Bank of Hawaii Corp (BOH) 2009 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the second quarter Bank of Hawaii Corporation earnings conference call. My name is Marisol, and I'll be your operator for today's call. At this time, all participants are in a listen only mode. (Operator Instructions). As a reminder, today's conference is being recorded for replay purposes.

I would now like to turn the presentation over to Ms. Cindy Wyrick, Director of Investor Relations. Please proceed.

Thank you, Marisol, and good morning everyone. Thank you for joining us as we review the financial results for the second quarter of 2009. Joining me this morning is our Chairman and CEO Al Landon; our President and Chief Banking Officer Peter Ho, our Vice Chairman and Chief Financial Officer Kent Lucien; and our Vice Chairman and Chief Risk Officer Mary Sellers.

Comments today will refer to the financial information that was included in our earnings announcement this morning. Before we get started, let me remind you that today's conference call will contain some forward-looking statements, and while we believe our assumptions are reasonable, there are a variety of reasons that the actual results may differ materially from those projected. And now I'd like to turn the call over to Al Landon. Al?

Thank you, Cindy. Greetings, everyone. Thank you for joining us. Consistent with our focus on soundness, Bank of Hawaii maintained our liquidity and added to our reserves and capital during the second quarter of 2009. We increased net interest income and controlled our core expenses. In addition, we aggressively dealt with three significant credit exposures this quarter. Bank of Hawaii remained solidly profitable in the second quarter, despite increasing costs for FDIC insurance and the impact of the weak economy. Kent will explain some of the factors affecting our financial performance this quarter and then Mary will comment on our credit quality measures. Kent?

Thank you, Al. Good morning. Net income for the second quarter was $31 million or $0.65 per share, compared to $36 million or $0.75 per share in the first quarter and $48.3 million or $1 per share in the second quarter of 2008. This quarter's results included FDIC insurance expense of $9 million compared to $1.8 million in the first quarter. Last quarter's results included a $10 million pre-tax gain on the sale of our interest in two leverage lease assets.

Net interest income was $102.9 million, up $5.8 million from Q1. Our net interest margin was essentially flat, but our average earning assets were up $704 million. Our credit provision in the second quarter was $28.7 million, comprised of net charge-offs of $25.7 million and an increase to our allowance of $3 million. In the second quarter, we sold our $20 million loan made to a major mall owner and recorded the chargeoff of $6.9 million. We also restructured a leverage lease involving a bankrupt automobile manufacturer, which resulted in a chargeoff of $4.4 million and an income tax benefit of $1.6 million. And we charged down a non-relationship syndicated credit by $2.3 million that we have now sold.

Last quarter's credit provision was $24.9 million, and last year's second quarter credit provision was $7.2 million. Our allowance for loan and lease losses is now $137.4 million and the ratio to loan and lease balances is 2.23%. Year-to-date, we've increased our allowance by $13.9 million. Non-performing loans declined to $39.1 million from $40.3 million last quarter. Included in this total is $16.3 million in residential non-performing loans.

Year-to-date net income was $67 million or $1.40 per share, compared to last years $105.5 million or $2.18 per share. Last year's first half results included pre-tax gains of $25.3 million from the redemption of Visa shares and the early buyout of an aircraft lease, partially offset by some significant expenses.

Consistent with our near term objectives during the second quarter, we increased our capital and reserves while maintaining strong liquidity. We paid $21.5 million in dividends. Our shareholders equity increased $12 million to $846 million and our tangible common equity to risk weighted asset ratio is 13.02%. Our funds sold balance was $656 million at the end of the quarter.

Net income to average assets was 1.06% this quarter. Return on equity is 14.49% and our efficiency ratio was 55.07%. Year-to-date, our return on equity is 16.13%.

Our investment portfolio increased $1.2 billion this quarter due to both increased funding and reductions in loan balances. The average duration of the portfolio is now 2.4 years. We continue to invest conservatively, primarily in Treasury and government agency securities. Loan balances continued to decline and were $6.1 billion at quarter end, down $189 million from Q1 and down $380 million year-to-date. Every category is lower so far this year, with the exception of commercial mortgage, which has increased due to a $40 million secured line to a hotel chain as well as the scheduled conversion of three commercial construction loans that were recently completed. Construction loan balances were $13 million lower this quarter.

Non-interest income for the second quarter was $59.8 million, down $10.6 million from the first quarter and $700,000 lower than the second quarter of 2008. This quarter's income included a $2.8 million gain on the sale of our equity interest in a leverage lease involving an air cargo plane and a small gain on the sale of our retail insurance agency. Non-interest income for the first quarter of 2009 included a gain of $10 million related to the disposition of two watercraft leverage leases.

Mortgage banking income was $5.4 million this quarter, $3.2 million lower than Q1 but $2.7 million higher than Q2 last year. Non-interest expense was $89.6 million in the second quarter, up $1.7 million from last quarter and up $5.7 million from the second quarter of last year. This quarter's expense included FDIC expense of $9 million, including $5.7 million for our share of the industrywide assessment, compared to $1.8 million in FDIC expense in the first quarter and $200,000 in the second quarter of last year.

Salaries and benefits declined this quarter from last quarter's level and from last year. On a year-to-date basis, salaries and benefits are down $10.2 million from the first half of 2008.

Deposit growth continued to be strong this quarter in the consumer and commercial segments, while public deposits declined. Consumer deposits were up $45 million, commercial deposits were up $183 million, and public and other deposits were down $421 million. The decline in public deposits was expected since part of the increase in Q1 was seasonal. In addition, some public deposits moved to repos during the quarter.

Our securities sold under agreements to repurchase increased $956 million, due to public deposits shifting to repurchase agreements and new public repos resulting from public entity bond issuances. Finally, our board declared a $0.45 per share dividend last Friday. And now I'll turn the call over to Mary.

Thank you, Kent. As Kent shared with you, net charge-offs this quarter were $25.7 million, up $11.7 million on a linked quarter basis. The increase was primarily attributable to a $10.5 million increase in net chargeoffs in our commercial portfolio. The commercial increase was due to a $6.9 million chargeoff related to the sale of a loan for a large national mall owner, which we discussed last quarter. Additionally, we recognized a $4.4 million chargeoff related to the restructure of a leverage lease, a $2.3 million chargeoff for the sale of a syndicated loan. Consumer net charge-offs were up $1.2 million.

Non-performing assets totaled $39.1 million at the end of the quarter, down $1.3 million from the first quarter of 2009. Commercial non-accrual loans totaled $19.2 million, an $8.5 million decrease primarily driven by the resolution of the loan for the national mall owner. Consumer non-accrual loans totaled $19.4 million, a $7.1 million increase over the preceding quarter. This increase was due to a $7 million increase in residential mortgage non-accruals. There were two land loans, three neighbor island second home mortgage loans, and two owner occupied mortgage loans in the increase.

Loans past due 90 days and still accruing interest totaled $9.6 million, up $941,000 on a linked quarter basis. This increase was due to a $1.2 million increase in home equity. The increases in credit losses, non-performing assets, and past dues in our portfolio are reflective of the trend in national and local economic fundamentals. Hawaii unemployment rates, which remain below the US average, have moved up, reaching 7.4% at the end of June, up from 7.1% in March of 2009.

Average residential real estate prices have continued a slow decline, with the median single family home selling price on Oahu down 9% year to date. At the end of the quarter, the residential mortgage loan outstanding totaled $2.3 billion and home equity outstanding totaled $978 million. Only $23.2 million of these loans are secured by homes outside our market. Delinquencies and losses in our residential mortgage portfolio have been driven by land loans and second home or investor loans primarily on the neighbor islands with non-resident owners. At the end of the quarter, our land loan portfolio totaled $48.8 million. $41.4 million is for land located on the neighbor islands, with $25 million of this associated with non-resident owners. As we previously indicated, value declines on the neighbor islands have been more pronounced than on Oahu.

Second home and investor residential mortgage loans on the neighbor islands totaled $379 million at the end of the quarter. $12 million is considered higher risk. These loans were originated in or after 2005, now have monitoring credit scores less than 650, and loan to value ratios greater than 70% based upon origination values. And most are to non-residents. In our home equity portfolio, $55 million is considered higher risk. These exposures were also originated in or after 2005, now have monitoring credit scores less than 660, and combined loan to values greater than 70% based upon origination values. As we have discussed earlier, nearly all of the delinquencies and losses in our home equity portfolio have resulted when customers have experienced job loss, income curtailment, or other life events, coupled with declines in equity, driven off reduction, and property values.

At the end of the quarter, construction loan outstandings totaled $140.5 million, with $89.2 million in residential housing exposure. $60.7 million is for low income or middle market home projects on Oahu. Neighbor island residential construction outstandings totaled $22.7 million and include an $11.1 million high end resort project which is experiencing slow sales. Mainland exposure of $5.8 million includes a $5 million non-accrual loan for a condo project which is going through the foreclosure process.

Commercial mortgage outstandings were $788 million as of the end of the quarter, and included $317 million in owner occupant mortgages and $471 million in investor exposure. The average owner occupant commercial mortgage is $990,000, with the current weighted average loan to value of 72% and average current debt service coverage of 1.3 times. These loans are underwritten based upon the cash flow of the business, given the real estate asset is utilized in the business operation with the real estate evaluated as a secondary repayment source. Investor commercial mortgage loans are underwritten based upon the economic viability of the property and the overall financial wherewithal of the borrowers. Emphasis is placed on the ratio of the cash flow to the loans debt service requirements after considering vacancy, property expenses, and stressing interest rates. Our average commercial investor mortgage is $1.4 million with a current weighted average loan to value of 57% and average current debt service coverage of 1.4 times.

In keeping with our focus on soundness, we increased our reserve for loan and lease losses by $3 million to $137 million or 2.23% of total loans. The allowance continues to consider our legacy aircraft leveraged lease exposure, which presents greater risk, given our equity position in these assets is structurally subordinate to the debt.

As economic weakness continues, our leasing assets naturally incur greater risk. We have an $8.3 million direct financing lease for an aircraft where the intermediary and guarantor for have disclosed liquidity and funding needs which could require them to seek bankruptcy protection if they do not receive support and additional credit. We continue to look for opportunities to reduce our exposure in these lease assets, and this quarter we were again able to exit a leverage lease for an air cargo carrier and we also restructured a leverage lease involving a bankrupt auto manufacturer.

Similarly, we elected to exit a syndicated loan, given the downside risk facing the borrower if there is a prolonged economic recovery on the mainland. As we manage credit risk in this environment, we will continue to opportunistically exit higher risk assets to lower credit exposure. This has been considered in our allowance for loan and lease losses. I'll now turn the call back to Al.

Thanks, Mary. A few numbers this morning, ha? As we move into the second half of 2009, Bank of Hawaii will continue to manage for economic weakness. We plan to maintain our strong liquidity, reserves, and capital, all important measures of soundness. Where we can do so, we will exit loans that have higher uncertainty. We remain focused on controlling risk and expense. The Bank of Hawaii is safe, balanced, and prepared for opportunities in the future. Now, we will be happy to respond to your questions.

(Operator Instructions). Our first question comes from the line of Brett Rabatin from Sterne Agee.

Hello, everyone.

Hi, Brett.

Wanted to first ask on the securities portfolio, the duration I believe you mentioned was 2.4 years. Will that continue to abate in the next few quarters or is that where you think it will be going forward?

Well, actually the duration increased in the second quarter compared to the first quarter.

Aside from the liquidity that you had on the balance sheet at the prior quarter, just the core securities portfolio.

Right. So we did move down our funds sold in the quarter by $240 million, so we still have a pretty high level of funds sold at $656 million at the end of the quarter. We'll just have to see how it goes, Brett, see whether we change that.

Okay, and Mary, I appreciate all the color on the asset quality stuff. If I understood correctly, there was one $8.3 million leverage lease that sounds like that may be something that will be possibly addressed this quarter. But other than that, no other larger loans that are on the horizon that you see being meaningfully impactful to near term credit quality?

Not at this point.

Okay. And then from the deposit perspective, obviously you had the public funds thing -- it looks like that was in the interest bearing DDA line. Is the increase in the savings and money-market line -- can you talk a little bit more about whether the $4 million plus -- is that a number that seems sticky or can you provide a little more color on the that line particularly?

Sure. Brett, that line has grown both on the commercial and the consumer side, and we really certainly in the past quarter in the second quarter have not been that generous on the rate side, so it's not like we're building balances through increased rates. That certainly is the case in Q2. I'd say through the balance of the year, we've seen deposit or savings growth as a category in each of the first six months of the year -- six out of six on the consumer side and growth in each of the first five months on the commercial side. In June, our commercial savings balances were down, but down like $13 million, so it seems that that money is pretty sticky.

Okay, well, congratulations on the strong growth in net deposits.

Brett, you asked Mary about whether we had any large commercial credits. I think we were focusing on loss for the quarter, and she looked at me and we both said no, but I want to emphasize that we're going to continue to look at the portfolio and particularly where we have syndicated credits. If we see something that has uncertainty associated with it as the economy remains slow, we'll take a look at opportunistically exiting, especially if there's a buyer or a secondary market for those that make some sense. So while we don't have anything right now that I would say is in scope here or anything that we know about, don't be shocked if you were to see us lay off $10 or $20 million or something like that here in the quarter if we can do so with modest losses being recorded. Is that a fair summary, Mary?

Yes, that's correct.

Okay, great. Thanks for the additional color.

Our next question comes from the line of Craig Siegenthaler from Credit Suisse. Please proceed.

Thanks and good morning out there.

Good morning.

First, maybe just to ask another question on the loan portfolio and deposits. When you see it looks like weaker demand in loan balances excluding commercial mortgage, I'm wondering, do you expect broad based weak loan demand to continue here because of the recessionary environment? Or do you actually believe you can start expanding your earning assets in especially the loan component of that?

Let me [work] both the commercial side and we'll chat about the consumer side. On the commercial front, I think that we're looking at pretty flat loan growth for the balance of the year. That's what we've planned for and in fact what we're seeing. In C&I portfolio, we talked about some of the credits that we exited. That's really what drove the decline there.

On the construction side, I think we're going to continue to see balances dwindle down as we continue to work through the portfolio that we have and are not really engaging in any new business in that business segment or that loan segment. And I think leasing probably follows suit as well.

On the consumer side, much of that growth is really reflective or that lack of growth is reflective of what's happening in the marketplace. The auto industry out here is off about 30%. So that's affecting -- obviously affecting our indirect business. Home equity loans just aren't able to get the kind of equity or borrowers aren't able to get the kind of equity they have in the past. So that's obviously impacting that business. And on the residential side, despite the fact that we've had pretty good volume, a lot of that volume doesn't stick, because it's mostly conforming refinance type business and most of that volume gets sold off in the secondary market.

Got it and then also looking at the change in your deposits, a lot of that was driven by the public side and it's a smaller balance now. Should we expect that trend to continue, or the consumer and commercial deposit trends which were fairly healthy to start taking over in the third quarter?

I can't really speak for the public side.

The public will vary quite a bit, and there's a real interchange between the public deposits and the repo line. And you saw in the second quarter how the repos actually increase quite a bit in the second quarter. So it's hard to say whether we're going to see much change in that category.

Got it. And when I put those two responses together and bring it into the net interest margin, it sounds like it may be a little difficult to improve the NIM unless there's a change in liquidity levels just over the near term. Is that a correct assumption, or do you see some low hanging fruit there?

I wouldn't say there's any low hanging fruit. The margin was pretty flat in Q2 compared to Q1. Unless there's some overwhelming market change, probably not going to see much change in that result.

Got it. All right, great. Thank you for taking my questions.

Our next question comes from the line of Ken Zerbe from Morgan Stanley. Please proceed.

Thanks. I was hoping you guys could just update us on the aircraft leverage lease portfolio in terms of how many exposures you have reserves against that? If I recall it's pretty substantial, but also just a timeline -- how many more years or quarters is this something that's going to be discussed?

Ken, it looks like it will last forever.

Fair enough.

You know the structure of those things. They were put on last century and they have long lives. There's some maturities there as you can expect with a portfolio that was one-time much much larger than what we have now. We'll probably be at this at least disclosurewise for a few more years, unless we see some ability to exit with decent results for the shareholders. In terms of reserves, we take a look at it every quarter and I think have a fairly healthy number there, Mary. We've disclosed that in the past, haven't we?

Yes.

Could you give us an update where we are?

Yes, we have about $26 million against the aircraft portfolio, and there are eight leverage leases with $54 million included in that total.

Okay, great. And then just out of curiosity, maybe just describe the process. When the second homeowner or the owner that owns a second home defaults where you're taking the losses that I guess we're seeing right now, how does that process work? Is it just that they own, well I guess two homes, obviously one in California and one in Hawaii, and they say that I'm just going to stop paying or default on this one and I'll continue to live in my primary residence? I guess I'm trying to understand the mentality of someone who defaults on a second home, what happens with the first. And I know it doesn't really affect you that much but are they just completely out of their home entirely? Does that make sense?

We understand the question. I'm not sure we understand the mentality, so for us in Hawaii to comment on how California borrowers behave probably isn't all that helpful.

Well, the implication though is if we understand the rationale, we would also understand how much of that $379 million of second home on neighboring islands is potentially at risk, which is why I'm asking the question of course.

I think it's typically when they're gotten into financial stress from the higher unemployment and their basic where withal in terms of their liquidity and stock holdings have declined such that their focus is on their primary residence. I think the other thing is California is a single action state and we're a dual action state, and I'm not sure they are all aware of that.

Dual action meaning you go after their personal property?

Yes, we can.

Even if they live in California?

Yes, we can.

Interesting. Okay, great. Thank you very much.

We think they should all just move to Hawaii.

Me too, if I could.

Our next question comes from the line of Joe Gladue from B. Riley. Please proceed.

I guess you've touched on this in a couple of ways, but I'd just ask for a little bit more color. The securities portfolio grew over $1 billion in the second quarter, but it was substantially lower I guess average yields than the average earning assets. Just wondering if you could give a little more color on what you're adding and what the average yields you're adding are? And is there still potential if you continue to have low loan demand, but good deposit generation, if that growth has potential to bring average yields down more?

Okay. We've been purchasing what I would call very conservative investments. It's been Treasury securities, Ginny Maes. The yield did come down in Q2, so the average yield was 4.21% versus 4.95% and depending on which it is, whether it's the Treasury or a Ginny Mae, we're actually adding yields that are higher than that average. So we sort of reached a point of, for want of a better word, stability on the portfolio in terms of its yield. The other variable is the duration, and as I mentioned we had been moving the duration out a little bit, but it's still a relatively low number.

All right, thank you. That answers the question. That's all I had.

Our next question comes from the line of Aaron Deer from Sandler O'Neill. Please proceed.

Hi, good morning everyone.

Hi, Aaron.

I was wondering -- you'd mentioned this CRE loan to the hotel company and then also the converted construction loans. Can you talk about the underwriting on those?

On the large commercial mortgage for the hotel operator, that's actually underwritten against three properties with a loan to value of 60%. We also have a liquidity requirement on that that they maintain liquidity equal to our loan amount, and the company actually does have substantial liquidity with about $112 million on their balance sheet right now.

That's great, and then the construction loans that were converted?

The construction loans that were converted were three self-storage facilities that have completed construction and leased up and converted to the mini perm.

And what kind of debt service coverage is on those and loan to value ratio?

We require [1.6] coverage on self-storage. I don't have the LTVs off the top of my head, but I could get them.

Okay. And then the retail components of your insurance business. I don't think that was a real big piece. But what impact do you expect that to have on revenues and net income going forward?

It shouldn't have an impact on income going forward. That business had revenue of about $3 million, but the expenses were about the same level.

Okay, I didn't think it was meaningful. And then anything you can share with us -- I know you've got the 90 day delinquency in the press release. Anything you can say on the major portfolios on 30 day delinquencies and how those have changed quarter to quarter?

On our consumer portfolios, we actually saw some improvement in the 30 to 89 day really coming out of our home equity and a little bit in residential mortgage, but otherwise, we continue to see some stress in the short-term delinquencies.

Okay, great. Thank you everyone.

Thanks, Aaron.

Our next question comes from the line of Brian Zabora from Stifel Nicolaus. Please proceed.

Thanks, good morning. Could you just remind us on the size of your syndicated portfolio at this point?

It's $346 million in outstandings.

And are there any areas of concentration or concern?

As you would expect, it's pretty well focused on Hawaii. So there's real estate and hotel lodging -- that would be the two largest concentrations. And outside of, I don't think there are any particular concerns at this point around any of the names.

Nothing unusual. I mean with syndicated portfolio, some parts of it you have more contact with and some less, and so there's always variables out there. I don't want to minimize it, but I don't want to say that there's anything that we're terribly concerned about. As we mentioned, we did sell out one loan already this quarter that we had given some loss recognition to at the end of last quarter. So that was our most significant concern or exposure to a higher uncertainty.

As far as mortgage banking, was there any impact of the MSR this quarter?

It was a very small change in the value.

Okay. That's all I had. Thank you very much.

Thanks.

(Operator Instructions). Our next question comes from the line of Bob Bohlen from KBW. Please proceed.

Hi, thank you, can you hear me?

Yes, coming through fine.

Most of my questions have been answered. The only question I had left, the syndicated loan that did sell -- was that sold in the second quarter or was that a subsequent third quarter event?

Subsequent.

It was subsequent? Was there any gain or loss with that event or no?

Very small change.

Okay. So the net chargeoff that was taken pretty much brought it to the realizable value there?

Yes.

Okay. That was the only question I had left. Thank you.

Our next question comes from the line of Al Savastano from Fox-Pitt Kelton. Please proceed.

Good morning how are you?

We're just fine, Al. How are you?

I'm great, thank you. Two questions for you. In terms of the balance sheet, you mentioned that loans would be flattish. How about the rest of the balance sheet? Do you expect asset growth the rest of the year?

Depends on what happens with deposits. We keep focused on what the market rates are here and what's going on in our marketplace. If we can build -- we've been building relationships, particularly on the consumer side, all through the economic dislocation. We'll continue to work on that. How much balance that brings us is not entirely clear. Savings rates are going up, but the amount available for savings seems to be going down. So we're just going to continue to follow it and maintain our strong liquidity position. And where we can add business, we'll put it in conservative assets in the investment portfolio, so the same philosophy and we'll just see what result the economy brings.

Got it. Perfect. That leads to my second question perfectly is deposit pricing on the island, since there's been some changes in competition. Can you talk a little bit about how that's impacting you?

Well, we were pretty aggressive at the beginning of the year making sure that we've got our share and a little bit more. And just as we've seen our balance sheet increase, I think we've been increasingly careful about what the market-rate is. We haven't seen any significant dislocations here. We've got our balance sheet strong like we would like it and we'll see what we can do to improve our financial performance going forward. Peter, anything you want to add to that?

No. Other than from a client acquisition standpoint, we're several quarters into free checking now and that has been a good result. We've really focused in on the deposit side and our branch operations area. We're seeing good account growth. Our consumer checking accounts are up 9% June on June, so that's a gratifying number. And like Al said we'll see what kinds of deposits flow along with that. But in general, we're very pleased with the flow of clients that we're getting both on the commercial and consumer side.

The strategy is focus on convenience, offer value where we can, and improve our products and productivity. Customer satisfaction has held up pretty well. Normally, when you get into an economically stressful period, that slacks off. But year-over-year, we've seen good performance there. And as we've said, our objective is to try and hold as much of our team together here even though there's economic slowness out here, and I think when things turn around that will give us a nice advantage coming out of this.

Sounds good. Thank you.

(Operator Instructions). Our next question comes from the line of Lisa Walker from BlackRock. Please proceed.

Good morning.

Good morning.

I just wanted to come back to the point on the 30 day delinquencies, and we've heard this from a number of banks, that they've seen improvement in the 30-89 days on credit card but also on home equity and residential mortgage. And I guess the question to you is how do you explain this? Some people are talking about seasonality and some people are saying that it's more than that.

I think typically it's seasonality, during the second quarter, but --

We just hired a new guy to head collections. He would tell us it's his doing. Thanks to him, whatever you're doing seems to be working, but I don't think we can make a call on it.

Pretty modest.

It's a small number and a little early for us to tell.

Okay. And then the second question I had was just on the dual action state. How does that with Hawaii being a dual action state, how does that affect your -- so you can take a different process in collecting on those second mortgages, is that right?

Yes. We can first pursue the property, but we also are able to pursue the individuals for deficiencies.

Okay. So do you have an expectation -- so when we look at recoveries for seconds in general, that's going to be a different situation on recoveries that you'll be able to achieve versus national average?

Let's hope so, but once the money is gone the money is gone.

It will probably be a longer trail recovery stream that comes in over years.

Okay, great. Thank you.

Thanks.

At this time there's no further questions in the queue. I would like to turn the presentation over to Ms. Cindy Wyrick for any closing remarks.

Thank you everyone for joining us today and for your interest in the Bank of Hawaii. As always, if you have any additional questions or need clarification on any topics we discussed today, please feel free to contact me at 808-694-8430. Have a great day, everyone.

Thank you for your participation in today's conference. This concludes today's presentation. You may now disconnect and have a great day.