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Form 8-K HAWAIIAN ELECTRIC CO For: Aug 08 Filed by: HAWAIIAN ELECTRIC INDUSTRIES INC

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August 8, 2022 6:07 AM EDT
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 8, 2022
Exact Name of RegistrantCommissionI.R.S. Employer
as Specified in Its CharterFile NumberIdentification No.
Hawaiian Electric Industries, Inc.1-850399-0208097
Hawaiian Electric Company, Inc.1-495599-0040500
State of Hawaii
(State or other jurisdiction of incorporation)
 1001 Bishop Street, Suite 2900, Honolulu, Hawaii  96813 - Hawaiian Electric Industries, Inc. (HEI)
1001 Bishop Street, Suite 2500, Honolulu, Hawaii  96813 - Hawaiian Electric Company, Inc. (Hawaiian Electric)
(Address of principal executive offices and zip code)
 Registrant’s telephone number, including area code:
 (808) 543-5662 - HEI
(808) 543-7771 - Hawaiian Electric
  Not applicable
(Former name or former address, if changed since last report.)
  
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to 12(b) of the Act:
RegistrantTitle of each classTrading Symbol(s)Name of each exchange on which registered
Hawaiian Electric Industries, Inc.Common Stock, Without Par ValueHENew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule12b-2 of the Securities Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
Hawaiian Electric Industries, Inc.
☐
Hawaiian Electric Company, Inc.
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Hawaiian Electric Industries, Inc. ☐Hawaiian Electric Company, Inc. ☐



Item 2.02 Results of Operations and Financial Condition.
    On August 8, 2022, HEI issued a news release, “HEI Reports Second Quarter 2022 Results.” This news release is furnished as HEI Exhibit 99.

Item 9.01 Financial Statements and Exhibits.
(d) Exhibits    
News release, dated August 8, 2022, “HEI Reports Second Quarter 2022 Results”
104Cover Page Interactive Data File (embedded within the Inline XBRL document)

The information furnished in connection with Item 2.02 of this current report on Form 8-K including HEI Exhibit 99 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.











SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized. The signature of the undersigned companies shall be deemed to relate only to matters having reference to such companies and any subsidiaries thereof.

HAWAIIAN ELECTRIC INDUSTRIES, INC.HAWAIIAN ELECTRIC COMPANY, INC.
(Registrant)(Registrant)
/s/ Paul K. Ito/s/ Tayne S. Y. Sekimura
Paul K. ItoTayne S. Y. Sekimura
Vice President - Tax, Controller and TreasurerSenior Vice President,
   and Interim Chief Financial OfficerChief Financial Officer and Treasurer
Date: August 8, 2022
Date: August 8, 2022

1

HEI Exhibit 99
revisedlogo.jpg
NEWS RELEASE
August 8, 2022
Contact:Julie R. SmolinskiTelephone: (808) 543-7300
Vice President, Investor Relations & Corporate SustainabilityE-mail: ir@hei.com
HEI REPORTS SECOND QUARTER 2022 RESULTS

2Q22 Net Income of $52.5M and Diluted Earnings Per Share (EPS)1 of $0.48
Utility Performing Well Despite Inflationary Environment
Bank Results Reflect Strong Loan Growth, Expanding Net Interest Margin, Favorable Credit Trends and More Normalized Provision

HONOLULU - Hawaiian Electric Industries, Inc. (NYSE - HE) (HEI) today reported consolidated net income for common stock for the second quarter of 2022 of $52.5 million and EPS of $0.48 compared to $63.9 million and EPS of $0.58 for the second quarter of 2021. The lower net income was due primarily to the prior year’s negative provision for credit losses at American Savings Bank, and the return to a more normalized provision expense due to strong loan growth.
“Our consolidated second quarter results reflect solid performance across our enterprise,” said Scott Seu, HEI president and CEO. “The utility continues to execute well under performance-based regulation, and will continue to focus on cost control to moderate the impacts of inflation and high fuel costs on customer bills. We did see higher maintenance expenses due to purposeful acceleration of work on our generating units to reduce downtimes and ensure reliable service to our customers as we completely transition off of coal and one of the largest power plants in the state on September 1. Our bank results reflect good execution from the team and an earnings level that is driven by a more normalized provision in comparison to recent periods. The bank saw strong loan growth during the quarter, and credit quality is trending favorably. Our bank continues to progress its digital transformation, and launched Zelle during the quarter, providing a fast and easy way for customers to send and receive money.
“We know that our communities and customers are feeling financially challenged, and we are continuing to provide options to help manage their utility bills, while our bank continues working to help meet customers’ financial needs,” said Seu.

1 Unless otherwise indicated, throughout this release earnings per share (EPS) refers to diluted earnings per share.
1

HAWAIIAN ELECTRIC COMPANY (HAWAIIAN ELECTRIC) EARNINGS2
Hawaiian Electric’s net income for the second quarter of 2022 was $44.1 million, compared to $41.9 million in the second quarter of 2021, with the increase primarily driven by the following after-tax items:
•$7 million higher Annual Revenue Adjustment revenues;
•$1 million related solely to a change in the timing for revenue recognition within the year for Maui County operations that eliminates seasonality in recognizing target revenues and results in recognizing revenues evenly throughout the year, with target revenues recognized on an annual basis remaining unchanged; and
•$1 million in higher major project interim recovery revenues related to grid modernization.
These items were partially offset by the following after-tax items:
•$5 million in higher operations and maintenance expenses, including $6 million driven by more generating facility overhauls and maintenance performed and $1 million related to higher bad debt expense, partially offset by $2 million in lower expenses compared to last year from (i) last year’s write-off due to termination of an agreement relating to a combined heat and power unit and (ii) higher 2021 expenses for environmental reserves;
•$1 million higher depreciation expense due to increasing investments to integrate more renewable energy and improve customer reliability and system efficiency; and
•$1 million in higher interest expense.

AMERICAN SAVINGS BANK (ASB) EARNINGS
ASB’s second quarter of 2022 net income was $17.5 million, compared to $23.9 million in the first quarter of 2022 and $30.3 million in second quarter of 2021. The decrease in net income compared to the linked and prior year quarters primarily reflected a return to a more normalized provision due to strong loan growth, following five consecutive quarters of provision releases.
Total earning assets as of June 30, 2022 were $8.7 billion, up 2.6% from December 31, 2021.
Total loans were $5.4 billion as of June 30, 2022, up 4.2% from December 31, 2021, reflecting growth across nearly the entire portfolio and driven by strong growth in commercial real estate loans.
Total deposits were $8.3 billion as of June 30, 2022, an increase of 1.0% from December 31, 2021. For the second quarter of 2022, the average cost of funds was 0.05%, flat versus the linked quarter and down two basis points versus the same quarter last year.    
2 Note: Utility amounts indicated as after-tax in this earnings release are based upon adjusting items using a current year composite statutory tax rate of 25.75%.
2

ASB’s return on average equity3 for the second quarter of 2022 was 12.2%, compared to 13.7% in the linked quarter and 16.8% in the second quarter of 2021. Return on average assets was 0.76% for the second quarter of 2022, compared to 1.04% in the linked quarter and 1.38% in the same quarter last year.
In the second quarter of 2022, ASB paid dividends of $12.0 million to HEI. ASB had a Tier 1 leverage ratio of 7.7% as of June 30, 2022.

HOLDING AND OTHER COMPANIES
The holding and other companies’ net loss was $9.1 million in the second quarter of 2022 compared to $8.3 million in the second quarter of 2021. The higher net loss was primarily due to higher interest expense, principally due to higher borrowings, and higher general and administrative expenses, including higher charitable contributions (due to timing), partially offset by increased charitable contribution expense in the second quarter of 2021 related to a settlement agreement associated with an executive transition.

BOARD DECLARES QUARTERLY DIVIDEND
On August 4, 2022, HEI announced that the Board of Directors declared a quarterly cash dividend of $0.35 per share, payable on September 9, 2022 to shareholders of record at the close of business on August 18, 2022 (ex-dividend date is August 17, 2022). This quarterly dividend is equivalent to an annual rate of $1.40 per share. Dividends have been paid on an uninterrupted basis since 1901. At the indicated annual dividend rate and based on the closing price per share on August 4, 2022 of $42.51, HEI’s dividend yield is 3.3%.

WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND 2022 GUIDANCE
HEI will conduct a webcast and conference call to review its consolidated results and
2022 earnings guidance and outlook on Monday, August 8, 2022 at 10:15 a.m. Hawaii time (4:15 p.m. Eastern).
To listen to the conference call, dial 1-844-200-6205 (U.S.) or +1-929-526-1599 (international) and enter passcode 638186. Parties may also access presentation materials and/or listen to the conference call by visiting the conference call link on HEI’s website at www.hei.com under “Investor Relations,” sub-heading “News and Events — Events and Presentations.”
3 Bank return on average equity calculated using daily average common equity.
3

A replay will be available online and via phone. The online replay will be available on HEI’s website about two hours after the event. An audio replay will also be available about two hours after the event through August 22, 2022. To access the audio replay, dial 1-866-813-9403 (U.S.) or +44-204-525-0658 (international) and enter passcode 484022.
HEI and Hawaiian Electric intend to continue to use HEI’s website, www.hei.com, as a means of disclosing additional information; such disclosures will be included in the Investor Relations section of the website. Accordingly, investors should routinely monitor the Investor Relations section of HEI’s website, in addition to following HEI’s, Hawaiian Electric’s and ASB’s press releases, HEI’s and Hawaiian Electric’s Securities and Exchange Commission (SEC) filings and HEI’s public conference calls and webcasts. Investors may sign up to receive e-mail alerts via the “Investor Relations” section of the website. The information on HEI’s website is not incorporated by reference into this document or into HEI’s and Hawaiian Electric’s SEC filings unless, and except to the extent, specifically incorporated by reference.
Investors may also wish to refer to the Public Utilities Commission of the State of Hawaii (PUC) website at dms.puc.hawaii.gov/dms to review documents filed with, and issued by, the PUC. No information on the PUC website is incorporated by reference into this document or into HEI’s and Hawaiian Electric’s SEC filings.

ABOUT HEI
The HEI family of companies provides the energy and financial services that empower much of the economic and community activity of Hawaii. HEI’s electric utility, Hawaiian Electric, supplies power to approximately 95% of Hawaii’s population and is undertaking an ambitious effort to decarbonize its operations and the broader state economy. Its banking subsidiary, ASB, is one of Hawaii’s largest financial institutions, providing a wide array of banking and other financial services and working to advance economic growth, affordability and financial fitness. HEI also helps advance Hawaii’s sustainability goals through investments by its non-regulated subsidiary, Pacific Current. For more information, visit www.hei.com.

FORWARD-LOOKING STATEMENTS
This release may contain “forward-looking statements,” which include statements that are predictive in nature, depend upon or refer to future events or conditions, and usually include words such as “will,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “predicts,” “estimates” or similar expressions. In addition, any statements concerning future financial performance, ongoing business strategies or prospects or possible future actions are also forward-looking
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statements. Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties and the accuracy of assumptions concerning HEI and its subsidiaries, the performance of the industries in which they do business and economic, political and market factors, among other things. These forward-looking statements are not guarantees of future performance.
Forward-looking statements in this release should be read in conjunction with the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” discussions (which are incorporated by reference herein) set forth in HEI’s Annual Report on Form 10-K for the year ended December 31, 2021 and HEI’s other periodic reports that discuss important factors that could cause HEI’s results to differ materially from those anticipated in such statements. These forward-looking statements speak only as of the date of the report, presentation or filing in which they are made. Except to the extent required by the federal securities laws, HEI, Hawaiian Electric, ASB and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


###
5

Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME DATA
(Unaudited)
Three months ended June 30Six months ended June 30
(in thousands, except per share amounts)2022202120222021
Revenues
Electric utility$818,873 $601,879 $1,527,665 $1,166,743 
Bank75,324 77,260 150,439 154,391 
Other1,410 1,118 2,571 2,069 
Total revenues895,607 680,257 1,680,675 1,323,203 
Expenses 
Electric utility747,719 534,195 1,382,916 1,029,945 
Bank 53,401 37,454 98,486 79,289 
Other7,819 6,752 13,329 14,082 
Total expenses808,939 578,401 1,494,731 1,123,316 
Operating income (loss) 
Electric utility71,154 67,684 144,749 136,798 
Bank21,923 39,806 51,953 75,102 
Other(6,409)(5,634)(10,758)(12,013)
Total operating income86,668 101,856 185,944 199,887 
Retirement defined benefits credit—other than service costs1,246 1,216 2,489 3,651 
Interest expense, net—other than on deposit liabilities and other bank borrowings(24,965)(23,317)(49,314)(47,053)
Allowance for borrowed funds used during construction798 812 1,576 1,559 
Allowance for equity funds used during construction2,470 2,377 4,879 4,568 
Gain on sales of investment securities, net and equity-method investment— — 8,123 528 
Income before income taxes66,217 82,944 153,697 163,140 
Income taxes13,203 18,599 31,043 33,964 
Net income53,014 64,345 122,654 129,176 
Preferred stock dividends of subsidiaries473 473 946 946 
Net income for common stock$52,541 $63,872 $121,708 $128,230 
Basic earnings per common share$0.48 $0.58 $1.11 $1.17 
Diluted earnings per common share$0.48 $0.58 $1.11 $1.17 
Dividends declared per common share$0.35 $0.34 $0.70 $0.68 
Weighted-average number of common shares outstanding109,432 109,282 109,397 109,252 
Weighted-average shares assuming dilution109,662 109,515 109,714 109,557 
Net income (loss) for common stock by segment
Electric utility$44,135 $41,901 $90,544 $85,259 
Bank17,466 30,284 41,336 59,840 
Other(9,060)(8,313)(10,172)(16,869)
Net income for common stock$52,541 $63,872 $121,708 $128,230 
Comprehensive income (loss) attributable to HEI$(35,299)$80,344 $(83,291)$100,686 
Return on average common equity (%) (twelve months ended)10.4 10.5 

This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI filings with the SEC. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.
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Hawaiian Electric Company, Inc. (Hawaiian Electric) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME DATA
(Unaudited)
Three months ended June 30Six months ended June 30
($ in thousands, except per barrel amounts)2022202120222021
Revenues$818,873 $601,879 $1,527,665 $1,166,743 
Expenses  
Fuel oil269,655 139,136 490,941 266,563 
Purchased power218,085 162,465 381,618 304,761 
Other operation and maintenance124,892 118,142 250,149 232,712 
Depreciation58,739 57,381 117,210 114,736 
Taxes, other than income taxes76,348 57,071 142,998 111,173 
Total expenses747,719 534,195 1,382,916 1,029,945 
Operating income71,154 67,684 144,749 136,798 
Allowance for equity funds used during construction2,470 2,377 4,879 4,568 
Retirement defined benefits credit—other than service costs991 1,020 1,981 2,041 
Interest expense and other charges, net(18,800)(17,995)(37,126)(35,978)
Allowance for borrowed funds used during construction798 812 1,576 1,559 
Income before income taxes56,613 53,898 116,059 108,988 
Income taxes11,979 11,498 24,517 22,731 
Net income44,634 42,400 91,542 86,257 
Preferred stock dividends of subsidiaries229 229 458 458 
Net income attributable to Hawaiian Electric44,405 42,171 91,084 85,799 
Preferred stock dividends of Hawaiian Electric270 270 540 540 
Net income for common stock$44,135 $41,901 $90,544 $85,259 
Comprehensive income attributable to Hawaiian Electric$44,186 $41,936 $90,646 $85,328 
OTHER ELECTRIC UTILITY INFORMATION
Kilowatthour sales (millions)
   Hawaiian Electric1,506 1,514 2,954 2,942 
   Hawaii Electric Light261 256 515 501 
   Maui Electric264 256 519 492 
2,031 2,026 3,988 3,935 
Average fuel oil cost per barrel$139.51 $73.58 $120.54 $68.59 
Return on average common equity (%) (twelve months ended)1
8.2 8.9 
1 Simple average.
This information should be read in conjunction with the consolidated financial statements and the notes thereto in Hawaiian Electric filings with the SEC. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.



7

American Savings Bank, F.S.B.
STATEMENTS OF INCOME DATA
(Unaudited)
Three months ended Six months ended June 30
(in thousands)June 30, 2022March 31,
2022		June 30, 202120222021
Interest and dividend income   
Interest and fees on loans$48,129 $46,005 $51,026 $94,134 $100,973 
Interest and dividends on investment securities14,693 13,984 11,040 28,677 19,713 
Total interest and dividend income62,822 59,989 62,066 122,811 120,686 
Interest expense
Interest on deposit liabilities921 947 1,281 1,868 2,743 
Interest on other borrowings139 5 23 144 50 
Total interest expense1,060 952 1,304 2,012 2,793 
Net interest income61,762 59,037 60,762 120,799 117,893 
Provision for credit losses2,757 (3,263)(12,207)(506)(20,642)
Net interest income after provision for credit losses59,005 62,300 72,969 121,305 138,535 
Noninterest income 
Fees from other financial services4,716 5,587 5,464 10,303 10,537 
Fee income on deposit liabilities4,552 4,691 3,904 9,243 7,767 
Fee income on other financial products2,529 2,718 2,201 5,247 4,643 
Bank-owned life insurance(142)681 1,624 539 4,185 
Mortgage banking income372 1,077 1,925 1,449 6,225 
Gain on sale of real estate— 1,002 — 1,002 — 
Gain on sale of investment securities, net— — — — 528 
Other income, net475 372 76 847 348 
Total noninterest income12,502 16,128 15,194 28,630 34,233 
Noninterest expense
Compensation and employee benefits27,666 27,215 27,670 54,881 55,707 
Occupancy5,467 5,952 5,100 11,419 10,069 
Data processing4,484 4,151 4,533 8,635 8,884 
Services2,522 2,439 2,475 4,961 5,337 
Equipment2,402 2,329 2,394 4,731 4,616 
Office supplies, printing and postage1,073 1,060 978 2,133 2,022 
Marketing934 1,018 665 1,952 1,313 
FDIC insurance891 808 788 1,699 1,604 
Other expense3,959 3,241 3,568 7,200 6,122 
Total noninterest expense49,398 48,213 48,171 97,611 95,674 
Income before income taxes22,109 30,215 39,992 52,324 77,094 
Income taxes4,643 6,345 9,708 10,988 17,254 
Net income$17,466 $23,870 $30,284 $41,336 $59,840 
Comprehensive income (loss)$(71,369)$(98,571)$47,283 $(169,940)$31,085 
OTHER BANK INFORMATION (annualized %, except as of period end)
Return on average assets0.76 1.04 1.38 0.90 1.39 
Return on average equity12.17 13.70 16.76 13.01 16.40 
Return on average tangible common equity14.20 15.53 18.92 14.95 18.48 
Net interest margin2.85 2.79 2.98 2.82 2.97 
Efficiency ratio66.52 64.14 63.42 65.32 62.89 
Net charge-offs to average loans outstanding0.00 0.01 0.04 0.01 0.11 
As of period end
Nonaccrual loans to loans receivable held for investment0.40 0.72 1.03 
Allowance for credit losses to loans outstanding1.28 1.30 1.51 
Tangible common equity to tangible assets4.9 5.8 7.5 
Tier-1 leverage ratio 7.7 7.8 8.0 
Dividend paid to HEI (via ASB Hawaii, Inc.) ($ in millions)$12.0 $15.0 $23.0 $27.0 $28.0 
This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI filings with the SEC. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.
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