XML 63 R43.htm IDEA: XBRL DOCUMENT

Bank segment (HEI only) (Tables)

12 Months Ended

Dec. 31, 2020

Statements of Income and Comprehensive Income Data


Years ended December 31	2020		2019		2018
(in thousands)
Interest and dividend income
Interest and fees on loans	$	214,134	$	233,632	$	220,463
Interest and dividends on investment securities	30,529		32,922		37,762
Total interest and dividend income	244,663		266,554		258,225
Interest expense
Interest on deposit liabilities	10,654		16,830		13,991
Interest on other borrowings	460		1,610		1,548
Total interest expense	11,114		18,440		15,539
Net interest income	233,549		248,114		242,686
Provision for credit losses	50,811		23,480		14,745
Net interest income after provision for credit losses	182,738		224,634		227,941
Noninterest income
Fees from other financial services	16,447		19,275		18,937
Fee income on deposit liabilities	16,059		20,877		21,311
Fee income on other financial products	6,381		6,507		7,052
Bank-owned life insurance	6,483		7,687		5,057
Mortgage banking income	23,734		4,943		1,493
Gain on sale of real estate	—		10,762		—
Gain on sale of investment securities, net	9,275		653		—
Other income, net	(256)		2,074		2,200
Total noninterest income	78,123		72,778		56,050
Noninterest expense
Compensation and employee benefits	104,443		103,009		98,387
Occupancy	21,573		21,272		17,073
Data processing	14,769		15,306		14,268
Services	11,121		10,239		10,847
Equipment	9,001		8,760		7,186
Office supplies, printing and postage	4,623		5,512		6,134
Marketing	3,435		4,490		3,567
FDIC insurance	2,342		1,204		2,713
Other expense1	20,283		15,586		17,238
Total noninterest expense	191,590		185,378		177,413
Income before income taxes	69,271		112,034		106,578
Income taxes	11,688		23,061		24,069
Net income	57,583		88,973		82,509
Other comprehensive income (loss), net of taxes	23,608		29,406		(7,119)
Comprehensive income	$	81,191	$	118,379	$	75,390

1 2020 includes approximately $5.1 million of certain direct and incremental COVID-19 related costs. For 2020, these costs, which have been recorded in Other expense, include $2.5 million of compensation expense and $2.0 million of enhanced cleaning and sanitation costs.

Reconciliation to amounts per HEI Consolidated Statements of Income*:


Years ended December 31	2020		2019		2018
(in thousands)
Interest and dividend income	$	244,663	$	266,554	$	258,225
Noninterest income	78,123		72,778		56,050
Less: Gain on sale of real estate	—		10,762		—
Less: Gain on sale of investment securities, net	9,275		653		—
*Revenues-Bank	313,511		327,917		314,275
Total interest expense	11,114		18,440		15,539
Provision for credit losses	50,811		23,480		14,745
Noninterest expense	191,590		185,378		177,413
Less: Retirement defined benefits expense (credit)—other than service costs	1,813		(472)		1,657
Add: Gain on sale of real estate	—		10,762		—
*Expenses-Bank	251,702		217,008		206,040
*Operating income-Bank	61,809		110,909		108,235
Add back: Retirement defined benefits expense (credit)—other than service costs	1,813		(472)		1,657
Add back: Gain on sale of investment securities, net	9,275		653		—
Income before income taxes	$	69,271	$	112,034	$	106,578

Schedule of statements of comprehensive income data

Statements of Income and Comprehensive Income Data


Years ended December 31	2020		2019		2018
(in thousands)
Interest and dividend income
Interest and fees on loans	$	214,134	$	233,632	$	220,463
Interest and dividends on investment securities	30,529		32,922		37,762
Total interest and dividend income	244,663		266,554		258,225
Interest expense
Interest on deposit liabilities	10,654		16,830		13,991
Interest on other borrowings	460		1,610		1,548
Total interest expense	11,114		18,440		15,539
Net interest income	233,549		248,114		242,686
Provision for credit losses	50,811		23,480		14,745
Net interest income after provision for credit losses	182,738		224,634		227,941
Noninterest income
Fees from other financial services	16,447		19,275		18,937
Fee income on deposit liabilities	16,059		20,877		21,311
Fee income on other financial products	6,381		6,507		7,052
Bank-owned life insurance	6,483		7,687		5,057
Mortgage banking income	23,734		4,943		1,493
Gain on sale of real estate	—		10,762		—
Gain on sale of investment securities, net	9,275		653		—
Other income, net	(256)		2,074		2,200
Total noninterest income	78,123		72,778		56,050
Noninterest expense
Compensation and employee benefits	104,443		103,009		98,387
Occupancy	21,573		21,272		17,073
Data processing	14,769		15,306		14,268
Services	11,121		10,239		10,847
Equipment	9,001		8,760		7,186
Office supplies, printing and postage	4,623		5,512		6,134
Marketing	3,435		4,490		3,567
FDIC insurance	2,342		1,204		2,713
Other expense1	20,283		15,586		17,238
Total noninterest expense	191,590		185,378		177,413
Income before income taxes	69,271		112,034		106,578
Income taxes	11,688		23,061		24,069
Net income	57,583		88,973		82,509
Other comprehensive income (loss), net of taxes	23,608		29,406		(7,119)
Comprehensive income	$	81,191	$	118,379	$	75,390

Reconciliation to amounts per HEI Consolidated Statements of Income*:


Years ended December 31	2020		2019		2018
(in thousands)
Interest and dividend income	$	244,663	$	266,554	$	258,225
Noninterest income	78,123		72,778		56,050
Less: Gain on sale of real estate	—		10,762		—
Less: Gain on sale of investment securities, net	9,275		653		—
*Revenues-Bank	313,511		327,917		314,275
Total interest expense	11,114		18,440		15,539
Provision for credit losses	50,811		23,480		14,745
Noninterest expense	191,590		185,378		177,413
Less: Retirement defined benefits expense (credit)—other than service costs	1,813		(472)		1,657
Add: Gain on sale of real estate	—		10,762		—
*Expenses-Bank	251,702		217,008		206,040
*Operating income-Bank	61,809		110,909		108,235
Add back: Retirement defined benefits expense (credit)—other than service costs	1,813		(472)		1,657
Add back: Gain on sale of investment securities, net	9,275		653		—
Income before income taxes	$	69,271	$	112,034	$	106,578

Schedule of balance sheets data

Balance Sheets Data


December 31			2020				2019
(in thousands)
Assets
Cash and due from banks			$	178,422			$	129,770
Interest-bearing deposits			114,304				48,628
Cash and cash equivalents			292,726				178,398
Investment securities
Available-for-sale, at fair value			1,970,417				1,232,826
Held-to-maturity, at amortized cost (fair value of $229,963 and $143,467 at December 31, 2020 and 2019, respectively)			226,947				139,451
Stock in Federal Home Loan Bank, at cost			8,680				8,434
Loans held for investment			5,333,843				5,121,176
Allowance for credit losses			(101,201)				(53,355)
Net loans			5,232,642				5,067,821
Loans held for sale, at lower of cost or fair value			28,275				12,286
Other			554,656				511,611
Goodwill			82,190				82,190
Total assets			$	8,396,533			$	7,233,017
Liabilities and shareholder’s equity
Deposit liabilities–noninterest-bearing			$	2,598,500			$	1,909,682
Deposit liabilities–interest-bearing			4,788,457				4,362,220
Other borrowings			89,670				115,110
Other			183,731				146,954
Total liabilities			7,660,358				6,533,966
Commitments and contingencies
Common stock			1				1
Additional paid in capital			351,758				349,453
Retained earnings			369,470				358,259
Accumulated other comprehensive income (loss), net of taxes
Net unrealized gains (losses) on securities	$	19,986			$	2,481
Retirement benefit plans	(5,040)		14,946		(11,143)		(8,662)
Total shareholder’s equity			736,175				699,051
Total liabilities and shareholder’s equity			$	8,396,533			$	7,233,017


December 31	2020		2019
(in thousands)
Other assets
Bank-owned life insurance	$	163,265	$	157,465
Premises and equipment, net	206,134		204,449

Accrued interest receivable	24,616		19,365
Mortgage servicing rights	10,020		9,101
Low-income housing investments	83,435		66,302

Other	67,186		54,929
	$	554,656	$	511,611
Other liabilities
Accrued expenses	$	62,694	$	45,822
Federal and state income taxes payable	6,582		14,996
Cashier’s checks	38,011		23,647
Advance payments by borrowers	10,207		10,486
Other	66,237		52,003
	$	183,731	$	146,954

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 unrealized gains		Gross unrealized losses		Estimated fair value		Less than 12 months					12 months or longer
(dollars in thousands)	Amortized cost								Number of issues	Fair value		Amount		Number of issues	Fair value		Amount
December 31, 2020
Available-for-sale
U.S. Treasury and federal agency obligations	$	60,260	$	2,062	$	—	$	62,322	—	$	—	$	—	—	$	—	$	—
Mortgage-backed securities*	1,825,893		26,817		(3,151)		1,849,559		22	373,924		(3,151)		—	—		—
Corporate bonds	29,776		1,575		—		31,351		—	—		—		—	—		—
Mortgage revenue bonds	27,185		—		—		27,185		—	—		—		—	—		—
	$	1,943,114	$	30,454	$	(3,151)	$	1,970,417	22	$	373,924	$	(3,151)	—	$	—	$	—
Held-to-maturity
Mortgage-backed securities*	$	226,947	$	3,846	$	(830)	$	229,963	7	$	114,152	$	(830)	—	$	—	$	—
	$	226,947	$	3,846	$	(830)	$	229,963	7	$	114,152	$	(830)	—	$	—	$	—
December 31, 2019
Available-for-sale
U.S. Treasury and federal agency obligations	$	117,255	$	652	$	(120)	$	117,787	2	$	4,110	$	(11)	3	$	27,637	$	(109)
Mortgage-backed securities*	1,024,892		6,000		(4,507)		1,026,385		19	152,071		(819)		75	318,020		(3,688)
Corporate bonds	58,694		1,363		—		60,057		—	—		—		—	—		—
Mortgage revenue bonds	28,597		—		—		28,597		—	—		—		—	—		—
	$	1,229,438	$	8,015	$	(4,627)	$	1,232,826	21	$	156,181	$	(830)	78	$	345,657	$	(3,797)
Held-to-maturity
Mortgage-backed securities*	$	139,451	$	4,087	$	(71)	$	143,467	1	$	12,986	$	(71)	—	$	—	$	—
	$	139,451	$	4,087	$	(71)	$	143,467	1	$	12,986	$	(71)	—	$	—	$	—

* Issued or guaranteed by U.S. Government agencies or sponsored agencies

Schedule of contractual maturities of available-for-sale securities

The contractual maturities of investment securities were as follows:


	Amortized		Fair
December 31, 2020	Cost		value
(in thousands)
Available-for-sale
Due in one year or less	$	16,974	$	17,098
Due after one year through five years	41,551		43,285
Due after five years through ten years	31,511		33,290
Due after ten years	27,185		27,185
	117,221		120,858
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies	1,825,893		1,849,559
Total available-for-sale securities	$	1,943,114	$	1,970,417
Held-to-maturity
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies	$	226,947	$	229,963
Total held-to-maturity securities	$	226,947	$	229,963

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 securities were as follows:


Years ended December 31	2020		2019		2018
(in thousands)
Proceeds	$	169,157	$	19,810	$	—
Gross gains	9,275		653		—
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	2020		2019		2018
(in thousands)
Taxable	$	29,760	$	31,848	$	37,153
Non-taxable	769		1,074		609
	$	30,529	$	32,922	$	37,762

Schedule of loans receivable

The components of loans were summarized as follows:


December 31	2020		2019
(in thousands)
Real estate:
Residential 1-4 family	$	2,144,239	$	2,178,135
Commercial real estate	983,865		824,830
Home equity line of credit	963,578		1,092,125
Residential land	15,617		14,704
Commercial construction	121,424		70,605
Residential construction	11,022		11,670
Total real estate	4,239,745		4,192,069
Commercial	936,748		670,674
Consumer	168,733		257,921
Total loans	5,345,226		5,120,664
Less: Deferred fees and discounts	(11,383)		512
Allowance for credit losses	(101,201)		(53,355)
Total loans, net	$	5,232,642	$	5,067,821

Schedule of allowance for loan losses

The allowance for credit losses (balances and changes) and financing receivables by portfolio segment 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			Total
December 31, 2020
Allowance for credit losses:
Beginning balance, prior to adoption of ASU No. 2016-13	$	2,380		$	15,053		$	6,922		$	449		$	2,097		$	3		$	10,245		$	16,206		$	53,355
Impact of adopting ASU No. 2016-13	2,150			208			(541)			(64)			289			14			922			16,463			19,441
Charge-offs	(7)			—			(77)			(351)			—			—			(5,819)			(19,900)			(26,154)
Recoveries	394			—			63			38			—			—			872			3,381			4,748
Net (charge-offs) recoveries	387			—			(14)			(313)			—			—			(4,947)			(16,519)			(21,406)
Provision	(317)			20,346			446			537			1,763			(6)			19,242			7,800			49,811
Ending balance	$	4,600		$	35,607		$	6,813		$	609		$	4,149		$	11		$	25,462		$	23,950		$	101,201
Average loans outstanding	$	2,148,848		$	861,096		$	1,060,444		$	13,799		$	93,740		$	10,703		$	935,663		$	215,994		$	5,340,287
Net charge-offs (recoveries) to average loans	(0.02)		%	—		%	—		%	2.27		%	—		%	—		%	0.53		%	7.65		%	0.40		%






December 31, 2019
Allowance for credit losses:
Beginning balance	$	1,976		$	14,505		$	6,371		$	479		$	2,790		$	4		$	9,225		$	16,769		$	52,119
Charge-offs	(26)			—			(144)			(4)			—			—			(6,811)			(21,677)			(28,662)
Recoveries	854			—			17			229			—			—			2,351			2,967			6,418
Net (charge-offs) recoveries	828			—			(127)			225			—			—			(4,460)			(18,710)			(22,244)
Provision	(424)			548			678			(255)			(693)			(1)			5,480			18,147			23,480
Ending balance	$	2,380		$	15,053		$	6,922		$	449		$	2,097		$	3		$	10,245		$	16,206		$	53,355
Average loans outstanding	$	2,164,759		$	781,531		$	1,043,479		$	14,065		$	81,937		$	10,513		$	620,206		$	270,340		$	4,986,830
Net charge-offs (recoveries) to average loans	(0.04)		%	—		%	0.01		%	(1.60		%)	—		%	—		%	0.72		%	6.92		%	0.45		%
Ending balance: individually evaluated for impairment	$	898		$	2		$	322		$	—		$	—		$	—		$	1,015		$	454		$	2,691
Ending balance: collectively evaluated for impairment	$	1,482		$	15,051		$	6,600		$	449		$	2,097		$	3		$	9,230		$	15,752		$	50,664
Financing Receivables:
Ending balance	$	2,178,135		$	824,830		$	1,092,125		$	14,704		$	70,605		$	11,670		$	670,674		$	257,921		$	5,120,664
Ending balance: individually evaluated for impairment	$	15,600		$	1,048		$	12,073		$	3,091		$	—		$	—		$	8,418		$	507		$	40,737
Ending balance: collectively evaluated for impairment	$	2,162,535		$	823,782		$	1,080,052		$	11,613		$	70,605		$	11,670		$	662,256		$	257,414		$	5,079,927
December 31, 2018
Allowance for credit losses:
Beginning balance	$	2,902		$	15,796		$	7,522		$	896		$	4,671		$	12		$	10,851		$	10,987		$	53,637
Charge-offs	(128)			—			(353)			(18)			—			—			(2,722)			(17,296)			(20,517)
Recoveries	74			—			257			179			—			—			2,136			1,608			4,254
Net (charge-offs) recoveries	(54)			—			(96)			161			—			—			(586)			(15,688)			(16,263)
Provision	(872)			(1,291)			(1,055)			(578)			(1,881)			(8)			(1,040)			21,470			14,745
Ending balance	$	1,976		$	14,505		$	6,371		$	479		$	2,790		$	4		$	9,225		$	16,769		$	52,119
Average loans outstanding	$	2,105,674		$	745,186		$	944,065		$	14,935		$	114,969		$	14,959		$	579,133		$	240,414		$	4,759,335
Net charge-offs (recoveries) to average loans	—		%	—		%	0.01		%	(1.08		%)	—		%	—		%	0.10		%	6.53		%	0.34		%
Ending balance: individually evaluated for impairment	$	876		$	7		$	701		$	6		$	—		$	—		$	628		$	4		$	2,222
Ending balance: collectively evaluated for impairment	$	1,100		$	14,498		$	5,670		$	473		$	2,790		$	4		$	8,597		$	16,765		$	49,897
Financing Receivables:
Ending balance	$	2,143,397		$	748,398		$	978,237		$	13,138		$	92,264		$	14,307		$	587,891		$	266,002		$	4,843,634
Ending balance: individually evaluated for impairment	$	16,494		$	915		$	14,800		$	2,059		$	—		$	—		$	5,340		$	89		$	39,697
Ending balance: collectively evaluated for impairment	$	2,126,903		$	747,483		$	963,437		$	11,079		$	92,264		$	14,307		$	582,551		$	265,913		$	4,803,937

Schedule of allowance for loan commitments

Allowance for loan commitments. The allowance for loan commitments by portfolio segment were as follows:


(in thousands)	Home equity line of credit		Commercial construction		Commercial loans		Total
Year ended December 31, 2020
Allowance for loan commitments:
Beginning balance, prior to adoption of ASU No. 2016-13	$	392	$	931	$	418	$	1,741
Impact of adopting ASU No. 2016-13	(92)		1,745		(94)		1,559
Provision	—		324		676		1,000
Ending balance	$	300	$	3,000	$	1,000	$	4,300

Schedule of credit risk profile by internally assigned grade for loans

The credit risk profile by vintage date based on payment activity or internally assigned grade for loans was as follows:


	Term Loans by Origination Year												Revolving Loans
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving loans		Converted to term loans		Total
December 31, 2020
Residential 1-4 family
Current	$	567,282	$	218,988	$	111,243	$	203,916	$	184,888	$	849,788	$	—	$	—	$	2,136,105
30-59 days past due	—		—		—		—		—		2,629		—		—		2,629
60-89 days past due	—		476		—		—		—		2,314		—		—		2,790
Greater than 89 days past due	—		—		—		353		—		2,362		—		—		2,715
	567,282		219,464		111,243		204,269		184,888		857,093		—		—		2,144,239
Home equity line of credit
Current	—		—		—		—		—		—		927,106		33,228		960,334
30-59 days past due	—		—		—		—		—		—		552		298		850
60-89 days past due	—		—		—		—		—		—		267		75		342
Greater than 89 days past due	—		—		—		—		—		—		1,463		589		2,052
	—		—		—		—		—		—		929,388		34,190		963,578
Residential land
Current	8,357		3,427		1,598		939		22		272		—		—		14,615
30-59 days past due	—		—		—		—		—		702		—		—		702
60-89 days past due	—		—		—		—		—		—		—		—		—
Greater than 89 days past due	—		—		—		—		—		300		—		—		300
	8,357		3,427		1,598		939		22		1,274		—		—		15,617
Residential construction
Current	6,919		3,093		385		625		—		—		—		—		11,022
30-59 days past due	—		—		—		—		—		—		—		—		—
60-89 days past due	—		—		—		—		—		—		—		—		—
Greater than 89 days past due	—		—		—		—		—		—		—		—		—
	6,919		3,093		385		625		—		—		—		—		11,022
Consumer
Current	28,818		67,159		37,072		7,207		293		348		18,351		3,758		163,006
30-59 days past due	406		1,085		727		155		4		—		138		90		2,605
60-89 days past due	191		549		427		165		3		—		97		59		1,491
Greater than 89 days past due	131		532		409		119		7		—		262		171		1,631
	29,546		69,325		38,635		7,646		307		348		18,848		4,078		168,733
Commercial real estate
Pass	270,603		63,301		62,168		28,432		55,089		155,654		11,000		—		646,247
Special Mention	10,261		36,405		57,952		33,763		68,287		48,094		—		—		254,762
Substandard	—		14,720		4,181		1,892		4,423		57,640		—		—		82,856
Doubtful	—		—		—		—		—		—		—		—		—
	280,864		114,426		124,301		64,087		127,799		261,388		11,000		—		983,865
Commercial construction
Pass	14,480		31,965		26,990		—		5,562		—		22,517		—		101,514
Special Mention	1,910		—		—		18,000		—		—		—		—		19,910
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
	16,390		31,965		26,990		18,000		5,562		—		22,517		—		121,424
Commercial
Pass	392,088		117,791		75,533		29,211		12,520		35,770		74,520		11,004		748,437
Special Mention	37,836		23,087		1,920		6,990		30,264		13,250		31,362		11,218		155,927
Substandard	304		7,785		2,043		4,017		7,542		3,113		5,265		1,928		31,997
Doubtful	—		—		—		—		—		—		387		—		387
	430,228		148,663		79,496		40,218		50,326		52,133		111,534		24,150		936,748
Total loans	$	1,339,586	$	590,363	$	382,648	$	335,784	$	368,904	$	1,172,236	$	1,093,287	$	62,418	$	5,345,226

Revolving loans converted to term loans during 2020 in the commercial, home equity line of credit and consumer portfolios were $14.4 million, $11.3 million and $2.8 million, respectively.

The credit risk profile by internally assigned grade for loans was as follows:


December 31, 2019
(in thousands)	Commercial real estate		Commercial construction		Commercial		Total
Grade:
Pass	$	756,747	$	68,316	$	621,657	$	1,446,720
Special mention	4,451		—		29,921		34,372
Substandard	63,632		2,289		19,096		85,017
Doubtful	—		—		—		—
Loss	—		—		—		—
Total	$	824,830	$	70,605	$	670,674	$	1,566,109

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, 2020
Real estate:
Residential 1-4 family	$	2,629	$	2,790	$	2,715	$	8,134	$	2,136,105	$	2,144,239	$	—
Commercial real estate	—		488		—		488		983,377		983,865		—
Home equity line of credit	850		342		2,052		3,244		960,334		963,578		—
Residential land	702		—		300		1,002		14,615		15,617		—
Commercial construction	—		—		—		—		121,424		121,424		—
Residential construction	—		—		—		—		11,022		11,022		—
Commercial	608		300		132		1,040		935,708		936,748		—
Consumer	2,605		1,491		1,631		5,727		163,006		168,733		—
Total loans	$	7,394	$	5,411	$	6,830	$	19,635	$	5,325,591	$	5,345,226	$	—
December 31, 2019
Real estate:
Residential 1-4 family	$	2,588	$	290	$	1,808	$	4,686	$	2,173,449	$	2,178,135	$	—
Commercial real estate	—		—		—		—		824,830		824,830		—
Home equity line of credit	813		—		2,117		2,930		1,089,195		1,092,125		—
Residential land	—		—		25		25		14,679		14,704		—
Commercial construction	—		—		—		—		70,605		70,605		—
Residential construction	—		—		—		—		11,670		11,670		—
Commercial	1,077		311		172		1,560		669,114		670,674		—
Consumer	4,386		3,257		2,907		10,550		247,371		257,921		—
Total loans	$	8,864	$	3,858	$	7,029	$	19,751	$	5,100,913	$	5,120,664	$	—

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 were as follows:


	December 31, 2020						December 31, 2019
(in thousands)	With a Related ACL		Without a Related ACL		Total		Total
Real estate:
Residential 1-4 family	$	8,991	$	2,835	$	11,826	$	11,395
Commercial real estate	15,847		2,875		18,722		195
Home equity line of credit	5,791		1,567		7,358		6,638
Residential land	108		300		408		448
Commercial construction	—		—		—		—
Residential construction	—		—		—		—
Commercial	1,819		3,328		5,147		5,947
Consumer	3,935		—		3,935		5,113
Total	$	36,491	$	10,905	$	47,396	$	29,736

The credit risk profile based on loans whose terms have been modified and accruing interest were as follows:


(in thousands)	December 31, 2020		December 31, 2019
Real estate:
Residential 1-4 family	$	7,932	$	9,869
Commercial real estate	3,281		853
Home equity line of credit	8,148		10,376
Residential land	1,555		2,644
Commercial construction	—		—
Residential construction	—		—
Commercial	6,108		2,614
Consumer	54		57
Total troubled debt restructured loans accruing interest	$	27,078	$	26,413

Schedule of loan modifications

Loan modifications that occurred during 2020, 2019, and 2018 were as follows:



Years ended	December 31, 2020					December 31, 2019
(dollars in thousands)	Number of contracts	Outstanding recorded investment (as of period end)1		Related allowance (as of period end)		Number of contracts	Outstanding recorded investment (as of period end)1		Related allowance (as of period end)

Real estate:
Residential 1-4 family	1	$	144	$	6	11	$	1,770	$	190
Commercial real estate	6	20,714		4,439		—	—		—
Home equity line of credit	3	85		11		3	442		73
Residential land	4	668		54		3	1,086		—
Commercial construction	—	—		—		—	—		—
Residential construction	—	—		—		—	—		—
Commercial	54	5,380		869		8	5,523		417
Consumer	—	—		—		—	—		—
	68	$	26,991	$	5,379	25	$	8,821	$	680

Year ended	December 31, 2018
(dollars in thousands)	Number of contracts	Outstanding recorded investment (as of period end)1		Related allowance (as of period end)
Real estate:
Residential 1-4 family	3	$	566	$	26
Commercial real estate	—	—		—
Home equity line of credit	53	6,659		578
Residential land	2	1,338		—
Commercial construction	—	—		—
Residential construction	—	—		—
Commercial	12	2,165		211
Consumer	—	—		—
	70	$	10,728	$	815

1 The period end balances reflect all paydowns and charge-offs since the modification period. TDRs fully paid off, charged-off, or foreclosed upon by period end are not included.

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 2020, 2019, and 2018 and for which the payment default occurred within one year of the modification, were as follows:


Years ended December 31	2020			2019			2018
(dollars in thousands)	Number of contracts	Recorded investment		Number of contracts	Recorded investment		Number of contracts	Recorded investment
Troubled debt restructurings that subsequently defaulted
Real estate:
Residential 1-4 family	—	$	—	—	$	—	—	$	—
Commercial real estate	—	—		—	—		—	—
Home equity line of credit	—	—		—	—		1	81
Residential land	—	—		—	—		—	—
Commercial construction	—	—		—	—		—	—
Residential construction	—	—		—	—		—	—
Commercial	—	—		—	—		1	246
Consumer	—	—		—	—		—	—
	—	$	—	—	$	—	2	$	327

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

Loans considered collateral-dependent were as follows:

December 31, 2020

Amortized cost

Collateral type

(in thousands)

Real estate:

Residential 1-4 family

2,541

Residential real estate property

Commercial real estate

2,875

Commercial real estate property

Home equity line of credit

1,567

Residential real estate property

Residential land

300

Residential real estate property

Total real estate

7,283

Commercial

934

Business assets

Total

8,217

The total carrying amount and the total unpaid principal balance of impaired loans and ASB’s average recorded investment of, and interest income recognized from, impaired loans were as follows:


December 31	2019						2019				2018
(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:
Residential 1-4 family	$	6,817	$	7,207	$	—	$	8,169	$	907	$	8,595	$	445
Commercial real estate	195		200		—		16		—		—		—
Home equity line of credit	1,984		2,135		—		2,020		84		2,206		75
Residential land	3,091		3,294		—		2,662		129		1,532		40
Commercial construction	—		—		—		—		—		—		—
Residential construction	—		—		—		—		—		—		—
Commercial	1,948		2,285		—		4,534		276		3,275		28
Consumer	2		2		—		21		4		22		—
	14,037		15,123		—		17,422		1,400		15,630		588
With an allowance recorded
Real estate:
Residential 1-4 family	8,783		8,835		898		8,390		359		8,878		363
Commercial real estate	853		853		2		886		37		982		42
Home equity line of credit	10,089		10,099		322		11,319		567		10,617		440
Residential land	—		—		—		27		—		37		3
Commercial construction	—		—		—		—		—		—		—
Residential construction	—		—		—		—		—		—		—
Commercial	6,470		6,470		1,015		6,990		132		1,789		122
Consumer	505		505		454		360		24		57		4
	26,700		26,762		2,691		27,972		1,119		22,360		974
Total
Real estate:
Residential 1-4 family	15,600		16,042		898		16,559		1,266		17,473		808
Commercial real estate	1,048		1,053		2		902		37		982		42
Home equity line of credit	12,073		12,234		322		13,339		651		12,823		515
Residential land	3,091		3,294		—		2,689		129		1,569		43
Commercial construction	—		—		—		—		—		—		—
Residential construction	—		—		—		—		—		—		—
Commercial	8,418		8,755		1,015		11,524		408		5,064		150
Consumer	507		507		454		381		28		79		4
	$	40,737	$	41,885	$	2,691	$	45,394	$	2,519	$	37,990	$	1,562

* Since loan was classified as impaired.

Schedule of amortized intangible assets

Changes in the carrying value of MSRs were as follows:


(in thousands)	Gross carrying amount1		Accumulated amortization1		Valuation allowance		Net carrying amount
December 31, 2020	$	22,950	$	(12,670)	$	(260)	$	10,020
December 31, 2019	$	21,543	$	(12,442)	$	—	$	9,101

1 Reflects impact of loans paid in full.

Changes related to MSRs were as follows:


(in thousands)	2020		2019		2018
Mortgage servicing rights
Balance, January 1	$	9,101	$	8,062	$	8,639
Amount capitalized	5,096		2,987		1,045
Amortization	(3,917)		(1,948)		(1,622)
Sale of mortgage servicing rights	—		—		—
Other-than-temporary impairment	—		—		—
Carrying amount before valuation allowance, December 31	10,280		9,101		8,062
Valuation allowance for mortgage servicing rights
Balance, January 1	—		—		—
Provision	260		—		—
Other-than-temporary impairment	—		—		—
Balance, December 31	260		—		—
Net carrying value of mortgage servicing rights	$	10,020	$	9,101	$	8,062

Schedule of key assumptions used in estimating fair value

Key assumptions used in estimating the fair value of ASB’s MSRs used in the impairment analysis were as follows:


December 31	2020			2019
(dollars in thousands)
Unpaid principal balance	$	1,450,312		$	1,276,437
Weighted average note rate	3.68		%	3.96		%
Weighted average discount rate	9.25		%	9.25		%
Weighted average prepayment speed	17.7		%	11.4		%

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, 2020

Commercial loan

387

Fair value of collateral

Appraised value less selling cost

N/A (2)

Mortgage servicing rights

3,001

Discounted cash flow

Prepayment speed

15-22%

22%

Discount rate

9.3%

December 31, 2019

Residential land

Fair value of collateral

Appraised value less selling cost

N/A (2)

(1) Represent percent of outstanding principal balance.

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

Schedule of sensitivity analysis of fair value of MSR to hypothetical adverse changes

The sensitivity analysis of fair value of MSRs to hypothetical adverse changes of 25 and 50 basis points in certain key assumptions was as follows:


December 31	2020		2019
(in thousands)
Prepayment rate:
25 basis points adverse rate change	$	(738)	$	(950)
50 basis points adverse rate change	(1,445)		(1,947)
Discount rate:
25 basis points adverse rate change	(68)		(102)
50 basis points adverse rate change	(135)		(202)

Schedule of deposit liabilities

The summarized components of deposit liabilities were as follows:


December 31	2020				2019
(dollars in thousands)	Weighted-average stated rate		Amount		Weighted-average stated rate		Amount
Savings	0.03	%	$	2,873,727	0.09	%	$	2,379,522
Checking
Interest-bearing	0.02		1,196,675		0.09		1,062,122
Noninterest-bearing	—		1,329,264		—		977,459
Commercial checking	—		1,269,236		—		932,223
Money market	0.09		169,225		0.69		150,751
Time certificates	0.99		548,830		1.42		769,825
	0.09	%	$	7,386,957	0.24	%	$	6,271,902

Schedule of maturities of term certificates

The approximate scheduled maturities of time certificates outstanding at December 31, 2020 were as follows:


(in thousands)
2021	$	348,420
2022	88,675
2023	50,146
2024	33,944
2025	25,225
Thereafter	2,420
	$	548,830

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	2020		2019		2018
(in thousands)
Time certificates	$	7,944	$	12,675	$	11,044
Savings	1,774		1,904		1,639
Money market	465		953		602
Interest-bearing checking	471		1,298		706
	$	10,654	$	16,830	$	13,991

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 Sheets		Net amount of liabilities presented in the Balance Sheets
Repurchase agreements
December 31, 2020	$	90	$	—	$	90
December 31, 2019	115		—		115


	Gross amount not offset in the Balance Sheets
(in millions)	Net amount of liabilities presented in the Balance Sheets		Financial instruments		Cash collateral pledged
Commercial account holders


December 31, 2020	$	90	$	92	$	—




December 31, 2019	115		130		—

Securities sold under agreements to repurchase were summarized as follows:


December 31	2020						2019
Maturity	Repurchase liability		Weighted-average interest rate		Collateralized by mortgage-backed securities and federal agency obligations at fair value plus accrued interest		Repurchase liability		Weighted-average interest rate		Collateralized by mortgage-backed securities and federal agency obligations at fair value plus accrued interest
(dollars in thousands)
Overnight	$	89,670	0.02	%	$	92,478	$	115,110	0.98	%	$	129,527
1 to 29 days	—		—	%	—		—		—	%	—
30 to 90 days	—		—	%	—		—		—	%	—
Over 90 days	—		—	%	—		—		—	%	—
	$	89,670	0.02	%	$	92,478	$	115,110	0.98	%	$	129,527

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 thousands)	2020			2019			2018
Amount outstanding as of December 31	$	89,670		$	115,110		$	65,040
Average amount outstanding during the year	73,738			79,598			99,162
Maximum amount outstanding as of any month-end	100,580			115,110			152,255
Weighted-average interest rate as of December 31	0.02		%	0.98		%	0.75		%
Weighted-average interest rate during the year	0.42		%	0.96		%	0.71		%
Weighted-average remaining days to maturity as of December 31	1			1			1

Schedule of actual and minimum required capital amounts and ratios

The tables below set forth actual and minimum required capital amounts and ratios:


	Actual				Minimum required				Required to be well capitalized
(dollars in thousands)	Capital		Ratio		Capital		Ratio		Capital		Ratio
December 31, 2020
Tier 1 leverage	$	677,786	8.38	%	$	323,700	4.00	%	$	404,625	5.00	%
December 31, 2019
Tier 1 leverage	641,547		9.06	%	283,122		4.00	%	353,903		5.00	%
Common equity tier 1	641,547		13.18	%	219,071		4.50	%	316,435		6.50	%
Tier 1 capital	641,547		13.18	%	292,094		6.00	%	389,459		8.00	%
Total capital	696,643		14.31	%	389,459		8.00	%	486,823		10.00	%

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	2020				2019
(in thousands)	Notional amount		Fair value		Notional amount		Fair value
Interest rate lock commitments	$	120,980	$	4,536	$	23,171	$	297
Forward commitments	100,500		(500)		29,383		(42)

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	2020				2019
(in thousands)	Asset derivatives		Liability derivatives		Asset derivatives		Liability derivatives
Interest rate lock commitments	$	4,536	$	—	$	297	$	—
Forward commitments	—		500		3		45
	$	4,536	$	500	$	300	$	45

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 ASB’s 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	2020		2019		2018
Interest rate lock commitments	Mortgage banking income	$	4,239	$	206	$	(40)
Forward commitments	Mortgage banking income	(458)		1		(19)
		$	3,781	$	207	$	(59)

Schedule of off balance sheet arrangements

The following is a summary of outstanding off-balance sheet arrangements:


December 31	2020		2019
(in thousands)
Unfunded commitments to extend credit:
Home equity line of credit	$	1,248,773	$	1,290,854
Commercial and commercial real estate	574,281		484,806
Consumer	69,168		70,088
Residential 1-4 family	57,862		21,131
Commercial and financial standby letters of credit	13,718		11,912
Total	$	1,963,802	$	1,878,791