Earnings Call Transcript - BOH Q1 2022

Operator, Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Bank of Hawaii Corporation First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session after the prepared remarks. I would now like to turn the call over to your host, Janelle Higa. You may begin.

Janelle Higa, Host

Thank you, Kevin, and good morning, good afternoon, everyone. Thank you for joining us today. On the call with me this morning is our Chairman, President and CEO, Peter Ho; our Chief Financial Officer, Dean Shigemura; and our Chief Risk Officer, Mary Sellers. 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, we'll be referencing a slide presentation as well as our earnings release. A copy of the presentation and release are available on our website, boh.com, under Investor Relations. And now, I'd like to turn the call over to Peter Ho.

Peter Ho, CEO

Thanks, Janelle. Hello, everyone. We appreciate your interest in Bank of Hawaii. The first quarter was a good start to 2022 for the organization. As is our custom, I'll share with you some thoughts on the broader market here in the islands. I'll then turn the call over to Dean to talk about the financials and then we'll turn the call over to Mary to give you some perspective on the credit side, and then I'll close with some concluding thoughts, and then we'd be happy to take your questions. So beginning with the economy, things appear to be shaping up, stable and improving is what I would call it. Here, you see our unemployment numbers, unemployment now down to 4.1%. I think when you look at the forecast numbers out that UHERO has put in there, obviously, I think those are due for adjustment, and I think probably impacted by some of the changes of the Bureau of Labor Statistics. So, all in all, I think a pretty good performance unemployment-wise. When you look at some of the high-frequency data that the university also puts out what they call their economic pulse, which is an aggregation of a bunch of high-frequency data, you'll see that really that rating is up to its highest level ever in the new environment that we find ourselves in. So as of the past couple of weeks, that rating hit 81 points to give you some frame of reference, our prior peak was 75 in the summer of 2020 just before Delta hit. And then those numbers took a dip with Delta and then Omicron now. So it's nice to be back up at a high and hopefully moving forward from there. Switching to real estate. Here, you see that the real estate market, at least here on Oahu, our primary market, continues to do quite well. So price points are still elevated at very high levels, both single-family as well as condominium. And also, you see that the pervasive shortage of inventory continues to be the case and I'm not likely to see much change in that environment anytime soon, therefore, I wouldn't expect to see too much erosion in price points, certainly not in '22. Next slide, switching over to the visitor side, this is really an evolving story. You see in the chart that 2022 levels are getting closer to 2019 levels of pre-pandemic levels. The numbers are from an arrival standpoint down, still 25% from 2019. But that's really the tale of two marketplaces. U.S. arrivals, both East and West U.S. arrivals, are up year-to-date 8% from 2019, but clearly the drag dragging down the entire market are the Japanese down 98%, Canada down 61%, and other international marketplaces down 70%. Interestingly, when we look at spending patterns, the news isn't quite as bad there. Spending is down. And remember, I told you arrivals were down 25%, but spending is only down 9.9% this year-to-date through February. And this reflects a very robust U.S. consumer. So U.S. spending, our U.S. market spending in the islands year-to-date February is up 27% and offset somewhat by Japan, Canada, and other international. Just to finish off on the visitor side, RevPAR performance, which, as you can imagine, has been quite difficult through the pandemic, is really starting to look up. So, the last three months beginning in December, RevPAR in the state was actually plus 7.6% versus 2019 levels. January was off slightly at minus 1.3% versus 2019, and February bounced back nicely to plus 4% versus 2019. So all in all, what we see in the visitor segment is a reasonable performance given what's happening in the various marketplaces like a good amount for optimism as we look forward and hopefully welcome the Japanese visitors back hopefully towards the tail end of this year. So that's it for my opening. And let me now turn the call over to Dean to share the financials. Dean?

Dean Shigemura, CFO

Thank you, Peter. Our strong core loan growth continued in the first quarter. Core loans net of PPP waivers increased by $354 million or 2.9% linked quarter and by $1.1 billion year-over-year or 9.4%. Growth was across both commercial and consumer loan portfolios at 2.5% and 3.2%, respectively, linked quarter. PPP loan balances declined by $69 million, and $58 million remained at the end of the quarter. Net interest income in the first quarter was $125.3 million, and included $1.8 million from PPP loans. The fourth quarter net interest income included a one-time reduction of $900,000 for an adjustment to deferred mortgage loan fees and $5.7 million in PPP loan interest income. Adjusting for the one-time charge in the fourth quarter and total PPP loan interest income in both quarters, the first quarter's core net interest income was $123.4 million, up $1.9 million or 1.6% linked quarter, driven by strong loan growth and rising interest rates. Our core net interest margin, which excludes PPP loan interest income, increased by 7 basis points linked quarter to 2.31%. Our loan-to-deposit ratio remains low, well below regional and local peers. This affords us a strong and stable base of low-cost deposits that is a readily available source of liquidity to fund loan growth and provides pricing flexibility. One of the driving factors of this strong deposit base is Hawaii's unique deposit market and our strong position within this market. According to the FDIC deposit study data, the top five banks make up nearly 97% of deposits in the state of Hawaii. Bank of Hawaii is well positioned as the market share leader with exceptional brand recognition and customer relationships. The composition of our deposits further demonstrates the strength of our deposit franchise. 94% of deposits are from core commercial and consumer customers and the remaining 6% in public deposits are predominantly government operating accounts. While analyzing our deposit products, 96% of our deposits are in core savings and checking accounts, with checking balances comprising nearly 60% of total deposits. Our solid base of low-cost deposits provides us with flexibility in a rising rate environment. Total deposit balances increased $356 million or 1.7% linked quarter, and $392 million in core commercial and consumer customer accounts, while our deposit costs decreased by 1 basis point to 5 basis points in the quarter. During the last rising rate period, we demonstrated pricing discipline at approximately 20% beta while continuing to grow deposit balances. Our balance sheet remains asset sensitive to changes in interest rates, and we will continue to benefit from higher rates. The recent increases in medium- and long-term rates are already having a positive impact on our core net interest income and margin. In the first quarter of 2022, net income was $54.8 million, and earnings per common share were $1.32. Net interest income in the first quarter was $125.3 million. As discussed earlier, current net interest income, which excludes PPP loan interest income was $123.4 million, up $1.9 million linked quarter, driven by strong core loan growth and rising interest rates. As Mary will discuss later, we recorded a negative provision for credit losses of $5.5 million this quarter. Non-interest income totaled $43.6 million in the first quarter, up $1 million from the fourth quarter. The increase was primarily due to higher swap revenue and deposit fees, partially offset by seasonal decreases in service charges and other transaction fees. Also included in the first quarter's non-interest income was a one-time negative adjustment of $400,000 for a change in the Visa Class B conversion ratio, which was reported as a contra revenue item in the investment securities gains and losses. In addition, we recognized a $1.8 million recovery or MSR impairment in the mortgage banking income, which afforded us the flexibility to hold more mortgage loans. We expect non-interest income will be approximately $42 million to $43 million per quarter through the end of the year as mortgage banking income and asset management fees are expected to be lower due to higher interest rates and lower markets. Non-interest expense in the first quarter totaled $103.9 million, up from $101.7 million in the fourth quarter. Included in the first quarter's expenses were seasonal payroll tax and benefit expenses of $3.7 million related to annual incentive payouts made during the quarter. Included in the fourth quarter's expenses was a one-time $1.2 million charge for an additional employee benefit that increased our vacation carryover limits. Adjusting for these items, the first quarter's expenses were $100.2 million, down $300,000 from the normalized fourth quarter expenses of $100.5 million. Thus, in the first quarter, we were able to maintain our overall expense discipline while continuing with our innovation investments. For the full year of 2022, expenses will be approximately $414 million to $415 million, as inflation pressures have increased overall expenses. The annual merit increases and one-time cost of living adjustment, which together totaled the 5% increase for employees began on April 1. Our return on assets during the first quarter was 0.97%. The return on common equity was 15.44%, and our efficiency ratio was 61.53%. Our net interest margin in the first quarter was 2.34%, unchanged from the fourth quarter. Excluding total PPP loan interest income, the core margin was 2.31%, an increase of 7 basis points linked quarter. The increase in the margins in the first quarter reflects the ongoing impact of strong core loan growth and rising rates. Excluding the impact of PPP loan interest income, we expect continued improvement in our core margin, with increases of 5 to 6 basis points per quarter for the remainder of 2022 from continued loan growth and higher interest rates. This is an improvement from the previous NIM guidance of 3 to 5 basis points per quarter. Our capital level remains strong and is well positioned to support continued growth. Our CET1 and total capital ratios were 11.83% and 14.41%, respectively, with a healthy excess above the regulatory minimum well-capitalized requirements. Higher interest rates negatively impacted the valuation of our available-for-sale portfolio, resulting in an AOCI adjustment and a reduction in our book and tangible common equity. However, this had no impact on our regulatory capital and our capital distribution capabilities. During the first quarter, we paid out $28 million or 53% of net income available to common shareholders in dividends and $2 million in preferred stock dividends. We repurchased 117,000 shares of common stock for a total of $10 million. And finally, our Board declared a dividend of $0.70 per common share for the second quarter of 2022. Now, I'll turn the call over to Mary.

Mary Sellers, CRO

Thank you, Dean. Credit performance remained very strong in the first quarter. Net loan and lease charge-offs were $1.5 million or 5 basis points of average loans and leases annualized. This compared with 2 basis points in the fourth quarter of '21 and 10 basis points in the first quarter of last year. Non-performing assets totaled $20 million or 16 basis points, up 1 basis point for both the linked period and year-over-year. All non-performing assets are secured with real estate with a weighted average loan-to-value of 54%. Loans delinquent 30 days or more remained stable at $28.3 million or 23 basis points while down $11.6 million or 10 basis points year-over-year. Criticized exposure was down to just 1.6% of total loans, driven by continued improvement in the financial performance of those customers who had been most impacted by COVID. The quality of our loan production in the first quarter was strong and reflective of our continued conservative and consistent approach to underwriting. For the quarter, 62% of commercial production was secured with quality real estate moderately leveraged. Our commercial mortgage production had a weighted average loan-to-value of 60%, and construction production had a weighted average loan-to-value of 65%. 83% of the quarter's consumer production was secured with real estate, again, conservatively leveraged. Residential mortgage and home equity production had weighted average loan-to-values and combined weight average loan-to-values of 62% and 58%, respectively. 79% of home equity production was in first lien. FICO scores for all our consumer production remained very strong and consistent. Importantly, when we look at the bottom quartile of our loan production, we continue to see solid credit metrics. As Dean noted, we recorded a negative provision for credit losses of $5.5 million this quarter. This included a negative provision to the allowance for credit losses of $4.3 million, which was net charge-offs, reduced our allowance to $152 million or 1.21% of total loans and leases or 1.22% net of PPP balances. The decrease in the allowance reflects the improving economic outlook and forecast for our market, coupled with our credit risk profile, while continuing to provide for the uncertainty and potential downside risk associated with recent geopolitical events and tighter monetary policy. The reserve unfunded credit commitments was $5.2 million at the end of the quarter, down $800,000 for the linked period. I'll now turn the call back to Peter.

Peter Ho, CEO

Thanks, Mary. To conclude, just a few thoughts on where we see ourselves moving forward. We believe we are extremely well positioned for what we see as an evolving environment. We're asset sensitive. As Dean mentioned, we operate in an interesting deposit marketplace where the top five locally headquartered players represent 97% of the market. I think equally interesting of that five is that the weighted average loan-to-deposit ratio of those participants is 61%. Bank of Hawaii has a terrific position within this marketplace. From a credit standpoint, we're, as Mary described, in very good position as well. We have a high-quality securities portfolio, and our loan portfolio is well diversified, well balanced and has a 79% collateral position with a weighted average loan-to-value of 56%. 97% of our loans are in markets we've known for decades. Our current strategy ensures continued familiarity. Finally, from a liquidity standpoint, as Dean mentioned, our deposit base is incredibly core in nature with 94% consumer and commercial and 96% being either demand or savings. As Dean also mentioned, we have historically market-leading deposit betas, which we would anticipate deploying through the cycle. Our operating model generates some of the highest returns of capital in the industry. So now, we're happy to take your questions.

Operator, Operator

Our first question comes from Jeff Rulis with D.A. Davidson.

Jeff Rulis, Analyst

Just a question on the buyback. Just want to check in on the appetite. It was up linked quarter, but it's been higher in the past; just interested in AOCI consideration or just general macro, kind of give us an update on where you think on buybacks?

Dean Shigemura, CFO

Yes, it is up about $3 million quarter-over-quarter. We continue to implement our capital plan, which generally will fulfill capital for growth and then our dividend. And of course, what's remaining is the available for share repurchases. We continue to believe that's an important part of our capital plan. And going forward, I think it will depend on how the environment evolves given the volatility in the rate environment. We'll continue to repurchase shares, but it could change depending on the outlook.

Peter Ho, CEO

Yes. So, I think our intent is to continue with repurchase probably similar to what you've seen in the most recent quarter. But obviously subject, Jeff, to what's happening in the rate environment, you would understand.

Jeff Rulis, Analyst

Sure. Yes. And Peter, you mentioned it looks like the UHERO forecasts are kind of lagging real-time and maybe a question for Mary just on that. Does the first quarter provision recapture sort of baked in as of March end? In other words, if we've seen some economic improvement, can we kind of assume that, that would be reflected in the second quarter provisioning consideration in other words?

Mary Sellers, CRO

Exactly, yes. Exactly.

Jeff Rulis, Analyst

Okay. Got it. And one last question, Peter, I want to revisit the behavior of the islands during the last interest rate increase cycle. You mentioned the distinct characteristics of local participants regarding deposits. I suspect that during the last increase cycle, deposit betas were lower. Could you explain how both loan and deposit pricing unfolded in that last cycle?

Peter Ho, CEO

The deposit situation was quite stable. We experienced about a 20% deposit beta, which was not the best in the marketplace. There is a decent level of stability in deposits, partly due to the ongoing mismatch between funding and assets in the islands. This explains the betas we see. Looking ahead, the liquidity conditions in the marketplace are similar to the previous cycle, so I do not expect significant changes in deposits. In terms of loans, the environment has always favored funding over assets, and competition will remain robust. With rising rates, it will be interesting to see how lenders position themselves, as the yield side has largely been driven by volume over the last 5 to 10 years. However, as margins improve, there might be a shift towards focusing on rates rather than volume. We will have to wait and see.

Operator, Operator

Our next question comes from Andrew Liesch with Piper Sandler.

Andrew Liesch, Analyst

Questions about the strong loan growth persist, and it seems you have retained more on the mortgage side, which may have contributed to this. Can you share what you believe is happening in your market or with your bankers and lenders that is driving this trend, especially considering how strong it has been for several quarters?

Peter Ho, CEO

Yes, we experienced growth in nearly every category, with the exception of C&I which remained relatively stable. CRE increased by 3.4% and construction rose by 12.7%. This growth in the commercial sector seems to reflect a recovering economy and heightened activity, as businesses are generally in a stronger financial position post-pandemic. Our long-standing team continuity has ensured that we have quality staff in the marketplace, effectively serving our clients. Additionally, having staff who have maintained relationships with the same clients for years makes us well-positioned to seize new opportunities as they arise. On the consumer front, we have likely retained more residential mortgage production, although the fees were less attractive than in previous quarters. Overall, residential loans and home equity lines have seen increases, along with indirect lending, despite inventory challenges. Our success can be attributed to effective programming, strong performance in our marketing efforts, and progress in diversifying our channels, particularly with our SimpliFi online platform. This combination of factors has contributed to our positive results, Andrew.

Andrew Liesch, Analyst

That's great color. And then how are pipelines shaping up so far this quarter? I know it's still early, but how are things trending now?

Peter Ho, CEO

Yes. I mean we have a monthly pipeline meeting with the entire consumer and commercial team. It's always much anticipated. And I'd say Q2 looks pretty good. Again, I mean, you never know. I mean, it's a pretty volatile geopolitical environment we find ourselves in. But for now, we're feeling pretty good about growth. I don't know if we're going to get 2.9% core because that's getting pretty frothy. But I think solid loan growth is definitely built into the pipeline as it stands right now.

Operator, Operator

Next question comes from Ebrahim Poonawala with Bank of America.

Ebrahim Poonawala, Analyst

I guess maybe one first on expenses. I think Dean mentioned full year $414 million or $415 million, that's about 6% to 7% up year-over-year. Just talk to us, Peter, as we look forward beyond this year, around the puts and takes, I mean, it feels like inflationary pressure will be higher relative to what we saw post-financial crisis that's going to have some upward push to the expenses. Give us a sense of where you're investing, where the bank is at from an investment spend perspective and areas of incremental cost savings to offset growth?

Peter Ho, CEO

Yes. So yes, that's really the question these days, isn't it? Maybe take a slightly higher lens view of the situation. In the last five years, if you look at our expense trend, our investment expenditures have grown by about 11%, just over 11% annually. So, obviously, a big investment in categories like technology, data analytics, marketing or e-commerce and those types of things. The overall growth of expenses in the Company has been 3%. And so kind of those non-strategic areas, those areas other than what we deem to be investment in strategic have grown at a 0.9% clip. So, we've been able to accommodate the investments that we think we need to do. Clearly, the world is changing, and consumers are changing. And who's paying for that is, in fact, kind of every other expenditure. So as we move forward, the challenge is, we do see a more inflationary environment. Obviously, I don't think we can keep other expenses kind of at the rest of the Company at 1%, call it, that's got to go up. But I think what will happen, Ebrahim, is clearly that 11% was not an intended sustainable CAGR. I mean that number is going to come down meaningfully. And so, I think what we're going to land at is kind of a 4%-ish kind of annual growth rate. That, as you know, for Bank of Hawaii is a little bit on the high end. But I think we're just in a different inflationary environment than we have been previously. And there's still some investment spend to be made, but I'll tell you, a good portion of that is already built into our expense bloodstream. A lot of the kind of pre-work to get these platforms, whether it's marketing or e-commerce going, takes a lot of upfront expense.

Ebrahim Poonawala, Analyst

Got it. So like a four percentage core expense growth is the right way to think about that? So that was helpful, thanks, Peter. I believe you mentioned, Dean, that we can expect about 5 to 6 basis points per quarter for the remainder of the year. You also provided some insights into deposit dynamics. Regarding deposits, given that some of the non-core competitors may become more aggressive with their pricing, do you anticipate any portion of your deposit balances potentially leaving the bank, particularly those that might be more rate sensitive? This could mean moving to money markets or funds that offer higher rates.

Dean Shigemura, CFO

That's certainly a possibility and something that we continue to evaluate. However, as we manage our deposit base and consider alternatives, we have a substantial trust area that can assist us. Our goal is to maintain our customer base and deposit balances.

Ebrahim Poonawala, Analyst

Got it. And just one last question. When we look at the tangible, the TCE to TA ratio, I think you mentioned you're still going to do some modest buyback similar to 1Q levels. And I realized the EOCA impact is transitory. But when we look at the TCE at 5.4, does that have any impact in terms of influencing capital management? Or do you look past AOCI as near-term noise?

Dean Shigemura, CFO

It's certainly something that we pay attention to. It's not maybe the highest ratio that we look at. We look at primarily the regulatory capital ratios. And from that perspective, the AOCI doesn't impact that. So that's kind of what we look at. If there's a significant change, there could be some different actions. But right now, it's certainly just the regulatory capital ratios that are top of mind.

Operator, Operator

Next question comes from Kelly Motta with KBW.

Kelly Motta, Analyst

The first is just on your new core NIM guidance of 5 to 6 basis points a quarter. Just wanted a quick clarification if that was incorporating the forward curve or any rate assumptions going into that?

Dean Shigemura, CFO

It's not the entire curve. It's expecting rates to rise, but it's actually slightly lower than what the forward curves would currently predict. It anticipates about a 2.5% Fed funds rate and 2.85 on the 10-year.

Kelly Motta, Analyst

Great. Turning to loan growth, it was very strong overall. However, core C&I has decreased slightly. Could you provide an update on utilization rates and how they compare to historical levels, as well as your thoughts on when they might start to normalize?

Mary Sellers, CRO

They were 34% this quarter. That was down from 37% last quarter. They tend to range around probably 33 to 40 really just episodically as customers look to access liquidity.

Peter Ho, CEO

I don't believe that utilization rates indicate any risk to outstanding amounts. They are quite normal at this stage.

Operator, Operator

Our next question comes from Laurie Hunsicker with Compass Point.

Laurie Hunsicker, Analyst

I would like to revisit net interest income for a moment. I want to clarify regarding the PPP fees, as I noted there was $1.8 million this quarter, which leaves you with around $600,000. Is that correct, or is there a more accurate number?

Dean Shigemura, CFO

It's actually about $800 million remaining on the Company's...

Laurie Hunsicker, Analyst

Great. Okay. And you probably expect most of that to occur in the June quarter? Or how are you thinking about that?

Dean Shigemura, CFO

It's becoming less significant on our balance sheet and income statement. I estimate that about half of it will come off in the second quarter, and perhaps another half of what remains in the third quarter. We might see a few stragglers throughout the year, but it's decreased enough that it's not a meaningful component of our balance sheet.

Laurie Hunsicker, Analyst

Okay. Great. And then I think in Kelly and Ebrahim, you touched on this with their questions. But wondering if you could sort of help us think about it a little bit more succinctly in terms of your deposits are fabulous and they're low costing and they were. If we rewind back to 2019, I think your deposit betas will be fabulous as well. Can you just help us think a little bit about for every 25 basis points what that looks like? Maybe just drill it down a little bit more since your forward guide is looking less than the forward curve? Can you just help us think about it a little bit more because you are so asset-sensitive?

Dean Shigemura, CFO

Every 25 basis point increase in Federal funds results in approximately $900,000 per core, which translates to roughly $300,000 each month. This is only considering the short end of the curve. If the long end were to rise by 25 basis points, the impact is a bit more complex, but it amounts to around $40,000 per month, and it compounds due to the nature of longer-term assets as they are repriced.

Peter Ho, CEO

The other factor, Laurie, to think about too is, as rates were coming down, our bias was to invest a little bit longer in the securities portfolio. And now with kind of an inversion in that trend, we're probably going to be investing shorter and even maybe towards floaters in that environment. So, it's going to give us a lower initial yield, but hopefully, a higher yield down the path.

Laurie Hunsicker, Analyst

Okay. Great. That's helpful. And then with the non-interest income, I just wanted to understand two things. I think you had mentioned that included in your securities loss was a one-time negative adjustment for the Visa Class B conversion? Did I get that right, $400,000?

Dean Shigemura, CFO

Yes.

Laurie Hunsicker, Analyst

Okay. And can you just expand on that a little bit more?

Dean Shigemura, CFO

Yes. So when we sold our Visa Class B shares, we took back a swap on the conversion ratio. So Visa reset that ratio. And as part of the trades that we did, the reset cost to us was $400,000. So it's a one-time reset. And then going forward, we have that about $1.2 million per quarter.

Laurie Hunsicker, Analyst

Okay. Perfect. And then...

Dean Shigemura, CFO

That was why there's a bump in that line.

Laurie Hunsicker, Analyst

Right. It makes a lot of sense. Okay. And then can you also talk a little bit about within your non-interest income. If you could just remind us where you are on NSF fee and overdraft fees? And where you were specifically for this quarter? And how you're thinking about it? What your plans are to become a little bit more consumer-friendly and any impact that we would see on fee income?

Peter Ho, CEO

So what are the numbers for the quarter?

Dean Shigemura, CFO

Yes. For the quarter, in total, it's about $4 million, of which $3 million is overdraft fees and $1 million is NSF fees.

Peter Ho, CEO

Yes, that's a very current topic, Laurie. We're reviewing our practices. One thing to note is that we do not charge an account-level fee on our accounts, making them fee-free. This sets us apart from some of the larger banks and is something we're considering. We're evaluating both overdraft and NSF fees, particularly NSF, but nothing has been decided yet. Over the past few years, our practices have changed significantly to support our clients better, and we intend to keep growing in that direction. There is a lot of activity in this area right now, and we are aware of it.

Laurie Hunsicker, Analyst

Okay. That's helpful. Okay. And then last question. Mary, this one is for you. And I love your loan production quality side. I think it's great, and I appreciate all the credit detail. So, yes, your reserves to loans ex-PPP at 1.22, it looks like there's still a chunk of COVID question. Can you help us think about where that reserve to loan line may go in terms of us thinking about a normalized loan loss provision?

Mary Sellers, CRO

I would expect it to move back to where we were at day one pre-COVID, which was really at about 99 basis points in total coverage.

Operator, Operator

Our next question comes from Kelly Motta with KBW.

Kelly Motta, Analyst

I just wanted to ask, Dean, quickly on the tax rate is 23% still a good rate to use for the full year?

Dean Shigemura, CFO

Yes, 23% is still a good rate for the full year.

Operator, Operator

And I'm not showing any further questions at this time. I'd like to turn the call back over to our host for any closing remarks.

Janelle Higa, Host

I'd like to thank everyone for joining us today and for your continued interest in Bank of Hawaii. Please feel free to contact me if you have any additional questions or need further clarifications on any of the topics discussed today. Thank you so much, everyone.

Operator, Operator

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.