Central Pacific Bancorp in Honolulu, reportedly in talks this year to buy Hawaiian Electric's American Savings Bank, said deal discussions are now on ice.
"While the parties are no longer currently engaged in discussions, we remain interested in the opportunity under the right terms and conditions," Central Pacific Chairman and CEO Arnold Martines said Wednesday during the $7.4 billion-asset bank's third quarter earnings call.
He said Central Pacific recorded $3.1 million in pretax expenses "related to our evaluation and assessment of a strategic opportunity."
He did not name
Citing unnamed sources, Bloomberg in September reported that Central Pacific was in discussions with multiple alternative asset managers to help buy the $9.3 billion-asset American Savings from Hawaiian Electric, the utility under scrutiny for its role in the August
Central Pacific reported third-quarter net income of $13.3 million, or 49 cents per share. Those results compared with net income of $13.1 million, or 49 cents, a year earlier.
Excluding the expense hit related to the deal talks, Central Pacific said its adjusted net income was $15.7 million, or 58 cents per share.
Earlier this year, Bloomberg reported that Hawaiian Electric was looking to sell American Savings to create a cash buffer against dozens of lawsuits across state and federal courts. Many of the complaints accused the utility of sparking the
After that report, Evercore ISI analyst Michael Lonegan noted that the bank was in a strong financial position and had suffered minimal direct impact from the fires. "We would value the bank in the range of $600-$800 million in these circumstances," Lonegan said.
American Savings, also based in Honolulu, on Wednesday reported third-quarter net income of $18.8 million, up from $11.4 million a year earlier. As a unit of Hawaiian Electric, it does not hold an earnings call.
"We remain well-positioned to support our customers and community for the long term, with a strong capital and liquidity position, strong credit quality, and ample lending capacity," Ann Teranishi, president and CEO of American Savings, said in the bank's earnings release.
Y-12 Federal Credit Union in Oak Ridge, Tennessee, said it would acquire First State Bank of the Southeast in Middlesboro, Kentucky. It was the 19th such deal announced this year.
Hawaiian Electric is scheduled to report earnings and hold a call with analysts on Nov. 8.
Earlier this month, authorities culminated an investigation with a report blaming the Lahaina fire on Hawaiian Electric. The report from the Maui Fire Department and the Federal Bureau of Alcohol Tobacco, Firearms and Explosives said the disaster was started from a blaze caused by broken power lines.
"We deeply regret that our operations contributed to the fire. … We have looked closely at our protocols and actions that day and have made many changes in our operations and resilience strategies to ensure we fulfill our commitment to keep the public safe, especially in extreme weather events, which are becoming more frequent and severe," Hawaiian Electric said in a statement.
American Savings is not the only Hawaiian bank on the potential sale block. The $17.4 billion-asset Hope Bancorp in Los Angeles agreed in April to an
The seller's shareholders are slated to vote on the pending sale to Hope on Nov. 6. Approval is hardly a sure thing, however, given there is a
More than 100 banks announced plans to sell in 2024. That put the industry ahead of last year's total of 98 deals, according to updated data from S&P Global Market Intelligence.
One of the biggest transactions of the year was announced this month.
Winter Haven, Florida-based
