Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2018

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 and fair value of our derivative financial instruments at June 30, 2018 and December 31, 2017 were as follows:

	June 30, 2018						December 31, 2017
	Notional or Contractual Amount		Fair Value				Notional or Contractual Amount		Fair Value
(Dollars in thousands)			Derivative Assets (1)		Derivative Liabilities (1)				Derivative Assets (1)		Derivative Liabilities (1)
Derivatives not designated as hedging instruments:
Currency exchange risks:
Foreign exchange forwards	$	501,372	$	16,250	$	—	$	50,889	$	414	$	—
Foreign exchange forwards	243,969		—		9,636		425,055		—		5,201
Other derivative instruments:
Equity warrant assets	227,490		143,725		—		211,253		123,763		—
Client foreign exchange forwards	2,582,993		81,395		—		2,203,643		95,035		—
Client foreign exchange forwards	2,305,484		—		73,323		2,092,207		—		90,253
Client foreign currency options	107,907		1,713		—		102,678		1,187		—
Client foreign currency options	107,907		—		1,713		102,678		—		1,187
Client interest rate derivatives (2)	919,033		6,422		—		726,984		11,753		—
Client interest rate derivatives	1,274,209		—		12,532		782,586		—		11,940
Total Derivatives not designated as hedging instruments			$	249,505	$	97,204			$	232,152	$	108,581

(1) Derivative assets and liabilities are included in "accrued interest receivable and other assets" and "other liabilities", respectively, on our consolidated balance sheets.

(2) The amount reported for June 30, 2018 reflects rule changes implemented by two central clearing houses that allow entities to elect to treat derivative assets, liabilities and the related variation margin as settlement of the related derivative fair values for legal and accounting purposes, as opposed to presenting gross derivative assets and liabilities. As a result, client interest rate derivatives at June 30, 2018, reflect reductions of approximately $5.8 million of derivative assets that previously would have been reported on a gross basis and approximately $281.8 million in related notional amounts for these derivative assets cleared through central clearing houses.

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 endedJune 30, 2018 and 2017 is as follows:

		Three months ended June 30,						Six months ended June 30,
(Dollars in thousands)	Statement of income location	2018			2017			2018			2017
Derivatives designated as hedging instruments:
Interest rate risks:
Net cash benefit associated with interest rate swaps	Interest expense—borrowings	$	—		$	381		$	—		$	935
Changes in fair value of interest rate swaps	Other noninterest income	—			(6		)	—			(7		)
Net gains associated with interest rate risk derivatives		$	—		$	375		$	—		$	928
Derivatives not designated as hedging instruments:
Currency exchange risks:
(Losses) gains on revaluations of internal foreign currency instruments, net	Other noninterest income	$	(319	)	$	14,596		$	2,607		$	18,704
Gains (losses) on internal foreign exchange forward contracts, net	Other noninterest income	459			(14,554		)	(3,053		)	(17,799		)
Net gains (losses) associated with internal currency risk		$	140		$	42		$	(446	)	$	905
Other derivative instruments:
(Losses) gains on revaluations of client foreign currency instruments, net	Other noninterest income	$	(2,748	)	$	2,375		$	4,905		$	5,129
Gains (losses) on client foreign exchange forward contracts, net	Other noninterest income	2,844			(2,190		)	(4,270		)	(4,479		)
Net gains associated with client currency risk		$	96		$	185		$	635		$	650
Net gains on equity warrant assets	Gains on equity warrant assets, net	$	19,061		$	10,820		$	38,252		$	17,510
Net (losses) gains on other derivatives	Other noninterest income	$	(10	)	$	(210	)	$	421		$	(486	)

Offsetting Assets

The following table summarizes our assets subject to enforceable master netting arrangements as of June 30, 2018 and December 31, 2017:

	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		Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements						Net Amount
(Dollars in thousands)							Financial Instruments			Cash Collateral Received (1)
June 30, 2018
Derivative Assets:
Foreign exchange forwards	$	97,645	$	—	$	97,645	$	(32,627	)	$	(14,416	)	$	50,602
Foreign currency options	1,713		—		1,713		(973		)	—			740
Client interest rate derivatives	6,422		—		6,422		(3,592		)	(2,830		)	—
Total derivative assets	105,780		—		105,780		(37,192		)	(17,246		)	51,342
Reverse repurchase, securities borrowing, and similar arrangements	37,379		—		37,379		(37,379		)	—			—
Total	$	143,159	$	—	$	143,159	$	(74,571	)	$	(17,246	)	$	51,342
December 31, 2017
Derivative Assets:
Foreign exchange forwards	$	95,449	$	—	$	95,449	$	(14,570	)	$	(3,616	)	$	77,263
Foreign currency options	1,187		—		1,187		(557		)	—			630
Client interest rate derivatives	11,753		—		11,753		(11,627		)	(114		)	12
Total derivative assets	108,389		—		108,389		(26,754		)	(3,730		)	77,905
Reverse repurchase, securities borrowing, and similar arrangements	247,876		—		247,876		(247,876		)	—			—
Total	$	356,265	$	—	$	356,265	$	(274,630	)	$	(3,730	)	$	77,905

(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.

Offsetting Liabilities

The following table summarizes our liabilities subject to enforceable master netting arrangements as of June 30, 2018 and December 31, 2017:

	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		Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements						Net Amount
(Dollars in thousands)							Financial Instruments			Cash Collateral Pledged (1)
June 30, 2018
Derivative Liabilities:
Foreign exchange forwards	$	82,959	$	—	$	82,959	$	(14,638	)	$	(41,113	)	$	27,208
Foreign currency options	1,713		—		1,713		(772		)	—			941
Client interest rate derivatives	12,532		—		12,532		—			(12,448		)	84
Total derivative liabilities	97,204		—		97,204		(15,410		)	(53,561		)	28,233
Repurchase, securities lending, and similar arrangements	—		—		—		—			—			—
Total	$	97,204	$	—	$	97,204	$	(15,410	)	$	(53,561	)	$	28,233
December 31, 2017
Derivative Liabilities:
Foreign exchange forwards	$	95,454	$	—	$	95,454	$	(10,997	)	$	(69,110	)	$	15,347
Foreign currency options	1,187		—		1,187		(501		)	(130		)	556
Client interest rate derivatives	11,940		—		11,940		—			(11,924		)	16
Total derivative liabilities	108,581		—		108,581		(11,498		)	(81,164		)	15,919
Repurchase, securities lending, and similar arrangements	—		—		—		—			—			—
Total	$	108,581	$	—	$	108,581	$	(11,498	)	$	(81,164	)	$	15,919

(1) Cash collateral pledged to our counterparties in relation to market value exposures of derivative contracts in a liability position is recorded as a component of “cash and cash equivalents" on our consolidated balance sheets.