Investment Securities

12 Months Ended

Dec. 31, 2011

Investment Securities [Abstract]

Investment Securities

Note 3 q Investment Securities

The following tables summarize FHN's available for sale ("AFS") securities on December 31, 2011 and 2010:

(Dollars in thousands)	On December 31, 2011
	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities available for sale:
U.S. treasuries		$	40,030		$	91		$	-		$	40,121
Government agency issued mortgage-backed securities ("MBS")			1,334,174			76,054			-			1,410,228
Government agency issued collateralized mortgage obligations ("CMO")			1,325,011			32,932			-			1,357,943
Other U.S. government agencies			15,277			674			-			15,951
States and municipalities			18,070			-			-			18,070
Equity (a)			223,430			-			-			223,430
Other			511			18			-			529
Total securities available for sale (b)		$	2,956,503		$	109,769		$	-		$	3,066,272

(a)	Includes restricted investments in FHLB-Cincinnati stock of $125.5 million and FRB stock of $66.1 million. The remainder is money market, venture capital, and cost method investments.
(b)	Includes $2.7 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes. As of December 31, 2011, FHN had pledged $0.8 billion of the $2.7 billion pledged available for sale securities as collateral for securities sold under repurchase agreements.

(Dollars in thousands)	On December 31, 2010
	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses				Fair Value
Securities available for sale:
U.S. treasuries		$	87,188		$	256		$	-			$	87,444
Government agency issued MBS			1,430,923			46,916			(7,881	)			1,469,958
Government agency issued CMO			1,136,607			32,133			-				1,168,740
Other U.S. government agencies			50,426			2,800			-				53,226
States and municipalities			26,015			-			-				26,015
Equity (a)			226,012			-			(9	)			226,003
Other			511			33			-				544
Total securities available for sale (b)		$	2,957,682		$	82,138		$	(7,890	)		$	3,031,930

(a)	Includes restricted investments in FHLB-Cincinnati stock of $125.5 million and FRB stock of $66.2 million. The remainder is money market, venture capital, and cost method investments. Additionally, $5.4 million is restricted pursuant to a reinsurance contract agreement.
(b)	Includes $2.7 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes. As of December 31, 2010, FHN had pledged $1.5 billion of the $2.7 billion pledged available for sale securities as collateral for securities sold under repurchase agreements.

National banks chartered by the federal government are, by law, members of the Federal Reserve System. Each member bank is required to own stock in its regional Federal Reserve Bank ("FRB"). Given this requirement, FRB stock may not be sold, traded, or pledged as collateral for loans. Membership in the Federal Home Loan Bank ("FHLB") network requires ownership of capital stock. Member banks are entitled to borrow funds from the FHLB and are required to pledge mortgage loans as collateral. Investments in the FHLB are non-transferable and, generally, membership is maintained primarily to provide a source of liquidity as needed.

The amortized cost and fair value by contractual maturity for the available for sale securities portfolio on December 31, 2011 are provided below:

(Dollars in thousands)	Available for Sale
	Amortized Cost			Fair Value
Within 1 year		$	50,044		$	50,310
After 1 year; within 5 years			6,763			7,262
After 5 years; within 10 years			-			-
After 10 years			16,570			16,570
Subtotal			73,377			74,142
Government agency issued MBS and CMO			2,659,185			2,768,171
Equity and other securities			223,941			223,959
Total		$	2,956,503		$	3,066,272

Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The table below provides information on gross realized gains and gross realized losses from investment securities for the twelve months ended December 31:

(Dollars in thousands)	Available for Sale
	2011				2010				2009
Gross gains on sales of securities (a)		$	44,787			$	15,709			$	-
Gross (losses) on sales of securities			(8,623	)			(1	)			(60	)
Net gain/(loss) on sales of securities (b)		$	36,164			$	15,708			$	(60	)
Venture capital investments (c)			-				(4,598	)			(601	)
Net other than temporary impairment ("OTTI") recorded (d)			-				(188	)			(517	)
Total securities gain/(loss), net		$	36,164			$	10,922			$	(1,178	)

(a)	2011 and 2010 include $35.1 million and $14.8 million, respectively, related to the sales of Visa class B shares.
(b)	Proceeds from sales during the 2011, 2010, and 2009 were $495.1 million, $528.8 million, and $18.9 million, respectively.
(c)	Generally includes write-offs and/or unrealized fair value adjustments related to venture capital investments.
(d)	OTTI recorded in 2010 is related to equity securities and in 2009 is related to cost method investment securities.

There were no unrealized losses within the available for sale portfolio on December 31, 2011. The following table provides information on investments within the available for sale portfolio that had unrealized losses on December 31, 2010:

(Dollars in thousands)	On December 31, 2010
	Less than 12 months							12 months or longer						Total
	Fair Value			Unrealized Losses				Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
Government agency issued MBS		$	563,813		$	(7,881	)		$	-		$	-		$	563,813		$	(7,881	)
Total debt securities			563,813			(7,881	)			-			-			563,813			(7,881	)
Equity			34			(9	)			-			-			34			(9	)
Total temporarily impaired securities		$	563,847		$	(7,890	)		$	-		$	-		$	563,847		$	(7,890	)

FHN has reviewed investment securities that were in unrealized loss positions in 2010 in accordance with its accounting policy for OTTI and does not consider them other-than-temporarily impaired. For debt securities with unrealized losses, FHN does not intend to sell them and it is more-likely-than-not that FHN will not be required to sell them prior to recovery. The decline in value is primarily attributable to interest rates and not credit losses. For equity securities, FHN has both the ability and intent to hold these securities for the time necessary to recover the amortized cost.