Investment Securities

3 Months Ended

Mar. 31, 2012

Investment Securities [Abstract]

Investment Securities

Note 3—Investment Securities

The following tables summarize FHN's available for sale ("AFS") securities on March 31, 2012 and 2011:

	On March 31, 2012
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available for sale:
U.S. treasuries	$	40,011	$	26	$	—		$	40,037
Government agency issued mortgage-backed securities ("MBS")		1,352,827		74,936		(734	)		1,427,029
Government agency issued collateralized mortgage obligations ("CMO")		1,537,732		35,104		—			1,572,836
Other U.S. government agencies		14,121		426		—			14,547
States and municipalities		18,070		—		—			18,070
Equity (a)		223,551		6		—			223,557
Other		510		17		—			527
Total securities available for sale (b)	$	3,186,822	$	110,515	$	(734	)	$	3,296,603

(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 $2.8 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes. Of this amount, $.4 billion was pledged as collateral for securities sold under repurchase agreements.

	On March 31, 2011
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available for sale:
U.S. treasuries	$	60,126	$	196	$	—		$	60,322
Government agency issued MBS		1,500,461		45,114		(3,346	)		1,542,229
Government agency issued CMO		1,187,262		22,360		(870	)		1,208,752
Other U.S. government agencies		20,218		907		—			21,125
States and municipalities		26,015		—		—			26,015
Equity (a)		226,502		—		(10	)		226,492
Other		511		32		—			543
Total securities available for sale (b)	$	3,021,095	$	68,609	$	(4,226	)	$	3,085,478

(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.

(b) Includes $2.8 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes. Of this amount, $.9 bilion was pledged 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 March 31, 2012 are provided below:

	Available for Sale
(Dollars in thousands)	Amortized Cost		Fair Value
Within 1 year	$	49,366	$	49,489
After 1 year; within 5 years		6,265		6,594
After 5 years; within 10 years		—		—
After 10 years		16,570		16,570
Subtotal		72,201		72,653
Government agency issued MBS and CMO		2,890,560		2,999,866
Equity and other securities		224,061		224,084
Total	$	3,186,822	$	3,296,603

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 three months ended March 31:

(Dollars in thousands)	2012		2011
Gross gains on sales of securities	$	328	$	9,421
Gross (losses) on sales of securities		—		(8,623	)
Net gain/(loss) on sales of securities (a)	$	328	$	798
Venture capital investments (b)		—		—
Net other than temporary impairment ("OTTI") recorded		—		—
Total securities gain/(loss), net	$	328	$	798

(a) Proceeds from sales for the three months ended March 31, 2012, and 2011 were $39.1 million, and $458.3 million, respectively.

(b) Generally includes write-offs and/or unrealized fair value adjustments related to venture capital investments.

The following table provides information on investments within the available for sale portfolio that had unrealized losses on March 31, 2012 and 2011:

	On March 31, 2012
	Less than 12 months					12 months or longer				Total
(Dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government agency issued MBS	$	101,397	$	(734	)		—		—	$	101,397	$	(734	)
Total temporarily impaired securities	$	101,397	$	(734	)	$	—	$	—	$	101,397	$	(734	)

	On March 31, 2011
	Less than 12 months					12 months or longer				Total
(Dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government agency issued MBS	$	572,326	$	(3,346	)	$	—	$	—	$	572,326	$	(3,346	)
Government agency issued CMO		153,271		(870	)		—		—		153,271		(870	)
Equity		33		(10	)		—		—		33		(10	)
Total temporarily impaired securities	$	725,630	$	(4,226	)	$	—	$	—	$	725,630	$	(4,226	)

 FHN has reviewed investment securities that were in unrealized loss positions 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.