HONOLULU, April 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 $15.8 million for the first quarter of 2017
compared to $16.2 million in the
fourth, or linked, quarter of 2016 and $12.7
million in the first quarter of 2016.
"We are off to a strong start in 2017 as we continue to deliver
for our customers and shareholders. Our first quarter results
demonstrate strong core deposit growth, higher net interest income
and margins, improved operating efficiency, and better asset
quality metrics," said Richard
Wacker, president and chief executive officer of American.
"Total loans declined slightly, reflecting the completion and
payoff of a large commercial real estate construction project and
the resolution and payoff of a prior nonperforming commercial
loan."
First quarter of 2017 net income of $15.8
million was $3.1 million
higher than the first quarter of 2016 and $0.4 million lower than the fourth (linked)
quarter of 2016.
Compared to the first quarter of 2016, the $3.1 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 strong
deposit growth into our investment portfolio.
Compared to the linked fourth quarter of 2016, the $0.4 million decrease was primarily driven by the
following on an after-tax basis:
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___________________
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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 the
bank.
|
- $1 million higher net interest
income driven mainly by higher yields in our investment portfolio
and growth in our consumer portfolio; and
- $1 million lower noninterest
expense.
These increases were offset by the following on an after-tax
basis:
- $1 million higher provision for
loan losses including additional reserves for a commercial real
estate relationship in the first quarter of 2017; and
- $1 million lower noninterest
income primarily due to lower mortgage banking income as a result
of a reduction in residential mortgage refinancing activity.
Net interest income (pretax) was $54.8
million in the first quarter of 2017, compared to
$53.0 million in the linked quarter
and $50.4 million in the prior year
quarter. Net interest margin was 3.68% in the first quarter
of 2017 compared to 3.59% in the linked quarter and 3.62% in the
first quarter of 2016. The higher net interest margin was
primarily attributable to higher yields on interest-earning
assets.
The provision for loan losses (pretax) was $3.9 million in the first quarter of 2017
compared to $1.5 million in the
linked quarter and $4.8 million in
the first quarter of 2016. As previously mentioned, the
increase from the linked quarter was primarily due to reserves for
a commercial real estate relationship. The first quarter of
2017 net charge-off ratio was 0.29%, compared to 0.40% in the
linked quarter and 0.21% in the prior year quarter. The
fourth quarter of 2016 net charge-off ratio included charge-offs of
specific commercial credits that had been previously individually
reserved. Nonaccrual loans as a percent of total loans
receivable held for investment dropped to 0.41% compared to 0.49%
in the linked quarter and 1.01% in the prior year quarter.
Noninterest income (pretax) was $15.1
million in the first quarter of 2017 compared to
$16.5 million in the linked
quarter and $15.4 million in the
prior year quarter, primarily attributable to the decline in
mortgage banking activity.
Noninterest expense (pretax) was $41.9
million compared to $43.1 million in the linked quarter and
$41.4 million in the first
quarter of 2016.
Total loans were $4.7 billion at
March 31, 2017 and included growth in
the residential and consumer loan portfolio during the first
quarter of 2017. The reduction in our exposure to national
credits, a loan payoff connected with a completed construction
project, and the resolution and payoff of a prior nonperforming
commercial loan contributed to the 1.2% annualized decline in our
loan portfolio in the first quarter of 2017.
Total deposits were $5.7 billion
at March 31, 2017, an increase of
$126 million or 9.1% annualized
increase from December 31,
2016. Low-cost core deposits increased $140 million or
11.4% annualized increase from December
31, 2016. The average cost of funds was 0.20% for the
first quarter of 2017 compared to 0.22% for the fourth quarter of
2016 and 0.23% for the first quarter of 2016.
American's return on average equity was 10.8% for the first
quarter of 2017 compared to 11.1% in the linked quarter and 8.9% in
the first quarter of 2016. Return on average assets was 0.98%
for the first quarter of 2017, compared to 1.02% in the linked
quarter and 0.84% 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 -- leverage ratio of 8.5% and total capital ratio of
13.6% at March 31, 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 first 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 first quarter of
2017.
HEI plans to announce its first quarter 2017 consolidated
financial results on Friday, May 5,
2017 and will conduct a webcast and conference call to
discuss its consolidated earnings, including American's earnings,
and 2017 EPS guidance on Friday, May 5, 2017, at 8:00 a.m. Hawaii
time (2:00 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 May 5,
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 May 19, 2017 by dialing
(877) 344-7529 or (412) 317-0088 and entering passcode:
10104146.
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.
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American Savings
Bank, F.S.B.
STATEMENTS OF INCOME
DATA
(Unaudited)
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|
|
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Three months
ended
|
|
(in thousands)
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
50,742
|
|
|
$
|
51,203
|
|
|
$
|
48,437
|
|
|
Interest and
dividends on investment securities
|
|
6,980
|
|
|
4,965
|
|
|
5,017
|
|
|
Total interest and
dividend income
|
|
57,722
|
|
|
56,168
|
|
|
53,454
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
2,103
|
|
|
2,013
|
|
|
1,592
|
|
|
Interest on other
borrowings
|
|
816
|
|
|
1,172
|
|
|
1,485
|
|
|
Total interest
expense
|
|
2,919
|
|
|
3,185
|
|
|
3,077
|
|
|
Net interest
income
|
|
54,803
|
|
|
52,983
|
|
|
50,377
|
|
|
Provision for loan
losses
|
|
3,907
|
|
|
1,497
|
|
|
4,766
|
|
|
Net interest
income after provision for loan losses
|
|
50,896
|
|
|
51,486
|
|
|
45,611
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,610
|
|
|
5,585
|
|
|
5,499
|
|
|
Fee income on deposit
liabilities
|
|
5,428
|
|
|
5,714
|
|
|
5,156
|
|
|
Fee income on other
financial products
|
|
1,866
|
|
|
2,144
|
|
|
2,205
|
|
|
Bank-owned life
insurance
|
|
983
|
|
|
1,017
|
|
|
998
|
|
|
Mortgage banking
income
|
|
789
|
|
|
1,529
|
|
|
1,195
|
|
|
Other income,
net
|
|
458
|
|
|
470
|
|
|
333
|
|
|
Total noninterest
income
|
|
15,134
|
|
|
16,459
|
|
|
15,386
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
23,237
|
|
|
22,920
|
|
|
22,434
|
|
|
Occupancy
|
|
4,154
|
|
|
4,077
|
|
|
4,138
|
|
|
Data
processing
|
|
3,280
|
|
|
3,431
|
|
|
3,172
|
|
|
Services
|
|
2,360
|
|
|
2,961
|
|
|
2,911
|
|
|
Equipment
|
|
1,748
|
|
|
1,745
|
|
|
1,663
|
|
|
Office supplies,
printing and postage
|
|
1,535
|
|
|
1,644
|
|
|
1,365
|
|
|
Marketing
|
|
517
|
|
|
982
|
|
|
861
|
|
|
FDIC
insurance
|
|
728
|
|
|
839
|
|
|
884
|
|
|
Other
expense
|
|
4,311
|
|
|
4,539
|
|
|
3,975
|
|
|
Total noninterest
expense
|
|
41,870
|
|
|
43,138
|
|
|
41,403
|
|
|
Income before
income taxes
|
|
24,160
|
|
|
24,807
|
|
|
19,594
|
|
|
Income
taxes
|
|
8,347
|
|
|
8,590
|
|
|
6,921
|
|
|
Net
income
|
|
$
|
15,813
|
|
|
$
|
16,217
|
|
|
$
|
12,673
|
|
|
Comprehensive
income
|
|
$
|
16,648
|
|
|
$
|
2,540
|
|
|
$
|
20,310
|
|
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OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
Return on average
assets
|
|
0.98
|
|
|
1.02
|
|
|
0.84
|
|
|
Return on average
equity
|
|
10.82
|
|
|
11.09
|
|
|
8.89
|
|
|
Return on average
tangible common equity
|
|
12.58
|
|
|
12.90
|
|
|
10.39
|
|
|
Net interest
margin
|
|
3.68
|
|
|
3.59
|
|
|
3.62
|
|
|
Efficiency
ratio
|
|
59.87
|
|
|
62.12
|
|
|
62.96
|
|
|
Net charge-offs to
average loans outstanding
|
|
0.29
|
|
|
0.40
|
|
|
0.21
|
|
|
As of period
end
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.41
|
|
|
0.49
|
|
|
1.01
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.19
|
|
|
1.17
|
|
|
1.13
|
|
|
Tangible common
equity to tangible assets
|
|
7.78
|
|
|
7.82
|
|
|
8.08
|
|
|
Tier-1 leverage
ratio
|
|
8.5
|
|
|
8.6
|
|
|
8.7
|
|
|
Total capital
ratio
|
|
13.6
|
|
|
13.4
|
|
|
13.2
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
9.4
|
|
|
$
|
9.0
|
|
|
$
|
9.0
|
|
|
|
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)
|
March 31,
2017
|
|
December 31,
2016
|
|
|
Assets
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
125,901
|
|
|
$
|
137,083
|
|
|
Interest-bearing
deposits
|
|
94,573
|
|
|
52,128
|
|
|
Restricted
cash
|
|
—
|
|
|
1,764
|
|
|
Available-for-sale
investment securities, at fair value
|
|
1,228,922
|
|
|
1,105,182
|
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
11,706
|
|
|
11,218
|
|
|
Loans receivable held
for investment
|
|
4,725,271
|
|
|
4,738,693
|
|
|
Allowance for loan
losses
|
|
(55,997)
|
|
|
(55,533)
|
|
|
Net loans
|
|
4,669,274
|
|
|
4,683,160
|
|
|
Loans held for sale,
at lower of cost or fair value
|
|
10,454
|
|
|
18,817
|
|
|
Other
|
|
336,626
|
|
|
329,815
|
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
|
Total
assets
|
|
$
|
6,559,646
|
|
|
$
|
6,421,357
|
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,696,390
|
|
|
$
|
1,639,051
|
|
|
Deposit
liabilities–interest-bearing
|
|
3,978,700
|
|
|
3,909,878
|
|
|
Other
borrowings
|
|
200,154
|
|
|
192,618
|
|
|
Other
|
|
98,223
|
|
|
101,635
|
|
|
Total
liabilities
|
|
5,973,467
|
|
|
5,843,182
|
|
|
Common
stock
|
|
1
|
|
|
1
|
|
|
Additional paid in
capital
|
|
343,435
|
|
|
342,704
|
|
|
Retained
earnings
|
|
264,381
|
|
|
257,943
|
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
|
Net unrealized losses on
securities
|
$
|
(7,708)
|
|
|
$
|
(7,931)
|
|
|
|
Retirement benefit
plans
|
(13,930)
|
|
(21,638)
|
|
(14,542)
|
|
(22,473)
|
|
|
Total
shareholder's equity
|
|
586,179
|
|
|
578,175
|
|
|
Total
liabilities and shareholder's equity
|
|
$
|
6,559,646
|
|
|
$
|
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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To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/american-savings-bank-reports-first-quarter-2017-earnings-300448339.html
SOURCE Hawaiian Electric Industries, Inc.