Bank of Hawaii Corp
NYSE:BOH
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
55.09
80.28
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Bank of Hawaii Corp
Earnings Call Analysis
Q3-2023 Analysis
Bank of Hawaii Corp
Bank of Hawaii emphasizes a lending approach focused on its core markets in Hawaii and the West Pacific combined with prudent portfolio management that has historically resulted in lower net charge-offs through economic cycles. By maintaining a diversified portfolio, with 59% in consumer loans and 41% in commercial loans, and a majority of the portfolio being secured—mainly by real estate with conservative loan-to-value (LTV) ratios—the bank persists in demonstrating asset quality resilience. Their real estate markets face unique supply constraints due to geography and regulatory hoops, contributing to stable demand, especially in the housing and Oahu industrial sectors. Even with Maui's recent fire impact, the bank has addressed potential losses with a calculated exposure of $10.8 million after insurance considerations.
In the third quarter of 2023, Bank of Hawaii experienced a dip in net interest income of $3.4 million in comparison to the previous quarter, reaching $120.9 million. The net interest margin also shrank by 9 basis points to 2.13%, largely due to elevated funding costs despite improved asset yields. These financial parameters are pressured by an inverted yield curve and inhibiting higher short-term rates. Still, the bank remains successful in beating its peers with a deposit beta of 26%. Challenges in deposit mix shifting persist, balanced by a strategic use of swaps to mitigate interest rate risks, aiming to stabilize net interest income while potentially increasing the net interest margin by 3 to 5 basis points in the upcoming quarter.
Bank of Hawaii is implementing expense management initiatives that helped lower costs, with third quarter expenses totaling $103.1 million, down both from the previous quarter and year-over-year. Even with inflation headwinds, the bank expects expenses in the fourth quarter to be comparable or slightly lower. The focus on cost control has translated into enhanced net income, climbing by $1.8 million to $47.9 million, and earnings per share which increased by $0.05 to $1.17. Their capital position remains robust, with dividends paid out to common and preferred shareholders, and a maintained dividend of $0.70 per common share for the fourth quarter.
The bank has proactively adjusted its hedging position to navigate a prolonged period of high interest rates, adding $1.8 billion in interest rate swaps, for a total of $2 billion in the third quarter, and subsequently increasing it to $2.5 billion in October. These strategic moves are meant to rebalance the earnings asset mix and minimize exposure to further rate hikes. While details on the timing of these hedges within the quarter weren't fully disclosed, the bank ensures that its guidance considers the full impact of these swaps.
You don't have any saved screeners yet
Good day, and welcome to the Bank of Hawaii Corporation Third Quarter 2023 Earnings Conference Call.
[Operator Instructions]
Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Cindy Wyrick, Director of Investor Relations. Please go ahead.
Thank you. Good morning, good afternoon, everyone, and thank you for joining us today as we discuss the financial results for the third quarter of 2023. Joining me today is our CEO, Peter Ho; our CFO, Dean Shigemura; our CRO, Mary Sellers; and our IR Manager, Chang Park.
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 the actual results may differ materially from those projected. During the call this morning, we will be referencing a slide presentation as well as the earnings release, both of which are available on our website, boh.com, under the Investor Relations tab.
And now I'd like to turn the call over to Peter Ho. Peter?
Thanks, Cindy. Good morning or good afternoon, everyone. We appreciate your interest in Bank of Hawaii. Before we begin, I'd like to acknowledge the tragic events of August 8 on Maui and in particular, in Lahaina. We are so fortunate that all of our employees on Maui are safe. Unfortunately, our Lahaina brand was destroyed. I'm incredibly proud of and thankful for our Maui leadership team who immediately mobilized into action as the tragedy unfolded, providing support to our affected employees, our customers and the broader Maui community.
Here in Oahu, over 100 of our staff have teamed with Hawaii Community Foundation, provide processing support for the Maui Strong Relief Fund, which now totals over $150 million. The recovery of Lahaina will take both time and patience. Bank of Hawaii intends to be there every step of the way.
Now on to the quarter. We produced another solid financial performance for the third quarter. Average deposits grew nicely in the quarter. Loan levels were flat. Margin continued to be pressured by the inversion in the curve, although we witnessed a material slowdown in margin erosion compared to the prior quarter. Expenses were well controlled, and we improved our capital levels meaningfully.
Credit, as Mary will share with you, remains a very good story for us. I'll start off with some commentary on funding and then touch on broader market conditions in Hawaii. I'll then hand it over to Mary, who will discuss credit, including the impact of Lahaina wildfires, and then Dean will then share with you some more granular color on the financials. So why don't we start, Chang, with the deposit market share slide.
This is generally where I like to begin. And just to remind the audience that Hawaii is an interesting deposit market. It's a market where effectively 5 local institutions hold 97% of the bank deposit market share. The data that you're looking at here is the most recent addition of the Fed, of the FDIC annual summary of deposits. And fortunately, we're happy to see Bank of Hawaii right up there at the top, really as a result of a lot of hard work over the past 125 years serving Hawaii's consumers, businesses, and municipalities. Today, our deposit balances are 48% consumer, 41% business and 11% municipal.
In terms of deposit makeup, you see that 58% of our deposits are either insured or uninsured but collateralized. The deposits are incredibly long-tenured. So more than 50% or 53% are deposits, are 20 years or older by relationship and 75% of our deposits are 10 years or older by relationships.
For the quarter, we had a spot increase of 1.4%, taking us to $20.8 billion for the third quarter. You'll see here really for the balance of 2022, our deposit base has been pretty darn stable. Average balances in the quarter were actually up 2.4%. Our average balances were, I want to say, $20.5 billion for Q3 as compared to $20 billion for Q2.
Comparing us to the broader national market of what HA deems as the small banks, you see that on a year-to-date basis, Bank of Hawaii has performed quite nicely versus the broader national competitor set.
Onto the funding side of deposits, really, we take what we believe is a very unique marketplace. We take a unique market position within that marketplace and take really a brand or leading top-of-mind brand position within the market to generate meaningful pricing advantages over kind of the medium -- midsized bank. Here you see that in cost of interest-bearing deposits. On the next slide, you'll see that, that also extends into funding costs for total deposits.
And then obviously, into betas, which are meaningfully lower than our primary competitor set. So in addition to having a very stable and strong deposit base over the year, we also have built quite meaningfully our tertiary or secondary sources of liquidity. So here you see, as of the third quarter, our backup liquidity, as we like to say, is up to $9.6 billion comprised of cash, securities available, FHLB and/or FRB borrowing capacity. And so this $9.6 billion, as you see, is well in excess of our uninsured or uninsured and uncollateralized deposit base.
Switching gears now to the local economy. Performance is -- remained strong. Unemployment as of September was still down below that of the national average. So at least from an employment standpoint, the state is performing quite nicely versus our U.S. mainland marketplace. Too early to tell what the impact of the Maui fires will be on employment. But I think we could probably anticipate somewhat of a step up here. But I think the fact of the matter is the supply of labor will still be challenging relative to the overall demand. And so really, I think what we'll experience on Maui is not so much a lack of worker demand, but just logistics and how they get workers into the right places.
The visitor industry continues to do well. So year-to-date, the state has experienced nice growth, both in spending as well as arrivals, up 10% by spending, up 8% by arrivals. Got there in a little bit different way from the recent past. The U.S. market has moderated a bit as we were anticipating. But that has been more than offset by a nice pickup, as you can see in both Japanese visitors and spending as well as by other countries, Canada, Australia, et cetera.
In August, the wildfires on Maui were on August 8. You can imagine that had a pretty meaningful impact to visitor statistics for August. We were down 9% by expenditure and 7% by arrivals as basically Maui came to a standstill. So Maui for August, as you might imagine, had expenditures declined just about 50%. Arrivals were down 57%. But when you -- if you back those numbers out from the overall state, the state was actually still pretty robust at plus 6% and plus 16% ex-Maui.
Our understanding or our sense for the visitor industry going forward is kind of a ramp up back to a more normal environment post Lahaina. Lahaina itself really is driven by Kaanapali, which is the primary visitor accommodation site in that part of the island. That sector or that region right now is accommodating a number of federal and FEMA employees. So they're faring well with a little bit different kind of visitor stuff than they're used to.
The idea or the plan there is to over the course of this year transition from that formal visitor back to the traditional U.S. or international visitor. We'll see how that progresses. But it seems like -- it sounds like what we're hearing from the hotel side that, that is progressing.
Other parts of Maui, which were impacted by the Lahaina fire, are beginning to see green shoots, I'd say, of activity. And there is, I think, a fair amount of optimism that the -- those outerlying areas of Maui will bounce back. So our sense is that, of course, Lahaina, quite expectedly, has had an impact on the visitor industry. It continues to, in the short run. But over the next several months, we're hoping to see a trajectory towards more -- kind of more towards normalization again.
On the next page, you see RevPAR or revenue per available room for state, which continues to be a very positive story, and Mary has some slides a little bit further in the deck to support that further. And then finally, to finish off with the real estate -- residential real estate market here on Oahu, which is our largest marketplace. There, we see kind of a mixed bag by median sales price. So these are September-on-September numbers, down 4.5% for single-family homes, but up 6% for condominiums. But what's interesting is despite a pretty meaningful reduction in sales activity, inventory levels remain extremely low.
So month inventory for single-family homes at 2.7 months, months inventory for condominiums are around 3 months, days on market is still well below at 20 and 21 days. So I'll stop there. And now let me turn the call over to Mary, who can share with you some credit performance for the third quarter. Mary?
Thank you, Peter. Bank of Hawaii's lending philosophy is grounded in 2 fundamental tenets, lending in our core markets of Hawaii and the West Pacific and to long-standing relationships we understand. We combine this with ongoing disciplined portfolio management, actively exiting those products or segments that have proven to have higher risk profiles. This positions our portfolio for continued lower net charge-offs through different economic cycles.
Our loan portfolio is built on long-tenured relationships diversified by asset categories with 59% consumer and 41% commercial, has appropriately sized exposures and is 79% secured with real estate with a combined weighted average LTV of 55%. Our commercial real estate portfolio, which represents 27% of the total loan portfolio is diversified across the various asset types. The portfolio built on relationships with demonstrated experience and financial capacity is conservatively leveraged with a weighted average loan-to-value of 55%.
Our office portfolio is granular and has a weighted average loan-to-value of 56%. 25% of the portfolio is in the downtown Honolulu Central Business District. This segment has a weighted average loan-to-value of 63% and 47% of the exposure is further supported by repayment guarantees. 2% of loans in the Office segment are maturing through 2024.
While not immune from the changing dynamics impacting the office markets across the U.S., vacancy and rents remain stable in the Oahu office market as conversions to alternative use continue to reduce overall inventory levels as denoted in the gray bars. In the last 5 years alone, approximately 1 million square feet of inventory has been removed.
Hawaii's supply constraints driven off its unique geography and onerous regulatory process serves to create relative stability in our real estate markets over the long term and less volatility during periods of stress. This is particularly pronounced in the housing sector, where severely limited supply, again, in the gray bars, is compounded by the high cost of homeownership. These 2 factors continue to drive consistent, strong rental demand.
Tight market conditions also continue to persist in the Oahu industrial market with vacancy rates at historic lows sub-1%. Oahu's retail market, whether it's supply chain disruptions, manufacturing shutdowns, backlog seaports and inflation with vacancy and rents returning to pre-pandemic levels. Grocery and drug-anchored retail continue to outperform.
Despite the protracted delay in the return of the Japanese visitors to pre-pandemic levels, flat inventory levels again helped to support occupancy and RevPAR levels. The Hawaiian islands remain a top 5 destination in terms of highest revenue per average room and average daily room rate with Oahu attracting more visitors than any other island in the state.
In addition to the continued strength in our markets real estate fundamentals, we have just 8% of our commercial mortgage loans maturing prior to 2025, minimizing repricing risk in the portfolio.
Tail risk in the commercial real estate portfolio remains modest with just 8.8% having an LTV greater than 80%. Our construction portfolio represents 2% of total loans, with the primary segment being low income or affordable housing, which continues to be chronically undersupplied in our markets.
Turning to Maui. Maui represents 11% of the state's population and 11% of the state's real GDP. Our loans in the fire impacted zones of Lahaina and Kula totaled $169 million or 1% of total loans. The majority of this or 93% is secured with insurance proceeds providing substantial coverage for those properties that were destroyed.
After accounting for insurance shortfalls and 50% of land value associated with those properties, and a conservative 50% loss rate on unsecured direct and indirect auto loans, we estimate our potential loss directly related to the area impacted by the fires at $10.8 million.
Asset quality remained strong in the third quarter with net charge-offs of $2 million or 6 basis points annualized of total loans and lease outstandings, up $700,000 or 2 basis points for the linked quarter and up $900,000 or 3 basis points year-over-year. Nonperforming assets were $11.5 million or 8 basis points, stable from the second quarter and down $2.3 million or 2 basis points year-over-year. All nonperforming assets are secured with real estate with a weighted average loan-to-value of 56%.
Loans delinquent 30 days or more remained relatively stable at 23 basis points at the end of the quarter. Criticized loans as a percentage of total loans were 2% at the end of the quarter, but down to 1.74% of total loans by the middle of October as we continue to see improved financial performance in a number of credits, which have been slower to recover from the ancillary impacts of COVID.
The allowance for loan and lease losses was $145.3 million at the end of the quarter, down $100,000 for the linked period and down $1.2 million from the same period in '22. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.04% at the end of the quarter, flat with the prior quarter and down 6 basis points from the comparable period in 2022.
I'll now turn the call over to Dean.
Thank you, Mary. Net interest income was $120.9 million in the third quarter, a decrease of $3.4 million linked quarter. Net interest margin was 2.13%, a decrease of 9 basis points linked quarter. Linked quarter decreases in both net interest income and margin were primarily due to higher funding costs partially offset by higher asset yields as the inverted yield curve at higher short-term rates continue to pressure our income and margin. We continue to exercise the positive pricing discipline as evidenced by our deposit beta continuing to outperform that of peer banks.
As of the third quarter of 2023, our cumulative total deposit beta was 26%. We expect our deposit beta through the cycle to be 28% to 30%, which is consistent with our prior guidance, but also incorporates the potential that we may achieve a modestly lower level.
In the third quarter, deposit rates exhibited early signs of stabilizing. However, we are continuing to expect a moderate further mix shift from noninterest-bearing deposits, which represented 27% of our total deposits as of the end of the quarter to interest-bearing savings and time deposits.
To better position ourselves for higher for longer interest rates and actively manage our asset duration, we added $1.8 billion notional of pay-fixed received float swaps in the quarter to hedge a portion of our fixed-rate loan available-for-sale securities portfolios, bringing our total swap portfolio to $2 billion at the end of the third quarter.
In October, we continued to improve our position with an additional $500 million notional, bringing our current total swap portfolio to $2.5 billion. The additional -- the addition of swaps has increased the floating and adjustable portion of our earning assets to 41% from 27% at the beginning of the year and reduces the risk from higher interest rates.
In addition to the hedges that we added in the third quarter, net interest income and margin continued to be supported by strong cash flow and overall asset repricing at higher rates. Maturities and paydowns of the loan and investment portfolio of $2.8 billion continue to provide an ongoing supplement to the $5.6 billion in assets, which includes our interest rate swap portfolio that we price annually. When including the $500 million of additional swaps completed in October, assets repricing annually is $6.1 billion.
The yield on fixed-rate maturities and paydowns of loans and investments in the third quarter was 3.9% and 2.2%, respectively. These cash flows continue to be reinvested predominantly into new loans, which are yielding greater than 7% on average or held in cash at the Fed, which earns an attractive yield and preserves liquidity.
In the third quarter, the strength of our deposits, reliable cash flows and strong liquidity position enabled us to remix our liabilities and reduce noncore funding by $2.2 billion, consisting of $1.2 billion of fixed-rate FHLB advances, $575 million repurchase agreements and $377 million of public time deposits.
In addition to reducing interest expense, these actions reduced our balance sheet leverage and improved our capital position. Taking into consideration the rate environment and the reduction in our balance sheet from these changes, we expect net interest income will be modestly lower in the fourth quarter, but that net interest margin will increase 3 to 5 basis points.
Noninterest income totaled $50.3 million in the third quarter. Included in the results were $14.7 million of gains from the termination of repurchase agreements. These gains were partially offset by the sale of $159 million of AFS securities that resulted in a loss of $4.6 million. The sale of the securities reduced our interest rate and credit risk exposures and will improve our net interest income. During the quarter, we also recognized an $800,000 charge related to a change in the Visa Class B conversion ratio, which is reported as a contra revenue item in the investment securities gains and losses.
Adjusting for these items, noninterest income for the third quarter was $41 million. We expect noncore income to be at a similar level of $41 million to $42 million in the fourth quarter which is unchanged from our prior guidance and an improvement from normalized levels of a year ago.
During the third quarter, as is our practice, we managed our expenses in a disciplined manner as inflationary conditions continued. Expenses in the third quarter were $105.6 million, which included severance expenses of $2.1 million and $400,000 of extraordinary expenses related to the Maui wildfires. Adjusting for these items, expenses in the third quarter was $103.1 million, a decrease of $900,000 linked quarter and $800,000 from the third quarter of 2022. Expenses in the fourth quarter are expected to be approximately the same to slightly lower than the normalized expenses in the third quarter. While inflation continues to pressure expenses, increases in certain areas are being offset by expense management initiatives that moderate the expense growth.
Summarize the remainder of our financial performance in the third quarter of 2023, net income was $47.9 million, and earnings per common share was $1.17, an increase of $1.8 million and $0.05 per share, respectively. Our return on common equity was 15.38% and our efficiency ratio was 61.66%. We recorded a credit provision of $2 million this quarter. The effective tax rate in the third quarter was 24.76%, and the tax rate for the fourth quarter is expected to be 24.5%. We continue to grow our capital from prior quarters and maintain healthy excesses above the regulatory minimum well-capitalized requirements.
During the quarter, we paid out $28 million to common shareholders and dividends and $2 million in preferred stock dividends. We did not repurchase common shares of common stock during the quarter. And finally, our Board declared a dividend of $0.70 per common share for the fourth quarter of 2023.
Now I'll turn the call back over to Peter.
Thanks, Dean. So that does it for prepared remarks. And now we'd be happy to answer whatever questions you might have.
[Operator Instructions]
Our first question comes from Jeff Rulis with D.A. Davidson.
Maybe just wanted to check in on deposit flows, a pretty good deposit increase in the quarter. I wanted to see if you get a sense for what of that was maybe from potentially local banks tied to Hawaiian Electric? Or have you seen any kind of -- it might be early, but sort of FEMA-related inflows? Anything on as it relates to deposits?
Yes. Good question, Jeff. And you saw -- so deposits were pretty elevated on an average basis for the quarter. And then you saw that there was a pretty meaningful spike up there on a spot basis at quarter end, right? And to your point, some of that was, in fact, what I would call Maui wildfire-related stuff. So some insurance proceeds flowing in, we are starting to see some federal evidence of federal monies, state monies, county monies, kind of lubricating what you can imagine is a pretty dynamic environment right now.
So I would say that against that spot basis at quarter end, which is plus 300 versus the average for the quarter, maybe upwards of half of that would represent kind of Maui-related stuff.
Now I -- for planning purposes, I would probably reduce that out. But I do think longer term, we're just going to continue to see these somewhat idiosyncratic inflows and outflows of capital flowing as that situation begins to resolve itself and we move towards a rebuild phase on Maui.
Okay, Peter, and I appreciate it. I guess related to that, just I think that the noninterest-bearing level is -- correct me, in the 26%, 27% range. I guess if you think that, that some of that is somewhat -- while the flows are may be temporary, I'm getting to the point of -- kind of the bottom of that outflow. I think Dean has talked about potentially kind of a bottom in the fourth quarter, but I just wanted to check in on noninterest-bearing percentages, where do you think that bottoms out at?
Yes, it could be the kind of those -- the wildfire monies. I think portions of that might have been noninterest-bearing, not all of it. So that's a little money. I would say that as we look at noninterest-bearing for the quarter on average, we were down 2.9% average to average for Q3. That compares to 6.2% average for Q2 and 6.7% average for Q1. So we definitely are seeing a deceleration there.
On an average basis, that took our noninterest-bearing down to 28.5%. And so I think we are -- I'm not sure we're ready to declare victory on bottoming there, but I think we're pretty close to where we probably ought to end.
Okay. Got it. And just the last one for me. Just a comment on the loan pipeline and kind of expectations of kind of growth into '24 if it -- it sounds like a pretty moderate environment, but any thoughts in the next year?
Yes. I think moderate is the right term, Jeff. Obviously, we think that rate is impacting parts -- large parts of the consumer segment. A fair amount of uncertainty swirling around with geopolitical issues and interest rates, I think getting in the way of a lot of commercial production getting done right now. And then finally, I think what we've been reading or seeing is a bit of an uptick in sub-prime-type lenders finding things a little bit more difficult. Now that doesn't really impact our portfolios. As you know, we really don't play in that space.
But I think that kind of that sets up a lending environment that is really pretty modest. And so I would think that if we are flat to slightly up from -- over the next year, that would be a reasonable outcome for us. Interesting, I'm not quite sure what the rebuild phase looks like, but there may be some opportunities in there, but we'll see.
Our next question comes from Andrew Liesch with Piper Sandler.
Appreciate the margin thoughts here in the near term, Dean, but how should we be looking at it going into next year? I mean, is there a benefit that you think might happen from -- if we do get another 25 basis point rate hike increase given the swaps you've added, how do you think the margin will trend here beyond the fourth quarter?
Yes. If we do get another rate increase, where it's -- for right now, we're neutral. Where we benefit is if the Fed is on hold and keeps rates higher for longer, that's where you'll see a margin expansion. With the hedges in place, we've, in effect, been able to neutralize the impact from the liability side.
Got it. All right. That's helpful there. And then on the securities loss trade in the quarter, just some details behind that. I guess how many securities did you sell? Any planned reinvestment you can speak of and the earn-back on that transaction? And then beyond that, like any other plans to do any more loss trades similar to this one?
We continue to look at the market and the market conditions and if conditions are right, we may do more. But right now, we don't have any plans to and don't see any need to. Regarding the sale, it was a mix of corporates and munis and the payback period is about 3 years for that. And then what it did give us though is kind of a relief on the risk-weighted asset side. So it was a capital-accretive transaction for us.
[Operator Instructions]
Our next question comes from Kelly Motta with KBW.
So looking at your deposit balances, it looks like there was some really nice growth in the savings accounts. I was wondering if you were running any promotions at all during the quarter that helped boost that line.
We have been pretty aggressive in that particular space on the consumer side, Kelly. And we think there's -- we think that's a spot where we can deliver good value to customers seeking a little more flexibility in their funding, but at the same time, getting a quality rate and that translates back to us at a rate that is maybe a little bit more palatable than some of the higher-end TCD levels. So yes, that's a good space for us.
Got it. That's helpful. And thank you so much for walking through so much color on the swaps. Just wondering with the $1.8 billion you put on this quarter, what the timing was during the quarter that you made those actions and just wondering if that margin guidance includes the full impact or if some of that benefit we're seeing is the full quarter's impact of that strategy put in place?
Yes, Kelly, the swaps were put in place kind of throughout the quarter. So it wasn't a -- it was kind of using -- quarter, average. And then the guidance does include that impact from -- and benefit from that. And keep in mind that we did add another $500 million in early October.
Right. Got it. And then this is a bit of a ways off, but how should we be thinking about your margin when -- if and when the Fed cuts rates, the KBW baseline, I think we do have rate cutter to at the end of the year. Just wondering if with those received floating now put into place if in the implementation of a rate cut, if there could be a near-term drag on margin from that when that -- if and when that happens?
We don't expect -- in fact, we continue to expect that we'll benefit from lower rates on the short end from that cuts.
That concludes the question-and-answer session. At this time, I would like to turn it back to Cindy Wyrick for closing remarks.
Well, thank you, everyone, for joining us today and for your continued interest in Bank of Hawaii. As always, please feel free to reach out to either Chang or to me if you have any additional questions or need any further clarification on the topics discussed today. Thanks again, everyone, and have a great day.
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.