Earnings call transcript: Bank of Hawaii Q2 2025 reports strong EPS, stock dips

Bank of Hawaii Corporation (BOH) reported its financial results for the second quarter of 2025, showing a slight beat on earnings per share (EPS) but a miss on revenue expectations. The company posted an EPS of $1.06, surpassing the forecast of $1.05, while actual revenue came in at $174.48 million, below the expected $177.92 million. Despite the minor EPS beat, the stock saw a decline of 5.21% in regular trading, closing at $65.69, with a slight recovery in pre-market trading. According to InvestingPro data, the bank, currently valued at $2.46 billion, has maintained dividend payments for an impressive 54 consecutive years and appears undervalued based on its Fair Value analysis.

Key Takeaways

• EPS exceeded expectations by 0.95%.
• Revenue fell short by 1.93%, impacting market sentiment.
• Stock price dropped by 5.21% post-earnings.
• Net interest margin expanded for the fifth consecutive quarter.
• Hawaii’s employment and visitor industry show positive trends.

Company Performance

Bank of Hawaii reported a net income of $47.6 million, with a diluted EPS of $1.60, marking an increase of $0.09 from the previous quarter. The bank continues to benefit from a growing net interest income, which increased by $3.9 million. Trading at a P/E ratio of 17.16x and offering a dividend yield of 4.26%, the company maintained a strong Return on Common Equity (ROCE) of 12.5% and a Tier 1 Capital Ratio of 14.2%. InvestingPro analysis reveals several more key metrics and insights available to subscribers, including detailed profitability scores and comprehensive financial health assessments.

Financial Highlights

• Revenue: $174.48 million, down from the forecast of $177.92 million.
• Earnings per share: $1.06, slightly above the forecast of $1.05.
• Net interest margin expanded for the fifth consecutive quarter.

Earnings vs. Forecast

Bank of Hawaii’s EPS of $1.06 beat the forecast by 0.95%, a modest surprise compared to previous quarters. However, the revenue miss of 1.93% weighed on investor sentiment, contributing to the stock’s decline.

Market Reaction

Following the earnings announcement, Bank of Hawaii’s stock price fell by 5.21%, closing at $65.69, but showed a minor recovery of 1.48% in pre-market trading. The stock’s movement reflects investor concerns over the revenue miss and its potential implications. Year-to-date, the stock has declined 5.9%, while maintaining an overall "FAIR" financial health rating according to InvestingPro’s comprehensive analysis framework.

Outlook & Guidance

Looking ahead, Bank of Hawaii anticipates its net interest margin to reach 2.50 by the end of the year and expects modest loan growth. The bank plans to continue growing its securities portfolio and anticipates potential repricing of CD rates by 15-25 basis points. The full-year tax rate is expected to range between 21-22%.

Executive Commentary

Peter Ho, CEO, emphasized the bank’s strategic market share growth, stating, "We’ve been successful on both short and long term basis, methodically building market share." CFO Brad Sattenberg highlighted the bank’s resilience in the current interest rate environment, noting, "We are well positioned to navigate any changes in the current interest rate environment."

Risks and Challenges

• Revenue shortfall could impact future earnings.
• Potential interest rate fluctuations may affect net interest margins.
• Economic conditions in Hawaii and broader markets could influence performance.
• Competition from other banks may pressure deposit pricing strategies.

Q&A

During the earnings call, analysts inquired about the bank’s deposit strategies and commercial loan growth. The management reiterated their focus on growing non-interest-bearing deposits and mentioned that commercial loan growth was flat this quarter. They also addressed questions about potential securities repositioning, which is not currently planned. For deeper insights into Bank of Hawaii’s financial position and future prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers detailed analysis of over 1,400 US stocks.

Full transcript - Bank of Hawaii Corp (BOH) Q2 2025:

Conference Operator: Good day and thank you for standing by. Welcome to the Bank of Hawaii Corporation’s Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Chang Park, Director of Investor Relations. Please go ahead.

Chang Park, Director of Investor Relations, Bank of Hawaii: Good morning and good afternoon. Thank you for joining us today for our second quarter twenty twenty five earnings conference call. Joining me today is our Chairman and CEO, Peter Ho President and Chief Banking Officer, Jim Polk CFO, Brad Sattmerk and Chief Risk Officer, Brad Harrison. Before we get started, I want to remind you today that today’s conference call will contain some forward looking statements. And while we believe our assumptions are reasonable, the actual results may differ materially from those projected.

During the call today, we’ll be referencing a slide presentation as well as the earnings release. Both of these are available on our website, poh.com under the Investor Relations link. And now I’ll turn the call over to Peter.

Peter Ho, Chairman and CEO, Bank of Hawaii: Thanks, Chang, and good morning or good afternoon, everyone. Thanks for your interest in Bank of Hawaii. The 2025 was another solid quarter for the bank. Earnings per share advanced for the fourth consecutive quarter, net interest income and net interest margin expanded for the fifth consecutive quarter, as our margin reversion continues towards more historical levels. Expenses were well controlled, credit remains pristine, capital advanced to 14.2% on a Tier one basis, while ROCE at 12.5%.

I’ll begin by quickly reviewing our core and long standing operating strategy, and then touch on conditions in our core Hawaii market. I’ll then kick it over to Brad Sherison to discuss our credit profile, and then Brad Sattenberg will expand a bit on the financials, and this is his first earnings call as officially our new CFO. As I think most of you know, Bank of Hawaii has a unique business model. Fundamentally, we lean into a unique marketplace in which four locally headquartered banks or more than 90% of the market’s FDIC reported deposits. We’ve built a fortress market position by leveraging a best in market brand position, which enables us to deposit price effectively.

This cost advantage has historically allowed us to generate strong returns on a superior risk adjusted basis. We’ve been successful on both and long term on both a short and long term basis, methodically building market share. For several quarters now, we’ve been successful in stemming deposit remix from lower or no yield deposits to higher yielding deposits, while holding overall deposit levels relatively stable. This has helped us bring down both our cost of interest bearing deposits and total cost of deposits. Concurrently, our fixed assets have been remixing into higher yielding earning assets.

In the quarter, $572,000,000 in fixedvariable assets cash flowed off at a roll off rate of 4% and into a roll on rate of 6.3. It is a slowing of deposit remix matched with the continued yield accretion in the fixed asset cash flow that has largely enabled us to drive up both net interest margin and net interest income for five quarters now. Assuming rates hold, we would anticipate that this trend will continue approaching more historic NIM levels, albeit with substantially higher earning asset levels than previously. Switching to local market conditions, here you can see that the employment picture in Hawaii continues to outperform the broader US economy. The visitor industry remains solid with visitor expenditures up 6.5 year to date, and arrivals up 2.8% through May.

This growth is being driven by The U. S. Continental market, both East and West and offset partially by lower international performance out of Japan and Canada. RevPAR continues to perform consistently. Residential real estate in the islands remained stable, with single family home prices rising modestly, while condo prices were off 0.5% year to date.

And now let me turn the call over to Brad Sheridan to talk about credit. Brad?

Brad Harrison, Chief Risk Officer, Bank of Hawaii: Thanks, Peter. The Bank of Hawaii is dedicated to serving our community, lending in our core markets where our expertise allows us to make sound credit decisions. Most of our loan book is comprised of long standing relationships with approximately 60% of clients in both commercial and consumer having been with us for over a decade. This combination has significantly contributed to our strong credit performance over the years, resulting in a loan portfolio that is 93% Hawaii, 4% Western Pacific, and just 3% Mainland, where we support our clients who conduct business both in Hawaii and on the Mainland. As I review our credit portfolio’s second quarter performance, you will see that it has remained strong and consistent with recent quarters.

Our loan book is balanced between consumer and commercial, with consumer representing a little over half of total loans at 56% or $7,900,000,000 We predominantly lend on a secured basis against real estate. 86% of our consumer portfolio consists of either residential mortgage or home equity, with a weighted average LTV of just 48% and a combined weighted average FICO score of 800. The remaining 14% of consumer consists of auto and personal loans, where our average FICO scores are 731 and 760, respectively. Moving on to commercial, our portfolio size is $6,100,000,000 or 44% of total loans. 72% is real estate secured with a weighted average LTV of only 55.

The largest segment of this book is commercial real estate with $4,000,000,000 in assets, which equates to 29% of total loans. Looking at the dynamics for real estate in Oahu, the state’s largest market, a combination of consistently low vacancy rates and flat inventory levels continue to support a stable real estate market. Within the different segments, vacancy rates for industrial, office, retail, and multifamily are all below or close to their ten year averages. Total office space has decreased about 10% over the past ten years. This has been driven by conversions primarily to multifamily or lodging.

This long term trend of office space reduction, along with return to office movement, has brought the vacancy rate almost back to its ten year average and well below national averages. Breaking down our CRE portfolio, it is well diversified across property types, with no sector representing more than 7% of total loans. Our conservative underwriting has been consistently applied, with all weighted average LTVs under 60%. Overall, it’s a granular portfolio with low average loan sizes. And our scheduled maturities are fairly evenly spread out, with more than half of our loans maturing in 2030 or later.

Looking at the distribution of LTVs, there isn’t much tail risk in our CRE portfolio. Only 1.3% of CRE loans have greater than an 80% LTV. Turning to C and I, which comprises 11% of our total loans, you will notice that the book is extremely well diversified across industries with modest average loan sizes. Additionally, only a small portion of these loans are leveraged. Turning to asset quality, credit metrics remain stable and the portfolio continues to perform well.

Net charge offs were just $2,600,000 at seven basis points annualized, down six basis points from linked quarter and three basis points lower than a year ago. Non performing assets were up one basis point from the linked quarter to 13 basis points and just two basis points higher than a year ago. Delinquencies ticked up by three basis points to 33 basis points this quarter and just four basis points higher than a year ago. And criticized loans dropped by two basis points to 2.06% of total loans, which is 17 basis points lower than a year ago. And the vast majority, 78% of those criticized assets, are real estate secured with a weighted average LTV of 54%.

As an update on the allowance for credit losses on loans and leases, the ACL ended the quarter at $148,500,000 up $800,000 for linked quarter. The ratio of our ACL to outstandings ticked up one basis point to 1.06%. I will now turn this over

Brad Sattenberg, CFO, Bank of Hawaii: to Brad Sattenberg for an update on our financials. Thanks Brad. And before I jump into our financial results for the quarter, I’d like to take a moment to recognize my predecessor, Dean Shigemura and thank him for his outstanding leadership, mentorship and invaluable contributions to the bank over the past twenty six years. I also want to congratulate him on a well deserved retirement. Now moving into the financials for the quarter, we reported net income of $47,600,000 and a diluted EPS of $1.6 an increase of $3,700,000 and $09 per common share compared to the linked quarter.

These increases were primarily driven by the continued expansion of our net interest income and net interest margin, which increased by $3,900,000 and seven basis points respectively. As Peter mentioned, this is the fifth consecutive quarter that we expanded both our NII and NIM. A primary reason for this improvement is our fixed asset repricing, whereby cash flows from our fixed rate assets are rolling off at lower interest rates and being reinvested at higher current rates. During the quarter, this repricing contributed approximately $3,200,000 to our NII. Partially offsetting this benefit is the deposit remix, which represents deposits shifting from non interest bearing and low yielding deposits to higher cost deposits.

The deposit mix shift has moderated during the past several quarters. And during the second quarter, the mix shift was $59,000,000 and had a $500,000 negative impact on our NII. This compares to a mix shift of $37,000,000 during the first quarter and $448,000,000 during the same period last year. During the quarter, the cost of our deposits remained stable at 160 basis points compared to the linked quarter and declined by 21 basis points compared to the same period last year. Our beta on the recent on this recent downward cycle is currently at 29%.

During the quarter, our cost of deposits declined by our cost of CDs declined by 15 basis points and we believe that an opportunity still exists to continue to reprice down these deposits. During the next three months, over 51% of our CDs will mature at an average rate of 3.61% and we anticipate that the majority of these CDs will reprice lower. With rate cuts forecast for later this year, we are comfortable with our balance sheet position in our fixed asset ratio of 55%. And with $7,300,000,000 of floating rate assets and $10,100,000,000 of interest rate sensitive liabilities, we believe that we are well positioned to navigate any changes in the current interest rate environment. We are also closely monitoring our swap portfolio.

At the end of the quarter, we had $2,200,000,000 of active pay fixed receive float interest rate swaps at a weighted average fixed rate of 4%. Dollars 1,500,000,000.0 of these swaps are hedging our loan portfolio, while $700,000,000 are hedging our AFS securities. In addition, we have $600,000,000 of forward starting swaps at a weighted average fixed rate of 3.1%. 200,000,000 of these swaps would come active later this year, while the remaining $400,000,000 will start in the 2026. Non interest income increased to $44,800,000 during the quarter compared to $44,100,000 in the linked quarter.

Non interest income during the current quarter included a one time gain of approximately $800,000 related to a BOLI recovery, while the linked quarter included a $600,000 charge related to a B2B conversion ratio change. Adjusting for these non core items, non interest income declined by $700,000 due to lower customer derivative activity, partially offset by an increase in earnings in connection with our Trust Services business. We are forecasting that noninterest income will be between $44,000,000 and $45,000,000 for the remainder of the year. Noninterest expense was $110,800,000 compared to $110,500,000 during the quarter prior quarter. Included in non interest expense this quarter was a severance related charge of $1,400,000 while the linked quarter included seasonal payroll taxes and benefit expenses of $2,800,000 and the FDIC special assessment reimbursement of $2,300,000 Excluding the impact of these items, non interest expense was down $600,000 compared to the prior quarter.

This change was primarily due to lower incentive compensation and medical insurance charges, partially offset by our annual merit increases that took effect in early April. The percentage increase in forecasted expenses remains unchanged at 2% to 3%. During the quarter, recorded a provision for credit losses of 3,300,000 and our effective tax rate was 21.2%. The decline in our tax rate during the year is being caused by higher tax exempt investment earnings as well as certain discrete items. We now expect our tax rate for the full year to be between 2122%.

Our capital ratios remained above the well capitalized regulatory thresholds during the quarter with Tier one capital and total risk based capital improving to 14.215.2% respectively. And consistent with the linked quarter, we paid dividends of $28,000,000 on our common stock and $5,300,000 on our preferreds. We did not repurchase any shares of common stock during the quarter under our repurchase program. As a reminder, 126,000,000 remains available under the current plan. And finally, our Board declared a dividend of $0.70 per common share that will be paid during the third quarter.

Now I’ll turn the call back over to Peter.

Peter Ho, Chairman and CEO, Bank of Hawaii: Thanks Brad. This concludes our prepared remarks and now we’d be happy to take your questions.

Conference Operator: Thank And our first question comes from Jeff Rulis of D. A. Davidson. Your line is open.

Jeff Rulis, Analyst, D.A. Davidson: Thanks. Good morning.

Peter Ho, Chairman and CEO, Bank of Hawaii: Hey, Jeff.

Jeff Rulis, Analyst, D.A. Davidson: Wanted to check back in on margin path. I think we’ve kind of talked about or you’ve referenced maybe a two fifty margin by year end, maybe not a Q4 average, but want to see if that path is reasonable. And kind of the second part of that question is sort of the cost of funds sort of stalling out a little bit. Think mentioned some CD opportunities, but particularly on that side, sounds like the opportunities on the earning asset yield, but sort of two parts, sorry for the lengthy question.

Brad Sattenberg, CFO, Bank of Hawaii: Sure. This is Brad. I think as far as the NIM, I do think two fifty is an achievable number. I don’t see anything that’s going to get in the way of that path. Mean, again, this was our fifth consecutive quarter of expanding our NIM and I think that’s going to continue.

As it relates to our cost of deposits, our spot rate at the end of the quarter was at 158 and I do think our beta, it is at 29%. I think after the CD repricing this quarter, think we’ve got the opportunity to pick up about 15 to 25 basis points on that CD repricing. I think our beta is going to be north of 30. And so I think we’re going to see this quarter, assuming no rate cuts, a continued beta that continues to move towards 35%.

Jeff Rulis, Analyst, D.A. Davidson: Perfect, okay, thanks. More of a other question is just on sort of balance sheet growth, Based on loan growth, more of the question on securities, should loan growth be on the net base be modest? You see yourself continue to grow the securities balance from here?

Brad Sattenberg, CFO, Bank of Hawaii: Yes, I do think we’re going to continue to see the securities portfolio grow. I think this quarter the cash flows were about $170,000,000 and we invested in our investment portfolio about $270,000,000 or $275,000,000 So we are increasing that portfolio when we see an opportunity. If there is modest loan growth or if liquidity increases, we’re using that excess liquidity at the moment to increase our investment portfolio.

Peter Ho, Chairman and CEO, Bank of Hawaii: I want to touch on the diversity of what we’re purchasing in the portfolio.

Brad Sattenberg, CFO, Bank of Hawaii: Yes, that’s a good point. I would also add that we continue to sort of balance our purchases between fixed and floating rate. And so this quarter, it actually leaned more towards floating rate. I think 55% of our purchases are floating securities, and then the other portion obviously 45% are in fixed securities.

Jeff Rulis, Analyst, D.A. Davidson: Thanks Brad. I’ll step

Brad Sattenberg, CFO, Bank of Hawaii: back. Appreciate it.

Peter Ho, Chairman and CEO, Bank of Hawaii: Thanks Jeff.

Conference Operator: Thank you. Our next question comes from Jared Shaw of Barclays. Your line is open.

Jared Shaw, Analyst, Barclays: Hi, thanks. Good morning.

Peter Ho, Chairman and CEO, Bank of Hawaii: Good morning, Jared.

Jared Shaw, Analyst, Barclays: I guess maybe just on C and I, any trends that we should be thinking about that to call out on the delta there this quarter and how commercial customer sentiment and pipelines and thoughts for the year there?

Peter Ho, Chairman and CEO, Bank of Hawaii: Yeah, I’ll, Jared, maybe I’ll start and Jim can specifically speak to C and I. On the commercial book, we were frankly a little disappointed with performance this quarter. We took a 6% year on year average commercial loan position, but on a linked basis, just about flat. And that was really pretty much across the board CRE, which had been an 8% performer on a year on year basis was flat. As you pointed out, C and I was down pretty substantively and construction took a bit of a pause.

And I think that’s a little bit of a more structural than cyclical situation. I think there is some opportunity there. So yeah, it was an off quarter. I’m hoping that if and as we get a little more clarity around the environment with the tariff situation and the like, we can begin to resemble more the year on year average loan basis in commercial. But yeah, you’re not incorrect.

It was a little bit of a disappointing quarter commercial production wise for us. And Jim, you want to touch on C and I?

Chang Park, Director of Investor Relations, Bank of Hawaii: Yeah, I think what I

Jim Polk, President and Chief Banking Officer, Bank of Hawaii: would say is that, we have seen pipelines continue to build from the beginning of the year. Obviously, it wasn’t a terrific quarter, but I think it was driven by two things, right? The greater uncertainty that we saw in the market, which obviously impacted loan volumes or at least what we put on the books. And then we just saw some unusually high level of prepayments on a couple of loans, which resulted in the decline. I think as we go forward, we begin to see the pipeline start to materialize.

We’ll move back into a modest level of growth as we move towards the end of the year.

Jared Shaw, Analyst, Barclays: Okay. All right. Thanks for that. And then on the deposit side, if we look at DDAs as a percentage of deposits, it’s staying pretty flat. Is this is that how we should maybe think about it, staying right around the 26% level and as total deposits move DDAs or stick with that or is

Brad Sattenberg, CFO, Bank of Hawaii: there

Jared Shaw, Analyst, Barclays: a potential opportunity for those to move higher or lower?

Peter Ho, Chairman and CEO, Bank of Hawaii: Well, we’ve got a lot of effort and energy around building DDAs, obviously, given the rate environment, those are high margin products for us. I was encouraged that average NIBD for the quarter was up 1% on a linked basis as compared to minus 0.2% on a year on year average basis. So we’re seeing some acceleration there. Whether we can get numbers well beyond that, I’m not sure. As much as we’d like to build demand deposits, all of our competitors would like to build demand deposits.

So it’s a pretty competitive crowded space. So we’ll see, mean, it’s an important product for us, and we’re going to do our best to try and make that an outsized component of our overall deposit base.

Jared Shaw, Analyst, Barclays: Okay, thanks. Thanks for taking the questions.

Conference Operator: Yep, thank you. Thank you. And our next question comes from Andrew Terrell of Stephens. Your line is open.

Andrew Terrell, Analyst, Stephens: Hey, good morning. Good morning, Andrew. Wanted to check-in on expenses first. It sounds like still thinking that 2% to 3% expense growth rate. It seems like that kind of implies a little bit of a step back in the back half of the year, little bit of relief on expenses in the next couple of quarters.

Just wanted to see if you could kind of confirm that and just maybe refine kind of back half expense expectations?

Brad Sattenberg, CFO, Bank of Hawaii: Yes, I think that’s right. I mean, think obviously the first quarter was elevated. The second quarter we had a severance charge of about $1,400,000 So I do think it will take a step back to second half of the year. We still feel comfortable with the 2% to 3% increase from the prior year. And so, yes, I think you should see expenses come down from where they were during the first six months of the year.

Andrew Terrell, Analyst, Stephens: Great. Thank you. I appreciate it. And then I also just wanted to check-in just kind of on capital priorities. I know you’ve got a buyback out there.

We’ve talked about some securities restructuring at a certain point in time, but just wanted to take your temperature on what makes sense or kind of what you’re thinking about from a capital standpoint today.

Peter Ho, Chairman and CEO, Bank of Hawaii: Yeah, so I think we’re probably going to maintain our whole position on buybacks until we get a little better clarity around both the economy and the right path forward. Around securities repurchases, we don’t have anything significant planned there, but certainly to the extent that we pick up certain income opportunities, the opportunity to reconstitute those gains into securities repositioning is something that we think about. So probably the way I’d frame that is nothing dramatic at all, but opportunistically as we see opportunities in our income stream to help kind of smooth the balance sheet, that’s what we would pursue.

Andrew Terrell, Analyst, Stephens: Understood, okay, thank you

Jared Shaw, Analyst, Barclays: for taking the questions. Thank

Andrew Terrell, Analyst, Stephens: you.

Conference Operator: And our next question comes from Kelly Matta of KBW. Your line is open.

Kelly Matta, Analyst, KBW: Hey, good morning. Thanks for the question. If I could, I’d like to circle back on the components of margin, specifically the expected cash flows off of the securities book and loans fixed and adjustable resetting expectations over the back half of the year. Do you have the expected cash flows on that so we can manage NII assumption from here?

Brad Sattenberg, CFO, Bank of Hawaii: I would say the cash flows are going to be in the range of $550,000,000 like in total. Think it’s going to these are contractual. It’s not an acceleration of prepayments or anything like that. And so I think $550,000,000 is probably what to expect. And as far as what they’re coming off at, I think what you saw in the first and the second quarter, if you took those together, I think there have been some minor blips

But if you look at them together, I think that’s probably a reasonable average of what they’ll come off at. And then the reinvestments obviously should be stable unless there are changes in interest rates. And then obviously that we’ll see a slight shift based on that.

Kelly Matta, Analyst, KBW: Got it. Thanks for that. And then switching over as a follow-up to the expenses and the run rate coming down in the back half of the year. How much of that may be pushing off certain investments into 2026 and beyond versus are there any, you know, because expenses are otherwise well controlled. Anything you’re doing to help mitigate, you know, expenses here and and cost containment efforts, just to get a sense of the moving parts of the back half of the year coming down?

Peter Ho, Chairman and CEO, Bank of Hawaii: Yeah, Kelly, I’ll begin on that, maybe Brad can clean up whatever best I create. But I think that, no, we’re not curtailing investment expenditures. That frankly is not in the plan and I don’t see environmentally the need to do that. We’ve got a lot of interesting ideas and thoughts out there that are going to require some capital investment, and we’re happy to do that and garner a quality return around those. In terms of just bringing down expenses in general, is frankly, a discipline that we’re deploying in every quarter.

And we did notice the severance in the quarter, that really was a result of some restructuring that we’ve done. I would anticipate that we’ll probably see some more of that in the third and fourth quarter, but nothing major, but really just kind of reflective of our intent to always be looking to figure out ways to bring down expenses to the organization.

Kelly Matta, Analyst, KBW: Got it. That’s helpful. And then in terms of overall, you know, deposit flows, like deposits were down this quarter. Can you can you remind us any seasonality in there? And, being that deposits will likely be the driver of the size of the balance sheet, just kind of overall expectations in terms of the outlook for deposit growth from here?

Peter Ho, Chairman and CEO, Bank of Hawaii: Yeah, I think that there is some seasonality into the quarter, the second quarter, as well as frankly, the third quarter. We look at the past four years of deposit balances in for a year, the second and third quarter are kind of the shoulder quarters, if you will. As far as what we’re expecting for the balance of the year, frankly, I would anticipate that if we come out flat from where we are, but improve to Jared’s question a few minutes ago around the componentry, hopefully laying a little bit deeper into NIBD, that’s about where we would think would be an appropriate place for us to end up.

Kelly Matta, Analyst, KBW: Thanks, Peter. I appreciate the color. I’ll step back.

Peter Ho, Chairman and CEO, Bank of Hawaii: Yep. Thanks, Kelli.

Conference Operator: Thank you. This concludes our question and answer session. I’d like to turn it back to Chang Park for closing remarks.

Chang Park, Director of Investor Relations, Bank of Hawaii: Thank you everyone for joining us today and for your continued interest in Bank of Hawaii. As always, please feel free to reach out to me if you have any additional questions. Thank you.

Conference Operator: This concludes today’s conference call. Thank you for participating and you may now disconnect.

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