XML 118 R20.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Bank subsidiary | 9 Months Ended
--- | ---
Sep. 30, 2012
Bank subsidiary |
Bank subsidiary |
4 · Bank subsidiary Selected financial information American Savings Bank, F.S.B. Statements of Income Data
|  | Three months ended September 30 |  | Nine months ended September 30 |
(in thousands) |  | 2012 |  | 2011 |  | 2012 |  | 2011 |
Interest income |  |  |  |  |  |  |  |  |
Interest and fees on loans |  | $ | 43,880 |  | $ | 46,240 |  | $ | 133,241 |  | $ | 137,985 |
Interest on investment and mortgage-related securities |  | 3,432 |  | 3,654 |  | 10,534 |  | 11,216 |
Total interest income |  | 47,312 |  | 49,894 |  | 143,775 |  | 149,201 |
Interest expense |  |  |  |  |  |  |  |  |
Interest on deposit liabilities |  | 1,540 |  | 2,166 |  | 5,015 |  | 7,146 |
Interest on other borrowings |  | 1,201 |  | 1,375 |  | 3,676 |  | 4,124 |
Total interest expense |  | 2,741 |  | 3,541 |  | 8,691 |  | 11,270 |
Net interest income |  | 44,571 |  | 46,353 |  | 135,084 |  | 137,931 |
Provision for loan losses |  | 3,580 |  | 3,822 |  | 9,504 |  | 10,927 |
Net interest income after provision for loan losses |  | 40,991 |  | 42,531 |  | 125,580 |  | 127,004 |
Noninterest income |  |  |  |  |  |  |  |  |
Fees from other financial services |  | 7,674 |  | 7,219 |  | 22,474 |  | 21,405 |
Fee income on deposit liabilities |  | 4,527 |  | 4,492 |  | 13,127 |  | 13,540 |
Fee income on other financial products |  | 1,660 |  | 1,806 |  | 4,741 |  | 5,340 |
Gain on sale of loans |  | 4,077 |  | 1,092 |  | 8,297 |  | 2,268 |
Other income |  | 1,346 |  | 1,597 |  | 4,155 |  | 5,977 |
Total noninterest income |  | 19,284 |  | 16,206 |  | 52,794 |  | 48,530 |
Noninterest expense |  |  |  |  |  |  |  |  |
Compensation and employee benefits |  | 18,684 |  | 17,646 |  | 56,026 |  | 53,317 |
Occupancy |  | 4,400 |  | 4,313 |  | 12,866 |  | 12,841 |
Data processing |  | 2,644 |  | 2,451 |  | 7,244 |  | 6,479 |
Services |  | 3,062 |  | 1,686 |  | 7,066 |  | 5,406 |
Equipment |  | 1,762 |  | 1,712 |  | 5,299 |  | 5,141 |
Other expense |  | 8,096 |  | 7,763 |  | 22,909 |  | 23,651 |
Total noninterest expense |  | 38,648 |  | 35,571 |  | 111,410 |  | 106,835 |
Income before income taxes |  | 21,627 |  | 23,166 |  | 66,964 |  | 68,699 |
Income taxes |  | 7,419 |  | 7,709 |  | 22,690 |  | 24,196 |
Net income |  | $ | 14,208 |  | $ | 15,457 |  | $ | 44,274 |  | $ | 44,503 |
American Savings Bank, F.S.B. Statements of Comprehensive Income Data
|  | Three months ended September 30 |  | Nine months ended September 30 |
(in thousands) |  | 2012 |  | 2011 |  | 2012 |  | 2011 |
Net income |  | $ | 14,208 |  | $ | 15,457 |  | $ | 44,274 |  | $ | 44,503 |
Other comprehensive income (loss), net of taxes: |  |  |  |  |  |  |  |  |
Net unrealized gains on securities: |  |  |  |  |  |  |  |  |
Net unrealized gains on securities arising during the period, net of taxes of $689 and $1,917 for the three months ended September 30, 2012 and 2011 and $1,261 and $4,258 for the nine months ended September 30, 2012 and 2011, respectively |  | 1,043 |  | 3,013 |  | 1,910 |  | 6,448 |
Less: reclassification adjustment for net realized gains, included in net income, net of taxes of nil and $146 for the three months ended September 30, 2012 and 2011 and $53 and $148 for the nine months ended September 30, 2012 and 2011, respectively |  | — |  | (221 | ) | (81 | ) | (224 | )
Retirement benefit plans: |  |  |  |  |  |  |  |  |
Less: amortization of net loss, prior service gain and transition obligation included in net periodic benefit cost, net of taxes (tax benefits) of $(176) and $(175) for the three months ended September 30, 2012 and 2011 and $(508) and $902 for the nine months ended September 30, 2012 and 2011, respectively |  | 266 |  | 86 |  | 769 |  | (1,367 | )
Other comprehensive income, net of taxes |  | 1,309 |  | 2,878 |  | 2,598 |  | 4,857 |
Comprehensive income |  | $ | 15,517 |  | $ | 18,335 |  | $ | 46,872 |  | $ | 49,360 |
American Savings Bank, F.S.B. Balance Sheets Data
(in thousands) |  | September 30, 2012 |  | December 31, 2011 |
Assets |  |  |  |  |
Cash and cash equivalents |  | $ | 152,474 |  | $ | 219,678 |
Available-for-sale investment and mortgage-related securities |  | 664,051 |  | 624,331 |
Investment in stock of Federal Home Loan Bank of Seattle |  | 96,893 |  | 97,764 |
Loans receivable held for investment |  | 3,745,558 |  | 3,680,724 |
Allowance for loan losses |  | (39,810 | ) | (37,906 | )
Loans receivable held for investment, net |  | 3,705,748 |  | 3,642,818 |
Loans held for sale, at lower of cost or fair value |  | 16,495 |  | 9,601 |
Other |  | 234,999 |  | 233,592 |
Goodwill |  | 82,190 |  | 82,190 |
Total assets |  | $ | 4,952,850 |  | $ | 4,909,974 |
Liabilities and shareholder’s equity |  |  |  |  |
Deposit liabilities—noninterest-bearing |  | $ | 1,097,809 |  | $ | 993,828 |
Deposit liabilities—interest-bearing |  | 3,028,979 |  | 3,076,204 |
Other borrowings |  | 211,219 |  | 233,229 |
Other |  | 107,960 |  | 118,078 |
Total liabilities |  | 4,445,967 |  | 4,421,339 |
Commitments and contingencies (see “Litigation” below) |  |  |  |  |
Common stock |  | 333,256 |  | 331,880 |
Retained earnings |  | 180,400 |  | 166,126 |
Accumulated other comprehensive loss, net of tax benefits |  | (6,773 | ) | (9,371 | )
Total shareholder’s equity |  | 506,883 |  | 488,635 |
Total liabilities and shareholder’s equity |  | $ | 4,952,850 |  | $ | 4,909,974 |
Other assets |  |  |  |  |
Bank-owned life insurance |  | $ | 124,672 |  | $ | 121,470 |
Premises and equipment, net |  | 53,451 |  | 52,940 |
Prepaid expenses |  | 14,732 |  | 15,297 |
Accrued interest receivable |  | 14,205 |  | 14,190 |
Mortgage-servicing rights |  | 9,658 |  | 8,227 |
Real estate acquired in settlement of loans, net |  | 4,414 |  | 7,260 |
Other |  | 13,867 |  | 14,208 |
|  | $ | 234,999 |  | $ | 233,592 |
Other liabilities |  |  |  |  |
Accrued expenses |  | $ | 19,981 |  | $ | 21,216 |
Federal and state income taxes payable |  | 36,308 |  | 35,002 |
Cashier’s checks |  | 20,575 |  | 22,802 |
Advance payments by borrowers |  | 5,958 |  | 10,100 |
Other |  | 25,138 |  | 28,958 |
|  | $ | 107,960 |  | $ | 118,078 |
Other borrowings consisted of securities sold under agreements to repurchase and advances from the Federal Home Loan Bank (FHLB) of Seattle of $161 million and $50 million, respectively, as of September 30, 2012 and $183 million and $50 million, respectively, as of December 31, 2011. Bank-owned life insurance is life insurance purchased by ASB on the lives of certain key employees, with ASB as the beneficiary. The insurance is used to fund employee benefits through tax-free income from increases in the cash value of the policies and insurance proceeds paid to ASB upon an insured’s death. As of September 30, 2012, ASB had total commitments to borrowers for loan commitments and unused lines and letters of credit of $1.5 billion, including $0.2 million to lend additional funds to borrowers whose loans are impaired. There are no commitments to lend additional funds to borrowers whose loan terms have been modified in trouble debt restructurings (TDRs) as of September 30, 2012. Investment and mortgage-related securities portfolio. Available-for-sale securities. The book value (amortized cost), gross unrealized gains and losses, estimated fair value and gross unrealized losses (fair value and amount by duration of time in which positions have been held in a continuous loss position) for securities held in ASB’s “available-for-sale” portfolio by major security type were as follows:
|  |  |  | Gross |  | Gross |  | Estimated |  | Gross unrealized losses |
|  | Amortized |  | unrealized |  | unrealized |  | fair |  | Less than 12 months |  | 12 months or longer |
(dollars in thousands) |  | cost |  | gains |  | losses |  | value |  | Fair value |  | Amount |  | Fair value |  | Amount |
September 30, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal agency obligations |  | $ | 213,241 |  | $ | 3,342 |  | $ | — |  | $ | 216,583 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Mortgage-related securities- FNMA, FHLMC and GNMA |  | 353,095 |  | 11,706 |  | (181 | ) | 364,620 |  | 36,225 |  | (181 | ) | — |  | — |
Municipal bonds |  | 78,265 |  | 4,583 |  | — |  | 82,848 |  | — |  | — |  | — |  | — |
|  | $ | 644,601 |  | $ | 19,631 |  | $ | (181 | ) | $ | 664,051 |  | $ | 36,225 |  | $ | (181 | ) | $ | — |  | $ | — |
December 31, 2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal agency obligations |  | $ | 218,342 |  | $ | 2,393 |  | $ | (8 | ) | $ | 220,727 |  | $ | 19,992 |  | $ | (8 | ) | $ | — |  | $ | — |
Mortgage-related securities- FNMA, FHLMC and GNMA |  | 334,183 |  | 10,699 |  | (17 | ) | 344,865 |  | 11,994 |  | (17 | ) | — |  | — |
Municipal bonds |  | 55,393 |  | 3,346 |  | — |  | 58,739 |  | — |  | — |  | — |  | — |
|  | $ | 607,918 |  | $ | 16,438 |  | $ | (25 | ) | $ | 624,331 |  | $ | 31,986 |  | $ | (25 | ) | $ | — |  | $ | — |
The unrealized losses on ASB’s investments in mortgage-related securities and obligations issued by federal agencies were caused by interest rate movements. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because ASB does not intend to sell the securities and has determined it is more likely than not that it will not be required to sell the investments before recovery of their amortized costs bases, which may be at maturity, ASB did not consider these investments to be other-than-temporarily impaired at September 30, 2012. The fair values of ASB’s investment securities could decline if interest rates rise or spreads widen. The following table details the contractual maturities of available-for-sale securities. All positions with variable maturities (e.g. callable debentures and mortgage-related securities) are disclosed based upon the bond’s contractual maturity. Actual maturities will likely differ from these contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
September 30, 2012 |  | Amortized cost |  | Fair value |
(in thousands) |  |  |  |  |
Due in one year or less |  | $ | — |  | $ | — |
Due after one year through five years |  | 190,140 |  | 192,438 |
Due after five years through ten years |  | 85,682 |  | 90,597 |
Due after ten years |  | 15,684 |  | 16,396 |
|  | 291,506 |  | 299,431 |
Mortgage-related securities-FNMA,FHLMC and GNMA |  | 353,095 |  | 364,620 |
Total available-for-sale securities |  | $ | 644,601 |  | $ | 664,051 |
Allowance for loan losses. ASB must maintain an allowance for loan losses that is adequate to absorb estimated probable credit losses associated with its loan portfolio. The allowance for loan losses consists of an allocated portion, which estimates credit losses for specifically identified loans and pools of loans, and an unallocated portion. The allowance for loan losses was comprised of the following:
|  | Residential |  | Commercial real |  | Home equity line |  | Residential |  | Commercial |  | Residential |  | Commercial |  | Consumer |  |  |  |  |
(in thousands) |  | 1-4 family |  | estate |  | of credit |  | land |  | construction |  | construction |  | loans |  | loans |  | Unallocated |  | Total |
Nine months ended September 30, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 6,500 |  | $ | 1,688 |  | $ | 4,354 |  | $ | 3,795 |  | $ | 1,888 |  | $ | 4 |  | $ | 14,867 |  | $ | 3,806 |  | $ | 1,004 |  | $ | 37,906 |
Charge-offs |  | (2,476 | ) | — |  | (402 | ) | (2,340 | ) | — |  | — |  | (2,964 | ) | (1,853 | ) | — |  | (10,035 | )
Recoveries |  | 974 |  | — |  | 95 |  | 471 |  | — |  | — |  | 511 |  | 384 |  | — |  | 2,435 |
Provision |  | 1,729 |  | 394 |  | 818 |  | 1,871 |  | 43 |  | 4 |  | 1,916 |  | 1,472 |  | 1,257 |  | 9,504 |
Ending balance |  | $ | 6,727 |  | $ | 2,082 |  | $ | 4,865 |  | $ | 3,797 |  | $ | 1,931 |  | $ | 8 |  | $ | 14,330 |  | $ | 3,809 |  | $ | 2,261 |  | $ | 39,810 |
Ending balance: individually evaluated for impairment |  | $ | 324 |  | $ | 7 |  | $ | 313 |  | $ | 2,321 |  | $ | — |  | $ | — |  | $ | 1,656 |  | $ | — |  | $ | — |  | $ | 4,621 |
Ending balance: collectively evaluated for impairment |  | $ | 6,403 |  | $ | 2,075 |  | $ | 4,552 |  | $ | 1,476 |  | $ | 1,931 |  | $ | 8 |  | $ | 12,674 |  | $ | 3,809 |  | $ | 2,261 |  | $ | 35,189 |
Financing Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 1,899,580 |  | $ | 367,765 |  | $ | 604,279 |  | $ | 29,280 |  | $ | 42,913 |  | $ | 5,648 |  | $ | 704,100 |  | $ | 104,338 |  | $ | — |  | $ | 3,757,903 |
Ending balance: individually evaluated for impairment |  | $ | 26,912 |  | $ | 2,929 |  | $ | 1,913 |  | $ | 25,146 |  | $ | — |  | $ | — |  | $ | 17,956 |  | $ | 22 |  | $ | — |  | $ | 74,878 |
Ending balance: collectively evaluated for impairment |  | $ | 1,872,668 |  | $ | 364,836 |  | $ | 602,366 |  | $ | 4,134 |  | $ | 42,913 |  | $ | 5,648 |  | $ | 686,144 |  | $ | 104,316 |  | $ | — |  | $ | 3,683,025 |
Year ended December 31, 2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 6,497 |  | $ | 1,474 |  | $ | 4,269 |  | $ | 6,411 |  | $ | 1,714 |  | $ | 7 |  | $ | 16,015 |  | $ | 3,325 |  | $ | 934 |  | $ | 40,646 |
Charge-offs |  | (5,528 | ) | — |  | (1,439 | ) | (4,071 | ) | — |  | — |  | (5,335 | ) | (3,117 | ) | — |  | (19,490 | )
Recoveries |  | 110 |  | — |  | 25 |  | 170 |  | — |  | — |  | 869 |  | 567 |  | — |  | 1,741 |
Provision |  | 5,421 |  | 214 |  | 1,499 |  | 1,285 |  | 174 |  | (3 | ) | 3,318 |  | 3,031 |  | 70 |  | 15,009 |
Ending balance |  | $ | 6,500 |  | $ | 1,688 |  | $ | 4,354 |  | $ | 3,795 |  | $ | 1,888 |  | $ | 4 |  | $ | 14,867 |  | $ | 3,806 |  | $ | 1,004 |  | $ | 37,906 |
Ending balance: individually evaluated for impairment |  | $ | 203 |  | $ | — |  | $ | — |  | $ | 2,525 |  | $ | — |  | $ | — |  | $ | 976 |  | $ | — |  | $ | — |  | $ | 3,704 |
Ending balance: collectively evaluated for impairment |  | $ | 6,297 |  | $ | 1,688 |  | $ | 4,354 |  | $ | 1,270 |  | $ | 1,888 |  | $ | 4 |  | $ | 13,891 |  | $ | 3,806 |  | $ | 1,004 |  | $ | 34,202 |
Financing Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 1,926,774 |  | $ | 331,931 |  | $ | 535,481 |  | $ | 45,392 |  | $ | 41,950 |  | $ | 3,327 |  | $ | 716,427 |  | $ | 93,253 |  | $ | — |  | $ | 3,694,535 |
Ending balance: individually evaluated for impairment |  | $ | 26,012 |  | $ | 13,397 |  | $ | 1,450 |  | $ | 39,364 |  | $ | — |  | $ | — |  | $ | 48,241 |  | $ | 24 |  | $ | — |  | $ | 128,488 |
Ending balance: collectively evaluated for impairment |  | $ | 1,900,762 |  | $ | 318,534 |  | $ | 534,031 |  | $ | 6,028 |  | $ | 41,950 |  | $ | 3,327 |  | $ | 668,186 |  | $ | 93,229 |  | $ | — |  | $ | 3,566,047 |
Credit quality. ASB performs an internal loan review and grading on an ongoing basis. The review provides management with periodic information as to the quality of the loan portfolio and effectiveness of its lending policies and procedures. The objectives of the loan review and grading procedures are to identify, in a timely manner, existing or emerging credit trends so that appropriate steps can be initiated to manage risk and avoid or minimize future losses. Loans subject to grading include commercial and industrial, commercial real estate and commercial construction loans. A ten-point risk rating system is used to determine loan grade and is based on borrower loan risk. The risk rating is a numerical representation of risk based on the overall assessment of the borrower’s financial and operating strength including earnings, operating cash flow, debt service capacity, asset and liability structure, competitive issues, experience and quality of management, financial reporting quality and industry/economic factors. The loan grade categories are:
1- Substantially risk free | 6- Acceptable risk
2- Minimal risk | 7- Special mention
3- Modest risk | 8- Substandard
4- Better than average risk | 9- Doubtful
5- Average risk | 10- Loss
Grades 1 through 6 are considered pass grades. Pass exposures generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral. The credit risk profile by internally assigned grade for loans was as follows:
|  | September 30, 2012 |  | December 31, 2011 |
(in thousands) |  | Commercial real estate |  | Commercial construction |  | Commercial |  | Commercial real estate |  | Commercial construction |  | Commercial |
Grade: |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 326,532 |  | $ | 42,913 |  | $ | 630,616 |  | $ | 308,843 |  | $ | 41,950 |  | $ | 650,234 |
Special mention |  | 9,455 |  | — |  | 21,291 |  | 8,594 |  | — |  | 14,660 |
Substandard |  | 28,849 |  | — |  | 48,460 |  | 11,058 |  | — |  | 47,607 |
Doubtful |  | 2,929 |  | — |  | 3,733 |  | 3,436 |  | — |  | 3,926 |
Loss |  | — |  | — |  | — |  | — |  | — |  | — |
Total |  | $ | 367,765 |  | $ | 42,913 |  | $ | 704,100 |  | $ | 331,931 |  | $ | 41,950 |  | $ | 716,427 |
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 |
September 30, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | $ | 5,830 |  | $ | 1,727 |  | $ | 28,626 |  | $ | 36,183 |  | $ | 1,863,397 |  | $ | 1,899,580 |  | $ | — |
Commercial real estate |  | — |  | — |  | 2,929 |  | 2,929 |  | 364,836 |  | 367,765 |  | — |
Home equity line of credit |  | 584 |  | 758 |  | 1,965 |  | 3,307 |  | 600,972 |  | 604,279 |  | — |
Residential land |  | 1,346 |  | 3,017 |  | 6,384 |  | 10,747 |  | 18,533 |  | 29,280 |  | 2,473 |
Commercial construction |  | — |  | — |  | — |  | — |  | 42,913 |  | 42,913 |  | — |
Residential construction |  | — |  | — |  | — |  | — |  | 5,648 |  | 5,648 |  | — |
Commercial loans |  | 1,681 |  | 251 |  | 2,948 |  | 4,880 |  | 699,220 |  | 704,100 |  | 123 |
Consumer loans |  | 878 |  | 356 |  | 491 |  | 1,725 |  | 102,613 |  | 104,338 |  | 360 |
Total loans |  | $ | 10,319 |  | $ | 6,109 |  | $ | 43,343 |  | $ | 59,771 |  | $ | 3,698,132 |  | $ | 3,757,903 |  | $ | 2,956 |
December 31, 2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | $ | 10,391 |  | $ | 4,583 |  | $ | 28,113 |  | $ | 43,087 |  | $ | 1,883,687 |  | $ | 1,926,774 |  | $ | — |
Commercial real estate |  | — |  | — |  | — |  | — |  | 331,931 |  | 331,931 |  | — |
Home equity line of credit |  | 1,671 |  | 494 |  | 1,421 |  | 3,586 |  | 531,895 |  | 535,481 |  | — |
Residential land |  | 2,352 |  | 575 |  | 13,037 |  | 15,964 |  | 29,428 |  | 45,392 |  | 205 |
Commercial construction |  | — |  | — |  | — |  | — |  | 41,950 |  | 41,950 |  | — |
Residential construction |  | — |  | — |  | — |  | — |  | 3,327 |  | 3,327 |  | — |
Commercial loans |  | 226 |  | 733 |  | 1,340 |  | 2,299 |  | 714,128 |  | 716,427 |  | 28 |
Consumer loans |  | 553 |  | 344 |  | 486 |  | 1,383 |  | 91,870 |  | 93,253 |  | 308 |
Total loans |  | $ | 15,193 |  | $ | 6,729 |  | $ | 44,397 |  | $ | 66,319 |  | $ | 3,628,216 |  | $ | 3,694,535 |  | $ | 541 |
The credit risk profile based on nonaccrual loans and accruing loans 90 days or more past due was as follows:
|  | September 30, 2012 |  | December 31, 2011 |
(in thousands) |  | Nonaccrual loans |  | Accruing loans 90 days or more past due |  | Nonaccrual loans |  | Accruing loans 90 days or more past due |
Real estate loans: |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | $ | 29,613 |  | $ | — |  | $ | 28,298 |  | $ | — |
Commercial real estate |  | 2,929 |  | — |  | 3,436 |  | — |
Home equity line of credit |  | 2,621 |  | — |  | 2,258 |  | — |
Residential land |  | 4,393 |  | 2,473 |  | 14,535 |  | 205 |
Commercial construction |  | — |  | — |  | — |  | — |
Residential construction |  | — |  | — |  | — |  | — |
Commercial loans |  | 17,856 |  | 123 |  | 17,946 |  | 28 |
Consumer loans |  | 243 |  | 360 |  | 281 |  | 308 |
Total |  | $ | 57,655 |  | $ | 2,956 |  | $ | 66,754 |  | $ | 541 |
The total carrying amount and the total unpaid principal balance of impaired loans were as follows:
|  | September 30, 2012 |  | Three months ended September 30, 2012 |  | Nine months ended September 30, 2012 |
(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 loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | $ | 15,963 |  | $ | 22,127 |  | $ | — |  | $ | 15,919 |  | $ | 57 |  | $ | 17,104 |  | $ | 225 |
Commercial real estate |  | — |  | — |  | — |  | 2,003 |  | — |  | 9,504 |  | 237 |
Home equity line of credit |  | 584 |  | 1,376 |  | — |  | 630 |  | — |  | 648 |  | 1 |
Residential land |  | 18,107 |  | 22,854 |  | — |  | 19,876 |  | 296 |  | 24,184 |  | 1,020 |
Commercial construction |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Residential construction |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Commercial loans |  | 585 |  | 585 |  | — |  | 8,916 |  | 33 |  | 31,710 |  | 979 |
Consumer loans |  | 22 |  | 22 |  | — |  | 23 |  | — |  | 23 |  | — |
|  | 35,261 |  | 46,964 |  | — |  | 47,367 |  | 386 |  | 83,173 |  | 2,462 |
With an allowance recorded |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | 4,504 |  | 4,504 |  | 324 |  | 4,509 |  | 58 |  | 4,072 |  | 192 |
Commercial real estate |  | 2,929 |  | 2,929 |  | 7 |  | 976 |  | — |  | 326 |  | — |
Home equity line of credit |  | 313 |  | 421 |  | 313 |  | 104 |  | — |  | 35 |  | — |
Residential land |  | 7,021 |  | 7,243 |  | 2,321 |  | 7,134 |  | 122 |  | 7,306 |  | 429 |
Commercial construction |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Residential construction |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Commercial loans |  | 17,370 |  | 20,398 |  | 1,656 |  | 9,476 |  | 2 |  | 5,777 |  | 20 |
Consumer loans |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
|  | 32,137 |  | 35,495 |  | 4,621 |  | 22,199 |  | 182 |  | 17,516 |  | 641 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | 20,467 |  | 26,631 |  | 324 |  | 20,428 |  | 115 |  | 21,176 |  | 417 |
Commercial real estate |  | 2,929 |  | 2,929 |  | 7 |  | 2,979 |  | — |  | 9,830 |  | 237 |
Home equity line of credit |  | 897 |  | 1,797 |  | 313 |  | 734 |  | — |  | 683 |  | 1 |
Residential land |  | 25,128 |  | 30,097 |  | 2,321 |  | 27,010 |  | 418 |  | 31,490 |  | 1,449 |
Commercial construction |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Residential construction |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Commercial loans |  | 17,955 |  | 20,983 |  | 1,656 |  | 18,392 |  | 35 |  | 37,487 |  | 999 |
Consumer loans |  | 22 |  | 22 |  | — |  | 23 |  | — |  | 23 |  | — |
|  | $ | 67,398 |  | $ | 82,459 |  | $ | 4,621 |  | $ | 69,566 |  | $ | 568 |  | $ | 100,689 |  | $ | 3,103 |
* Since loan was classified as impaired.
|  | December 31, 2011 |  | Year ended December 31, 2011 |
(in thousands) |  | Recorded investment |  | Unpaid principal balance |  | Related allowance |  | Average recorded investment |  | Interest income recognized |
With no related allowance recorded |  |  |  |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | $ | 19,217 |  | $ | 26,614 |  | $ | — |  | $ | 21,385 |  | $ | 282 |
Commercial real estate |  | 13,397 |  | 13,397 |  | — |  | 13,404 |  | 747 |
Home equity line of credit |  | 711 |  | 1,612 |  | — |  | 954 |  | 6 |
Residential land |  | 30,781 |  | 39,136 |  | — |  | 33,398 |  | 1,779 |
Commercial construction |  | — |  | — |  | — |  | — |  | — |
Residential construction |  | — |  | — |  | — |  | — |  | — |
Commercial loans |  | 41,680 |  | 43,516 |  | — |  | 40,952 |  | 2,912 |
Consumer loans |  | 25 |  | 25 |  | — |  | 16 |  | — |
|  | 105,811 |  | 124,300 |  | — |  | 110,109 |  | 5,726 |
With an allowance recorded |  |  |  |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | 3,525 |  | 3,525 |  | 203 |  | 3,527 |  | 201 |
Commercial real estate |  | — |  | — |  | — |  | — |  | — |
Home equity line of credit |  | — |  | — |  | — |  | — |  | — |
Residential land |  | 7,792 |  | 7,852 |  | 2,525 |  | 8,158 |  | 603 |
Commercial construction |  | — |  | — |  | — |  | — |  | — |
Residential construction |  | — |  | — |  | — |  | — |  | — |
Commercial loans |  | 6,561 |  | 6,561 |  | 976 |  | 8,131 |  | 737 |
Consumer loans |  | — |  | — |  | — |  | — |  | — |
|  | 17,878 |  | 17,938 |  | 3,704 |  | 19,816 |  | 1,541 |
Total |  |  |  |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | 22,742 |  | 30,139 |  | 203 |  | 24,912 |  | 483 |
Commercial real estate |  | 13,397 |  | 13,397 |  | — |  | 13,404 |  | 747 |
Home equity line of credit |  | 711 |  | 1,612 |  | — |  | 954 |  | 6 |
Residential land |  | 38,573 |  | 46,988 |  | 2,525 |  | 41,556 |  | 2,382 |
Commercial construction |  | — |  | — |  | — |  | — |  | — |
Residential construction |  | — |  | — |  | — |  | — |  | — |
Commercial loans |  | 48,241 |  | 50,077 |  | 976 |  | 49,083 |  | 3,649 |
Consumer loans |  | 25 |  | 25 |  | — |  | 16 |  | — |
|  | $ | 123,689 |  | $ | 142,238 |  | $ | 3,704 |  | $ | 129,925 |  | $ | 7,267 |
Troubled debt restructurings. A loan modification is deemed to be a TDR when ASB grants a concession it would not otherwise consider were it not for the borrower’s financial difficulty. When a borrower fails to make a required payment on a loan or is in imminent default, ASB takes a number of steps to induce the borrower to cure the delinquency and restore the loan to current status or to avoid payment default. At times, ASB may restructure a loan to help a distressed borrower improve their financial position to eventually be able to fully repay the loan, provided the borrower has demonstrated both the willingness and the ability to handle the modified terms. TDR loans are considered an alternative to foreclosure or liquidation with the goal of minimizing losses to ASB and maximizing recovery. ASB may consider various types of concessions in granting a TDR including maturity date extensions, temporary deferral of principal payments, temporary interest rate reductions, and covenant amendments or waivers. ASB rarely grants principal forgiveness in its TDR modifications. Residential loan modifications generally involve the deferral of principal payments for a period of time not exceeding one year or a temporary reduction of principal and/or interest rate for a period of time generally not exceeding two years. Land loans are typically structured as a three-year term, interest-only monthly payment with a balloon payment due at maturity. Land loan TDR modifications typically involve extending the maturity date another one to three years and converting the payments from interest-only to principal and interest monthly, at the same or higher interest rate. Commercial loan modifications generally involve extensions of maturity dates, amendment or waiver of financial covenants, and to a lesser extent temporary deferral of principal payments. ASB does not reduce the interest rate on commercial loan TDR modifications. Occasionally, additional collateral and/or guaranties are obtained. All TDR loans are classified impaired and are segregated and reviewed separately when assessing the adequacy of the allowance for loan losses based on the appropriate method of measuring impairment: (1) present value of expected future cash flows discounted at the loan’s effective original contractual rate, (2) fair value of collateral less costs to sell, or (3) observable market price. The financial impact of the calculated impairment amount is an increase to the allowance associated with the modified loan. When available information confirms that specific loans or portions thereof are uncollectible (confirmed losses), these amounts are charged off against the allowance for loan losses. L oan modifications that occurred were as follows for the indicated periods:
|  | Three months ended September 30, 2012 |  | Nine months ended September 30, 2012 |
(dollars in thousands) |  | Number of contracts |  | Pre-modification outstanding recorded investment |  | Post-modification outstanding recorded investment |  | Number of contracts |  | Pre-modification outstanding recorded investment |  | Post-modification outstanding recorded investment |
Troubled debt restructurings |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | 4 |  | $ | 1,415 |  | $ | 1,332 |  | 26 |  | $ | 5,884 |  | $ | 5,614 |
Commercial real estate |  | — |  | — |  | — |  | — |  | — |  | — |
Home equity line of credit |  | — |  | — |  | — |  | — |  | — |  | — |
Residential land |  | 6 |  | 1,168 |  | 1,001 |  | 21 |  | 4,676 |  | 4,022 |
Commercial loans |  | 4 |  | 517 |  | 517 |  | 18 |  | 2,546 |  | 2,546 |
Consumer loans |  | — |  | — |  | — |  | — |  | — |  | — |
Total |  | 14 |  | $ | 3,100 |  | $ | 2,850 |  | 65 |  | $ | 13,106 |  | $ | 12,182 |
Loans modified in TDRs that experienced a payment default of 90 days or more, and for which the payment default occurred within one year of the modification, were nil for the three months ended September 30, 2012 and were as follows for the nine months ended September 30, 2012:
|  | Nine months ended September 30, 2012 |
(dollars in thousands) |  | Number of contracts |  | Recorded investment |
Troubled debt restructurings that subsequently defaulted |  |  |  |  |
Real estate loans: |  |  |  |  |
Residential 1-4 family |  | — |  | $ | — |
Commercial real estate |  | — |  | — |
Home equity line of credit |  | — |  | — |
Residential land |  | — |  | — |
Commercial loans |  | 1 |  | 488 |
Consumer loans |  | — |  | — |
Total |  | 1 |  | $ | 488 |
The one commercial loan that subsequently defaulted was modified by temporarily lowering the monthly payments and deferring principal payments for a short period of time. Litigation. In March 2011, a purported class action lawsuit was filed in the First Circuit Court of the State of Hawaii by a customer who claimed that ASB had improperly charged overdraft fees on debit card transactions. The lawsuit is still in its preliminary stage, thus, the probable outcome and range of reasonably possible loss are not determinable at this time. ASB is subject in the normal course of business to pending and threatened legal proceedings. Management does not anticipate that the aggregate ultimate liability arising out of these pending or threatened legal proceedings will be material to its financial position. However, ASB cannot rule out the possibility that such outcomes could have a material adverse effect on the results of operations or liquidity for a particular reporting period in the future.

X
- Details
Name: | he_BankSubsidiaryDisclosureAbstract
Namespace Prefix: | he_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition This element encapsulates disclosures pertaining to banking subsidiary. + References No definition available. + Details
Name: | he_BankSubsidiaryTextBlock
Namespace Prefix: | he_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration