Q3 2020 Bank of N.T. Butterfield & Son Ltd Earnings Call
Good morning, My name is Carrie and I will be your conference operator today at this time I would like to welcome everyone to the third quarter 2020, <unk> earnings call for the bank and T. Butterfield and some limit at all.
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I would now like to turn the call over to know what field Butterfield head of Investor Relations.
Thank you good morning, everyone and thank you for joining US today, we will be reviewing Butterfield third quarter 2020 financial results.
The call I'm joined by Butterfields, Chairman and Chief Executive Officer, Michael called <unk>.
Chief Financial Officer, Mike described.
Following their prepared remarks, we will open the call up for a question and answer session.
Yesterday afternoon, we issued a press release announcing our third quarter results the.
A press release, along with the slide presentation that we will refer to during our remarks on this call are available on the Investor Relations section of our website Www Dot Butterfield group dotcom.
Before I turn the call over to Michael Collins, I would like to remind everyone that today's discussions will refer to certain non-GAAP measures, which we believe are important in evaluating the company's performance for a reconciliation of these measures to U.S. GAAP. Please refer to the earnings press release and slide presentation.
Today's call and associated materials may also contain certain forward looking statements, which are subject to risks uncertainties and other factors that may cause actual results to differ materially from those contemplated by these statements.
On slide 25 of the presentation. We've also included a list of potential factors relevant to the implications of COVID-19 for the bank additional information regarding these risks can be found in our SEC filings I.
I will now turn the call over to Michael columns.
Thank you know us and thanks to everyone joining the call today.
During the third quarter of 2020, we continued to strengthen our position.
Leading offshore provider of banking and wealth management with franchise level market shares in our core operating jurisdictions.
Our ability to support clients with the World class financial services helps us generate capital efficiencies, which cobbled that are solid revenues from a conservative we've managed balance sheet.
You will see on slide four bark analysts continue to report strong results with net income of $30.5 million.
And core net income of $36.5 million or 73 cents per share.
Our core return on tangible common equity.
16.2%.
The core results in the third quarter excludes $6.7 million and stuff extra costs, resulting from the voluntary retirement and reset the redundancy programs that are being implemented and resulting in the reduction of around 100 full time roles across the organization.
This corresponds to 70.4% of the workforce.
In light of the continue ultra low interest rate environment and business challenges of the COVID-19 epidemic.
We have made a significant adjustment to the ongoing cost base to help upset no financial impact to the bank.
During the third quarter of 2020 were pleased to complete the full channel Islands banking integration, which.
Which is one quarter later than planned due to Kobe.
Overall I'm delighted with the result of the acquisition and the transition of the business and people onto Butterfield platform.
This now positions Butterfield to grow with the more meaningful market share in the channel Islands.
We also added two new non executive directors and enhance risk and compliance management with new executive level hires.
In addition to the new directors I would also like to acknowledge the onboarding.
New Group Executive Committee members, so that's a big group Chief risk Officer.
He had dog, though group head of compliance and operational risk and Kevin Dallas Group head of marketing and communications.
They are all strong additions to our executive management team and I've already started making meaningful contribution towards the success of Butterfield.
Turning now to slide five.
In general the island jurisdictions, where our businesses are located have handled the health related aspects of the pandemic well.
Bermuda came in in the channel islands are experiencing relatively low infection levels and sporadic cases, which has allowed the local economies to open up.
Allow for fair fairly normal domestic commerce to Brazil.
Visitor numbers for Bermuda and came in are down this year with no cruise ship business and significantly lower error left and stay over visitors on those flights than in prior years.
For context pre pandemic tourism represented 17% and 25% of GDP for Bermuda and Cayman respectively.
Well, it's difficult for tourism related businesses.
The islands are doing well and are seeing visitors numbers slowly return the stringent health related arrival protocols contacts tracing and testing to control imported and local transmission of coated cases.
At this point the testing and tracing has been effective at maintaining low rates of transition.
On the top right of slide five we have provided a summary of the deferral program, we offered to mortgage clients in good standing which covered a total of six month principal and interest deferral.
By the end of the second three months period in September the participation rate was 34% of total qualifying borrowers.
In order to better understand current customer need and repayment capacity, we started that ongoing calling program at Bermuda, which has contacted around 500 bars or 20% or Bermuda mortgage holders.
Of those borrowers 92% have so far indicated that they plan to resume normal payment well, 6% have indicated that they may require potential further relief.
Only 2% has stated that they do not anticipate being able to resume normal payments.
As stated in the past, we will continue to work closely with customers to determine how best to help those who experienced difficult.
We closely monitor all credit assets and the general credit environment and view. These initial results as a positive indicator that the majority of clients should be in a position to resume payments and meet their obligations.
I will now turn the call over to Michael scrum to provide more details on the third floor. Thank.
Thank you Michael.
I'll begin on slide seven with a summary of net interest income and then into.
In the third quarter NIM of 2.30 was 80 basis points lower than the prior quarter due.
Due to the lowest starting in dollar interest rates as well as the full quarter interest expense on the new $100 million subordinated debt issued in June.
The added expense mainly represents.
The timing difference between the issuance in June 2020, and the planned redemption of existing issues in the second half of this year.
The dollar rate environment buyout options for MBS assets.
<unk> increased the prepayment speeds in our investment portfolio, which resulted in accelerated reinvestment in the U.S. agency securities at lower rates.
New money yields average, 1.48% in the third quarter.
Floating rate loans also trended lower with an average yield of 4.43% down 10 basis points versus the prior quarter.
During the third quarter, the blended rate for loan originations was 3.78% so.
Hundred 43 million of new loans up slightly from 3.54% 452 million of originations in the product.
Turning to slide eight.
Non interest income was up 12.5% compared to last quarter due to the recovery and domestic economic activity in the current quarter. After the prior quarter's cobot impacts.
Banking fees in the third quarter also benefited from a 1.5 million.
Dollar one time loan structure change be.
The banks a contribution from piece continues to represent stable and capital efficient earnings for the third quarter fees were 38.8% of total revenue.
Slide nine provides a summary of core non interest expense, which was up 3.3% in the third quarter compared to the prior quarter.
Expenses increased due to the return of more normalized activity levels in the third quarter.
The bank's recent cost restructuring program has resulted in $6.7 million of non core stop exit cost this quarter.
The lowest off compliment will reduce future expense run rates with payback from exit costs expected within one year.
We continue to target a through cycle cost income ratio of 60%, but we do expect to remain in the mid Sixtys churn goods also popped up the rate cycle.
Slide 10 summarizes regulatory leverage capital levels.
The bank remains very well capitalized with capital levels significantly in excess of Basel three regulatory requirements.
Tangible book value per share increased 1.2% in third quarter and is up 10.8% over the past 12 months.
We continue to view growth of tangible book value per share that's a very important factor in creating long term value for shareholders.
In addition to the regular quarterly dividend of 44 cents per share.
We have continued to repurchase shares during this quarter.
As at the end of the third quarter, we had approximately 200000 shares remaining in our 3.5 million share repurchase authorization from December one to 19.
We continue to view share buybacks as an important component of our capital management strategy.
We'll provide further updates on future authorizations wants to 2021 operating plans have been finalized.
Turning option slide 11.
But fields balance sheet continues to be strong and conservatively managed with a very liquid profile.
At the end of the third quarter the loan portfolio represented only 37.4% of total assets.
Liquid assets were 59.6% of total assets.
The bank's balance sheet, that's now stabilized following a few quarters of declines true to the plan deposit pricing alignment following the acquisition of avian Amro Channel Islands in July 29 cheap.
The bank has maintained a low risk density with risk weighted assets to total assets.
36.7% down slightly from 37.1% last quarter.
On slide 12, you can see that Butterfields asset quality remains exceptionally high with low credit risk and in its investment portfolio that is 99 cent comprised of Triple a rated U.S. government guaranteed agency securities.
Non accrual loans were relatively stable in the third quarter.
$74.8 million or 1.5% of gross loans.
On slide 13, we discuss the average cash and securities balance sheet with a summary interest rate sensitivity analysis.
But it feels weighted average life and the Fs investment portfolio increased to 4.2 years from 3.6 years last quarter.
Due to a planned deployment of Xsense dollar deposits from the channel Islands acquisition.
The repositioning of $315 million of floating rate junior securities to fixed rate Agency securities.
Similar to last quarter got a feel continues to expect a potential increase in net interest income in both up and down rates and outcomes.
I will now turn the call back to Mike Collins.
Thank you Michael we remain optimistic about the financial health and earnings prospects for Butterfield.
We are encouraged by the favorable indications that are coming through the retail mortgage book called program.
We will now begin the question and answer session.
Ask a question you May press Star then one on your Touchtone phone if.
If you are using a speakerphone please pick up your handset before pressing the keys.
Withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
The first question will be from will Nance of Goldman Sachs.
Hey, guys good afternoon.
Hi, Good morning, I guess, yes.
You, maybe I'll start just on the expense base, obviously, you've taken a number of actions to rationalize the cost base sizable percentage of the of the head count you referenced can you give us a sense for what these actions are likely to mean for the expense base as we head into next year and how much more work there is to do to continue to pull out costs.
Sure. Thanks, Thanks, well so as we talked about we had three stages basically in Q3 were starting with a senior departures.
Then we had 49 positions took a voluntary separation, which is basically like early retirement, but people can choose to go and then we had a stage three was 51 redundancies across the organization. So total about 100 positions core.
Corresponds to about 75% of our total workforce I.
I would caution that we are very focused on backfilling areas, where we might have increased operational risk.
In Halifax in Bermuda, and Cayman. So some of those hundred positions well, we'll have to refill a bit so I would say and we've talked about this in the past for meeting came in the total cost all in of an fts about 100000 per head, but I would say the annual.
Normalized run rate from these programs would be about seven to 8 million a year after backfill.
Got it Okay. That's very helpful and then.
Maybe just separately Michaels from I think you've talked about the opportunities to deploy liquidity from the avian deal you mentioned the balance sheet is it basically is now stabilized.
Could you just talk about kind of where we are on the liquidity deployment and how much there is and how much kind of feel comfortable deploying.
Yeah, absolutely. So obviously, we've done a lot of back testing on the avian book and you'll recall some of that was euros that we ran off on some of the Sterling.
About 1 billion if that was in us dollars.
Just this quarter, we first of all this quarter, we took some action new best portfolios, while we have some floating floating rate.
Denise we flipped into into fixed so that was about $350 million of net new if you will from the existing NFS portfolio. So.
So that should help the NIM a little bit going forward on the HCM side, we would expect to ladder out about $150 million per quarter for the next four to six quarters and then we'll review again.
The stickiness of the deposits.
I want to once we get through that next year.
Got it and then just lastly on the strategic front Im wondering if you can comment on the amount of strategic dialogue, that's happening as we kind of shifted from the freeze situation in the pandemic to more of a kind of manage through type of operating environment.
I guess I would characterize it as as continuing discussions I'm across our jurisdictions obviously.
If we saw overlap acquisition opportunities and.
Bermuda pretty unlikely, but came in or the channel Islands. We think we continue to be very interested.
Obviously, we're also interested in the trust world and specifically, we would be very interested and an acquisition in Singapore potentially to build our sketch to scale. We've got a great operation there now, but we need to run more fee income through it so that that's a focus.
I would say that it's still a strange time, I mean, I think talking to.
Various parties, there are clearly going to be opportunities and there's going to be a point in time, where I think more transactions will happen but.
Looking at the banking side. It obviously is very difficult to value credit assets. I mean, we're looking at our own credit and we think we're in reasonable shape, but.
It's not not not like normal days, so I think banking acquisition would be more difficult than a trust acquisition today.
But we are continuing to have discussions across the board.
Got it thank you for taking my question.
Thanks.
The next question is from Alex Twerdahl of Piper Sandler.
Hey, good morning.
Morning Borealis.
First off just wanted to go back to some of the where you're talking about earlier on the Laddering out of securities and sort of appreciate that that you're set up pretty well from an eni standpoint, no matter what happens with rate changes, but.
Just given the current outlook for rates and kind of being in this environment for for a while do you think that you have enough levers to reverse and I kind of pushing margin side, obviously, there's a lot of moving parts there, but when if you look at Eni.
It's been declining the last couple of quarters, obviously lot of pressures, but based on some of the things you're talking about and Laddering out the securities book et cetera, do you feel like we've kind of reached a bottom on eni or is there still some some room to for that to move lower.
No. It's it's a great question so I.
I think the the loan yields in particular as you as I mentioned on the in the prepared remarks as well our loan yields currently below the book yield for the existing loans.
Most of that is because of the.
Places that we originate so we've had relatively more mortgage origination in came in at lower rates and in Sterling, which is which is good from an <unk> perspective.
But obviously does put pressure on the on the loan yields.
Yields I think the investments clearly, where we saw a seasonal peak in CPR us in July and August we expect that to kind of moderate somewhat going into the winter. So.
So that should slow down to prepayment speeds on the investment side, so with that with the Laddering, so about 60% of.
To.
NIM impact in the in the investment.
Yield for this quarter was actually due to the accelerated prepayments speeds and about 40% was due to rate and volume.
So some of that will depend a little bit on on where the prepayments fees actually slow down in particular buyout options.
Deposits roll them too obviously on a fixed term deposits rolled into two lower rates or tweaks, we would expected, but it was that an impact was offset slightly by.
Demand.
By the by the Euro demand deposits rolling off in aviation and also growth in retail deposits, both Bermuda and Cayman have had.
Some optional redemptions from from pensions during this period as part of the fiscal stimulus package and.
Thats resulted obviously in a in an inflow of deposits to the bank, but mostly in contractually noninterest bearing deposits.
And then finally at the sub debt, which contributed about three plus three basis points you.
You know, but I was mainly a timing difference over the next couple of quarters. So I think on the cost side.
We should we should see the cost come the deposit cost come down over the next couple of quarters. So that should help them with the laddering out use sort of fighting that reinvestment picture a little bit on on on the investment book.
So I think it will stabilize over the over the near term and longer term. It will depend on the tenure rate as we've said before I think you know with the tenure being below 1% since.
A little bit of life of late in that so our new monies out of 148 this quarter.
So it will depend a little bit under longer.
Durations in the yield curve, but I think the short end will has has kind of bottomed out that makes sense.
Okay, yes, thanks for the additional color there and then when I think about loan growth.
I know you have the initiative in the in the Channel Islands I might take a couple of years to kind of result in some material loan growth and then.
I also believe correct me if I'm wrong, you guys have participated in some some lending to the various jurisdictions in which you operate in order to help with their stimulus programs based on.
Those facilities and whats drawn and what's expected to be drawn in the near term can we expect some loan growth in the next couple of quarters or is it going to be kind of more of the same sort of.
Relatively flattish.
Yes, I think.
Flattish. So I think we're very excited about being able to participate in those government programs.
Total that's about $300 million committed.
Across currency Jersey, and Cayman Islands are.
Very little of data has drawn this quarter and I think that the latest news from from came in as they don't really expect that to draw.
By public statement from the from the Minister of Finance there until Q3, so they actually believe that they have enough.
You know in the checking accounts to to make it through to Q3 of next year and then we would expect a gradual draw on that facility Joe's in Guernsey again.
We've had very little need to to draw on those facilities, but we are getting a little bit of commitment fees with those facilities and.
So I would say flattish overall.
Okay and then just final question from me, obviously is a big event in the United States next week with the with.
With the presidential election, and potential change in administration could have some tax implications.
Which you guys are pretty much immune from but I'm just wondering.
You kind of think about the geography is and you know there might not be direct implications from a tax change, but theres often knock on implications is there anything in the tax language that youve heard that either excites you or concerns you at this point.
We have so we have been following it pretty closely I mean, obviously, a democratic administrations going to.
In install more taxes, then generally a Republican administration would I.
I would only say that you know we've been through these cycles in the past the most sensitive industries, obviously the reinsurance industry.
But they've gone through some real changes that have reduced the tax advantage of being offshore in Bermuda and not most of them really didnt Didnt change your strategy at all so they didn't move back to the U.S. They.
They didn't move to Dublin, they stayed in Bermuda, and I think thats, because there's it's a broader market. So the tax advantages are really important but there also.
Close to all the wholesale reinsurance and the accountants and brokers and bankers that actually understand the industry. So it's a real market that has legs that isn't completely driven by tax.
I think it's going to be changes to offshore earnings for us companies again in that that could have some impact, but you had a very large technology companies, we don't bank any way they may have.
Incorporations offshore, but it's not like we have a lot of or any deposits from them really so that that flow of money may impact us marginally, but I don't think it's it's really not a big part of our business. So it's something to watch.
And it will continue to change, but I don't see how it having a huge impact.
Great. Thanks for the color and thanks for taking my questions.
Thanks, Alex.
The next question is from Michael Perito of KBW.
Hi, Mike Hi, guys how are you.
Good thanks.
Sure.
Just have a few rob.
Clarification, I want I talk real quickly here so on the expense side Michael.
I think after some of the backfill southern 8 billion per year, starting to take that kind of just a step further here I mean is it still just that kind of say that we're at 80.5 million core per quarter here. So thats step down to under 83 million early next year. Once all these actions are in the full run rate is that just anything else that we should be thinking about or.
That's fair.
I think thats totally fair Mark as part of the voluntary separation program. We obviously were very careful to make sure that we didnt impact operational risks. So some of those who are going to be staggered release states. So I think as we think about the financial impact over the next couple of quarters is going to be a step down.
Okay.
And then you appreciate the commentary on the kind of the M&A outlook, but as we kind of take that to the next level to think about.
Hum the share repurchases here I mean, it seems like based on your prepared remarks that there are some appetite for that to continue I guess, it's we're just trying to kind of figure the magnitude of that I mean is it fair to think that.
Yes, more asset or bank oriented M&A looking to be more challenging right. Now that you guys probably have a little bit more appetite to use capital on share repurchases is a lot of these trust risk assumptions that you guys have been made in the past haven't really had that big of impact on your capital position.
Yeah, I mean, I I think Thats fair in terms of.
In terms of the upside obviously, it's always subject to market conditions, but again I think things haven't really changed we are focused on the sustainability of the dividend. Obviously, we're a new sort of high fiftys payout ratio and year to date.
You know part of that is due to pro cyclicality of seasonal.
Reserve builds.
And I think feel are comfortable around that in terms of the excess you know in the absence of any accretive M&A deals done a more concrete we would obviously.
Obviously look at our forward planning model and I'm, sorry, if we don't need any more capital really for.
You know, maybe modest capital credit migration, but not not not really immaterial amount of additional capital from retained earnings so the high already.
Which would support a larger deployment into into buybacks to program that we had in place as you recall was a December two.
2019 program. So came out of the planning session at that point. It was three and a half million authorization, which is pretty pretty close to exhausted and we would expect to obviously look at capital again as we finalize our plans for next year, but I think your commentary is very fair.
Okay.
And then just lastly on I. I choose not to get too dense here, but I just want to make sure I'm understanding that the deferral Trent correctly. So at the end of the quarter about 34% of the mortgages or we're still taking the deferral at the conclusion of the program and then you guys reached out to about 20% of the total.
Customer the vast majority of said that they're able to make the payments is there with the the clarification. There I guess the only reason they haven't made the payment that's because the payment at that time had income you yet and what you expect them to win so really by the end of next quarter, you know that number should probably be less than 5% of mortgages that could potentially still be on the hurdle is that.
Is that correct or or am I missing something yeah.
Yeah. So you'll recall it does that's exactly correct. So you'll recall that we had a we had an opt out initially for the first three months and on an opt in so we started off with 50% of eligible borrowers opting in and then some came off that program during the quarter so were down to 34%.
We've obviously taken a look at the sort of high LTV buckets, and you know folks who may have been slightly late in the past and called around.
To see what the status is somehow that hey, how they how they feel about coming off the program and just making sure that they are aware.
Of what's happening I think thats, a handful or maybe it doesn't that indicated maybe.
Lack of ability to come off the program will obviously working with those cuts.
Customers to see what's the next steps there, but but that's.
Pretty small percentage of certainly the sample of folks that we've called but again those were in the high risk buckets. So we.
Thats why we started and I'd also I'd also make the point that in Q4 and Q1.
A lot of the deferrals actually were saved so we can see or deposits, increasing so obviously people arent traveling so they took that as an opportunity to put some savings in the bank. So I think that will be held for the next couple of quarters.
And I think you know we did we talked to 20% of our bars are the 500 out of the 2500, who we consider a higher risk.
And things look pretty good, but I again, I would just caution that Bermuda is going into its down winter season and either one.
One bottom until sometime next year or so you know cautiously optimistic, but we're just going to keep a real watching brief on it.
And stay in touch I mean, it's a small enough number it's 2500 borrowers we know where the houses are we know a lot of families and so we will just continue to stay in touch and try to support them through us.
Makes sense and then on that point about that.
Hi in your do you feel that the hotel operators on island for the most part have enough cash to get through the winter here and hopefully.
You tell open up for a better season next year or how to think about that.
Yeah, I mean, I think I think the they do I mean, one of the bigger properties fair amount of South Hampton has said the biggest has closed for renovations, which was planned to pre covered so that takes some hotel beds out of the market.
But the small or medium sized hotels that were involved with actually theres been a huge safe to stake a staycation.
Market here in the last six months.
Hotels were 60% some of them are occupancy over the summer because no one was traveling and everyone spent weekends inhibitor.
In hotels, so it was a strangely sort of a boost in some sense, but obviously going into the winter season that that's going to change a bit but I think most of them as far as we can tell have have enough cash to get through a number of months.
Got it great. Thank you guys for the answer I appreciate it they will.
Thanks, Mike Thanks, Mike.
The next question comes from team members at Wells Fargo.
Hi, good morning.
Hi, there.
Hey, guys just wanted to follow up on some next question any deferrals out of the UK mortgage book.
No. So we didnt, we didnt do a deferral program in the channel islands or the UK.
You know you.
You'll recall those are three to five year.
It goes we have worked with some customers again this.
Those 60, LTV originations 65, LTV loan originations and.
You know no not not really a hint of delinquency or anything and not work. So no deferral program. So.
Okay, and as you think about the transition off deferrals for the Bermuda and Cayman mortgages over the next quarter.
How does that translate into potential loss content alone. It doesn't seem like there's going to be much and I guess more importantly reserve build reserves went up a couple of basis points. I think this quarter is that a trend that's kind of expected as you gain greater clarity here is the expectation that you pretty much done reserving at this point.
Yeah, I mean, you're right on that on the seasonal side it wasn't as much for this quarter, partly driven by its slightly better GDP forecast.
I think going forward it will depend on the actual loss content. So we do have you know a dozen or so I would say into into how to bucket that we need to work with customers on a more of a permanent solution for and whether that's you know.
Movement, moving straight to to a sale or moving through TV are kind of program and that will then start to feed back into into the model in terms of the Pds effectively on the rest of the book.
But it you know so far it doesn't look like that's going to be immaterial, but again you know, it's just going to be.
It will depend just on a macroeconomic forecasts if they get materially worse.
That could have a negative impact obviously and then the actual loss content and how we work through this with customers going to inform you know the Pts going forward on on on that book, but cautiously optimistic at this point again, you know we're in a month where people are resuming now.
Their payments and so we'll have a more definite there's still a bit of uncertainty around it I think you know but.
I think indications are good right, but it's better to have to the cash.
Right.
And then lastly, just looking at the growth in demand deposits this quarter.
And even transitory in there they they you see leaving the fourth quarter was that all pretty much corn, that's gonna stay.
Yeah, No no I mean, it's pretty much retail driven its construction noninterest bearing.
It's Bermuda and Cayman in particular.
Yeah.
And it's really I think.
Mostly comes from the deferrals.
The cash from the deferrals coming into two retail savings and then also these pension programs. Both came in in Bermuda run where you can take a voluntary.
Withdrawal from your pension has certainly landed in the bank. The question is longer term does that go into an investment portfolio or something so I think people are being conservative around there.
Around their outlook and you know theres a lot of liquidity thats, just coming onto the balance sheet, but it's all good retail deposits rating and team are ascendant. So bellco. The national utility was just sold two and a Canadian utility company.
And about $200 million of that those sales proceeds are coming to bermudian shareholders.
A lot of that might go into real estate as opposed to deposits, but that's something that all the banks you're watching as a potential increase in the deposit base at least in the short term.
Got it and sorry, I actually have one other question if I could just sneak it in here on fee income that's been a nice rebound this quarter versus the depressed level last quarter are we back to kind of a normalized level here or is the expectation.
That things could turn relatively worse than the fourth quarter given that it's even when you kind of the meta.
Yeah, I mean, so I would start with the merchant acquiring is volumes are not ever comps are actually higher than they were at this time last year. So that's a net positive trend obviously credit card volumes are down because there's no tourists, particularly in Cayman.
We typically get and then as a one or a half million dollar fee. This quarter, probably shouldn't right. That's not recurring Q4 typically is seasonally a good quarter for the bank, but that.
Mostly.
Is due to the Cayman tourism season. So you know there gradually opening up the economy, but it will just really depend on hotel occupancy and credit card volumes.
In the Cayman Islands in the in the fourth quarter, but I think domestic activity certainly is back to pre covert levels.
They're both in Bermuda and Cayman.
Great. Thank you.
Thanks, Steve Thanks, Steven.
And this concludes our question and answer session I would now like to turn the conference back over to management for any closing remarks.
Thank you and thanks, everyone for joining todays call. We look forward to speaking with you again next quarter have a great day.
Thank you. The conference has now concluded. Thank you all for attending today's presentation. You may now disconnect your lines have a great day.
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Okay.
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