First Hawaiian, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the first Hawaiian, Inc., Q4 2020 earnings conference call. At this time, all participants are on a listening mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please be advised that if you require additional assistance, you may press star then zero to reach an operator. I would like to hand the call over to Kevin Haseyama. Please go ahead.

Thank you, Michelle, and thank you, everyone, for joining us as we review our financial results for the fourth quarter of 2020. With me today are Bob Harrison, Chairman, President, and CEO, Ravi Malela, CFO, and Ralph Misik, Chief Risk Officer. We have prepared a slide presentation that we'll refer to in our remarks today. The presentation is available for downloading and viewing on our website at whb.com in the Investor Relations section. During today's call, we will be making forward-looking statements, so please refer to slide one for our safe harbor statement. We will also discuss certain non-GAAP financial measures. The appendix to this presentation contains reconciliations of these non-GAAP financial measurements to the most directly comparable GAAP measurements. And now I'll turn the call over to Bob.

Good morning. Thank you for joining us today. I'll start by giving a quick update on the current situation in Hawaii. We have seen an increase in COVID cases following the holidays, but the magnitude of the increase is nowhere near what is being experienced on the mainland and appears to be tapering off as we get farther from the holidays. As of yesterday, the statewide seven-day average of new cases was 111, and the corresponding positivity rate was 2.5%. And thankfully, hospital capacity on all the islands remains good. Vaccine distribution has started statewide, and this week, the first mass vaccination site was opened on Oahu. Regarding the visitor industry, the pre-travel testing program for Trans-Pacific passengers is still in place. We saw an increase in vacation arrivals in the second half of December, and since then, vacation arrivals have fallen back to pre-holiday levels of about 4,000 people per day. It's likely that arrivals from the West Coast, our largest market, are being negatively impacted by the recent surge in cases there. The economy is showing signs of gradual improvement as the November state employment rate improved to 10.1%, and the housing market remains strong. The housing market on Oahu ended 2020 on a strong note. The median single-family home price in December was $870,000, 6% higher than the prior year, and there were about 36% more transactions than the previous December. For the full year of 2020, Oahu's single family median home price was $830,000, up 5%, and the number of sales was up 2.3%. Turning to slide two, we finished the year with a solid quarter. Diluted earnings per share was 47 cents, and the board maintained the dividend at 26 cents per share at 55% dividend payout ratio. Fourth quarter pre-tax, pre-provision net revenue increased 10.3% over the third quarter to $100.7 million as net interest income and non-interest income increased while expenses fell. Deposits grew by $330 million, driven by growth in consumer and commercial deposits, partially offset by a reduction in public deposits. The improved deposit mix helped to reduce our total cost of deposits by two basis points to 11 basis points. That contributed to a one basis point increase in our net interest margin. Now I'll turn it over to Ralph to go over asset quality.