Bank boosts earnings
for HEI

The parent of Hawaiian Electric Co.
records a 4.2% profit for
the first quarter

By Russ Lynch
Star-Bulletin

Boosted by a strong performance at its American Savings Bank subsidiary, Hawaiian Electric Industries Inc.'s first-quarter profit rose 4.2 percent, the company said today.

HEI reported a profit of $19.7 million for the three months ended March 31, compared with $18.9 million in the 1996 quarter. With about 4 percent more shares outstanding in the latest quarter, the company's earnings per share were up only 1.6 percent, to 64 cents a share from 63 cents a year ago.

Today's report matched the average estimate of five analysts surveyed by IBES Inc., according to Bloomberg News.

American Savings' operating profit rose 23 percent from the 1996 quarter, to reach $12.3 million in the latest period, up from $10 million.

HEI's utility business had an operating profit of $38.6 million, slightly less than the $38.7 million reported for the 1996 quarter.

"HEI's increased earnings came primarily from the strong performance of our savings bank, which benefited from lower deposit insurance premiums and a lower cost of funds," said Robert F. Clarke, HEI president and chief executive officer.

Clarke said that operating income at the company's maritime freight transportation businesses, Young Brothers Ltd. and Hawaiian Tug & Barge Corp., and from passive investments were more than offset by operating losses and by corporate expenses.

Its real estate operations also lost money and HEI had expenses from the subsidiary it formed in 1995 to pursue independent power projects in Asia and the Pacific.

On the electric utility side, through Hawaiian Electric Co. and its related companies on the neighbor islands, HEI experienced flat kilowatt-hour sales and higher expenses, the company said.

At the savings bank, the company gained from a higher interest rate spread, the difference between what it paid for deposits and the money it earned on those deposits. American Savings also had an increase in the value of its earning assets, HEI said.

At noon on the New York Stock Exchange today, HEI shares were down 24 cents at $33.75.