Based on Monday's close and a quarterly payout of 45 cents, the shares had a dividend yield of 4.09%.

For the first quarter of 2010 through the third quarter of 2012, Bank of Hawaii's return on average tangible common equity was 17.60%, according to data supplied by Thomson Reuters Bank Insight.

Among 12 sell-side analysts polled by Thomson Reuters, only two rate Bank of Hawaii a "Buy," while six analysts have neutral ratings and four analysts rate the shares "Underperform" or "Sell." While there's no question that Bank of Hawaii has been a strong and consistent performer, analysts with 12-month investment horizons are concerned about "limited growth prospects and relatively weak NIM defense," according to Jefferies analyst Casey Haire.

Bank of Hawaii earned $41.2 million during the third quarter, or 92 cents a share, increasing from $40.7 million, or 90 cents a share, in the second quarter, but declining from $43.3 million, or 92 cents a share, in the third quarter of 2011. Earnings increased sequentially mainly because the company's mortgage banking revenue increased to $11.7 million from $7.6 million. During the third quarter of 2011, mortgage banking income totaled $5.5 million.

The return on average tangible common equity for the third quarter was 16.78%, according to Thomson Reuters Bank Insight.

Earnings were down from a year earlier because the increase in mortgage income was partially offset by a decline in income from fees and service charges, and also because of a decline in net interest income, as the net interest margin (NIM) narrowed to 2.98% in the third quarter from 3.09% a year earlier.

Haire on Oct. 23 lowered his 2013 EPS estimate for Bank of Hawaii by a nickel to $3.50, citing "a weaker net interest income trajectory," but also saying that "negative revisions would have been greater if not for decent momentum in mortgage banking and ongoing efficiency initiatives, which should keep operating leverage metrics respectable near-term."

The analyst rates Bank of Hawaii a "Hold," with a $46 price target.

BOH Chart BOH data by YCharts

Interested in more on Bank of Hawaii? See TheStreet Ratings' report card for this stock.

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