BOH - Earnings call transcript Q3 2017 | Bank of Hawaii Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day ladies and gentlemen and welcome to the Bank of Hawaii Corporation Third Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference Ms. Wyrick. Cindy begin. may you Ma'am

Cindy Wyrick

Chief you, Sandra. for morning everyone. you Mary Ho; good our our Shigemura; Chief Risk Good us today. morning, Officer, our Peter joining CEO, this President afternoon, Officer, And Dean Chairman, and Thank Sellers. and Thank Financial joining is me

actual reasonable, remind reasons Before statements. believe we Ho. And me today's may there a call of you results are variety are get the from the we And let will materially conference that while I'll our that now Peter started, call those contain forward-looking differ assumptions some to over projected. turn

Peter Ho

for Cindy. Thanks per was expectations on well share solid EPS quarter listening or with the stand for X.X% in. basis. $X.XX at quarter. on in friends We Hawaii. That's X.X% million. linked grew for really to Bank grew Loans, yet the on another of levels line interest our year-over-year Fully QX organization. all up East Good deposits, appreciate diluted for a total good basis BOH. Thanks morning now Coast, and at assets $XX.X afternoon. the and your Expenses to a in our and record controlled were

on the the ago and ratio positive year year. points compared Credit to non-performing efficiency story. well-controlled a third remains assets quarter. from in Net to Our loans XX.X% to improved basis in XX a as fell quarter XX.X% last third charge-offs remain

will highlights risk Sellers, the our Dean? you me Dean's Mary then additional Risk and Dean for our Officer financial following let Shigemura, CFO, who Now, the some profile give will on give call turn quarter. to some over comments, our you Chief details

Dean Shigemura

per $X.XX share last for or was in the per share million $X.XX million Peter. per the in $X.XX third or you, or quarter year. the quarter Thank quarter compared $XX.X second to share and $XX.X million Net $XX.X income third

equity was return XX.XX%, quarter during ratio Our was XX.XX%. was and the assets X.XX%, efficiency third return our on the on

and which to interest quarter basis Net at from X.XX%, third was quarter the increased up $XX.X had XX $XX.X third basis mortgage-backed third quarter, purchased the second in year. and was net Our points the of last which XX from margin million on quarter interest two in quarter quarter, securities, income unchanged from quarter last the a in million quarter an $XXX.X a primarily Included previous the million comprised quarter last the last from $XXX,XXX impact the same million margin. million, million in interest the quarter year. same the and third year. in was total of year amortization reinvestment and the third in $XXX $XXX.X We of Premium $XXX.X up reversal was the basis $XX.X were in previous securities point differential the points. down during of positive a quarter million

to will declines compared of in quarter. million in in the Mary year. due million Non-interest recorded income, the later, fees, XXXX $XX.X income and million mortgage quarter with of this same in As discuss decline The $X $XX.X third million last $XX.X quarter compared and was we service to quarter a the credit previous banking in challenge totaled and previous due to sale tax the seasonal largely quarter be fees non-interest the the mortgages. revenue Growth is previous of lower lower for largely program. trend Compared of the our downward a from derivative the gains customer customer in volumes decrease income salable derivative lower with the on and to the and from to mortgages income insurance program. year, due revenue annuity was overdraft provision continuing lower expectation

million in third be third about million with same and quarter the in quarter. non-interest quarter compared of flat to year. totaled we $XX.X quarter, expense expect the $XX.X XXXX fourth the last For Non-interest to the in previous $XX.X the quarter income million

previous same quarter the and and quarter energy from of For rate effective benefited up real tax of about last be the third $X.X adjusted sales state X.X% of full third our above The down XX.XX%, from million. tax XX.XX% XXXX, quarter of last we the the XXXX and release in XXXX for federal year was XX.XX% expenses year the to rate the estate quarter for from expenses non-interest The expect in tax year. increased in credits. reserves of effective tax

growth during As mentioned, loan good had Peter the we deposit and quarter.

was end increased and quarter The loan was the duration the the as billion strong to years. duration X.XX of quarter. during available held-to-maturity growth growth. $X.X exceeded was X.XX portfolio deposit Our portfolio duration of total the at the investment years years the sales portfolio The of X.XX

X was quarter, billion the from X.XX%. leverage equity same the the was our ratio third Our from quarter and the At Tier $X.X XX.XX% Tier capital end quarter, was third quarter our previous of slightly year. up the end and ratio at up the shareholders' X of last

million. out an income of we repurchased of at a XXth $X.X October XX,XXX third total and dividends During million. October of shares paid stock Xnd in XXX,XXX of between million quarter, additional a of repurchased for $XX.X We $XX.X and XX% the net or total common cost shares

October resulting at $X.XX a dividend $XXX.X Board our Our of Board share XXXX. increase the million of million of of fourth finally, in program for remaining authorized an share $XXX XX, our quarter And a XXXX. in per declared repurchase authorization

Mary over I'll Now, to turn Sellers. the call

Mary Sellers

compared linked million of year-over-year. at at million million included million the for the totaled from past third loans at were the in assist $X.X quarter Thank estate third $X X.XX% or days Comparatively, total up of were or outstanding. past X.XX% not million quarter annualized, average the period second due end assets third quarter, the net of up end from third you, XXXX, and quarter quarter to million reported loans non-accrual customers end loans $XXX,XXX third million Net At of and quarter $X.X or for interest at $XX.X the Residential the quarter, X.XX% the loans annualized of Dean. Restructured leases of the days million the loans or third at of the of $XX third annualized. accruing loans were XXXX, XX quarter down of million Non-performing the quarter and end modified $X.X more in charge-offs end accounted quarter the more of or down up of $XX XX end total XXXX. we our net the the and the of real $XX.X $XX.X XXXX. second in were while second quarter. for $X.X charge-offs and the the $X still or million, due charge-offs $XXX,XXX million, the with

of of position. I'll of lease the average down with The home to value second and ratio leases end growth. an the at The residential third mix The fundings as first credit Hawaii million. totaled respectively, point a and quality value million, quarter Accordingly, equity in given and turn eight allowance net originations period In quarter, allowance provision the $XXX.X our points $X.X loan reflects and and now of end strength XX%, while this XX% basis underwriting very economy in commitments recorded. allowance equity, At commercial from third was company's down continued year-over-year. of unfunded in strong the the back quarter of quarter, of loan the charge-offs XXXX. another to million loan the quality unchanged end was the reserve was call linked of million $X.X XX% basis for portfolio, $XXX,XXX and a asset home the average over was quarter the $X weighted lien as the mortgage one the the X.XX up XX% was to had to The XXXX losses for mortgage the quarter, in from weighted loan total standpoint. of from loans the period, well of the at quarter the Peter. total and the a

Peter Ho

same of The homes single-family for or inventory Months the on conditions, and price continuation The prices. medium the increasing healthy price single-family volume labor sales XX due performance pipeline, low nine months year. market, to for single-family at compared The Mary. first for active a increased XXXX medium the the was of X.X%. of on and primary perform home our strong of the XXXX of homes X.X% home condominiums. for market first X.X% last well increased condominium nine our The days construction single-family of increased on with September a to months months months Thanks period Great. Oahu continues economy for Oahu, an industry, tourism home number and median condominium condominiums. Hawaii market increased days to declined of sales and of of the X% X.X during X.X

X.X% for the with visitor the the visitor to the year to us and declined number market in stronger daily growth Japan. Thanks, of I'm spending a remained days. During during happy we'd -- today strong spending. for condominiums to month up average Hawaii X.X% home growth on from questions. Tourism and September, days single-family numbers -- in your XX of East is be period XXXX spending and The in of strongest this and increase to visitor again, result XXXX. has arrivals eight the compared of X.X% far the first spending in also so The in in a region arrivals days respond of U.S. is increase same XX an market been months median joining increasing now in with on for sorry

Operator

first Rabatin line Our question Instructions] Piper comes Brett of the Jaffray. [Operator from with

line is open. Your now

Brett Rabatin

morning. good everyone, Hey

Peter Ho

Brett?

Brett Rabatin

expense the just making the guidance, first go numbers. to on sure Wanted over we're same

think XQ? You're contribution million, numbers year include I if talking $XX on would looking that core in this that or And XQ? of any the like I'm a X.X% at -- basis. of imply about thoughts that anything from growth right, charitable on Will a growth kind

Dean Shigemura

No.

that. about the that there's in opportunities we think is in come But do think come that we but through right have expenses seasonal the math I mind some under fourth keep year that your do end to maybe in quarter, quarter. some also fourth for

Brett Rabatin

of the the to had kind And then and little guess than a talk quarter. Okay. would've -- I and I growth little liquidity wanted sheet more just you extra CDs balance during a the in expected about

the as the around kind thoughts any margins reducing forward relates in from CDs, that? on then of move And color higher here? just growth Can it any to that the Just liquidity.

Peter Ho

Yes. that to islands. Dean; touch margins. we where here competitor Sure. an side, handle set couple then is our a underrepresented in the for opportunity of some and We're to area maybe pretty you see CDs on can relative I'll the volume means what reasons.

which competitors. So, it XX% half almost overall time our our -- is call base, about of deposits deposit are of

it using reasonable tool. somewhat as share in some the we We're market segment, side. that we're there. we opportunity particularly have think So, getting also defensive consumer a pricing And in

So, the interest-bearing that we this margin, customers as time side be segment think with some but than now in it's strategy the to up able to rising demand Any savings at our yield into And or on we're on rate provide environment. that's side, our giving comments important we that regarding Dean? point. time side, try to a on rather

Dean Shigemura

Yes.

the based modest some on margin We of to we growth, balance sheet towards that's did cash be expect perhaps to began going end and quarter as the deposits. So, of growth the rates deploy and the some rise. loans

base quarter in to expect the if deposit excess So, would I of something base. the loan we grow fourth the similar continue in

to we just an see So, if -- kind that. the really grow outlet a portfolio continue and of excess for opportunities, we'll is liquidity

Brett Rabatin

sorry. I'm

So, XX a you basis your margin, yields, from view? getting points quarter. margin liquidity, higher say reduced The higher, in you're obviously, can trend the higher little in grow i.e. the it benefit

Dean Shigemura

growth. It based will be balance mainly sheet on Yes. the

Brett Rabatin

all I appreciate Great. color. Okay. the

Peter Ho

Brett. Yes, thanks

Operator

And our question line Jeff Thank Davidson. Rulis D. with from next you. comes of A. the

line now Your open. is

Jeff Rulis

morning. Good Thanks.

Peter Ho

Jeff. Hi

Jeff Rulis

Just a -- the a on question guidance. follow-up the on just expense

could related this some the guess talk But the guide in quarter? quarter. of if is in expected. balance there, your So, in the you more had you on I of expense -- Maybe is that kind severance from about growth

Peter Ho

to $X executives. about piece. It's in some certainly little than Well, It seen severance what earlier relates higher I we've of retirement the prior about quarters talk bit million. the at a can

of a in result part that it that's the path. So, some cost savings will down

also provide We had which some to division, upside restructuring the also mid-management expense us from of an in levels some standpoint. our branch

I million So, activity would $X pretty this to high end we expect continue forward. what but level think the space, I of the some much that we'll think in I was on moving see mark can anticipate of

Jeff Rulis

on included wise. guess fee guidance I income. In Is in Okay. And item that line $X million flattish sequentially any your jumping reason guess was that's the non-interest other around I linked down for income, that? there quarter.

Dean Shigemura

Yes. down swap items that the category. guidance It and is included in in the was some our flat of income there;

Jeff Rulis

update. last one the Okay. just And maybe Visa one, sale

said determined. quarter, QX one? of that Is of I that still on to deliberating still kind you next for think last still be year,

Peter Ho

made I that some a Yes, on one. think we may on have progress deliberation

going to QX the on on sale as liability we're some think shares if hold I in -- is that the Class simply B off conversion there because convert. rate

everything so in a don't be somewhat we off to have sell and out liability And of want hanging a to there. position then

the So, not likely balance first this Visa point. of to sell the at in quarter our remaining

Jeff Rulis

Got it. Thanks.

Operator

KBW. our question you. line Thank of with And the next from Jackie comes Bohlen

is line open. now Your

Jacquelynne Bohlen

Hi, everyone. good morning

Peter Ho

Hey Jackie.

Jacquelynne Bohlen

now changed was the they're be Peter. expenses, to looking what person to third X.X%. guidance expenses be wanted see up last But when on like might Sorry to and just up it had touch I just X% from quarter's

Peter Ho

performance across very levels on think staffing seeing I good organization. a the we're

I would investment thing so of and somewhat on. to say vis-à-vis the more both just correlation expense, variable comp as to their surprised time the shouldn't just starting year. as is last down our pull instance, overall, lot our seen is businesses effort me, into that pleasant a which operation we're you for for few quarter and volumes broker/dealer a we're remain in for as but levels of trying and mortgage had great it's a management quarters some actually performance just -- relative that flat become that to know, operation, And think of were been Facilities that lightening put through. seeing and well see in I performance and we've been to softer has has we see anticipate to efficient our

good feel we So, about expenses where are.

is probably Jeff's basis, on reasonable benchmark pretty this rate I going good think in I out, a around and come the probably severance. off a of to run think QX quarter to quarter a that one. is but That's question

Jacquelynne Bohlen

what And place, Okay. some the where of into look in into -- future investment as a expenses the point are reduce lot a to the table, offsetting the XXXX, for you we is bank? at put you of

Peter Ho

invest mean, looking answer always That's the for would I [Indiscernible] here as it insert in. I we're is but -- is yes. think the today, great that I yes, stands to things

that. going So, as to see continue the positive to to to shareholders through near-term opportunities investment long-term, we our for create in value the do we're benefit

Jacquelynne Bohlen

items overdraft banking, Okay, items Or the any outside had of other what that are going there see fair could you enough. where And with growth? then for mortgage mentioned and alternatively, line you pressure are fee with any forward? are primed there

Peter Ho

conservative made the think of space in quarter pretty right fees of in area I the that Well, quarters. frankly, byproduct number that sales to is now. law, and a curtailed hurt would've down We've us in that's otherwise the enjoyed that that be pretty decision, and sales fiduciary really which is a annuity the would murky we a was other path so Jackie, and other

be business I'd I out, is the customer level I'd make that. guess going quarters, moderates out is moderate commercial other in comment along with we would as I for. that past one overall discussed of business the -- derivative our probably that's looking to then as So, And

Jacquelynne Bohlen

Peter. Okay. color. I'll great back. Thanks step That's

Peter Ho

Okay.

Operator

Thank our with line comes question you. from And Stanley. next Zerbe of the Ken Morgan

now line open. Your is

Ken Zerbe

guess I first Great. question.

that think we bit is conceptually, quarter. Just flat meaningfully a lead million fee maybe different in just would of $XX times roughly there than income, to I be is going growth. the a out When called of in just XXXX, guidance four, took number fourth the little if terms to to anything

like or there than would slower it? XXXX? drive thinking is Or that? the $XXX anything you're of faster for million roughly that kind it Thanks. it's about that So, Is way

Dean Shigemura

that's expectations to I at way good year. next look a Yes, think for the

Ken Zerbe

you quarter. may And from perfect. rate possible obviously more think in then December do and hike, get think the this a the or current But rate excess NIM, terms little Okay, of a when than planning hike you I had rate meaningfully hike you quarter? in the did you this December to actually we guys change you June are benefit to liquidity

Dean Shigemura

hike, a year. would rate from terms fall first of much that pretty into of December the next in the quarter Well, benefit

Ken Zerbe

Of course.

Dean Shigemura

Yes.

benefit So, rate though, expect if do of it. some out that hike, we get we

Ken Zerbe

just Fingers was in next transitory anything, especially nature on question, the there they're then some pretty you more or last the out in little sticky point? expect that quarter? this of think side, do commercial course. terms at deposits, crossed. flow Or Of just a public And that might of funds that of you the see to was some

Peter Ho

some stuck end. Commercial that quarter. was deposits the quarter escrow in up through were There smartly chunky

Ken, be And are I'm projects So what those transitory. not yes, but you, in somewhat to are, sure honest with play. those that's exactly

Ken Zerbe

Got it, okay.

So, those stick may into for or not this around escrow -- quarter. may the

Okay.

Peter Ho

sure is I'm will they because Well, up pretty happening what oftentimes are but ends transactions transactional, replace not transactions. those

Ken Zerbe

it. Got

right. Thank much. you all Okay, very

Operator

from Bank with And Thank the you. our next comes Poonawala question Ebrahim of line America. of

Your is line open. now

Ebrahim Poonawala

guys. morning Good

Peter Ho

Ebrahim. Hey

Ebrahim Poonawala

Just some guess up. Last -- consumer pricing if deposits of in in the movement you terms quarter, about side talked could I was seeing on of why Peter, pricing. about deposit talk sensitivity, you some holding commercial terms

Just making see Now, to conversations. in with your terms the products you change wholesale client want about in around has working love promotions? I And any of just those versus what to deposit thoughts been change would categories a are thinking that. both

Peter Ho

year. a -- like it from Yes, particular, so quarters felt standpoint, and deposits of in I couple first the would lot on a pricing the characterize QX liabilities about of

real no changes So, there.

cost deposit but I a to That's much ended pretty basis funds. what's line we with the up ago, for quarter. think in happening fed think points I from on year XX at obviously up

in fed's least of at So, we're early that the actually the here. betas with tightening the quite we're seeing, pleased phases

just have And checking me, most want an said a is pricing, market pricing this deposit But that on as we're As that, a into to offering to consumer giving interesting that's competitors be the to product. already national Having a compelling changing marketplace of tactically unless reason we'd compared we managing a what an or from was that wouldn't in products space. of out today. real certainly outlier benefit bit introduce Hawaii far perspective compelling top to in as question. I there doing free

Ebrahim Poonawala

Understood.

So, of not in competitors any so you're least seeing either far. I that terms at take movement freezing pricing deposit by it

Peter Ho

No, it's steady. feeling reasonably

Ebrahim Poonawala

can terms you to if break growth, Got in just it. you down down running commercial Okay. into just if can X% Peter, at as loan and loan year-to-date about C&I break moving And growth, it CRE. growth income of

through going As that we do expect that some -- turn anything think sort growth be of a into low portfolio? until that Or to XXXX, you cycle kind is a of changes happens? single-digit

Peter Ho

Yes.

had I the happening the there. us C&I from what's CRE think So, strength growth couple X% of of I to going I source But it's book, to has quarter book, for for The think in to somewhat is construction us. a being commercial constructive much dilutive there, and to that strong. continues quarters, flat We for wouldn't anticipate be change been a that's Ebrahim, the side has turned us. to be continue really mortgage

So, down we quarter. X.X% the in were

So, compare much very that was number prior factor commercial growth than when the portfolio. quarters that against a

on think mid-single-digit probably the it, thought So, maybe around, call side I commercial portfolio reasonable. is your I'd a

Ebrahim Poonawala

you is C&I or You've up? because picking don't business that slowdown And competitive seen there just and some of overall weak pressures expect activity?

Peter Ho

latter. the it's think I Yes,

but shared in paper little pretty the that is Our relationships I credits, unique business national local the basically a for at in cycle the been really the standpoint point are purely to off from have do not company. portfolio this we've stable And those all we're market, the desk. think, a -- category. C&I cash We that in picking management some of -- we're of But is in-market. cycle

Ebrahim Poonawala

my for Thanks it. Got questions. taking

Peter Ho

Yes.

Operator

you. from Thank comes our Sandler And Aaron question with Deer next O'Neill.

now Your line open. is

Aaron Deer

everyone. morning good Hey

Peter Ho

Hey Aaron.

Aaron Deer

switching other side loan the the of Peter, to the consumer side. book on

just should expect outlook terms some sense give year-end of across had in and have of guys of your XXXX? a there Board. you Can we pretty into what You growth much there the kind us good heading traction

Peter Ho

think we our become Yes, anticipating and of were that's that. portfolio strength I somewhat the

or going into be flattening but to think we're that is I by to of commercial the going rate is what that's Resi side. I growth we mortgage, to to the the dictated sell starting maturation see the secondary. strong, really think, be continue --

across is think to We economy us the consumer space. installment. to and that continue So, equity up what that to as on Great think opportunity and the X% least direct over of the here, at leaves got I hold we've grow all the And economy segments were consumer a out little in consumer. -- quarter. I long performance as continues the for

Aaron Deer

loan to strategy. And does But just on if how bit side, liquidity similar to play little the more to balance here? then see if sheet? the from loans third -- It have just you're that, a liquidity as the that's on -- the forward that CDs growing -- to continue some margin as and you're to Okay. the your sounds onto that and sheet. balance in liquidity a deposit the -- market securities shifting obviously, excess sounds impact start going more the of like expansion we the willing sounds trying going the margin can thinking sheet you continues forward. about But flattish It expansion pace that how understand terms going to balance and more second margin? out share strategy just And in a like was It to vis-à-vis there's to you on at deposits can encourage any maybe like are versus quarter.

Peter Ho

ask me with that let Yes, me help Dean question. to

Dean Shigemura

kind just is investment outlet a give for the step liquidity. portfolio our of to kind So, of the excess back, you

we'll versa, subtract the add the the our or investment from to So, or is portfolio. that growth portfolio deposits exceeding either vice extent loan

investment net hindered because may happens were lower-yielding margin asset, happens our a somewhat is a expand, but be the the as bit, to what -- it's just is portfolio income So, interest it's what increases.

is standpoint, the a for than margin. income us of margin we better the trade-off income. And think between while there's a from we -- our kind the measurement So, that and

investment address which excess our we liquidity. it So, portfolio, more us may income. all deploy that's give into We will how the

Peter Ho

go Yes, as ahead, as Aaron. far --

Aaron Deer

guess, of sounds it this at Well, guys -- up I point. up need don't just for paying to you liquidity guess I'm rather than really that I pay kind then mean, any -- I

on have the balance sheet. guys You so much

to So, those capture out being share NII concerned guess willing of it margin. that get for but about and the you're deposits, go the market and I -- necessarily what for sounds too without like sake means growing --

Peter Ho

Yes.

I you I right think that our deposits of the set time competitor the when of of a NII One, compared strangely number understand the is strange does it think our that's versus deposit things. couple space at the of look to it's rest time we how vis-à-vis reflection our here way really share margin, to one. the low, more size look think about and a The it. think of I base,

think So, a and number there's that, market customers a to of been little our I two, enjoy in products there. around further helpful have opportunity delivering categories. share segment one. we think may delinquent that in helping us a to suite their product Number pricing Obviously, we having also the deposit this in is that other it's

offer us categories. pricing got we've through we savings time. extent So, product and preserve from interest-bearing yield that other a in believe perspective, solutions that helps demand, time non-interest-bearing the To demand, our can we

Aaron Deer

Got it. you, helpful. Dean. Thanks That's Peter. Thank

Peter Ho

Okay.

Operator

And you. from comes our the line question Hunsicker of Point. Thank with next Laurie Compass

Your now is open. line

Laurie Hunsicker

morning. Good thanks. Hi,

Peter Ho

Laurie. Hi,

Laurie Hunsicker

looking again. just just a people just CDs of I'm touched -- specifically minute a CDs. your stripping I your but out for this, deposits so lot understand everything on know else, to Wanted have

to was that quarter quarter, we weighted this basis specials before Are and how XX So, going points; about your should cost XX; be last you that, thinking the quarter, cost all where XX. is go? running

Peter Ho

two there highest in of space. then types the consumer are There and public there is The different are CDs. Well, -- lower it's pricing CDs really in public the space, are CDs. consumer is

not segment. So, an the have on front, us to to governmental a at we extent more we've gives fund traditionally that side, what as consumer than standpoint even can from the to the or the do a rate higher opportunity government that consumer on much provided

So, that would--

Laurie Hunsicker

I'm How And was sorry. how the -- money? public much much

Peter Ho

$X.X to Is right? Our deposits say. were that total I public want billion,

Dean Shigemura

Yes.

Peter Ho

Yes, time, but not all right? that is of

Dean Shigemura

Yes.

Laurie Hunsicker

How-- Okay

Dean Shigemura

billion. $X.X

Peter Ho

$X.X billion.

Dean Shigemura

Yes.

Laurie Hunsicker

did compare side? was the money how billion And the Okay. quarter last where public $X.X to on it

Dean Shigemura

It's $XX flat. up million. about about actually It's

Laurie Hunsicker

Okay.

at doing as your I branches are new Okay. there promotional some branches? I look say, you on online. where And I online, then three or we we -- would they're are the that with guess new CDs consumer are you're potentially had coming that the coming think that side mentioned

Peter Ho

Yes, right.

branch branch. Kihei, So, Pearl with new on branch. started ago; we we November. we year, with our Maui, well. was City. opened Hawaii Kai new opened first a is That new so month as Then in And a last guess or which our opened main I

out nicely. facelift. took and was -- really Basically, It's we it the that in needed So, branch a remodeled came a space branch. much half gave it -- really a frankly,

to so look these branches trying to operating overhead to is sizing and appropriately to do them with XXst and the upgrade century. by finish branches we're and to feel the fit the obviously trying really what And cut of to to customers the conform who trying area We're that than increasingly more So, pronounced standards. brand our then, technology-based to more previously. with thirdly, has experience banking right? that, desire in do much is a And new deliver branches our we're electronic

We consultation to. lot we used have more space than a

anymore. back non-existent other just deposit is that ability space a a than about is footage bit to almost talk and than traditionally. actually the office is products office kind because this square teller point The space just there. And other down making at focus So, don't the a need you smaller financial to sit back really customers of

nicer them your eat efficiency out operating of and cake kind too of strategy. getting it's it, have customers. great for So, facilities they're our We're and just

Laurie Hunsicker

year? that right you year that end has I Or of say will more been shortly, or either am into here to be next three curtailed? opening have branches And this

Peter Ho

Manoa We're I after year plate, on later No, say nothing then got up a And -- this opening bunch has and but is not. Pearlridge the it to want we've announced next that. year. early

Laurie Hunsicker

branches? new how be and -- brand-new, aren't for absolute novo, so we these These these thinking are correct? should And expenses remodeled de ones; about

Peter Ho

No. all remodeled. No. They're

Laurie Hunsicker

okay. They're all remodeled,

Peter Ho

Yes.

we that bigger strategy the standpoint. They're standpoint account is the is we appropriate just So, have footprint we location need. than there from think and

And need older and bigger we and than so and them they're we they're -- make than so need smaller we to need, younger.

Laurie Hunsicker

okay. more and efficient, smaller And

And so -- okay.

different how I'm thinking X, on general hey, a different. overlay and longer be? us about sure a branch then, remodeled each asked you a slightly each branch So, number rate would everyone be go-forward term if should run we savings metric saves But that is of, we what way would

Peter Ho

we've to don't efficient not facilities because cost do smaller, do run number we little tell you share; these get they're you to a expect out have new But the shared I savings they're FTE get of more of costs of every efficient. that operating a will I Generally, and we to with can expect more branch out footprint. that previously. savings

Laurie Hunsicker

Okay. Great.

Just a few more questions.

income. good over million about here -- talk number? annually. annuity we had curtailed annual a third non-interest Then looks insurance are million line, maybe $X.X so that the It quarter previously line? run be million thinking fees back about, this $X.X should going like the about rate is million, sales and you and the $X.X The Just running this $X been a

Peter Ho

think I that's Yes, about right.

annuity were sales the yes, $XXX,XXX quarter? think in I about down $XXX,XXX -- I think,

Dean Shigemura

$XXX,XXX.

Peter Ho

way good probably $XXX,XXX, it. and a that's about think to

Laurie Hunsicker

something side drop was there, quarter, okay. Or should trust in that I Okay, too. say linked a non-core the anything specific? had you Was And there I there on the missed? June then quarter,

Peter Ho

work special we was a a revenue quarter, it did by some just -- two, and $XXX,XXX that the still number was clients we in fees couple get from some trust driven about of one. of that tax second non-recurring. And seasonal tax had for service that some as we is result number preparation, Yes, differential

Laurie Hunsicker

then last Okay. Great. question. And

up AUM, September? finish Your that did where

Dean Shigemura

almost previous was It the same. pretty unchanged from much the quarter,

Laurie Hunsicker

$X billion?

Dean Shigemura

Yes.

Laurie Hunsicker

I'll Thanks. there. Great. it leave

Operator

[Operator Thank you. Instructions] Piper follow-up from with do And question a Rabatin line Jaffray. of Brett we the have

now Your line open. is

Brett Rabatin

little avoiding like to And you? a Peter. or of real and may are thinking just you going if updated talking but in just Waikiki. market or Hey that on may be I outside seems you've the I'm are stuff see ask, then you're as slowing benefit may on you're construction overheated some been about estate? bit, the maybe it, some there's market and wanted thoughts Thanks. there intentionally that just about curious commercial follow-up maybe things it not new construction

Peter Ho

limit estate couple now the has of are refinance you Well, been at there years thing to assets growing, the time. that -- assets kind things the construction and just really do happening the And several to strong any in little more that overheating. and less have I [Indiscernible], the in that's here a are probably we've in just very tested opportunities is see in what's shifting in market high-rise, estate right refinanced market maybe that And a high-rise, third real not decide the islands. that's broad as particular. opportunity spaces -- a point, a market, But those defined for of Yes. side certainly affordable real majorly some mid-market The luxury or been times. commercial newer in category don't from proven. of is that and/or are

probably think state, I little -- That's yes, in They're heats That's sponsors get market, sprouting with. if frankly. experience more up crux generally in space. city, to fact, participate newer business to we'd In don't places higher into some the to projects with I market that of that the in where for think experience with your So, other these cautious we up, to in great have end question, much we the much don't affordable be that. parts business. of love answer we're of great going and the to as they're have a

Brett Rabatin

for Thanks Great. the Okay. color.

Operator

return I'm no any Cindy And at Wyrick to closing for like call time, questions showing the so to remarks. you. further Ms. this I'd Thank

Cindy Wyrick

for all thank joining of Bank you for your today of us continued and to like I'd interest in Hawaii.

always, a additional questions or free please Thanks contact the everyone topics further and day. have As discussed any me feel if need any today. clarification you on to have great

Operator

all have disconnect. thank participating conclude day. Everyone a great the gentlemen, for and Ladies This program you you may does today's in and call.

Bank of Hawaii (BOH) 23 Oct 172017 Q3 Earnings call transcript