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Bank segment (Tables)
 3 Months Ended
Mar. 31, 2015
Bank subsidiary  
Schedule of statements of income data
Selected financial information
American Savings Bank, F.S.B.
Statements of Income Data
 
 
Three months  
 ended March 31
(in thousands)
 
2015
 
2014
Interest and dividend income
 
 

 
 

Interest and fees on loans
 
$
45,198

 
$
43,682

Interest and dividends on investment securities
 
3,051

 
3,035

Total interest and dividend income
 
48,249

 
46,717

Interest expense
 
 

 
 

Interest on deposit liabilities
 
1,260

 
1,225

Interest on other borrowings
 
1,466

 
1,405

Total interest expense
 
2,726

 
2,630

Net interest income
 
45,523

 
44,087

Provision for loan losses
 
614

 
995

Net interest income after provision for loan losses
 
44,909

 
43,092

Noninterest income
 
 

 
 

Fees from other financial services
 
5,355

 
5,128

Fee income on deposit liabilities
 
5,315

 
4,421

Fee income on other financial products
 
1,889

 
2,290

Bank-owned life insurance
 
983

 
963

Mortgage banking income
 
1,822

 
628

Gains on sale of investment securities
 
—

 
2,847

Other income, net
 
735

 
625

Total noninterest income
 
16,099

 
16,902

Noninterest expense
 
 

 
 

Compensation and employee benefits
 
21,766

 
20,286

Occupancy
 
4,113

 
3,953

Data processing
 
3,116

 
3,060

Services
 
2,341

 
2,273

Equipment
 
1,701

 
1,645

Office supplies, printing and postage
 
1,483

 
1,616

Marketing
 
841

 
711

FDIC insurance
 
811

 
796

Other expense
 
4,205

 
3,122

Total noninterest expense
 
40,377

 
37,462

Income before income taxes
 
20,631

 
22,532

Income taxes
 
7,156

 
8,133

Net income
 
$
13,475

 
$
14,399
Schedule of statements of comprehensive income data
American Savings Bank, F.S.B.
Statements of Comprehensive Income Data
 
 
Three months  
 ended March 31
(in thousands)
 
2015
 
2014
Net income
 
$
13,475

 
$
14,399

Other comprehensive income (loss), net of taxes:
 
 

 
 

Net unrealized gains (losses) on available-for-sale investment securities:
 
 

 
 

Net unrealized gains losses on available-for-sale investment securities arising during the period, net of tax benefits of $2,278 and $1,664 for the respective periods
 
3,451

 
2,520

Less: reclassification adjustment for net realized gains included in net income, net of taxes of nil and $1,132 for the respective periods
 
—

 
(1,715
)
Retirement benefit plans:
 
 

 
 

Less: amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $259 and $144 for the respective periods
 
392

 
219

Other comprehensive income, net of taxes
 
3,843

 
1,024

Comprehensive income
 
$
17,318

 
$
15,423
Schedule of balance sheets data
American Savings Bank, F.S.B.
Balance Sheets Data
(in thousands)
 
March 31, 2015
 
December 31, 2014
Assets
 
 

 
 

 
 

 
 

Cash and due from banks
 
 

 
$
98,484

 
 

 
$
107,233

Interest-bearing deposits
 
 
 
172,517

 
 
 
54,230

Available-for-sale investment securities, at fair value
 
 

 
590,648

 
 

 
550,394

Stock in Federal Home Loan Bank of Seattle, at cost
 
 

 
63,711

 
 

 
69,302

Loans receivable held for investment
 
 

 
4,447,299

 
 

 
4,434,651

Allowance for loan losses
 
 

 
(45,795
)
 
 

 
(45,618
)
Net loans
 
 

 
4,401,504

 
 

 
4,389,033

Loans held for sale, at lower of cost or fair value
 
 

 
9,906

 
 

 
8,424

Other
 
 

 
305,917

 
 

 
305,416

Goodwill
 
 

 
82,190

 
 

 
82,190

Total assets
 
 

 
$
5,724,877

 
 

 
$
5,566,222

 
 
 
 
 
 
 
 
 
Liabilities and shareholder’s equity
 
 

 
 

 
 

 
 

Deposit liabilities—noninterest-bearing
 
 

 
$
1,420,085

 
 

 
$
1,342,794

Deposit liabilities—interest-bearing
 
 

 
3,331,243

 
 

 
3,280,621

Other borrowings
 
 

 
312,094

 
 

 
290,656

Other
 
 

 
117,849

 
 

 
118,363

Total liabilities
 
 

 
5,181,271

 
 

 
5,032,434

Commitments and contingencies
 
 

 


 
 

 


Common stock
 
 

 
1

 
 

 
1

Additional paid in capital
 
 
 
338,411

 
 
 
338,411

Retained earnings
 
 

 
217,909

 
 

 
211,934

Accumulated other comprehensive loss, net of tax benefits
 
 

 
 

 
 

 
 

Net unrealized gains on securities
 
$
3,913

 
 

 
$
462

 
 

Retirement benefit plans
 
(16,628
)
 
(12,715
)
 
(17,020
)
 
(16,558
)
Total shareholder’s equity
 
 

 
543,606

 
 

 
533,788

Total liabilities and shareholder’s equity
 
 

 
$
5,724,877

 
 

 
$
5,566,222

 
 
 
 
 
 
 
 
 
Other assets
 
 

 
 

 
 

 
 

Bank-owned life insurance
 
 

 
$
135,141

 
 

 
$
134,115

Premises and equipment, net
 
 

 
85,174

 
 

 
92,407

Prepaid expenses
 
 

 
4,892

 
 

 
3,196

Accrued interest receivable
 
 

 
13,720

 
 

 
13,632

Mortgage-servicing rights
 
 

 
11,965

 
 

 
11,540

Low-income housing equity investments
 
 
 
32,140

 
 
 
33,438

Real estate acquired in settlement of loans, net
 
 

 
665

 
 

 
891

Other
 
 

 
22,220

 
 

 
16,197

 
 
 

 
$
305,917

 
 

 
$
305,416

Other liabilities
 
 

 
 

 
 

 
 

Accrued expenses
 
 

 
$
29,670

 
 

 
$
37,880

Federal and state income taxes payable
 
 

 
36,010

 
 

 
28,642

Cashier’s checks
 
 

 
24,686

 
 

 
20,509

Advance payments by borrowers
 
 

 
5,904

 
 

 
9,652

Other
 
 

 
21,579

 
 

 
21,680

 
 
 

 
$
117,849

 
 

 
$
118,363
Schedule of the book value and aggregate fair value by major security type
  The major components of investment securities were as follows:
 
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Estimated fair
value
 
 
 
Gross unrealized losses
 
 
 
 
 
 
Less than 12 months
 
12 months or longer
(dollar in thousands)
 
 
 
 
 
Number of issues
 
Fair 
value
 
Amount
 
Number of issues
 
Fair 
value
 
Amount
March 31, 2015
 
 

 
 

 
 

 
 

 
 
 
 

 
 

 
 
 
 

 
 

Available-for-sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agency obligations
 
$
138,593

 
$
2,029

 
$
(395
)
 
$
140,227

 
1

 
$
9,973

 
$
(2
)
 
3

 
$
19,198

 
$
(393
)
Mortgage-related securities- FNMA, FHLMC and GNMA
 
445,559

 
7,149

 
(2,287
)
 
450,421

 
6

 
40,889

 
(89
)
 
26

 
147,722

 
(2,198
)
 
 
$
584,152

 
$
9,178

 
$
(2,682
)
 
$
590,648

 
7

 
$
50,862

 
$
(91
)
 
29

 
$
166,920

 
$
(2,591
)
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agency obligations
 
$
119,507

 
$
1,092

 
$
(1,039
)
 
$
119,560

 
6

 
$
41,970

 
$
(361
)
 
5

 
$
29,168

 
$
(678
)
Mortgage-related securities- FNMA, FHLMC and GNMA
 
430,120

 
5,653

 
(4,939
)
 
430,834

 
6

 
47,029

 
(164
)
 
29

 
172,623

 
(4,775
)
 
 
$
549,627

 
$
6,745

 
$
(5,978
)
 
$
550,394

 
12

 
$
88,999

 
$
(525
)
 
34

 
$
201,791

 
$
(5,453
)
Schedule of contractual maturities of available-for-sale securities
The contractual maturities of available-for-sale investment securities were as follows:
March 31, 2015
 
Amortized cost
 
Fair value
(in thousands)
 
 
 
 
Due in one year or less
 
$
—

 
$
—

Due after one year through five years
 
29,958

 
30,296

Due after five years through ten years
 
71,811

 
73,188

Due after ten years
 
36,824

 
36,743

 
 
138,593

 
140,227

Mortgage-related securities-FNMA,FHLMC and GNMA
 
445,559

 
450,421

Total available-for-sale securities
 
$
584,152

 
$
590,648
Schedule of allowance for loan losses
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 loans
 
Consumer loans
 
Unallocated
 
Total
Three months ended 
 March 31, 2015
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
 
$
4,662

 
$
8,954

 
$
6,982

 
$
1,875

 
$
5,471

 
$
28

 
$
14,017

 
$
3,629

 
$
—

 
$
45,618

Charge-offs
 
(156
)
 
—

 
(3
)
 
—

 
—

 
—

 
(46
)
 
(942
)
 
—

 
(1,147
)
Recoveries
 
12

 
—

 
31

 
49

 
—

 
—

 
341

 
277

 
—

 
710

Provision
 
403

 
2,274

 
(487
)
 
362

 
(2,634
)
 
(7
)
 
268

 
435

 
—

 
614

Ending balance
 
$
4,921

 
$
11,228

 
$
6,523

 
$
2,286

 
$
2,837

 
$
21

 
$
14,580

 
$
3,399

 
$
—

 
$
45,795

Ending balance: individually evaluated for impairment
 
$
1,429

 
$
1,785

 
$
144

 
$
1,085

 
$
—

 
$
—

 
$
1,096

 
$
9

 
 
 
$
5,548

Ending balance: collectively evaluated for impairment
 
$
3,492

 
$
9,443

 
$
6,379

 
$
1,201

 
$
2,837

 
$
21

 
$
13,484

 
$
3,390

 
$
—

 
$
40,247

Financing Receivables:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance
 
$
2,039,099

 
$
561,189

 
$
814,265

 
$
18,155

 
$
77,164

 
$
20,804

 
$
803,545

 
$
119,310

 
 
 
$
4,453,531

Ending balance: individually evaluated for impairment
 
$
23,089

 
$
4,998

 
$
1,183

 
$
7,819

 
$
—

 
$
—

 
$
11,879

 
$
15

 
 
 
$
48,983

Ending balance: collectively evaluated for impairment
 
$
2,016,010

 
$
556,191

 
$
813,082

 
$
10,336

 
$
77,164

 
$
20,804

 
$
791,666

 
$
119,295

 
 
 
$
4,404,548

Three months ended 
 March 31, 2014
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
 
$
5,534

 
$
5,059

 
$
5,229

 
$
1,817

 
$
2,397

 
$
19

 
$
15,803

 
$
2,367

 
$
1,891

 
$
40,116

Charge-offs
 
(266
)
 
—

 
—

 
(6
)
 
—

 
—

 
(124
)
 
(561
)
 
—

 
(957
)
Recoveries
 
341

 
—

 
11

 
86

 
—

 
—

 
100

 
231

 
—

 
769

Provision
 
(134
)
 
656

 
729

 
(322
)
 
666

 
5

 
(187
)
 
279

 
(697
)
 
995

Ending balance
 
$
5,475

 
$
5,715

 
$
5,969

 
$
1,575

 
$
3,063

 
$
24

 
$
15,592

 
$
2,316

 
$
1,194

 
$
40,923

Ending balance: individually evaluated for impairment
 
$
906

 
$
1,544

 
$
—

 
$
1,102

 
$
—

 
$
—

 
$
2,133

 
$
—

 
 
 
$
5,685

Ending balance: collectively evaluated for impairment
 
$
4,569

 
$
4,171

 
$
5,969

 
$
473

 
$
3,063

 
$
24

 
$
13,459

 
$
2,316

 
$
1,194

 
$
35,238

Financing Receivables:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance
 
$
1,985,812

 
$
452,303

 
$
764,483

 
$
15,906

 
$
66,578

 
$
16,474

 
$
786,611

 
$
108,202

 
 
 
$
4,196,369

Ending balance: individually evaluated for impairment
 
$
20,141

 
$
4,558

 
$
1,164

 
$
10,351

 
$
—

 
$
—

 
$
19,399

 
$
18

 
 
 
$
55,631

Ending balance: collectively evaluated for impairment
 
$
1,965,671

 
$
447,745

 
$
763,319

 
$
5,555

 
$
66,578

 
$
16,474

 
$
767,212

 
$
108,184

 
 
 
$
4,140,738
Schedule of credit risk profile by internally assigned grade for loans
The credit risk profile by internally assigned grade for loans was as follows:
 
 
March 31, 2015
 
December 31, 2014
(in thousands)
 
Commercial
real estate
 
Commercial
construction
 
Commercial
 
Commercial
real estate
 
Commercial
construction
 
Commercial
Grade:
 
 

 
 

 
 

 
 

 
 

 
 

Pass
 
$
507,993

 
$
77,164

 
$
739,721

 
$
493,105

 
$
79,312

 
$
743,334

Special mention
 
5,203

 
—

 
31,863

 
5,209

 
—

 
16,095

Substandard
 
47,993

 
—

 
31,335

 
33,603

 
17,126

 
31,665

Doubtful
 
—

 
—

 
626

 
—

 
—

 
663

Loss
 
—

 
—

 
—

 
—

 
—

 
—

Total
 
$
561,189

 
$
77,164

 
$
803,545

 
$
531,917

 
$
96,438

 
$
791,757
Schedule of credit risk profile based on payment activity for loans
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
March 31, 2015
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
6,074

 
$
2,718

 
$
12,231

 
$
21,023

 
$
2,018,076

 
$
2,039,099

 
$
—

Commercial real estate
 
—

 
—

 
—

 
—

 
561,189

 
561,189

 
—

Home equity line of credit
 
1,041

 
807

 
629

 
2,477

 
811,788

 
814,265

 
—

Residential land
 
422

 
—

 
—

 
422

 
17,733

 
18,155

 


Commercial construction
 
—

 
—

 
—

 
—

 
77,164

 
77,164

 
—

Residential construction
 
—

 
—

 
—

 
—

 
20,804

 
20,804

 
—

Commercial
 
680

 
238

 
532

 
1,450

 
802,095

 
803,545

 
—

Consumer
 
895

 
270

 
266

 
1,431

 
117,879

 
119,310

 
—

Total loans
 
$
9,112

 
$
4,033

 
$
13,658

 
$
26,803

 
$
4,426,728

 
$
4,453,531

 
$
—

December 31, 2014
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
6,124

 
$
1,732

 
$
12,632

 
$
20,488

 
$
2,023,717

 
$
2,044,205

 
$
—

Commercial real estate
 
—

 
—

 
—

 
—

 
531,917

 
531,917

 
—

Home equity line of credit
 
1,341

 
501

 
194

 
2,036

 
816,779

 
818,815

 
—

Residential land
 
—

 
—

 
—

 
—

 
16,240

 
16,240

 
—

Commercial construction
 
—

 
—

 
—

 
—

 
96,438

 
96,438

 
—

Residential construction
 
—

 
—

 
—

 
—

 
18,961

 
18,961

 
—

Commercial
 
699

 
145

 
569

 
1,413

 
790,344

 
791,757

 
—

Consumer
 
829

 
333

 
403

 
1,565

 
121,091

 
122,656

 
—

Total loans
 
$
8,993

 
$
2,711

 
$
13,798

 
$
25,502

 
$
4,415,487

 
$
4,440,989

 
$
—
Schedule of credit risk profile based on nonaccrual loans, accruing loans 90 days or more past due
The credit risk profile based on nonaccrual loans, accruing loans 90 days or more past due and TDR loans was as follows:
(in thousands)
 
March 31, 2015
 
December 31, 2014
Real estate:
 
 

 
 

Residential 1-4 family
 
$
18,205

 
$
19,253

Commercial real estate
 
4,998

 
5,112

Home equity line of credit
 
1,701

 
1,087

Residential land
 
717

 
720

Commercial construction
 
—

 
—

Residential construction
 
—

 
—

Commercial
 
9,018

 
10,053

Consumer
 
542

 
661

Total nonaccrual loans
 
$
35,181

 
$
36,886

Real estate:
 
 
 
 
Residential 1-4 family
 
$
—

 
$
—

Commercial real estate
 
—

 
—

Home equity line of credit
 
—

 
—

Residential land
 
—

 
—

Commercial construction
 
—

 
—

Residential construction
 
—

 
—

Commercial
 
—

 
—

Consumer
 
—

 
—

Total accruing loans 90 days or more past due
 
$
—

 
$
—

Real estate:
 
 
 
 
Residential 1-4 family
 
$
14,334

 
$
13,525

Commercial real estate
 
—

 
—

Home equity line of credit
 
750

 
480

Residential land
 
7,102

 
7,130

Commercial construction
 
—

 
—

Residential construction
 
—

 
—

Commercial
 
2,720

 
2,972

Consumer
 
—

 
—

Total troubled debt restructured loans not included above
 
$
24,906

 
$
24,107
Schedule of the carrying amount and the total unpaid principal balance of impaired loans, with and without recorded allowance for loans losses
The total carrying amount and the total unpaid principal balance of impaired loans were as follows:
 
 
March 31, 2015
 
Three months ended 
 March 31, 2015
(in thousands)
 
Recorded
investment
 
Unpaid
principal
balance
 
Related
Allowance
 
Average
recorded
investment
 
Interest
income
recognized*
With no related allowance recorded
 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
11,168

 
$
12,460

 
$
—

 
$
11,552

 
$
89

Commercial real estate
 
547

 
609

 
—

 
555

 
—

Home equity line of credit
 
339

 
544

 
—

 
400

 
1

Residential land
 
3,265

 
4,121

 
—

 
2,637

 
52

Commercial construction
 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

Commercial
 
6,289

 
8,089

 
—

 
7,295

 
2

Consumer
 
—

 
—

 
—

 
—

 
—

 
 
$
21,608

 
$
25,823

 
$
—

 
$
22,439

 
$
144

With an allowance recorded
 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
11,921

 
$
11,974

 
$
1,429

 
$
11,510

 
$
126

Commercial real estate
 
4,451

 
4,511

 
1,785

 
4,482

 
—

Home equity line of credit
 
844

 
900

 
144

 
626

 
6

Residential land
 
4,554

 
4,632

 
1,085

 
5,189

 
83

Commercial construction
 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

Commercial
 
5,590

 
7,549

 
1,096

 
4,982

 
50

Consumer
 
15

 
15

 
9

 
15

 
—

 
 
$
27,375

 
$
29,581

 
$
5,548

 
$
26,804

 
$
265

Total
 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
23,089

 
$
24,434

 
$
1,429

 
$
23,062

 
$
215

Commercial real estate
 
4,998

 
5,120

 
1,785

 
5,037

 
—

Home equity line of credit
 
1,183

 
1,444

 
144

 
1,026

 
7

Residential land
 
7,819

 
8,753

 
1,085

 
7,826

 
135

Commercial construction
 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

Commercial
 
11,879

 
15,638

 
1,096

 
12,277

 
52

Consumer
 
15

 
15

 
9

 
15

 
—

 
 
$
48,983

 
$
55,404

 
$
5,548

 
$
49,243

 
$
409


 
 
December 31, 2014
 
Year ended December 31, 2014
(in thousands)
 
Recorded
investment
 
Unpaid
principal
balance
 
Related
allowance
 
Average
recorded
investment
 
Interest
income
recognized*
With no related allowance recorded
 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
11,654

 
$
12,987

 
$
—

 
$
9,056

 
$
227

Commercial real estate
 
571

 
626

 
—

 
194

 
—

Home equity line of credit
 
363

 
606

 
—

 
402

 
5

Residential land
 
2,344

 
3,200

 
—

 
2,728

 
172

Commercial construction
 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

Commercial
 
8,235

 
11,471

 
—

 
5,204

 
38

Consumer
 
—

 
—

 
—

 
8

 
—

 
 
$
23,167

 
$
28,890

 
$
—

 
$
17,592

 
$
442

With an allowance recorded
 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
11,327

 
$
11,347

 
$
951

 
$
8,822

 
$
419

Commercial real estate
 
4,541

 
4,541

 
1,845

 
3,415

 
478

Home equity line of credit
 
416

 
420

 
46

 
132

 
6

Residential land
 
5,506

 
5,584

 
1,057

 
6,415

 
484

Commercial construction
 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

Commercial
 
4,873

 
5,211

 
760

 
12,089

 
438

Consumer
 
16

 
16

 
6

 
9

 
—

 
 
$
26,679

 
$
27,119

 
$
4,665

 
$
30,882

 
$
1,825

Total
 
 

 
 

 
 

 
 

 
 

Real estate:
 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
 
$
22,981

 
$
24,334

 
$
951

 
$
17,878

 
$
646

Commercial real estate
 
5,112

 
5,167

 
1,845

 
3,609

 
478

Home equity line of credit
 
779

 
1,026

 
46

 
534

 
11

Residential land
 
7,850

 
8,784

 
1,057

 
9,143

 
656

Commercial construction
 
—

 
—

 
—

 
—

 
—

Residential construction
 
—

 
—

 
—

 
—

 
—

Commercial
 
13,108

 
16,682

 
760

 
17,293

 
476

Consumer
 
16

 
16

 
6

 
17

 
—

 
 
$
49,846

 
$
56,009

 
$
4,665

 
$
48,474

 
$
2,267

 
*
Since loan was classified as impaired.
Schedule of loan modifications
Loan modifications that occurred were as follows:
 
 
Three months ended March 31, 2015
 
 
Number of
 
Outstanding recorded investment
 
Net increase in ALL
(dollars in thousands)
 
contracts
 
Pre-modification
 
Post-modification
 
(as of period end)
Troubled debt restructurings
 
 
 
 

 
 

 
 
Real estate:
 
 
 
 

 
 

 
 
Residential 1-4 family
 
5
 
$
877

 
$
895

 
$
47

Commercial real estate
 
—
 
—

 
—

 
—

Home equity line of credit
 
9
 
429

 
429

 
55

Residential land
 
—
 
—

 
—

 
—

Commercial construction
 
—
 
—

 
—

 
—

Residential construction
 
—
 
—

 
—

 
—

Commercial
 
1
 
92

 
92

 
—

Consumer
 
—
 
—

 
—

 
—

 
 
15
 
$
1,398

 
$
1,416

 
$
102


 
 
Three months ended March 31, 2014
 
 
Number of
 
Outstanding recorded investment
 
Net increase in ALL
(dollars in thousands)
 
contracts
 
Pre-modification
 
Post-modification
 
(as of period end)
Troubled debt restructurings
 
 
 
 

 
 

 
 
Real estate:
 
 
 
 

 
 

 
 
Residential 1-4 family
 
5
 
$
921

 
$
935

 
$
44

Commercial real estate
 
—
 
—

 
—

 
—

Home equity line of credit
 
—
 
—

 
—

 
—

Residential land
 
7
 
1,133

 
1,133

 
175

Commercial construction
 
—
 
—

 
—

 
—

Residential construction
 
—
 
—

 
—

 
—

Commercial
 
3
 
473

 
473

 
14

Consumer
 
—
 
—

 
—

 
—

 
 
15
 
$
2,527

 
$
2,541

 
$
233
Schedule of amortized intangible assets
The carrying values of mortgage servicing assets were as follows:
(in thousands)
 
Gross
carrying amount
 
Accumulated amortization
 
Valuation allowance
 
Net
carrying amount
March 31, 2015
 
$
28,090

 
$
(16,084
)
 
$
(41
)
 
$
11,965

March 31, 2014
 
26,097

 
(14,138
)
 
(202
)
 
11,757

Changes related to mortgage servicing rights were as follows:
(in thousands)
2015

 
2014

Mortgage servicing rights
 
 
 
Balance, January 1
$
11,749

 
$
11,938

Amount capitalized
906

 
467

Amortization
(647
)
 
(432
)
Other-than-temporary impairment
(2
)
 
(14
)
Carrying amount before valuation allowance, March 31
12,006

 
11,959

Valuation allowance for mortgage servicing rights
 
 
 
Balance, January 1
209

 
251

Provision (recovery)
(166
)
 
(35
)
Other-than-temporary impairment
(2
)
 
(14
)
Balance, March 31
41

 
202

Net carrying value of mortgage servicing rights
$
11,965

 
$
11,757
Schedule of key assumptions used in estimating fair value
Key assumptions used in estimating the fair value of the bank’s mortgage servicing rights were as follows:
(dollars in thousands)
 
March 31, 2015

 
December 31, 2014

Unpaid principal balance
 
$
1,414,990

 
$
1,391,030

Weighted average note rate
 
4.06
%
 
4.07
%
Weighted average discount rate
 
9.6
%
 
9.6
%
Weighted average prepayment speed
 
10.6
%
 
9.5
%
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
March 31, 2015
 
 
 
 
 
 
 
 
 
 
Residential loans
 
$
2,377

 
Fair value of property or collateral
 
Appraised value less 7% selling costs
 
39-99%
 
78%
Home equity lines of credit
 
3

 
Fair value of property or collateral
 
Appraised value less 7% selling costs
 
 
 
7%
Commercial loans
 
114

 
Fair value of property or collateral
 
Fair value of business assets
 
 
 
88%
Total loans
 
$
2,494

 
 
 
 
 
 
 
 
Real estate acquired in settlement of loans
 
$
665

 
Fair value of property or collateral
 
Appraised value less 7% selling costs
 
100%
 
100%
December 31, 2014
 
 
 
 
 
 
 
 
 
 
Residential loans
 
$
2,297

 
Fair value of property or collateral
 
Appraised value less 7% selling costs
 
39-99%
 
83%
Home equity lines of credit
 
3

 
Fair value of property or collateral
 
Appraised value less 7% selling costs
 
 
 
7%
Commercial loans
 
145

 
Fair value of property or collateral
 
Fair value of business assets
 
 
 
91%
Total loans
 
$
2,445

 
 
 
 
 
 
 
 
Real estate acquired in settlement of loans
 
$
288

 
Fair value of property or collateral
 
Appraised value less 7% selling cost
 
100%
 
100%
 1 Represent percent of outstanding principal balance.
Schedule of sensitivity analysis of fair value, transferor's interests in transferred financial assets
The sensitivity analysis of fair value of MSR to hypothetical adverse changes of 25 and 50 basis points in certain key assumptions is as follows:
(dollars in thousands)
 
March 31, 2015

 
December 31, 2014

Prepayment rate:
 
 
 
 
  25 basis points adverse rate change
 
$
(750
)
 
$
(757
)
  50 basis points adverse change
 
(1,408
)
 
(1,524
)
Discount rate:
 
 
 
 
  25 basis points adverse change
 
(129
)
 
(140
)
  50 basis points adverse rate change
 
(256
)
 
(278
)
Schedule of securities sold under agreements to repurchase
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 Sheet
 
Net amount of liabilities presented
in the Balance Sheet
Repurchase agreements
 
 
 
 
 
 
March 31, 2015
 
$212
 
$—
 
$212
December 31, 2014
 
191
 
—
 
191
 
 
Gross amount not offset in the Balance Sheet
(in millions)
 
Net amount of 
liabilities presented
in the Balance Sheet
 
Financial
instruments
 
Cash
collateral
pledged
 
Net amount
March 31, 2015
 
 

 
 

 
 

 
 

Financial institution
 
$
50

 
$
50

 
$
—

 
$
—

Government entities
 
56

 
56

 
—

 
—

Commercial account holders
 
106

 
106

 
—

 
—

Total
 
$
212

 
$
212

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
December 31, 2014
 
 

 
 

 
 

 
 

Financial institution
 
$
50

 
$
50

 
$
—

 
$
—

Government entities
 
56

 
56

 
—

 
—

Commercial account holders
 
85

 
85

 
—

 
—

Total
 
$
191

 
$
191

 
$
—

 
$
—
Schedule of notional and fair value of derivatives
The notional amount and fair value of ASB’s derivative financial instruments were as follows:
 
 
March 31, 2015
 
December 31, 2014
(in thousands)
 
Notional amount
 
Fair value
 
Notional amount
 
Fair value
Interest rate lock commitments
 
$
50,301

 
$
835

 
$
29,330

 
$
390

Forward commitments
 
46,489

 
(265
)
 
32,833

 
(106
)
Schedule of derivative financial instruments
ASB’s derivative financial instruments, their fair values, and balance sheet location were as follows:
Derivative Financial Instruments Not Designated as Hedging Instruments 1
 
March 31, 2015
 
December 31, 2014
(in thousands)
 
 Asset derivatives
 
 Liability
derivatives
 
 Asset derivatives
 
 Liability
derivatives
Interest rate lock commitments
 
$
836

 
$
1

 
$
393

 
$
3

Forward commitments
 
15

 
280

 
5

 
111

 
 
$
851

 
$
281

 
$
398

 
$
114

1 Asset derivatives are included in other assets and liability derivatives are included in other liabilities in the balance sheets.
Schedule of derivative financial instruments and net gain or loss
The following table presents ASB’s derivative financial instruments and the amount and location of the net gains or losses recognized in the statements of income:
Derivative Financial Instruments Not Designated as Hedging Instruments
Location of net gains (losses) recognized in the Statement of Income
 
Three months  
 ended March 31
(in thousands)
 
2015
 
2014
Interest rate lock commitments
Mortgage banking income
 
$
445

 
$
(270
)
Forward commitments
Mortgage banking income
 
(159
)
 
(106
)
 
 
 
$
286

 
$
(376
)