Bank segment (HEI only)

12 Months Ended

Dec. 31, 2019

Bank Segment Disclosure [Abstract]

Bank segment (HEI only)

Note 4· Bank segment (HEI only)

Selected financial information

American Savings Bank, F.S.B.

Statements of Income and Comprehensive Income Data

Years ended December 31	2019		2018			2017
(in thousands)
Interest and dividend income
Interest and fees on loans	$	233,632	$	220,463		$	207,255
Interest and dividends on investment securities	32,922		37,762			28,823
Total interest and dividend income	266,554		258,225			236,078
Interest expense
Interest on deposit liabilities	16,830		13,991			9,660
Interest on other borrowings	1,610		1,548			2,496
Total interest expense	18,440		15,539			12,156
Net interest income	248,114		242,686			223,922
Provision for loan losses	23,480		14,745			10,901
Net interest income after provision for loan losses	224,634		227,941			213,021
Noninterest income
Fees from other financial services	19,275		18,937			22,796
Fee income on deposit liabilities	20,877		21,311			22,204
Fee income on other financial products	6,507		7,052			7,205
Bank-owned life insurance	7,687		5,057			5,539
Mortgage banking income	4,943		1,493			2,201
Gain on sale of real estate	10,762		—			—
Gains on sale of investment securities, net	653		—			—
Other income, net	2,074		2,200			1,617
Total noninterest income	72,778		56,050			61,562
Noninterest expense
Compensation and employee benefits	103,009		98,387			94,931
Occupancy	21,272		17,073			16,699
Data processing	15,306		14,268			13,280
Services	10,239		10,847			10,994
Equipment	8,760		7,186			7,232
Office supplies, printing and postage	5,512		6,134			6,182
Marketing	4,490		3,567			3,501
FDIC insurance	1,204		2,713			2,904
Other expense	15,586		17,238			20,144
Total noninterest expense	185,378		177,413			175,867
Income before income taxes	112,034		106,578			98,716
Income taxes	23,061		24,069			31,719
Net income	88,973		82,509			66,997
Other comprehensive income (loss), net of taxes	29,406		(7,119		)	(3,139		)
Comprehensive income	$	118,379	$	75,390		$	63,858

Reconciliation to amounts per HEI Consolidated Statements of Income*:

Years ended December 31	2019			2018			2017
(in thousands)
Interest and dividend income	$	266,554		$	258,225		$	236,078
Noninterest income	72,778			56,050			61,562
Less: Gain on sale of real estate	(10,762		)	—			—
*Revenues-Bank	328,570			314,275			297,640
Total interest expense	18,440			15,539			12,156
Provision for loan losses	23,480			14,745			10,901
Noninterest expense	185,378			177,413			175,867
Less: Retirement defined benefits credit (expense)—other than service costs	472			(1,657		)	(820		)
Add: Gain on sale of real estate	(10,762		)	—			—
*Expenses-Bank	217,008			206,040			198,104
*Operating income-Bank	111,562			108,235			99,536
Add back: Retirement defined benefits expense (credit)—other than service costs	(472		)	1,657			820
Income before income taxes	$	112,034		$	106,578		$	98,716

Balance Sheets Data

December 31				2019						2018
(in thousands)
Assets
Cash and due from banks				$	129,770					$	122,059
Interest-bearing deposits				48,628						4,225
Investment securities
Available-for-sale, at fair value				1,232,826						1,388,533
Held-to-maturity, at amortized cost (fair value of $143,467 and $142,057 at December 31, 2019 and 2018, respectively)				139,451						141,875
Stock in Federal Home Loan Bank, at cost				8,434						9,958
Loans held for investment				5,121,176						4,843,021
Allowance for loan losses				(53,355		)				(52,119		)
Net loans				5,067,821						4,790,902
Loans held for sale, at lower of cost or fair value				12,286						1,805
Other				511,611						486,347
Goodwill				82,190						82,190
Total assets				$	7,233,017					$	7,027,894
Liabilities and shareholder’s equity
Deposit liabilities–noninterest-bearing				$	1,909,682					$	1,800,727
Deposit liabilities–interest-bearing				4,362,220						4,358,125
Other borrowings				115,110						110,040
Other				146,954						124,613
Total liabilities				6,533,966						6,393,505
Commitments and contingencies
Common stock				1						1
Additional paid in capital				349,453						347,170
Retained earnings				358,259						325,286
Accumulated other comprehensive loss, net of tax benefits
Net unrealized gains (losses) on securities	$	2,481					$	(24,423	)
Retirement benefit plans	(11,143		)	(8,662		)	(13,645		)	(38,068		)
Total shareholder’s equity				699,051						634,389
Total liabilities and shareholder’s equity				$	7,233,017					$	7,027,894

December 31	2019		2018
(in thousands)
Other assets
Bank-owned life insurance	$	157,465	$	151,172
Premises and equipment, net	204,449		214,415
Accrued interest receivable	19,365		20,140
Mortgage servicing rights	9,101		8,062
Low-income housing investments	66,302		67,626
Real estate acquired in settlement of loans, net	—		406
Other	54,929		24,526
	$	511,611	$	486,347
Other liabilities
Accrued expenses	$	45,822	$	54,084
Federal and state income taxes payable	14,996		2,012
Cashier’s checks	23,647		26,906
Advance payments by borrowers	10,486		10,183
Other	52,003		31,428
	$	146,954	$	124,613

Bank-owned life insurance is life insurance purchased by ASB on the lives of certain key employees, with ASB as the beneficiary. The insurance is used to fund employee benefits through tax-free income from increases in the cash value of the policies and insurance proceeds paid to ASB upon an insured’s death.

The decrease in premises and equipment, net was due to the sale of two building facilities.

Investment securities. The major components of investment securities were as follows:

										Gross unrealized losses
			Gross unrealized gains		Gross unrealized losses			Estimated fair value		Less than 12 months						12 months or longer
(dollars in thousands)	Amortized cost									Number of issues	Fair value		Amount			Number of issues	Fair value		Amount
December 31, 2019
Available-for-sale
U.S. Treasury and federal agency obligations	$	117,255	$	652	$	(120	)	$	117,787	2	$	4,110	$	(11	)	3	$	27,637	$	(109	)
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies	1,024,892		6,000		(4,507		)	1,026,385		19	152,071		(819		)	75	318,020		(3,688		)
Corporate bonds	58,694		1,363		—			60,057		—	—		—			—	—		—
Mortgage revenue bonds	28,597		—		—			28,597		—	—		—			—	—		—
	$	1,229,438	$	8,015	$	(4,627	)	$	1,232,826	21	$	156,181	$	(830	)	78	$	345,657	$	(3,797	)
Held-to-maturity
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies	$	139,451	$	4,087	$	(71	)	$	143,467	1	$	12,986	$	(71	)	—	$	—	$	—
	$	139,451	$	4,087	$	(71	)	$	143,467	1	$	12,986	$	(71	)	—	$	—	$	—

										Gross unrealized losses
			Gross unrealized gains		Gross unrealized losses			Estimated fair value		Less than 12 months						12 months or longer
(dollars in thousands)	Amortized cost									Number of issues	Fair value		Amount			Number of issues	Fair value		Amount
December 31, 2018
Available-for-sale
U.S. Treasury and federal agency obligations	$	156,694	$	62	$	(2,407	)	$	154,349	5	$	25,882	$	(208	)	19	$	118,405	$	(2,199	)
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies	1,192,169		789		(31,542		)	1,161,416		22	129,011		(1,330		)	145	947,890		(30,212		)
Corporate bonds	49,398		103		(369		)	49,132		6	23,175		(369		)	—	—		—
Mortgage revenue bond	23,636		—		—			23,636		—	—		—			—	—		—
	$	1,421,897	$	954	$	(34,318	)	$	1,388,533	33	$	178,068	$	(1,907	)	164	$	1,066,295	$	(32,411	)
Held-to-maturity
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies	$	141,875	$	1,446	$	(1,264	)	$	142,057	3	$	29,814	$	(400	)	2	$	31,505	$	(864	)
	$	141,875	$	1,446	$	(1,264	)	$	142,057	3	$	29,814	$	(400	)	2	$	31,505	$	(864	)

ASB does not believe that the investment securities that were in an unrealized loss position as of December 31, 2019, represent an OTTI. Total gross unrealized losses were primarily attributable to change in market conditions. On a quarterly basis the investment securities are evaluated for changes in financial condition of the issuer. Based upon ASB’s evaluation, all securities held within the investment portfolio continue to be investment grade by one or more agencies. The contractual cash flows of the U.S. Treasury, federal agency obligations and agency mortgage-backed securities are backed by the full faith and credit guaranty of the United States government or an agency of the government. ASB does not intend to sell the securities before the recovery of its amortized cost basis and there have been no adverse changes in the timing of the contractual cash flows for the securities. ASB did not recognize OTTI for 2019, 2018 and 2017.

U.S. Treasury, federal agency obligations, corporate bonds, and mortgage revenue bonds have contractual terms to maturity. Mortgage-backed securities have contractual terms to maturity, but require periodic payments to reduce principal. In addition, expected maturities will differ from contractual maturities because borrowers have the right to prepay the underlying mortgages.

The contractual maturities of investment securities were as follows:

	Amortized		Fair
December 31, 2019	Cost		value
(in thousands)
Available-for-sale
Due in one year or less	$	60,200	$	60,249
Due after one year through five years	75,694		77,225
Due after five years through ten years	53,225		53,540
Due after ten years	15,427		15,427
	204,546		206,441
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies	1,024,892		1,026,385
Total available-for-sale securities	$	1,229,438	$	1,232,826
Held-to-maturity
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies	$	139,451	$	143,467
Total held-to-maturity securities	$	139,451	$	143,467

The proceeds, gross gains and losses from sales of available-for-sale securities were as follows:

Years ended December 31	2019		2018		2017
(in millions)
Proceeds	$	19.8	$	—	$	—
Gross gains	0.7		—		—
Gross losses	—		—		—

Interest income from taxable and non-taxable investment securities were as follows:

Years ended December 31	2019		2018		2017
(in thousands)
Taxable	$	31,847	$	37,153	$	28,398
Non-taxable	1,074		609		425
	$	32,921	$	37,762	$	28,823

ASB pledged securities with a market value of approximately $546 million as of December 31, 2019 and 2018, as collateral for public funds and other deposits, automated clearinghouse transactions with Bank of Hawaii, borrowing at the discount window of the Federal Reserve Bank of San Francisco, and deposits in ASB’s bankruptcy account with the Federal Reserve Bank of San Francisco. As of December 31, 2019 and 2018, securities with a carrying value of $130 million and $92 million, respectively, were pledged as collateral for securities sold under agreements to repurchase.

Stock in FHLB.  As of December 31, 2019 and 2018, ASB’s stock in FHLB was carried at cost ($8.4 million and $10.0 million, respectively) because it can only be redeemed at par and it is a required investment based on measurements of ASB’s capital, assets and borrowing levels.

Quarterly and as conditions warrant, ASB reviews its investment in the stock of the FHLB for impairment. ASB evaluated its investment in FHLB stock for OTTI as of December 31, 2019, consistent with its accounting policy. ASB did not recognize an OTTI loss for 2019, 2018 and 2017 based on its evaluation of the underlying investment.

Future deterioration in the FHLB’s financial position and/or negative developments in any of the factors considered in ASB’s impairment evaluation may result in future impairment losses.

Loans. The components of loans were summarized as follows:

December 31	2019			2018
(in thousands)
Real estate:
Residential 1-4 family	$	2,178,135		$	2,143,397
Commercial real estate	824,830			748,398
Home equity line of credit	1,092,125			978,237
Residential land	14,704			13,138
Commercial construction	70,605			92,264
Residential construction	11,670			14,307
Total real estate	4,192,069			3,989,741
Commercial	670,674			587,891
Consumer	257,921			266,002
Total loans	5,120,664			4,843,634
Less: Deferred fees and discounts	512			(613		)
Allowance for loan losses	(53,355		)	(52,119		)
Total loans, net	$	5,067,821		$	4,790,902

ASB’s policy is to require private mortgage insurance on all real estate loans when the loan-to-value ratio of the property exceeds 80% of the lower of the appraised value or purchase price at origination. For non-owner occupied residential property purchases, the loan-to-value ratio may not exceed 75% of the lower of the appraised value or purchase price at origination.

ASB services real estate loans for investors (principal balance of $1.3 billion, $1.2 billion and $1.2 billion as of December 31, 2019, 2018 and 2017, respectively), which are not included in the accompanying balance sheets data. ASB reports fees earned for servicing such loans as income when the related mortgage loan payments are collected and charges loan servicing cost to expense as incurred.

As of December 31, 2019 and 2018, ASB had pledged loans with an amortized cost of approximately $2.9 billion and $2.7 billion, respectively, as collateral to secure advances from the FHLB.

As of December 31, 2019 and 2018, the aggregate amount of loans to directors and executive officers of ASB and its affiliates and any related interests (as defined in Federal Reserve Board (FRB) Regulation O) of such individuals, was $24.1 million and $24.0 million, respectively. As of December 31, 2019 and 2018, $18.0 million and $18.3 million of the loan balances, respectively, were to related interests of individuals who are directors of ASB. All such loans were made at ASB’s normal credit terms.

Allowance for loan losses.  As discussed in Note 1, ASB must maintain an allowance for loan losses that is adequate to absorb estimated probable credit losses associated with its loan portfolio.

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			Consumer			Total
December 31, 2019
Allowance for loan losses:
Beginning balance	$	1,976		$	14,505		$	6,371		$	479		$	2,790		$	4		$	9,225		$	16,769		$	52,119
Charge-offs	(26		)	—			(144		)	(4		)	—			—			(6,811		)	(21,677		)	(28,662		)
Recoveries	854			—			17			229			—			—			2,351			2,967			6,418
Provision	(424		)	548			678			(255		)	(693		)	(1		)	5,480			18,147			23,480
Ending balance	$	2,380		$	15,053		$	6,922		$	449		$	2,097		$	3		$	10,245		$	16,206		$	53,355
Ending balance: individually evaluated for impairment	$	898		$	2		$	322		$	—		$	—		$	—		$	1,015		$	454		$	2,691
Ending balance: collectively evaluated for impairment	$	1,482		$	15,051		$	6,600		$	449		$	2,097		$	3		$	9,230		$	15,752		$	50,664
Financing Receivables:
Ending balance	$	2,178,135		$	824,830		$	1,092,125		$	14,704		$	70,605		$	11,670		$	670,674		$	257,921		$	5,120,664
Ending balance: individually evaluated for impairment	$	15,600		$	1,048		$	12,073		$	3,091		$	—		$	—		$	8,418		$	507		$	40,737
Ending balance: collectively evaluated for impairment	$	2,162,535		$	823,782		$	1,080,052		$	11,613		$	70,605		$	11,670		$	662,256		$	257,414		$	5,079,927
December 31, 2018
Allowance for loan losses:
Beginning balance	$	2,902		$	15,796		$	7,522		$	896		$	4,671		$	12		$	10,851		$	10,987		$	53,637
Charge-offs	(128		)	—			(353		)	(18		)	—			—			(2,722		)	(17,296		)	(20,517		)
Recoveries	74			—			257			179			—			—			2,136			1,608			4,254
Provision	(872		)	(1,291		)	(1,055		)	(578		)	(1,881		)	(8		)	(1,040		)	21,470			14,745
Ending balance	$	1,976		$	14,505		$	6,371		$	479		$	2,790		$	4		$	9,225		$	16,769		$	52,119
Ending balance: individually evaluated for impairment	$	876		$	7		$	701		$	6		$	—		$	—		$	628		$	4		$	2,222
Ending balance: collectively evaluated for impairment	$	1,100		$	14,498		$	5,670		$	473		$	2,790		$	4		$	8,597		$	16,765		$	49,897
Financing Receivables:
Ending balance	$	2,143,397		$	748,398		$	978,237		$	13,138		$	92,264		$	14,307		$	587,891		$	266,002		$	4,843,634
Ending balance: individually evaluated for impairment	$	16,494		$	915		$	14,800		$	2,059		$	—		$	—		$	5,340		$	89		$	39,697
Ending balance: collectively evaluated for impairment	$	2,126,903		$	747,483		$	963,437		$	11,079		$	92,264		$	14,307		$	582,551		$	265,913		$	4,803,937
December 31, 2017
Allowance for loan losses:
Beginning balance	$	2,873		$	16,004		$	5,039		$	1,738		$	6,449		$	12		$	16,618		$	6,800		$	55,533
Charge-offs	(826		)	—			(14		)	(210		)	—			—			(4,006		)	(11,757		)	(16,813		)
Recoveries	157			—			308			482			—			—			1,852			1,217			4,016
Provision	698			(208		)	2,189			(1,114		)	(1,778		)	—			(3,613		)	14,727			10,901
Ending balance	$	2,902		$	15,796		$	7,522		$	896		$	4,671		$	12		$	10,851		$	10,987		$	53,637
Ending balance: individually evaluated for impairment	$	1,248		$	65		$	647		$	47		$	—		$	—		$	694		$	29		$	2,730
Ending balance: collectively evaluated for impairment	$	1,654		$	15,731		$	6,875		$	849		$	4,671		$	12		$	10,157		$	10,958		$	50,907
Financing Receivables:
Ending balance	$	2,118,047		$	733,106		$	913,052		$	15,797		$	108,273		$	14,910		$	544,828		$	223,564		$	4,671,577
Ending balance: individually evaluated for impairment	$	18,284		$	1,016		$	8,188		$	1,265		$	—		$	—		$	4,574		$	66		$	33,393
Ending balance: collectively evaluated for impairment	$	2,099,763		$	732,090		$	904,864		$	14,532		$	108,273		$	14,910		$	540,254		$	223,498		$	4,638,184

Credit quality.  ASB performs an internal loan review and grading on an ongoing basis. The review provides management with periodic information as to the quality of the loan portfolio and effectiveness of its lending policies and procedures. The objectives of the loan review and grading procedures are to identify, in a timely manner, existing or emerging credit trends so

that appropriate steps can be initiated to manage risk and avoid or minimize future losses. Loans subject to grading include commercial, commercial real estate and commercial construction loans.

Each commercial and commercial real estate loan is assigned an Asset Quality Rating (AQR) reflecting the likelihood of repayment or orderly liquidation of that loan transaction pursuant to regulatory credit classifications:  Pass, Special Mention, Substandard, Doubtful, and Loss. The AQR is a function of the probability of default model rating, the loss given default, and possible non-model factors which impact the ultimate collectability of the loan such as character of the business owner/guarantor, interim period performance, litigation, tax liens and major changes in business and economic conditions. Pass exposures generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral. Special Mention loans have potential weaknesses that, if left uncorrected, could jeopardize the liquidation of the debt. Substandard loans have well-defined weaknesses that jeopardize the liquidation of the debt and are characterized by the distinct possibility that ASB may sustain some loss. An asset classified Doubtful has the weaknesses of those classified Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. An asset classified Loss is considered uncollectible and has such little value that its continuance as a bankable asset is not warranted.

The credit risk profile by internally assigned grade for loans was as follows:

December 31	2019								2018
(in thousands)	Commercial real estate		Commercial construction		Commercial		Total		Commercial real estate		Commercial construction		Commercial		Total
Grade:
Pass	$	756,747	$	68,316	$	621,657	$	1,446,720	$	658,288	$	89,974	$	547,640	$	1,295,902
Special mention	4,451		—		29,921		34,372		32,871		—		11,598		44,469
Substandard	63,632		2,289		19,096		85,017		57,239		2,290		28,653		88,182
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total	$	824,830	$	70,605	$	670,674	$	1,566,109	$	748,398	$	92,264	$	587,891	$	1,428,553

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
December 31, 2019
Real estate:
Residential 1-4 family	$	2,588	$	290	$	1,808	$	4,686	$	2,173,449	$	2,178,135	$	—
Commercial real estate	—		—		—		—		824,830		824,830		—
Home equity line of credit	813		—		2,117		2,930		1,089,195		1,092,125		—
Residential land	—		—		25		25		14,679		14,704		—
Commercial construction	—		—		—		—		70,605		70,605		—
Residential construction	—		—		—		—		11,670		11,670		—
Commercial	1,077		311		172		1,560		669,114		670,674		—
Consumer	4,386		3,257		2,907		10,550		247,371		257,921		—
Total loans	$	8,864	$	3,858	$	7,029	$	19,751	$	5,100,913	$	5,120,664	$	—
December 31, 2018
Real estate:
Residential 1-4 family	$	3,757	$	2,773	$	2,339	$	8,869	$	2,134,528	$	2,143,397	$	—
Commercial real estate	—		—		—		—		748,398		748,398		—
Home equity line of credit	1,139		681		2,720		4,540		973,697		978,237		—
Residential land	9		—		319		328		12,810		13,138		—
Commercial construction	—		—		—		—		92,264		92,264		—
Residential construction	—		—		—		—		14,307		14,307		—
Commercial	315		281		548		1,144		586,747		587,891		—
Consumer	5,220		3,166		2,702		11,088		254,914		266,002		—
Total loans	$	10,440	$	6,901	$	8,628	$	25,969	$	4,817,665	$	4,843,634	$	—

The credit risk profile based on nonaccrual loans, accruing loans 90 days or more past due, and TDR loans was as follows:

	Nonaccrual loans				Accruing loans 90 days or more past due				Troubled debt restructured loans not included in nonaccrual loans
December 31	2019		2018		2019		2018		2019		2018
(in thousands)
Real estate:
Residential 1-4 family	$	11,395	$	12,037	$	—	$	—	$	9,869	$	10,194
Commercial real estate	195		—		—		—		853		915
Home equity line of credit	6,638		6,348		—		—		10,376		11,597
Residential land	448		436		—		—		2,644		1,622
Commercial construction	—		—		—		—		—		—
Residential construction	—		—		—		—		—		—
Commercial	5,947		4,278		—		—		2,614		1,527
Consumer	5,113		4,196		—		—		57		62
Total	$	29,736	$	27,295	$	—	$	—	$	26,413	$	25,917

The total carrying amount and the total unpaid principal balance of impaired loans were as follows:

December 31	2019						2018
(in thousands)	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
With no related allowance recorded
Real estate:
Residential 1-4 family	$	6,817	$	7,207	$	—	$	7,822	$	8,333	$	—
Commercial real estate	195		200		—		—		—		—
Home equity line of credit	1,984		2,135		—		2,743		3,004		—
Residential land	3,091		3,294		—		2,030		2,228		—
Commercial construction	—		—		—		—		—		—
Residential construction	—		—		—		—		—		—
Commercial	1,948		2,285		—		3,722		4,775		—
Consumer	2		2		—		32		32		—
	14,037		15,123		—		16,349		18,372		—
With an allowance recorded
Real estate:
Residential 1-4 family	8,783		8,835		898		8,672		8,875		876
Commercial real estate	853		853		2		915		915		7
Home equity line of credit	10,089		10,099		322		12,057		12,086		701
Residential land	—		—		—		29		29		6
Commercial construction	—		—		—		—		—		—
Residential construction	—		—		—		—		—		—
Commercial	6,470		6,470		1,015		1,618		1,618		628
Consumer	505		505		454		57		57		4
	26,700		26,762		2,691		23,348		23,580		2,222
Total
Real estate:
Residential 1-4 family	15,600		16,042		898		16,494		17,208		876
Commercial real estate	1,048		1,053		2		915		915		7
Home equity line of credit	12,073		12,234		322		14,800		15,090		701
Residential land	3,091		3,294		—		2,059		2,257		6
Commercial construction	—		—		—		—		—		—
Residential construction	—		—		—		—		—		—
Commercial	8,418		8,755		1,015		5,340		6,393		628
Consumer	507		507		454		89		89		4
	$	40,737	$	41,885	$	2,691	$	39,697	$	41,952	$	2,222

ASB’s average recorded investment of, and interest income recognized from, impaired loans were as follows:

December 31	2019				2018				2017
(in thousands)	Average recorded investment		Interest income recognized*		Average recorded investment		Interest income recognized*		Average recorded investment		Interest income recognized*
With no related allowance recorded
Real estate:
Residential 1-4 family	$	8,169	$	907	$	8,595	$	445	$	9,440	$	316
Commercial real estate	16		—		—		—		91		11
Home equity line of credit	2,020		84		2,206		75		1,976		101
Residential land	2,662		129		1,532		40		1,094		117
Commercial construction	—		—		—		—		—		—
Residential construction	—		—		—		—		—		—
Commercial	4,534		276		3,275		28		2,776		54
Consumer	21		4		22		—		1		—
	17,422		1,400		15,630		588		15,378		599
With an allowance recorded
Real estate:
Residential 1-4 family	8,390		359		8,878		363		9,818		493
Commercial real estate	886		37		982		42		1,241		54
Home equity line of credit	11,319		567		10,617		440		5,045		251
Residential land	27		—		37		3		1,308		97
Commercial construction	—		—		—		—		—		—
Residential construction	—		—		—		—		—		—
Commercial	6,990		132		1,789		122		3,691		723
Consumer	360		24		57		4		57		3
	27,972		1,119		22,360		974		21,160		1,621
Total
Real estate:
Residential 1-4 family	16,559		1,266		17,473		808		19,258		809
Commercial real estate	902		37		982		42		1,332		65
Home equity line of credit	13,339		651		12,823		515		7,021		352
Residential land	2,689		129		1,569		43		2,402		214
Commercial construction	—		—		—		—		—		—
Residential construction	—		—		—		—		—		—
Commercial	11,524		408		5,064		150		6,467		777
Consumer	381		28		79		4		58		3
	$	45,394	$	2,519	$	37,990	$	1,562	$	36,538	$	2,220

* Since loan was classified as impaired.

Troubled debt restructurings.  A loan modification is deemed to be a TDR when the borrower is determined to be experiencing financial difficulties and ASB grants a concession it would not otherwise consider. When a borrower experiencing financial difficulty fails to make a required payment on a loan or is in imminent default, ASB takes a number of steps to improve the collectability of the loan and maximize the likelihood of full repayment. At times, ASB may modify or restructure a loan to help a distressed borrower improve its financial position to eventually be able to fully repay the loan, provided the borrower has demonstrated both the willingness and the ability to fulfill the modified terms. TDR loans are considered an alternative to foreclosure or liquidation with the goal of minimizing losses to ASB and maximizing recovery.

ASB may consider various types of concessions in granting a TDR including maturity date extensions, extended amortization of principal, temporary deferral of principal payments, and temporary interest rate reductions. ASB rarely grants principal forgiveness in its TDR modifications. Residential loan modifications generally involve interest rate reduction, extending the amortization period, or capitalizing certain delinquent amounts owed not to exceed the original loan balance. Land loans at origination are typically structured as a three-year term, interest-only monthly payment with a balloon payment due at maturity. Land loan TDR modifications typically involve extending the maturity date up to five five years and converting the payments from interest-only to principal and interest monthly, at the same or higher interest rate. Commercial loan modifications generally involve extensions of maturity dates, extending the amortization period, and temporary deferral

or reduction of principal payments. ASB generally does not reduce the interest rate on commercial loan TDR modifications. Occasionally, additional collateral and/or guaranties are obtained.

All TDR loans are classified as impaired and are segregated and reviewed separately when assessing the adequacy of the allowance for loan losses based on the appropriate method of measuring impairment:  (1) present value of expected future cash flows discounted at the loan’s effective original contractual rate, (2) fair value of collateral less cost to sell or (3) observable market price. The financial impact of the calculated impairment amount is an increase to the allowance associated with the modified loan. When available information confirms that specific loans or portions thereof are uncollectible (confirmed losses), these amounts are charged off against the allowance for loan losses.

Loan modifications that occurred during 2019, 2018, and 2017 were as follows:

Years ended	December 31, 2019					December 31, 2018
(dollars in thousands)	Number of contracts	Outstanding  recorded  investment  (as of period end)1		Related allowance (as of period end)		Number of contracts	Outstanding  recorded  investment  (as of period end)1		Related allowance (as of period end)
Real estate:
Residential 1-4 family	11	$	1,770	$	190	3	$	566	$	26
Commercial real estate	—	—		—		—	—		—
Home equity line of credit	3	442		73		53	6,659		578
Residential land	3	1,086		—		2	1,338		—
Commercial construction	—	—		—		—	—		—
Residential construction	—	—		—		—	—		—
Commercial	8	5,523		417		12	2,165		211
Consumer	—	—		—		—	—		—
	25	$	8,821	$	680	70	$	10,728	$	815
Year ended	December 31, 2017
(dollars in thousands)	Number of contracts	Outstanding  recorded  investment  (as of period end)1		Related allowance (as of period end)
Real estate:
Residential 1-4 family	3	$	469	$	65
Commercial real estate	—	—		—
Home equity line of credit	44	2,791		545
Residential land	1	92		—
Commercial construction	—	—		—
Residential construction	—	—		—
Commercial	8	525		250
Consumer	1	58		29
	57	$	3,935	$	889

¹ The period end balances reflect all paydowns and charge-offs since the modification period. TDRs fully paid off, charged-off, or foreclosed upon by period end are not included.

Loans modified in TDRs that experienced a payment default of 90 days or more in 2019, 2018, and 2017 and for which the payment default occurred within one year of the modification, were as follows:

Years ended December 31	2019			2018			2017
(dollars in thousands)	Number of  contracts	Recorded investment		Number of  contracts	Recorded investment		Number of contracts	Recorded investment
Troubled debt restructurings that subsequently defaulted
Real estate:
Residential 1-4 family	—	$	—	—	$	—	1	$	222
Commercial real estate	—	—		—	—		—	—
Home equity line of credit	—	—		1	81		—	—
Residential land	—	—		—	—		—	—
Commercial construction	—	—		—	—		—	—
Residential construction	—	—		—	—		—	—
Commercial	—	—		1	246		—	—
Consumer	—	—		—	—		—	—
	—	$	—	2	$	327	1	$	222

If loans modified in a TDR subsequently default, ASB evaluates the loan for further impairment. Based on its evaluation, adjustments may be made in the allocation of the allowance or partial charge-offs may be taken to further write-down the carrying value of the loan. Commitments to lend additional funds to borrowers whose loan terms have been modified in a TDR were nil at December 31, 2019 and 2018.

The Company had $3.5 million and $4.2 million of consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure at December 31, 2019 and 2018, respectively.

Mortgage servicing rights (MSRs). In its mortgage banking business, ASB sells residential mortgage loans to government-sponsored entities and other parties, who may issue securities backed by pools of such loans. ASB retains no beneficial interests in these loans other than the servicing rights of certain loans sold.

ASB received $277.1 million, $112.2 million and $128.0 million of proceeds from the sale of residential mortgages in 2019, 2018, and 2017, respectively, and recognized gains on such sales of $4.9 million, $1.5 million, and $2.2 million in 2019, 2018, and 2017, respectively. Repurchased mortgage loans were nil for 2019, 2018 and 2017. The repurchase reserve was $0.1 million as of December 31, 2019, 2018 and 2017.

Mortgage servicing fees, a component of other income, net, were $3.0 million for the years ended December 31, 2019, 2018, and 2017.

Changes in the carrying value of MSRs were as follows:

(in thousands)	Gross carrying amount1		Accumulated amortization1			Valuation allowance		Net carrying amount
December 31, 2019	$	21,543	$	(12,442	)	$	—	$	9,101
December 31, 2018	$	18,556	$	(10,494	)	$	—	$	8,062

¹ Reflects impact of loans paid in full.

Changes related to MSRs were as follows:

(in thousands)	2019			2018			2017
Mortgage servicing rights
Balance, January 1	$	8,062		$	8,639		$	9,373
Amount capitalized	2,987			1,045			1,239
Amortization	(1,948		)	(1,622		)	(1,973		)
Sale of mortgage servicing rights	—			—			—
Other-than-temporary impairment	—			—			—
Carrying amount before valuation allowance, December 31	9,101			8,062			8,639
Valuation allowance for mortgage servicing rights
Balance, January 1	—			—			—
Provision (recovery)	—			—			—
Other-than-temporary impairment	—			—			—
Balance, December 31	—			—			—
Net carrying value of mortgage servicing rights	$	9,101		$	8,062		$	8,639

The estimated aggregate amortization expenses of MSRs for 2020, 2021, 2022, 2023 and 2024 are $1.5 million, $1.2 million, $1.1 million, $0.9 million and $0.8 million, respectively.

ASB capitalizes MSRs acquired upon the sale of mortgage loans with servicing rights retained. On a monthly basis, ASB compares the net carrying value of the MSRs to its fair value to determine if there are any changes to the valuation allowance and/or other-than-temporary impairment for the MSRs.

ASB uses a present value cash flow model to estimate the fair value of MSRs. Impairment is recognized through a valuation allowance for each stratum when the carrying amount exceeds fair value, with any associated provision recorded as a component of loan servicing fees included in “Revenues - bank” in the consolidated statements of income. A direct write-down is recorded when the recoverability of the valuation allowance is deemed to be unrecoverable.

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

December 31	2019			2018
(dollars in thousands)
Unpaid principal balance	$	1,276,437		$	1,188,514
Weighted average note rate	3.96		%	3.98		%
Weighted average discount rate	9.3		%	10.0		%
Weighted average prepayment speed	11.4		%	6.5		%

The sensitivity analysis of fair value of MSRs to hypothetical adverse changes of 25 and 50 basis points in certain key assumptions was as follows:

December 31	2019			2018
(in thousands)
Prepayment rate:
25 basis points adverse rate change	$	(950	)	$	(250	)
50 basis points adverse rate change	(1,947		)	(566		)
Discount rate:
25 basis points adverse rate change	(102		)	(139		)
50 basis points adverse rate change	(202		)	(275		)

The effect of a variation in certain assumptions on fair value is calculated without changing any other assumptions. This analysis typically cannot be extrapolated because the relationship of a change in one key assumption to the changes in the fair value of MSRs typically is not linear.

Deposit liabilities. The summarized components of deposit liabilities were as follows:

December 31	2019				2018
(dollars in thousands)	Weighted-average stated rate		Amount		Weighted-average stated rate		Amount
Savings	0.09	%	$	2,379,522	0.07	%	$	2,322,552
Checking
Interest-bearing	0.09		1,062,122		0.09		1,055,019
Noninterest-bearing	—		977,459		—		932,608
Commercial checking	—		932,223		—		868,119
Money market	0.69		150,751		0.63		152,713
Time certificates	1.42		769,825		1.61		827,841
	0.24	%	$	6,271,902	0.27	%	$	6,158,852

As of December 31, 2019 and 2018, time certificates of $100,000 or more totaled $456.5 million and $500.2 million, respectively.

The approximate scheduled maturities of time certificates outstanding at December 31, 2019 were as follows:

(in thousands)
2020	$	503,214
2021	112,632
2022	87,132
2023	29,134
2024	35,253
Thereafter	2,460
	$	769,825

Overdrawn deposit accounts are classified as loans and totaled $2.4 million and $2.1 million at December 31, 2019 and 2018, respectively.

Interest expense on deposit liabilities by type of deposit was as follows:

Years ended December 31	2019		2018		2017
(in thousands)
Time certificates	$	12,675	$	11,044	$	7,687
Savings	1,904		1,639		1,567
Money market	953		602		168
Interest-bearing checking	1,298		706		238
	$	16,830	$	13,991	$	9,660

Other borrowings.

Securities sold under agreements to repurchase.  Securities sold under agreements to repurchase are accounted for as financing transactions and the obligations to repurchase these securities are recorded as liabilities in the consolidated balance sheets. ASB pledges investment securities as collateral for securities sold under agreements to repurchase. All such agreements are subject to master netting arrangements, which provide for conditional right of set-off in case of default by either party; however, ASB presents securities sold under agreements to repurchase on a gross basis in the balance sheet. 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 Sheets		Net amount of  liabilities presented in the Balance Sheets
Repurchase agreements
December 31, 2019	$	115	$	—	$	115
December 31, 2018	65		—		65

	Gross amount not offset in the Balance Sheets
(in millions)	Net amount of  liabilities presented in the Balance Sheets		Financial instruments		Cash collateral pledged
Commercial account holders
December 31, 2019	$	115	$	130	$	—
December 31, 2018	65		92		—

The securities underlying the agreements to repurchase are book-entry securities and were delivered by appropriate entry into the counterparties’ accounts or into segregated tri-party custodial accounts at the FHLB. The securities underlying the agreements to repurchase continue to be reflected in ASB’s asset accounts. The counterparties or tri-parties may determine that additional collateral is required based on movements in the fair value of the collateral. Typically, a five percent discount is taken from the fair value of the investment securities to determine the value of the collateral pledged for the repurchase agreements.

Information concerning securities sold under agreements to repurchase, which provided for the repurchase of identical securities, was as follows:

(dollars in millions)	2019			2018			2017
Amount outstanding as of December 31	$	115		$	65		$	141
Average amount outstanding during the year	$	80		$	99		$	98
Maximum amount outstanding as of any month-end	$	115		$	152		$	141
Weighted-average interest rate as of December 31	0.98		%	0.75		%	0.65		%
Weighted-average interest rate during the year	0.96		%	0.71		%	0.26		%
Weighted-average remaining days to maturity as of December 31	1			1			1

Securities sold under agreements to repurchase were summarized as follows:

December 31	2019						2018
Maturity	Repurchase liability		Weighted-average interest rate		Collateralized by  mortgage-backed securities and federal agency obligations at fair value plus  accrued interest		Repurchase liability		Weighted-average interest rate		Collateralized by mortgage-backed securities and federal agency obligations at fair value plus accrued interest
(dollars in thousands)
Overnight	$	115,110	0.98	%	$	129,527	$	65,040	0.75	%	$	92,290
1 to 29 days	—		—		—		—		—		—
30 to 90 days	—		—		—		—		—		—
Over 90 days	—		—		—		—		—		—
	$	115,110	0.98	%	$	129,527	$	65,040	0.75	%	$	92,290

Advances from Federal Home Loan Bank. FHLB advances were nil and $45 million as of December 31, 2019 and 2018.

ASB and the FHLB are parties to an Advances, Pledge and Security Agreement (Advances Agreement), which applies to currently outstanding and future advances, and governs the terms and conditions under which ASB borrows and the FHLB makes loans or advances from time to time. Under the Advances Agreement, ASB agrees to abide by the FHLB’s credit policies, and makes certain warranties and representations to the FHLB. Upon the occurrence of and during the continuation of an “Event of Default” (which term includes any event of nonpayment of interest or principal of any advance when due or failure to perform any promise or obligation under the Advances Agreement or other credit arrangements between the parties), the FHLB may, at its option, declare all indebtedness and accrued interest thereon, including any prepayment fees or charges, to be immediately due and payable. Advances from the FHLB are collateralized by loans and stock in the FHLB. As of December 31, 2019 and 2018, ASB’s available FHLB borrowing capacity was $2.3 billion, and $2.0 billion, respectively. In February 2020, the FHLB of Des Moines notified ASB that certain assets would no longer qualify as collateral for FHLB advances, reducing ASB's total FHLB borrowing capacity to approximately $1.5 billion. The notice included high-quality home equity lines of credit and was technical in nature and unrelated to the credit quality of the home equity loans, of which approximately 54% are in first lien position. ASB is working with the FHLB to understand the nature of the disqualification of those assets as collateral and re-establishing eligibility.

ASB is required to obtain and hold a specific number of shares of capital stock of the FHLB. ASB was in compliance with all Advances Agreement requirements as of December 31, 2019 and 2018.

Common stock equity.  ASB is regulated and supervised by the OCC. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on ASB’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, ASB must meet specific capital guidelines that involve quantitative measures of ASB’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

The prompt corrective action provisions impose certain restrictions on institutions that are undercapitalized. The restrictions imposed become increasingly more severe as an institution’s capital category declines from “undercapitalized” to “critically undercapitalized.” The regulators have substantial discretion in the corrective actions that might direct and could include restrictions on dividends and other distributions that ASB may make to ASB Hawaii and the requirement that ASB develop and implement a plan to restore its capital. In 1988, HEI agreed with the OTS predecessor regulatory agency at the time, to contribute additional capital to ASB up to a maximum aggregate amount of approximately $65.1 million (Capital Maintenance Agreement). As of December 31, 2019, as a result of capital contributions in prior years, HEI’s maximum obligation to contribute additional capital under the Capital Maintenance Agreement has been reduced to approximately $28.3 million.

To be categorized as “well capitalized,” ASB must maintain minimum total capital, Tier 1 capital, and Tier 1 leverage ratios as set forth in the table below. As of December 31, 2019, and 2018 ASB was in compliance with the minimum capital requirements under OCC regulations, and was categorized as “well capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events that management believes have changed the institution’s category under the capital guidelines.

The tables below set forth actual and minimum required capital amounts and ratios:

	Actual			Minimum required			Required to be well capitalized
(dollars in thousands)	Capital	Ratio		Capital	Ratio		Capital	Ratio
December 31, 2019
Tier 1 leverage	641,547	9.06	%	283,122	4.00	%	353,903	5.00	%
Common equity tier 1	641,547	13.18	%	219,071	4.50	%	316,435	6.50	%
Tier 1 capital	641,547	13.18	%	292,094	6.00	%	389,459	8.00	%
Total capital	696,643	14.31	%	389,459	8.00	%	486,823	10.00	%
December 31, 2018
Tier 1 leverage	606,291	8.70	%	278,811	4.00	%	348,514	5.00	%
Common equity tier 1	606,291	12.80	%	213,190	4.50	%	307,941	6.50	%
Tier 1 capital	606,291	12.80	%	284,253	6.00	%	379,004	8.00	%
Total capital	660,151	13.93	%	379,004	8.00	%	473,755	10.00	%

In 2019, ASB paid cash dividends of $56.0 million to HEI, compared to cash dividends of $50.0 million in 2018. The FRB and OCC approved the dividends.

Related-party transactions. HEI charged ASB $2.3 million, $2.2 million and $2.1 million for general management and administrative services in 2019, 2018 and 2017, respectively. The amounts charged by HEI for services performed by HEI employees to its subsidiaries are allocated primarily on the basis of time expended in providing such services. All amounts charged to ASB were settled as a capital contribution by HEI to ASB.

Derivative financial instruments. ASB enters into interest rate lock commitments (IRLCs) with borrowers, and forward commitments to sell loans or to-be-announced mortgage-backed securities to investors to hedge against the inherent interest rate and pricing risks associated with selling loans.

ASB enters into IRLCs for residential mortgage loans, which commit ASB to lend funds to a potential borrower at a specific interest rate and within a specified period of time. IRLCs that relate to the origination of mortgage loans that will be held for sale are considered derivative financial instruments under applicable accounting guidance. Outstanding IRLCs expose ASB to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The IRLCs are free-standing derivatives which are carried at fair value with changes recorded in mortgage banking income.

ASB enters into forward commitments to hedge the interest rate risk for rate locked mortgage applications in process and closed mortgage loans held for sale. These commitments are primarily forward sales of to-be-announced mortgage backed securities. Generally, when mortgage loans are closed, the forward commitment is liquidated and replaced with a mandatory delivery forward sale of the mortgage to a secondary market investor. In some cases, a best-efforts forward sale agreement is utilized as the forward commitment. These commitments are free-standing derivatives which are carried at fair value with changes recorded in mortgage banking income.

Changes in the fair value of IRLCs and forward commitments subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time.

The notional amount and fair value of ASB’s derivative financial instruments were as follows:

December 31	2019					2018
(in thousands)	Notional amount		Fair value			Notional amount		Fair value
Interest rate lock commitments	$	23,171	$	297		$	10,180	$	91
Forward commitments	29,383		(42		)	10,132		(43		)

ASB’s derivative financial instruments, their fair values, and balance sheet location were as follows:

Derivative Financial Instruments Not Designated
as Hedging Instruments 1
December 31	2019				2018
(in thousands)	Asset derivatives		Liability derivatives		Asset derivatives		Liability derivatives
Interest rate lock commitments	$	297	$	—	$	91	$	—
Forward commitments	3		45		—		43
	$	300	$	45	$	91	$	43

¹ Asset derivatives are included in other assets and liability derivatives are included in other liabilities in the balance sheets.

The following table presents ASB’s derivative financial instruments and the amount and location of the net gains or losses recognized in ASB’s statements of income:

Derivative Financial Instruments Not Designated	Location of net gains
as Hedging Instruments	(losses) recognized in	Years ended December 31
(in thousands)	the Statements of Income	2019		2018			2017
Interest rate lock commitments	Mortgage banking income	$	206	$	(40	)	$	(290	)
Forward commitments	Mortgage banking income	1		(19		)	153
		$	207	$	(59	)	$	(137	)

Commitments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the commitments. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since certain commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. ASB minimizes its exposure to loss under these commitments by requiring that customers meet certain conditions prior to disbursing funds. The amount of collateral, if any, is based on a credit evaluation of the borrower and may include residential real estate, accounts receivable, inventory and property, plant and equipment.

Letters of credit are conditional commitments issued by ASB to guarantee payment and performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. ASB holds collateral supporting those commitments for which collateral is deemed necessary.

The following is a summary of outstanding off-balance sheet arrangements:

December 31	2019		2018
(in thousands)
Unfunded commitments to extend credit:
Home equity line of credit	$	1,290,854	$	1,242,804
Commercial and commercial real estate	484,806		515,058
Consumer	70,088		70,292
Residential 1-4 family	21,131		17,552
Commercial and financial standby letters of credit	11,912		13,340
Total	$	1,878,791	$	1,859,046

Contingency.  In October 2007, ASB, as a member financial institution of Visa U.S.A. Inc., received restricted shares of Visa, Inc. (Visa) as a result of a restructuring of Visa U.S.A. Inc. in preparation for an initial public offering by Visa. As a part of the restructuring, ASB entered into a judgment and loss sharing agreement with Visa in order to apportion financial responsibilities arising from any potential adverse judgment or negotiated settlements related to indemnified litigation involving Visa. In November 2012, a federal judge granted preliminary approval to a proposed settlement between merchants and Visa over credit card fees and in December 2013, a federal judge granted final approval to the settlement. Some merchants and trade organizations filed a notice of appeal shortly after the approval was issued. As of December 31, 2019, ASB had accrued a reserve of $1.1 million related to the agreement. Because the extent of ASB’s obligations under this agreement depends entirely upon the occurrence of future events, ASB’s maximum potential future liability under this agreement is not determinable.

Federal Deposit Insurance Corporation assessment. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) raised the minimum reserve ratio for the Deposit Insurance Fund to 1.35 percent but required the Federal Deposit Insurance Corporation (FDIC) to offset the effect of the increase in the minimum reserve ratio on small institutions (generally insured depository institutions with total consolidated assets of $10 billion or less) when setting assessments. In September 2018, the reserve ratio reached 1.36 percent and the FDIC awarded the small institutions an assessment credit, which was applied to the 2019 second and third quarter assessments for these banks. For the years ended December 31, 2019, 2018 and 2017 ASB’s FDIC insurance expenses were $1.2 million, $2.5 million and $2.6 million, respectively.