American Savings’ earnings increase as margin improves

May 01-- May 1--American Savings Bank, fresh off the opening of its new $100 million headquarters, reported Tuesday that its net income rose 9.9% in the first quarter as the margin between what it received from loans and paid out in deposits widened substantially.

The state's third-largest bank posted a profit of $20.8 million versus $19 million in the year-earlier period. Its net interest margin improved to 3.99% from 3.76% in the first quarter of 2018.

"In addition to continued healthy financial performance in the first quarter, our most important accomplishment so far this year is the completion of and consolidation of our team into our new ASB Campus," American Savings President and CEO Rich Wacker said in a statement. "We are excited about all the possibilities the new campus offers us to work better together for customers and to realize operational effectiveness and cost efficiencies."

The new 11-story headquarters, at 300 N. Beretania St. near Chinatown, held its grand opening at the beginning of April and will be home to about 650 of the bank's 1,200 employees. So far, approximately 575 employees have moved in from five locations with the remainder to relocate over the next few weeks.

American Savings' net interest during the quarter jumped 8.8% to $63.7 million, primarily driven by higher interest rates. Noninterest income, which includes service charges and fees, rose 8.5% to $14.6 million primarily due to bank-owned life insurance proceeds received during the quarter.

The bank's loan's gained 2.5% to $4.8 billion from the year-earlier period. American Savings also set aside $6.9 million in reserve for potential loan losses last quarter compared with $3.5 million in the year-earlier period due to commercial-related loans it made.

Deposits rose 2.3%, and assets increased 2.5% to $7 billion.

The bank's noninterest expense rose 3% to $45.2 million in the first quarter due to new depreciation and occupancy costs of $1.3 million related to its new headquarters and the costs of four properties. Of the four properties, two are owned by American and have been listed for sale. Lease obligations for the remaining two properties end in the second quarter. The bank's two properties for sale are its downtown Honolulu office building headquarters, which is next to its main branch, and its Mililani serv­ice center. The 12-story, 60,000-square-foot downtown building at 915 Fort Street Mall, which is part of the Financial Plaza of the Pacific, is listed at $13.5 million, and its 30,000-square- foot center in Mililani Technology Park is listed at $9.3 million.

Hawaiian Electric Industries Inc., parent company of the state's largest utility and American Savings, will report its earnings Tuesday. HEI's stock rose 28 cents to a 52-week closing high of $41.48 on Tuesday.

FIRST-QUARTER NET

$20.8 million

YEAR-EARLIER NET

$19 million

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