Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2019

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.



			Estimated fair value
(in thousands)	Carrying or notional amount		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
December 31, 2019
Financial assets
HEI consolidated
Available-for-sale investment securities	$	1,232,826	$	—	$	1,204,229	$	28,597	$	1,232,826
Held-to-maturity investment securities	139,451		—		143,467		—		143,467
Stock in Federal Home Loan Bank	8,434		—		8,434		—		8,434
Loans, net	5,080,107		—		12,295		5,145,242		5,157,537
Mortgage servicing rights	9,101		—		—		12,379		12,379
Derivative assets	25,179		—		300		—		300
Financial liabilities
HEI consolidated
Deposit liabilities	769,825		—		765,976		—		765,976
Short-term borrowings—other than bank	185,710		—		185,710		—		185,710
Other bank borrowings	115,110		—		115,107		—		115,107
Long-term debt, net—other than bank	1,964,365				2,156,927				2,156,927
Derivative liabilities	51,375		33		2,185		—		2,218
Hawaiian Electric consolidated
Short-term borrowings	88,987		—		88,987		—		88,987
Long-term debt, net	1,497,667		—		1,670,189		—		1,670,189
December 31, 2018
Financial assets
HEI consolidated
Available-for-sale investment securities	$	1,388,533	$	—	$	1,364,897	$	23,636	$	1,388,533
Held-to-maturity investment securities	141,875		—		142,057		—		142,057
Stock in Federal Home Loan Bank	9,958		—		9,958		—		9,958
Loans, net	4,792,707		—		1,809		4,800,244		4,802,053
Mortgage servicing rights	8,062		—		—		13,618		13,618
Derivative assets	10,180		—		91		—		91
Financial liabilities
HEI consolidated
Deposit liabilities	827,841		—		817,667		—		817,667
Short-term borrowings—other than bank	73,992		—		73,992		—		73,992
Other bank borrowings	110,040		—		110,037		—		110,037
Long-term debt, net—other than bank	1,879,641		—		1,904,261		—		1,904,261
Derivative liabilities	34,132		34		596		—		630
Hawaiian Electric consolidated
Short-term borrowings	25,000		—		25,000		—		25,000
Long-term debt, net	1,418,802		—		1,443,968		—		1,443,968

Schedule of assets and liabilities measured at fair value on a recurring basis

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



December 31	2019						2018
	Fair value measurements using						Fair value measurements using
(in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Available-for-sale investment securities (bank segment)
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies	$	—	$	1,026,385	$	—	$	—	$	1,161,416	$	—
U.S. Treasury and federal agency obligations	—		117,787		—		—		154,349		—
Corporate bonds	—		60,057		—		—		49,132		—
Mortgage revenue bonds	—		—		28,597		—		—		23,636
	$	—	$	1,204,229	$	28,597	$	—	$	1,364,897	$	23,636
Derivative assets
Interest rate lock commitments (bank segment)¹	$	—	$	297	$	—	$	—	$	91	$	—
Forward commitments (bank segment)¹	—		3		—		—		—		—
	$	—	$	300	$	—	$	—	$	91	$	—
Derivative liabilities
Interest rate lock commitments (bank segment)¹	$	—	$	—	$	—	$	—	$	—	$	—
Forward commitments (bank segment)¹	33		12		—		34		9		—
Interest rate swap (Other segment)²	—		2,173		—		—		587		—
	$	33	$	2,185	$	—	$	34	$	596	$	—

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

Derivatives are included in Other liabilities in the balance sheets.

Schedule of 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:



(in thousands)	2019		2018
Mortgage revenue bonds
Balance, January 1	$	23,636	$	15,427
Principal payments received	—		—
Purchases	4,961		8,209
Unrealized gain (loss) included in other comprehensive income	—		—
Balance, December 31	$	28,597	$	23,636

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 using
(in thousands)	Balance		Level 1		Level 2		Level 3
December 31, 2019
Loans	$	25	$	—	$	—	$	25
December 31, 2018
Loans	77		—		—		77
Real estate acquired in settlement of loans	186		—		—		186

Schedule of significant unobservable inputs used in the fair value measurement

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 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)
(dollars in thousands)	Fair value		Valuation technique	Significant unobservable input	Range	Weighted Average
December 31, 2019
Residential land	$	25	Fair value of property or collateral	Appraised value less 7% selling cost	N/A (2)	N/A (2)
Total loans	$	25
December 31, 2018
Home equity lines of credit	77		Fair value of property or collateral	Appraised value less 7% selling cost	N/A (2)	N/A (2)
Total loans	$	77
Real estate acquired in settlement of loans	$	186	Fair value of property or collateral	Appraised value less 7% selling cost	N/A (2)	N/A (2)


(1)	Represent percent of outstanding principal balance.

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