Is American Savings Bank affected by the legal challenges of Hawaiian Electric?
Lawsuits related to the wildfires in West Maui continue to develop. One target is Hawaiian Electric and a local bank is addressing concerns about its connection to the utility.
Hawaiian Electric Co. and American Savings Bank are both subsidiaries of Hawaiian Electric Industries.
HEI has taken a hit to its stock price of nearly 40% over the past month, as lawsuits have been filed against its electrical utilities alleging that they are responsible for the Lāhainā fire.
This had readers asking about ASB's vulnerability, if any, as part of the family of companies.
According to bank officials, ASB is insulated from the utilities. Deposits are safe, bank officials, said.
To get more technical, nearly 80% of the bank’s deposits are insured up to at least a quarter of a million dollars by the Federal Deposit Insurance Corporation.
Uninsured deposits are covered by the bank's liquidity and its ability to borrow more $3 billion if needed from the Federal Home Loan Bank and Federal Reserve, according to an announcement from ASB.
All publicly traded local banks have seen stock declines over the past month: Bank of Hawaiʻi declined nearly 11%, First Hawaiian Bank by nearly 9%, and Central Pacific Bank is down 6%.
Economist Paul Brewbaker attributes this to a combination of rising interest rates, inflation, and the economic impact of the Maui wildfires.