Exact Name of Registrant as Specified in Its Charter | Commission File Number | I.R.S. Employer Identification No. | ||||||||||||
and Principal Subsidiary | ||||||||||||||
Registrant | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||
Hawaiian Electric Industries, Inc. |
Hawaiian Electric Industries, Inc. | ☒ | No | ☐ | Hawaiian Electric Company, Inc. | ☒ | No | ☐ |
Hawaiian Electric Industries, Inc. | ☒ | No | ☐ | Hawaiian Electric Company, Inc. | ☒ | No | ☐ |
Hawaiian Electric Industries, Inc.: | Hawaiian Electric Company, Inc.: | ||||||||||||||||||||||
☒ | Smaller reporting company | Large accelerated filer | ☐ | Smaller reporting company | |||||||||||||||||||
Accelerated filer | ☐ | Emerging growth company | Accelerated filer | ☐ | Emerging growth company | ||||||||||||||||||
Non-accelerated filer | ☐ | ☒ |
Hawaiian Electric Industries, Inc. | ☐ | Hawaiian Electric Company, Inc. | ☐ |
Hawaiian Electric Industries, Inc. | Yes | ☐ | No | Hawaiian Electric Company, Inc. | Yes | ☐ | No |
Class of Common Stock | Outstanding April 18, 2023 | ||||||||||
Hawaiian Electric Industries, Inc. (Without Par Value) | Shares | ||||||||||
Hawaiian Electric Company, Inc. ($6-2/3 Par Value) | Shares (not publicly traded) |
Page No. | |||||||||||
three months ended March 31, 2023 and 2022 | |||||||||||
three months ended March 31, 2023 and 2022 | |||||||||||
Condensed Consolidated Balance Sheets (unaudited) - March 31, 2023 and December 31, 2022 | |||||||||||
three months ended March 31, 2023 and 2022 | |||||||||||
three months ended March 31, 2023 and 2022 | |||||||||||
three months ended March 31, 2023 and 2022 | |||||||||||
three months ended March 31, 2023 and 2022 | |||||||||||
Condensed Consolidated Balance Sheets (unaudited) - March 31, 2023 and December 31, 2022 | |||||||||||
three months ended March 31, 2023 and 2022 | |||||||||||
three months ended March 31, 2023 and 2022 | |||||||||||
Terms | Definitions | |||||||
ACL | Allowance for credit losses, which is the current credit loss standard, requires recording the allowance based on the expected loss model | |||||||
AES Hawaii | AES Hawaii, Inc. | |||||||
AOCI | Accumulated other comprehensive income/(loss) | |||||||
ARA | Annual revenue adjustment | |||||||
ASB | American Savings Bank, F.S.B., a wholly owned subsidiary of ASB Hawaii, Inc. | |||||||
ASB Hawaii | ASB Hawaii, Inc., a wholly owned subsidiary of Hawaiian Electric Industries, Inc. and the parent company of American Savings Bank, F.S.B. | |||||||
ASU | Accounting Standards Update | |||||||
CBRE | Community-based renewable energy | |||||||
Company | Hawaiian Electric Industries, Inc. and its direct and indirect subsidiaries, including, without limitation, Hawaiian Electric Company, Inc. and its subsidiaries (listed under Hawaiian Electric); ASB Hawaii, Inc. and its subsidiary, American Savings Bank, F.S.B. and Pacific Current, LLC and its subsidiaries (listed under Pacific Current). The Old Oahu Tug Service, Inc. was dissolved in March 2022. | |||||||
Consumer Advocate | Division of Consumer Advocacy, Department of Commerce and Consumer Affairs of the State of Hawaii | |||||||
CSSM | Collective Shared Savings Mechanism | |||||||
D&O | Decision and order from the PUC | |||||||
DER | Distributed energy resources | |||||||
DRIP | HEI Dividend Reinvestment and Stock Purchase Plan | |||||||
ECRC | Energy cost recovery clause | |||||||
EIP | 2010 Equity and Incentive Plan, as amended and restated | |||||||
EPA | Environmental Protection Agency — federal | |||||||
EPRM | Exceptional Project Recovery Mechanism | |||||||
EPS | Earnings per share | |||||||
ESM | Earnings Sharing Mechanism | |||||||
EVE | Economic value of equity | |||||||
Exchange Act | Securities Exchange Act of 1934 | |||||||
FDIC | Federal Deposit Insurance Corporation | |||||||
federal | U.S. Government | |||||||
FHLB | Federal Home Loan Bank | |||||||
FHLMC | Federal Home Loan Mortgage Corporation | |||||||
FNMA | Federal National Mortgage Association | |||||||
FRB | Federal Reserve Board | |||||||
GAAP | Accounting principles generally accepted in the United States of America | |||||||
GHG | Greenhouse gas | |||||||
GNMA | Government National Mortgage Association | |||||||
GSPA | Grid Services Purchase Agreement | |||||||
Hamakua Energy | Hamakua Energy, LLC, an indirect subsidiary of Pacific Current | |||||||
Hawaii Electric Light | Hawaii Electric Light Company, Inc., an electric utility subsidiary of Hawaiian Electric Company, Inc. |
Terms | Definitions | |||||||
Hawaiian Electric | Hawaiian Electric Company, Inc., an electric utility subsidiary of Hawaiian Electric Industries, Inc. and parent company of Hawaii Electric Light Company, Inc., Maui Electric Company, Limited and Renewable Hawaii, Inc. | |||||||
HEI | Hawaiian Electric Industries, Inc., direct parent company of Hawaiian Electric Company, Inc., ASB Hawaii, Inc. and Pacific Current, LLC. The Old Oahu Tug Service, Inc. was dissolved in March 2022. | |||||||
HEIRSP | Hawaiian Electric Industries Retirement Savings Plan | |||||||
HELOC | Home equity line of credit | |||||||
HPOWER | City and County of Honolulu with respect to a power purchase agreement for a refuse-fired plant | |||||||
IIJA | Infrastructure Investment and Jobs Act | |||||||
IPP | Independent power producer | |||||||
IRLCs | Interest rate lock commitments | |||||||
Kalaeloa | Kalaeloa Partners, L.P. | |||||||
kWh | Kilowatthour/s (as applicable) | |||||||
LMI | Low-to-moderate income | |||||||
LTIP | Long-term incentive plan | |||||||
Mahipapa | Mahipapa, LLC, a subsidiary of Pacific Current | |||||||
Maui Electric | Maui Electric Company, Limited, an electric utility subsidiary of Hawaiian Electric Company, Inc. | |||||||
Mauo | Mauo, LLC, a subsidiary of Pacific Current | |||||||
MPIR | Major Project Interim Recovery | |||||||
MRP | Multi-year rate period | |||||||
MSRs | Mortgage servicing rights | |||||||
MW | Megawatt/s (as applicable) | |||||||
NII | Net interest income | |||||||
NPBC | Net periodic benefit costs | |||||||
NPPC | Net periodic pension costs | |||||||
O&M | Other operation and maintenance | |||||||
OCC | Office of the Comptroller of the Currency | |||||||
OPEB | Postretirement benefits other than pensions | |||||||
Pacific Current | Pacific Current, LLC, a wholly owned subsidiary of HEI and parent company of Hamakua Holdings, LLC, Mauo, LLC, Alenuihaha Developments, LLC, Kaʻieʻie Waho Company, LLC, Kaʻaipuaʻa, LLC, Upena, LLC and Mahipapa, LLC | |||||||
PBR | Performance-based regulation | |||||||
PIMs | Performance incentive mechanisms | |||||||
PPA | Power purchase agreement | |||||||
PPAC | Purchased power adjustment clause | |||||||
PUC | Public Utilities Commission of the State of Hawaii | |||||||
PV | Photovoltaic | |||||||
RAM | Revenue adjustment mechanism | |||||||
RBA | Revenue balancing account | |||||||
RFP | Request for proposals | |||||||
ROACE | Return on average common equity | |||||||
RORB | Return on rate base | |||||||
RPS | Renewable portfolio standards | |||||||
SBA | Small Business Administration | |||||||
SEC | Securities and Exchange Commission | |||||||
See | Means the referenced material is incorporated by reference | |||||||
SOFR | Secured Overnight Financing Rate | |||||||
TDR | Troubled debt restructuring | |||||||
Utilities | Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited | |||||||
VIEs | Variable interest entities |
Three months ended March 31 | ||||||||||||||
(in thousands, except per share amounts) | 2023 | 2022 | ||||||||||||
Revenues | ||||||||||||||
Electric utility | $ | $ | ||||||||||||
Bank | ||||||||||||||
Other | ||||||||||||||
Total revenues | ||||||||||||||
Expenses | ||||||||||||||
Electric utility | ||||||||||||||
Bank | ||||||||||||||
Other | ||||||||||||||
Total expenses | ||||||||||||||
Operating income (loss) | ||||||||||||||
Electric utility | ||||||||||||||
Bank | ||||||||||||||
Other | ( | ( | ||||||||||||
Total operating income | ||||||||||||||
Retirement defined benefits credit—other than service costs | ||||||||||||||
Interest expense, net—other than on deposit liabilities and other bank borrowings | ( | ( | ||||||||||||
Allowance for borrowed funds used during construction | ||||||||||||||
Allowance for equity funds used during construction | ||||||||||||||
Gain on sales of equity-method investment | ||||||||||||||
Income before income taxes | ||||||||||||||
Income taxes | ||||||||||||||
Net income | ||||||||||||||
Preferred stock dividends of subsidiaries | ||||||||||||||
Net income for common stock | $ | $ | ||||||||||||
Basic earnings per common share | $ | $ | ||||||||||||
Diluted earnings per common share | $ | $ | ||||||||||||
Weighted-average number of common shares outstanding | ||||||||||||||
Net effect of potentially dilutive shares (share-based compensation programs) | ||||||||||||||
Weighted-average shares assuming dilution |
Three months ended March 31 | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Net income for common stock | $ | $ | ||||||||||||
Other comprehensive income (loss), net of taxes: | ||||||||||||||
Net unrealized gains (losses) on available-for-sale investment securities: | ||||||||||||||
Net unrealized gains (losses) on available-for-sale investment securities arising during the period, net of taxes of $ | ( | |||||||||||||
Amortization of unrealized holding losses on held-to-maturity securities, net of taxes of $ | ||||||||||||||
Derivatives qualifying as cash flow hedges: | ||||||||||||||
Unrealized interest rate hedging gains arising during the period, net of taxes of $ | ||||||||||||||
Reclassification adjustment to net income, net of taxes of $( | ( | |||||||||||||
Retirement benefit plans: | ||||||||||||||
Adjustment for amortization of prior service credit and net losses (gains) recognized during the period in net periodic benefit cost, net of taxes of $( | ( | |||||||||||||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $ | ( | |||||||||||||
Other comprehensive income (loss), net of taxes | ( | |||||||||||||
Comprehensive income (loss) attributable to Hawaiian Electric Industries, Inc. | $ | $ | ( |
(dollars in thousands) | March 31, 2023 | December 31, 2022 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Accounts receivable and unbilled revenues, net | ||||||||||||||
Available-for-sale investment securities, at fair value | ||||||||||||||
Held-to-maturity investment securities, at amortized cost | ||||||||||||||
Stock in Federal Home Loan Bank, at cost | ||||||||||||||
Loans held for investment, net | ||||||||||||||
Loans held for sale, at lower of cost or fair value | ||||||||||||||
Property, plant and equipment, net of accumulated depreciation of $ | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Regulatory assets | ||||||||||||||
Other | ||||||||||||||
Goodwill | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||
Liabilities | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Interest and dividends payable | ||||||||||||||
Deposit liabilities | ||||||||||||||
Short-term borrowings—other than bank | ||||||||||||||
Other bank borrowings | ||||||||||||||
Long-term debt, net—other than bank | ||||||||||||||
Deferred income taxes | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Finance lease liabilities | ||||||||||||||
Regulatory liabilities | ||||||||||||||
Defined benefit pension and other postretirement benefit plans liability | ||||||||||||||
Other | ||||||||||||||
Total liabilities | ||||||||||||||
Preferred stock of subsidiaries - not subject to mandatory redemption | ||||||||||||||
Commitments and contingencies (Notes 3 and 4) | ||||||||||||||
Shareholders’ equity | ||||||||||||||
Preferred stock, | ||||||||||||||
Common stock, | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss, net of tax benefits | ( | ( | ||||||||||||
Total shareholders’ equity | ||||||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Common stock | Retained | Accumulated other comprehensive | ||||||||||||||||||||||||||||||
(in thousands) | Shares | Amount | Earnings | income (loss) | Total | |||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Net income for common stock | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive income, net of taxes | — | — | — | |||||||||||||||||||||||||||||
Share-based expenses and other, net | ( | — | — | ( | ||||||||||||||||||||||||||||
Common stock dividends ( | — | — | ( | — | ( | |||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Net income for common stock | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive loss, net of tax benefits | — | — | — | ( | ( | |||||||||||||||||||||||||||
Share-based expenses and other, net | ( | — | — | ( | ||||||||||||||||||||||||||||
Common stock dividends ( | — | — | ( | — | ( | |||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Three months ended March 31 | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||
Depreciation of property, plant and equipment | ||||||||||||||
Other amortization | ||||||||||||||
Provision for credit losses | ( | |||||||||||||
Loans originated, held for sale | ( | ( | ||||||||||||
Proceeds from sale of loans, held for sale | ||||||||||||||
Gain on sales of investment securities, net and equity-method investment | ( | |||||||||||||
Gain on sale of loans, net | ( | ( | ||||||||||||
Deferred income taxes | ( | ( | ||||||||||||
Share-based compensation expense | ||||||||||||||
Allowance for equity funds used during construction | ( | ( | ||||||||||||
Other | ( | ( | ||||||||||||
Changes in assets and liabilities | ||||||||||||||
Decrease in accounts receivable and unbilled revenues, net | ||||||||||||||
Decrease (increase) in fuel oil stock | ( | |||||||||||||
Decrease (increase) in regulatory assets | ( | ( | ||||||||||||
Increase in regulatory liabilities | ||||||||||||||
Increase in accounts, interest and dividends payable | ||||||||||||||
Change in prepaid and accrued income taxes, tax credits and utility revenue taxes | ( | ( | ||||||||||||
Decrease in defined benefit pension and other postretirement benefit plans liability | ( | ( | ||||||||||||
Change in other assets and liabilities | ( | ( | ||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities | ||||||||||||||
Available-for-sale investment securities purchased | ( | |||||||||||||
Principal repayments on available-for-sale investment securities | ||||||||||||||
Proceeds from repayments or maturities of held-to-maturity investment securities | ||||||||||||||
Purchase of stock from Federal Home Loan Bank | ( | |||||||||||||
Redemption of stock from Federal Home Loan Bank | ||||||||||||||
Net decrease (increase) in loans held for investment | ( | |||||||||||||
Purchase of loans held for investment | ( | |||||||||||||
Capital expenditures | ( | ( | ||||||||||||
Contributions to low income housing investments | ( | |||||||||||||
Other | ||||||||||||||
Net cash used in investing activities | ( | ( |
Three months ended March 31 | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Net increase in deposit liabilities | ||||||||||||||
Net increase (decrease) in short-term borrowings with original maturities of three months or less | ( | |||||||||||||
Net increase (decrease) in other bank borrowings with original maturities of three months or less | ( | |||||||||||||
Proceeds from issuance of short-term debt | ||||||||||||||
Proceeds from issuance of other bank borrowings | ||||||||||||||
Proceeds from issuance of long-term debt | ||||||||||||||
Repayment of long-term debt | ( | ( | ||||||||||||
Withheld shares for employee taxes on vested share-based compensation | ( | ( | ||||||||||||
Common stock dividends | ( | ( | ||||||||||||
Preferred stock dividends of subsidiaries | ( | ( | ||||||||||||
Other | ( | ( | ||||||||||||
Net cash provided by financing activities | ||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash, end of period | ||||||||||||||
Less: Restricted cash | ( | ( | ||||||||||||
Cash and cash equivalents, end of period | $ | $ |
Three months ended March 31 | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Revenues | $ | $ | ||||||||||||
Expenses | ||||||||||||||
Fuel oil | ||||||||||||||
Purchased power | ||||||||||||||
Other operation and maintenance | ||||||||||||||
Depreciation | ||||||||||||||
Taxes, other than income taxes | ||||||||||||||
Total expenses | ||||||||||||||
Operating income | ||||||||||||||
Allowance for equity funds used during construction | ||||||||||||||
Retirement defined benefits credit—other than service costs | ||||||||||||||
Interest expense and other charges, net | ( | ( | ||||||||||||
Allowance for borrowed funds used during construction | ||||||||||||||
Income before income taxes | ||||||||||||||
Income taxes | ||||||||||||||
Net income | ||||||||||||||
Preferred stock dividends of subsidiaries | ||||||||||||||
Net income attributable to Hawaiian Electric | ||||||||||||||
Preferred stock dividends of Hawaiian Electric | ||||||||||||||
Net income for common stock | $ | $ |
Three months ended March 31 | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Net income for common stock | $ | $ | ||||||||||||
Other comprehensive income (loss), net of taxes: | ||||||||||||||
Retirement benefit plans: | ||||||||||||||
Adjustment for amortization of prior service credit and net losses (gains) recognized during the period in net periodic benefit cost, net of taxes of $( | ( | |||||||||||||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $ | ( | |||||||||||||
Other comprehensive income (loss), net of taxes | ( | |||||||||||||
Comprehensive income attributable to Hawaiian Electric Company, Inc. | $ | $ |
(dollars in thousands, except par value) | March 31, 2023 | December 31, 2022 | ||||||||||||
Assets | ||||||||||||||
Property, plant and equipment | ||||||||||||||
Utility property, plant and equipment | ||||||||||||||
Land | $ | $ | ||||||||||||
Plant and equipment | ||||||||||||||
Right-of-use assets - finance lease | ||||||||||||||
Less accumulated depreciation | ( | ( | ||||||||||||
Construction in progress | ||||||||||||||
Utility property, plant and equipment, net | ||||||||||||||
Nonutility property, plant and equipment, less accumulated depreciation of $ | ||||||||||||||
Total property, plant and equipment, net | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Customer accounts receivable, net | ||||||||||||||
Accrued unbilled revenues, net | ||||||||||||||
Other accounts receivable, net | ||||||||||||||
Fuel oil stock, at average cost | ||||||||||||||
Materials and supplies, at average cost | ||||||||||||||
Prepayments and other | ||||||||||||||
Regulatory assets | ||||||||||||||
Total current assets | ||||||||||||||
Other long-term assets | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Regulatory assets | ||||||||||||||
Other | ||||||||||||||
Total other long-term assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
(dollars in thousands, except par value) | March 31, 2023 | December 31, 2022 | ||||||||||||
Capitalization and liabilities | ||||||||||||||
Capitalization | ||||||||||||||
Common stock ($6 2/3 par value, authorized | $ | $ | ||||||||||||
Premium on capital stock | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive income, net of taxes-retirement benefit plans | ||||||||||||||
Common stock equity | ||||||||||||||
Cumulative preferred stock — not subject to mandatory redemption | ||||||||||||||
Long-term debt, net | ||||||||||||||
Total capitalization | ||||||||||||||
Commitments and contingencies (Note 3) | ||||||||||||||
Current liabilities | ||||||||||||||
Current portion of operating lease liabilities | ||||||||||||||
Current portion of long-term debt, net | ||||||||||||||
Short-term borrowings from non-affiliates | ||||||||||||||
Accounts payable | ||||||||||||||
Interest and preferred dividends payable | ||||||||||||||
Taxes accrued, including revenue taxes | ||||||||||||||
Regulatory liabilities | ||||||||||||||
Other | ||||||||||||||
Total current liabilities | ||||||||||||||
Deferred credits and other liabilities | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Finance lease liabilities | ||||||||||||||
Deferred income taxes | ||||||||||||||
Regulatory liabilities | ||||||||||||||
Unamortized tax credits | ||||||||||||||
Defined benefit pension and other postretirement benefit plans liability | ||||||||||||||
Other | ||||||||||||||
Total deferred credits and other liabilities | ||||||||||||||
Total capitalization and liabilities | $ | $ |
Common stock | Premium on capital | Retained | Accumulated other comprehensive | |||||||||||||||||||||||||||||||||||
(in thousands) | Shares | Amount | stock | earnings | income (loss) | Total | ||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Net income for common stock | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Common stock dividends | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net income for common stock | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of taxes | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock dividends | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Three months ended March 31 | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||
Depreciation of property, plant and equipment | ||||||||||||||
Other amortization | ||||||||||||||
Deferred income taxes | ( | ( | ||||||||||||
State refundable credit | ( | ( | ||||||||||||
Bad debt expense | ||||||||||||||
Allowance for equity funds used during construction | ( | ( | ||||||||||||
Other | ( | |||||||||||||
Changes in assets and liabilities | ||||||||||||||
Decrease in accounts receivable | ||||||||||||||
Decrease (increase) in accrued unbilled revenues | ( | |||||||||||||
Decrease (increase) in fuel oil stock | ( | |||||||||||||
Increase in materials and supplies | ( | ( | ||||||||||||
Increase in regulatory assets | ( | ( | ||||||||||||
Increase in regulatory liabilities | ||||||||||||||
Increase in accounts payable | ||||||||||||||
Change in prepaid and accrued income taxes, tax credits and revenue taxes | ( | ( | ||||||||||||
Decrease in defined benefit pension and other postretirement benefit plans liability | ( | ( | ||||||||||||
Change in other assets and liabilities | ( | ( | ||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities | ||||||||||||||
Capital expenditures | ( | ( | ||||||||||||
Other | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Common stock dividends | ( | ( | ||||||||||||
Preferred stock dividends of Hawaiian Electric and subsidiaries | ( | ( | ||||||||||||
Proceeds from issuance of long-term debt | ||||||||||||||
Net increase (decrease) in short-term borrowings from non-affiliates and affiliates with original maturities of three months or less | ( | |||||||||||||
Payments of obligations under finance leases | ( | |||||||||||||
Other | ( | |||||||||||||
Net cash provided by financing activities | ( | |||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash, end of period | ||||||||||||||
Less: Restricted cash | ( | |||||||||||||
Cash and cash equivalents, end of period | $ | $ |
(in thousands) | Electric utility | Bank | Other | Total | ||||||||||||||||||||||
Three months ended March 31, 2023 | ||||||||||||||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | ( | $ | |||||||||||||||||||||
Income taxes (benefit) | ( | |||||||||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||||||||
Preferred stock dividends of subsidiaries | ( | |||||||||||||||||||||||||
Net income (loss) for common stock | $ | $ | $ | ( | $ | |||||||||||||||||||||
Total assets (at March 31, 2023) | $ | $ | $ | $ | ||||||||||||||||||||||
Three months ended March 31, 2022 | ||||||||||||||||||||||||||
Revenues from external customers and other sources | $ | $ | $ | $ | ||||||||||||||||||||||
Intersegment revenues (eliminations) | ( | |||||||||||||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | ( | $ | |||||||||||||||||||||
Income taxes (benefit) | ( | |||||||||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||||||||
Preferred stock dividends of subsidiaries | ( | |||||||||||||||||||||||||
Net income (loss) for common stock | $ | $ | $ | ( | $ | |||||||||||||||||||||
Total assets (at December 31, 2022) | $ | $ | $ | $ |
Three months ended March 31 | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Kalaeloa | $ | $ | ||||||||||||
AES Hawaii 1 | ||||||||||||||
HPOWER | ||||||||||||||
Hamakua Energy | ||||||||||||||
Puna Geothermal Venture | ||||||||||||||
Wind IPPs | ||||||||||||||
Solar IPPs | ||||||||||||||
Other IPPs 2 | ||||||||||||||
Total IPPs | $ | $ |
(in millions) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Total | ||||||||||||||||||||||
Incremental Performance Incentive Mechanisms (net) | ( | ( | ||||||||||||||||||||||||
Incremental EPRM/MPIR Revenue Adjustment | ||||||||||||||||||||||||||
Other | $ | |||||||||||||||||||||||||
Net incremental amount to be collected under the RBA rate tariffs | $ | $ | $ | $ | ||||||||||||||||||||||
(in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
Revenues | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||||||||||
Fuel oil | ||||||||||||||||||||||||||||||||||||||
Purchased power | ||||||||||||||||||||||||||||||||||||||
Other operation and maintenance | ||||||||||||||||||||||||||||||||||||||
Depreciation | ||||||||||||||||||||||||||||||||||||||
Taxes, other than income taxes | ||||||||||||||||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||||||||||||||
Operating income | ( | |||||||||||||||||||||||||||||||||||||
Allowance for equity funds used during construction | ||||||||||||||||||||||||||||||||||||||
Equity in earnings of subsidiaries | ( | |||||||||||||||||||||||||||||||||||||
Retirement defined benefits credit (expense)—other than service costs | ( | |||||||||||||||||||||||||||||||||||||
Interest expense and other charges, net | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Allowance for borrowed funds used during construction | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | ( | |||||||||||||||||||||||||||||||||||||
Income taxes | ||||||||||||||||||||||||||||||||||||||
Net income | ( | |||||||||||||||||||||||||||||||||||||
Preferred stock dividends of subsidiaries | ||||||||||||||||||||||||||||||||||||||
Net income attributable to Hawaiian Electric | ( | |||||||||||||||||||||||||||||||||||||
Preferred stock dividends of Hawaiian Electric | ||||||||||||||||||||||||||||||||||||||
Net income for common stock | $ | ( | $ |
(in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
Net income for common stock | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes: | ||||||||||||||||||||||||||||||||||||||
Retirement benefit plans: | ||||||||||||||||||||||||||||||||||||||
Adjustment for amortization of prior service credit and net gains recognized during the period in net periodic benefit cost, net of taxes | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Comprehensive income attributable to common shareholder | $ | ( | $ |
(in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
Revenues | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||||||||||
Fuel oil | ||||||||||||||||||||||||||||||||||||||
Purchased power | ||||||||||||||||||||||||||||||||||||||
Other operation and maintenance | ||||||||||||||||||||||||||||||||||||||
Depreciation | ||||||||||||||||||||||||||||||||||||||
Taxes, other than income taxes | ||||||||||||||||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||||||||||||||
Operating income | ( | |||||||||||||||||||||||||||||||||||||
Allowance for equity funds used during construction | ||||||||||||||||||||||||||||||||||||||
Equity in earnings of subsidiaries | ( | |||||||||||||||||||||||||||||||||||||
Retirement defined benefits credit (expense)—other than service costs | ( | |||||||||||||||||||||||||||||||||||||
Interest expense and other charges, net | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Allowance for borrowed funds used during construction | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | ( | |||||||||||||||||||||||||||||||||||||
Income taxes | ||||||||||||||||||||||||||||||||||||||
Net income | ( | |||||||||||||||||||||||||||||||||||||
Preferred stock dividends of subsidiaries | ||||||||||||||||||||||||||||||||||||||
Net income attributable to Hawaiian Electric | ( | |||||||||||||||||||||||||||||||||||||
Preferred stock dividends of Hawaiian Electric | ||||||||||||||||||||||||||||||||||||||
Net income for common stock | $ | ( | $ |
(in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
Net income for common stock | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Other comprehensive income, net of taxes: | ||||||||||||||||||||||||||||||||||||||
Retirement benefit plans: | ||||||||||||||||||||||||||||||||||||||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of taxes | ( | |||||||||||||||||||||||||||||||||||||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of taxes | ||||||||||||||||||||||||||||||||||||||
Comprehensive income attributable to common shareholder | $ | ( | $ |
(in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsi- diaries | Consoli- dating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||
Property, plant and equipment | ||||||||||||||||||||||||||||||||||||||
Utility property, plant and equipment | ||||||||||||||||||||||||||||||||||||||
Land | $ | $ | ||||||||||||||||||||||||||||||||||||
Plant and equipment | ||||||||||||||||||||||||||||||||||||||
Right-of-use assets - finance lease | ||||||||||||||||||||||||||||||||||||||
Less accumulated depreciation | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Construction in progress | ||||||||||||||||||||||||||||||||||||||
Utility property, plant and equipment, net | ||||||||||||||||||||||||||||||||||||||
Nonutility property, plant and equipment, less accumulated depreciation | ||||||||||||||||||||||||||||||||||||||
Total property, plant and equipment, net | ||||||||||||||||||||||||||||||||||||||
Investment in wholly owned subsidiaries, at equity | ( | |||||||||||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||||||||||||
Customer accounts receivable, net | ||||||||||||||||||||||||||||||||||||||
Accrued unbilled revenues, net | ||||||||||||||||||||||||||||||||||||||
Other accounts receivable, net | ( | |||||||||||||||||||||||||||||||||||||
Fuel oil stock, at average cost | ||||||||||||||||||||||||||||||||||||||
Materials and supplies, at average cost | ||||||||||||||||||||||||||||||||||||||
Prepayments and other | ||||||||||||||||||||||||||||||||||||||
Regulatory assets | ||||||||||||||||||||||||||||||||||||||
Total current assets | ( | |||||||||||||||||||||||||||||||||||||
Other long-term assets | ||||||||||||||||||||||||||||||||||||||
Operating lease right-of-use assets | ||||||||||||||||||||||||||||||||||||||
Regulatory assets | ||||||||||||||||||||||||||||||||||||||
Other | ( | |||||||||||||||||||||||||||||||||||||
Total other long-term assets | ( | |||||||||||||||||||||||||||||||||||||
Total assets | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Capitalization and liabilities | ||||||||||||||||||||||||||||||||||||||
Capitalization | ||||||||||||||||||||||||||||||||||||||
Common stock equity | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Cumulative preferred stock—not subject to mandatory redemption | ||||||||||||||||||||||||||||||||||||||
Long-term debt, net | ||||||||||||||||||||||||||||||||||||||
Total capitalization | ( | |||||||||||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||||||||||||
Current portion of operating lease liabilities | ||||||||||||||||||||||||||||||||||||||
Current portion of long-term debt | ||||||||||||||||||||||||||||||||||||||
Accounts payable | ||||||||||||||||||||||||||||||||||||||
Interest and preferred dividends payable | ||||||||||||||||||||||||||||||||||||||
Taxes accrued, including revenue taxes | ||||||||||||||||||||||||||||||||||||||
Regulatory liabilities | ||||||||||||||||||||||||||||||||||||||
Other | ( | |||||||||||||||||||||||||||||||||||||
Total current liabilities | ( | |||||||||||||||||||||||||||||||||||||
Deferred credits and other liabilities | ||||||||||||||||||||||||||||||||||||||
Operating lease liabilities | ||||||||||||||||||||||||||||||||||||||
Finance lease liabilities | ||||||||||||||||||||||||||||||||||||||
Deferred income taxes | ||||||||||||||||||||||||||||||||||||||
Regulatory liabilities | ||||||||||||||||||||||||||||||||||||||
Unamortized tax credits | ||||||||||||||||||||||||||||||||||||||
Defined benefit pension and other postretirement benefit plans liability | ( | |||||||||||||||||||||||||||||||||||||
Other | ( | |||||||||||||||||||||||||||||||||||||
Total deferred credits and other liabilities | ( | |||||||||||||||||||||||||||||||||||||
Total capitalization and liabilities | $ | ( | $ |
(in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsi-diaries | Consoli- dating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||
Property, plant and equipment | ||||||||||||||||||||||||||||||||||||||
Utility property, plant and equipment | ||||||||||||||||||||||||||||||||||||||
Land | $ | $ | ||||||||||||||||||||||||||||||||||||
Plant and equipment | ||||||||||||||||||||||||||||||||||||||
Finance lease right-of-use assets | ||||||||||||||||||||||||||||||||||||||
Less accumulated depreciation | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Construction in progress | ||||||||||||||||||||||||||||||||||||||
Utility property, plant and equipment, net | ||||||||||||||||||||||||||||||||||||||
Nonutility property, plant and equipment, less accumulated depreciation | ||||||||||||||||||||||||||||||||||||||
Total property, plant and equipment, net | ||||||||||||||||||||||||||||||||||||||
Investment in wholly owned subsidiaries, at equity | ( | |||||||||||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||||||||||||
Advances to affiliates | ( | |||||||||||||||||||||||||||||||||||||
Customer accounts receivable, net | ||||||||||||||||||||||||||||||||||||||
Accrued unbilled revenues, net | ||||||||||||||||||||||||||||||||||||||
Other accounts receivable, net | ( | |||||||||||||||||||||||||||||||||||||
Fuel oil stock, at average cost | ||||||||||||||||||||||||||||||||||||||
Materials and supplies, at average cost | ||||||||||||||||||||||||||||||||||||||
Prepayments and other | ( | |||||||||||||||||||||||||||||||||||||
Regulatory assets | ||||||||||||||||||||||||||||||||||||||
Total current assets | ( | |||||||||||||||||||||||||||||||||||||
Other long-term assets | ||||||||||||||||||||||||||||||||||||||
Operating lease right-of-use assets | ||||||||||||||||||||||||||||||||||||||
Regulatory assets | ||||||||||||||||||||||||||||||||||||||
Other | ( | |||||||||||||||||||||||||||||||||||||
Total other long-term assets | ( | |||||||||||||||||||||||||||||||||||||
Total assets | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Capitalization and liabilities | ||||||||||||||||||||||||||||||||||||||
Capitalization | ||||||||||||||||||||||||||||||||||||||
Common stock equity | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Cumulative preferred stock—not subject to mandatory redemption | ||||||||||||||||||||||||||||||||||||||
Long-term debt, net | ||||||||||||||||||||||||||||||||||||||
Total capitalization | ( | |||||||||||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||||||||||||
Current portion of operating lease liabilities | ||||||||||||||||||||||||||||||||||||||
Current portion of long-term debt | ||||||||||||||||||||||||||||||||||||||
Short-term borrowings-affiliate | ( | |||||||||||||||||||||||||||||||||||||
Accounts payable | ||||||||||||||||||||||||||||||||||||||
Interest and preferred dividends payable | ( | |||||||||||||||||||||||||||||||||||||
Taxes accrued, including revenue taxes | ( | |||||||||||||||||||||||||||||||||||||
Regulatory liabilities | ||||||||||||||||||||||||||||||||||||||
Other | ( | |||||||||||||||||||||||||||||||||||||
Total current liabilities | ( | |||||||||||||||||||||||||||||||||||||
Deferred credits and other liabilities | ||||||||||||||||||||||||||||||||||||||
Operating lease liabilities | ||||||||||||||||||||||||||||||||||||||
Finance lease liabilities | ||||||||||||||||||||||||||||||||||||||
Deferred income taxes | ||||||||||||||||||||||||||||||||||||||
Regulatory liabilities | ||||||||||||||||||||||||||||||||||||||
Unamortized tax credits | ||||||||||||||||||||||||||||||||||||||
Defined benefit pension and other postretirement benefit plans liability | ( | |||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Total deferred credits and other liabilities | ( | |||||||||||||||||||||||||||||||||||||
Total capitalization and liabilities | $ | ( | $ |
(in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net income for common stock | — | ( | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||
Common stock dividends | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | ( | $ |
(in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net income for common stock | — | ( | ||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of taxes | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock dividends | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | ( | $ |
(in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||||||||||||||||
Capital expenditures | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Advances to affiliates | ( | |||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Net cash used in investing activities | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||||||||||||||||
Common stock dividends | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Preferred stock dividends of Hawaiian Electric and subsidiaries | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Proceeds from issuance of long-term debt | ||||||||||||||||||||||||||||||||||||||
Net decrease in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less | ( | ( | ||||||||||||||||||||||||||||||||||||
Payments of obligations under finance leases | ( | ( | ||||||||||||||||||||||||||||||||||||
Other | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Net cash provided by (used in) financing activities | ( | |||||||||||||||||||||||||||||||||||||
Net increase in cash and cash equivalents | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of period | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | $ |
(in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||||||||||||||||
Capital expenditures | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Advances to affiliates | ( | ( | ||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Net cash used in investing activities | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||||||||||||||||
Common stock dividends | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Preferred stock dividends of Hawaiian Electric and subsidiaries | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less | ( | |||||||||||||||||||||||||||||||||||||
Net cash used in financing activities | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash, end of period | ||||||||||||||||||||||||||||||||||||||
Less: Restricted cash | ( | ( | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | $ |
Three months ended March 31 | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Interest and dividend income | ||||||||||||||
Interest and fees on loans | $ | $ | ||||||||||||
Interest and dividends on investment securities | ||||||||||||||
Total interest and dividend income | ||||||||||||||
Interest expense | ||||||||||||||
Interest on deposit liabilities | ||||||||||||||
Interest on other borrowings | ||||||||||||||
Total interest expense | ||||||||||||||
Net interest income | ||||||||||||||
Provision for credit losses | ( | |||||||||||||
Net interest income after provision for credit losses | ||||||||||||||
Noninterest income | ||||||||||||||
Fees from other financial services | ||||||||||||||
Fee income on deposit liabilities | ||||||||||||||
Fee income on other financial products | ||||||||||||||
Bank-owned life insurance | ||||||||||||||
Mortgage banking income | ||||||||||||||
Gain on sale of real estate | ||||||||||||||
Other income, net | ||||||||||||||
Total noninterest income | ||||||||||||||
Noninterest expense | ||||||||||||||
Compensation and employee benefits | ||||||||||||||
Occupancy | ||||||||||||||
Data processing | ||||||||||||||
Services | ||||||||||||||
Equipment | ||||||||||||||
Office supplies, printing and postage | ||||||||||||||
Marketing | ||||||||||||||
Other expense | ||||||||||||||
Total noninterest expense | ||||||||||||||
Income before income taxes | ||||||||||||||
Income taxes | ||||||||||||||
Net income | ||||||||||||||
Other comprehensive income (loss), net of taxes | ( | |||||||||||||
Comprehensive income (loss) | $ | $ | ( |
Three months ended March 31 | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Interest and dividend income | $ | $ | ||||||||||||
Noninterest income | ||||||||||||||
Less: Gain on sale of real estate | ||||||||||||||
*Revenues-Bank | ||||||||||||||
Total interest expense | ||||||||||||||
Provision for credit losses | ( | |||||||||||||
Noninterest expense | ||||||||||||||
Less: Gain on sale of real estate | ||||||||||||||
Less: Retirement defined benefits credit—other than service costs | ( | ( | ||||||||||||
*Expenses-Bank | ||||||||||||||
*Operating income-Bank | ||||||||||||||
Add back: Retirement defined benefits credit—other than service costs | ( | ( | ||||||||||||
Income before income taxes | $ | $ |
(in thousands) | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash and due from banks | $ | $ | ||||||||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||
Available-for-sale, at fair value | ||||||||||||||||||||||||||
Held-to-maturity, at amortized cost (fair value of $ | ||||||||||||||||||||||||||
Stock in Federal Home Loan Bank, at cost | ||||||||||||||||||||||||||
Loans held for investment | ||||||||||||||||||||||||||
Allowance for credit losses | ( | ( | ||||||||||||||||||||||||
Net loans | ||||||||||||||||||||||||||
Loans held for sale, at lower of cost or fair value | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||||
Total assets | $ | $ | ||||||||||||||||||||||||
Liabilities and shareholder’s equity | ||||||||||||||||||||||||||
Deposit liabilities—noninterest-bearing | $ | $ | ||||||||||||||||||||||||
Deposit liabilities—interest-bearing | ||||||||||||||||||||||||||
Other borrowings | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total liabilities | ||||||||||||||||||||||||||
Common stock | ||||||||||||||||||||||||||
Additional paid-in capital | ||||||||||||||||||||||||||
Retained earnings | ||||||||||||||||||||||||||
Accumulated other comprehensive loss, net of tax benefits | ||||||||||||||||||||||||||
Net unrealized losses on securities | $ | ( | $ | ( | ||||||||||||||||||||||
Retirement benefit plans | ( | ( | ( | ( | ||||||||||||||||||||||
Total shareholder’s equity | ||||||||||||||||||||||||||
Total liabilities and shareholder’s equity | $ | $ | ||||||||||||||||||||||||
Other assets | ||||||||||||||||||||||||||
Bank-owned life insurance | $ | $ | ||||||||||||||||||||||||
Premises and equipment, net | ||||||||||||||||||||||||||
Accrued interest receivable | ||||||||||||||||||||||||||
Mortgage-servicing rights | ||||||||||||||||||||||||||
Low-income housing investments | ||||||||||||||||||||||||||
Real estate held for sale | ||||||||||||||||||||||||||
Deferred tax asset | ||||||||||||||||||||||||||
Real estate acquired in settlement of loans, net | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||||
Other liabilities | ||||||||||||||||||||||||||
Accrued expenses | $ | $ | ||||||||||||||||||||||||
Federal and state income taxes payable | ||||||||||||||||||||||||||
Cashier’s checks | ||||||||||||||||||||||||||
Advance payments by borrowers | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
$ | $ |
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | Gross unrealized losses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Number of issues | Fair value | Amount | Number of issues | Fair value | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury and federal agency obligations | $ | $ | $ | ( | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities* | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage revenue bonds | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Held-to-maturity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury and federal agency obligations | $ | $ | $ | ( | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities* | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury and federal agency obligations | $ | $ | $ | ( | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities* | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage revenue bonds | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Held-to-maturity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury and federal agency obligations | $ | $ | $ | ( | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities* | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | $ | $ | ( | $ | $ | ( |
March 31, 2023 | Amortized cost | Fair value | ||||||||||||
(in thousands) | ||||||||||||||
Available-for-sale | ||||||||||||||
Due in one year or less | $ | $ | ||||||||||||
Due after one year through five years | ||||||||||||||
Due after five years through ten years | ||||||||||||||
Due after ten years | ||||||||||||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies | ||||||||||||||
Total available-for-sale securities | $ | $ | ||||||||||||
Held-to-maturity | ||||||||||||||
Due in one year or less | $ | $ | ||||||||||||
Due after one year through five years | ||||||||||||||
Due after five years through ten years | ||||||||||||||
Due after ten years | ||||||||||||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies | ||||||||||||||
Total held-to-maturity securities | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
(in thousands) | |||||||||||
Real estate: | |||||||||||
Residential 1-4 family | $ | $ | |||||||||
Commercial real estate | |||||||||||
Home equity line of credit | |||||||||||
Residential land | |||||||||||
Commercial construction | |||||||||||
Residential construction | |||||||||||
Total real estate | |||||||||||
Commercial | |||||||||||
Consumer | |||||||||||
Total loans | |||||||||||
Less: Deferred fees and discounts | ( | ( | |||||||||
Allowance for credit losses | ( | ( | |||||||||
Total loans, net | $ | $ |
(in thousands) | Residential 1-4 family | Commercial real estate | Home equity line of credit | Residential land | Commercial construction | Residential construction | Commercial loans | Consumer loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | $ |
(in thousands) | Home equity line of credit | Commercial construction | Commercial loans | Total | ||||||||||||||||||||||
Three months ended March 31, 2023 | ||||||||||||||||||||||||||
Allowance for loan commitments: | ||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Provision | ||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | ||||||||||||||||||||||
Three months ended March 31, 2022 | ||||||||||||||||||||||||||
Allowance for loan commitments: | ||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Provision | ( | |||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ |
Term Loans by Origination Year | Revolving Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving | Converted to term loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than 89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current YTD period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity line of credit | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than 89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current YTD period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential land | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than 89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current YTD period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than 89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current YTD period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than 89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current YTD period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loans by Origination Year | Revolving Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving | Converted to term loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Current YTD period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current YTD period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current YTD period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Term Loans by Origination Year | Revolving Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving | Converted to term loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than 89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity line of credit | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than 89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential land | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than 89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than 89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than 89 days past due | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | $ | $ |
(in thousands) | 30-59 days past due | 60-89 days past due | Greater than 90 days | Total past due | Current | Total financing receivables | Amortized cost> 90 days and accruing | |||||||||||||||||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||
Home equity line of credit | ||||||||||||||||||||||||||||||||||||||||||||
Residential land | ||||||||||||||||||||||||||||||||||||||||||||
Commercial construction | ||||||||||||||||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||
Home equity line of credit | ||||||||||||||||||||||||||||||||||||||||||||
Residential land | ||||||||||||||||||||||||||||||||||||||||||||
Commercial construction | ||||||||||||||||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ |
(in thousands) | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||
With a Related ACL | Without a Related ACL | Total | With a Related ACL | Without a Related ACL | Total | |||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||
Home equity line of credit | ||||||||||||||||||||||||||||||||||||||
Residential land | ||||||||||||||||||||||||||||||||||||||
Commercial construction | ||||||||||||||||||||||||||||||||||||||
Residential construction | ||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
(in thousands) | December 31, 2022 | ||||||||||
Real estate: | |||||||||||
Residential 1-4 family | $ | ||||||||||
Commercial real estate | |||||||||||
Home equity line of credit | |||||||||||
Residential land | |||||||||||
Commercial construction | |||||||||||
Residential construction | |||||||||||
Commercial | |||||||||||
Consumer | |||||||||||
Total troubled debt restructured loans accruing interest | $ |
Amortized cost | ||||||||||||||||||||
(in thousands) | March 31, 2023 | December 31, 2022 | Collateral type | |||||||||||||||||
Real estate: | ||||||||||||||||||||
Residential 1-4 family | $ | $ | Residential real estate property | |||||||||||||||||
Home equity line of credit | Residential real estate property | |||||||||||||||||||
Total | $ | $ |
(in thousands) | Gross carrying amount | Accumulated amortization | Valuation allowance | Net carrying amount | ||||||||||||||||||||||
March 31, 2023 | $ | $ | ( | $ | $ | |||||||||||||||||||||
December 31, 2022 | ( |
Three months ended March 31 | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Mortgage servicing rights | ||||||||||||||
Beginning balance | $ | $ | ||||||||||||
Amount capitalized | ||||||||||||||
Amortization | ( | ( | ||||||||||||
Other-than-temporary impairment | ||||||||||||||
Carrying amount before valuation allowance | ||||||||||||||
Valuation allowance for mortgage servicing rights | ||||||||||||||
Beginning balance | ||||||||||||||
Provision | ||||||||||||||
Other-than-temporary impairment | ||||||||||||||
Ending balance | ||||||||||||||
Net carrying value of mortgage servicing rights | $ | $ |
(dollars in thousands) | March 31, 2023 | December 31, 2022 | ||||||||||||
Unpaid principal balance | $ | $ | ||||||||||||
Weighted average note rate | % | % | ||||||||||||
Weighted average discount rate | % | % | ||||||||||||
Weighted average prepayment speed | % | % |
(dollars in thousands) | March 31, 2023 | December 31, 2022 | ||||||||||||
Prepayment rate: | ||||||||||||||
25 basis points adverse rate change | $ | ( | $ | ( | ||||||||||
50 basis points adverse rate change | ( | ( | ||||||||||||
Discount rate: | ||||||||||||||
25 basis points adverse rate change | ( | ( | ||||||||||||
50 basis points adverse rate change | ( | ( |
(in millions) | Gross amount of recognized liabilities | Gross amount offset in the Balance Sheets | Net amount of liabilities presented in the Balance Sheets | |||||||||||||||||
Repurchase agreements | ||||||||||||||||||||
March 31, 2023 | $ | $ | $ | |||||||||||||||||
December 31, 2022 |
Gross amount not offset in the Balance Sheets | ||||||||||||||||||||
(in millions) | Net amount of liabilities presented in the Balance Sheets | Financial instruments | Cash collateral pledged | |||||||||||||||||
Commercial account holders | ||||||||||||||||||||
March 31, 2023 | $ | $ | $ | |||||||||||||||||
December 31, 2022 | ||||||||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
(in thousands) | Notional amount | Fair value | Notional amount | Fair value | ||||||||||||||||||||||
Interest rate lock commitments | $ | $ | $ | $ | ||||||||||||||||||||||
Forward commitments |
Derivative Financial Instruments Not Designated as Hedging Instruments 1 | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||
(in thousands) | Asset derivatives | Liability derivatives | Asset derivatives | Liability derivatives | ||||||||||||||||||||||
Interest rate lock commitments | $ | $ | $ | $ | ||||||||||||||||||||||
Forward commitments | ||||||||||||||||||||||||||
$ | $ | $ | $ |
Derivative Financial Instruments Not Designated as Hedging Instruments | Location of net gains (losses) recognized in the Statements of Income | Three months ended March 31 | ||||||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||||||||
Interest rate lock commitments | Mortgage banking income | $ | $ | ( | ||||||||||||||||
Forward commitments | ( | |||||||||||||||||||
$ | $ | ( |
HEI Series 2023A | HEI Series 2023B | |||||||||||||
Aggregate principal amount | $ | $ | ||||||||||||
Fixed coupon interest rate | ||||||||||||||
Maturity date | 6/15/2028 | 6/15/2033 | ||||||||||||
Series 2023A | Series 2023B | Series 2023C | |||||||||
Aggregate principal amount | $ | $ | $ | ||||||||
Fixed coupon interest rate | |||||||||||
Hawaiian Electric | |||||||||||
Hawaii Electric Light | — | — | |||||||||
Maui Electric | — | — | |||||||||
Maturity date | |||||||||||
Hawaiian Electric | 2/9/2030 | 2/9/2033 | 2/9/2053 | ||||||||
Hawaii Electric Light | 2/9/2033 | — | — | ||||||||
Maui Electric | 2/9/2033 | — | — | ||||||||
Principal amount by company: | |||||||||||
Hawaiian Electric | $ | $ | $ | ||||||||
Hawaii Electric Light | $ | — | — | ||||||||
Maui Electric | $ | — | — |
HEI Consolidated | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||
(in thousands) | Net unrealized gains (losses) on securities | Unrealized gains (losses) on derivatives | Retirement benefit plans | AOCI | AOCI-Retirement benefit plans | ||||||||||||||||||||||||
Balance, December 31, 2022 | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||
Current period other comprehensive income (loss) | ( | ||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||
Balance, December 31, 2021 | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Current period other comprehensive income (loss) | ( | ( | |||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
Amount reclassified from AOCI | Affected line item in the Statements of Income / Balance Sheets | |||||||||||||||||||
Three months ended March 31 | ||||||||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||||||||
HEI consolidated | ||||||||||||||||||||
Net unrealized gains (losses) on available-for sale investment securities - amortization of unrealized holding losses on held-to-maturity securities | $ | $ | Bank revenues | |||||||||||||||||
Net realized losses (gains) on derivatives qualifying as cash flow hedges | ( | Interest expense | ||||||||||||||||||
Retirement benefit plans: | ||||||||||||||||||||
Amortization of prior service credit and net losses (gains) recognized during the period in net periodic benefit cost | ( | See Note 8 for additional details | ||||||||||||||||||
Impact of D&Os of the PUC included in regulatory assets | ( | See Note 8 for additional details | ||||||||||||||||||
Total reclassifications | $ | $ | ||||||||||||||||||
Hawaiian Electric consolidated | ||||||||||||||||||||
Retirement benefit plans: | ||||||||||||||||||||
Amortization of prior service credit and net losses (gains) recognized during the period in net periodic benefit cost | $ | ( | $ | See Note 8 for additional details | ||||||||||||||||
Impact of D&Os of the PUC included in regulatory assets | ( | See Note 8 for additional details | ||||||||||||||||||
Total reclassifications | $ | ( | $ |
Three months ended March 31, 2023 | ||||||||||||||||||||||||||
(in thousands) | Electric utility | Bank | Other | Total | ||||||||||||||||||||||
Revenues from contracts with customers | ||||||||||||||||||||||||||
Electric energy sales - residential | $ | $ | $ | $ | ||||||||||||||||||||||
Electric energy sales - commercial | ||||||||||||||||||||||||||
Electric energy sales - large light and power | ||||||||||||||||||||||||||
Electric energy sales - other | ||||||||||||||||||||||||||
Bank fees | ||||||||||||||||||||||||||
Other sales | ||||||||||||||||||||||||||
Total revenues from contracts with customers | ||||||||||||||||||||||||||
Revenues from other sources | ||||||||||||||||||||||||||
Regulatory revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Bank interest and dividend income | ||||||||||||||||||||||||||
Other bank noninterest income | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total revenues from other sources | ||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Timing of revenue recognition | ||||||||||||||||||||||||||
Services/goods transferred at a point in time | $ | $ | $ | $ | ||||||||||||||||||||||
Services/goods transferred over time | ||||||||||||||||||||||||||
Total revenues from contracts with customers | $ | $ | $ | $ |
Three months ended March 31, 2022 | ||||||||||||||||||||||||||
(in thousands) | Electric utility | Bank | Other | Total | ||||||||||||||||||||||
Revenues from contracts with customers | ||||||||||||||||||||||||||
Electric energy sales - residential | $ | $ | $ | $ | ||||||||||||||||||||||
Electric energy sales - commercial | ||||||||||||||||||||||||||
Electric energy sales - large light and power | ||||||||||||||||||||||||||
Electric energy sales - other | ||||||||||||||||||||||||||
Bank fees | ||||||||||||||||||||||||||
Other sales | ||||||||||||||||||||||||||
Total revenues from contracts with customers | ||||||||||||||||||||||||||
Revenues from other sources | ||||||||||||||||||||||||||
Regulatory revenue | ||||||||||||||||||||||||||
Bank interest and dividend income | ||||||||||||||||||||||||||
Other bank noninterest income | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total revenues from other sources | ||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Timing of revenue recognition | ||||||||||||||||||||||||||
Services/goods transferred at a point in time | $ | $ | $ | $ | ||||||||||||||||||||||
Services/goods transferred over time | ||||||||||||||||||||||||||
Total revenues from contracts with customers | $ | $ | $ | $ |
Three months ended March 31 | ||||||||||||||||||||||||||
Pension benefits | Other benefits | |||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
HEI consolidated | ||||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | ||||||||||||||||||||||
Interest cost | ||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||||||||
Amortization of net prior period gain | ( | ( | ||||||||||||||||||||||||
Amortization of net actuarial (gain)/losses | ( | ( | ||||||||||||||||||||||||
Net periodic pension/benefit cost (return) | ( | ( | ||||||||||||||||||||||||
Impact of PUC D&Os | ||||||||||||||||||||||||||
Net periodic pension/benefit cost (return) (adjusted for impact of PUC D&Os) | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
Hawaiian Electric consolidated | ||||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | ||||||||||||||||||||||
Interest cost | ||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||||||||
Amortization of net prior period gain | ( | ( | ||||||||||||||||||||||||
Amortization of net actuarial (gain)/losses | ( | |||||||||||||||||||||||||
Net periodic pension/benefit cost (return) | ( | ( | ||||||||||||||||||||||||
Impact of PUC D&Os | ||||||||||||||||||||||||||
Net periodic pension/benefit cost (return) (adjusted for impact of PUC D&Os) | $ | $ | $ | ( | $ | ( |
Three months ended March 31 | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
HEI consolidated | ||||||||||||||
Share-based compensation expense 1 | $ | $ | ||||||||||||
Income tax benefit | ||||||||||||||
Hawaiian Electric consolidated | ||||||||||||||
Share-based compensation expense 1 | ||||||||||||||
Income tax benefit |
Three months ended March 31 | ||||||||||||||
(dollars in millions) | 2023 | 2022 | ||||||||||||
Shares granted | ||||||||||||||
Fair value | $ | $ | ||||||||||||
Income tax benefit |
Three months ended March 31 | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Shares | (1) | Shares | (1) | |||||||||||||||||||||||
Outstanding, beginning of period | $ | $ | ||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||
Vested | ( | ( | ||||||||||||||||||||||||
Forfeited | ( | ( | ||||||||||||||||||||||||
Outstanding, end of period | $ | $ | ||||||||||||||||||||||||
Total weighted-average grant-date fair value of shares granted (in millions) | $ | $ |
Three months ended March 31 | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Shares | (1) | Shares | (1) | |||||||||||||||||||||||
Outstanding, beginning of period | $ | $ | ||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||
Vested (issued or unissued and cancelled) | ( | ( | ||||||||||||||||||||||||
Forfeited | ( | |||||||||||||||||||||||||
Outstanding, end of period | $ | $ | ||||||||||||||||||||||||
Total weighted-average grant-date fair value of shares granted (in millions) | $ | $ |
2023 | 2022 | |||||||||||||
Risk-free interest rate | % | % | ||||||||||||
Expected life in years | ||||||||||||||
Expected volatility | % | % | ||||||||||||
Range of expected volatility for Peer Group | ||||||||||||||
Grant date fair value (per share) | $ | $ |
Three months ended March 31 | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Shares | (1) | Shares | (1) | |||||||||||||||||||||||
Outstanding, beginning of period | $ | $ | ||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||
Vested | ( | ( | ||||||||||||||||||||||||
Forfeited | ( | |||||||||||||||||||||||||
Outstanding, end of period | $ | $ | ||||||||||||||||||||||||
Total weighted-average grant-date fair value of shares granted (at target performance levels) (in millions) | $ | $ |
Three months ended March 31 | 2023 | 2022 | ||||||||||||
(in millions) | ||||||||||||||
Supplemental disclosures of cash flow information | ||||||||||||||
HEI consolidated | ||||||||||||||
Interest paid to non-affiliates, net of amounts capitalized | $ | $ | ||||||||||||
Hawaiian Electric consolidated | ||||||||||||||
Interest paid to non-affiliates | ||||||||||||||
Income taxes paid (including refundable credits) | ||||||||||||||
Supplemental disclosures of noncash activities | ||||||||||||||
HEI consolidated | ||||||||||||||
Property, plant and equipment | ||||||||||||||
Unpaid invoices and accruals for capital expenditures, balance, end of period (investing) | ||||||||||||||
Increase related to an acquisition (investing) | ||||||||||||||
Right-of-use assets obtained in exchange for finance lease obligations (financing) | ||||||||||||||
Right-of-use assets obtained in exchange for operating lease obligations (investing) | ||||||||||||||
Common stock issued (gross) for director and executive/management compensation (financing)1 | ||||||||||||||
Obligations to fund low income housing investments (investing) | ||||||||||||||
Unsettled trades to purchase investment securities (investing) | ||||||||||||||
Other receivable related to pending sales proceeds from the sale of an equity-method investment (investing) | ||||||||||||||
Hawaiian Electric consolidated | ||||||||||||||
Electric utility property, plant and equipment | ||||||||||||||
Unpaid invoices and accruals for capital expenditures, balance, end of period (investing) | ||||||||||||||
Increase related to an acquisition (investing) | ||||||||||||||
Right-of-use assets obtained in exchange for finance lease obligations (financing) | ||||||||||||||
Right-of-use assets obtained in exchange for operating lease obligations (investing) |
Estimated fair value | ||||||||||||||||||||||||||||||||
(in thousands) | Carrying or notional amount | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |||||||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||||||||
HEI consolidated | ||||||||||||||||||||||||||||||||
Available-for-sale investment securities | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Held-to-maturity investment securities | ||||||||||||||||||||||||||||||||
Loans, net | ||||||||||||||||||||||||||||||||
Mortgage servicing rights | ||||||||||||||||||||||||||||||||
Derivative assets | ||||||||||||||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||||||
HEI consolidated | ||||||||||||||||||||||||||||||||
Deposit liabilities | ||||||||||||||||||||||||||||||||
Short-term borrowings—other than bank | ||||||||||||||||||||||||||||||||
Other bank borrowings | ||||||||||||||||||||||||||||||||
Long-term debt, net—other than bank | ||||||||||||||||||||||||||||||||
Derivative liabilities | ||||||||||||||||||||||||||||||||
Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
Long-term debt, net | ||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||||||||
HEI consolidated | ||||||||||||||||||||||||||||||||
Available-for-sale investment securities | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Held-to-maturity investment securities | ||||||||||||||||||||||||||||||||
Loans, net | ||||||||||||||||||||||||||||||||
Mortgage servicing rights | ||||||||||||||||||||||||||||||||
Derivative assets | ||||||||||||||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||||||
HEI consolidated | ||||||||||||||||||||||||||||||||
Deposit liabilities | ||||||||||||||||||||||||||||||||
Short-term borrowings—other than bank | ||||||||||||||||||||||||||||||||
Other bank borrowings | ||||||||||||||||||||||||||||||||
Long-term debt, net—other than bank | ||||||||||||||||||||||||||||||||
Derivative liabilities | ||||||||||||||||||||||||||||||||
Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
Short-term borrowings | ||||||||||||||||||||||||||||||||
Long-term debt, net | ||||||||||||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
Fair value measurements using | Fair value measurements using | |||||||||||||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||
Available-for-sale investment securities (bank segment) | ||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
U.S. Treasury and federal agency obligations | ||||||||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||||||||
Mortgage revenue bonds | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Derivative assets | ||||||||||||||||||||||||||||||||||||||
Interest rate lock commitments (bank segment)1 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Forward commitments (bank segment)1 | ||||||||||||||||||||||||||||||||||||||
Interest rate swap (Other segment)2 | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Derivative liabilities | ||||||||||||||||||||||||||||||||||||||
Forward commitments (bank segment)1 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Interest rate swap (Other segment)2 | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
Three months ended March 31 | ||||||||||||||
Mortgage revenue bonds | 2023 | 2022 | ||||||||||||
(in thousands) | ||||||||||||||
Beginning balance | $ | $ | ||||||||||||
Principal payments received | ( | ( | ||||||||||||
Purchases | ||||||||||||||
Unrealized gain (loss) included in other comprehensive income | ||||||||||||||
Ending balance | $ | $ |
Three months ended March 31 | % | |||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | change | Primary reason(s)* | ||||||||||||||||||||||
Revenues | $ | 928,237 | $ | 785,068 | 18 | Primarily increase for all segments. | ||||||||||||||||||||
Operating income | 93,518 | 99,276 | (6) | Lower operating income for bank segment and increase operating losses for “other” segment, partially offset by higher operating income for the electric utility segment. | ||||||||||||||||||||||
Net income for common stock | 54,721 | 69,167 | (21) | Lower net income at the bank segment and higher net loss for the “other” segment, partly offset by slightly higher net income for the electric utility segment. See below for effective tax rate explanation. | ||||||||||||||||||||||
Three months ended March 31 | ||||||||||||||||||||
(in thousands) | 2023 | 2022 | Primary reason(s) | |||||||||||||||||
Revenues | $ | 4,019 | $ | 1,161 | Increase in other sales at Pacific Current subsidiaries. | |||||||||||||||
Operating loss | (5,877) | (4,349) | The first three months of 2023 and 2022 include $1.1 million operating losses and $0.8 million of operating income, respectively, from Pacific Current1. The higher operating loss is primarily due to lower Pacific Current asset performance. Corporate expenses for the first three months of 2023 were $0.4 million lower than the same period in 2022, primarily due to lower general and administrative expenses. | |||||||||||||||||
Gain on sale of equity-method investment | — | 8,123 | Gain on sale of an equity-method investment at Pacific Current in first quarter of 2022. | |||||||||||||||||
Net loss | (10,850) | (1,112) | The net loss for the first three months of 2023 was higher than the net loss for the first three months of 2022 due to the first quarter of 2022 gain on sale of an equity-method investment by Pacific Current, higher interest expense primarily due to higher average borrowings and higher average rates and the same factors cited for the change in operating loss. |
(dollars in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||
Short-term borrowings—other than bank, net of discount | $ | 149 | 3 | % | $ | 173 | 3 | % | ||||||||||||||||||
Long-term debt, net—other than bank | 2,481 | 51 | 2,385 | 50 | ||||||||||||||||||||||
Preferred stock of subsidiaries | 34 | 1 | 34 | 1 | ||||||||||||||||||||||
Common stock equity | 2,238 | 45 | 2,202 | 46 | ||||||||||||||||||||||
$ | 4,902 | 100 | % | $ | 4,794 | 100 | % |
Average balance | Balance | |||||||||||||||||||
(in millions) | Three months ended March 31, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||||||||
Commercial paper | $ | 54 | $ | 49 | $ | 50 | ||||||||||||||
Line of credit draws on revolving credit facility | — | — | — | |||||||||||||||||
Three months ended March 31 | Increase | |||||||||||||||||||||||||
2023 | 2022 | (decrease) | (dollars in millions, except per barrel amounts) | |||||||||||||||||||||||
$ | 830 | $ | 709 | $ | 121 | Revenues. Net increase largely due to: | ||||||||||||||||||||
$ | 123 | higher fuel oil prices and higher kWh generated1 | ||||||||||||||||||||||||
10 | higher revenue from ARA adjustments | |||||||||||||||||||||||||
1 | higher Major Project Interim Recovery (MPIR) revenue | |||||||||||||||||||||||||
(12) | lower kWh purchased and lower purchased power adjustment clause (PPAC) revenues, offset by higher purchased power energy prices2 | |||||||||||||||||||||||||
334 | 221 | 113 | Fuel oil expense1. Net increase largely due to higher fuel oil prices, higher kWh generated, and worse heat rate resulting in higher penalties for fuel efficiency | |||||||||||||||||||||||
153 | 164 | (11) | Purchased power expense1, 2. Net decrease largely due to lower kWh purchased and lower AES charges due to its closure on September 1, 2022, partially offset in part by higher purchased power energy prices | |||||||||||||||||||||||
128 | 125 | 3 | Operation and maintenance expenses. Net increase largely due to: | |||||||||||||||||||||||
3 | increased storm costs due to inclement weather | |||||||||||||||||||||||||
3 | more generating facility maintenance work performed | |||||||||||||||||||||||||
(1) | lower transmission and distribution preventive and corrective maintenance expense | |||||||||||||||||||||||||
(1) | lower liability and legal reserve for pending claims | |||||||||||||||||||||||||
(2) | transition expense in 2022 related to ownership of and responsibility for the U.S. Army’s electrical distribution system on Oahu starting March, 1, 2022 | |||||||||||||||||||||||||
139 | 125 | 14 | Other expenses. Increase due to higher revenue taxes, coupled with higher depreciation expense due to increasing investments to integrate more renewable energy and improve customer reliability and system efficiency | |||||||||||||||||||||||
76 | 74 | 2 | Operating income. Increase largely due to higher ARA and MPIR revenue, offset in part by higher operation and maintenance expenses and higher depreciation expense | |||||||||||||||||||||||
61 | 59 | 2 | Income before income taxes. Increase largely due to higher operating income, partially offset by higher interest expense due to new debt issuance | |||||||||||||||||||||||
47 | 46 | 1 | Net income for common stock. Increase due to higher income before income taxes. See below for effective tax rate explanation | |||||||||||||||||||||||
1,936 | 1,957 | (21) | Kilowatthour sales (millions)3 | |||||||||||||||||||||||
$ | 139.88 | $ | 103.40 | $ | 36.48 | Average fuel oil cost per barrel | ||||||||||||||||||||
472,257 | 470,851 | 1,406 | Customer accounts (end of period) |
% | Rate-making Return on rate base (RORB)* | ROACE** | Rate-making ROACE*** | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Twelve months ended March 31, 2023 | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Hawaiian Electric | Hawaii Electric Light | Maui Electric | |||||||||||||||||||||||||||||||||||||||||||||||
Utility returns | 7.42 | 5.59 | 6.23 | 8.88 | 6.10 | 6.97 | 9.95 | 6.65 | 7.83 | |||||||||||||||||||||||||||||||||||||||||||||||
PUC-allowed returns | 7.37 | 7.52 | 7.43 | 9.50 | 9.50 | 9.50 | 9.50 | 9.50 | 9.50 | |||||||||||||||||||||||||||||||||||||||||||||||
Difference | 0.05 | (1.93) | (1.20) | (0.62) | (3.40) | (2.53) | 0.45 | (2.85) | (1.67) |
Utilities | Number of contracts | Total photovoltaic size (MW) | BESS Size (MW/MWh) | Guaranteed commercial operation dates | Contract term (years) | Total projected annual payment (in millions) | ||||||||||||||||||||||||||||||||
Hawaiian Electric | 4 | 139.5 | 139.5/558 | 7/31/22, 1/11/23, 1/20/23* & 8/31/23** | 20 & 25 | $ | 32.0 | |||||||||||||||||||||||||||||||
Hawaii Electric Light | 2 | 60 | 60/240 | 12/2/22** & 4/21/23 | 25 | 14.9 | ||||||||||||||||||||||||||||||||
Maui Electric | 2 | 75 | 75/300 | 4/28/23* & 10/27/23 | 25 | 17.6 | ||||||||||||||||||||||||||||||||
Total | 8 | 274.5 | 274.5/1,098 | $ | 64.5 |
Utilities | Number of contracts | Total photovoltaic size (MW) | BESS Size (MW/MWh) | Guaranteed commercial operation dates | Contract term (years) | Total projected annual payment (in millions) | ||||||||||||||||||||||||||||||||||||||
Hawaiian Electric | 3 | 79 | 79 | / | 443 | 5/17/23, 10/30/23**, & 4/9/2024 | 20 & 25 | $ | 28.8 | |||||||||||||||||||||||||||||||||||
Hawaiian Electric | 1 | * | N/A | 185 | / | 565 | 12/30/2022*** | 20 | 24.0 | |||||||||||||||||||||||||||||||||||
Total | 4 | 79 | 264 | / | 1,008 | $ | 52.8 |
Utilities | Fast Frequency Response - 1 (MW) | Fast Frequency Response - 2 (MW) | Capacity - Load Build (MW) | Capacity - Load Reduction (MW) | ||||||||||||||||||||||
Hawaiian Electric | — | 26.7 | 14.5 | 19.4 | ||||||||||||||||||||||
Hawaii Electric Light | 6.0 | — | 3.2 | 4.0 | ||||||||||||||||||||||
Maui Electric | 6.1 | — | 1.9 | 4.7 | ||||||||||||||||||||||
Total | 12.1 | 26.7 | 19.6 | 28.1 |
Utilities | Number of contracts | BESS Size (MW/MWh) | Guaranteed commercial operation dates | |||||||||||||||||
Hawaii Electric Light | 1 | * | 12/12 | 12/30/22 | ||||||||||||||||
Maui Electric | 1 | 40/160 | 4/28/23 | |||||||||||||||||
Total | 2 | 52/172 |
(dollars in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||
Short-term borrowings, net | $ | — | — | % | $ | 88 | 2 | % | ||||||||||||||||||
Long-term debt, net | 1,834 | 43 | 1,685 | 41 | ||||||||||||||||||||||
Preferred stock | 34 | 1 | 34 | 1 | ||||||||||||||||||||||
Common stock equity | 2,359 | 56 | 2,344 | 56 | ||||||||||||||||||||||
$ | 4,227 | 100 | % | $ | 4,151 | 100 | % |
Average balance | Balance | |||||||||||||||||||
(in millions) | Three months ended March 31, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||||||||
Short-term borrowings1 | ||||||||||||||||||||
Commercial paper | $ | 25 | $ | — | $ | 88 | ||||||||||||||
Borrowings from HEI | — | — | — | |||||||||||||||||
Line of credit draws on revolving credit facility | — | — | — |
(in millions) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | ||||||||
Total “up to” amounts of taxable debt authorized from 2023 through 2026 | $ | 230 | $ | 65 | $ | 105 | |||||
Less: | |||||||||||
Taxable debt executed in January 2023, but issued on February 9, 2023 | 100 | 25 | 25 | ||||||||
Remaining authorized amounts | $ | 130 | $ | 40 | $ | 80 |
Three months ended March 31 | |||||||||||||||||
(in thousands) | 2023 | 2022 | Change | ||||||||||||||
Net cash provided by operating activities | $ | 169,355 | $ | 76,775 | $ | 92,580 | |||||||||||
Net cash used in investing activities | (120,594) | (74,864) | (45,730) | ||||||||||||||
Net cash provided by financing activities | 28,019 | (25,974) | 53,993 |
Three months ended March 31 | Increase | |||||||||||||||||||||||||
(in millions) | 2023 | 2022 | (decrease) | Primary reason(s) | ||||||||||||||||||||||
Interest and dividend income | $ | 79 | $ | 60 | $ | 19 | ||||||||||||||||||||
Average loan portfolio yields were 76 basis points higher—loan yields continued to increase in 2023 due to the interest rate environment as adjustable rate loan yields repriced with rising interest rates and new loan production yields were higher than the portfolio rates. | ||||||||||||||||||||||||||
Average loan portfolio balances increased $841 million - commercial real estate, home equity line of credit and commercial loan portfolio average balances increased $321 million, $180 million and $23 million, respectively, due to demand for these loan types. Residential loan portfolio average balances increased $186 million due to the Bank’s decision to portfolio a larger portion of the residential loan production. Consumer loan portfolio average balances increased $131 million primarily due to the purchase of solar and sustainable home improvement loans. | ||||||||||||||||||||||||||
Average investment securities portfolio balances decreased $91 million—repayments in the investment securities portfolio were used to fund the loan portfolio growth. | ||||||||||||||||||||||||||
Average investment securities portfolio yields were 9 basis points higher—benefited from lower amortization of premiums in the investment portfolio. | ||||||||||||||||||||||||||
Noninterest income | 14 | 16 | (2) | |||||||||||||||||||||||
Lower mortgage banking income - lower residential loan sale volume due to lower production volume as the higher interest rate environment has reduced the demand for residential mortgage loans. ASB’s decision to portfolio a larger portion of the residential loan production also reduced the amount of loans sold on the secondary market. | ||||||||||||||||||||||||||
Lower gain on sale of real estate - due to the sale of a branch property owned by ASB. The branch was closed in January 2022. No similar sale in 2023. | ||||||||||||||||||||||||||
Less: gain on sale of real estate | — | (1) | 1 | Gain on sale of real estate, which is included in Noninterest income above and in the Bank’s statements of income and comprehensive income in Note 4, is classified as gain on sale of real estate in the condensed consolidated statements of income, and accordingly, is reflected in operating expenses below as a separate line item and excluded from Revenues. | ||||||||||||||||||||||
Revenues | 93 | 75 | 18 | The increase in revenues for the three months ended March 31, 2023 compared to the same period in 2022 was primarily due to higher interest and dividend income partly offset by lower noninterest income. | ||||||||||||||||||||||
Interest expense | 15 | 1 | 14 | |||||||||||||||||||||||
Interest expense on deposits and other borrowings increased in 2023 compared to 2022 due to an increase in balances and yields of other borrowings and term certificates. | ||||||||||||||||||||||||||
Average core deposit balances decreased $351 million; average term certificate balances increased $328 million. | ||||||||||||||||||||||||||
Average deposit yields increased from 5 basis points to 34 basis points. The increase was primarily due to the increase in term certificate yields of 233 basis points and the shift in mix of deposits from low cost core deposits to term certificates. | ||||||||||||||||||||||||||
Average other borrowings increased $625 million and average yields increased 431 basis points. Other borrowings were used to fund the growth in the loan portfolio. The higher yields was reflective of the higher interest rate environment. | ||||||||||||||||||||||||||
Provision for credit losses | 1 | (3) | 4 | |||||||||||||||||||||||
2023 provision for credit losses was due primarily for the growth in the loan portfolio. | ||||||||||||||||||||||||||
2023 provision for credit losses also included the release of credit loss reserves for improved credit loss rates as a result of improved economic outlook and good credit trends. | ||||||||||||||||||||||||||
2022 negative provision for credit losses reflected a stable economic outlook, good credit trends including lower net charge-offs and improved credit loss rates which included credit upgrades in the commercial real estate loan portfolio. | ||||||||||||||||||||||||||
2022 negative provision for credit losses was also due to the release of credit loss reserves for a commercial real estate credit. | ||||||||||||||||||||||||||
Delinquency rates have decreased—from 0.27% at March 31, 2022 to 0.22% at March 31, 2023 due to lower residential 1-4 family loan delinquencies. | ||||||||||||||||||||||||||
Net charge-off to average loans have increased—from 0.01% at March 31, 2022 to 0.14% at March 31, 2023 primarily due to higher consumer loan portfolio net charge-offs and the charge-off of a residential loan. |
Three months ended March 31 | Increase | |||||||||||||||||||||||||
(in millions) | 2023 | 2022 | (decrease) | Primary reason(s) | ||||||||||||||||||||||
Noninterest expense | 54 | 48 | 6 | |||||||||||||||||||||||
Higher compensation and benefits expenses and deposit account expenses. | ||||||||||||||||||||||||||
Higher base compensation and employee benefit costs were due to merit increases, market adjustments and higher performance-based compensation. | ||||||||||||||||||||||||||
Gain on sale of real estate | — | (1) | 1 | |||||||||||||||||||||||
Expenses | 70 | 45 | 25 | The increase in expenses for the three months ended March 31, 2023 compared to the same period in 2022 was due to higher interest expenses, higher provision for credit losses and higher noninterest expense partly offset by higher gain on sale of real estate in 2022. | ||||||||||||||||||||||
Operating income | 23 | 30 | (7) | The decrease in operating income for the three months ended March 31, 2023 compared to the same period in 2022 was primarily due to higher interest expenses, higher noninterest expenses, higher provision for credit losses and lower noninterest income, partly offset by higher interest income. | ||||||||||||||||||||||
Net income | 19 | 24 | (5) | Net income for the three months ended March 31, 2023 was lower than the same period in 2022 due to lower operating income and lower gain on sale of real estate, partly offset by lower income tax expense. |
Three months ended March 31 | ||||||||||||||
(%) | 2023 | 2022 | ||||||||||||
Return on average assets | 0.78 | 1.04 | ||||||||||||
Return on average equity | 15.51 | 13.70 | ||||||||||||
Net interest margin | 2.85 | 2.79 |
Three months ended March 31 | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Average balance | Interest income/ expense | Yield/ rate (%) | Average balance | Interest income/ expense | Yield/ rate (%) | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||
Interest-earning deposits | $ | 10,213 | $ | 121 | 4.76 | $ | 134,835 | $ | 66 | 0.20 | ||||||||||||||||||||||||||||
FHLB stock | 30,089 | 426 | 5.74 | 10,000 | 74 | 3.00 | ||||||||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||||||||||||||
Taxable | 3,042,254 | 13,696 | 1.80 | 3,131,482 | 13,554 | 1.73 | ||||||||||||||||||||||||||||||||
Non-taxable | 68,278 | 498 | 2.92 | 69,600 | 367 | 2.11 | ||||||||||||||||||||||||||||||||
Total investment securities | 3,110,532 | 14,194 | 1.83 | 3,201,082 | 13,921 | 1.74 | ||||||||||||||||||||||||||||||||
Loans | ||||||||||||||||||||||||||||||||||||||
Residential 1-4 family | 2,489,203 | 22,615 | 3.63 | 2,303,446 | 20,113 | 3.49 | ||||||||||||||||||||||||||||||||
Commercial real estate | 1,458,452 | 17,247 | 4.74 | 1,137,295 | 9,211 | 3.25 | ||||||||||||||||||||||||||||||||
Home equity line of credit | 1,021,294 | 9,028 | 3.59 | 840,974 | 6,223 | 3.00 | ||||||||||||||||||||||||||||||||
Residential land | 20,296 | 277 | 5.45 | 20,822 | 257 | 4.93 | ||||||||||||||||||||||||||||||||
Commercial | 784,733 | 10,397 | 5.33 | 761,525 | 6,812 | 3.60 | ||||||||||||||||||||||||||||||||
Consumer | 245,245 | 5,393 | 8.89 | 113,826 | 3,459 | 12.33 | ||||||||||||||||||||||||||||||||
Total loans 1,2 | 6,019,223 | 64,957 | 4.34 | 5,177,888 | 46,075 | 3.58 | ||||||||||||||||||||||||||||||||
Total interest-earning assets 3 | 9,170,057 | 79,698 | 3.49 | 8,523,805 | 60,136 | 2.83 | ||||||||||||||||||||||||||||||||
Allowance for credit losses | (72,113) | (71,135) | ||||||||||||||||||||||||||||||||||||
Noninterest-earning assets | 466,289 | 709,010 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 9,564,233 | $ | 9,161,680 | ||||||||||||||||||||||||||||||||||
Liabilities and shareholder’s equity: | ||||||||||||||||||||||||||||||||||||||
Savings | $ | 3,143,103 | $ | 222 | 0.03 | $ | 3,258,551 | $ | 207 | 0.03 | ||||||||||||||||||||||||||||
Interest-bearing checking | 1,332,214 | 630 | 0.19 | 1,331,008 | 64 | 0.02 | ||||||||||||||||||||||||||||||||
Money market | 197,026 | 586 | 1.21 | 205,363 | 33 | 0.07 | ||||||||||||||||||||||||||||||||
Time certificates | 739,683 | 5,399 | 2.96 | 411,372 | 643 | 0.63 | ||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 5,412,026 | 6,837 | 0.51 | 5,206,294 | 947 | 0.07 | ||||||||||||||||||||||||||||||||
Advances from Federal Home Loan Bank | 502,222 | 5,870 | 4.68 | — | — | — | ||||||||||||||||||||||||||||||||
Borrowings from Federal Reserve Bank | 66,722 | 719 | 4.37 | — | — | — | ||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase | 146,368 | 1,132 | 3.14 | 90,279 | 5 | 0.02 | ||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 6,127,338 | 14,558 | 0.96 | 5,296,573 | 952 | 0.07 | ||||||||||||||||||||||||||||||||
Noninterest bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Deposits | 2,745,317 | 2,973,597 | ||||||||||||||||||||||||||||||||||||
Other | 213,019 | 194,449 | ||||||||||||||||||||||||||||||||||||
Shareholder’s equity | 478,559 | 697,061 | ||||||||||||||||||||||||||||||||||||
Total liabilities and shareholder’s equity | $ | 9,564,233 | $ | 9,161,680 | ||||||||||||||||||||||||||||||||||
Net interest income | $ | 65,140 | $ | 59,184 | ||||||||||||||||||||||||||||||||||
Net interest margin (%) 4 | 2.85 | 2.79 |
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
(dollars in thousands) | Balance | % of total | Balance | % of total | ||||||||||||||||||||||
U.S. Treasury and federal agency obligations | $ | 139,644 | 5 | % | $ | 140,957 | 5 | % | ||||||||||||||||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies | 2,462,220 | 92 | 2,484,821 | 92 | ||||||||||||||||||||||
Corporate bonds | 41,310 | 2 | 40,734 | 2 | ||||||||||||||||||||||
Mortgage revenue bonds | 14,766 | 1 | 14,902 | 1 | ||||||||||||||||||||||
Total investment securities | $ | 2,657,940 | 100 | % | $ | 2,681,414 | 100 | % |
Three months ended March 31 | Year ended December 31, 2022 | |||||||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||||||||
Allowance for credit losses, beginning of period | $ | 72,216 | $ | 71,130 | $ | 71,130 | ||||||||||||||
Provision for credit losses | 1,175 | (3,763) | 2,537 | |||||||||||||||||
Less: net charge-offs | 2,095 | 156 | 1,451 | |||||||||||||||||
Allowance for credit losses, end of period | $ | 71,296 | $ | 67,211 | $ | 72,216 | ||||||||||||||
Ratio of net charge-offs during the period to average loans outstanding (annualized) | 0.14 | % | 0.01 | % | 0.03 | % |
(dollars in millions) | March 31, 2023 | December 31, 2022 | % change | |||||||||||||||||
Total assets | $ | 9,610 | $ | 9,546 | 1 | |||||||||||||||
Investment securities | 2,658 | 2,681 | (1) | |||||||||||||||||
Loans held for investment, net | 5,988 | 5,907 | 1 | |||||||||||||||||
Deposit liabilities | 8,231 | 8,170 | 1 | |||||||||||||||||
Other bank borrowings | 681 | 695 | (2) |
Change in interest rates | Change in NII (gradual change in interest rates) | Change in EVE (instantaneous change in interest rates) | ||||||||||||||||||||||||
(basis points) | March 31, 2023 | December 31, 2022 | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
+300 | 2.2 | % | (0.1 | %) | 6.2 | % | 5.1 | % | ||||||||||||||||||
+200 | 1.5 | — | 4.8 | 3.8 | ||||||||||||||||||||||
+100 | 0.8 | — | 3.0 | 2.1 | ||||||||||||||||||||||
-100 | (0.9) | (0.3) | (3.6) | (3.4) | ||||||||||||||||||||||
-200 | (1.4) | (0.9) | (8.0) | (7.8) | ||||||||||||||||||||||
-300 | (2.1) | (1.7) | (14.6) | (13.8) |
Period* | Total Number of Shares Purchased ** | Average Price Paid per Share ** | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
January 1 to 31, 2023 | 14,443 | $41.78 | — | NA | ||||||||||||||||||||||
February 1 to 28, 2023 | 13,325 | $42.18 | — | NA | ||||||||||||||||||||||
March 1 to 31, 2023 | 190,234 | $38.83 | — | NA |
Hawaiian Electric Industries Retirement Savings Plan, restatement effective October 6, 2022. | ||||||||
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Scott W. H. Seu (HEI Chief Executive Officer) | ||||||||
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Paul K. Ito (HEI Chief Financial Officer) | ||||||||
HEI Certification Pursuant to 18 U.S.C. Section 1350 | ||||||||
HEI Exhibit 101.INS | XBRL Instance Document - the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
HEI Exhibit 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
HEI Exhibit 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
HEI Exhibit 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
HEI Exhibit 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
HEI Exhibit 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
HEI Exhibit 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Shelee M. T. Kimura (Hawaiian Electric Chief Executive Officer) | ||||||||
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Tayne S. Y. Sekimura (Hawaiian Electric Chief Financial Officer) | ||||||||
Hawaiian Electric Certification Pursuant to 18 U.S.C. Section 1350 |
HAWAIIAN ELECTRIC INDUSTRIES, INC. | HAWAIIAN ELECTRIC COMPANY, INC. | |||||||||||||
(Registrant) | (Registrant) | |||||||||||||
By | /s/ Scott W. H. Seu | By | /s/ Shelee M. T. Kimura | |||||||||||
Scott W. H. Seu | Shelee M. T. Kimura | |||||||||||||
President and Chief Executive Officer | President and Chief Executive Officer | |||||||||||||
(Principal Executive Officer of HEI) | (Principal Executive Officer of Hawaiian Electric) | |||||||||||||
By | /s/ Paul K. Ito | By | /s/ Tayne S. Y. Sekimura | |||||||||||
Paul K. Ito | Tayne S. Y. Sekimura | |||||||||||||
Executive Vice President, | Senior Vice President, | |||||||||||||
Chief Financial Officer and Treasurer | Chief Financial Officer and Treasurer | |||||||||||||
(Principal Financial Officer of HEI) | (Principal Financial Officer of Hawaiian Electric) | |||||||||||||
Date: May 9, 2023 | Date: May 9, 2023 |
•Salary Reduction | •Participant Voluntary | ||||
•Rollover | •HEI Diversified Plan ("HEIDI") | ||||
•ER Matching Contribution | •AmeriMatch | ||||
•Employer ASB | •Employer Supplemental | ||||
•Non-Elective Contribution |
Years of Vesting Service | Vested Percentage | ||||
Less than 2 Years | 0% | ||||
2 Years | 20% | ||||
3 Years | 40% | ||||
4 Years | 60% | ||||
5 Years | 80% | ||||
6 or more Years | 100% |
Date: May 9, 2023 | |||||
/s/ Scott W. H. Seu | |||||
Scott W. H. Seu | |||||
President and Chief Executive Officer |
Date: May 9, 2023 | |||||
/s/ Paul K. Ito | |||||
Paul K. Ito | |||||
Executive Vice President, Chief Financial Officer | |||||
and Treasurer |
Date: May 9, 2023 | |||||
/s/ Shelee M. T. Kimura | |||||
Shelee M. T. Kimura | |||||
President and Chief Executive Officer |
Date: May 9, 2023 | |||||
/s/ Tayne S. Y. Sekimura | |||||
Tayne S. Y. Sekimura | |||||
Senior Vice President, Chief Financial Officer and Treasurer |
Date: May 9, 2023 | ||
/s/ Scott W. H. Seu | ||
Scott W. H. Seu | ||
President and Chief Executive Officer | ||
/s/ Paul K. Ito | ||
Paul K. Ito | ||
Executive Vice President, Chief Financial Officer | ||
and Treasurer |
Date: May 9, 2023 | ||
/s/ Shelee M. T. Kimura | ||
Shelee M. T. Kimura | ||
President and Chief Executive Officer | ||
/s/ Tayne S. Y. Sekimura | ||
Tayne S. Y. Sekimura | ||
Senior Vice President, Chief Financial Officer and Treasurer |
Condensed Consolidated Statements of Comprehensive Income (unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Net unrealized gains (losses) on available-for-sale investment securities: | ||
Net unrealized gains (losses) on available-for-sale investment securities arising during the period, tax | $ 6,079 | $ (44,079) |
Amortization of unrealized holding losses on held-to-maturity securities, net of taxes | 1,346 | 0 |
Derivatives qualifying as cash flow hedges: | ||
Unrealized interest rate hedging arising during the period, tax | 65 | 1,046 |
Reclassification adjustment for net unrealized losses included in net income, tax | (17) | 19 |
Retirement benefit plans: | ||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, tax | (122) | 1,562 |
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, tax | $ 147 | $ (1,500) |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Assets | ||
Property, plant and equipment, accumulated depreciation | $ 3,241,748 | $ 3,192,545 |
Shareholders’ equity | ||
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, authorized shares (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued shares (in shares) | 0 | 0 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized shares (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 109,572,075 | 109,470,795 |
Common stock, shares outstanding (in shares) | 109,572,075 | 109,470,795 |
Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Statement of Stockholders' Equity [Abstract] | ||
Common stock dividends (in dollars per share) | $ 0.36 | $ 0.35 |
Condensed Consolidated Statements of Comprehensive Income (unaudited) - HECO (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Retirement benefit plans: | ||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, tax | $ (122) | $ 1,562 |
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, tax | 147 | (1,500) |
Hawaiian Electric Company, Inc. and Subsidiaries | ||
Retirement benefit plans: | ||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, tax | (163) | 1,518 |
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, tax | $ 147 | $ (1,500) |
Condensed Consolidated Balance Sheets (unaudited) - HECO (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Shareholders’ equity | ||
Common stock, authorized shares (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares outstanding (in shares) | 109,572,075 | 109,470,795 |
Hawaiian Electric Company, Inc. and Subsidiaries | ||
Utility property, plant and equipment | ||
Accumulated depreciation on other property, plant and equipment | $ 64 | $ 63 |
Shareholders’ equity | ||
Common stock, par value (in dollars per share) | $ 6.67 | $ 6.67 |
Common stock, authorized shares (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares outstanding (in shares) | 17,854,278 | 17,854,278 |
Condensed Consolidated Statements of Changes in Shareholders' Equity (unaudited) - HECO - USD ($) $ in Thousands |
Total |
Hawaiian Electric Company, Inc. and Subsidiaries |
Common stock |
Common stock
Hawaiian Electric Company, Inc. and Subsidiaries
|
Premium on capital stock
Hawaiian Electric Company, Inc. and Subsidiaries
|
Retained earnings |
Retained earnings
Hawaiian Electric Company, Inc. and Subsidiaries
|
Accumulated other comprehensive income (loss) |
Accumulated other comprehensive income (loss)
Hawaiian Electric Company, Inc. and Subsidiaries
|
---|---|---|---|---|---|---|---|---|---|
Beginning balance (in shares) at Dec. 31, 2021 | 109,312,000 | 17,753,000 | |||||||
Beginning balance at Dec. 31, 2021 | $ 2,390,884 | $ 2,261,899 | $ 1,685,496 | $ 118,376 | $ 798,526 | $ 757,921 | $ 1,348,277 | $ (52,533) | $ (3,280) |
Increase (decrease) in stockholders' equity | |||||||||
Net income for common stock | 69,167 | 46,409 | 69,167 | 46,409 | |||||
Other comprehensive (loss) income, net of tax benefits | (117,159) | 51 | (117,159) | 51 | |||||
Common stock dividends | (38,301) | (31,475) | (38,301) | (31,475) | |||||
Ending balance (in shares) at Mar. 31, 2022 | 109,431,000 | 17,753,000 | |||||||
Ending balance at Mar. 31, 2022 | $ 2,303,642 | 2,276,884 | $ 1,684,547 | $ 118,376 | 798,526 | 788,787 | 1,363,211 | (169,692) | (3,229) |
Beginning balance (in shares) at Dec. 31, 2022 | 109,470,795 | 109,471,000 | 17,854,000 | ||||||
Beginning balance at Dec. 31, 2022 | $ 2,202,499 | 2,344,170 | $ 1,692,697 | $ 119,048 | 810,955 | 845,830 | 1,411,306 | (336,028) | 2,861 |
Increase (decrease) in stockholders' equity | |||||||||
Net income for common stock | 54,721 | 47,009 | 54,721 | 47,009 | |||||
Other comprehensive (loss) income, net of tax benefits | 20,488 | (45) | 20,488 | (45) | |||||
Common stock dividends | $ (39,446) | (32,250) | (39,446) | (32,250) | |||||
Ending balance (in shares) at Mar. 31, 2023 | 109,572,075 | 109,572,000 | 17,854,000 | ||||||
Ending balance at Mar. 31, 2023 | $ 2,237,955 | $ 2,358,884 | $ 1,692,390 | $ 119,048 | $ 810,955 | $ 861,105 | $ 1,426,065 | $ (315,540) | $ 2,816 |
Basis of presentation |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of presentationThe accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, the instructions to SEC Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In preparing the unaudited condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenues and expenses for the period. Actual results could differ significantly from those estimates. The accompanying unaudited condensed consolidated financial statements and the following notes should be read in conjunction with the audited consolidated financial statements and the notes thereto in HEI’s and Hawaiian Electric’s Form 10-K for the year ended December 31, 2022.In the opinion of HEI’s and Hawaiian Electric’s management, the accompanying unaudited condensed consolidated financial statements contain all material adjustments required by GAAP to fairly state consolidated HEI’s and Hawaiian Electric’s financial positions as of March 31, 2023 and December 31, 2022 and the results of their operations and cash flows for the three months ended March 31, 2023 and 2022. All such adjustments are of a normal recurring nature, unless otherwise disclosed below or in other referenced material. Results of operations for interim periods are not necessarily indicative of results for the full year.Recent accounting pronouncements.Credit Losses. In March 2022, Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures,” which eliminates the accounting guidance for Troubled Debt Restructurings (TDRs) by creditors in Subtopic 310-40, Receivables-Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. The amendments in this update also require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, “Financial Instruments-Credit Losses-Measured at Amortized Cost.” Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 325-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit-quality indicator and class of financing receivable by year of origination. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. ASB updated the accounting for certain loan refinancings and restructurings, and included the required disclosures in the Notes herein |
Segment financial information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment financial information | Segment financial information
Intercompany electricity sales of the Utilities to ASB and “other” segments are not eliminated because those segments would need to purchase electricity from another source if it were not provided by the Utilities and the profit on such sales is nominal. Hamakua Energy, LLC’s (Hamakua Energy’s) sales to Hawaii Electric Light (a regulated affiliate) are eliminated in consolidation.
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Electric utility segment |
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Electric Utility Subsidiary [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric utility segment | Electric utility segment Unconsolidated variable interest entities. Power purchase agreements. As of March 31, 2023, the Utilities had four power purchase agreements (PPAs) for firm capacity and other PPAs with independent power producers (IPPs) and Schedule Q providers (i.e., customers with cogeneration and/or power production facilities who buy power from or sell power to the Utilities), none of which are currently required to be consolidated as VIEs. Pursuant to the current accounting standards for VIEs, the Utilities are deemed to have a variable interest in Kalaeloa Partners, L.P. (Kalaeloa) and Hamakua Energy by reason of the provisions of the PPA that the Utilities have with the two IPPs. However, management has concluded that the Utilities are not the primary beneficiary of Kalaeloa and Hamakua Energy because the Utilities do not have the power to direct the activities that most significantly impact the two IPPs’ economic performance nor the obligation to absorb their expected losses, if any, that could potentially be significant to the IPPs. Thus, the Utilities have not consolidated Kalaeloa and Hamakua Energy in its condensed consolidated financial statements. However, Hamakua Energy is an indirect subsidiary of Pacific Current and is consolidated in HEI’s condensed consolidated financial statements. For the other PPAs with IPPs, the Utilities have concluded that the consolidation of the IPPs was not required because either the Utilities do not have variable interests in the IPPs due to the absence of an obligation in the PPAs for the Utilities to absorb any variability of the IPPs, or the IPP was considered a “governmental organization,” and thus excluded from the scope of accounting standards for VIEs. The consolidation of any significant IPP could have a material effect on the unaudited condensed consolidated financial statements, including the recognition of a significant amount of assets and liabilities and, if such a consolidated IPP were operating at a loss and had insufficient equity, the potential recognition of such losses. If the Utilities determine they are required to consolidate the financial statements of such an IPP and the consolidation has a material effect, the Utilities would retrospectively apply accounting standards for VIEs to the IPP.Commitments and contingencies. Contingencies. The Utilities are subject in the normal course of business to legal, regulatory and environmental proceedings. Management does not anticipate that the aggregate ultimate liability arising out of these pending or threatened legal proceedings will be material to its financial position. However, the Utilities cannot rule out the possibility that such outcomes could have a material effect on the results of operations or liquidity for a particular reporting period in the future. The Utilities record loss contingencies when the outcome of such proceedings is probable and when the amount of the loss is reasonably estimable. The Utilities also evaluate, on a continuous basis, whether developments in such proceedings could cause these assessments or estimates to change. Assessment regarding future events is required when evaluating whether a loss is probable or reasonably possible, and as to whether such loss or a range of such loss is estimable. Management is often unable to estimate a reasonably possible loss, or a range of loss, particularly in cases in which: (i) the damages sought are indeterminate or the basis for the damages claimed is not clear; (ii) proceedings are in early stages; (iii) discovery is not complete; (iv) the matters involve novel or unsettled legal theories; (v) significant facts are in dispute; (vi) a large number of parties are represented (including circumstances in which it is uncertain how liability, if any, would be shared among multiple defendants); (vii) a lower court or administrative agency’s decision or ruling has been appealed; and/or (vii) a wide range of potential outcomes exist. In such cases, there may be considerable uncertainty regarding the timing or ultimate resolution, including any possible loss, fine, penalty, or business impact. Power purchase agreements. Purchases from all IPPs were as follows:
1 The term of the PPA with AES Hawaii expired on September 1, 2022 and the AES Hawaii coal plant ceased operations. 2 Includes hydro power and other PPAs. Kalaeloa Partners, L.P. Under a 1988 PPA, as amended, Hawaiian Electric is committed to purchase 208 MW of firm capacity from Kalaeloa. In October 2021, Hawaiian Electric and Kalaeloa signed the Amended and Restated Power Purchase Agreement for Firm Dispatchable Capacity and Energy (Amended and Restated PPA) to extend the PPA for an additional term of 10 years. The Amended and Restated PPA was approved by the PUC on November 23, 2022. The new pricing provisions in the Amended and Restated PPA took effect on January 1, 2023. Stage 1 Renewable PPAs. In February 2018, the Utilities issued their Stage 1 renewable request for proposals and have procured eight renewable PPAs with a total of 274.5 MW capacity. The total annual payments to be made by the Utilities under the eight renewable PPAs are estimated at $64.5 million. The Utilities have received PUC approvals to recover the total projected annual payments under the eight renewable PPAs through the purchased power adjustment clause (PPAC) to the extent such costs are not included in base rates. As of March 31, 2023, the Utilities have accounted for the battery portion of two PPAs that were placed in service during 2022 and first quarter of 2023 as finance leases and recorded lease liabilities with corresponding right-of-use assets of $88 million. On April 21, 2023, the AES Waikoloa Solar project with a capacity of 30 MW, including 120 MWh of batteries, was placed into commercial operation on Hawaii Island, and the battery portion of the PPA will be recorded as a finance lease during the second quarter of 2023. The timing of the Utilities’ recognition of the expense conforms to ratemaking treatment for the Utilities’ recovery of the cost of electricity and is included in purchased power for the interest and amortization of financing leases related to PPAs. Any material differences between expense recognition and timing of payments is deferred as a regulatory asset or liability in order to match what is being recovered for ratemaking purposes. Hu Honua Bioenergy, LLC (Hu Honua). In May 2012, Hawaii Electric Light signed a PPA, which the PUC approved in December 2013, with Hu Honua for 21.5 MW of renewable, dispatchable firm capacity fueled by locally grown biomass from a facility on the island of Hawaii. Under the terms of the PPA, the Hu Honua plant was scheduled to be in service in 2016. However, Hu Honua encountered construction and litigation delays, which resulted in an amended and restated PPA between Hawaii Electric Light and Hu Honua dated May 9, 2017. On May 23, 2022, the PUC issued a decision and order denying the amended and restated PPA, based on, among other things, findings that: (1) the project will result in significant greenhouse gas (GHG) emissions, (2) Hu Honua’s proposed carbon commitment to sequester more GHG emissions than produced by the project are speculative and unsupported, (3) the amended and restated PPA is likely to result in high costs to customers through its relatively high cost of electricity and through potential displacement of other, lower cost, renewable resources, and (4) based on the foregoing, approving the amended and restated PPA is not prudent or in the public interest. On June 2, 2022, Hawaii Electric Light and Hu Honua filed their separate motions for reconsideration, which were denied by the PUC on June 24, 2022. On June 29, 2022, Hu Honua filed its notice of appeal to the Hawaii Supreme Court of the PUC’s May 23, 2022 decision and order denying the amended and restated PPA, and the PUC’s June 24, 2022 order denying Hawaii Electric Light and Hu Honua’s motions for reconsideration. Opening briefs were filed with the Supreme Court on October 5, 2022. Answering briefs were filed on December 5, 2022, and reply briefs were filed on December 28, 2022. The Supreme Court heard oral arguments on January 31, 2023. On March 13, 2023, the Hawaii Supreme Court affirmed the PUC’s decision denying the amended and restated PPA between Hu Honua and Hawaii Electric Light and entered its judgment on appeal on April 12, 2023. Molokai New Energy Partners (MNEP). In July 2018, the PUC approved Maui Electric’s PPA with MNEP to purchase solar energy from a photovoltaic (PV) plus battery storage project. The 4.88 MW PV and 3 MW Battery Energy Storage System project was to deliver no more than 2.64 MW at any time to the Molokai system. On March 25, 2020, MNEP filed a complaint in the United Stated District Court for the District of Hawaii against Maui Electric claiming breach of contract. On June 3, 2020, Maui Electric provided a Notice of Default and Termination of the PPA to MNEP terminating the PPA with an effective date of July 10, 2020. Thereafter, MNEP filed an amended complaint to include claims relating to the termination and Hawaiian Electric filed its answer to the amended complaint on September 11, 2020, disputing the facts presented by MNEP and all claims within the original and amended complaint. Currently, the discovery phase is ongoing. Utility projects. Many public utility projects require PUC approval and various permits from other governmental agencies. Difficulties in obtaining, or the inability to obtain, the necessary approvals or permits or community support can result in significantly increased project costs or even cancellation of projects. In the event a project does not proceed, or if it becomes probable the PUC will disallow cost recovery for all or part of a project, or if PUC-imposed caps on project costs are expected to be exceeded, project costs may need to be written off in amounts that could result in significant reductions in Hawaiian Electric’s consolidated net income. Enterprise Resource Planning/Enterprise Asset Management (ERP/EAM) implementation project. The ERP/EAM Implementation Project went live in October 2018. Hawaii Electric Light and Hawaiian Electric began to incorporate their portion of the deferred project costs in rate base and started the amortization over a 12-year period in January 2020 and November 2020, respectively. The PUC required a minimum of $246 million ERP/EAM project-related benefit to be delivered to customers over the system’s 12-year service life. In February 2019, the PUC approved a methodology for passing the future cost saving benefits of the new ERP/EAM system to customers developed by the Utilities in collaboration with the Consumer Advocate. The Utilities filed a benefits clarification document on June 10, 2019, reflecting $150 million in future net other operation and maintenance (O&M) expense reductions and cost avoidance, and $96 million in capital cost reductions and tax savings over the 12-year service life. To the extent the reduction in O&M expense relates to amounts reflected in electric rates, the Utilities would reduce future rates for such amounts. In October 2019, the PUC approved the Utilities and the Consumer Advocate’s Stipulated Performance Metrics and Tracking Mechanism. As of March 31, 2023, the Utilities’ regulatory liability was $11.0 million ($3.7 million for Hawaiian Electric, $2.9 million for Hawaii Electric Light and $4.4 million for Maui Electric) for the O&M expense savings that are being amortized or to be included in future rates. As part of the settlement agreement approved in the Hawaiian Electric 2020 test year rate case, the regulatory liability for Hawaiian Electric will be amortized over five years, beginning in November 2020, and the O&M benefits for Hawaiian Electric was considered flowed through to customers. At the PUC’s direction, the Utilities have been filing Annual Enterprise System Benefits (AESB) report on the achieved benefits savings. The most recent AESB report was filed on February 14, 2023 for the period January 1 through December 31, 2022. Waena Switchyard/Synchronous Condenser Project. In October 2020, to support efforts to increase renewable energy generation and reduce fossil fuel consumption by deactivating current generating units, Maui Electric filed a PUC application to construct a switchyard, which includes the extension of two 69 kV transmission lines and the relocation of another 69 kV transmission line; and the conversion of two generating units to synchronous condensers at Kahului Power Plant in central Maui. In November 2021, the PUC approved Maui Electric’s request to commit funds estimated at $38.8 million for the project, and to recover capital expenditures for the project under Exceptional Project Recovery Mechanism (EPRM) not to exceed $38.8 million, which shall be further reduced to reflect the total project cost exclusive of overhead costs not directly attributable to the project. The Waena Switchyard project is expected to be placed in service in the third quarter of 2023, while the conversion of the two generating units will be performed after the retirement of Kahului Power Plant Units 3 and 4. In approving the project, the PUC recognized that the project will facilitate the ability to accommodate increased renewable energy, as contemplated under the EPRM guidelines. As of March 31, 2023, $17.1 million has been incurred for the project. Environmental regulation. The Utilities are subject to environmental laws and regulations that regulate the operation of existing facilities, the construction and operation of new facilities and the proper cleanup and disposal of hazardous waste and toxic substances. Hawaiian Electric, Hawaii Electric Light and Maui Electric, like other utilities, periodically encounter petroleum or other chemical releases associated with current or previous operations. The Utilities report and take action on these releases when and as required by applicable law and regulations. The Utilities believe the costs of responding to such releases identified to date will not have a material effect, individually or in the aggregate, on Hawaiian Electric’s consolidated results of operations, financial condition or liquidity. Former Molokai Electric Company generation site. In 1989, Maui Electric acquired Molokai Electric Company. Molokai Electric Company had sold its former generation site (Site) in 1983, but continued to operate at the Site under a lease until 1985 and left the property in 1987. The federal Environmental Protection Agency (EPA) has since identified environmental impacts in the subsurface soil at the Site. In cooperation with the Department of Health of State of Hawaii and EPA, Maui Electric further investigated the Site and the adjacent parcel to determine the extent of impacts of polychlorinated biphenyls (PCBs), residual fuel oils and other subsurface contaminants. Maui Electric has a reserve balance of $2.6 million as of March 31, 2023, representing the probable and reasonably estimable undiscounted cost for remediation of the Site and the adjacent parcel based on presently available information; however, final costs of remediation will depend on the cleanup approach implemented. Additionally, on November 24, 2021, the current landowners of the Site, Misaki’s, Inc., filed a lawsuit against Hawaiian Electric (as alleged successor in interest to Molokai Electric, the prior owner of the Site) in the Circuit Court of the Second Circuit of the State of Hawaii (removed to the U.S. District Court for the District of Hawaii). The complaint, which was subsequently amended to include Maui Electric, alleges that Hawaiian Electric is responsible for remediation of the Site based on the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), and the Hawaii Environmental Response Law under Hawaii Revised Statutes Chapter 128D, as well as being liable on contractual claims related to a short leaseback period during the transition of ownership from Molokai Electric. The amended complaint was dismissed and a new complaint may be filed subject to the parties attempt to enter into settlement negotiations, but the Utilities intend to vigorously defend the action if necessary. At this time, the Utilities are unable to determine the ultimate outcome of the lawsuit or the amount of any possible loss. As of March 31, 2023, the reserve balance recorded by the Utilities to address the lawsuit was not material. Pearl Harbor sediment study. In July 2014, the U.S. Navy notified Hawaiian Electric of the Navy’s determination that Hawaiian Electric is a Potentially Responsible Party under CERCLA responsible for the costs of investigation and cleanup of PCB contamination in sediment in the area offshore of the Waiau Power Plant as part of the Pearl Harbor Superfund Site. Hawaiian Electric was also required by the EPA to assess potential sources and extent of PCB contamination onshore at Waiau Power Plant. As of March 31, 2023, the reserve account balance recorded by Hawaiian Electric to address the PCB contamination was $9.9 million. The reserve balance represents the probable and reasonably estimable undiscounted cost for the onshore and offshore investigation and remediation. The final remediation costs will depend on the actual onshore and offshore cleanup costs. Regulatory proceedings Decoupling. Decoupling is a regulatory model that is intended to provide the Utilities with financial stability and facilitate meeting the State of Hawaii’s goals to transition to a clean energy economy and achieve an aggressive renewable portfolio standard. Decoupling delinks the utility’s revenues from the utility’s sales, removing the disincentive to promote energy efficiency and accept more renewable energy. Decoupling continues under the PBR Framework. Performance-based regulation framework. On December 23, 2020, the PUC issued a decision and order (PBR D&O) establishing the PBR Framework to govern the Utilities. The PBR Framework incorporates an annual revenue adjustment (ARA) and a suite of new regulatory mechanisms in addition to previously established regulatory mechanisms. Under the PBR Framework, the decoupling mechanism (i.e., the Revenue Balancing Account (RBA)) established by the previous regulatory framework will continue. The existing cost recovery mechanisms will continue as currently implemented (e.g., the Energy Cost Recovery Clause, PPAC, Demand Side Management surcharge, Renewable Energy Infrastructure Program, Demand Response Adjustment Clause, Pension and Other Post-Employment Benefits (OPEB) tracking mechanisms). In addition to annual revenues provided by the ARA, the Utilities may seek relief for extraordinary projects or programs through the Exceptional Project Recovery Mechanism (EPRM) (formerly known as the Major Project Interim Recovery adjustment mechanism) and earn financial rewards for exemplary performance as provided through a portfolio of Performance Incentive Mechanisms (PIMs) and Shared Savings Mechanisms (SSMs). The PBR Framework incorporates a variety of additional performance mechanisms, including Scorecards, Reported Metrics, and an expedited Pilot Process. The PBR Framework also contains a number of safeguards, including a symmetric Earnings Sharing Mechanism (ESM) which protects the Utilities and customers from excessive earnings or losses, as measured by the Utilities’ achieved rate-making ROACE and a Re-Opener mechanism, under which the PUC will open an examination, at its discretion, to determine if adjustments or modifications to specific PBR mechanisms are appropriate. The PBR Framework became fully effective on June 1, 2021. On June 17, 2022, the PUC issued a decision and order (June 2022 D&O) establishing additional PIMs under the PBR Framework for the Utilities. The June 2022 D&O approved two new PIMs, a new SSM, and extended the timeframe for an existing PIM. Of the new PIMs, only one is penalty-only. Specifically, the PUC approved (1) a new (penalty-only) generation-caused interruption reliability PIM, (2) a new (penalty/reward) interconnection requirements study (IRS) PIM, (3) a new (reward-only) Collective Shared Savings Mechanism (CSSM), and (4) a modification and extension of the existing interim (reward-only) Grid Services PIM. On November 23, 2022, the PUC approved the Utilities’ proposed tariffs to implement the aforementioned PIMs with an effective date of January 1, 2023. In addition, the June 2022 D&O instructed the Utilities to prepare and submit: a detailed fossil fuel retirement report (FF Retirement Report) outlining necessary steps to safely and reliably retire certain existing fossil fuel power plants during the first multi-year rate period (MRP); and a functional integration plan (FIP) for distributed energy resources (DER) to increase transparency into the Utilities’ plans and progress for utilizing cost-effective grid services from DERs and ensure that the necessary functionalities and requisite technologies are in place to do so. The PUC also instructed the PBR Working Group to continue its ongoing collaborative efforts to consider other potential new incentive mechanisms and to address other issues raised during the proceeding. On March 30, 2023, the PUC held a PBR Working Group coordination meeting to initiate subgroups on the priority topics of a long-term DER Grid Services PIM, modification to/evaluation of existing PIMs, and a comprehensive PBR Framework review to be addressed in the near term. In accordance with the June 2022 D&O, the Utilities filed their FIP and FF Retirement Report with the PUC on September 30, 2022 and April 17, 2023, respectively. Revenue adjustment mechanism. Prior to the implementation of the PBR Framework, the revenue adjustment mechanism (RAM) was a major component of the previously established regulatory framework. The RAM was based on the lesser of: a) an inflationary adjustment for certain O&M expenses and return on investment for certain rate base changes, or b) cumulative annual compounded increase in Gross Domestic Product Price Index applied to annualized target revenues (the RAM Cap). Under the PBR Framework, the ARA mechanism replaced the RAM, and became effective on June 1, 2021. RAM revenue adjustments approved by the PUC in 2020 will continue to be included in the RBA provision’s target revenue and RBA rate adjustment unless modified with PUC approval. Annual revenue adjustment mechanism. The PBR Framework established a five-year MRP during which there will be no general rate cases. Target revenues will be adjusted according to an index-driven ARA based on (i) an inflation factor, (ii) a predetermined X-factor to encompass productivity, which is set at zero, (iii) a Z-factor to account for exceptional circumstances not in the Utilities’ control and (iv) a customer dividend consisting of a negative adjustment of 0.22% of adjusted revenue requirements compounded annually and a flow through of the “pre-PBR” savings commitment from the management audit recommendations developed in a prior docket at a rate of $6.6 million per year from 2021 to 2025. The implementation of the ARA occurred on June 1, 2021. Earnings sharing mechanism. The PBR Framework established a symmetrical ESM for achieved rate-making ROACE outside of a 300 basis points dead band above or below the current authorized ROACE of 9.5% for each of the Utilities. There is a 50/50 sharing between customers and Utilities for the achieved rate-making ROACE falling within 150 basis points outside of the dead band in either direction, and a 90/10 sharing for any further difference. A reopening or review of the PBR terms will be triggered if the Utilities credit rating outlook indicates a potential credit downgrade below investment grade status, or if its achieved rate-making ROACE enters the outer most tier of the ESM. Exceptional project recovery mechanism. Prior to the implementation of the PBR Framework, the PUC established the Major Project Interim Recovery (MPIR) adjustment mechanism and MPIR Guidelines. The MPIR mechanism provides the opportunity to recover revenues for net costs of approved eligible projects placed in service between general rate cases. In establishing the PBR Framework, the MPIR Guidelines were terminated and replaced with the EPRM Guidelines. Although the MPIR Guidelines were terminated and replaced by the EPRM Guidelines, the MPIR mechanism will continue within the PBR Framework to provide recovery of project costs previously approved for recovery under the MPIR. The established EPRM Guidelines permit the Utilities to include the full amount of approved costs in the EPRM for recovery in the first year the project goes into service, pro-rated for the portion of the year the project is in service. Deferred and O&M expense projects are also eligible for EPRM recovery under the EPRM Guidelines. EPRM recoverable costs will be limited to the lesser of actual incurred project costs or PUC‑approved amounts, net of savings. As of March 31, 2023, the Utilities annualized MPIR and EPRM revenue amounts totaled $26.2 million, including revenue taxes, for the Schofield Generating Station ($16.5 million), West Loch PV project ($3.5 million), Grid Modernization Strategy (GMS) Phase 1 project ($6.1 million for all three utilities) and Waiawa UFLS project ($0.1 million) that included the 2022 return on project amount (based on approved amounts) in rate base, depreciation and incremental O&M expenses. The PUC approved the Utilities’ recovery of the annualized 2022 MPIR amounts for the Schofield Generating Station, West Loch PV, and GMS Phase 1 projects effective June 1, 2022 through the RBA rate adjustment. Recovery of the incremental change to the West Loch PV project and Waiawa UFLS project were approved on December 7, 2022 and December 5, 2022, respectively. As of March 31, 2023, the PUC approved two EPRM applications for projects totaling $41 million to the extent that the project costs are not included in rates. Currently, the Utilities are seeking EPRM recovery for six projects with total project costs up to $480 million, subject to PUC approval. Pilot process. As part of the PBR Framework, the PUC approved a Pilot Process to foster innovation by establishing an expedited implementation process for pilots that tests new technologies, programs, business models, and other arrangements. Under the Pilot Process, the Utilities submit specific pilot proposals (Pilot Notices) that are within the scope of the approved Workplan to the PUC for their expedited review. The PUC will strive to issue an order addressing a proposed pilot within 45 days of the filing date of a Pilot Notice. If the PUC does not take affirmative action on a Pilot Notice by the end of the 45-day period, the Pilot Notice shall be considered approved as submitted. The PUC may modify the pilot as originally proposed, and the Utilities shall have 15 days to notify the PUC whether the Utilities accept the modification, propose further modification, or withdraw the Pilot Notice. The PUC may also, where necessary, suspend the Pilot Notice for further investigation. The approved Pilot Process includes a cost recovery process that generally allows the Utilities to defer and recover total annual expenditures of approved pilot projects net of revenues, subject to an annual cap of $10 million, over 12 months beginning June 1 of the year following pilot implementation through the RBA rate adjustment, although the PUC may determine on a case-by-case basis that a particular project’s deferred costs should be amortized over a period greater than 12 months. On February 28, 2023, the Utilities filed their annual Pilot Update report covering pilot projects that were active during 2022, including reporting on pilot projects that were initiated prior to the commencement of the Pilot Process. The Pilot Update reported on approximately $0.4 million of 2022 recorded pilot project costs including revenue taxes for the Utilities. The 2022 recorded pilot project costs were included in the Utilities’ proposed adjustments to target revenue in the 2023 spring revenue report filed on March 28, 2023. On February 2, 2023, the Utilities filed a Pilot Notice to commence an EV Telematics Pilot project in April 2023. On March 22, 2023, the PUC issued an order approving the Utilities’ EV Telematics Pilot project. The order also temporarily suspends the filing of Pilot Notices, pending a stakeholder meeting to be held in the second quarter of 2023, to discuss the Pilot Process and potential improvements. Performance incentive mechanisms. The PUC has established the following PIMs and SSMs: (1) Service Quality performance incentives, (2) Phase 1 Request for proposal (RFP) PIM for procurement of low-cost renewable energy, (3) Phase 2 RFP PIMs for generation and generation plus storage project, and Grid Services and standalone storage, (4) new PIMs established in the PBR D&O and (5) new PIMs and a SSM established in the June 2022 D&O. •Service Quality performance incentives (ongoing). Service Quality performance incentives are measured on a calendar-year basis. The PIM tariff requires the performance targets, deadbands and the amount of maximum financial incentives used to determine the PIM financial incentive levels for each of the PIMs to remain constant in interim periods, unless otherwise amended by order of the PUC. •Service Reliability Performance measured by Transmission and Distribution-caused System Average Interruption Duration and Frequency Indexes (penalties only). Target performance is based on each utility’s historical 10-year average performance with a deadband of one standard deviation. The maximum penalty for each performance index is 20 basis points applied to the common equity share of each respective utility’s approved rate base (or maximum penalties of approximately $6.8 million - for both indices in total for the three utilities). For the 2022 evaluation period, the Utilities incurred $(0.1) million in penalties. •Call Center Performance measured by the percentage of calls answered within 30 seconds. Target performance is based on the annual average performance for each utility for the most recent eight quarters with a deadband of 3% above and below the target. The maximum penalty or reward is 8 basis points applied to the common equity share of each respective utility’s approved rate base (or maximum penalties or rewards of approximately $1.4 million - in total for the three utilities). •Phase 1 RFP PIM. Procurement of low-cost variable renewable resources through the RFP process in 2018 is measured by comparison of the procurement price to target prices. The first portion of the incentive was earned upon PUC approval of the PPAs. Based on the seven PPAs approved in 2019, the Utilities recognized $1.7 million in 2019 with the remaining award to be recognized in the year following the in-service date of the projects, which is estimated to occur from 2023 to 2025. •Phase 2 RFP PIMs. The PUC order issued on October 9, 2019 establishes pricing thresholds, timelines to complete contracting, and other performance criteria for the performance incentive eligibility. The PIMs provide incentives only without penalties. On July 9, 2020, the Utilities filed two Grid Services Purchase Agreements (GSPA) for the Grid Service RFP that potentially qualify for a demand response PIM; however, details of the incentive metrics will be determined by the PUC. On September 15, 2020, the Utilities filed one PPA that qualified for a PIM incentive and on February 16, 2021, the Utilities filed one additional PPA that qualified for a declining PIM incentive. The PUC approved two PPAs in September 2021 and November 2021 and two GSPAs on December 31, 2020. Based on the two approved PPAs, the Utilities recognized $0.1 million in rewards in 2021. In December 2022 and March 2023, these two PPAs were terminated or declared null and void. •The PUC previously established the following two PIMs in its PBR D&O, which were approved in an order issued on March 23, 2021 and became effective on June 1, 2021. In its June 2022 D&O, the PUC modified and extended the Grid Services PIM. •Renewable portfolio standard (RPS) - A PIM that provides a financial reward for accelerating the achievement of RPS goals. The Utilities may earn a reward for the amount of system generation above the interpolated statutory RPS goal at $20/MWh in 2021 and 2022, $15/MWh in 2023, and $10/MWh for the remainder of the MRP. Penalties are already prescribed in the RPS as $20/MWh for failing to meet RPS targets in 2030, 2040 and 2045. The evaluation period commenced on January 1, 2021. •Grid Services PIM that provides financial rewards on a $/kW basis for the acquisition of eligible grid services. The eligibility period for this PIM initially commenced on January 1, 2021 and was scheduled to end on December 31, 2022. However, the June 2022 D&O extended the eligibility period for this PIM through December 31, 2023. The June 2022 D&O also increased the incentive rate for the acquisition of load reduction grid services. During the PIM performance period, newly acquired committed capacity in the Oahu Scheduled Dispatch Program (SDP), the Oahu Fast DR program (up to the 7 MW cap), and the Maui SDP program shall qualify for the incentive. The Utilities can earn a maximum reward of $1.5 million from 2021 through 2023. In 2022, the Utilities earned $0.04 million in rewards. •The PUC also previously established the following three PIMs in its PBR D&O, which were approved by the PUC on May 17, 2021 and became effective on June 1, 2021. •Interconnection Approval PIM that provides financial rewards and penalties for interconnection times for DER systems <100 kW in size. The Utilities can earn a total annual maximum reward of $3.0 million or a total annual maximum penalty of $0.9 million. In 2022, the Utilities earned $3.0 million in rewards. •Low-to-Moderate Income (LMI) Energy Efficiency PIM that provides financial rewards for collaboration between the Utilities and the third-party Public Benefits Fee Administrator to deliver energy savings for low- and moderate-income customers. The Utilities can earn a total annual maximum reward of $2.0 million. The PIM will initially have a duration of three years and be subject to an annual review. The evaluation period is based on Hawaii Energy’s program year with the initial evaluation year being the period of July 1, 2021 through June 30, 2022. The Utilities earned $0.5 million in rewards for the program period ending June 30, 2022. •Advanced Metering Infrastructure Utilization PIM that provides financial rewards for leveraging grid modernization investments and engaging customers beyond what is already planned in the Phase 1 Grid Modernization program. The Utilities can earn a total annual maximum reward of $2.0 million. The PIM will initially have a duration of three years after which it will be re-evaluated. The evaluation period commenced on January 1, 2021. •The PUC established the following new PIMs and SSM in its June 2022 D&O, which became effective on January 1, 2023. •Generation-caused System Average Interruption Duration and Frequency Indexes PIMs to incentivize achievement of generation-based reliability targets, measured by Generation System Average Interruption Duration and Frequency Indexes (penalties only). Target performance is based on each utility’s historical 10-year average performance with a deadband of one standard deviation. The maximum penalty for each performance index is 3 basis points applied to the common equity share of each respective utility’s approved rate base (or maximum penalties of approximately $1 million - for both indices in total for the three utilities). •An IRS PIM to incentivize the timely completion of the IRS process for large-scale renewable energy projects (rewards and penalties) measured by the number of months between final model checkout and delivery of IRS results to the developer. Target performance is ten months with an asymmetrical deadband of two-months for penalties and no deadband for rewards. The maximum penalty and reward will depend on the specifics of the upcoming procurement. •A CSSM to incentivize cost control over the Utilities’ fuel, purchased power, and EPRM/MPIR costs (collectively, non-ARA costs). This is a reward only incentive where the Utilities retain 20% share of savings when non-ARA costs in a performance year are lower than target year non-ARA costs, which are adjusted for changes in fuel prices, inflation, and system generation from a base year (calendar year 2021). The CSSM does not have a potential penalty and does not have a cap for maximum reward. For the 2022 evaluation period, the Utilities earned $3.4 million ($2.5 million for Hawaiian Electric, $0.4 million for Hawaii Electric Light and $0.5 million for Maui Electric) in rewards net of penalties. The net rewards related to 2022 were reflected in the 2023 PIMs annual report and 2023 spring revenue report filings. Annual review cycle. PBR D&O established an annual review cycle for revenue adjustments under the PBR Framework, including the biannual submission of the revenue reports. The Utilities filed the spring revenue report on March 28, 2023, which is subject to PUC approval. The net incremental amounts between the 2022 fall and 2023 spring revenue reports are shown in the following table. The amounts are to be collected (refunded) from June, 1, 2023 through May 31, 2024 under the RBA rate tariffs, which were included in the 2023 spring revenue report filing.
Note: Columns may not foot due to rounding. Regulatory assets for COVID-19 related costs. On May 4, 2020, the PUC issued an order, authorizing all utilities, including the Utilities, to establish regulatory assets to record costs resulting from the suspension of disconnections of service during the pendency of the Governor’s Emergency Proclamation and until otherwise ordered by the PUC. In future proceedings, the PUC will consider the reasonableness of the costs, the appropriate period of recovery, any amount of carrying costs thereon, and any savings directly attributable to suspension of disconnects, and other related matters. As part of the order, the PUC prohibits the Utilities from charging late payment fees on past due payments. As the moratorium on customer disconnections ended on May 31, 2021, the Utilities have resumed charging late payment fees in July 2021. Pursuant to PUC orders, the deferral of COVID-19 related costs by the Utilities ended on December 31, 2020. On October 1, 2021, the PUC approved the Utilities’ request to extend the deferral period to December 31, 2021. In December 2021, to keep customers connected and provide some relief to customers experiencing financial difficulty during the pandemic, the Utilities committed to issuing $2 million in bill credits to qualified customers. The Utilities will not seek recovery for the issued bill credits, resulting in a reduction to the cumulative deferred costs. On June 9, 2022, the Utilities filed an application with the PUC, requesting recovery of a portion of the COVID-19 related deferral costs, net of cost savings realized, not to exceed the amount of $27.8 million over three years, from June 2023 through May 2026. Annual requests will be limited to actual costs incurred. On January 25, 2023, the PUC issued an order to modify the procedural schedule to allow more time for more discovery and consideration of the application. As of March 31, 2023, the Utilities have recorded $9.6 million in regulatory assets for deferral of COVID-19 related costs. The updated amounts have been reflected in the Utilities’ First Supplemental Report to the PUC filed on April 28, 2023. Army privatization. On October 30, 2020, the PUC approved Hawaiian Electric’s 50-year contract with the U.S. Army to own, operate and maintain the electric distribution system serving the U.S. Army’s 12 installations on Oahu, including Schofield Barracks, Wheeler Army Airfield, Tripler Army Medical Center, Fort Shafter, and Army housing areas. On March 1, 2022, Hawaiian Electric acquired the Army’s existing distribution system for a purchase price of $14.5 million, and will pay the Army in the form of a monthly credit against the monthly utility services charge over the 50-year term of the contract. The acquisition of additional assets contemplated in the contract, with an estimated value of $4 million, is planned for 2024. Hawaiian Electric took ownership and all responsibilities for operation and maintenance of the system on March 1, 2022 for a 50-year term after a one-year transition period. Under the contract, Hawaiian Electric will make initial capital upgrades over the first six years of the contract and replace aging infrastructure over the 50-year term. In addition to its regular monthly electricity bill, the Army will pay Hawaiian Electric a monthly utility services charge to cover operations and maintenance expenses and provide recovery for capital upgrades, capital replacements, and the existing distribution system based on a rate of return determined by the PUC for regulated utility investments, as well as depreciation expense. The PUC requires Hawaiian Electric to file regular periodic reports on the activities and investments in fulfillment of the contract and will review the major projects planned on behalf of the Army. The annual impact on Hawaiian Electric’s earnings is not expected to be material and will depend on a number of factors, including the amount and timing of capital upgrades and capital replacement. Condensed consolidating financial information. Condensed consolidating financial information for Hawaiian Electric and its subsidiaries are presented for the three month periods ended March 31, 2023 and 2022, and as of March 31, 2023 and December 31, 2022. Hawaiian Electric unconditionally guarantees Hawaii Electric Light’s and Maui Electric’s obligations (a) to the State of Hawaii for the repayment of principal and interest on Special Purpose Revenue Bonds issued for the benefit of Hawaii Electric Light and Maui Electric, and (b) under their respective private placement note agreements and the Hawaii Electric Light notes and Maui Electric notes issued thereunder. Hawaiian Electric is also obligated, after the satisfaction of its obligations on its own preferred stock, to make dividend, redemption and liquidation payments on Hawaii Electric Light’s and Maui Electric’s preferred stock if the respective subsidiary is unable to make such payments. Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Income Three months ended March 31, 2023
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Comprehensive Income Three months ended March 31, 2023
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Income Three months ended March 31, 2022
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Comprehensive Income Three months ended March 31, 2022
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Balance Sheet March 31, 2023
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Balance Sheet December 31, 2022
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Changes in Common Stock Equity Three months ended March 31, 2023
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Changes in Common Stock Equity Three months ended March 31, 2022
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Cash Flows Three months ended March 31, 2023
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Cash Flows Three months ended March 31, 2022
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Bank Subsidiary [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank segment | Bank segment Selected financial information American Savings Bank, F.S.B. Statements of Income and Comprehensive Income Data Reconciliation to amounts per HEI Condensed Consolidated Statements of Income*:
American Savings Bank, F.S.B. Balance Sheets Data
Bank-owned life insurance is life insurance purchased by ASB on the lives of certain key employees, with ASB as the beneficiary. The insurance is used to fund employee benefits through tax-free income from increases in the cash value of the policies and insurance proceeds paid to ASB upon an insured’s death. Other borrowings consisted of FHLB advances, borrowings from the Federal Reserve Bank and securities sold under agreements to repurchase. Investment securities. The major components of investment securities were as follows:
* Issued or guaranteed by U.S. Government agencies or sponsored agencies ASB does not believe that the investment securities that were in an unrealized loss position at March 31, 2023 and December 31, 2022, represent a credit loss. Total gross unrealized losses were primarily attributable to change in market conditions. On a quarterly basis the investment securities are evaluated for changes in financial condition of the issuer. Based upon ASB’s evaluation, all securities held within the investment portfolio continue to be rated investment grade by one or more agencies. The contractual cash flows of the U.S. Treasury, federal agency obligations and agency mortgage-backed securities are backed by the full faith and credit guaranty of the United States government or an agency of the government. ASB does not intend to sell the securities before the recovery of its amortized cost basis and there have been no adverse changes in the timing of the contractual cash flows for the securities. ASB’s investment securities portfolio did not require an allowance for credit losses at March 31, 2023 and December 31, 2022. U.S. Treasury, federal agency obligations, corporate bonds, and mortgage revenue bonds have contractual terms to maturity. Mortgage-backed securities have contractual terms to maturity, but require periodic payments to reduce principal. In addition, expected maturities will differ from contractual maturities because borrowers have the right to prepay the underlying mortgages. The contractual maturities of investment securities were as follows:
There were no sales of available-for-sale securities for the quarters ended March 31, 2023 and 2022. The components of loans were summarized as follows:
ASB's policy is to require private mortgage insurance on all real estate loans when the loan-to-value ratio of the property exceeds 80% of the lower of the appraised value or purchase price at origination. For non-owner occupied residential property purchases, the loan-to-value ratio may not exceed 75% of the lower of the appraised value or purchase price at origination. Allowance for credit losses. The allowance for credit losses (balances and changes) by portfolio segment were as follows:
Allowance for loan commitments. The allowance for loan commitments by portfolio segment were as follows:
Credit quality. ASB performs an internal loan review and grading on an ongoing basis. The review provides management with periodic information as to the quality of the loan portfolio and effectiveness of its lending policies and procedures. The objectives of the loan review and grading procedures are to identify, in a timely manner, existing or emerging credit trends so that appropriate steps can be initiated to manage risk and avoid or minimize future losses. Loans subject to grading include commercial, commercial real estate and commercial construction loans. Each commercial and commercial real estate loan is assigned an Asset Quality Rating (AQR) reflecting the likelihood of repayment or orderly liquidation of that loan transaction pursuant to regulatory credit classifications: Pass, Special Mention, Substandard, Doubtful, and Loss. The AQR is a function of the probability of default model rating, the loss given default, and possible non-model factors which impact the ultimate collectability of the loan such as character of the business owner/guarantor, interim period performance, litigation, tax liens and major changes in business and economic conditions. Pass exposures generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral. Special Mention loans have potential weaknesses that, if left uncorrected, could jeopardize the liquidation of the debt. Substandard loans have well-defined weaknesses that jeopardize the liquidation of the debt and are characterized by the distinct possibility that ASB may sustain some loss. An asset classified Doubtful has the weaknesses of those classified Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. An asset classified Loss is considered uncollectible and has such little value that its continuance as a bankable asset is not warranted. The credit risk profile by vintage date based on payment activity or internally assigned grade for loans was as follows:
Revolving loans converted to term loans during the three months ended March 31, 2023 in the commercial, home equity line of credit and consumer portfolios were $1.2 million, $7.8 million and $1.1 million, respectively. Revolving loans converted to term loans during the three months ended March 31, 2022 in the commercial, home equity line of credit and consumer portfolios were $0.5 million, $4.4 million and $1.0 million, respectively. The credit risk profile based on payment activity for loans was as follows:
The credit risk profile based on nonaccrual loans were as follows:
ASB did not recognize interest on nonaccrual loans for the three months ended March 31, 2023 and 2022. Modifications Made to Borrowers Experiencing Financial Difficulty. The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination. The starting point for the estimate of the allowance for credit losses is historical loan information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. ASB uses a probability of default/loss given default model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made at the time of the modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses, a change to the allowance for credit losses is generally not recorded upon modification. Modifications may include interest rate reductions, interest only payments for an extended period of time, protracted terms such as amortization and maturity beyond the customary length of time found in the normal marketplace, and other actions intended to minimize economic loss and to provide alternatives to foreclosure or repossession of collateral. During the first three months of 2023, no loans received a material modification based on borrower financial difficulty. Troubled debt restructurings. Prior to January 1, 2023, a loan modification was deemed to be a TDR when the borrower is determined to be experiencing financial difficulties and ASB grants a concession it would not otherwise consider. With the adoption of ASU No. 2022-02, accounting guidance for TDRs by creditors is eliminated. Loan refinancing and restructuring guidance is applied to determine whether a modification results in a new loan or a continuation of an existing loan. ASB will continue TDR disclosures for years prior to the adoption of ASU No. 2022-02. The credit risk profile based on loans whose terms have been modified and accruing interest were as follows:
Loans modified as a TDR. There were no loan modifications that occurred during the three months ended March 31, 2022. There were no loans modified in TDRs that experienced a payment default of 90 days or more during the first three months of 2022. If a loan modified in a TDR subsequently defaults, ASB evaluates the loan for further impairment. Based on its evaluation, adjustments may be made in the allocation of the allowance or partial charge-offs may be taken to further write-down the carrying value of the loan. Commitments to lend additional funds to borrowers whose loan terms have been modified in a TDR totaled nil at December 31, 2022. Collateral-dependent loans. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the operation or sale of the collateral. Loans considered collateral-dependent were as follows:
ASB had $3.4 million and $4.2 million of consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure at March 31, 2023 and December 31, 2022, respectively. Mortgage servicing rights (MSRs). In its mortgage banking business, ASB sells residential mortgage loans to government-sponsored entities and other parties, who may issue securities backed by pools of such loans. ASB retains no beneficial interests in these loans other than the servicing rights of certain loans sold. ASB received proceeds from the sale of residential mortgages of $5.7 million and $75.6 million for the three months ended March 31, 2023 and 2022, respectively, and recognized gains on such sales of $0.1 million and $1.1 million for the three months ended March 31, 2023 and 2022, respectively. There were no repurchased mortgage loans for the three months ended March 31, 2023 and 2022. Mortgage servicing fees, a component of other income, net, were $0.9 million for the three months ended March 31, 2023 and 2022. Changes in the carrying value of MSRs were as follows:
Changes related to MSRs were as follows:
ASB capitalizes MSRs acquired upon the sale of mortgage loans with servicing rights retained. On a monthly basis, ASB compares the net carrying value of the MSRs to its fair value to determine if there are any changes to the valuation allowance and/or other-than-temporary impairment for the MSRs. ASB uses a present value cash flow model to estimate the fair value of MSRs. Impairment is recognized through a valuation allowance for each stratum when the carrying amount exceeds fair value, with any associated provision recorded as a component of loan servicing fees included in “Revenues - bank” in the condensed consolidated statements of income. A direct write-down is recorded when the recoverability of the valuation allowance is deemed to be unrecoverable. Key assumptions used in estimating the fair value of ASB’s MSRs used in the impairment analysis were as follows:
The sensitivity analysis of fair value of MSRs to hypothetical adverse changes of 25 and 50 basis points in certain key assumptions was as follows:
The effect of a variation in certain assumptions on fair value is calculated without changing any other assumptions. This analysis typically cannot be extrapolated because the relationship of a change in one key assumption to the changes in the fair value of MSRs typically is not linear. Other borrowings. As of March 31, 2023 and December 31, 2022, ASB had nil and $414.0 million of FHLB advances outstanding, respectively, and borrowings with the Federal Reserve Bank of $550.0 million and nil, respectively. As of March 31, 2023, ASB was in compliance with all FHLB Advances, Pledge and Security Agreement requirements and all requirements to borrow at the Federal Reserve Discount Window Primary Credit Facility under 12 CFR 201.4(a) guidelines. Securities sold under agreements to repurchase are accounted for as financing transactions and the obligations to repurchase these securities are recorded as liabilities in the condensed consolidated balance sheets. ASB pledges investment securities as collateral for securities sold under agreements to repurchase. All such agreements are subject to master netting arrangements, which provide for a conditional right of set-off in case of default by either party; however, ASB presents securities sold under agreements to repurchase on a gross basis in the balance sheet. The following tables present information about the securities sold under agreements to repurchase, including the related collateral received from or pledged to counterparties:
The securities underlying the agreements to repurchase are book-entry securities and were delivered by appropriate entry into the counterparties’ accounts or into segregated tri-party custodial accounts at the FHLB. The securities underlying the agreements to repurchase continue to be reflected in ASB’s asset accounts. Derivative financial instruments. ASB enters into interest rate lock commitments (IRLCs) with borrowers, and forward commitments to sell loans or to-be-announced mortgage-backed securities to investors to hedge against the inherent interest rate and pricing risks associated with selling loans. ASB enters into IRLCs for residential mortgage loans, which commit ASB to lend funds to a potential borrower at a specific interest rate and within a specified period of time. IRLCs that relate to the origination of mortgage loans that will be held for sale are considered derivative financial instruments under applicable accounting guidance. Outstanding IRLCs expose ASB to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The IRLCs are free-standing derivatives which are carried at fair value with changes recorded in mortgage banking income. ASB enters into forward commitments to hedge the interest rate risk for rate locked mortgage applications in process and closed mortgage loans held for sale. These commitments are primarily forward sales of to-be-announced mortgage backed securities. Generally, when mortgage loans are closed, the forward commitment is liquidated and replaced with a mandatory delivery forward sale of the mortgage to a secondary market investor. In some cases, a best-efforts forward sale agreement is utilized as the forward commitment. These commitments are free-standing derivatives which are carried at fair value with changes recorded in mortgage banking income. Changes in the fair value of IRLCs and forward commitments subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time. The notional amount and fair value of ASB’s derivative financial instruments were as follows:
ASB’s derivative financial instruments, their fair values and balance sheet location were as follows:
1 Asset derivatives are included in other assets and liability derivatives are included in other liabilities in the balance sheets. The following table presents ASB’s derivative financial instruments and the amount and location of the net gains or losses recognized in ASB’s statements of income:
Low-Income Housing Tax Credit (LIHTC). ASB’s unfunded commitments to fund its LIHTC investment partnerships were $77.1 million and $70.1 million at March 31, 2023 and December 31, 2022, respectively. These unfunded commitments were unconditional and legally binding and are recorded in other liabilities with a corresponding increase in other assets. As of March 31, 2023, ASB did not have any impairment losses resulting from forfeiture or ineligibility of tax credits or other circumstances related to its LIHTC investment partnerships.
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Credit agreement and changes in debt |
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Credit agreement and changes in debt | Credit agreements and changes in debt On May 14, 2021, HEI and Hawaiian Electric each entered into a separate agreement with a syndicate of nine financial institutions (the HEI Facility and Hawaiian Electric Facility, respectively, and together, the Credit Facilities) to amend and restate their respective previously existing revolving unsecured credit agreements. The $175 million HEI Facility and the $200 million Hawaiian Electric Facility both terminate on May 14, 2026. On February 18, 2022, the PUC approved Hawaiian Electric’s request to extend the term of the $200 million Hawaiian Electric Facility to May 14, 2026. In addition to extending the term, Hawaiian Electric also received PUC approval to exercise its options of two one-year extensions of the commitment termination date and to increase its aggregate revolving commitment amount from $200 million to $275 million, should there be a need. None of the facilities are collateralized. As of March 31, 2023 and December 31, 2022, no amounts were outstanding under the Credit Facilities. The Credit Facilities will be maintained to support each company’s respective short-term commercial paper program, but may be drawn on to meet each company’s respective working capital needs and general corporate purposes. Changes in debt. HEI private placement. On March 16, 2023, HEI entered into a note purchase agreement (HEI NPA) under which HEI has authorized the issue and sale of $100 million of unsecured senior notes that may be drawn on or before June 2, 2023. The proceeds of the notes, when drawn, are expected to be used to refinance the $100 million term loan facility. The terms of the notes are as follows:
Once drawn, interest on the notes is paid semiannually on June 15th and December 15th. The HEI NPA contains certain restrictive financial covenants that are substantially the same as the financial covenants contained in HEI’s revolving unsecured credit facility, as amended. The HEI notes may be prepaid in whole or in part at any time at the prepayment price of the principal amount, together with interest accrued to the date of prepayment plus a “Make-Whole Amount,” as defined in the agreements. HEI term loan. On October 20, 2022, HEI entered into a term loan facility in the aggregate principal amount of $100 million. On December 28, 2022, HEI drew $35 million on the term loan, and on March 31, 2023, HEI drew the remaining $65 million at an initial interest rate of 5.81% for an initial one month interest period. Any borrowings under the facility mature on November 30, 2023. Borrowings under the facility bear interest at Term Secured Overnight Financing Rate (SOFR), as defined in the agreement, plus an applicable margin and a SOFR spread adjustment. The term loan facility contains certain restrictive financial covenants that are substantially the same as the financial covenants contained in the HEI Facility. Utilities private placement. On January 10, 2023, the Utilities executed through a private placement pursuant to separate Note Purchase Agreements (the NPAs), the following unsecured senior notes bearing taxable interest (2023 Notes). The 2023 Notes had a delayed draw feature and the Utilities drew down all the proceeds on February 9, 2023.
The 2023 Notes include substantially the same financial covenants and customary conditions as Hawaiian Electric’s credit agreement. Hawaiian Electric is also a party as guarantor under the NPAs entered into by Hawaii Electric Light and Maui Electric. The Utilities did not obtain any of the proceeds at execution and instead drew down all the proceeds on February 9, 2023. The proceeds were used to finance their respective capital expenditures, repay short-term debt used to finance or refinance capital expenditures and/or reimburse funds used for the payment of capital expenditures. The 2023 Notes may be prepaid in whole or in part at any time at the prepayment price of the principal amount plus a “Make-Whole Amount” as defined in the NPAs.
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Shareholders' equity |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' equity | Shareholders' equity Accumulated other comprehensive income/(loss). Changes in the balances of each component of accumulated other comprehensive income/(loss) (AOCI) were as follows:
Reclassifications out of AOCI were as follows:
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Revenues |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Revenue from contracts with customers. The following tables disaggregate revenues by major source, timing of revenue recognition, and segment:
There are no material contract assets or liabilities associated with revenues from contracts with customers existing at December 31, 2022 or as of March 31, 2023. Accounts receivable and unbilled revenues related to contracts with customers represent an unconditional right to consideration since all performance obligations have been satisfied. These amounts are disclosed as accounts receivable and unbilled revenues, net on HEI’s condensed consolidated balance sheets and customer accounts receivable, net and accrued unbilled revenues, net on Hawaiian Electric’s condensed consolidated balance sheets. As of March 31, 2023, the Company had no material remaining performance obligations due to the nature of the Company’s contracts with its customers. For the Utilities, performance obligations are fulfilled as electricity is delivered to customers. For ASB, fees are recognized when a transaction is completed.
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Retirement benefits |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement benefits | Retirement benefits Defined benefit pension and other postretirement benefit plans information. For the first three months of 2023, the Company contributed $2 million ($2 million by the Utilities) to its pension and other postretirement benefit plans, compared to $10 million ($10 million by the Utilities) in the first three months of 2022. The Company’s current estimate of total contributions to its pension and other postretirement benefit plans in 2023 is $8 million ($8 million by the Utilities), compared to $43 million ($42 million by the Utilities) in 2022. In addition, the Company expects to pay directly $3 million ($1 million by the Utilities) of benefits in 2023, compared to $2 million ($1 million by the Utilities) paid in 2022. The components of net periodic pension costs (NPPC) and net periodic benefit costs (NPBC) for HEI consolidated and Hawaiian Electric consolidated were as follows:
HEI consolidated recorded retirement benefits expense of $11 million ($11 million by the Utilities) in the first three months of 2023 and $12 million ($12 million by the Utilities) in the first three months of 2022 and charged the remaining net periodic benefit cost primarily to electric utility plant. The Utilities have implemented pension and OPEB tracking mechanisms under which all of their retirement benefit expenses (except for executive life and nonqualified pension plan expenses) determined in accordance with GAAP are recovered over time. Under the tracking mechanisms, any actual costs determined in accordance with GAAP that are over/under amounts allowed in rates are charged/credited to a regulatory asset/liability. The regulatory asset/liability for each utility will then be amortized over five years beginning with the respective utility’s next rate case. Defined contribution plans information. For the first three months of 2023 and 2022, the Company’s expenses for its defined contribution plans under the Hawaiian Electric Industries Retirement Savings Plan (HEIRSP) and the ASB 401(k) Plan were $2.7 million and $2.0 million, respectively, and cash contributions were $2.7 million and $1.9 million, respectively. For the first three months of 2023 and 2022, the Utilities’ expenses and cash contributions for its defined contribution plan under the HEIRSP were $1.3 million and $0.9 million, respectively.
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Share-based compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | Share-based compensation Under the 2010 Equity and Incentive Plan, as amended and restated effective March 1,2014 (EIP), HEI can issue shares of common stock as incentive compensation to selected employees in the form of stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares and other share-based and cash-based awards. The original 2010 Equity and Incentive Plan was amended and restated effective March 1, 2014 and an additional 1.5 million shares were added to the shares available for issuance under these programs. As of March 31, 2023, approximately 2.7 million shares remained available for future issuance under the terms of the EIP, assuming recycling of shares withheld to satisfy statutory tax liabilities relating to EIP awards, including an estimated 0.7 million shares that could be issued upon the vesting of outstanding restricted stock units and the achievement of performance goals for awards outstanding under long-term incentive plans (assuming that such performance goals are achieved at maximum levels). Under the 2011 Nonemployee Director Stock Plan (2011 Director Plan), HEI can issue shares of common stock as compensation to nonemployee directors of HEI, Hawaiian Electric and ASB. As of March 31, 2023, there were 207,118 shares remaining available for future issuance under the 2011 Director Plan. Share-based compensation expense and the related income tax benefit were as follows:
1 For the three months ended March 31, 2023 and 2022, the Company has not capitalized any share-based compensation. Stock awards. HEI granted HEI common stock to nonemployee directors under the 2011 Director Plan as follows:
The number of shares issued to each nonemployee director of HEI, Hawaiian Electric and ASB is determined based on the closing price of HEI common stock on the grant date. Restricted stock units. Information about HEI’s grants of restricted stock units was as follows:
(1) Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant. For the three months ended March 31, 2023 and 2022, total restricted stock units and related dividends that vested had a fair value of $3.6 million and $3.9 million, respectively, and the related tax benefits were $0.8 million and $0.6 million, respectively. As of March 31, 2023, there was $7.5 million of total unrecognized compensation cost related to the nonvested restricted stock units. The cost is expected to be recognized over a weighted-average period of 2.2 years. Long-term incentive plan payable in stock. The 2021-23, 2022-24 and 2023-25 long-term incentive plans (LTIP) provide for performance awards under the EIP of shares of HEI common stock based on the satisfaction of performance goals, including a market condition goal. The number of shares of HEI common stock that may be awarded is fixed on the date the grants are made, subject to the achievement of specified performance levels and calculated dividend equivalents. The potential payout varies from 0% to 200% of the number of target shares, depending on the achievement of the goals. The market condition goal is based on HEI’s total shareholder return (TSR) compared to the Peer Group (Edison Electric Institute Index (EEI Index) for the 2021-23 and 2022-24 performance periods, and compared to the Company's compensation peer group consisting of companies in the EEI Index and approved by the Company's Compensation and Human Capital Management Committee for the 2023-25 performance period), in each case over the relevant three-year period. The other performance condition goals relate to EPS growth, cumulative EPS, return on average common equity (ROACE), renewable portfolio standards, carbon emissions reduction, Hawaiian Electric’s net income growth, ASB’s efficiency ratio and strategic initiatives and Pacific Current’s EBITDA growth and return on average invested capital. LTIP linked to TSR. Information about HEI’s LTIP grants linked to TSR was as follows:
(1) Weighted-average grant-date fair value per share determined using a Monte Carlo simulation model. The grant date fair values of the shares were determined using a Monte Carlo simulation model utilizing actual information for the common shares of HEI and the Peer Group for the period from the beginning of the performance period to the grant date and estimated future stock volatility of HEI and the Peer Group over the remaining three-year performance period. The expected stock volatility assumptions for HEI and the Peer Group were based on the three-year historic stock volatility. A dividend assumption is not required for the Monte Carlo simulation because the grant payout includes dividend equivalents and projected returns include the value of reinvested dividends. The following table summarizes the assumptions used to determine the fair value of the LTIP awards linked to TSR and the resulting fair value of LTIP awards granted:
There were no share-based LTIP awards linked to TSR with a vesting date in 2023. For the three months ended March 31, 2022, total vested LTIP awards linked to TSR and related dividends had a fair value of $0.8 million and the related tax benefits were $0.1 million. As of March 31, 2023, there was $2.4 million of total unrecognized compensation cost related to the nonvested performance awards payable in shares linked to TSR. The cost is expected to be recognized over a weighted-average period of 1.7 years. LTIP awards linked to other performance conditions. Information about HEI’s LTIP awards payable in shares linked to other performance conditions was as follows:
(1) Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant. For the three months ended March 31, 2023 and 2022, total vested LTIP awards linked to other performance conditions and related dividends had a fair value of $2.9 million and $3.2 million, respectively, and the related tax benefits were $0.6 million and $0.4 million, respectively. As of March 31, 2023, there was $7.4 million of total unrecognized compensation cost related to the nonvested shares linked to performance conditions other than TSR. The cost is expected to be recognized over a weighted-average period of 1.6 years.
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Income taxes |
3 Months Ended |
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Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The Company’s and the Utilities’ effective tax rates (combined federal and state income tax rates) for the three months ended March 31, 2023 were 21% and 22%, respectively. These rates differed from the combined statutory rates, due primarily to the Utilities’ amortization of excess deferred income taxes related to the provision in the 2017 Tax Cuts and Jobs Act that lowered the federal income tax rate from 35% to 21% and the tax benefits derived from the low income housing tax credit investments. In August 2020, the Internal Revenue Service notified the Company that its 2017 and 2018 income tax returns would be examined. The Company was previously audited every year through 2011, at which time the IRS changed their internal policies regarding audit frequency. The audit is still in progress and the Company has responded to all information requests. The Company has not been notified of any material audit adjustments to date. The Inflation Reduction Act of 2022 (IRA) was signed by President Biden on August 16, 2022. Key provisions under the IRA include a 15% corporate alternative minimum tax (CAMT) imposed on certain large corporations and a 1% excise tax on stock repurchases after December 31, 2022. Based on current interpretation of the law and current guidance available we do not believe HEI will be impacted by the CAMT or stock repurchase excise tax provisions. The IRA also creates new tax credits and enhances others to stimulate investment in renewable energy sources. Certain provisions of the IRA became effective beginning tax year 2023. The Company continues to monitor guidance and assess related tax planning opportunities.
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Cash flows |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash flows | Cash flows
1 The amounts shown represent the market value of common stock issued for director and executive/management compensation and withheld to satisfy statutory tax liabilities.
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Fair value measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements | Fair value measurements Fair value measurement and disclosure valuation methodology. The following are descriptions of the valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for financial instruments not carried at fair value: Short-term borrowings—other than bank. The carrying amount of short-term borrowings approximated fair value because of the short maturity of these instruments. Investment securities. The fair value of ASB’s investment securities is determined quarterly through pricing obtained from independent third-party pricing services or from brokers not affiliated with the trade. Non-binding broker quotes are infrequent and generally occur for new securities that are settled close to the month-end pricing date. The third-party pricing vendors ASB uses for pricing its securities are reputable firms that provide pricing services on a global basis and have processes in place to ensure quality and control. The third-party pricing services use a variety of methods to determine the fair value of securities that fall under Level 2 of ASB’s fair value measurement hierarchy. Among the considerations are quoted prices for similar securities in an active market, yield spreads for similar trades, adjustments for liquidity, size, collateral characteristics, historic and generic prepayment speeds, and other observable market factors. To enhance the robustness of the pricing process, ASB will on a quarterly basis compare its standard third-party vendor’s price with that of another third-party vendor. If the prices are within an acceptable tolerance range, the price of the standard vendor will be accepted. If the variance is beyond the tolerance range, an evaluation will be conducted by ASB and a challenge to the price may be made. Fair value in such cases will be based on the value that best reflects the data and observable characteristics of the security. In all cases, the fair value used will have been independently determined by a third-party pricing vendor or non-affiliated broker. The fair value of the mortgage revenue bonds is estimated using a discounted cash flow model to calculate the present value of future principal and interest payments and, therefore is classified within Level 3 of the valuation hierarchy. Loans held for sale. Residential and commercial loans are carried at the lower of cost or market and are valued using market observable pricing inputs, which are derived from third party loan sales and, therefore, are classified within Level 2 of the valuation hierarchy. Loans held for investment. Fair value of loans held for investment is derived using a discounted cash flow approach which includes an evaluation of the underlying loan characteristics. The valuation model uses loan characteristics which includes product type, maturity dates and the underlying interest rate of the portfolio. This information is input into the valuation models along with various forecast valuation assumptions including prepayment forecasts, to determine the discount rate. These assumptions are derived from internal and third party sources. Since the valuation is derived from model-based techniques, ASB includes loans held for investment within Level 3 of the valuation hierarchy. Collateral dependent loans. Collateral dependent loans have been adjusted to fair value. When a loan is identified as collateral dependent, the Company measures the impairment using the current fair value of the collateral, less selling costs. Depending on the characteristics of a loan, the fair value of collateral is generally estimated by obtaining external appraisals, but in some cases, the value of the collateral may be estimated as having little or no value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. If it is determined that the value of the collateral dependent loan is less than its recorded investment, the Company recognizes this impairment and adjusts the carrying value of the loan to fair value through the allowance for credit losses. Real estate acquired in settlement of loans. Foreclosed assets are initially measured at fair value (less estimated costs to sell) and subsequently measured at the lower of the carrying value or fair value less selling costs. Fair values are generally based upon appraisals or independent market prices that are periodically updated subsequent to classification as real estate owned. Such adjustments typically result in a Level 3 classification of the inputs for determining fair value. ASB estimates the fair value of collateral-dependent loans and real estate owned using the sales comparison approach. Mortgage servicing rights. MSRs are capitalized at fair value based on market data at the time of sale and accounted for in subsequent periods at the lower of amortized cost or fair value. MSRs are evaluated for impairment at each reporting date. ASB's MSRs are stratified based on predominant risk characteristics of the underlying loans including loan type and note rate. For each stratum, fair value is calculated by discounting expected net income streams using discount rates that reflect industry pricing for similar assets. Expected net income streams are estimated based on industry assumptions regarding prepayment expectations and income and expenses associated with servicing residential mortgage loans for others. Impairment is recognized through a valuation allowance for each stratum when the carrying amount exceeds fair value, with any associated provision recorded as a component of loan servicing fees included in “Revenues - bank” in the consolidated statements of income. A direct write-down is recorded when the recoverability of the valuation allowance is deemed to be unrecoverable. ASB compares the fair value of MSRs to an estimated value calculated by an independent third-party. The third-party relies on both published and unpublished sources of market related assumptions and its own experience and expertise to arrive at a value. ASB uses the third-party value only to assess the reasonableness of its own estimate. ASB includes MSRs within Level 3 of the valuation hierarchy. Time deposits. The fair value of fixed-maturity certificates of deposit was estimated by discounting the future cash flows using the rates currently offered for FHLB advances of similar remaining maturities. Deposit liabilities are classified in Level 2 of the valuation hierarchy. Other borrowings. For advances and repurchase agreements, fair value is estimated using quantitative discounted cash flow models that require the use of interest rate inputs that are currently offered for advances and repurchase agreements of similar remaining maturities. The majority of market inputs are actively quoted and can be validated through external sources, including broker market transactions and third party pricing services. Long-term debt—other than bank. Fair value of fixed-rate long-term debt—other than bank was obtained from third-party financial services providers based on the current rates offered for debt of the same or similar remaining maturities and from discounting the future cash flows using the current rates offered for debt of the same or similar risks, terms, and remaining maturities. The carrying amount of floating rate long-term debt—other than bank approximated fair value because of the short-term interest reset periods. Long-term debt—other than bank is classified in Level 2 of the valuation hierarchy. Interest rate lock commitments (IRLCs). The estimated fair value of commitments to originate residential mortgage loans for sale is based on quoted prices for similar loans in active markets. IRLCs are classified as Level 2 measurements. Forward sales commitments. To be announced (TBA) mortgage-backed securities forward commitments are classified as Level 1, and consist of publicly-traded debt securities for which identical fair values can be obtained through quoted market prices in active exchange markets. The fair values of ASB’s best efforts and mandatory delivery loan sale commitments are determined using quoted prices in the market place that are observable and are classified as Level 2 measurements. Interest rate swaps. The Company measures its interest rate swaps at fair value. The fair values of the Company's interest rate swaps are based on the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs. The fair values of the Company's interest rate swaps are classified as a Level 2 measurements. The following table presents the carrying or notional amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments.
Fair value measurements on a recurring basis. Assets and liabilities measured at fair value on a recurring basis were as follows:
1 Derivatives are carried at fair value in other assets or other liabilities in the balance sheets with changes in value included in mortgage banking income. 2 Derivatives are included in other assets and other liabilities in the balance sheets. There were no transfers of financial assets and liabilities between Level 1 and Level 2 of the fair value hierarchy during the three months ended March 31, 2023 and 2022. The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:
Mortgage revenue bonds are issued by the Department of Budget and Finance of the State of Hawaii. The Company estimates the fair value by using a discounted cash flow model to calculate the present value of estimated future principal and interest payments. The unobservable input used in the fair value measurement is the weighted average discount rate. As of March 31, 2023, the weighted average discount rate was 5.07%, which was derived by incorporating a credit spread over the one month LIBOR rate. Significant increases (decreases) in the weighted average discount rate could result in a significantly lower (higher) fair value measurement. Fair value measurements on a nonrecurring basis. Certain assets and liabilities are measured at fair value on a nonrecurring basis and therefore are not included in the tables above. These measurements primarily result from assets carried at the lower of cost or fair value or from impairment of individual assets. As of March 31, 2023 and December 31, 2022, there were no financial instruments measured at fair value on a nonrecurring basis. For the three months ended March 31, 2023 and 2022, there were no adjustments to fair value for ASB’s loans held for sale.
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Basis of presentation (Policies) |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, the instructions to SEC Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In preparing the unaudited condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenues and expenses for the period. Actual results could differ significantly from those estimates. |
Recent accounting pronouncements | Recent accounting pronouncements. Credit Losses. In March 2022, Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures,” which eliminates the accounting guidance for Troubled Debt Restructurings (TDRs) by creditors in Subtopic 310-40, Receivables-Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. The amendments in this update also require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, “Financial Instruments-Credit Losses-Measured at Amortized Cost.” Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 325-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit-quality indicator and class of financing receivable by year of origination. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. ASB updated the accounting for certain loan refinancings and restructurings, and included the required disclosures in the Notes herein in accordance with ASU No. 2022-02.
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Troubled debt restructurings | Troubled debt restructurings. Prior to January 1, 2023, a loan modification was deemed to be a TDR when the borrower is determined to be experiencing financial difficulties and ASB grants a concession it would not otherwise consider. With the adoption of ASU No. 2022-02, accounting guidance for TDRs by creditors is eliminated. Loan refinancing and restructuring guidance is applied to determine whether a modification results in a new loan or a continuation of an existing loan. ASB will continue TDR disclosures for years prior to the adoption of ASU No. 2022-02. |
Fair value measurements | The following are descriptions of the valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for financial instruments not carried at fair value: Short-term borrowings—other than bank. The carrying amount of short-term borrowings approximated fair value because of the short maturity of these instruments. Investment securities. The fair value of ASB’s investment securities is determined quarterly through pricing obtained from independent third-party pricing services or from brokers not affiliated with the trade. Non-binding broker quotes are infrequent and generally occur for new securities that are settled close to the month-end pricing date. The third-party pricing vendors ASB uses for pricing its securities are reputable firms that provide pricing services on a global basis and have processes in place to ensure quality and control. The third-party pricing services use a variety of methods to determine the fair value of securities that fall under Level 2 of ASB’s fair value measurement hierarchy. Among the considerations are quoted prices for similar securities in an active market, yield spreads for similar trades, adjustments for liquidity, size, collateral characteristics, historic and generic prepayment speeds, and other observable market factors. To enhance the robustness of the pricing process, ASB will on a quarterly basis compare its standard third-party vendor’s price with that of another third-party vendor. If the prices are within an acceptable tolerance range, the price of the standard vendor will be accepted. If the variance is beyond the tolerance range, an evaluation will be conducted by ASB and a challenge to the price may be made. Fair value in such cases will be based on the value that best reflects the data and observable characteristics of the security. In all cases, the fair value used will have been independently determined by a third-party pricing vendor or non-affiliated broker. The fair value of the mortgage revenue bonds is estimated using a discounted cash flow model to calculate the present value of future principal and interest payments and, therefore is classified within Level 3 of the valuation hierarchy. Loans held for sale. Residential and commercial loans are carried at the lower of cost or market and are valued using market observable pricing inputs, which are derived from third party loan sales and, therefore, are classified within Level 2 of the valuation hierarchy. Loans held for investment. Fair value of loans held for investment is derived using a discounted cash flow approach which includes an evaluation of the underlying loan characteristics. The valuation model uses loan characteristics which includes product type, maturity dates and the underlying interest rate of the portfolio. This information is input into the valuation models along with various forecast valuation assumptions including prepayment forecasts, to determine the discount rate. These assumptions are derived from internal and third party sources. Since the valuation is derived from model-based techniques, ASB includes loans held for investment within Level 3 of the valuation hierarchy. Collateral dependent loans. Collateral dependent loans have been adjusted to fair value. When a loan is identified as collateral dependent, the Company measures the impairment using the current fair value of the collateral, less selling costs. Depending on the characteristics of a loan, the fair value of collateral is generally estimated by obtaining external appraisals, but in some cases, the value of the collateral may be estimated as having little or no value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. If it is determined that the value of the collateral dependent loan is less than its recorded investment, the Company recognizes this impairment and adjusts the carrying value of the loan to fair value through the allowance for credit losses. Real estate acquired in settlement of loans. Foreclosed assets are initially measured at fair value (less estimated costs to sell) and subsequently measured at the lower of the carrying value or fair value less selling costs. Fair values are generally based upon appraisals or independent market prices that are periodically updated subsequent to classification as real estate owned. Such adjustments typically result in a Level 3 classification of the inputs for determining fair value. ASB estimates the fair value of collateral-dependent loans and real estate owned using the sales comparison approach. Mortgage servicing rights. MSRs are capitalized at fair value based on market data at the time of sale and accounted for in subsequent periods at the lower of amortized cost or fair value. MSRs are evaluated for impairment at each reporting date. ASB's MSRs are stratified based on predominant risk characteristics of the underlying loans including loan type and note rate. For each stratum, fair value is calculated by discounting expected net income streams using discount rates that reflect industry pricing for similar assets. Expected net income streams are estimated based on industry assumptions regarding prepayment expectations and income and expenses associated with servicing residential mortgage loans for others. Impairment is recognized through a valuation allowance for each stratum when the carrying amount exceeds fair value, with any associated provision recorded as a component of loan servicing fees included in “Revenues - bank” in the consolidated statements of income. A direct write-down is recorded when the recoverability of the valuation allowance is deemed to be unrecoverable. ASB compares the fair value of MSRs to an estimated value calculated by an independent third-party. The third-party relies on both published and unpublished sources of market related assumptions and its own experience and expertise to arrive at a value. ASB uses the third-party value only to assess the reasonableness of its own estimate. ASB includes MSRs within Level 3 of the valuation hierarchy. Time deposits. The fair value of fixed-maturity certificates of deposit was estimated by discounting the future cash flows using the rates currently offered for FHLB advances of similar remaining maturities. Deposit liabilities are classified in Level 2 of the valuation hierarchy. Other borrowings. For advances and repurchase agreements, fair value is estimated using quantitative discounted cash flow models that require the use of interest rate inputs that are currently offered for advances and repurchase agreements of similar remaining maturities. The majority of market inputs are actively quoted and can be validated through external sources, including broker market transactions and third party pricing services. Long-term debt—other than bank. Fair value of fixed-rate long-term debt—other than bank was obtained from third-party financial services providers based on the current rates offered for debt of the same or similar remaining maturities and from discounting the future cash flows using the current rates offered for debt of the same or similar risks, terms, and remaining maturities. The carrying amount of floating rate long-term debt—other than bank approximated fair value because of the short-term interest reset periods. Long-term debt—other than bank is classified in Level 2 of the valuation hierarchy. Interest rate lock commitments (IRLCs). The estimated fair value of commitments to originate residential mortgage loans for sale is based on quoted prices for similar loans in active markets. IRLCs are classified as Level 2 measurements. Forward sales commitments. To be announced (TBA) mortgage-backed securities forward commitments are classified as Level 1, and consist of publicly-traded debt securities for which identical fair values can be obtained through quoted market prices in active exchange markets. The fair values of ASB’s best efforts and mandatory delivery loan sale commitments are determined using quoted prices in the market place that are observable and are classified as Level 2 measurements. Interest rate swaps. The Company measures its interest rate swaps at fair value. The fair values of the Company's interest rate swaps are based on the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs. The fair values of the Company's interest rate swaps are classified as a Level 2 measurements.
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Segment financial information (Tables) |
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Schedule of segment financial information |
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Electric utility segment (Tables) |
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Electric Utility Subsidiary [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of purchases from all IPPs | Purchases from all IPPs were as follows:
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Schedule of net annual incremental amounts proposed to be collected (refunded) | The net incremental amounts between the 2022 fall and 2023 spring revenue reports are shown in the following table. The amounts are to be collected (refunded) from June, 1, 2023 through May 31, 2024 under the RBA rate tariffs, which were included in the 2023 spring revenue report filing.
Note: Columns may not foot due to rounding.
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Schedule of condensed consolidating statements of income | Condensed Consolidating Statement of Income Three months ended March 31, 2023
Condensed Consolidating Statement of Income Three months ended March 31, 2022
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Schedule of condensed consolidating statement of comprehensive income | Condensed Consolidating Statement of Comprehensive Income Three months ended March 31, 2023
Condensed Consolidating Statement of Comprehensive Income Three months ended March 31, 2022
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Schedule of condensed consolidating balance sheet | Condensed Consolidating Balance Sheet March 31, 2023
Condensed Consolidating Balance Sheet December 31, 2022 Balance Sheets Data
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Schedule of condensed consolidating statement of changes in common stock equity | Condensed Consolidating Statement of Changes in Common Stock Equity Three months ended March 31, 2023
Condensed Consolidating Statement of Changes in Common Stock Equity Three months ended March 31, 2022
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Schedule of condensed consolidating statement of cash flows | Condensed Consolidating Statement of Cash Flows Three months ended March 31, 2023
Condensed Consolidating Statement of Cash Flows Three months ended March 31, 2022
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Bank segment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank Subsidiary [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of statements of income data | Condensed Consolidating Statement of Income Three months ended March 31, 2023
Condensed Consolidating Statement of Income Three months ended March 31, 2022
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Schedule of statements of comprehensive income data | Statements of Income and Comprehensive Income Data
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Schedule of balance sheets data | Condensed Consolidating Balance Sheet March 31, 2023
Condensed Consolidating Balance Sheet December 31, 2022 Balance Sheets Data
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Schedule of the book value and aggregate fair value by major security type | The major components of investment securities were as follows:
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Schedule of contractual maturities of available-for-sale securities | The contractual maturities of investment securities were as follows:
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Schedule of components of loans receivable | The components of loans were summarized as follows:
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Schedule of allowance for credit losses | The allowance for credit losses (balances and changes) by portfolio segment were as follows:
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Schedule of allowance for loan commitments | The allowance for loan commitments by portfolio segment were as follows:
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Schedule of credit risk profile by internally assigned grade for loans | The credit risk profile by vintage date based on payment activity or internally assigned grade for loans was as follows:
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Schedule of credit risk profile based on payment activity for loans | The credit risk profile based on payment activity for loans was as follows:
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Schedule of credit risk profile based on nonaccrual loans, accruing loans 90 days or more past due | The credit risk profile based on nonaccrual loans were as follows:
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Schedule of collateral-dependent loans | Loans considered collateral-dependent were as follows:
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Schedule of amortized intangible assets | Changes in the carrying value of MSRs were as follows:
Changes related to MSRs were as follows:
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Schedule of key assumptions used in estimating fair value | Key assumptions used in estimating the fair value of ASB’s MSRs used in the impairment analysis were as follows:
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Schedule of sensitivity analysis of fair value, transferor's interests in transferred financial assets | The sensitivity analysis of fair value of MSRs to hypothetical adverse changes of 25 and 50 basis points in certain key assumptions was as follows:
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Schedule of securities sold under agreements to repurchase | The following tables present information about the securities sold under agreements to repurchase, including the related collateral received from or pledged to counterparties:
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Schedule of notional and fair value of derivatives | The notional amount and fair value of ASB’s derivative financial instruments were as follows:
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Schedule of derivative financial instruments | ASB’s derivative financial instruments, their fair values and balance sheet location were as follows:
1 Asset derivatives are included in other assets and liability derivatives are included in other liabilities in the balance sheets.
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Schedule of derivative financial instruments and net gain or loss | The following table presents ASB’s derivative financial instruments and the amount and location of the net gains or losses recognized in ASB’s statements of income:
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Credit agreement and changes in debt (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of notes |
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Shareholders' equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive income | Changes in the balances of each component of accumulated other comprehensive income/(loss) (AOCI) were as follows:
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Schedule of reclassifications out of accumulated other comprehensive income/(loss) | Reclassifications out of AOCI were as follows:
|
Revenues (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | The following tables disaggregate revenues by major source, timing of revenue recognition, and segment:
|
Retirement benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net periodic benefit cost for consolidated HEI | The components of net periodic pension costs (NPPC) and net periodic benefit costs (NPBC) for HEI consolidated and Hawaiian Electric consolidated were as follows:
|
Share-based compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share-based compensation expense and related income tax benefit | Share-based compensation expense and the related income tax benefit were as follows:
1 For the three months ended March 31, 2023 and 2022, the Company has not capitalized any share-based compensation.
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Schedule of common stock granted to nonemployee directors | HEI granted HEI common stock to nonemployee directors under the 2011 Director Plan as follows:
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Schedule of restricted stock units | Information about HEI’s grants of restricted stock units was as follows:
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Schedule of Long-Term Incentive Plan (LTIP) linked to total return to shareholders | Information about HEI’s LTIP grants linked to TSR was as follows:
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Schedule of Long-Term Incentive Plan assumptions | The following table summarizes the assumptions used to determine the fair value of the LTIP awards linked to TSR and the resulting fair value of LTIP awards granted:
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Schedule of Long-Term Incentive Plan (LTIP) linked to other performance conditions | Information about HEI’s LTIP awards payable in shares linked to other performance conditions was as follows:
|
Cash flows (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of supplemental disclosures of cash and noncash activity |
1 The amounts shown represent the market value of common stock issued for director and executive/management compensation and withheld to satisfy statutory tax liabilities.
|
Fair value measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimated fair values of certain of the Company's financial instruments | The following table presents the carrying or notional amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments.
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Schedule of assets measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis were as follows:
1 Derivatives are carried at fair value in other assets or other liabilities in the balance sheets with changes in value included in mortgage banking income. 2 Derivatives are included in other assets and other liabilities in the balance sheets.
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Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis | The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:
|
Electric utility segment - Unconsolidated variable interest entities (Details) |
3 Months Ended |
---|---|
Mar. 31, 2023
entity
agreement
| |
Power purchase agreement | |
Number of IPPs (in entities) | entity | 2 |
Hawaiian Electric Company | |
Power purchase agreement | |
Number of power purchase agreements (PPAs) (in agreements) | agreement | 4 |
Electric utility segment - Regulatory assets for COVID-19 related costs (Details) - Hawaiian Electric Company, Inc. and Subsidiaries - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Jun. 09, 2022 |
Dec. 31, 2021 |
Mar. 31, 2023 |
|
Regulatory Projects and Legal Obligations [Line Items] | |||
Recovery of deferral costs | $ 27.8 | ||
Recovery of deferral costs period | 3 years | ||
COVID-19 | |||
Regulatory Projects and Legal Obligations [Line Items] | |||
Customer bill forgiveness | $ 2.0 | ||
Public utilities in regulatory assets | $ 9.6 |
Electric utility segment - Army privatization (Details) - Hawaiian Electric Company, Inc. and Subsidiaries $ in Millions |
Mar. 01, 2022
USD ($)
|
Oct. 30, 2020
USD ($)
installation
|
---|---|---|
Regulatory Projects and Legal Obligations [Line Items] | ||
Public utilities, electric distribution system, contract period | 50 years | 50 years |
Number of U.S. army installations being serviced | installation | 12 | |
Purchase price | $ 14.5 | |
price of acquisition, expected | $ 4.0 | |
Transition period | 1 year | |
Capital upgrade over the period | 6 years |
Bank segment - Reconciliation of income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Condensed Income Statements, Captions [Line Items] | ||
Revenues | $ 928,237 | $ 785,068 |
Less: Retirement defined benefits credit—other than service costs | (1,152) | (1,243) |
Total expenses | 834,719 | 685,792 |
Operating income - bank | 93,518 | 99,276 |
Income before income taxes | 70,304 | 87,480 |
American Savings Bank (ASB) | ||
Condensed Income Statements, Captions [Line Items] | ||
Interest and dividend income | 79,479 | 59,989 |
Noninterest income | 14,378 | 16,128 |
Less: Gain on sale of real estate | 0 | 1,002 |
Revenues | 93,857 | 75,115 |
Total interest expense | 14,558 | 952 |
Provision for credit losses | 1,175 | (3,263) |
Noninterest expense | 54,417 | 48,213 |
Less: Retirement defined benefits credit—other than service costs | (187) | (185) |
Total expenses | 70,337 | 45,085 |
Operating income - bank | 23,520 | 30,030 |
Income before income taxes | $ 23,707 | $ 30,215 |
Bank segment - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Allowance for credit losses | |||
Other bank borrowings | $ 680,690 | $ 695,120 | |
American Savings Bank (ASB) | |||
Allowance for credit losses | |||
Minimum benchmark percentage of loan to appraisal ratio which mortgage insurance is required | 80.00% | ||
Minimum benchmark percentage of loan to appraisal ratio on non-owner occupied residential property | 75.00% | ||
Advances from the FHLB | $ 0 | 414,000 | |
American Savings Bank (ASB) | Federal Reserve Bank Advances | |||
Allowance for credit losses | |||
Other bank borrowings | 550,000 | $ 0 | |
Home equity line of credit | |||
Allowance for credit losses | |||
Conversion of debt | 7,800 | $ 4,400 | |
Commercial | |||
Allowance for credit losses | |||
Conversion of debt | 1,200 | 500 | |
Consumer | |||
Allowance for credit losses | |||
Conversion of debt | $ 1,100 | $ 1,000 |
Bank segment - Allowance for loan commitments (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Allowance for loan commitments: | ||
Beginning balance | $ 4,400 | $ 4,900 |
Provision | 0 | 500 |
Ending balance | 4,400 | 5,400 |
Real estate | Home equity line of credit | ||
Allowance for loan commitments: | ||
Beginning balance | 400 | 400 |
Provision | 0 | 0 |
Ending balance | 400 | 400 |
Real estate | Commercial construction | ||
Allowance for loan commitments: | ||
Beginning balance | 2,600 | 3,700 |
Provision | 0 | (100) |
Ending balance | 2,600 | 3,600 |
Commercial | ||
Allowance for loan commitments: | ||
Beginning balance | 1,400 | 800 |
Provision | 0 | 600 |
Ending balance | $ 1,400 | $ 1,400 |
Bank segment - Troubled debt restructuring - narrative (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|
Financing Receivable, Impaired [Line Items] | |||
Consumer mortgage loans collateralized by residential real estate property in foreclosure process | $ 3,400,000 | $ 4,200,000 | |
Troubled debt restructurings real estate loans | |||
Financing Receivable, Impaired [Line Items] | |||
Financing receivable modifications minimum, period of payment default of loans determined to be TDRs (in days) | 90 days | ||
Commitments to lend additional funds to borrows with impaired or modified loans | $ 0 |
Bank segment - Collateral-dependent loans (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Residential real estate property | Real estate | Residential 1-4 family | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral-dependent loans, amortized cost | $ 2,353 | $ 3,959 |
Residential real estate property | Real estate | Home equity line of credit | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral-dependent loans, amortized cost | 1,237 | 1,425 |
Collateral pledged | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral-dependent loans, amortized cost | $ 3,590 | $ 5,384 |
Bank segment - Other borrowings (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Offsetting Liabilities [Line Items] | ||
Gross amount of recognized liabilities | $ 131.0 | $ 281.0 |
Gross amount offset in the Balance Sheets | 0.0 | 0.0 |
Net amount of liabilities presented in the Balance Sheets | 131.0 | 281.0 |
American Savings Bank (ASB) | ||
Offsetting Liabilities [Line Items] | ||
Advances from the FHLB | 0.0 | 414.0 |
Commercial account holders | ||
Offsetting Liabilities [Line Items] | ||
Net amount of liabilities presented in the Balance Sheets | 131.0 | 281.0 |
Financial instruments | 172.0 | 327.0 |
Cash collateral pledged | $ 0.0 | $ 0.0 |
Bank segment - Contingencies (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
American Savings Bank (ASB) | ||
Loss Contingencies [Line Items] | ||
Unfunded commitments to fund the company's LIHTC | $ 77.1 | $ 70.1 |
Credit agreement and changes in debt - Narrative (Details) |
Feb. 18, 2022
USD ($)
extensionOption
|
Mar. 31, 2023
USD ($)
|
Mar. 16, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
Dec. 28, 2022
USD ($)
|
Oct. 20, 2022
USD ($)
|
May 14, 2021
USD ($)
institution
|
---|---|---|---|---|---|---|---|
HEI Facility | |||||||
Credit agreement | |||||||
Credit agreement | $ 175,000,000 | ||||||
HEI Facility | Senior Notes | |||||||
Credit agreement | |||||||
Aggregate principal amount | $ 100,000,000 | ||||||
Hawaiian Electric Company, Inc. and Subsidiaries | Credit Facilities | |||||||
Credit agreement | |||||||
Number of financial institutions | institution | 9 | ||||||
Credit agreement | $ 0 | $ 0 | |||||
Hawaiian Electric Company, Inc. and Subsidiaries | Hawaiian Electric Facility | |||||||
Credit agreement | |||||||
Credit agreement | $ 275,000,000 | $ 200,000,000 | |||||
Number of extension options | extensionOption | 2 | ||||||
Extension period | 1 year | ||||||
Hawaiian Electric, Parent | Term Loan | |||||||
Credit agreement | |||||||
Aggregate principal amount | $ 100,000,000 | ||||||
Line of credit outstanding | $ 65,000,000 | $ 35,000,000 | |||||
Hawaiian Electric, Parent | Term Loan | SOFR | |||||||
Credit agreement | |||||||
Effective interest rate | 5.81% |
Credit agreement and changes in debt - HEI private placement (Details) - Senior Notes |
Mar. 31, 2023
USD ($)
|
---|---|
Series 2023A | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 39,000,000 |
Fixed coupon interest rate | 6.04% |
Series 2023B | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 61,000,000 |
Fixed coupon interest rate | 6.10% |
Share-based compensation - Summary of income taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Share-based compensation | ||
Share-based compensation expense | $ 2.0 | $ 2.1 |
Income tax benefit | 0.3 | 0.3 |
Hawaiian Electric Company, Inc. and Subsidiaries | ||
Share-based compensation | ||
Share-based compensation expense | 0.7 | 0.6 |
Income tax benefit | $ 0.1 | $ 0.1 |
Share-based compensation - 2011 Director Plan (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Share-based compensation | ||
Income tax benefit | $ 0.3 | $ 0.3 |
Common stock | ||
Share-based compensation | ||
Shares granted (in shares) | 1,509 | 0 |
Fair value | $ 0.1 | $ 0.0 |
Income tax benefit | $ 0.0 | $ 0.0 |
Share-based compensation - Fair value assumptions (Details) - LTIP linked to TRS - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk-free interest rate | 4.19% | 1.71% |
Expected life in years | 3 years | 3 years |
Expected volatility | 33.10% | 31.00% |
Range of expected volatility for Peer Group, minimum rate | 28.70% | 25.40% |
Range of expected volatility for Peer Group, maximum rate | 38.80% | 76.70% |
Grant date fair value (in dollars per share) | $ 55.98 | $ 54.92 |
Income taxes (Details) |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Income Tax Contingency [Line Items] | |
Effective income tax, percent | 21.00% |
Hawaiian Electric Company, Inc. and Subsidiaries | |
Income Tax Contingency [Line Items] | |
Effective income tax, percent | 22.00% |
Fair value measurements - Changes in level 3 assets and liabilities (Details) - Mortgage revenue bonds - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 14,902 | $ 15,427 |
Principal payments received | (136) | (131) |
Purchases | 0 | 0 |
Unrealized gain (loss) included in other comprehensive income | 0 | 0 |
Ending balance | $ 14,766 | $ 15,296 |
Fair value measurements - Narrative (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023
USD ($)
|
Mar. 31, 2022
USD ($)
|
|
Fair value measurements on a nonrecurring basis | American Savings Bank (ASB) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjustments to fair value of loans held for sale | $ 0 | $ 0 |
Weighted average discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage revenue bonds, measurement input | 0.0507 |
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