American Savings Bank Reports 2012 And Fourth Quarter Earnings

        American Savings Bank Reports 2012 And Fourth Quarter Earnings

2012 Net Income of $58.6 Million

Fourth Quarter 2012 Net Income of $14.4 Million

Bank Continues to Deliver Solid Results

PR Newswire

HONOLULU, Jan. 30, 2013

HONOLULU, Jan. 30, 2013 /PRNewswire/ -- American Savings Bank, F.S.B.
(American), a wholly-owned indirect subsidiary of Hawaiian Electric
Industries, Inc. (HEI) (NYSE - HE) today reported net income for the full year
of 2012 was $58.6 million compared with $59.8 million in 2011. Net income for
the fourth quarter of 2012 was $14.4 million, compared with $14.2 million in
the third, or linked, quarter of 2012 and $15.3 million in the fourth quarter
of 2011.  

"American delivered solid financial performance in 2012 and continued to
execute well on our strategic plan to safely grow the bank in the low interest
rate environment. We maintained good profitability levels with return on
average equity of 11.7% and continued to provide reliable dividends to our
parent. Our loans to customers increased 2.6% in 2012, with growth in each of
our strategic segments of commercial lending, commercial real estate, home
equity lending, and consumer lending. Our residential mortgage teams
originated nearly $1billion of new long-term residential mortgages, nearly
double the level of the prior year, bringing new customer relationships to the
bank. To control interest rate risk, we sold the investment associated with
more than half of those loans and generated gains on sale that helped fund
spending on the bank's strategic priorities. Some are visible, such as our new
mobile banking application that makes American the only bank in our market
offering customers the ability to deposit checks from anywhere using their
smartphone. Less visible but critically important, our new analytical tools
and data warehouse further strengthen our risk management and marketing
segmentation capabilities," said Richard Wacker, president and chief executive
officer of American.

Full Year Net Income:
2012 net income of $58.6 million was $1.2 million lower than 2011 net income,
reflecting the challenging low interest rate environment. The primary drivers
impacting net income for the year were (on an after-tax basis):

  o$4 million lower net interest income primarily due to declining asset
    yields, partially offset by the favorable effect of asset growth; and
  o$5 million higher noninterest expense primarily attributable to supporting
    higher transaction volumes and spending on the bank's strategic projects
    and priorities, as well as increasing employee benefit expenses.

These were largely offset by (after-tax):

  o$6 million higher noninterest income primarily due to higher gains on
    sales of new residential mortgages; and
  o$1 million lower provision for loan losses.

Fourth Quarter Net Income:
Fourth quarter 2012 net income of $14.4 million was essentially flat with the
linked quarter as higher noninterest income driven mainly by higher gains on
sales of newly originated residential real estate loans was offset by higher
noninterest expense and lower net interest income.

Compared to the same quarter of 2011, net income declined by $1.0 million
primarily driven by (on an after-tax basis):

  o$2 million lower net interest income from declining asset yields due to
    the persistent low rate environment; and
  o$3 million higher noninterest expense as previously discussed.

These were offset by $4 million higher noninterest income primarily due to
higher gains on sale of new residential mortgages and higher fee income.

Financial Highlights:
Net interest margin was 3.93% in 2012 compared to 4.12% in 2011. Net interest
margin was 3.81% in the fourth quarter of 2012 compared to 3.92% in the linked
quarter and 4.16% in the fourth quarter of 2011. The decline in net interest
margin was primarily attributable to lower yields on interest-earning assets
as loans continued to reprice down due to the low interest rate environment.

The provision for loan losses (pretax) was $12.9 million in 2012 compared to
$15.0million in 2011. The $2.1 million decline in the provision from the
prior year was driven by lower net charge-offs consistent with the ongoing
improvement in the bank's loan portfolio and the Hawaii economy. The 2012 net
charge-off ratio improved to 0.24% from 0.49% in 2011. The fourth quarter of
2012 provision for loan losses was $3.4 million, $0.2 million lower than the
linked quarter and $0.7 million lower than fourth quarter of 2011. Similarly,
the fourth quarter 2012 net charge-off ratio improved to 0.13% from 0.35% in
the linked quarter and 0.48% in the prior year quarter.

Noninterest expense (pretax) for 2012 was $152.3 million, up from
$143.4million in 2011. The higher gain on sale revenue enabled management to
strategically increase spending to support higher transaction volumes and to
build capabilities for future growth. 2012 expenses were also impacted by
higher employee benefit expenses including lower discount rates on pension
expenses. In the fourth quarter 2012, non-interest expense (pretax) was $40.9
million, up from $38.6million in the linked quarter and $36.6 million in the
fourth quarter of 2011.

Loan growth was 2.6% in 2012, in line with the bank's target of low to
mid-single digit loan growth. Consistent with American's strategy to control
interest rate risk, loan growth was primarily driven by shorter-duration and
variable rate loans. For the year, American ranked #1 in Hawaii for home
equity line of credit loan production, growing that portfolio by 18%. This
growth was offset by a controlled decline in the level of long-term fixed
rate residential mortgages held on the balance sheet and lower land loans.

Total deposits were $4.2 billion at December 31, 2012, up $103 million from
September30, 2012 and up $160 million from December 31, 2011. Low-cost core
deposits increased $130 million from September 30, 2012 and $230 million from
December 31, 2011. The average cost of funds was 0.26% for the full year
2012, down 8basis points from the prior year. For the fourth quarter 2012,
average cost of funds was a very low 0.23%, down 2basis points from the
linked quarter and down 6 basis points from the prior year quarter. 

Overall, American's return on average equity for the full year remained solid
at 11.7% in 2012 compared to 12.0% in 2011 and the return on average assets
for the full year was 1.18% in 2012 compared to 1.23% in 2011. For the fourth
quarter 2012, the return on average equity was 11.3%, up slightly from 11.2%
in the linked quarter but down from 12.2% in the same quarter last year.
Return on average assets was 1.15% for the fourth quarter of 2012, unchanged
from the linked quarter and down from 1.26% in the same quarter last year.

In 2012, American paid dividends of $45 million to HEI while maintaining
healthy capital levels -- leverage ratio of 9.1% and total risk-based capital
ratio of 12.8% at December31, 2012.

HEI EARNINGS RELEASE, WEBCAST AND CONFERENCE CALL
Concurrent with American's regulatory filing 30 days after the end of the
quarter, American announced its fourth quarter 2012 financial results today.
Please note that these reported results relate only to American and are not
necessarily indicative of HEI's consolidated financial results for the fourth
quarter and full year 2012.

HEI plans to announce its fourth quarter and 2012 consolidated financial
results on Friday, February 15, 2013 and will conduct a webcast and conference
call to review its consolidated earnings, including American's earnings, and
management's outlook for 2013, on Friday, February15,2013, at 12:00 noon
Hawaii time (5:00 p.m. Eastern time). The event can be accessed through HEI's
website at www.hei.com or by dialing (866)202-3048, passcode: 97355196 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's press releases, HEI's and HECO's Securities and Exchange
Commission (SEC) filings and HEI's public conference calls and webcasts. 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 and will remain on HEI's website for
12 months. Replays of the conference call will also be available
approximately two hours after the event through March 1, 2013, by dialing
(888)286-8010, passcode: 47992097.

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 Quarterly Report on Form
10-Q for the quarter ended September30, 2012 and HEI's future 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.



American Savings Bank, F.S.B.
STATEMENTS OF INCOME DATA
(Unaudited)                            Three months ended
                              December September  December  Years ended
                              31,     30,       31,
                                                            December 31,
(in thousands)                2012       2012     2011      2012       2011
Interest income
Interest and fees on loans    $        $      $       $176,057   $  
                              42,816    43,880   46,500              184,485
Interest on investment and    3,288      3,432    3,352     13,822     14,568
mortgage-related securities
 Total interest income    46,104     47,312   49,852    189,879    199,053
Interest expense
Interest on deposit           1,408      1,540    1,837     6,423      8,983
liabilities
Interest on other borrowings  1,193      1,201    1,362     4,869      5,486
 Total interest expense   2,601      2,741    3,199     11,292     14,469
Net interest income           43,503     44,571   46,653    178,587    184,584
Provision for loan losses     3,379      3,580    4,082     12,883     15,009
Net interest income after     40,124     40,991   42,571    165,704    169,575
provision for loan losses
Noninterest income
Fees from other financial     8,887      7,674    7,476     31,361     28,881
services
Fee income on deposit         4,648      4,527    4,486     17,775     18,026
liabilities
Fee income on other financial 1,836      1,660    1,364     6,577      6,704
products
Gain on sale of loans         6,331      4,077    2,760     14,628     5,028
Other income                  1,164      1,346    738       5,319      6,715
 Total noninterest income 22,866     19,284   16,824    75,660     65,354
Noninterest expense
Compensation and employee     19,953     18,684   17,820    75,979     71,137
benefits
Occupancy                     4,313      4,400    4,313     17,179     17,154
Data processing               2,854      2,644    1,676     10,098     8,155
Services                      2,800      3,062    1,990     9,866      7,396
Equipment                     1,806      1,762    1,762     7,105      6,903
Other expense                 9,207      8,096    8,997     32,116     32,648
 Total noninterest        40,933     38,648   36,558    152,343    143,393
expense
Income before income taxes    22,057     21,627   22,837    89,021     91,536
Income taxes                 7,694      7,419    7,497     30,384     31,693
Net income                    $        $      $       $ 58,637  $  
                              14,363    14,208   15,340              59,843
Comprehensive income          $       $      $      $ 52,612  $  
                              5,740     15,517   7,400               56,760
OTHER BANK INFORMATION
(annualized %, except as of
period end)
Return on average assets     1.15       1.15     1.26      1.18       1.23
Return on average equity    11.29      11.24    12.24     11.68      11.99
Return on average tangible    13.47      13.41    14.65     13.97      14.35
common equity
Net interest margin           3.81       3.92     4.16      3.93       4.12
Net charge-offs to average    0.13       0.35     0.48      0.24       0.49
loans outstanding
Efficiency ratio              61         60       57        59         57
As of period end
Nonperforming assets to loans
outstanding and real estate   1.87       1.73     2.01
owned **
Allowance for loan losses to  1.11       1.06     1.03
loans outstanding
Leverage ratio *              9.1        9.3      9.0
Total risk-based capital      12.8       12.9     12.9
ratio *
Tangible common equity to     8.39       8.72     8.42
total assets
Dividend paid to HEI (via     15         10       20        45         63
ASHI) ($ in millions) **
* Regulatory basis
** Fourth quarter 2011 includes noncash
dividends of $5 million.

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 (when filed) and HEI's Quarterly Reports on
SEC Form 10-Q for the quarters ended March 31, 2012, June 30, 2012 and
September 30, 2012, as updated by SEC Forms 8-K.



American Savings Bank, F.S.B.
BALANCE SHEETS DATA
(Unaudited)
December 31                                 2012             2011
(in thousands)
Assets
Cash and cash equivalents                   $   184,430   $   219,678
Available-for-sale investment and           671,358          624,331
mortgage-related securities
Investment in stock of Federal Home Loan    96,022           97,764
Bank of Seattle
Loans receivable held for investment        3,779,218        3,680,724
 Allowance for loan losses                (41,985)         (37,906)
 Loans receivable held for investment, 3,737,233        3,642,818
net
Loans held for sale, at lower of cost or    26,005           9,601
fair value
Other                                       244,435          233,592
Goodwill                                    82,190           82,190
 Total assets                           $  5,041,673   $  4,909,974
Liabilities and shareholder's equity
Deposit liabilities–noninterest-bearing     $  1,164,308   $   993,828
Deposit liabilities–interest-bearing        3,065,608        3,076,204
Other borrowings                            195,926          233,229
Other                                       117,752          118,078
 Total liabilities                      4,543,594        4,421,339
Common stock                                333,712          331,880
Retained earnings                           179,763          166,126
Accumulated other comprehensive loss, net   (15,396)         (9,371)
of tax benefits
 Total shareholder's equity             498,079          488,635
 Total liabilities and shareholder's    $  5,041,673   $  4,909,974
equity
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 (when filed) and HEI's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2012, June 30, 2012
and September 30, 2012, as updated by SEC Forms 8-K.



Contact: Shelee M.T. Kimura
          Manager, Investor Relations & Telephone: (808) 543-7384
          Strategic Planning              E-mail: skimura@hei.com

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SOURCE Hawaiian Electric Industries, Inc.

Website: http://www.hei.com