Financial Data and Key Metrics Changes - The company reported consolidated net income of 0.50, compared to 0.63 in the same quarter last year [38][39] - The return on equity (ROE) for the last 12 months remains healthy at 10%, down from 10.9% last year due to lower bank earnings [39] - Utility ROE improved by 10 basis points to 8.2% [39] Business Line Data and Key Metrics Changes - The utility segment grew net income to 18.6 million, showing growth over the fourth quarter of the previous year [6] - ASB's total deposits were up 0.7% since the end of last year, indicating stability in the deposit base [19] Market Data and Key Metrics Changes - Hawaii's unemployment rate improved to 3.5% in March, aligning with the national average [11] - Visitor spending in Hawaii increased over 20% compared to last year and over 23% compared to pre-pandemic levels [12] - Visitor arrivals in March reached approximately 901,000, a 14% increase from last year and a 97% recovery from March 2019 [37] Company Strategy and Development Direction - The Integrated Grid Plan (IGP) identifies four key objectives for the next five years, including stabilizing utility rates and advancing energy equity [7] - The company is focused on integrating more renewables while improving grid reliability and resilience [32] - ASB's conservative banking model, characterized by a high percentage of retail deposits, positions it well in Hawaii's unique banking market [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about credit quality trends and the overall economic environment in Hawaii, driven by tourism recovery and military construction spending [67] - The company expects net interest margin (NIM) for the year to be lower than previously anticipated, now projected at 2.8% to 2.9% [63] - Management remains focused on managing operating and maintenance expenses within inflationary adjustments allowed under the annual revenue adjustment [41] Other Important Information - Utility capital expenditures (CapEx) for the quarter were 112 million, nearly double that of the first quarter of 2022 [16] - The company continues to connect renewable projects to its grid, with significant progress made in deploying smart meters [8][34] Q&A Session Summary Question: Changes in uninsured deposits behavior - Management noted no unusual changes in customer behavior regarding uninsured deposits during the quarter [52] Question: Core deposits and CDs trends - Average deposits declined by about 76 million in April, attributed to tax payments [56] Question: Rate differential for CDs versus regular deposits - The rate differential is about 1.25% between CD rates and regular deposits [71] Question: Impact of potential increase in FDIC insurance - Management indicated that the percentage of uninsured deposits would likely decrease if FDIC insurance were doubled [83] Question: Vacancy issues in commercial real estate - The overall occupancy in Hawaii remains strong, with no significant vacancy issues reported [84]
HEI(HE) - 2023 Q1 - Earnings Call Transcript