Bank of Hawaii: Asset Repricing Remains A Multi-Year Tailwind

Mark Dockray 2.27K Followers Follow Summary Bank of Hawaii has seen its earnings surge near 40% this year, driven by a healthier net interest margin. Pressure on funding costs may weigh a touch from here, but BOH's significant stock of legacy fixed-rate assets offers plenty of scope for more margin expansion. BOH's loan book is largely secured by real estate at low loan-to-value ratios, resulting in less credit risk than the average bank. Improving capital levels has enabled BOH to divert more of its earnings back to shareholders. BOH trades for less than 13 times forward earnings. With the bank now able to afford a higher payout ratio, today's buyer is in line for an attractive total return. Iryna Olkhova/iStock via Getty Images Healthier spread income has been a boon for many banks these past couple of years, and Bank of Hawaii ( BOH ) has been no exception. Indeed, it's helped lift the company's earnings by more than 40% so This article was written by Mark Dockray 2.27K Followers Follow I like to take a long term, buy-and-hold approach to investing, with a bias toward stocks that can sustainably post high quality earnings. Mostly found in the dividend and income section. Blog about various US/Canadian stocks at 'The Compound Investor', and predominantly UK names on 'The UK Income Investor'. Analyst’s Disclosure: I/we have a beneficial long position in the shares of BOH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.