HONOLULU, Jan. 30, 2018 /PRNewswire/ --
Selected 2017 Highlights
- Strong 2017 earnings and profitability
-
- Return on assets of 1.02%
- Net interest margin of 3.69%
- Earning asset growth of 5.2%; net interest income growth of
8.6%
- Deposit growth of 6.2%
- Strong capital levels: 8.6% leverage ratio; 14.2% total capital
ratio
- Broke ground on new Oahu
campus which will bring approximately 600 teammates from five
locations together at one of the most innovative, collaborative and
modern worksites in the state
- Named one of Hawaii Business Magazine "Best Places to
Work" for the 8th consecutive year
- Contributed over 7,500 volunteer hours and over $1 million of charitable contributions to
community organizations
American Savings Bank, F.S.B. (American), a wholly-owned
subsidiary of Hawaiian Electric Industries, Inc. (NYSE: HE) today
reported net income for the full year of 2017 of $67.0 million compared to $57.3 million in 2016. Net income for the
fourth quarter of 2017 was $16.9 million, compared to $17.6 million in the third, or linked, quarter of
2017 and $16.2 million in the fourth
quarter of 2016. The Bank benefited by the enactment of the
Tax Cuts and Jobs Act of 2017, through lower federal corporate tax
rates. The Bank recognized a one-time tax benefit of
$1.7 million and passed on
$1.2 million of increased
compensation to its employees, excluding senior management, through
a $1,000 cash bonus paid in
December 2017.
"Our results for the fourth quarter and year show that we
continue to deliver well for our customers, the bank, and for
shareholders," said Richard Wacker,
president and chief executive officer of American. "Solid
deposit growth and improved asset quality continue to fuel the
bank's broad profitability improvement compared to last year.
While loans declined slightly due to the timing of paydown and
payoff of specific Commercial Markets loans, we see good levels of
activity and believe the effect of the recent tax reforms will be
positive for the Hawaii economy
and workforce."
Financial Highlights
Net interest income was $223.9
million in 2017, higher than the $206.2 million in 2016. Fourth quarter 2017
net interest income was $57.0
million, compared to $56.1
million in the linked quarter and $53.0 million in fourth quarter of 2016.
The increase in net interest income was primarily due to strong
deposit growth that funded earning asset growth in the investment
portfolio and retail loan portfolios which include consumer loans,
residential loans and home equity lines of credit. Net
interest margin was 3.69% in 2017 compared to 3.59% in 2016. Fourth
quarter of 2017 net interest margin was 3.68% compared to 3.69% in
the linked quarter and 3.59% in the fourth quarter of 2016.
The improvement in net interest margin was primarily attributable
to higher yields on interest-earning assets and growth in
higher-yielding loan portfolios.
The provision for loan losses was $10.9
million in 2017 compared to $16.8 million in 2016. The fourth quarter of
2017 provision for loan losses was $3.7 million compared to $0.5 million in the linked quarter and
$1.5 million in the fourth quarter of
2016. The year over year lower provision for loan losses
reflects the strategic decision to improve American's credit risk
profile through the reduction in our syndicated national credit
portfolio and resolution of specific problem loans, partially
offset by reserves required for growth in the retail loan
portfolio. The increase in the fourth quarter of 2017
provision for loan losses compared to the linked quarter and the
fourth quarter of 2016 was primarily due to reserves required for
growth and a slight increase in the reserve levels for the retail
portfolios. The 2017 net charge-off ratio was 0.27% compared
to 0.24% in 2016 primarily due to continued growth in
our consumer loan portfolio. Nonaccrual loans as a
percent of total loans receivable held for investment was 0.51%
compared to 0.50% in the linked quarter and 0.49% in the prior year
quarter.
Reflecting lower mortgage banking income throughout 2017,
noninterest income for 2017 was $61.6
million, compared to $67.0 million in 2016 and fourth quarter
2017 noninterest income was $15.0 million, compared to $15.2 million in the linked quarter and
$16.5 million in the fourth quarter
of 2016.
Noninterest expense for 2017 was $175.9
million compared to $169.1 million in 2016. Fourth quarter
of 2017 noninterest expense was $45.3
million compared to $44.1 million in the linked quarter and
$43.1 million in the fourth
quarter of 2016. 2017 noninterest expense was impacted by the
$1.2 million bonus awarded to
employees at the end of December
2017, in addition to increases in performance-based
incentive cost.
Total loans were $4.7 billion at
December 31, 2017, with retail loans
up $161 million or 5.2%, offset by an
overall reduction in commercial and commercial real estate loans of
$233 million or 14.4% compared to
December 31, 2016. The
$72 million decrease in total loans
reflects our work to improve American's credit risk profile through
the strategic reduction in our exposure to national syndicated
credits by $75 million as well as the
resolution of specific problem loans.
Total deposits were $5.9 billion
at December 31, 2017, an increase of
$138 million or 9.6% annualized from
September 30, 2017, and $342
million or 6.2% from December
31, 2016. The average cost of funds was 0.21% for the
full year 2017, down 2 basis points from the prior year. For
the fourth quarter of 2017, the average cost of funds was 0.21%, up
1 basis point from the linked quarter and down 1 basis point from
the prior year quarter.
Overall, American's return on average equity for the full year
was solid at 11.20% in 2017 compared to 9.90% in 2016 and the
return on average assets for the full year was 1.02% in 2017
compared to 0.92% in 2016. For the fourth quarter of 2017,
the return on average equity was 11.09%, compared to 11.64% in the
linked quarter and 11.09% in the fourth quarter of 2016.
Return on average assets was 1.01% for the fourth quarter of 2017,
compared to 1.07% in the linked quarter and 1.02% in the same
quarter last year.
In 2017, American paid dividends of $37.5
million to HEI while maintaining healthy capital levels --
leverage ratio of 8.6% and total capital ratio of 14.2% at
December 31, 2017.
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO
DISCUSS EARNINGS AND 2018 EPS GUIDANCE
Concurrent with American's regulatory filing 30 days after the
end of the quarter, American announced its fourth 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 fourth quarter and
full year 2017.
HEI plans to announce its fourth quarter and 2017 consolidated
financial results on Wednesday, February 14, 2018 and will
conduct a webcast and conference call to discuss its consolidated
earnings, including American's earnings, and 2018 EPS guidance on
Wednesday, February 14, 2018, at 11:00 a.m. Hawaii time (4:00 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 or 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, 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 at www.hei.com 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 February 14,
2018 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 February 28, 2018 by dialing
(877) 344-7529 or (412) 317-0088 and entering passcode:
10116187.
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.
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 "Cautionary Note Regarding Forward-Looking
Statements" and "Risk Factors" discussions (which are incorporated
by reference herein) set forth in HEI's Quarterly Report on Form
10-Q for the quarter ended September 30, 2017 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
|
|
Year ended December
31
|
(in thousands)
|
|
December 31,
2017
|
|
September 30,
2017
|
|
December 31,
2016
|
|
2017
|
|
2016
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
51,986
|
|
|
$
|
52,210
|
|
|
$
|
51,203
|
|
|
$
|
207,255
|
|
|
$
|
199,774
|
|
Interest and
dividends on investment securities
|
|
8,230
|
|
|
6,850
|
|
|
4,965
|
|
|
28,823
|
|
|
19,184
|
|
Total interest and
dividend income
|
|
60,216
|
|
|
59,060
|
|
|
56,168
|
|
|
236,078
|
|
|
218,958
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
2,802
|
|
|
2,444
|
|
|
2,013
|
|
|
9,660
|
|
|
7,167
|
|
Interest on other
borrowings
|
|
386
|
|
|
470
|
|
|
1,172
|
|
|
2,496
|
|
|
5,588
|
|
Total interest
expense
|
|
3,188
|
|
|
2,914
|
|
|
3,185
|
|
|
12,156
|
|
|
12,755
|
|
Net interest
income
|
|
57,028
|
|
|
56,146
|
|
|
52,983
|
|
|
223,922
|
|
|
206,203
|
|
Provision for loan
losses
|
|
3,670
|
|
|
490
|
|
|
1,497
|
|
|
10,901
|
|
|
16,763
|
|
Net interest
income after provision for loan losses
|
|
53,358
|
|
|
55,656
|
|
|
51,486
|
|
|
213,021
|
|
|
189,440
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,741
|
|
|
5,635
|
|
|
5,585
|
|
|
22,796
|
|
|
22,384
|
|
Fee income on deposit
liabilities
|
|
5,678
|
|
|
5,533
|
|
|
5,714
|
|
|
22,204
|
|
|
21,759
|
|
Fee income on other
financial products
|
|
1,464
|
|
|
1,904
|
|
|
2,144
|
|
|
7,205
|
|
|
8,707
|
|
Bank-owned life
insurance
|
|
1,374
|
|
|
1,257
|
|
|
1,017
|
|
|
5,539
|
|
|
4,637
|
|
Mortgage banking
income
|
|
305
|
|
|
520
|
|
|
1,529
|
|
|
2,201
|
|
|
6,625
|
|
Gains on sale of
investment securities, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
598
|
|
Other income,
net
|
|
388
|
|
|
380
|
|
|
470
|
|
|
1,617
|
|
|
2,256
|
|
Total noninterest
income
|
|
14,950
|
|
|
15,229
|
|
|
16,459
|
|
|
61,562
|
|
|
66,966
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
24,048
|
|
|
23,724
|
|
|
22,920
|
|
|
95,751
|
|
|
90,117
|
|
Occupancy
|
|
4,076
|
|
|
4,284
|
|
|
4,077
|
|
|
16,699
|
|
|
16,321
|
|
Data
processing
|
|
3,531
|
|
|
3,262
|
|
|
3,431
|
|
|
13,280
|
|
|
13,030
|
|
Services
|
|
3,005
|
|
|
2,863
|
|
|
2,961
|
|
|
10,994
|
|
|
11,054
|
|
Equipment
|
|
1,899
|
|
|
1,814
|
|
|
1,745
|
|
|
7,232
|
|
|
6,938
|
|
Office supplies,
printing and postage
|
|
1,676
|
|
|
1,444
|
|
|
1,644
|
|
|
6,182
|
|
|
6,075
|
|
Marketing
|
|
1,211
|
|
|
934
|
|
|
982
|
|
|
3,501
|
|
|
3,489
|
|
FDIC
insurance
|
|
608
|
|
|
746
|
|
|
839
|
|
|
2,904
|
|
|
3,543
|
|
Other
expense
|
|
5,258
|
|
|
5,050
|
|
|
4,539
|
|
|
19,324
|
|
|
18,487
|
|
Total noninterest
expense
|
|
45,312
|
|
|
44,121
|
|
|
43,138
|
|
|
175,867
|
|
|
169,054
|
|
Income before
income taxes
|
|
22,996
|
|
|
26,764
|
|
|
24,807
|
|
|
98,716
|
|
|
87,352
|
|
Income
taxes
|
|
6,137
|
|
|
9,172
|
|
|
8,590
|
|
|
31,719
|
|
|
30,073
|
|
Net
income
|
|
$
|
16,859
|
|
|
$
|
17,592
|
|
|
$
|
16,217
|
|
|
$
|
66,997
|
|
|
$
|
57,279
|
|
Comprehensive
income
|
|
$
|
10,245
|
|
|
$
|
18,009
|
|
|
$
|
2,540
|
|
|
$
|
63,858
|
|
|
$
|
52,077
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.01
|
|
|
1.07
|
|
|
1.02
|
|
|
1.02
|
|
|
0.92
|
|
Return on average
equity
|
|
11.09
|
|
|
11.64
|
|
|
11.09
|
|
|
11.20
|
|
|
9.90
|
|
Return on average
tangible common equity
|
|
12.82
|
|
|
13.47
|
|
|
12.90
|
|
|
12.99
|
|
|
11.53
|
|
Net interest
margin
|
|
3.68
|
|
|
3.69
|
|
|
3.59
|
|
|
3.69
|
|
|
3.59
|
|
Efficiency
ratio
|
|
62.95
|
|
|
61.82
|
|
|
62.12
|
|
|
61.60
|
|
|
61.89
|
|
Net charge-offs to
average loans outstanding
|
|
0.26
|
|
|
0.32
|
|
|
0.40
|
|
|
0.27
|
|
|
0.24
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.51
|
|
|
0.50
|
|
|
0.49
|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.15
|
|
|
1.13
|
|
|
1.17
|
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
7.81
|
|
|
8.01
|
|
|
7.82
|
|
|
|
|
|
Tier-1 leverage
ratio
|
|
8.6
|
|
|
8.7
|
|
|
8.6
|
|
|
|
|
|
Total capital
ratio
|
|
14.2
|
|
|
13.9
|
|
|
13.4
|
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
9.4
|
|
|
$
|
9.4
|
|
|
$
|
9.0
|
|
|
$
|
37.5
|
|
|
$
|
36.0
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI filings with the
SEC.
|
American Savings
Bank, F.S.B.
|
BALANCE SHEETS
DATA
|
(Unaudited)
|
|
December
31
|
|
2017
|
|
|
2016
|
|
(in
thousands)
|
|
|
|
|
Assets
|
|
|
|
|
Cash and due from
banks
|
|
$
|
140,934
|
|
|
$
|
137,083
|
|
Interest-bearing
deposits
|
|
93,165
|
|
|
52,128
|
|
Restricted
cash
|
|
—
|
|
|
1,764
|
|
Investment
securities
|
|
|
|
|
Available-for-sale, at fair value
|
|
1,401,198
|
|
|
1,105,182
|
|
Held-to-maturity, at amortized cost
|
|
44,515
|
|
|
—
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
9,706
|
|
|
11,218
|
|
Loans receivable held
for investment
|
|
4,670,768
|
|
|
4,738,693
|
|
Allowance for loan
losses
|
|
(53,637)
|
|
|
(55,533)
|
|
Net
loans
|
|
4,617,131
|
|
|
4,683,160
|
|
Loans held for sale,
at lower of cost or fair value
|
|
11,250
|
|
|
18,817
|
|
Other
|
|
398,570
|
|
|
329,815
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
Total
assets
|
|
$
|
6,798,659
|
|
|
$
|
6,421,357
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,760,233
|
|
|
$
|
1,639,051
|
|
Deposit
liabilities–interest-bearing
|
|
4,130,364
|
|
|
3,909,878
|
|
Other
borrowings
|
|
190,859
|
|
|
192,618
|
|
Other
|
|
110,356
|
|
|
101,635
|
|
Total
liabilities
|
|
6,191,812
|
|
|
5,843,182
|
|
Shareholder's
equity
|
|
606,847
|
|
|
578,175
|
|
Total
liabilities and shareholder's equity
|
|
$
|
6,798,659
|
|
|
$
|
6,421,357
|
|
|
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
|
Telephone: (808)
543-7300
|
|
Treasurer &
Manager, Investor Relations & Strategic
Planning
|
E-mail:
ir@hei.com
|
View original content with
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SOURCE Hawaiian Electric Industries, Inc.