HEI REPORTS THIRD QUARTER 2022 RESULTS
Hawaiian Electric Industries (NYSE: HE) reported a third-quarter 2022 net income of $62.1 million with diluted earnings per share (EPS) at $0.57, slightly down from $63.4 million and $0.58 EPS in Q3 2021. The utility business showed resilience amid inflation, with notable performance in clean energy transition and strong credit trends in its banking arm, which posted a 9.3% year-to-date increase in total loans. A quarterly dividend of $0.35 per share was also declared, maintaining a 3.8% dividend yield.
- Consolidated net income of $62.1 million, reflecting steady utility performance.
- Strong loan growth of 9.3% year-to-date at American Savings Bank.
- Successful mitigation of inflation impacts in utility operations.
- Dividend declared at $0.35 per share, sustaining a 3.8% yield.
- Decreased net income for Hawaiian Electric from $50.3 million in Q3 2021 to $49.8 million in Q3 2022.
- Increased operations and maintenance expenses impacting profitability.
- Higher depreciation and interest expenses due to increased rates and investments.
3Q22 Net Income of
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
"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
$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
Total earning assets as of September 30, 2022 were
Total loans were
Total deposits were
ASB's return on average equity3 for the third quarter of 2022 was
In the third quarter of 2022, ASB paid dividends of
HOLDING AND OTHER COMPANIES
The holding and other companies' net loss was
BOARD DECLARES QUARTERLY DIVIDEND
On November 3, 2022, HEI announced that the Board of Directors declared a quarterly cash dividend of
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
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 | Nine months ended | |||||||
(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 | (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 | — | — | 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 | Nine months ended | |||||||
($ 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 | $ 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, | June 30, | September 30, | 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 |
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 |
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SOURCE Hawaiian Electric Industries, Inc.
FAQ
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