Note 13. Balance Sheet Offsetting

Assets and liabilities relating to certain financial instruments, including derivatives, securities purchased under resale agreements (“reverse repurchase agreements”) and securities sold under repurchase agreements (“repurchase agreements”), may be eligible for offset in the consolidated balance sheet as permitted under accounting guidance. The Company is party to transactions involving derivative instruments that are subject to enforceable master netting arrangements or similar agreements. Under these agreements, the Company may have the right to net settle multiple contracts with the same counterparty. Certain derivative transactions may require the Company to receive or pledge marketable debt securities as collateral based on certain risk thresholds. The Company also enters into reverse repurchase agreements under which it has the right to claim securities collateral if the counterparty fails to perform. Securities that have been pledged by counterparties as collateral are not recorded in the Company’s consolidated balance sheet unless the counterparty defaults. Securities that have been pledged by the Company to counterparties continue to be reported in the Company’s consolidated balance sheet unless the Company defaults.

The Company also offers various derivative products to clients and enters into derivative transactions in due course. These derivative contracts are offset by paired trades with unrelated bank counterparties. Certain derivative transactions with clients are not subject to master netting arrangements and have been excluded from the balance sheet offsetting table below.

The following table provides information about financial instruments that are eligible for offset at June 30, 2013 and December 31, 2012:

								Gross Amounts
						Net Amount		Not Offset in the
	Gross		Gross			Presented		Balance Sheet
	Amount		Amount			in the		Securities			Cash			Net
(in thousands)	Recognized		Offset			Balance Sheet		Collateral			Collateral			Amount
June 30, 2013
Financial assets:
Derivatives not designated as hedging instruments	$	11,498	$	(8,158	)	$	3,340	$	—		$	—		$	3,340
Reverse repurchase agreements	200,000		—			200,000		(200,000		)	—			—
Total financial assets	$	211,498	$	(8,158	)	$	203,340	$	(200,000	)	$	—		$	3,340

Financial liabilities:
Derivatives not designated as hedging instruments	$	39,119	$	(8,158	)	$	30,961	$	(13,909	)	$	(1,010	)	$	16,042
Total financial liabilities	$	39,119	$	(8,158	)	$	30,961	$	(13,909	)	$	(1,010	)	$	16,042

December 31, 2012
Financial assets:
Derivatives designated as hedging instruments	$	2,249	$	(83	)	$	2,166	$	(1,034	)	$	—		$	1,132
Derivatives not designated as hedging instruments	1,920		(1,454		)	466		—			—			466
Total financial assets	$	4,169	$	(1,537	)	$	2,632	$	(1,034	)	$	—		$	1,598

Financial liabilities:
Derivatives designated as hedging instruments	$	83	$	(83	)	$	—	$	—		$	—		$	—
Derivatives not designated as hedging instruments	65,461		(1,453		)	64,008		(48,697		)	—			15,311
Total financial liabilities	$	65,544	$	(1,536	)	$	64,008	$	(48,697	)	$	—		$	15,311