HONOLULU, July 30, 2015 /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 2015 of $12.9
million, compared to $13.5
million in the first (or linked) quarter of 2015 and
$11.5 million in the second
quarter of 2014.
"We delivered solid results with good core deposit growth, sound
credit quality and a continuing strong mortgage banking environment
this quarter," said Rich Wacker,
president and chief executive officer of American. "With the
HEI shareholders approving the merger with NextEra Energy on
June 10th, we are a step
closer to the spin-off of ASB Hawaii at the time of that
merger."
Second quarter 2015 net income was $0.6
million lower than the linked quarter primarily driven by
(on an after-tax basis):
- $1 million higher net interest
income primarily driven by higher interest-earning assets and fees
related to the early payoff of commercial loans, offset by
- $1 million higher provision for
loan losses; and
- $1 million higher noninterest
expense.
Compared to the second quarter of 2014, net income was higher by
$1.3 million primarily driven by (on
an after-tax basis):
- $1 million higher net interest
income in the second quarter of 2015 primarily due to higher
average loan balances; and
- $2 million higher noninterest
income primarily from mortgage banking and fees on deposit products
in the second quarter of 2015, partially offset by
- $1 million higher noninterest
expense in the second quarter of 2015 due primarily 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 American.
Net interest income (pretax) was $46.6
million in the second quarter of 2015 compared to
$45.5 million in the linked
quarter of 2015 and $44.1 million in
the prior year quarter. Net interest margin was 3.52% in both
the second and linked quarter of 2015 and 3.55% in the second
quarter of 2014. Compared to the prior year quarter, the
decline in net interest margin was largely attributable to lower
yields on interest earning assets as loans continued to re-price
down.
Provision for loan losses (pretax) was $1.8 million in the second quarter of 2015,
higher than both the $0.6 million in
the linked quarter of 2015 and the $1.0 million in the second quarter of
2014. The higher provision in the second quarter of 2015 was
mainly due to the downgrade of one large commercial lending
relationship and higher charge-offs. The second quarter 2015
net charge-off ratio was 0.11%, compared to 0.04% in the linked
quarter and a net recovery of 0.04% in the prior year quarter.
Credit quality continues to be strong, reflecting prudent credit
risk management and a strong Hawaii economy. In the second quarter of
2015, credit trends remained favorable, with decreases in overall
delinquency and non-performing assets, both on a linked quarter and
year over year basis. Related to lending growth, provision
for an increase in unfunded commercial real-estate commitments was
recorded as noninterest expense.
Noninterest income (pretax) was $16.4
million in the second quarter of 2015, compared to
$16.1 million in the linked
quarter and $13.8 million in the
second quarter of 2014 due to higher mortgage banking income and
deposit related fee initiatives.
Noninterest expense (pretax) was $41.5
million in the second quarter of 2015, compared to
$40.4 million in the linked
quarter and $39.0 million in the
second quarter of 2014. Noninterest expense was $1.1 million higher compared to the linked
quarter primarily due to higher medical benefits expense, the
timing of certain professional services and the provision for
higher unfunded commercial real-estate commitments mentioned above.
Total loans were $4.5 billion at
June 30, 2015, an increase of
$10 million and $22 million in the second quarter and
year-to-date 2015, respectively. Although year-to-date
annualized loan growth was 1.01%, American expects to meet its
target of mid-single digit loan growth for the full year.
Total deposits were $4.8 billion
at June 30, 2015, an increase of
$52 million and $180 million in the second quarter and
year-to-date 2015, respectively, primarily driven by the 8.2%
year-to-date annualized increase in low-cost core deposits.
Average cost of funds remained low at 0.22% for the second quarter
of 2015, consistent with both the linked quarter and the prior year
quarter.
American's return on average equity was 9.4% for the second
quarter of 2015, compared to 10.0% in the linked quarter and 8.7%
in the second quarter of last year. Return on average assets
was 0.89% for the second quarter of 2015, compared to 0.96% for the
linked quarter and 0.86% in the same quarter last year.
American's solid results enabled it to pay dividends of
$7.5 million to HEI in the quarter
while maintaining healthy capital levels – leverage ratio of 8.8%
and total capital ratio of 13.5% at June 30,
2015.
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO
DISCUSS EARNINGS AND 2015 EPS GUIDANCE
Concurrent with American's regulatory filing 30 days after the
end of the quarter, American announced its second 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 second quarter of
2015.
HEI plans to announce its second quarter 2015 consolidated
financial results on Monday, August 10, 2015, and will
conduct a webcast and conference call to discuss its consolidated
earnings, including American's earnings, and 2015 EPS guidance on
Monday, August 10, 2015, at
7:00 a.m. Hawaii time (1:00 p.m.
Eastern time). Interested parties may listen to the
conference call by dialing (888) 311-8190 and entering passcode:
74311446. International parties may listen to the conference
call by calling the following toll free number, (330) 863-3378 and
entering passcode: 74311446. The event can also be
accessed through 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 which
will be included 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 webcast will be available at the same
website beginning about two hours after the event. Audio
replays of the teleconference will also be available approximately
two hours after the event through August 24,
2015, by dialing (855) 859-2056 or (404) 537-3406 and
entering passcode: 74311446.
HEI supplies power to approximately 450,000 customers or 95% of
Hawaii's population through its
electric utilities, Hawaiian Electric Company, Inc., 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 Annual Report on Form 10-K for the year ended
December 31, 2014, HEI's Quarterly
Report on Form 10-Q for the quarter ended March 31, 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
|
|
Six months ended June
30
|
|
(in thousands)
|
|
June 30,
2015
|
|
March 31,
2015
|
|
June 30,
2014
|
|
2015
|
|
2014
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
46,035
|
|
|
$
|
45,198
|
|
|
$
|
43,851
|
|
|
$
|
91,233
|
|
|
$
|
87,533
|
|
|
Interest and
dividends on investment securities
|
|
3,306
|
|
|
3,051
|
|
|
2,950
|
|
|
6,357
|
|
|
5,985
|
|
|
Total interest and
dividend income
|
|
49,341
|
|
|
48,249
|
|
|
46,801
|
|
|
97,590
|
|
|
93,518
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,266
|
|
|
1,260
|
|
|
1,237
|
|
|
2,526
|
|
|
2,462
|
|
|
Interest on other
borrowings
|
|
1,487
|
|
|
1,466
|
|
|
1,420
|
|
|
2,953
|
|
|
2,825
|
|
|
Total interest
expense
|
|
2,753
|
|
|
2,726
|
|
|
2,657
|
|
|
5,479
|
|
|
5,287
|
|
|
Net interest
income
|
|
46,588
|
|
|
45,523
|
|
|
44,144
|
|
|
92,111
|
|
|
88,231
|
|
|
Provision for loan
losses
|
|
1,825
|
|
|
614
|
|
|
1,021
|
|
|
2,439
|
|
|
2,016
|
|
|
Net interest
income after provision for loan losses
|
|
44,763
|
|
|
44,909
|
|
|
43,123
|
|
|
89,672
|
|
|
86,215
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,550
|
|
|
5,355
|
|
|
5,217
|
|
|
10,905
|
|
|
10,345
|
|
|
Fee income on deposit
liabilities
|
|
5,424
|
|
|
5,315
|
|
|
4,645
|
|
|
10,739
|
|
|
9,066
|
|
|
Fee income on other
financial products
|
|
2,103
|
|
|
1,889
|
|
|
2,064
|
|
|
3,992
|
|
|
4,354
|
|
|
Bank-owned life
insurance
|
|
1,058
|
|
|
983
|
|
|
982
|
|
|
2,041
|
|
|
1,945
|
|
|
Mortgage banking
income
|
|
2,068
|
|
|
1,822
|
|
|
246
|
|
|
3,890
|
|
|
874
|
|
|
Gains on sale of
investment securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,847
|
|
|
Other income,
net
|
|
239
|
|
|
735
|
|
|
661
|
|
|
974
|
|
|
1,286
|
|
|
Total noninterest
income
|
|
16,442
|
|
|
16,099
|
|
|
13,815
|
|
|
32,541
|
|
|
30,717
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
22,319
|
|
|
21,766
|
|
|
19,872
|
|
|
44,085
|
|
|
40,158
|
|
|
Occupancy
|
|
4,009
|
|
|
4,113
|
|
|
4,489
|
|
|
8,122
|
|
|
8,442
|
|
|
Data
processing
|
|
2,953
|
|
|
3,116
|
|
|
2,971
|
|
|
6,069
|
|
|
6,031
|
|
|
Services
|
|
2,833
|
|
|
2,341
|
|
|
2,855
|
|
|
5,174
|
|
|
5,128
|
|
|
Equipment
|
|
1,690
|
|
|
1,701
|
|
|
1,609
|
|
|
3,391
|
|
|
3,254
|
|
|
Office supplies,
printing and postage
|
|
1,303
|
|
|
1,483
|
|
|
1,456
|
|
|
2,786
|
|
|
3,072
|
|
|
Marketing
|
|
844
|
|
|
841
|
|
|
1,031
|
|
|
1,685
|
|
|
1,742
|
|
|
FDIC
insurance
|
|
773
|
|
|
811
|
|
|
805
|
|
|
1,584
|
|
|
1,601
|
|
|
Other
expense
|
|
4,755
|
|
|
4,205
|
|
|
3,894
|
|
|
8,960
|
|
|
7,016
|
|
|
Total noninterest
expense
|
|
41,479
|
|
|
40,377
|
|
|
38,982
|
|
|
81,856
|
|
|
76,444
|
|
|
Income before
income taxes
|
|
19,726
|
|
|
20,631
|
|
|
17,956
|
|
|
40,357
|
|
|
40,488
|
|
|
Income
taxes
|
|
6,875
|
|
|
7,156
|
|
|
6,420
|
|
|
14,031
|
|
|
14,553
|
|
|
Net
income
|
|
$
|
12,851
|
|
|
$
|
13,475
|
|
|
$
|
11,536
|
|
|
$
|
26,326
|
|
|
$
|
25,935
|
|
|
Comprehensive
income
|
|
$
|
9,544
|
|
|
$
|
17,318
|
|
|
$
|
14,294
|
|
|
$
|
26,862
|
|
|
$
|
29,717
|
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.89
|
|
|
0.96
|
|
|
0.86
|
|
|
0.93
|
|
|
0.97
|
|
|
Return on average
equity
|
|
9.38
|
|
|
9.96
|
|
|
8.69
|
|
|
9.67
|
|
|
9.81
|
|
|
Return on average
tangible common equity
|
|
11.04
|
|
|
11.74
|
|
|
10.28
|
|
|
11.39
|
|
|
11.61
|
|
|
Net interest
margin
|
|
3.52
|
|
|
3.52
|
|
|
3.55
|
|
|
3.52
|
|
|
3.59
|
|
|
Net charge-offs to
average loans outstanding
|
|
0.11
|
|
|
0.04
|
|
|
(0.04)
|
|
|
0.08
|
|
|
(0.01)
|
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets
to loans outstanding and real estate owned *
|
|
0.70
|
|
|
0.80
|
|
|
1.05
|
|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.04
|
|
|
1.03
|
|
|
0.99
|
|
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
8.16
|
|
|
8.18
|
|
|
8.45
|
|
|
|
|
|
|
Tier-1 leverage ratio
*
|
|
8.8
|
|
|
8.9
|
|
|
9.0
|
|
|
|
|
|
|
Total capital ratio
*
|
|
13.5
|
|
|
13.2
|
|
|
12.6
|
|
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
7.5
|
|
|
$
|
7.5
|
|
|
$
|
9.8
|
|
|
|
|
|
|
|
|
*
|
Regulatory basis.
Capital ratios as of June 30, 2015 and March 31, 2015 calculated
under Basel III rules, which became effective January 1,
2015.
|
|
|
|
Prior period
financial statements reflect the retrospective application of
Accounting Standards Update (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, 2014, ASB Hawaii,
Inc.'s Form 10 filed with the SEC on March 30, 2015 and HEI's
Quarterly Reports on SEC Form 10-Q for the quarters ended March 31,
2015 and June 30, 2015 (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,
2015
|
December 31,
2014
|
|
(in
thousands)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
106,914
|
|
|
$
|
107,233
|
|
|
Interest-bearing
deposits
|
|
162,088
|
|
|
54,230
|
|
|
Available-for-sale
investment securities, at fair value
|
|
693,520
|
|
|
550,394
|
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
10,678
|
|
|
69,302
|
|
|
Loans receivable held
for investment
|
|
4,457,182
|
|
|
4,434,651
|
|
|
Allowance for loan
losses
|
|
(46,365)
|
|
|
(45,618)
|
|
|
Net
loans
|
|
4,410,817
|
|
|
4,389,033
|
|
|
Loans held for sale,
at lower of cost or fair value
|
|
5,581
|
|
|
8,424
|
|
|
Other
|
|
305,310
|
|
|
305,416
|
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
|
Total
assets
|
|
$
|
5,777,098
|
|
|
$
|
5,566,222
|
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,455,721
|
|
|
$
|
1,342,794
|
|
|
Deposit
liabilities–interest-bearing
|
|
3,347,550
|
|
|
3,280,621
|
|
|
Other
borrowings
|
|
314,157
|
|
|
290,656
|
|
|
Other
|
|
113,015
|
|
|
118,363
|
|
|
Total
liabilities
|
|
5,230,443
|
|
|
5,032,434
|
|
|
Common
stock
|
|
1
|
|
|
1
|
|
|
Additional paid in
capital
|
|
339,416
|
|
|
338,411
|
|
|
Retained
earnings
|
|
223,260
|
|
|
211,934
|
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
|
Net unrealized gains on
securities
|
$
|
219
|
|
|
|
|
$
|
462
|
|
|
|
|
|
Retirement benefit
plans
|
(16,241)
|
|
(16,022)
|
|
(17,020)
|
|
(16,558)
|
|
|
Total
shareholder's equity
|
|
546,655
|
|
|
533,788
|
|
|
Total
liabilities and shareholder's equity
|
|
$
|
5,777,098
|
|
|
$
|
5,566,222
|
|
|
|
Prior period
financial statements reflect the retrospective application of
Accounting Standards Update (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.
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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, 2014, ASB Hawaii, Inc.'s Form
10 filed with the SEC on March 30, 2015 and HEI's Quarterly Reports
on SEC Form 10-Q for the quarters ended March 31, 2015 and June 30,
2015 (when filed), as updated by SEC Forms 8-K.
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Contact:
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Clifford H.
Chen
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Manager, Investor
Relations &
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Telephone: (808)
543-7300
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Strategic
Planning
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E-mail:
ir@hei.com
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SOURCE Hawaiian Electric Industries, Inc.