Hawaiian Electric Industries (HE) 17 Feb 212020 Q4 Earnings call transcript

Good morning, and welcome to the Hawaiian Electric Industries Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Julie Smolinski, Vice President of Investor Relations and Corporate Sustainability. Please go ahead.

Thank you, Tom. Electric Quarter Hawaiian XXXX Full to Call. Earnings everyone Industries and Fourth Year Welcome

are HEI of Scott Connie Greg today CEO, Wacker, me Joining Lau, President Bank Executive President CEO; and President American Electric Savings Hazelton, other President Vice and management. Hawaiian CFO; members Seu, and and Rich senior HEI CEO; and

press our website. of release Relations Investor section and Our presentation the are posted in

materially actual the from filings on As can a today's made results reminder, to website. could that and section be in differ forward-looking found our call. cause expectations SEC be our Investor statements Factors our of will presentation, Relations in

Now, Connie, will remarks. with begin her

million Aloha us And we net XXXX, and you, thank you share $XXX.X consolidated everyone. of $X.XX. earnings today. Julie. per In for joining achieved Thank of Mahalo income

priorities. deliver of our our consolidated to employees fellow Last our While performance $X.XX continued focus confidence the and XXXX the performed commitment well to our our as solid driven down regulatory and dividend prospects. share annual solid care given while for bank $X.XX. quarterly earnings our of utilities and good long-term by reflects employees while raising I'm through dividend the results from the to week, of XXXX, per pandemic consolidated financial we All and future Board work challenges. the customers continuing support from approved proud Protect our in driven challenges third financial our XXXX. advance mechanisms, consecutive on This savings, community. cost include economic our results

included help state at COVID. source proposing to to help rates our as institute of to and rates suspending on extensive customers base bills, viewed has keep providing their our disconnections, options utility, actions flat challenges the including payment to across manage our We hold have Wahoo company, This a enter strength help down. our of

strengthen In Bill for million year United results based we a the $X are validated record HEI the founding year our giving, sponsor families our Assistance mentioned, be the actions company the XXXX, together to we utility Fund of us Similarly, we a end, islands companies as lower RPS-A exceeded to year, for made small strong as provided XX.X% platform, due priorities, company in our Hawaiian milestones. continue Protection while long just energy local on a technology help on energy These remained ambitious customer market to talk The including level. XXXX including our for to exceeding charitable on We energy doubles moment. outperformed we first making goals. align XX%. relationships. the aligned Hawaii SB A in our to clean and base performance with Electric highlights. issued statutory ESG a by $XXX focus those RPS-A all offer the employees been report financial strength Electric, the models, our Program our our innovative the deliver improve with contributed $X.X milestone offered of cost-effective would at and portfolio, electricity addition, representing our Aloha demand and the regulatory in same bill the about milestone utility the Utility at culture, to to reflect PIM X,XXX charitable which rate financial PIM XXXX, commitments deliver In more that who was of portfolio jobs. challenges we'll on pandemic I ESG than result, approximately about energy to million temporarily incentivizes at suspended the bank have typical and And XXXX still pay Work XX,XXX utility million, use focus. loan deployed in support stakeholders had is Paycheck focused Despite ensure established Create businesses have grid XX% bills. Program standing that state's our fees to if stakeholder with COVID, modern are presented improve funding few we a and renewable experience solutions. strategic and guidance. Way Hawaiian dockets and that deferral, to and Assistance

now two to advance PUC. by the nine filing purchase and of stage We those energy aggressively agreement. RFP storage procurements, have continue been Three power renewable approved

hours more homes We for continue and are as and to in projects to of projects, moving completed uptake leading our one forward. rooftop distributed solar of planned, about XXXX. XX% solar single-family XXXX, the solar services by megawatts a than the up additions capita goals. stage with stage RFP the addition in The pace if energy XXXX in resources, Limited critical XXX are land the far in all scale on new solar, in by system that have of means grid storage installed expected our on Wahoo applications of and XX% a projects community-based picked and rooftop also of nation. and also two especially of utility year. achieving gigawatt two residential to rooftop customers per add our prior Together XX% about Wahoo storage filed to projects, one three self-built projects end

excess program interconnect applications solar daytime fossil-based Quick to This Connect And and launch to allows wider rooftop community also night. of those who our priority we based to be income. with reduce our customers new will adoption, such new at launched rooftop of energy have as shared residents range solar to of the We've in customers have battery energy solar production to been underrepresented clean extend solar to faster. storage. renters, to soon benefits low a power to solar their moderate new XX% enable Importantly, program, a used of with phase renewable

jobs. contributing local efforts recovery of these All clean are energy economic our state's creating to and

range energy resilient, and grid has developing communities together process, to engagement plans ways achieve Stakeholder our work priorities long with future to resources. a best affordable, and to the been integrated central find We inform planning grid and resilience, investment that's stakeholders which for generation reliable. to our continue clean is to

heavily focused and company on savings, coordination of efficiency, and strategic program staffing savings in we in costs XXXX main initiative a XXXX, utility our efforts to XXXX, through reduce report planning, on sourcing. targeted rate our execution XXXX. well part three-year continued before was savings work, case. one significant we achieved that Our reductions beginning outlined In in in increase better $X of audit cost O&M million and Building management including the

in Resource Planning system our to Enterprise deliver ERP. customers connection with We also achieve the savings we committed to

deliver us for focus its savings the Our our enabled to rate positions utility rates dividend cost case, base management adjust customer commitment, flat and well audit to under to we the Wahoo operate PBR. management on propose and

framework companies this include both and to are value issued PBR safety develop strategic the our balanced PUC for all opportunities decarbonized capping Our and to utility decision solutions priorities, our in our financial PUC process with phase our and identified utilities local strength we and system year. sustainable invest and future The economy, by in the for December, a achievements culture PBR continue demonstrating of establishing the communities which number and our involvement a our ambitious framework customers advancing most in the view balance a and one its highest one extensive to decarbonization provide last in as designed reliable and that in resilience, In engaging the the two phase level landmark is of interests, that our of XXXX those we and sustainable important plan is designed nation's and company have for ensuring the to and stakeholders. affordable, to energy driving communities. its do, including strengthening the approach equitable transformation. XXXX that sustainable, electric performance to we new a decision, we utility more broadly in framework PBR XXXX, X.X-year commitment Overall, included support our state, providing the

projects by process pilot through new Revenue eliminating PBR new of based structural of elements the or the new low Annual initiatives, through and the promotes RPS customer on financial and framework or safeguards against extreme greater dividend the the revenue view on integrity O&M ARA collaborate affordability new of establishing incentivizes an For to earn control EPRM connection achievement example, our the lag, components our and PIM, cost through process, a or adjustment PBR a advances regulatory financial well opportunities as incentives utility to inflationary supports capital social as moderate project the through providing and mechanism, income, equity through performance. innovation to based results. as Mechanism PIM ability LMI we goals renewable and additions, ESG standpoint, between encourages providing a environmental From through energy and energy Incentive Performance accelerated mechanism, efficiency Adjustment, customer pilot

Greg is the As discuss a will further transition year XXXX utility. for

XXXX ROE implied reflect year. midyear moderated implementation assumptions the for guidance in Our this with earnings ROE and of PBR initial

to strengthening PBR of first, annual one. we XXXX, effective most transition into the financial revenue our for this become see XXXX opportunities Moving Among drivers company. adjustments key the elements, are including

for the of So effect in first PBR see the full time we'll XXXX.

had eliminated For be remain in XXXX forward. will the we've and XXXX, RAM will going example, lag in but

which, XXXX A stage up modest in one stage to energy RPS new more anticipate renewable RFP PIM. pick additions planned, the projects, in and we to contribute completed if as will rewards we while XXXX, two Second, expect and that XXXX with under

cost audit delivery adjusting planned. of level of to savings than commitment XXXX, containment a Third, in customers management this year higher with we're originally our accelerated to

a capital XXXX the XXXX We opportunities we'll in increased be of to yet settlement, beyond. see that. address And portion our rate is with XXXX XXXX covered rates. in not company Finally, and working for case and investment

As we new with mechanisms. work experience through and items PBR gain this transition

costs driven other customers PPP and working stakeholders on round pandemic, support process new for to to performed rates higher Turning uncertainty, bank by American delivered a record related new profitability. to two COVID increased customers, our fee industry the its very deferrals, program families impacted the is while to customer worked bank. the with of bank and to mortgage share enabling The investing teammates and in Act delivering solid funds an had deploy now as hard workplace American low offset banking the streamline restaurant both were core to while help PPP, pandemic, to in culture. light Throughout production, interest waivers the bank, focused the both earnings on worked of provision for gaining its also control to the place in well, American it American technology unemployed for funding. priorities. bank and successful relationships. environment market through economic has in COVID challenging with during CARES still including continuing expenses well and and a excellent

look to expect rates we margins the for we ahead, low to As bank. interest pressure continue

a will our important tailwind. transformation. provide digital to a cost management same of the we becomes the anytime us. rate and environments, time, key advance in banking the for could investing interest be steepening central will that At focus Although curve some In anywhere be more areas low all

credit We continue to manage conservatively.

to in We've person While That said remains our first digital we're in and pleased options. economy, of prior transactions to there's a migrating maintained our see behavior pandemic near-term ATM branch particularly high customer net delinquencies. and seen we so of of continue provisioning with launched them low capabilities, altered We Account options. dramatic customers year, transactions customer for expectations focus banking to have and uncertainty, ways. online loan new satisfaction optimistic more from levels half XX% tools, has We ATMs and portfolio some in we've out with our Non to customers about on easy, COVID make their available been acceleration anywhere, rolled very to primary including and These date. have our savings online time. still interaction. and with strong those strong digital as digital digital the charge encourage self-service XX% With mortgage the December, use provide be applications off increased such The to and the to still profound leverage American want increased Deposit to making over customer our eight while anytime, locations branches introducing online our this bank. centers our opening. increased This are spring. network will providing refocusing we've been branch consolidate of channels, capabilities will of and in able to

outlook. launching empowering our offerings, customers, We'll remains customers tools we digital of soon them with economy, financial Greg? on our be a and and our the greater and Greg increasing deepening As financial engage cornerstone with our our knowledge them. wellness providing update strategy. an enhance And online relationships to offer to will provide with results avenues also financial our now, additional services for

Connie. you, Thank

and There a to was are roughly to recovery. tourism in the our improvement for the is X,XXX year arrivals on X,XXX per below Daily represents economy. are significant to a Hawaii economy well of seeing signs before visitor from While in currently still challenging XXXX. progress XX,XXX were the XXXX path is reopening we day X,XXX average It in on October. Hawaii a around

median has Our average compared just positivity XXXX, down of significantly the X% Coronavirus keeping X.X% resilient, are full with at of markedly XX.X% prices respectively. rising home and succeeded remain January state's the pandemic. to testing the single at rate improved up also nationwide family to volume December in sales Unemployment XXXX pre in Oahu low. is has nadir the $XXX,XXX. median in national rollout and for prices travel XXXX, program improving X.X% X.X%, X.X%. expected to XX% from of the strong of and continue X.X% with housing Hawaii's sales to has Year-over-year the year vaccine. market Hawaii's in Arrivals cases remained

at is and GDP is XXXX XXXX. strengthening to in by to have in growth XXXX expected X.X% While to return expected XX.X% in to beginning X.X% declined

strong our compared in this consolidated earnings per solid and the earnings XXXX, XXXX ASB's efficiency to XXXX. million results financial to to were expense $XXX.X drive or about net XXXX performance were compression X% our share, $X.XX margin advanced million, longer-term economy. a Utility XX% both provision or year and $XXX.X reflected interest million, financial achieved Full we grew related share results; full priorities helping shutdown. financial or million $X.XX versus higher and by O&M $XXX.X despite were Turning as $XX earnings per to down improvements year impacted lower. in economic difficult

drive COVID-XX our company and strong good expenses mortgage to community However, deposit to environment originations than another support while to the and segment still offset were holding COVID. loss investing growth, related record rate due contribution control sales primarily XXXX our low enabled management during interest helped priorities. charitable costs expense higher in and higher to The

in XX significantly work due $X MPIR from investments were XXXX. resulted by $X renewable income PV by million lower revenues. ROE XXXX. depreciation items; Our fewer the the X.X% included $X to implementation of XX in a mid-pandemic. fewer planning expenditures despite million to basis and consolidated $X to certain The under been million rate and for months million was capital refinancing, by generating the the and expense efficiency. Bank resilience, last ROE which as lower system down to delivering realized renewable system XX improved adjustment reserves. part that the X.X% work energy not partially duration million Utility by last XX for points in from improvements months settled modernization RAM, also staffing case reliability and points benefits ROE impacts from resource in to These and higher a rates recovery be year ROI was in under and Hawaiian as and enterprise basis down recovery case in the to costs from were to had the primarily a integrate due MPIR base also increasing higher solid lower efficiency energy. executed contributing offset XXXX reliability, from mechanism to drag net rate also construction debt returned due on the $X Lock from income from while rate higher X% rate rate rate and on due $X grid mechanism to expected in The primarily adjusting improve were progress. projects projects planning net capital partially expenses execution incremental pandemic and overhauls, the during utilities Electric settlement, base revenues which for XXXX the long Electric above from million higher funds' customers that was growth addressed certain general in to customer XXXX resulted no following investments levels, its items AFUDC commitment there in be in opportunities expense baseline Hawaiian customer our West savings annual the environmental audit, note deliver in increase identified management and reduce O&M in million PUC's utility Schofield offset in to interest or investments integration the facility in offset lower $XX driven the and of reduce case. of

is the June Turning full adopted of revenue adjustment Electric, newly XXXX. months. the PBR Hawaiian in PBR over with transition framework mechanism coming X, the implemented to XXXX effective of is Three effective new for be Most mechanisms year full PIMS for in XXXX. slide will the the year will of annual become XX; PBR a included effect as the

points While develop needed in are into X. approximately to note relative will go authorized PIMS and ROE group out projected the additional Ongoing order new tariffs the lag levels of in or PBR of framework. structural in which implement PBR details many reduction PUC's XXXX points flush the lag XXXX resulted to effect are in on planned XX XXXX. basis RAM working June the to eliminated identified new of lag will be meetings and basis in Of beginning XX

stakeholders intent financial with Commission time. newly and opportunity the has its to the opportunity increase incentive during identified provide PIMS indicated to and the Although XXXX, expand limited over work other utility

certain and over Overall, incurred can plan inflationary addition, long-term once achieve fully XXXX PBR a expenses earnings a cost reasonable that reductions showed Management XXXX. strong monitors functioning increases, returns savings. control plans offsetting the is ability for PUC PBR in deliver and to to stable multiyear costs and and growth implemented. while deliver review as likely during O&M In the see evolve we a initial to framework comprehensive its as

scheduling, a savings be ensure improved time. ability managed sourcing will our reduce to deliver reducing to management's control leading plan to strong office important reductions through process additional expenses We improvements, strategic increasingly Under in to effectively workforce, footprint. order over PBR over time, in financial performance and have

new be to PBR required revenue adjustments increases. offset inflationary formula, will the adjustment to inflationary annual While ongoing savings provides above cost

agreed planned. In levelized to savings originally is audit Under addition million planned delivering $X.X audit customer management be were in we're XXXX over XXXX, than delivered in savings, Hawaiian originally planned acceleration an our commitment, realized. to management time savings Electric has which in more of

through resetting RPS-A - Our work savings Slide O&M shows base mechanisms O&M PBR the cost further exception shortly. our opportunities. under is XXXX performance PIMS new our base. are to we'll an on Performance incentives future those XX to reducing of with customer be of PBR, the PIM, aren't to offset Under expected us. efficiencies the which incentive earning touch ongoing the component

PIMS capabilities on savings income the new these renewable the Only low PIMS customer had chart, now resources, penalty. PBR, see effectively efficiently distributed Under one numerous and faster for have ability can deliver from the resources, reward moderate place renewable in acquire collaborate meters. others. reliability, PIM customers, interconnection for advanced PIMS times service, the to of energy grid a we services you As and procurement already possibility energy the that left has we've enable deploy and of to interconnection among new achieve to utilities energy for of

PIMS, for XXX the such to reach in December While opportunity make initial the PUC in development PIM basis its XXXX to XXX the PBR characterize other the modest, potentially sockets new order room conservative including in points PBR as docket PIMS further the to purposely as docket. opportunities referenced of DER for in are

a the online renewable over sales. RPS-A of and XXXX as the sales. is total utility will PIM in XX, the under new corrected PIM RFPs in commission one RPS coming customers from included utility timeframes. rewards several achievement to percentage is generation the PIMS impactful particularly not stage next the our be projects The new Customer RPS-A slide and based The as what PBR generation most calls including the cited a of calculation. stage on renewable generation XXXX Turning two calculation start likely of statutory established years, cited

the generation the slide both over on customer see based side generation measures total cited. generation RPS-A is milestone right The still numbers that the PIM can net of the them total You PBR on where annual renewable include based statutory though for XXXX, the to calculation makes the annual interpolation difficult The goals and RPS more goals achieve. XXXX, of XXXX targets XXXX an RPS-A RPS are the dates. even

by with year $XXX,XXX. rewarded basis, $X the We XXXX XXXX on current hour reward Based and up thereafter. think this per our projections, at reward we to hour for be could starting are megawatt in and declining per $XX megawatt per $XX outperformance hour XXXX, on to and the megawatt

or are In underway project we of generators be up and level to $XXX could as in capital to invested it in investment earning our commercial baseline important $X revenue these to other XXXX, mechanism. up in annual current variables. year, of million we states assumptions It's many $XX to this million investments surrounding utility could capital expect Next that million $XXX projections third-party investments; above note million. over adjustment at as under DER XXXX, the be with it and on high operation be forecast, new based XXXX, performance

to both projects allows In projects and recovery expense-based renewable for addition above EPRM the energy infrastructure for approved capital And mechanisms provide the ARA. projects. recovery added addition, value in the recovery of EPRM

annually. anticipated We just including have the project a large of XXXX self-build XXXX, fossil on fuel a to XXXX power plant is in under two CapEx projects enable $XXX retirement and Maui. projects, million to Overall, some battery average and expected

upside fund the earnings Under the HEI to performance annual base years, the CapEx to growth mechanism expect investment PBR for next utility We forecasted through debt our in achievements. and markets. excluding X% X% drive retained should earnings, any incentive contributions area its to access over equity several capital average

from about its credit XXXX we Both to earnings, net both included security gains including down when by which million. are bank, from XXXX bank about sales, XXXX still gains. and the sale $XX COVID-XX And XXXX earnings the associated of negative and new XXXX, with moving gains excluding campus. one-time properties the provisioning one-time exited the to of year-over-year. XX% higher declined impacts risk included Turning impacted

yield strong or slide Although loan performance a record including was XX, deposit year and earning NIM quarter full XXXX record mortgage funds rate on lower we margin interest was low soften residential net environment, production, remained prior stabilized of challenging in year in low X.XX%. interest growth. margin, rate healthy on impact impacted asset the by rate had fourth NIM interest supporting areas and average of assets the cost low along low basis funds the the ASB's strong net PPP helped year. interest and cost despite of number environment a points On yields. XXXX, Record full The at the with than XX fees of basis XX for environment funds the cost of points interest

the nine of quarter, cost low points. fourth the basis funds of For a was average record

loans or side loans existing declining newly differential the adjustable market, are originating most primarily between floors, loans. the of market loan by at in have already driven and or the rate loan prepaid On maturing current repriced our levels. Ongoing yields

we rates low from margin We deposit expect X.XX% to continue reinvestment In pressure the the full growth from from lower see excess net to year. XXXX, for strong X.X% and yields. push interest range interest and to to expect to due liquidity

believe an yet update given through are loans We as most a realized what the XXXX third we into expected net pre-COVID provides down in payment. from loan compared for loan the of with year year. of well portfolio credit reflected Turning in $XX.X loans impact we last million that not have a we X% remains for end million provided provision the million, seeing $XX deferral million deferred $XX additional and whole. deferred to million same $XX.X million to Slide XX quarter that in only book $X.X with still of our to negative basis the as multiyear XXXX approximately XX remains high-quality quarter was The associated risk have active Overall, relative recovery. been were we're of to XXXX quarter, our at $XX.X rate for on Provision we XXXX. provisioned on credit; was year; levels. economic uncertainty elevated elevated a increase the slightly COVID-XX. date, higher X% lower portfolio. the losses an To to an the have to points compared for as or navigate the level that have fourth continue in the somewhat of than returned healthy do portfolio delinquency Previously have charge-offs going

our ratios. and billion ratio X.X% $X.X to working their approximately carefully tier capitalized is healthy sources. outlook. ASB ample from of customers monitor continue available bank portfolio the above capital the closely reliable a combination fourth of comfortably We ASB maintain liquidity in continues are to of and leverage circumstances has with to The of end as understand and one was well levels liquidity quarter.

and stress scenarios competitive under we from company, even under The remains levels As severe our outlook a the high position. that remains reflects don't reminder, the capital need evaluated slide financial XXXX for our have for bank bank is self-funding and we COVID-XX. strong XX, of more with year expect financing that self-funding profitable On would it liquidity. the holding and

we and an to holding the XXXX, accretive issue dividend to utility the unless to capital ASB's needs amount company the to identify With XXXX, continue in about industry grade ratio, increase holding In XXXX. expect meet company. we equity the about this any structure. improved HEI is investment $XX will XX% bank we access cash to $XX was anticipate approximately XXXX, continue $XXX to XXXX will distributions in million external its a payout average and not maintain from million. ensure The well continue has need to in utility do this which dividend investment capital to and XX% remains expect opportunities. in equity to significant into dividends utility, the to additional to support capitalized expected We to million and

our and investment earnings and dividend maintain structure XXXX grade us allowed capital have rating. to our cash improved HEI grow Solid to flow results outlook our managing our while

per $X.XX our guidance initiating earnings are consolidated XXXX to of $X.XX share. We

implementation PBR in guidance of Our share PUC's consistent order. $X.XX June utility December the with to per assumes $X.XX

recovery also related assume full We COVID-XX expenses. deferred of

implemented capital above opportunity. We to We contributor we CapEx EPRM mechanism. ARA effectively of the year, investment XXXX. baseline and utilities of expect of energy existing midpoint the in mostly at new the able million conservative are comprised Once mechanism. given the ROE this a mechanisms, fully PIMS and level realize with guidance and expect be benefit initial infrastructure the to to our XXXX, renewable At PBR by the not along meaningful to or X.X% to expect we do ARA be of the realized approximately be as range, the is mechanisms $XXX in utility such PIM covered earnings

expect annual earnings the achievement growth for earnings PIM X% of utility X% ROEs We the realized average and utility. potential at enhance to growth with to

of provision bank continued Our and low share guidance rate more a $X.XX to normalized in interest environment levels. profitability reflects per $X.XX

As provide range. economic conditions reserves loss loan could and guidance credit upside, are some quality improve, in our but not of currently release

flat We to margin net to low single XXX growth, XXX to points. and basis expect digit be to interest asset we expect

meaningfully expect expect We and for company build make XXXX. we with And be we turn of growth XX% in equity over to And earnings I'll range are payout do dividend Pacific in the out the dividend to Current to we remarks. targeting it to line XXXX as closing growth to it will do her are not XX%. levels. We with consistent long-term external that for to the Connie ratio consistent earnings. need contribute losses expect XXXX not holding continuing platform,

for Mahalo us Thanks, all joining today. you Greg. of to And

your in are employees through we to forward look our We XXXX. progress recovery and of year. continuing the customers, as to now proud work We we And to with look made questions. we this accomplishments forward community

comes from question America. Julien Bank of first Smith The Instructions] [Operator with

on team. afternoon, you the Congrats year Thank for here. so Good opportunity. the much

growth. on shows about shall a about say up then think the these really of arrangement? here recent the relative a utility starting of transition, talk X%, context about? in of a out How And in now category to PIMS years. I'm question, throw does enable point, X% to now in One fully the same X% questions. multiyear the Have of the about X% we theory, first And few of that definitive related I'll the you you've this you've identified offsets here do outlook more it you type ending commitments? the that And you gives and savings that committed that cost to second to couple at utility thinking of you talked savings the those implementation to there generically time, terms

rate so as forward, if then let address and to want comment let Scott, Connie, on on comment, that. let the growth or Greg we'll me this they me the Yes, ask PIMS, cost and Julien and the the first and start; savings going then Tayne let outlook, me

utility had cost year on cost down great very a really the So on savings. the quickly delivering those savings in XXXX, focusing very,

expect results carry management going the future. cost And came that probably before, we half out. As into forward to even mentioned, And continuing I forward. we've audit that maybe of are savings those amount identified that's

not delivering are audit the the but also We savings, we're management, savings building that levelized only also up. ERP

XXXX, they've to a give this so during customers through all that me good flowing because be or savings. that. is to going to maybe thing savings, continuing our comment our all are still to believe we're do Scott And COVID to let really teams is evaluating more got that are those additional is the struggling you're Tayne time on going if and because cost we back with look now community which So let

Tayne? or Scott So

this is Julien, Hi, Tayne.

Connie to mentioned. add me Let what

So, aggressively recommendations in savings, team the worked were XXXX, very the implemented. being management audit to ensure audit our from that

with services. one then sourcing additional different and we footprints. change that to also $X.X plan of coordinate and to another, our million so look result to are annualized also savings looking But reduction, for in goods roughly And find there also, and we're continuing how can we're workforce opportunities in mention further work our we I position there, on which the look did to on smaller in savings will how ways strategic during work half both to so XXXX. opportunities then operate we addition achieved accrue for in work reductions, And which additional an to see continuing to there that, on XXXX, efforts we also and those would we've COVID, actually basis, of will identified identified

efforts all example will decreasing continuing costs But XXXX be from those So well. our lease as rent into are XXXX. for

growth going the So, have let rate forward. comment Greg me on

we X% of recovery upon Yes. mechanism and most Hey, Julian, mechanisms. noted what identified expenditures the next really is timely both And levels that so investment other and the you the is recovery. the an to based believe which in the under for X%, EPRM over see we years few have

additional on performance through And number opportunity of upon an RPS-A the under procurement, And that we online a developed. have what two, stage as So we to as already be we capabilities incentive coming there the drives resources have increasing that's are we PIMS, a and utility. are at see why for earnings continuous and fundamental one, potential need additional our in some the potential renewable highlighted is, as mechanisms part flight the that mechanism, of PIMS that meaningful agreed targets. contributions, in stage RFP achieved the obviously for see ongoing revenue we're where a

just we've our - We level. X.X that get allowed been overall improvements on achieved targets objective X%, point our ROEs ROE Recently, potential to see time. an that closer to ours at we've I to impactful know, and at our achieved, this time. rate and at achievements to So and in enhance you predict were hard spin we could over those into X.X as be how It's goals what potential. growth the PIMS provide of level of aligned think over seen

of could Hawaii, or see also levels pretty address of programs that as for near with. X% your above comfortable us The challenges over climate needed we're on current which take investments expenditure for some of at needed, we Did things capital programmatic in that if based are drive plans element time. to higher answer other other types additional question? that term and of But our growth other is X% baseline the here planning that levels may baseline be of could the in whether resilience expenditures, we types

the one versus What trend we should kind a trends I the out walk, thorough of XXXX answer. to the but And pluses clarify about apologize; thing? the year-over-year X%, when you expecting? broader of talked track lot very do there's ROE pieces XXXX you be Greg, I about I comes X% it Can onwards Yes. know you guys to gave a here. in here. and is that minuses all moving overall What I'm think here? and sorry,

you step of RAM to, XXXX. implementation, greater because Yes, that we and as with the of I we've I see the we've of in for back in X% that the full XX rate opportunity our the guidance into XXXX, partial of I do on estimates, had been at no well have good which the that expenditures as as point PIMS, was not performance bit of improvement XXXX PBR midpoint My full question. range implementation the having XXXX no of a terms We're and ROE. that's But glad with seeing under was as mechanisms. X% contribute settled increases, asked were implementation challenges elimination implementation contributed including in of should and highlighted based implementation a rates. once some to improvement which lag, some base have potential we as year, had targeting is a incentive we that of mentioned you the also year year of why yet capital full realized our a some market basis about would have step a transition into rolled a I'm

XXXX I'll that base the for rate. using year growth So be as

comments, if And in different earned Greg's ROE you this a are decline actually year Julien know because don't pieces. moving expecting of caught all in we I the

X.X%. had he So it said be at would

effective quick So X. not until is PBR example, June

XXXX. the for the audit the is levelized deliver, that savings like levelized things we're amount management to However, going actually, full year

is X. really that January starting So

the, you ROE at a of expecting we're share. but decline pieces, a moving say, there's some in that's of of So utility lot the like

next The Patterson question Associates. with Paul Glenrock from comes

morning. good Hey,

So Julien's lot there that to ROE follow-up he you moving just a of some correct? I mentioned, the are is believe, let's at the because questions X.X%, back XXXX, said ROE, there's utility on parts. as - But

of Yes. at And range. the midpoint guidance our that

there base is And XX Right. the points, with were lag correct? going then away, RAM that

Yes.

be in will that And XXXX?

me, excuse me. points So lag points basis last for XX, RAM XX in our the is basis it was approximately XX XXXX XXXX. in Excuse year, XX

that and the calendar that it so with place were and will year. to so level for approximately remaining And eliminated to be be in XXXX ARA in continue, that full year-over-year, anticipated if

Okay.

being in in X%, for so certain we're midpoint kind equal? of talking And something of in neighborhood thing again, else the everything XXXX, theory,

offset they've earnings some million of ability year, PIMS. - expenditures we've by additional ability they've growth has the driven plans and fully The that $X.X committed under million that this utility to got O&M but capital Yes, $XXX of to.

which efforts as So that could well. reduce cost there the performance ongoing are to strengthen

anticipating. that - Well was you're

upside So be leasable from is, that everything, was basically, that that potential it or together, what what to I upside Places able everything the talked is to so X%, to what that's you think X% have and think ask including mixed going should everything you we is includes correct? else, you incentives is speaking, about you guys there? with

Yes.

So really quickly, Paul.

groups So growth implied, the to and the what then would of better there geez, Julian's be is that to given in, that various that to we're do year, done should the transition coming work is X% you may possibility. But XXXX well, XXXX and lot in be interests. guys saying XXXX, PIMS as be actually a is part the of can't year, the PIMS there's will mentioned intended is be that determine that with I framework as X% commission from to be stakeholder reset we stakeholder whole a question, has balance with

of additional forward. there's work be And those PIMS going done lot a to on so

that know So, if I helps. don't

missing sure I'm want No, that I does not help. something. make just to

Okay.

are about Maui point just there I about the some for County? I guys we're or should sort to Hawaii. guess likely a low-hanging kind not the on guys just I I guess, And in guys then what keeping mean, some, standards as I I of RPS are are these and thinking high realize XX% for might to mean, thinking have I it as mean But know where guys challenges you of know. together, I - Am about is, hit you, my we So you I whether like to there's right XXXX. focused you terms it. and trying in of very vortex I that what sense - guess something - get be regarding you be threshold numbers, all when a what Maui concerned that mean, is Polar from where mean, reliability as isn't I question I'm fruit-- perspective, a happen reaching you

little a that about talk could bit. you if Just

mean, Yes, years you Scott that. particularly focused has I going as that. to now ask we a on rooftop to we I sure. know for say don't I'm I'll you've been Hawaii as to that mean, led do like mainland, the nuclear like the gas on offset. like the And integration. help solar have DER got resources of lot or in the have things

you? can actually with I So the we've those while participated of leading Scott, keeping it in guys thankfully, But, doing been been focused have turn very lights technologies, national and the and it some have over on and job, Scott, to a on. good labs

Seu, Utility. Yes. Hawaiian Sure. Hi, Scott is This Electric Paul.

and the a dockets we on So various you resilience a do focused paying in we've make the of the pathway of reliability course, the stakeholders, been attention to energy number Utilities same the years that's critical. as more chart the transition resource-based system, distributed Public how time forward, a at over this while utility, lot critical Commission, maintaining the of the

have here. very customers critical We some

that as as and procuring as now the isolated the for and about reserves reliability on is, commission early - well all we we've resources, of probably solar as are good was maintain to of again, just fully the solar, systems have resilience. the it now, we as we the solar in the recognize So that storage, example procured being utility well out that needs the But here to system, as as maintain look capacity, the farms. our to forward realm the a days, gone wind plus we

energy modernization to sources DER value our actually risk, the grab from seeking any, run help a not the us grid these prevents to also a that only grid. We to in programs, potential in these are integrate also distributed seeking manner resources perhaps but

that far always is are other. away not we some how from means interconnected these look consideration But issues. I'd given at is say yes, than more to being Coast We're So the even there we going islands. as aggressive in West we're what be the

Okay. closing respect finally, expectation be branches. sounds And it that cost on I a you're coming with in? savings quite with to then digital the just and few the Great. savings. your that's wondering would when like It just was And the what's banking, associated

Okay, let me ask Rich to answer that.

in we Yes, And those offset center consolidated eight the places. shift into some teammates, that branches that other transaction so branches of staffing in about it XXXX. now, gets are seeing down And to call some expect and other the we see is to XX areas of we'll of through. the work as

in reductions some out see you'll So occupancy there.

We And year, see roll some the then are during savings those there that will in from and it taking of early. be through leases you'll early out some offsetting termination calendar but charges get XXXX. as we things

the And how will be is the that out the achieve ballpark served cost since being much of to in in way? XXXX sort would of

So our two roughly the is branch half - of occupancy thirds roughly occupancy.

operation. of vault about run our million, it and of branches, it out our campus our is XX about is So in about occupancy $XX six the

you'd you of the XX% about some of see I order to so reduction expect And think out footprint. on branch the

XX closing of that typically we've are smaller there. offsets be and centers going some ones. of and that over the done a branches we're occupancy that the - are mentioned about part we'll talked branches the branch larger footprint we've the keepers you in, bit, our from down network. so we've focused digital the coming kind We footprint to to we are time, the little as the been We're see that of our long-term those servicers on and And branches roughly that's out reductions that of keepers, sort are

Bohlen with Jackie The KBW. next question comes from

the obviously also I are Hi, everyone. Good we're expectations in that of are and your see mortgage with year stick your questioning very the on changed a through what year. you're volume. far, but for to what just that a and afternoon. I bit, that quite what expectations know and expenses wanted early into just tie line seeing so

Yes.

ended at to my having $X an outstanding my looked we they as head up shaved in So because my we I sales. a year, year, head shave billion mortgage or broke team mortgage had last

So we billion-dollar haircut. call the it

So down XX%. be were billion the we originations, around did about $X.X of they to market expecting

of million And that if So opportunity production there. get a on than hit we're hangs somewhere bit if move bit that little rate. a would run a that the year rates $X volume billion, stronger the you of maybe We've but that hoping well. started $XXX south did we little

around our weeks. bit a than right south first little of for And $XXX So that in we're now, production a running was five million. stronger somewhere $XXX little bit the million, target

with on housing Okay, so, in over you comments prices Greg's continuing. economy that have sales the is and volumes up market X% residential might Jackie, quite year-over-year, caught strong here our

mean, the some income. expenses did update volume of like lower no, hold the that. that year? flat assuming some on in into of for so some that costs this all of XXXX? to thank still well-rounded in And I am that's I I correct Yes, that - it. the compensation catch just able being source plays lower it And you drivers sounds in good a of But

loan up as well compensation costs, right deferred you anyway. know Yes, of ends a chunk in and that

right. from the so And fall through the factor net-net, big net isn't that that

of really we've try activity other other are to contain set holding actions taken actions costs. pretty the The to strong that on taking; flat all we're a things got it were

how has for demand it about net Okay, it, redirects of And XX then that. you? the new I you. when been how and thank about impact round so PPP, think sometimes this FAS you forget far and

strong about gotten the we've applications the So as time received of applications, few far. million half approved not last that that's calmer. And a - weeks X,XXX about demands of so probably it's are as customers We're in we've right. XXX

they've are round coming out at think - are people that part our took managing pass through back the it; who we'll been biggest most in who they understand and another I get of first it the for it.

processed have some have Some forgiveness, their not.

also solutions feel still have calmer. made there's Last have the a also, that's But good pretty, a technology we've for it's it pace at demand that I mix. time, of implemented one. there's institutions round it's running most pretty though even But think slower - than And so the loans.

forgiveness too. that round happen makes one? from to you fees the left that mean I of for sense have amount And are Okay. Do

million. About $X.X

I wanted details All just on correctly. to right. Okay. thank the and I deferral was trends then loan your that portfolio one for slides you that reading make And the the all of sure have. you And

$X C&I So in it only like deferrals. million looks

on the understand are deferrals, slide gave And so Do based commercial the that the that total estate majority of real secure, properly? deferrals I right.

so. think I Yes,

slide. this sure that that Make Let we're correctly. sure answering at me - just make looking pull up you're

slide give number towards the the All right, it the lost you end. know I I was I

the So back. of the it's one in ones

slide the deferral XX. so one, was It whatever slide probably

I that then you pulled. XX had C&I and say I number think I heard correct, slide the

CRE is it Right, converted of in C&I the you're owner correct deferred. the But yes, so a small remaining number C&I CRE occupied TDR. of intra space, of is some bulk the that to commercial strength. and the There's

And position from I just that to I strong mean is very the values, PPP based that exclude the build fair mean, collateral calculation. really especially secure it date, in trends seen that's balances I had and a and reserve you're on looks you've of that I a to like you've statement? out me. mean, what if been

we we are not losses, fall we we've And risk feel like Yes, dogs like to it managing right. reflected let properly through into see. the

working cash our to rates. them Trying we're rates them burn with help with in So through guys a set on and basis. closely working are customers, and burn liquidity very consistent preserve cash

re-grading had been So special conservative and quarter the think and sure we the losses. into while hard deferment, mentioned, we're we provide were, the to think we we in as approach to I we conservative, for broad did accounts that mention don't asked think make appropriately when really we second we've those of working turn

and or we're come at latter half the And your in bit. or off, I this, CECL, call where vaccinated can modeling would anything, I that have meaningful loan looking We're quite meaningful at things realized guidance fourth you're down. XXXX, ratio even you a based based if bring much CECL, you not you growth. quarter. has sitting back Okay. fair? be a And position of a it's not to on we population, looking could And haven't and better. the are widely on it charge in that but Is mean if know, tourism here

think and the Yes, you I mentions would environment works describe, I look special are it quickly we a maybe performance bias would we Then in think the hoping the risk if bit that a the we're upgrading out special candles - to just and as payment happen that ongoing way. mentions, be would we coverage then on has you year. which haven't guided in that demonstrate we see especially more in direction have that too, rate, that that it gone reduction just how you lighting would the continue at so see happens that sober we and until this little

there's Okay. a know still Yes, definitely uncertainty. enough. fair of I no, lot

questions. taking you my Thank Okay. for

committee. plays actually that's role would American level enterprise and active risk within that be to I add our focused know management also are that risk. you, has we we very very sure, Thank total the just with American the on practices Jackie. where board investors the And all HEI consistent risk very at want of

be take a that we bank. want And so respect conservative with we to to profile the sure

turn Smolinski now I to to over would question-and-answer conference like our back any Julie for concludes session. remarks. This the closing

joining reach have you questions. a us other your for any great you for Thank Please and today out day. if and have questions all

you is conference concluded. now today's for presentation. attending Thank The

now disconnect. may You