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Balance Sheet Offsetting

6 Months Ended

Jun. 30, 2022

19. Balance Sheet Offsetting

Certain financial instruments, including resale and repurchase agreements, securities lending arrangements and derivatives, may be eligible for offset in the consolidated balance sheets and/or subject to master netting arrangements or similar agreements. The following tables present the assets and liabilities subject to enforceable master netting arrangements, repurchase agreements, or similar agreements with offsetting rights (in thousands).


							Gross Amounts Not Offset in
					Net Amounts		the Balance Sheet
	Gross Amounts		Gross Amounts		of Assets				Cash
	of Recognized		Offset in the		Presented in the		Financial		Collateral		Net
	Assets		Balance Sheet		Balance Sheet		Instruments		Pledged		Amount
June 30, 2022
Securities borrowed:
Institutional counterparties	$	1,013,025	$	—	$	1,013,025	$	(955,303)	$	—	$	57,722

Interest rate swaps:
Institutional counterparties		836		—		836		(820)		—		16

Credit default swaps:
Institutional counterparties		2		—		2		(2)		—		—

Reverse repurchase agreements:
Institutional counterparties		139,929		—		139,929		(138,023)		—		1,906

Forward MBS derivatives:
Institutional counterparties		2,877		—		2,877		(2,877)		—		—
	$	1,156,669	$	—	$	1,156,669	$	(1,097,025)	$	—	$	59,644
December 31, 2021
Securities borrowed:
Institutional counterparties	$	1,518,372	$	—	$	1,518,372	$	(1,445,590)	$	—	$	72,782

Reverse repurchase agreements:
Institutional counterparties		118,262		—		118,262		(118,262)		—		—

Forward MBS derivatives:
Institutional counterparties		2,955		(1,773)		1,182		(744)		—		438
	$	1,639,589	$	(1,773)	$	1,637,816	$	(1,564,596)	$	—	$	73,220


							Gross Amounts Not Offset in
					Net Amounts		the Balance Sheet
	Gross Amounts		Gross Amounts		of Liabilities				Cash
	of Recognized		Offset in the		Presented in the		Financial		Collateral		Net
	Liabilities		Balance Sheet		Balance Sheet		Instruments		Pledged		Amount
June 30, 2022
Securities loaned:
Institutional counterparties	$	851,192	$	—	$	851,192	$	(797,948)	$	—	$	53,244

Repurchase agreements:
Institutional counterparties		180,569		—		180,569		(193,282)		—		(12,713)

Forward MBS derivatives:
Institutional counterparties		11,451		(5,836)		5,615		(3,229)		—		2,386
	$	1,043,212	$	(5,836)	$	1,037,376	$	(994,459)	$	—	$	42,917
December 31, 2021
Securities loaned:
Institutional counterparties	$	1,432,196	$	—	$	1,432,196	$	(1,359,850)	$	—	$	72,346

Interest rate swaps:
Institutional counterparties		1,949		—		1,949		(1,919)		—		30

Credit default swaps:
Institutional counterparties		15		—		15		(15)		—		—

Repurchase agreements:
Institutional counterparties		191,483		—		191,483		(205,734)		—		(14,251)

Forward MBS derivatives:
Institutional counterparties		2,211		—		2,211		(2,211)		—		—
	$	1,627,854	$	—	$	1,627,854	$	(1,569,729)	$	—	$	58,125

Secured Borrowing Arrangements

Secured Borrowings (Repurchase Agreements) — The Company participates in transactions involving securities sold under repurchase agreements, which are secured borrowings and generally mature one to ninety days from the transaction date or involve arrangements with no definite termination date. Securities sold under repurchase agreements are reflected at the amount of cash received in connection with the transactions. The Company may be required to provide additional collateral based on the fair value of the underlying securities, which is monitored on a daily basis.

Securities Lending Activities — The Company’s securities lending activities include lending securities for other broker-dealers, lending institutions and its own clearing and retail operations. These activities involve lending securities to other broker-dealers to cover short sales, to complete transactions in which there has been a failure to deliver securities by the required settlement date and as a conduit for financing activities.

When lending securities, the Company receives cash or similar collateral and generally pays interest (based on the amount of cash deposited) to the other party to the transaction. Securities lending transactions are executed pursuant to written agreements with counterparties that generally require securities loaned to be marked-to-market on a daily basis. The Company receives collateral in the form of cash in an amount generally in excess of the fair value of securities loaned. The Company monitors the fair value of securities loaned on a daily basis, with additional collateral obtained or refunded, as necessary. Collateral adjustments are made on a daily basis through the facilities of various clearinghouses. The Company is a principal in these securities lending transactions and is liable for losses in the event of a failure of any other party to honor its contractual obligation. Management sets credit limits with each counterparty and reviews these limits regularly to monitor the risk level with each counterparty. The Company is subject to credit risk through its securities lending activities if securities prices decline rapidly because the value of the Company’s collateral could fall below the amount of the indebtedness it secures. In rapidly appreciating markets, credit risk increases due to short positions. The Company’s securities lending business subjects the Company to credit risk if a counterparty fails to perform or if collateral securing its obligations is insufficient. In securities transactions, the Company is subject to credit risk during the period between the execution of a trade and the settlement by the customer.

The following tables present the remaining contractual maturities of repurchase agreement and securities lending transactions accounted for as secured borrowings (in thousands). The Company had no repurchase-to-maturity transactions outstanding at both June 30, 2022 and December 31, 2021.


	Remaining Contractual Maturities
	Overnight and						Greater Than
June 30, 2022	Continuous		Up to 30 Days		30-90 Days		90 Days		Total
Repurchase agreement transactions:
Asset-backed securities		85,978		53,290		35,680		5,621		180,569

Securities lending transactions:
Corporate securities		113		—		—		—		113
Equity securities		851,079		—		—		—		851,079
Total	$	937,170	$	53,290	$	35,680	$	5,621	$	1,031,761

Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above									$	1,031,761
Amount related to agreements not included in offsetting disclosure above									$	—

	Remaining Contractual Maturities
	Overnight and						Greater Than
December 31, 2021	Continuous		Up to 30 Days		30-90 Days		90 Days		Total
Repurchase agreement transactions:
Asset-backed securities	$	93,651	$	—	$	86,357	$	11,475	$	191,483

Securities lending transactions:
Corporate securities		113		—		—		—		113
Equity securities		1,432,083		—		—		—		1,432,083
Total	$	1,525,847	$	—	$	86,357	$	11,475	$	1,623,679

Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above									$	1,623,679
Amount related to agreements not included in offsetting disclosure above									$	—