Bank of Hawaii Corporation

Q1 2022 Earnings Conference Call


spk_0: ladies and gentlemen thank you for standing by walk to the bank of hawaii corporation first quarter twenty twenty two earnings call at this time all participants are a listen only mode they'll be a concern that question and answer session after the prepared remarks if you're like to ask a question during the session please press dar one if you require any further assistance please press start zero i would i like to the color with your host you know he got
spk_1: he may begin
spk_2: thank you kevin and good morning good afternoon everyone thank you for joining us today on a call with me this morning if chairman president and ceo peter how i see financial officer dnc aymara and actually first officer married fellow before we get started let me remind you that today a conference call will contain some forward looking statements and what we believe our assumptions are reasonable there are a variety of reasons the actual results may differ materially from those projected during the call will be referencing a slide presentation as well as earnings really a copy of the presentation and really are available on our website oh it's not come under investor relations and now i like the time the call over the peter home
spk_3: like smell lower everyone we appreciate your interests a bag of way first quarter was the i was a good start to twenty four to do for for the organization as is our custom officer share with you some thoughts on the broader market here in the islands or then the color to danes talk about the financials a little to the mclaren all over the mary have to give you some perspective while the credit side and then all close with simple clothing thoughts and then we'd be happy to take questions the beginning with the economy of things appear to be as shaping up stable and the improving as what i would call it here you see or unemployment numbers unemployment l down to four point one percent the that that when you look at the forecast numbers out the new hero has put in their of as a as a clearly those are are do for a just below as a probably impacted by so the changes the of the beer labor statistics us all in all ethic a pretty good performance unemployment wise or when you look at the some of the high frequency data that the university also puts out with the call their economic polls was as an aggregation of a bunch of the high frequency data you'll see that really that rate is up to it's highest level ever in the in the in the new environment that we find ourselves in so as of the past couple weeks that rating said eighty one points the be some frame of reference are prior peak was seventy five in the summer of twenty twenty just before delta head and then as of those numbers took a dip with delta and that overgrown grown as a nice be back abella added a high end hopefully move it for their switching to real estate here you see that the real estate market to least here on a lawful our primary market the taser do quite well surprise point still elevated a very high levels both single family as well as a condominium
spk_4: and also you see that the
spk_3: that pervasive inventory or shortage of inventory and continues to be the case and and not likely the seamless change in that environment anytime soon and and therefore i wouldn't expect to see too much erosion and price points or when on twenty two
spk_5: let's live
spk_3: switching over to the visitor side this is really an evolving story the see in even see the chart that that twenty twenty two levels are getting closer to twenty nineteen levels were free pandemic levels of the numbers are for my rivals down point down still twenty five percent from twenty nine ten of that's the tale of two marketplaces and us arrivals both east and west us or rivals are up a year to date eight percent from twenty nineteen but up but clearly the dragon was brave now the entire market or the japanese down ninety eight percent canada down sixty one percent and other international a marketplaces del sur seventy percent at interesting way when we look at spending patterns the news isn't quite as as as bad they're spending is down and are what will remember i told you are rivals were down twenty five said that spellings only down nine point nine percent this year day through february and this reflects a very robust us consumers so us spending or us market spending in the islands you're late february is up twenty seven percent and offset somewhat by japan canada and other international i'm just finish off on the visitor side a rough four months which as you can imagine has been quite difficult to the pandemic is is really starting to look up so the last three months or beginning of december rub part in the state was actually a plus seven point six percent or versus twenty nine ten levels a january was off of slightly at well as one point three percent versus twenty nineteen and february about that guys did plus four percent versus twenty nineteen so all our what we see in the visitor segment is have a reasonable performance given what's happening in the various martha places as good of a fair amount of up for case for optimism optimism as we look forward and hopefully welcome the japanese visitors back hopefully of you towards the tail end of the of this year so that's it for a my eye opener that me now turn the call over to do serve the financials day
spk_6: thank you peter
spk_7: or strong core long road continued in the first quarter or loans and then of ppp waivers increased by three hundred and fifty four million or two point nine percent link quarter and by one point one billion you have a year or nine point four percent growth was across both can commercial and consumer long portfolios and two point five percent and three point two percent respectively leap quarter tpp loan balances declined by sixty nine million and fifty eight million remained at the end of the quarter
spk_6: net interesting come in the first quarter was one hundred twenty five point three million and included one point eight million from ppp homes the fourth quarter net interest income included it one time reduction of nine hundred thousand for an adjustment to deferred mortgage loan fees and five point seven million and ppp own interest income adjusting for the one time charge in the fourth quarter and total ppp low income and both quarters
spk_7: the first quarters corn and interest income was one hundred and twenty three point four million of one point nine million for one point six percent link quarter
spk_6: driven by strong long road and rising interest rates
spk_7: or cornet inches margin which excludes ppp loan interest income increased by seven basis points link order to two point three one percent or long to deposit so remains low so below regional and local peers this affords us a strong and stable days of low cost he posits that is a readily available source of liquidity to fun long grown and provides pricing flexibility one of the driving factors of this strong deposit days is lazy the deposit market and are strong position within this market according to the of the i see deposit study data the top five banks speak up nearly ninety seven percent of deposits in the state of weigh anchor point is well positioned as the market share leader with exceptional brand recognition and customers and chips
spk_6: the composition of our deposits for the demonstrates the strength of our deposit franchise ninety four percent of deposits are from court commercial consumer customers and the remaining six percent in public deposits are predominantly government operating accounts while analyzing when analyzing our deposit products ninety six percent of our deposits are inquiry savings and checking accounts with checking balances comprising nearly sixty percent of total deposits
spk_7: a solid base of low cost deposits provides us with flexibility in a rising rate environment
spk_6: so deposit balances increased three hundred and fifty six million or one point seven percent lead quarter and three hundred ninety two million and core commercial and consumer customer accounts
spk_7: while our deposit cause decrease by one basis point two five basis points in the quarter
spk_6: during the last rising rate period we demonstrated pricing discipline and approximately twenty percent data are continuing to grow deposit balances our balance sheet remains answered sensitive to changes in interest rates and we will continue to benefit from higher rates the recent increases a medium and long term rates are already having a positive impact on our corn and interest income and margin in the first quarter of twenty twenty two than interesting come with net income was fifty four point eight million and earnings for common share were one dollar thirty two cents then interest income in the first quarter was one hundred and twenty five point three million
spk_7: as discussed earlier net interest income which excludes ppp own interest income was one hundred twenty three point four million of one point nine million link quarter driven by strong core long road and rising interest rates as mary will discuss later we recorded a negative provision for credit losses or five point five million this quarter
spk_6: none interesting come total forty three point six million in the first quarter of one million from the fourth quarter the increase was primarily due to higher swap revenue and deposit these partially offset by seasonal decreases at service charges and other transaction fees
spk_7: also included in the first quarters non interest income was a one time negative adjustment of four hundred thousand for a change in the beast a class be conversion ratio which was reported as a contra revenue item in the investment security gains losses
spk_6: in addition we recognize the one point eight minutes million recovery for messiah impairment in the mortgage banking income which afford it as the flexibility to hold more mortgage loans we expect non interest income will be approximately forty two to forty three million per quarter to the end of the year as mortgage banking income and asset management these are expected to be lower due to higher interest rates and law and markets
spk_7: non interest expense in the first quarter total one hundred and three point nine million of from one hundred and one point seven million and a fourth quarter
spk_6: included in the first quarter as expenses were seasonal payroll tax benefit expenses a three point seven million related to annual incentive payouts me during the quarter
spk_7: included in the fourth quarters expenses was a one time one point two million charts when additional employee benefit that increased our vacation carry over limits adjusted for these items the first quarters expenses are one hundred point two million down three hundred thousand from the normalize fourth quarter expenses of one hundred point five million thus in the first quarter we were able to maintain our overall it's discipline or continuing with our inhibition investments
spk_6: for the full year of twenty twenty two expenses will be approximately four hundred and fourteen to pointed at fifteen million as inflation pressures have increased over all expenses
spk_7: the annual married increases at one time cost of living adjustment which together total a five percent increase for employees began on of books
spk_6: a return on assets in the first quarter was point nine seven percent return on common equity was fifteen point four four percent vision see ratio was sixty one point five three percent or net interest margin in the first quarter of was two point three four percent unchanged from the fourth quarter
spk_7: excluding total ppp loan interest income the cold for margin was two point three one percent increase of seven percent southern basis points linked quarter
spk_6: the increase in the margins in the first quarter reflects the ongoing impact of strong core long road than rising rates excluding the impact of ppp loan interest income we expect continued improvement in our core margin with increases a five to six basis points per quarter for the remainder of twenty twenty two have continued long wrote and higher interest rates this is an improvement from the previous them guidance of three to five
spk_7: basis points for quarter or capital level remain strong it is well positioned to support continued growth
spk_6: or c t one until the capital ratios were eleven point eight three percent fourteen point for one percent respectively with a healthy excess about the regulatory minimum well capitalized requirements higher interest rates negatively impacted the valuation of are available for sale portfolio resulting in an lc i just meant the reduction in i'm both and tangible common equity however this had no impact on our regulatory capital our capital distribution capabilities during the first quarter we paid out twenty eight million dollars or fifty three percent of net income available to comment shareholders in dividends and two million and preferred stock dividends
spk_7: we we purchased one hundred and seventeen thousand shares of common stock for total of ten million dollars and finally aboard declared a dividend of seventy cents per common share for the second quarter of twenty twenty two
spk_8: now friend apollo follow it's mary think again
spk_9: credit performance remain very strong in the first quarter that learn and leave charge offs were when point five million or five basis points of average months and recess and allies as compared to two basis points in the fourth quarter twenty one and ten basis points in the first quarter of last year nonperforming assets totaled twenty million or sixteen base as planes up one basis point about the link period and year over year online performing assets are secured with real estate with a weighted average montebello you of fifty five percent lunch delinquent thirty days or more remain stable and twenty eight point three million or twenty three basis points while down eleven point six million or ten basis points year over year and criticized exposure was down to just one point six percent of total lungs given by continued improvement in the financial performance of those customers who had than most impacted by kobe the quality of our love production and the first quarter with strong and reflective the art continued conservative inconsistent approached on ending for the quarter sixty two percent of commercial production was secured with quality real estate modestly leverage our commercial mortgage production had a weighted average land value of sick thirty percent and construction production had a weighted average wanted i you have sixty five percent eighty three percent of the quarters consumer production by secured with real estate again conservatively leveraged residential mortgage and home equity production had weighted average loan to values and combined weighted average long to values of sixty two and fifty eight percent respectively seventy nine percent of home equity production was impressed lane michael scores are all our consumer production remain very strong and consistent importantly when we look at the bottom quite title of our loan production we continue to see how credit metrics as game noted we recorded a negative provision for credit losses and five point five million this quarter this included a negative provision to the allowance for credit losses four point three million which with net charge offs reduced or allowed two hundred fifty two million or one point two one percent of total lines and leases or one point two two percent net of ppp balance as the decrease in the allow and three blacks the improving economic outlook for cats were arquette coupled with that credit risk profile while continuing to provide for the uncertainty and potential downside risks associated with recent a political events and tighter monetary policy the reserve friend funded credit commitments was by point two million at the end of the quarter dumb eight hundred thousand for the link period
spk_10: on now turn the call back to peter
spk_3: thanks very i'm sort of include as a little few thoughts on that where we will we see ourselves louis forward we believe we are extremely well positioned for what we see as a evolving environments where asset sensitive eyes dimensional we operate in an interesting deposit work place where the top five local of locally headquartered players represent ninety seven upset of the market i think people a interesting of that five is that both weighted average longer deposit ratio of those participants the sixty one percent bank way as a terrific position with them as marketplace for the credit standpoint were as the perfect described very good position as well i was a high quality secure his portfolio and or loan portfolio as well diversified well balanced and as a seventy like percent or collateral position with a weighted average loan to value of fifty six percent ninety seven percent were loans or markets we know we've known for decades record strategy ushers has continued familiarity follow from the liquid these employed as dimension or deposit bases is incredibly core nature with ninety four percent consumer a commercial and ninety six percent the either demand or savings as the it also measure we have historically martha winning deposit betas which we would anticipate the blame for the cycle and are operating model generates so the highs returns of capital in the industry
spk_11: so our happy to take your questions
spk_0: ladies and gentlemen if you have a question or communist time please press the star than the one key on your touched on telephone if your question has been answered used to mercer from the queue please press the pound our first question comes from jeff or list of the a david
spk_12: thanks morning
spk_13: it effort the question on know the buyback just want to check in on the appetite and you know if it it was a link quarter but but in a bit higher in the past that just it in of a oh cia
spk_12: the duration or or just general macro help can i give us an update away think on on buybacks
spk_14: yeah i'm i'm
spk_6: it it is up for about three million fall quarter of a quarter or we we continue to i have a implement our capital plan which generally will
spk_7: the capital for girls and then or dividend and of course what's remaining is the yeah
spk_6: they'll go for share repurchases and we continue to believe that serve as important part of our capital on
spk_7: plan
spk_15: and going for the i think it depends on how the
spk_7: the environment evolves given the volatility and in the rate environment
spk_3: you will continue to repurchase shares but it could change depending on the outlook
spk_16: if i think our our i think our intent is to continue with repurchase probably similar to what you're saying the most recent quarter or but obviously subject jeff to what's happening in the raid by or when you would understand
spk_13: sure yeah thanks and and pity dimension that atlas like the you hear a forecasts are a kind of wagging real time
spk_12: and maybe a question for married just on that the and
spk_13: this the first quarter provision recapture sort of in as of march and
spk_17: a in other words if we'd seen some economic improvement is can we can i assume that that would be reflected in second quarter
spk_13: provisioning consideration in other words exactly yep exactly of okay got it
spk_12: and last one baby peter is tried it circled back to the it's that behavior on the last up rate cycle in a how boatload in deposits in he talked about the uniqueness of
spk_3: the local participants on the deposit side my guess is last upgrade cycle deposit betas were were lower but if you could just touch on both home in a loan pricing loan and deposit pricing and of played out in the last cycle yeah i would i would say that am ill that the deposit front was
spk_11: was pretty stable or in there with the we we had about a twenty percent deposit beta we did we did have the best betas in the marketplace
spk_3: and so there's there's a good amount of stability i'd say on the deposit front in part in and the recent one of the reasons why mention the loan the deposit the waited one the ratio for them top five is a there's there's always been a bit of a mismatch between funding and and assets in the islands and i think that's in part how you get those betas right
spk_18: so as we look forward jeff
spk_3: you know out with interesting way with the the liquidity dynamics of the marketplace are my lot different than will at last cycle so then they're more i would anticipate must change of on the deposit front on i'm alone front you know like i said it's it's always been a funding heavy asset later environment there's always can be competition there but there with rates rising well because of interesting the sea and i were people position because you know it's really the yield or the income side really been very volume driven to date to the
spk_13: past they'll call it ten years five ten years of but as margins are picking up with a baby people be more
spk_0: sanguine sandworms is to of pick up on on the right side versus the volume side will see them
spk_19: yeah
spk_20: okay at present thank you
spk_13: or next question comes from andrew life with piper sandler
spk_3: hey good morning everyone and i'm tough questions on the on a long growth continues to be really strong it sound bite you repaint more on the mortgage side to that may have driven mad by it at the guy thing you can point to put what's going on in your market or or maybe at your with your bankers and lender specific be that's driving this this group to given how strong it has emperor or several quarters now yeah sure so well first what we saw growth in just about every category both consumer a commercial she and i was a bit flattish but that free was up three point four percent construction was up bad twelve point seven percent so ill chloe on the on the commercial side i think we're word the beneficiary of a ceiling economy l increased activity is as people in our generally a lot better capitalised and you might imagine coming out of a pandemic and then having a consistency of team for many many years that's just allowed us to in a one ensure that we've got quality staff out there in the marketplace taken care of clients and then to it a staff that's been ill managing the same plans for an awful long time and so on
spk_21: as opportunity begins to pick it's head out in l execution becomes that much more possible i'm on the consumer side of the i think we probably held onto a little bit more racy mores production
spk_13: just as calif i think the feasts i was not quite as attractive as as as earlier quarters or but in general i'd say that you're ready was up home equity was up in direct was up even even interact with the inventory challenges of the marketplace and up there the combination of
spk_3: i think really great programming were really starting to see traction on our marketing front our say great traction on our on our channel and diversification side a good movement into our simplify online platform as early kind of a combination of things it's helped the live
spk_11: overlapped that our commander
spk_3: and that that's great color and har har pipeline shaping up and so far corner i know it's still early but by how are things can do now yeah i mean we have a monthly a pipeline meeting with with the entire consumer a commercial team it's always much anticipated
spk_20: hum and i'd say you know cute to looks pretty good as again a minute you never know i'm in it's a pretty volatile love geopolitical environment we find ourselves and but for now i'll leave feeling pretty good about growth i don't know if we're going to get two point nine percent poor
spk_0: that's pretty fill that skin pre frothy are but i think solid long growth is definitely
spk_22: blue definitely built into the pipeline as it stands right now
spk_23: got it on that those breakup of things taken the questions or off that back of the cast or next question comes from he raheem put obama with bank of america he good morning
spk_3: the ramp i get so maybe one not plus an extension some i think that he mentioned fully and four hundred and fourteen or fifteen million that about sixty seven percent up yeah oh yeah just talk to a speeder as we look forward beyond doubt this year and under puts and takes me to kill like inflation that he got our patients will be hired then do what he saw was financial crisis that going to have some up like pushed to the expenses he was essential that you are investing their the bank is it from an investment spend perspective and area of incremental cost saving store said down the growth yeah so am get it that's that really the question these days isn't it the maybe take up take up slightly higher lens view of the situation we're in the last five years if you look at our expense trend are are invest investment expenditures have grown by about eleven percent just over eleven percent annually so obviously a big investment in a categories like technology or data analytics or marketing or ecommerce unload those types of things the the overall growth of expenses in the company has been three percent and so kind of those non strategic areas of those areas other the what you know what we deem to be as been a strategic has grown of at that zero point nine percent clip so we they
spk_23: oh to accommodate the investments that we think we need to do clearly the world's changed the clearly consumers are changing and and who's paid for that is in fact i'm kind of every other expenditure so as we move forward the challenges we do see a more inflationary environment obviously i don't think we can keep an eye have other expenses cow the rest of the company at one percent call it that's got to go up but i think
spk_24: will happen to abraham is a are clearly that eleven for said it was not an intended sustainable or a mean that number is going to come down meaningfully and so i think we're we're gonna land out his canavan for percentage kind of their annual growth rate that as you know for bag of boys little bit on the high end
spk_23: but i think we're just a the different inflationary environment that we have been previously and there's still some investments gonna be made but i'll tell you a good portion of that is already built in the or it's that's bloodstream and to lot of that kind of pre work but you gotta do to get these platforms weather's marketing or ecommerce going you know takes a lot of upfront next
spk_7: gotta serve like a four percent percentage caught expense good is that i agree to think about that that was helpful thanks peter yep and on dough and a they think gun you mention done deal about
spk_25: hydra six basis voices book order for the rest of the or and an annual provided some color on just a deposit dynamics but anything on the deposit fun like as you think about
spk_6: as may be some of the non core competitors get more competitive on pricing do you see any subset of your deposit balance leaving the bank which inherently might be more read sensitive so maybe they're going to money markets are markedly that kind of funds or where they can get a higher it
spk_7: on that certainly a possibility and and something that we could see you look at but we are on
spk_23: we do have phone as as we manage our deposit these plans for alternatives also
spk_6: you know we do have a pretty significant to trust area that can help us there but the intent is to kind of maintain our our customer base and balances got it and just one last question of when we look at the tangible the t v to be a reissue i think you mentioned the see going gonna could do some modest by back similar to one que levels and i realized the he was he a impact as transitory but mean when when you look at the dc at five point four does it does i have any impact in terms of influencing capital management or he looked after a cia as the at nice
spk_26: it's it's it's certainly a something that we we pay attention to were not it's not maybe the highest you
spk_27: ratio that we would look at we we look at primarily the regulatory capital ratios and from that perspective they'll see cia as doesn't impact that
spk_0: so that's kind of you know what we look at it said if there's a significant change
spk_28: you there could be on some different actions but right now it's it's certainly just the regulatory capital ratio center
spk_29: top of mine
spk_30: it pivoting questions
spk_31: question comes from cali matter with kbw i yeah good morning shen tell us
spk_32: ah cool
spk_6: courtney guidance of them as to sixty point a quarter onto
spk_7: clarification about way ah incorporating the for carver any rate assumptions going into that
spk_31: ah it it it's it's not the entire curve is it some certainly are expecting reads to rise but it's it's slightly actually less than of the forward curves would predict currently
spk_9: and it it assumes about a two and a half percent fed funds rate and to eighty five on the tenure
spk_3: great thank you so much and then i'm turning to loan growth across the border with really really strong arm it doesn't like that course the and i came down a little that and
spk_28: provide us an update on utilities sense where they are vs where they've been historically and like
spk_0: when a are going to start or my thing
spk_33: i they were thirty four percent this quarter or dallas down from thirty seven percent last quarter the kinda range around are probably thirty three to forty not really just episodic way as customers looked as excess liquidity if i don't i don't think that was a charade so i don't think they represent either an upside or downside risk to the outstanding says kind the pretty normal of this point
spk_7: got it that's super helpful thanks so much
spk_33: that
spk_34: or next question comes from laurie hunziker with compass point
spk_35: yeah i got my name on like this that wondered if we kids of act net interest income for a moment and
spk_6: i just wanted to understand with respect to the tpp fees to there was one plant million this quarter that leaves you run number six hundred thousand is that of right number have i is they're better number
spk_7: actually about eight hundred remaining on your knees yeah
spk_17: right attack and you'd probably expect most to that to occur in the gym quarter how you thinking about that
spk_33: ah i i would say is is becoming less and less of a
spk_7: yeah material part of our balance sheet and income statement but you know i would say roughly half of that was would run off in the second quarter and may maybe and then another half of what's remaining in the third and so will probably have some stragglers throughout the year but term come that stuff done enough words not a meaningful part of our balance sheet
spk_6: okay it and then you know i think and and kelly and abraham it has done this slept with with their questions that wonder if you could sort of hopper think about it a little bit more succinctly it in terms of
spk_7: your deposits are fabulous and they're low costing him in a they were fully we went back to twenty nineteen i think of has the betas will be fabulous as laugh he does have the think a little bit about for every twenty five basis points what that looks like maybe to drill it down a little bit more sense since your forward
spk_3: guide as is looking less if i were carved in you to papa think about it a little bit more because the five to stick a point per quarter increase at least by my mouth is looking really pretty lie and kinda the try to understand that because you are so as at sensitive so every twenty five bases for an increase in said funds is about
spk_33: nine hundred thousand for course about three hundred thousand per month and that's only on the fed fun the short end of the curve
spk_36: know if if the curve the long and where to go up the twenty five it's it's it's a little bit more nuanced but it's about forty thousand per month but he compounds because it just that's how the nature of the no longer term assets as real price
spk_33: it the other the other factor laurie to think about to is ill as as rates were coming down are biased was to invest will that longer to the skiers portfolio and now academy that version and that trend will probably be invested shorter
spk_7: and even maybe ores towards floaters a lot of armas those getting it was the lower in this or prayer years will yield but hopefully or higher yield down the path okay great episode and then with the not anti think i'm a different one understand she things think you had mentioned that included in your security a lot less a one time they get of adjustment
spk_37: but the visa class be conversing that i get that right corner thousand dollars that mayor not yes
spk_26: okay and can either thick ban on that a little bit more
spk_33: yeah so when we sold our visa or class be shared some we took that of swap on on both a conversion racial answer these a reset that ratio
spk_38: i'm and as part of the the trees are we deserve the reset cost to us was four hundred thousand so it's a one time we said and then going forward we have that about a million two per quarter
spk_7: affect other i did and that okay now and then that was why there's a bump in that line
spk_3: right next a lot fun again and can you can you also talk a little bit about within your non into think i'm you could just reminded by you are an nsf be an overdraft fees than in a where you were specifically for the quarter and and how you're thinking about it in a what your plans are to become a little bit more consumer friendly and and any impact that we would see an unplanned come
spk_21: so what what are the numbers for the quarter of year for the quarter
spk_11: in total it's about four million of which three million is ah
spk_3: for the fees and a million is and sf fees back where it where it obviously that's a very topical discussion right now laurie and i would say we're we're looking at our practices
spk_33: one thing i would note and i think most this is true for most of the banks who is where are the place without charge and account level three on our accounts so basically their their fee free as i think that's all the different lives a larger bags out there and some were thinking through consideration wise
spk_38: the and they're so we're looking at both odie as well as nsf a me and assassin particular
spk_9: nothing can have decided at this point about the i guess the laughing i would say is our practices have evolved pretty dramatically
spk_33: over over the past several years really and they're always in the direction of
spk_39: be more supportive to our client base effect for gonna continue to evolve in that direction but a clearly there's there's a lot of activity around that space right now we're aware of that
spk_0: okay proper okay and then question i'm married a fun it for you and i love your alarm production quality it by i it gets it's great and preset all their credit detail and coat yeah you're with their loans act ppp it at one twenty two it looks like they're philip chunk of covert question can you help the think about it
spk_28: we're that reserve alone lonely may go in terms of a thinking about a normalized lama provision
spk_35: i would expect it to move back to where we were deal on pre coven which was really at about ninety nine basis points in total coverage
spk_40: right thanks for taking my question
spk_0: the killer
spk_2: or next question comes from cali model kbw
spk_0: i am the think thriving each i'm back on i just wanted to ask i'm at the and quickly on the tax rate is twenty three percent sell a good ah rate use for the full year

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.