Press Releases

HEI REPORTS THIRD QUARTER 2022 RESULTS

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

 

HEI (PRNewsfoto/Hawaiian Electric Industries, Inc.)

 

Cision 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.

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