Hawaiian Electric Industries, the parent company of the electric utilities on Oahu, Hawaii Island, and Maui County, reported quarterly earnings yesterday. The company’s press release can be found here.

Corporate officials then met with a group of financial analysts via a telephone conference call to discuss the financial results. Their presentation to the analysts is available on the HEI website.

There were a couple of interesting exchanges that went beyond the financial numbers.

One analyst asked what had changed to allow HECO to suddenly commit to eliminating much of the permit backlog for photovoltaic systems.

Alan Oshima, HECO President and CEO, responded, according to a transcript of the call provided by the online financial site, Seeking Alpha. He appeared to credit technological improvements in solar inverters, which are used to link PV systems to the larger electrical grid.

We’ve been working… with the industry and installers, but we’ve also been working with national labs, etcetera, to test the capabilities of the inverters to see how quickly they could respond to fluctuations and recently preliminary results from those tests indicated that they could respond as quickly as we think is necessary in highly loaded circuits in order to provide some assurance that we will not experience stability or instability that would affect other customers.

So that is what we caused us to relax and start moving some other customers who have been waiting for approvals in those highly loaded circuits towards approval as long. As the inverters can meet those standards we can start moving the queue again.

OSHA said most of the backlogged permit applications will be processed within the next five months.

Another analyst asked what risks could be faced by American Savings Bank, another HEI subsidiary, as a result of the lava flow threatening Pahoa.

The answer came from Heather Schwarm, the bank’s chief financial officer. She said about 100 homes with mortgage loans from American Security Bank are in the impacted area, but that any impact on the bank would be “minimal.”

So essentially when we provide loans in a lava area, there is something called a lava zone one, two, three, four, and five depending on the risk of that particular area, it’s just like flood zone, it’s like flood zone right and so we have done a review of what exposure we have.

Essentially it’s about 100 homes that would be impacted that we have loans to and in the queue we actually did disclose about just under $13 million of exposure, mostly residential there is one commercial property as well.

Based on that, when we do make the loans, we do require lava insurance for zones one and two, which is where the majority of these exposures are. So at inception of those loans, these properties were required to have lava insurance.

Now really what that entails is if the lava were to destroy the home specifically, then they would be eligible for reimbursement. So the other item that is in play here is that there is a limited access point to the town of Puna and so if the lava were to cover that load and limit access, it’s very uncertain of what impact that would have on the overall collateral values that those homes that we have there.

So if I understand that correctly, the bank expects minimal impact if homes are destroyed by lava because owners are required to have insurance coverage sufficient to protect the underlying mortgage.

But, again if I understand that correctly, it could be a different story if homes are cut off and isolated by the lava flow, causing home values to tumble. If home values dropped below the value of their outstanding loans, leaving homeowners “under water,” it could impact the bank’s collateral and reduce the value of its loans.

At least one investment company thought the company is making progress and is predicting its stock will perform better than the overall stock market and has a price target 20% above its current value.

Zacks’ analyst wrote, “We are upgrading our recommendation on Hawaiian Electric Industries Inc. from Neutral to Outperform ahead of the third-quarter 2014 earnings results. Gradual improvement of the Hawaiian economy has continuously boosted the company’s performance. Hawaiian Electric’s systematic investments to increase its power generation capacity and in its transmission and distribution projects will help to meet increasing customer demand. The company’s steady focus on expanding its renewable assets will enable to meet government environmental regulations. We appreciate the company’s efforts of maximizing shareholder wealth through the payment of regular dividends.”