Fair value measurements (Tables)

9 Months Ended

Sep. 30, 2021

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.

			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
September 30, 2021
Financial assets
HEI consolidated
Available-for-sale investment securities	$	2,580,830	$	—	$	2,565,403	$	15,427	$	2,580,830
Held-to-maturity investment securities	491,871		—		484,654		—		484,654
Loans, net	5,100,178		—		54,537		5,167,221		5,221,758
Mortgage servicing rights	10,272		—		—		13,712		13,712
Derivative assets	53,789		121		494		—		615
Financial liabilities
HEI consolidated
Deposit liabilities	444,897		—		445,401		—		445,401
Short-term borrowings—other than bank	92,246		—		92,246		—		92,246
Other bank borrowings	129,305		—		129,304		—		129,304
Long-term debt, net—other than bank	2,244,795		—		2,588,972		—		2,588,972
Derivative liabilities	27,250		12		3,456		—		3,468
Hawaiian Electric consolidated
Short-term borrowings	—		—		—		—		—
Long-term debt, net	1,676,223		—		1,987,933		—		1,987,933
December 31, 2020
Financial assets
HEI consolidated
Available-for-sale investment securities	$	1,970,417	$	—	$	1,943,232	$	27,185	$	1,970,417
Held-to-maturity investment securities	226,947		—		229,963		—		229,963
Loans, net	5,260,917		—		28,354		5,410,976		5,439,330
Mortgage servicing rights	10,020		—		—		10,705		10,705
Derivative assets	120,980		—		4,536		—		4,536
Financial liabilities
HEI consolidated
Deposit liabilities	548,830		—		552,800		—		552,800
Short-term borrowings—other than bank	129,379		—		129,379		—		129,379
Other bank borrowings	89,670		—		89,669		—		89,669
Long-term debt, net—other than bank	2,119,129		—		2,487,790		—		2,487,790
Derivative liabilities	137,500		500		4,530		—		5,030
Hawaiian Electric consolidated
Short-term borrowings	49,979		—		49,979		—		49,979
Long-term debt, net	1,561,302		—		1,890,490		—		1,890,490

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:

	September 30, 2021						December 31, 2020
	Fair value measurements using						Fair value measurements using
(in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Available-for-sale investment securities (bank segment)
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies	$	—	$	2,441,683	$	—	$	—	$	1,849,559	$	—
U.S. Treasury and federal agency obligations	—		92,075		—		—		62,322		—
Corporate bonds	—		31,645		—		—		31,351		—
Mortgage revenue bonds	—		—		15,427		—		—		27,185
	$	—	$	2,565,403	$	15,427	$	—	$	1,943,232	$	27,185
Derivative assets
Interest rate lock commitments (bank segment)1	$	—	$	308	$	—	$	—	$	4,536	$	—
Forward commitments (bank segment)1	121		—		—		—		—		—
Interest rate swap (Other segment)2	—		186		—		—		—		—
	$	121	$	494	$	—	$	—	$	4,536	$	—
Derivative liabilities
Forward commitments (bank segment)1	$	12	$	—	$	—	$	500	$	—	$	—
Interest rate swap (Other segment)2	—		3,456		—		—		4,530		—
	$	12	$	3,456	$	—	$	500	$	4,530	$	—

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

2     Derivatives are included in other assets and other 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 September 30				Nine months ended September 30
Mortgage revenue bonds	2021		2020		2021		2020
(in thousands)
Beginning balance	$	15,427	$	28,827	$	27,185	$	28,597
Principal payments received	—		(1,642)		(11,758)		(1,642)
Purchases	—		—		—		230
Unrealized gain (loss) included in other comprehensive income	—		—		—		—
Ending balance	$	15,427	$	27,185	$	15,427	$	27,185

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 using
(in thousands)	Balance		Level 1		Level 2		Level 3
September 30, 2021
Loans	$	125	$	—	$	—	$	125
December 31, 2020
Loans	387		—		—		387
Mortgage servicing rights	3,001		—		—		3,001

Schedule of significant unobservable inputs used in the fair value measurement

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

(dollars in thousands)	September 30, 2021			December 31, 2020
Unpaid principal balance	$	1,521,966		$	1,450,312
Weighted average note rate	3.42		%	3.68		%
Weighted average discount rate	9.25		%	9.25		%
Weighted average prepayment speed	11.7		%	17.7		%

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
September 30, 2021
Residential	$	125	Fair value of property or collateral	Appraised value less selling cost	N/A (2)	N/A (2)
December 31, 2020
Commercial loan	$	387	Fair value of collateral	Appraised value less selling cost	N/A (2)	N/A (2)
Mortgage servicing rights	3,001		Discounted cash flow	Prepayment speed	15% - 22%	22	%
				Discount rate		9.3	%

(1) Represents percent of outstanding principal balance.

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