HONOLULU, July 30, 2013 /PRNewswire/ -- American Savings
Bank, F.S.B. (American), a
wholly-owned indirect subsidiary of Hawaiian Electric Industries,
Inc. (HEI) (NYSE - HE) today reported net income for the second
quarter of 2013 of $15.9 million,
compared to $14.2 million in both the
first (or linked) quarter of 2013 and in the second quarter of
2012.
"American delivered solid results in the second quarter as good
loan growth helped us offset the continued pressure of the low
interest rate environment. We experienced very low credit
costs in the quarter thanks to good risk management systems and the
positive trends in the Hawaii
economy. We also achieved another strategic objective,
reaching agreement for the sale of our credit card portfolio
coupled with the introduction of a new, more competitive offering
for our customers," said Richard
Wacker, president and chief executive officer of
American.
Second quarter 2013 net income was $1.8
million higher than the linked quarter primarily driven by
(after-tax):
- $2 million lower provision for
loan losses, $1 million of which
related to the planned third quarter sale of American's credit card
portfolio; and
- $1 million higher gains on sales
of investment securities.
These were largely offset by (after-tax):
- $1 million lower mortgage banking
income as a larger proportion of new residential mortgages were
added to the portfolio rather than sold; and
- $1 million higher noninterest
expense.
Compared to the same quarter of 2012, the $1.7 million net income increase was primarily
driven by (after-tax):
- $2 million lower provision for
loan losses (as discussed above); and
- $1 million higher gains on sales
of investment securities.
These were offset by $1 million
(after-tax) higher noninterest expense primarily due to targeted
staffing and information technology (IT) expense increases.
Net interest margin (NIM) was 3.79% in the second quarter of
2013 compared to 3.78% in the linked quarter and 3.97% in the
second quarter of 2012. Loan growth, particularly in
residential mortgages, and higher fees associated with the
prepayment of some large commercial loans in the quarter offset the
continued decline in stated rates that totaled five basis points
compared to the linked quarter. The decline in net interest
margin compared to the prior year quarter was primarily
attributable to lower yields on interest-earning assets as loans
continued to re-price down in the low interest rate
environment.
Provision for loan losses (pretax) was a net credit of
$1.0 million in the second quarter of
2013 compared to net charges of $1.9
million in the linked quarter and $2.4 million in the second quarter of 2012.
In the second quarter of 2013, American released $1 million (pretax) of reserves in connection
with the agreement to sell its credit card portfolio, a transaction
that is expected to close in the third quarter. No additional
provision expense was incurred: increases in the reserve for
loan growth and charge-offs were offset by approximately
$3 million (pretax) of reversals associated with specific
commercial loan paydowns, recoveries of previously charged off
consumer loans, and the ongoing improvement in the quality of the
bank's loan portfolio. The second quarter 2013 net charge-off
ratio improved to 0.08% from 0.12% in the linked quarter and 0.19%
in the prior year quarter.
Non-interest expense (pretax) was $39.8
million in the second quarter of 2013 compared to
$38.7 million in the linked
quarter and $37.6 million in the
second quarter of 2012. The increase from the linked quarter
is primarily attributable to the timing of marketing expenses and
additional reserves on unfunded commercial lines of credit.
The increase from the prior year quarter is largely due to the
targeted staffing increases to support increased business volumes,
IT and risk management capabilities, as well as increasing employee
benefit expenses.
In the second quarter and year-to-date 2013, loans grew by
$108 million and $173 million, respectively. This quarter's
loan growth was primarily driven by residential mortgages as
American allocated more of its continued strong production to the
portfolio. Year-to-date annualized loan growth was 9.1%.
Total deposits were $4.3 billion
at June 30, 2013, down $36 million from March 31, 2013,
primarily due to the decreases in commercial deposits and
certificates of deposit. Average cost of funds remained low
at 0.22% for the second quarter 2013, consistent with the linked
quarter and down 5 basis points from the same period last
year.
Overall, return on average equity and return on average assets
were strong at 12.6% and 1.25%, respectively, in the quarter.
American's solid results enabled it to pay dividends of
$10 million to HEI in the quarter while maintaining healthy
capital levels -- leverage ratio of 9.3% and total risk-based
capital ratio of 12.5% at June 30,
2013.
HEI EARNINGS RELEASE, WEBCAST AND TELECONFERENCE
Concurrent with American's regulatory filing 30 days after the
end of the quarter, American announced its second quarter 2013
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
2013.
HEI plans to announce its second quarter 2013 consolidated
financial results on Thursday, August 8,
2013 and will conduct a webcast and teleconference call to
review second quarter 2013 consolidated earnings, including
American's earnings, on Thursday, August 8, 2013, at
11:00 a.m. Hawaii time (5:00 p.m.
Eastern time). The event can be accessed through HEI's
website at www.hei.com or by dialing (877) 415-3186,
passcode: 97287517 for the teleconference call. The
presentation for the webcast will be on HEI's website under the
headings "Investor Relations," "News & Events" and
"Presentations & Webcasts." HEI and Hawaiian Electric
Company, Inc. (HECO) intend to continue to use HEI's website,
www.hei.com, as a means of disclosing material information, as well
as other important 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, HECO's and
American's press releases, HEI's and HECO's Securities and Exchange
Commission (SEC) filings and HEI's public conference calls and
webcasts. Also, at the Investor Relations section of HEI's
website, investors may sign up to receive e-mail alerts (based on
each investor's selected preferences). The information on
HEI's website is not incorporated by reference in this document or
in HEI's and HECO'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 HECO's
SEC filings.
An online replay of the webcast will be available at the same
website beginning about two hours after the event. Replays of
the teleconference call will also be available approximately two
hours after the event through August 22,
2013, by dialing (888) 286-8010, passcode:
60955453.
HEI supplies power to approximately 450,000 customers or 95% of
Hawaii's population through its
electric utilities, HECO, 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 March 31, 2013 and HEI's subsequent 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, HECO, 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,
|
|
March
31,
|
|
June
30,
|
|
June 30
|
(in
thousands)
|
|
2013
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
43,624
|
|
$
42,603
|
|
$
44,473
|
|
$ 86,227
|
|
$ 89,361
|
Interest on
investment and mortgage-related securities
|
|
3,234
|
|
3,464
|
|
3,297
|
|
6,698
|
|
7,102
|
Total interest
income
|
|
46,858
|
|
46,067
|
|
47,770
|
|
92,925
|
|
96,463
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,296
|
|
1,312
|
|
1,696
|
|
2,608
|
|
3,475
|
Interest on other
borrowings
|
|
1,178
|
|
1,164
|
|
1,214
|
|
2,342
|
|
2,475
|
Total interest
expense
|
|
2,474
|
|
2,476
|
|
2,910
|
|
4,950
|
|
5,950
|
Net interest
income
|
|
44,384
|
|
43,591
|
|
44,860
|
|
87,975
|
|
90,513
|
Provision (credit)
for loan losses
|
|
(959)
|
|
1,858
|
|
2,378
|
|
899
|
|
5,924
|
Net interest
income after provision (credit) for loan losses
|
|
45,343
|
|
41,733
|
|
42,482
|
|
87,076
|
|
84,589
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
7,996
|
|
7,643
|
|
7,463
|
|
15,639
|
|
14,800
|
Fee income on deposit
liabilities
|
|
4,433
|
|
4,314
|
|
4,322
|
|
8,747
|
|
8,600
|
Fee income on other
financial products
|
|
1,780
|
|
1,794
|
|
1,532
|
|
3,574
|
|
3,081
|
Mortgage banking
income
|
|
2,003
|
|
3,346
|
|
2,185
|
|
5,349
|
|
4,220
|
Gain on sale of
securities
|
|
1,226
|
|
-
|
|
134
|
|
1,226
|
|
134
|
Other
income
|
|
1,731
|
|
1,592
|
|
1,315
|
|
3,323
|
|
2,675
|
Total noninterest
income
|
|
19,169
|
|
18,689
|
|
16,951
|
|
37,858
|
|
33,510
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
20,063
|
|
20,088
|
|
18,696
|
|
40,151
|
|
37,342
|
Occupancy
|
|
4,219
|
|
4,123
|
|
4,241
|
|
8,342
|
|
8,466
|
Data
processing
|
|
2,827
|
|
2,987
|
|
2,489
|
|
5,814
|
|
4,600
|
Services
|
|
2,328
|
|
2,103
|
|
2,221
|
|
4,431
|
|
4,004
|
Equipment
|
|
1,870
|
|
1,774
|
|
1,807
|
|
3,644
|
|
3,537
|
Other
expense
|
|
8,500
|
|
7,595
|
|
8,106
|
|
16,095
|
|
14,813
|
Total noninterest
expense
|
|
39,807
|
|
38,670
|
|
37,560
|
|
78,477
|
|
72,762
|
Income before
income taxes
|
|
24,705
|
|
21,752
|
|
21,873
|
|
46,457
|
|
45,337
|
Income
taxes
|
|
8,786
|
|
7,597
|
|
7,684
|
|
16,383
|
|
15,271
|
Net
income
|
|
$
15,919
|
|
$
14,155
|
|
$
14,189
|
|
$ 30,074
|
|
$ 30,066
|
Comprehensive
income
|
|
$
7,340
|
|
$
15,484
|
|
$
15,456
|
|
$ 22,824
|
|
$ 31,355
|
|
|
|
|
|
|
|
|
|
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
Return on average
assets
|
|
1.25
|
|
1.12
|
|
1.15
|
|
1.19
|
|
1.22
|
Return on average
equity
|
|
12.56
|
|
11.28
|
|
11.35
|
|
11.93
|
|
12.11
|
Return on average
tangible common equity
|
|
15.00
|
|
13.49
|
|
13.58
|
|
14.25
|
|
14.50
|
Net interest
margin
|
|
3.79
|
|
3.78
|
|
3.97
|
|
3.79
|
|
4.01
|
Net charge-offs to
average loans outstanding
|
|
0.08
|
|
0.12
|
|
0.19
|
|
0.10
|
|
0.24
|
Efficiency
ratio
|
|
62
|
|
61
|
|
60
|
|
62
|
|
58
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets
to loans outstanding and real estate owned *
|
1.56
|
|
1.89
|
|
1.84
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.04
|
|
1.11
|
|
1.06
|
|
|
|
|
Tier-1 leverage ratio
*
|
|
9.3
|
|
9.1
|
|
9.2
|
|
|
|
|
Total risk-based
capital ratio *
|
|
12.5
|
|
12.8
|
|
12.8
|
|
|
|
|
Tangible common
equity to total assets
|
|
8.42
|
|
8.38
|
|
8.58
|
|
|
|
|
Dividend paid to HEI
(via ASHI) ($ in millions)
|
|
10
|
|
10
|
|
10
|
|
20
|
|
20
|
* Regulatory
basis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2012 and HEI's Quarterly Reports on SEC Form 10-Q for the
quarters ended March 31, 2013 and June 30, 2013 (when
filed), as updated by SEC Forms
8-K. 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)
|
|
|
|
June 30,
|
December
31,
|
(in
thousands)
|
2013
|
2012
|
Assets
|
|
|
Cash and cash
equivalents
|
$
143,912
|
$
184,430
|
Available-for-sale
investment and mortgage-related securities
|
560,172
|
671,358
|
Investment in stock
of Federal Home Loan Bank of Seattle
|
94,281
|
96,022
|
Loans receivable held
for investment
|
3,953,634
|
3,779,218
|
Allowance for loan losses
|
(41,004)
|
(41,985)
|
Loans receivable held
for investment, net
|
3,912,630
|
3,737,233
|
Loans held for sale,
at lower of cost or fair value
|
34,073
|
26,005
|
Other
|
241,513
|
244,435
|
Goodwill
|
82,190
|
82,190
|
Total
assets
|
$
5,068,771
|
$
5,041,673
|
|
|
|
Liabilities and
shareholder's equity
|
|
|
Deposit
liabilities–noninterest-bearing
|
$
1,168,937
|
$
1,164,308
|
Deposit
liabilities–interest-bearing
|
3,107,306
|
3,065,608
|
Other
borrowings
|
187,884
|
195,926
|
Other
|
102,516
|
117,752
|
Total
liabilities
|
4,566,643
|
4,543,594
|
|
|
|
Common
stock
|
334,937
|
333,712
|
Retained
earnings
|
189,837
|
179,763
|
Accumulated other
comprehensive loss, net of tax benefits
|
(22,646)
|
(15,396)
|
Total shareholder's
equity
|
502,128
|
498,079
|
Total liabilities and
shareholder's equity
|
$
5,068,771
|
$
5,041,673
|
|
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, 2012 and HEI's Quarterly Reports on SEC Form
10-Q for the quarters ended
March 31, 2013 and June 30, 2013 (when filed), as updated by SEC
Forms 8-K. Results of operations for interim periods are not necessarily
indicative of results to be expected for
future interim periods or the full
year.
|
|
|
|
|
Contact:
|
Shelee M.T.
Kimura
|
|
|
Manager, Investor
Relations
&
|
Telephone: (808)
543-7384
|
|
Strategic
Planning
|
E-mail:
skimura@hei.com
|
(Logo:
http://photos.prnewswire.com/prnh/20110411/LA80136LOGO)
SOURCE Hawaiian Electric Industries, Inc.