HONOLULU, Oct. 30, 2017 /PRNewswire/ -- American
Savings Bank, F.S.B. (American), a
wholly-owned subsidiary of Hawaiian Electric Industries, Inc. (HEI)
(NYSE - HE) today reported net income of $17.6 million for the third quarter of 2017
compared to $16.7 million in the
second, or linked, quarter of 2017 and $15.1
million in the third quarter of 2016.
"Our results for the third quarter show that we continue to
deliver well for our customers, the bank, and for shareholders,"
said Richard Wacker, president and
chief executive officer of American. "Solid deposit growth
and improved asset quality continue to fuel the bank's broad
profitability improvement compared to last year.
Overall loan growth lagged as we continued to reduce
our commercial lending exposure to national syndicated credits and
resolve specific problem loans that paid in full, offsetting the
continued good growth in other segments of the loan portfolio."
Third quarter of 2017 net income of $17.6
million was $2.5 million
higher than the third quarter of 2016 and $0.9 million higher than the second (linked)
quarter of 2017.
Compared to the third quarter of 2016, the
$2.5 million increase was primarily
driven by the following on an after-tax basis:
- $3 million higher net interest
income driven mainly by growth in interest-earning assets funded by
strong deposit growth and overall improvement in asset yields;
and
- $3 million lower provision for
loan losses resulting from our work to improve commercial loan
asset quality.
These items were offset by the following on an after-tax
basis:
- $2 million lower noninterest
income primarily due to lower mortgage banking income and no gain
on sale of real estate; and
- $1 million higher noninterest
expense primarily due to higher performance based incentive
cost.
________________________
|
Note: Amounts
indicated as "after-tax" in this earnings release are based upon
adjusting items for the composite statutory tax rate of 40% for the
bank.
|
Compared to the linked second quarter of 2017, the $0.9 million increase was primarily driven by
lower provision for loan losses.
Net interest income (pretax) was $56.1
million in the third quarter of 2017, compared to
$55.9 million in the linked quarter
and $51.9 million in the prior year
quarter. Net interest margin was 3.69% in the third quarter
of 2017, compared to 3.68% in the linked quarter and 3.57% in the
third quarter of 2016.
The provision for loan losses (pretax) was $0.5 million in the third quarter of 2017
compared to $2.8 million in the
linked quarter and $5.7 million in
the third quarter of 2016. The decrease from the linked
quarter reflected the release of reserves attributed to the
strategic reduction in our commercial loan portfolio, including a
$53 million decrease in our exposure
to national syndicated credits. The higher provision in the
prior year quarter was largely due to reserves for specific
commercial credits. The third quarter of 2017 net charge-off
ratio was 0.32%, compared to 0.21% in the linked quarter and 0.20%
in the prior year quarter. Nonaccrual loans as a percent of
total loans receivable held for investment was 0.50% compared to
0.44% in the linked quarter and 1.11% in the prior year quarter.
Noninterest income (pretax) was $15.2
million in the third quarter of 2017 compared to
$16.2 million in the linked
quarter and $18.5 million in the
prior year quarter. The higher noninterest income in
the prior year quarter was largely due to $1.8 million higher mortgage banking income and
the $1.0 million gain on sale of real
estate.
Noninterest expense (pretax) was $44.1
million compared to $44.6 million in the linked quarter and
$41.9 million in the third
quarter of 2016.
Total loans were $4.7 billion at
September 30, 2017, a decrease of
$65 million or 1.8% annualized from
December 31, 2016. This
decrease reflects our work to improve overall commercial loan
quality through the strategic decrease in our exposure to national
syndicated credits, as well as the reduction in the commercial real
estate loan portfolio. The decrease in our commercial
portfolio was partially offset by growth in the home equity lines
of credit, consumer and residential loan portfolios.
Total deposits were $5.8 billion
at September 30, 2017, an increase of
$203 million or 4.9% annualized from
December 31, 2016. Low-cost
core deposits increased $153 million or 4.2% annualized from
December 31, 2016. The average
cost of funds was 0.20% for the third quarter of 2017 compared to
0.21% for the second quarter of 2017 and 0.24% for the third
quarter of 2016.
American's return on average equity was 11.6% for the third
quarter of 2017 compared to 11.3% in the linked quarter and 10.4%
in the third quarter of 2016. Return on average assets was
1.07% for the third quarter of 2017, compared to 1.02% in the
linked quarter and 0.97% in the same quarter last year.
American's solid results enabled it to pay dividends of
$9.4 million to HEI while maintaining
healthy capital levels, including a leverage ratio of 8.7% and a
total capital ratio of 13.9% at September 30, 2017.
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO
DISCUSS EARNINGS AND 2017 EPS GUIDANCE
Concurrent with American's regulatory filing 30 days after the
end of the quarter, American announced its third quarter 2017
financial results today. Please note that these reported
results relate only to American and are not necessarily indicative
of HEI's consolidated financial results for the third quarter of
2017.
HEI plans to announce its third quarter 2017 consolidated
financial results on Thursday, November 2,
2017 and will conduct a webcast and conference call to
discuss its consolidated earnings, including American's earnings,
and 2017 EPS guidance on Thursday, November 2, 2017, at
9:00 a.m. Hawaii time (3:00 p.m. Eastern
time).
Interested parties within the United
States may listen to the conference by calling (844)
834-0652 and international parties may listen to the conference by
calling (412) 317-5198. Parties may also listen to the
conference by accessing the webcast on HEI's website at www.hei.com
under the heading "Investor Relations." HEI and Hawaiian
Electric Company, Inc. (Hawaiian Electric) intend to continue to
use HEI's website as a means of disclosing additional
information. Such disclosures will be included on HEI's
website in the Investor Relations section. Accordingly,
investors should routinely monitor such portions of HEI's website,
in addition to following HEI's, Hawaiian Electric's and American's
press releases, HEI's and Hawaiian Electric's Securities and
Exchange Commission (SEC) filings and HEI's public conference calls
and webcasts. The information on HEI's website is not
incorporated by reference in this document or in HEI's and Hawaiian
Electric's SEC filings unless, and except to the extent,
specifically incorporated by reference. Investors may also
wish to refer to the Public Utilities Commission of the
State of Hawaii (PUC) website at
dms.puc.hawaii.gov/dms in order to review documents filed with and
issued by the PUC. No information on the PUC website is
incorporated by reference in this document or in HEI's and Hawaiian
Electric's SEC filings.
An on-line replay of the November 2,
2017 webcast will be available on HEI's website beginning
about two hours after the event. Replays of the conference
call will also be available approximately two hours after the event
through November 16, 2017 by dialing
(877) 344-7529 or (412) 317-0088 and entering passcode:
10112461.
HEI supplies power to approximately 95% of Hawaii's population through its electric
utilities, Hawaiian Electric, Hawaii Electric Light Company, Inc.
and Maui Electric Company, Limited and provides a wide array of
banking and other financial services to consumers and businesses
through American, one of Hawaii's
largest financial institutions.
American Savings
Bank, F.S.B.
|
STATEMENTS OF INCOME
DATA
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Nine months ended
September 30
|
(in thousands)
|
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
2017
|
|
2016
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
52,210
|
|
|
$
|
52,317
|
|
|
$
|
50,444
|
|
|
$
|
155,269
|
|
|
$
|
148,571
|
|
Interest and
dividends on investment securities
|
|
6,850
|
|
|
6,763
|
|
|
4,759
|
|
|
20,593
|
|
|
14,219
|
|
Total interest and
dividend income
|
|
59,060
|
|
|
59,080
|
|
|
55,203
|
|
|
175,862
|
|
|
162,790
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
2,444
|
|
|
2,311
|
|
|
1,871
|
|
|
6,858
|
|
|
5,154
|
|
Interest on other
borrowings
|
|
470
|
|
|
824
|
|
|
1,464
|
|
|
2,110
|
|
|
4,416
|
|
Total interest
expense
|
|
2,914
|
|
|
3,135
|
|
|
3,335
|
|
|
8,968
|
|
|
9,570
|
|
Net interest
income
|
|
56,146
|
|
|
55,945
|
|
|
51,868
|
|
|
166,894
|
|
|
153,220
|
|
Provision for loan
losses
|
|
490
|
|
|
2,834
|
|
|
5,747
|
|
|
7,231
|
|
|
15,266
|
|
Net interest
income after provision for loan losses
|
|
55,656
|
|
|
53,111
|
|
|
46,121
|
|
|
159,663
|
|
|
137,954
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,635
|
|
|
5,810
|
|
|
5,599
|
|
|
17,055
|
|
|
16,799
|
|
Fee income on deposit
liabilities
|
|
5,533
|
|
|
5,565
|
|
|
5,627
|
|
|
16,526
|
|
|
16,045
|
|
Fee income on other
financial products
|
|
1,904
|
|
|
1,971
|
|
|
2,151
|
|
|
5,741
|
|
|
6,563
|
|
Bank-owned life
insurance
|
|
1,257
|
|
|
1,925
|
|
|
1,616
|
|
|
4,165
|
|
|
3,620
|
|
Mortgage banking
income
|
|
520
|
|
|
587
|
|
|
2,347
|
|
|
1,896
|
|
|
5,096
|
|
Gains on sale of
investment securities, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
598
|
|
Other income,
net
|
|
380
|
|
|
391
|
|
|
1,165
|
|
|
1,229
|
|
|
1,786
|
|
Total noninterest
income
|
|
15,229
|
|
|
16,249
|
|
|
18,505
|
|
|
46,612
|
|
|
50,507
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
23,724
|
|
|
24,742
|
|
|
22,844
|
|
|
71,703
|
|
|
67,197
|
|
Occupancy
|
|
4,284
|
|
|
4,185
|
|
|
3,991
|
|
|
12,623
|
|
|
12,244
|
|
Data
processing
|
|
3,262
|
|
|
3,207
|
|
|
3,150
|
|
|
9,749
|
|
|
9,599
|
|
Services
|
|
2,863
|
|
|
2,766
|
|
|
2,427
|
|
|
7,989
|
|
|
8,093
|
|
Equipment
|
|
1,814
|
|
|
1,771
|
|
|
1,759
|
|
|
5,333
|
|
|
5,193
|
|
Office supplies,
printing and postage
|
|
1,444
|
|
|
1,527
|
|
|
1,483
|
|
|
4,506
|
|
|
4,431
|
|
Marketing
|
|
934
|
|
|
839
|
|
|
747
|
|
|
2,290
|
|
|
2,507
|
|
FDIC
insurance
|
|
746
|
|
|
822
|
|
|
907
|
|
|
2,296
|
|
|
2,704
|
|
Other
expense
|
|
5,050
|
|
|
4,705
|
|
|
4,591
|
|
|
14,066
|
|
|
13,948
|
|
Total noninterest
expense
|
|
44,121
|
|
|
44,564
|
|
|
41,899
|
|
|
130,555
|
|
|
125,916
|
|
Income before
income taxes
|
|
26,764
|
|
|
24,796
|
|
|
22,727
|
|
|
75,720
|
|
|
62,545
|
|
Income
taxes
|
|
9,172
|
|
|
8,063
|
|
|
7,623
|
|
|
25,582
|
|
|
21,483
|
|
Net
income
|
|
$
|
17,592
|
|
|
$
|
16,733
|
|
|
$
|
15,104
|
|
|
$
|
50,138
|
|
|
$
|
41,062
|
|
Comprehensive
income
|
|
$
|
18,009
|
|
|
$
|
18,956
|
|
|
$
|
13,176
|
|
|
$
|
53,613
|
|
|
$
|
49,537
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.07
|
|
|
1.02
|
|
|
0.97
|
|
|
1.02
|
|
|
0.89
|
|
Return on average
equity
|
|
11.64
|
|
|
11.25
|
|
|
10.36
|
|
|
11.24
|
|
|
9.50
|
|
Return on average
tangible common equity
|
|
13.47
|
|
|
13.06
|
|
|
12.06
|
|
|
13.04
|
|
|
11.07
|
|
Net interest
margin
|
|
3.69
|
|
|
3.68
|
|
|
3.57
|
|
|
3.68
|
|
|
3.59
|
|
Efficiency
ratio
|
|
61.82
|
|
|
61.73
|
|
|
59.54
|
|
|
61.15
|
|
|
61.81
|
|
Net charge-offs to
average loans outstanding
|
|
0.32
|
|
|
0.21
|
|
|
0.20
|
|
|
0.27
|
|
|
0.19
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.50
|
|
|
0.44
|
|
|
1.11
|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.13
|
|
|
1.19
|
|
|
1.24
|
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
8.01
|
|
|
7.88
|
|
|
8.03
|
|
|
|
|
|
Tier-1 leverage
ratio
|
|
8.7
|
|
|
8.5
|
|
|
8.6
|
|
|
|
|
|
Total capital
ratio
|
|
13.9
|
|
|
13.7
|
|
|
13.3
|
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
9.4
|
|
|
$
|
9.4
|
|
|
$
|
9.0
|
|
|
$
|
28.1
|
|
|
$
|
27.0
|
|
|
This information
should be read in conjunction with the condensed consolidated
financial statements and the notes thereto in HEI filings with the
SEC. Results of operations for interim periods are not necessarily
indicative of results to be expected for future interim periods or
the full year.
|
American Savings
Bank, F.S.B.
|
BALANCE SHEETS
DATA
|
(Unaudited)
|
|
(in
thousands)
|
September 30,
2017
|
December 31,
2016
|
|
|
|
|
|
Assets
|
|
|
|
|
Cash and due from
banks
|
|
$
|
120,492
|
|
|
$
|
137,083
|
|
Interest-bearing
deposits
|
|
69,223
|
|
|
52,128
|
|
Restricted
cash
|
|
—
|
|
|
1,764
|
|
Available-for-sale
investment securities, at fair value
|
|
1,320,110
|
|
|
1,105,182
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
9,706
|
|
|
11,218
|
|
Loans receivable held
for investment
|
|
4,676,281
|
|
|
4,738,693
|
|
Allowance for loan
losses
|
|
(53,047)
|
|
|
(55,533)
|
|
Net loans
|
|
4,623,234
|
|
|
4,683,160
|
|
Loans held for sale,
at lower of cost or fair value
|
|
15,728
|
|
|
18,817
|
|
Other
|
|
378,224
|
|
|
329,815
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
Total
assets
|
|
$
|
6,618,907
|
|
|
$
|
6,421,357
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,710,698
|
|
|
$
|
1,639,051
|
|
Deposit
liabilities–interest-bearing
|
|
4,041,628
|
|
|
3,909,878
|
|
Other
borrowings
|
|
153,552
|
|
|
192,618
|
|
Other
|
|
107,558
|
|
|
101,635
|
|
Total
liabilities
|
|
6,013,436
|
|
|
5,843,182
|
|
Common
stock
|
|
1
|
|
|
1
|
|
Additional paid in
capital
|
|
344,512
|
|
|
342,704
|
|
Retained
earnings
|
|
279,956
|
|
|
257,943
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
Net unrealized losses on
securities
|
$
|
(5,479)
|
|
|
$
|
(7,931)
|
|
|
Retirement benefit
plans
|
(13,519)
|
|
(18,998)
|
|
(14,542)
|
|
(22,473)
|
|
Total
shareholder's equity
|
|
605,471
|
|
|
578,175
|
|
Total liabilities
and shareholder's equity
|
|
$
|
6,618,907
|
|
|
$
|
6,421,357
|
|
|
This information
should be read in conjunction with the condensed consolidated
financial statements and the notes thereto in HEI filings with the
SEC.
|
Contact:
|
Clifford H.
Chen
|
Telephone: (808)
543-7300
|
|
Treasurer &
Manager, Investor Relations & Strategic Planning
|
E-mail:
ir@hei.com
|
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multimedia:http://www.prnewswire.com/news-releases/american-savings-bank-reports-third-quarter-2017-earnings-300545870.html
SOURCE Hawaiian Electric Industries, Inc.