American Savings Bank Reports Second Quarter 2013 Earnings

          American Savings Bank Reports Second Quarter 2013 Earnings

Net Income of $15.9 Million

Bank Continues to Deliver Solid Results

PR Newswire

HONOLULU, July 30, 2013

HONOLULU, July 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 second
quarter of 2013 of $15.9 million, compared to $14.2 million in both the first
(or linked) quarter of 2013 and in the second quarter of 2012.

"American delivered solid results in the second quarter as good loan growth
helped us offset the continued pressure of the low interest rate environment.
We experienced very low credit costs in the quarter thanks to good risk
management systems and the positive trends in the Hawaii economy. We also
achieved another strategic objective, reaching agreement for the sale of our
credit card portfolio coupled with the introduction of a new, more competitive
offering for our customers," said Richard Wacker, president and chief
executive officer of American.

Second quarter 2013 net income was $1.8 million higher than the linked quarter
primarily driven by (after-tax):

  o$2 million lower provision for loan losses, $1 million of which related to
    the planned third quarter sale of American's credit card portfolio; and
  o$1 million higher gains on sales of investment securities.

These were largely offset by (after-tax):

  o$1 million lower mortgage banking income as a larger proportion of new
    residential mortgages were added to the portfolio rather than sold; and
  o$1 million higher noninterest expense.

Compared to the same quarter of 2012, the $1.7 million net income increase was
primarily driven by (after-tax):

  o$2 million lower provision for loan losses (as discussed above); and
  o$1 million higher gains on sales of investment securities.

These were offset by $1 million (after-tax) higher noninterest expense
primarily due to targeted staffing and information technology (IT) expense
increases.

Net interest margin (NIM) was 3.79% in the second quarter of 2013 compared to
3.78% in the linked quarter and 3.97% in the second quarter of 2012. Loan
growth, particularly in residential mortgages, and higher fees associated with
the prepayment of some large commercial loans in the quarter offset the
continued decline in stated rates that totaled five basis points compared to
the linked quarter. The decline in net interest margin compared to the prior
year quarter was primarily attributable to lower yields on interest-earning
assets as loans continued to re-price down in the low interest rate
environment.

Provision for loan losses (pretax) was a net credit of $1.0 million in the
second quarter of 2013 compared to net charges of $1.9 million in the linked
quarter and $2.4 million in the second quarter of 2012. In the second quarter
of 2013, American released $1 million (pretax) of reserves in connection with
the agreement to sell its credit card portfolio, a transaction that is
expected to close in the third quarter. No additional provision expense was
incurred: increases in the reserve for loan growth and charge-offs were
offset by approximately $3million (pretax) of reversals associated with
specific commercial loan paydowns, recoveries of previously charged off
consumer loans, and the ongoing improvement in the quality of the bank's loan
portfolio. The second quarter 2013 net charge-off ratio improved to 0.08%
from 0.12% in the linked quarter and 0.19% in the prior year quarter.

Non-interest expense (pretax) was $39.8 million in the second quarter of 2013
compared to $38.7million in the linked quarter and $37.6 million in the
second quarter of 2012. The increase from the linked quarter is primarily
attributable to the timing of marketing expenses and additional reserves on
unfunded commercial lines of credit. The increase from the prior year quarter
is largely due to the targeted staffing increases to support increased
business volumes, IT and risk management capabilities, as well as increasing
employee benefit expenses.

In the second quarter and year-to-date 2013, loans grew by $108 million and
$173 million, respectively. This quarter's loan growth was primarily driven
by residential mortgages as American allocated more of its continued strong
production to the portfolio. Year-to-date annualized loan growth was 9.1%.

Total deposits were $4.3 billion at June 30, 2013, down $36 million from
March31,2013, primarily due to the decreases in commercial deposits and
certificates of deposit. Average cost of funds remained low at 0.22% for the
second quarter 2013, consistent with the linked quarter and down 5basis
points from the same period last year. 

Overall, return on average equity and return on average assets were strong at
12.6% and 1.25%, respectively, in the quarter. American's solid results
enabled it to pay dividends of $10million to HEI in the quarter while
maintaining healthy capital levels -- leverage ratio of 9.3% and total
risk-based capital ratio of 12.5% at June 30, 2013.

HEI EARNINGS RELEASE, WEBCAST AND TELECONFERENCE

Concurrent with American's regulatory filing 30 days after the end of the
quarter, American announced its second quarter 2013 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 second
quarter of 2013.

HEI plans to announce its second quarter 2013 consolidated financial results
on Thursday, August 8, 2013 and will conduct a webcast and teleconference call
to review second quarter 2013 consolidated earnings, including American's
earnings, on Thursday, August8,2013, at 11:00 a.m. Hawaii time (5:00 p.m.
Eastern time). The event can be accessed through HEI's website at www.hei.com
or by dialing (877)415-3186, passcode: 97287517 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 material
information, as well as other important 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. Also, at the Investor Relations section of HEI's website,
investors may sign up to receive e-mail alerts (based on each investor's
selected preferences). 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. Replays of the teleconference call
will also be available approximately two hours after the event through August
22, 2013, by dialing (888)286-8010, passcode: 60955453.

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 March31,2013 and HEI's subsequent 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            Six months ended
                              June 30,  March   June 30,  June 30
                                         31,
(in thousands)                2013       2013    2012       2013      2012
Interest income
Interest and fees on loans    $         $      $         $ 86,227  $ 89,361
                              43,624     42,603  44,473
Interest on investment and
mortgage-related              3,234      3,464   3,297      6,698     7,102
securities
 Total interest income    46,858     46,067  47,770     92,925    96,463
Interest expense
Interest on deposit           1,296      1,312   1,696      2,608     3,475
liabilities
Interest on other             1,178      1,164   1,214      2,342     2,475
borrowings
 Total interest           2,474      2,476   2,910      4,950     5,950
expense
Net interest income           44,384     43,591  44,860     87,975    90,513
Provision (credit) for        (959)      1,858   2,378      899       5,924
loan losses
Net interest income after
provision (credit) for        45,343     41,733  42,482     87,076    84,589
loan losses
Noninterest income
Fees from other financial     7,996      7,643   7,463      15,639    14,800
services
Fee income on deposit         4,433      4,314   4,322      8,747     8,600
liabilities
Fee income on other           1,780      1,794   1,532      3,574     3,081
financial products
Mortgage banking income       2,003      3,346   2,185      5,349     4,220
Gain on sale of securities    1,226      -       134        1,226     134
Other income                  1,731      1,592   1,315      3,323     2,675
 Total noninterest        19,169     18,689  16,951     37,858    33,510
income
Noninterest expense
Compensation and employee     20,063     20,088  18,696     40,151    37,342
benefits
Occupancy                     4,219      4,123   4,241      8,342     8,466
Data processing               2,827      2,987   2,489      5,814     4,600
Services                      2,328      2,103   2,221      4,431     4,004
Equipment                     1,870      1,774   1,807      3,644     3,537
Other expense                 8,500      7,595   8,106      16,095    14,813
 Total noninterest        39,807     38,670  37,560     78,477    72,762
expense
Income before income taxes    24,705     21,752  21,873     46,457    45,337
Income taxes                 8,786      7,597   7,684      16,383    15,271
Net income                    $         $      $         $ 30,074  $ 30,066
                              15,919     14,155  14,189
Comprehensive income          $        $      $         $ 22,824  $ 31,355
                              7,340      15,484  15,456
OTHER BANK INFORMATION (annualized %, except as of period
end)
Return on average assets     1.25       1.12    1.15       1.19      1.22
Return on average equity    12.56      11.28   11.35      11.93     12.11
Return on average tangible    15.00      13.49   13.58      14.25     14.50
common equity
Net interest margin           3.79       3.78    3.97       3.79      4.01
Net charge-offs to average    0.08       0.12    0.19       0.10      0.24
loans outstanding
Efficiency ratio              62         61      60         62        58
As of period end
Nonperforming assets to loans
outstanding and real estate   1.56       1.89    1.84
owned *
Allowance for loan losses     1.04       1.11    1.06
to loans outstanding
Tier-1 leverage ratio *       9.3        9.1     9.2
Total risk-based capital      12.5       12.8    12.8
ratio *
Tangible common equity to     8.42       8.38    8.58
total assets
Dividend paid to HEI (via     10         10      10         20        20
ASHI) ($ in millions)
* Regulatory basis

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 and HEI's Quarterly Reports
on SEC Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013
(when filed), as updated by SEC Forms 8-K. 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.
BALANCE SHEETS DATA
(Unaudited)
                                                 June 30,       December 31,
(in thousands)                                   2013           2012
Assets
Cash and cash equivalents                        $   143,912 $   184,430
Available-for-sale investment and                560,172        671,358
mortgage-related securities
Investment in stock of Federal Home Loan Bank of 94,281         96,022
Seattle
Loans receivable held for investment             3,953,634      3,779,218
 Allowance for loan losses                     (41,004)       (41,985)
 Loans receivable held for investment, net  3,912,630      3,737,233
Loans held for sale, at lower of cost or fair    34,073         26,005
value
Other                                            241,513        244,435
Goodwill                                         82,190         82,190
 Total assets                                $  5,068,771 $  5,041,673
Liabilities and shareholder's equity
Deposit liabilities–noninterest-bearing          $  1,168,937 $  1,164,308
Deposit liabilities–interest-bearing             3,107,306      3,065,608
Other borrowings                                 187,884        195,926
Other                                            102,516        117,752
 Total liabilities                           4,566,643      4,543,594
Common stock                                     334,937        333,712
Retained earnings                                189,837        179,763
Accumulated other comprehensive loss, net of tax (22,646)       (15,396)
benefits
 Total shareholder's equity                  502,128        498,079
 Total liabilities and shareholder's equity  $  5,068,771 $  5,041,673

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 and HEI's Quarterly Reports on SEC Form 10-Q for the
quarters ended
March 31, 2013 and June 30, 2013 (when filed), as updated by SEC Forms 8-K.
Results of
operations for interim periods are not necessarily indicative of results to be
expected for
future interim periods or the full year.

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

(Logo: http://photos.prnewswire.com/prnh/20110411/LA80136LOGO)

SOURCE Hawaiian Electric Industries, Inc.

Website: http://www.hei.com
 
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