Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

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 December 31, 2019 and 2018 were as follows:

	December 31, 2019						December 31, 2018
	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 designated as hedging instruments:
Interest rate risks:
Interest rate swaps	$	1,915,000	$	22,676	$	—	$	—	$	—	$	—
Interest rate swaps	3,085,000		—		25,623		—		—		—
Derivatives not designated as hedging instruments:
Currency exchange risks:
Foreign exchange forwards	—		—		—		263,733		4,767		—
Foreign exchange forwards	300,250		—		2,154		178,310		—		1,094
Other derivative instruments:
Equity warrant assets	225,893		165,473		—		223,532		149,238		—
Client foreign exchange forwards	4,661,517		114,546		—		2,759,878		93,876		—
Client foreign exchange forwards	4,326,059		—		94,745		2,568,085		—		85,706
Client foreign currency options	154,985		1,308		—		93,556		1,759		—
Client foreign currency options	154,985		—		1,308		93,579		—		1,759
Client interest rate derivatives (2)	1,275,190		28,811		—		1,020,416		8,499		—
Client interest rate derivatives (2)	1,372,914		—		14,154		1,337,328		—		9,491
Total Derivatives not designated as hedging instruments			310,138		112,361				258,139		98,050
Total derivatives			$	332,814	$	137,984			$	258,139	$	98,050

(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 reflects reductions of approximately $17.4 million of derivative liabilities and $0.4 million of derivative assets at December 31, 2019 and 2018, respectively, reflecting variation margin treated as settlement of the related derivative fair values for legal and accounting purposes as required by 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 2019, 2018 and 2017 is as follows:

		Year ended December 31,
(Dollars in thousands)	Statement of income location	2019			2018			2017
Derivatives designated as hedging instruments:
Interest rate risks:
Amounts reclassified from accumulated other comprehensive income into income	Interest income—loans	$	(5,358	)	$	—		$	—
Net cash benefit associated with interest rate swaps	Interest expense—borrowings	—			—			1,053
Changes in fair value of interest rate swaps	Other noninterest income	—			—			(7		)
Net (losses) gains associated with interest rate risk derivatives		$	(5,358	)	$	—		$	1,046
Derivatives not designated as hedging instruments:
Currency exchange risks:
Gains (losses) on revaluations of internal foreign currency instruments, net	Other noninterest income	$	1,444		$	(373	)	$	33,161
(Losses) gains on internal foreign exchange forward contracts, net	Other noninterest income	(1,853		)	52			(32,286		)
Net (losses) gains associated with internal currency risk		$	(409	)	$	(321	)	$	875
Other derivative instruments:
(Losses) gains on revaluations of client foreign currency instruments, net	Other noninterest income	$	(15,146	)	$	4,998		$	10,882
Gains (losses) on client foreign exchange forward contracts, net	Other noninterest income	15,900			(4,011		)	(9,969		)
Net gains associated with client currency risk		$	754		$	987		$	913
Net gains on equity warrant assets	Gains on equity warrant assets, net	$	138,078		$	89,142		$	54,555
Net losses on other derivatives	Other noninterest income	$	(1,190	)	$	(179	)	$	(564	)

Offsetting Assets

The following table summarizes our assets subject to enforceable master netting arrangements as of December 31, 2019 and 2018:

(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		Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements						Net Amount
							Financial Instruments			Cash Collateral Received (1)
December 31, 2019:
Derivative Assets:
Interest rate swaps	$	22,676	$	—	$	22,676	$	(22,598	)	$	—		$	78
Foreign exchange forwards	114,546		—		114,546		(36,855		)	(17,095		)	60,596
Foreign currency options	1,308		—		1,308		(848		)	(335		)	125
Client interest rate derivatives	28,811		—		28,811		(28,811		)	—			—
Total derivative assets:	167,341		—		167,341		(89,112		)	(17,430		)	60,799
Reverse repurchase, securities borrowing, and similar arrangements	289,340		—		289,340		(289,340		)	—			—
Total	$	456,681	$	—	$	456,681	$	(378,452	)	$	(17,430	)	$	60,799
December 31, 2018:
Derivative Assets:
Foreign exchange forwards	$	98,643	$	—	$	98,643	$	(38,213	)	$	(11,825	)	$	48,605
Foreign currency options	1,759		—		1,759		(613		)	(90		)	1,056
Client interest rate derivatives	8,499		—		8,499		(8,416		)	(83		)	—
Total derivative assets:	108,901		—		108,901		(47,242		)	(11,998		)	49,661
Reverse repurchase, securities borrowing, and similar arrangements	123,611		—		123,611		(123,611		)	—			—
Total	$	232,512	$	—	$	232,512	$	(170,853	)	$	(11,998	)	$	49,661

(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 December 31, 2019 and 2018:

(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		Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements						Net Amount
							Financial Instruments			Cash Collateral Pledged (1)
December 31, 2019:
Derivative Liabilities:
Interest rate swaps	$	25,623	$	—	$	25,623	$	(22,676	)	$	(2,947	)	$	—
Foreign exchange forwards	96,899		—		96,899		(33,314		)	(22,030		)	41,555
Foreign currency options	1,308		—		1,308		(531		)	—			777
Client interest rate derivatives	14,154		—		14,154		—			(13,936		)	218
Total derivative liabilities:	137,984		—		137,984		(56,521		)	(38,913		)	42,550
Repurchase, securities lending, and similar arrangements	—		—		—		—			—			—
Total	$	137,984	$	—	$	137,984	$	(56,521	)	$	(38,913	)	$	42,550
December 31, 2018:
Derivative Liabilities:
Foreign exchange forwards	$	86,800	$	—	$	86,800	$	(24,778	)	$	(20,732	)	$	41,290
Foreign currency options	1,759		—		1,759		(1,054		)	—			705
Client interest rate derivatives	9,491		—		9,491		—			(9,207		)	284
Total derivative liabilities:	98,050		—		98,050		(25,832		)	(29,939		)	42,279
Repurchase, securities lending, and similar arrangements	319,414		—		319,414		—			—			319,414
Total	$	417,464	$	—	$	417,464	$	(25,832	)	$	(29,939	)	$	361,693

(1)

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