Bank of Hawaii Corporation

Good day and thank you for standing by. Welcome to the Bank of Hawaii Corporation second quarter 2026 earnings conference call. At this time, all participants are on a list 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 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chang Park, Executive Vice President, Executive Director of Financial Performance and Investor Relations. Please go ahead.

Good morning and good afternoon. Thank you for joining us today for our second quarter 2026 earnings conference call. Joining me today is our President and CEO, Jim Polk, CFO Brad Satenberg, Chief Risk Officer Brad Shairson, and Manager of Investor Relations, Patricia Lam. Before we get started, I want to remind you that today's conference call will contain some forward-looking statements. And while we believe our assumptions are reasonable, the actual results may differ materially from those projected. During the call today, we'll be referencing a slide presentation as well as the earnings release. Both of these are available on our website, boh.com, under the investor relations link. And now I would like to turn the call over to Jim.

Thanks, Chang. Good morning and good afternoon, everyone. And thank you for joining us today. Bank of Hawaii delivered another solid quarter, reflecting continued progress in the underlying earnings power of the franchise. For the second quarter, we reported diluted earnings per share of $1.47 and net income of $63.8 million, up 13% and 11%, respectively, from the prior quarter. Return on average common equity improved to 15.5%. Net interest income increased to $153.6 million and our net interest margin expanded by four basis points to 2.78%. This marked our ninth consecutive quarter of margin expansion. The improvement reflected the continued repricing of our fixed rate assets along with disciplined deposit pricing. Our average cost of deposits remained essentially stable at 127 basis points. The interest rate environment continues to evolve with rates now expected to remain elevated for longer. We believe our balance sheet is well positioned for this environment as higher rates support earning asset yields and the continued repricing of our fixed rate portfolio. At the same time, the competitive environment for deposits remains elevated as customers continue to prioritize yield, which may limit opportunities for deposit cost improvement in the near term. As we have discussed previously, the second quarter is typically a seasonally lower period for deposits of Bank of Hawaii, and this quarter followed that pattern. Average deposits declined modestly from the prior quarter. At quarter end, non-interest bearing deposits continued to represent approximately 27% of total deposits. Our deposit franchise remains one of Bank of Hawaii's most important structural advantages. Our leading market position, trusted brand, diversified customer base, and Deep Relationships across our markets provides a stable core funding base. These advantages allow us to manage pricing thoughtfully while continuing to meet our customers' needs. Based on our performance through the first half of the year and our current interest rate assumptions, we continue to trend toward a net interest margin approaching 2.9% by year end. While the composition of margin opportunity has shifted somewhat in the current rate environment, We remain confident in the earnings trajectory of the balance sheet. Turning to lending, total loans increased $94 million during the quarter, representing annualized growth of approximately 2.6%. CNI and residential lending led the increase, while CRE growth was affected by payoff activity and the timing of deal closings. Residential mortgage growth benefited from the completion and closing of a large condominium project. Looking ahead, our commercial pipeline remains encouraging. On the consumer side, however, elevated interest rates and the absence of similar residential project closings are likely to moderate third quarter growth in consumer. We continue to expect full year loan growth in the lower mid-single digit range. Credit quality continues to be strong, and Brad will provide some additional details shortly. We also made progress on the strategic priorities we discussed last quarter. In wealth management, we are strengthening coordination across commercial banking, the private bank, Banco Advisors, and our broader advisory capabilities. The Center for Family Business and Entrepreneurs, which opened in April, continues to develop its client pipeline around succession and estate planning, business valuation, merger and acquisitions, and other complex needs. Bank of Hawaii is uniquely positioned in our markets to bring together capabilities to help clients navigate these consequential financial and business decisions. Beyond these initiatives, our teams remain focused on disciplined execution, protecting our strong balance sheet, deepening customer relationships, investing in our people and technology, and supporting the communities we serve. And although the interest rate outlook continues to evolve, the fundamental strengths of Bank of Hawaii remain unchanged. a leading deposit franchise, a trusted brand, deep customer relationships, strong credit quality, and a conservatively positioned balance sheet. These strengths give us confidence in our ability to perform across a range of economic and interest rate environments. Turning to the economic outlook, Hawaii's economy remains resilient, supported by low unemployment, healthy visitor spending, strong construction activity, and military investment. The Department of Business, Economic Development, and Tourism currently projects real economic growth of 1.6% in 2026. At the same time, we continue to monitor inflation, energy costs, consumer confidence, travel demand, and broader geopolitical and fiscal developments. With that said, I'll turn the call over to Brad Shairson to discuss credit. Brad Satenberg will then review our financial results in greater detail, after which we'll be pleased to take your questions.