2Q22 Net Income of $52.5M and Diluted Earnings Per Share
(EPS)1 of $0.48
Utility Performing Well Despite
Inflationary Environment
Bank Results Reflect
Strong Loan Growth, Expanding Net Interest Margin, Favorable Credit
Trends and More Normalized Provision
HONOLULU, Aug. 8, 2022
/PRNewswire/ -- Hawaiian Electric Industries, Inc. (NYSE: HE)
(HEI) today reported consolidated net income for common stock for
the second quarter of 2022 of $52.5
million and EPS of $0.48 compared to $63.9 million and EPS of $0.58 for the second quarter of 2021. The
lower net income was due primarily to the prior year's negative
provision for credit losses at American Savings Bank, and the
return to a more normalized provision expense due to strong loan
growth.
"Our consolidated second quarter results reflect solid
performance across our enterprise," said Scott Seu, HEI president and CEO. "The utility
continues to execute well under performance-based regulation, and
will continue to focus on cost control to moderate the impacts of
inflation and high fuel costs on customer bills. We did see higher
maintenance expenses due to purposeful acceleration of work on our
generating units to reduce downtimes and ensure reliable service to
our customers as we completely transition off of coal and one of
the largest power plants in the state on September 1. Our bank results reflect good
execution from the team and an earnings level that is driven by a
more normalized provision in comparison to recent periods. The bank
saw strong loan growth during the quarter, and credit quality is
trending favorably. Our bank continues to progress its digital
transformation, and launched Zelle during the quarter, providing a
fast and easy way for customers to send and receive money.
"We know that our communities and customers are feeling
financially challenged, and we are continuing to provide options to
help manage their utility bills, while our bank continues working
to help meet customers' financial needs," said Seu.
1 Unless otherwise indicated, throughout this release
earnings per share (EPS) refers to diluted earnings per share.
HAWAIIAN ELECTRIC COMPANY (HAWAIIAN ELECTRIC)
EARNINGS2
Hawaiian Electric's net income
for the second quarter of 2022 was $44.1
million, compared to $41.9
million in the second quarter of 2021, with the increase
primarily driven by the following after-tax items:
- $7 million higher Annual Revenue
Adjustment revenues;
- $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;
and
- $1 million in higher major
project interim recovery revenues related to grid
modernization.
These items were partially offset by the following after-tax
items:
- $5 million in higher operations
and maintenance expenses, including $6
million driven by more generating facility overhauls and
maintenance performed and $1 million
related to higher bad debt expense, partially offset by
$2 million in lower expenses compared
to last year from (i) last year's write-off due to termination of
an agreement relating to a combined heat and power unit and (ii)
higher 2021 expenses for environmental reserves;
- $1 million higher depreciation
expense due to increasing investments to integrate more renewable
energy and improve customer reliability and system efficiency;
and
- $1 million in higher interest
expense.
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 (ASB) EARNINGS
ASB's second
quarter of 2022 net income was $17.5
million, compared to $23.9
million in the first quarter of 2022 and $30.3 million in second quarter of 2021. The
decrease in net income compared to the linked and prior year
quarters primarily reflected a return to a more normalized
provision due to strong loan growth, following five consecutive
quarters of provision releases.
Total earning assets as of June 30,
2022 were $8.7 billion, up
2.6% from December 31, 2021.
Total loans were $5.4 billion as
of June 30, 2022, up 4.2% from
December 31, 2021, reflecting growth
across nearly the entire portfolio and driven by strong growth in
commercial real estate loans.
Total deposits were $8.3 billion
as of June 30, 2022, an increase of
1.0% from December 31, 2021. For the
second quarter of 2022, the average cost of funds was 0.05%, flat
versus the linked quarter and down two basis points versus the same
quarter last
year.
ASB's return on average equity3 for the second
quarter of 2022 was 12.2%, compared to 13.7% in the linked quarter
and 16.8% in the second quarter of 2021. Return on average assets
was 0.76% for the second quarter of 2022, compared to 1.04% in the
linked quarter and 1.38% in the same quarter last year.
In the second quarter of 2022, ASB paid dividends of
$12.0 million to HEI. ASB had a Tier
1 leverage ratio of 7.7% as of June 30,
2022.
3 Bank return on average equity calculated using
daily average common equity.
HOLDING AND OTHER COMPANIES
The holding and other
companies' net loss was $9.1 million
in the second quarter of 2022 compared to $8.3 million in the second quarter of 2021. The
higher net loss was primarily due to higher interest expense,
principally due to higher borrowings, and higher general and
administrative expenses, including higher charitable contributions
(due to timing), partially offset by increased charitable
contribution expense in the second quarter of 2021 related to a
settlement agreement associated with an executive transition.
BOARD DECLARES QUARTERLY DIVIDEND
On August 4, 2022, HEI announced that the Board of
Directors declared a quarterly cash dividend of $0.35 per share, payable on September 9, 2022 to shareholders of record at
the close of business on August 18,
2022 (ex-dividend date is August 17,
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 August 4, 2022 of
$42.51, HEI's dividend yield is
3.3%.
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, August 8, 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 638186. 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 August 22,
2022. To access the audio replay, dial 1-866-813-9403 (U.S.)
or +44-204-525-0658 (international) and enter passcode 484022.
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
June 30
|
|
Six months ended
June 30
|
(in thousands, except per share amounts)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
$ 818,873
|
|
$ 601,879
|
|
$
1,527,665
|
|
$
1,166,743
|
Bank
|
|
75,324
|
|
77,260
|
|
150,439
|
|
154,391
|
Other
|
|
1,410
|
|
1,118
|
|
2,571
|
|
2,069
|
Total
revenues
|
|
895,607
|
|
680,257
|
|
1,680,675
|
|
1,323,203
|
Expenses
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
747,719
|
|
534,195
|
|
1,382,916
|
|
1,029,945
|
Bank
|
|
53,401
|
|
37,454
|
|
98,486
|
|
79,289
|
Other
|
|
7,819
|
|
6,752
|
|
13,329
|
|
14,082
|
Total
expenses
|
|
808,939
|
|
578,401
|
|
1,494,731
|
|
1,123,316
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
71,154
|
|
67,684
|
|
144,749
|
|
136,798
|
Bank
|
|
21,923
|
|
39,806
|
|
51,953
|
|
75,102
|
Other
|
|
(6,409)
|
|
(5,634)
|
|
(10,758)
|
|
(12,013)
|
Total operating
income
|
|
86,668
|
|
101,856
|
|
185,944
|
|
199,887
|
Retirement defined
benefits credit—other than service costs
|
|
1,246
|
|
1,216
|
|
2,489
|
|
3,651
|
Interest expense,
net—other than on deposit liabilities and other bank
borrowings
|
|
(24,965)
|
|
(23,317)
|
|
(49,314)
|
|
(47,053)
|
Allowance for borrowed
funds used during construction
|
|
798
|
|
812
|
|
1,576
|
|
1,559
|
Allowance for equity
funds used during construction
|
|
2,470
|
|
2,377
|
|
4,879
|
|
4,568
|
Gain on sales of
investment securities, net and equity-method investment
|
|
—
|
|
—
|
|
8,123
|
|
528
|
Income before income
taxes
|
|
66,217
|
|
82,944
|
|
153,697
|
|
163,140
|
Income taxes
|
|
13,203
|
|
18,599
|
|
31,043
|
|
33,964
|
Net
income
|
|
53,014
|
|
64,345
|
|
122,654
|
|
129,176
|
Preferred stock
dividends of subsidiaries
|
|
473
|
|
473
|
|
946
|
|
946
|
Net income for
common stock
|
|
$
52,541
|
|
$
63,872
|
|
$
121,708
|
|
$
128,230
|
Basic earnings per
common share
|
|
$
0.48
|
|
$
0.58
|
|
$
1.11
|
|
$
1.17
|
Diluted earnings per
common share
|
|
$
0.48
|
|
$
0.58
|
|
$
1.11
|
|
$
1.17
|
Dividends declared
per common share
|
|
$
0.35
|
|
$
0.34
|
|
$
0.70
|
|
$
0.68
|
Weighted-average
number of common shares outstanding
|
|
109,432
|
|
109,282
|
|
109,397
|
|
109,252
|
Weighted-average
shares assuming dilution
|
|
109,662
|
|
109,515
|
|
109,714
|
|
109,557
|
Net income (loss)
for common stock by segment
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
$
44,135
|
|
$
41,901
|
|
$
90,544
|
|
$
85,259
|
Bank
|
|
17,466
|
|
30,284
|
|
41,336
|
|
59,840
|
Other
|
|
(9,060)
|
|
(8,313)
|
|
(10,172)
|
|
(16,869)
|
Net income for
common stock
|
|
$
52,541
|
|
$
63,872
|
|
$
121,708
|
|
$
128,230
|
Comprehensive income
(loss) attributable to HEI
|
|
$
(35,299)
|
|
$
80,344
|
|
$
(83,291)
|
|
$ 100,686
|
Return on average
common equity (%) (twelve months ended)
|
|
|
|
|
|
10.4
|
|
10.5
|
|
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
June 30
|
|
Six months ended
June 30
|
($
in thousands, except per barrel amounts)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
$ 818,873
|
|
$ 601,879
|
|
$
1,527,665
|
|
$
1,166,743
|
Expenses
|
|
|
|
|
|
|
|
|
Fuel oil
|
|
269,655
|
|
139,136
|
|
490,941
|
|
266,563
|
Purchased
power
|
|
218,085
|
|
162,465
|
|
381,618
|
|
304,761
|
Other operation and
maintenance
|
|
124,892
|
|
118,142
|
|
250,149
|
|
232,712
|
Depreciation
|
|
58,739
|
|
57,381
|
|
117,210
|
|
114,736
|
Taxes, other than
income taxes
|
|
76,348
|
|
57,071
|
|
142,998
|
|
111,173
|
Total
expenses
|
|
747,719
|
|
534,195
|
|
1,382,916
|
|
1,029,945
|
Operating
income
|
|
71,154
|
|
67,684
|
|
144,749
|
|
136,798
|
Allowance for equity
funds used during construction
|
|
2,470
|
|
2,377
|
|
4,879
|
|
4,568
|
Retirement defined
benefits credit—other than service costs
|
|
991
|
|
1,020
|
|
1,981
|
|
2,041
|
Interest expense and
other charges, net
|
|
(18,800)
|
|
(17,995)
|
|
(37,126)
|
|
(35,978)
|
Allowance for borrowed
funds used during construction
|
|
798
|
|
812
|
|
1,576
|
|
1,559
|
Income before income
taxes
|
|
56,613
|
|
53,898
|
|
116,059
|
|
108,988
|
Income taxes
|
|
11,979
|
|
11,498
|
|
24,517
|
|
22,731
|
Net
income
|
|
44,634
|
|
42,400
|
|
91,542
|
|
86,257
|
Preferred stock
dividends of subsidiaries
|
|
229
|
|
229
|
|
458
|
|
458
|
Net income
attributable to Hawaiian Electric
|
|
44,405
|
|
42,171
|
|
91,084
|
|
85,799
|
Preferred stock
dividends of Hawaiian Electric
|
|
270
|
|
270
|
|
540
|
|
540
|
Net income for
common stock
|
|
$
44,135
|
|
$
41,901
|
|
$
90,544
|
|
$
85,259
|
Comprehensive income
attributable to Hawaiian Electric
|
|
$
44,186
|
|
$
41,936
|
|
$
90,646
|
|
$
85,328
|
OTHER ELECTRIC UTILITY
INFORMATION
|
|
|
|
|
|
|
|
|
Kilowatthour sales
(millions)
|
|
|
|
|
|
|
|
|
Hawaiian
Electric
|
|
1,506
|
|
1,514
|
|
2,954
|
|
2,942
|
Hawaii
Electric Light
|
|
261
|
|
256
|
|
515
|
|
501
|
Maui
Electric
|
|
264
|
|
256
|
|
519
|
|
492
|
|
|
2,031
|
|
2,026
|
|
3,988
|
|
3,935
|
Average fuel oil cost
per barrel
|
|
$
139.51
|
|
$
73.58
|
|
$
120.54
|
|
$
68.59
|
Return on average
common equity (%) (twelve months ended)1
|
|
|
|
|
|
8.2
|
|
8.9
|
|
|
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
|
|
Six months ended June
30
|
(in thousands)
|
|
June 30,
2022
|
|
March 31,
2022
|
|
June 30,
2021
|
|
2022
|
|
2021
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
48,129
|
|
$
46,005
|
|
$
51,026
|
|
$
94,134
|
|
$
100,973
|
Interest and dividends
on investment securities
|
|
14,693
|
|
13,984
|
|
11,040
|
|
28,677
|
|
19,713
|
Total interest and
dividend income
|
|
62,822
|
|
59,989
|
|
62,066
|
|
122,811
|
|
120,686
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
921
|
|
947
|
|
1,281
|
|
1,868
|
|
2,743
|
Interest on other
borrowings
|
|
139
|
|
5
|
|
23
|
|
144
|
|
50
|
Total interest
expense
|
|
1,060
|
|
952
|
|
1,304
|
|
2,012
|
|
2,793
|
Net interest
income
|
|
61,762
|
|
59,037
|
|
60,762
|
|
120,799
|
|
117,893
|
Provision for credit
losses
|
|
2,757
|
|
(3,263)
|
|
(12,207)
|
|
(506)
|
|
(20,642)
|
Net interest income
after provision for credit losses
|
|
59,005
|
|
62,300
|
|
72,969
|
|
121,305
|
|
138,535
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
4,716
|
|
5,587
|
|
5,464
|
|
10,303
|
|
10,537
|
Fee income on deposit
liabilities
|
|
4,552
|
|
4,691
|
|
3,904
|
|
9,243
|
|
7,767
|
Fee income on other
financial products
|
|
2,529
|
|
2,718
|
|
2,201
|
|
5,247
|
|
4,643
|
Bank-owned life
insurance
|
|
(142)
|
|
681
|
|
1,624
|
|
539
|
|
4,185
|
Mortgage banking
income
|
|
372
|
|
1,077
|
|
1,925
|
|
1,449
|
|
6,225
|
Gain on sale of real
estate
|
|
—
|
|
1,002
|
|
—
|
|
1,002
|
|
—
|
Gain on sale of
investment securities, net
|
|
—
|
|
—
|
|
—
|
|
—
|
|
528
|
Other income,
net
|
|
475
|
|
372
|
|
76
|
|
847
|
|
348
|
Total noninterest
income
|
|
12,502
|
|
16,128
|
|
15,194
|
|
28,630
|
|
34,233
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
27,666
|
|
27,215
|
|
27,670
|
|
54,881
|
|
55,707
|
Occupancy
|
|
5,467
|
|
5,952
|
|
5,100
|
|
11,419
|
|
10,069
|
Data
processing
|
|
4,484
|
|
4,151
|
|
4,533
|
|
8,635
|
|
8,884
|
Services
|
|
2,522
|
|
2,439
|
|
2,475
|
|
4,961
|
|
5,337
|
Equipment
|
|
2,402
|
|
2,329
|
|
2,394
|
|
4,731
|
|
4,616
|
Office supplies,
printing and postage
|
|
1,073
|
|
1,060
|
|
978
|
|
2,133
|
|
2,022
|
Marketing
|
|
934
|
|
1,018
|
|
665
|
|
1,952
|
|
1,313
|
FDIC
insurance
|
|
891
|
|
808
|
|
788
|
|
1,699
|
|
1,604
|
Other
expense
|
|
3,959
|
|
3,241
|
|
3,568
|
|
7,200
|
|
6,122
|
Total noninterest
expense
|
|
49,398
|
|
48,213
|
|
48,171
|
|
97,611
|
|
95,674
|
Income before income
taxes
|
|
22,109
|
|
30,215
|
|
39,992
|
|
52,324
|
|
77,094
|
Income taxes
|
|
4,643
|
|
6,345
|
|
9,708
|
|
10,988
|
|
17,254
|
Net
income
|
|
$
17,466
|
|
$
23,870
|
|
$
30,284
|
|
$
41,336
|
|
$
59,840
|
Comprehensive income
(loss)
|
|
$
(71,369)
|
|
$
(98,571)
|
|
$
47,283
|
|
$
(169,940)
|
|
$
31,085
|
OTHER BANK INFORMATION
(annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.76
|
|
1.04
|
|
1.38
|
|
0.90
|
|
1.39
|
Return on average
equity
|
|
12.17
|
|
13.70
|
|
16.76
|
|
13.01
|
|
16.40
|
Return on average
tangible common equity
|
|
14.20
|
|
15.53
|
|
18.92
|
|
14.95
|
|
18.48
|
Net interest
margin
|
|
2.85
|
|
2.79
|
|
2.98
|
|
2.82
|
|
2.97
|
Efficiency
ratio
|
|
66.52
|
|
64.14
|
|
63.42
|
|
65.32
|
|
62.89
|
Net charge-offs to
average loans outstanding
|
|
0.00
|
|
0.01
|
|
0.04
|
|
0.01
|
|
0.11
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.40
|
|
0.72
|
|
1.03
|
|
|
|
|
Allowance for credit
losses to loans outstanding
|
|
1.28
|
|
1.30
|
|
1.51
|
|
|
|
|
Tangible common equity
to tangible assets
|
|
4.9
|
|
5.8
|
|
7.5
|
|
|
|
|
Tier-1 leverage
ratio
|
|
7.7
|
|
7.8
|
|
8.0
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
12.0
|
|
$
15.0
|
|
$
23.0
|
|
$
27.0
|
|
$
28.0
|
|
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
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/hei-reports-second-quarter-2022-results-301601330.html
SOURCE Hawaiian Electric Industries, Inc.