First Hawaiian, Inc.

Good day and thank you for standing by. Welcome to the first Hawaiian Inc. Q1 2024 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, Mr. Kevin Haseyama, Investor Relations Manager. Please go ahead.

Thank you, Tanya, and thank you everyone for joining us as we review our financial results for the first quarter of 2024. With me today are Bob Harrison, Chairman, President, and CEO, Jamie Moses, Chief Financial Officer, and Lee Nakamura, 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 these non-GAAP financial measurements to the most directly comparable GAAP measurements. And now I'll turn the call over to Bob.

Morning, everyone. I'll start with an overview of the local economy. Hawaii economy continues to perform well with the state unemployment rate remaining low, tourism is steady, and the construction industry is healthy. Statewide seasonally adjusted unemployment rate for March was 3.1% compared to the national unemployment rate of 3.8%. Statewide visitor industry has continued to recover faster than expected following the Maui wildfires, but still remains slightly below 2023 levels. The legislative session is wrapping up, and additional funding was secured for the Hawaii Tourism Authority, and a new marketing campaign was announced a couple days ago, so things are looking up for that. Through February, total visitor arrivals were down 0.6%, and spending was down 1.9% compared to 2023 levels. That was primarily due to declines on Maui. Excluding Maui, arrivals and spending were above 2023 levels. Growth in international visitors have helped offset declining visitors from the U.S. mainland, with increases in Japanese visitors making up most of the increase in the international arrivals. The housing market is relatively stable despite reduced activity levels. In March, the median sales price for a single family home on Oahu was $1.1 million, a 1.5% higher than 2023. The median sales price for condos on Oahu was $500,000, 6.7% below the previous year. Turning to slide two, I'll go over the highlights of our first quarter financial performance. We started the year with a solid quarter. Net income was $54.3 million, or 42 cents per share. The return on average tangible assets was 0.94%. And the return on average tangible common equity was 14.53%. As expected, the net interest margin expanded in the first quarter. This drove a $2.6 million increase in net interest income versus the prior quarter. Turning to slide three, we continue to execute the balance sheet optimization that started in the fourth quarter with the sale of $526 million of investment securities. During the first quarter, we used those proceeds to pay down about $470 million of higher cost public time deposits. The duration of the investment portfolio increased slightly in Q1 as a result of the security sale during the prior quarter. Our balance sheet strength continued to increase as we grew capital levels and have ample liquidity. Turning to slide four, period end loans and leases were $14.3 billion, about $33 million lower than December 31st. Line draws for ongoing construction projects drove the $72 million increase in construction loans. We did continue to face headwinds due to the slowdown of residential real estate market and the continued runoff in the indirect auto portfolio. We still believe that loan demand will pick up in the second half of the year, and that full-year growth will be in the low single-digit range. Now I'll turn it over to Jamie.