Update: Bank Of Hawaii Earnings

Aug.11.14 | About: Bank of (BOH)


The bank managed to beat earnings consensus by over 5%.

Our long-term thesis is still intact as the company is still a shareholder friendly bank.

The recent strength was driven by our anticipated strong growth in loans and deposits thanks to the Hawaiian economy.

Bank of Hawaii (NYSE:BOH) posted 2Q earnings that came in at $0.94 a share (beating $0.89 consensus), but revenues missed expectations marginally. The company noted that its loan balances and deposits are growing.

Loan balances were up 3.5% q/q and 9.7% y/y. Deposits were up 5.2% q/q and 10.7% y/y. Year to date, its return on average equity is up to 15.5%, above the 14.4% during the same time last year. The other good news is that the bank has boosted its buyback program by $100 million. Which comes as the bank bought up $12.5 million worth of shares in 2Q.

We first profiled the bank back in August of last year, since then shares are basically flat. This remains a bit disappointing, but it still offers one of the best dividend yields in the banking business. At the time, we noted that the stock had limited downside and was a solid income play. Our thesis from a year ago still holds true, as we noted,

BOH really is one of the best run regional banks, with superior risk management and asset quality. The bank has been risk averse when it comes to investing and lending. We think the bank is a great place to invest for a solid 3% to 4% dividend, while gaining exposure to the resilient Hawaiian economy.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.