Exact Name of Registrant as
|
|
Commission
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I.R.S. Employer
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Specified in Its Charter
|
|
File Number
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Identification No.
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HAWAIIAN ELECTRIC INDUSTRIES, INC.
|
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1-8503
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99-0208097
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and Principal Subsidiary
|
||||
HAWAIIAN ELECTRIC COMPANY, INC.
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1-4955
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99-0040500
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Hawaiian Electric Industries, Inc. Yes
x
No
o
|
|
Hawaiian Electric Company, Inc. Yes
x
No
o
|
Hawaiian Electric Industries, Inc. Yes
x
No
o
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Hawaiian Electric Company, Inc. Yes
x
No
o
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Hawaiian Electric Industries, Inc.
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Large accelerated filer
x
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Hawaiian Electric Company, Inc.
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Large accelerated filer
o
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Accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Non-accelerated filer
x
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(Do not check if a smaller reporting company)
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Smaller reporting company
o
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Emerging growth company
o
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Emerging growth company
o
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Hawaiian Electric Industries, Inc.
o
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Hawaiian Electric Company, Inc.
o
|
Hawaiian Electric Industries, Inc. Yes
o
No
x
|
|
Hawaiian Electric Company, Inc. Yes
o
No
x
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Class of Common Stock
|
|
Outstanding July 27, 2017
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Hawaiian Electric Industries, Inc. (Without Par Value)
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|
108,785,486 Shares
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Hawaiian Electric Company, Inc. ($6-2/3 Par Value)
|
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16,019,785 Shares (not publicly traded)
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Page No.
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Terms
|
|
Definitions
|
AES Hawaii
|
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AES Hawaii, Inc.
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AFUDC
|
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Allowance for funds used during construction
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AOCI
|
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Accumulated other comprehensive income/(loss)
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ASB
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American Savings Bank, F.S.B., a wholly-owned subsidiary of ASB Hawaii, Inc.
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ASB Hawaii
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ASB Hawaii, Inc. (formerly American Savings Holdings, Inc.), a wholly owned subsidiary of Hawaiian Electric Industries, Inc. and the parent company of American Savings Bank, F.S.B.
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ASU
|
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Accounting Standards Update
|
CIP CT-1
|
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Campbell Industrial Park 110 MW combustion turbine No. 1
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Company
|
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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.; HEI Properties, Inc. (dissolved in 2015 and wound up in 2017); and The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.).
|
Consumer Advocate
|
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Division of Consumer Advocacy, Department of Commerce and Consumer Affairs of the State of Hawaii
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CBRE
|
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Community-based renewable energy
|
DER
|
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Distributed energy resources
|
D&O
|
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Decision and order from the PUC
|
DG
|
|
Distributed generation
|
Dodd-Frank Act
|
|
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
|
DOH
|
|
Department of Health of the State of Hawaii
|
DRIP
|
|
HEI Dividend Reinvestment and Stock Purchase Plan
|
DSM
|
|
Demand-side management
|
ECAC
|
|
Energy cost adjustment clause
|
EIP
|
|
2010 Equity and Incentive Plan, as amended and restated
|
EPA
|
|
Environmental Protection Agency — federal
|
EPS
|
|
Earnings per share
|
ERP/EAM
|
|
Enterprise Resource Planning/Enterprise Asset Management
|
EVE
|
|
Economic value of equity
|
Exchange Act
|
|
Securities Exchange Act of 1934
|
FASB
|
|
Financial Accounting Standards Board
|
FDIC
|
|
Federal Deposit Insurance Corporation
|
federal
|
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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
|
Terms
|
|
Definitions
|
GNMA
|
|
Government National Mortgage Association
|
Hawaii Electric Light
|
|
Hawaii Electric Light Company, Inc., an electric utility subsidiary of Hawaiian Electric Company, Inc.
|
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, HECO Capital Trust III (unconsolidated financing subsidiary), Renewable Hawaii, Inc. and Uluwehiokama Biofuels Corp.
|
HEP
|
|
Hamakua Energy Partners, L.P., successor in interest to Encogen Hawaii, L.P.
|
HEI
|
|
Hawaiian Electric Industries, Inc., direct parent company of Hawaiian Electric Company, Inc., ASB Hawaii, Inc., HEI Properties, Inc. (dissolved in 2015 and wound up in 2017) and The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.)
|
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
|
IPP
|
|
Independent power producer
|
Kalaeloa
|
|
Kalaeloa Partners, L.P.
|
KWH
|
|
Kilowatthour/s (as applicable)
|
LNG
|
|
Liquefied natural gas
|
LTIP
|
|
Long-term incentive plan
|
Maui Electric
|
|
Maui Electric Company, Limited, an electric utility subsidiary of Hawaiian Electric Company, Inc.
|
Merger
|
|
As provided in the Merger Agreement (see below), merger of NEE Acquisition Sub II, Inc. with and into HEI, with HEI surviving, and then merger of HEI with and into NEE Acquisition Sub I, LLC, with NEE Acquisition Sub I, LLC surviving as a wholly owned subsidiary of NextEra Energy, Inc.
|
Merger Agreement
|
|
Agreement and Plan of Merger by and among HEI, NextEra Energy, Inc., NEE Acquisition Sub II, Inc. and NEE Acquisition Sub I, LLC, dated December 3, 2014 and terminated July 16, 2016
|
MPIR
|
|
Major Project Interim Recovery
|
MW
|
|
Megawatt/s (as applicable)
|
NEE
|
|
NextEra Energy, Inc.
|
NEM
|
|
Net energy metering
|
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
|
PPA
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Power purchase agreement
|
PPAC
|
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Purchased power adjustment clause
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PSIPs
|
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Power Supply Improvement Plans
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PUC
|
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Public Utilities Commission of the State of Hawaii
|
PV
|
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Photovoltaic
|
RAM
|
|
Rate adjustment mechanism
|
RBA
|
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Revenue balancing account
|
RFP
|
|
Request for proposals
|
ROACE
|
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Return on average common equity
|
RORB
|
|
Return on rate base
|
RPS
|
|
Renewable portfolio standards
|
SEC
|
|
Securities and Exchange Commission
|
See
|
|
Means the referenced material is incorporated by reference
|
Spin-Off
|
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The previously planned distribution to HEI shareholders of all of the common stock of ASB Hawaii immediately prior to the Merger, which was terminated
|
TDR
|
|
Troubled debt restructuring
|
Trust III
|
|
HECO Capital Trust III
|
Utilities
|
|
Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited
|
VIE
|
|
Variable interest entity
|
•
|
international, national and local economic and political conditions—including the state of the Hawaii tourism, defense and construction industries; the strength or weakness of the Hawaii and continental U.S. real estate markets (including the fair value and/or the actual performance of collateral underlying loans held by ASB, which could result in higher loan loss provisions and write-offs); decisions concerning the extent of the presence of the federal government and military in Hawaii; the implications and potential impacts of U.S. and foreign capital and credit market conditions and federal, state and international responses to those conditions; and the potential impacts of global developments (including global economic conditions and uncertainties; the effects of the United Kingdom’s referendum to withdraw from the European Union; unrest; the conflict in Syria; the effects of changes that have or may occur in U.S. policy, such as with respect to immigration and trade; terrorist acts by ISIS or others; potential conflict or crisis with North Korea; and potential pandemics);
|
•
|
the effects of future actions or inaction of the U.S. government or related agencies, including those related to the U.S. debt ceiling, monetary policy and policy and regulation changes advanced or proposed by President Trump and his administration;
|
•
|
weather and natural disasters (e.g., hurricanes, earthquakes, tsunamis, lightning strikes, lava flows and the potential effects of climate change, such as more severe storms and rising sea levels), including their impact on the Company's and Utilities' operations and the economy;
|
•
|
the timing and extent of changes in interest rates and the shape of the yield curve;
|
•
|
the ability of the Company and the Utilities to access the credit and capital markets (e.g., to obtain commercial paper and other short-term and long-term debt financing, including lines of credit, and, in the case of HEI, to issue common stock) under volatile and challenging market conditions, and the cost of such financings, if available;
|
•
|
the risks inherent in changes in the value of the Company’s pension and other retirement plan assets and ASB’s securities available for sale;
|
•
|
changes in laws, regulations, market conditions and other factors that result in changes in assumptions used to calculate retirement benefits costs and funding requirements;
|
•
|
the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and of the rules and regulations that the Dodd-Frank Act requires to be promulgated;
|
•
|
increasing competition in the banking industry (e.g., increased price competition for deposits, or an outflow of deposits to alternative investments, which may have an adverse impact on ASB’s cost of funds);
|
•
|
the impacts of the termination of the Merger with NextEra Energy, Inc. (NEE) and the resulting loss of NEE’s resources, expertise and support (e.g., financial and technological), including potentially higher costs and longer lead times to increase levels of renewable energy and to complete projects like Enterprise Resource Planning/Enterprise Asset Management (ERP/EAM) and smart grids, and a higher cost of capital;
|
•
|
the potential delay by the Public Utilities Commission of the State of Hawaii (PUC) in considering (and potential disapproval of actual or proposed) renewable energy proposals and related costs; reliance by the Utilities on outside parties such as the state, independent power producers (IPPs) and developers; and uncertainties surrounding technologies, solar power, wind power, biofuels, environmental assessments required to meet renewable portfolio standards (RPS) goals and the impacts of implementation of the renewable energy proposals on future costs of electricity;
|
•
|
the ability of the Utilities to develop, implement and recover the costs of implementing the Utilities’ action plans included in their updated Power Supply Improvement Plans (PSIPs), Demand Response Portfolio Plan, Distributed Generation Interconnection Plan, Grid Modernization Plans, and business model changes, which have been and are continuing to be developed and updated in response to the orders issued by the PUC in April 2014, its April 2014 inclinations on the future of Hawaii’s electric utilities and the vision, business strategies and regulatory policy changes required to align the Utilities’ business model with customer interests and the state’s public policy goals, and subsequent orders of the PUC;
|
•
|
capacity and supply constraints or difficulties, especially if generating units (utility-owned or IPP-owned) fail or measures such as demand-side management (DSM), distributed generation (DG), combined heat and power or other firm capacity supply-side resources fall short of achieving their forecasted benefits or are otherwise insufficient to reduce or meet peak demand;
|
•
|
fuel oil price changes, delivery of adequate fuel by suppliers and the continued availability to the electric utilities of their energy cost adjustment clauses (ECACs);
|
•
|
the continued availability to the electric utilities or modifications of other cost recovery mechanisms, including the purchased power adjustment clauses (PPACs), rate adjustment mechanisms (RAMs) and pension and postretirement benefits other than pensions (OPEB) tracking mechanisms, and the continued decoupling of revenues from sales to mitigate the effects of declining kilowatthour sales;
|
•
|
the impact of fuel price volatility on customer satisfaction and political and regulatory support for the Utilities;
|
•
|
the risks associated with increasing reliance on renewable energy, including the availability and cost of non-fossil fuel supplies for renewable energy generation and the operational impacts of adding intermittent sources of renewable energy to the electric grid;
|
•
|
the growing risk that energy production from renewable generating resources may be curtailed and the interconnection of additional resources will be constrained as more generating resources are added to the Utilities' electric systems and as customers reduce their energy usage;
|
•
|
the ability of IPPs to deliver the firm capacity anticipated in their power purchase agreements (PPAs);
|
•
|
the potential that, as IPP contracts near the end of their terms, there may be less economic incentive for the IPPs to make investments in their units to ensure the availability of their units;
|
•
|
the ability of the Utilities to negotiate, periodically, favorable agreements for significant resources such as fuel supply contracts and collective bargaining agreements;
|
•
|
new technological developments that could affect the operations and prospects of the Utilities and ASB or their competitors;
|
•
|
new technological developments, such as the commercial development of energy storage and microgrids, that could affect the operations of the Utilities;
|
•
|
cyber security risks and the potential for cyber incidents, including potential incidents at HEI, ASB and the Utilities (including at ASB branches and electric utility plants) and incidents at data processing centers they use, to the extent not prevented by intrusion detection and prevention systems, anti-virus software, firewalls and other general information technology controls;
|
•
|
federal, state, county and international governmental and regulatory actions, such as existing, new and changes in laws, rules and regulations applicable to HEI, the Utilities and ASB (including changes in taxation, increases in capital requirements, regulatory policy changes, environmental laws and regulations (including resulting compliance costs and risks of fines and penalties and/or liabilities), the regulation of greenhouse gas emissions, governmental fees and assessments (such as Federal Deposit Insurance Corporation assessments), and potential carbon “cap and trade” legislation that may fundamentally alter costs to produce electricity and accelerate the move to renewable generation);
|
•
|
developments in laws, regulations and policies governing protections for historic, archaeological and cultural sites, and plant and animal species and habitats, as well as developments in the implementation and enforcement of such laws, regulations and policies;
|
•
|
discovery of conditions that may be attributable to historical chemical releases, including any necessary investigation and remediation, and any associated enforcement, litigation or regulatory oversight;
|
•
|
decisions by the PUC in rate cases and other proceedings (including the risks of delays in the timing of decisions, adverse changes in final decisions from interim decisions and the disallowance of project costs as a result of adverse regulatory audit reports or otherwise);
|
•
|
decisions by the PUC and by other agencies and courts on land use, environmental and other permitting issues (such as required corrective actions, restrictions and penalties that may arise, such as with respect to environmental conditions or RPS);
|
•
|
potential enforcement actions by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC) and/or other governmental authorities (such as consent orders, required corrective actions, restrictions and penalties that may arise, for example, with respect to compliance deficiencies under existing or new banking and consumer protection laws and regulations or with respect to capital adequacy);
|
•
|
the ability of the Utilities to recover increasing costs and earn a reasonable return on capital investments not covered by RAMs;
|
•
|
the risks associated with the geographic concentration of HEI’s businesses and ASB’s loans, ASB’s concentration in a single product type (i.e., first mortgages) and ASB’s significant credit relationships (i.e., concentrations of large loans and/or credit lines with certain customers);
|
•
|
changes in accounting principles applicable to HEI, the Utilities and ASB, including the adoption of new U.S. accounting standards, the potential discontinuance of regulatory accounting and the effects of potentially required consolidation of variable interest entities (VIEs) or required capital lease accounting for PPAs with IPPs;
|
•
|
changes by securities rating agencies in their ratings of the securities of HEI and Hawaiian Electric and the results of financing efforts;
|
•
|
faster than expected loan prepayments that can cause an acceleration of the amortization of premiums on loans and investments and the impairment of mortgage-servicing assets of ASB;
|
•
|
changes in ASB’s loan portfolio credit profile and asset quality which may increase or decrease the required level of provision for loan losses, allowance for loan losses and charge-offs;
|
•
|
changes in ASB’s deposit cost or mix which may have an adverse impact on ASB’s cost of funds;
|
•
|
the final outcome of tax positions taken by HEI, the Utilities and ASB;
|
•
|
the risks of suffering losses and incurring liabilities that are uninsured (e.g., damages to the Utilities’ transmission and distribution system and losses from business interruption) or underinsured (e.g., losses not covered as a result of insurance deductibles or other exclusions or exceeding policy limits); and
|
•
|
other risks or uncertainties described elsewhere in this report and in other reports (e.g., “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K) previously and subsequently filed by HEI and/or Hawaiian Electric with the Securities and Exchange Commission (SEC).
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
(in thousands, except per share amounts)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Electric utility
|
|
$
|
556,875
|
|
|
$
|
495,395
|
|
|
$
|
1,075,486
|
|
|
$
|
977,447
|
|
Bank
|
|
75,329
|
|
|
70,749
|
|
|
148,185
|
|
|
139,589
|
|
||||
Other
|
|
77
|
|
|
100
|
|
|
172
|
|
|
168
|
|
||||
Total revenues
|
|
632,281
|
|
|
566,244
|
|
|
1,223,843
|
|
|
1,117,204
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Electric utility
|
|
501,828
|
|
|
424,709
|
|
|
971,501
|
|
|
851,435
|
|
||||
Bank
|
|
50,533
|
|
|
50,525
|
|
|
99,229
|
|
|
99,771
|
|
||||
Other
|
|
4,024
|
|
|
5,555
|
|
|
9,355
|
|
|
11,692
|
|
||||
Total expenses
|
|
556,385
|
|
|
480,789
|
|
|
1,080,085
|
|
|
962,898
|
|
||||
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Electric utility
|
|
55,047
|
|
|
70,686
|
|
|
103,985
|
|
|
126,012
|
|
||||
Bank
|
|
24,796
|
|
|
20,224
|
|
|
48,956
|
|
|
39,818
|
|
||||
Other
|
|
(3,947
|
)
|
|
(5,455
|
)
|
|
(9,183
|
)
|
|
(11,524
|
)
|
||||
Total operating income
|
|
75,896
|
|
|
85,455
|
|
|
143,758
|
|
|
154,306
|
|
||||
Interest expense, net—other than on deposit liabilities and other bank borrowings
|
|
(20,440
|
)
|
|
(17,301
|
)
|
|
(40,008
|
)
|
|
(37,427
|
)
|
||||
Allowance for borrowed funds used during construction
|
|
1,143
|
|
|
760
|
|
|
2,032
|
|
|
1,422
|
|
||||
Allowance for equity funds used during construction
|
|
3,027
|
|
|
1,997
|
|
|
5,426
|
|
|
3,736
|
|
||||
Income before income taxes
|
|
59,626
|
|
|
70,911
|
|
|
111,208
|
|
|
122,037
|
|
||||
Income taxes
|
|
20,492
|
|
|
26,310
|
|
|
37,408
|
|
|
44,611
|
|
||||
Net income
|
|
39,134
|
|
|
44,601
|
|
|
73,800
|
|
|
77,426
|
|
||||
Preferred stock dividends of subsidiaries
|
|
473
|
|
|
473
|
|
|
946
|
|
|
946
|
|
||||
Net income for common stock
|
|
$
|
38,661
|
|
|
$
|
44,128
|
|
|
$
|
72,854
|
|
|
$
|
76,480
|
|
Basic earnings per common share
|
|
$
|
0.36
|
|
|
$
|
0.41
|
|
|
$
|
0.67
|
|
|
$
|
0.71
|
|
Diluted earnings per common share
|
|
$
|
0.36
|
|
|
$
|
0.41
|
|
|
$
|
0.67
|
|
|
$
|
0.71
|
|
Dividends declared per common share
|
|
$
|
0.31
|
|
|
$
|
0.31
|
|
|
$
|
0.62
|
|
|
$
|
0.62
|
|
Weighted-average number of common shares outstanding
|
|
108,750
|
|
|
107,962
|
|
|
108,712
|
|
|
107,791
|
|
||||
Net effect of potentially dilutive shares
|
|
47
|
|
|
171
|
|
|
157
|
|
|
187
|
|
||||
Weighted-average shares assuming dilution
|
|
108,797
|
|
|
108,133
|
|
|
108,869
|
|
|
107,978
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income for common stock
|
|
$
|
38,661
|
|
|
$
|
44,128
|
|
|
$
|
72,854
|
|
|
$
|
76,480
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized gains on available-for-sale investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized gains on available-for-sale investment securities arising during the period, net of taxes of $1,334, $1,925, $1,482 and $6,830, respectively
|
|
2,021
|
|
|
2,916
|
|
|
2,244
|
|
|
10,344
|
|
||||
Reclassification adjustment for net realized gains included in net income, net of taxes of nil, $238, nil and $238, respectively
|
|
—
|
|
|
(360
|
)
|
|
—
|
|
|
(360
|
)
|
||||
Derivatives qualifying as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effective portion of foreign currency hedge net unrealized gains (losses) arising during the period, net of (taxes) benefits of nil, $475, nil and ($163), respectively
|
|
—
|
|
|
(745
|
)
|
|
—
|
|
|
257
|
|
||||
Reclassification adjustment to net income, net of tax benefits of nil, nil, $289 and $35, respectively
|
|
—
|
|
|
—
|
|
|
454
|
|
|
54
|
|
||||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $2,508, $2,362, $5,010 and $4,619, respectively
|
|
3,930
|
|
|
3,698
|
|
|
7,851
|
|
|
7,236
|
|
||||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $2,281, $2,166, $4,582 and $4,218, respectively
|
|
(3,581
|
)
|
|
(3,401
|
)
|
|
(7,194
|
)
|
|
(6,623
|
)
|
||||
Other comprehensive income, net of taxes
|
|
2,370
|
|
|
2,108
|
|
|
3,355
|
|
|
10,908
|
|
||||
Comprehensive income attributable to Hawaiian Electric Industries, Inc.
|
|
$
|
41,031
|
|
|
$
|
46,236
|
|
|
$
|
76,209
|
|
|
$
|
87,388
|
|
(dollars in thousands)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
210,381
|
|
|
$
|
278,452
|
|
Accounts receivable and unbilled revenues, net
|
|
249,539
|
|
|
237,950
|
|
||
Available-for-sale investment securities, at fair value
|
|
1,302,886
|
|
|
1,105,182
|
|
||
Stock in Federal Home Loan Bank, at cost
|
|
11,706
|
|
|
11,218
|
|
||
Loans receivable held for investment, net
|
|
4,688,278
|
|
|
4,683,160
|
|
||
Loans held for sale, at lower of cost or fair value
|
|
5,261
|
|
|
18,817
|
|
||
Property, plant and equipment, net of accumulated depreciation of $2,508,291 and $2,444,348 at June 30, 2017 and December 31, 2016, respectively
|
|
4,726,524
|
|
|
4,603,465
|
|
||
Regulatory assets
|
|
938,277
|
|
|
957,451
|
|
||
Other
|
|
478,763
|
|
|
447,621
|
|
||
Goodwill
|
|
82,190
|
|
|
82,190
|
|
||
Total assets
|
|
$
|
12,693,805
|
|
|
$
|
12,425,506
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
194,755
|
|
|
$
|
143,279
|
|
Interest and dividends payable
|
|
22,124
|
|
|
25,225
|
|
||
Deposit liabilities
|
|
5,724,386
|
|
|
5,548,929
|
|
||
Short-term borrowings—other than bank
|
|
49,789
|
|
|
—
|
|
||
Other bank borrowings
|
|
188,130
|
|
|
192,618
|
|
||
Long-term debt, net—other than bank
|
|
1,618,647
|
|
|
1,619,019
|
|
||
Deferred income taxes
|
|
750,413
|
|
|
728,806
|
|
||
Regulatory liabilities
|
|
431,630
|
|
|
410,693
|
|
||
Contributions in aid of construction
|
|
543,204
|
|
|
543,525
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
|
626,795
|
|
|
638,854
|
|
||
Other
|
|
434,610
|
|
|
473,512
|
|
||
Total liabilities
|
|
10,584,483
|
|
|
10,324,460
|
|
||
Preferred stock of subsidiaries - not subject to mandatory redemption
|
|
34,293
|
|
|
34,293
|
|
||
Commitments and contingencies (Notes 3 and 4)
|
|
|
|
|
|
|
||
Shareholders’ equity
|
|
|
|
|
|
|
||
Preferred stock, no par value, authorized 10,000,000 shares; issued: none
|
|
—
|
|
|
—
|
|
||
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 108,785,486 shares and 108,583,413 shares at June 30, 2017 and December 31, 2016, respectively
|
|
1,660,403
|
|
|
1,660,910
|
|
||
Retained earnings
|
|
444,400
|
|
|
438,972
|
|
||
Accumulated other comprehensive loss, net of tax benefits
|
|
(29,774
|
)
|
|
(33,129
|
)
|
||
Total shareholders’ equity
|
|
2,075,029
|
|
|
2,066,753
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
12,693,805
|
|
|
$
|
12,425,506
|
|
|
|
Common stock
|
|
Retained
|
|
Accumulated
other
comprehensive
|
|
|
|||||||||||
(in thousands)
|
|
Shares
|
|
Amount
|
|
Earnings
|
|
income (loss)
|
|
Total
|
|||||||||
Balance, December 31, 2016
|
|
108,583
|
|
|
$
|
1,660,910
|
|
|
$
|
438,972
|
|
|
$
|
(33,129
|
)
|
|
$
|
2,066,753
|
|
Net income for common stock
|
|
—
|
|
|
—
|
|
|
72,854
|
|
|
—
|
|
|
72,854
|
|
||||
Other comprehensive income, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,355
|
|
|
3,355
|
|
||||
Issuance of common stock, net of expenses
|
|
202
|
|
|
(507
|
)
|
|
—
|
|
|
—
|
|
|
(507
|
)
|
||||
Common stock dividends
|
|
—
|
|
|
—
|
|
|
(67,426
|
)
|
|
—
|
|
|
(67,426
|
)
|
||||
Balance, June 30, 2017
|
|
108,785
|
|
|
$
|
1,660,403
|
|
|
$
|
444,400
|
|
|
$
|
(29,774
|
)
|
|
$
|
2,075,029
|
|
Balance, December 31, 2015
|
|
107,460
|
|
|
$
|
1,629,136
|
|
|
$
|
324,766
|
|
|
$
|
(26,262
|
)
|
|
$
|
1,927,640
|
|
Net income for common stock
|
|
—
|
|
|
—
|
|
|
76,480
|
|
|
—
|
|
|
76,480
|
|
||||
Other comprehensive income, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,908
|
|
|
10,908
|
|
||||
Issuance of common stock, net of expenses
|
|
727
|
|
|
18,002
|
|
|
—
|
|
|
—
|
|
|
18,002
|
|
||||
Common stock dividends
|
|
—
|
|
|
—
|
|
|
(66,848
|
)
|
|
—
|
|
|
(66,848
|
)
|
||||
Balance, June 30, 2016
|
|
108,187
|
|
|
$
|
1,647,138
|
|
|
$
|
334,398
|
|
|
$
|
(15,354
|
)
|
|
$
|
1,966,182
|
|
|
|
Six months ended June 30
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
73,800
|
|
|
$
|
77,426
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
||
Depreciation of property, plant and equipment
|
|
100,062
|
|
|
97,148
|
|
||
Other amortization
|
|
6,101
|
|
|
4,840
|
|
||
Provision for loan losses
|
|
6,741
|
|
|
9,519
|
|
||
Loans receivable originated and purchased, held for sale
|
|
(69,595
|
)
|
|
(98,004
|
)
|
||
Proceeds from sale of loans receivable, held for sale
|
|
79,944
|
|
|
98,457
|
|
||
Deferred income taxes
|
|
17,047
|
|
|
21,738
|
|
||
Share-based compensation expense
|
|
3,285
|
|
|
2,011
|
|
||
Allowance for equity funds used during construction
|
|
(5,426
|
)
|
|
(3,736
|
)
|
||
Other
|
|
246
|
|
|
2,982
|
|
||
Changes in assets and liabilities
|
|
|
|
|
|
|
||
Decrease (increase) in accounts receivable and unbilled revenues, net
|
|
(12,394
|
)
|
|
12,894
|
|
||
Decrease (increase) in fuel oil stock
|
|
(5,962
|
)
|
|
9,644
|
|
||
Decrease (increase) in regulatory assets
|
|
8,179
|
|
|
(11,752
|
)
|
||
Increase in accounts, interest and dividends payable
|
|
55,451
|
|
|
20,837
|
|
||
Change in prepaid and accrued income taxes, tax credits and utility revenue taxes
|
|
(37,954
|
)
|
|
622
|
|
||
Increase in defined benefit pension and other postretirement benefit plans liability
|
|
420
|
|
|
95
|
|
||
Change in other assets and liabilities
|
|
(33,922
|
)
|
|
(18,878
|
)
|
||
Net cash provided by operating activities
|
|
186,023
|
|
|
225,843
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Available-for-sale investment securities purchased
|
|
(295,510
|
)
|
|
(176,598
|
)
|
||
Principal repayments on available-for-sale investment securities
|
|
99,663
|
|
|
102,716
|
|
||
Proceeds from sale of available-for-sale investment securities
|
|
—
|
|
|
16,423
|
|
||
Purchase of stock from Federal Home Loan Bank
|
|
(2,868
|
)
|
|
(2,773
|
)
|
||
Redemption of stock from Federal Home Loan Bank
|
|
2,380
|
|
|
2,233
|
|
||
Net increase in loans held for investment
|
|
(20,326
|
)
|
|
(155,930
|
)
|
||
Proceeds from sale of commercial loans
|
|
13,493
|
|
|
14,105
|
|
||
Proceeds from sale of real estate acquired in settlement of loans
|
|
185
|
|
|
553
|
|
||
Capital expenditures
|
|
(222,246
|
)
|
|
(203,631
|
)
|
||
Contributions in aid of construction
|
|
17,571
|
|
|
16,810
|
|
||
Other
|
|
8,216
|
|
|
1,106
|
|
||
Net cash used in investing activities
|
|
(399,442
|
)
|
|
(384,986
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Net increase in deposit liabilities
|
|
175,457
|
|
|
206,949
|
|
||
Net increase in short-term borrowings with original maturities of three months or less
|
|
49,789
|
|
|
12,922
|
|
||
Net increase (decrease) in retail repurchase agreements
|
|
9,048
|
|
|
(27,158
|
)
|
||
Proceeds from other bank borrowings
|
|
59,500
|
|
|
55,835
|
|
||
Repayments of other bank borrowings
|
|
(73,034
|
)
|
|
(84,369
|
)
|
||
Proceeds from issuance of long-term debt
|
|
265,000
|
|
|
75,000
|
|
||
Repayment of long-term debt and funds transferred for redemption of special purpose revenue bonds
|
|
(265,000
|
)
|
|
(75,000
|
)
|
||
Withheld shares for employee taxes on vested share-based compensation
|
|
(3,787
|
)
|
|
(2,345
|
)
|
||
Net proceeds from issuance of common stock
|
|
—
|
|
|
7,668
|
|
||
Common stock dividends
|
|
(67,426
|
)
|
|
(55,591
|
)
|
||
Preferred stock dividends of subsidiaries
|
|
(946
|
)
|
|
(946
|
)
|
||
Other
|
|
(3,253
|
)
|
|
2,908
|
|
||
Net cash provided by financing activities
|
|
145,348
|
|
|
115,873
|
|
||
Net decrease in cash and cash equivalents
|
|
(68,071
|
)
|
|
(43,270
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
278,452
|
|
|
300,478
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
210,381
|
|
|
$
|
257,208
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues
|
|
$
|
556,875
|
|
|
$
|
495,395
|
|
|
$
|
1,075,486
|
|
|
$
|
977,447
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel oil
|
|
141,259
|
|
|
91,899
|
|
|
285,529
|
|
|
205,639
|
|
||||
Purchased power
|
|
153,067
|
|
|
139,058
|
|
|
280,191
|
|
|
254,917
|
|
||||
Other operation and maintenance
|
|
106,374
|
|
|
99,563
|
|
|
206,614
|
|
|
203,471
|
|
||||
Depreciation
|
|
48,156
|
|
|
46,760
|
|
|
96,372
|
|
|
93,541
|
|
||||
Taxes, other than income taxes
|
|
52,972
|
|
|
47,429
|
|
|
102,795
|
|
|
93,867
|
|
||||
Total expenses
|
|
501,828
|
|
|
424,709
|
|
|
971,501
|
|
|
851,435
|
|
||||
Operating income
|
|
55,047
|
|
|
70,686
|
|
|
103,985
|
|
|
126,012
|
|
||||
Allowance for equity funds used during construction
|
|
3,027
|
|
|
1,997
|
|
|
5,426
|
|
|
3,736
|
|
||||
Interest expense and other charges, net
|
|
(18,214
|
)
|
|
(15,103
|
)
|
|
(35,718
|
)
|
|
(32,411
|
)
|
||||
Allowance for borrowed funds used during construction
|
|
1,143
|
|
|
760
|
|
|
2,032
|
|
|
1,422
|
|
||||
Income before income taxes
|
|
41,003
|
|
|
58,340
|
|
|
75,725
|
|
|
98,759
|
|
||||
Income taxes
|
|
14,860
|
|
|
21,984
|
|
|
27,618
|
|
|
36,537
|
|
||||
Net income
|
|
26,143
|
|
|
36,356
|
|
|
48,107
|
|
|
62,222
|
|
||||
Preferred stock dividends of subsidiaries
|
|
229
|
|
|
229
|
|
|
458
|
|
|
458
|
|
||||
Net income attributable to Hawaiian Electric
|
|
25,914
|
|
|
36,127
|
|
|
47,649
|
|
|
61,764
|
|
||||
Preferred stock dividends of Hawaiian Electric
|
|
270
|
|
|
270
|
|
|
540
|
|
|
540
|
|
||||
Net income for common stock
|
|
$
|
25,644
|
|
|
$
|
35,857
|
|
|
$
|
47,109
|
|
|
$
|
61,224
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income for common stock
|
|
$
|
25,644
|
|
|
$
|
35,857
|
|
|
$
|
47,109
|
|
|
$
|
61,224
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives qualifying as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Effective portion of foreign currency hedge net unrealized gains (losses) arising during the period, net of (taxes) benefits of nil, $475, nil and ($163), respectively
|
|
—
|
|
|
(745
|
)
|
|
—
|
|
|
257
|
|
||||
Reclassification adjustment to net income, net of tax benefits of nil, nil, $289 and nil, respectively
|
|
—
|
|
|
—
|
|
|
454
|
|
|
—
|
|
||||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $2,306, $2,160, $4,610 and $4,221, respectively
|
|
3,621
|
|
|
3,391
|
|
|
7,239
|
|
|
6,627
|
|
||||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $2,281, $2,166, $4,582 and $4,218, respectively
|
|
(3,581
|
)
|
|
(3,401
|
)
|
|
(7,194
|
)
|
|
(6,623
|
)
|
||||
Other comprehensive income (loss), net of taxes
|
|
40
|
|
|
(755
|
)
|
|
499
|
|
|
261
|
|
||||
Comprehensive income attributable to Hawaiian Electric Company, Inc.
|
|
$
|
25,684
|
|
|
$
|
35,102
|
|
|
$
|
47,608
|
|
|
$
|
61,485
|
|
(dollars in thousands, except par value)
|
|
June 30, 2017
|
|
|
December 31, 2016
|
|
||
Assets
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
||||
Utility property, plant and equipment
|
|
|
|
|
|
|
||
Land
|
|
$
|
53,178
|
|
|
$
|
53,153
|
|
Plant and equipment
|
|
6,711,418
|
|
|
6,605,732
|
|
||
Less accumulated depreciation
|
|
(2,430,097
|
)
|
|
(2,369,282
|
)
|
||
Construction in progress
|
|
272,438
|
|
|
211,742
|
|
||
Utility property, plant and equipment, net
|
|
4,606,937
|
|
|
4,501,345
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation of $1,233 as of June 30, 2017 and $1,232 as of December 31, 2016
|
|
7,410
|
|
|
7,407
|
|
||
Total property, plant and equipment, net
|
|
4,614,347
|
|
|
4,508,752
|
|
||
Current assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
42,582
|
|
|
74,286
|
|
||
Customer accounts receivable, net
|
|
126,161
|
|
|
123,688
|
|
||
Accrued unbilled revenues, net
|
|
103,596
|
|
|
91,693
|
|
||
Other accounts receivable, net
|
|
3,684
|
|
|
5,233
|
|
||
Fuel oil stock, at average cost
|
|
72,392
|
|
|
66,430
|
|
||
Materials and supplies, at average cost
|
|
57,099
|
|
|
53,679
|
|
||
Prepayments and other
|
|
36,340
|
|
|
23,100
|
|
||
Regulatory assets
|
|
74,167
|
|
|
66,032
|
|
||
Total current assets
|
|
516,021
|
|
|
504,141
|
|
||
Other long-term assets
|
|
|
|
|
|
|
||
Regulatory assets
|
|
864,110
|
|
|
891,419
|
|
||
Unamortized debt expense
|
|
690
|
|
|
208
|
|
||
Other
|
|
75,987
|
|
|
70,908
|
|
||
Total other long-term assets
|
|
940,787
|
|
|
962,535
|
|
||
Total assets
|
|
$
|
6,071,155
|
|
|
$
|
5,975,428
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
||
Common stock ($6 2/3 par value, authorized 50,000,000 shares; outstanding 16,019,785 shares at June 30, 2017 and December 31, 2016)
|
|
$
|
106,818
|
|
|
$
|
106,818
|
|
Premium on capital stock
|
|
601,486
|
|
|
601,491
|
|
||
Retained earnings
|
|
1,095,025
|
|
|
1,091,800
|
|
||
Accumulated other comprehensive income (loss), net of taxes
|
|
177
|
|
|
(322
|
)
|
||
Common stock equity
|
|
1,803,506
|
|
|
1,799,787
|
|
||
Cumulative preferred stock — not subject to mandatory redemption
|
|
34,293
|
|
|
34,293
|
|
||
Long-term debt, net
|
|
1,318,845
|
|
|
1,319,260
|
|
||
Total capitalization
|
|
3,156,644
|
|
|
3,153,340
|
|
||
Commitments and contingencies (Note 3)
|
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
|
||
Short-term borrowings from non-affiliates
|
|
43,990
|
|
|
—
|
|
||
Accounts payable
|
|
162,375
|
|
|
117,814
|
|
||
Interest and preferred dividends payable
|
|
19,497
|
|
|
22,838
|
|
||
Taxes accrued
|
|
142,263
|
|
|
172,730
|
|
||
Regulatory liabilities
|
|
2,883
|
|
|
3,762
|
|
||
Other
|
|
53,140
|
|
|
55,221
|
|
||
Total current liabilities
|
|
424,148
|
|
|
372,365
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
||
Deferred income taxes
|
|
759,972
|
|
|
733,659
|
|
||
Regulatory liabilities
|
|
428,747
|
|
|
406,931
|
|
||
Unamortized tax credits
|
|
91,386
|
|
|
88,961
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
|
587,718
|
|
|
599,726
|
|
||
Other
|
|
79,336
|
|
|
76,921
|
|
||
Total deferred credits and other liabilities
|
|
1,947,159
|
|
|
1,906,198
|
|
||
Contributions in aid of construction
|
|
543,204
|
|
|
543,525
|
|
||
Total capitalization and liabilities
|
|
$
|
6,071,155
|
|
|
$
|
5,975,428
|
|
|
|
Common stock
|
|
Premium
on
capital
|
|
Retained
|
|
Accumulated
other
comprehensive
|
|
|
|||||||||||||
(in thousands)
|
|
Shares
|
|
Amount
|
|
stock
|
|
earnings
|
|
income (loss)
|
|
Total
|
|||||||||||
Balance, December 31, 2016
|
|
16,020
|
|
|
$
|
106,818
|
|
|
$
|
601,491
|
|
|
$
|
1,091,800
|
|
|
$
|
(322
|
)
|
|
$
|
1,799,787
|
|
Net income for common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,109
|
|
|
—
|
|
|
47,109
|
|
|||||
Other comprehensive income, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
499
|
|
|
499
|
|
|||||
Common stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,884
|
)
|
|
—
|
|
|
(43,884
|
)
|
|||||
Common stock issuance expenses
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Balance, June 30, 2017
|
|
16,020
|
|
|
$
|
106,818
|
|
|
$
|
601,486
|
|
|
$
|
1,095,025
|
|
|
$
|
177
|
|
|
$
|
1,803,506
|
|
Balance, December 31, 2015
|
|
15,805
|
|
|
$
|
105,388
|
|
|
$
|
578,930
|
|
|
$
|
1,043,082
|
|
|
$
|
925
|
|
|
$
|
1,728,325
|
|
Net income for common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,224
|
|
|
—
|
|
|
61,224
|
|
|||||
Other comprehensive income, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
261
|
|
|
261
|
|
|||||
Common stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,800
|
)
|
|
—
|
|
|
(46,800
|
)
|
|||||
Common stock issuance expenses
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Balance, June 30, 2016
|
|
15,805
|
|
|
$
|
105,388
|
|
|
$
|
578,926
|
|
|
$
|
1,057,506
|
|
|
$
|
1,186
|
|
|
$
|
1,743,006
|
|
|
|
Six months ended June 30
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
48,107
|
|
|
$
|
62,222
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
||
Depreciation of property, plant and equipment
|
|
96,372
|
|
|
93,541
|
|
||
Other amortization
|
|
4,262
|
|
|
3,793
|
|
||
Deferred income taxes
|
|
23,599
|
|
|
32,118
|
|
||
Allowance for equity funds used during construction
|
|
(5,426
|
)
|
|
(3,736
|
)
|
||
Other
|
|
1,615
|
|
|
2,982
|
|
||
Changes in assets and liabilities
|
|
|
|
|
|
|
||
Decrease (increase) in accounts receivable
|
|
(1,729
|
)
|
|
16,682
|
|
||
Increase in accrued unbilled revenues
|
|
(11,903
|
)
|
|
(3,215
|
)
|
||
Decrease (increase) in fuel oil stock
|
|
(5,962
|
)
|
|
9,644
|
|
||
Increase in materials and supplies
|
|
(3,420
|
)
|
|
(2,482
|
)
|
||
Decrease (increase) in regulatory assets
|
|
8,179
|
|
|
(677
|
)
|
||
Increase in accounts payable
|
|
51,637
|
|
|
23,427
|
|
||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
|
(40,910
|
)
|
|
(28,192
|
)
|
||
Increase in defined benefit pension and other postretirement benefit plans liability
|
|
302
|
|
|
237
|
|
||
Change in other assets and liabilities
|
|
(14,047
|
)
|
|
(12,220
|
)
|
||
Net cash provided by operating activities
|
|
150,676
|
|
|
194,124
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(202,080
|
)
|
|
(197,332
|
)
|
||
Contributions in aid of construction
|
|
17,571
|
|
|
16,810
|
|
||
Other
|
|
6,250
|
|
|
331
|
|
||
Net cash used in investing activities
|
|
(178,259
|
)
|
|
(180,191
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Common stock dividends
|
|
(43,884
|
)
|
|
(46,800
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
|
(998
|
)
|
|
(998
|
)
|
||
Proceeds from issuance of special purpose revenue bonds
|
|
265,000
|
|
|
—
|
|
||
Funds transferred for redemption of special purpose revenue bonds
|
|
(265,000
|
)
|
|
—
|
|
||
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
|
43,990
|
|
|
36,995
|
|
||
Other
|
|
(3,229
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
|
(4,121
|
)
|
|
(10,803
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
(31,704
|
)
|
|
3,130
|
|
||
Cash and cash equivalents, beginning of period
|
|
74,286
|
|
|
24,449
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
42,582
|
|
|
$
|
27,579
|
|
•
|
Requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income.
|
•
|
Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.
|
•
|
Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables).
|
•
|
Eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost.
|
(in thousands)
|
|
Electric utility
|
|
Bank
|
|
Other
|
|
Total
|
||||||||
Three months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
|
$
|
556,836
|
|
|
$
|
75,329
|
|
|
$
|
116
|
|
|
$
|
632,281
|
|
Intersegment revenues (eliminations)
|
|
39
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
||||
Revenues
|
|
$
|
556,875
|
|
|
$
|
75,329
|
|
|
$
|
77
|
|
|
$
|
632,281
|
|
Income (loss) before income taxes
|
|
$
|
41,003
|
|
|
$
|
24,796
|
|
|
$
|
(6,173
|
)
|
|
$
|
59,626
|
|
Income taxes (benefit)
|
|
14,860
|
|
|
8,063
|
|
|
(2,431
|
)
|
|
20,492
|
|
||||
Net income (loss)
|
|
26,143
|
|
|
16,733
|
|
|
(3,742
|
)
|
|
39,134
|
|
||||
Preferred stock dividends of subsidiaries
|
|
499
|
|
|
—
|
|
|
(26
|
)
|
|
473
|
|
||||
Net income (loss) for common stock
|
|
$
|
25,644
|
|
|
$
|
16,733
|
|
|
$
|
(3,716
|
)
|
|
$
|
38,661
|
|
Six months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
|
$
|
1,075,402
|
|
|
$
|
148,185
|
|
|
$
|
256
|
|
|
$
|
1,223,843
|
|
Intersegment revenues (eliminations)
|
|
84
|
|
|
—
|
|
|
(84
|
)
|
|
—
|
|
||||
Revenues
|
|
$
|
1,075,486
|
|
|
$
|
148,185
|
|
|
$
|
172
|
|
|
$
|
1,223,843
|
|
Income (loss) before income taxes
|
|
$
|
75,725
|
|
|
$
|
48,956
|
|
|
$
|
(13,473
|
)
|
|
$
|
111,208
|
|
Income taxes (benefit)
|
|
27,618
|
|
|
16,410
|
|
|
(6,620
|
)
|
|
37,408
|
|
||||
Net income (loss)
|
|
48,107
|
|
|
32,546
|
|
|
(6,853
|
)
|
|
73,800
|
|
||||
Preferred stock dividends of subsidiaries
|
|
998
|
|
|
—
|
|
|
(52
|
)
|
|
946
|
|
||||
Net income (loss) for common stock
|
|
$
|
47,109
|
|
|
$
|
32,546
|
|
|
$
|
(6,801
|
)
|
|
$
|
72,854
|
|
Total assets (at June 30, 2017)
|
|
$
|
6,071,155
|
|
|
$
|
6,610,877
|
|
|
$
|
11,773
|
|
|
$
|
12,693,805
|
|
Three months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
|
$
|
495,349
|
|
|
$
|
70,749
|
|
|
$
|
146
|
|
|
$
|
566,244
|
|
Intersegment revenues (eliminations)
|
|
46
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
||||
Revenues
|
|
$
|
495,395
|
|
|
$
|
70,749
|
|
|
$
|
100
|
|
|
$
|
566,244
|
|
Income (loss) before income taxes
|
|
$
|
58,340
|
|
|
$
|
20,224
|
|
|
$
|
(7,653
|
)
|
|
$
|
70,911
|
|
Income taxes (benefit)
|
|
21,984
|
|
|
6,939
|
|
|
(2,613
|
)
|
|
26,310
|
|
||||
Net income (loss)
|
|
36,356
|
|
|
13,285
|
|
|
(5,040
|
)
|
|
44,601
|
|
||||
Preferred stock dividends of subsidiaries
|
|
499
|
|
|
—
|
|
|
(26
|
)
|
|
473
|
|
||||
Net income (loss) for common stock
|
|
$
|
35,857
|
|
|
$
|
13,285
|
|
|
$
|
(5,014
|
)
|
|
$
|
44,128
|
|
Six months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
|
$
|
977,394
|
|
|
$
|
139,589
|
|
|
$
|
221
|
|
|
$
|
1,117,204
|
|
Intersegment revenues (eliminations)
|
|
53
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
||||
Revenues
|
|
$
|
977,447
|
|
|
$
|
139,589
|
|
|
$
|
168
|
|
|
$
|
1,117,204
|
|
Income (loss) before income taxes
|
|
$
|
98,759
|
|
|
$
|
39,818
|
|
|
$
|
(16,540
|
)
|
|
$
|
122,037
|
|
Income taxes (benefit)
|
|
36,537
|
|
|
13,860
|
|
|
(5,786
|
)
|
|
44,611
|
|
||||
Net income (loss)
|
|
62,222
|
|
|
25,958
|
|
|
(10,754
|
)
|
|
77,426
|
|
||||
Preferred stock dividends of subsidiaries
|
|
998
|
|
|
—
|
|
|
(52
|
)
|
|
946
|
|
||||
Net income (loss) for common stock
|
|
$
|
61,224
|
|
|
$
|
25,958
|
|
|
$
|
(10,702
|
)
|
|
$
|
76,480
|
|
Total assets (at December 31, 2016)
|
|
$
|
5,975,428
|
|
|
$
|
6,421,357
|
|
|
$
|
28,721
|
|
|
$
|
12,425,506
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Kalaeloa
|
|
$
|
48
|
|
|
$
|
36
|
|
|
$
|
88
|
|
|
$
|
65
|
|
AES Hawaii
|
|
35
|
|
|
36
|
|
|
64
|
|
|
74
|
|
||||
HPOWER
|
|
16
|
|
|
17
|
|
|
33
|
|
|
33
|
|
||||
Puna Geothermal Venture
|
|
10
|
|
|
5
|
|
|
18
|
|
|
12
|
|
||||
HEP
|
|
10
|
|
|
4
|
|
|
17
|
|
|
15
|
|
||||
Other IPPs
1
|
|
34
|
|
|
41
|
|
|
60
|
|
|
56
|
|
||||
Total IPPs
|
|
$
|
153
|
|
|
$
|
139
|
|
|
$
|
280
|
|
|
$
|
255
|
|
1
|
Includes wind power, solar power, feed-in tariff projects and other PPAs.
|
(1)
|
new pricing provisions for future private rooftop photovoltaic (PV) systems,
|
(2)
|
technical standards for advanced inverters,
|
(3)
|
new options for customers including battery-equipped private rooftop PV systems,
|
(4)
|
a pilot time-of-use rate,
|
(5)
|
an improved method of calculating the amount of private rooftop PV that can be safely installed, and
|
(6)
|
a streamlined and standardized PV application process.
|
•
|
Hawaiian Electric's RAM revenues were limited to the RAM Cap in 2015, 2016 and 2017.
|
•
|
Maui Electric's RAM revenues were limited to the RAM Cap in 2015 and 2016; however, the 2017 RAM revenues were below the RAM Cap.
|
•
|
Hawaii Electric Light’s RAM revenues were below the RAM Cap in 2015, 2016 and 2017.
|
•
|
Service reliability performance standards to include: 1) System Average Interruption Duration Index based on the average customer interruption time and 2) System Average Interruption Frequency Index based on the average number of customer interruptions. Target performance for each is based on each utilities’ historical
10
year average performance with a dead band of one standard deviation. The maximum penalty for each is
20 basis points
applied to the common equity share of the rate base approved in the last rate case for each company. However, the maximum penalty for the initial implementation of the approved PIMs would be the
20 basis points
applied to the common equity share of rate base used to determine the 2016 RAM Revenue Adjustment (or approximately
$3 million
for each of the standards in total for the three utilities). The maximum penalty will be updated upon issuance of an interim or final order in a rate case for each company and will remain constant in interim periods. These performance standards have penalties only.
|
•
|
Call Center Performance based on utility call center percentage of calls answered within 30 seconds. Target performance is based on the annual average performance for each utility for the most recent 8 quarters with a dead band of
3%
above and below the target. The maximum penalty or incentive is
8 basis points
applied to the common equity share of the rate base approved in the last rate case for each company, except for the initial implementation which will be
8 basis points
applied to the common equity share of rate base used to determine the 2016 RAM Revenue Adjustment (or approximately
$1.2 million
penalty or incentive in total for the three utilities).
|
($ in millions)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
||||||
2017 Annual incremental RAM adjusted revenues
|
|
$
|
12.7
|
|
|
$
|
3.2
|
|
|
$
|
1.6
|
|
Annual change in accrued earnings sharing credits
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Annual change in accrued RBA balance as of December 31, 2016 (and associated revenue taxes) (refunded)
|
|
$
|
(2.4
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
(0.2
|
)
|
Net annual incremental amount to be collected under the tariffs
|
|
$
|
10.3
|
|
|
$
|
0.7
|
|
|
$
|
1.4
|
|
Impact on typical residential customer monthly bill (in dollars) *
|
|
$
|
0.60
|
|
|
$
|
0.15
|
|
|
$
|
0.79
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
|
$
|
394,414
|
|
|
81,710
|
|
|
80,765
|
|
|
—
|
|
|
(14
|
)
|
|
$
|
556,875
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
|
99,814
|
|
|
14,475
|
|
|
26,970
|
|
|
—
|
|
|
—
|
|
|
141,259
|
|
||
Purchased power
|
|
116,458
|
|
|
23,482
|
|
|
13,127
|
|
|
—
|
|
|
—
|
|
|
153,067
|
|
||
Other operation and maintenance
|
|
70,961
|
|
|
17,558
|
|
|
17,855
|
|
|
—
|
|
|
—
|
|
|
106,374
|
|
||
Depreciation
|
|
32,723
|
|
|
9,686
|
|
|
5,747
|
|
|
—
|
|
|
—
|
|
|
48,156
|
|
||
Taxes, other than income taxes
|
|
37,619
|
|
|
7,702
|
|
|
7,651
|
|
|
—
|
|
|
—
|
|
|
52,972
|
|
||
Total expenses
|
|
357,575
|
|
|
72,903
|
|
|
71,350
|
|
|
—
|
|
|
—
|
|
|
501,828
|
|
||
Operating income
|
|
36,839
|
|
|
8,807
|
|
|
9,415
|
|
|
—
|
|
|
(14
|
)
|
|
55,047
|
|
||
Allowance for equity funds used during construction
|
|
2,659
|
|
|
134
|
|
|
234
|
|
|
—
|
|
|
—
|
|
|
3,027
|
|
||
Equity in earnings of subsidiaries
|
|
7,936
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,936
|
)
|
|
—
|
|
||
Interest expense and other charges, net
|
|
(12,562
|
)
|
|
(2,996
|
)
|
|
(2,670
|
)
|
|
—
|
|
|
14
|
|
|
(18,214
|
)
|
||
Allowance for borrowed funds used during construction
|
|
988
|
|
|
55
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|
1,143
|
|
||
Income before income taxes
|
|
35,860
|
|
|
6,000
|
|
|
7,079
|
|
|
—
|
|
|
(7,936
|
)
|
|
41,003
|
|
||
Income taxes
|
|
9,946
|
|
|
2,235
|
|
|
2,679
|
|
|
—
|
|
|
—
|
|
|
14,860
|
|
||
Net income
|
|
25,914
|
|
|
3,765
|
|
|
4,400
|
|
|
—
|
|
|
(7,936
|
)
|
|
26,143
|
|
||
Preferred stock dividends of subsidiaries
|
|
—
|
|
|
133
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
229
|
|
||
Net income attributable to Hawaiian Electric
|
|
25,914
|
|
|
3,632
|
|
|
4,304
|
|
|
—
|
|
|
(7,936
|
)
|
|
25,914
|
|
||
Preferred stock dividends of Hawaiian Electric
|
|
270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
270
|
|
||
Net income for common stock
|
|
$
|
25,644
|
|
|
3,632
|
|
|
4,304
|
|
|
—
|
|
|
(7,936
|
)
|
|
$
|
25,644
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income for common stock
|
|
$
|
25,644
|
|
|
3,632
|
|
|
4,304
|
|
|
—
|
|
|
(7,936
|
)
|
|
$
|
25,644
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reclassification adjustment to net income, net of tax benefits
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
|
3,621
|
|
|
449
|
|
|
344
|
|
|
—
|
|
|
(793
|
)
|
|
3,621
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
|
(3,581
|
)
|
|
(448
|
)
|
|
(343
|
)
|
|
—
|
|
|
791
|
|
|
(3,581
|
)
|
||
Other comprehensive income (loss), net of taxes
|
|
40
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
(2
|
)
|
|
40
|
|
||
Comprehensive income attributable to common shareholder
|
|
$
|
25,684
|
|
|
3,633
|
|
|
4,305
|
|
|
—
|
|
|
(7,938
|
)
|
|
$
|
25,684
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
|
$
|
347,010
|
|
|
73,652
|
|
|
74,758
|
|
|
—
|
|
|
(25
|
)
|
|
$
|
495,395
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
|
62,234
|
|
|
11,748
|
|
|
17,917
|
|
|
—
|
|
|
—
|
|
|
91,899
|
|
||
Purchased power
|
|
103,062
|
|
|
19,360
|
|
|
16,636
|
|
|
—
|
|
|
—
|
|
|
139,058
|
|
||
Other operation and maintenance
|
|
68,197
|
|
|
15,116
|
|
|
16,250
|
|
|
—
|
|
|
—
|
|
|
99,563
|
|
||
Depreciation
|
|
31,522
|
|
|
9,449
|
|
|
5,789
|
|
|
—
|
|
|
—
|
|
|
46,760
|
|
||
Taxes, other than income taxes
|
|
33,414
|
|
|
6,905
|
|
|
7,110
|
|
|
—
|
|
|
—
|
|
|
47,429
|
|
||
Total expenses
|
|
298,429
|
|
|
62,578
|
|
|
63,702
|
|
|
—
|
|
|
—
|
|
|
424,709
|
|
||
Operating income
|
|
48,581
|
|
|
11,074
|
|
|
11,056
|
|
|
—
|
|
|
(25
|
)
|
|
70,686
|
|
||
Allowance for equity funds used during construction
|
|
1,559
|
|
|
206
|
|
|
232
|
|
|
—
|
|
|
—
|
|
|
1,997
|
|
||
Equity in earnings of subsidiaries
|
|
10,883
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,883
|
)
|
|
—
|
|
||
Interest expense and other charges, net
|
|
(10,345
|
)
|
|
(2,669
|
)
|
|
(2,114
|
)
|
|
—
|
|
|
25
|
|
|
(15,103
|
)
|
||
Allowance for borrowed funds used during construction
|
|
587
|
|
|
79
|
|
|
94
|
|
|
—
|
|
|
—
|
|
|
760
|
|
||
Income before income taxes
|
|
51,265
|
|
|
8,690
|
|
|
9,268
|
|
|
—
|
|
|
(10,883
|
)
|
|
58,340
|
|
||
Income taxes
|
|
15,138
|
|
|
3,337
|
|
|
3,509
|
|
|
—
|
|
|
—
|
|
|
21,984
|
|
||
Net income
|
|
36,127
|
|
|
5,353
|
|
|
5,759
|
|
|
—
|
|
|
(10,883
|
)
|
|
36,356
|
|
||
Preferred stock dividends of subsidiaries
|
|
—
|
|
|
133
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
229
|
|
||
Net income attributable to Hawaiian Electric
|
|
36,127
|
|
|
5,220
|
|
|
5,663
|
|
|
—
|
|
|
(10,883
|
)
|
|
36,127
|
|
||
Preferred stock dividends of Hawaiian Electric
|
|
270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
270
|
|
||
Net income for common stock
|
|
$
|
35,857
|
|
|
5,220
|
|
|
5,663
|
|
|
—
|
|
|
(10,883
|
)
|
|
$
|
35,857
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income
for common stock
|
|
$
|
35,857
|
|
|
5,220
|
|
|
5,663
|
|
|
—
|
|
|
(10,883
|
)
|
|
$
|
35,857
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Effective portion of foreign currency hedge net unrealized loss, net of tax benefits
|
|
(745
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(745
|
)
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
|
3,391
|
|
|
401
|
|
|
357
|
|
|
—
|
|
|
(758
|
)
|
|
3,391
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
|
(3,401
|
)
|
|
(402
|
)
|
|
(359
|
)
|
|
—
|
|
|
761
|
|
|
(3,401
|
)
|
||
Other comprehensive income (loss), net of taxes
|
|
(755
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
3
|
|
|
(755
|
)
|
||
Comprehensive income attributable to common shareholder
|
|
$
|
35,102
|
|
|
5,219
|
|
|
5,661
|
|
|
—
|
|
|
(10,880
|
)
|
|
$
|
35,102
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
|
$
|
757,257
|
|
|
160,692
|
|
|
157,558
|
|
|
—
|
|
|
(21
|
)
|
|
$
|
1,075,486
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
|
197,815
|
|
|
31,732
|
|
|
55,982
|
|
|
—
|
|
|
—
|
|
|
285,529
|
|
||
Purchased power
|
|
216,605
|
|
|
42,071
|
|
|
21,515
|
|
|
—
|
|
|
—
|
|
|
280,191
|
|
||
Other operation and maintenance
|
|
138,239
|
|
|
33,074
|
|
|
35,301
|
|
|
—
|
|
|
—
|
|
|
206,614
|
|
||
Depreciation
|
|
65,445
|
|
|
19,371
|
|
|
11,556
|
|
|
—
|
|
|
—
|
|
|
96,372
|
|
||
Taxes, other than income taxes
|
|
72,659
|
|
|
15,152
|
|
|
14,984
|
|
|
—
|
|
|
—
|
|
|
102,795
|
|
||
Total expenses
|
|
690,763
|
|
|
141,400
|
|
|
139,338
|
|
|
—
|
|
|
—
|
|
|
971,501
|
|
||
Operating income
|
|
66,494
|
|
|
19,292
|
|
|
18,220
|
|
|
—
|
|
|
(21
|
)
|
|
103,985
|
|
||
Allowance for equity funds used during construction
|
|
4,715
|
|
|
249
|
|
|
462
|
|
|
—
|
|
|
—
|
|
|
5,426
|
|
||
Equity in earnings of subsidiaries
|
|
16,539
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,539
|
)
|
|
—
|
|
||
Interest expense and other charges, net
|
|
(24,619
|
)
|
|
(6,000
|
)
|
|
(5,120
|
)
|
|
—
|
|
|
21
|
|
|
(35,718
|
)
|
||
Allowance for borrowed funds used during construction
|
|
1,737
|
|
|
100
|
|
|
195
|
|
|
—
|
|
|
—
|
|
|
2,032
|
|
||
Income before income taxes
|
|
64,866
|
|
|
13,641
|
|
|
13,757
|
|
|
—
|
|
|
(16,539
|
)
|
|
75,725
|
|
||
Income taxes
|
|
17,217
|
|
|
5,158
|
|
|
5,243
|
|
|
—
|
|
|
—
|
|
|
27,618
|
|
||
Net income
|
|
47,649
|
|
|
8,483
|
|
|
8,514
|
|
|
—
|
|
|
(16,539
|
)
|
|
48,107
|
|
||
Preferred stock dividends of subsidiaries
|
|
—
|
|
|
267
|
|
|
191
|
|
|
—
|
|
|
—
|
|
|
458
|
|
||
Net income attributable to Hawaiian Electric
|
|
47,649
|
|
|
8,216
|
|
|
8,323
|
|
|
—
|
|
|
(16,539
|
)
|
|
47,649
|
|
||
Preferred stock dividends of Hawaiian Electric
|
|
540
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
540
|
|
||
Net income for common stock
|
|
$
|
47,109
|
|
|
8,216
|
|
|
8,323
|
|
|
—
|
|
|
(16,539
|
)
|
|
$
|
47,109
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income for common stock
|
|
$
|
47,109
|
|
|
8,216
|
|
|
8,323
|
|
|
—
|
|
|
(16,539
|
)
|
|
$
|
47,109
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Derivatives qualifying as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reclassification adjustment to net income, net of tax benefits
|
|
454
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
454
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
|
7,239
|
|
|
952
|
|
|
810
|
|
|
—
|
|
|
(1,762
|
)
|
|
7,239
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
|
(7,194
|
)
|
|
(951
|
)
|
|
(810
|
)
|
|
—
|
|
|
1,761
|
|
|
(7,194
|
)
|
||
Other comprehensive income (loss), net of taxes
|
|
499
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
499
|
|
||
Comprehensive income attributable to common shareholder
|
|
$
|
47,608
|
|
|
8,217
|
|
|
8,323
|
|
|
—
|
|
|
(16,540
|
)
|
|
$
|
47,608
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
|
$
|
684,185
|
|
|
146,835
|
|
|
146,464
|
|
|
—
|
|
|
(37
|
)
|
|
$
|
977,447
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
|
136,319
|
|
|
26,122
|
|
|
43,198
|
|
|
—
|
|
|
—
|
|
|
205,639
|
|
||
Purchased power
|
|
194,979
|
|
|
36,157
|
|
|
23,781
|
|
|
—
|
|
|
—
|
|
|
254,917
|
|
||
Other operation and maintenance
|
|
137,755
|
|
|
31,557
|
|
|
34,159
|
|
|
—
|
|
|
—
|
|
|
203,471
|
|
||
Depreciation
|
|
63,044
|
|
|
18,898
|
|
|
11,599
|
|
|
—
|
|
|
—
|
|
|
93,541
|
|
||
Taxes, other than income taxes
|
|
66,098
|
|
|
13,796
|
|
|
13,973
|
|
|
—
|
|
|
—
|
|
|
93,867
|
|
||
Total expenses
|
|
598,195
|
|
|
126,530
|
|
|
126,710
|
|
|
—
|
|
|
—
|
|
|
851,435
|
|
||
Operating income
|
|
85,990
|
|
|
20,305
|
|
|
19,754
|
|
|
—
|
|
|
(37
|
)
|
|
126,012
|
|
||
Allowance for equity funds used during construction
|
|
2,965
|
|
|
333
|
|
|
438
|
|
|
—
|
|
|
—
|
|
|
3,736
|
|
||
Equity in earnings of subsidiaries
|
|
18,812
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,812
|
)
|
|
—
|
|
||
Interest expense and other charges, net
|
|
(22,210
|
)
|
|
(5,634
|
)
|
|
(4,604
|
)
|
|
—
|
|
|
37
|
|
|
(32,411
|
)
|
||
Allowance for borrowed funds used during construction
|
|
1,116
|
|
|
128
|
|
|
178
|
|
|
—
|
|
|
—
|
|
|
1,422
|
|
||
Income before income taxes
|
|
86,673
|
|
|
15,132
|
|
|
15,766
|
|
|
—
|
|
|
(18,812
|
)
|
|
98,759
|
|
||
Income taxes
|
|
24,909
|
|
|
5,683
|
|
|
5,945
|
|
|
—
|
|
|
—
|
|
|
36,537
|
|
||
Net income
|
|
61,764
|
|
|
9,449
|
|
|
9,821
|
|
|
—
|
|
|
(18,812
|
)
|
|
62,222
|
|
||
Preferred stock dividends of subsidiaries
|
|
—
|
|
|
267
|
|
|
191
|
|
|
—
|
|
|
—
|
|
|
458
|
|
||
Net income attributable to Hawaiian Electric
|
|
61,764
|
|
|
9,182
|
|
|
9,630
|
|
|
—
|
|
|
(18,812
|
)
|
|
61,764
|
|
||
Preferred stock dividends of Hawaiian Electric
|
|
540
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
540
|
|
||
Net income for common stock
|
|
$
|
61,224
|
|
|
9,182
|
|
|
9,630
|
|
|
—
|
|
|
(18,812
|
)
|
|
$
|
61,224
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income
for common stock
|
|
$
|
61,224
|
|
|
9,182
|
|
|
9,630
|
|
|
—
|
|
|
(18,812
|
)
|
|
$
|
61,224
|
|
Other comprehensive income, net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Derivatives qualifying as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Effective portion of foreign currency hedge net unrealized gain, net of taxes
|
|
257
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
257
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
|
6,627
|
|
|
859
|
|
|
775
|
|
|
—
|
|
|
(1,634
|
)
|
|
6,627
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
|
(6,623
|
)
|
|
(860
|
)
|
|
(777
|
)
|
|
—
|
|
|
1,637
|
|
|
(6,623
|
)
|
||
Other comprehensive income, net of taxes
|
|
261
|
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
3
|
|
|
261
|
|
||
Comprehensive income attributable to common shareholder
|
|
$
|
61,485
|
|
|
9,181
|
|
|
9,628
|
|
|
—
|
|
|
(18,809
|
)
|
|
$
|
61,485
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consoli-
dating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Land
|
|
$
|
43,971
|
|
|
6,191
|
|
|
3,016
|
|
|
—
|
|
|
—
|
|
|
$
|
53,178
|
|
Plant and equipment
|
|
4,318,460
|
|
|
1,267,529
|
|
|
1,125,429
|
|
|
—
|
|
|
—
|
|
|
6,711,418
|
|
||
Less accumulated depreciation
|
|
(1,423,042
|
)
|
|
(518,266
|
)
|
|
(488,789
|
)
|
|
—
|
|
|
—
|
|
|
(2,430,097
|
)
|
||
Construction in progress
|
|
232,965
|
|
|
16,734
|
|
|
22,739
|
|
|
—
|
|
|
—
|
|
|
272,438
|
|
||
Utility property, plant and equipment, net
|
|
3,172,354
|
|
|
772,188
|
|
|
662,395
|
|
|
—
|
|
|
—
|
|
|
4,606,937
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation
|
|
5,763
|
|
|
115
|
|
|
1,532
|
|
|
—
|
|
|
—
|
|
|
7,410
|
|
||
Total property, plant and equipment, net
|
|
3,178,117
|
|
|
772,303
|
|
|
663,927
|
|
|
—
|
|
|
—
|
|
|
4,614,347
|
|
||
Investment in wholly owned subsidiaries, at equity
|
|
553,764
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(553,764
|
)
|
|
—
|
|
||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
29,988
|
|
|
7,104
|
|
|
5,389
|
|
|
101
|
|
|
—
|
|
|
42,582
|
|
||
Advances to affiliates
|
|
—
|
|
|
4,100
|
|
|
1,000
|
|
|
—
|
|
|
(5,100
|
)
|
|
—
|
|
||
Customer accounts receivable, net
|
|
88,614
|
|
|
18,847
|
|
|
18,700
|
|
|
—
|
|
|
—
|
|
|
126,161
|
|
||
Accrued unbilled revenues, net
|
|
74,640
|
|
|
14,166
|
|
|
14,790
|
|
|
—
|
|
|
—
|
|
|
103,596
|
|
||
Other accounts receivable, net
|
|
9,707
|
|
|
2,471
|
|
|
1,042
|
|
|
—
|
|
|
(9,536
|
)
|
|
3,684
|
|
||
Fuel oil stock, at average cost
|
|
51,489
|
|
|
8,135
|
|
|
12,768
|
|
|
—
|
|
|
—
|
|
|
72,392
|
|
||
Materials and supplies, at average cost
|
|
30,716
|
|
|
8,852
|
|
|
17,531
|
|
|
—
|
|
|
—
|
|
|
57,099
|
|
||
Prepayments and other
|
|
25,695
|
|
|
7,294
|
|
|
3,602
|
|
|
—
|
|
|
(251
|
)
|
|
36,340
|
|
||
Regulatory assets
|
|
65,891
|
|
|
3,981
|
|
|
4,295
|
|
|
—
|
|
|
—
|
|
|
74,167
|
|
||
Total current assets
|
|
376,740
|
|
|
74,950
|
|
|
79,117
|
|
|
101
|
|
|
(14,887
|
)
|
|
516,021
|
|
||
Other long-term assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Regulatory assets
|
|
638,480
|
|
|
119,108
|
|
|
106,522
|
|
|
—
|
|
|
—
|
|
|
864,110
|
|
||
Unamortized debt expense
|
|
497
|
|
|
84
|
|
|
109
|
|
|
—
|
|
|
—
|
|
|
690
|
|
||
Other
|
|
48,164
|
|
|
13,778
|
|
|
14,045
|
|
|
—
|
|
|
—
|
|
|
75,987
|
|
||
Total other long-term assets
|
|
687,141
|
|
|
132,970
|
|
|
120,676
|
|
|
—
|
|
|
—
|
|
|
940,787
|
|
||
Total assets
|
|
$
|
4,795,762
|
|
|
980,223
|
|
|
863,720
|
|
|
101
|
|
|
(568,651
|
)
|
|
$
|
6,071,155
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock equity
|
|
$
|
1,803,506
|
|
|
291,760
|
|
|
261,903
|
|
|
101
|
|
|
(553,764
|
)
|
|
$
|
1,803,506
|
|
Cumulative preferred stock—not subject to mandatory redemption
|
|
22,293
|
|
|
7,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
34,293
|
|
||
Long-term debt, net
|
|
915,208
|
|
|
213,677
|
|
|
189,960
|
|
|
—
|
|
|
—
|
|
|
1,318,845
|
|
||
Total capitalization
|
|
2,741,007
|
|
|
512,437
|
|
|
456,863
|
|
|
101
|
|
|
(553,764
|
)
|
|
3,156,644
|
|
||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Short-term borrowings from non-affiliates
|
|
43,990
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,990
|
|
||
Short-term borrowings from affiliate
|
|
5,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,100
|
)
|
|
—
|
|
||
Accounts payable
|
|
123,986
|
|
|
19,796
|
|
|
18,593
|
|
|
—
|
|
|
—
|
|
|
162,375
|
|
||
Interest and preferred dividends payable
|
|
13,584
|
|
|
3,806
|
|
|
2,113
|
|
|
—
|
|
|
(6
|
)
|
|
19,497
|
|
||
Taxes accrued
|
|
98,156
|
|
|
23,394
|
|
|
20,964
|
|
|
—
|
|
|
(251
|
)
|
|
142,263
|
|
||
Regulatory liabilities
|
|
126
|
|
|
713
|
|
|
2,044
|
|
|
—
|
|
|
—
|
|
|
2,883
|
|
||
Other
|
|
38,964
|
|
|
8,920
|
|
|
14,786
|
|
|
—
|
|
|
(9,530
|
)
|
|
53,140
|
|
||
Total current liabilities
|
|
323,906
|
|
|
56,629
|
|
|
58,500
|
|
|
—
|
|
|
(14,887
|
)
|
|
424,148
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Deferred income taxes
|
|
542,109
|
|
|
111,616
|
|
|
106,023
|
|
|
—
|
|
|
224
|
|
|
759,972
|
|
||
Regulatory liabilities
|
|
297,006
|
|
|
98,844
|
|
|
32,897
|
|
|
—
|
|
|
—
|
|
|
428,747
|
|
||
Unamortized tax credits
|
|
59,537
|
|
|
16,246
|
|
|
15,603
|
|
|
—
|
|
|
—
|
|
|
91,386
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
|
435,614
|
|
|
73,246
|
|
|
78,858
|
|
|
—
|
|
|
—
|
|
|
587,718
|
|
||
Other
|
|
49,798
|
|
|
13,803
|
|
|
15,959
|
|
|
—
|
|
|
(224
|
)
|
|
79,336
|
|
||
Total deferred credits and other liabilities
|
|
1,384,064
|
|
|
313,755
|
|
|
249,340
|
|
|
—
|
|
|
—
|
|
|
1,947,159
|
|
||
Contributions in aid of construction
|
|
346,785
|
|
|
97,402
|
|
|
99,017
|
|
|
—
|
|
|
—
|
|
|
543,204
|
|
||
Total capitalization and liabilities
|
|
$
|
4,795,762
|
|
|
980,223
|
|
|
863,720
|
|
|
101
|
|
|
(568,651
|
)
|
|
$
|
6,071,155
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consoli-
dating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Land
|
|
$
|
43,956
|
|
|
6,181
|
|
|
3,016
|
|
|
—
|
|
|
—
|
|
|
$
|
53,153
|
|
Plant and equipment
|
|
4,241,060
|
|
|
1,255,185
|
|
|
1,109,487
|
|
|
—
|
|
|
—
|
|
|
6,605,732
|
|
||
Less accumulated depreciation
|
|
(1,382,972
|
)
|
|
(507,666
|
)
|
|
(478,644
|
)
|
|
—
|
|
|
—
|
|
|
(2,369,282
|
)
|
||
Construction in progress
|
|
180,194
|
|
|
12,510
|
|
|
19,038
|
|
|
—
|
|
|
—
|
|
|
211,742
|
|
||
Utility property, plant and equipment, net
|
|
3,082,238
|
|
|
766,210
|
|
|
652,897
|
|
|
—
|
|
|
—
|
|
|
4,501,345
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation
|
|
5,760
|
|
|
115
|
|
|
1,532
|
|
|
—
|
|
|
—
|
|
|
7,407
|
|
||
Total property, plant and equipment, net
|
|
3,087,998
|
|
|
766,325
|
|
|
654,429
|
|
|
—
|
|
|
—
|
|
|
4,508,752
|
|
||
Investment in wholly owned subsidiaries,
at equity
|
|
550,946
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(550,946
|
)
|
|
—
|
|
||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
61,388
|
|
|
10,749
|
|
|
2,048
|
|
|
101
|
|
|
—
|
|
|
74,286
|
|
||
Advances to affiliates
|
|
—
|
|
|
3,500
|
|
|
10,000
|
|
|
—
|
|
|
(13,500
|
)
|
|
—
|
|
||
Customer accounts receivable, net
|
|
86,373
|
|
|
20,055
|
|
|
17,260
|
|
|
—
|
|
|
—
|
|
|
123,688
|
|
||
Accrued unbilled revenues, net
|
|
65,821
|
|
|
13,564
|
|
|
12,308
|
|
|
—
|
|
|
—
|
|
|
91,693
|
|
||
Other accounts receivable, net
|
|
7,652
|
|
|
2,445
|
|
|
1,416
|
|
|
—
|
|
|
(6,280
|
)
|
|
5,233
|
|
||
Fuel oil stock, at average cost
|
|
47,239
|
|
|
8,229
|
|
|
10,962
|
|
|
—
|
|
|
—
|
|
|
66,430
|
|
||
Materials and supplies, at average cost
|
|
29,928
|
|
|
7,380
|
|
|
16,371
|
|
|
—
|
|
|
—
|
|
|
53,679
|
|
||
Prepayments and other
|
|
16,502
|
|
|
5,352
|
|
|
2,179
|
|
|
—
|
|
|
(933
|
)
|
|
23,100
|
|
||
Regulatory assets
|
|
60,185
|
|
|
3,483
|
|
|
2,364
|
|
|
—
|
|
|
—
|
|
|
66,032
|
|
||
Total current assets
|
|
375,088
|
|
|
74,757
|
|
|
74,908
|
|
|
101
|
|
|
(20,713
|
)
|
|
504,141
|
|
||
Other long-term assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Regulatory assets
|
|
662,232
|
|
|
120,863
|
|
|
108,324
|
|
|
—
|
|
|
—
|
|
|
891,419
|
|
||
Unamortized debt expense
|
|
151
|
|
|
23
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
208
|
|
||
Other
|
|
43,743
|
|
|
13,573
|
|
|
13,592
|
|
|
—
|
|
|
—
|
|
|
70,908
|
|
||
Total other long-term assets
|
|
706,126
|
|
|
134,459
|
|
|
121,950
|
|
|
—
|
|
|
—
|
|
|
962,535
|
|
||
Total assets
|
|
$
|
4,720,158
|
|
|
975,541
|
|
|
851,287
|
|
|
101
|
|
|
(571,659
|
)
|
|
$
|
5,975,428
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock equity
|
|
$
|
1,799,787
|
|
|
291,291
|
|
|
259,554
|
|
|
101
|
|
|
(550,946
|
)
|
|
$
|
1,799,787
|
|
Cumulative preferred stock—not subject to mandatory redemption
|
|
22,293
|
|
|
7,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
34,293
|
|
||
Long-term debt, net
|
|
915,437
|
|
|
213,703
|
|
|
190,120
|
|
|
—
|
|
|
—
|
|
|
1,319,260
|
|
||
Total capitalization
|
|
2,737,517
|
|
|
511,994
|
|
|
454,674
|
|
|
101
|
|
|
(550,946
|
)
|
|
3,153,340
|
|
||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Short-term borrowings from affiliate
|
|
13,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,500
|
)
|
|
—
|
|
||
Accounts payable
|
|
86,369
|
|
|
18,126
|
|
|
13,319
|
|
|
—
|
|
|
—
|
|
|
117,814
|
|
||
Interest and preferred dividends payable
|
|
15,761
|
|
|
4,206
|
|
|
2,882
|
|
|
—
|
|
|
(11
|
)
|
|
22,838
|
|
||
Taxes accrued
|
|
120,176
|
|
|
28,100
|
|
|
25,387
|
|
|
—
|
|
|
(933
|
)
|
|
172,730
|
|
||
Regulatory liabilities
|
|
—
|
|
|
2,219
|
|
|
1,543
|
|
|
—
|
|
|
—
|
|
|
3,762
|
|
||
Other
|
|
41,352
|
|
|
7,637
|
|
|
12,501
|
|
|
—
|
|
|
(6,269
|
)
|
|
55,221
|
|
||
Total current liabilities
|
|
277,158
|
|
|
60,288
|
|
|
55,632
|
|
|
—
|
|
|
(20,713
|
)
|
|
372,365
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred income taxes
|
|
524,433
|
|
|
108,052
|
|
|
100,911
|
|
|
—
|
|
|
263
|
|
|
733,659
|
|
||
Regulatory liabilities
|
|
281,112
|
|
|
93,974
|
|
|
31,845
|
|
|
—
|
|
|
—
|
|
|
406,931
|
|
||
Unamortized tax credits
|
|
57,844
|
|
|
15,994
|
|
|
15,123
|
|
|
—
|
|
|
—
|
|
|
88,961
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
|
444,458
|
|
|
75,005
|
|
|
80,263
|
|
|
—
|
|
|
—
|
|
|
599,726
|
|
||
Other
|
|
49,191
|
|
|
13,024
|
|
|
14,969
|
|
|
—
|
|
|
(263
|
)
|
|
76,921
|
|
||
Total deferred credits and other liabilities
|
|
1,357,038
|
|
|
306,049
|
|
|
243,111
|
|
|
—
|
|
|
—
|
|
|
1,906,198
|
|
||
Contributions in aid of construction
|
|
348,445
|
|
|
97,210
|
|
|
97,870
|
|
|
—
|
|
|
—
|
|
|
543,525
|
|
||
Total capitalization and liabilities
|
|
$
|
4,720,158
|
|
|
975,541
|
|
|
851,287
|
|
|
101
|
|
|
(571,659
|
)
|
|
$
|
5,975,428
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Balance, December 31, 2016
|
|
$
|
1,799,787
|
|
|
291,291
|
|
|
259,554
|
|
|
101
|
|
|
(550,946
|
)
|
|
$
|
1,799,787
|
|
Net income for common stock
|
|
47,109
|
|
|
8,216
|
|
|
8,323
|
|
|
—
|
|
|
(16,539
|
)
|
|
47,109
|
|
||
Other comprehensive income, net of taxes
|
|
499
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
499
|
|
||
Common stock dividends
|
|
(43,884
|
)
|
|
(7,748
|
)
|
|
(5,973
|
)
|
|
—
|
|
|
13,721
|
|
|
(43,884
|
)
|
||
Common stock issuance expenses
|
|
(5
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
(5
|
)
|
||
Balance, June 30, 2017
|
|
$
|
1,803,506
|
|
|
291,760
|
|
|
261,903
|
|
|
101
|
|
|
(553,764
|
)
|
|
$
|
1,803,506
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Balance, December 31, 2015
|
|
$
|
1,728,325
|
|
|
292,702
|
|
|
263,725
|
|
|
101
|
|
|
(556,528
|
)
|
|
$
|
1,728,325
|
|
Net income for common stock
|
|
61,224
|
|
|
9,182
|
|
|
9,630
|
|
|
—
|
|
|
(18,812
|
)
|
|
61,224
|
|
||
Other comprehensive income (loss), net of taxes
|
|
261
|
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
3
|
|
|
261
|
|
||
Common stock dividends
|
|
(46,800
|
)
|
|
(6,604
|
)
|
|
(6,530
|
)
|
|
—
|
|
|
13,134
|
|
|
(46,800
|
)
|
||
Common stock issuance expenses
|
|
(4
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(4
|
)
|
||
Balance, June 30, 2016
|
|
$
|
1,743,006
|
|
|
295,275
|
|
|
266,823
|
|
|
101
|
|
|
(562,199
|
)
|
|
$
|
1,743,006
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
|
$
|
47,649
|
|
|
8,483
|
|
|
8,514
|
|
|
—
|
|
|
(16,539
|
)
|
|
$
|
48,107
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Equity in earnings of subsidiaries
|
|
(16,589
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,539
|
|
|
(50
|
)
|
||
Common stock dividends received from subsidiaries
|
|
13,771
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,721
|
)
|
|
50
|
|
||
Depreciation of property, plant and equipment
|
|
65,445
|
|
|
19,371
|
|
|
11,556
|
|
|
—
|
|
|
—
|
|
|
96,372
|
|
||
Other amortization
|
|
1,875
|
|
|
905
|
|
|
1,482
|
|
|
—
|
|
|
—
|
|
|
4,262
|
|
||
Deferred income taxes
|
|
15,060
|
|
|
3,590
|
|
|
4,988
|
|
|
—
|
|
|
(39
|
)
|
|
23,599
|
|
||
Allowance for equity funds used during construction
|
|
(4,715
|
)
|
|
(249
|
)
|
|
(462
|
)
|
|
—
|
|
|
—
|
|
|
(5,426
|
)
|
||
Other
|
|
1,089
|
|
|
699
|
|
|
(173
|
)
|
|
—
|
|
|
—
|
|
|
1,615
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Decrease (increase) in accounts receivable
|
|
(5,100
|
)
|
|
1,182
|
|
|
(1,067
|
)
|
|
—
|
|
|
3,256
|
|
|
(1,729
|
)
|
||
Increase in accrued unbilled revenues
|
|
(8,819
|
)
|
|
(602
|
)
|
|
(2,482
|
)
|
|
—
|
|
|
—
|
|
|
(11,903
|
)
|
||
Decrease (increase) in fuel oil stock
|
|
(4,250
|
)
|
|
94
|
|
|
(1,806
|
)
|
|
—
|
|
|
—
|
|
|
(5,962
|
)
|
||
Increase in materials and supplies
|
|
(788
|
)
|
|
(1,472
|
)
|
|
(1,160
|
)
|
|
—
|
|
|
—
|
|
|
(3,420
|
)
|
||
Decrease (increase) in regulatory assets
|
|
11,378
|
|
|
(1,575
|
)
|
|
(1,624
|
)
|
|
—
|
|
|
—
|
|
|
8,179
|
|
||
Increase in accounts payable
|
|
39,954
|
|
|
3,291
|
|
|
8,392
|
|
|
—
|
|
|
—
|
|
|
51,637
|
|
||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
|
(29,430
|
)
|
|
(6,290
|
)
|
|
(4,725
|
)
|
|
—
|
|
|
(465
|
)
|
|
(40,910
|
)
|
||
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability
|
|
355
|
|
|
26
|
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|
302
|
|
||
Change in other assets and liabilities
|
|
(12,727
|
)
|
|
129
|
|
|
1,807
|
|
|
—
|
|
|
(3,256
|
)
|
|
(14,047
|
)
|
||
Net cash provided by operating activities
|
|
114,158
|
|
|
27,582
|
|
|
23,161
|
|
|
—
|
|
|
(14,225
|
)
|
|
150,676
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(153,554
|
)
|
|
(24,744
|
)
|
|
(23,782
|
)
|
|
—
|
|
|
—
|
|
|
(202,080
|
)
|
||
Contributions in aid of construction
|
|
14,078
|
|
|
1,870
|
|
|
1,623
|
|
|
—
|
|
|
—
|
|
|
17,571
|
|
||
Other
|
|
4,820
|
|
|
619
|
|
|
307
|
|
|
—
|
|
|
504
|
|
|
6,250
|
|
||
Advances from affiliates
|
|
—
|
|
|
(600
|
)
|
|
9,000
|
|
|
—
|
|
|
(8,400
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
|
(134,656
|
)
|
|
(22,855
|
)
|
|
(12,852
|
)
|
|
—
|
|
|
(7,896
|
)
|
|
(178,259
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock dividends
|
|
(43,884
|
)
|
|
(7,748
|
)
|
|
(5,973
|
)
|
|
—
|
|
|
13,721
|
|
|
(43,884
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
|
(540
|
)
|
|
(267
|
)
|
|
(191
|
)
|
|
—
|
|
|
—
|
|
|
(998
|
)
|
||
Proceeds from issuance of special purpose revenue bonds
|
|
162,000
|
|
|
28,000
|
|
|
75,000
|
|
|
—
|
|
|
|
|
|
265,000
|
|
||
Funds transferred for redemption of special purpose revenue bonds
|
|
(162,000
|
)
|
|
(28,000
|
)
|
|
(75,000
|
)
|
|
—
|
|
|
—
|
|
|
(265,000
|
)
|
||
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
|
35,590
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,400
|
|
|
43,990
|
|
||
Other
|
|
(2,068
|
)
|
|
(357
|
)
|
|
(804
|
)
|
|
—
|
|
|
—
|
|
|
(3,229
|
)
|
||
Net cash used in financing activities
|
|
(10,902
|
)
|
|
(8,372
|
)
|
|
(6,968
|
)
|
|
—
|
|
|
22,121
|
|
|
(4,121
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
(31,400
|
)
|
|
(3,645
|
)
|
|
3,341
|
|
|
—
|
|
|
—
|
|
|
(31,704
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
61,388
|
|
|
10,749
|
|
|
2,048
|
|
|
101
|
|
|
—
|
|
|
74,286
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
29,988
|
|
|
7,104
|
|
|
5,389
|
|
|
101
|
|
|
—
|
|
|
$
|
42,582
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries |
|
Consolidating
adjustments |
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
|
$
|
61,764
|
|
|
9,449
|
|
|
9,821
|
|
|
—
|
|
|
(18,812
|
)
|
|
$
|
62,222
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity in earnings of subsidiaries
|
|
(18,862
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,812
|
|
|
(50
|
)
|
||
Common stock dividends received from subsidiaries
|
|
13,184
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,134
|
)
|
|
50
|
|
||
Depreciation of property, plant and equipment
|
|
63,044
|
|
|
18,898
|
|
|
11,599
|
|
|
—
|
|
|
—
|
|
|
93,541
|
|
||
Other amortization
|
|
1,919
|
|
|
911
|
|
|
963
|
|
|
—
|
|
|
—
|
|
|
3,793
|
|
||
Deferred income taxes
|
|
23,954
|
|
|
2,538
|
|
|
5,623
|
|
|
—
|
|
|
3
|
|
|
32,118
|
|
||
Allowance for equity funds used during construction
|
|
(2,965
|
)
|
|
(333
|
)
|
|
(438
|
)
|
|
—
|
|
|
—
|
|
|
(3,736
|
)
|
||
Other
|
|
1,383
|
|
|
1,611
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
2,982
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Decrease in accounts receivable
|
|
14,177
|
|
|
2,007
|
|
|
729
|
|
|
—
|
|
|
(231
|
)
|
|
16,682
|
|
||
Decrease (increase) in accrued unbilled revenues
|
|
(2,941
|
)
|
|
634
|
|
|
(908
|
)
|
|
—
|
|
|
—
|
|
|
(3,215
|
)
|
||
Decrease in fuel oil stock
|
|
6,015
|
|
|
924
|
|
|
2,705
|
|
|
—
|
|
|
—
|
|
|
9,644
|
|
||
Increase in materials and supplies
|
|
(1,748
|
)
|
|
(708
|
)
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
(2,482
|
)
|
||
Decrease (increase) in regulatory assets
|
|
(3,974
|
)
|
|
2,138
|
|
|
1,159
|
|
|
—
|
|
|
—
|
|
|
(677
|
)
|
||
Increase in accounts payable
|
|
17,150
|
|
|
208
|
|
|
6,069
|
|
|
—
|
|
|
—
|
|
|
23,427
|
|
||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
|
(21,371
|
)
|
|
(192
|
)
|
|
(6,626
|
)
|
|
—
|
|
|
(3
|
)
|
|
(28,192
|
)
|
||
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability
|
|
299
|
|
|
27
|
|
|
(89
|
)
|
|
—
|
|
|
—
|
|
|
237
|
|
||
Change in other assets and liabilities
|
|
(11,803
|
)
|
|
11
|
|
|
(659
|
)
|
|
—
|
|
|
231
|
|
|
(12,220
|
)
|
||
Net cash provided by operating activities
|
|
139,225
|
|
|
38,123
|
|
|
29,910
|
|
|
—
|
|
|
(13,134
|
)
|
|
194,124
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(152,283
|
)
|
|
(27,436
|
)
|
|
(17,613
|
)
|
|
—
|
|
|
—
|
|
|
(197,332
|
)
|
||
Contributions in aid of construction
|
|
12,824
|
|
|
1,605
|
|
|
2,381
|
|
|
—
|
|
|
—
|
|
|
16,810
|
|
||
Other
|
|
132
|
|
|
169
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
331
|
|
||
Advances from affiliates
|
|
—
|
|
|
(3,000
|
)
|
|
(11,000
|
)
|
|
—
|
|
|
14,000
|
|
|
—
|
|
||
Net cash used in investing activities
|
|
(139,327
|
)
|
|
(28,662
|
)
|
|
(26,202
|
)
|
|
—
|
|
|
14,000
|
|
|
(180,191
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Common stock dividends
|
|
(46,800
|
)
|
|
(6,604
|
)
|
|
(6,530
|
)
|
|
—
|
|
|
13,134
|
|
|
(46,800
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
|
(540
|
)
|
|
(267
|
)
|
|
(191
|
)
|
|
—
|
|
|
—
|
|
|
(998
|
)
|
||
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
|
50,995
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,000
|
)
|
|
36,995
|
|
||
Other
|
|
8
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
|
3,663
|
|
|
(6,879
|
)
|
|
(6,721
|
)
|
|
—
|
|
|
(866
|
)
|
|
(10,803
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
3,561
|
|
|
2,582
|
|
|
(3,013
|
)
|
|
—
|
|
|
—
|
|
|
3,130
|
|
||
Cash and cash equivalents, beginning of period
|
|
16,281
|
|
|
2,682
|
|
|
5,385
|
|
|
101
|
|
|
—
|
|
|
24,449
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
19,842
|
|
|
5,264
|
|
|
2,372
|
|
|
101
|
|
|
—
|
|
|
$
|
27,579
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest and dividend income
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and fees on loans
|
|
$
|
52,317
|
|
|
$
|
49,690
|
|
|
$
|
103,059
|
|
|
$
|
98,127
|
|
Interest and dividends on investment securities
|
|
6,763
|
|
|
4,443
|
|
|
13,743
|
|
|
9,460
|
|
||||
Total interest and dividend income
|
|
59,080
|
|
|
54,133
|
|
|
116,802
|
|
|
107,587
|
|
||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest on deposit liabilities
|
|
2,311
|
|
|
1,691
|
|
|
4,414
|
|
|
3,283
|
|
||||
Interest on other borrowings
|
|
824
|
|
|
1,467
|
|
|
1,640
|
|
|
2,952
|
|
||||
Total interest expense
|
|
3,135
|
|
|
3,158
|
|
|
6,054
|
|
|
6,235
|
|
||||
Net interest income
|
|
55,945
|
|
|
50,975
|
|
|
110,748
|
|
|
101,352
|
|
||||
Provision for loan losses
|
|
2,834
|
|
|
4,753
|
|
|
6,741
|
|
|
9,519
|
|
||||
Net interest income after provision for loan losses
|
|
53,111
|
|
|
46,222
|
|
|
104,007
|
|
|
91,833
|
|
||||
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fees from other financial services
|
|
5,810
|
|
|
5,701
|
|
|
11,420
|
|
|
11,200
|
|
||||
Fee income on deposit liabilities
|
|
5,565
|
|
|
5,262
|
|
|
10,993
|
|
|
10,418
|
|
||||
Fee income on other financial products
|
|
1,971
|
|
|
2,207
|
|
|
3,837
|
|
|
4,412
|
|
||||
Bank-owned life insurance
|
|
1,925
|
|
|
1,006
|
|
|
2,908
|
|
|
2,004
|
|
||||
Mortgage banking income
|
|
587
|
|
|
1,554
|
|
|
1,376
|
|
|
2,749
|
|
||||
Gains on sale of investment securities, net
|
|
—
|
|
|
598
|
|
|
—
|
|
|
598
|
|
||||
Other income, net
|
|
391
|
|
|
288
|
|
|
849
|
|
|
621
|
|
||||
Total noninterest income
|
|
16,249
|
|
|
16,616
|
|
|
31,383
|
|
|
32,002
|
|
||||
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Compensation and employee benefits
|
|
24,742
|
|
|
21,919
|
|
|
47,979
|
|
|
44,353
|
|
||||
Occupancy
|
|
4,185
|
|
|
4,115
|
|
|
8,339
|
|
|
8,253
|
|
||||
Data processing
|
|
3,207
|
|
|
3,277
|
|
|
6,487
|
|
|
6,449
|
|
||||
Services
|
|
2,766
|
|
|
2,755
|
|
|
5,126
|
|
|
5,666
|
|
||||
Equipment
|
|
1,771
|
|
|
1,771
|
|
|
3,519
|
|
|
3,434
|
|
||||
Office supplies, printing and postage
|
|
1,527
|
|
|
1,583
|
|
|
3,062
|
|
|
2,948
|
|
||||
Marketing
|
|
839
|
|
|
899
|
|
|
1,356
|
|
|
1,760
|
|
||||
FDIC insurance
|
|
822
|
|
|
913
|
|
|
1,550
|
|
|
1,797
|
|
||||
Other expense
|
|
4,705
|
|
|
5,382
|
|
|
9,016
|
|
|
9,357
|
|
||||
Total noninterest expense
|
|
44,564
|
|
|
42,614
|
|
|
86,434
|
|
|
84,017
|
|
||||
Income before income taxes
|
|
24,796
|
|
|
20,224
|
|
|
48,956
|
|
|
39,818
|
|
||||
Income taxes
|
|
8,063
|
|
|
6,939
|
|
|
16,410
|
|
|
13,860
|
|
||||
Net income
|
|
$
|
16,733
|
|
|
$
|
13,285
|
|
|
$
|
32,546
|
|
|
$
|
25,958
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
|
$
|
16,733
|
|
|
$
|
13,285
|
|
|
$
|
32,546
|
|
|
$
|
25,958
|
|
Other comprehensive income, net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized gains on available-for-sale investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized gains on available-for-sale investment securities arising during the period, net of taxes of $1,334, $1,925, $1,482 and $6,830, respectively
|
|
2,021
|
|
|
2,915
|
|
|
2,244
|
|
|
10,344
|
|
||||
Reclassification adjustment for net realized gains included in net income, net of taxes of nil, $238, nil and $238, respectively
|
|
—
|
|
|
(360
|
)
|
|
—
|
|
|
(360
|
)
|
||||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $133, $140, $537 and $277, respectively
|
|
202
|
|
|
211
|
|
|
814
|
|
|
419
|
|
||||
Other comprehensive income, net of taxes
|
|
2,223
|
|
|
2,766
|
|
|
3,058
|
|
|
10,403
|
|
||||
Comprehensive income
|
|
$
|
18,956
|
|
|
$
|
16,051
|
|
|
$
|
35,604
|
|
|
$
|
36,361
|
|
(in thousands)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and due from banks
|
|
|
|
|
$
|
128,609
|
|
|
|
|
|
$
|
137,083
|
|
||
Interest-bearing deposits
|
|
|
|
37,049
|
|
|
|
|
52,128
|
|
||||||
Restricted cash
|
|
|
|
—
|
|
|
|
|
1,764
|
|
||||||
Available-for-sale investment securities, at fair value
|
|
|
|
|
1,302,886
|
|
|
|
|
|
1,105,182
|
|
||||
Stock in Federal Home Loan Bank, at cost
|
|
|
|
|
11,706
|
|
|
|
|
|
11,218
|
|
||||
Loans receivable held for investment
|
|
|
|
|
4,744,634
|
|
|
|
|
|
4,738,693
|
|
||||
Allowance for loan losses
|
|
|
|
|
(56,356
|
)
|
|
|
|
|
(55,533
|
)
|
||||
Net loans
|
|
|
|
|
4,688,278
|
|
|
|
|
|
4,683,160
|
|
||||
Loans held for sale, at lower of cost or fair value
|
|
|
|
|
5,261
|
|
|
|
|
|
18,817
|
|
||||
Other
|
|
|
|
|
354,898
|
|
|
|
|
|
329,815
|
|
||||
Goodwill
|
|
|
|
|
82,190
|
|
|
|
|
|
82,190
|
|
||||
Total assets
|
|
|
|
|
$
|
6,610,877
|
|
|
|
|
|
$
|
6,421,357
|
|
||
|
|
|
|
|
|
|
|
|
||||||||
Liabilities and shareholder’s equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposit liabilities—noninterest-bearing
|
|
|
|
|
$
|
1,694,150
|
|
|
|
|
|
$
|
1,639,051
|
|
||
Deposit liabilities—interest-bearing
|
|
|
|
|
4,030,236
|
|
|
|
|
|
3,909,878
|
|
||||
Other borrowings
|
|
|
|
|
188,130
|
|
|
|
|
|
192,618
|
|
||||
Other
|
|
|
|
|
101,974
|
|
|
|
|
|
101,635
|
|
||||
Total liabilities
|
|
|
|
|
6,014,490
|
|
|
|
|
|
5,843,182
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock
|
|
|
|
|
1
|
|
|
|
|
|
1
|
|
||||
Additional paid in capital
|
|
|
|
344,062
|
|
|
|
|
342,704
|
|
||||||
Retained earnings
|
|
|
|
|
271,739
|
|
|
|
|
|
257,943
|
|
||||
Accumulated other comprehensive loss, net of tax benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized losses on securities
|
|
$
|
(5,687
|
)
|
|
|
|
|
$
|
(7,931
|
)
|
|
|
|
||
Retirement benefit plans
|
|
(13,728
|
)
|
|
(19,415
|
)
|
|
(14,542
|
)
|
|
(22,473
|
)
|
||||
Total shareholder’s equity
|
|
|
|
|
596,387
|
|
|
|
|
|
578,175
|
|
||||
Total liabilities and shareholder’s equity
|
|
|
|
|
$
|
6,610,877
|
|
|
|
|
|
$
|
6,421,357
|
|
||
|
|
|
|
|
|
|
|
|
||||||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bank-owned life insurance
|
|
|
|
|
$
|
146,122
|
|
|
|
|
|
$
|
143,197
|
|
||
Premises and equipment, net
|
|
|
|
|
108,158
|
|
|
|
|
|
90,570
|
|
||||
Prepaid expenses
|
|
|
|
|
4,632
|
|
|
|
|
|
3,348
|
|
||||
Accrued interest receivable
|
|
|
|
|
16,949
|
|
|
|
|
|
16,824
|
|
||||
Mortgage-servicing rights
|
|
|
|
|
9,181
|
|
|
|
|
|
9,373
|
|
||||
Low-income housing equity investments
|
|
|
|
48,596
|
|
|
|
|
47,081
|
|
||||||
Real estate acquired in settlement of loans, net
|
|
|
|
|
1,554
|
|
|
|
|
|
1,189
|
|
||||
Other
|
|
|
|
|
19,706
|
|
|
|
|
|
18,233
|
|
||||
|
|
|
|
|
$
|
354,898
|
|
|
|
|
|
$
|
329,815
|
|
||
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued expenses
|
|
|
|
|
$
|
34,451
|
|
|
|
|
|
$
|
36,754
|
|
||
Federal and state income taxes payable
|
|
|
|
|
6,336
|
|
|
|
|
|
4,728
|
|
||||
Cashier’s checks
|
|
|
|
|
24,191
|
|
|
|
|
|
24,156
|
|
||||
Advance payments by borrowers
|
|
|
|
|
10,334
|
|
|
|
|
|
10,335
|
|
||||
Other
|
|
|
|
|
26,662
|
|
|
|
|
|
25,662
|
|
||||
|
|
|
|
|
$
|
101,974
|
|
|
|
|
|
$
|
101,635
|
|
|
|
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
|
||||||||||||||||||||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
U.S. Treasury and federal agency obligations
|
|
$
|
187,289
|
|
|
$
|
947
|
|
|
$
|
(1,653
|
)
|
|
$
|
186,583
|
|
|
16
|
|
|
$
|
104,417
|
|
|
$
|
(1,532
|
)
|
|
1
|
|
|
$
|
3,186
|
|
|
$
|
(121
|
)
|
Mortgage-related securities- FNMA, FHLMC and GNMA
|
|
1,109,613
|
|
|
2,202
|
|
|
(10,939
|
)
|
|
1,100,876
|
|
|
98
|
|
|
759,643
|
|
|
(9,658
|
)
|
|
13
|
|
|
43,296
|
|
|
(1,281
|
)
|
||||||||
Mortgage revenue bond
|
|
15,427
|
|
|
—
|
|
|
—
|
|
|
15,427
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
$
|
1,312,329
|
|
|
$
|
3,149
|
|
|
$
|
(12,592
|
)
|
|
$
|
1,302,886
|
|
|
114
|
|
|
$
|
864,060
|
|
|
$
|
(11,190
|
)
|
|
14
|
|
|
$
|
46,482
|
|
|
$
|
(1,402
|
)
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
U.S. Treasury and federal agency obligations
|
|
$
|
193,515
|
|
|
$
|
920
|
|
|
$
|
(2,154
|
)
|
|
$
|
192,281
|
|
|
18
|
|
|
$
|
123,475
|
|
|
$
|
(2,010
|
)
|
|
1
|
|
|
$
|
3,485
|
|
|
$
|
(144
|
)
|
Mortgage-related securities- FNMA, FHLMC and GNMA
|
|
909,408
|
|
|
1,742
|
|
|
(13,676
|
)
|
|
897,474
|
|
|
88
|
|
|
709,655
|
|
|
(12,143
|
)
|
|
13
|
|
|
47,485
|
|
|
(1,533
|
)
|
||||||||
Mortgage revenue bond
|
|
15,427
|
|
|
—
|
|
|
—
|
|
|
15,427
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
$
|
1,118,350
|
|
|
$
|
2,662
|
|
|
$
|
(15,830
|
)
|
|
$
|
1,105,182
|
|
|
106
|
|
|
$
|
833,130
|
|
|
$
|
(14,153
|
)
|
|
14
|
|
|
$
|
50,970
|
|
|
$
|
(1,677
|
)
|
June 30, 2017
|
|
Amortized cost
|
|
Fair value
|
||||
(in thousands)
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
9,992
|
|
|
$
|
9,993
|
|
Due after one year through five years
|
|
77,151
|
|
|
77,307
|
|
||
Due after five years through ten years
|
|
85,724
|
|
|
85,258
|
|
||
Due after ten years
|
|
29,849
|
|
|
29,452
|
|
||
|
|
202,716
|
|
|
202,010
|
|
||
Mortgage-related securities-FNMA, FHLMC and GNMA
|
|
1,109,613
|
|
|
1,100,876
|
|
||
Total available-for-sale securities
|
|
$
|
1,312,329
|
|
|
$
|
1,302,886
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
(in thousands)
|
|
|
|
|
|
||
Real estate:
|
|
|
|
|
|
||
Residential 1-4 family
|
$
|
2,061,549
|
|
|
$
|
2,048,051
|
|
Commercial real estate
|
808,900
|
|
|
800,395
|
|
||
Home equity line of credit
|
883,135
|
|
|
863,163
|
|
||
Residential land
|
16,009
|
|
|
18,889
|
|
||
Commercial construction
|
116,548
|
|
|
126,768
|
|
||
Residential construction
|
10,759
|
|
|
16,080
|
|
||
Total real estate
|
3,896,900
|
|
|
3,873,346
|
|
||
Commercial
|
649,657
|
|
|
692,051
|
|
||
Consumer
|
201,199
|
|
|
178,222
|
|
||
Total loans
|
4,747,756
|
|
|
4,743,619
|
|
||
Less: Deferred fees and discounts
|
(3,122
|
)
|
|
(4,926
|
)
|
||
Allowance for loan losses
|
(56,356
|
)
|
|
(55,533
|
)
|
||
Total loans, net
|
$
|
4,688,278
|
|
|
$
|
4,683,160
|
|
(in thousands)
|
|
Residential
1-4 family
|
|
Commercial real
estate
|
|
Home
equity line of credit |
|
Residential land
|
|
Commercial construction
|
|
Residential construction
|
|
Commercial loans
|
|
Consumer loans
|
|
Unallo-cated
|
|
Total
|
||||||||||||||||||||
Three months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
|
$
|
2,781
|
|
|
$
|
16,504
|
|
|
$
|
5,417
|
|
|
$
|
1,479
|
|
|
$
|
7,257
|
|
|
$
|
11
|
|
|
$
|
14,902
|
|
|
$
|
7,646
|
|
|
$
|
—
|
|
|
$
|
55,997
|
|
Charge-offs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
(752
|
)
|
|
(2,390
|
)
|
|
—
|
|
|
(3,234
|
)
|
||||||||||
Recoveries
|
|
49
|
|
|
—
|
|
|
39
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
299
|
|
|
357
|
|
|
—
|
|
|
759
|
|
||||||||||
Provision
|
|
300
|
|
|
2,336
|
|
|
71
|
|
|
(138
|
)
|
|
(2,551
|
)
|
|
(2
|
)
|
|
103
|
|
|
2,715
|
|
|
—
|
|
|
2,834
|
|
||||||||||
Ending balance
|
|
$
|
3,130
|
|
|
$
|
18,840
|
|
|
$
|
5,527
|
|
|
$
|
1,264
|
|
|
$
|
4,706
|
|
|
$
|
9
|
|
|
$
|
14,552
|
|
|
$
|
8,328
|
|
|
$
|
—
|
|
|
$
|
56,356
|
|
Three months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
|
$
|
4,593
|
|
|
$
|
11,806
|
|
|
$
|
7,172
|
|
|
$
|
1,740
|
|
|
$
|
6,164
|
|
|
$
|
12
|
|
|
$
|
16,991
|
|
|
$
|
3,848
|
|
|
$
|
—
|
|
|
$
|
52,326
|
|
Charge-offs
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(962
|
)
|
|
(1,528
|
)
|
|
—
|
|
|
(2,505
|
)
|
||||||||||
Recoveries
|
|
35
|
|
|
—
|
|
|
16
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
425
|
|
|
265
|
|
|
—
|
|
|
757
|
|
||||||||||
Provision
|
|
(229
|
)
|
|
1,755
|
|
|
648
|
|
|
(67
|
)
|
|
829
|
|
|
—
|
|
|
631
|
|
|
1,186
|
|
|
—
|
|
|
4,753
|
|
||||||||||
Ending balance
|
|
$
|
4,384
|
|
|
$
|
13,561
|
|
|
$
|
7,836
|
|
|
$
|
1,689
|
|
|
$
|
6,993
|
|
|
$
|
12
|
|
|
$
|
17,085
|
|
|
$
|
3,771
|
|
|
$
|
—
|
|
|
$
|
55,331
|
|
Six months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
|
$
|
2,873
|
|
|
$
|
16,004
|
|
|
$
|
5,039
|
|
|
$
|
1,738
|
|
|
$
|
6,449
|
|
|
$
|
12
|
|
|
$
|
16,618
|
|
|
$
|
6,800
|
|
|
$
|
—
|
|
|
$
|
55,533
|
|
Charge-offs
|
|
(6
|
)
|
|
—
|
|
|
(14
|
)
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
(2,262
|
)
|
|
(5,200
|
)
|
|
—
|
|
|
(7,574
|
)
|
||||||||||
Recoveries
|
|
58
|
|
|
—
|
|
|
130
|
|
|
218
|
|
|
—
|
|
|
—
|
|
|
596
|
|
|
654
|
|
|
—
|
|
|
1,656
|
|
||||||||||
Provision
|
|
205
|
|
|
2,836
|
|
|
372
|
|
|
(600
|
)
|
|
(1,743
|
)
|
|
(3
|
)
|
|
(400
|
)
|
|
6,074
|
|
|
—
|
|
|
6,741
|
|
||||||||||
Ending balance
|
|
$
|
3,130
|
|
|
$
|
18,840
|
|
|
$
|
5,527
|
|
|
$
|
1,264
|
|
|
$
|
4,706
|
|
|
$
|
9
|
|
|
$
|
14,552
|
|
|
$
|
8,328
|
|
|
$
|
—
|
|
|
$
|
56,356
|
|
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Ending balance: individually evaluated for impairment
|
|
$
|
1,332
|
|
|
$
|
73
|
|
|
$
|
275
|
|
|
$
|
480
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
939
|
|
|
$
|
30
|
|
|
|
|
$
|
3,129
|
|
||
Ending balance: collectively evaluated for impairment
|
|
$
|
1,798
|
|
|
$
|
18,767
|
|
|
$
|
5,252
|
|
|
$
|
784
|
|
|
$
|
4,706
|
|
|
$
|
9
|
|
|
$
|
13,613
|
|
|
$
|
8,298
|
|
|
$
|
—
|
|
|
$
|
53,227
|
|
Financing Receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending balance
|
|
$
|
2,061,549
|
|
|
$
|
808,900
|
|
|
$
|
883,135
|
|
|
$
|
16,009
|
|
|
$
|
116,548
|
|
|
$
|
10,759
|
|
|
$
|
649,657
|
|
|
$
|
201,199
|
|
|
|
|
$
|
4,747,756
|
|
||
Ending balance: individually evaluated for impairment
|
|
$
|
19,188
|
|
|
$
|
1,289
|
|
|
$
|
6,684
|
|
|
$
|
2,589
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,283
|
|
|
$
|
68
|
|
|
|
|
$
|
34,101
|
|
||
Ending balance: collectively evaluated for impairment
|
|
$
|
2,042,361
|
|
|
$
|
807,611
|
|
|
$
|
876,451
|
|
|
$
|
13,420
|
|
|
$
|
116,548
|
|
|
$
|
10,759
|
|
|
$
|
645,374
|
|
|
$
|
201,131
|
|
|
|
|
$
|
4,713,655
|
|
||
Six months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
|
$
|
4,186
|
|
|
$
|
11,342
|
|
|
$
|
7,260
|
|
|
$
|
1,671
|
|
|
$
|
4,461
|
|
|
$
|
13
|
|
|
$
|
17,208
|
|
|
$
|
3,897
|
|
|
$
|
—
|
|
|
$
|
50,038
|
|
Charge-offs
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,305
|
)
|
|
(3,098
|
)
|
|
—
|
|
|
(5,463
|
)
|
||||||||||
Recoveries
|
|
52
|
|
|
—
|
|
|
31
|
|
|
119
|
|
|
—
|
|
|
—
|
|
|
560
|
|
|
475
|
|
|
—
|
|
|
1,237
|
|
||||||||||
Provision
|
|
206
|
|
|
2,219
|
|
|
545
|
|
|
(101
|
)
|
|
2,532
|
|
|
(1
|
)
|
|
1,622
|
|
|
2,497
|
|
|
—
|
|
|
9,519
|
|
||||||||||
Ending balance
|
|
$
|
4,384
|
|
|
$
|
13,561
|
|
|
$
|
7,836
|
|
|
$
|
1,689
|
|
|
$
|
6,993
|
|
|
$
|
12
|
|
|
$
|
17,085
|
|
|
$
|
3,771
|
|
|
$
|
—
|
|
|
$
|
55,331
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Ending balance: individually evaluated for impairment
|
|
$
|
1,352
|
|
|
$
|
80
|
|
|
$
|
215
|
|
|
$
|
789
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,641
|
|
|
$
|
6
|
|
|
|
|
$
|
4,083
|
|
||
Ending balance: collectively evaluated for impairment
|
|
$
|
1,521
|
|
|
$
|
15,924
|
|
|
$
|
4,824
|
|
|
$
|
949
|
|
|
$
|
6,449
|
|
|
$
|
12
|
|
|
$
|
14,977
|
|
|
$
|
6,794
|
|
|
$
|
—
|
|
|
$
|
51,450
|
|
Financing Receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending balance
|
|
$
|
2,048,051
|
|
|
$
|
800,395
|
|
|
$
|
863,163
|
|
|
$
|
18,889
|
|
|
$
|
126,768
|
|
|
$
|
16,080
|
|
|
$
|
692,051
|
|
|
$
|
178,222
|
|
|
|
|
$
|
4,743,619
|
|
||
Ending balance: individually evaluated for impairment
|
|
$
|
19,854
|
|
|
$
|
1,569
|
|
|
$
|
6,158
|
|
|
$
|
3,629
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,539
|
|
|
$
|
10
|
|
|
|
|
$
|
51,759
|
|
||
Ending balance: collectively evaluated for impairment
|
|
$
|
2,028,197
|
|
|
$
|
798,826
|
|
|
$
|
857,005
|
|
|
$
|
15,260
|
|
|
$
|
126,768
|
|
|
$
|
16,080
|
|
|
$
|
671,512
|
|
|
$
|
178,212
|
|
|
|
|
$
|
4,691,860
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(in thousands)
|
|
Commercial
real estate
|
|
Commercial
construction
|
|
Commercial
|
|
Commercial
real estate
|
|
Commercial
construction
|
|
Commercial
|
||||||||||||
Grade:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Pass
|
|
$
|
660,015
|
|
|
$
|
92,069
|
|
|
$
|
602,903
|
|
|
$
|
701,657
|
|
|
$
|
102,955
|
|
|
$
|
614,139
|
|
Special mention
|
|
95,656
|
|
|
22,500
|
|
|
19,429
|
|
|
65,541
|
|
|
—
|
|
|
25,229
|
|
||||||
Substandard
|
|
53,229
|
|
|
1,979
|
|
|
27,325
|
|
|
33,197
|
|
|
23,813
|
|
|
52,683
|
|
||||||
Doubtful
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
808,900
|
|
|
$
|
116,548
|
|
|
$
|
649,657
|
|
|
$
|
800,395
|
|
|
$
|
126,768
|
|
|
$
|
692,051
|
|
(in thousands)
|
|
30-59
days
past due
|
|
60-89
days
past due
|
|
Greater
than
90 days
|
|
Total
past due
|
|
Current
|
|
Total
financing
receivables
|
|
Recorded
investment>
90 days and
accruing
|
||||||||||||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
|
$
|
2,308
|
|
|
$
|
2,694
|
|
|
$
|
5,411
|
|
|
$
|
10,413
|
|
|
$
|
2,051,136
|
|
|
$
|
2,061,549
|
|
|
$
|
—
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
808,900
|
|
|
808,900
|
|
|
—
|
|
|||||||
Home equity line of credit
|
|
502
|
|
|
494
|
|
|
1,516
|
|
|
2,512
|
|
|
880,623
|
|
|
883,135
|
|
|
—
|
|
|||||||
Residential land
|
|
—
|
|
|
—
|
|
|
305
|
|
|
305
|
|
|
15,704
|
|
|
16,009
|
|
|
—
|
|
|||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
116,548
|
|
|
116,548
|
|
|
—
|
|
|||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,759
|
|
|
10,759
|
|
|
—
|
|
|||||||
Commercial
|
|
1,486
|
|
|
614
|
|
|
1,096
|
|
|
3,196
|
|
|
646,461
|
|
|
649,657
|
|
|
—
|
|
|||||||
Consumer
|
|
2,266
|
|
|
1,305
|
|
|
863
|
|
|
4,434
|
|
|
196,765
|
|
|
201,199
|
|
|
—
|
|
|||||||
Total loans
|
|
$
|
6,562
|
|
|
$
|
5,107
|
|
|
$
|
9,191
|
|
|
$
|
20,860
|
|
|
$
|
4,726,896
|
|
|
$
|
4,747,756
|
|
|
$
|
—
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
|
$
|
5,467
|
|
|
$
|
2,338
|
|
|
$
|
3,505
|
|
|
$
|
11,310
|
|
|
$
|
2,036,741
|
|
|
$
|
2,048,051
|
|
|
$
|
—
|
|
Commercial real estate
|
|
2,416
|
|
|
—
|
|
|
—
|
|
|
2,416
|
|
|
797,979
|
|
|
800,395
|
|
|
—
|
|
|||||||
Home equity line of credit
|
|
1,263
|
|
|
381
|
|
|
1,342
|
|
|
2,986
|
|
|
860,177
|
|
|
863,163
|
|
|
—
|
|
|||||||
Residential land
|
|
—
|
|
|
—
|
|
|
255
|
|
|
255
|
|
|
18,634
|
|
|
18,889
|
|
|
—
|
|
|||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126,768
|
|
|
126,768
|
|
|
—
|
|
|||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,080
|
|
|
16,080
|
|
|
—
|
|
|||||||
Commercial
|
|
413
|
|
|
510
|
|
|
1,303
|
|
|
2,226
|
|
|
689,825
|
|
|
692,051
|
|
|
—
|
|
|||||||
Consumer
|
|
1,945
|
|
|
1,001
|
|
|
963
|
|
|
3,909
|
|
|
174,313
|
|
|
178,222
|
|
|
—
|
|
|||||||
Total loans
|
|
$
|
11,504
|
|
|
$
|
4,230
|
|
|
$
|
7,368
|
|
|
$
|
23,102
|
|
|
$
|
4,720,517
|
|
|
$
|
4,743,619
|
|
|
$
|
—
|
|
(in thousands)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Real estate:
|
|
|
|
|
|
|
||
Residential 1-4 family
|
|
$
|
12,270
|
|
|
$
|
11,154
|
|
Commercial real estate
|
|
—
|
|
|
223
|
|
||
Home equity line of credit
|
|
4,306
|
|
|
3,080
|
|
||
Residential land
|
|
915
|
|
|
878
|
|
||
Commercial construction
|
|
—
|
|
|
—
|
|
||
Residential construction
|
|
—
|
|
|
—
|
|
||
Commercial
|
|
1,972
|
|
|
6,708
|
|
||
Consumer
|
|
1,501
|
|
|
1,282
|
|
||
Total nonaccrual loans
|
|
$
|
20,964
|
|
|
$
|
23,325
|
|
Real estate:
|
|
|
|
|
||||
Residential 1-4 family
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
||
Home equity line of credit
|
|
—
|
|
|
—
|
|
||
Residential land
|
|
—
|
|
|
—
|
|
||
Commercial construction
|
|
—
|
|
|
—
|
|
||
Residential construction
|
|
—
|
|
|
—
|
|
||
Commercial
|
|
—
|
|
|
—
|
|
||
Consumer
|
|
—
|
|
|
—
|
|
||
Total accruing loans 90 days or more past due
|
|
$
|
—
|
|
|
$
|
—
|
|
Real estate:
|
|
|
|
|
||||
Residential 1-4 family
|
|
$
|
13,112
|
|
|
$
|
14,450
|
|
Commercial real estate
|
|
1,289
|
|
|
1,346
|
|
||
Home equity line of credit
|
|
4,548
|
|
|
4,934
|
|
||
Residential land
|
|
1,674
|
|
|
2,751
|
|
||
Commercial construction
|
|
—
|
|
|
—
|
|
||
Residential construction
|
|
—
|
|
|
—
|
|
||
Commercial
|
|
2,692
|
|
|
14,146
|
|
||
Consumer
|
|
68
|
|
|
10
|
|
||
Total troubled debt restructured loans not included above
|
|
$
|
23,383
|
|
|
$
|
37,637
|
|
|
|
June 30, 2017
|
|
Three months ended June 30, 2017
|
|
Six months ended June 30, 2017
|
||||||||||||||||||||||
(in thousands)
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
Allowance
|
|
Average
recorded
investment
|
|
Interest
income
recognized*
|
|
Average
recorded
investment
|
|
Interest
income
recognized*
|
||||||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
|
$
|
9,364
|
|
|
$
|
9,963
|
|
|
$
|
—
|
|
|
$
|
9,304
|
|
|
$
|
76
|
|
|
$
|
9,429
|
|
|
$
|
160
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|
11
|
|
|
182
|
|
|
11
|
|
|||||||
Home equity line of credit
|
|
2,287
|
|
|
2,707
|
|
|
—
|
|
|
2,401
|
|
|
51
|
|
|
2,203
|
|
|
65
|
|
|||||||
Residential land
|
|
1,249
|
|
|
1,788
|
|
|
—
|
|
|
1,075
|
|
|
8
|
|
|
1,016
|
|
|
34
|
|
|||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Commercial
|
|
1,592
|
|
|
4,267
|
|
|
—
|
|
|
1,949
|
|
|
2
|
|
|
3,428
|
|
|
8
|
|
|||||||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
$
|
14,492
|
|
|
$
|
18,725
|
|
|
$
|
—
|
|
|
$
|
14,873
|
|
|
$
|
148
|
|
|
$
|
16,258
|
|
|
$
|
278
|
|
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
|
$
|
9,824
|
|
|
$
|
10,027
|
|
|
$
|
1,332
|
|
|
$
|
10,054
|
|
|
$
|
117
|
|
|
$
|
10,051
|
|
|
$
|
236
|
|
Commercial real estate
|
|
1,289
|
|
|
1,289
|
|
|
73
|
|
|
1,292
|
|
|
14
|
|
|
1,296
|
|
|
28
|
|
|||||||
Home equity line of credit
|
|
4,397
|
|
|
4,425
|
|
|
275
|
|
|
4,372
|
|
|
47
|
|
|
4,467
|
|
|
96
|
|
|||||||
Residential land
|
|
1,340
|
|
|
1,340
|
|
|
480
|
|
|
1,532
|
|
|
24
|
|
|
1,804
|
|
|
61
|
|
|||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Commercial
|
|
2,691
|
|
|
2,691
|
|
|
939
|
|
|
2,562
|
|
|
68
|
|
|
4,915
|
|
|
469
|
|
|||||||
Consumer
|
|
68
|
|
|
68
|
|
|
30
|
|
|
68
|
|
|
1
|
|
|
49
|
|
|
1
|
|
|||||||
|
|
$
|
19,609
|
|
|
$
|
19,840
|
|
|
$
|
3,129
|
|
|
$
|
19,880
|
|
|
$
|
271
|
|
|
$
|
22,582
|
|
|
$
|
891
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
|
$
|
19,188
|
|
|
$
|
19,990
|
|
|
$
|
1,332
|
|
|
$
|
19,358
|
|
|
$
|
193
|
|
|
$
|
19,480
|
|
|
$
|
396
|
|
Commercial real estate
|
|
1,289
|
|
|
1,289
|
|
|
73
|
|
|
1,435
|
|
|
25
|
|
|
1,478
|
|
|
39
|
|
|||||||
Home equity line of credit
|
|
6,684
|
|
|
7,132
|
|
|
275
|
|
|
6,773
|
|
|
98
|
|
|
6,670
|
|
|
161
|
|
|||||||
Residential land
|
|
2,589
|
|
|
3,128
|
|
|
480
|
|
|
2,607
|
|
|
32
|
|
|
2,820
|
|
|
95
|
|
|||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Commercial
|
|
4,283
|
|
|
6,958
|
|
|
939
|
|
|
4,511
|
|
|
70
|
|
|
8,343
|
|
|
477
|
|
|||||||
Consumer
|
|
68
|
|
|
68
|
|
|
30
|
|
|
69
|
|
|
1
|
|
|
49
|
|
|
1
|
|
|||||||
|
|
$
|
34,101
|
|
|
$
|
38,565
|
|
|
$
|
3,129
|
|
|
$
|
34,753
|
|
|
$
|
419
|
|
|
$
|
38,840
|
|
|
$
|
1,169
|
|
|
|
December 31, 2016
|
|
Three months ended June 30, 2016
|
|
Six months ended June 30, 2016
|
||||||||||||||||||||||
(in thousands)
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
allowance
|
|
Average
recorded
investment
|
|
Interest
income
recognized*
|
|
Average
recorded
investment
|
|
Interest
income
recognized*
|
||||||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
|
$
|
9,571
|
|
|
$
|
10,400
|
|
|
$
|
—
|
|
|
$
|
10,672
|
|
|
$
|
152
|
|
|
$
|
10,532
|
|
|
$
|
203
|
|
Commercial real estate
|
|
223
|
|
|
228
|
|
|
—
|
|
|
1,152
|
|
|
—
|
|
|
1,163
|
|
|
—
|
|
|||||||
Home equity line of credit
|
|
1,500
|
|
|
1,900
|
|
|
—
|
|
|
1,038
|
|
|
9
|
|
|
943
|
|
|
9
|
|
|||||||
Residential land
|
|
1,218
|
|
|
1,803
|
|
|
—
|
|
|
1,484
|
|
|
15
|
|
|
1,537
|
|
|
31
|
|
|||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Commercial
|
|
6,299
|
|
|
8,869
|
|
|
—
|
|
|
8,369
|
|
|
7
|
|
|
5,818
|
|
|
13
|
|
|||||||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
$
|
18,811
|
|
|
$
|
23,200
|
|
|
$
|
—
|
|
|
$
|
22,715
|
|
|
$
|
183
|
|
|
$
|
19,993
|
|
|
$
|
256
|
|
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
|
$
|
10,283
|
|
|
$
|
10,486
|
|
|
$
|
1,352
|
|
|
$
|
11,982
|
|
|
$
|
115
|
|
|
$
|
12,000
|
|
|
$
|
237
|
|
Commercial real estate
|
|
1,346
|
|
|
1,346
|
|
|
80
|
|
|
2,519
|
|
|
—
|
|
|
1,686
|
|
|
—
|
|
|||||||
Home equity line of credit
|
|
4,658
|
|
|
4,712
|
|
|
215
|
|
|
3,299
|
|
|
28
|
|
|
3,122
|
|
|
55
|
|
|||||||
Residential land
|
|
2,411
|
|
|
2,411
|
|
|
789
|
|
|
2,977
|
|
|
54
|
|
|
3,177
|
|
|
121
|
|
|||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Commercial
|
|
14,240
|
|
|
14,240
|
|
|
1,641
|
|
|
16,821
|
|
|
180
|
|
|
16,896
|
|
|
210
|
|
|||||||
Consumer
|
|
10
|
|
|
10
|
|
|
6
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|||||||
|
|
$
|
32,948
|
|
|
$
|
33,205
|
|
|
$
|
4,083
|
|
|
$
|
37,610
|
|
|
$
|
377
|
|
|
$
|
36,893
|
|
|
$
|
623
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
|
$
|
19,854
|
|
|
$
|
20,886
|
|
|
$
|
1,352
|
|
|
$
|
22,654
|
|
|
$
|
267
|
|
|
$
|
22,532
|
|
|
$
|
440
|
|
Commercial real estate
|
|
1,569
|
|
|
1,574
|
|
|
80
|
|
|
3,671
|
|
|
—
|
|
|
2,849
|
|
|
—
|
|
|||||||
Home equity line of credit
|
|
6,158
|
|
|
6,612
|
|
|
215
|
|
|
4,337
|
|
|
37
|
|
|
4,065
|
|
|
64
|
|
|||||||
Residential land
|
|
3,629
|
|
|
4,214
|
|
|
789
|
|
|
4,461
|
|
|
69
|
|
|
4,714
|
|
|
152
|
|
|||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Commercial
|
|
20,539
|
|
|
23,109
|
|
|
1,641
|
|
|
25,190
|
|
|
187
|
|
|
22,714
|
|
|
223
|
|
|||||||
Consumer
|
|
10
|
|
|
10
|
|
|
6
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|||||||
|
|
$
|
51,759
|
|
|
$
|
56,405
|
|
|
$
|
4,083
|
|
|
$
|
60,325
|
|
|
$
|
560
|
|
|
$
|
56,886
|
|
|
$
|
879
|
|
*
|
Since loan was classified as impaired.
|
|
|
Three months ended June 30, 2017
|
|
Six months ended June 30, 2017
|
||||||||||||||||||||||||||
|
|
Number of contracts
|
|
Outstanding recorded
investment
1
|
|
Net increase in allowance
|
|
Number of contracts
|
|
Outstanding recorded
investment
1
|
|
Net increase in allowance
|
||||||||||||||||||
(dollars in thousands)
|
|
|
Pre-modification
|
|
Post-modification
|
|
(as of period end)
|
|
|
Pre-modification
|
|
Post-modification
|
|
(as of period end)
|
||||||||||||||||
Troubled debt restructurings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Residential 1-4 family
|
|
2
|
|
|
$
|
360
|
|
|
$
|
360
|
|
|
$
|
—
|
|
|
5
|
|
|
$
|
872
|
|
|
$
|
880
|
|
|
$
|
45
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Home equity line of credit
|
|
5
|
|
|
298
|
|
|
298
|
|
|
59
|
|
|
13
|
|
|
524
|
|
|
510
|
|
|
93
|
|
||||||
Residential land
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
342
|
|
|
342
|
|
|
—
|
|
||||||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
59
|
|
|
59
|
|
|
27
|
|
||||||
|
|
7
|
|
|
$
|
658
|
|
|
$
|
658
|
|
|
$
|
59
|
|
|
20
|
|
|
$
|
1,797
|
|
|
$
|
1,791
|
|
|
$
|
165
|
|
|
|
Three months ended June 30, 2016
|
|
Six months ended June 30, 2016
|
||||||||||||||||||||||||||
|
|
Number of contracts
|
|
Outstanding recorded
investment 1 |
|
Net increase in allowance
|
|
Number of contracts
|
|
Outstanding recorded
investment 1 |
|
Net increase in allowance
|
||||||||||||||||||
(dollars in thousands)
|
|
|
Pre-modification
|
|
Post-modification
|
|
(as of period end)
|
|
|
Pre-modification
|
|
Post-modification
|
|
(as of period end)
|
||||||||||||||||
Troubled debt restructurings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential 1-4 family
|
|
5
|
|
|
$
|
891
|
|
|
$
|
885
|
|
|
$
|
98
|
|
|
9
|
|
|
$
|
1,988
|
|
|
$
|
2,100
|
|
|
$
|
259
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Home equity line of credit
|
|
8
|
|
|
768
|
|
|
768
|
|
|
181
|
|
|
18
|
|
|
1,437
|
|
|
1,437
|
|
|
255
|
|
||||||
Residential land
|
|
1
|
|
|
120
|
|
|
121
|
|
|
—
|
|
|
1
|
|
|
120
|
|
|
121
|
|
|
—
|
|
||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
|
5
|
|
|
457
|
|
|
457
|
|
|
145
|
|
|
8
|
|
|
16,657
|
|
|
16,657
|
|
|
670
|
|
||||||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
19
|
|
|
$
|
2,236
|
|
|
$
|
2,231
|
|
|
$
|
424
|
|
|
36
|
|
|
$
|
20,202
|
|
|
$
|
20,315
|
|
|
$
|
1,184
|
|
1
|
The reported balances include loans that became TDR during the period, and were fully paid-off, charged-off, or sold prior to period end.
|
|
|
Three months ended June 30, 2017
|
|
Six months ended June 30, 2017
|
||||||||
(dollars in thousands)
|
|
Number of contracts
|
|
Recorded investment
|
|
Number of contracts
|
|
Recorded investment
|
||||
Troubled debt restructurings that
subsequently defaulted
|
|
|
|
|
|
|
|
|
||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
||
Residential 1-4 family
|
|
1
|
|
$
|
222
|
|
|
2
|
|
$
|
523
|
|
Commercial real estate
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Home equity line of credit
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Residential land
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Commercial construction
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Residential construction
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Commercial
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Consumer
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
|
|
1
|
|
$
|
222
|
|
|
2
|
|
$
|
523
|
|
|
|
Three months ended June 30, 2016
|
|
Six months ended June 30, 2016
|
||||||||
(dollars in thousands)
|
|
Number of contracts
|
|
Recorded investment
|
|
Number of contracts
|
|
Recorded investment
|
||||
Troubled debt restructurings that
subsequently defaulted |
|
|
|
|
|
|
|
|
||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
||
Residential 1-4 family
|
|
—
|
|
$
|
—
|
|
|
1
|
|
$
|
488
|
|
Commercial real estate
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Home equity line of credit
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Residential land
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Commercial construction
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Residential construction
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Commercial
|
|
1
|
|
26
|
|
|
1
|
|
26
|
|
||
Consumer
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
|
|
1
|
|
$
|
26
|
|
|
2
|
|
$
|
514
|
|
(in thousands)
|
|
Gross
carrying amount 1 |
|
Accumulated amortization
1
|
|
Valuation allowance
|
|
Net
carrying amount |
||||||||
June 30, 2017
|
|
$
|
18,069
|
|
|
$
|
(8,888
|
)
|
|
$
|
—
|
|
|
$
|
9,181
|
|
December 31, 2016
|
|
17,271
|
|
|
(7,898
|
)
|
|
—
|
|
|
9,373
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Mortgage servicing rights
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
9,294
|
|
|
$
|
8,857
|
|
|
$
|
9,373
|
|
|
$
|
8,884
|
|
Amount capitalized
|
|
362
|
|
|
665
|
|
|
798
|
|
|
1,120
|
|
||||
Amortization
|
|
(475
|
)
|
|
(506
|
)
|
|
(990
|
)
|
|
(988
|
)
|
||||
Other-than-temporary impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Carrying amount before valuation allowance
|
|
9,181
|
|
|
9,016
|
|
|
9,181
|
|
|
9,016
|
|
||||
Valuation allowance for mortgage servicing rights
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Provision (recovery)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other-than-temporary impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ending balance
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net carrying value of mortgage servicing rights
|
|
$
|
9,181
|
|
|
$
|
9,016
|
|
|
$
|
9,181
|
|
|
$
|
9,016
|
|
(dollars in thousands)
|
|
June 30, 2017
|
|
|
December 31, 2016
|
|
||
Unpaid principal balance
|
|
$
|
1,208,404
|
|
|
$
|
1,188,380
|
|
Weighted average note rate
|
|
3.95
|
%
|
|
3.96
|
%
|
||
Weighted average discount rate
|
|
10.0
|
%
|
|
9.4
|
%
|
||
Weighted average prepayment speed
|
|
8.8
|
%
|
|
8.5
|
%
|
(dollars in thousands)
|
|
June 30, 2017
|
|
|
December 31, 2016
|
|
||
Prepayment rate:
|
|
|
|
|
||||
25 basis points adverse rate change
|
|
$
|
(939
|
)
|
|
$
|
(567
|
)
|
50 basis points adverse rate change
|
|
(2,048
|
)
|
|
(1,154
|
)
|
||
Discount rate:
|
|
|
|
|
||||
25 basis points adverse rate change
|
|
(115
|
)
|
|
(128
|
)
|
||
50 basis points adverse rate change
|
|
(227
|
)
|
|
(254
|
)
|
(in millions)
|
|
Gross amount of
recognized liabilities
|
|
Gross amount offset in
the Balance Sheet
|
|
Net amount of liabilities presented
in the Balance Sheet
|
Repurchase agreements
|
|
|
|
|
|
|
June 30, 2017
|
|
$88
|
|
$—
|
|
$88
|
December 31, 2016
|
|
93
|
|
—
|
|
93
|
|
|
Gross amount not offset in the Balance Sheet
|
||||||||||
(in millions)
|
|
Net amount of liabilities presented
in the Balance Sheet
|
|
Financial
instruments
|
|
Cash
collateral
pledged
|
||||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|||
Financial institution
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government entities
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial account holders
|
|
88
|
|
|
120
|
|
|
—
|
|
|||
Total
|
|
$
|
88
|
|
|
$
|
120
|
|
|
$
|
—
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||
Financial institution
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government entities
|
|
14
|
|
|
15
|
|
|
—
|
|
|||
Commercial account holders
|
|
79
|
|
|
101
|
|
|
—
|
|
|||
Total
|
|
$
|
93
|
|
|
$
|
116
|
|
|
$
|
—
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
(in thousands)
|
|
Notional amount
|
|
Fair value
|
|
Notional amount
|
|
Fair value
|
||||||||
Interest rate lock commitments
|
|
$
|
22,737
|
|
|
$
|
126
|
|
|
$
|
25,883
|
|
|
$
|
421
|
|
Forward commitments
|
|
22,925
|
|
|
88
|
|
|
30,813
|
|
|
(177
|
)
|
Derivative Financial Instruments Not Designated as Hedging Instruments
1
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
(in thousands)
|
|
Asset derivatives
|
|
Liability
derivatives
|
|
Asset derivatives
|
|
Liability
derivatives |
||||||||
Interest rate lock commitments
|
|
$
|
142
|
|
|
$
|
16
|
|
|
$
|
445
|
|
|
$
|
24
|
|
Forward commitments
|
|
88
|
|
|
—
|
|
|
8
|
|
|
185
|
|
||||
|
|
$
|
230
|
|
|
$
|
16
|
|
|
$
|
453
|
|
|
$
|
209
|
|
Derivative Financial Instruments Not Designated as Hedging Instruments
|
|
Location of net gains (losses) recognized in the Statement of Income
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
(in thousands)
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Interest rate lock commitments
|
|
Mortgage banking income
|
|
$
|
(191
|
)
|
|
$
|
140
|
|
|
$
|
(295
|
)
|
|
$
|
411
|
|
Forward commitments
|
|
Mortgage banking income
|
|
192
|
|
|
(74
|
)
|
|
265
|
|
|
(237
|
)
|
||||
|
|
|
|
$
|
1
|
|
|
$
|
66
|
|
|
$
|
(30
|
)
|
|
$
|
174
|
|
|
Refunding Series 2017A Special Purpose Revenue Bonds
|
Refunding Series 2017B Special Purpose Revenue Bonds
|
Aggregate principal amount
|
$125 million
|
$140 million
|
Fixed coupon interest rate
|
3.10%
|
4.00%
|
Maturity date
|
May 1, 2026
|
March 1, 2037
|
Department loaned the proceeds to:
|
|
|
Hawaiian Electric
|
$62 million
|
$100 million
|
Hawaii Electric Light
|
$8 million
|
$20 million
|
Maui Electric
|
$55 million
|
$20 million
|
|
Refunding Series 2007B Special Purpose Revenue Bonds
|
Series 2007A Special Purpose Revenue Bonds
|
Aggregate principal amount
|
$125 million
|
$140 million
|
Fixed coupon interest rate
|
4.60%
|
4.65%
|
Maturity date
|
May 1, 2026
|
March 1, 2037
|
|
HEI Consolidated
|
|
Hawaiian Electric Consolidated
|
||||||||||||||||||||||||
(in thousands)
|
Net unrealized gains (losses) on securities
|
|
Unrealized gains (losses) on derivatives
|
|
Retirement benefit plans
|
|
AOCI
|
|
Unrealized gains (losses) on derivatives
|
|
Retirement benefit plans
|
|
AOCI
|
||||||||||||||
Balance, December 31, 2016
|
$
|
(7,931
|
)
|
|
$
|
(454
|
)
|
|
$
|
(24,744
|
)
|
|
$
|
(33,129
|
)
|
|
$
|
(454
|
)
|
|
$
|
132
|
|
|
$
|
(322
|
)
|
Current period other comprehensive income
|
2,244
|
|
|
454
|
|
|
657
|
|
|
3,355
|
|
|
454
|
|
|
45
|
|
|
499
|
|
|||||||
Balance, June 30, 2017
|
$
|
(5,687
|
)
|
|
$
|
—
|
|
|
$
|
(24,087
|
)
|
|
$
|
(29,774
|
)
|
|
$
|
—
|
|
|
$
|
177
|
|
|
$
|
177
|
|
Balance, December 31, 2015
|
$
|
(1,872
|
)
|
|
$
|
(54
|
)
|
|
$
|
(24,336
|
)
|
|
$
|
(26,262
|
)
|
|
$
|
—
|
|
|
$
|
925
|
|
|
$
|
925
|
|
Current period other comprehensive income
|
9,984
|
|
|
311
|
|
|
613
|
|
|
10,908
|
|
|
257
|
|
|
4
|
|
|
261
|
|
|||||||
Balance, June 30, 2016
|
$
|
8,112
|
|
|
$
|
257
|
|
|
$
|
(23,723
|
)
|
|
$
|
(15,354
|
)
|
|
$
|
257
|
|
|
$
|
929
|
|
|
$
|
1,186
|
|
|
|
Amount reclassified from AOCI
|
|
Amount reclassified from AOCI
|
|
|
||||||||||||
|
|
Three months ended June 30
|
|
Six months ended June 30
|
|
Affected line item in the
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Statements of Income / Balance Sheets
|
||||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net realized gains on securities included in net income
|
|
$
|
—
|
|
|
$
|
(360
|
)
|
|
$
|
—
|
|
|
$
|
(360
|
)
|
|
Revenues-bank (net gains on sales of securities)
|
Derivatives qualifying as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Window forward contracts
|
|
—
|
|
|
—
|
|
|
454
|
|
|
—
|
|
|
Construction in progress-electric utilities (losses on window forward contracts
-
see Note 3 for additional details)
|
||||
Interest rate contracts (settled in 2011)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
Interest expense
|
||||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
|
|
3,930
|
|
|
3,698
|
|
|
7,851
|
|
|
7,236
|
|
|
See Note 7 for additional details
|
||||
Impact of D&Os of the PUC included in regulatory assets
|
|
(3,581
|
)
|
|
(3,401
|
)
|
|
(7,194
|
)
|
|
(6,623
|
)
|
|
See Note 7 for additional details
|
||||
Total reclassifications
|
|
$
|
349
|
|
|
$
|
(63
|
)
|
|
$
|
1,111
|
|
|
$
|
307
|
|
|
|
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives qualifying as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Window forward contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
454
|
|
|
$
|
—
|
|
|
Construction in progress (losses on window forward contracts
-
see Note 3 for additional details)
|
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
|
|
3,621
|
|
|
3,391
|
|
|
7,239
|
|
|
6,627
|
|
|
See Note 7 for additional details
|
||||
Impact of D&Os of the PUC included in regulatory assets
|
|
(3,581
|
)
|
|
(3,401
|
)
|
|
(7,194
|
)
|
|
(6,623
|
)
|
|
See Note 7 for additional details
|
||||
Total reclassifications
|
|
$
|
40
|
|
|
$
|
(10
|
)
|
|
$
|
499
|
|
|
$
|
4
|
|
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||||||||||||||||||
|
|
Pension benefits
|
|
Other benefits
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Service cost
|
|
$
|
15,870
|
|
|
$
|
14,913
|
|
|
$
|
847
|
|
|
$
|
832
|
|
|
$
|
32,364
|
|
|
$
|
30,304
|
|
|
$
|
1,687
|
|
|
$
|
1,668
|
|
Interest cost
|
|
20,361
|
|
|
20,481
|
|
|
2,315
|
|
|
2,363
|
|
|
40,577
|
|
|
40,758
|
|
|
4,726
|
|
|
4,837
|
|
||||||||
Expected return on plan assets
|
|
(25,646
|
)
|
|
(24,616
|
)
|
|
(3,104
|
)
|
|
(3,091
|
)
|
|
(51,367
|
)
|
|
(49,280
|
)
|
|
(6,170
|
)
|
|
(6,143
|
)
|
||||||||
Amortization of net prior service gain
|
|
(13
|
)
|
|
(14
|
)
|
|
(448
|
)
|
|
(448
|
)
|
|
(27
|
)
|
|
(28
|
)
|
|
(897
|
)
|
|
(896
|
)
|
||||||||
Amortization of net actuarial loss
|
|
6,707
|
|
|
6,408
|
|
|
199
|
|
|
116
|
|
|
13,220
|
|
|
12,377
|
|
|
565
|
|
|
403
|
|
||||||||
Net periodic pension/benefit cost
|
|
17,279
|
|
|
17,172
|
|
|
(191
|
)
|
|
(228
|
)
|
|
34,767
|
|
|
34,131
|
|
|
(89
|
)
|
|
(131
|
)
|
||||||||
Impact of PUC D&Os
|
|
(4,867
|
)
|
|
(4,765
|
)
|
|
527
|
|
|
483
|
|
|
(10,023
|
)
|
|
(8,811
|
)
|
|
673
|
|
|
672
|
|
||||||||
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
|
|
$
|
12,412
|
|
|
$
|
12,407
|
|
|
$
|
336
|
|
|
$
|
255
|
|
|
$
|
24,744
|
|
|
$
|
25,320
|
|
|
$
|
584
|
|
|
$
|
541
|
|
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Service cost
|
|
$
|
15,436
|
|
|
$
|
14,465
|
|
|
$
|
841
|
|
|
$
|
820
|
|
|
$
|
31,530
|
|
|
$
|
29,398
|
|
|
$
|
1,676
|
|
|
$
|
1,642
|
|
Interest cost
|
|
18,726
|
|
|
18,801
|
|
|
2,231
|
|
|
2,280
|
|
|
37,315
|
|
|
37,404
|
|
|
4,558
|
|
|
4,669
|
|
||||||||
Expected return on plan assets
|
|
(23,935
|
)
|
|
(22,885
|
)
|
|
(3,056
|
)
|
|
(3,046
|
)
|
|
(47,946
|
)
|
|
(45,817
|
)
|
|
(6,073
|
)
|
|
(6,049
|
)
|
||||||||
Amortization of net prior service loss (gain)
|
|
2
|
|
|
3
|
|
|
(451
|
)
|
|
(451
|
)
|
|
4
|
|
|
7
|
|
|
(902
|
)
|
|
(902
|
)
|
||||||||
Amortization of net actuarial loss
|
|
6,190
|
|
|
5,885
|
|
|
192
|
|
|
113
|
|
|
12,196
|
|
|
11,346
|
|
|
551
|
|
|
397
|
|
||||||||
Net periodic pension/benefit cost
|
|
16,419
|
|
|
16,269
|
|
|
(243
|
)
|
|
(284
|
)
|
|
33,099
|
|
|
32,338
|
|
|
(190
|
)
|
|
(243
|
)
|
||||||||
Impact of PUC D&Os
|
|
(4,867
|
)
|
|
(4,765
|
)
|
|
527
|
|
|
483
|
|
|
(10,023
|
)
|
|
(8,811
|
)
|
|
673
|
|
|
672
|
|
||||||||
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
|
|
$
|
11,552
|
|
|
$
|
11,504
|
|
|
$
|
284
|
|
|
$
|
199
|
|
|
$
|
23,076
|
|
|
$
|
23,527
|
|
|
$
|
483
|
|
|
$
|
429
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
||||||||
Share-based compensation expense
1
|
|
$
|
2.2
|
|
|
$
|
1.0
|
|
|
$
|
3.3
|
|
|
$
|
2.0
|
|
Income tax benefit
|
|
0.8
|
|
|
0.4
|
|
|
1.2
|
|
|
0.7
|
|
||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
||||||||
Share-based compensation expense
1
|
|
0.7
|
|
|
0.3
|
|
|
1.1
|
|
|
0.6
|
|
||||
Income tax benefit
|
|
0.3
|
|
|
0.1
|
|
|
0.4
|
|
|
0.2
|
|
1
|
For the three months and six months ended June 30, 2017 and 2016, the Company has not capitalized any share-based compensation.
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Shares granted
|
|
35,000
|
|
|
—
|
|
|
35,770
|
|
|
—
|
|
||||
Fair value
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
Income tax benefit
|
|
0.4
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
||||||||||||||||
Outstanding, beginning of period
|
236,036
|
|
|
$
|
31.42
|
|
|
226,537
|
|
|
$
|
29.59
|
|
|
220,683
|
|
|
$
|
29.57
|
|
|
210,634
|
|
|
$
|
28.82
|
|
||||
Granted
|
896
|
|
|
33.06
|
|
|
—
|
|
|
—
|
|
|
97,873
|
|
|
33.47
|
|
|
94,282
|
|
|
29.90
|
|
||||||||
Vested
|
(7,370
|
)
|
|
29.17
|
|
|
(785
|
)
|
|
27.88
|
|
|
(88,994
|
)
|
|
28.88
|
|
|
(79,164
|
)
|
|
27.91
|
|
||||||||
Forfeited
|
(23,079
|
)
|
|
31.50
|
|
|
—
|
|
|
—
|
|
|
(23,079
|
)
|
|
31.50
|
|
|
—
|
|
|
—
|
|
||||||||
Outstanding, end of period
|
206,483
|
|
|
$
|
31.50
|
|
|
225,752
|
|
|
$
|
29.59
|
|
|
206,483
|
|
|
$
|
31.50
|
|
|
225,752
|
|
|
$
|
29.59
|
|
||||
Total weighted-average grant-date fair value of shares granted ($ millions)
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
3.3
|
|
|
|
|
$
|
2.8
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
||||||||||||||||
Outstanding, beginning of period
|
36,971
|
|
|
$
|
39.51
|
|
|
83,947
|
|
|
$
|
22.95
|
|
|
83,106
|
|
|
$
|
22.95
|
|
|
162,500
|
|
|
$
|
27.66
|
|
||||
Granted (target level)
|
233
|
|
|
39.51
|
|
|
—
|
|
|
—
|
|
|
37,204
|
|
|
39.51
|
|
|
—
|
|
|
—
|
|
||||||||
Vested (issued or unissued and cancelled)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83,106
|
)
|
|
22.95
|
|
|
(78,553
|
)
|
|
32.69
|
|
||||||||
Forfeited
|
(3,434
|
)
|
|
39.51
|
|
|
—
|
|
|
—
|
|
|
(3,434
|
)
|
|
39.51
|
|
|
—
|
|
|
—
|
|
||||||||
Outstanding, end of period
|
33,770
|
|
|
$
|
39.51
|
|
|
83,947
|
|
|
$
|
22.95
|
|
|
33,770
|
|
|
$
|
39.51
|
|
|
83,947
|
|
|
$
|
22.95
|
|
||||
Total weighted-average grant-date fair value of shares granted ($ millions)
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
1.5
|
|
|
|
|
$
|
—
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share determined using a Monte Carlo simulation model.
|
|
|
2017
|
|
Risk-free interest rate
|
|
1.46
|
%
|
Expected life in years
|
|
3
|
|
Expected volatility
|
|
20.1
|
%
|
Range of expected volatility for Peer Group
|
|
15.4% to 26.0%
|
|
Grant date fair value (per share)
|
|
$39.51
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
||||||||||||||||
Outstanding, beginning of period
|
147,888
|
|
|
$
|
33.48
|
|
|
113,550
|
|
|
$
|
25.18
|
|
|
109,816
|
|
|
$
|
25.18
|
|
|
222,647
|
|
|
$
|
26.02
|
|
||||
Granted (target level)
|
930
|
|
|
32.58
|
|
|
—
|
|
|
—
|
|
|
148,818
|
|
|
33.47
|
|
|
—
|
|
|
—
|
|
||||||||
Vested (issued)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109,816
|
)
|
|
25.18
|
|
|
(109,097
|
)
|
|
26.89
|
|
||||||||
Forfeited
|
(13,740
|
)
|
|
33.48
|
|
|
—
|
|
|
—
|
|
|
(13,740
|
)
|
|
33.48
|
|
|
—
|
|
|
—
|
|
||||||||
Outstanding, end of period
|
135,078
|
|
|
$
|
33.47
|
|
|
113,550
|
|
|
$
|
25.18
|
|
|
135,078
|
|
|
$
|
33.47
|
|
|
113,550
|
|
|
$
|
25.18
|
|
||||
Total weighted-average grant-date fair value of shares granted (at target performance levels) ($ millions)
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
5.0
|
|
|
|
|
$
|
—
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.
|
Six months ended June 30
|
|
2017
|
|
2016
|
||||
(in millions)
|
|
|
|
|
||||
Supplemental disclosures of cash flow information
|
|
|
|
|
|
|
||
HEI consolidated
|
|
|
|
|
||||
Interest paid to non-affiliates
|
|
$
|
46
|
|
|
$
|
43
|
|
Income taxes paid (including refundable credits)
|
|
21
|
|
|
14
|
|
||
Income taxes refunded (including refundable credits)
|
|
—
|
|
|
45
|
|
||
Hawaiian Electric consolidated
|
|
|
|
|
||||
Interest paid to non-affiliates
|
|
36
|
|
|
31
|
|
||
Income taxes paid (including refundable credits)
|
|
8
|
|
|
—
|
|
||
Income taxes refunded (including refundable credits)
|
|
—
|
|
|
20
|
|
||
Supplemental disclosures of noncash activities
|
|
|
|
|
|
|
||
HEI consolidated
|
|
|
|
|
||||
Common stock dividends reinvested in HEI common stock (financing)
1
|
|
—
|
|
|
11
|
|
||
Loans transferred from held for investment to held for sale (investing)
|
|
9
|
|
|
—
|
|
||
Common stock issued (gross) for director and executive/management compensation (financing)
2
|
|
11
|
|
|
6
|
|
||
HEI consolidated and Hawaiian Electric consolidated
|
|
|
|
|
||||
Electric utility property, plant and equipment
|
|
|
|
|
||||
Estimated fair value of noncash contributions in aid of construction (investing)
|
|
2
|
|
|
8
|
|
||
Change in unpaid invoices and accruals for capital expenditures (investing)
|
|
(7
|
)
|
|
(32
|
)
|
|
|
|
|
Estimated fair value
|
||||||||||||||||
|
|
Carrying or notional amount
|
|
Quoted prices in
active markets
for identical assets
|
|
Significant
other observable
inputs
|
|
Significant
unobservable
inputs
|
|
|
||||||||||
(in thousands)
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
|||||||||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale investment securities
|
|
$
|
1,302,886
|
|
|
$
|
—
|
|
|
$
|
1,287,459
|
|
|
$
|
15,427
|
|
|
$
|
1,302,886
|
|
Stock in Federal Home Loan Bank
|
|
11,706
|
|
|
—
|
|
|
11,706
|
|
|
—
|
|
|
11,706
|
|
|||||
Loans receivable, net
|
|
4,693,539
|
|
|
—
|
|
|
5,261
|
|
|
4,836,804
|
|
|
4,842,065
|
|
|||||
Mortgage servicing rights
|
|
9,181
|
|
|
—
|
|
|
—
|
|
|
12,270
|
|
|
12,270
|
|
|||||
Bank-owned life insurance
|
|
146,122
|
|
|
—
|
|
|
146,122
|
|
|
—
|
|
|
146,122
|
|
|||||
Derivative assets
|
|
58,120
|
|
|
47
|
|
|
798
|
|
|
—
|
|
|
845
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative assets-window forward contracts
|
|
15,995
|
|
|
—
|
|
|
615
|
|
|
—
|
|
|
615
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposit liabilities
|
|
5,724,386
|
|
|
—
|
|
|
5,721,882
|
|
|
—
|
|
|
5,721,882
|
|
|||||
Short-term borrowings—other than bank
|
|
49,789
|
|
|
—
|
|
|
49,789
|
|
|
—
|
|
|
49,789
|
|
|||||
Other bank borrowings
|
|
188,130
|
|
|
—
|
|
|
188,513
|
|
|
—
|
|
|
188,513
|
|
|||||
Long-term debt, net—other than bank
|
|
1,618,647
|
|
|
—
|
|
|
1,740,479
|
|
|
—
|
|
|
1,740,479
|
|
|||||
Derivative liabilities
|
|
8,263
|
|
|
—
|
|
|
246
|
|
|
—
|
|
|
246
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
|
43,990
|
|
|
—
|
|
|
43,990
|
|
|
—
|
|
|
43,990
|
|
|||||
Long-term debt, net
|
|
1,318,845
|
|
|
—
|
|
|
1,434,528
|
|
|
—
|
|
|
1,434,528
|
|
|||||
Derivative liabilities-window forward contracts
|
|
4,726
|
|
|
—
|
|
|
230
|
|
|
—
|
|
|
230
|
|
|||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds
|
|
$
|
13,085
|
|
|
$
|
—
|
|
|
$
|
13,085
|
|
|
$
|
—
|
|
|
$
|
13,085
|
|
Available-for-sale investment securities
|
|
1,105,182
|
|
|
—
|
|
|
1,089,755
|
|
|
15,427
|
|
|
1,105,182
|
|
|||||
Stock in Federal Home Loan Bank
|
|
11,218
|
|
|
—
|
|
|
11,218
|
|
|
—
|
|
|
11,218
|
|
|||||
Loans receivable, net
|
|
4,701,977
|
|
|
—
|
|
|
13,333
|
|
|
4,839,493
|
|
|
4,852,826
|
|
|||||
Mortgage servicing rights
|
|
9,373
|
|
|
—
|
|
|
—
|
|
|
13,216
|
|
|
13,216
|
|
|||||
Bank-owned life insurance
|
|
143,197
|
|
|
—
|
|
|
143,197
|
|
|
—
|
|
|
143,197
|
|
|||||
Derivative assets
|
|
23,578
|
|
|
—
|
|
|
453
|
|
|
—
|
|
|
453
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposit liabilities
|
|
5,548,929
|
|
|
—
|
|
|
5,546,644
|
|
|
—
|
|
|
5,546,644
|
|
|||||
Short-term borrowings—other than bank
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other bank borrowings
|
|
192,618
|
|
|
—
|
|
|
193,991
|
|
|
—
|
|
|
193,991
|
|
|||||
Long-term debt, net—other than bank
|
|
1,619,019
|
|
|
—
|
|
|
1,704,717
|
|
|
—
|
|
|
1,704,717
|
|
|||||
Derivative liabilities
|
|
53,852
|
|
|
129
|
|
|
823
|
|
|
—
|
|
|
952
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, net
|
|
1,319,260
|
|
|
—
|
|
|
1,399,490
|
|
|
—
|
|
|
1,399,490
|
|
|||||
Derivative liabilities-window forward contracts
|
|
20,734
|
|
|
—
|
|
|
743
|
|
|
—
|
|
|
743
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
Fair value measurements using
|
|
Fair value measurements using
|
||||||||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Money market funds (“other” segment)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,085
|
|
|
$
|
—
|
|
Available-for-sale investment securities (bank segment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Mortgage-related securities-FNMA, FHLMC and GNMA
|
|
$
|
—
|
|
|
$
|
1,100,876
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
897,474
|
|
|
$
|
—
|
|
U.S. Treasury and federal agency obligations
|
|
—
|
|
|
186,583
|
|
|
—
|
|
|
—
|
|
|
192,281
|
|
|
—
|
|
||||||
Mortgage revenue bond
|
|
—
|
|
|
—
|
|
|
15,427
|
|
|
—
|
|
|
—
|
|
|
15,427
|
|
||||||
|
|
$
|
—
|
|
|
$
|
1,287,459
|
|
|
$
|
15,427
|
|
|
$
|
—
|
|
|
$
|
1,089,755
|
|
|
$
|
15,427
|
|
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate lock commitments (bank segment)
1
|
|
$
|
—
|
|
|
$
|
142
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
445
|
|
|
$
|
—
|
|
Forward commitments (bank segment)
1
|
|
47
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||||
Window forward contract (electric utility segment)
2
|
|
—
|
|
|
615
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
47
|
|
|
$
|
798
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
453
|
|
|
$
|
—
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate lock commitments (bank segment)
1
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
Forward commitments (bank segment)
1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
129
|
|
|
56
|
|
|
—
|
|
||||||
Window forward contracts (electric utility segment)
2
|
|
—
|
|
|
230
|
|
|
—
|
|
|
—
|
|
|
743
|
|
|
—
|
|
||||||
|
|
$
|
—
|
|
|
$
|
246
|
|
|
$
|
—
|
|
|
$
|
129
|
|
|
$
|
823
|
|
|
$
|
—
|
|
|
|
Three months ended June 30
|
|
|
Six months ended June 30
|
|
||||||||
Mortgage revenue bond
|
|
2017
|
2016
|
|
2017
|
2016
|
||||||||
(in thousands)
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
15,427
|
|
$
|
—
|
|
|
$
|
15,427
|
|
$
|
—
|
|
Principal payments received
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Purchases
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Unrealized gain (loss) included in other comprehensive income
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Ending balance
|
|
$
|
15,427
|
|
$
|
—
|
|
|
$
|
15,427
|
|
$
|
—
|
|
|
|
|
|
Fair value measurements
|
||||||||||||
(in thousands)
|
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
June 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Loans
|
|
$
|
1,258
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,258
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Loans
|
|
2,767
|
|
|
—
|
|
|
—
|
|
|
2,767
|
|
||||
Real estate acquired in settlement of loans
|
|
1,189
|
|
|
—
|
|
|
—
|
|
|
1,189
|
|
|
|
|
|
|
|
|
|
Significant unobservable
input value
(1)
|
||||
($ in thousands)
|
|
Fair value
|
|
Valuation technique
|
|
Significant unobservable input
|
|
Range
|
|
Weighted
Average
|
||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||
Residential loan
|
|
$
|
448
|
|
|
Fair value of collateral
|
|
Appraised value less 7% selling cost
|
|
|
|
N/A (2)
|
Commercial loan
|
|
810
|
|
|
Sales price
|
|
Sales price
|
|
|
|
N/A (2)
|
|
Total loans
|
|
$
|
1,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||
Residential loans
|
|
$
|
2,468
|
|
|
Sales price
|
|
Sales price
|
|
95-100%
|
|
97%
|
Residential loans
|
|
287
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
42-65%
|
|
61%
|
|
Home equity lines of credit
|
|
12
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
|
|
N/A (2)
|
|
Total loans
|
|
$
|
2,767
|
|
|
|
|
|
|
|
|
|
Real estate acquired in settlement of loans
|
|
$
|
1,189
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
100%
|
|
100%
|
(in thousands, except per
|
|
Three months ended June 30
|
|
%
|
|
|
|||||||
share amounts)
|
|
2017
|
|
2016
|
|
change
|
|
Primary reason(s)*
|
|||||
Revenues
|
|
$
|
632,281
|
|
|
$
|
566,244
|
|
|
12
|
|
|
Increases for the electric utility and bank segments
|
Operating income
|
|
75,896
|
|
|
85,455
|
|
|
(11
|
)
|
|
Decrease for the electric utility segment, partly offset by an increase at the bank segment and lower losses for the “other” segment
|
||
Net income for common stock
|
|
38,661
|
|
|
44,128
|
|
|
(12
|
)
|
|
Lower net income for the electric utility segment, partly offset by higher net income at the bank segment and lower net loss for the “other” segment
|
||
Basic earnings per common share
|
|
$
|
0.36
|
|
|
$
|
0.41
|
|
|
(12
|
)
|
|
Lower net income and the impact of higher weighted average shares outstanding
|
Weighted-average number of common shares outstanding
|
|
108,750
|
|
|
107,962
|
|
|
1
|
|
|
Issuances of shares under the HEI Dividend Reinvestment and Stock Purchase Plan and other plans
|
(in thousands, except per
|
|
Six months ended June 30
|
|
%
|
|
|
|||||||
share amounts)
|
|
2017
|
|
2016
|
|
change
|
|
Primary reason(s)*
|
|||||
Revenues
|
|
$
|
1,223,843
|
|
|
$
|
1,117,204
|
|
|
10
|
|
|
Increases for the electric utility and bank segments
|
Operating income
|
|
143,758
|
|
|
154,306
|
|
|
(7
|
)
|
|
Decrease for the electric utility segment, partly offset by an increase at the bank segment and lower losses for the “other” segment
|
||
Net income for common stock
|
|
72,854
|
|
|
76,480
|
|
|
(5
|
)
|
|
Lower net income for the electric utility segment, partly offset by higher net income at the bank segment and lower net loss for the “other” segment
|
||
Basic earnings per common share
|
|
$
|
0.67
|
|
|
$
|
0.71
|
|
|
(6
|
)
|
|
Lower net income and the impact of higher weighted average shares outstanding
|
Weighted-average number of common shares outstanding
|
|
108,712
|
|
|
107,791
|
|
|
1
|
|
|
Issuances of shares under the HEI Dividend Reinvestment and Stock Purchase Plan and other plans
|
*
|
Also, see segment discussions which follow.
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
|
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Primary reason(s)
|
||||||||
Revenues
|
|
$
|
77
|
|
|
$
|
100
|
|
|
$
|
172
|
|
|
$
|
168
|
|
|
|
Operating loss
|
|
(3,947
|
)
|
|
(5,455
|
)
|
|
(9,183
|
)
|
|
(11,524
|
)
|
|
Second quarter and first six months of 2016 merger and spin-off-related expenses (see below), partly offset by higher other administrative and general expenses in the second quarter and first six months of 2017
|
||||
Net loss
|
|
(3,716
|
)
|
|
(5,014
|
)
|
|
(6,801
|
)
|
|
(10,702
|
)
|
|
Lower operating loss, lower interest expense (first six months) and higher tax benefits (first six months) (due to non-deductibility of certain merger- and spin-off-related expenses in the first six months of 2016 and the recognition of excess tax benefits on share-based compensation after the adoption of ASU No. 2016-09 on January 1, 2017)
|
(dollars in millions)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
Short-term borrowings—other than bank
|
|
$
|
50
|
|
|
1
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Long-term debt, net—other than bank
|
|
1,619
|
|
|
43
|
|
|
1,619
|
|
|
43
|
|
||
Preferred stock of subsidiaries
|
|
34
|
|
|
1
|
|
|
34
|
|
|
1
|
|
||
Common stock equity
|
|
2,075
|
|
|
55
|
|
|
2,067
|
|
|
56
|
|
||
|
|
$
|
3,778
|
|
|
100
|
%
|
|
$
|
3,720
|
|
|
100
|
%
|
|
|
Average balance
|
|
Balance
|
||||||||
(in millions)
|
|
Six months ended June 30, 2017
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||
Short-term borrowings
1
|
|
|
|
|
|
|
|
|
|
|||
Commercial paper
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
—
|
|
Line of credit draws
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Undrawn capacity under HEI’s line of credit facility
|
|
|
|
150
|
|
|
150
|
|
Three months ended June 30
|
|
Increase
|
|
|
||||||||||||
2017
|
|
2016
|
|
(decrease)
|
|
(dollars in millions, except per barrel amounts)
|
||||||||||
$
|
557
|
|
|
$
|
495
|
|
|
$
|
62
|
|
|
|
|
Revenues.
Net increase largely due to:
|
||
|
|
|
|
|
|
$
|
55
|
|
|
higher fuel oil prices
1
|
||||||
|
|
|
|
|
|
11
|
|
|
higher purchased power energy costs
2
|
|||||||
|
|
|
|
|
|
(8
|
)
|
|
lower RAM revenues due to expiration of 2013 settlement agreement that allowed the accrual of RAM revenues on January 1 (vs. June 1) for years 2014 to 2016 at Hawaiian Electric
|
|||||||
|
|
|
|
|
|
3
|
|
|
higher PPAC revenues
|
|||||||
|
|
|
|
|
|
2
|
|
|
higher RAM revenues
|
|||||||
|
|
|
|
|
|
(3
|
)
|
|
lower KWH generated
|
|||||||
141
|
|
|
92
|
|
|
49
|
|
|
|
|
Fuel oil expense.
Increase due to higher fuel oil prices
|
|||||
153
|
|
|
139
|
|
|
14
|
|
|
|
|
Purchased power expense.
Increase due to higher fuel oil prices
|
|||||
106
|
|
|
100
|
|
|
6
|
|
|
|
|
Operation and maintenance expenses
. Net increase due to:
|
|||||
|
|
|
|
|
|
1
|
|
|
higher overhaul costs due to timing
|
|||||||
|
|
|
|
|
|
1
|
|
|
ERP project costs commencing in 2017
|
|||||||
|
|
|
|
|
|
1
|
|
|
higher maintenance costs
|
|||||||
|
|
|
|
|
|
1
|
|
|
Grid modernization consultant costs
|
|||||||
|
|
|
|
|
|
1
|
|
|
write off of portion of deferred Geothermal RFP costs
|
|||||||
|
|
|
|
|
|
1
|
|
|
Property damage reserve for customer claim in 2017
|
|||||||
|
|
|
|
|
|
(1
|
)
|
|
LNG consulting costs incurred in 2016 to negotiate an LNG contract that was subsequently terminated following HEI/NextEra merger termination
|
|||||||
101
|
|
|
94
|
|
|
7
|
|
|
|
|
Other expenses.
Increase due to higher revenue taxes from higher revenue, coupled with higher depreciation expense for plant investments in 2016
|
|||||
55
|
|
|
71
|
|
|
(16
|
)
|
|
|
|
Operating income.
Decrease due to lower RAM revenues and higher O&M and depreciation expenses
|
|||||
26
|
|
|
36
|
|
|
(10
|
)
|
|
|
|
Net income for common stock.
Decrease due to lower operating income, partially offset by resulting lower income taxes.
|
|||||
|
|
|
|
|
|
|
|
|
||||||||
2,150
|
|
|
2,156
|
|
|
(6
|
)
|
|
|
|
Kilowatthour sales (millions)
4
|
|||||
1,278
|
|
|
1,257
|
|
|
21
|
|
|
|
|
Cooling degree days (Oahu)
|
|||||
$
|
69.86
|
|
|
$
|
44.98
|
|
|
$
|
24.88
|
|
|
|
|
Average fuel oil cost per barrel
1
|
Six months ended June 30
|
|
Increase
|
|
|
||||||||||||
2017
|
|
2016
|
|
(decrease)
|
|
(dollars in millions, except per barrel amounts)
|
||||||||||
$
|
1,075
|
|
|
$
|
977
|
|
|
$
|
98
|
|
|
|
|
Revenues.
Net increase largely due to:
|
||
|
|
|
|
|
|
$
|
90
|
|
|
higher fuel oil prices
1
|
||||||
|
|
|
|
|
|
33
|
|
|
higher purchased power energy costs
2
|
|||||||
|
|
|
|
|
|
(20
|
)
|
|
lower RAM revenues due to expiration of 2013 settlement agreement that allowed the accrual of RAM revenues on January 1 (vs. June 1) for years 2014 to 2016 at Hawaiian Electric
|
|||||||
|
|
|
|
|
|
3
|
|
|
higher RAM revenues
|
|||||||
|
|
|
|
|
|
(2
|
)
|
|
lower PPAC revenues
|
|||||||
|
|
|
|
|
|
(3
|
)
|
|
lower KWH purchased
|
|||||||
|
|
|
|
|
|
(2
|
)
|
|
lower KWH generated
|
|||||||
286
|
|
|
206
|
|
|
80
|
|
|
|
|
Fuel oil expense.
Increase due to higher fuel oil prices
|
|||||
280
|
|
|
255
|
|
|
25
|
|
|
|
|
Purchased power expense.
Increase due to higher fuel oil prices
|
|||||
207
|
|
|
203
|
|
|
4
|
|
|
|
|
Operation and maintenance expenses
. Net increase due to:
|
|||||
|
|
|
|
|
|
2
|
|
|
higher overhaul costs due to timing
|
|||||||
|
|
|
|
|
|
2
|
|
|
ERP project costs commencing in 2017
|
|||||||
|
|
|
|
|
|
2
|
|
|
higher maintenance costs
|
|||||||
|
|
|
|
|
|
1
|
|
|
Grid modernization consultant costs
|
|||||||
|
|
|
|
|
|
1
|
|
|
write off of portion of deferred Geothermal RFP costs
|
|||||||
|
|
|
|
|
|
1
|
|
|
Property damage reserve for customer claim in 2017
|
|||||||
|
|
|
|
|
|
1
|
|
|
additional reserves for environmental costs in 2017
3
|
|||||||
|
|
|
|
|
|
(4
|
)
|
|
PSIP consulting costs incurred in 2016, in order to complete the PSIP update in April 2016
|
|||||||
|
|
|
|
|
|
(3
|
)
|
|
LNG consulting costs incurred in 2016 to negotiate an LNG contract that was subsequently terminated following HEI/NextEra merger termination
|
|||||||
199
|
|
|
187
|
|
|
12
|
|
|
|
|
Other expenses.
Increase due to higher revenue taxes from higher revenue, coupled with higher depreciation expense for plant investments in 2016
|
|||||
104
|
|
|
126
|
|
|
(22
|
)
|
|
|
|
Operating income.
Decrease due to lower RAM revenues and higher O&M and depreciation expenses
|
|||||
47
|
|
|
61
|
|
|
(14
|
)
|
|
|
|
Net income for common stock.
Decrease due to lower operating income, partially offset by resulting lower income taxes.
|
|||||
|
|
|
|
|
|
|
|
|
||||||||
4,188
|
|
|
4,241
|
|
|
(53
|
)
|
|
|
|
Kilowatthour sales (millions)
4
|
|||||
2,162
|
|
|
2,141
|
|
|
21
|
|
|
|
|
Cooling degree days (Oahu)
|
|||||
$
|
67.78
|
|
|
$
|
49.05
|
|
|
$
|
18.73
|
|
|
|
|
Average fuel oil cost per barrel
1
|
||
460,858
|
|
|
458,893
|
|
|
1,965
|
|
|
|
|
Customer accounts (end of period)
|
1
|
The rate schedules of the electric utilities currently contain energy cost adjustment clauses (ECACs) through which changes in fuel oil prices and certain components of purchased energy costs are passed on to customers.
|
2
|
The rate schedules of the electric utilities currently contain purchase power adjustment clauses (PPAC) through which changes in purchase power expenses (except purchased energy costs) are passed on to customers.
|
3
|
Increase reserve for additional costs for investigation of PCB contamination onshore and offshore of Waiau Power Plant
|
4
|
KWH sales were lower when compared to the same quarter in the prior year due largely to continued energy efficiency and conservation efforts by customers and increasing levels of private customer-sited renewable generation.
|
%
|
|
Return on rate base (RORB)*
|
|
ROACE**
|
|
Rate-making ROACE***
|
|||||||||||||||||||||
Twelve months ended June 30, 2017
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|||||||||
Utility returns
|
|
6.77
|
|
|
6.71
|
|
|
6.83
|
|
|
7.25
|
|
|
6.91
|
|
|
7.50
|
|
|
7.99
|
|
|
7.54
|
|
|
7.96
|
|
PUC-allowed returns
|
|
8.11
|
|
|
8.31
|
|
|
7.34
|
|
|
10.00
|
|
|
10.00
|
|
|
9.00
|
|
|
10.00
|
|
|
10.00
|
|
|
9.00
|
|
Difference
|
|
(1.34
|
)
|
|
(1.60
|
)
|
|
(0.51
|
)
|
|
(2.75
|
)
|
|
(3.09
|
)
|
|
(1.50
|
)
|
|
(2.01
|
)
|
|
(2.46
|
)
|
|
(1.04
|
)
|
Test year
(dollars in millions)
|
|
Date
(filed/
implemented)
|
|
Amount
|
|
% over
rates in
effect
|
|
ROACE
(%)
|
|
RORB
(%)
|
|
Rate
base
|
|
Common
equity
%
|
|
Stipulated
agreement
reached with
Consumer
Advocate
|
||||||||
Hawaiian Electric
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2011
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Request
|
|
7/30/10
|
|
$
|
113.5
|
|
|
6.6
|
|
|
10.75
|
|
|
8.54
|
|
|
$
|
1,569
|
|
|
56.29
|
|
|
Yes
|
Interim increase
|
|
7/26/11
|
|
53.2
|
|
|
3.1
|
|
|
10.00
|
|
|
8.11
|
|
|
1,354
|
|
|
56.29
|
|
|
|
||
Interim increase (adjusted)
|
|
4/2/12
|
|
58.2
|
|
|
3.4
|
|
|
10.00
|
|
|
8.11
|
|
|
1,385
|
|
|
56.29
|
|
|
|
||
Interim increase (adjusted)
|
|
5/21/12
|
|
58.8
|
|
|
3.4
|
|
|
10.00
|
|
|
8.11
|
|
|
1,386
|
|
|
56.29
|
|
|
|
||
Final increase
|
|
9/1/12
|
|
58.1
|
|
|
3.4
|
|
|
10.00
|
|
|
8.11
|
|
|
1,386
|
|
|
56.29
|
|
|
|
||
2014
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Request
|
|
6/27/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2017
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Request
|
|
12/16/16
|
|
$
|
106.4
|
|
|
6.9
|
|
|
10.60
|
|
|
8.28
|
|
|
$
|
2,002
|
|
|
57.36
|
|
|
|
Hawaii Electric Light
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2010
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Request
|
|
12/9/09
|
|
$
|
20.9
|
|
|
6.0
|
|
|
10.75
|
|
|
8.73
|
|
|
$
|
487
|
|
|
55.91
|
|
|
Yes
|
Interim increase
|
|
1/14/11
|
|
6.0
|
|
|
1.7
|
|
|
10.50
|
|
|
8.59
|
|
|
465
|
|
|
55.91
|
|
|
|
||
Interim increase (adjusted)
|
|
1/1/12
|
|
5.2
|
|
|
1.5
|
|
|
10.50
|
|
|
8.59
|
|
|
465
|
|
|
55.91
|
|
|
|
||
Final increase
|
|
4/9/12
|
|
4.5
|
|
|
1.3
|
|
|
10.00
|
|
|
8.31
|
|
|
465
|
|
|
55.91
|
|
|
|
||
2013
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Request
|
|
8/16/12
|
|
$
|
19.8
|
|
|
4.2
|
|
|
10.25
|
|
|
8.30
|
|
|
$
|
455
|
|
|
57.05
|
|
|
|
Closed
|
|
3/27/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2016
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Request
|
|
9/19/16
|
|
$
|
19.3
|
|
|
6.5
|
|
|
10.60
|
|
|
8.44
|
|
|
$
|
479
|
|
|
57.12
|
|
|
Yes
|
Statements of Probable Entitlement
(which will be superceded by any PUC interim D&O)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Hawaii Electric Light
|
|
7/21/17
|
|
11.1
|
|
|
3.8
|
|
|
9.75
|
|
|
7.94
|
|
|
482
|
|
|
56.69
|
|
|
|
||
Consumer Advocate
|
|
7/21/17
|
|
9.9
|
|
|
3.4
|
|
|
9.5
|
|
|
7.8
|
|
|
482
|
|
|
56.69
|
|
|
|
||
Maui Electric
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2012
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Request
|
|
7/22/11
|
|
$
|
27.5
|
|
|
6.7
|
|
|
11.00
|
|
|
8.72
|
|
|
$
|
393
|
|
|
56.85
|
|
|
Yes
|
Interim increase
|
|
6/1/12
|
|
13.1
|
|
|
3.2
|
|
|
10.00
|
|
|
7.91
|
|
|
393
|
|
|
56.86
|
|
|
|
||
Final increase
|
|
8/1/13
|
|
5.3
|
|
|
1.3
|
|
|
9.00
|
|
|
7.34
|
|
|
393
|
|
|
56.86
|
|
|
|
||
2015
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Request
|
|
12/30/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2018
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Hawaii Electric Light’s request was primarily to cover investments for system upgrade projects, two major transmission line upgrades and increasing O&M expenses. On February 8, 2012, the PUC issued a final D&O, which reflected the approval of decoupling and cost-recovery mechanisms, and on February 21, 2012, Hawaii Electric Light filed its revised tariffs to reflect the increase in rates. On April 4, 2012, the PUC issued an order approving the revised tariffs, which became effective April 9, 2012. Hawaii Electric Light implemented the decoupling mechanism and began tracking the target revenues and actual recorded revenues via a revenue balancing account. Hawaii Electric Light also reset the heat rates and implemented heat rate deadbands and the PPAC, which provides a surcharge mechanism that more closely aligns cost recovery with costs incurred. The revised tariffs reflect a lower increase in annual revenue requirement compared to the interim increase due to factors that became effective concurrently with the revised tariffs (lower depreciation rates and lower ROACE) and, therefore, no refund to customers was required.
|
(6)
|
Parties settled on all issues except whether the stipulated ROACE of 9.75% should be reduced by up to 25 basis points for the impact of decoupling. Hawaii Electric Light’s position is that the ROACE that should be used to calculate the interim increase is 9.75% and the Consumer Advocate’s position is that the ROACE that should be used to calculate the interim should be 9.50%. Parties filed separate statement of probable entitlement. The table shows each party’s proposed interim revenue increase based on their respective proposed ROACE. See also “Hawaii Electric Light 2016 test year rate case” below.
|
(8)
|
See “Maui Electric 2015 test year rate case” below.
|
(9)
|
See “Maui Electric 2018 test year rate case” below.
|
•
|
In December 2013, Hawaiian Electric requested PUC approval for a waiver of the Na Pua Makani Power Partners, LLC’s (NPM) proposed 24-MW wind farm located in the Kahuku area on Oahu from the competitive bidding process and the PPA for Renewable As-Available Energy dated October 3, 2013 between Hawaiian Electric and NPM for the proposed 24-MW wind farm. In December 2014, the PUC approved both the waiver request and the PPA. On September 15, 2016, Hawaiian Electric filed the Amended and Restated PPA, dated August 12, 2016, which reflects the completion of the interconnection requirements study, including, among other things, amendments related to the final design of the facility, scope of work, cost, schedule and reporting milestones. The PUC conducted a public hearing on February 2, 2017, regarding the request for PUC approval to construct an overhead 46 sub-transmission line to accommodate the interconnection of the NPM wind farm. This project is expected to be placed into service by August 31, 2019.
|
•
|
In July 2015, the PUC approved the PPA for the 27.6 MW Waianae Solar project that is being developed by Eurus Energy America. The project achieved commercial operations in January 2017 and is now the largest solar project in Hawaii.
|
•
|
In July 2015, Maui Electric signed two PPAs, with Kuia Solar and South Maui Renewable Resources (which subsequently assigned its PPA to SSA Solar of HI 2, LLC and SSA Solar of HI 3, LLC, respectively), each for a 2.87-MW solar facility. In February 2016, the PUC approved both PPAs, subject to certain conditions and modifications. The guaranteed commercial operations date for the facilities was December 31, 2016, however both projects are experiencing delays and are expected to be completed by the end of the fourth quarter in 2017.
|
•
|
In September 2015, the PUC approved Hawaiian Electric’s 2-year biodiesel supply contract with Pacific Biodiesel Technologies, LLC (PBT) to supply 2 million to 3 million gallons of biodiesel at Campbell Industrial Park combustion turbine No. 1 (CIP CT-1) and the Honolulu International Airport Emergency Power Facility beginning in November 2015. The PBT contract is set to expire on November 2, 2018. PBT also has a spot buy contract with Hawaiian Electric to purchase additional quantities of biodiesel at or below the price of diesel. Some purchases of “at parity” biodiesel have been made under the spot purchase contract, which was recently extended through June 2018. REG Marketing & Logistics Group, LLC has a contingency supply contract with Hawaiian Electric to also supply biodiesel to CIP CT-1 in the event PBT is not able to supply necessary quantities. This contingency contract has been extended to November 2018, and will continue with no volume purchase requirements.
|
•
|
On April 28, 2017 Hawaiian Electric issued a Biofuel Supply Request for Proposal for 3.1 million gallons of biofuel per year for three years, to commence as early as November 2018 to be used as fuel for power generation at Hawaiian Electric’s Schofield Generating Station, the Honolulu International Airport Emergency Power Facility and any other generating unit on Oahu, as necessary.
|
•
|
On May 5, 2016, Maui Electric filed a request for the PUC to open a docket and assign an Independent Observer to oversee the Maui Electric Dispatchable Firm Generation Request for Proposals. The solicitation intends to seek approximately 20 MW of new renewable generation capacity and approximately 20 MW of fuel flexible firm generation resources on the island of Maui by 2022.
|
•
|
On June 6, 2016, Hawaiian Electric filed a request for the PUC to open a docket and assign an Independent Observer to oversee the Hawaiian Electric Renewable Energy Request for Proposals. The solicitation intends to seek new renewable energy generation on the island of Oahu to be placed into service by the end of 2020, consistent with the Five-Year Action Plan proposed in the PSIP Update Report.
|
•
|
The Utilities began accepting energy from feed-in tariff projects in 2011. As of
June 30, 2017
, there were 30 MW, 3 MW and 4 MW of installed feed-in tariff capacity from renewable energy technologies at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively.
|
•
|
As of
June 30, 2017
, there were approximately 325 MW, 75 MW and 86 MW of installed distributed renewable energy technologies (mainly PV) at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively, for tariff-based private customer generation programs, namely NEM, Customer Grid Supply and Customer Self Supply. As of June 30, 2017, an estimated 27% of single family homes on the islands the Utilities serve have installed private rooftop solar systems, and an estimated 29% of single family homes have installed, or have been approved to install, private rooftop solar systems. As of June 30, 2017, approximately 16% of the Utilities' total customers have solar systems.
|
•
|
On January 5, 2017, Hawaiian Electric issued an Onshore Wind Expression of Interest requesting expressions of interest from independent power producers that are capable of developing utility scale onshore wind projects that are eligible to capture the federal Investment Tax Credit for Large Wind on the island of Oahu. Responses have been accepted and are being evaluated.
|
•
|
On January 6, 2017, Hawaii Electric Light and Maui Electric requested the PUC to open dockets to allow them to seek proposals for new renewable energy generation on the islands of Hawaii, Maui, Molokai, and Lanai.
|
•
|
On December 12, 2016, the Utilities issued a request for information asking interested landowners to provide information about properties on Oahu, Hawaii Island, Maui, Molokai and Lanai available for utility-scale renewable energy projects or for growing biofuel feedstock. Responses have been accepted and are being evaluated.
|
•
|
Hawaiian Electric had PPAs to purchase solar energy with three affiliates of SunEdison. In February 2016, as a result of the project entities missing contract milestones, Hawaiian Electric terminated the original PPAs for the three projects. SunEdison filed Chapter 11 bankruptcy proceedings and during those proceedings, the three SunEdison affiliates were acquired by an affiliate of NRG Energy, Inc. (NRG). Hawaiian Electric then negotiated with NRG and its newly acquired affiliates and has entered into amended and restated PPAs for solar energy on Oahu with Waipio PV, LLC for 45.9 MW, Lanikuhana Solar, LLC for 14.7 MW and Kawailoa Solar, LLC for 49.0 MW. On July 27, 2017, the PUC approved the three NRG PPAs, subject to modifications and conditions. The three projects are expected to be in service by the end of 2019.
|
(dollars in millions)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
Short-term borrowings
|
|
$
|
44
|
|
|
1
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Long-term debt, net
|
|
1,319
|
|
|
41
|
|
|
1,319
|
|
|
42
|
|
||
Preferred stock
|
|
34
|
|
|
1
|
|
|
34
|
|
|
1
|
|
||
Common stock equity
|
|
1,804
|
|
|
57
|
|
|
1,800
|
|
|
57
|
|
||
|
|
$
|
3,201
|
|
|
100
|
%
|
|
$
|
3,153
|
|
|
100
|
%
|
|
|
Average balance
|
|
Balance
|
||||||||
(in millions)
|
|
Six months ended June 30, 2017
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||
Short-term borrowings
1
|
|
|
|
|
|
|
|
|
|
|||
Commercial paper
|
|
$
|
3
|
|
|
$
|
44
|
|
|
$
|
—
|
|
Line of credit draws
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Borrowings from HEI
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Undrawn capacity under line of credit facility
|
|
|
|
200
|
|
|
200
|
|
|
Six months ended June 30,
|
|
|
||||||||
(in thousands)
|
2017
|
|
2016
|
|
Change
|
||||||
Net cash provided by operating activities
|
$
|
150,676
|
|
|
$
|
194,124
|
|
|
$
|
(43,448
|
)
|
Net cash used in investing activities
|
(178,259
|
)
|
|
(180,191
|
)
|
|
1,932
|
|
|||
Net cash used in financing activities
|
(4,121
|
)
|
|
(10,803
|
)
|
|
6,682
|
|
•
|
Lower cash from an increase in accounts receivable due to timing and increase in fuel prices.
|
•
|
Lower cash from an increase in fuel oil stock due to higher fuel prices.
|
•
|
Lower cash from an increase in unbilled revenues due to higher fuel prices.
|
•
|
Lower cash from refund of federal income taxes based on bonus depreciation enacted in the fourth quarter of 2015 that was subsequently received in 2016 (similar treatment was not granted in the fourth quarter of 2016).
|
•
|
Higher cash from an increase in accounts payable due to higher fuel prices.
|
|
|
Three months ended June 30
|
|
Increase
|
|
|
||||||||
(in millions)
|
|
2017
|
|
2016
|
|
(decrease)
|
|
Primary reason(s)
|
||||||
Interest income
|
|
$
|
59
|
|
|
$
|
54
|
|
|
$
|
5
|
|
|
The increase in interest income was the result of higher average earning asset balances and an increase in yields on earning assets. ASB’s average loan portfolio balance for the three months ended June 30, 2017 increased by $24 million compared to the same period in 2016 as average consumer, commercial real estate and home equity lines of credit balances increased by $60 million, $50 million and $21 million, respectively. The growth in these loan portfolios was reflective of ASB’s portfolio mix target and loan growth strategy. The average commercial loan balance decreased by $99 million primarily due to a decrease in the syndicated national credit loan portfolio. The yield on earning assets increased by 7 basis points due to a shift in the mix of the loan portfolio with the growth in the commercial real estate and consumer loan portfolios, which resulted in an increase in loan portfolio yields of 19 basis points and repricing of adjustable rate commercial loans with the increase in the interest rate environment. The average investment securities portfolio balance increased by $389 million due to the use of excess liquidity to purchase investments. The yield on the investment securities portfolio increased by 14 basis points as new investment purchase yields were higher due to the increase in short-term interest rates.
|
Noninterest income
|
|
16
|
|
|
17
|
|
|
(1
|
)
|
|
Noninterest income decreased slightly for the three months ended June 30, 2017 compared to noninterest income for the three months ended June 30, 2016 due to lower mortgage banking income partly offset by higher bank owned life insurance income. Prior year’s noninterest income included gains on sales of securities with no similar sales in 2017.
|
|||
Revenues
|
|
75
|
|
|
71
|
|
|
4
|
|
|
|
|||
Interest expense
|
|
3
|
|
|
3
|
|
|
—
|
|
|
Interest expense was flat for the three months ended June 30, 2017 compared to the same period in 2016 as higher interest expense from the growth in term certificates was offset by lower interest expense on other borrowings as a result of lower repurchase agreements. Average deposit balances for the three months ended June 30, 2017 increased by $487 million compared to the same period in 2016 due to an increase in core deposits and term certificates of $327 million and $160 million, respectively. Other borrowings decreased by $84 million primarily due to a decrease in repurchase agreements. The interest-bearing liability rate decreased by 2 basis points.
|
|||
Provision for loan losses
|
|
3
|
|
|
5
|
|
|
(2
|
)
|
|
The provision for loan losses decreased by $1.9 million for the three months ended June 30, 2017 compared to the provision for loan losses for the three months ended June 30, 2016. The provision for loan losses for 2017 was primarily due to increased loan loss reserves for the consumer loan portfolio. The provision for loan losses for 2016 was primarily due to increased reserves for growth in the loan portfolio, additional loan loss reserves for the consumer loan portfolio and loan loss reserves for commercial loans due to downgrades of specific commercial credits. Delinquency rates have decreased from 0.49% at June 30, 2016 to 0.44% at June 30, 2017. The annualized net charge-off ratio for the three months ended June 30, 2017 was 0.21% compared to an annualized net charge-off ratio of 0.15% for the same period in 2016. The increase in net charge-offs were due to an increase in consumer loan portfolio charge-offs as a result of ASB’s strategic expansion of its unsecured consumer loan product offering with risk-based pricing.
|
|||
Noninterest expense
|
|
45
|
|
|
43
|
|
|
2
|
|
|
The increase in noninterest expense for the three months ended June 30, 2017 compared to the same period in 2016 was primarily due to higher compensation and employee benefits expenses as a result of higher performance-based compensation costs and higher employee benefit costs. Prior year’s noninterest expense included costs related to the replacement and upgrade of the electronic banking platform.
|
|||
Expenses
|
|
51
|
|
|
51
|
|
|
—
|
|
|
|
|||
Operating income
|
|
24
|
|
|
20
|
|
|
4
|
|
|
Higher net interest income and lower provision for loan losses was partly offset by higher noninterest expenses and lower noninterest income.
|
|||
Net income
|
|
17
|
|
|
13
|
|
|
4
|
|
|
|
|
|
Six months ended June 30
|
|
Increase
|
|
|
||||||||
(in millions)
|
|
2017
|
|
2016
|
|
(decrease)
|
|
Primary reason(s)
|
||||||
Interest income
|
|
$
|
117
|
|
|
$
|
108
|
|
|
$
|
9
|
|
|
The increase in interest income was the result of higher average earning asset balances and an increase in yields on earning assets. ASB’s average loan portfolio balance for the six months ended June 30, 2017 increased by $60 million compared to the same period in 2016 as average commercial real estate, consumer and home equity lines of credit balances increased by $76 million, $60 million and $19 million, respectively. The growth in these loan portfolios was reflective of ASB’s portfolio mix target and loan growth strategy. The average commercial loan balance decreased by $89 million primarily due to a decrease in the syndicated national credit loan portfolio. The yield on earning assets increased by 6 basis points due to a shift in the mix of the loan portfolio with the growth in the commercial real estate and consumer loan portfolios, which resulted in an increase in loan portfolio yields of 16 basis points and repricing of adjustable rate commercial loans with the increase in the interest rate environment. The average investment securities portfolio balance increased by $347 million due to the use of excess liquidity to purchase investments. The yield on the investment securities portfolio increased by 10 basis points as new investment purchase yields were higher due to the increase in short-term interest rates.
|
Noninterest income
|
|
31
|
|
|
32
|
|
|
(1
|
)
|
|
Noninterest income decreased slightly for the six months ended June 30, 2017 compared to noninterest income for the six months ended June 30, 2016 due to lower mortgage banking income partly offset by higher bank-owned life insurance income.
|
|||
Revenues
|
|
148
|
|
|
140
|
|
|
8
|
|
|
|
|||
Interest expense
|
|
6
|
|
|
6
|
|
|
—
|
|
|
Interest expense was flat for the six months ended June 30, 2017 compared to the same period in 2016 as higher interest expense from the growth in term certificates was offset by lower interest expense on other borrowings as a result of lower repurchase agreements. Average deposit balances for the six months ended June 30, 2017 increased by $511 million compared to the same period in 2016 due to an increase in core deposits and term certificates of $350 million and $161 million, respectively. Other borrowings decreased by $100 million primarily due to a decrease in repurchase agreements. The interest-bearing liability rate decreased by 3 basis points.
|
|||
Provision for loan losses
|
|
7
|
|
|
10
|
|
|
(3
|
)
|
|
The provision for loan losses decreased by $2.8 million for the six months ended June 30, 2017 compared to the provision for loan losses for the six months ended June 30, 2016. The provision for loan losses for 2017 was primarily due to increased loan loss reserves for the consumer loan portfolio and additional loan loss reserves for the commercial real estate loan portfolio due to the downgrade of a commercial real estate relationship. The provision for loan losses for 2016 was primarily due to increased reserves for growth in the loan portfolio, additional loan loss reserves for the consumer loan portfolio and loan loss reserves for commercial loans due to downgrades of specific commercial credits. Delinquency rates have decreased from 0.49% at June 30, 2016 to 0.44% at June 30, 2017. The annualized net charge-off ratio for the six months ended June 30, 2017 was 0.25% compared to an annualized net charge-off ratio of 0.18% for the same period in 2016. The increase in net charge-offs were due to an increase in consumer loan portfolio charge-offs as a result of ASB’s strategic expansion of its unsecured consumer loan product offering with risk-based pricing.
|
|||
Noninterest expense
|
|
86
|
|
|
84
|
|
|
2
|
|
|
The increase in noninterest expense for the six months ended June 30, 2017 compared to the same period in 2016 was primarily due to higher compensation and employee benefits expenses as a result of higher performance-based compensation costs and higher employee benefit costs. Prior year’s noninterest expense included costs related to the replacement and upgrade of the electronic banking platform.
|
|||
Expenses
|
|
99
|
|
|
100
|
|
|
(1
|
)
|
|
|
|||
Operating income
|
|
49
|
|
|
40
|
|
|
9
|
|
|
Higher net interest income and lower provision for loan losses was partly offset by higher noninterest expenses and lower noninterest income.
|
|||
Net income
|
|
33
|
|
|
26
|
|
|
7
|
|
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||
(percent)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Return on average assets
|
|
1.02
|
|
|
0.86
|
|
|
1.00
|
|
|
0.85
|
|
Return on average equity
|
|
11.25
|
|
|
9.22
|
|
|
11.04
|
|
|
9.06
|
|
Net interest margin
|
|
3.68
|
|
|
3.58
|
|
|
3.68
|
|
|
3.60
|
|
|
|
Three months ended June 30
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||||||
(dollars in thousands)
|
|
Average
balance |
|
Interest
1
income/ expense |
|
Yield/
rate (%) |
|
Average
balance |
|
Interest
1
income/ expense |
|
Yield/
rate (%) |
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest-earning deposits
|
|
$
|
46,507
|
|
|
$
|
121
|
|
|
1.03
|
|
|
$
|
64,821
|
|
|
$
|
81
|
|
|
0.49
|
|
FHLB stock
|
|
11,759
|
|
|
57
|
|
|
1.96
|
|
|
11,284
|
|
|
44
|
|
|
1.58
|
|
||||
Available-for-sale investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
1,267,945
|
|
|
6,481
|
|
|
2.04
|
|
|
894,684
|
|
|
4,318
|
|
|
1.93
|
|
||||
Non-taxable
|
|
15,427
|
|
|
160
|
|
|
4.11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total available-for-sale investment securities
|
|
1,283,372
|
|
|
6,641
|
|
|
2.07
|
|
|
894,684
|
|
|
4,318
|
|
|
1.93
|
|
||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
|
2,070,450
|
|
|
22,163
|
|
|
4.28
|
|
|
2,075,255
|
|
|
22,201
|
|
|
4.28
|
|
||||
Commercial real estate
|
|
917,019
|
|
|
9,722
|
|
|
4.21
|
|
|
867,266
|
|
|
8,716
|
|
|
4.01
|
|
||||
Home equity line of credit
|
|
877,462
|
|
|
7,248
|
|
|
3.31
|
|
|
856,960
|
|
|
6,989
|
|
|
3.28
|
|
||||
Residential land
|
|
16,111
|
|
|
217
|
|
|
5.38
|
|
|
18,758
|
|
|
285
|
|
|
6.08
|
|
||||
Commercial
|
|
663,200
|
|
|
7,090
|
|
|
4.27
|
|
|
762,247
|
|
|
7,595
|
|
|
3.99
|
|
||||
Consumer
|
|
202,914
|
|
|
5,877
|
|
|
11.62
|
|
|
142,955
|
|
|
3,904
|
|
|
10.98
|
|
||||
Total loans
2,3
|
|
4,747,156
|
|
|
52,317
|
|
|
4.40
|
|
|
4,723,441
|
|
|
49,690
|
|
|
4.21
|
|
||||
Total interest-earning assets
2
|
|
6,088,794
|
|
|
59,136
|
|
|
3.88
|
|
|
5,694,230
|
|
|
54,133
|
|
|
3.81
|
|
||||
Allowance for loan losses
|
|
(56,715
|
)
|
|
|
|
|
|
|
|
(52,749
|
)
|
|
|
|
|
|
|
||||
Non-interest-earning assets
|
|
534,581
|
|
|
|
|
|
|
|
|
503,617
|
|
|
|
|
|
|
|
||||
Total assets
|
|
$
|
6,566,660
|
|
|
|
|
|
|
|
|
$
|
6,145,098
|
|
|
|
|
|
|
|
||
Liabilities and shareholder’s equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Savings
|
|
$
|
2,274,832
|
|
|
$
|
386
|
|
|
0.07
|
|
|
$
|
2,099,422
|
|
|
$
|
343
|
|
|
0.07
|
|
Interest-bearing checking
|
|
908,864
|
|
|
59
|
|
|
0.03
|
|
|
834,821
|
|
|
42
|
|
|
0.02
|
|
||||
Money market
|
|
146,962
|
|
|
45
|
|
|
0.12
|
|
|
165,433
|
|
|
52
|
|
|
0.13
|
|
||||
Time certificates
|
|
679,866
|
|
|
1,821
|
|
|
1.07
|
|
|
520,151
|
|
|
1,254
|
|
|
0.97
|
|
||||
Total interest-bearing deposits
|
|
4,010,524
|
|
|
2,311
|
|
|
0.23
|
|
|
3,619,827
|
|
|
1,691
|
|
|
0.19
|
|
||||
Advances from Federal Home Loan Bank
|
|
101,335
|
|
|
788
|
|
|
3.08
|
|
|
101,648
|
|
|
785
|
|
|
3.06
|
|
||||
Securities sold under agreements to repurchase
|
|
95,740
|
|
|
36
|
|
|
0.15
|
|
|
179,559
|
|
|
682
|
|
|
1.51
|
|
||||
Total interest-bearing liabilities
|
|
4,207,599
|
|
|
3,135
|
|
|
0.30
|
|
|
3,901,034
|
|
|
3,158
|
|
|
0.32
|
|
||||
Non-interest bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
|
1,664,592
|
|
|
|
|
|
|
|
|
1,568,725
|
|
|
|
|
|
|
|
||||
Other
|
|
99,710
|
|
|
|
|
|
|
|
|
98,678
|
|
|
|
|
|
|
|
||||
Shareholder’s equity
|
|
594,759
|
|
|
|
|
|
|
|
|
576,661
|
|
|
|
|
|
|
|
||||
Total liabilities and shareholder’s equity
|
|
$
|
6,566,660
|
|
|
|
|
|
|
|
|
$
|
6,145,098
|
|
|
|
|
|
|
|
||
Net interest income
|
|
|
|
|
$
|
56,001
|
|
|
|
|
|
|
|
|
$
|
50,975
|
|
|
|
|
||
Net interest margin (%)
4
|
|
|
|
|
|
|
|
3.68
|
|
|
|
|
|
|
|
|
3.58
|
|
|
|
Six months ended June 30
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||||||
(dollars in thousands)
|
|
Average
balance |
|
Interest
1
income/ expense |
|
Yield/
rate (%) |
|
Average
balance |
|
Interest
1
income/ expense |
|
Yield/
rate (%) |
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest-earning deposits
|
|
$
|
69,421
|
|
|
$
|
307
|
|
|
0.88
|
|
|
$
|
72,070
|
|
|
$
|
180
|
|
|
0.49
|
|
FHLB stock
|
|
11,498
|
|
|
105
|
|
|
1.85
|
|
|
11,031
|
|
|
88
|
|
|
1.61
|
|
||||
Available-for-sale investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
1,206,272
|
|
|
13,130
|
|
|
2.18
|
|
|
874,542
|
|
|
9,192
|
|
|
2.10
|
|
||||
Non-taxable
|
|
15,427
|
|
|
310
|
|
|
4.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total available-for-sale investment securities
|
|
1,221,699
|
|
|
13,440
|
|
|
2.20
|
|
|
874,542
|
|
|
9,192
|
|
|
2.10
|
|
||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
|
2,071,931
|
|
|
43,789
|
|
|
4.23
|
|
|
2,075,890
|
|
|
44,521
|
|
|
4.29
|
|
||||
Commercial real estate
|
|
913,940
|
|
|
19,134
|
|
|
4.18
|
|
|
837,837
|
|
|
16,880
|
|
|
4.02
|
|
||||
Home equity line of credit
|
|
872,973
|
|
|
14,364
|
|
|
3.32
|
|
|
854,145
|
|
|
13,854
|
|
|
3.26
|
|
||||
Residential land
|
|
17,057
|
|
|
495
|
|
|
5.80
|
|
|
18,482
|
|
|
561
|
|
|
6.07
|
|
||||
Commercial
|
|
666,741
|
|
|
14,245
|
|
|
4.30
|
|
|
755,510
|
|
|
14,967
|
|
|
3.96
|
|
||||
Consumer
|
|
195,158
|
|
|
11,032
|
|
|
11.40
|
|
|
135,572
|
|
|
7,344
|
|
|
10.89
|
|
||||
Total loans
2,3
|
|
4,737,800
|
|
|
103,059
|
|
|
4.36
|
|
|
4,677,436
|
|
|
98,127
|
|
|
4.20
|
|
||||
Total interest-earning assets
2
|
|
6,040,418
|
|
|
116,911
|
|
|
3.88
|
|
|
5,635,079
|
|
|
107,587
|
|
|
3.82
|
|
||||
Allowance for loan losses
|
|
(56,477
|
)
|
|
|
|
|
|
|
|
(51,599
|
)
|
|
|
|
|
|
|
||||
Non-interest-earning assets
|
|
527,302
|
|
|
|
|
|
|
|
|
500,412
|
|
|
|
|
|
|
|
||||
Total assets
|
|
$
|
6,511,243
|
|
|
|
|
|
|
|
|
$
|
6,083,892
|
|
|
|
|
|
|
|
||
Liabilities and shareholder’s equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Savings
|
|
$
|
2,261,549
|
|
|
$
|
760
|
|
|
0.07
|
|
|
$
|
2,073,790
|
|
|
$
|
676
|
|
|
0.07
|
|
Interest-bearing checking
|
|
897,346
|
|
|
114
|
|
|
0.03
|
|
|
828,345
|
|
|
84
|
|
|
0.02
|
|
||||
Money market
|
|
151,293
|
|
|
92
|
|
|
0.12
|
|
|
166,338
|
|
|
105
|
|
|
0.13
|
|
||||
Time certificates
|
|
670,717
|
|
|
3,448
|
|
|
1.04
|
|
|
509,884
|
|
|
2,418
|
|
|
0.95
|
|
||||
Total interest-bearing deposits
|
|
3,980,905
|
|
|
4,414
|
|
|
0.22
|
|
|
3,578,357
|
|
|
3,283
|
|
|
0.18
|
|
||||
Advances from Federal Home Loan Bank
|
|
100,671
|
|
|
1,563
|
|
|
3.09
|
|
|
101,854
|
|
|
1,571
|
|
|
3.05
|
|
||||
Securities sold under agreements to repurchase
|
|
94,713
|
|
|
77
|
|
|
0.16
|
|
|
193,296
|
|
|
1,381
|
|
|
1.42
|
|
||||
Total interest-bearing liabilities
|
|
4,176,289
|
|
|
6,054
|
|
|
0.29
|
|
|
3,873,507
|
|
|
6,235
|
|
|
0.32
|
|
||||
Non-interest bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
|
1,646,275
|
|
|
|
|
|
|
|
|
1,537,660
|
|
|
|
|
|
|
|
||||
Other
|
|
98,875
|
|
|
|
|
|
|
|
|
99,427
|
|
|
|
|
|
|
|
||||
Shareholder’s equity
|
|
589,804
|
|
|
|
|
|
|
|
|
573,298
|
|
|
|
|
|
|
|
||||
Total liabilities and shareholder’s equity
|
|
$
|
6,511,243
|
|
|
|
|
|
|
|
|
$
|
6,083,892
|
|
|
|
|
|
|
|
||
Net interest income
|
|
|
|
|
$
|
110,857
|
|
|
|
|
|
|
|
|
$
|
101,352
|
|
|
|
|
||
Net interest margin (%)
4
|
|
|
|
|
|
|
|
3.68
|
|
|
|
|
|
|
|
|
3.60
|
|
1
|
Interest income includes taxable equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $0.06 million and nil for the three months ended
June 30, 2017
and 2016, respectively and $0.1 million and nil for the six months ended
June 30, 2017
and 2016, respectively.
|
3
|
Includes recognition of deferred loan fees of $0.6 million and $0.7 million for the three months ended
June 30, 2017
and 2016 and $1.1 million and $1.5 million for the six months ended
June 30, 2017
and 2016, respectively, together with interest accrued prior to suspension of interest accrual on nonaccrual loans.
|
4
|
Defined as net interest income as a percentage of average total interest-earning assets.
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
(dollars in thousands)
|
|
Balance
|
|
% of total
|
|
Balance
|
|
% of total
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Residential 1-4 family
|
|
$
|
2,061,549
|
|
|
43.4
|
|
|
$
|
2,048,051
|
|
|
43.2
|
|
Commercial real estate
|
|
808,900
|
|
|
17.1
|
|
|
800,395
|
|
|
16.9
|
|
||
Home equity line of credit
|
|
883,135
|
|
|
18.6
|
|
|
863,163
|
|
|
18.2
|
|
||
Residential land
|
|
16,009
|
|
|
0.3
|
|
|
18,889
|
|
|
0.4
|
|
||
Commercial construction
|
|
116,548
|
|
|
2.5
|
|
|
126,768
|
|
|
2.7
|
|
||
Residential construction
|
|
10,759
|
|
|
0.2
|
|
|
16,080
|
|
|
0.3
|
|
||
Total real estate, net
|
|
3,896,900
|
|
|
82.1
|
|
|
3,873,346
|
|
|
81.7
|
|
||
Commercial
|
|
649,657
|
|
|
13.7
|
|
|
692,051
|
|
|
14.6
|
|
||
Consumer
|
|
201,199
|
|
|
4.2
|
|
|
178,222
|
|
|
3.7
|
|
||
|
|
4,747,756
|
|
|
100.0
|
|
|
4,743,619
|
|
|
100.0
|
|
||
Less: Deferred fees and discounts
|
|
(3,122
|
)
|
|
|
|
|
(4,926
|
)
|
|
|
|
||
Allowance for loan losses
|
|
(56,356
|
)
|
|
|
|
|
(55,533
|
)
|
|
|
|
||
Total loans, net
|
|
$
|
4,688,278
|
|
|
|
|
|
$
|
4,683,160
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Outstanding balance of home equity loans (in thousands)
|
|
$
|
883,135
|
|
|
$
|
863,163
|
|
Percent of portfolio in first lien position
|
|
46.2
|
%
|
|
45.1
|
%
|
||
Annualized net charge-off (recovery) ratio
|
|
(0.03
|
)%
|
|
0.01
|
%
|
||
Delinquency ratio
|
|
0.28
|
%
|
|
0.35
|
%
|
|
|
|
|
|
|
End of draw period – interest only
|
|
Current
|
||||||||||||||||
June 30, 2017
|
|
Total
|
|
Interest only
|
|
2017-2018
|
|
2019-2021
|
|
Thereafter
|
|
amortizing
|
||||||||||||
Outstanding balance (in thousands)
|
|
$
|
883,135
|
|
|
$
|
701,709
|
|
|
$
|
62,453
|
|
|
$
|
101,546
|
|
|
$
|
537,710
|
|
|
$
|
181,426
|
|
% of total
|
|
100
|
%
|
|
79
|
%
|
|
7
|
%
|
|
11
|
%
|
|
61
|
%
|
|
21
|
%
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
(dollars in thousands)
|
|
Balance
|
|
% of total
|
|
Balance
|
|
% of total
|
||||||
U.S. Treasury and federal agency obligations
|
|
$
|
186,583
|
|
|
14
|
%
|
|
$
|
192,281
|
|
|
18
|
%
|
Mortgage-related securities — FNMA, FHLMC and GNMA
|
|
1,100,876
|
|
|
85
|
|
|
897,474
|
|
|
81
|
|
||
Mortgage revenue bond
|
|
15,427
|
|
|
1
|
|
|
15,427
|
|
|
1
|
|
||
Total available-for-sale investment securities
|
|
$
|
1,302,886
|
|
|
100
|
%
|
|
$
|
1,105,182
|
|
|
100
|
%
|
|
|
Six months ended June 30
|
|
Year ended
December 31,
|
||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2016
|
||||||
Allowance for loan losses, January 1
|
|
$
|
55,533
|
|
|
$
|
50,038
|
|
|
$
|
50,038
|
|
Provision for loan losses
|
|
6,741
|
|
|
9,519
|
|
|
16,763
|
|
|||
Less: net charge-offs
|
|
5,918
|
|
|
4,226
|
|
|
11,268
|
|
|||
Allowance for loan losses, end of period
|
|
$
|
56,356
|
|
|
$
|
55,331
|
|
|
$
|
55,533
|
|
Ratio of net charge-offs during the period to average loans outstanding (annualized)
|
|
0.25
|
%
|
|
0.18
|
%
|
|
0.24
|
%
|
Effective dates
|
|
1/1/2015
|
|
1/1/2016
|
|
1/1/2017
|
|
1/1/2018
|
|
1/1/2019
|
|||||
Capital conservation buffer
|
|
|
|
|
0.625
|
%
|
|
1.25
|
%
|
|
1.875
|
%
|
|
2.50
|
%
|
Common equity Tier-1 ratio + conservation buffer
|
|
4.50
|
%
|
|
5.125
|
%
|
|
5.75
|
%
|
|
6.375
|
%
|
|
7.00
|
%
|
Tier-1 capital ratio + conservation buffer
|
|
6.00
|
%
|
|
6.625
|
%
|
|
7.25
|
%
|
|
7.875
|
%
|
|
8.50
|
%
|
Total capital ratio + conservation buffer
|
|
8.00
|
%
|
|
8.625
|
%
|
|
9.25
|
%
|
|
9.875
|
%
|
|
10.50
|
%
|
Tier-1 leverage ratio
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Countercyclical capital buffer — not applicable to ASB
|
|
|
|
|
0.625
|
%
|
|
1.25
|
%
|
|
1.875
|
%
|
|
2.50
|
%
|
(dollars in millions)
|
|
June 30, 2017
|
|
December 31, 2016
|
|
% change
|
|||||
Total assets
|
|
$
|
6,611
|
|
|
$
|
6,421
|
|
|
3
|
|
Available-for-sale investment securities
|
|
1,303
|
|
|
1,105
|
|
|
18
|
|
||
Loans receivable held for investment, net
|
|
4,688
|
|
|
4,683
|
|
|
—
|
|
||
Deposit liabilities
|
|
5,724
|
|
|
5,549
|
|
|
3
|
|
||
Other bank borrowings
|
|
188
|
|
|
193
|
|
|
(3
|
)
|
Change in interest rates
|
|
Change in NII
(gradual change in interest rates)
|
|
Change in EVE
(instantaneous change in interest rates)
|
||||||||
(basis points)
|
|
June 30, 2017
|
|
December 31, 2016
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
+300
|
|
2.6
|
%
|
|
1.9
|
%
|
|
(7.6
|
)%
|
|
(8.0
|
)%
|
+200
|
|
1.7
|
|
|
0.8
|
|
|
(4.1
|
)
|
|
(4.6
|
)
|
+100
|
|
0.8
|
|
|
—
|
|
|
(1.1
|
)
|
|
(1.6
|
)
|
-100
|
|
(1.4
|
)
|
|
(0.5
|
)
|
|
(3.5
|
)
|
|
(1.6
|
)
|
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
|
|
April 1 to 30, 2017
|
|
39,114
|
|
|
$33.51
|
|
—
|
|
NA
|
May 1 to 31, 2017
|
|
33,303
|
|
|
$32.87
|
|
—
|
|
NA
|
June 1 to 30, 2017
|
|
193,655
|
|
|
$33.64
|
|
—
|
|
NA
|
|
|
Six months ended June 30
|
|
Years ended December 31
|
|||||||||||||||||
|
|
2017
|
|
2016
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||||
HEI and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding interest on ASB deposits
|
|
3.31
|
|
|
3.64
|
|
|
5.05
|
|
|
3.68
|
|
|
3.80
|
|
|
3.55
|
|
|
3.30
|
|
Including interest on ASB deposits
|
|
3.11
|
|
|
3.46
|
|
|
4.75
|
|
|
3.54
|
|
|
3.65
|
|
|
3.42
|
|
|
3.15
|
|
Hawaiian Electric and Subsidiaries
|
|
2.90
|
|
|
3.76
|
|
|
4.11
|
|
|
3.97
|
|
|
4.04
|
|
|
3.72
|
|
|
3.37
|
|
HEI Exhibit.10.1
|
|
Second Amended and Restated Credit Agreement, dated as of June 30, 2017, among HEI, as Borrower, the Lenders Party Thereto and Wells Fargo Bank, National Association, as Syndication Agent, and Bank of America, N.A., MUFG Union Bank, N.A., Barclays Bank PLC, U.S. Bank National Association and Bank of Hawaii as Co-Documentation Agents, and JPMorgan Chase Bank, N.A., as Administrative Agent, Swingline Lender and Issuing Bank, and JPMorgan Chase Bank, N.A. and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Book Runners
|
|
|
|
HEI Exhibit 12.1
|
|
Hawaiian Electric Industries, Inc. and Subsidiaries
Computation of ratio of earnings to fixed charges, six months ended June 30, 2017 and 2016 and years ended December 31, 2016, 2015, 2014, 2013 and 2012
|
|
|
|
HEI Exhibit 31.1
|
|
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Constance H. Lau (HEI Chief Executive Officer)
|
|
|
|
HEI Exhibit 31.2
|
|
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Gregory C. Hazelton (HEI Chief Financial Officer)
|
|
|
|
HEI Exhibit 32.1
|
|
HEI Certification Pursuant to 18 U.S.C. Section 1350
|
|
|
|
HEI Exhibit 101.INS
|
|
XBRL Instance Document
|
|
|
|
HEI Exhibit 101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
HEI Exhibit 101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
HEI Exhibit 101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
HEI Exhibit 101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
HEI Exhibit 101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
Hawaiian Electric Exhibit 2
|
|
Termination Agreement, dated July 14, 2017, by and among Hamakua Energy Partners, L.P. and Hamakua Land Partnership, L.L.P. and Hawaii Electric Light Company, Inc.
|
|
|
|
Hawaiian Electric Exhibit 10.2
|
|
Second Amended and Restated Credit Agreement, dated as of June 30, 2017, among Hawaiian Electric Company, Inc., as Borrower, the Lenders Party Hereto and Wells Fargo Bank, National Association, as Syndication Agent, and Bank of America, N.A., MUFG Union Bank, N.A., Barclays Bank PLC, U.S. Bank National Association and Bank of Hawaii as Co-Documentation Agents, and JPMorgan Chase Bank, N.A., as Administrative Agent, Swingline Lender and Issuing Bank, and JPMorgan Chase Bank, N.A. and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Book Runners
|
|
|
|
Hawaiian Electric Exhibit 12.2
|
|
Hawaiian Electric Company, Inc. and Subsidiaries
Computation of ratio of earnings to fixed charges, six months ended June 30, 2017 and 2016 and years ended December 31, 2016, 2015, 2014, 2013 and 2012
|
|
|
|
Hawaiian Electric Exhibit 31.3
|
|
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Alan M. Oshima (Hawaiian Electric Chief Executive Officer)
|
|
|
|
Hawaiian Electric Exhibit 31.4
|
|
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 Exhibit 32.2
|
|
Hawaiian Electric Certification Pursuant to 18 U.S.C. Section 1350
|
HAWAIIAN ELECTRIC INDUSTRIES, INC.
|
|
HAWAIIAN ELECTRIC COMPANY, INC.
|
||
(Registrant)
|
|
(Registrant)
|
||
|
|
|
||
|
|
|
||
By
|
/s/ Constance H. Lau
|
|
By
|
/s/ Alan M. Oshima
|
|
Constance H. Lau
|
|
|
Alan M. Oshima
|
|
President and Chief Executive Officer
|
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer of HEI)
|
|
|
(Principal Executive Officer of Hawaiian Electric)
|
|
|
|
||
|
|
|
||
By
|
/s/ Gregory C. Hazelton
|
|
By
|
/s/ Tayne S. Y. Sekimura
|
|
Gregory C. Hazelton
|
|
|
Tayne S. Y. Sekimura
|
|
Executive Vice President and
|
|
|
Senior Vice President
|
|
Chief Financial Officer
|
|
|
and Chief Financial Officer
|
|
(Principal Financial and Accounting
|
|
|
(Principal Financial Officer of Hawaiian Electric)
|
|
Officer of HEI)
|
|
|
|
|
|
|
||
|
|
|
||
Date: August 3, 2017
|
|
Date: August 3, 2017
|
|
HAMAKUA ENERGY PARTNERS, L.P.
|
|
By:
/s/ Daniel R. Revers
Name: Daniel R. Revers Title: Representative of BR Landing, LLC, Its General Partner |
|
By:
/s/ Christine Miller
Name: Christine Miller Title: Representative of BR Hamakua, LLC, Its General Partner |
|
HAMAKUA LAND PARTNERSHIP, L.L.P.
|
|
By:
/s/ Daniel R. Revers
Name: Daniel R. Revers Title: Representative of BR Landing, LLC, Its Partner |
|
By:
/s/ Christine Miller
Name: Christine Miller Title: Representative of BR Landing, LLC, Its Partner |
|
HAWAI'I ELECTRIC LIGHT COMPANY, INC.
|
|
By:
/s/ Jay Ignacio
Name: Jay Ignacio Title: President |
|
By:
/s/ Susan A. Li
Name: Susan A. Li Title: Vice President and Secretary |
|
TABLE OF CONTENTS
|
|
|
ARTICLE 1.
|
DEFINITIONS
|
1
|
|
Section 1.01
|
Defined Terms
|
1
|
|
Section 1.02
|
Terms Generally
|
22
|
|
Section 1.03
|
Accounting Terms; GAAP
|
22
|
|
Section 1.04
|
Amendment and Restatement of the Existing Credit Agreement
|
23
|
|
|
|
|
|
ARTICLE 2.
|
THE CREDITS
|
23
|
|
Section 2.01
|
Commitments
|
24
|
|
Section 2.02
|
Loans and Borrowings
|
24
|
|
Section 2.03
|
Requests for Borrowings
|
25
|
|
Section 2.04
|
Funding of Borrowings
|
25
|
|
Section 2.05
|
Termination, Reduction and Increase of Commitments
|
26
|
|
Section 2.06
|
Repayment of Loans; Evidence of Debt
|
27
|
|
Section 2.07
|
Prepayment of Loans
|
28
|
|
Section 2.08
|
Payments Generally; Pro Rata Treatment; Sharing of Setoffs
|
29
|
|
Section 2.09
|
Letter of Credit Sub-Facility
|
31
|
|
Section 2.10
|
Letter of Credit Participation and Funding Commitments
|
32
|
|
Section 2.11
|
Absolute Obligation with Respect to Letter of Credit Payments;
|
|
|
|
Cash Collateral; Replacement of Issuing Bank
|
33
|
|
Section 2.12
|
Defaulting Lenders
|
34
|
|
Section 2.13
|
Swingline Loans
|
36
|
|
Section 2.14
|
Extension of Commitment Termination Date
|
37
|
|
|
|
|
|
ARTICLE 3.
|
INTEREST, FEES, YIELD PROTECTION, ETC,
|
39
|
|
Section 3.01
|
Interest
|
39
|
|
Section 3.02
|
Interest Elections
|
40
|
|
Section 3.03
|
Fees
|
41
|
|
Section 3.04
|
Alternate Rate of Interest
|
42
|
|
Section 3.05
|
Increased Costs; Illegality
|
42
|
|
Section 3.06
|
Break Funding Payments
|
44
|
|
Section 3.07
|
Taxes
|
45
|
|
Section 3.08
|
Mitigation Obligations; Replacement of Lenders
|
48
|
|
|
|
|
|
ARTICLE 4.
|
REPRESENTATION AND WARRANTIES
|
48
|
|
Section 4.01
|
Organization; Powers
|
49
|
|
Section 4.02
|
Authorization; Enforceability
|
49
|
|
Section 4.03
|
Governmental Approvals; No Conflicts
|
49
|
|
Section 4.04
|
Financial Condition; No Material Adverse Effect
|
49
|
|
Section 4.05
|
Properties
|
50
|
|
Section 4.06
|
Litigation and Environmental Matters
|
50
|
|
Section 4.07
|
Compliance with Laws and Agreements
|
50
|
|
Section 4.08
|
Regulated Entities
|
51
|
|
Section 4.09
|
Taxes
|
51
|
|
Section 4.10
|
ERISA
|
51
|
|
Section 4.11
|
Disclosure
|
51
|
|
|
|
|
||
Section 4.12
|
Subsidiaries
|
51
|
|
|
Section 4.13
|
Federal Reserve Regulations
|
52
|
|
|
Section 4.14
|
Rankings
|
52
|
|
|
Section 4.15
|
Solvency
|
52
|
|
|
Section 4.16
|
Anti-Corruption Laws and Sanctions
|
52
|
|
|
Section 4.17
|
EEA Financial Institutions
|
52
|
|
|
ARTICLE 5.
|
CONDITIONS
|
52
|
|
|
Section 5.01
|
Effective Date
|
52
|
|
|
Section 5.02
|
Each Credit Event
|
53
|
|
|
ARTICLE 6.
|
AFFIRMATIVE COVENANTS
|
54
|
|
|
Section 6.01
|
Financial Statements and Other Information
|
54
|
|
|
Section 6.02
|
Notice of Material Events
|
55
|
|
|
Section 6.03
|
Existence; Conduct of Business
|
56
|
|
|
Section 6.04
|
Payment of Obligations
|
56
|
|
|
Section 6.05
|
Maintenance of Properties; Insurance
|
56
|
|
|
Section 6.06
|
Books and Records; Inspection Rights
|
56
|
|
|
Section 6.07
|
Compliance with Laws
|
57
|
|
|
Section 6.08
|
Use of Proceeds
|
57
|
|
|
ARTICLE 7.
|
NEGATIVE COVENANTS
|
57
|
|
|
Section 7.01
|
Liens
|
57
|
|
|
Section 7.02
|
Sale of Assets; Consolidation; Merger; Sale and Leaseback
|
60
|
|
|
Section 7.03
|
Restrictive Agreements
|
60
|
|
|
Section 7.04
|
Transactions with Affiliates
|
61
|
|
|
Section 7.05
|
Capitalization Ratio
|
61
|
|
|
ARTICLE 8.
|
EVENTS OF DEFAULT
|
61
|
|
|
ARTICLE 9.
|
THE ADMINISTRATIVE AGENT
|
64
|
|
|
Section 9.01
|
Appointment
|
64
|
|
|
Section 9.02
|
Individual Capacity
|
64
|
|
|
Section 9.03
|
Exculpatory Provisions
|
64
|
|
|
Section 9.04
|
Reliance by Administrative Agent
|
65
|
|
|
Section 9.05
|
Performance of Duties
|
65
|
|
|
Section 9.06
|
Resignation; Successors
|
65
|
|
|
Section 9.07
|
Non-Reliance by Credit Parties
|
65
|
|
|
Section 9.08
|
Agents
|
66
|
|
|
ARTICLE 10.
|
MISCELLANEOUS
|
66
|
|
|
Section 10.1
|
Notices
|
66
|
|
|
Section 10.2
|
Waivers; Amendments
|
69
|
|
|
Section 10.3
|
Expenses; Indemnity; Damage Waiver
|
70
|
|
|
Section 10.4
|
Successor and Assigns
|
72
|
|
|
Section 10.5
|
Survival
|
75
|
|
|
|
|
|
|
|
|
|
|
Section 10.6
|
Counterparts; Integration; Effectiveness; Electronic Execution
|
76
|
|
Section 10.7
|
Severability
|
76
|
|
Section 10.8
|
Right of Setoff
|
76
|
|
Section 10.9
|
Governing Law; Jurisdiction; Consent to Service of Process
|
77
|
|
Section 10.10
|
WAIVER OF TRIAL JURY
|
77
|
|
Section 10.11
|
Headings
|
78
|
|
Section 10.12
|
Confidentiality
|
78
|
|
Section 10.13
|
Interest Rate Limitation
|
79
|
|
Section 10.14
|
No Third Parties Benefited
|
79
|
|
Section 10.15
|
USA PATRIOT Act Notice
|
79
|
|
Section 10.16
|
No Fiduciary Duty
|
79
|
|
Section 10.17
|
Acknowledgment and Consent to Bail-In Action
|
80
|
|
|
|
|
|
SCHEDULES:
|
|
|
|
|
|
|
|
Schedule 1.01
|
Capitalization
|
|
|
Schedule 1.01
|
Consolidated Funded Debt
|
|
|
Schedule 1.01
|
Funded Debt
|
|
|
Schedule 2.01
|
Commitments
|
|
|
Schedule 2.09
|
Existing Letters of Credit
|
|
|
Schedule 4.12
|
Subsidiaries
|
|
|
Schedule 7.01
|
Existing Liens
|
|
|
Schedule 7.03
|
Existing Restrictions
|
|
|
|
|
|
|
EXHIBITS:
|
|
|
|
|
|
|
|
Exhibit A
|
Form of Assignment and Acceptance
|
|
|
Exhibit B-1
|
Form of Opinion of Pillsbury Winthrop Shaw Pittman LLP
|
|
|
Exhibit B-2
|
Form of Opinion of Kurt K. Murao, Esq., Vice President-Legal
|
|
|
|
& Administration and Corporate Secretary of the Borrower
|
|
|
Exhibit C
|
Form of Note
|
|
|
Exhibit D
|
Form of Borrowing Request
|
|
|
Exhibit E
|
Form of Letter of Credit Request
|
|
|
Exhibit F
|
Form of Increase Request
|
|
|
Exhibit G
|
Form of Interest Election Request
|
|
ARTICLE 1.
|
DEFINITIONS
|
Pricing Level
|
Issuer Ratings (S&P/Moody’s/Fitch)
|
Commitment Fee Rate
|
Eurodollar Margin
|
ABR
Margin
|
I
|
(A-/A3/A-) or higher
|
0.15%
|
1.00%
|
0.00%
|
II
|
(BBB+/Baa1/BBB+)
|
0.175%
|
1.25%
|
0.25%
|
III
|
(BBB/Baa2/BBB)
|
0.20%
|
1.375%
|
0.375%
|
IV
|
(BBB-/Baa3/BBB-)
|
0.25%
|
1.50%
|
0.50%
|
V
|
(BB+/Ba1/BB+) or lower
|
0.30%
|
1.75%
|
0.75%
|
ARTICLE 2.
|
THE CREDITS
|
ARTICLE 3.
|
INTEREST, FEES, YIELD PROTECTION, ETC.
|
ARTICLE 4.
|
REPRESENTATIONS AND WARRANTIES
|
ARTICLE 5.
|
CONDITIONS
|
ARTICLE 6.
|
AFFIRMATIVE COVENANTS
|
ARTICLE 7.
|
NEGATIVE COVENANTS
|
ARTICLE 8.
|
EVENTS OF DEFAULT
|
ARTICLE 9.
|
THE ADMINISTRATIVE AGENT
|
ARTICLE 10.
|
MISCELLANEOUS
|
|
HAWAIIAN ELECTRIC INDUSTRIES, INC.,
as the Borrower
|
|
By:
/s/ Gregory C. Hazelton
Name: Gregory C. Hazelton Title: Executive Vice President and
Chief Financial Officer
|
|
By:
/s/ Clifford H. Chen
Name: Clifford H. Chen Title: Treasurer |
|
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, as Issuing Bank, as
Swingline Lender and as a Lender
|
|
By:
/s/ Ling Li
Name: Ling Li
Title: Executive Director
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Syndication Agent and as a Lender
|
|
By:
/s/ Keith Luettel
Name: Keith Luettel
Title: Director
|
|
BANK OF AMERICA, N.A.,
as Co-Documentation Agent and as a Lender
|
|
By:
/s/ Jim McCary
Name: Jim McCary
Title: Vice President
|
|
MUFG UNION BANK, N.A.,
as a Co-Documentation Agent and as a Lender
|
|
By:
/s/ Robert MacFarlane
Name: Robert MacFarlane
Title: Director
|
|
BARCLAYS BANK PLC,
as a Co-Documentation Agent and as a Lender
|
|
By:
/s/ Christopher Aitkin
Name: Christopher Aitkin
Title: Assistant Vice President
|
|
U.S. BANK NATIONAL ASSOCIATION,
as Co-Documentation Agent and as a Lender
|
|
By:
/s/ Holland H. Williams
Name: Holland H. Williams
Title: Vice President
|
|
BANK OF HAWAII,
as Co-Documentation Agent and as a Lender
|
|
By:
/s/
John McKenna
Name:
John McKenna
Title: Senior Vice President |
|
THE BANK OF NEW YORK MELLON,
as a Lender
|
|
By:
/s/ Mark W. Rogers
Name: Mark W. Rogers
Title: Vice President
|
|
The undersigned Departing Lender hereby acknowledges and agrees that, from and after the Effective Date, it is no longer a party to the Existing Credit Agreement or any of the Loan Documents executed in connection therewith and will not be a party to this Agreement.
MORGAN STANLEY BANK, N.A., as a Departing Lender
|
|
By:
/s/ Pat Layton
Name: Pat Layton
Title: Authorized Signatory
|
|
The undersigned Departing Lender hereby acknowledges and agrees that, from and after the Effective Date, it is no longer a party to the Existing Credit Agreement or any of the Loan Documents executed in connection therewith and will not be a party to this Agreement.
ROYAL BANK OF CANADA,
as a Departing Lender
|
|
By:
/s/ Eric D. Koppelson
Name: Eric D. Koppelson
Title: Authorized Signatory
|
December 31, 2016
|
Unconsolidated
|
Consolidated
|
||||
Funded Debt:
|
|
|
||||
Notes payable to subsidiaries
|
$
|
5,373
|
|
—
|
|
|
Short-term borrowings-other than bank
|
—
|
|
—
|
|
||
Long-term debt, net-other than bank
|
299,759
|
|
1,619,019
|
|
||
Total Funded Debt *
|
$
|
305,132
|
|
$
|
1,619,019
|
|
|
|
|
||||
Capitalization:
|
|
|
||||
Funded Debt
|
$
|
305,132
|
|
$
|
1,619,019
|
|
Noncontrolling interest: Cumulative preferred stock of subsidiaries-not subject to mandatory redemption
|
—
|
|
34,293
|
|
||
Common stock equity **
|
2,099,882
|
|
2,099,882
|
|
||
Total capitalization
|
$
|
2,405,014
|
|
$
|
3,753,194
|
|
*
|
Excludes deposit liabilities, securities sold under agreements to repurchase and advances from Federal Home Loan Bank of Seattle.
|
Lender
|
Revolving Commitment
|
Letter of
Credit
Commitment
|
JPMorgan Chase Bank, N.A.
|
$24,642,857.15
|
$1,642,857.15
|
Wells Fargo Bank, National Association
|
$24,642,857.15
|
$1,642,857.15
|
Bank of America, N.A.
|
$17,142,857.14
|
$1,142,857.14
|
MUFG Union Bank, N.A.
|
$17,142,857.14
|
$1,142,857.14
|
Barclays Bank PLC
|
$17,142,857.14
|
$1,142,857.14
|
U.S. Bank National Association
|
$17,142,857.14
|
$1,142,857.14
|
Bank of Hawaii
|
$17,142,857.14
|
$1,142,857.14
|
The Bank of New York Mellon
|
$15,000,000.00
|
$1,000,000.00
|
Total
|
$150,000,000.00
|
$10,000,000.00
|
1.
|
Hawaiian Electric Company, Inc. (“Hawaiian Electric”), Maui Electric Company, Ltd. (“Maui Electric”) and Hawaii Electric Light Company, Inc. (“Hawaii Electric Light”) are subject to restrictive covenants in connection with the offer and sale in March 2004 of Cumulative Quarterly Income Preferred Securities, as disclosed in the Registration Statements on Form S-3, Regis. Nos. 333-111073, 333-111073-01, 333-111073-02 and 333-111073-03 filed with the Securities and Exchange Commission (“SEC”), which descriptions are incorporated herein by reference.
|
2.
|
Hawaiian Electric, Maui Electric and Hawaii Electric Light are subject to restrictive covenants in connection with their cumulative preferred stock financings to the effect that, until dividends have been paid or declared or set apart for payment on all shares of the respective company’s cumulative preferred stock, (a) no distributions on the respective company’s common stock or any future class of stock except cumulative preferred stock shall be made and (b) the respective company shall not purchase or otherwise acquire any of the respective company’s common stock or any future class of stock except cumulative preferred stock. In the event of liquidation, dissolution, receivership, bankruptcy, disincorporation or winding up of the affairs of the respective company, cumulative preferred stockholders are entitled to the par value of their shares and accrued and unpaid dividends, before any distribution is made to holders of the respective company’s common stock or any future class of stock except cumulative preferred stock.
|
3.
|
Hawaiian Electric is subject to restrictive covenants in connection with its cumulative preferred stock financings to the effect that, as long as any shares of the respective series of cumulative preferred stock are outstanding, Hawaiian Electric shall not affect the merger or consolidation of Hawaiian Electric, or sell, lease or exchange all or substantially all of the property and assets of Hawaiian Electric without first obtaining the consent in writing of the holders of at least 75% of each of the respective outstanding series of cumulative preferred stock, provided that said consent shall not be required to make a mortgage, pledge, assignment or transfer of all or any part of its assets as security for any obligation or liability of any kind or nature.
|
5.
|
Hawaiian Electric, Maui Electric and Hawaii Electric Light are subject to restrictive covenants in connection with their note purchase agreements dated as of April 19, 2012, October 3, 2013 and October 15, 2015 and Hawaiian Electric’s note purchase agreements dated as of September 13, 2012 and December 15, 2016 (together the “Note Agreements”), pursuant to which several series of unsecured notes were issued in private placements. The Note Agreements contain affirmative and negative restrictions, including a negative covenant that Hawaiian Electric will not permit the ratio of any Significant Subsidiaries’ Consolidated Subsidiary Funded Debt to its Capitalization exceed a specified level, and this restriction could operate indirectly to restrict the ability of Significant Subsidiaries to make Restricted Payments (as defined in Section 1.01 of the Credit Agreement) to Hawaiian Electric. Hawaiian Electric also entered into three similar note purchase agreements of the same April 19, 2012, October 3, 2013 and October 15, 2015 dates under which it is a “Guarantor” of Maui Electric (in three such agreements) and a Guarantor of Hawaii Electric Light (in three other such agreements). Each of these agreements contains similar negative covenants relating to Maui Electric and Hawaii Electric Light (as well as Hawaiian Electric) relating to their respective Consolidated Subsidiary Funded Debt to Capitalization ratios and those of their respective Significant Subsidiaries. The affirmative and negative restrictions are disclosed in the Current Reports on Form 8-K filed with the SEC on April 23, 2012, September 14, 2012, October 7, 2013, October 16, 2015 and December 19, 2016, which descriptions are incorporated herein by reference.
|
A.
|
Reference is made to the Second Amended and Restated Credit Agreement, dated as of June [__], 2017, among Hawaiian Electric Industries, Inc., a Hawaii corporation (the “
Borrower
”), the Lenders party thereto and JPMorgan Chase Bank, N.A., as Issuing Bank and Administrative Agent (as the same may be amended, supplemented or otherwise modified from time to time, the “
Credit Agreement
”). Capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed thereto in the Credit Agreement.
|
B.
|
Pursuant to the Credit Agreement and subject to the limitations set forth therein the Credit Parties agreed to make the Revolving Loans and participate in the Letter of Credit sub-facility under the terms and conditions therein set forth.
|
C.
|
The amount of the Assignor’s Revolving Commitment and Letter of Credit Commitment (without giving effect to the assignment effected hereby or to other assignments thereof which have not yet become effective) is specified in Item 1 of Schedule 1 hereto. The outstanding principal amount of the Assignor’s Revolving Loans without giving effect to the assignment effected hereby or to other assignments thereof which have not yet become effective, is specified in Item 2 of Schedule 1 hereto.
|
D.
|
The Assignor wishes to sell and assign to the Assignee, and the Assignee wishes to purchase and assume from the Assignor, (i) the portion of the Assignor’s rights and obligations under the Loan Documents, including its Revolving Commitment and Letter of Credit Commitment specified in Item 3 of Schedule 1 hereto (collectively, the “
Assigned Commitment
”)[, and (ii) the portion of the Assignor’s Revolving Loans specified in Item 4 of Schedule 1 hereto (the “
Assigned Loans
”)].
|
a.
|
Assignment
|
b.
|
Representations and Warranties
|
i.
|
Each of the Assignor and the Assignee represents and warrants to the other that (i) it has full power and legal right to execute and deliver this Assignment and Acceptance Agreement and to perform the provisions of this Assignment and Acceptance Agreement; (ii) the execution, delivery and performance of this Assignment and Acceptance Agreement have been authorized by all action, corporate or otherwise, and do not violate any provisions of its organizational documents or any contractual obligations or requirement of law binding on it; and (iii) this Assignment and Acceptance Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. The Assignor further represents that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim created by the Assignor.
|
ii.
|
The Assignee represents and warrants to the Assignor (i) it is an “accredited investor” within the meaning of Regulation D of the SEC, as amended, and (ii) it has, independently and without reliance upon the Administrative Agent, any arranger of the credit facilities evidenced by the Credit Agreement, the Assignor and their respective Related Parties, and based on such documents and information as it has deemed appropriate, made its own evaluation of, and investigation into, the business, operations, property, financial and other condition and creditworthiness of the Borrower and its Subsidiaries and made its own decision to enter into this Assignment and Acceptance Agreement.
|
c.
|
Effect of Assignment.
|
i.
|
Upon the effective date hereof, (i) the Administrative Agent shall record the assignment contemplated hereby, (ii) the Assignee, unless already a Lender, shall become a Lender, with all the rights and obligations as a Lender under the Credit Agreement, and (iii) the Assignor, to the extent of the assignment provided for herein, shall be released from its obligations under the Loan Documents, with respect to the [Assigned Loans and] Assigned Commitment.
|
ii.
|
The Assignee hereby appoints and authorizes the Administrative Agent to take such action, on and after the date hereof, as agent on its behalf and to exercise such powers under the Loan Documents as are delegated
|
iii.
|
From and after the effective date hereof, the Credit Parties and the Borrower shall make all payments in respect of the interest assigned hereby (including payments of principal, interest, fees and other amounts) to the Assignee. The Assignor and the Assignee shall make all appropriate adjustments directly between themselves with respect to amounts under the Loan Documents which accrued prior to the date hereof and which were paid thereafter.
|
d.
|
Method of Payment
|
e.
|
Notices
|
f.
|
Miscellaneous
|
i.
|
For purposes of this Assignment and Acceptance Agreement, all calculations and determinations with respect to [the Assigned Loans,] the Assigned Commitment and all other similar calculations and determinations, shall be made and shall be deemed to be made as of the commencement of business on the date of such calculation or determination, as the case may be.
|
ii.
|
Section headings have been inserted herein for convenience only and shall not be construed to be a part hereof.
|
iii.
|
This Assignment and Acceptance Agreement embodies the entire agreement and understanding between the Assignor and the Assignee with respect to the subject matter hereof and supersedes all other prior arrangements and understandings between the Assignor and the Assignee with respect to the subject matter hereof.
|
iv.
|
This Assignment and Acceptance Agreement may be executed in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same agreement. It shall not be
|
v.
|
Every provision of this Assignment and Acceptance Agreement is intended to be severable, and if any term or provision hereof shall be invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions hereof shall not be affected or impaired thereby, and any invalidity, illegality or unenforceability in any jurisdiction shall not affect the validity, legality or enforceability of any such term or provision in any other jurisdiction.
|
vi.
|
This Assignment and Acceptance Agreement shall be binding upon and inure to the benefit of the Assignor and the Assignee and their respective successors and permitted assigns, except that neither party may assign or transfer any of its rights or obligations hereunder (i) without the prior written consent of the other party, and (ii) in contravention of the Credit Agreement.
|
vii.
|
This Assignment and Acceptance Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed and interpreted in accordance with, the law of the State of New York without regard to principles of conflict of laws.
|
viii.
|
This Assignment and Acceptance Agreement shall become effective on the date it has been executed by the Assignor, the Assignee, the Administrative Agent, if a Revolving Commitment is being assigned, the Issuing Bank and the Swingline Lender and, unless a Default under Section 8(a), 8(i), or 8(j) of the Credit Agreement, or an Event of Default, has occurred and is continuing, the Borrower.
|
ix.
|
The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its Related Parties or their respective securities) will be made available and who may receive
|
HAWAIIAN ELECTRIC INDUSTRIES, INC.
|
|
|
|
|
|
By:________________________________________
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
|
|
|
By:________________________________________
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
Re:
|
Legal opinion letter regarding Hawaiian Electric Industries, Inc. Second Amended and Restated Credit Agreement dated as of June 30, 2017
|
DATE
|
AMOUNT OF LOAN
|
TYPE OF LOAN (EURODOLLAR OR ALTERNATE BASE RATE)
|
INTEREST RATE
|
INTEREST PERIOD
|
AMOUNT PAID
|
NOTATION MADE BY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Type of Borrowing (Eurodollar or ABR Borrowing)
|
Amount
|
Initial Interest Period for Eurodollar Borrowing
|
|
$___________
|
__ month[s]
|
1.
|
Name of Beneficiary:___________________________________________________________________
|
2.
|
Address of Beneficiary to which Letter of Credit will be sent:
|
4.
|
Conditions under which a drawing may be made (specify any documentation required to be delivered with any drawing request):
|
5.
|
Maximum amount to be available under such Letter of Credit: $_________.
|
6.
|
Requested date of issuance: _______, 20___.
|
7.
|
Requested date of expiration: ______, 20___.
|
Name of Lender
|
Commitment Amount (after giving effect to the Revolving Increase)
|
|
$____________________
|
Name of Proposed Institution
|
Commitment Amount
|
|
$____________________
|
ARTICLE 1.
|
DEFINITIONS
|
1
|
|
Section 1.01
|
Defined Terms
|
1
|
|
Section 1.02
|
Terms Generally
|
22
|
|
Section 1.03
|
Accounting Terms; GAAP
|
22
|
|
Section 1.04
|
Amendment and Restatement of the Existing Credit Agreement
|
23
|
|
ARTICLE 2.
|
THE CREDITS
|
23
|
|
Section 2.01
|
Commitments
|
23
|
|
Section 2.02
|
Loans and Borrowings
|
24
|
|
Section 2.03
|
Requests for Borrowings
|
24
|
|
Section 2.04
|
Funding of Borrowings
|
25
|
|
Section 2.05
|
Termination, Reduction and Increase of Commitments
|
26
|
|
Section 2.06
|
Repayment of Loans; Evidence of Debt
|
27
|
|
Section 2.07
|
Prepayment of Loans
|
28
|
|
Section 2.08
|
Payments Generally; Pro Rata Treatment; Sharing of Setoffs
|
29
|
|
Section 2.09
|
Letter of Credit Sub-Facility
|
31
|
|
Section 2.10
|
Letter of Credit Participation and Funding Commitments
|
32
|
|
Section 2.11
|
Absolute Obligation With Respect to Letter of Credit Payments; Cash Collateral; Replacement of Issuing Bank
|
33
|
|
Section 2.12
|
Defaulting Lenders
|
34
|
|
Section 2.13
|
Swingline Loans
|
36
|
|
Section 2.14
|
Extension of Commitment Termination Date
|
37
|
|
ARTICLE 3.
|
INTEREST, FEES, YIELD PROTECTION, ETC
|
39
|
|
Section 3.01
|
Interest
|
39
|
|
Section 3.02
|
Interest Elections
|
40
|
|
Section 3.03
|
Fees
|
41
|
|
Section 3.04
|
Alternate Rate of Interest
|
42
|
|
Section 3.05
|
Increased Costs; Illegality
|
42
|
|
Section 3.06
|
Break Funding Payments
|
44
|
|
Section 3.07
|
Taxes
|
45
|
|
Section 3.08
|
Mitigation Obligations; Replacement of Lenders
|
48
|
|
ARTICLE 4.
|
REPRESENATIONS AND WARRANTIES
|
49
|
|
Section 4.01
|
Organizations; Powers
|
49
|
|
Section 4.02
|
Authorization; Enforceability
|
49
|
|
Section 4.03
|
Governmental Approvals; No Conflicts
|
49
|
|
Section 4.04
|
Financial Condition; No Material Adverse Effect
|
49
|
|
Section 4.05
|
Properties
|
50
|
|
Section 4.06
|
Litigation and Environmental Matters
|
50
|
|
Section 4.07
|
Compliance with Laws and Agreements
|
50
|
|
Section 4.08
|
Regulated Entities
|
51
|
|
Section 4.09
|
Taxes
|
51
|
|
Section 4.10
|
ERISA
|
51
|
|
Section 4.11
|
Disclosure
|
51
|
|
Section 4.12
|
Subsidiaries
|
51
|
|
Section 4.13
|
Federal Reserve Regulations
|
52
|
|
Section 4.14
|
Rankings
|
52
|
|
Section 4.15
|
Solvency
|
52
|
|
Section 4.16
|
Anti-Corruption Laws and Sanctions
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 4.17
|
EEA Financial Institutions
|
52
|
|
ARTICLE 5.
|
CONDITIONS
|
52
|
|
Section 5.01
|
Effective Date
|
52
|
|
Section 5.01
|
Each Credit Event
|
53
|
|
ARTICLE 6.
|
AFFIRMATIVE COVENANTS
|
54
|
|
Section 6.01
|
Financial Statements and Other Information
|
54
|
|
Section 6.02
|
Notices of Material Events
|
55
|
|
Section 6.03
|
Existence; Conduct of Business
|
56
|
|
Section 6.04
|
Payment of Obligations
|
56
|
|
Section 6.05
|
Maintenance of Properties; Insurance
|
56
|
|
Section 6.06
|
Books and Records; Inspection Rights
|
56
|
|
Section 6.07
|
Compliance with Laws
|
57
|
|
Section 6.08
|
Use of Proceeds
|
57
|
|
ARTICLE 7.
|
NEGATIVE COVENANTS
|
57
|
|
Section 7.01
|
Liens
|
57
|
|
Section 7.02
|
Sale of Assets; Consolidation; Merger
|
59
|
|
Section 7.03
|
Restrictive Agreements
|
60
|
|
Section 7.04
|
Transactions with Affiliates
|
60
|
|
Section 7.05
|
Consolidated Capitalization Ratio
|
61
|
|
Section 7.06
|
Guaranties
|
61
|
|
ARTICLE 8.
|
EVENTS OF DEFAULT
|
61
|
|
ARTICLE 9.
|
THE ADMINISTRATIVE AGENT
|
63
|
|
Section 9.01
|
Appointment
|
63
|
|
Section 9.02
|
Individual Capacity
|
64
|
|
Section 9.03
|
Exculpatory Provisions
|
64
|
|
Section 9.04
|
Reliance by Administrative Agent
|
64
|
|
Section 9.05
|
Performance of Duties
|
65
|
|
Section 9.06
|
Resignation; Successors
|
65
|
|
Section 9.07
|
Non-Reliance by Credit Parties
|
65
|
|
Section 9.08
|
Agents
|
66
|
|
ARTICLE 10.
|
MISCELLANEOUS
|
66
|
|
Section 10.01
|
Notices
|
66
|
|
Section 10.02
|
Waivers; Amendments
|
68
|
|
Section 10.03
|
Expenses; Indemnity; Damage Waiver
|
70
|
|
Section 10.04
|
Successors and Assigns
|
71
|
|
Section 10.05
|
Survival
|
75
|
|
Section 10.06
|
Counterparts; Integration; Effectiveness; Electronic Execution
|
76
|
|
Section 10.07
|
Severability
|
76
|
|
Section 10.08
|
Right of Setoff
|
76
|
|
Section 10.09
|
Governing Law; Jurisdiction; Consent to Service of Process
|
76
|
|
Section 10.10
|
WAIVER OF JURY TRIAL
|
77
|
|
Section 10.11
|
Headings
|
77
|
|
Section 10.12
|
Confidentiality
|
78
|
|
Section 10.13
|
Interest Rate Limitation
|
79
|
|
Section 10.14
|
No Third Parties Benefited
|
79
|
|
Section 10.15
|
USA PATRIOT Act Notice
|
79
|
|
Section 10.16
|
No Fiduciary Duty
|
79
|
|
Section 10.17
|
Acknowledgment and Consent to Bail-In Action
|
80
|
|
SCHEDULES:
|
||
|
|
|
Schedule 1.01
|
|
Consolidated Capitalization
|
Schedule 1.01
|
|
Consolidated Funded Debt
|
Schedule 1.01
|
|
Consolidated Subsidiary Funded Debt
|
Schedule 2.01
|
|
Commitments
|
Schedule 2.09
|
|
Existing Letters of Credit
|
Schedule 4.12
|
|
Subsidiaries
|
Schedule 7.01
|
|
Existing Liens
|
Schedule 7.03
|
|
Existing Restrictions
|
EXHIBITS:
|
|
|
Exhibit A
|
|
Form of Assignment and Acceptance
|
Exhibit B-1
|
|
Form of Opinion of Pillsbury Winthrop Shaw Pittman LLP
|
Exhibit B-2
|
|
Form of Opinion of Susan A. Li, Senior Vice President, General Counsel, Chief Compliance & Administrative Officer & Corporate Secretary of the Borrower
|
Exhibit C
|
|
Form of Note
|
Exhibit D
|
|
Form of Borrowing Request
|
Exhibit E
|
|
Form of Letter of Credit Request
|
Exhibit F
|
|
Form of Increase Request
|
Exhibit G
|
|
Form of Interest Election Request
|
ARTICLE 1.
|
DEFINITIONS
|
Pricing Level
|
Issuer Ratings (S&P/Moody’s/Fitch)
|
Commitment
Fee Rate
|
Eurodollar
Margin
|
ABR
Margin
|
I
|
(A-/A3/A-) or higher
|
0.15%
|
1.00%
|
0.00%
|
II
|
(BBB+/Baa1/BBB+)
|
0.175%
|
1.25%
|
0.25%
|
III
|
(BBB/Baa2/BBB)
|
0.20%
|
1.375%
|
0.375%
|
IV
|
(BBB-/Baa3/BBB-)
|
0.25%
|
1.50%
|
0.50%
|
V
|
(BB+/Ba1/BB+) or lower
|
0.30%
|
1.75%
|
0.75%
|
ARTICLE 2.
|
THE CREDITS
|
ARTICLE 3.
|
INTEREST, FEES, YIELD PROTECTION, ETC.
|
ARTICLE 4.
|
REPRESENTATIONS AND WARRANTIES
|
ARTICLE 5.
|
CONDITIONS
|
ARTICLE 6.
|
AFFIRMATIVE COVENANTS
|
ARTICLE 7.
|
NEGATIVE COVENANTS
|
ARTICLE 8.
|
EVENTS OF DEFAULT
|
ARTICLE 9.
|
THE ADMINISTRATIVE AGENT
|
ARTICLE 10.
|
MISCELLANEOUS
|
|
HAWAIIAN ELECTRIC COMPANY, INC.,
as the Borrower
|
|
By:
/s/ Tayne S.Y. Sekimura
Name: Tayne S.Y. Sekimura Title: Senior Vice President and
Chief Financial Officer
|
|
By:
/s/ Lorie Ann Nagata
Name: Lorie Ann Nagata Title: Treasurer |
|
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, as Issuing Bank, as
Swingline Lender and as a Lender
|
|
By:
/s/ Ling Li
Name: Ling Li
Title: Executive Director
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Syndication Agent and as a Lender
|
|
By:
/s/ Keith Luettel
Name: Keith Luettel
Title: Director
|
|
BANK OF AMERICA, N.A.,
as Co-Documentation Agent and as a Lender
|
|
By:
/s/ Jim McCary
Name: Jim McCary
Title: Vice President
|
|
MUFG UNION BANK, N.A.,
as a Co-Documentation Agent and as a Lender
|
|
By:
/s/ Robert MacFarlane
Name: Robert MacFarlane
Title: Director
|
|
BARCLAYS BANK PLC,
as a Co-Documentation Agent and as a Lender
|
|
By:
/s/ Christopher Aitkin
Name: Christopher Aitkin
Title: Assistant Vice President
|
|
U.S. BANK NATIONAL ASSOCIATION,
as Co-Documentation Agent and as a Lender
|
|
By:
/s/ Holland H. Williams
Name: Holland H. Williams
Title: Vice President
|
|
BANK OF HAWAII,
as Co-Documentation Agent and as a Lender
|
|
By:
/s/
John McKenna
Name:
John McKenna
Title: Senior Vice President |
|
THE BANK OF NEW YORK MELLON,
as a Lender
|
|
By:
/s/ Mark W. Rogers
Name: Mark W. Rogers
Title: Vice President
|
|
The undersigned Departing Lender hereby acknowledges and agrees that, from and after the Effective Date, it is no longer a party to the Existing Credit Agreement or any of the Loan Documents executed in connection therewith and will not be a party to this Agreement.
MORGAN STANLEY BANK, N.A., as a Departing Lender
|
|
By:
/s/ Pat Layton
Name: Pat Layton
Title: Authorized Signatory
|
|
The undersigned Departing Lender hereby acknowledges and agrees that, from and after the Effective Date, it is no longer a party to the Existing Credit Agreement or any of the Loan Documents executed in connection therewith and will not be a party to this Agreement.
ROYAL BANK OF CANADA, as a Departing Lender
|
|
By:
/s/ Eric D. Koppelson
Name: Eric D. Koppelson
Title: Authorized Signatory
|
($thousands)
|
HECO
|
|
HELCO
|
|
MECO
|
|
RHI
|
|
UBC
|
|
Eliminations
|
|
CONSOLIDATED
|
|
|||||||||
ST borrowings from non-affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|||
ST borrow between HECO, HELCO, MECO, RHI, UBC
|
13,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,500
|
)
|
|
—
|
|
|
||
ST borrowings from HEI
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|||
Capital lease obligations, including current portion
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|||
Purchase money indebtedness
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|||
Borrowings under Syndicated Credit Agreement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|||
Revenue bonds, including current portion
|
289,879
|
|
|
92,310
|
|
|
76,643
|
|
|
—
|
|
|
—
|
|
|
|
|
458,832
|
|
|
|||
|
Less funds on deposit with trustees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
|
Less unamortized discount
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
Other long-term debt - unsecured
|
594,547
|
|
|
111,572
|
|
|
103,656
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
809,775
|
|
|
||
(QUIDS), including current portion
|
31,011
|
|
|
9,822
|
|
|
9,821
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,654
|
|
|
||
|
Funded debt
|
928,937
|
|
|
213,704
|
|
|
190,120
|
|
|
—
|
|
|
—
|
|
|
(13,500
|
)
|
|
1,319,260
|
|
(2)
|
|
|
|
|
|
(3)
|
|
(3)
|
|
|
|
|
|
|
|
||||||||||
Cumulative preferred stock - not subject to mandatory redemption
|
22,293
|
|
|
7,000
|
|
5,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,293
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Common stock
|
106,818
|
|
|
24,133
|
|
|
16,876
|
|
|
781
|
|
|
585
|
|
|
(42,375
|
)
|
|
106,818
|
|
|
||
Premium and/or expense on common & preferred stock
|
601,491
|
|
|
102,851
|
|
|
93,352
|
|
|
—
|
|
|
—
|
|
|
(196,203
|
)
|
|
601,491
|
|
|
||
Retained earnings
|
1,091,800
|
|
|
164,291
|
|
|
149,141
|
|
|
(704
|
)
|
|
(561
|
)
|
|
(312,167
|
)
|
|
1,091,800
|
|
|
||
|
Common stock equity
(a)
|
1,800,109
|
|
|
291,275
|
|
|
259,369
|
|
|
77
|
|
|
24
|
|
|
(550,745
|
)
|
|
1,800,109
|
|
|
|
|
Capitalization
(a)
|
2,751,339
|
|
|
511,979
|
|
|
454,489
|
|
|
77
|
|
|
24
|
|
|
(564,245
|
)
|
|
3,153,662
|
|
(1)
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(1)
|
Consolidated Capitalization
|
|
|
|
|
|
|
||||||||||||||||
(2)
|
Consolidated Funded Debt
|
|
|
|
|
|
|
||||||||||||||||
(3)
|
Consolidated Subsidiary Funded Debt, individually
|
|
|
|
|
||||||||||||||||||
(a)
|
Excludes AOCI Income (Loss)
|
|
|
|
|
|
|
Lender
|
Revolving Commitment
|
Letter of
Credit Commitment |
JPMorgan Chase Bank, N.A.
|
$32,857,142.85
|
$4,107,142.85
|
Wells Fargo Bank, National Association
|
$32,857,142.85
|
$4,107,142.85
|
Bank of America, N.A.
|
$22,857,142.86
|
$2,857,142.86
|
MUFG Union Bank, N.A.
|
$22,857,142.86
|
$2,857,142.86
|
Barclays Bank PLC
|
$22,857,142.86
|
$2,857,142.86
|
U.S. Bank National Association
|
$22,857,142.86
|
$2,857,142.86
|
Bank of Hawaii
|
$22,857,142.86
|
$2,857,142.86
|
The Bank of New York Mellon
|
$20,000,000.00
|
$2,500,000.00
|
Total
|
$200,000,000.00
|
$25,000,000.00
|
Debtor
|
Secured Party
|
Jurisdiction
|
UCC File Number
|
UCC File Date
|
Collateral Description
|
Hawaiian Electric Company, Inc.
|
Bank of New York Mellon Trust Company
|
|
A-58270880
|
12/15/2015
|
Certain rights as provided in that certain Trust Indenture dated as of 12/1/2015 by and between the Department of Budget and Finance of the State of Hawaii and the Trustee
|
Hawaii Electric Light Company, Inc.
|
Bank of the West (secured party) & Pure Health Solutions, Inc. (assignor)
|
Hawaii
|
A-44840919
|
4/11/2012
|
Rental Agreement dtd 3/15/2012 (PWLR) -
remaining balance $0.00 |
Hawaii Electric Light Company, Inc.
|
First Partners Bank (secured party) & Central Leasing Corporation (additional secured party)
|
Hawaii
|
A-49240672
|
6/25/2013
|
Equipment Schedule “A” dted 12/20/12 to a Master Lease Agreement (Homeplug Native Assembly & Long Pin Meter Interface Cable) -
remaining balance $4,581.72 |
Hawaii Electric Light Company, Inc.
|
Bank of New York Mellon Trust Company
|
|
A-58270881
|
12/15/2015
|
Certain rights as provided in that certain Trust Indenture dated as of 12/1/2015 by and between the Department of Budget and Finance of the State of Hawaii and the Trustee
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Maui Electric Company, Ltd.
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Bank of New York Mellon Trust Company
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A-58270882
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12/15/2015
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Certain rights as provided in that certain Trust Indenture dated as of 12/1/2015 by and between the Department of Budget and Finance of the State of Hawaii and the Trustee
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1.
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Hawaiian Electric Company, Inc. (“Hawaiian Electric”), Maui Electric Company, Ltd. (“Maui Electric”) and Hawaii Electric Light Company, Inc. (“Hawaii Electric Light”) are subject to restrictive covenants in connection with the offer and sale in March 2004 of Cumulative Quarterly Income Preferred Securities, as disclosed in the Registration Statements on Form S-3, Regis. Nos. 333-111073, 333-111073-01, 333-111073-02 and 333-111073-03 filed with the Securities and Exchange Commission (“SEC”), which descriptions are incorporated herein by reference.
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2.
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Hawaiian Electric, Maui Electric and Hawaii Electric Light are subject to restrictive covenants in connection with their cumulative preferred stock financings to the effect that, until dividends have been paid or declared or set apart for payment on all shares of the respective company’s cumulative preferred stock, (a) no distributions on the respective company’s common stock or any future class of stock except cumulative preferred stock shall be made and (b) the respective company shall not purchase or otherwise acquire any of the respective company’s common stock or any future class of stock except cumulative preferred stock. In the event of liquidation, dissolution, receivership, bankruptcy, disincorporation or winding up of the affairs of the respective company, cumulative preferred stockholders are entitled to the par value of their shares and accrued and unpaid dividends, before any distribution is made to holders of the respective company’s common stock or any future class of stock except cumulative preferred stock.
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3.
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Hawaiian Electric is subject to restrictive covenants in connection with its cumulative preferred stock financings to the effect that, as long as any shares of the respective series of cumulative preferred stock are outstanding, Hawaiian Electric shall not affect the merger or consolidation of Hawaiian Electric, or sell, lease or exchange all or substantially all of the property and assets of Hawaiian Electric without first obtaining the consent in writing of the holders of at least 75% of each of the respective outstanding series of cumulative preferred stock, provided that said consent shall not be required to make a mortgage, pledge, assignment or transfer of all or any part of its assets as security for any obligation or liability of any kind or nature.
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5.
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Hawaiian Electric, Maui Electric and Hawaii Electric Light are subject to restrictive covenants in connection with their note purchase agreements dated as of April 19, 2012, October 3, 2013 and October 15, 2015 and Hawaiian Electric’s note purchase agreements dated as of September 13, 2012 and December 15, 2016 (together the “Note Agreements”), pursuant to which several series of unsecured notes were issued in private placements. The Note Agreements contain affirmative and negative restrictions, including a negative covenant that Hawaiian Electric will not permit the ratio of any Significant Subsidiaries’ Consolidated Subsidiary Funded Debt to its Capitalization exceed a specified level, and this restriction could operate indirectly to restrict the ability of Significant Subsidiaries to make Restricted Payments (as defined in Section 1.01 of the Credit Agreement) to Hawaiian Electric. Hawaiian Electric also entered into three similar note purchase agreements of the same April 19, 2012, October 3, 2013 and October 15, 2015 dates under which it is a “Guarantor” of Maui Electric (in three such agreements) and a Guarantor of Hawaii Electric Light (in three other such agreements). Each of these agreements contains similar negative covenants relating to Maui Electric and Hawaii Electric Light (as well as Hawaiian Electric) relating to their respective Consolidated Subsidiary Funded Debt to Capitalization ratios and those of their respective Significant Subsidiaries. The affirmative and negative restrictions are disclosed in the Current Reports on Form 8-K filed with the SEC on April 23, 2012, September 14, 2012, October 7, 2013, October 16, 2015 and December 19, 2016, which descriptions are incorporated herein by reference.
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A.
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Reference is made to the Second Amended and Restated Credit Agreement, dated as of June [__], 2017, among Hawaiian Electric Company, Inc., a Hawaii corporation (the “
Borrower
”), the Lenders party thereto and JPMorgan Chase Bank, N.A., as Issuing Bank and Administrative Agent (as the same may be amended, supplemented or otherwise modified from time to time, the “
Credit Agreement
”). Capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed thereto in the Credit Agreement.
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B.
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Pursuant to the Credit Agreement and subject to the limitations set forth therein the Credit Parties agreed to make the Revolving Loans and participate in the Letter of Credit sub-facility under the terms and conditions therein set forth.
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C.
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The amount of the Assignor’s Revolving Commitment and Letter of Credit Commitment (without giving effect to the assignment effected hereby or to other assignments thereof which have not yet become effective) is specified in Item 1 of Schedule 1 hereto. The outstanding principal amount of the Assignor’s Revolving Loans without giving effect to the assignment effected hereby or to other assignments thereof which have not yet become effective, is specified in Item 2 of Schedule 1 hereto.
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D.
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The Assignor wishes to sell and assign to the Assignee, and the Assignee wishes to purchase and assume from the Assignor, (i) the portion of the Assignor’s rights and obligations under the Loan Documents, including its Revolving Commitment and Letter of Credit Commitment specified in Item 3 of Schedule 1 hereto (collectively, the “
Assigned Commitment
”)[, and (ii) the portion of the Assignor’s Revolving Loans specified in Item 4 of Schedule 1 hereto (the “
Assigned Loans
”)].
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HAWAIIAN ELECTRIC COMPANY, INC.
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By:________________________________________
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Name:______________________________________
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Title:_______________________________________
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By:________________________________________
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Name:______________________________________
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Title:_______________________________________
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Re:
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Legal opinion letter regarding Hawaiian Electric Company, Inc. Second Amended and Restated Credit Agreement dated as of June 30, 2017
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DATE
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AMOUNT OF LOAN
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TYPE OF LOAN (EURODOLLAR OR ALTERNATE BASE RATE)
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INTEREST RATE
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INTEREST PERIOD
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AMOUNT PAID
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NOTATION MADE BY
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Type of Borrowing (Eurodollar or ABR Borrowing)
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Amount
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Initial Interest Period for Eurodollar Borrowing
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$___________
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__ month[s]
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2.
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Address of Beneficiary to which Letter of Credit will be sent:
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4.
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Conditions under which a drawing may be made (specify any documentation required to be delivered with any drawing request):
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Name of Lender
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Commitment Amount (after giving effect to the Revolving Increase)
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$____________________
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Name of Proposed Institution
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Commitment Amount
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$____________________
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Six months ended June 30
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|
2017 (1)
|
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2017 (2)
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2016 (1)
|
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2016 (2)
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||||||||
(dollars in thousands)
|
|
|
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|
||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
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|
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||||
Total interest charges
|
|
$
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41,939
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|
|
$
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46,353
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|
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$
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40,681
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|
|
$
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43,964
|
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Interest component of rentals
|
|
3,263
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|
|
3,263
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|
|
3,069
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|
|
3,069
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||||
Pretax preferred stock dividend requirements of subsidiaries
|
|
1,426
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|
|
1,426
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|
|
1,491
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|
|
1,491
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|
||||
Total fixed charges
|
|
$
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46,628
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|
|
$
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51,042
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|
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$
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45,241
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|
|
$
|
48,524
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Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pretax income from continuing operations
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|
$
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110,262
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|
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$
|
110,262
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|
|
$
|
121,091
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|
|
$
|
121,091
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Fixed charges, as shown
|
|
46,628
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|
|
51,042
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|
|
45,241
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|
|
48,524
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|
||||
Interest capitalized
|
|
(2,323
|
)
|
|
(2,323
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)
|
|
(1,724
|
)
|
|
(1,724
|
)
|
||||
Earnings available for fixed charges
|
|
$
|
154,567
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|
|
$
|
158,981
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|
|
$
|
164,608
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|
|
$
|
167,891
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|
Ratio of earnings to fixed charges
|
|
3.31
|
|
|
3.11
|
|
|
3.64
|
|
|
3.46
|
|
Years ended December 31
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2016 (1)
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2016 (2)
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2015 (1)
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2015 (2)
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2014 (1)
|
|
2014 (2)
|
||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||||
Total interest charges
|
|
$
|
81,974
|
|
|
$
|
89,141
|
|
|
$
|
83,936
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|
|
$
|
89,284
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|
|
$
|
83,458
|
|
|
$
|
88,535
|
|
Interest component of rentals
|
|
6,200
|
|
|
6,200
|
|
|
6,065
|
|
|
6,065
|
|
|
6,366
|
|
|
6,366
|
|
||||||
Pretax preferred stock dividend requirements of subsidiaries
|
|
2,825
|
|
|
2,825
|
|
|
2,977
|
|
|
2,977
|
|
|
2,952
|
|
|
2,952
|
|
||||||
Total fixed charges
|
|
$
|
90,999
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|
|
$
|
98,166
|
|
|
$
|
92,978
|
|
|
$
|
98,326
|
|
|
$
|
92,776
|
|
|
$
|
97,853
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Pretax income from continuing operations
|
|
$
|
371,951
|
|
|
$
|
371,951
|
|
|
$
|
252,898
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|
|
$
|
252,898
|
|
|
$
|
263,708
|
|
|
$
|
263,708
|
|
Fixed charges, as shown
|
|
90,999
|
|
|
98,166
|
|
|
92,978
|
|
|
98,326
|
|
|
92,776
|
|
|
97,853
|
|
||||||
Interest capitalized
|
|
(3,727
|
)
|
|
(3,727
|
)
|
|
(3,265
|
)
|
|
(3,265
|
)
|
|
(3,954
|
)
|
|
(3,954
|
)
|
||||||
Earnings available for fixed charges
|
|
$
|
459,223
|
|
|
$
|
466,390
|
|
|
$
|
342,611
|
|
|
$
|
347,959
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|
|
$
|
352,530
|
|
|
$
|
357,607
|
|
Ratio of earnings to fixed charges
|
|
5.05
|
|
|
4.75
|
|
|
3.68
|
|
|
3.54
|
|
|
3.80
|
|
|
3.65
|
|
Years ended December 31
|
|
2013 (1)
|
|
2013 (2)
|
|
2012 (1)
|
|
2012 (2)
|
||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total interest charges
|
|
$
|
85,315
|
|
|
$
|
90,407
|
|
|
$
|
83,020
|
|
|
$
|
89,443
|
|
Interest component of rentals
|
|
6,345
|
|
|
6,345
|
|
|
6,493
|
|
|
6,493
|
|
||||
Pretax preferred stock dividend requirements of subsidiaries
|
|
2,886
|
|
|
2,886
|
|
|
2,943
|
|
|
2,943
|
|
||||
Total fixed charges
|
|
$
|
94,546
|
|
|
$
|
99,638
|
|
|
$
|
92,456
|
|
|
$
|
98,879
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pretax income from continuing operations
|
|
$
|
247,946
|
|
|
$
|
247,946
|
|
|
$
|
217,064
|
|
|
$
|
217,064
|
|
Fixed charges, as shown
|
|
94,546
|
|
|
99,638
|
|
|
92,456
|
|
|
98,879
|
|
||||
Interest capitalized
|
|
(7,097
|
)
|
|
(7,097
|
)
|
|
(4,355
|
)
|
|
(4,355
|
)
|
||||
Earnings available for fixed charges
|
|
$
|
335,395
|
|
|
$
|
340,487
|
|
|
$
|
305,165
|
|
|
$
|
311,588
|
|
Ratio of earnings to fixed charges
|
|
3.55
|
|
|
3.42
|
|
|
3.30
|
|
|
3.15
|
|
(1)
|
Excluding interest on ASB deposits.
|
(2)
|
Including interest on ASB deposits.
|
|
|
Six months ended June 30
|
|
Years ended December 31
|
||||||||||||||||||||||||
(dollars in thousands)
|
|
2017
|
|
2016
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total interest charges
|
|
$
|
36,010
|
|
|
$
|
32,713
|
|
|
$
|
67,407
|
|
|
$
|
67,178
|
|
|
$
|
66,132
|
|
|
$
|
64,130
|
|
|
$
|
62,056
|
|
Interest component of rentals
|
|
1,752
|
|
|
1,545
|
|
|
3,249
|
|
|
3,060
|
|
|
3,244
|
|
|
2,793
|
|
|
2,690
|
|
|||||||
Pretax preferred stock dividend requirements of subsidiaries
|
|
720
|
|
|
726
|
|
|
1,453
|
|
|
1,443
|
|
|
1,444
|
|
|
1,421
|
|
|
1,467
|
|
|||||||
Total fixed charges
|
|
$
|
38,482
|
|
|
$
|
34,984
|
|
|
$
|
72,109
|
|
|
$
|
71,681
|
|
|
$
|
70,820
|
|
|
$
|
68,344
|
|
|
$
|
66,213
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income attributable to Hawaiian Electric
|
|
$
|
47,649
|
|
|
$
|
61,764
|
|
|
$
|
143,397
|
|
|
$
|
136,794
|
|
|
$
|
138,721
|
|
|
$
|
124,009
|
|
|
$
|
100,356
|
|
Fixed charges, as shown
|
|
38,482
|
|
|
34,984
|
|
|
72,109
|
|
|
71,681
|
|
|
70,820
|
|
|
68,344
|
|
|
66,213
|
|
|||||||
Income taxes
|
|
27,618
|
|
|
36,537
|
|
|
84,801
|
|
|
79,422
|
|
|
80,725
|
|
|
69,117
|
|
|
61,048
|
|
|||||||
Interest capitalized
|
|
(2,323
|
)
|
|
(1,724
|
)
|
|
(3,727
|
)
|
|
(3,265
|
)
|
|
(3,954
|
)
|
|
(7,097
|
)
|
|
(4,355
|
)
|
|||||||
Earnings available for fixed charges
|
|
$
|
111,426
|
|
|
$
|
131,561
|
|
|
$
|
296,580
|
|
|
$
|
284,632
|
|
|
$
|
286,312
|
|
|
$
|
254,373
|
|
|
$
|
223,262
|
|
Ratio of earnings to fixed charges
|
|
2.90
|
|
|
3.76
|
|
|
4.11
|
|
|
3.97
|
|
|
4.04
|
|
|
3.72
|
|
|
3.37
|
|
Date: August 3, 2017
|
|
|
/s/ Constance H. Lau
|
|
Constance H. Lau
|
|
President and Chief Executive Officer
|
Date: August 3, 2017
|
|
|
/s/ Gregory C. Hazelton
|
|
Gregory C. Hazelton
|
|
Executive Vice President and Chief Financial Officer
|
Date: August 3, 2017
|
|
|
/s/ Alan M. Oshima
|
|
Alan M. Oshima
|
|
President and Chief Executive Officer
|
Date: August 3, 2017
|
|
|
/s/ Tayne S. Y. Sekimura
|
|
Tayne S. Y. Sekimura
|
|
Senior Vice President and Chief Financial Officer
|
Date: August 3, 2017
|
|
/s/ Constance H. Lau
|
Constance H. Lau
|
President and Chief Executive Officer
|
|
/s/ Gregory C. Hazelton
|
Gregory C. Hazelton
|
Executive Vice President and Chief Financial Officer
|
Date: August 3, 2017
|
|
/s/ Alan M. Oshima
|
Alan M. Oshima
|
President and Chief Executive Officer
|
|
/s/ Tayne S. Y. Sekimura
|
Tayne S. Y. Sekimura
|
Senior Vice President and Chief Financial Officer
|