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Bank of Hawaii Corporation (NYSE:BOH)

Q2 2008 Earnings Call

July 28, 2008 2:00 pm ET

Executives

Cindy G. Wyrick - Senior Vice President, Corporate Secretary, Manager of Investor Relations

Allan R. Landon - Chairman of the Board, Chief Executive Officer

Kent T. Lucien - Vice Chairman of the Board, Interim Chief Financial Officer

Peter S. Ho - President, Chief Banking Officer

Mary E. Sellers - Vice Chairman, Chief Risk Officer

Analysts

Brent Christ - Fox-Pitt, Kelton

Brett Rabatin - FTN Midwest

Andrea Jao - Lehman Brothers

Erika Penala - Merrill Lynch

Frederick Cannon - Keefe, Bruyette & Woods

Aaron Deer - Sandler O’Neill & Partners

Operator

Good day, ladies and gentlemen, and welcome to the second quarter 2008 Bank of Hawaii Corporation earnings conference call. My name is Heather and I will be your coordinator for today. (Operator Instructions) I would now like to turn the presentation over to your host for today’s conference, Ms. Cindy Wyrick, Director of Investor Relations. Please proceed.

Cindy G. Wyrick

Hello, everyone. Thank you for joining us today as we review the Bank of Hawaii Corporation’s financial results for the second quarter of 2008. With me this morning is our Chairman and CEO, Al Landon; our Vice Chairman and Chief Financial Officer, Kent Lucien; our Vice Chairman and Chief Banking Officer, Peter Ho; and our Vice Chairman of Corporate Risk, Mary Sellers.

Unidentified Participant

Peter is now our President, Cindy.

Cindy G. Wyrick

My biggest mistake -- Peter is now our President. Congratulations, Peter. I didn’t demote you.

Peter S. Ho

You had me holding my breath there for a second.

Cindy G. Wyrick

Comments today will refer to the financial information that was included in the earnings announcement released this morning. Before we get started, let me remind you that today’s conference call will contain some forward-looking statements and while we believe our assumptions are reasonable, there are a variety of reasons that the actual results may differ materially from those projected.

And now I would like to turn the call over to Al Landon.

Allan R. Landon

Thank you, Cindy. Good morning, everyone. Bank of Hawaii again delivered solid financial results in the second quarter of 2008. We achieved our major financial performance objectives. Our net interest income and margin expanded. We set aside some additional reserves for loan losses and strengthened our capital. Our credit profile remains strong even as the Hawaii economy slows.

Before I comment on the economy, Kent will review some additional highlights of our second quarter results. Kent.

Kent T. Lucien

Thank you, Al. Good morning. Net income for the second quarter was $48.3 million, or $1.00 per share, compared to $0.95 per share in the second quarter of 2007, a 5% increase. Our return on average assets was 1.85%. Return on equity was 24.82%, and our efficiency ratio was 50.01%.

For the first six months of 2008, net income was $105.5 million, or $2.18 per share, up $10.4 million compared to 2007. You may recall that in the first quarter, we had the Visa IPO transaction and an early buy-out of an aircraft lease, offset with the accrual of various expenses, which netted together added approximately $0.20 per share to our results. Excluding the significant items, net income was $96 million, or $1.98 per share for the first half of 2008, compared to net income of $95.1 million, or $1.89 per share in 2007, which is a 4.8% increase.

In the second quarter, net interest income was $107.4 million, up $5 million from the first quarter and up $8.3 million from the second quarter 2007. The net interest margin was 4.41% this quarter, an increase of 24 basis points from the linked quarter, and up 29 basis points from last year. Net interest income benefited from a steeper yield curve, which resulted in lower funding and deposit costs that more than offset lower asset yields. Our effective cost of funds decreased 56 basis points in the second quarter, while the yield on earning assets declined by 18 basis points.

Non-interest income for the second quarter was $60.5 million, down $25.6 million from the first quarter and up $2.5 million compared to the second quarter of 2007. Excluding the significant items, non-interest income was virtually level with the first quarter. Increases in trust and asset management income, fees, and other service charges were offset by reductions in mortgage banking and insurance income. Year-to-date, non-interest income is up 2% versus 2007, excluding those significant items.

Mortgage banking, service charges, fee income, and insurance are all up, while trust and asset management income is down 4%.

Non-interest expense was $83.9 million in the second quarter, a decrease of $9.6 million from the first quarter. Excluding the first quarter significant items, non-interest expense was $83.2 million in the first quarter, and so our expenses increased approximately 1% sequentially.

Year-to-date, expenses are up 3%. A portion of this is due to higher occupancy expenses associated with the new branch in Waikiki. We are also seeing higher utility expenses system wide. Our operating leverage was 5.1% in the quarter.

Our efficiency ratio was 50.01% for the second quarter, compared to 49.62% reported in the first quarter and 50.88% in the second quarter of last year. A provision for credit losses was $7.2 million. Net charge-offs were $4.7 million and we added $2.5 million to our reserve for credit losses. We did this to account for what we believe to be continued weakness in the airline industry and our exposure via portion of the lease portfolio. Our airline/aircraft exposure is $81 million and the associated loan loss reserve is $33 million.

Our effective income tax rate was 37% versus 29% in the first quarter, and compared to 35% in the second quarter of 2007. The effective rate was lower in 2007 due to the settlement with the IRS regarding lease-in, lease-out transactions and also foreign tax credits in that period.

Shifting now to the balance sheet, outstanding loans and leases totaled $6.52 billion at the end of the period, a decline of $61 million from the previous quarter and $48 million lower than last year. Loan balances reflect the impact of more stringent underwriting standards and a slowing Hawaiian economy. We continue to reduce our construction lending exposure, which was $168.7 million at the end of the quarter, versus $190.5 million at the end of the first quarter and compared to $261.5 million last year. The indirect automobile portfolio was also reduced by $17 million during the quarter.

Our investment securities portfolio was $3 billion at June 30, down $48 million from the first quarter. During the quarter, we also reduced our long-term debt by $34 million.

Period end deposits decreased $199 million this quarter to $7.9 billion. Average deposits were $7.96 billion, essentially unchanged from the first quarter but up $148 million from the second quarter of 2007. The increase over the period year occurred largely in savings deposits, which increased $178 million. Our focus in 2008 has been on enhancing checking and saving deposit products. Our new deposit products include free checking, mobile banking, online account opening, and an enhanced bonus rate savings account.

Asset quality remained strong, despite a slowing Hawaiian economy. Non-performing assets totaled $6.7 million at the end of the second quarter, compared to $6 million at the end of March and $6.3 million at the end of last year’s second quarter. As a percent of total loans and leases, non-performing assets were 10 basis points, one basis point higher than the first quarter and the same as the second quarter of 2007. Loans past due 90 days or more were $4.2 million, down $1.7 million from the first quarter. Our allowance for loan and lease losses is $102.5 million, which represents 1.57% of total loans.

We continued our share repurchase program in the second quarter, albeit at a lower level. In the quarter, we purchased 220,000 shares at a total cost of $11.4 million. On May 15th, we exercise our option to call the remaining $26.4 million trust preferred securities, which previously qualified as tier one capital. Accordingly, we lower the share repurchase level in order to maintain our tier one capital level.

Since quarter end, we have purchased another 181,000 shares. At quarter end, our leverage ratio was 7.04%, up slightly from 6.99% at March 31. Also, consistent with our conservative approach, we have decided to continue to reduce our leverage somewhat, and are now targeting a leverage ratio of 7.25% by the end of the third quarter, versus our previous target of 7%.

Finally, our board, consistent with the prior three quarters, declared a $0.44 per share dividend last Friday.

And now, I’ll turn the call back to Al.

Allan R. Landon

Thanks, Kent. In our earnings announcement this morning, we indicated that the Hawaii economy is slowing, consistent with the indications we discussed in our last two earnings calls. Visitor arrivals have decreased due to fewer airline choices, higher prices, and economic uncertainties. Hawaii unemployment has increased slightly and we are seeing some companies reduce their workforce.

While the number of home sales has decreased significantly, the value of homes has decreased only a small amount in Honolulu. Prices on neighbor islands have decreased more, led by vacation homes.

As Kent mentioned, we’ve continued to decrease our exposure to higher risk loans and increased our reserves. We expect to maintain our disciplined management of credit as we evaluate new lending opportunities. Overall, the slowing economy has not had a major impact on the credit quality of our Hawaii portfolio.

During the last year, we have conservatively managed our balance sheet. We are now adding new deposit products and improving our distribution systems in anticipation of opportunities to add customer relationships.

We continue to see Bank of Hawaii's capital generation from income as strong. As Kent mentioned, we increased our capital target slightly. Given our margin expansion, we’re maintaining our goals of positive operating leverage and earning 1.7% on assets and 25% on equity.

Now we’re open for questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Brent Christ with Fox-Pitt. Please proceed.

Brent Christ - Fox-Pitt, Kelton

Good morning, guys. With respect to the revised leverage ratio target, could you talk a little bit around the thought process in terms of making that change in terms of just kind of what you are seeing, I guess from a macro perspective? And then specifically, any thoughts in terms of the -- how you are going to get it up to 7.25 from I guess 7.02% at the end of this quarter, whether that’s slowing the buy-back a little bit or further shrinking the balance sheet?

Allan R. Landon

Sure. I think just in light of what is going on in the industry and what the economy has been doing here, we thought a little bit of capital generation demonstration was appropriate, so rather than the 7% that we had talked about before, we thought taking it up to 7.25% and seeing how the economy looks was the prudent thing. We accomplished that by replacing with equity basically the tier one or the trust preferred shares, or shares that we repurchased or redeemed last quarter. We did that by slowing the repurchase program. We expect a more robust repurchase amount here in the third quarter but probably slower than where we had been previous to the second quarter, so we’ll just gradually let it move up to 7.25 and take a look at how things appear at that point.

Brent Christ - Fox-Pitt, Kelton

Okay, and in terms of the timing, did I hear you correctly though that you wanted to get it up to those levels in the next quarter?

Allan R. Landon

I think that’s probably a general target but we’ll see what happens here with stock values. But we would plan to stay in the market, as we have -- what’s our phrase been, orderly and disciplined manner.

Brent Christ - Fox-Pitt, Kelton

And then a question on credit quality -- I guess you’ve built reserves for a couple of quarters here and specifically cited the airline portfolio as part of the rationale, but if you back out the specific airline allocation, I guess it puts the reserve on the remainder of the portfolio at about 110 basis points, give or take, if my math is correct. And just kind of your thoughts on any future desires to build the reserves across some of the other portfolios?

Allan R. Landon

Mary, do you want to address that?

Mary E. Sellers

Brent, the one thing you need to keep in mind when you look at our reserve coverage is the amount of residential mortgage we carry on our portfolio -- in fact, the total amount of consumer booked compared to commercial. So if I do some adjustments, I’m probably at about 157 on the commercial book.

Brent Christ - Fox-Pitt, Kelton

Okay, and then just kind of in general, thoughts on needing to, or desires to provide in excess of charge-offs over the foreseeable future?

Allan R. Landon

We’re just going to take a look at it every quarter, as we have been. We’ve got a pretty specific methodology that we follow that looks at the economic indicators, as well as levels of recent charge-offs, and we’ll focus on it every quarter. Right now we’re comfortable with where we see the allowance but as the economy changes or indicators change, we’ll just adjust accordingly. That said, we don’t see anything right now that would require a major move in the reserve levels, Brent.

Brent Christ - Fox-Pitt, Kelton

Okay. Thanks a lot.

Operator

Your next question comes from the line of Brett Rabatin from FTN Midwest. Please proceed.

Brett Rabatin - FTN Midwest

Hello, everyone. I wanted to first ask on just the local economy, I’m curious if you -- with the hotel occupancy rates going from the mid-70s down to 73 I think I hear recently, seasonally adjusted probably 70% in -- have you guys stressed test your CRE portfolio from a hotel perspective? I’m curious if what you are seeing in terms of a little softer economy, if you’ve sort of run a stress test in a portfolio for the trends we’re seeing the last quarter.

Allan R. Landon

Mary, do you want to talk about stress testing?

Mary E. Sellers

Sure -- a near and dear subject to my heart. We run stress tests across all our portfolios to include our commercial real estate portfolio. I would say that we have pretty nominal exposure to the hotel industry, roughly $40 million in total.

Brett Rabatin - FTN Midwest

Okay, and then with what you saw in the quarter on the indirect auto portfolio with losses being a little lighter, was that a reflection of just being aggressive in the past couple of quarters with recognizing softer trends? Can you give any direction on why the loss rates in 2Q were lower on auto type facilities?

Mary E. Sellers

Two things I’d cite: one, we’ve been tackling the underwriting in that portfolio for the past two years, so I think we’re starting to see some of that. And then the second quarter is always historically the low point for net charge-offs in our consumer book.

Allan R. Landon

Mary, as you look forward, would you expect to be able to stay at the second quarter charge-off rate or is that likely to move back up a little bit in the third quarter?

Mary E. Sellers

I’d expect some migration back up through the remainder of the year. People tend to get tax refunds, stimulus checks, et cetera that kind of pulled down the second quarter number.

Brett Rabatin - FTN Midwest

Okay. And then I had a question on balance sheet management and just the margin was obviously very strong in the quarter, which was great and the CD cost, the almost 3% cost in CDs, you’ve managed that down over 60 basis points linked quarter. I’m just curious what you see the competitive environment like and if you expect the cost of funds to continue to be a positive, relative to the margin, and if not if you’ll be doing things on the asset side from a decline in securities perspective, or just balance sheet management in general.

Allan R. Landon

Well, we’re going to pay close attention to both what’s going on here competitively, as well as our own balance sheet. This has been a good time to focus on transaction accounts that carry a lower cost. I would expect to see us decrease our total funding and probably increase the rates that we pay on CDs. We’ll probably use more CD specials, Brett, to lengthen the maturity of that source of funds a little bit, if the market gives us an opportunity. We like the margin where it is right now and of course the issue will be how do we preserve that through yield curve changes, and what we would expect to do is try to lengthen on the time deposit side a little bit. And then we think there may be some opportunities to further increase our number of -- out amount and number of transaction accounts. We just introduced a free checking product that seems to be quite well-received and we’re optimistic that continued promotion of that will help us grow transaction accounts as well.

Brett Rabatin - FTN Midwest

Okay, and just lastly, any quick commentary you might have on -- I’ve heard locally that maybe Hawaiian Airlines will be able to help pick up the slack in the seat, or the air lift reduction, that they might have 15% extra capacity potential. I didn’t know if you guys had seen anything about that or had any thoughts about visitor trends going forward after what we’ve seen the past two or three months.

Allan R. Landon

Well, we know that Hawaiian is interested in filling up capacity opportunities. They’ve ordered some new planes and Mark and his team -- that’s a well-run company, by the way, in a pretty tough industry, but they are focused on ways to expand arrivals into Hawaii, whether they come from the mainland or come from overseas. So we’re optimistic there’s always longer term kind of forecast or revert to the mean, but it seems like the folks at Hawaiian are nicely focused on what they can do to improve our visitor arrivals here.

Brett Rabatin - FTN Midwest

Okay. Thanks for the color.

Operator

Your next question comes from the line of Andrea Jao with Lehman Brothers. Please proceed.

Andrea Jao - Lehman Brothers

Good morning, everyone. First a question on deposits; last quarter, you had a large commercial demand deposits, which came in. I was wondering if that has already left the bank.

Allan R. Landon

Peter.

Peter S. Ho

That was an international deposit actually, Andrea, and it was just under $70 million just prior to the quarter end last quarter. And by the quarter end Q2, that was down to about $2 million, so that was a big chunk of the rundown in spot balances that you saw.

Andrea Jao - Lehman Brothers

Okay, great. Do you guys still expect commercial and commercial real estate to kind of contribute to loan growth as indirect construction and leasing kind of run off?

Peter S. Ho

I would say, Andrea, that we would anticipate the construction book to continue to come down a bit, just based on what’s happening out here in the marketplace. You’ll notice that our commercial mortgage or our permanent mortgage book on the commercial side performed quite nicely from a volume standpoint. We think there’s more opportunity there because it seems as though a lot of the business that had traditionally over the past couple of years been slow in the conduit markets really is starting to open up for us. So it’s really construction versus permanent mortgage on the growth side.

Andrea Jao - Lehman Brothers

And on the retail side?

Peter S. Ho

On the retail side, on the residential mortgage front, obviously transactions are down so that’s impacting our business somewhat volume-wise, but then similar to the commercial side, we’re also seeing less competition out there. Countrywide is not as aggressive as they have been. Indie Mac was a pretty large lender out here, First Magnus was a large lender out there, and even Wells Fargo seems to be getting a good bit more conservative at the larger end of the market.

Andrea Jao - Lehman Brothers

So you think those portfolios would hold steady in coming quarters?

Peter S. Ho

That’s our thought.

Andrea Jao - Lehman Brothers

And to follow-up with a question for Mary; if you could remind us what mortgage, what residential mortgage and what home equity products Bank of Hawaii is offering and portfolio as well as the LTVs for the book of business, and if you have the numbers, the delinquencies.

Mary E. Sellers

Sure. On the residential mortgage front, we do not offer Alt-A non-traditional type products. If you look at our portfolio, 95% has an LTV less than 80%. Of the 5% that’s greater than 80, which is only 2.6 million of that, is not covered by mortgage insurance. We are very conservative in the type of products we offer and in our underwriting standards. We do have an interest only product that’s underwritten very conservatively. It is underwritten for a fully amortizing payment and in fact, the credit stats on that tend to be stronger than the balance of our portfolio.

In terms of our home equity portfolio, a similar type of profile. Right now, we have topped out our maximum LTV on our home equity at 85% and we require that Bank of Hawaii hold the first position on that. If I look, about 75% of our portfolio has LTVs less than 80%, and in terms of what’s over 90%, that’s only about $18 million.

Andrea Jao - Lehman Brothers

Okay. Did I understand you correctly that you require first position on your entire home equity book?

Mary E. Sellers

On anything over 80%.

Andrea Jao - Lehman Brothers

Okay, so how much of the book would you say are first liens versus second liens?

Mary E. Sellers

About 80%. We don’t have totally complete data and we have to make a few assumptions, but we are running about 80%.

Andrea Jao - Lehman Brothers

Okay. Thank you very much.

Operator

Your next question comes from the line of Erika Penala from Merrill Lynch. Please proceed.

Erika Penala - Merrill Lynch

Good morning. My questions have been asked. Thank you.

Operator

Your next question is from the line of Fred Cannon with KBW. Please proceed.

Frederick Cannon - Keefe, Bruyette & Woods

Thanks and good morning. Just two questions; most of mine have been answered. First, I was wondering if we could get some color on the available for sale portfolio. I noticed that the yield on the portfolio went up linked quarter and year over year, so I was wondering kind of what you are reinvesting in. And also, I noticed that there was a negative OCI mark, about $20 million, and was wondering if that was related completely to rate issues and not to credit issues.

Allan R. Landon

Kent, do you want to tackle that? We don’t have much color in our AFS portfolio, Fred. It’s pretty plain vanilla stuff.

Kent T. Lucien

Yes, the majority of the portfolio, of course, is mortgage-backed securities by the GSEs. That would be about $2.5 billion out of the $3 billion. Obviously we take a very conservative approach to reinvestment and we’ll continue that approach. The $10.8 million that you saw in the comprehensive income is interest rate results and not credit.

Frederick Cannon - Keefe, Bruyette & Woods

Great, thanks. That was helpful. Also, I was wondering if you could talk a little bit about the leases and in particular, it was nice to see you guys had a recovery on the LILO lease I think of about $1.5 million. And I was wondering if there was any update on the current situation on the SILOs as well.

Kent T. Lucien

Nothing significant on the SILOs. We’re still in discussion with the internal revenue service on that matter, so nothing to report. The LILOs, of course, were settled with the service last year, and so that was the reason for that lower effective rate last year.

Allan R. Landon

Yeah, that was a 2007 accounting event, right, Kent, on the LILO --

Kent T. Lucien

On the LILOs and the SILOs are still to be resolved.

Frederick Cannon - Keefe, Bruyette & Woods

And could you remind us what exposure you have on the SILOs?

Allan R. Landon

Let’s see -- our net recorded investment, if I recall correctly, is under $100 million and we’ve done some provisioning in connection with accounting changes over the last year-and-a-half, Fred. I think it was the beginning of 2007, so notwithstanding the court settlements out there, we think that we are fairly well-protected at this point. Of course, as Kent said, you continue to talk to the IRS and what looks good today shouldn’t be construed as a prediction of the future but at this point, we think we’re comfortable where we are.

Frederick Cannon - Keefe, Bruyette & Woods

Great. Thanks very much.

Operator

Your next question comes is from the line of Aaron Deer with Sandler O’Neill. Please proceed.

Aaron Deer - Sandler O’Neill & Partners

Good morning, everyone. Just a quick follow-up on the air transport leases. I know it’s small, it’s just a little over 1% of your portfolio, but I was wondering if you could provide any detail on the -- I guess that would give us some comfort that the reserve there is adequate, given what is going on in that market.

Allan R. Landon

I wish we could promise you we had it all figured out. We can’t -- equity interest in those leases, and I think we’ve got 10 different leases totaling about $80 million. The domestic passenger carrier portion of that is about $60 million, against which we’re a little over 50% reserved. We’ve got a mix of larger aircraft and regional jets in there, and a mix I believe we must have eight carriers in that segment of the portfolio from -- I want to say the relatively stronger to not quite as strong. I don’t know how you describe mainland air carriers in terms of strength but we’ve got a mix across the spectrum and as we take a look at it, that’s really a challenging business for the folks in it.

We think we are where we ought to be right now but that depends on what happens with future fuel prices and so many other variables out there, Aaron. That’s maybe as bold as I ought to be in saying anything. We just continue to look at it every quarter and we’ll adjust as we see needs arise.

Aaron Deer - Sandler O’Neill & Partners

Fair enough. That’s helpful, Al, and all my other questions have been asked, so thank you.

Operator

Your next question comes from the line of Julian [Casarino] with [Prospector Partners]. Please proceed.

Julian Casarino - Prospector Partners

Good afternoon. I just wanted to clarify your answer to Andrea Jao’s question about the first lien position in the home equity portfolio. Did you say 80% of the home equity portfolio is first lien?

Mary E. Sellers

Actually, I’m glad you asked this question because I should clarify it; I confused two things. We do not have complete data on our lien position and we are in the process of building that out but in terms of what’s originated through our retail network, 80% is originated through our retail network, 20% is originated through a broker channel.

Julian Casarino - Prospector Partners

Okay, those are all in Hawaii, right? Those are all properties in Hawaii?

Mary E. Sellers

It is all in Hawaii. We do -- you’ll recall on home equity, have a small piece of mainland portfolio left that’s a run-off from a portfolio purchased several years ago, down to about $30 million.

Allan R. Landon

And we purchased that, Mary, in maybe 2002, or something like that? So pretty seasoned at this point.

Mary E. Sellers

Pretty seasoned.

Julian Casarino - Prospector Partners

Okay, so $30 million of the total home equity portfolio is on the mainland and in run-off mode right now?

Mary E. Sellers

Right.

Julian Casarino - Prospector Partners

And the broker -- I guess I’m just curious; why do you need brokers to originate home equity loans on the islands?

Allan R. Landon

I could give lots of attempted clever answers at that. It’s just a traditional part of the business network out here, and we’re happy to originate directly but it seems that we get competition from brokers and that’s just part of the origination network. Peter, anything you want to add to that?

Peter S. Ho

No, I think that’s it.

Allan R. Landon

In fact, every banker probably thinks they need no brokers, but it doesn’t work quite that way here.

Julian Casarino - Prospector Partners

Okay, well, thank you very much.

Operator

(Operator Instructions) Your next question is a follow-up from the line of Andrea Jao with Lehman Brothers. Please proceed.

Andrea Jao - Lehman Brothers

Hello again. Fees exchange and other service charges were up $1.1 million in the quarter. Could you talk about the drivers there and if that level is sustainable in coming quarters?

Kent T. Lucien

The bulk of that growth for the quarter was in our commercial area and those fees were kind of split between syndication and admin agent fees, as well as some swap fees. So I would anticipate that the swap fee income should continue. We’ve got a pretty good pipeline there. The syndication fees may whittle down over the course of the year, about half-half.

Andrea Jao - Lehman Brothers

Okay, and then insurance should bounce back next quarter -- is that strong every other quarter, right?

Kent T. Lucien

We hope so.

Allan R. Landon

That’s been the cycle.

Andrea Jao - Lehman Brothers

Are there non-recurring items in other income and other expenses that we should be aware about?

Allan R. Landon

The only one I can think of is we annually adjust our reserves for self-insurance on the expense side in the second quarter, and so that would have reduced our expenses between $0.5 million and $1 million, Kent? I can’t remember the exact number but it’s in that range, Andrea.

Andrea Jao - Lehman Brothers

Okay. Thank you very much.

Allan R. Landon

Kent says it’s one, Andrea.

Operator

As there are no further questions in queue at this time, I would like to turn the call back over to Cindy Wyrick for closing remarks.

Cindy G. Wyrick

I would like to thank everyone for joining us today and for your continued interest in the Bank of Hawaii. As always, if you have additional questions or need further clarification on any of the topics we’ve discussed today, please feel free to contact me, 808-694-8430. Have a good day, everyone.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes your presentation. You may now disconnect.

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