AMERICAN SAVINGS BANK REPORTS 3RD QUARTER 2022 FINANCIAL RESULTS.

HONOLULU: American Savings Bank, F.S.B. (ASB), a wholly owned subsidiary of Hawaiian Electric Industries, Inc. (NYSE: HE), today reported third quarter 2022 net income of $20.8 million, compared to $17.5 million in the second, or linked quarter of 2022 and $19.3 million in the third quarter of 2021.

"We are pleased with the bank's solid results for the third quarter and year to date," said Ann Teranishi, president and chief executive officer of ASB. "We again saw broad-based loan growth during the quarter, reflecting great work by our team along with the Hawaii economy's ongoing recovery from the pandemic. We continued to see positive credit trends despite the inflationary environment, and the rising interest rate environment continued to benefit our net interest margin and overall profitability," said Teranishi.

Financial Highlights

Third quarter 2022 net interest income of $65.7 million was up from $61.8 million in the linked quarter, and $60.3 million in the third quarter of 2021. The increase versus the linked quarter reflected higher yields and balances across nearly the entire loan portfolio and higher yields in the investment securities portfolio, partially offset by higher funding costs and lower fee income associated with the Paycheck Protection Program (PPP) portfolio as PPP loans continued to pay down. The increase versus the prior year quarter reflected higher average earning assets balances and higher yields, partially offset by lower PPP fee income. Net interest margin was 2.96% compared to 2.85% in the linked quarter, and 2.90% in the third quarter last year.

In the third quarter ASB recorded a negative provision for credit losses of $0.2 million compared to a provision for credit losses of $2.8 million in the linked quarter and a negative provision for credit losses of $1.7 million in the third quarter of 2021. The quarter's negative provision reflected continued favorable credit trends that led to the release of reserves, more than offsetting additional provisioning for loan growth. As of September 30, 2022, ASB's allowance for credit losses to outstanding loans was 1.24% compared to 1.28% as of June 30, 2022 and 1.48% as of September 30, 2021.

The net charge-off ratio for the third quarter of 2022 was 0.03%, compared to nil in the linked quarter and 0.03% in the third quarter of 2021. Nonaccrual loans as a percent of total loans receivable held for investment were 0.35% in the third...