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Bank segment (Tables)
 9 Months Ended
Sep. 30, 2015
Bank subsidiary  
Schedule of statements of income data
Selected financial information
American Savings Bank, F.S.B.
Statements of Income Data
 
 
Three months ended 
 September 30
 
Nine months ended 
 September 30
(in thousands)
 
2015
 
2014
 
2015
 
2014
Interest and dividend income
 
 

 
 

 
 

 
 

Interest and fees on loans
 
$
46,413

 
$
45,532

 
$
137,646

 
$
133,065

Interest and dividends on investment securities
 
4,213

 
2,773

 
10,570

 
8,758

Total interest and dividend income
 
50,626

 
48,305

 
148,216

 
141,823

Interest expense
 
 

 
 

 
 

 
 

Interest on deposit liabilities
 
1,355

 
1,312

 
3,881

 
3,774

Interest on other borrowings
 
1,515

 
1,438

 
4,468

 
4,263

Total interest expense
 
2,870

 
2,750

 
8,349

 
8,037

Net interest income
 
47,756

 
45,555

 
139,867

 
133,786

Provision for loan losses
 
2,997

 
1,550

 
5,436

 
3,566

Net interest income after provision for loan losses
 
44,759

 
44,005

 
134,431

 
130,220

Noninterest income
 
 

 
 

 
 

 
 

Fees from other financial services
 
5,639

 
5,642

 
16,544

 
15,987

Fee income on deposit liabilities
 
5,883

 
5,109

 
16,622

 
14,175

Fee income on other financial products
 
2,096

 
1,971

 
6,088

 
6,325

Bank-owned life insurance
 
1,021

 
1,000

 
3,062

 
2,945

Mortgage banking income
 
1,437

 
875

 
5,327

 
1,749

Gains on sale of investment securities
 
—

 
—

 
—

 
2,847

Other income, net
 
2,389

 
634

 
3,363

 
1,920

Total noninterest income
 
18,465

 
15,231

 
51,006

 
45,948

Noninterest expense
 
 

 
 

 
 

 
 

Compensation and employee benefits
 
22,728

 
19,892

 
66,813

 
60,050

Occupancy
 
4,128

 
4,517

 
12,250

 
12,959

Data processing
 
3,032

 
2,684

 
9,101

 
8,715

Services
 
2,556

 
2,580

 
7,730

 
7,708

Equipment
 
1,608

 
1,672

 
4,999

 
4,926

Office supplies, printing and postage
 
1,511

 
1,415

 
4,297

 
4,487

Marketing
 
934

 
948

 
2,619

 
2,690

FDIC insurance
 
809

 
840

 
2,393

 
2,441

Other expense
 
5,116

 
4,182

 
14,076

 
11,198

Total noninterest expense
 
42,422

 
38,730

 
124,278

 
115,174

Income before income taxes
 
20,802

 
20,506

 
61,159

 
60,994

Income taxes
 
7,351

 
7,253

 
21,382

 
21,806

Net income
 
$
13,451

 
$
13,253

 
$
39,777

 
$
39,188
Schedule of statements of comprehensive income data
American Savings Bank, F.S.B.
Statements of Comprehensive Income Data
 
 
Three months ended 
 September 30
 
Nine months ended 
 September 30
(in thousands)
 
2015
 
2014
 
2015
 
2014
Net income
 
$
13,451

 
$
13,253

 
$
39,777

 
$
39,188

Other comprehensive income (loss), net of taxes:
 
 

 
 

 
 

 
 

Net unrealized gains (losses) on available-for-sale investment securities:
 
 

 
 

 
 

 
 

Net unrealized gains (losses) on available-for-sale investment securities arising during the period, net of (taxes) benefits of $(2,543), $1,094, $(2,382) and $(2,249) for the respective periods
 
3,851

 
(1,657
)
 
3,608

 
3,406

Less: reclassification adjustment for net realized gains included in net income, net of taxes of nil, nil, nil and $1,132 for the respective periods
 
—

 
—

 
—

 
(1,715
)
Retirement benefit plans:
 
 

 
 

 
 

 
 

Less: amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $249, $138, $763 and $424 for the respective periods
 
376

 
208

 
1,155

 
642

Other comprehensive income (loss), net of taxes
 
4,227

 
(1,449
)
 
4,763

 
2,333

Comprehensive income
 
$
17,678

 
$
11,804

 
$
44,540

 
$
41,521
Schedule of balance sheets data
American Savings Bank, F.S.B.
Balance Sheets Data
(in thousands)
 
September 30, 2015
 
December 31, 2014
Assets
 
 

 
 

 
 

 
 

Cash and due from banks
 
 

 
$
103,934

 
 

 
$
107,233

Interest-bearing deposits
 
 
 
73,041

 
 
 
54,230

Available-for-sale investment securities, at fair value
 
 

 
785,837

 
 

 
550,394

Stock in Federal Home Loan Bank, at cost
 
 

 
10,678

 
 

 
69,302

Loans receivable held for investment
 
 

 
4,535,404

 
 

 
4,434,651

Allowance for loan losses
 
 

 
(48,274
)
 
 

 
(45,618
)
Net loans
 
 

 
4,487,130

 
 

 
4,389,033

Loans held for sale, at lower of cost or fair value
 
 

 
5,598

 
 

 
8,424

Other
 
 

 
307,089

 
 

 
305,416

Goodwill
 
 

 
82,190

 
 

 
82,190

Total assets
 
 

 
$
5,855,497

 
 

 
$
5,566,222

 
 
 
 
 
 
 
 
 
Liabilities and shareholder’s equity
 
 

 
 

 
 

 
 

Deposit liabilities—noninterest-bearing
 
 

 
$
1,422,843

 
 

 
$
1,342,794

Deposit liabilities—interest-bearing
 
 

 
3,403,111

 
 

 
3,280,621

Other borrowings
 
 

 
368,593

 
 

 
290,656

Other
 
 

 
103,553

 
 

 
118,363

Total liabilities
 
 

 
5,298,100

 
 

 
5,032,434

Commitments and contingencies
 
 

 


 
 

 


Common stock
 
 

 
1

 
 

 
1

Additional paid in capital
 
 
 
339,980

 
 
 
338,411

Retained earnings
 
 

 
229,211

 
 

 
211,934

Accumulated other comprehensive loss, net of tax benefits
 
 

 
 

 
 

 
 

Net unrealized gains on securities
 
$
4,070

 
 

 
$
462

 
 

Retirement benefit plans
 
(15,865
)
 
(11,795
)
 
(17,020
)
 
(16,558
)
Total shareholder’s equity
 
 

 
557,397

 
 

 
533,788

Total liabilities and shareholder’s equity
 
 

 
$
5,855,497

 
 

 
$
5,566,222

 
 
 
 
 
 
 
 
 
Other assets
 
 

 
 

 
 

 
 

Bank-owned life insurance
 
 

 
$
136,969

 
 

 
$
134,115

Premises and equipment, net
 
 

 
87,432

 
 

 
92,407

Prepaid expenses
 
 

 
3,879

 
 

 
3,196

Accrued interest receivable
 
 

 
14,577

 
 

 
13,632

Mortgage-servicing rights
 
 

 
12,258

 
 

 
11,540

Low-income housing equity investments
 
 
 
34,323

 
 
 
33,438

Real estate acquired in settlement of loans, net
 
 

 
247

 
 

 
891

Other
 
 

 
17,404

 
 

 
16,197

 
 
 

 
$
307,089

 
 

 
$
305,416

Other liabilities
 
 

 
 

 
 

 
 

Accrued expenses
 
 

 
$
28,952

 
 

 
$
37,880

Federal and state income taxes payable
 
 

 
21,565

 
 

 
28,642

Cashier’s checks
 
 

 
25,852

 
 

 
20,509

Advance payments by borrowers
 
 

 
5,389

 
 

 
9,652

Other
 
 

 
21,795

 
 

 
21,680

 
 
 

 
$
103,553

 
 

 
$
118,363
Schedule of the book value and aggregate fair value by major security type
  The major components of investment securities were as follows:
 
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Estimated fair
value
 
 
 
Gross unrealized losses
 
 
 
 
 
 
Less than 12 months
 
12 months or longer
(dollar in thousands)
 
 
 
 
 
Number of issues
 
Fair 
value
 
Amount
 
Number of issues
 
Fair 
value
 
Amount
September 30, 2015
 
 

 
 

 
 

 
 

 
 
 
 

 
 

 
 
 
 

 
 

Available-for-sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agency obligations
 
$
209,025

 
$
2,435

 
$
(342
)
 
$
211,118

 
4

 
$
24,676

 
$
(46
)
 
3

 
$
18,218

 
$
(296
)
Mortgage-related securities- FNMA, FHLMC and GNMA
 
570,055

 
6,884

 
(2,220
)
 
574,719

 
8

 
57,263

 
(278
)
 
25

 
132,874

 
(1,942
)
 
 
$
779,080

 
$
9,319

 
$
(2,562
)
 
$
785,837

 
12

 
$
81,939

 
$
(324
)
 
28

 
$
151,092

 
$
(2,238
)
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agency obligations
 
$
119,507

 
$
1,092

 
$
(1,039
)
 
$
119,560

 
6

 
$
41,970

 
$
(361
)
 
5

 
$
29,168

 
$
(678
)
Mortgage-related securities- FNMA, FHLMC and GNMA
 
430,120

 
5,653

 
(4,939
)
 
430,834

 
6

 
47,029

 
(164
)
 
29

 
172,623

 
(4,775
)
 
 
$
549,627

 
$
6,745

 
$
(5,978
)
 
$
550,394

 
12

 
$
88,999

 
$
(525
)
 
34

 
$
201,791

 
$
(5,453
)
Schedule of contractual maturities of available-for-sale securities
The contractual maturities of available-for-sale investment securities were as follows:
September 30, 2015
 
Amortized cost
 
Fair value
(in thousands)
 
 
 
 
Due in one year or less
 
$
—

 
$
—

Due after one year through five years
 
75,332

 
76,786

Due after five years through ten years
 
71,667

 
72,198

Due after ten years
 
62,026

 
62,134

 
 
209,025

 
211,118

Mortgage-related securities-FNMA,FHLMC and GNMA
 
570,055

 
574,719

Total available-for-sale securities
 
$
779,080

 
$
785,837
Schedule of allowance for loan losses
The allowance for loan losses (balances and changes) and financing receivables were as follows:
(in thousands)
 
Residential
1-4 family
 
Commercial real
estate
 
Home
equity line of credit
 
Residential land
 
Commercial construction
 
Residential construction
 
Commercial loans
 
Consumer loans
 
Unallocated
 
Total
Three months ended 
 September 30, 2015
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
 
$
4,291

 
$
10,420

 
$
6,613

 
$
2,103

 
$
2,575

 
$
18

 
$
17,469

 
$
2,876

 
$
—

 
$
46,365

Charge-offs
 
(138
)
 
—

 
(185
)
 
—

 
—

 
—

 
(126
)
 
(1,271
)
 
—

 
(1,720
)
Recoveries
 
45

 
—

 
33

 
34

 
—

 
—

 
279

 
241

 
—

 
632

Provision
 
285

 
987

 
446

 
(73
)
 
944

 
(5
)
 
(920
)
 
1,333

 
—

 
2,997

Ending balance
 
$
4,483

 
$
11,407

 
$
6,907

 
$
2,064

 
$
3,519

 
$
13

 
$
16,702

 
$
3,179

 
$
—

 
$
48,274

Three months ended 
 September 30, 2014
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
 
$
5,667

 
$
7,230

 
$
7,081

 
$
1,837

 
$
3,390

 
$
26

 
$
15,144

 
$
1,997

 
$
—

 
$
42,372

Charge-offs
 
(632
)
 
—

 
(46
)
 
(28
)
 
—

 
—

 
(886
)
 
(592
)
 
—

 
(2,184
)
Recoveries
 
160

 
—

 
299

 
90

 
—

 
—

 
952

 
222

 
—

 
1,723

Provision
 
670

 
3

 
(119
)
 
(92
)
 
1,724

 
3

 
(1,130
)
 
491

 
—

 
1,550

Ending balance
 
$
5,865

 
$
7,233

 
$
7,215

 
$
1,807

 
$
5,114

 
$
29

 
$
14,080

 
$
2,118

 
$
—

 
$
43,461

Nine months ended 
 September 30, 2015
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
 
$
4,662

 
$
8,954

 
$
6,982

 
$
1,875

 
$
5,471

 
$
28

 
$
14,017

 
$
3,629

 
$
—

 
$
45,618

Charge-offs
 
(352
)
 
—

 
(205
)
 
—

 
—

 
—

 
(928
)
 
(3,196
)
 
—

 
(4,681
)
Recoveries
 
112

 
—

 
72

 
219

 
—

 
—

 
726

 
772

 
—

 
1,901

Provision
 
61

 
2,453

 
58

 
(30
)
 
(1,952
)
 
(15
)
 
2,887

 
1,974

 
—

 
5,436

Ending balance
 
$
4,483

 
$
11,407

 
$
6,907

 
$
2,064

 
$
3,519

 
$
13

 
$
16,702

 
$
3,179

 
$
—

 
$
48,274

Ending balance: individually evaluated for impairment
 
$
1,388

 
$
—

 
$
469

 
$
919

 
$
—

 
$
—

 
$
3,084

 
$
7

 
 
 
$
5,867

Ending balance: collectively evaluated for impairment
 
$
3,095

 
$
11,407

 
$
6,438

 
$
1,145

 
$
3,519

 
$
13

 
$
13,618

 
$
3,172

 
$
—

 
$
42,407

Financing Receivables:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance
 
$
2,062,458

 
$
618,113

 
$
832,267

 
$
17,369

 
$
80,230

 
$
14,318

 
$
798,428

 
$
118,450

 
 
 
$
4,541,633

Ending balance: individually evaluated for impairment
 
$
22,560

 
$
—

 
$
2,909

 
$
5,710

 
$
—

 
$
—

 
$
22,853

 
$
14

 
 
 
$
54,046

Ending balance: collectively evaluated for impairment
 
$
2,039,898

 
$
618,113

 
$
829,358

 
$
11,659

 
$
80,230

 
$
14,318

 
$
775,575

 
$
118,436

 
 
 
$
4,487,587

Nine months ended 
 September 30, 2014
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
 
$
5,534

 
$
5,059

 
$
5,229

 
$
1,817

 
$
2,397

 
$
19

 
$
15,803

 
$
2,367

 
$
1,891

 
$
40,116

Charge-offs
 
(992
)
 
—

 
(182
)
 
(81
)
 
—

 
—

 
(1,256
)
 
(1,614
)
 
—

 
(4,125
)
Recoveries
 
1,056

 
—

 
624

 
253

 
—

 
—

 
1,277

 
694

 
—

 
3,904

Provision
 
267

 
2,174

 
1,544

 
(182
)
 
2,717

 
10

 
(1,744
)
 
671

 
(1,891
)
 
3,566

Ending balance
 
$
5,865

 
$
7,233

 
$
7,215

 
$
1,807

 
$
5,114

 
$
29

 
$
14,080

 
$
2,118

 
$
—

 
$
43,461

Ending balance: individually evaluated for impairment
 
$
917

 
$
4

 
$
8

 
$
1,171

 
$
—

 
$
—

 
$
810

 
$
5

 
 
 
$
2,915

Ending balance: collectively evaluated for impairment
 
$
4,948

 
$
7,229

 
$
7,207

 
$
636

 
$
5,114

 
$
29

 
$
13,270

 
$
2,113

 
$
—

 
$
40,546

Financing Receivables:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance
 
$
2,030,337

 
$
502,356

 
$
808,991

 
$
16,935

 
$
87,461

 
$
18,699

 
$
770,079

 
$
107,531

 
 
 
$
4,342,389

Ending balance: individually evaluated for impairment
 
$
20,015

 
$
754

 
$
392

 
$
8,872

 
$
—

 
$
—

 
$
15,058

 
$
16

 
 
 
$
45,107

Ending balance: collectively evaluated for impairment
 
$
2,010,322

 
$
501,602

 
$
808,599

 
$
8,063

 
$
87,461

 
$
18,699

 
$
755,021

 
$
107,515

 
 
 
$
4,297,282
Schedule of credit risk profile by internally assigned grade for loans
The credit risk profile by internally assigned grade for loans was as follows:
 
 
September 30, 2015
 
December 31, 2014
(in thousands)
 
Commercial
real estate
 
Commercial
construction
 
Commercial
 
Commercial
real estate
 
Commercial
construction
 
Commercial
Grade:
 
 

 
 

 
 

 
 

 
 

 
 

Pass
 
$
563,734

 
$
70,950

 
$
745,624

 
$
493,105

 
$
79,312

 
$
743,334

Special mention
 
9,460

 
9,280

 
10,316

 
5,209

 
—

 
16,095

Substandard
 
44,919

 
—

 
40,662

 
33,603

 
17,126

 
31,665

Doubtful
 
—

 
—

 
1,826

 
—

 
—

 
663

Loss
 
—

 
—

 
—

 
—

 
—

 
—

Total
 
$
618,113

 
$
80,230

 
$
798,428

 
$
531,917

 
$
96,438

 
$
791,757
Schedule of credit risk profile based on payment activity for loans
The credit risk profile based on payment activity for loans was as follows:
(in thousands)
 
30-59
days
past due
 
60-89
days
past due
 
Greater
than
90 days
 
Total
past due
 
Current
 
Total
financing
receivables
 
Recorded
investment>
90 days and
accruing
September 30, 2015
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
6,354

 
$
1,722

 
$
11,852

 
$
19,928

 
$
2,042,530

 
$
2,062,458

 
$
—

Commercial real estate
 
—

 
—

 
—

 
—

 
618,113

 
618,113

 
—

Home equity line of credit
 
1,192

 
81

 
436

 
1,709

 
830,558

 
832,267

 
—

Residential land
 
120

 
—

 
415

 
535

 
16,834

 
17,369

 
—

Commercial construction
 
—

 
—

 
—

 
—

 
80,230

 
80,230

 
—

Residential construction
 
—

 
—

 
—

 
—

 
14,318

 
14,318

 
—

Commercial
 
546

 
312

 
1,005

 
1,863

 
796,565

 
798,428

 
—

Consumer
 
1,357

 
491

 
377

 
2,225

 
116,225

 
118,450

 
—

Total loans
 
$
9,569

 
$
2,606

 
$
14,085

 
$
26,260

 
$
4,515,373

 
$
4,541,633

 
$
—

December 31, 2014
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
6,124

 
$
1,732

 
$
12,632

 
$
20,488

 
$
2,023,717

 
$
2,044,205

 
$
—

Commercial real estate
 
—

 
—

 
—

 
—

 
531,917

 
531,917

 
—

Home equity line of credit
 
1,341

 
501

 
194

 
2,036

 
816,779

 
818,815

 
—

Residential land
 
—

 
—

 
—

 
—

 
16,240

 
16,240

 
—

Commercial construction
 
—

 
—

 
—

 
—

 
96,438

 
96,438

 
—

Residential construction
 
—

 
—

 
—

 
—

 
18,961

 
18,961

 
—

Commercial
 
699

 
145

 
569

 
1,413

 
790,344

 
791,757

 
—

Consumer
 
829

 
333

 
403

 
1,565

 
121,091

 
122,656

 
—

Total loans
 
$
8,993

 
$
2,711

 
$
13,798

 
$
25,502

 
$
4,415,487

 
$
4,440,989

 
$
—
Schedule of credit risk profile based on nonaccrual loans, accruing loans 90 days or more past due
The credit risk profile based on nonaccrual loans, accruing loans 90 days or more past due and TDR loans was as follows:
(in thousands)
 
September 30, 2015
 
December 31, 2014
Real estate:
 
 

 
 

Residential 1-4 family
 
$
19,987

 
$
19,253

Commercial real estate
 
—

 
5,112

Home equity line of credit
 
1,982

 
1,087

Residential land
 
975

 
720

Commercial construction
 
—

 
—

Residential construction
 
—

 
—

Commercial
 
21,767

 
10,053

Consumer
 
645

 
661

Total nonaccrual loans
 
$
45,356

 
$
36,886

Real estate:
 
 
 
 
Residential 1-4 family
 
$
—

 
$
—

Commercial real estate
 
—

 
—

Home equity line of credit
 
—

 
—

Residential land
 
—

 
—

Commercial construction
 
—

 
—

Residential construction
 
—

 
—

Commercial
 
—

 
—

Consumer
 
—

 
—

Total accruing loans 90 days or more past due
 
$
—

 
$
—

Real estate:
 
 
 
 
Residential 1-4 family
 
$
14,182

 
$
13,525

Commercial real estate
 
—

 
—

Home equity line of credit
 
2,297

 
480

Residential land
 
4,735

 
7,130

Commercial construction
 
—

 
—

Residential construction
 
—

 
—

Commercial
 
1,212

 
2,972

Consumer
 
—

 
—

Total troubled debt restructured loans not included above
 
$
22,426

 
$
24,107
Schedule of the carrying amount and the total unpaid principal balance of impaired loans, with and without recorded allowance for loans losses
The total carrying amount and the total unpaid principal balance of impaired loans were as follows:
 
 
September 30, 2015
 
Three months ended 
 September 30, 2015
 
Nine months ended 
 September 30, 2015
(in thousands)
 
Recorded
investment
 
Unpaid
principal
balance
 
Related
Allowance
 
Average
recorded
investment
 
Interest
income
recognized*
 
Average
recorded
investment
 
Interest
income
recognized*
With no related allowance recorded
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
11,125

 
$
12,476

 
$
—

 
$
11,159

 
$
119

 
$
11,301

 
$
274

Commercial real estate
 
—

 
—

 
—

 
—

 
74

 
362

 
74

Home equity line of credit
 
507

 
744

 
—

 
498

 
1

 
444

 
3

Residential land
 
1,652

 
2,421

 
—

 
2,280

 
29

 
2,647

 
125

Commercial construction
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial
 
3,152

 
4,765

 
—

 
4,250

 
3

 
5,659

 
144

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
 
$
16,436

 
$
20,406

 
$
—

 
$
18,187

 
$
226

 
$
20,413

 
$
620

With an allowance recorded
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
11,435

 
$
11,488

 
$
1,388

 
$
11,451

 
$
174

 
$
11,585

 
$
430

Commercial real estate
 
—

 
—

 
—

 
—

 
—

 
1,985

 
—

Home equity line of credit
 
2,402

 
2,464

 
469

 
2,048

 
13

 
1,295

 
27

Residential land
 
4,058

 
4,136

 
919

 
3,971

 
74

 
4,435

 
241

Commercial construction
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial
 
19,701

 
21,976

 
3,084

 
18,487

 
106

 
10,942

 
192

Consumer
 
14

 
14

 
7

 
14

 
—

 
15

 
—

 
 
$
37,610

 
$
40,078

 
$
5,867

 
$
35,971

 
$
367

 
$
30,257

 
$
890

Total
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
22,560

 
$
23,964

 
$
1,388

 
$
22,610

 
$
293

 
$
22,886

 
$
704

Commercial real estate
 
—

 
—

 
—

 
—

 
74

 
2,347

 
74

Home equity line of credit
 
2,909

 
3,208

 
469

 
2,546

 
14

 
1,739

 
30

Residential land
 
5,710

 
6,557

 
919

 
6,251

 
103

 
7,082

 
366

Commercial construction
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial
 
22,853

 
26,741

 
3,084

 
22,737

 
109

 
16,601

 
336

Consumer
 
14

 
14

 
7

 
14

 
—

 
15

 
—

 
 
$
54,046

 
$
60,484

 
$
5,867

 
$
54,158

 
$
593

 
$
50,670

 
$
1,510


 
 
December 31, 2014
 
Year ended December 31, 2014
(in thousands)
 
Recorded
investment
 
Unpaid
principal
balance
 
Related
allowance
 
Average
recorded
investment
 
Interest
income
recognized*
With no related allowance recorded
 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
11,654

 
$
12,987

 
$
—

 
$
9,056

 
$
227

Commercial real estate
 
571

 
626

 
—

 
194

 
—

Home equity line of credit
 
363

 
606

 
—

 
402

 
5

Residential land
 
2,344

 
3,200

 
—

 
2,728

 
172

Commercial construction
 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

Commercial
 
8,235

 
11,471

 
—

 
5,204

 
38

Consumer
 
—

 
—

 
—

 
8

 
—

 
 
$
23,167

 
$
28,890

 
$
—

 
$
17,592

 
$
442

With an allowance recorded
 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
11,327

 
$
11,347

 
$
951

 
$
8,822

 
$
419

Commercial real estate
 
4,541

 
4,541

 
1,845

 
3,415

 
478

Home equity line of credit
 
416

 
420

 
46

 
132

 
6

Residential land
 
5,506

 
5,584

 
1,057

 
6,415

 
484

Commercial construction
 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

Commercial
 
4,873

 
5,211

 
760

 
12,089

 
438

Consumer
 
16

 
16

 
6

 
9

 
—

 
 
$
26,679

 
$
27,119

 
$
4,665

 
$
30,882

 
$
1,825

Total
 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
22,981

 
$
24,334

 
$
951

 
$
17,878

 
$
646

Commercial real estate
 
5,112

 
5,167

 
1,845

 
3,609

 
478

Home equity line of credit
 
779

 
1,026

 
46

 
534

 
11

Residential land
 
7,850

 
8,784

 
1,057

 
9,143

 
656

Commercial construction
 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

Commercial
 
13,108

 
16,682

 
760

 
17,293

 
476

Consumer
 
16

 
16

 
6

 
17

 
—

 
 
$
49,846

 
$
56,009

 
$
4,665

 
$
48,474

 
$
2,267

 
*
Since loan was classified as impaired.
Schedule of loan modifications
Loans modified in TDRs that experienced a payment default of 90 days or more in for the indicated periods, and for which the payment of default occurred within one year of the modification, were as follows:
 
 
Three months ended September 30, 2015
 
Nine months ended September 30, 2015
(dollars in thousands)
 
Number of contracts
 
Recorded investment
 
Number of contracts
 
Recorded investment
Troubled debt restructurings that
 subsequently defaulted
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 

 
 
 
 

Residential 1-4 family
 
—
 
$
—

 
—
 
$
—

Commercial real estate
 
—
 
—

 
—
 
—

Home equity line of credit
 
1
 
7

 
1
 
7

Residential land
 
—
 
—

 
—
 
—

Commercial construction
 
—
 
—

 
—
 
—

Residential construction
 
—
 
—

 
—
 
—

Commercial loans
 
—
 
—

 
—
 
—

Consumer loans
 
—
 
—

 
—
 
—

 
 
1
 
$
7

 
1
 
$
7

 

Three months ended September 30, 2014

Nine months ended September 30, 2014
(dollars in thousands)

Number of contracts

Recorded investment

Number of contracts

Recorded investment
Troubled debt restructurings that
 subsequently defaulted

 

 

 

 
Real estate loans:

 

 


 

 

Residential 1-4 family

—

$
—


1

$
390

Commercial real estate

—

—


—

—

Home equity line of credit

—

—


—

—

Residential land

—

—


—

—

Commercial construction

—

—


—

—

Residential construction

—

—


—

—

Commercial loans

—

—


—

—

Consumer loans

—

—


—

—

 

—

$
—


1

$
390

Loan modifications that occurred and the impact on the allowance for loan losses were as follows:
 
 
Three months ended September 30, 2015
 
Nine months ended September 30, 2015
 
 
Number of contracts
 
Outstanding recorded 
investment1
 
Net increase in allowance
 
Number of contracts
 
Outstanding recorded 
investment1
 
Net increase in allowance
(dollars in thousands)
 
 
Pre-modification
 
Post-modification
 
(as of period end)
 
 
Pre-modification
 
Post-modification
 
(as of period end)
Troubled debt restructurings
 
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 
Real estate:
 
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 
Residential 1-4 family
 
3

 
$
860

 
$
866

 
$
1

 
10

 
$
2,055

 
$
2,079

 
$
48

Commercial real estate
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Home equity line of credit
 
10

 
943

 
943

 
140

 
32

 
2,062

 
2,062

 
300

Residential land
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial construction
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial
 
2

 
1,208

 
1,208

 
16

 
6

 
1,461

 
1,461

 
94

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
 
15

 
$
3,011

 
$
3,017

 
$
157

 
48

 
$
5,578

 
$
5,602

 
$
442


 
 
Three months ended September 30, 2014
 
Nine months ended September 30, 2014
 
 
Number of contracts
 
Outstanding recorded 
investment1
 
Net increase in allowance
 
Number of contracts
 
Outstanding recorded 
investment1
 
Net increase in allowance
(dollars in thousands)
 
 
Pre-modification
 
Post-modification
 
(as of period end)
 
 
Pre-modification
 
Post-modification
 
(as of period end)
Troubled debt restructurings
 
 

 
 

 
 

 
 
 
 
 
 

 
 

 
 
Real estate:
 
 

 
 

 
 

 
 
 
 
 
 

 
 

 
 
Residential 1-4 family
 
6

 
$
1,800

 
$
1,825

 
$
43

 
18

 
$
4,915

 
$
4,972

 
$
294

Commercial real estate
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Home equity line of credit
 
1

 
91

 
91

 
—

 
1

 
91

 
91

 
—

Residential land
 
2

 
256

 
256

 
—

 
18

 
4,304

 
4,304

 
400

Commercial construction
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial
 
2

 
2,600

 
2,600

 
—

 
7

 
3,827

 
3,827

 
14

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
 
11

 
$
4,747

 
$
4,772

 
$
43

 
44

 
$
13,137

 
$
13,194

 
$
708


1
The reported balances include loans that became TDR during the period, and were fully paid-off, charged-off, or sold prior to period end.
Schedule of amortized intangible assets
The carrying values of mortgage servicing assets were as follows:
(in thousands)
 
Gross
carrying amount
 
Accumulated amortization
 
Valuation allowance
 
Net
carrying amount
September 30, 2015
 
$
29,818

 
$
(17,560
)
 
$
—

 
$
12,258

September 30, 2014
 
26,685

 
(15,003
)
 
(158
)
 
11,524

Changes related to mortgage servicing rights were as follows:
(in thousands)
2015

 
2014

Mortgage servicing rights
 
 
 
Balance, January 1
$
11,749

 
$
11,938

Amount capitalized
2,636

 
1,098

Amortization
(2,123
)
 
(1,297
)
Other-than-temporary impairment
(4
)
 
(57
)
Carrying amount before valuation allowance, September 30
12,258

 
11,682

Valuation allowance for mortgage servicing rights
 
 
 
Balance, January 1
209

 
251

Provision (recovery)
(205
)
 
(36
)
Other-than-temporary impairment
(4
)
 
(57
)
Balance, September 30
—

 
158

Net carrying value of mortgage servicing rights
$
12,258

 
$
11,524
Schedule of key assumptions used in estimating fair value
Key assumptions used in estimating the fair value of the bank’s mortgage servicing rights were as follows:
(dollars in thousands)
 
September 30, 2015

 
December 31, 2014

Unpaid principal balance
 
$
1,503,369

 
$
1,391,030

Weighted average note rate
 
4.01
%
 
4.07
%
Weighted average discount rate
 
9.5
%
 
9.6
%
Weighted average prepayment speed
 
9.9
%
 
9.5
%
The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis:
 
 
 
 
 
 
 
 
 
Significant unobservable
 input value 1
($ in thousands)
 
Fair value
 
Valuation technique
 
Significant unobservable input
 
Range
 
Weighted
Average
September 30, 2015
 
 
 
 
 
 
 
 
 
 
Residential loans
 
$
823

 
Fair value of property or collateral
 
Appraised value less 7% selling costs
 
31-91%
 
70%
Home equity lines of credit
 
128

 
Fair value of property or collateral
 
Appraised value less 7% selling costs
 
 
 
52%
Total loans
 
$
951

 
 
 
 
 
 
 
 
Real estate acquired in settlement of loans
 
$
70

 
Fair value of property or collateral
 
Appraised value less 7% selling costs
 
100%
 
100%
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
Residential loans
 
$
2,297

 
Fair value of property or collateral
 
Appraised value less 7% selling costs
 
39-99%
 
83%
Home equity lines of credit
 
3

 
Fair value of property or collateral
 
Appraised value less 7% selling costs
 
 
 
7%
Commercial loans
 
145

 
Fair value of property or collateral
 
Fair value of business assets
 
 
 
91%
Total loans
 
$
2,445

 
 
 
 
 
 
 
 
Real estate acquired in settlement of loans
 
$
288

 
Fair value of property or collateral
 
Appraised value less 7% selling cost
 
100%
 
100%
 1 Represent percent of outstanding principal balance.
Schedule of sensitivity analysis of fair value, transferor's interests in transferred financial assets
The sensitivity analysis of fair value of MSR to hypothetical adverse changes of 25 and 50 basis points in certain key assumptions is as follows:
(dollars in thousands)
 
September 30, 2015

 
December 31, 2014

Prepayment rate:
 
 
 
 
  25 basis points adverse rate change
 
$
(832
)
 
$
(757
)
  50 basis points adverse rate change
 
(1,643
)
 
(1,524
)
Discount rate:
 
 
 
 
  25 basis points adverse rate change
 
(148
)
 
(140
)
  50 basis points adverse rate change
 
(293
)
 
(278
)
Schedule of securities sold under agreements to repurchase
The following tables present information about the securities sold under agreements to repurchase, including the related collateral received from or pledged to counterparties:
(in millions)
 
Gross amount of
recognized liabilities
 
Gross amount offset in
the Balance Sheet
 
Net amount of liabilities presented
in the Balance Sheet
Repurchase agreements
 
 
 
 
 
 
September 30, 2015
 
$269
 
$—
 
$269
December 31, 2014
 
191
 
—
 
191
 
 
Gross amount not offset in the Balance Sheet
(in millions)
 
Net amount of 
liabilities presented
in the Balance Sheet
 
Financial
instruments
 
Cash
collateral
pledged
 
Net amount
September 30, 2015
 
 

 
 

 
 

 
 

Financial institution
 
$
50

 
$
50

 
$
—

 
$
—

Government entities
 
66

 
66

 
—

 
—

Commercial account holders
 
153

 
153

 
—

 
—

Total
 
$
269

 
$
269

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
December 31, 2014
 
 

 
 

 
 

 
 

Financial institution
 
$
50

 
$
50

 
$
—

 
$
—

Government entities
 
56

 
56

 
—

 
—

Commercial account holders
 
85

 
85

 
—

 
—

Total
 
$
191

 
$
191

 
$
—

 
$
—
Schedule of notional and fair value of derivatives
The notional amount and fair value of ASB’s derivative financial instruments were as follows:
 
 
September 30, 2015
 
December 31, 2014
(in thousands)
 
Notional amount
 
Fair value
 
Notional amount
 
Fair value
Interest rate lock commitments
 
$
27,587

 
$
585

 
$
29,330

 
$
390

Forward commitments
 
24,706

 
(124
)
 
32,833

 
(106
)
Schedule of derivative financial instruments
ASB’s derivative financial instruments, their fair values, and balance sheet location were as follows:
Derivative Financial Instruments Not Designated as Hedging Instruments 1
 
September 30, 2015
 
December 31, 2014
(in thousands)
 
 Asset derivatives
 
 Liability
derivatives
 
 Asset derivatives
 
 Liability
derivatives
Interest rate lock commitments
 
$
585

 
$
—

 
$
393

 
$
3

Forward commitments
 
1

 
125

 
5

 
111

 
 
$
586

 
$
125

 
$
398

 
$
114

1 Asset derivatives are included in other assets and liability derivatives are included in other liabilities in the balance sheets.
Schedule of derivative financial instruments and net gain or loss
The following table presents ASB’s derivative financial instruments and the amount and location of the net gains or losses recognized in the statements of income:
Derivative Financial Instruments Not Designated as Hedging Instruments
Location of net gains (losses) recognized in the Statement of Income
 
Three months ended 
 September 30
 
Nine months  
 ended September 30
(in thousands)
 
2015
 
2014
 
2015
 
2014
Interest rate lock commitments
Mortgage banking income
 
$
139

 
$
215

 
$
195

 
$
(249
)
Forward commitments
Mortgage banking income
 
(117
)
 
(25
)
 
(18
)
 
(164
)
 
 
 
$
22

 
$
190

 
$
177

 
$
(413
)