Balance Sheet Offsetting

6 Months Ended

Jun. 30, 2013

Balance Sheet Offsetting

NOTE 14. Balance Sheet Offsetting

Assets and liabilities relating to certain financial instruments, including derivatives and securities sold under agreements to repurchase, may be eligible for offset in the consolidated balance sheet as permitted under accounting guidance. Susquehanna is party to transactions involving derivative instruments that are subject to master netting arrangements or similar agreements. Under these agreements, Susquehanna may have the right to net settle multiple contracts with the same counterparty. Certain derivative transactions may require Susquehanna to receive or pledge cash collateral based on the contract provisions.

Susquehanna also enters into agreements in which it sells securities subject to an obligation to repurchase the same or similar securities. Under these agreements, Susquehanna may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates Susquehanna to repurchase the assets. The obligation to repurchase the securities is reflected as a liability in Susquehanna's consolidated balance sheet, while the securities underlying the repurchase agreements remain in the respective investment securities account, therefore there is no offsetting or netting of the investment securities assets with the repurchase agreement liability.

Susquehanna also offers derivative products to qualifying customers and enters into offsetting derivative transactions in due course. Susquehanna manages a matched book with respect to its derivative instruments offered as part of this service to its customers in order to minimize its interest rate risk resulting from such transactions. These instruments are free-standing derivatives and are recorded at fair value on the consolidated balance sheet. Collateral is posted by the counterparty with net liability positions in accordance with the contract provisions.

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

Balance Sheet Netting Disclosure about Offsetting Assets and Liabilities
							Net Amounts
							Presented in
							the		Gross Amounts Not Offset in the
			Gross				Consolidated		Consolidated Balance Sheet
			Amounts		Gross Amounts		Balance		Financial		Cash
			Recognized		Offset		Sheet		Instruments		Collateral		Net Amount
June 30, 2013
Financial assets:
	Derivatives		$	27,612	$	(5)	$	27,607	$	0	$	(3,440)	$	24,167
Financial liabilities:
	Derivatives		$	58,146	$	0	$	58,146	$	0	$	(45,241)	$	12,905
	Repurchase agreements			296,625		0		296,625		(296,625)		0		0
		Total	$	354,771	$	0	$	354,771	$	(296,625)	$	(45,241)	$	12,905
December 31, 2012
Financial assets:
	Derivatives		$	25,922	$	(7)	$	25,915	$	0	$	0	$	25,915
Financial liabilities:
	Derivatives		$	72,126	$	0	$	72,126	$	0	$	(75,103)	$	(2,977)
	Repurchase agreements			302,577		0		302,577		(302,577)		0		0
		Total	$	374,703	$	0	$	374,703	$	(302,577)	$	(75,103)	$	(2,977)

		The table below presents the offsetting of derivative assets and derivative liabilities as of June 30, 2013 and December 31, 2012.
			Derivative Assets and Collateral								Derivative Liabilities and Collateral
			Held by Counterparty								Pledged by Counterparty
			Net Amounts		Gross Amounts						Net Amounts		Gross Amounts
			Presented in		Not Offset						Presented in		Not Offset
			the		in the Consolidated						the		in the Consolidated
			Consolidated		Balance Sheet						Consolidated		Balance Sheet
			Balance		Financial		Cash		Net		Balance		Financial		Cash		Net
June 30, 2013			Sheet		Instruments		Collateral		Amount		Sheet		Instruments		Collateral		Amount
Counterparty:
	Dealer A		$	1,823	$	0	$	0	$	1,823	$	5,028	$	0	$	(2,920)	$	2,108
	Dealer B			2,648		0		(510)		2,138		3,107		0		0		3,107
	Dealer C			332		0		0		332		1,375		0		(900)		475
	Dealer D			4,525		0		(2,930)		1,595		1,218		0		0		1,218
	Dealer E			0		0		0		0		25,144		0		(26,500)		(1,356)
	Dealer F			0		0		0		0		6,870		0		(8,200)		(1,330)
	Dealer G			0		0		0		0		5,091		0		(5,610)		(519)
	Dealer H			0		0		0		0		923		0		(860)		63
	End User			18,279		0		0		18,279		9,390		0		(251)		9,139
		Total	$	27,607	$	0	$	(3,440)	$	24,167	$	58,146	$	0	$	(45,241)	$	12,905
December 31, 2012
Counterparty:
	Dealer A		$	0	$	0	$	0	$	0	$	7,789	$	0	$	(7,820)	$	(31)
	Dealer B			873		0		0		873		6,104		0		(5,050)		1,054
	Dealer C			5		0		0		5		3,460		0		(3,300)		160
	Dealer D			0		0		0		0		3,239		0		(3,350)		(111)
	Dealer E			0		0		0		0		33,598		0		(35,800)		(2,202)
	Dealer F			0		0		0		0		9,105		0		(10,300)		(1,195)
	Dealer G			0		0		0		0		6,623		0		(7,150)		(527)
	Dealer H			0		0		0		0		1,816		0		(1,820)		(4)
	End User			25,037		0		0		25,037		392		0		(513)		(121)
		Total	$	25,915	$	0	$	0	$	25,915	$	72,126	$	0	$	(75,103)	$	(2,977)