BOH
#Yes, that's correct.
The total is $14.2 million, and it had been $13.5 million in the previous quarter.
Right.
Yes, as I mentioned, we're reinvesting at right now minus 33 basis points.
So it's a little bit tighter in terms of duration, and the interest rate environment hasn't been that robust; so that's what's creating that.
Well, we were down about 4 basis points on average compared to the second quarter.
But as I mentioned in the formal remarks, the fact that we are growing loans at such a strong pace is producing higher total interest revenue.
I think the lease portfolio, Aaron, we'll continue to see bleed down, probably at the same rate we've seen for a few years now.
So what we're bringing on in that portfolio are good basic operating leases to commercial operations here in town.
And what's coming off, obviously, as you all know, are legacy national leveraged transactions.
The net effect of that is going to be that the portfolio is going to shrink.
Overall, all of our asset ---+ all of our lending categories are performing very well right now.
CRE has been the headliner for a good amount of time; it continues to be through the third quarter, and we think we still have some space left in this cycle for continued growth.
Having said that, we're pretty mature in both the commercial and in particular the commercial real estate cycle.
Really what you're likely to see is, as our core relationships begin to pull back in light of pricing in the marketplace, you'll likely see us doing the same.
Residential mortgage has been very strong as a result of just the environment.
The refinance market had been reasonable, and we've also had a good amount of condominium projects where we've been the beneficiary of good amount of market share as those projects have come to market.
We're going to see a bit of a dip in that segment.
We're between projects, if you will, in the cycle; so we may see some pressure on residential mortgage loan growth the next couple quarters, but we've got some projects down a year or so from now.
Then finally on the other consumer side, home equity and indirect and installment and credit card, those portfolios are growing very nicely for us and really I think are a reflection of what's happening with the economy here in town.
We did.
Production.
<UNK> has the number here.
It was about 180.
And that includes the servicing rights.
Yes.
Well, as we mentioned, the real estate had an impact.
We may have some future real estate transactions that would be one-time in nature.
Other than that, the one-time items were really in the second quarter.
I mentioned the 401(k) transaction.
We had BOLI insurance benefits that were paid in the second quarter.
So it's those types of things that are possible.
The BOLI is always possible into the future.
The 401(k) transaction is not going to repeat into the future.
Yes, it was $1.4 million.
It was actually two separate transactions and there had been a small transaction in the second quarter.
So the swing or the delta was $1.4 million this quarter.
That's correct.
The only caveat to that is that we do have various pieces of real estate that we may sell from time to time.
And so that could impact it, but you're right on the general principle.
Resi mortgage is 4%, in that neighborhood.
That would be typical for a 30-year mortgage.
Sometimes there is blending in there of 15-year mortgages which can impact that.
Right.
And the commercial ---+ let's see.
The commercial mortgage space is coming on at about what's on the balance sheet right now.
Well, the resi mortgage had been 4.14% in the second quarter.
So you're blending in at a lower yield.
Then when you take account of the fact that it's not all 30-year mortgages, ---+ there's some 15-year mortgages in that number ---+ that would be the reason.
Right.
On average, right.
But I think directionally, your sense that pricing is getting tighter is probably correct.
I think versus a year ago, I would say the resi mortgage market is tighter, particularly at the jumbo end of the spectrum.
Commercial real estate is pricing-wise probably tighter.
C&I for obvious reasons is probably the tightest, but has been for some time now.
Yes, well, I think it's tough to tell because it's a dynamic situation.
But directionally I would say the market is getting more competitive, which would allude to the fact that pricing may get tighter.
Well, I think what we're always looking for are reasonably granular, sticky relationship deposits.
So to the extent that we can expand that book of business, we're always looking to do that.
Ironically, we're probably the lowest paying deposit institution in this market which, as you know, is a pretty low cost of deposit market.
And yet we've over the years had just a bounty of deposit flow in.
So those will come in and those will go out; we intentionally maintain a good amount of liquidity because what we're really focused on is our relationship deposits.
So if spot balances bounce from quarter to quarter, frankly that doesn't bother us as much as just understanding where we are with our relationship deposits ---+ which, as I look at it, core consumer and core commercial have been growing nicely for us on an average basis.
The plan is to sell stock next year, and probably of the same magnitude as we've done this year and really going back one previous year.
Whether it occurs exactly in the first quarter, I can't predict that at this moment.
But, yes, the trend is ---+ the desire is to sell another slug of stock.
Not much on the way of seasonality, <UNK>, because given our economy out here we don't have a lot of seasonal lending type of activity.
But yes, we have had some payoffs.
The C&I book is probably our least granular or most chunky portfolio for us, so we do see swings as we close on something or if something pays off.
I guess what I would say is, of all of our commercial portfolios that's probably the portfolio that we're looking for just a steady ---+ I won't call it flatlining, but we're looking for that portfolio to be steady versus growth out into the future.
Well, really for us in this marketplace there are three factors that come into play.
We've got a lot of project financings in the market right now.
So that in any given quarter can produce a pretty good slug of volume for us if we're the dominant mortgage provider for a particular project as it comes online.
For-sale business, purchase business, has been pretty steady here in the islands.
As long as sales volumes continue on the path that they have, which has been mid-single-digit growth, that should be pretty steady for us.
Obviously, we'd like to do more of that business if we can.
I think the swing factor is going to be refi, and refi is going to be a function of what happens rate-wise.
So if we see rates drop or at least remain stable, that should be reasonable business for us.
If rates move up sharply, then obviously that's going to have a negative impact on volumes.
I'd like to thank everyone again for joining us today and for your continued interest in Bank of Hawaii.
As always, if you have additional questions or need further clarification on any of the topics discussed today, please feel free to contact me.
Have a great day, everyone.
