Hawaiian Electric Industries Inc. nearly doubled its profit in the second quarter, helped by significantly stronger earnings at its banking subsidiary.

HEI, the parent of American Savings Bank and electric utilities on Oahu, Maui and the Big Island, reported net income yesterday of $29.3 million, or 31 cents per share, during the April-to-June quarter, up from $15.5 million, or 17 cents per share, in the same period a year earlier.

"Lower credit costs and lower operating expenses at our banking operations were mainly responsible for the improvement in our second-quarter results," said Constance Lau, HEI president and chief executive officer.

American Savings reported a fourfold increase in net income to $16.1 million in the second quarter from $4 million in the year-earlier period, with much of the improvement coming from a reduction in what the bank sets aside for loan losses.

The bank was able to cut its loan-loss reserves to $1 million in the second quarter from $13.5 a million a year earlier as a result of improvements in its loan portfolio. The second-quarter provision reflected about $2.4 million in loan-loss reserves that were freed up as the result of a commercial loan being sold and the reclassification of a commercial real estate loan into a lower-risk category after the project was completed.

In addition, loan-loss reserves in the year-earlier period were elevated due to $5 million in provisions related to the charge-off of a single commercial loan, HEI said.

The bank’s return on equity, a measure of profitability closely watched by investors, rose to 12.8 percent in the second quarter from 3.4 percent a year earlier.

HEI experienced a more modest profit increase at its electric companies, with net income rising by 14 percent to $17.6 million in the second quarter from $15.5 million a year earlier.

"At the utility, we are seeing modest recovery from a long period of underearning our authorized rates of return. Rate relief granted over the last year was largely offset by higher operation, maintenance, financing and depreciation expenses," Lau said.

The Public Utilities Commission approved two interim rate hikes for HECO in the past year — in August 2009 and in February 2010. However, electricity sales were down 1.1 percent in the current quarter compared with the same period a year earlier when warmer weather boosted use of air conditioners.

HEI’s shares closed up 26 cents, or 1.1 percent, at $24.11 on the New York Stock Exchange.