HONOLULU, Jan. 28, 2022 /PRNewswire/ -- American Savings
Bank, F.S.B. (American), a wholly owned subsidiary of Hawaiian
Electric Industries, Inc. (NYSE: HE), today reported 2021
net income of $101.2 million,
compared to $57.6 million1
in 2020.
"We're pleased with our 2021 results, which reflect strong
performance by our teammates, solid credit quality, an improving
Hawaii economy and robust earning
asset growth. We made major strides in our digital
transformation and remain focused on making banking easy anytime
and anywhere for our customers," said Ann
Teranishi, president and chief executive officer of American
Savings Bank. "Our strong performance was matched with our
continued commitment to support our community's recovery. We're
particularly proud of our ASB teammates' efforts to build on the
momentum from 2020 and once again lead the Hawaii Restaurant Card -
Business Holiday Card program in the fourth quarter. The statewide
campaign resulted in the sale of 14,000 prepaid cards, totaling
over $750,000, in direct support for
our restaurant and food supply industries," said Teranishi.
Net income for the fourth quarter of 2021 was $22.1 million, compared to $19.3 million in the third quarter of 2021 and
$15.7 million in the fourth quarter
of 2020.
Financial Highlights
Net interest income was $237.2
million in 2021 compared to $233.5
million in 2020. The increase in net interest income for the
year was primarily due to higher average earning assets driven by
increased liquidity from continued strong deposit growth, lower
cost of funds and higher fee income associated with the Paycheck
Protection Program (PPP) loan portfolio. Fourth quarter 2021 net
interest income was $59.1 million
compared to $60.3 million in the
linked quarter and $58.5 million in
the fourth quarter of 2020. The lower net interest income compared
to the linked quarter was primarily due to lower earning asset
yields and lower fee income associated with the PPP loan portfolio.
Net interest margin was 2.91% in 2021, compared to 3.29% in 2020.
Net interest margin for the fourth quarter of 2021 was 2.79%
compared to 2.90% in the linked quarter and 3.12% in the fourth
quarter of 2020.
The results for 2021 included a negative provision for credit
losses of $25.8 million compared to a
provision for credit losses of $50.8
million in 2020. The negative provision for credit losses
reflects favorable credit trends with continued improvement in the
economic environment, and a slight shift in loan portfolio
composition with growth in the real estate secured portfolio. The
results for the fourth quarter of 2021 included a negative
provision for credit losses of $3.5
million compared to a negative provision for credit losses
of $1.7 million in the linked quarter
and a provision for credit losses of $11.3
million in the fourth quarter of 2020. As of
December 31, 2021, American's allowance for credit losses to
outstanding loans was 1.36% compared to 1.48% as of
September 30, 2021 and 1.90% as of December 31, 2020.
The 2021 net charge-off ratio was 0.07% compared to 0.40% in
2020. The net charge-off ratio for each of the fourth and third
quarters of 2021 was 0.03%, compared to 0.36% in the fourth quarter
of 2020. Nonaccrual loans as a percent of total loans receivable
held for investment were 0.86% in the fourth quarter of 2021,
compared to 0.97% in the linked quarter and 0.89% in the prior year
quarter.
Noninterest income for 2021 was $64.7
million compared to $78.1
million in 2020.2 The decrease in noninterest
income was primarily due to lower mortgage banking income in 2021
and higher gains on sales of securities in 2020. Noninterest income
was $15.7 million in the fourth
quarter of 2021, compared to $14.8
million in the linked quarter and $20.2 million in the fourth quarter of 2020. The
decrease in noninterest income from the prior year quarter was
primarily due to lower mortgage banking income and lower bank-owned
life insurance income.
Noninterest expense for 2021 was $197.2
million compared to $191.6
million in 2020. The increase in noninterest expense was
primarily due to higher incentive compensation costs reflecting the
bank's strong 2021 performance and higher data processing expense
as the bank upgrades its technology and data capabilities to expand
customer relationships, partially offset by lower COVID-19 related
expenses. Fourth quarter of 2021 noninterest expense was
$50.0 million, compared to
$51.5 million in the linked quarter
and $49.4 million in the fourth
quarter of 2020.
Total earning assets as of December 31, 2021 were
$8.5 billion, up 11.4% from
December 31, 2020.
Total loans were $5.2 billion as
of December 31, 2021, down 2.3% from December 31, 2020.
The reduction in the loan portfolio during the year included a
$231 million net reduction in PPP
loans, as well as declines in the home equity line of credit and
consumer portfolios. The decrease in these portfolios was partially
offset by growth in the residential, commercial and commercial real
estate loan portfolios. Excluding PPP loan forgiveness, the loan
portfolio grew by $107 million or
2.1% compared to December 31,
2020.
The investment securities portfolio was $3.1 billion as of December 31, 2021, up
40.9% from December 31, 2020 as growth in deposits continued
to outpace loan growth. The portfolio is primarily composed of
securities issued or guaranteed by U.S. government agencies or U.S.
government sponsored agencies.
Total deposits were $8.2 billion
as of December 31, 2021, an increase of 10.6% from
December 31, 2020. The average cost of funds was 0.06% for the
full year 2021, ten basis points lower than the prior year. For the
fourth quarter of 2021, the average cost of funds was 0.05%, down
one basis point versus the linked quarter and down four basis
points versus the prior year quarter.
American's return on average equity for the full year 2021 was
13.8% compared to 8.1% in 2020. Return on average assets for the
full year was 1.15% in 2021 compared to 0.74% in 2020. For the
fourth quarter of 2021, return on average equity was 12.1%,
compared to 10.3% in the linked quarter and 8.6% in the fourth
quarter of 2020. Return on average assets was 0.97% for the fourth
quarter of 2021, compared to 0.86% in the linked quarter and 0.77%
in the same quarter last year.
In the fourth quarter of 2021, American paid dividends of
$19.0 million to HEI. American had a
Tier 1 leverage ratio of 7.9% as of December 31, 2021.
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO
DISCUSS EARNINGS AND 2022 GUIDANCE
Concurrent with American's regulatory filing 30 days after the
end of the quarter, American announced its fourth quarter and full
year 2021 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 2021.
HEI plans to announce its fourth quarter and full year 2021
consolidated financial results on Monday,
February 14, 2022 and will also conduct a webcast and
conference call at 11:15 a.m.
Hawaii time (4:15 p.m.
Eastern time) that same day to discuss its consolidated earnings,
including American's earnings, and 2022 guidance.
To listen to the conference call, dial 1-844-200-6205 (U.S.) or
1-929-526-1599 (international) and enter passcode 718780. Parties
may also access presentation materials and/or listen to the
conference call by visiting the conference call link on HEI's
website at www.hei.com under "Investor Relations," sub-heading
"News and Events — Events and Presentations."
A replay will be available online and via phone. The online
replay will be available on HEI's website about two hours after the
event. An audio replay will also be available about two hours
after the event through February 28,
2022. To access the audio replay, dial 1-866-813-9403 (U.S.)
or 44-204-525-0658 (international) and enter passcode 312244.
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 in the Investor Relations section of the website.
Accordingly, investors should routinely monitor the Investor
Relations section 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. Investors
may sign up to receive e-mail alerts via the "Investor Relations"
section of the website. The information on HEI's website is not
incorporated by reference into this document or into 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 to review documents
filed with, and issued by, the PUC. No information on the PUC
website is incorporated by reference into this document or into
HEI's and Hawaiian Electric's SEC filings.
The HEI family of companies provides the energy and financial
services that empower much of the economic and community activity
of Hawaii. HEI's electric utility,
Hawaiian Electric, supplies power to approximately 95% of
Hawaii's population and is
undertaking an ambitious effort to decarbonize its operations and
the broader state economy. Its banking subsidiary, American Savings
Bank, is one of Hawaii's largest
financial institutions, providing a wide array of banking and other
financial services and working to advance economic growth,
affordability and financial fitness. HEI also helps advance
Hawaii's sustainability goals
through investments by its non-regulated subsidiary, Pacific
Current. For more information, visit www.hei.com.
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, political
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 Annual Report on Form 10-K
for the year ended December 31, 2020
and HEI's other 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.
1
|
Results for 2020
included impact of after-tax gain of $5.2 million related to the
sale of Visa Class B shares in the second quarter of 2020, as well
as $5.1 million of certain direct and incremental COVID-19 related
costs.
|
2
|
See footnote 1
above.
|
American Savings
Bank, F.S.B.
|
STATEMENTS OF INCOME
DATA
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Years ended December
31
|
(in thousands)
|
|
December 31,
2021
|
|
September 30,
2021
|
|
December 31,
2020
|
|
2021
|
|
2020
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
48,384
|
|
$
49,445
|
|
$
52,629
|
|
$
198,802
|
|
$
214,134
|
Interest and
dividends on investment securities
|
|
11,755
|
|
11,996
|
|
7,590
|
|
43,464
|
|
30,529
|
Total interest and
dividend income
|
|
60,139
|
|
61,441
|
|
60,219
|
|
242,266
|
|
244,663
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,062
|
|
1,176
|
|
1,709
|
|
4,981
|
|
10,654
|
Interest on other
borrowings
|
|
4
|
|
5
|
|
11
|
|
59
|
|
460
|
Total interest
expense
|
|
1,066
|
|
1,181
|
|
1,720
|
|
5,040
|
|
11,114
|
Net interest
income
|
|
59,073
|
|
60,260
|
|
58,499
|
|
237,226
|
|
233,549
|
Provision for credit
losses
|
|
(3,458)
|
|
(1,725)
|
|
11,307
|
|
(25,825)
|
|
50,811
|
Net interest
income after provision for credit losses
|
|
62,531
|
|
61,985
|
|
47,192
|
|
263,051
|
|
182,738
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,888
|
|
4,800
|
|
4,541
|
|
21,225
|
|
16,447
|
Fee income on deposit
liabilities
|
|
4,634
|
|
4,262
|
|
4,217
|
|
16,663
|
|
16,059
|
Fee income on other
financial products
|
|
2,003
|
|
2,124
|
|
1,773
|
|
8,770
|
|
6,381
|
Bank-owned life
insurance
|
|
1,107
|
|
2,026
|
|
2,051
|
|
7,318
|
|
6,483
|
Mortgage banking
income
|
|
1,808
|
|
1,272
|
|
7,801
|
|
9,305
|
|
23,734
|
Gain on sale of
investment securities, net
|
|
—
|
|
—
|
|
—
|
|
528
|
|
9,275
|
Other income,
net
|
|
220
|
|
283
|
|
(187)
|
|
851
|
|
(256)
|
Total noninterest
income
|
|
15,660
|
|
14,767
|
|
20,196
|
|
64,660
|
|
78,123
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
27,375
|
|
30,888
|
|
27,156
|
|
113,970
|
|
104,443
|
Occupancy
|
|
5,358
|
|
5,157
|
|
5,171
|
|
20,584
|
|
21,573
|
Data
processing
|
|
4,472
|
|
4,278
|
|
3,717
|
|
17,634
|
|
14,769
|
Services
|
|
2,718
|
|
2,272
|
|
3,214
|
|
10,327
|
|
11,121
|
Equipment
|
|
2,521
|
|
2,373
|
|
2,371
|
|
9,510
|
|
9,001
|
Office supplies,
printing and postage
|
|
1,145
|
|
1,072
|
|
1,046
|
|
4,239
|
|
4,623
|
Marketing
|
|
1,562
|
|
995
|
|
1,527
|
|
3,870
|
|
3,435
|
FDIC
insurance
|
|
823
|
|
808
|
|
775
|
|
3,235
|
|
2,342
|
Other
expense1
|
|
3,993
|
|
3,668
|
|
4,470
|
|
13,783
|
|
20,283
|
Total noninterest
expense
|
|
49,967
|
|
51,511
|
|
49,447
|
|
197,152
|
|
191,590
|
Income before
income taxes
|
|
28,224
|
|
25,241
|
|
17,941
|
|
130,559
|
|
69,271
|
Income
taxes
|
|
6,095
|
|
5,976
|
|
2,283
|
|
29,325
|
|
11,688
|
Net
income
|
|
$
22,129
|
|
$
19,265
|
|
$
15,658
|
|
$
101,234
|
|
$
57,583
|
Comprehensive
income (loss)
|
|
$
9,840
|
|
$
7,581
|
|
$
18,306
|
|
$
48,506
|
|
$
81,191
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.97
|
|
0.86
|
|
0.77
|
|
1.15
|
|
0.74
|
Return on average
equity
|
|
12.10
|
|
10.26
|
|
8.58
|
|
13.76
|
|
8.11
|
Return on average
tangible common equity
|
|
13.63
|
|
11.52
|
|
9.67
|
|
15.49
|
|
9.17
|
Net interest
margin
|
|
2.79
|
|
2.90
|
|
3.12
|
|
2.91
|
|
3.29
|
Efficiency
ratio
|
|
66.86
|
|
68.66
|
|
62.83
|
|
65.31
|
|
61.47
|
Net charge-offs to
average loans outstanding
|
|
0.03
|
|
0.03
|
|
0.36
|
|
0.07
|
|
0.40
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.86
|
|
0.97
|
|
0.89
|
|
|
|
|
Allowance for credit
losses to loans outstanding
|
|
1.36
|
|
1.48
|
|
1.90
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
7.1
|
|
7.3
|
|
7.9
|
|
|
|
|
Tier-1 leverage
ratio
|
|
7.9
|
|
8.0
|
|
8.4
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
19.0
|
|
$
12.0
|
|
$
3.0
|
|
$
59.0
|
|
$
31.0
|
|
|
1
|
The fourth quarter of
2021, the third quarter of 2021 and year ended December 31, 2021
include approximately $0.1 million, $0.1 million and
$0.6 million, respectively, of certain direct and incremental
COVID-19 related costs. The fourth quarter of 2020 and year ended
December 31, 2020 include approximately $0.6 million and $5.1
million, respectively, of certain significant direct and
incremental COVID-19 related costs. For 2020, these costs, which
have been recorded in Other expense, include $2.5 million of
compensation expense and $2.0 million of enhanced cleaning and
sanitation costs.
|
|
|
|
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)
|
|
|
|
|
|
(in thousands)
|
|
December 31, 2021
|
|
December 31, 2020
|
Assets
|
|
|
|
|
Cash and due from
banks
|
|
$
100,051
|
|
$
178,422
|
Interest-bearing
deposits
|
|
151,189
|
|
114,304
|
Cash and cash
equivalents
|
|
251,240
|
|
292,726
|
Investment
securities
|
|
|
|
|
Available-for-sale, at
fair value
|
|
2,574,618
|
|
1,970,417
|
Held-to-maturity, at
amortized cost
|
|
522,270
|
|
226,947
|
Stock in Federal Home
Loan Bank, at cost
|
|
10,000
|
|
8,680
|
Loans held for
investment
|
|
5,211,114
|
|
5,333,843
|
Allowance for credit
losses
|
|
(71,130)
|
|
(101,201)
|
Net loans
|
|
5,139,984
|
|
5,232,642
|
Loans held for sale,
at lower of cost or fair value
|
|
10,404
|
|
28,275
|
Other
|
|
590,897
|
|
554,656
|
Goodwill
|
|
82,190
|
|
82,190
|
Total
assets
|
|
$
9,181,603
|
|
$
8,396,533
|
Liabilities and
shareholder's equity
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
2,976,632
|
|
$
2,598,500
|
Deposit
liabilities–interest-bearing
|
|
5,195,580
|
|
4,788,457
|
Other
borrowings
|
|
88,305
|
|
89,670
|
Other
|
|
193,268
|
|
183,731
|
Total
liabilities
|
|
8,453,785
|
|
7,660,358
|
Common
stock
|
|
1
|
|
1
|
Additional paid-in
capital
|
|
353,895
|
|
351,758
|
Retained
earnings
|
|
411,704
|
|
369,470
|
Accumulated other
comprehensive income (loss), net of taxes
|
|
|
|
|
Net unrealized gains
(losses) on securities
|
$
(32,037)
|
|
$
19,986
|
|
Retirement benefit
plans
|
(5,745)
|
(37,782)
|
(5,040)
|
14,946
|
Total shareholder's
equity
|
|
727,818
|
|
736,175
|
Total liabilities
and shareholder's equity
|
|
$
9,181,603
|
|
$
8,396,533
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI filings with the
SEC.
|
Contact:
|
Julie R.
Smolinski
|
Telephone: (808)
543-7300
|
|
Vice President,
Investor Relations & Corporate Sustainability
|
E-mail:
ir@hei.com
|
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SOURCE Hawaiian Electric Industries, Inc.