HEI's Strategic Pivot: Selling ASB to Independent Investors

Hawaiian Electric Industries (HEI) has announced a strategic move to sell 90.1% of its wholly-owned subsidiary, American Savings Bank (ASB), to independent investors. This transaction, valued at $450 million, will transform ASB into an independent, local bank headquartered in Honolulu, led by its current management team under its existing brand. HEI plans to use the proceeds to reduce holding company debt, increasing flexibility for funding wildfire settlement contributions and key utility initiatives. The sale simplifies HEI's structure, allowing it to focus on its core utility business, Hawaiian Electric, while likely removing its status as a savings and loan holding company.

The sale of ASB follows a comprehensive review by HEI's Board of Directors, who evaluated various strategic options for the bank. The transaction closed on December 31, 2024, with each investor having a non-controlling interest in ASB, ensuring no single investor, including HEI, owns more than 9.9% of the bank's common stock. The Investors also include all of ASB's executive team and independent directors, aligning management interests with the bank's future success.

Scott Seu, President and CEO of HEI, stated, "This transaction marks an important step in HEI's efforts to best position our companies to serve our customers and communities for the long term. As we navigate a dynamic time in the banking industry, we are confident selling 90% of ASB to independent investors is the best approach for HEI, ASB and our communities. The sale allows HEI to enhance our focus on the utility as we work to help our state recover from the 2023 Maui wildfires and strengthen the financial and strategic position of our company. We intend to use the proceeds to reduce holding company debt, increasing flexibility for how HEI funds the HEI and Hawaiian Electric wildfire settlement contributions and key utility initiatives."

Ann Teranishi, President and CEO of ASB, expressed excitement about this next chapter for ASB, stating, "This represents the best outcome for ASB, our customers, employees, and the communities we've served since 1925 as we focus on the next 100 years."



With the completion of the sale, HEI will operate as a simplified holding company with a streamlined strategic focus on its utility, Hawaiian Electric. As an owner of 9.9% of the bank's common stock, HEI is expected to no longer be subject to regulation as a savings and loan holding company. The sale of ASB provides opportunities to increase efficiency, which HEI and Hawaiian Electric will evaluate moving forward. As previously announced, HEI has been undertaking a comprehensive review of strategic options for Pacific Current, its wholly-owned subsidiary, which remains ongoing.

Piper Sandler & Co. and Guggenheim Securities, LLC served as financial advisors to HEI, while Sullivan & Cromwell LLP served as HEI's legal advisor.

HEI's family of companies provides the energy services that empower much of the economic and community activity of Hawaii. HEI's electric utility, Hawaiian Electric, supplies power to approximately 95% of Hawaii's population and is undertaking an ambitious effort to decarbonize its operations and the broader state economy, and modernize and harden the grid to ensure resilience and public safety. HEI also helps advance Hawaii's sustainability goals through investments by its non-regulated subsidiary, Pacific Current. For more information, visit www.hei.com.



In conclusion, HEI's strategic pivot to sell ASB to independent investors allows the company to focus on its core utility business, strengthen its financial position, and address pressing challenges such as wildfire settlement obligations. The transaction simplifies HEI's structure, reduces regulatory oversight, and provides important liquidity for the company to fund key initiatives. As HEI moves forward, investors can expect the company to continue focusing on its core competencies and driving long-term growth.