HONOLULU, Jan. 29, 2016 /PRNewswire/ --
Selected 2015 Highlights
- Achieved 2015 earnings and profitability targets consistent
with guidance ranges
- ROA of 0.95% vs. target of ~0.95%
- NIM of 3.53% vs. target of ~3.45% to 3.55%
- Loan growth of 4.1% led by commercial real estate, residential
mortgages and home equity lending
- Strong deposit growth of 8.7% including low-cost core deposit
growth of 8.5%
- Continued favorable trends in asset quality from 2015
- Net charge-off to average loans ratio of 0.04%
- Nonperforming assets of 1.02% of total loans and other real
estate owned
- Strong capital levels: 8.8% leverage ratio; 13.3% total capital
ratio
- Named one of Hawaii Business "Best Places to Work" for
the 6th consecutive year; American Banker
"Best Banks to Work For" list for the 3rd consecutive year;
Fortune Magazine as one of the 100 Best Workplaces for Women
in America in 2015 and No. 3 on Fortune's list of 50 Best
Workplaces for Diversity in America
- Contributed over 4,000 volunteer hours and over $1 million of charitable contributions to
community organizations
- Filed SEC Form 10 for spin-off of ASB Hawaii, Inc. the parent
company of American Saving Bank, into an independent publicly
traded company, mutually contingent upon the closing of the
proposed combination of NextEra Energy, Inc. and Hawaiian Electric
Industries, Inc. (HEI)
American Savings Bank, F.S.B.
(American), a wholly-owned indirect subsidiary of Hawaiian Electric
Industries, Inc. (NYSE: HE) today reported net income for the full
year of 2015 of $54.7 million
compared to $51.3 million in
2014. Net income for the fourth quarter of 2015 was
$15.0 million, compared to
$13.5 million in the third, or
linked, quarter of 2015 and $12.1
million in the fourth quarter of 2014.
"We met our key financial and operational objectives in 2015 and
continue to position the bank for good performance for our
customers and HEI shareholders in 2016. Our investments in
electronic banking platforms, data and risk management
capabilities, and process improvement should help us deliver a
continuously better experience for our customers, healthy growth,
and a more efficient bank," said Richard
Wacker, president and chief executive officer of
American.
Full Year Net Income:
Net income for 2015 of $54.7
million was $3.4 million
higher than 2014, reflecting solid revenue and asset growth.
The most significant drivers impacting the net income increase for
2015 were as follows on an after-tax basis:
- $5 million higher net interest
income as contributions from loan and investment portfolio growth
more than offset the lower yield on earning assets; and
- $4 million higher noninterest
income primarily due to higher mortgage banking income
($2 million) resulting from selling a
larger portion of low rate mortgage loan originations and higher
deposit-related fee initiatives ($2
million)
These increases were partially offset by $6 million higher noninterest expense primarily
due to higher pension and benefits expense.
___________________
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.
Fourth Quarter Net Income:
Fourth quarter 2015 net income of $15.0
million was $1.5 million
higher than the third, or linked quarter and $2.8 million higher than the fourth quarter
of 2014.
Compared to the linked quarter of 2015, the $1.5 million increase in the fourth quarter of
2015 was primarily driven by the following on an after-tax
basis:
- $1 million lower provision for
loan losses primarily related to the recovery during the fourth
quarter of 2015 of previously charged-off loans; and
- $1 million higher net interest
income due to strong loan and investment portfolio growth.
These increases were partially offset by $1 million (after-tax) of lower noninterest
income primarily due to the gain on sale of the American service
center building vacated as part of the campus consolidation plan in
the linked quarter.
Compared to the fourth quarter of 2014, the $2.8 million higher net income in the fourth
quarter of 2015 was primarily driven by the following on an
after-tax basis:
- $1 million higher net interest
income due to strong loan and investment portfolio growth;
- $1 million higher provision for
loan losses in the fourth quarter of 2014 primarily due to the
downgrade of one performing commercial real estate loan; and
- $1 million higher noninterest
income.
Financial Highlights:
Net interest income (pretax) was $188.6
million in 2015, higher than the $180.5 million in 2014 primarily due to loan and
investment portfolio growth in 2015. Net interest margin was
3.53% in 2015 compared to 3.62% in 2014, in line with the bank's
net interest margin target of 3.45% to 3.55% for 2015. The
decline in net interest margin was primarily attributable to lower
yields on interest-earning assets as loan portfolios continued to
re-price down in this continued low interest rate
environment. The fourth quarter 2015 net interest income
(pretax) was $48.7 million, compared
to $47.8 million in the linked
quarter and $46.7 million in the
prior year quarter. Net interest margin was 3.55% in the
fourth quarter of 2015 compared to 3.53% in the linked quarter and
3.65% in the fourth quarter of 2014.
The provision for loan losses (pretax) was $6.3 million in 2015 compared to $6.1 million in 2014. The fourth
quarter of 2015 provision for loan losses was $0.8 million compared to $3.0 million in the linked quarter and
$2.6 million in the fourth quarter of
2014. The lower fourth quarter of 2015 provision was
attributable to the recovery of previously charged-off loans.
The 2015 net charge-off ratio was 0.04% compared to 0.01% in
2014. The fourth quarter of 2015 net charge-off ratio was a
net recovery of 0.08%, lower than the 0.10% in the linked quarter
and lower than the prior year quarter ratio of 0.04%.
Noninterest income (pretax) for 2015 was $67.8 million, up from $61.2 million in 2014. The increase
was primarily driven by $3.4 million
higher mortgage banking income, higher deposit-related fee
initiatives and the gain on sale of real estate which were
partially offset by the gain on sale of securities in 2014.
In the fourth quarter of 2015, noninterest income (pretax) was
$16.8 million, compared to
$18.5 million in the linked
quarter and $15.3 million in the
prior year quarter. The linked quarter was positively
impacted by the $2 million gain on
sale of real estate.
Noninterest expense (pretax) for 2015 was $166.3 million, compared to $156.3 million in 2014. The increase
was primarily due to higher pension and benefits expense. In
the fourth quarter of 2015, noninterest expense (pretax) was
$42.0 million compared to
$42.4 million in the linked
quarter and $41.1 million in the
fourth quarter of 2014.
American achieved loan growth of 4.1% in 2015, consistent with
the bank's target and growth strategies, operating in the
competitive Hawaii market
environment. Loan growth was primarily driven by commercial
real estate, residential and home equity loans that helped to
offset the impact of the decline in net interest margin.
Total deposits were $5.0 billion
at December 31, 2015, an increase of
$199 million or 4.1% from
September 30, 2015, and $402
million or 8.7% from December
31, 2014. Low-cost core deposits increased
$185 million or 4.2% from September 30,
2015, and $357 million or 8.5%
from December 31, 2014. The
average cost of funds was 0.22% for the full year 2015, down
1 basis point from the prior year. For the fourth
quarter of 2015, the average cost of funds was 0.22%, unchanged
from the linked quarter and prior year quarter.
Overall, American's return on average equity for the full year
remained solid at 9.9% in 2015 compared to 9.6% in 2014 and the
return on average assets for the full year was 0.95% in 2015
consistent with 2014. For the fourth quarter of 2015, the
return on average equity was 10.7%, up from 9.7% in the linked
quarter and 8.9% in the fourth quarter last year. Return on
average assets was 1.01% for the fourth quarter of 2015, compared
to 0.92% from the linked quarter and 0.88% in the same quarter last
year.
In 2015, American paid dividends of $30
million to HEI while maintaining healthy capital levels --
leverage ratio of 8.8% and total capital ratio of 13.3% at
December 31, 2015.
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO
DISCUSS EARNINGS AND 2016 EPS GUIDANCE
Concurrent with American's regulatory filing 30 days after the
end of the quarter, American announced its fourth quarter 2015
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 fourth quarter and
full year 2015.
HEI plans to announce its fourth quarter and 2015 consolidated
financial results on Thursday, February 11, 2016 and will
conduct a webcast and conference call to discuss its consolidated
earnings, including American's earnings, and 2016 EPS guidance on
Thursday, February 11, 2016, at 12:00 noon Hawaii time (5:00 p.m. Eastern
time).
Interested parties within the United
States may listen to the conference by calling (888)
311-8190 and entering passcode: 15902422. International
parties may listen to the conference by calling (330) 863-3378 and
entering passcode: 15902422 or 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, 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, 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 February 11,
2016 webcast will be available on HEI's website beginning
about two hours after the event. Audio replays of the
teleconference will also be available approximately two hours after
the event through February 25, 2016,
by dialing (855) 859-2056 or (404) 537-3406 and entering
passcode: 15902422.
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.
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 "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 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 "Forward-Looking Statements" and "Risk
Factors" discussions (which are incorporated by reference herein)
set forth in HEI's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2015 and HEI's future 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
|
|
Years
ended December 31,
|
|
(in thousands)
|
|
December 31,
2015
|
|
September 30,
2015
|
|
December 31,
2014
|
|
2015
|
|
2014
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
47,136
|
|
$
|
46,413
|
|
$
|
46,276
|
|
$
|
184,782
|
|
$
|
179,341
|
|
Interest and
dividends on investment securities
|
|
4,550
|
|
4,213
|
|
3,187
|
|
15,120
|
|
11,945
|
|
Total interest
and dividend income
|
|
51,686
|
|
50,626
|
|
49,463
|
|
199,902
|
|
191,286
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,467
|
|
1,355
|
|
1,303
|
|
5,348
|
|
5,077
|
|
Interest on other
borrowings
|
|
1,510
|
|
1,515
|
|
1,468
|
|
5,978
|
|
5,731
|
|
Total interest
expense
|
|
2,977
|
|
2,870
|
|
2,771
|
|
11,326
|
|
10,808
|
|
Net interest
income
|
|
48,709
|
|
47,756
|
|
46,692
|
|
188,576
|
|
180,478
|
|
Provision for loan
losses
|
|
839
|
|
2,997
|
|
2,560
|
|
6,275
|
|
6,126
|
|
Net interest
income after provision for loan losses
|
|
47,870
|
|
44,759
|
|
44,132
|
|
182,301
|
|
174,352
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,667
|
|
5,639
|
|
5,760
|
|
22,211
|
|
21,747
|
|
Fee income on deposit
liabilities
|
|
5,746
|
|
5,883
|
|
5,074
|
|
22,368
|
|
19,249
|
|
Fee income on other
financial products
|
|
2,006
|
|
2,096
|
|
1,806
|
|
8,094
|
|
8,131
|
|
Bank-owned life
insurance
|
|
1,016
|
|
1,021
|
|
1,004
|
|
4,078
|
|
3,949
|
|
Mortgage banking
income
|
|
1,003
|
|
1,437
|
|
1,164
|
|
6,330
|
|
2,913
|
|
Gains on sale of
investment securities
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,847
|
|
Other income,
net
|
|
1,387
|
|
2,389
|
|
455
|
|
4,750
|
|
2,375
|
|
Total
noninterest income
|
|
16,825
|
|
18,465
|
|
15,263
|
|
67,831
|
|
61,211
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
23,705
|
|
22,728
|
|
19,835
|
|
90,518
|
|
79,885
|
|
Occupancy
|
|
4,115
|
|
4,128
|
|
4,238
|
|
16,365
|
|
17,197
|
|
Data
processing
|
|
3,002
|
|
3,032
|
|
2,975
|
|
12,103
|
|
11,690
|
|
Services
|
|
2,474
|
|
2,556
|
|
2,561
|
|
10,204
|
|
10,269
|
|
Equipment
|
|
1,578
|
|
1,608
|
|
1,638
|
|
6,577
|
|
6,564
|
|
Office supplies,
printing and postage
|
|
1,452
|
|
1,511
|
|
1,602
|
|
5,749
|
|
6,089
|
|
Marketing
|
|
844
|
|
934
|
|
1,309
|
|
3,463
|
|
3,999
|
|
FDIC
insurance
|
|
881
|
|
809
|
|
820
|
|
3,274
|
|
3,261
|
|
Other
expense
|
|
3,991
|
|
5,116
|
|
6,116
|
|
18,067
|
|
17,314
|
|
Total
noninterest expense
|
|
42,042
|
|
42,422
|
|
41,094
|
|
166,320
|
|
156,268
|
|
Income before
income taxes
|
|
22,653
|
|
20,802
|
|
18,301
|
|
83,812
|
|
79,295
|
|
Income
taxes
|
|
7,700
|
|
7,351
|
|
6,188
|
|
29,082
|
|
27,994
|
|
Net
income
|
|
$
|
14,953
|
|
$
|
13,451
|
|
$
|
12,113
|
|
$
|
54,730
|
|
$
|
51,301
|
|
Comprehensive
income
|
|
$
|
9,477
|
|
$
|
17,678
|
|
$
|
5,419
|
|
$
|
54,017
|
|
$
|
46,940
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.01
|
|
0.92
|
|
0.88
|
|
0.95
|
|
0.95
|
|
Return on average
equity
|
|
10.66
|
|
9.73
|
|
8.93
|
|
9.93
|
|
9.60
|
|
Return on average
tangible common equity
|
|
12.48
|
|
11.43
|
|
10.52
|
|
11.68
|
|
11.35
|
|
Net interest
margin
|
|
3.55
|
|
3.53
|
|
3.65
|
|
3.53
|
|
3.62
|
|
Net charge-offs to
average loans outstanding
|
|
(0.08)
|
|
0.10
|
|
0.04
|
|
0.04
|
|
0.01
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets
to loans outstanding and real estate owned *
|
|
1.02
|
|
1.00
|
|
0.85
|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.08
|
|
1.06
|
|
1.03
|
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
8.05
|
|
8.23
|
|
8.23
|
|
|
|
|
|
Tier-1 leverage ratio
*
|
|
8.8
|
|
8.8
|
|
8.9
|
|
|
|
|
|
Total capital ratio
*
|
|
13.3
|
|
13.4
|
|
12.3
|
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
7.5
|
|
$
|
7.5
|
|
$
|
8.8
|
|
$
|
30.0
|
|
$
|
36.0
|
|
|
* Regulatory basis.
Capital ratios as of December 31, 2015 and September 30, 2015
calculated under Basel III rules, which became effective January 1,
2015.
|
|
|
Prior period
financial statements reflect the retrospective application of ASU
No. 2014-01, "Investments-Equity Method and Joint Ventures (Topic
323): Accounting for Investments in Qualified Affordable Housing
Projects," which was adopted as of January 1, 2015 and did not have
a material impact on ASB's financial condition or results of
operations.
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI's Annual Report on SEC Form
10-K for the year ended December 31, 2015 (when filed), ASB Hawaii,
Inc.'s Form 10 for the year ended December 31, 2015 (when filed)
and HEI's Quarterly Reports on SEC Form 10-Q /A for the
quarters ended March 31, 2015 and June 30, 2015 and HEI's
Quarterly Report on SEC Form 10-Q for the quarter
ended September 30, 2015, as updated by SEC Forms
8-K.
|
|
American Savings
Bank, F.S.B.
BALANCE SHEETS
DATA
(Unaudited)
|
|
|
|
|
December 31
|
2015
|
|
2014
|
|
(in
thousands)
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
127,201
|
|
|
$
|
107,233
|
|
Interest-bearing
deposits
|
|
93,680
|
|
|
54,230
|
|
Available-for-sale
investment securities, at fair value
|
|
820,648
|
|
|
550,394
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
10,678
|
|
|
69,302
|
|
Loans receivable held
for investment
|
|
4,615,819
|
|
|
4,434,651
|
|
Allowance for
loan losses
|
|
(50,038)
|
|
|
(45,618)
|
|
Net
loans
|
|
4,565,781
|
|
|
4,389,033
|
|
Loans held for sale,
at lower of cost or fair value
|
|
4,631
|
|
|
8,424
|
|
Other
|
|
309,946
|
|
|
305,416
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
Total
assets
|
|
$
|
6,014,755
|
|
|
$
|
5,566,222
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,520,374
|
|
|
$
|
1,342,794
|
|
Deposit
liabilities–interest-bearing
|
|
3,504,880
|
|
|
3,280,621
|
|
Other
borrowings
|
|
328,582
|
|
|
290,656
|
|
Other
|
|
101,029
|
|
|
118,363
|
|
Total
liabilities
|
|
5,454,865
|
|
|
5,032,434
|
|
Common
stock
|
|
1
|
|
|
1
|
|
Additional paid in
capital
|
|
340,496
|
|
|
338,411
|
|
Retained
earnings
|
|
236,664
|
|
|
211,934
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
|
|
Net unrealized gains (losses) on
securities
|
$
|
(1,872)
|
|
|
|
$
|
462
|
|
|
|
Retirement benefit plans
|
(15,399)
|
|
(17,271)
|
|
(17,020)
|
|
(16,558)
|
|
Total shareholder's equity
|
|
559,890
|
|
|
533,788
|
|
Total liabilities and shareholder's equity
|
|
$
|
6,014,755
|
|
|
$
|
5,566,222
|
|
|
Prior period
financial statements reflect the retrospective application of ASU
No. 2014-01, "Investments-Equity Method and Joint Ventures (Topic
323): Accounting for Investments in Qualified Affordable Housing
Projects," which was adopted as of January 1, 2015 and did not have
a material impact on ASB's financial condition or results of
operations.
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI's Annual Report on SEC Form
10-K for the year ended December 31, 2015 (when filed), ASB Hawaii,
Inc.'s Form 10 for the year ended December 31, 2015 (when filed)
and HEI's Quarterly Reports on SEC Form 10-Q /A for the
quarters ended March 31, 2015 and June 30, 2015 and HEI's
Quarterly Report on SEC Form 10-Q for the quarter
ended September 30, 2015, as updated by SEC Forms
8-K.
|
|
Contact:
|
Clifford H.
Chen
|
|
|
Manager, Investor
Relations &
|
Telephone: (808)
543-7300
|
|
Strategic
Planning
|
E-mail:
ir@hei.com
|
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SOURCE Hawaiian Electric Industries, Inc.