Central Pacific Financial Corp (CPF) 2003 Q3 法說會逐字稿

Good afternoon and welcome, ladies and gentlemen to the Central Pacific Financial Corp's third quarter earnings conference call. At this time I would like to inform you that this call is being recorded and that all participants are in a listen-only mode. At the request of the company we will open up to questions and answers after the presentation. Before we proceed, securities rules require the following statements.

This document contains forward-looking statements. Such statements include, but are not limited to statements about the benefits of the merger between Central Pacific Financial Corp, CPF and CB Bancshares, Inc., CBBI, including future financial and operating results, cost savings, and accretions to reported and cash earnings that may be realized from such merger.

Statements with respect to CPF plans, objectives, expectations and intentions and other statements that are not historical facts and other statements identified by words such as believes, expects, anticipates, estimates, intends, plans, targets, projects and other similar expressions. These statements are based upon the current beliefs and expectations of CPF management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements - 1, the business of CPF and CBBI may not be integrated successfully or such integration may be more difficult, time consuming or costly than expected. 2, expected revenue synergies and cost savings from the merger may not be fully realized, or realized in the expected time frame; 3, revenues following the merger may be lower than expected; 4, deposit attrition, operating costs, customer loss and business disruption, including without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers may be greater than expected following the merger; 5, the regulatory approvals required for the merger may not be obtained on the proposed terms; 6, the failure of CPF and CBBI's shareholders to approve the merger; 7, competitive pressures among depository and other financial institutions may increase significantly and may have an adverse effect on pricing, spending, third party relationships and revenues; 8, the strengths of the United States economy in general and the strengths of the Hawaii economy may be different than expected, resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the result and effect on the combined companies' loan portfolio and the allowance for loan losses; 9, changes in the U.S. legal and regulatory framework; and, 10, adverse conditions in the stock market, the public debt market and other capital markets, including changes in interest rate conditions and the impact of such conditions on the combined companies' activities.

Additional factors that could cause CPF results to differ materially from those described in the forward-looking statements can be found in CPF reports such as annual reports on form 10-K, quarterly reports on form 10-Q and current reports on form 8-K filed with the Securities and Exchange Commission, SEC, and available with the SEC's internet website, at www.sec.gov.

All subsequent written and oral forward-looking statements concerning the proposed transaction or other matters attributable to CPF or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. CPF does not undertake any obligation to update any forward looking statements to reflect circumstances or events that occur after the date forward-looking statements are made.

With respect to financial projections for CBBI contained in this document, neither CBBI nor any analyst has published any information for 2003, 2004, or 2005. In addition, CPF has not been given the opportunity to do any due diligence on CBBI other than reviewing its publicity available information. Therefore, management of CPF has created its own financial model for CBBI based on CBBI’s historical performance and CPF assumptions regarding the reasonable future performance of CBBI on a stand-alone basis. These assumptions may or may not prove to be correct. The assumptions are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of CBBI. There is no assurance that these projections will be realized and actual results are likely to differ significantly from such projections.

CPF filed with the SEC an amended registration statement on form S-4 to register the shares of CPF common stock to be issued in a proposed exchange offer. The registration statement is not final and will be further amended.

Subject to future developments, CPF may file additional proxy statements for solicitation of proxies from CBBI or CPF shareholders in connection with special meetings of such shareholders at a date or date subsequent hereto and may file a tender offer statement. Investors and security holders are urged to read the registration statement and proxy statement and any other relevant documents, when available, including the tender offer statement, if filed, filed with the SEC, as well as any amendments or supplements to those documents because they contain and will contain important information.

Investors and security holders may obtain a free copy of the documents filed with the SEC at the SEC’s internet website at www.sec.gov. Such documents may also be obtained free of charge from CPF by directing such requests to Central Pacific Financial Corp., 220 South King Street, Honolulu, Hawaii 96813; attention David Morimoto; 808-544-0627.

CPS, its directors, and executive officers, and certain other persons may be deemed to be participants if CPF solicits proxies from CBBI and CPF shareholders. A detailed list of the names, affiliations and interests of the participants in any such solicitation is contained in CPF's definitive proxy relocation statement as filed on May 22, 2003. Information about the directors and the executive officers of CPF and their ownership of an interest of CPF stock is set forth in the proxy statement for CPF 2003 annual meeting of shareholders.

I would now like to turn the conference over to Mr. Clint Arnoldus, Chairman, President and CEO of Central Pacific Corp. Please go ahead sir.

Thank you very much, Heather. And hello to everyone from a very busy Honolulu that's being turned upside down by the visit of the President today. We want to thank all of you for joining us today to review our third quarter results. On the call with me is Neal Kanda our Chief Financial Officer.

Let me begin with a review of the significant events of the third quarter followed by a brief discussion of current market environment, and then I'll provide an update on the merger initiative with CB BancShares. Neal will then follow that with a review of the financial results, and we'll close by answering any questions you have.

Pertaining to the third quarter review. CPF and it's subsidiary, Central Pacific Bank continues very solid performance in the third quarter of 2003, with earnings of $8.3 million, return on equity 17.9%, and return on assets of 1.6%. Diluted earnings per share of 51 cents for the quarter increased by 6.3% over last year's third quarter.

Loans increased during the quarter by $89 million or 6.7%. That was fueled by increases in the residential, commercial, and commercial mortgage categories. The current market environment in Hawaii has been improving, aided by a very favorable interest rate environment. Loan activities picked up during the past six months and we expect that to continue.

We have noticed competition getting even more keen with pricing and underwriting challenges, particularly in the larger credits. I am pleased to say that our non-performing assets decreased by 58% from a year ago to $1.8 million at September 30th.

Let me say a few words about the environment we're operating here as it pertains to Hawaii's economy. The strengthening of Hawaii's economy is being led by strong investment in real estate and construction. Single family home resales are up 27% from last year, and the median sales price hit a record $395,000. Condominium resales are very strong. They're up 54%, with median sales price of $180,000. Tourism, which is our primary industry here in Hawaii, experienced a strong summer and recent visitor arrival statistics have trended higher. The weakening of the dollar will certainly contribute to a resurgence in travel from Asia and other international points. And we also think because of global geo-political development, the safety factor is a significant contributor to both real estate development activity and increased tourism. Our unemployment rate remains comparatively low, at 4.3%. Personal incomes are up more than 5% from year ago levels.

Looking to the future, there are several major developments in Hawaii that we think are very encouraging. There are currently five high-rise condominiums representing 1700 units and a construction cost of about $600 million that are all in the permitting phase. Conversions of hotel rooms and apartments to condominiums and timeshare units is a significant trend that is going to reshape the nature of our visitor industry with large chains such as Marriott and Hilton involved. We are also seeing many out of state developers previously inactive in Hawaii return to go this market.

Additionally, there are major housing projects being planned by the Army, Navy and Air Force in Hawaii. These are very big projects involving the refurbishment and development of more than 16,000 housing units over the coming years. Federal contracts have recently been awarded which will contribute several billion dollars in construction projects.

And another interesting area of development in our economy is the cruise ship industry. There's currently one ship that provides cruises, the island chain year round with the capacity of 2,000 passengers. It's ten restaurants require local agricultural and aqua-culture products, and Norwegian Cruise line recently announced plans to add two new US flag ships for cruises in Hawaii next year and they're going to hire 2100 employees. In the long-term they'll be creating 10,000 new jobs as well as increasing tourism statewide. So all these developments really strengthen our outlook for Hawaii's economy.

Let me say a few words about our strategic focus. Turning back to our initiatives during the third quarter, we were successful in adding key experienced personnel to our sales management, retail investment sales, and business banking areas. These investments in people will compliment our existing team and are going to help accelerate top line revenue growth, which will build a strong foundation to serve our customers. Additionally, our sales culture is very well entrenched in our bank.. We continue to refine it in our incentive systems and traditional controls are still in place to ensure that our credit quality remains strong.

As one of our strategic goals, we continue to enhance our efforts to be employer of choice in Hawaii. In November we plan to launch an exciting new program that will continue to recognize and reward the efforts of our dedicated and loyal employees. As we approach our 50th anniversary next year in serving Hawaii's community, such a program we think is very timely. With the combination of a strong sales culture, balance incentive program, preferred employer focus, and a second to none work ethic, we look forward to our next 50 years of fiercely loyal banking here in Hawaii.

Let me also take just a moment to address the status of the merger initiative with CB Bancshares. We remain very committed to moving forward with this transaction, although we're disappointed by the many obstacles that CB Bancshares has placed in the way of it's shareholders ability to meet or call a meeting, we still hope that ultimately CB Bancshares will negotiate with us.

In the meantime, we're moving forward. We're currently proceeding with our efforts to secure all necessary regulatory approvals for the combination of CB Bancshares. We believe that our company is well positioned to move forward toward completing the combination of Central Pacific and CB Bancshares' assuming receipt of those approvals. We're encouraged that the market is supporting this transaction based on the pricing of CB Bancshares common stock. We believe the continued patience and support of both company's share holds will be rewarded with a positive outcome for everyone.

It's also important to note that our team continues to grow with high quality employees. As a matter of fact, we haven't lost any key employees or customers since we initiated this merger. I 'd like to turn the discussion over to Neal Kanda, who will provide more details in our financial performance. Neal.

Thank you. The following is a discussion of 2003 third quarter financial highlights. Central Pacific Financial Corp and it's subsidiary, Central Pacific Bank reported net income of 8.3 million for the quarter, increasing by 4.9% or over 8 million earned in the third quarter of 2002. Diluted earnings per share for the quarter of 51 cents increased by 6.3% over last year's 48 cents a share.

Total assets at September 30, 2003 of 2.1 billion increased by 7.7% over a year ago, with loans increasing by 10.8%, funded by a 7.7% increase in deposits. During the third quarter of 2003, loans increased by $89.6 million or 6.7%, equally balancing the commercial real estate, residential real estate, and commercial loan categories. We anticipate continued loan growth in the coming quarters.

Quarter end deposits of 1.7 billion increased by 7.7% over a year ago, with non-interest-bearing deposits increasing by over 20% from a year ago, and non-CD interest bearing deposits increasing by over 12%. Stockholders' equity at September 30th, 2003, totaled $187 million, increasing by 12.2% from a year ago. The company's equity to assets ratio increase to 8.79% compared to 8.44% at September 30th, 2002.

While the company maintains a stock repurchase program which is approximately $10 million authorized for that purpose, no repurchases were made during the first nine months of this year. Earlier this month, the company announced issuance of $40 million in pool trust deferred securities to raise regulatory capital to support a proposed merger and for general corporate purposes.

Return on assets for the third quarter of 2003 was 1.58%, decreasing from 1.63% a year ago. Return on stockholder's equity of 17.89% compared to 19.04 in the third quarter of 2002. Efficiency ratio improved to 52.71% for the third quarter from 54.06% measured for last year's third quarter.

Net interest income on taxable basis increased by $250,000 or 1.1% for the quarter, compared to last year's third quarter. Total interest income decreased by 2.2 million, reflecting a 97 basis point decrease in earning assets yield, to 5.84% from 6.81% in the third quarter of 2002, mainly due to a downward repricing of loans and investment securities during the last year. Average earning assets for the third quarter of 2003 of 1.95 billion increased by 8.4% compared with the third quarter of last year.

Interest and fees on loans for the third quarter decreased by 879,000 or 3.7% from the third quarter of last year. An increase of 7% in average loans was offset by a decline in loan portfolio yield to 6.65% from 7.38% in the comparable quarter of last year. Interest on securities for the third quarter decreased by 1.1 million compared to last year's quarter. Yield on the securities portfolio declined to 3.91% from 5.73% for the quarter, reflecting the decline in interest rates during the last year and accelerated prepayments on mortgage-backed securities experienced during the third quarter of this year.

We anticipate that yields on the securities portfolio will improve in the fourth quarter. A corresponding decrease in interest expense of 2.5 million or 34.8% for the third quarter of 2003 reflected a 73 basis point drop in the effective cost of interest-bearing liability to 1.17% from 1.90% in the third quarter of last year. Average interest bearing liabilities increased by 5.6% on the quarterly comparison.

Average non-interest bearing deposits of 308 million for the quarter of 2003 increased by 26.1% over last year's quarter. As a result, net interest margin for the third quarter of 2003 was 4.89% or 35 basis points below the margin of 5.2% reported for the third quarter of 2002. The loan prepayment fee was received during the third quarter of this year in the amount of $1.3 million.

The annualized impact on net interest margin for the quarter was 27 basis points, bringing the adjusted net interest margin to 4.62%. Management anticipates that downward pressure on asset yields will be partially offset by continued loan growth and improved yield on securities portfolio in the fourth quarter, while a reduction in the cost of funds will moderate. Net interest margin for the fourth quarter is anticipated to be in the 4.6 to 4.7% range.

The company's balance sheet remains relatively neutral to slightly asset sensitive. Provisions for loan losses for the first nine months for 2003 total $700,000, with $500,000 provided in the third quarter of this year. Year to date net loan chargeoffs of $92,000 were aided by large loan recoveries reported earlier in the year. Third quarter net chargeoffs totaled $1.1 million, largely attributable to a commercial mortgage loan secured by an office building. Allowance for loan losses at September 30th, 2003 was 1.73% as a percent to total loan, compared to 1.94% a year ago.

Non-performing assets and 90 day delinquent remained at lower levels, totaling $2.6 million or 18 basis points of total loans. Non-accrual loans were mainly comprised of a loan on a commercial property secured by a first mortgage. There was no other real estate held at September 30th, 2003. Continuance of economic uncertainties as they affect the Hawaiian national economies may lead to deterioration of quality in the company's loan portfolio.

Total other operating income of 3.9 million for the third quarter of 2003 increased by 811,000 or 26% compared to last year's third quarter. Investment securities gains of $164,000 were realized during the current year's quarter, compared to 163,000 in net securities losses in last year's third quarter. Net of securities transaction, total operating income increased by 14.7% between those quarters.

Income from fiduciary activities increased by 28% to $448,000 for the 2003 quarter, and fees from retail investment sales activities included in other service charges on the income statement continue to increase with year-to-date fees up by 66% over last year. The company expects accelerated growth in the wealth management investment areas in the coming quarters.

Although other operating expense of 14.3 million for the quarter was virtually unchanged from last year's quarter, the portion of costs associated with the company's proposal to acquire CB Bancshares which has been expensed, total $617,000 for the quarter, and $1.3 million or 5 cents per share for this year to date. Last year's quarter included $976,000 in interest expense on a tax -- state expense which is currently under appeal. Adjusting for these charges total operating income for the quarter increased by 2.6%. Effective tax rates for the third quarter was 33.5% compared to 32.4% in last year's quarter.

In summary, we maintain a solid performance during the quarter in the face of some historic interest rate movements and increased competition. We expect continued improvement in earnings through the fourth quarter of this year and as stated in our news release today, anticipated diluted earnings per share for the year will fall within the 2.05 to $2.07 range for the 2003 year. This concludes the discussion of our third quarter financial results. We welcome any questions you may have.

Thank you, sir. The question and answer session will begin at this time. If you're using a speaker phone, please pick up the handset before pressing any numbers. Should you have a question, please press star one on your push button telephone. If you wish to withdraw your question, please press star two. Your question will be taken in the order that it is received. Please stand by for your first question.

Our first question comes from Brett Rabatin with FTN Mid-West research. Please state your question.

Hi, guys. A couple questions. First wanted to talk about the securities portfolio, the decrease in the quarter in terms of the yield was about 55 basis points, so in relation to your guidance for the margin to be between 460 and 470 in 4Q, I was curious, one, to know how much you expected the securities portfolio to step back, and if you could give us any thoughts on how much you had in the way of premium amortization during 3Q, is question one.

So answer that first?

Go ahead.

Okay. During the third quarter of this year, you know, as you know, the -- we experienced prepayments on mortgage-backed securities and they approximated about half a million dollars, so on an annualized basis, it would be about 35 basis points on our securities deals. So we don't expect that level of prepayments in the fourth quarter, we don't expect. I can't pinpoint an exact amount of yield for the fourth quarter, but based on that, we are -- we do anticipate that the yield will spring back.

Okay. And then in relation to loan growth, averages weren't up a whole lot, but any periods were. So I was curious if there were some big fundings at the end of the quarter, and if you could talk about the competition of growth, if there was any deals in that or if it was all your originations, and then if 3Q holds true for fourth quarter and beyond, you ought to have pretty strong loan growth, and I was just curious if you could give us some thoughts on the future on the pipeline.

Yeah. We anticipate continuing strong loan growth. We've been building a strong sales environment here, and we think that that wave finally hit in the third quarter, and we're very pleased that that loan growth was really very well balanced, as Neal said. You know, it was pretty much even between commercial real estate, residential real estate and commercial loans. And largely organic growth, so I think that our message is being heard in the market and I think another initiative we have is to be the preferred, envision being the preferred employer, being the preferred bank in the state, and I think that this last quarter will show that we're making some progress there. As I say, looking forward, we anticipate continuing strong loan growth based on the backlogs we have.

Okay. And then in relation to expenses, the $617,000 charge for the Citibank proposed merger was a little more than I was expecting this quarter. Can you talk about the size, why it was the size it was this quarter and then what you anticipate for the next few quarters in relation to that, and then also in relation to the guidance for earnings, if there are any securities gains embedded in that guidance.

Okay. With regard to the third quarter charges expenses related to the deal, actually some of it is going to spill over in the third quarter from the second quarter because of billings. It was difficult to estimate the expenses. So you can't, you know, take the two quarters being almost even as being a trend. We don't expect right now, anyway, depending from what we foresee that level of expenses in the fourth quarter related to the deal that need to be expensed.

I missed that last. You do not expect charges -- fourth quarter?

I'm sorry. We don't expect levels -- those levels with what we know now of how things will roll out in the fourth quarter.

What they won't be zero either, right?

No, they won't be zero.

So $300,000, does that sound roughly in the ballpark?

Are you trying to pin us down again, huh, Brett?

Yeah. I mean .

It's difficult to say.

Okay.

I can't really comment on that.

Okay. And then securities gains, do you anticipate taking some of those in the fourth quarter?

Our approach on our investment portfolio, as you probably have seen, that seems like the range in a ten-year is something between 4% to 4½%, and it's been hovering in the midpoint, and we're using that right now as a measure. If it kind of heads toward 4% on any news, seeing that it's a choppy market, we may take advantage of those situations mainly to adjust our duration. Of course, you know, windfall would be to enjoy some securities gains, but we are looking -- it's a hard interest rate environment to read, but we are looking to -- for opportunities to shorten our duration on our portfolio.

Okay. And just one last question. The chargeoffs in the quarter, I thought I heard you mention that it was mainly related to an office building? Is that correct?

Yes. That's correct. You know, we Brett, we're basically a secured lender. That loan is very well secured.

It seems you might have some charge recoveries from that at some point.

Yes.

Thanks, guys.

Thank you. Our next question comes from Joe Morford with RBC Capital Markets. Please state your question.

Hi, gentlemen. It's actually Brian Cahn (ph). I just had a few questions. One, on the accrued portion of the Citibank expense, can you guys quantify that so far?

When you say the accrued portion.

The portion that you're capitalizing that will ultimately go through on the deal costs, as part of the deal?

Yes we reported, as I mentioned earlier about 1.3 million in cost expensed. We do have capitalized on our balance sheet approximately $8.8 million in costs related -- accumulated costs to date, in addition to the 1.3 million, which have not been expensed, and it's capitalized in anticipation of the closing of the deal

How about the second question is on the trust preferreds that you guys issued just recently, I think it was $40 million. I guess my question is with the margin expected to be up, does that assume that the trust preferred capital is being reinvested into securities? If you guys have to keep it short term to pay for a potential closing of Citibank, wouldn't that be a drag on the margin?

Well, you know, the approach we're taking with the 40 mill is we will, of course it's been kept to the company, we will be reinvesting those funds as the markets permits not necessarily on any short term securities, because our investment securities portfolio which is over half a billion dollars will be providing cash flow in the coming quarters. That will be -- that will mitigate the negative carry.

Okay. But you still with that on there think that we can -- you could get an expansion in the margin in the fourth quarter? I guess to me, I just thought the spread on that would be a little bit tighter than your normal margin. It might, while it helps the net interest income might suppress the margin a bit.

Yes. We still expect that our margin will fair better than it has in this past quarter, as adjusted.

I guess the last question, I mean the loan growth was pretty amazing in the quarter, and I know Brett touched on that earlier. Are you -- it just seems like what was there a trigger that kicked all this growth off, and after a couple quarters where it seems like the competitive market or whatever it was that was sort of restraining loan growth all of a sudden came off and you guys were able to print a great number.

It was just all timing. Those loans had been on our backlog for a while and in closing the loans, you know, we can run into delays for many, many reasons, and usually the life cycle of -- particularly the commercial loans is pretty long. So we always knew that was coming. We thought that a few of the larger ones would actually close last quarter and they ended up getting delayed, so it looks like a wave hit us, but it's pretty measured in terms of how the backlog has always looked and continues to look. It's just the way they all converged.

Well, it was good to see.

Yeah.

Thanks.

You bet.

Thank you. Our next question comes from Jessica Jones with the Endicott (ph) Group. Ma'am, please state your question .

I just had one question and you may have touched on it earlier and I missed it. You mentioned in the text of the release that gain on sales, mortgages was one of the drivers of the non-interest income this quarter, but I didn't see it broken out. I was just wondering where on your income statement those gains are included.

One moment, please.

Okay.

What amount are you referring to in the press release?

Well, let's see, under third quarter results of operations, it says other operating income, the increase was primarily driven by increases in trust income and gains on sale of residential mortgage loans.

Okay.

I was just wondering where those gain on sales loans were.

It's yes, included in other income.

That other item, the 790?

Yes, in that number.

Okay. Great. Thank you.

Okay.

Thank you. As a reminder, should you have a question, please press star one at this time. Our next question comes again from Brett Rabatin with FTN Mid-West research. Please state your question.

Just a couple follow-ups. One, I was curious with the additions you've made in staffing, the personnel was about $400,000 higher in quarter, will we see additional increases in future quarters or from here on out are we merit type increases and whatnot?

we have been successful in hiring a number of very well known and accomplished officers in the market, and have pretty much filled our slate at this point. We're always going to be opportunistic if something comes available, and again, we're very gratified that some of the best people in the state is actually beginning to call us to see if we can use their services, rather than us pursuing them. Based on what we know right now, it looks like that slate is full. Now, we're going to start seeing the result in earnings in future quarters.

Okay. And then I know it's a little bit early, but in relation to the asset management team, is there any visibility that those guys are going to have some additional AUM to drive revenue growth in the next few quarters, obviously you're up about 50,000 linked quarter.

You know, it's clearly a new service for us. At least on a scale that they provided. So this last quarter was really dedicated to making sure they had the systems and operational support to function, and early signs are very positive that they're going to be able to bring in a good revenue base. In the third quarter, we did not have any fees booked for that group at all.

Okay. So 3Q is not even related to the new guys?

No, not on the revenue side.

Okay. Obviously on the expense side.

Yeah.

And then one last question. On the loan loss reserve, was curious you obviously still have relatively minimal MPAs in this quarter, the provision was half a million. Aside from what chargeoffs are, where do you see the reserve going from here, given where your asset quality is?

Well, you know, we have provided during the quarter largely due to loan growth, and as loans grow, we may feel that we need to provide for those contingencies in the future. So there will be a gradual rise probably in reserve in the long run, but nothing major at this time.

And on the other side of that coin, of course, the auditors are challenging us, given our record of credit quality as maybe even having too large a reserve. So ...

Well, that's sort of the question is, is do you keep the high reserve, and it sounds like you may even go a little bit going forward then?

Yeah, based on loan growth, yes, I think it's prudent to still be reserving.

Okay. All right. Thanks.

Again, ladies and gentlemen, as a reminder, should you have a question, please press star one at this time. If there are no further questions, I will now turn the conference back to Mr. Arnoldus for closing comments.

Well, thank you for listening in and thank you for the questions. We continue to place resources in key areas of this company to position ourselves for future revenue growth, and diversification. We think it's going to pay off strongly for us in the future. The real keys to our success in coming quarters are to continue to provide the excellent service, which is really the cornerstone of this bank. It started 50 years ago, to meet the needs of our customers through real effective sales and service management process, and to continue to experience market share growth, and we're going to be focused on accelerating the growth of our non-interest income, and we just thank you again for your continued interest and the support of Central Pacific Financial Corp. and we look forward to the coming quarter.

Ladies and gentlemen, if you wish to access the replay for this call, you may do so by dialing 1-800-428-6051 or (973)709-2089 with an ID number of 307446. Or you may visit the company's web site as www.centralpacificbank..com. This concludes our conference for today. Thank you all for participating and have a nice day. All parties may now disconnect