Bank of Hawaii Corporation

Good day, and thank you for standing by. Welcome to the Bank of Hawaii Corporation's second quarter 2022 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 the question during this session, you will need to press star, then one, then one. That's star, one, one on your telephone. Please be advised that today's conference is being recorded. I will now like to hand the conference over to your speaker, Jennifer Lamb, Executive Vice President, Treasurer, and Director of Investor Relations. You may begin.

Thank you. 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 the 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.

Thanks, Jennifer, and good morning, everyone. Bank of Hawaii produced solid performance for the second quarter of 2022. Core loans grew at a higher linked rate than the prior quarter for the fifth consecutive quarter. Deposit growth was on target. Our deposit base, which is 92% core consumer and commercial by customer type and 94% core demand and savings by product type, is well positioned for rising rates. We are clearly seeing the benefits of our strategic investments in both our consumer and commercial businesses through increased production. Margins expanded, efficiency increased, and credit statistics improved in the quarter. I'll spend the next few minutes sharing with you conditions in Hawaii, our predominant market, and then turn the call over to Dean to cover the financials. Mary will then cover credit and risk. The Hawaiian economy continues to improve as tourism and overall business activity improve. Here you see unemployment at 4.3%, hovering just north of national levels. This compares favorably to the 7.7% differential that existed early in the pandemic between Hawaii and the U.S. mainland from an employment standpoint. On the real estate front, sales activity cooled in June versus prior year levels on Oahu, although sales prices actually increased from prior year levels for both single-family homes up 12% and condominiums up 16%. Month's supply of sale housing inventory remains at suppressed levels, with 1.5 months of inventory for single-family homes and 1.6 months for condominiums. Of note, current inventories are down 53% for single-family homes and 46% for condominiums as compared to pre-pandemic June 2019 inventory levels on Oahu. The visitor industry continues to improve with the month of May at 91.6% of 2019 levels by arrival and 110.6% of 2019 levels by visitor spend. Year-to-date numbers are 85% and 102.3% of 2019 arrivals and spend levels. This performance comes despite less than half of the international market, traditionally 35% of our visitor market having yet to return as of yet. Obviously, strong support from U.S. visitors is making up meaningfully for the shortfall. REVPAR levels across the state are actually ahead of 2019 levels as demand for travel, and specifically travel to Hawaii, remains high. And now let me turn the call over to Dean to share the financial highlights. Dean?