American Savings Bank’s investments in securities back by Mainland mortgages is going to cost the bank $19 million.

The company said today it is taking the after-tax charge after it recently sold $225 million worth of private-issue mortgage-related securities.
The move reduces American Savings’ holdings in such securities to about $600,000.
“The securities were backed by Mainland mortgages and it was unclear when Mainland residential markets might recover,” said Constance Lau, HEI’s chief executive officer.
Shares of HEI rose 27 cents to close at $20.17 on the New York Stock Exchange yesterday.
As a result of the sale, American Savings said it will suspend its first quarter 2010 dividend payment to its parent Hawaiian Electric Industries Inc.
The bank regularly upstreams its income to HEI. Year-to-date, American Savings has paid $50.1 million in dividends to HEI.