Derivative Financial Instruments

12 Months Ended

Dec. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments. See Note 18 for further information.

The Company has certain interest rate derivative positions that are not designated as hedging instruments. These derivative positions relate to transactions in which the Company enters into an interest rate swap with a client while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each transaction, the Company agrees to pay interest to the client on a notional amount at a variable interest rate and receive interest from the client on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the client to effectively convert a variable rate loan to a fixed rate. Because the terms of the swaps with the customers and the other financial institution offset each other, with the only difference being counterparty credit risk, changes in the fair value of the underlying derivative contracts are not materially different and do not significantly impact the Company’s results of operations.

The following table shows the amounts of non-hedging derivative financial instruments at December 31, 2013 and 2012:

			Asset derivatives			Liability derivatives
(Dollars in thousands)	Notional or contractual amount		Statement of Financial Condition classification	Fair value		Statement of Financial Condition classification	Fair value
Interest rate swap contracts	$	462,790	Other assets	$	9,894	Other liabilities	$	10,087
Loan commitments	7,878		Mortgages held for sale	12		N/A	—
Forward contracts - mortgage loan	10,600		Mortgages held for sale	121		N/A	—
Forward contracts - foreign exchange	1,308		N/A	—		Other assets	7
Total - December 31, 2013	$	482,576		$	10,027		$	10,094
Interest rate swap contracts	$	446,024	Other assets	$	16,126	Other liabilities	$	16,444
Loan commitments	33,961		Mortgages held for sale	220		N/A	—
Forward contracts - mortgage loan	21,500		N/A	—		Mortgages held for sale	33
Total - December 31, 2012	$	501,485		$	16,346		$	16,477

The following table shows the amounts included in the Statements of Income for non-hedging derivative financial instruments at December 31, 2013, 2012 and 2011:

		Gain (loss)
(Dollars in thousands)	Statement of Income classification	2013			2012		2011
Interest rate swap contracts	Other expense	$	124		$	131	$	57
Interest rate swap contracts	Other income	716			721		588
Loan commitments	Mortgage banking income	(208		)	31		159
Forward contracts - mortgage loan	Mortgage banking income	154			185		(669		)
Forward contracts - foreign exchange	Other income	(7		)	—		—
Total		$	779		$	1,068	$	135

The following table shows the offsetting of financial assets and derivative assets at December 31, 2013 and 2012:

							Gross Amounts Not Offset in the Statement of Financial Condition
(Dollars in thousands)	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts of Assets Presented in the Statement of Financial Condition		Financial Instruments		Cash Collateral Received		Net Amount
December 31, 2013
Interest rate swaps	$	10,511	$	617	$	9,894	$	—	$	—	$	9,894
December 31, 2012
Interest rate swaps	$	17,422	$	1,296	$	16,126	$	—	$	—	$	16,126

The following table shows the offsetting of financial liabilities and derivative liabilities at December 31, 2013 and 2012:

							Gross Amounts Not Offset in the Statement of Financial Condition
(Dollars in thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts of Liabilities Presented in the Statement of Financial Condition		Financial Instruments		Cash Collateral Pledged		Net Amount
December 31, 2013
Interest rate swaps	$	10,704	$	617	$	10,087	$	—	$	8,409	$	1,678
Repurchase agreements	117,620		—		117,620		117,620		—		—
Total	$	128,324	$	617	$	127,707	$	117,620	$	8,409	$	1,678
December 31, 2012
Interest rate swaps	$	17,740	$	1,296	$	16,444	$	—	$	15,811	$	633
Repurchase agreements	100,180		—		100,180		100,180		—		—
Total	$	117,920	$	1,296	$	116,624	$	100,180	$	15,811	$	633

If a default in performance of any obligation of a repurchase agreement occurs, each party will set-off property held in respect of transactions against obligations owing in respect of any other transactions.