First Hawaiian, Inc.

Thank you for standing by, and welcome to First Hawaiian, Inc.' 's third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker 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. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to investor relations manager, Kevin Asayama. Please go ahead.

Thank you, Lateef, and thank you everyone for joining us as we review our financial results for the third 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've 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'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.

Thank you, Kevin. I'll start by giving a quick overview of the local economy. The overall Hawaii economy continues to be resilient. While Maui continues its recovery from the wildfires, the rest of the state has seen relatively stable tourism numbers and a low unemployment rate. The statewide seasonally adjusted unemployment rate for September was 2.9% compared to the national rate of 4.1%. Through August, total visitor arrivals were down 2.2%. And spending was down 2.3% compared to 2023 levels for the same period. Housing market remained stable. In September, the median sales price for a single family home on Oahu was $1.1 million, 6% higher than last September. And the median sales price for condos on Oahu was $518,000, 2.8% below the previous year. Turning to slide two, I'll give an overview of our third quarter results. We're really pleased that the momentum we saw building in the second quarter carried over to the third quarter. Deposit balances flattened out, and deposit costs were up only one basis point from the second quarter. Unexpected loan payoffs were a headwind for loans in the third quarter, but credit quality remained excellent, and assets repriced up, driving margin expansion. Non-interest income continued to be solid, and we continued to exercise good discipline on expenses. During the quarter, we released 3.8 million of tax reserves we recorded in connection with our 2016 separation from BNPP. This increased expenses for the third quarter by 3.8 million and reduced income tax expense by the same amount, resulting in no impact to net income. Turning to slide three, I'll go over some balance sheet highlights. The investment portfolio runoff is still being used to fund loan growth and reduce high-cost deposits. We continue to have ample liquidity. We had a $500 million SHLV advance mature in the third quarter and took out a new $250 million 12-month advance at a lower rate. The balance sheet remains well capitalized and our capital levels continue to grow due to strong earnings and a favorable AOCI change. Because of our strong and growing capital levels, we intend to resume share repurchases in the fourth quarter. Turning to slide four, total loans were down $119 million compared to the prior quarter. And while construction loans grew as expected and we had good activity in the CNI and CRE Unexpected payoffs in those portfolios were a headwind in the third quarter. The pipeline in the fourth quarter remains strong, but due to those payoffs in the third quarter, full-year loan growth will be relatively flat. Now I'll turn it over to Jamie.