Fair value measurements (Tables)

6 Months Ended

Jun. 30, 2016

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

The following table presents the carrying or notional amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments. For stock in Federal Home Loan Bank, the carrying amount is a reasonable estimate of fair value because it can only be redeemed at par. For bank-owned life insurance, the carrying amount is the cash surrender value of the insurance policies, which is a reasonable estimate of fair value. For financial liabilities such as noninterest-bearing demand, interest-bearing demand, and savings and money market deposits, the carrying amount is a reasonable estimate of fair value as these liabilities have no stated maturity.



			Estimated fair value
	Carrying or notional amount		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(in thousands)	Carrying or notional amount		(Level 1)		(Level 2)		(Level 3)		Total
June 30, 2016
Financial assets
Money market funds	$	10	$	—	$	10	$	—	$	10
Available-for-sale investment securities	894,021		—		894,021		—		894,021
Stock in Federal Home Loan Bank	11,218		—		11,218		—		11,218
Loans receivable, net	4,705,840		—		6,242		4,933,935		4,940,177
Mortgage servicing rights	9,016		—		—		11,224		11,224
Bank-owned life insurance	140,176		—		140,176		—		140,176
Derivative assets	55,879		—		1,219		—		1,219
The Utilities’ derivative assets (included in amount above)	20,637		—		420		—		420
Financial liabilities
Deposit liabilities	5,232,203		—		5,238,391		—		5,238,391
Short-term borrowings—other than bank	115,985		—		115,985		—		115,985
The Utilities’ short-term borrowings (included in amount above)	36,995		—		36,995		—		36,995
Other bank borrowings	272,887		—		276,709		—		276,709
Long-term debt, net—other than bank	1,578,842		—		1,749,242		—		1,749,242
The Utilities’ long-term debt, net (included in amount above)	1,279,123		—		1,441,061		—		1,441,061
Derivative liabilities	30,263		211		59		—		270
December 31, 2015
Financial assets
Money market funds	$	10	$	—	$	10	$	—	$	10
Available-for-sale investment securities	820,648		—		820,648		—		820,648
Stock in Federal Home Loan Bank	10,678		—		10,678		—		10,678
Loans receivable, net	4,570,412		—		4,639		4,744,886		4,749,525
Mortgage servicing rights	8,884		—		—		11,790		11,790
Bank-owned life insurance	138,139		—		138,139		—		138,139
Derivative assets	22,616		—		385		—		385
Financial liabilities
Deposit liabilities	5,025,254		—		5,024,500		—		5,024,500
Short-term borrowings—other than bank	103,063		—		103,063		—		103,063
Other bank borrowings	328,582		—		333,392		—		333,392
Long-term debt, net—other than bank*	1,578,368		—		1,669,087		—		1,669,087
The Utilities’ long-term debt, net (included in amount above)*	1,278,702		—		1,363,766		—		1,363,766
Derivative liabilities	23,269		15		15		—		30

* See Note 11 for the impact to prior period financial information of the adoption of ASU No. 2015-03.

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:



	June 30, 2016						December 31, 2015
	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 investment securities (bank segment)
Mortgage-related securities-FNMA, FHLMC and GNMA	$	—	$	695,862	$	—	$	—	$	607,689	$	—
U.S. Treasury and federal agency obligations	—		198,159		—		—		212,959		—
	$	—	$	894,021	$	—	$	—	$	820,648	$	—
Derivative assets
Interest rate lock commitments ¹	$	—	$	795	$	—	$	—	$	384	$	—
Forward commitments ¹	—		4		—		—		1		—
Window forward contract ²	—		420		—		—		—		—
	$	—	$	1,219	$	—	$	—	$	385	$	—
Derivative liabilities ¹
Interest rate lock commitments	$	—	$	—	$	—	$	—	$	—	$	—
Forward commitments	211		59		—		15		15		—
	$	211	$	59	$	—	$	15	$	15	$	—

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.

² Asset derivatives are included in other current assets in the balance sheets.

Schedule of assets measured at fair value on a nonrecurring basis

The carrying value of assets measured at fair value on a nonrecurring basis were as follows:



			Fair value measurements
(in thousands)	Balance		Level 1		Level 2		Level 3
June 30, 2016
Loans	$	313	$	—	$	—	$	313
Real estate acquired in settlement of loans	446		—		—		446
December 31, 2015
Loans	178		—		—		178
Real estate acquired in settlement of loans	1,030		—		—		1,030

Schedule of significant unobservable inputs used in the fair value measurement

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



(dollars in thousands)	June 30, 2016			December 31, 2015
Unpaid principal balance	$	1,137,226		$	1,097,314
Weighted average note rate	4.03		%	4.05		%
Weighted average discount rate	9.4		%	9.6		%
Weighted average prepayment speed	11.4		%	9.3		%

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

June 30, 2016

Residential loans

313

Fair value of property or collateral

Appraised value less 7% selling costs

42-94%

78%

Real estate acquired in settlement of loans

446

Fair value of property or collateral

Appraised value less 7% selling costs

100%

December 31, 2015

Residential loans

Fair value of property or collateral

Appraised value less 7% selling costs

N/A (2)

Home equity lines of credit

128

Fair value of property or collateral

Appraised value less 7% selling costs

N/A (2)

Total loans

178

Real estate acquired in settlement of loans

1,030

Fair value of property or collateral

Appraised value less 7% selling cost

100%

(1) Represent percent of outstanding principal balance.


(2)	N/A - Not applicable. There is one loan in each fair value measurement type.