Hawaiian Electric Industries Inc. said yesterday its net income rose 87.4 percent in the third quarter on a doubling in profit in its Hawaiian Electric Co. utility and a one-third increase from its banking unit, American Savings Bank.

The company reported an overall profit of $37.3 million, or 44 cents a share, compared to $19.9 million, or 24 cents a share, a year earlier. Revenue in the quarter ending Sept. 30 was $915.4 million, up 35.9 percent from $673.5 million a year earlier.

“;Our earnings showed significant improvement over our unusually low results in the third quarter of 2007, which included a utility customer refund accrual that reduced those results by 10 cents a share,”; said Constance Lau, HEI president and chief executive officer.

Profit for HEI's electric utility operations more than doubled to $25.9 million from $12.9 million a year earlier, when Hawaiian Electric Co. accrued an $8.3 million, or 10 cents a share, net-of-tax refund related to its 2005 test year rate case, Lau said.

Utility revenue rose 47 percent to $826.1 million from $561.7 million.

HEI supplies power to more than 400,000 customers through Hawaiian Electric Co. on Oahu, Hawaii Electric Light Co. on the Big Island and Maui Electric Co. on Maui, Molokai and Lanai.

Kilowatt-hour sales slumped by 2.6 percent to $2.6 million from last year as the economy slowed and customers conserved energy.

“;In view of the economic downturn, we expect this conservation trend to continue even with recent declines in the fuel price component of our customer bills,”; Lau said.

The company's board also maintained its regular quarterly cash dividend of 31 cents a share, payable December 10 to stockholders of record at the close of business on November 17. The dividend is equivalent to an annual rate of $1.24 a share.

Operation and maintenance expenses increased 4.9 percent in the quarter to $86.8 million from $82.7 million as higher expenses for customer efficiency programs and production operations were partially offset by lower production maintenance expenses resulting from changes in generating unit overhaul schedules.

The utility also had a $1.1 million, or 3.3 percent increase, in depreciation expenses to $35.4 million from 2007 plant additions.

American Savings Bank, the state's third-largest financial institution based on assets, said profit jumped 31.6 percent to $15.4 million from $11.7 million a year ago. Return on assets in the quarter was 1.11 percent compared to 0.69 percent a year ago.

Net interest income for the quarter was $52.3 million, compared to $47.7 million a year ago. The impact of lower interest expense due to lower rates on deposits and borrowings more than offset the decline in interest income from lower yields on assets and lower investment balances.

Net interest margin expanded to 4.08 percent, compared with 2.97 percent in 2007.

“;In spite of the continued volatility in the financial and credit markets during the quarter, the bank continued to perform well,”; Lau said. “;Third-quarter results show the improvements in net interest margin and return on assets we expected to achieve from the June balance sheet restructuring.”;

The bank recorded a $2 million provision for possible loan losses, down from $2.7 million in the third quarter of 2007.

Noninterest income was $16.7 million compared to $17.2 million in 2007. Higher fee income from deposit liabilities was more than offset by lower fee income from other financial services, other financial products and other income.

Noninterest expense was $1.3 million lower, as lower services and other expenses were partially offset by an increase in compensation and benefits expense.

A $3 million, or 18.5 percent increase to $19.2 million in compensation and benefits was primarily due to a $900,000 accrual for incentive compensation, compared with a $1.4 million reversal of accrued incentive compensation in 2007.

The holding and other companies' net losses were $4.1 million in the third quarter, compared with $4.7 million in 2007.