Bank of Hawaii Corp. – Value Analysis (NYSE:BOH) : September 22, 2017

Capitalcube gives Bank of Hawaii Corp. a score of 61.

Our analysis is based on comparing Bank of Hawaii Corp. with the following peers – Central Pacific Financial Corp., Bank of Marin Bancorp, Cathay General Bancorp, Cullen/Frost Bankers, Inc., CoBiz Financial Inc., Hancock Holding Company, Huntington Bancshares Incorporated, East West Bancorp, Inc., M&T Bank Corporation and Columbia Banking System, Inc. (CPF-US, BMRC-US, CATY-US, CFR-US, COBZ-US, HBHC-US, HBAN-US, EWBC-US, MTB-US and COLB-US).

Fundamental Overview

Bank of Hawaii Corp. has a fundamental score of 61 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It currently trades at a Price/Book ratio of (2.86).
  • BOH-US‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • BOH-US‘s median net profit margins and relatively high capital efficiency give it some operating leverage.
  • Changes in annual earnings are in line with its chosen peers but lags in terms of revenue, implying the company is cost conscious and selective about spending for growth.
  • BOH-US‘s return on equity currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • BOH-US‘s revenue growth in recent years and current P/E ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company’s level of equity capital investment is relatively low and suggests it is milking the business.

Drivers of Margin

  • Margins do not suggest any relative benefit from a pricing or an operating cost advantage.
  • The company’s net interest income (net interest income/total revenues) of 69.99% is around peer median suggesting that BOH-US‘s lending operations does not benefit from any differentiating pricing advantage. In addition, BOH-US‘s pre-tax margin of 42.12% is also around the peer median suggesting no operating cost advantage relative to peers.
  • The company’s comparatively healthy proportion of fee based income (i.e. non interest income/total revenues) of 30.01% versus peer median of 21.70% — suggests that BOH-US‘s operating margins are likely to be less volatile. In addition, BOH-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 55.56x is around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

Bank of Hawaii Corp. is a bank holding company, which engages in the provision of financial services. It operates through the following segments: Retail Banking; Commercial Banking; Investment Services; and Treasury and Other. It offers saving and checking accounts, loans, mortgages, credit and debit cards, online and mobile banking, wealth management, and investment products. The company was founded on August 12, 1971 and is headquartered in Honolulu, HI.