3Q23 Net Income of $41.1M and Diluted Earnings Per Share (EPS) of $0.37
$27.6M of Pre-tax Maui Wildfire-Related Expenses
Core Businesses Performing Well
Solid Credit Quality and Capital Position at ASB
Hawaiian Electric Industries, Inc. (NYSE - HE) (HEI) today reported consolidated net income for common stock for the third quarter of 2023 of $41.1 million and EPS of $0.37 compared to $62.1 million and EPS of $0.57 for the third quarter of 2022. Core net income and core EPS1 for the third quarter were $61.5 million and $0.56, respectively.
“Our hearts are with the people of Maui, and we remain committed to supporting the recovery and rebuild effort. We have a long road ahead as we work towards recovery and restoration, and we can only be successful by working closely together as a community,” said Scott Seu, HEI president and CEO.
“Yesterday Governor Green announced a multi-phase initiative to support Maui’s recovery, protect our communities against future extreme weather events and ensure that as a state we can attract the capital needed to keep our communities safe and our state on the path to a sustainable future. The first phase of the initiative is focused on providing an option for families who have lost a loved one and those who were severely injured in the Maui fire to receive payments to support their healing. This is just the start of a process, and we look forward to working with the Governor, the County of Maui, Kamehameha Schools and others in our communities to help address the many tragic impacts of the Maui wildfires.
“Separate from the events on August 8th, the fundamentals of our businesses remain strong. While we had utility equipment damage and lost the ASB branch in Lahaina, both our utility and bank have made the necessary adjustments to continue serving the people of Maui at a time when they most need us.”
HAWAIIAN ELECTRIC COMPANY (HAWAIIAN ELECTRIC) EARNINGS2
Hawaiian Electric’s net income for the third quarter of 2023 was $43.5 million, compared to $49.8 million in the third quarter of 2022, with the decrease primarily driven by the following after-tax items:
- $11 million higher revenues, including $7 million from the annual revenue adjustment mechanism, $3 million from the fossil fuel cost risk-sharing mechanism and $1 million from the major project interim recovery mechanism; and
- $2 million higher allowance for funds used during construction (AFUDC) related to increased capital expenditures.
These items were offset by the following after-tax items:
- $17 million in higher operations and maintenance expenses, including $10 million of incremental costs related to the Maui windstorm and wildfires. The remaining $7 million increase in O&M included higher transmission and distribution maintenance, higher customer support costs and higher overhaul costs; and
- $2 million higher interest expense due to increased borrowings.
Hawaiian Electric’s core net income3 for the third quarter of 2023 was $53.8 million, excluding incremental after-tax Maui windstorm and wildfire-related expenses.
AMERICAN SAVINGS BANK EARNINGS
ASB’s third quarter 2023 net income was $11.4 million, compared to $20.2 million in the second quarter of 2023 and $20.8 million in the third quarter of 2022. The decrease in net income compared to the linked and prior year quarters was primarily due to pre-tax Maui wildfire-related costs of $8.6 million—including $5.9 million of additional credit reserves—as well as lower net interest income. Core net income3 for the third quarter of 2023 was $17.6 million.
Total earning assets as of September 30, 2023 were $9.3 billion, up approximately 1.7% from December 31, 2022.
Total loans were $6.2 billion as of September 30, 2023, up 3.6% from December 31, 2022, primarily reflecting growth in the commercial real estate and residential mortgage portfolios.
Total deposits were $8.2 billion as of September 30, 2023, an increase of 0.7% from December 31, 2022. Core deposits declined 5.1%, while certificates of deposit increased 71.8%. As of September 30, 2023, 87% of deposits were F.D.I.C. insured or fully collateralized, up slightly from 86% as of June 30, 2023, with approximately 77% of deposits F.D.I.C. insured. For the third quarter of 2023, the average cost of funds was 1.02%, up 19 basis points versus the linked quarter and up 89 basis points versus the prior year quarter.
ASB’s return on average equity was 9.2%, compared to 16.2% in the linked quarter and 15.1% in the third quarter of 2022. Return on average assets was 0.47% for the third quarter of 2023, compared to 0.84% in the linked quarter and 0.89% in the prior year quarter. Excluding Maui wildfire-related costs, core returns on average equity and average assets4 were 14.3% and 0.73%, respectively.
In the third quarter of 2023, ASB paid dividends of $14.0 million to HEI. ASB had a Tier 1 leverage ratio of 7.7% as of September 30, 2023.
Please refer to ASB’s news release issued on October 30, 2023 for additional information on ASB.
HOLDING AND OTHER COMPANIES
The holding and other companies’ net loss was $13.7 million in the third quarter of 2023 compared to $8.4 million in the third quarter of 2022. The higher net loss compared to the prior year quarter was primarily due to $3.8 million of after-tax wildfire-related expenses, lower Pacific Current asset performance and higher interest expense. Core net loss5 for the third quarter of 2023 was $9.9 million.
WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND 2023 GUIDANCE
HEI will conduct a webcast and conference call to review its consolidated results and 2023 earnings guidance and outlook today at 11:30 a.m. Hawaii time (4:30 p.m. Eastern).
To listen to the conference call, dial 1-888-660-6377 (U.S.) or 1-929-203-0797 (international) and enter passcode 2393042. Parties may also access presentation materials (which include reconciliation of non-GAAP measures) 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. The audio replay will also be available about two hours after the event through November 23, 2023. To access the audio replay, dial 1-800-770-2030 (U.S.) or 1-647-362-9199 (international) and enter passcode 2393042.
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 https://hpuc.my.site.com/cdms/s/ 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.
1 |
Core net income and core earnings per share are non-GAAP measures which exclude Maui wildfire-related after-tax costs. See “Explanation of HEI’s Use of Certain Unaudited Non-GAAP Measures” and the related reconciliations. |
|
2 |
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 |
Refer to footnote 1. |
|
4 |
Core returns on average equity and average assets are non-GAAP measures which exclude Maui wildfire-related after-tax costs. See the “Explanation of HEI’s Use of Certain Unaudited Non-GAAP Measures” and the related GAAP reconciliation. |
|
5 |
Refer to footnote 1. |
NON-GAAP MEASURES
Core net income is a non-GAAP measure which excludes Maui wildfire-related after-tax costs. See “Explanation of HEI’s Use of Certain Unaudited Non-GAAP Measures” and related GAAP reconciliations at the end of this release.
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, 2022, HEI’s other periodic reports that discuss important factors that could cause HEI’s results to differ materially from those anticipated in such statements and (i) extreme weather events, including windstorms and other natural disasters, particularly those driven or exacerbated by climate change, which could increase the risk of the Utilities’ equipment being damaged, becoming inoperable or contributing to a wildfire; (ii) the impact of the Maui windstorm and wildfires including the potential liabilities from the many lawsuits filed against the Company and potential regulatory penalties which may result in significant costs that may be unrecoverable through insurance and/or rates; (iii) an increase in insurance premiums and the inability to fully recover premiums through rates or the potential inability to obtain wildfire and general liability insurance coverage at reasonable rates, if available at all; (iv) the uncertainties surrounding the Company’s access to capital and credit markets due to the uncertainties associated with the costs related to the Maui windstorm and wildfires; (v) the material reduction or extended delay in dividends or other distributions from one or more operating subsidiaries to HEI; (vi) further downgrades by securities rating agencies in their ratings of the securities of HEI and Hawaiian Electric and their impact on results of financing efforts; (vii) the risks of suffering losses and incurring liabilities that are uninsured (e.g., damages to the Utilities’ transmission and distribution system and losses from business interruption) or underinsured (e.g., losses not covered as a result of insurance deductibles or other exclusions or exceeding policy limits), and the risks associated with the operation of transmission and distribution assets and power generation facilities, including public and employee safety issues, and assets causing or contributing to wildfires. 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) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenues |
|
|
|
|
|
|
|
|
||||||||
Electric utility |
|
$ |
794,987 |
|
|
$ |
955,971 |
|
|
$ |
2,419,539 |
|
|
$ |
2,483,636 |
|
Bank |
|
|
100,974 |
|
|
|
81,411 |
|
|
|
291,716 |
|
|
|
231,850 |
|
Other |
|
|
5,912 |
|
|
|
4,815 |
|
|
|
14,540 |
|
|
|
7,386 |
|
Total revenues |
|
|
901,873 |
|
|
|
1,042,197 |
|
|
|
2,725,795 |
|
|
|
2,722,872 |
|
Expenses |
|
|
|
|
|
|
|
|
||||||||
Electric utility |
|
|
723,629 |
|
|
|
876,922 |
|
|
|
2,198,681 |
|
|
|
2,259,838 |
|
Bank |
|
|
88,415 |
|
|
|
54,311 |
|
|
|
230,769 |
|
|
|
152,797 |
|
Other |
|
|
14,718 |
|
|
|
8,849 |
|
|
|
34,737 |
|
|
|
22,178 |
|
Total expenses |
|
|
826,762 |
|
|
|
940,082 |
|
|
|
2,464,187 |
|
|
|
2,434,813 |
|
Operating income (loss) |
|
|
|
|
|
|
|
|
||||||||
Electric utility |
|
|
71,358 |
|
|
|
79,049 |
|
|
|
220,858 |
|
|
|
223,798 |
|
Bank |
|
|
12,559 |
|
|
|
27,100 |
|
|
|
60,947 |
|
|
|
79,053 |
|
Other |
|
|
(8,806 |
) |
|
|
(4,034 |
) |
|
|
(20,197 |
) |
|
|
(14,792 |
) |
Total operating income |
|
|
75,111 |
|
|
|
102,115 |
|
|
|
261,608 |
|
|
|
288,059 |
|
Retirement defined benefits credit—other than service costs |
|
|
1,256 |
|
|
|
1,039 |
|
|
|
3,561 |
|
|
|
3,528 |
|
Interest expense, net—other than on deposit liabilities and other bank borrowings |
|
|
(32,629 |
) |
|
|
(26,626 |
) |
|
|
(91,259 |
) |
|
|
(75,940 |
) |
Allowance for borrowed funds used during construction |
|
|
1,372 |
|
|
|
825 |
|
|
|
3,798 |
|
|
|
2,401 |
|
Allowance for equity funds used during construction |
|
|
4,000 |
|
|
|
2,552 |
|
|
|
11,073 |
|
|
|
7,431 |
|
Gain on sales of equity-method investment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,123 |
|
Income before income taxes |
|
|
49,110 |
|
|
|
79,905 |
|
|
|
188,781 |
|
|
|
233,602 |
|
Income taxes |
|
|
7,521 |
|
|
|
17,352 |
|
|
|
36,915 |
|
|
|
48,395 |
|
Net income |
|
|
41,589 |
|
|
|
62,553 |
|
|
|
151,866 |
|
|
|
185,207 |
|
Preferred stock dividends of subsidiaries |
|
|
471 |
|
|
|
471 |
|
|
|
1,417 |
|
|
|
1,417 |
|
Net income for common stock |
|
$ |
41,118 |
|
|
$ |
62,082 |
|
|
$ |
150,449 |
|
|
$ |
183,790 |
|
Basic earnings per common share |
|
$ |
0.37 |
|
|
$ |
0.57 |
|
|
$ |
1.37 |
|
|
$ |
1.68 |
|
Diluted earnings per common share |
|
$ |
0.37 |
|
|
$ |
0.57 |
|
|
$ |
1.37 |
|
|
$ |
1.68 |
|
Dividends declared per common share |
|
$ |
0.36 |
|
|
$ |
0.35 |
|
|
$ |
1.08 |
|
|
$ |
1.05 |
|
Weighted-average number of common shares outstanding |
|
|
109,728 |
|
|
|
109,470 |
|
|
|
109,606 |
|
|
|
109,421 |
|
Weighted-average shares assuming dilution |
|
|
109,917 |
|
|
|
109,705 |
|
|
|
109,932 |
|
|
|
109,712 |
|
Net income (loss) for common stock by segment |
|
|
|
|
|
|
|
|
||||||||
Electric utility |
|
$ |
43,461 |
|
|
$ |
49,764 |
|
|
$ |
135,769 |
|
|
$ |
140,308 |
|
Bank |
|
|
11,365 |
|
|
|
20,756 |
|
|
|
50,131 |
|
|
|
62,092 |
|
Other |
|
|
(13,708 |
) |
|
|
(8,438 |
) |
|
|
(35,451 |
) |
|
|
(18,610 |
) |
Net income for common stock |
|
$ |
41,118 |
|
|
$ |
62,082 |
|
|
$ |
150,449 |
|
|
$ |
183,790 |
|
Comprehensive income (loss) attributable to HEI |
|
$ |
6,243 |
|
|
$ |
(33,930 |
) |
|
$ |
128,453 |
|
|
$ |
(117,221 |
) |
Return on average common equity (%) (twelve months ended) |
|
|
|
|
|
|
9.5 |
|
|
|
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 September 30 |
|
Nine months ended September 30 |
||||||||||||
($ in thousands, except per barrel amounts) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenues |
|
$ |
794,987 |
|
|
$ |
955,971 |
|
|
$ |
2,419,539 |
|
|
$ |
2,483,636 |
|
Expenses |
|
|
|
|
|
|
|
|
||||||||
Fuel oil |
|
|
267,438 |
|
|
|
383,602 |
|
|
|
881,692 |
|
|
|
874,543 |
|
Purchased power |
|
|
177,795 |
|
|
|
225,209 |
|
|
|
498,990 |
|
|
|
606,827 |
|
Other operation and maintenance |
|
|
142,508 |
|
|
|
121,110 |
|
|
|
407,184 |
|
|
|
371,259 |
|
Depreciation |
|
|
61,165 |
|
|
|
58,711 |
|
|
|
182,781 |
|
|
|
175,921 |
|
Taxes, other than income taxes |
|
|
74,723 |
|
|
|
88,290 |
|
|
|
228,034 |
|
|
|
231,288 |
|
Total expenses |
|
|
723,629 |
|
|
|
876,922 |
|
|
|
2,198,681 |
|
|
|
2,259,838 |
|
Operating income |
|
|
71,358 |
|
|
|
79,049 |
|
|
|
220,858 |
|
|
|
223,798 |
|
Allowance for equity funds used during construction |
|
|
4,000 |
|
|
|
2,552 |
|
|
|
11,073 |
|
|
|
7,431 |
|
Retirement defined benefits credit—other than service costs |
|
|
1,132 |
|
|
|
895 |
|
|
|
3,227 |
|
|
|
2,876 |
|
Interest expense and other charges, net |
|
|
(22,447 |
) |
|
|
(19,609 |
) |
|
|
(63,565 |
) |
|
|
(56,735 |
) |
Allowance for borrowed funds used during construction |
|
|
1,372 |
|
|
|
825 |
|
|
|
3,798 |
|
|
|
2,401 |
|
Income before income taxes |
|
|
55,415 |
|
|
|
63,712 |
|
|
|
175,391 |
|
|
|
179,771 |
|
Income taxes |
|
|
11,456 |
|
|
|
13,450 |
|
|
|
38,126 |
|
|
|
37,967 |
|
Net income |
|
|
43,959 |
|
|
|
50,262 |
|
|
|
137,265 |
|
|
|
141,804 |
|
Preferred stock dividends of subsidiaries |
|
|
228 |
|
|
|
228 |
|
|
|
686 |
|
|
|
686 |
|
Net income attributable to Hawaiian Electric |
|
|
43,731 |
|
|
|
50,034 |
|
|
|
136,579 |
|
|
|
141,118 |
|
Preferred stock dividends of Hawaiian Electric |
|
|
270 |
|
|
|
270 |
|
|
|
810 |
|
|
|
810 |
|
Net income for common stock |
|
$ |
43,461 |
|
|
$ |
49,764 |
|
|
$ |
135,769 |
|
|
$ |
140,308 |
|
Comprehensive income attributable to Hawaiian Electric |
|
$ |
43,384 |
|
|
$ |
49,872 |
|
|
$ |
135,603 |
|
|
$ |
140,518 |
|
OTHER ELECTRIC UTILITY INFORMATION |
|
|
|
|
|
|
|
|
||||||||
Kilowatthour sales (millions) |
|
|
|
|
|
|
|
|
||||||||
Hawaiian Electric |
|
|
1,624 |
|
|
|
1,655 |
|
|
|
4,534 |
|
|
|
4,609 |
|
Hawaii Electric Light |
|
|
268 |
|
|
|
269 |
|
|
|
771 |
|
|
|
784 |
|
Maui Electric |
|
|
265 |
|
|
|
288 |
|
|
|
782 |
|
|
|
807 |
|
|
|
|
2,157 |
|
|
|
2,212 |
|
|
|
6,087 |
|
|
|
6,200 |
|
Average fuel oil cost per barrel |
|
$ |
111.51 |
|
|
$ |
166.79 |
|
|
$ |
124.70 |
|
|
$ |
137.23 |
|
Return on average common equity (%) (twelve months ended)1 |
|
|
|
|
|
|
7.9 |
|
|
|
8.1 |
|
||||
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,
|
|
June 30,
|
|
September 30,
|
|
2023 |
|
2022 |
|
|||||||
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|
||||||||
Interest and fees on loans |
|
$ |
71,540 |
|
|
$ |
67,966 |
|
$ |
53,365 |
|
|
$ |
204,348 |
|
$ |
147,499 |
|
Interest and dividends on investment securities |
|
|
14,096 |
|
|
|
13,775 |
|
|
15,052 |
|
|
|
42,508 |
|
|
43,729 |
|
Total interest and dividend income |
|
|
85,636 |
|
|
|
81,741 |
|
|
68,417 |
|
|
|
246,856 |
|
|
191,228 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
||||||||
Interest on deposit liabilities |
|
|
14,446 |
|
|
|
9,661 |
|
|
1,704 |
|
|
|
30,944 |
|
|
3,572 |
|
Interest on other borrowings |
|
|
8,598 |
|
|
|
8,852 |
|
|
1,055 |
|
|
|
25,171 |
|
|
1,199 |
|
Total interest expense |
|
|
23,044 |
|
|
|
18,513 |
|
|
2,759 |
|
|
|
56,115 |
|
|
4,771 |
|
Net interest income |
|
|
62,592 |
|
|
|
63,228 |
|
|
65,658 |
|
|
|
190,741 |
|
|
186,457 |
|
Provision for credit losses |
|
|
8,835 |
|
|
|
43 |
|
|
(186 |
) |
|
|
10,053 |
|
|
(692 |
) |
Net interest income after provision for credit losses |
|
|
53,757 |
|
|
|
63,185 |
|
|
65,844 |
|
|
|
180,688 |
|
|
187,149 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
||||||||
Fees from other financial services |
|
|
4,703 |
|
|
|
5,009 |
|
|
4,763 |
|
|
|
14,391 |
|
|
15,066 |
|
Fee income on deposit liabilities |
|
|
4,924 |
|
|
|
4,504 |
|
|
4,879 |
|
|
|
14,027 |
|
|
14,122 |
|
Fee income on other financial products |
|
|
2,440 |
|
|
|
2,768 |
|
|
2,416 |
|
|
|
7,952 |
|
|
7,663 |
|
Bank-owned life insurance |
|
|
2,303 |
|
|
|
1,955 |
|
|
122 |
|
|
|
5,683 |
|
|
661 |
|
Mortgage banking income |
|
|
341 |
|
|
|
230 |
|
|
181 |
|
|
|
701 |
|
|
1,630 |
|
Gain on sale of real estate |
|
|
— |
|
|
|
495 |
|
|
— |
|
|
|
495 |
|
|
1,002 |
|
Other income, net |
|
|
627 |
|
|
|
678 |
|
|
633 |
|
|
|
2,106 |
|
|
1,480 |
|
Total noninterest income |
|
|
15,338 |
|
|
|
15,639 |
|
|
12,994 |
|
|
|
45,355 |
|
|
41,624 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
||||||||
Compensation and employee benefits |
|
|
29,902 |
|
|
|
29,394 |
|
|
28,597 |
|
|
|
89,500 |
|
|
83,478 |
|
Occupancy |
|
|
5,154 |
|
|
|
5,539 |
|
|
5,577 |
|
|
|
16,281 |
|
|
16,996 |
|
Data processing |
|
|
5,133 |
|
|
|
5,095 |
|
|
4,509 |
|
|
|
15,240 |
|
|
13,144 |
|
Services |
|
|
3,627 |
|
|
|
2,689 |
|
|
2,751 |
|
|
|
8,911 |
|
|
7,712 |
|
Equipment |
|
|
3,125 |
|
|
|
2,957 |
|
|
2,432 |
|
|
|
8,728 |
|
|
7,163 |
|
Office supplies, printing and postage |
|
|
1,022 |
|
|
|
1,109 |
|
|
1,123 |
|
|
|
3,296 |
|
|
3,256 |
|
Marketing |
|
|
984 |
|
|
|
834 |
|
|
925 |
|
|
|
2,834 |
|
|
2,877 |
|
Other expense |
|
|
7,399 |
|
|
|
6,152 |
|
|
5,643 |
|
|
|
19,742 |
|
|
14,542 |
|
Total noninterest expense |
|
|
56,346 |
|
|
|
53,769 |
|
|
51,557 |
|
|
|
164,532 |
|
|
149,168 |
|
Income before income taxes |
|
|
12,749 |
|
|
|
25,055 |
|
|
27,281 |
|
|
|
61,511 |
|
|
79,605 |
|
Income taxes |
|
|
1,384 |
|
|
|
4,851 |
|
|
6,525 |
|
|
|
11,380 |
|
|
17,513 |
|
Net income |
|
$ |
11,365 |
|
|
$ |
20,204 |
|
$ |
20,756 |
|
|
$ |
50,131 |
|
$ |
62,092 |
|
Comprehensive income (loss) |
|
$ |
(22,866 |
) |
|
$ |
12,994 |
|
$ |
(78,186 |
) |
|
$ |
27,120 |
|
$ |
(248,126 |
) |
OTHER BANK INFORMATION (annualized %, except as of period end) |
|
|
|
|
|
|
|
|
||||||||||
Return on average assets |
|
|
0.47 |
|
|
|
0.84 |
|
|
0.89 |
|
|
|
0.70 |
|
|
0.90 |
|
Return on average equity |
|
|
9.19 |
|
|
|
16.20 |
|
|
15.11 |
|
|
|
13.62 |
|
|
13.65 |
|
Return on average tangible common equity |
|
|
11.02 |
|
|
|
19.40 |
|
|
17.77 |
|
|
|
16.36 |
|
|
15.79 |
|
Net interest margin |
|
|
2.70 |
|
|
|
2.75 |
|
|
2.96 |
|
|
|
2.77 |
|
|
2.87 |
|
Efficiency ratio |
|
|
72.30 |
|
|
|
68.18 |
|
|
65.55 |
|
|
|
69.69 |
|
|
65.40 |
|
Net charge-offs to average loans outstanding |
|
|
0.07 |
|
|
|
0.14 |
|
|
0.03 |
|
|
|
0.11 |
|
|
0.01 |
|
As of period end |
|
|
|
|
|
|
|
|
|
|
||||||||
Nonaccrual loans to loans receivable held for investment |
|
|
0.16 |
|
|
|
0.22 |
|
|
0.35 |
|
|
|
|
|
|||
Allowance for credit losses to loans outstanding |
|
|
1.23 |
|
|
|
1.13 |
|
|
1.24 |
|
|
|
|
|
|||
Tangible common equity to tangible assets |
|
|
3.9 |
|
|
|
4.3 |
|
|
4.0 |
|
|
|
|
|
|||
Tier-1 leverage ratio |
|
|
7.7 |
|
|
|
7.8 |
|
|
7.7 |
|
|
|
|
|
|||
Dividend paid to HEI (via ASB Hawaii, Inc.) ($ in millions) |
|
$ |
14.0 |
|
|
$ |
11.0 |
|
$ |
5.0 |
|
|
$ |
39.0 |
|
$ |
32.0 |
|
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.
Explanation of HEI’s Use of Certain Unaudited Non-GAAP Measures
HEI, Hawaiian Electric and ASB management use certain non-GAAP measures to evaluate the performance of HEI, the utility and bank. Management believes these non-GAAP measures provide useful information regarding the companies’ core operating activities. Core earnings and other financial measures as presented here may not be comparable to similarly titled measures used by other companies. The accompanying tables provide a reconciliation of reported GAAP1 earnings to non-GAAP core earnings for adjusted diluted EPS (for HEI consolidated); return on average common equity (for HEI consolidated and Hawaiian Electric); and returns on average equity, average tangible equity and average assets (for ASB).
The reconciling adjustments from GAAP1 earnings to core earnings are limited to the costs related to the recent Maui wildfires. Management does not consider these items to be representative of the company’s fundamental core earnings.
Reconciliation of GAAP1 to non-GAAP Measures |
||||||||
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries |
||||||||
Unaudited |
||||||||
(in thousands) |
|
Three months ended September 30, 2023 |
|
Nine months ended September 30, 2023 |
||||
Maui wildfire-related costs |
|
|
|
|
||||
Pretax expenses: |
|
|
|
|
||||
Legal expenses |
|
$ |
10,751 |
|
|
$ |
10,751 |
|
Outside services expenses |
|
|
6,134 |
|
|
|
6,134 |
|
Provision for credit losses |
|
|
5,900 |
|
|
|
5,900 |
|
Other expenses |
|
|
3,842 |
|
|
|
3,842 |
|
Interest expenses |
|
|
955 |
|
|
|
955 |
|
Pretax expenses |
|
|
27,582 |
|
|
|
27,582 |
|
Income tax benefits2 |
|
|
(7,192 |
) |
|
|
(7,192 |
) |
After-tax expenses |
|
$ |
20,390 |
|
|
$ |
20,390 |
|
HEI consolidated net income |
|
|
|
|
||||
GAAP net income (as reported) |
|
$ |
41,118 |
|
|
$ |
150,449 |
|
Excluding special items related to the Maui wildfire (after tax): |
|
|
|
|
||||
Legal expenses |
|
|
7,977 |
|
|
|
7,977 |
|
Outside services expenses |
|
|
4,546 |
|
|
|
4,546 |
|
Provision for credit losses |
|
|
4,319 |
|
|
|
4,319 |
|
Other expenses |
|
|
2,839 |
|
|
|
2,839 |
|
Interest expenses |
|
|
709 |
|
|
|
709 |
|
Maui wildfire-related cost (after tax) |
|
|
20,390 |
|
|
|
20,390 |
|
Non-GAAP (core) net income |
|
$ |
61,508 |
|
|
$ |
170,839 |
|
GAAP Diluted earnings per share (as reported) |
|
$ |
0.37 |
|
|
$ |
1.37 |
|
Non-GAAP (core) Diluted earnings per share |
|
$ |
0.56 |
|
|
$ |
1.55 |
|
|
|
Twelve months ended September 30, 2023 |
|
Twelve months ended September 30, 2022 |
Ratios (%) |
|
|
|
|
Based on GAAP1 |
|
|
|
|
Return on average equity |
|
9.5 |
|
10.5 |
Based on Non-GAAP (core) |
|
|
|
|
Return on average equity |
|
10.4 |
|
10.5 |
1 |
Accounting principles generally accepted in the United States of America |
|
2 |
Current year composite statutory tax rate of 25.75% is used for Utility and corporate amounts and current year composite statutory tax rate of 26.80% is used for ASB amounts. |
Note: Other segment (Holding and Other Companies) wildfire-related expenses (legal, outside services and other) are included in “Expenses-Other” and interest expense is included in “Interest expense, net—other than on deposit liabilities and other bank borrowings” on the HEI and subsidiaries’ Consolidated Statements of Income Data. See Electric Utilities and Bank tables below for more detail.
Reconciliation of GAAP1 to non-GAAP Measures |
||||||||
Hawaiian Electric Company, Inc. and Subsidiaries |
||||||||
Unaudited |
||||||||
(in thousands) |
|
Three months ended September 30, 2023 |
|
Nine months ended September 30, 2023 |
||||
Maui windstorm and wildfire-related costs |
|
|
|
|
||||
Pretax expenses: |
|
|
|
|
||||
Legal expenses2 |
|
$ |
6,251 |
|
|
$ |
6,251 |
|
Outside services expenses2 |
|
|
4,706 |
|
|
|
4,706 |
|
Other expenses2 |
|
|
2,482 |
|
|
|
2,482 |
|
Interest expenses3 |
|
|
503 |
|
|
|
503 |
|
Pretax expenses |
|
|
13,942 |
|
|
|
13,942 |
|
Income tax benefits4 |
|
|
(3,590 |
) |
|
|
(3,590 |
) |
After-tax expenses |
|
$ |
10,352 |
|
|
$ |
10,352 |
|
|
|
|
|
|
||||
Hawaiian Electric consolidated net income |
|
|
|
|
||||
GAAP net income (as reported) |
|
$ |
43,461 |
|
|
$ |
135,769 |
|
Excluding special items related to the Maui windstorm and wildfires (after tax): |
|
|
|
|
||||
Legal expenses |
|
|
4,641 |
|
|
|
4,641 |
|
Outside services expenses |
|
|
3,494 |
|
|
|
3,494 |
|
Other expenses |
|
|
1,843 |
|
|
|
1,843 |
|
Interest expenses |
|
|
374 |
|
|
|
374 |
|
Maui windstorm and wildfire-related cost (after tax) |
|
|
10,352 |
|
|
|
10,352 |
|
Non-GAAP (core) net income |
|
$ |
53,813 |
|
|
$ |
146,121 |
|
|
|
Twelve months ended September 30, 2023 |
|
Twelve months ended September 30, 2022 |
Ratios (%) |
|
|
|
|
Based on GAAP1 |
|
|
|
|
Return on average equity |
|
7.9 |
|
8.1 |
Based on Non-GAAP (core) |
|
|
|
|
Return on average equity |
|
8.3 |
|
8.1 |
1 |
Accounting principles generally accepted in the United States of America. |
|
2 |
Legal, outside services and other are included in “Other operation and maintenance” on the Hawaiian Electric and subsidiaries Consolidated Statements of Income Data. |
|
3 |
Interest expense is included in “Interest expense and other charges, net” on the Hawaiian Electric and subsidiaries Consolidated Statements of Income Data. |
|
4 |
Current year composite statutory tax rate of 25.75% is used for Utility amounts. |
Reconciliation of GAAP1 to non-GAAP Measures |
||||||||
American Savings Bank F.S.B. |
||||||||
Unaudited |
||||||||
(in thousands) |
|
Three months ended September 30, 2023 |
|
Nine months ended September 30, 2023 |
||||
Maui wildfire related costs |
|
|
|
|
||||
Pretax expenses: |
|
|
|
|
||||
Provision for credit losses2 |
|
$ |
5,900 |
|
|
$ |
5,900 |
|
Professional services expense3 |
|
|
1,300 |
|
|
|
1,300 |
|
Other expenses4 |
|
|
1,357 |
|
|
|
1,357 |
|
Pretax expenses |
|
|
8,557 |
|
|
|
8,557 |
|
Income tax benefits5 |
|
|
(2,293 |
) |
|
|
(2,293 |
) |
After-tax expenses |
|
$ |
6,264 |
|
|
$ |
6,264 |
|
|
|
|
|
|
||||
ASB net income |
|
|
|
|
||||
GAAP (as reported) |
|
$ |
11,365 |
|
|
$ |
50,131 |
|
Excluding expense related to Maui wildfire (after tax): |
|
|
|
|
||||
Provision for credit losses |
|
|
4,319 |
|
|
|
4,319 |
|
Professional services expense |
|
|
952 |
|
|
|
952 |
|
Other expenses |
|
|
993 |
|
|
|
993 |
|
Maui wildfire related cost (after tax) |
|
|
6,264 |
|
|
|
6,264 |
|
Non-GAAP (core) net income |
|
$ |
17,629 |
|
|
$ |
56,395 |
|
|
|
Three months ended September 30, 2023 |
|
Nine months ended September 30, 2023 |
Ratios (annualized %) |
|
|
|
|
Based on GAAP1 |
|
|
|
|
Return on average assets |
|
0.47 |
|
0.70 |
Return on average equity |
|
9.19 |
|
13.62 |
Return on average tangible common equity |
|
11.02 |
|
16.36 |
Efficiency ratio |
|
72.30 |
|
69.69 |
Based on Non-GAAP (core) |
|
|
|
|
Return on average assets |
|
0.73 |
|
0.78 |
Return on average equity |
|
14.25 |
|
15.32 |
Return on average tangible common equity |
|
17.09 |
|
18.40 |
Efficiency ratio |
|
68.89 |
|
68.56 |
1 |
Accounting principles generally accepted in the United States of America. |
|
2 |
Provision for credit losses is included in “Provision for credit losses” on the ASB Statements of Income Data. |
|
3 |
Professional services expenses are included in “Noninterest expense-Services” on the ASB Statements of Income Data. |
|
4 |
Other expenses are included in “Noninterest expense-Other expense” on the ASB Statements of Income Data. |
|
5 |
Current year composite statutory tax rate of 26.80% is used for ASB amounts. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20231109688410/en/
Contacts
Mateo Garcia
Director, Investor Relations
Telephone: (808) 543-7300
E-mail: ir@hei.com
