HEI Reports Third Quarter 2011 Earnings & Declares Dividend Diluted Earnings Per Share $0.50 in 3Q 2011 vs $0.35 in 3Q 2010

Interim Rate Relief Helps Financial Repair

Bank Continues Solid Performance

Board of Directors Declares Dividend of $0.31 Per Share

HONOLULU, Nov. 3, 2011 /PRNewswire/ -- Hawaiian Electric Industries, Inc. (NYSE - HE) (HEI) today reported consolidated net income for common stock for the third quarter 2011 of $48.4 million, or $0.50 diluted earnings per share (EPS), compared to $32.4 million, or $0.35 diluted EPS for the third quarter 2010.  

"While utility earnings are recovering from the depressed levels of  2010, returns will continue to fall short of those allowed by the Hawaii Public Utilities Commission.  Continued regulatory support to recover our investments in a timely manner is essential to our success in attracting the significant capital needed to fund our utilities' reliability and clean energy plans.  Our bank continues to be a consistent source of capital for HEI and maintained its strong performance. This marks the fourth consecutive quarter of loan growth and we continue to maintain strong profitability metrics and healthy capital levels," said Constance H. Lau, HEI president and chief executive officer.

UTILITY EARNINGS IMPROVE AND EXPENSE MANAGEMENT REMAINS A PRIORITY FOCUS

Electric utility net income for the third quarter 2011 was $38.0 million compared to $22.0 million in the third quarter 2010.  The $16.0 million net income improvement resulted primarily from regulatory action and continued cost management.  The significant increases over the prior year were (on an after-tax basis):

  • $6 million of rate relief granted to all three utilities;
  • $5 million net decoupling revenue adjustments recorded for our Oahu utility;
  • $2 million higher fuel efficiency savings at our Hawaii Island and Maui County utilities; and
  • $1 million lower depreciation expense primarily from the change in depreciation rates and methods.

These increases were partially offset by $1 million lower kilowatthour sales at the Hawaii Island and Maui County utilities. Kilowatthour sales were down 0.5% and 3.0% for Hawaii Island and Maui County, respectively, primarily due to increased customer conservation.

O&M expenses(1) were flat compared to the same quarter last year. Higher bad debt expense of $4 million, primarily due to two large commercial accounts, and $2 million higher maintenance expense to safely and responsibly operate our systems were largely offset by $3 million lower administrative and general expense from a regulatory change in the capitalization of costs and by $2 million lower claims reserves. We expect total 2011 O&M, which would have been flat compared to 2010, to be 3% higher due to externalities such as bad debt.

(1) Excludes demand side management (DSM) program costs.  DSM program costs were $1 million in the third quarter of 2010 and 2011.  DSM program costs are recovered through a surcharge.

CONTINUED SOLID BANK PERFORMANCE AND MODERATE LOAN GROWTH

Bank net income for the third quarter 2011 was $15.5 million, essentially even with $15.2 million in the second, or linked, quarter 2011 and $15.3 million in the third quarter 2010.

Loan growth continued for the fourth consecutive quarter with an increase in loans of $40 million in the third quarter 2011.  Loan growth was driven primarily by home equity and commercial loans which more than offset the decline in residential mortgages resulting from the low interest rate environment.  Year-to-date, total loans increased by $129 million or 3.6%, meeting our target for mid-single digit loan growth.  

Net interest margin was 4.11% in the third quarter 2011, up from 4.07% in the linked quarter but down from 4.31% in the third quarter 2010.  The improvement in net interest margin from the linked quarter was primarily attributable to the recognition of deferred loan fees due to higher loan prepayments from residential mortgage refinancings and slightly lower cost of funds.  The third quarter 2010 was higher primarily due to higher yields on earning assets in 2010 and the recognition of deferred loan fees from the refinancing wave in the second half of 2010.

Provision for loan losses (pretax) was $3.8 million in the third quarter 2011 compared to $6.0 million in the third quarter 2010 and $2.6 million in the linked quarter.  With year-to-date provision expense of $10.9 million, the company expects full-year provision expense to be in the lower end of the guidance range of $15 to $20 million.

The third quarter 2011 net charge-off ratio was 0.54%.  This is up slightly from 0.45% reported in the linked quarter and from 0.53% in the third quarter last year, but remains low compared to our peers.  The increase from the linked quarter is primarily due to the partial charge-offs of two commercial credits.

Noninterest expense (pretax) for the third quarter 2011 of $35.6 million improved from $36.2 million in the linked quarter and $36.3 million in the third quarter 2010.  2011 annual noninterest expense is on track to meet our target of $145 million

The bank remains well-capitalized with a Tier 1 leverage ratio of 9.1% and total risk-based capital ratio of 13.0% as of the end of the third quarter 2011.

HOLDING AND OTHER COMPANIES

The holding and other companies' net losses were $5.0 million in the third quarter 2011 compared to $4.8 million in the third quarter 2010.

BOARD DECLARES QUARTERLY DIVIDEND

On November 2, 2011, the board of directors of HEI maintained the regular quarterly cash dividend of 31 cents per share, payable on December 13, 2011, to shareholders of record at the close of business on November 21, 2011 (ex-dividend date is November 17, 2011).  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 November 2, 2011 of $25.36, HEI's yield is 4.9%.

WEBCAST AND TELECONFERENCE

Hawaiian Electric Industries, Inc. will conduct a webcast and teleconference call to review its third quarter 2011 earnings on Thursday, November 3, 2011, at 8:00 a.m. Hawaii time (2:00 p.m. Eastern time).  The event can be accessed through HEI's website at www.hei.com or by dialing (800) 299-7635, passcode:  75157227 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 additional 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 Savings Bank, F.S.B.'s (ASB) press releases, SEC filings and public conference calls and webcasts.  The information on HEI's website is not incorporated by reference in this document or in the Company's SEC filings unless, and except to the extent, specifically incorporated by reference.  Investors may also wish to refer to the 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 the Company'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 November 17, 2011, by dialing (888) 286-8010, passcode: 80767105.

HEI supplies power to over 400,000 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 ASB, 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" discussions (which are incorporated by reference herein) set forth on pages iv and v of HEI's Quarterly Reports on Form 10-Q for the quarters ended June 30, 2011 and September 30, 2011 (when filed), and in HEI's future periodic reports that discuss important factors that could cause HEI's results to differ materially from those anticipated in such statements.  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, 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.

Contact:

Shelee M.T. Kimura



Manager, Investor Relations &

Telephone: (808) 543-7384


Strategic Planning

E-mail:  skimura@hei.com



Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


Three months


Nine months





ended September 30,


ended September 30,

(in thousands, except per share amounts)


2011


2010


2011


2010

Revenues









Electric utility


$    820,254


$    623,126


$    2,194,327


$    1,755,332

Bank



66,100


71,429


197,731


213,975

Other



1


(14)


(751)


(62)





886,355


694,541


2,391,307


1,969,245

Expenses








Electric utility


745,298


571,783


2,031,645


1,619,945

Bank



42,931


47,040


128,988


142,040

Other



3,636


3,087


9,148


10,291





791,865


621,910


2,169,781


1,772,276

Operating income (loss)








Electric utility


74,956


51,343


162,682


135,387

Bank



23,169


24,389


68,743


71,935

Other



(3,635)


(3,101)


(9,899)


(10,353)





94,490


72,631


221,526


196,969










Interest expense–other than on deposit liabilities and other bank borrowings


(19,949)


(21,015)


(64,266)


(61,916)

Allowance for borrowed funds used during construction


658


492


1,731


2,061

Allowance for equity funds used during construction


1,570


1,197


4,131


4,817

Income before income taxes


76,769


53,305


163,122


141,931

Income taxes


27,894


20,385


57,700


51,677

Net income


48,875


32,920


105,422


90,254

Preferred stock dividends of subsidiaries


471


471


1,417


1,417

Net income for common stock


$      48,404


$      32,449


$       104,005


$         88,837

Basic earnings per common share


$          0.50


$          0.35


$             1.09


$             0.95

Diluted earnings per common share


$          0.50


$          0.35


$             1.09


$             0.95

Dividends per common share


$          0.31


$          0.31


$             0.93


$             0.93

Weighted-average number of common shares outstanding


95,873


93,699


95,365


93,148

Adjusted weighted-average shares


96,100


93,891


95,671


93,405












Income (loss) by segment









   Electric utility


$      37,959


$      21,980


$         74,172


$         57,674

   Bank


15,457


15,293


44,503


45,160

   Other


(5,012)


(4,824)


(14,670)


(13,997)

Net income for common stock


$      48,404


$      32,449


$       104,005


$         88,837












This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference and included in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HEI's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011 (when filed). 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 BALANCE SHEETS



(Unaudited)




September 30,

December 31,

(dollars in thousands)

2011

2010

Assets



Cash and cash equivalents

$       283,483

$      330,651

Accounts receivable and unbilled revenues, net

342,901

266,996

Available-for-sale investment and mortgage-related securities

571,045

678,152

Investment in stock of Federal Home Loan Bank of Seattle

97,764

97,764

Loans receivable held for investment, net

3,622,181

3,489,880

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

25,016

7,849

Property, plant and equipment, net of accumulated depreciation of



   $2,033,576 in 2011 and $2,037,598 in 2010

3,248,658

3,165,918

Regulatory assets

494,487

478,330

Other

496,638

487,614

Goodwill

82,190

82,190

    Total assets

$    9,264,363

$   9,085,344

Liabilities and shareholders' equity



Liabilities



Accounts payable

$       165,909

$      202,446

Interest and dividends payable

28,010

27,814

Deposit liabilities

4,062,801

3,975,372

Short-term borrowings—other than bank

51,195

24,923

Other bank borrowings

237,934

237,319

Long-term debt, net—other than bank

1,340,038

1,364,942

Deferred income taxes

342,232

278,958

Regulatory liabilities

313,299

296,797

Contributions in aid of construction

344,110

335,364

Other

806,784

823,479

    Total liabilities

7,692,312

7,567,414




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:  95,975,524 shares in 2011 and 94,690,932 shares in 2010

1,347,255

1,314,199

Retained earnings

197,165

181,910

Accumulated other comprehensive loss, net of tax benefits

(6,662)

(12,472)

    Total shareholders' equity

1,537,758

1,483,637

    Total liabilities and shareholders' equity

$    9,264,363

$   9,085,344




This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference and included in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HEI's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011 (when filed). 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)



Nine months ended September 30,

2011

2010

(in thousands)



Cash flows from operating activities



Net income

$ 105,422

$  90,254

Adjustments to reconcile net income to net cash provided by operating activities



     Depreciation of property, plant and equipment

111,516

117,109

     Other amortization

14,552

2,995

     Provision for loan losses

10,927

12,310

     Loans receivable originated and purchased, held for sale

(137,507)

(286,950)

     Proceeds from sale of loans receivable, held for sale

127,163

306,587

     Changes in deferred income taxes

60,957

75,821

     Changes in excess tax benefits from share-based payment arrangements

(39)

56

     Allowance for equity funds used during construction

(4,131)

(4,817)

     Change in cash overdraft

(2,688)

884

     Changes in assets and liabilities



          Increase in accounts receivable and unbilled revenues, net

(75,905)

(18,016)

          Increase in fuel oil stock

(4,592)

(42,569)

          Decrease in accounts, interest and dividends payable

(57,746)

(25,433)

          Changes in prepaid and accrued income taxes and utility revenue taxes

40,418

(45,787)

         Changes in other assets and liabilities

(87,258)

(5,585)

Net cash provided by operating activities

101,089

176,859

Cash flows from investing activities



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

(202,061)

(485,495)

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

283,931

350,673

Proceeds from sale of available-for-sale investment and mortgage-related securities

32,799

-

Net decrease (increase)  in loans held for investment

(153,745)

171,242

Proceeds from sale of real estate acquired in settlement of loans

5,298

3,405

Capital expenditures

(148,107)

(124,900)

Contributions in aid of construction

15,106

16,775

Other

(2,923)

1,615

Net cash used in investing activities

(169,702)

(66,685)

Cash flows from financing activities



Net increase (decrease) in deposit liabilities

87,429

(100,124)

Net increase (decrease) in short-term borrowings with original maturities of



  three months or less

26,272

(14,693)

Net increase (decrease) in retail repurchase agreements

614

(51,057)

Proceeds from issuance of long-term debt

125,000

-

Repayment of long-term debt

(150,000)

-

Changes in excess tax benefits from share-based payment arrangements

39

(56)

Net proceeds from issuance of common stock

14,861

16,672

Common stock dividends

(77,070)

(69,585)

Preferred stock dividends of subsidiaries

(1,417)

(1,417)

Other

(4,283)

(6,348)

Net cash provided by (used in) financing activities

21,445

(226,608)

Net decrease in cash and cash equivalents

(47,168)

(116,434)

Cash and cash equivalents, beginning of period

330,651

503,922

Cash and cash equivalents, end of period

$ 283,483

$387,488




This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference and included in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HEI's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011 (when filed). 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


Nine months



ended September 30,


ended September 30,

(dollars in thousands, except per barrel amounts)


2011


2010


2011


2010










Operating revenues


$           818,907


$            622,223


$       2,190,860


$       1,751,029

Operating expenses









Fuel oil


352,475


235,534


925,476


662,608

Purchased power


188,484


147,880


508,179


404,175

Other operation


61,415


62,665


194,334


182,163

Maintenance


32,336


30,618


92,808


89,894

Depreciation


34,983


36,277


107,673


113,568

Taxes, other than income taxes


75,355


58,317


202,502


164,278

Income taxes


23,860


14,818


46,630


36,972



768,908


586,109


2,077,602


1,653,658

Operating income


49,999


36,114


113,258


97,371

Other income









Allowance for equity funds used during construction


1,570


1,197


4,131


4,817

Other, net


1,170


510


2,978


2,123



2,740


1,707


7,109


6,940

Interest and other charges









Interest on long-term debt


14,383


14,383


43,149


43,149

Amortization of net bond premium and expense


767


799


2,316


2,192

Other interest charges


(210)


653


965


1,861

Allowance for borrowed funds used during construction


(658)


(492)


(1,731)


(2,061)



14,282


15,343


44,699


45,141

Net income


38,457


22,478


75,668


59,170

Preferred stock dividends of subsidiaries


228


228


686


686

Net income attributable to HECO


38,229


22,250


74,982


58,484

Preferred stock dividends of HECO


270


270


810


810

Net income for common stock


$             37,959


$              21,980


$            74,172


$            57,674

OTHER ELECTRIC UTILITY INFORMATION









Kilowatthour sales (millions)


2,448


2,497


7,159


7,144

Wet-bulb temperature (Oahu average; degrees Fahrenheit)


71.5


69.8


69.7


67.8

Cooling degree days (Oahu)


1,504


1,428


3,681


3,495

Average fuel oil cost per barrel


$135.66


$89.97


$120.13


$86.12

Customer accounts (end of period)


446,144


444,190
















 Twelve months ended 





Return on average common equity  


September 30, 2011 





(rate-making, simple average method)


Allowed %(1)


Actual %





  HECO


10.00


6.36





  HELCO


10.50


10.02





  MECO


10.50


6.82





(1)  Based on the decisions applicable to rates in effect on September 30, 2011 (interim decisions for HELCO and MECO; interim decision for HECO, which reflects the approval of decoupling and other cost-recovery mechanisms). Interim rates of HECO, HELCO and MECO became effective in July 2011, January 2011 and August 2010, respectively.


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, 2010 and the consolidated financial statements and the notes thereto in HECO's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011 (when filed). 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 BALANCE SHEETS

(Unaudited)


September 30,

December 31,

(in thousands, except share data)

2011

2010

Assets



Utility plant, at cost



Land

$         51,468

$        51,364

Plant and equipment

4,951,799

4,896,974

Less accumulated depreciation

(1,948,464)

(1,941,059)

Construction in progress

136,640

101,562

    Net utility plant

3,191,443

3,108,841

Current assets



Cash and cash equivalents

13,869

122,936

Customer accounts receivable, net

182,932

138,171

Accrued unbilled revenues, net

137,887

104,384

Other accounts receivable, net

7,581

9,376

Fuel oil stock, at average cost

157,297

152,705

Materials and supplies, at average cost

41,997

36,717

Prepayments and other

33,156

55,216

Regulatory assets

9,847

7,349

    Total current assets

584,566

626,854

Other long-term assets



Regulatory assets

484,640

470,981

Unamortized debt expense

12,744

14,030

Other

77,366

64,974

    Total other long-term assets

574,750

549,985

         Total assets

$    4,350,759

$   4,285,680

Capitalization and liabilities



Capitalization



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



   13,830,823 shares

$         92,224

$        92,224

Premium on capital stock

389,609

389,609

Retained earnings

876,109

854,856

Accumulated other comprehensive income, net of income taxes

905

709

    Common stock equity

1,358,847

1,337,398

Cumulative preferred stock – not subject to mandatory redemption

34,293

34,293

Long-term debt, net

1,000,538

1,057,942

    Total capitalization

2,393,678

2,429,633

Current liabilities



Current portion of long-term debt

57,500

-

Short-term borrowings from nonaffiliates

12,498

-

Accounts payable

140,838

178,959

Interest and preferred dividends payable

21,349

20,603

Taxes accrued

199,543

175,960

Other

54,413

56,354

    Total current liabilities

486,141

431,876

Deferred credits and other liabilities



Deferred income taxes

320,582

269,286

Regulatory liabilities

313,299

296,797

Unamortized tax credits

59,947

58,810

Retirement benefits liability

325,060

355,844

Other

107,942

108,070

    Total deferred credits and other liabilities

1,126,830

1,088,807

Contributions in aid of construction

344,110

335,364

         Total capitalization and liabilities

$    4,350,759

$   4,285,680




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, 2010 and the consolidated financial statements and the notes thereto in HECO's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011 (when filed). 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)

Nine months ended September 30,

2011

2010

(in thousands)



Cash flows from operating activities



Net income

$  75,668

$  59,170

Adjustments to reconcile net income to cash provided by operating activities



     Depreciation of property, plant and equipment

107,673

113,568

     Other amortization

12,694

5,360

     Changes in deferred income taxes

51,120

74,720

     Changes in tax credits, net

1,416

1,939

     Allowance for equity funds used during construction

(4,131)

(4,817)

     Change in cash overdraft

(2,688)

884

     Changes in assets and liabilities



          Increase in accounts receivable

(42,966)

(6,784)

          Increase in accrued unbilled revenues

(33,503)

(11,590)

          Increase in fuel oil stock

(4,592)

(42,569)

          Increase in materials and supplies

(5,280)

(385)

          Increase in regulatory assets

(34,231)

(3,269)

          Decrease in accounts payable

(59,526)

(28,729)

          Changes in prepaid and accrued income taxes and utility revenue taxes

44,498

(55,202)

          Changes in other assets and liabilities

(45,684)

1,415

Net cash provided by operating activities

60,468

103,711

Cash flows from investing activities



Capital expenditures

(142,734)

(118,412)

Contributions in aid of construction

15,106

16,775

Other

77

657

Net cash used in investing activities

(127,551)

(100,980)

Cash flows from financing activities



Common stock dividends

(52,919)

(38,360)

Preferred stock dividends of HECO and subsidiaries

(1,496)

(1,496)

Net increase in short-term borrowings from nonaffiliates and



affiliate with original maturities of three months or less

12,498

-

Other

(67)

(1,409)

Net cash used in financing activities

(41,984)

(41,265)

Net decrease in cash and cash equivalents

(109,067)

(38,534)

Cash and cash equivalents, beginning of period

122,936

73,578

Cash and cash equivalents, end of period

$  13,869

$  35,044




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, 2010 and the consolidated financial statements and the notes thereto in HECO's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011 (when filed). 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. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME DATA

(Unaudited)


Three months ended


Nine months ended 



September 30,


June 30,


September 30,


 September 30, 

(in thousands)


2011


2011


2010


2011


2010

Interest and dividend income











Interest and fees on loans


$          46,240


$ 45,648


$          49,221


$ 137,985


$ 148,294

Interest and dividends on investment and mortgage-related securities


3,654


3,793


3,852


11,216


10,815

    Total interest and dividend income


49,894


49,441


53,073


149,201


159,109

Interest expense











Interest on deposit liabilities


2,166


2,387


3,390


7,146


11,665

Interest on other borrowings


1,375


1,382


1,414


4,124


4,258

    Total interest expense


3,541


3,769


4,804


11,270


15,923

Net interest income


46,353


45,672


48,269


137,931


143,186

Provision for loan losses


3,822


2,555


5,961


10,927


12,310

Net interest income after provision for loan losses


42,531


43,117


42,308


127,004


130,876

Noninterest income











Fee income on deposit liabilities


4,492


4,599


6,109


13,540


21,520

Fees from other financial services


7,219


7,240


6,781


21,405


19,844

Fee income on other financial products


1,806


1,861


1,697


5,340


4,957

Other income


2,689


3,177


3,769


8,245


8,545

    Total noninterest income


16,206


16,877


18,356


48,530


54,866

Noninterest expense











Compensation and employee benefits


17,646


18,166


18,168


53,317


54,477

Occupancy


4,313


4,288


4,176


12,841


12,617

Data processing


2,451


2,058


2,019


6,479


10,921

Services


1,686


1,949


1,544


5,406


5,117

Equipment


1,712


1,772


1,600


5,141


4,949

Other expense


7,763


7,955


8,798


23,651


25,819

    Total noninterest expense


35,571


36,188


36,305


106,835


113,900

Income before income taxes


23,166


23,806


24,359


68,699


71,842

Income taxes


7,709


8,611


9,066


24,196


26,682

Net income


$          15,457


$ 15,195


$          15,293


$   44,503


$   45,160























OTHER BANK INFORMATION (%)











Return on average assets


1.26


1.24


1.26


1.22


1.23

Return on average equity  


12.32


12.19


12.04


11.91


11.96

Net interest margin


4.11


4.07


4.31


4.11


4.23

Net charge-offs to average loans outstanding (annualized)


0.54


0.45


0.53


0.50


0.58

Efficiency ratio


56


57


54


57


57

As of period end











Nonperforming assets to loans outstanding and real estate owned **


1.94


1.69


1.87





Allowance for loan losses to loans outstanding


1.04


1.09


1.09





Tier-1 leverage ratio


9.1


9.1


9.3





Total risk-based capital ratio


13.0


13.3


14.2





Tangible common equity to total assets


8.6


8.5


8.8
















**  Regulatory basis






















This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference and included in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HEI's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011 (when filed). 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. and Subsidiaries 

CONSOLIDATED BALANCE SHEETS DATA

(Unaudited)




September 30,

December 31,

(in thousands)

2011

2010




Assets



Cash and cash equivalents

$       267,961

$      204,397

Federal funds sold

-

1,721

Available-for-sale investment and mortgage-related securities

571,045

678,152

Investment in stock of Federal Home Loan Bank of Seattle

97,764

97,764

Loans receivable held for investment, net

3,622,181

3,489,880

Loans held for sale at lower of cost or fair value

25,016

7,849

Other

234,506

234,806

Goodwill

82,190

82,190

    Total assets

$    4,900,663

$   4,796,759




Liabilities and shareholder's equity



Deposit liabilities–noninterest-bearing

$       951,978

$      865,642

Deposit liabilities–interest-bearing

3,110,823

3,109,730

Other borrowings

237,934

237,319

Other

99,067

90,683

    Total liabilities

4,399,802

4,303,374




Common stock

331,678

330,562

Retained earnings

170,614

169,111

Accumulated other comprehensive loss, net of tax benefits

(1,431)

(6,288)

    Total shareholder's equity

500,861

493,385

    Total liabilities and shareholder's equity

$    4,900,663

$   4,796,759




This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference and included in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HEI's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011 (when filed). Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.



SOURCE Hawaiian Electric Industries, Inc.



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