3Q22 Net Income of $62.1M and Diluted Earnings Per Share
(EPS)1 of $0.57
Utility Performance Steady Despite
Inflationary Environment
Strong Bank Results Reflect Continued Net
Interest Margin Expansion, Strong Loan Growth and Favorable Credit
Trends
HONOLULU, Nov. 7, 2022
/PRNewswire/ -- Hawaiian Electric Industries, Inc. (NYSE:
HE) (HEI) today reported consolidated net income for common
stock for the third quarter of 2022 of $62.1
million and EPS of $0.57 compared to $63.4 million and EPS of $0.58 for the third quarter of 2021.
"Hawaii's economy continues to
show signs of strength, with unemployment, housing prices and
tourism arrivals still trending favorably despite global macro
uncertainties," said Scott Seu, HEI
president and CEO. "We're pleased with our consolidated third
quarter results, which reflect good performance across our
enterprise and the benefits of our combination of companies. The
utility successfully mitigated many of the impacts of the current
higher cost environment and continued its strong progress in our
clean energy transition.
"Our bank had another strong quarter. We again had broad-based
loan growth, reflecting great work by our team along with the
health of the local economy. We continued to see positive credit
trends despite the inflationary environment, and rising interest
rates continued to benefit our net interest margin and overall
profitability," said Seu.
HAWAIIAN ELECTRIC COMPANY (HAWAIIAN ELECTRIC)
EARNINGS2
Hawaiian Electric's net income
for the third quarter of 2022 was $49.8
million, compared to $50.3
million in the third quarter of 2021, with the variance
primarily driven by the following after-tax items:
- $6 million higher Annual Revenue
Adjustment revenues; and
- $1 million due to the reset of
heat rate requirements leading to lower penalties for fuel
efficiency at our Hawaii Island utility.
These items were partially offset by the following after-tax
items:
- $2 million in net tax adjustments
due to tax credit benefits recognized in the third quarter of last
year;
- $2 million in higher operations
and maintenance expenses, driven by increased generating station
maintenance, increased preventative maintenance and higher bad debt
expense, partially offset by higher expenses from generating
station overhauls performed in the third quarter of last year;
- $1 million in lower revenues
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;
- $1 million higher interest
expense due to higher rates and balances; and
- $1 million higher depreciation
expense due to increasing investments to integrate more renewable
energy and improve customer reliability and system efficiency.
AMERICAN SAVINGS BANK (ASB) EARNINGS
ASB's third
quarter 2022 net income was $20.8
million, compared to $17.5
million in the second quarter of 2022 and $19.3 million in the third quarter of 2021. The
increase in net income compared to the linked quarter primarily
reflected higher net interest income due to the rising interest
rate environment and a negative provision expense recorded in the
third quarter. The increase in net income compared to the prior
year quarter was primarily due to higher net interest income,
partially offset by a smaller negative provision and lower
noninterest income.
Total earning assets as of September 30,
2022 were $8.9 billion, up
4.7% from December 31, 2021.
Total loans were $5.7 billion as
of September 30, 2022, up 9.3% from
December 31, 2021, reflecting growth
across nearly the entire portfolio year to date.
Total deposits were $8.3 billion
as of September 30, 2022, an increase
of 1.1% from December 31, 2021. For
the third quarter of 2022, the average cost of funds was 0.13%, up
0.08% versus the linked quarter and up 0.07% versus the third
quarter last year.
ASB's return on average equity3 for the third quarter
of 2022 was 15.1%, compared to 12.2% in the linked quarter and
10.3% in the third quarter of 2021. Return on average assets was
0.89% for the third quarter of 2022, compared to 0.76% in the
linked quarter and 0.86% in the same quarter last year.
In the third quarter of 2022, ASB paid dividends of $5.0 million to HEI. ASB had a Tier 1 leverage
ratio of 7.75% as of September 30,
2022.
HOLDING AND OTHER COMPANIES
The holding and other
companies' net loss was $8.4 million
in the third quarter of 2022 compared to $6.2 million in the third quarter of 2021. The
higher net loss was primarily due to higher interest expense and
higher general and administrative expenses.
BOARD DECLARES QUARTERLY DIVIDEND
On November 3, 2022, HEI announced that the Board of
Directors declared a quarterly cash dividend of $0.35 per share, payable on December 9, 2022 to shareholders of record at the
close of business on November 22,
2022 (ex-dividend date is November
21, 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 November 3, 2022 of
$37.27, HEI's dividend yield is
3.8%.
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, November 7, 2022
at 11:15 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 162868. 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 November 21,
2022. To access the audio replay, dial 1-866-813-9403 (U.S.)
or +44-204-525-0658 (international) and enter passcode 881525.
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
September 30
|
|
Nine months
ended
September 30
|
(in thousands, except per share amounts)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
$ 955,971
|
|
$ 679,499
|
|
$
2,483,636
|
|
$
1,846,242
|
Bank
|
|
81,411
|
|
76,208
|
|
231,850
|
|
230,599
|
Other
|
|
4,815
|
|
1,197
|
|
7,386
|
|
3,266
|
Total
revenues
|
|
1,042,197
|
|
756,904
|
|
2,722,872
|
|
2,080,107
|
Expenses
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
876,922
|
|
604,307
|
|
2,259,838
|
|
1,634,252
|
Bank
|
|
54,311
|
|
51,151
|
|
152,797
|
|
130,440
|
Other
|
|
8,849
|
|
4,130
|
|
22,178
|
|
18,212
|
Total
expenses
|
|
940,082
|
|
659,588
|
|
2,434,813
|
|
1,782,904
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
79,049
|
|
75,192
|
|
223,798
|
|
211,990
|
Bank
|
|
27,100
|
|
25,057
|
|
79,053
|
|
100,159
|
Other
|
|
(4,034)
|
|
(2,933)
|
|
(14,792)
|
|
(14,946)
|
Total operating
income
|
|
102,115
|
|
97,316
|
|
288,059
|
|
297,203
|
Retirement defined
benefits credit—other than service costs
|
|
1,039
|
|
1,058
|
|
3,528
|
|
4,709
|
Interest expense,
net—other than on deposit liabilities and other
bank borrowings
|
|
(26,626)
|
|
(23,477)
|
|
(75,940)
|
|
(70,530)
|
Allowance for borrowed
funds used during construction
|
|
825
|
|
827
|
|
2,401
|
|
2,386
|
Allowance for equity
funds used during construction
|
|
2,552
|
|
2,427
|
|
7,431
|
|
6,995
|
Gain on sales of
investment securities, net and equity-method
investment
|
|
—
|
|
—
|
|
8,123
|
|
528
|
Income before income
taxes
|
|
79,905
|
|
78,151
|
|
233,602
|
|
241,291
|
Income taxes
|
|
17,352
|
|
14,265
|
|
48,395
|
|
48,229
|
Net
income
|
|
62,553
|
|
63,886
|
|
185,207
|
|
193,062
|
Preferred stock
dividends of subsidiaries
|
|
471
|
|
471
|
|
1,417
|
|
1,417
|
Net income for
common stock
|
|
$
62,082
|
|
$
63,415
|
|
$
183,790
|
|
$
191,645
|
Basic earnings per
common share
|
|
$
0.57
|
|
$
0.58
|
|
$
1.68
|
|
$
1.75
|
Diluted earnings per
common share
|
|
$
0.57
|
|
$
0.58
|
|
$
1.68
|
|
$
1.75
|
Dividends declared
per common share
|
|
$
0.35
|
|
$
0.34
|
|
$
1.05
|
|
$
1.02
|
Weighted-average
number of common shares outstanding
|
|
109,470
|
|
109,311
|
|
109,421
|
|
109,272
|
Weighted-average
shares assuming dilution
|
|
109,705
|
|
109,575
|
|
109,712
|
|
109,588
|
Net income (loss)
for common stock by segment
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
$
49,764
|
|
$
50,342
|
|
$ 140,308
|
|
$ 135,601
|
Bank
|
|
20,756
|
|
19,265
|
|
62,092
|
|
79,105
|
Other
|
|
(8,438)
|
|
(6,192)
|
|
(18,610)
|
|
(23,061)
|
Net income for
common stock
|
|
$
62,082
|
|
$
63,415
|
|
$
183,790
|
|
$
191,645
|
Comprehensive income
(loss) attributable to HEI
|
|
$
(33,930)
|
|
$
52,110
|
|
$
(117,221)
|
|
$ 152,796
|
Return on average
common equity (%) (twelve months ended)
|
|
|
|
|
|
10.5
|
|
10.3
|
|
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
September 30
|
|
Nine months
ended
September 30
|
($
in thousands, except per barrel amounts)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
$ 955,971
|
|
$ 679,499
|
|
$
2,483,636
|
|
$
1,846,242
|
Expenses
|
|
|
|
|
|
|
|
|
Fuel oil
|
|
383,602
|
|
180,682
|
|
874,543
|
|
447,245
|
Purchased
power
|
|
225,209
|
|
185,759
|
|
606,827
|
|
490,520
|
Other operation and
maintenance
|
|
121,110
|
|
116,468
|
|
371,259
|
|
349,180
|
Depreciation
|
|
58,711
|
|
57,386
|
|
175,921
|
|
172,122
|
Taxes, other than
income taxes
|
|
88,290
|
|
64,012
|
|
231,288
|
|
175,185
|
Total
expenses
|
|
876,922
|
|
604,307
|
|
2,259,838
|
|
1,634,252
|
Operating
income
|
|
79,049
|
|
75,192
|
|
223,798
|
|
211,990
|
Allowance for equity
funds used during construction
|
|
2,552
|
|
2,427
|
|
7,431
|
|
6,995
|
Retirement defined
benefits credit—other than service costs
|
|
895
|
|
877
|
|
2,876
|
|
2,918
|
Interest expense and
other charges, net
|
|
(19,609)
|
|
(18,148)
|
|
(56,735)
|
|
(54,126)
|
Allowance for borrowed
funds used during construction
|
|
825
|
|
827
|
|
2,401
|
|
2,386
|
Income before income
taxes
|
|
63,712
|
|
61,175
|
|
179,771
|
|
170,163
|
Income taxes
|
|
13,450
|
|
10,335
|
|
37,967
|
|
33,066
|
Net
income
|
|
50,262
|
|
50,840
|
|
141,804
|
|
137,097
|
Preferred stock
dividends of subsidiaries
|
|
228
|
|
228
|
|
686
|
|
686
|
Net income
attributable to Hawaiian Electric
|
|
50,034
|
|
50,612
|
|
141,118
|
|
136,411
|
Preferred stock
dividends of Hawaiian Electric
|
|
270
|
|
270
|
|
810
|
|
810
|
Net income for
common stock
|
|
$
49,764
|
|
$
50,342
|
|
$
140,308
|
|
$
135,601
|
Comprehensive income
attributable to Hawaiian
Electric
|
|
$
49,872
|
|
$
50,448
|
|
$
140,518
|
|
$
135,776
|
OTHER ELECTRIC UTILITY
INFORMATION
|
|
|
|
|
|
|
|
|
Kilowatthour sales
(millions)
|
|
|
|
|
|
|
|
|
Hawaiian
Electric
|
|
1,655
|
|
1,636
|
|
4,609
|
|
4,578
|
Hawaii
Electric Light
|
|
269
|
|
273
|
|
784
|
|
774
|
Maui
Electric
|
|
288
|
|
282
|
|
807
|
|
774
|
|
|
2,212
|
|
2,191
|
|
6,200
|
|
6,126
|
Average fuel oil cost
per barrel
|
|
$
166.79
|
|
$
86.77
|
|
$
137.23
|
|
$
74.93
|
Return on average
common equity (%) (twelve months ended)1
|
|
|
|
|
|
8.1
|
|
8.3
|
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
|
|
Nine months ended
September 30
|
(in thousands)
|
|
September 30,
2022
|
|
June 30,
2022
|
|
September 30,
2021
|
|
2022
|
|
2021
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
53,365
|
|
$
48,129
|
|
$
49,445
|
|
$
147,499
|
|
$
150,418
|
Interest and dividends
on investment securities
|
|
15,052
|
|
14,693
|
|
11,996
|
|
43,729
|
|
31,709
|
Total interest and
dividend income
|
|
68,417
|
|
62,822
|
|
61,441
|
|
191,228
|
|
182,127
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,704
|
|
921
|
|
1,176
|
|
3,572
|
|
3,919
|
Interest on other
borrowings
|
|
1,055
|
|
139
|
|
5
|
|
1,199
|
|
55
|
Total interest
expense
|
|
2,759
|
|
1,060
|
|
1,181
|
|
4,771
|
|
3,974
|
Net interest
income
|
|
65,658
|
|
61,762
|
|
60,260
|
|
186,457
|
|
178,153
|
Provision for credit
losses
|
|
(186)
|
|
2,757
|
|
(1,725)
|
|
(692)
|
|
(22,367)
|
Net interest income
after provision for credit losses
|
|
65,844
|
|
59,005
|
|
61,985
|
|
187,149
|
|
200,520
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
4,763
|
|
4,716
|
|
4,800
|
|
15,066
|
|
15,337
|
Fee income on deposit
liabilities
|
|
4,879
|
|
4,552
|
|
4,262
|
|
14,122
|
|
12,029
|
Fee income on other
financial products
|
|
2,416
|
|
2,529
|
|
2,124
|
|
7,663
|
|
6,767
|
Bank-owned life
insurance
|
|
122
|
|
(142)
|
|
2,026
|
|
661
|
|
6,211
|
Mortgage banking
income
|
|
181
|
|
372
|
|
1,272
|
|
1,630
|
|
7,497
|
Gain on sale of real
estate
|
|
—
|
|
—
|
|
—
|
|
1,002
|
|
—
|
Gain on sale of
investment securities, net
|
|
—
|
|
—
|
|
—
|
|
—
|
|
528
|
Other income,
net
|
|
633
|
|
475
|
|
283
|
|
1,480
|
|
631
|
Total noninterest
income
|
|
12,994
|
|
12,502
|
|
14,767
|
|
41,624
|
|
49,000
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
28,597
|
|
27,666
|
|
30,888
|
|
83,478
|
|
86,595
|
Occupancy
|
|
5,577
|
|
5,467
|
|
5,157
|
|
16,996
|
|
15,226
|
Data
processing
|
|
4,509
|
|
4,484
|
|
4,278
|
|
13,144
|
|
13,162
|
Services
|
|
2,751
|
|
2,522
|
|
2,272
|
|
7,712
|
|
7,609
|
Equipment
|
|
2,432
|
|
2,402
|
|
2,373
|
|
7,163
|
|
6,989
|
Office supplies,
printing and postage
|
|
1,123
|
|
1,073
|
|
1,072
|
|
3,256
|
|
3,094
|
Marketing
|
|
925
|
|
934
|
|
995
|
|
2,877
|
|
2,308
|
FDIC
insurance
|
|
914
|
|
891
|
|
808
|
|
2,613
|
|
2,412
|
Other
expense
|
|
4,729
|
|
3,959
|
|
3,668
|
|
11,929
|
|
9,790
|
Total noninterest
expense
|
|
51,557
|
|
49,398
|
|
51,511
|
|
149,168
|
|
147,185
|
Income before income
taxes
|
|
27,281
|
|
22,109
|
|
25,241
|
|
79,605
|
|
102,335
|
Income taxes
|
|
6,525
|
|
4,643
|
|
5,976
|
|
17,513
|
|
23,230
|
Net
income
|
|
$
20,756
|
|
$
17,466
|
|
$
19,265
|
|
$
62,092
|
|
$
79,105
|
Comprehensive income
(loss)
|
|
$
(78,186)
|
|
$
(71,369)
|
|
$
7,581
|
|
$
(248,126)
|
|
$
38,666
|
OTHER BANK INFORMATION
(annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.89
|
|
0.76
|
|
0.86
|
|
0.90
|
|
1.21
|
Return on average
equity
|
|
15.11
|
|
12.17
|
|
10.26
|
|
13.65
|
|
14.31
|
Return on average
tangible common equity
|
|
17.77
|
|
14.20
|
|
11.52
|
|
15.79
|
|
16.11
|
Net interest
margin
|
|
2.96
|
|
2.85
|
|
2.90
|
|
2.87
|
|
2.94
|
Efficiency
ratio
|
|
65.55
|
|
66.52
|
|
68.66
|
|
65.40
|
|
64.80
|
Net charge-offs to
average loans outstanding
|
|
0.03
|
|
—
|
|
0.03
|
|
0.01
|
|
0.08
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.35
|
|
0.40
|
|
0.97
|
|
|
|
|
Allowance for credit
losses to loans outstanding
|
|
1.24
|
|
1.28
|
|
1.48
|
|
|
|
|
Tangible common equity
to tangible assets
|
|
4.0
|
|
4.9
|
|
7.3
|
|
|
|
|
Tier-1 leverage
ratio
|
|
7.7
|
|
7.7
|
|
8.0
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
5.0
|
|
$
12.0
|
|
$
12.0
|
|
$
32.0
|
|
$
40.0
|
|
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.
|
__________________________________________
|
1 Unless
otherwise indicated, throughout this release earnings per share
(EPS) refers to diluted earnings per share.
|
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%.
|
3 Bank
return on average equity calculated using daily average common
equity.
|
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-third-quarter-2022-results-301669931.html
SOURCE Hawaiian Electric Industries, Inc.