Hawaiian Electric Industries Reports First Quarter 2013 Earnings & Declares Dividend Earnings Per Share of $0.34

Hawaiian Electric Company Invests Over $60 Million in Local Infrastructure

American Savings Bank Continues to Deliver Solid Results

Board Declares Dividend of $0.31 Per Share

HONOLULU, May 8, 2013 /PRNewswire/ -- Hawaiian Electric Industries, Inc. (NYSE - HE) (HEI) today reported consolidated net income for common stock for the first quarter of 2013 of $33.7 million, or $0.34 diluted earnings per share (EPS), compared to $38.3 million, or $0.40 diluted EPS for the first quarter of 2012. 

"We're off to a solid start in 2013 with financial results consistent with our expectations and significant progress on our strategies across our companies. We successfully completed a $180 million common stock offering which allows us to fund the largest capital plan in our utilities' history over the next two years, benefitting customers with a stronger and more modern electric grid and lower-cost renewable energy.  In the first quarter, our utilities invested over $60 million – about 2.5x their earnings – in local infrastructure.  American Savings Bank delivered strong loan growth to help offset the impact of the low interest rate environment and gained market share in its mortgage banking business, becoming one of the top ranking lenders in the state for the quarter," said Constance H. Lau, HEI president and chief executive officer.

"Our companies are committed to reducing Hawaii's dependence on oil and are constantly seeking ways to increase our use of lower-cost renewable energy.  In 2012, we reached a record 13.9% of energy needs from renewable generation and are on track to exceed the next clean energy goal of 15% in 2015," added Lau.  Since the end of 2010, over 80% or close to $50 of the $60 increase in the typical Oahu customer's bill is due to higher oil prices. 

HAWAIIAN ELECTRIC COMPANY CONTINUES TO INVEST IN CLEAN ENERGY AND RELIABILITY

Hawaiian Electric Company's1 net income for the first quarter of 2013 was $24.4 million compared to $27.3 million in the first quarter of 2012.   

Overall, the primary variances impacting net income for the quarter were (on an after-tax basis):

  • $5 million higher operations and maintenance (O&M) expenses2; and
  • $1 million higher depreciation expense.
    These were partially offset by (after-tax):
  • $2 million recovery of additional costs for reliability and clean energy investments, net of lower heat rate earnings.

Operations and maintenance (O&M) expenses2 (after-tax) were $5 million higher for the first quarter of 2013 compared to the first quarter of the prior year largely due to timing.  In 2012, the rate of O&M expense in the first quarter was lower than the rest of the year, whereas, in 2013, management expects O&M to be more evenly distributed throughout the year.  In the quarter, O&M reflects higher customer service expenses as such costs received deferral treatment in most of the first half of 2012.  Management continues to expect 2013 O&M expenses to be flat to up 1% compared to 2012 as work continues to moderate O&M spending in targeted areas.

1 Hawaiian Electric Company, unless otherwise defined, refers to the three utilities, Hawaiian Electric Company, Inc. on Oahu, Maui Electric Company, Limited, and Hawaii Electric Light Company, Inc.

2 Excludes expenses covered by surcharges or by third parties. In the first quarter of 2013 and 2012, these expenses were $2 million and $1 million, respectively.

AMERICAN SAVINGS BANK CONTINUES TO DELIVER SOLID PERFORMANCE

American Savings Bank's (American) net income for the first quarter of 2013 was $14.2 million compared with $14.4 million in the fourth, or linked, quarter of 2012 and $15.9 million in the first quarter of 2012, which included $1 million for a one-time release of tax-related reserves.  First quarter 2013 net income was consistent with the linked quarter.  Net interest income was flat as the 6.9% annualized loan growth this quarter helped offset lower financing margins.  Noninterest income was lower, largely due to lower gains on sales of residential mortgage loans, but offset by lower provision for loan losses and lower noninterest expense.

Compared to the first quarter of 2012, net income declined by $1.7 million including the effect of the $1 million release of tax reserves mentioned previously.  The remaining $0.7 million decline was largely driven by higher noninterest expense, primarily attributable to targeted staffing increases to support increased business volumes and information technology and risk management capabilities, and lower net interest income due to declining asset yields.  These were partially offset by the favorable effect of loan growth, higher noninterest income from higher gains on sales of new residential mortgages originated in the quarter and lower provision for loan losses, as the credit quality of the bank's loan portfolio improved along with the improvement in Hawaii's economy.

Overall, American achieved solid profitability in the first quarter 2013 with a return on average equity of 11.3% and a return on average assets of 1.12%. 

Also refer to the American news release issued on April 30, 2013.

HOLDING AND OTHER COMPANIES

The holding and other companies' net losses were $4.9 million in the first quarter of 2013, consistent with the first quarter of 2012.

BOARD DECLARES QUARTERLY DIVIDEND

On May 7, 2013, the board of directors maintained HEI's quarterly cash dividend of 31 cents per share, payable on June 12, 2013, to shareholders of record at the close of business on May 22, 2013 (ex-dividend date is May 20, 2013).  The dividend is equivalent to an annual rate of $1.24 per share.

Dividends have been paid continuously since 1901.  At the indicated annual dividend rate and the closing share price on May 7, 2013 of $28.10, HEI's yield is 4.4%.

WEBCAST AND CONFERENCE CALL

Hawaiian Electric Industries, Inc. will conduct a webcast and conference call to review its first quarter 2013 earnings on Wednesday, May 8, 2013, at 7:00 a.m. Hawaii time (1:00 p.m. Eastern time).  The event can be accessed through HEI's website at www.hei.com or by dialing (800) 706-7741, passcode:  55241897 for the teleconference call.  The presentation for the webcast will be on HEI's website under the headings "Investor Relations," "News & Events" and "Presentations & Webcasts."  HEI and Hawaiian Electric Company, Inc. (HECO) intend to continue to use HEI's website, www.hei.com, as a means of disclosing material information, as well as other important information.  Such disclosures will be included on HEI's website in the Investor Relations section.  Accordingly, investors should routinely monitor such portions of HEI's website, in addition to following HEI's, HECO's and American's press releases, HEI's and HECO's Securities and Exchange Commission (SEC) filings and HEI's public conference calls and webcasts.  Also, at the Investor Relations section of HEI's website, investors may sign up to receive e-mail alerts (based on each investor's selected preferences).  The information on HEI's website is not incorporated by reference in this document or in HEI's and HECO'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 in order to review documents filed with and issued by the PUC.  No information on the PUC website is incorporated by reference in this document or in HEI's and HECO's SEC filings.

An online replay of the webcast will be available at the same website beginning about two hours after the event.  Replays of the teleconference call will also be available approximately two hours after the event through May 22, 2013, by dialing (888) 286-8010, passcode: 75540244.

HEI supplies power to approximately 450,000 customers or 95% of Hawaii's population through its electric utilities, HECO, Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited and provides a wide array of banking and other financial services to consumers and businesses through American, one of Hawaii's largest financial institutions.

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 "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 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 "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, 2012 and HEI's subsequent 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, HECO, American 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

(Unaudited)








Three months ended March 31


2013


2012

(in thousands, except per share amounts) 





Revenues





Electric utility


$

719,273


$

749,610

Bank


64,756


65,252

Other


35


(2)

    Total revenues


784,064


814,860

Expenses





Electric utility


666,320


692,356

Bank


43,005


42,340

Other


4,082


4,348

    Total expenses


713,407


739,044

Operating income (loss)





Electric utility


52,953


57,254

Bank


21,751


22,912

Other


(4,047)


(4,350)

     Total operating income 


70,657


75,816

Interest expense–other than on deposit liabilities 





   and other bank borrowings


(19,788)


(18,539)

Allowance for borrowed funds used during construction


730


870

Allowance for equity funds used during construction


1,215


1,940

Income before income taxes


52,814


60,087

Income taxes


18,662


21,298

Net income 


34,152


38,789

Preferred stock dividends of subsidiaries


473


473

Net income for common stock


$

33,679


$

38,316

Basic earnings per common share


$

0.34


$

0.40

Diluted earnings per common share


$

0.34


$

0.40

Dividends per common share


$

0.31


$

0.31

Weighted-average number of common shares outstanding


98,135


96,167

Adjusted weighted-average shares


98,540


96,561







Net income (loss) for common stock  by segment





   Electric utility


$

24,429


$

27,300

   Bank


14,155


15,877

   Other


(4,905)


(4,861)

Net income for common stock


$

33,679


$

38,316

Comprehensive income attributable to Hawaiian Electric Industries, Inc.


$

33,618


$

38,627

Return on average common equity (twelve months ended)1


8.5%


9.7%


This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and HEI's Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.


1On a core basis (non-GAAP), 2013 and 2012 return on average common equity (twelve months ended March 31) were 10.0% and 10.1%, respectively.  See reconciliation of GAAP to non-GAAP measures.


Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Unaudited)


March 31,

December 31,

(dollars in thousands)

2013

2012

Assets



Cash and cash equivalents

$

262,708

$

219,662

Accounts receivable and unbilled revenues, net

348,487

362,823

Available-for-sale investment and mortgage-related securities

659,400

671,358

Investment in stock of Federal Home Loan Bank of Seattle 

95,152

96,022

Loans receivable held for investment, net

3,803,002

3,737,233

Loans held for sale, at lower of cost or fair value

5,351

26,005

Property, plant and equipment, net of accumulated depreciation of



      $2,142,040 in 2013 and $2,125,286 in 2012

3,640,308

3,594,829

Regulatory assets

874,151

864,596

Other

527,820

494,414

Goodwill

82,190

82,190

     Total assets

$

10,298,569

$

10,149,132

Liabilities and shareholders' equity



Liabilities



Accounts payable

$

253,096

$

212,379

Interest and dividends payable

26,358

26,258

Deposit liabilities

4,312,620

4,229,916

Short-term borrowings—other than bank

133,937

83,693

Other bank borrowings

193,233

195,926

Long-term debt, net—other than bank

1,422,875

1,422,872

Deferred income taxes

459,249

439,329

Regulatory liabilities

325,527

322,074

Contributions in aid of construction

415,795

405,520

Retirement benefits liability

643,104

656,394

Other

471,217

526,613

     Total liabilities

8,657,011

8,520,974




Preferred stock of subsidiaries - not subject to mandatory redemption

34,293

34,293




Shareholders' equity



Preferred stock, no par value, authorized 10,000,000 shares; issued:  none

-

-

Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 98,471,405 shares in 2013 and 97,928,403 shares in 2012

1,413,700

1,403,484

Retained earnings

220,049

216,804

Accumulated other comprehensive loss, net of tax benefits

(26,484)

(26,423)

     Total shareholders' equity

1,607,265

1,593,865

     Total liabilities and shareholders' equity

$

10,298,569

$

10,149,132


This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and HEI's Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (when filed), as updated by SEC Forms 8-K. 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 Industries, Inc. (HEI) and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Three months ended March 31

2013

2012

(in thousands)



Cash flows from operating activities



Net income 

$

34,152

$

38,789

Adjustments to reconcile net income to net cash provided by (used in) operating activities



      Depreciation of property, plant and equipment

39,726

37,911

      Other amortization

935

1,419

      Provision for loan losses

1,858

3,546

      Loans receivable originated and purchased, held for sale

(79,224)

(89,087)

      Proceeds from sale of loans receivable, held for sale

102,254

85,252

      Change in deferred income taxes

19,967

21,260

      Change in excess tax benefits from share-based payment arrangements

(414)

(44)

      Allowance for equity funds used during construction

(1,215)

(1,940)

      Changes in assets and liabilities



           Decrease in accounts receivable and unbilled revenues, net

14,335

37,562

           Increase in fuel oil stock

(29,272)

(14,458)

           Increase in regulatory assets

(17,746)

(13,948)

           Increase (decrease) in accounts, interest and dividends payable

38,148

(36,991)

           Change in prepaid and accrued income taxes and utility revenue taxes

(50,933)

(41,126)

           Contributions to defined benefit pension and other postretirement benefit plans

(21,476)

(26,815)

           Change in other assets and liabilities

(2,776)

(17,046)

Net cash provided by (used in) operating activities

48,319

(15,716)

Cash flows from investing activities



Available-for-sale investment and mortgage-related securities purchased

(26,705)

(53,931)

Principal repayments on available-for-sale investment and mortgage-related securities

36,504

46,355

Net increase in loans held for investment

(66,934)

(34,212)

Proceeds from sale of real estate acquired in settlement of loans

3,046

3,371

Capital expenditures

(71,041)

(65,300)

Contributions in aid of construction

11,710

22,855

Other

869

-

Net cash used in investing activities

(112,551)

(80,862)

Cash flows from financing activities



Net increase in deposit liabilities

82,704

55,172

Net increase in short-term borrowings with original maturities of three months or less

50,244

87,467

Net decrease in retail repurchase agreements

(2,680)

(379)

Proceeds from issuance of long-term debt

50,000

-

Repayment of long-term debt

(50,000)

(57,500)

Change in excess tax benefits from share-based payment arrangements

414

44

Net proceeds from issuance of common stock

4,703

5,940

Common stock dividends

(24,394)

(23,855)

Preferred stock dividends of subsidiaries

(473)

(473)

Other

(3,240)

(3,757)

Net cash provided by financing activities

107,278

62,659

Net increase (decrease) in cash and cash equivalents 

43,046

(33,919)

Cash and cash equivalents, beginning of period

219,662

270,265

Cash and cash equivalents, end of period

$

262,708

$

236,346


This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and HEI's Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (when filed), as updated by SEC Forms 8-K. 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. (HECO) and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)





Three months ended March 31

2013


2012

(dollars in thousands, except per barrel amounts)




Operating revenues

$

716,197


$

747,938

Operating expenses




Fuel oil

305,100


327,839

Purchased power

153,364


164,789

Other operation 

71,423


61,849

Maintenance

29,702


30,038

Depreciation

38,280


36,482

Taxes, other than income taxes

67,687


70,995

Income taxes

14,095


17,365

     Total operating expenses

679,651


709,357

Operating income

36,546


38,581

Other income 




Allowance for equity funds used during construction

1,215


1,940

Other, net

2,312


1,309

Income tax expense

(299)


(44)

     Total other income

3,228


3,205

Interest and other charges




Interest on long-term debt

14,614


14,383

Amortization of net bond premium and expense

647


745

Other interest charges (credits)

315


(271)

Allowance for borrowed funds used during construction

(730)


(870)

     Total interest and other charges

14,846


13,987

Net income 

24,928


27,799

Preferred stock dividends of subsidiaries

229


229

Net income attributable to HECO

24,699


27,570

Preferred stock dividends of HECO

270


270

Net income for common stock

$

24,429


$

27,300

Comprehensive income attributable to HECO

$

24,447


$

27,377

OTHER ELECTRIC UTILITY INFORMATION




Kilowatthour sales (millions)




   HECO

1,591


1,696

   HELCO

263


271

   MECO

269


284


2,123


2,251

Wet-bulb temperature (Oahu average; degrees Fahrenheit)

66.0


67.2

Cooling degree days (Oahu)

789


861

Average fuel oil cost per barrel

$

130.83


$

134.37




 Twelve months ended 


March 31

Return on average common equity (%) (simple average)1

2013


2012

   HECO

6.97


7.71

   HELCO

5.07


9.58

   MECO

7.41


6.42

   HECO Consolidated

6.68


7.87


This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and the consolidated financial statements and the notes thereto in HECO's Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.

 

1On a core basis (non-GAAP), the 2013 and 2012 return on average common equity (twelve months ended March 31) were 8.9% and 8.4%, respectively for HECO;  6.3% and 9.6%, respectively for HELCO; 8.8% and 6.4%, respectively for MECO and 8.4% and 8.3% respectively, for HECO Consolidated.  See reconciliation of GAAP to non-GAAP measures.




Hawaiian Electric Company, Inc. (HECO) and Subsidiaries



CONSOLIDATED BALANCE SHEETS



(Unaudited)




March 31,

December 31,

(dollars in thousands, except par value)

2013

2012

Assets



Utility plant, at cost



Land

$

51,598

$

51,568

Plant and equipment

5,427,933

5,364,400

Less accumulated depreciation

(2,062,810)

(2,040,789)

Construction in progress

153,669

151,378

     Net utility plant

3,570,390

3,526,557

Current assets



Cash and cash equivalents

36,940

17,159

Customer accounts receivable, net 

194,457

210,779

Accrued unbilled revenues, net

135,615

134,298

Other accounts receivable, net

5,795

28,176

Fuel oil stock, at average cost

190,691

161,419

Materials and supplies, at average cost

54,430

51,085

Prepayments and other

32,255

32,865

Regulatory assets

61,804

51,267

     Total current assets 

711,987

687,048

Other long-term assets



Regulatory assets

812,347

813,329

Unamortized debt expense

10,245

10,554

Other

69,266

71,305

     Total other long-term assets

891,858

895,188

          Total assets

$

5,174,235

$

5,108,793

Capitalization and liabilities



Capitalization



Common stock, $6 2/3 par value, authorized 50,000,000 shares; outstanding 



    14,665,264 in 2013 and 2012

$

97,788

$

97,788

Premium on capital stock

468,045

468,045

Retained earnings

911,632

907,273

Accumulated other comprehensive loss, net of tax benefits

(952)

(970)

     Common stock equity

1,476,513

1,472,136

Cumulative preferred stock – not subject to mandatory redemption

34,293

34,293

Long-term debt, net

1,147,875

1,147,872

     Total capitalization

2,658,681

2,654,301

Current liabilities



Short-term borrowings from nonaffiliates

43,052

-

Accounts payable

228,426

186,824

Interest and preferred dividends payable

21,693

21,092

Taxes accrued

199,350

251,066

Other

67,930

62,879

     Total current liabilities

560,451

521,861

Deferred credits and other liabilities



Deferred income taxes

435,598

417,611

Regulatory liabilities

325,527

322,074

Unamortized tax credits

67,939

66,584

Retirement benefits liability

611,678

620,205

Other

98,566

100,637

     Total deferred credits and other liabilities

1,539,308

1,527,111

Contributions in aid of construction

415,795

405,520

          Total capitalization and liabilities

$

5,174,235

$

5,108,793

This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and the consolidated financial statements and the notes thereto in HECO's Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (when filed), as updated by SEC Forms 8-K. 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. (HECO) and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three months ended March 31

2013

2012

(in thousands)



Cash flows from operating activities



Net income

$

24,928

$

27,799

Adjustments to reconcile net income to net cash provided by (used in) operating activities



      Depreciation of property, plant and equipment

38,280

36,482

      Other amortization

957

1,561

      Change in deferred income taxes

17,975

20,061

      Change in tax credits, net

1,382

1,356

      Allowance for equity funds used during construction

(1,215)

(1,940)

      Changes in assets and liabilities



           Decrease in accounts receivable

38,703

25,001

           Decrease (increase) in accrued unbilled revenues

(1,317)

11,184

           Increase in fuel oil stock

(29,272)

(14,458)

           Increase in materials and supplies

(3,345)

(3,561)

           Increase in regulatory assets

(17,746)

(13,948)

           Increase (decrease) in accounts payable

38,934

(33,174)

           Change in prepaid and accrued income taxes and utility revenue taxes

(53,666)

(44,561)

           Contributions to defined benefit pension and other postretirement benefit plans

(21,010)

(26,183)

           Change in other assets and liabilities

19,913

3,444

Net cash provided by (used in) operating activities

53,501

(10,937)

Cash flows from investing activities



Capital expenditures

(67,915)

(63,436)

Contributions in aid of construction

11,710

22,855

Net cash used in investing activities

(56,205)

(40,581)

Cash flows from financing activities



Common stock dividends

(20,070)

(18,261)

Preferred stock dividends of HECO and subsidiaries

(499)

(499)

Repayment of long-term debt

-

(57,500)

Net increase in short-term borrowings from nonaffiliates and 



     affiliate with original maturities of three months or less

43,052

84,942

Other

2

(120)

Net cash provided by financing activities

22,485

8,562

Net increase (decrease) in cash and cash equivalents

19,781

(42,956)

Cash and cash equivalents, beginning of period

17,159

48,806

Cash and cash equivalents, end of period

$

36,940

$

5,850


This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and the consolidated financial statements and the notes thereto in HECO's Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (when filed), as updated by SEC Forms 8-K. 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



March 31, 


December 31, 


March 31, 

(in thousands)


2013


2012


2012

Interest income







Interest and fees on loans


$

42,603


$

42,816


$

44,888

Interest on investment and mortgage-related securities


3,464


3,288


3,805

     Total interest income


46,067


46,104


48,693

Interest expense







Interest on deposit liabilities


1,312


1,408


1,779

Interest on other borrowings


1,164


1,193


1,261

     Total interest expense


2,476


2,601


3,040

Net interest income


43,591


43,503


45,653

Provision for loan losses


1,858


3,379


3,546

Net interest income after provision for loan losses


41,733


40,124


42,107

Noninterest income







Fees from other financial services


7,643


8,887


7,337

Fee income on deposit liabilities


4,314


4,648


4,278

Fee income on other financial products


1,794


1,836


1,549

Gain on sale of loans


3,346


6,331


2,035

Other income


1,592


1,164


1,360

     Total noninterest income


18,689


22,866


16,559

Noninterest expense







Compensation and employee benefits


20,088


19,953


18,646

Occupancy


4,123


4,313


4,225

Data processing


2,987


2,854


2,111

Services


2,103


2,800


1,783

Equipment


1,774


1,806


1,730

Other expense


7,595


9,207


6,707

     Total noninterest expense


38,670


40,933


35,202

Income before income taxes


21,752


22,057


23,464

Income taxes 


7,597


7,694


7,587

Net income


$

14,155


$

14,363


$

15,877

Comprehensive income


$

15,484


$

5,740


$

15,899








OTHER BANK INFORMATION (annualized %, except as of period end)





Return on average assets 


1.12


1.15


1.29

Return on average equity  


11.28


11.29


12.87

Return on average tangible common equity


13.49


13.47


15.44

Net interest margin


3.78


3.81


4.04

Net charge-offs to average loans outstanding 


0.12


0.13


0.28

Efficiency ratio


61


61


56

As of period end







Nonperforming assets to loans outstanding and real estate owned *

1.89


1.87


2.02

Allowance for loan losses to loans outstanding 


1.11


1.11


1.05

Tier-1 leverage ratio *


9.1


9.1


9.1

Total risk-based capital ratio *


12.8


12.8


12.9

Tangible common equity to total assets


8.38


8.39


8.46

Dividend paid to HEI (via ASHI) ($ in millions) 


10


15


10








*  Regulatory basis














This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and HEI's Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (when filed), as updated by SEC Forms 8-K. 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. 

BALANCE SHEETS DATA

(Unaudited)


March 31,

December 31,

(in thousands)

2013

2012

Assets



Cash and cash equivalents

$

224,870

$

184,430

Available-for-sale investment and mortgage-related securities

659,400

671,358

Investment in stock of Federal Home Loan Bank of Seattle

95,152

96,022

Loans receivable held for investment

3,845,732

3,779,218

   Allowance for loan losses

(42,730)

(41,985)

      Loans receivable held for investment, net

3,803,002

3,737,233

Loans held for sale, at lower of cost or fair value

5,351

26,005

Other

246,420

244,435

Goodwill

82,190

82,190

     Total assets

$

5,116,385

$

5,041,673




Liabilities and shareholder's equity



Deposit liabilities–noninterest-bearing

$

1,223,921

$

1,164,308

Deposit liabilities–interest-bearing

3,088,699

3,065,608

Other borrowings

193,233

195,926

Other

106,337

117,752

     Total liabilities

4,612,190

4,543,594




Common stock

334,344

333,712

Retained earnings

183,918

179,763

Accumulated other comprehensive loss, net of tax benefits

(14,067)

(15,396)

     Total shareholder's equity

504,195

498,079

     Total liabilities and shareholder's equity

$

5,116,385

$

5,041,673


This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and HEI's Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (when filed), as updated by SEC Forms 8-K. 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 and HECO management use certain non-GAAP measures to evaluate the performance of the utility. Management believes these non-GAAP measures provide useful information and are a better indicator of the utility's core operating activities. Core earnings 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 both the utility and HEI consolidated and the corresponding adjusted return on average common equity (ROACE).

The reconciling adjustments from GAAP earnings to core earnings are limited to the settlement charges for the partial write-off of utility assets in 2012 and 2011. For more information on the settlement charge recorded in 2012, see the Form 8-K filed on March 20, 2013.

Management does not consider these items to be representative of the company's fundamental core earnings.

 

Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries

RECONCILIATION OF GAAP TO NON-GAAP MEASURES


(Unaudited)







Net Income


Twelve months ended


March 31,

(in millions)

2013

2012




GAAP (as reported)

$            134.0

$            148.1




Excluding special items (after-tax):



Settlement agreement for the partial writedown of certain utility assets

24.4

-




Settlement agreement for the partial writedown of the East Oahu Transmission Project (EOTP) Phase I costs

-

5.7




Non-GAAP (core)

$            158.5

$            153.8




Note:  Columns may not foot due to rounding






Twelve months ended


March 31,

Other measures:

2013

2012




Return on average common equity (ROACE) (simple average):

Based on GAAP 

8.5%

9.7%

Based on non-GAAP (core)2

10.0%

10.1%




1U.S. Generally Accepted Accounting Principles.

2Calculated as core net income divided by average GAAP common equity.

 


Hawaiian Electric Company, Inc. (HECO) and Subsidiaries

RECONCILIATION OF GAAP1 TO NON-GAAP MEASURES


(Unaudited)













Net Income









Twelve months ended









March 31, 







(in millions)


2013

2012

















GAAP (as reported)


$             96.4

$           108.1

















Excluding special items (after-tax):










Settlement agreement for the partial writedown of certain utility assets


24.4

-

















Settlement agreement for the partial writedown of the EOTP Phase I costs


-

5.7

















Non-GAAP (core)


$           120.8

$           113.8

















Note:  Columns may not foot due to rounding



















Twelve months ended









March 31, 







Other measures:


2013

2012







Return on average common equity (ROACE) (simple average):





Based on GAAP 


6.7%

7.9%







Based on non-GAAP (core)2


8.4%

8.3%







































Hawaiian Electric Company, Inc. (HECO, Oahu)


Hawaii Electric Light Company, Inc. (HELCO)


Maui Electric Company, Limited (MECO)



Net Income


Net Income


Net Income



Twelve months ended


Twelve months ended


Twelve months ended



March 31, 


March 31, 


March 31, 

(in millions)


2013

2012


2013

2012


2013

2012











GAAP (as reported)


$             65.1

$             66.5


$          14.0

$          26.6


$          17.3

$          15.0











Excluding special items (after-tax):










Settlement agreement for the partial
writedown of certain utility assets


17.7

-


3.4

-


3.4

-











Settlement agreement for the partial writedown of the EOTP Phase I costs


-

5.7


-

-


-

-











Non-GAAP (core)


$             82.8

$             72.2


$          17.4

$          26.6


$          20.7

$          15.0











Note:  Columns may not foot due to rounding



















Twelve months ended


Twelve months ended


Twelve months ended



March 31, 


March 31, 


March 31, 

Other measures:


2013

2012


2013

2012


2013

2012











Return on average common equity (ROACE) (simple average):





Based on GAAP 


7.0%

7.7%


5.1%

9.6%


7.4%

6.4%

Based on non-GAAP (core)2


8.9%

8.4%


6.3%

9.6%


8.8%

6.4%











1U.S. Generally Accepted Accounting Principles.

2Calculated as core net income divided by average GAAP common equity.


 

Contact: Shelee M.T. Kimura


Manager, Investor Relations &

Telephone: (808) 543-7384

Strategic Planning

E-mail: skimura@hei.com

(Logo: http://photos.prnewswire.com/prnh/20110411/LA80136LOGO)

SOURCE Hawaiian Electric Industries, Inc.



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