HONOLULU, Oct. 28, 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 $15.1 million for the third quarter of 2016
compared to $13.3 million in the
second (or linked) quarter of 2016 and $13.5
million in the third quarter of 2015.
"American delivered strong deposit growth, good net interest
margins and bottom line earnings improvement during the quarter,"
said Rich Wacker, president and
chief executive officer of American. "Average loans
outstanding were flat to the prior quarter as we sold more of our
new residential loan production and lowered our exposure to
national credits as our Hawaii
commercial real estate fundings grew. Our provision for loan
loss reserves remained above our initial expectations, driven by
faster growth in our commercial real estate and consumer portfolios
as well as reserves for specific commercial
credits."
Third quarter 2016 net income was $1.8
million higher than the linked quarter primarily driven by
$2 million (after-tax) higher revenues due to higher
noninterest income and net interest income, partially offset by
higher provision for loan losses.
Compared to the third quarter of 2015, net income improved by
$1.7 million primarily driven by
$2 million (after-tax) higher net
interest income due to growth in the commercial real estate and
consumer loan portfolios. Higher net interest income was
partially offset by higher provision for loan losses.
Net interest income (pretax) was $51.9
million in the third quarter of 2016 compared to
$51.0 million in the linked quarter
of 2016 and $47.8 million in the
prior year quarter. The increase compared to the linked and
prior year quarter was primarily attributable to growth and higher
yields in the commercial real estate and consumer loan
portfolios. Net interest margin was 3.57% compared to 3.58%
in the linked quarter and 3.53% in the third quarter of 2015.
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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.
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Provision for loan losses (pretax) was $5.7 million in the third quarter of 2016
compared to $4.8 million in the
linked quarter of 2016 and $3.0
million in the third quarter of 2015. The increase in
provision compared to the linked and prior year quarter was largely
due to reserves for specific commercial credits. The net
charge-off ratio was 0.20% compared to 0.15% in the linked quarter
and 0.10% in the prior year quarter.
Noninterest income (pretax) was $18.5
million in the third quarter of 2016, compared to
$16.6 million in the linked quarter
and $18.5 million in the third
quarter of 2015. The $1.9
million higher noninterest income compared to the linked
quarter was primarily due to a $1.0
million gain on sale of real estate and $0.8 million higher mortgage banking income in
the third quarter of 2016.
Noninterest expense (pretax) was $41.9
million in the third quarter of 2016, compared to
$42.6 million in the linked quarter
and $42.4 million in the third
quarter of 2015. The lower noninterest expense in the third
quarter of 2016 compared to the linked quarter was mainly due to
$1.2 million of nonrecurring cost
related to the replacement and upgrade of the electronic banking
platform that was launched last quarter.
Total loans were $4.7 billion at
September 30, 2016, essentially flat
to the linked quarter and increased $118
million year-to-date 2016. Year-to-date annualized
loan growth was 3.4%, on track for American's target of mid-single
digit loan growth for the full year.
Total deposits were $5.4 billion
at September 30, 2016, an increase of
$149 million and $355 million in the third quarter and
year-to-date 2016, respectively. Year-to-date annualized
deposit growth of 9.4% was primarily driven by the $190 million (5.6% year-to-date annualized)
increase in low-cost core deposits. Average cost of
funds remained low at 0.24% for the third quarter of 2016, 1 basis
point higher than the linked quarter and 2 basis points higher than
the prior year quarter.
American's return on average equity was 10.4% for the third
quarter of 2016, compared to 9.2% in the linked quarter and 9.7% in
the third quarter of 2015. Return on average assets was 0.97%
for the third quarter of 2016, compared to 0.86% in the linked
quarter and 0.92% 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 8.6% and
total capital ratio of 13.3% at September
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 third 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 third quarter of
2016.
HEI plans to announce its third quarter and year-to-date 2016
consolidated financial results on Friday,
November 4, 2016 and will conduct a webcast and conference
call to discuss its consolidated earnings, including American's
earnings, and 2016 EPS guidance on Friday,
November 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)
317-6016. International parties may listen to the conference by
calling (412) 317-6016 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 November 18,
2016, by dialing (877) 344-7529 or (412) 317-0088 and
entering passcode: 10094997.
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 June 30, 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)
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Three months
ended
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Nine months ended
September 30
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(in
thousands)
|
|
September 30,
2016
|
|
|
June 30,
2016
|
|
|
September 30,
2015
|
|
|
2016
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|
2015
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
50,444
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|
$
|
49,690
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|
$
|
46,413
|
|
$
|
148,571
|
|
$
|
137,646
|
Interest and dividends
on investment securities
|
|
4,759
|
|
|
4,443
|
|
|
4,213
|
|
|
14,219
|
|
|
10,570
|
Total interest and
dividend income
|
|
55,203
|
|
|
54,133
|
|
|
50,626
|
|
|
162,790
|
|
|
148,216
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Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,871
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|
|
1,691
|
|
|
1,355
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|
|
5,154
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|
|
3,881
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Interest on other
borrowings
|
|
1,464
|
|
|
1,467
|
|
|
1,515
|
|
|
4,416
|
|
|
4,468
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Total interest
expense
|
|
3,335
|
|
|
3,158
|
|
|
2,870
|
|
|
9,570
|
|
|
8,349
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Net interest
income
|
|
51,868
|
|
|
50,975
|
|
|
47,756
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|
|
153,220
|
|
|
139,867
|
Provision for loan
losses
|
|
5,747
|
|
|
4,753
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|
|
2,997
|
|
|
15,266
|
|
|
5,436
|
Net interest income
after provision for loan losses
|
|
46,121
|
|
|
46,222
|
|
|
44,759
|
|
|
137,954
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|
|
134,431
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Noninterest
income
Fees from other
financial services
|
|
5,599
|
|
|
5,701
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|
|
5,639
|
|
|
16,799
|
|
|
16,544
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Fee income on deposit
liabilities
|
|
5,627
|
|
|
5,262
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|
|
5,883
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|
|
16,045
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|
|
16,622
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Fee income on other
financial products
|
|
2,151
|
|
|
2,207
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|
|
2,096
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|
|
6,563
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|
|
6,088
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Bank-owned life
insurance
|
|
1,616
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|
|
1,006
|
|
|
1,021
|
|
|
3,620
|
|
|
3,062
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Mortgage banking
income
|
|
2,347
|
|
|
1,554
|
|
|
1,437
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|
|
5,096
|
|
|
5,327
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Gains on sale of
investment securities, net
|
|
—
|
|
|
598
|
|
|
—
|
|
|
598
|
|
|
—
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Other income,
net
|
|
1,165
|
|
|
288
|
|
|
2,389
|
|
|
1,786
|
|
|
3,363
|
Total noninterest
income
|
|
18,505
|
|
|
16,616
|
|
|
18,465
|
|
|
50,507
|
|
|
51,006
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
22,844
|
|
|
21,919
|
|
|
22,728
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|
|
67,197
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|
|
66,813
|
Occupancy
|
|
3,991
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|
|
4,115
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|
|
4,128
|
|
|
12,244
|
|
|
12,250
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Data
processing
|
|
3,150
|
|
|
3,277
|
|
|
3,032
|
|
|
9,599
|
|
|
9,101
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Services
|
|
2,427
|
|
|
2,755
|
|
|
2,556
|
|
|
8,093
|
|
|
7,730
|
Equipment
|
|
1,759
|
|
|
1,771
|
|
|
1,608
|
|
|
5,193
|
|
|
4,999
|
Office supplies,
printing and postage
|
|
1,483
|
|
|
1,583
|
|
|
1,511
|
|
|
4,431
|
|
|
4,297
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Marketing
|
|
747
|
|
|
899
|
|
|
934
|
|
|
2,507
|
|
|
2,619
|
FDIC
insurance
|
|
907
|
|
|
913
|
|
|
809
|
|
|
2,704
|
|
|
2,393
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Other
expense
|
|
4,591
|
|
|
5,382
|
|
|
5,116
|
|
|
13,948
|
|
|
14,076
|
Total noninterest
expense
|
|
41,899
|
|
|
42,614
|
|
|
42,422
|
|
|
125,916
|
|
|
124,278
|
Income before income
taxes
|
|
22,727
|
|
|
20,224
|
|
|
20,802
|
|
|
62,545
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|
|
61,159
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Income taxes
|
|
7,623
|
|
|
6,939
|
|
|
7,351
|
|
|
21,483
|
|
|
21,382
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Net
income
|
$
|
15,104
|
|
$
|
13,285
|
|
$
|
13,451
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|
$
|
41,062
|
|
$
|
39,777
|
Comprehensive
income
|
$
|
13,176
|
|
$
|
16,051
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$
|
17,678
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$
|
49,537
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|
$
|
44,540
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OTHER BANK INFORMATION
(annualized %, except as of period end)
Return on average
assets
|
|
0.97
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|
|
0.86
|
|
|
0.92
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|
|
0.89
|
|
|
0.92
|
Return on average
equity
|
|
10.36
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|
|
9.22
|
|
|
9.73
|
|
|
9.50
|
|
|
9.69
|
Return on average
tangible common equity
|
|
12.06
|
|
|
10.75
|
|
|
11.43
|
|
|
11.07
|
|
|
11.40
|
Net interest
margin
|
|
3.57
|
|
|
3.58
|
|
|
3.53
|
|
|
3.59
|
|
|
3.52
|
Efficiency
ratio
|
|
59.54
|
|
|
63.05
|
|
|
64.06
|
|
|
61.81
|
|
|
65.11
|
Net charge-offs to
average loans outstanding
|
|
0.20
|
|
|
0.15
|
|
|
0.10
|
|
|
0.19
|
|
|
0.08
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets to
loans outstanding and real estate owned
|
|
1.12
|
|
|
1.02
|
|
|
1.00
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|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.24
|
|
|
1.16
|
|
|
1.06
|
|
|
|
|
|
|
Tangible common equity
to tangible assets
|
|
8.03
|
|
|
8.15
|
|
|
8.23
|
|
|
|
|
|
|
Tier-1 leverage
ratio
|
|
8.6
|
|
|
8.7
|
|
|
8.8
|
|
|
|
|
|
|
Total capital
ratio
|
|
13.3
|
|
|
13.2
|
|
|
13.4
|
|
|
|
|
|
|
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)
|
September 30,
2016
|
December 31,
2015
|
|
|
|
|
|
Assets
|
|
|
|
|
Cash and due from
banks
|
|
$
|
109,591
|
|
|
$
|
127,201
|
|
Interest-bearing
deposits
|
|
103,989
|
|
|
93,680
|
|
Available-for-sale
investment securities, at fair value
|
|
996,984
|
|
|
820,648
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
11,218
|
|
|
10,678
|
|
Loans receivable held
for investment
|
|
4,734,638
|
|
|
4,615,819
|
|
Allowance for loan
losses
|
|
(58,737)
|
|
|
(50,038)
|
|
Net loans
|
|
4,675,901
|
|
|
4,565,781
|
|
Loans held for sale,
at lower of cost or fair value
|
|
26,743
|
|
|
4,631
|
|
Other
|
|
330,054
|
|
|
309,946
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
Total
assets
|
|
$
|
6,336,670
|
|
|
$
|
6,014,755
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,570,613
|
|
|
$
|
1,520,374
|
|
Deposit
liabilities–interest-bearing
|
|
3,810,108
|
|
|
3,504,880
|
|
Other
borrowings
|
|
265,388
|
|
|
328,582
|
|
Other
|
|
106,396
|
|
|
101,029
|
|
Total
liabilities
|
|
5,752,505
|
|
|
5,454,865
|
|
Common
stock
|
|
1
|
|
|
1
|
|
Additional paid in
capital
|
|
342,234
|
|
|
340,496
|
|
Retained
earnings
|
|
250,726
|
|
|
236,664
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
Net unrealized gains
(losses) on securities
|
$
|
5,965
|
|
|
$
|
(1,872)
|
|
|
Retirement benefit
plans
|
(14,761)
|
|
(8,796)
|
|
(15,399)
|
|
(17,271)
|
|
Total shareholder's
equity
|
|
584,165
|
|
|
559,890
|
|
Total liabilities
and shareholder's equity
|
|
$
|
6,336,670
|
|
|
$
|
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
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|
|
Manager, Investor
Relations &
|
Telephone: (808)
543-7300
|
|
Strategic Planning
|
E-mail:
ir@hei.com
|
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SOURCE Hawaiian Electric Industries, Inc.