Fair value measurements (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

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. For stock in Federal Home Loan Bank, the carrying amount is a reasonable estimate of fair value because it can only be redeemed at par. For bank-owned life insurance, the carrying amount is the cash surrender value of the insurance policies, which 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
	Carrying or notional amount		Quoted prices in active markets for identical assets		Significant  other observable  inputs		Significant unobservable inputs
(in thousands)			(Level 1)		(Level 2)		(Level 3)		Total
June 30, 2017
Financial assets
HEI consolidated
Available-for-sale investment securities	$	1,302,886	$	—	$	1,287,459	$	15,427	$	1,302,886
Stock in Federal Home Loan Bank	11,706		—		11,706		—		11,706
Loans receivable, net	4,693,539		—		5,261		4,836,804		4,842,065
Mortgage servicing rights	9,181		—		—		12,270		12,270
Bank-owned life insurance	146,122		—		146,122		—		146,122
Derivative assets	58,120		47		798		—		845
Hawaiian Electric consolidated
Derivative assets-window forward contracts	15,995		—		615		—		615
Financial liabilities
HEI consolidated
Deposit liabilities	5,724,386		—		5,721,882		—		5,721,882
Short-term borrowings—other than bank	49,789		—		49,789		—		49,789
Other bank borrowings	188,130		—		188,513		—		188,513
Long-term debt, net—other than bank	1,618,647		—		1,740,479		—		1,740,479
Derivative liabilities	8,263		—		246		—		246
Hawaiian Electric consolidated
Short-term borrowings	43,990		—		43,990		—		43,990
Long-term debt, net	1,318,845		—		1,434,528		—		1,434,528
Derivative liabilities-window forward contracts	4,726		—		230		—		230
December 31, 2016
Financial assets
HEI consolidated
Money market funds	$	13,085	$	—	$	13,085	$	—	$	13,085
Available-for-sale investment securities	1,105,182		—		1,089,755		15,427		1,105,182
Stock in Federal Home Loan Bank	11,218		—		11,218		—		11,218
Loans receivable, net	4,701,977		—		13,333		4,839,493		4,852,826
Mortgage servicing rights	9,373		—		—		13,216		13,216
Bank-owned life insurance	143,197		—		143,197		—		143,197
Derivative assets	23,578		—		453		—		453
Financial liabilities
HEI consolidated
Deposit liabilities	5,548,929		—		5,546,644		—		5,546,644
Short-term borrowings—other than bank	—		—		—		—		—
Other bank borrowings	192,618		—		193,991		—		193,991
Long-term debt, net—other than bank	1,619,019		—		1,704,717		—		1,704,717
Derivative liabilities	53,852		129		823		—		952
Hawaiian Electric consolidated
Long-term debt, net	1,319,260		—		1,399,490		—		1,399,490
Derivative liabilities-window forward contracts	20,734		—		743		—		743

Schedule of assets measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis were as follows:

	June 30, 2017						December 31, 2016
	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)	$	—	$	—	$	—	$	—	$	13,085	$	—
Available-for-sale investment securities (bank segment)
Mortgage-related securities-FNMA, FHLMC and GNMA	$	—	$	1,100,876	$	—	$	—	$	897,474	$	—
U.S. Treasury and federal agency obligations	—		186,583		—		—		192,281		—
Mortgage revenue bond	—		—		15,427		—		—		15,427
	$	—	$	1,287,459	$	15,427	$	—	$	1,089,755	$	15,427
Derivative assets
Interest rate lock commitments (bank segment) 1	$	—	$	142	$	—	$	—	$	445	$	—
Forward commitments (bank segment) 1	47		41		—		—		8		—
Window forward contract (electric utility segment)2	—		615		—		—		—		—
	$	47	$	798	$	—	$	—	$	453	$	—
Derivative liabilities
Interest rate lock commitments (bank segment) 1	$	—	$	16	$	—	$	—	$	24	$	—
Forward commitments (bank segment) 1	—		—		—		129		56		—
Window forward contracts (electric utility segment)2	—		230		—		—		743		—
	$	—	$	246	$	—	$	129	$	823	$	—

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.

² Derivatives are included in noncurrent regulatory assets and/or liabilities in the balance sheets.

Schedule of changes in 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:

	Three months ended June 30				Six months ended June 30
Mortgage revenue bond	2017		2016		2017		2016
(in thousands)
Beginning balance	$	15,427	$	—	$	15,427	$	—
Principal payments received	—		—		—		—
Purchases	—		—		—		—
Unrealized gain (loss) included in other comprehensive income	—		—		—		—
Ending balance	$	15,427	$	—	$	15,427	$	—

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
(in thousands)	Balance		Level 1		Level 2		Level 3
June 30, 2017
Loans	$	1,258	$	—	$	—	$	1,258
December 31, 2016
Loans	2,767		—		—		2,767
Real estate acquired in settlement of loans	1,189		—		—		1,189

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 used in the impairment analysis were as follows:

(dollars in thousands)	June 30, 2017			December 31, 2016
Unpaid principal balance	$	1,208,404		$	1,188,380
Weighted average note rate	3.95		%	3.96		%
Weighted average discount rate	10.0		%	9.4		%
Weighted average prepayment speed	8.8		%	8.5		%

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
June 30, 2017
Residential loan	$	448	Fair value of collateral	Appraised value less 7% selling cost		N/A (2)
Commercial loan	810		Sales price	Sales price		N/A (2)
Total loans	$	1,258
December 31, 2016
Residential loans	$	2,468	Sales price	Sales price	95-100%	97%
Residential loans	287		Fair value of property or collateral	Appraised value less 7% selling cost	42-65%	61%
Home equity lines of credit	12		Fair value of property or collateral	Appraised value less 7% selling cost		N/A (2)
Total loans	$	2,767
Real estate acquired in settlement of loans	$	1,189	Fair value of property or collateral	Appraised value less 7% selling cost	100%	100%

(1) Represent percent of outstanding principal balance.

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