American Savings Bank Reports First Quarter 2024 Financial Results
-
1Q 2024 Net Income of
$20.9 million , an increase of 12.8% from 1Q 2023 - Strategic Balance Sheet Repositioning Executed in the Fourth Quarter of 2023 Contributed to Improved Profitability and Net Interest Margin Expansion
-
Release of Maui Wildfire-Related Reserves Reflects Brighter Outlook for
Maui Economy - Strong Credit Quality, Liquidity and Capital Position
“American Savings Bank executed well in the first quarter, generating higher net income compared to both the linked quarter and the same quarter last year,” said
___________
1 See the “Explanation of ASB’s Use of Certain Unaudited Non-GAAP Measures” and the related GAAP reconciliation at the end of this release.
Financial Highlights
First quarter 2024 net interest income was
In the first quarter ASB recorded a negative provision for credit losses of
The net charge-off ratio for the first quarter of 2024 was 0.14%, compared to 0.15% in the linked quarter and 0.14% in the first quarter of 2023. Nonaccrual loans as a percentage of total loans receivable held for investment were 0.53%, compared to 0.46% in the linked quarter and 0.24% in the prior year quarter.
Noninterest income was
Noninterest expense was
Total loans were
Total deposits were
Wholesale funding totaled
For the first quarter of 2024, return on average equity was 15.6%, compared to 2.7% in the linked quarter and 15.5% in the first quarter of 2023. Return on average assets was 0.88% for the first quarter of 2024, compared to 0.13% in the linked quarter and 0.78% in the prior year quarter.
In the first quarter of 2024, ASB did not pay a dividend to HEI, supporting ASB’s healthy capital levels. ASB had a Tier 1 leverage ratio of 8.0% as of
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 first quarter 2024 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 first quarter 2024.
HEI plans to announce its first quarter 2024 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
NON-GAAP MEASURES
Core net income is a non-GAAP measure which excludes Maui wildfire-related after-tax costs. See “Explanation of ASB’s Use of Certain Unaudited Non-GAAP Measures” and the related GAAP reconciliations at the end of this release.
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
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|||||||||||
STATEMENTS OF INCOME DATA |
|||||||||||
(Unaudited) |
|||||||||||
|
|
Three months ended |
|||||||||
(in thousands) |
|
|
|
|
|
|
|||||
Interest and dividend income |
|
|
|
|
|
|
|||||
Interest and fees on loans |
|
$ |
72,971 |
|
|
$ |
72,340 |
|
|
$ |
64,842 |
Interest and dividends on investment securities |
|
|
14,964 |
|
|
|
15,587 |
|
|
|
14,637 |
Total interest and dividend income |
|
|
87,935 |
|
|
|
87,927 |
|
|
|
79,479 |
Interest expense |
|
|
|
|
|
|
|||||
Interest on deposit liabilities |
|
|
17,432 |
|
|
|
17,961 |
|
|
|
6,837 |
Interest on other borrowings |
|
|
8,154 |
|
|
|
8,721 |
|
|
|
7,721 |
Total interest expense |
|
|
25,586 |
|
|
|
26,682 |
|
|
|
14,558 |
Net interest income |
|
|
62,349 |
|
|
|
61,245 |
|
|
|
64,921 |
Provision for credit losses |
|
|
(2,159 |
) |
|
|
304 |
|
|
|
1,175 |
Net interest income after provision for credit losses |
|
|
64,508 |
|
|
|
60,941 |
|
|
|
63,746 |
Noninterest income |
|
|
|
|
|
|
|||||
Fees from other financial services |
|
|
4,874 |
|
|
|
4,643 |
|
|
|
4,679 |
Fee income on deposit liabilities |
|
|
4,898 |
|
|
|
5,104 |
|
|
|
4,599 |
Fee income on other financial products |
|
|
2,743 |
|
|
|
2,664 |
|
|
|
2,744 |
Bank-owned life insurance |
|
|
3,584 |
|
|
|
1,707 |
|
|
|
1,425 |
Mortgage banking income |
|
|
424 |
|
|
|
209 |
|
|
|
130 |
Loss on sale of investment securities |
|
|
— |
|
|
|
(14,965 |
) |
|
|
— |
Other income, net |
|
|
686 |
|
|
|
693 |
|
|
|
801 |
Total noninterest income |
|
|
17,209 |
|
|
|
55 |
|
|
|
14,378 |
Noninterest expense |
|
|
|
|
|
|
|||||
Compensation and employee benefits |
|
|
32,459 |
|
|
|
28,797 |
|
|
|
30,204 |
Occupancy |
|
|
5,063 |
|
|
|
5,422 |
|
|
|
5,588 |
Data processing |
|
|
4,846 |
|
|
|
5,305 |
|
|
|
5,012 |
Services |
|
|
4,151 |
|
|
|
5,032 |
|
|
|
2,595 |
Equipment |
|
|
2,649 |
|
|
|
3,114 |
|
|
|
2,646 |
Office supplies, printing and postage |
|
|
1,018 |
|
|
|
1,019 |
|
|
|
1,165 |
Marketing |
|
|
776 |
|
|
|
1,167 |
|
|
|
1,016 |
Other expense |
|
|
4,942 |
|
|
|
9,250 |
|
|
|
6,191 |
Total noninterest expense |
|
|
55,904 |
|
|
|
59,106 |
|
|
|
54,417 |
Income before income taxes |
|
|
25,813 |
|
|
|
1,890 |
|
|
|
23,707 |
Income taxes |
|
|
4,879 |
|
|
|
(1,341 |
) |
|
|
5,145 |
Net income |
|
$ |
20,934 |
|
|
$ |
3,231 |
|
|
$ |
18,562 |
Comprehensive income (loss) |
|
$ |
11,166 |
|
|
$ |
70,585 |
|
|
$ |
36,992 |
OTHER BANK INFORMATION (annualized %, except as of period end) |
|
|
|
|
|||||||
Return on average assets |
|
|
0.88 |
|
|
|
0.13 |
|
|
|
0.78 |
Return on average equity |
|
|
15.64 |
|
|
|
2.74 |
|
|
|
15.51 |
Return on average tangible common equity |
|
|
18.48 |
|
|
|
3.32 |
|
|
|
18.73 |
Net interest margin |
|
|
2.75 |
|
|
|
2.63 |
|
|
|
2.85 |
Efficiency ratio |
|
|
70.27 |
|
|
|
96.42 |
|
|
|
68.62 |
Net charge-offs to average loans outstanding |
|
|
0.14 |
|
|
|
0.15 |
|
|
|
0.14 |
As of period end |
|
|
|
|
|
|
|||||
Nonaccrual loans to loans receivable held for investment |
|
|
0.53 |
|
|
|
0.46 |
|
|
|
0.24 |
Allowance for credit losses to loans outstanding |
|
|
1.16 |
|
|
|
1.20 |
|
|
|
1.18 |
Tangible common equity to tangible assets |
|
|
5.0 |
|
|
|
4.7 |
|
|
|
4.3 |
Tier-1 leverage ratio |
|
|
8.0 |
|
|
|
7.7 |
|
|
|
7.7 |
Dividend paid to HEI (via |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14.0 |
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 |
|
$ |
126,259 |
|
|
$ |
184,383 |
|
||||
Interest-bearing deposits |
|
|
100,681 |
|
|
|
251,072 |
|
||||
Cash and cash equivalents |
|
|
226,940 |
|
|
|
435,455 |
|
||||
Investment securities |
|
|
|
|
||||||||
Available-for-sale, at fair value |
|
|
1,091,889 |
|
|
|
1,136,439 |
|
||||
Held-to-maturity, at amortized cost |
|
|
1,191,074 |
|
|
|
1,201,314 |
|
||||
Stock in |
|
|
32,489 |
|
|
|
14,728 |
|
||||
Loans held for investment |
|
|
6,116,722 |
|
|
|
6,180,810 |
|
||||
Allowance for credit losses |
|
|
(71,057 |
) |
|
|
(74,372 |
) |
||||
Net loans |
|
|
6,045,665 |
|
|
|
6,106,438 |
|
||||
Loans held for sale, at lower of cost or fair value |
|
|
2,923 |
|
|
|
15,168 |
|
||||
Other |
|
|
687,059 |
|
|
|
681,460 |
|
||||
|
|
|
82,190 |
|
|
|
82,190 |
|
||||
Total assets |
|
$ |
9,360,229 |
|
|
$ |
9,673,192 |
|
||||
Liabilities and shareholder’s equity |
|
|
|
|
||||||||
Deposit liabilities–noninterest-bearing |
|
$ |
2,557,240 |
|
|
$ |
2,599,762 |
|
||||
Deposit liabilities–interest-bearing |
|
|
5,447,824 |
|
|
|
5,546,016 |
|
||||
Other borrowings |
|
|
593,000 |
|
|
|
750,000 |
|
||||
Other |
|
|
220,570 |
|
|
|
247,563 |
|
||||
Total liabilities |
|
|
8,818,634 |
|
|
|
9,143,341 |
|
||||
Common stock |
|
|
1 |
|
|
|
1 |
|
||||
Additional paid-in capital |
|
|
358,645 |
|
|
|
358,067 |
|
||||
Retained earnings |
|
|
484,989 |
|
|
|
464,055 |
|
||||
Accumulated other comprehensive loss, net of tax benefits |
|
|
|
|
||||||||
Net unrealized losses on securities |
$ |
(293,466 |
) |
|
$ |
(282,963 |
) |
|
||||
Retirement benefit plans |
|
(8,574 |
) |
|
(302,040 |
) |
|
(9,309 |
) |
|
(292,272 |
) |
Total shareholder’s equity |
|
|
541,595 |
|
|
|
529,851 |
|
||||
Total liabilities and shareholder’s equity |
|
$ |
9,360,229 |
|
|
$ |
9,673,192 |
|
||||
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 Maui wildfires. Management does not consider these items to be representative of the company’s fundamental core earnings.
Reconciliation of GAAP to non-GAAP Measures |
||||
|
||||
Unaudited |
||||
(in thousands) |
|
Three months ended |
||
Maui wildfire related costs |
|
|
||
Pretax expenses: |
|
|
||
Provision for credit losses |
|
$ |
(1,500 |
) |
Professional services expense |
|
|
1,708 |
|
Other expenses, net |
|
|
(317 |
) |
Pretax Maui wildfire related costs, net |
|
|
(109 |
) |
Income tax benefits |
|
|
29 |
|
After-tax expenses, net |
|
$ |
(80 |
) |
ASB net income |
|
|
||
GAAP (as reported) |
|
$ |
20,934 |
|
Maui wildfire costs (after tax): |
|
|
||
Provision for credit losses |
|
|
(1,098 |
) |
Professional services expense |
|
|
1,250 |
|
Other expenses, net |
|
|
(232 |
) |
Maui wildfire related cost, net (after tax) |
|
|
(80 |
) |
Non-GAAP (core) net income |
|
$ |
20,854 |
|
|
|
Three months ended |
|
Ratios (annualized %) |
|
|
|
Based on GAAP |
|
|
|
Return on average assets |
|
0.88 |
|
Return on average equity |
|
15.64 |
|
Return on average tangible common equity |
|
18.48 |
|
Efficiency ratio |
|
70.27 |
|
Based on Non-GAAP (core) |
|
|
|
Return on average assets |
|
0.88 |
|
Return on average equity |
|
15.58 |
|
Return on average tangible common equity |
|
18.41 |
|
Efficiency ratio |
|
68.52 |
|
1 Accounting principles generally accepted in |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240430895429/en/
Director, Investor Relations
ir@hei.com
Source: