Hawaiian Electric Industries (HE) 10 Aug 212021 Q2 Earnings call transcript

Good day, and welcome to the Hawaiian Electric Industries Second Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Julie Smolinski, Vice President of Investor Relations and Corporate Sustainability. ahead. go Please

Welcome, XXXX Andrea. Hawaiian Industries’ Electric Thank call. everyone, quarter earnings second you, to

Joining Connie CFO; today American members HEI’s Electric me of are and Savings Executive Greg and President CEO; Vice Hazelton, Bank CEO; senior President President and Ann management. and CEO; Scott and Hawaiian Lau, Seu, Teranishi, HEI’s other President

the of our section press and Our Relations release presentation Investor are posted in website.

be differ As cause made from forward-looking a will on could found to statements Factors in the be our actual call. can of Investor results presentation, Relations SEC materially and today’s expectations that our section reminder, in website. our filings

Now, Connie remarks. begin her with will

you, today. Thank for everyone. you thank joining and us Julie, aloha Mahalo,

as key we our enterprise. Second across advanced as consolidated quarter results and were priorities financial strong improved Hawaii's economy

quarter great income quarter for the quarter. above was million net XX%, XX% a with same the $X.XX, consolidated were to of EPS efficiency At the have first results year-to-date half focus consolidated the compared for up followed EPS first the in and items This from to $XX.X XXXX. our year of our Our our of utility, timing expected from cost benefited management net respectively the and income first And on the half and year. last reverse year. the balance of XX% and

losses, our a a the enabled credit of reserves guidance second in February. our the bank negative of announced quality range The the for of year-to-date loan the expect in credit year quarter. key and economy within to in to provision utility and Hawaii full We release for its results portfolio quarter drivers strengthened resulting its remain improved portion were bank

and tourism. with full reopening will of economy local again year which economy seen of We've our consolidated are Greg We and the strengthening in Hawaii's our guidance. increasing shortly. rebound cover bank

more XXXX that More community as closely increase delta are open. couple than However, to our In in monitoring well and continuing of our to last vaccinated arrivals as their from sometimes higher. as June to robust. be the vaccinated Hawaii of and tourism most US due will June now employers and government to West us and residents virus values and pre-pandemic XX% with in strongly the economy Hawaii US increase the the levels frequent Daily over spending we how June, Unemployment are real will above from levels declined was including county are XX% months, to enable expect and help Mainland. variant, improvement. region increased responds. remain approaching as fully XX% arrivals visitor our X.X% destination state attractive the will that activity an that or be to month exceeding recent Controlling of testing. were the approximately Hawaii cases we to estate of subject have fifth requiring arrivals continue employees be

July, over median up volume homes Oahu XX% XX% sales prices up was were and last For single-family of year.

were XX%. and prices up condos were X% up sales For

Economic Research Hawaii expected X.X% increase in and As of X% Organization XXXX, the of XXXX. GDP UHERO, forecast, May state the University to in

to utility, make of savings mechanism. begun seen revenue needed uncertainty the annual cost electricity and we've with The returning delta PBR X to performance-based cost and reliable or now reach due dividend regulation particularly to of we've provide Hawaii's under to to ARA economy, framework in new progress and goals. optimistic the management cautiously is customer on resilient customers we're At savings adjustment approach our as effect audit climate fully commitment June variant. as we While still efficiencies affordable, taking on a great the the remain the investments we continue focused or component

are of of PIMs, approved an are a additional the PIMs we've As of the May, Hawaii mechanisms consider Utilities framework. PBR commission In PBR discussed, be. of mechanisms, process when This renewable savings cost includes effect the of a relating and or PIMs to now important to incentives. potential suite develop control in performance fuel come details which and impact the shared performance We grid Commission, and generation, incentive the in part reliability, final additional now mechanisms or past costs. started Public don't has fuel The performance effect. fossil what other into and power for yet purchased retirement projects earnings energy would could interconnection large know, non-ARA an

we align be incentives and look a continued forward interest. with process However, develop of with would new we collaborating to customer expected to refinement stakeholders always PBR to ways

approval. to good be Stage has As only year Ige, we projects and Past We're construction, distributed together Coal renewable The early equitable examples brought said, energy with must we've always goals utility together. commission we of on project. the us matters. Six this We independent of advance is involves on work Stage forward programs docket that to way renewable clarified our the two A by pressing regarding We're the clean appreciated prepare the to of we're a the Kapolei battery coal customers. of across projects the Kapolei done benefit are to from us as decarbonization under energy and commission-approved And or Energy projects, to construction commission plant. Powering the now interconnection that schedules ensure of now clarification quickly are project next collective transportation successfully a energy Task with Oahu this. retirement respond storage the accelerate seeing year. two work for Force, approval grid developer all progress start quarter, cost to interconnection the are And others distributed costs. have commission's Project, for one scale projects more of the range the approved a from commission changes producers. are XX, working and to its both and the and brought record lot docket, and one resources Stage Storage convened six now procurement everyone of energy Stage saw online its enabling slated remaining customers pending projects rather project. in to power in PPAs. revised two advancing track with intent stakeholders such of Last in are than Three to now resulting and addition electrification Storage Governor Hawaii's reaching modernization the conditions to working In our additions,

of now program energy from an use the in modernization cumulative our also on add enabling operational an system of and systems storage hours. progressing month, launched allowing capacity incentivizes to from those options. and commission's Battery is most greater the of approval June, the systems, customers with customer-sited benefit opt-in and XX,XXX advanced comprise well, the grid to the last Grid with which installed Bonus by utility evening solar As we this one surpassed overall gigawatt opt-out accelerating nearly shift meter to to the efficiencies deployment customer approach more solar

here will projected fleet a Governor stations. that replace operators, Make-Ready Hawaii customers, and our vehicles fleet XXXX of zero-emission Utility's barrel Finally, electrification being across bus will we're allocate encouraged Infrastructure signed revenues by commission the state's our construction consistent charging sales In with emissions. recent electric goal transition. of to fleet GHG accelerate electrification clean by our which own and XXXX, the our country. goal benefit and XX% by X% with which Biden's recently to bills to our Pilot the tax eBus vehicle also accelerate energy to efforts, in is electrification while decreasing announced oil of will our finance Project, of environment light-duty savings approved EV President Ige of June, provide help into developments for transportation law

and margin at net interest grow asset with consistent uncertainty. as liquidity negative in more Turning a to uptick we're growth ASB and basis starting and commercial the to levels credit program, strong into low continued We the credit pandemic funds payment the to continues benefiting lending yields account release appropriate equity as from deposit amortization helping home to excess first seeing CARES present. seven for improved. reserve pressures of as record mortgages in low lower well see resulting of quality and ASB's believe results related Even opportunities economy our credit so, points. loans, to with ongoing us cost our investment reserve due the pipeline strength is fees expectations estate. to and real still residential quarter, income improved the The Bank. in Bank's and premiums are taking an or of earning as provision margin credit-driven continued protection outpace PPP lines strong of We're losses growth asset reflected loan compared

are opening centers remains how deliver investments our on franchise three our As this expand and now, team in-person on to are levels and ATM are hallmark ASB's consumer we results more with operating Ann high. from We're coming see merges our in And mobile digital and is customer our platform personal on so technology, upgraded discuss of through analytics are satisfaction. data strong tasks to the XX% months. and members far. offerings to excited we're of bank's from feedback new financial fleet transition the our away digital upgrading or date continue getting digital to a opened continues, and customers the focused team fourth outlook. banking satisfaction model the presence bank. with Bank strategic to touch bank who which keep customer today, will now and allow the competitive, performs focus that platforms a the warm transformation digital our processing concept, great and as service to Greg and our Nearly deposits relationships and We've

Connie. you, Thank

by with for reserve the the results. strong our And Bank credit Turning trailing results. delivered in Utility profile of points to consolidated XXX its our last company the uptick quarterly the Both quarter expenses, to $X.XX quarter-over-quarter. was as overhauls. has line Compared by to reduction quarter generation results earnings the ROE increased performance consolidated the levels year, and $X.XX the points expected last Bank of negative Utility share in well remained XXX quarterly to improvements delivered and credit a our to XX-month resulting portfolio. to O&M X.X%. return provision of increase realized contributed on higher The loan second earnings same same Utility driven equity XX% versus an financial enhanced reflecting holding performed that losses Consolidated in loss expectations. were The and improved and per basis XX.X% even time reflected over solid basis stable underlying year,

quarter. second higher the O&M expenses, income variance The first higher overhauls of the by this comparable this drove earnings indicated was late note, under QX expectations largely from in audit last slide basis, timing to main Also annualized O&M factors to included and recall the half Bank are significant X, on million year of would $XX.X overhauls. more were impacted of $X our XXXX on that XX.X%. at with to which drivers PBR as starting may generating ROE call, look earlier savings the XXXX $X commitment compared of O&M returned you second took the improved ROE, last to earnings and dividend, of of million. year, As quarter some an place These most of quarter customers were On of second net for year. than reductions million $XX.X we The we delayed facility management that due customer the for to doubled Utility a results basis more budgeted half Xst. million XXXX have related be Utility June

and offset O&M of $X allowing of a staffing We partially recording power also by expenses debt the improvements. levels write-off heat $X from in note, from COVID-XX-related increases following the last about agreement efficiency the lower quarter lower environmental year-to-date to due combined deferral Of second a from and million amounts terminated bad million increase to commission and relating were $X reserve. unit to million the decision, million of XXXX, year, $X due had of in expense

on million rate We also with the target this adjustment higher system on in to an costs $X pension due delivered basis for to remaining implementation depreciation the Electric. Hawaiian case had to revenue recognized about $X final passed benefits savings included pension costs, already year, million a program the depreciation. our provide million $X planning recognition to this by The $X change RAM for revenues. decision. $X related fully under expense -- revenues lower higher customers, be customer mechanism annual to as lower revenues in million of rates non-service within of reset rate resource in And have timing increase part and in were lower of as enterprise that offset million O&M unchanged. higher we commitment from on

of rest effect. the to of from for year, Utility order the December PBR Turning all the PIMs now drivers performance in the PBR are

no material the our risk and from potential and under saw expected be soon. partially expect PIMs now been prolonged We full to related restored at year this PIM expected impacts completed are We the cost one is penalties for reliability reliability upside some fuel sharing has to and the restoration downside sharing mechanism. of tracking substations, which repairs

COVID-related regulatory We mechanism. there estimated we've of -- of have increased be XXst. requested have The COVID-related January primarily moratorium some costs would under downside $XX asset bad fuel addition, In in approximately our the deferred fuel we of thus, million disconnections costs, and risk-sharing on expect a sharing the And from currently continued account. continuation cost costs end on this debt customer year. May expense until deferral expired benchmark

file or can realized work so how That plans debt will with amount. of on sometime, for bill see other get actual alternatives payment once a customers our assistant recovery we out. and better bad We plays idea we requires

including quarter in delayed. As were some mentioned, impacted an previously overhauls, this was increase expense our O&M by that

we've driver accelerated the To-date, to second guidance. results on efficiency to our to year. Xst. included been productivity the system year range We returning to The that have savings, lower June our is work more achieve commitment expect done guidance efficiencies to one pandemic. the We realize are expenses than the on management repairs incur prior CapEx Utility And management and be could of half started able is and our million to-date, reduced now and cost have $XXX improvements substations audit an Utility's Utility programs. this on in $X.X some to prolonged certain million for of due costs, of investments supply of million to chain from capital important project those of expect planned, the million that its delayed ability parts overhaul to the meet other achieve savings due savings compared $XXX CapEx be $XXX of in delays been to the The $XXX increased to which through our million. we customers limiting in track to to year. annual commitment

lower earnings recovery Recovery this first base impact resilience our which to CapEx comes X% While revenue from mechanism, there. upside sources. and the within manage of mechanism from growth to Utility PBR from That's not our forecasted now three in rate full project is growth under of don't our earnings energy CapEx, and and transportation means PIMs base growth. X% this separate EPRM long-term we spending to baseline adjustment year, growth expect X% as to range exceptional ability to from The recovery potential year's allowance, main O&M could starting realize annual year mechanisms, XXXX earnings renewable expect covers CapEx because our a XXXX and and PBR. incremental of such incentives. electrification growth recovery projects and still drive We performance X% mechanism, including that

Class negative $XX and the of quarter the last for restricted the last million a was income net B same non-interest of gains the for million, provision we interest securities, was XXXX. from after-tax significant to the higher Bank. income. had of while ASB's compared of $XX.X income, sale losses sale of compared higher million to income year shares. quarter to million Turning second Visa grew the quarter most gain was $X net American $XX.X credit in including lower driver on The where quarter

record pressure PPP continues low a interest Now premiums second in rate customers strong second reduction lower low the the interest the of year a forgiveness quarter, soften drivers margin refinance growth. continued ASB quarter. XX of thereafter. as recognized actively fees anticipates $X.X investment the June more detail. of helped deposit in PPP tapering premiums We X.XX% loans pace the as during Total result by Lower in half continued and to of of assist through net investment and driven quarter slight slightly activity. were through the was fee $X in recognition the as I'll slide PPP funds X.XX% a amortization quarter American to in for deferred process. and On the fees and related Fees lower million. environment slower from million of repayments, go a amortization from this of to cost the expanded XX, ASB's in first XXXX

continued funds expect X.X% This for Overall, linked from cost and basis year prior at we that from X.XX% points to the still of to point year. we see NIM record quarter will basis the from one low XX down quarter the X%. range

balance growth continued year, to with rate However, anticipate income we for lead interest that should expectations net the interest line low in that despite the environment. still sheet

to largely quarter, first quarter Turning compared reserve slightly the million in economy compared negative the XXXX. the $XX.X charge-offs million, X.XX%, the losses of quarter X.XX% of X.XX% $X.X were in quarter to second improved quality and the X% credit to quarter a XXXX. loan lower credit. low first recorded compared negative very has a losses in expense historical which lower in residential customer and In last the for Non-accrual in and declined quarter. year. was net charge-off a -- very year provision and ASB's X.XX% credit the net strong portfolio. reflecting allowance second loan has X.XX% in provision commercial positions. loss rates historical The portfolio, since ratio The low loans and million portfolio, in non-accrual million, up the the to of of quarter unsecured to provision the of in related in was Bank second and lowest $XX.X for with requirements the increase local credit the This prior collateral loans credit upgrades the $XX.X first a

of of believe ongoing scheduled As We in of all previously June provisioned payments. to loans light pandemic. XX, appropriately deferred uncertainty we the are nearly have returned the

The than end. ASB's for resources. of healthy reliable of was and manage well-capitalized from Bank at above leverage was to liquidity available ample combination quarter has liquidity allowance liquidity maintaining capital more capital Tier to continues X X.XX% and loans credit in Our losses ratios. comfortably outstanding ASB a conservatively, $X X% levels. billion core ratio

Given of the in profile we to dividend while -- to the target and capital the strong X.X% ensure our of current portfolio, continue strong Tier lower range will to X leverage X% metrics risk maintaining competitive profitability position. a a ASB growth ratio

financing for HEI's XXXX. Regarding outlook

performance $XX do a higher $XX to expect As need and outlook efficient improved Consolidated we significant to structure to external expect our HEI structure. than committed issue investment-grade given year-to-date unless in profile. remained anticipate million. in not ASB's Bank dividends and of to dividends investment capital company, previous year an the remain XXXX, and accretive $XX previously additional to And equity we liquidity maintain Bank the strong, holding versus million reflected $XX estimated credit million approximately We we opportunities. now capital we identify guidance, this million

sharing range from headwinds Turning in penalties risk reliability the previously Utility and guidance, sharing to cost, mechanism. guidance. the We're expect the under fuel of be due our but half potential reaffirming lower to to downside issued our PIM

However, and guidance. we're consolidated Bank revising HEI our

This negative prior million. guidance from provision of our to to $X.XX of $X.XX $XX our reflects million updated $X.XX. range is share, guidance revised $XX to Bank per up Our $X.XX negative

XXXX potential to due not the guidance have for provision range. balance any our variant, uncertainty we of in the growing credits additional Given Delta included

to will and data monitor future reserve data we closely on However, based the decisions make third quarter continue economic result.

profitability earnings increased to the We expect to Bank and the holding into higher consolidated company dividend translate growth.

share. we're As result, consolidated per guidance $X to to EPS our increasing a $X.XX

Connie. the Now, over back call I'll to turn

rest and quarter this of our our wrap-up, for second companies year Thanks, beyond. for well the strong positioned Greg. we're the delivering stakeholders value To continue operationally financially and and was to for all

your in to we for is and business our and focused risk integrate stakeholders. to As DNA further ensuring we've linkage And reporting, always said, strategies, with on as ESG value all look that, into work our management questions. forward practices to we're we planning, ESG very

We’ll the Bank Lee our of come now go of And question begin ahead. Eric America. Instructions] session. [Operator first question-and-answer Please will from

taking on for and Thanks quarter. congratulations afternoon. questions, the Good the

Thanks, Eric.

Thanks, Eric.

Yes.

few questions on had the a Just Utility.

you XXXX, you. the speak Given if use but have ROE for baseline to ROE to first been X% pressures greater you half XXXX to second ROEs strong Thank earned X% your utility XXXX, earned your particularly you'll as could of have recognizing EPS expectations half can comment that. guidance,

within yet the Well, earnings of we program. the revenues We know back ability trajectory, to stability we recovery manage haven't those the certainty have under driven or you and mechanisms. year. specific come recoveries guidance earnings. that. PBR recovery cost the of our our talk utility's this on have our specific seen We'll ROE of cost by And as mechanisms XXXX new and long-term we about We to provided improvement the that that's – budget given significant – do of did growth largely

so And forward. more Tayne you have any do anticipate going that of comments? we

in we a the did of Earlier I be ROE note in our that the for guidance add XXXX. at webcast, here. Thanks, Eric, would our of points year Greg. XXXX X.X% Yes. the realized would midpoint February couple also range, at

where XXXX, that so the forward lag, of to – going our element. one couple elimination a Now RAM things of ARA the in is remember. One,

to the The other another think EPRM, of recovery eliminates which issue under we're year thing getting the about first is lag. full

program. efficiency point out and Greg is I is third within mentioned the element our that our continued managing what formula The expenses ARA through would cost

XXXX. would we that's So think how about

And points to PIM developed you from this could relative August in talk be in of we be on you guidance PIMs forward Would for Can see upside PIMs. Got penalties group. incentives, terms as about working expect structured here? it. areas of focus primarily additional basis appreciate go to extent the we what the it. as Much maybe to and

meeting these savings Tayne Right mechanisms with incentive now preliminary is in the this the of stage performance we're month this to develop Eric, group mechanisms. additional working actually again. and shared

comes So at is this we out ways that. mechanisms. expectation of to the in and new mode commission comes an will But have on see that prepared we did that we stay out what did to the comments where that improvements develop of looking PBR of working group. say tuned In to what wait is have

The looking mechanisms to grid reliability, and been the the other types respect renewables, thing with as to of I the at of the then is timely around for Eric, front fuels, on add costs. mentioned, fossil commission large-scale previously is purchase retirement would focused cost really other types things have the developing of things hearing and interconnection related you fuel also controls non-ARA of commission power

on for tuned stay more that. So

queue mentioned but more Greg, know XXXX. could and and for for into and XXXX talk XXXX? I'll Thank about XXXX the CapEx in XXXX for reduction hop rate ranges one specific the the question here. CapEx But the the I and And the for you of just you Excellent. the you. me on back reduction wondering base reductions reduction just drivers

our And of CapEx, Eric. our as we on overall Overall don't meaningfully. see Thanks, contracting guidance turning I'm slide range back to – that.

for $XXX shown the forward our as you look $XXX we $XXX range about million, to of million million, As to base XXXX. have

the CapEx the through baseline of that proposed the projects lot of we there's So decline are dependent see our We overall. upon level is spending. processes exceptional that as don't of or a necessarily A volatility general spend. level expect CapEx well a as in trend in

last our came off some year-over-year. we us level million As recently. spend you higher had that some We that that baseline has we to decline $XXX accelerations And been took then pretty consistent in as know saw of on year level. XXXX

So needs that be we for will million transportation, and are still processes which developing goals are overall, programs there see continued we million level. planning incremental integrated look to that a achieve and at $XXX reliability that part spend our do sustainability and within also that other note as I we and around needed long-term. potential necessary for electrification that would think to of our level investment resilience grid $XXX of projects

you. Thank

Thanks, Eric

from Paul question Glenrock next ahead. The go comes Please Patterson Associates. of

are how you Hi, Hello. doing? Hey,

Paul Hi,

the -- little I on you and you sharing. range downside Just what how about if do missed in quantify issue sorry XXXX? this. think penalties about bit that And reliability potentially? kind Could I'm like, are we reliability the Could just that we PIM fuel talking to of a

this Sekimura. Paul, is Tayne

your me question. take Let

I downside note when potential at of full for full we about mentioned maintaining -- a look being mechanisms our the costs did of the being couple we're what So Utility sharing. take and performance a might provide and a range, XXXX incentive previously them on next PIM that one our the was guidance the reliability fuel

we half had the out I this both EPS range mean of So together set guidance still August lower with potential penalties earlier in looking in that those we're of the of year. year. We're at that in landing

safety to reliability penalty ones You'll sharing Paul, some which of movements expect mix, the note we moved ability are those. And the is global the against in SAIDI of specifically be the metrics the those And that cost don't are fuel the that prices and the system the penalty are oil that with frankly reflection a only control so with in included challenges substation. area given us. really the penalties to on have those and have we

we're expecting in projected be the a area basis to So there. also on penalty

with to go fuel. total if for in out not knowing capped your what's apologize oil respect but, mean, how I the I down much what's this general prices exposure So

that Greg. take I'll

fuel, it's million. $X.X out For the capped at

I Okay. is out well? capped reliability And assume as it on the SAIDI, stuff the

out for one. combined $X.X at penalty and Yes. million. capped SAIFI And SAIDI It's that's the at

the again quarter. a but when is at But what the don't of let's provision better Would think. of it so to guys beginning is then thinking guys exactly you would aren't I forward a be normal me? better Obviously, surge XXXX of be but guidance assume I for more to this more expense, be giving an the maybe follow if be that had know, you go XXXX there year provision back with Okay. unusual -- the COVID that it's placeholder And would to what been like, year this to the you loan go would originally everything you once been kind and or I to great going normal. to it for we'll know you guys year, had just losses and XXXX

that Diane. turn We'll over to,

Hi, this Yes. is Paul, Diane.

consideration guess related portfolio. a provision normalized pandemic I is what pre your provision our loan question I take would personal most our unsecured to was have you be what the to So is, basis? into over think that of

So our started since COVID significantly derisked we've portfolio.

we're We right we're $XXX covered. adequately million around today. feel So

and the net extremely are And -- low. charge-offs so

And so going of forward. it's I growth function a think

As then grow our and just portfolio, loan to it obviously, provide the coverage have it's ratio. we for we

So, the any economic changes outlook. in

mostly it's coverage. think around So, and growth I

I think in it's look at to to of So, -- you if XXXX, look measurement terms size. going the at don't that's best

you think I more you have see of at where I time would pre be. a -- pre-growth personal And think dollar portfolio it amount I in that the look would during to frame. unsecured think our that's

Okay.

much. Have a one. Okay, fair enough. good Thanks so

Thanks Paul.

Paul. Thanks

of ahead. next question go The Please comes KBW. Bohlen from Jackie

everyone. Hi morning. Good

Jackie. Hi

portfolio. into question the that Hi. and again I up the little a want of on dig bit pick more just to mix

and So, using balances, ratio pandemic I then ended up roughly reserve where the CECL before on my year-end of your loan around based a calculations with just you get XXX. XXXX,

assumption? that the high trend XXX probably lowered portfolio undergone that those that mix to around unsecured somewhat now, the portfolio below is down it that assume to balances is at watermark unsecured $XXX that reserve that? pandemic could a through million and the fair fair looking the a Is So, of has

Yes.

So, hi Jackie.

allowance a loss factor amount. down on our about for credit take our XXX currently ACL would right have We within normalized qualitative million now $XX basis. ratio to our about That in

think -- the coverage we and have we ACL significant normalized what's is with sort where we're So, happening thinking a we that's the have more level. of so economy given delta and local

Okay.

like. really understand And there So, question then it I the nice guidance-- sounds

Jackie, Connie. sorry, is this

growth from going liquidity though. Obviously, bank add the really of put to all Let forward the deposits in me wanting just the play. into at looking is opportunities and

forward. And so the that also going could change mix

ones high-quality that opportunities, going take advantage us you've in that forward. CRE mix significantly and our example market so also For seen could of change

sense. makes that Yes Okay.

come I works down we see the lot modeling doesn't loan So, we two see happens create see here, and with that quite those worked of this start which forward. just think a pandemic scenario And bit. that there's But growth all and assuming this. of Q going in you'll play be that the to variants and then kind could I know you'll perfectly delta that factor you'll never start have out that to a of at all a

factor will provision CECL about can loan and it? to maybe the whether of way the be to right have then some Is ultimate So, a you obviously qualitative of that that expense determinant think growth absorb recapture. the

Jackie. think to about exactly it how That's

what Okay, touch within unique this quarter keep to about XX great. there. items you're wanted a FAS had unique be I flat not expenses you compensation if I and were compensation run you what good if any to you. just repeating to and is some understanding in talk factors Thank expenses. on down. could related know to that's Maybe just might looking rate or there

comp one expense translates that that to incentive number our a in And that $X.X about or actually to was related unusual think that line also event. pretax. million was expense executive item. on we quarter related our this number ben in previous was included transaction and Yes, and amount to It we $XXX,XXX had reversal other

And Okay. that--

total amount that was unusual So, $X.X million. the was

$X.X million okay.

this if $X.X is ignorant million a sorry benefit. that was question, And an but

clarify you So, been it higher. or frequently I'm can sorry that just -- have would no

higher. $X.X other million and and ben in comp was million It $X.X expense. higher in higher

Okay.

was fees a sure, know just you bit. think you. wanted I and maybe normalize I lot reverse was mortgage at off, just a Thank really and there, to then picking get customer more on that. then, about do And as so for starting I make little when people out really a play Sorry there's clear to the activity second, up really nicely,

seeing an about Just because anything not putting drivers median in you salable booking curious, Are are mortgages you they your about you how portfolio, in more prices? thinking at talk two home issue? or with that not also, point, increase you're be when may is those where forward? this the mortgage, going And

is Hi. Ann. Jackie, this

money. first more the reopens. are an And fees, fees there seeing as to your in we uptick and economy getting on spending So are out people question

debit interchange So and card increasing. is

still a are seeing We lower NSF charge.

cash their accounts, not with money think over people as being they're in with much. and drafting having I flushed

versus to for been a that we uptick been fees, bit. regard With something mortgage, an sale on seeing just that's pretty So have mortgage in closely. so We're of our we've impacted refi. watching the purchase gain portfolioing more our volume that has

there's $XXX,XXX of think, a but, don't purchase I right if you people I there's median refi-ing, some of activity, we've noticed, still lot the is I home -- but know, high its now. think price

our high So very in but low, mortgage busy remain is demand area. origination supply is we

much, at the We more not manage referenced. NIM to concerns are looking that so because our portfolio of you

Okay.

And go there last Was the and you. was? Thank I'll forward back. one And rate great. if get one tax there this just quarter? good unusual anything the in then, Okay, what's

think I the to number is unusual in a Nothing XX% around somewhere tax XX%. rate, good

XX% to XX%, okay. Great.

Jackie… So

all very my questions. you … for thank taking much

think rate. the tax Jackie, So with I the what's higher driving that's earnings, higher

That makes Diane. sense. Thanks, Okay.

Yeah.

Jonathan Wells Please from comes question ahead. next Reeder The of Fargo. go

And How take going you today? Paul little question Utility was try it know, Jackie more going terms to be complex. it I is but may utility a into analyst used ask got do again to on. Hi. questions that the building to. it I'm

a essentially for additional to that that for you million more, amount. looking this guess, about go-forward terms Are give of potentially that loss for still it's number still And be kind there kind there loan or usually you like is a that too simplistic expense specific it year, whether in everything provision come on, all plan provision So then, understanding guidance loss, based XXXX, way where to $XX the my it be of And year, looks of any of provision this way Is kind to recorded year. you're then, more can was of reversing last around XXXX? in recorded at range, is was I it? year. on, loan of per reversed, thinking any provision us

here the Hey, the hard because variable in risk Personal will what Portfolio versus as into are would of composition Diane total was, your the the what more a COVID, of there's out a under amount loan through we note, Jonathan, we Diane I elements, question. and X.XX% What of not -- growth sit provision today a highlighted of to guy loan -- portfolio Being go Residential. it loan utility a would like, on the of I at tie also let as we're number, The And that understand portfolio will it's COVID -- of portfolio say into specific appreciate But elements and of that. little earlier challenges I necessary I our myself, -- this I'll detail. determine it's loss focus the reserves. provisioned we well Unsecured reserve, that mix Lending higher the does but portfolio yet.

we given because additional well. additional a can required also of so, we loan of And opportunities create it provision greater we cover uncertainty, to that economy provisioning time that, create to high if to continues can as growth our which or as levels release continue maintain level can the recover, reserves over see for credits

clarify. into also to rate he see So all, that and we determined turn -- I'll know that, again see if the the ability I activity at to loan to and Maybe don't will so by -- but Diane helps growth. deposits our there out if run economic be deploy therefore with over can it

uncertainty Yeah, it's the going forward.

given improvement think provision further what with more we in in further more our conservative as around Hawaii's approach get our if be quarters. terms think approach coming outlook, I could we're with a conservative outlook. There today, I associated in negative delta a the there's impacts we've variant the clarity of and releases economy, the it. is with But the of taking

where to kind portfolio there I or expense that XXXX is give where is any of look Okay. mean stands kind would annual ballpark of just way And a today the like, not... like

yes. And growth. see again our -- we account XXXX we -- come -- -- give guidance our the where specifically. will it our provide and -- will bake earnings from loan we'll Again, will into the our for guidance portfolio what as As composition further on of growth that

asset securities which a had relative net very this year, we've includes require that portions seen increase earning growth, provisioning in and you've loan of in our but some typical loan portfolio. little As high-quality to investments

it So at My of was started to guess is Diane, that's challenge. we XX? XX this part year the

It was XX to XX.

reference -- kind a least was good to and me economy economy, XX -- low moderate challenged point that's to would that XX a I growth overall. that of in growth here a at

Yeah.

should -- or are that. to margin or how also also of -- But come much you we that above margin reserve concerns the put reserve COVID how as much temper out relative we

it's what Greg really Right. like composition mentioned, in what or we're Yeah growing what category. about

into portfolio us allowance. So more our a personal to unsecured bit requires coverage put little our

where And provide as we and opportunities at out growth then to come so those accordingly are. market and -- to COVID, of where lie we'll look opportunities have the we'll

think we're number of preliminary a little for XXXX. calling And now, terms a so in right I

the profile doesn't loans it depending Okay. to off sound mean that guess thinking shift it's be XX, on but obviously I so. base, about of risk least the XX I could wildly future But at like to going

-- more that to appreciate folks break trying I in No, simple terms. a color utility for Okay. and as little it down

thank you So much. very

the add I'd tend versus to an And total. reserve it's ratio we the of just portfolio Connie, look the number at Jonathan, grows just because loan in absolute course to loans of

Thanks. Got Okay. you.

Thanks, Jonathan.

The comes next question Fishman Please from ahead. of Morningstar. Charles go

Hi.

got couple. just Just I did make Greg, to a -- I you this sure right. want

said will in half EPS towards or lower guidance? of utility the You be lower end the the

low the of the to half lower The not end. range. guiding We're

Got it.

Okay.

you excludes XXXX, all but lower XX, bottom bit used it it you're did makes to a sure I if -- I changed so XXXX looks separate go noise let's slide growth look to going year slide with from coming COVID. base But X% that to PBR because sense where little at make XX, PIM a and of just X% potential that using we're guess this as still we that bullet like -- from rewards. -- say much there's out be talking it to point. want And a you was make Just box still then right and

or I changes more the slide, going cosmetics, just didn't was that made you in it there is that So I realize? am there on correct,

as no a PIM. Tayne mentioned, excluding but around XXXX of off base mechanisms good there's incentive implementation was forward. no, all, expect documented No, hand slide we've do think to We X% Yeah. PIMs there got workshops. X% there as PBR to as ongoing additional part -- now be we've going the only those a I at wasn't the the portion And got discussion incentive of year

And so upside potential see we forward. going

implemented the have And perform we workshops, clarification are we'll key new course the year. the the those relative mechanisms performance mechanisms, well balance you give time. through Of the further those to incentive the of through over that to as

it, okay. Got

it's last Just call my at note. at also the last of I I'm end wish you my the retiring earnings the my is This Hawaiian of everybody quarter. And the call best. to of one month Electric Industries final be earnings career, going and

It's Charles. Congratulations wonderful been knowing over you these all years.

on us. I questions. always again good. for been appreciate your thanks talking questions Thank great you. your Well, And to and you. very been Yeah. focus it's It's

You're welcome.

This concludes closing session. Smolinski conference question-and-answer Julie any remarks. back to our like I over to for turn would the

if Have have a out follow-up questions. joining us any please for great do all you today. And you week. Thank reach

The you may disconnect. Thank you today's now and attending concluded. for presentation conference now has