Bank of Hawaii Corporation

Good day, everyone, and thank you for standing by. Welcome to the Bank of Hawaii Corporation second quarter of 2021 earnings conference call. At this time, all participants lined 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 on your telephone. Please be advised that the conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, the Head of Investor Relations, Ms. Janelle Higa. Please go ahead.

Thank you, and good morning, good afternoon, everyone. Thank you for joining us today. On the call with me this morning is our Chairman, President, and CEO, Peter Ho, our Chief Financial Officer, Dean Shigemura, and our Chief Risk Officer, Mary Sellers. Before we get started, let me remind you that today's conference call will contain some forward-looking statements. And while we believe our assumptions are reasonable, There are a variety of reasons that actual results may differ materially from those projected. During the call, we'll be referencing a slide presentation as well as the earnings release. A copy of the presentation and release are available on our website, boh.com, under Investor Relations. And now I'd like to turn the call over to Peter Ho.

Great. Thank you, Janelle. Good morning or good afternoon, everyone. Thanks for joining in. As is our custom, we'll go through marketing additions here. In the islands, I'll then turn it over to Dean, who will walk you through our financials, and then Mary will touch on credit, and then we'd be happy to take your questions for the quarter. If you look at the unemployment slide here, you see that the economy here in the islands is steadily improving, really being driven by a nice improvement or regaining traction in the visitor industry. as well as improvement in what we call the local economy. UHERO's economic pulse indicator, which is a high-frequency aggregation of numerous data points, has basically the local economy now at 72% versus pre-pandemic levels. A quarter ago, I think we reported 62% to you, so it's a nice improvement there. And you see all of this relating into better unemployment rate. So unemployment now is down to 7.7%, the fifth consecutive month of declines. The real estate market here in the islands, like many markets, is very strong. Oahu's single-family homes were up in terms of sales 49% June versus June a year ago. Median sales prices were up 27%. and inventories are very constrained. So median days on market are down 60% from a year ago to eight days, and months of inventory is down 52% from a year ago to 1.2 months of inventory. The condominium sector here on Oahu, similar story, a little bit more muted though, but sales up 134% June on June. Median sales price is up 9%. and inventory conditions very similar to the single-family home market. So a very strong real estate sector here on Oahu and generally throughout the Hawaiian Islands. The visitor industry, as I mentioned, is doing quite nicely. So you see this chart here, really since the relaunch of our safe travels program, visitor arrivals have increased substantively. basically now approaching pre-pandemic levels. Airlift is a great story. In June, actually, we had 1,027,000 seats into the islands, which is a 14.3% increase from June of 2019. And July and August forecasts are even more robust than that. So the airlines are doing their jobs well. Arrivals are looking good. The most recent data we have from the Hawaii Tourism Authority has arrivals at 74% of 2019 levels, so pre-pandemic levels. Visitor days at 83% of pre-pandemic levels and expenditures at just under 80% of 2019 levels. And we have reason to believe that the balance of the summer, June, July, and August should eclipse those numbers as well. Hotels are doing quite nicely. As of June, we're back up to about 97% of our room stock back in service. Occupancies are running at 77% statewide versus 84% pre-pandemic in 2019. Average daily rates are very robust at $320 for June versus $280 in for the same month of 2019. So if you can believe it, RevPar, our revenue per available room, is actually higher as of June of this year than it was in June of 2019 at $246 per available room versus $235 per available room June of 2019. So very strong performance in the hotel sector. And forward bookings, just talking to a number of professionals, in the industry seems to be very strong as things stand right now. The COVID condition here in the islands is reasonably good. Rolling seven-day averages have us in the top half of the country, although we are concerned, like most other marketplaces, over the emergence of the Delta variant. And vaccinations, for the most part, have gone well. So we're in the 36th percentile of the country, and hopefully, obviously, like most marketplaces, we would love to get that number higher. So that's the synopsis of the marketplace, and now let me turn the call over to Dean, who can walk you through the financials. Dean?