Investment Securities

3 Months Ended

Mar. 31, 2014

Investment Securities [Abstract]

Investment Securities

Note 3 – Investment Securities

The following tables summarize FHN’s investment securities on March 31, 2014 and 2013:
	March 31, 2014
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
Securities available-for-sale ("AFS"):
U.S. treasuries	$	39,989	$	1	$	-	$	39,990
Government agency issued mortgage-backed securities ("MBS")		762,069		34,332		(3,839)		792,562
Government agency issued collateralized mortgage obligations ("CMO")		2,565,310		13,996		(47,536)		2,531,770
Other U.S. government agencies		2,078		104		-		2,182
States and municipalities		15,155		-		-		15,155
Equity and other (a)		189,543		-		(23)		189,520
Total securities available-for-sale (b)	$	3,574,144	$	48,433	$	(51,398)	$	3,571,179
Securities held-to-maturity ("HTM"):
States and municipalities	$	4,274	$	1,180	$	-	$	5,454
Total securities held-to-maturity	$	4,274	$	1,180	$	-	$	5,454

• Includes restricted investments in FHLB-Cincinnati stock of $87.9million and FRB stock of $66.0million. The remainder is money market, venture capital, and cost method investments.
• Includes $3.3billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.

	March 31, 2013
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
U.S. treasuries	$	39,992	$	2	$	-	$	39,994
Government agency issued MBS		1,009,283		56,649		(381)		1,065,551
Government agency issued CMO		1,826,314		24,049		(1,010)		1,849,353
Other U.S. government agencies		3,068		208		-		3,276
States and municipalities		15,255		-		-		15,255
Equity and other (a)		216,780		10		-		216,790
Total securities available-for-sale (b)	$	3,110,692	$	80,918	$	(1,391)	$	3,190,219

• Includes restricted investments in FHLB-Cincinnati stock of $125.5 million and FRB stock of $66.0million. The remainder is money market, venture capital, and cost method investments.
• Includes $2.9 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.

The amortized cost and fair value by contractual maturity for the available-for-sale and held-to-maturity securities portfolios on March 31, 2014, are provided below:
		Held-to-Maturity				Available-for-Sale
		Amortized		Fair		Amortized		Fair
(Dollars in thousands)		Cost		Value		Cost		Value
Within 1 year		$	-	$	-	$	39,989	$	39,990
After 1 year; within 5 years			-		-		3,578		3,682
After 5 years; within 10 years			-		-		-		-
After 10 years			4,274		5,454		13,655		13,655
	Subtotal		4,274		5,454		57,222		57,327
Government agency issued MBS and CMO			-		-		3,327,379		3,324,332
Equity and other			-		-		189,543		189,520
Total		$	4,274	$	5,454	$	3,574,144	$	3,571,179

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 gains and gross losses from investment securities for the three months ended March 31:
	Available-for-sale
(Dollars in thousands)	2014		2013
Gross gains on sales of securities	$	5,657	$	30
Gross (losses) on sales of securities		-		(6)
Net gain/(loss) on sales of securities (a)	$	5,657	$	24

• Proceedsfrom sales for the three months ended March 31, 2014 were $5.7 million, inclusive of $1.4 million of equity securities. Proceeds for the three months ended March 31, 2013 were not material.

The following tables provide information on investments within the available-for-sale portfolio that had unrealized losses on March 31, 2014 and 2013:
	On March 31, 2014
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
Government agency issued CMO	$	1,637,064	$	(43,221)	$	77,904	$	(4,315)	$	1,714,968	$	(47,536)
Government agency issued MBS		144,901		(3,839)		-		-		144,901		(3,839)
Total debt securities		1,781,965		(47,060)		77,904		(4,315)		1,859,869		(51,375)
Equity		43		(23)		-		-		43		(23)
Total temporarily impaired securities	$	1,782,008	$	(47,083)	$	77,904	$	(4,315)	$	1,859,912	$	(51,398)

	On March 31, 2013
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
Government agency issued CMO	$	305,318	$	(1,010)	$	-	$	-	$	305,318	$	(1,010)
Government agency issued MBS		44,095		(381)		-		-		44,095		(381)
Total temporarily impaired securities	$	349,413	$	(1,391)	$	-	$	-	$	349,413	$	(1,391)

FHN has reviewed investment securities that were in unrealized loss positions in accordance with its accounting policy for other than temporary impairment “(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.