Hawaiian Electric Industries, under scrutiny for its role in the
Many of the complaints accuse the utility of sparking the
When asked about the banking unit during Hawaiian Electric's earnings call this month, Chief Financial Officer Scott DeGhetto stuck with the company's position since analysts floated the sale option late last year: "My comments are consistent with what we've said in the past. We continue to not speculate on any strategic transactions or alternatives," he said.
However, citing sources close to the company, Bloomberg in late April said Hawaiian Electric was working with advisors to consider its options for the bank, including a full or partial sale. 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.
Hawaiian Electric did tout the financial strength and value of its bank during the earnings call. The company overall earned net income of $42.1 million for the first quarter, though that was more than $7 million lower than it otherwise would have been because of wildfire-related expenses, the company said. But for the bank itself, the disaster wasn't nearly as problematic for earnings; fire costs "were immaterial to bank net income," DeGhetto said.
The $9.4 billion-asset American Savings, based in Honolulu, reported first-quarter net income of $20.9 million, up from $18.6 million a year earlier, prior to the fires.
The bank's credit quality, expenses and revenue in the first quarter were consistent with what they were a year earlier.
Its net charge-off ratio for the first quarter was 0.14%, breaking even with a year earlier. Noninterest expenses totaled $55.9 million, compared to $54.4 million in the first quarter of 2023.
Net interest income of $62.3 million was down from $64.9 million a year earlier, though noninterest income rose to $17.2 million, from $14.4 million.
Hawaiian Electric President and CEO Scott Seu emphasized during the call that the bank's "loyal and long-tenured deposit base remained stable" and insured. There "is no risk to deposits as a result of legal claims related to the wildfires," Seu said.
The bank "continues to perform well," Seu said.
In terms of the ongoing lawsuits, Hawaiian Electric is in the midst of lengthy legal processes and discussions to potentially settle some challenges out of court.
"Those discussions are in progress. We can't really say when or provide any details" on possible resolution, Seu said. "Those discussions involve many different parties and we absolutely, just in general, we feel that it provides, to the extent it can provide, an attractive alternative for folks to reach closure as opposed to litigation, then it's worthy of our support."
