American Savings Bank’s net income rose 4 percent in the fourth quarter after recognizing a one-time $1.7 million benefit related to the revaluation of tax-related items.
The revaluation is a result of the Tax Cuts and Jobs Act signed into law in December, which reduces the corporate tax rate beginning this year to 21 percent from 35 percent.
The state’s third-largest bank said today that earnings increased to $16.9 million from $16.2 million in the year-earlier quarter. Excluding the one-time tax benefit, net income for the fourth quarter would have been $16 million.
For all of 2017, American Savings’s net income rose 17 percent to $67 million from $57.3 million in 2016. Excluding the one-time benefit, earnings last year would have been $66 million.
Loans, however, slipped 1.4 percent to $4.6 billion due to a reduction in commercial market loans; the resolution of specific problem loans; and a reduction in the bank’s exposure to national syndicated credits, which is a package of multiple loans sold and bought on the secondary market.
“Our results for the fourth quarter and year show that we continue to deliver well for our customers, the bank, and for shareholders,” American Savings President and CEO Rich Wacker said in a statement. ”Solid deposit growth and improved asset quality continue to fuel the bank’s broad profitability improvement compared to last year. While loans declined slightly due to the timing of paydown and payoff of specific commercial markets loans, we see good levels of activity and believe the effect of the recent tax reforms will be positive for the Hawaii economy and workforce.”
American Savings’ deposits increased 6.2 percent to $5.9 billion and its assets climbed 5.9 percent to $6.8 billion.
The bank recorded $1.2 million in noninterest expense during the fourth quarter due to $1,000 bonuses it gave out to all of its employees except senior management.
Hawaiian Electric Industries Inc., the parent company of the state’s largest utility and American Savings, will report its full earnings on Feb. 14.