HONOLULU, July 28, 2017 /PRNewswire/ -- American
Savings Bank, F.S.B. (American), a
wholly-owned subsidiary of Hawaiian Electric Industries, Inc. (HEI)
(NYSE - HE) today reported net income of $16.7 million for the second quarter of 2017
compared to $15.8 million in the
first, or linked, quarter of 2017 and $13.3
million in the second quarter of 2016.
"We continued our strong performance into the second quarter,
delivering well for our customers, the bank, and for shareholders.
Our results through the second quarter demonstrate broad
improvement in our profitability with better yields, efficiency,
asset quality, and bottom line return on equity compared to last
year," said Richard Wacker,
president and chief executive officer of American. "Our balance
sheet continued to grow nicely as customers entrusted us with more
of their deposits. Total lending was flat as our work to improve
commercial loan asset quality offset growth we saw in consumer,
home equity, residential, and commercial real estate
lending."
Second quarter of 2017 net income of $16.7 million was $3.4 million higher than the second quarter
of 2016 and $0.9 million higher than
the first (linked) quarter of 2017.
Compared to the second quarter of 2016, the $3.4 million increase was primarily driven by
$3 million (after-tax) higher net
interest income mainly due to growth in the commercial real estate
and consumer loan portfolios as well as the deployment of deposit
growth into our investment portfolio. The $1 million (after-tax) lower provision for loan
losses was offset by $1 million
(after-tax) higher non-interest expense.
Compared to the linked first quarter of 2017, the $0.9 million increase was primarily driven by the
following on an after-tax basis:
- $1 million higher net interest
income driven mainly by higher loan portfolio yields and growth in
our consumer loan and investment portfolios;
- $1 million lower provision for
loan losses; and
- $1 million higher noninterest
income mainly due to improved performance from bank-owned life
insurance investments.
These increases were offset by $2
million (after-tax) higher noninterest expense primarily due
to higher compensation and benefits.
Net interest income (pretax) was $55.9
million in the second quarter of 2017, compared to
$54.8 million in the linked quarter
and $51.0 million in the prior year
quarter. Net interest margin was 3.68% in the second quarter
of 2017, unchanged from the linked quarter and 3.58% in the second
quarter of 2016. The higher net interest margin compared to
the prior year quarter was primarily attributable to higher
investment portfolio yields and growth of our higher yielding
consumer and commercial real estate portfolios.
The provision for loan losses (pretax) was $2.8 million in the second quarter of 2017
compared to $3.9 million in the
linked quarter and $4.8 million in
the second quarter of 2016. The decrease from the linked
quarter reflected improved credit quality. The second quarter
of 2017 net charge-off ratio was 0.21%, compared to 0.29% in the
linked quarter and 0.15% in the prior year quarter.
Nonaccrual loans as a percent of total loans receivable held for
investment was 0.44% compared to 0.41% in the linked quarter and
1.02% in the prior year quarter.
Noninterest income (pretax) was $16.2
million in the second quarter of 2017 compared to
$15.1 million in the linked
quarter and $16.6 million in the
prior year quarter. Noninterest expense (pretax) was
$44.6 million compared to
$41.9 million in the linked
quarter and $42.6 million in the
second quarter of 2016.
Total loans were $4.7 billion at
June 30, 2017 and included growth in
the consumer, home equity line of credit, and residential loan
portfolios during the second quarter of 2017.
|
________________________
|
|
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.
|
Total deposits were $5.7 billion
at June 30, 2017, an increase of
$175 million or 6.3% annualized from
December 31, 2016. Low-cost
core deposits increased $143 million or 5.8% annualized from
December 31, 2016. The average
cost of funds was 0.21% for the second quarter of 2017 compared to
0.20% for the first quarter of 2017 and 0.23% for the second
quarter of 2016.
American's return on average equity was 11.3% for the second
quarter of 2017 compared to 10.8% in the linked quarter and 9.2% in
the second quarter of 2016. Return on average assets was
1.02% for the second quarter of 2017, compared to 0.98% in the
linked quarter and 0.86% in the same quarter last year.
American's solid results enabled it to pay dividends of
$9.4 million to HEI while maintaining
healthy capital levels, including a leverage ratio of 8.5% and a
total capital ratio of 13.7% at June 30, 2017.
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO
DISCUSS EARNINGS AND 2017 EPS GUIDANCE
Concurrent with
American's regulatory filing 30 days after the end of the quarter,
American announced its second quarter 2017 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 2017.
HEI plans to announce its second quarter 2017 consolidated
financial results on Thursday, August 3,
2017 and will conduct a webcast and conference call to
discuss its consolidated earnings, including American's earnings,
and 2017 EPS guidance on Thursday, August 3, 2017, at
9:00 a.m. Hawaii time (3:00 p.m. Eastern
time).
Interested parties within the United
States may listen to the conference by calling (844)
834-0652 and international parties may listen to the conference by
calling (412) 317-5198. Parties may also listen to the
conference 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 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 August 3,
2017 webcast will be available on HEI's 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 17, 2017 by dialing
(877) 344-7529 or (412) 317-0088 and entering passcode:
10108918.
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.
|
American Savings
Bank, F.S.B.
|
|
STATEMENTS OF INCOME
DATA
|
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Six months ended June
30
|
|
(in thousands)
|
|
June 30,
2017
|
|
March 31,
2017
|
|
June 30,
2016
|
|
2017
|
|
2016
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
52,317
|
|
$
|
50,742
|
|
$
|
49,690
|
|
$
|
103,059
|
|
$
|
98,127
|
|
Interest and
dividends on investment securities
|
|
6,763
|
|
6,980
|
|
4,443
|
|
13,743
|
|
9,460
|
|
Total interest and
dividend income
|
|
59,080
|
|
57,722
|
|
54,133
|
|
116,802
|
|
107,587
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
2,311
|
|
2,103
|
|
1,691
|
|
4,414
|
|
3,283
|
|
Interest on other
borrowings
|
|
824
|
|
816
|
|
1,467
|
|
1,640
|
|
2,952
|
|
Total interest
expense
|
|
3,135
|
|
2,919
|
|
3,158
|
|
6,054
|
|
6,235
|
|
Net interest
income
|
|
55,945
|
|
54,803
|
|
50,975
|
|
110,748
|
|
101,352
|
|
Provision for loan
losses
|
|
2,834
|
|
3,907
|
|
4,753
|
|
6,741
|
|
9,519
|
|
Net interest
income after provision for loan losses
|
|
53,111
|
|
50,896
|
|
46,222
|
|
104,007
|
|
91,833
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,810
|
|
5,610
|
|
5,701
|
|
11,420
|
|
11,200
|
|
Fee income on deposit
liabilities
|
|
5,565
|
|
5,428
|
|
5,262
|
|
10,993
|
|
10,418
|
|
Fee income on other
financial products
|
|
1,971
|
|
1,866
|
|
2,207
|
|
3,837
|
|
4,412
|
|
Bank-owned life
insurance
|
|
1,925
|
|
983
|
|
1,006
|
|
2,908
|
|
2,004
|
|
Mortgage banking
income
|
|
587
|
|
789
|
|
1,554
|
|
1,376
|
|
2,749
|
|
Gains on sale of
investment securities, net
|
|
—
|
|
—
|
|
598
|
|
—
|
|
598
|
|
Other income,
net
|
|
391
|
|
458
|
|
288
|
|
849
|
|
621
|
|
Total noninterest
income
|
|
16,249
|
|
15,134
|
|
16,616
|
|
31,383
|
|
32,002
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
24,742
|
|
23,237
|
|
21,919
|
|
47,979
|
|
44,353
|
|
Occupancy
|
|
4,185
|
|
4,154
|
|
4,115
|
|
8,339
|
|
8,253
|
|
Data
processing
|
|
3,207
|
|
3,280
|
|
3,277
|
|
6,487
|
|
6,449
|
|
Services
|
|
2,766
|
|
2,360
|
|
2,755
|
|
5,126
|
|
5,666
|
|
Equipment
|
|
1,771
|
|
1,748
|
|
1,771
|
|
3,519
|
|
3,434
|
|
Office supplies,
printing and postage
|
|
1,527
|
|
1,535
|
|
1,583
|
|
3,062
|
|
2,948
|
|
Marketing
|
|
839
|
|
517
|
|
899
|
|
1,356
|
|
1,760
|
|
FDIC
insurance
|
|
822
|
|
728
|
|
913
|
|
1,550
|
|
1,797
|
|
Other
expense
|
|
4,705
|
|
4,311
|
|
5,382
|
|
9,016
|
|
9,357
|
|
Total noninterest
expense
|
|
44,564
|
|
41,870
|
|
42,614
|
|
86,434
|
|
84,017
|
|
Income before
income taxes
|
|
24,796
|
|
24,160
|
|
20,224
|
|
48,956
|
|
39,818
|
|
Income
taxes
|
|
8,063
|
|
8,347
|
|
6,939
|
|
16,410
|
|
13,860
|
|
Net
income
|
|
$
|
16,733
|
|
$
|
15,813
|
|
$
|
13,285
|
|
$
|
32,546
|
|
$
|
25,958
|
|
Comprehensive
income
|
|
$
|
18,956
|
|
$
|
16,648
|
|
$
|
16,051
|
|
$
|
35,604
|
|
$
|
36,361
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.02
|
|
0.98
|
|
0.86
|
|
1.00
|
|
0.85
|
|
Return on average
equity
|
|
11.25
|
|
10.82
|
|
9.22
|
|
11.04
|
|
9.06
|
|
Return on average
tangible common equity
|
|
13.06
|
|
12.58
|
|
10.75
|
|
12.82
|
|
10.57
|
|
Net interest
margin
|
|
3.68
|
|
3.68
|
|
3.58
|
|
3.68
|
|
3.60
|
|
Efficiency
ratio
|
|
61.73
|
|
59.87
|
|
63.05
|
|
60.81
|
|
63.00
|
|
Net charge-offs to
average loans outstanding
|
|
0.21
|
|
0.29
|
|
0.15
|
|
0.25
|
|
0.18
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.44
|
|
0.41
|
|
1.02
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.19
|
|
1.19
|
|
1.16
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
7.88
|
|
7.78
|
|
8.15
|
|
|
|
|
Tier-1 leverage
ratio
|
|
8.5
|
|
8.5
|
|
8.7
|
|
|
|
|
Total capital
ratio
|
|
13.7
|
|
13.6
|
|
13.2
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
9.4
|
|
$
|
9.4
|
|
$
|
9.0
|
|
$
|
18.8
|
|
$
|
18.0
|
|
|
This information
should be read in conjunction with the condensed 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,
2017
|
December 31,
2016
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
128,609
|
|
$
|
137,083
|
|
Interest-bearing
deposits
|
|
37,049
|
|
52,128
|
|
Restricted
cash
|
|
—
|
|
1,764
|
|
Available-for-sale
investment securities, at fair value
|
|
1,302,886
|
|
1,105,182
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
11,706
|
|
11,218
|
|
Loans receivable held
for investment
|
|
4,744,634
|
|
4,738,693
|
|
Allowance for loan
losses
|
|
(56,356)
|
|
(55,533)
|
|
Net
loans
|
|
4,688,278
|
|
4,683,160
|
|
Loans held for sale,
at lower of cost or fair value
|
|
5,261
|
|
18,817
|
|
Other
|
|
354,898
|
|
329,815
|
|
Goodwill
|
|
82,190
|
|
82,190
|
|
Total
assets
|
|
$
|
6,610,877
|
|
$
|
6,421,357
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,694,150
|
|
$
|
1,639,051
|
|
Deposit
liabilities–interest-bearing
|
|
4,030,236
|
|
3,909,878
|
|
Other
borrowings
|
|
188,130
|
|
192,618
|
|
Other
|
|
101,974
|
|
101,635
|
|
Total
liabilities
|
|
6,014,490
|
|
5,843,182
|
|
Common
stock
|
|
1
|
|
1
|
|
Additional paid in
capital
|
|
344,062
|
|
342,704
|
|
Retained
earnings
|
|
271,739
|
|
257,943
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
|
Net unrealized losses on
securities
|
$
|
(5,687)
|
|
$
|
(7,931)
|
|
|
Retirement benefit
plans
|
(13,728)
|
(19,415)
|
(14,542)
|
(22,473)
|
|
Total
shareholder's equity
|
|
596,387
|
|
578,175
|
|
Total
liabilities and shareholder's equity
|
|
$
|
6,610,877
|
|
$
|
6,421,357
|
|
|
This information
should be read in conjunction with the condensed consolidated
financial statements and the notes thereto in HEI filings with the
SEC.
|
|
Contact:
|
Clifford H.
Chen
|
Telephone: (808)
543-7300
|
|
Treasurer, Manager
Investor Relations & Strategic Planning
|
E-mail:
ir@hei.com
|
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SOURCE Hawaiian Electric Industries, Inc.