Balance Sheet Offsetting

The following tables show the extent to which assets and liabilities relating to derivative instruments, securities purchased under agreements to resell (resell agreements), and securities sold under agreements to repurchase (repurchase agreements) have been offset in the consolidated balance sheets. They also provide information about these instruments which are subject to an enforceable master netting arrangement, irrespective of whether they are offset, and the extent to which the instruments could potentially be offset. Also shown is collateral received or pledged in the form of other financial instruments, which are generally marketable securities. The collateral amounts in these tables are limited to the outstanding balances of the related asset or liability (after netting is applied); thus amounts of excess collateral are not shown. Most of the assets and liabilities in the following tables were transacted under master netting arrangements that contain a conditional right of offset, such as close-out netting, upon default.

The Company is party to master netting arrangements with most of its swap derivative counterparties; however, the Company does not offset derivative assets and liabilities under these arrangements on its consolidated balance sheet. Collateral, usually in the form of marketable securities, is exchanged between the Company and dealer bank counterparties, and is generally subject to thresholds and transfer minimums. By contract, it may be sold or re-pledged by the secured party until recalled at a subsequent valuation date by the pledging party. For those swap transactions requiring central clearing, the Company posts cash and securities to its clearing agency. At June 30, 2014, the Company had a net liability position with dealer bank and clearing agency counterparties totaling $11.7 million, and had posted securities with a fair value of $8.1 million and cash totaling $4.6 million. Collateral positions are valued daily, and adjustments to amounts received and pledged by the Company are made as appropriate to maintain proper collateralization for these transactions. Swap derivative transactions with customers are generally secured by rights to non-financial collateral, such as real and personal property, which is not shown in the table below.

Resell and repurchase agreements are agreements to purchase/sell securities subject to an obligation to resell/repurchase the same or similar securities. They are accounted for as collateralized financing transactions, not as sales and purchases of the securities portfolio. The securities collateral accepted or pledged in resell and repurchase agreements with other financial institutions also may be sold or re-pledged by the secured party, but is usually delivered to and held by third party trustees. The Company generally retains custody of securities pledged for repurchase agreements with customers.

The Company is party to several agreements commonly known as collateral swaps. These agreements involve the exchange of collateral under simultaneous repurchase and resell agreements with the same financial institution counterparty. These repurchase and resell agreements have the same principal amounts, inception dates, and maturity dates and have been offset against each other in the balance sheet, as permitted under the netting provisions of ASC 210-20-45. The collateral swaps totaled $400.0 million at June 30, 2014 and $300.0 million at December 31, 2013. At June 30, 2014, the Company had posted collateral of $411.8 million in marketable securities, consisting mainly of agency mortgage-backed bonds, and had accepted $438.4 million in investment grade asset-backed, commercial mortgage-backed, and corporate bonds.



								Gross Amounts Not Offset in the Balance Sheet
(In thousands)	Gross Amount Recognized		Gross Amounts Offset in the Balance Sheet			Net Amounts Presented in the Balance Sheet		Financial Instruments			Securities Collateral Received/Pledged			Net Amount
June 30, 2014
Assets:
Derivatives subject to master netting agreements	$	11,569	$	—		$	11,569	$	(367	)	$	—		$	11,202
Derivatives not subject to master netting agreements	699		—			699
Total derivatives	12,268		—			12,268
Total resell agreements, subject to master netting arrangements	1,350,000		(400,000		)	950,000		—			(950,000		)	—
Liabilities:
Derivatives subject to master netting agreements	12,568		—			12,568		(367		)	(10,554		)	1,647
Derivatives not subject to master netting agreements	74		—			74
Total derivatives	12,642		—			12,642
Total repurchase agreements, subject to master netting arrangements	1,378,678		(400,000		)	978,678		—			(978,678		)	—
December 31, 2013
Assets:
Derivatives subject to master netting agreements	$	11,579	$	—		$	11,579	$	(1,299	)	$	(338	)	$	9,942
Derivatives not subject to master netting agreements	1,401		—			1,401
Total derivatives	12,980		—			12,980
Total resell agreements, subject to master netting arrangements	1,450,000		(300,000		)	1,150,000		—			(1,150,000		)	—
Liabilities:
Derivatives subject to master netting agreements	12,962		—			12,962		(1,299		)	(9,063		)	2,600
Derivatives not subject to master netting agreements	367		—			367
Total derivatives	13,329		—			13,329
Total repurchase agreements, subject to master netting arrangements	1,621,763		(300,000		)	1,321,763		—			(1,321,763		)	—