First Hawaiian, Inc.

Good day, and thank you for standing by. Welcome to the first Hawaiian Incorporated Q1 2023 earnings conference call. At this time, all participants are in a 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 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Kevin Hafiyama. Please go ahead.

Thank you, Tanya. And thank you, everyone, for joining us as we review our financial results for the first quarter of 2023. 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'll 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'll 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 these non-GAAP financial measurements to the most directly comparable GAAP measurements. And now I'll turn the call over to Bob. Good morning, everyone.

And before I start our normal presentation, I'd like to recognize the efforts of our team members and the loyalty of our customers. The steady performance through the recent disruption in the banking industry really highlighted the strength of our balance sheet and the value of our relationship strategy. Moving on to an overview of the local economy, the Hawaii economy continues to do well. Statewide unemployment rate in March was 3.5%, the same as the national rate. Total visitor arrivals were 900,000 on March, only 3% below March 2019 arrivals. Our Japanese visitor arrivals at 40,000 were 70% below the March 2019 arrivals. And we continue to expect a gradual return to more normalized levels. Most importantly, The visitor spend in March was $1.8 billion, 23% higher than March 2019. The housing market has remained stable. In March, the median single family home price was about $1.1 million, which is about 5.8% below March of last year. The median sales price for condos on Oahu was $536,000, 4% higher than 2022. Turning to slide two, I'll give an overview of our first quarter results. We started the year with a very good quarter, net income of 66.8 million, or 52 cents per share. As loans grew, we grew capital, and credit quality remained excellent. Our return on tangible assets was 1.15%, and return on average tangible common equity was 20.78%. We continue to maintain strong capital levels with the CET one ratio of 11.97% and the total capital ratio of 13.09%. The board maintained the quarterly dividend at 26 cents. Turning to slide three, our balance sheet remains solid. In response to the recent volatility in the banking industry, we decided to increase our liquidity position using long-term FHLB borrowings and ended the quarter with about $866 million of cash and cash equivalents. The FHB borrowing was for a term of 18 months and gives us flexibility in managing the liability side of the balance sheet. We continue to have a strong liquidity position with a loan to deposit ratio of 67%, a stable core deposit base, steady cash flows from the investment portfolio, and ample access to additional funding from the FHLB and the various Fed lending programs. The investment portfolio duration remains stable at 5.6 years, and cash flows from the portfolio ran about $65 million a month, as we expected. Turning to slide four, period end loans and leases were $14.2 billion, an increase of $129 million, or 0.9% from the end of Q4. Loan growth was modest in the first quarter, and we plan to focus our resources on supporting our relationship customers. We expect loan growth to slow over the rest of the year and be in the low to mid single-digit range. Drawdown existing lines, such as construction, dealer flooring, and home equity, will contribute to our growth. Now I'll turn it over to Jamie.