HONOLULU, July 29, 2016 /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 of $13.3 million for the second quarter of 2016
compared to $12.7 million in the
first (or linked) quarter of 2016 and $12.9 million in the second quarter of
2015.
"American delivered strong deposit and loan growth this quarter,
driving higher net interest income and bottom line improvement,"
said Rich Wacker, president and
chief executive officer of American. "We also launched our
new eBanking platform, providing improved account access and
eServices for our consumer and business customers from their
desktop, tablet or mobile devices, as well as lower ongoing costs
for the bank."
Second quarter 2016 net income was $0.6
million higher than the linked quarter primarily driven by
$1 million (after-tax) higher
revenues due to higher noninterest income which included gains on
sale of securities and higher mortgage banking income and higher
net interest income primarily due to growth in the commercial real
estate and consumer loan portfolios. Higher revenues were
partially offset by $1 million
(after-tax) higher noninterest expense due primarily to costs
related to the replacement and upgrade of the electronic banking
platform.
Compared to the second quarter of 2015, net income improved by
$0.4 million primarily driven by
$3 million (after-tax) higher net interest income due to
growth in the commercial real estate, consumer loan and investment
portfolios and higher yields on interest-earning assets. This
was offset by the following on an after-tax basis:
- $2 million higher provision for
loan losses mainly driven by commercial real estate and consumer
loan growth and downgrades of specific commercial credits in the
second quarter of 2016; and
- $1 million higher noninterest
expense primarily due to costs related to the replacement and
upgrade of the electronic banking platform.
|
|
|
|
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 $51.0
million in the second quarter of 2016 compared to
$50.4 million in the linked quarter
of 2016 and $46.6 million in the
prior year quarter. The increase compared to the prior year
quarter was primarily attributable to growth in the commercial real
estate loan, the consumer loan and the investment securities
portfolios and to higher yields on interest-earning assets.
Net interest margin was 3.58% compared to 3.62% in the linked
quarter and 3.52% in the second quarter of 2015.
Provision for loan losses (pretax) was $4.8 million in the second quarter of 2016, flat
compared to the $4.8 million in
the linked quarter of 2016 and higher than the $1.8 million in the second quarter of
2015. The increase in provision compared to the prior year
quarter was mainly due to commercial real estate and consumer loan
growth and specific downgrades to commercial credits in the second
quarter of 2016. The net charge-off ratio was 0.15% compared to
0.21% in the linked quarter and 0.11% in the prior year
quarter. Credit quality remains within acceptable limits and
the increasing loan loss reserves reflect growth in commercial real
estate and consumer loans which require higher reserve levels.
Noninterest income (pretax) was $16.6
million in the second quarter of 2016, compared to
$15.4 million in the linked
quarter and $16.4 million in the
second quarter of 2015. The $1.2
million higher noninterest income compared to the linked
quarter was primarily due to the gain on sale of investment
securities and slightly higher mortgage banking income in the
second quarter of 2016.
Noninterest expense (pretax) was $42.6
million in the second quarter of 2016, compared to
$41.4 million in the linked
quarter and $41.5 million in the
second quarter of 2015. The higher noninterest expense in the
second quarter of 2016 was impacted by $1.2 million due to costs related to the
replacement and upgrade of the electronic banking platform.
Total loans were $4.8 billion at
June 30, 2016, an increase of
$112 million and $138 million in the second quarter and
year-to-date 2016, respectively. Year-to-date annualized loan
growth was 6.0%, in line with American's target of mid-single digit
loan growth for the full year.
Total deposits were $5.2 billion
at June 30, 2016, an increase of
$92 million and $207 million in the second quarter and
year-to-date 2016, respectively. Year-to-date annualized
deposit growth of 8.2% was primarily driven by the $126 million (5.6% year-to-date annualized)
increase in low-cost core deposits. Average cost of
funds remained low at 0.23% for the second quarter of 2016,
unchanged from the linked quarter and 1 basis point higher than the
prior year quarter.
American's return on average equity was 9.2% for the second
quarter of 2016, compared to 8.9% in the linked quarter and 9.4% in
the second quarter of 2015. Return on average assets was
0.86% for the second quarter of 2016, compared to 0.84% in the
linked quarter and 0.89% in the same quarter last year.
American's solid results enabled it to pay dividends of
$9.0 million to HEI in the quarter
while maintaining healthy capital levels – leverage ratio of 8.7%
and total capital ratio of 13.2% at June 30,
2016.
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 second quarter 2016
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
2016.
HEI plans to announce its second quarter and year-to-date 2016
consolidated financial results on Thursday, August 4, 2016 and
will conduct a webcast and conference call to discuss its
consolidated earnings, including American's earnings, and 2016 EPS
guidance on Thursday, August 4, 2016,
at 11:00 a.m. 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: 16065228. International
parties may listen to the conference by calling (330) 863-3378 and
entering passcode: 16065228 or by accessing the webcast on HEI's
website at www.hei.com under the heading "Investor
Relations." HEI and Hawaiian Electric Company 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
Company's and American's press releases, HEI's and Hawaiian
Electric Company'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 Company'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 Company'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 conference call will also be available approximately two hours
after the event through August 18,
2016, by dialing (855) 859-2056 or (404) 537-3406 and
entering passcode: 16065228.
HEI supplies power to approximately 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 "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 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, 2015, HEI's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2016 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
Company, 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,
2016
|
|
March 31,
2016
|
|
June 30,
2015
|
|
2016
|
|
2015
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
49,690
|
|
|
$
|
48,437
|
|
|
$
|
46,035
|
|
|
$
|
98,127
|
|
|
$
|
91,233
|
|
|
Interest and
dividends on investment securities
|
|
4,443
|
|
|
5,017
|
|
|
3,306
|
|
|
9,460
|
|
|
6,357
|
|
|
Total interest and
dividend income
|
|
54,133
|
|
|
53,454
|
|
|
49,341
|
|
|
107,587
|
|
|
97,590
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,691
|
|
|
1,592
|
|
|
1,266
|
|
|
3,283
|
|
|
2,526
|
|
|
Interest on other
borrowings
|
|
1,467
|
|
|
1,485
|
|
|
1,487
|
|
|
2,952
|
|
|
2,953
|
|
|
Total interest
expense
|
|
3,158
|
|
|
3,077
|
|
|
2,753
|
|
|
6,235
|
|
|
5,479
|
|
|
Net interest
income
|
|
50,975
|
|
|
50,377
|
|
|
46,588
|
|
|
101,352
|
|
|
92,111
|
|
|
Provision for loan
losses
|
|
4,753
|
|
|
4,766
|
|
|
1,825
|
|
|
9,519
|
|
|
2,439
|
|
|
Net interest
income after provision for loan losses
|
|
46,222
|
|
|
45,611
|
|
|
44,763
|
|
|
91,833
|
|
|
89,672
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,701
|
|
|
5,499
|
|
|
5,550
|
|
|
11,200
|
|
|
10,905
|
|
|
Fee income on deposit
liabilities
|
|
5,262
|
|
|
5,156
|
|
|
5,424
|
|
|
10,418
|
|
|
10,739
|
|
|
Fee income on other
financial products
|
|
2,207
|
|
|
2,205
|
|
|
2,103
|
|
|
4,412
|
|
|
3,992
|
|
|
Bank-owned life
insurance
|
|
1,006
|
|
|
998
|
|
|
1,058
|
|
|
2,004
|
|
|
2,041
|
|
|
Mortgage banking
income
|
|
1,554
|
|
|
1,195
|
|
|
2,068
|
|
|
2,749
|
|
|
3,890
|
|
|
Gains on sale of
investment securities, net
|
|
598
|
|
|
—
|
|
|
—
|
|
|
598
|
|
|
—
|
|
|
Other income,
net
|
|
288
|
|
|
333
|
|
|
239
|
|
|
621
|
|
|
974
|
|
|
Total noninterest
income
|
|
16,616
|
|
|
15,386
|
|
|
16,442
|
|
|
32,002
|
|
|
32,541
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
21,919
|
|
|
22,434
|
|
|
22,319
|
|
|
44,353
|
|
|
44,085
|
|
|
Occupancy
|
|
4,115
|
|
|
4,138
|
|
|
4,009
|
|
|
8,253
|
|
|
8,122
|
|
|
Data
processing
|
|
3,277
|
|
|
3,172
|
|
|
2,953
|
|
|
6,449
|
|
|
6,069
|
|
|
Services
|
|
2,755
|
|
|
2,911
|
|
|
2,833
|
|
|
5,666
|
|
|
5,174
|
|
|
Equipment
|
|
1,771
|
|
|
1,663
|
|
|
1,690
|
|
|
3,434
|
|
|
3,391
|
|
|
Office supplies,
printing and postage
|
|
1,583
|
|
|
1,365
|
|
|
1,303
|
|
|
2,948
|
|
|
2,786
|
|
|
Marketing
|
|
899
|
|
|
861
|
|
|
844
|
|
|
1,760
|
|
|
1,685
|
|
|
FDIC
insurance
|
|
913
|
|
|
884
|
|
|
773
|
|
|
1,797
|
|
|
1,584
|
|
|
Other
expense
|
|
5,382
|
|
|
3,975
|
|
|
4,755
|
|
|
9,357
|
|
|
8,960
|
|
|
Total noninterest
expense
|
|
42,614
|
|
|
41,403
|
|
|
41,479
|
|
|
84,017
|
|
|
81,856
|
|
|
Income before
income taxes
|
|
20,224
|
|
|
19,594
|
|
|
19,726
|
|
|
39,818
|
|
|
40,357
|
|
|
Income
taxes
|
|
6,939
|
|
|
6,921
|
|
|
6,875
|
|
|
13,860
|
|
|
14,031
|
|
|
Net
income
|
|
$
|
13,285
|
|
|
$
|
12,673
|
|
|
$
|
12,851
|
|
|
$
|
25,958
|
|
|
$
|
26,326
|
|
|
Comprehensive
income
|
|
$
|
16,051
|
|
|
$
|
20,310
|
|
|
$
|
9,544
|
|
|
$
|
36,361
|
|
|
$
|
26,862
|
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.86
|
|
|
0.84
|
|
|
0.89
|
|
|
0.85
|
|
|
0.93
|
|
|
Return on average
equity
|
|
9.22
|
|
|
8.89
|
|
|
9.38
|
|
|
9.06
|
|
|
9.67
|
|
|
Return on average
tangible common equity
|
|
10.75
|
|
|
10.39
|
|
|
11.04
|
|
|
10.57
|
|
|
11.39
|
|
|
Net interest
margin
|
|
3.58
|
|
|
3.62
|
|
|
3.52
|
|
|
3.60
|
|
|
3.52
|
|
|
Efficiency
ratio
|
|
63.05
|
|
|
62.96
|
|
|
65.81
|
|
|
63.00
|
|
|
65.67
|
|
|
Net charge-offs to
average loans outstanding
|
|
0.15
|
|
|
0.21
|
|
|
0.11
|
|
|
0.18
|
|
|
0.08
|
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets
to loans outstanding and real estate owned
|
|
1.02
|
|
|
1.03
|
|
|
0.70
|
|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.16
|
|
|
1.13
|
|
|
1.04
|
|
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
8.15
|
|
|
8.08
|
|
|
8.16
|
|
|
|
|
|
|
Tier-1 leverage
ratio
|
|
8.7
|
|
|
8.7
|
|
|
8.8
|
|
|
|
|
|
|
Total capital
ratio
|
|
13.2
|
|
|
13.2
|
|
|
13.5
|
|
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
9.0
|
|
|
$
|
9.0
|
|
|
$
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
111,738
|
|
|
$
|
127,201
|
|
|
Interest-bearing
deposits
|
|
62,850
|
|
|
93,680
|
|
|
Available-for-sale
investment securities, at fair value
|
|
894,021
|
|
|
820,648
|
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
11,218
|
|
|
10,678
|
|
|
Loans receivable held
for investment
|
|
4,754,954
|
|
|
4,615,819
|
|
|
Allowance for loan
losses
|
|
(55,331)
|
|
|
(50,038)
|
|
|
Net loans
|
|
4,699,623
|
|
|
4,565,781
|
|
|
Loans held for sale,
at lower of cost or fair value
|
|
6,217
|
|
|
4,631
|
|
|
Other
|
|
320,233
|
|
|
309,946
|
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
|
Total
assets
|
|
$
|
6,188,090
|
|
|
$
|
6,014,755
|
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,583,420
|
|
|
$
|
1,520,374
|
|
|
Deposit
liabilities–interest-bearing
|
|
3,648,783
|
|
|
3,504,880
|
|
|
Other
borrowings
|
|
272,887
|
|
|
328,582
|
|
|
Other
|
|
103,396
|
|
|
101,029
|
|
|
Total
liabilities
|
|
5,608,486
|
|
|
5,454,865
|
|
|
Common
stock
|
|
1
|
|
|
1
|
|
|
Additional paid in
capital
|
|
341,849
|
|
|
340,496
|
|
|
Retained
earnings
|
|
244,622
|
|
|
236,664
|
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
|
Net unrealized gains
(losses) on securities
|
$
|
8,111
|
|
|
$
|
(1,872)
|
|
|
|
Retirement benefit
plans
|
(14,979)
|
|
(6,868)
|
|
(15,399)
|
|
(17,271)
|
|
|
Total
shareholder's equity
|
|
579,604
|
|
|
559,890
|
|
|
Total liabilities
and shareholder's equity
|
|
$
|
6,188,090
|
|
|
$
|
6,014,755
|
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI filings with the
SEC.
|
|
Contact:
|
Clifford H.
Chen
|
|
|
Manager, Investor
Relations &
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Telephone: (808)
543-7300
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|
Strategic
Planning
|
E-mail:
ir@hei.com
|
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SOURCE Hawaiian Electric Industries, Inc.