On Monday, Bank of Hawaii Corporation (NYSE:BOH) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Craig Siegenthaler – Credit Suisse: I just want to talk about the sustainability of your commercial growth; really strong C&I and commercial real estate growth here. Can you talk about how sustainable that is kind of heading into the fourth quarter, because also some of your peers have talked about slowing commercial demand, really looking forward at the fiscal cliff and potentially what could come out of the election too?
Peter S. Ho – Chairman, President and CEO: Well, we’ve seen strong commercial performance for a few quarters now. It’s all (up) because of the size of some of these loans to make predictions on a quarter-by-quarter basis, but I’d say directionally we remain pretty optimistic that we can continue growth in the commercial segment. Really our strategy has been to fill the void open by a lot of the mono-line and national lenders that seem to have disappeared post-financial crisis and we are also making a pretty big emphasis into what we would perceive to be kind of the mom-and-pop middle-market here in the islands. We are having reasonably good traction in that segment.
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Craig Siegenthaler – Credit Suisse: Just on a follow-up, if I look at your reserve at around 2.3%, very high, one of the highest in my coverages, but your charge-offs are very low. Could we see the reserve drift materially lower here or you are going to keep it at a higher level than most of your peers for longer here?
Mary E. Sellers – Vice Chairman and Chief Risk Officer: Well as you know we evaluate that every quarter and I think you will see directionally consistent movement with the quality of our portfolio and the economy.
Craig Siegenthaler – Credit Suisse: Since the quality is good and the economy is pretty strong relatively, (shouldn’t) it go lower?
Mary E. Sellers – Vice Chairman and Chief Risk Officer: I would agree.
Peter S. Ho – Chairman, President and CEO: It’s possible.
Ken Zerbe – Morgan Stanley: Just had a question on capital deployment. I know you guys have been pretty consistent with buybacks over the last several quarters but it seems that for – I think it was the last three quarters, buybacks trending a little bit lower than what they were prior to last three quarters. Kent, would you might kind of reiterating I guess your philosophy on buybacks, I don’t know if you can put in kind of magnitude in with your thought process that would be helpful?
Kent T. Lucien – Vice Chairman and CFO: Sure. Ken, our philosophy is to return as much capital as we can reasonably return to shareholders through dividends and buybacks. Obviously, we need to retain enough capital for the business and the growth of the business, but as I mentioned in my comments, we’re right around 100% between dividends and repurchases, 100% of earnings on a year-to-date basis. So, I think we’ve achieved that philosophy of returning as much capital as we can. Earlier, in the year, we had been in excess of 100% and then we move to 100% and then here in this last quarter a little bit less than 100%, but over the period, as I said 100% of earnings.
Ken Zerbe – Morgan Stanley: That helps. I was probably shooting for 100% per quarter, but full year makes a lot of sense. The other question I had just in terms of mortgage banking, was there anything that surprised you because I think last quarter or at least heading into this quarter, I felt like you were a little more cautious on mortgage banking. So, certainly the results this quarter surprised to the upside. I was wondering what changed in your view between then and now?
Peter S. Ho – Chairman, President and CEO: Well, we’ve been surprised now for about three years running and just about every time we’re about to declare that we’ve just seen the last refi boom, we see another refi boom and I think the most recent one driven by the fed’s most recent quantitative actions. So, it was a nice surprise for us. I’m not ready to say that we won’t see that again next quarter or next year, but we’ll see what happens out there in the rate environment.
Ken Zerbe – Morgan Stanley: But there is nothing that would actually make your results materially different from let’s call the average bank?
Peter S. Ho – Chairman, President and CEO: No. I don’t think so.