Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Total Notional or Contractual Amounts, Fair Value, Collateral and Net Exposure of Derivative Financial Instruments

The total notional or contractual amounts, fair value, collateral and net exposure of our derivative financial instruments at September 30, 2013 and December 31, 2012 were as follows:

		September 30, 2013										December 31, 2012
(Dollars in thousands)	Balance Sheet Location	Notional or Contractual Amount		Fair Value			Collateral (1)		Net Exposure (2)			Notional or Contractual Amount		Fair Value			Collateral (1)		Net Exposure (2)
Derivatives designated as hedging instruments:
Interest rate risks:
Interest rate swaps	Other assets	$	45,964	$	7,027		$	5,580	$	1,447		$	45,964	$	9,005		$	6,110	$	2,895
Derivatives not designated as hedging instruments:
Currency exchange risks:
Foreign exchange forwards	Other assets	13,685		789			—		789			51,010		488			—		488
Foreign exchange forwards	Other liabilities	208,712		(754		)	—		(754		)	102,956		(1,728		)	—		(1,728		)
Net exposure				35			—		35					(1,240		)	—		(1,240		)
Other derivative instruments:
Equity warrant assets	Other assets	180,861		92,252			—		92,252			164,332		74,272			—		74,272
Other derivatives:
Client foreign exchange forwards	Other assets	459,501		17,492			—		17,492			385,470		11,864			—		11,864
Client foreign exchange forwards	Other liabilities	482,755		(16,073		)	—		(16,073		)	356,026		(9,930		)	—		(9,930		)
Client foreign currency options	Other assets	80,400		182			—		182			132,237		1,189			—		1,189
Client foreign currency options	Other liabilities	80,400		(182		)	—		(182		)	132,237		(1,189		)	—		(1,189		)
Loan conversion options	Other assets	8,877		1,774			—		1,774			9,782		890			—		890
Client interest rate derivatives	Other assets	185,770		1,237			—		1,237			144,950		558			—		558
Client interest rate derivatives	Other liabilities	185,770		(1,427		)	—		(1,427		)	144,950		(590		)	—		(590		)
Net exposure				3,003			—		3,003					2,792			—		2,792
Net				$	102,317		$	5,580	$	96,737				$	84,829		$	6,110	$	78,719

(1) Cash collateral received from our counterparty for our interest rate swap agreement is recorded as a component of “short-term borrowings” on our consolidated balance sheets.

(2) Net exposure for contracts in a gain position reflects the replacement cost in the event of nonperformance by all such counterparties. The credit ratings of our institutional counterparties as of September 30, 2013 remain at investment grade or higher and there were no material changes in their credit ratings during the three and nine months ended September 30, 2013.

Summary of Derivative Activity and Related Impact on Consolidated Statements of Income

A summary of our derivative activity and the related impact on our consolidated statements of income for the three and nine months ended September 30, 2013 and 2012 is as follows:

		Three months ended September 30,						Nine months ended September 30,
(Dollars in thousands)	Statement of income location	2013			2012			2013			2012
Derivatives designated as hedging instruments:
Interest rate risks:
Net cash benefit associated with interest rate swaps	Interest expense—borrowings	$	634		$	612		$	1,901		$	4,537
Changes in fair value of interest rate swaps	Net gains on derivative instruments	(7		)	74			20			571
Net gains associated with interest rate risk derivatives		$	627		$	686		$	1,921		$	5,108
Derivatives not designated as hedging instruments:
Currency exchange risks:
Gains on revaluations of foreign currency instruments	Other noninterest income	$	8,101		$	1,578		$	451		$	96
(Losses) gains on internal foreign exchange forward contracts, net	Net gains on derivative instruments	(8,423		)	220			(1,511		)	1,162
Net (losses) gains associated with currency risk		$	(322	)	$	1,798		$	(1,060	)	$	1,258
Other derivative instruments:
Gains on equity warrant assets	Net gains on derivative instruments	$	18,780		$	547		$	29,475		$	12,358
Gains on client foreign exchange forward contracts, net	Net gains on derivative instruments	$	369		$	607		$	2,179		$	3,002
Net (losses) gains on other derivatives (1)	Net gains on derivative instruments	$	(517	)	$	(337	)	$	55		$	(1,293	)

(1) Primarily represents the change in fair value of loan conversion options.

Offsetting Assets

The following table summarizes our assets subject to enforceable master netting arrangements as of September 30, 2013 and December 31, 2012:

								Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
(Dollars in thousands)	Gross Amounts of Recognized Assets		Gross Amounts offset in the Statement of Financial Position			Net Amounts of Assets Presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Received			Net Amount
September 30, 2013
Derivative Assets:
Interest rate swaps	$	7,027	$	—		$	7,027	$	(1,447	)	$	(5,580	)	$	—
Foreign exchange forwards	18,281		—			18,281		(4,777		)	—			13,504
Foreign currency options	225		(43		)	182		(11		)	—			171
Client interest rate derivatives	1,237		—			1,237		(60		)	—			1,177
Total derivative assets:	26,770		(43		)	26,727		(6,295		)	(5,580		)	14,852
Reverse repurchase, securities borrowing, and similar arrangements	168,026		—			168,026		(168,026		)	—			—
Total	$	194,796	$	(43	)	$	194,753	$	(174,321	)	$	(5,580	)	$	14,852
December 31, 2012
Derivative Assets:
Interest rate swaps	$	9,005	$	—		$	9,005	$	(2,895	)	$	(6,110	)	$	—
Foreign exchange forwards	12,352		—			12,352		(7,363		)	—			4,989
Foreign currency options	1,411		(222		)	1,189		(556		)	—			633
Client interest rate derivatives	558		—			558		(24		)	—			534
Total derivative assets:	23,326		(222		)	23,104		(10,838		)	(6,110		)	6,156
Reverse repurchase, securities borrowing, and similar arrangements	133,357		—			133,357		(133,357		)	—			—
Total	$	156,683	$	(222	)	$	156,461	$	(144,195	)	$	(6,110	)	$	6,156

Offsetting Liabilities

The following table summarizes our liabilities subject to enforceable master netting arrangements as of September 30, 2013 and December 31, 2012:

								Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
(Dollars in thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts offset in the Statement of Financial Position			Net Amounts of Liabilities Presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Pledged		Net Amount
September 30, 2013
Derivative Liabilities:
Foreign exchange forwards	$	16,827	$	—		$	16,827	$	(13,964	)	$	—	$	2,863
Foreign currency options	225		(43		)	182		(171		)	—		11
Client interest rate derivatives	1,427		—			1,427		(1,362		)	—		65
Total derivative liabilities:	18,479		(43		)	18,436		(15,497		)	—		2,939
Repurchase, securities lending, and similar arrangements	—		—			—		—			—		—
Total	$	18,479	$	(43	)	$	18,436	$	(15,497	)	$	—	$	2,939
December 31, 2012
Derivative Liabilities:
Foreign exchange forwards	$	11,658	$	—		$	11,658	$	(5,720	)	$	—	$	5,938
Foreign currency options	1,411		(222		)	1,189		(633		)	—		556
Client interest rate derivatives	590		—			590		(567		)	—		23
Total derivative assets:	13,659		(222		)	13,437		(6,920		)	—		6,517
Repurchase, securities lending, and similar arrangements	—		—			—		—			—		—
Total	$	13,659	$	(222	)	$	13,437	$	(6,920	)	$	—	$	6,517