HONOLULU, July 30, 2018 /PRNewswire/ -- American
Savings Bank, F.S.B. (American), a wholly-owned subsidiary of
Hawaiian Electric Industries, Inc. (NYSE: HE) today reported net
income for the second quarter of 2018 of $20.6 million compared to $19.0 million in the first, or linked, quarter of
2018 and $16.7 million in the second
quarter of 2017. Key measures of profitability improved, with
return on average equity rising to 13.56%, up 0.98% and 2.31%
compared to the linked and prior year quarters, respectively.
"We are pleased to report another quarter of record earnings,
reflecting a healthy Hawaii
economic environment, good operating execution, and the bottom line
benefits of tax reform," said Richard
Wacker, president and chief executive officer. "We are
seeing the benefits of our efforts to make banking easy for
customers and build deeper relationships with them."
Tax expense was approximately $2
million lower in the second quarter of 2018 compared to the
second quarter of 2017, primarily driven by the benefits of the
lower federal corporate tax rate from the Tax Cuts and Jobs Act of
2017.
Financial Highlights
Net interest income was $59.6
million in the second quarter of 2018 compared to
$58.5 million in the linked quarter
and $55.9 million in the second
quarter of 2017. The increase in net interest income compared
to the linked quarter was primarily due to good deposit growth that
funded commercial and home equity lines of credit loan portfolio
growth. Net interest margin for the second quarter of 2018
was 3.76%, unchanged from the linked quarter, compared to 3.68% in
the prior year quarter of 2017. Yield on earning assets remained
relatively unchanged during the quarter, as yield on loans and
leases increased 6 basis points from the previous quarter,
offsetting an increase in amortization of premium within the
investment portfolio. Cost of funds was 0.24% for the second
quarter of 2018, relatively unchanged from the linked quarter, and
compared to 0.21% in the prior year quarter of 2017.
The provision for loan losses was $2.8
million in the second quarter of 2018 compared to
$3.5 million in the linked
quarter and $2.8 million in the
second quarter of 2017. The net charge-off ratio was 0.32% in
the second quarter of 2018 compared to 0.28% in the linked quarter
and 0.21% in the prior year quarter. Nonaccrual loans as a
percent of total loans receivable held for investment was 0.57%
compared to 0.53% in the linked quarter and 0.44% in the prior year
quarter.
Noninterest income was $13.8
million in the second quarter of 2018 compared to
$13.4 million in the linked
quarter and $16.2 million in the
second quarter of 2017. The decrease in noninterest income in
the second quarter of 2018 compared to the second quarter of 2017
was primarily due to lower net debit card interchange fees of
$1.0 million, resulting primarily
from a reclassification of $1.1
million in expenses relating to a new accounting standard
discussed last quarter and lower income from bank-owned life
insurance.
Noninterest expense was $44.2
million in the second quarter of 2018 compared to
$43.9 million in the linked quarter
and $44.6 million in the second
quarter of 2017.
Total loans were $4.8 billion at
June 30, 2018, up $104 million or 4.4% annualized from December 31, 2017, driven mainly by increases in
commercial and commercial real estate loans of $91 million.
Total deposits were $6.1 billion
at June 30, 2018, an increase of
$226 million or 7.7% annualized from
December 31, 2017 including $100
million in repurchase agreements that were transferred into
deposit accounts. Excluding such transfer, total deposits increased
by 4.2% annualized.
Overall, American's return on average equity was 13.56% in the
second quarter of 2018 compared to 12.58% in the first quarter of
2018 and 11.25% in the prior year quarter. Return on average
assets was 1.20% in the second quarter of 2018 compared to 1.12% in
the first quarter of 2018 and 1.02% in the same quarter last
year. American's solid results enabled it to pay dividends of
$11.1 million to HEI while
maintaining healthy capital levels -- leverage ratio of 8.6% and
total capital ratio of 13.9% at June 30, 2018.
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO
DISCUSS EARNINGS AND 2018 EPS GUIDANCE
Concurrent with American's regulatory filing 30 days after the
end of the quarter, American announced its second quarter 2018
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 second quarter of
2018.
HEI plans to announce its second quarter 2018 consolidated
financial results on Friday, August 3,
2018 and will also conduct a webcast and conference call at
10:00 a.m. Hawaii time (4:00 p.m. Eastern time) that
same day to discuss its consolidated earnings, including American's
earnings, and 2018 EPS guidance.
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 or by accessing the webcast on HEI's website
at www.hei.com under the "Investor Relations" section, sub-heading
"News and Events." HEI and Hawaiian Electric Company, Inc.
(Hawaiian Electric) intend to continue to use HEI's website,
www.hei.com, 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 at www.hei.com 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 August 3,
2018 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 August 17, 2018 by dialing
(877) 344-7529 or (412) 317-0088 and entering passcode:
10121450.
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; provides a wide array of
banking and other financial services to consumers and businesses
through American, one of Hawaii's
largest financial institutions; and helps advance Hawaii's clean energy and sustainability goals
through investments by its non-regulated subsidiary, Pacific
Current, LLC.
|
American Savings
Bank, F.S.B.
STATEMENTS OF INCOME
DATA
(Unaudited)
|
|
|
|
Three months
ended
|
|
Six months ended June
30
|
|
(in thousands)
|
|
June 30,
2018
|
|
March 31,
2018
|
|
June 30,
2017
|
|
2018
|
|
2017
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
54,633
|
|
|
$
|
52,800
|
|
|
$
|
52,317
|
|
|
$
|
107,433
|
|
|
$
|
103,059
|
|
|
Interest and
dividends on investment securities
|
|
8,628
|
|
|
9,202
|
|
|
6,763
|
|
|
17,830
|
|
|
13,743
|
|
|
Total interest and
dividend income
|
|
63,261
|
|
|
62,002
|
|
|
59,080
|
|
|
125,263
|
|
|
116,802
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
3,284
|
|
|
2,957
|
|
|
2,311
|
|
|
6,241
|
|
|
4,414
|
|
|
Interest on other
borrowings
|
|
393
|
|
|
496
|
|
|
824
|
|
|
889
|
|
|
1,640
|
|
|
Total interest
expense
|
|
3,677
|
|
|
3,453
|
|
|
3,135
|
|
|
7,130
|
|
|
6,054
|
|
|
Net interest
income
|
|
59,584
|
|
|
58,549
|
|
|
55,945
|
|
|
118,133
|
|
|
110,748
|
|
|
Provision for loan
losses
|
|
2,763
|
|
|
3,541
|
|
|
2,834
|
|
|
6,304
|
|
|
6,741
|
|
|
Net interest
income after provision for loan losses
|
|
56,821
|
|
|
55,008
|
|
|
53,111
|
|
|
111,829
|
|
|
104,007
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
4,744
|
|
|
4,654
|
|
|
5,810
|
|
|
9,398
|
|
|
11,420
|
|
|
Fee income on deposit
liabilities
|
|
5,138
|
|
|
5,189
|
|
|
5,565
|
|
|
10,327
|
|
|
10,993
|
|
|
Fee income on other
financial products
|
|
1,675
|
|
|
1,654
|
|
|
1,971
|
|
|
3,329
|
|
|
3,837
|
|
|
Bank-owned life
insurance
|
|
1,133
|
|
|
871
|
|
|
1,925
|
|
|
2,004
|
|
|
2,908
|
|
|
Mortgage banking
income
|
|
617
|
|
|
613
|
|
|
587
|
|
|
1,230
|
|
|
1,376
|
|
|
Other income,
net
|
|
536
|
|
|
436
|
|
|
391
|
|
|
972
|
|
|
849
|
|
|
Total noninterest
income
|
|
13,843
|
|
|
13,417
|
|
|
16,249
|
|
|
27,260
|
|
|
31,383
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
23,655
|
|
|
24,440
|
|
|
24,541
|
|
|
48,095
|
|
|
47,583
|
|
|
Occupancy
|
|
4,194
|
|
|
4,280
|
|
|
4,185
|
|
|
8,474
|
|
|
8,339
|
|
|
Data
processing
|
|
3,540
|
|
|
3,464
|
|
|
3,207
|
|
|
7,004
|
|
|
6,487
|
|
|
Services
|
|
3,028
|
|
|
3,047
|
|
|
2,766
|
|
|
6,075
|
|
|
5,126
|
|
|
Equipment
|
|
1,874
|
|
|
1,728
|
|
|
1,771
|
|
|
3,602
|
|
|
3,519
|
|
|
Office supplies,
printing and postage
|
|
1,491
|
|
|
1,507
|
|
|
1,527
|
|
|
2,998
|
|
|
3,062
|
|
|
Marketing
|
|
1,085
|
|
|
645
|
|
|
839
|
|
|
1,730
|
|
|
1,356
|
|
|
FDIC
insurance
|
|
727
|
|
|
713
|
|
|
822
|
|
|
1,440
|
|
|
1,550
|
|
|
Other
expense
|
|
4,556
|
|
|
4,101
|
|
|
4,906
|
|
|
8,657
|
|
|
9,412
|
|
|
Total noninterest
expense
|
|
44,150
|
|
|
43,925
|
|
|
44,564
|
|
|
88,075
|
|
|
86,434
|
|
|
Income before
income taxes
|
|
26,514
|
|
|
24,500
|
|
|
24,796
|
|
|
51,014
|
|
|
48,956
|
|
|
Income
taxes
|
|
5,953
|
|
|
5,540
|
|
|
8,063
|
|
|
11,493
|
|
|
16,410
|
|
|
Net
income
|
|
$
|
20,561
|
|
|
$
|
18,960
|
|
|
$
|
16,733
|
|
|
$
|
39,521
|
|
|
$
|
32,546
|
|
|
Comprehensive
income
|
|
$
|
16,579
|
|
|
$
|
6,885
|
|
|
$
|
18,956
|
|
|
$
|
23,464
|
|
|
$
|
35,604
|
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.20
|
|
|
1.12
|
|
|
1.02
|
|
|
1.16
|
|
|
1.00
|
|
|
Return on average
equity
|
|
13.56
|
|
|
12.58
|
|
|
11.25
|
|
|
13.07
|
|
|
11.04
|
|
|
Return on average
tangible common equity
|
|
15.68
|
|
|
14.57
|
|
|
13.06
|
|
|
15.13
|
|
|
12.82
|
|
|
Net interest
margin
|
|
3.76
|
|
|
3.76
|
|
|
3.68
|
|
|
3.76
|
|
|
3.68
|
|
|
Efficiency
ratio
|
|
60.13
|
|
|
61.04
|
|
|
61.73
|
|
|
60.58
|
|
|
60.81
|
|
|
Net charge-offs to
average loans outstanding
|
|
0.32
|
|
|
0.28
|
|
|
0.21
|
|
|
0.30
|
|
|
0.25
|
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.57
|
|
|
0.53
|
|
|
0.44
|
|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.11
|
|
|
1.14
|
|
|
1.19
|
|
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
7.64
|
|
|
7.66
|
|
|
7.88
|
|
|
|
|
|
|
Tier-1 leverage
ratio
|
|
8.6
|
|
|
8.6
|
|
|
8.5
|
|
|
|
|
|
|
Total capital
ratio
|
|
13.9
|
|
|
14.0
|
|
|
13.7
|
|
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
11.1
|
|
|
$
|
10.9
|
|
|
$
|
9.4
|
|
|
$
|
22.0
|
|
|
$
|
18.8
|
|
The Statements of Income Data reflects the retrospective
application of ASU No. 2017-07, "Compensation-Retirement Benefits
(Topic 715): Improving the Presentation of Net Periodic Pension
Cost and Net Periodic Postretirement Benefit Cost," which was
adopted in first quarter 2018. Nonservice cost was reclassified
from "Compensation and employee benefits" to "Other expense."
This information should be read in conjunction with the
consolidated financial statements and the notes thereto in HEI
filings with the SEC.
|
American Savings
Bank, F.S.B.
BALANCE SHEETS
DATA
(Unaudited)
|
|
|
(in thousands)
|
|
June 30,
2018
|
|
December 31,
2017
|
|
Assets
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
120,189
|
|
|
$
|
140,934
|
|
|
Interest-bearing
deposits
|
|
109,230
|
|
|
93,165
|
|
|
Investment
securities
|
|
|
|
|
|
Available-for-sale,
at fair value
|
|
1,409,528
|
|
|
1,401,198
|
|
|
Held-to-maturity, at
amortized cost
|
|
62,630
|
|
|
44,515
|
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
10,158
|
|
|
9,706
|
|
|
Loans held for
investment
|
|
4,774,744
|
|
|
4,670,768
|
|
|
Allowance for loan
losses
|
|
(52,803)
|
|
|
(53,637)
|
|
|
Net loans
|
|
4,721,941
|
|
|
4,617,131
|
|
|
Loans held for sale,
at lower of cost or fair value
|
|
5,248
|
|
|
11,250
|
|
|
Other
|
|
462,469
|
|
|
398,570
|
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
|
Total
assets
|
|
$
|
6,983,583
|
|
|
$
|
6,798,659
|
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,812,348
|
|
|
$
|
1,760,233
|
|
|
Deposit
liabilities–interest-bearing
|
|
4,303,761
|
|
|
4,130,364
|
|
|
Other
borrowings
|
|
126,930
|
|
|
190,859
|
|
|
Other
|
|
131,063
|
|
|
110,356
|
|
|
Total
liabilities
|
|
6,374,102
|
|
|
6,191,812
|
|
|
Common
stock
|
|
1
|
|
|
1
|
|
|
Additional paid in
capital
|
|
346,188
|
|
|
345,018
|
|
|
Retained
earnings
|
|
310,298
|
|
|
292,957
|
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
|
Net unrealized losses on
securities
|
$
|
(32,596)
|
|
|
$
|
(14,951)
|
|
|
|
Retirement benefit
plans
|
(14,410)
|
|
(47,006)
|
|
(16,178)
|
|
(31,129)
|
|
|
Total
shareholder's equity
|
|
609,481
|
|
|
606,847
|
|
|
Total
liabilities and shareholder's equity
|
|
$
|
6,983,583
|
|
|
$
|
6,798,659
|
|
This information should be read in conjunction with the
consolidated financial statements and the notes thereto in HEI
filings with the SEC.
|
Contact:
|
Julie R.
Smolinski
|
Telephone: (808)
543-7300
|
|
Manager, Investor
Relations
|
E-mail:
ir@hei.com
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/american-savings-bank-reports-second-quarter-2018-earnings-300688838.html
SOURCE Hawaiian Electric Industries, Inc.