Bank subsidiary (Tables)

6 Months Ended

Jun. 30, 2012

Bank subsidiary

Schedule of consolidated statements of income data

	Three months ended June 30				Six months ended June 30
(in thousands)	2012		2011		2012		2011
Interest income
Interest and fees on loans	$	44,473	$	45,648	$	89,361	$	91,745
Interest on investment and mortgage-related securities	3,297		3,793		7,102		7,562
Total interest income	47,770		49,441		96,463		99,307
Interest expense
Interest on deposit liabilities	1,696		2,387		3,475		4,980
Interest on other borrowings	1,214		1,382		2,475		2,749
Total interest expense	2,910		3,769		5,950		7,729
Net interest income	44,860		45,672		90,513		91,578
Provision for loan losses	2,378		2,555		5,924		7,105
Net interest income after provision for loan losses	42,482		43,117		84,589		84,473
Noninterest income
Fees from other financial services	7,463		7,240		14,800		14,186
Fee income on deposit liabilities	4,322		4,599		8,600		9,048
Fee income on other financial products	1,532		1,861		3,081		3,534
Other income	3,634		3,177		7,029		5,556
Total noninterest income	16,951		16,877		33,510		32,324
Noninterest expense
Compensation and employee benefits	18,696		18,166		37,342		35,671
Occupancy	4,241		4,288		8,466		8,528
Data processing	2,489		2,058		4,600		4,028
Services	2,221		1,949		4,004		3,720
Equipment	1,807		1,772		3,537		3,429
Other expense	8,106		7,955		14,813		15,888
Total noninterest expense	37,560		36,188		72,762		71,264
Income before income taxes	21,873		23,806		45,337		45,533
Income taxes	7,684		8,611		15,271		16,487
Net income	$	14,189	$	15,195	$	30,066	$	29,046

American Savings Bank, F.S.B.

Statements of Comprehensive Income Data

	Three months ended June 30						Six months ended June 30
(in thousands)	2012			2011			2012			2011
Net income	$	14,189		$	15,195		$	30,066		$	29,046
Other comprehensive income (loss), net of taxes:
Net unrealized gains on securities:
Net unrealized gains on securities arising during the period, net of taxes, of $721 and $2,755 for the three months ended June 30, 2012 and 2011 and $572 and $2,341 for the six months ended June 30, 2012 and 2011, respectively	1,093			4,061			867			3,435
Less: reclassification adjustment for net realized gains, included in net income , net of taxes, of $53 and $2 for the three months ended June 30, 2012 and 2011 and $53 and $2 for the six months ended June 30, 2012 and 2011, respectively	(81		)	(3		)	(81		)	(3		)
Retirement benefit plans:
Less: amortization of net loss, prior service gain and transition obligation included in net periodic benefit cost, net of taxes (tax benefits) of $(168) and $(5) for the three months ended June 30, 2012 and 2011 and $(332) and $1,077 for the six months ended June 30, 2012 and 2011, respectively	255			186			503			(1,453		)
Other comprehensive income, net of taxes	1,267			4,244			1,289			1,979
Comprehensive income	$	15,456		$	19,439		$	31,355		$	31,025

Schedule of consolidated balance sheets data

(in thousands)	June 30, 2012			December 31, 2011
Assets
Cash and cash equivalents	$	201,193		$	219,678
Available-for-sale investment and mortgage-related securities	639,112			624,331
Investment in stock of Federal Home Loan Bank of Seattle	97,764			97,764
Loans receivable held for investment	3,734,937			3,680,724
Allowance for loan losses	(39,463		)	(37,906		)
Loans receivable held for investment, net	3,695,474			3,642,818
Loans held for sale, at lower of cost or fair value	11,915			9,601
Other	236,547			233,592
Goodwill	82,190			82,190
Total assets	$	4,964,195		$	4,909,974
Liabilities and shareholder’s equity
Deposit liabilities—noninterest-bearing	$	1,076,579		$	993,828
Deposit liabilities—interest-bearing	3,060,162			3,076,204
Other borrowings	218,673			233,229
Other	107,902			118,078
Total liabilities	4,463,316			4,421,339
Commitments and contingencies (see “Litigation” below)
Common stock	332,769			331,880
Retained earnings	176,192			166,126
Accumulated other comprehensive loss, net of tax benefits	(8,082		)	(9,371		)
Total shareholder’s equity	500,879			488,635
Total liabilities and shareholder’s equity	$	4,964,195		$	4,909,974
Other assets
Bank-owned life insurance	$	123,563		$	121,470
Premises and equipment, net	53,521			52,940
Prepaid expenses	15,423			15,297
Accrued interest receivable	14,084			14,190
Mortgage-servicing rights	8,818			8,227
Real estate acquired in settlement of loans, net	6,210			7,260
Other	14,928			14,208
	$	236,547		$	233,592
Other liabilities
Accrued expenses	$	12,928		$	21,216
Federal and state income taxes payable	35,052			35,002
Cashier’s checks	23,094			22,802
Advance payments by borrowers	9,975			10,100
Other	26,853			28,958
	$	107,902		$	118,078

Schedule of the book value and aggregate fair value by major security type

			Gross		Gross			Estimated		Gross unrealized losses
	Amortized		unrealized		unrealized			fair		Less than 12 months					12 months or longer
(dollars in thousands)	cost		gains		losses			value		Fair value		Amount			Fair value		Amount
June 30, 2012
Federal agency obligations	$	208,255	$	3,193	$	—		$	211,448	$	—	$	—		$	—	$	—
Mortgage-related securities- FNMA, FHLMC and GNMA	334,607		11,211		(149		)	345,669		21,048		(149		)	—		—
Municipal bonds	78,532		3,478		(15		)	81,995		7,357		(15		)	—		—
	$	621,394	$	17,882	$	(164	)	$	639,112	$	28,405	$	(164	)	$	—	$	—
December 31, 2011
Federal agency obligations	$	218,342	$	2,393	$	(8	)	$	220,727	$	19,992	$	(8	)	$	—	$	—
Mortgage-related securities- FNMA, FHLMC and GNMA	334,183		10,699		(17		)	344,865		11,994		(17		)	—		—
Municipal bonds	55,393		3,346		—			58,739		—		—			—		—
	$	607,918	$	16,438	$	(25	)	$	624,331	$	31,986	$	(25	)	$	—	$	—

Schedule of contractual maturities of available-for-sale securities

June 30, 2012	Amortized cost		Fair value
(in thousands)
Due in one year or less	$	—	$	—
Due after one year through five years	189,424		191,698
Due after five years through ten years	79,093		82,877
Due after ten years	18,270		18,868
	286,787		293,443
Mortgage-related securities-FNMA,FHLMC and GNMA	334,607		345,669
Total available-for-sale securities	$	621,394	$	639,112

Schedule of allowance for loan losses

	Residential			Commercial real		Home equity line			Residential			Commercial		Residential			Commercial			Consumer
(in thousands)	1-4 family			estate		of credit			land			construction		construction			loans			loans			Unallocated		Total
Six months ended June 30, 2012
Allowance for loan losses:
Beginning balance	$	6,500		$	1,688	$	4,354		$	3,795		$	1,888	$	4		$	14,867		$	3,806		$	1,004	$	37,906
Charge-offs	(1,512		)	—		(39		)	(1,247		)	—		—			(1,834		)	(1,252		)	—		(5,884		)
Recoveries	595			—		88			245			—		—			356			233			—		1,517
Provision	1,629			390		440			547			367		(1		)	572			1,010			970		5,924
Ending balance	$	7,212		$	2,078	$	4,843		$	3,340		$	2,255	$	3		$	13,961		$	3,797		$	1,974	$	39,463
Ending balance: individually evaluated for impairment	$	324		$	—	$	—		$	2,322		$	—	$	—		$	443		$	—		$	—	$	3,089
Ending balance: collectively evaluated for impairment	$	6,888		$	2,078	$	4,843		$	1,018		$	2,255	$	3		$	13,518		$	3,797		$	1,974	$	36,374
Financing Receivables:
Ending balance	$	1,893,456		$	372,616	$	589,852		$	34,200		$	50,120	$	1,797		$	704,255		$	101,042		$	—	$	3,747,338
Ending balance: individually evaluated for impairment	$	30,132		$	12,938	$	1,838		$	29,855		$	—	$	—		$	49,085		$	23		$	—	$	123,871
Ending balance: collectively evaluated for impairment	$	1,863,324		$	359,678	$	588,014		$	4,345		$	50,120	$	1,797		$	655,170		$	101,019		$	—	$	3,623,467
Year ended December 31, 2011
Allowance for loan losses:
Beginning balance	$	6,497		$	1,474	$	4,269		$	6,411		$	1,714	$	7		$	16,015		$	3,325		$	934	$	40,646
Charge-offs	(5,528		)	—		(1,439		)	(4,071		)	—		—			(5,335		)	(3,117		)	—		(19,490		)
Recoveries	110			—		25			170			—		—			869			567			—		1,741
Provision	5,421			214		1,499			1,285			174		(3		)	3,318			3,031			70		15,009
Ending balance	$	6,500		$	1,688	$	4,354		$	3,795		$	1,888	$	4		$	14,867		$	3,806		$	1,004	$	37,906
Ending balance: individually evaluated for impairment	$	203		$	—	$	—		$	2,525		$	—	$	—		$	976		$	—		$	—	$	3,704
Ending balance: collectively evaluated for impairment	$	6,297		$	1,688	$	4,354		$	1,270		$	1,888	$	4		$	13,891		$	3,806		$	1,004	$	34,202
Financing Receivables:
Ending balance	$	1,926,774		$	331,931	$	535,481		$	45,392		$	41,950	$	3,327		$	716,427		$	93,253		$	—	$	3,694,535
Ending balance: individually evaluated for impairment	$	26,012		$	13,397	$	1,450		$	39,364		$	—	$	—		$	48,241		$	24		$	—	$	128,488
Ending balance: collectively evaluated for impairment	$	1,900,762		$	318,534	$	534,031		$	6,028		$	41,950	$	3,327		$	668,186		$	93,229		$	—	$	3,566,047

Schedule of credit risk profile by internally assigned grade for loans

	June 30, 2012						December 31, 2011
(in thousands)	Commercial real estate		Commercial construction		Commercial		Commercial real estate		Commercial construction		Commercial
Grade:
Pass	$	346,522	$	50,120	$	631,540	$	308,843	$	41,950	$	650,234
Special mention	13,156		—		22,752		8,594		—		14,660
Substandard	9,859		—		44,366		11,058		—		47,607
Doubtful	3,079		—		5,597		3,436		—		3,926
Loss	—		—		—		—		—		—
Total	$	372,616	$	50,120	$	704,255	$	331,931	$	41,950	$	716,427

Schedule of credit risk profile based on payment activity for loans

(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
June 30, 2012
Real estate loans:
Residential 1-4 family	$	6,317	$	3,653	$	29,346	$	39,316	$	1,854,140	$	1,893,456	$	—
Commercial real estate	151		—		3,079		3,230		369,386		372,616		—
Home equity line of credit	822		285		2,241		3,348		586,504		589,852		—
Residential land	617		649		7,408		8,674		25,526		34,200		180
Commercial construction	—		—		—		—		50,120		50,120		—
Residential construction	—		—		—		—		1,797		1,797		—
Commercial loans	2,321		1,840		1,914		6,075		698,180		704,255		117
Consumer loans	555		364		498		1,417		99,625		101,042		415
Total loans	$	10,783	$	6,791	$	44,486	$	62,060	$	3,685,278	$	3,747,338	$	712
December 31, 2011
Real estate loans:
Residential 1-4 family	$	10,391	$	4,583	$	28,113	$	43,087	$	1,883,687	$	1,926,774	$	—
Commercial real estate	—		—		—		—		331,931		331,931		—
Home equity line of credit	1,671		494		1,421		3,586		531,895		535,481		—
Residential land	2,352		575		13,037		15,964		29,428		45,392		205
Commercial construction	—		—		—		—		41,950		41,950		—
Residential construction	—		—		—		—		3,327		3,327		—
Commercial loans	226		733		1,340		2,299		714,128		716,427		28
Consumer loans	553		344		486		1,383		91,870		93,253		308
Total loans	$	15,193	$	6,729	$	44,397	$	66,319	$	3,628,216	$	3,694,535	$	541

Schedule of credit risk profile based on nonaccrual loans, accruing loans 90 days or more past due

	June 30, 2012				December 31, 2011
(in thousands)	Nonaccrual loans		Accruing loans 90 days or more past due		Nonaccrual loans		Accruing loans 90 days or more past due
Real estate loans:
Residential 1-4 family	$	30,945	$	—	$	28,298	$	—
Commercial real estate	3,079		—		3,436		—
Home equity line of credit	2,587		—		2,258		—
Residential land	7,637		180		14,535		205
Commercial construction	—		—		—		—
Residential construction	—		—		—		—
Commercial loans	17,619		117		17,946		28
Consumer loans	169		415		281		308
Total	$	62,036	$	712	$	66,754	$	541

Schedule of the carrying amount and the total unpaid principal balance of impaired loans

	June 30, 2012						Three months ended June 30, 2012				Six months ended June 30, 2012
(in thousands)	Recorded investment		Unpaid principal balance		Related Allowance		Average recorded investment		Interest income recognized*		Average recorded investment		Interest income recognized*
With no related allowance recorded
Real estate loans:
Residential 1-4 family	$	16,405	$	22,509	$	—	$	16,897	$	79	$	17,697	$	168
Commercial real estate	12,938		12,938		—		13,152		92		13,254		237
Home equity line of credit	654		1,552		—		655		—		657		1
Residential land	22,639		29,170		—		24,774		319		26,337		724
Commercial construction	—		—		—		—		—		—		—
Residential construction	—		—		—		—		—		—		—
Commercial loans	42,811		45,783		—		44,055		450		43,107		946
Consumer loans	23		23		—		23		—		24		—
	95,470		111,975		—		99,556		940		101,076		2,076
With an allowance recorded
Real estate loans:
Residential 1-4 family	4,520		4,520		324		4,075		59		3,854		134
Commercial real estate	—		—		—		—		—		—		—
Home equity line of credit	—		—		—		—		—		—		—
Residential land	7,197		7,256		2,321		7,201		122		7,392		307
Commercial construction	—		—		—		—		—		—		—
Residential construction	—		—		—		—		—		—		—
Commercial loans	6,274		6,527		443		3,193		8		3,928		18
Consumer loans	—		—		—		—		—		—		—
	17,991		18,303		3,088		14,469		189		15,174		459
Total
Real estate loans:
Residential 1-4 family	20,925		27,029		324		20,972		138		21,551		302
Commercial real estate	12,938		12,938		—		13,152		92		13,254		237
Home equity line of credit	654		1,552		—		655		—		657		1
Residential land	29,836		36,426		2,321		31,975		441		33,729		1,031
Commercial construction	—		—		—		—		—		—		—
Residential construction	—		—		—		—		—		—		—
Commercial loans	49,085		52,310		443		47,248		458		47,035		964
Consumer loans	23		23		—		23		—		24		—
	$	113,461	$	130,278	$	3,088	$	114,025	$	1,129	$	116,250	$	2,535

*  Since loan was classified as impaired.

	December 31, 2011						Year ended December 31, 2011
(in thousands)	Recorded investment		Unpaid principal balance		Related allowance		Average recorded investment		Interest income recognized
With no related allowance recorded
Real estate loans:
Residential 1-4 family	$	19,217	$	26,614	$	—	$	21,385	$	282
Commercial real estate	13,397		13,397		—		13,404		747
Home equity line of credit	711		1,612		—		954		6
Residential land	30,781		39,136		—		33,398		1,779
Commercial construction	—		—		—		—		—
Residential construction	—		—		—		—		—
Commercial loans	41,680		43,516		—		40,952		2,912
Consumer loans	25		25		—		16		—
	105,811		124,300		—		110,109		5,726
With an allowance recorded
Real estate loans:
Residential 1-4 family	3,525		3,525		203		3,527		201
Commercial real estate	—		—		—		—		—
Home equity line of credit	—		—		—		—		—
Residential land	7,792		7,852		2,525		8,158		603
Commercial construction	—		—		—		—		—
Residential construction	—		—		—		—		—
Commercial loans	6,561		6,561		976		8,131		737
Consumer loans	—		—		—		—		—
	17,878		17,938		3,704		19,816		1,541
Total
Real estate loans:
Residential 1-4 family	22,742		30,139		203		24,912		483
Commercial real estate	13,397		13,397		—		13,404		747
Home equity line of credit	711		1,612		—		954		6
Residential land	38,573		46,988		2,525		41,556		2,382
Commercial construction	—		—		—		—		—
Residential construction	—		—		—		—		—
Commercial loans	48,241		50,077		976		49,083		3,649
Consumer loans	25		25		—		16		—
	$	123,689	$	142,238	$	3,704	$	129,925	$	7,267

Schedule of loan modifications and loans modified in TDRS that experienced a payment default of 90 days or more, and for which payment default occurred within one year of the modification

	Three months ended June 30, 2012					Six months ended June 30, 2012
(dollars in thousands)	Number of contracts	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Number of contracts	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment
Troubled debt restructurings
Real estate loans:
Residential 1-4 family	15	$	3,056	$	2,872	22	$	4,469	$	4,282
Commercial real estate	—	—		—		—	—		—
Home equity line of credit	—	—		—		—	—		—
Residential land	8	1,774		1,580		15	3,508		3,021
Commercial loans	8	1,869		1,869		14	2,029		2,029
Consumer loans	—	—		—		—	—		—
Total	31	$	6,699	$	6,321	51	$	10,006	$	9,332

Loans modified in TDRs that experienced a payment default of 90 days or more, and for which the payment default occurred within one year of the modification, were nil for the three months ended June 30, 2012 and were as follows for the six months ended June 30, 2012:

	Six months ended June 30, 2012
(dollars in thousands)	Number of contracts	Recorded investment
Troubled debt restructurings that subsequently defaulted
Real estate loans:
Residential 1-4 family	—	$	—
Commercial real estate	—	—
Home equity line of credit	—	—
Residential land	—	—
Commercial loans	3	847
Consumer loans	—	—
Total	3	$	847