8. 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 sheet at March 31, 2013 and December 31, 2012:

Offsetting of Financial Assets and Derivative Assets

	Gross		Gross Amounts		Net Amounts of		Gross Amounts Not Offset in the Consolidated Balance Sheet
(In Thousands)	Amounts of Recognized Assets		Offset in the Consolidated Balance Sheet		Assets Presented in the Consolidated Balance Sheet		Financial Instruments			Cash Collateral Received		Net Amount
March 31, 2013
Derivative hedging instruments, at fair value	$	324	$	—	$	324	$	(324	)	$	—	$	—
Total	$	324	$	—	$	324	$	(324	)	$	—	$	—

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

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross		Gross Amounts		Net Amounts of		Gross Amounts Not Offset in the Consolidated Balance Sheet
(In Thousands)	Amounts of Recognized Liabilities		Offset in the Consolidated Balance Sheet		Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments (1)			Cash Collateral Pledged (1)			Net Amount

March 31, 2013
Derivative hedging instruments, at fair value (2)	$	50,839	$	—	$	50,839	$	(45,822	)	$	(5,017	)	$	—
Repurchase agreements (3)	8,902,827		—		8,902,827		(8,902,827		)	—			—
Total	$	8,953,666	$	—	$	8,953,666	$	(8,948,649	)	$	(5,017	)	$	—

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 $57.1 million and $68.9 million at March 31, 2013 and December 31, 2012, respectively.

(3) The fair value of securities pledged against the Company’s repurchase agreements was $10.908 billion and $10.550 billion at March 31, 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.