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| So we're encouraged by the stability of the deposit base, and we're encouraged with the dynamics that we see, but more recently relative to earlier in the year |
| As with the other loans we've talked about before, they are really strong sponsors, and we're very comfortable and they continue to perform actually |
| We continue to feel good about the dividend and the way that we've been thinking about our capital over the past couple of quarters |
| And going out there a few times to meet with our customers and the community and most importantly, our employees, it really gives me a lot of hope that we can do this and do this in a way that builds we'll hand it back in a way that we're all comfortable with and proud of |
| We feel good about the regulatory ratios, clearly, but no new plans in terms of executing on the buyback at the moment |
| Hawaii economy actually remains strong |
| And so we've actually benefited from all that because while we have recognized that in the industry, there are some concerns, we are actually still very comfortable with our position |
| We continue to grow capital and credit quality remained excellent |
| Our balance sheet remains solid |
| Even more encouraging is the increase in arrivals from Japan with year-to-date arrivals of 331,000 visitors, significantly higher than the prior year |
| We've just had very good loan quality and one of the results of that is that there's one or two loans that go one way or the other |
| The bank maintained its strong credit performance and healthy credit metrics in the third quarter |
| Our deposit base continues to show its strength as we grew balances in the third quarter |
| We continue to have strong liquidity |
| The visitor industry performed well on a year-to-date basis |
| Credit quality remains strong with LTVs manageable and criticized loans comprising, excuse me, continuing to comprise a very small portion of the portfolio |
| We were able to recover without any damage, all of our customer safe deposit boxes, and we're able to return them to them |
| So we feel pretty good about the expense run rate as it exists today from Q3 to Q4 |
| So I think it's a generally pretty stable and good story for us heading into the end of this year and into next year |
| But the good news is our employees and retirees are safe |
| We continue to maintain strong capital levels with a CET1 ratio of 12.2% and total capital ratio of 13.38% at quarter end |
| So some good news there |
| They've made a tremendous amount of progress |
| I mean, regulatory capital is pretty strong |
| Turning to slide two, I'll provide some highlights of our solid third quarter financial performance |
| We had good growth in CRE loans, primarily driven by $150 million of completed construction loans that converted to CRE |
| Through August, total visitor arrivals were up 8% over the previous year and total spend was 10% higher |
| So we're actually quite comfortable |
| Net income was $58.2 million, $0.46 per share as we grew retail and commercial deposits |
| I mean I think we would still have an ability to have the margin go higher even with slight downticks in the noninterest-bearing deposits |
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| We had thought that there would be higher floor plan balances and they were down marginally, but the strike has created uncertainty as well |
| We had some headwinds from the dealer floor plan |
| However, we did see a downturn in arrivals after the Maui fires on August 8th |
| Certainly, in the consumer side with residential down dramatically |
| So it's not us slowing down for sure, but we have seen a softening in demand |
| Before we get started, I just want to say a few words about what happened in Maui and the tragedy of the fires there on August 8th saddens all of us to see the loss of life and just the destruction that happened |
| Noninterest income was $46.1 million this quarter, a $1.3 million decline from the prior quarter |
| Median sales price for a single-family home on Oahu in September was $1.1 million, 4.5% below last September |
| Period-end loans and leases were $14.4 billion, about $30 million lower than Q2 |
| Net interest income declined by $2.8 million from the prior quarter to $157.1 million |
| The total visitor arrivals in August were 7% below August of 2022 and visitor spend was 9% below August of 2022 |
| But those -- the loan demand does seem to be softer |
| Our Lahaina branch was destroyed in the fire |
| I want to say thank you to our employees, who were out there to support our customers and the community and everybody there, it's a very difficult situation |
| Our annualized year-to-date net charge-off rate was six basis points, four basis points lower than in the second quarter |
| HELOC has softened a bit |
| Expenses were $119.4 million, $1.5 million lower than the prior quarter |
| The net interest margin declined by five basis points to 2.86% |
| This decline was primarily due to lower BOLI income due to the higher interest rates |
| So there's nothing out there that we're concerned about |
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