First Hawaiian, Inc.

Good day, and thank you for standing by. Welcome to the first Hawaiian fourth quarter 2022 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kevin Haseyama, Investor Relations Manager. Please go ahead.

Thank you, Shannon, and thank you everyone for joining us as we review our financial results for the fourth quarter of 2022. With me today are Bob Harrison, Chairman, President, and CEO, Jamie Moses, Chief Financial Officer, and Ralph Misik, Chief Risk Officer. We have prepared a slide presentation that we will refer to in our remarks today. The presentation is available for downloading and viewing on our website at fhb.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 may also discuss certain non-GAAP financial measures. The appendix to this presentation contains reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measurements. And now I'll turn the call over to Bob. Good morning, everyone.

And I'd like to start by welcoming our new CFO, Jamie Moses. He brings a wealth of banking experience and a proven track record in financial management. We're excited to welcome Jamie to the bank. I also want to extend a special thanks to Ralph Musick for his contributions as acting CFO over the last year until Jamie joined us. Now, a brief update on the local economy. The Hawaii economy continues to do well. In December, the statewide unemployment rate fell to 3.2%, slightly below the national unemployment rate of 3.5%. Total visitor arrivals were 735,000 in November of last year, 9.1% below the November 2019 arrivals. Japanese visitor arrivals remained below historical levels at 3.8% of the total compared to 16.3% in November of 2019. We continue to expect a gradual return of Japanese visitors to more normalized levels. Despite the lower number of overall arrivals, visitors' spend in November was $1.5 billion, up 13.7% over November 2019. The housing market has remained stable, In December, the median sales price for a single family home on Oahu was just over $1 million, unchanged from the year before. Median sales price for condos on Oahu was $503,000, 3.6% higher than the previous year. Turning to slide two, comment on our fourth quarter results. We ended the year with a very good quarter as net income grew to $79.6 million or 62 cents per share. Loans grew, net interest income continued to increase, while non-interest income returned to normalized levels, and non-interest expenses stabilized. Our return on average tangible assets was 1.34%, and return on average tangible common equity was 25.93%. We continue to maintain strong capital levels with a CET one ratio of 11.82% and total capital of 12.92%. The board maintained the quarterly dividend at 26 cents and adopted a $40 million share repurchase program for 2023. Turning to slide three, the balance sheet continues to perform very well. It remains moderately asset sensitive with about 5.6 billion or 41% of the loan portfolio repricing within 90 days. We continued to use excess cash and the investment portfolio to fund loan growth and deposit runoff. We ended the year with cash and cash equivalents at about $527 million compared to where we started the year at $1.2 billion. The investment portfolio duration remains stable at 5.6 years for the quarter and cash flows from the portfolio was about $75 million per month. Our liquidity position remains very strong with a 65% loan to deposit ratio, a strong core deposit base, and steady cash flows from the investment portfolio. Turning to slide four, period end loans and leases were $14.1 billion, an increase of $392 million, or 2.9% from the end of Q3. About half of the growth was due to a $201 million increase in C&I loans, which was primarily due to $120 million increase in dealer flooring and $38 million increase in other dealer-related loans. For all of 2022, total loans and leases were up $1.1 billion, or 8.7%. Excluding PPP loans, total loans and leases were up $1.3 billion, or 10.4%. We expect loan growth to be in the mid-single-digit range for full year 2023. Now I'll turn it over to Jamie.