HONOLULU, July 30, 2021 /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 2021 of $30.3 million, compared to $29.6 million in the first, or linked quarter of
2021 and $14.0 million in the second
quarter of 2020.
"We're pleased with our financial results in the second quarter,
which reflect the strengthening local economy, solid execution and
our continuing efforts to work closely with our customers. Our
results benefited from another reduction of reserves for credit
losses, driven by the improving economy and credit quality," said
Ann Teranishi, president and chief
executive officer of American. "We remain focused on sound
management of our core business as we transform our operating model
to provide excellent customer experience in an increasingly digital
world," said Teranishi.
Financial Highlights
Second quarter 2021 net interest income was $60.8 million compared to $57.1 million in the linked quarter and
$56.7 million in the second quarter
of 2020. The higher net interest income versus the linked and prior
year quarters was primarily due to the recognition of fee income
associated with the ASB CARES (Paycheck Protection Program)
portfolio, lower amortization of investment premiums, growth in
earning assets and a record low cost of funds at 0.07%. Net
interest margin for the second quarter of 2021 was 2.98% compared
to 2.95% in the linked quarter and 3.21% in the second quarter of
2020.
The results for the second quarter of 2021 included a
credit-driven reserve release resulting in a negative provision for
credit losses of $12.2 million,
reflecting improvement in the local economy, credit upgrades in the
commercial loan portfolio, lower net charge offs, and lower reserve
requirements for the consumer unsecured loan portfolio. This
compares to a negative provision for credit losses of $8.4 million in the linked quarter and a
provision for credit losses of $15.1
million in the second quarter of 2020. As of June 30, 2021, American's allowance for credit
losses to outstanding loans was 1.51%.
The net charge-off ratio for the second quarter of 2021 was
0.04%, compared to 0.18% in the linked quarter and 0.49% in the
second quarter of 2020. Nonaccrual loans as a percent of total
loans receivable held for investment were 1.03% in the second
quarter of 2021, compared to 1.00% in the linked quarter and 0.86%
in the prior year quarter.
Noninterest income was $15.2
million in the second quarter of 2021, compared to
$19.0 million in the linked quarter
and $24.2 million in the second
quarter of 2020. The decrease in noninterest income from the linked
quarter was primarily due to lower mortgage banking income and
lower income from bank-owned life insurance in the second quarter.
The decrease in noninterest income from the prior year quarter was
primarily due to higher gains on sales of securities, including a
$7.1 million gain related to the sale
of Visa Class B restricted shares, and higher mortgage banking
income in the second quarter of 2020.
Second quarter of 2021 noninterest expense was $48.2 million, compared to $47.5 million in the linked quarter and
$48.4 million in the second quarter
of 2020. The decrease in noninterest expense compared to the second
quarter of 2020 was primarily due to lower COVID-19 related
expenses, partially offset by higher compensation and benefit
costs, including one-time settlement costs related to an executive
transition.
Total loans were $5.2 billion as
of June 30, 2021, down 2.7% from December 31, 2020. The
reduction in the loan portfolio included approximately $228 million in forgiven ASB CARES loans, in
addition to declines in the home equity line of credit and consumer
portfolios. The decrease in these portfolios was partially offset
by growth in the commercial real estate
portfolio.
Total deposits were $7.9 billion
as of June 30, 2021, an increase of 6.6% from
December 31, 2020. For the second quarter of 2021, the average
cost of funds was 0.07%, down one basis point versus the linked
quarter and down eleven basis points versus the prior year
quarter.
For the second quarter of 2021 return on average equity was
16.8%, compared to 16.0% in the linked quarter and 8.0% in the
second quarter of 2020. Return on average assets was 1.38% for the
second quarter of 2021, compared to 1.40% in the linked quarter and
0.72% in the same quarter last year.
In the second quarter of 2021, American paid dividends of
$23.0 million to HEI. American had a
Tier 1 leverage ratio of 8.0% at June 30, 2021.
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO
DISCUSS EARNINGS AND 2021 GUIDANCE
Concurrent with American's regulatory filing 30 days after the
end of the quarter, American announced its second quarter 2021
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 2021.
HEI plans to announce its second quarter 2021 consolidated
financial results on Monday, August 9,
2021 and will also conduct a webcast and conference call at
10:15 a.m. Hawaii time (4:15 p.m. Eastern time) that
same day to discuss its consolidated earnings, including American's
earnings, and 2021 guidance.
Parties in the U.S. may listen to the conference call by dialing
(844) 834-0652. International parties may listen to the conference
call by dialing (412) 317-5198. Parties may also access
presentation materials and/or listen to the conference call by
visiting the conference call/webcast link on HEI's website at
www.hei.com under the "Investor Relations" section,
sub-heading "News and Events — Events and Presentations."
A replay will be available online and via phone. The online
replay will be available on HEI's website about two hours after the
event. An audio replay will also be available about two hours
after the event through August 23,
2021. To access the audio replay, dial (877) 344-7529
(U.S.) or (412) 317-0088 (international) and enter passcode
10157240.
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 the Investor
Relations section 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 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.
HEI supplies power to approximately 95% of Hawaii's population through its electric
utility, Hawaiian Electric; 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.
FORWARD-LOOKING STATEMENTS
This release may contain "forward-looking statements," which
include statements that are predictive in nature, depend upon or
refer to future events or conditions, and usually include words
such as "will," "expects," "anticipates," "intends," "plans,"
"believes," "predicts," "estimates" or similar expressions. In
addition, any statements concerning future financial performance,
ongoing business strategies or prospects or possible future actions
are also forward-looking statements. Forward-looking statements are
based on current expectations and projections about future events
and are subject to risks, uncertainties and the accuracy of
assumptions concerning HEI and its subsidiaries, the performance of
the industries in which they do business and economic, political
and market factors, among other things. These forward-looking
statements are not guarantees of future performance.
Forward-looking statements in this release should be read in
conjunction with the "Cautionary Note Regarding Forward-Looking
Statements" and "Risk Factors" discussions (which are incorporated
by reference herein) set forth in HEI's Annual Report on Form 10-K
for the year ended December 31, 2020
and HEI's other periodic reports that discuss important factors
that could cause HEI's results to differ materially from those
anticipated in such statements. These forward-looking statements
speak only as of the date of the report, presentation or filing in
which they are made. Except to the extent required by the federal
securities laws, HEI, Hawaiian Electric, American and their
subsidiaries undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or
otherwise.
American Savings
Bank, F.S.B.
STATEMENTS OF INCOME DATA
(Unaudited)
|
|
|
Three months
ended
|
|
Six months ended June
30
|
(in thousands)
|
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
2021
|
|
2020
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
51,026
|
|
|
$
|
49,947
|
|
|
$
|
53,541
|
|
|
$
|
100,973
|
|
|
$
|
109,086
|
|
Interest and
dividends on investment securities
|
|
11,040
|
|
|
8,673
|
|
|
6,288
|
|
|
19,713
|
|
|
15,718
|
|
Total interest and
dividend income
|
|
62,066
|
|
|
58,620
|
|
|
59,829
|
|
|
120,686
|
|
|
124,804
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,281
|
|
|
1,462
|
|
|
3,071
|
|
|
2,743
|
|
|
6,658
|
|
Interest on other
borrowings
|
|
23
|
|
|
27
|
|
|
75
|
|
|
50
|
|
|
388
|
|
Total interest
expense
|
|
1,304
|
|
|
1,489
|
|
|
3,146
|
|
|
2,793
|
|
|
7,046
|
|
Net interest
income
|
|
60,762
|
|
|
57,131
|
|
|
56,683
|
|
|
117,893
|
|
|
117,758
|
|
Provision for credit
losses
|
|
(12,207)
|
|
|
(8,435)
|
|
|
15,133
|
|
|
(20,642)
|
|
|
25,534
|
|
Net interest
income after provision for credit losses
|
|
72,969
|
|
|
65,566
|
|
|
41,550
|
|
|
138,535
|
|
|
92,224
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,464
|
|
|
5,073
|
|
|
3,102
|
|
|
10,537
|
|
|
7,673
|
|
Fee income on deposit
liabilities
|
|
3,904
|
|
|
3,863
|
|
|
2,897
|
|
|
7,767
|
|
|
8,010
|
|
Fee income on other
financial products
|
|
2,201
|
|
|
2,442
|
|
|
1,212
|
|
|
4,643
|
|
|
3,084
|
|
Bank-owned life
insurance
|
|
1,624
|
|
|
2,561
|
|
|
1,673
|
|
|
4,185
|
|
|
2,467
|
|
Mortgage banking
income
|
|
1,925
|
|
|
4,300
|
|
|
6,252
|
|
|
6,225
|
|
|
8,252
|
|
Gain on sale of
investment securities, net
|
|
—
|
|
|
528
|
|
|
9,275
|
|
|
528
|
|
|
9,275
|
|
Other income,
net
|
|
76
|
|
|
272
|
|
|
(251)
|
|
|
348
|
|
|
162
|
|
Total noninterest
income
|
|
15,194
|
|
|
19,039
|
|
|
24,160
|
|
|
34,233
|
|
|
38,923
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
27,670
|
|
|
28,037
|
|
|
25,079
|
|
|
55,707
|
|
|
50,856
|
|
Occupancy
|
|
5,100
|
|
|
4,969
|
|
|
5,442
|
|
|
10,069
|
|
|
10,709
|
|
Data
processing
|
|
4,533
|
|
|
4,351
|
|
|
3,849
|
|
|
8,884
|
|
|
7,686
|
|
Services
|
|
2,475
|
|
|
2,862
|
|
|
2,474
|
|
|
5,337
|
|
|
5,283
|
|
Equipment
|
|
2,394
|
|
|
2,222
|
|
|
2,290
|
|
|
4,616
|
|
|
4,629
|
|
Office supplies,
printing and postage
|
|
978
|
|
|
1,044
|
|
|
1,049
|
|
|
2,022
|
|
|
2,390
|
|
Marketing
|
|
665
|
|
|
648
|
|
|
379
|
|
|
1,313
|
|
|
1,181
|
|
FDIC
insurance
|
|
788
|
|
|
816
|
|
|
751
|
|
|
1,604
|
|
|
853
|
|
Other
expense1
|
|
3,568
|
|
|
2,554
|
|
|
7,063
|
|
|
6,122
|
|
|
11,257
|
|
Total noninterest
expense
|
|
48,171
|
|
|
47,503
|
|
|
48,376
|
|
|
95,674
|
|
|
94,844
|
|
Income before
income taxes
|
|
39,992
|
|
|
37,102
|
|
|
17,334
|
|
|
77,094
|
|
|
36,303
|
|
Income
taxes
|
|
9,708
|
|
|
7,546
|
|
|
3,320
|
|
|
17,254
|
|
|
6,528
|
|
Net
income
|
|
$
|
30,284
|
|
|
$
|
29,556
|
|
|
$
|
14,014
|
|
|
$
|
59,840
|
|
|
$
|
29,775
|
|
Comprehensive
income (loss)
|
|
$
|
47,283
|
|
|
$
|
(16,198)
|
|
|
$
|
13,734
|
|
|
$
|
31,085
|
|
|
$
|
49,342
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.38
|
|
|
1.40
|
|
|
0.72
|
|
|
1.39
|
|
|
0.79
|
|
Return on average
equity
|
|
16.76
|
|
|
16.04
|
|
|
8.00
|
|
|
16.40
|
|
|
8.57
|
|
Return on average
tangible common equity
|
|
18.92
|
|
|
18.06
|
|
|
9.07
|
|
|
18.48
|
|
|
9.72
|
|
Net interest
margin
|
|
2.98
|
|
|
2.95
|
|
|
3.21
|
|
|
2.97
|
|
|
3.46
|
|
Efficiency
ratio
|
|
63.42
|
|
|
62.36
|
|
|
59.84
|
|
|
62.89
|
|
|
60.53
|
|
Net charge-offs to
average loans outstanding
|
|
0.04
|
|
|
0.18
|
|
|
0.49
|
|
|
0.11
|
|
|
0.46
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
1.03
|
|
|
1.00
|
|
|
0.86
|
|
|
|
|
|
Allowance for credit
losses to loans outstanding
|
|
1.51
|
|
|
1.73
|
|
|
1.50
|
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
7.5
|
|
|
7.3
|
|
|
7.9
|
|
|
|
|
|
Tier-1 leverage
ratio
|
|
8.0
|
|
|
8.3
|
|
|
8.4
|
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
23.0
|
|
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
28.0
|
|
|
$
|
28.0
|
|
1
The three- and six-month periods ended June 30, 2021 include
approximately $0.1 million and $0.4 million, respectively, of
certain direct and incremental COVID-19 related costs. The three-
and six-month periods ended June 30, 2020 include approximately
$3.7 million and $3.8 million, respectively, of certain significant
direct and incremental COVID-19 related costs. These costs for the
first six months of 2020, which have been recorded in Other
expense, include $2.3 million of compensation expense and $1.1
million of enhanced cleaning and sanitation costs.
|
|
This information should be read in conjunction with the
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)
|
June 30,
2021
|
December 31,
2020
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
115,567
|
|
|
$
|
178,422
|
|
Interest-bearing
deposits
|
|
105,800
|
|
|
114,304
|
|
Cash and cash
equivalents
|
|
221,367
|
|
|
292,726
|
|
Investment
securities
|
|
|
|
|
Available-for-sale, at
fair value
|
|
2,509,906
|
|
|
1,970,417
|
|
Held-to-maturity, at
amortized cost
|
|
375,655
|
|
|
226,947
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
10,000
|
|
|
8,680
|
|
Loans held for
investment
|
|
5,184,459
|
|
|
5,333,843
|
|
Allowance for credit
losses
|
|
(78,252)
|
|
|
(101,201)
|
|
Net loans
|
|
5,106,207
|
|
|
5,232,642
|
|
Loans held for sale,
at lower of cost or fair value
|
|
50,877
|
|
|
28,275
|
|
Other
|
|
553,702
|
|
|
554,656
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
Total
assets
|
|
$
|
8,909,904
|
|
|
$
|
8,396,533
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
2,868,770
|
|
|
$
|
2,598,500
|
|
Deposit
liabilities–interest-bearing
|
|
5,004,660
|
|
|
4,788,457
|
|
Other
borrowings
|
|
129,665
|
|
|
89,670
|
|
Other
|
|
166,419
|
|
|
183,731
|
|
Total
liabilities
|
|
8,169,514
|
|
|
7,660,358
|
|
Common
stock
|
|
1
|
|
|
1
|
|
Additional paid-in
capital
|
|
352,888
|
|
|
351,758
|
|
Retained
earnings
|
|
401,310
|
|
|
369,470
|
|
Accumulated other
comprehensive income (loss), net of taxes
|
|
|
|
|
Net unrealized gains
(losses) on securities
|
$
|
(8,815)
|
|
|
$
|
19,986
|
|
|
Retirement benefit
plans
|
(4,994)
|
|
(13,809)
|
|
(5,040)
|
|
14,946
|
|
Total shareholder's
equity
|
|
740,390
|
|
|
736,175
|
|
Total liabilities
and shareholder's equity
|
|
$
|
8,909,904
|
|
|
$
|
8,396,533
|
|
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
|
|
Vice President,
Investor Relations & Corporate Sustainability
|
E-mail:
ir@hei.com
|
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SOURCE American Savings Bank