American Savings Bank’s loans surged in the second quarter but net income fell 42.3% primarily due to the release of a significant amount of money from its loan-loss reserve in the year-earlier quarter that skewed the most recent results.
The state’s third-largest bank, which is owned by Hawaiian Electric Industries Inc., reported today that it had net income of $17.5 million after setting aside $2.8 million for potential loan losses due to strong growth in that area during the quarter. That compares with earnings of $30.3 million in the second quarter of 2021 when the bank released $12.2 million from its loan-loss reserve.
“Our second quarter results reflect solid execution from our team and an earnings level that is driven by a more normalized (loan) provision in comparison to recent periods,” American Savings President and CEO Ann Teranishi said in a statement. “We saw strong loan growth across our portfolio during the quarter, and credit quality has been trending favorably.”
Loans rose 4.7% to $5.43 billion from the year-earlier quarter but jumped 18.7% on an annualized basis from the January-March period. Deposits increased 4.8% to $8.25 billion from the year-earlier quarter.
The bank’s net interest income, which is the difference between what it generates from loans and pays out in deposits, inched up 1.6% to $61.8 million from the year-earlier quarter. Its net interest margin rose 6 basis points to 2.85% from the January-March period but declined 13 basis points from the year-earlier quarter.
Noninterest income, which includes charges and fees, fell 17.7% to $12.5 million as the bank’s mortgage banking income decreased by $1.6 million from the year-earlier quarter.
Teranishi said the bank continues to make progress in its digital transformation to meet customers’ needs, including its recent launch of Zelle in its mobile banking platform.
“(It provides) a fast, safe and easy way for customers to send and receive money with those they trust,” she said.
Parent company HEI will announce its second-quarter results on Aug. 8. HEI’s stock edged up 1 cent to $42.30 today before American Savings’ results were announced.
