Q1 2022 Central Pacific Financial Corp Earnings Call
We continue to advance our recently announced banking as a service mainland expansion strategy and remain very optimistic about the opportunity.
The new Fintech entity swell financial which we incubated last year was formed at the beginning of this year in February .
<unk> successfully completed a $10 million series a preferred funding round with CPI also participated in.
The swell money App with an integrated checking and line of credit product is on track to publicly launch in the summer with.
With CPB, serving as the bank sponsor utilizing our banking as a service technology platform.
We believe <unk> product will be unique in the market and that it addresses a large underserved group in the U S that we called drivers.
At the same time, we continued discussions with several other potential fintech partners for future banking on the service expansion.
We are seeing growing interest in this area, but we are being selective and truly collaborate with as we are focused on profitable and sustainable business models for both parties involved.
Finally, our digital transformation encompass all areas of our business and we continue to make progress on other digital enhancements such as a new Trust management system that went live at the beginning of this year.
Consolidated loan and deposit origination system initiative that will be developed throughout this year and other back office efficiency and automation initiatives.
Net care to talk about the Hawaii economy, and our strong position here is Kathryn <unk>, our executive Vice Chair Kathryn.
Thank you Paul I'll start by giving an update.
Along with most of the nation.
On Covid related restriction during the first quarter and pleased to be returning to the center.
Thanks, Charlie program people anticipate.
We have a negative COVID-19 , two <unk> and <unk>.
In March with that positive development, we are seeing a continued increase in visitors to the island.
Month to date April 2020, Q average air arrival com surpassed pre pandemic levels in April 2019.
All right.
Visitors.
International visitors to Hawaii, not yet retirement in a meaningful way.
Storage really pretty pandemic visitors from Japan made up a significant portion of bleed through to the economy. There is about one 6 million Japanese visitors each year accounting for about 16% of all visitors to the state.
Recently, Japan is starting to eat quarantine requirements, and it's going to be coming up in a couple of weeks, we are anticipating increased Japanese visitors.
Our company is also starting to resume business travel to Japan, and we believe this is an opportunity to differentiate the bank given our strong strategic relationships.
Our statewide unemployment rate continued to decline to four 1% in March <unk>.
Hello, the market remains very strong with our median single family home prices. According to a new record high of $1 $1 million in March 2022, which is up 21% the previous year.
Overall.
Economies remain on track.
Our asset quality continued to be very strong with non performing assets as John 70 basis points of total assets as of March 31st.
Additionally, total criticized loans were only one 5% of total loans.
Finally during the quarter, we had net charge offs in fiscal $2000.
I'd like to now turn the call over to art.
President and Chief Operation.
Alright.
Thank you Catherine.
In the first quarter are horrible portfolio decreased by $120 million or 2.4% sequential quarter.
Which was partially offset by PPP forgiveness date homes.
$47 million.
Our core loan growth was broad based across almost all loan categories.
As expected.
Additional mortgage loan growth slowed during the first quarter due to seasonality and rising interest rates.
This was offset by strong net growth in home equity outstanding balances of $39 million.
PPP forgiveness continues to progress well with only $44 million remaining on our balance sheet as of March 31.
Central Pacific Bank is proud to be recognized as Hawaii as leader in small business loans.
US being named by the SP, Hawaii office as vendor of the year category for.
For the 2021 fiscal year.
CPB originated more SBA seven loans in 2021, and the other major Hawaii payments combined.
We are pleased to support Hawaiian small businesses, a strategic pillar for CPB and continue our ambition to empower the people of Hawaii.
During the first quarter, we continued consumer unsecured auto purchases with our established vendors.
CGP comprehensive.
And diversify our portfolio.
Purchases during the quarter were all within our average credit limit and had a weighted average FICO score of 730.
Our net growth in maintenance consumer purchases purchase loans was $42 million in the first quarter.
As of March 31.
Little maintenance consumer unsecured auto purchase loans grew approximately 6% of total loans.
Both our mainland and Hawaii consumer portfolios continue to perform well.
We anticipate maintaining our total municipal portfolio, including commercial and consumer at around its current level in the near term.
With Hawaii steady economic recovery, we have that.
<unk> owned pipeline in all loan categories.
And we are expecting our loan growth trends to pick up further throughout the remainder of 2022.
Finally, after experiencing significant car deposit inflows into 2021 during the first quarter, we had slight run off with core deposits decreased by $37 million or 0.6% from the prior quarter.
Additionally, our average cost of total deposits in the first quarter held steady at just six basis points.
I'll now turn the call over to David Morimoto, Our Chief Financial Officer, David.
Thank you.
Net income for the first quarter was $19 4 million or 70 cents per diluted share.
An increase of $1 4 million or six cents per diluted share from the same quarter a year ago.
Return on average assets in the first quarter was one 6% and return on average equity was 44, 4%.
Net interest income for the first quarter was $59 million, which decreased by $2 2 million for the prior quarter due to less PPP fee income as the forgiveness process lifestyle.
Net interest income included one $9 million in PTC net interest income and net lowest feeds.
Third to $4 7 million in the prior quarter.
At March 31, and earn that PPP fees was one 7 million.
Net interest income during the first quarter also included.
A million in nonrecurring interest recoveries.
The net interest margin decreased to 297% in the first quarter compared to 3.08% in the prior quarter.
The NIM normalized for PPP and interest recoveries was 285% compared to $2 87 in the prior quarter.
Our balance sheet remains slightly asset sensitive and we therefore anticipate our margin will trend up with further fed interest rate hikes.
First quarter other operating income was $9 6 million compared to $11 6 million in the previous quarter. The decrease was driven by lower mortgage banking and bank on life insurance income.
Other operating expense for the first quarter was $38 2 million, which was a decrease from the prior quarter, which included several large one time expenses.
Additionally, in the first quarter total salaries and benefits trended due to seasonal and market related adjustments, including lower commissions.
Setup cost of patient accruals as well as less deferred compensation expense.
Forward, we expect that quarterly recurring other operating expense will be in the $40 million to $42 million range.
We are executing on our plan to consolidate additional branches. This year with two scheduled schedule in the second quarter and another in the third quarter.
The total pull forward on your expense savings from the three branch consolidations is estimated at zero $9 million.
The efficiency ratio decreased to 63, 2% in the first quarter due to lower other operating expenses.
We remain focused on driving positive operating leverage with our strategic initiatives to continue to improve efficiency.
At March 31, our allowance for credit offset was $64 8 million or $1, two 6% of outstanding loans, excluding PPP loans.
In the first quarter, we reported $3 2 million credit to the provision for credit losses.
Continued improvements in the economic forecast and our loan portfolio.
The effective tax rate decreased slightly to 23, 7% in the first quarter.
Going forward, we expect the effective tax rate to be in the 24% to 26% range.
As a result of market interest rates rising or available for sale investment securities portfolio, we'll get to a larger unrealized loss position.
Which is reflected in accumulated other comprehensive income and total shareholders' equity on our balance sheet.
To mitigate further portfolio valuation impact, we transferred $330 million in securities to held to maturity during the first quarter.
Additionally, we executed on a pay fixed received floating two year forward starting interest rate swaps on an additional $115 million of investment securities.
Our capital position remains strong and during the first quarter, we repurchased roughly 235000 shares at a total cost of $6 7 million.
Or an average cost per share of $28 65.
Additionally, our board of directors declared a quarterly cash dividend of <unk> 26 per share, which will be payable on June 15 to shareholders of record on May 31.
I will now return the call to Paul.
Thanks, David Central Pacific had a solid first quarter and continues to be well positioned with strong liquidity capital and asset quality, we continue to execute on our strategic initiatives and believe that 2022 will be another pivotal year for the company supported by a good economic.
With much optimism, we are pushing boldly forward on our parallel strategy to continue to grow and expand market share in Hawaii and through our mainline expansion starting with the introduction of swell.
On behalf of our management team and employees I would like to personally. Thank you for your continued support and confidence in our organization. At this time, we will be happy to address any questions. You may have thank you back to you with you.
Yes.
Thank you think you'd like to ask a question. Please press star followed by one on your product.
Pat.
Joe Your question. Please press star followed by Jay.
Our first question today comes from David <unk> of Raymond James Your line is now open.
Hey, good morning, everybody.
Hey, David.
I just want I wanted to touch on the growth outlook could you maybe walk us through some of the drivers that you're expecting with regards to the accelerating loan growth commentary that you had in the prepared remarks, what segments, you're seeing the most strength.
How much you would expect to come from Hawaii versus the U S. Mainland and then just whether you're expecting any additional loan purchases to supplement the organic growth.
Sure I'd be happy to do that David.
You can see we had a pretty respectable first quarter on growth, but let me have our know Martina.
Take that question Arnaud, Thanks, Paul and good luck.
Morning.
David So we're.
We are pretty optimistic about our loan growth for the year.
I think the drivers right now for us.
Whether it be construction.
HELOC commercial mortgages as well.
The consumer consumer book.
We're seeing.
Nice growth.
On the Hawaii side, but also continuing our purchases on the mainland with our strategic partners.
So I think both of those areas are going to drive growth for us this year.
With regard to residential I think we all know that the interest rates have increased and Thats certainly has impacted the.
The refi market, that's basically drying up I think we saw appeal of that refi market in the first quarter, but we expect as we move forward.
Thats going to dry up and so for Ramsey.
We're looking at.
Looking probably in the near term normalized levels of production per quarter.
$150 million to $160 million range.
And we're optimistic about that just because of our purchase market strength.
No David.
We have.
Joining ventures with developers.
As well as a pretty strong position with the route to market here in Hawaii.
All in all I mean, we are still.
Fermi.
Sure.
Mid to high single digit growth.
For loans this year.
Okay. That's helpful and does that include any additional purchases in that.
Yes, we are absolutely going to be the corporate uses the purchases is really.
I know that it is purchases, but it has become part of our.
Our business model.
We continue to look at these partners.
Strategically.
We will continue to make purchases for auto auto loan and unsecured loans.
Going forward.
To the extent that we believe it helps to augment.
Diversification in our loan portfolio as well as yield.
Absolutely.
And maybe just switching gears to deposits could you maybe.
Talk a little bit about your outlook for deposit growth going forward and maybe some thoughts into what drove the sequential decline was it just seasonal tax payments.
PPP usage.
And again, just the overall expectation for deposits and then just a little bit on the shock of digital account, it's great to see continued growth there, but any commentary about how balances are trending and cross selling initiatives, thus far would be helpful.
Yes sure David.
So with regard to deposits actually we had we had some.
A few larger deposits.
Related to a few customers that came in in the fourth quarter, we actually thought it was going to leave in the fourth quarter, but it actually carried over to the first quarter and so that really was the reason why we had.
Moderate.
A decrease in deposits all in all.
Overall, we're still seeing.
Fairly.
Robust activity in deposits.
While small we.
We will have to see how the market dynamics play out this year, we're still anticipating mid <unk>.
Single digit Covid.
Deposits.
With regard to shop Com.
It's probably still too early for us to talk about balances just because you guys.
No.
As we.
Onboard and activate these.
These almost 4000 customers that opened up the account.
Paul mentioned earlier.
60% of those customers are new to the bank as we as we work with them to activate.
There are accounts.
Debit card usage direct deposit.
AC type transactions.
<unk>, the account or for mobile deposits et cetera.
We're going to start to see some of those balances increase over that.
Over time.
I would just say that I'm pretty needs I think we are pretty pleased with the progress we've made.
At this point I can say that all the accounts that we have.
70% are fairly active meeting and we define active by having multiple type transactions, whether it's debit card direct deposit.
Using using a person to person type IP minutes out functionality. So.
Good progress more to come in future quarters.
That's terrific.
And then maybe just touching on the banking as a service initiative could you just walk through maybe the timeline.
And where we are we've got the funding that that one was just completed I'm just curious where we are in the launch what the next steps are and then just any expectations that you might have for that program and when we might start seeing some contribution.
Sure David So we're very pleased with the progress, we're making on banking and our banking as a service initiative, especially around our investment and our sponsorship with swell.
That in Colorado, and the mobile App the application architecture continues to be built on it.
So far on time on schedule, and we're hoping to see a launch.
This summer.
We've had an opportunity.
The past several months.
Take a really hard look at the credit risks.
And again, if you recall at our last call last quarter, we talked about the competitive advantage that we have because of our relationship with management at swell and also elevate and now are.
Additional investor called Park City management, and I think it's a lot of that interaction that allows us to be very agile and yet take up very risk adjusted approach.
Wanted to David just once again touch on.
Some of the risk adjusted features.
We have been able to institute.
For our swell offering because I think this is a really important point, how CPB, we will be able to iterate and learn and test as we start to scale it David yes.
Thanks, Paul.
So thanks David.
Well Paul is referring to is.
Again, we think we've built some rather unique with swell site agile and with LLP. So.
There will be unsecured lines of credit as part of the swell program, it's called 12 credit as the product.
But <unk>.
It's really the underwriting or the swell credit by unsecured lives, but what's unique is LLP is providing central Pacific with a credit guarantee.
Elevate is absorbing 100% of the credit losses on the swell lines of credit at.
We've worked with our accountants to.
Figure out net colony for the swell lines of credit so while that lines of credit will be on central Pacific outlet sheet Central Pacific will not record any net charge offs and we will not have students worldwide.
Allowance for credit losses for those thoughts swell swell loans.
So again, we think we negotiated something unique elevate is providing 100%.
They are also providing a cash deposit that will.
At Central Pacific Bank.
Again, I think we've done.
Unique and something that is going to be very valuable to the central Pacific moving forward.
David This is Paul again, I just wanted to also add.
As we again touched on last quarter, we invested a total of $2 million.
And to swell.
It is treated under the cost method of accounting on our books.
Been able to demonstrate that.
That we don't have control of that entity.
I'm happy to also report that swell.
Being there.
<unk> control they are coming in less than.
And then what we had originally projected so there is absolutely no issue on the investment amount that we carry on our balance sheet. So again. The net is we're very pleased with that progress and so thats the swap component David and naturally we also have.
A number of new Fintech partnerships, where we are affiliated with them and we will be working with these fedex to launch certain services.
And we can touch on that later, if you're interested thank you.
That's helpful. Thank you.
Sure.
Our next question comes from Andrew Liesch of Piper Sandler.
Your line is open Andre.
Hey, good morning, everyone.
Just wanted to.
Talk about the margin here, you mentioned, a little bit asset sensitive.
But.
Maybe some more detail there with this with the expectation that the fed is going to be raising 50 basis points.
Next month.
How do you is there can be a benefit right away from that.
What are you expecting with.
Deposit beta is there any sort of loan pricing, maybe if we get another 50 basis points shortly thereafter.
Yes.
David.
As we stated.
Balance sheet is slightly asset sensitive in a 100 basis point shock net interest income increases by roughly 5%.
Obviously, there is a lot of assumptions embedded in there the largest team the moderate of the indeterminate maturity deposits. We think we gave you a little bit conservative on the modeling there we're modeling a.
The weighted average.
20%.
Deposit beta.
We're hopeful that we don't need to reprice that quickly, especially in the early goings of the rate increases.
Got it okay.
That's helpful and then.
I guess what.
It sounds like the.
Rising mortgage rates have kind of curtailed production there, but you still have some other tailwind how are you balancing.
I guess retaining some of the mortgages on the balance sheet versus selling them as this one.
$2 million or so that you had in the first quarter for gain on sale.
Previously even that number going forward.
Yes, Andrew.
Historically, the company has retained roughly 50% of originations of sort of remaining.
We're trying to stay on that path. It will result.
Gain on sale, probably coming down a bit maybe to be untrue.
Two 1 million per quarter level.
But we are trying to China stay that outlet as we've discussed.
We came in more with mortgage rates now.
Getting above 5% should we retain more of the balance sheet.
But we're kind of trying to stay of course is as we all know.
Residential mortgages is one of them.
Yes.
Yes.
One of the assets that when rates decline.
If prepays rather quickly.
One of the most negatively convex assets on our balance sheet. So while you may enjoy a 5% yield for a period of side of it it can be taken away from you rather quickly.
Kind of trying to stay the Clarks 50 50 right.
Okay. Okay.
That's it for me I'll step back in the queue. Thanks.
As a reminder, if you'd like to ask a question. Please press star.
Followed by one on your telephone keypad now.
Our next question today comes from Laurie Hunsicker Compass point.
Please go ahead.
Hi, Thanks, good morning.
Hoping we could just go back to the November here can you refresh us in terms of where you are.
Yes.
Hawaii and mainland banks, and how you're thinking about growing that.
Hi, Laurie this is mark.
No.
<unk>.
All right.
Good morning, Laurie I think I would say that.
And we do have.
Some some transactions in the pipeline for snakes.
We're looking selectively at we'd be glad to.
Two.
Yes.
How we can how we can grow the snake portfolio over the year, while balancing other other product categories in other loan categories.
As of.
And as of the end of the first quarter were about $106 million.
It's Nathan Thats, a combination of Hawaii and the mainland.
I would say that it's not a it's not going to be a march.
A big driver for growth.
But we would we would look selectively base.
Based on risk and yield.
Got it Okay I just wanted to make sure I heard that right. You said you were 166 total is that correct.
156.
156, okay.
So that's down pretty sharply I heard you guys at $192 million at the end of the year.
Is that.
Laurie I think that 156 is just the mainland I think that other number you just referenced is the combination of mainland and Hawaii.
I can circle back with you on the detail.
Perfect Perfect and then.
Yes.
To clarify headquartered.
Alright, let me clarify so being in at $1 56 and.
In Hawaii.
About $58 million.
Excellent.
That's helpful.
Okay.
So wow, so that said that grow pretty sharply.
Okay.
And then on the consumer side.
Obviously, you've got a lot going on I do want to follow up on spot.
Can you help us think about it I mean your credit is remarkably clean the only area really that we're seeing charge offs is on the consumer side.
Which bucket of that tumor are those charge offs coming from.
And how are you thinking about that specific bucket or buckets.
Hi, Laurie this is Anna.
And I know the bucket for the consumer.
Or is it.
Its primarily in our unsecured alright, there is a peak coming from.
Mainland purchase portfolio.
And I'm, okay with that.
Yeah, So first quarter mainland comprise about 41% at that time.
I will now.
Thanks, Mark and.
And about 59% coming from that.
Thank you very much.
Okay, Okay and.
Certainly your I mean, your unsecured consumer book is very very high FICO versus.
You know, what you're planning to do with well.
Thank you Eric can you just give us a refresh and I have a couple of questions around that.
Had your initial equity investment in the small elevate is $1 5 million and I think Tom mentioned 2 million I don't know if that's your mindless rounded.
You guys decided to invest another half a million.
Do you have any color on that.
Yes.
<unk>.
This is Paul Laurie so.
It comprises a $1 5 million in what we refer as the sweat equity in a lot of the costs that we incurred.
While we incubated as well and there was an additional half a million dollars in cash.
As we incorporated the entity so in total it's $2 million.
Got it got it okay and.
Is there any refresh in terms of how much you plan to put on the book.
This year, how youre thinking about it next year in terms of Timberlands and then also in terms of where the FICO buckets.
How are you thinking about that sure.
Yes so.
<unk> had an extensive discussion with our board.
We want to take a very risk adjusted approach and how we launched well and so our budget.
Projections again that was approved by our board as well as something south of $8 million in terms of loan originations by swell in this current fiscal year.
Matt.
That represents a cap for us at this time, where we will be able to again iterate learn make adjustments.
We will have weekly dashboard to look at the origination payment default and so I think it's being structured quite well to make sure that we manage credit risk.
And Thats and Thats the game plan for the current year and going forward.
We'll see how things play out this current year.
It's a very.
Dynamic environment today with rates the war in Ukraine, and so forth and so on and we have to go slow and iterate and learn.
Yeah, No I love hearing you're calling so and are you still targeting FICO scores in the range of 650 or do you have a refresh on that for the $8 million.
Yes, so laurie.
Again, we're not going subprime at all we're going near prime and above but.
All I hesitate to talk about FICO scores, because elevate has a very robust.
Credit analysis approach and where they utilized 16 different credit factors and and not only that they have close to over a decade of experience in.
Naturally doing subprime, but this is an endeavor.
Were going more near prime in the above which we call. The Strivers group and we think that there is a huge market opportunity in the mainland U S. So.
So once again I don't really want to pigeonhole ourselves with one particular FICO score.
Okay.
Okay.
I mean, I guess I would just say that.
People, obviously break differently in their definition of subprime I tend to be very very conservative I think anything south of six six is that Brian but I understand.
You're coming from with near near Prime I mean, I guess some of my concern is that elevate is all of $90 million in market cap with all of the $100 million in tangible common equity right now.
Credit guarantee if you all are putting on a substantial amount of well.
Elevate loan doesn't isn't.
There is potential there so I guess.
Okay.
Maybe Paul if you can help us understand a little bit at the $8 million performed as you expected to then what is the what is the projection for what you potentially would tail in 2023.
I mean right now.
Number two.
2023, and so I'm, just trying to understand that a little bit.
Sure sure so Laurie first thought.
On the credit default swap that David.
Explained earlier the arrangement that we have with elevate and currently is that they literally put in ace.
Deposit.
With our bank, where we have a priority interest in a preferred interest in and so regardless of their valuation or their financial condition.
Under the terms of that agreement, we actually secure.
6% credit default deposit from them with the preferred interest on it so.
It's the perfect scenario for this current year as we again iterate and learn on how we do this now.
This is an area as we go after the Strivers market. This has not really been widely done by any fintech or financial institution in this.
Manner, and and given the existence of weekly dashboards, where I will personally be taken a close look at we won't make course corrections and pivot as necessary. So again.
I feel that it is a very prudent and risk adjusted approach that we have in mind today.
I also wanted to just mentioned that I think for most community banks today, you have to get into that field.
How we collaborate with Fintech I think we're fooling ourselves because this is the direction. The world is going to even here in Hawaii and so we've been very fortunate again with the relationship with well and elevate that we can really work together and be very transparent with each other and <unk>.
Coming up with.
Really good risk calculated approach as far as 2023 is concerned.
I really don't want to go there yet Laurie.
I believe that we need to have more time as we go live with the <unk> platform. This summer and as we iterate and learn we will have a better view on how we want to scale. It up in 2023, and we will be happy to talk about that in subsequent quarters.
Okay. That's great I appreciate all the color and just one more question David over to you.
Non interest income can you can you just.
Refresh us a little bit on your NSF fees.
How youre thinking about that going forward is that obviously gets a little bit of an industry Hot button.
Sure sure sure Laurie.
NSF fees for Cps.
Not overly dependent on NSF vehicle.
Last year, it totaled $3 7 million.
And in the first quarter was $1 1 million.
Is ramping up as activity returns to normalcy.
But I think relative to some of our peers.
<unk> reliant on NSF fee income.
Our strategy going forward is to stay the course for now we're obviously watching.
What's happening with the CFPB.
But.
But what we've heard.
With regard to the CFPB is their focus on NSF may be misplaced.
It's.
A feature that consumers like.
And one in the amount of complaints going into the CFPB are really low relative to other other other types of complaints. So so anyway, we're staying the course for the time being but we're watching what's happening with the CFPB, we're watching what's happening.
With our industry peers.
Great. Thanks for taking my question.
Thanks Laurie.
We have a follow up question from Andrew Lee.
Please go ahead.
Hey, Thanks for taking the follow up here.
Just on the share repurchases and capital right now obviously the.
<unk> had hit the TCE ratio, but regulatory capital ratios are all pretty strong.
What should we be thinking about the buyback here similar pace, what we have seen the last couple of quarters or.
How do you think we should adjust our outlook there.
Okay, Andrew it's Scott.
David.
What I'll say is we're obviously committed to the quarterly cash dividend that will continue the share repurchase side is going to be a little bit more of a variable. It's always it's always going to be at management's discretion and it's going to be a function of stock price.
<unk>.
Our other.
Options are other other options for uses of capital.
So I would say, it's going to be a little more flexible than it has been in the past on the repurchase plan.
Okay.
Very helpful. Thanks for taking the follow up.
Thanks, Andrew.
And finally, we have a follow up from David Thanks, Scott Your line is open.
Hi, Thanks, just wanted to follow up on Lauren's line of questioning just this.
Kind of getting the full taken.
On the fee income front.
Taking that kind of 800 to a million on the mortgage side some of the NSF impacts like you talked about just curious.
I know you guys have some fee initiatives in place just curious how you think about that fee income line as a whole and.
How you would expect the progression over the course of the year.
Yes, David it's David.
The first quarter was a down quarter, we talked about mortgage banking income.
Then also the bully.
Have some bully policies that are underground that are impacted by whats happening in the equity and fixed income markets.
Going forward, we're thinking we want to be roughly in the $10 million per quarter range.
And we do have some key initiatives.
The wealth management area.
That's an area that's been a little difficult with the volatility, but we have some new business development.
Initiatives in the wealth management area that hopefully can offset the market volatility and actually grow fee income in that area.
And then the other thing Thats going on as Paul mentioned that we are working on some other banking as a service fintech opportunities some of those.
We will be fee opportunities versus net interest income opportunities and so we look forward to sharing more on that at the appropriate time in the future.
Okay. That's helpful. Thanks, everybody.
Thank you we have no further questions in the queue. So I'd like to turn the call back to Paul <unk> for closing remarks.
Thank you very much for participating in our earnings call for the first quarter of 2022, we look forward to future opportunities to update you on our progress.
Thank you.
This.
Today's call. Thank you very much gentlemen.
Now disconnect your lines.
Yes.