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Derivative Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2015
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 June 30, 2015 and December 31, 2014 were as follows:
 
 
 
 
June 30, 2015
 
December 31, 2014
(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

 
$
3,828

 
$
—

 
$
3,828

 
$
45,964

 
$
4,609

 
$
2,970

 
$
1,639

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Currency exchange risks:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards
 
Other assets
 
121,987

 
419

 
—

 
419

 
200,957

 
5,050

 
2,441

 
2,609

Foreign exchange forwards
 
Other liabilities
 
2,224

 
(444
)
 
—

 
(444
)
 
6,226

 
(489
)
 
—

 
(489
)
Net exposure
 
 
 
 
 
(25
)
 
—

 
(25
)
 
 
 
4,561

 
2,441

 
2,120

 Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity warrant assets
 
Other assets
 
203,103

 
122,504

 
—

 
122,504

 
197,878

 
116,604

 
—

 
116,604

Other derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Client foreign exchange forwards
 
Other assets
 
831,111

 
32,802

 
2,537

 
30,265

 
801,487

 
28,954

 
2,370

 
26,584

Client foreign exchange forwards
 
Other liabilities
 
716,529

 
(29,819
)
 
—

 
(29,819
)
 
774,355

 
(27,647
)
 
—

 
(27,647
)
Client foreign currency options
 
Other assets
 
41,917

 
765

 
—

 
765

 
34,926

 
227

 
—

 
227

Client foreign currency options
 
Other liabilities
 
41,917

 
(765
)
 
—

 
(765
)
 
34,926

 
(227
)
 
—

 
(227
)
Client interest rate derivatives
 
Other assets
 
370,799

 
2,087

 
—

 
2,087

 
387,410

 
2,546

 
—

 
2,546

Client interest rate derivatives
 
Other liabilities
 
370,799

 
(2,247
)
 
—

 
(2,247
)
 
387,410

 
(2,748
)
 
—

 
(2,748
)
Net exposure
 
 
 
 
 
2,823

 
2,537

 
286

 
 
 
1,105

 
2,370

 
(1,265
)
Net
 
 
 
 
 
$
129,130

 
$
2,537

 
$
126,593

 
 
 
$
126,879

 
$
7,781

 
$
119,098

 
 
(1)
Cash collateral received from our counterparties in relation to market value exposures of derivative contracts in our favor 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 June 30, 2015 remain at investment grade or higher and there were no material changes in their credit ratings during the three and six months ended June 30, 2015.
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 six months ended June 30, 2015 and 2014 is as follows:
 
 
 
 
Three months ended June 30,
 
Six months ended June 30,
(Dollars in thousands)
 
Statement of income location   
 
2015
 
2014
 
2015
 
2014
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 Interest rate risks:
 
 
 
 
 
 
 
 
 
 
Net cash benefit associated with interest rate swaps
 
Interest expense—borrowings
 
$
634

 
$
638

 
$
1,272

 
$
1,277

Changes in fair value of interest rate swaps
 
Net gains on derivative instruments
 
(11
)
 
(13
)
 
(14
)
 
(25
)
Net gains associated with interest rate risk derivatives
 
 
 
$
623

 
$
625

 
$
1,258

 
$
1,252

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 Currency exchange risks:
 
 
 
 
 
 
 
 
 
 
Gains (losses) on revaluations of foreign currency instruments
 
Other noninterest income
 
$
8,306

 
$
(685
)
 
$
(11,853
)
 
$
293

(Losses) gains on internal foreign exchange forward contracts, net
 
Net gains on derivative instruments
 
(8,174
)
 
538

 
11,844

 
(491
)
Net losses associated with currency risk
 
 
 
$
132

 
$
(147
)
 
$
(9
)
 
$
(198
)
 Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
Net gains on equity warrant assets
 
Net gains on derivative instruments
 
$
23,616

 
$
12,329

 
$
43,894

 
$
37,702

Gains on client foreign exchange forward contracts, net
 
Net gains on derivative instruments
 
$
787

 
$
170

 
$
280

 
$
472

Net losses on other derivatives (1)
 
Net gains on derivative instruments
 
$
99

 
$
(249
)
 
$
42

 
$
(716
)
 
 
(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 June 30, 2015 and December 31, 2014:
 
 
 
 
 
 
 
 
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
June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Assets:
 
 
 
 
 
 
 
 
 
 
 
 
   Interest rate swaps
 
$
3,828

 
$
—

 
$
3,828

 
$
(3,828
)
 
$
—

 
$
—

Foreign exchange forwards
 
33,221

 
—

 
33,221

 
(21,778
)
 
(2,537
)
 
8,906

   Foreign currency options
 
861

 
(96
)
 
765

 
(751
)
 
—

 
14

   Client interest rate derivatives
 
2,087

 
—

 
2,087

 
(2,087
)
 
—

 
—

Total derivative assets:
 
39,997

 
(96
)
 
39,901

 
(28,444
)
 
(2,537
)
 
8,920

Reverse repurchase, securities borrowing, and similar arrangements
 
338,612

 
—

 
338,612

 
(338,612
)
 
—

 
—

Total
 
$
378,609

 
$
(96
)
 
$
378,513

 
$
(367,056
)
 
$
(2,537
)
 
$
8,920

December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Assets:
 
 
 
 
 
 
 
 
 
 
 
 
   Interest rate swaps
 
$
4,609

 
$
—

 
$
4,609

 
$
(1,639
)
 
$
(2,970
)
 
$
—

Foreign exchange forwards
 
34,004

 
—

 
34,004

 
(17,843
)
 
(4,811
)
 
11,350

   Foreign currency options
 
501

 
(274
)
 
227

 
(144
)
 
—

 
83

   Client interest rate derivatives
 
2,546

 
—

 
2,546

 
(2,546
)
 
—

 
—

Total derivative assets:
 
41,660

 
(274
)
 
41,386

 
(22,172
)
 
(7,781
)
 
11,433

Reverse repurchase, securities borrowing, and similar arrangements
 
95,611

 
—

 
95,611

 
(95,611
)
 
—

 
—

Total
 
$
137,271

 
$
(274
)
 
$
136,997

 
$
(117,783
)
 
$
(7,781
)
 
$
11,433
Offsetting Liabilities
The following table summarizes our liabilities subject to enforceable master netting arrangements as of June 30, 2015 and December 31, 2014:
 
 
 
 
 
 
 
 
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
June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
   Foreign exchange forwards
 
$
30,263

 
$
—

 
$
30,263

 
$
(13,705
)
 
$
—

 
$
16,558

   Foreign currency options
 
861

 
(96
)
 
765

 
(14
)
 
—

 
751

   Client interest rate derivatives
 
2,247

 
—

 
2,247

 
(2,247
)
 
—

 
—

Total derivative liabilities:
 
33,371

 
(96
)
 
33,275

 
(15,966
)
 
—

 
17,309

Repurchase, securities lending, and similar arrangements
 
—

 
—

 
—

 
—

 
—

 
—

Total
 
$
33,371

 
$
(96
)
 
$
33,275

 
$
(15,966
)
 
$
—

 
$
17,309

December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
   Foreign exchange forwards
 
$
28,136

 
$
—

 
$
28,136

 
$
(16,808
)
 
$
—

 
$
11,328

   Foreign currency options
 
501

 
(274
)
 
227

 
(83
)
 
—

 
144

   Client interest rate derivatives
 
2,748

 
—

 
2,748

 
(2,748
)
 
—

 
—

Total derivative liabilities:
 
31,385

 
(274
)
 
31,111

 
(19,639
)
 
—

 
11,472

Repurchase, securities lending, and similar arrangements
 
—

 
—

 
—

 
—

 
—

 
—

Total
 
$
31,385

 
$
(274
)
 
$
31,111

 
$
(19,639
)
 
$
—

 
$
11,472