Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2014

Schedule of estimated fair values of certain of the Company's financial instruments

The estimated fair values of certain of the Company’s and the Utilities' financial instruments were as follows:



			Estimated fair value
	Carrying or notional amount		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobser-vable inputs
(in thousands)	Carrying or notional amount		(Level 1)		(Level 2)		(Level 3)		Total
March 31, 2014
Financial assets
Money market funds	$	10	$	—	$	10	$	—	$	10
Available-for-sale investment and mortgage-related securities	517,534		—		517,534		—		517,534
Investment in stock of Federal Home Loan Bank of Seattle	86,697		—		86,697		—		86,697
Loans receivable, net	4,151,900		—		—		4,259,181		4,259,181
Derivative assets	34,442		22		212		—		234
Financial liabilities
Deposit liabilities	4,477,987		—		4,479,848		—		4,479,848
Short-term borrowings—other than bank	136,369		—		136,369		—		136,369
The Utilities' short-term borrowings (included in amount above)	34,996		—		34,996		—		34,996
Other bank borrowings	244,642		—		255,357		—		255,357
Long-term debt, net—other than bank	1,492,945		—		1,564,394		—		1,564,394
The Utilities' long-term debt, net (included in amount above)	1,217,945		—		1,282,346		—		1,282,346
Derivative liabilities	3,122		—		7		—		7
December 31, 2013
Financial assets
Money market funds	$	10	$	—	$	10	$	—	$	10
Available-for-sale investment and mortgage-related securities	529,007		—		529,007		—		529,007
Investment in stock of Federal Home Loan Bank of Seattle	92,546		—		92,546		—		92,546
Loans receivable, net	4,115,415		—		—		4,211,290		4,211,290
Derivative assets	46,356		98		531		—		629
Financial liabilities
Deposit liabilities	4,372,477		—		4,374,377		—		4,374,377
Short-term borrowings—other than bank	105,482		—		105,482		—		105,482
Other bank borrowings	244,514		—		256,029		—		256,029
Long-term debt, net—other than bank	1,492,945		—		1,508,425		—		1,508,425
The Utilities' long-term debt, net (included in amount above)	1,217,945		—		1,228,966		—		1,228,966
Derivative liabilities	4,732		—		26		—		26

Schedule of assets measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis were as follows:



	March 31, 2014						December 31, 2013
	Fair value measurements using						Fair value measurements using
(in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Money market funds (“other” segment)	$	—	$	10	$	—	$	—	$	10	$	—
Available-for-sale securities (bank segment)
Mortgage-related securities-FNMA, FHLMC and GNMA	$	—	$	431,014	$	—	$	—	$	369,444	$	—
U.S. Treasury and federal agency obligations	—		86,520		—		—		80,973		—
Municipal bonds	—		—		—		—		78,590		—
	$	—	$	517,534	$	—	$	—	$	529,007	$	—
Derivative assets ¹
Interest rate lock commitments	$	—	$	199	$	—	$	—	$	488	$	—
Forward commitments	22		13		—		98		43		—
	$	22	$	212	$	—	$	98	$	531	$	—
Derivative liabilities ¹
Interest rate lock commitments	$	—	$	5	$	—	$	—	$	24	$	—
Forward commitments	—		2		—		—		2		—
	$	—	$	7	$	—	$	—	$	26	$	—

¹ Derivatives are carried at fair value with changes in value reflected in the balance sheet in other assets or other liabilities and included in mortgage banking income.

Schedule of assets measured at fair value on a nonrecurring basis

Assets measured at fair value on a nonrecurring basis were as follows:



			Fair value measurements
(in millions)	Balance		Level 1		Level 2		Level 3
Loans
March 31, 2014	$	5	$	—	$	—	$	5
December 31, 2013	4		—		—		4

Schedule of significant unobservable inputs used in the fair value measurement

Key assumptions used in estimating the fair value of the bank’s mortgage servicing rights were as follows:



	March 31, 2014			March 31, 2013
Unpaid principal balance (000s)	$	1,382,731		$	1,305,811
Weighted average note-rate	4.07		%	4.11		%
Weighted average discount rate	9.8		%	9.7		%
Weighted average prepayment speed	8.7		%	10.8		%

For loans classified as Level 3 as of March 31, 2014, the significant unobservable inputs used in the fair value measurement were as follows:



					Significant unobservable input value ¹
($ in thousands)	Fair value		Valuation technique	Significant unobservable input	Range	Weighted Average
March 31, 2014
Residential loans	$	3,040	Fair value of property or collateral	Appraised value less 7% selling costs	60-96%	86%
Home equity lines of credit	169		Fair value of property or collateral	Appraised value less 7% selling costs	43-50%	49%
Commercial loans	217		Fair value of property or collateral	Fair value of business assets		19%
Commercial loans	1,632		Discounted cash flow	Present value of expected future cash flows		57%
				Discount rate		4.5%
Total loans	$	5,058
December 31, 2013
Residential loans	$	2,361	Fair value of property or collateral	Appraised value less 7% selling costs	44-96%	87%
Home equity lines of credit	170		Fair value of property or collateral	Appraised value less 7% selling costs	45-50%	50%
Commercial loans	217		Fair value of property or collateral	Fair value of business assets		19%
Commercial loans	1,668		Discounted cash flow	Present value of expected future cash flows		58%
				Discount rate		4.5%
Total loans	$	4,416

¹ Represent percent of outstanding principal balance.

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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