HEI Reports Third Quarter 2023 Results

3Q23 Net Income of $41.1M and Diluted Earnings Per Share (EPS) of $0.37

$27.6M of Pre-tax Maui Wildfire-Related Expenses

Core Businesses Performing Well

Solid Credit Quality and Capital Position at ASB

Hawaiian Electric Industries, Inc. (NYSE - HE) (HEI) today reported consolidated net income for common stock for the third quarter of 2023 of $41.1 million and EPS of $0.37 compared to $62.1 million and EPS of $0.57 for the third quarter of 2022. Core net income and core EPS1 for the third quarter were $61.5 million and $0.56, respectively.

“Our hearts are with the people of Maui, and we remain committed to supporting the recovery and rebuild effort. We have a long road ahead as we work towards recovery and restoration, and we can only be successful by working closely together as a community,” said Scott Seu, HEI president and CEO.

“Yesterday Governor Green announced a multi-phase initiative to support Maui’s recovery, protect our communities against future extreme weather events and ensure that as a state we can attract the capital needed to keep our communities safe and our state on the path to a sustainable future. The first phase of the initiative is focused on providing an option for families who have lost a loved one and those who were severely injured in the Maui fire to receive payments to support their healing. This is just the start of a process, and we look forward to working with the Governor, the County of Maui, Kamehameha Schools and others in our communities to help address the many tragic impacts of the Maui wildfires.

“Separate from the events on August 8th, the fundamentals of our businesses remain strong. While we had utility equipment damage and lost the ASB branch in Lahaina, both our utility and bank have made the necessary adjustments to continue serving the people of Maui at a time when they most need us.”

HAWAIIAN ELECTRIC COMPANY (HAWAIIAN ELECTRIC) EARNINGS2

Hawaiian Electric’s net income for the third quarter of 2023 was $43.5 million, compared to $49.8 million in the third quarter of 2022, with the decrease primarily driven by the following after-tax items:

  • $11 million higher revenues, including $7 million from the annual revenue adjustment mechanism, $3 million from the fossil fuel cost risk-sharing mechanism and $1 million from the major project interim recovery mechanism; and
  • $2 million higher allowance for funds used during construction (AFUDC) related to increased capital expenditures.

These items were offset by the following after-tax items:

  • $17 million in higher operations and maintenance expenses, including $10 million of incremental costs related to the Maui windstorm and wildfires. The remaining $7 million increase in O&M included higher transmission and distribution maintenance, higher customer support costs and higher overhaul costs; and
  • $2 million higher interest expense due to increased borrowings.

Hawaiian Electric’s core net income3 for the third quarter of 2023 was $53.8 million, excluding incremental after-tax Maui windstorm and wildfire-related expenses.

AMERICAN SAVINGS BANK EARNINGS

ASB’s third quarter 2023 net income was $11.4 million, compared to $20.2 million in the second quarter of 2023 and $20.8 million in the third quarter of 2022. The decrease in net income compared to the linked and prior year quarters was primarily due to pre-tax Maui wildfire-related costs of $8.6 million—including $5.9 million of additional credit reserves—as well as lower net interest income. Core net income3 for the third quarter of 2023 was $17.6 million.

Total earning assets as of September 30, 2023 were $9.3 billion, up approximately 1.7% from December 31, 2022.

Total loans were $6.2 billion as of September 30, 2023, up 3.6% from December 31, 2022, primarily reflecting growth in the commercial real estate and residential mortgage portfolios.

Total deposits were $8.2 billion as of September 30, 2023, an increase of 0.7% from December 31, 2022. Core deposits declined 5.1%, while certificates of deposit increased 71.8%. As of September 30, 2023, 87% of deposits were F.D.I.C. insured or fully collateralized, up slightly from 86% as of June 30, 2023, with approximately 77% of deposits F.D.I.C. insured. For the third quarter of 2023, the average cost of funds was 1.02%, up 19 basis points versus the linked quarter and up 89 basis points versus the prior year quarter.

ASB’s return on average equity was 9.2%, compared to 16.2% in the linked quarter and 15.1% in the third quarter of 2022. Return on average assets was 0.47% for the third quarter of 2023, compared to 0.84% in the linked quarter and 0.89% in the prior year quarter. Excluding Maui wildfire-related costs, core returns on average equity and average assets4 were 14.3% and 0.73%, respectively.

In the third quarter of 2023, ASB paid dividends of $14.0 million to HEI. ASB had a Tier 1 leverage ratio of 7.7% as of September 30, 2023.

Please refer to ASB’s news release issued on October 30, 2023 for additional information on ASB.

HOLDING AND OTHER COMPANIES

The holding and other companies’ net loss was $13.7 million in the third quarter of 2023 compared to $8.4 million in the third quarter of 2022. The higher net loss compared to the prior year quarter was primarily due to $3.8 million of after-tax wildfire-related expenses, lower Pacific Current asset performance and higher interest expense. Core net loss5 for the third quarter of 2023 was $9.9 million.

WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND 2023 GUIDANCE

HEI will conduct a webcast and conference call to review its consolidated results and 2023 earnings guidance and outlook today at 11:30 a.m. Hawaii time (4:30 p.m. Eastern).

To listen to the conference call, dial 1-888-660-6377 (U.S.) or 1-929-203-0797 (international) and enter passcode 2393042. Parties may also access presentation materials (which include reconciliation of non-GAAP measures) 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. The audio replay will also be available about two hours after the event through November 23, 2023. To access the audio replay, dial 1-800-770-2030 (U.S.) or 1-647-362-9199 (international) and enter passcode 2393042.

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 https://hpuc.my.site.com/cdms/s/ 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 95% of Hawaii’s population and is undertaking an ambitious effort to decarbonize its operations and the broader state economy. Its banking subsidiary, ASB, is one of Hawaii’s largest financial institutions, providing a wide array of banking and other financial services and working to advance economic growth, affordability and financial fitness. HEI also helps advance Hawaii’s sustainability goals through investments by its non-regulated subsidiary, Pacific Current. For more information, visit www.hei.com.

1

Core net income and core earnings per share are non-GAAP measures which exclude Maui wildfire-related after-tax costs. See “Explanation of HEI’s Use of Certain Unaudited Non-GAAP Measures” and the related reconciliations.

2

Utility amounts indicated as after-tax in this earnings release are based upon adjusting items using a current year composite statutory tax rate of 25.75%.

3

Refer to footnote 1.

4

Core returns on average equity and average assets are non-GAAP measures which exclude Maui wildfire-related after-tax costs. See the “Explanation of HEI’s Use of Certain Unaudited Non-GAAP Measures” and the related GAAP reconciliation.

5

Refer to footnote 1.

NON-GAAP MEASURES

Core net income is a non-GAAP measure which excludes Maui wildfire-related after-tax costs. See “Explanation of HEI’s Use of Certain Unaudited Non-GAAP Measures” and 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 December 31, 2022, HEI’s other periodic reports that discuss important factors that could cause HEI’s results to differ materially from those anticipated in such statements and (i) extreme weather events, including windstorms and other natural disasters, particularly those driven or exacerbated by climate change, which could increase the risk of the Utilities’ equipment being damaged, becoming inoperable or contributing to a wildfire; (ii) the impact of the Maui windstorm and wildfires including the potential liabilities from the many lawsuits filed against the Company and potential regulatory penalties which may result in significant costs that may be unrecoverable through insurance and/or rates; (iii) an increase in insurance premiums and the inability to fully recover premiums through rates or the potential inability to obtain wildfire and general liability insurance coverage at reasonable rates, if available at all; (iv) the uncertainties surrounding the Company’s access to capital and credit markets due to the uncertainties associated with the costs related to the Maui windstorm and wildfires; (v) the material reduction or extended delay in dividends or other distributions from one or more operating subsidiaries to HEI; (vi) further downgrades by securities rating agencies in their ratings of the securities of HEI and Hawaiian Electric and their impact on results of financing efforts; (vii) the risks of suffering losses and incurring liabilities that are uninsured (e.g., damages to the Utilities’ transmission and distribution system and losses from business interruption) or underinsured (e.g., losses not covered as a result of insurance deductibles or other exclusions or exceeding policy limits), and the risks associated with the operation of transmission and distribution assets and power generation facilities, including public and employee safety issues, and assets causing or contributing to wildfires. 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 September 30

 

Nine months ended September 30

(in thousands, except per share amounts)

 

2023

 

2022

 

2023

 

2022

Revenues

 

 

 

 

 

 

 

 

Electric utility

 

$

794,987

 

 

$

955,971

 

 

$

2,419,539

 

 

$

2,483,636

 

Bank

 

 

100,974

 

 

 

81,411

 

 

 

291,716

 

 

 

231,850

 

Other

 

 

5,912

 

 

 

4,815

 

 

 

14,540

 

 

 

7,386

 

Total revenues

 

 

901,873

 

 

 

1,042,197

 

 

 

2,725,795

 

 

 

2,722,872

 

Expenses

 

 

 

 

 

 

 

 

Electric utility

 

 

723,629

 

 

 

876,922

 

 

 

2,198,681

 

 

 

2,259,838

 

Bank

 

 

88,415

 

 

 

54,311

 

 

 

230,769

 

 

 

152,797

 

Other

 

 

14,718

 

 

 

8,849

 

 

 

34,737

 

 

 

22,178

 

Total expenses

 

 

826,762

 

 

 

940,082

 

 

 

2,464,187

 

 

 

2,434,813

 

Operating income (loss)

 

 

 

 

 

 

 

 

Electric utility

 

 

71,358

 

 

 

79,049

 

 

 

220,858

 

 

 

223,798

 

Bank

 

 

12,559

 

 

 

27,100

 

 

 

60,947

 

 

 

79,053

 

Other

 

 

(8,806

)

 

 

(4,034

)

 

 

(20,197

)

 

 

(14,792

)

Total operating income

 

 

75,111

 

 

 

102,115

 

 

 

261,608

 

 

 

288,059

 

Retirement defined benefits credit—other than service costs

 

 

1,256

 

 

 

1,039

 

 

 

3,561

 

 

 

3,528

 

Interest expense, net—other than on deposit liabilities and other bank borrowings

 

 

(32,629

)

 

 

(26,626

)

 

 

(91,259

)

 

 

(75,940

)

Allowance for borrowed funds used during construction

 

 

1,372

 

 

 

825

 

 

 

3,798

 

 

 

2,401

 

Allowance for equity funds used during construction

 

 

4,000

 

 

 

2,552

 

 

 

11,073

 

 

 

7,431

 

Gain on sales of equity-method investment

 

 

 

 

 

 

 

 

 

 

 

8,123

 

Income before income taxes

 

 

49,110

 

 

 

79,905

 

 

 

188,781

 

 

 

233,602

 

Income taxes

 

 

7,521

 

 

 

17,352

 

 

 

36,915

 

 

 

48,395

 

Net income

 

 

41,589

 

 

 

62,553

 

 

 

151,866

 

 

 

185,207

 

Preferred stock dividends of subsidiaries

 

 

471

 

 

 

471

 

 

 

1,417

 

 

 

1,417

 

Net income for common stock

 

$

41,118

 

 

$

62,082

 

 

$

150,449

 

 

$

183,790

 

Basic earnings per common share

 

$

0.37

 

 

$

0.57

 

 

$

1.37

 

 

$

1.68

 

Diluted earnings per common share

 

$

0.37

 

 

$

0.57

 

 

$

1.37

 

 

$

1.68

 

Dividends declared per common share

 

$

0.36

 

 

$

0.35

 

 

$

1.08

 

 

$

1.05

 

Weighted-average number of common shares outstanding

 

 

109,728

 

 

 

109,470

 

 

 

109,606

 

 

 

109,421

 

Weighted-average shares assuming dilution

 

 

109,917

 

 

 

109,705

 

 

 

109,932

 

 

 

109,712

 

Net income (loss) for common stock by segment

 

 

 

 

 

 

 

 

Electric utility

 

$

43,461

 

 

$

49,764

 

 

$

135,769

 

 

$

140,308

 

Bank

 

 

11,365

 

 

 

20,756

 

 

 

50,131

 

 

 

62,092

 

Other

 

 

(13,708

)

 

 

(8,438

)

 

 

(35,451

)

 

 

(18,610

)

Net income for common stock

 

$

41,118

 

 

$

62,082

 

 

$

150,449

 

 

$

183,790

 

Comprehensive income (loss) attributable to HEI

 

$

6,243

 

 

$

(33,930

)

 

$

128,453

 

 

$

(117,221

)

Return on average common equity (%) (twelve months ended)

 

 

 

 

 

 

9.5

 

 

 

10.5

 

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 September 30

 

Nine months ended September 30

($ in thousands, except per barrel amounts)

 

2023

 

2022

 

2023

 

2022

Revenues

 

$

794,987

 

 

$

955,971

 

 

$

2,419,539

 

 

$

2,483,636

 

Expenses

 

 

 

 

 

 

 

 

Fuel oil

 

 

267,438

 

 

 

383,602

 

 

 

881,692

 

 

 

874,543

 

Purchased power

 

 

177,795

 

 

 

225,209

 

 

 

498,990

 

 

 

606,827

 

Other operation and maintenance

 

 

142,508

 

 

 

121,110

 

 

 

407,184

 

 

 

371,259

 

Depreciation

 

 

61,165

 

 

 

58,711

 

 

 

182,781

 

 

 

175,921

 

Taxes, other than income taxes

 

 

74,723

 

 

 

88,290

 

 

 

228,034

 

 

 

231,288

 

Total expenses

 

 

723,629

 

 

 

876,922

 

 

 

2,198,681

 

 

 

2,259,838

 

Operating income

 

 

71,358

 

 

 

79,049

 

 

 

220,858

 

 

 

223,798

 

Allowance for equity funds used during construction

 

 

4,000

 

 

 

2,552

 

 

 

11,073

 

 

 

7,431

 

Retirement defined benefits credit—other than service costs

 

 

1,132

 

 

 

895

 

 

 

3,227

 

 

 

2,876

 

Interest expense and other charges, net

 

 

(22,447

)

 

 

(19,609

)

 

 

(63,565

)

 

 

(56,735

)

Allowance for borrowed funds used during construction

 

 

1,372

 

 

 

825

 

 

 

3,798

 

 

 

2,401

 

Income before income taxes

 

 

55,415

 

 

 

63,712

 

 

 

175,391

 

 

 

179,771

 

Income taxes

 

 

11,456

 

 

 

13,450

 

 

 

38,126

 

 

 

37,967

 

Net income

 

 

43,959

 

 

 

50,262

 

 

 

137,265

 

 

 

141,804

 

Preferred stock dividends of subsidiaries

 

 

228

 

 

 

228

 

 

 

686

 

 

 

686

 

Net income attributable to Hawaiian Electric

 

 

43,731

 

 

 

50,034

 

 

 

136,579

 

 

 

141,118

 

Preferred stock dividends of Hawaiian Electric

 

 

270

 

 

 

270

 

 

 

810

 

 

 

810

 

Net income for common stock

 

$

43,461

 

 

$

49,764

 

 

$

135,769

 

 

$

140,308

 

Comprehensive income attributable to Hawaiian Electric

 

$

43,384

 

 

$

49,872

 

 

$

135,603

 

 

$

140,518

 

OTHER ELECTRIC UTILITY INFORMATION

 

 

 

 

 

 

 

 

Kilowatthour sales (millions)

 

 

 

 

 

 

 

 

Hawaiian Electric

 

 

1,624

 

 

 

1,655

 

 

 

4,534

 

 

 

4,609

 

Hawaii Electric Light

 

 

268

 

 

 

269

 

 

 

771

 

 

 

784

 

Maui Electric

 

 

265

 

 

 

288

 

 

 

782

 

 

 

807

 

 

 

 

2,157

 

 

 

2,212

 

 

 

6,087

 

 

 

6,200

 

Average fuel oil cost per barrel

 

$

111.51

 

 

$

166.79

 

 

$

124.70

 

 

$

137.23

 

Return on average common equity (%) (twelve months ended)1

 

 

 

 

 

 

7.9

 

 

 

8.1

 

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,

2023

 

June 30,

2023

 

September 30,

2022

 

2023

 

2022

 

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

71,540

 

 

$

67,966

 

$

53,365

 

 

$

204,348

 

$

147,499

 

Interest and dividends on investment securities

 

 

14,096

 

 

 

13,775

 

 

15,052

 

 

 

42,508

 

 

43,729

 

Total interest and dividend income

 

 

85,636

 

 

 

81,741

 

 

68,417

 

 

 

246,856

 

 

191,228

 

Interest expense

 

 

 

 

 

 

 

 

 

 

Interest on deposit liabilities

 

 

14,446

 

 

 

9,661

 

 

1,704

 

 

 

30,944

 

 

3,572

 

Interest on other borrowings

 

 

8,598

 

 

 

8,852

 

 

1,055

 

 

 

25,171

 

 

1,199

 

Total interest expense

 

 

23,044

 

 

 

18,513

 

 

2,759

 

 

 

56,115

 

 

4,771

 

Net interest income

 

 

62,592

 

 

 

63,228

 

 

65,658

 

 

 

190,741

 

 

186,457

 

Provision for credit losses

 

 

8,835

 

 

 

43

 

 

(186

)

 

 

10,053

 

 

(692

)

Net interest income after provision for credit losses

 

 

53,757

 

 

 

63,185

 

 

65,844

 

 

 

180,688

 

 

187,149

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

Fees from other financial services

 

 

4,703

 

 

 

5,009

 

 

4,763

 

 

 

14,391

 

 

15,066

 

Fee income on deposit liabilities

 

 

4,924

 

 

 

4,504

 

 

4,879

 

 

 

14,027

 

 

14,122

 

Fee income on other financial products

 

 

2,440

 

 

 

2,768

 

 

2,416

 

 

 

7,952

 

 

7,663

 

Bank-owned life insurance

 

 

2,303

 

 

 

1,955

 

 

122

 

 

 

5,683

 

 

661

 

Mortgage banking income

 

 

341

 

 

 

230

 

 

181

 

 

 

701

 

 

1,630

 

Gain on sale of real estate

 

 

 

 

 

495

 

 

 

 

 

495

 

 

1,002

 

Other income, net

 

 

627

 

 

 

678

 

 

633

 

 

 

2,106

 

 

1,480

 

Total noninterest income

 

 

15,338

 

 

 

15,639

 

 

12,994

 

 

 

45,355

 

 

41,624

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

 

29,902

 

 

 

29,394

 

 

28,597

 

 

 

89,500

 

 

83,478

 

Occupancy

 

 

5,154

 

 

 

5,539

 

 

5,577

 

 

 

16,281

 

 

16,996

 

Data processing

 

 

5,133

 

 

 

5,095

 

 

4,509

 

 

 

15,240

 

 

13,144

 

Services

 

 

3,627

 

 

 

2,689

 

 

2,751

 

 

 

8,911

 

 

7,712

 

Equipment

 

 

3,125

 

 

 

2,957

 

 

2,432

 

 

 

8,728

 

 

7,163

 

Office supplies, printing and postage

 

 

1,022

 

 

 

1,109

 

 

1,123

 

 

 

3,296

 

 

3,256

 

Marketing

 

 

984

 

 

 

834

 

 

925

 

 

 

2,834

 

 

2,877

 

Other expense

 

 

7,399

 

 

 

6,152

 

 

5,643

 

 

 

19,742

 

 

14,542

 

Total noninterest expense

 

 

56,346

 

 

 

53,769

 

 

51,557

 

 

 

164,532

 

 

149,168

 

Income before income taxes

 

 

12,749

 

 

 

25,055

 

 

27,281

 

 

 

61,511

 

 

79,605

 

Income taxes

 

 

1,384

 

 

 

4,851

 

 

6,525

 

 

 

11,380

 

 

17,513

 

Net income

 

$

11,365

 

 

$

20,204

 

$

20,756

 

 

$

50,131

 

$

62,092

 

Comprehensive income (loss)

 

$

(22,866

)

 

$

12,994

 

$

(78,186

)

 

$

27,120

 

$

(248,126

)

OTHER BANK INFORMATION (annualized %, except as of period end)

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.47

 

 

 

0.84

 

 

0.89

 

 

 

0.70

 

 

0.90

 

Return on average equity

 

 

9.19

 

 

 

16.20

 

 

15.11

 

 

 

13.62

 

 

13.65

 

Return on average tangible common equity

 

 

11.02

 

 

 

19.40

 

 

17.77

 

 

 

16.36

 

 

15.79

 

Net interest margin

 

 

2.70

 

 

 

2.75

 

 

2.96

 

 

 

2.77

 

 

2.87

 

Efficiency ratio

 

 

72.30

 

 

 

68.18

 

 

65.55

 

 

 

69.69

 

 

65.40

 

Net charge-offs to average loans outstanding

 

 

0.07

 

 

 

0.14

 

 

0.03

 

 

 

0.11

 

 

0.01

 

As of period end

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans to loans receivable held for investment

 

 

0.16

 

 

 

0.22

 

 

0.35

 

 

 

 

 

Allowance for credit losses to loans outstanding

 

 

1.23

 

 

 

1.13

 

 

1.24

 

 

 

 

 

Tangible common equity to tangible assets

 

 

3.9

 

 

 

4.3

 

 

4.0

 

 

 

 

 

Tier-1 leverage ratio

 

 

7.7

 

 

 

7.8

 

 

7.7

 

 

 

 

 

Dividend paid to HEI (via ASB Hawaii, Inc.) ($ in millions)

 

$

14.0

 

 

$

11.0

 

$

5.0

 

 

$

39.0

 

$

32.0

 

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.

Explanation of HEI’s Use of Certain Unaudited Non-GAAP Measures

HEI, Hawaiian Electric and ASB management use certain non-GAAP measures to evaluate the performance of HEI, the utility and bank. Management believes these non-GAAP measures provide useful information regarding 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 for adjusted diluted EPS (for HEI consolidated); return on average common equity (for HEI consolidated and Hawaiian Electric); and returns on average equity, average tangible equity and average assets (for ASB).

The reconciling adjustments from GAAP1 earnings to core earnings are limited to the costs related to the recent Maui wildfires. Management does not consider these items to be representative of the company’s fundamental core earnings.

Reconciliation of GAAP1 to non-GAAP Measures

Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries

Unaudited

 

(in thousands)

 

Three months ended September 30, 2023

 

Nine months ended September 30, 2023

Maui wildfire-related costs

 

 

 

 

Pretax expenses:

 

 

 

 

Legal expenses

 

$

10,751

 

 

$

10,751

 

Outside services expenses

 

 

6,134

 

 

 

6,134

 

Provision for credit losses

 

 

5,900

 

 

 

5,900

 

Other expenses

 

 

3,842

 

 

 

3,842

 

Interest expenses

 

 

955

 

 

 

955

 

Pretax expenses

 

 

27,582

 

 

 

27,582

 

Income tax benefits2

 

 

(7,192

)

 

 

(7,192

)

After-tax expenses

 

$

20,390

 

 

$

20,390

 

HEI consolidated net income

 

 

 

 

GAAP net income (as reported)

 

$

41,118

 

 

$

150,449

 

Excluding special items related to the Maui wildfire (after tax):

 

 

 

 

Legal expenses

 

 

7,977

 

 

 

7,977

 

Outside services expenses

 

 

4,546

 

 

 

4,546

 

Provision for credit losses

 

 

4,319

 

 

 

4,319

 

Other expenses

 

 

2,839

 

 

 

2,839

 

Interest expenses

 

 

709

 

 

 

709

 

Maui wildfire-related cost (after tax)

 

 

20,390

 

 

 

20,390

 

Non-GAAP (core) net income

 

$

61,508

 

 

$

170,839

 

GAAP Diluted earnings per share (as reported)

 

$

0.37

 

 

$

1.37

 

Non-GAAP (core) Diluted earnings per share

 

$

0.56

 

 

$

1.55

 

 

 

Twelve months ended September 30, 2023

 

Twelve months ended September 30, 2022

Ratios (%)

 

 

 

 

Based on GAAP1

 

 

 

 

Return on average equity

 

9.5

 

10.5

Based on Non-GAAP (core)

 

 

 

 

Return on average equity

 

10.4

 

10.5

1

Accounting principles generally accepted in the United States of America

2

Current year composite statutory tax rate of 25.75% is used for Utility and corporate amounts and current year composite statutory tax rate of 26.80% is used for ASB amounts.

Note: Other segment (Holding and Other Companies) wildfire-related expenses (legal, outside services and other) are included in “Expenses-Other” and interest expense is included in “Interest expense, net—other than on deposit liabilities and other bank borrowings” on the HEI and subsidiaries’ Consolidated Statements of Income Data. See Electric Utilities and Bank tables below for more detail.

Reconciliation of GAAP1 to non-GAAP Measures

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

(in thousands)

 

Three months ended September 30, 2023

 

Nine months ended September 30, 2023

Maui windstorm and wildfire-related costs

 

 

 

 

Pretax expenses:

 

 

 

 

Legal expenses2

 

$

6,251

 

 

$

6,251

 

Outside services expenses2

 

 

4,706

 

 

 

4,706

 

Other expenses2

 

 

2,482

 

 

 

2,482

 

Interest expenses3

 

 

503

 

 

 

503

 

Pretax expenses

 

 

13,942

 

 

 

13,942

 

Income tax benefits4

 

 

(3,590

)

 

 

(3,590

)

After-tax expenses

 

$

10,352

 

 

$

10,352

 

 

 

 

 

 

Hawaiian Electric consolidated net income

 

 

 

 

GAAP net income (as reported)

 

$

43,461

 

 

$

135,769

 

Excluding special items related to the Maui windstorm and wildfires (after tax):

 

 

 

 

Legal expenses

 

 

4,641

 

 

 

4,641

 

Outside services expenses

 

 

3,494

 

 

 

3,494

 

Other expenses

 

 

1,843

 

 

 

1,843

 

Interest expenses

 

 

374

 

 

 

374

 

Maui windstorm and wildfire-related cost (after tax)

 

 

10,352

 

 

 

10,352

 

Non-GAAP (core) net income

 

$

53,813

 

 

$

146,121

 

 

 

Twelve months ended September 30, 2023

 

Twelve months ended September 30, 2022

Ratios (%)

 

 

 

 

Based on GAAP1

 

 

 

 

Return on average equity

 

7.9

 

8.1

Based on Non-GAAP (core)

 

 

 

 

Return on average equity

 

8.3

 

8.1

1

Accounting principles generally accepted in the United States of America.

2

Legal, outside services and other are included in “Other operation and maintenance” on the Hawaiian Electric and subsidiaries Consolidated Statements of Income Data.

3

Interest expense is included in “Interest expense and other charges, net” on the Hawaiian Electric and subsidiaries Consolidated Statements of Income Data.

4

Current year composite statutory tax rate of 25.75% is used for Utility amounts.

Reconciliation of GAAP1 to non-GAAP Measures

American Savings Bank F.S.B.

Unaudited

 

(in thousands)

 

Three months ended September 30, 2023

 

Nine months ended September 30, 2023

Maui wildfire related costs

 

 

 

 

Pretax expenses:

 

 

 

 

Provision for credit losses2

 

$

5,900

 

 

$

5,900

 

Professional services expense3

 

 

1,300

 

 

 

1,300

 

Other expenses4

 

 

1,357

 

 

 

1,357

 

Pretax expenses

 

 

8,557

 

 

 

8,557

 

Income tax benefits5

 

 

(2,293

)

 

 

(2,293

)

After-tax expenses

 

$

6,264

 

 

$

6,264

 

 

 

 

 

 

ASB net income

 

 

 

 

GAAP (as reported)

 

$

11,365

 

 

$

50,131

 

Excluding expense related to Maui wildfire (after tax):

 

 

 

 

Provision for credit losses

 

 

4,319

 

 

 

4,319

 

Professional services expense

 

 

952

 

 

 

952

 

Other expenses

 

 

993

 

 

 

993

 

Maui wildfire related cost (after tax)

 

 

6,264

 

 

 

6,264

 

Non-GAAP (core) net income

 

$

17,629

 

 

$

56,395

 

 

 

Three months ended September 30, 2023

 

Nine months ended September 30, 2023

Ratios (annualized %)

 

 

 

 

Based on GAAP1

 

 

 

 

Return on average assets

 

0.47

 

0.70

Return on average equity

 

9.19

 

13.62

Return on average tangible common equity

 

11.02

 

16.36

Efficiency ratio

 

72.30

 

69.69

Based on Non-GAAP (core)

 

 

 

 

Return on average assets

 

0.73

 

0.78

Return on average equity

 

14.25

 

15.32

Return on average tangible common equity

 

17.09

 

18.40

Efficiency ratio

 

68.89

 

68.56

1

Accounting principles generally accepted in the United States of America.

2

Provision for credit losses is included in “Provision for credit losses” on the ASB Statements of Income Data.

3

Professional services expenses are included in “Noninterest expense-Services” on the ASB Statements of Income Data.

4

Other expenses are included in “Noninterest expense-Other expense” on the ASB Statements of Income Data.

5

Current year composite statutory tax rate of 26.80% is used for ASB amounts.

 

Contacts

Mateo Garcia

Director, Investor Relations

Telephone: (808) 543-7300

E-mail: ir@hei.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.