Offsetting Assets and Liabilities

The following tables present information about certain assets and liabilities that are subject to master netting arrangements (or similar agreements) and can potentially be offset on the Company’s consolidated balance sheets at September 30, 2013 and December 31, 2012:

Offsetting of Financial Assets and Derivative Assets



	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets					Net Amount
(In Thousands)	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets				Financial Instruments			Cash Collateral Received		Net Amount
September 30, 2013
Derivative hedging instruments, at fair value	$	4,629	$	—	$	4,629	$	(4,629	)	$	—	$	—
Total	$	4,629	$	—	$	4,629	$	(4,629	)	$	—	$	—

December 31, 2012
Derivative hedging instruments, at fair value	$	203	$	—	$	203	$	(203	)	$	—	$	—
Total	$	203	$	—	$	203	$	(203	)	$	—	$	—

Offsetting of Financial Liabilities and Derivative Liabilities



	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
(In Thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets				Financial Instruments (1)			Cash Collateral Pledged (1)			Net Amount
September 30, 2013
Derivative hedging instruments, at fair value (2)	$	56,529	$	—	$	56,529	$	2,746		$	(59,275	)	$	—
Repurchase agreements (3)	8,568,171		—		8,568,171		(8,568,171		)	—			—
Total	$	8,624,700	$	—	$	8,624,700	$	(8,565,425	)	$	(59,275	)	$	—

December 31, 2012
Derivative hedging instruments, at fair value (2)	$	63,034	$	—	$	63,034	$	(58,018	)	$	(5,016	)	$	—
Repurchase agreements (3)	8,752,472		—		8,752,472		(8,752,472		)	—			—
Total	$	8,815,506	$	—	$	8,815,506	$	(8,810,490	)	$	(5,016	)	$	—

(1) Amounts disclosed in the Financial Instruments column of the table above represents collateral pledged that is available to be offset against liability balances associated with repurchase agreement and derivative transactions. Amounts disclosed in the Cash Collateral Pledged column of the table above represents amounts pledged as collateral against derivative transactions.

(2) The fair value of securities pledged against the Company’s Swaps was $67.3 million and $68.9 million at September 30, 2013 and December 31, 2012, respectively.

(3) The fair value of securities pledged against the Company’s repurchase agreements was $10.189 billion and $10.550 billion at September 30, 2013 and December 31, 2012, respectively.

Nature of Setoff Rights

In the Company’s consolidated balance sheets, all balances associated with the repurchase agreement and derivatives transactions are presented on a gross basis.

Certain of the Company’s repurchase agreement and derivative transactions are governed by underlying agreements that generally provide for a right of setoff in the event of default or in the event of a bankruptcy of either party to the transaction. For one repurchase agreement counterparty, the underlying agreements provide for an unconditional right of setoff.