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하와이안 은행 코퍼레이션(Bank of Hawaii Corporation, BOH)은 하와이안 은행을 위한 지주회사로서, 하와이, 괌 및 더 넓은 태평양 제도 전역에 걸쳐 종합적인 금융 ...
하와이안 은행 코퍼레이션(Bank of Hawaii Corporation, BOH)은 하와이안 은행을 위한 지주회사로서, 하와이, 괌 및 더 넓은 태평양 제도 전역에 걸쳐 종합적인 금융 ...
Operator: Good day, and thank you for standing by. Welcome to the Bank of Hawaii Corporation second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chang Park, Executive Vice President, Executive Director of Financial Performance and Investor Relations. Please go ahead. Chang Park: Good morning and good afternoon. Thank you for joining us today for our second quarter 2026 earnings conference call. Joining me today is our President and CEO, Jim Polk, CFO, Brad Satenberg, Chief Risk Officer, Brad Shairson, and Manager of Investor Relations, Patricia Lam. Before we get started, I want to remind you that today's conference call will contain some forward-looking statements. While we believe our assumptions are reasonable, the actual results may differ materially from those projected. During the call today, we will be referencing a slide presentation as well as the earnings release. Both of these are available on our website, boh.com, under the investor relations link. Now I would like to turn the call over to Jim. Jim Polk: Thanks, Chang. Good morning and good afternoon, everyone, and thank you for joining us today. Bank of Hawaii delivered another solid quarter reflecting continued progress in the underlying earnings power of the franchise. For the second quarter, we reported diluted earnings per share of $1.47 and net income of $63.8 million, up 13% and 11% respectively from the prior quarter. Return on average common equity improved to 15.5%. Net interest income increased to $153.6 million, and our net interest margin expanded by four basis points to 2.78%. This marked our ninth consecutive quarter of margin expansion. The improvement reflected the continued repricing of our fixed rate assets, along with disciplined deposit pricing. Our average cost of deposits remained essentially stable at 127 basis points. The interest rate environment continues to evolve, with rates now expected to remain elevated for longer. We believe our balance sheet is well-positioned for this environment as higher rates support earning asset yields and the continued repricing of our fixed rate portfolio. At the same time, the competitive environment for deposits remains elevated as customers continue to prioritize yield, which may limit opportunities for deposit cost improvement in the near term. As we have discussed previously, the second quarter is typically a seasonally lower period for deposits at Bank of Hawaii, and this quarter followed that pattern. Average deposits declined modestly from the prior quarter. At quarter end, non-interest-bearing deposits continued to represent approximately 27% of total deposits. Our deposit franchise remains one of Bank of Hawaii's most important structural advantages. Our leading market position, trusted brand, diversified customer base, and deep relationships across our markets provides a stable core funding base. These advantages allow us to manage pricing thoughtfully while continuing to meet our customers' needs. Based on our performance through the first half of the year and our current interest rate assumptions, we continue to trend toward a net interest margin approaching 2.9% by year end. While the composition of margin opportunity has shifted somewhat in the current rate environment, we remain confident in the earnings trajectory of the balance sheet. Turning to lending, total loans increased $94 million during the quarter, representing annualized growth of approximately 2.6%. C&I and residential lending led the increase, while CRE growth was affected by payoff activity and the timing of deal closings. Residential mortgage growth benefited from the completion and closing of a large condominium project. Looking ahead, our commercial pipeline remains encouraging. On the consumer side, however, elevated interest rates and the absence of similar residential project closings are likely to moderate third quarter growth in consumer. We continue to expect full year loan growth in the lower mid-single digit range. Credit quality continues to be strong, and Brad will provide some additional details shortly. We also made progress on the strategic priorities we discussed last quarter. In wealth management, we are strengthening coordination across commercial banking, the private bank, Bankoh Advisors, and our broader advisory capabilities. The Center for Family Business & Entrepreneurs, which opened in April, continues to develop its client pipeline around succession and estate planning, business valuation, merger and acquisitions, and other complex needs. Bank of Hawaii is uniquely positioned in our markets to bring together capabilities to help clients navigate these consequential financial and business decisions. Beyond these initiatives, our teams remain focused on disciplined execution, protecting our strong balance sheet, deepening customer relationships, investing in our people and technology, and supporting the communities we serve. Although the interest rate outlook continues to evolve, the fundamental strengths of Bank of Hawaii remain unchanged. A leading deposit franchise, a trusted brand, deep customer relationships, strong credit quality, and a conservatively positioned balance sheet. These strengths give us confidence in our ability to perform across a range of economic and interest rate environments. Turning to the economic outlook, Hawaii's economy remains resilient, supported by low unemployment, healthy visitor spending, strong construction activity, and military investment. The Department of Business, Economic Development & Tourism currently projects real economic growth of 1.6% in 2026. At the same time, we continue to monitor inflation, energy costs, consumer confidence, travel demand, and broader geopolitical and fiscal developments. With that said, I'll turn the call over to Brad Shairson to discuss credit. Brad Satenberg will then review our financial results in greater detail, after which we'll be pleased to take your questions. Brad Shairson: Thanks, Jim. I'll begin with an overview of our credit portfolio and conclude with asset quality metrics. As you will see, our performance has remained strong, consistent with prior quarters. Turning to our lending philosophy, the Bank of Hawaii is dedicated to serving our local communities, lending primarily within our core markets, where our expertise allows us to make informed and disciplined credit decisions. Our portfolio is built on long tenured relationships with approximately 60% of both our commercial and consumer clients having been with the bank for more than 10 years. Geographically, our loan book is concentrated in markets we know well. Approximately 94% of loans are based in Hawaii, with 4% in the Western Pacific and just 2% on the mainland, primarily supporting existing clients who operate both locally and on the mainland. Our loan portfolio remains well-balanced between consumer and commercial exposure. Consumer loans represent 56% of total loans, or approximately $8 billion. Within the consumer portfolio, 86% consists of residential mortgage and home equity loans, with a weighted average LTV of 49% and weighted average FICO score of 799. The remaining 14% of consumer loans are comprised of auto and personal lending. Credit quality in these segments also remains strong, with FICO scores of 729 for auto loans and 761 for personal loans. Turning to commercial lending, the portfolio totals $6.2 billion, representing 44% of total loans. 72% is secured by real estate with a weighted average LTV of 55%. This reflects our ongoing emphasis on collateral protection. CRE remains our largest component of the commercial book, totaling $4.3 billion, or 30% of total loans. In Oahu, the state's largest CRE market, a combination of consistently low vacancy rates and flat inventory levels continues to support a stable real estate market. Across industrial, office, retail, and multifamily property types, vacancy rates remain below or close to their tenure averages. Total office space on Oahu has declined by approximately 10% over the past decade, driven primarily by conversions to multifamily residential and lodging. This structural reduction in supply, combined with the return to office trend, has brought vacancy rates back down to the long-term average and well below national levels. Our CRE portfolio remains well-diversified, with no single property type exceeding nine percent of total loans. Conservative underwriting practices continue to be applied consistently with weighted average LTVs below 60% across all CRE categories. In addition, diversification within each segment remains strong, supported by modest average loan sizes. Scheduled maturities are also well-balanced, with more than 60% of CRE loans maturing in 2030 or later, reducing near-term refinancing risk. Looking at the distribution of LTVs, there isn't much tail risk in our CRE portfolio. Less than three percent of CRE loans have greater than an 80% LTV. C&I accounts for 12% of total loans, totaling $1.7 billion. This portfolio is diversified across industries characterized by modest average loan sizes, and there is very little leveraged lending. Turning to asset quality, overall credit performance remains strong and consistent with the trends we've seen over the past several quarters. Delinquencies, non-performing assets, and net charge-offs all remained at favorable levels during the quarter. Net charge-offs were just $3.4 million, or 10 basis points annualized, in line with the last several quarters, but up from the abnormally low three basis points last quarter that resulted from a large recovery. Non-performing assets declined one basis point to eight basis points, while delinquency levels increased one basis point to 41 basis points. The one notable change this quarter was an increase in the criticized asset ratio to 2.81% from 2.12%. That increase was driven by a single borrower relationship rather than broader weakness across the portfolio. The loans related to the borrower continue to perform, and the exposure is well secured by real estate. More broadly, 93% of our criticized assets are secured by real estate with a weighted average LTV of 58%. As an update on the allowance for credit losses on loans and leases, the ACL ended the quarter at $147 million, flat to the linked quarter. The ratio of our ACL to outstandings ends down one basis point to 1.03%. This concludes my remarks. I will now turn the call over to Brad Satenberg for a discussion on our financial performance. Brad Satenberg: Thanks, Brad. For the quarter, we reported net income of $63.8 million and a diluted EPS of $1.47, up $6.4 million and $0.17 per share from the linked quarter. As Jim mentioned, for the ninth consecutive quarter, both our NII and NIM expanded. Compared to the first quarter, NII increased $2.6 million and NIM improved four basis points to 2.78%. The expansion was primarily driven by our fixed asset repricing, partially offset by deposit mix shift, which accelerated for the first time in several quarters. Despite the increase this quarter, the broader trend remains positive. Over the past 12 months, the aggregate mix shift was only $17 million compared to $516 million during the same period a year ago. The yield on earning assets improved by five basis points during the quarter, which benefited from a $2.8 million contribution to our NII from the fixed asset repricing. Assuming that interest rates remain stable, I expect that the yield on our earning assets will continue to improve at a similar pace for the remainder of the year. The cost of interest-bearing liabilities increased by one basis point during the quarter, consistent with the rise in deposit costs. Deposit costs were 1.27%. The deposit beta declined slightly to 35.5%. As interest rate expectations have shifted, deposit pricing has become more competitive than earlier in the year, contributing to the higher deposit mix shift along with the modest increase in deposit costs this quarter. In the current rate environment, I expect our cost of deposits to settle in the range of 1.25%-1.3% in the near term. I also expect public deposits to decline in the third quarter as we strategically allow certain higher cost funds to run off. I'm forecasting that any interest rate hikes would initially benefit NII and NIM but would ultimately become a modest headwind once our deposits fully reprice. The velocity of the impact from any change in rates will depend on the timing of deposit pricing adjustments and the terminal beta reached. I expect the deposit beta of any potential rate hikes to ultimately land at approximately 34%, which would mirror our beta from the last rate hike cycle. Regardless of any potential rate changes, I believe that we are well positioned to remain balanced from an interest rate sensitivity perspective. At quarter end, our fix-to-float ratio was 58%, down one percentage point from the prior quarter. We finished the quarter with an active pay fixed receive float swap portfolio of $1.4 billion, with a weighted average fixed rate of 3.3% and an average life of 1.4 years. $1 billion of these swaps hedge our loan portfolio, while $400 million hedge our securities. In addition, we have $200 million of forward-starting swaps with a weighted average fixed rate of 3% and an average life of 2.1 years. These swaps will become effective during the third quarter. Non-interest income was $43.3 million during the quarter, compared to $41.3 million during the linked quarter. This quarter included a $400,000 charge related to our BCP conversion ratio change, while the first quarter included a similar $200,000 charge. Adjusting for these normalizing items, non-interest income was up $2.2 million. This improvement was primarily due to the strength of our wealth management division, which benefited from a strong market, as well as increased customer demand for annuity investments and other advisory-related fees. My forecast for the third quarter is that normalized non-interest income will be approximately $43 million. Non-interest expense was $111.2 million, compared to $116.1 million during the linked quarter. As a reminder, the first quarter included a seasonal payroll tax and benefits charge of $2.8 million, as well as non-recurring charges related to the accelerated vesting of restricted stock awards of $3.5 million and an unrelated severance charge of $750,000. This quarter includes our annual merit increases of approximately $1.2 million and a $500,000 benefit in connection with the net forfeiture of unvested restricted stock. Excluding the impact of these items, expenses were up slightly compared to the first quarter. Third quarter normalized non-interest expense is expected to be approximately $112.5 million. During the quarter, we also recorded a provision for credit losses of $3.6 million, resulting in a coverage ratio of 1.03%. In addition, we reported a provision for taxes of $18.3 million during the quarter, resulting in an effective tax rate of 22.3%. The drop in the tax rate compared to the linked quarter was primarily due to higher benefits from certain tax-advantaged investments. Our capital ratios remained above the well-capitalized regulatory capital thresholds during the quarter, with Tier 1 capital and total risk-based capital of 14.5% and 15.5%, respectively. Consistent with the linked quarter, we paid dividends of $28 million on our common stock and $5.3 million on our preferreds. During the second quarter, we repurchased $17 million of common shares at an average price of approximately $78 per share. I am currently planning to purchase an additional $20 million of stock during the third quarter, and $89 million remains available under the current repurchase plan. Finally, the board declared a dividend of $0.70 per common share that will be paid during the third quarter. Now I'll turn the call back over to Jim. Jim Polk: Thanks, Brad. We'd now be happy to answer any questions that you might have. Operator: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jeff Rulis with D.A. Davidson. Your line is now open. Jeff Rulis: Thanks. Good morning. Jim Polk: Hey, good morning, Jeff. Jeff Rulis: Jim, you alluded to in your initial remarks on the wealth management momentum. Brad kind of followed with the pieces of that strength. Pretty solid for trust in asset management. What kind of growth do you see the rest of the year, I guess, if you strip out, I guess, the strong market is a variable. Just wanted to see the outlook for that line item as you see it. Jim Polk: Yeah. It's always hard to judge these things with market conditions, but we feel really good about where we're at. Obviously, we've talked on several calls now just about the investments we've made in both Bankoh Advisors as well as the overall wealth platform. I would say that if you looked at the performance in Q3 on the wealth management side, the increase in fees was driven probably half by market and half by production. We had some trust and testamentary fees that came in as well. I would see that as sustainable without market change going forward. On the Bankoh Advisor side, I think you're really beginning to see sort of the partnership with Cetera, the greater efficiency that we've incorporated into the business, additional products that we've availed through the segment, the advisors that we're adding to the team just helping to drive overall sales. Jeff Rulis: Appreciate it. One other one I had is just to check in on that margin you mentioned of the high 2% or approaching 2.9% by year-end. It sounded like the composition of how you get there shifted a little bit and just, I guess if you couch this quarter's sequential increase in how you get there, if you could just provide a little more color through the back half of how you get there, that would be helpful. Jim Polk: Sure. Maybe I'll have Brad answer that question. Brad Satenberg: Thanks, Jeff. That's a good question. Our NIM for the quarter was 278. June was at 279. Now we're forecasting one rate hike this year. Mid-September is what we have in our forecast. All the components are still in place for the NIM to continue to grind higher. We've got the fixed asset repricing, which we feel real good about, and the mix shift has moderated, even though we took a step back this quarter. Really, if you look at over the longer term trend, it's been positive. With the rate hike and with the mix shift and with the fixed asset repricing, I think we get to 290 by the end of the year. That's, I think we're looking at five basis points in NIM per quarter going forward. Jim Polk: Brad, just to clarify, that's a true exit, not the quarterly average in Q4. Brad Satenberg: My expectation is December would be just about 290. Jeff Rulis: Sounds good. Thank you. Step back. Jim Polk: Thanks, Jeff. Operator: Our next question comes from the line of Matthew Clark with Piper Sandler. Your line is now open. Matthew Clark: Hey, good morning, everyone. Jim Polk: Good morning. Matthew Clark: Maybe just a little more on the margin. If you had the spot rate on deposits at the end of June and how you're Jim Polk: Yes. Matthew Clark: I was just, as a follow-on to that, just whether or not you're having to make any tweaks on exception pricing here, any upward pressure there, or any changes to your promotional rates. Brad Satenberg: All right. Just to answer your first question, Matt, the spot rate was 126, so it was down one basis point from what our cost was for the quarter. As far as exception pricing, obviously, I think competition has increased slightly, and I think there are some additional requests for some exception pricing, but it hasn't been material or significant. We are looking at opportunities to grow deposits, and with that comes some additional pricing on our CDs. We do think we're going to be pushing CD rates up slightly in the three and 12-month categories. Nothing material, but we do see that moving up. Matthew Clark: Okay. Just on the securities portfolio down this quarter, should we continue to assume that shrinks, or are you going to start reinvesting there? Brad Satenberg: I wouldn't assume it's going to shrink. I think this quarter, between the loan growth that we experienced as well as we had some deposit runoff, so we used the excess cash flows from the investment portfolio to support those two. We did take a step back in our investments, and I think we'll just continue to reinvest at a pace, and it will really be dictated by what we see from the loan growth standpoint. Matthew Clark: Got it. Thank you. Operator: Thank you. Our next question comes from the line of Jared Shaw with Barclays. Your line is now open. Jim Polk: Hey, Jared. Good morning. Jared Shaw: Hi. Thank you. Good morning. Yeah, I guess sticking with the deposits, was there anything unique about the DDA trends this quarter, maybe apart from some of the public funds? How are you thinking about sort of DDA as a component of growth going forward? Jim Polk: Yeah. I think the way I would characterize it is obviously the quarter was down, but if you look over the last several quarters, we've grown consistently. I just went back five quarters. We've had really nice growth going back to the beginning of 2025, and we had particularly strong growth in Q4 and in Q1 of 2026. I really look at, particularly on the NIBD side, as just sort of the normal ebbs and flows and the seasonality of Q2. There were some project-related funds that built up related to some of the condo stuff that moved out. We're confident that the long-term sort of trend and sustainability of growth in the space still remains. Jared Shaw: Okay. All right. Thanks. Then, on the buyback, thanks for the update on the $20 million expected for the third quarter. Is that $20 million a quarter given capital and growth dynamics, and is that a good level to sort of assume for the next few quarters beyond the third quarter? Brad Satenberg: This is Brad. I would say, obviously, $20 million for the third quarter. I would expect $20 million for the fourth quarter as our forecast and our expectation, and then we're going to reevaluate it going into 2027. Jared Shaw: Thank you. Operator: Thank you. Our next question comes from the line of Andrew Terrell with Stephens. Your line is now open. Andrew Terrell: Hey, good morning. Jim Polk: Good morning. Andrew Terrell: Hey, if I could go back to just the loan growth quickly. I think you mentioned in the prepared remarks kind of the low-mid single-digit kind of goalpost was still where you were looking for kind of full year loan growth. I heard some of the comments around just maybe some tougher consumer in the third quarter. I am hoping you could just talk to maybe how the pipeline's building up overall, specifically on the commercial side. What gives you confidence in growth fit? I think the guide implies stable to maybe improving growth in the back half of the year. Jim Polk: Yeah. On the residential side or on the consumer side, overall production was quite strong relative to our recent history. A component of that, maybe 25% of the total production, was related to a condominium project that closed out this quarter. That gave us some extra juice on the residential side to maybe drive some, I'll use the term outsized performance, at least relative to our recent history. Without any projects in the near horizon, we'll kind of go down to a more organic level of growth in residential. It'll still be positive, but it's not going to be nearly the level it was for Q2. We continue to see challenges in indirect and home equity, just given the rate environment and sort of the realities of cost of cars and financing of cars and so forth. It'll be positive for the quarter, and it'll contribute to sort of the guide that I've already provided. The commercial side's looking pretty good. We really started to see the pipeline build out in the beginning part of the year. Q1 was a solid quarter. Q2, we were expecting a little bit better performance, but we had some deals move out to the third quarter. We've seen those close already, the pipeline remains pretty good from my standpoint. Healthy. I feel pretty good about commercial growth, and I think the combination of what we see on the commercial side as well as consumer will keep us in that low-mid single-digit range. Andrew Terrell: Okay, great. Just one on the margin, just to confirm the expectation for 290 exit rate of the year. That does include the assumption for the September rate hike of 25 basis points in there. I was hoping you could talk to, we heard some around the competitive dynamics on the deposit side, just competition for new loans today and your comfortability with, I think your kind of blended reinvestment yield for the fixed and adjustable cash flows was still 160 basis points this quarter, same as last quarter. Your comfortability with that remaining relatively stable moving forward. Jim Polk: There was a lot in there. Can you repeat that again just to make sure we're answering your question correctly? Andrew Terrell: Yeah, I'm sorry. Jim Polk: No, that's okay. Andrew Terrell: Does your guide include the 290 exit margin include the 25 basis point September hike? Brad Satenberg: That's correct. Yeah. We're expecting mid-September to have one hike, 25 basis points. Andrew Terrell: Okay. Competition for new loans today. Do you feel like there's any risk to that incremental spread on page 20 of the deck, 160 basis point pickup for the maturity and adjustable cash flow reinvestment?Do you feel like there's any risk of spread compression there? Jim Polk: No, I don't see that at this point. Spreads have been pretty stable for a while on the loan side. As we've said in previous quarters, there's always a one-off, but the market remains pretty rational. Andrew Terrell: Okay. Thank you. Operator: Thank you. Our next question comes from the line of Andrew Liesch with StoneX Group. Your line is now open. Andrew Liesch: Hey, everyone. Good morning. Jim Polk: Hey, good morning, Andrew. Andrew Liesch: Just want to see, just kind of looking at the size of the average earning asset base here going forward. Have you seen deposits come back in seasonally this quarter? It also sounds like you're going to have some other public funds outflows. I guess, how should we be thinking about where earning assets shake out? Brad Satenberg: I'll start and then Jim can chime in. This is Brad. Yeah, our average earning assets definitely took a step down from previous quarters. I expect it to come in probably in the range of $100 million-$200 million this quarter. Relatively consistent where we ended this past quarter. Andrew Liesch: Got it. All right. That's helpful. Jim Polk: Then just on the Andrew Liesch: Yeah, go ahead, sorry. Jim Polk: I was just going to add, I think one of the things that we see out there, particularly in the deposit space, is sort of the higher cost public deposits. We're going to take a pretty strategic approach on how we look at those things, and that could have an impact on the ultimate earning asset base. Andrew Liesch: Got it. Makes sense. Okay. Just on the fee income, did I hear correctly, like $43 million for the third quarter? Brad Satenberg: That's correct. Andrew Liesch: Okay. If I take the $43.3 this last quarter, if I back out the securities loss there, you're kind of close to $44.3 million, I mean, or $44 million. I guess, what's going to cause the step down here, especially given the good commentary on the wealth side? Brad Satenberg: Well, it's really not a step down. If you think about those securities losses, really what those are are the Visa conversion ratio. Right. Yes. Those are consistent quarter to quarter. The $43 million is really just consistent to where we finished the second quarter. It's really a step up from the first quarter and sort of remaining relatively flat from the second quarter. Andrew Liesch: Okay. Got it. That's a good way to think about it. Thanks so much. I'll step back. Brad Satenberg: Thank you. Operator: Thank you. As a reminder, to ask a question at this time, please press star one one on your touchtone telephone. Our next question comes from the line of Kelly Motta with KBW. Your line is now open. Kelly Motta: Hi. Thank you so much for the question. It seems like based on Q2 results as well as your expense guide of $112.5 million in Q3, that you're running below or at least at the lower end of the 2.5%-3% expense guide range you had previously given. Can you provide any color or context as to the drivers of that?If there's any updated color on how you see expenses coming in for the year. Thanks. Brad Satenberg: Yeah. I think the 2.5%-3% is still consistent. The way I look at it is our normalized non-interest expense going into the year was $435 million. We're just adjusting for normalizing items. At 3%, it should come in about $448 million for this year. I'm thinking on average, quarter by quarter, it's about $112 million. The first two quarters we came in slightly below that. I'm expecting the third and fourth quarter to come in in that $112.5 range, which would land us at the end of the year right about 3% from that normalized level I was just referencing. Kelly Motta: Got it. Okay. That's helpful. With the government deposits being strategic there, can you quantify how large that is in your deposit base? What within that-- Because I'm sure there's some operating accounts. What within that is the target for strategic reduction? Brad Satenberg: Our public deposits are about $2 billion of our total deposit base. My expectation is this quarter for us, as far as running off public deposits, about 10%-15% of those should run off, and those would be high-cost deposits. When I say high cost, I'm thinking somewhere in the range of 3.5%-4%. Kelly Motta: Okay. Got it. That's helpful. Just if I could ask one more. When we step back and think about the margin longer term, I think you've reiterated that 2.90% by year-end, which now includes the rate hike, which I understand is beneficial near term, but maybe more neutral longer term. As we think about that 3.25%-3.50% normalized margin, any twists or takes in terms of the timeline of getting there? Is that still kind of how we're thinking about it in kind of this change rate environment, or are there any other considerations to note?Thanks. Brad Satenberg: The way I look at it is we're still on that trajectory depending on what happens in interest rates. There's a lot of variability. This is still a couple of years down the road as we've talked about, but I don't see anything sort of at this point in time that would cause us to deviate materially from that. Kelly Motta: Got it. Thank you. Operator: Thank you. I'm currently showing no further questions at this time. I'd now like to hand the call back over to Patricia Lam for closing remarks. Patricia Lam: 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 us if you have any additional questions. Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.