American Savings Bank Reports Fourth Quarter and Full Year 2023 Financial Results
-
Full Year
Net Income of$53.4 Million -
2023 Results Include an
$11.0 Million After-tax Loss Resulting from a Fourth Quarter Balance Sheet Repositioning Strategy, and$8.3 Million of After-tax Maui Wildfire-Related Expenses - Balance Sheet Repositioning Strategy Strengthens Balance Sheet and Positions Bank for Improved Net Interest Margin and Profitability
- Bank Maintains a Strong Liquidity Position and the Support of a Loyal, Long-tenured Deposit Base
- Continued Strong Credit Quality and Capital Position
“American Savings Bank continued to provide excellent service to our customers despite a year filled with unprecedented challenges. Our business proved resilient through the economic impacts of the
___________________
1 Core net income is a non-GAAP measure which excludes
Financial Highlights
Net interest income was
The provision for credit losses for 2023 was
The 2023 net charge-off ratio was 0.12% compared to 0.03% in 2022. The net charge-off ratio for the fourth quarter of 2023 was 0.15%, compared to 0.07% in the linked quarter and 0.06% in the fourth quarter of 2022. Nonaccrual loans as a percentage of total loans receivable held for investment were 0.46% as of
Noninterest income for 2023 was
Noninterest expense for 2023 was
Total earning assets as of
Total loans were
Total deposits were
Wholesale funding totaled
ASB’s return on average equity for the full year 2023 was 11.0% compared to 14.1% in 2022. For the fourth quarter of 2023, return on average equity was 2.7%, compared to 9.2% in the linked quarter and 15.7% in the fourth quarter of 2022. Core return on average equity for the year and quarter were 14.9% and 13.7%, respectively. Return on average assets for the full year was 0.55% in 2023 compared to 0.86% in 2022. For the fourth quarter of 2023, return on average assets was 0.13%, compared to 0.47% in the linked quarter and 0.76% in the prior year quarter. Core return on average assets was 0.75% and 0.67% for the year and quarter, respectively2.
In the fourth quarter of 2023, ASB did not pay a dividend to HEI, supporting its commitment towards helping our
HEI EARNINGS RELEASE, HEI WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS
Concurrent with ASB’s regulatory filing 30 days after the end of the quarter, ASB announced its fourth quarter and full year 2023 financial results today. Please note that these reported results relate only to ASB and are not necessarily indicative of HEI’s consolidated financial results for the fourth quarter and full year 2023.
HEI plans to announce its fourth quarter and full year 2023 consolidated financial results on
To listen to the conference call, dial 1-888-660-6377 (
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
Investors may also wish to refer to the
The HEI family of companies provides the energy and financial services that empower much of the economic and community activity of
___________________
2 Core returns on average equity and average assets are non-GAAP measures which exclude
NON-GAAP MEASURES
Core net income is a non-GAAP measure which excludes
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
STATEMENTS OF INCOME DATA (Unaudited) |
|||||||||||||||||||
|
|
Three months ended |
|
Years ended |
|||||||||||||||
(in thousands) |
|
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|||||
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest and fees on loans |
|
$ |
72,340 |
|
|
$ |
71,540 |
|
|
$ |
60,331 |
|
$ |
276,688 |
|
|
$ |
207,830 |
|
Interest and dividends on investment securities |
|
|
15,587 |
|
|
|
14,096 |
|
|
|
14,315 |
|
|
58,095 |
|
|
|
58,044 |
|
Total interest and dividend income |
|
|
87,927 |
|
|
|
85,636 |
|
|
|
74,646 |
|
|
334,783 |
|
|
|
265,874 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest on deposit liabilities |
|
|
17,961 |
|
|
|
14,446 |
|
|
|
3,755 |
|
|
48,905 |
|
|
|
7,327 |
|
Interest on other borrowings |
|
|
8,721 |
|
|
|
8,598 |
|
|
|
4,775 |
|
|
33,892 |
|
|
|
5,974 |
|
Total interest expense |
|
|
26,682 |
|
|
|
23,044 |
|
|
|
8,530 |
|
|
82,797 |
|
|
|
13,301 |
|
Net interest income |
|
|
61,245 |
|
|
|
62,592 |
|
|
|
66,116 |
|
|
251,986 |
|
|
|
252,573 |
|
Provision for credit losses |
|
|
304 |
|
|
|
8,835 |
|
|
|
2,729 |
|
|
10,357 |
|
|
|
2,037 |
|
Net interest income after provision for credit losses |
|
|
60,941 |
|
|
|
53,757 |
|
|
|
63,387 |
|
|
241,629 |
|
|
|
250,536 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|||||||||
Fees from other financial services |
|
|
4,643 |
|
|
|
4,703 |
|
|
|
4,764 |
|
|
19,034 |
|
|
|
19,830 |
|
Fee income on deposit liabilities |
|
|
5,104 |
|
|
|
4,924 |
|
|
|
4,640 |
|
|
19,131 |
|
|
|
18,762 |
|
Fee income on other financial products |
|
|
2,664 |
|
|
|
2,440 |
|
|
|
2,628 |
|
|
10,616 |
|
|
|
10,291 |
|
Bank-owned life insurance |
|
|
1,707 |
|
|
|
2,303 |
|
|
|
1,872 |
|
|
7,390 |
|
|
|
2,533 |
|
Mortgage banking income |
|
|
209 |
|
|
|
341 |
|
|
|
62 |
|
|
910 |
|
|
|
1,692 |
|
Gain on sale of real estate |
|
|
— |
|
|
|
— |
|
|
|
776 |
|
|
495 |
|
|
|
1,778 |
|
Loss on sale of investment securities |
|
|
(14,965 |
) |
|
|
— |
|
|
|
— |
|
|
(14,965 |
) |
|
|
— |
|
Other income, net |
|
|
693 |
|
|
|
627 |
|
|
|
606 |
|
|
2,799 |
|
|
|
2,086 |
|
Total noninterest income |
|
|
55 |
|
|
|
15,338 |
|
|
|
15,348 |
|
|
45,410 |
|
|
|
56,972 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|||||||||
Compensation and employee benefits |
|
|
28,797 |
|
|
|
29,902 |
|
|
|
30,361 |
|
|
118,297 |
|
|
|
113,839 |
|
Occupancy |
|
|
5,422 |
|
|
|
5,154 |
|
|
|
7,030 |
|
|
21,703 |
|
|
|
24,026 |
|
Data processing |
|
|
5,305 |
|
|
|
5,133 |
|
|
|
4,537 |
|
|
20,545 |
|
|
|
17,681 |
|
Services |
|
|
5,032 |
|
|
|
3,627 |
|
|
|
2,967 |
|
|
13,943 |
|
|
|
10,679 |
|
Equipment |
|
|
3,114 |
|
|
|
3,125 |
|
|
|
2,937 |
|
|
11,842 |
|
|
|
10,100 |
|
Office supplies, printing and postage |
|
|
1,019 |
|
|
|
1,022 |
|
|
|
1,142 |
|
|
4,315 |
|
|
|
4,398 |
|
Marketing |
|
|
1,167 |
|
|
|
984 |
|
|
|
1,091 |
|
|
4,001 |
|
|
|
3,968 |
|
Other expense |
|
|
9,250 |
|
|
|
7,399 |
|
|
|
6,034 |
|
|
28,992 |
|
|
|
20,576 |
|
Total noninterest expense |
|
|
59,106 |
|
|
|
56,346 |
|
|
|
56,099 |
|
|
223,638 |
|
|
|
205,267 |
|
Income before income taxes |
|
|
1,890 |
|
|
|
12,749 |
|
|
|
22,636 |
|
|
63,401 |
|
|
|
102,241 |
|
Income taxes |
|
|
(1,341 |
) |
|
|
1,384 |
|
|
|
4,739 |
|
|
10,039 |
|
|
|
22,252 |
|
Net income |
|
$ |
3,231 |
|
|
$ |
11,365 |
|
|
$ |
17,897 |
|
$ |
53,362 |
|
|
$ |
79,989 |
|
Comprehensive income (loss) |
|
$ |
70,585 |
|
|
$ |
(22,866 |
) |
|
$ |
29,282 |
|
$ |
97,705 |
|
|
$ |
(218,844 |
) |
OTHER BANK INFORMATION (annualized %, except as of period end) |
|
|
|
|
|
|
|
|
|||||||||||
Return on average assets |
|
|
0.13 |
|
|
|
0.47 |
|
|
|
0.76 |
|
|
0.55 |
|
|
|
0.86 |
|
Return on average equity |
|
|
2.74 |
|
|
|
9.19 |
|
|
|
15.73 |
|
|
10.98 |
|
|
|
14.08 |
|
Return on average tangible common equity |
|
|
3.32 |
|
|
|
11.02 |
|
|
|
19.20 |
|
|
13.22 |
|
|
|
16.46 |
|
Net interest margin |
|
|
2.63 |
|
|
|
2.70 |
|
|
|
2.91 |
|
|
2.74 |
|
|
|
2.89 |
|
Efficiency ratio |
|
|
96.42 |
|
|
|
72.30 |
|
|
|
68.86 |
|
|
75.20 |
|
|
|
66.31 |
|
Net charge-offs to average loans outstanding |
|
|
0.15 |
|
|
|
0.07 |
|
|
|
0.06 |
|
|
0.12 |
|
|
|
0.03 |
|
As of period end |
|
|
|
|
|
|
|
|
|
|
|||||||||
Nonaccrual loans to loans receivable held for investment |
|
|
0.46 |
|
|
|
0.16 |
|
|
|
0.28 |
|
|
|
|
||||
Allowance for credit losses to loans outstanding |
|
|
1.20 |
|
|
|
1.23 |
|
|
|
1.21 |
|
|
|
|
||||
Tangible common equity to tangible assets |
|
|
4.7 |
|
|
|
3.9 |
|
|
|
4.1 |
|
|
|
|
||||
Tier-1 leverage ratio |
|
|
7.7 |
|
|
|
7.7 |
|
|
|
7.8 |
|
|
|
|
||||
Dividend paid to HEI (via |
|
$ |
— |
|
|
$ |
14.0 |
|
|
$ |
10.0 |
|
$ |
39.0 |
|
|
$ |
42.0 |
|
This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI filings with the
BALANCE SHEETS DATA (Unaudited) |
||||||||||||
(in thousands) |
|
|
||||||||||
Assets |
|
|
|
|
||||||||
Cash and due from banks |
|
$ |
184,383 |
|
|
$ |
153,042 |
|
||||
Interest-bearing deposits |
|
|
251,072 |
|
|
|
3,107 |
|
||||
Cash and cash equivalents |
|
|
435,455 |
|
|
|
156,149 |
|
||||
Investment securities |
|
|
|
|
||||||||
Available-for-sale, at fair value |
|
|
1,136,439 |
|
|
|
1,429,667 |
|
||||
Held-to-maturity, at amortized cost |
|
|
1,201,314 |
|
|
|
1,251,747 |
|
||||
Stock in |
|
|
14,728 |
|
|
|
26,560 |
|
||||
Loans held for investment |
|
|
6,180,810 |
|
|
|
5,978,906 |
|
||||
Allowance for credit losses |
|
|
(74,372 |
) |
|
|
(72,216 |
) |
||||
Net loans |
|
|
6,106,438 |
|
|
|
5,906,690 |
|
||||
Loans held for sale, at lower of cost or fair value |
|
|
15,168 |
|
|
|
824 |
|
||||
Other |
|
|
681,460 |
|
|
|
692,143 |
|
||||
|
|
|
82,190 |
|
|
|
82,190 |
|
||||
Total assets |
|
$ |
9,673,192 |
|
|
$ |
9,545,970 |
|
||||
Liabilities and shareholder’s equity |
|
|
|
|
||||||||
Deposit liabilities–noninterest-bearing |
|
$ |
2,599,762 |
|
|
$ |
2,811,077 |
|
||||
Deposit liabilities–interest-bearing |
|
|
5,546,016 |
|
|
|
5,358,619 |
|
||||
Other borrowings |
|
|
750,000 |
|
|
|
695,120 |
|
||||
Other |
|
|
247,563 |
|
|
|
212,269 |
|
||||
Total liabilities |
|
|
9,143,341 |
|
|
|
9,077,085 |
|
||||
Common stock |
|
|
1 |
|
|
|
1 |
|
||||
Additional paid-in capital |
|
|
358,067 |
|
|
|
355,806 |
|
||||
Retained earnings |
|
|
464,055 |
|
|
|
449,693 |
|
||||
Accumulated other comprehensive loss, net of tax benefits |
|
|
|
|
||||||||
Net unrealized losses on securities |
$ |
(282,963 |
) |
|
$ |
(328,904 |
) |
|
||||
Retirement benefit plans |
|
(9,309 |
) |
|
(292,272 |
) |
|
(7,711 |
) |
|
(336,615 |
) |
Total shareholder’s equity |
|
|
529,851 |
|
|
|
468,885 |
|
||||
Total liabilities and shareholder’s equity |
|
$ |
9,673,192 |
|
|
$ |
9,545,970 |
|
This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI filings with the
Explanation of ASB’s Use of Certain Unaudited Non-GAAP Measures
HEI and ASB management use certain non-GAAP measures to evaluate the performance of HEI and the bank.
Management believes these non-GAAP measures provide useful information and are a better indicator of the companies’ core operating activities. Core earnings and other financial measures as presented here may not be comparable to similarly titled measures used by other companies. The accompanying tables provide a reconciliation of reported GAAP1 earnings to non-GAAP core earnings and returns on average equity and average assets for the bank.
The reconciling adjustments from GAAP earnings to core earnings are limited to the costs related to the recent
Reconciliation of GAAP1 to non-GAAP Measures
Unaudited |
||||||||
(in thousands) |
|
Three months ended
|
|
Year ended
|
||||
|
|
|
|
|
||||
Pretax expenses: |
|
|
|
|
||||
Provision for credit losses |
|
$ |
— |
|
|
$ |
5,900 |
|
Professional services expense |
|
|
2,405 |
|
|
|
3,705 |
|
Other expenses |
|
|
309 |
|
|
|
1,666 |
|
Pretax Maui wildfire related costs |
|
|
2,714 |
|
|
|
11,271 |
|
Pretax loss on sale of investment securities |
|
|
14,965 |
|
|
|
14,965 |
|
Income tax benefits |
|
|
(4,738 |
) |
|
|
(7,031 |
) |
After-tax expenses |
|
$ |
12,941 |
|
|
$ |
19,205 |
|
|
|
|
|
|
||||
ASB net income |
|
|
|
|
||||
GAAP (as reported) |
|
$ |
3,231 |
|
|
$ |
53,362 |
|
Excluding expense related to |
|
|
|
|
||||
Provision for credit losses |
|
|
— |
|
|
|
4,319 |
|
Professional services expense |
|
|
1,760 |
|
|
|
2,712 |
|
Other expenses |
|
|
227 |
|
|
|
1,220 |
|
Loss on sale of investment securities |
|
|
10,954 |
|
|
|
10,954 |
|
|
|
|
12,941 |
|
|
|
19,205 |
|
Non-GAAP (core) net income |
|
$ |
16,172 |
|
|
$ |
72,567 |
|
|
|
Three months ended
|
|
Year ended
|
||||
Ratios (annualized %) |
|
|
|
|
||||
Based on GAAP1 |
|
|
|
|
||||
Return on average assets |
|
0.13 |
|
0.55 |
||||
Return on average equity |
|
2.74 |
|
10.98 |
||||
Return on average tangible common equity |
|
3.32 |
|
13.22 |
||||
Efficiency ratio |
|
96.42 |
|
75.20 |
||||
Based on Non-GAAP (core) |
|
|
|
|
||||
Return on average assets |
|
0.67 |
|
0.75 |
||||
Return on average equity |
|
13.73 |
|
14.94 |
||||
Return on average tangible common equity |
|
16.63 |
|
17.98 |
||||
Efficiency ratio |
|
73.94 |
|
69.88 |
1 Accounting principles generally accepted in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240130061296/en/
Director, Investor Relations
Telephone: (808) 543-7300
E-mail: ir@hei.com
Source: