American Savings Bank reports 2nd quarter 2023 financial results

American Savings Bank, F.S.B., a wholly owned subsidiary of Hawaiian Electric Industries, Inc. reported second quarter 2023 net income of $20.2 million, compared to $18.6 million in the first quarter of 2023 and $17.5 million in the second quarter of 2022.

“Our team delivered solid results in the second quarter, growing net income to $20.2
million,” said Ann Teranishi, president and chief executive officer of ASB. “Credit quality remains strong, indicative of the continued strength and resilience of Hawaii’s economy, consumers, and businesses. ASB’s capital position remains healthy, with liquidity of approximately three times uninsured or uncollateralized deposits. Our loyal and long-tenured deposit base demonstrates the value of our customer relationships.”

Financial Highlights

Second quarter 2023 net interest income was $63.2 million compared to $64.9 million in
the first, or linked quarter of 2023 and $61.8 million in the second quarter of 2022. The lower net interest income compared to the linked quarter was primarily due to higher interest expense from increased wholesale borrowings and certificates of deposit, and lower interest and dividends on investment securities, partially offset by higher interest and fees on loans.

The higher net interest income compared to the prior year quarter was primarily due to higher interest and fees on loans, partially offset by higher interest expense. Net interest margin for the second quarter of 2023 was 2.75%, compared to 2.85% in both the linked and prior year quarters.

The second quarter 2023 provision for credit losses was $0.04 million, compared to $1.2
million in the linked quarter and $2.8 million in the second quarter of 2022. As of June 30, 2023, American Savings Bank’s allowance for credit losses to outstanding loans was 1.13% compared to 1.18% as of March 31, 2023 and 1.28% as of June 30, 2022.

The net charge-off ratio for the second quarter of 2023 was 0.14%, unchanged from the
linked quarter and up from nil in the second quarter of 2022. Nonaccrual loans as a percentage
of total loans receivable held for investment were 0.22%, compared to 0.24% in the linked
quarter and 0.40% in the prior year quarter.

Noninterest income was $15.6 million in the second quarter of 2023 compared to $14.4
million in the linked quarter and $12.5 million in the second quarter of 2022. The increase
compared to the linked and prior year quarters was primarily due to higher bank-owned life
insurance income, a gain on sale of real estate and higher fees from other financial services.

Noninterest expense was $53.8 million compared to $54.4 million in the linked quarter
and $49.4 million in the second quarter of 2022. The decrease compared to the linked quarter
was primarily due to lower deposit account expenses and lower compensation and benefits
expenses. The increase compared to the prior year quarter was primarily due to higher
compensation and benefits expenses and F.D.I.C. premiums.

Total loans were $6.1 billion as of June 30, 2023, up 2.7% from Dec. 31, 2022,
reflecting growth across most of the portfolio. Total deposits were $8.2 billion as of June 30, 2023, a decrease of 0.08% from Dec. 31, 2022. Core deposits declined 2.8%, while certificates of deposits increased 33.3%.

As of June 30, 2023, 86% of deposits were F.D.I.C. insured or fully collateralized, up slightly from 85% as of March 31, 2023, with approximately 79% of deposits F.D.I.C. insured. For
the second quarter of 2023, the average cost of funds was 0.83%, up 17 basis points versus the linked quarter and up 78 basis points versus the prior year quarter.

Wholesale funding totaled $750 million as of June 30, 2023, up from $681 million as of
March 31, 2023. For the second quarter of 2023, return on average equity was 16.2%, compared to 15.5% in the linked quarter and 12.2% in the second quarter of 2022. Return on average assets was 0.84% for the second quarter of 2023, compared to 0.78% in the linked quarter and 0.76% in the prior year quarter.

In the second quarter of 2023, American Savings Bank paid dividends of $11.0 million to Hawaiian Electric Industries. American Savings Bank had a Tier 1 leverage ratio of 7.8% as of June 30, 2023.

Hawaiian Electric Industries earnings release, Hawaiian Electric Industries webcast and conference call to discuss earnings and 2023 guidance:

Concurrent with American Savings Bank’s regulatory filing 30 days after the end of the quarter, the bank announced its second quarter 2023 financial results. These reported results relate only to American Savings Bank and are not necessarily indicative of Hawaiian Electric Industries, Inc.’s consolidated financial results for the second quarter 2023.

Hawaiian Electric Industries, Inc. plans to announce its second quarter 2023 consolidated financial results on Aug. 7 and will conduct a webcast and conference call at 10:15 a.m. HST
that same day to discuss its consolidated earnings, including American Savings Bank’s
earnings, and 2023 guidance.

To listen to the conference call, dial 1-833-470-1428 (US) or +1-929-526-1599
(international) and enter passcode 910697. Parties may also access presentation materials and/or listen to the conference call by visiting the conference call link on Hawaiian Electric Industries’s website at www.hei.com under “Investor Relations,” sub-heading “News and Events- Events and Presentations.”