Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of estimated fair values of certain of the Company's financial instruments

The following table presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments. For stock in Federal Home Loan Bank of Seattle, the carrying amount is a reasonable estimate of fair value. For financial liabilities such as noninterest-bearing demand, interest-bearing demand, and savings and money market deposits, the carrying amount is a reasonable estimate of fair value as these liabilities have no stated maturity.



			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, 2014
Financial assets
Money market funds	$	10	$	—	$	10	$	—	$	10
Available-for-sale investment securities	550,394		—		550,394		—		550,394
Stock in Federal Home Loan Bank of Seattle	69,302		—		69,302		—		69,302
Loans receivable, net	4,397,457		—		—		4,578,822		4,578,822
Derivative assets	30,120		—		398		—		398
Financial liabilities
Deposit liabilities	4,623,415		—		4,623,773		—		4,623,773
Short-term borrowings—other than bank	118,972		—		118,972		—		118,972
Other bank borrowings	290,656		—		298,837		—		298,837
Long-term debt, net—other than bank	1,506,546		—		1,622,736		—		1,622,736
The Utilities' long-term debt, net (included in amount above)	1,206,546		—		1,313,893		—		1,313,893
Derivative liabilities	32,043		71		43		—		114
December 31, 2013
Financial assets
Money market funds	$	10	$	—	$	10	$	—	$	10
Available-for-sale investment securities	529,007		—		529,007		—		529,007
Stock in Federal Home Loan Bank of Seattle	92,546		—		92,546		—		92,546
Loans receivable, net	4,115,415		—		—		4,211,290		4,211,290
Derivative assets	46,356		98		531		—		629
Financial liabilities
Deposit liabilities	4,372,477		—		4,374,377		—		4,374,377
Short-term borrowings—other than bank	105,482		—		105,482		—		105,482
Other bank borrowings	244,514		—		256,029		—		256,029
Long-term debt, net—other than bank	1,492,945		—		1,508,425		—		1,508,425
The Utilities' long-term debt, net (included in amount above)	1,217,945		—		1,228,966		—		1,228,966
Derivative liabilities	4,732		—		26		—		26

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	2014						2013
	Fair value measurements using						Fair value measurements using
(in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Money market funds (“other” segment)	$	—	$	10	$	—	$	—	$	10	$	—
Available-for-sale investment securities (bank segment)
Mortgage-related securities-FNMA, FHLMC and GNMA	$	—	$	430,834	$	—	$	—	$	369,444	$	—
U.S. Treasury and federal agency obligations	—		119,560		—		—		80,973		—
Municipal bonds	—		—		—		—		78,590		—
	$	—	$	550,394	$	—	$	—	$	529,007	$	—
Derivative assets ¹
Interest rate lock commitments	$	—	$	393	$	—	$	—	$	488	$	—
Forward commitments	—		5		—		98		43		—
	$	—	$	398	$	—	$	98	$	531	$	—
Derivative liabilities ¹
Interest rate lock commitments	$	—	$	3	$	—	$	—	$	24	$	—
Forward commitments	71		40		—		—		2		—
	$	71	$	43	$	—	$	—	$	26	$	—


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

Schedule of assets measured at fair value on a nonrecurring basis

Assets measured at fair value on a nonrecurring basis were as follows:



			Fair value measurements using
(in millions)	Balance		Level 1		Level 2		Level 3
December 31, 2014
Loans	$	2	$	—	$	—	$	2
Tax credit investments	9		—		—		9
Real estate acquired in settlement of loans	—		—		—		—
December 31, 2013
Loans	4		—		—		4
Real estate acquired in settlement of loans	—		—		—		—

Schedule of significant unobservable inputs used in the fair value measurement

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 assets held in various trusts are measured at fair value on a recurring basis

Assets held in various trusts for the retirement benefit plans are measured at fair value on a recurring basis and were as follows:



	Pension benefits									Other benefits
				Fair value measurements using									Fair value measurements using
(in millions)	December 31			Level 1		Level 2		Level 3		December 31			Level 1		Level 2		Level 3
2014
Equity securities	$	649		$	649	$	—	$	—	$	99		$	99	$	—	$	—
Equity index funds	132			132		—		—		19			19		—		—
Fixed income securities	428			121		307		—		49			43		6		—
Pooled and mutual funds and other	82			1		81		—		14			3		11		—
Total	$	1,291		$	903	$	388	$	—	$	181		$	164	$	17	$	—
Cash, receivables and payables, net	(25		)							(1		)
Fair value of plan assets	$	1,266								$	180
2013
Equity securities	$	672		$	672	$	—	$	—	$	102		$	102	$	—	$	—
Equity index funds	127			127		—		—		19			19		—		—
Fixed income securities	350			122		228		—		46			40		6		—
Pooled and mutual funds and other	84			—		83		1		13			—		13		—
Total	1,233			$	921	$	311	$	1	180			$	161	$	19	$	—
Cash, receivables and payables, net	(46		)							(1		)
Fair value of plan assets	$	1,187								$	179

Schedule of changes in Level 3 assets

For 2014 and 2013, the changes in Level 3 assets were as follows:



	2014						2013
(in thousands)	Pension benefits			Other benefits			Pension benefits			Other benefits
Balance, January 1	$	580		$	18		$	581		$	18
Realized and unrealized losses	(203		)	(6		)	(1		)	—
Purchases and settlements, net	(282		)	(8		)	—			—
Balance, December 31	$	95		$	4		$	580		$	18