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Fair value measurements (Tables)
 9 Months Ended
Sep. 30, 2017
Fair Value Disclosures [Abstract]  
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)
 
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Total
September 30, 2017
 
 

 
 

 
 

 
 

 
 

Financial assets
 
 

 
 

 
 

 
 

 
 

HEI consolidated
 
 
 
 
 
 
 
 
 
 
Available-for-sale investment securities
 
$
1,320,110

 
$
—

 
$
1,304,683

 
$
15,427

 
$
1,320,110

Stock in Federal Home Loan Bank
 
9,706

 
—

 
9,706

 
—

 
9,706

Loans receivable, net
 
4,638,962

 
13,260

 
2,468

 
4,791,209

 
4,806,937

Mortgage servicing rights
 
9,070

 
—

 
—

 
12,091

 
12,091

Bank-owned life insurance
 
147,391

 
—

 
147,391

 
—

 
147,391

Derivative assets
 
8,399

 
—

 
591

 
—

 
591

Hawaiian Electric consolidated
 
 
 
 
 
 
 
 
 
 
Derivative assets-window forward contracts
 
8,014

 
—

 
584

 
—

 
584

Financial liabilities
 
 

 
 

 
 

 
 

 
 
HEI consolidated
 
 
 
 
 
 
 
 
 
 
Deposit liabilities
 
5,752,326

 
—

 
5,748,858

 
—

 
5,748,858

Short-term borrowings—other than bank
 
24,498

 
—

 
24,498

 
—

 
24,498

Other bank borrowings
 
153,552

 
—

 
153,717

 
—

 
153,717

Long-term debt, net—other than bank
 
1,618,446

 
—

 
1,747,972

 
—

 
1,747,972

   Derivative liabilities
 
500

 
2

 
—

 
—

 
2

Hawaiian Electric consolidated
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
 
6,000

 
—

 
6,000

 
—

 
6,000

Long-term debt, net
 
1,318,623

 
—

 
1,441,855

 
—

 
1,441,855

December 31, 2016
 
 

 
 

 
 

 
 

 
 

Financial assets
 
 

 
 

 
 

 
 

 
 

HEI consolidated
 
 
 
 
 
 
 
 
 
 
Money market funds
 
$
13,085

 
$
—

 
$
13,085

 
$
—

 
$
13,085

Available-for-sale investment securities
 
1,105,182

 
—

 
1,089,755

 
15,427

 
1,105,182

Stock in Federal Home Loan Bank
 
11,218

 
—

 
11,218

 
—

 
11,218

Loans receivable, net
 
4,701,977

 
—

 
13,333

 
4,839,493

 
4,852,826

Mortgage servicing rights
 
9,373

 
—

 
—

 
13,216

 
13,216

Bank-owned life insurance
 
143,197

 
—

 
143,197

 
—

 
143,197

Derivative assets
 
23,578

 
—

 
453

 
—

 
453

Financial liabilities
 
 

 
 

 
 

 
 

 
 
HEI consolidated
 
 
 
 
 
 
 
 
 
 
Deposit liabilities
 
5,548,929

 
—

 
5,546,644

 
—

 
5,546,644

Other bank borrowings
 
192,618

 
—

 
193,991

 
—

 
193,991

Long-term debt, net—other than bank
 
1,619,019

 
—

 
1,704,717

 
—

 
1,704,717

Derivative liabilities
 
53,852

 
129

 
823

 
—

 
952

Hawaiian Electric consolidated
 
 
 
 
 
 
 
 
 
 
Long-term debt, net
 
1,319,260

 
—

 
1,399,490

 
—

 
1,399,490

Derivative liabilities-window forward contracts
 
20,734

 
—

 
743

 
—

 
743
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:
 
 
September 30, 2017
 
December 31, 2016
 
 
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)
 
$
—

 
$
—

 
$
—

 
$
—

 
$
13,085

 
$
—

Available-for-sale investment securities (bank segment)
 
 

 
 

 
 

 
 

 
 

 
 

Mortgage-related securities-FNMA, FHLMC and GNMA
 
$
—

 
$
1,122,565

 
$
—

 
$
—

 
$
897,474

 
$
—

U.S. Treasury and federal agency obligations
 
—

 
182,118

 
—

 
—

 
192,281

 
—

Mortgage revenue bond
 
—

 
—

 
15,427

 
—

 
—

 
15,427

 
 
$
—

 
$
1,304,683

 
$
15,427

 
$
—

 
$
1,089,755

 
$
15,427

Derivative assets
 
 

 
 

 
 

 
 

 
 

 
 

Interest rate lock commitments (bank segment) 1
 
$
—

 
$
7

 
$
—

 
$
—

 
$
445

 
$
—

Forward commitments (bank segment) 1
 
—

 
—

 
—

 
—

 
8

 
—

Window forward contracts (electric utility segment)2
 
—

 
584

 
—

 
—

 
—

 
—

 
 
$
—

 
$
591

 
$
—

 
$
—

 
$
453

 
$
—

Derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate lock commitments (bank segment) 1
 
$
—

 
$
—

 
$
—

 
$
—

 
$
24

 
$
—

Forward commitments (bank segment) 1
 
2

 
—

 
—

 
129

 
56

 
—

Window forward contracts (electric utility segment)2
 
—

 
—

 
—

 
—

 
743

 
—

 
 
$
2

 
$
—

 
$
—

 
$
129

 
$
823

 
$
—

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 Derivatives are included in noncurrent regulatory assets and/or liabilities in the balance sheets.
Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis
The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:
 
 
Three months ended September 30
 
Nine months ended September 30
Mortgage revenue bond
 
2017
2016
 
2017
2016
(in thousands)
 
 
 
 
 
 
Beginning balance
 
$
15,427

$
—

 
$
15,427

$
—

Principal payments received
 
—

—

 
—

—

Purchases
 
—

—

 
—

—

Unrealized gain (loss) included in other comprehensive income
 
—

—

 
—

—

Ending balance
 
$
15,427

$
—

 
$
15,427

$
—
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
September 30, 2017
 
 
 
 
 
 
 
 
Loans
 
$
2,881

 
$
—

 
$
—

 
$
2,881

Real estate acquired in settlement of loans
 
93

 
—

 
—

 
93

December 31, 2016
 
 
 
 
 
 
 
 
Loans
 
2,767

 
—

 
—

 
2,767

Real estate acquired in settlement of loans
 
1,189

 
—

 
—

 
1,189
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)
 
September 30, 2017

 
December 31, 2016

Unpaid principal balance
 
$
1,212,730

 
$
1,188,380

Weighted average note rate
 
3.94
%
 
3.96
%
Weighted average discount rate
 
10.0
%
 
9.4
%
Weighted average prepayment speed
 
9.2
%
 
8.5
%
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, 2017
 
 
 
 
 
 
 
 
 
 
Residential loans
 
$
731

 
Fair value of collateral
 
Appraised value less 7% selling cost
 
50-91%
 
69%
Commercial loans
 
2,150

 
Fair value of collateral
 
Appraised value
 
72-76%
 
76%
Total loans
 
$
2,881

 
 
 
 
 
 
 
 
Real estate acquired in settlement of loans
 
$
93

 
Sales price
 
Sales price less 7% selling cost
 

 
N/A (2)
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
Residential loans
 
$
2,468

 
Sales price
 
Sales price
 
95-100%
 
97%
Residential loans
 
287

 
Fair value of property or collateral
 
Appraised value less 7% selling cost
 
42-65%
 
61%
Home equity lines of credit
 
12

 
Fair value of property or collateral
 
Appraised value less 7% selling cost
 
 
 
N/A (2)
Total loans
 
$
2,767

 
 
 
 
 
 
 
 
Real estate acquired in settlement of loans
 
$
1,189

 
Fair value of property or collateral
 
Appraised value less 7% selling cost
 
100%
 
100%
(1) Represent percent of outstanding principal balance.
(2) N/A - Not applicable. There is one loan or property in each fair value measurement type.