American Savings Bank’s earnings jumped 20 percent to a record $19 million in the first quarter amid strong deposit growth and savings from the new corporate tax law.
The state’s third-largest bank said today it saw its net income rise to $19 million from $15.8 million in the year-earlier period. Deposits rose 7.1 percent to $6.1 billion. In addition, the Tax Cuts and Jobs Act that went into effect Jan. 1 reduced American Savings’ tax expense by about $3 million from the year-earlier period.
“Our first-quarter results reflect the benefits of our efforts to manage the effects of rising interest rates while we continue to deliver good earning asset growth from our focus on deepening our customer relationships,” American Savings President and CEO Rich Wacker said in a statement. “The bank delivered higher net interest margin, good deposit and loan growth and — with the bottom line benefits from tax reform — we reported the highest quarterly net income in American’s history.”
American Savings’ loans edged up 0.3 percent to $4.7 billion from the year-earlier quarter but were up 1.5 percent from the fourth quarter to represent an annualized increase of about 6 percent.
Assets increased 5 percent to $6.9 billion.
The bank’s net interest margin — the spread between interest received on loans and paid out on deposits — improved to 3.76 percent in the first quarter from 3.68 percent in the year-earlier quarter. Net interest income rose 6.8 percent to $58.6 million.
Noninterest income, which includes service charges and fees, fell 11.3 percent to $13.4 million in the quarter.
Hawaiian Electric Industries Inc., the parent company of the state’s largest utility and American Savings, will report its full earnings on May 10. HEI’s stock fell 20 cents to $34.69 on Monday. American Savings announced its financial results after the market closed.