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v3.23.1

Bank segment | 3 Months Ended
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Mar. 31, 2023
Bank Subsidiary [Abstract] |
Bank segment | Bank segment Selected financial information American Savings Bank, F.S.B. Statements of Income and Comprehensive Income Data
|  |  |  | Three months ended March 31
(in thousands) |  |  |  |  |  | 2023 |  | 2022
Interest and dividend income |  |  |  |  |  |  |  |
Interest and fees on loans |  |  |  |  |  | $ | 64,842 |  |  | $ | 46,005 |
Interest and dividends on investment securities |  |  |  |  |  | 14,637 |  |  | 13,984 |
Total interest and dividend income |  |  |  |  |  | 79,479 |  |  | 59,989 |
Interest expense |  |  |  |  |  |  |  |
Interest on deposit liabilities |  |  |  |  |  | 6,837 |  |  | 947 |
Interest on other borrowings |  |  |  |  |  | 7,721 |  |  | 5 |
Total interest expense |  |  |  |  |  | 14,558 |  |  | 952 |
Net interest income |  |  |  |  |  | 64,921 |  |  | 59,037 |
Provision for credit losses |  |  |  |  |  | 1,175 |  |  | (3,263) |
Net interest income after provision for credit losses |  |  |  |  |  | 63,746 |  |  | 62,300 |
Noninterest income |  |  |  |  |  |  |  |
Fees from other financial services |  |  |  |  |  | 4,679 |  |  | 5,587 |
Fee income on deposit liabilities |  |  |  |  |  | 4,599 |  |  | 4,691 |
Fee income on other financial products |  |  |  |  |  | 2,744 |  |  | 2,718 |
Bank-owned life insurance |  |  |  |  |  | 1,425 |  |  | 681 |
Mortgage banking income |  |  |  |  |  | 130 |  |  | 1,077 |
Gain on sale of real estate |  |  |  |  |  | — |  |  | 1,002 |
Other income, net |  |  |  |  |  | 801 |  |  | 372 |
Total noninterest income |  |  |  |  |  | 14,378 |  |  | 16,128 |
Noninterest expense |  |  |  |  |  |  |  |
Compensation and employee benefits |  |  |  |  |  | 30,204 |  |  | 27,215 |
Occupancy |  |  |  |  |  | 5,588 |  |  | 5,952 |
Data processing |  |  |  |  |  | 5,012 |  |  | 4,151 |
Services |  |  |  |  |  | 2,595 |  |  | 2,439 |
Equipment |  |  |  |  |  | 2,646 |  |  | 2,329 |
Office supplies, printing and postage |  |  |  |  |  | 1,165 |  |  | 1,060 |
Marketing |  |  |  |  |  | 1,016 |  |  | 1,018 |
Other expense |  |  |  |  |  | 6,191 |  |  | 4,049 |
Total noninterest expense |  |  |  |  |  | 54,417 |  |  | 48,213 |
Income before income taxes |  |  |  |  |  | 23,707 |  |  | 30,215 |
Income taxes |  |  |  |  |  | 5,145 |  |  | 6,345 |
Net income |  |  |  |  |  | 18,562 |  |  | 23,870 |
Other comprehensive income (loss), net of taxes |  |  |  |  |  | 18,430 |  |  | (122,441) |
Comprehensive income (loss) |  |  |  |  |  | $ | 36,992 |  |  | $ | (98,571) |
Reconciliation to amounts per HEI Condensed Consolidated Statements of Income*:
|  |  |  | Three months ended March 31
(in thousands) |  |  |  |  |  | 2023 |  | 2022
Interest and dividend income |  |  |  |  |  | $ | 79,479 |  |  | $ | 59,989 |
Noninterest income |  |  |  |  |  | 14,378 |  |  | 16,128 |
Less: Gain on sale of real estate |  |  |  |  |  | — |  |  | 1,002 |
*Revenues-Bank |  |  |  |  |  | 93,857 |  |  | 75,115 |
Total interest expense |  |  |  |  |  | 14,558 |  |  | 952 |
Provision for credit losses |  |  |  |  |  | 1,175 |  |  | (3,263) |
Noninterest expense |  |  |  |  |  | 54,417 |  |  | 48,213 |
Less: Gain on sale of real estate |  |  |  |  |  | — |  |  | 1,002 |
Less: Retirement defined benefits credit—other than service costs |  |  |  |  |  | (187) |  |  | (185) |
*Expenses-Bank |  |  |  |  |  | 70,337 |  |  | 45,085 |
*Operating income-Bank |  |  |  |  |  | 23,520 |  |  | 30,030 |
Add back: Retirement defined benefits credit—other than service costs |  |  |  |  |  | (187) |  |  | (185) |
Income before income taxes |  |  |  |  |  | $ | 23,707 |  |  | $ | 30,215 |
American Savings Bank, F.S.B. Balance Sheets Data
(in thousands) |  | March 31, 2023 |  | December 31, 2022
Assets |  |  |  |  |  |  |  |
Cash and due from banks |  |  |  | $ | 138,742 |  |  |  |  | $ | 153,042 |
Interest-bearing deposits |  |  |  | 44,315 |  |  |  |  | 3,107 |
Cash and cash equivalents |  |  |  | 183,057 |  |  |  |  | 156,149 |
Investment securities |  |  |  |  |  |  |  |
Available-for-sale, at fair value |  |  |  | 1,419,755 |  |  |  |  | 1,429,667 |
Held-to-maturity, at amortized cost (fair value of $1,158,090 and $1,150,971, respectively) |  |  |  | 1,238,185 |  |  |  |  | 1,251,747 |
Stock in Federal Home Loan Bank, at cost |  |  |  | 10,000 |  |  |  |  | 26,560 |
Loans held for investment |  |  |  | 6,059,354 |  |  |  |  | 5,978,906 |
Allowance for credit losses |  |  |  | (71,296) |  |  |  |  | (72,216) |
Net loans |  |  |  | 5,988,058 |  |  |  |  | 5,906,690 |
Loans held for sale, at lower of cost or fair value |  |  |  | 660 |  |  |  |  | 824 |
Other |  |  |  | 688,165 |  |  |  |  | 692,143 |
Goodwill |  |  |  | 82,190 |  |  |  |  | 82,190 |
Total assets |  |  |  | $ | 9,610,070 |  |  |  |  | $ | 9,545,970 |
Liabilities and shareholder’s equity |  |  |  |  |  |  |  |
Deposit liabilities—noninterest-bearing |  |  |  | $ | 2,769,789 |  |  |  |  | $ | 2,811,077 |
Deposit liabilities—interest-bearing |  |  |  | 5,460,812 |  |  |  |  | 5,358,619 |
Other borrowings |  |  |  | 680,690 |  |  |  |  | 695,120 |
Other |  |  |  | 206,317 |  |  |  |  | 212,269 |
Total liabilities |  |  |  | 9,117,608 |  |  |  |  | 9,077,085 |
Common stock |  |  |  | 1 |  |  |  |  | 1 |
Additional paid-in capital |  |  |  | 356,391 |  |  |  |  | 355,806 |
Retained earnings |  |  |  | 454,255 |  |  |  |  | 449,693 |
Accumulated other comprehensive loss, net of tax benefits |  |  |  |  |  |  |  |
Net unrealized losses on securities |  | $ | (308,622) |  |  |  |  | $ | (328,904) |  |  |
Retirement benefit plans |  | (9,563) |  |  | (318,185) |  |  | (7,711) |  |  | (336,615) |
Total shareholder’s equity |  |  |  | 492,462 |  |  |  |  | 468,885 |
Total liabilities and shareholder’s equity |  |  |  | $ | 9,610,070 |  |  |  |  | $ | 9,545,970 |
Other assets |  |  |  |  |  |  |  |
Bank-owned life insurance |  |  |  | $ | 183,936 |  |  |  |  | $ | 182,986 |
Premises and equipment, net |  |  |  | 192,789 |  |  |  |  | 195,324 |
Accrued interest receivable |  |  |  | 26,547 |  |  |  |  | 25,077 |
Mortgage-servicing rights |  |  |  | 8,745 |  |  |  |  | 9,047 |
Low-income housing investments |  |  |  | 110,748 |  |  |  |  | 106,978 |
Real estate held for sale |  |  |  | 100 |  |  |  |  | — |
Deferred tax asset |  |  |  | 109,885 |  |  |  |  | 116,441 |
Real estate acquired in settlement of loans, net |  |  |  | 614 |  |  |  |  | 115 |
Other |  |  |  | 54,801 |  |  |  |  | 56,175 |
|  |  |  | $ | 688,165 |  |  |  |  | $ | 692,143 |
Other liabilities |  |  |  |  |  |  |  |
Accrued expenses |  |  |  | $ | 95,066 |  |  |  |  | $ | 97,295 |
Federal and state income taxes payable |  |  |  | 2,614 |  |  |  |  | 863 |
Cashier’s checks |  |  |  | 34,616 |  |  |  |  | 36,401 |
Advance payments by borrowers |  |  |  | 5,466 |  |  |  |  | 9,637 |
Other |  |  |  | 68,555 |  |  |  |  | 68,073 |
|  |  |  | $ | 206,317 |  |  |  |  | $ | 212,269 |
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. Other borrowings consisted of FHLB advances, borrowings from the Federal Reserve Bank and securities sold under agreements to repurchase. Investment securities. The major components of investment securities were as follows:
|  | Amortized cost |  | Gross unrealized gains |  | Gross unrealized losses |  | Estimated fair value |  | Gross unrealized losses
|  |  |  |  |  | Less than 12 months |  | 12 months or longer
(dollars in thousands) |  |  |  |  |  | Number of issues |  | Fair value |  | Amount |  | Number of issues |  | Fair value |  | Amount
March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and federal agency obligations |  | $ | 85,786 |  |  | $ | — |  |  | $ | (6,042) |  |  | $ | 79,744 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 14 |  |  | $ | 79,744 |  |  | $ | (6,042) |
Mortgage-backed securities* |  | 1,500,717 |  |  | 1 |  |  | (216,783) |  |  | 1,283,935 |  |  | 24 |  |  | 89,727 |  |  | (7,367) |  |  | 158 |  |  | 1,193,633 |  |  | (209,416) |
Corporate bonds |  | 44,341 |  |  | — |  |  | (3,031) |  |  | 41,310 |  |  | 2 |  |  | 8,951 |  |  | (50) |  |  | 3 |  |  | 32,359 |  |  | (2,981) |
Mortgage revenue bonds |  | 14,766 |  |  | — |  |  | — |  |  | 14,766 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | $ | 1,645,610 |  |  | $ | 1 |  |  | $ | (225,856) |  |  | $ | 1,419,755 |  |  | 26 |  |  | $ | 98,678 |  |  | $ | (7,417) |  |  | 175 |  |  | $ | 1,305,736 |  |  | $ | (218,439) |
Held-to-maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and federal agency obligations |  | $ | 59,900 |  |  | $ | — |  |  | $ | (7,172) |  |  | $ | 52,728 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 3 |  |  | $ | 52,728 |  |  | $ | (7,172) |
Mortgage-backed securities* |  | 1,178,285 |  |  | 8,875 |  |  | (81,798) |  |  | 1,105,362 |  |  | 6 |  |  | 64,288 |  |  | (532) |  |  | 41 |  |  | 427,520 |  |  | (81,266) |
|  | $ | 1,238,185 |  |  | $ | 8,875 |  |  | $ | (88,970) |  |  | $ | 1,158,090 |  |  | 6 |  |  | $ | 64,288 |  |  | $ | (532) |  |  | 44 |  |  | $ | 480,248 |  |  | $ | (88,438) |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and federal agency obligations |  | $ | 88,344 |  |  | $ | — |  |  | $ | (7,281) |  |  | $ | 81,063 |  |  | 12 |  |  | $ | 41,201 |  |  | $ | (2,120) |  |  | 4 |  |  | $ | 39,862 |  |  | $ | (5,161) |
Mortgage-backed securities* |  | 1,530,582 |  |  | — |  |  | (237,614) |  |  | 1,292,968 |  |  | 113 |  |  | 455,836 |  |  | (56,999) |  |  | 70 |  |  | 837,132 |  |  | (180,615) |
Corporate bonds |  | 44,377 |  |  | — |  |  | (3,643) |  |  | 40,734 |  |  | 4 |  |  | 29,644 |  |  | (2,028) |  |  | 1 |  |  | 11,090 |  |  | (1,615) |
Mortgage revenue bonds |  | 14,902 |  |  | — |  |  | — |  |  | 14,902 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | $ | 1,678,205 |  |  | $ | — |  |  | $ | (248,538) |  |  | $ | 1,429,667 |  |  | 129 |  |  | $ | 526,681 |  |  | $ | (61,147) |  |  | 75 |  |  | $ | 888,084 |  |  | $ | (187,391) |
Held-to-maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and federal agency obligations |  | $ | 59,894 |  |  | $ | — |  |  | $ | (8,478) |  |  | $ | 51,416 |  |  | 1 |  |  | $ | 16,874 |  |  | $ | (3,222) |  |  | 2 |  |  | $ | 34,542 |  |  | $ | (5,256) |
Mortgage-backed securities* |  | 1,191,853 |  |  | 2,670 |  |  | (94,968) |  |  | 1,099,555 |  |  | 22 |  |  | 183,629 |  |  | (10,593) |  |  | 51 |  |  | 567,250 |  |  | (84,375) |
|  | $ | 1,251,747 |  |  | $ | 2,670 |  |  | $ | (103,446) |  |  | $ | 1,150,971 |  |  | 23 |  |  | $ | 200,503 |  |  | $ | (13,815) |  |  | 53 |  |  | $ | 601,792 |  |  | $ | (89,631) |
* 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 at March 31, 2023 and December 31, 2022, 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 rated 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 at March 31, 2023 and December 31, 2022. 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:
March 31, 2023 |  | Amortized cost |  | Fair value
(in thousands) |  |  |  |
Available-for-sale |  |  |  |
Due in one year or less |  | $ | 2,579 |  |  | $ | 2,531 |
Due after one year through five years |  | 127,548 |  |  | 118,523 |
Due after five years through ten years |  | 14,766 |  |  | 14,766 |
Due after ten years |  | — |  |  | — |
|  | 144,893 |  |  | 135,820 |
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies |  | 1,500,717 |  |  | 1,283,935 |
Total available-for-sale securities |  | $ | 1,645,610 |  |  | $ | 1,419,755 |
Held-to-maturity |  |  |  |
Due in one year or less |  | $ | — |  |  | $ | — |
Due after one year through five years |  | — |  |  | — |
Due after five years through ten years |  | 59,900 |  |  | 52,728 |
Due after ten years |  | — |  |  | — |
|  | 59,900 |  |  | 52,728 |
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies |  | 1,178,285 |  |  | 1,105,362 |
Total held-to-maturity securities |  | $ | 1,238,185 |  |  | $ | 1,158,090 |
There were no sales of available-for-sale securities for the quarters ended March 31, 2023 and 2022. The components of loans were summarized as follows:
| March 31, 2023 |  | December 31, 2022
(in thousands) |  |  |
Real estate: |  |  |
Residential 1-4 family | $ | 2,484,316 |  |  | $ | 2,479,637 |
Commercial real estate | 1,377,184 |  |  | 1,358,123 |
Home equity line of credit | 1,022,800 |  |  | 1,002,905 |
Residential land | 20,061 |  |  | 20,679 |
Commercial construction | 94,267 |  |  | 88,489 |
Residential construction | 15,749 |  |  | 20,788 |
Total real estate | 5,014,377 |  |  | 4,970,621 |
Commercial | 800,949 |  |  | 779,691 |
Consumer | 272,401 |  |  | 254,709 |
Total loans | 6,087,727 |  |  | 6,005,021 |
Less: Deferred fees and discounts | (28,373) |  |  | (26,115) |
Allowance for credit losses | (71,296) |  |  | (72,216) |
Total loans, net | $ | 5,988,058 |  |  | $ | 5,906,690 |
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. Allowance for credit losses. The allowance for credit losses (balances and changes) 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 loans |  | Consumer loans |  | Total
Three months ended March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 6,270 |  |  | $ | 21,898 |  |  | $ | 6,125 |  |  | $ | 717 |  |  | $ | 1,195 |  |  | $ | 46 |  |  | $ | 12,426 |  |  | $ | 23,539 |  |  | $ | 72,216 |
Charge-offs |  | (809) |  |  | — |  |  | (63) |  |  | — |  |  | — |  |  | — |  |  | (227) |  |  | (2,323) |  |  | (3,422) |
Recoveries |  | 4 |  |  | — |  |  | 17 |  |  | — |  |  | — |  |  | — |  |  | 398 |  |  | 908 |  |  | 1,327 |
Provision |  | (853) |  |  | 803 |  |  | (26) |  |  | (97) |  |  | (460) |  |  | (18) |  |  | (661) |  |  | 2,487 |  |  | 1,175 |
Ending balance |  | $ | 4,612 |  |  | $ | 22,701 |  |  | $ | 6,053 |  |  | $ | 620 |  |  | $ | 735 |  |  | $ | 28 |  |  | $ | 11,936 |  |  | $ | 24,611 |  |  | $ | 71,296 |
Three months ended March 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 6,545 |  |  | $ | 24,696 |  |  | $ | 5,657 |  |  | $ | 646 |  |  | $ | 2,186 |  |  | $ | 18 |  |  | $ | 15,798 |  |  | $ | 15,584 |  |  | $ | 71,130 |
Charge-offs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (76) |  |  | (1,482) |  |  | (1,558) |
Recoveries |  | 8 |  |  | — |  |  | 11 |  |  | 5 |  |  | — |  |  | — |  |  | 353 |  |  | 1,025 |  |  | 1,402 |
Provision |  | 1,321 |  |  | (4,520) |  |  | (18) |  |  | 46 |  |  | 154 |  |  | 13 |  |  | (1,761) |  |  | 1,002 |  |  | (3,763) |
Ending balance |  | $ | 7,874 |  |  | $ | 20,176 |  |  | $ | 5,650 |  |  | $ | 697 |  |  | $ | 2,340 |  |  | $ | 31 |  |  | $ | 14,314 |  |  | $ | 16,129 |  |  | $ | 67,211 |
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
Three months ended March 31, 2023 |  |  |  |  |  |  |  |
Allowance for loan commitments: |  |  |  |  |  |  |  |
Beginning balance |  | $ | 400 |  |  | $ | 2,600 |  |  | $ | 1,400 |  |  | $ | 4,400 |
Provision |  | — |  |  | — |  |  | — |  |  | — |
Ending balance |  | $ | 400 |  |  | $ | 2,600 |  |  | $ | 1,400 |  |  | $ | 4,400 |
Three months ended March 31, 2022 |  |  |  |  |  |
Allowance for loan commitments: |  |  |  |  |  |  |  |
Beginning balance |  | $ | 400 |  |  | $ | 3,700 |  |  | $ | 800 |  |  | $ | 4,900 |
Provision |  | — |  |  | (100) |  |  | 600 |  |  | 500 |
Ending balance |  | $ | 400 |  |  | $ | 3,600 |  |  | $ | 1,400 |  |  | $ | 5,400 |
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) |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Revolving |  | Converted to term loans |  | Total
March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 46,292 |  |  | $ | 425,843 |  |  | $ | 750,578 |  |  | $ | 418,780 |  |  | $ | 110,618 |  |  | $ | 727,411 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,479,522 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | 938 |  |  | 971 |  |  | — |  |  | — |  |  | 1,909 |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 930 |  |  | — |  |  | — |  |  | 930 |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | 267 |  |  | — |  |  | 1,688 |  |  | — |  |  | — |  |  | 1,955 |
|  | 46,292 |  |  | 425,843 |  |  | 750,578 |  |  | 419,047 |  |  | 111,556 |  |  | 731,000 |  |  | — |  |  | — |  |  | 2,484,316 |
Current YTD period |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross charge-offs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 809 |  |  | — |  |  | — |  |  | 809 |
Home equity line of credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 973,686 |  |  | 46,565 |  |  | 1,020,251 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 781 |  |  | 115 |  |  | 896 |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 346 |  |  | 337 |  |  | 683 |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 573 |  |  | 397 |  |  | 970 |
|  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 975,386 |  |  | 47,414 |  |  | 1,022,800 |
Current YTD period |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross charge-offs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 63 |  |  | 63 |
Residential land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 1,204 |  |  | 5,237 |  |  | 8,587 |  |  | 4,039 |  |  | — |  |  | 994 |  |  | — |  |  | — |  |  | 20,061 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 1,204 |  |  | 5,237 |  |  | 8,587 |  |  | 4,039 |  |  | — |  |  | 994 |  |  | — |  |  | — |  |  | 20,061 |
Current YTD period |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross charge-offs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Residential construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 1,444 |  |  | 6,786 |  |  | 7,519 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 15,749 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 1,444 |  |  | 6,786 |  |  | 7,519 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 15,749 |
Current YTD period |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross charge-offs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 36,794 |  |  | 189,133 |  |  | 18,047 |  |  | 4,233 |  |  | 4,301 |  |  | 341 |  |  | 9,589 |  |  | 4,904 |  |  | 267,342 |
30-59 days past due |  | 203 |  |  | 1,628 |  |  | 235 |  |  | 54 |  |  | 170 |  |  | 11 |  |  | 78 |  |  | 120 |  |  | 2,499 |
60-89 days past due |  | — |  |  | 899 |  |  | 116 |  |  | 59 |  |  | 129 |  |  | 4 |  |  | 16 |  |  | 117 |  |  | 1,340 |
Greater than 89 days past due |  | — |  |  | 502 |  |  | 199 |  |  | 59 |  |  | 105 |  |  | 26 |  |  | 82 |  |  | 247 |  |  | 1,220 |
|  | 36,997 |  |  | 192,162 |  |  | 18,597 |  |  | 4,405 |  |  | 4,705 |  |  | 382 |  |  | 9,765 |  |  | 5,388 |  |  | 272,401 |
Current YTD period |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross charge-offs |  | 189 |  |  | 1,523 |  |  | 319 |  |  | 57 |  |  | 135 |  |  | 21 |  |  | 15 |  |  | 64 |  |  | 2,323 |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 41,312 |  |  | 392,018 |  |  | 174,655 |  |  | 276,754 |  |  | 52,121 |  |  | 339,660 |  |  | 8,235 |  |  | — |  |  | 1,284,755 |
Special Mention |  | — |  |  | — |  |  | 11,250 |  |  | 3,425 |  |  | 30,179 |  |  | 21,307 |  |  | — |  |  | — |  |  | 66,161 |
Substandard |  | 5,433 |  |  | — |  |  | — |  |  | 659 |  |  | 11,356 |  |  | 8,820 |  |  | — |  |  | — |  |  | 26,268 |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 46,745 |  |  | 392,018 |  |  | 185,905 |  |  | 280,838 |  |  | 93,656 |  |  | 369,787 |  |  | 8,235 |  |  | — |  |  | 1,377,184 |
|  | Term Loans by Origination Year |  | Revolving Loans |  |
(in thousands) |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Revolving |  | Converted to term loans |  | Total
Current YTD period |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross charge-offs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | — |  |  | 11,206 |  |  | 54,924 |  |  | 44 |  |  | — |  |  | — |  |  | 28,093 |  |  | — |  |  | 94,267 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | — |  |  | 11,206 |  |  | 54,924 |  |  | 44 |  |  | — |  |  | — |  |  | 28,093 |  |  | — |  |  | 94,267 |
Current YTD period |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross charge-offs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 30,142 |  |  | 238,671 |  |  | 184,551 |  |  | 86,275 |  |  | 60,265 |  |  | 97,277 |  |  | 66,200 |  |  | 12,918 |  |  | 776,299 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,255 |  |  | — |  |  | 8,492 |  |  | 6 |  |  | 10,753 |
Substandard |  | — |  |  | 3,234 |  |  | 1,507 |  |  | 398 |  |  | 1,320 |  |  | 5,195 |  |  | 899 |  |  | 1,344 |  |  | 13,897 |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 30,142 |  |  | 241,905 |  |  | 186,058 |  |  | 86,673 |  |  | 63,840 |  |  | 102,472 |  |  | 75,591 |  |  | 14,268 |  |  | 800,949 |
Current YTD period |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross charge-offs |  | — |  |  | — |  |  | 51 |  |  | — |  |  | — |  |  | — |  |  | 14 |  |  | 162 |  |  | 227 |
Total loans |  | $ | 162,824 |  |  | $ | 1,275,157 |  |  | $ | 1,212,168 |  |  | $ | 795,046 |  |  | $ | 273,757 |  |  | $ | 1,204,635 |  |  | $ | 1,097,070 |  |  | $ | 67,070 |  |  | $ | 6,087,727 |
|  | Term Loans by Origination Year |  | Revolving Loans |  |
(in thousands) |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving |  | Converted to term loans |  | Total
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 432,707 |  |  | $ | 755,056 |  |  | $ | 423,455 |  |  | $ | 113,096 |  |  | $ | 51,860 |  |  | $ | 698,354 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,474,528 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | 448 |  |  | 1,098 |  |  | — |  |  | — |  |  | 1,546 |
60-89 days past due |  | — |  |  | — |  |  | 268 |  |  | — |  |  | — |  |  | 90 |  |  | — |  |  | — |  |  | 358 |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | 809 |  |  | 2,396 |  |  | — |  |  | — |  |  | 3,205 |
|  | 432,707 |  |  | 755,056 |  |  | 423,723 |  |  | 113,096 |  |  | 53,117 |  |  | 701,938 |  |  | — |  |  | — |  |  | 2,479,637 |
Home equity line of credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 959,131 |  |  | 40,814 |  |  | 999,945 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,103 |  |  | 209 |  |  | 1,312 |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 209 |  |  | 226 |  |  | 435 |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 587 |  |  | 626 |  |  | 1,213 |
|  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 961,030 |  |  | 41,875 |  |  | 1,002,905 |
Residential land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 5,245 |  |  | 9,010 |  |  | 5,222 |  |  | 203 |  |  | 522 |  |  | 477 |  |  | — |  |  | — |  |  | 20,679 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 5,245 |  |  | 9,010 |  |  | 5,222 |  |  | 203 |  |  | 522 |  |  | 477 |  |  | — |  |  | — |  |  | 20,679 |
Residential construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 7,986 |  |  | 11,624 |  |  | 1,178 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 20,788 |
30-59 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
60-89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Greater than 89 days past due |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 7,986 |  |  | 11,624 |  |  | 1,178 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 20,788 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 199,574 |  |  | 21,330 |  |  | 5,543 |  |  | 7,580 |  |  | 527 |  |  | 140 |  |  | 10,810 |  |  | 4,782 |  |  | 250,286 |
30-59 days past due |  | 1,110 |  |  | 287 |  |  | 65 |  |  | 239 |  |  | 30 |  |  | — |  |  | 81 |  |  | 167 |  |  | 1,979 |
60-89 days past due |  | 756 |  |  | 163 |  |  | 88 |  |  | 137 |  |  | 19 |  |  | — |  |  | 45 |  |  | 107 |  |  | 1,315 |
Greater than 89 days past due |  | 621 |  |  | 105 |  |  | 37 |  |  | 176 |  |  | 28 |  |  | — |  |  | 20 |  |  | 142 |  |  | 1,129 |
|  | 202,061 |  |  | 21,885 |  |  | 5,733 |  |  | 8,132 |  |  | 604 |  |  | 140 |  |  | 10,956 |  |  | 5,198 |  |  | 254,709 |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 390,206 |  |  | 177,130 |  |  | 283,321 |  |  | 51,542 |  |  | 63,084 |  |  | 278,280 |  |  | 8,235 |  |  | — |  |  | 1,251,798 |
Special Mention |  | — |  |  | 11,250 |  |  | 3,446 |  |  | 40,423 |  |  | — |  |  | 24,466 |  |  | — |  |  | — |  |  | 79,585 |
Substandard |  | — |  |  | — |  |  | 665 |  |  | 11,357 |  |  | — |  |  | 14,718 |  |  | — |  |  | — |  |  | 26,740 |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 390,206 |  |  | 188,380 |  |  | 287,432 |  |  | 103,322 |  |  | 63,084 |  |  | 317,464 |  |  | 8,235 |  |  | — |  |  | 1,358,123 |
Commercial construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 15,094 |  |  | 47,478 |  |  | 44 |  |  | — |  |  | — |  |  | — |  |  | 25,873 |  |  | — |  |  | 88,489 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 15,094 |  |  | 47,478 |  |  | 44 |  |  | — |  |  | — |  |  | — |  |  | 25,873 |  |  | — |  |  | 88,489 |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 239,852 |  |  | 185,013 |  |  | 85,220 |  |  | 68,161 |  |  | 46,142 |  |  | 53,192 |  |  | 60,871 |  |  | 13,964 |  |  | 752,415 |
Special Mention |  | — |  |  | — |  |  | — |  |  | 2,374 |  |  | — |  |  | 645 |  |  | 9,005 |  |  | 8 |  |  | 12,032 |
Substandard |  | 3,322 |  |  | 2,305 |  |  | 401 |  |  | 1,304 |  |  | 1,346 |  |  | 3,849 |  |  | 1,664 |  |  | 1,053 |  |  | 15,244 |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | 243,174 |  |  | 187,318 |  |  | 85,621 |  |  | 71,839 |  |  | 47,488 |  |  | 57,686 |  |  | 71,540 |  |  | 15,025 |  |  | 779,691 |
Total loans |  | $ | 1,296,473 |  |  | $ | 1,220,751 |  |  | $ | 808,953 |  |  | $ | 296,592 |  |  | $ | 164,815 |  |  | $ | 1,077,705 |  |  | $ | 1,077,634 |  |  | $ | 62,098 |  |  | $ | 6,005,021 |
Revolving loans converted to term loans during the three months ended March 31, 2023 in the commercial, home equity line of credit and consumer portfolios were $1.2 million, $7.8 million and $1.1 million, respectively. Revolving loans converted to term loans during the three months ended March 31, 2022 in the commercial, home equity line of credit and consumer portfolios were $0.5 million, $4.4 million and $1.0 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 |  | Amortized cost> 90 days and accruing
March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | $ | 1,909 |  |  | $ | 930 |  |  | $ | 1,955 |  |  | $ | 4,794 |  |  | $ | 2,479,522 |  |  | $ | 2,484,316 |  |  | $ | — |
Commercial real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,377,184 |  |  | 1,377,184 |  |  | — |
Home equity line of credit |  | 896 |  |  | 683 |  |  | 970 |  |  | 2,549 |  |  | 1,020,251 |  |  | 1,022,800 |  |  | — |
Residential land |  | — |  |  | — |  |  | — |  |  | — |  |  | 20,061 |  |  | 20,061 |  |  | — |
Commercial construction |  | — |  |  | — |  |  | — |  |  | — |  |  | 94,267 |  |  | 94,267 |  |  | — |
Residential construction |  | — |  |  | — |  |  | — |  |  | — |  |  | 15,749 |  |  | 15,749 |  |  | — |
Commercial |  | 263 |  |  | 71 |  |  | 427 |  |  | 761 |  |  | 800,188 |  |  | 800,949 |  |  | — |
Consumer |  | 2,499 |  |  | 1,340 |  |  | 1,220 |  |  | 5,059 |  |  | 267,342 |  |  | 272,401 |  |  | — |
Total loans |  | $ | 5,567 |  |  | $ | 3,024 |  |  | $ | 4,572 |  |  | $ | 13,163 |  |  | $ | 6,074,564 |  |  | $ | 6,087,727 |  |  | $ | — |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | $ | 1,546 |  |  | $ | 358 |  |  | $ | 3,205 |  |  | $ | 5,109 |  |  | $ | 2,474,528 |  |  | $ | 2,479,637 |  |  | $ | — |
Commercial real estate |  | 508 |  |  | 217 |  |  | — |  |  | 725 |  |  | 1,357,398 |  |  | 1,358,123 |  |  | — |
Home equity line of credit |  | 1,312 |  |  | 435 |  |  | 1,213 |  |  | 2,960 |  |  | 999,945 |  |  | 1,002,905 |  |  | — |
Residential land |  | — |  |  | — |  |  | — |  |  | — |  |  | 20,679 |  |  | 20,679 |  |  | — |
Commercial construction |  | — |  |  | — |  |  | — |  |  | — |  |  | 88,489 |  |  | 88,489 |  |  | — |
Residential construction |  | — |  |  | — |  |  | — |  |  | — |  |  | 20,788 |  |  | 20,788 |  |  | — |
Commercial |  | 614 |  |  | 18 |  |  | 77 |  |  | 709 |  |  | 778,982 |  |  | 779,691 |  |  | — |
Consumer |  | 1,979 |  |  | 1,315 |  |  | 1,129 |  |  | 4,423 |  |  | 250,286 |  |  | 254,709 |  |  | — |
Total loans |  | $ | 5,959 |  |  | $ | 2,343 |  |  | $ | 5,624 |  |  | $ | 13,926 |  |  | $ | 5,991,095 |  |  | $ | 6,005,021 |  |  | $ | — |
The credit risk profile based on nonaccrual loans were as follows:
(in thousands) |  | March 31, 2023 |  | December 31, 2022
|  | With a Related ACL |  | Without a Related ACL |  | Total |  | With a Related ACL |  | Without a Related ACL |  | Total
Real estate: |  |  |  |  |  |  |  |  |  |  |  |
Residential 1-4 family |  | $ | 3,371 |  |  | $ | 2,117 |  |  | $ | 5,488 |  |  | $ | 4,198 |  |  | $ | 2,981 |  |  | $ | 7,179 |
Commercial real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Home equity line of credit |  | 4,014 |  |  | 1,237 |  |  | 5,251 |  |  | 3,654 |  |  | 1,442 |  |  | 5,096 |
Residential land |  | 109 |  |  | — |  |  | 109 |  |  | 420 |  |  | — |  |  | 420 |
Commercial construction |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Residential construction |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial |  | 1,744 |  |  | — |  |  | 1,744 |  |  | 2,183 |  |  | — |  |  | 2,183 |
Consumer |  | 1,895 |  |  | — |  |  | 1,895 |  |  | 1,588 |  |  | — |  |  | 1,588 |
Total |  | $ | 11,133 |  |  | $ | 3,354 |  |  | $ | 14,487 |  |  | $ | 12,043 |  |  | $ | 4,423 |  |  | $ | 16,466 |
ASB did not recognize interest on nonaccrual loans for the three months ended March 31, 2023 and 2022. Modifications Made to Borrowers Experiencing Financial Difficulty. The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination. The starting point for the estimate of the allowance for credit losses is historical loan information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. ASB uses a probability of default/loss given default model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made at the time of the modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses, a change to the allowance for credit losses is generally not recorded upon modification. Modifications may include interest rate reductions, interest only payments for an extended period of time, protracted terms such as amortization and maturity beyond the customary length of time found in the normal marketplace, and other actions intended to minimize economic loss and to provide alternatives to foreclosure or repossession of collateral. During the first three months of 2023, no loans received a material modification based on borrower financial difficulty. Troubled debt restructurings. Prior to January 1, 2023, a loan modification was 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. With the adoption of ASU No. 2022-02, accounting guidance for TDRs by creditors is eliminated. Loan refinancing and restructuring guidance is applied to determine whether a modification results in a new loan or a continuation of an existing loan. ASB will continue TDR disclosures for years prior to the adoption of ASU No. 2022-02. The credit risk profile based on loans whose terms have been modified and accruing interest were as follows:
(in thousands) |  |  |  | December 31, 2022
Real estate: |  |  |  |
Residential 1-4 family |  |  |  | $ | 8,821 |
Commercial real estate |  |  |  | 9,477 |
Home equity line of credit |  |  |  | 4,404 |
Residential land |  |  |  | 782 |
Commercial construction |  |  |  | — |
Residential construction |  |  |  | — |
Commercial |  |  |  | 6,596 |
Consumer |  |  |  | 50 |
Total troubled debt restructured loans accruing interest |  |  |  | $ | 30,130 |
Loans modified as a TDR. There were no loan modifications that occurred during the three months ended March 31, 2022. There were no loans modified in TDRs that experienced a payment default of 90 days or more during the first three months of 2022. 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, 2022. 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:
|  | Amortized cost |  |
(in thousands) |  | March 31, 2023 |  | December 31, 2022 |  | Collateral type
Real estate: |  |  |  |  |  |
Residential 1-4 family |  | $ | 2,353 |  |  | $ | 3,959 |  |  | Residential real estate property
Home equity line of credit |  | 1,237 |  |  | 1,425 |  |  | Residential real estate property
Total |  | $ | 3,590 |  |  | $ | 5,384 |  |  |
ASB had $3.4 million and $4.2 million of consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure at March 31, 2023 and December 31, 2022, respectively. 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 proceeds from the sale of residential mortgages of $5.7 million and $75.6 million for the three months ended March 31, 2023 and 2022, respectively, and recognized gains on such sales of $0.1 million and $1.1 million for the three months ended March 31, 2023 and 2022, respectively. There were no repurchased mortgage loans for the three months ended March 31, 2023 and 2022. Mortgage servicing fees, a component of other income, net, were $0.9 million for the three months ended March 31, 2023 and 2022. Changes in the carrying value of MSRs were as follows:
(in thousands) |  | Gross carrying amount |  | Accumulated amortization |  | Valuation allowance |  | Net carrying amount
March 31, 2023 |  | $ | 17,868 |  |  | $ | (9,123) |  |  | $ | — |  |  | $ | 8,745 |
December 31, 2022 |  | 19,544 |  |  | (10,497) |  |  | — |  |  | 9,047 |
Changes related to MSRs were as follows:
|  |  |  | Three months ended March 31
(in thousands) |  |  |  |  |  | 2023 |  | 2022
Mortgage servicing rights |  |  |  |  |  |  |  |
Beginning balance |  |  |  |  |  | $ | 9,047 |  |  | $ | 9,950 |
Amount capitalized |  |  |  |  |  | 51 |  |  | 719 |
Amortization |  |  |  |  |  | (353) |  |  | (645) |
Other-than-temporary impairment |  |  |  |  |  | — |  |  | — |
Carrying amount before valuation allowance |  |  |  |  |  | 8,745 |  |  | 10,024 |
Valuation allowance for mortgage servicing rights |  |  |  |  |  |  |  |
Beginning balance |  |  |  |  |  | — |  |  | — |
Provision |  |  |  |  |  | — |  |  | — |
Other-than-temporary impairment |  |  |  |  |  | — |  |  | — |
Ending balance |  |  |  |  |  | — |  |  | — |
Net carrying value of mortgage servicing rights |  |  |  |  |  | $ | 8,745 |  |  | $ | 10,024 |
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 condensed 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:
(dollars in thousands) |  | March 31, 2023 |  | December 31, 2022
Unpaid principal balance |  | $ | 1,431,037 |  |  | $ | 1,451,322 |
Weighted average note rate |  | 3.39 | % |  | 3.38 | %
Weighted average discount rate |  | 10.00 | % |  | 10.00 | %
Weighted average prepayment speed |  | 6.39 | % |  | 6.56 | %
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:
(dollars in thousands) |  | March 31, 2023 |  | December 31, 2022
Prepayment rate: |  |  |  |
25 basis points adverse rate change |  | $ | (109) |  |  | $ | (92) |
50 basis points adverse rate change |  | (243) |  |  | (214) |
Discount rate: |  |  |  |
25 basis points adverse rate change |  | (190) |  |  | (182) |
50 basis points adverse rate change |  | (376) |  |  | (361) |
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. Other borrowings. As of March 31, 2023 and December 31, 2022, ASB had nil and $414.0 million of FHLB advances outstanding, respectively, and borrowings with the Federal Reserve Bank of $550.0 million and nil, respectively. As of March 31, 2023, ASB was in compliance with all FHLB Advances, Pledge and Security Agreement requirements and all requirements to borrow at the Federal Reserve Discount Window Primary Credit Facility under 12 CFR 201.4(a) guidelines. 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 condensed 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 a 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 |  |  |  |  |  |
March 31, 2023 |  | $ | 131 |  |  | $ | — |  |  | $ | 131 |
December 31, 2022 |  | 281 |  |  | — |  |  | 281 |
|  | 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 |  |  |  |  |  |
March 31, 2023 |  | $ | 131 |  |  | $ | 172 |  |  | $ | — |
December 31, 2022 |  | 281 |  |  | 327 |  |  | — |
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. 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:
|  | March 31, 2023 |  | December 31, 2022
(in thousands) |  | Notional amount |  | Fair value |  | Notional amount |  | Fair value
Interest rate lock commitments |  | $ | 2,467 |  |  | $ | 26 |  |  | $ | 1,720 |  |  | $ | 9 |
Forward commitments |  | 2,250 |  |  | 5 |  |  | 1,500 |  |  | 18 |
ASB’s derivative financial instruments, their fair values and balance sheet location were as follows:
Derivative Financial Instruments Not Designated as Hedging Instruments 1 |  | March 31, 2023 |  | December 31, 2022
(in thousands) |  | Asset derivatives |  | Liability derivatives |  | Asset derivatives |  | Liability derivatives
Interest rate lock commitments |  | $ | 26 |  |  | $ | — |  |  | $ | 9 |  |  | $ | — |
Forward commitments |  | 9 |  |  | 4 |  |  | 18 |  |  | — |
|  | $ | 35 |  |  | $ | 4 |  |  | $ | 27 |  |  | $ | — |
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 as Hedging Instruments |  | Location of net gains (losses) recognized in the Statements of Income |  |  |  | Three months ended March 31
(in thousands) |  |  |  |  |  |  | 2023 |  | 2022
Interest rate lock commitments |  | Mortgage banking income |  |  |  |  |  | $ | 17 |  |  | $ | (655) |
Forward commitments |  | Mortgage banking income |  |  |  |  |  | (13) |  |  | 178 |
|  |  |  |  |  |  |  | $ | 4 |  |  | $ | (477) |
Low-Income Housing Tax Credit (LIHTC). ASB’s unfunded commitments to fund its LIHTC investment partnerships were $77.1 million and $70.1 million at March 31, 2023 and December 31, 2022, respectively. These unfunded commitments were unconditional and legally binding and are recorded in other liabilities with a corresponding increase in other assets. As of March 31, 2023, ASB did not have any impairment losses resulting from forfeiture or ineligibility of tax credits or other circumstances related to its LIHTC investment partnerships.

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