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Fair value measurements (Tables) | 9 Months Ended
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Sep. 30, 2020
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.
|  |  |  | 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, 2020 |  |  |  |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |  |  |  |
HEI consolidated |  |  |  |  |  |  |  |  |  |
Available-for-sale investment securities |  | $ | 1,747,658 |  |  | $ | — |  |  | $ | 1,720,473 |  |  | $ | 27,185 |  |  | $ | 1,747,658 |
Held-to-maturity investment securities |  | 133,858 |  |  | — |  |  | 138,622 |  |  | — |  |  | 138,622 |
Stock in Federal Home Loan Bank |  | 10,920 |  |  | — |  |  | 10,920 |  |  | — |  |  | 10,920 |
Loans, net |  | 5,406,249 |  |  | — |  |  | 16,806 |  |  | 5,574,616 |  |  | 5,591,422 |
Mortgage servicing rights |  | 9,553 |  |  | — |  |  | — |  |  | 10,102 |  |  | 10,102 |
Derivative assets |  | 129,806 |  |  | — |  |  | 5,271 |  |  | — |  |  | 5,271 |
Financial liabilities |  |  |  |  |  |  |  |  |  |
HEI consolidated |  |  |  |  |  |  |  |  |  |
Deposit liabilities |  | 558,177 |  |  | — |  |  | 563,169 |  |  | — |  |  | 563,169 |
Short-term borrowings—other than bank |  | 137,783 |  |  | — |  |  | 137,783 |  |  | — |  |  | 137,783 |
Other bank borrowings |  | 151,875 |  |  | — |  |  | 151,874 |  |  | — |  |  | 151,874 |
Long-term debt, net—other than bank |  | 2,068,852 |  |  | — |  |  | 2,440,950 |  |  | — |  |  | 2,440,950 |
Derivative liabilities |  | 141,611 |  |  | 243 |  |  | 5,041 |  |  | — |  |  | 5,284 |
Hawaiian Electric consolidated |  |  |  |  |  |  |  |  |  |
Short-term borrowings |  | 49,948 |  |  | — |  |  | 49,948 |  |  | — |  |  | 49,948 |
Long-term debt, net |  | 1,561,128 |  |  | — |  |  | 1,895,820 |  |  | — |  |  | 1,895,820 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |  |  |  |
HEI consolidated |  |  |  |  |  |  |  |  |  |
Available-for-sale investment securities |  | $ | 1,232,826 |  |  | $ | — |  |  | $ | 1,204,229 |  |  | $ | 28,597 |  |  | $ | 1,232,826 |
Held-to-maturity investment securities |  | 139,451 |  |  | — |  |  | 143,467 |  |  | — |  |  | 143,467 |
Stock in Federal Home Loan Bank |  | 8,434 |  |  | — |  |  | 8,434 |  |  | — |  |  | 8,434 |
Loans, net |  | 5,080,107 |  |  | — |  |  | 12,295 |  |  | 5,145,242 |  |  | 5,157,537 |
Mortgage servicing rights |  | 9,101 |  |  | — |  |  | — |  |  | 12,379 |  |  | 12,379 |
Derivative assets |  | 25,179 |  |  | — |  |  | 300 |  |  | — |  |  | 300 |
Financial liabilities |  |  |  |  |  |  |  |  |  |
HEI consolidated |  |  |  |  |  |  |  |  |  |
Deposit liabilities |  | 769,825 |  |  | — |  |  | 765,976 |  |  | — |  |  | 765,976 |
Short-term borrowings—other than bank |  | 185,710 |  |  | — |  |  | 185,710 |  |  | — |  |  | 185,710 |
Other bank borrowings |  | 115,110 |  |  | — |  |  | 115,107 |  |  | — |  |  | 115,107 |
Long-term debt, net—other than bank |  | 1,964,365 |  |  | — |  |  | 2,156,927 |  |  | — |  |  | 2,156,927 |
Derivative liabilities |  | 51,375 |  |  | 33 |  |  | 2,185 |  |  | — |  |  | 2,218 |
Hawaiian Electric consolidated |  |  |  |  |  |  |  |  |  |
Short-term borrowings |  | 88,987 |  |  | — |  |  | 88,987 |  |  | — |  |  | 88,987 |
Long-term debt, net |  | 1,497,667 |  |  | — |  |  | 1,670,189 |  |  | — |  |  | 1,670,189 |
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, 2020 |  | December 31, 2019
|  | 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 |  | $ | — |  |  | $ | 1,625,548 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,026,385 |  |  | $ | — |
U.S. Treasury and federal agency obligations |  | — |  |  | 63,588 |  |  | — |  |  | — |  |  | 117,787 |  |  | — |
Corporate bonds |  | — |  |  | 31,337 |  |  | — |  |  | — |  |  | 60,057 |  |  | — |
Mortgage revenue bonds |  | — |  |  | — |  |  | 27,185 |  |  | — |  |  | — |  |  | 28,597 |
|  | $ | — |  |  | $ | 1,720,473 |  |  | $ | 27,185 |  |  | $ | — |  |  | $ | 1,204,229 |  |  | $ | 28,597 |
Derivative assets |  |  |  |  |  |  |  |  |  |  |  |
Interest rate lock commitments (bank segment)1 |  | $ | — |  |  | $ | 5,271 |  |  | $ | — |  |  | $ | — |  |  | $ | 297 |  |  | $ | — |
Forward commitments (bank segment)1 |  | — |  |  | — |  |  | — |  |  | — |  |  | 3 |  |  | — |
|  | $ | — |  |  | $ | 5,271 |  |  | $ | — |  |  | $ | — |  |  | $ | 300 |  |  | $ | — |
Derivative liabilities |  |  |  |  |  |  |  |  |  |  |  |
Forward commitments (bank segment)1 |  | $ | 243 |  |  | $ | — |  |  | $ | — |  |  | $ | 33 |  |  | $ | 12 |  |  | $ | — |
Interest rate swap (Other segment)2 |  | — |  |  | 5,041 |  |  | — |  |  | — |  |  | 2,173 |  |  | — |
|  | $ | 243 |  |  | $ | 5,041 |  |  | $ | — |  |  | $ | 33 |  |  | $ | 2,185 |  |  | $ | — |
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 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 |  | 2020 | 2019 |  | 2020 | 2019
(in thousands) |  |  |  |  |  |
Beginning balance |  | $ | 28,827 |  | $ | 28,166 |  |  | $ | 28,597 |  | $ | 23,636 |
Principal payments received |  | (1,642) |  | — |  |  | (1,642) |  | — |
Purchases |  | — |  | 293 |  |  | 230 |  | 4,823 |
Unrealized gain (loss) included in other comprehensive income |  | — |  | — |  |  | — |  | — |
Ending balance |  | $ | 27,185 |  | $ | 28,459 |  |  | $ | 27,185 |  | $ | 28,459 |
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, 2020 |  |  |  |  |  |  |  |
Mortgage servicing rights |  | $ | 6,260 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,260 |
December 31, 2019 |  |  |  |  |  |  |  |
Loans |  | 25 |  |  | — |  |  | — |  |  | 25 |
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, 2020 |  | December 31, 2019
Unpaid principal balance |  | $ | 1,456,434 |  |  | $ | 1,276,437 |
Weighted average note rate |  | 3.77 | % |  | 3.96 | %
Weighted average discount rate |  | 9.3 | % |  | 9.3 | %
Weighted average prepayment speed |  | 17.8 | % |  | 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)
($ in thousands) |  | Fair value |  | Valuation technique |  | Significant unobservable input |  | Range |  | Weighted Average
September 30, 2020 |  |  |  |  |  |  |  |  |  |
Mortgage servicing rights |  | $ | 6,260 |  |  | Discounted cash flow |  | Prepayment Speed |  | 11.2% - 21.3% |  | 17.5 | %
|  |  |  |  |  | Discount rate |  | 9.3 | % |  | 9.3 | %
December 31, 2019 |  |  |  |  |  |  |  |  |  |
Residential land |  | $ | 25 |  |  | Fair value of property or collateral |  | Appraised value less 7% selling cost |  | N/A (2) |  | N/A (2)
Total loans |  | $ | 25 |  |  |  |  |  |  |  |  |
(1) Represents percent of outstanding principal balance. (2) N/A - Not applicable. There is one asset 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=117815213&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=117815213&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=117815213&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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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