Hawaiian Electric Industries Inc (NYSE: HE)

Hawaiian Electric Industries, Inc. (HEI), a holding company based in Hawaii, operates in the electric utility, banking, and non-regulated renewable/sustainable infrastructure businesses. Its three reportable segments are Electric Utility, Bank, and Other.

The Electric Utility segment is the backbone of HEI's operations, providing essential electric service to approximately 95% of Hawaii's population through five separate grids that serve communities on the islands of Oahu, Hawaii, Maui, Lanai, and Molokai. This segment accounted for around 89% of HEI's consolidated revenues and 97% of its net income in 2023.

The Bank segment, on the other hand, is composed of American Savings Bank (ASB), one of the largest financial institutions in Hawaii with assets totaling approximately $9.7 billion as of December 31, 2023. ASB provides a wide array of banking and other financial services to consumers and businesses in Hawaii.

The Other segment encompasses HEI's corporate-level operating, general, and administrative expenses, as well as the results of Pacific Current, LLC, which was formed in September 2017 to focus on investing in non-regulated clean energy and sustainable infrastructure in Hawaii.

HEI is subject to various regulatory mechanisms, including the Public Utility Commission (PUC) and the Federal Energy Regulatory Commission (FERC). It is also subject to environmental regulations related to water quality, air quality, and other environmental factors.

In terms of diversity and inclusion, HEI values and promotes these principles. The company boasts a diverse workforce, with 65.9% of its employees identifying as racially diverse. HEI invests in employee development and training programs, including leadership development, technical training, and safety training.

In terms of employee benefits, HEI offers a comprehensive package that includes health insurance, retirement plans, and paid time off. The company also encourages employees to participate in community charity walks, wellness programs, and financial wellness classes.

HEI's properties are diverse, including overhead transmission and distribution lines, underground cables, pole (some jointly) and metal high voltage towers. The company also owns buildings and approximately 11.6 acres of land located in Honolulu, which house its operating and engineering departments. Additionally, HEI leases office space and storage facilities in various locations.

In the Electric Utility segment, HEI owns a total of 133 acres of land on which substations, transformer vaults, distribution baseyards, and the Kalaeloa cogeneration facility are located. The company also owns 6 acres of land in Kona, which is used for a baseyard, and one acre of land in Hilo, which houses its accounting, customer services, and administrative offices.

In the Bank segment, ASB is subject to examination and comprehensive regulation by the Department of Treasury, Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC). It is also subject to reserve requirements established by the Board of Governors of the Federal Reserve System.

The banking industry in Hawaii is highly competitive, with ASB facing vigorous competition for deposits and loans from two larger banking institutions based in Hawaii and from smaller institutions that heavily promote their services in niche areas, such as providing financial services to small and medium-sized businesses.

HEI's competitive advantages include its strong brand recognition, diversified revenue streams, and experienced management team. The company's ability to adapt to changing market conditions and customer needs sets it apart from its competitors.

In the Electric Utility segment, HEI serves a diverse range of customers, including residential, commercial, and industrial customers. The company's Bank segment serves a wide range of customers, including consumers, small businesses, and large corporations.