Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Total Notional or Contractual Amounts, Fair Value, Collateral and Net Exposure of Derivative Financial Instruments

The total notional or contractual amounts, fair value, collateral and net exposure of our derivative financial instruments at June 30, 2013 and December 31, 2012 were as follows:

		June 30, 2013										December 31, 2012
(Dollars in thousands)	Balance Sheet Location	Notional or Contractual Amount		Fair Value			Collateral (1)		Net Exposure (2)			Notional or Contractual Amount		Fair Value			Collateral (1)		Net Exposure (2)
Derivatives designated as hedging instruments:
Interest rate risks:
Interest rate swaps	Other assets	$	45,964	$	7,224		$	5,400	$	1,824		$	45,964	$	9,005		$	6,110	$	2,895
Derivatives not designated as hedging instruments:
Currency exchange risks:
Foreign exchange forwards	Other assets	105,162		1,899			—		1,899			51,010		488			—		488
Foreign exchange forwards	Other liabilities	47,834		(40		)	—		(40		)	102,956		(1,728		)	—		(1,728		)
Net exposure				1,859			—		1,859					(1,240		)	—		(1,240		)
Other derivative instruments:
Equity warrant assets	Other assets	173,299		76,584			—		76,584			164,332		74,272			—		74,272
Other derivatives:
Client foreign exchange forwards	Other assets	449,340		14,281			—		14,281			385,470		11,864			—		11,864
Client foreign exchange forwards	Other liabilities	399,527		(11,043		)	—		(11,043		)	356,026		(9,930		)	—		(9,930		)
Client foreign currency options	Other assets	85,200		215			—		215			132,237		1,189			—		1,189
Client foreign currency options	Other liabilities	85,200		(215		)	—		(215		)	132,237		(1,189		)	—		(1,189		)
Loan conversion options	Other assets	9,430		1,595			—		1,595			9,782		890			—		890
Client interest rate derivatives	Other assets	151,022		136			—		136			144,950		558			—		558
Client interest rate derivatives	Other liabilities	151,022		(145		)	—		(145		)	144,950		(590		)	—		(590		)
Net exposure				4,824			—		4,824					2,792			—		2,792
Net				$	90,491		$	5,400	$	85,091				$	84,829		$	6,110	$	78,719

(1) Cash collateral received from our counterparty for our interest rate swap agreement is recorded as a component of “short-term borrowings” on our consolidated balance sheets.

(2) Net exposure for contracts in a gain position reflects the replacement cost in the event of nonperformance by all such counterparties. The credit ratings of our institutional counterparties as of June 30, 2013 remain at investment grade or higher and there were no material changes in their credit ratings during the three and six months ended June 30, 2013.

Summary of Derivative Activity and Related Impact on Consolidated Statements of Income

A summary of our derivative activity and the related impact on our consolidated statements of income for the three and six months ended June 30, 2013 and 2012 is as follows:

		Three months ended June 30,						Six months ended June 30,
(Dollars in thousands)	Statement of income location	2013			2012			2013			2012
Derivatives designated as hedging instruments:
Interest rate risks:
Net cash benefit associated with interest rate swaps	Interest expense—borrowings	$	633		$	1,696		$	1,267		$	3,925
Changes in fair value of interest rate swaps	Net gains on derivative instruments	(33		)	108			27			497
Net gains associated with interest rate risk derivatives		$	600		$	1,804		$	1,294		$	4,422
Derivatives not designated as hedging instruments:
Currency exchange risks:
Losses on revaluations of foreign currency instruments	Other noninterest income	$	(586	)	$	(3,367	)	$	(7,650	)	$	(1,482	)
Gains on internal foreign exchange forward contracts, net	Net gains on derivative instruments	712			2,993			6,912			942
Net gains (losses) associated with currency risk		$	126		$	(374	)	$	(738	)	$	(540	)
Other derivative instruments:
Gains on equity warrant assets	Net gains on derivative instruments	$	7,190		$	4,876		$	10,695		$	11,811
Gains on client foreign exchange forward contracts, net	Net gains on derivative instruments	$	1,013		$	1,330		$	1,810		$	2,395
Net gains (losses) on other derivatives (1)	Net gains on derivative instruments	$	94		$	(594	)	$	572		$	(956	)

(1) Primarily represents the change in fair value of loan conversion options.

Offsetting Assets

The following table summarizes our assets subject to enforceable master netting arrangements as of June 30, 2013 and December 31, 2012:

							Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
(Dollars in thousands)	Gross Amounts of Recognized Assets		Gross Amounts offset in the Statement of Financial Position		Net Amounts of Assets Presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Received			Net Amount
June 30, 2013
Derivative Assets:
Interest rate swaps	$	7,224	$	—	$	7,224	$	(1,824	)	$	(5,400	)	$	—
Foreign exchange forwards	16,180		—		16,180		(7,579		)	—			8,601
Foreign currency options	215		—		215		(107		)	—			108
Client interest rate derivatives	136		—		136		(47		)	—			89
Total derivative assets:	23,755		—		23,755		(9,557		)	(5,400		)	8,798
Reverse repurchase, securities borrowing, and similar arrangements	130,603		—		130,603		(130,603		)	—			—
Total	$	154,358	$	—	$	154,358	$	(140,160	)	$	(5,400	)	$	8,798
December 31, 2012
Derivative Assets:
Interest rate swaps	$	9,005	$	—	$	9,005	$	(2,895	)	$	(6,110	)	$	—
Foreign exchange forwards	12,352		—		12,352		(7,363		)	—			4,989
Foreign currency options	1,189		—		1,189		(218		)	—			971
Client interest rate derivatives	558		—		558		(24		)	—			534
Total derivative assets:	23,104		—		23,104		(10,500		)	(6,110		)	6,494
Reverse repurchase, securities borrowing, and similar arrangements	133,357		—		133,357		(133,357		)	—			—
Total	$	156,461	$	—	$	156,461	$	(143,857	)	$	(6,110	)	$	6,494

Offsetting Liabilities

The following table summarizes our liabilities subject to enforceable master netting arrangements as of June 30, 2013 and December 31, 2012:

							Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
(Dollars in thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts offset in the Statement of Financial Position		Net Amounts of Liabilities Presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Pledged		Net Amount
June 30, 2013
Derivative Liabilities:
Foreign exchange forwards	$	11,083	$	—	$	11,083	$	(7,134	)	$	—	$	3,949
Foreign currency options	215		—		215		(108		)	—		107
Client interest rate derivatives	145		—		145		(88		)	—		57
Total derivative liabilities:	11,443		—		11,443		(7,330		)	—		4,113
Repurchase, securities lending, and similar arrangements	—		—		—		—			—		—
Total	$	11,443	$	—	$	11,443	$	(7,330	)	$	—	$	4,113
December 31, 2012
Derivative Liabilities:
Foreign exchange forwards	$	11,658	$	—	$	11,658	$	(5,720	)	$	—	$	5,938
Foreign currency options	1,189		—		1,189		(971		)	—		218
Client interest rate derivatives	590		—		590		(567		)	—		23
Total derivative assets:	13,437		—		13,437		(7,258		)	—		6,179
Repurchase, securities lending, and similar arrangements	—		—		—		—			—		—
Total	$	13,437	$	—	$	13,437	$	(7,258	)	$	—	$	6,179