HONOLULU, Oct. 30, 2014 /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
third quarter of 2014 of $13.3
million, compared to $11.7
million in the second (or linked) quarter of 2014 and
$15.3 million in the third
quarter of 2013.
"American's solid results reflect the work of our teammates
across the bank to meet the needs of our customers and deliver
profitable growth. Our loans to customers grew at an
annualized rate of 5.9%, credit quality remained strong, and we
controlled expenses. These efforts and the steady local
economy helped us offset the continued headwind of the low interest
rate environment," said Rich Wacker,
president and chief executive officer of American.
Third quarter 2014 net income was $1.6
million higher than the linked quarter primarily driven by
higher mortgage banking and fee income of $1
million (after-tax) and higher net interest income of
$1 million (after-tax).
Compared to the same quarter of 2013, net income decreased by
$2.0 million primarily driven by
(after-tax and rounded to the nearest million):
- $1 million higher provision for
loan losses
- $1 million lower fee income on
other financial products and mortgage banking income; and
- $1 million net gain on the
strategic sale of the credit card portfolio in the third quarter of
2013.
The decrease was partially offset by $1
million (after-tax) of higher net interest income in the
third quarter of 2014.
Net interest income (pretax) was $45.6
million in the third quarter of 2014, higher than the
$44.1 million in the linked
quarter and $43.9 million in the
third quarter of 2013 primarily due to higher loan balances and the
recognition of interest associated with the payoff of a
non-performing commercial loan. Net interest
margin was 3.62% compared to 3.55% in the linked quarter and 3.73%
in the third quarter of 2013. The 0.07% point improvement in
net interest margin compared to the linked quarter is primarily
attributable to the interest recovery on the nonperforming loan and
improvement in portfolio mix. Compared to the third quarter of
2013, the net interest margin decline was primarily attributable to
lower yields on interest earning assets as the loan portfolio
continued to re-price down in the low interest rate
environment.
Provision for loan losses (pretax) was $1.6 million in the third quarter of 2014,
compared to $1.0 million in the
linked quarter and $0.1 million in
the third quarter of 2013. Compared to the linked quarter,
provision expense was $0.5 million
higher, primarily attributable to a net increase in classified
loans largely driven by two commercial borrowing
relationships. In the third quarter of 2013, provision
expense was unusually low due to the release of reserves related to
the payoff of a specific commercial loan and recoveries of
previously charged-off loans. The third quarter 2014 net
charge-off ratio was 0.04% compared to a recovery of 0.04% in the
linked quarter and nil in the prior year quarter.
Noninterest income (pretax) was $15.2
million in the third quarter of 2014, compared to
$13.8 million in the linked
quarter and $18.7 million in the
third quarter of 2013. Third quarter 2014 noninterest income
was $1.4 million higher than the
linked quarter primarily due to higher mortgage banking income and
higher fee income. Third quarter 2014 noninterest income
declined by $3.5 million compared to
the third quarter of 2013 primarily driven by the 2013 gain from
the credit card sale, lower fee income on other financial products
and lower mortgage banking income due to lower refinancing
volumes.
Noninterest expense (pretax) was $39.7
million in the third quarter of 2014, slightly lower than
the $39.9 million in the linked
quarter and in line with $39.7
million in the third quarter of 2013.
Total loans grew by $48 million
and $185 million in the third quarter
and year-to-date 2014, respectively. Third quarter loan
growth was primarily driven by increases in commercial real estate,
home equity lending and residential loans. Annualized loan
growth was 5.9% year-to-date 2014.
Total deposits were $4.5 billion
at September 30, 2014, an increase of
$9 million and $161 million in the third quarter and
year-to-date 2014, respectively. Third quarter deposit growth
was primarily driven by the increase in low-cost core
deposits. Annualized deposit growth was 4.9% year-to-date
2014. Average cost of funds remained low at 0.23% for the
third quarter of 2014, one basis point higher than the linked
quarter and the prior year quarter.
As a result of the net income impacts detailed above, American's
third quarter 2014 return on average equity was 9.9%, compared to
8.8% in the linked quarter and 12.1% in the third quarter of last
year. Return on average assets was 0.98% for the third
quarter of 2014, compared to 0.87% in the linked quarter and 1.20%
in the same quarter last year.
American's year-to-date return on average equity was 9.9%,
compared to 12.0% for the same period in the prior year.
Year-to-date return on average assets was 0.98% compared to 1.19%
for the same period in the prior year.
American's continued solid results enabled it to pay dividends
of $8.75 million to HEI in the
quarter while maintaining healthy capital levels – a leverage ratio
of 9.1% and total risk-based capital ratio of 12.6% at September 30, 2014.
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.
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO
DISCUSS EARNINGS AND 2014 EPS GUIDANCE
Concurrent with
American's regulatory filing 30 days after the end of the quarter,
American announced its third quarter 2014 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 third quarter of 2014.
HEI plans to announce its third quarter 2014 consolidated
financial results on Thursday, November 6, 2014 and will
conduct a webcast and conference call to discuss its consolidated
earnings, including American's earnings, and 2014 EPS guidance on
Thursday, November 6, 2014, at
12:00 p.m. Hawaii time (5:00 p.m. Eastern
time). Interested parties may listen to the conference by
calling (800) 299-9086 and entering passcode: 92619059,
or by accessing the webcast on HEI's website at 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 online replay of the webcast will be available at the same
website beginning about two hours after the event. Audio
replays of the conference call will also be available approximately
two hours after the event through November
20, 2014, by dialing (888) 286-8010, passcode:
41279979.
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, 2013, HEI's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2014 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
|
|
Nine months ended
September30
|
(in thousands)
|
|
September 30,
2014
|
|
June 30,
2014
|
|
September 30,
2013
|
|
2014
|
|
|
2013
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
45,532
|
|
|
$
|
43,851
|
|
|
$
|
43,337
|
|
|
$
|
133,065
|
|
|
$
|
129,564
|
|
Interest and
dividends on investment and mortgage-related securities
|
|
2,773
|
|
|
2,950
|
|
|
3,025
|
|
|
8,758
|
|
|
9,723
|
|
Total interest and
dividend income
|
|
48,305
|
|
|
46,801
|
|
|
46,362
|
|
|
141,823
|
|
|
139,287
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,312
|
|
|
1,237
|
|
|
1,262
|
|
|
3,774
|
|
|
3,870
|
|
Interest on other
borrowings
|
|
1,438
|
|
|
1,420
|
|
|
1,206
|
|
|
4,263
|
|
|
3,548
|
|
Total interest
expense
|
|
2,750
|
|
|
2,657
|
|
|
2,468
|
|
|
8,037
|
|
|
7,418
|
|
Net interest
income
|
|
45,555
|
|
|
44,144
|
|
|
43,894
|
|
|
133,786
|
|
|
131,869
|
|
Provision for loan
losses
|
|
1,550
|
|
|
1,021
|
|
|
54
|
|
|
3,566
|
|
|
953
|
|
Net interest
income after provision for loan losses
|
|
44,005
|
|
|
43,123
|
|
|
43,840
|
|
|
130,220
|
|
|
130,916
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,642
|
|
|
5,217
|
|
|
5,728
|
|
|
15,987
|
|
|
21,367
|
|
Fee income on deposit
liabilities
|
|
5,109
|
|
|
4,645
|
|
|
4,819
|
|
|
14,175
|
|
|
13,566
|
|
Fee income on other
financial products
|
|
1,971
|
|
|
2,064
|
|
|
2,714
|
|
|
6,325
|
|
|
6,288
|
|
Mortgage banking
income
|
|
875
|
|
|
246
|
|
|
1,547
|
|
|
1,749
|
|
|
6,896
|
|
Gain on sale of
securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,847
|
|
|
1,226
|
|
Other income,
net
|
|
1,634
|
|
|
1,643
|
|
|
3,888
|
|
|
4,865
|
|
|
7,211
|
|
Total noninterest
income
|
|
15,231
|
|
|
13,815
|
|
|
18,696
|
|
|
45,948
|
|
|
56,554
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
19,892
|
|
|
19,872
|
|
|
20,564
|
|
|
60,050
|
|
|
60,715
|
|
Occupancy
|
|
4,517
|
|
|
4,489
|
|
|
4,208
|
|
|
12,959
|
|
|
12,550
|
|
Data
processing
|
|
2,684
|
|
|
2,971
|
|
|
2,168
|
|
|
8,715
|
|
|
7,982
|
|
Services
|
|
2,580
|
|
|
2,855
|
|
|
2,424
|
|
|
7,708
|
|
|
6,855
|
|
Equipment
|
|
1,672
|
|
|
1,609
|
|
|
1,825
|
|
|
4,926
|
|
|
5,469
|
|
Office supplies,
printing and postage
|
|
1,415
|
|
|
1,456
|
|
|
907
|
|
|
4,487
|
|
|
2,806
|
|
Marketing
|
|
948
|
|
|
1,031
|
|
|
692
|
|
|
2,690
|
|
|
2,054
|
|
Communication
|
|
412
|
|
|
448
|
|
|
479
|
|
|
1,363
|
|
|
1,374
|
|
Other
expense
|
|
5,544
|
|
|
5,159
|
|
|
6,461
|
|
|
15,026
|
|
|
18,400
|
|
Total noninterest
expense
|
|
39,664
|
|
|
39,890
|
|
|
39,728
|
|
|
117,924
|
|
|
118,205
|
|
Income before
income taxes
|
|
19,572
|
|
|
17,048
|
|
|
22,808
|
|
|
58,244
|
|
|
69,265
|
|
Income
taxes
|
|
6,312
|
|
|
5,372
|
|
|
7,532
|
|
|
18,769
|
|
|
23,915
|
|
Net
income
|
|
$
|
13,260
|
|
|
$
|
11,676
|
|
|
$
|
15,276
|
|
|
$
|
39,475
|
|
|
$
|
45,350
|
|
Comprehensive
income
|
|
$
|
11,811
|
|
|
$
|
14,434
|
|
|
$
|
14,107
|
|
|
$
|
41,808
|
|
|
$
|
36,931
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.98
|
|
|
0.87
|
|
|
1.20
|
|
|
0.98
|
|
|
1.19
|
|
Return on average
equity
|
|
9.87
|
|
|
8.78
|
|
|
12.13
|
|
|
9.89
|
|
|
11.99
|
|
Return on average
tangible common equity
|
|
11.65
|
|
|
10.39
|
|
|
14.50
|
|
|
11.70
|
|
|
14.33
|
|
Net interest
margin
|
|
3.62
|
|
|
3.55
|
|
|
3.73
|
|
|
3.60
|
|
|
3.77
|
|
Net charge-offs
(recoveries) to average loans outstanding
|
|
0.04
|
|
|
(0.04)
|
|
|
—
|
|
|
0.01
|
|
|
0.06
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets
to loans outstanding and real estate owned *
|
|
0.88
|
|
|
1.05
|
|
|
1.33
|
|
|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.00
|
|
|
0.99
|
|
|
1.01
|
|
|
|
|
|
|
|
Tier-1 leverage ratio
*
|
|
9.1
|
|
|
9.0
|
|
|
9.3
|
|
|
|
|
|
|
|
Total risk-based
capital ratio *
|
|
12.6
|
|
|
12.6
|
|
|
12.5
|
|
|
|
|
|
|
|
Tangible common
equity to total assets
|
|
8.49
|
|
|
8.46
|
|
|
8.36
|
|
|
|
|
|
|
|
Dividend paid to HEI
(via ASHI) ($ in millions)
|
|
9
|
|
|
10
|
|
|
10
|
|
|
|
|
|
|
|
|
* 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, 2013 and HEI's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2014,
June 30, 2014 and September 30, 2014 (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)
|
(in thousands)
|
|
September 30,
2014
|
|
December 31,
2013
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
|
|
|
|
$
|
98,879
|
|
|
|
|
|
$
|
108,998
|
|
Interest-bearing
deposits
|
|
|
|
|
74,654
|
|
|
|
|
|
47,605
|
|
Available-for-sale
investment and mortgage-related securities
|
|
|
|
|
531,603
|
|
|
|
|
|
529,007
|
|
Investment in stock
of Federal Home Loan Bank of Seattle
|
|
|
|
|
75,063
|
|
|
|
|
|
92,546
|
|
Loans receivable held
for investment
|
|
|
|
|
4,335,421
|
|
|
|
|
|
4,150,229
|
|
Allowance for loan
losses
|
|
|
|
|
(43,461)
|
|
|
|
|
|
(40,116)
|
|
Loans receivable held
for investment, net
|
|
|
|
|
4,291,960
|
|
|
|
|
|
4,110,113
|
|
Loans held for sale,
at lower of cost or fair value
|
|
|
|
|
2,328
|
|
|
|
|
|
5,302
|
|
Other
|
|
|
|
|
285,659
|
|
|
|
|
|
268,063
|
|
Goodwill
|
|
|
|
|
82,190
|
|
|
|
|
|
82,190
|
|
Total
assets
|
|
|
|
|
$
|
5,442,336
|
|
|
|
|
|
$
|
5,243,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit
liabilities—noninterest-bearing
|
|
|
|
|
$
|
1,298,726
|
|
|
|
|
|
$
|
1,214,418
|
|
Deposit
liabilities—interest-bearing
|
|
|
|
|
3,235,071
|
|
|
|
|
|
3,158,059
|
|
Other
borrowings
|
|
|
|
|
263,204
|
|
|
|
|
|
244,514
|
|
Other
|
|
|
|
|
107,814
|
|
|
|
|
|
105,679
|
|
Total
liabilities
|
|
|
|
|
4,904,815
|
|
|
|
|
|
4,722,670
|
|
Common
stock
|
|
|
|
|
1
|
|
|
|
|
|
1
|
|
Additional paid in
capital
|
|
|
|
|
337,862
|
|
|
|
|
|
336,053
|
|
Retained
earnings
|
|
|
|
|
209,522
|
|
|
|
|
|
197,297
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized losses
on securities
|
|
$
|
(1,972)
|
|
|
|
|
|
$
|
(3,663)
|
|
|
|
|
Retirement benefit
plans
|
|
(7,892)
|
|
|
(9,864)
|
|
|
(8,534)
|
|
|
(12,197)
|
|
Total
shareholder's equity
|
|
|
|
|
537,521
|
|
|
|
|
|
521,154
|
|
Total liabilities
and shareholder's equity
|
|
|
|
|
$
|
5,442,336
|
|
|
|
|
|
$
|
5,243,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2013 and HEI's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2014,
June 30, 2014 and September 30, 2014 (when filed), as updated by
SEC Forms 8-K.
|
|
Contact:
|
Clifford H.
Chen
|
|
|
Manager, Investor
Relations &
|
Telephone: (808)
543-7384
|
|
Strategic
Planning
|
E-mail:
cchen@hei.com
|
Logo -
http://photos.prnewswire.com/prnh/20110411/LA80136LOGO
SOURCE Hawaiian Electric Industries, Inc.