Bank of Hawaii Corporation

Good day and thank you for standing by. Welcome to the Bank of Hawaii Corporation Third Quarter 2021 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 on your telephone. I would like to hand the conference over to your speaker, Janelle Higa. Please go ahead.

Thank you, Carmen, 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 an 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, everybody, or good afternoon. I'll lead off with a little commentary on what's happening here in the Hawaii marketplace. I'll then, as is our custom, turn the call over to Dean, who will fill you in on the financials. for the quarter, generally a pretty clean, good quarter for us. And then he'll turn the call over to Mary to touch on credit items, and then we'd be happy to take your questions. So, leading off, talk a little bit about the economy here in the islands. Got hit pretty hard late in the summer with the Delta variant, and our forecasters over at the University of Hawaii really had anticipated a pretty meaningful impact to employment in the state. And we were actually kind of surprised to see unemployment come out just recently at 6.6%. So continued positive downward trending in unemployment here in the state. Like I said, a bit of a surprise. And then we go to the next page. I think what's happening is the 9-20 forecast. You see an elevated level of forecast unemployment for 22 and 23. We'll see what happens in the next forecast, but at this point, it's looking like employment's in a bit of a better space than what we were all thinking coming out of our most recent Delta surge. Turning to the real estate market, like many places in the country, if not in the world, actually, real estate continues to be hot. sales prices, median sales prices for single-family homes up 19%, up 7.4% for condominiums that September on September. And then inventory levels continue to trend downwards. So inventory levels for single-family homes here in the islands are now, or here on Oahu actually, are now down to 1.2 months and 1.8 months for condominiums. Daily arrivals, really visitors into our marketplace. I think that this is an interesting chart. It shows a couple of things here. What it shows is the ramp-up, if you will, in visitor count into the islands really was on a pretty nice trajectory for most of 2021. right up until about July. You see from the chart that we have up here that basically we had comped back to 2019 levels by the end of July. And mind you, that was accomplished really with only one of our two primary markets in place. So lots of supply in, from the North American market, mainly the United States, both east and west coasters, and really not much in the way of demand in from Asia as that marketplace continued to work through its vaccine and infection protocols. Then the Delta hit and a number of policies put in place and a pretty meaningful downturn In visitor traffic, you see really kind of post-August. So we're in a bit of a repositioning phase, I think, at this point. It feels like, and talking to some of the hoteliers in town, that the winter should be a pretty good season for us again. And so I think absent any recurring surge here in the islands or nationally speaking, I think we should be in for kind of a resumption of that upward trend. trend in arrivals. But we'll see how this all plays out. Switching to the COVID situation, I mentioned we went through a pretty meaningful spate with the Delta variant in late, you know, kind of mid-late summer. Things have gotten quite a bit better here in the islands. So you see here on this chart that we're trending, you know, towards the bottom of the country. in terms of number of infections, which is a good thing. And then as it relates to vaccination rates, we're now at 70, almost 71% of the total population fully vaccinated. That's a very good number, I think, by national standards. And I think the interesting number is that if you look at the number, the percentage of people vaccinated here in the islands that are eligible to be vaccinated, That number is now actually into the 90 plus percent range. And so hopefully we'll see if the under 12 year old population gets authorization to be vaccinated. Assuming that happens, I think we would anticipate a very, very high percentage of our local state of white population to be vaccinated in the not too distant future. So I'll stop there and move all over to Dean. who will update you on our financials for the quarter. Dean?