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Fair value measurements (Tables) | 9 Months Ended
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Sep. 30, 2018
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 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
September 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
HEI consolidated |  |  |  |  |  |  |  |  |  |
Available-for-sale investment securities |  | $ | 1,387,571 |  |  | $ | — |  |  | $ | 1,368,487 |  |  | $ | 19,084 |  |  | $ | 1,387,571 |
Held-to-maturity investment securities |  | 102,498 |  |  | — |  |  | 99,929 |  |  | — |  |  | 99,929 |
Stock in Federal Home Loan Bank |  | 8,158 |  |  | — |  |  | 8,158 |  |  | — |  |  | 8,158 |
Loans, net |  | 4,701,268 |  |  | — |  |  | 1,031 |  |  | 4,671,635 |  |  | 4,672,666 |
Mortgage servicing rights |  | 8,426 |  |  | — |  |  | — |  |  | 13,443 |  |  | 13,443 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
HEI consolidated |  |  |  |  |  |  |  |  |  |
Deposit liabilities 1 |  | 805,117 |  |  | — |  |  | 791,753 |  |  | — |  |  | 791,753 |
Short-term borrowings—other than bank |  | 203,359 |  |  | — |  |  | 203,359 |  |  | — |  |  | 203,359 |
Other bank borrowings |  | 71,110 |  |  | — |  |  | 71,107 |  |  | — |  |  | 71,107 |
Long-term debt, net—other than bank |  | 1,782,242 |  |  | — |  |  | 1,805,682 |  |  | — |  |  | 1,805,682 |
Derivative liabilities |  | 3,023 |  |  | — |  |  | 27 |  |  | — |  |  | 27 |
Hawaiian Electric consolidated |  |  |  |  |  |  |  |  |  |
Short-term borrowings |  | 85,913 |  |  | — |  |  | 85,913 |  |  | — |  |  | 85,913 |
Long-term debt, net |  | 1,468,624 |  |  | — |  |  | 1,503,508 |  |  | — |  |  | 1,503,508 |
Derivative liabilities-window forward contracts |  | 3,023 |  |  | — |  |  | 27 |  |  | — |  |  | 27 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
HEI consolidated |  |  |  |  |  |  |  |  |  |
Available-for-sale investment securities |  | 1,401,198 |  |  | — |  |  | 1,385,771 |  |  | 15,427 |  |  | 1,401,198 |
Held-to-maturity investment securities |  | 44,515 |  |  | — |  |  | 44,412 |  |  | — |  |  | 44,412 |
Stock in Federal Home Loan Bank |  | 9,706 |  |  | — |  |  | 9,706 |  |  | — |  |  | 9,706 |
Loans, net |  | 4,628,381 |  |  | — |  |  | 11,254 |  |  | 4,770,497 |  |  | 4,781,751 |
Mortgage servicing rights |  | 8,639 |  |  | — |  |  | — |  |  | 12,052 |  |  | 12,052 |
Derivative assets |  | 17,812 |  |  | — |  |  | 393 |  |  | — |  |  | 393 |
Hawaiian Electric consolidated |  |  |  |  |  |  |  |  |  |
Derivative assets-window forward contracts |  | 3,240 |  |  | — |  |  | 256 |  |  | — |  |  | 256 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
HEI consolidated |  |  |  |  |  |  |  |  |  |
Deposit liabilities 1 |  | 5,890,597 |  |  | — |  |  | 5,884,071 |  |  | — |  |  | 5,884,071 |
Short-term borrowings—other than bank |  | 117,945 |  |  | — |  |  | 117,945 |  |  | — |  |  | 117,945 |
Other bank borrowings |  | 190,859 |  |  | — |  |  | 190,829 |  |  | — |  |  | 190,829 |
Long-term debt, net—other than bank |  | 1,683,797 |  |  | — |  |  | 1,813,295 |  |  | — |  |  | 1,813,295 |
Derivative liabilities |  | 13,562 |  |  | 20 |  |  | 10 |  |  | — |  |  | 30 |
Hawaiian Electric consolidated |  |  |  |  |  |  |  |  |  |
Short-term borrowings |  | 4,999 |  |  | — |  |  | 4,999 |  |  | — |  |  | 4,999 |
Long-term debt, net |  | 1,368,479 |  |  | — |  |  | 1,497,079 |  |  | — |  |  | 1,497,079 |
1 Deposit liabilities as of December 31, 2017 include noninterest-bearing demand, interest-bearing demand, and savings and money market deposits, for which the carrying amount represents a reasonable estimate of fair value, as such liabilities have no stated maturity. The fair value of such financial liabilities are not included as of September 30, 2018 as a result of the Company’s adoption of ASU No. 2016-01.
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, 2018 |  | December 31, 2017
|  | 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-related securities-FNMA, FHLMC and GNMA |  | $ | — |  |  | $ | 1,148,690 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,201,473 |  |  | $ | — |
U.S. Treasury and federal agency obligations |  | — |  |  | 170,414 |  |  | — |  |  | — |  |  | 184,298 |  |  | — |
Corporate bonds |  | — |  |  | 49,383 |  |  | — |  |  | — |  |  | — |  |  | — |
Mortgage revenue bonds |  | — |  |  | — |  |  | 19,084 |  |  | — |  |  | — |  |  | 15,427 |
|  | $ | — |  |  | $ | 1,368,487 |  |  | $ | 19,084 |  |  | $ | — |  |  | $ | 1,385,771 |  |  | $ | 15,427 |
Derivative assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate lock commitments (bank segment) 1 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 133 |  |  | $ | — |
Forward commitments (bank segment) 1 |  | — |  |  | — |  |  | — |  |  | — |  |  | 4 |  |  | — |
Window forward contracts (electric utility segment)2 |  | — |  |  | — |  |  | — |  |  | — |  |  | 256 |  |  | — |
|  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 393 |  |  | $ | — |
Derivative liabilities |  |  |  |  |  |  |  |  |  |  |  |
Interest rate lock commitments (bank segment) 1 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |
Forward commitments (bank segment) 1 |  | — |  |  | — |  |  | — |  |  | 20 |  |  | 8 |  |  | — |
Window forward contracts (electric utility segment)2 |  | — |  |  | 27 |  |  | — |  |  | — |  |  | — |  |  | — |
|  | $ | — |  |  | $ | 27 |  |  | $ | — |  |  | $ | 20 |  |  | $ | 10 |  |  | $ | — |
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 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 September 30 |  | Nine months ended September 30
Mortgage revenue bonds |  | 2018 | 2017 |  | 2018 | 2017
(in thousands) |  |  |  |  |  |
Beginning balance |  | $ | 15,427 |  | $ | 15,427 |  |  | $ | 15,427 |  | $ | 15,427 |
Principal payments received |  | — |  | — |  |  | — |  | — |
Purchases |  | 3,657 |  | — |  |  | 3,657 |  | — |
Unrealized gain (loss) included in other comprehensive income |  | — |  | — |  |  | — |  | — |
Ending balance |  | $ | 19,084 |  | $ | 15,427 |  |  | $ | 19,084 |  | $ | 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
Loans |  |  |  |  |  |  |  |
September 30, 2018 |  | $ | 77 |  |  | $ | — |  |  | $ | — |  |  | $ | 77 |
December 31, 2017 |  | 2,621 |  |  | — |  |  | — |  |  | 2,621 |
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, 2018 |  |  | December 31, 2017 |
Unpaid principal balance |  | $ | 1,206,025 |  |  | $ | 1,195,454 |
Weighted average note rate |  | 3.98 | % |  | 3.94 | %
Weighted average discount rate |  | 10.0 | % |  | 10.0 | %
Weighted average prepayment speed |  | 7.0 | % |  | 9.0 | %
The following table summarizes the assumptions used to determine the fair value of the LTIP awards linked to TSR and the resulting fair value of LTIP awards granted:
|  | 2018 |  |  | 2017 |
Risk-free interest rate |  | 2.29 | % |  | 1.46 | %
Expected life in years |  | 3 |  |  | 3 |
Expected volatility |  | 17.0 | % |  | 20.1 | %
Range of expected volatility for Peer Group |  | 15.1% to 26.2% |  |  | 15.4% to 26.0% |
Grant date fair value (per share) |  | $38.20 |  | $39.51
The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis:
|  |  |  |  |  |  |  | Significant unobservable input value (1)
($ in thousands) |  | Fair value |  | Valuation technique |  | Significant unobservable input |  | Range |  | Weighted Average
September 30, 2018 |  |  |  |  |  |  |  |  |  |
Home equity lines of credit |  | $ | 77 |  |  | Fair value of collateral |  | Appraised value less 7% selling cost |  |  |  | N/A (2)
Total loans |  | $ | 77 |  |  |  |  |  |  |  |  |
December 31, 2017 |  |  |  |  |  |  |  |  |  |
Residential loans |  | $ | 613 |  |  | Fair value of collateral |  | Appraised value less 7% selling cost |  | 71-92% |  | 84%
Commercial loans |  | 2,008 |  |  | Fair value of collateral |  | Appraised value |  | 71-76% |  | 75%
Total loans |  | $ | 2,621 |  |  |  |  |  |  |  |  |
(1) Represent percent of outstanding principal balance. (2) N/A - Not applicable. There is one loan in each fair value measurement type.

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- Definition Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bbb) -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19190-110258 + Details
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- Definition Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19279-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258 + Details
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- Definition Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19190-110258 + Details
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