Central Pacific Financial Corp New

Good afternoon, ladies and gentlemen, thank you for standing by and welcome to the Central Pacific Financial Corp second quarter 2022 conference call. During today's presentation, all parties will be in a listen only mode. Following the presentation, the conference will be open for questions. This call is being recorded and will be available for replay shortly after its completion on the company's website at www.cpb.bank. I'd like to turn the call over to Mr. David Morimoto, Senior Executive Vice President, Chief Financial Officer. Please go ahead.

Thank you, Drew. And thank you all for joining us as we review the financial results of the second quarter of 2022 for Central Pacific Financial Corp. With me this morning are Paul Yonomine, Chairman and Chief Executive Officer, Catherine Ngo, executive vice chair arnold martinez president and chief operating officer and anahu executive vice president and chief credit officer we have prepared a supplemental side presentation that provides additional details on our release and is available in the investor relations section of our website at cpb.bank During the course of today's call, management may make forward-looking statements. While we believe these statements are based on reasonable assumptions, they involve risks that may cause actual results to differ materially from those projected. For a complete discussion of the risks related to our forward-looking statements, please refer to slide two of our presentation. And now, I'll turn the call over to our chairman and CEO, Paul Yanamine.

Thank you, David, and good morning, everyone. As always, we appreciate your interest in Central Pacific Financial Corp. I'll start this morning with an update on the Hawaii market, then turn it over to the team to share our strong second quarter financial results, as well as other key updates. The Hawaii economy has successfully recovered from the pandemic and has an excellent outlook, despite national economic sentiment declining recently. It is important to note that the Hawaii market is highly unique and has historically proven to be resilient during periods of national economic stress. The Hawaii economy is robust and we believe will continue to perform well despite what happens in the broader mainland economy. Starting with the tourism sector, month-to-date July 2022 average air arrival counts are exceeding 90%. of pre-pandemic levels from 2019, even with significantly fewer international flights. It is projected that Japanese arrivals will continue to rise over the rest of this year and next. Visitor spending is strong, with $1.56 billion total for the month of May, which was an increase of 10.6% compared to the same month in 2019. Hotel performance continues to improve with total statewide hotel occupancy at 74% and an average daily rate of $340 in May. Hawaii's employment and housing metrics are solid as well. Our statewide unemployment rate was at 4.3% in June 2022 and is forecasted by the University of Hawaii Economic Research Organization to fall to 2.9% in 2023. The housing market in Hawaii remains very strong, with the Oahu median single-family home price at $1.1 million in June 2022, which is up 12% from the previous year. Other factors contributing to a favorable Hawaii economic outlook include a significant increase expected in Department of Defense military spending, which is already the second largest sector of Hawaii's economy with $7.7 billion in annual spending in 2020. Additionally, Honolulu's $9 billion plus rail construction project continues to move forward with construction of the first phase completed and expected to be operational by year end. Finally, $600 million in state funding was recently awarded for native Hawaiian housing, which will lead to significant home construction over the next five years. Lastly, with the possibility of a national economic recession increasing, it is important to note that the Hawaii economy weathered the Great Financial Recession better than most states. Hawaii's single-family median home price fell 11% between 2008 and 2011, compared to a 24% decline nationally. Additionally, Hawaii's unemployment rate peaked at 7% in 2009, whereas nationally it rose to 10% during the same time period. With Hawaii's continued strength, we anticipate Hawaii will again outperform the rest of the nation during this cycle. Now I'll turn it over to Catherine, our Executive Vice Chair, to provide additional updates on our company. Catherine.