Derivatives (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of notional and gross fair values of derivatives

The following table presents the total notional amounts and gross fair values of the Company’s derivatives as of September 30, 2018 and December 31, 2017. The derivative asset and liability fair values are presented on a gross basis, prior to the application of master netting arrangements, and are included in Other assets and Accrued expenses and other liabilities, respectively, on the Consolidated Balance Sheet.

($ in thousands)	September 30, 2018							December 31, 2017
	Notional Amount			Fair Value				Notional Amount			Fair Value
				Derivative Assets		Derivative  Liabilities					Derivative Assets		Derivative  Liabilities
Derivatives designated as hedging instruments:
Fair value hedges:
Interest rate contracts	$	31,026		$	—	$	7,696	$	35,811		$	—	$	6,799
Net investment hedges:
Foreign exchange contracts	89,621			61		—		—			—		—
Total derivatives designated as hedging instruments	$	120,647		$	61	$	7,696	$	35,811		$	—	$	6,799
Derivatives not designated as hedging instruments:
Interest rate contracts	$	11,729,334		$	72,618	$	106,962	$	9,333,860		$	58,633	$	57,958
Foreign exchange contracts	1,405,339			11,034		11,075		770,215			5,840		10,170
Credit contracts	120,058			1		57		49,033			1		8
Equity contracts	—		(1)	2,409		—		—		(1)	1,672		—
Commodity contracts	—		(2)	12,980		7,912		—			—		—
Total derivatives not designated as hedging instruments	$	13,254,731		$	99,042	$	126,006	$	10,153,108		$	66,146	$	68,136

(1) The Company held equity contracts in four public companies and 17 private companies as of September 30, 2018. In comparison, the Company held equity contracts in four public companies and 11 private companies as of December 31, 2017.

(2) The notional amount of the Company’s commodity contracts entered with its customers totaled 2,667 thousand barrels of oil and 9,860 thousand units of natural gas, measured in million British thermal units (“MMBTUs”) as of September 30, 2018. The Company entered into the same notional amounts of commodity contracts with mirrored terms with third-party financial institutions to mitigate its exposure.

The following table presents the notional amounts and fair values of the commodity derivative positions outstanding as of September 30, 2018. The Company did not have any commodity contracts in 2017.

($ and units in thousands)	September 30, 2018
	Customer Counterparties						($ and units in thousands)	Financial Counterparties
	Notional		Fair Value					Notional		Fair Value
	Unit	Amount	Assets		Liabilities			Unit	Amount	Assets		Liabilities
Crude oil:							Crude oil:
Written options	Barrels	725	$	842	$	128	Purchased options	Barrels	725	$	—	$	767
Collars	Barrels	802	3,363		—		Collars	Barrels	802	—		3,067
Swaps	Barrels	1,140	8,128		—		Swaps	Barrels	1,140	—		3,716
Total		2,667	$	12,333	$	128	Total		2,667	$	—	$	7,550
Natural gas:							Natural gas:
Collars	MMBTUs	1,360	$	65	$	—	Collars	MMBTUs	1,360	$	—	$	10
Swaps	MMBTUs	8,500	517		4		Swaps	MMBTUs	8,500	65		220
Total		9,860	$	582	$	4	Total		9,860	$	65	$	230
Total			$	12,915	$	132	Total			$	65	$	7,780

Schedule of net (losses) gains recognized on the Consolidated Statement of Income related to derivatives designated as fair value hedge

The following table presents the net (losses) gains recognized on the Consolidated Statement of Income related to the derivatives designated as fair value hedges for the three and nine months ended September 30, 2018 and 2017:

($ in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
(Losses) gains recorded in interest expense:
Recognized on interest rate swaps	$	(241	)	$	37		$	(2,089	)	$	(1,486	)
Recognized on certificates of deposit	$	520		$	(116	)	$	2,239		$	1,236

Schedule of the carrying amount and associated cumulative basis adjustment related to the application of fair value hedge accounting that is included in the carrying amount of the hedged certificates of deposit

The following table presents the carrying amount and associated cumulative basis adjustment related to the application of fair value hedge accounting that is included in the carrying amount of the hedged certificates of deposit as of September 30, 2018:

($ in thousands)	September 30, 2018
	Hedged Items Currently Designated
	Carrying Amount of the Hedged Assets (Liabilities) (1)			Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)
Certificates of deposit	$	(24,953	)	$	6,065

(1) Represents the full carrying amount of the hedged certificates of deposit as of September 30, 2018.

Schedule of gains (losses) recorded on net investment hedges on a pre-tax basis

The following table presents the gains (losses) recorded on net investment hedges on a pre-tax basis for the three and nine months ended September 30, 2018 and 2017:

($ in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Gains (losses) recognized in AOCI	$	2,960	$	—	$	6,745	$	(648	)
Gains (losses) recognized in Letters of credit fees and foreign exchange income (1)	$	—	$	—	$	—	$	(1,953	)

(1) Represents the gains (losses) recorded in the Consolidated Statement of Income related to the ineffective portion of net investment hedges prior to the adoption of ASU 2017-12, effective as of January 1, 2018. After the adoption, the fair value gains (losses) are recorded in the Foreign Currency Translation Adjustments within AOCI.

Schedule of notional amounts and gross fair values of outstanding derivative positions

The following table presents the notional amounts and the gross fair values of RPAs sold and purchased outstanding as of September 30, 2018 and December 31, 2017, respectively:

($ in thousands)	September 30, 2018						December 31, 2017
	Notional Amount		Fair Value				Notional Amount		Fair Value
			Assets		Liabilities				Assets		Liabilities
RPAs - protection sold	$	109,344	$	—	$	57	$	35,208	$	—	$	8
RPAs - protection purchased	10,714		1		—		13,825		1		—
Total RPAs	$	120,058	$	1	$	57	$	49,033	$	1	$	8

The following tables present the notional amounts and the gross fair values of foreign exchange derivative contracts outstanding as of September 30, 2018 and December 31, 2017, respectively:

($ in thousands)	September 30, 2018
	Customer Counterparty						Financial Counterparty
	Notional Amount		Fair Value				Notional Amount		Fair Value
			Assets		Liabilities				Assets		Liabilities
Forwards and spot	$	648,305	$	6,780	$	4,815	$	115,547	$	127	$	213
Swaps	15,683		—		90		624,644		4,125		5,955
Collars	580		2		—		580		—		2
Total	$	664,568	$	6,782	$	4,905	$	740,771	$	4,252	$	6,170

($ in thousands)	December 31, 2017
	Customer Counterparty						Financial Counterparty
	Notional Amount		Fair Value				Notional Amount		Fair Value
			Assets		Liabilities				Assets		Liabilities
Forwards and spot	$	163,389	$	2,189	$	752	$	155,872	$	662	$	7,800
Swaps	4,318		—		98		446,636		2,989		1,520
Total	$	167,707	$	2,189	$	850	$	602,508	$	3,651	$	9,320

The following tables present the notional amounts and the gross fair values of interest rate derivative contracts outstanding as of September 30, 2018 and December 31, 2017, respectively:

($ in thousands)	September 30, 2018
	Customer Counterparties						($ in thousands)	Financial Counterparties
	Notional Amount		Fair Value					Notional Amount		Fair Value
			Assets		Liabilities					Assets		Liabilities
Written options	$	907,651	$	—	$	782	Purchased options	$	907,651	$	795	$	—
Sold collars and corridors	379,257		169		1,343		Collars and corridors	379,257		1,354		172
Swaps	4,574,216		8,520		97,897		Swaps	4,581,302		61,780		6,768
Total	$	5,861,124	$	8,689	$	100,022	Total	$	5,868,210	$	63,929	$	6,940

($ in thousands)	December 31, 2017
	Customer Counterparties						($ in thousands)	Financial Counterparties
	Notional Amount		Fair Value					Notional Amount		Fair Value
			Assets		Liabilities					Assets		Liabilities
Written options	$	691,548	$	—	$	223	Purchased options	$	691,548	$	233	$	—
Sold collars and corridors	247,542		204		267		Collars and corridors	247,542		271		211
Swaps	3,724,295		32,241		24,879		Swaps	3,731,385		25,684		32,378
Total	$	4,663,385	$	32,445	$	25,369	Total	$	4,670,475	$	26,188	$	32,589

Schedule of the net gains (losses) recognized on the Company’s Consolidated Statement of Income related to derivatives not designated as hedging instruments

The following table presents the net gains (losses) recognized on the Company’s Consolidated Statement of Income related to derivatives not designated as hedging instruments for the three and nine months ended September 30, 2018 and 2017:

($ in thousands)	Location in Consolidated Statement of Income	Three Months Ended September 30,						Nine Months Ended September 30,
		2018			2017			2018			2017
Derivatives not designated as hedging instruments:
Interest rate contracts	Derivative fees and other income	$	653		$	(94	)	$	1,847		$	(1,838	)
Foreign exchange contracts	Letters of credit fees and foreign exchange income	4,612			3,720			11,115			17,936
Credit contracts	Derivative fees and other income	20			—			(49		)	1
Equity contracts	Ancillary loan fees and other income	531			669			970			1,455
Commodity contracts	Derivative fees and other income	(45		)	—			(5		)	—
Net gains		$	5,771		$	4,295		$	13,878		$	17,554

Schedule of gross derivatives on the Consolidated Balance Sheets and the respective collateral received or pledged in the form of other financial instruments

The following tables present gross derivatives on the Consolidated Balance Sheet and the respective collateral received or pledged in the form of other financial instruments, which are generally marketable securities and/or cash. The collateral amounts in these tables are limited to the outstanding balances of the related asset or liability (after netting is applied); thus instances of overcollateralization are not shown. In addition, the following tables reflect rule changes adopted by clearing organizations that require or allow entities to elect to treat derivative assets, liabilities and the related variation margin as settlement of the related derivative fair values for legal and accounting purposes, as opposed to presenting gross derivative assets and liabilities that are subject to collateral, whereby the counterparties would record a related collateral payable or receivable.

($ in thousands)	As of September 30, 2018
	Total		Contracts Not Subject to Master Netting Arrangements		Contracts Subject to Master Netting Arrangements
	Gross Amounts Recognized		Gross Amounts Recognized		Gross Amounts Recognized		Gross Amounts Offset on the Consolidated Balance Sheet		Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet
											Derivative Amount				Collateral Received				Net Amount
Derivative Assets	$	99,103	$	2,751	$	96,352	$	—	$	96,352	$	(19,470	)	(1)	$	(52,262	)	(2)	$	24,620
	Gross Amounts Recognized		Gross Amounts Recognized		Gross Amounts Recognized		Gross Amounts Offset on the Consolidated Balance Sheet		Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet
											Derivative Amount				Collateral  Pledged				Net Amount
Derivative Liabilities	$	133,702	$	88	$	133,614	$	—	$	133,614	$	(19,470	)	(1)	$	(10,931	)	(3)	$	103,213

($ in thousands)	As of December 31, 2017
	Total		Contracts Not Subject to Master Netting Arrangements		Contracts Subject to Master Netting Arrangements
	Gross Amounts Recognized		Gross Amounts Recognized		Gross Amounts Recognized		Gross Amounts Offset on the Consolidated Balance Sheet		Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet
											Derivative Amounts				Collateral Received				Net Amount
Derivative Assets	$	66,146	$	2,322	$	63,824	$	—	$	63,824	$	(20,242	)	(1)	$	(9,839	)	(2)	$	33,743
	Gross Amounts Recognized		Gross Amounts Recognized		Gross Amounts Recognized		Gross Amounts Offset on the Consolidated Balance Sheet		Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet
											Derivative Amounts				Collateral  Pledged				Net Amount
Derivative Liabilities	$	74,935	$	523	$	74,412	$	—	$	74,412	$	(20,242	)	(1)	$	(28,796	)	(3)	$	25,374

(1) Represents the netting of derivative receivable and payable balances for the same counterparty under enforceable master netting arrangements if the Company has elected to net.

(2) Represents cash and securities received against derivative assets with the same counterparty that are subject to enforceable master netting arrangements, including $10.9 million and $8.6 million of cash collateral received as of September 30, 2018 and December 31, 2017, respectively.

(3) Represents cash and securities pledged against derivative liabilities with the same counterparty that are subject to enforceable master netting arrangements, including $3.4 million and $10.7 million of cash collateral pledged as of September 30, 2018 and December 31, 2017, respectively.