1Q22 Net Income of $69.2M and Diluted Earnings Per Share
(EPS)1 of $0.63
Utility Performing Well and Progressing
Climate Action Goals
Bank Results Reflect Solid Credit Quality,
Stable Net Interest Margin and Improving Bank
Environment
HONOLULU, May 9, 2022
/PRNewswire/ -- Hawaiian Electric Industries, Inc. (NYSE:
HE) (HEI) today reported consolidated net income for common
stock for the first quarter of 2022 of $69.2
million and EPS of $0.63 compared to $64.4 million and EPS of $0.59 for the first quarter of 2021.
"We're pleased with our consolidated first quarter results, with
solid performance across our enterprise," said Scott Seu, HEI president and CEO. "The utility
is executing well under the new performance-based regulation
framework, and continues to collaborate with partners statewide to
progress our climate change action goals. Our bank results reflect
good execution in an improving banking environment. Earning asset
yields are starting to improve, credit quality remains solid, and
the bank is managing expenses well amid its digital transformation.
We also had a gain from the sale of an investment in an electric
vehicle charging company that Pacific Current has partnered with to
expand charging stations in Hawaii.
"At the same time we're seeing the impacts of inflation and
supply chain challenges, including higher fuel prices, and we're
working hard to manage those across our companies. We know that our
communities and customers are feeling the impact of these dynamics
as well. This underscores the importance of our utility's focus on
affordability, efficiency and providing options for customers to
manage their bills, and the value of our bank's work to help meet
our customers' financial needs. It also highlights the urgent need
for us to continue working together as a state to rapidly reduce
our dependence on imported fossil fuels," said Seu.
1 Unless
otherwise indicated, throughout this release earnings per share
(EPS) refers to diluted earnings per share.
|
HAWAIIAN ELECTRIC COMPANY EARNINGS2
Hawaiian Electric Company's (Hawaiian Electric) net income for
the first quarter of 2022 was $46.4
million, compared to $43.4
million in the first quarter of 2021, with the increase
primarily driven by the following after-tax items:
- $7 million higher Annual Revenue
Adjustment revenues;
- $1 million higher revenues
related to the utility's ownership of the U.S. Army's electrical
distribution systems on Oahu,
offset by an equivalent amount of expense (included in operations
and maintenance);
- $1 million due to a reset of heat
rate requirements leading to lower penalties for fuel
efficiency;
- $1 million in higher major
project interim recovery revenues; and
- $1 million related solely to a
change in the timing for revenue recognition within the year for
Maui County operations that
eliminates seasonality in recognizing target revenues and results
in recognizing revenues evenly throughout the year, with target
revenues recognized on an annual basis remaining unchanged.
These items were partially offset by the
following after-tax items:
- $8 million in higher operations
and maintenance expenses, including $3
million driven by more generating facility overhauls and
maintenance performed and higher transmission and distribution
maintenance expense, $1 million
related to the utility's ownership of the U.S. Army's electrical
distribution systems on Oahu
(offset by an equivalent amount of revenues), and $1 million related to higher bad debt expense;
and
- $1 million higher depreciation
expense due to increasing investments to integrate more renewable
energy and improve customer reliability and system efficiency.
2
Note: Utility amounts indicated as after-tax in this earnings
release are based upon adjusting items using a current year
composite statutory tax rate of 25.75%.
|
AMERICAN SAVINGS BANK EARNINGS
American Savings Bank's (ASB) first quarter of 2022 net income
was $23.9 million, compared to
$22.1 million in the fourth quarter
of 2021 and $29.6 million in first
quarter of 2021. The increase in net income compared to the linked
quarter was primarily due to higher noninterest income and lower
noninterest expense. The decrease compared to the first quarter of
2021 was primarily due to a $3.3
million negative provision for credit losses in the first
quarter of 2022 compared to an $8.4
million negative provision for credit losses in the first
quarter of 2021.
Total earning assets as of March 31,
2022 were $8.7 billion, up
2.1% from December 31, 2021.
Total loans were $5.2 billion as
of March 31, 2022, consistent with
December 31, 2021 as lower commercial
markets, Paycheck Protection Program 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.
ASB's return on average equity3 for the first quarter
of 2022 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% at March 31, 2022.
Please refer to ASB's news release issued on April 29, 2022
for additional information on ASB.
3 Bank
return on average equity calculated using daily average common
equity.
|
HOLDING AND OTHER COMPANIES
The holding and other companies' net loss was $1.1 million in the first quarter of 2022
compared to $8.6 million in first
quarter of 2021. The lower net loss was primarily due to a gain on
sale of an equity-method investment at Pacific Current.
BOARD DECLARES QUARTERLY DIVIDEND
On May 5, 2022, HEI announced that
the Board of Directors declared a quarterly cash dividend of
$0.35 per share, payable on
June 10, 2022 to shareholders of
record at the close of business on May 20,
2022 (ex-dividend date is May 19,
2022). This quarterly dividend is equivalent to an annual
rate of $1.40 per share. Dividends
have been paid on an uninterrupted basis since 1901. At the
indicated annual dividend rate and based on the closing price per
share on May 5, 2022 of $41.40, HEI's dividend yield is 3.4%.
WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND 2022
GUIDANCE
HEI will conduct a webcast and conference call to review its
consolidated results and 2022 earnings guidance and outlook on
Monday, May 9, 2022 at 10:15 a.m. Hawaii time (4:15
p.m. Eastern).
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 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.
ABOUT HEI
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, ASB, 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.
Hawaiian Electric
Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS
OF INCOME DATA
(Unaudited)
|
|
|
Three months ended
March 31
|
(in thousands, except per share amounts)
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
Electric
utility
|
|
$
708,792
|
|
$
564,864
|
Bank
|
|
75,115
|
|
77,131
|
Other
|
|
1,161
|
|
951
|
Total revenues
|
|
785,068
|
|
642,946
|
Expenses
|
|
|
|
|
Electric
utility
|
|
635,197
|
|
495,750
|
Bank
|
|
45,085
|
|
41,835
|
Other
|
|
5,510
|
|
7,330
|
Total expenses
|
|
685,792
|
|
544,915
|
Operating income
(loss)
|
|
|
|
|
Electric
utility
|
|
73,595
|
|
69,114
|
Bank
|
|
30,030
|
|
35,296
|
Other
|
|
(4,349)
|
|
(6,379)
|
Total operating income
|
|
99,276
|
|
98,031
|
Retirement defined
benefits credit—other than service costs
|
|
1,243
|
|
2,435
|
Interest expense,
net—other than on deposit liabilities and other bank
borrowings
|
|
(24,349)
|
|
(23,736)
|
Allowance for borrowed
funds used during construction
|
|
778
|
|
747
|
Allowance for equity
funds used during construction
|
|
2,409
|
|
2,191
|
Gain on sales of
investment securities, net and equity-method investment
|
|
8,123
|
|
528
|
Income before income
taxes
|
|
87,480
|
|
80,196
|
Income taxes
|
|
17,840
|
|
15,365
|
Net
income
|
|
69,640
|
|
64,831
|
Preferred stock
dividends of subsidiaries
|
|
473
|
|
473
|
Net income for
common stock
|
|
$
69,167
|
|
$
64,358
|
Basic earnings per
common share
|
|
$
0.63
|
|
$
0.59
|
Diluted earnings per
common share
|
|
$
0.63
|
|
$
0.59
|
Dividends declared
per common share
|
|
$
0.35
|
|
$
0.34
|
Weighted-average
number of common shares outstanding
|
|
109,361
|
|
109,221
|
Weighted-average
shares assuming dilution
|
|
109,634
|
|
109,492
|
Net income (loss)
for common stock by segment
|
|
|
|
|
Electric
utility
|
|
$
46,409
|
|
$
43,358
|
Bank
|
|
23,870
|
|
29,556
|
Other
|
|
(1,112)
|
|
(8,556)
|
Net income for
common stock
|
|
$
69,167
|
|
$
64,358
|
Comprehensive income
(loss) attributable to HEI
|
|
$
(47,992)
|
|
$
20,342
|
Return on average
common equity (%) (twelve months ended)
|
|
10.9
|
|
10.0
|
|
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.
|
Hawaiian Electric
Company, Inc. (Hawaiian Electric) and Subsidiaries
CONSOLIDATED STATEMENTS
OF INCOME DATA
(Unaudited)
|
|
|
Three months ended
March 31
|
($
in thousands, except per barrel amounts)
|
|
2022
|
|
2021
|
Revenues
|
|
$
708,792
|
|
$
564,864
|
Expenses
|
|
|
|
|
Fuel oil
|
|
221,286
|
|
127,427
|
Purchased
power
|
|
163,533
|
|
142,296
|
Other operation and
maintenance
|
|
125,257
|
|
114,570
|
Depreciation
|
|
58,471
|
|
57,355
|
Taxes, other than
income taxes
|
|
66,650
|
|
54,102
|
Total expenses
|
|
635,197
|
|
495,750
|
Operating
income
|
|
73,595
|
|
69,114
|
Allowance for equity
funds used during construction
|
|
2,409
|
|
2,191
|
Retirement defined
benefits credit—other than service costs
|
|
990
|
|
1,021
|
Interest expense and
other charges, net
|
|
(18,326)
|
|
(17,983)
|
Allowance for borrowed
funds used during construction
|
|
778
|
|
747
|
Income before income
taxes
|
|
59,446
|
|
55,090
|
Income taxes
|
|
12,538
|
|
11,233
|
Net
income
|
|
46,908
|
|
43,857
|
Preferred stock
dividends of subsidiaries
|
|
229
|
|
229
|
Net income
attributable to Hawaiian Electric
|
|
46,679
|
|
43,628
|
Preferred stock
dividends of Hawaiian Electric
|
|
270
|
|
270
|
Net income for
common stock
|
|
$
46,409
|
|
$
43,358
|
Comprehensive income
attributable to Hawaiian Electric
|
|
$
46,460
|
|
$
43,392
|
OTHER ELECTRIC UTILITY
INFORMATION
|
|
|
|
|
Kilowatthour sales
(millions)
|
|
|
|
|
Hawaiian
Electric
|
|
1,448
|
|
1,428
|
Hawaii
Electric Light
|
|
254
|
|
245
|
Maui
Electric
|
|
255
|
|
236
|
|
|
1,957
|
|
1,909
|
Average fuel oil cost
per barrel
|
|
$
103.40
|
|
$
63.87
|
Return on average
common equity (%) (twelve months ended)1
|
|
8.1
|
|
9.0
|
1
Simple average.
|
|
This information should
be read in conjunction with the consolidated financial statements
and the notes thereto in Hawaiian
Electric 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.
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.
|
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.