Q2 2020 First Hawaiian Inc Earnings Call
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Ladies and gentlemen, thank you for standby and welcome to the first Hawaiian second quarter 2020, <unk> earnings Conference call. At this time ALKS, it's that's going to listen only mode.
After the speakers presentation there'll be a question Mitch session to ask a question during the session you need to press Star then one and your telephone.
Please be advised that the call will be recorded.
If you acquired just know since then snippets darden's be willing to reach an operator.
You can call over to Kevin I see I'm. Please go ahead.
Thank you Michelle and thank you everyone for joining us as we review our financial results for the second quarter of Twentytwenty with me today are bought Harrison Chairman President and CEO.
Even though Seattle and rock music Chief risk Officer.
Prepare slide presentation that we will refer to in our remarks today.
The presentation is available for downloading and doing on our website at BCP Dot Com, India Investor Relations section.
During today's call will be making forward looking statements. So please refer to slide one for our safe Harbor statement.
We will also discuss certain non-GAAP measures. The appendix to this presentation contains reconciliations of these non-GAAP financial measurements to the most comparably direct directly comparable GAAP measurement.
And now I'll turn the call over to Bob.
Thank you Kevin Good morning, everyone. Thank you for joining us.
I'd like to start with updates of the current situation here in Hawaii, then we'll update you on deferrals credit provisioning before we go into our normal revealed the quarter.
The economy within Hawaii has reopened the quarantine requirement for it on travel was lifted in June and while our number of cases has risen following the reopening of the local economy, we're still doing a good job of controlling the spread of the virus.
The trailing four two day average of new cases is 26 as of yesterday.
With the reopening of the local economy unemployment fell to 13.9% in June down from over 23% in May.
However, the quarantine requirement for Trans Pacific travel has been extended into August 30 Onest.
During the quarter the bank leveraged off our digital investments to quickly respond.
Develop it online application for the PPP program.
This allowed us to approve 6000 loans for over a $940 million.
And as a time when many people are being very cautious about unnecessary contact we also launched our contact close debit and credit cards.
We've also begun reopened in our branches and bringing someone.
If you do not anticipate asking your question via the phone you can alternatively access the call audio via the webcast link provided in a press release or on the IR website, a conference coordinator will be with you momentarily. Thank you.
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Thank you for calling their name please.
Our same day, we did last name Brown.
He said David Brown.
Yes right.
And the copper joining today.
Personally away and.
Do you have the idea over the past the teleconference.
For for 960 Sixthree.
And your company name.
IRA A.I.E.R.A.
And I've seen elsewhere.
Over the next two quarters, we expect cash levels to decline as we pay down 200 million FHLB advances that mature in late July.
Reduce public time deposits.
While remaining PPP balances get used.
During the second quarter, we began deploying excess cash into the investment portfolio.
It will be accretive to interest income in the third quarter.
It's a little pressure the margin.
As there so we conservatively estimate at the margin will increase to the to 65% to 270% range in the third quarter barring any significant PBP forgiveness.
Turning to slide 13.
Noninterest income was $45.7 million $3.6 million lower than the prior quarter.
The reduction in noninterest income in Q2 was primarily driven by lower customer activity as a result of the cobot 19 restrictions.
Non interest expenses in Q2 or $91.5 million by $5 million lower than in the private previous quarter.
The lower noninterest expenses were primarily due to higher deferred loan costs related to the origination of triple P. loans and lower cards rewards expenses due to the lower card activity.
And now I'll turn it back to Bob.
Thank you Robert so wrap it up at the state level, we reopened the local competition and indications are that we're doing a good job controlling the virus, even as more people return into their everyday activities.
However, given the code situation on demand and the additional pushback going to reopen in the local economy the tourism.
There remains a fair amount of uncertainty when we'll be able to welcome back tourists.
Having said that what are you good job of controlling the virus has really makes us an attractive place to visit when that's available.
During this period of uncertainty will remain a source of strength for our customers our employees and the community.
With that we have to take any your questions.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press. The pound key please standby, we can probably Q and a roster.
Our first question comes from Ebrahim Poonawala of Bank of America Security. Your line is open.
Hey, good morning.
Good morning, everyone Abraham Oh, I guess I'd, just first saw Robbie I can tell me if I could follow up with you on your margin guidance up from 65% to 7% took quarter, Oh, I'm, sorry, if I missed it but.
Does that exclude everything PPP and is that kind of for base that you think remodulin becomes relatively defensible or Oh stabilizes index change.
I think be on third quarter, and maybe into went into the first half of next year understanding that you're guiding that out but I'm. Just wondering is margin stabilizing in that range is that sort of these limited to think about it.
We gave that guidance for Q3 that to 65 to test 70.
No.
Certainly we expect.
The NIM to recover but there are many headwinds along the way here.
We should be able to reduce cash levels over the course of one to two quarters and we have about 300 million and maturities on the public time side every quarter that will roll off we're going to be paying off 200 million in FHLB borrowings at the end of a month and we've also started to see cash levels decline as stimulus.
Deployed but there are headwinds we face.
We talked about the we could see additional deposit flows into accounts, we had a very strong deposit growth in the quarter can't forget that and as TPP loans get used we could see some of that come back to the balance sheet. So theres a lot of moving parts here for the future, but we expect NIM.
At least in Q3 to return to that to 65 to 270 range and just add to that even despite that we.
We haven't forecast in any of the forgiveness for PPP. We're just assuming it runs its course over the two year period, because it's just too hard to guess of what thats going to happen. It rather than estimated were just let it run for the two year period in our modeling.
Got it so thats helpful and just separately, Bob I guess, one oh.
And on the opening of tourism like talk to us in terms of what's baked into your reserving at the end of the quarter, but on the things any clue backdrop. How soon do you expect that well in your forecast and.
It does older distinction, let's say if it gets pushed out for another three months what does that mean, we ought dissolving in credit outlook. In this year does include the customers to kind of on live to this.
And then it's going to be sort of will be able to covers debt on the other site.
Yes, that's an excellent question.
Let me just started and then I'll hand, it over to route because I really ties in to how we lifted our our economic model for Cecil and.
We take a pretty conservative view on things as you've seen and watch us over the last several years and that ties in with how our outlook is for the economy that Ralph do you want to kind of go through in more detail.
Yes in terms of the Cecil forecast, we basically looked at economic forecast that assumed a pretty severe recession.
I think we estimated the state effective unemployment we'd be in the low to mid teens, a personal income would drop.
In the upper single digits, and probably we see no meaningful return in terms until later in the year. So looking at visitor arrivals about 60% and then state GDP dropping probably low mid teens.
Just probably twice the national rate and in our model I think the local.
Unemployment rate is probably the strongest correlation that we have to sort of our base lost model. So to wrap that up we're not we're not forecasting a significant recovery to all through the end of the year.
Understood and then just.
Loans, which were sort of all the 14% you mentioned before loans that went into criticized.
Well give us some color on the borrower base and what happens with those loans due to move to kind of the default local process.
Centered on any loss severity. The if you could shed any of that with us.
No. We can talk about individual loans of course, but I will say they were very much in the.
The tourism related industries, and we have been working with them and they have been making progress, but Ralph maybe you want to.
Some comments, yes, so when we did the Revalidation exercise, we asked alone offices to take a 12 month forward view, we gave them a very severe very stressed environment to sort of look at that view and look at the borrowers business think about the impact that topic would have and what their liquidity was kind of get through that a very long.
Great.
Reduced activity. So a lot of the credits that were downgraded were in sort of the special mentioned area. So these are areas, where we sort of say there is potential week, it's not a well defined.
And that potential weakness is really around kind of this perspective, you. So we wanted to really be able to understand which clients. We'd ask that had to focus on and then now going forward, we're going to be looking at each of those clients and looking at the assumptions that we made in terms of how they would perform over time, it's sort of updating that so if.
If people do do better than anticipated or can we would probably upgrade those credits and if not we look at.
For further there would be it need to downgrade.
And if you could see if you see the.
What we have right now in.
In terms of the composition the bulk of the downgrades are in that special mention category.
Thanks for taking my questions.
Our next question comes from Steven Alexopoulos of JP Morgan Your line is open.
Hi, everybody.
Steve Steve if I wanted to first start with the dividend.
But you Didnt cover would earnings and Bob I heard your commentary you think you'll cover it would go sufficient earnings to cover moving forward, but can you talk about your comfort level and maintaining an elevated payout ratio and maybe where you'd like to see that move to overtime.
Well I.
Excellent question I mean, we're now in a period of additional stress in the last two quarters of resulted in substantial increase in provisioning. What we have always had in the passes looking to the 50% payout ratio and we think that as the economy normalizes over the next couple of quarters, It will get back to that payout ratio.
It might take a little bit of time, but.
We're optimistic on away long term and we're just going to keep working through this we have taken conservative marks's.
As Ralph mentioned, as we think that positions us well for a weaker economy in the near term.
Okay.
That's helpful. And then we look at the slide that you're calling out to select industries and we look at the auto related where the deferrals are pretty high can give some color on what you're seeing there I assume that's all for plan in terms of the Cnine bucket, but maybe give some color there.
Thats correct. The vast majority of the Cnine bucket as floor plan and as we had talked about in the first quarter virtually all of our dealer customers you can see 85% of them to payment deferrals and all but maybe one very small customer came back to regular payment and so they're actually doing quite well one of the is.
Issues in our loan portfolio as they paid down there flooring lines are selling all of the cars and have had difficulty getting new cars from the factory. So.
They've done quite well coming out of the.
Pandemic.
That's helpful. And then one of the areas, which has always been a focus for you guys is a shared national credits and I know youve exited some of those over the past few quarters I'm. Just curious how are those performing here compared to the rest of the portfolio.
What we saw admitted to seeing the hospitality hotel area, a number that draws in the shared national credit portfolio right before quarter end and into early.
No.
On a quarter billion dollars and.
Virtually all of that got paid off in May and June.
So they use aligns as expected and assays.
We looked at their cash needs or went to the capital markets. They paid off those drugs. So we're seeing it used to exactly as expected we're not seeing undue stress in that portfolio. Although having said that that is the larger loans that we did look at every single one of those.
In our analysis.
Okay.
And then finally departments, we think about the reserve. So the first quarter, we had a big adjustment is the overlays in there. This quarter you had the downgrades in as we think about the third quarter sounded like you're taking a fairly harsh outlook in terms of the economic assumptions.
Should we see a reserve build further in the third quarter. It seems like it should be behind you you're right.
We're very comfortable with the levels of weather out now and most economic outlook changes significantly we would foresee that provisioning would come down okay. Okay. Great. Thanks for all the color.
Our next question comes from Andrew Liesch of Piper Sandler Your line is open.
Good morning, everyone.
Hi, Thanks, just questions on the deposit growth outside of the PBP funds in the public fund that's pretty outstanding growth from the.
Local consumers and commercial business is what what was behind that anything you can point to.
Well I think it was you know.
A lot of different activities that were seeing with our commercial and consumer borrower I mean, our customers. We have a very rational deposit market here in Hawaii, and we just saw a lot of build as people moved move their money and their their funds into into deposit accounts.
And to add to those comments, Andrew Ravi is that.
We also saw some money coming back from our sweep accounts back onto the balance sheet and that's part of that so these are funds that.
If they just move back that wasn't a huge amount, but that was certainly part of it.
And then.
Separately on the public side as we've talked about in the past being the state depository. We did the stay did receive as carriers money and we work closely with them over the course for the quarter too.
Manage that huge influx of funds as it is a blended in their accounts.
Okay.
And then how should we think about the expense base going forward yet but.
<unk> increased the fraud consummate lower card expense as well.
And I would also assume that maybe less travel entertainment it costs, but.
What we're working expenses move from here and what do you think you're going to see an increase back to normalized run rate.
Yes, I mean, I think from an expense perspective, maybe let me just walk you through a little bit of the drivers. There you know in 2020, we're absorbing the last bit of reimbursements that ended.
About six and a half million and we mentioned on previous calls were continuing to invest in technology.
We're in the process of implementing a new core platform and we mentioned about a 1% to 2% to increase in expenses and we're committed to those activities and projects improving our technology and implementing our core so we'll continue to invest in those areas.
In the areas that we could see.
Opportunities I think that will depend on the economic activity that we see in the areas.
The two big drivers on.
On a on expenses this quarter were tied to you know we're tied to the PPP loans.
Deferred loan costs that we we absorbed as our reduction of to salaries and expenses, but we also saw declines in the use of.
Our current and cargo warns expenses associated with lower activity. So for looking for you know.
Opportunities we're constantly.
Looking for those opportunities, we're very cost focused on an expense focused as an organization, but I think a lot of the drivers that will occur on expense side will be driven by economic activity and expenses associated with those economic activities and Andrew. This is Bob just to add to those comments on the other side of the ledger just.
A reminder, we did wave all of our ATM fees during the second quarter.
To help our customers out and so that will be coming back on the revenue side.
Then third quarter.
Understood.
Thanks, once you've covered all my other question.
Our next question comes from Jackie Bohlen of KBW. Your line is open.
Hi.
Hi, good morning, everyone.
Hi.
I wanted to follow up on your comments related to the waived fees in the quarter was that the full driver.
The quarterly variance between one he went to Q in terms of service charge as another fee income or if some of that impacted by customer behavior. So it can carry over into third quarter as well.
Well.
Much of the second quarter, we were at stay at home and so that clearly had an impact on our customer activity and customer behavior. So you saw fewer credit and debit transactions as you saw.
The higher loan balances, resulting in lower overdraft fees. There were a number of different drivers that affected that Rob you did I Miss anything I would just add in terms of economic activity. We also saw lower merchant services fees during the quarter and.
I'd say Jackie that we we saw on bottom out in April and recover a little bit in May and June as we started to open the local we opened a local economy I think a lot of what we're looking forward in a lot of it will depend on.
How well, we'll be able to open local economy in whether we'll be able to open it broadly, but I think what we saw with stabilization in the middle of the quarter with with a little bit of it increase over the course of quarter as we reopened to ourselves.
Okay.
And then understanding that the other income line item can be very volatile what was the driver of the increase on a linked quarter basis.
Yes, the driver.
Have you are talking about noninterest income.
Yeah.
Yes.
The big drivers on noninterest income was.
Higher BOLI income in the quarter, if you look back at the quarter and think about the quarter.
We had a lot of disruptions in the market in some of the underlying investments in our board fully portfolio were impacted in Q1 and they recovered in Q2, and so you saw about a 2.28 million increase in Bali.
Q1 to Q2, and then we had higher swap fee income in the quarter and that was just a reflection of some of our customers be even being able to go in and.
Engage in some swap activity as rates fell to test and they generated some income in the quarter itself.
The the offsetting factors there as as Bob and myself mentioned it was just lower service charges on deposit accounts, and and lower credit and debit card fees and merchant services fees.
Okay. So looking specifically at.
Other income line item within noninterest income that you know that went up from about 5 million to about 8 million with the primary driver that swap higher swap income then.
Yeah, I was about 2.8 million from higher swap fees and about.
400000 about missed in the miscellaneous categories to get to that 3.2 million.
Okay, great. Thank you that's helpful and just one quick last one on PCP.
So are you amortizing your expected fee on a quarterly basis.
We are we are we're taking a pretty.
Conservative view and looking at that over a two year period.
Okay, great. Thank you.
Our next question comes from Brock Vandervliet DBS Your line is open.
Great. Thanks for taking my question.
Okay, Kevin PPP.
I like that disclosure on slide seven in terms of the a the reserve.
Break down the question.
On C. and I, we penciled.
X P. P P to see an eye reserves, maybe as high as you know in 80 basis points some of your peers.
You know for well above that.
Is there.
Something we should look for you would call out for a.
Delta in why that might be lower.
I think the composition of the portfolio. We know we do have a lot of us Nick credits they tend to be higher quality, even in the downgrading activity that we took.
Some of the downgrades were really moving from a very high pass through a stall pass grade.
So I think that has a lot to do with.
That has a lot to do with.
The fact that we have a loss reserve in that area.
Okay.
And as you looked at sea so on the the reserve.
Methodology that you went through how much of a.
Island overlay. If you will did did you apply to correct for the.
Moody's using more.
More of a mainland bent to their numbers I would assume.
Yes. Good question. This is Bob and I'll start and handed off to Ralph is we aren't using the Moody's model, we're using the local universe, who fly economic research organization. The Euro model is kind of the base model for many of the the banks here. It's just much more focused on the regional economy that Rob any other comments on that yeah, I mean, 80% of.
Our loan book really.
In Hawaii and Guam, So that's that's the big driver of of.
Our economic modified to the seasonal model.
Okay and.
Lastly, I'm sure. This is a major topic of parlor conversation sort of it but once.
Yeah. The island is open any.
Prognostications on take up from tourist travel.
It's going to come down I think ways of very attractive place for people come we keep hearing that not just anecdotally, but a lot of different sources.
But it's going to be driven by people's willingness to get on an airplane and.
Seems okay for now, but it's really hard to judge that in volume. So, we'll just have to wait and see.
Okay. Thanks for taking my questions.
Thanks, Brian.
Our next question comes from Jared Shaw of Wells Fargo Securities. Your line is open.
Hi, good afternoon.
Most of my questions are answered I guess as you look at the consumer portfolio, especially autos I mean as those deferrals of have come off is there any type of adjustment to.
To balance or any type of incremental charge off you expect to take just to align valuation with that or balances with with current valuation of on the cars.
Well in the this is Bob.
Maybe touch on it had an opt to Ralph we bake that into the seasonal model and so that's part of our modeling so as it is.
Part of them, all but a Ralph anything you want to add to that yes, selling on the first quarter. When we did the overlay we did a series of.
Sort of scenarios, what we did transitions on on that book, a and then this quarter, we actually even went further into the book and we look we looked at loans by been numbers and auction prices. So we added an additional stress to that.
That number in in Q2.
And what we're seeing in terms of the return to pay rate in that book, it's better than what we we had anticipated. So we're feeling pretty good about the number that we put about satisfied or.
Indirect auto loans.
Okay, and then just on the.
On the residential portfolio you know I guess what are your expectations.
Yeah for performance there if we do see the next few hero Gotta get incrementally worse is at a yeah I got it seems like that's an area of concern in the broader Hawaii you got.
Discussion base, you know, what's what's the thoughts around.
We're working with customers and and the impact of the resi portfolio.
Yes, it's something we're certainly paying attention to I will say that Hawaii has always been and continues be a supply constrained market and we have.
An underwritten the portfolio conservatively as you remember those we didnt repeat the slides from last quarter, because we didn't change much but the average loan to value in the portfolios in the low Sixtys route so.
Even in a period of significant stress in the supply constrain marker that would have to be a very.
Very different economic environment, where we would be real concerned about the residential portfolio are up any comments down to that no not really Bob.
Alright, thank you.
Our next question comes from Alex matters of Goldman Sachs. Your line is open.
Hi, good morning.
Morning, Twentyk morning, first just a quick follow up on the Cecil scenario assumptions are you factoring in any benefit from the government stimulus programs and deferrals and if so are you assuming sort of any continuation of that going forward.
Yeah in terms of the individual risk ratings up customers. If they did take PPV lump PPP loans that probably was factored into their liquidity positions, but that's that's a pretty short term I wouldn't really sort of thought moved the needle so to speak and we have not sort of assumed any any additional programs that would become.
Available.
Okay. That's helpful.
No the remaining 800 million or so deferrals sort of can still seeking relief ex the the mortgage loans could you provide some color on what industries those are in and sort of what your your plan for work out are there.
So there's very few in the commercial book and the way we would approach that is the way you approach any sort of like problem credit situation. So each one gets evaluating individually they come up with that sort of strategy around the loan no action plans and so forth on the consumer side, we're looking to move from deferrals to me.
Modifications and we sort of stood up a program that to deal with.
A large volume of modifications if necessary. So thats really what we're looking to do moving from the deferral periods to sort of modifications that we think as long as we keep people.
Pain, and working with us thats going to be very helpful for us in terms of getting through this.
And then maybe we just one more quick one on the mortgage portfolio could you probably a little color on sort of the timing of when you expect the losses there to eventually come through once the the deferrals expire sort of like how you're approaching that.
Yeah, I mean that.
That would be something in your typical a foreclosure process and the state of Hawaii, you're talking 12 months out from a default so that would be further down the road.
But again I think.
We're pretty pretty comfortable with that portfolio right now we're comfortable with though ltvs, we're comfortable with the location of the collateral and we have pretty good history as Bob said in terms of performance of that portfolio through a cycle.
Given the fact that oil supply constraint.
Great. Thanks, I actually have one very quick follow up do you can't have the average balance contribution of the PPP launched in the and the second quarter and what the yield on those was thanks.
Don't have that off the off the top and opens up a we'll we'll get back to what those numbers.
Okay. Thanks for taking my question.
Our next question comes from Laurie Hunsicker of Compass point Your line is open.
Yeah. Thanks, good morning.
Well they might bring with what was that PPP and how much are you expecting in fees in the 940 million.
How much of fees, yeah, it's right about.
Go ahead, it's about it's a little over 24 million as what we've estimated.
Okay and is that net of debt $2 million your donating.
We're not expecting or $2 million through that PPP loans.
Got it okay, and so that was out of our foundation.
Okay. That's okay. So.
Is that showing up than any other expense line.
Yes.
Oh The foundation no those are funds that we put aside over a very long period of time. It had been in there and of is the arpus within the foundation that.
Our net income and that's had a completely separately from the bank.
Okay perfect I didn't know they were just next to each other on the wording of that the sand that's how it might sorry about that no no. My confusion, okay, I'm just going over to credit the the Cnine charge off that you had this quarter. The ports nine can you share with us what categories.
Those for him.
Yes, I mean, we we had four loans that basically or.
Classified pre called it a when we did the exercise we did this past quarter yeah. We.
We basically sort of changed serve the outlook for those resolution plans. We did an impairment analysis took the charges were carrying the balance Oh on the books on non accrual and I think we would anticipate that we have paydowns over the next few quarters on those phones as.
Some properties gets sold.
And what what type of I mean, what what type of sand I lost my dad.
A couple of see high loans and a couple of real estate secured they were tourism related if thats what your curious if that's your question Larry.
Sure I was on but I mean, where they.
Were they in hotel category or that retail category I mean think more broadly everything is sort of cutting shred. The light restaurant I mean, I'm just trying to understand what category the Brett themselves.
Yeah were given the nature of.
These situations, where we can't really talk a lot about the individual credits.
Sorry about okay.
Okay.
Okay. I mean, I guess my same question was let's let the jump in Nonperformers to your had been can jump in and Cnine a jump in crane.
Justin I, just was wanting to understand what categories not necessarily specific loans that what category.
You're going to jump in weaker.
The jump in non performers were attributed to those four loans.
I'll say that silent okay. Okay, I'm, just looking at your slides for your hospitality and hotels.
Only 21% into for all you know round numbers 113 million, that's super Super allow compared to.
And what we're saying, let's let mainland hotels, you just Bob maybe comment a little bit.
On the strength there and then also event the return to pay within your heads how about how you're thinking about that I'm sure.
Sure. We've excuse me, we've always focused on the strength of the sponsor and look to bank people that have the ability to support themselves through times of stress and I believe that's what we're seeing right now.
As we look to that and.
It's a very unusual situation, where we have.
Entire hotels still close for an extended period of time and.
Steve.
There have a means that they didn't require any support from us.
Ralph anything you would like to no no.
Okay. Thanks, and then I.
And just trying to make sure I got the straight to your dealer your dealer floor plan loans, right now or 979 million up from 875 million last quarter.
Is that correct I am I reading this wrong here [laughter].
Or maybe about his question as you read it off of slide four.
So that includes some things that are not floor plan, yeah, how our Ravi b of the yeah. The dealer floor balances were.
Set not 795 at the end of the last quarter and there are 615. This quarter. So what is down about 180 million.
Good luck on Okay, and then how much of that as is a California.
So the mainland this quarter was about 440 million versus $570 million the prior quarter.
Okay, Great and then do you have the same numbers for your shared national credit box.
It's generally about a third in Hawaii and the remainder on the amendment.
And recalling that we sold.
Good on.
The total snake portfolio. This quarter was about 1.1 billion. It was down 208 million from 1.3 billion. The mainland connect was about 790 million and not that 180 million is about 130 came from the mainland. So you know that was that was due to.
Due to pay downs of lines.
Okay, Great and then just just one last question probably not been Jackie isn't a dollar amount of swap income.
In the June quarter, and just the March quarter for comparison.
Hi.
Thank you gave us better right yeah.
I don't have the number for for for Q1 I can we can we can chat about booking we can give that to you offline. We don't typically get it to that level of detail.
Yeah Okay.
Thanks, I'll leave it there.
Our next question is a follow up from Ebrahim Poonawala Bank of America Securities. Your line is open.
Yes.
Hey, guys. Thanks for taking my question again, just still wanted to follow up already had owned on the expense outlook wanted to make sure they.
Hi, good message right. When we look at the benefits that you got this quarter I don't to Cogs and <unk> Louis comp expenses.
My sense is the card expenses will depend on activity. So if things Steve no that line item, we remain low in terms of the comps is that 2.4 does it do you look back to what we were in the first quarter or just how does that play out from there. If you can talk to that.
Yeah, I think it'll be you know there will be there will be different drivers I think what you'll see is maybe a lower deferred deferred comp costs next quarter, but you'll also see.
Continued reductions in salaries expenses.
Driven by lower economic activity, so we've been seeing that.
To a certain extent in that line and will continue to see that as you look out versus Q1.
Got it and did you see the do expect $300 million in CD public time deposits maturing in each of the next two quarters.
We typically see that kind of level of of maturities show up on our on our books.
On a quarterly basis and it gives us another lever for us to be able to pull depending on what we see in terms of other so.
Aspects of the balance sheet.
But that's what I think.
There are no further questions like to turn the call back over to Kevin has now for any closing remarks.
Thank you Michelle we appreciate your interest in the first wine and please feel free to contact me if you have any additional questions.
Thanks, again for joining us and have a good weekend.
Well, ladies and gentlemen. This concludes today's conference call. Thank you for participation you may now disconnect.
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