Bank of Hawaii Corporation

Good day and thank you for standing by. Welcome to the Bank of Hawaii Corporation fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To participate during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to 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 Holtz, our Chief Financial Officer, Dean Shigemura, and our Chief Risk Officer, Mary Zeller. 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 The actual results may differ materially than those that are provided. During the call, we will be referencing a slide presentation as well as the earnings release. A copy of the presentation and release are available on our website, DOH.com, under Investor Relations. And now I'd like to turn the call over to Peter Hull.

Peter Hull Great. Thank you, Janelle. Good morning or good afternoon, everyone. Thanks for your interest in Bank of Hawaii. So I think we finished off the year with a pretty solid quarter that we're pleased to share with you over the next few moments. I'll begin, as usual, by giving you just a backdrop on the local marketplace and economy. I'll then flip the call over to Dean, who will get into the financials. We'll finish off with Mary on the credit side, although I will tell you that looks very good right now and should be a pretty short report. And then we'll be happy to take whatever questions you folks may have. So, next slide. If you look at the slide on employment, what you see here is kind of nice, steady improvement in the unemployment rate from, you know, what was a very distressed level back in April of 2020. I think unemployment now coming in at about 6 percent, most recently in November. And the forecast generally showed continued improvements as as we move out from some of the impacts of both the Delta and Omicron viruses or variants. On the next slide, you see real estate was a very good story in the islands in 2021. This is Oahu-only information. The neighbor islands, Maui, Kauai, and the Big Island, trending similarly. But for 2021, you see that on Oahu, single-family homes had a near-record year closed sales up almost 18 percent, median sales price up 19.3 percent, $990,000 for the year. I'd note that we pierced the million-dollar level for median single-family home sales prices in December of 2021. And there you see, down in days on market, so just an effective proxy for inventory looking pretty tight. On the condominium side, their performance was as good, not quite as good as single families, but volumes up 53% for the year, prices up 9%, and inventory levels similarly constrained as the single family home market. I'll finish with a little discussion on the visitor industry. Here you see daily arrivals in the gray bars or in the gray lines. That's 2019 in the dark blue, that's our performance over 2021. And I think the two takeaways here are that, you know, kind of X any extreme surge situation, the visitor market performed exceptionally well. So deep into the summer, call it the July-ish timeframe, we almost reached – in terms of arrivals with 2019 levels, which is really quite remarkable given that we still really haven't seen the resumption of international travel yet. Deeper into the fourth quarter towards Christmas in general, Christmas, the Christmas holiday season was a good one for the islands, but we have been impacted of late over the past month or so by Omicron, and you see kind of that redispersion of outcome as we get into more surge-like environments. So our hope for 22 is that we'll be certainly less impacted by surges as well as we hope to begin seeing the return of the international traveler towards the back half of next year. And so most folks that I talk to within the industry feel pretty good. They felt great about the holiday season, great ADRs, great occupancy, fair amount of optimism looking into 22. Again, a lot of that predicated on the return of the international visitor towards the back half of the year. But a lot of sense that domestic visitors are eager to travel, eager to travel to Hawaii, and increasingly used to just operating in kind of this viral environment. So that's it for me on color from the marketplace. And now let me turn the call over to Dean. Dean?