Derivatives (Tables)

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives Associated With Fixed Income Trading Activities

The following tables summarize FHN’s derivatives associated with fixed income trading activities as of March 31, 2020 and December 31, 2019:

	March 31, 2020
(Dollars in thousands)	Notional		Assets		Liabilities
Customer interest rate contracts	$	3,395,932	$	232,886	$	1,509
Offsetting upstream interest rate contracts	3,395,932		8,822		16,735
Forwards and futures purchased	8,641,017		156,687		8,508
Forwards and futures sold	9,435,099		8,829		163,096

	December 31, 2019
(Dollars in thousands)	Notional		Assets		Liabilities
Customer interest rate contracts	$	2,697,522	$	65,768	$	6,858
Offsetting upstream interest rate contracts	2,697,522		2,583		3,994
Option contracts purchased	40,000		131		—
Forwards and futures purchased	9,217,350		17,029		3,187
Forwards and futures sold	9,403,112		3,611		16,620

Derivatives Associated With Interest Rate Risk Management Activities

The following tables summarize FHN’s derivatives associated with interest rate risk management activities as of March 31, 2020 and December 31, 2019:

	March 31, 2020
(Dollars in thousands)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	3,433,278	$	282,434	$	503
Offsetting upstream interest rate contracts	3,433,278		5,750		23,066
Debt Hedging
Hedging Instruments:
Interest rate swaps	$	500,000	$	61	N/A
Hedged Items:
Term borrowings:
Par	N/A		N/A		$	500,000
Cumulative fair value hedging adjustments	N/A		N/A		2,862
Unamortized premium/(discount) and issuance costs	N/A		N/A		(519		)
Total carrying value	N/A		N/A		$	502,343

	December 31, 2019
(Dollars in thousands)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	3,044,067	$	90,394	$	3,515
Offsetting upstream interest rate contracts	3,044,067		3,537		9,735
Debt Hedging
Hedging Instruments:
Interest rate swaps	$	500,000	N/A		$	69
Hedged Items:
Term borrowings:
Par	N/A		N/A		$	500,000
Cumulative fair value hedging adjustments	N/A		N/A		(1,604		)
Unamortized premium/(discount) and issuance costs	N/A		N/A		(740		)
Total carrying value	N/A		N/A		$	497,656

Gains/(Losses) on Derivatives Associated with Interest Rate Risk Management Activities

The following table summarizes gains/(losses) on FHN’s derivatives associated with interest rate risk management activities for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
	2020			2019
(Dollars in thousands)	Gains/(Losses)			Gains/(Losses)
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts (a)	$	195,552		$	29,112
Offsetting upstream interest rate contracts (a)	(195,552		)	(29,112		)
Debt Hedging
Hedging Instruments:
Interest rate swaps (b)	$	4,934		$	4,279
Hedged Items:
Term borrowings (a) (c)	(4,465		)	(4,266		)

(a) Gains/losses included in All other expense within the Consolidated Condensed Statements of Income.

(b) Gains/losses included in the Interest expense.

(c)

Represents gains and losses attributable to changes in fair value due to interest rate risk as designated in ASC 815-20 hedging relationships.

Derivative Associated With Cash Flow Hedges

The following tables summarize FHN’s derivative activities associated with cash flow hedges as of March 31, 2020 and December 31, 2019:

	March 31, 2020
(Dollars in thousands)	Notional		Assets		Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate swaps	$	700,000	$	187	N/A
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)	N/A		$	700,000	N/A

	December 31, 2019
(Dollars in thousands)	Notional		Assets		Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate swaps	$	900,000	N/A		$	241
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)	N/A		$	900,000	N/A

Gains/(Losses) on Derivatives Associated with Cash Flow Hedges

The following table summarizes gains/(losses) on FHN’s derivatives associated with cash flow hedges for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
	2020			2019
(Dollars in thousands)	Gains/(Losses)			Gains/(Losses)
Cash Flow Hedges
Hedging Instruments:
Interest rate swaps (a)	$	17,374		$	7,218
Gain/(loss) recognized in Other comprehensive income/(loss)	13,155			3,936
Gain/(loss) reclassified from AOCI into Interest income	(94		)	1,451

(a)

Approximately $9.1 million of pre-tax gains are expected to be reclassified into earnings in the next twelve months.

Derivative Assets And Collateral Received

The following table provides details of derivative assets and collateral received as presented on the Consolidated Condensed Statements of Condition as of March 31, 2020 and December 31, 2019:

							Gross amounts not offset in  the Statements of Condition
(Dollars in thousands)	Gross amounts of recognized assets		Gross amounts offset in the Statements of Condition		Net amounts of assets presented in the Statements of Condition (a)		Derivative liabilities available for offset			Collateral received			Net amount
Derivative assets:
March 31, 2020
Interest rate derivative contracts	$	530,337	$	—	$	530,337	$	(1,974	)	$	(303,798	)	$	224,565
Forward contracts	165,516		—		165,516		(89,790		)	(54,018		)	21,708
	$	695,853	$	—	$	695,853	$	(91,764	)	$	(357,816	)	$	246,273
December 31, 2019
Interest rate derivative contracts	$	162,344	$	—	$	162,344	$	(5,604	)	$	(143,334	)	$	13,406
Forward contracts	20,640		—		20,640		(13,292		)	(2,000		)	5,348
	$	182,984	$	—	$	182,984	$	(18,896	)	$	(145,334	)	$	18,754

(a) Included in Derivative assets on the Consolidated Condensed Statements of Condition. As of March 31, 2020 and December 31, 2019, $.4 million and $.1 million, respectively, of derivative assets have been excluded from these tables because they are generally not subject to master netting or similar agreements.

The following table provides details of derivative liabilities and collateral pledged as presented on the Consolidated Condensed Statements of Condition as of March 31, 2020 and December 31, 2019:

							Gross amounts not offset in the Statements of Condition
(Dollars in thousands)	Gross amounts of recognized liabilities		Gross amounts offset in the Statements of Condition		Net amounts of liabilities presented in the Statements of Condition (a)		Derivative assets available for offset			Collateral pledged			Net amount
Derivative liabilities:
March 31, 2020
Interest rate derivative contracts	$	41,980	$	—	$	41,980	$	(1,974	)	$	(36,129	)	$	3,877
Forward contracts	171,604		—		171,604		(89,790		)	(81,814		)	—
	$	213,584	$	—	$	213,584	$	(91,764	)	$	(117,943	)	$	3,877
December 31, 2019
Interest rate derivative contracts	$	24,431	$	—	$	24,431	$	(5,604	)	$	(18,689	)	$	138
Forward contracts	19,807		—		19,807		(13,292		)	(6,515		)	—
	$	44,238	$	—	$	44,238	$	(18,896	)	$	(25,204	)	$	138

 

(a)

Included in Derivative liabilities on the Consolidated Condensed Statements of Condition. As of March 31, 2020 and December 31, 2019, $21.4 million and $23.2 million, respectively, of derivative liabilities (primarily Visa-related derivatives) have been excluded from these tables because they are generally not subject to master netting or similar agreements.

Derivative Liabilities and Collateral Pledged

The following table provides details of derivative liabilities and collateral pledged as presented on the Consolidated Condensed Statements of Condition as of March 31, 2020 and December 31, 2019:

							Gross amounts not offset in the Statements of Condition
(Dollars in thousands)	Gross amounts of recognized liabilities		Gross amounts offset in the Statements of Condition		Net amounts of liabilities presented in the Statements of Condition (a)		Derivative assets available for offset			Collateral pledged			Net amount
Derivative liabilities:
March 31, 2020
Interest rate derivative contracts	$	41,980	$	—	$	41,980	$	(1,974	)	$	(36,129	)	$	3,877
Forward contracts	171,604		—		171,604		(89,790		)	(81,814		)	—
	$	213,584	$	—	$	213,584	$	(91,764	)	$	(117,943	)	$	3,877
December 31, 2019
Interest rate derivative contracts	$	24,431	$	—	$	24,431	$	(5,604	)	$	(18,689	)	$	138
Forward contracts	19,807		—		19,807		(13,292		)	(6,515		)	—
	$	44,238	$	—	$	44,238	$	(18,896	)	$	(25,204	)	$	138

 

(a)

Included in Derivative liabilities on the Consolidated Condensed Statements of Condition. As of March 31, 2020 and December 31, 2019, $21.4 million and $23.2 million, respectively, of derivative liabilities (primarily Visa-related derivatives) have been excluded from these tables because they are generally not subject to master netting or similar agreements.