Hawaiian Electric Company, Inc. PFD SER E 5% 8K Hei Reports Third Quarter 2022 Results | HAWEL 7 Nov 22

HEI Exhibit 99


		NEWS RELEASE
November 7, 2022
Contact:	Julie R. Smolinski	Telephone: (808) 543-7300
	Vice President, Investor Relations & Corporate Sustainability	E-mail: ir@hei.com

HEI REPORTS THIRD QUARTER 2022 RESULTS

3Q22 Net Income of $62.1M and Diluted Earnings Per Share (EPS)1 of $0.57

Utility Performance Steady Despite Inflationary Environment

Strong Bank Results Reflect Continued Net Interest Margin Expansion, Strong Loan Growth and Favorable Credit Trends

HONOLULU - Hawaiian Electric Industries, Inc. (NYSE - HE) (HEI) today reported consolidated net income for common stock for the third quarter of 2022 of $62.1 million and EPS of $0.57 compared to $63.4 million and EPS of $0.58 for the third quarter of 2021.

“Hawaii’s economy continues to show signs of strength, with unemployment, housing prices and tourism arrivals still trending favorably despite global macro uncertainties,” said Scott Seu, HEI president and CEO. “We’re pleased with our consolidated third quarter results, which reflect good performance across our enterprise and the benefits of our combination of companies. The utility successfully mitigated many of the impacts of the current higher cost environment and continued its strong progress in our clean energy transition.

“Our bank had another strong quarter. We again had broad-based loan growth, reflecting great work by our team along with the health of the local economy. We continued to see positive credit trends despite the inflationary environment, and rising interest rates continued to benefit our net interest margin and overall profitability,” said Seu.

HAWAIIAN ELECTRIC COMPANY (HAWAIIAN ELECTRIC) EARNINGS2

Hawaiian Electric’s net income for the third quarter of 2022 was $49.8 million, compared to $50.3 million in the third quarter of 2021, with the variance primarily driven by the following after-tax items:

•$6 million higher Annual Revenue Adjustment revenues; and

1 Unless otherwise indicated, throughout this release earnings per share (EPS) refers to diluted earnings per share.

2 Note: 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%.

•$1 million due to the reset of heat rate requirements leading to lower penalties for fuel efficiency at our Hawaii Island utility.

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

•$2 million in net tax adjustments due to tax credit benefits recognized in the third quarter of last year;

•$2 million in higher operations and maintenance expenses, driven by increased generating station maintenance, increased preventative maintenance and higher bad debt expense, partially offset by higher expenses from generating station overhauls performed in the third quarter of last year;

•$1 million in lower revenues related solely to a change in the timing for revenue recognition within the year for Maui County operations that eliminates seasonality in recognizing target revenues and results in recognizing revenues evenly throughout the year, with target revenues recognized on an annual basis remaining unchanged;

•$1 million higher interest expense due to higher rates and balances; and

•$1 million higher depreciation expense due to increasing investments to integrate more renewable energy and improve customer reliability and system efficiency.

AMERICAN SAVINGS BANK (ASB) EARNINGS

ASB’s third quarter 2022 net income was $20.8 million, compared to $17.5 million in the second quarter of 2022 and $19.3 million in the third quarter of 2021. The increase in net income compared to the linked quarter primarily reflected higher net interest income due to the rising interest rate environment and a negative provision expense recorded in the third quarter. The increase in net income compared to the prior year quarter was primarily due to higher net interest income, partially offset by a smaller negative provision and lower noninterest income.

Total earning assets as of September 30, 2022 were $8.9 billion, up 4.7% from December 31, 2021.

Total loans were $5.7 billion as of September 30, 2022, up 9.3% from December 31, 2021, reflecting growth across nearly the entire portfolio year to date.

Total deposits were $8.3 billion as of September 30, 2022, an increase of 1.1% from December 31, 2021. For the third quarter of 2022, the average cost of funds was 0.13%, up 0.08% versus the linked quarter and up 0.07% versus the third quarter last year.

ASB’s return on average equity3 for the third quarter of 2022 was 15.1%, compared to 12.2% in the linked quarter and 10.3% in the third quarter of 2021. Return on average assets

3 Bank return on average equity calculated using daily average common equity.

was 0.89% for the third quarter of 2022, compared to 0.76% in the linked quarter and 0.86% in the same quarter last year.

In the third quarter of 2022, ASB paid dividends of $5.0 million to HEI. ASB had a Tier 1 leverage ratio of 7.75% as of September 30, 2022.

HOLDING AND OTHER COMPANIES

The holding and other companies’ net loss was $8.4 million in the third quarter of 2022 compared to $6.2 million in the third quarter of 2021. The higher net loss was primarily due to higher interest expense and higher general and administrative expenses.

BOARD DECLARES QUARTERLY DIVIDEND

On November 3, 2022, HEI announced that the Board of Directors declared a quarterly cash dividend of $0.35 per share, payable on December 9, 2022 to shareholders of record at the close of business on November 22, 2022 (ex-dividend date is November 21, 2022). This quarterly dividend is equivalent to an annual rate of $1.40 per share. Dividends have been paid on an uninterrupted basis since 1901. At the indicated annual dividend rate and based on the closing price per share on November 3, 2022 of $37.27, HEI’s dividend yield is 3.8%.

WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND 2022 GUIDANCE

HEI will conduct a webcast and conference call to review its consolidated results and

2022 earnings guidance and outlook on Monday, November 7, 2022 at 11:15 a.m. Hawaii time (4:15 p.m. Eastern).

To listen to the conference call, dial 1-844-200-6205 (U.S.) or +1-929-526-1599 (international) and enter passcode 162868. Parties may also access presentation materials 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. An audio replay will also be available about two hours after the event through November 21, 2022. To access the audio replay, dial 1-866-813-9403 (U.S.) or +44-204-525-0658 (international) and enter passcode 881525.

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 dms.puc.hawaii.gov/dms 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.

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, 2021 and HEI’s other 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, 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.

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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)	2022		2021		2022		2021
Revenues
Electric utility	$	955,971	$	679,499	$	2,483,636	$	1,846,242
Bank	81,411		76,208		231,850		230,599
Other	4,815		1,197		7,386		3,266
Total revenues	1,042,197		756,904		2,722,872		2,080,107
Expenses
Electric utility	876,922		604,307		2,259,838		1,634,252
Bank	54,311		51,151		152,797		130,440
Other	8,849		4,130		22,178		18,212
Total expenses	940,082		659,588		2,434,813		1,782,904
Operating income (loss)
Electric utility	79,049		75,192		223,798		211,990
Bank	27,100		25,057		79,053		100,159
Other	(4,034)		(2,933)		(14,792)		(14,946)
Total operating income	102,115		97,316		288,059		297,203
Retirement defined benefits credit—other than service costs	1,039		1,058		3,528		4,709
Interest expense, net—other than on deposit liabilities and other bank borrowings	(26,626)		(23,477)		(75,940)		(70,530)
Allowance for borrowed funds used during construction	825		827		2,401		2,386
Allowance for equity funds used during construction	2,552		2,427		7,431		6,995
Gain on sales of investment securities, net and equity-method investment	—		—		8,123		528
Income before income taxes	79,905		78,151		233,602		241,291
Income taxes	17,352		14,265		48,395		48,229
Net income	62,553		63,886		185,207		193,062
Preferred stock dividends of subsidiaries	471		471		1,417		1,417
Net income for common stock	$	62,082	$	63,415	$	183,790	$	191,645
Basic earnings per common share	$	0.57	$	0.58	$	1.68	$	1.75
Diluted earnings per common share	$	0.57	$	0.58	$	1.68	$	1.75
Dividends declared per common share	$	0.35	$	0.34	$	1.05	$	1.02
Weighted-average number of common shares outstanding	109,470		109,311		109,421		109,272
Weighted-average shares assuming dilution	109,705		109,575		109,712		109,588
Net income (loss) for common stock by segment
Electric utility	$	49,764	$	50,342	$	140,308	$	135,601
Bank	20,756		19,265		62,092		79,105
Other	(8,438)		(6,192)		(18,610)		(23,061)
Net income for common stock	$	62,082	$	63,415	$	183,790	$	191,645
Comprehensive income (loss) attributable to HEI	$	(33,930)	$	52,110	$	(117,221)	$	152,796
Return on average common equity (%) (twelve months ended)					10.5		10.3

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)	2022		2021		2022		2021
Revenues	$	955,971	$	679,499	$	2,483,636	$	1,846,242
Expenses
Fuel oil	383,602		180,682		874,543		447,245
Purchased power	225,209		185,759		606,827		490,520
Other operation and maintenance	121,110		116,468		371,259		349,180
Depreciation	58,711		57,386		175,921		172,122
Taxes, other than income taxes	88,290		64,012		231,288		175,185
Total expenses	876,922		604,307		2,259,838		1,634,252
Operating income	79,049		75,192		223,798		211,990
Allowance for equity funds used during construction	2,552		2,427		7,431		6,995
Retirement defined benefits credit—other than service costs	895		877		2,876		2,918
Interest expense and other charges, net	(19,609)		(18,148)		(56,735)		(54,126)
Allowance for borrowed funds used during construction	825		827		2,401		2,386
Income before income taxes	63,712		61,175		179,771		170,163
Income taxes	13,450		10,335		37,967		33,066
Net income	50,262		50,840		141,804		137,097
Preferred stock dividends of subsidiaries	228		228		686		686
Net income attributable to Hawaiian Electric	50,034		50,612		141,118		136,411
Preferred stock dividends of Hawaiian Electric	270		270		810		810
Net income for common stock	$	49,764	$	50,342	$	140,308	$	135,601
Comprehensive income attributable to Hawaiian Electric	$	49,872	$	50,448	$	140,518	$	135,776
OTHER ELECTRIC UTILITY INFORMATION
Kilowatthour sales (millions)
Hawaiian Electric	1,655		1,636		4,609		4,578
Hawaii Electric Light	269		273		784		774
Maui Electric	288		282		807		774
	2,212		2,191		6,200		6,126
Average fuel oil cost per barrel	$	166.79	$	86.77	$	137.23	$	74.93
Return on average common equity (%) (twelve months ended)1					8.1		8.3

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, 2022		June 30, 2022		September 30, 2021		2022		2021
Interest and dividend income
Interest and fees on loans	$	53,365	$	48,129	$	49,445	$	147,499	$	150,418
Interest and dividends on investment securities	15,052		14,693		11,996		43,729		31,709
Total interest and dividend income	68,417		62,822		61,441		191,228		182,127
Interest expense
Interest on deposit liabilities	1,704		921		1,176		3,572		3,919
Interest on other borrowings	1,055		139		5		1,199		55
Total interest expense	2,759		1,060		1,181		4,771		3,974
Net interest income	65,658		61,762		60,260		186,457		178,153
Provision for credit losses	(186)		2,757		(1,725)		(692)		(22,367)
Net interest income after provision for credit losses	65,844		59,005		61,985		187,149		200,520
Noninterest income
Fees from other financial services	4,763		4,716		4,800		15,066		15,337
Fee income on deposit liabilities	4,879		4,552		4,262		14,122		12,029
Fee income on other financial products	2,416		2,529		2,124		7,663		6,767
Bank-owned life insurance	122		(142)		2,026		661		6,211
Mortgage banking income	181		372		1,272		1,630		7,497
Gain on sale of real estate	—		—		—		1,002		—
Gain on sale of investment securities, net	—		—		—		—		528
Other income, net	633		475		283		1,480		631
Total noninterest income	12,994		12,502		14,767		41,624		49,000
Noninterest expense
Compensation and employee benefits	28,597		27,666		30,888		83,478		86,595
Occupancy	5,577		5,467		5,157		16,996		15,226
Data processing	4,509		4,484		4,278		13,144		13,162
Services	2,751		2,522		2,272		7,712		7,609
Equipment	2,432		2,402		2,373		7,163		6,989
Office supplies, printing and postage	1,123		1,073		1,072		3,256		3,094
Marketing	925		934		995		2,877		2,308
FDIC insurance	914		891		808		2,613		2,412
Other expense	4,729		3,959		3,668		11,929		9,790
Total noninterest expense	51,557		49,398		51,511		149,168		147,185
Income before income taxes	27,281		22,109		25,241		79,605		102,335
Income taxes	6,525		4,643		5,976		17,513		23,230
Net income	$	20,756	$	17,466	$	19,265	$	62,092	$	79,105
Comprehensive income (loss)	$	(78,186)	$	(71,369)	$	7,581	$	(248,126)	$	38,666
OTHER BANK INFORMATION (annualized %, except as of period end)
Return on average assets	0.89		0.76		0.86		0.90		1.21
Return on average equity	15.11		12.17		10.26		13.65		14.31
Return on average tangible common equity	17.77		14.20		11.52		15.79		16.11
Net interest margin	2.96		2.85		2.90		2.87		2.94
Efficiency ratio	65.55		66.52		68.66		65.40		64.80
Net charge-offs to average loans outstanding	0.03		—		0.03		0.01		0.08
As of period end
Nonaccrual loans to loans receivable held for investment	0.35		0.40		0.97
Allowance for credit losses to loans outstanding	1.24		1.28		1.48
Tangible common equity to tangible assets	4.0		4.9		7.3
Tier-1 leverage ratio	7.7		7.7		8.0
Dividend paid to HEI (via ASB Hawaii, Inc.) ($ in millions)	$	5.0	$	12.0	$	12.0	$	32.0	$	40.0

Hawaiian Electric Company, Inc. PFD SER E 5% (HAWEL) 8-KHei Reports Third Quarter 2022 Results