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Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments
Derivative Financial Instruments
The Corporation manages its exposure to certain interest rate and foreign currency risks through the use of derivatives. None of the Corporation's outstanding derivative contracts are designated as hedges and none are entered into for speculative purposes. Derivative instruments are carried at fair value, with changes in fair values recognized in earnings as components of non-interest income and non-interest expense on the consolidated statements of income.
Derivative contracts create counterparty credit risk with both the Corporation's customers and with institutional derivative counterparties. The Corporation manages counterparty credit risk through its credit approval processes, monitoring procedures and obtaining adequate collateral, when the Corporation determines it is appropriate to do so and in accordance with counterparty contracts.
Mortgage Banking Derivatives
In connection with its mortgage banking activities, the Corporation enters into commitments to originate certain fixed rate residential mortgage loans for customers, also referred to as interest rate locks. In addition, the Corporation enters into forward commitments for the future sales or purchases of mortgage-backed securities to or from third-party counterparties to hedge the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. Forward sales commitments may also be in the form of commitments to sell individual mortgage loans at a fixed price at a future date. The amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. Gross derivative assets and liabilities are recorded within other assets and other liabilities, respectively, on the consolidated balance sheets, with changes in fair values during the period recorded within mortgage banking income on the consolidated statements of income.
Interest Rate Swaps
The Corporation enters into interest rate swaps with certain qualifying commercial loan customers to meet their interest rate risk management needs. The Corporation simultaneously enters into interest rate swaps with dealer counterparties, with identical notional amounts and terms. The net result of these interest rate swaps is that the customer pays a fixed rate of interest and the Corporation receives a floating rate. These interest rate swaps are derivative financial instruments that are recorded at their fair value within other assets and other liabilities on the consolidated balance sheets. Changes in fair value during the period are recorded within other non-interest expense on the consolidated statements of income.
Foreign Exchange Contracts
The Corporation enters into foreign exchange contracts to accommodate the needs of its customers. Foreign exchange contracts are commitments to buy or sell foreign currency on a future date at a contractual price. The Corporation offsets its foreign exchange contract exposure with customers by entering into contracts with third-party correspondent financial institutions to mitigate its exposure to fluctuations in foreign currency exchange rates. The Corporation also holds certain amounts of foreign currency with international correspondent banks. The Corporation's policy limits the total net foreign currency open positions, which includes all outstanding contracts and foreign account balances, to $500,000. Gross derivative assets and liabilities are recorded within other assets and other liabilities, respectively, on the consolidated balance sheets, with changes in fair values during the period recorded within other service charges and fees on the consolidated statements of income.
The following table presents a summary of the notional amounts and fair values of derivative financial instruments:
 
June 30, 2015
 
December 31, 2014
 
Notional
Amount
 
Asset
(Liability)
Fair Value
 
Notional
Amount
 
Asset
(Liability)
Fair Value
 
(in thousands)
Interest Rate Locks with Customers
 
 
 
 
 
 
 
Positive fair values
$
126,063

 
$
1,268

 
$
89,655

 
$
1,391

Negative fair values
2,240

 
(48
)
 
301

 
(6
)
Net interest rate locks with customers

 
1,220

 

 
1,385

Forward Commitments
 
 
 
 
 
 
 
Positive fair values
111,387

 
1,705

 
—

 
—

Negative fair values
27,107

 
(24
)
 
93,802

 
(1,164
)
Net forward commitments
 
 
1,681

 
 
 
(1,164
)
Interest Rate Swaps with Customers
 
 
 
 
 
 
 
Positive fair values
558,750

 
19,317

 
468,080

 
19,716

Negative fair values
46,937

 
(234
)
 
25,418

 
(198
)
Net interest rate swaps with customers
 
 
19,083

 
 
 
19,518

Interest Rate Swaps with Dealer Counterparties
 
 
 
 
 
 
 
Positive fair values
46,937

 
234

 
25,418

 
198

Negative fair values
558,750

 
(19,317
)
 
468,080

 
(19,716
)
Net interest rate swaps with dealer counterparties
 
 
(19,083
)
 
 
 
(19,518
)
Foreign Exchange Contracts with Customers
 
 
 
 
 
 
 
Positive fair values
8,200

 
572

 
11,616

 
810

Negative fair values
7,128

 
(384
)
 
5,250

 
(441
)
Net foreign exchange contracts with customers
 
 
188

 
 
 
369

Foreign Exchange Contracts with Correspondent Banks
 
 
 
 
 
 
 
Positive fair values
9,296

 
629

 
5,287

 
446

Negative fair values
9,824

 
(672
)
 
13,572

 
(876
)
Net foreign exchange contracts with correspondent banks
 
 
(43
)
 
 
 
(430
)
Net derivative fair value asset
 
 
$
3,046

 
 
 
$
160



The following table presents a summary of the fair value gains and losses on derivative financial instruments:
 
Three months ended June 30
 
Six months ended June 30
 
2015
 
2014
 
2015
 
2014
 
(in thousands)
Interest rate locks with customers
$
(1,287
)
 
$
1,203

 
$
(165
)
 
$
1,592

Forward commitments
2,291

 
(1,503
)
 
2,845

 
(3,001
)
Interest rate swaps with customers
(9,839
)
 
6,135

 
(435
)
 
10,340

Interest rate swaps with dealer counterparties
9,839

 
(6,135
)
 
435

 
(10,340
)
Foreign exchange contracts with customers
(748
)
 
105

 
(181
)
 
297

Foreign exchange contracts with correspondent banks
711

 
(98
)
 
387

 
(366
)
Net fair value gains (losses) on derivative financial instruments
$
967

 
$
(293
)
 
$
2,886

 
$
(1,478
)