First Hawaiian, Inc. (FHB) Earnings Call Transcript & Summary

All right. Good afternoon, everyone. So rounding out day 1. We are pleased to have First Hawaiian joining us once again. Looking great in their Hawaiian shirts. The bank has done an excellent job managing during the pandemic, despite the entire tourism industry being shut down, which resulted in mid-teens unemployment. However, you wouldn't know it looking at the company's credit metrics as its conservative underwriting culture has shined through the past few quarters. In addition, despite headwinds from lower interest rate, the bank has continued to manage its profitability by putting a tight hold on expenses. So here to tell us more about the path ahead is Chairman and CEO, Bob Harrison. Also joining Bob is, Chief Financial Officer, Ravi Mallela. And is Ralph joining us?

Yes.

Yes, I'm here.

Hi, there, Ralph. Also joining us is Chief Credit Officer, Ralph Mesick. Sorry, Ralph, I didn't see you there before. Today's presentation is going to be fireside chat. So first off, welcome, and thank you very much for joining us this year.

Thanks for having us, Ryan. It's great to be back with you again and can't wait till we can do it in person.

Absolutely. So Bob, maybe we can start off big picture following a second lockdown period in September. Hawaii has begun reopening to some mainland visitors without the need to quarantine as much. How is that process going? And what are you seeing going on in the Hawaiian economy and the Hawaiian consumer thus far?

Yes, great question. And really, as we had thought, it's going to be kind of a slow learning how to do this. So the governor announced a pre-travel testing program that he put in place a little while ago. Really at the beginning of October or mid-October. And so what you can do is get a test before you leave home, have it ready and read now before you get on the plane, when you show up, you present that electronically and you could go straight in and enjoy your vacation. So we went from a very few tourists at all to about 8,200 on average, total arrivals in November. Right about half of those being the tourists. And so we're starting to see a slow build of that number, and that's been really helpful. A few bumps along the road. has decided that last week, Wednesday, they were comfortable with that. And so they decided to go back to 2 week quarantine, which is creating a little bit of noise. But overall, it's kind of as we expected, people are coming back. They're enjoying their vacation, they're able to go home. And so that has happened. And I think part of the reason people are excited about coming over here is we've done a very good job controlling the pandemic. So though, last week, as of yesterday, 92 cases a day, 1% positivity rate. We've got enough infrastructure, contact traces and all that to monitor that carefully. And so we have been able to do a good job of that and keep people safe falling here on their vacation.

So I think in a recent presentation, you noted that, Bob, I think it was up to 6,000 to 8,000 a day and travel from Japan had opened back up. Maybe just talk about how does this compare to normal times? And is there a plan in place to get back to those levels? And maybe just talk about any green shoots you guys are seeing, whether it's bookings of airlines or hotels, and what gives you comfort that we could be back to more -- when would you expect to be back to some more normal levels?

Yes. That's another great question. We're going to see a slow build on that, Ryan, and it's going to take a little while. Last year, we hit an all-time high of 10 million visitors. So that's right about 30,000 a day. As I mentioned a minute ago, we're at 4,000 now. So it's going to take some time as people get more comfortable with traveling. And there are some green shoots. The hotels are reopening and not the entire property, but a few floors or a building some are doing better than others. They're focusing on the local traveler. It's vacation, so you have high occupancy on the weekend, a little bit lower during the week. So everybody keeps pivoting to find out what's going to work best. [ Claia ], as I mentioned, there might be a little bit of backsliding, but overall, I think that's what the focus is going to be. And as we see that continue to improve, I don't know if anybody wants to get back to 10 million a year because that was putting substrain on the system, but really focus on the tourists that we want to bring to Hawaii and then focusing on that. But it's not just that there's many other parts of the economy here, that tourism, although that's a key driver.

And I guess, just to pick up on that last point, Bob. I mean, so travel and tourism is a big part, not the only part, but it's a big part of the economy. And I think because of that, unemployment has remained well above where we are in the mainland. I think you guys are still in the teens. Relative to where we've got near the, who knows, if you could believe the numbers that we're seeing here. What are the main drivers for getting us back to that mid- to low-single digits level we were at at pre-pandemic? Is it all about tourism, or are there other industries that you would highlight that are being impacted as well?

Well, it's all a health issue, right? So even in the local economy where you have restaurants reopened. You've had physically distance within the restaurants. So there's fewer people doing in-person dining, much more takeout. But as you'd see the people getting the vaccine, you'll see those numbers increase and people will go back to work. Certainly not only the visitor customer, but also the local customer. And certainly, from a service perspective, the service part of the economy, a lot of that's driven by tourism as well. So as people start coming in larger numbers, that will continue. With what we still have, though, separates from that. We still have a strong military and government economy that is really important. It's about 8% or 9% of the economy here in Hawaii, and there's still continue to be strong investment, recently announced the whole rebuilding of one of the shipyards here, and that's going to mean series of probably 5 to 10 years of investment and really get ready for that new class of submarine. That's the type of investment I think we'll continue to see alongside the tourism economy.

Got it. So we've gotten some positive news over the last few weeks on multiple vaccines that have been developed. Can you maybe just talk about what a lot of your borrowing customers are doing high level to manage between now and the time the vaccine gets mass distributed? And how important is another round of stimulus or PPP to your commercial and consumer customers?

It'd certainly be helpful. It really had an impact. Actually, as Ralph and I were talking earlier today with some investors that had a greater impact than we would have hoped. And so it's been very positive impact. I can tell you the larger businesses have really pivoted. They've really been able to adjust quite well. Some of the smaller customers, it's been a little more difficult. Clearly, those with the tourism focus to those small restaurants, candidly aren't so much our clientele. They're out there, but they've been having to survive, really working with their landlord in lot of those cases to make sure that they can get through it. And the landlords are being very accommodative because they know that there's an end of this now, and you can kind of see over a period of time in the next 3 to 6 months where a lot of the people in the state will have, hopefully, and the whole country will have access to a vaccine and that they will be able to bring back workers, tourism can return. They want to make sure those businesses survive through this relatively short period to go, to come out on the other side.

Now one of the consistent themes that we've heard on the back of what you just noted is that the combination of further stimulus PPP combined with the fact that we need to see what the vaccine is going to mean, likely means that commercial loan growth is likely to be muted for a period of time. Maybe, Bob, as you talk with your commercial clients, how are they thinking about borrowing? What milestones do they need to see to get more comfortable borrowing? And over what time frame do you see this playing out?

Yes, there's clearly going to be a need to return to normal. And so while we're seeing some continued growth now in a couple of specific areas that we've talked about before, residential lending, obviously, is still very strong. A lot of long-term projects commercial real estate projects that are in the funding phase of their construction loans is doing well. But I think we're going to need to see some recovery on that. For the bank, in particular, a couple of things that we spend time on, won the dealer floor plan that maybe we can talk about in a minute. But also just under 20% of our loan portfolios on the mainland. At one point, it was a 22-plus percent. We brought that down a little bit last summer when we sold 400 million of our shared national credit loans. And now we're down about 18%. With the stronger economy on the mainland, I could see us growing that a little bit faster than the local economy loan portfolio in the short term. So a little bit of a comeback on that. Some of which will be Hawaii-driven, some of that will be mainland driven.

Maybe to dig into some of the things that you just mentioned. So we've seen floor plan balances decline as inventory has been depleted and OEMs have been trying to rebuild their inventory. Now we had a big -- the biggest U.S. auto lender this morning say, one of the more troubling things that they've seen is just that they actually haven't seen dealer floor plan balances come back. They've been really -- they've been stuck at low levels. And I'm curious, are you seeing the same trends as you speak with your dealers? What are their expectations regarding supply constraints? And do you think we're eventually headed back to prior levels? Or could we be -- I don't want to use the term structurally lower, but could we be lower for an extended period of time?

It's really interesting to see how that business is adapted. They've done a fantastic job, just like they did, quite frankly, after the initial part of the global financial crisis, they came back very strongly, and they're doing the same right now. As far as our return to higher balances. We've seen some of that. We've seen some growth, here in Hawaii, a little less growth in the California market, I think, in part because car sales are so strong in California. As soon as they get them in, they're selling them, which is a good problem to have. There is going to be a build back. I don't -- I can't tell you if it's going to be back to the levels we saw at the end of 2019. But I do know the business, been in it a long time, 20-plus years myself. And a lot of the volume -- a lot of the manufacturers are basing their programs based on volume. So there's an incentive for the dealer to take the inventory as it's presented to them. And otherwise, it's harder to get your allocation of the popular models or just vehicles in general in the future. So I think we'll see some build back from where we're at today as we've already seen start to happen. But I can't tell you if it's going to end up where we were at year-end or beyond that. But definitely, it will increase over today's levels.

Got it. Maybe just to go back to a comment you made regarding the mix of the portfolio or portfolio growth on -- in Hawaii versus the Mainland. Could you maybe just talk about the differing trends you're seeing in the portfolio from a growth perspective in Hawaii versus the Mainland? And then I guess, second, can you maybe talk about what are the areas of strength where you're putting more capital to work on the Mainland? And how big are you willing to let that portfolio go in the short to intermediate term, if the Hawaiian economy takes more time to rebound?

Sure. Let me start with that and then move backwards. It's -- we've always said we like the portfolio on the Mainland to be roughly 20%. It was up at 22%, almost 23% at one point. Now it's down to 18%. So we would see it continue to grow and that 20% plus or minus range. That's still quite a bit of growth for us. So when we get there, I'm sure the Hawaii economy will be kind of back in better health, and we'll see a lot more growth here. And that will keep that in balance. So I would see that kind of happening. It's not -- we're trying to outgrow the Mainland that we're doing here, but they're moving at different speeds. I'd like to put it that way. And then as we look at the mix and what we're doing on the Mainland, we're not looking to change that. For example, for many years now, we've grown our dealer floor plan based on referrals from existing dealers and also from our bankers who've worked with the customer in the past. So we're continuing that trend. We've had several new relationships in 2020, and it's been based on referrals from existing customers. And so that's the best kind to have. We're still very focused on couple of things we're doing on the commercial real estate side that probably Ralph could speak to a little better than I could. And really being that preferred participant for banks who want to share some of their exposure, but maybe not with an end market competitor. So that's worked very well for us. And then kind of the last leg of those 3-legged stool is our Hawaii customers that have decided to diversify their real estate portfolio outside of Hawaii, move to the Mainland, buy a future property, and we support them in that effort as well. We're not looking to change any of those, and we think some of that will accelerate as the economy and the Mainland comes back, and we've just had excellent credit experience in each of those areas today.

Got it. That's helpful color. And Ralph, if you have anything that you wanted to add on the back of Bob's comments on the positioning of the portfolio, please -- now it could be a good time to jump in on that.

Yes. I think the only thing I'd say is that we have been able to build a pretty good portfolio there in the real estate space with some really strong clients who are very active in the market. So there's a lot of opportunities for us, and we can be quite selective too in those opportunities. So that's a positive.

And the way we've done that, Ryan, is we've been very cautious. I mean, the gentleman who does that for us. He's been with us about 5 years from now. Ralph and I have known him for 20-plus years. He's been in those markets, his entire professional career. And we're very comfortable with knowing the market, knowing the properties and knowing the borrowers.

Got it. Bob, maybe switching gears to talk about deposit growth. I guess, outside of the rundown in the public deposits, which are down $800 million or so. You've had really solid deposit growth. We've heard a continuing theme from the banks' delay of liquidity continuing to build. Can you maybe just talk about what your expectations for deposit growth, what do you expect to be the drivers? And with also the liquidity that's in the system right now, how do you assess how long a lot of this liquidity may stick around?

Yes. I'll start and hand it off to Ravi to add some comments. It's a little more complicated for us because being the -- having the state operated accounts when the stimulus money's flow in and flow out and how they manage that with bond offerings, et cetera, create some fairly large swings on our balance sheet for periods of time. And we've been able to work closely with them to better manage that. But that's just one of the factors if there's further stimulus, for example, that we'd have to work with them on to address that. We have on the IPC side, we've seen our commercial and consumer customers have added quite a bit of balances, and we have been addressing that in part by growing our investment portfolio. But Ravi, maybe you can speak to that a little bit.

Yes. We've been deploying that excess liquidity. I think we went from a little over $1.45 billion average cash on the balance sheet in Q2 and brought it down to about $890 million in Q3. And what we did was over the course of the last couple of quarters, we've taken that investment portfolio from about $4.1 billion to $5.7 billion. And we've also extended that portfolio from about 2.25 to about 4.5. And so not only have we deployed that liquidity, we deployed it in assets that we feel comfortable from a credit perspective. And we've also extended the duration of that portfolio to help us offset a little bit of asset sensitivity. I think back to your point, Ryan, about managing liquidity on the balance sheet and deposits. Because we have a large market share in our market and because of the strong nature of our core deposit franchise and the relationships we have, going back to Bob's comment about the state operating account, us owning that. We'll see a portion of -- as the CARES money goes in, went into that account and is being deployed currently in the process of being deployed, we'll start to see some of that cash come back on to the balance sheet in the form of individual and business deposits. And so we'll see a flow of that deposits back on the balance sheet. And some of that, I think, will get deployed it will really be a function of consumer sentiment and business sentiment. And as that improves, we'll -- I think we'll see changes in the deposit landscape. But we've always had a very rational deposit base, a very strong core deposit base. And based on those factors, I think we'll either see continued increases on the deposit side or some of that get deployed.

Ravi, maybe sticking with you. I think you and the team noted earlier in the quarter that you believe you can hold your core margin relatively stable, despite some asset repricing pressure. So can you maybe just talk about some of the strategies you have to defend NII and the margin, you obviously just talked about extending duration? And do you think we could stabilize around today's levels if we're in a lower for longer kind of environment? And then just how is your sensitivity positioned for rising rates? And could we add further duration to the securities portfolio? Or have you reached the point of comfort regarding that?

Maybe I'll touch on margin, then I'll talk about rates and sort of what we think about with respect to the balance sheet. With margin, we communicated 0.7 margin for the third quarter, that was up. A lot of that had to do with funding costs that were reduced as a result of some FHLB maturities rolling off the balance sheet. Now typically, we give guidance one quarter in advance. And so a guidance around sort of stable margin is really about the next order itself. But maybe we can talk a little bit about the drivers of margin going forward. So when you think about the asset side of the balance sheet, certainly, we are an asset-sensitive bank. And a big chunk of our portfolio is tied to the short end of the curve. And so about 1/3 of our portfolio is tied to LIBOR, primarily 1-month LIBOR, and about 8% is tied to prime. And so if you think about where we are lower for longer, you've kind of hit a floor on those rates for the most part. And if rates tend to move on the short end, in any way, shape or form, we'll pick up a benefit. And so that does provide stability for us. I think if you look at the other parts of the curve, you look at the 10-year treasury as an indicator for another big chunk of our portfolio and our portfolio, what I'm referring to is really the mortgage portfolio. It's about $3.6 billion in size of about $13.5 billion in loans and leases. And as you know, Ryan, in Hawaii, Hawaii is primarily a 30-year fixed mortgage market. And so the 10-year tends to track relatively closely to the mortgage yields. Now I need to qualify that because mortgage spreads have been relatively wide, and we expect mortgage spreads to continue to shrink over time. And that's just a function of what we're seeing in the marketplace. The securities that we're buying, there are -- there's a portion of that, that's tied to mortgage yields. And the fact that we've seen those yields on those mortgage securities compress over time tells us that the mortgage yields on our portfolio has some space to compress as spreads start to tighten. And so those are the challenges we're facing on the balance sheet with respect to loan yields and securities yields. We've talked about sort of the funding side of the balance sheet. Maybe just 2 quick comments on that. Average cost of deposits was 13 basis points for the quarter. Certainly, we feel maybe there's some space to go a little bit lower, but not a whole lot of space from 13 basis points. And maybe we'll pick up a little bit in the next quarter based on a full quarter run rate of the FHLB maturities, the last set, $200 million that matured sort of in the beginning part of of Q3. So we'll pick up a little bit there. I think those are really the big drivers. And I think as we start to see liquidity levels stabilize, we start to see what -- as mortgage spreads start to compress and sort of find a new normal. I think we'll start to be able to see where margin is going to land for the medium-term and extended term.

Got it. So Bob, I think the banking industry, at least for the next few quarters, faces a challenging backdrop with ZIRP and interest rates as low as they are, and we're probably going to have muted loan growth for a couple of quarters. You've always run the bank with a pretty lean expense profile. And I think the expectation is for you and the banking industry, expenses are going to tick up a little bit. So can you maybe just talk about the big investments into 2021, and where could there be opportunities to manage the cost base, given the challenging revenue backdrop we're likely to face for at least another couple of quarters?

And it's something we've always been very focused on. We like being the low-cost producer in the market, so to speak. So a few things we've done is, either we shut down a number of branches, about 40% of our branches from COVID, and slowly reopening them and really looked at the network, and we looked at the digital adoption, we've been seeing among our customers and decided to permanently close 4 locations. And added to 4 we closed, the year or 2 before that, that's little over 10% of our branch network. And we always have the smallest network, but larger branches. And so what we're really evolving into is a world where we can continue to serve the customer as they move into digital to take care of the daily transactions and much of their day-to-day banking. We still want to be there in the various communities within the states, so we can serve them, as they have higher needs of really sitting down and speaking with their banker. So that will help in the cost base. We own about 40% of our branches and fees, so we're able to control that cost as well. So that's another factor in it. More near term, in 2021, as we've talked about a few times, we're going through a core conversion. It's been a tremendous amount of time on that over the last couple of years. We've been able to transition a few things already and reduce some staffing along with that and been able to have a more stable way to plan for the future as far as costs, and that will continue because it's not just a transformation and how we're doing business for serving the customer, but also internally to us, it's really automating a lot of those manual processes that we've been doing for many years. So it doesn't happen day 1 as soon as you do the conversion, but over time, the old contracts end and new contract is fixed at a fair amount going forward. You will get some savings over time as you're able to work through that automation of things you used to do manually. And so we're looking for that as well. It may not be the 1 quarter or 2 quarter thing, but certainly, over time, we're going to be able to realize those savings.

Got it. Maybe to switch gears a little bit to talk about credit, given we have Ralph with us. You saw higher initial deferral rates than some peers. Part of that was floor plan, which went away pretty quickly. But now you've seen the substantial majority of our non-mortgage deferrals expire as of 3Q. I think 96% return to current. Can you maybe just talk about what you learned about your clients during the deferral process. And you could -- can you maybe provide some color on the industries and areas where you've had to give second deferrals and what are your expectations for how these are going to end up working out over time?

Go ahead, Ralph.

Okay. As you mentioned, the fact that we had about 77%, I think, of the deferrals come off deferral by the end of the third quarter, about 96% of those had returned to pay. And then what was left really on the book was a lot of residential mortgages. Those are pretty high quality. I think about 3% of those mortgages were in excess of 80% LTV. What we've seen in the marketplace is residential mortgage. I mean, the residential market has been pretty strong. Prices have been trending up. And what we're seeing now as we're going into the fourth quarter is those clients coming off deferral. And they're returning back to pay similar to the nonresidential book. So a pretty good performance there. I think what we anticipate is that we'll continue to see that. And what we'll be tracking for is people who may need -- who may end up having some challenges to get between now and when the economy reopens. So we stood up a portal to sort of help our clients with modifications. We haven't had to really sort of activate that yet, but we're prepared to do that. We've had very few people that have taken a second deferral. And on the consumer side, we're really pushing people to try to make some level of payment as opposed to take a payment deferral. And then I think on the commercial side, we're treating that like a standard workout. So to the extent that we're providing concession, we would look for concessions on the part of the borrower, either they provide us additional collateral guarantees, some other forms of relief or maybe they're working with other creditors, landlords to also sort of kick in there. So, so far, so good. We haven't had a lot of people having to do a second deferral. And what we're probably going to do is treat those more like we would -- like a TDR in the case that we would have to make pretty major concessions.

Just to add to that, Ryan, back to your broader question, really, the approach we took, which is pretty broad-based on granting deferrals. And then working with them on the backside. It's worked out really well. It gave them the space they needed to really kind of adjust their cost structure on the commercial side and kind of get it together on the personal side, and we've seen this really strong return to payment, which has continued after quarter end, very similar to what we saw before that. And it's really reassuring to us that the customers needed it, and now they're coming back to full payment.

So we've had a handful of banks talk about where they think losses are headed for 2021. And the sort of bid-ask is, let's say, 50 to 80 basis points and I know the Hawaiian economy is a little bit different than parts of the Mainland. And I'm not going to ask to pin you down for a number here, but do you feel you have a better sense of where losses are going to shake out in the year ahead. And what are the key factors right now that are going to help determine the ultimate level of losses that the portfolio experiences?

I think part of it is that bridge that people have with the stimulus money and everything coming out of DC that's been a huge help to them. So that's clearly helped our borrowers. It's the -- the portfolio has performed better than we had hoped, quite frankly. And we still have quite a bit put aside for allowance for credit loss. And we think we will see higher charge-offs against that and more in the first quarter and second quarter of next year, not so much before that, just because there has been that strong return to pay. It really is going to be a factor based on the Hawaii economy. I think what you always see in these situations is the results of the last 5 years of credit decision. It's not something that you did yesterday or the day before, but something you did over time. Some of the things we had done more recently is a couple of years ago, we weren't as happy with the risk return in the indirect portfolio. So we started backing off on that as far as a growth area. And I think that would help us. We did the same in our consumer unsecured portfolio. And so we start backing off on that. And those decisions, I think, are certainly helping us now and will continue to help us as we see the portfolio realized some losses into, say, the first half of next year and beyond. Ralph, anything you want to add to that?

No. I think to Bob's point, we believe that we've reserved for the losses that are in the portfolio today. And I think to the extent that we have some additional stimulus, that will be a positive. And then we really have to sort of see how widespread the vaccine sort of is distributed and what that sort of means in terms of the recovery. But we are anticipating that we would not see much of a recovery till the second half of 2021.

And maybe one follow-up. I think a big part of the reserve, maybe you're about 20% is from -- you guys, but a qualitative overlay on and you've been able to incorporate the more negative euro forecast in your 3Q provision with minimal change to your reserve levels. So how do we think about reserving from here? Are we heading back towards a more growth driven scenario? And I guess, Ralph, under what scenarios can we actually start to see those reserve levels coming down?

I mean, I think you're going to have to just sort of see over time how the portfolio plays out. If we are at peak levels, we'll start to see the level of criticized assets start to decline. We'll probably see some rotation within that book, but we'll see that start to come down. And then I think you'll just sort of see that we're not going to have to necessarily replace losses with additional provisioning.

Got it. Maybe switching gears, Bob or Ravi, to hit on capital management. You after -- your CET1 is back above 12% around the target level that you've triangulated during the past. How are you thinking about the right level of capital for the bank and maybe could you outline your capital priorities at this point in the cycle over the longer term? And what would you need to see to start deploying more?

Yes. Let me start and then turn it over to Ravi. Yes, exactly, as you said, Ryan, right about a year ago, we talked about wanting to move about to 12% again. And here we are at the end of Q3 at 12.2%. So I think that goal has been accomplished. We're very comfortable with that level, certainly with our allowance together with that, we feel that we have more than enough capital to operate the bank in this period of time. We know the dividend is very important. It's very important to us, very important to our shareholders. So we certainly plan on maintaining the dividend. And then the next piece, capital return to shareholders is the share repurchase. So we're very committed to that program. The question is not if, but when. And I think as we see more clarity in the Hawaii economy and also the Mainland economy, as it reflects people's willingness to travel to Hawaii and also our Mainland assets. We'll have a better feel for it over the next weeks and months of when to restart the share repurchase program. Ravi, anything you want to add to that?

Maybe just one thing, Bob. We like the composition of the capital stack, the way it is right now. And I think we've expressed that in the past, and we like the levels that they're at right now. That's all I have..

Got it. Thanks, Ravi. I guess we're under a minute here. So just to close, I wanted to touch on returns. Prior to rate cuts and the pandemic, the bank was generating a mid- to high-teens return on tangible for 7 years. Obviously, we're in a more challenging backdrop right now. Look, I think market expectations of around 12% return. And I wanted to ask more just positively, what do you think is achievable and if you aren't willing to discuss a number, are there any internal metrics that you're focused on, such as efficiency? And what is your view on a more normalized efficiency, both with or without higher interest rates?

Sure. No, it's first of all, on efficiency, we're going to have to get to that new normal after we get through the core conversion because that's a big step for us to get through that very large project. It's going to be a key focus for the first half of '21. And as far as the normalization of the new normal returns, we're going to have to have a little bit better view on the economy going forward before we can speak to that more authoritatively, but maintaining our cost discipline and maintaining our credit quality. Those are really the building blocks for me, along with a very stable deposit base that allow us to generate strong returns and then focus on returning that to shareholders. But Ravi, anything you want to add to that?

I think you covered it all.

Great. Well, I think we're in overtime now. And so I just wanted to say, on behalf of myself and the investor community, we really appreciate you joining today. The weather looks much nicer in Hawaii than it is the dark clouds that I'm looking at here. And I just wanted to say, appreciate you guys joining. Look forward to catching up early next year. And as you said earlier, Bob, look forward to hopefully having you guys in person next year and enjoy the holiday season.

Thank you very much, Ryan.

Thank you, Ryan.

Thank you.