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Bank segment (HEI only) | 12 Months Ended
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Dec. 31, 2021
Bank Segment Disclosure [Abstract] |
Bank segment (HEI only) |
Note 4· Bank segment (HEI only)
Selected financial information American Savings Bank, F.S.B. Statements of Income and Comprehensive Income Data
Years ended December 31 | 2021 |  | 2020 |  | 2019
(in thousands) |  |  |  |  |
Interest and dividend income |  |  |  |  |
Interest and fees on loans | $ | 198,802 |  |  | $ | 214,134 |  |  | $ | 233,632 |
Interest and dividends on investment securities | 43,464 |  |  | 30,529 |  |  | 32,922 |
Total interest and dividend income | 242,266 |  |  | 244,663 |  |  | 266,554 |
Interest expense |  |  |  |  |
Interest on deposit liabilities | 4,981 |  |  | 10,654 |  |  | 16,830 |
Interest on other borrowings | 59 |  |  | 460 |  |  | 1,610 |
Total interest expense | 5,040 |  |  | 11,114 |  |  | 18,440 |
Net interest income | 237,226 |  |  | 233,549 |  |  | 248,114 |
Provision for credit losses | (25,825) |  |  | 50,811 |  |  | 23,480 |
Net interest income after provision for credit losses | 263,051 |  |  | 182,738 |  |  | 224,634 |
Noninterest income |  |  |  |  |
Fees from other financial services | 21,225 |  |  | 16,447 |  |  | 19,275 |
Fee income on deposit liabilities | 16,663 |  |  | 16,059 |  |  | 20,877 |
Fee income on other financial products | 8,770 |  |  | 6,381 |  |  | 6,507 |
Bank-owned life insurance | 7,318 |  |  | 6,483 |  |  | 7,687 |
Mortgage banking income | 9,305 |  |  | 23,734 |  |  | 4,943 |
Gain on sale of real estate | — |  |  | — |  |  | 10,762 |
Gain on sale of investment securities, net | 528 |  |  | 9,275 |  |  | 653 |
Other income, net | 851 |  |  | (256) |  |  | 2,074 |
Total noninterest income | 64,660 |  |  | 78,123 |  |  | 72,778 |
Noninterest expense |  |  |  |  |
Compensation and employee benefits | 113,970 |  |  | 104,443 |  |  | 103,009 |
Occupancy | 20,584 |  |  | 21,573 |  |  | 21,272 |
Data processing | 17,634 |  |  | 14,769 |  |  | 15,306 |
Services | 10,327 |  |  | 11,121 |  |  | 10,239 |
Equipment | 9,510 |  |  | 9,001 |  |  | 8,760 |
Office supplies, printing and postage | 4,239 |  |  | 4,623 |  |  | 5,512 |
Marketing | 3,870 |  |  | 3,435 |  |  | 4,490 |
FDIC insurance | 3,235 |  |  | 2,342 |  |  | 1,204 |
Other expense 1 | 13,783 |  |  | 20,283 |  |  | 15,586 |
Total noninterest expense | 197,152 |  |  | 191,590 |  |  | 185,378 |
Income before income taxes | 130,559 |  |  | 69,271 |  |  | 112,034 |
Income taxes | 29,325 |  |  | 11,688 |  |  | 23,061 |
Net income | 101,234 |  |  | 57,583 |  |  | 88,973 |
Other comprehensive income (loss), net of taxes | (52,728) |  |  | 23,608 |  |  | 29,406 |
Comprehensive income | $ | 48,506 |  |  | $ | 81,191 |  |  | $ | 118,379 |
1 2021 and 2020 include approximately $0.6 million and $5.1 million of certain direct and incremental COVID-19 related costs, respectively. For 2020, these costs 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 | 2021 |  | 2020 |  | 2019
(in thousands) |  |  |  |  |
Interest and dividend income | $ | 242,266 |  |  | $ | 244,663 |  |  | $ | 266,554 |
Noninterest income | 64,660 |  |  | 78,123 |  |  | 72,778 |
Less: Gain on sale of real estate | — |  |  | — |  |  | 10,762 |
Less: Gain on sale of investment securities, net | 528 |  |  | 9,275 |  |  | 653 |
*Revenues-Bank | 306,398 |  |  | 313,511 |  |  | 327,917 |
Total interest expense | 5,040 |  |  | 11,114 |  |  | 18,440 |
Provision for credit losses | (25,825) |  |  | 50,811 |  |  | 23,480 |
Noninterest expense | 197,152 |  |  | 191,590 |  |  | 185,378 |
Less: Retirement defined benefits expense (credit)—other than service costs | (1,828) |  |  | 1,813 |  |  | (472) |
Add: Gain on sale of real estate | — |  |  | — |  |  | 10,762 |
*Expenses-Bank | 178,195 |  |  | 251,702 |  |  | 217,008 |
*Operating income-Bank | 128,203 |  |  | 61,809 |  |  | 110,909 |
Add back: Retirement defined benefits expense (credit)—other than service costs | (1,828) |  |  | 1,813 |  |  | (472) |
Add back: Gain on sale of investment securities, net | 528 |  |  | 9,275 |  |  | 653 |
Income before income taxes | $ | 130,559 |  |  | $ | 69,271 |  |  | $ | 112,034 |
Balance Sheets Data
December 31 |  | 2021 |  | 2020
(in thousands) |  |  |  |
Assets |  |  |  |
Cash and due from banks |  | $ | 100,051 |  |  | $ | 178,422 |
Interest-bearing deposits |  | 151,189 |  |  | 114,304 |
Cash and cash equivalents |  | 251,240 |  |  | 292,726 |
Investment securities |  |  |  |
Available-for-sale, at fair value |  | 2,574,618 |  |  | 1,970,417 |
Held-to-maturity, at amortized cost (fair value of $510,474 and $229,963 at December 31, 2021 and 2020, respectively) |  | 522,270 |  |  | 226,947 |
Stock in Federal Home Loan Bank, at cost |  | 10,000 |  |  | 8,680 |
Loans held for investment |  | 5,211,114 |  |  | 5,333,843 |
Allowance for credit losses |  | (71,130) |  |  | (101,201) |
Net loans |  | 5,139,984 |  |  | 5,232,642 |
Loans held for sale, at lower of cost or fair value |  | 10,404 |  |  | 28,275 |
Other |  | 590,897 |  |  | 554,656 |
Goodwill |  | 82,190 |  |  | 82,190 |
Total assets |  | $ | 9,181,603 |  |  | $ | 8,396,533 |
Liabilities and shareholder’s equity |  |  |  |
Deposit liabilities–noninterest-bearing |  | $ | 2,976,632 |  |  | $ | 2,598,500 |
Deposit liabilities–interest-bearing |  | 5,195,580 |  |  | 4,788,457 |
Other borrowings |  | 88,305 |  |  | 89,670 |
Other |  | 193,268 |  |  | 183,731 |
Total liabilities |  | 8,453,785 |  |  | 7,660,358 |
Commitments and contingencies |  |  |  |
Common stock |  | 1 |  |  | 1 |
Additional paid in capital |  | 353,895 |  |  | 351,758 |
Retained earnings |  | 411,704 |  |  | 369,470 |
Accumulated other comprehensive income (loss), net of taxes |  |  |  |
Net unrealized gains (losses) on securities | $ | (32,037) |  |  | $ | 19,986 |  |
Retirement benefit plans | (5,745) |  | (37,782) |  | (5,040) |  | 14,946 |
Total shareholder’s equity |  | 727,818 |  |  | 736,175 |
Total liabilities and shareholder’s equity |  | $ | 9,181,603 |  |  | $ | 8,396,533 |
December 31 |  | 2021 |  | 2020
(in thousands) |  |  |  |
Other assets |  |  |  |
Bank-owned life insurance |  | $ | 177,566 |  |  | $ | 163,265 |
Premises and equipment, net |  | 202,299 |  |  | 206,134 |
Accrued interest receivable |  | 20,854 |  |  | 24,616 |
Mortgage servicing rights |  | 9,950 |  |  | 10,020 |
Low-income housing investments |  | 110,989 |  |  | 83,435 |
Other |  | 69,239 |  |  | 67,186 |
|  | $ | 590,897 |  |  | $ | 554,656 |
Other liabilities |  |  |  |
Accrued expenses |  | $ | 87,905 |  |  | $ | 62,694 |
Federal and state income taxes payable |  | — |  |  | 6,582 |
Cashier’s checks |  | 33,675 |  |  | 38,011 |
Advance payments by borrowers |  | 9,994 |  |  | 10,207 |
Other |  | 61,694 |  |  | 66,237 |
|  | $ | 193,268 |  |  | $ | 183,731 |
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. Investment securities. 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, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and federal agency obligations | $ | 89,714 |  |  | $ | 803 |  |  | $ | (427) |  |  | $ | 90,090 |  |  | 4 |  | $ | 44,827 |  |  | $ | (427) |  |  | — |  | $ | — |  |  | $ | — |
Mortgage-backed securities* | 2,482,618 |  |  | 6,511 |  |  | (51,206) |  |  | 2,437,923 |  |  | 120 |  | 1,845,243 |  |  | (38,321) |  |  | 18 |  | 271,012 |  |  | (12,885) |
Corporate bonds | 30,625 |  |  | 655 |  |  | (102) |  |  | 31,178 |  |  | 1 |  | 12,780 |  |  | (102) |  |  | — |  | — |  |  | — |
Mortgage revenue bonds | 15,427 |  |  | — |  |  | — |  |  | 15,427 |  |  | — |  | — |  |  | — |  |  | — |  | — |  |  | — |
| $ | 2,618,384 |  |  | $ | 7,969 |  |  | $ | (51,735) |  |  | $ | 2,574,618 |  |  | 125 |  | $ | 1,902,850 |  |  | $ | (38,850) |  |  | 18 |  | $ | 271,012 |  |  | $ | (12,885) |
Held-to-maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury and Federal agency obligations | $ | 59,871 |  |  | $ | 168 |  |  | $ | (170) |  |  | $ | 59,869 |  |  | 2 |  | $ | 39,594 |  |  | $ | (170) |  |  | — |  | $ | — |  |  | $ | — |
Mortgage-backed securities* | 462,399 |  |  | 1,480 |  |  | (13,274) |  |  | 450,605 |  |  | 22 |  | 290,883 |  |  | (7,665) |  |  | 7 |  | 106,483 |  |  | (5,609) |
| $ | 522,270 |  |  | $ | 1,648 |  |  | $ | (13,444) |  |  | $ | 510,474 |  |  | 24 |  | $ | 330,477 |  |  | $ | (7,835) |  |  | 7 |  | $ | 106,483 |  |  | $ | (5,609) |
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) |  |  | — |  | $ | — |  |  | $ | — |
* Issued or guaranteed by U.S. Government agencies or sponsored agencies ASB does not believe that the investment securities that were in an unrealized loss position as of December 31, 2021, represent a credit loss. Total gross unrealized losses were primarily attributable to change in market conditions. On a quarterly basis the investment securities are evaluated for changes in financial condition of the issuer. Based upon ASB’s evaluation, all securities held within the investment portfolio continue to be investment grade by one or more agencies. The contractual cash flows of the U.S. Treasury, federal agency obligations and agency mortgage-backed securities are backed by the full faith and credit guaranty of the United States government or an agency of the government. ASB does not intend to sell the securities before the recovery of its amortized cost basis and there have been no adverse changes in the timing of the contractual cash flows for the securities. ASB’s investment securities portfolio did not require an allowance for credit losses as of December 31, 2021. U.S. Treasury, federal agency obligations, corporate bonds, and mortgage revenue bonds have contractual terms to maturity. Mortgage-backed securities have contractual terms to maturity, but require periodic payments to reduce principal. In addition, expected maturities will differ from contractual maturities because borrowers have the right to prepay the underlying mortgages. The contractual maturities of investment securities were as follows:
| Amortized |  | Fair
December 31, 2021 | Cost |  | value
(in thousands) |  |  |
Available-for-sale |  |  |
Due in one year or less | $ | 15,055 |  |  | $ | 15,298 |
Due after one year through five years | 62,461 |  |  | 63,256 |
Due after five years through ten years | 58,250 |  |  | 58,141 |
Due after ten years | — |  |  | — |
| 135,766 |  |  | 136,695 |
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies | 2,482,618 |  |  | 2,437,923 |
Total available-for-sale securities | $ | 2,618,384 |  |  | $ | 2,574,618 |
Held-to-maturity |  |  |
Due in one year or less | $ | — |  |  | $ | — |
Due after one year through five years | — |  |  | — |
Due after five years through ten years | 59,871 |  |  | 59,869 |
Due after ten years | — |  |  | — |
| 59,871 |  |  | 59,869 |
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies | 462,399 |  |  | 450,605 |
Total held-to-maturity securities | $ | 522,270 |  |  | $ | 510,474 |
The proceeds, gross gains and losses from sales of available-for-sale securities were as follows:
Years ended December 31 | 2021 |  | 2020 |  | 2019
(in thousands) |  |  |  |  |
Proceeds | $ | 197,354 |  |  | $ | 169,157 |  |  | $ | 19,810 |
Gross gains | 975 |  |  | 9,275 |  |  | 653 |
Gross losses | (447) |  |  | — |  |  | — |
Interest income from taxable and non-taxable investment securities were as follows:
Years ended December 31 | 2021 |  | 2020 |  | 2019
(in thousands) |  |  |  |  |
Taxable | $ | 42,534 |  |  | $ | 29,760 |  |  | $ | 31,848 |
Non-taxable | 930 |  |  | 769 |  |  | 1,074 |
| $ | 43,464 |  |  | $ | 30,529 |  |  | $ | 32,922 |
ASB pledged securities with a market value of approximately $416 million and $353 million as of December 31, 2021 and 2020, respectively, as collateral for public funds and other deposits, mortgage pipeline hedge margin, automated clearinghouse transactions, The Federal Reserve Bank of San Francisco Discount Window and bankruptcy account, and The Federal Home Loan Bank of Des Moines advance line. In addition, ASB pledged securities with a market value of $161 million and $92 million as of December 31, 2021 and 2020, respectively, as collateral for securities sold under agreements to repurchase. Stock in FHLB. As of December 31, 2021 and 2020, ASB’s stock in FHLB was carried at cost ($10.0 million and $8.7 million, respectively) because it can only be redeemed at par and it is a required investment based on measurements of ASB’s capital, assets and borrowing levels. Quarterly and as conditions warrant, ASB reviews its investment in the stock of the FHLB for impairment. ASB evaluated its investment in FHLB stock for credit losses as of December 31, 2021, consistent with its accounting policy. ASB did not recognize any credit losses for 2021, 2020 and 2019 based on its evaluation of the underlying investment. Future deterioration in the FHLB’s financial position and/or negative developments in any of the factors considered in ASB’s impairment evaluation may result in future impairment losses. Loans. The components of loans were summarized as follows:
December 31 | 2021 |  | 2020
(in thousands) |  |  |
Real estate: |  |  |
Residential 1-4 family | $ | 2,299,212 |  |  | $ | 2,144,239 |
Commercial real estate | 1,056,982 |  |  | 983,865 |
Home equity line of credit | 835,663 |  |  | 963,578 |
Residential land | 19,859 |  |  | 15,617 |
Commercial construction | 91,080 |  |  | 121,424 |
Residential construction | 11,138 |  |  | 11,022 |
Total real estate | 4,313,934 |  |  | 4,239,745 |
Commercial | 793,304 |  |  | 936,748 |
Consumer | 113,966 |  |  | 168,733 |
Total loans | 5,221,204 |  |  | 5,345,226 |
Less: Deferred fees and discounts | (10,090) |  |  | (11,383) |
Allowance for credit losses | (71,130) |  |  | (101,201) |
Total loans, net | $ | 5,139,984 |  |  | $ | 5,232,642 |
ASB’s policy is to require private mortgage insurance on all real estate loans when the loan-to-value ratio of the property exceeds 80% of the lower of the appraised value or purchase price at origination. For non-owner occupied residential property purchases, the loan-to-value ratio may not exceed 75% of the lower of the appraised value or purchase price at origination. ASB services real estate loans for investors (principal balance of $1.5 billion, $1.5 billion and $1.3 billion as of December 31, 2021, 2020 and 2019, respectively), which are not included in the accompanying balance sheets data. ASB reports fees earned for servicing such loans as income when the related mortgage loan payments are collected and charges loan servicing cost to expense as incurred. As of December 31, 2021 and 2020, ASB had pledged loans with an amortized cost of approximately $2.8 billion and $3.0 billion, respectively, as collateral to secure advances from the FHLB. As of December 31, 2021 and 2020, the aggregate amount of loans to directors and executive officers of ASB and its affiliates and any related interests (as defined in Federal Reserve Board (FRB) Regulation O) of such individuals, was $13.1 million and $13.2 million, respectively. As of December 31, 2021 and 2020, there was a loan to a related interest of a director of ASB for $10.0 million. The loan was made at ASB’s normal credit terms. Allowance for credit losses. As discussed in Note 1, ASB must maintain an allowance for credit losses that is adequate to absorb estimated expected credit losses associated with its loan portfolio. 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, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 4,600 |  |  | $ | 35,607 |  |  | $ | 6,813 |  |  | $ | 609 |  |  | $ | 4,149 |  |  | $ | 11 |  |  | $ | 25,462 |  |  | $ | 23,950 |  |  |  |  | $ | 101,201 |
Charge-offs | (67) |  |  | — |  |  | (45) |  |  | — |  |  | — |  |  | — |  |  | (1,561) |  |  | (8,027) |  |  |  |  | (9,700) |
Recoveries | 92 |  |  | — |  |  | 113 |  |  | 61 |  |  | — |  |  | — |  |  | 1,468 |  |  | 4,320 |  |  |  |  | 6,054 |
Net (charge-offs) recoveries | 25 |  |  | — |  |  | 68 |  |  | 61 |  |  | — |  |  | — |  |  | (93) |  |  | (3,707) |  |  |  |  | (3,646) |
Provision | 1,920 |  |  | (10,911) |  |  | (1,224) |  |  | (24) |  |  | (1,963) |  |  | 7 |  |  | (9,571) |  |  | (4,659) |  |  |  |  | (26,425) |
Ending balance | $ | 6,545 |  |  | $ | 24,696 |  |  | $ | 5,657 |  |  | $ | 646 |  |  | $ | 2,186 |  |  | $ | 18 |  |  | $ | 15,798 |  |  | $ | 15,584 |  |  |  |  | $ | 71,130 |
Average loans outstanding | $ | 2,155,322 |  |  | $ | 1,046,276 |  |  | $ | 885,759 |  |  | $ | 18,227 |  |  | $ | 111,711 |  |  | $ | 11,361 |  |  | $ | 856,226 |  |  | $ | 135,609 |  |  |  |  | $ | 5,220,491 |
Net charge-offs (recoveries) to average loans | — | % |  | — | % |  | (0.01 | %) |  | (0.33 | %) |  | — | % |  | — | % |  | 0.01 | % |  | 2.73 | % |  |  |  | 0.07 | %
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 |
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, 2021 |  |  |  |  |  |  |  |
Allowance for loan commitments: |  |  |  |  |  |  |  |
Beginning balance |  | $ | 300 |  |  | $ | 3,000 |  |  | $ | 1,000 |  |  | $ | 4,300 |
Provision |  | 100 |  |  | 700 |  |  | (200) |  |  | 600 |
Ending balance |  | $ | 400 |  |  | $ | 3,700 |  |  | $ | 800 |  |  | $ | 4,900 |
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 |
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, commercial real estate and commercial construction loans. Each commercial and commercial real estate loan is assigned an Asset Quality Rating (AQR) reflecting the likelihood of repayment or orderly liquidation of that loan transaction pursuant to regulatory credit classifications: Pass, Special Mention, Substandard, Doubtful, and Loss. The AQR is a function of the probability of default model rating, the loss given default, and possible non-model factors which impact the ultimate collectability of the loan such as character of the business owner/guarantor, interim period performance, litigation, tax liens and major changes in business and economic conditions. 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. Special Mention loans have potential weaknesses that, if left uncorrected, could jeopardize the liquidation of the debt. Substandard loans have well-defined weaknesses that jeopardize the liquidation of the debt and are characterized by the distinct possibility that ASB may sustain some loss. An asset classified Doubtful has the weaknesses of those classified Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. An asset classified Loss is considered uncollectible and has such little value that its continuance as a bankable asset is not warranted. 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) |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving loans |  | Converted to term loans |  | Total
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 791,758 |  |  | $ | 461,683 |  |  | $ | 133,345 |  |  | $ | 64,421 |  |  | $ | 124,994 |  |  | $ | 712,452 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,288,653 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | 809 |  |  | — |  |  | 2,210 |  |  | — |  |  | — |  |  | 3,019 |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,468 |  |  | — |  |  | — |  |  | 1,468 |
Greater than 89 days past due |  | — |  |  | — |  |  | 2,987 |  |  | — |  |  | — |  |  | 3,085 |  |  | — |  |  | — |  |  | 6,072 |
|  | 791,758 |  |  | 461,683 |  |  | 136,332 |  |  | 65,230 |  |  | 124,994 |  |  | 719,215 |  |  | — |  |  | — |  |  | 2,299,212 |
Home equity line of credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 794,518 |  |  | 39,116 |  |  | 833,634 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 296 |  |  | 313 |  |  | 609 |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 16 |  |  | 70 |  |  | 86 |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 838 |  |  | 496 |  |  | 1,334 |
|  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 795,668 |  |  | 39,995 |  |  | 835,663 |
Residential land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 10,572 |  |  | 6,794 |  |  | 1,116 |  |  | 532 |  |  | 267 |  |  | 181 |  |  | — |  |  | — |  |  | 19,462 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 397 |  |  | — |  |  | — |  |  | 397 |
|  | 10,572 |  |  | 6,794 |  |  | 1,116 |  |  | 532 |  |  | 267 |  |  | 578 |  |  | — |  |  | — |  |  | 19,859 |
Residential construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 7,856 |  |  | 3,019 |  |  | — |  |  | — |  |  | 263 |  |  | — |  |  | — |  |  | — |  |  | 11,138 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 7,856 |  |  | 3,019 |  |  | — |  |  | — |  |  | 263 |  |  | — |  |  | — |  |  | — |  |  | 11,138 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 37,563 |  |  | 15,488 |  |  | 29,383 |  |  | 10,897 |  |  | 302 |  |  | 238 |  |  | 12,740 |  |  | 4,157 |  |  | 110,768 |
30-59 days past due |  | 202 |  |  | 181 |  |  | 517 |  |  | 234 |  |  | 15 |  |  | — |  |  | 156 |  |  | 70 |  |  | 1,375 |
60-89 days past due |  | 59 |  |  | 127 |  |  | 392 |  |  | 183 |  |  | 8 |  |  | — |  |  | 7 |  |  | 106 |  |  | 882 |
Greater than 89 days past due |  | 14 |  |  | 93 |  |  | 387 |  |  | 192 |  |  | 27 |  |  | — |  |  | 141 |  |  | 87 |  |  | 941 |
|  | 37,838 |  |  | 15,889 |  |  | 30,679 |  |  | 11,506 |  |  | 352 |  |  | 238 |  |  | 13,044 |  |  | 4,420 |  |  | 113,966 |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 173,794 |  |  | 275,242 |  |  | 49,317 |  |  | 56,490 |  |  | 33,581 |  |  | 259,583 |  |  | 11,602 |  |  | — |  |  | 859,609 |
Special Mention |  | 19,600 |  |  | 3,529 |  |  | 42,935 |  |  | 30,870 |  |  | 20,788 |  |  | 32,824 |  |  | — |  |  | — |  |  | 150,546 |
Substandard |  | — |  |  | 684 |  |  | 13,936 |  |  | 1,859 |  |  | 1,805 |  |  | 28,543 |  |  | — |  |  | — |  |  | 46,827 |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 193,394 |  |  | 279,455 |  |  | 106,188 |  |  | 89,219 |  |  | 56,174 |  |  | 320,950 |  |  | 11,602 |  |  | — |  |  | 1,056,982 |
Commercial construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 17,140 |  |  | 43,261 |  |  | — |  |  | 11,342 |  |  | — |  |  | — |  |  | 19,337 |  |  | — |  |  | 91,080 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 17,140 |  |  | 43,261 |  |  | — |  |  | 11,342 |  |  | — |  |  | — |  |  | 19,337 |  |  | — |  |  | 91,080 |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 266,087 |  |  | 96,963 |  |  | 79,329 |  |  | 56,497 |  |  | 31,019 |  |  | 66,570 |  |  | 96,673 |  |  | 15,510 |  |  | 708,648 |
Special Mention |  | 40 |  |  | 27,336 |  |  | 10,071 |  |  | 202 |  |  | 439 |  |  | 8,966 |  |  | 15,303 |  |  | 18 |  |  | 62,375 |
Substandard |  | 427 |  |  | 184 |  |  | 3,737 |  |  | 1,777 |  |  | 4,457 |  |  | 2,961 |  |  | 7,083 |  |  | 1,655 |  |  | 22,281 |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 266,554 |  |  | 124,483 |  |  | 93,137 |  |  | 58,476 |  |  | 35,915 |  |  | 78,497 |  |  | 119,059 |  |  | 17,183 |  |  | 793,304 |
Total loans |  | $ | 1,325,112 |  |  | $ | 934,584 |  |  | $ | 367,452 |  |  | $ | 236,305 |  |  | $ | 217,965 |  |  | $ | 1,119,478 |  |  | $ | 958,710 |  |  | $ | 61,598 |  |  | $ | 5,221,204 |
|  | 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 2021 in the commercial, home equity line of credit and consumer portfolios were $1.8 million, $16.0 million and $2.7 million, respectively. 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, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family | $ | 3,019 |  |  | $ | 1,468 |  |  | $ | 6,072 |  |  | $ | 10,559 |  |  | $ | 2,288,653 |  |  | $ | 2,299,212 |  |  | $ | — |
Commercial real estate | — |  |  | — |  |  | — |  |  | — |  |  | 1,056,982 |  |  | 1,056,982 |  |  | — |
Home equity line of credit | 609 |  |  | 86 |  |  | 1,334 |  |  | 2,029 |  |  | 833,634 |  |  | 835,663 |  |  | — |
Residential land | — |  |  | — |  |  | 397 |  |  | 397 |  |  | 19,462 |  |  | 19,859 |  |  | — |
Commercial construction | — |  |  | — |  |  | — |  |  | — |  |  | 91,080 |  |  | 91,080 |  |  | — |
Residential construction | — |  |  | — |  |  | — |  |  | — |  |  | 11,138 |  |  | 11,138 |  |  | — |
Commercial | 700 |  |  | 313 |  |  | 48 |  |  | 1,061 |  |  | 792,243 |  |  | 793,304 |  |  | — |
Consumer | 1,375 |  |  | 882 |  |  | 941 |  |  | 3,198 |  |  | 110,768 |  |  | 113,966 |  |  | — |
Total loans | $ | 5,703 |  |  | $ | 2,749 |  |  | $ | 8,792 |  |  | $ | 17,244 |  |  | $ | 5,203,960 |  |  | $ | 5,221,204 |  |  | $ | — |
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 |  |  | $ | — |
The credit risk profile based on nonaccrual loans were as follows:
| December 31, 2021 |  | December 31, 2020
(in thousands) | With a Related ACL |  | Without a Related ACL |  | Total |  | With a Related ACL |  | Without a Related ACL |  | Total
Real estate: |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family | $ | 16,045 |  |  | $ | 3,703 |  |  | $ | 19,748 |  |  | $ | 8,991 |  |  | $ | 2,835 |  |  | $ | 11,826 |
Commercial real estate | 14,104 |  |  | 1,221 |  |  | 15,325 |  |  | 15,847 |  |  | 2,875 |  |  | 18,722 |
Home equity line of credit | 4,227 |  |  | 1,294 |  |  | 5,521 |  |  | 5,791 |  |  | 1,567 |  |  | 7,358 |
Residential land | 97 |  |  | 300 |  |  | 397 |  |  | 108 |  |  | 300 |  |  | 408 |
Commercial construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Residential construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial | 1,446 |  |  | 692 |  |  | 2,138 |  |  | 1,819 |  |  | 3,328 |  |  | 5,147 |
Consumer | 1,845 |  |  | — |  |  | 1,845 |  |  | 3,935 |  |  | — |  |  | 3,935 |
Total | $ | 37,764 |  |  | $ | 7,210 |  |  | $ | 44,974 |  |  | $ | 36,491 |  |  | $ | 10,905 |  |  | $ | 47,396 |
The credit risk profile based on loans whose terms have been modified and accruing interest were as follows:
(in thousands) | December 31, 2021 |  | December 31, 2020
Real estate: |  |  |
Residential 1-4 family | $ | 6,949 |  |  | $ | 7,932 |
Commercial real estate | 3,055 |  |  | 3,281 |
Home equity line of credit | 6,021 |  |  | 8,148 |
Residential land | 980 |  |  | 1,555 |
Commercial construction | — |  |  | — |
Residential construction | — |  |  | — |
Commercial | 7,860 |  |  | 6,108 |
Consumer | 52 |  |  | 54 |
Total troubled debt restructured loans accruing interest | $ | 24,917 |  |  | $ | 27,078 |
ASB did not recognize interest on nonaccrual loans for 2021, 2020 and 2019. Troubled debt restructurings. A loan modification is deemed to be a TDR when the borrower is determined to be experiencing financial difficulties and ASB grants a concession it would not otherwise consider. When a borrower experiencing financial difficulty fails to make a required payment on a loan or is in imminent default, ASB takes a number of steps to improve the collectability of the loan and maximize the likelihood of full repayment. At times, ASB may modify or restructure a loan to help a distressed borrower improve its financial position to eventually be able to fully repay the loan, provided the borrower has demonstrated both the willingness and the ability to fulfill 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, extended amortization of principal, temporary deferral of principal payments, and temporary interest rate reductions. ASB rarely grants principal forgiveness in its TDR modifications. Residential loan modifications generally involve interest rate reduction, extending the amortization period, or capitalizing certain delinquent amounts owed not to exceed the original loan balance. Land loans at origination 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 up 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, extending the interest only or amortization period, and temporary deferral or reduction of principal payments. ASB generally does not reduce the interest rate on commercial loan TDR modifications. Occasionally, additional collateral and/or guaranties are obtained. The allowance for credit losses on TDR loans that do not share risk characteristics are individually evaluated based on the present value of expected future cash flows discounted at the loan’s effective original contractual rate or based on the fair value of collateral less cost to sell. The financial impact of the estimated loss 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 credit losses. Loan modifications that occurred during 2021, 2020, and 2019 were as follows:
(dollars in thousands) | Number of contracts |  | Outstanding recorded investment (as of period end)1 |  | Related allowance (as of period end)
Year ended December 31, 2021 |  |  |  |  |
Real estate: |  |  |  |  |
Residential 1-4 family | 14 |  |  | $ | 8,379 |  |  | $ | 442 |
Commercial real estate | — |  |  | — |  |  | — |
Home equity line of credit | — |  |  | — |  |  | — |
Residential land | 3 |  |  | 799 |  |  | 38 |
Commercial construction | — |  |  | — |  |  | — |
Residential construction | — |  |  | — |  |  | — |
Commercial | 7 |  |  | 2,931 |  |  | 205 |
Consumer | — |  |  | — |  |  | — |
| 24 |  |  | $ | 12,109 |  |  | $ | 685 |
Year ended December 31, 2020 |  |  |  |  |
Real estate: |  |  |  |  |
Residential 1-4 family | 1 |  |  | $ | 144 |  |  | $ | 6 |
Commercial real estate | 6 |  |  | 20,714 |  |  | 4,439 |
Home equity line of credit | 3 |  |  | 85 |  |  | 11 |
Residential land | 4 |  |  | 668 |  |  | 54 |
Commercial construction | — |  |  | — |  |  | — |
Residential construction | — |  |  | — |  |  | — |
Commercial | 54 |  |  | 5,380 |  |  | 869 |
Consumer | — |  |  | — |  |  | — |
| 68 |  |  | $ | 26,991 |  |  | $ | 5,379 |
Year ended December 31, 2019 |  |  |  |  |
Real estate: |  |  |  |  |
Residential 1-4 family | 11 |  |  | $ | 1,770 |  |  | $ | 190 |
Commercial real estate | — |  |  | — |  |  | — |
Home equity line of credit | 3 |  |  | 442 |  |  | 73 |
Residential land | 3 |  |  | 1,086 |  |  | — |
Commercial construction | — |  |  | — |  |  | — |
Residential construction | — |  |  | — |  |  | — |
Commercial | 8 |  |  | 5,523 |  |  | 417 |
Consumer | — |  |  | — |  |  | — |
| 25 |  |  | $ | 8,821 |  |  | $ | 680 |
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. Loans modified in TDRs that experienced a payment default of 90 days or more in 2021, 2020, and 2019 and for which the payment default occurred within one year of the modification, were as follows:
Years ended December 31 | 2021 |  | 2020 |  | 2019
(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 | 1 |  |  | $ | 474 |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Commercial real estate | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Home equity line of credit | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Residential land | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Residential construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial | 1 |  |  | 9 |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
| 2 |  |  | $ | 483 |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
If a loan modified in a TDR subsequently defaults, ASB evaluates the loan for further impairment. Based on its evaluation, adjustments may be made in the allocation of the allowance or partial charge-offs may be taken to further write-down the carrying value of the loan. Commitments to lend additional funds to borrowers whose loan terms have been modified in a TDR totaled nil at December 31, 2021 and 2020. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides that a financial institution may elect to suspend the requirements under GAAP for certain loan modifications that would otherwise be categorized as a TDR and any related impairment for accounting purposes. In response to the COVID-19 pandemic, the Board of Governors of the FRB, the FDIC, the National Credit Union Administration, the OCC, and the Consumer Financial Protection Bureau, in consultation with the state financial regulators (collectively, the “agencies”) issued a joint interagency statement (issued March 22, 2020; revised statement issued April 7, 2020). Some of the provisions applicable to the Company include, but are not limited to accounting for loan modifications, past due reporting and nonaccrual status and charge-offs. Loan modifications that do not meet the conditions of the CARES Act may still qualify as a modification that does not need to be accounted for as a TDR. The agencies confirmed with the FASB staff that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or insignificant delays in payment. Financial institutions are not expected to designate loans with deferrals granted due to COVID-19 as past due because of the deferral. A loan’s payment date is governed by the due date stipulated in the legal agreement. If a financial institution agrees to a payment deferral, these loans would not be considered past due during the period of the deferral. Lastly, during short-term COVID-19 modifications, these loans generally should not be reported as nonaccrual or as classified. Collateral-dependent loans. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the operation or sale of the collateral. Loans considered collateral-dependent were as follows:
|  | December 31, 2021 |  | December 31, 2020
|  | Amortized cost |  | Collateral type |  | Amortized cost |  | Collateral type
(in thousands) |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |
Residential 1-4 family |  | $ | 3,493 |  |  | Residential real estate property |  | $ | 2,541 |  |  | Residential real estate property
Commercial real estate |  | 1,221 |  |  | Commercial real estate property |  | 2,875 |  |  | Commercial real estate property
Home equity line of credit |  | 1,294 |  |  | Residential real estate property |  | 1,567 |  |  | Residential real estate property
Residential land |  | 300 |  |  | Residential real estate property |  | 300 |  |  | Residential real estate property
Total real estate |  | 6,308 |  |  |  |  | 7,283 |  |  |
Commercial |  | 692 |  |  | Business assets |  | 934 |  |  | Business assets
Total |  | $ | 7,000 |  |  |  |  | $ | 8,217 |  |  |
ASB had $3.4 million and $3.8 million of consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure at December 31, 2021 and 2020, respectively. 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 |  |
(in thousands) | Recorded investment |  | Unpaid principal balance |  | Related allowance |  | Average recorded investment |  | Interest income recognized* |  |  |  |
With no related allowance recorded |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family | $ | 6,817 |  |  | $ | 7,207 |  |  | $ | — |  |  | $ | 8,169 |  |  | $ | 907 |  |  |  |  |
Commercial real estate | 195 |  |  | 200 |  |  | — |  |  | 16 |  |  | — |  |  |  |  |
Home equity line of credit | 1,984 |  |  | 2,135 |  |  | — |  |  | 2,020 |  |  | 84 |  |  |  |  |
Residential land | 3,091 |  |  | 3,294 |  |  | — |  |  | 2,662 |  |  | 129 |  |  |  |  |
Commercial construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
Residential construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
Commercial | 1,948 |  |  | 2,285 |  |  | — |  |  | 4,534 |  |  | 276 |  |  |  |  |
Consumer | 2 |  |  | 2 |  |  | — |  |  | 21 |  |  | 4 |  |  |  |  |
| 14,037 |  |  | 15,123 |  |  | — |  |  | 17,422 |  |  | 1,400 |  |  |  |  |
With an allowance recorded |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family | 8,783 |  |  | 8,835 |  |  | 898 |  |  | 8,390 |  |  | 359 |  |  |  |  |
Commercial real estate | 853 |  |  | 853 |  |  | 2 |  |  | 886 |  |  | 37 |  |  |  |  |
Home equity line of credit | 10,089 |  |  | 10,099 |  |  | 322 |  |  | 11,319 |  |  | 567 |  |  |  |  |
Residential land | — |  |  | — |  |  | — |  |  | 27 |  |  | — |  |  |  |  |
Commercial construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
Residential construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
Commercial | 6,470 |  |  | 6,470 |  |  | 1,015 |  |  | 6,990 |  |  | 132 |  |  |  |  |
Consumer | 505 |  |  | 505 |  |  | 454 |  |  | 360 |  |  | 24 |  |  |  |  |
| 26,700 |  |  | 26,762 |  |  | 2,691 |  |  | 27,972 |  |  | 1,119 |  |  |  |  |
Total |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family | 15,600 |  |  | 16,042 |  |  | 898 |  |  | 16,559 |  |  | 1,266 |  |  |  |  |
Commercial real estate | 1,048 |  |  | 1,053 |  |  | 2 |  |  | 902 |  |  | 37 |  |  |  |  |
Home equity line of credit | 12,073 |  |  | 12,234 |  |  | 322 |  |  | 13,339 |  |  | 651 |  |  |  |  |
Residential land | 3,091 |  |  | 3,294 |  |  | — |  |  | 2,689 |  |  | 129 |  |  |  |  |
Commercial construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
Residential construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
Commercial | 8,418 |  |  | 8,755 |  |  | 1,015 |  |  | 11,524 |  |  | 408 |  |  |  |  |
Consumer | 507 |  |  | 507 |  |  | 454 |  |  | 381 |  |  | 28 |  |  |  |  |
| $ | 40,737 |  |  | $ | 41,885 |  |  | $ | 2,691 |  |  | $ | 45,394 |  |  | $ | 2,519 |  |  |  |  |
* Since loan was classified as impaired. Mortgage servicing rights (MSRs). In its mortgage banking business, ASB sells residential mortgage loans to government-sponsored entities and other parties, who may issue securities backed by pools of such loans. ASB retains no beneficial interests in these loans other than the servicing rights of certain loans sold. ASB received $364.8 million, $567.7 million and $277.1 million of proceeds from the sale of residential mortgages in 2021, 2020, and 2019, respectively, and recognized gains on such sales of $9.3 million, $23.7 million, and $4.9 million in 2021, 2020, and 2019, respectively. Repurchased mortgage loans were nil for 2021, 2020 and 2019. The repurchase reserve was $0.1 million as of December 31, 2021 and 2020. Mortgage servicing fees, a component of other income, net, were $3.8 million, $3.4 million and $3.0 million for the years ended December 31, 2021, 2020, and 2019, respectively. Changes in the carrying value of MSRs were as follows:
(in thousands) | Gross carrying amount 1 |  | Accumulated amortization 1 |  | Valuation allowance |  | Net carrying amount
December 31, 2021 | $ | 18,674 |  |  | $ | (8,724) |  |  | $ | — |  |  | $ | 9,950 |
December 31, 2020 | $ | 22,950 |  |  | $ | (12,670) |  |  | $ | (260) |  |  | $ | 10,020 |
1 Reflects impact of loans paid in full. Changes related to MSRs were as follows:
(in thousands) | 2021 |  | 2020 |  | 2019
Mortgage servicing rights |  |  |  |  |
Balance, January 1 | $ | 10,280 |  |  | $ | 9,101 |  |  | $ | 8,062 |
Amount capitalized | 3,404 |  |  | 5,096 |  |  | 2,987 |
Amortization | (3,734) |  |  | (3,917) |  |  | (1,948) |
Sale of mortgage servicing rights | — |  |  | — |  |  | — |
Other-than-temporary impairment | — |  |  | — |  |  | — |
Carrying amount before valuation allowance, December 31 | 9,950 |  |  | 10,280 |  |  | 9,101 |
Valuation allowance for mortgage servicing rights |  |  |  |  |
Balance, January 1 | 260 |  |  | — |  |  | — |
Provision | (260) |  |  | 260 |  |  | — |
Other-than-temporary impairment | — |  |  | — |  |  | — |
Balance, December 31 | — |  |  | 260 |  |  | — |
Net carrying value of mortgage servicing rights | $ | 9,950 |  |  | $ | 10,020 |  |  | $ | 9,101 |
The estimated aggregate amortization expenses of MSRs for 2022, 2023, 2024, 2025 and 2026 are $1.6 million, $1.3 million, $1.2 million, $1.0 million and $0.9 million, respectively. ASB capitalizes MSRs acquired upon the sale of mortgage loans with servicing rights retained. On a monthly basis, ASB compares the net carrying value of the MSRs to its fair value to determine if there are any changes to the valuation allowance and/or other-than-temporary impairment for the MSRs. ASB uses a present value cash flow model to estimate the fair value of MSRs. Impairment is recognized through a valuation allowance for each stratum when the carrying amount exceeds fair value, with any associated provision recorded as a component of loan servicing fees included in “Revenues - bank” in the consolidated statements of income. A direct write-down is recorded when the recoverability of the valuation allowance is deemed to be unrecoverable. Key assumptions used in estimating the fair value of ASB’s MSRs used in the impairment analysis were as follows:
December 31 | 2021 |  | 2020
(dollars in thousands) |  |  |
Unpaid principal balance | $ | 1,481,899 |  |  | $ | 1,450,312 |
Weighted average note rate | 3.38 | % |  | 3.68 | %
Weighted average discount rate | 9.25 | % |  | 9.25 | %
Weighted average prepayment speed | 9.77 | % |  | 17.70 | %
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 | 2021 |  | 2020
(in thousands) |  |  |
Prepayment rate: |  |  |
25 basis points adverse rate change | $ | (714) |  |  | $ | (738) |
50 basis points adverse rate change | (1,608) |  |  | (1,445) |
Discount rate: |  |  |
25 basis points adverse rate change | (129) |  |  | (68) |
50 basis points adverse rate change | (256) |  |  | (135) |
The effect of a variation in certain assumptions on fair value is calculated without changing any other assumptions. This analysis typically cannot be extrapolated because the relationship of a change in one key assumption to the changes in the fair value of MSRs typically is not linear. Deposit liabilities. The summarized components of deposit liabilities were as follows:
December 31 | 2021 |  | 2020
(dollars in thousands) | Weighted-average stated rate |  | Amount |  | Weighted-average stated rate |  | Amount
Savings | 0.03 | % |  | $ | 3,234,646 |  |  | 0.03 | % |  | $ | 2,873,727 |
Checking |  |  |  |  |  |  |
Interest-bearing | 0.02 |  |  | 1,344,049 |  |  | 0.02 |  |  | 1,196,675 |
Noninterest-bearing | — |  |  | 1,472,727 |  |  | — |  |  | 1,329,264 |
Commercial checking | — |  |  | 1,503,905 |  |  | — |  |  | 1,269,236 |
Money market | 0.06 |  |  | 192,909 |  |  | 0.09 |  |  | 169,225 |
Time certificates | 0.67 |  |  | 423,976 |  |  | 0.99 |  |  | 548,830 |
| 0.05 | % |  | $ | 8,172,212 |  |  | 0.09 | % |  | $ | 7,386,957 |
As of December 31, 2021 and 2020, time certificates of $250,000 or more totaled $87.6 million and $121.3 million, respectively. The approximate scheduled maturities of time certificates outstanding at December 31, 2021 were as follows:
(in thousands) |
2022 | $ | 275,702 |
2023 | 60,049 |
2024 | 47,248 |
2025 | 24,278 |
2026 | 13,736 |
Thereafter | 2,963 |
| $ | 423,976 |
Overdrawn deposit accounts are classified as loans and totaled $1.3 million and $1.0 million at December 31, 2021 and 2020, respectively. Interest expense on deposit liabilities by type of deposit was as follows:
Years ended December 31 | 2021 |  | 2020 |  | 2019
(in thousands) |  |  |  |  |
Time certificates | $ | 3,805 |  |  | $ | 7,944 |  |  | $ | 12,675 |
Savings | 802 |  |  | 1,774 |  |  | 1,904 |
Money market | 132 |  |  | 465 |  |  | 953 |
Interest-bearing checking | 242 |  |  | 471 |  |  | 1,298 |
| $ | 4,981 |  |  | $ | 10,654 |  |  | $ | 16,830 |
Other borrowings. Securities sold under agreements to repurchase. Securities sold under agreements to repurchase are accounted for as financing transactions and the obligations to repurchase these securities are recorded as liabilities in the consolidated balance sheets. ASB pledges investment securities as collateral for securities sold under agreements to repurchase. All such agreements are subject to master netting arrangements, which provide for conditional right of set-off in case of default by either party; however, ASB presents securities sold under agreements to repurchase on a gross basis in the balance sheet. 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, 2021 |  | $ | 88 |  |  | $ | — |  |  | $ | 88 |
December 31, 2020 |  | 90 |  |  | — |  |  | 90 |
|  | 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, 2021 |  | $ | 88 |  |  | $ | 161 |  |  | $ | — |
December 31, 2020 |  | 90 |  |  | 92 |  |  | — |
The securities underlying the agreements to repurchase are book-entry securities and were delivered by appropriate entry into the counterparties’ accounts or into segregated tri-party custodial accounts at the FHLB. The securities underlying the agreements to repurchase continue to be reflected in ASB’s asset accounts. The counterparties or tri-parties may determine that additional collateral is required based on movements in the fair value of the collateral. Typically, a five percent discount is taken from the fair value of the investment securities to determine the value of the collateral pledged for the repurchase agreements. Information concerning securities sold under agreements to repurchase, which provided for the repurchase of identical securities, was as follows:
(dollars in thousands) | 2021 |  | 2020 |  | 2019
Amount outstanding as of December 31 | $ | 88,305 |  |  | $ | 89,670 |  |  | $ | 115,110 |
Average amount outstanding during the year | 88,405 |  |  | 73,738 |  |  | 79,598 |
Maximum amount outstanding as of any month-end | 129,665 |  |  | 100,580 |  |  | 115,110 |
Weighted-average interest rate as of December 31 | 0.02 | % |  | 0.02 | % |  | 0.98 | %
Weighted-average interest rate during the year | 0.02 | % |  | 0.42 | % |  | 0.96 | %
Weighted-average remaining days to maturity as of December 31 | 1 |  | 1 |  | 1
Securities sold under agreements to repurchase were summarized as follows:
December 31 | 2021 |  | 2020
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 | $ | 88,305 |  |  | 0.02 | % |  | $ | 160,847 |  |  | $ | 89,670 |  |  | 0.02 | % |  | $ | 92,478 |
1 to 29 days | — |  |  | — | % |  | — |  |  | — |  |  | — | % |  | — |
30 to 90 days | — |  |  | — | % |  | — |  |  | — |  |  | — | % |  | — |
Over 90 days | — |  |  | — | % |  | — |  |  | — |  |  | — | % |  | — |
| $ | 88,305 |  |  | 0.02 | % |  | $ | 160,847 |  |  | $ | 89,670 |  |  | 0.02 | % |  | $ | 92,478 |
Advances from Federal Home Loan Bank. FHLB advances were nil as of December 31, 2021 and 2020. ASB and the FHLB are parties to an Advances, Pledge and Security Agreement (Advances Agreement), which applies to currently outstanding and future advances, and governs the terms and conditions under which ASB borrows and the FHLB makes loans or advances from time to time. Under the Advances Agreement, ASB agrees to abide by the FHLB’s credit policies, and makes certain warranties and representations to the FHLB. Upon the occurrence of and during the continuation of an “Event of Default” (which term includes any event of nonpayment of interest or principal of any advance when due or failure to perform any promise or obligation under the Advances Agreement or other credit arrangements between the parties), the FHLB may, at its option, declare all indebtedness and accrued interest thereon, including any prepayment fees or charges, to be immediately due and payable. Advances from the FHLB are collateralized by loans, investment securities and stock in the FHLB. As of December 31, 2021 and 2020, ASB’s available FHLB borrowing capacity was $2.0 billion, and $2.1 billion, respectively. In February 2020, the FHLB of Des Moines notified its members that certain assets, which included high-quality home equity lines of credit that were priced off a variable index with a fixed rate option, would no longer qualify as collateral for FHLB Advances and effective October 1, 2020, the FHLB of Des Moines no longer accepted the fixed rate portion of any home equity lines of credit as collateral. In addition, effective July 13, 2020, the FHLB of Des Moines lowered their Loan to Value (LTV), a system-wide percentage applied to eligible pledged collateral to determine borrowing capacity, to reflect ongoing risks in the market due to COVID-19. The lower LTV reduced ASB’s collateral value of the existing pledged loans and the borrowing capacity. To increase the borrowing capacity at the FHLB of Des Moines, ASB pledged commercial real estate loans and is evaluating other assets to pledge as collateral to increase its reserve borrowing capacity with the FHLB. ASB is required to obtain and hold a specific number of shares of capital stock of the FHLB. ASB was in compliance with all Advances Agreement requirements as of December 31, 2021 and 2020. Common stock equity. ASB is regulated and supervised by the OCC. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on ASB’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, ASB must meet specific capital guidelines that involve quantitative measures of ASB’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The prompt corrective action provisions impose certain restrictions on institutions that are undercapitalized. The restrictions imposed become increasingly more severe as an institution’s capital category declines from “undercapitalized” to “critically undercapitalized.” The regulators have substantial discretion in the corrective actions that might direct and could include restrictions on dividends and other distributions that ASB may make to ASB Hawaii and the requirement that ASB develop and implement a plan to restore its capital. In 1988, HEI agreed with the OTS predecessor regulatory agency at the time, to contribute additional capital to ASB up to a maximum aggregate amount of approximately $65.1 million (Capital Maintenance Agreement). As of December 31, 2021, as a result of capital contributions in prior years, HEI’s maximum obligation to contribute additional capital under the Capital Maintenance Agreement has been reduced to approximately $28.3 million. To be categorized as “well capitalized,” ASB must maintain minimum total capital, Tier 1 capital, and Tier 1 leverage ratios as set forth in the table below. Beginning in the second quarter of 2020, ASB had adopted the community bank leverage ratio framework and was only required to comply with Tier 1 leverage ratio. Beginning in the third quarter of 2021, ASB began reporting all of the required capital ratios as the Bank did not meet the requirements to use the community bank leverage ratio framework. As of December 31, 2021, and 2020 ASB was in compliance with the minimum capital requirements under OCC regulations, and was categorized as “well capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events that management believes have changed the institution’s category under the capital guidelines. 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, 2021 |  |  |  |  |  |  |  |  |  |  |
Tier 1 leverage | $ | 714,789 |  |  | 7.86 | % |  | $ | 363,630 |  |  | 4.00 | % |  | $ | 454,538 |  |  | 5.00 | %
Common equity tier 1 | 714,789 |  |  | 13.29 | % |  | 242,072 |  |  | 4.50 | % |  | 349,659 |  |  | 6.50 | %
Tier 1 capital | 714,789 |  |  | 13.29 | % |  | 322,762 |  |  | 6.00 | % |  | 430,350 |  |  | 8.00 | %
Total capital | 769,836 |  |  | 14.31 | % |  | 430,350 |  |  | 8.00 | % |  | 537,937 |  |  | 10.00 | %
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |
Tier 1 leverage | 677,786 |  |  | 8.38 | % |  | 323,700 |  |  | 4.00 | % |  | 404,625 |  |  | 5.00 | %
In 2021, ASB paid cash dividends of $59.0 million to HEI, compared to cash dividends of $31.0 million in 2020. The FRB and OCC approved the dividends. Related-party transactions. HEI charged ASB $2.1 million, $2.3 million and $2.3 million for general management and administrative services in 2021, 2020 and 2019, respectively. The amounts charged by HEI for services performed by HEI employees to its subsidiaries are allocated primarily on the basis of time expended in providing such services. All amounts charged to ASB were settled as a capital contribution by HEI to ASB. Derivative financial instruments. ASB enters into interest rate lock commitments (IRLCs) with borrowers, and forward commitments to sell loans or to-be-announced mortgage-backed securities to investors to hedge against the inherent interest rate and pricing risks associated with selling loans. ASB enters into IRLCs for residential mortgage loans, which commit ASB to lend funds to a potential borrower at a specific interest rate and within a specified period of time. IRLCs that relate to the origination of mortgage loans that will be held for sale are considered derivative financial instruments under applicable accounting guidance. Outstanding IRLCs expose ASB to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The IRLCs are free-standing derivatives which are carried at fair value with changes recorded in mortgage banking income. ASB enters into forward commitments to hedge the interest rate risk for rate locked mortgage applications in process and closed mortgage loans held for sale. These commitments are primarily forward sales of to-be-announced mortgage backed securities. Generally, when mortgage loans are closed, the forward commitment is liquidated and replaced with a mandatory delivery forward sale of the mortgage to a secondary market investor. In some cases, a best-efforts forward sale agreement is utilized as the forward commitment. These commitments are free-standing derivatives which are carried at fair value with changes recorded in mortgage banking income. Changes in the fair value of IRLCs and forward commitments subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time. The notional amount and fair value of ASB’s derivative financial instruments were as follows:
December 31 | 2021 |  | 2020
(in thousands) | Notional amount |  | Fair value |  | Notional amount |  | Fair value
Interest rate lock commitments | $ | 39,377 |  |  | $ | 638 |  |  | $ | 120,980 |  |  | $ | 4,536 |
Forward commitments | 38,000 |  |  | (11) |  |  | 100,500 |  |  | (500) |
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 | 2021 |  | 2020
(in thousands) | Asset derivatives |  | Liability derivatives |  | Asset derivatives |  | Liability derivatives
Interest rate lock commitments | $ | 638 |  |  | $ | — |  |  | $ | 4,536 |  |  | $ | — |
Forward commitments | — |  |  | 11 |  |  | — |  |  | 500 |
| $ | 638 |  |  | $ | 11 |  |  | $ | 4,536 |  |  | $ | 500 |
1 Asset derivatives are included in other assets and liability derivatives are included in other liabilities in the balance sheets. 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 |  | 2021 |  | 2020 |  | 2019
Interest rate lock commitments | Mortgage banking income |  | $ | (3,898) |  |  | $ | 4,239 |  |  | $ | 206 |
Forward commitments | Mortgage banking income |  | 489 |  |  | (458) |  |  | 1 |
|  |  | $ | (3,409) |  |  | $ | 3,781 |  |  | $ | 207 |
Commitments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the commitments. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since certain commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. ASB minimizes its exposure to loss under these commitments by requiring that customers meet certain conditions prior to disbursing funds. The amount of collateral, if any, is based on a credit evaluation of the borrower and may include residential real estate, accounts receivable, inventory and property, plant and equipment. Letters of credit are conditional commitments issued by ASB to guarantee payment and performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. ASB holds collateral supporting those commitments for which collateral is deemed necessary. The following is a summary of outstanding off-balance sheet arrangements:
December 31 | 2021 |  | 2020
(in thousands) |  |  |
Unfunded commitments to extend credit: |  |  |
Home equity line of credit | $ | 1,181,496 |  |  | $ | 1,248,773 |
Commercial and commercial real estate | 612,158 |  |  | 574,281 |
Consumer | 62,090 |  |  | 69,168 |
Residential 1-4 family | 44,262 |  |  | 57,862 |
Commercial and financial standby letters of credit | 11,723 |  |  | 13,718 |
Total | $ | 1,911,729 |  |  | $ | 1,963,802 |
Federal Deposit Insurance Corporation assessment. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) raised the minimum reserve ratio for the Deposit Insurance Fund to 1.35 percent but required the Federal Deposit Insurance Corporation (FDIC) to offset the effect of the increase in the minimum reserve ratio on small institutions (generally insured depository institutions with total consolidated assets of $10 billion or less) when setting assessments. In September 2018, the reserve ratio reached 1.36 percent and the FDIC awarded the small institutions an assessment credit, which was applied to a portion of the 2019 and 2020 assessments for these banks. For the years ended December 31, 2021, 2020 and 2019 ASB’s FDIC insurance expenses were $3.2 million, $2.3 million and $1.2 million, respectively.

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