First Hawaiian, Inc. (NASDAQ:FHB) Q3 2020 Earnings Conference Call - Final Transcript
Oct 23, 2020 • 01:00 pm ET
[Operator Instructions] Our first question comes from Steven Alexopoulos of JPMorgan. Your line is open.
Let me start maybe, Bob, with a big picture question just regarding the travel resuming back into Hawaii I know it's only a week, but when you mentioned 2,000 to 4,000 visitors per day, how does that compare to the initial expectations and where does that need to go to, to take pressure off the local economies?
Yeah, it's an excellent question, Steve and we didn't have a lot of expectations. We thought it would start out slow and it has and there's still a few kinks we're working out at the airport quite frankly and checking people and did you download the app and has it got the right provider partner that the state has identified to qualify for pre-testing, is it the correct test? All those things we've tried to message. We mean the state tried to message out very well to the visitor industry and the airline partners have done a fantastic job getting the word out. So they are still kind of working through the process and I think that's what is good about starting slow is we get to work all that out as we start to see a build for the holidays.
My thought would be that we won't really have a good idea what the volume and comfort level people will have with traveling until we get to the Thanksgiving and Christmas holidays. This period of time between now and then will allow us to -- my very unscientific way of saying work out the kinks in the process and get people moving again. As far as what we need is a level to kind of return to normalcy, you know, I think you see that in the UHERO forecast, they see the tourism industry building over time over the next six months and that's why we have a pretty conservative outlook on that.
Okay, that's a helpful way to think about it, Bob. On the margin, Ravi, it's funny when you were talking about NIM, it sounded like you were pretty cautious, but then you guided to flat in 4Q. Can you maybe talk about what you see supporting NIM near-term and is that just a temporary support and then you expect pressure afterwards?
Certainly, I think there'll be pressure on the asset side. New securities yields are obviously grinding down lower and we're going to see refinancing activity in our -- primarily in our mortgage portfolio and we'll continue to see pay downs. I think the upsides are frankly on the interest expense. I'll maybe name three areas. In Q3, we had $200 million of FHLB maturities roll-off the balance sheet, but that actually occurred at the end of July and so we'll pick up a little bit more in Q4.
I think there is a little bit of room on the deposit side, we were at 13 basis points for