1Q 2022 Net Income of $23.9 million
Solid Credit Quality, Stable Net Interest Margin
and Improving Bank Environment
HONOLULU, April 29, 2022 /PRNewswire/ -- American Savings
Bank, F.S.B. (ASB), a wholly owned subsidiary of Hawaiian Electric
Industries, Inc. (NYSE: HE), today reported first quarter
2022 net income of $23.9 million,
compared to $22.1 million in the
fourth, or linked quarter of 2021 and $29.6
million in the first quarter of 2021.
"Our results reflect good execution in an improving banking
environment," said Ann Teranishi,
president and chief executive officer of American Savings Bank.
"Earning asset yields are starting to improve as a result of the
rising interest rate environment, while credit quality remains
solid, with tailwinds from Hawaii's recovering economy. We're continuing
our digital transformation, and as we do so are focused on making
banking easy anytime and anywhere while delivering the exceptional
personal service our customers rely on," said Teranishi.
Financial Highlights
First quarter 2022 net interest income of $59.0 million reflected higher yields in the
investment portfolio partially offset by lower fee income
associated with the Paycheck Protection Program (PPP) portfolio as
the loans continued to pay down. Net interest income increased
versus the $57.1 million generated in
the first quarter of 2021, primarily due to higher average earning
assets driven by increased liquidity from strong deposit growth and
higher investment yields. Net interest margin was 2.79% in the
first quarter, consistent with the linked quarter and down from
2.95% in the first quarter last year.
In the first quarter of 2022 ASB recorded a negative provision
for credit losses of $3.3 million
compared to a negative provision for credit losses of $3.5 million in the linked quarter and
$8.4 million in the first quarter of
2021. The negative provision in the first quarter of 2022 reflected
favorable credit trends including a release of reserves driven by
the paydown of a nonperforming loan, as well as an improvement in
credit quality including credit upgrades within the commercial real
estate portfolio. As of March 31, 2022, ASB's allowance for
credit losses to outstanding loans was 1.30% compared to 1.36% as
of December 31, 2021 and 1.73% as of
March 31, 2021.
The net charge-off ratio for the first quarter of 2022 was 0.01%
compared to 0.03% in the linked quarter and 0.18% in the first
quarter of 2021. Nonaccrual loans as a percent of total loans
receivable held for investment were 0.72% in the first quarter of
2022, compared to 0.86% in the linked quarter and 1.00% in the
prior year quarter.
Noninterest income was $16.1
million in the first quarter of 2022 compared to
$15.7 million in the linked quarter
and $19.0 million in the first
quarter of 2021. The increase compared to the linked quarter was
primarily due to a gain on sale of real estate and higher fee
income. The decrease in noninterest income compared to the prior
year quarter was primarily due to lower mortgage banking income as
loan volume and profit margin on sale of loans decreased in the
rising interest rate environment.
Noninterest expense was $48.2
million compared to $50.0
million in the linked quarter and $47.5 million in the first quarter of 2021. The
decrease in noninterest expense versus the linked quarter was
primarily due to timing of expenses. The increase in noninterest
expense versus the same quarter last year was primarily due to a
pension accounting change that resulted in a lower pension expense
in the first quarter of 2021.
Total loans were $5.2 billion as
of March 31, 2022, consistent with December 31, 2021 as
lower commercial markets, PPP and residential loan balances were
offset by higher loan balances across the remainder of the loan
portfolio, primarily in commercial real
estate.
Total deposits were $8.3 billion
as of March 31, 2022, an increase of 1.4% from
December 31, 2021. For the first quarter of 2022, the average
cost of funds was 0.05%, flat versus the linked quarter and down
three basis points versus the same quarter last year.
For the first quarter of 2022 return on average equity was 13.7%
compared to 12.1% in the linked quarter and 16.0% in the first
quarter of 2021. Return on average assets was 1.04% for the first
quarter of 2022, compared to 0.97% in the linked quarter and 1.40%
in the same quarter last year.
In the first quarter of 2022, ASB paid dividends of $15.0 million to HEI. ASB had a Tier 1 leverage
ratio of 7.8% as of March 31, 2022.
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO
DISCUSS EARNINGS AND 2022 GUIDANCE
Concurrent with ASB's regulatory filing 30 days after the end of
the quarter, ASB announced its first quarter 2022 financial results
today. Please note that these reported results relate only to ASB
and are not necessarily indicative of HEI's consolidated financial
results for the first quarter 2022.
HEI plans to announce its first quarter 2022 consolidated
financial results on Monday, May 9,
2022 and will also conduct a webcast and conference call at
10:15 a.m. Hawaii time (4:15 p.m. Eastern time) that
same day to discuss its consolidated earnings, including ASB'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 275546. 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 May 23, 2022.
To access the audio replay, dial 1-866-813-9403 (U.S.) or
44-204-525-0658 (international) and enter passcode 477148.
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 ASB'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, 2021
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, ASB 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
|
(in thousands)
|
|
March 31,
2022
|
|
December
31,
2021
|
|
March 31,
2021
|
Interest and
dividend income
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
46,005
|
|
$
48,384
|
|
$
49,947
|
Interest and
dividends on investment securities
|
|
13,984
|
|
11,755
|
|
8,673
|
Total interest and
dividend income
|
|
59,989
|
|
60,139
|
|
58,620
|
Interest
expense
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
947
|
|
1,062
|
|
1,462
|
Interest on other
borrowings
|
|
5
|
|
4
|
|
27
|
Total interest
expense
|
|
952
|
|
1,066
|
|
1,489
|
Net interest
income
|
|
59,037
|
|
59,073
|
|
57,131
|
Provision for credit
losses
|
|
(3,263)
|
|
(3,458)
|
|
(8,435)
|
Net interest
income after provision for credit losses
|
|
62,300
|
|
62,531
|
|
65,566
|
Noninterest
income
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,587
|
|
5,888
|
|
5,073
|
Fee income on deposit
liabilities
|
|
4,691
|
|
4,634
|
|
3,863
|
Fee income on other
financial products
|
|
2,718
|
|
2,003
|
|
2,442
|
Bank-owned life
insurance
|
|
681
|
|
1,107
|
|
2,561
|
Mortgage banking
income
|
|
1,077
|
|
1,808
|
|
4,300
|
Gain on sale of real
estate
|
|
1,002
|
|
—
|
|
—
|
Gain on sale of
investment securities, net
|
|
—
|
|
—
|
|
528
|
Other income,
net
|
|
372
|
|
220
|
|
272
|
Total noninterest
income
|
|
16,128
|
|
15,660
|
|
19,039
|
Noninterest
expense
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
27,215
|
|
27,375
|
|
28,037
|
Occupancy
|
|
5,952
|
|
5,358
|
|
4,969
|
Data
processing
|
|
4,151
|
|
4,472
|
|
4,351
|
Services
|
|
2,439
|
|
2,718
|
|
2,862
|
Equipment
|
|
2,329
|
|
2,521
|
|
2,222
|
Office supplies,
printing and postage
|
|
1,060
|
|
1,145
|
|
1,044
|
Marketing
|
|
1,018
|
|
1,562
|
|
648
|
FDIC
insurance
|
|
808
|
|
823
|
|
816
|
Other
expense
|
|
3,241
|
|
3,993
|
|
2,554
|
Total noninterest
expense
|
|
48,213
|
|
49,967
|
|
47,503
|
Income before
income taxes
|
|
30,215
|
|
28,224
|
|
37,102
|
Income
taxes
|
|
6,345
|
|
6,095
|
|
7,546
|
Net
income
|
|
$
23,870
|
|
$
22,129
|
|
$
29,556
|
Comprehensive
income (loss)
|
|
$
(98,571)
|
|
$
9,840
|
|
$
(16,198)
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
Return on average
assets
|
|
1.04
|
|
0.97
|
|
1.40
|
Return on average
equity
|
|
13.70
|
|
12.10
|
|
16.04
|
Return on average
tangible common equity
|
|
15.53
|
|
13.63
|
|
18.06
|
Net interest
margin
|
|
2.79
|
|
2.79
|
|
2.95
|
Efficiency
ratio
|
|
64.14
|
|
66.86
|
|
62.36
|
Net charge-offs to
average loans outstanding
|
|
0.01
|
|
0.03
|
|
0.18
|
As of period
end
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.72
|
|
0.86
|
|
1.00
|
Allowance for credit
losses to loans outstanding
|
|
1.30
|
|
1.36
|
|
1.73
|
Tangible common
equity to tangible assets
|
|
5.8
|
|
7.1
|
|
7.3
|
Tier-1 leverage
ratio
|
|
7.8
|
|
7.9
|
|
8.3
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
15.0
|
|
$
19.0
|
|
$
5.0
|
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)
|
March 31,
2022
|
December 31,
2021
|
Assets
|
|
|
|
|
Cash and due from
banks
|
|
$
114,249
|
|
$
100,051
|
Interest-bearing
deposits
|
|
155,279
|
|
151,189
|
Cash and cash
equivalents
|
|
269,528
|
|
251,240
|
Investment
securities
|
|
|
|
|
Available-for-sale, at
fair value
|
|
2,621,375
|
|
2,574,618
|
Held-to-maturity, at
amortized cost
|
|
517,150
|
|
522,270
|
Stock in Federal Home
Loan Bank, at cost
|
|
10,000
|
|
10,000
|
Loans held for
investment
|
|
5,184,733
|
|
5,211,114
|
Allowance for credit
losses
|
|
(67,211)
|
|
(71,130)
|
Net loans
|
|
5,117,522
|
|
5,139,984
|
Loans held for sale,
at lower of cost or fair value
|
|
7,961
|
|
10,404
|
Other
|
|
626,599
|
|
590,897
|
Goodwill
|
|
82,190
|
|
82,190
|
Total
assets
|
|
$
9,252,325
|
|
$
9,181,603
|
Liabilities and
shareholder's equity
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
3,016,520
|
|
$
2,976,632
|
Deposit
liabilities–interest-bearing
|
|
5,272,752
|
|
5,195,580
|
Other
borrowings
|
|
137,385
|
|
88,305
|
Other
|
|
210,681
|
|
193,268
|
Total
liabilities
|
|
8,637,338
|
|
8,453,785
|
Common
stock
|
|
1
|
|
1
|
Additional paid-in
capital
|
|
354,635
|
|
353,895
|
Retained
earnings
|
|
420,574
|
|
411,704
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
Net unrealized losses on
securities
|
$
(152,444)
|
|
$
(32,037)
|
|
Retirement benefit
plans
|
(7,779)
|
(160,223)
|
(5,745)
|
(37,782)
|
Total shareholder's
equity
|
|
614,987
|
|
727,818
|
Total liabilities
and shareholder's equity
|
|
$
9,252,325
|
|
$
9,181,603
|
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.