Derivatives (Tables)

12 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of notional and fair values of derivatives

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




($ in thousands)	December 31, 2018
	Customer Counterparty						Financial Counterparty
	Notional Amount		Fair Value					Notional Amount		Fair Value
	Notional Amount		Assets		Liabilities		($ in thousands)	Notional Amount		Assets		Liabilities
Forwards and spot	$	2,023,425	$	11,719	$	13,079	Forwards and spot	$	506,342	$	3,407	$	2,285
Swaps	21,108		348		243		Swaps	687,845		5,764		3,336
Written options	537		16		—		Purchased options	537		—		16
Collars	83,864		—		370		Collars	83,864		370		—
Total	$	2,128,934	$	12,083	$	13,692	Total	$	1,278,588	$	9,541	$	5,637




($ in thousands)	December 31, 2017
	Customer Counterparty						Financial Counterparty
	Notional Amount		Fair Value				Notional Amount		Fair Value
	Notional Amount		Assets		Liabilities		Notional Amount		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 table presents the total notional amounts and gross fair values of the Company’s derivatives, as well as the balance sheet netting adjustments on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements and cash collateral received or paid as of December 31, 2018 and 2017. The resulting net derivative asset and liability fair values are included in Other assets and Accrued expenses and other liabilities, respectively, on the Consolidated Balance Sheet.




($ in thousands)	December 31, 2018									December 31, 2017
	Notional Amount			Fair Value						Notional Amount			Fair Value
	Notional Amount			Derivative Assets			Derivative Liabilities			Notional Amount			Derivative Assets			Derivative Liabilities
Derivatives designated as hedging instruments:
Fair value hedges:
Interest rate contracts	$	35,811		$	—		$	5,866		$	35,811		$	—		$	6,770
Net investment hedges:
Foreign exchange contracts	90,245			—			611			—			—			—
Total derivatives designated as hedging instruments	$	126,056		$	—		$	6,477		$	35,811		$	—		$	6,770

Derivatives not designated as hedging instruments:
Interest rate contracts	$	11,695,499		$	69,818		$	69,267		$	9,333,860		$	59,564		$	58,890
Foreign exchange contracts	3,407,522			21,624			19,329			770,215			5,840			10,170
Credit contracts	119,320			1			164			49,033			1			8
Equity contracts	—		⁽¹⁾	1,951			—			—		⁽¹⁾	1,672			—
Commodity contracts	—		⁽²⁾	14,422			23,068			—			—			—
Total derivatives not designated as hedging instruments	$	15,222,341		$	107,816		$	111,828		$	10,153,108		$	67,077		$	69,068
Gross derivative assets/liabilities				$	107,816		$	118,305					$	67,077		$	75,838
Less: Master netting agreements				(31,569		)	(31,569		)				(20,662		)	(20,662		)
Less: Cash collateral received/paid				(13,577		)	(6,833		)				(8,024		)	(10,680		)
Net derivative assets/liabilities				$	62,670		$	79,903					$	38,391		$	44,496


(1)	The Company held equity contracts in four public companies and 18 private companies as of December 31, 2018. In comparison, the Company held equity contracts in four public companies and 12 private companies as of December 31, 2017.

(2)

The notional amount of the Company’s commodity contracts entered with its customers totaled 2,507 thousand barrels of oil and 14,722 thousand units of natural gas, measured in million British thermal units (“MMBTUs”) as of December 31, 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 Company did not have any commodity contracts as of December 31, 2017.

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




($ in thousands)	December 31, 2018
	Customer Counterparty						($ in thousands)	Financial Counterparty
	Notional Amount		Fair Value					Notional Amount		Fair Value
	Notional Amount		Assets		Liabilities			Notional Amount		Assets		Liabilities
Written options	$	931,601	$	—	$	492	Purchased options	$	931,601	$	503	$	—
Sold collars and corridors	429,879		1,121		305		Collars and corridors	429,879		308		1,140
Swaps	4,482,881		41,457		41,545		Swaps	4,489,658		26,429		25,785
Total	$	5,844,361	$	42,578	$	42,342	Total	$	5,851,138	$	27,240	$	26,925




($ in thousands)	December 31, 2017
	Customer Counterparty						($ in thousands)	Financial Counterparty
	Notional Amount		Fair Value					Notional Amount		Fair Value
	Notional Amount		Assets		Liabilities			Notional Amount		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		33,417		24,636		Swaps	3,731,385		25,439		33,553
Total	$	4,663,385	$	33,621	$	25,126	Total	$	4,670,475	$	25,943	$	33,764

The following table presents the notional amounts and fair values of the commodity derivative positions outstanding as of December 31, 2018.




	December 31, 2018
($ and units in thousands)	Customer Counterparty						($ and units in thousands)	Financial Counterparty
	Notional		Fair Value					Notional		Fair Value
	Unit	Amount	Assets		Liabilities			Unit	Amount	Assets		Liabilities
Crude oil:							Crude oil:
Written options	Barrels	524	$	—	$	2,628	Purchased options	Barrels	524	$	2,251	$	—
Collars	Barrels	872	—		3,772		Collars	Barrels	872	3,225		—
Swaps	Barrels	1,111	—		14,278		Swaps	Barrels	1,111	5,799		—
Total		2,507	$	—	$	20,678	Total		2,507	$	11,275	$	—

Natural gas:							Natural gas:
Collars	MMBTUs	3,063	$	78	$	152	Collars	MMBTUs	3,063	$	151	$	64
Swaps	MMBTUs	11,659	1,049		1,857		Swaps	MMBTUs	11,659	1,869		317
Total		14,722	$	1,127	$	2,009	Total		14,722	$	2,020	$	381
Total			$	1,127	$	22,687	Total			$	13,295	$	381

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




($ in thousands)	December 31, 2018						December 31, 2017
	Notional Amount		Fair Value				Notional Amount		Fair Value
	Notional Amount		Assets		Liabilities		Notional Amount		Assets		Liabilities
RPAs - protection sold	$	108,606	$	—	$	164	$	35,208	$	—	$	8
RPAs - protection purchased	10,714		1		—		13,825		1		—
Total RPAs	$	119,320	$	1	$	164	$	49,033	$	1	$	8

Schedule of net gains (losses) recognized on the Consolidated Statements 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 years ended December 31, 2018, 2017 and 2016:




($ in thousands)	Year Ended December 31,
($ in thousands)	2018			2017			2016
(Losses) gains recorded in interest expense:
Recognized on interest rate swaps	$	(93	)	$	(2,734	)	$	(794	)
Recognized on certificates of deposit	$	278		$	2,271		$	157

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 December 31, 2018 and 2017:




($ in thousands)	Carrying Value ⁽¹⁾						Cumulative Fair Value Adjustment⁽²⁾
	December 31,						December 31,
	2018			2017			2018		2017
Certificates of deposit	$	(26,877	)	$	(31,058	)	$	4,141	$	4,745


(1)	Represents the full carrying amount of the hedged certificates of deposit.


(2)	For liabilities, (increase) decrease to carrying value.

Schedule of gains (losses) related to net investment hedges on a pre-tax basis in accumulated other comprehensive income (loss) and Consolidated Statements of Income

The following table presents the gains (losses) recorded on net investment hedges on a pre-tax basis for the years ended December 31, 2018, 2017 and 2016:




($ in thousands)	Year Ended December 31,
($ in thousands)	2018		2017			2016
Gains (losses) recognized in AOCI	$	6,072	$	(648	)	$	2,908
Gains (losses) recognized in Letters of credit fees and foreign exchange income ⁽¹⁾	$	—	$	(1,953	)	$	1,124


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

Schedule of net gains (losses) recognized on the Consolidated Statements 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 years ended December 31, 2018, 2017 and 2016:




($ in thousands)	Location in Consolidated Statement of Income	Year Ended December 31,
($ in thousands)	Location in Consolidated Statement of Income	2018			2017			2016
Derivatives not designated as hedging instruments:
Interest rate contracts	Derivative fees and other income	$	280		$	(1,772	)	$	2,557
Foreign exchange contracts	Letters of credit fees and foreign exchange income	16,784			22,076			12,632
Credit contracts	Derivative fees and other income	(156		)	(7		)	—
Equity contracts	Ancillary loan fees and other income	512			1,672			—
Commodity contracts	Derivative fees and other income	(11		)	—			—
Net gains		$	17,409		$	21,969		$	15,189

Schedule of gross derivative fair values, the balance sheet netting adjustments and net fair values on the Consolidated Balance Sheets, as well as the cash and non-cash collateral

The following tables present the gross derivative fair values, the balance sheet netting adjustments and the resulting net fair values recorded on the consolidated balance sheet, as well as the cash and non-cash collateral associated with master netting arrangements. 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 December 31, 2018
	Gross Amounts Recognized⁽¹⁾		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			Net Amount
	Gross Amounts Recognized⁽¹⁾		Master Netting Arrangements			Cash Collateral Received⁽³⁾			Net Amounts Presented on the Consolidated Balance Sheet		Security Collateral Received ⁽⁵⁾			Net Amount
Derivative assets	$	107,816	$	(31,569	)	$	(13,577	)	$	62,670	$	(13,975	)	$	48,695

	Gross Amounts Recognized⁽²⁾		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			Net Amount
	Gross Amounts Recognized⁽²⁾		Master Netting Arrangements			Cash Collateral Pledged⁽⁴⁾			Net Amounts Presented on the Consolidated Balance Sheet		Security Collateral Pledged ⁽⁵⁾			Net Amount
Derivative liabilities	$	118,305	$	(31,569	)	$	(6,833	)	$	79,903	$	(11,231	)	$	68,672




($ in thousands)	As of December 31, 2017
	Gross Amounts Recognized⁽¹⁾		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			Net Amount
	Gross Amounts Recognized⁽¹⁾		Master Netting Arrangements			Cash Collateral Received⁽³⁾			Net Amounts Presented on the Consolidated Balance Sheet		Security Collateral Received ⁽⁵⁾			Net Amount
Derivative assets	$	67,077	$	(20,662	)	$	(8,024	)	$	38,391	$	(1,153	)	$	37,238

	Gross Amounts Recognized⁽²⁾		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			Net Amount
	Gross Amounts Recognized⁽²⁾		Master Netting Arrangements			Cash Collateral Pledged⁽⁴⁾			Net Amounts Presented on the Consolidated Balance Sheet		Security Collateral Pledged ⁽⁵⁾			Net Amount
Derivative liabilities	$	75,838	$	(20,662	)	$	(10,680	)	$	44,496	$	(18,610	)	$	25,886

(1)

Gross amounts recognized for derivative assets include amounts with counterparties subject to enforceable master netting arrangements or similar agreements of $105.9 million and $64.8 million, respectively, as of December 31, 2018 and 2017, and amounts with counterparties not subject to enforceable master netting arrangements or similar agreements of $2.0 million and $2.3 million, respectively, as of December 31, 2018 and 2017.

(2)

Gross amounts recognized for derivative liabilities include amounts with counterparties subject to enforceable master netting arrangements or similar agreements of $118.2 million and $75.3 million, respectively, as of December 31, 2018 and 2017, and amounts with counterparties not subject to enforceable master netting arrangements or similar agreements of $102 thousand and $523 thousand, respectively, as of December 31, 2018 and 2017.


(3)	Gross cash collateral received under master netting arrangements or similar agreements were $15.8 million and $9.2 million, respectively, as of December 31, 2018 and 2017. Of the gross cash collateral received, $13.6 million and $8.0 million were used to offset against derivative assets, respectively, as of December 31, 2018 and 2017.


(4)	Gross cash collateral pledged under master netting arrangements or similar agreements were $8.4 million and $10.7 million, respectively, as of December 31, 2018 and 2017. Of the gross cash collateral pledged, $6.8 million and $10.7 million were used to offset against derivative liabilities, respectively, as of December 31, 2018 and 2017.


(5)	Represents the fair value of security collateral received and pledged limited to derivative assets and liabilities that are subject to enforceable master netting arrangements or similar agreements. U.S. GAAP does not permit the netting of non-cash collateral on the consolidated balance sheet but requires disclosure of such amounts.

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5624163-113959

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5580258-113959

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41620-113959

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5579245-113959

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41638-113959

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41678-113959

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41641-113959

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5624171-113959

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(n)(2))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5579240-113959

+ Details