Dividend Stocks Series: A Bank With A Nearly 4% Yield

As I stated in my last post about bank stocks, there are still a few banks that have high dividends and pretty good yields. Today’s dividend stock is a bank that is not often mentioned on financial television or in analyst reports. This bank is in a great tourist state and derives a significant amount of income from residential lending.

Bank of Hawaii

Today’s banking stock is the Bank of Hawaii (BOH). Bank of Hawaii is the largest bank based in the state with just under $10 billion dollars in deposits. Bank of Hawaii manages $13 billion dollars in assets and the company has a market cap of $2.3 billion dollars. The bank just reported earnings last week and the results were solid.

Bank of Hawaii earned 88 cents per share which was 16 cents higher than earnings estimates. The company had a net income of $42 million dollars and saw deposits increase $400 million dollars. Profitability dropped 20% due to lower overdraft fee income and lower interest income. Bank of Hawaii has been able to grow revenue 4% per annum over the past decade.

The bank was not crushed by bad loans during the financial crisis like other banks because of its conservative approach to lending. Residential lending accounts for slightly more than half of the bank’s loan portfolio. Bank of Hawaii has been able to ratchet down its provision for loan losses because of its prudent lending strategy. Loan loss reserves dropped $4.7 million over the past quarter.

Bank of Hawaii has been making a few moves that should help shareholders. The bank bought back just under half a million shares during the quarter. Bank of Hawaii has a dividend yield of 3.8%. The current dividend payout is clearly sustainable at just 47% of earnings.

This is a reasonably safe banking play for investors looking for slow stable growth and a consistent dividend from a financial stock.


  1. Thanks for the update on this stock! I will be looking into it.

  2. There are a lot of decent regional banks. Of course being an island prevents Hawaii from being considered a region but you know what I mean. A lot of the smaller banks were more conservative and keep many loans on their books so they have to be prudent when it comes to lending standards.

  3. Nice find Mark. A 4% dividend sounds very solid. Plus, if the investment has a chance to go up in value, that’d be a double bonus! :)

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