American Savings Bank’s earnings rise amid high interest rates
American Savings Bank reported today that its net income rose 7.7% in the third quarter on the strength of a double-digit increase in loans amid a rising interest rate environment.
The state’s third-largest bank boosted its loans by 11% to $5.69 billion from the year-earlier quarter and saw them jump 19.2% on an annualized basis from the April-June period.
American Savings’ net income increased to $20.8 million from $19.3 million in the year-earlier quarter. The bank’s earnings jumped 18.8% from the previous three months.
“We are pleased with the bank’s solid results for the third quarter and year to date,” American Savings President and CEO Ann Teranishi said in a statement. “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.”
The bank’s net interest income, which is the difference between what it generates from loans and what pays out in deposits, rose 9% to $65.7 million from the year-earlier quarter. Its net interest margin rose 6 basis points to 2.96% from the year-earlier quarter and increased 11 basis points from the April-June period.
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Noninterest income, which includes charges and fees, fell 12% to $13 million, as the bank’s mortgage banking income decreased $1.1 million from the year-earlier period.
Deposits increased 3.5% to $8.26 billion from the year-earlier quarter.
American Savings released $186,000 from its loan-loss reserve in the third quarter, a smaller amount than the $1.7 million it released from its reserve in the year-earlier quarter.
Parent company Hawaiian Electric Industries Inc. will announce its third-quarter results on Nov. 7. HEI’s stock rose $1.07 Friday to $37.87 before American Savings’ results were announced.
EARNINGS
Third-quarter net
* $20.8 million
Year-earlier net
* $19.3 million
