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spk01: Good day and thank you for standing by. Welcome to the First Hawaiian, Inc. First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I will now hand the conference over to Kevin Haseyama, Investor Relations Manager. Please go ahead.
spk07: Thank you, Carmen, and thank you, everyone, for joining us as we review our financial results for the fourth quarter of 2021. With me today are Bob Harrison, Chairman, President, and CEO, and Ralph Misik, Chief Risk Officer and Interim CFO. We have prepared a slide presentation that we will refer to in our remarks today. presentation is available for downloading and viewing on our website at FHB.com in the investor relations section. During today's call, we'll be making four looking statements, so please refer to slide one for our safe harbor statement. We may also discuss certain non-GAAP financial measures. The appendix to this presentation contains reconciliations of these non-GAAP financial measurements to the most directly comparable GAAP measurements. And now I'll turn the call over to Bob.
spk09: Thank you, Kevin. Good morning and appreciate you joining us today. We'll start with an update on the local situation on slide two. Similar to the rest of the country, we are seeing a surge in new COVID cases. Fortunately, with over 75% of our residents that are fully vaccinated and about a third of the population having received booster shots, hospitalization remains below the peak levels that we saw in September. The county mayors are closely watching their case counts and hospitalizations, and working with the governor to determine if additional policy changes are necessary. Speaking with friends in the hospitality industry, anecdotally, the holidays were good and January is relatively strong. However, they are definitely seeing weaker bookings in February. We're seeing continued improvement in the economy with unemployment down to 6% here in Hawaii most recently. And if you turn to slide three, you can see that we had a very productive fourth quarter and saw strong and broad-based growth in loans, excluding PPP. We also saw continued growth in consumer and commercial deposits. Earnings this quarter were impacted by some balance sheet actions we took to position us going into 2022, but our returns continued to be durable, capital levels strong, and credit quality remained excellent. Net income was $57 million, and our return on tangible equity was 13.47%. Diluted EPS was $0.44, and the board maintained the dividend at $0.26 per share. During the quarter, we repurchased $21.5 million of our common stock under our current repurchase program, and the board adopted a $75 million repurchase program for 2022. Now I'll turn it over to Ralph to go over the financials.
spk10: Thanks, Bob. Turning to slide four and building on Bob's comments, You should know we took some actions in the fourth quarter to improve the balance sheet position going into the new year. At December 31, total assets fell 2.2% over the prior quarter to $24.99 billion. But the changes in the balance sheet were planned and will be accretive to income in 2022. We worked to move some public deposits off the balance sheet and deployed excess liquidity into loans and securities. The change in mix improved our interest income for the quarter. We also used some of the cash to prepay 200 million of FHLB advances this quarter for a total savings of about $12 million in interest expense. The reduction in cash also reduced deposit insurance costs and improved our capital position. Turning to slide five, period end loans and leases were $13 billion, an increase of $128 million from the end of Q3. Excluding the impact of PPP loans, total loans increased by about $414 million, or 3.4% for the quarter. The growth in loans was broad-based, with increases in CNI, CRE, residential, home equity, and credit card. Construction balances were down due to scheduled completion and payoff of several large for-sale projects, but continued draws on other projects helped to offset the paydowns. The completion of these projects contributed to residential loan growth in the quarter. Looking ahead to 2022, we are expecting loan growth ex-PPP to be in the mid to high single-digit range. The variability is driven by uncertainty around the return of dealer flooring balances. The low end represents a scenario where we do not have significant contribution from dealer flooring, while the high end represents a gradual normalization of flooring balances. In the latter scenario, we would expect most of that growth will be back loaded into the second half of the year. Turning to slide six, deposit levels fell by 1.4%, or $304 million, to $21.8 billion at year end, but the composition shifted significantly. Public deposits declined by almost a billion dollars, while non-interest-bearing deposits grew by about $520 million. Our loan-to-deposit ratio was 59% at year end, and the cost of deposits was unchanged at six basis points. Turning to slide seven, net interest income was up $4.7 million over the prior quarter to $137.3 million. The improvement was attributed to deployment of cash into securities and loans, as well as higher fees from PPP forgiveness. The net interest margin was 2.38%, up two basis points from the prior quarter. Higher PPP fees accounted for six basis points of the increase. Excluding PPP fees, the NIM would have declined four basis points, in line with our outlook of a two to four basis point decline in Q4. Beyond Q4, the impact of PPP fees should diminish significantly since there is only about $5 million remaining. And looking into Q1, The balance sheet actions we took in Q4 should add four to six basis points to the NIM, but we're also expecting a significant drop in PPP fee income, which could negatively impact NIM in the 10 to 12 basis point range. So net-net, the reported NIM could decline around six to eight basis points from the 2.38% reported in Q4. Looking forward, we feel that the asset sensitivity of the balance sheet provides good upside potential for NIM and net interest income heading into 2022. About $4.8 billion of the loan portfolio reprices every 90 days or less, and another $3.3 billion in fixed-rate loans and securities reprice in 12 months. On the funding side, rates paid on deposit in our market have historically been less sensitive to rising rates than in mainland markets, and this will help hold funding costs down. Turning to slide eight, Both non-interest income and expense were impacted by non-recurring items in the fourth quarter. Non-interest income was $41.6 million this quarter, which was $8.5 million lower than Q3. We took a $6 million charge on the funding swap for the Visa Class B shares sold in 2016 and realized $2 million less in BOLI income. The normalized run rate is about $48 million per quarter. We remain focused on growing non-interest income and feel there is good potential upside in 2022 as economic activity picks up and interest rates increase. Non-interest expense rose $7.7 million to $108.7 million. About $9 million of that increase was the termination fee for the FHLB advances previously discussed. Going forward, we expect 2022 expenses to increase 6.5% to 7% over 2021, with about one-third of the growth coming from inflationary impacts and increasing levels of business activity, one-third coming from expenses related to the new core platform, and one-third from additional tech investments. Moving to slide nine, asset quality at year-end was strong. realized credit costs in the quarter were low, and the level of NPAs, criticized credits, and past dues decreased over the prior quarter. We did not record a provision expense this quarter. Net charge-offs were $6.2 million for the quarter and $12.5 million for the full year, or 10 basis points, 13 basis points better than the rate for 2020. NPAs and 90-day pass-through loans are flat this quarter, and the level is four basis points lower than the prior year. Criticized assets continue to decline, dropping from 2.98% of total loans in Q3 to 1.6% in Q4. This level is 263 basis points lower than year-end 2020. Past due loans decreased from the prior quarter. Loans 30 to 89 days past due declined 12 basis points to 23 basis points at the end of Q4. Moving to slide 10, you see a roll forward of the allowance for the quarter by disclosure segments. The allowance for credit loss decreased $4 million to $157.3 million. The level equates to 1.21% of all loans or 1.23% net of PPP loans. The decrease in the ACL level is due to improvements in commercial credit quality. The reserve for unfunded commitments decreased $2.2 million to $30.3 million. Our economic outlook was unchanged in Q4, primarily due to the renewed uncertainty related to the Omicron variant that could impact FOA's recovery and credit losses. Let me now turn the call back to Bob for any closing comments.
spk09: Thank you, Ralph. And we really appreciate Ralph stepping up to be our interim CFO and really appreciate his effort on that. To recap, we had a good 2021 and are well positioned for 2022. The local economy should continue its recovery when we get past the current COVID surge. As we saw last summer, demand for travel is high and Hawaii remains a favored destination. The loan pipeline looks good as we start the year and our balance sheet is well positioned to fund the loan growth and benefit from rising interest rates. Capital levels remain high, and we have sufficient capital to support our balance sheet growth while maintaining our key capital ratios at our desired targets. We're also continuing to work on building out our digital infrastructure and are on track to complete our core conversion in the second quarter. The new platform is designed to give us flexibility to integrate new and different applications quickly, as well as enable us to scale via partners. The outcome we hope to achieve is simple. We want to provide customers with better tools to manage their finances and to be more convenient to do business with us at any time from anywhere. Early indications are encouraging. Customers who are signing up on our platforms are more engaged and doing more with us. We need to continue to build out this experience and work on increasing adoption with the existing clients and make this part of our broader value proposition to bring in new relationships. The future will be different, but our business is still about gathering deposits, making loans, and providing complementary financial services. And now we'd be happy to take your questions.
spk01: Thank you. And as a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound or hash key. Please stand by while we compile the Q&A roster. First question comes from Steven Alexopoulos with JP Morgan. Please go ahead.
spk04: Hi, everybody. Hi, Steve. Hi, Steve. So I first want to follow up on the loan outlook. Mid to high single digits, pretty good. On the dealer business... Is it fair to say, we saw a Huntington report this morning, too, their dealer business was up a little bit, that at least that's bottomed here? And then within that range, moving to the high and to the low end, is it all about just the change in line utilization, or are you guys also growing dealers still? Or is it purely whatever utilization is that will dictate where you are in the range?
spk09: Great question, Steve. And maybe just we have seen – signs of a bottom in that portfolio. Every month during the quarter, we saw an increase in flooring balances. So while we ended the quarter up 50 million, it finally seemed to have bottomed out for us as the manufacturers get their production lines back in sync. As we looked at the outlook for 2022, it really is dependent on that production levels and the consumer. We have added some more customers. We've seen some flux during the last year. Some customers have sold. We've been fortunate to retain the relationship with the buyer, but there's also been an addition of some customers. So it's going to be a mix, but it's really hard to predict the flooring balances for this year, and that's why we gave that range on the outlook.
spk04: Okay. But, Bob, even if you're at the low end of the range, mid-single-digit is a pretty big improvement over 2021. Could you give us a little more color? What's driving that? Is it just core C&I? Is commercial real estate picking up?
spk09: Yeah, we're seeing a number of things. I think C&I ex-flooring would probably be towards the bottom of the list, but we are definitely seeing CRE, residential, home equity has been strong, as well as a bit on the consumer. And as I've mentioned in previous calls, we are seeing the mainland come back first, and Hawaii we think will come back soon after that, but we're definitely seeing the strength in the mainland first.
spk04: Okay. So is it safe to say you have a fairly high degree of confidence that at least you'll be at the low end based on these other drivers, and then the variability will come on dealer, right? That's correct. That's our outlook. Okay. Got you. And final question, on expenses, Ralph, I appreciate the breakout on the 6.5% to 7% range, the one-third from inflation, one-third... core and then one-third additional tech investments. So the right way for us to think about the company is we'll take moving forward, like long-term, just what's the cost inflation of First Hawaiian. Maybe the inflation's not the same, but those other two-thirds, right, just continued investment. I don't know if tech investments are ever going to stop. That's about a good run rate for the company beyond 2022.
spk10: No, I would say that in terms of the core platform conversion, probably add another 1% on a normalized basis. And then I think the tech spend is going to be kind of a function of what we see. We're trying to size this tech spend so that we can grow into the spend. But I think going into 2023, probably more along 4% to 5% would be sort of what we would think in the high end.
spk04: Okay, Gaia. Okay. Okay. Thanks for taking my questions. Thank you, Steve.
spk01: I'm sorry. Our next question is from Ibrahim Poonawalla with Bank of America. Your question, please. Good morning.
spk07: Morning. Good morning, Evie.
spk11: Hey, I guess just one, Ralph, for you on the margin. So you gave pretty good guidance around net-net 6 to 8 basis points decline relative to the fourth quarter. Just remind us about the rate sensitivity, what we should expect in terms of the margin benefit from each Fed rate hike, assuming Fed moves in March. What does that mean for the margin for the second quarter and then for subsequent rate hikes?
spk10: Yeah, I think the best way to think about that is just to look at the composition of the portfolio, how much assets reprice. We do model rate shocks under different scenarios, and we tend to run those more from a risk management standpoint to understand our interest rate risk. And I think forecasting the NIM out beyond a certain period of time, there's a lot of challenges to that. So I think really sort of looking at that $4.8 billion that is basically floating rate and reprices within every 90 days. And then about $3.3 billion that would be running off on kind of normal amortization over the course of the year. And then on the deposit side, I think we have about $12 billion that is sort of interest rate sensitive. And as we've sort of seen historically in our marketplace, We tend to lag the mainland in terms of increases in deposit costs, and that tends to happen a little bit slower over a couple of quarters.
spk11: Understood. And within that $12 billion in deposits, do you have any index deposits that would replace immediately with the Fed hike?
spk10: No.
spk11: No, right. Okay. No. Okay. Got it. And just one separate question, Bob. So you mentioned you've talked about mainland leading the charts for a few quarters now. When we think about the split, like if you had to guess 5% to 6% loan growth, how much of that do you think comes from mainland versus Hawaii? And are you doing anything different in the mainland today versus pre-pandemic?
spk09: No, we're not doing anything different. I don't have at my fingertips the breakdown of what the 5% to 6% would be mainland versus Hawaii, you know, because of that mix of consumer and residential home equity lines. That's all Hawaii-based. We're not doing any of that on the mainland. But we do have, you know, kind of our guide has been uh, percentage of our loans on the mainland. I believe the end of last quarter, we were 18%. And the end of this quarter, we're about 19%, about 19%. We were as high as 23%. I think 23, almost 24% in the past. So there's still a lot of room to grow there without we think being overweight on the mainland. And we haven't changed anything we're doing up there. It's the same lines of business, the same people, uh, mostly the same customers, but we have been, uh, successful in bringing over some new dealer customers over the last year.
spk10: I think the growth to was around 18% quarter over quarter on the mainland and about 13% in Hawaii. So we're seeing growth in both markets right now. That's annualized growth. On an annualized basis, yes.
spk11: That's pretty strong.
spk10: That's with respect to the commercial portfolio.
spk11: Noted. And just one last follow-up around the dealer floor plan. Can you remind us where those balances were in the fourth quarter, either period end or average versus pre-pandemic?
spk10: Total, I believe, was about $639 million at the end of the fourth quarter last year.
spk09: Yeah.
spk11: Back in 2019?
spk09: The 2019 end, I want to say $859, $860, right in there. So we're down still pretty substantially.
spk10: Yeah, we're about $227 million.
spk11: Got it. So state 39 versus the 859 pre-pandemic. Got it. All right. Thanks for taking my questions.
spk09: Thank you, Evie.
spk01: Thank you. Our next question comes from Andrew Leach with Piper Sandler. Your question, please.
spk05: Everyone, good morning. Thanks for the clarification around the loan growth there and dealer flooring. My question revolves around the expense guide, and I'm sorry if I missed this, but what base should we be using? Should it be the full year $405 million and build off that, or should we be backing out some of the non-recurring items that took place over the year?
spk10: I think I would start with the 405, Andrew.
spk05: Got it. Okay. So, I guess that's pretty high. Are there other non-recurring items that might contribute to that that you see on the horizon?
spk10: Nothing really sort of out of the ordinary. There's always like every year there's things that come in and out.
spk05: Okay. All right. You know, you've covered all my other questions. I'll step back here. Thank you.
spk01: Our next question comes from David Pfister with Raymond James. Your question, please.
spk06: Hey, good morning, everybody.
spk01: Morning.
spk06: I just wanted to follow up on the loan growth side. You know, the revenue mortgage growth from the takeout mortgages on the condo construction projects has been a nice tailwind. I'm just curious kind of where we are in that and how much more embedded growth there might be from those projects and then just You know, the C&I excluding the dealer floor plan, and curious what you're seeing on that front. That was great growth to see, whether it was increased utilization or new commitments, and just what you're hearing from your non-floor plan C&I clients.
spk09: Yeah, maybe I'll start this, Bob, David, and turn it over to Ralph afterwards. For the C&I side, we are starting to see finally some We hope bottoming out in the corporate area, but we haven't seen the sustained growth in that area yet. So really the CNI growth I think we're going to see near term will probably be in the dealer flooring side. For the residential real estate, as we've talked about before, we had three large projects complete during the quarter, two of which we did the construction financing on. We don't have any big projects completing in the first quarter of this year. We do later in the year, so I think that will not be as much of a factor for the first quarter or two. But we are still seeing continued activity. Prices are still very strong here. Given the rise in interest rates, it seems likely we'll see less refinance activity, and it will change more to a purchase market. Ralph, anything you would add to that?
spk10: The only thing I would add is we will probably have less turnover of the portfolio as rates rise. So I think in terms of our ability to grow balances, that'll help sort of offset maybe some of the benefit you get from the refi market.
spk09: Yeah, and then maybe lastly, we are seeing more activity in the home equity side as rates have gone up. So people are pretty quick to pivot over there. That's a good point.
spk06: And then, you know, just you saw a pretty nice improvement in the criticized and past due balances. Just curious your thoughts on overall asset quality. what you're seeing out there, maybe just some competitive dynamics, you know, on how loan pricing and structure is holding up and just whether you're seeing anything that's causing any concern.
spk09: Maybe I'll start and turn it over to Ralph. You know, the pricing is competitive, very competitive. We have not seen it as much in the structure, but we're definitely seeing pricing competition. But, Ralph?
spk10: Yeah, and I think in terms of asset quality, you know, the larger customers, I think they've been able to make a pivot to kind of what, you know, what seems to be kind of a new normal. So I think from that perspective, you know, we're feeling fairly good about that. And then I think as we go into the new year, obviously what we were able to do with the pandemic was get really close to understanding some of the sensitivities that our smaller customers have. So, you know, we'll be able to sort of keep tabs on that. So I think, as I said, we're well-reserved going into the new year, and hopefully we can sort of make this shift in the recovery to something that's less benign than we had anticipated.
spk06: Yeah. Yeah, no kidding. you guys have also been very thoughtful on the tech spend and the build out over the past couple of years, the conversions upcoming. I'm just curious where you think we are with the tech build out, maybe how conversations are going with the potential partnerships and maybe what kind of partnerships you're most interested in. Are you looking at banking as a service or just, you know, what kind of partnerships and are you looking at investments as well? Just any commentary on that front.
spk09: Yeah, maybe this Bob, David, just a, Couple comments. You know, we're still early days into that. While we're talking to people, a lot of the work we're doing is pretty foundational, enabling API infrastructure, you know, redoing our consumer loan platform, which we've done, getting more functionality to our website and being able to make it easier for the customers to interact with us. So it's really that for now. And then taking that next step of really engaging the customer more actively and in the technology space and really finding out what they need through their data and seeing how we can better address those needs with our products and services. So it's still a little early days to be talking about specific areas at this point. We hope to be able to do that later this year.
spk06: Okay. Sounds good.
spk09: Thanks, everybody.
spk07: Thanks, David.
spk01: Thank you. Our next question comes from Kelly Mota with KBW.
spk02: Hi. Thank you so much for the question. I wanted to ask you a bit about capital. I saw the buyback got renewed. Just wondering about your appetite for share repurchases and how you're thinking about prioritizing capital returns.
spk09: Sure, Kelly. Great question. You know, really, we love to use our capital to fund loan growth. And excess capital, as we define it, we then plan on returning to shareholders. So we are still keeping with our guide of common equity tier one of 12%. We're clearly above that now, but as you look at our loan outlook, clearly some of that capital is a shift from very low risk weight securities and into higher risk weight loans will be used for that. But anything excess of that, we would be using that for our share repurchase. and also keeping an eye on the leverage ratio at the same time.
spk02: Great. And then I just have a follow-up on the NIM guidance. That six to eight basis points lower from 4Q, is that just for 1Q22? And then as a follow-up beyond that, is kind of further NIM expansion outside of the balance sheet actions you took, mostly a function of rates, or how should we be thinking about the margin from there?
spk10: Yeah, we think we're getting to a point where it's bottoming out. This is Ralph. And actually what we're seeing in, say, like the mortgage book, what we're putting on the books today, probably about an eighth of a percent higher than the average portfolio yield right now. So we're hopeful that we're sort of hitting this bottom point. And then obviously if we get rate increases, given the composition of the portfolio, we think that's going to be positive to the banks.
spk02: Great. Thank you.
spk01: And our next question comes from Jared Shaw with Wells Fargo.
spk08: Hey, good morning, everybody. Good morning, Jared. Good morning. So with the loan growth this quarter, what portion of that was shared national credit growth versus non-shared national credits?
spk10: Yeah, I do. Actually, it was up about $7 million.
spk08: $7 million with Shared National? Yeah, it's not very much. When you look at that C&I growth separate from the floor plan and separate from the Shared National credit, what's really driving that? Is that the utilization rate or is that new customer acquisition, I guess, you know, sort of separate from those two components?
spk10: We had a couple of large transactions this quarter with existing clients that really sort of helped in that area. So that was probably a big, big part of the C&I growth. And what we're kind of seeing with, you know, kind of non-real estate customers is actually a lot of activity in real estate. So owner-occupied real estate and some maybe equipment, but not a lot. I think on the utilization side with the large corporates, we saw a little bit of a dip in utilization in the fourth quarter. So that really hasn't sort of come back yet.
spk08: Okay. And then just looking at the sort of cash securities dynamics with being able to deploy that this quarter, where would you like to see the cash levels trend to with that broader growth backdrop that you've laid out?
spk10: I think, you know, we're kind of around the level that we want to be today, you know, plus or minus. And, you know, I think from a liquidity standpoint, you know, right now, you know, we have, I think, a lot of sources to tap. But I think just given the composition of the balance sheet, expectation of rising rates, probably the level that we're at today, and we took a lot of actions to sort of reduce our cash levels in the fourth quarter. So I think we're probably going to stay around that level we would anticipate.
spk08: And then just finally for me, any update on the CFO search in terms of timing or thoughts of any update you can give us?
spk09: Sure. Thanks, Jared. This is Bob. I'll take that question. We have engaged with Corn Ferry, and the search is ongoing. This is a team we've worked with before, so we're launching right into it. Okay. Thank you.
spk01: Thank you. And as a reminder, if you have a question, simply press star 1 on your telephone. We have a question from the line of Lori Honseker with Compass Point.
spk03: Hi, good morning. Good morning. I just wanted to go back to shared national credits here. What is your balance, and then what's the split Hawaii versus Mainland?
spk10: So shared national credit in mainland is about $873 million. In Hawaii, it's about $262 million.
spk03: Great. And then your C&I charge-offs were pretty outsized. I mean, obviously your credit is practically impeccable, but can you help us think about what happened there with the $4.1 million of C&I charge-ups, and were any of those SNCC? And if so, can you help us think about what was Mainland versus Hawaii?
spk10: It was a local credit. Actually, it was a single credit. And I think the circumstances around that, we took a write-down on the credit. And pretty much kind of an idiosyncratic type situation, not really related to you know, economy or even business stress is sort of a litigation related issue.
spk03: Okay. Great. That's helpful. And then just going back to your margin comments, appreciate all the color there. Can you just help us think about with all of your balance sheet actions, maybe a refreshed look on your interest rate sensitivity as it pertains to rate shocks? In other words, in an up 100 basis point as of September 30th, your impact on NII was positive 14%. Can you just help us think about what that looks like with all of your balance sheet actions factored in?
spk10: Yeah, I would go back again to sort of just taking a look at the asset repricing. I find it really difficult to take the model and take it out more than a quarter and say, well, this is what's going to happen to rates because there's so many factors that go into that. And what we disclose really is more of a static type of a situation, which is probably not representative of what we'll see.
spk09: Yeah, and we'll be updating that with our 10K, obviously.
spk03: Right. Okay, and then when in the quarter did you actually prepay your $200 million of FHLB costing $273?
spk09: Around November. Yeah, early to mid-November, Lori.
spk03: Okay, so halfway through. Okay, great. And then... How should we be thinking about tax rate? It was obviously low this quarter at 19%. Assuming it's going to be back to what we saw, can you help us think about that a little bit?
spk10: Yeah, we had a couple of true-up items that we took in the fourth quarter that took the rate down. So we'll probably, I think it's, you know, 25% is probably where you should sort of target the tax rate to be, you know, over time.
spk03: Okay, great. And then just last question for me. I just want to make sure that I got this right on expenses. The guide that you gave was 6.5% to 7.5% increase over 2021. Is that correct? Yeah, 6.5% to 7%. In 2022. In 2022. In 2022. Okay, great. And so, Six and a half to 7%. Okay. And so just looking at the base here, $405 million, I mean, if I adjust out just even the two big items, right, your FHLB prepays and your litigation, you're at $394 million. So your year-over-year increase is 9% to 10% for 2022. Can you help us think about, I mean, I think most of us on the sell side, our price targets are derived off of 2023. Can you help us think about When you look out to 2023, what sort of percentage increase? I assume we're not going to be using that same sort of core 9% to 10% increase. Can you help us think a little bit about more forward-looking expenses? Thanks.
spk09: Yeah, Laurie, this is Bob. We're not giving guidance for 2023. Ralph had talked earlier about we think it's going to be less, maybe in the 4% to 5% range, but that's not guidance. That's just a... talking point, kind of a directional type of thing. We think that last year, 2021, this year, 2022, with a number of expense items coming on board, that, you know, that shouldn't be the same going forward, I guess is the best way to say that. Ralph, anything you'd add to that?
spk10: No, Bob.
spk03: Great. Thanks. Helpful. Appreciate it.
spk01: Thank you, and I'm not showing any further questions. I will pass the call back to Kevin Hasayama.
spk07: Thank you. We appreciate your interest in First Hawaiian. Please feel free to contact me if you have any additional questions. Thanks again for joining us, and have a good weekend.
spk01: And this concludes today's conference call. Thank you for participating, and you may now disconnect.
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