When it comes to the regional banking sector, its pretty clear that things aren’t as sexy as they are when it comes to the technology or oil and sectors. However, that doesn’t necessarily mean significant gains can’t be had by those looking for higher-yielding (which I define as anything over 3%) plays ready to break-out of their recent trend performance. For this article I’ve chosen to highlight Bank of Hawaii which currently yields just over 3%, has trend behavior that is indicating a potential upside break-out, and is due to release earnings on Monday, July 28.
Headquartered in Honolulu, Hawaii, Bank of Hawaii Corporation operates as the holding company for Bank of Hawaii that provides financial services and products in Hawaii, Guam, and other Pacific Islands. The company operates in four segments: Retail Banking, Commercial Banking, Investment Services, and Treasury and Other Services.
On Friday, shares of BOH, which currently possess a market cap of $2.53 billion, a forward P/E ratio of 14.72, and a dividend yield of 3.16% ($1.80), settled at a price of $56.95/share. Based on a closing price of $56.95/share, shares of BOH are trading 1.32% below their 20-day simple moving average, 0.33% below their 50-day simple moving average, and 0.19% above their 200-day simple moving average. Although these numbers indicate a selling a mode for most investors, I strongly believe a solid June quarter could help shares breakout of their recent trend performance when earnings are announced on June 28.
For the upcoming quarter, analysts are expecting Bank of Hawaii to deliver earnings of $0.89/share in terms of EPS and in order to meet and/or exceed those estimates there are a number of area in which I’ll need to see improvement versus Q1 2014. For instance, I’m looking for a 2%-3% increase in the bank’s loan and leases balances (as compared to a loan and leases balance of $6.2 billion during Q1), a 1.5%-2% increase in deposit growth (as compared to Q1 deposit growth of 1.1%), and lastly, a 2%-3% increase in net income (as compared to Q1’s net income of $38.6 million).
