Q1 2021 Bank of Hawaii Corp Earnings Call
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[music].
Yeah.
Good day and thank you for standing by welcome to the Bank of Hawaii Corp, first quarter 2021 earnings Conference call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session. You will need of press Star then one on your telephone. Please be advised from today's conference may be recorded if you require any further assistance. Please press Star then zero I would now like to hand, the conference over to one of your speakers today.
Should know Hugo.
Manager of Investor Relations Ma'am. Please go ahead.
Thank you Michelle 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 Cheeky, Maura 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 the earnings release, a copy of the presentation and release are available on our website for you, which dot com under Investor Relations and now I'd like to turn the call over.
Peter Ho.
Thanks, Chanel Hello, everyone. Thank you for taking the time to listen in.
Conditions in Hawaii, and then of the Hawaiian economy in particular are improving from 2020 levels tourism appears poised to begin the process of re emerging after a dismal year last year of the viral environment appears controlled tier of Hawaii.
Home prices on Oahu, our primary market continued to perform well.
Bank of Hawaii had another solid quarter of performance for the period ended March 31 credit.
Credit risk remains stable expense management adjusted for one time items with strong capital and liquidity are growing.
In short, we continue to weather conditions, well and are positioned to grow as grow nicely as the economy allows at.
At this time I'd like to highlight a few slides to give you a little more color on operating conditions that I'll ask Dean to provide you an overview of our finances or financials from the quarter Maryann will discuss credit quality I'll conclude with some thoughts on our digital banking efforts and we'd be delighted to take your questions after that.
Beginning with slide number two you see that unemployment here of the islands.
It remains high by National standards, but is moving in the right direction for us.
At this point down to about 9% as of.
The first quarter.
If you turn for the next slide.
You'll see that you hero, which is the University of Hawaii Economic Research organization and is the really the organization that we face a number of our financial models and risk metrics off of as actually revised positively so on the downward revision on on unemployment for both 2002.
21, and 2022 here on this slide you see that we have been revised downward on unemployment from 10, 9% in the December forecast for seven 1% in the most recent March forecast and then for 'twenty two down from five 6% of the prior forecast to $4 four per.
<unk> for the for the March forecast.
There's obviously is having a positive impact on forecasted GDP as well as personal income here you see that 2020, GDP was revised upwards to minus seven 5% from minus 10, 2% previously and 2021 has been reversed.
Been revised upward pretty pretty significantly the plus three 7% for the year versus basically flat for the year of the prior forecast.
Much of this is driven by I think the improving unemployment situation, but also personal income which for 'twenty. One is forecast to increase again on a percentage basis versus 2020 of which was up 46% for last year.
Turning to the next slide.
Yes.
Real estate market in Hawaii like many markets.
Cross of nation continues to perform exceptionally well so on the single family home side.
Both year to date as well as March.
Period to period.
<unk> are up 17, 3% for single family home median sales prices I think perhaps more significantly inventory is just getting.
Down to I think almost record levels. So we're now down to nine days on market.
For a single family home and inventories dropped to 1.3 months condominium sides of performing well not quite as well as single family. The median sales price year to date of five 8% and March point to point of up three 7%.
Inventory conditions on the condo side remain.
Pretty interesting as well with median days on market of 14 and inventory of $2 nine months.
Arrivals into Hawaii are beginning to pick up nicely.
You may recall that most of our.
Forecasts of CAD.
Basically visitor arrivals getting back to two thirds of historic levels by year end here you see in this chart that we're well on our way to that path.
So the the.
The experience, we're having to date is indicating.
A a strong trend of the visitor industry and anecdotally when you speak to people in the industry of the hotels and the airlines, there's a good amount of optimism for both.
Both of for the summer of this year being pretty darn strong and most of that is as you would imagine being driven by U S. Domestic international travel is still pretty pretty muted with.
Most of our international markets still frankly.
Frankly struggling with the pandemic and working to normalize I think two to a level similar to two of our domestic markets.
COVID-19 cases in Hawaii are performing well. So you see on this chart, we are down near the bottom in terms of average cases per day per 100000.
That's a good sign and has really been pretty consistent through the entire pandemic.
On the next slide you'll see vaccination rates in Hawaii are towards the upper <unk>.
<unk> of of the country.
So getting good uptake there obviously looking forward to getting as many Hawaii residents as possible vaccinated. So that hopefully we can move towards a herd immunity in the not too distant future.
So I'll stop here and let me turn the call over to Dean who will update you on our finances for the first quarter Dean.
Thank you Peter.
Our strong deposit growth continued in the first quarter and increased by $1 $3 billion or seven 4% linked quarter and $3 5 billion for 22% year over year.
During the quarter core consumer and commercial deposits grew by over $1 billion.
While we reduced our public time deposits by $290 million.
As we continue to grow deposits, our total deposit funding costs continued to decline during the quarter ending at approximately nine basis points.
The low funding provides low funding cost provides us with flexibility for growth and is a significant contributor to our profitability and a mitigate against the impact of rising interest rates.
The quarter's deposit increase was invested primarily in very liquid assets and to a lesser extent loans.
Total loans increased by $201 million or one 7% linked quarter, and 788 million or six 9% year over year.
Excluding PPP loans core loans were approximately flat quarter over quarter.
We continue to deploy a portion of our excess funding into liquid and safe investments.
And increase the investment portfolio balances by $400 million to $7 5 billion.
Cash balances increased by $770 million and ended the quarter at $1 1 billion.
The high cash balances and strong liquidity provides us with a stable funding source.
Further loan and investment growth and can be deployed to support net interest income as well as mitigate the impact of near term rate pressures.
Net income for the first quarter was $59 9 million or $1 50 per share.
Up from $42 3 million in the fourth quarter and $34 7 million in the first quarter of 2020.
Net interest income in the first quarter was $126 million.
Up from $119 5 million in the fourth quarter and down from $126 million in the first quarter of 2020.
Included in the fourth quarter net interest income was a reduction of $3 million for an impairment of the leveraged lease.
As Mary will discuss later, we recorded a negative provision for credit losses of $14 3 million this quarter.
Noninterest income totaled $43 million in the first quarter down from $45 3 million in the fourth quarter and $46 1 million in the first quarter of 2020.
The decrease from the fourth quarter was due to lower mortgage banking income primarily from lower gain on sales spread income.
Customer derivative revenue as a result of higher interest rates.
The decrease from the first quarter of 2020 was due to lower fees on deposit accounts and customer derivative revenue.
We expect noninterest income will be approximately $42 million to $43 million per quarter for the remainder of the year.
Banking revenue is expected to decrease as a result of higher interest rates, but be offset by increasing deposit fees.
Service charges and other transaction fees from the improving economy.
In 2020 incentive compensation was reduced to support reserve provisioning.
With the improving economic provisioning and economics and earnings outlook for 2021, we.
We anticipate incentive compensation will be back to normal levels.
Noninterest expense in the first quarter totaled $98 9 million.
The first quarter's expenses included $1 $8 million related to the voluntary separation incentive program or visa.
Which was discussed last quarter and $1 9 million in one time charges related to the mass issuance of contactless debit cards, which allows us to place. These desirable cards immediately in the hands of our customers rather than over time as existing cards expire.
Adjusting for these onetime expenses of $3 7 million normalized noninterest expense in the first quarter was $95 2 million and includes the normalization of incentive compensation.
$5 9 million and seasonal payroll expenses of $2 1 million.
When compared with the pre pandemic first quarter of 2019, which included normal than traditional incentive levels expenses continued continue to be well managed with an annualized increase of only one 1%.
When compared with the first quarter of 2020, when we elected to reduce incentives expenses are lower in the first quarter of 2021 adjusted for extraordinary items and incentives as highlighted in the dark blue bars on this slide.
Taking the prior discussion into of come 2021 expenses are expected to be approximately $385 million, which includes the restoration of normalization of incentive compensation.
Note that incentive compensation of 2020 was down $13 million from 2019 to support reserve for provisioning.
Even with the restoration of incentive compensation of 2021 expenses are up only 3% over 2020 and up <unk>, 8% per year of over 2019.
The effective tax rate for the first quarter was 24.09% and was driven by higher pre tax income.
Currently we expect the effective tax rate for 2021 will be approximately 24%.
Our return on assets during the first quarter was 1.15% the return on equity was $17 six 5% and our efficiency ratio was 64 of 5%.
Our net interest margin in the first quarter was 243%.
Adjusting for the $3 million leverage lease impairment, which reduced net interest margin by six basis points in the fourth quarter.
The margin in the first quarter was lower by 11 basis points.
The decline in the margin in the first quarter reflects the impact from the strong deposit growth as.
As well as the ongoing effects of the lower interest rate environment.
We expect the margin will decline approximately five basis points in the second quarter, primarily due to the increased deposit growth and liquidity.
We then expect the margin will stabilize in the second half of the year.
Net interest income in the second quarter will be approximately flat with the first quarter then increase in the second half of the year.
NII is expected to improve with the continued balance sheet growth deployment of excess liquidity and steepening yield curve.
These estimates exclude the impact of PPP loan prepayments, which have been volatile and unpredictable.
We maintained our strong risk based capital levels, our CET, one tier one capital ratio increased to $12 three 5% adding.
Adding to our excess capital, which is well above the minimum regulatory well capitalized levels.
During the first quarter, we paid out $27 million of 44% of net income and dividends.
The share repurchase program remains suspended.
And finally, our board declared a dividend of <unk> 67 per share for the second quarter of 2021.
Now I'll turn the call over to Mary Thank you Deane.
At the end of the quarter alone portfolio net of PPP balances totaled of 11 4 billion.
And remained 60% consumer and 40% commercial with 70% of the portfolio of secured with high quality real estate with in a bind weighted average loan to value of 56%.
This portfolio construct built on consistent conservative underwriting and disciplined portfolio management has continued to provide us of superior outcome and allowed us to support our customers and community through these unprecedented times.
As of April 22 customer loan balances on deferral were down 85% from their peak to two 3% of total loans, 92% of the loans remaining of deferral of our secured with our consumer related deferrals, having a weighted average loan to value of 62% and our commercial deferrals, having a weighted.
Average loan to value of 47%.
89% of the commercial loans and apparel continue to pay interest and to date, our return to payment performance has been strong with less than 1% of these customers delinquent 30 days or more at quarter end.
Credit metrics remained strong and stable in the first quarter net charge offs were $2 9 million as compared with net recoveries of 300000 in the fourth quarter of 2020, and net charge offs of $3 7 million in the first quarter of 2020 non.
Nonperforming assets totaled $17 9 million down 600000 for the linked period and down $2 7 million <unk>.
Loans delinquent 30 days or more for $39 9 million at the end of the quarter up $3 4 million for the linked quarter and down $15 6 million from the first quarter of last year criticized loan exposure of remained flat at two 6% of total loans.
As Dean noted we recorded a negative provision for credit losses of $14 3 million. This quarter. This included a negative provision to the allowance for credit losses of $15 million, which with net charge offs of $2 9 million reduced the allowance to $198 3 million, 163% of total loans.
From leases or 173% net of PPP balances.
The decrease in the allowance is reflective of the most recent you hear of economic outlook and forecast for market, which as Peter shared call for lower unemployment and stronger personal income levels over the next several years, coupled with our credit risk profile. The allowance does continue to consider and provide for the potential downside risk inherent with.
The pin debit.
The reserve for unfunded credit commitments was $3 million at the end of the quarter with a provision of 700000 made to fund the linked period increase I'll now turn the call back to Peter.
Great. Thank you Mary.
So digital is a hot topic. These days, we thought we'd finish off with just some thoughts and some insights into.
Where we're trending out on this topic.
First beginning with the circle, what you see there is really how we think about digital really.
The primary focus for US is the customer experience and obviously for you know for those of US that live here of this way for Central we know that digital is an increasing component of customer experience.
We think digitally in terms of <unk>.
Providing.
Online and mobile banking services, so basically being able to support and service our customers and of digital format, and then secondarily in terms of being able to provide products and services of products.
Alex for deposit products to our customers through through our e-commerce platforms.
We're excited about.
Our digital one investments. So recently, we chose to go with FY Asses D. One platform. This will enable us to move would have been pretty good workhorse, both online as well as.
Mobile platforms for us, but really upgrade to what we believe will provide a superior.
<unk> experience for our customers give us much better alignment of experience between our online and mobile platforms and then finally with the low code capabilities give us much much greater flexibility to upgrade.
Our platforms effectively on the fly and as consumer need and opportunity for.
The other the other investment that we've been making for a few years now as our digital sub brown simplify by bank of Hawaii.
It really represents the e-commerce side of our digital strategy and we've been very encouraged by both the sales results of both for lending products as well as the deposit side, particularly in 2020 as people shifted into.
In a meaningful way towards digital.
As a result of the pandemic.
Some more tactical but recent outcomes Dean mentioned contactless cards that.
Is a very popular product right now for I think for obvious reasons with our consumers and we made the decision to faithfully bite the bullet and as Dean mentioned and swallow the entire rollout in a single quarter. So we think thats. The right decision. We think that's the right customer outcome for our <unk>.
Customers of the feedback we're getting so far of the rollout has been very positive and then finally, we recently introduced live chat into our our mobile platform. So this gives us the ability to interact with our customers digitally in person via the phone and.
Now through live chat, which is a very popular feature.
If you turn to the next page.
Really the under pins.
Turning to the strategy, obviously is based on value creation of what we see here is just a tremendous opportunity to create operating leverage for the organization for the franchise. So what you see here are expenses that we've built effectively over the past five years. If you go back to 2015.
And really not a whole lot.
Vestment in the spaces of e-commerce data analytics.
Digital marketing and such you see from this chart that we've really built up not just direct investment into these spaces, but also a lot of infrastructure investment just into our overall.
Platform, which for 2021 should be about $47 million.
Remind reminding you of that $47 million is already incorporated into the expense run rates that <unk> provided to you earlier. So really the goal here is to make the necessary investments and proper investments into our digital future. While at the same time maintaining expenses as best as possible.
<unk> as well as creating what I think is a lot of upside both from an efficiency as well as revenue opportunity moving forward.
So that's.
That's that on the digital front.
Again, thank you for for listing in and we'd be happy to answer whatever questions you might have.
Thank you if you have a question at this time. Please press Star then one on your Touchtone telephone. Thank for your question has been answered or you wish to remove yourself from the queue. Please press the pound key.
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First question comes from the line of Abraham.
Kona Waller with Bank of America. Your line is open. Please go ahead.
Thank you good morning.
Good morning Ebrahim.
I guess just the first question Peter I don't capital when I look at the tangible common equity of the leverage ratio is around two 6% just give us a sense of how you're managing the balance sheet I'm assuming.
Liquidity could continue to come in as we think true.
The new stimulus that was announced back in February.
As a sense of how you're thinking about capital management, and how that's informing how you're managing the balance sheet.
Well, you're right Abraham we've.
We've.
Experienced or <unk> enjoyed.
10.2% deposit growth.
The past two quarters.
<unk>, obviously is extraordinary and we think that's of Great Testament to the brand but to your point.
Is putting some pressure on capital.
Risk based measurements are looking good and buy with stakeholder standpoint, I think everyone's very comfortable with that.
Right. The leverage ratio is is undergoing some stress with that level of growth and we're exploring a number of different options, because we would like to get that number kind of closer where we've run historically.
The 7% level.
And I think with with provisioning kind of reverting back to more traditional levels plus.
Earnings being what they are I think there's a good case to be made from an earnings stream standpoint that we could make that trip back with.
With the dividend in place, perhaps with the repurchase suspended.
To the extent that we wish to accelerate back into the repurchase program, who might take through other options and obviously, we just needed to get some sense on where deposits are going to head out. If you look at deposit growth for the quarter about 75% of that growth of 75% of of $1 billion $3 45.
Must be tied to stimulus types of.
Of activities, both on the consumer as well as commercial front so to the extent that that that inflow continues we'll have to think through the consequences. There for the extent that that slows and now we're on the downside of the backside of that inflow really people spending the money and hopefully businesses.
Investing that capital into our economy that could produce of different deposit outlook. So I think to answer your question of Abraham.
As it is on our radar screen, it's a meaningful question and I think really as we've gotten past I think the the the credit risk aspects of the pandemic, what we're really left with dealing with and trying to get our arms around our the liquidity aspects of the pandemic and then for the following.
Couple of quarters I think.
That's good perspective, Peter Thank you and just following.
Following up on your expense guidance for 285, just wanted to clarify.
For the first quarter or are you looking at our reported $98 9 million number or are you looking it up.
Core number extra people and $7 million.
It would be including the onetime.
One time items.
It would be including the ones, who many of them 98, one line.
Got it and just one last question in terms of.
Fee activity means for you.
These like tourism is opening up you're seeing a rebound in activity, what's what's your best sense in terms of just the second half of the year and you think about just the macro economy and the hospitality sector and the planning that's going on to kind of.
Get tourism up and running just give us a sense of what you expect Peter in terms of inbound tourism, what that translates into fee revenue of loan growth opportunity for the bank.
I think that.
Well, let me, let me start with the expectation.
I think that there was always a reasonable.
Forecast of about two thirds of return of visitors by the end of this year.
And I think as.
As things have played out that's probably potentially.
Somewhat.
<unk>.
And so we're already seeing in the numbers.
Activity rebounding faster than we would have anticipated.
As I mentioned in the formal remarks, the anecdotal evidence is frankly, even stronger than that and really the underpinnings behind that or one of the vaccine rollout as you know is working U S domestically.
And then when you think about Hawaii.
We are kind of back to being that safe destination again and.
I think consumers American consumers are desirous of of of taking a vacation of.
The options are somewhat limited because international destinations are not quite to where I think they would like to be and so.
Hawaii I think as of recipient and then when you think about lift which is a big component of demand or supply. If you will of visitors into this market.
The airlines are faced with a so-so business market likely for for a while to come now and then secondly, as I mentioned the international routes are just not what they used to be so a good amount of hardware is being repositioned into this market, which bodes well for us.
In terms of what that means to the P&L statement.
I think we will see a pretty.
Immediate impact to that in our transactional fees deposits.
T M and things like that the commercial side I am hopeful we will see a balance but I think that's going to be a little bit more back ended in terms of commercial loan growth, but probably I would suspect.
We can anticipate stronger commercial growth for the second half of the year versus the first half.
Well, thanks for taking my questions.
Yep.
Thank you and our next question comes from the line of Jeff <unk> with D. A Davidson. Your line is open. Please go ahead.
Thanks, Good morning.
Hey, Jeff.
Maybe just a quick housekeeping item out of the way the PPP balances I think you mentioned <unk>.
$745 million.
Could you out of mines that round I guess, what came on in round, two and maybe round one forgiveness just to try to track.
Of the coming and going.
Yes, we originated 200, roughly $260 million of new loans in 'twenty one.
And then what came off was about $43 million.
Mainly almost all of it in the 2020 vintage.
Got it okay I appreciate it thanks.
And then.
Maybe for Peter I thought that slide 27, which was interesting kind of breaking out that expense.
And not to oversimplify things, but.
If you were to overlay that on maybe the savings that she of cold from the physical.
Spend.
What would that compare and I guess, we're not even capturing potentially the revenue.
<unk> from the digital spend innovation any thoughts on how if you were to overlay some of those factors on that slide how that would look.
Yeah, I mean, I think it's tough to two.
To give hard forecast numbers on that Jeff.
But but I think conceptually it we think that.
Our investment into digital and digital marketing and operating efficiency.
Gives us an operating leverage opportunity of story, if you will.
Probably of.
The best we've had for quite some time. So we are just to give you some color.
We've seen.
In teller transactions decline over the past couple of years to below 50% of total consumer teller transactions, our total consumer trends deposit transactions.
And that's been picked up by.
Both our ATM as well as our mobile deposit platforms.
That has enabled us to.
Right size the branch platform as as we talked about last quarter with our in store branches coming down.
For the Commerce side is looking.
Equally as promising our loan products I can tell you are.
At a minimum generating 25% of their origination consumer origination.
Through our direct to consumer channels, and our account deposit or online deposit openings now represent almost 30% of overall consumer deposit openings. So.
We're seeing we're seeing the.
Both of the efficiency as well as the revenue opportunity and the trick from our standpoint is because these things are cheap.
To basically be able to make that investment and then keep your expense line relatively stable for taking out or building out other efficiencies.
Okay. Appreciate it thanks.
Yeah.
Thank you and our next question comes from the line of Andrew <unk> with Piper Sandler. Your line is open. Please go ahead.
Hey, good morning, everyone.
Andrew.
Just.
Clarification on the P. P P fees in the quarter do you of that dollar amount.
Yes, so kind of to break it down we had about 900000.
Fees that were accelerated due to the waivers in.
Forgiveness that occurred in the quarter.
And then in the net interest income kind of the base, we had about $1 8 million.
So in total there was a.
Yes.
$2 seven okay.
Then the pace of forgiveness do you think that's going to accelerate here. This quarter, just trying to get to a more of a reported margin and NII forecast.
Yes.
Expectation is it will pick up.
Last quarter, we had expected to be to have more forgiveness, but I guess with the new program. They were more focused on that at the SBA. So.
So we do expect second and third quarter to pick up and forgiveness.
Got it okay.
And then.
Tough forecast because.
We're dealing with borrower behavior as well as I think the SBA is pretty slim these days.
Yeah, no, it's certainly challenging to forecast out.
Just on then to start kind of on loan growth. It sounds like you expect to hear some see some commercial gains in the second half of this year is there anything that's giving you confidence in that right now and then what are are there any other types that you see continuing to increase noted construction of residential mortgage had been doing well.
Just.
Curious your thoughts there.
Sure. So construction had a good quarter it was up 8%.
CRE was flat C&I.
Net of PPP was down about 4%.
I would say overall.
The quarter for commercial was down but really production was not bad where all of what we saw was.
Somewhat of an outsized paydown environment, so our rolling four quarter paydowns of about $300 million per quarter, and I think we experienced something like $360 million in the first quarter. So a little outsized there.
I think.
Barring another referred some of that things should bounce back.
We look at our pipeline on the commercial front things look.
Got pretty good clarity for the next quarter or two.
And hopefully as things continue to pick up economically.
That will just add to that that opportunity bucket.
Got it.
Very helpful.
Thanks for taking the questions I'll step back.
Take care.
Thank you and our next question comes from the line of Jackie Bohlen with <unk>. Your line is open. Please go ahead.
Hi, everyone. Good morning good.
Mourning Jackie.
One of the catch up on expenses for a little bit and understanding you had some unique moving parts within the quarter.
About that 385 run rate and I know that includes the severance and the park rollout that you had in there the guidance, it's a little higher than it was last quarter.
So that was plus 1%.
Wondering if that's more of a factor of incentive comp, which I would take that to mean that the.
The outlook for the year is pretty positive or if that's more of a factor of other investments that youll be making.
It's all of that Jackie.
Thanks.
Yeah. So.
We made the decision pretty late just to go forward with the contactless rollout that that obviously is contributing to expenses.
Like like we would hope and anticipate we've got a full slate of investments to make down down the digital digital marketing and efficiency fronts.
But we.
We do see.
A much brighter outlook.
And even late last year and that has given rise to a higher accrual rate on incentives. So you're right. There and we also are experiencing about of plus million dollar.
Outcome on our commissions expense.
So as of as the mortgage business has just continued to be very strong for us that line item has come up as well.
So it's really expenses are higher but as we look at it generally for for good reasons.
Okay.
Thank you I think clarity.
And then just related to kind of your buyback comments on the capital discussion as you think about.
Atkins you might want to take if you decide you want to get back in queue.
For share repurchases by balance sheet growth is still pretty strong when you say youll evaluate options do you mean internal balance sheet management or might you look to diversify the capital stack.
Well I think all options are on the table.
We take a good amount of pride in the purity of our capital stack, So I would say that.
That would probably be the third area that we look at the first obviously is generating quality earnings to help build capital.
Which we feel good about and secondly.
Got some we've got some some longer term repos that could be taken out opportunity.
There are a bunch of inter or intra balance sheet items I'd say that are probably second.
Second shelf opportunities and then thirdly.
So if we just believe that.
We're going to be the beneficiary of outsized market gain.
Then obviously, we potentially would be looking towards.
Some form of additional capital potentially.
Okay great.
Great. Thank you very much.
Yes.
Thank you and our next question comes from the line of Laurie Hunsicker with Compass.
Compass point your line is open. Please go ahead.
Yeah, Hi, Thanks, good morning.
I wanted to go back to that for just a moment have looked for.
Comparable numbers for what was in the fourth quarter in other words of the P. P. P forgiveness.
900000 that was index.
For what it was in for Q and then also just the regular regular fee is it at a rate of one person I assume it was pretty close to a million dollars, but just if you have this true.
Yeah. So the accelerated fees were about 400000 in Q4 and about $2 million separately.
Embedded in the NII on interest income for the loans perfect. Okay. And then if you think about you know round, one and round two in terms of what's remaining.
What what is the actual amount of total of PPP fees that now remain in line and you know whatever you're doing around scale.
What's your bottom line.
Yes in total it's about $19 2 million remaining perfect. Okay, perfect and then.
I just wanted to ask you on branches.
And I apologize if I've missed it sort of your branch count is down to 63, and I know with the branch closures that was getting down to 50 can you just remind us where you are and the timing of closing that and then if there are any more one time expenses coming through of separation expense.
One of the occupancy line closure expense and is that baked into your $385 million guide.
Yes, as far as branch.
Optimization Laurie.
Not foreseeing any additional expenses at this point, we took a pretty large charge as you recall last quarter to bring down our in store branch network.
And theres nothing really of scale.
That I see on the right things things change so.
We'll see.
And then on the.
The.
<unk> expense.
Do you have additional baked in their teens.
Not really no I don't think so although we're always looking for.
Opportunities to rightsize areas that makes sense to rightsize and today, we've been very proud of the fact that we've not had any layoffs scenario of straight through the pandemic in and basically we're looking at.
Early retirement opportunities as really the path to efficiency.
At this point.
You know that.
That opportunity May may afford itself later this year I'm just not sure.
Okay, Okay, great and then I.
I guess, just a very high level question Peter.
We have seen a lot of recent M&A and this is an unusual time to be doing at whereby our stock currency. Obviously it can go up and we just haven't heard of refresh.
And your thoughts around M&A and so given that you have one of the strongest stock currencies of any of the regional banks out there of two seven times can you just refresh us on how you think about.
For bank M&A, and what your approach would be or if its unchanged.
Yeah, well, it's pretty unchanged Laurie we've.
We for.
For 20, plus years 21 years now have been pretty committed to building an organic growth story in markets that we know and understand well and have a great market presence and.
We think thats, that's resulted in a great valuation and basically.
The color, we're getting from that from our shareholders because of it.
Kind of like that concept of more of the same would be warranted. So yeah, I don't I don't foresee despite the strength of our stock I don't foresee that pushing us into a different M&A of Victor at this point now.
Okay, great. Thanks for taking my question.
Sure.
Thank you and I'm showing no further questions at this time and I'd like to turn the conference back over to Mr. <unk> for any further remarks.
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 further clarification of any of the topics discussed today. Thank you so much everyone.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Yes.
[music].
Yes.
Yeah.
[music].