XML 80 R35.htm IDEA: XBRL DOCUMENT v3.3.0.814
Bank segment (HEI only) (Tables)
 12 Months Ended
Dec. 31, 2014
Bank Segment Disclosure [Abstract]  
Schedule of statements of income data
Statements of Income Data
Years ended December 31
2014

 
2013

 
2012

(in thousands)
 

 
 

 
 

Interest and dividend income
 

 
 

 
 

Interest and fees on loans
$
179,341

 
$
172,969

 
$
176,057

Interest and dividends on investment securities
11,945

 
13,095

 
13,822

Total interest and dividend income
191,286

 
186,064

 
189,879

Interest expense
 

 
 

 
 

Interest on deposit liabilities
5,077

 
5,092

 
6,423

Interest on other borrowings
5,731

 
4,985

 
4,869

Total interest expense
10,808

 
10,077

 
11,292

Net interest income
180,478

 
175,987

 
178,587

Provision for loan losses
6,126

 
1,507

 
12,883

Net interest income after provision for loan losses
174,352

 
174,480

 
165,704

Noninterest income
 

 
 

 
 

Fees from other financial services
21,747

 
27,099

 
31,361

Fee income on deposit liabilities
19,249

 
18,363

 
17,775

Fee income on other financial products
8,131

 
8,405

 
6,577

Bank-owned life insurance
3,949

 
3,928

 
3,981

Mortgage banking income
2,913

 
8,309

 
14,628

Gains on sale of investment securities
2,847

 
1,226

 
134

Other income, net
2,375

 
4,753

 
1,204

Total noninterest income
61,211

 
72,083

 
75,660

Noninterest expense
 

 
 

 
 

Compensation and employee benefits
79,885

 
82,910

 
75,979

Occupancy
17,197

 
16,747

 
17,179

Data processing
11,690

 
10,952

 
10,098

Services
10,269

 
9,015

 
9,866

Equipment
6,564

 
7,295

 
7,105

Office supplies, printing and postage
6,089

 
4,233

 
3,870

Marketing
3,999

 
3,373

 
3,260

FDIC insurance
3,261

 
3,253

 
3,307

Other expense
20,990

 
21,726

 
21,679

Total noninterest expense
159,944

 
159,504

 
152,343

Income before income taxes
75,619

 
87,059

 
89,021

Income taxes
24,127

 
29,525

 
30,384

Net income
$
51,492

 
$
57,534

 
$
58,637
Schedule of statements of comprehensive income data
Statements of Comprehensive Income
Years ended December 31
2014

 
2013

 
2012

(in thousands)
 

 
 

 
 

Net income
$
51,492

 
$
57,534

 
$
58,637

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 (taxes) benefits of $(3,856), $9,037 and ($631), for 2014, 2013 and 2012, respectively
5,840

 
(13,686
)
 
956

Less: reclassification adjustment for net realized gains included in net income, net of taxes of $1,132, $488 and $53 for 2014, 2013 and 2012, respectively
(1,715
)
 
(738
)
 
(81
)
Retirement benefit plans:
 

 
 

 
 

Net gains (losses) arising during the period, net of (taxes) benefits of $6,164, ($10,450) and $5,240 for 2014, 2013 and 2012, respectively
(9,336
)
 
15,826

 
(7,936
)
Less: amortization of transition obligation, prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $561, $1,187 and $684 for 2014, 2013 and 2012, respectively
850

 
1,797

 
1,036

Other comprehensive income (loss), net of taxes
(4,361
)
 
3,199

 
(6,025
)
Comprehensive income
$
47,131

 
$
60,733

 
$
52,612
Schedule of balance sheets data
Balance Sheets Data
December 31
 
2014

 
2013

(in thousands)
 
 

 
 

Assets
 
 

 
 

Cash and due from banks
 
$
107,233

 
$
108,998

Interest-bearing deposits
 
54,230

 
47,605

Available-for-sale investment securities, at fair value
 
550,394

 
529,007

Stock in Federal Home Loan Bank of Seattle, at cost
 
69,302

 
92,546

Loans receivable held for investment
 
4,434,651

 
4,150,229

Allowance for loan losses
 
(45,618
)
 
(40,116
)
Net loans
 
4,389,033

 
4,110,113

Loans held for sale, at lower of cost or fair value
 
8,424

 
5,302

Other
 
304,435

 
268,063

Goodwill
 
82,190

 
82,190

Total assets
 
$
5,565,241

 
$
5,243,824

Liabilities and shareholder’s equity
 
 

 
 

Deposit liabilities–noninterest-bearing
 
$
1,342,794

 
$
1,214,418

Deposit liabilities–interest-bearing
 
3,280,621

 
3,158,059

Other borrowings
 
290,656

 
244,514

Other
 
116,527

 
105,679

Total liabilities
 
5,030,598

 
4,722,670

Commitments and contingencies (see “Litigation” below)
 
 

 
 

Common stock
 
1

 
1

Additional paid in capital
 
338,411

 
336,053

Retained earnings
 
212,789

 
197,297

Accumulated other comprehensive loss, net of tax benefits
 
 
 
 
     Net unrealized gains (losses) on securities
$
462

 
$
(3,663
)
 
     Retirement benefit plans
(17,020
)
(16,558
)
(8,534
)
(12,197
)
Total shareholder’s equity
 
534,643

 
521,154

Total liabilities and shareholder’s equity
 
$
5,565,241

 
$
5,243,824




December 31
 
2014

 
2013

(in thousands)
 
 

 
 

Other assets
 
 

 
 

Bank-owned life insurance
 
$
134,115

 
$
129,963

Premises and equipment, net
 
92,407

 
67,766

Prepaid expenses
 
3,196

 
3,616

Accrued interest receivable
 
13,632

 
13,133

Mortgage-servicing rights
 
11,540

 
11,687

Low-income housing equity investments
 
32,457

 
14,543

Real estate acquired in settlement of loans, net
 
891

 
1,205

Other
 
16,197

 
26,150

 
 
$
304,435

 
$
268,063

Other liabilities
 
 

 
 

Accrued expenses
 
$
37,880

 
$
19,989

Federal and state income taxes payable
 
26,806

 
37,807

Cashier’s checks
 
20,509

 
21,110

Advance payments by borrowers
 
9,652

 
9,647

Other
 
21,680

 
17,126

 
 
$
116,527

 
$
105,679
Schedule of the book value and aggregate fair value by major security type
The major components of investment securities were as follows:
 
 
 
 
 
 
 
 
 
Gross unrealized losses
 
 
 
Gross
 
Gross
 
Estimated
 
Less than 12 months
 
12 months or longer
(dollars in thousands)
Amortized
cost
 
unrealized
gains
 
unrealized
losses
 
fair
value
 
Number of issues
 
Fair value
 
Amount
 
Number of issues
 
Fair value
 
Amount
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
)
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale
 

 
 

 
 

 
 

 
 
 
 

 
 

 
 
 
 

 
 

Federal agency obligations
$
83,193

 
$
174

 
$
(2,394
)
 
$
80,973

 
10
 
$
70,799

 
$
(2,394
)
 
—
 
$
—

 
$
—

Mortgage-related securities- FNMA, FHLMC and GNMA
374,993

 
4,911

 
(10,460
)
 
369,444

 
36
 
228,543

 
(8,819
)
 
4
 
19,655

 
(1,641
)
Municipal bonds
76,904

 
1,826

 
(140
)
 
78,590

 
3
 
14,478

 
(140
)
 
—
 
—

 
—

 
$
535,090

 
$
6,911

 
$
(12,994
)
 
$
529,007

 
49
 
$
313,820

 
$
(11,353
)
 
4
 
$
19,655

 
$
(1,641
)
Schedule of contractual maturities of available-for-sale securities
The contractual maturities of available-for-sale investment securities were as follows:
 
Amortized

 
Fair

December 31, 2014
Cost

 
value

(in thousands)
 
 
 
Due in one year or less
$
—

 
$
—

Due after one year through five years
34,953

 
35,007

Due after five years through ten years
47,131

 
47,885

Due after ten years
37,423

 
36,668

 
119,507

 
119,560

Mortgage-related securities-FNMA,FHLMC and GNMA
430,120

 
430,834

Total available-for-sale securities
$
549,627

 
$
550,394
Schedule of proceeds, gains and losses from sales of available for sale investment securities
The proceeds, gross gains and losses from sales of available-for-sale investment securities were as follows:
Years ended December 31
2014

 
2013

 
2012

(in millions)
 
 
 
 
 
Proceeds
$
79.6

 
$
71.4

 
$
3.5

Gross gains
2.8

 
1.2

 
—

Gross losses
—

 
—

 
—
Schedule of interest income from available for sale investment securities
Interest income from taxable and non-taxable investment securities were as follows:
Years ended December 31
2014

 
2013

 
2012

(in thousands)
 
 
 
 
 
Taxable
$
11,666

 
$
11,474

 
$
12,309

Non-taxable
279

 
1,621

 
1,513

 
$
11,945

 
$
13,095

 
$
13,822
Schedule of loans receivable
The components of loans receivable were summarized as follows:
December 31
2014

 
2013

(in thousands)
 

 
 

Real estate:
 

 
 

Residential 1-4 family
$
2,044,205

 
$
2,006,007

Commercial real estate
531,917

 
440,443

Home equity line of credit
818,815

 
739,331

Residential land
16,240

 
16,176

Commercial construction
96,438

 
52,112

Residential construction
18,961

 
12,774

Total real estate
3,526,576

 
3,266,843

Commercial
791,757

 
783,388

Consumer
122,656

 
108,722

Total loans
4,440,989

 
4,158,953

Less: Deferred fees and discounts
(6,338
)
 
(8,724
)
          Allowance for loan losses
(45,618
)
 
(40,116
)
Total loans, net
$
4,389,033

 
$
4,110,113
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
 
Consumer
 
Unallo- cated
 
Total
December 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
(987
)
 
—

 
(196
)
 
(81
)
 
—

 
—

 
(1,872
)
 
(2,414
)
 
—

 
(5,550
)
Recoveries
1,180

 
—

 
752

 
469

 
—

 
—

 
1,636

 
889

 
—

 
4,926

Provision
(1,065
)
 
3,895

 
1,197

 
(330
)
 
3,074

 
9

 
(1,550
)
 
2,787

 
(1,891
)
 
6,126

Ending balance
$
4,662

 
$
8,954

 
$
6,982

 
$
1,875

 
$
5,471

 
$
28

 
$
14,017

 
$
3,629

 
$
—

 
$
45,618

Ending balance: individually evaluated for impairment
$
951

 
$
1,845

 
$
46

 
$
1,057

 
$
—

 
$
—

 
$
760

 
$
6

 


 
$
4,665

Ending balance: collectively evaluated for impairment
$
3,711

 
$
7,109

 
$
6,936

 
$
818

 
$
5,471

 
$
28

 
$
13,257

 
$
3,623

 
$
—

 
$
40,953

Financing Receivables:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance
$
2,044,205

 
$
531,917

 
$
818,815

 
$
16,240

 
$
96,438

 
$
18,961

 
$
791,757

 
$
122,656

 


 
$
4,440,989

Ending balance: individually evaluated for impairment
$
22,981

 
$
5,112

 
$
779

 
$
7,850

 
$
—

 
$
—

 
$
13,108

 
$
16

 


 
$
49,846

Ending balance: collectively evaluated for impairment
$
2,021,224

 
$
526,805

 
$
818,036

 
$
8,390

 
$
96,438

 
$
18,961

 
$
778,649

 
$
122,640

 


 
$
4,391,143

December 31, 2013
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
$
6,068

 
$
2,965

 
$
4,493

 
$
4,275

 
$
2,023

 
$
9

 
$
15,931

 
$
4,019

 
$
2,202

 
$
41,985

Charge-offs
(1,162
)
 
—

 
(782
)
 
(485
)
 
—

 
—

 
(3,056
)
 
(2,717
)
 
—

 
(8,202
)
Recoveries
1,881

 
—

 
358

 
868

 
—

 
—

 
1,089

 
630

 
—

 
4,826

Provision
(1,253
)
 
2,094

 
1,160

 
(2,841
)
 
374

 
10

 
1,839

 
435

 
(311
)
 
1,507

Ending balance
$
5,534

 
$
5,059

 
$
5,229

 
$
1,817

 
$
2,397

 
$
19

 
$
15,803

 
$
2,367

 
$
1,891

 
$
40,116

Ending balance: individually evaluated for impairment
$
642

 
$
1,118

 
$
—

 
$
1,332

 
$
—

 
$
—

 
$
2,246

 
$
—

 


 
$
5,338

Ending balance: collectively evaluated for impairment
$
4,892

 
$
3,941

 
$
5,229

 
$
485

 
$
2,397

 
$
19

 
$
13,557

 
$
2,367

 
$
1,891

 
$
34,778

Financing Receivables:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance
$
2,006,007

 
$
440,443

 
$
739,331

 
$
16,176

 
$
52,112

 
$
12,774

 
$
783,388

 
$
108,722

 


 
$
4,158,953

Ending balance: individually evaluated for impairment
$
20,317

 
$
4,604

 
$
1,179

 
$
10,577

 
$
—

 
$
—

 
$
21,225

 
$
19

 


 
$
57,921

Ending balance: collectively evaluated for impairment
$
1,985,690

 
$
435,839

 
$
738,152

 
$
5,599

 
$
52,112

 
$
12,774

 
$
762,163

 
$
108,703

 


 
$
4,101,032
Schedule of changes in allowance for loan losses
Changes in the allowance for loan losses were as follows:
(dollars in thousands)
2014

 
2013

 
2012

Allowance for loan losses, January 1
$
40,116

 
$
41,985

 
$
37,906

Provision for loan losses
6,126

 
1,507

 
12,883

Charge-offs, net of recoveries
 

 
 

 
 

Real estate loans
(1,137
)
 
(678
)
 
3,828

Other loans
1,761

 
4,054

 
4,976

Net charge-offs
624

 
3,376

 
8,804

Allowance for loan losses, December 31
$
45,618

 
$
40,116

 
$
41,985

Ratio of net charge-offs to average total loans
0.01
%
 
0.09
%
 
0.24
%
Schedule of credit risk profile by internally assigned grade for loans
The credit risk profile by internally assigned grade for loans was as follows:
December 31
2014
 
2013
(in thousands)
Commercial
real estate
 
Commercial
construction
 
Commercial
 
Commercial
real estate
 
Commercial
construction
 
Commercial
Grade:
 

 
 

 
 

 
 

 
 

 
 

Pass
$
493,105

 
$
79,312

 
$
743,334

 
$
375,217

 
$
52,112

 
$
703,053

Special mention
5,209

 
—

 
16,095

 
33,436

 
—

 
17,634

Substandard
33,603

 
17,126

 
31,665

 
28,020

 
—

 
59,663

Doubtful
—

 
—

 
663

 
3,770

 
—

 
3,038

Loss
—

 
—

 
—

 
—

 
—

 
—

Total
$
531,917

 
$
96,438

 
$
791,757

 
$
440,443

 
$
52,112

 
$
783,388
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
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

 
$
—

December 31, 2013
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
$
2,728

 
$
622

 
$
15,411

 
$
18,761

 
$
1,987,246

 
$
2,006,007

 
$
—

Commercial real estate
—

 
—

 
3,770

 
3,770

 
436,673

 
440,443

 
—

Home equity line of credit
765

 
312

 
960

 
2,037

 
737,294

 
739,331

 
—

Residential land
184

 
48

 
2,756

 
2,988

 
13,188

 
16,176

 
—

Commercial construction
—

 
—

 
—

 
—

 
52,112

 
52,112

 
—

Residential construction
—

 
—

 
—

 
—

 
12,774

 
12,774

 
—

Commercial
1,668

 
612

 
3,026

 
5,306

 
778,082

 
783,388

 
—

Consumer
436

 
158

 
304

 
898

 
107,824

 
108,722

 
—

Total loans
$
5,781

 
$
1,752

 
$
26,227

 
$
33,760

 
$
4,125,193

 
$
4,158,953

 
$
—
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:
December 31
2014
 
2013
(in thousands)
 
 
 
Real estate:
 

 
 

Residential 1-4 family
$
19,253

 
$
19,679

Commercial real estate
5,112

 
4,439

Home equity line of credit
1,087

 
2,060

Residential land
720

 
3,161

Commercial construction
—

 
—

Residential construction
—

 
—

Commercial
10,053

 
18,781

Consumer
661

 
401

Total nonaccrual loans
$
36,886

 
$
48,521

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
$
13,525

 
$
9,744

Commercial real estate
—

 
—

Home equity line of credit
480

 
171

Residential land
7,130

 
7,476

Commercial construction
—

 
—

Residential construction
—

 
—

Commercial
2,972

 
1,649

Consumer
—

 
—

Total troubled debt restructured loans not included above
$
24,107

 
$
19,040
Schedule of the carrying amount and the total unpaid principal balance of impaired loans
The total carrying amount and the total unpaid principal balance of impaired loans were as follows:
December 31
2014
 
2013
(in thousands)
Recorded
investment
 
Unpaid
principal
balance
 
Related
Allow-
ance
 
Average
recorded
investment
 
Interest
income
recognized*
 
Recorded
investment
 
Unpaid
principal
balance
 
Related
allow-
ance
 
Average
recorded
investment
 
Interest
income
recognized*
With no related allowance recorded
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
$
11,654

 
$
12,987

 
$
—

 
$
9,056

 
$
227

 
$
9,708

 
$
12,144

 
$
—

 
$
11,674

 
$
386

Commercial real estate
571

 
626

 
—

 
194

 
—

 
—

 
—

 
—

 
802

 
—

Home equity line of credit
363

 
606

 
—

 
402

 
5

 
672

 
1,227

 
—

 
623

 
2

Residential land
2,344

 
3,200

 
—

 
2,728

 
172

 
2,622

 
3,612

 
—

 
6,675

 
482

Commercial construction
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential construction
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial
8,235

 
11,471

 
—

 
5,204

 
38

 
3,466

 
4,715

 
—

 
4,837

 
12

Consumer
—

 
—

 
—

 
8

 
—

 
19

 
19

 
—

 
20

 
—

 
23,167

 
28,890

 
—

 
17,592

 
442

 
16,487

 
21,717

 
—

 
24,631

 
882

With an allowance recorded
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
11,327

 
11,347

 
951

 
8,822

 
419

 
6,216

 
6,236

 
642

 
6,455

 
372

Commercial real estate
4,541

 
4,541

 
1,845

 
3,415

 
478

 
4,604

 
4,686

 
1,118

 
5,745

 
152

Home equity line of credit
416

 
420

 
46

 
132

 
6

 
—

 
—

 
—

 
—

 
—

Residential land
5,506

 
5,584

 
1,057

 
6,415

 
484

 
7,452

 
7,623

 
1,332

 
6,844

 
409

Commercial construction
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential construction
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial
4,873

 
5,211

 
760

 
12,089

 
438

 
17,759

 
20,640

 
2,246

 
15,635

 
139

Consumer
16

 
16

 
6

 
9

 
—

 
—

 
—

 
—

 
—

 
—

 
26,679

 
27,119

 
4,665

 
30,882

 
1,825

 
36,031

 
39,185

 
5,338

 
34,679

 
1,072

Total
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Real estate:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential 1-4 family
22,981

 
24,334

 
951

 
17,878

 
646

 
15,924

 
18,380

 
642

 
18,129

 
758

Commercial real estate
5,112

 
5,167

 
1,845

 
3,609

 
478

 
4,604

 
4,686

 
1,118

 
6,547

 
152

Home equity line of credit
779

 
1,026

 
46

 
534

 
11

 
672

 
1,227

 
—

 
623

 
2

Residential land
7,850

 
8,784

 
1,057

 
9,143

 
656

 
10,074

 
11,235

 
1,332

 
13,519

 
891

Commercial construction
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential construction
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial
13,108

 
16,682

 
760

 
17,293

 
476

 
21,225

 
25,355

 
2,246

 
20,472

 
151

Consumer
16

 
16

 
6

 
17

 
—

 
19

 
19

 
—

 
20

 
—

 
$
49,846

 
$
56,009

 
$
4,665

 
$
48,474

 
$
2,267

 
$
52,518

 
$
60,902

 
$
5,338

 
$
59,310

 
$
1,954


* Since loan was classified as impaired.
Schedule of loan modifications
Loan modifications that occurred during 2014 and 2013 were as follows:
Years ended December 31
2014
 
2013
 
Number
 
Outstanding recorded investment
 
Net increase in ALLL (as of period end)
 
Number
 
Outstanding recorded investment
 
Net increase in ALLL (as of period end)
(dollars in thousands)
of
contracts
 
Pre-modification
 
Post-modification
 
 
of
contracts
 
Pre-modification
 
Post-modification
 
Troubled debt restructurings
 
 

 
 

 
 
 
 

 
 

 
 

 
 
Real estate:
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 
Residential 1-4 family
38

 
$
10,680

 
$
10,737

 
$
163

 
34

 
$
8,876

 
$
8,957

 
$
297

Commercial real estate
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Home equity line of credit
8

 
502

 
502

 
42

 
5

 
637

 
390

 
—

Residential land
18

 
4,304

 
4,304

 
242

 
20

 
6,215

 
6,206

 
131

Commercial construction
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential construction
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial
7

 
3,827

 
3,827

 
13

 
7

 
4,646

 
4,646

 
94

Consumer
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
71

 
$
19,313

 
$
19,370

 
$
460

 
66

 
$
20,374

 
$
20,199

 
$
522
Schedule of 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
Loans modified in TDRs that experienced a payment default of 90 days or more in 2014 and 2013, and for which the payment default occurred within one year of the modification, were as follows:
Years ended December 31
2014
 
2013
(dollars in thousands)
Number of
 contracts
 
Recorded
 investment
 
Number of
 contracts
 
Recorded
 investment
Troubled debt restructurings that subsequently defaulted
 
 

 
 

 
 

Real estate:
 

 
 

 
 

 
 

Residential 1-4 family
1

 
$
390

 
—

 
$
—

Commercial real estate
—

 
—

 
—

 
—

Home equity line of credit
—

 
—

 
1

 
67

Residential land
—

 
—

 
—

 
—

Commercial construction
—

 
—

 
—

 
—

Residential construction
—

 
—

 
—

 
—

Commercial
1

 
14

 
2

 
660

Consumer
—

 
—

 
—

 
—

 
2

 
$
404

 
3

 
$
727
Schedule of amortized intangible assets
Changes in carrying value of mortgage servicing rights were as follows:
(in thousands)
Gross
carrying amount
 
Accumulated amortization
 
Valuation allowance
 
Net
carrying amount
December 31, 2014
$
27,185

 
$
(15,436
)
 
$
(209
)
 
$
11,540

December 31, 2013
$
25,644

 
$
(13,706
)
 
$
(251
)
 
$
11,687

Changes related to mortgage servicing rights were as follows:
(in thousands)
2014

 
2013

 
2012

Mortgage servicing rights
 
 
 
 
 
Balance, January 1
$
11,938

 
$
11,316

 
$
8,402

Amount capitalized
1,637

 
2,611

 
4,845

Amortization
(1,731
)
 
(1,802
)
 
(1,750
)
Other-than-temporary impairment
(95
)
 
(187
)
 
(181
)
Carrying amount before valuation allowance, December 31
11,749

 
11,938

 
11,316

Valuation allowance for mortgage servicing rights
 
 
 
 
 
Balance, January 1
251

 
498

 
175

Provision (recovery)
53

 
(60
)
 
504

Other-than-temporary impairment
(95
)
 
(187
)
 
(181
)
Balance, December 31
209

 
251

 
498

Net carrying value of mortgage servicing rights
$
11,540

 
$
11,687

 
$
10,818
Schedule of key assumptions used in estimating fair value
Key assumptions used in estimating the fair value of ASB’s mortgage servicing rights were as follows:
December 31
2014
 
2013
(dollars in thousands)
 
 
 
Unpaid principal balance
$
1,391,030

 
$
1,357,003

Weighted average note rate
4.07
%
 
4.07
%
Weighted average discount rate
9.6
%
 
9.8
%
Weighted average prepayment speed
9.5
%
 
8.6
%
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, 2014
 
 
 
 
 
 
 
 
 
Residential loans
$
2,297

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

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

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

 
 
 
 
 
 
 
 
Tax credit investments
$
8,975

 
Discounted cash flow
 
Present value of expected future cash flows
 
5-93%
 
88%
 
 
 
 
 
Discount rate
 
 
 
7%
Real estate acquired in settlement of loans
$
288

 
Fair value of property or collateral
 
Appraised value less 7% selling cost
 
100%
 
100%
December 31, 2013
 
 
 
 
 
 
 
 
 
Residential loans
$
2,361

 
Fair value of property or collateral
 
Appraised value less 7% selling cost
 
44-96%
 
87%
Home equity lines of credit
170

 
Fair value of property or collateral
 
Appraised value less 7% selling cost
 
45-50%
 
50%
Commercial loans
217

 
Fair value of property or collateral
 
Fair value of business assets
 
 
 
19%
Commercial loans
1,668

 
Discounted cash flow
 
Present value of expected future cash flows
 
 
 
58%
 
 
 
 
 
Discount rate
 
 
 
4.5%
Total loans
$
4,416

 
 
 
 
 
 
 
 

1
Represent percent of outstanding principal balance.
Schedule of sensitivity analysis of fair value of MSR to hypothetical adverse changes
The sensitivity analysis of fair value of MSR to hypothetical adverse changes of 25 and 50 basis points in certain key assumptions was as follows:
December 31
2014
 
2013
(in thousands)
 
 
 
Prepayment rate:
 
 
 
25 basis points adverse rate change
$
(757
)
 
$
(732
)
50 basis points adverse change
(1,524
)
 
(1,492
)
Discount rate:
 
 
 
25 basis points adverse rate change
(140
)
 
(154
)
50 basis points adverse change
(278
)
 
(306
)
Schedule of deposit liabilities
Deposit liabilities. The summarized components of deposit liabilities were as follows:
December 31
2014
 
2013
(dollars in thousands)
Weighted-average stated rate

 
Amount

 
Weighted-average stated rate

 
Amount 

Savings
0.06
%
 
$
1,923,062

 
0.06
%
 
$
1,826,907

Checking
 
 
 
 
 

 
 

Interest-bearing
0.02

 
768,787

 
0.02

 
721,700

Noninterest-bearing
—

 
665,005

 
—

 
643,628

Commercial checking
—

 
677,789

 
—

 
570,790

Money market
0.12

 
158,010

 
0.13

 
182,546

Term certificates
0.83

 
430,762

 
0.80

 
426,906

 
0.11
%
 
$
4,623,415

 
0.11
%
 
$
4,372,477
Schedule of maturities of term certificates
The approximate scheduled maturities of term certificates outstanding at December 31, 2014 were as follows:
(in thousands)
 
2015
$
255,896

2016
55,614

2017
44,315

2018
16,949

2019
54,979

Thereafter
3,009

 
$
430,762
Schedule of interest expense on deposit liabilities by type
Interest expense on deposit liabilities by type of deposit was as follows:
Years ended December 31
2014

 
2013

 
2012

(in thousands)
 
 
 
 
 
Term certificates
$
3,603

 
$
3,702

 
$
4,865

Savings
1,134

 
1,052

 
1,128

Money market
214

 
232

 
319

Interest-bearing checking
126

 
106

 
111

 
$
5,077

 
$
5,092

 
$
6,423
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
 
 

 
 

 
 

December 31, 2014
 
$
191

 
$
—

 
$
191

December 31, 2013
 
145

 
—

 
145

 
 
 
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
December 31, 2014
 
 

 
 

 
 

 
 

Financial institution
 
$
50

 
$
50

 
$
—

 
$
—

Government entities
 
56

 
56

 
—

 
—

Commercial account holders
 
85

 
85

 
—

 
—

Total
 
$
191

 
$
191

 
$
—

 
$
—

December 31, 2013
 
 

 
 

 
 

 
 

Financial institution
 
$
51

 
$
51

 
$
—

 
$
—

Commercial account holders
 
94

 
94

 
—

 
—

Total
 
$
145

 
$
145

 
$
—

 
$
—

As of December 31, 2014, securities sold under agreements to repurchase were summarized as follows:
Maturity
Repurchase liability

 
Weighted-average
interest rate

 
Collateralized by
 mortgage-related
securities and federal
agency obligations at fair value plus
 accrued interest

(dollars in thousands)
 

 
 

 
 

Overnight
$
84,758

 
0.15
%
 
$
114,883

1 to 29 days
—

 
—

 
—

30 to 90 days
—

 
—

 
—

Over 90 days
105,898

1 
2.50

 
115,842

 
$
190,656

 
1.45
%
 
$
230,725

1  
$50.3 million callable quarterly at par until maturity in 2016.
Schedule of securities sold under agreements to repurchase, which provided for repurchase of identical securities
Information concerning securities sold under agreements to repurchase, which provided for the repurchase of identical securities, was as follows:
(dollars in millions)
2014

 
2013

 
2012

Amount outstanding as of December 31
$
191

 
$
145

 
$
146

Average amount outstanding during the year
$
155

 
$
147

 
$
173

Maximum amount outstanding as of any month-end
$
195

 
$
151

 
$
189

Weighted-average interest rate as of December 31
1.45
%
 
1.75
%
 
1.74
%
Weighted-average interest rate during the year
1.67
%
 
1.74
%
 
1.56
%
Weighted-average remaining days to maturity as of December 31
343

 
367

 
489
Schedule of advances from Federal Home Loan Bank
Advances from Federal Home Loan Bank.
FHLB advances are fixed rate for a specific term and consist of the following:
December 31, 2014
Weighted-average
stated rate

 
Amount

 
(dollars in thousands)
 

 
 

 
Due in
 

 
 

 
2015
—
%
 
$
—

 
2016
—

 
—

 
2017
4.28

 
50,000

1 
2018
1.95

 
50,000

 
2019
—

 
—

 
Thereafter
—

 
—

 
 
3.12
%
 
$
100,000

 
1  
Callable quarterly at par until maturity in 2017.
Schedule of notional amounts and fair value of derivatives
The notional amount and fair value of ASB’s derivative financial instruments were as follows:
December 31
2014
 
2013
(in thousands)
Notional amount
 
Fair value
 
Notional amount
 
Fair value
Interest rate lock commitments
$
29,330

 
$
390

 
$
25,070

 
$
464

Forward commitments
32,833

 
(106
)
 
26,018

 
139
Schedule of derivative financial instruments, fair values, and balance sheet location
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
2014
 
2013
(in thousands)
Asset derivatives
 
Liability derivatives
 
Asset derivatives
 
Liability derivatives
Interest rate lock commitments
$
393

 
$
3

 
$
488

 
$
24

Forward commitments
5

 
111

 
141

 
2

 
$
398

 
$
114

 
$
629

 
$
26

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 amount and location of net gains or losses
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
Location of net gains
 
 
 
 
 
 
as Hedging Instruments
(losses) recognized in
 
Years ended December 31
(in thousands)
the Statements of Income
 
2014
 
2013
 
2012
Interest rate lock commitments
Mortgage banking income
 
$
(74
)
 
$
464

 
$
—

Forward commitments
Mortgage banking income
 
(245
)
 
139

 
—

 

 
$
(319
)
 
$
603

 
$
—
Schedule of off balance sheet arrangements
The following is a summary of outstanding off-balance sheet arrangements:
December 31
2014

 
2013

(in thousands)
 
 
 
Unfunded commitments to extend credit:
 

 
 
Home equity line of credit
$
1,089,633

 
$
1,011,334

Commercial and commercial real estate
526,133

 
527,987

Consumer
56,312

 
58,080

Residential 1-4 family
20,524

 
14,241

Commercial and financial standby letters of credit
20,082

 
15,747

Total
$
1,712,684

 
$
1,627,389