Hawaiian Electric Industries Inc. said Wednesday its earnings rose 39 percent in the fourth quarter, driven largely by gains at its electric utility subsidiary.

HEI, which operates Hawaiian Electric Co. and American Savings Bank, recorded net income of $34.2 million, or 36 cents a share, in the October-to-December period, up from $24.7 million, or 26 cents a share in the same period a year earlier.

For the full year, HEI’s earnings rose to $138.2 million, or $1.44 a share, up 22 percent from $113.5 million, or $1.21 a share in 2010.

Nearly three-quarters of HEI’s earnings increase in the fourth quarter flowed from Hawaiian Electric Co.’s operations. The utility earned $25.8 million in the three-month period, up 37 percent from $18.9 million in same quarter a year earlier. For the full year, HECO earned $100 million, up 31 percent from $76.6 million in 2010.

The utility reinvested more than twice its 2011 earnings — $226 million — in upgrades to its electrical grid to improve reliability and prepare it to handle greater amounts of renewable energy, said Constance Lau, HEI president and chief executive officer.

"Our improved earnings help us fund the upfront investments necessary to support Hawaii’s move to clean energy," Lau said. "With the majority of customer bill increases driven by fuel prices, it is crucial that we reduce our dependence on imported oil and continue to add as much cost-effective renewable energy as possible as fast as we can."

Since all of the utility’s revenue is generated from ratepayers, they are the ones who ultimately bear the cost of any capital improvements undertaken by the company.

The typical Oahu electric bill for a residential customer using 600 kilowatts of electricity rose by $61 over the course of 2011. Of the total increase, $57 was from fuel costs and $4 was from rate hikes and other adjustments, Lau said.

The utility operates HECO on Oahu, Hawaii Electric Light Co. on Hawaii island, and Maui Electric Light Co. in Maui County.

The single biggest gain in the utility’s revenue last year, $27 million, was from rate increases at HECO, HELCO and MECO. Another $6 million was generated from increasing efficiencies at its operations at HELCO and MECO, the company said.

The increases were partially offset by a $6 million write-down of a transmission project and $1 million in lower kilowatt-hour sales for Hawaii island and Maui County. The declines were attributed to customer conservation measures undertaken as the result of high oil prices.

The state Public Utilities Commission caps HECO’s allowed return on equity at 10 percent. The utility’s actual ROE in 2011 was 6.4 percent, the company said.

Net income at American Savings Bank was $15.3 million in the fourth quarter, up from $13.3 million in the same period a year earlier. The bank attributed the $2 million increase to a $3 million lower provision for loan losses partially offset by a $1 million increase in noninterest expenses.

The bank’s net income for the full year rose to $59.8 million in 2011 from $58.5 million in 2010. Return on assets, a measure of bank profitability, rose to 1.23 percent in 2011 from 1.20 percent in 2010.

"At American Savings Bank, performance remained strong throughout 2011 and earnings increased despite the significant challenges posed by the interest rate environment and federal regulation of bank fees," Lau said.

The financial results were released after the New York Stock Exchange closed. Shares rose by 5 cents to $26.41 in after-hours trading Wednesday.