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Derivative Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2015
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 September 30, 2015 and December 31, 2014 were as follows:
 
 
 
 
September 30, 2015
 
December 31, 2014
(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

 
$
3,485

 
$
—

 
$
3,485

 
$
45,964

 
$
4,609

 
$
2,970

 
$
1,639

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Currency exchange risks:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards
 
Other assets
 
17,038

 
594

 
—

 
594

 
200,957

 
5,050

 
2,441

 
2,609

Foreign exchange forwards
 
Other liabilities
 
37,609

 
(1,075
)
 
—

 
(1,075
)
 
6,226

 
(489
)
 
—

 
(489
)
Net exposure
 
 
 
 
 
(481
)
 
—

 
(481
)
 
 
 
4,561

 
2,441

 
2,120

 Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity warrant assets
 
Other assets
 
208,270

 
130,091

 
—

 
130,091

 
197,878

 
116,604

 
—

 
116,604

Other derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Client foreign exchange forwards
 
Other assets
 
733,204

 
32,431

 
3,756

 
28,675

 
801,487

 
28,954

 
2,370

 
26,584

Client foreign exchange forwards
 
Other liabilities
 
695,403

 
(27,618
)
 
—

 
(27,618
)
 
774,355

 
(27,647
)
 
—

 
(27,647
)
Client foreign currency options
 
Other assets
 
28,390

 
246

 
—

 
246

 
34,926

 
227

 
—

 
227

Client foreign currency options
 
Other liabilities
 
28,390

 
(246
)
 
—

 
(246
)
 
34,926

 
(227
)
 
—

 
(227
)
Client interest rate derivatives
 
Other assets
 
459,614

 
5,164

 
—

 
5,164

 
387,410

 
2,546

 
—

 
2,546

Client interest rate derivatives
 
Other liabilities
 
459,614

 
(5,719
)
 
—

 
(5,719
)
 
387,410

 
(2,748
)
 
—

 
(2,748
)
Net exposure
 
 
 
 
 
4,258

 
3,756

 
502

 
 
 
1,105

 
2,370

 
(1,265
)
Net
 
 
 
 
 
$
137,353

 
$
3,756

 
$
133,597

 
 
 
$
126,879

 
$
7,781

 
$
119,098

 
 
(1)
Cash collateral received from our counterparties in relation to market value exposures of derivative contracts in our favor 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 September 30, 2015 remain at investment grade or higher and there were no material changes in their credit ratings during the three and nine months ended September 30, 2015.
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 nine months ended September 30, 2015 and 2014 is as follows:
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
(Dollars in thousands)
 
Statement of income location   
 
2015
 
2014
 
2015
 
2014
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 Interest rate risks:
 
 
 
 
 
 
 
 
 
 
Net cash benefit associated with interest rate swaps
 
Interest expense—borrowings
 
$
631

 
$
638

 
$
1,903

 
$
1,915

Changes in fair value of interest rate swaps
 
Net gains on derivative instruments
 
(8
)
 
(12
)
 
(22
)
 
(37
)
Net gains associated with interest rate risk derivatives
 
 
 
$
623

 
$
626

 
$
1,881

 
$
1,878

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 Currency exchange risks:
 
 
 
 
 
 
 
 
 
 
Gains (losses) on revaluations of foreign currency instruments
 
Other noninterest income
 
$
186

 
$
(12,640
)
 
$
(11,667
)
 
$
(12,347
)
(Losses) gains on internal foreign exchange forward contracts, net
 
Net gains on derivative instruments
 
(218
)
 
12,529

 
11,626

 
12,038

Net losses associated with currency risk
 
 
 
$
(32
)
 
$
(111
)
 
$
(41
)
 
$
(309
)
 Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
Net gains on equity warrant assets
 
Net gains on derivative instruments
 
$
10,685

 
$
13,157

 
$
54,579

 
$
50,859

Gains on client foreign exchange forward contracts, net
 
Net gains on derivative instruments
 
$
179

 
$
886

 
$
459

 
$
1,358

Net losses on other derivatives (1)
 
Net gains on derivative instruments
 
$
(394
)
 
$
(22
)
 
$
(352
)
 
$
(738
)
 
 
(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 September 30, 2015 and December 31, 2014:
 
 
 
 
 
 
 
 
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
September 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Assets:
 
 
 
 
 
 
 
 
 
 
 
 
   Interest rate swaps
 
$
3,485

 
$
—

 
$
3,485

 
$
(3,485
)
 
$
—

 
$
—

Foreign exchange forwards
 
33,025

 
—

 
33,025

 
(19,373
)
 
(3,756
)
 
9,896

   Foreign currency options
 
322

 
(76
)
 
246

 
(152
)
 
—

 
94

   Client interest rate derivatives
 
5,164

 
—

 
5,164

 
(5,164
)
 
—

 
—

Total derivative assets:
 
41,996

 
(76
)
 
41,920

 
(28,174
)
 
(3,756
)
 
9,990

Reverse repurchase, securities borrowing, and similar arrangements
 
214,484

 
—

 
214,484

 
(214,484
)
 
—

 
—

Total
 
$
256,480

 
$
(76
)
 
$
256,404

 
$
(242,658
)
 
$
(3,756
)
 
$
9,990

December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Assets:
 
 
 
 
 
 
 
 
 
 
 
 
   Interest rate swaps
 
$
4,609

 
$
—

 
$
4,609

 
$
(1,639
)
 
$
(2,970
)
 
$
—

Foreign exchange forwards
 
34,004

 
—

 
34,004

 
(17,843
)
 
(4,811
)
 
11,350

   Foreign currency options
 
501

 
(274
)
 
227

 
(144
)
 
—

 
83

   Client interest rate derivatives
 
2,546

 
—

 
2,546

 
(2,546
)
 
—

 
—

Total derivative assets:
 
41,660

 
(274
)
 
41,386

 
(22,172
)
 
(7,781
)
 
11,433

Reverse repurchase, securities borrowing, and similar arrangements
 
95,611

 
—

 
95,611

 
(95,611
)
 
—

 
—

Total
 
$
137,271

 
$
(274
)
 
$
136,997

 
$
(117,783
)
 
$
(7,781
)
 
$
11,433
Offsetting Liabilities
The following table summarizes our liabilities subject to enforceable master netting arrangements as of September 30, 2015 and December 31, 2014:
 
 
 
 
 
 
 
 
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
September 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
   Foreign exchange forwards
 
$
28,693

 
$
—

 
$
28,693

 
$
(10,329
)
 
$
—

 
$
18,364

   Foreign currency options
 
322

 
(76
)
 
246

 
(94
)
 
—

 
152

   Client interest rate derivatives
 
5,719

 
—

 
5,719

 
(5,719
)
 
—

 
—

Total derivative liabilities:
 
34,734

 
(76
)
 
34,658

 
(16,142
)
 
—

 
18,516

Repurchase, securities lending, and similar arrangements
 
—

 
—

 
—

 
—

 
—

 
—

Total
 
$
34,734

 
$
(76
)
 
$
34,658

 
$
(16,142
)
 
$
—

 
$
18,516

December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
   Foreign exchange forwards
 
$
28,136

 
$
—

 
$
28,136

 
$
(16,808
)
 
$
—

 
$
11,328

   Foreign currency options
 
501

 
(274
)
 
227

 
(83
)
 
—

 
144

   Client interest rate derivatives
 
2,748

 
—

 
2,748

 
(2,748
)
 
—

 
—

Total derivative liabilities:
 
31,385

 
(274
)
 
31,111

 
(19,639
)
 
—

 
11,472

Repurchase, securities lending, and similar arrangements
 
—

 
—

 
—

 
—

 
—

 
—

Total
 
$
31,385

 
$
(274
)
 
$
31,111

 
$
(19,639
)
 
$
—

 
$
11,472