Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2021

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.


			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, 2021
Financial assets
HEI consolidated

Available-for-sale investment securities	$	2,574,618	$	—	$	2,559,191	$	15,427	$	2,574,618
Held-to-maturity investment securities	522,270		—		510,474		—		510,474

Loans, net	5,150,388		—		10,403		5,218,121		5,228,524
Mortgage servicing rights	9,950		—		—		14,480		14,480

Derivative assets	57,377		—		909		—		909


Financial liabilities
HEI consolidated
Deposit liabilities	423,976		—		442,361		—		442,361
Short-term borrowings—other than bank	53,998		—		53,998		—		53,998
Other bank borrowings	88,305		—		88,304		—		88,304
Long-term debt, net—other than bank	2,321,937		—		2,624,130		—		2,624,130
Derivative liabilities	57,000		11		5,271		—		5,282
Hawaiian Electric consolidated

Long-term debt, net	1,676,402		—		1,955,710		—		1,955,710

December 31, 2020
Financial assets
HEI consolidated

Available-for-sale investment securities	$	1,970,417	$	—	$	1,943,232	$	27,185	$	1,970,417
Held-to-maturity investment securities	226,947		—		229,963		—		229,963

Loans, net	5,260,917		—		28,354		5,410,976		5,439,330
Mortgage servicing rights	10,020		—		—		10,705		10,705

Derivative assets	120,980		—		4,536		—		4,536


Financial liabilities
HEI consolidated
Deposit liabilities	548,830		—		552,800		—		552,800
Short-term borrowings—other than bank	129,379		—		129,379		—		129,379
Other bank borrowings	89,670		—		89,669		—		89,669
Long-term debt, net—other than bank	2,119,129		—		2,487,790		—		2,487,790
Derivative liabilities	137,500		500		4,530		—		5,030
Hawaiian Electric consolidated
Short-term borrowings	49,979		—		49,979		—		49,979
Long-term debt, net	1,561,302		—		1,890,490		—		1,890,490

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	2021						2020
	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	$	—	$	2,437,923	$	—	$	—	$	1,849,559	$	—
U.S. Treasury and federal agency obligations	—		90,090		—		—		62,322		—
Corporate bonds	—		31,178		—		—		31,351		—
Mortgage revenue bonds	—		—		15,427		—		—		27,185
	$	—	$	2,559,191	$	15,427	$	—	$	1,943,232	$	27,185
Derivative assets
Interest rate lock commitments (bank segment)1	$	—	$	638	$	—	$	—	$	4,536	$	—


Interest rate swap (Other segment)2	—		271		—		—		—		—
	$	—	$	909	$	—	$	—	$	4,536	$	—
Derivative liabilities

Forward commitments (bank segment)1	$	11	$	—	$	—	$	500	$	—	$	—

Interest rate swap (Other segment)2	—		5,271		—		—		4,530		—
	$	11	$	5,271	$	—	$	500	$	4,530	$	—

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.

2 Derivatives are included in other assets and 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)	2021		2020
Mortgage revenue bonds
Balance, January 1	$	27,185	$	28,597
Principal payments received	(11,758)		(1,641)
Purchases	—		229
Unrealized gain (loss) included in other comprehensive income	—		—
Balance, December 31	$	15,427	$	27,185

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, 2020
Loans	$	387	$	—	$	—	$	387
Mortgage servicing rights	3,001		—		—		3,001

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	2021			2020
(dollars in thousands)
Unpaid principal balance	$	1,481,899		$	1,450,312
Weighted average note rate	3.38		%	3.68		%
Weighted average discount rate	9.25		%	9.25		%
Weighted average prepayment speed	9.77		%	17.70		%

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, 2020

Commercial loan

387

Fair value of collateral

Appraised value less selling cost

N/A (2)

Mortgage servicing rights

3,001

Discounted cash flow

Prepayment speed

15%-22%

22%

Discount rate

9.3%

(1) Represents percent of outstanding principal balance.

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