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American Savings Bank loans jumped in the second quarter, but net income fell 42.3%, mainly due to the release of a large sum of money from its loan loss reserve during of the previous quarter, which distorted the most recent results.
The state’s third-largest bank, which is owned by Hawaiian Electric Industries Inc., today announced it had net income of $17.5 million after setting aside $2.8 million to potential loan losses due to the strong growth in this area during the quarter. That compares to a profit 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 the strong execution of our team and a level of earnings that is driven by a more normalized (loan) provision compared to recent periods,” said American Savings President and CEO. , Ann Teranishi, in a statement. “We saw strong loan growth across our portfolio during the quarter, and credit quality evolved favourably.”
Loans rose 4.7% to $5.43 billion from the prior quarter, but jumped 18.7% on an annualized basis from the January-March period. Deposits increased 4.8% to $8.25 billion from the previous quarter.
The bank’s net interest income, which is the difference between what it originates in loans and what it disburses in the form of deposits, rose 1.6% to $61.8 million from compared to the quarter of the previous year. Its net interest margin rose 6 basis points to 2.85% from the January-March period, but fell 13 basis points from the year-ago quarter.
Non-interest revenue, which includes fees and commissions, fell 17.7% to $12.5 million as the bank’s mortgage banking revenue fell $1.6 million from the quarter. of the previous year.
Teranishi said the bank continues to make progress in its digital transformation to meet customer needs, including its recent launch of Zelle in its mobile banking platform.
“(It provides) a fast, secure 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 August 8. Shares of HEI edged up 1 cent to $42.30 today ahead of the American Savings earnings release.
