UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2016
or
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 001-15185
First Horizon National Corporation
(Exact name of registrant as specified in its charter)
TN | 62-0803242 | |
(State or other jurisdiction | (IRS Employer | |
incorporation of organization) | Identification No.) | |
165 MADISON AVENUE MEMPHIS, TENNESSEE |
38103 | |
(Address of principal executive office) | (Zip Code) |
(Registrants telephone number, including area code) (901) 523-4444
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.
Class |
Outstanding on June 30, 2016 | |
Common Stock, $.625 par value | 232,019,031 |
Table of Contents
FIRST HORIZON NATIONAL CORPORATION
1 | ||||
1 | ||||
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |
71 | |||
Item 3. Quantitative and Qualitative Disclosures about Market Risk |
115 | |||
115 | ||||
116 | ||||
116 | ||||
116 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
116 | |||
116 | ||||
116 | ||||
116 | ||||
117 | ||||
118 | ||||
119 | ||||
Exhibit 31(a) |
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Exhibit 31(b) |
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Exhibit 32(a) |
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Exhibit 32(b) |
FINANCIAL INFORMATION
This financial information reflects all adjustments that are, in the opinion of management, necessary for a fair presentation of the financial condition and results of operations for the interim periods presented.
CONSOLIDATED CONDENSED STATEMENTS OF CONDITION
First Horizon National Corporation | ||||||||||||
June 30 | December 31 | |||||||||||
(Dollars in thousands, except per share amounts)(Unaudited) |
2016 | 2015 | 2015 | |||||||||
Assets: |
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Cash and due from banks |
$ | 283,648 | $ | 274,256 | $ | 300,811 | ||||||
Federal funds sold |
40,570 | 77,039 | 114,479 | |||||||||
Securities purchased under agreements to resell (Note 15) |
881,732 | 816,991 | 615,773 | |||||||||
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Total cash and cash equivalents |
1,205,950 | 1,168,286 | 1,031,063 | |||||||||
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Interest-bearing cash |
321,743 | 344,944 | 602,836 | |||||||||
Trading securities |
1,162,959 | 1,133,490 | 881,450 | |||||||||
Loans held-for-sale (a) |
117,976 | 127,196 | 126,342 | |||||||||
Securities available-for-sale (Note 3) |
4,009,243 | 3,648,860 | 3,929,846 | |||||||||
Securities held-to-maturity (Note 3) |
14,333 | 4,306 | 14,320 | |||||||||
Loans, net of unearned income (Note 4) (b) |
18,589,337 | 16,936,772 | 17,686,502 | |||||||||
Less: Allowance for loan losses (Note 5) |
199,807 | 221,351 | 210,242 | |||||||||
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Total net loans |
18,389,530 | 16,715,421 | 17,476,260 | |||||||||
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Goodwill (Note 6) |
191,307 | 145,932 | 191,307 | |||||||||
Other intangible assets, net (Note 6) |
23,616 | 26,922 | 26,215 | |||||||||
Fixed income receivables |
219,939 | 91,069 | 63,660 | |||||||||
Premises and equipment, net (June 30, 2016 includes $10.0 million classified as held-for-sale) |
279,676 | 269,507 | 275,619 | |||||||||
Real estate acquired by foreclosure (c) |
20,053 | 40,268 | 33,063 | |||||||||
Derivative assets (Note 14) |
196,989 | 115,230 | 104,365 | |||||||||
Other assets |
1,387,756 | 1,405,961 | 1,436,291 | |||||||||
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Total assets |
$ | 27,541,070 | $ | 25,237,392 | $ | 26,192,637 | ||||||
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Liabilities and equity: |
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Deposits: |
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Savings |
$ | 7,960,182 | $ | 7,462,642 | $ | 7,811,191 | ||||||
Time deposits |
741,992 | 769,132 | 788,487 | |||||||||
Other interest-bearing deposits |
5,720,628 | 4,675,742 | 5,388,526 | |||||||||
Certificates of deposit $100,000 and more |
522,643 | 400,021 | 443,389 | |||||||||
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Interest-bearing |
14,945,445 | 13,307,537 | 14,431,593 | |||||||||
Noninterest-bearing |
5,684,732 | 5,366,936 | 5,535,885 | |||||||||
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Total deposits |
20,630,177 | 18,674,473 | 19,967,478 | |||||||||
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Federal funds purchased |
508,669 | 556,862 | 464,166 | |||||||||
Securities sold under agreements to repurchase (Note 15) |
451,129 | 311,760 | 338,133 | |||||||||
Trading liabilities |
789,540 | 732,564 | 566,019 | |||||||||
Other short-term borrowings |
543,033 | 150,350 | 137,861 | |||||||||
Term borrowings |
1,076,943 | 1,555,272 | 1,312,677 | |||||||||
Fixed income payables |
90,400 | 54,301 | 23,072 | |||||||||
Derivative liabilities (Note 14) |
170,619 | 109,815 | 108,339 | |||||||||
Other liabilities |
588,636 | 574,090 | 635,306 | |||||||||
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Total liabilities |
24,849,146 | 22,719,487 | 23,553,051 | |||||||||
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Equity: |
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First Horizon National Corporation Shareholders Equity: |
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Preferred stock Series A, non-cumulative perpetual, no par value, liquidation preference of $100,000 per share (shares authorized 1,000; shares issued 1,000 on June 30, 2016, June 30, 2015 and December 31, 2015) |
95,624 | 95,624 | 95,624 | |||||||||
Common stock $.625 par value (shares authorized 400,000,000; shares issued 232,019,031 on June 30, 2016; 234,020,798 on June 30, 2015; and 238,586,637 on December 31, 2015) |
145,012 | 146,263 | 149,117 | |||||||||
Capital surplus |
1,362,528 | 1,371,712 | 1,439,303 | |||||||||
Undivided profits |
945,663 | 797,123 | 874,303 | |||||||||
Accumulated other comprehensive loss, net (Note 8) |
(152,334 | ) | (188,248 | ) | (214,192 | ) | ||||||
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Total First Horizon National Corporation Shareholders Equity |
2,396,493 | 2,222,474 | 2,344,155 | |||||||||
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Noncontrolling interest |
295,431 | 295,431 | 295,431 | |||||||||
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Total equity |
2,691,924 | 2,517,905 | 2,639,586 | |||||||||
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Total liabilities and equity |
$ | 27,541,070 | $ | 25,237,392 | $ | 26,192,637 | ||||||
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Certain previously reported amounts have been revised to reflect the retroactive effect of the adoption of ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. See Note 1 Financial Information for additional information.
See accompanying notes to consolidated condensed financial statements.
(a) | June 30, 2016 and 2015 and December 31, 2015 include $21.2 million, $20.2 million and $22.4 million, respectively, of held-for-sale consumer mortgage loans secured by residential real estate in process of foreclosure. |
(b) | June 30, 2016 and 2015 and December 31, 2015 include $31.1 million, $28.3 million and $29.7 million, respectively, of held-to-maturity consumer mortgage loans secured by residential real estate properties in process of foreclosure. |
(c) | June 30, 2016 and 2015 and December 31, 2015 include $9.6 million, $18.7 million and $14.6 million, respectively, of foreclosed residential real estate. |
2
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
First Horizon National Corporation | ||||||||||||||||
Three Months Ended June 30 |
Six Months Ended June 30 |
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(Dollars and shares in thousands except per share data, unless otherwise noted)(Unaudited) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Interest income: |
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Interest and fees on loans |
$ | 163,054 | $ | 153,283 | $ | 321,477 | $ | 297,180 | ||||||||
Interest on investment securities available-for-sale |
23,953 | 23,288 | 48,427 | 46,122 | ||||||||||||
Interest on investment securities held-to-maturity |
198 | 66 | 395 | 132 | ||||||||||||
Interest on loans held-for-sale |
1,198 | 1,350 | 2,459 | 2,841 | ||||||||||||
Interest on trading securities |
8,020 | 8,951 | 15,771 | 18,052 | ||||||||||||
Interest on other earning assets |
953 | 92 | 2,511 | 771 | ||||||||||||
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Total interest income |
197,376 | 187,030 | 391,040 | 365,098 | ||||||||||||
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Interest expense: |
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Interest on deposits: |
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Savings |
4,146 | 2,970 | 8,336 | 6,277 | ||||||||||||
Time deposits |
1,148 | 1,324 | 2,260 | 2,756 | ||||||||||||
Other interest-bearing deposits |
2,526 | 1,104 | 4,830 | 2,061 | ||||||||||||
Certificates of deposit $100,000 and more |
1,326 | 830 | 2,537 | 1,712 | ||||||||||||
Interest on trading liabilities |
3,782 | 3,770 | 7,821 | 7,684 | ||||||||||||
Interest on short-term borrowings |
1,203 | 726 | 2,331 | 1,772 | ||||||||||||
Interest on term borrowings |
6,981 | 9,666 | 14,587 | 19,330 | ||||||||||||
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Total interest expense |
21,112 | 20,390 | 42,702 | 41,592 | ||||||||||||
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Net interest income |
176,264 | 166,640 | 348,338 | 323,506 | ||||||||||||
Provision for loan losses |
4,000 | 2,000 | 7,000 | 7,000 | ||||||||||||
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Net interest income after provision for loan losses |
172,264 | 164,640 | 341,338 | 316,506 | ||||||||||||
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Noninterest income: |
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Fixed income |
77,913 | 56,241 | 144,890 | 117,860 | ||||||||||||
Deposit transactions and cash management |
26,991 | 28,430 | 53,828 | 54,981 | ||||||||||||
Brokerage, management fees and commissions |
10,665 | 12,456 | 21,080 | 23,855 | ||||||||||||
Trust services and investment management |
7,224 | 7,416 | 13,789 | 14,114 | ||||||||||||
Bankcard income |
6,558 | 5,884 | 11,817 | 11,070 | ||||||||||||
Bank-owned life insurance |
3,743 | 3,391 | 7,132 | 6,853 | ||||||||||||
Other service charges |
2,996 | 3,043 | 5,709 | 5,891 | ||||||||||||
Insurance commissions |
552 | 654 | 1,039 | 1,250 | ||||||||||||
Equity securities gains/(losses), net (Note 3) |
99 | 8 | 19 | 284 | ||||||||||||
Debt securities gains/(losses), net (Note 3) |
| | 1,654 | | ||||||||||||
All other income and commissions (Note 7) |
8,773 | 12,778 | 18,862 | 23,832 | ||||||||||||
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Total noninterest income |
145,514 | 130,301 | 279,819 | 259,990 | ||||||||||||
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Adjusted gross income after provision for loan losses |
317,778 | 294,941 | 621,157 | 576,496 | ||||||||||||
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Noninterest expense: |
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Employee compensation, incentives, and benefits |
143,370 | 127,970 | 280,521 | 259,414 | ||||||||||||
Occupancy |
12,736 | 11,764 | 25,340 | 23,982 | ||||||||||||
Computer software |
11,226 | 11,340 | 22,813 | 22,282 | ||||||||||||
Operations services |
10,521 | 10,033 | 20,421 | 19,370 | ||||||||||||
Equipment rentals, depreciation, and maintenance |
7,182 | 7,983 | 13,341 | 15,203 | ||||||||||||
Legal fees |
5,891 | 4,509 | 10,770 | 8,060 | ||||||||||||
FDIC premium expense |
4,848 | 4,952 | 9,769 | 8,400 | ||||||||||||
Advertising and public relations |
4,481 | 4,349 | 9,454 | 9,082 | ||||||||||||
Professional fees |
4,284 | 5,218 | 9,483 | 8,924 | ||||||||||||
Communications and courier |
3,039 | 3,801 | 6,789 | 7,677 | ||||||||||||
Other insurance and taxes |
3,014 | 3,455 | 6,327 | 6,784 | ||||||||||||
Contract employment and outsourcing |
2,497 | 3,337 | 4,922 | 7,921 | ||||||||||||
Amortization of intangible assets |
1,299 | 1,298 | 2,599 | 2,596 | ||||||||||||
Foreclosed real estate |
(432 | ) | 1,329 | (690 | ) | 1,198 | ||||||||||
Repurchase and foreclosure provision |
(31,400 | ) | | (31,400 | ) | | ||||||||||
All other expense (Note 7) |
44,266 | 17,056 | 63,290 | 193,722 | ||||||||||||
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Total noninterest expense |
226,822 | 218,394 | 453,749 | 594,615 | ||||||||||||
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Income/(loss) before income taxes |
90,956 | 76,547 | 167,408 | (18,119 | ) | |||||||||||
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Provision/(benefit) for income taxes |
30,016 | 21,590 | 54,255 | (671 | ) | |||||||||||
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Net income/(loss) |
$ | 60,940 | $ | 54,957 | $ | 113,153 | $ | (17,448 | ) | |||||||
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Net income attributable to noncontrolling interest |
2,852 | 2,851 | 5,703 | 5,609 | ||||||||||||
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Net income/(loss) attributable to controlling interest |
$ | 58,088 | $ | 52,106 | $ | 107,450 | $ | (23,057 | ) | |||||||
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Preferred stock dividends |
1,550 | 1,550 | 3,100 | 3,100 | ||||||||||||
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Net income/(loss) available to common shareholders |
$ | 56,538 | $ | 50,556 | $ | 104,350 | $ | (26,157 | ) | |||||||
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Basic earnings/(loss) per share (Note 9) |
$ | 0.24 | $ | 0.22 | $ | 0.45 | $ | (0.11 | ) | |||||||
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Diluted earnings/(loss) per share (Note 9) |
$ | 0.24 | $ | 0.22 | $ | 0.44 | $ | (0.11 | ) | |||||||
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Weighted average common shares (Note 9) |
231,573 | 232,800 | 233,112 | 232,808 | ||||||||||||
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Diluted average common shares (Note 9) |
233,576 | 234,669 | 235,121 | 232,808 | ||||||||||||
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Cash dividends declared per common share |
$ | 0.07 | $ | 0.06 | $ | 0.14 | $ | 0.12 | ||||||||
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Certain previously reported amounts have been reclassified to agree with current presentation.
See accompanying notes to consolidated condensed financial statements.
3
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
First Horizon National Corporation | ||||||||||||||||
Three Months Ended June 30 |
Six Months Ended June 30 |
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(Dollars in thousands) (Unaudited) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income/(loss) |
$ | 60,940 | $ | 54,957 | $ | 113,153 | $ | (17,448 | ) | |||||||
Other comprehensive income/(loss), net of tax: |
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Net unrealized gains/(losses) on securities available-for-sale |
16,037 | (20,100 | ) | 55,197 | (2,096 | ) | ||||||||||
Net unrealized gains/(losses) on cash flow hedges |
1,226 | | 4,691 | | ||||||||||||
Net unrealized gains/(losses) on pension and other postretirement plans |
844 | 1,011 | 1,970 | 2,094 | ||||||||||||
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Other comprehensive income/(loss) |
18,107 | (19,089 | ) | 61,858 | (2 | ) | ||||||||||
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Comprehensive income/(loss) |
79,047 | 35,868 | 175,011 | (17,450 | ) | |||||||||||
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Comprehensive income attributable to noncontrolling interest |
2,852 | 2,851 | 5,703 | 5,609 | ||||||||||||
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Comprehensive income/(loss) attributable to controlling interest |
$ | 76,195 | $ | 33,017 | $ | 169,308 | $ | (23,059 | ) | |||||||
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Income tax expense/(benefit) of items included in Other Comprehensive Income/(Loss): |
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Net unrealized gains/(losses) on securities available-for-sale |
$ | 9,967 | $ | (12,651 | ) | $ | 34,304 | $ | (1,320 | ) | ||||||
Net unrealized gains/(losses) on cash flow hedges |
762 | | 2,915 | | ||||||||||||
Net unrealized gains/(losses) on pension and other postretirement plans |
525 | 636 | 1,225 | 1,318 |
See accompanying notes to consolidated condensed financial statements.
4
CONSOLIDATED CONDENSED STATEMENTS OF EQUITY
First Horizon National Corporation | ||||||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||||||
(Dollars in thousands except per share data)(Unaudited) |
Controlling Interest |
Noncontrolling Interest |
Total | Controlling Interest |
Noncontrolling Interest |
Total | ||||||||||||||||||
Balance, January 1 |
$ | 2,344,155 | $ | 295,431 | $ | 2,639,586 | $ | 2,286,159 | $ | 295,431 | $ | 2,581,590 | ||||||||||||
Net income/(loss) |
107,450 | 5,703 | 113,153 | (23,057 | ) | 5,609 | (17,448 | ) | ||||||||||||||||
Other comprehensive income/(loss) (a) |
61,858 | | 61,858 | (2 | ) | | (2 | ) | ||||||||||||||||
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Comprehensive income/(loss) |
169,308 | 5,703 | 175,011 | (23,059 | ) | 5,609 | (17,450 | ) | ||||||||||||||||
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Cash dividends declared: |
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Preferred stock ($3,100 per share for the six months ended June 30, 2016 and 2015) |
(3,100 | ) | | (3,100 | ) | (3,100 | ) | | (3,100 | ) | ||||||||||||||
Common stock ($.14 and $.12 per share for the six months ended June 30, 2016 and 2015, respectively) |
(32,991 | ) | | (32,991 | ) | (28,305 | ) | | (28,305 | ) | ||||||||||||||
Common stock repurchased (b) |
(89,698 | ) | | (89,698 | ) | (20,031 | ) | | (20,031 | ) | ||||||||||||||
Common stock issued for: |
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Stock options and restricted stock equity awards |
1,509 | | 1,509 | 4,427 | | 4,427 | ||||||||||||||||||
Stock-based compensation expense |
7,796 | | 7,796 | 6,474 | | 6,474 | ||||||||||||||||||
Dividends declared noncontrolling interest of subsidiary preferred stock |
| (5,703 | ) | (5,703 | ) | | (5,609 | ) | (5,609 | ) | ||||||||||||||
Tax benefit/(benefit reversal) stock based compensation expense |
(486 | ) | | (486 | ) | (91 | ) | | (91 | ) | ||||||||||||||
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Balance, June 30 |
$ | 2,396,493 | $ | 295,431 | $ | 2,691,924 | $ | 2,222,474 | $ | 295,431 | $ | 2,517,905 | ||||||||||||
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See accompanying notes to consolidated condensed financial statements.
(a) | Due to the nature of the preferred stock issued by FHN and its subsidiaries, all components of Other comprehensive income/(loss) have been attributed solely to FHN as the controlling interest holder. |
(b) | 2016 and 2015 include $86.4 million and $15.8 million, respectively, repurchased under share repurchase programs. |
5
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
First Horizon National Corporation | ||||||||
Six Months Ended June 30 | ||||||||
(Dollars in thousands)(Unaudited) |
2016 | 2015 | ||||||
Operating Activities |
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Net income/(loss) |
$ | 113,153 | $ | (17,448 | ) | |||
Adjustments to reconcile net income/(loss) to net cash provided/(used) by operating activities: |
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Provision for loan losses |
7,000 | 7,000 | ||||||
Provision/(benefit) for deferred income taxes |
34,366 | (1,592 | ) | |||||
Depreciation and amortization of premises and equipment |
16,036 | 18,229 | ||||||
Amortization of intangible assets |
2,599 | 2,596 | ||||||
Net other amortization and accretion |
10,722 | 11,731 | ||||||
Net (increase)/decrease in derivatives |
564 | (615 | ) | |||||
Repurchase and foreclosure provision |
(31,400 | ) | | |||||
Fair value adjustment to foreclosed real estate |
850 | 1,660 | ||||||
Litigation and regulatory matters |
25,652 | 120 | ||||||
Stock-based compensation expense |
7,796 | 6,474 | ||||||
(Tax benefit)/benefit reversal stock based compensation expense |
486 | 91 | ||||||
Equity securities (gains)/losses, net |
(19 | ) | (284 | ) | ||||
Debt securities (gains)/losses, net |
(1,654 | ) | | |||||
Net (gains)/losses on sale/disposal of fixed assets |
4,155 | (2,872 | ) | |||||
Loans held-for-sale: |
||||||||
Purchases |
(5,953 | ) | (1,178 | ) | ||||
Gross proceeds from settlements and sales |
14,668 | 15,561 | ||||||
(Gain)/loss due to fair value adjustments and other |
(349 | ) | (294 | ) | ||||
Net (increase)/decrease in: |
||||||||
Trading securities |
(283,283 | ) | 59,890 | |||||
Fixed income receivables |
(156,279 | ) | (48,581 | ) | ||||
Interest receivable |
6,751 | 9,955 | ||||||
Other assets |
(36,559 | ) | (48,727 | ) | ||||
Net increase/(decrease) in: |
||||||||
Trading liabilities |
223,521 | 138,250 | ||||||
Fixed income payables |
67,328 | 36,144 | ||||||
Interest payable |
(5,025 | ) | (7,613 | ) | ||||
Other liabilities |
(36,422 | ) | (67,405 | ) | ||||
|
|
|
|
|||||
Total adjustments |
(134,449 | ) | 128,540 | |||||
|
|
|
|
|||||
Net cash provided/(used) by operating activities |
(21,296 | ) | 111,092 | |||||
|
|
|
|
|||||
Investing Activities |
||||||||
Available-for-sale securities: |
||||||||
Sales |
1,543 | 284 | ||||||
Maturities |
315,301 | 327,315 | ||||||
Purchases |
(311,592 | ) | (427,717 | ) | ||||
Premises and equipment: |
||||||||
Sales |
2,786 | 40,369 | ||||||
Purchases |
(27,034 | ) | (15,751 | ) | ||||
Net (increase)/decrease in: |
||||||||
Loans |
(904,558 | ) | (722,062 | ) | ||||
Interests retained from securitizations classified as trading securities |
1,774 | 1,011 | ||||||
Interest-bearing cash |
281,093 | 1,277,023 | ||||||
|
|
|
|
|||||
Net cash provided/(used) by investing activities |
(640,687 | ) | 480,472 | |||||
|
|
|
|
|||||
Financing Activities |
||||||||
Common stock: |
||||||||
Stock options exercised |
807 | 4,715 | ||||||
Cash dividends paid |
(30,960 | ) | (26,020 | ) | ||||
Repurchase of shares (a) |
(89,698 | ) | (20,031 | ) | ||||
Tax benefit/(benefit reversal) stock based compensation expense |
(486 | ) | (91 | ) | ||||
Cash dividends paid preferred stock noncontrolling interest |
(5,672 | ) | (5,703 | ) | ||||
Cash dividends paid Series A preferred stock |
(3,100 | ) | (3,100 | ) | ||||
Term borrowings: |
||||||||
Payments/maturities |
(259,938 | ) | (312,808 | ) | ||||
Net increase/(decrease) in: |
||||||||
Deposits |
663,246 | 605,867 | ||||||
Short-term borrowings |
562,671 | (737,512 | ) | |||||
|
|
|
|
|||||
Net cash provided/(used) by financing activities |
836,870 | (494,683 | ) | |||||
|
|
|
|
|||||
Net increase/(decrease) in cash and cash equivalents |
174,887 | 96,881 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at beginning of period |
1,031,063 | 1,071,405 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 1,205,950 | $ | 1,168,286 | ||||
|
|
|
|
|||||
Supplemental Disclosures |
||||||||
Total interest paid |
$ | 47,355 | $ | 48,734 | ||||
Total taxes paid |
11,334 | 14,859 | ||||||
Total taxes refunded |
2,425 | 215 | ||||||
Transfer from loans to other real estate owned |
3,546 | 8,293 |
Certain previously reported amounts have been reclassified to agree with current presentation.
See accompanying notes to consolidated condensed financial statements.
(a) | 2016 and 2015 include $86.3 million and $15.8 million, respectively, repurchased under share repurchase programs. |
6
Notes to the Consolidated Condensed Financial Statements (Unaudited)
Note 1 Financial Information
Basis of Accounting. The unaudited interim consolidated condensed financial statements of First Horizon National Corporation (FHN), including its subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America and follow general practices within the industries in which it operates. This preparation requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions are based on information available as of the date of the financial statements and could differ from actual results. In the opinion of management, all necessary adjustments have been made for a fair presentation of financial position and results of operations for the periods presented. These adjustments are of a normal recurring nature unless otherwise disclosed in this Quarterly Report on Form 10-Q. The operating results for the interim 2016 periods are not necessarily indicative of the results that may be expected going forward. For further information, refer to the audited consolidated financial statements in Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
Summary of Accounting Changes. Effective January 1, 2016, FHN early adopted the provisions of ASU 2016-05, Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, on a prospective basis. ASU 2016-05 clarifies that a change in the counterparty of a derivative instrument that has been designated as the hedging instrument in an accounting hedge relationship does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. FHN considers the revised guidance to better reflect the nature of hedge accounting relationships by clarifying that, when considered solely, the counterparty is not a critical term in a hedge relationship. Because FHN has applied specific SEC staff guidance for novation (to facilitate central clearing requirements) of derivatives to prior and existing accounting hedge relationships, adoption of ASU 2016-05 had no effect on FHN.
Effective January 1, 2016, FHN early adopted the provisions of ASU 2016-06, Contingent Put and Call Options in Debt Instruments, which resolves diversity in practice for the bifurcation assessment when a contingent put or call option is embedded within a hybrid debt instrument. ASU 2016-06 clarifies that an entity is not required to assess whether the triggering event is related to interest rate or credit risks when performing the bifurcation analysis. FHNs existing bifurcation assessment process conforms to the methodology outlined in ASU 2016-06.
Effective January 1, 2016, FHN adopted the provisions of ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition in determining expense recognition for the award. Thus, compensation cost is recognized over the requisite service period based on the probability of achievement of the performance condition. Expense is adjusted after the requisite service period for changes in the probability of achievement. The adoption of ASU 2014-12 had no effect on FHN.
Effective January 1, 2016, FHN adopted the provisions of ASU 2015-02, Amendments to the Consolidation Analysis. ASU 2015-02 revises current consolidation guidance to modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities. ASU 2015-02 also eliminates the presumption that a general partner should consolidate a limited partnership, revises the consolidation analysis for reporting entities that have fee arrangements and related party relationships with variable interest entities, and provides a scope exception for entities with interests in registered money market funds. FHN has evaluated the provisions of ASU 2015-02 on its consolidation assessments and there was not a significant effect upon adoption.
Effective January 1, 2016, FHN adopted the provisions of ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented as a direct reduction from the carrying value of that debt liability, consistent with debt discounts. ASU 2015-03 requires application on a retrospective basis, with prior periods revised to reflect the effects of adoption. Consistent with prior requirements, FHN previously classified debt issuance costs within Other assets in the Consolidated Condensed Statements of Condition. The adoption of ASU 2015-03 had no effect on FHNs recognition of interest expense. The effects of the retrospective application of the change in presentation of debt issuance costs are summarized in the table below.
As of June 30 | As of December 31 | |||||||||||
(Dollars in thousands) |
2015 | 2015 | 2014 | |||||||||
Increase/(decrease) to previously reported Consolidated Statements of Condition amounts |
||||||||||||
Other assets |
$ | (2,375 | ) | $ | (2,499 | ) | $ | (2,764 | ) | |||
Term Borrowings |
(2,375 | ) | (2,499 | ) | (2,764 | ) |
7
Note 1 Financial Information (Continued)
Accounting Changes Issued but Not Currently Effective
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 does not change revenue recognition for financial instruments. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This is accomplished through a five-step recognition framework involving 1) the identification of contracts with customers, 2) identification of performance obligations, 3) determination of the transaction price, 4) allocation of the transaction price to the performance obligations and 5) recognition of revenue as performance obligations are satisfied. Additionally, qualitative and quantitative information is required for disclosure regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In February 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations, which provides additional guidance on whether an entity should recognize revenue on a gross or net basis, based on which party controls the specified good or service before that good or service is transferred to a customer. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing, which clarifies the original guidance included in ASU 2014-09 for identification of the goods or services provided to customers and enhances the implementation guidance for licensing arrangements. ASU 2016-12, Narrow-Scope Improvements and Practical Expedients was issued in May 2016 to provide additional guidance for the implementation and application of ASU 2014-09. The effective date of these ASUs has been deferred to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016, and associated interim periods. Transition to the new requirements may be made by retroactively revising prior financial statements (with certain practical expedients permitted) or by a cumulative effect through retained earnings. If the latter option is selected, additional disclosures are required for comparability. FHN is evaluating the effects of these ASUs on its revenue recognition practices.
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern. ASU 2014-15 requires an entitys management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entitys ability to continue as a going concern within one year after the date that the financial statements are issued. If such events or conditions exist, additional disclosures are required and management should evaluate whether its plans sufficiently alleviate the substantial doubt. ASU 2014-15 is effective for the annual period ending after December 15, 2016 and all interim and annual periods thereafter. The provisions of ASU 2014-15 are not anticipated to affect FHN.
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 makes several revisions to the accounting, presentation and disclosure for financial instruments. Equity investments (except those accounted for under the equity method or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net income. An entity may elect to measure equity investments that do not have readily determinable market values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar instruments from the same issuer. ASU 2016-01 also requires a qualitative impairment review for equity investments without readily determinable fair values, with measurement at fair value required if impairment is determined to exist. For liabilities for which fair value has been elected, ASU 2016-01 revises current accounting to record the portion of fair value changes resulting from instrument-specific credit risk within other comprehensive income rather than earnings. Additionally, ASU 2016-01 clarifies that the need for a valuation allowance on a deferred tax asset related to available-for-sale securities should be assessed in combination with all other deferred tax assets rather than being assessed in isolation. ASU 2016-01 also makes several changes to existing fair value presentation and disclosure requirements, including a provision that all disclosures must use an exit price concept in the determination of fair value. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. FHN is evaluating the impact of ASU 2016-01 on its current accounting and disclosure practices.
In February 2016, the FASB issued ASU 2016-02, Leases which requires a lessee to recognize in its statement of condition a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. ASU 2016-02 leaves lessor accounting largely unchanged from prior standards. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. All other leases must be classified as financing or operating leases which depends on the relationship of the lessees rights to the economic value of the leased asset. For finance leases, interest on the lease liability is recognized separately from amortization of the right-of-use asset in earnings, resulting in higher expense in the earlier portion of the lease term. For operating leases, a single lease cost is calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis.
In transition to ASU 2016-02, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply, which would result in continuing to account for leases that commence before the effective date in accordance with previous requirements (unless the lease is modified) except that lessees are required to recognize a right-of-
8
Note 1 Financial Information (Continued)
use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous requirements. ASU 2016-02 also requires expanded qualitative and quantitative disclosures to assess the amount, timing, and uncertainty of cash flows arising from lease arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. FHN is evaluating the impact of ASU 2016-02 on its current accounting and disclosure practices.
In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage of Certain Prepaid Stored-Value Products which indicates that liabilities related to the sale of prepaid-stored value products are considered financial liabilities and should have a breakage estimate applied for estimated unused funds. ASU 2016-04 does not apply to stored-value products that can only be redeemed for cash, are subject to escheatment or are linked to a segregated bank account. ASU 2016-04 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. FHN is evaluating the impact of ASU 2016-04 on its current accounting and disclosure practices.
In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting which makes several revisions to equity compensation accounting. Under the new guidance all excess tax benefits and deficiencies that occur when an award vests, is exercised, or expires will be recognized in income tax expense as discrete period items. Previously, these transactions were typically recorded directly within equity. Consistent with this change, excess tax benefits and deficiencies will no longer be included within estimated proceeds when performing the treasury stock method for calculation of diluted earnings per share. Excess tax benefits will also be recognized at the time an award is exercised or vests compared to the current requirement to delay recognition until the deduction reduces taxes payable. The presentation of excess tax benefits in the statement of cash flows will shift to an operating activity from the current classification as a financing activity.
ASU 2016-09 also provides an accounting policy election to recognize forfeitures of awards as they occur rather than the current requirement to estimate forfeitures from inception. Further, ASU 2016-09 permits employers to use a net-settlement feature to withhold taxes on equity compensation awards up to the maximum statutory tax rate without affecting the equity classification of the award. Under current guidance, withholding of equity awards in excess of the minimum statutory requirement results in liability classification for the entire award. The related cash remittance by the employer for employee taxes will be treated as a financing activity in the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. Transition to the new guidance will be accomplished through a combination of retrospective, cumulative-effect adjustment to equity and prospective methodologies. FHN is evaluating the impact of ASU 2016-09 on its current equity compensation accounting and disclosure practices.
In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments which revises the measurement and recognition of credit losses for assets measured at amortized cost (e.g., held-to-maturity (HTM) loans and debt securities) and available-for-sale (AFS) debt securities. Under ASU 2016-13, for assets measured at amortized cost, the current expected credit loss (CECL) is measured as the difference between amortized cost and the net amount expected to be collected. This represents a departure from existing GAAP as the incurred loss methodology for recognizing credit losses delays recognition until it is probable a loss has been incurred. The measurement of current expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Additionally, current disclosures of credit quality indicators in relation to the amortized cost of financing receivables will be further disaggregated by year of origination. ASU 2016-13 leaves the methodology for measuring credit losses on AFS debt securities largely unchanged, with the maximum credit loss representing the difference between amortized cost and fair value. However, such credit losses will be recognized through an allowance for credit losses, which permits recovery of previously recognized credit losses if circumstances change.
ASU 2016-13 also revises the recognition of credit losses for purchased financial assets with a more-than insignificant amount of credit deterioration since origination (PCD assets). For PCD assets the initial allowance for credit losses is added to the purchase price. Only subsequent changes in the allowance for credit losses are recorded as a credit loss expense for PCD assets. Interest income for PCD assets will be recognized based on the effective interest rate, excluding the discount embedded in the purchase price that is attributable to the acquirers assessment of credit losses at acquisition. Currently, credit losses for purchased credit-impaired assets are included in the initial basis of the assets with subsequent declines in credit resulting in expense while subsequent improvements in credit are reflected as an increase in the future yield from the assets.
The provisions of ASU 2016-13 will be generally be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in the year of adoption. Prospective implementation is required for debt securities for which an other-than-temporary-impairment (OTTI) had been previously recognized. Amounts previously recognized in accumulated other comprehensive income (AOCI) as of the date of adoption that relate to improvements in cash flows expected to be collected will continue to be accreted into income over the remaining life of the asset. Recoveries of amounts previously written off relating to improvements in cash flows after the date of adoption will be recorded in earnings when received. A prospective transition approach
9
Note 1 Financial Information (Continued)
will be used for existing PCD assets where upon adoption, the amortized cost basis will be adjusted to reflect the addition of the allowance for credit losses. Thus, an entity will not be required to reassess its purchased financial assets that exist as of the date of adoption to determine whether they would have met at acquisition the new criteria of more-than insignificant credit deterioration since origination. An entity will accrete the remaining noncredit discount (based on the revised amortized cost basis) into interest income at the effective interest rate at the adoption date.
ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted in fiscal years beginning after December 15, 2018. FHN is evaluating the impact of ASU 2016-13 on its current accounting and disclosure practices. Since the CECL methodology encompasses a life of loan requirement for the recognition of credit losses, the estimated amount of such losses will be larger than the estimate of probable incurred losses under current standards. The extent of this difference will be dependent upon economic considerations and loan portfolio characteristics at the time of adoption.
10
Note 2 Acquisitions and Divestitures
On October 2, 2015, FHN completed its acquisition of TrustAtlantic Financial Corporation (TrustAtlantic Financial or TAF), and its wholly-owned bank subsidiary TrustAtlantic Bank (TAB), for an aggregate of 5,093,657 shares of FHN common stock and $23.9 million in cash in a transaction valued at $96.7 million. Prior to the acquisition TAF and TAB were headquartered in Raleigh, North Carolina, where TAB had five branches located in the communities of Raleigh, Cary and Greenville. In relation to the acquisition, FHN acquired approximately $400 million in assets, including approximately $282 million in loans, and assumed approximately $344 million of TAB deposits. FHN recorded $45.4 million in goodwill associated with the acquisition, representing the excess of acquisition consideration over the estimated fair value of net assets acquired.
See Note 2 Acquisitions and Divestitures in the Notes to Consolidated Financial Statements on Form 10-K for the year ended December 31, 2015, for additional information about the TAF acquisition.
In second quarter 2016, FTBNA signed an agreement with GE Capital to purchase two regional groups of restaurant franchise loans totaling approximately $.6 billion. The acquired loans will be combined with existing FTBNA relationships to establish a restaurant franchise finance specialty lending business. The transaction is expected to close in third quarter 2016.
In addition to the transaction mentioned above, FHN acquires or divests assets from time to time in transactions that are considered business combination or divestitures but are not material to FHN individually or in the aggregate.
11
Note 3 Investment Securities
The following tables summarize FHNs investment securities on June 30, 2016 and 2015:
June 30, 2016 | ||||||||||||||||
(Dollars in thousands) |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
||||||||||||
Securities available-for-sale: |
||||||||||||||||
U.S. treasuries |
$ | 100 | $ | | $ | | $ | 100 | ||||||||
Government agency issued mortgage-backed securities (MBS) |
1,880,831 | 65,391 | | 1,946,222 | ||||||||||||
Government agency issued collateralized mortgage obligations (CMO) |
1,845,205 | 30,907 | (1,296 | ) | 1,874,816 | |||||||||||
States and municipalities |
1,500 | | | 1,500 | ||||||||||||
Equity and other (a) |
186,607 | | (2 | ) | 186,605 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total securities available-for-sale (b) |
$ | 3,914,243 | $ | 96,298 | $ | (1,298 | ) | $ | 4,009,243 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Securities held-to-maturity: |
||||||||||||||||
States and municipalities |
$ | 4,333 | $ | 407 | $ | | $ | 4,740 | ||||||||
Corporate bonds |
10,000 | 361 | | 10,361 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total securities held-to-maturity |
$ | 14,333 | $ | 768 | $ | | $ | 15,101 | ||||||||
|
|
|
|
|
|
|
|
(a) | Includes restricted investments in FHLB-Cincinnati stock of $87.9 million and FRB stock of $68.6 million. The remainder is money market and cost method investments. |
(b) | Includes $3.4 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes. |
June 30, 2015 | ||||||||||||||||
(Dollars in thousands) |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
||||||||||||
Securities available-for-sale: |
||||||||||||||||
U.S. treasuries |
$ | 100 | $ | | $ | | $ | 100 | ||||||||
Government agency issued MBS |
804,841 | 29,068 | (3,269 | ) | 830,640 | |||||||||||
Government agency issued CMO |
2,624,151 | 20,836 | (19,701 | ) | 2,625,286 | |||||||||||
Other U.S. government agencies |
1,539 | 21 | | 1,560 | ||||||||||||
States and municipalities |
9,455 | | | 9,455 | ||||||||||||
Equity and other (a) |
182,059 | | (240 | ) | 181,819 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total securities available-for-sale (b) |
$ | 3,622,145 | $ | 49,925 | $ | (23,210 | ) | $ | 3,648,860 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Securities held-to-maturity: |
||||||||||||||||
States and municipalities |
$ | 4,306 | $ | 1,050 | $ | | $ | 5,356 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total securities held-to-maturity |
$ | 4,306 | $ | 1,050 | $ | | $ | 5,356 | ||||||||
|
|
|
|
|
|
|
|
(a) | Includes restricted investments in FHLB-Cincinnati stock of $87.9 million and FRB stock of $65.8 million. The remainder is money market and cost method investments. |
(b) | Includes $3.2 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes. |
12
Note 3 Investment Securities (Continued)
The amortized cost and fair value by contractual maturity for the available-for-sale and held-to-maturity securities portfolios on June 30, 2016, are provided below:
Held-to-Maturity | Available-for-Sale | |||||||||||||||
(Dollars in thousands) |
Amortized Cost |
Fair Value |
Amortized Cost |
Fair Value |
||||||||||||
Within 1 year |
$ | | $ | | $ | 1,500 | $ | 1,500 | ||||||||
After 1 year; within 5 years |
| | 100 | 100 | ||||||||||||
After 5 years; within 10 years |
10,000 | 10,361 | | | ||||||||||||
After 10 years |
4,333 | 4,740 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
14,333 | 15,101 | 1,600 | 1,600 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Government agency issued MBS and CMO (a) |
| | 3,726,036 | 3,821,038 | ||||||||||||
Equity and other |
| | 186,607 | 186,605 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 14,333 | $ | 15,101 | $ | 3,914,243 | $ | 4,009,243 | ||||||||
|
|
|
|
|
|
|
|
(a) | 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 available-for-sale investment securities for the three and six months ended June 30:
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Gross gains on sales of securities |
$ | 162 | $ | 8 | $ | 3,999 | $ | 284 | ||||||||
Gross (losses) on sales of securities |
(63 | ) | | (2,326 | ) | | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net gain/(loss) on sales of securities (a) |
$ | 99 | $ | 8 | $ | 1,673 | $ | 284 | ||||||||
|
|
|
|
|
|
|
|
(a) | Cash proceeds for the three months ended June 30, 2016 were $.6 million; cash proceeds for the three months ended June 30, 2015 were not material. Proceeds for the six months ended June 30, 2016 and 2015, respectively, were $1.5 million and $.3 million. Six months ended June 30, 2016 includes a $1.7 million gain from an exchange of approximately $294 million of AFS debt securities. |
13
Note 3 Investment Securities (Continued)
The following tables provide information on investments within the available-for-sale portfolio that had unrealized losses as of June 30, 2016 and 2015:
As of June 30, 2016 | ||||||||||||||||||||||||
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 CMO |
$ | 26,121 | $ | (10 | ) | $ | 186,797 | $ | (1,286 | ) | $ | 212,918 | $ | (1,296 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total debt securities |
26,121 | (10 | ) | 186,797 | (1,286 | ) | 212,918 | (1,296 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Equity |
7 | (2 | ) | | | 7 | (2 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total temporarily impaired securities |
$ | 26,128 | $ | (12 | ) | $ | 186,797 | $ | (1,286 | ) | $ | 212,925 | $ | (1,298 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2015 | ||||||||||||||||||||||||
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 CMO |
$ | 845,534 | $ | (7,734 | ) | $ | 450,079 | $ | (11,967 | ) | $ | 1,295,613 | $ | (19,701 | ) | |||||||||
Government agency issued MBS |
233,521 | (2,485 | ) | 33,582 | (784 | ) | 267,103 | (3,269 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total debt securities |
1,079,055 | (10,219 | ) | 483,661 | (12,751 | ) | 1,562,716 | (22,970 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Equity |
| | 851 | (240 | ) | 851 | (240 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total temporarily impaired securities |
$ | 1,079,055 | $ | (10,219 | ) | $ | 484,512 | $ | (12,991 | ) | $ | 1,563,567 | $ | (23,210 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
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 changes in 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.
14
The following table provides the balance of loans by portfolio segment as of June 30, 2016 and 2015, and December, 31 2015:
June 30 | December 31 | |||||||||||
(Dollars in thousands) |
2016 | 2015 | 2015 | |||||||||
Commercial: |
||||||||||||
Commercial, financial, and industrial |
$ | 11,179,445 | $ | 9,832,563 | $ | 10,436,390 | ||||||
Commercial real estate |
1,969,412 | 1,400,715 | 1,674,935 | |||||||||
Consumer: |
||||||||||||
Consumer real estate (a) |
4,640,779 | 4,870,271 | 4,766,518 | |||||||||
Permanent mortgage |
439,014 | 487,679 | 454,123 | |||||||||
Credit card & other |
360,687 | 345,544 | 354,536 | |||||||||
|
|
|
|
|
|
|||||||
Loans, net of unearned income |
$ | 18,589,337 | $ | 16,936,772 | $ | 17,686,502 | ||||||
Allowance for loan losses |
199,807 | 221,351 | 210,242 | |||||||||
|
|
|
|
|
|
|||||||
Total net loans |
$ | 18,389,530 | $ | 16,715,421 | $ | 17,476,260 | ||||||
|
|
|
|
|
|
(a) | Balances as of June 30, 2016 and 2015, and December 31, 2015, include $43.5 million, $66.4 million, and $52.8 million of restricted real estate loans, respectively. See Note 13 Variable Interest Entities for additional information. |
COMPONENTS OF THE LOAN PORTFOLIO
The loan portfolio is disaggregated into segments and then further disaggregated into classes for certain disclosures. GAAP defines a portfolio segment as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. A class is generally determined based on the initial measurement attribute (i.e., amortized cost or purchased credit-impaired), risk characteristics of the loan, and FHNs method for monitoring and assessing credit risk. Commercial loan portfolio segments include commercial, financial and industrial (C&I) and commercial real estate (CRE). Commercial classes within C&I include general C&I, loans to mortgage companies, the trust preferred loans (TRUPS) (i.e. long-term unsecured loans to bank and insurance related businesses) portfolio and purchased credit-impaired (PCI) loans. Loans to mortgage companies include commercial lines of credit to qualified mortgage companies primarily for the temporary warehousing of eligible mortgage loans prior to the borrowers sale of those mortgage loans to third party investors. Commercial classes within CRE include income CRE, residential CRE and PCI loans. Consumer loan portfolio segments include consumer real estate, permanent mortgage, and the credit card and other portfolio. Consumer classes include HELOC, real estate (R/E) installment and PCI loans within the consumer real estate segment, permanent mortgage (which is both a segment and a class), and credit card and other.
Concentrations
FHN has a concentration of residential real estate loans (27 percent of total loans), the majority of which is in the consumer real estate segment (25 percent of total loans). Loans to finance and insurance companies total $2.3 billion (20 percent of the C&I portfolio, or 12 percent of the total loans). FHN had loans to mortgage companies totaling $2.2 billion (20 percent of the C&I segment, or 12 percent of total loans) as of June 30, 2016. As a result, 40 percent of the C&I segment was sensitive to impacts on the financial services industry.
Acquisition
On October 2, 2015, FHN completed its acquisition of TAF, and its wholly-owned bank subsidiary TAB. The acquisition included $298.1 million in unpaid principal balance of loans with a fair value of $281.9 million. Generally, the fair value for the acquired loans is estimated using a discounted cash flow analysis with significant unobservable inputs (Level 3) including adjustments for expected credit losses, prepayment speeds, current market rates for similar loans, and an adjustment for investor-required yield given product-type and various risk characteristics. See Note 2 Acquisitions and Divestitures for additional information.
At acquisition, FHN designated certain loans as PCI with the remaining loans accounted for under ASC 310-20, Nonrefundable Fees and Other Costs. For loans accounted for under ASC 310-20, the difference between each loans book value to TAB and the estimated fair value at the time of the acquisition will be accreted into interest income over its remaining contractual life and the subsequent accounting and reporting will be similar to a loan in FHNs originated portfolio.
15
Note 4 Loans (Continued)
Purchased Credit-Impaired Loans
The following table presents a rollforward of the accretable yield for the three and six months ended June 30, 2016 and 2015:
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Balance, beginning of period |
$ | 8,958 | $ | 10,468 | $ | 8,542 | $ | 14,714 | ||||||||
Accretion |
(996 | ) | (1,576 | ) | (2,147 | ) | (4,948 | ) | ||||||||
Adjustment for payoffs |
(2,452 | ) | (760 | ) | (4,229 | ) | (2,096 | ) | ||||||||
Adjustment for charge-offs |
(11 | ) | | (674 | ) | | ||||||||||
Increase in accretable yield (a) |
705 | 216 | 4,712 | 678 | ||||||||||||
Other |
(33 | ) | | (33 | ) | | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, end of period |
$ | 6,171 | $ | 8,348 | $ | 6,171 | $ | 8,348 | ||||||||
|
|
|
|
|
|
|
|
(a) | Includes changes in the accretable yield due to both transfers from the nonaccretable difference and the impact of changes in the expected timing of the cash flows. |
At June 30, 2016, the ALLL related to PCI loans was $.8 million compared to $2.8 million at June 30, 2015. A loan loss provision credit of $.4 million was recognized during the three months ended June 30, 2016, as compared to a loan loss provision credit of $.3 million recognized during the three months ended June 30, 2015. A loan loss provision credit of $.3 million was recognized during the six months ended June 30, 2016, as compared to a loan loss provision credit of $.6 million recognized during the six months ended June 30, 2015.
The following table reflects the outstanding principal balance and carrying amounts of the acquired PCI loans as of June 30, 2016 and 2015, and December 31, 2015:
June 30, 2016 | June 30, 2015 | December 31, 2015 | ||||||||||||||||||||||
(Dollars in thousands) |
Carrying value |
Unpaid balance |
Carrying value |
Unpaid balance |
Carrying value |
Unpaid balance |
||||||||||||||||||
Commercial, financial and industrial |
$ | 10,437 | $ | 12,140 | $ | 4,870 | $ | 5,507 | $ | 16,063 | $ | 18,573 | ||||||||||||
Commercial real estate |
9,428 | 12,382 | 20,262 | 24,830 | 19,929 | 25,504 | ||||||||||||||||||
Consumer real estate |
1,247 | 1,800 | 1,927 | 2,796 | 3,672 | 4,533 | ||||||||||||||||||
Credit card and other |
55 | 72 | 9 | 11 | 52 | 76 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 21,167 | $ | 26,394 | $ | 27,068 | $ | 33,144 | $ | 39,716 | $ | 48,686 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
16
Note 4 Loans (Continued)
Impaired Loans
The following tables provide information at June 30, 2016 and 2015, by class related to individually impaired loans and consumer TDRs. Recorded investment is defined as the amount of the investment in a loan, before valuation allowance but which does reflect any direct write-down of the investment. For purposes of this disclosure, PCI loans and net LOCOM have been excluded.
June 30, 2016 | Three Months Ended June 30, 2016 |
Six Months Ended June 30, 2016 |
||||||||||||||||||||||||||
(Dollars in thousands) |
Recorded Investment |
Unpaid Principal Balance |
Related Allowance |
Average Recorded Investment |
Interest Income Recognized |
Average Recorded Investment |
Interest Income Recognized |
|||||||||||||||||||||
Impaired loans with no related allowance recorded: |
||||||||||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||
General C&I |
$ | 14,289 | $ | 22,141 | $ | | $ | 13,333 | $ | | $ | 11,278 | $ | | ||||||||||||||
Income CRE |
2,468 | 9,389 | | 2,468 | | 2,468 | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 16,757 | $ | 31,530 | $ | | $ | 15,801 | $ | | $ | 13,746 | $ | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consumer: |
||||||||||||||||||||||||||||
HELOC (a) |
$ | 11,186 | $ | 25,367 | $ | | $ | 11,105 | $ | | $ | 11,013 | $ | | ||||||||||||||
R/E installment loans (a) |
4,232 | 5,411 | | 4,407 | | 4,420 | | |||||||||||||||||||||
Permanent mortgage (a) |
4,280 | 6,657 | | 4,161 | | 4,298 | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 19,698 | $ | 37,435 | $ | | $ | 19,673 | $ | | $ | 19,731 | $ | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Impaired loans with related allowance recorded: |
||||||||||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||
General C&I |
$ | 33,884 | $ | 35,585 | $ | 3,151 | $ | 31,333 | $ | 292 | $ | 28,127 | $ | 379 | ||||||||||||||
TRUPS |
3,274 | 3,700 | 925 | 3,291 | | 3,307 | | |||||||||||||||||||||
Income CRE |
4,454 | 4,796 | 329 | 4,780 | 20 | 4,959 | 40 | |||||||||||||||||||||
Residential CRE |
1,376 | 1,844 | 105 | 1,376 | 6 | 1,386 | 12 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 42,988 | $ | 45,925 | $ | 4,510 | $ | 40,780 | $ | 318 | $ | 37,779 | $ | 431 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consumer: |
||||||||||||||||||||||||||||
HELOC |
$ | 88,871 | $ | 91,771 | $ | 16,375 | $ | 88,299 | $ | 494 | $ | 88,439 | $ | 981 | ||||||||||||||
R/E installment loans |
59,050 | 60,338 | 15,536 | 58,923 | 345 | 59,447 | 662 | |||||||||||||||||||||
Permanent mortgage |
91,602 | 104,243 | 15,583 | 92,218 | 541 | 93,725 | 1,058 | |||||||||||||||||||||
Credit card & other |
356 | 356 | 147 | 351 | 3 | 355 | 6 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 239,879 | $ | 256,708 | $ | 47,641 | $ | 239,791 | $ | 1,383 | $ | 241,966 | $ | 2,707 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total commercial |
$ | 59,745 | $ | 77,455 | $ | 4,510 | $ | 56,581 | $ | 318 | $ | 51,525 | $ | 431 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total consumer |
$ | 259,577 | $ | 294,143 | $ | 47,641 | $ | 259,464 | $ | 1,383 | $ | 261,697 | $ | 2,707 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total impaired loans |
$ | 319,322 | $ | 371,598 | $ | 52,151 | $ | 316,045 | $ | 1,701 | $ | 313,222 | $ | 3,138 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance. |
17
Note 4 Loans (Continued)
June 30, 2015 | Three Months Ended June 30, 2015 |
Six Months Ended June 30, 2015 |
||||||||||||||||||||||||||
(Dollars in thousands) |
Recorded Investment |
Unpaid Principal Balance |
Related Allowance |
Average Recorded Investment |
Interest Income Recognized |
Average Recorded Investment |
Interest Income Recognized |
|||||||||||||||||||||
Impaired loans with no related allowance recorded: |
||||||||||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||
General C&I |
$ | 12,402 | $ | 15,690 | $ | | $ | 13,016 | $ | | $ | 12,305 | $ | | ||||||||||||||
Income CRE |
4,187 | 11,262 | | 4,198 | | 5,283 | | |||||||||||||||||||||
Residential CRE |
| | | | | 287 | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 16,589 | $ | 26,952 | $ | | $ | 17,214 | $ | | $ | 17,875 | $ | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consumer: |
||||||||||||||||||||||||||||
HELOC (a) |
$ | 12,577 | $ | 30,604 | $ | | $ | 12,588 | $ | | $ | 12,788 | $ | | ||||||||||||||
R/E installment loans (a) |
4,959 | 6,211 | | 4,739 | | 4,704 | | |||||||||||||||||||||
Permanent mortgage (a) |
6,403 | 8,603 | | 6,804 | | 7,018 | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 23,939 | $ | 45,418 | $ | | $ | 24,131 | $ | | $ | 24,510 | $ | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Impaired loans with related allowance recorded: |
||||||||||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||
General C&I |
$ | 30,549 | $ | 37,741 | $ | 8,117 | $ | 28,400 | $ | 237 | $ | 24,087 | $ | 490 | ||||||||||||||
TRUPS |
13,399 | 13,700 | 4,810 | 13,414 | | 13,429 | | |||||||||||||||||||||
Income CRE |
6,788 | 8,298 | 533 | 6,742 | 33 | 7,140 | 63 | |||||||||||||||||||||
Residential CRE |
1,518 | 1,886 | 102 | 1,571 | 6 | 1,534 | 13 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 52,254 | $ | 61,625 | $ | 13,562 | $ | 50,127 | $ | 276 | $ | 46,190 | $ | 566 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consumer: |
||||||||||||||||||||||||||||
HELOC |
$ | 87,292 | $ | 89,454 | $ | 21,967 | $ | 86,197 | $ | 461 | $ | 85,417 | $ | 909 | ||||||||||||||
R/E installment loans |
67,269 | 68,151 | 19,439 | 68,330 | 331 | 69,227 | 658 | |||||||||||||||||||||
Permanent mortgage |
100,754 | 113,290 | 17,857 | 102,194 | 637 | 103,555 | 1,228 | |||||||||||||||||||||
Credit card & other |
418 | 418 | 155 | 451 | 4 | 479 | 8 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 255,733 | $ | 271,313 | $ | 59,418 | $ | 257,172 | $ | 1,433 | $ | 258,678 | $ | 2,803 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total commercial |
$ | 68,843 | $ | 88,577 | $ | 13,562 | $ | 67,341 | $ | 276 | $ | 64,065 | $ | 566 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total consumer |
$ | 279,672 | $ | 316,731 | $ | 59,418 | $ | 281,303 | $ | 1,433 | $ | 283,188 | $ | 2,803 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total impaired loans |
$ | 348,515 | $ | 405,308 | $ | 72,980 | $ | 348,644 | $ | 1,709 | $ | 347,253 | $ | 3,369 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance. |
Asset Quality Indicators
FHN employs a dual grade commercial risk grading methodology to assign an estimate for the probability of default (PD) and the loss given default (LGD) for each commercial loan using factors specific to various industry, portfolio, or product segments that result in a rank ordering of risk and the assignment of grades PD 1 to PD 16. Each PD grade corresponds to an estimated one-year default probability percentage; a PD 1 has the lowest expected default probability, and probabilities increase as grades progress down the scale. PD 1 through PD 12 are pass grades. PD grades 13-16 correspond to the regulatory-defined categories of special mention (13), substandard (14), doubtful (15), and loss (16). Pass loan grades are required to be reassessed annually or earlier whenever there has been a material change in the financial condition of the borrower or risk characteristics of the relationship. All commercial loans over $1 million and certain commercial loans over $500,000 that are graded 13 or worse are reassessed on a quarterly basis. LGD grades are assigned based on a scale of 1-12 and represent FHNs expected recovery based on collateral type in the event a loan defaults. See Note 5 Allowance for Loan Losses for further discussion on the credit grading system.
18
Note 4 Loans (Continued)
The following tables provide the balances of commercial loan portfolio classes with associated allowance, disaggregated by PD grade as of June 30, 2016 and 2015:
June 30, 2016 | ||||||||||||||||||||||||||||||||
(Dollars in thousands) |
General C&I |
Loans to Mortgage Companies |
TRUPS (a) | Income CRE |
Residential CRE |
Total | Percentage of Total |
Allowance for Loan Losses |
||||||||||||||||||||||||
PD Grade: |
||||||||||||||||||||||||||||||||
1 |
$ | 538,386 | $ | | $ | | $ | 949 | $ | | $ | 539,335 | 4 | % | $ | 109 | ||||||||||||||||
2 |
709,997 | | | 9,806 | 115 | 719,918 | 5 | 389 | ||||||||||||||||||||||||
3 |
425,912 | 436,545 | | 159,880 | | 1,022,337 | 8 | 261 | ||||||||||||||||||||||||
4 |
985,360 | 422,844 | | 219,102 | 211 | 1,627,517 | 12 | 1,076 | ||||||||||||||||||||||||
5 |
1,094,829 | 248,926 | | 259,861 | 589 | 1,604,205 | 12 | 6,203 | ||||||||||||||||||||||||
6 |
1,156,675 | 837,453 | | 290,774 | 22,028 | 2,306,930 | 18 | 9,654 | ||||||||||||||||||||||||
7 |
1,399,125 | 172,039 | | 437,637 | 8,157 | 2,016,958 | 15 | 14,307 | ||||||||||||||||||||||||
8 |
803,708 | 46,947 | | 303,946 | 4,330 | 1,158,931 | 9 | 20,979 | ||||||||||||||||||||||||
9 |
564,474 | 6,661 | | 82,351 | 4,625 | 658,111 | 5 | 12,885 | ||||||||||||||||||||||||
10 |
258,486 | 38,285 | | 61,260 | 14,011 | 372,042 | 3 | 5,637 | ||||||||||||||||||||||||
11 |
222,391 | 17,390 | | 20,364 | 4,838 | 264,983 | 2 | 6,971 | ||||||||||||||||||||||||
12 |
111,980 | | | 14,530 | 4,363 | 130,873 | 1 | 4,337 | ||||||||||||||||||||||||
13 |
157,028 | | 304,527 | 7,437 | 302 | 469,294 | 4 | 5,669 | ||||||||||||||||||||||||
14,15,16 |
157,403 | 81 | | 18,369 | 1,471 | 177,324 | 1 | 17,758 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Collectively evaluated for impairment |
8,585,754 | 2,227,171 | 304,527 | 1,886,266 | 65,040 | 13,068,758 | 99 | 106,235 | ||||||||||||||||||||||||
Individually evaluated for impairment |
48,173 | | 3,274 | 6,922 | 1,376 | 59,745 | 1 | 4,510 | ||||||||||||||||||||||||
Purchased credit-impaired loans |
10,546 | | | 9,199 | 609 | 20,354 | | 491 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total commercial loans |
$ | 8,644,473 | $ | 2,227,171 | $ | 307,801 | $ | 1,902,387 | $ | 67,025 | $ | 13,148,857 | 100 | % | $ | 111,236 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2015 | ||||||||||||||||||||||||||||||||
(Dollars in thousands) |
General C&I |
Loans to Mortgage Companies |
TRUPS (a) | Income CRE |
Residential CRE |
Total | Percentage of Total |
Allowance for Loan Losses |
||||||||||||||||||||||||
PD Grade: |
||||||||||||||||||||||||||||||||
1 |
$ | 495,855 | $ | | $ | | $ | 554 | $ | | $ | 496,409 | 4 | % | $ | 126 | ||||||||||||||||
2 |
590,328 | | | 11,602 | 41 | 601,971 | 5 | 332 | ||||||||||||||||||||||||
3 |
484,072 | 317,856 | | 84,178 | 181 | 886,287 | 8 | 350 | ||||||||||||||||||||||||
4 |
670,972 | 366,791 | | 96,689 | 54 | 1,134,506 | 10 | 868 | ||||||||||||||||||||||||
5 |
1,135,773 | 304,500 | | 213,213 | 5,288 | 1,658,774 | 15 | 6,372 | ||||||||||||||||||||||||
6 |
1,223,233 | 618,616 | | 267,983 | 4,499 | 2,114,331 | 20 | 10,234 | ||||||||||||||||||||||||
7 |
1,186,480 | 139,217 | | 365,840 | 2,844 | 1,694,381 | 15 | 13,203 | ||||||||||||||||||||||||
8 |
749,504 | 28,068 | | 163,904 | 272 | 941,748 | 8 | 13,942 | ||||||||||||||||||||||||
9 |
419,687 | 24,617 | | 43,752 | 383 | 488,439 | 4 | 7,900 | ||||||||||||||||||||||||
10 |
222,799 | | | 27,840 | 202 | 250,841 | 2 | 5,147 | ||||||||||||||||||||||||
11 |
179,139 | | | 24,010 | 1,071 | 204,220 | 2 | 5,438 | ||||||||||||||||||||||||
12 |
76,209 | | | 17,884 | 543 | 94,636 | 1 | 2,704 | ||||||||||||||||||||||||
13 |
122,862 | | 305,382 | 3,633 | 287 | 432,164 | 4 | 4,944 | ||||||||||||||||||||||||
14,15,16 |
109,820 | | | 27,045 | 2,054 | 138,919 | 1 | 12,829 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Collectively evaluated for impairment |
7,666,733 | 1,799,665 | 305,382 | 1,348,127 | 17,719 | 11,137,626 | 99 | 84,389 | ||||||||||||||||||||||||
Individually evaluated for impairment |
42,951 | | 12,785 | 10,975 | 1,518 | 68,229 | 1 | 13,562 | ||||||||||||||||||||||||
Purchased credit-impaired loans |
5,047 | | | 20,612 | 1,764 | 27,423 | | 2,291 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total commercial loans |
$ | 7,714,731 | $ | 1,799,665 | $ | 318,167 | $ | 1,379,714 | $ | 21,001 | $ | 11,233,278 | 100 | % | $ | 100,242 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Balances as of June 30, 2016 and 2015, presented net of $25.5 million and $26.2 million, respectively, in lower of cost or market (LOCOM) valuation adjustment. Based on the underlying structure of the notes, the highest possible internal grade is 13. |
19
Note 4 Loans (Continued)
The consumer portfolio is comprised primarily of smaller-balance loans which are very similar in nature in that most are standard products and are backed by residential real estate. Because of the similarities of consumer loan-types, FHN is able to utilize the Fair Isaac Corporation (FICO) score, among other attributes, to assess the credit quality of consumer borrowers. FICO scores are refreshed on a quarterly basis in an attempt to reflect the recent risk profile of the borrowers. Accruing delinquency amounts are indicators of asset quality within the credit card and other consumer portfolio.
The following table reflects the percentage of balances outstanding by average, refreshed FICO scores for the HELOC, real estate installment, and permanent mortgage classes of loans as of June 30, 2016 and 2015:
June 30, 2016 | June 30, 2015 | |||||||||||||||||||||||
HELOC | R/E Installment Loans |
Permanent Mortgage |
HELOC | R/E Installment Loans |
Permanent Mortgage |
|||||||||||||||||||
FICO score greater than or equal to 740 |
56.3 | % | 68.9 | % | 43.8 | % | 54.7 | % | 66.6 | % | 44.2 | % | ||||||||||||
FICO score 720-739 |
8.6 | 8.8 | 10.9 | 9.2 | 8.5 | 9.3 | ||||||||||||||||||
FICO score 700-719 |
9.0 | 6.8 | 9.3 | 9.0 | 7.4 | 9.0 | ||||||||||||||||||
FICO score 660-699 |
13.0 | 9.0 | 17.6 | 13.2 | 9.6 | 16.9 | ||||||||||||||||||
FICO score 620-659 |
6.2 | 3.7 | 9.6 | 6.4 | 3.9 | 8.6 | ||||||||||||||||||
FICO score less than 620 (a) |
6.9 | 2.8 | 8.8 | 7.5 | 4.0 | 12.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
(a) | For this group, a majority of the FICO scores at the time of the origination exceeded 620 but have since deteriorated as the loans have seasoned. |
Nonaccrual and Past Due Loans
The following table reflects accruing and non-accruing loans by class on June 30, 2016:
Accruing | Non-Accruing | Total Loans |
||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
Current | 30-89 Days Past Due |
90+ Days Past Due |
Total Accruing |
Current | 30-89 Days Past Due |
90+ Days Past Due |
Total Non- Accruing |
||||||||||||||||||||||||||||
Commercial (C&I): |
||||||||||||||||||||||||||||||||||||
General C&I |
$ | 8,603,288 | $ | 3,415 | $ | 75 | $ | 8,606,778 | $ | 2,868 | $ | 2,366 | $ | 21,915 | $ | 27,149 | $ | 8,633,927 | ||||||||||||||||||
Loans to mortgage companies |
2,226,841 | 249 | | 2,227,090 | | | 81 | 81 | 2,227,171 | |||||||||||||||||||||||||||
TRUPS (a) |
304,527 | | | 304,527 | | | 3,274 | 3,274 | 307,801 | |||||||||||||||||||||||||||
Purchased credit-impaired loans |
9,651 | 431 | 464 | 10,546 | | | | | 10,546 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total commercial (C&I) |
11,144,307 | 4,095 | 539 | 11,148,941 | 2,868 | 2,366 | 25,270 | 30,504 | 11,179,445 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||||||||||
Income CRE |
1,885,005 | 1,186 | | 1,886,191 | 2,186 | | 4,811 | 6,997 | 1,893,188 | |||||||||||||||||||||||||||
Residential CRE |
65,621 | | | 65,621 | | | 795 | 795 | 66,416 | |||||||||||||||||||||||||||
Purchased credit-impaired loans |
8,104 | 311 | 1,393 | 9,808 | | | | | 9,808 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total commercial real estate |
1,958,730 | 1,497 | 1,393 | 1,961,620 | 2,186 | | 5,606 | 7,792 | 1,969,412 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Consumer real estate: |
||||||||||||||||||||||||||||||||||||
HELOC |
1,792,492 | 18,345 | 7,927 | 1,818,764 | 59,310 | 5,318 | 9,826 | 74,454 | 1,893,218 | |||||||||||||||||||||||||||
R/E installment loans |
2,702,710 | 7,851 | 2,874 | 2,713,435 | 26,206 | 2,661 | 3,675 | 32,542 | 2,745,977 | |||||||||||||||||||||||||||
Purchased credit-impaired loans |
1,336 | 90 | 158 | 1,584 | | | | | 1,584 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total consumer real estate |
4,496,538 | 26,286 | 10,959 | 4,533,783 | 85,516 | 7,979 | 13,501 | 106,996 | 4,640,779 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Permanent mortgage |
398,712 | 3,719 | 6,003 | 408,434 | 12,985 | 3,518 | 14,077 | 30,580 | 439,014 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Credit card & other: |
||||||||||||||||||||||||||||||||||||
Credit card |
189,555 | 2,116 | 1,094 | 192,765 | | | | | 192,765 | |||||||||||||||||||||||||||
Other |
166,052 | 838 | 251 | 167,141 | | | 725 | 725 | 167,866 | |||||||||||||||||||||||||||
Purchased credit-impaired loans |
56 | | | 56 | | | | | 56 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total credit card & other |
355,663 | 2,954 | 1,345 | 359,962 | | | 725 | 725 | 360,687 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total loans, net of unearned income |
$ | 18,353,950 | $ | 38,551 | $ | 20,239 | $ | 18,412,740 | $ | 103,555 | $ | 13,863 | $ | 59,179 | $ | 176,597 | $ | 18,589,337 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Total TRUPS includes LOCOM valuation adjustment of $25.5 million. |
20
Note 4 Loans (Continued)
The following table reflects accruing and non-accruing loans by class on June 30, 2015:
Accruing | Non-Accruing | Total Loans |
||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
Current | 30-89 Days Past Due |
90+ Days Past Due |
Total Accruing |
Current | 30-89 Days Past Due |
90+ Days Past Due |
Total Non- Accruing |
||||||||||||||||||||||||||||
Commercial (C&I): |
||||||||||||||||||||||||||||||||||||
General C&I |
$ | 7,673,986 | $ | 4,830 | $ | 199 | $ | 7,679,015 | $ | 13,781 | $ | 2,536 | $ | 14,352 | $ | 30,669 | $ | 7,709,684 | ||||||||||||||||||
Loans to mortgage companies |
1,797,877 | 1,669 | | 1,799,546 | | | 119 | 119 | 1,799,665 | |||||||||||||||||||||||||||
TRUPS (a) |
305,382 | | | 305,382 | | | 12,785 | 12,785 | 318,167 | |||||||||||||||||||||||||||
Purchased credit-impaired loans |
4,153 | 201 | 693 | 5,047 | | | | | 5,047 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total commercial (C&I) |
9,781,398 | 6,700 | 892 | 9,788,990 | 13,781 | 2,536 | 27,256 | 43,573 | 9,832,563 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||||||||||
Income CRE |
1,344,440 | 2,916 | | 1,347,356 | 1,285 | 2,041 | 8,420 | 11,746 | 1,359,102 | |||||||||||||||||||||||||||
Residential CRE |
19,114 | 123 | | 19,237 | | | | | 19,237 | |||||||||||||||||||||||||||
Purchased credit-impaired loans |
22,238 | | 138 | 22,376 | | | | | 22,376 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total commercial real estate |
1,385,792 | 3,039 | 138 | 1,388,969 | 1,285 | 2,041 | 8,420 | 11,746 | 1,400,715 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Consumer real estate: |
||||||||||||||||||||||||||||||||||||
HELOC |
2,150,344 | 22,240 | 9,785 | 2,182,369 | 65,345 | 5,243 | 9,543 | 80,131 | 2,262,500 | |||||||||||||||||||||||||||
R/E installment loans |
2,557,513 | 9,172 | 4,272 | 2,570,957 | 27,294 | 1,873 | 5,227 | 34,394 | 2,605,351 | |||||||||||||||||||||||||||
Purchased credit-impaired loans |
2,012 | 4 | 404 | 2,420 | | | | | 2,420 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total consumer real estate |
4,709,869 | 31,416 | 14,461 | 4,755,746 | 92,639 | 7,116 | 14,770 | 114,525 | 4,870,271 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Permanent mortgage |
444,187 | 5,450 | 5,569 | 455,206 | 15,495 | 1,981 | 14,997 | 32,473 | 487,679 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Credit card & other: |
||||||||||||||||||||||||||||||||||||
Credit card |
182,477 | 1,446 | 1,284 | 185,207 | | | | | 185,207 | |||||||||||||||||||||||||||
Other |
158,530 | 873 | 177 | 159,580 | | | 749 | 749 | 160,329 | |||||||||||||||||||||||||||
Purchased credit-impaired loans |
8 | | | 8 | | | | | 8 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total credit card & other |
341,015 | 2,319 | 1,461 | 344,795 | | | 749 | 749 | 345,544 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total loans, net of unearned income |
$ | 16,662,261 | $ | 48,924 | $ | 22,521 | $ | 16,733,706 | $ | 123,200 | $ | 13,674 | $ | 66,192 | $ | 203,066 | $ | 16,936,772 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Total TRUPS includes LOCOM valuation adjustment of $26.2 million. |
Troubled Debt Restructurings
As part of FHNs ongoing risk management practices, FHN attempts to work with borrowers when necessary to extend or modify loan terms to better align with their current ability to repay. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated separately.
A modification is classified as a TDR if the borrower is experiencing financial difficulty and it is determined that FHN has granted a concession to the borrower. FHN may determine that a borrower is experiencing financial difficulty if the borrower is currently in default on any of its debt, or if it is probable that a borrower may default in the foreseeable future. Many aspects of a borrowers financial situation are assessed when determining whether they are experiencing financial difficulty. Concessions could include extension of the maturity date, reductions of the interest rate (which may make the rate lower than current market for a new loan with similar risk), reduction or forgiveness of accrued interest, or principal forgiveness. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty, and whether a concession has been granted, are subjective in nature and managements judgment is required when determining whether a modification is classified as a TDR.
For all classes within the commercial portfolio segment, TDRs are typically modified through forbearance agreements (generally 6 to 12 months). Forbearance agreements could include reduced interest rates, reduced payments, release of guarantor, or entering into short sale agreements. FHNs proprietary modification programs for consumer loans are generally structured using parameters of U.S. government-sponsored programs such as Home Affordable Modification Program (HAMP). Within the HELOC and R/E installment loans classes of the consumer portfolio segment, TDRs are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 1 percent for up to 5 years) and a possible maturity date extension to reach an affordable housing debt ratio. After 5 years, the interest rate will increase 2 percent per year until the original interest rate prior to modification is achieved. Permanent mortgage TDRs are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 2 percent for up to 5 years) and a possible maturity date extension to reach an affordable housing debt ratio. After 5 years the interest rate steps up 1 percent every year until it reaches the Federal Home Loan Mortgage Corporation Weekly Survey Rate cap. Contractual maturities may be extended to 40 years on permanent mortgages and to 30 years for consumer real estate loans. Within the
21
Note 4 Loans (Continued)
credit card class of the consumer portfolio segment, TDRs are typically modified through either a short-term credit card hardship program or a longer-term credit card workout program. In the credit card hardship program, borrowers may be granted rate and payment reductions for 6 months to 1 year. In the credit card workout program, customers are granted a rate reduction to 0 percent and term extensions for up to 5 years to pay off the remaining balance.
Despite the absence of a loan modification, the discharge of personal liability through bankruptcy proceedings is considered a concession. As a result, FHN classifies all non-reaffirmed residential real estate loans discharged in Chapter 7 bankruptcy as nonaccruing TDRs.
On June 30, 2016 and 2015, FHN had $299.3 million and $310.6 million portfolio loans classified as TDRs, respectively. For TDRs in the loan portfolio, FHN had loan loss reserves of $51.2 million and $61.0 million, or 17 percent as of June 30, 2016, and 20 percent as of June 30, 2015. Additionally, $73.8 million and $80.8 million of loans held-for-sale as of June 30, 2016 and 2015, respectively, were classified as TDRs.
The following tables reflect portfolio loans that were classified as TDRs during the three and six months ended June 30, 2016 and 2015:
Three Months Ended June 30, 2016 | Six Months Ended June 30, 2016 | |||||||||||||||||||||||
(Dollars in thousands) |
Number | Pre-Modification Outstanding Recorded Investment |
Post-Modification Outstanding Recorded Investment |
Number | Pre-Modification Outstanding Recorded Investment |
Post-Modification Outstanding Recorded Investment |
||||||||||||||||||
Commercial (C&I): |
||||||||||||||||||||||||
General C&I |
4 | $ | 19,175 | $ | 18,067 | 5 | $ | 19,883 | $ | 18,775 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total commercial (C&I) |
4 | 19,175 | 18,067 | 5 | 19,883 | 18,775 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Consumer real estate: |
||||||||||||||||||||||||
HELOC |
53 | 5,258 | 5,246 | 152 | 12,698 | 12,616 | ||||||||||||||||||
R/E installment loans |
19 | 3,326 | 3,614 | 34 | 4,224 | 4,509 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total consumer real estate |
72 | 8,584 | 8,860 | 186 | 16,922 | 17,125 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Permanent mortgage |
4 | 841 | 840 | 4 | 841 | 840 | ||||||||||||||||||
Credit card & other |
1 | 2 | 2 | 5 | 21 | 20 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total troubled debt restructurings |
81 | $ | 28,602 | $ | 27,769 | 200 | $ | 37,667 | $ | 36,760 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2015 | Six Months Ended June 30, 2015 | |||||||||||||||||||||||
(Dollars in thousands) |
Number | Pre-Modification Outstanding Recorded Investment |
Post-Modification Outstanding Recorded Investment |
Number | Pre-Modification Outstanding Recorded Investment |
Post-Modification Outstanding Recorded Investment |
||||||||||||||||||
Commercial (C&I): |
||||||||||||||||||||||||
General C&I |
| $ | | $ | | 2 | $ | 1,388 | $ | 1,325 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total commercial (C&I) |
| | | 2 | 1,388 | 1,325 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Consumer real estate: |
||||||||||||||||||||||||
HELOC |
65 | 7,237 | 7,147 | 102 | 10,964 | 10,854 | ||||||||||||||||||
R/E installment loans |
22 | 1,912 | 1,916 | 38 | 3,266 | 3,293 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total consumer real estate |
87 | 9,149 | 9,063 | 140 | 14,230 | 14,147 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Permanent mortgage |
4 | 1,718 | 1,733 | 6 | 2,039 | 2,054 | ||||||||||||||||||
Credit card & other |
6 | 20 | 19 | 12 | 48 | 46 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total troubled debt restructurings |
97 | $ | 10,887 | $ | 10,815 | 160 | $ | 17,705 | $ | 17,572 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
22
Note 4 Loans (Continued)
The following tables present TDRs which re-defaulted during the three and six months ended June 30, 2016 and 2015, and as to which the modification occurred 12 months or less prior to the re-default. For purposes of this disclosure, FHN generally defines payment default as 30 or more days past due.
Three Months Ended June 30, 2016 |
Six Months Ended June 30, 2016 |
|||||||||||||||
(Dollars in thousands) |
Number | Recorded Investment |
Number | Recorded Investment |
||||||||||||
Commercial real estate: |
||||||||||||||||
Residential CRE |
| $ | | | $ | | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total commercial real estate |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Consumer real estate: |
||||||||||||||||
HELOC |
1 | 102 | 2 | 138 | ||||||||||||
R/E installment loans |
1 | 180 | 1 | 180 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total consumer real estate |
2 | 282 | 3 | 318 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Credit card & other |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total troubled debt restructurings |
2 | $ | 282 | 3 | $ | 318 | ||||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2015 |
Six Months Ended June 30, 2015 |
|||||||||||||||
(Dollars in thousands) |
Number | Recorded Investment |
Number | Recorded Investment |
||||||||||||
Commercial real estate: |
||||||||||||||||
Residential CRE |
1 | $ | 896 | 1 | $ | 896 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total commercial real estate |
1 | 896 | 1 | 896 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Consumer real estate: |
||||||||||||||||
HELOC |
6 | 278 | 7 | 308 | ||||||||||||
R/E installment loans |
1 | 26 | 2 | 112 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total consumer real estate |
7 | 304 | 9 | 420 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Credit card & other |
2 | 5 | 3 | 8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total troubled debt restructurings |
10 | $ | 1,205 | 13 | $ | 1,324 | ||||||||||
|
|
|
|
|
|
|
|
23
Note 5 Allowance for Loan Losses
The ALLL includes the following components: reserves for commercial loans evaluated based on pools of credit graded loans and reserves for pools of smaller-balance homogeneous consumer loans, both determined in accordance with ASC 450-20-50. The reserve factors applied to these pools are an estimate of probable incurred losses based on managements evaluation of historical net losses from loans with similar characteristics and are subject to qualitative adjustments by management to reflect current events, trends, and conditions (including economic considerations and trends). The pace of the economic recovery, performance of the housing market, unemployment levels, labor participation rate, regulatory guidance, and both positive and negative portfolio segment-specific trends, are examples of additional factors considered by management in determining the ALLL. Additionally, management considers the inherent uncertainty of quantitative models that are driven by historical loss data. Management evaluates the periods of historical losses that are the basis for the loss rates used in the quantitative models and selects historical loss periods that are believed to be the most reflective of losses inherent in the loan portfolio as of the balance sheet date. Management also periodically reviews analysis of the loss emergence period which is the amount of time it takes for a loss to be confirmed (initial charge-off) after a loss event has occurred. FHN performs extensive studies as it relates to the historical loss periods used in the model and the loss emergence period and model assumptions are adjusted accordingly. The ALLL also includes reserves determined in accordance with ASC 310-10-35 for loans determined by management to be individually impaired and an allowance associated with PCI loans. See Note 1 Summary of Significant Accounting Policies and Note 5 Allowance for Loan Losses in the Notes to Consolidated Financial Statements on Form 10-K for the year ended December 31, 2015, for additional information about the policies and methodologies used in the aforementioned components of the ALLL.
24
Note 5 Allowance for Loan Losses (Continued)
The following table provides a rollforward of the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2016 and 2015:
(Dollars in thousands) |
C&I | Commercial Real Estate |
Consumer Real Estate |
Permanent Mortgage |
Credit Card and Other |
Total | ||||||||||||||||||
Balance as of April 1, 2015 |
$ | 67,652 | $ | 17,665 | $ | 109,245 | $ | 20,186 | $ | 13,580 | $ | 228,328 | ||||||||||||
Charge-offs |
(4,976 | ) | (888 | ) | (6,903 | ) | (809 | ) | (5,858 | ) | (19,434 | ) | ||||||||||||
Recoveries |
926 | 153 | 7,851 | 671 | 856 | 10,457 | ||||||||||||||||||
Provision/(provision credit) for loan losses |
15,148 | 4,562 | (24,736 | ) | 2,329 | 4,697 | 2,000 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of June 30, 2015 |
78,750 | 21,492 | 85,457 | 22,377 | 13,275 | 221,351 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of January 1, 2015 |
$ | 67,011 | $ | 18,574 | $ | 113,011 | $ | 19,122 | $ | 14,730 | $ | 232,448 | ||||||||||||
Charge-offs |
(8,531 | ) | (1,675 | ) | (15,440 | ) | (1,993 | ) | (9,794 | ) | (37,433 | ) | ||||||||||||
Recoveries |
2,879 | 844 | 12,575 | 1,289 | 1,749 | 19,336 | ||||||||||||||||||
Provision/(provision credit) for loan losses |
17,391 | 3,749 | (24,689 | ) | 3,959 | 6,590 | 7,000 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of June 30, 2015 |
78,750 | 21,492 | 85,457 | 22,377 | 13,275 | 221,351 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Allowance individually evaluated for impairment |
12,927 | 635 | 41,406 | 17,857 | 155 | 72,980 | ||||||||||||||||||
Allowance collectively evaluated for impairment |
65,646 | 18,743 | 43,558 | 4,520 | 13,120 | 145,587 | ||||||||||||||||||
Allowance purchased credit-impaired loans |
177 | 2,114 | 493 | | | 2,784 | ||||||||||||||||||
Loans, net of unearned as of June 30, 2015: |
||||||||||||||||||||||||
Individually evaluated for impairment |
55,736 | 12,493 | 172,097 | 107,157 | 418 | 347,901 | ||||||||||||||||||
Collectively evaluated for impairment |
9,771,780 | 1,365,846 | 4,695,754 | 380,522 | 345,118 | 16,559,020 | ||||||||||||||||||
Purchased credit-impaired loans |
5,047 | 22,376 | 2,420 | | 8 | 29,851 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total loans, net of unearned income |
$ | 9,832,563 | $ | 1,400,715 | $ | 4,870,271 | $ | 487,679 | $ | 345,544 | $ | 16,936,772 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of April 1, 2016 |
$ | 80,887 | $ | 25,626 | $ | 67,321 | $ | 18,754 | $ | 11,446 | $ | 204,034 | ||||||||||||
Charge-offs |
(7,869 | ) | (51 | ) | (6,582 | ) | (349 | ) | (3,445 | ) | (18,296 | ) | ||||||||||||
Recoveries |
1,602 | 909 | 6,082 | 484 | 992 | 10,069 | ||||||||||||||||||
Provision/(provision credit) for loan losses |
6,352 | 3,780 | (7,740 | ) | (1,289 | ) | 2,897 | 4,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of June 30, 2016 |
80,972 | 30,264 | 59,081 | 17,600 | 11,890 | 199,807 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of January 1, 2016 |
$ | 73,637 | $ | 25,159 | $ | 80,614 | $ | 18,947 | $ | 11,885 | $ | 210,242 | ||||||||||||
Charge-offs |
(14,394 | ) | (693 | ) | (13,508 | ) | (461 | ) | (6,852 | ) | (35,908 | ) | ||||||||||||
Recoveries |
2,382 | 1,131 | 11,817 | 1,263 | 1,880 | 18,473 | ||||||||||||||||||
Provision/(provision credit) for loan losses |
19,347 | 4,667 | (19,842 | ) | (2,149 | ) | 4,977 | 7,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of June 30, 2016 |
80,972 | 30,264 | 59,081 | 17,600 | 11,890 | 199,807 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Allowance individually evaluated for impairment |
4,076 | 434 | 31,911 | 15,583 | 147 | 52,151 | ||||||||||||||||||
Allowance collectively evaluated for impairment |
76,786 | 29,449 | 26,834 | 2,017 | 11,743 | 146,829 | ||||||||||||||||||
Allowance purchased credit-impaired loans |
110 | 381 | 336 | | | 827 | ||||||||||||||||||
Loans, net of unearned as of June 30, 2016: |
||||||||||||||||||||||||
Individually evaluated for impairment |
51,447 | 8,298 | 163,339 | 95,882 | 356 | 319,322 | ||||||||||||||||||
Collectively evaluated for impairment |
11,117,452 | 1,951,306 | 4,475,856 | 343,132 | 360,275 | 18,248,021 | ||||||||||||||||||
Purchased credit-impaired loans |
10,546 | 9,808 | 1,584 | | 56 | 21,994 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total loans, net of unearned income |
$ | 11,179,445 | $ | 1,969,412 | $ | 4,640,779 | $ | 439,014 | $ | 360,687 | $ | 18,589,337 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
25
The following is a summary of goodwill and other intangible assets, net of accumulated amortization, included in the Consolidated Condensed Statements of Condition:
(Dollars in thousands) |
Goodwill | Other Intangible Assets (a) |
||||||
December 31, 2014 |
$ | 145,932 | $ | 29,518 | ||||
Amortization expense |
| (2,596 | ) | |||||
|
|
|
|
|||||
June 30, 2015 |
$ | 145,932 | $ | 26,922 | ||||
|
|
|
|
|||||
December 31, 2015 (b) |
$ | 191,307 | $ | 26,215 | ||||
Amortization expense |
| (2,599 | ) | |||||
|
|
|
|
|||||
June 30, 2016 |
$ | 191,307 | $ | 23,616 | ||||
|
|
|
|
(a) | Represents customer lists, acquired contracts, core deposit intangibles, and covenants not to compete. |
(b) | The increase in goodwill was related to the TAF acquisition in fourth quarter 2015. |
The gross carrying amount and accumulated amortization of other intangible assets subject to amortization is $72.3 million and $48.7 million, respectively on June 30, 2016. Estimated aggregate amortization expense is expected to be $2.6 million for the remainder of 2016, and $4.9 million, $4.7 million, $4.5 million, $1.7 million, and $1.6 million for the twelve-month periods of 2017, 2018, 2019, 2020, and 2021, respectively.
Gross goodwill, accumulated impairments, and accumulated divestiture related write-offs were determined beginning January 1, 2012, when a change in accounting requirements resulted in goodwill being assessed for impairment rather than being amortized. Gross goodwill of $200.0 million with accumulated impairments and accumulated divestiture related write-offs of $114.1 million and $85.9 million, respectively, were previously allocated to the non-strategic segment, resulting in $0 net goodwill allocated to the non-strategic segment as of June 30, 2015 and 2016. The regional bank and fixed income segments do not have any accumulated impairments or divestiture related write-offs. The following is a summary of goodwill by reportable segment included in the Consolidated Condensed Statements of Condition as of and for the six months ended June 30, 2015 and 2016.
(Dollars in thousands) |
Regional Banking |
Fixed Income |
Total | |||||||||
December 31, 2014 |
$ | 47,928 | $ | 98,004 | $ | 145,932 | ||||||
|
|
|
|
|
|
|||||||
Additions |
| | | |||||||||
Impairments |
| | | |||||||||
Divestitures |
| | | |||||||||
|
|
|
|
|
|
|||||||
June 30, 2015 |
$ | 47,928 | $ | 98,004 | $ | 145,932 | ||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||
December 31, 2015 (a) |
$ | 93,303 | $ | 98,004 | $ | 191,307 | ||||||
|
|
|
|
|
|
|||||||
Additions |
| | | |||||||||
Impairments |
| | | |||||||||
Divestitures |
| | | |||||||||
|
|
|
|
|
|
|||||||
June 30, 2016 |
$ | 93,303 | $ | 98,004 | $ | 191,307 | ||||||
|
|
|
|
|
|
(a) | The increase in goodwill was related to the TAF acquisition in fourth quarter 2015. |
26
Note 7 Other Income and Other Expense
Following is detail of All other income and commissions and All other expense as presented in the Consolidated Condensed Statements of Income:
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
All other income and commissions: |
||||||||||||||||
ATM interchange fees |
$ | 2,879 | $ | 3,025 | $ | 5,837 | $ | 5,786 | ||||||||
Electronic banking fees |
1,381 | 1,459 | 2,778 | 2,887 | ||||||||||||
Letter of credit fees |
1,115 | 1,532 | 2,176 | 2,655 | ||||||||||||
Deferred compensation (a) |
795 | (35 | ) | 1,124 | 998 | |||||||||||
Mortgage banking |
598 | 376 | 1,871 | 1,960 | ||||||||||||
Other |
2,005 | 6,421 | 5,076 | 9,546 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 8,773 | $ | 12,778 | $ | 18,862 | $ | 23,832 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
All other expense: |
||||||||||||||||
Litigation and regulatory matters |
$ | 26,000 | $ | | $ | 25,525 | $ | 162,500 | ||||||||
Travel and entertainment |
2,495 | 2,632 | 4,557 | 4,246 | ||||||||||||
Customer relations |
1,483 | 1,505 | 3,362 | 2,819 | ||||||||||||
Employee training and dues |
1,338 | 1,449 | 2,728 | 2,581 | ||||||||||||
Supplies |
930 | 880 | 1,956 | 1,807 | ||||||||||||
Tax credit investments |
831 | 549 | 1,537 | 944 | ||||||||||||
Miscellaneous loan costs |
565 | 734 | 1,282 | 1,095 | ||||||||||||
Other |
10,624 | 9,307 | 22,343 | 17,730 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 44,266 | $ | 17,056 | $ | 63,290 | $ | 193,722 | ||||||||
|
|
|
|
|
|
|
|
Certain previously reported amounts have been reclassified to agree with current presentation.
(a) | Deferred compensation market value adjustments are mirrored by adjustments to employee compensation, incentives, and benefits expense. |
27
Note 8 Components of Other Comprehensive Income/(loss)
The following table provides the changes in accumulated other comprehensive income/(loss) by component, net of tax, for the three and six months ended June 30, 2016 and 2015:
(Dollars in thousands) |
Securities AFS |
Cash Flow Hedges |
Pension and Post- retirement Plans |
Total | ||||||||||||
Balance as of April 1, 2016 |
$ | 42,554 | $ | 3,465 | $ | (216,460 | ) | $ | (170,441 | ) | ||||||
Net unrealized gains/(losses) |
16,037 | 1,600 | | 17,637 | ||||||||||||
Amounts reclassified from AOCI |
| (374 | ) | 844 | 470 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss) |
16,037 | 1,226 | 844 | 18,107 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of June 30, 2016 |
$ | 58,591 | $ | 4,691 | $ | (215,616 | ) | $ | (152,334 | ) | ||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of January 1, 2016 |
$ | 3,394 | $ | | $ | (217,586 | ) | $ | (214,192 | ) | ||||||
Net unrealized gains/(losses) |
56,217 | 5,439 | | 61,656 | ||||||||||||
Amounts reclassified from AOCI |
(1,020 | ) | (748 | ) | 1,970 | 202 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss) |
55,197 | 4,691 | 1,970 | 61,858 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of June 30, 2016 |
$ | 58,591 | $ | 4,691 | $ | (215,616 | ) | $ | (152,334 | ) | ||||||
|
|
|
|
|
|
|
|
|||||||||
(Dollars in thousands) |
||||||||||||||||
Balance as of April 1, 2015 |
$ | 36,585 | $ | | $ | (205,744 | ) | $ | (169,159 | ) | ||||||
Net unrealized gains/(losses) |
(20,100 | ) | | | (20,100 | ) | ||||||||||
Amounts reclassified from AOCI |
| | 1,011 | 1,011 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss) |
(20,100 | ) | | 1,011 | (19,089 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of June 30, 2015 |
$ | 16,485 | $ | | $ | (204,733 | ) | $ | (188,248 | ) | ||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of January 1, 2015 |
$ | 18,581 | $ | | $ | (206,827 | ) | $ | (188,246 | ) | ||||||
Net unrealized gains/(losses) |
(2,096 | ) | | | (2,096 | ) | ||||||||||
Amounts reclassified from AOCI |
| | 2,094 | 2,094 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss) |
(2,096 | ) | | 2,094 | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of June 30, 2015 |
$ | 16,485 | $ | | $ | (204,733 | ) | $ | (188,248 | ) | ||||||
|
|
|
|
|
|
|
|
28
Note 8 Components of Other Comprehensive Income/(loss) (Continued)
Reclassifications from AOCI, and related tax effects, were as follows:
(Dollars in thousands) |
Three Months Ended June 30 |
Six Months Ended June 30 |
||||||||||||||||
Details about AOCI |
2016 | 2015 | 2016 | 2015 | Affected line item in the statement where net income is presented | |||||||||||||
Securities AFS: |
||||||||||||||||||
Realized (gains)/losses on securities AFS |
$ | | $ | | $ | (1,654 | ) | $ | | Debt securities gains/(losses), net | ||||||||
Tax expense/(benefit) |
| | 634 | | Provision/(benefit) for income taxes | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
| | (1,020 | ) | | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Cash flow hedges: |
||||||||||||||||||
Realized (gains)/losses on cash flow hedges |
(607 | ) | | (1,213 | ) | | Interest and fees on loans | |||||||||||
Tax expense/(benefit) |
233 | | 465 | | Provision/(benefit) for income taxes | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
(374 | ) | | (748 | ) | | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Pension and Postretirement Plans: |
||||||||||||||||||
Amortization of prior service cost, transition asset/obligation, and net actuarial gain/(loss) |
1,369 | 1,647 | 3,195 | 3,412 | Employee compensation, incentives, and benefits | |||||||||||||
Tax expense/(benefit) |
(525 | ) | (636 | ) | (1,225 | ) | (1,318 | ) | Provision/(benefit) for income taxes | |||||||||
|
|
|
|
|
|
|
|
|||||||||||
844 | 1,011 | 1,970 | 2,094 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total reclassification from AOCI |
$ | 470 | $ | 1,011 | $ | 202 | $ | 2,094 | ||||||||||
|
|
|
|
|
|
|
|
29
The following table provides reconciliations of net income to net income available to common shareholders and the difference between average basic common shares outstanding and average diluted common shares outstanding:
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars and shares in thousands, except per share data) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income/(loss) |
$ | 60,940 | $ | 54,957 | $ | 113,153 | $ | (17,448 | ) | |||||||
Net income attributable to noncontrolling interest |
2,852 | 2,851 | 5,703 | 5,609 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income/(loss) attributable to controlling interest |
58,088 | 52,106 | 107,450 | (23,057 | ) | |||||||||||
Preferred stock dividends |
1,550 | 1,550 | 3,100 | 3,100 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income/(loss) available to common shareholders |
$ | 56,538 | $ | 50,556 | $ | 104,350 | $ | (26,157 | ) | |||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares outstanding basic |
231,573 | 232,800 | 233,112 | 232,808 | ||||||||||||
Effect of dilutive securities (a) |
2,003 | 1,869 | 2,009 | | ||||||||||||
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Weighted average common shares outstanding diluted |
233,576 | 234,669 | 235,121 | 232,808 | ||||||||||||
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Net income/(loss) per share available to common shareholders |
$ | 0.24 | $ | 0.22 | $ | 0.45 | $ | (0.11 | ) | |||||||
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Diluted income/(loss) per share available to common shareholders |
$ | 0.24 | $ | 0.22 | $ | 0.44 | $ | (0.11 | ) | |||||||
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(a) | For the six months ended June 30, 2015 all potential common shares were antidilutive due to the net loss available to common shareholders. |
The following table presents outstanding options and other equity awards that were excluded from the calculation of diluted earnings per share because they were either anti-dilutive (the exercise price was higher than the weighted-average market price for the period) or the performance conditions have not been met:
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Shares in thousands) |
2016 | 2015 | 2016 | 2015 (a) | ||||||||||||
Anti-dilutive stock options |
3,842 | 3,597 | 3,804 | 7,763 | ||||||||||||
Weighted average exercise price of anti-dilutive stock options |
$ | 22.68 | $ | 24.26 | $ | 23.06 | $ | 17.17 | ||||||||
Anti-dilutive other equity awards |
959 | 51 | 867 | 2,167 |
(a) | For the six months ended June 30, 2015 all potential common shares were antidilutive due to the net loss available to common shareholders. |
30
Note 10 Contingencies and Other Disclosures
CONTINGENCIES
Contingent Liabilities Overview
Contingent liabilities arise in the ordinary course of business. Often they are related to lawsuits, arbitration, mediation, and other forms of litigation. Various litigation matters are threatened or pending against FHN and its subsidiaries. Also, FHN at times receives requests for information, subpoenas, or other inquiries from federal, state, and local regulators, from other government authorities, and from other parties concerning various matters relating to FHNs current or former lines of business. Certain matters of that sort are pending at this time, and FHN is cooperating in those matters. Pending and threatened litigation matters sometimes are resolved in court or before an arbitrator, and sometimes are settled by the parties. Regardless of the manner of resolution, frequently the most significant changes in status of a matter occur over a short time period, often following a lengthy period of little substantive activity. In view of the inherent difficulty of predicting the outcome of these matters, particularly where the claimants seek very large or indeterminate damages, or where the cases present novel legal theories or involve a large number of parties, or where claims or other actions may be possible but have not been brought, FHN cannot reasonably determine what the eventual outcome of the matters will be, what the timing of the ultimate resolution of these matters may be, or what the eventual loss or impact related to each matter may be. FHN establishes loss contingency liabilities for litigation matters when loss is both probable and reasonably estimable as prescribed by applicable financial accounting guidance. If loss for a matter is probable and a range of possible loss outcomes is the best estimate available, accounting guidance requires a liability to be established at the low end of the range.
Based on current knowledge, and after consultation with counsel, management is of the opinion that loss contingencies related to threatened or pending litigation matters should not have a material adverse effect on the consolidated financial condition of FHN, but may be material to FHNs operating results for any particular reporting period depending, in part, on the results from that period.
Material Loss Contingency Matters
As used in this Note, material loss contingency matters generally fall into at least one of the following categories: (i) FHN has determined material loss to be probable and has established a material loss liability in accordance with applicable financial accounting guidance, other than matters reported as having been substantially settled or otherwise substantially resolved; (ii) FHN has determined material loss to be probable but is not reasonably able to estimate an amount or range of material loss liability; or (iii) FHN has determined that material loss is not probable but is reasonably possible, and that the amount or range of that reasonably possible material loss is estimable. As defined in applicable accounting guidance, loss is reasonably possible if there is more than a remote chance of a material loss outcome for FHN. Set forth below are disclosures for certain pending or threatened litigation matters, including all matters mentioned in (i) or (ii) and certain matters mentioned in (iii). In addition, certain other matters are discussed relating to FHNs former mortgage origination and servicing businesses. In all litigation matters discussed, unless settled or otherwise resolved, FHN believes it has meritorious defenses and intends to pursue those defenses vigorously.
FHN reassesses the liability for litigation matters each quarter as the matters progress. At June 30, 2016, the aggregate amount of liabilities established for all loss contingency matters was $40.4 million. These liabilities are separate from those discussed under the heading Repurchase and Foreclosure Liability below.
In each material loss contingency matter, except as otherwise noted, there is more than a remote chance that any of the following outcomes will occur: the plaintiff will substantially prevail; the defense will substantially prevail; the plaintiff will prevail in part; or the matter will be settled by the parties. At June 30, 2016, FHN estimates that for all material loss contingency matters, estimable reasonably possible losses in future periods in excess of currently established liabilities could aggregate in a range from zero to approximately $73 million.
As a result of the general uncertainties discussed above and the specific uncertainties discussed for each matter mentioned below, it is possible that the ultimate future loss experienced by FHN for any particular matter may materially exceed the amount, if any, of currently established liability for that matter. That possibility exists both for matters included in the estimated reasonably possible loss (RPL) range mentioned above and for matters not included in that range.
Certain Matters Included in RPL Range
Debit Transaction Sequencing Litigation Matter. FTBNA is a defendant in a putative class action lawsuit concerning overdraft fees charged in connection with debit card transactions. A key claim is that the method used to order or sequence the transactions posted each day was improper. The case is styled as Hawkins v. First Tennessee Bank National Association, before the Circuit Court for Shelby County, Tennessee, Case No. CT-004085-11. The plaintiff seeks actual damages of at least $5 million, unspecified restitution of fees charged, and unspecified punitive damages, among other things. In July 2016 FHN and the plaintiff submitted a notice of
31
Note 10 Contingencies and Other Disclosures (Continued)
proposed settlement to the court. That proposed settlement is subject to negotiation of a definitive settlement agreement and a court approval process involving several steps and significant remaining uncertainty. FHNs estimate of RPL for this matter is subject to significant uncertainties regarding: whether the class contemplated by the proposed settlement will be certified by the court; whether outside parties will object or intervene in the approval process; and whether the court will determine the settlement to be fair.
RPL-Included FH Proprietary Securitization Matters. FHN, along with multiple co-defendants, is defending lawsuits brought by investors which claim that the offering documents under which certificates relating to First Horizon branded securitizations were sold to them were materially deficient. FHN can estimate reasonably possible loss for two of those matters: (1) Federal Deposit Insurance Corporation (FDIC) as receiver for Colonial Bank, in the U.S. District Court for the Middle District of Alabama (Case No. CV-12-791-WKW-WC); and (2) FDIC as receiver for Colonial Bank, in the U.S. District Court for the Southern District of New York (Case No. 12 Civ. 6166 (LLS)(MHD)). The plaintiff in those suits claims to have purchased (and later sold) certificates in a number of separate securitizations and demands damages and prejudgment interest, among several remedies sought. The RPL estimates for these matters are subject to significant uncertainties regarding: the dollar amounts claimed; the potential remedies that might be available or awarded; the outcome of any settlement discussions; the ultimate outcome of potentially significant motions; the availability of significantly dispositive defenses; and the incomplete status of the discovery process. FDICs claims relate to alleged purchases totaling $145.7 million. Additional information concerning FHNs former mortgage businesses is provided below in Obligations from Legacy Mortgage Businesses.
Legacy Mortgage Matters Excluded from RPL Range
As mentioned above, FHN is directly defending two lawsuits which claim that the offering documents under which certificates relating to securitizations were sold were materially deficient. Underwriters are co-defendants and have demanded, under provisions in the applicable underwriting agreements, that FHN indemnify them for their expenses and any losses they may incur. In addition, FHN has received indemnity demands from underwriters in certain other suits as to which investors claim to have purchased certificates in FH proprietary securitizations but as to which FHN has not been named a defendant.
For the two pending lawsuits FHN is able to estimate RPL, as mentioned above. For the indemnity claims FHN is unable to estimate an RPL range due to significant uncertainties regarding: claims as to which the claimant specifies no dollar amount; the potential remedies that might be available or awarded; the availability of significantly dispositive defenses such as statutes of limitations or repose; the outcome of potentially dispositive early-stage motions such as motions to dismiss; the incomplete status of the discovery process; the lack of a precise statement of damages; and lack of precedent claims. The alleged purchase prices of the certificates subject to the indemnification requests total $510.1 million.
FHN has additional potential exposures related to its former mortgage businesses. A few of those matters have become litigation which FHN currently estimates are immaterial, some are non-litigation claims or threats, some are mere requests for information, and in some areas FHN has no indication of any active or threatened dispute. Some of those matters might eventually result in loan repurchases or make-whole payments and could be included in the repurchase liability discussed below, but none are included in the material loss contingency liability mentioned above. None are included in the RPL range mentioned above. Additional information concerning such exposures is provided below in Obligations from Legacy Mortgage Businesses.
Material Gain Contingency Matter
In second quarter 2015 FHN reached an agreement with DOJ and HUD to settle potential claims related to FHNs underwriting and origination of loans insured by FHA. Under that agreement FHN paid $212.5 million. FHN believes that certain insurance policies, having an aggregate policy limit of $75 million, provide coverage for FHNs losses and related costs. The insurers have denied and/or reserved rights to deny coverage. FHN has brought suit against the insurers to enforce the policies under Tennessee law. In connection with this litigation the previously recognized expenses associated with the settled matter may be recouped in part. Under applicable financial accounting guidance FHN has determined that although material gain from this litigation is not probable, there is a reasonably possible (more than remote) chance of a material gain outcome for FHN. FHN cannot determine a probable outcome that may result from this matter because of the uncertainty of the potential outcomes of the legal proceedings and also due to significant uncertainties regarding: legal interpretation of the relevant contracts; potential remedies that might be available or awarded; the ultimate effect of counterclaims asserted by the defendants; and incomplete discovery. Additional information concerning FHNs former mortgage businesses is provided below in Obligations from Legacy Mortgage Businesses.
Obligations from Legacy Mortgage Businesses
Several matters mentioned above stem from FHNs former mortgage origination and servicing businesses. FHN retains potential for further exposure, in addition to those matters, from those former businesses. The remainder of this Contingencies section provides context and other information to enhance an understanding of those matters and exposures.
32
Note 10 Contingencies and Other Disclosures (Continued)
Overview
Prior to September 2008 FHN originated loans through its legacy mortgage business, primarily first lien home loans, with the intention of selling them. Sales typically were effected either as non-recourse whole-loan sales or through non-recourse proprietary securitizations. Conventional conforming single-family residential mortgage loans were sold predominately to two GSEs: Fannie Mae and Freddie Mac. Also, federally insured or guaranteed whole loans were pooled, and payments to investors were guaranteed through Ginnie Mae. Many mortgage loan originations, especially nonconforming mortgage loans, were sold to investors, or certificate-holders, predominantly through FH proprietary securitizations but also, to a lesser extent, through other whole loans sold to private non-Agency purchasers. FHN used only one trustee for all of its FH proprietary securitizations. FHN also originated mortgage loans eligible for FHA insurance or VA guaranty. In addition, FHN originated and sold HELOCs and second lien mortgages through other whole loans sold to private purchasers and, to a lesser extent, through FH proprietary securitizations. Currently, only one FH securitization of HELOCs remains outstanding.
For non-recourse loan sales, FHN has exposure for repurchase of loans, make-whole damages, or other related damages, arising from claims that FHN breached its representations and warranties made at closing to the purchasers, including GSEs, other whole loan purchasers, and the trustee of FH proprietary securitizations.
During the time these legacy activities were conducted, FHN frequently sold mortgage loans with servicing retained. As a result, FHN accumulated substantial amounts of MSR on its balance sheet, as well as contractual servicing obligations and related deposits and receivables. FHN conducted a significant servicing business under its First Horizon Home Loans brand.
MI was required by GSE rules for certain of the loans sold to GSEs and was also provided for certain of the loans that were securitized. MI generally was provided for first lien loans sold or securitized having an LTV ratio at origination of greater than 80 percent.
In 2007, market conditions deteriorated to the point where mortgage-backed securitizations no longer could be sold economically; FHNs last securitization occurred that year. FHN continued selling mortgage loans to GSEs until August 31, 2008, when FHN sold its national mortgage origination and servicing platforms along with a portion of its servicing assets and obligations. FHN contracted to have its remaining servicing obligations sub-serviced. Since the platform sale FHN has sold substantially all remaining servicing assets and obligations.
Certain mortgage-related terms used in this Contingencies section are defined in Mortgage-Related Glossary at the end of this Overview.
Repurchase and Make-Whole Obligations
Starting in 2009, FHN received a high number of claims either to repurchase loans from the purchaser or to pay the purchaser to make them whole for economic losses incurred. These claims have been driven primarily by loan delinquencies. In repurchase or make-whole claims a loan purchaser typically asserts that specified loans violated representations and warranties FHN made when the loans were sold. A significant majority of claims received overall have come from GSEs, and the remainder are from purchasers of other whole loan sales. FHN has not received a loan repurchase or make-whole claim from the FH proprietary securitization trustee.
Generally, FHN reviews each claim and MI cancellation notice individually. Those responses include appeal, provide additional information, deny the claim (rescission), repurchase the loan or remit a make-whole payment, or reflect cancellation of MI.
After several years resolving repurchase and make-whole claims with each GSE on a loan-by-loan basis, in 2013 and 2014 FHN entered into DRAs with the GSEs, resolving at once a large fraction of pending and potential future claims. Starting in 2014, the overall number of such claims diminished substantially, primarily as a result of the DRAs. Each DRA resolved obligations associated with loans originated from 2000 to 2008, but certain obligations and loans were excluded. Under each DRA, FHN remains responsible for repurchase obligations related to certain excluded defects (such as title defects and violations of the GSEs Charter Act) and FHN continues to have loan repurchase or monetary compensation obligations under the DRAs related to private mortgage insurance rescissions, cancellations, and denials (with certain exceptions). FHN also has exposure related to loans where there has been a prior bulk sale of servicing, as well as certain other whole-loan sales. With respect to loans where there has been a prior bulk sale of servicing, FHN is not responsible for MI cancellations and denials to the extent attributable to the acts of the current servicer.
While large portions of repurchase claims from the GSEs were settled with the DRAs, large-scale settlement with non-Agency claimants is not practical. Those claims are resolved case by case or, occasionally, with less-comprehensive settlements. In second quarter 2016, in the largest such settlement to date, FHN settled certain repurchase claims which reduced the repurchase and foreclosure liability to $68.1 million at June 30, 2016 and resulted in a reversal of certain prior provision expense. Repurchase claims that are not resolved by the parties could become litigation.
33
Note 10 Contingencies and Other Disclosures (Continued)
FH Proprietary Securitization Actions
FHN has potential financial exposure from FH proprietary securitizations outside of the repurchase/make-whole process. Several investors in certificates sued FHN and others starting in 2009, and several underwriters or other counterparties have demanded that FHN indemnify and defend them in securitization lawsuits. The pending suits generally assert that disclosures made to investors in the offering and sale of certificates were legally deficient.
Servicing Obligations
FHNs national servicing business was sold as part of the platform sale in 2008. A significant amount of MSR was sold at that time, and a significant amount was retained. The related servicing activities, including foreclosure and loss mitigation practices, not sold in 2008 were outsourced through a three-year subservicing arrangement (the 2008 subservicing agreement) with the platform buyer (the 2008 subservicer). The 2008 subservicing agreement expired in 2011 when FHN entered into a replacement agreement with a new subservicer (the 2011 subservicer). In fourth quarter 2013, FHN contracted to sell a substantial majority of its remaining servicing obligations and servicing assets (including advances) to the 2011 subservicer. The servicing was transferred to the buyer in stages, and was substantially completed in first quarter 2014. The servicing still retained by FHN continues to be subserviced by the 2011 subservicer.
As servicer, FHN had contractual obligations to the owners of the loans, primarily GSEs and securitization trustees, to handle billing, custodial, and other tasks related to each loan. Each subservicer undertook to perform those obligations on FHNs behalf during the applicable subservicing period, although FHN legally remained the servicer of record for those loans that were subserviced.
The 2008 subservicer has been subject to a consent decree, and entered into a settlement agreement, with regulators related to alleged deficiencies in servicing and foreclosure practices. The 2008 subservicer has made demands of FHN, under the 2008 subservicing agreement, to pay certain resulting costs and damages totaling $43.5 million. FHN disagrees with those demands and has made no payments. This disagreement has the potential to result in litigation and, in any such future litigation, the claim against FHN may be substantial.
A certificate holder has contacted FHN, threatening to make claims based on alleged deficiencies in servicing loans held in certain FH proprietary securitization trusts. FHN cannot predict how this inquiry will proceed nor whether any claim or suit, if made or brought, will be material to FHN.
Origination Data
From 2005 through 2008, FHN originated and sold $69.5 billion of mortgage loans to the Agencies. This includes $57.6 billion of loans sold to GSEs and $11.9 billion of loans guaranteed by Ginnie Mae. Although FHN conducted these businesses before 2005, GSE loans originated in 2005 through 2008 account for approximately 90 percent of all repurchase requests/make-whole claims received from the 2008 platform sale through December 31, 2015.
From 2005 through 2007, $26.7 billion of mortgage loans were included in FH proprietary securitizations.
34
Note 10 Contingencies and Other Disclosures (Continued)
Mortgage-Related Glossary
Agencies | the two GSEs and Ginnie Mae | HELOC | home equity line of credit | |||||
certificates | securities sold to investors representing interests in mortgage loan securitizations | HUD | Dept. of Housing and Urban Development | |||||
DOJ | U.S. Department of Justice | LTV | loan-to-value, a ratio of the loan amount divided by the home value | |||||
DRA | definitive resolution agreement with a GSE | MI | private mortgage insurance, insuring against borrower payment default | |||||
Fannie Mae, Fannie, FNMA | Federal National Mortgage Association | MSR | mortgage servicing rights | |||||
FH proprietary securitization | securitization of mortgages sponsored by FHN under its First Horizon brand | nonconforming loans | loans that did not conform to Agency program requirements | |||||
FHA | Federal Housing Administration | other whole loans sold | mortgage loans sold to private, non-Agency purchasers | |||||
FHFA | Federal Housing Financing Agency, conservator for the GSEs | 2008 platform sale, platform sale, 2008 sale | FHNs sale of its national mortgage origination and servicing platforms in 2008 | |||||
Freddie Mac, Freddie, FHLMC | Federal Home Loan Mortgage Corporation | pipeline | pipeline of mortgage repurchase, make-whole, & certain related claims against FHN | |||||
Ginnie Mae, Ginnie, GNMA | Government National Mortgage Association | UPB | unpaid principal balance | |||||
GSEs | Fannie Mae and Freddie Mac | VA | Veterans Administration |
Repurchase and Foreclosure Liability
The repurchase and foreclosure liability is comprised of reserves to cover estimated loss content in the active pipeline, estimated future inflows, as well as estimated loss content related to certain known claims not currently included in the active pipeline. FHN compares the estimated probable incurred losses determined under the applicable loss estimation approaches described above for the respective periods with current reserve levels. Changes in the estimated required liability levels are recorded as necessary through the repurchase and foreclosure provision.
Based on currently available information and experience to date, FHN has evaluated its loan repurchase, make-whole, and certain related exposures and has accrued for losses of $68.1 million and $117.2 million as of June 30, 2016 and 2015, respectively, including a smaller amount related to equity-lending junior lien loan sales. Accrued liabilities for FHNs estimate of these obligations are reflected in Other liabilities on the Consolidated Condensed Statements of Condition. Charges to increase the liability are included within Repurchase and foreclosure provision on the Consolidated Condensed Statements of Income. The estimates are based upon currently available information and fact patterns that exist as of the balance sheet dates and could be subject to future changes. Changes to any one of these factors could significantly impact the estimate of FHNs liability.
Government-Backed Mortgage Lending Programs
FHNs FHA and VA program lending was substantial prior to the 2008 platform sale, and has continued at a much lower level since then. As lender, FHN made certain representations and warranties as to the compliance of the loans with program requirements. Over the past several years, most recently in first quarter 2015, FHN occasionally has recognized significant losses associated with settling claims and potential claims by government agencies, and by private parties asserting claims on behalf of agencies, related to these origination activities. At June 30, 2016, FHN had not accrued a liability for any matter related to these government lending programs, and no pending or known threatened matter related to these programs represented a material loss contingency described above.
Other FHN Mortgage Exposures
At June 30, 2016, FHN had not accrued a liability for exposure for repurchase of first-lien loans related to FH proprietary securitizations arising from claims from the trustee that FHN breached its representations and warranties in FH proprietary securitizations at closing. FHNs trustee is a defendant in a lawsuit in which the plaintiffs have asserted that the trustee has duties to
35
Note 10 Contingencies and Other Disclosures (Continued)
review loans and otherwise to act against FHN outside of the duties specified in the applicable trust documents; FHN is not a defendant in that suit and is not able to assess what, if any, exposure FHN may have as a result of it.
FHN is defending, directly or as indemnitor, certain pending lawsuits brought by purchasers of certificates in FH proprietary securitizations or their assignees. FHN believes a new lawsuit based on federal securities claims that offering disclosures were deficient cannot be brought at this time due to the running of applicable limitation periods, but other investor claims, based on other legal theories, might still be possible. Due to the sales of MSR from 2008 through 2014, FHN has limited visibility into current loan information such as principal payoffs, refinance activity, delinquency trends, and loan modification activity.
Many non-GSE purchasers of whole loans from FHN included those loans in their own securitizations. Regarding such other whole loans sold, FHN made representations and warranties concerning the loans and provided indemnity covenants to the purchaser/securitizer. Typically the purchaser/securitizer assigned key contractual rights against FHN to the securitization trustee. As mentioned above, repurchase and make-whole claims related to specific loans are included in the active pipeline and repurchase reserve. In addition, currently the following categories of actions are pending which involve FHN and other whole loans sold: (i) FHN has received indemnification requests from purchasers of loans or their assignees in cases where FHN is not a defendant; (ii) FHN has received subpoenas seeking loan reviews in cases where FHN is not a defendant; (iii) FHN has received repurchase demands from purchasers or their assignees; and (iv) FHN is a defendant in legal actions involving FHN-originated loans. At June 30, 2016, FHN had not accrued a liability for any litigation matter related to other whole loans sold; however, FHNs repurchase and foreclosure liability considered certain known exposures from other whole loans sold.
Certain government entities have subpoenaed information from FHN and others. These entities include the FDIC (on behalf of certain failed banks) and the FHLBs of San Francisco, Atlanta, and Seattle, among others. These entities purport to act on behalf of several purchasers of FH proprietary securitizations, and of non-FH securitizations which included other whole loans sold. Collectively, the subpoenas seek information concerning: a number of FH proprietary securitizations and/or underlying loan originations; and originations of certain other whole loans sold which, in many cases, were included by the purchaser in its own securitizations. Some subpoenas fail to identify the specific investments made or loans at issue. Moreover, FHN has limited information regarding at least some of the loans under review. Unless and until a review (if related to specific loans) becomes an identifiable repurchase claim, the associated loans are not considered part of the active pipeline.
OTHER DISCLOSURES
Visa Matters
FHN is a member of the Visa USA network. In October 2007, the Visa organization of affiliated entities completed a series of global restructuring transactions to combine its affiliated operating companies, including Visa USA, under a single holding company, Visa Inc. (Visa). Upon completion of the reorganization, the members of the Visa USA network remained contingently liable for certain Visa litigation matters (the Covered Litigation). Based on its proportionate membership share of Visa USA, FHN recognized a contingent liability in fourth quarter 2007 related to this contingent obligation. In March 2008, Visa completed its initial public offering (IPO) and funded an escrow account from its IPO proceeds to be used to make payments related to the Visa litigation matters. FHN received approximately 2.4 million Class B shares in conjunction with Visas IPO.
Conversion of these shares into Class A shares of Visa and, with limited exceptions, transfer of these shares is restricted until the final resolution of the covered litigation. In conjunction with the prior sales of Visa Class B shares in December 2010 and September 2011, FHN and the purchasers entered into derivative transactions whereby FHN will make, or receive, cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. The conversion ratio is adjusted when Visa deposits funds into the escrow account to cover certain litigation. As of June 30, 2016 and 2015, the derivative liabilities were $6.8 million and $4.8 million, respectively.
In July 2012, Visa and MasterCard announced a joint settlement (the Settlement) related to the Payment Card Interchange matter, one of the Covered Litigation matters. Based on the amount of the Settlement attributable to Visa and an assessment of FHNs contingent liability accrued for Visa litigation matters, the Settlement did not have a material impact on FHN. The Settlement was vacated upon appeal in June 2016. Accordingly, the outcome of this matter remains uncertain. Additionally, other Covered Litigation matters are also pending judicial resolution, including new matters filed by class members who opted out of the Settlement. So long as any Covered Litigation matter remains pending, FHNs ability to transfer its Visa holdings continues to be restricted.
FHN now holds approximately 1.1 million Visa Class B shares. FHNs Visa shares are not considered to be marketable and therefore are included in the Consolidated Condensed Statements of Condition at their historical cost of $0. As of June 30, 2016, the conversion ratio is 165 percent reflecting a Visa stock split in March 2015, and the contingent liability is $.8 million. Future funding of the escrow would dilute this conversion ratio by an amount that is not determinable at present. Based on the closing price on June 30, 2016, assuming conversion into Class A shares at the current conversion ratio, FHNs Visa holdings would have a value of approximately $136 million. Recognition of this value is dependent upon the final resolution of the remainder of Visas Covered Litigation matters without further reduction of the conversion ratio.
36
Note 10 Contingencies and Other Disclosures (Continued)
Indemnification Agreements and Guarantees
In the ordinary course of business, FHN enters into indemnification agreements for legal proceedings against its directors and officers and standard representations and warranties for underwriting agreements, merger and acquisition agreements, loan sales, contractual commitments, and various other business transactions or arrangements. The extent of FHNs obligations under these agreements depends upon the occurrence of future events; therefore, it is not possible to estimate a maximum potential amount of payouts that could be required with such agreements.
37
Note 11 Pension, Savings, and Other Employee Benefits
Pension plan. FHN sponsors a noncontributory, qualified defined benefit pension plan to employees hired or re-hired on or before September 1, 2007. Pension benefits are based on years of service, average compensation near retirement or other termination, and estimated social security benefits at age 65. Benefits under the plan are frozen so that years of service and compensation changes after 2012 do not affect the benefit owed. Minimum contributions are based upon actuarially determined amounts necessary to fund the benefit obligation. FHN did not make any contributions to the qualified pension plan in 2015 or in the first half of 2016. Decisions to contribute to the plan are based upon pension funding requirements under the Pension Protection Act, the maximum amount deductible under the Internal Revenue Code, the actual performance of plan assets, and trends in the regulatory environment. FHN expects to contribute approximately $165 million to the qualified pension plan in third quarter 2016.
FHN also maintains non-qualified plans including a supplemental retirement plan that covers certain employees whose benefits under the qualified pension plan have been limited by tax rules. These other non-qualified plans are unfunded, and contributions to these plans cover all benefits paid under the non-qualified plans. Payments made under the non-qualified plans were $4.9 million for 2015. FHN anticipates making benefit payments under the non-qualified plans of $5.2 million in 2016.
Savings plan. FHN provides all qualifying full-time employees with the opportunity to participate in the FHN tax qualified 401(k) savings plan. The qualified plan allows employees to defer receipt of earned salary, up to tax law limits, on a tax-advantaged basis. Accounts, which are held in trust, may be invested in a wide range of mutual funds and in FHN common stock. Up to tax law limits, FHN provides a 100 percent match for the first 6 percent of salary deferred, with company matching contributions invested according to a participants current investment elections. Through a non-qualified savings restoration plan, FHN provides a restorative benefit to certain highly-compensated employees who participate in the savings plan and whose contribution elections are capped by tax limitations.
Other employee benefits. FHN provides postretirement life insurance benefits to certain employees and also provides postretirement medical insurance benefits to retirement-eligible employees. The postretirement medical plan is contributory with FHN contributing a fixed amount for certain participants. FHNs postretirement benefits include certain prescription drug benefits.
The components of net periodic benefit cost for the three months ended June 30 are as follows:
Pension Benefits | Other Benefits | |||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Components of net periodic benefit cost |
||||||||||||||||
Service cost |
$ | 10 | $ | 10 | $ | 27 | $ | 38 | ||||||||
Interest cost |
7,882 | 9,020 | 317 | 360 | ||||||||||||
Expected return on plan assets |
(9,772 | ) | (9,391 | ) | (229 | ) | (242 | ) | ||||||||
Amortization of unrecognized: |
||||||||||||||||
Prior service cost/(credit) |
50 | 83 | 42 | (291 | ) | |||||||||||
Actuarial (gain)/loss |
2,067 | 2,395 | (232 | ) | (244 | ) | ||||||||||
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Net periodic benefit cost |
$ | 237 | $ | 2,117 | $ | (75 | ) | $ | (379 | ) | ||||||
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The components of net periodic benefit cost for the six months ended June 30 are as follows:
Pension Benefits | Other Benefits | |||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Components of net periodic benefit cost |
||||||||||||||||
Service cost |
$ | 20 | $ | 20 | $ | 55 | $ | 75 | ||||||||
Interest cost |
15,764 | 18,040 | 634 | 720 | ||||||||||||
Expected return on plan assets |
(19,545 | ) | (18,783 | ) | (458 | ) | (483 | ) | ||||||||
Amortization of unrecognized: |
||||||||||||||||
Prior service cost/(credit) |
99 | 166 | 85 | (582 | ) | |||||||||||
Actuarial (gain)/loss |
4,135 | 4,791 | (465 | ) | (488 | ) | ||||||||||
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Net periodic benefit cost |
$ | 473 | $ | 4,234 | $ | (149 | ) | $ | (758 | ) | ||||||
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|
|
In 2016, FHN changed its methodology for the calculation of interest cost for its applicable employee benefit plans. Prior to 2016 FHN utilized a weighted average discount rate to determine interest cost, which is the same discount rate used to calculate the projected benefit obligation. Starting in 2016, FHN has adopted a spot rate approach which applies duration-specific rates from the
38
Note 11 Pension, Savings, and Other Employee Benefits (Continued)
full yield curve to estimated future benefit payments for the determination of interest cost. This change in accounting estimate is expected to reduce annual interest cost across all plans by $5.8 million in 2016.
39
Note 12 Business Segment Information
FHN has four business segments: regional banking, fixed income, corporate, and non-strategic. The regional banking segment offers financial products and services, including traditional lending and deposit taking, to retail and commercial customers in Tennessee and other selected markets. Regional banking provides investments, financial planning, trust services and asset management, credit card, and cash management. Additionally, the regional banking segment includes correspondent banking which provides credit, depository, and other banking related services to other financial institutions nationally. The fixed income segment consists of fixed income sales, trading, and strategies for institutional clients in the U.S. and abroad, as well as loan sales, portfolio advisory, and derivative sales. The corporate segment consists of unallocated corporate expenses, expense on subordinated debt issuances, bank-owned life insurance, unallocated interest income associated with excess equity, net impact of raising incremental capital, revenue and expense associated with deferred compensation plans, funds management, tax credit investment activities, gains on the extinguishment of debt, and acquisition-related costs. The non-strategic segment consists of the wind-down national consumer lending activities, legacy mortgage banking elements including servicing fees, and the associated ancillary revenues and expenses related to these businesses. Non-strategic also includes the wind-down trust preferred loan portfolio and exited businesses.
Periodically, FHN adapts its segments to reflect managerial or strategic changes. FHN may also modify its methodology of allocating expenses and equity among segments which could change historical segment results. Business segment revenue, expense, asset, and equity levels reflect those which are specifically identifiable or which are allocated based on an internal allocation method. Because the allocations are based on internally developed assignments and allocations, to an extent they are subjective. Generally, all assignments and allocations have been consistently applied for all periods presented. The following table reflects the amounts of consolidated revenue, expense, tax, and assets for each segment for the three and six months ended June 30:
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Consolidated |
||||||||||||||||
Net interest income |
$ | 176,264 | $ | 166,640 | $ | 348,338 | $ | 323,506 | ||||||||
Provision for loan losses |
4,000 | 2,000 | 7,000 | 7,000 | ||||||||||||
Noninterest income |
145,514 | 130,301 | 279,819 | 259,990 | ||||||||||||
Noninterest expense |
226,822 | 218,394 | 453,749 | 594,615 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income/(loss) before income taxes |
90,956 | 76,547 | 167,408 | (18,119 | ) | |||||||||||
Provision/(benefit) for income taxes |
30,016 | 21,590 | 54,255 | (671 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income/(loss) |
$ | 60,940 | $ | 54,957 | $ | 113,153 | $ | (17,448 | ) | |||||||
|
|
|
|
|
|
|
|
|||||||||
Average assets |
$ | 26,828,548 | $ | 25,411,578 | $ | 26,723,621 | $ | 25,526,120 |
Certain previously reported amounts have been reclassified to agree with current presentation.
40
Note 12 Business Segment Information (Continued)
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Regional Banking |
||||||||||||||||
Net interest income |
$ | 178,321 | $ | 165,903 | $ | 350,634 | $ | 320,311 | ||||||||
Provision/(provision credit) for loan losses |
10,883 | 17,078 | 25,650 | 21,993 | ||||||||||||
Noninterest income |
61,275 | 65,983 | 120,551 | 126,179 | ||||||||||||
Noninterest expense |
164,315 | 143,960 | 309,666 | 279,437 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income/(loss) before income taxes |
64,398 | 70,848 | 135,869 | 145,060 | ||||||||||||
Provision/(benefit) for income taxes |
22,455 | 25,086 | 47,881 | 51,582 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income/(loss) |
$ | 41,943 | $ | 45,762 | $ | 87,988 | $ | 93,478 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Average assets |
$ | 16,575,676 | $ | 15,021,991 | $ | 16,260,430 | $ | 14,626,026 | ||||||||
Fixed Income |
||||||||||||||||
Net interest income |
$ | 3,147 | $ | 4,293 | $ | 5,813 | $ | 8,613 | ||||||||
Noninterest income |
78,083 | 56,002 | 145,205 | 117,566 | ||||||||||||
Noninterest expense |
62,881 | 51,253 | 121,549 | 105,992 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income/(loss) before income taxes |
18,349 | 9,042 | 29,469 | 20,187 | ||||||||||||
Provision/(benefit) for income taxes |
6,755 | 3,154 | 10,630 | 7,298 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income/(loss) |
$ | 11,594 | $ | 5,888 | $ | 18,839 | $ | 12,889 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Average assets |
$ | 2,470,699 | $ | 2,417,317 | $ | 2,370,179 | $ | 2,432,194 | ||||||||
Corporate |
||||||||||||||||
Net interest income/(expense) |
$ | (15,850 | ) | $ | (17,366 | ) | $ | (30,214 | ) | $ | (33,440 | ) | ||||
Noninterest income |
4,909 | 3,901 | 10,632 | 9,286 | ||||||||||||
Noninterest expense |
16,072 | 14,061 | 29,551 | 28,403 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income/(loss) before income taxes |
(27,013 | ) | (27,526 | ) | (49,133 | ) | (52,557 | ) | ||||||||
Provision/(benefit) for income taxes |
(12,840 | ) | (15,991 | ) | (24,094 | ) | (27,694 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income/(loss) |
$ | (14,173 | ) | $ | (11,535 | ) | $ | (25,039 | ) | $ | (24,863 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Average assets |
$ | 5,833,122 | $ | 5,562,880 | $ | 6,097,578 | $ | 5,985,074 | ||||||||
Non-Strategic |
||||||||||||||||
Net interest income |
$ | 10,646 | $ | 13,810 | $ | 22,105 | $ | 28,022 | ||||||||
Provision/(provision credit) for loan losses |
(6,883 | ) | (15,078 | ) | (18,650 | ) | (14,993 | ) | ||||||||
Noninterest income |
1,247 | 4,415 | 3,431 | 6,959 | ||||||||||||
Noninterest expense |
(16,446 | ) | 9,120 | (7,017 | ) | 180,783 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income/(loss) before income taxes |
35,222 | 24,183 | 51,203 | (130,809 | ) | |||||||||||
Provision/(benefit) for income taxes |
13,646 | 9,341 | 19,838 | (31,857 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income/(loss) |
$ | 21,576 | $ | 14,842 | $ | 31,365 | $ | (98,952 | ) | |||||||
|
|
|
|
|
|
|
|
|||||||||
Average assets |
$ | 1,949,051 | $ | 2,409,390 | $ | 1,995,434 | $ | 2,482,826 |
Certain previously reported amounts have been reclassified to agree with current presentation.
41
Note 13 Variable Interest Entities
ASC 810 defines a VIE as a legal entity where (a) the equity investors, as a group, lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support, (b) the equity investors, as a group, lack either, (1) the power through voting rights, or similar rights, to direct the activities of an entity that most significantly impact the entitys economic performance, (2) the obligation to absorb the expected losses of the entity, or (3) the right to receive the expected residual returns of the entity, or (c) the entity is structured with non-substantive voting rights. A variable interest is a contractual ownership, or other interest, that fluctuates with changes in the fair value of the VIEs net assets exclusive of variable interests. Under ASC 810, as amended, a primary beneficiary is required to consolidate a VIE when it has a variable interest in a VIE that provides it with a controlling financial interest. For such purposes, the determination of whether a controlling financial interest exists is based on whether a single party has both the power to direct the activities of the VIE that most significantly impact the VIEs economic performance and the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant.
Consolidated Variable Interest Entities
FHN holds variable interests in a proprietary HELOC securitization trust it established as a source of liquidity for consumer lending operations. Based on its restrictive nature, the trust is considered a VIE as the holders of equity at risk do not have the power through voting rights or similar rights to direct the activities that most significantly impact the trusts economic performance. The retention of MSR and a residual interest results in FHN potentially absorbing losses or receiving benefits that are significant to the trust. FHN is considered the primary beneficiary, as it is assumed to have the power, as Master Servicer, to most significantly impact the activities of the VIE. Consolidation of the trust results in the recognition of the trust proceeds as restricted borrowings since the cash flows on the securitized loans can only be used to settle the obligations due to the holders of trust securities. Through first quarter 2016 the trust experienced a rapid amortization period and FHN was obligated to provide subordinated funding. During the period, cash payments from borrowers were accumulated to repay outstanding debt securities while FHN continued to make advances to borrowers when they drew on their lines of credit. FHN then transferred the newly generated receivables into the securitization trust. FHN is reimbursed for these advances only after other parties in the securitization have received all of the cash flows to which they are entitled. If loan losses requiring draws on the related monoline insurers policies (which protect bondholders in the securitization) exceed a certain level, FHN may not receive reimbursement for all of the funds advanced to borrowers, as the senior bondholders and the monoline insurers typically have priority for repayment. Amounts funded from monoline insurance policies are considered restricted term borrowings in FHNs Consolidated Condensed Statements of Condition. Except for recourse due to breaches of representations and warranties made by FHN in connection with the sale of the loans to the trust, the creditors of the trust hold no recourse to the assets of FHN.
FHN has established certain rabbi trusts related to deferred compensation plans offered to its employees. FHN contributes employee cash compensation deferrals to the trusts and directs the underlying investments made by the trusts. The assets of these trusts are available to FHNs creditors only in the event that FHN becomes insolvent. These trusts are considered VIEs as there is no equity at risk in the trusts since FHN provided the equity interest to its employees in exchange for services rendered. FHN is considered the primary beneficiary of the rabbi trusts as it has the power to direct the activities that most significantly impact the economic performance of the rabbi trusts through its ability to direct the underlying investments made by the trusts. Additionally, FHN could potentially receive benefits or absorb losses that are significant to the trusts due to its right to receive any asset values in excess of liability payoffs and its obligation to fund any liabilities to employees that are in excess of a rabbi trusts assets.
42
Note 13 Variable Interest Entities (Continued)
The following table summarizes VIEs consolidated by FHN as of June 30, 2016 and 2015:
June 30, 2016 | June 30, 2015 | |||||||||||||||
On-Balance Sheet Consumer Loan Securitization |
Rabbi Trusts Used for Deferred Compensation Plans |
On-Balance Sheet Consumer Loan Securitization |
Rabbi Trusts Used for Deferred Compensation Plans |
|||||||||||||
(Dollars in thousands) |
Carrying Value | Carrying Value | Carrying Value | Carrying Value | ||||||||||||
Assets: |
||||||||||||||||
Cash and due from banks |
$ | 396 | N/A | $ | 1,382 | N/A | ||||||||||
Loans, net of unearned income |
43,479 | N/A | 66,444 | N/A | ||||||||||||
Less: Allowance for loan losses |
453 | N/A | 214 | N/A | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net loans |
43,026 | N/A | 66,230 | N/A | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other assets |
241 | $ | 71,923 | 184 | $ | 69,077 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | 43,663 | $ | 71,923 | $ | 67,796 | $ | 69,077 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Term borrowings |
$ | 30,956 | N/A | $ | 55,679 | N/A | ||||||||||
Other liabilities |
2 | $ | 53,000 | 3 | $ | 51,861 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
$ | 30,958 | $ | 53,000 | $ | 55,682 | $ | 51,861 | ||||||||
|
|
|
|
|
|
|
|
Nonconsolidated Variable Interest Entities
Low Income Housing Partnerships. First Tennessee Housing Corporation (FTHC), a wholly-owned subsidiary of FTBNA, makes equity investments as a limited partner in various partnerships that sponsor affordable housing projects utilizing the Low Income Housing Tax Credit (LIHTC) pursuant to Section 42 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital and to support FHNs community reinvestment initiatives. The activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants generally within FHNs primary geographic region. LIHTC partnerships are considered VIEs as FTHC, the holder of the equity investment at risk, does not have the ability to direct the activities that most significantly affect the performance of the entity through voting rights or similar rights. FTHC could absorb losses that are significant to the LIHTC partnerships as it has a risk of loss for its capital contributions and funding commitments to each partnership. The general partners are considered the primary beneficiaries as managerial functions give them the power to direct the activities that most significantly impact the entities economic performance and the managing members are exposed to all losses beyond FTHCs initial capital contributions and funding commitments.
FHN accounts for all qualifying LIHTC investments under the proportional amortization method. Under this method an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense/(benefit). LIHTC investments that do not qualify for the proportional amortization method are accounted for using the equity method. Expenses associated with these investments were not significant for the three or six months ended June 30, 2016 and 2015. The following table summarizes the impact to the Provision/(benefit) for income taxes on the Consolidated Condensed Statements of Income for the three and six months ended June 30, 2016 and 2015 for LIHTC investments accounted for under the proportional amortization method.
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Provision/(benefit) for income taxes: |
||||||||||||||||
Amortization of qualifying LIHTC investments |
$ | 2,330 | $ | 2,180 | $ | 4,628 | $ | 4,360 | ||||||||
Low income housing tax credits |
(2,534 | ) | (2,363 | ) | (5,057 | ) | (4,726 | ) | ||||||||
Other tax benefits related to qualifying LIHTC investments |
(1,069 | ) | (755 | ) | (2,179 | ) | (1,599 | ) |
43
Note 13 Variable Interest Entities (Continued)
Other Tax Credit Investments. First Tennessee New Markets Corporation (FTNMC), a wholly-owned subsidiary of FTBNA, makes equity investments through wholly-owned subsidiaries as a non-managing member in various limited liability companies (LLCs) that sponsor community development projects utilizing the New Market Tax Credit (NMTC) pursuant to Section 45 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital and to support FHNs community reinvestment initiatives. The activities of the LLCs include providing investment capital for low-income communities within FHNs primary geographic region. A portion of the funding of FTNMCs investment in a NMTC LLC is obtained via a loan from an unrelated third-party that is typically a community development enterprise. The NMTC LLCs are considered VIEs as FTNMC, the holder of the equity investment at risk, does not have the ability to direct the activities that most significantly affect the performance of the entity through voting rights or similar rights. While FTNMC could absorb losses that are significant to the NMTC LLCs as it has a risk of loss for its initial capital contributions, the managing members are considered the primary beneficiaries as managerial functions give them the power to direct the activities that most significantly impact the NMTC LLCs economic performance and the managing members are exposed to all losses beyond FTNMCs initial capital contributions.
FTHC also makes equity investments as a limited partner or non-managing member in entities that receive Historic Tax Credits pursuant to Section 47 of the Internal Revenue Code. The purpose of these entities is the rehabilitation of historic buildings with the tax credits provided to incent private investment in the historic cores of cities and towns. These entities are considered VIEs as FTHC, the holder of the equity investment at risk, does not have the ability to direct the activities that most significantly affect the performance of the entity through voting rights or similar rights. FTHC could absorb losses that are significant to the entities as it has a risk of loss for its capital contributions and funding commitments to each partnership. The managing members are considered the primary beneficiaries as managerial functions give them the power to direct the activities that most significantly impact the entities economic performance and the managing members are exposed to all losses beyond FTHCs initial capital contributions and funding commitments.
Small Issuer Trust Preferred Holdings. FTBNA holds variable interests in trusts which have issued mandatorily redeemable preferred capital securities (trust preferreds) for smaller banking and insurance enterprises. FTBNA has no voting rights for the trusts activities. The trusts only assets are junior subordinated debentures of the issuing enterprises. The creditors of the trusts hold no recourse to the assets of FTBNA. These trusts meet the definition of a VIE as the holders of the equity investment at risk do not have the power through voting rights, or similar rights, to direct the activities that most significantly impact the trusts economic performance. Based on the nature of the trusts activities and the size of FTBNAs holdings, FTBNA could potentially receive benefits or absorb losses that are significant to the trusts regardless of whether a majority of a trusts securities are held by FTBNA. However, since FTBNA is solely a holder of the trusts securities, it has no rights which would give it the power to direct the activities that most significantly impact the trusts economic performance and thus it is not considered the primary beneficiary of the trusts. FTBNA has no contractual requirements to provide financial support to the trusts.
On-Balance Sheet Trust Preferred Securitization. In 2007, FTBNA executed a securitization of certain small issuer trust preferreds for which the underlying trust meets the definition of a VIE as the holders of the equity investment at risk do not have the power through voting rights, or similar rights, to direct the activities that most significantly impact the entitys economic performance. FTBNA could potentially receive benefits or absorb losses that are significant to the trust based on the size and priority of the interests it retained in the securities issued by the trust. However, since FTBNA did not retain servicing or other decision making rights, FTBNA is not the primary beneficiary as it does not have the power to direct the activities that most significantly impact the trusts economic performance. Accordingly, FTBNA has accounted for the funds received through the securitization as a term borrowing in its Consolidated Condensed Statements of Condition. FTBNA has no contractual requirements to provide financial support to the trust.
Proprietary Trust Preferred Issuances. FHN previously issued junior subordinated debt to First Tennessee Capital II (Capital II). Capital II was considered a VIE as FHNs capital contributions to this trust were not considered at risk in evaluating whether the holders of the equity investments at risk in the trust had the power through voting rights, or similar rights, to direct the activities that most significantly impacted the entitys economic performance. FHN was not the trusts primary beneficiary as FHNs capital contributions to the trust were not considered variable interests as they were not at risk. Consequently, Capital II was not consolidated by FHN. In third quarter 2015 FHN redeemed its junior subordinated debt, and as a result Capital II redeemed its 6.30 percent Capital Securities, Series B, and the trust was terminated.
44
Note 13 Variable Interest Entities (Continued)
Proprietary Residential Mortgage Securitizations. FHN holds variable interests in proprietary residential mortgage securitization trusts it established prior to 2008 as a source of liquidity for its mortgage banking operations. Except for recourse due to breaches of representations and warranties made by FHN in connection with the sale of the loans to the trusts, the creditors of the trusts hold no recourse to the assets of FHN. Additionally, FHN has no contractual requirements to provide financial support to the trusts. Based on their restrictive nature, the trusts are considered VIEs as the holders of equity at risk do not have the power through voting rights, or similar rights, to direct the activities that most significantly impact the trusts economic performance. While FHN is assumed to have the power as servicer to most significantly impact the activities of such VIEs, in situations where FHN does not have the ability to participate in significant portions of a securitization trusts cash flows FHN is not considered the primary beneficiary of the trust. Therefore, these trusts are not consolidated by FHN.
Holdings & Short Positions in Agency Mortgage-Backed Securities. FHN holds securities issued by various Agency securitization trusts. Based on their restrictive nature, the trusts meet the definition of a VIE since the holders of the equity investments at risk do not have the power through voting rights, or similar rights, to direct the activities that most significantly impact the entities economic performance. FHN could potentially receive benefits or absorb losses that are significant to the trusts based on the nature of the trusts activities and the size of FHNs holdings. However, FHN is solely a holder of the trusts securities and does not have the power to direct the activities that most significantly impact the trusts economic performance, and is not considered the primary beneficiary of the trusts. FHN has no contractual requirements to provide financial support to the trusts.
Commercial Loan Troubled Debt Restructurings. For certain troubled commercial loans, FTBNA restructures the terms of the borrowers debt in an effort to increase the probability of receipt of amounts contractually due. Following a troubled debt restructuring, the borrower entity typically meets the definition of a VIE as the initial determination of whether an entity is a VIE must be reconsidered as events have proven that the entitys equity is not sufficient to permit it to finance its activities without additional subordinated financial support or a restructuring of the terms of its financing. As FTBNA does not have the power to direct the activities that most significantly impact such troubled commercial borrowers operations, it is not considered the primary beneficiary even in situations where, based on the size of the financing provided, FTBNA is exposed to potentially significant benefits and losses of the borrowing entity. FTBNA has no contractual requirements to provide financial support to the borrowing entities beyond certain funding commitments established upon restructuring of the terms of the debt that allows for preparation of the underlying collateral for sale.
Sale Leaseback Transaction. In fourth quarter 2015, FTB entered into an agreement with a single asset leasing entity for the sale and lease back of an office building. In conjunction with this transaction, FTB loaned funds to a related party of the buyer that were used for the purchase price of the building. FTB also entered into a construction loan agreement with the single asset entity for renovation of the building. Since this transaction did not qualify as a sale, it is being accounted for using the deposit method which creates a net asset or liability for all cash flows between FTB and the buyer. The buyer-lessor in this transaction meets the definition of a VIE as it does not have sufficient equity at risk since FTB is providing the funding for the purchase and renovation. A related party of the buyer-lessor has the power to direct the activities that most significantly impact the operations and could potentially receive benefits or absorb losses that are significant to the transactions, making it the primary beneficiary. Therefore, FTB does not consolidate the leasing entity.
45
Note 13 Variable Interest Entities (Continued)
The following table summarizes FHNs nonconsolidated VIEs as of June 30, 2016:
(Dollars in thousands) |
Maximum Loss Exposure |
Liability Recognized |
Classification | |||||||
Type |
||||||||||
Low income housing partnerships |
$ | 64,807 | $ | 11,285 | (a) | |||||
Other tax credit investments (b) (c) |
20,370 | | Other assets | |||||||
Small issuer trust preferred holdings (d) |
333,341 | | Loans, net of unearned income | |||||||
On-balance sheet trust preferred securitization |
49,603 | 64,571 | (e) | |||||||
Proprietary residential mortgage securitizations |
19,548 | | (f) | |||||||
Holdings of agency mortgage-backed securities (d) |
4,385,552 | | (g) | |||||||
Short positions in agency mortgage-backed securities (h) |
N/A | 1,563 | Trading liabilities | |||||||
Commercial loan troubled debt restructurings (i) |
39,765 | | Loans, net of unearned income | |||||||
Sale-leaseback transaction |
11,827 | | (j) |
(a) | Maximum loss exposure represents $53.5 million of current investments and $11.3 million of accrued contractual funding commitments. Accrued funding commitments represent unconditional contractual obligations for future funding events, and are also recognized in Other liabilities. FHN currently expects to be required to fund these accrued commitments by the end of 2016. |
(b) | A liability is not recognized as investments are written down over the life of the related tax credit. |
(c) | Maximum loss exposure represents current investment balance. Of the initial investment, $18.0 million was funded through loans from community development enterprises. |
(d) | Maximum loss exposure represents the value of current investments. A liability is not recognized as FHN is solely a holder of the trusts securities. |
(e) | Includes $112.5 million classified as Loans, net of unearned income, and $1.7 million classified as Trading securities which are offset by $64.6 million classified as Term borrowings. |
(f) | Includes $.3 million classified as MSR, $2.8 million classified as Trading securities, and $16.4 million of aggregate servicing advances. |
(g) | Includes $.6 billion classified as Trading securities and $3.8 billion classified as Securities available-for-sale. |
(h) | No exposure of loss due to the nature of FHNs involvement. |
(i) | Maximum loss exposure represents $39.7 million of current receivables and $.1 million of contractual funding commitments on loans related to commercial borrowers involved in a troubled debt restructuring. |
(j) | Maximum loss exposure represents the current loan balance plus additional funding commitments less amounts received from the buyer-lessor. |
The following table summarizes FHNs nonconsolidated VIEs as of June 30, 2015:
(Dollars in thousands) |
Maximum Loss Exposure |
Liability Recognized |
Classification | |||||||
Type |
||||||||||
Low income housing partnerships |
$ | 68,405 | $ | 11,976 | (a) | |||||
Other tax credit investments (b) (c) |
21,690 | | Other assets | |||||||
Small issuer trust preferred holdings (d) |
344,321 | | Loans, net of unearned income | |||||||
On-balance sheet trust preferred securitization |
50,506 | 63,686 | (e) | |||||||
Proprietary trust preferred issuances (f) |
N/A | 206,186 | Term borrowings | |||||||
Proprietary and agency residential mortgage securitizations |
24,664 | | (g) | |||||||
Holdings of agency mortgage-backed securities (d) |
3,929,684 | | (h) | |||||||
Short positions in agency mortgage-backed securities (f) |
N/A | 1,486 | Trading liabilities | |||||||
Commercial loan troubled debt restructurings (i) (j) |
36,047 | | Loans, net of unearned income |
(a) | Maximum loss exposure represents $56.4 million of current investments and $12.0 million of accrued contractual funding commitments. Accrued funding commitments represent unconditional contractual obligations for future funding events, and are also recognized in Other liabilities. FHN currently expects to be required to fund these accrued commitments by the end of 2016. |
(b) | A liability is not recognized as investments are written down over the life of the related tax credit. |
(c) | Maximum loss exposure represents current investment balance. Of the initial investment, $18.0 million was funded through loans from community development enterprises. |
(d) | Maximum loss exposure represents the value of current investments. A liability is not recognized as FHN is solely a holder of the trusts securities. |
(e) | Includes $112.5 million classified as Loans, net of unearned income, and $1.7 million classified as Trading securities which are offset by $63.7 million classified as Term borrowings. |
(f) | No exposure of loss due to the nature of FHNs involvement. |
(g) | Includes $.6 million classified as MSR related to proprietary and agency residential mortgage securitizations and $4.9 million classified as Trading securities related to proprietary and agency residential mortgage securitizations. Aggregate servicing advances of $19.1 million are classified as Other assets. |
(h) | Includes $473.8 million classified as Trading securities and $3.5 billion classified as Securities available-for-sale. |
(i) | Maximum loss exposure represents $30.9 million of current receivables and $5.1 million of contractual funding commitments on loans related to commercial borrowers involved in a troubled debt restructuring. |
(j) | A liability is not recognized as the loans are the only variable interests held in the troubled commercial borrowers operations. |
46
In the normal course of business, FHN utilizes various financial instruments (including derivative contracts and credit-related agreements) through its fixed income and risk management operations, as part of its risk management strategy and as a means to meet customers needs. Derivative instruments are subject to credit and market risks in excess of the amount recorded on the balance sheet as required by GAAP. The contractual or notional amounts of these financial instruments do not necessarily represent the amount of credit or market risk. However, they can be used to measure the extent of involvement in various types of financial instruments. Controls and monitoring procedures for these instruments have been established and are routinely reevaluated. The Asset/Liability Committee (ALCO) controls, coordinates, and monitors the usage and effectiveness of these financial instruments.
Credit risk represents the potential loss that may occur if a party to a transaction fails to perform according to the terms of the contract. The measure of credit exposure is the replacement cost of contracts with a positive fair value. FHN manages credit risk by entering into financial instrument transactions through national exchanges, primary dealers or approved counterparties, and by using mutual margining and master netting agreements whenever possible to limit potential exposure. FHN also maintains collateral posting requirements with certain counterparties to limit credit risk. On June 30, 2016 and 2015, respectively, FHN had $90.0 million and $80.6 million of cash receivables and $42.8 million and $41.1 million of cash payables related to collateral posting under master netting arrangements, inclusive of collateral posted related to contracts with adjustable collateral posting thresholds and over collateralized positions, with derivative counterparties. With exchange-traded contracts, the credit risk is limited to the clearinghouse used. For non-exchange traded instruments, credit risk may occur when there is a gain in the fair value of the financial instrument and the counterparty fails to perform according to the terms of the contract and/or when the collateral proves to be of insufficient value. See additional discussion regarding master netting agreements and collateral posting requirements later in this note under the heading Master Netting and Similar Agreements. Market risk represents the potential loss due to the decrease in the value of a financial instrument caused primarily by changes in interest rates or the prices of debt instruments. FHN manages market risk by establishing and monitoring limits on the types and degree of risk that may be undertaken. FHN continually measures this risk through the use of models that measure value-at-risk and earnings-at-risk.
Derivative Instruments. FHN enters into various derivative contracts both in a dealer capacity to facilitate customer transactions and as a risk management tool. Where contracts have been created for customers, FHN enters into upstream transactions with dealers to offset its risk exposure. Contracts with dealers that require central clearing are novated to a clearing agent who becomes FHNs counterparty. Derivatives are also used as a risk management tool to hedge FHNs exposure to changes in interest rates or other defined market risks.
Forward contracts are over-the-counter contracts where two parties agree to purchase and sell a specific quantity of a financial instrument at a specified price, with delivery or settlement at a specified date. Futures contracts are exchange-traded contracts where two parties agree to purchase and sell a specific quantity of a financial instrument at a specified price, with delivery or settlement at a specified date. Interest rate option contracts give the purchaser the right, but not the obligation, to buy or sell a specified quantity of a financial instrument, at a specified price, during a specified period of time. Caps and floors are options that are linked to a notional principal amount and an underlying indexed interest rate. Interest rate swaps involve the exchange of interest payments at specified intervals between two parties without the exchange of any underlying principal. Swaptions are options on interest rate swaps that give the purchaser the right, but not the obligation, to enter into an interest rate swap agreement during a specified period of time.
Trading Activities
FHNs fixed income segment trades U.S. Treasury, U.S. Agency, mortgage-backed, corporate and municipal fixed income securities, and other securities for distribution to customers. When these securities settle on a delayed basis, they are considered forward contracts. Fixed income also enters into interest rate contracts, including caps, swaps, and floors, for its customers. In addition, fixed income enters into futures and option contracts to economically hedge interest rate risk associated with a portion of its securities inventory. These transactions are measured at fair value, with changes in fair value recognized currently in fixed income noninterest income. Related assets and liabilities are recorded on the Consolidated Condensed Statements of Condition as Derivative assets and Derivative liabilities. The FTN Financial Risk Committee and the Credit Risk Management Committee collaborate to mitigate credit risk related to these transactions. Credit risk is controlled through credit approvals, risk control limits, and ongoing monitoring procedures. Total trading revenues were $69.3 million and $46.7 million for the three months ended June 30, 2016 and 2015, respectively, and $126.9 million and $100.2 million for the six months ended June 30, 2016 and 2015. Trading revenues are inclusive of both derivative and non-derivative financial instruments, and are included in fixed income noninterest income.
47
Note 14 Derivatives (Continued)
The following tables summarize FHNs derivatives associated with fixed income trading activities as of June 30, 2016 and 2015:
June 30, 2016 | ||||||||||||
(Dollars in thousands) |
Notional | Assets | Liabilities | |||||||||
Customer Interest Rate Contracts |
$ | 1,877,212 | $ | 95,612 | $ | 473 | ||||||
Offsetting Upstream Interest Rate Contracts |
1,877,212 | 473 | 95,612 | |||||||||
Option Contracts Purchased |
10,000 | 13 | | |||||||||
Forwards and Futures Purchased |
4,428,569 | 19,437 | 1,653 | |||||||||
Forwards and Futures Sold |
4,587,802 | 2,136 | 17,965 |
June 30, 2015 | ||||||||||||
(Dollars in thousands) |
Notional | Assets | Liabilities | |||||||||
Customer Interest Rate Contracts |
$ | 1,640,844 | $ | 66,078 | $ | 3,285 | ||||||
Offsetting Upstream Interest Rate Contracts |
1,640,844 | 3,285 | 66,078 | |||||||||
Option Contracts Purchased |
15,000 | 55 | | |||||||||
Forwards and Futures Purchased |
2,297,489 | 2,773 | 2,174 | |||||||||
Forwards and Futures Sold |
2,531,248 | 2,526 | 2,614 |
Interest Rate Risk Management
FHNs ALCO focuses on managing market risk by controlling and limiting earnings volatility attributable to changes in interest rates. Interest rate risk exists to the extent that interest-earning assets and interest-bearing liabilities have different maturity or repricing characteristics. FHN uses derivatives, including swaps, caps, options, and collars, that are designed to moderate the impact on earnings as interest rates change. Interest paid or received for swaps utilized by FHN to hedge the fair value of long term debt is recognized as an adjustment of the interest expense of the liabilities whose risk is being managed. FHNs interest rate risk management policy is to use derivatives to hedge interest rate risk or market value of assets or liabilities, not to speculate. In addition, FHN has entered into certain interest rate swaps and caps as a part of a product offering to commercial customers that includes customer derivatives paired with upstream offsetting market instruments that, when completed, are designed to mitigate interest rate risk. These contracts do not qualify for hedge accounting and are measured at fair value with gains or losses included in current earnings in Noninterest expense on the Consolidated Condensed Statements of Income.
FHN has designated a derivative transaction in a hedging strategy to manage interest rate risk on $400.0 million of senior debt issued by FTBNA which matures in December 2019. This qualifies for hedge accounting under ASC 815-20 using the long-haul method. FHN entered into a pay floating, receive fixed interest rate swap to hedge the interest rate risk of the senior debt. The balance sheet impact of this swap was $12.9 million and $2.3 million in Derivative assets as of June 30, 2016 and 2015, respectively. There was an insignificant level of ineffectiveness related to this hedge.
FHN has designated a derivative transaction in a hedging strategy to manage interest rate risk on $500.0 million of senior debt which matures in December 2020. This qualifies for hedge accounting under ASC 815-20 using the long-haul method. FHN entered into a pay floating, receive fixed interest rate swap to hedge the interest rate risk of the senior debt. The balance sheet impact of this swap was $11.6 million in Derivative assets as of June 30, 2016. There was an insignificant level of ineffectiveness related to this hedge.
Prior to maturity in April 2016, FHN designated a derivative transaction in a hedging strategy to manage interest rate risk of certain term borrowings totaling $250.0 million. These swaps were accounted for as fair value hedges under the shortcut method. The balance sheet amount of this swap was $9.1 million in Derivative assets on June 30, 2015.
Prior to maturity in December 2015, FHN designated a derivative transaction in a hedging strategy to manage interest rate risk on its $500 million noncallable senior debt. This derivative qualified for hedge accounting under ASC 815-20 using the long-haul method. FHN hedged the interest rate risk on this debt using a pay floating, receive fixed interest rate swap. The balance sheet amount of this swap was $4.5 million in Derivative assets as of June 30, 2015. There was no ineffectiveness related to this hedge.
Prior to redemption in third quarter 2015, FHN designated derivative transactions in hedging strategies to manage interest rate risk on subordinated debt related to its trust preferred securities. These qualified for hedge accounting under ASC 815-20 using the long-haul method. FHN hedged the interest rate risk of the subordinated debt totaling $200 million using a pay floating, receive fixed interest rate swap. The balance sheet amount of this swap was $5.1 million in Derivative liabilities as of June 30, 2015. There was no ineffectiveness related to this hedge. In third quarter 2015, FHN called its junior subordinated debt, which triggered a call of the trust preferred securities, and removed all associated hedges. The redemption resulted in a gain on extinguishment of debt of $5.8 million.
48
Note 14 Derivatives (Continued)
The following tables summarize FHNs derivatives associated with interest rate risk management activities as of and for the three and six months ended June 30, 2016 and 2015:
Notional | Assets | Liabilities | Gains/(Losses) | |||||||||||||||||
(Dollars in thousands) |
Three Months Ended June 30, 2016 |
Six Months Ended June 30, 2016 |
||||||||||||||||||
Customer Interest Rate Contracts Hedging |
||||||||||||||||||||
Hedging Instruments and Hedged Items: |
||||||||||||||||||||
Customer Interest Rate Contracts (a) |
$ | 906,197 | $ | 47,086 | $ | 115 | $ | 8,154 | $ | 20,713 | ||||||||||
Offsetting Upstream Interest Rate Contracts (a) |
906,197 | 115 | 47,586 | (8,154 | ) | (20,713 | ) | |||||||||||||
Debt Hedging |
||||||||||||||||||||
Hedging Instruments: |
||||||||||||||||||||
Interest Rate Swaps (b) |
$ | 900,000 | $ | 24,511 | N/A | $ | 6,660 | $ | 26,606 | |||||||||||
Hedged Items: |
||||||||||||||||||||
Term Borrowings (b) |
N/A | N/A | $ | 900,000 | (c) | $ | (6,557 | )(d) | $ | (26,211 | )(d) |
Notional | Assets | Liabilities | Gains/(Losses) | |||||||||||||||||
(Dollars in thousands) |
Three Months Ended June 30, 2015 |
Six Months Ended June 30, 2015 |
||||||||||||||||||
Customer Interest Rate Contracts Hedging |
||||||||||||||||||||
Hedging Instruments and Hedged Items: |
||||||||||||||||||||
Customer Interest Rate Contracts (a) |
$ | 744,167 | $ | 24,148 | $ | 409 | $ | (6,158 | ) | $ | (1,915 | ) | ||||||||
Offsetting Upstream Interest Rate Contracts (a) |
744,167 | 409 | 24,648 | 6,158 | 1,915 | |||||||||||||||
Debt Hedging |
||||||||||||||||||||
Hedging Instruments: |
||||||||||||||||||||
Interest Rate Swaps (b) |
$ | 1,350,000 | $ | 15,954 | $ | 5,131 | $ | (10,810 | ) | $ | (9,840 | ) | ||||||||
Hedged Items: |
||||||||||||||||||||
Term Borrowings (b) |
N/A | N/A | $ | 1,350,000 | (c) | $ | 10,735 | (d) | $ | 9,812 | (d) |
(a) | Gains/losses included in the All other expense section of the Consolidated Condensed Statements of Income. |
(b) | Gains/losses included in the All other income and commissions section of the Consolidated Condensed Statements of Income. |
(c) | Represents par value of term borrowings being hedged. |
(d) | Represents gains and losses attributable to changes in fair value due to interest rate risk as designated in ASC 815-20 hedging relationships. |
In first quarter 2016, FHN entered into a pay floating, receive fixed interest rate swap in a hedging strategy to manage its exposure to the variability in cash flows related to the interest payments for the following five years on $250 million principal of debt instruments, which primarily consist of held-to-maturity trust preferred loans that have variable interest payments based on LIBOR. This qualifies for hedge accounting as a cash flow hedge under ASC 815-20. Changes in the fair value of this derivative are recorded as a component of AOCI, to the extent that the hedge relationship is effective. Amounts are reclassified from AOCI to earnings as the hedged cash flows affect earnings. FTB measures ineffectiveness using the Hypothetical Derivative Method. To the extent that any ineffectiveness exists in the hedge relationships, the amounts are recorded in current period earnings.
49
Note 14 Derivatives (Continued)
The following table summarizes FHNs derivative activities associated with cash flow hedges as of and for the three and six months ended June 30, 2016.
Notional | Assets | Liabilities | Gains/(Losses) | |||||||||||||||||
(Dollars in thousands) | Three Months Ended June 30, 2016 |
Six Months Ended June 30, 2016 |
||||||||||||||||||
Cash Flow Hedges |
||||||||||||||||||||
Hedging Instruments: |
||||||||||||||||||||
Interest Rate Swaps |
$ | 250,000 | $ | 7,606 | N/A | $ | 1,988 | (a) | $ | 7,606 | (a) | |||||||||
Hedged Items: |
||||||||||||||||||||
Variability in Cash Flows Related to Trust Preferred Loans |
N/A | 250,000 | N/A | N/A | N/A |
(a) | Includes approximately $1.7 million expected to be reclassified into earnings in the next twelve months. |
FHN hedges held-to-maturity trust preferred loans which have an initial fixed rate term before conversion to a floating rate. FHN has entered into pay fixed, receive floating interest rate swaps to hedge the interest rate risk associated with this initial term. Interest paid or received for these swaps is recognized as an adjustment of the interest income of the assets whose risk is being hedged. Basis adjustments remaining at the end of the hedge term are being amortized as an adjustment to interest income over the remaining life of the loans. Gains or losses are included in Other income and commissions on the Consolidated Condensed Statements of Income.
The following tables summarize FHNs derivative activities associated with held-to-maturity trust preferred loans as of and for the three and six months ended June 30, 2016 and 2015:
Notional | Assets | Liabilities | Gains/(Losses) | |||||||||||||||||
(Dollars in thousands) | Three Months Ended June 30, 2016 |
Six Months Ended June 30, 2016 |
||||||||||||||||||
Loan Portfolio Hedging |
||||||||||||||||||||
Hedging Instruments: |
||||||||||||||||||||
Interest Rate Swaps |
$ | 6,500 | N/A | $ | 379 | $ | 66 | $ | 109 | |||||||||||
Hedged Items: |
||||||||||||||||||||
Trust Preferred Loans (a) |
N/A | $ | 6,500 | (b) | N/A | $ | (65 | )(c) | $ | (106 | )(c) |
Notional | Assets | Liabilities | Gains/(Losses) | |||||||||||||||||
(Dollars in thousands) | Three Months Ended June 30, 2015 |
Six Months Ended June 30, 2015 |
||||||||||||||||||
Loan Portfolio Hedging |
||||||||||||||||||||
Hedging Instruments: |
||||||||||||||||||||
Interest Rate Swaps |
$ | 6,500 | N/A | $ | 640 | $ | 63 | $ | 104 | |||||||||||
Hedged Items: |
||||||||||||||||||||
Trust Preferred Loans (a) |
N/A | $ | 6,500 | (b) | N/A | $ | (62 | )(c) | $ | (103 | )(c) |
(a) | Assets included in the Loans, net of unearned income section of the Consolidated Condensed Statements of Condition. |
(b) | Represents principal balance being hedged. |
(c) | Represents gains and losses attributable to changes in fair value due to interest rate risk as designated in ASC 815-20 hedging relationships. |
Other Derivatives
In conjunction with the sales of a portion of its Visa Class B shares, FHN and the purchaser entered into derivative transactions whereby FHN will make or receive cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. As of June 30, 2016 and 2015, the derivative liabilities associated with the sales of Visa Class B shares were $6.8 million and $4.8 million, respectively. See the Visa Matters section of Note 10 Contingencies and Other Disclosures for more information regarding FHNs Visa shares.
FHN utilizes cross currency swaps and cross currency interest rate swaps to economically hedge its exposure to foreign currency risk and interest rate risk associated with non-U.S. dollar denominated loans. As of June 30, 2016 and 2015, these loans were valued at
50
Note 14 Derivatives (Continued)
$1.5 million and $3.5 million, respectively. The balance sheet amount and the gains/losses associated with these derivatives were not significant.
Master Netting and Similar Agreements
As previously discussed, FHN uses master netting agreements, mutual margining agreements and collateral posting requirements to minimize credit risk on derivative contracts. Master netting and similar agreements are used when counterparties have multiple derivatives contracts that allow for a right of setoff, meaning that a counterparty may net offsetting positions and collateral with the same counterparty under the contract to determine a net receivable or payable. The following discussion provides an overview of these arrangements which may vary due to the derivative type and market in which a derivative transaction is executed.
Interest rate derivatives are subject to agreements consistent with standard agreement forms of the International Swap and Derivatives Association (ISDA). Currently, all interest rate derivative contracts are entered into as over-the-counter transactions and collateral posting requirements are based on the net asset or liability position with each respective counterparty. For contracts that require central clearing, novation to a counterparty with access to a clearinghouse occurs and collateral is posted. Cash collateral received (posted) for interest rate derivatives is recognized as a liability (asset) on FHNs Consolidated Condensed Statements of Condition.
Interest rate derivatives with customers that are smaller financial institutions typically require posting of collateral by the counterparty to FHN. This collateral is subject to a threshold with daily adjustments based upon changes in the level or fair value of the derivative position. Positions and related collateral can be netted in the event of default. Collateral pledged by a counterparty is typically cash or securities. The securities pledged as collateral are not recognized within FHNs Consolidated Condensed Statements of Condition. Interest rate derivatives associated with lending arrangements share the collateral with the related loan(s). The derivative and loan positions may be netted in the event of default. For disclosure purposes, the entire collateral amount is allocated to the loan.
Interest rate derivatives with larger financial institutions entered into prior to required central clearing typically contain provisions whereby the collateral posting thresholds under the agreements adjust based on the credit ratings of both counterparties. If the credit rating of FHN and/or FTBNA is lowered, FHN could be required to post additional collateral with the counterparties. Conversely, if the credit rating of FHN and/or FTBNA is increased, FHN could have collateral released and be required to post less collateral in the future. Also, if a counterpartys credit ratings were to decrease, FHN and/or FTBNA could require the posting of additional collateral; whereas if a counterpartys credit ratings were to increase, the counterparty could require the release of excess collateral. Collateral for these arrangements is adjusted daily based on changes in the net fair value position with each counterparty.
The net fair value, determined by individual counterparty, of all derivative instruments with adjustable collateral posting thresholds was $95.0 million of assets and $81.3 million of liabilities on June 30, 2016, and $72.5 million of assets and $71.6 million of liabilities on June 30, 2015. As of June 30, 2016 and 2015, FHN had received collateral of $168.0 million and $144.2 million and posted collateral of $81.3 million and $71.9 million, respectively, in the normal course of business related to these agreements.
Certain agreements entered into prior to required central clearing also contain accelerated termination provisions, inclusive of the right of offset, if a counterpartys credit rating falls below a specified level. If a counterpartys debt rating (including FHNs and FTBNAs) were to fall below these minimums, these provisions would be triggered, and the counterparties could terminate the agreements and require immediate settlement of all derivative contracts under the agreements. The net fair value, determined by individual counterparty, of all derivative instruments with credit-risk-related contingent accelerated termination provisions was $94.6 million of assets and $30.7 million of liabilities on June 30, 2016, and $72.5 million of assets and $17.0 million of liabilities on June 30, 2015. As of June 30, 2016 and 2015, FHN had received collateral of $168.0 million and $144.2 million and posted collateral of $33.2 million and $23.3 million, respectively, in the normal course of business related to these contracts.
FHNs fixed income segment buys and sells various types of securities for its customers. When these securities settle on a delayed basis, they are considered forward contracts, and are generally not subject to master netting agreements. For futures and options, FHN transacts through a third party, and the transactions are subject to margin and collateral maintenance requirements. In the event of default, open positions can be offset along with the associated collateral.
For this disclosure, FHN considers the impact of master netting and other similar agreements which allow FHN to settle all contracts with a single counterparty on a net basis and to offset the net derivative asset or liability position with the related securities and cash collateral. The application of the collateral cannot reduce the net derivative asset or liability position below zero, and therefore any excess collateral is not reflected in the tables below.
51
Note 14 Derivatives (Continued)
The following table provides a detail of derivative assets and collateral received as presented on the Consolidated Condensed Statements of Condition as of June 30:
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: |
||||||||||||||||||||||||
2016 (b) |
$ | 175,403 | $ | | $ | 175,403 | $ | (13,963 | ) | $ | (141,426 | ) | $ | 20,014 | ||||||||||
2015 (b) |
109,874 | | 109,874 | (15,750 | ) | (93,656 | ) | 468 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Included in Derivative assets on the Consolidated Condensed Statements of Condition. As of June 30, 2016 and 2015, $21.6 million and $5.4 million, respectively, of derivative assets (primarily fixed income forward contracts) have been excluded from these tables because they are generally not subject to master netting or similar agreements. |
(b) | 2016 and 2015 are comprised entirely of interest rate derivative contracts. |
The following table provides a detail of derivative liabilities and collateral pledged as presented on the Consolidated Condensed Statements of Condition as of June 30:
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: |
||||||||||||||||||||||||
2016 (b) |
$ | 144,165 | $ | | $ | 144,165 | $ | (13,963 | ) | $ | (67,682 | ) | $ | 62,520 | ||||||||||
2015 (b) |
100,191 | | 100,191 | (15,750 | ) | (68,775 | ) | 15,666 | ||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
(a) | Included in Derivative liabilities on the Consolidated Condensed Statements of Condition. As of June 30, 2016 and 2015, $26.5 million and $9.6 million, respectively, of derivative liabilities (primarily fixed income forward contracts) have been excluded from these tables because they are generally not subject to master netting or similar agreements. |
(b) | 2016 and 2015 are comprised entirely of interest rate derivative contracts. |
52
Note 15 Master Netting and Similar Agreements Repurchase, Reverse Repurchase, and Securities Borrowing and Lending Transactions
For repurchase, reverse repurchase and securities borrowing and lending transactions, FHN and each counterparty have the ability to offset all open positions and related collateral in the event of default. Due to the nature of these transactions, the value of the collateral for each transaction approximates the value of the corresponding receivable or payable. For repurchase agreements within FHNs fixed income business, transactions are collateralized by securities which are delivered on the settlement date and are maintained throughout the term of the transaction. For FHNs repurchase agreements through banking activities, securities are typically pledged at the time of the transaction and not released until settlement. For asset positions, the collateral is not included on FHNs Consolidated Condensed Statements of Condition. For liability positions, securities collateral pledged by FHN is generally represented within FHNs trading or available-for-sale securities portfolios.
For this disclosure, FHN considers the impact of master netting and other similar agreements that allow FHN to settle all contracts with a single counterparty on a net basis and to offset the net asset or liability position with the related securities collateral. The application of the collateral cannot reduce the net asset or liability position below zero, and therefore any excess collateral is not reflected in the tables below.
The following table provides a detail of Securities purchased under agreements to resell as presented on the Consolidated Condensed Statements of Condition and collateral pledged by counterparties as of June 30:
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 |
Offsetting securities sold under agreements to repurchase |
Securities collateral (not recognized on FHNs Statements of Condition) |
Net amount |
||||||||||||||||||
Securities purchased under agreements to resell: |
||||||||||||||||||||||||
2016 |
$ | 881,732 | $ | | $ | 881,732 | $ | (2,137 | ) | $ | (870,795 | ) | $ | 8,800 | ||||||||||
2015 |
816,991 | | 816,991 | (3,605 | ) | (805,178 | ) | 8,208 | ||||||||||||||||
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|
The following table provides a detail of Securities sold under agreements to repurchase as presented on the Consolidated Condensed Statements of Condition and collateral pledged by FHN as of June 30:
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 |
Offsetting securities purchased under agreements to resell |
Securities Collateral |
Net amount |
||||||||||||||||||
Securities sold under agreements to repurchase: |
||||||||||||||||||||||||
2016 |
$ | 451,129 | $ | | $ | 451,129 | $ | (2,137 | ) | $ | (448,894 | ) | $ | 98 | ||||||||||
2015 |
311,760 | | 311,760 | (3,605 | ) | (308,088 | ) | 67 | ||||||||||||||||
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53
Note 15 Master Netting and Similar Agreements Repurchase, Reverse Repurchase, and Securities Borrowing and Lending Transactions (Continued)
Due to the short duration of Securities sold under agreements to repurchase and the nature of collateral involved, the risks associated with these transactions are considered minimal. The following table provides a detail, by collateral type, of the remaining contractual maturity of Securities sold under agreements to repurchase as of June 30:
June 30, 2016 | ||||||||||||||||
(Dollars in thousands) |
Overnight and Continuous |
Up to 30 Days |
30 - 90 Days |
Total | ||||||||||||
Securities sold under agreements to repurchase: |
||||||||||||||||
U.S. treasuries |
$ | 28,218 | $ | | $ | | $ | 28,218 | ||||||||
Government agency issued MBS |
308,557 | | 100,304 | 408,861 | ||||||||||||
Government agency issued CMO |
| 14,050 | | 14,050 | ||||||||||||
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|
|||||||||
Total Securities sold under agreements to repurchase |
$ | 336,775 | $ | 14,050 | $ | 100,304 | $ | 451,129 | ||||||||
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|
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|
|
June 30, 2015 | ||||||||||||||||
(Dollars in thousands) |
Overnight and Continuous |
Up to 30 Days |
30 - 90 Days |
Total | ||||||||||||
Securities sold under agreements to repurchase: |
||||||||||||||||
U.S. treasuries |
$ | 15,175 | $ | | $ | | $ | 15,175 | ||||||||
Government agency issued MBS |
93,697 | | | 93,697 | ||||||||||||
Government agency issued CMO |
190,438 | 12,450 | | 202,888 | ||||||||||||
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|
|
|
|
|
|||||||||
Total Securities sold under agreements to repurchase |
$ | 299,310 | $ | 12,450 | $ | | $ | 311,760 | ||||||||
|
|
|
|
|
|
|
|
54
Note 16 Fair Value of Assets & Liabilities
FHN groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. This hierarchy requires FHN to maximize the use of observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Each fair value measurement is placed into the proper level based on the lowest level of significant input. These levels are:
| Level 1 Valuation is based upon quoted prices for identical instruments traded in active markets. |
| Level 2 Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. |
| Level 3 Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect managements estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models, and similar techniques. |
Transfers between fair value levels are recognized at the end of the fiscal quarter in which the associated change in inputs occurs.
55
Note 16 Fair Value of Assets & Liabilities (Continued)
Recurring Fair Value Measurements
The following table presents the balance of assets and liabilities measured at fair value on a recurring basis as of June 30, 2016:
June 30, 2016 | ||||||||||||||||
(Dollars in thousands) |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Trading securities fixed income: |
||||||||||||||||
U.S. treasuries |
$ | | $ | 98,181 | $ | | $ | 98,181 | ||||||||
Government agency issued MBS |
| 328,600 | | 328,600 | ||||||||||||
Government agency issued CMO |
| 235,914 | | 235,914 | ||||||||||||
Other U.S. government agencies |
| 110,354 | | 110,354 | ||||||||||||
States and municipalities |
| 75,793 | | 75,793 | ||||||||||||
Trading loans |
| 10,643 | | 10,643 | ||||||||||||
Corporate and other debt |
| 295,322 | 5 | 295,327 | ||||||||||||
Equity, mutual funds, and other |
| 5,326 | | 5,326 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total trading securities fixed income |
| 1,160,133 | 5 | 1,160,138 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Trading securities mortgage banking |
| | 2,821 | 2,821 | ||||||||||||
Loans held-for-sale |
| | 25,738 | 25,738 | ||||||||||||
Securities available-for-sale: |
||||||||||||||||
U.S. treasuries |
| 100 | | 100 | ||||||||||||
Government agency issued MBS |
| 1,946,222 | | 1,946,222 | ||||||||||||
Government agency issued CMO |
| 1,874,816 | | 1,874,816 | ||||||||||||
States and municipalities |
| | 1,500 | 1,500 | ||||||||||||
Equity, mutual funds, and other |
25,055 | | | 25,055 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total securities available-for-sale |
25,055 | 3,821,138 | 1,500 | 3,847,693 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other assets: |
||||||||||||||||
Mortgage servicing rights |
| | 1,406 | 1,406 | ||||||||||||
Deferred compensation assets |
31,221 | | | 31,221 | ||||||||||||
Derivatives, forwards and futures |
21,573 | | | 21,573 | ||||||||||||
Derivatives, interest rate contracts |
| 175,416 | | 175,416 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other assets |
52,794 | 175,416 | 1,406 | 229,616 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | 77,849 | $ | 5,156,687 | $ | 31,470 | $ | 5,266,006 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Trading liabilities fixed income: |
||||||||||||||||
U.S. treasuries |
$ | | $ | 549,739 | $ | | $ | 549,739 | ||||||||
Government agency issued CMO |
| 1,563 | | 1,563 | ||||||||||||
Other U.S. government agencies |
| 25,095 | | 25,095 | ||||||||||||
States and municipalities |
| 1,127 | | 1,127 | ||||||||||||
Corporate and other debt |
| 212,016 | | 212,016 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total trading liabilities fixed income |
| 789,540 | | 789,540 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other liabilities: |
||||||||||||||||
Derivatives, forwards and futures |
19,618 | | | 19,618 | ||||||||||||
Derivatives, interest rate contracts |
| 144,165 | | 144,165 | ||||||||||||
Derivatives, other |
| 1 | 6,835 | 6,836 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other liabilities |
19,618 | 144,166 | 6,835 | 170,619 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
$ | 19,618 | $ | 933,706 | $ | 6,835 | $ | 960,159 | ||||||||
|
|
|
|
|
|
|
|
56
Note 16 Fair Value of Assets & Liabilities (Continued)
The following table presents the balance of assets and liabilities measured at fair value on a recurring basis as of June 30, 2015:
June 30, 2015 | ||||||||||||||||
(Dollars in thousands) |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Trading securities fixed income: |
||||||||||||||||
U.S. treasuries |
$ | | $ | 109,998 | $ | | $ | 109,998 | ||||||||
Government agency issued MBS |
| 327,082 | | 327,082 | ||||||||||||
Government agency issued CMO |
| 146,675 | | 146,675 | ||||||||||||
Other U.S. government agencies |
| 83,416 | | 83,416 | ||||||||||||
States and municipalities |
| 64,597 | | 64,597 | ||||||||||||
Corporate and other debt |
| 393,191 | 5 | 393,196 | ||||||||||||
Equity, mutual funds, and other |
| 3,602 | | 3,602 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total trading securities fixed income |
| 1,128,561 | 5 | 1,128,566 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Trading securities mortgage banking |
| | 4,924 | 4,924 | ||||||||||||
Loans held-for-sale |
| | 26,525 | 26,525 | ||||||||||||
Securities available-for-sale: |
||||||||||||||||
U.S. treasuries |
| 100 | | 100 | ||||||||||||
Government agency issued MBS |
| 830,640 | | 830,640 | ||||||||||||
Government agency issued CMO |
| 2,625,286 | | 2,625,286 | ||||||||||||
Other U.S. government agencies |
| | 1,560 | 1,560 | ||||||||||||
States and municipalities |
| 7,955 | 1,500 | 9,455 | ||||||||||||
Equity, mutual funds, and other |
25,825 | | | 25,825 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total securities available-for-sale |
25,825 | 3,463,981 | 3,060 | 3,492,866 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other assets: |
||||||||||||||||
Mortgage servicing rights |
| | 2,158 | 2,158 | ||||||||||||
Deferred compensation assets |
27,341 | | | 27,341 | ||||||||||||
Derivatives, forwards and futures |
5,299 | | | 5,299 | ||||||||||||
Derivatives, interest rate contracts |
| 109,929 | | 109,929 | ||||||||||||
Derivatives, other |
| 2 | | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other assets |
32,640 | 109,931 | 2,158 | 144,729 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | 58,465 | $ | 4,702,473 | $ | 36,672 | $ | 4,797,610 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Trading liabilities fixed income: |
||||||||||||||||
U.S. treasuries |
$ | | $ | 406,879 | $ | | $ | 406,879 | ||||||||
Government agency issued MBS |
| 1,486 | | 1,486 | ||||||||||||
Other U.S. government agencies |
| 25,036 | | 25,036 | ||||||||||||
Corporate and other debt |
| 299,163 | | 299,163 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total trading liabilities fixed income |
| 732,564 | | 732,564 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other liabilities: |
||||||||||||||||
Derivatives, forwards and futures |
4,788 | | | 4,788 | ||||||||||||
Derivatives, interest rate contracts |
| 100,191 | | 100,191 | ||||||||||||
Derivatives, other |
| 26 | 4,810 | 4,836 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other liabilities |
4,788 | 100,217 | 4,810 | 109,815 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
$ | 4,788 | $ | 832,781 | $ | 4,810 | $ | 842,379 | ||||||||
|
|
|
|
|
|
|
|
57
Note 16 Fair Value of Assets & Liabilities (Continued)
Changes in Recurring Level 3 Fair Value Measurements
The changes in Level 3 assets and liabilities measured at fair value for the three months ended June 30, 2016 and 2015, on a recurring basis are summarized as follows:
Three Months Ended June 30, 2016 | ||||||||||||||||||||
(Dollars in thousands) |
Trading securities |
Loans held- for- sale |
Securities available- for-sale |
Mortgage servicing rights, net |
Net derivative liabilities |
|||||||||||||||
Balance on April 1, 2016 |
$ | 3,057 | $ | 26,287 | $ | 1,500 | $ | 1,725 | $ | (4,620 | ) | |||||||||
Total net gains/(losses) included in: |
||||||||||||||||||||
Net income |
55 | 429 | | 31 | (2,514 | ) | ||||||||||||||
Other comprehensive income /(loss) |
| | | | | |||||||||||||||
Purchases |
| 327 | | | | |||||||||||||||
Issuances |
| | | | | |||||||||||||||
Sales |
| | | (205 | ) | | ||||||||||||||
Settlements |
(286 | ) | (1,132 | ) | | (145 | ) | 299 | ||||||||||||
Net transfers into/(out of) Level 3 |
| (173 | )(b) | | | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance on June 30, 2016 |
$ | 2,826 | $ | 25,738 | $ | 1,500 | $ | 1,406 | $ | (6,835 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net unrealized gains/(losses) included in net income |
$ | (5 | )(a) | $ | 429 | (a) | $ | | $ | | $ | (2,514 | )(c) | |||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2015 | ||||||||||||||||||||
(Dollars in thousands) |
Trading securities |
Loans held- for- sale |
Securities available- for-sale |
Mortgage servicing rights, net |
Net derivative liabilities |
|||||||||||||||
Balance on April 1, 2015 |
$ | 5,326 | $ | 26,700 | $ | 3,191 | $ | 2,342 | $ | (5,005 | ) | |||||||||
Total net gains/(losses) included in: |
||||||||||||||||||||
Net income |
69 | 248 | | | (107 | ) | ||||||||||||||
Other comprehensive income /(loss) |
| | (14 | ) | | | ||||||||||||||
Purchases |
| 324 | | | | |||||||||||||||
Issuances |
| | | | | |||||||||||||||
Sales |
| | | | | |||||||||||||||
Settlements |
(466 | ) | (329 | ) | (117 | ) | (184 | ) | 302 | |||||||||||
Net transfers into/(out of) Level 3 |
| (418 | )(b) | | | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance on June 30, 2015 |
$ | 4,929 | $ | 26,525 | $ | 3,060 | $ | 2,158 | $ | (4,810 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net unrealized gains/(losses) included in net income |
$ | 69 | (a) | $ | 248 | (a) | $ | | $ | | $ | (107 | )(c) | |||||||
|
|
|
|
|
|
|
|
|
|
(a) | Primarily included in mortgage banking income on the Consolidated Condensed Statements of Income. |
(b) | Transfers out of recurring loans held-for-sale level 3 balances reflect movements out of recurring loans held-for-sale and into real estate acquired by foreclosure (level 3 nonrecurring). |
(c) | Included in Other expense. |
58
Note 16 Fair Value of Assets & Liabilities (Continued)
Changes in Recurring Level 3 Fair Value Measurements
The changes in Level 3 assets and liabilities measured at fair value for the six months ended June 30, 2016 and 2015, on a recurring basis are summarized as follows:
Six Months Ended June 30, 2016 | ||||||||||||||||||||
(Dollars in thousands) |
Trading securities |
Loans held- for- sale |
Securities available- for-sale |
Mortgage servicing rights, net |
Net derivative liabilities |
|||||||||||||||
Balance on January 1, 2016 |
$ | 4,377 | $ | 27,418 | $ | 1,500 | $ | 1,841 | $ | (4,810 | ) | |||||||||
Total net gains/(losses) included in: |
||||||||||||||||||||
Net income |
202 | 771 | | 31 | (2,623 | ) | ||||||||||||||
Other comprehensive income / (loss) |
| | | | | |||||||||||||||
Purchases |
| 475 | | | | |||||||||||||||
Issuances |
| | | | | |||||||||||||||
Sales |
| | | (205 | ) | | ||||||||||||||
Settlements |
(1,753 | ) | (2,497 | ) | | (261 | ) | 598 | ||||||||||||
Net transfers into/(out of) Level 3 |
| (429 | )(b) | | | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance on June 30, 2016 |
$ | 2,826 | $ | 25,738 | $ | 1,500 | $ | 1,406 | $ | (6,835 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net unrealized gains/(losses) included in net income |
$ | 79 | (a) | $ | 771 | (a) | $ | | $ | | $ | (2,623 | )(c) | |||||||
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2015 | ||||||||||||||||||||
(Dollars in thousands) |
Trading securities |
Loans held- for- sale |
Securities available- for-sale |
Mortgage servicing rights, net |
Net derivative liabilities |
|||||||||||||||
Balance on January 1, 2015 |
$ | 5,642 | $ | 27,910 | $ | 3,307 | $ | 2,517 | $ | (5,240 | ) | |||||||||
Total net gains/(losses) included in: |
||||||||||||||||||||
Net income |
239 | 1,390 | | | (164 | ) | ||||||||||||||
Other comprehensive income /(loss) |
| | (28 | ) | | | ||||||||||||||
Purchases |
| 1,178 | | | | |||||||||||||||
Issuances |
| | | | | |||||||||||||||
Sales |
| | | | | |||||||||||||||
Settlements |
(952 | ) | (2,819 | ) | (219 | ) | (359 | ) | 594 | |||||||||||
Net transfers into/(out of) Level 3 |
| (1,134 | )(b) | | | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance on June 30, 2015 |
$ | 4,929 | $ | 26,525 | $ | 3,060 | $ | 2,158 | $ | (4,810 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net unrealized gains/(losses) included in net income |
$ | 239 | (a) | $ | 1,390 | (a) | $ | | $ | | $ | (164 | )(c) | |||||||
|
|
|
|
|
|
|
|
|
|
(a) | Primarily included in mortgage banking income on the Consolidated Condensed Statements of Income. |
(b) | Transfers out of recurring loans held-for-sale level 3 balances reflect movements out of recurring loans held-for-sale and into real estate acquired by foreclosure (level 3 nonrecurring). |
(c) | Included in Other expense. |
59
Note 16 Fair Value of Assets & Liabilities (Continued)
Nonrecurring Fair Value Measurements
From time to time, FHN may be required to measure certain other financial assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of LOCOM accounting or write-downs of individual assets. For assets measured at fair value on a nonrecurring basis which were still held on the balance sheet at June 30, 2016 and 2015, respectively, the following tables provide the level of valuation assumptions used to determine each adjustment, the related carrying value, and the fair value adjustments recorded during the respective periods.
Carrying value at June 30, 2016 | Three Months Ended June 30, 2016 |
Six Months Ended June 30, 2016 |
||||||||||||||||||||||
(Dollars in thousands) |
Level 1 | Level 2 | Level 3 | Total | Net gains/(losses) |
Net gains/(losses) |
||||||||||||||||||
Loans held-for-sale - first mortgages |
$ | | $ | | $ | 721 | $ | 721 | $ | 2 | $ | 7 | ||||||||||||
Loans, net of unearned income (a) |
| | 35,314 | 35,314 | 353 | (4,319 | ) | |||||||||||||||||
Real estate acquired by foreclosure (b) |
| | 14,150 | 14,150 | (314 | ) | (850 | ) | ||||||||||||||||
Other assets (c) |
| | 28,588 | 28,588 | (831 | ) | (1,537 | ) | ||||||||||||||||
|
|
|
|
|||||||||||||||||||||
$ | (790 | ) | $ | (6,699 | ) | |||||||||||||||||||
|
|
|
|
Carrying value at June 30, 2015 | Three Months Ended June 30, 2015 |
Six Months Ended June 30, 2015 |
||||||||||||||||||||||
(Dollars in thousands) |
Level 1 | Level 2 | Level 3 | Total | Net gains/(losses) |
Net gains/(losses) |
||||||||||||||||||
Loans held-for-sale - first mortgages |
$ | | $ | | $ | 849 | $ | 849 | $ | | $ | 38 | ||||||||||||
Loans, net of unearned income (a) |
| | 38,913 | 38,913 | (479 | ) | (1,841 | ) | ||||||||||||||||
Real estate acquired by foreclosure (b) |
| | 29,109 | 29,109 | (1,284 | ) | (1,660 | ) | ||||||||||||||||
Other assets (c) |
| | 28,265 | 28,265 | (549 | ) | (944 | ) | ||||||||||||||||
|
|
|
|
|||||||||||||||||||||
$ | (2,312 | ) | $ | (4,407 | ) | |||||||||||||||||||
|
|
|
|
Certain previously reported amounts have been reclassified to agree with current presentation.
(a) | Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for loan losses. |
(b) | Represents the fair value and related losses of foreclosed properties that were measured subsequent to their initial classification as foreclosed assets. Balance excludes foreclosed real estate related to government insured mortgages. |
(c) | Represents tax credit investments accounted for under the equity method. |
In first quarter 2016, FHNs Regional Banking segment recognized $3.7 million of impairments on long-lived assets associated with efforts to more efficiently utilize its bank branch locations. The affected branch locations represented a mixture of owned and leased sites. The fair values of owned sites were determined using estimated sales prices from appraisals less estimated costs to sell. The fair values of leased sites were determined using a discounted cash flow approach, based on the revised estimated useful lives of the related assets. Both measurement methodologies are considered Level 3 valuations.
60
Note 16 Fair Value of Assets & Liabilities (Continued)
Level 3 Measurements
The following tables provide information regarding the unobservable inputs utilized in determining the fair value of level 3 recurring and non-recurring measurements as of June 30, 2016 and 2015:
(Dollars in Thousands)
Level 3 Class |
Fair Value at June 30, 2016 |
Valuation Techniques |
Unobservable Input |
Values Utilized | ||||||
Trading securities - mortgage |
$ | 2,821 | Discounted cash flow | Prepayment speeds | 38% - 47% | |||||
|
| |||||||||
Discount rate | 28% - 68% | |||||||||
| ||||||||||
Loans held-for-sale - residential real estate |
26,459 | Discounted cash flow | Prepayment speeds - First mortgage | 2% - 20% | ||||||
|
| |||||||||
Prepayment speeds - HELOC | 5% - 15% | |||||||||
|
| |||||||||
Foreclosure losses | 47% - 58% | |||||||||
|
| |||||||||
Loss severity trends -First mortgage | 5% - 70% of UPB | |||||||||
|
| |||||||||
Loss severity trends - HELOC | 35% - 100% of UPB | |||||||||
|
| |||||||||
Draw rate - HELOC | 5% - 12% | |||||||||
| ||||||||||
Derivative liabilities, other |
6,835 | Discounted cash flow | Visa covered litigation resolution amount | $4.4 billion - $5.2 billion | ||||||
|
| |||||||||
Probability of resolution scenarios | 10% - 30% | |||||||||
|
| |||||||||
Time until resolution | 30 - 60 months | |||||||||
| ||||||||||
Loans, net of unearned income (a) |
35,314 | Appraisals from comparable properties | Marketability adjustments for specific properties | 0% - 10% of appraisal | ||||||
|
|
| ||||||||
Other collateral valuations | Borrowing base certificates adjustment | 20% - 50% of gross value | ||||||||
|
| |||||||||
Financial Statements/Auction values adjustment | 0% - 25% of reported value | |||||||||
| ||||||||||
Real estate acquired by foreclosure (b) |
14,150 | Appraisals from comparable properties | Adjustment for value changes since appraisal | 0% - 10% of appraisal | ||||||
| ||||||||||
Other assets (c) |
28,588 | Discounted cash flow | Adjustments to current sales yields for specific properties | 0% - 15% adjustment to yield | ||||||
|
|
| ||||||||
Appraisals from comparable properties | Marketability adjustments for specific properties | 0% - 25% of appraisal | ||||||||
|
(a) | Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for loan losses. |
(b) | Represents the fair value of foreclosed properties that were measured subsequent to their initial classification as foreclosed assets. Balance excludes foreclosed real estate related to government insured mortgages. |
(c) | Represents tax credit investments accounted for under the equity method. |
61
Note 16 Fair Value of Assets & Liabilities (Continued)
(Dollars in Thousands)
Level 3 Class |
Fair Value at June 30, 2015 |
Valuation Techniques |
Unobservable Input |
Values Utilized | ||||||
Trading securities - mortgage |
$ | 4,924 | Discounted cash flow | Prepayment speeds | 42% - 43% | |||||
|
| |||||||||
Discount rate | 5% - 56% | |||||||||
| ||||||||||
Loans held-for-sale - residential real estate |
27,374 | Discounted cash flow | Prepayment speeds - First mortgage | 2% - 20% | ||||||
|
| |||||||||
Prepayment speeds - HELOC | 5% - 15% | |||||||||
|
| |||||||||
Foreclosure Losses | 50% - 60% | |||||||||
|
| |||||||||
Loss severity trends - First mortgage | 10% - 70% of UPB | |||||||||
|
| |||||||||
Loss severity trends - HELOC | 35% - 100% of UPB | |||||||||
|
| |||||||||
Draw Rate - HELOC | 5% - 12% | |||||||||
| ||||||||||
Derivative liabilities, other |
4,810 | Discounted cash flow | Visa covered litigation resolution amount | $4.5 billion - $5.5 billion | ||||||
|
| |||||||||
Probability of resolution scenarios | 5% - 25% | |||||||||
|
| |||||||||
Time until resolution | 6 - 42 months | |||||||||
| ||||||||||
Loans, net of unearned income (a) |
38,913 | Appraisals from comparable properties | Marketability adjustments for specific properties | 0% - 10% of appraisal | ||||||
|
|
| ||||||||
Other collateral valuations | Borrowing base certificates adjustment | 20% - 50% of gross value | ||||||||
|
| |||||||||
Financial Statements/Auction Values adjustment | 0% - 25% of reported value | |||||||||
| ||||||||||
Real estate acquired by foreclosure (b) |
29,109 | Appraisals from comparable properties | Adjustment for value changes since appraisal | 0% - 10% of appraisal | ||||||
| ||||||||||
Other assets (c) |
28,265 | Discounted cash flow | Adjustments to current sales yields for specific properties | 0% - 15% adjustment to yield | ||||||
|
|
| ||||||||
Appraisals from comparable properties | Marketability adjustments for specific properties | 0% - 25% of appraisal | ||||||||
|
(a) | Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for loan losses. |
(b) | Represents the fair value of foreclosed properties that were measured subsequent to their initial classification as foreclosed assets. Balance excludes foreclosed real estate related to government insured mortgages. |
(c) | Represents tax credit investments accounted for under the equity method. |
Trading securities-mortgage. Prepayment rates and credit spreads (part of the discount rate) are significant unobservable inputs used in the fair value measurement of FHNs mortgage trading securities which include interest-only strips and principal-only strips. Subordinated bonds were also included in mortgage trading securities prior to their payoff in first quarter 2016. Increases in prepayment rates and credit spreads in isolation would result in significantly lower fair value measurements for the associated assets. Conversely, decreases in prepayment rates and credit spreads in isolation would result in significantly higher fair value measurements for the associated assets. Generally, when market interest rates decline and other factors favorable to prepayments occur, there is a corresponding increase in prepayment rates as customers are expected to refinance existing mortgages under more favorable interest rate terms. Generally, changes in discount rates directionally mirror the changes in market interest rates. FHNs Corporate Accounting Department monitors changes in the fair value of these securities monthly.
Loans held-for-sale. Foreclosure losses and prepayment rates are significant unobservable inputs used in the fair value measurement of FHNs residential real estate loans held-for-sale. Loss severity trends are also assessed to evaluate the reasonableness of fair value estimates resulting from discounted cash flows methodologies as well as to estimate fair value for newly repurchased loans and loans that are near foreclosure. Significant increases (decreases) in any of these inputs in isolation would result in significantly lower (higher) fair value measurements. Draw rates are an additional significant unobservable input for HELOCs. Increases (decreases) in the draw rate estimates for HELOCs would increase (decrease) their fair value. All observable and unobservable inputs are re-assessed quarterly. Fair value measurements are reviewed at least quarterly by FHNs Corporate Accounting Department.
62
Note 16 Fair Value of Assets & Liabilities (Continued)
Derivative liabilities. In conjunction with the sales of portions of its Visa Class B shares, FHN and the purchaser entered into derivative transactions whereby FHN will make, or receive, cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. FHN uses a discounted cash flow methodology in order to estimate the fair value of FHNs derivative liabilities associated with its prior sales of Visa Class B shares. The methodology includes estimation of both the resolution amount for Visas Covered Litigation matters as well as the length of time until the resolution occurs. Significant increases (decreases) in either of these inputs in isolation would result in significantly higher (lower) fair value measurements for the derivative liabilities. Additionally, FHN performs a probability weighted multiple resolution scenario to calculate the estimated fair value of these derivative liabilities. Assignment of higher (lower) probabilities to the larger potential resolution scenarios would result in an increase (decrease) in the estimated fair value of the derivative liabilities. Since this estimation process requires application of judgment in developing significant unobservable inputs used to determine the possible outcomes and the probability weighting assigned to each scenario, these derivatives have been classified within Level 3 in fair value measurements disclosures. The valuation inputs and process are discussed with senior and executive management when significant events affecting the estimate of fair value occur. Inputs are compared to information obtained from the public issuances and filings of Visa, Inc. as well as public information released by other participants in the applicable litigation matters.
Loans, net of unearned income and Real estate acquired by foreclosure. Collateral-dependent loans and Real estate acquired by foreclosure are primarily valued using appraisals based on sales of comparable properties in the same or similar markets. Multiple appraisal firms are utilized to ensure that estimated values are consistent between firms. This process occurs within FHNs Credit Risk Management (commercial) and Default Servicing functions (primarily consumer) and the Credit Risk Management Committee reviews valuation methodologies and loss information for reasonableness. Back testing is performed during the year through comparison to ultimate disposition values and is reviewed quarterly within the Credit Risk Management function. Other collateral (receivables, inventory, equipment, etc.) is valued through borrowing base certificates, financial statements and/or auction valuations. These valuations are discounted based on the quality of reporting, knowledge of the marketability/collectability of the collateral and historical disposition rates.
Other assets tax credit investments. The estimated fair value of tax credit investments accounted for under the equity method is generally determined in relation to the yield (i.e., future tax credits to be received) an acquirer of these investments would expect in relation to the yields experienced on current new issue and/or secondary market transactions. Thus, as tax credits are recognized, the future yield to a market participant is reduced, resulting in consistent impairment of the individual investments. Individual investments are reviewed for impairment quarterly, which may include the consideration of additional marketability discounts related to specific investments which typically includes consideration of the underlying propertys appraised value. Unusual valuation adjustments and the associated triggering events are discussed with senior and executive management when appropriate. A portfolio review is conducted annually, with the assistance of a third party, to assess the reasonableness of current valuations.
Fair Value Option
FHN elected the fair value option on a prospective basis for almost all types of mortgage loans originated for sale purposes under the Financial Instruments Topic (ASC 825). FHN determined that the election reduced certain timing differences and better matched changes in the value of such loans with changes in the value of derivatives used as economic hedges for these assets at the time of election.
Repurchased loans are recognized within loans held-for-sale at fair value at the time of repurchase, which includes consideration of the credit status of the loans and the estimated liquidation value. FHN has elected to continue recognition of these loans at fair value in periods subsequent to reacquisition. Due to the credit-distressed nature of the vast majority of repurchased loans and the related loss severities experienced upon repurchase, FHN believes that the fair value election provides a more timely recognition of changes in value for these loans that occur subsequent to repurchase. Absent the fair value election, these loans would be subject to valuation at the LOCOM value, which would prevent subsequent values from exceeding the initial fair value, determined at the time of repurchase, but would require recognition of subsequent declines in value. Thus, the fair value election provides for a more timely recognition of any potential future recoveries in asset values while not affecting the requirement to recognize subsequent declines in value.
63
Note 16 Fair Value of Assets & Liabilities (Continued)
The following tables reflect the differences between the fair value carrying amount of residential real estate loans held-for-sale measured at fair value in accordance with managements election and the aggregate unpaid principal amount FHN is contractually entitled to receive at maturity.
June 30, 2016 | ||||||||||||
(Dollars in thousands) |
Fair value carrying amount |
Aggregate unpaid principal |
Fair value carrying amount less aggregate unpaid principal |
|||||||||
Residential real estate loans held-for-sale reported at fair value: |
||||||||||||
Total loans |
$ | 25,738 | $ | 39,202 | $ | (13,464 | ) | |||||
Nonaccrual loans |
6,923 | 13,837 | (6,914 | ) | ||||||||
Loans 90 days or more past due and still accruing |
136 | 214 | (78 | ) |
June 30, 2015 | ||||||||||||
(Dollars in thousands) |
Fair value carrying amount |
Aggregate unpaid principal |
Fair value carrying amount less aggregate unpaid principal |
|||||||||
Residential real estate loans held-for-sale reported at fair value: |
||||||||||||
Total loans |
$ | 26,525 | $ | 40,577 | $ | (14,052 | ) | |||||
Nonaccrual loans |
6,238 | 12,316 | (6,078 | ) | ||||||||
Loans 90 days or more past due and still accruing |
1,622 | 2,056 | (434 | ) |
Assets and liabilities accounted for under the fair value election are initially measured at fair value with subsequent changes in fair value recognized in earnings. Such changes in the fair value of assets and liabilities for which FHN elected the fair value option are included in current period earnings with classification in the income statement line item reflected in the following table:
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Changes in fair value included in net income: |
||||||||||||||||
Mortgage banking noninterest income |
||||||||||||||||
Loans held-for-sale |
$ | 429 | $ | 248 | $ | 771 | $ | 1,390 |
For the three months ended June 30, 2016, and 2015, the amounts for residential real estate loans held-for-sale include gains of $.2 million and $.3 million, respectively, in pretax earnings that are attributable to changes in instrument-specific credit risk. For the six months ended June 30, 2016, and 2015, the amounts for loans held-for-sale include gains of $.3 million and $.7 million, respectively, in pretax earnings that are attributable to changes in instrument-specific credit risk. The portion of the fair value adjustments related to credit risk was determined based on estimated default rates and estimated loss severities. Interest income on residential real estate loans held-for-sale measured at fair value is calculated based on the note rate of the loan and is recorded in the interest income section of the Consolidated Condensed Statements of Income as interest on loans held-for-sale.
Determination of Fair Value
In accordance with ASC 820-10-35, fair values are based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following describes the assumptions and methodologies used to estimate the fair value of financial instruments recorded at fair value in the Consolidated Condensed Statements of Condition and for estimating the fair value of financial instruments for which fair value is disclosed under ASC 825-10-50.
Short-term financial assets. Federal funds sold, securities purchased under agreements to resell, and interest bearing deposits with other financial institutions and the Federal Reserve are carried at historical cost. The carrying amount is a reasonable estimate of fair value because of the relatively short time between the origination of the instrument and its expected realization.
Trading securities and trading liabilities. Trading securities and trading liabilities are recognized at fair value through current earnings. Trading inventory held for broker-dealer operations is included in trading securities and trading liabilities. Broker-dealer long positions are valued at bid price in the bid-ask spread. Short positions are valued at the ask price. Inventory positions are valued using observable inputs including current market transactions, LIBOR and U.S. treasury curves, credit spreads, and consensus prepayment speeds. Trading loans are valued using observable inputs including current market transactions, swap rates, mortgage rates, and consensus prepayment speeds.
64
Note 16 Fair Value of Assets & Liabilities (Continued)
Trading securities also include retained interests in prior securitizations that qualify as financial assets, which include interest-only strips and principal-only strips. Subordinated bonds were included in mortgage trading securities prior to payoff in first quarter 2016. FHN uses inputs including yield curves, credit spreads, and prepayment speeds to determine the fair value of interest-only and principal-only strips. Subordinated bonds are bonds with junior priority and were valued using an internal model which included contractual terms, frequency and severity of loss (credit spreads), prepayment speeds of the underlying collateral, and the yield that a market participant would require.
Securities available-for-sale. Securities available-for-sale includes the investment portfolio accounted for as available-for-sale under ASC 320-10-25, federal bank stock holdings, and short-term investments in mutual funds. Valuations of available-for-sale securities are performed using observable inputs obtained from market transactions in similar securities. Typical inputs include LIBOR and U.S. treasury curves, consensus prepayment estimates, and credit spreads. When available, broker quotes are used to support these valuations. Prior to disposition in fourth quarter 2015, certain government agency debt obligations with limited trading activity were valued using a discounted cash flow model that incorporated a combination of observable and unobservable inputs. Primary observable inputs included contractual cash flows and the treasury curve. Significant unobservable inputs included estimated trading spreads and estimated prepayment speeds.
Investments in the stock of the Federal Reserve Bank and Federal Home Loan Banks are recognized at historical cost in the Consolidated Condensed Statements of Condition which is considered to approximate fair value. Short-term investments in mutual funds are measured at the funds reported closing net asset values. Investments in equity securities are valued using quoted market prices.
Securities held-to-maturity. Securities held-to-maturity reflects debt securities for which management has the positive intent and ability to hold to maturity. To the extent possible, valuations of held-to-maturity securities are performed using observable inputs obtained from market transactions in similar securities. Typical inputs include LIBOR and U.S. treasury curves and credit spreads. Debt securities with limited trading activity are valued using a discounted cash flow model that incorporates a combination of observable and unobservable inputs. Primary observable inputs include contractual cash flows, the treasury curve and credit spreads from similar instruments. Significant unobservable inputs include estimated credit spreads for individual issuers and instruments as well as prepayment speeds, as applicable.
Loans held-for-sale. Residential real estate loans held-for-sale are valued using current transaction prices and/or values on similar assets when available. Uncommitted bids may be adjusted based on other available market information. For all other loans FHN determines the fair value of residential real estate loans held-for-sale using a discounted cash flow model which incorporates both observable and unobservable inputs. Inputs include current mortgage rates for similar products, estimated prepayment rates, foreclosure losses, and various loan performance measures (delinquency, LTV, credit score). Adjustments for delinquency and other differences in loan characteristics are typically reflected in the models discount rates. Loss severity trends and the value of underlying collateral are also considered in assessing the appropriate fair value for severely delinquent loans and loans in foreclosure. The valuation of HELOCs also incorporates estimates of loan draw rates as well as estimated cancellation rates for loans expected to become delinquent.
Loans held-for-sale also include loans made by the Small Business Administration (SBA), which are accounted for at LOCOM. The fair value of SBA loans is determined using an expected cash flow model that utilizes observable inputs such as the spread between LIBOR and prime rates, consensus prepayment speeds, and the treasury curve. The fair value of other non-residential real estate loans held-for-sale is approximated by their carrying values based on current transaction values.
Loans, net of unearned income. Loans, net of unearned income are recognized at the amount of funds advanced, less charge-offs and an estimation of credit risk represented by the allowance for loan losses. The fair value estimates for disclosure purposes differentiate loans based on their financial characteristics, such as product classification, vintage, loan category, pricing features, and remaining maturity.
The fair value of floating rate loans is estimated through comparison to recent market activity in loans of similar product types, with adjustments made for differences in loan characteristics. In situations where market pricing inputs are not available, fair value is considered to approximate book value due to the monthly repricing for commercial and consumer loans, with the exception of floating rate 1-4 family residential mortgage loans which reprice annually and will lag movements in market rates. The fair value for floating rate 1-4 family mortgage loans is calculated by discounting future cash flows to their present value. Future cash flows are discounted to their present value by using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same time period. Prepayment assumptions based on historical prepayment speeds and industry speeds for similar loans have been applied to the floating rate 1-4 family residential mortgage portfolio.
65
Note 16 Fair Value of Assets & Liabilities (Continued)
The fair value of fixed rate loans is estimated through comparison to recent market activity in loans of similar product types, with adjustments made for differences in loan characteristics. In situations where market pricing inputs are not available, fair value is estimated by discounting future cash flows to their present value. Future cash flows are discounted to their present value by using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same time period. Prepayment assumptions based on historical prepayment speeds and industry speeds for similar loans have been applied to the fixed rate mortgage and installment loan portfolios.
For all loan portfolio classes, adjustments are made to reflect liquidity or illiquidity of the market. Such adjustments reflect discounts that FHN believes are consistent with what a market participant would consider in determining fair value given current market conditions.
Individually impaired loans are measured using either a discounted cash flow methodology or the estimated fair value of the underlying collateral less costs to sell, if the loan is considered collateral-dependent. In accordance with accounting standards, the discounted cash flow analysis utilizes the loans effective interest rate for discounting expected cash flow amounts. Thus, this analysis is not considered a fair value measurement in accordance with ASC 820. However, the results of this methodology are considered to approximate fair value for the applicable loans. Expected cash flows are derived from internally-developed inputs primarily reflecting expected default rates on contractual cash flows. For loans measured using the estimated fair value of collateral less costs to sell, fair value is estimated using appraisals of the collateral. Collateral values are monitored and additional write-downs are recognized if it is determined that the estimated collateral values have declined further. Estimated costs to sell are based on current amounts of disposal costs for similar assets. Carrying value is considered to reflect fair value for these loans.
Mortgage servicing rights. FHN recognizes all classes of MSR at fair value. In third quarter 2013, FHN agreed to sell substantially all of its remaining legacy mortgage servicing. Since that time FHN has used the price in the definitive agreement, as adjusted for the portion of pricing that was not specific to the MSR, as a third-party pricing source in the valuation of the MSR.
Derivative assets and liabilities. The fair value for forwards and futures contracts is based on current transactions involving identical securities. Futures contracts are exchange-traded and thus have no credit risk factor assigned as the risk of non-performance is limited to the clearinghouse used.
Valuations of other derivatives (primarily interest rate related swaps, swaptions, caps, and collars) are based on inputs observed in active markets for similar instruments. Typical inputs include the LIBOR curve, Overnight Indexed Swap (OIS) curve, option volatility, and option skew. In measuring the fair value of these derivative assets and liabilities, FHN has elected to consider credit risk based on the net exposure to individual counterparties. Credit risk is mitigated for these instruments through the use of mutual margining and master netting agreements as well as collateral posting requirements. Any remaining credit risk related to interest rate derivatives is considered in determining fair value through evaluation of additional factors such as customer loan grades and debt ratings. Foreign currency related derivatives also utilize observable exchange rates in the determination of fair value. The determination of fair value for FHNs derivative liabilities associated with its prior sales of Visa Class B shares are classified within Level 3 in the fair value measurements disclosure as previously discussed in the unobservable inputs discussion.
Real estate acquired by foreclosure. Real estate acquired by foreclosure primarily consists of properties that have been acquired in satisfaction of debt. These properties are carried at the lower of the outstanding loan amount or estimated fair value less estimated costs to sell the real estate. Estimated fair value is determined using appraised values with subsequent adjustments for deterioration in values that are not reflected in the most recent appraisal.
Nonearning assets. For disclosure purposes, nonearning financial assets include cash and due from banks, accrued interest receivable, and fixed income receivables. Due to the short-term nature of cash and due from banks, accrued interest receivable, and fixed income receivables, the fair value is approximated by the book value.
Other assets. For disclosure purposes, other assets consist of tax credit investments and deferred compensation assets that are considered financial assets. Tax credit investments accounted for under the equity method are written down to estimated fair value quarterly based on the estimated value of the associated tax credits which incorporates estimates of required yield for hypothetical investors. The fair value of all other tax credit investments is estimated using recent transaction information with adjustments for differences in individual investments. Deferred compensation assets are recognized at fair value, which is based on quoted prices in active markets.
Defined maturity deposits. The fair value of these deposits is estimated by discounting future cash flows to their present value. Future cash flows are discounted by using the current market rates of similar instruments applicable to the remaining maturity. For disclosure purposes, defined maturity deposits include all certificates of deposit and other time deposits.
Undefined maturity deposits. In accordance with ASC 825, the fair value of these deposits is approximated by the book value. For the purpose of this disclosure, undefined maturity deposits include demand deposits, checking interest accounts, savings accounts, and money market accounts.
66
Note 16 Fair Value of Assets & Liabilities (Continued)
Short-term financial liabilities. The fair value of federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings are approximated by the book value. The carrying amount is a reasonable estimate of fair value because of the relatively short time between the origination of the instrument and its expected realization.
Term borrowings. The fair value of term borrowings is based on quoted market prices or dealer quotes for the identical liability when traded as an asset. When pricing information for the identical liability is not available, relevant prices for similar debt instruments are used with adjustments being made to the prices obtained for differences in characteristics of the debt instruments. If no relevant pricing information is available, the fair value is approximated by the present value of the contractual cash flows discounted by the investors yield which considers FHNs and FTBNAs debt ratings.
Other noninterest-bearing liabilities. For disclosure purposes, other noninterest-bearing financial liabilities include accrued interest payable and fixed income payables. Due to the short-term nature of these liabilities, the book value is considered to approximate fair value.
Loan commitments. Fair values of these commitments are based on fees charged to enter into similar agreements taking into account the remaining terms of the agreements and the counterparties credit standing.
Other commitments. Fair values of these commitments are based on fees charged to enter into similar agreements.
The following fair value estimates are determined as of a specific point in time utilizing various assumptions and estimates. The use of assumptions and various valuation techniques, as well as the absence of secondary markets for certain financial instruments, reduces the comparability of fair value disclosures between financial institutions. Due to market illiquidity, the fair values for loans, net of unearned income, loans held-for-sale, and term borrowings as of June 30, 2016 and 2015, involve the use of significant internally-developed pricing assumptions for certain components of these line items. The assumptions and valuations utilized for this disclosure are considered to reflect inputs that market participants would use in transactions involving these instruments as of the measurement date. The valuations of legacy assets, particularly consumer loans within the non-strategic segment and TRUP loans, are influenced by changes in economic conditions since origination and risk perceptions of the financial sector. These considerations affect the estimate of a potential acquirers cost of capital and cash flow volatility assumptions from these assets and the resulting fair value measurements may depart significantly from our internal estimates of the intrinsic value of these assets.
Assets and liabilities that are not financial instruments have not been included in the following table such as the value of long-term relationships with deposit and trust customers, premises and equipment, goodwill and other intangibles, deferred taxes, and certain other assets and other liabilities. Additionally, these measurements are solely for financial instruments as of the measurement date and do not consider the earnings potential of our various business lines. Accordingly, the total of the fair value amounts does not represent, and should not be construed to represent, the underlying value of the Company.
The following tables summarize the book value and estimated fair value of financial instruments recorded in the Consolidated Condensed Statements of Condition as well as unfunded loan commitments and stand by and other commitments as of June 30, 2016 and 2015.
67
Note 16 Fair Value of Assets & Liabilities (Continued)
June 30, 2016 | ||||||||||||||||||||
Book Value | Fair Value | |||||||||||||||||||
(Dollars in thousands) |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Assets: |
||||||||||||||||||||
Loans, net of unearned income and allowance for loan losses |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial, financial and industrial |
$ | 11,098,473 | $ | | $ | | $ | 11,003,089 | $ | 11,003,089 | ||||||||||
Commercial real estate |
1,939,148 | | | 1,915,942 | 1,915,942 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Consumer real estate |
4,581,698 | | | 4,424,739 | 4,424,739 | |||||||||||||||
Permanent mortgage |
421,414 | | | 391,879 | 391,879 | |||||||||||||||
Credit card & other |
348,797 | | | 350,036 | 350,036 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total loans, net of unearned income and allowance for loan losses |
18,389,530 | | | 18,085,685 | 18,085,685 | |||||||||||||||
Short-term financial assets: |
||||||||||||||||||||
Interest-bearing cash |
321,743 | 321,743 | | | 321,743 | |||||||||||||||
Federal funds sold |
40,570 | | 40,570 | | 40,570 | |||||||||||||||
Securities purchased under agreements to resell |
881,732 | | 881,732 | | 881,732 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total short-term financial assets |
1,244,045 | 321,743 | 922,302 | | 1,244,045 | |||||||||||||||
Trading securities (a) |
1,162,959 | | 1,160,133 | 2,826 | 1,162,959 | |||||||||||||||
Loans held-for-sale |
117,976 | | 5,478 | 112,498 | 117,976 | |||||||||||||||
Securities available-for-sale (a) (b) |
4,009,243 | 25,055 | 3,821,138 | 163,050 | 4,009,243 | |||||||||||||||
Securities held-to-maturity |
14,333 | | | 15,101 | 15,101 | |||||||||||||||
Derivative assets (a) |
196,989 | 21,573 | 175,416 | | 196,989 | |||||||||||||||
Other assets: |
||||||||||||||||||||
Tax credit investments |
90,053 | | | 83,506 | 83,506 | |||||||||||||||
Deferred compensation assets |
31,221 | 31,221 | | | 31,221 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other assets |
121,274 | 31,221 | | 83,506 | 114,727 | |||||||||||||||
Nonearning assets: |
||||||||||||||||||||
Cash & due from banks |
283,648 | 283,648 | | | 283,648 | |||||||||||||||
Fixed income receivables |
219,939 | | 219,939 | | 219,939 | |||||||||||||||
Accrued interest receivable |
55,746 | | 55,746 | | 55,746 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonearning assets |
559,333 | 283,648 | 275,685 | | 559,333 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 25,815,682 | $ | 683,240 | $ | 6,360,152 | $ | 18,462,666 | $ | 25,506,058 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities: |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Defined maturity |
$ | 1,264,635 | $ | | $ | 1,274,663 | $ | | $ | 1,274,663 | ||||||||||
Undefined maturity |
19,365,542 | | 19,365,542 | | 19,365,542 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposits |
20,630,177 | | 20,640,205 | | 20,640,205 | |||||||||||||||
Trading liabilities (a) |
789,540 | | 789,540 | | 789,540 | |||||||||||||||
Short-term financial liabilities: |
||||||||||||||||||||
Federal funds purchased |
508,669 | | 508,669 | | 508,669 | |||||||||||||||
Securities sold under agreements to repurchase |
451,129 | | 451,129 | | 451,129 | |||||||||||||||
Other short-term borrowings |
543,033 | | 543,033 | | 543,033 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total short-term financial liabilities |
1,502,831 | | 1,502,831 | | 1,502,831 | |||||||||||||||
Term borrowings: |
||||||||||||||||||||
Real estate investment trust-preferred |
45,998 | | | 49,350 | 49,350 | |||||||||||||||
Term borrowings - new market tax credit investment |
18,000 | | | 18,213 | 18,213 | |||||||||||||||
Borrowings secured by residential real estate |
30,956 | | | 26,715 | 26,715 | |||||||||||||||
Other long term borrowings |
981,989 | | 955,542 | | 955,542 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total term borrowings |
1,076,943 | | 955,542 | 94,278 | 1,049,820 | |||||||||||||||
Derivative liabilities (a) |
170,619 | 19,618 | 144,166 | 6,835 | 170,619 | |||||||||||||||
Other noninterest-bearing liabilities: |
||||||||||||||||||||
Fixed income payables |
90,400 | | 90,400 | | 90,400 | |||||||||||||||
Accrued interest payable |
9,846 | | 9,846 | | 9,846 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other noninterest-bearing liabilities |
100,246 | | 100,246 | | 100,246 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
$ | 24,270,356 | $ | 19,618 | $ | 24,132,530 | $ | 101,113 | $ | 24,253,261 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Classes are detailed in the recurring and nonrecurring measurement tables. |
(b) | Level 3 includes restricted investments in FHLB-Cincinnati stock of $87.9 million and FRB stock of $68.6 million. |
68
Note 16 Fair Value of Assets & Liabilities (Continued)
June 30, 2015 | ||||||||||||||||||||
Book Value | Fair Value | |||||||||||||||||||
(Dollars in thousands) |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Assets: |
||||||||||||||||||||
Loans, net of unearned income and allowance for loan losses |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial, financial and industrial |
$ | 9,753,813 | $ | | $ | | $ | 9,716,906 | $ | 9,716,906 | ||||||||||
Commercial real estate |
1,379,223 | | | 1,362,420 | 1,362,420 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Consumer real estate |
4,784,814 | | | 4,567,129 | 4,567,129 | |||||||||||||||
Permanent mortgage |
465,302 | | | 434,145 | 434,145 | |||||||||||||||
Credit card & other |
332,269 | | | 333,921 | 333,921 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total loans, net of unearned income and allowance for loan losses |
16,715,421 | | | 16,414,521 | 16,414,521 | |||||||||||||||
Short-term financial assets: |
||||||||||||||||||||
Interest-bearing cash |
344,944 | 344,944 | | | 344,944 | |||||||||||||||
Federal funds sold |
77,039 | | 77,039 | | 77,039 | |||||||||||||||
Securities purchased under agreements to resell |
816,991 | | 816,991 | | 816,991 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total short-term financial assets |
1,238,974 | 344,944 | 894,030 | | 1,238,974 | |||||||||||||||
Trading securities (a) |
1,133,490 | | 1,128,561 | 4,929 | 1,133,490 | |||||||||||||||
Loans held-for-sale (a) |
127,196 | | | 127,196 | 127,196 | |||||||||||||||
Securities available-for-sale (a) (b) |
3,648,860 | 25,825 | 3,463,981 | 159,054 | 3,648,860 | |||||||||||||||
Securities held-to-maturity |
4,306 | | | 5,356 | 5,356 | |||||||||||||||
Derivative assets (a) |
115,230 | 5,299 | 109,931 | | 115,230 | |||||||||||||||
Other assets: |
||||||||||||||||||||
Tax credit investments |
90,095 | | | 60,619 | 60,619 | |||||||||||||||
Deferred compensation assets |
27,341 | 27,341 | | | 27,341 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other assets |
117,436 | 27,341 | | 60,619 | 87,960 | |||||||||||||||
Nonearning assets: |
||||||||||||||||||||
Cash & due from banks |
274,256 | 274,256 | | | 274,256 | |||||||||||||||
Fixed income receivables |
91,069 | | 91,069 | | 91,069 | |||||||||||||||
Accrued interest receivable |
57,346 | | 57,346 | | 57,346 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonearning assets |
422,671 | 274,256 | 148,415 | | 422,671 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 23,523,584 | $ | 677,665 | $ | 5,744,918 | $ | 16,771,675 | $ | 23,194,258 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities: |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Defined maturity |
$ | 1,169,153 | $ | | $ | 1,173,899 | $ | | $ | 1,173,899 | ||||||||||
Undefined maturity |
17,505,320 | | 17,505,320 | | 17,505,320 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposits |
18,674,473 | | 18,679,219 | | 18,679,219 | |||||||||||||||
Trading liabilities (a) |
732,564 | | 732,564 | | 732,564 | |||||||||||||||
Short-term financial liabilities: |
||||||||||||||||||||
Federal funds purchased |
556,862 | | 556,862 | | 556,862 | |||||||||||||||
Securities sold under agreements to repurchase |
311,760 | | 311,760 | | 311,760 | |||||||||||||||
Other short-term borrowings |
150,350 | | 150,350 | | 150,350 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total short-term financial liabilities |
1,018,972 | | 1,018,972 | | 1,018,972 | |||||||||||||||
Term borrowings: |
||||||||||||||||||||
Real estate investment trust-preferred |
45,930 | | | 49,350 | 49,350 | |||||||||||||||
Term borrowings - new market tax credit investment |
18,000 | | | 17,983 | 17,983 | |||||||||||||||
Borrowings secured by residential real estate |
55,679 | | | 48,051 | 48,051 | |||||||||||||||
Other long term borrowings |
1,435,663 | | 1,411,226 | | 1,411,226 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total term borrowings |
1,555,272 | | 1,411,226 | 115,384 | 1,526,610 | |||||||||||||||
Derivative liabilities (a) |
109,815 | 4,788 | 100,217 | 4,810 | 109,815 | |||||||||||||||
Other noninterest-bearing liabilities: |
||||||||||||||||||||
Fixed income payables |
54,301 | | 54,301 | | 54,301 | |||||||||||||||
Accrued interest payable |
16,382 | | 16,382 | | 16,382 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other noninterest-bearing liabilities |
70,683 | | 70,683 | | 70,683 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
$ | 22,161,779 | $ | 4,788 | $ | 22,012,881 | $ | 120,194 | $ | 22,137,863 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Certain previously reported amounts have been reclassified to agree with current presentation.
(a) | Classes are detailed in the recurring and nonrecurring measurement tables. |
(b) | Level 3 includes restricted investments in FHLB-Cincinnati stock of $87.9 million and FRB stock of $65.8 million. |
69
Note 16 Fair Value of Assets & Liabilities (Continued)
Contractual Amount | Fair Value | |||||||||||||||
(Dollars in thousands) |
June 30, 2016 | June 30, 2015 | June 30, 2016 | June 30, 2015 | ||||||||||||
Unfunded Commitments: |
||||||||||||||||
Loan commitments |
$ | 7,516,141 | $ | 7,507,315 | $ | 2,058 | $ | 2,761 | ||||||||
Standby and other commitments |
293,319 | 304,860 | 4,340 | 4,846 |
70
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
71
FIRST HORIZON NATIONAL CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
First Horizon National Corporation (FHN) began as a community bank chartered in 1864 and as of June 30, 2016, was one of the 40 largest publicly traded banking organizations in the United States in terms of asset size.
FHNs two major brands First Tennessee and FTN Financial - provide customers with a broad range of products and services. First Tennessee provides retail and commercial banking services throughout Tennessee and other selected markets and is the largest bank headquartered in the state of Tennessee. FTN Financial (FTNF) is an industry leader in fixed income sales, trading, and strategies for institutional clients in the U.S. and abroad.
FHN is composed of the following operating segments:
| Regional banking offers financial products and services including traditional lending and deposit-taking to retail and commercial customers in Tennessee and other selected markets. Regional banking provides investments, financial planning, trust services and asset management, along with credit card and cash management. Additionally, the regional banking segment includes correspondent banking which provides credit, depository, and other banking-related services to other financial institutions nationally. |
| Fixed income provides financial services for depository and non-depository institutions through the sale and distribution of fixed income securities, loan sales, portfolio advisory services, and derivative sales. |
| Corporate consists of unallocated corporate expenses, expense on subordinated debt issuances, bank-owned life insurance (BOLI), unallocated interest income associated with excess equity, net impact of raising incremental capital, revenue and expense associated with deferred compensation plans, funds management, tax credit investment activities, gains on the extinguishment of debt, and acquisition-related costs. |
| Non-strategic includes exited businesses and wind-down national consumer lending activities, other discontinued products, and loan portfolios and service lines. |
On October 2, 2015, FHN completed its acquisition of TrustAtlantic Financial Corporation (TrustAtlantic Financial or TAF), and its wholly owned bank subsidiary TrustAtlantic Bank (TAB), for an aggregate of 5.1 million shares of FHN common stock and $23.9 million in cash in a transaction valued at $96.7 million. The fair value of the acquired assets totaled $445.3 million, including $281.9 million in loans. FHN also assumed $344.1 million of TAB deposits.
FHNs operating results include the operating results of the acquired assets and assumed liabilities of the acquired entity subsequent to the acquisition date. Refer to Note 2 Acquisitions and Divestitures in this report and in Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015 for additional information.
In second quarter 2016, FTBNA signed an agreement with GE Capital to purchase approximately $.6 billion in restaurant franchise loans. The acquired loans will be combined with existing FTBNA relationships to establish a restaurant franchise finance specialty lending business. The transaction is expected to be immediately accretive to First Horizons earnings per share upon closing, which is expected to happen in third quarter 2016.
For the purpose of this managements discussion and analysis (MD&A), earning assets have been expressed as averages, unless otherwise noted, and loans have been disclosed net of unearned income. The following financial discussion should be read with the accompanying unaudited Consolidated Condensed Financial Statements and Notes in this report. Additional information including the 2015 financial statements, notes, and MD&A is provided in Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
ADOPTION OF ACCOUNTING UPDATES
Effective January 1, 2016, FHN retroactively adopted the requirements of ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented as a direct reduction from the carrying value of that debt liability, consistent with debt discounts. FHN previously classified debt issuance costs within Other assets in the Consolidated Condensed Statements of Condition, consistent with prior requirements. The retrospective application of
72
ASU 2015-03 resulted in a decrease to Other assets and Term borrowings of $2.4 million at June 30, 2015 and $2.5 million at December 31, 2015 versus previously reported amounts. The adoption of ASU 2015-03 had no effect on FHNs recognition of interest expense. All prior periods and associated narrative in this report have been revised to reflect this change. For additional information see Note 1 Financial Information in this report.
This MD&A contains forward-looking statements with respect to FHNs beliefs, plans, goals, expectations, and estimates. Forward-looking statements are statements that are not a representation of historical information but instead pertain to future operations, strategies, financial results, or other developments. The words believe, expect, anticipate, intend, estimate, should, is likely, will, going forward, and other expressions that indicate future events and trends identify forward-looking statements.
Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, operational, economic and competitive uncertainties and contingencies, many of which are beyond FHNs control, and many of which, with respect to future business decisions and actions (including acquisitions and divestitures), are subject to change. Examples of uncertainties and contingencies include, among other important factors: global, general and local economic and business conditions, including economic recession or depression; the stability or volatility of values and activity in the residential housing and commercial real estate markets; potential requirements for FHN to repurchase, or compensate for losses from, previously sold or securitized mortgages or securities based on such mortgages; potential claims relating to the foreclosure process; potential claims relating to participation in government programs, especially lending or other financial services programs; expectations of and actual timing and amount of interest rate movements, including the slope and shape of the yield curve, which can have a significant impact on a financial services institution; market and monetary fluctuations, including fluctuations in mortgage markets; inflation or deflation; customer, investor, regulatory, and legislative responses to any or all of these conditions; the financial condition of borrowers and other counterparties; competition within and outside the financial services industry; geopolitical developments including possible terrorist activity; natural disasters; effectiveness and cost-efficiency of FHNs hedging practices; technological changes; fraud, theft, or other incursions through conventional, electronic, or other means affecting FHN directly or affecting its customers, business counterparties or competitors; demand for FHNs product offerings; new products and services in the industries in which FHN operates; the increasing use of new technologies to interact with customers and others; and critical accounting estimates. Other factors are those inherent in originating, selling, servicing, and holding loans and loan-based assets, including prepayment risks, pricing concessions, fluctuation in U.S. housing and other real estate prices, fluctuation of collateral values, and changes in customer profiles. Additionally, the actions of the Securities and Exchange Commission (SEC), the Financial Accounting Standards Board (FASB), the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Federal Reserve or Fed), the FDIC, the Financial Industry Regulatory Authority (FINRA), the U.S. Department of the Treasury (U.S. Treasury), the Municipal Securities Rulemaking Board (MSRB), the Consumer Financial Protection Bureau (CFPB), the Financial Stability Oversight Council (Council), the Public Company Accounting Oversight Board (PCAOB) and other regulators and agencies; pending, threatened, or possible future regulatory, administrative, and judicial outcomes, actions, and proceedings; changes in laws and regulations applicable to FHN; and FHNs success in executing its business plans and strategies and managing the risks involved in the foregoing, could cause actual results to differ, perhaps materially, from those contemplated by the forward-looking statements.
FHN assumes no obligation to update or revise any forward-looking statements that are made in this Quarterly Report or otherwise from time to time. Actual results could differ and expectations could change, possibly materially, because of one or more factors, including those presented in this Forward-Looking Statements section, in other sections of this MD&A, in other parts of and exhibits to this Quarterly Report on Form 10-Q for the periods ended June 30, 2016, and in documents incorporated into this Quarterly Report.
In second quarter 2016, FHN reported net income available to common shareholders of $56.5 million, or $.24 per diluted share, compared to net income of $50.6 million or $.22 per diluted share in second quarter 2015. Results improved in second quarter 2016 relative to the prior year due to an increase in revenue somewhat offset by higher noninterest expense and loan loss provisioning expense. For the six months ended June 30, 2016, FHN reported net income available to common shareholders of $104.4 million or $.44 per diluted share compared to a net loss of $26.2 million or $.11 loss per diluted share for the six months ended June 30, 2015. The improvement in results for the year-to-date period was the result of lower expenses in 2016, discussed below, coupled with an increase in revenue compared to the prior year.
Total revenue increased $24.8 million and $44.7 million, respectively, for the three and six months ended June 30, 2016 to $321.8 million and $628.2 million. The increase in revenue for both periods was primarily driven by higher fixed income product revenue and an increase in net interest income (NII).
73
Noninterest expense for the three months ended June 30, 2016 and 2015 was $226.8 million and $218.4 million, respectively. The expense increase in second quarter 2016 compared to second quarter 2015 was largely the result of an increase in accruals related to loss contingencies and litigation matters and higher Fixed Income variable compensation expense, somewhat offset by the favorable reversal of $31.4 million of mortgage repurchase and foreclosure provision expense as a result of the settlements of certain repurchase claims. Noninterest expense for the six months ended June 30, 2016 and 2015 was $453.7 million and $594.6 million, respectively. The decrease in expense for the year-to-date period was largely the result of a decline in litigation-related loss accruals associated with the 2015 DOJ/HUD settlement of potential claims related to FHNs underwriting and origination of FHA-insured mortgage loans. This settlement resulted in a $162.5 million charge to litigation and regulatory matters in the prior year. Accruals related to loss contingencies and litigation matters were $25.5 million for the six months ended June 30, 2016. The mortgage repurchase provision expense reversal recognized in second quarter 2016 also favorably impacted expenses during the first half of 2016, but was somewhat offset by higher personnel expenses in the Fixed Income and Regional Banking segments and a $4.5 million net increase in impairment and lease abandonment charges related to branch closures.
On a consolidated basis, credit quality remained strong in 2016, with non-performing loans, net charge-offs and the allowance for loan losses all decreasing relative to the prior year; however, the pace of improvement slowed somewhat in second quarter 2016. Loan loss provision was $4.0 million in second quarter 2016 compared to $2.0 million in second quarter 2015. For the six months ended June 30, 2016 and 2015, the loan loss provision was $7.0 million in both periods.
Return on average common equity and return on average assets for second quarter 2016 were 10.04 percent and .91 percent, respectively, compared to 9.56 percent and .87 percent, respectively, in second quarter 2015. During the six months ended June 30, 2016, the return on average common equity and the return on average assets were positive 9.29 percent and positive .85 percent, respectively, compared to negative 2.43 percent and negative .14 percent, respectively, during the six months ended June 30, 2015. Common Equity Tier 1, Tier 1, and Total capital ratios were 10.05 percent, 11.28 percent, and 12.39 percent, respectively, in second quarter 2016 compared to 10.41 percent, 11.98 percent, and 14.00 percent, respectively in second quarter 2015. Average assets increased to $26.8 billion in second quarter 2016 from $25.4 billion in second quarter 2015. Average loans increased 6 percent and 7 percent to $17.8 billion and $17.6 billion, respectively, for the three and six months ended June 30, 2016 relative to the prior year. Average core deposits increased 9 percent for both the three and six months ended June 30, 2016, relative to the same periods in 2015 to $19.7 billion and $19.6 billion, respectively. Period-end and average Shareholders equity increased to $2.7 billion in second quarter 2016 from $2.5 billion in second quarter 2015.
BUSINESS LINE REVIEW
Regional Banking
Pre-tax income within the regional banking segment was $64.4 million during second quarter 2016 compared to $70.8 million in second quarter 2015. The decrease in pre-tax income was driven by an increase in expenses which more than offset higher revenue and a decline in loan loss provisioning. For the six months ended June 30, 2016, the regional banks pre-tax income was $135.9 million compared to $145.1 million for the six months ended June 30, 2015. The decrease in pre-tax income for the first half of 2016 was primarily driven by increases in both expenses and loan loss provisioning.
Total revenue increased 3 percent, or $7.7 million, to $239.6 million in second quarter 2016 from $231.9 million in second quarter 2015, driven by an increase in net interest income (NII). The increase in NII was primarily driven by higher average balances of commercial loans, but was somewhat offset by lower yielding commercial loans, a decrease in net interest income associated with payments received on non-performing loans recognized on a cash basis, and lower loan fees. Noninterest income was $61.3 million in second quarter 2016, compared to $66.0 million in second quarter 2015, largely driven by lower brokerage, management fees, and commission income from the Banks wealth management group and a decline in fees from deposit transactions and cash management activities. The decline in brokerage, management fees, and commission income was the result of market volatility and lower variable annuity sales as practices are adjusted to meet the standards of a changing regulatory environment. Additionally, a shift in product and fee structures caused a temporary decline in revenues but better met client needs and should result in revenue streams over the life of the product. The decrease in fees from deposit transactions and cash management activities was primarily due to lower non-sufficient funds (NSF)/overdraft fees in the current year as a result of changes in consumer behavior. Bankcard income increased in second quarter 2016, relative to the prior year, largely driven by a significant new relationship.
Provision expense decreased to $10.9 million in second quarter 2016 from $17.1 million in second quarter 2015. The provision during second quarter 2016 was driven by a number of factors including commercial loan growth and consideration of the economic environment. These factors were somewhat offset by the continued favorable impact of historically low net charge-offs and resulting effect on loss rates. The second quarter 2015 loan loss provision reflected losses resulting from borrower fraud.
Noninterest expense was $164.3 million in second quarter 2016 compared to $144.0 million in second quarter 2015. The expense increase was primarily driven by accruals related to loss contingencies and litigation matters that were recognized in second quarter 2016, as well as higher personnel expenses largely due to an increase in headcount related to the TAF acquisition. Increases in FDIC premiums also contributed to the higher expenses in second quarter 2016. These increases were partially offset by a decline in expenses associated with foreclosed real estate driven by smaller negative fair value marks recognized in second quarter 2016 relative
74
to the prior year and gains on the sales of properties recognized in 2016. Additionally, a decline in allocated pension expense relative to second quarter 2015 due to a change in the discount rates used in the calculation of pension and postretirement interest costs offset a portion of the increase.
Total revenue increased 6 percent to $471.2 million for the six months ended June 30, 2016 from $446.5 million for the six months ended June 30, 2015, driven by an increase in NII. The factors that contributed to NII growth in second quarter 2016 also drove the increase in the year-to-date period. Noninterest income was $120.6 million and $126.2 million for the six months ended June 30, 2016 and 2015, respectively. The decrease in noninterest income was primarily driven by the same factors affecting the quarterly noninterest income decline.
Provision expense for the six months ended June 30, 2016 increased to $25.7 million from $22.0 million for the six months ended June 30, 2015. The increase was primarily driven by loan growth, as well as a slower pace of improvement compared to the prior year.
Noninterest expense was $309.7 million and $279.4 million for the six months ended June 30, 2016 and 2015, respectively. The increase in expense was largely attributable to the same drivers affecting the quarterly increase in expenses discussed above. Additionally, FHN recognized a $4.2 million net increase in impairment and lease abandonment charges related to branch closures during the first half of 2016; however, this was partially offset by a decline in contract employment expenses due in large part to the completion of a large operations efficiency project in 2015.
Fixed Income
Pre-tax income in the fixed income segment was $18.3 million in second quarter 2016 compared to $9.0 million during second quarter 2015. For the six months ended June 30, 2016, fixed incomes pre-tax income was $29.5 million compared to $20.2 million for the six months ended June 30, 2015. Fixed income product revenue increased 48 percent to $69.3 million in second quarter 2016 from $46.7 million in second quarter 2015, as average daily revenue (ADR) increased to $1.1 million in second quarter 2016 from $729 thousand in second quarter 2015. For the six months ended June 30, 2016, fixed income product revenue was $126.9 million, up from $100.2 million in the prior year. The increase in fixed income revenue in both periods reflects increased rate and market volatility, as well as the strength and expansion of the distribution platform. Other product revenue decreased to $8.8 million in second quarter 2016 from $9.3 million in second quarter 2015 primarily due to a decrease in fees from loan sales, partially offset by an increase in fees from portfolio advisory services. For the six months ended June 30, 2016 and 2015, other product revenue was $18.3 million and $17.4 million, respectively. The increase in the year-to-date period was primarily driven by increases in fees from portfolio advisory, derivative sales, and loan sales relative to the prior year. Noninterest expense was $62.9 million and $51.3 million in second quarter 2016 and 2015, respectively, and $121.5 million and $106.0 million for the six months ended June 30, 2016 and 2015, respectively. The expense increase in both periods was primarily related to higher variable compensation expenses connected with the increase in fixed income product revenue in 2016.
Corporate
The pre-tax loss for the corporate segment was $27.0 million and $27.5 million for the quarters ended June 30, 2016 and 2015, respectively, and was $49.1 million and $52.6 million for the six months ended June 30, 2016 and 2015, respectively.
Net interest expense decreased to $15.9 million in second quarter 2016 from $17.4 million in second quarter 2015 primarily due to a decrease in average term borrowings outstanding. Noninterest income (including securities gain/losses) was $4.9 million in second quarter 2016, up from $3.9 million in second quarter 2015. The increase in noninterest income was driven by an increase in deferred compensation income. Deferred compensation income fluctuates with changes in the market value of the underlying investments and is mirrored by changes in deferred compensation expense which is included in personnel expense.
Noninterest expense increased to $16.1 million in second quarter 2016 from $14.0 million in second quarter 2015, primarily driven by $2.5 million of negative valuation adjustments associated with derivatives related to prior sales of Visa Class B shares recognized in 2016.
Net interest expense decreased to $30.2 million from $33.4 million for the year-to-date period ended June 30, 2016 driven by a decrease in average term borrowings outstanding and a larger AFS securities portfolio. Noninterest income (including securities gain/losses) was $10.6 million for the six months ended June 30, 2016, compared to $9.3 million for the six months ended June 30, 2015. The increase in noninterest income was driven by an increase in securities gains, which was primarily the result of a $1.7 million gain recognized in first quarter 2016 on an exchange of approximately $294 million of AFS debt securities.
Noninterest expense was $29.6 million for the six months ended June 30, 2016 compared to $28.4 million for the six months ended June 30, 2015.
75
Non-Strategic
The non-strategic segment had pre-tax income of $35.2 million in second quarter 2016 compared to $24.2 million in second quarter 2015. For the six months ended June 30, 2016, the non-strategic segment had pre-tax income of $51.2 million compared to a pre-tax loss of $130.8 million for the six months ended June 30, 2015. The improvement for the quarterly period was driven by a net expense reversal for second quarter 2016 which more than offset a decline in provision credit for loan losses and lower revenue. The improvement for the six months ended June 30, 2016 was also driven by a net expense reversal for the year-to-date period, coupled with an increase in the provision credit for loan losses, which more than offset the decrease in revenue.
Total revenue was $11.9 million and $18.2 million in second quarter 2016 and second quarter 2015, respectively. NII declined 23 percent to $10.6 million in second quarter 2016 from $13.8 million in second quarter 2015, consistent with the run-off of the non-strategic loan portfolios. Noninterest income (including securities gains/losses) decreased $3.2 million from $4.4 million in second quarter 2015 to $1.2 million in second quarter 2016. The decline in noninterest income was primarily attributable to a gain recognized in second quarter 2015 related to the sale of property.
The provision for loan losses within the non-strategic segment was a provision credit of $6.9 million in second quarter 2016 compared to a provision credit of $15.1 million in the prior year. Overall, the non-strategic segment continues to reflect declining balances, primarily within the consumer real estate portfolio, combined with stable performance within the legacy portfolio.
Noninterest expense was negative $16.4 million in second quarter 2016 compared to $9.1 million in second quarter 2015. The decrease in expense was driven by a $31.4 million reversal of mortgage repurchase and foreclosure provision as a result of the settlements of certain repurchase claims, somewhat offset by $4.0 million of accruals related to loss contingencies and litigation matters and higher legal expenses in second quarter 2016 compared to the prior year.
Total revenue was $25.5 million and $35.0 million for the six months ended June 30, 2016 and 2015, respectively, with NII declining 21 percent to $22.1 million for the 2016 year-to-date period from $28.0 million for the same period of 2015, consistent with the run-off of the non-strategic loan portfolios. Noninterest income (including securities gains/losses) decreased to $3.4 million for the first half of 2016 from $7.0 million. The decline in noninterest income was largely attributable to the gain recognized on the sale of property in second quarter 2015 previously mentioned.
The provision for loan losses within the non-strategic segment was a provision credit of $18.7 million for the six months ended June 30, 2016 compared to a provision credit of $15.0 million for the six months ended June 30, 2015. The increase in provision credit was largely driven by improved performance relative to a year ago.
Noninterest expense was negative $7.0 million in the first half of 2016 compared to $180.8 million in the first half of 2015. The decline in noninterest expense was primarily due to $162.5 million of loss accruals recognized in 2015 associated with the settlement reached with DOJ/HUD. Additionally, $31.4 million of mortgage repurchase and foreclosure expenses were reversed in 2016 due to the settlements previously mentioned. These were somewhat offset by $4.0 million of accruals related to loss contingencies and litigation matters and higher legal expenses recognized in second quarter 2016. Generally, most other expense categories declined given the continued wind-down of the legacy businesses.
INCOME STATEMENT REVIEW
Consolidated revenue was $321.8 million in second quarter 2016, an 8 percent increase from $296.9 million in second quarter 2015 largely driven by increases in fixed income product revenue and net interest income. Total expenses increased 4 percent to $226.8 million in second quarter 2016 from $218.4 million in second quarter 2015. The expense increase was primarily due to an increase in accrual s related to loss contingencies and litigation matters and higher personnel expenses, partially offset by an expense reversal related to the mortgage repurchase provision. For the six months ended June 30, 2016, total consolidated revenue was $628.2 million, up 8 percent from $583.5 million for the six months ended June 30, 2015, driven by increases in fixed income product revenue and net interest income. Total expenses for the six months ended June 30, 2016 decreased 24 percent to $453.7 million in the first half of 2016 from $594.6 million in the first half of 2015 primarily driven by a decline in accruals related to loss contingencies and litigation matters and the mortgage repurchase provision expense reversal in 2016 previously mentioned, somewhat offset by higher personnel expenses and an increase in impairment charges related to branch closures.
NET INTEREST INCOME
Net interest income increased 6 percent to $176.3 million in second quarter 2016 from $166.6 million in second quarter 2015. For the six months ended June 30, 2016, NII increased 8 percent to $348.3 million from $323.5 million. For the three and six months ended June 30, 2016, the increase in NII was the result of loan growth within the regional banks portfolios, the favorable impact of the December Fed rate increase, a decline in long-term funding costs, and a larger AFS securities portfolio. These increases were partially offset by the continued run-off of the non-strategic loan portfolios, a decrease in net interest income associated with payments
76
received on non-performing loans recognized on a cash basis, lower loan fees, and lower average balances of trading inventory relative to second quarter 2015. Average earning assets were $24.6 billion and $23.2 billion in second quarters 2016 and 2015, respectively, and $24.5 billion and $23.4 billion for the six months ended June 30, 2016 and 2015, respectively. The increase in both periods relative to the prior year was primarily driven by loan growth within the regional bank, but was also impacted by a larger securities portfolio and an increase in securities purchased under agreements to resell. These increases were somewhat offset by continued run-off of the non-strategic loan portfolios and a decrease in average fixed income trading securities. For the year-to-date period a decline in average balances of excess cash held at the Fed also contributed to the decrease in average earning assets.
For purposes of computing yields and the net interest margin, FHN adjusts net interest income to reflect tax exempt income on an equivalent pre-tax basis which provides comparability of net interest income arising from both taxable and tax-exempt sources. The consolidated net interest margin remained flat in second quarter 2016 at 2.92 percent compared to second quarter 2015. The net interest spread was 2.79 percent in both periods, and the impact of free funding was 13 basis points in both periods. A decline in cash basis interest income and loan fees offset the positive impact from higher short-term interest rates during second quarter 2016, relative to the prior year. For the six months ended June 30, 2016, the net interest margin was 2.90 percent, up 7 basis points from 2.83 percent in the comparable period of 2015. The increase in NIM for the six month period of 2016 was driven by several factors including the December Fed rate increase, a decrease in average excess cash held at the Fed during the first half of 2016, and the favorable impact of a decline in long-term funding costs. A decrease in interest income associated with payments received on non-performing loans recognized on a cash basis relative to the first half of 2015, lower average balances of trading inventory, and run-off of the non-strategic loan portfolios negatively impacted NIM in first half of 2016.
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Table 1- Net Interest Margin
Three Months Ended June 30 |
||||||||
2016 | 2015 | |||||||
Assets: |
||||||||
Earning assets: |
||||||||
Loans, net of unearned income: |
||||||||
Commercial loans |
3.58 | % | 3.60 | % | ||||
Consumer loans |
4.08 | 3.94 | ||||||
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|
|
|
|||||
Total loans, net of unearned income |
3.74 | 3.71 | ||||||
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|
|
|
|||||
Loans held-for-sale |
4.17 | 4.17 | ||||||
Investment securities: |
||||||||
U.S. treasuries |
0.98 | 0.98 | ||||||
U.S. government agencies |
2.39 | 2.45 | ||||||
States and municipalities (a) |
7.27 | 2.77 | ||||||
Corporate bonds |
5.25 | | ||||||
Other (b) |
2.47 | 4.08 | ||||||
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|
|
|
|||||
Total investment securities |
2.41 | 2.53 | ||||||
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|
|
|
|||||
Trading securities |
2.64 | 2.73 | ||||||
Other earning assets: |
||||||||
Federal funds sold |
1.11 | 1.00 | ||||||
Securities purchased under agreements to resell (c) |
0.15 | (0.13 | ) | |||||
Interest bearing cash |
0.48 | 0.23 | ||||||
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|
|||||
Total other earning assets |
0.28 | 0.03 | ||||||
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|
|||||
Interest income / total earning assets |
3.27 | % | 3.27 | % | ||||
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Liabilities: |
||||||||
Interest-bearing liabilities: |
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Interest-bearing deposits: |
||||||||
Savings |
0.21 | % | 0.16 | % | ||||
Other interest-bearing deposits |
0.19 | 0.09 | ||||||
Time deposits |
0.61 | 0.68 | ||||||
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|||||
Total interest-bearing core deposits |
0.22 | 0.17 | ||||||
Certificates of deposit $100,000 and more |
0.98 | 0.82 | ||||||
Federal funds purchased |
0.51 | 0.25 | ||||||
Securities sold under agreements to repurchase |
0.11 | 0.05 | ||||||
Fixed income trading liabilities |
1.84 | 2.12 | ||||||
Other short-term borrowings |
0.66 | 0.49 | ||||||
Term borrowings |
2.60 | 2.47 | ||||||
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Interest expense / total interest-bearing liabilities |
0.48 | 0.48 | ||||||
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|
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Net interest spread |
2.79 | % | 2.79 | % | ||||
Effect of interest-free sources used to fund earning assets |
0.13 | 0.13 | ||||||
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|||||
Net interest margin (d) |
2.92 | % | 2.92 | % | ||||
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(a) | Second quarter 2016 increase driven by payoff of lower-yielding municipal bonds in fourth quarter 2015. |
(b) | Second quarter 2016 decrease driven by a decline in the dividend rate of FHNs holdings of federal reserve bank stock. |
(c) | Second quarter 2015 rate driven by negative market rates on reverse repurchase agreements. |
(d) | Calculated using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes. |
FHNs net interest margin is impacted by balance sheet factors such as interest-bearing cash levels, deposit balances, trading inventory, commercial loan volume, as well as loan fees, cash basis income, and changes in short term interest rates. FHNs balance sheet is positioned to benefit primarily from a rise in short-term interest rates. During 2016, any benefit to NIM will depend on the extent of Fed interest rate increases, as well as levels of interest bearing cash and trading inventory balances.
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PROVISION FOR LOAN LOSSES
The provision for loan losses is the charge to earnings that management determines to be necessary to maintain the ALLL at a sufficient level reflecting managements estimate of probable incurred losses in the loan portfolio. The provision for loan losses was $4.0 million in second quarter 2016 compared to $2.0 million in second quarter 2015. For the six months ended June 30, 2016 and 2015, the provision for loan losses was $7.0 million in both periods. In second quarter 2016 aggregate performance of the loan portfolio remained strong resulting in a decline in the allowance for loan losses of 10 percent (on a period-end basis). Although asset quality metrics were strong in both periods, improvement slowed in 2016 and the commercial loan growth partially offset the positive effect of improvement on the allowance. For additional information about the provision for loan losses refer to the Regional Banking and Non-Strategic sections of the Business Line Review section in this MD&A. For additional information about general asset quality trends refer to Asset QualityTrend Analysis of Second Quarter 2016 Compared to Second Quarter 2015 in this MD&A.
NONINTEREST INCOME
Noninterest income (including securities gains/(losses)) was $145.5 million in second quarter 2016 and represented 45 percent of total revenue compared to $130.3 million in second quarter 2015 and 44 percent of total revenue. For the six months ended June 30, 2016, noninterest income was $279.8 million compared to $260.0 million for the six months ended June 30, 2015. Noninterest income represented 45 percent of total revenue in both year-to-date periods. The increase in noninterest income for both periods was primarily driven by higher fixed income sales revenue.
Fixed Income Noninterest Income
Fixed income noninterest income increased 39 percent in second quarter 2016 to $77.9 million from $56.2 million in second quarter 2015. For the six months ended June 30, 2016 and 2015, fixed income noninterest income was $144.9 million and $117.9 million, respectively, representing a 23 percent increase. Revenue from fixed income product revenue was up in both periods reflecting increased rate and market volatility, as well as the strength and expansion of the distribution platform. Revenue from other products was $8.6 million in second quarter 2016 compared to $9.6 million in second quarter 2015, largely driven by a decrease in fees from loan sales, but partially mitigated by an increase in fees from portfolio advisory services. During the six months ended June 30, 2016, revenue from other products increased to $18.0 million from $17.7 million for the six months ended June 30, 2015, largely driven by increases in fees from portfolio advisory, derivative sales, and loan sales. The following table summarizes FHNs fixed income noninterest income for the three and six months ended June 30, 2016 and 2015.
Table 2 - Fixed Income Noninterest Income
Three Months Ended June 30 |
Percent Change |
Six Months Ended June 30 |
Percent Change |
|||||||||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||
Noninterest income: |
||||||||||||||||||||||||
Fixed income |
$ | 69,279 | $ | 46,685 | 48 | % | $ | 126,862 | $ | 100,195 | 27 | % | ||||||||||||
Other product revenue |
8,634 | 9,556 | (10 | )% | 18,028 | 17,665 | 2 | % | ||||||||||||||||
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|
|
|
|
|
|||||||||||||||||
Total fixed income noninterest income |
$ | 77,913 | $ | 56,241 | 39 | % | $ | 144,890 | $ | 117,860 | 23 | % | ||||||||||||
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Deposit Transactions and Cash Management
Fees from deposit transactions and cash management activities were $27.0 million and $53.8 million during the three and six months ended June 30, 2016 down from $28.4 million and $55.0 million for the three and six months ended June 30, 2015. The decrease in both periods was primarily driven by lower NSF fee income driven by changes in consumer behavior.
Brokerage, Management Fees and Commissions
Income from brokerage, management fees and commissions was $10.7 million in second quarter 2016, down 14 percent from $12.5 million in second quarter 2015. During the six months ended June 30, 2016 income from brokerage, management fees and commissions was $21.1 million, a 12 percent decline from $23.9 million for the six months ended June 30, 2015. The decline in income in both periods was primarily driven by a reduction in annuity income as a result of market volatility and lower variable annuity sales as practices are adjusted to meet the standards of a changing regulatory environment. The decline was also affected by a shift in product and fee structures, which caused a temporary decline in revenues but better met client needs and should result in revenue streams over the life of the product.
79
Bankcard Income
Bankcard income increased 11 percent and 7 percent to $6.6 million and $11.8 million for the three and six months ended June 30, 2016, respectively, from $5.9 million and $11.1 million for the three and six months ended June 30, 2015. The increase in bankcard income was primarily driven by a significant new relationship.
Securities Gains/Losses
Securities gains/losses for the three months ended June 30, 2016 and 2015, were not material. For the six months ended June 30, 2016, FHN recognized net securities gains of $1.7 million which was primarily the result of a $1.7 million gain on an exchange of approximately $294 million of AFS debt securities. Securities gains/losses for the six months ended June 30, 2015, were not material.
Other Noninterest Income
Other income includes revenues from ATM and interchange fees, electronic banking fees, mortgage banking, revenue related to deferred compensation plans (which are mirrored by changes in noninterest expense), gains/(losses) from the extinguishment of debt and various other fees.
All other income and commissions was $8.8 million in second quarter 2016 compared to $12.8 million in second quarter 2015 and was $18.9 million for the six months ended June 30, 2016 compared to $23.8 million for the six months ended June 30, 2015. During both the quarter and year-to-date period the decline was due in part to $2.9 million of gains on the sales of property recognized in the prior year. The following table provides detail regarding FHNs other income.
Table 3 - Other Income
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Other income: |
||||||||||||||||
ATM interchange fees |
$ | 2,879 | $ | 3,025 | $ | 5,837 | $ | 5,786 | ||||||||
Electronic banking fees |
1,381 | 1,459 | 2,778 | 2,887 | ||||||||||||
Letter of credit fees |
1,115 | 1,532 | 2,176 | 2,655 | ||||||||||||
Deferred compensation (a) |
795 | (35 | ) | 1,124 | 998 | |||||||||||
Mortgage banking |
598 | 376 | 1,871 | 1,960 | ||||||||||||
Other |
2,005 | 6,421 | 5,076 | 9,546 | ||||||||||||
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|
|
|
|
|
|
|
|||||||||
Total |
$ | 8,773 | $ | 12,778 | $ | 18,862 | $ | 23,832 | ||||||||
|
|
|
|
|
|
|
|
Certain previously reported amounts have been reclassified to agree with current presentation.
(a) | Deferred compensation market value adjustments are mirrored by changes in deferred compensation expense which is included in employee compensation, incentives, and benefits expense. |
NONINTEREST EXPENSE
Noninterest expense was $226.8 million in second quarter 2016 compared to $218.4 million in second quarter 2015. The increase in noninterest expense was primarily driven by accruals related to loss contingencies and litigation matters recognized in second quarter 2016 and higher personnel expenses, partially offset by the reversal of mortgage repurchase and foreclosure provision expense in second quarter 2016.
For the six months ended June 30, 2016, noninterest expense was $453.7 million compared to $594.6 million for the six months ended June 30, 2015. The decrease in noninterest expense for the year-to-date period was primarily the result of a reduction in accruals related to loss contingencies and litigation matters and, to a lesser extent, the mortgage repurchase and foreclosure provision expense reversal recognized in 2016 previously mentioned, somewhat offset by higher personnel expenses and an increase in other noninterest expense.
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Employee Compensation, Incentives, and Benefits
Employee compensation, incentives, and benefits (personnel expense), which is generally the largest component of noninterest expense, increased 12 percent, or $15.4 million, to $143.4 million in second quarter 2016 from $128.0 million in second quarter 2015. For the six months ended June 30, 2016, personnel expense increased 8 percent, or $21.1 million, to $280.5 million. The increase in personnel expense for both the quarterly and year-to-date periods was primarily driven by an increase in variable compensation associated with higher fixed income product sales revenue within FHNs fixed income operating segment. Additionally, a year-over-year increase in headcount related to the TAF acquisition and higher incentive expense associated with strategic hires and retention within the regional bank, also contributed to the increase in personnel expense in 2016. These increases were partially offset by a decline in pension expense relative to 2015 due to a change in the discount rates used in the calculation of pension and postretirement interest costs.
Repurchase and Foreclosure Provision
During second quarter 2016, FHN recognized a $31.4 million pre-tax expense reversal of mortgage repurchase and foreclosure provision as a result of the settlement of certain repurchase claims, which favorable impacted expenses for the quarter and year-to-date periods of 2016. The mortgage repurchase and foreclosure provision was $0 in 2015.
Foreclosed Real Estate
Foreclosed real estate expense declined $1.8 million and $1.9 million for the three and six months ended June 30, 2016 to a net expense credit of $.4 million and $.7 million, respectively. The decline in expenses was driven by smaller negative fair value marks recognized in second quarter 2016 relative to the prior year and gains on the sales of properties recognized in 2016.
Legal Fees
Legal fees increased to $5.9 million in second quarter 2016 from $4.5 million in second quarter 2015. For the year-to-date periods, legal expense was $10.8 million in 2016 compared to $8.1 million in 2015. Legal fees fluctuate quarterly based on the status and composition of cases.
Contract Employment and Outsourcing
Expenses associated with contract employment and outsourcing were $2.5 million in second quarter 2016, down from $3.3 million in second quarter 2015. For the six months ended June 30, 2016, contract employment and outsourcing expenses were $4.9 million, down from $7.9 million for the six months ended June 30, 2015. The decrease was attributable to a lower number of technology-related projects in 2016 relative to the prior year coupled with the completion of a large operations efficiency project in 2015.
Other Noninterest Expense
All other expenses were $44.3 million in second quarter 2016 compared to $17.1 million in second quarter 2015. The increase was largely due to $26.0 million of accruals related to loss contingencies and litigation matters and $2.5 million of negative valuation adjustments associated with derivatives related to prior sales of Visa Class B shares, both recognized in second quarter 2016. For the six months ended June 30, 2016, all other expenses were $63.3 million compared to $193.7 million for the six months ended June 30, 2015 and were primarily driven by a $137.0 million net decline in litigation-related loss accruals largely associated with the 2015 DOJ/HUD settlement previously mentioned. FHN recognized a $4.5 million net increase in fixed asset impairments and lease abandonment charges related to branch closures in the first half of 2016 from the prior year which offset a portion of the expense decline for the year-to-date periods of 2016 compared to 2015. Additionally, the negative Visa valuation adjustment previously mentioned resulted in higher expenses in 2016. The following table provides detail regarding FHNs other expenses.
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Table 4 - Other Expense
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Other expense: |
||||||||||||||||
Litigation and regulatory matters |
$ | 26,000 | $ | | $ | 25,525 | $ | 162,500 | ||||||||
Travel and entertainment |
2,495 | 2,632 | 4,557 | 4,246 | ||||||||||||
Customer relations |
1,483 | 1,505 | 3,362 | 2,819 | ||||||||||||
Employee training and dues |
1,338 | 1,449 | 2,728 | 2,581 | ||||||||||||
Supplies |
930 | 880 | 1,956 | 1,807 | ||||||||||||
Tax credit investments |
831 | 549 | 1,537 | 944 | ||||||||||||
Miscellaneous loan costs |
565 | 734 | 1,282 | 1,095 | ||||||||||||
Other |
10,624 | 9,307 | 22,343 | 17,730 | ||||||||||||
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|
|
|
|
|
|
|
|||||||||
Total |
$ | 44,266 | $ | 17,056 | $ | 63,290 | $ | 193,722 | ||||||||
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|
|
|
|
|
|
Certain previously reported amounts have been reclassified to agree with current presentation.
INCOME TAXES
FHN recorded an income tax provision of $30.0 million in second quarter 2016 on $91.0 million of pre-tax income, compared to an income tax provision of $21.6 million in second quarter 2015 on $76.5 million of pre-tax income. For the six months ended June 30, 2016, FHN recorded an income tax provision of $54.3 million on pre-tax income of $167.4 million compared to an income tax benefit of $.7 million on a pre-tax loss of $18.1 million for the six months ended June 30, 2015. The effective tax rates for the quarters ended June 30, 2016 and 2015 were approximately 33 percent and 28 percent, respectively. For the six months ended June 30, 2016 and 2015 the effective tax rates were approximately 32 percent and 4 percent, respectively. Since pre-tax income is the most important component in determining the effective tax rate, the comparison of the tax rate from period to period, by itself, will not provide meaningful information unless pre-tax income is fairly consistent. The companys effective tax rate is favorably affected by recurring items such as bank-owned life insurance, tax-exempt income, and credits and other tax benefits from affordable housing investments. The companys effective tax rate also may be affected by items that may occur in any given period but are not consistent from period to period, such as changes in the deferred tax asset valuation allowance and changes in unrecognized tax benefits.
A deferred tax asset (DTA) or deferred tax liability (DTL) is recognized for the tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax consequence is calculated by applying enacted statutory tax rates, applicable to future years, to these temporary differences. As of June 30, 2016, FHNs gross DTA (net of a valuation allowance) and gross DTL were $318.2 million and $132.1 million, respectively, resulting in a net DTA of $186.1 million at June 30, 2016, compared with $260.6 million at June 30, 2015. The decline in the DTA in second quarter 2016, relative to second quarter 2015, was primarily driven by an increase in unrealized gains within the available-for-sale securities portfolio coupled with a decline in the mortgage repurchase and foreclosure reserve.
As of June 30, 2016, FHN had federal tax credit carryforwards which will expire in varying amounts between 2030 and 2035, state income tax net operating loss (NOL) carryforwards which will expire in varying amounts between 2016 and 2035, and federal capital loss carryforwards, which will expire in 2017. As of June 30, 2016 and 2015, FHN established a valuation allowance of $.3 million and $.1 million, respectively, against its state NOL carryforwards and $40.5 million and $41.9 million, respectively, against its federal capital loss carryforwards. FHNs DTA after valuation allowance was $318.2 million and $346.8 million as of June 30, 2016 and 2015, respectively. Based on current analysis, FHN believes that its ability to realize the remaining DTA is more likely than not. FHN monitors its DTA and the need for a valuation allowance on a quarterly basis. A significant adverse change in FHNs taxable earnings outlook could result in the need for further valuation allowances. In the event FHN is able to determine that the deferred tax assets are realizable in the future in excess of their net recorded amount, FHN would make an adjustment to the valuation allowance, which would reduce the provision for income taxes.
Total period-end assets were $27.5 billion on June 30, 2016, up 9 percent and 5 percent, respectively from $25.2 billion on June 30, 2015 and $26.2 billion on December 31, 2015. Average assets increased to $26.8 billion in second quarter 2016 from $25.4 billion in second quarter 2015 and $26.2 billion in fourth quarter 2015. The increase in average assets compared to second quarter 2015 is primarily attributable to increases in the loan portfolio, a larger investment securities portfolio, and an increase in securities purchased under agreements to resell, somewhat offset by a decline in trading securities. Generally, the same line items driving the year-over- year increase in average assets drove the increase in average assets compared to fourth quarter 2015; however, average interest bearing cash declined between second quarter 2016 and fourth quarter 2015.
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EARNING ASSETS
Earning assets consist of loans, investment securities, other earning assets such as trading securities, interest-bearing cash, and loans HFS. Average earning assets increased to $24.6 billion in second quarter 2016 from $23.2 billion a year earlier and $23.9 billion in fourth quarter 2015. A more detailed discussion of the major line items follows.
Loans
Period-end loans increased to $18.6 billion as of June 30, 2016 from $16.9 billion on June 30, 2015. Average loans for second quarter 2016 were $17.8 billion compared to $16.8 billion for second quarter 2015. The increase in average and period-end loan balances was primarily due to loan growth within the regional banks commercial portfolios and also loans added through the TAB acquisition in fourth quarter 2015, partially offset by run-off of portfolios within the non-strategic segment.
Table 5 - Average Loans
Quarter Ended June 30, 2016 |
Quarter Ended June 30, 2015 |
Quarter Ended December 31, 2015 |
2Q16 changes vs | |||||||||||||||||||||||||||||
Amount | Percent of total |
Amount | Percent of total |
Amount | Percent of total |
|||||||||||||||||||||||||||
(Dollars in thousands) |
2Q15 | 4Q15 | ||||||||||||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||||||
Commercial, financial, and industrial |
$ | 10,451,954 | 59 | % | $ | 9,675,107 | 58 | % | $ | 9,720,115 | 57 | % | 8 | % | 8 | % | ||||||||||||||||
Commercial real estate |
1,901,592 | 11 | 1,371,207 | 8 | 1,612,730 | 10 | 39 | % | 18 | % | ||||||||||||||||||||||
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|
|
|
|
|
|
|||||||||||||||||||||
Total commercial |
12,353,546 | 70 | 11,046,314 | 66 | 11,332,845 | 67 | 12 | % | 9 | % | ||||||||||||||||||||||
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Consumer: |
||||||||||||||||||||||||||||||||
Consumer real estate (a) |
4,662,172 | 26 | 4,893,285 | 29 | 4,798,067 | 28 | (5 | )% | (3 | )% | ||||||||||||||||||||||
Permanent mortgage |
435,521 | 2 | 500,093 | 3 | 455,299 | 3 | (13 | )% | (4 | )% | ||||||||||||||||||||||
Credit card, OTC and other |
360,874 | 2 | 350,247 | 2 | 356,948 | 2 | 3 | % | 1 | % | ||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total consumer |
5,458,567 | 30 | 5,743,625 | 34 | 5,610,314 | 33 | (5 | )% | (3 | )% | ||||||||||||||||||||||
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|
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|
|||||||||||||||||||||
Total loans, net of unearned income |
$ | 17,812,113 | 100 | % | $ | 16,789,939 | 100 | % | $ | 16,943,159 | 100 | % | 6 | % | 5 | % | ||||||||||||||||
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(a) | Balances as of June 30, 2016 and 2015, and December 31, 2015, include $45.7 million, $69.2 million, and $56.0 million of restricted loans, respectively. |
C&I loans are the largest component of the commercial portfolio comprising 85 percent and 88 percent of average commercial loans in second quarter 2016 and 2015, respectively. C&I loans increased 8 percent, or $.8 billion, from second quarter 2015 due to net loan growth within several of the regional banks portfolios including general commercial, business banking, and asset-based lending, as well as higher average balances of loans to mortgage companies. Commercial real estate loans increased 39 percent or $.5 billion to $1.9 billion in second quarter 2016 because of growth in expansion markets and with increased funding under these commitments. In addition, the fourth quarter 2015 TAB acquisition contributed to the increase.
Average consumer loans declined 5 percent, or $.3 billion, from a year ago to $5.5 billion in second quarter 2016. The consumer real estate portfolio (home equity lines and installment loans) declined $231.1 million, to $4.7 billion, as the continued wind-down of portfolios within the non-strategic segment outpaced a $238.5 million increase in real estate installment loans from new originations within the regional bank. The permanent mortgage portfolio declined $64.5 million to $435.5 million in second quarter 2016 driven by run-off of legacy assets. Credit Card and Other increased $10.6 million to $360.9 million in second quarter 2016.
Investment Securities
FHNs investment portfolio consists principally of debt securities including government agency issued mortgage-backed securities (MBS) and government agency issued collateralized mortgage obligations (CMO), substantially all of which are classified as available-for-sale (AFS). FHN utilizes the securities portfolio as a source of income, liquidity and collateral for repurchase agreements, for public funds, and as a tool for managing risk of interest rate movements. Period-end investment securities increased 10 percent from $3.7 billion on June 30, 2015 to $4.0 billion on June 30, 2016. Average investment securities were also $4.0 billion in
83
second quarter 2016 and $3.7 billion in second quarter 2015, representing 16 percent of earning assets in both 2016 and 2015. The amount of securities purchased for the investment portfolio is largely driven by the desire to protect the value of non-rate sensitive liabilities and equity and maximize yield on FHNs excess liquidity without negatively affecting future yields while operating in this historically low interest rate environment.
Loans Held-for-Sale
Loans HFS consists of the mortgage warehouse (primarily repurchased government-guaranteed loans), student, small business, and home equity loans. The average balance of loans HFS decreased to $114.9 million in second quarter 2016 from $129.5 million in second quarter 2015. On June 30, 2016 and 2015, loans HFS were $118.0 million and $127.2 million, respectively. The lower balances of both average and period-end loans HFS was largely driven by a smaller mortgage warehouse, and to a lesser extent declines in home equity and student loans. An increase in small business loans partially offset a portion of the year-over-year decline on a period-end basis.
Other Earning Assets
Other earning assets include trading securities, securities purchased under agreements to resell, federal funds sold (FFS), and interest-bearing deposits with the Fed and other financial institutions. Other earning assets increased $37.7 million from second quarter 2015 and averaged $2.7 billion in second quarter 2016. The increase was primarily driven by an increase in securities purchased under agreements to resell (asset repos), partially offset by a decrease in trading securities. Asset repos are used in fixed income trading activity and generally fluctuate with the level of fixed income trading liabilities (short-positions) as securities collateral from repo transactions are used to fulfill trades. Fixed incomes trading inventory fluctuates daily based on customer demand. Other earning assets decreased $385.8 million from $3.0 billion in fourth quarter 2015 driven by a decline in interest-bearing cash as a result of increases in the loan and investment securities portfolios. Other earning assets was $2.4 billion on June 30, 2016 and 2015, respectively, and $2.2 billion on December 31, 2015. The increase in other earning assets on a period-end basis relative to December 31, 2015 was primarily due to increases in fixed income trading inventory levels and asset repos, somewhat offset by lower levels of interest-bearing cash on June 30, 2016. Interest-bearing cash was elevated at December 31, 2015 driven by an inflow of customer deposits.
Non-earning assets
Period-end non-earning assets increased to $2.4 billion on June 30, 2016 from $2.1 billion on June 30, 2015, primarily driven by increases in fixed income receivables and derivative assets, somewhat offset by a decrease in deferred tax assets.
Core Deposits
Average core deposits were $19.7 billion during second quarter 2016, up 9 percent from $18.1 billion during second quarter 2015. The increase in average core deposits was driven by several factors including an increase in commercial customer deposits, FHNs decision to increase deposits in a third party network deposits sweep program, and the addition of deposits associated with the fourth quarter 2015 TAB acquisition. The third party deposits program is an FDIC-insured deposit sweep program where financial institutions can receive unsecured deposits for the long-term (several years) and in larger-dollar increments. Period-end core deposits were $20.1 billion on June 30, 2016, up 10 percent from $18.3 billion on June 30, 2015.
Short-Term Funds
Average short-term funds (certificates of deposit greater than $100,000, FFP, securities sold under agreements to repurchase, trading liabilities, and other short-term borrowings) increased 13 percent to $2.6 billion in second quarter 2016 from $2.3 billion in second quarter 2015. The increase was primarily driven by increases in securities sold under agreements to repurchase, CDs greater than $100,000, and trading liabilities. Securities sold under agreements to repurchase increased from $339.9 million in second quarter 2015 to $490.4 million in second quarter 2016 as additional sources of wholesale funding were used to fund loan growth. CDs greater than $100,000 increased $139.7 million to $545.4 million in second quarter 2016 from second quarter 2015 due in large part to the TAB acquisition in fourth quarter 2015. Trading liabilities increased $115.5 million to $828.6 million in second quarter 2016 reflecting a higher level of on balance sheet hedging at FTN Financial. On average, short-term purchased funds accounted for 11 percent of FHNs funding (core deposits plus short-term purchased funds and term borrowings) in second quarter 2016 and 2015. Period-end short-term funds were $2.8 billion and $2.2 billion on June 30, 2016 and 2015, respectively. The increase in period-end balances was largely driven by an increase in FHLB borrowings as a result of increased loan demand, as well as the items affecting the average increases previously mentioned.
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Term Borrowings
Term borrowings include senior and subordinated borrowings with original maturities greater than one year. Period-end and average term borrowings were $1.1 billion in second quarter 2016 compared to $1.6 billion in second quarter 2015. The decrease in term borrowings primarily relates to $206 million of junior subordinated notes underlying $200 million of trust preferred debt that were called in third quarter 2015 and $250 million of FTBNA subordinated notes that matured in second quarter 2016.
Other Liabilities
Period-end other liabilities increased to $.8 billion on June 30, 2016 from $.7 billion on June 30, 2015, largely driven by an increase in derivative liabilities.
Managements objectives are to provide capital sufficient to cover the risks inherent in FHNs businesses, to maintain excess capital to well-capitalized standards, and to assure ready access to the capital markets. Average equity was $2.7 billion in second quarter 2016 compared to $2.5 billion in second quarter 2015. Period-end equity increased $174.0 million from June 30, 2015 to $2.7 billion on June 30, 2016. The increase in period-end and average equity was primarily due to net income recognized since second quarter 2015 and $72.8 million of equity issued related to the TAF acquisition in October 2015. Additionally, an increase in unrealized gains associated with the AFS securities portfolio also increased period-end and average equity, but was somewhat offset by common and preferred dividends paid, share repurchases (discussed below), and an increase of net pension underfunding.
In January 2014, FHNs board of directors approved a share repurchase program which enables FHN to repurchase its common stock in the open market or in privately negotiated transactions, subject to certain conditions. In July 2015 and April 2016 the board increased and extended that program. The current program authorizes total purchases of up to $350 million and expires on January 31, 2018. During second quarter 2016, FHN repurchased $11.4 million of common shares under the program; during second quarter 2015, FHN did not repurchase any shares. Total purchases under this program through June 30, 2016 were $153.2 million.
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The following tables provide a reconciliation of Shareholders equity from the Consolidated Condensed Statements of Condition to Common Equity Tier 1, Tier 1 and Total Regulatory Capital as well as certain selected capital ratios:
Table 6 - Regulatory Capital and Ratios
(Dollars in thousands) |
June 30, 2016 | June 30, 2015 | December 31, 2015 | |||||||||
Shareholders equity |
$ | 2,396,493 | $ | 2,222,474 | $ | 2,344,155 | ||||||
FHN Non-cumulative perpetual preferred |
(95,624 | ) | (95,624 | ) | (95,624 | ) | ||||||
|
|
|
|
|
|
|||||||
Common equity |
$ | 2,300,869 | $ | 2,126,850 | $ | 2,248,531 | ||||||
Regulatory adjustments: |
||||||||||||
Goodwill and other intangibles |
(168,032 | ) | (122,100 | ) | (165,661 | ) | ||||||
Net unrealized (gains)/losses on securities |
(58,592 | ) | (16,633 | ) | (3,394 | ) | ||||||
Minimum pension liability |
215,616 | 204,733 | 217,586 | |||||||||
Net unrealized (gains)/losses on cash flow hedges |
(4,691 | ) | | | ||||||||
Disallowed deferred tax assets |
(24,448 | ) | (20,082 | ) | (18,404 | ) | ||||||
Other |
| | (78 | ) | ||||||||
|
|
|
|
|
|
|||||||
Common equity tier 1 |
$ | 2,260,722 | $ | 2,172,768 | $ | 2,278,580 | ||||||
FHN Non-cumulative perpetual preferred |
95,624 | 95,624 | 95,624 | |||||||||
Qualifying noncontrolling interest - FTBNA preferred stock |
252,134 | 252,926 | 260,794 | |||||||||
Qualifying trust preferred (a) |
| 50,000 | | |||||||||
Other deductions from tier 1 |
(69,604 | ) | (70,706 | ) | (62,857 | ) | ||||||
|
|
|
|
|
|
|||||||
Tier 1 capital |
$ | 2,538,876 | $ | 2,500,612 | $ | 2,572,141 | ||||||
Tier 2 capital |
249,682 | 421,970 | 264,574 | |||||||||
|
|
|
|
|
|
|||||||
Total regulatory capital |
$ | 2,788,558 | $ | 2,922,582 | $ | 2,836,715 | ||||||
|
|
|
|
|
|
June 30, 2016 | June 30, 2015 | December 31, 2015 | ||||||||||||||||||||||
Ratio | Amount | Ratio | Amount | Ratio | Amount | |||||||||||||||||||
Common Equity Tier 1 |
||||||||||||||||||||||||
First Horizon National Corporation |
10.05 | % | $ | 2,260,722 | 10.41 | % | $ | 2,172,768 | 10.45 | % | $ | 2,278,580 | ||||||||||||
First Tennessee Bank National Association |
10.14 | 2,235,042 | 12.00 | 2,429,076 | 10.81 | 2,284,646 | ||||||||||||||||||
Tier 1 |
||||||||||||||||||||||||
First Horizon National Corporation |
11.28 | 2,538,876 | 11.98 | 2,500,612 | 11.79 | 2,572,141 | ||||||||||||||||||
First Tennessee Bank National Association |
11.20 | 2,468,567 | 13.18 | 2,669,374 | 11.95 | 2,525,912 | ||||||||||||||||||
Total |
||||||||||||||||||||||||
First Horizon National Corporation |
12.39 | 2,788,558 | 14.00 | 2,922,582 | 13.01 | 2,836,715 | ||||||||||||||||||
First Tennessee Bank National Association |
12.21 | 2,690,111 | 14.44 | 2,923,930 | 13.09 | 2,768,625 | ||||||||||||||||||
Tier 1 Leverage |
||||||||||||||||||||||||
First Horizon National Corporation |
9.50 | 2,538,876 | 9.87 | 2,500,612 | 9.85 | 2,572,141 | ||||||||||||||||||
First Tennessee Bank National Association |
9.55 | 2,468,567 | 10.96 | 2,669,374 | 10.06 | 2,525,912 | ||||||||||||||||||
Risk-Weighted Assets |
||||||||||||||||||||||||
First Horizon National Corporation |
22,503,305 | 20,869,862 | 21,812,015 | |||||||||||||||||||||
First Tennessee Bank National Association |
22,034,391 | 20,248,884 | 21,143,459 | |||||||||||||||||||||
Average Assets for Leverage |
||||||||||||||||||||||||
First Horizon National Corporation |
26,715,209 | 25,347,048 | 26,109,449 | |||||||||||||||||||||
First Tennessee Bank National Association |
25,839,939 | 24,360,074 | 25,105,163 |
(a) | June 30, 2015 includes $50 million of trust preferred securities, which began phasing out of Tier 1 capital in 2015 under Basel III. In third quarter 2015 FHN redeemed its junior subordinated debt, which triggered the redemption of the trust preferred securities. |
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Presentation of regulatory measures, even those which are not GAAP, provide a meaningful base for comparability to other financial institutions subject to the same regulations as FHN, as demonstrated by their use by banking regulators in reviewing capital adequacy of financial institutions. Although not GAAP terms, these regulatory measures are not considered non-GAAP under U.S. financial reporting rules as long as their presentation conforms to regulatory standards. Regulatory measures used in this MD&A include: Common Equity Tier 1 capital, generally defined as common equity less goodwill, other intangibles, and certain other required regulatory deductions; Tier 1 capital, generally defined as the sum of core capital (including common equity and instruments that cannot be redeemed at the option of the holder) adjusted for certain items under risk based capital regulations; and risk-weighted assets (RWA), which is a measure of total on- and off-balance sheet assets adjusted for credit and market risk, used to determine regulatory capital ratios.
Banking regulators define minimum capital ratios for bank holding companies and their bank subsidiaries. Based on the capital rules and definitions prescribed by the banking regulators, should any depository institutions capital ratios decline below predetermined levels, it would become subject to a series of increasingly restrictive regulatory actions. The system categorizes a depository institutions capital position into one of five categories ranging from well-capitalized to critically under-capitalized. In second quarter 2016, for an institution the size of FHN to qualify as well-capitalized, Common Equity Tier 1, Tier 1 Capital, Total Capital, and Leverage capital ratios must be at least 6.5 percent, 8 percent, 10 percent, and 5 percent, respectively. As of June 30, 2016, FHN and FTBNA had sufficient capital to qualify as a well-capitalized institution. Regulatory capital ratios decreased in second quarter 2016 relative to second quarter 2015 and fourth quarter 2015 due primarily to increases in risk-weighted assets from growth in earning assets, share repurchases and the phased-in implementation of the Basel III regulations partially offset by the impact of net income less dividends. Additionally, Tier 1 and Total Capital ratios for FHN decreased relative to second quarter 2015 as a result of the redemption of the $200 million trust preferred securities. Throughout 2016, capital ratios are expected to remain significantly above well-capitalized standards.
Pursuant to board authority, FHN may repurchase shares of its common stock from time to time and will evaluate the level of capital and take action designed to generate or use capital, as appropriate, for the interests of the shareholders, subject to legal and regulatory restrictions. FHNs board has not authorized a preferred stock purchase program. The following tables provide information related to securities repurchased by FHN during second quarter 2016:
Table 7 - Issuer Purchases of Common Stock
Compensation Plan-Related Repurchase Authority:
(Volume in thousands, except per share data) |
Total number of shares purchased |
Average price paid per share |
Total number of shares purchased as part of publicly announced programs |
Maximum number of shares that may yet be purchased under the programs |
||||||||||||
2016 |
||||||||||||||||
April 1 to April 30 |
50 | $ | 14.48 | 50 | 28,480 | |||||||||||
May 1 to May 31 |
130 | $ | 13.86 | 130 | 28,350 | |||||||||||
June 1 to June 30 |
* | $ | 13.92 | * | 28,350 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
180 | $ | 14.03 | 180 | ||||||||||||
|
|
|
|
|
|
* | - amount less than 500 shares |
Compensation Plan Programs:
| A consolidated compensation plan share purchase program was announced on August 6, 2004. This plan consolidated into a single share purchase program all of the previously authorized compensation plan share programs as well as the renewal of the authorization to purchase shares for use in connection with two compensation plans for which the share purchase authority had expired. The total amount authorized under this consolidated compensation plan share purchase program, inclusive of a program amendment on April 24, 2006, is 29.6 million shares calculated before adjusting for stock dividends distributed through January 1, 2011. The authorization has been reduced for that portion which relates to compensation plans for which no options remain outstanding. The shares may be purchased over the option exercise period of the various compensation plans on or before December 31, 2023. On June 30, 2016, the maximum number of shares that may be purchased under the program was 28.4 million shares. Purchases may be made in the open market or through privately negotiated transactions and are subject to market conditions, accumulation of excess equity, prudent capital management, and legal and regulatory restrictions. Management currently does not anticipate purchasing a material number of shares under this authority during 2016. |
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Other Repurchase Authority:
(Dollar values and volume in thousands, except per share data) |
Total number of shares purchased |
Average price paid per share (a) |
Total number of shares purchased as part of publicly announced programs |
Maximum approximate dollar value that may yet be purchased under the programs |
||||||||||||
2016 |
||||||||||||||||
April 1 to April 30 |
5 | $ | 14.00 | 5 | $ | 208,088 | ||||||||||
May 1 to May 31 |
497 | $ | 13.72 | 497 | $ | 201,260 | ||||||||||
June 1 to June 30 |
328 | $ | 13.74 | 328 | $ | 196,756 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
830 | $ | 13.73 | 830 | ||||||||||||
|
|
|
|
|
|
(a) | Represents total costs including commissions paid. |
Other Programs:
| On January 22, 2014, FHN announced a $100 million share purchase authority with an expiration date of January 31, 2016. On July 21, 2015, FHN announced a $100 million increase in that authority along with an extension of the expiration date to January 31, 2017, and on April 26, 2016, FHN announced a $150 million increase and further extension to January 31, 2018. As of June 30, 2016, $153.2 million in purchases had been made under this authority at an average price per share of $12.77, $12.75 excluding commissions. Purchases may be made in the open market or through privately negotiated transactions and are subject to market conditions, accumulation of excess equity, prudent capital management, and legal and regulatory restrictions. |
ASSET QUALITY TREND ANALYSIS OF SECOND QUARTER 2016 COMPARED TO SECOND QUARTER 2015
Loan Portfolio Composition
FHN groups its loans into portfolio segments based on internal classifications reflecting the manner in which the ALLL is established and how credit risk is measured, monitored, and reported. From time to time, and if conditions are such that certain subsegments are uniquely affected by economic or market conditions or are experiencing greater deterioration than other components of the loan portfolio, management may determine the ALLL at a more granular level. Commercial loans are composed of commercial, financial, and industrial (C&I) and commercial real estate (CRE). Consumer loans are composed of consumer real estate; permanent mortgage; and credit card and other. FHN has a concentration of residential real estate loans (27 percent of total loans), the majority of which is in the consumer real estate portfolio (25 percent of total loans). Industry concentrations are discussed under the heading C&I below. Consolidated key asset quality metrics for each of these portfolios can be found in Table 15 Asset Quality by Portfolio.
As economic and real estate conditions change, enhancements to underwriting and credit policies and guidelines may be necessary or desirable. Credit underwriting guidelines are outlined in Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015, in the Loan Portfolio Composition discussion in the Asset Quality Section beginning on page 26 and continuing to page 32. FHNs credit underwriting guidelines and loan product offerings as of June 30, 2016, are consistent with those reported and disclosed in the Companys Form 10-K for the year ended December 31, 2015.
The following is a description of each portfolio:
COMMERCIAL LOAN PORTFOLIOS
C&I
The C&I portfolio was $11.2 billion on June 30, 2016, and is comprised of loans used for general business purposes and primarily composed of relationship customers in Tennessee and other selected markets that are managed within the regional bank. Typical products include working capital lines of credit, term loan financing of owner-occupied real estate and fixed assets, and trade credit enhancement through letters of credit.
The following table provides the composition of the C&I portfolio by industry as of June 30, 2016 and 2015. For purposes of this disclosure, industries are determined based on the North American Industry Classification System (NAICS) industry codes used by Federal statistical agencies in classifying business establishments for the collection, analysis, and publication of statistical data related to the U.S. business economy.
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Table 8 C&I Loan Portfolio by Industry
June 30, 2016 | June 30, 2015 | |||||||||||||||
(Dollars in thousands) |
Amount | Percent | Amount | Percent | ||||||||||||
Industry: |
||||||||||||||||
Finance & insurance |
$ | 2,261,847 | 20 | % | $ | 2,090,227 | 21 | % | ||||||||
Loans to mortgage companies |
2,227,171 | 20 | 1,799,665 | 18 | ||||||||||||
Wholesale trade |
813,484 | 7 | 796,378 | 8 | ||||||||||||
Health care & social assistance |
800,059 | 7 | 767,977 | 8 | ||||||||||||
Real estate rental & leasing (a) |
779,008 | 7 | 543,042 | 5 | ||||||||||||
Manufacturing |
704,702 | 6 | 674,493 | 7 | ||||||||||||
Public administration |
579,718 | 5 | 560,157 | 6 | ||||||||||||
Transportation & warehousing |
524,146 | 5 | 323,112 | 3 | ||||||||||||
Other (education, arts, entertainment, etc) (b) |
2,489,310 | 23 | 2,277,512 | 24 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total C&I loan portfolio |
$ | 11,179,445 | 100 | % | $ | 9,832,563 | 100 | % | ||||||||
|
|
|
|
|
|
|
|
Certain previously reported amounts have been reclassified to agree with current presentation.
(a) | Leasing, rental of real estate, equipment, and goods. |
(b) | Industries in this category each comprise less than 5 percent for 2016. |
Industry Concentrations
Significant loan concentrations are considered to exist for a financial institution when there are loans to numerous borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. 40 percent of FHNs C&I portfolio (Finance and insurance plus Loans to mortgage companies) could be affected by items that uniquely impact the financial services industry. Except Finance and Insurance and Loans to Mortgage Companies, as discussed below, on June 30, 2016, FHN did not have any other concentrations of C&I loans in any single industry of 10 percent or more of total loans.
Finance and Insurance
The finance and insurance component represents 20 percent of the C&I portfolio and includes TRUPS (i.e., long-term unsecured loans to bank and insurance-related businesses), loans to bank holding companies, and asset-based lending to consumer finance companies. As of June 30, 2016, asset-based lending to consumer finance companies represents approximately $1.0 billion of the finance and insurance component.
TRUPS lending was originally extended as a form of bridge financing to participants in the pooled trust preferred securitization program offered primarily to smaller banking (generally less than $15 billion in total assets) and insurance institutions through FHNs fixed income business. Origination of TRUPS lending ceased in early 2008. Individual TRUPS are re-graded at least quarterly as part of FHNs commercial loan review process. Typically, the terms of these loans include a prepayment option after a 5 year initial term (with possible triggers of early activation), have a scheduled 30 year balloon payoff, and include an option to defer interest for up to 20 consecutive quarters. As of June 30, 2016, one TRUP relationship was on interest deferral compared to two as of June 30, 2015.
As of June 30, 2016, the unpaid principal balance (UPB) of trust preferred loans totaled $333.4 million ($207.1 million of bank TRUPS and $126.3 million of insurance TRUPS) with the UPB of other bank-related loans totaling $233.1 million. Inclusive of a remaining lower of cost or market (LOCOM) valuation allowance on TRUPS of $25.5 million, total reserves (ALLL plus the LOCOM) for TRUPS and other bank-related loans were $26.5 million or 5 percent of outstanding UPB.
Loans to Mortgage Companies
The balances of loans to mortgage companies were 20 percent of the C&I portfolio as of June 30, 2016, as compared to 18 percent of the C&I portfolio in 2015, and include balances related to both home purchase and refinance activity. This portfolio class, which generally fluctuates with mortgage rates and seasonal factors, includes commercial lines of credit to qualified mortgage companies primarily for the temporary warehousing of eligible mortgage loans prior to the borrowers sale of those mortgage loans to third party investors. Generally, lending to mortgage lenders increases when there is a decline in mortgage rates and decreases when rates rise.
C&I Asset Quality Trends
The C&I ALLL increased $2.2 million from June 30, 2015, to $81.0 million as of June 30, 2016. The net increase in reserves is largely driven by loan growth but was somewhat offset by the favorable impact of lower loss rates as net charge-offs remain at historical lows. Also, the allowance in second quarter 2015 included reserves associated with a TRUP loan that was on interest deferral which has since been resolved. The allowance as a percentage of period-end loans decreased to .72 percent as of June 30, 2016, from .80 percent as of June 30, 2015, mainly due to increases in the loan portfolio. Net charge-offs were $6.3 million in second
89
quarter 2016 compared to $4.1 million in second quarter 2015. The increase in net charge-offs was within the regional banking segment as second quarter 2016 charge-offs were largely driven by a couple of larger credits. Nonperforming C&I loans decreased $13.1 million from June 30, 2015, to $30.5 million on June 30, 2016, primarily driven by the resolution of a TRUP loan that was on interest deferral within the nonstrategic segment combined with the second quarter 2016 resolution of a couple of larger credits within the regional bank. The nonperforming loan (NPL) ratio decreased 17 basis points from June 30, 2015, to .27 percent of C&I loans as of June 30, 2016. The 30+ delinquency ratio decreased 4 basis points from June 30, 2015, to .04 percent of C&I loans as of June 30, 2016.
The following table shows C&I asset quality trends by segment.
Table 9 C&I Asset Quality Trends by Segment
June 30, 2016 | ||||||||||||
(Dollars in thousands) |
Regional Bank | Non-Strategic | Consolidated | |||||||||
Period-end loans |
$ | 10,758,888 | $ | 420,557 | $ | 11,179,445 | ||||||
Nonperforming loans |
26,285 | 4,219 | 30,504 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of April 1, 2016 |
79,471 | 1,416 | 80,887 | |||||||||
Charge-offs |
(7,688 | ) | (181 | ) | (7,869 | ) | ||||||
Recoveries |
1,569 | 33 | 1,602 | |||||||||
Provision/(provision credit) for loan losses |
6,245 | 107 | 6,352 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of June 30, 2016 |
79,597 | 1,375 | 80,972 | |||||||||
|
|
|
|
|
|
|||||||
Troubled debt restructurings |
$ | 31,577 | $ | | $ | 31,577 | ||||||
|
|
|
|
|
|
|||||||
30+ Delinq. % (a) |
0.04 | % | | % | 0.04 | % | ||||||
NPL % |
0.24 | 1.00 | 0.27 | |||||||||
Net charge-offs % (qtr. annualized) |
0.25 | 0.14 | 0.24 | |||||||||
Allowance / loans % |
0.74 | 0.33 | 0.72 | |||||||||
Allowance / charge-offs |
3.23x | 2.31 | x | 3.21 | x | |||||||
|
|
|
|
|
|
|||||||
June 30, 2015 | ||||||||||||
(Dollars in thousands) |
Regional Bank | Non-Strategic | Consolidated | |||||||||
Period-end loans |
$ | 9,398,382 | $ | 434,181 | $ | 9,832,563 | ||||||
Nonperforming loans |
30,231 | 13,342 | 43,573 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of April 1, 2015 |
62,716 | 4,936 | 67,652 | |||||||||
Charge-offs |
(4,976 | ) | | (4,976 | ) | |||||||
Recoveries |
889 | 37 | 926 | |||||||||
Provision/(provision credit) for loan losses |
14,779 | 369 | 15,148 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of June 30, 2015 |
73,408 | 5,342 | 78,750 | |||||||||
|
|
|
|
|
|
|||||||
Troubled debt restructurings |
$ | 22,606 | $ | | $ | 22,606 | ||||||
|
|
|
|
|
|
|||||||
30+ Delinq. % (a) |
0.08 | % | 0.02 | % | 0.08 | % | ||||||
NPL % |
0.32 | 3.07 | 0.44 | |||||||||
Net charge-offs % (qtr. annualized) |
0.18 | NM | 0.17 | |||||||||
Allowance / loans % |
0.78 | 1.23 | 0.80 | |||||||||
Allowance / charge-offs |
4.48 | x | NM | 4.85 | x | |||||||
|
|
|
|
|
|
NM Not meaningful
Loans are expressed net of unearned income.
(a) | 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest. |
Commercial Real Estate
The CRE portfolio was $2.0 billion on June 30, 2016. The CRE portfolio includes both financings for commercial construction and nonconstruction loans. This portfolio is segregated between the income-producing CRE class which contains loans, draws on lines and letters of credit to commercial real estate developers for the construction and mini-permanent financing of income-producing real estate, and the residential CRE class. Subcategories of income CRE consist of multi-family (28 percent), retail (25 percent), industrial (14 percent), office (13 percent), hospitality (13 percent), land/land development (2 percent), and other (5 percent).
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The residential CRE class includes loans to residential builders and developers for the purpose of constructing single-family homes, condominiums, and town homes. Until the fourth quarter 2015 acquisition of TAB, the active residential CRE lending within the regional banking footprint was minimal with nearly all new originations limited to tactical advances to facilitate workout strategies with existing clients and selected new transactions with strategic clients. FHN considers a strategic residential CRE borrower as a homebuilder within the regional banking footprint who remained profitable during the most recent down cycle. FHNs strategy with the recently acquired TAB portfolio is to continue to serve existing customers, but not materially grow overall exposure.
91
CRE Asset Quality Trends
The CRE portfolio had continued stable performance in second quarter 2016 with nonperforming loans down $4.0 million from a year ago. The allowance increased $8.8 million from second quarter 2015 to $30.3 million in second quarter 2016. The increase in allowance is primarily driven by loan growth as balances increased $568.7 million from a year ago, combined with consideration of the current economic environment. Allowance as a percentage of loans remained relatively flat compared to second quarter 2015 at 1.54 percent as of June 30, 2016. FHN recognized a net recovery of $.9 million in second quarter 2016 compared to net charge-offs of $.7 million in second quarter 2015. Nonperforming loans as a percentage of total CRE loans improved 44 basis points from second quarter 2015 to .40 percent as of June 30, 2016. Accruing delinquencies as a percentage of period-end loans improved 8 basis points from June 30, 2015, to .15 percent as of June 30, 2016. The following table shows commercial real estate asset quality trends by segment.
Table 10 Commercial Real Estate Asset Quality Trends by Segment
June 30, 2016 | ||||||||||||
(Dollars in thousands) |
Regional Bank |
Non-Strategic | Consolidated | |||||||||
Period-end loans |
$ | 1,969,412 | $ | NM | $ | 1,969,412 | ||||||
Nonperforming loans |
7,792 | NM | 7,792 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of April 1, 2016 |
25,626 | NM | 25,626 | |||||||||
Charge-offs |
(51 | ) | NM | (51 | ) | |||||||
Recoveries |
909 | NM | 909 | |||||||||
Provision/(provision credit) for loan losses |
3,780 | NM | 3,780 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of June 30, 2016 |
30,264 | NM | 30,264 | |||||||||
|
|
|
|
|
|
|||||||
Troubled debt restructurings |
$ | 8,136 | $ | | $ | 8,136 | ||||||
|
|
|
|
|
|
|||||||
30+ Delinq. % (a) |
0.15 | % | NM | 0.15 | % | |||||||
NPL % |
0.40 | NM | 0.40 | |||||||||
Net charge-offs % (qtr. annualized) |
NM | NM | NM | |||||||||
Allowance / loans % |
1.54 | NM | 1.54 | |||||||||
Allowance / charge-offs |
NM | NM | NM | |||||||||
|
|
|
|
|
|
|||||||
June 30, 2015 | ||||||||||||
(Dollars in thousands) |
Regional Bank |
Non-Strategic | Consolidated | |||||||||
Period-end loans |
$ | 1,400,354 | $ | 361 | $ | 1,400,715 | ||||||
Nonperforming loans |
11,746 | | 11,746 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of April 1, 2015 |
17,609 | 56 | 17,665 | |||||||||
Charge-offs |
(888 | ) | | (888 | ) | |||||||
Recoveries |
147 | 6 | 153 | |||||||||
Provision/(provision credit) for loan losses |
4,597 | (35 | ) | 4,562 | ||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of June 30, 2015 |
21,465 | 27 | 21,492 | |||||||||
|
|
|
|
|
|
|||||||
Troubled debt restructurings |
$ | 8,306 | $ | | $ | 8,306 | ||||||
|
|
|
|
|
|
|||||||
30+ Delinq. % (a) |
0.23 | % | | % | 0.23 | % | ||||||
NPL % |
0.84 | | 0.84 | |||||||||
Net charge-offs % (qtr. annualized) |
0.22 | NM | 0.22 | |||||||||
Allowance / loans % |
1.53 | 7.36 | 1.53 | |||||||||
Allowance / charge-offs |
7.22 | x | NM | 7.29 | x | |||||||
|
|
|
|
|
|
NM Not meaningful
Loans are expressed net of unearned income.
(a) | 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest. |
92
CONSUMER LOAN PORTFOLIOS
Consumer Real Estate
The consumer real estate portfolio was $4.6 billion on June 30, 2016, and is primarily composed of home equity lines and installment loans including restricted balances (loans consolidated under ASC 810). The largest geographical concentrations of balances as of June 30, 2016, are in Tennessee (67 percent) and California (6 percent) with no other state representing more than 3 percent of the portfolio. As of June 30, 2016, approximately 66 percent of the consumer real estate portfolio was in a first lien position. At origination, weighted average FICO score of this portfolio was 749 and refreshed FICO scores averaged 745 as of June 30, 2016, as compared to 746 and 741, respectively, as of June 30, 2015. Generally, performance of this portfolio is affected by life events that affect borrowers finances, the level of unemployment, and home prices.
Home equity lines of credit (HELOCs) comprise $1.9 billion of the consumer real estate portfolio as of June 30, 2016. FHNs HELOCs typically have a 5 or 10 year draw period followed by a 10 or 20 year repayment period, respectively. During the draw period, a borrower is able to draw on the line and is only required to make interest payments. The line is automatically frozen if a borrower becomes 45 days or more past due on payments. Once the draw period has concluded, the line is closed and the borrower is required to make both principal and interest payments monthly until the loan matures. The principal payment generally is fully amortizing, but payment amounts will adjust when variable rates reset to reflect changes in the prime rate.
As of June 30, 2016, approximately 64 percent of FHNs HELOCs are in the draw period, compared to 70 percent as of June 30, 2015. Based on when draw periods are scheduled to end per the line agreement, it is expected that $672.0 million, or 56 percent of HELOCs currently in the draw period, will have entered the repayment period during the next 60 months. Delinquencies and charge-off rates for HELOCs that have entered the repayment period are initially higher than HELOCs still in the draw period because of the increased minimum payment requirement; however, after some seasoning, performance of these loans begins to stabilize. The home equity lines of the consumer real estate portfolio are being monitored closely for those nearing the end of the draw period and borrowers are being contacted proactively early in the process. The following table shows the HELOCs currently in the draw period and expected timing of conversion to the repayment period.
Table 11 HELOC Draw To Repayment Schedule
June 30, 2016 | June 30, 2015 | |||||||||||||||
(Dollars in thousands) |
Repayment Amount |
Percent | Repayment Amount |
Percent | ||||||||||||
Months remaining in draw period: |
||||||||||||||||
0-12 |
$ | 199,832 | 17 | % | $ | 329,518 | 21 | % | ||||||||
13-24 |
223,903 | 18 | 269,846 | 17 | ||||||||||||
25-36 |
103,759 | 9 | 240,316 | 15 | ||||||||||||
37-48 |
66,949 | 6 | 119,295 | 8 | ||||||||||||
49-60 |
77,565 | 6 | 78,499 | 5 | ||||||||||||
>60 |
535,070 | 44 | 544,831 | 34 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 1,207,078 | 100 | % | $ | 1,582,305 | 100 | % | ||||||||
|
|
|
|
|
|
|
|
93
Consumer Real Estate Asset Quality Trends
Overall, performance of the consumer real estate portfolio improved in second quarter 2016 when compared with second quarter 2015. The ALLL decreased $26.4 million from second quarter 2015 to $59.1 million as of June 30, 2016, with 97 percent of the decline attributable to the non-strategic segment. The allowance as a percentage of loans was 1.27 percent as of June 30, 2016, compared to 1.75 percent as of June 30, 2015. The 48 basis point decline in the allowance as a percentage of loans from second quarter 2015 to second quarter 2016 is the result of continued run-off of the balances within the non-strategic portfolios, sustained levels of low net charge-offs, strong performance, and continued improvement/stabilization of property values. The balance of nonperforming loans was $107.0 million and $114.5 million as of June 30, 2016 and 2015, respectively, and the decrease was largely related to both improvement and run-off in the non-strategic segment of the portfolio. Loans delinquent 30 or more days and still accruing declined from $45.9 million as of June 30, 2015, to $37.2 million as of June 30, 2016. Net charge-offs were $.5 million in second quarter 2016 compared to a net recovery of $.9 million in second quarter 2015. The ratios of 30+ delinquency and NPLs as a percentage of loans within the nonstrategic segment have increased compared to second quarter 2015 as total loans are declining at a faster rate than delinquencies and nonperforming loans. The following table shows consumer real estate asset quality trends by segment.
Table 12 Consumer Real Estate Asset Quality Trends by Segment
June 30, 2016 | ||||||||||||
(Dollars in thousands) |
Regional Bank |
Non-Strategic | Consolidated | |||||||||
Period-end loans |
$ | 3,577,246 | $ | 1,063,533 | $ | 4,640,779 | ||||||
Nonperforming loans |
26,273 | 80,723 | 106,996 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of April 1, 2016 |
26,602 | 40,719 | 67,321 | |||||||||
Charge-offs |
(1,487 | ) | (5,095 | ) | (6,582 | ) | ||||||
Recoveries |
1,700 | 4,382 | 6,082 | |||||||||
Provision/(provision credit) for loan losses |
(2,537 | ) | (5,203 | ) | (7,740 | ) | ||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of June 30, 2016 |
24,278 | 34,803 | 59,081 | |||||||||
|
|
|
|
|
|
|||||||
Troubled debt restructurings |
$ | 50,637 | $ | 112,702 | $ | 163,339 | ||||||
|
|
|
|
|
|
|||||||
30+ Delinq. % (a) |
0.40 | % | 2.16 | % | 0.80 | % | ||||||
NPL % |
0.73 | 7.59 | 2.31 | |||||||||
Net charge-offs % (qtr. annualized) |
NM | 0.26 | 0.04 | |||||||||
Allowance / loans % |
0.68 | 3.27 | 1.27 | |||||||||
Allowance / charge-offs |
NM | 12.14 | x | 29.40 | x | |||||||
|
|
|
|
|
|
|||||||
June 30, 2015 | ||||||||||||
(Dollars in thousands) |
Regional Bank |
Non-Strategic | Consolidated | |||||||||
Period-end loans |
$ | 3,412,626 | $ | 1,457,645 | $ | 4,870,271 | ||||||
Nonperforming loans |
26,627 | 87,898 | 114,525 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of April 1, 2015 |
32,574 | 76,671 | 109,245 | |||||||||
Charge-offs |
(1,819 | ) | (5,084 | ) | (6,903 | ) | ||||||
Recoveries |
1,178 | 6,673 | 7,851 | |||||||||
Provision/(provision credit) for loan losses |
(6,881 | ) | (17,855 | ) | (24,736 | ) | ||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of June 30, 2015 |
25,052 | 60,405 | 85,457 | |||||||||
|
|
|
|
|
|
|||||||
Troubled debt restructurings |
$ | 53,950 | $ | 118,147 | $ | 172,097 | ||||||
|
|
|
|
|
|
|||||||
30+ Delinq. % (a) |
0.47 | % | 2.06 | % | 0.94 | % | ||||||
NPL % |
0.78 | 6.03 | 2.35 | |||||||||
Net charge-offs % (qtr. annualized) |
0.08 | NM | NM | |||||||||
Allowance / loans % |
0.73 | 4.14 | 1.75 | |||||||||
Allowance / charge-offs |
9.73 | x | NM | NM | ||||||||
|
|
|
|
|
|
NM Not meaningful
Loans are expressed net of unearned income.
(a) | 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest. |
94
Permanent Mortgage
The permanent mortgage portfolio was $.4 billion on June 30, 2016. This portfolio is primarily composed of jumbo mortgages and one-time-close (OTC) completed construction loans that were originated through legacy businesses. The corporate segment includes loans that were previously included in off-balance sheet proprietary securitization trusts. These loans were brought back into the loan portfolios at fair value through the execution of cleanup calls due to the relatively small balances left in the securitization and should continue to run-off. Approximately 24 percent of loan balances as of June 30, 2016, are in California, but the remainder of the portfolio is somewhat geographically diverse. Run-off contributed to a majority of the $48.7 million net decrease in permanent mortgage period-end balances from second quarter 2015 to second quarter 2016.
The ALLL decreased $4.8 million as of June 30, 2016, from $22.4 million as of June 30, 2015. TDR reserves comprise 89 percent of the ALLL for the permanent mortgage portfolio as of June 30, 2016. Accruing delinquencies as a percentage of total loans decreased from 2.26 percent in second quarter 2015 to 2.21 percent in second quarter 2016. Nonperforming loans declined $1.9 million to $30.6 million as of June 30, 2016, although NPLs as a percentage of loans increased from 6.66 percent as of June 30, 2015, to 6.97 percent as of June 30, 2016, as total permanent loans declined at a faster rate than the nonperforming loans. Annualized net charge-offs as a percentage of average loans were .11 percent in second quarter 2015, which cannot be compared meaningfully with the annualized net recoveries experienced in second quarter 2016. The following table shows permanent mortgage asset quality trends by segment.
Table 13 Permanent Mortgage Asset Quality Trends by Segment
June 30, 2016 | ||||||||||||||||
(Dollars in thousands) |
Regional Bank |
Corporate (a) | Non-Strategic | Consolidated | ||||||||||||
Period-end loans |
$ | 46,229 | $ | 84,964 | $ | 307,821 | $ | 439,014 | ||||||||
Nonperforming loans |
404 | 896 | 29,280 | 30,580 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Allowance for loan losses as of April 1, 2016 |
383 | NM | 18,371 | 18,754 | ||||||||||||
Charge-offs |
| NM | (349 | ) | (349 | ) | ||||||||||
Recoveries |
| NM | 484 | 484 | ||||||||||||
Provision/(provision credit) for loan losses |
196 | NM | (1,485 | ) | (1,289 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Allowance for loan losses as of June 30, 2016 |
579 | NM | 17,021 | 17,600 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Troubled debt restructurings |
$ | 1,015 | $ | 3,888 | $ | 90,979 | $ | 95,882 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
30+ Delinq. % (b) |
0.90 | % | 4.92 | % | 1.66 | % | 2.21 | % | ||||||||
NPL % |
0.87 | 1.06 | 9.51 | 6.97 | ||||||||||||
Net charge-offs % (qtr. annualized) |
- | NM | NM | NM | ||||||||||||
Allowance / loans % |
1.25 | NM | 5.53 | 4.01 | ||||||||||||
Allowance / charge-offs |
NM | NM | NM | NM | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
June 30, 2015 | ||||||||||||||||
(Dollars in thousands) |
Regional Bank |
Corporate (a) | Non-Strategic | Consolidated | ||||||||||||
Period-end loans |
$ | 9,729 | $ | 113,123 | $ | 364,827 | $ | 487,679 | ||||||||
Nonperforming loans |
489 | 3,079 | 28,905 | 32,473 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Allowance for loan losses as of April 1, 2015 |
35 | NM | 20,151 | 20,186 | ||||||||||||
Charge-offs |
(265 | ) | NM | (544 | ) | (809 | ) | |||||||||
Recoveries |
253 | NM | 418 | 671 | ||||||||||||
Provision/(provision credit) for loan losses |
60 | NM | 2,269 | 2,329 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Allowance for loan losses as of June 30, 2015 |
83 | NM | 22,294 | 22,377 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Troubled debt restructurings |
$ | 964 | $ | 6,827 | $ | 99,366 | $ | 107,157 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
30+ Delinq. % (b) |
4.44 | % | 2.51 | % | 2.12 | % | 2.26 | % | ||||||||
NPL % |
5.03 | 2.72 | 7.92 | 6.66 | ||||||||||||
Net charge-offs % (qtr. annualized) |
0.48 | NM | 0.14 | 0.11 | ||||||||||||
Allowance / loans % |
0.86 | NM | 6.11 | 4.59 | ||||||||||||
Allowance / charge-offs |
1.74 | x | NM | 44.22 | x | 40.53 | x | |||||||||
|
|
|
|
|
|
|
|
NM Not meaningful
Loans are expressed net of unearned income.
(a) | The valuation taken upon exercise of clean-up calls included expected losses. |
(b) | 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest. |
95
Credit Card and Other
The credit card and other portfolio was $.4 billion as of June 30, 2016, and primarily includes credit card receivables, other consumer-related credits, and automobile loans. The allowance decreased to $11.9 million as of June 30, 2016, from $13.3 million as of June 30, 2015. In second quarter 2016, FHN recognized $2.5 million of net charge-offs in the credit card and other portfolio, compared to $5.0 million in second quarter 2015. The higher net charge-offs in second quarter 2015 were primarily driven by charge-offs in a sub segment of the credit card portfolio that were previously reserved for. Annualized net charge-offs as a percentage of average loans decreased 300 basis points from second quarter 2015 to 2.73 percent in second quarter 2016. Loans 30 days or more delinquent and accruing as a percentage of loans increased 10 basis points from second quarter 2015 to 1.19 percent in second quarter 2016. The following table shows credit card and other asset quality trends by segment.
Table 14 - Credit Card and Other Asset Quality Trends by Segment
June 30, 2016 | ||||||||||||
(Dollars in thousands) |
Regional Bank |
Non- Strategic |
Consolidated | |||||||||
Period-end loans |
$ | 351,597 | $ | 9,090 | $ | 360,687 | ||||||
Nonperforming loans |
| 725 | 725 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of April 1, 2016 |
11,005 | 441 | 11,446 | |||||||||
Charge-offs |
(3,355 | ) | (90 | ) | (3,445 | ) | ||||||
Recoveries |
929 | 63 | 992 | |||||||||
Provision/(provision credit) for loan losses |
3,054 | (157 | ) | 2,897 | ||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of June 30, 2016 |
11,633 | 257 | 11,890 | |||||||||
|
|
|
|
|
|
|||||||
Troubled debt restructurings |
$ | 309 | $ | 47 | $ | 356 | ||||||
|
|
|
|
|
|
|||||||
30+ Delinq. % (a) |
1.20 | % | 1.06 | % | 1.19 | % | ||||||
NPL % |
| 7.98 | 0.20 | |||||||||
Net charge-offs % (qtr. annualized) |
2.77 | 1.15 | 2.73 | |||||||||
Allowance / loans % |
3.31 | 2.83 | 3.30 | |||||||||
Allowance / charge-offs |
1.19 | x | 2.41 | x | 1.21 | x | ||||||
|
|
|
|
|
|
|||||||
June 30, 2015 | ||||||||||||
(Dollars in thousands) |
Regional Bank |
Non- Strategic |
Consolidated | |||||||||
Period-end loans |
$ | 334,617 | $ | 10,927 | $ | 345,544 | ||||||
Nonperforming loans |
| 749 | 749 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of April 1, 2015 |
13,048 | 532 | 13,580 | |||||||||
Charge-offs |
(5,600 | ) | (258 | ) | (5,858 | ) | ||||||
Recoveries |
764 | 92 | 856 | |||||||||
Provision/(provision credit) for loan losses |
4,523 | 174 | 4,697 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses as of June 30, 2015 |
12,735 | 540 | 13,275 | |||||||||
|
|
|
|
|
|
|||||||
Troubled debt restructurings |
$ | 333 | $ | 85 | $ | 418 | ||||||
|
|
|
|
|
|
|||||||
30+ Delinq. % (a) |
1.09 | % | 1.31 | % | 1.09 | % | ||||||
NPL % |
| 6.86 | 0.22 | |||||||||
Net charge-offs % (qtr. annualized) |
5.72 | 5.97 | 5.73 | |||||||||
Allowance / loans % |
3.81 | 4.95 | 3.84 | |||||||||
Allowance / charge-offs |
0.66 | x | 0.81 | x | 0.66 | x | ||||||
|
|
|
|
|
|
Loans are expressed net of unearned income.
(a) | 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest. |
96
The following table provides additional asset quality data by loan portfolio:
Table 15 - Asset Quality by Portfolio
June 30 | ||||||||
2016 | 2015 | |||||||
Key Portfolio Details |
||||||||
C&I |
||||||||
Period-end loans ($ millions) |
$ | 11,179 | $ | 9,833 | ||||
30+ Delinq. % (a) |
0.04 | % | 0.08 | % | ||||
NPL % |
0.27 | 0.44 | ||||||
Charge-offs % (qtr. annualized) |
0.24 | 0.17 | ||||||
Allowance / loans % |
0.72 | % | 0.80 | % | ||||
Allowance / charge-offs |
3.21 | x | 4.85 | x | ||||
Commercial Real Estate |
||||||||
Period-end loans ($ millions) |
$ | 1,969 | $ | 1,401 | ||||
30+ Delinq. % (a) |
0.15 | % | 0.23 | % | ||||
NPL % |
0.40 | 0.84 | ||||||
Charge-offs % (qtr. annualized) |
NM | 0.22 | ||||||
Allowance / loans % |
1.54 | % | 1.53 | % | ||||
Allowance / charge-offs |
NM | 7.29 | x | |||||
Consumer Real Estate |
||||||||
Period-end loans ($ millions) |
$ | 4,641 | $ | 4,870 | ||||
30+ Delinq. % (a) |
0.80 | % | 0.94 | % | ||||
NPL % |
2.31 | 2.35 | ||||||
Charge-offs % (qtr. annualized) |
0.04 | NM | ||||||
Allowance / loans % |
1.27 | % | 1.75 | % | ||||
Allowance / charge-offs |
29.40 | x | NM | |||||
Permanent Mortgage |
||||||||
Period-end loans ($ millions) |
$ | 439 | $ | 488 | ||||
30+ Delinq. % (a) |
2.21 | % | 2.26 | % | ||||
NPL % |
6.97 | 6.66 | ||||||
Charge-offs % (qtr. annualized) |
NM | 0.11 | ||||||
Allowance / loans % |
4.01 | % | 4.59 | % | ||||
Allowance / charge-offs |
NM | 40.53 | x | |||||
Credit Card and Other |
||||||||
Period-end loans ($ millions) |
$ | 361 | $ | 346 | ||||
30+ Delinq. % (a) |
1.19 | % | 1.09 | % | ||||
NPL % |
0.20 | 0.22 | ||||||
Charge-offs % (qtr. annualized) |
2.73 | 5.73 | ||||||
Allowance / loans % |
3.30 | % | 3.84 | % | ||||
Allowance / charge-offs |
1.21 | x | 0.66 | x |
NM Not meaningful
Loans are expressed net of unearned income.
(a) | 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest. |
Allowance for Loan Losses
Managements policy is to maintain the ALLL at a level sufficient to absorb estimated probable incurred losses in the loan portfolio. The total allowance for loan losses decreased 10 percent from second quarter 2015 to $199.8 million on June 30, 2016. The ALLL as of June 30, 2016, reflects loan growth within the regional bank, strong asset quality with the consumer real estate portfolio continuing to stabilize, declining non-strategic balances, and the moderation of the pace of improvement from a year ago. The ratio of allowance for loan losses to total loans, net of unearned income, decreased to 1.07 percent on June 30, 2016, from 1.31 percent on June 30, 2015.
The provision for loan losses is the charge to earnings necessary to maintain the ALLL at a sufficient level reflecting managements estimate of probable incurred losses in the loan portfolio. The provision for loan losses increased to $4.0 million in second quarter 2016 from $2.0 million in second quarter 2015.
FHN expects asset quality trends to remain relatively stable for the near term if the slow growth of the economy continues. The C&I portfolio is expected to continue to show stable trends but short-term variability (both positive and negative) is possible. The CRE portfolio metrics should be relatively consistent as FHN expects stable property values over the near term. The remaining non-
97
strategic consumer real estate and permanent mortgage portfolios should continue to steadily wind down. Asset quality metrics within non-strategic may become skewed as the portfolio continues to shrink and the denominator of asset quality ratios becomes smaller. Continued stabilization in performance of the consumer real estate portfolio assumes an ongoing economic recovery as consumer delinquency and loss rates are correlated with unemployment trends and strength of the housing market.
Consolidated Net Charge-offs
Net charge-offs decreased $.8 million from second quarter 2015 to $8.2 million in second quarter 2016. The ALLL was 6.04 times annualized net charge-offs for second quarter 2016 compared with 6.15 times annualized net charge-offs for second quarter 2015. The annualized net charge-offs to average loans ratio declined by 2 basis points to .19 percent. Net charge-off levels remain at historical lows.
Commercial net charge-offs were $5.4 million in second quarter 2016 compared to $4.8 million in second quarter 2015. The net charge-offs in second quarter 2016 were primarily driven by a couple of larger C&I credits. Consolidated net charge-offs in the consumer portfolios declined 33 percent from second quarter 2015 to $2.8 million in second quarter 2016. The decline in consumer net charge-offs was largely driven by the credit card and other portfolio within the regional bank.
Nonperforming Assets
Nonperforming loans are loans placed on nonaccrual status if it becomes probable that full collection of principal and interest will not be collected in accordance with contractual terms, impairment has been recognized as a partial charge-off of principal balance, or on a case-by-case basis, if FHN continues to receive payments but there are other borrower-specific issues. Included in nonaccruals are loans in which FHN continues to receive payments, including residential real estate loans where the borrower has been discharged of personal obligation through bankruptcy and second liens, regardless of delinquency status, behind first liens that are 90 or more days past due or are TDRs. These, along with foreclosed real estate, excluding foreclosed real estate from government insured mortgages, represent nonperforming assets (NPAs).
Total nonperforming assets (including NPLs HFS) decreased to $198.9 million on June 30, 2016, from $238.5 million on June 30, 2015. The nonperforming assets ratio (nonperforming assets excluding NPLs HFS to total period-end loans plus foreclosed real estate and other assets) decreased to 1.03 percent in second quarter 2016 from 1.37 percent in second quarter 2015 due to a 51 percent decrease in foreclosed real estate (excluding foreclosed real estate from government insured mortgages) and a 13 percent decline in portfolio nonperforming loans from second quarter 2015 to second quarter 2016. Portfolio nonperforming loans declined $26.5 million from second quarter 2015 to $176.6 million on June 30, 2016. The decline in nonperforming loans was primarily driven by a decrease in C&I and consumer real estate nonperforming loans within the non-strategic segment as well as a decline in C&I and commercial real estate loans within the regional bank.
Nonperforming C&I loans decreased $13.1 million in 2016 from $43.6 million in 2015. This decrease was largely driven by the 2015 sale of an insurance TRUP that was on interest deferral. Commercial real estate NPLs decreased $4.0 million to $7.8 million in 2016 within the regional bank. Consumer nonperforming loans decreased $9.4 million from $147.7 million in 2015 to $138.3 million in 2016, primarily due to a $7.2 million decline in non-strategic consumer real estate.
The ratio of the ALLL to NPLs in the loan portfolio was 1.13 times in 2016 compared to 1.09 times in 2015, driven by lower nonperforming loans which was partially offset by a decrease in the ALLL. Certain nonperforming loans in both the commercial and consumer portfolios are deemed collateral-dependent and are charged down to an estimate of collateral value less costs to sell. Because loss content has been recognized through a partial charge-off, typically reserves are not recorded.
Table 16 provides an activity rollforward of foreclosed real estate balances for June 30, 2016 and 2015. The balance of foreclosed real estate, exclusive of inventory from government insured mortgages, decreased to $14.2 million as of June 30, 2016, from $29.1 million as of June 30, 2015, as FHN has executed sales of existing foreclosed assets and continued efforts to avoid foreclosures by restructuring loans and working with borrowers. Additionally, property values have stabilized which also affect the balance of foreclosed real estate. See the discussion of Foreclosure Practices in the Market Uncertainties and Prospective Trends section of MD&A for information regarding the impact on FHN.
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Table 16 Rollforward of Foreclosed Real Estate
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Beginning balance (a) |
$ | 17,460 | $ | 29,681 | $ | 24,977 | $ | 30,430 | ||||||||
Valuation adjustments |
(314 | ) | (1,284 | ) | (850 | ) | (1,660 | ) | ||||||||
New foreclosed property |
2,814 | 4,831 | 3,546 | 8,293 | ||||||||||||
Disposals: |
||||||||||||||||
Single transactions |
(5,810 | ) | (4,119 | ) | (13,523 | ) | (7,954 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance, June 30 (a) |
$ | 14,150 | $ | 29,109 | $ | 14,150 | $ | 29,109 | ||||||||
|
|
|
|
|
|
|
|
(a) | Excludes foreclosed real estate related to government insured mortgages. |
The following table provides consolidated asset quality information for the three months ended June 30, 2016 and 2015:
Table 17 Asset Quality Information
Three Months Ended June 30 |
||||||||
(Dollars in thousands) | 2016 | 2015 | ||||||
Allowance for loan losses: |
|
|||||||
Beginning balance on April 1 |
$ | 204,034 | $ | 228,328 | ||||
Provision for loan losses |
4,000 | 2,000 | ||||||
Charge-offs |
(18,296 | ) | (19,434 | ) | ||||
Recoveries |
10,069 | 10,457 | ||||||
|
|
|
|
|||||
Ending balance on June 30 |
$ | 199,807 | $ | 221,351 | ||||
|
|
|
|
|||||
Reserve for remaining unfunded commitments |
5,351 | 5,561 | ||||||
Total allowance for loan losses and reserve for unfunded commitments |
$ | 205,158 | $ | 226,912 | ||||
|
|
|
|
|||||
As of June 30 | ||||||||
Nonperforming Assets by Segment |
2016 | 2015 | ||||||
Regional Banking: |
||||||||
Nonperforming loans (a) |
$ | 60,754 | $ | 69,093 | ||||
Foreclosed real estate (b) |
7,031 | 19,230 | ||||||
|
|
|
|
|||||
Total Regional Banking |
67,785 | 88,323 | ||||||
|
|
|
|
|||||
Non-Strategic: |
||||||||
Nonperforming loans (a) |
114,947 | 130,894 | ||||||
Nonperforming loans held-for-sale after fair value adjustment (a) |
8,195 | 6,372 | ||||||
Foreclosed real estate (b) |
7,119 | 9,879 | ||||||
|
|
|
|
|||||
Total Non-Strategic |
130,261 | 147,145 | ||||||
|
|
|
|
|||||
Corporate: |
||||||||
Nonperforming loans (a) |
896 | 3,079 | ||||||
|
|
|
|
|||||
Total Corporate |
896 | 3,079 | ||||||
|
|
|
|
|||||
Total nonperforming assets (a) (b) |
$ | 198,942 | $ | 238,547 | ||||
|
|
|
|
(a) | Excludes loans that are 90 or more days past due and still accruing interest. |
(b) | Excludes foreclosed real estate from government-insured mortgages. |
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Table 17 Asset Quality Information (Continued)
As of June 30 | ||||||||
2016 | 2015 | |||||||
Loans and commitments: |
||||||||
Total period-end loans, net of unearned income |
$ | 18,589,337 | $ | 16,936,772 | ||||
Foreclosed real estate from government insured mortgages (foreclosures occurring prior to January 1, 2015) |
5,903 | 11,159 | ||||||
Potential problem assets (a) |
234,266 | 189,641 | ||||||
Loans 30 to 89 days past due |
38,551 | 48,924 | ||||||
Loans 30 to 89 days past due guaranteed portion (b) |
209 | 7 | ||||||
Loans 90 days past due (c) |
20,239 | 22,521 | ||||||
Loans 90 days past due guaranteed portion (b) (c) |
31 | 172 | ||||||
Loans held-for-sale 30 to 89 days past due |
5,005 | 6,607 | ||||||
Loans held-for-sale 30 to 89 days past due guaranteed portion (b) |
4,968 | 5,925 | ||||||
Loans held-for-sale 90 days past due (c) |
13,916 | 16,557 | ||||||
Loans held-for-sale 90 days past due guaranteed portion (b) (c) |
13,792 | 16,049 | ||||||
Remaining unfunded commitments |
7,516,141 | 7,507,314 | ||||||
Average loans, net of unearned income |
$ | 17,812,113 | $ | 16,789,939 | ||||
Allowance and net charge-off ratios |
||||||||
Allowance to total loans |
1.07 | % | 1.31 | % | ||||
Allowance to nonperforming loans in the loan portfolio |
1.13 | x | 1.09 | x | ||||
Allowance to annualized net charge-offs |
6.04 | x | 6.15 | x | ||||
Nonperforming assets to loans and foreclosed real estate (d) |
1.03 | % | 1.37 | % | ||||
Nonperforming loans in the loan portfolio to total loans, net of unearned income |
0.95 | % | 1.20 | % | ||||
Total annualized net charge-offs to average loans (e) |
0.19 | % | 0.21 | % |
(a) | Includes past due loans. |
(b) | Guaranteed loans include FHA, VA, and GNMA loans repurchased through the GNMA buyout program. |
(c) | Amounts are not included in nonperforming/nonaccrual loans. |
(d) | Ratio is non-performing assets related to the loan portfolio to total loans plus foreclosed real estate and other assets. |
(e) | Net charge-off ratio is annualized net charge-offs divided by quarterly average loans, net of unearned income. |
Past Due Loans and Potential Problem Assets
Past due loans are loans contractually past due as to interest or principal payments, but which have not yet been put on nonaccrual status. Loans in the portfolio that are 90 days or more past due and still accruing decreased to $20.2 million on June 30, 2016, from $22.5 million on June 30, 2015. The decrease was driven primarily by the commercial and consumer real estate portfolios. Loans 30 to 89 days past due decreased to $38.6 million on June 30, 2016, from $48.9 million on June 30, 2015. The decrease was largely driven by the consumer real estate and C&I portfolios.
Potential problem assets represent those assets where information about possible credit problems of borrowers has caused management to have serious doubts about the borrowers ability to comply with present repayment terms. This definition is believed to be substantially consistent with the standards established by the OCC for loans classified as substandard. Potential problem assets in the loan portfolio, which includes loans past due 90 days or more and still accruing, were $234.3 million on June 30, 2016, $266.5 million on March 31, 2016, and $189.6 million on June 30, 2015. The 12 percent decrease in potential problem assets from first quarter 2016 to second quarter 2016 was due to a decrease in classified loans driven by the resolution of prior quarter C&I delinquencies. The current expectation of losses from potential problem assets has been included in managements analysis for assessing the adequacy of the allowance for loan losses.
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Troubled Debt Restructuring and Loan Modifications
As part of FHNs ongoing risk management practices, FHN attempts to work with borrowers when appropriate to extend or modify loan terms to better align with their current ability to repay. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated separately. In a situation where an economic concession has been granted to a borrower that is experiencing financial difficulty, FHN identifies and reports that loan as a Troubled Debt Restructuring (TDR). Additionally, FHN structures loan modifications to amortize the debt within a reasonable period of time. See Note 4 Loans for further discussion regarding TDRs and loan modifications.
On June 30, 2016 and 2015, FHN had $299.3 million and $310.6 million portfolio loans classified as TDRs, respectively. For TDRs in the loan portfolio, FHN had loan loss reserves of $51.2 million and $61.0 million, or 17 percent and 20 percent of TDR balances, as of June 30, 2016 and 2015, respectively. Additionally, FHN had $73.8 million and $80.8 million of HFS loans classified as TDRs as of June 30, 2016 and 2015, respectively. Total held-to-maturity TDRs decreased by $11.3 million with the majority of the decline attributable to permanent mortgage and consumer real estate loans partially offset by an increase in C&I.
The following table provides a summary of TDRs for the periods ended June 30, 2016 and 2015:
Table 18 Troubled Debt Restructurings
(Dollars in thousands) | As of June 30, 2016 |
As of June 30, 2015 |
||||||
Held-to-maturity: |
||||||||
Permanent mortgage: |
||||||||
Current |
$ | 74,912 | $ | 82,926 | ||||
Delinquent |
2,139 | 3,700 | ||||||
Non-accrual (a) |
18,831 | 20,531 | ||||||
|
|
|
|
|||||
Total permanent mortgage |
95,882 | 107,157 | ||||||
|
|
|
|
|||||
Consumer real estate: |
||||||||
Current |
97,045 | 106,872 | ||||||
Delinquent |
3,534 | 3,532 | ||||||
Non-accrual (b) |
62,760 | 61,693 | ||||||
|
|
|
|
|||||
Total consumer real estate |
163,339 | 172,097 | ||||||
|
|
|
|
|||||
Credit card and other: |
||||||||
Current |
343 | 407 | ||||||
Delinquent |
13 | 11 | ||||||
Non-accrual |
| | ||||||
|
|
|
|
|||||
Total credit card and other |
356 | 418 | ||||||
|
|
|
|
|||||
Commercial loans: |
||||||||
Current |
26,238 | 21,061 | ||||||
Delinquent |
597 | | ||||||
Non-accrual |
12,878 | 9,851 | ||||||
|
|
|
|
|||||
Total commercial loans |
39,713 | 30,912 | ||||||
|
|
|
|
|||||
Total held-to-maturity |
$ | 299,290 | $ | 310,584 | ||||
|
|
|
|
|||||
Held-for-sale: |
||||||||
Current |
$ | 53,054 | $ | 58,044 | ||||
Delinquent |
13,980 | 15,906 | ||||||
Non-accrual |
6,777 | 6,834 | ||||||
|
|
|
|
|||||
Total held-for-sale |
73,811 | 80,784 | ||||||
|
|
|
|
|||||
Total troubled debt restructurings |
$ | 373,101 | $ | 391,368 | ||||
|
|
|
|
(a) | Balances as of June 30, 2016 and 2015, include $4.3 million and $6.4 million, respectively, of discharged bankruptcies. |
(b) | Balances as of June 30, 2016 and 2015, include $15.4 million and $17.5 million, respectively, of discharged bankruptcies. |
Except as discussed below, there have been no significant changes to FHNs risk management practices as described under Risk Management beginning on page 48 of Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
MARKET RISK MANAGEMENT
There have been no significant changes to FHNs market risk management practices as described under Market Risk Management beginning on page 49 of Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
101
Value-at-Risk (VaR) and Stress Testing
VaR is a statistical risk measure used to estimate the potential loss in value from adverse market movements over an assumed fixed holding period within a stated confidence level. FHN employs a model to compute daily VaR measures for its trading securities inventory. FHN computes VaR using historical simulation with a 1-year lookback period at a 99 percent confidence level and 1-day and 10-day time horizons. Additionally, FHN computes a Stressed VaR (SVaR) measure. The SVaR computation uses the same model but with model inputs reflecting historical data from a continuous 12-month period that reflects a period of significant financial stress appropriate for our trading securities portfolio.
A summary of FHNs VaR and SVaR measures for 1-day and 10-day time horizons is as follows:
Table 19 VaR and SVaR Measures
Three Months Ended June 30, 2016 |
Six Months Ended June 30, 2016 |
As of June 30, 2016 |
||||||||||||||||||||||||||
(Dollars in thousands) |
Mean | High | Low | Mean | High | Low | ||||||||||||||||||||||
1-day |
||||||||||||||||||||||||||||
VaR |
$ | 767 | $ | 1,248 | $ | 446 | $ | 746 | $ | 1,411 | $ | 393 | $ | 846 | ||||||||||||||
SVaR |
3,983 | 5,298 | 2,398 | 3,496 | 5,789 | 1,748 | 3,469 | |||||||||||||||||||||
10-day |
||||||||||||||||||||||||||||
VaR |
1,892 | 3,954 | 898 | 1,813 | 4,058 | 751 | 1,866 | |||||||||||||||||||||
SVaR |
12,826 | 17,987 | 8,026 | 11,326 | 17,987 | 3,263 | 10,376 | |||||||||||||||||||||
Three Months Ended June 30, 2015 |
Six Months Ended June 30, 2015 |
As of June 30, 2015 |
||||||||||||||||||||||||||
(Dollars in thousands) |
Mean | High | Low | Mean | High | Low | ||||||||||||||||||||||
1-day |
||||||||||||||||||||||||||||
VaR |
$ | 703 | $ | 1,050 | $ | 466 | $ | 670 | $ | 1,050 | $ | 388 | $ | 520 | ||||||||||||||
SVaR |
3,092 | 4,510 | 1,717 | 3,380 | 5,356 | 1,717 | 2,192 | |||||||||||||||||||||
10-day |
||||||||||||||||||||||||||||
VaR |
2,128 | 3,452 | 1,155 | 1,923 | 3,452 | 806 | 1,155 | |||||||||||||||||||||
SVaR |
9,753 | 15,538 | 4,094 | 9,722 | 15,538 | 4,094 | 6,165 | |||||||||||||||||||||
Year Ended December 31, 2015 |
As of December 31, 2015 |
|||||||||||||||||||||||||||
(Dollars in thousands) |
Mean | High | Low | |||||||||||||||||||||||||
1-day |
||||||||||||||||||||||||||||
VaR |
$ | 664 | $ | 1,174 | $ | 384 | $ | 498 | ||||||||||||||||||||
SVaR |
3,184 | 5,727 | 1,628 | 2,263 | ||||||||||||||||||||||||
10-day |
||||||||||||||||||||||||||||
VaR |
1,788 | 3,452 | 742 | 990 | ||||||||||||||||||||||||
SVaR |
10,122 | 16,677 | 4,094 | 4,645 |
102
FHNs overall VaR measure includes both interest rate risk and credit spread risk. Separate measures of these component risks are as follows:
Table 20 Schedule of Risks Included in VaR
As of June 30 , 2016 |
As of June 30, 2015 |
As of December 31, 2015 |
||||||||||||||||||||||
(Dollars in Thousands) |
1-day | 10-day | 1-day | 10-day | 1-day | 10-day | ||||||||||||||||||
Interest rate risk |
$ | 744 | $ | 975 | $ | 508 | $ | 1,957 | $ | 451 | $ | 553 | ||||||||||||
Credit spread risk |
754 | 1,666 | 403 | 673 | 443 | 841 |
CAPITAL MANAGEMENT AND ADEQUACY
There have been no significant changes to FHNs capital management practices as described under Capital Management and Adequacy on page 51 of Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
OPERATIONAL RISK MANAGEMENT
There have been no significant changes to FHNs operational risk management practices as described under Operational Risk Management on page 51 of Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
COMPLIANCE RISK MANAGEMENT
There have been no significant changes to FHNs compliance risk management practices as described under Compliance Risk Management on page 51 of Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
CREDIT RISK MANAGEMENT
There have been no significant changes to FHNs credit risk management practices as described under Credit Risk Management beginning on page 51 of Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
INTEREST RATE RISK MANAGEMENT
Except as disclosed below, there have been no significant changes to FHNs interest rate risk management practices as described under Interest Rate Risk Management beginning on page 52 of Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
Net Interest Income Simulation Analysis
The information provided in this section, including the discussion regarding the outcomes of simulation analysis and rate shock analysis, is forward-looking. Actual results, if the assumed scenarios were to occur, could differ because of interest rate movements, the ability of management to execute its business plans, and other factors, including those presented in the Forward-Looking Statements section of this MD&A.
Management uses interest rate exposure models to formulate strategies to improve balance sheet positioning, earnings, or both, within FHNs interest rate risk, liquidity, and capital guidelines. FHN uses simulation analysis as its primary tool to evaluate interest rate risk exposure. This type of analysis computes net interest income at risk under a variety of market interest rate scenarios to dynamically identify interest rate risk exposures exclusive of the potential impact on fee income. This risk management simulation, which considers forecasted balance sheet changes, prepayment speeds, deposit mix, pricing impacts, and other changes in the net interest spread, provides an estimate of the annual net interest income at risk for given changes in interest rates. The results help FHN develop strategies for managing exposure to interest rate risk. Like any risk management technique creating simulated outcomes for a range of given scenarios, interest rate simulation modeling is based on a number of assumptions and judgments. In this case, the assumptions relate primarily to loan and deposit growth, asset and liability prepayments, interest rates, and on- and off-balance sheet hedging strategies. Management believes the assumptions used and scenarios selected in its simulations are reasonable. Nevertheless, simulation modeling provides only a sophisticated estimate, not a precise calculation, of exposure to any given changes in interest rates.
The simulation models used to analyze net interest income create various at-risk scenarios looking at assumed increases and/or decreases in interest rates from instantaneous and staggered movements over a certain time period. In addition, the risk of changes in the yield curve is estimated by flattening and steepening the yield curve to simulate net interest income exposure. Management reviews these different scenarios to determine alternative strategies and executes based on that evaluation. The models are regularly updated to incorporate management action. Any scenarios that indicate a change in net interest income of 3 percent or more from a base net interest income are presented to the Board quarterly.
103
The remaining scenarios performed attempt to capture risk to net interest income from rising rates and changes in the shape of the yield curve assuming a static balance sheet. Based on the rate sensitivity position on June 30, 2016, net interest income exposure over the next 12 months to a rate shock of plus 25 basis points, 50 basis points, 100 basis points, and 200 basis points is estimated to be a favorable variance of 1.5 percent, 2.9 percent, 5.3 percent, and 9.6 percent, respectively of base net interest income. A steepening yield curve scenario where long-term rates increase by 50 basis points and short-term rates are static, results in a favorable variance in net interest income of 1.4 percent of base net interest income. A flattening yield curve scenario where long-term rates decrease by 50 basis points and short-term rates are static, results in an unfavorable variance in net interest income of 1.7 percent of base net interest income. A rate shock of minus 25 basis points results in an unfavorable variance in net interest income of 2.0 percent of base net interest income. These hypothetical scenarios are used to create one estimate of risk, and do not necessarily represent managements current view of future interest rates or market developments.
While the continuing low interest rate environment is not expected to have a significant impact on the capital position of FHN, the ability to expand net interest margin in this environment, without assuming additional credit risk, continues to be a challenge for FHN. As long as the historically low interest rate environment persists, net interest margin will typically decline as yields on fixed rate loans and investment securities decrease due to the combination of asset prepayments and lower reinvestment rates. With core deposit rates near zero, there is little opportunity to offset the yield declines in fixed rate assets with corresponding declines in deposit rates.
LIQUIDITY MANAGEMENT
ALCO also focuses on liquidity management: the funding of assets with liabilities of appropriate duration, while mitigating the risk of unexpected cash needs. ALCO and the Board of Directors have adopted a Liquidity Policy to direct management of the Companys liquidity risk. The objective of the Liquidity Policy is to ensure that FHN meets its cash and collateral obligations promptly, in a cost-effective manner and with the highest degree of reliability. The maintenance of adequate levels of asset and liability liquidity should provide FHN with the ability to meet both expected and unexpected cash flows and collateral needs. Key liquidity ratios, asset liquidity levels and the amount available from funding sources are reported to ALCO on a regular basis. FHNs Liquidity Management Policy establishes liquidity limits that are deemed appropriate for its risk profile.
In accordance with the Liquidity Policy, ALCO manages FHNs exposure to liquidity risk through a dynamic, real time forecasting methodology. Base liquidity forecasts are reviewed by ALCO and are updated as financial conditions dictate. In addition to the baseline liquidity reports, robust stress testing of assumptions and funds availability are periodically reviewed. FHN maintains a contingency funding plan that may be executed, should unexpected difficulties arise in accessing funding that affects FHN, the industry as a whole, or both. Subject to market conditions and compliance with applicable regulatory requirements from time to time, funds are available from a number of sources including the available-for-sale securities portfolio, dealer and commercial customer repurchase agreements, access to the overnight and term Federal Funds markets, incremental borrowing capacity at the FHLB of $2.8 billion as of June 30, 2016, brokered deposits, loan sales, syndications, and access to the Federal Reserve Banks.
Core deposits are a significant source of funding and have historically been a stable source of liquidity for banks. Generally, core deposits represent funding from a financial institutions customer base which provide inexpensive, predictable pricing. The Federal Deposit Insurance Corporation insures these deposits to the extent authorized by law. Generally, these limits are $250 thousand per account owner for interest bearing and non-interest bearing accounts. The ratio of total loans, excluding loans HFS and restricted real estate loans, to core deposits was 90 percent in 2016 compared to 92 percent in 2015.
FHN also may use unsecured short-term borrowings as a source of liquidity. Currently, the largest concentration of unsecured borrowings is federal funds purchased from bank correspondent customers. These funds are considered to be substantially more stable than funds purchased in the national broker markets for federal funds due to the long, historical, and reciprocal nature of banking services provided by FHN to these correspondent banks. The remainder of FHNs wholesale short-term borrowings is repurchase agreement transactions accounted for as secured borrowings with the Regional Banks business customers or Fixed Incomes broker dealer counterparties.
Both FHN and FTBNA may access the debt markets in order to provide funding through the issuance of senior or subordinated unsecured debt subject to market conditions and compliance with applicable regulatory requirements. In 2014, FTBNA issued $400 million of fixed rate senior notes due in December 2019. In October 2015, FHN issued $500 million of fixed rate senior notes due in December 2020. FHN also maintains $31.0 million of borrowings which are secured by residential real estate loans in a consolidated securitization trust.
Both FHN and FTBNA have the ability to generate liquidity by issuing preferred equity, and (for FHN) by issuing common equity, subject to market conditions and compliance with applicable regulatory requirements. In January 2013, FHN issued $100 million of Non-Cumulative Perpetual Preferred Stock, Series A. As of June 30, 2016, FTBNA and subsidiaries had outstanding preferred shares of $295.4 million, which are reflected as noncontrolling interest on the Consolidated Condensed Statements of Condition.
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Parent company liquidity is primarily provided by cash flows stemming from dividends and interest payments collected from subsidiaries. These sources of cash represent the primary sources of funds to pay cash dividends to shareholders and principal and interest to debt holders of FHN. The amount paid to the parent company through FTBNA common dividends is managed as part of FHNs overall cash management process, subject to applicable regulatory restrictions. Certain regulatory restrictions exist regarding the ability of FTBNA to transfer funds to FHN in the form of cash, common dividends, loans, or advances. At any given time, the pertinent portions of those regulatory restrictions allow FTBNA to declare preferred or common dividends without prior regulatory approval in an aggregate amount equal to FTBNAs retained net income for the two most recent completed years plus the current year to date. For any period, FTBNAs retained net income generally is equal to FTBNAs regulatory net income reduced by the preferred and common dividends declared by FTBNA. Excess dividends in either of the two most recent completed years may be offset with available retained net income in the two years immediately preceding it. Applying the applicable rules, FTBNAs total amount available for dividends was negative $189.2 million as of June 30, 2016, consequently, FTBNA could not pay common dividends to its sole common stockholder, FHN, or to its preferred shareholders without prior regulatory approval. FTBNA applied for and received approval from the OCC to declare and pay common dividends to FHN in first, second and third quarter 2016 in the amounts of $50 million, $120 million, and $40 million, respectively, and in the amount of $325 million in 2015. FTBNA declared and paid preferred dividends in first and second quarter 2016 and each quarter of 2015, with OCC approval as necessary. Additionally FTBNA declared preferred dividends in third quarter 2016, with OCC approval.
Payment of a dividend to shareholders of FHN is dependent on several factors which are considered by the Board. These factors include FHNs current and prospective capital, liquidity, and other needs, applicable regulatory restrictions, and also availability of funds to FHN through a dividend from FTBNA. Additionally, the Federal Reserve and the OCC generally require insured banks and bank holding companies to pay cash dividends only out of current operating earnings. Consequently, the decision of whether FHN will pay future dividends and the amount of dividends will be affected by current operating results. FHN paid a cash dividend of $.07 per common share on July 1, 2016, and in July 2016 the Board approved a $.07 per common share cash dividend payable on October 3, 2016, to shareholders of record on September 9, 2016. FHN paid a cash dividend of $1,550.00 per preferred share on July 11, 2016, and in July 2016 the Board approved a $1,550.00 per preferred share cash dividend payable on October 11, 2016, to shareholders of record on September 23, 2016.
CASH FLOWS
The Consolidated Condensed Statements of Cash Flows provide information on cash flows from operating, investing, and financing activities for the six months ended June 30, 2016 and 2015. The level of cash and cash equivalents increased $174.9 million during the first half of 2016 compared to an increase of $96.9 million in the first half of 2015. During the six months ended June 30, 2016, cash provided by financing activities outpaced cash used by investing and operating activities, whereas during the six months ended June 30, 2015, cash provided by investing activities and operating activities exceeded cash used by financing activities.
Net cash used by operating activities was $21.3 million in 2016 compared to net cash provided of $111.1 million in 2015. Cash outflows in 2016 were primarily due to net fixed income trading activities of $148.7 million and net changes in operating assets and liabilities of $73.0 million. Operating cash flows in 2015 were favorably driven by cash-related net income items and a $185.7 million net increase in cash related to fixed income activities, somewhat offset by a net decline in operating assets and liabilities primarily attributable to the DOJ/HUD settlement payment in second quarter 2015.
Net cash used by investing activities was $640.7 million in 2016, compared to net cash provided of $480.5 million in 2015. Cash outflows in 2016 were primarily attributable to a $904.6 million increase in loans, but were partially offset by a $281.1 million decrease in interest-bearing cash. In 2015, cash inflows were primarily attributed to a $1.3 billion decrease in interest-bearing cash and $40.4 million of proceeds from the sale of properties, but were partially offset by loan growth in the regional bank and $100.1 million in net cash used in the available-for-sale securities portfolio.
Net cash provided by financing activities was $836.9 million in 2016 compared to net cash used of $494.7 million in 2015. In 2016, cash inflows were positively affected by a $663.2 million net increase in deposits and a $562.7 million increase in short-term borrowings, but were partially offset by $259.9 million in payments of long-term borrowings, which included the maturity of $250 million of subordinated notes. Additionally, share repurchases and dividend payments negatively affected financing cash flows in 2016. In 2015, cash was negatively affected by a $737.5 million decrease in short-term borrowings and $312.8 million in payments of long-term borrowings, which included the maturity of $304 million of subordinated notes. Additionally dividends and share repurchases negatively affected financing cash flows in 2015. These outflows were somewhat mitigated by a $605.9 million increase in deposits resulting from a new correspondent banking product which resulted in a shift in funding from short-term borrowings.
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Other Contractual Obligations
Pension obligations are funded by FHN to provide current and future benefits to participants in FHNs noncontributory, defined benefit pension plan. On December 31, 2015, the annual measurement date, pension obligations (representing the present value of estimated future benefit payments), including obligations of the unfunded plans, were $816.5 million with $638.2 million of assets (measured at current fair value) in the qualified plans trust to fund the qualified plan obligations. As of December 31, 2015, the projected benefit obligation and the accumulated benefit obligation for the qualified pension plan exceeded corresponding plan assets. FHN expects to contribute approximately $165 million to the qualified pension plan in third quarter 2016.
REPURCHASE OBLIGATIONS, OFF-BALANCE SHEET ARRANGEMENTS, AND OTHER CONTRACTUAL OBLIGATIONS
Obligations from Legacy Mortgage Businesses
Overview
Prior to September 2008 FHN originated loans through its legacy mortgage business, primarily first lien home loans, with the intention of selling them. Sales typically were effected either as non-recourse whole loan sales or through non-recourse proprietary securitizations. Conventional conforming single-family residential mortgage loans were sold predominately to two GSEs: Fannie Mae and Freddie Mac. Also, federally insured or guaranteed whole loans were pooled, and payments to investors were guaranteed through Ginnie Mae. Many mortgage loan originations, especially nonconforming mortgage loans, were sold to investors, or certificate-holders, predominantly through FH proprietary securitizations but also, to a lesser extent, through other whole loans sold to private non-Agency purchasers. FHN used only one trustee for all of its FH proprietary securitizations. FHN also originated mortgage loans eligible for FHA insurance or VA guaranty.
In addition, FHN originated and sold HELOCs and second lien mortgages through other whole loans sold to private purchasers and, to a lesser extent, through FH proprietary securitizations. Currently, only one FH securitization of HELOCs remains outstanding.
For non-recourse loan sales, FHN has exposure for repurchase of loans, make-whole damages, or other related damages, arising from claims that FHN breached its representations and warranties made at closing to the purchasers, including GSEs, other whole loan purchasers, and the trustee of FH proprietary securitizations.
During the time these legacy activities were conducted, FHN frequently sold mortgage loans with servicing retained. As a result, FHN accumulated substantial amounts of MSR on its balance sheet, as well as contractual servicing obligations and related deposits and receivables. FHN conducted a significant servicing business under its First Horizon Home Loans brand.
MI was required by GSE rules for certain of the loans sold to GSEs and was also provided for certain of the loans that were securitized. MI generally was provided for first lien loans sold or securitized having an LTV ratio at origination of greater than 80 percent.
In 2007, market conditions deteriorated to the point where mortgage-backed securitizations could no longer be sold economically; FHNs last securitization occurred that year. FHN continued selling mortgage loans to GSEs until August 31, 2008, when FHN sold its national mortgage origination and servicing platforms along with a portion of its servicing assets and obligations. FHN contracted to have its remaining servicing obligations sub-serviced. Since the platform sale FHN has sold substantially all remaining servicing assets and obligations in several transactions, concluding in 2014.
Certain mortgage-related terms used in this section are defined in Mortgage-Related Glossary below.
Repurchase and Make-Whole Obligations
Starting in 2009 FHN received a high number of claims either to repurchase loans from the purchaser or to pay the purchaser to make them whole for economic losses incurred. These claims have been driven primarily by loan delinquencies. In repurchase or make-whole claims a loan purchaser typically asserts that specified loans violated representations and warranties FHN made when the loans were sold. A significant majority of claims received overall have come from GSEs, and the remainder are from purchasers of other whole loan sales. FHN has not received a loan repurchase or make-whole claim from the FH proprietary securitization trustee.
Generally, FHN reviews each claim and MI cancellation notice individually. Those responses include appeal, provide additional information, deny the claim (rescission), repurchase the loan or remit a make-whole payment, or reflect cancellation of MI.
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After several years resolving repurchase and make-whole claims with each GSE on a loan-by-loan basis, in 2013 and 2014 FHN entered into DRAs with the GSEs, resolving at once a large fraction of pending and potential future claims. Starting in 2014 the overall number of such claims diminished substantially, primarily as a result of the DRAs. Each DRA resolved obligations associated with loans originated from 2000 to 2008, but certain obligations and loans were excluded. Under each DRA, FHN remains responsible for repurchase obligations related to certain excluded defects (such as title defects and violations of the GSEs Charter Act) and FHN continues to have loan repurchase or monetary compensation obligations under the DRAs related to private mortgage insurance rescissions, cancellations, and denials (with certain exceptions). FHN also has exposure related to loans where there has been a prior bulk sale of servicing, as well as certain other whole-loan sales. With respect to loans where there has been a prior bulk sale of servicing, FHN is not responsible for MI cancellations and denials to the extent attributable to the acts of the current servicer.
While large portions of repurchase claims from the GSEs were settled with the DRAs, large-scale settlement with non-Agency claimants is not practical. Those claims are resolved case by case or, occasionally, with less-comprehensive settlements. In second quarter 2016, in the largest such settlement to date, FHN settled certain repurchase claims which resulted in the reversal of $31.4 million of mortgage repurchase and foreclosure provision expense. Repurchase claims that are not resolved by the parties could become litigation.
FH Proprietary Securitization Actions
FHN has potential financial exposure from FH proprietary securitizations outside of the repurchase/make-whole process. Several investors in certificates sued FHN and others starting in 2009, and several underwriters or other counterparties have demanded that FHN indemnify and defend them in securitization lawsuits. The pending suits generally assert that disclosures made to investors in the offering and sale of certificates were legally deficient. A number of those matters have settled or otherwise been resolved, but several remain pending. See Note 10 Contingencies and Other Disclosures for a discussion of certain actions pending against FHN in relation to FH proprietary securitizations.
Servicing Obligations
FHNs national servicing business was sold as part of the platform sale in 2008. A significant amount of MSR was sold at that time, and a significant amount was retained. The related servicing activities, including foreclosure and loss mitigation practices, not sold in 2008 were outsourced through a three-year subservicing arrangement (the 2008 subservicing agreement) with the platform buyer (the 2008 subservicer). The 2008 subservicing agreement expired in 2011 when FHN entered into a replacement agreement with a new subservicer (the 2011 subservicer). In fourth quarter 2013, FHN contracted to sell a substantial majority of its remaining servicing obligations and servicing assets (including advances) to the 2011 subservicer. The servicing was transferred to the buyer in stages, and was substantially completed in first quarter 2014. The servicing still retained by FHN continues to be subserviced by the 2011 subservicer.
As servicer, FHN had contractual obligations to the owners of the loans, primarily GSEs and securitization trustees, to handle billing, custodial, and other tasks related to each loan. Each subservicer undertook to perform those obligations on FHNs behalf during the applicable subservicing period, although FHN legally remained the servicer of record for those loans that were subserviced.
The 2008 subservicer has been subject to a consent decree, and entered into a settlement agreement, with regulators related to alleged deficiencies in servicing and foreclosure practices. The 2008 subservicer has made demands of FHN, under the 2008 subservicing agreement, to pay certain resulting costs and damages totaling $43.5 million. FHN disagrees with those demands and has made no payments. This disagreement has the potential to result in litigation and, in any such future litigation, the claim against FHN may be substantial.
A certificate holder has contacted FHN, threatening to make claims based on alleged deficiencies in servicing loans held in certain FH proprietary securitization trusts. FHN cannot predict how this inquiry will proceed nor whether any claim or suit, if made or brought, will be material to FHN.
Origination Data
From 2005 through 2008, FHN originated and sold $69.5 billion of mortgage loans to the Agencies. This includes $57.6 billion of loans sold to GSEs and $11.9 billion of loans guaranteed by Ginnie Mae. Although FHN conducted these businesses before 2005, GSE loans originated in 2005 through 2008 account for approximately 90 percent of all repurchase requests/make-whole claims received from the 2008 platform sale through June 30, 2016.
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From 2005 through 2007, $26.7 billion of mortgage loans were included in FH proprietary securitizations. The following table summarizes the loan composition of those securitizations:
Table 21 Composition of Off-Balance Sheet First Horizon Proprietary Mortgage Securitizations
(Dollars in thousands) | Original UPB for active FH securitizations (a) |
UPB as of June 30, 2016 |
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Loan type: |
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Jumbo |
$ | 9,410,499 | $ | 1,288,303 | ||||
Alt-A |
17,270,431 | 3,174,272 | ||||||
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Total FH proprietary securitizations |
$ | 26,680,930 | $ | 4,462,575 | ||||
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(a) | Original principal balances obtained from trustee statements. |
Mortgage-Related Glossary
Agencies | the two GSEs and Ginnie Mae | GSEs | Fannie Mae and Freddie Mac | |||
certificates | securities sold to investors representing interests in mortgage loan securitizations | HUD | Dept. of Housing and Urban Development | |||
DOJ | U.S. Department of Justice | MI | private mortgage insurance, insuring against borrower payment default | |||
DRA | definitive resolution agreement with a GSE | MSR | mortgage servicing rights | |||
Fannie Mae, Fannie, FNMA | Federal National Mortgage Association | nonconforming loans | loans that did not conform to Agency program requirements | |||
FH proprietary securitization | securitization of mortgages sponsored by FHN under its First Horizon brand | other whole loans sold | mortgage loans sold to private, non-Agency purchasers | |||
FHA | Federal Housing Administration | 2008 platform sale, platform sale, 2008 sale | FHNs sale of its national mortgage origination and servicing platforms in 2008 | |||
FHFA | Federal Housing Financing Agency, conservator for the GSEs | pipeline | pipeline of mortgage repurchase, make-whole, & certain related claims against FHN | |||
Freddie Mac, Freddie, FHLMC | Federal Home Loan Mortgage Corporation | VA | Veterans Administration | |||
Ginnie Mae, Ginnie, GNMA | Government National Mortgage Association |
Active Pipeline
FHN accumulates the amount of repurchase requests, make-whole claims, and certain other related claims into the active pipeline. The active pipeline includes the amount of claims for loan repurchase, make-whole payments, loans as to which MI has been canceled, and information requests from purchasers of loans originated and sold through FHNs legacy mortgage banking business. MI was required for certain of the loans sold to GSEs or that were securitized. Although unresolved MI cancellation notices are not formal repurchase requests, FHN includes those loans in the active pipeline. Additionally, FHN is responsible for covering losses for purchasers to the extent there is a shortfall in MI insurance coverage (MI curtailment).
For purposes of quantifying the amount of loans underlying the repurchase/make-whole claim or MI cancellation notice or curtailment, FHN uses the current UPB in all cases if the amount is available. If current UPB is unavailable, the original loan amount is substituted for the current UPB. When neither is available, the claim amount is used as an estimate of current UPB. Generally, the amount of a loan subject to a repurchase/make-whole claim, or with open MI issues, remains in the active pipeline throughout the resolution process with a claimant. On June 30, 2016, the active pipeline was $63.1 million.
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The following tables provide a rollforward of the number and unpaid principal amount of loans in the active repurchase request pipeline, including related unresolved MI cancellation notices and other requests for the three and six months ended June 30, 2016:
Table 22Rollforward of the Active Pipeline
April 1, 2016 | Inflows | Resolutions | Settlement | Adjustments (c) | June 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | ||||||||||||||||||||||||||||||||||||
Repurchase/make whole requests: |
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FNMA (a) |
119 | $ | 23,049 | 9 | $ | 1,692 | (18 | ) | $ | (3,051 | ) | (87 | ) | $ | (17,286 | ) | (1 | ) | $ | (140 | ) | 22 | $ | 4,264 | ||||||||||||||||||||||||
FHLMC (a) |
9 | 1,499 | | | (3 | ) | (515 | ) | (1 | ) | (50 | ) | 1 | 140 | 6 | 1,074 | ||||||||||||||||||||||||||||||||
GNMA |
| | 4 | 295 | | | | | | | 4 | 295 | ||||||||||||||||||||||||||||||||||||
Non-Agency whole loan-related |
126 | 19,335 | | | (1 | ) | (227 | ) | | | | | 125 | 19,108 | ||||||||||||||||||||||||||||||||||
MI Cancellations |
20 | 4,379 | 6 | 871 | (7 | ) | (870 | ) | (6 | ) | (934 | ) | 1 | (102 | ) | 14 | 3,344 | |||||||||||||||||||||||||||||||
MI Curtailments |
566 | 93,276 | 10 | 1,821 | (296 | ) | (47,014 | ) | (129 | ) | (22,236 | ) | 4 | 491 | 155 | 26,338 | ||||||||||||||||||||||||||||||||
Other requests (b) |
190 | 28,441 | 11 | 1,116 | (68 | ) | (10,650 | ) | (69 | ) | (9,842 | ) | (2 | ) | (383 | ) | 62 | 8,682 | ||||||||||||||||||||||||||||||
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Total |
1,030 | $ | 169,979 | 40 | $ | 5,795 | (393 | ) | $ | (62,327 | ) | (292 | ) | $ | (50,348 | ) | 3 | $ | 6 | 388 | $ | 63,105 | ||||||||||||||||||||||||||
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January 1, 2016 | Inflows | Resolutions | Settlement | Adjustments (c) | June 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | ||||||||||||||||||||||||||||||||||||
Repurchase/make whole requests: |
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FNMA (a) |
115 | $ | 22,465 | 33 | $ | 5,902 | (38 | ) | $ | (6,677 | ) | (87 | ) | $ | (17,286 | ) | (1 | ) | $ | (140 | ) | 22 | $ | 4,264 | ||||||||||||||||||||||||
FHLMC (a) |
10 | 1,699 | 4 | 720 | (8 | ) | (1,435 | ) | (1 | ) | (50 | ) | 1 | 140 | 6 | 1,074 | ||||||||||||||||||||||||||||||||
GNMA |
2 | 297 | 4 | 295 | (2 | ) | (297 | ) | | | | | 4 | 295 | ||||||||||||||||||||||||||||||||||
Non-Agency whole loan-related |
131 | 19,971 | 4 | 835 | (10 | ) | (1,698 | ) | | | | | 125 | 19,108 | ||||||||||||||||||||||||||||||||||
MI Cancellations |
23 | 5,214 | 18 | 3,232 | (18 | ) | (3,206 | ) | (6 | ) | (934 | ) | (3 | ) | (962 | ) | 14 | 3,344 | ||||||||||||||||||||||||||||||
MI Curtailments |
535 | 89,805 | 65 | 10,465 | (321 | ) | (52,313 | ) | (129 | ) | (22,236 | ) | 5 | 617 | 155 | 26,338 | ||||||||||||||||||||||||||||||||
Other requests (b) |
190 | 27,881 | 18 | 2,367 | (75 | ) | (11,491 | ) | (69 | ) | (9,842 | ) | (2 | ) | (233 | ) | 62 | 8,682 | ||||||||||||||||||||||||||||||
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Total |
1,006 | $ | 167,332 | 146 | $ | 23,816 | (472 | ) | $ | (77,117 | ) | (292 | ) | $ | (50,348 | ) | | $ | (578 | ) | 388 | $ | 63,105 | |||||||||||||||||||||||||
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The following tables provide a rollforward of the number and unpaid principal amount of loans in the active repurchase request pipeline, including related unresolved MI cancellation notices and other requests for the three and six months ended June 30, 2015:
April 1, 2015 | Inflows | Resolutions | Adjustments (c) | June 30, 2015 | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | ||||||||||||||||||||||||||||||
Repurchase/make whole requests: |
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FNMA (a) |
131 | $ | 25,497 | 22 | $ | 2,851 | (38 | ) | $ | (6,053 | ) | | $ | 125 | 115 | $ | 22,420 | |||||||||||||||||||||||
FHLMC (a) |
17 | 2,823 | 3 | 483 | (4 | ) | (514 | ) | | | 16 | 2,792 | ||||||||||||||||||||||||||||
GNMA |
2 | 69 | 2 | 395 | | | | | 4 | 464 | ||||||||||||||||||||||||||||||
Non-Agency whole loan-related |
171 | 25,827 | 18 | 3,279 | (10 | ) | (2,215 | ) | 1 | 155 | 180 | 27,046 | ||||||||||||||||||||||||||||
MI Cancellations |
29 | 6,046 | 24 | 4,651 | (27 | ) | (5,085 | ) | 4 | 528 | 30 | 6,140 | ||||||||||||||||||||||||||||
MI Curtailments |
503 | 84,572 | 100 | 16,970 | (14 | ) | (2,074 | ) | (9 | ) | (1,300 | ) | 580 | 98,168 | ||||||||||||||||||||||||||
Other requests (b) |
145 | 22,930 | 31 | 4,071 | (43 | ) | (6,526 | ) | 4 | 166 | 137 | 20,641 | ||||||||||||||||||||||||||||
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Total |
998 | $ | 167,764 | 200 | $ | 32,700 | (136 | ) | $ | (22,467 | ) | | $ | (326 | ) | 1,062 | $ | 177,671 | ||||||||||||||||||||||
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January 1, 2015 | Inflows | Resolutions | Adjustments (c) | June 30, 2015 | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | ||||||||||||||||||||||||||||||
Repurchase/make whole requests: |
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FNMA(a) |
142 | $ | 27,831 | 52 | $ | 6,808 | (78 | ) | $ | (12,195 | ) | (1 | ) | $ | (24 | ) | 115 | $ | 22,420 | |||||||||||||||||||||
FHLMC(a) |
19 | 3,310 | 10 | 2,023 | (13 | ) | (2,541 | ) | | | 16 | 2,792 | ||||||||||||||||||||||||||||
GNMA |
2 | 69 | 2 | 395 | (1 | ) | (123 | ) | 1 | 123 | 4 | 464 | ||||||||||||||||||||||||||||
Non-Agency whole loan-related |
171 | 25,827 | 19 | 3,434 | (11 | ) | (2,370 | ) | 1 | 155 | 180 | 27,046 | ||||||||||||||||||||||||||||
MI Cancellations |
28 | 6,004 | 43 | 7,638 | (45 | ) | (7,954 | ) | 4 | 452 | 30 | 6,140 | ||||||||||||||||||||||||||||
MI Curtailments |
594 | 101,063 | 152 | 26,687 | (161 | ) | (28,859 | ) | (5 | ) | (723 | ) | 580 | 98,168 | ||||||||||||||||||||||||||
Other requests (b) |
65 | 10,825 | 129 | 18,887 | (60 | ) | (9,323 | ) | 3 | 252 | 137 | 20,641 | ||||||||||||||||||||||||||||
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Total |
1,021 | $ | 174,929 | 407 | $ | 65,872 | (369 | ) | $ | (63,365 | ) | 3 | $ | 235 | 1,062 | $ | 177,671 | |||||||||||||||||||||||
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(a) | Inflows represent amounts excluded from the DRAs. |
(b) | Other requests typically include requests for additional information from both GSE and non-GSE purchasers. |
(c) | Generally, adjustments reflect reclassifications between repurchase requests and MI cancellation notices and/or updates to UPB. |
As of June 30, 2016, Agencies accounted for approximately 68 percent of the total active pipeline, inclusive of MI cancellation notices, MI curtailments, and all other claims. MI curtailment requests are intended only to cover the shortfall in MI insurance proceeds, therefore FHNs loss from MI curtailments as a percentage of UPB in the pipeline generally is significantly lower than that of a repurchase or make-whole claim. Total repurchase and make-whole claims decreased $28.0 million to $24.7 million and total MI cancellation notices decreased $2.8 million to $3.3 million in second quarter 2016 relative to second quarter 2015. MI curtailment and other requests decreased $71.8 million and $12.0 million from second quarter 2015 to $26.3 million and $8.7 million, respectively, in second quarter 2016. At June 30, 2016, the active pipeline contained no loan repurchase or make-whole requests from the FH proprietary securitization trustee related to first lien mortgage loans based on claims related to breaches of representations and warranties.
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Repurchase Accrual Methodology
Over the past several years FHNs approach for determining the adequacy of the repurchase and foreclosure reserve has evolved, sometimes substantially, based on changes in information available. Repurchase/make-whole rates vary based on purchaser, vintage, and claim type. For those loans repurchased or covered by a make-whole payment, cumulative average loss severities range between 50 and 60 percent of the UPB.
Repurchase Accrual Approach
Repurchase/Make-whole and Damages obligations and estimates for probable incurred losses associated with loan populations excluded from the DRAs are included in FHNs remaining repurchase liability as of June 30, 2016. Those remaining obligations primarily relate to future MI cancellations, loans included in bulk servicing sales effected prior to the DRAs, and other whole loans sold.
In determining the loss content of GSE loans subject to repurchase requests excluded from the DRAs (primarily loans included in bulk sales), FHN applies a vintage level estimate of loss to all loans sold to the GSEs that were not included in the settlements and which have not had a prior repurchase resolution. First, pre-payment, default, and claim rate estimates are applied by vintage to estimate the aggregate claims expected but not yet resolved. Historical loss factors for each sale vintage and repurchase rates are then applied to estimate total loss content. Loss content related to other whole loan sales is estimated by applying the historical average repurchase and loss severity rates to the current UPB in the active pipeline to calculate estimated losses attributable to the current pipeline. FHN then uses an internal model to calculate loss content by applying historical average loss repurchase and severity rates to historical average inflows. For purposes of estimating loss content, FHN also considers MI cancellations. When assessing loss content related to loans where MI has been cancelled, FHN applies historical loss factors (including repurchase rates and loss severity ratios) to the total unresolved MI cancellations in the active pipeline, as well as applying these factors to historical average inflows to estimate loss content. Additionally, FHN identifies estimated losses related to MI curtailment requests. Management also evaluates the nature of claims from purchasers and/or servicers of loans sold to determine if qualitative adjustments are appropriate.
Repurchase and Foreclosure Liability
The repurchase and foreclosure liability is comprised of reserves to cover estimated loss content in the active pipeline, as well as estimated loss content related to certain known claims not currently included in the active pipeline. FHN compares the estimated probable incurred losses determined under the applicable loss estimation approaches described above for the respective periods with current reserve levels. Changes in the estimated required liability levels are recorded as necessary through the repurchase and foreclosure provision.
The following table provides a rollforward of the legacy mortgage repurchase liability during the three and six months ended June 30, 2016 and 2015:
Table 23 Reserves for Repurchase and Foreclosure Losses
Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
(Dollars in thousands) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Legacy Mortgage |
||||||||||||||||
Beginning balance |
$ | 114,320 | $ | 116,374 | $ | 114,947 | $ | 119,404 | ||||||||
Provision for repurchase and foreclosure losses (a) |
(31,400 | ) | | (31,400 | ) | | ||||||||||
Net realized gain/(losses) |
(15,537 | ) | 180 | (16,164 | ) | (2,850 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance on June 30 |
$ | 67,383 | $ | 116,554 | $ | 67,383 | $ | 116,554 | ||||||||
|
|
|
|
|
|
|
|
(a) | In second quarter 2016, FHN settled certain repurchase claims which resulted in the reversal of $31.4 million of mortgage repurchase and foreclosure provision. |
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Government-Backed Mortgage Lending Programs
FHNs FHA and VA program lending was substantial prior to the 2008 platform sale, and has continued at a much lower level since then. As lender, FHN made certain representations and warranties as to the compliance of the loans with program requirements. Over the past several years, most recently in first quarter 2015, FHN occasionally has recognized significant losses associated with settling claims and potential claims by government agencies, and by private parties asserting claims on behalf of agencies, related to these origination activities. At June 30, 2016, FHN had not accrued a liability for any matter related to these government lending programs, and no pending or known threatened matter related to these programs represented a material loss contingency described in Note 10 Contingencies and Other Disclosures.
Other FHN Mortgage Exposures
At June 30, 2016, FHN had not accrued a liability for exposure for repurchase of first-lien loans related to FH proprietary securitizations arising from claims from the trustee that FHN breached its representations and warranties in FH proprietary securitizations at closing. FHNs trustee is a defendant in a lawsuit in which the plaintiffs have asserted that the trustee has duties to review loans and otherwise to act against loan originators and loan servicers, including FHN, outside of the duties specified in the applicable trust documents; FHN is not a defendant in that suit and is not able to assess what, if any, exposure FHN may have as a result of it.
FHN is defending, directly or as indemnitor, certain pending lawsuits brought by purchasers of certificates in FH proprietary securitizations or their assignees. FHN believes a new lawsuit based on federal securities claims that offering disclosures were deficient cannot be brought at this time due to the running of applicable limitation periods, but other investor claims, based on other legal theories, might still be possible. Due to the sales of MSR from 2008 through 2014, FHN has limited visibility into current loan information such as principal payoffs, refinance activity, delinquency trends, and loan modification activity.
Many non-GSE purchasers of whole loans from FHN included those loans in their own securitizations. Regarding such other whole loans sold, FHN made representations and warranties concerning the loans and provided indemnity covenants to the purchaser/securitizer. Typically the purchaser/securitizer assigned key contractual rights against FHN to the securitization trustee. As mentioned above, repurchase and make-whole claims related to specific loans are included in the active pipeline and repurchase reserve. In addition, currently the following categories of actions are pending which involve FHN and other whole loans sold: (i) FHN has received indemnification requests from purchasers of loans or their assignees in cases where FHN is not a defendant; (ii) FHN has received subpoenas seeking loan reviews in cases where FHN is not a defendant; (iii) FHN has received repurchase demands from purchasers or their assignees; and (iv) FHN is a defendant in legal actions involving FHN-originated loans. At June 30, 2016, FHN had not accrued a liability for any litigation matter related to other whole loans sold; however, FHNs repurchase and foreclosure liability included certain known exposures from other whole loans sold.
Certain government entities have subpoenaed information from FHN and others. These entities include the FDIC (on behalf of certain failed banks) and the FHLBs of San Francisco, Atlanta, and Seattle, among others. These entities purport to act on behalf of several purchasers of FH proprietary securitizations, and of non-FH securitizations which included other whole loans sold. Collectively, the subpoenas seek information concerning: a number of FH proprietary securitizations and/or underlying loan originations; and originations of certain other whole loans sold which, in many cases, were included by the purchaser in its own securitizations. Some subpoenas fail to identify the specific investments made or loans at issue. Moreover, FHN has limited information regarding at least some of the loans under review. Unless and until a review (if related to specific loans) becomes an identifiable repurchase claim, the associated loans are not considered part of the active pipeline.
MARKET UNCERTAINTIES AND PROSPECTIVE TRENDS
During 2015 and the first half of 2016 the national economy generally exhibited modest growth. However, certain economic indicators have been mixed and the pace of recovery from the 2008-9 recession has been uneven and could regress. As uncertainties remain surrounding the national economy, the housing market, Fed monetary policy, the competitive landscape (including competition from non-traditional banks), the regulatory and political environment, U.S. government spending generally, and global economic and political situations, FHN may continue to be faced with challenges. Although management considers asset quality at FHN to be strong, external factors may result in increased credit costs and loan loss provisioning and could also suppress loan demand from borrowers and further increase competition among financial institutions resulting in continued pressure on net interest income. Additionally, a downturn in the economic environment or disruptions in the housing market could affect borrower defaults and actions by MI companies which could result in elevated repurchase, make-whole, or other monetary requests from GSEs and third party whole loan purchasers relative to current projections or could impact losses recognized by investors in FH proprietary securitizations which could result in demands or litigation. See the Repurchase Obligations, Off-Balance Sheet Arrangements, and Other Contractual Obligations section within this MD&A, and Note 10 Contingencies and Other Disclosures within this report for additional discussion regarding FHNs repurchase obligations.
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In recent years, the Federal Reserve has implemented significant economic strategies that have impacted interest rates, inflation, asset values, and the shape of the yield curve, and currently may be transitioning from many years of easing to what may be an extended period of gradual tightening. Effects on the yield curve often are most pronounced at the short end of the curve. Among other things, easing strategies are intended to lower interest rates, flatten the yield curve, expand the money supply, and stimulate economic activity, while tightening strategies are intended to increase interest rates, steepen the yield curve, tighten the money supply, and restrain economic activity. Other things being equal, the current transition from easing to tightening (if it continues) should tend to diminish or reverse downward pressure on rates, and to diminish or eventually end the stimulus effect that low interest rates tend to have on the economy. Many external factors may interfere with the effects of these plans or cause them to change unexpectedly. Such factors include significant economic trends, such as another U.S. contraction or recession, or events as well as significant international monetary policies and events.
Although FHN has little direct exposure to non-U.S.-dollar-denominated assets or to foreign sovereign debt, major adverse events outside the U.S. could have a substantial indirect impact on FHN. Because the U.S. economy and the businesses of many of our customers are linked significantly to global economic and market conditions, a major adverse event could negatively impact liquidity in the U.S. causing funding costs to rise, or could potentially limit availability of funding through conventional markets in a worst-case scenario. FHN also could be adversely affected by events outside of the U.S. impacting hedging or other counterparties, customers with non-U.S. businesses and/or assets denominated in foreign currencies, the U.S. economy, interest rates, inflation/deflation rates, and the regulatory environment should there be a political response to major financial disruptions, all of which could have a financial impact on FHN.
Foreclosure Practices
FHN anticipates continued compliance challenges relating to foreclosure, loss mitigation, and servicing practices in connection with its efforts to comply with regulations and standards issued by the OCC and the CFPB including those relating to vendor management and changes in applicable state law relating to foreclosure and loss mitigation.
In addition, FHN retains exposure for potential deficiencies in servicing related to its legacy servicing business and subservicing arrangements. Further details regarding these legacy matters are provided in Obligations from Legacy Mortgage Businesses Overview Servicing Obligations under Repurchase Obligations, Off-Balance Sheet Arrangements, and Other Contractual Obligations.
There have been no significant changes to FHNs critical accounting policies as described in Critical Accounting Policies beginning on page 64 of Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
ACCOUNTING CHANGES ISSUED BUT NOT CURRENTLY EFFECTIVE
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 does not change revenue recognition for financial instruments. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This is accomplished through a five-step recognition framework involving 1) the identification of contracts with customers, 2) identification of performance obligations, 3) determination of the transaction price, 4) allocation of the transaction price to the performance obligations and 5) recognition of revenue as performance obligations are satisfied. Additionally, qualitative and quantitative information is required for disclosure regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In February 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations, which provides additional guidance on whether an entity should recognize revenue on a gross or net basis, based on which party controls the specified good or service before that good or service is transferred to a customer. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing, which clarifies the original guidance included in ASU 2014-09 for identification of the goods or services provided to customers and enhances the implementation guidance for licensing arrangements. ASU 2016-12, Narrow-Scope Improvements and Practical Expedients was issued in May 2016 to provide additional guidance for the implementation and application of ASU 2014-09. The effective date of these ASUs has been deferred to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016, and associated interim periods. Transition to the new requirements may be made by retroactively revising prior financial statements (with certain practical expedients permitted) or by a cumulative effect through retained earnings. If the latter option is selected, additional disclosures are required for comparability. FHN is evaluating the effects of these ASUs on its revenue recognition practices.
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In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern. ASU 2014-15 requires an entitys management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entitys ability to continue as a going concern within one year after the date that the financial statements are issued. If such events or conditions exist, additional disclosures are required and management should evaluate whether its plans sufficiently alleviate the substantial doubt. ASU 2014-15 is effective for the annual period ending after December 15, 2016 and all interim and annual periods thereafter. The provisions of ASU 2014-15 are not anticipated to affect FHN.
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 makes several revisions to the accounting, presentation and disclosure for financial instruments. Equity investments (except those accounted for under the equity method or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net income. An entity may elect to measure equity investments that do not have readily determinable market values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar instruments from the same issuer. ASU 2016-01 also requires a qualitative impairment review for equity investments without readily determinable fair values, with measurement at fair value required if impairment is determined to exist. For liabilities for which fair value has been elected, ASU 2016-01 revises current accounting to record the portion of fair value changes resulting from instrument-specific credit risk within other comprehensive income rather than earnings. Additionally, ASU 2016-01 clarifies that the need for a valuation allowance on a deferred tax asset related to available-for-sale securities should be assessed in combination with all other deferred tax assets rather than being assessed in isolation. ASU 2016-01 also makes several changes to existing fair value presentation and disclosure requirements, including a provision that all disclosures must use an exit price concept in the determination of fair value. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. FHN is evaluating the impact of ASU 2016-01 on its current accounting and disclosure practices.
In February 2016, the FASB issued ASU 2016-02, Leases which requires a lessee to recognize in its statement of condition a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. ASU 2016-02 leaves lessor accounting largely unchanged from prior standards. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. All other leases must be classified as financing or operating leases which depends on the relationship of the lessees rights to the economic value of the leased asset. For finance leases, interest on the lease liability is recognized separately from amortization of the right-of-use asset in earnings, resulting in higher expense in the earlier portion of the lease term. For operating leases, a single lease cost is calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis.
In transition to ASU 2016-02, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply, which would result in continuing to account for leases that commence before the effective date in accordance with previous requirements (unless the lease is modified) except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous requirements. ASU 2016-02 also requires expanded qualitative and quantitative disclosures to assess the amount, timing, and uncertainty of cash flows arising from lease arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. FHN is evaluating the impact of ASU 2016-02 on its current accounting and disclosure practices.
In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage of Certain Prepaid Stored-Value Products which indicates that liabilities related to the sale of prepaid-stored value products are considered financial liabilities and should have a breakage estimate applied for estimated unused funds. ASU 2016-04 does not apply to stored-value products that can only be redeemed for cash, are subject to escheatment or are linked to a segregated bank account. ASU 2016-04 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. FHN is evaluating the impact of ASU 2016-04 on its current accounting and disclosure practices.
In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting which makes several revisions to equity compensation accounting. Under the new guidance all excess tax benefits and deficiencies that occur when an award vests, is exercised, or expires will be recognized in income tax expense as discrete period items. Previously, these transactions were typically recorded directly within equity. Consistent with this change, excess tax benefits and deficiencies will no longer be included within estimated proceeds when performing the treasury stock method for calculation of diluted earnings per share. Excess tax benefits will also be recognized at the time an award is exercised or vests compared to the current requirement to delay recognition until the deduction reduces taxes payable. The presentation of excess tax benefits in the statement of cash flows will shift to an operating activity from the current classification as a financing activity.
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ASU 2016-09 also provides an accounting policy election to recognize forfeitures of awards as they occur rather than the current requirement to estimate forfeitures from inception. Further, ASU 2016-09 permits employers to use a net-settlement feature to withhold taxes on equity compensation awards up to the maximum statutory tax rate without affecting the equity classification of the award. Under current guidance, withholding of equity awards in excess of the minimum statutory requirement results in liability classification for the entire award. The related cash remittance by the employer for employee taxes will be treated as a financing activity in the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. Transition to the new guidance will be accomplished through a combination of retrospective, cumulative-effect adjustment to equity and prospective methodologies. FHN is evaluating the impact of ASU 2016-09 on its current equity compensation accounting and disclosure practices.
In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments which revises the measurement and recognition of credit losses for assets measured at amortized cost (e.g., held-to-maturity (HTM) loans and debt securities) and available-for-sale (AFS) debt securities. Under ASU 2016-13, for assets measured at amortized cost, the current expected credit loss (CECL) is measured as the difference between amortized cost and the net amount expected to be collected. This represents a departure from existing GAAP as the incurred loss methodology for recognizing credit losses delays recognition until it is probable a loss has been incurred. The measurement of current expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Additionally, current disclosures of credit quality indicators in relation to the amortized cost of financing receivables will be further disaggregated by year of origination. ASU 2016-13 leaves the methodology for measuring credit losses on AFS debt securities largely unchanged, with the maximum credit loss representing the difference between amortized cost and fair value. However, such credit losses will be recognized through an allowance for credit losses, which permits recovery of previously recognized credit losses if circumstances change.
ASU 2016-13 also revises the recognition of credit losses for purchased financial assets with a more-than insignificant amount of credit deterioration since origination (PCD assets). For PCD assets the initial allowance for credit losses is added to the purchase price. Only subsequent changes in the allowance for credit losses are recorded as a credit loss expense for PCD assets. Interest income for PCD assets will be recognized based on the effective interest rate, excluding the discount embedded in the purchase price that is attributable to the acquirers assessment of credit losses at acquisition. Currently, credit losses for purchased credit-impaired assets are included in the initial basis of the assets with subsequent declines in credit resulting in expense while subsequent improvements in credit are reflected as an increase in the future yield from the assets.
The provisions of ASU 2016-13 will be generally be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in the year of adoption. Prospective implementation is required for debt securities for which an other-than-temporary-impairment (OTTI) had been previously recognized. Amounts previously recognized in accumulated other comprehensive income (AOCI) as of the date of adoption that relate to improvements in cash flows expected to be collected will continue to be accreted into income over the remaining life of the asset. Recoveries of amounts previously written off relating to improvements in cash flows after the date of adoption will be recorded in earnings when received. A prospective transition approach will be used for existing PCD assets where upon adoption, the amortized cost basis will be adjusted to reflect the addition of the allowance for credit losses. Thus, an entity will not be required to reassess its purchased financial assets that exist as of the date of adoption to determine whether they would have met at acquisition the new criteria of more-than insignificant credit deterioration since origination. An entity will accrete the remaining noncredit discount (based on the revised amortized cost basis) into interest income at the effective interest rate at the adoption date.
ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted in fiscal years beginning after December 15, 2018. FHN is evaluating the impact of ASU 2016-13 on its current accounting and disclosure practices. Since the CECL methodology encompasses a life of loan requirement for the recognition of credit losses, the estimated amount of such losses will be larger than the estimate of probable incurred losses under current standards. The extent of this difference will be dependent upon economic considerations and loan portfolio characteristics at the time of adoption.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
The information called for by this item is contained in
(a) | Managements Discussion and Analysis of Financial Condition and Results of Operations included as Item 2 of Part I of this report, including in particular the section entitled Risk Management beginning on page 101 of this report and the subsections entitled Market Risk Management beginning on page 101 and Interest Rate Risk Management beginning on page 103 of this report, and |
(b) | Note 14 to the Consolidated Condensed Financial Statements appearing on pages 47-52 of this report, |
all of which materials are incorporated herein by reference. For additional information concerning market risk and our management of it, refer to: Managements Discussion and Analysis of Financial Condition and Results of Operations appearing in Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015, including in particular the section entitled Risk Management beginning on page 48 of that Report and the subsections entitled Market Risk Management beginning on page 49 and Interest Rate Risk Management appearing on pages 52-53 of that Report; and Note 22 to the Consolidated Financial Statements appearing on pages 156-161 of Exhibit 13 to FHNs Annual Report on Form 10-K for the year ended December 31, 2015.
Item 4. Controls and Procedures
(a) | Evaluation of Disclosure Controls and Procedures. FHNs management, with the participation of FHNs chief executive officer and chief financial officer, has evaluated the effectiveness of FHNs disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this quarterly report. Based on that evaluation, the chief executive officer and the chief financial officer have concluded that FHNs disclosure controls and procedures were effective as of the end of the period covered by this report. |
(b) | Changes in Internal Control over Financial Reporting. There have not been any changes in FHNs internal control over financial reporting during FHNs last fiscal quarter that have materially affected, or are reasonably likely to materially affect, FHNs internal control over financial reporting. |
115
OTHER INFORMATION
The Contingencies section of Note 10 to the Consolidated Condensed Financial Statements beginning on page 31 of this Report is incorporated into this Item by reference.
Not applicable
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
(a) & (b) | Not Applicable |
(c) | Table 7 captioned Issuer Purchases of Common Stock, including the explanatory notes included in Item 2 of Part I of this report under the heading First Horizon National Corporation Managements Discussion and Analysis of Financial Condition and Results of Operations, beginning on page 87 of this report, is incorporated herein by reference. |
Not applicable
116
(a) | Exhibits |
Exhibits marked * represent management contracts or compensatory plans or arrangements required to be identified as such and filed as exhibits.
Exhibits marked ** are furnished pursuant to 18 U.S.C. Section 1350 and are not filed as part of this Report or as a separate disclosure document.
Exhibits marked *** contain or consist of interactive data file information which is unaudited and unreviewed.
In many agreements filed as exhibits, each party makes representations and warranties to other parties. Those representations and warranties are made only to and for the benefit of those other parties in the context of a business contract. Such representations and warranties may be partially or fully waived by such parties, or not enforced by such parties, in their discretion. No such representation or warranty may be relied upon by any other person for any purpose.
Exhibit No. |
Description | |
3.2 | Bylaws of First Horizon National Corporation, as amended and restated effective July 25, 2016, incorporated herein by reference to Exhibit 3.1 to FHNs Current Report on Form 8-K dated July 25, 2016. | |
4 | FHN agrees to furnish to the Securities and Exchange Commission upon request a copy of each instrument defining the rights of the holders of the senior and subordinated long-term debt of FHN and its consolidated subsidiaries. | |
31(a) | Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) | |
31(b) | Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) | |
32(a)** | 18 USC 1350 Certifications of CEO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) | |
32(b)** | 18 USC 1350 Certifications of CFO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) | |
101*** | The following financial information from First Horizon National Corporations Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL: (i) Consolidated Condensed Statements of Condition at June 30, 2016 and 2015, and December 31, 2015; (ii) Consolidated Condensed Statements of Income for the Three and Six Months Ended June 30, 2016 and 2015; (iii) Consolidated Condensed Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2016 and 2015; (iv) Consolidated Condensed Statements of Equity for the Six Months Ended June 30, 2016 and 2015; (v) Consolidated Condensed Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015; (vi) Notes to Consolidated Condensed Financial Statements. | |
101.INS*** | XBRL Instance Document | |
101.SCH*** | XBRL Taxonomy Extension Schema | |
101.CAL*** | XBRL Taxonomy Extension Calculation Linkbase | |
101.LAB*** | XBRL Taxonomy Extension Label Linkbase | |
101.PRE*** | XBRL Taxonomy Extension Presentation Linkbase | |
101.DEF*** | XBRL Taxonomy Extension Definition Linkbase |
117
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
FIRST HORIZON NATIONAL CORPORATION | ||||||
(Registrant) | ||||||
DATE: August 8, 2016 | By: | /s/ William C. Losch III | ||||
Name: | William C. Losch III | |||||
Title: | Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) |
118
Exhibits marked * represent management contracts or compensatory plans or arrangements required to be identified as such and filed as exhibits.
Exhibits marked ** are furnished pursuant to 18 U.S.C. Section 1350 and are not filed as part of this Report or as a separate disclosure document.
Exhibits marked *** contain or consist of interactive data file information which is unaudited and unreviewed.
In many agreements filed as exhibits, each party makes representations and warranties to other parties. Those representations and warranties are made only to and for the benefit of those other parties in the context of a business contract. Such representations and warranties may be partially or fully waived by such parties, or not enforced by such parties, in their discretion. No such representation or warranty may be relied upon by any other person for any purpose.
Exhibit No. |
Description | |
3.2 | Bylaws of First Horizon National Corporation, as amended and restated effective July 25, 2016, incorporated herein by reference to Exhibit 3.1 to FHNs Current Report on Form 8-K dated July 25, 2016. | |
4 | FHN agrees to furnish to the Securities and Exchange Commission upon request a copy of each instrument defining the rights of the holders of the senior and subordinated long-term debt of FHN and its consolidated subsidiaries. | |
31(a) | Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) | |
31(b) | Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) | |
32(a)** | 18 USC 1350 Certifications of CEO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) | |
32(b)** | 18 USC 1350 Certifications of CFO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) | |
101*** | The following financial information from First Horizon National Corporations Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL: (i) Consolidated Condensed Statements of Condition at June 30, 2016 and 2015, and December 31, 2015; (ii) Consolidated Condensed Statements of Income for the Three and Six Months Ended June 30, 2016 and 2015; (iii) Consolidated Condensed Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2016 and 2015; (iv) Consolidated Condensed Statements of Equity for the Six Months Ended June 30, 2016 and 2015; (v) Consolidated Condensed Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015; (vi) Notes to Consolidated Condensed Financial Statements. | |
101.INS*** | XBRL Instance Document | |
101.SCH*** | XBRL Taxonomy Extension Schema | |
101.CAL*** | XBRL Taxonomy Extension Calculation Linkbase | |
101.LAB*** | XBRL Taxonomy Extension Label Linkbase | |
101.PRE*** | XBRL Taxonomy Extension Presentation Linkbase | |
101.DEF*** | XBRL Taxonomy Extension Definition Linkbase |
119
Exhibit 31(a)
FIRST HORIZON NATIONAL CORPORATION
RULE 13a 14(a) CERTIFICATIONS OF CEO
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(QUARTERLY REPORT)
CERTIFICATIONS
I, D. Bryan Jordan, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of First Horizon National Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 8, 2016
/s/ D. Bryan Jordan
D. Bryan Jordan
Chairman of the Board, President and Chief Executive Officer
Exhibit 31(b)
FIRST HORIZON NATIONAL CORPORATION
RULE 13a 14(a) CERTIFICATIONS OF CFO
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(QUARTERLY REPORT)
CERTIFICATIONS
I, William C. Losch III, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of First Horizon National Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 8, 2016
/s/ William C. Losch III
William C. Losch III
Executive Vice President and Chief Financial Officer
Exhibit 32(a)
CERTIFICATION OF PERIODIC REPORT
18 USC 1350 CERTIFICATIONS OF CEO
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
As Codified at 18 U.S.C. Section 1350
I, the undersigned D. Bryan Jordan, Chairman of the Board, President and Chief Executive Officer of First Horizon National Corporation (Corporation), hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, as follows:
1. | The Corporations Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. |
Dated: August 8, 2016
/s/ D. Bryan Jordan
D. Bryan Jordan
Chairman of the Board, President and Chief Executive Officer
Exhibit 32(b)
CERTIFICATION OF PERIODIC REPORT
18 USC 1350 CERTIFICATIONS OF CFO
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
As Codified at 18 U.S.C. Section 1350
I, the undersigned William C. Losch III, Executive Vice President and Chief Financial Officer of First Horizon National Corporation (Corporation), hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, as follows:
1. | The Corporations Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. |
Dated: August 8, 2016
/s/ William C. Losch III
William C. Losch III
Executive Vice President and Chief Financial Officer
Includes $ 3.2 billion of securities pledged to secure public deposits, securities sold under agreements to repu rchase, and for other purposes .
Due to the nature of the preferred stock issued by FHN and its subsidiaries, all components of Other comprehensive income/(loss) have been attributed solely to FHN as the controlling interest holder.
Includes restricted investments in FHLB-Cincinnati stock of $ 87.9 million and FRB stock of $ 68 .6 million. The remainder is money market and cost method investments.
Includes restricted investments in FHLB-Cincinnati stock of $ 87.9 million and FRB stock of $ 65 .8 million. The remainder is money market and cost method investments.
Balances as of June 3 0 , 2016 and 2015, and December 31, 2015, include $ 43.5 million, $ 66 . 4 million, and $ 52.8 million of restricted real estate loans, respectively. See Note 13 - Variable Interest Entities for additional information.
Includes changes in the accretable yield due to both transfers from the nonaccretable difference and the impact of changes in the expected timing of the cash flows.
All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance.
Balances as of June 30 , 2016 and 2015 , presented net of $ 25.5 million and $ 26.2 million, respectively, in lower of cost or market (“LOCOM”) valuation adjustment . Based on the underlying structure of the notes , the highest possible internal grade is " 13 ".
Total TRUPS i nclude s LOCOM valuation adjustment of $25.5 million .
Total TRUPS i nclu des LOCOM valuation adjustment of $26.2 million.
Maximum loss exposure represents $ 53 . 5 million of current investments and $ 11 . 3 million of accrued contractual funding commitments. Accrued funding commitments represent unconditional contractual obligations for future funding events, and are also recognized in Other liabilities. FHN currently expects to be required to fund these accrued commitments by the end of 2016 .
Maximum loss exposure represents the value of current investments. A liability is not recognized as FHN is solely a ho lder of the trusts’ securities.
Includes $ 112 . 5 million classified as Loans, net of unearned income, and $ 1 . 7 million classified as Trading securities which are offset by $ 64.6 million classified as Term borrowings.
Includes $ . 3 million classified as MSR , $ 2 . 8 million classified as Trading securities , and $ 16 . 4 million of aggregate servicing advances .
Includes $ .6 b illion classified as Trading securities and $ 3 . 8 billion cla ssified as Securities available-for- sale.
Ma ximum loss exposure represents the value of current investments. A liability is not recognized as FHN is solely a holder of the trusts’ securities.
Includes $ 112.5 million classified as Loans, net of unearned income, and $ 1.7 million classified as Trading securities which are offset by $ 63 . 7 million classified as Term borrowings.
Includes $ .6 million classified as MSR related to proprietary and agency residential mortgage securitizations and $ 4 . 9 m illion classified as Trading securities related to proprietary and agency residential mortga ge securitizations . Aggregate servicing advances of $ 19 . 1 million are classified as Other assets.
Gains/losses included in the All o ther expense section of the Consolidated Condensed Statements of Income.
Gains/losses included in the All other income and commissions section of the Consolidated Condensed Statements of Income.
Represents gains and losses attributable to changes in fair value due to interest rate risk as designated in ASC 815-20 hedging relationships.
Represents par value of term borrowings being hedged.
In cluded in Derivative a ssets on the Consolidated Condensed Statements of Condition. As of June 30 , 2016 and 2015 , $ 21 . 6 million and $ 5.4 million, respectively, of derivative assets (primarily fixed income forward contracts) have been excluded from these tables because they are generally not subject to master netting or similar agreements.
201 6 and 2015 are comprised entirely of interest rate derivative contracts.
2016 and 2015 are comprised entirely of interest rate derivative contracts.
Represents the fair value and related losses of foreclosed properties that were measured subsequent to their initial classification as foreclosed assets. Balance excludes foreclosed real estate related to government insured mortgages.
Represents tax credit investments account ed for under the equity method .
In cluded in Derivative l iabilities on the Consolidated Condensed Statements of Condition. As of June 30 , 2016 and 2015 , $ 26 . 5 million and $ 9.6 million, respectively, of derivative liabilities (primarily fixed income forward contracts) have been excluded from these tables because they are generally not subject to master netting or similar agreements.
Represents gains and losses attributable to changes in fair value due to interest rate risk as designated in ASC 815-20 hedging relationships.
Represents principal balance being hedged.
Assets included in the Loans, net of unearned income section of the Consolidated Condensed Statements of Condition.
Includes $ 3 . 4 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.
Maximum loss exposure represents $ 56.4 million of current investments and $ 12.0 million of accrued contractual funding commitments. Accrued funding commitments represent unconditional contractual obligations for future funding events, and are also recognized in Other liabilities. FHN currently expects to be required to fund these accrued commitments by the end of 2016 .
2016 and 2015 include $86.4 million and $15.8 million, respectively, repurchased under share repurchase program
Maximum loss exposure represents $ 30 . 9 million of current receivables and $ 5 . 1 million of contractual funding commitments on loans related to commercial borrowers involved in a troubled debt restructurin g.
A liability is not recognized as the loans are the only variable interests held in the troubled commercial borrowers’ operations.
Includes $ 473 . 8 million classified as Trading securities and $ 3 . 5 billion cla ssified as Securities available-for- sale.
Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for loan losses.
Represents customer lists, acquired contracts, core deposit intangibles, and covenants not to compete.
2016 and 2015 include $ 86 .3 million and $ 15.8 million, respectively, repurchased under share repurchase programs.
A lia bility is not recognized as investments are written down over the life of the related tax credit
Maximum loss exposure represe nts current investment balance. Of the initial investment, $ 18 . 0 million was funded through loans from community development enterprises
A liability is n ot recognized as investments are written down over the life of the related tax credit
Maximum loss exposure represents current investment balance. Of the initial investment, $ 18.0 million was funded through loans from community development enterprises
No exposure of loss due to the nature of FHN’s involveme nt
Maximum loss exposure represents the current loan balance plus additional funding commitments less amounts received from the buyer- lessor .
Classes are detailed in the recurring and nonrecurring measurement tables.
Level 3 includes restricted investments in FHLB-Cincinnati stock of $ 87.9 million and FRB stock of $ 68.6 million .
Level 3 includes restricted investments in FHLB-Cincinnati stock of $ 87.9 million and FRB stock of $ 65.8 million.
June 30 , 2016 and 2015 an d December 31, 2015 include $21.2 million , $ 20.2 million and $22.4 million, respectively, of held-for-sale consumer mortgage loans secured by residential rea l estate in process of foreclosure.
June 30 , 2016 and 2015 and December 31, 2015 include $31.1 million, $28.3 million and $29.7 million, respectively, of held-to-maturity consumer mortgage loans secured by residential real estate properties in process of f oreclosure.
June 30 , 2016 and 2015 an d December 31, 2015 include $9.6 million , $ 18.7 million and $14.6 million, respectively, of foreclosed residential real estate.
Ma ximum loss exposure represents $ 39.7 million of current receivables and $ .1 million of contractual funding commitments on loans related to commercial borrowers involved in a troubled debt restructuring
Cash proceeds for the three months ended June 30, 2016 were $ .6 million; cash proceeds for the three months ended June 30, 2015 were not material. Proceeds for the six months ended June 30, 2016 and 2015, respectively, were $ 1.5 million and $ .3 million. Six months ended June 30, 2016 includes a $ 1.7 million gain from an exchange of approximately $ 294 million of AFS debt securities.
The increase in goodwill was related to the TAF acquisition in fourth quarter 2015.
(a) Includes approximately $ 1.7 million expected to be reclassified into earnings in the next twelve months.
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.
Primarily included in mortgage banking income on the Consolidated Condensed Statements of Income.
Included in Other expense.
Transfers out of recurring loans held-for-sale level 3 balances reflect movements out of recurring loans held-for-sale and into real estate acquired by foreclosure (level 3 nonrecurring).
For the six months ended June 30, 2015 all potential common shares were antidilutive due to the net loss available to common shareholders.
For this group, a majority of the FICO scores at the time of the origination exceeded 620 but have since deteriorated as the loans have seasoned .
Document And Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2016
shares
| |
Document And Entity Information [Abstract] | |
Entity Registrant Name | FIRST HORIZON NATIONAL CORP |
Entity Central Index Key | 0000036966 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2016 |
Amendment Flag | false |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q2 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 232,019,031 |
trading symbol | FHN |
Consolidated Condensed Statements Of Condition - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Assets: | |||||||||||||||||||||
Cash and due from banks | $ 283,648 | $ 300,811 | $ 274,256 | ||||||||||||||||||
Federal funds sold | 40,570 | 114,479 | 77,039 | ||||||||||||||||||
Securities purchased under agreements to resell (Note 15) | 881,732 | 615,773 | 816,991 | ||||||||||||||||||
Total cash and cash equivalents | 1,205,950 | 1,031,063 | 1,168,286 | ||||||||||||||||||
Interest-bearing cash | 321,743 | 602,836 | 344,944 | ||||||||||||||||||
Trading securities | 1,162,959 | 881,450 | 1,133,490 | ||||||||||||||||||
Loans held-for-sale | [1] | 117,976 | 126,342 | 127,196 | |||||||||||||||||
Securities available-for-sale (Note 3) | 4,009,243 | [2] | 3,929,846 | 3,648,860 | [3] | ||||||||||||||||
Securities held-to-maturity (Note 3) | 14,333 | 14,320 | 4,306 | ||||||||||||||||||
Loans, net of unearned income (Note 4) | [4] | 18,589,337 | 17,686,502 | 16,936,772 | |||||||||||||||||
Less: Allowance for loan losses (Note 5) | 199,807 | 210,242 | 221,351 | ||||||||||||||||||
Total net loans | 18,389,530 | 17,476,260 | 16,715,421 | ||||||||||||||||||
Goodwill (Note 6) | 191,307 | 191,307 | [5] | 145,932 | |||||||||||||||||
Other intangible assets, net (Note 6) | [6] | 23,616 | 26,215 | [5] | 26,922 | ||||||||||||||||
Fixed income receivables | 219,939 | 63,660 | 91,069 | ||||||||||||||||||
Premises and equipment, net (June 30, 2016 includes $10.0 million classified as held-for-sale) | 279,676 | 275,619 | 269,507 | ||||||||||||||||||
Real estate acquired by foreclosure | [7] | 20,053 | 33,063 | 40,268 | |||||||||||||||||
Derivative assets (Note 14) | 196,989 | 104,365 | 115,230 | ||||||||||||||||||
Other assets | 1,387,756 | 1,436,291 | 1,405,961 | ||||||||||||||||||
Total assets | 27,541,070 | 26,192,637 | 25,237,392 | ||||||||||||||||||
Deposits: | |||||||||||||||||||||
Savings | 7,960,182 | 7,811,191 | 7,462,642 | ||||||||||||||||||
Time deposits | 741,992 | 788,487 | 769,132 | ||||||||||||||||||
Other interest-bearing deposits | 5,720,628 | 5,388,526 | 4,675,742 | ||||||||||||||||||
Certificates of deposit $100,000 and more | 522,643 | 443,389 | 400,021 | ||||||||||||||||||
Interest-bearing | 14,945,445 | 14,431,593 | 13,307,537 | ||||||||||||||||||
Noninterest-bearing | 5,684,732 | 5,535,885 | 5,366,936 | ||||||||||||||||||
Total deposits | 20,630,177 | 19,967,478 | 18,674,473 | ||||||||||||||||||
Federal funds purchased | 508,669 | 464,166 | 556,862 | ||||||||||||||||||
Securities sold under agreements to repurchase (Note 15) | 451,129 | 338,133 | 311,760 | ||||||||||||||||||
Trading liabilities | 789,540 | 566,019 | 732,564 | ||||||||||||||||||
Other short-term borrowings | 543,033 | 137,861 | 150,350 | ||||||||||||||||||
Term borrowings | 1,076,943 | 1,312,677 | 1,555,272 | ||||||||||||||||||
Fixed income payables | 90,400 | 23,072 | 54,301 | ||||||||||||||||||
Derivative liabilities (Note 14) | 170,619 | 108,339 | 109,815 | ||||||||||||||||||
Other liabilities | 588,636 | 635,306 | 574,090 | ||||||||||||||||||
Total liabilities | 24,849,146 | 23,553,051 | 22,719,487 | ||||||||||||||||||
First Horizon National Corporation Shareholders' Equity: | |||||||||||||||||||||
Preferred stock - Series A, non-cumulative perpetual, no par value, liquidation preference of $100,000 per share - (shares authorized - 1,000; shares issued - 1,000 on June 30, 2016, June 30, 2015 and December 31, 2015) | 95,624 | 95,624 | 95,624 | ||||||||||||||||||
Common stock - $.625 par value (shares authorized - 400,000,000; shares issued - 232,019,031 on June 30, 2016; 234,020,798 on June 30, 2015 and 238,586,637 on December 31, 2015) | 145,012 | 149,117 | 146,263 | ||||||||||||||||||
Capital surplus | 1,362,528 | 1,439,303 | 1,371,712 | ||||||||||||||||||
Undivided profits | 945,663 | 874,303 | 797,123 | ||||||||||||||||||
Accumulated other comprehensive loss, net (Note 8) | (152,334) | (214,192) | (188,248) | ||||||||||||||||||
Total First Horizon National Corporation Shareholders' Equity | 2,396,493 | 2,344,155 | 2,222,474 | ||||||||||||||||||
Noncontrolling interest | 295,431 | 295,431 | 295,431 | ||||||||||||||||||
Total equity | 2,691,924 | 2,639,586 | 2,517,905 | ||||||||||||||||||
Total liabilities and equity | $ 27,541,070 | $ 26,192,637 | $ 25,237,392 | ||||||||||||||||||
|
Consolidated Condensed Statements of Condition (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
||
---|---|---|---|---|---|
Real Estate Acquired Through Foreclosure | [1] | $ 20,053 | $ 33,063 | $ 40,268 | |
Common stock, par value | $ 0.625 | $ 0.625 | $ 0.625 | ||
Common stock, shares authorized | 400,000,000 | 400,000,000 | 400,000,000 | ||
Common stock, shares issued | 232,019,031 | 238,586,637 | 234,020,798 | ||
Preferred stock, no par value | $ 0 | $ 0 | $ 0 | ||
Preferred Stock Liquidation Preference Value | $ 100,000 | $ 100,000 | $ 100,000 | ||
Preferred stock, shares authorized | 1,000 | 1,000 | 1,000 | ||
Preferred stock, shares issued | 1,000 | 1,000 | 1,000 | ||
Premises and Equipment classified as held-for-sale | $ 10,000 | ||||
Residential Real Estate [Member] | |||||
Mortgage Loans In Process Of Foreclosure Amount | 31,100 | $ 29,700 | $ 28,300 | ||
Real Estate Acquired Through Foreclosure | 9,600 | 14,600 | 18,700 | ||
Residential Real Estate [Member] | Loans Held For Sale [Member] | |||||
Mortgage Loans In Process Of Foreclosure Amount | $ 21,200 | $ 22,400 | $ 20,200 | ||
|
Consolidated Condensed Statements Of Income - USD ($) shares in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|||||
Interest income: | ||||||||
Interest and fees on loans | $ 163,054,000 | $ 153,283,000 | $ 321,477,000 | $ 297,180,000 | ||||
Interest on investment securities available-for-sale | 23,953,000 | 23,288,000 | 48,427,000 | 46,122,000 | ||||
Interest on investment securities held-to-maturity | 198,000 | 66,000 | 395,000 | 132,000 | ||||
Interest on loans held-for-sale | 1,198,000 | 1,350,000 | 2,459,000 | 2,841,000 | ||||
Interest on trading securities | 8,020,000 | 8,951,000 | 15,771,000 | 18,052,000 | ||||
Interest on other earning assets | 953,000 | 92,000 | 2,511,000 | 771,000 | ||||
Total interest income | 197,376,000 | 187,030,000 | 391,040,000 | 365,098,000 | ||||
Interest on deposits: | ||||||||
Savings | 4,146,000 | 2,970,000 | 8,336,000 | 6,277,000 | ||||
Time deposits | 1,148,000 | 1,324,000 | 2,260,000 | 2,756,000 | ||||
Other interest-bearing deposits | 2,526,000 | 1,104,000 | 4,830,000 | 2,061,000 | ||||
Certificates of deposit $100,000 and more | 1,326,000 | 830,000 | 2,537,000 | 1,712,000 | ||||
Interest on trading liabilities | 3,782,000 | 3,770,000 | 7,821,000 | 7,684,000 | ||||
Interest on short-term borrowings | 1,203,000 | 726,000 | 2,331,000 | 1,772,000 | ||||
Interest on term borrowings | 6,981,000 | 9,666,000 | 14,587,000 | 19,330,000 | ||||
Total interest expense | 21,112,000 | 20,390,000 | 42,702,000 | 41,592,000 | ||||
Net interest income | 176,264,000 | 166,640,000 | 348,338,000 | 323,506,000 | ||||
Provision for loan losses | 4,000,000 | 2,000,000 | 7,000,000 | 7,000,000 | ||||
Net interest income after provision for loan losses | 172,264,000 | 164,640,000 | 341,338,000 | 316,506,000 | ||||
Noninterest income: | ||||||||
Fixed income | 77,913,000 | 56,241,000 | 144,890,000 | 117,860,000 | ||||
Deposit transactions and cash management | 26,991,000 | 28,430,000 | 53,828,000 | 54,981,000 | ||||
Brokerage, management fees and commissions | 10,665,000 | 12,456,000 | 21,080,000 | 23,855,000 | ||||
Trust services and investment management | 7,224,000 | 7,416,000 | 13,789,000 | 14,114,000 | ||||
Bankcard income | 6,558,000 | 5,884,000 | 11,817,000 | 11,070,000 | ||||
Bank-owned life insurance | 3,743,000 | 3,391,000 | 7,132,000 | 6,853,000 | ||||
Other service charges | 2,996,000 | 3,043,000 | 5,709,000 | 5,891,000 | ||||
Insurance commissions | 552,000 | 654,000 | 1,039,000 | 1,250,000 | ||||
Equity securities gains/(losses), net (Note 3) | 99,000 | 8,000 | 19,000 | 284,000 | ||||
Debt secutities gains/(losses), net (Note 3) | 0 | 0 | 1,654,000 | 0 | ||||
All other income and commissions (Note 7) | 8,773,000 | 12,778,000 | 18,862,000 | 23,832,000 | ||||
Total noninterest income | 145,514,000 | 130,301,000 | 279,819,000 | 259,990,000 | ||||
Adjusted gross income after provision for loan losses | 317,778,000 | 294,941,000 | 621,157,000 | 576,496,000 | ||||
Noninterest expense: | ||||||||
Employee compensation, incentives, and benefits | 143,370,000 | 127,970,000 | 280,521,000 | 259,414,000 | ||||
Occupancy | 12,736,000 | 11,764,000 | 25,340,000 | 23,982,000 | ||||
Computer software | 11,226,000 | 11,340,000 | 22,813,000 | 22,282,000 | ||||
Operations services | 10,521,000 | 10,033,000 | 20,421,000 | 19,370,000 | ||||
Equipment rentals, depreciation, and maintenance | 7,182,000 | 7,983,000 | 13,341,000 | 15,203,000 | ||||
Legal fees | 5,891,000 | 4,509,000 | 10,770,000 | 8,060,000 | ||||
FDIC premium expense | 4,848,000 | 4,952,000 | 9,769,000 | 8,400,000 | ||||
Advertising and public relations | 4,481,000 | 4,349,000 | 9,454,000 | 9,082,000 | ||||
Professional fees | 4,284,000 | 5,218,000 | 9,483,000 | 8,924,000 | ||||
Communications and courier | 3,039,000 | 3,801,000 | 6,789,000 | 7,677,000 | ||||
Other insurance and taxes | 3,014,000 | 3,455,000 | 6,327,000 | 6,784,000 | ||||
Contract employment and outsourcing | 2,497,000 | 3,337,000 | 4,922,000 | 7,921,000 | ||||
Amortization of intangible assets | 1,299,000 | 1,298,000 | 2,599,000 | [1] | 2,596,000 | [1] | ||
Foreclosed real estate | (432,000) | 1,329,000 | (690,000) | 1,198,000 | ||||
Repurchase and foreclosure provision | (31,400,000) | 0 | (31,400,000) | 0 | ||||
All other expense (Note 7) | 44,266,000 | 17,056,000 | 63,290,000 | 193,722,000 | ||||
Total noninterest expense | 226,822,000 | 218,394,000 | 453,749,000 | 594,615,000 | ||||
Income/(loss) before income taxes | 90,956,000 | 76,547,000 | 167,408,000 | (18,119,000) | ||||
Provision/(benefit) for income taxes | 30,016,000 | 21,590,000 | 54,255,000 | (671,000) | ||||
Net income/(loss) | 60,940,000 | 54,957,000 | 113,153,000 | (17,448,000) | ||||
Net income attributable to noncontrolling interest | 2,852,000 | 2,851,000 | 5,703,000 | 5,609,000 | ||||
Net income/(loss) attributable to controlling interest | 58,088,000 | 52,106,000 | 107,450,000 | (23,057,000) | ||||
Preferred stock dividends | 1,550,000 | 1,550,000 | 3,100,000 | 3,100,000 | ||||
Net income/(loss) available to common shareholders | $ 56,538,000 | $ 50,556,000 | $ 104,350,000 | $ (26,157,000) | ||||
Basic earnings/(loss) per share (Note 9) | $ 0.24 | $ 0.22 | $ 0.45 | $ (0.11) | ||||
Diluted earnings/(loss) per share (Note 9) | $ 0.24 | $ 0.22 | $ 0.44 | $ (0.11) | ||||
Weighted average common shares (Note 9) | 231,573 | 232,800 | 233,112 | 232,808 | ||||
Diluted average common shares (Note 9) | 233,576 | 234,669 | 235,121 | 232,808 | ||||
Cash dividends declared per common share | $ 0.07 | $ 0.06 | $ 0.14 | $ 0.12 | ||||
|
Consolidated Condensed Statements of Equity-Q - USD ($) $ in Thousands |
Total |
Noncontrolling Interest |
Controlling Interest |
|||||
---|---|---|---|---|---|---|---|---|
Balance, at Dec. 31, 2014 | $ 2,581,590 | $ 295,431 | $ 2,286,159 | |||||
Net income/(loss) | (17,448) | 5,609 | (23,057) | |||||
Other comprehensive income/(loss) | [1] | (2) | 0 | (2) | ||||
Comprehensive income/(loss) | (17,450) | 5,609 | (23,059) | |||||
Cash dividends declared: | ||||||||
Preferred stock ($3,100 per share for the six months ended June 30, 2016 and 2015) | (3,100) | 0 | (3,100) | |||||
Common stock ($.14 and $.12 per share for the six months ended June 30, 2016 and 2015, respectively) | (28,305) | 0 | (28,305) | |||||
Common stock repurchased | [2] | (20,031) | 0 | (20,031) | ||||
Common stock issued for: | ||||||||
Stock options and restricted stock-equity awards | 4,427 | 0 | 4,427 | |||||
Stock-based compensation expense | 6,474 | 0 | 6,474 | |||||
Dividends declared-noncontrolling interest of subsidiary preferred stock | (5,609) | (5,609) | 0 | |||||
Tax benefit/(benefit reversal)-stock based compensation expense | (91) | 0 | (91) | |||||
Balance, at Jun. 30, 2015 | 2,517,905 | 295,431 | 2,222,474 | |||||
Balance, at Dec. 31, 2015 | 2,639,586 | 295,431 | 2,344,155 | |||||
Net income/(loss) | 113,153 | 5,703 | 107,450 | |||||
Other comprehensive income/(loss) | [1] | 61,858 | 0 | 61,858 | ||||
Comprehensive income/(loss) | 175,011 | 5,703 | 169,308 | |||||
Cash dividends declared: | ||||||||
Preferred stock ($3,100 per share for the six months ended June 30, 2016 and 2015) | (3,100) | 0 | (3,100) | |||||
Common stock ($.14 and $.12 per share for the six months ended June 30, 2016 and 2015, respectively) | (32,991) | 0 | (32,991) | |||||
Common stock repurchased | [2] | (89,698) | 0 | (89,698) | ||||
Common stock issued for: | ||||||||
Stock options and restricted stock-equity awards | 1,509 | 0 | 1,509 | |||||
Stock-based compensation expense | 7,796 | 0 | 7,796 | |||||
Dividends declared-noncontrolling interest of subsidiary preferred stock | (5,703) | (5,703) | 0 | |||||
Tax benefit/(benefit reversal)-stock based compensation expense | (486) | 0 | (486) | |||||
Balance, at Jun. 30, 2016 | $ 2,691,924 | $ 295,431 | $ 2,396,493 | |||||
|
Consolidated Condensed Statements Of Equity (Parenthetical)-Q - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|||
Common stock - cash dividends declared per share | $ 0.14 | $ 0.12 | ||
Common stock repurchased | [1] | $ 89,698 | $ 20,031 | |
Preferred Stock Dividends Per Share Declared | $ 3,100 | $ 3,100 | ||
Stock Repurchase Authorization [Member] | ||||
Common stock repurchased | $ 86,400 | $ 15,800 | ||
|
Consolidated Condensed Statements Of Cash Flow - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|||
Operating Activities | ||||
Net income/(loss) | $ 113,153 | $ (17,448) | ||
Adjustments to reconcile net income/(loss) to net cash provided/(used) by operating activities: | ||||
Provision for loan losses | 7,000 | 7,000 | ||
Provision/(benefit) for deferred income taxes | 34,366 | (1,592) | ||
Depreciation and amortization of premises and equipment | 16,036 | 18,229 | ||
Amortization of intangible assets | 2,599 | 2,596 | ||
Net other amortization and accretion | 10,722 | 11,731 | ||
Net (increase)/decrease in derivatives | 564 | (615) | ||
Repurchase and foreclosure provision | (31,400) | 0 | ||
Fair value adjustment to foreclosed real estate | 850 | 1,660 | ||
Litigation and regulatory matters | 25,652 | 120 | ||
Stock-based compensation expense | 7,796 | 6,474 | ||
(Tax benefit)/benefit reversal stock-based compensation expense | 486 | 91 | ||
Equity securities (gains)/losses, net | (19) | (284) | ||
Debt securities (gains)/losses, net | (1,654) | 0 | ||
Net (gains)/losses on sale/disposal of fixed assets | 4,155 | (2,872) | ||
Loans held-for-sale: | ||||
Purchases | (5,953) | (1,178) | ||
Gross proceeds from settlements and sales | 14,668 | 15,561 | ||
(Gain)/loss due to fair value adjustments and other | (349) | (294) | ||
Net (increase)/decrease in: | ||||
Trading securities | (283,283) | 59,890 | ||
Fixed income receivables | (156,279) | (48,581) | ||
Interest receivable | 6,751 | 9,955 | ||
Other assets | (36,559) | (48,727) | ||
Net increase/(decrease) in: | ||||
Trading liabilities | 223,521 | 138,250 | ||
Fixed income payables | 67,328 | 36,144 | ||
Interest payable | (5,025) | (7,613) | ||
Other liabilities | (36,422) | (67,405) | ||
Total adjustments | (134,449) | 128,540 | ||
Net cash provided/(used) by operating activities | (21,296) | 111,092 | ||
Available-for-sale securities: | ||||
Sales | 1,543 | 284 | ||
Maturities | 315,301 | 327,315 | ||
Purchases | (311,592) | (427,717) | ||
Premises and equipment: | ||||
Sales | 2,786 | 40,369 | ||
Purchases | (27,034) | (15,751) | ||
Net (increase)/decrease in: | ||||
Loans | (904,558) | (722,062) | ||
Interests retained from securitizations classified as trading securities | 1,774 | 1,011 | ||
Interest-bearing cash | 281,093 | 1,277,023 | ||
Net cash provided/(used) by investing activities | (640,687) | 480,472 | ||
Common stock: | ||||
Stock options exercised | 807 | 4,715 | ||
Cash dividends paid | (30,960) | (26,020) | ||
Repurchase of shares | [1] | (89,698) | (20,031) | |
Tax benefit/(benefit reversal) stock-based compensation expense | (486) | (91) | ||
Cash dividends paid - preferred stock - noncontrolling interest | (5,672) | (5,703) | ||
Cash dividends paid - Series A preferred stock | (3,100) | (3,100) | ||
Term borrowings: | ||||
Payments/maturities | (259,938) | (312,808) | ||
Net increase/(decrease) in: | ||||
Deposits | 663,246 | 605,867 | ||
Short-term borrowings | 562,671 | (737,512) | ||
Net cash provided/(used) by financing activities | 836,870 | (494,683) | ||
Net increase/(decrease) in cash and cash equivalents | 174,887 | 96,881 | ||
Cash and cash equivalents at beginning of period | 1,031,063 | 1,071,405 | ||
Cash and cash equivalents at end of period | 1,205,950 | 1,168,286 | ||
Supplemental Disclosures | ||||
Total interest paid | 47,355 | 48,734 | ||
Total taxes paid | 11,334 | 14,859 | ||
Total taxes refunded | 2,425 | 215 | ||
Transfer from loans to other real estate owned | $ 3,546 | $ 8,293 | ||
|
Consolidated Condensed Statements Of Cash Flow (Parenthetical) - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|||
Shares repurchased under the share repurchase program, value | [1] | $ 89,698 | $ 20,031 | |
Stock Repurchase Authorization | ||||
Shares repurchased under the share repurchase program, value | $ 86,300 | $ 15,800 | ||
|
Financial Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information | Notes to the Consolidated Condensed Financial Statements (Unaudited) Note 1 – Financial Information Basis of Accounting. The unaudited interim consolidated condensed financial statements of First Horizon National Corporation (“FHN”), including its subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America and follow general practices within the industries in which it operates. This preparation requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions are based on information available as of the date of the financial statements and could differ from actual results. In the opinion of management, all necessary adjustments have been made for a fair presentation of financial position and results of operations for the periods presented. These adjustments are of a normal recurring nature unless otherwise disclosed in this Quarterly Report on Form 10-Q. The operating results for the interim 2016 periods are not necessarily indicative of the results that may be expected going forward. For further information, refer to the audited consolidated financial statements in Exhibit 13 to FHN’s Annual Report on Form 10-K for the year ended December 31, 2015. Summary of Accounting Changes. Effective January 1, 2016, FHN early adopted the provisions of ASU 2016-05, “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships”, on a prospective basis. ASU 2016-05 clarifies that a change in the counterparty of a derivative instrument that has been designated as the hedging instrument in an accounting hedge relationship does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. FHN considers the revised guidance to better reflect the nature of hedge accounting relationships by clarifying that, when considered solely, the counterparty is not a critical term in a hedge relationship. Because FHN has applied specific SEC staff guidance for novation (to facilitate central clearing requirements) of derivatives to prior and existing accounting hedge relationships, adoption of ASU 2016-05 had no effect on FHN. Effective January 1, 2016, FHN early adopted the provisions of ASU 2016-06, “Contingent Put and Call Options in Debt Instruments”, which resolves diversity in practice for the bifurcation assessment when a contingent put or call option is embedded within a hybrid debt instrument. ASU 2016-06 clarifies that an entity is not required to assess whether the triggering event is related to interest rate or credit risks when performing the bifurcation analysis. FHN’s existing bifurcation assessment process conforms to the methodology outlined in ASU 2016-06. Effective January 1, 2016, FHN adopted the provisions of ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition in determining expense recognition for the award. Thus, compensation cost is recognized over the requisite service period based on the probability of achievement of the performance condition. Expense is adjusted after the requisite service period for changes in the probability of achievement. The adoption of ASU 2014-12 had no effect on FHN. Effective January 1, 2016, FHN adopted the provisions of ASU 2015-02, “Amendments to the Consolidation Analysis.” ASU 2015-02 revises current consolidation guidance to modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities. ASU 2015-02 also eliminates the presumption that a general partner should consolidate a limited partnership, revises the consolidation analysis for reporting entities that have fee arrangements and related party relationships with variable interest entities, and provides a scope exception for entities with interests in registered money market funds. FHN has evaluated the provisions of ASU 2015-02 on its consolidation assessments and there was not a significant effect upon adoption. Effective January 1, 2016, FHN adopted the provisions of ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented as a direct reduction from the carrying value of that debt liability, consistent with debt discounts. ASU 2015-03 requires application on a retrospective basis, with prior periods revised to reflect the effects of adoption. Consistent with prior requirements, FHN previously classified debt issuance costs within Other assets in the Consolidated Condensed Statements of Condition. The adoption of ASU 2015-03 had no effect on FHN’s recognition of interest expense. The effects of the retrospective application of the change in presentation of debt issuance costs are summarized in the table below.
Accounting Changes Issued but Not Currently Effective In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 does not change revenue recognition for financial instruments. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This is accomplished through a five-step recognition framework involving 1) the identification of contracts with customers, 2) identification of performance obligations, 3) determination of the transaction price, 4) allocation of the transaction price to the performance obligations and 5) recognition of revenue as performance obligations are satisfied. Additionally, qualitative and quantitative information is required for disclosure regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In February 2016, the FASB issued ASU 2016-08, “Principal versus Agent Considerations”, which provides additional guidance on whether an entity should recognize revenue on a gross or net basis, based on which party controls the specified good or service before that good or service is transferred to a customer. In April 2016, the FASB issued ASU 2016-10, “Identifying Performance Obligations and Licensing”, which clarifies the original guidance included in ASU 2014-09 for identification of the goods or services provided to customers and enhances the implementation guidance for licensing arrangements. ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients” was issued in May 2016 to provide additional guidance for the implementation and application of ASU 2014-09. The effective date of these ASUs has been deferred to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016, and associated interim periods. Transition to the new requirements may be made by retroactively revising prior financial statements (with certain practical expedients permitted) or by a cumulative effect through retained earnings. If the latter option is selected, additional disclosures are required for comparability. FHN is evaluating the effects of these ASUs on its revenue recognition practices. In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. If such events or conditions exist, additional disclosures are required and management should evaluate whether its plans sufficiently alleviate the substantial doubt. ASU 2014-15 is effective for the annual period ending after December 15, 2016 and all interim and annual periods thereafter. The provisions of ASU 2014-15 are not anticipated to affect FHN. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 makes several revisions to the accounting, presentation and disclosure for financial instruments. Equity investments (except those accounted for under the equity method or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net income. An entity may elect to measure equity investments that do not have readily determinable market values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar instruments from the same issuer. ASU 2016-01 also requires a qualitative impairment review for equity investments without readily determinable fair values, with measurement at fair value required if impairment is determined to exist. For liabilities for which fair value has been elected, ASU 2016-01 revises current accounting to record the portion of fair value changes resulting from instrument-specific credit risk within other comprehensive income rather than earnings. Additionally, ASU 2016-01 clarifies that the need for a valuation allowance on a deferred tax asset related to available-for-sale securities should be assessed in combination with all other deferred tax assets rather than being assessed in isolation. ASU 2016-01 also makes several changes to existing fair value presentation and disclosure requirements, including a provision that all disclosures must use an exit price concept in the determination of fair value. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. FHN is evaluating the impact of ASU 2016-01 on its current accounting and disclosure practices. In February 2016, the FASB issued ASU 2016-02, “Leases” which requires a lessee to recognize in its statement of condition a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. ASU 2016-02 leaves lessor accounting largely unchanged from prior standards. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. All other leases must be classified as financing or operating leases which depends on the relationship of the lessee’s rights to the economic value of the leased asset. For finance leases, interest on the lease liability is recognized separately from amortization of the right-of-use asset in earnings, resulting in higher expense in the earlier portion of the lease term. For operating leases, a single lease cost is calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis. In transition to ASU 2016-02, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply, which would result in continuing to account for leases that commence before the effective date in accordance with previous requirements (unless the lease is modified) except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous requirements. ASU 2016-02 also requires expanded qualitative and quantitative disclosures to assess the amount, timing, and uncertainty of cash flows arising from lease arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. FHN is evaluating the impact of ASU 2016-02 on its current accounting and disclosure practices. In March 2016, the FASB issued ASU 2016-04, “Recognition of Breakage of Certain Prepaid Stored-Value Products” which indicates that liabilities related to the sale of prepaid-stored value products are considered financial liabilities and should have a breakage estimate applied for estimated unused funds. ASU 2016-04 does not apply to stored-value products that can only be redeemed for cash, are subject to escheatment or are linked to a segregated bank account. ASU 2016-04 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. FHN is evaluating the impact of ASU 2016-04 on its current accounting and disclosure practices. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting” which makes several revisions to equity compensation accounting. Under the new guidance all excess tax benefits and deficiencies that occur when an award vests, is exercised, or expires will be recognized in income tax expense as discrete period items. Previously, these transactions were typically recorded directly within equity. Consistent with this change, excess tax benefits and deficiencies will no longer be included within estimated proceeds when performing the treasury stock method for calculation of diluted earnings per share. Excess tax benefits will also be recognized at the time an award is exercised or vests compared to the current requirement to delay recognition until the deduction reduces taxes payable. The presentation of excess tax benefits in the statement of cash flows will shift to an operating activity from the current classification as a financing activity. ASU 2016-09 also provides an accounting policy election to recognize forfeitures of awards as they occur rather than the current requirement to estimate forfeitures from inception. Further, ASU 2016-09 permits employers to use a net-settlement feature to withhold taxes on equity compensation awards up to the maximum statutory tax rate without affecting the equity classification of the award. Under current guidance, withholding of equity awards in excess of the minimum statutory requirement results in liability classification for the entire award. The related cash remittance by the employer for employee taxes will be treated as a financing activity in the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. Transition to the new guidance will be accomplished through a combination of retrospective, cumulative-effect adjustment to equity and prospective methodologies. FHN is evaluating the impact of ASU 2016-09 on its current equity compensation accounting and disclosure practices. In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments” which revises the measurement and recognition of credit losses for assets measured at amortized cost (e.g., held-to-maturity (“HTM”) loans and debt securities) and available-for-sale (“AFS”) debt securities. Under ASU 2016-13, for assets measured at amortized cost, the current expected credit loss (“CECL”) is measured as the difference between amortized cost and the net amount expected to be collected. This represents a departure from existing GAAP as the “incurred loss” methodology for recognizing credit losses delays recognition until it is probable a loss has been incurred. The measurement of current expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Additionally, current disclosures of credit quality indicators in relation to the amortized cost of financing receivables will be further disaggregated by year of origination. ASU 2016-13 leaves the methodology for measuring credit losses on AFS debt securities largely unchanged, with the maximum credit loss representing the difference between amortized cost and fair value. However, such credit losses will be recognized through an allowance for credit losses, which permits recovery of previously recognized credit losses if circumstances change. ASU 2016-13 also revises the recognition of credit losses for purchased financial assets with a more-than insignificant amount of credit deterioration since origination (“PCD assets”). For PCD assets the initial allowance for credit losses is added to the purchase price. Only subsequent changes in the allowance for credit losses are recorded as a credit loss expense for PCD assets. Interest income for PCD assets will be recognized based on the effective interest rate, excluding the discount embedded in the purchase price that is attributable to the acquirer’s assessment of credit losses at acquisition. Currently, credit losses for purchased credit-impaired assets are included in the initial basis of the assets with subsequent declines in credit resulting in expense while subsequent improvements in credit are reflected as an increase in the future yield from the assets. The provisions of ASU 2016-13 will be generally be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in the year of adoption. Prospective implementation is required for debt securities for which an other-than-temporary-impairment (“OTTI”) had been previously recognized. Amounts previously recognized in accumulated other comprehensive income (“AOCI”) as of the date of adoption that relate to improvements in cash flows expected to be collected will continue to be accreted into income over the remaining life of the asset. Recoveries of amounts previously written off relating to improvements in cash flows after the date of adoption will be recorded in earnings when received. A prospective transition approach will be used for existing PCD assets where upon adoption, the amortized cost basis will be adjusted to reflect the addition of the allowance for credit losses. Thus, an entity will not be required to reassess its purchased financial assets that exist as of the date of adoption to determine whether they would have met at acquisition the new criteria of more-than insignificant credit deterioration since origination. An entity will accrete the remaining noncredit discount (based on the revised amortized cost basis) into interest income at the effective interest rate at the adoption date. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted in fiscal years beginning after December 15, 2018. FHN is evaluating the impact of ASU 2016-13 on its current accounting and disclosure practices. Since the CECL methodology encompasses a “life of loan” requirement for the recognition of credit losses, the estimated amount of such losses will be larger than the estimate of probable incurred losses under current standards. The extent of this difference will be dependent upon economic considerations and loan portfolio characteristics at the time of adoption. |
Acquisitions and Divestitures |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Acquisitions and Divestitures [Abstract] | |
Acquisitions and Divestitures | Note 2 – Acquisitions and Divestitures On October 2, 2015, FHN completed its acquisition of TrustAtlantic Financial Corporation (“TrustAtlantic Financial” or “TAF”), and its wholly-owned bank subsidiary TrustAtlantic Bank (“TAB”), for an aggregate of 5,093,657 shares of FHN common stock and $23.9 million in cash in a transaction valued at $96.7 million. Prior to the acquisition TAF and TAB were headquartered in Raleigh, North Carolina, where TAB had five branches located in the communities of Raleigh, Cary and Greenville. In relation to the acquisition, FHN acquired approximately $400 million in assets, including approximately $282 million in loans, and assumed approximately $344 million of TAB deposits. FHN recorded $45.4 million in goodwill associated with the acquisition, representing the excess of acquisition consideration over the estimated fair value of net assets acquired. See Note 2 – Acquisitions and Divestitures in the Notes to Consolidated Financial Statements on Form 10-K for the year ended December 31, 2015, for additional information about the TAF acquisition. In second quarter 2016, FTBNA signed an agreement with GE Capital to purchase two regional groups of restaurant franchise loans totaling approximately $.6 billion. The acquired loans will be combined with existing FTBNA relationships to establish a restaurant franchise finance specialty lending business. The transaction is expected to close in third quarter 2016. In addition to the transaction mentioned above, FHN acquires or divests assets from time to time in transactions that are considered business combination or divestitures but are not material to FHN individually or in the aggregate. |
Investment Securities |
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Investment Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Note 3 – Investment Securities
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.
Cash proceeds for the three months ended June 30, 2016 were $.6 million; cash proceeds for the three months ended June 30, 2015 were not material. Proceeds for the six months ended June 30, 2016 and 2015, respectively, were $1.5 million and $.3 million. Six months ended June 30, 2016 includes a $1.7 million gain from an exchange of approximately $294 million of AFS debt securities.
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 changes in 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. |
Loans |
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Loans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Note 4 – Loans
Balances as of June 30, 2016 and 2015, and December 31, 2015, include $43.5 million, $66.4 million, and $52.8 million of restricted real estate loans, respectively. See Note 13 - Variable Interest Entities for additional information. COMPONENTS OF THE LOAN PORTFOLIO The loan portfolio is disaggregated into segments and then further disaggregated into classes for certain disclosures. GAAP defines a portfolio segment as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. A class is generally determined based on the initial measurement attribute (i.e., amortized cost or purchased credit-impaired), risk characteristics of the loan, and FHN’s method for monitoring and assessing credit risk. Commercial loan portfolio segments include commercial, financial and industrial ("C&I") and commercial real estate ("CRE"). Commercial classes within C&I include general C&I, loans to mortgage companies, the trust preferred loans ("TRUPS") (i.e. long-term unsecured loans to bank and insurance - related businesses) portfolio and purchased credit-impaired (“PCI”) loans. Loans to mortgage companies include commercial lines of credit to qualified mortgage companies primarily for the temporary warehousing of eligible mortgage loans prior to the borrower’s sale of those mortgage loans to third party investors. Commercial classes within CRE include income CRE, residential CRE and PCI loans. Consumer loan portfolio segments include consumer real estate, permanent mortgage, and the credit card and other portfolio. Consumer classes include HELOC, real estate ("R/E") installment and PCI loans within the consumer real estate segment, permanent mortgage (which is both a segment and a class), and credit card and other. Concentrations FHN has a concentration of residential real estate loans (27 percent of total loans), the majority of which is in the consumer real estate segment (25 percent of total loans). Loans to finance and insurance companies total $2.3 billion (20 percent of the C&I portfolio, or 12 percent of the total loans). FHN had loans to mortgage companies totaling $2.2 billion (20 percent of the C&I segment, or 12 percent of total loans) as of June 30, 2016. As a result, 40 percent of the C&I segment was sensitive to impacts on the financial services industry. Acquisition On October 2, 2015, FHN completed its acquisition of TAF, and its wholly-owned bank subsidiary TAB. The acquisition included $298.1 million in unpaid principal balance of loans with a fair value of $281.9 million. Generally, the fair value for the acquired loans is estimated using a discounted cash flow analysis with significant unobservable inputs (Level 3) including adjustments for expected credit losses, prepayment speeds, current market rates for similar loans, and an adjustment for investor-required yield given product-type and various risk characteristics. See Note 2 - Acquisitions and Divestitures for additional information. At acquisition, FHN designated certain loans as PCI with the remaining loans accounted for under ASC 310-20, "Nonrefundable Fees and Other Costs." For loans accounted for under ASC 310-20, the difference between each loan’s book value to TAB and the estimated fair value at the time of the acquisition will be accreted into interest income over its remaining contractual life and the subsequent accounting and reporting will be similar to a loan in FHN's originated portfolio.
Includes changes in the accretable yield due to both transfers from the nonaccretable difference and the impact of changes in the expected timing of the cash flows. At June 30, 2016, the ALLL related to PCI loans was $.8 million compared to $2.8 million at June 30, 2015. A loan loss provision credit of $.4 million was recognized during the three months ended June 30, 2016, as compared to a loan loss provision credit of $.3 million recognized during the three months ended June 30, 2015. A loan loss provision credit of $.3 million was recognized during the six months ended June 30, 2016, as compared to a loan loss provision credit of $.6 million recognized during the six months ended June 30, 2015.
All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance.
All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance. Asset Quality Indicators FHN employs a dual grade commercial risk grading methodology to assign an estimate for the probability of default ("PD") and the loss given default ("LGD") for each commercial loan using factors specific to various industry, portfolio, or product segments that result in a rank ordering of risk and the assignment of grades PD 1 to PD 16. Each PD grade corresponds to an estimated one-year default probability percentage; a PD 1 has the lowest expected default probability, and probabilities increase as grades progress down the scale. PD 1 through PD 12 are “pass” grades. PD grades 13-16 correspond to the regulatory-defined categories of special mention (13), substandard (14), doubtful (15), and loss (16). Pass loan grades are required to be reassessed annually or earlier whenever there has been a material change in the financial condition of the borrower or risk characteristics of the relationship. All commercial loans over $1 million and certain commercial loans over $500,000 that are graded 13 or worse are reassessed on a quarterly basis. LGD grades are assigned based on a scale of 1-12 and represent FHN’s expected recovery based on collateral type in the event a loan defaults. See Note 5 - Allowance for Loan Losses for further discussion on the credit grading system.
Balances as of June 30, 2016 and 2015, presented net of $25.5 million and $26.2 million, respectively, in lower of cost or market (“LOCOM”) valuation adjustment. Based on the underlying structure of the notes, the highest possible internal grade is "13". The consumer portfolio is comprised primarily of smaller-balance loans which are very similar in nature in that most are standard products and are backed by residential real estate. Because of the similarities of consumer loan-types, FHN is able to utilize the Fair Isaac Corporation (“FICO”) score, among other attributes, to assess the credit quality of consumer borrowers. FICO scores are refreshed on a quarterly basis in an attempt to reflect the recent risk profile of the borrowers. Accruing delinquency amounts are indicators of asset quality within the credit card and other consumer portfolio.
For this group, a majority of the FICO scores at the time of the origination exceeded 620 but have since deteriorated as the loans have seasoned Nonaccrual and Past Due Loans
Total TRUPS includes LOCOM valuation adjustment of $25.5 million.
Total TRUPS includes LOCOM valuation adjustment of $26.2 million. Troubled Debt Restructurings As part of FHN’s ongoing risk management practices, FHN attempts to work with borrowers when necessary to extend or modify loan terms to better align with their current ability to repay. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated separately. A modification is classified as a TDR if the borrower is experiencing financial difficulty and it is determined that FHN has granted a concession to the borrower. FHN may determine that a borrower is experiencing financial difficulty if the borrower is currently in default on any of its debt, or if it is probable that a borrower may default in the foreseeable future. Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty. Concessions could include extension of the maturity date, reductions of the interest rate (which may make the rate lower than current market for a new loan with similar risk), reduction or forgiveness of accrued interest, or principal forgiveness. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty, and whether a concession has been granted, are subjective in nature and management’s judgment is required when determining whether a modification is classified as a TDR. For all classes within the commercial portfolio segment, TDRs are typically modified through forbearance agreements (generally 6 to 12 months). Forbearance agreements could include reduced interest rates, reduced payments, release of guarantor, or entering into short sale agreements. FHN’s proprietary modification programs for consumer loans are generally structured using parameters of U.S. government-sponsored programs such as Home Affordable Modification Program (“HAMP”). Within the HELOC and R/E installment loans classes of the consumer portfolio segment, TDRs are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 1 percent for up to 5 years) and a possible maturity date extension to reach an affordable housing debt ratio. After 5 years, the interest rate will increase 2 percent per year until the original interest rate prior to modification is achieved. Permanent mortgage TDRs are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 2 percent for up to 5 years) and a possible maturity date extension to reach an affordable housing debt ratio. After 5 years the interest rate steps up 1 percent every year until it reaches the Federal Home Loan Mortgage Corporation Weekly Survey Rate cap. Contractual maturities may be extended to 40 years on permanent mortgages and to 30 years for consumer real estate loans. Within the credit card class of the consumer portfolio segment, TDRs are typically modified through either a short-term credit card hardship program or a longer-term credit card workout program. In the credit card hardship program, borrowers may be granted rate and payment reductions for 6 months to 1 year. In the credit card workout program, customers are granted a rate reduction to 0 percent and term extensions for up to 5 years to pay off the remaining balance. Despite the absence of a loan modification, the discharge of personal liability through bankruptcy proceedings is considered a concession. As a result, FHN classifies all non-reaffirmed residential real estate loans discharged in Chapter 7 bankruptcy as nonaccruing TDRs. On June 30, 2016 and 2015, FHN had $299.3 million and $310.6 million portfolio loans classified as TDRs, respectively. For TDRs in the loan portfolio, FHN had loan loss reserves of $51.2 million and $61.0 million, or 17 percent as of June 30, 2016, and 20 percent as of June 30, 2015. Additionally, $73.8 million and $80.8 million of loans held-for-sale as of June 30, 2016 and 2015, respectively, were classified as TDRs.
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Allowance |
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Loans And Leases Receivable Allowance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance | Note 5 - Allowance for Loan Losses The ALLL includes the following components: reserves for commercial loans evaluated based on pools of credit graded loans and reserves for pools of smaller-balance homogeneous consumer loans, both determined in accordance with ASC 450-20-50. The reserve factors applied to these pools are an estimate of probable incurred losses based on management’s evaluation of historical net losses from loans with similar characteristics and are subject to qualitative adjustments by management to reflect current events, trends, and conditions (including economic considerations and trends). The pace of the economic recovery, performance of the housing market, unemployment levels, labor participation rate, regulatory guidance, and both positive and negative portfolio segment-specific trends, are examples of additional factors considered by management in determining the ALLL. Additionally, management considers the inherent uncertainty of quantitative models that are driven by historical loss data. Management evaluates the periods of historical losses that are the basis for the loss rates used in the quantitative models and selects historical loss periods that are believed to be the most reflective of losses inherent in the loan portfolio as of the balance sheet date. Management also periodically reviews analysis of the loss emergence period which is the amount of time it takes for a loss to be confirmed (initial charge-off) after a loss event has occurred. FHN performs extensive studies as it relates to the historical loss periods used in the model and the loss emergence period and model assumptions are adjusted accordingly. The ALLL also includes reserves determined in accordance with ASC 310-10-35 for loans determined by management to be individually impaired and an allowance associated with PCI loans. See Note 1 – Summary of Significant Accounting Policies and Note – 5 Allowance for Loan Losses in the Notes to Consolidated Financial Statements on Form 10-K for the year ended December 31, 2015, for additional information about the policies and methodologies used in the aforementioned components of the ALLL.
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Intangible Assets |
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Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Note 6 – Intangible Assets
The gross carrying amount and accumulated amortization of other intangible assets subject to amortization is $72.3 million and $48.7 million, respectively on June 30, 2016. Estimated aggregate amortization expense is expected to be $2.6 million for the remainder of 2016, and $4.9 million, $4.7 million, $4.5 million, $1.7 million, and $1.6 million for the twelve-month periods of 2017, 2018, 2019, 2020, and 2021, respectively. Gross goodwill, accumulated impairments, and accumulated divestiture related write-offs were determined beginning January 1, 2012, when a change in accounting requirements resulted in goodwill being assessed for impairment rather than being amortized. Gross goodwill of $200.0 million with accumulated impairments and accumulated divestiture related write-offs of $114.1 million and $85.9 million, respectively, were previously allocated to the non-strategic segment, resulting in $0 net goodwill allocated to the non-strategic segment as of June 30, 2015 and 2016. The regional bank and fixed income segments do not have any accumulated impairments or divestiture related write-offs. The following is a summary of goodwill by reportable segment included in the Consolidated Condensed Statements of Condition as of and for the six months ended June 30, 2015 and 2016.
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Other Income And Other Expense |
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Other Income And Other Expense [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income And Other Expense | Note 7 – Other Income and Other Expense
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Components of Other Comprehensive Income/(Loss) |
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Disclosure Text Block [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Other Comprehensive Income/(Loss) [Text Block] | Note 8 – Components of Other Comprehensive Income/(loss)
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Earnings Per Share |
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Note 9 – Earnings Per Share
For the six months ended June 30, 2015 all potential common shares were antidilutive due to the net loss available to common shareholders.
For the six months ended June 30, 2015 all potential common shares were antidilutive due to the net loss available to common shareholders. |
Contingencies And Other Disclosures |
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Commitments And Contingencies Disclosure Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingencies And Other Disclosures | Note 10 – Contingencies and Other Disclosures CONTINGENCIES Contingent Liabilities Overview Contingent liabilities arise in the ordinary course of business. Often they are related to lawsuits, arbitration, mediation, and other forms of litigation. Various litigation matters are threatened or pending against FHN and its subsidiaries. Also, FHN at times receives requests for information, subpoenas, or other inquiries from federal, state, and local regulators, from other government authorities, and from other parties concerning various matters relating to FHN’s current or former lines of business. Certain matters of that sort are pending at this time, and FHN is cooperating in those matters. Pending and threatened litigation matters sometimes are resolved in court or before an arbitrator, and sometimes are settled by the parties. Regardless of the manner of resolution, frequently the most significant changes in status of a matter occur over a short time period, often following a lengthy period of little substantive activity. In view of the inherent difficulty of predicting the outcome of these matters, particularly where the claimants seek very large or indeterminate damages, or where the cases present novel legal theories or involve a large number of parties, or where claims or other actions may be possible but have not been brought, FHN cannot reasonably determine what the eventual outcome of the matters will be, what the timing of the ultimate resolution of these matters may be, or what the eventual loss or impact related to each matter may be. FHN establishes loss contingency liabilities for litigation matters when loss is both probable and reasonably estimable as prescribed by applicable financial accounting guidance. If loss for a matter is probable and a range of possible loss outcomes is the best estimate available, accounting guidance requires a liability to be established at the low end of the range. Based on current knowledge, and after consultation with counsel, management is of the opinion that loss contingencies related to threatened or pending litigation matters should not have a material adverse effect on the consolidated financial condition of FHN, but may be material to FHN’s operating results for any particular reporting period depending, in part, on the results from that period. Material Loss Contingency Matters As used in this Note, "material loss contingency matters" generally fall into at least one of the following categories: (i) FHN has determined material loss to be probable and has established a material loss liability in accordance with applicable financial accounting guidance, other than matters reported as having been substantially settled or otherwise substantially resolved; (ii) FHN has determined material loss to be probable but is not reasonably able to estimate an amount or range of material loss liability; or (iii) FHN has determined that material loss is not probable but is reasonably possible, and that the amount or range of that reasonably possible material loss is estimable. As defined in applicable accounting guidance, loss is reasonably possible if there is more than a remote chance of a material loss outcome for FHN. Set forth below are disclosures for certain pending or threatened litigation matters, including all matters mentioned in (i) or (ii) and certain matters mentioned in (iii). In addition, certain other matters are discussed relating to FHN's former mortgage origination and servicing businesses. In all litigation matters discussed, unless settled or otherwise resolved, FHN believes it has meritorious defenses and intends to pursue those defenses vigorously. FHN reassesses the liability for litigation matters each quarter as the matters progress. At June 30, 2016, the aggregate amount of liabilities established for all loss contingency matters was $40.4 million. These liabilities are separate from those discussed under the heading "Repurchase and Foreclosure Liability" below. In each material loss contingency matter, except as otherwise noted, there is more than a remote chance that any of the following outcomes will occur: the plaintiff will substantially prevail; the defense will substantially prevail; the plaintiff will prevail in part; or the matter will be settled by the parties. At June 30, 2016, FHN estimates that for all material loss contingency matters, estimable reasonably possible losses in future periods in excess of currently established liabilities could aggregate in a range from zero to approximately $73 million. As a result of the general uncertainties discussed above and the specific uncertainties discussed for each matter mentioned below, it is possible that the ultimate future loss experienced by FHN for any particular matter may materially exceed the amount, if any, of currently established liability for that matter. That possibility exists both for matters included in the estimated reasonably possible loss (“RPL”) range mentioned above and for matters not included in that range. Certain Matters Included in RPL Range Debit Transaction Sequencing Litigation Matter. FTBNA is a defendant in a putative class action lawsuit concerning overdraft fees charged in connection with debit card transactions. A key claim is that the method used to order or sequence the transactions posted each day was improper. The case is styled as Hawkins v. First Tennessee Bank National Association, before the Circuit Court for Shelby County, Tennessee, Case No. CT-004085-11. The plaintiff seeks actual damages of at least $5 million, unspecified restitution of fees charged, and unspecified punitive damages, among other things. In July 2016 FHN and the plaintiff submitted a notice of proposed settlement to the court. That proposed settlement is subject to negotiation of a definitive settlement agreement and a court approval process involving several steps and significant remaining uncertainty. FHN's estimate of RPL for this matter is subject to significant uncertainties regarding: whether the class contemplated by the proposed settlement will be certified by the court; whether outside parties will object or intervene in the approval process; and whether the court will determine the settlement to be fair. RPL-Included FH Proprietary Securitization Matters. FHN, along with multiple co-defendants, is defending lawsuits brought by investors which claim that the offering documents under which certificates relating to First Horizon branded securitizations were sold to them were materially deficient. FHN can estimate reasonably possible loss for two of those matters: (1) Federal Deposit Insurance Corporation ("FDIC") as receiver for Colonial Bank, in the U.S. District Court for the Middle District of Alabama (Case No. CV-12-791-WKW-WC); and (2) FDIC as receiver for Colonial Bank, in the U.S. District Court for the Southern District of New York (Case No. 12 Civ. 6166 (LLS)(MHD)). The plaintiff in those suits claims to have purchased (and later sold) certificates in a number of separate securitizations and demands damages and prejudgment interest, among several remedies sought. The RPL estimates for these matters are subject to significant uncertainties regarding: the dollar amounts claimed; the potential remedies that might be available or awarded; the outcome of any settlement discussions; the ultimate outcome of potentially significant motions; the availability of significantly dispositive defenses; and the incomplete status of the discovery process. FDIC’s claims relate to alleged purchases totaling $145.7 million. Additional information concerning FHN’s former mortgage businesses is provided below in “Obligations from Legacy Mortgage Businesses.” Legacy Mortgage Matters Excluded from RPL Range As mentioned above, FHN is directly defending two lawsuits which claim that the offering documents under which certificates relating to securitizations were sold were materially deficient. Underwriters are co-defendants and have demanded, under provisions in the applicable underwriting agreements, that FHN indemnify them for their expenses and any losses they may incur. In addition, FHN has received indemnity demands from underwriters in certain other suits as to which investors claim to have purchased certificates in FH proprietary securitizations but as to which FHN has not been named a defendant. For the two pending lawsuits FHN is able to estimate RPL, as mentioned above. For the indemnity claims FHN is unable to estimate an RPL range due to significant uncertainties regarding: claims as to which the claimant specifies no dollar amount; the potential remedies that might be available or awarded; the availability of significantly dispositive defenses such as statutes of limitations or repose; the outcome of potentially dispositive early-stage motions such as motions to dismiss; the incomplete status of the discovery process; the lack of a precise statement of damages; and lack of precedent claims. The alleged purchase prices of the certificates subject to the indemnification requests total $510.1 million. FHN has additional potential exposures related to its former mortgage businesses. A few of those matters have become litigation which FHN currently estimates are immaterial, some are non-litigation claims or threats, some are mere requests for information, and in some areas FHN has no indication of any active or threatened dispute. Some of those matters might eventually result in loan repurchases or make-whole payments and could be included in the repurchase liability discussed below, but none are included in the material loss contingency liability mentioned above. None are included in the RPL range mentioned above. Additional information concerning such exposures is provided below in “Obligations from Legacy Mortgage Businesses.” Material Gain Contingency Matter In second quarter 2015 FHN reached an agreement with DOJ and HUD to settle potential claims related to FHN’s underwriting and origination of loans insured by FHA. Under that agreement FHN paid $212.5 million. FHN believes that certain insurance policies, having an aggregate policy limit of $75 million, provide coverage for FHN’s losses and related costs. The insurers have denied and/or reserved rights to deny coverage. FHN has brought suit against the insurers to enforce the policies under Tennessee law. In connection with this litigation the previously recognized expenses associated with the settled matter may be recouped in part. Under applicable financial accounting guidance FHN has determined that although material gain from this litigation is not probable, there is a reasonably possible (more than remote) chance of a material gain outcome for FHN. FHN cannot determine a probable outcome that may result from this matter because of the uncertainty of the potential outcomes of the legal proceedings and also due to significant uncertainties regarding: legal interpretation of the relevant contracts; potential remedies that might be available or awarded; the ultimate effect of counterclaims asserted by the defendants; and incomplete discovery. Additional information concerning FHN’s former mortgage businesses is provided below in “Obligations from Legacy Mortgage Businesses.” Obligations from Legacy Mortgage Businesses Several matters mentioned above stem from FHN’s former mortgage origination and servicing businesses. FHN retains potential for further exposure, in addition to those matters, from those former businesses. The remainder of this “Contingencies” section provides context and other information to enhance an understanding of those matters and exposures. Overview Prior to September 2008 FHN originated loans through its legacy mortgage business, primarily first lien home loans, with the intention of selling them. Sales typically were effected either as non-recourse whole-loan sales or through non-recourse proprietary securitizations. Conventional conforming single-family residential mortgage loans were sold predominately to two GSEs: Fannie Mae and Freddie Mac. Also, federally insured or guaranteed whole loans were pooled, and payments to investors were guaranteed through Ginnie Mae. Many mortgage loan originations, especially nonconforming mortgage loans, were sold to investors, or certificate-holders, predominantly through FH proprietary securitizations but also, to a lesser extent, through other whole loans sold to private non-Agency purchasers. FHN used only one trustee for all of its FH proprietary securitizations. FHN also originated mortgage loans eligible for FHA insurance or VA guaranty. In addition, FHN originated and sold HELOCs and second lien mortgages through other whole loans sold to private purchasers and, to a lesser extent, through FH proprietary securitizations. Currently, only one FH securitization of HELOCs remains outstanding. For non-recourse loan sales, FHN has exposure for repurchase of loans, make-whole damages, or other related damages, arising from claims that FHN breached its representations and warranties made at closing to the purchasers, including GSEs, other whole loan purchasers, and the trustee of FH proprietary securitizations. During the time these legacy activities were conducted, FHN frequently sold mortgage loans “with servicing retained.” As a result, FHN accumulated substantial amounts of MSR on its balance sheet, as well as contractual servicing obligations and related deposits and receivables. FHN conducted a significant servicing business under its First Horizon Home Loans brand. MI was required by GSE rules for certain of the loans sold to GSEs and was also provided for certain of the loans that were securitized. MI generally was provided for first lien loans sold or securitized having an LTV ratio at origination of greater than 80 percent. In 2007, market conditions deteriorated to the point where mortgage-backed securitizations no longer could be sold economically; FHN’s last securitization occurred that year. FHN continued selling mortgage loans to GSEs until August 31, 2008, when FHN sold its national mortgage origination and servicing platforms along with a portion of its servicing assets and obligations. FHN contracted to have its remaining servicing obligations sub-serviced. Since the platform sale FHN has sold substantially all remaining servicing assets and obligations. Certain mortgage-related terms used in this “Contingencies” section are defined in “Mortgage-Related Glossary” at the end of this Overview. Repurchase and Make-Whole Obligations Starting in 2009, FHN received a high number of claims either to repurchase loans from the purchaser or to pay the purchaser to “make them whole” for economic losses incurred. These claims have been driven primarily by loan delinquencies. In repurchase or make-whole claims a loan purchaser typically asserts that specified loans violated representations and warranties FHN made when the loans were sold. A significant majority of claims received overall have come from GSEs, and the remainder are from purchasers of other whole loan sales. FHN has not received a loan repurchase or make-whole claim from the FH proprietary securitization trustee. Generally, FHN reviews each claim and MI cancellation notice individually. Those responses include appeal, provide additional information, deny the claim (rescission), repurchase the loan or remit a make-whole payment, or reflect cancellation of MI. After several years resolving repurchase and make-whole claims with each GSE on a loan-by-loan basis, in 2013 and 2014 FHN entered into DRAs with the GSEs, resolving at once a large fraction of pending and potential future claims. Starting in 2014, the overall number of such claims diminished substantially, primarily as a result of the DRAs. Each DRA resolved obligations associated with loans originated from 2000 to 2008, but certain obligations and loans were excluded. Under each DRA, FHN remains responsible for repurchase obligations related to certain excluded defects (such as title defects and violations of the GSE's Charter Act) and FHN continues to have loan repurchase or monetary compensation obligations under the DRAs related to private mortgage insurance rescissions, cancellations, and denials (with certain exceptions). FHN also has exposure related to loans where there has been a prior bulk sale of servicing, as well as certain other whole-loan sales. With respect to loans where there has been a prior bulk sale of servicing, FHN is not responsible for MI cancellations and denials to the extent attributable to the acts of the current servicer. While large portions of repurchase claims from the GSEs were settled with the DRAs, large-scale settlement with non-Agency claimants is not practical. Those claims are resolved case by case or, occasionally, with less-comprehensive settlements. In second quarter 2016, in the largest such settlement to date, FHN settled certain repurchase claims which reduced the repurchase and foreclosure liability to $68.1 million at June 30, 2016 and resulted in a reversal of certain prior provision expense. Repurchase claims that are not resolved by the parties could become litigation. FH Proprietary Securitization Actions FHN has potential financial exposure from FH proprietary securitizations outside of the repurchase/make-whole process. Several investors in certificates sued FHN and others starting in 2009, and several underwriters or other counterparties have demanded that FHN indemnify and defend them in securitization lawsuits. The pending suits generally assert that disclosures made to investors in the offering and sale of certificates were legally deficient. Servicing Obligations FHN’s national servicing business was sold as part of the platform sale in 2008. A significant amount of MSR was sold at that time, and a significant amount was retained. The related servicing activities, including foreclosure and loss mitigation practices, not sold in 2008 were outsourced through a three-year subservicing arrangement (the “2008 subservicing agreement”) with the platform buyer (the “2008 subservicer”). The 2008 subservicing agreement expired in 2011 when FHN entered into a replacement agreement with a new subservicer (the “2011 subservicer”). In fourth quarter 2013, FHN contracted to sell a substantial majority of its remaining servicing obligations and servicing assets (including advances) to the 2011 subservicer. The servicing was transferred to the buyer in stages, and was substantially completed in first quarter 2014. The servicing still retained by FHN continues to be subserviced by the 2011 subservicer. As servicer, FHN had contractual obligations to the owners of the loans, primarily GSEs and securitization trustees, to handle billing, custodial, and other tasks related to each loan. Each subservicer undertook to perform those obligations on FHN’s behalf during the applicable subservicing period, although FHN legally remained the servicer of record for those loans that were subserviced. The 2008 subservicer has been subject to a consent decree, and entered into a settlement agreement, with regulators related to alleged deficiencies in servicing and foreclosure practices. The 2008 subservicer has made demands of FHN, under the 2008 subservicing agreement, to pay certain resulting costs and damages totaling $43.5 million. FHN disagrees with those demands and has made no payments. This disagreement has the potential to result in litigation and, in any such future litigation, the claim against FHN may be substantial. A certificate holder has contacted FHN, threatening to make claims based on alleged deficiencies in servicing loans held in certain FH proprietary securitization trusts. FHN cannot predict how this inquiry will proceed nor whether any claim or suit, if made or brought, will be material to FHN. Origination Data From 2005 through 2008, FHN originated and sold $69.5 billion of mortgage loans to the Agencies. This includes $57.6 billion of loans sold to GSEs and $11.9 billion of loans guaranteed by Ginnie Mae. Although FHN conducted these businesses before 2005, GSE loans originated in 2005 through 2008 account for approximately 90 percent of all repurchase requests/make-whole claims received from the 2008 platform sale through December 31, 2015. From 2005 through 2007, $26.7 billion of mortgage loans were included in FH proprietary securitizations.
Repurchase and Foreclosure Liability The repurchase and foreclosure liability is comprised of reserves to cover estimated loss content in the active pipeline, estimated future inflows, as well as estimated loss content related to certain known claims not currently included in the active pipeline. FHN compares the estimated probable incurred losses determined under the applicable loss estimation approaches described above for the respective periods with current reserve levels. Changes in the estimated required liability levels are recorded as necessary through the repurchase and foreclosure provision. Based on currently available information and experience to date, FHN has evaluated its loan repurchase, make-whole, and certain related exposures and has accrued for losses of $68.1 million and $117.2 million as of June 30, 2016 and 2015, respectively, including a smaller amount related to equity-lending junior lien loan sales. Accrued liabilities for FHN’s estimate of these obligations are reflected in Other liabilities on the Consolidated Condensed Statements of Condition. Charges to increase the liability are included within Repurchase and foreclosure provision on the Consolidated Condensed Statements of Income. The estimates are based upon currently available information and fact patterns that exist as of the balance sheet dates and could be subject to future changes. Changes to any one of these factors could significantly impact the estimate of FHN's liability. Government-Backed Mortgage Lending Programs FHN’s FHA and VA program lending was substantial prior to the 2008 platform sale, and has continued at a much lower level since then. As lender, FHN made certain representations and warranties as to the compliance of the loans with program requirements. Over the past several years, most recently in first quarter 2015, FHN occasionally has recognized significant losses associated with settling claims and potential claims by government agencies, and by private parties asserting claims on behalf of agencies, related to these origination activities. At June 30, 2016, FHN had not accrued a liability for any matter related to these government lending programs, and no pending or known threatened matter related to these programs represented a material loss contingency described above. Other FHN Mortgage Exposures At June 30, 2016, FHN had not accrued a liability for exposure for repurchase of first-lien loans related to FH proprietary securitizations arising from claims from the trustee that FHN breached its representations and warranties in FH proprietary securitizations at closing. FHN’s trustee is a defendant in a lawsuit in which the plaintiffs have asserted that the trustee has duties to review loans and otherwise to act against FHN outside of the duties specified in the applicable trust documents; FHN is not a defendant in that suit and is not able to assess what, if any, exposure FHN may have as a result of it. FHN is defending, directly or as indemnitor, certain pending lawsuits brought by purchasers of certificates in FH proprietary securitizations or their assignees. FHN believes a new lawsuit based on federal securities claims that offering disclosures were deficient cannot be brought at this time due to the running of applicable limitation periods, but other investor claims, based on other legal theories, might still be possible. Due to the sales of MSR from 2008 through 2014, FHN has limited visibility into current loan information such as principal payoffs, refinance activity, delinquency trends, and loan modification activity. Many non-GSE purchasers of whole loans from FHN included those loans in their own securitizations. Regarding such other whole loans sold, FHN made representations and warranties concerning the loans and provided indemnity covenants to the purchaser/securitizer. Typically the purchaser/securitizer assigned key contractual rights against FHN to the securitization trustee. As mentioned above, repurchase and make-whole claims related to specific loans are included in the active pipeline and repurchase reserve. In addition, currently the following categories of actions are pending which involve FHN and other whole loans sold: (i) FHN has received indemnification requests from purchasers of loans or their assignees in cases where FHN is not a defendant; (ii) FHN has received subpoenas seeking loan reviews in cases where FHN is not a defendant; (iii) FHN has received repurchase demands from purchasers or their assignees; and (iv) FHN is a defendant in legal actions involving FHN-originated loans. At June 30, 2016, FHN had not accrued a liability for any litigation matter related to other whole loans sold; however, FHN’s repurchase and foreclosure liability considered certain known exposures from other whole loans sold. Certain government entities have subpoenaed information from FHN and others. These entities include the FDIC (on behalf of certain failed banks) and the FHLBs of San Francisco, Atlanta, and Seattle, among others. These entities purport to act on behalf of several purchasers of FH proprietary securitizations, and of non-FH securitizations which included other whole loans sold. Collectively, the subpoenas seek information concerning: a number of FH proprietary securitizations and/or underlying loan originations; and originations of certain other whole loans sold which, in many cases, were included by the purchaser in its own securitizations. Some subpoenas fail to identify the specific investments made or loans at issue. Moreover, FHN has limited information regarding at least some of the loans under review. Unless and until a review (if related to specific loans) becomes an identifiable repurchase claim, the associated loans are not considered part of the active pipeline. OTHER DISCLOSURES Visa Matters FHN is a member of the Visa USA network. In October 2007, the Visa organization of affiliated entities completed a series of global restructuring transactions to combine its affiliated operating companies, including Visa USA, under a single holding company, Visa Inc. (“Visa”). Upon completion of the reorganization, the members of the Visa USA network remained contingently liable for certain Visa litigation matters (the "Covered Litigation"). Based on its proportionate membership share of Visa USA, FHN recognized a contingent liability in fourth quarter 2007 related to this contingent obligation. In March 2008, Visa completed its initial public offering (“IPO”) and funded an escrow account from its IPO proceeds to be used to make payments related to the Visa litigation matters. FHN received approximately 2.4 million Class B shares in conjunction with Visa’s IPO. Conversion of these shares into Class A shares of Visa and, with limited exceptions, transfer of these shares is restricted until the final resolution of the covered litigation. In conjunction with the prior sales of Visa Class B shares in December 2010 and September 2011, FHN and the purchasers entered into derivative transactions whereby FHN will make, or receive, cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. The conversion ratio is adjusted when Visa deposits funds into the escrow account to cover certain litigation. As of June 30, 2016 and 2015, the derivative liabilities were $6.8 million and $4.8 million, respectively. In July 2012, Visa and MasterCard announced a joint settlement (the "Settlement") related to the Payment Card Interchange matter, one of the Covered Litigation matters. Based on the amount of the Settlement attributable to Visa and an assessment of FHN's contingent liability accrued for Visa litigation matters, the Settlement did not have a material impact on FHN. The Settlement was vacated upon appeal in June 2016. Accordingly, the outcome of this matter remains uncertain. Additionally, other Covered Litigation matters are also pending judicial resolution, including new matters filed by class members who opted out of the Settlement. So long as any Covered Litigation matter remains pending, FHN's ability to transfer its Visa holdings continues to be restricted.
FHN now holds approximately 1.1 million Visa Class B shares. FHN’s Visa shares are not considered to be marketable and therefore are included in the Consolidated Condensed Statements of Condition at their historical cost of $0. As of June 30, 2016, the conversion ratio is 165 percent reflecting a Visa stock split in March 2015, and the contingent liability is $.8 million. Future funding of the escrow would dilute this conversion ratio by an amount that is not determinable at present. Based on the closing price on June 30, 2016, assuming conversion into Class A shares at the current conversion ratio, FHN’s Visa holdings would have a value of approximately $136 million. Recognition of this value is dependent upon the final resolution of the remainder of Visa’s Covered Litigation matters without further reduction of the conversion ratio. Indemnification Agreements and Guarantees In the ordinary course of business, FHN enters into indemnification agreements for legal proceedings against its directors and officers and standard representations and warranties for underwriting agreements, merger and acquisition agreements, loan sales, contractual commitments, and various other business transactions or arrangements. The extent of FHN’s obligations under these agreements depends upon the occurrence of future events; therefore, it is not possible to estimate a maximum potential amount of payouts that could be required with such agreements. |
Pension, Savings, And Other Employee Benefits |
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Pension, Savings, And Other Employee Benefits | Note 11 – Pension, Savings, and Other Employee Benefits Pension plan. FHN sponsors a noncontributory, qualified defined benefit pension plan to employees hired or re-hired on or before September 1, 2007. Pension benefits are based on years of service, average compensation near retirement or other termination, and estimated social security benefits at age 65. Benefits under the plan are “frozen” so that years of service and compensation changes after 2012 do not affect the benefit owed. Minimum contributions are based upon actuarially determined amounts necessary to fund the benefit obligation. FHN did not make any contributions to the qualified pension plan in 2015 or in the first half of 2016. Decisions to contribute to the plan are based upon pension funding requirements under the Pension Protection Act, the maximum amount deductible under the Internal Revenue Code, the actual performance of plan assets, and trends in the regulatory environment. FHN expects to contribute approximately $165 million to the qualified pension plan in third quarter 2016. FHN also maintains non-qualified plans including a supplemental retirement plan that covers certain employees whose benefits under the qualified pension plan have been limited by tax rules. These other non-qualified plans are unfunded, and contributions to these plans cover all benefits paid under the non-qualified plans. Payments made under the non-qualified plans were $4.9 million for 2015. FHN anticipates making benefit payments under the non-qualified plans of $5.2 million in 2016. Savings plan. FHN provides all qualifying full-time employees with the opportunity to participate in the FHN tax qualified 401(k) savings plan. The qualified plan allows employees to defer receipt of earned salary, up to tax law limits, on a tax-advantaged basis. Accounts, which are held in trust, may be invested in a wide range of mutual funds and in FHN common stock. Up to tax law limits, FHN provides a 100 percent match for the first 6 percent of salary deferred, with company matching contributions invested according to a participant’s current investment elections. Through a non-qualified savings restoration plan, FHN provides a restorative benefit to certain highly-compensated employees who participate in the savings plan and whose contribution elections are capped by tax limitations. Other employee benefits. FHN provides postretirement life insurance benefits to certain employees and also provides postretirement medical insurance benefits to retirement-eligible employees. The postretirement medical plan is contributory with FHN contributing a fixed amount for certain participants. FHN’s postretirement benefits include certain prescription drug benefits.
In 2016, FHN changed its methodology for the calculation of interest cost for its applicable employee benefit plans. Prior to 2016 FHN utilized a weighted average discount rate to determine interest cost, which is the same discount rate used to calculate the projected benefit obligation. Starting in 2016, FHN has adopted a spot rate approach which applies duration-specific rates from the full yield curve to estimated future benefit payments for the determination of interest cost. This change in accounting estimate is expected to reduce annual interest cost across all plans by $5.8 million in 2016. |
Business Segment Information |
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Business Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Information | Note 12 – Business Segment Information FHN has four business segments: regional banking, fixed income, corporate, and non-strategic. The regional banking segment offers financial products and services, including traditional lending and deposit taking, to retail and commercial customers in Tennessee and other selected markets. Regional banking provides investments, financial planning, trust services and asset management, credit card, and cash management. Additionally, the regional banking segment includes correspondent banking which provides credit, depository, and other banking related services to other financial institutions nationally. The fixed income segment consists of fixed income sales, trading, and strategies for institutional clients in the U.S. and abroad, as well as loan sales, portfolio advisory, and derivative sales. The corporate segment consists of unallocated corporate expenses, expense on subordinated debt issuances, bank-owned life insurance, unallocated interest income associated with excess equity, net impact of raising incremental capital, revenue and expense associated with deferred compensation plans, funds management, tax credit investment activities, gains on the extinguishment of debt, and acquisition-related costs. The non-strategic segment consists of the wind-down national consumer lending activities, legacy mortgage banking elements including servicing fees, and the associated ancillary revenues and expenses related to these businesses. Non-strategic also includes the wind-down trust preferred loan portfolio and exited businesses. Periodically, FHN adapts its segments to reflect managerial or strategic changes. FHN may also modify its methodology of allocating expenses and equity among segments which could change historical segment results. Business segment revenue, expense, asset, and equity levels reflect those which are specifically identifiable or which are allocated based on an internal allocation method. Because the allocations are based on internally developed assignments and allocations, to an extent they are subjective. Generally, all assignments and allocations have been consistently applied for all periods presented. The following table reflects the amounts of consolidated revenue, expense, tax, and assets for each segment for the three and six months ended June 30:
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Variable Interest Entities |
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Variable Interest Entities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Note 13 – Variable Interest Entities Consolidated Variable Interest Entities FHN holds variable interests in a proprietary HELOC securitization trust it established as a source of liquidity for consumer lending operations. Based on its restrictive nature, the trust is considered a VIE as the holders of equity at risk do not have the power through voting rights or similar rights to direct the activities that most significantly impact the trust’s economic performance. The retention of MSR and a residual interest results in FHN potentially absorbing losses or receiving benefits that are significant to the trust. FHN is considered the primary beneficiary, as it is assumed to have the power, as Master Servicer, to most significantly impact the activities of the VIE. Consolidation of the trust results in the recognition of the trust proceeds as restricted borrowings since the cash flows on the securitized loans can only be used to settle the obligations due to the holders of trust securities. Through first quarter 2016 the trust experienced a rapid amortization period and FHN was obligated to provide subordinated funding. During the period, cash payments from borrowers were accumulated to repay outstanding debt securities while FHN continued to make advances to borrowers when they drew on their lines of credit. FHN then transferred the newly generated receivables into the securitization trust. FHN is reimbursed for these advances only after other parties in the securitization have received all of the cash flows to which they are entitled. If loan losses requiring draws on the related monoline insurers’ policies (which protect bondholders in the securitization) exceed a certain level, FHN may not receive reimbursement for all of the funds advanced to borrowers, as the senior bondholders and the monoline insurers typically have priority for repayment. Amounts funded from monoline insurance policies are considered restricted term borrowings in FHN’s Consolidated Condensed Statements of Condition. Except for recourse due to breaches of representations and warranties made by FHN in connection with the sale of the loans to the trust, the creditors of the trust hold no recourse to the assets of FHN. FHN has established certain rabbi trusts related to deferred compensation plans offered to its employees. FHN contributes employee cash compensation deferrals to the trusts and directs the underlying investments made by the trusts. The assets of these trusts are available to FHN’s creditors only in the event that FHN becomes insolvent. These trusts are considered VIEs as there is no equity at risk in the trusts since FHN provided the equity interest to its employees in exchange for services rendered. FHN is considered the primary beneficiary of the rabbi trusts as it has the power to direct the activities that most significantly impact the economic performance of the rabbi trusts through its ability to direct the underlying investments made by the trusts. Additionally, FHN could potentially receive benefits or absorb losses that are significant to the trusts due to its right to receive any asset values in excess of liability payoffs and its obligation to fund any liabilities to employees that are in excess of a rabbi trust’s assets.
Nonconsolidated Variable Interest Entities Low Income Housing Partnerships. First Tennessee Housing Corporation (“FTHC”), a wholly-owned subsidiary of FTBNA, makes equity investments as a limited partner in various partnerships that sponsor affordable housing projects utilizing the Low Income Housing Tax Credit (“LIHTC”) pursuant to Section 42 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital and to support FHN’s community reinvestment initiatives. The activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants generally within FHN’s primary geographic region. LIHTC partnerships are considered VIEs as FTHC, the holder of the equity investment at risk, does not have the ability to direct the activities that most significantly affect the performance of the entity through voting rights or similar rights. FTHC could absorb losses that are significant to the LIHTC partnerships as it has a risk of loss for its capital contributions and funding commitments to each partnership. The general partners are considered the primary beneficiaries as managerial functions give them the power to direct the activities that most significantly impact the entities’ economic performance and the managing members are exposed to all losses beyond FTHC’s initial capital contributions and funding commitments. FHN accounts for all qualifying LIHTC investments under the proportional amortization method. Under this method an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense/(benefit). LIHTC investments that do not qualify for the proportional amortization method are accounted for using the equity method. Expenses associated with these investments were not significant for the three or six months ended June 30, 2016 and 2015. The following table summarizes the impact to the Provision/(benefit) for income taxes on the Consolidated Condensed Statements of Income for the three and six months ended June 30, 2016 and 2015 for LIHTC investments accounted for under the proportional amortization method.
Other Tax Credit Investments. First Tennessee New Markets Corporation (“FTNMC”), a wholly-owned subsidiary of FTBNA, makes equity investments through wholly-owned subsidiaries as a non-managing member in various limited liability companies (“LLCs”) that sponsor community development projects utilizing the New Market Tax Credit (“NMTC”) pursuant to Section 45 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital and to support FHN’s community reinvestment initiatives. The activities of the LLCs include providing investment capital for low-income communities within FHN’s primary geographic region. A portion of the funding of FTNMC’s investment in a NMTC LLC is obtained via a loan from an unrelated third-party that is typically a community development enterprise. The NMTC LLCs are considered VIEs as FTNMC, the holder of the equity investment at risk, does not have the ability to direct the activities that most significantly affect the performance of the entity through voting rights or similar rights. While FTNMC could absorb losses that are significant to the NMTC LLCs as it has a risk of loss for its initial capital contributions, the managing members are considered the primary beneficiaries as managerial functions give them the power to direct the activities that most significantly impact the NMTC LLCs’ economic performance and the managing members are exposed to all losses beyond FTNMC’s initial capital contributions. FTHC also makes equity investments as a limited partner or non-managing member in entities that receive Historic Tax Credits pursuant to Section 47 of the Internal Revenue Code. The purpose of these entities is the rehabilitation of historic buildings with the tax credits provided to incent private investment in the historic cores of cities and towns. These entities are considered VIEs as FTHC, the holder of the equity investment at risk, does not have the ability to direct the activities that most significantly affect the performance of the entity through voting rights or similar rights. FTHC could absorb losses that are significant to the entities as it has a risk of loss for its capital contributions and funding commitments to each partnership. The managing members are considered the primary beneficiaries as managerial functions give them the power to direct the activities that most significantly impact the entities’ economic performance and the managing members are exposed to all losses beyond FTHC’s initial capital contributions and funding commitments. Small Issuer Trust Preferred Holdings. FTBNA holds variable interests in trusts which have issued mandatorily redeemable preferred capital securities (“trust preferreds”) for smaller banking and insurance enterprises. FTBNA has no voting rights for the trusts’ activities. The trusts’ only assets are junior subordinated debentures of the issuing enterprises. The creditors of the trusts hold no recourse to the assets of FTBNA. These trusts meet the definition of a VIE as the holders of the equity investment at risk do not have the power through voting rights, or similar rights, to direct the activities that most significantly impact the trusts’ economic performance. Based on the nature of the trusts’ activities and the size of FTBNA’s holdings, FTBNA could potentially receive benefits or absorb losses that are significant to the trusts regardless of whether a majority of a trust’s securities are held by FTBNA. However, since FTBNA is solely a holder of the trusts’ securities, it has no rights which would give it the power to direct the activities that most significantly impact the trusts’ economic performance and thus it is not considered the primary beneficiary of the trusts. FTBNA has no contractual requirements to provide financial support to the trusts. On-Balance Sheet Trust Preferred Securitization. In 2007, FTBNA executed a securitization of certain small issuer trust preferreds for which the underlying trust meets the definition of a VIE as the holders of the equity investment at risk do not have the power through voting rights, or similar rights, to direct the activities that most significantly impact the entity’s economic performance. FTBNA could potentially receive benefits or absorb losses that are significant to the trust based on the size and priority of the interests it retained in the securities issued by the trust. However, since FTBNA did not retain servicing or other decision making rights, FTBNA is not the primary beneficiary as it does not have the power to direct the activities that most significantly impact the trust’s economic performance. Accordingly, FTBNA has accounted for the funds received through the securitization as a term borrowing in its Consolidated Condensed Statements of Condition. FTBNA has no contractual requirements to provide financial support to the trust. Proprietary Trust Preferred Issuances. FHN previously issued junior subordinated debt to First Tennessee Capital II (“Capital II”). Capital II was considered a VIE as FHN’s capital contributions to this trust were not considered “at risk” in evaluating whether the holders of the equity investments at risk in the trust had the power through voting rights, or similar rights, to direct the activities that most significantly impacted the entity’s economic performance. FHN was not the trust’s primary beneficiary as FHN’s capital contributions to the trust were not considered variable interests as they were not “at risk”. Consequently, Capital II was not consolidated by FHN. In third quarter 2015 FHN redeemed its junior subordinated debt, and as a result Capital II redeemed its 6.30 percent Capital Securities, Series B, and the trust was terminated. Proprietary Residential Mortgage Securitizations. FHN holds variable interests in proprietary residential mortgage securitization trusts it established prior to 2008 as a source of liquidity for its mortgage banking operations. Except for recourse due to breaches of representations and warranties made by FHN in connection with the sale of the loans to the trusts, the creditors of the trusts hold no recourse to the assets of FHN. Additionally, FHN has no contractual requirements to provide financial support to the trusts. Based on their restrictive nature, the trusts are considered VIEs as the holders of equity at risk do not have the power through voting rights, or similar rights, to direct the activities that most significantly impact the trusts’ economic performance. While FHN is assumed to have the power as servicer to most significantly impact the activities of such VIEs, in situations where FHN does not have the ability to participate in significant portions of a securitization trust’s cash flows FHN is not considered the primary beneficiary of the trust. Therefore, these trusts are not consolidated by FHN. Holdings & Short Positions in Agency Mortgage-Backed Securities. FHN holds securities issued by various Agency securitization trusts. Based on their restrictive nature, the trusts meet the definition of a VIE since the holders of the equity investments at risk do not have the power through voting rights, or similar rights, to direct the activities that most significantly impact the entities’ economic performance. FHN could potentially receive benefits or absorb losses that are significant to the trusts based on the nature of the trusts’ activities and the size of FHN’s holdings. However, FHN is solely a holder of the trusts’ securities and does not have the power to direct the activities that most significantly impact the trusts’ economic performance, and is not considered the primary beneficiary of the trusts. FHN has no contractual requirements to provide financial support to the trusts. Commercial Loan Troubled Debt Restructurings. For certain troubled commercial loans, FTBNA restructures the terms of the borrower’s debt in an effort to increase the probability of receipt of amounts contractually due. Following a troubled debt restructuring, the borrower entity typically meets the definition of a VIE as the initial determination of whether an entity is a VIE must be reconsidered as events have proven that the entity’s equity is not sufficient to permit it to finance its activities without additional subordinated financial support or a restructuring of the terms of its financing. As FTBNA does not have the power to direct the activities that most significantly impact such troubled commercial borrowers’ operations, it is not considered the primary beneficiary even in situations where, based on the size of the financing provided, FTBNA is exposed to potentially significant benefits and losses of the borrowing entity. FTBNA has no contractual requirements to provide financial support to the borrowing entities beyond certain funding commitments established upon restructuring of the terms of the debt that allows for preparation of the underlying collateral for sale. Sale Leaseback Transaction. In fourth quarter 2015, FTB entered into an agreement with a single asset leasing entity for the sale and lease back of an office building. In conjunction with this transaction, FTB loaned funds to a related party of the buyer that were used for the purchase price of the building. FTB also entered into a construction loan agreement with the single asset entity for renovation of the building. Since this transaction did not qualify as a sale, it is being accounted for using the deposit method which creates a net asset or liability for all cash flows between FTB and the buyer. The buyer-lessor in this transaction meets the definition of a VIE as it does not have sufficient equity at risk since FTB is providing the funding for the purchase and renovation. A related party of the buyer-lessor has the power to direct the activities that most significantly impact the operations and could potentially receive benefits or absorb losses that are significant to the transactions, making it the primary beneficiary. Therefore, FTB does not consolidate the leasing entity.
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Derivatives |
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Derivatives [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Note 14 – Derivatives In the normal course of business, FHN utilizes various financial instruments (including derivative contracts and credit-related agreements) through its fixed income and risk management operations, as part of its risk management strategy and as a means to meet customers’ needs. Derivative instruments are subject to credit and market risks in excess of the amount recorded on the balance sheet as required by GAAP. The contractual or notional amounts of these financial instruments do not necessarily represent the amount of credit or market risk. However, they can be used to measure the extent of involvement in various types of financial instruments. Controls and monitoring procedures for these instruments have been established and are routinely reevaluated. The Asset/Liability Committee (“ALCO”) controls, coordinates, and monitors the usage and effectiveness of these financial instruments. Credit risk represents the potential loss that may occur if a party to a transaction fails to perform according to the terms of the contract. The measure of credit exposure is the replacement cost of contracts with a positive fair value. FHN manages credit risk by entering into financial instrument transactions through national exchanges, primary dealers or approved counterparties, and by using mutual margining and master netting agreements whenever possible to limit potential exposure. FHN also maintains collateral posting requirements with certain counterparties to limit credit risk. On June 30, 2016 and 2015, respectively, FHN had $90.0 million and $80.6 million of cash receivables and $42.8 million and $41.1 million of cash payables related to collateral posting under master netting arrangements, inclusive of collateral posted related to contracts with adjustable collateral posting thresholds and over collateralized positions, with derivative counterparties. With exchange-traded contracts, the credit risk is limited to the clearinghouse used. For non-exchange traded instruments, credit risk may occur when there is a gain in the fair value of the financial instrument and the counterparty fails to perform according to the terms of the contract and/or when the collateral proves to be of insufficient value. See additional discussion regarding master netting agreements and collateral posting requirements later in this note under the heading “Master Netting and Similar Agreements.” Market risk represents the potential loss due to the decrease in the value of a financial instrument caused primarily by changes in interest rates or the prices of debt instruments. FHN manages market risk by establishing and monitoring limits on the types and degree of risk that may be undertaken. FHN continually measures this risk through the use of models that measure value-at-risk and earnings-at-risk. Derivative Instruments. FHN enters into various derivative contracts both in a dealer capacity to facilitate customer transactions and as a risk management tool. Where contracts have been created for customers, FHN enters into upstream transactions with dealers to offset its risk exposure. Contracts with dealers that require central clearing are novated to a clearing agent who becomes FHN's counterparty. Derivatives are also used as a risk management tool to hedge FHN’s exposure to changes in interest rates or other defined market risks. Forward contracts are over-the-counter contracts where two parties agree to purchase and sell a specific quantity of a financial instrument at a specified price, with delivery or settlement at a specified date. Futures contracts are exchange-traded contracts where two parties agree to purchase and sell a specific quantity of a financial instrument at a specified price, with delivery or settlement at a specified date. Interest rate option contracts give the purchaser the right, but not the obligation, to buy or sell a specified quantity of a financial instrument, at a specified price, during a specified period of time. Caps and floors are options that are linked to a notional principal amount and an underlying indexed interest rate. Interest rate swaps involve the exchange of interest payments at specified intervals between two parties without the exchange of any underlying principal. Swaptions are options on interest rate swaps that give the purchaser the right, but not the obligation, to enter into an interest rate swap agreement during a specified period of time. Trading Activities FHN’s fixed income segment trades U.S. Treasury, U.S. Agency, mortgage-backed, corporate and municipal fixed income securities, and other securities for distribution to customers. When these securities settle on a delayed basis, they are considered forward contracts. Fixed income also enters into interest rate contracts, including caps, swaps, and floors, for its customers. In addition, fixed income enters into futures and option contracts to economically hedge interest rate risk associated with a portion of its securities inventory. These transactions are measured at fair value, with changes in fair value recognized currently in fixed income noninterest income. Related assets and liabilities are recorded on the Consolidated Condensed Statements of Condition as Derivative assets and Derivative liabilities. The FTN Financial Risk Committee and the Credit Risk Management Committee collaborate to mitigate credit risk related to these transactions. Credit risk is controlled through credit approvals, risk control limits, and ongoing monitoring procedures. Total trading revenues were $69.3 million and $46.7 million for the three months ended June 30, 2016 and 2015, respectively, and $126.9 million and $100.2 million for the six months ended June 30, 2016 and 2015. Trading revenues are inclusive of both derivative and non-derivative financial instruments, and are included in fixed income noninterest income.
Interest Rate Risk Management FHN’s ALCO focuses on managing market risk by controlling and limiting earnings volatility attributable to changes in interest rates. Interest rate risk exists to the extent that interest-earning assets and interest-bearing liabilities have different maturity or repricing characteristics. FHN uses derivatives, including swaps, caps, options, and collars, that are designed to moderate the impact on earnings as interest rates change. Interest paid or received for swaps utilized by FHN to hedge the fair value of long term debt is recognized as an adjustment of the interest expense of the liabilities whose risk is being managed. FHN’s interest rate risk management policy is to use derivatives to hedge interest rate risk or market value of assets or liabilities, not to speculate. In addition, FHN has entered into certain interest rate swaps and caps as a part of a product offering to commercial customers that includes customer derivatives paired with upstream offsetting market instruments that, when completed, are designed to mitigate interest rate risk. These contracts do not qualify for hedge accounting and are measured at fair value with gains or losses included in current earnings in Noninterest expense on the Consolidated Condensed Statements of Income. FHN has designated a derivative transaction in a hedging strategy to manage interest rate risk on $400.0 million of senior debt issued by FTBNA which matures in December 2019. This qualifies for hedge accounting under ASC 815-20 using the long-haul method. FHN entered into a pay floating, receive fixed interest rate swap to hedge the interest rate risk of the senior debt. The balance sheet impact of this swap was $12.9 million and $2.3 million in Derivative assets as of June 30, 2016 and 2015, respectively. There was an insignificant level of ineffectiveness related to this hedge. FHN has designated a derivative transaction in a hedging strategy to manage interest rate risk on $500.0 million of senior debt which matures in December 2020. This qualifies for hedge accounting under ASC 815-20 using the long-haul method. FHN entered into a pay floating, receive fixed interest rate swap to hedge the interest rate risk of the senior debt. The balance sheet impact of this swap was $11.6 million in Derivative assets as of June 30, 2016. There was an insignificant level of ineffectiveness related to this hedge. Prior to maturity in April 2016, FHN designated a derivative transaction in a hedging strategy to manage interest rate risk of certain term borrowings totaling $250.0 million. These swaps were accounted for as fair value hedges under the shortcut method. The balance sheet amount of this swap was $9.1 million in Derivative assets on June 30, 2015. Prior to maturity in December 2015, FHN designated a derivative transaction in a hedging strategy to manage interest rate risk on its $500 million noncallable senior debt. This derivative qualified for hedge accounting under ASC 815-20 using the long-haul method. FHN hedged the interest rate risk on this debt using a pay floating, receive fixed interest rate swap. The balance sheet amount of this swap was $4.5 million in Derivative assets as of June 30, 2015. There was no ineffectiveness related to this hedge. Prior to redemption in third quarter 2015, FHN designated derivative transactions in hedging strategies to manage interest rate risk on subordinated debt related to its trust preferred securities. These qualified for hedge accounting under ASC 815-20 using the long-haul method. FHN hedged the interest rate risk of the subordinated debt totaling $200 million using a pay floating, receive fixed interest rate swap. The balance sheet amount of this swap was $5.1 million in Derivative liabilities as of June 30, 2015. There was no ineffectiveness related to this hedge. In third quarter 2015, FHN called its junior subordinated debt, which triggered a call of the trust preferred securities, and removed all associated hedges. The redemption resulted in a gain on extinguishment of debt of $5.8 million.
In first quarter 2016, FHN entered into a pay floating, receive fixed interest rate swap in a hedging strategy to manage its exposure to the variability in cash flows related to the interest payments for the following five years on $250 million principal of debt instruments, which primarily consist of held-to-maturity trust preferred loans that have variable interest payments based on LIBOR. This qualifies for hedge accounting as a cash flow hedge under ASC 815-20. Changes in the fair value of this derivative are recorded as a component of AOCI, to the extent that the hedge relationship is effective. Amounts are reclassified from AOCI to earnings as the hedged cash flows affect earnings. FTB measures ineffectiveness using the Hypothetical Derivative Method. To the extent that any ineffectiveness exists in the hedge relationships, the amounts are recorded in current period earnings
(a) Includes approximately $1.7 million expected to be reclassified into earnings in the next twelve months. FHN hedges held-to-maturity trust preferred loans which have an initial fixed rate term before conversion to a floating rate. FHN has entered into pay fixed, receive floating interest rate swaps to hedge the interest rate risk associated with this initial term. Interest paid or received for these swaps is recognized as an adjustment of the interest income of the assets whose risk is being hedged. Basis adjustments remaining at the end of the hedge term are being amortized as an adjustment to interest income over the remaining life of the loans. Gains or losses are included in Other income and commissions on the Consolidated Condensed Statements of Income.
Other Derivatives In conjunction with the sales of a portion of its Visa Class B shares, FHN and the purchaser entered into derivative transactions whereby FHN will make or receive cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. As of June 30, 2016 and 2015, the derivative liabilities associated with the sales of Visa Class B shares were $6.8 million and $4.8 million, respectively. See the Visa Matters section of Note 10 – Contingencies and Other Disclosures for more information regarding FHN’s Visa shares. FHN utilizes cross currency swaps and cross currency interest rate swaps to economically hedge its exposure to foreign currency risk and interest rate risk associated with non-U.S. dollar denominated loans. As of June 30, 2016 and 2015, these loans were valued at $1.5 million and $3.5 million, respectively. The balance sheet amount and the gains/losses associated with these derivatives were not significant. Master Netting and Similar Agreements As previously discussed, FHN uses master netting agreements, mutual margining agreements and collateral posting requirements to minimize credit risk on derivative contracts. Master netting and similar agreements are used when counterparties have multiple derivatives contracts that allow for a “right of setoff,” meaning that a counterparty may net offsetting positions and collateral with the same counterparty under the contract to determine a net receivable or payable. The following discussion provides an overview of these arrangements which may vary due to the derivative type and market in which a derivative transaction is executed. Interest rate derivatives are subject to agreements consistent with standard agreement forms of the International Swap and Derivatives Association (“ISDA”). Currently, all interest rate derivative contracts are entered into as over-the-counter transactions and collateral posting requirements are based on the net asset or liability position with each respective counterparty. For contracts that require central clearing, novation to a counterparty with access to a clearinghouse occurs and collateral is posted. Cash collateral received (posted) for interest rate derivatives is recognized as a liability (asset) on FHN’s Consolidated Condensed Statements of Condition. Interest rate derivatives with customers that are smaller financial institutions typically require posting of collateral by the counterparty to FHN. This collateral is subject to a threshold with daily adjustments based upon changes in the level or fair value of the derivative position. Positions and related collateral can be netted in the event of default. Collateral pledged by a counterparty is typically cash or securities. The securities pledged as collateral are not recognized within FHN's Consolidated Condensed Statements of Condition. Interest rate derivatives associated with lending arrangements share the collateral with the related loan(s). The derivative and loan positions may be netted in the event of default. For disclosure purposes, the entire collateral amount is allocated to the loan. Interest rate derivatives with larger financial institutions entered into prior to required central clearing typically contain provisions whereby the collateral posting thresholds under the agreements adjust based on the credit ratings of both counterparties. If the credit rating of FHN and/or FTBNA is lowered, FHN could be required to post additional collateral with the counterparties. Conversely, if the credit rating of FHN and/or FTBNA is increased, FHN could have collateral released and be required to post less collateral in the future. Also, if a counterparty's credit ratings were to decrease, FHN and/or FTBNA could require the posting of additional collateral; whereas if a counterparty's credit ratings were to increase, the counterparty could require the release of excess collateral. Collateral for these arrangements is adjusted daily based on changes in the net fair value position with each counterparty. The net fair value, determined by individual counterparty, of all derivative instruments with adjustable collateral posting thresholds was $95.0 million of assets and $81.3 million of liabilities on June 30, 2016, and $72.5 million of assets and $71.6 million of liabilities on June 30, 2015. As of June 30, 2016 and 2015, FHN had received collateral of $168.0 million and $144.2 million and posted collateral of $81.3 million and $71.9 million, respectively, in the normal course of business related to these agreements. Certain agreements entered into prior to required central clearing also contain accelerated termination provisions, inclusive of the right of offset, if a counterparty’s credit rating falls below a specified level. If a counterparty's debt rating (including FHN's and FTBNA’s) were to fall below these minimums, these provisions would be triggered, and the counterparties could terminate the agreements and require immediate settlement of all derivative contracts under the agreements. The net fair value, determined by individual counterparty, of all derivative instruments with credit-risk-related contingent accelerated termination provisions was $94.6 million of assets and $30.7 million of liabilities on June 30, 2016, and $72.5 million of assets and $17.0 million of liabilities on June 30, 2015. As of June 30, 2016 and 2015, FHN had received collateral of $168.0 million and $144.2 million and posted collateral of $33.2 million and $23.3 million, respectively, in the normal course of business related to these contracts. FHN’s fixed income segment buys and sells various types of securities for its customers. When these securities settle on a delayed basis, they are considered forward contracts, and are generally not subject to master netting agreements. For futures and options, FHN transacts through a third party, and the transactions are subject to margin and collateral maintenance requirements. In the event of default, open positions can be offset along with the associated collateral. For this disclosure, FHN considers the impact of master netting and other similar agreements which allow FHN to settle all contracts with a single counterparty on a net basis and to offset the net derivative asset or liability position with the related securities and cash collateral. The application of the collateral cannot reduce the net derivative asset or liability position below zero, and therefore any excess collateral is not reflected in the tables below.
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Master Netting And Similar Agreements |
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Master Netting Agreements And Similar Arrangements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Master Netting Agreements And Similar Arrangements | Note 15 –Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing and Lending Transactions For repurchase, reverse repurchase and securities borrowing and lending transactions, FHN and each counterparty have the ability to offset all open positions and related collateral in the event of default. Due to the nature of these transactions, the value of the collateral for each transaction approximates the value of the corresponding receivable or payable. For repurchase agreements within FHN’s fixed income business, transactions are collateralized by securities which are delivered on the settlement date and are maintained throughout the term of the transaction. For FHN’s repurchase agreements through banking activities, securities are typically pledged at the time of the transaction and not released until settlement. For asset positions, the collateral is not included on FHN’s Consolidated Condensed Statements of Condition. For liability positions, securities collateral pledged by FHN is generally represented within FHN’s trading or available-for-sale securities portfolios. For this disclosure, FHN considers the impact of master netting and other similar agreements that allow FHN to settle all contracts with a single counterparty on a net basis and to offset the net asset or liability position with the related securities collateral. The application of the collateral cannot reduce the net asset or liability position below zero, and therefore any excess collateral is not reflected in the tables below. The following table provides a detail of Securities purchased under agreements to resell as presented on the Consolidated Condensed Statements of Condition and collateral pledged by counterparties as of June 30:
The following table provides a detail of Securities sold under agreements to repurchase as presented on the Consolidated Condensed Statements of Condition and collateral pledged by FHN as of June 30:
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Fair Value Of Assets And Liabilities |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Assets And Liabilities | Note 16 – Fair Value of Assets & Liabilities FHN groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. This hierarchy requires FHN to maximize the use of observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Each fair value measurement is placed into the proper level based on the lowest level of significant input. These levels are:
Transfers between fair value levels are recognized at the end of the fiscal quarter in which the associated change in inputs occurs.
Nonrecurring Fair Value Measurements From time to time, FHN may be required to measure certain other financial assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of LOCOM accounting or write-downs of individual assets. For assets measured at fair value on a nonrecurring basis which were still held on the balance sheet at June 30, 2016 and 2015, respectively, the following tables provide the level of valuation assumptions used to determine each adjustment, the related carrying value, and the fair value adjustments recorded during the respective periods.
In first quarter 2016, FHN’s Regional Banking segment recognized $3.7 million of impairments on long-lived assets associated with efforts to more efficiently utilize its bank branch locations. The affected branch locations represented a mixture of owned and leased sites. The fair values of owned sites were determined using estimated sales prices from appraisals less estimated costs to sell. The fair values of leased sites were determined using a discounted cash flow approach, based on the revised estimated useful lives of the related assets. Both measurement methodologies are considered Level 3 valuations.
Trading securities-mortgage. Prepayment rates and credit spreads (part of the discount rate) are significant unobservable inputs used in the fair value measurement of FHN’s mortgage trading securities which include interest-only strips and principal-only strips. Subordinated bonds were also included in mortgage trading securities prior to their payoff in first quarter 2016. Increases in prepayment rates and credit spreads in isolation would result in significantly lower fair value measurements for the associated assets. Conversely, decreases in prepayment rates and credit spreads in isolation would result in significantly higher fair value measurements for the associated assets. Generally, when market interest rates decline and other factors favorable to prepayments occur, there is a corresponding increase in prepayment rates as customers are expected to refinance existing mortgages under more favorable interest rate terms. Generally, changes in discount rates directionally mirror the changes in market interest rates. FHN’s Corporate Accounting Department monitors changes in the fair value of these securities monthly. Loans held-for-sale. Foreclosure losses and prepayment rates are significant unobservable inputs used in the fair value measurement of FHN’s residential real estate loans held-for-sale. Loss severity trends are also assessed to evaluate the reasonableness of fair value estimates resulting from discounted cash flows methodologies as well as to estimate fair value for newly repurchased loans and loans that are near foreclosure. Significant increases (decreases) in any of these inputs in isolation would result in significantly lower (higher) fair value measurements. Draw rates are an additional significant unobservable input for HELOCs. Increases (decreases) in the draw rate estimates for HELOCs would increase (decrease) their fair value. All observable and unobservable inputs are re-assessed quarterly. Fair value measurements are reviewed at least quarterly by FHN’s Corporate Accounting Department. Derivative liabilities. In conjunction with the sales of portions of its Visa Class B shares, FHN and the purchaser entered into derivative transactions whereby FHN will make, or receive, cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. FHN uses a discounted cash flow methodology in order to estimate the fair value of FHN’s derivative liabilities associated with its prior sales of Visa Class B shares. The methodology includes estimation of both the resolution amount for Visa’s Covered Litigation matters as well as the length of time until the resolution occurs. Significant increases (decreases) in either of these inputs in isolation would result in significantly higher (lower) fair value measurements for the derivative liabilities. Additionally, FHN performs a probability weighted multiple resolution scenario to calculate the estimated fair value of these derivative liabilities. Assignment of higher (lower) probabilities to the larger potential resolution scenarios would result in an increase (decrease) in the estimated fair value of the derivative liabilities. Since this estimation process requires application of judgment in developing significant unobservable inputs used to determine the possible outcomes and the probability weighting assigned to each scenario, these derivatives have been classified within Level 3 in fair value measurements disclosures. The valuation inputs and process are discussed with senior and executive management when significant events affecting the estimate of fair value occur. Inputs are compared to information obtained from the public issuances and filings of Visa, Inc. as well as public information released by other participants in the applicable litigation matters. Loans, net of unearned income and Real estate acquired by foreclosure. Collateral-dependent loans and Real estate acquired by foreclosure are primarily valued using appraisals based on sales of comparable properties in the same or similar markets. Multiple appraisal firms are utilized to ensure that estimated values are consistent between firms. This process occurs within FHN’s Credit Risk Management (commercial) and Default Servicing functions (primarily consumer) and the Credit Risk Management Committee reviews valuation methodologies and loss information for reasonableness. Back testing is performed during the year through comparison to ultimate disposition values and is reviewed quarterly within the Credit Risk Management function. Other collateral (receivables, inventory, equipment, etc.) is valued through borrowing base certificates, financial statements and/or auction valuations. These valuations are discounted based on the quality of reporting, knowledge of the marketability/collectability of the collateral and historical disposition rates. Other assets – tax credit investments. The estimated fair value of tax credit investments accounted for under the equity method is generally determined in relation to the yield (i.e., future tax credits to be received) an acquirer of these investments would expect in relation to the yields experienced on current new issue and/or secondary market transactions. Thus, as tax credits are recognized, the future yield to a market participant is reduced, resulting in consistent impairment of the individual investments. Individual investments are reviewed for impairment quarterly, which may include the consideration of additional marketability discounts related to specific investments which typically includes consideration of the underlying property’s appraised value. Unusual valuation adjustments and the associated triggering events are discussed with senior and executive management when appropriate. A portfolio review is conducted annually, with the assistance of a third party, to assess the reasonableness of current valuations. Fair Value Option FHN elected the fair value option on a prospective basis for almost all types of mortgage loans originated for sale purposes under the Financial Instruments Topic (“ASC 825”). FHN determined that the election reduced certain timing differences and better matched changes in the value of such loans with changes in the value of derivatives used as economic hedges for these assets at the time of election. Repurchased loans are recognized within loans held-for-sale at fair value at the time of repurchase, which includes consideration of the credit status of the loans and the estimated liquidation value. FHN has elected to continue recognition of these loans at fair value in periods subsequent to reacquisition. Due to the credit-distressed nature of the vast majority of repurchased loans and the related loss severities experienced upon repurchase, FHN believes that the fair value election provides a more timely recognition of changes in value for these loans that occur subsequent to repurchase. Absent the fair value election, these loans would be subject to valuation at the LOCOM value, which would prevent subsequent values from exceeding the initial fair value, determined at the time of repurchase, but would require recognition of subsequent declines in value. Thus, the fair value election provides for a more timely recognition of any potential future recoveries in asset values while not affecting the requirement to recognize subsequent declines in value.
For the three months ended June 30, 2016, and 2015, the amounts for residential real estate loans held-for-sale include gains of $.2 million and $.3 million, respectively, in pretax earnings that are attributable to changes in instrument-specific credit risk. For the six months ended June 30, 2016, and 2015, the amounts for loans held-for-sale include gains of $.3 million and $.7 million, respectively, in pretax earnings that are attributable to changes in instrument-specific credit risk. The portion of the fair value adjustments related to credit risk was determined based on estimated default rates and estimated loss severities. Interest income on residential real estate loans held-for-sale measured at fair value is calculated based on the note rate of the loan and is recorded in the interest income section of the Consolidated Condensed Statements of Income as interest on loans held-for-sale. Determination of Fair Value In accordance with ASC 820-10-35, fair values are based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following describes the assumptions and methodologies used to estimate the fair value of financial instruments recorded at fair value in the Consolidated Condensed Statements of Condition and for estimating the fair value of financial instruments for which fair value is disclosed under ASC 825-10-50. Short-term financial assets. Federal funds sold, securities purchased under agreements to resell, and interest bearing deposits with other financial institutions and the Federal Reserve are carried at historical cost. The carrying amount is a reasonable estimate of fair value because of the relatively short time between the origination of the instrument and its expected realization. Trading securities and trading liabilities. Trading securities and trading liabilities are recognized at fair value through current earnings. Trading inventory held for broker-dealer operations is included in trading securities and trading liabilities. Broker-dealer long positions are valued at bid price in the bid-ask spread. Short positions are valued at the ask price. Inventory positions are valued using observable inputs including current market transactions, LIBOR and U.S. treasury curves, credit spreads, and consensus prepayment speeds. Trading loans are valued using observable inputs including current market transactions, swap rates, mortgage rates, and consensus prepayment speeds. Trading securities also include retained interests in prior securitizations that qualify as financial assets, which include interest-only strips and principal-only strips. Subordinated bonds were included in mortgage trading securities prior to payoff in first quarter 2016. FHN uses inputs including yield curves, credit spreads, and prepayment speeds to determine the fair value of interest-only and principal-only strips. Subordinated bonds are bonds with junior priority and were valued using an internal model which included contractual terms, frequency and severity of loss (credit spreads), prepayment speeds of the underlying collateral, and the yield that a market participant would require. Securities available-for-sale. Securities available-for-sale includes the investment portfolio accounted for as available-for-sale under ASC 320-10-25, federal bank stock holdings, and short-term investments in mutual funds. Valuations of available-for-sale securities are performed using observable inputs obtained from market transactions in similar securities. Typical inputs include LIBOR and U.S. treasury curves, consensus prepayment estimates, and credit spreads. When available, broker quotes are used to support these valuations. Prior to disposition in fourth quarter 2015, certain government agency debt obligations with limited trading activity were valued using a discounted cash flow model that incorporated a combination of observable and unobservable inputs. Primary observable inputs included contractual cash flows and the treasury curve. Significant unobservable inputs included estimated trading spreads and estimated prepayment speeds. Investments in the stock of the Federal Reserve Bank and Federal Home Loan Banks are recognized at historical cost in the Consolidated Condensed Statements of Condition which is considered to approximate fair value. Short-term investments in mutual funds are measured at the funds’ reported closing net asset values. Investments in equity securities are valued using quoted market prices. Securities held-to-maturity. Securities held-to-maturity reflects debt securities for which management has the positive intent and ability to hold to maturity. To the extent possible, valuations of held-to-maturity securities are performed using observable inputs obtained from market transactions in similar securities. Typical inputs include LIBOR and U.S. treasury curves and credit spreads. Debt securities with limited trading activity are valued using a discounted cash flow model that incorporates a combination of observable and unobservable inputs. Primary observable inputs include contractual cash flows, the treasury curve and credit spreads from similar instruments. Significant unobservable inputs include estimated credit spreads for individual issuers and instruments as well as prepayment speeds, as applicable. Loans held-for-sale. Residential real estate loans held-for-sale are valued using current transaction prices and/or values on similar assets when available. Uncommitted bids may be adjusted based on other available market information. For all other loans FHN determines the fair value of residential real estate loans held-for-sale using a discounted cash flow model which incorporates both observable and unobservable inputs. Inputs include current mortgage rates for similar products, estimated prepayment rates, foreclosure losses, and various loan performance measures (delinquency, LTV, credit score). Adjustments for delinquency and other differences in loan characteristics are typically reflected in the model’s discount rates. Loss severity trends and the value of underlying collateral are also considered in assessing the appropriate fair value for severely delinquent loans and loans in foreclosure. The valuation of HELOCs also incorporates estimates of loan draw rates as well as estimated cancellation rates for loans expected to become delinquent. Loans held-for-sale also include loans made by the Small Business Administration (“SBA”), which are accounted for at LOCOM. The fair value of SBA loans is determined using an expected cash flow model that utilizes observable inputs such as the spread between LIBOR and prime rates, consensus prepayment speeds, and the treasury curve. The fair value of other non-residential real estate loans held-for-sale is approximated by their carrying values based on current transaction values. Loans, net of unearned income. Loans, net of unearned income are recognized at the amount of funds advanced, less charge-offs and an estimation of credit risk represented by the allowance for loan losses. The fair value estimates for disclosure purposes differentiate loans based on their financial characteristics, such as product classification, vintage, loan category, pricing features, and remaining maturity. The fair value of floating rate loans is estimated through comparison to recent market activity in loans of similar product types, with adjustments made for differences in loan characteristics. In situations where market pricing inputs are not available, fair value is considered to approximate book value due to the monthly repricing for commercial and consumer loans, with the exception of floating rate 1-4 family residential mortgage loans which reprice annually and will lag movements in market rates. The fair value for floating rate 1-4 family mortgage loans is calculated by discounting future cash flows to their present value. Future cash flows are discounted to their present value by using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same time period. Prepayment assumptions based on historical prepayment speeds and industry speeds for similar loans have been applied to the floating rate 1-4 family residential mortgage portfolio. The fair value of fixed rate loans is estimated through comparison to recent market activity in loans of similar product types, with adjustments made for differences in loan characteristics. In situations where market pricing inputs are not available, fair value is estimated by discounting future cash flows to their present value. Future cash flows are discounted to their present value by using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same time period. Prepayment assumptions based on historical prepayment speeds and industry speeds for similar loans have been applied to the fixed rate mortgage and installment loan portfolios. For all loan portfolio classes, adjustments are made to reflect liquidity or illiquidity of the market. Such adjustments reflect discounts that FHN believes are consistent with what a market participant would consider in determining fair value given current market conditions. Individually impaired loans are measured using either a discounted cash flow methodology or the estimated fair value of the underlying collateral less costs to sell, if the loan is considered collateral-dependent. In accordance with accounting standards, the discounted cash flow analysis utilizes the loan’s effective interest rate for discounting expected cash flow amounts. Thus, this analysis is not considered a fair value measurement in accordance with ASC 820. However, the results of this methodology are considered to approximate fair value for the applicable loans. Expected cash flows are derived from internally-developed inputs primarily reflecting expected default rates on contractual cash flows. For loans measured using the estimated fair value of collateral less costs to sell, fair value is estimated using appraisals of the collateral. Collateral values are monitored and additional write-downs are recognized if it is determined that the estimated collateral values have declined further. Estimated costs to sell are based on current amounts of disposal costs for similar assets. Carrying value is considered to reflect fair value for these loans. Mortgage servicing rights. FHN recognizes all classes of MSR at fair value. In third quarter 2013, FHN agreed to sell substantially all of its remaining legacy mortgage servicing. Since that time FHN has used the price in the definitive agreement, as adjusted for the portion of pricing that was not specific to the MSR, as a third-party pricing source in the valuation of the MSR. Derivative assets and liabilities. The fair value for forwards and futures contracts is based on current transactions involving identical securities. Futures contracts are exchange-traded and thus have no credit risk factor assigned as the risk of non-performance is limited to the clearinghouse used. Valuations of other derivatives (primarily interest rate related swaps, swaptions, caps, and collars) are based on inputs observed in active markets for similar instruments. Typical inputs include the LIBOR curve, Overnight Indexed Swap ("OIS") curve, option volatility, and option skew. In measuring the fair value of these derivative assets and liabilities, FHN has elected to consider credit risk based on the net exposure to individual counterparties. Credit risk is mitigated for these instruments through the use of mutual margining and master netting agreements as well as collateral posting requirements. Any remaining credit risk related to interest rate derivatives is considered in determining fair value through evaluation of additional factors such as customer loan grades and debt ratings. Foreign currency related derivatives also utilize observable exchange rates in the determination of fair value. The determination of fair value for FHN’s derivative liabilities associated with its prior sales of Visa Class B shares are classified within Level 3 in the fair value measurements disclosure as previously discussed in the unobservable inputs discussion. Real estate acquired by foreclosure. Real estate acquired by foreclosure primarily consists of properties that have been acquired in satisfaction of debt. These properties are carried at the lower of the outstanding loan amount or estimated fair value less estimated costs to sell the real estate. Estimated fair value is determined using appraised values with subsequent adjustments for deterioration in values that are not reflected in the most recent appraisal. Nonearning assets. For disclosure purposes, nonearning financial assets include cash and due from banks, accrued interest receivable, and fixed income receivables. Due to the short-term nature of cash and due from banks, accrued interest receivable, and fixed income receivables, the fair value is approximated by the book value. Other assets. For disclosure purposes, other assets consist of tax credit investments and deferred compensation assets that are considered financial assets. Tax credit investments accounted for under the equity method are written down to estimated fair value quarterly based on the estimated value of the associated tax credits which incorporates estimates of required yield for hypothetical investors. The fair value of all other tax credit investments is estimated using recent transaction information with adjustments for differences in individual investments. Deferred compensation assets are recognized at fair value, which is based on quoted prices in active markets. Defined maturity deposits. The fair value of these deposits is estimated by discounting future cash flows to their present value. Future cash flows are discounted by using the current market rates of similar instruments applicable to the remaining maturity. For disclosure purposes, defined maturity deposits include all certificates of deposit and other time deposits. Undefined maturity deposits. In accordance with ASC 825, the fair value of these deposits is approximated by the book value. For the purpose of this disclosure, undefined maturity deposits include demand deposits, checking interest accounts, savings accounts, and money market accounts. Short-term financial liabilities. The fair value of federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings are approximated by the book value. The carrying amount is a reasonable estimate of fair value because of the relatively short time between the origination of the instrument and its expected realization. Term borrowings. The fair value of term borrowings is based on quoted market prices or dealer quotes for the identical liability when traded as an asset. When pricing information for the identical liability is not available, relevant prices for similar debt instruments are used with adjustments being made to the prices obtained for differences in characteristics of the debt instruments. If no relevant pricing information is available, the fair value is approximated by the present value of the contractual cash flows discounted by the investor’s yield which considers FHN’s and FTBNA’s debt ratings. Other noninterest-bearing liabilities. For disclosure purposes, other noninterest-bearing financial liabilities include accrued interest payable and fixed income payables. Due to the short-term nature of these liabilities, the book value is considered to approximate fair value. Loan commitments. Fair values of these commitments are based on fees charged to enter into similar agreements taking into account the remaining terms of the agreements and the counterparties’ credit standing. Other commitments. Fair values of these commitments are based on fees charged to enter into similar agreements. The following fair value estimates are determined as of a specific point in time utilizing various assumptions and estimates. The use of assumptions and various valuation techniques, as well as the absence of secondary markets for certain financial instruments, reduces the comparability of fair value disclosures between financial institutions. Due to market illiquidity, the fair values for loans, net of unearned income, loans held-for-sale, and term borrowings as of June 30, 2016 and 2015, involve the use of significant internally-developed pricing assumptions for certain components of these line items. The assumptions and valuations utilized for this disclosure are considered to reflect inputs that market participants would use in transactions involving these instruments as of the measurement date. The valuations of legacy assets, particularly consumer loans within the non-strategic segment and TRUP loans, are influenced by changes in economic conditions since origination and risk perceptions of the financial sector. These considerations affect the estimate of a potential acquirer’s cost of capital and cash flow volatility assumptions from these assets and the resulting fair value measurements may depart significantly from our internal estimates of the intrinsic value of these assets. Assets and liabilities that are not financial instruments have not been included in the following table such as the value of long-term relationships with deposit and trust customers, premises and equipment, goodwill and other intangibles, deferred taxes, and certain other assets and other liabilities. Additionally, these measurements are solely for financial instruments as of the measurement date and do not consider the earnings potential of our various business lines. Accordingly, the total of the fair value amounts does not represent, and should not be construed to represent, the underlying value of the Company. The following tables summarize the book value and estimated fair value of financial instruments recorded in the Consolidated Condensed Statements of Condition as well as unfunded loan commitments and stand by and other commitments as of June 30, 2016 and 2015.
Certain previously reported amounts have been reclassified to agree with current presentation.
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Financial Information (Policy) |
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Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis Of Accounting | Basis of Accounting. The unaudited interim consolidated condensed financial statements of First Horizon National Corporation (“FHN”), including its subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America and follow general practices within the industries in which it operates. This preparation requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions are based on information available as of the date of the financial statements and could differ from actual results. In the opinion of management, all necessary adjustments have been made for a fair presentation of financial position and results of operations for the periods presented. These adjustments are of a normal recurring nature unless otherwise disclosed in this Quarterly Report on Form 10-Q. The operating results for the interim 2016 periods are not necessarily indicative of the results that may be expected going forward. For further information, refer to the audited consolidated financial statements in Exhibit 13 to FHN’s Annual Report on Form 10-K for the year ended December 31, 2015. |
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Summary of Accounting Changes | Summary of Accounting Changes. Effective January 1, 2016, FHN early adopted the provisions of ASU 2016-05, “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships”, on a prospective basis. ASU 2016-05 clarifies that a change in the counterparty of a derivative instrument that has been designated as the hedging instrument in an accounting hedge relationship does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. FHN considers the revised guidance to better reflect the nature of hedge accounting relationships by clarifying that, when considered solely, the counterparty is not a critical term in a hedge relationship. Because FHN has applied specific SEC staff guidance for novation (to facilitate central clearing requirements) of derivatives to prior and existing accounting hedge relationships, adoption of ASU 2016-05 had no effect on FHN. Effective January 1, 2016, FHN early adopted the provisions of ASU 2016-06, “Contingent Put and Call Options in Debt Instruments”, which resolves diversity in practice for the bifurcation assessment when a contingent put or call option is embedded within a hybrid debt instrument. ASU 2016-06 clarifies that an entity is not required to assess whether the triggering event is related to interest rate or credit risks when performing the bifurcation analysis. FHN’s existing bifurcation assessment process conforms to the methodology outlined in ASU 2016-06. Effective January 1, 2016, FHN adopted the provisions of ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition in determining expense recognition for the award. Thus, compensation cost is recognized over the requisite service period based on the probability of achievement of the performance condition. Expense is adjusted after the requisite service period for changes in the probability of achievement. The adoption of ASU 2014-12 had no effect on FHN. Effective January 1, 2016, FHN adopted the provisions of ASU 2015-02, “Amendments to the Consolidation Analysis.” ASU 2015-02 revises current consolidation guidance to modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities. ASU 2015-02 also eliminates the presumption that a general partner should consolidate a limited partnership, revises the consolidation analysis for reporting entities that have fee arrangements and related party relationships with variable interest entities, and provides a scope exception for entities with interests in registered money market funds. FHN has evaluated the provisions of ASU 2015-02 on its consolidation assessments and there was not a significant effect upon adoption. Effective January 1, 2016, FHN adopted the provisions of ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented as a direct reduction from the carrying value of that debt liability, consistent with debt discounts. ASU 2015-03 requires application on a retrospective basis, with prior periods revised to reflect the effects of adoption. Consistent with prior requirements, FHN previously classified debt issuance costs within Other assets in the Consolidated Condensed Statements of Condition. The adoption of ASU 2015-03 had no effect on FHN’s recognition of interest expense. The effects of the retrospective application of the change in presentation of debt issuance costs are summarized in the table below.
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Accounting Changes Issued but Not Currently Effective | Accounting Changes Issued but Not Currently Effective In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 does not change revenue recognition for financial instruments. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This is accomplished through a five-step recognition framework involving 1) the identification of contracts with customers, 2) identification of performance obligations, 3) determination of the transaction price, 4) allocation of the transaction price to the performance obligations and 5) recognition of revenue as performance obligations are satisfied. Additionally, qualitative and quantitative information is required for disclosure regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In February 2016, the FASB issued ASU 2016-08, “Principal versus Agent Considerations”, which provides additional guidance on whether an entity should recognize revenue on a gross or net basis, based on which party controls the specified good or service before that good or service is transferred to a customer. In April 2016, the FASB issued ASU 2016-10, “Identifying Performance Obligations and Licensing”, which clarifies the original guidance included in ASU 2014-09 for identification of the goods or services provided to customers and enhances the implementation guidance for licensing arrangements. ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients” was issued in May 2016 to provide additional guidance for the implementation and application of ASU 2014-09. The effective date of these ASUs has been deferred to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016, and associated interim periods. Transition to the new requirements may be made by retroactively revising prior financial statements (with certain practical expedients permitted) or by a cumulative effect through retained earnings. If the latter option is selected, additional disclosures are required for comparability. FHN is evaluating the effects of these ASUs on its revenue recognition practices. In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. If such events or conditions exist, additional disclosures are required and management should evaluate whether its plans sufficiently alleviate the substantial doubt. ASU 2014-15 is effective for the annual period ending after December 15, 2016 and all interim and annual periods thereafter. The provisions of ASU 2014-15 are not anticipated to affect FHN. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 makes several revisions to the accounting, presentation and disclosure for financial instruments. Equity investments (except those accounted for under the equity method or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net income. An entity may elect to measure equity investments that do not have readily determinable market values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar instruments from the same issuer. ASU 2016-01 also requires a qualitative impairment review for equity investments without readily determinable fair values, with measurement at fair value required if impairment is determined to exist. For liabilities for which fair value has been elected, ASU 2016-01 revises current accounting to record the portion of fair value changes resulting from instrument-specific credit risk within other comprehensive income rather than earnings. Additionally, ASU 2016-01 clarifies that the need for a valuation allowance on a deferred tax asset related to available-for-sale securities should be assessed in combination with all other deferred tax assets rather than being assessed in isolation. ASU 2016-01 also makes several changes to existing fair value presentation and disclosure requirements, including a provision that all disclosures must use an exit price concept in the determination of fair value. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. FHN is evaluating the impact of ASU 2016-01 on its current accounting and disclosure practices. In February 2016, the FASB issued ASU 2016-02, “Leases” which requires a lessee to recognize in its statement of condition a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. ASU 2016-02 leaves lessor accounting largely unchanged from prior standards. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. All other leases must be classified as financing or operating leases which depends on the relationship of the lessee’s rights to the economic value of the leased asset. For finance leases, interest on the lease liability is recognized separately from amortization of the right-of-use asset in earnings, resulting in higher expense in the earlier portion of the lease term. For operating leases, a single lease cost is calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis. In transition to ASU 2016-02, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply, which would result in continuing to account for leases that commence before the effective date in accordance with previous requirements (unless the lease is modified) except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous requirements. ASU 2016-02 also requires expanded qualitative and quantitative disclosures to assess the amount, timing, and uncertainty of cash flows arising from lease arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. FHN is evaluating the impact of ASU 2016-02 on its current accounting and disclosure practices. In March 2016, the FASB issued ASU 2016-04, “Recognition of Breakage of Certain Prepaid Stored-Value Products” which indicates that liabilities related to the sale of prepaid-stored value products are considered financial liabilities and should have a breakage estimate applied for estimated unused funds. ASU 2016-04 does not apply to stored-value products that can only be redeemed for cash, are subject to escheatment or are linked to a segregated bank account. ASU 2016-04 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. FHN is evaluating the impact of ASU 2016-04 on its current accounting and disclosure practices. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting” which makes several revisions to equity compensation accounting. Under the new guidance all excess tax benefits and deficiencies that occur when an award vests, is exercised, or expires will be recognized in income tax expense as discrete period items. Previously, these transactions were typically recorded directly within equity. Consistent with this change, excess tax benefits and deficiencies will no longer be included within estimated proceeds when performing the treasury stock method for calculation of diluted earnings per share. Excess tax benefits will also be recognized at the time an award is exercised or vests compared to the current requirement to delay recognition until the deduction reduces taxes payable. The presentation of excess tax benefits in the statement of cash flows will shift to an operating activity from the current classification as a financing activity. ASU 2016-09 also provides an accounting policy election to recognize forfeitures of awards as they occur rather than the current requirement to estimate forfeitures from inception. Further, ASU 2016-09 permits employers to use a net-settlement feature to withhold taxes on equity compensation awards up to the maximum statutory tax rate without affecting the equity classification of the award. Under current guidance, withholding of equity awards in excess of the minimum statutory requirement results in liability classification for the entire award. The related cash remittance by the employer for employee taxes will be treated as a financing activity in the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. Transition to the new guidance will be accomplished through a combination of retrospective, cumulative-effect adjustment to equity and prospective methodologies. FHN is evaluating the impact of ASU 2016-09 on its current equity compensation accounting and disclosure practices. In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments” which revises the measurement and recognition of credit losses for assets measured at amortized cost (e.g., held-to-maturity (“HTM”) loans and debt securities) and available-for-sale (“AFS”) debt securities. Under ASU 2016-13, for assets measured at amortized cost, the current expected credit loss (“CECL”) is measured as the difference between amortized cost and the net amount expected to be collected. This represents a departure from existing GAAP as the “incurred loss” methodology for recognizing credit losses delays recognition until it is probable a loss has been incurred. The measurement of current expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Additionally, current disclosures of credit quality indicators in relation to the amortized cost of financing receivables will be further disaggregated by year of origination. ASU 2016-13 leaves the methodology for measuring credit losses on AFS debt securities largely unchanged, with the maximum credit loss representing the difference between amortized cost and fair value. However, such credit losses will be recognized through an allowance for credit losses, which permits recovery of previously recognized credit losses if circumstances change. ASU 2016-13 also revises the recognition of credit losses for purchased financial assets with a more-than insignificant amount of credit deterioration since origination (“PCD assets”). For PCD assets the initial allowance for credit losses is added to the purchase price. Only subsequent changes in the allowance for credit losses are recorded as a credit loss expense for PCD assets. Interest income for PCD assets will be recognized based on the effective interest rate, excluding the discount embedded in the purchase price that is attributable to the acquirer’s assessment of credit losses at acquisition. Currently, credit losses for purchased credit-impaired assets are included in the initial basis of the assets with subsequent declines in credit resulting in expense while subsequent improvements in credit are reflected as an increase in the future yield from the assets. The provisions of ASU 2016-13 will be generally be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in the year of adoption. Prospective implementation is required for debt securities for which an other-than-temporary-impairment (“OTTI”) had been previously recognized. Amounts previously recognized in accumulated other comprehensive income (“AOCI”) as of the date of adoption that relate to improvements in cash flows expected to be collected will continue to be accreted into income over the remaining life of the asset. Recoveries of amounts previously written off relating to improvements in cash flows after the date of adoption will be recorded in earnings when received. A prospective transition approach will be used for existing PCD assets where upon adoption, the amortized cost basis will be adjusted to reflect the addition of the allowance for credit losses. Thus, an entity will not be required to reassess its purchased financial assets that exist as of the date of adoption to determine whether they would have met at acquisition the new criteria of more-than insignificant credit deterioration since origination. An entity will accrete the remaining noncredit discount (based on the revised amortized cost basis) into interest income at the effective interest rate at the adoption date. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted in fiscal years beginning after December 15, 2018. FHN is evaluating the impact of ASU 2016-13 on its current accounting and disclosure practices. Since the CECL methodology encompasses a “life of loan” requirement for the recognition of credit losses, the estimated amount of such losses will be larger than the estimate of probable incurred losses under current standards. The extent of this difference will be dependent upon economic considerations and loan portfolio characteristics at the time of adoption. |
Financial Information (Tables) |
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Accounting Changes And Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounting Changes |
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Investment Securities (Tables) |
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Investment Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of FHN's Investment Securities |
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Schedule Of Amortized Cost And Fair Value By Contractual Maturity |
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. |
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Schedule Of Gross Gains And Losses On Sale From Available For Sale Portfolio |
Cash proceeds for the three months ended June 30, 2016 were $.6 million; cash proceeds for the three months ended June 30, 2015 were not material. Proceeds for the six months ended June 30, 2016 and 2015, respectively, were $1.5 million and $.3 million. Six months ended June 30, 2016 includes a $1.7 million gain from an exchange of approximately $294 million of AFS debt securities. |
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Schedule Of Investments Within The Available For Sale Portfolio That Had Unrealized Losses |
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Loans (Tables) |
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Loans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Loans By Portfolio Segment |
Balances as of June 30, 2016 and 2015, and December 31, 2015, include $43.5 million, $66.4 million, and $52.8 million of restricted real estate loans, respectively. See Note 13 - Variable Interest Entities for additional information. |
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Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Accretable Yield Movement Schedule Rollforward [Table Text Block] |
Includes changes in the accretable yield due to both transfers from the nonaccretable difference and the impact of changes in the expected timing of the cash flows. |
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Schedule Of Acquired Purchase Credit Impaired Loans By Portfolio Segment [Table Text Block] |
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Information By Class Related To Individually Impaired Loans |
All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance.
All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance. |
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Balances Of Commercial Loan Portfolio Classes, Disaggregated By PD Grade |
Balances as of June 30, 2016 and 2015, presented net of $25.5 million and $26.2 million, respectively, in lower of cost or market (“LOCOM”) valuation adjustment. Based on the underlying structure of the notes, the highest possible internal grade is "13". |
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Loans by FICO Score, Consumer |
For this group, a majority of the FICO scores at the time of the origination exceeded 620 but have since deteriorated as the loans have seasoned. |
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Accruing And Non-Accruing Loans By Class |
Total TRUPS includes LOCOM valuation adjustment of $25.5 million.
Total TRUPS includes LOCOM valuation adjustment of $26.2 million. |
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Schedule Of Troubled Debt Restructurings Occurring During The Year |
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Schedule Of Troubled Debt Restructurings Within The Previous 12 Months |
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Allowance for Loan Losses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans And Leases Receivable Allowance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward Of The Allowance For Loan Losses By Portfolio Segment |
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Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Intangible Assets, Net Of Accumulated Amortization Included In The Consolidated Statements |
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Summary Of Gross Goodwill And Accumulated Impairment Losses And Write-Offs Detailed By Reportable Segments | Gross goodwill of $200.0 million with accumulated impairments and accumulated divestiture related write-offs of $114.1 million and $85.9 million, respectively, were previously allocated to the non-strategic segment, resulting in $0 net goodwill allocated to the non-strategic segment as of June 30, 2015 and 2016. The regional bank and fixed income segments do not have any accumulated impairments or divestiture related write-offs. The following is a summary of goodwill by reportable segment included in the Consolidated Condensed Statements of Condition as of and for the six months ended June 30, 2015 and 2016.
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Other Income And Other Expense (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income And Other Expense [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income And Other Expense |
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Components of Other Comprehensive Income/(Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Table Text Block Supplement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income/(Loss) |
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Reclassification Out Of Accumulated Other Comprehensive Income [Table Text Block] |
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Net Income/(Loss) to Net Income/(Loss) Available to Common Shareholders |
For the six months ended June 30, 2015 all potential common shares were antidilutive due to the net loss available to common shareholders. |
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Schedule Of Anti-Dilutive Options and Awards |
For the six months ended June 30, 2015 all potential common shares were antidilutive due to the net loss available to common shareholders. |
Pension, Savings, And Other Employee Benefits (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension, Savings, And Other Employee Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Components Of Net Periodic Benefit Cost |
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Business Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amounts Of Consolidated Revenue, Expense, Tax And Assets |
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Variable Interest Entities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of VIEs Consolidated By FHN |
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Summary of the Impact of Qualifying LIHTC Investments |
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Summary Of VIEs Not Consolidated By FHN |
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Derivatives (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives Associated With Capital Markets Trading Activities |
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Derivatives Associated With Interest Rate Risk Management Activities |
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Derivative Associated With Cash Flow Hedges |
(a) Includes approximately $1.7 million expected to be reclassified into earnings in the next twelve months. |
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Schedule Of Derivative Activities Associated With Trust Preferred Loans |
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Derivative Assets And Collateral Received |
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Derivative Liabilities and Collateral Pledged |
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Master Netting And Similar Agreements (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Master Netting And Similar Agreements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Purchased Under Agreements To Resell And Collateral Pledged By Counterparties [Table Text Block] | The following table provides a detail of Securities purchased under agreements to resell as presented on the Consolidated Condensed Statements of Condition and collateral pledged by counterparties as of June 30:
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Securities Sold Under Agreements To Repurchase And Collateral Pledged By Company [Table Text Block] | The following table provides a detail of Securities sold under agreements to repurchase as presented on the Consolidated Condensed Statements of Condition and collateral pledged by FHN as of June 30:
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Schedule of the Remaining Contractual Maturity by Collateral Type of Securities Sold Under Agreements To Repurchase |
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Fair Value Of Assets And Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Of Assets And Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis |
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Summary Of Changes In Level 3 Assets And Liabilities Measured At Fair Value |
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Nonrecurring Fair Value Measurements | Nonrecurring Fair Value Measurements From time to time, FHN may be required to measure certain other financial assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of LOCOM accounting or write-downs of individual assets. For assets measured at fair value on a nonrecurring basis which were still held on the balance sheet at June 30, 2016 and 2015, respectively, the following tables provide the level of valuation assumptions used to determine each adjustment, the related carrying value, and the fair value adjustments recorded during the respective periods.
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Schedule Of Unobservable Inputs Utilized In Determining The Fair Value Of Level 3 Recurring And Non-Recurring Measurements |
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Summary Of Differences Between The Fair Value Carrying Amount Of Mortgages Held-For-Sale And Aggregate Unpaid Principal Amount |
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Changes In Fair Value Of Assets And Liabilities Which Fair Value Option Included In Current Period Earnings |
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Summary Of Book Value And Estimated Fair Value Of Financial Instruments | The following tables summarize the book value and estimated fair value of financial instruments recorded in the Consolidated Condensed Statements of Condition as well as unfunded loan commitments and stand by and other commitments as of June 30, 2016 and 2015.
Certain previously reported amounts have been reclassified to agree with current presentation.
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Financial Information (Schedule of Accounting Changes) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
Dec. 31, 2014 |
---|---|---|---|---|
New Accounting Pronouncement or Change in | ||||
Other Assets | $ 1,387,756 | $ 1,436,291 | $ 1,405,961 | |
Term borrowings | $ 1,076,943 | 1,312,677 | 1,555,272 | |
Accounting Standards Update 201503 [Member] | ||||
New Accounting Pronouncement or Change in | ||||
Other Assets | (2,499) | (2,375) | $ (2,764) | |
Term borrowings | $ (2,499) | $ (2,375) | $ (2,764) |
Acquisitions and Divestitures (Narrative) (Details) $ in Thousands |
9 Months Ended | |||||||
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Oct. 02, 2015
USD ($)
shares
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Jun. 30, 2016
USD ($)
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Dec. 31, 2015
USD ($)
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[1] |
Jun. 30, 2015
USD ($)
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Dec. 31, 2014
USD ($)
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Business Acquisition [Line Items] | ||||||||
Goodwill | $ 191,307 | $ 191,307 | $ 145,932 | $ 145,932 | ||||
Trustatlantic Financial Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition date | Oct. 02, 2015 | |||||||
Business Acquisition, Name of Acquired Entity | TrustAtlantic Financial Corporation | |||||||
Business Acquisition, Description of Acquired Entity | Prior to the acquisition TAF and TAB were headquartered in Raleigh, North Carolina, where TAB had five branches located in the communities of Raleigh, Cary and Greenville. | |||||||
Number of common shares issued in acquisition | shares | 5,093,657 | |||||||
Number Of Bank Branches | 5 | |||||||
GE Capital Member [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Value Of Loans Subsidiary Agreed To Purchase | $ 600,000 | |||||||
As Recorded by FHN | Trustatlantic Financial Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash payment to acquire business, gross | $ 23,900 | |||||||
Total transaction value | 96,700 | |||||||
Assets acquired | 400,000 | |||||||
Loans acquired | 281,900 | |||||||
Deposits assumed | 344,000 | |||||||
Goodwill | $ 45,400 | |||||||
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Investment Securities (Schedule Of FHN's Investment Securities) (Details) - USD ($) $ in Thousands |
6 Months Ended | ||||||||||||
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Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
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Schedule of Available-for-sale Securities [Line Items] | |||||||||||||
Securities available for sale, Amortized Cost | $ 3,914,243 | [1] | $ 3,622,145 | [2] | |||||||||
Securities available for sale, Gross Unrealized Gains | 96,298 | [1] | 49,925 | [2] | |||||||||
Securities available for sale, Gross Unrealized Losses | (1,298) | [1] | (23,210) | [2] | |||||||||
Securities available for sale, Fair Value | 4,009,243 | [1] | 3,648,860 | [2] | $ 3,929,846 | ||||||||
Pledged available for sale securities | 3,400,000 | 3,200,000 | |||||||||||
Schedule Of Held To Maturity Securities [Line Items] | |||||||||||||
Securities held to maturity, Amortized cost | 14,333 | 4,306 | $ 14,320 | ||||||||||
Securities held to maturity, Gross Unrealized Gains | 768 | 1,050 | |||||||||||
Securities held to maturity, Gross Unrealized Losses | 0 | 0 | |||||||||||
Securities held to maturity, Fair Value | 15,101 | 5,356 | |||||||||||
FRB [Member] | |||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||
Restricted investments | 68,600 | 65,800 | |||||||||||
FHLB-Cincinnati Stock [Member] | |||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||
Restricted investments | 87,900 | 87,900 | |||||||||||
U.S. treasuries | |||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||
Securities available for sale, Amortized Cost | 100 | 100 | |||||||||||
Securities available for sale, Gross Unrealized Gains | 0 | 0 | |||||||||||
Securities available for sale, Gross Unrealized Losses | 0 | 0 | |||||||||||
Securities available for sale, Fair Value | 100 | 100 | |||||||||||
Government Agency Issued Mortgage-Backed Securities ("MBS") | |||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||
Securities available for sale, Amortized Cost | 1,880,831 | 804,841 | |||||||||||
Securities available for sale, Gross Unrealized Gains | 65,391 | 29,068 | |||||||||||
Securities available for sale, Gross Unrealized Losses | 0 | (3,269) | |||||||||||
Securities available for sale, Fair Value | 1,946,222 | 830,640 | |||||||||||
Government Agency Issued Collateralized Mortgage Obligations ("CMO") | |||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||
Securities available for sale, Amortized Cost | 1,845,205 | 2,624,151 | |||||||||||
Securities available for sale, Gross Unrealized Gains | 30,907 | 20,836 | |||||||||||
Securities available for sale, Gross Unrealized Losses | (1,296) | (19,701) | |||||||||||
Securities available for sale, Fair Value | 1,874,816 | 2,625,286 | |||||||||||
Other U.S. Government Agencies | |||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||
Securities available for sale, Amortized Cost | 1,539 | ||||||||||||
Securities available for sale, Gross Unrealized Gains | 21 | ||||||||||||
Securities available for sale, Gross Unrealized Losses | 0 | ||||||||||||
Securities available for sale, Fair Value | 1,560 | ||||||||||||
States And Municipalities | |||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||
Securities available for sale, Amortized Cost | 1,500 | 9,455 | |||||||||||
Securities available for sale, Gross Unrealized Gains | 0 | 0 | |||||||||||
Securities available for sale, Gross Unrealized Losses | 0 | 0 | |||||||||||
Securities available for sale, Fair Value | 1,500 | 9,455 | |||||||||||
Equity and other | |||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||
Securities available for sale, Amortized Cost | 186,607 | [3] | 182,059 | [4] | |||||||||
Securities available for sale, Gross Unrealized Gains | 0 | [3] | 0 | [4] | |||||||||
Securities available for sale, Gross Unrealized Losses | (2) | [3] | (240) | [4] | |||||||||
Securities available for sale, Fair Value | 186,605 | [3] | 181,819 | [4] | |||||||||
Schedule Of Held To Maturity Securities [Line Items] | |||||||||||||
Securities held to maturity, Amortized cost | 0 | ||||||||||||
Securities held to maturity, Fair Value | 0 | ||||||||||||
States And Municipalities | |||||||||||||
Schedule Of Held To Maturity Securities [Line Items] | |||||||||||||
Securities held to maturity, Amortized cost | 4,333 | 4,306 | |||||||||||
Securities held to maturity, Gross Unrealized Gains | 407 | 1,050 | |||||||||||
Securities held to maturity, Gross Unrealized Losses | 0 | 0 | |||||||||||
Securities held to maturity, Fair Value | 4,740 | $ 5,356 | |||||||||||
Corporate Bonds | |||||||||||||
Schedule Of Held To Maturity Securities [Line Items] | |||||||||||||
Securities held to maturity, Amortized cost | 10,000 | ||||||||||||
Securities held to maturity, Gross Unrealized Gains | 361 | ||||||||||||
Securities held to maturity, Gross Unrealized Losses | 0 | ||||||||||||
Securities held to maturity, Fair Value | $ 10,361 | ||||||||||||
|
Investment Securities (Schedule Of Amortized Cost And Fair Value By Contractual Maturity) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Schedule of Investments [Line Items] | ||||||||||||||||
Within 1 year, Amortized Cost | $ 1,500 | |||||||||||||||
After 1 year; within 5 years, Amortized Cost | 100 | |||||||||||||||
After 5 years; within 10 years, Amortized Cost | 0 | |||||||||||||||
After 10 years, Amortized Cost | 0 | |||||||||||||||
Subtotal, Amortized Cost | 1,600 | |||||||||||||||
Within 1 year, Fair Value | 1,500 | |||||||||||||||
After 1 year; within 5 years, Fair Value | 100 | |||||||||||||||
After 5 years; within 10 years, Fair Value | 0 | |||||||||||||||
After 10 years, Fair Value | 0 | |||||||||||||||
Subtotal, Fair Value | 1,600 | |||||||||||||||
Securities available for sale, Amortized Cost | 3,914,243 | [1] | $ 3,622,145 | [2] | ||||||||||||
Securities available for sale, Fair Value | 4,009,243 | [1] | $ 3,929,846 | 3,648,860 | [2] | |||||||||||
HTM, Within 1 year, Amortized Cost | 0 | |||||||||||||||
HTM, After 1 year; within 5 years, Amortized Cost | 0 | |||||||||||||||
HTM, After 5 years; within 10 years, Amortized Cost | 10,000 | |||||||||||||||
HTM, After 10 years, Amortized Cost | 4,333 | |||||||||||||||
HTM Subtotal, Amortized Cost | 14,333 | |||||||||||||||
HTM, Within 1 year, Fair Value | 0 | |||||||||||||||
HTM, After 1 year; within 5 years, Fair Value | 0 | |||||||||||||||
HTM, After 5 years; within 10 years, Fair Value | 10,361 | |||||||||||||||
HTM, After 10 years, Fair Value | 4,740 | |||||||||||||||
HTM Subtotal, Fair Value | 15,101 | |||||||||||||||
Securities held to maturity, Amortized cost | 14,333 | $ 14,320 | 4,306 | |||||||||||||
Securities held to maturity, Fair Value | 15,101 | 5,356 | ||||||||||||||
Government Agency Issued MBS And CMO | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Securities available for sale, Amortized Cost | [3] | 3,726,036 | ||||||||||||||
Securities available for sale, Fair Value | [3] | 3,821,038 | ||||||||||||||
Securities held to maturity, Amortized cost | [3] | 0 | ||||||||||||||
Securities held to maturity, Fair Value | [3] | 0 | ||||||||||||||
Equity and other | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Securities available for sale, Amortized Cost | 186,607 | [4] | 182,059 | [5] | ||||||||||||
Securities available for sale, Fair Value | 186,605 | [4] | $ 181,819 | [5] | ||||||||||||
Securities held to maturity, Amortized cost | 0 | |||||||||||||||
Securities held to maturity, Fair Value | $ 0 | |||||||||||||||
|
Investment Securities (Schedule Of Realized Gross Gains And Losses On Sale From Available For Sale Portfolio) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Gross gains on sales of securities | $ 162 | $ 8 | $ 3,999 | $ 284 | |||||||||||
Gross (losses) on sales of securities | (63) | 0 | (2,326) | 0 | |||||||||||
Net gain/(loss) on sales of securities | [1] | 99 | 8 | 1,673 | 284 | ||||||||||
Proceeds from sales | 600 | 1,500 | 300 | ||||||||||||
Debt securities gains/(losses), net | 1,700 | ||||||||||||||
Available For Sale Securities | 4,009,243 | [2] | $ 3,648,860 | [3] | 4,009,243 | [2] | $ 3,648,860 | [3] | $ 3,929,846 | ||||||
Swap [Member] | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Available For Sale Securities | $ 294,000 | $ 294,000 | |||||||||||||
|
Investment Securities (Schedule Of Investments Within The Available For Sale Portfolio That Had Unrealized Losses) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Schedule of Investments [Line Items] | ||
Less than 12 months, Fair Value | $ 26,128 | $ 1,079,055 |
Less than 12 months, Unrealized Losses | (12) | (10,219) |
12 months or longer, Fair Value | 186,797 | 484,512 |
12 months or longer, Unrealized Losses | (1,286) | (12,991) |
Total Fair Value | 212,925 | 1,563,567 |
Total Unrealized Losses | (1,298) | (23,210) |
Government Agency Issued Collateralized Mortgage Obligations ("CMO") | ||
Schedule of Investments [Line Items] | ||
Less than 12 months, Fair Value | 26,121 | 845,534 |
Less than 12 months, Unrealized Losses | (10) | (7,734) |
12 months or longer, Fair Value | 186,797 | 450,079 |
12 months or longer, Unrealized Losses | (1,286) | (11,967) |
Total Fair Value | 212,918 | 1,295,613 |
Total Unrealized Losses | (1,296) | (19,701) |
Government Agency Issued Mortgage-Backed Securities ("MBS") | ||
Schedule of Investments [Line Items] | ||
Less than 12 months, Fair Value | 233,521 | |
Less than 12 months, Unrealized Losses | (2,485) | |
12 months or longer, Fair Value | 33,582 | |
12 months or longer, Unrealized Losses | (784) | |
Total Fair Value | 267,103 | |
Total Unrealized Losses | (3,269) | |
Total debt securities | ||
Schedule of Investments [Line Items] | ||
Less than 12 months, Fair Value | 26,121 | 1,079,055 |
Less than 12 months, Unrealized Losses | (10) | (10,219) |
12 months or longer, Fair Value | 186,797 | 483,661 |
12 months or longer, Unrealized Losses | (1,286) | (12,751) |
Total Fair Value | 212,918 | 1,562,716 |
Total Unrealized Losses | (1,296) | (22,970) |
Equity | ||
Schedule of Investments [Line Items] | ||
Less than 12 months, Fair Value | 7 | 0 |
Less than 12 months, Unrealized Losses | (2) | 0 |
12 months or longer, Fair Value | 0 | 851 |
12 months or longer, Unrealized Losses | 0 | (240) |
Total Fair Value | 7 | 851 |
Total Unrealized Losses | $ (2) | $ (240) |
Loans (Narrative) (Details) |
3 Months Ended | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
number
|
Jun. 30, 2015
USD ($)
|
Jun. 30, 2016
USD ($)
number
|
Jun. 30, 2015
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Oct. 02, 2015
USD ($)
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Troubled debt restructurings loans | $ 299,300,000 | $ 310,600,000 | $ 299,300,000 | $ 310,600,000 | ||||||||||
Allowance for loan losses | 199,807,000 | 221,351,000 | 199,807,000 | 221,351,000 | $ 204,034,000 | $ 210,242,000 | $ 228,328,000 | $ 232,448,000 | ||||||
Average balance of impaired loans | 316,045,000 | 348,644,000 | 313,222,000 | 347,253,000 | ||||||||||
Interest income recognized on impaired loan | $ 1,701,000 | 1,709,000 | 3,138,000 | 3,369,000 | ||||||||||
Forbearance agreements time period | 6 months | |||||||||||||
Loans, net of unearned income | [1] | $ 18,589,337,000 | 16,936,772,000 | 18,589,337,000 | 16,936,772,000 | 17,686,502,000 | ||||||||
Provision for loan losses | 4,000,000 | 2,000,000 | 7,000,000 | 7,000,000 | ||||||||||
Loan loss provision on PCI loans | (400,000) | (300,000) | (300,000) | (600,000) | ||||||||||
Allowance - purchased credit impaired loans | 827,000 | 2,784,000 | 827,000 | 2,784,000 | ||||||||||
As Acquired | Trustatlantic Financial Corporation | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Loans acquired | $ 298,100,000 | |||||||||||||
As Recorded by FHN | Trustatlantic Financial Corporation | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Loans acquired | $ 281,900,000 | |||||||||||||
Permanent Mortgage Portfolio Segment | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Allowance for loan losses | $ 17,600,000 | 22,377,000 | $ 17,600,000 | 22,377,000 | 18,754,000 | 18,947,000 | 20,186,000 | 19,122,000 | ||||||
TDR, reduction of interest rate by increment, basis points | 25.00% | 25.00% | ||||||||||||
TDRS Maturities | 40 years | |||||||||||||
Loans, net of unearned income | $ 439,014,000 | 487,679,000 | $ 439,014,000 | 487,679,000 | 454,123,000 | |||||||||
Modified interest rate increase | 1.00% | 1.00% | ||||||||||||
Provision for loan losses | $ (1,289,000) | 2,329,000 | $ (2,149,000) | 3,959,000 | ||||||||||
Allowance - purchased credit impaired loans | 0 | 0 | 0 | 0 | ||||||||||
Loans Held-For-Sale | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Troubled debt restructurings loans | 73,800,000 | 80,800,000 | $ 73,800,000 | 80,800,000 | ||||||||||
Residential Real Estate | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Concentration risk, percentage | 27.00% | |||||||||||||
Consumer Real Estate Portfolio Segment | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Concentration risk, percentage | 25.00% | |||||||||||||
Allowance for loan losses | $ 59,081,000 | 85,457,000 | $ 59,081,000 | 85,457,000 | 67,321,000 | 80,614,000 | 109,245,000 | 113,011,000 | ||||||
TDRS Maturities | 30 years | |||||||||||||
Loans, net of unearned income | [2] | $ 4,640,779,000 | 4,870,271,000 | 4,640,779,000 | 4,870,271,000 | 4,766,518,000 | ||||||||
Provision for loan losses | (7,740,000) | (24,736,000) | (19,842,000) | (24,689,000) | ||||||||||
Allowance - purchased credit impaired loans | 336,000 | 493,000 | 336,000 | 493,000 | ||||||||||
Modified Loans Classified As A TDR | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Allowance for loan losses | $ 51,200,000 | $ 61,000,000 | $ 51,200,000 | $ 61,000,000 | ||||||||||
Ratio of the allowance for loan losses to loans | 17.00% | 20.00% | 17.00% | 20.00% | ||||||||||
Loans To Mortgage Companies | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Percentage contributed in total loan | 12.00% | 12.00% | ||||||||||||
Percentage of commercial & industrial loan portfolio | 20.00% | 20.00% | ||||||||||||
Commercial loans | $ 2,227,171,000 | $ 1,799,665,000 | $ 2,227,171,000 | $ 1,799,665,000 | ||||||||||
Loans, net of unearned income | 2,227,171,000 | 1,799,665,000 | 2,227,171,000 | 1,799,665,000 | ||||||||||
Commercial Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Allowance for loan losses | 111,236,000 | 100,242,000 | 111,236,000 | 100,242,000 | ||||||||||
Average balance of impaired loans | 56,581,000 | 67,341,000 | 51,525,000 | 64,065,000 | ||||||||||
Interest income recognized on impaired loan | 318,000 | 276,000 | 431,000 | 566,000 | ||||||||||
Commercial loans | $ 13,148,857,000 | 11,233,278,000 | 13,148,857,000 | 11,233,278,000 | ||||||||||
Time period of default probability | 1 year | |||||||||||||
Allowance - purchased credit impaired loans | $ 491,000 | 2,291,000 | 491,000 | 2,291,000 | ||||||||||
Credit Card & Other | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Allowance for loan losses | 11,890,000 | 13,275,000 | 11,890,000 | 13,275,000 | $ 11,446,000 | 11,885,000 | $ 13,580,000 | $ 14,730,000 | ||||||
Loans, net of unearned income | 360,687,000 | 345,544,000 | 360,687,000 | 345,544,000 | 354,536,000 | |||||||||
Provision for loan losses | 2,897,000 | 4,697,000 | 4,977,000 | 6,590,000 | ||||||||||
Allowance - purchased credit impaired loans | $ 0 | 0 | $ 0 | 0 | ||||||||||
Credit Card | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Credit card workout program, granted rate reduction | 0.00% | 0.00% | ||||||||||||
Loans, net of unearned income | $ 192,765,000 | 185,207,000 | $ 192,765,000 | 185,207,000 | ||||||||||
Heloc And Real Estate Installment Classes | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
TDR, reduction of interest rate by increment, basis points | 25.00% | 25.00% | ||||||||||||
Modified interest rate increase | 2.00% | 2.00% | ||||||||||||
Restricted And Secured Consumer Real Estate Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Loans, net of unearned income | $ 43,500,000 | 66,400,000 | $ 43,500,000 | 66,400,000 | $ 52,800,000 | |||||||||
Finance And Insurance Companies | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Percentage contributed in total loan | 12.00% | 12.00% | ||||||||||||
Percentage of commercial & industrial loan portfolio | 20.00% | 20.00% | ||||||||||||
Commercial loans | $ 2,300,000,000 | $ 2,300,000,000 | ||||||||||||
Finance Insurance And Loans To Mortgage Companies | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Percentage of commercial & industrial loan portfolio | 40.00% | 40.00% | ||||||||||||
Maximum | Permanent Mortgage Portfolio Segment | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Modified interest rate time period | 5 years | |||||||||||||
Maximum | Commercial Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Forbearance agreements time period | 12 months | |||||||||||||
Maximum | Credit Card | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Payment reductions, time period | 1 year | |||||||||||||
Credit card workout program, term extension | 5 years | |||||||||||||
Maximum | Heloc And Real Estate Installment Classes | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Modified interest rate time period | 5 years | |||||||||||||
Minimum | Permanent Mortgage Portfolio Segment | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Modified interest rate | 2.00% | 2.00% | ||||||||||||
Modified interest rate time period | 5 years | |||||||||||||
Minimum | Credit Card | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Payment reductions, time period | 6 months | |||||||||||||
Minimum | Heloc And Real Estate Installment Classes | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Modified interest rate | 1.00% | 1.00% | ||||||||||||
Modified interest rate time period | 5 years | |||||||||||||
Pass | Maximum | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Commercial loan grades | number | 12 | 12 | ||||||||||||
Pass | Minimum | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Commercial loan grades | number | 1 | 1 | ||||||||||||
Special Mention | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Commercial loan grades | number | 13 | 13 | ||||||||||||
Substandard | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Commercial loan grades | number | 14 | 14 | ||||||||||||
Doubtful | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Commercial loan grades | number | 15 | 15 | ||||||||||||
Unlikely to be Collected Financing Receivable | Maximum | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Commercial loan grades | number | 16 | 16 | ||||||||||||
PD Grade 1 | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Allowance for loan losses | $ 109,000 | 126,000 | $ 109,000 | 126,000 | ||||||||||
Lowest expected default probability | number | 1 | 1 | ||||||||||||
PD Grade 12 | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Allowance for loan losses | $ 4,337,000 | 2,704,000 | $ 4,337,000 | 2,704,000 | ||||||||||
PD Grade 13 | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Allowance for loan losses | 5,669,000 | $ 4,944,000 | 5,669,000 | $ 4,944,000 | ||||||||||
PD Grade 13 | Minimum | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Commercial loans | $ 500,000 | $ 500,000 | ||||||||||||
LGD Grade 1 | Minimum | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Commercial loan grades | number | 1 | 1 | ||||||||||||
LGD Grade 12 | Maximum | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Commercial loan grades | number | 12 | 12 | ||||||||||||
Loan Reassessed | Minimum | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Commercial loans | $ 1,000,000 | $ 1,000,000 | ||||||||||||
|
Loans (Schedule Of Loans By Portfolio Segment) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
|||||
---|---|---|---|---|---|---|---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Loans, net of unearned income | [1] | $ 18,589,337 | $ 17,686,502 | $ 16,936,772 | |||||||
Allowance for loan losses | 199,807 | $ 204,034 | 210,242 | 221,351 | $ 228,328 | $ 232,448 | |||||
Total net loans | 18,389,530 | 17,476,260 | 16,715,421 | ||||||||
Commercial Financial And Industrial Portfolio Segment [Member] | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Loans, net of unearned income | 11,179,445 | 10,436,390 | 9,832,563 | ||||||||
Allowance for loan losses | 80,972 | 80,887 | 73,637 | 78,750 | 67,652 | 67,011 | |||||
Commercial Real Estate Portfolio Segment [Member] | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Loans, net of unearned income | 1,969,412 | 1,674,935 | 1,400,715 | ||||||||
Allowance for loan losses | 30,264 | 25,626 | 25,159 | 21,492 | 17,665 | 18,574 | |||||
Consumer Real Estate Portfolio Segment [Member] | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Loans, net of unearned income | [2] | 4,640,779 | 4,766,518 | 4,870,271 | |||||||
Allowance for loan losses | 59,081 | 67,321 | 80,614 | 85,457 | 109,245 | 113,011 | |||||
Permanent Mortgage Portfolio Segment [Member] | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Loans, net of unearned income | 439,014 | 454,123 | 487,679 | ||||||||
Allowance for loan losses | 17,600 | 18,754 | 18,947 | 22,377 | 20,186 | 19,122 | |||||
Credit Card And Other Portfolio Segment [Member] | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Loans, net of unearned income | 360,687 | 354,536 | 345,544 | ||||||||
Allowance for loan losses | 11,890 | $ 11,446 | 11,885 | 13,275 | $ 13,580 | $ 14,730 | |||||
Restricted And Secured Consumer Real Estate Loans [Member] | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Loans, net of unearned income | $ 43,500 | $ 52,800 | $ 66,400 | ||||||||
|
Loans (Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Accretable Yield Movement Schedule Rollforward) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|||
Loans [Abstract] | ||||||
Balance, beginning of period | $ 8,958 | $ 10,468 | $ 8,542 | $ 14,714 | ||
Accretion | (996) | (1,576) | (2,147) | (4,948) | ||
Adjustment for payoffs | (2,452) | (760) | (4,229) | (2,096) | ||
Adjustment for charge-offs | (11) | 0 | (674) | 0 | ||
Increase in accretable yield | [1] | 705 | 216 | 4,712 | 678 | |
Other | (33) | 0 | (33) | 0 | ||
Balance, end of period | $ 6,171 | $ 8,348 | $ 6,171 | $ 8,348 | ||
|
Loans (Schedule Of Acquired Purchase Credit Impaired Loans By Portfolio Segment) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Carrying value | $ 21,167 | $ 39,716 | $ 27,068 |
Unpaid balance | 26,394 | 48,686 | 33,144 |
Commercial Financial And Industrial Portfolio Segment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Carrying value | 10,437 | 16,063 | 4,870 |
Unpaid balance | 12,140 | 18,573 | 5,507 |
Commercial Real Estate Portfolio Segment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Carrying value | 9,428 | 19,929 | 20,262 |
Unpaid balance | 12,382 | 25,504 | 24,830 |
Consumer Real Estate Portfolio Segment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Carrying value | 1,247 | 3,672 | 1,927 |
Unpaid balance | 1,800 | 4,533 | 2,796 |
Credit Card And Other Portfolio Segment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Carrying value | 55 | 52 | 9 |
Unpaid balance | $ 72 | $ 76 | $ 11 |
Loans (Information By Class Related To Individually Impaired Loans) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | $ 319,322 | $ 348,515 | $ 319,322 | $ 348,515 | |||
Unpaid Principal Balance | 371,598 | 405,308 | 371,598 | 405,308 | |||
Related Allowance | 52,151 | 72,980 | 52,151 | 72,980 | |||
Average Recorded Investment | 316,045 | 348,644 | 313,222 | 347,253 | |||
Interest Income Recognized | 1,701 | 1,709 | 3,138 | 3,369 | |||
Commercial Portfolio Segment [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 59,745 | 68,843 | 59,745 | 68,843 | |||
Unpaid Principal Balance | 77,455 | 88,577 | 77,455 | 88,577 | |||
Related Allowance | 4,510 | 13,562 | 4,510 | 13,562 | |||
Average Recorded Investment | 56,581 | 67,341 | 51,525 | 64,065 | |||
Interest Income Recognized | 318 | 276 | 431 | 566 | |||
Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 259,577 | 279,672 | 259,577 | 279,672 | |||
Unpaid Principal Balance | 294,143 | 316,731 | 294,143 | 316,731 | |||
Related Allowance | 47,641 | 59,418 | 47,641 | 59,418 | |||
Average Recorded Investment | 259,464 | 281,303 | 261,697 | 283,188 | |||
Interest Income Recognized | 1,383 | 1,433 | 2,707 | 2,803 | |||
Impaired Loans With No Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 16,757 | 16,589 | 16,757 | 16,589 | |||
Unpaid Principal Balance | 31,530 | 26,952 | 31,530 | 26,952 | |||
Related Allowance | 0 | 0 | 0 | 0 | |||
Average Recorded Investment | 15,801 | 17,214 | 13,746 | 17,875 | |||
Interest Income Recognized | 0 | 0 | 0 | 0 | |||
Impaired Loans With No Related Allowance Recorded [Member] | Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 19,698 | 23,939 | 19,698 | 23,939 | |||
Unpaid Principal Balance | 37,435 | 45,418 | 37,435 | 45,418 | |||
Related Allowance | 0 | 0 | 0 | 0 | |||
Average Recorded Investment | 19,673 | 24,131 | 19,731 | 24,510 | |||
Interest Income Recognized | 0 | 0 | 0 | 0 | |||
Impaired Loans With Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 42,988 | 52,254 | 42,988 | 52,254 | |||
Unpaid Principal Balance | 45,925 | 61,625 | 45,925 | 61,625 | |||
Related Allowance | 4,510 | 13,562 | 4,510 | 13,562 | |||
Average Recorded Investment | 40,780 | 50,127 | 37,779 | 46,190 | |||
Interest Income Recognized | 318 | 276 | 431 | 566 | |||
Impaired Loans With Related Allowance Recorded [Member] | Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 239,879 | 255,733 | 239,879 | 255,733 | |||
Unpaid Principal Balance | 256,708 | 271,313 | 256,708 | 271,313 | |||
Related Allowance | 47,641 | 59,418 | 47,641 | 59,418 | |||
Average Recorded Investment | 239,791 | 257,172 | 241,966 | 258,678 | |||
Interest Income Recognized | 1,383 | 1,433 | 2,707 | 2,803 | |||
General C I [Member] | Impaired Loans With No Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 14,289 | 12,402 | 14,289 | 12,402 | |||
Unpaid Principal Balance | 22,141 | 15,690 | 22,141 | 15,690 | |||
Related Allowance | 0 | 0 | 0 | 0 | |||
Average Recorded Investment | 13,333 | 13,016 | 11,278 | 12,305 | |||
Interest Income Recognized | 0 | 0 | 0 | 0 | |||
General C I [Member] | Impaired Loans With Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 33,884 | 30,549 | 33,884 | 30,549 | |||
Unpaid Principal Balance | 35,585 | 37,741 | 35,585 | 37,741 | |||
Related Allowance | 3,151 | 8,117 | 3,151 | 8,117 | |||
Average Recorded Investment | 31,333 | 28,400 | 28,127 | 24,087 | |||
Interest Income Recognized | 292 | 237 | 379 | 490 | |||
TRUPs [Member] | Impaired Loans With Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 3,274 | 13,399 | 3,274 | 13,399 | |||
Unpaid Principal Balance | 3,700 | 13,700 | 3,700 | 13,700 | |||
Related Allowance | 925 | 4,810 | 925 | 4,810 | |||
Average Recorded Investment | 3,291 | 13,414 | 3,307 | 13,429 | |||
Interest Income Recognized | 0 | 0 | 0 | 0 | |||
Income C R E [Member] | Impaired Loans With No Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 2,468 | 4,187 | 2,468 | 4,187 | |||
Unpaid Principal Balance | 9,389 | 11,262 | 9,389 | 11,262 | |||
Related Allowance | 0 | 0 | 0 | 0 | |||
Average Recorded Investment | 2,468 | 4,198 | 2,468 | 5,283 | |||
Interest Income Recognized | 0 | 0 | 0 | 0 | |||
Income C R E [Member] | Impaired Loans With Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 4,454 | 6,788 | 4,454 | 6,788 | |||
Unpaid Principal Balance | 4,796 | 8,298 | 4,796 | 8,298 | |||
Related Allowance | 329 | 533 | 329 | 533 | |||
Average Recorded Investment | 4,780 | 6,742 | 4,959 | 7,140 | |||
Interest Income Recognized | 20 | 33 | 40 | 63 | |||
Residential C R E [Member] | Impaired Loans With No Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 0 | 0 | |||||
Unpaid Principal Balance | 0 | 0 | |||||
Related Allowance | 0 | 0 | |||||
Average Recorded Investment | 0 | 287 | |||||
Interest Income Recognized | 0 | 0 | |||||
Residential C R E [Member] | Impaired Loans With Related Allowance Recorded [Member] | Commercial Portfolio Segment [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 1,376 | 1,518 | 1,376 | 1,518 | |||
Unpaid Principal Balance | 1,844 | 1,886 | 1,844 | 1,886 | |||
Related Allowance | 105 | 102 | 105 | 102 | |||
Average Recorded Investment | 1,376 | 1,571 | 1,386 | 1,534 | |||
Interest Income Recognized | 6 | 6 | 12 | 13 | |||
Home Equity [Member] | Impaired Loans With No Related Allowance Recorded [Member] | Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | [1] | 11,186 | 12,577 | 11,186 | 12,577 | ||
Unpaid Principal Balance | [1] | 25,367 | 30,604 | 25,367 | 30,604 | ||
Related Allowance | [1] | 0 | 0 | 0 | 0 | ||
Average Recorded Investment | [1] | 11,105 | 12,588 | 11,013 | 12,788 | ||
Interest Income Recognized | [1] | 0 | 0 | 0 | 0 | ||
Home Equity [Member] | Impaired Loans With Related Allowance Recorded [Member] | Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 88,871 | 87,292 | 88,871 | 87,292 | |||
Unpaid Principal Balance | 91,771 | 89,454 | 91,771 | 89,454 | |||
Related Allowance | 16,375 | 21,967 | 16,375 | 21,967 | |||
Average Recorded Investment | 88,299 | 86,197 | 88,439 | 85,417 | |||
Interest Income Recognized | 494 | 461 | 981 | 909 | |||
R E Installment Loans [Member] | Impaired Loans With No Related Allowance Recorded [Member] | Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | [1] | 4,232 | 4,959 | 4,232 | 4,959 | ||
Unpaid Principal Balance | [1] | 5,411 | 6,211 | 5,411 | 6,211 | ||
Related Allowance | [1] | 0 | 0 | 0 | 0 | ||
Average Recorded Investment | [1] | 4,407 | 4,739 | 4,420 | 4,704 | ||
Interest Income Recognized | [1] | 0 | 0 | 0 | 0 | ||
R E Installment Loans [Member] | Impaired Loans With Related Allowance Recorded [Member] | Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 59,050 | 67,269 | 59,050 | 67,269 | |||
Unpaid Principal Balance | 60,338 | 68,151 | 60,338 | 68,151 | |||
Related Allowance | 15,536 | 19,439 | 15,536 | 19,439 | |||
Average Recorded Investment | 58,923 | 68,330 | 59,447 | 69,227 | |||
Interest Income Recognized | 345 | 331 | 662 | 658 | |||
Permanent Mortgage Portfolio Segment [Member] | Impaired Loans With No Related Allowance Recorded [Member] | Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | [1] | 4,280 | 6,403 | 4,280 | 6,403 | ||
Unpaid Principal Balance | [1] | 6,657 | 8,603 | 6,657 | 8,603 | ||
Related Allowance | [1] | 0 | 0 | 0 | 0 | ||
Average Recorded Investment | [1] | 4,161 | 6,804 | 4,298 | 7,018 | ||
Interest Income Recognized | [1] | 0 | 0 | 0 | 0 | ||
Permanent Mortgage Portfolio Segment [Member] | Impaired Loans With Related Allowance Recorded [Member] | Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 91,602 | 100,754 | 91,602 | 100,754 | |||
Unpaid Principal Balance | 104,243 | 113,290 | 104,243 | 113,290 | |||
Related Allowance | 15,583 | 17,857 | 15,583 | 17,857 | |||
Average Recorded Investment | 92,218 | 102,194 | 93,725 | 103,555 | |||
Interest Income Recognized | 541 | 637 | 1,058 | 1,228 | |||
Credit Card Other [Member] | Impaired Loans With Related Allowance Recorded [Member] | Consumer [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Recorded Investment | 356 | 418 | 356 | 418 | |||
Unpaid Principal Balance | 356 | 418 | 356 | 418 | |||
Related Allowance | 147 | 155 | 147 | 155 | |||
Average Recorded Investment | 351 | 451 | 355 | 479 | |||
Interest Income Recognized | $ 3 | $ 4 | $ 6 | $ 8 | |||
|
Loans (Balances Of Commercial Loan Portfolio Classes, Disaggregated By PD Grade) (Details) $ in Thousands |
Jun. 30, 2016
USD ($)
number
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Jun. 30, 2015
USD ($)
number
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|||
---|---|---|---|---|---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Allowance for loan losses | $ 199,807 | $ 204,034 | $ 210,242 | $ 221,351 | $ 228,328 | $ 232,448 | |||
Total loans collectively evaluated for impairment | 18,248,021 | 16,559,020 | |||||||
Total loans individually evaluated for impairment | 319,322 | 347,901 | |||||||
Allowance - collectively evaluated for impairment | 146,829 | 145,587 | |||||||
Allowance - individually evaluated for impairment | 52,151 | 72,980 | |||||||
Allowance - purchased credit impaired loans | 827 | 2,784 | |||||||
Purchase credit impaired loans - recorded investment | 21,994 | 29,851 | |||||||
General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Total loans collectively evaluated for impairment | 8,585,754 | 7,666,733 | |||||||
Total loans individually evaluated for impairment | 48,173 | 42,951 | |||||||
Total commercial loans | 8,644,473 | 7,714,731 | |||||||
Purchase credit impaired loans - recorded investment | 10,546 | 5,047 | |||||||
Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Total loans collectively evaluated for impairment | 2,227,171 | 1,799,665 | |||||||
Total loans individually evaluated for impairment | 0 | 0 | |||||||
Total commercial loans | 2,227,171 | 1,799,665 | |||||||
Purchase credit impaired loans - recorded investment | 0 | 0 | |||||||
TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Total loans collectively evaluated for impairment | [1] | 304,527 | 305,382 | ||||||
Total loans individually evaluated for impairment | [1] | 3,274 | 12,785 | ||||||
Total commercial loans | [1] | 307,801 | 318,167 | ||||||
LOCOM valuation allowance | $ 25,500 | $ 26,200 | |||||||
Highest internal grade | number | 13 | 13 | |||||||
Purchase credit impaired loans - recorded investment | [1] | $ 0 | $ 0 | ||||||
Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Total loans collectively evaluated for impairment | 1,886,266 | 1,348,127 | |||||||
Total loans individually evaluated for impairment | 6,922 | 10,975 | |||||||
Total commercial loans | 1,902,387 | 1,379,714 | |||||||
Purchase credit impaired loans - recorded investment | 9,199 | 20,612 | |||||||
Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Total loans collectively evaluated for impairment | 65,040 | 17,719 | |||||||
Total loans individually evaluated for impairment | 1,376 | 1,518 | |||||||
Total commercial loans | 67,025 | 21,001 | |||||||
Purchase credit impaired loans - recorded investment | $ 609 | $ 1,764 | |||||||
Commercial Portfolio Segment [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Percent of total commercial loans | 100.00% | 100.00% | |||||||
Allowance for loan losses | $ 111,236 | $ 100,242 | |||||||
Total loans collectively evaluated for impairment | 13,068,758 | 11,137,626 | |||||||
Total loans individually evaluated for impairment | 59,745 | 68,229 | |||||||
Total commercial loans | 13,148,857 | 11,233,278 | |||||||
Allowance - collectively evaluated for impairment | 106,235 | 84,389 | |||||||
Allowance - individually evaluated for impairment | 4,510 | 13,562 | |||||||
Allowance - purchased credit impaired loans | $ 491 | $ 2,291 | |||||||
Percent of loan collectively evaluated for impairment | 99.00% | 99.00% | |||||||
Percent of loan individually evaluated for impairment | 1.00% | 1.00% | |||||||
Purchase credit impaired loans - recorded investment | $ 20,354 | $ 27,423 | |||||||
Percent of loan purchased-credit impaired | 0.00% | 0.00% | |||||||
Commercial Loan P D Grade One [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 539,335 | $ 496,409 | |||||||
Percent of total commercial loans | 4.00% | 4.00% | |||||||
Allowance for loan losses | $ 109 | $ 126 | |||||||
Commercial Loan P D Grade One [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 538,386 | 495,855 | |||||||
Commercial Loan P D Grade One [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 0 | 0 | |||||||
Commercial Loan P D Grade One [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade One [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 949 | 554 | |||||||
Commercial Loan P D Grade One [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 0 | 0 | |||||||
Commercial Loan P D Grade Two [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 719,918 | $ 601,971 | |||||||
Percent of total commercial loans | 5.00% | 5.00% | |||||||
Allowance for loan losses | $ 389 | $ 332 | |||||||
Commercial Loan P D Grade Two [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 709,997 | 590,328 | |||||||
Commercial Loan P D Grade Two [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 0 | 0 | |||||||
Commercial Loan P D Grade Two [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Two [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 9,806 | 11,602 | |||||||
Commercial Loan P D Grade Two [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 115 | 41 | |||||||
Commercial Loan P D Grade Three [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 1,022,337 | $ 886,287 | |||||||
Percent of total commercial loans | 8.00% | 8.00% | |||||||
Allowance for loan losses | $ 261 | $ 350 | |||||||
Commercial Loan P D Grade Three [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 425,912 | 484,072 | |||||||
Commercial Loan P D Grade Three [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 436,545 | 317,856 | |||||||
Commercial Loan P D Grade Three [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Three [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 159,880 | 84,178 | |||||||
Commercial Loan P D Grade Three [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 0 | 181 | |||||||
Commercial Loan P D Grade Four [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 1,627,517 | $ 1,134,506 | |||||||
Percent of total commercial loans | 12.00% | 10.00% | |||||||
Allowance for loan losses | $ 1,076 | $ 868 | |||||||
Commercial Loan P D Grade Four [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 985,360 | 670,972 | |||||||
Commercial Loan P D Grade Four [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 422,844 | 366,791 | |||||||
Commercial Loan P D Grade Four [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Four [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 219,102 | 96,689 | |||||||
Commercial Loan P D Grade Four [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 211 | 54 | |||||||
Commercial Loan P D Grade Five [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 1,604,205 | $ 1,658,774 | |||||||
Percent of total commercial loans | 12.00% | 15.00% | |||||||
Allowance for loan losses | $ 6,203 | $ 6,372 | |||||||
Commercial Loan P D Grade Five [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 1,094,829 | 1,135,773 | |||||||
Commercial Loan P D Grade Five [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 248,926 | 304,500 | |||||||
Commercial Loan P D Grade Five [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Five [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 259,861 | 213,213 | |||||||
Commercial Loan P D Grade Five [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 589 | 5,288 | |||||||
Commercial Loan P D Grade Six [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 2,306,930 | $ 2,114,331 | |||||||
Percent of total commercial loans | 18.00% | 20.00% | |||||||
Allowance for loan losses | $ 9,654 | $ 10,234 | |||||||
Commercial Loan P D Grade Six [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 1,156,675 | 1,223,233 | |||||||
Commercial Loan P D Grade Six [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 837,453 | 618,616 | |||||||
Commercial Loan P D Grade Six [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Six [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 290,774 | 267,983 | |||||||
Commercial Loan P D Grade Six [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 22,028 | 4,499 | |||||||
Commercial Loan P D Grade Seven [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 2,016,958 | $ 1,694,381 | |||||||
Percent of total commercial loans | 15.00% | 15.00% | |||||||
Allowance for loan losses | $ 14,307 | $ 13,203 | |||||||
Commercial Loan P D Grade Seven [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 1,399,125 | 1,186,480 | |||||||
Commercial Loan P D Grade Seven [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 172,039 | 139,217 | |||||||
Commercial Loan P D Grade Seven [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Seven [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 437,637 | 365,840 | |||||||
Commercial Loan P D Grade Seven [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 8,157 | 2,844 | |||||||
Commercial Loan P D Grade Eight [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 1,158,931 | $ 941,748 | |||||||
Percent of total commercial loans | 9.00% | 8.00% | |||||||
Allowance for loan losses | $ 20,979 | $ 13,942 | |||||||
Commercial Loan P D Grade Eight [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 803,708 | 749,504 | |||||||
Commercial Loan P D Grade Eight [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 46,947 | 28,068 | |||||||
Commercial Loan P D Grade Eight [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Eight [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 303,946 | 163,904 | |||||||
Commercial Loan P D Grade Eight [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 4,330 | 272 | |||||||
Commercial Loan P D Grade Nine [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 658,111 | $ 488,439 | |||||||
Percent of total commercial loans | 5.00% | 4.00% | |||||||
Allowance for loan losses | $ 12,885 | $ 7,900 | |||||||
Commercial Loan P D Grade Nine [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 564,474 | 419,687 | |||||||
Commercial Loan P D Grade Nine [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 6,661 | 24,617 | |||||||
Commercial Loan P D Grade Nine [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Nine [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 82,351 | 43,752 | |||||||
Commercial Loan P D Grade Nine [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 4,625 | 383 | |||||||
Commercial Loan P D Grade Ten [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 372,042 | $ 250,841 | |||||||
Percent of total commercial loans | 3.00% | 2.00% | |||||||
Allowance for loan losses | $ 5,637 | $ 5,147 | |||||||
Commercial Loan P D Grade Ten [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 258,486 | 222,799 | |||||||
Commercial Loan P D Grade Ten [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 38,285 | 0 | |||||||
Commercial Loan P D Grade Ten [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Ten [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 61,260 | 27,840 | |||||||
Commercial Loan P D Grade Ten [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 14,011 | 202 | |||||||
Commercial Loan P D Grade Eleven [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 264,983 | $ 204,220 | |||||||
Percent of total commercial loans | 2.00% | 2.00% | |||||||
Allowance for loan losses | $ 6,971 | $ 5,438 | |||||||
Commercial Loan P D Grade Eleven [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 222,391 | 179,139 | |||||||
Commercial Loan P D Grade Eleven [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 17,390 | 0 | |||||||
Commercial Loan P D Grade Eleven [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Eleven [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 20,364 | 24,010 | |||||||
Commercial Loan P D Grade Eleven [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 4,838 | 1,071 | |||||||
Commercial Loan P D Grade Twelve [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 130,873 | $ 94,636 | |||||||
Percent of total commercial loans | 1.00% | 1.00% | |||||||
Allowance for loan losses | $ 4,337 | $ 2,704 | |||||||
Commercial Loan P D Grade Twelve [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 111,980 | 76,209 | |||||||
Commercial Loan P D Grade Twelve [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 0 | 0 | |||||||
Commercial Loan P D Grade Twelve [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Twelve [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 14,530 | 17,884 | |||||||
Commercial Loan P D Grade Twelve [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 4,363 | 543 | |||||||
Commercial Loan P D Grade Thirteen [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 469,294 | $ 432,164 | |||||||
Percent of total commercial loans | 4.00% | 4.00% | |||||||
Allowance for loan losses | $ 5,669 | $ 4,944 | |||||||
Commercial Loan P D Grade Thirteen [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 157,028 | 122,862 | |||||||
Commercial Loan P D Grade Thirteen [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 0 | 0 | |||||||
Commercial Loan P D Grade Thirteen [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 304,527 | 305,382 | ||||||
Commercial Loan P D Grade Thirteen [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 7,437 | 3,633 | |||||||
Commercial Loan P D Grade Thirteen [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 302 | 287 | |||||||
Commercial Loan P D Grade Fourteen Fifteen Sixteen [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 177,324 | $ 138,919 | |||||||
Percent of total commercial loans | 1.00% | 1.00% | |||||||
Allowance for loan losses | $ 17,758 | $ 12,829 | |||||||
Commercial Loan P D Grade Fourteen Fifteen Sixteen [Member] | General C I [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 157,403 | 109,820 | |||||||
Commercial Loan P D Grade Fourteen Fifteen Sixteen [Member] | Loans To Mortgage Companies [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 81 | 0 | |||||||
Commercial Loan P D Grade Fourteen Fifteen Sixteen [Member] | TRUPs [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | [1] | 0 | 0 | ||||||
Commercial Loan P D Grade Fourteen Fifteen Sixteen [Member] | Income C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | 18,369 | 27,045 | |||||||
Commercial Loan P D Grade Fourteen Fifteen Sixteen [Member] | Residential C R E [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Commercial loan, Disaggregated by PD grade | $ 1,471 | $ 2,054 | |||||||
|
Loans (Loans by FICO Score, Consumer) (Details) |
Jun. 30, 2016 |
Jun. 30, 2015 |
|||
---|---|---|---|---|---|
HELOC [Member] | FICO score greater than or equal to 740 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 56.30% | 54.70% | |||
HELOC [Member] | FICO score 720-739 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 8.60% | 9.20% | |||
HELOC [Member] | FICO score 700-719 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 9.00% | 9.00% | |||
HELOC [Member] | FICO score 660-699 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 13.00% | 13.20% | |||
HELOC [Member] | FICO score 620-659 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 6.20% | 6.40% | |||
HELOC [Member] | FICO score less than 620 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | [1] | 6.90% | 7.50% | ||
HELOC [Member] | Total | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 100.00% | 100.00% | |||
R/E Installment Loans [Member] | FICO score greater than or equal to 740 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 68.90% | 66.60% | |||
R/E Installment Loans [Member] | FICO score 720-739 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 8.80% | 8.50% | |||
R/E Installment Loans [Member] | FICO score 700-719 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 6.80% | 7.40% | |||
R/E Installment Loans [Member] | FICO score 660-699 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 9.00% | 9.60% | |||
R/E Installment Loans [Member] | FICO score 620-659 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 3.70% | 3.90% | |||
R/E Installment Loans [Member] | FICO score less than 620 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | [1] | 2.80% | 4.00% | ||
R/E Installment Loans [Member] | Total | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 100.00% | 100.00% | |||
Permanent Mortgage Portfolio Segment | FICO score greater than or equal to 740 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 43.80% | 44.20% | |||
Permanent Mortgage Portfolio Segment | FICO score 720-739 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 10.90% | 9.30% | |||
Permanent Mortgage Portfolio Segment | FICO score 700-719 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 9.30% | 9.00% | |||
Permanent Mortgage Portfolio Segment | FICO score 660-699 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 17.60% | 16.90% | |||
Permanent Mortgage Portfolio Segment | FICO score 620-659 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 9.60% | 8.60% | |||
Permanent Mortgage Portfolio Segment | FICO score less than 620 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | [1] | 8.80% | 12.00% | ||
Permanent Mortgage Portfolio Segment | Total | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Average refreshed FICO score percentage | 100.00% | 100.00% | |||
|
Loans (Accruing And Non-Accruing Loans By Class) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Loans, net of unearned income | [1] | $ 18,589,337 | $ 17,686,502 | $ 16,936,772 | ||||||||||
Commercial Financial And Industrial Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 11,148,941 | 9,788,990 | ||||||||||||
Total Non-Accruing | 30,504 | 43,573 | ||||||||||||
Loans, net of unearned income | 11,179,445 | 10,436,390 | 9,832,563 | |||||||||||
Consumer Real Estate Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 4,533,783 | 4,755,746 | ||||||||||||
Total Non-Accruing | 106,996 | 114,525 | ||||||||||||
Loans, net of unearned income | [2] | 4,640,779 | 4,766,518 | 4,870,271 | ||||||||||
Commercial Real Estate Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 1,961,620 | 1,388,969 | ||||||||||||
Total Non-Accruing | 7,792 | 11,746 | ||||||||||||
Loans, net of unearned income | 1,969,412 | 1,674,935 | 1,400,715 | |||||||||||
Permanent Mortgage Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 408,434 | 455,206 | ||||||||||||
Total Non-Accruing | 30,580 | 32,473 | ||||||||||||
Loans, net of unearned income | 439,014 | 454,123 | 487,679 | |||||||||||
Credit Card And Other Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 359,962 | 344,795 | ||||||||||||
Total Non-Accruing | 725 | 749 | ||||||||||||
Loans, net of unearned income | 360,687 | $ 354,536 | 345,544 | |||||||||||
General C I [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 8,606,778 | 7,679,015 | ||||||||||||
Total Non-Accruing | 27,149 | 30,669 | ||||||||||||
Loans, net of unearned income | 8,633,927 | 7,709,684 | ||||||||||||
Loans To Mortgage Companies [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 2,227,090 | 1,799,546 | ||||||||||||
Total Non-Accruing | 81 | 119 | ||||||||||||
Loans, net of unearned income | 2,227,171 | 1,799,665 | ||||||||||||
TRUPs [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 304,527 | [3] | 305,382 | [4] | ||||||||||
Total Non-Accruing | 3,274 | [3] | 12,785 | [4] | ||||||||||
Loans, net of unearned income | 307,801 | [3] | 318,167 | [4] | ||||||||||
LOCOM valuation allowance | 25,500 | 26,200 | ||||||||||||
Income C R E [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 1,886,191 | 1,347,356 | ||||||||||||
Total Non-Accruing | 6,997 | 11,746 | ||||||||||||
Loans, net of unearned income | 1,893,188 | 1,359,102 | ||||||||||||
Residential C R E [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 65,621 | 19,237 | ||||||||||||
Total Non-Accruing | 795 | 0 | ||||||||||||
Loans, net of unearned income | 66,416 | 19,237 | ||||||||||||
Home Equity [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 1,818,764 | 2,182,369 | ||||||||||||
Total Non-Accruing | 74,454 | 80,131 | ||||||||||||
Loans, net of unearned income | 1,893,218 | 2,262,500 | ||||||||||||
R E Installment Loans [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 2,713,435 | 2,570,957 | ||||||||||||
Total Non-Accruing | 32,542 | 34,394 | ||||||||||||
Loans, net of unearned income | 2,745,977 | 2,605,351 | ||||||||||||
Credit Card | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 192,765 | 185,207 | ||||||||||||
Total Non-Accruing | 0 | 0 | ||||||||||||
Loans, net of unearned income | 192,765 | 185,207 | ||||||||||||
Other Consumer Loans Class | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 167,141 | 159,580 | ||||||||||||
Total Non-Accruing | 725 | 749 | ||||||||||||
Loans, net of unearned income | 167,866 | 160,329 | ||||||||||||
C&I Purchase Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 10,546 | 5,047 | ||||||||||||
Total Non-Accruing | 0 | 0 | ||||||||||||
Loans, net of unearned income | 10,546 | 5,047 | ||||||||||||
CRE Purchase Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 9,808 | 22,376 | ||||||||||||
Total Non-Accruing | 0 | 0 | ||||||||||||
Loans, net of unearned income | 9,808 | 22,376 | ||||||||||||
RE Installment Purchase Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 1,584 | 2,420 | ||||||||||||
Total Non-Accruing | 0 | 0 | ||||||||||||
Loans, net of unearned income | 1,584 | 2,420 | ||||||||||||
Other Purchased Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Total Accruing | 56 | 8 | ||||||||||||
Total Non-Accruing | 0 | 0 | ||||||||||||
Loans, net of unearned income | 56 | 8 | ||||||||||||
Accruing | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 18,353,950 | 16,662,261 | ||||||||||||
Total Accruing | 18,412,740 | 16,733,706 | ||||||||||||
Accruing | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 38,551 | 48,924 | ||||||||||||
Accruing | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 20,239 | 22,521 | ||||||||||||
Accruing | Commercial Financial And Industrial Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 11,144,307 | 9,781,398 | ||||||||||||
Accruing | Commercial Financial And Industrial Portfolio Segment [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 4,095 | 6,700 | ||||||||||||
Accruing | Commercial Financial And Industrial Portfolio Segment [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 539 | 892 | ||||||||||||
Accruing | Consumer Real Estate Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 4,496,538 | 4,709,869 | ||||||||||||
Accruing | Consumer Real Estate Portfolio Segment [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 26,286 | 31,416 | ||||||||||||
Accruing | Consumer Real Estate Portfolio Segment [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 10,959 | 14,461 | ||||||||||||
Accruing | Commercial Real Estate Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 1,958,730 | 1,385,792 | ||||||||||||
Accruing | Commercial Real Estate Portfolio Segment [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 1,497 | 3,039 | ||||||||||||
Accruing | Commercial Real Estate Portfolio Segment [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 1,393 | 138 | ||||||||||||
Accruing | Permanent Mortgage Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 398,712 | 444,187 | ||||||||||||
Accruing | Permanent Mortgage Portfolio Segment [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 3,719 | 5,450 | ||||||||||||
Accruing | Permanent Mortgage Portfolio Segment [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 6,003 | 5,569 | ||||||||||||
Accruing | Credit Card And Other Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 355,663 | 341,015 | ||||||||||||
Accruing | Credit Card And Other Portfolio Segment [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 2,954 | 2,319 | ||||||||||||
Accruing | Credit Card And Other Portfolio Segment [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 1,345 | 1,461 | ||||||||||||
Accruing | General C I [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 8,603,288 | 7,673,986 | ||||||||||||
Accruing | General C I [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 3,415 | 4,830 | ||||||||||||
Accruing | General C I [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 75 | 199 | ||||||||||||
Accruing | Loans To Mortgage Companies [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 2,226,841 | 1,797,877 | ||||||||||||
Accruing | Loans To Mortgage Companies [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 249 | 1,669 | ||||||||||||
Accruing | Loans To Mortgage Companies [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Accruing | TRUPs [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 304,527 | [3] | 305,382 | [4] | ||||||||||
Accruing | TRUPs [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | [3] | 0 | [4] | ||||||||||
Accruing | TRUPs [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | [3] | 0 | [4] | ||||||||||
Accruing | Income C R E [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 1,885,005 | 1,344,440 | ||||||||||||
Accruing | Income C R E [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 1,186 | 2,916 | ||||||||||||
Accruing | Income C R E [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Accruing | Residential C R E [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 65,621 | 19,114 | ||||||||||||
Accruing | Residential C R E [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 123 | ||||||||||||
Accruing | Residential C R E [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Accruing | Home Equity [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 1,792,492 | 2,150,344 | ||||||||||||
Accruing | Home Equity [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 18,345 | 22,240 | ||||||||||||
Accruing | Home Equity [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 7,927 | 9,785 | ||||||||||||
Accruing | R E Installment Loans [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 2,702,710 | 2,557,513 | ||||||||||||
Accruing | R E Installment Loans [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 7,851 | 9,172 | ||||||||||||
Accruing | R E Installment Loans [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 2,874 | 4,272 | ||||||||||||
Accruing | Credit Card | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 189,555 | 182,477 | ||||||||||||
Accruing | Credit Card | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 2,116 | 1,446 | ||||||||||||
Accruing | Credit Card | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 1,094 | 1,284 | ||||||||||||
Accruing | Other Consumer Loans Class | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 166,052 | 158,530 | ||||||||||||
Accruing | Other Consumer Loans Class | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 838 | 873 | ||||||||||||
Accruing | Other Consumer Loans Class | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 251 | 177 | ||||||||||||
Accruing | C&I Purchase Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 9,651 | 4,153 | ||||||||||||
Accruing | C&I Purchase Credit Impaired Loans | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 431 | 201 | ||||||||||||
Accruing | C&I Purchase Credit Impaired Loans | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 464 | 693 | ||||||||||||
Accruing | CRE Purchase Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 8,104 | 22,238 | ||||||||||||
Accruing | CRE Purchase Credit Impaired Loans | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 311 | 0 | ||||||||||||
Accruing | CRE Purchase Credit Impaired Loans | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 1,393 | 138 | ||||||||||||
Accruing | RE Installment Purchase Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 1,336 | 2,012 | ||||||||||||
Accruing | RE Installment Purchase Credit Impaired Loans | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 90 | 4 | ||||||||||||
Accruing | RE Installment Purchase Credit Impaired Loans | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 158 | 404 | ||||||||||||
Accruing | Other Purchased Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 56 | 8 | ||||||||||||
Accruing | Other Purchased Credit Impaired Loans | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Accruing | Other Purchased Credit Impaired Loans | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 103,555 | 123,200 | ||||||||||||
Total Non-Accruing | 176,597 | 203,066 | ||||||||||||
Non-Accruing | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 13,863 | 13,674 | ||||||||||||
Non-Accruing | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 59,179 | 66,192 | ||||||||||||
Non-Accruing | Commercial Financial And Industrial Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 2,868 | 13,781 | ||||||||||||
Non-Accruing | Commercial Financial And Industrial Portfolio Segment [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 2,366 | 2,536 | ||||||||||||
Non-Accruing | Commercial Financial And Industrial Portfolio Segment [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 25,270 | 27,256 | ||||||||||||
Non-Accruing | Consumer Real Estate Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 85,516 | 92,639 | ||||||||||||
Non-Accruing | Consumer Real Estate Portfolio Segment [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 7,979 | 7,116 | ||||||||||||
Non-Accruing | Consumer Real Estate Portfolio Segment [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 13,501 | 14,770 | ||||||||||||
Non-Accruing | Commercial Real Estate Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 2,186 | 1,285 | ||||||||||||
Non-Accruing | Commercial Real Estate Portfolio Segment [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 2,041 | ||||||||||||
Non-Accruing | Commercial Real Estate Portfolio Segment [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 5,606 | 8,420 | ||||||||||||
Non-Accruing | Permanent Mortgage Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 12,985 | 15,495 | ||||||||||||
Non-Accruing | Permanent Mortgage Portfolio Segment [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 3,518 | 1,981 | ||||||||||||
Non-Accruing | Permanent Mortgage Portfolio Segment [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 14,077 | 14,997 | ||||||||||||
Non-Accruing | Credit Card And Other Portfolio Segment [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 0 | 0 | ||||||||||||
Non-Accruing | Credit Card And Other Portfolio Segment [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | Credit Card And Other Portfolio Segment [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 725 | 749 | ||||||||||||
Non-Accruing | General C I [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 2,868 | 13,781 | ||||||||||||
Non-Accruing | General C I [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 2,366 | 2,536 | ||||||||||||
Non-Accruing | General C I [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 21,915 | 14,352 | ||||||||||||
Non-Accruing | Loans To Mortgage Companies [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 0 | 0 | ||||||||||||
Non-Accruing | Loans To Mortgage Companies [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | Loans To Mortgage Companies [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 81 | 119 | ||||||||||||
Non-Accruing | TRUPs [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 0 | [3] | 0 | [4] | ||||||||||
Non-Accruing | TRUPs [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | [3] | 0 | [4] | ||||||||||
Non-Accruing | TRUPs [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 3,274 | [3] | 12,785 | [4] | ||||||||||
Non-Accruing | Income C R E [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 2,186 | 1,285 | ||||||||||||
Non-Accruing | Income C R E [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 2,041 | ||||||||||||
Non-Accruing | Income C R E [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 4,811 | 8,420 | ||||||||||||
Non-Accruing | Residential C R E [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 0 | 0 | ||||||||||||
Non-Accruing | Residential C R E [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | Residential C R E [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 795 | 0 | ||||||||||||
Non-Accruing | Home Equity [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 59,310 | 65,345 | ||||||||||||
Non-Accruing | Home Equity [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 5,318 | 5,243 | ||||||||||||
Non-Accruing | Home Equity [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 9,826 | 9,543 | ||||||||||||
Non-Accruing | R E Installment Loans [Member] | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 26,206 | 27,294 | ||||||||||||
Non-Accruing | R E Installment Loans [Member] | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 2,661 | 1,873 | ||||||||||||
Non-Accruing | R E Installment Loans [Member] | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 3,675 | 5,227 | ||||||||||||
Non-Accruing | Credit Card | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 0 | 0 | ||||||||||||
Non-Accruing | Credit Card | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | Credit Card | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | Other Consumer Loans Class | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 0 | 0 | ||||||||||||
Non-Accruing | Other Consumer Loans Class | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | Other Consumer Loans Class | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 725 | 749 | ||||||||||||
Non-Accruing | C&I Purchase Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 0 | 0 | ||||||||||||
Non-Accruing | C&I Purchase Credit Impaired Loans | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | C&I Purchase Credit Impaired Loans | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | CRE Purchase Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 0 | 0 | ||||||||||||
Non-Accruing | CRE Purchase Credit Impaired Loans | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | CRE Purchase Credit Impaired Loans | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | RE Installment Purchase Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 0 | 0 | ||||||||||||
Non-Accruing | RE Installment Purchase Credit Impaired Loans | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | RE Installment Purchase Credit Impaired Loans | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | Other Purchased Credit Impaired Loans | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current | 0 | 0 | ||||||||||||
Non-Accruing | Other Purchased Credit Impaired Loans | 30-89 Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | 0 | 0 | ||||||||||||
Non-Accruing | Other Purchased Credit Impaired Loans | 90+ Days Past Due | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Past due | $ 0 | $ 0 | ||||||||||||
|
Loans (Schedule Of Troubled Debt Restructurings Occurring During The Year) (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016
USD ($)
number
|
Jun. 30, 2015
USD ($)
number
|
Jun. 30, 2016
USD ($)
number
|
Jun. 30, 2015
USD ($)
number
|
|
General C I [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 4 | 0 | 5 | 2 |
Pre-Modification Outstanding Recorded Investment | $ 19,175 | $ 0 | $ 19,883 | $ 1,388 |
Post-Modification Outstanding Recorded Investment | $ 18,067 | $ 0 | $ 18,775 | $ 1,325 |
Commercial Financial And Industrial Portfolio Segment [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 4 | 0 | 5 | 2 |
Pre-Modification Outstanding Recorded Investment | $ 19,175 | $ 0 | $ 19,883 | $ 1,388 |
Post-Modification Outstanding Recorded Investment | $ 18,067 | $ 0 | $ 18,775 | $ 1,325 |
Home Equity [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 53 | 65 | 152 | 102 |
Pre-Modification Outstanding Recorded Investment | $ 5,258 | $ 7,237 | $ 12,698 | $ 10,964 |
Post-Modification Outstanding Recorded Investment | $ 5,246 | $ 7,147 | $ 12,616 | $ 10,854 |
R E Installment Loans [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 19 | 22 | 34 | 38 |
Pre-Modification Outstanding Recorded Investment | $ 3,326 | $ 1,912 | $ 4,224 | $ 3,266 |
Post-Modification Outstanding Recorded Investment | $ 3,614 | $ 1,916 | $ 4,509 | $ 3,293 |
Consumer Real Estate Portfolio Segment [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 72 | 87 | 186 | 140 |
Pre-Modification Outstanding Recorded Investment | $ 8,584 | $ 9,149 | $ 16,922 | $ 14,230 |
Post-Modification Outstanding Recorded Investment | $ 8,860 | $ 9,063 | $ 17,125 | $ 14,147 |
Permanent Mortgage Portfolio Segment [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 4 | 4 | 4 | 6 |
Pre-Modification Outstanding Recorded Investment | $ 841 | $ 1,718 | $ 841 | $ 2,039 |
Post-Modification Outstanding Recorded Investment | $ 840 | $ 1,733 | $ 840 | $ 2,054 |
Credit Card And Other Portfolio Segment [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 1 | 6 | 5 | 12 |
Pre-Modification Outstanding Recorded Investment | $ 2 | $ 20 | $ 21 | $ 48 |
Post-Modification Outstanding Recorded Investment | $ 2 | $ 19 | $ 20 | $ 46 |
Troubled Debt Restructurings [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 81 | 97 | 200 | 160 |
Pre-Modification Outstanding Recorded Investment | $ 28,602 | $ 10,887 | $ 37,667 | $ 17,705 |
Post-Modification Outstanding Recorded Investment | $ 27,769 | $ 10,815 | $ 36,760 | $ 17,572 |
Loans (Schedule Of Troubled Debt Restructurings Within The Previous 12 Months) (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016
USD ($)
number
|
Jun. 30, 2015
USD ($)
number
|
Jun. 30, 2016
USD ($)
number
|
Jun. 30, 2015
USD ($)
number
|
|
Residential C R E [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 0 | 1 | 0 | 1 |
Recorded Investment | $ | $ 0 | $ 896 | $ 0 | $ 896 |
Home Equity [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 1 | 6 | 2 | 7 |
Recorded Investment | $ | $ 102 | $ 278 | $ 138 | $ 308 |
R E Installment Loans [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 1 | 1 | 1 | 2 |
Recorded Investment | $ | $ 180 | $ 26 | $ 180 | $ 112 |
Commercial Real Estate Portfolio Segment [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 0 | 1 | 0 | 1 |
Recorded Investment | $ | $ 0 | $ 896 | $ 0 | $ 896 |
Consumer Real Estate Portfolio Segment [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 2 | 7 | 3 | 9 |
Recorded Investment | $ | $ 282 | $ 304 | $ 318 | $ 420 |
Credit Card And Other Portfolio Segment [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 0 | 2 | 0 | 3 |
Recorded Investment | $ | $ 0 | $ 5 | $ 0 | $ 8 |
Troubled Debt Restructurings That Subsequently Defaulted [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number | number | 2 | 10 | 3 | 13 |
Recorded Investment | $ | $ 282 | $ 1,205 | $ 318 | $ 1,324 |
Allowance For Loan Losses (Rollforward Of The Allowance For Loan Losses By Portfolio Segment) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Beginning Balance | $ 204,034 | $ 228,328 | $ 210,242 | $ 232,448 | ||||||
Charge-offs | (18,296) | (19,434) | (35,908) | (37,433) | ||||||
Recoveries | 10,069 | 10,457 | 18,473 | 19,336 | ||||||
Provision for loan losses | 4,000 | 2,000 | 7,000 | 7,000 | ||||||
Ending Balance | 199,807 | 221,351 | 199,807 | 221,351 | ||||||
Allowance - individually evaluated for impairment | 52,151 | 72,980 | 52,151 | 72,980 | ||||||
Allowance - collectively evaluated for impairment | 146,829 | 145,587 | 146,829 | 145,587 | ||||||
Allowance - purchased credit impaired loans | 827 | 2,784 | 827 | 2,784 | ||||||
Individually evaluated for impairment | 319,322 | 347,901 | 319,322 | 347,901 | ||||||
Collectively evaluated for impairment | 18,248,021 | 16,559,020 | 18,248,021 | 16,559,020 | ||||||
Purchase credit impaired loans - recorded investment | 21,994 | 29,851 | 21,994 | 29,851 | ||||||
Loans, net of unearned income | [1] | 18,589,337 | 16,936,772 | 18,589,337 | 16,936,772 | $ 17,686,502 | ||||
Commercial Financial And Industrial Portfolio Segment | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Beginning Balance | 80,887 | 67,652 | 73,637 | 67,011 | ||||||
Charge-offs | (7,869) | (4,976) | (14,394) | (8,531) | ||||||
Recoveries | 1,602 | 926 | 2,382 | 2,879 | ||||||
Provision for loan losses | 6,352 | 15,148 | 19,347 | 17,391 | ||||||
Ending Balance | 80,972 | 78,750 | 80,972 | 78,750 | ||||||
Allowance - individually evaluated for impairment | 4,076 | 12,927 | 4,076 | 12,927 | ||||||
Allowance - collectively evaluated for impairment | 76,786 | 65,646 | 76,786 | 65,646 | ||||||
Allowance - purchased credit impaired loans | 110 | 177 | 110 | 177 | ||||||
Individually evaluated for impairment | 51,447 | 55,736 | 51,447 | 55,736 | ||||||
Collectively evaluated for impairment | 11,117,452 | 9,771,780 | 11,117,452 | 9,771,780 | ||||||
Purchase credit impaired loans - recorded investment | 10,546 | 5,047 | 10,546 | 5,047 | ||||||
Loans, net of unearned income | 11,179,445 | 9,832,563 | 11,179,445 | 9,832,563 | 10,436,390 | |||||
Commercial Real Estate Portfolio Segment | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Beginning Balance | 25,626 | 17,665 | 25,159 | 18,574 | ||||||
Charge-offs | (51) | (888) | (693) | (1,675) | ||||||
Recoveries | 909 | 153 | 1,131 | 844 | ||||||
Provision for loan losses | 3,780 | 4,562 | 4,667 | 3,749 | ||||||
Ending Balance | 30,264 | 21,492 | 30,264 | 21,492 | ||||||
Allowance - individually evaluated for impairment | 434 | 635 | 434 | 635 | ||||||
Allowance - collectively evaluated for impairment | 29,449 | 18,743 | 29,449 | 18,743 | ||||||
Allowance - purchased credit impaired loans | 381 | 2,114 | 381 | 2,114 | ||||||
Individually evaluated for impairment | 8,298 | 12,493 | 8,298 | 12,493 | ||||||
Collectively evaluated for impairment | 1,951,306 | 1,365,846 | 1,951,306 | 1,365,846 | ||||||
Purchase credit impaired loans - recorded investment | 9,808 | 22,376 | 9,808 | 22,376 | ||||||
Loans, net of unearned income | 1,969,412 | 1,400,715 | 1,969,412 | 1,400,715 | 1,674,935 | |||||
Consumer Real Estate Portfolio Segment | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Beginning Balance | 67,321 | 109,245 | 80,614 | 113,011 | ||||||
Charge-offs | (6,582) | (6,903) | (13,508) | (15,440) | ||||||
Recoveries | 6,082 | 7,851 | 11,817 | 12,575 | ||||||
Provision for loan losses | (7,740) | (24,736) | (19,842) | (24,689) | ||||||
Ending Balance | 59,081 | 85,457 | 59,081 | 85,457 | ||||||
Allowance - individually evaluated for impairment | 31,911 | 41,406 | 31,911 | 41,406 | ||||||
Allowance - collectively evaluated for impairment | 26,834 | 43,558 | 26,834 | 43,558 | ||||||
Allowance - purchased credit impaired loans | 336 | 493 | 336 | 493 | ||||||
Individually evaluated for impairment | 163,339 | 172,097 | 163,339 | 172,097 | ||||||
Collectively evaluated for impairment | 4,475,856 | 4,695,754 | 4,475,856 | 4,695,754 | ||||||
Purchase credit impaired loans - recorded investment | 1,584 | 2,420 | 1,584 | 2,420 | ||||||
Loans, net of unearned income | [2] | 4,640,779 | 4,870,271 | 4,640,779 | 4,870,271 | 4,766,518 | ||||
Permanent Mortgage Portfolio Segment | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Beginning Balance | 18,754 | 20,186 | 18,947 | 19,122 | ||||||
Charge-offs | (349) | (809) | (461) | (1,993) | ||||||
Recoveries | 484 | 671 | 1,263 | 1,289 | ||||||
Provision for loan losses | (1,289) | 2,329 | (2,149) | 3,959 | ||||||
Ending Balance | 17,600 | 22,377 | 17,600 | 22,377 | ||||||
Allowance - individually evaluated for impairment | 15,583 | 17,857 | 15,583 | 17,857 | ||||||
Allowance - collectively evaluated for impairment | 2,017 | 4,520 | 2,017 | 4,520 | ||||||
Allowance - purchased credit impaired loans | 0 | 0 | 0 | 0 | ||||||
Individually evaluated for impairment | 95,882 | 107,157 | 95,882 | 107,157 | ||||||
Collectively evaluated for impairment | 343,132 | 380,522 | 343,132 | 380,522 | ||||||
Purchase credit impaired loans - recorded investment | 0 | 0 | 0 | 0 | ||||||
Loans, net of unearned income | 439,014 | 487,679 | 439,014 | 487,679 | 454,123 | |||||
Credit Card & Other | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Beginning Balance | 11,446 | 13,580 | 11,885 | 14,730 | ||||||
Charge-offs | (3,445) | (5,858) | (6,852) | (9,794) | ||||||
Recoveries | 992 | 856 | 1,880 | 1,749 | ||||||
Provision for loan losses | 2,897 | 4,697 | 4,977 | 6,590 | ||||||
Ending Balance | 11,890 | 13,275 | 11,890 | 13,275 | ||||||
Allowance - individually evaluated for impairment | 147 | 155 | 147 | 155 | ||||||
Allowance - collectively evaluated for impairment | 11,743 | 13,120 | 11,743 | 13,120 | ||||||
Allowance - purchased credit impaired loans | 0 | 0 | 0 | 0 | ||||||
Individually evaluated for impairment | 356 | 418 | 356 | 418 | ||||||
Collectively evaluated for impairment | 360,275 | 345,118 | 360,275 | 345,118 | ||||||
Purchase credit impaired loans - recorded investment | 56 | 8 | 56 | 8 | ||||||
Loans, net of unearned income | $ 360,687 | $ 345,544 | $ 360,687 | $ 345,544 | $ 354,536 | |||||
|
Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
[1] | Jun. 30, 2015 |
Dec. 31, 2014 |
||
---|---|---|---|---|---|---|---|
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||
Gross carrying amount of other intangible assets | $ 72,300 | ||||||
Intangible assets accumulated amortization | 48,700 | ||||||
Future Amortization Expense, Remainder of Fiscal Year | 2,600 | ||||||
Estimated aggregate amortization expense, Year 2017 | 4,900 | ||||||
Estimated aggregate amortization expense, Year 2018 | 4,700 | ||||||
Estimated aggregate amortization expense, Year 2019 | 4,500 | ||||||
Estimated aggregate amortization expense, Year 2020 | 1,700 | ||||||
Estimated aggregate amortization expense, Year 2021 | 1,600 | ||||||
Goodwill [Line Items] | |||||||
Goodwill | 191,307 | $ 191,307 | $ 145,932 | $ 145,932 | |||
Non Strategic [Member] | |||||||
Goodwill [Line Items] | |||||||
Gross goodwill | 200,000 | ||||||
Accumulated impairments | 114,100 | ||||||
Accumulated divestiture related write-offs | 85,900 | ||||||
Goodwill | $ 0 | ||||||
|
Intangible Assets (Summary Of Intangible Assets, Net Of Accumulated Amortization Included In The Consolidated Statements) (Details) - USD ($) $ in Thousands |
6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ||||||||
Goodwill, Beginning balance | $ 191,307 | [1] | $ 145,932 | |||||
Goodwill, Amortization expense | 0 | 0 | ||||||
Goodwill, Ending balance | 191,307 | 145,932 | ||||||
Other Intangible Assets, Beginning Balance | [2] | 26,215 | [1] | 29,518 | ||||
Other Intangible Assets, Amortization expense | [2] | (2,599) | (2,596) | |||||
Other Intangible Assets, Ending Balance | [2] | $ 23,616 | $ 26,922 | |||||
|
Intangible Assets (Summary Of Gross Goodwill And Accumulated Impairment Losses And Write-Offs Detailed By Reportable Segments) (Details) - USD ($) $ in Thousands |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
[1] | Dec. 31, 2014 |
|||
Goodwill [Line Items] | |||||||
Goodwill | $ 191,307 | $ 145,932 | $ 191,307 | $ 145,932 | |||
Additions | 0 | 0 | |||||
Impairments | 0 | 0 | |||||
Divestitures | 0 | 0 | |||||
Regional Banking [Member] | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 93,303 | 47,928 | 93,303 | 47,928 | |||
Additions | 0 | 0 | |||||
Impairments | 0 | 0 | |||||
Divestitures | 0 | 0 | |||||
Fixed Income [Member] | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 98,004 | 98,004 | $ 98,004 | $ 98,004 | |||
Additions | 0 | 0 | |||||
Impairments | 0 | 0 | |||||
Divestitures | $ 0 | $ 0 | |||||
|
Other Income And Other Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|||
All other income and commissions: | ||||||
ATM interchange fees | $ 2,879 | $ 3,025 | $ 5,837 | $ 5,786 | ||
Electronic banking fees | 1,381 | 1,459 | 2,778 | 2,887 | ||
Letter of credit fees | 1,115 | 1,532 | 2,176 | 2,655 | ||
Deferred compensation | [1] | 795 | (35) | 1,124 | 998 | |
Mortgage banking | 598 | 376 | 1,871 | 1,960 | ||
Other | 2,005 | 6,421 | 5,076 | 9,546 | ||
Total | 8,773 | 12,778 | 18,862 | 23,832 | ||
All other expense: | ||||||
Litigation and regulatory matters | 26,000 | 0 | 25,525 | 162,500 | ||
Travel and entertainment | 2,495 | 2,632 | 4,557 | 4,246 | ||
Customer relations | 1,483 | 1,505 | 3,362 | 2,819 | ||
Employee training and dues | 1,338 | 1,449 | 2,728 | 2,581 | ||
Supplies | 930 | 880 | 1,956 | 1,807 | ||
Tax credit investments | 831 | 549 | 1,537 | 944 | ||
Miscellaneous loan costs | 565 | 734 | 1,282 | 1,095 | ||
Other | 10,624 | 9,307 | 22,343 | 17,730 | ||
Total | $ 44,266 | $ 17,056 | $ 63,290 | $ 193,722 | ||
|
Components of Other Comprehensive Income/(loss) (Schedule of Changes in AOCI) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Beginning Balance | $ (170,441) | $ (169,159) | $ (214,192) | $ (188,246) | ||||
Net unrealized gains/(losses) | 17,637 | (20,100) | 61,656 | (2,096) | ||||
Amounts reclassifed from AOCI | 470 | 1,011 | 202 | 2,094 | ||||
Other comprehensive income/(loss) | 18,107 | (19,089) | 61,858 | [1] | (2) | [1] | ||
Ending Balance | (152,334) | (188,248) | (152,334) | (188,248) | ||||
Securities AFS | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Beginning Balance | 42,554 | 36,585 | 3,394 | 18,581 | ||||
Net unrealized gains/(losses) | 16,037 | (20,100) | 56,217 | (2,096) | ||||
Amounts reclassifed from AOCI | 0 | 0 | (1,020) | 0 | ||||
Other comprehensive income/(loss) | 16,037 | (20,100) | 55,197 | (2,096) | ||||
Ending Balance | 58,591 | 16,485 | 58,591 | 16,485 | ||||
Cash Flow Hedges | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Beginning Balance | 3,465 | 0 | 0 | 0 | ||||
Net unrealized gains/(losses) | 1,600 | 0 | 5,439 | 0 | ||||
Amounts reclassifed from AOCI | (374) | 0 | (748) | 0 | ||||
Other comprehensive income/(loss) | 1,226 | 0 | 4,691 | 0 | ||||
Ending Balance | 4,691 | 0 | 4,691 | 0 | ||||
Pension and Postretirement Plans | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Beginning Balance | (216,460) | (205,744) | (217,586) | (206,827) | ||||
Net unrealized gains/(losses) | 0 | 0 | 0 | 0 | ||||
Amounts reclassifed from AOCI | 844 | 1,011 | 1,970 | 2,094 | ||||
Other comprehensive income/(loss) | 844 | 1,011 | 1,970 | 2,094 | ||||
Ending Balance | $ (215,616) | $ (204,733) | $ (215,616) | $ (204,733) | ||||
|
Components of Other Comprehensive Income/(loss) (Schedule of Reclassification from AOCI) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Amounts reclassifed from AOCI | $ 470 | $ 1,011 | $ 202 | $ 2,094 |
Securities AFS | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Realized gains/(losses) | 0 | 0 | (1,654) | 0 |
Tax expense/(benefit) | 0 | 0 | 634 | 0 |
Amounts reclassifed from AOCI | 0 | 0 | (1,020) | 0 |
Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Realized gains/(losses) | (607) | 0 | (1,213) | 0 |
Tax expense/(benefit) | 233 | 0 | 465 | 0 |
Amounts reclassifed from AOCI | (374) | 0 | (748) | 0 |
Pension and Postretirement Plans | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Realized gains/(losses) | 1,369 | 1,647 | 3,195 | 3,412 |
Tax expense/(benefit) | (525) | (636) | (1,225) | (1,318) |
Amounts reclassifed from AOCI | $ 844 | $ 1,011 | $ 1,970 | $ 2,094 |
Earnings Per Share (Schedule Of Reconciliation Of Net Income/(Loss) to Net Income/(Loss) Available to Common Shareholders) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|||
Earnings Per Share [Abstract] | ||||||
Net income/(loss) | $ 60,940 | $ 54,957 | $ 113,153 | $ (17,448) | ||
Net income attributable to noncontrolling interest | 2,852 | 2,851 | 5,703 | 5,609 | ||
Net income/(loss) attributable to controlling interest | 58,088 | 52,106 | 107,450 | (23,057) | ||
Preferred stock dividends | 1,550 | 1,550 | 3,100 | 3,100 | ||
Net income/(loss) available to common shareholders | $ 56,538 | $ 50,556 | $ 104,350 | $ (26,157) | ||
Weighted average common shares outstanding - basic | 231,573,000 | 232,800,000 | 233,112,000 | 232,808,000 | ||
Effect of dilutive securities | [1] | 2,003,000 | 1,869,000 | 2,009,000 | 0 | |
Weighted average common shares outstanding - diluted | 233,576,000 | 234,669,000 | 235,121,000 | 232,808,000 | ||
Net income/(loss) per share available to common shareholders | $ 0.24 | $ 0.22 | $ 0.45 | $ (0.11) | ||
Diluted income/(loss) per share available to common shareholders | $ 0.24 | $ 0.22 | $ 0.44 | $ (0.11) | ||
|
Earnings Per Share (Schedule Of Anti-Dilutive Options and Awards) (Details) - $ / shares shares in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
[1] | |||
Earnings Per Share [Abstract] | |||||||
Anti-dilutive stock options | 3,842 | 3,597 | 3,804 | 7,763 | |||
Weighted average exercise price of anti-dilutive stock options | $ 22.68 | $ 24.26 | $ 23.06 | $ 17.17 | |||
Anti-dilutive other equity awards | 959 | 51 | 867 | 2,167 | |||
|
Contingencies And Other Disclosures (Narrative I) (Details) shares in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
number
shares
|
Jun. 30, 2015
USD ($)
|
Dec. 31, 2008
USD ($)
|
Dec. 31, 2007
USD ($)
|
Mar. 31, 2008
shares
|
|
Loss Contingencies [Line Items] | |||||
Estimated Litigation Liability | $ 40,400,000 | ||||
Number of GSEs to which conventional conforming single-family mortgage loans were predominately sold to | number | 2 | ||||
Percent Of Repurchase Make Whole Claims Related To Private Whole Loan Sales | 90.00% | ||||
Loan-to-value ratio at origination | 80.00% | ||||
Accrued losses on loan repurchase exposure | $ 68,100,000 | $ 117,200,000 | |||
Mortgage loans originated and sold to agencies | $ 69,500,000,000 | ||||
Loans sold to GSEs | 57,600,000,000 | ||||
Loans Guaranteed By Ginnie Mae | $ 11,900,000,000 | ||||
Loans included in FH proprietary securitizations | $ 26,700,000,000 | ||||
Fha Insured [Member] | |||||
Loss Contingencies [Line Items] | |||||
Amount Of Insurance Recoveries Company Is Pursuing | 75,000,000 | ||||
Litigation Settlement Expense | 212,500,000 | ||||
Mortgage Securitization Litigation [Member] | |||||
Loss Contingencies [Line Items] | |||||
Investment in proprietary securitizations subject to lawsuits | 145,700,000 | ||||
Investment in proprietary securitizations subject to indemnifications | $ 510,100,000 | ||||
Visa Class B Shares [Member] | |||||
Loss Contingencies [Line Items] | |||||
Number of Visa Class B shares | shares | 1.1 | 2.4 | |||
Estimated conversion ratio | 165.00% | ||||
Contingent liability | $ 800,000 | ||||
Derivative liability | 6,800,000 | $ 4,800,000 | |||
Historical cost | 0 | ||||
Value of holdings of Visa Class B Shares if converted into Class A shares at the current conversion ratio | 136,000,000 | ||||
Subservicer expenditure reimbursement amount disputed | |||||
Loss Contingencies [Line Items] | |||||
Actual damages sought by plaintiff | 43,500,000 | ||||
Minimum | |||||
Loss Contingencies [Line Items] | |||||
Estimated reasonably possible losses in excess of currently established liabilities | 0 | ||||
Minimum | Debit Transaction Sequencing Matter [Member] | |||||
Loss Contingencies [Line Items] | |||||
Actual damages sought by plaintiff | 5,000,000 | ||||
Maximum | |||||
Loss Contingencies [Line Items] | |||||
Estimated reasonably possible losses in excess of currently established liabilities | $ 73,000,000 |
Pension, Savings, And Other Employee Benefits (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Estimated social security benefits age | 65 years | |||
First Horizon National Corporation | Expected reduction to interest cost in 2016 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ (5.8) | |||
Non Qualified Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to non-qualified plans | $ 4.9 | |||
Expected pension contribution | $ 5.2 | |||
Savings Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer investment in qualified defined contribution plan | 100.00% | 100.00% | ||
Maximum percent of employee pre-tax contributions that may be matched by the Company | 6.00% | 6.00% | ||
Pension Benefits [Member] | First Horizon National Corporation | Expected reduction to interest cost in 2016 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected pension contribution | $ 165.0 |
Pension, Savings, And Other Employee Benefits (Schedule Of Components Of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Pension Plans Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 10 | $ 10 | $ 20 | $ 20 |
Interest cost | 7,882 | 9,020 | 15,764 | 18,040 |
Expected return on plan assets | (9,772) | (9,391) | (19,545) | (18,783) |
Amortization of unrecognized, Prior service cost/(credit) | 50 | 83 | 99 | 166 |
Amortization of unrecognized, Actuarial (gain)/loss | 2,067 | 2,395 | 4,135 | 4,791 |
Net periodic benefit cost | 237 | 2,117 | 473 | 4,234 |
Other Postretirement Benefit Plans Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 27 | 38 | 55 | 75 |
Interest cost | 317 | 360 | 634 | 720 |
Expected return on plan assets | (229) | (242) | (458) | (483) |
Amortization of unrecognized, Prior service cost/(credit) | 42 | (291) | 85 | (582) |
Amortization of unrecognized, Actuarial (gain)/loss | (232) | (244) | (465) | (488) |
Net periodic benefit cost | $ (75) | $ (379) | $ (149) | $ (758) |
Business Segment Information (Amounts Of Consolidated Revenue, Expense, Tax And Assets) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Segment Reporting Information [Line Items] | ||||
Net interest income | $ 176,264 | $ 166,640 | $ 348,338 | $ 323,506 |
Provision/(provision credit) for loan losses | 4,000 | 2,000 | 7,000 | 7,000 |
Noninterest income | 145,514 | 130,301 | 279,819 | 259,990 |
Noninterest expense | 226,822 | 218,394 | 453,749 | 594,615 |
Income/(loss) before income taxes | 90,956 | 76,547 | 167,408 | (18,119) |
Provision/(benefit) for income taxes | 30,016 | 21,590 | 54,255 | (671) |
Net income/(loss) | 60,940 | 54,957 | 113,153 | (17,448) |
Average assets | 26,828,548 | 25,411,578 | 26,723,621 | 25,526,120 |
Regional Banking [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net interest income | 178,321 | 165,903 | 350,634 | 320,311 |
Provision/(provision credit) for loan losses | 10,883 | 17,078 | 25,650 | 21,993 |
Noninterest income | 61,275 | 65,983 | 120,551 | 126,179 |
Noninterest expense | 164,315 | 143,960 | 309,666 | 279,437 |
Income/(loss) before income taxes | 64,398 | 70,848 | 135,869 | 145,060 |
Provision/(benefit) for income taxes | 22,455 | 25,086 | 47,881 | 51,582 |
Net income/(loss) | 41,943 | 45,762 | 87,988 | 93,478 |
Average assets | 16,575,676 | 15,021,991 | 16,260,430 | 14,626,026 |
Fixed Income [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net interest income | 3,147 | 4,293 | 5,813 | 8,613 |
Noninterest income | 78,083 | 56,002 | 145,205 | 117,566 |
Noninterest expense | 62,881 | 51,253 | 121,549 | 105,992 |
Income/(loss) before income taxes | 18,349 | 9,042 | 29,469 | 20,187 |
Provision/(benefit) for income taxes | 6,755 | 3,154 | 10,630 | 7,298 |
Net income/(loss) | 11,594 | 5,888 | 18,839 | 12,889 |
Average assets | 2,470,699 | 2,417,317 | 2,370,179 | 2,432,194 |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net interest income | (15,850) | (17,366) | (30,214) | (33,440) |
Noninterest income | 4,909 | 3,901 | 10,632 | 9,286 |
Noninterest expense | 16,072 | 14,061 | 29,551 | 28,403 |
Income/(loss) before income taxes | (27,013) | (27,526) | (49,133) | (52,557) |
Provision/(benefit) for income taxes | (12,840) | (15,991) | (24,094) | (27,694) |
Net income/(loss) | (14,173) | (11,535) | (25,039) | (24,863) |
Average assets | 5,833,122 | 5,562,880 | 6,097,578 | 5,985,074 |
Non Strategic [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net interest income | 10,646 | 13,810 | 22,105 | 28,022 |
Provision/(provision credit) for loan losses | (6,883) | (15,078) | (18,650) | (14,993) |
Noninterest income | 1,247 | 4,415 | 3,431 | 6,959 |
Noninterest expense | (16,446) | 9,120 | (7,017) | 180,783 |
Income/(loss) before income taxes | 35,222 | 24,183 | 51,203 | (130,809) |
Provision/(benefit) for income taxes | 13,646 | 9,341 | 19,838 | (31,857) |
Net income/(loss) | 21,576 | 14,842 | 31,365 | (98,952) |
Average assets | $ 1,949,051 | $ 2,409,390 | $ 1,995,434 | $ 2,482,826 |
Variable Interest Entities (Summary Of VIE Consolidated By FHN) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
||
---|---|---|---|---|---|---|---|---|
Assets: | ||||||||
Cash and due from banks | $ 283,648 | $ 300,811 | $ 274,256 | |||||
Loans, net of unearned income | [1] | 18,589,337 | 17,686,502 | 16,936,772 | ||||
Allowance for loan losses | 199,807 | $ 204,034 | 210,242 | 221,351 | $ 228,328 | $ 232,448 | ||
Total net loans | 18,389,530 | 17,476,260 | 16,715,421 | |||||
Other assets | 1,387,756 | 1,436,291 | 1,405,961 | |||||
Total assets | 27,541,070 | 26,192,637 | 25,237,392 | |||||
Liabilities: | ||||||||
Term borrowings | 1,076,943 | 1,312,677 | 1,555,272 | |||||
Other liabilities | 588,636 | 635,306 | 574,090 | |||||
Total liabilities | 24,849,146 | $ 23,553,051 | 22,719,487 | |||||
On Balance Sheet Consumer Loan Securitizations [Member] | ||||||||
Assets: | ||||||||
Cash and due from banks | 396 | 1,382 | ||||||
Loans, net of unearned income | 43,479 | 66,444 | ||||||
Allowance for loan losses | 453 | 214 | ||||||
Total net loans | 43,026 | 66,230 | ||||||
Other assets | 241 | 184 | ||||||
Total assets | 43,663 | 67,796 | ||||||
Liabilities: | ||||||||
Term borrowings | 30,956 | 55,679 | ||||||
Other liabilities | 2 | 3 | ||||||
Total liabilities | 30,958 | 55,682 | ||||||
Rabbi Trusts Used For Deferred Compensation Plans [Member] | ||||||||
Assets: | ||||||||
Other assets | 71,923 | 69,077 | ||||||
Total assets | 71,923 | 69,077 | ||||||
Liabilities: | ||||||||
Other liabilities | 53,000 | 51,861 | ||||||
Total liabilities | $ 53,000 | $ 51,861 | ||||||
|
Variable Interest Entities (Summary of the Impact of Qualifying LIHTC Investments) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Low income housing tax credits [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Amortization of qualifying LIHTC investments | $ 2,330 | $ 2,180 | $ 4,628 | $ 4,360 |
Affordable Housing Tax Credits and Other Tax Benefits | (2,534) | (2,363) | (5,057) | (4,726) |
Other tax benefits related to qualifying LIHTC investments [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Affordable Housing Tax Credits and Other Tax Benefits | $ (1,069) | $ (755) | $ (2,179) | $ (1,599) |
Variable Interest Entities (Summary Of VIE Not Consolidated By FHN) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
|||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loans, net of unearned income | [1] | $ 18,589,337 | $ 17,686,502 | $ 16,936,772 | ||||||||||||||||||||||||||||||||||||||||||||||
Term borrowings | 1,076,943 | 1,312,677 | 1,555,272 | |||||||||||||||||||||||||||||||||||||||||||||||
Trading securities | 1,162,959 | 881,450 | 1,133,490 | |||||||||||||||||||||||||||||||||||||||||||||||
Securities available for sale, Fair Value | 4,009,243 | [2] | $ 3,929,846 | 3,648,860 | [3] | |||||||||||||||||||||||||||||||||||||||||||||
Low Income Housing Partnerships [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum Loss Exposure | 64,807 | [4] | 68,405 | [5] | ||||||||||||||||||||||||||||||||||||||||||||||
Maximum loss exposure, contractual funding commitments | 11,300 | 12,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Liability Recognized | 11,285 | [4] | 11,976 | [5] | ||||||||||||||||||||||||||||||||||||||||||||||
Low Income Housing Partnerships [Member] | Other Assets [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum loss exposure, current investments | 53,500 | 56,400 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Tax Credit Investments [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum Loss Exposure | 20,370 | [6],[7] | 21,690 | [8],[9] | ||||||||||||||||||||||||||||||||||||||||||||||
Liability Recognized | 0 | [6],[7] | 0 | [8],[9] | ||||||||||||||||||||||||||||||||||||||||||||||
Other Tax Credit Investments [Member] | Other Assets [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum loss exposure, current investments | 18,000 | 18,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Small Issuer Trust Preferred Holdings [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum Loss Exposure | 333,341 | [10] | 344,321 | [11] | ||||||||||||||||||||||||||||||||||||||||||||||
Liability Recognized | 0 | [10] | 0 | [11] | ||||||||||||||||||||||||||||||||||||||||||||||
On Balance Sheet Trust Preferred Securitization [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum Loss Exposure | 49,603 | [12] | 50,506 | [13] | ||||||||||||||||||||||||||||||||||||||||||||||
Liability Recognized | 64,571 | [12] | 63,686 | [13] | ||||||||||||||||||||||||||||||||||||||||||||||
Loans, net of unearned income | 112,500 | 112,500 | ||||||||||||||||||||||||||||||||||||||||||||||||
Term borrowings | 64,600 | 63,700 | ||||||||||||||||||||||||||||||||||||||||||||||||
Trading securities | 1,700 | 1,700 | ||||||||||||||||||||||||||||||||||||||||||||||||
Proprietary Trust Preferred Issuances [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Liability Recognized | [14] | 206,186 | ||||||||||||||||||||||||||||||||||||||||||||||||
Proprietary & Agency Residential Mortgage Securitizations [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum Loss Exposure | 19,548 | [15] | 24,664 | [16] | ||||||||||||||||||||||||||||||||||||||||||||||
Liability Recognized | 0 | [15] | 0 | [16] | ||||||||||||||||||||||||||||||||||||||||||||||
Trading securities | 2,800 | 4,900 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total MSR recognized by FHN | 300 | 600 | ||||||||||||||||||||||||||||||||||||||||||||||||
Proprietary & Agency Residential Mortgage Securitizations [Member] | Other Assets [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate servicing advances | 16,400 | 19,100 | ||||||||||||||||||||||||||||||||||||||||||||||||
Holdings Of Agency Mortgage Backed Securities [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum Loss Exposure | 4,385,552 | [10],[17] | 3,929,684 | [11],[18] | ||||||||||||||||||||||||||||||||||||||||||||||
Liability Recognized | 0 | [10],[17] | 0 | [11],[18] | ||||||||||||||||||||||||||||||||||||||||||||||
Trading securities | 600,000 | 473,800 | ||||||||||||||||||||||||||||||||||||||||||||||||
Securities available for sale, Fair Value | 3,800,000 | 3,500,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Short Positions In Agency Mortgage Backed Securities [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Liability Recognized | [14] | 1,563 | 1,486 | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial Loan Troubled Debt Restructurings [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum Loss Exposure | 39,765 | [19] | 36,047 | [20],[21] | ||||||||||||||||||||||||||||||||||||||||||||||
Maximum loss exposure, contractual funding commitments | 100 | 5,100 | ||||||||||||||||||||||||||||||||||||||||||||||||
Liability Recognized | 0 | [19] | 0 | [20],[21] | ||||||||||||||||||||||||||||||||||||||||||||||
Loans, net of unearned income | 39,700 | $ 30,900 | ||||||||||||||||||||||||||||||||||||||||||||||||
Sale Leaseback Transaction [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum Loss Exposure | [22] | 11,827 | ||||||||||||||||||||||||||||||||||||||||||||||||
Liability Recognized | [22] | $ 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Derivatives (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2016 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Collateral cash receivables | $ 90,000 | $ 80,600 | $ 90,000 | $ 80,600 | ||
Collateral cash payables | 42,800 | 41,100 | 42,800 | 41,100 | ||
Total trading revenues | $ 69,300 | 46,700 | 126,900 | 100,200 | ||
Noncallable senior debt maturing date | Dec. 15, 2020 | |||||
Other Long-term Debt | $ 1,076,943 | 1,555,272 | 1,076,943 | 1,555,272 | $ 1,312,677 | |
Hedged amount of foreign currency denominated loans | 1,500 | 3,500 | 1,500 | 3,500 | ||
Gains/(loss) on extinguishment of debt | 0 | $ 5,800 | ||||
Visa Class B Shares [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Derivative liabilities related to sale | $ 6,800 | 4,800 | 6,800 | 4,800 | ||
First Tennessee Bank National Association [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Noncallable senior debt maturing date | Dec. 01, 2019 | |||||
Long Term Debt Hedged With Fair Value Interest Rate Derivatives Using Shortcut Method [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Net fair value of interest rate derivatives hedging | 9,100 | 9,100 | ||||
Other Long-term Debt | 250,000 | 250,000 | ||||
Long Term Debt Hedged With Fair Value Interest Rate Derivatives Using Long Haul Method [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Net fair value of interest rate derivatives hedging | $ 11,600 | 4,500 | 11,600 | 4,500 | ||
Other Long-term Debt | 500,000 | 500,000 | 500,000 | 500,000 | ||
Long Term Debt Hedged With Fair Value Interest Rate Derivatives Using Long Haul Method [Member] | First Tennessee Bank National Association [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Net fair value of interest rate derivatives hedging | 12,900 | 2,300 | 12,900 | 2,300 | ||
Other Long-term Debt | 400,000 | 400,000 | 400,000 | 400,000 | ||
Subordinated Debentures Subject To Mandatory Redemption Amounts Redeemed [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Net fair value of interest rate derivatives hedging subordinated debt | 5,100 | 5,100 | ||||
Other Long-term Debt | 200,000 | 200,000 | ||||
Additional Derivative Agreements [Member] | Derivative Instruments With Accelerated Termination Provisions [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Collateral received | 168,000 | 144,200 | 168,000 | 144,200 | ||
Securities posted collateral | 33,200 | 23,300 | 33,200 | 23,300 | ||
Net fair value of derivative assets with adjustable posting thresholds | 94,600 | 72,500 | 94,600 | 72,500 | ||
Net fair value of derivative liabilities with adjustable posting thresholds | 30,700 | 17,000 | 30,700 | 17,000 | ||
Additional Derivative Agreements [Member] | Derivative Instruments With Adjustable Collateral Posting Thresholds [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Collateral received | 168,000 | 144,200 | 168,000 | 144,200 | ||
Securities posted collateral | 81,300 | 71,900 | 81,300 | 71,900 | ||
Net fair value of derivative assets with adjustable posting thresholds | 95,000 | 72,500 | 95,000 | 72,500 | ||
Net fair value of derivative liabilities with adjustable posting thresholds | 81,300 | $ 71,600 | 81,300 | $ 71,600 | ||
Trust Preferred Loans [Member] | Cash Flow Hedge | Hedged Items [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Hedged held-to-maturity trust preferred loans principal balance | $ 250,000 | $ 250,000 |
Derivatives (Derivatives Associated with Fixed Income Trading Activities) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Customer Interest Rate Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional | $ 1,877,212 | $ 1,640,844 |
Assets | 95,612 | 66,078 |
Liabilities | 473 | 3,285 |
Offsetting Upstream Interest Rate Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional | 1,877,212 | 1,640,844 |
Assets | 473 | 3,285 |
Liabilities | 95,612 | 66,078 |
Put Option [Member] | LongMember | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional | 10,000 | 15,000 |
Assets | 13 | 55 |
Liabilities | 0 | 0 |
Forwards And Futures Purchased [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional | 4,428,569 | 2,297,489 |
Assets | 19,437 | 2,773 |
Liabilities | 1,653 | 2,174 |
Forwards And Futures Sold [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional | 4,587,802 | 2,531,248 |
Assets | 2,136 | 2,526 |
Liabilities | $ 17,965 | $ 2,614 |
Derivatives (Derivatives Associated With Interest Rate Risk Management Activities) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Term borrowings | $ 1,076,943 | $ 1,555,272 | $ 1,076,943 | $ 1,555,272 | $ 1,312,677 | |||||||||
Customer Interest Rate Contracts [Member] | ||||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Notional | 1,877,212 | 1,640,844 | 1,877,212 | 1,640,844 | ||||||||||
Assets | 95,612 | 66,078 | 95,612 | 66,078 | ||||||||||
Liabilities | 473 | 3,285 | 473 | 3,285 | ||||||||||
Customer Interest Rate Contracts [Member] | Customer Interest Rate Contracts Hedging [Member] | Hedging Instruments And Hedged Items [Member] | ||||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Notional | [1] | 906,197 | 744,167 | 906,197 | 744,167 | |||||||||
Assets | [1] | 47,086 | 24,148 | 47,086 | 24,148 | |||||||||
Liabilities | [1] | 115 | 409 | 115 | 409 | |||||||||
Gains/(Losses) | [1] | 8,154 | (6,158) | 20,713 | (1,915) | |||||||||
Offsetting Upstream Interest Rate Contracts [Member] | ||||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Notional | 1,877,212 | 1,640,844 | 1,877,212 | 1,640,844 | ||||||||||
Assets | 473 | 3,285 | 473 | 3,285 | ||||||||||
Liabilities | 95,612 | 66,078 | 95,612 | 66,078 | ||||||||||
Offsetting Upstream Interest Rate Contracts [Member] | Customer Interest Rate Contracts Hedging [Member] | Hedging Instruments And Hedged Items [Member] | ||||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Notional | [1] | 906,197 | 744,167 | 906,197 | 744,167 | |||||||||
Assets | [1] | 115 | 409 | 115 | 409 | |||||||||
Liabilities | [1] | 47,586 | 24,648 | 47,586 | 24,648 | |||||||||
Gains/(Losses) | [1] | (8,154) | 6,158 | (20,713) | 1,915 | |||||||||
Interest Rate Swap [Member] | Debt [Member] | Hedging Instruments [Member] | ||||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Notional | [2] | 900,000 | 1,350,000 | 900,000 | 1,350,000 | |||||||||
Assets | [2] | 24,511 | 15,954 | 24,511 | 15,954 | |||||||||
Liabilities | [2] | 5,131 | 5,131 | |||||||||||
Gains/(Losses) | [2] | 6,660 | (10,810) | 26,606 | (9,840) | |||||||||
Long Term Debt [Member] | Debt [Member] | Hedged Items [Member] | ||||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Term borrowings | [2],[3] | 900,000 | 1,350,000 | 900,000 | 1,350,000 | |||||||||
Gains/(Losses) related to term borrowings | [2],[4] | $ (6,557) | $ 10,735 | $ (26,211) | $ 9,812 | |||||||||
|
Derivatives (Derivatives Associated With Cash Flow Hedges) (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
|||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Gain/Loss expected to be reclassified to earnings in the next twelve months | $ 1,700 | |||||
Hedging Instruments [Member] | Interest Rate Swap [Member] | Cash Flow Hedge | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Notional | 250,000 | $ 250,000 | ||||
Assets | 7,606 | 7,606 | ||||
Gains/(Losses) | 1,988 | [1] | 7,606 | [1] | ||
Hedged Items [Member] | Trust Preferred Loans [Member] | Cash Flow Hedge | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Held-To-Maturity Trust Preferred Loans Principal Balance | $ 250,000 | $ 250,000 | ||||
|
Derivatives (Schedule Of Derivative Activities Associated With Trust Preferred Loans) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Loans, net of unearned income | [1] | $ 18,589,337 | $ 16,936,772 | $ 18,589,337 | $ 16,936,772 | $ 17,686,502 | ||||||||
Hedging Instruments [Member] | Loan Portfolio Hedging [Member] | Interest Rate Swap [Member] | ||||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Notional | 6,500 | 6,500 | 6,500 | 6,500 | ||||||||||
Interest Rate Derivative Liabilities at Fair Value | 379 | 640 | 379 | 640 | ||||||||||
Gains/(Losses) | 66 | 63 | 109 | 104 | ||||||||||
Hedged Items [Member] | Loan Portfolio Hedging [Member] | Trust Preferred Loans [Member] | ||||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Loans, net of unearned income | [2],[3] | 6,500 | 6,500 | 6,500 | 6,500 | |||||||||
Gains/(Losses) | [2],[4] | $ (65) | $ (62) | $ (106) | $ (103) | |||||||||
|
Derivative Assets And Collateral Received (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
|||||
---|---|---|---|---|---|---|---|---|
Derivative [Line Items] | ||||||||
Gross amounts of recognized assets | $ 196,989 | $ 104,365 | $ 115,230 | |||||
Derivative Assets not subject to master netting agreements | 21,600 | 5,400 | ||||||
Derivatives, Interest Rate Contracts | Subject to Master Netting Agreements | ||||||||
Derivative [Line Items] | ||||||||
Gross amounts of recognized assets | [1] | 175,403 | 109,874 | |||||
Gross amounts offset in the Statement of Condition | [1] | 0 | 0 | |||||
Net amounts of assets presented in the Statement of Condition | [1],[2] | 175,403 | 109,874 | |||||
Derivative liabilities available for offset | [1] | (13,963) | (15,750) | |||||
Collateral Received | [1] | (141,426) | (93,656) | |||||
Net amount | [1] | $ 20,014 | $ 468 | |||||
|
Derivative Liabilities and Collateral Pledged (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
|||||
---|---|---|---|---|---|---|---|---|
Derivative [Line Items] | ||||||||
Gross amounts of recognized liabilities | $ 170,619 | $ 108,339 | $ 109,815 | |||||
Derivative Liabilities not subject to master netting agreements | 26,500 | 9,600 | ||||||
Derivatives, Interest Rate Contracts | Subject to Master Netting Agreements | ||||||||
Derivative [Line Items] | ||||||||
Gross amounts of recognized liabilities | [1] | 144,165 | 100,191 | |||||
Gross amounts offset in the Statement of Condition | [1] | 0 | 0 | |||||
Net amounts of liabilities presented in the Statement of Condition | [1],[2] | 144,165 | 100,191 | |||||
Derivative assets available for offset | [1] | (13,963) | (15,750) | |||||
Collateral pledged | [1] | (67,682) | (68,775) | |||||
Net amount | [1] | $ 62,520 | $ 15,666 | |||||
|
Securities Purchased Under Agreements To Resell And Collateral Pledged By Company (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Securities Purchased under Agreements to Resell [Abstract] | |||
Gross amounts of recognized assets | $ 881,732 | $ 816,991 | |
Gross amounts offset in the Statement of Condition | 0 | 0 | |
Net amounts of assets presented in the Statement of Condition | 881,732 | $ 615,773 | 816,991 |
Offsetting securities sold under agreements to repurchase | (2,137) | (3,605) | |
Securities collateral (not recognized on FHN's Statement of Condition) | (870,795) | (805,178) | |
Net amount | $ 8,800 | $ 8,208 |
Securities Sold Under Agreements To Repurchase And Collateral Pledged By Counterparties (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Securities Sold Under Agreements To Repurchase [Abstract] | |||
Gross amounts of recognized liabilities | $ 451,129 | $ 311,760 | |
Gross amounts offset in the statement of Condition | 0 | 0 | |
Net amounts of liabilities presented in the Statement of Condition | 451,129 | $ 338,133 | 311,760 |
Offsetting securities purchased under agreements to resell | (2,137) | (3,605) | |
Securities Collateral | (448,894) | (308,088) | |
Net amount | $ 98 | $ 67 |
Schedule of the Remaining Contractual Maturity by Collateral Type of Securities Sold Under Agreements To Repurchase (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | $ 451,129 | $ 338,133 | $ 311,760 |
U.S. treasuries | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 28,218 | 15,175 | |
Government agency issued MBS | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 408,861 | 93,697 | |
Government agency issued CMO | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 14,050 | 202,888 | |
Overnight and Continuous | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 336,775 | 299,310 | |
Overnight and Continuous | U.S. treasuries | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 28,218 | 15,175 | |
Overnight and Continuous | Government agency issued MBS | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 308,557 | 93,697 | |
Overnight and Continuous | Government agency issued CMO | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 0 | 190,438 | |
Up to 30 Days | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 14,050 | 12,450 | |
Up to 30 Days | U.S. treasuries | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 0 | 0 | |
Up to 30 Days | Government agency issued MBS | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 0 | 0 | |
Up to 30 Days | Government agency issued CMO | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 14,050 | 12,450 | |
30 - 90 Days | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 100,304 | 0 | |
30 - 90 Days | U.S. treasuries | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 0 | 0 | |
30 - 90 Days | Government agency issued MBS | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | 100,304 | 0 | |
30 - 90 Days | Government agency issued CMO | |||
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items] | |||
Securities sold under agreements to repurchase | $ 0 | $ 0 |
Fair Value Of Assets And Liabilities (Narrative) (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
|
Mar. 31, 2016
USD ($)
|
Jun. 30, 2015
USD ($)
|
Jun. 30, 2016
USD ($)
number
|
Jun. 30, 2015
USD ($)
|
|
Fair Value Of Assets And Liabilities [Abstract] | |||||
Gain/(loss) on instrument specific credit risk | $ 200 | $ 300 | $ 300 | $ 700 | |
Number of levels assets and liabilities are grouped in | number | 3 | ||||
Long-lived asset impairment | $ 3,700 |
Fair Value Of Assets And Liabilities (Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
||||||
---|---|---|---|---|---|---|---|---|---|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | $ 1,162,959 | $ 881,450 | $ 1,133,490 | ||||||
Loans held-for-sale | 25,738 | 26,525 | |||||||
Securities available for sale, Fair Value | 4,009,243 | [1] | $ 3,929,846 | 3,648,860 | [2] | ||||
Total other assets | 229,616 | 144,729 | |||||||
Total assets | 5,266,006 | 4,797,610 | |||||||
Total other liabilities | 170,619 | 109,815 | |||||||
Total liabilities | 960,159 | 842,379 | |||||||
Recurring | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 3,847,693 | 3,492,866 | |||||||
Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Loans held-for-sale | 0 | 0 | |||||||
Securities available for sale, Fair Value | 25,055 | 25,825 | |||||||
Total other assets | 52,794 | 32,640 | |||||||
Total assets | 77,849 | 58,465 | |||||||
Total other liabilities | 19,618 | 4,788 | |||||||
Total liabilities | 19,618 | 4,788 | |||||||
Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Loans held-for-sale | 0 | 0 | |||||||
Securities available for sale, Fair Value | 3,821,138 | 3,463,981 | |||||||
Total other assets | 175,416 | 109,931 | |||||||
Total assets | 5,156,687 | 4,702,473 | |||||||
Total other liabilities | 144,166 | 100,217 | |||||||
Total liabilities | 933,706 | 832,781 | |||||||
Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Loans held-for-sale | 25,738 | 26,525 | |||||||
Securities available for sale, Fair Value | 1,500 | 3,060 | |||||||
Total other assets | 1,406 | 2,158 | |||||||
Total assets | 31,470 | 36,672 | |||||||
Total other liabilities | 6,835 | 4,810 | |||||||
Total liabilities | 6,835 | 4,810 | |||||||
U.S. treasuries | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 100 | 100 | |||||||
U.S. treasuries | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | 0 | |||||||
U.S. treasuries | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 100 | 100 | |||||||
U.S. treasuries | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | 0 | |||||||
Government Agency Issued Mortgage-Backed Securities ("MBS") | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 1,946,222 | 830,640 | |||||||
Government Agency Issued Mortgage-Backed Securities ("MBS") | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | 0 | |||||||
Government Agency Issued Mortgage-Backed Securities ("MBS") | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 1,946,222 | 830,640 | |||||||
Government Agency Issued Mortgage-Backed Securities ("MBS") | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | 0 | |||||||
Government Agency Issued Collateralized Mortgage Obligations ("CMO") | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 1,874,816 | 2,625,286 | |||||||
Government Agency Issued Collateralized Mortgage Obligations ("CMO") | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | 0 | |||||||
Government Agency Issued Collateralized Mortgage Obligations ("CMO") | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 1,874,816 | 2,625,286 | |||||||
Government Agency Issued Collateralized Mortgage Obligations ("CMO") | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | 0 | |||||||
Other U.S. Government Agencies | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 1,560 | ||||||||
Other U.S. Government Agencies | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | ||||||||
Other U.S. Government Agencies | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | ||||||||
Other U.S. Government Agencies | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 1,560 | ||||||||
States And Municipalities | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 1,500 | 9,455 | |||||||
States And Municipalities | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | 0 | |||||||
States And Municipalities | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | 7,955 | |||||||
States And Municipalities | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 1,500 | 1,500 | |||||||
Equity, Mutual Funds, And Other | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 25,055 | 25,825 | |||||||
Equity, Mutual Funds, And Other | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 25,055 | 25,825 | |||||||
Equity, Mutual Funds, And Other | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | 0 | |||||||
Equity, Mutual Funds, And Other | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Securities available for sale, Fair Value | 0 | 0 | |||||||
Mortgage Servicing Rights | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 1,406 | 2,158 | |||||||
Mortgage Servicing Rights | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 0 | 0 | |||||||
Mortgage Servicing Rights | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 0 | 0 | |||||||
Mortgage Servicing Rights | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 1,406 | 2,158 | |||||||
Deferred Compensation Assets | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 31,221 | 27,341 | |||||||
Deferred Compensation Assets | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 31,221 | 27,341 | |||||||
Deferred Compensation Assets | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 0 | 0 | |||||||
Deferred Compensation Assets | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 0 | 0 | |||||||
Derivatives, Forwards And Futures | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 21,573 | 5,299 | |||||||
Total other liabilities | 19,618 | 4,788 | |||||||
Derivatives, Forwards And Futures | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 21,573 | 5,299 | |||||||
Total other liabilities | 19,618 | 4,788 | |||||||
Derivatives, Forwards And Futures | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 0 | 0 | |||||||
Total other liabilities | 0 | 0 | |||||||
Derivatives, Forwards And Futures | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 0 | 0 | |||||||
Total other liabilities | 0 | 0 | |||||||
Derivatives, Interest Rate Contracts | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 175,416 | 109,929 | |||||||
Total other liabilities | 144,165 | 100,191 | |||||||
Derivatives, Interest Rate Contracts | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 0 | 0 | |||||||
Total other liabilities | 0 | 0 | |||||||
Derivatives, Interest Rate Contracts | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 175,416 | 109,929 | |||||||
Total other liabilities | 144,165 | 100,191 | |||||||
Derivatives, Interest Rate Contracts | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 0 | 0 | |||||||
Total other liabilities | 0 | 0 | |||||||
Derivatives, Other | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 2 | ||||||||
Total other liabilities | 6,836 | 4,836 | |||||||
Derivatives, Other | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 0 | ||||||||
Total other liabilities | 0 | 0 | |||||||
Derivatives, Other | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 2 | ||||||||
Total other liabilities | 1 | 26 | |||||||
Derivatives, Other | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Total other assets | 0 | ||||||||
Total other liabilities | 6,835 | 4,810 | |||||||
Fixed Income | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 1,160,138 | 1,128,566 | |||||||
Total trading liabilities - fixed income | 789,540 | 732,564 | |||||||
Fixed Income | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | 0 | |||||||
Fixed Income | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 1,160,133 | 1,128,561 | |||||||
Total trading liabilities - fixed income | 789,540 | 732,564 | |||||||
Fixed Income | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 5 | 5 | |||||||
Total trading liabilities - fixed income | 0 | 0 | |||||||
Fixed Income | U.S. treasuries | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 98,181 | 109,998 | |||||||
Total trading liabilities - fixed income | 549,739 | 406,879 | |||||||
Fixed Income | U.S. treasuries | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | 0 | |||||||
Fixed Income | U.S. treasuries | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 98,181 | 109,998 | |||||||
Total trading liabilities - fixed income | 549,739 | 406,879 | |||||||
Fixed Income | U.S. treasuries | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | 0 | |||||||
Fixed Income | Government Agency Issued Mortgage-Backed Securities ("MBS") | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 328,600 | 327,082 | |||||||
Total trading liabilities - fixed income | 1,486 | ||||||||
Fixed Income | Government Agency Issued Mortgage-Backed Securities ("MBS") | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | ||||||||
Fixed Income | Government Agency Issued Mortgage-Backed Securities ("MBS") | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 328,600 | 327,082 | |||||||
Total trading liabilities - fixed income | 1,486 | ||||||||
Fixed Income | Government Agency Issued Mortgage-Backed Securities ("MBS") | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | ||||||||
Fixed Income | Government Agency Issued Collateralized Mortgage Obligations ("CMO") | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 235,914 | 146,675 | |||||||
Total trading liabilities - fixed income | 1,563 | ||||||||
Fixed Income | Government Agency Issued Collateralized Mortgage Obligations ("CMO") | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | ||||||||
Fixed Income | Government Agency Issued Collateralized Mortgage Obligations ("CMO") | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 235,914 | 146,675 | |||||||
Total trading liabilities - fixed income | 1,563 | ||||||||
Fixed Income | Government Agency Issued Collateralized Mortgage Obligations ("CMO") | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | ||||||||
Fixed Income | Other U.S. Government Agencies | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 110,354 | 83,416 | |||||||
Total trading liabilities - fixed income | 25,095 | 25,036 | |||||||
Fixed Income | Other U.S. Government Agencies | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | 0 | |||||||
Fixed Income | Other U.S. Government Agencies | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 110,354 | 83,416 | |||||||
Total trading liabilities - fixed income | 25,095 | 25,036 | |||||||
Fixed Income | Other U.S. Government Agencies | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | 0 | |||||||
Fixed Income | States And Municipalities | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 75,793 | 64,597 | |||||||
Total trading liabilities - fixed income | 1,127 | ||||||||
Fixed Income | States And Municipalities | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | ||||||||
Fixed Income | States And Municipalities | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 75,793 | 64,597 | |||||||
Total trading liabilities - fixed income | 1,127 | ||||||||
Fixed Income | States And Municipalities | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | ||||||||
Fixed Income | Trading Loans | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 10,643 | ||||||||
Fixed Income | Trading Loans | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | ||||||||
Fixed Income | Trading Loans | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 10,643 | ||||||||
Fixed Income | Trading Loans | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | ||||||||
Fixed Income | Corporate And Other Debt | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 295,327 | 393,196 | |||||||
Total trading liabilities - fixed income | 212,016 | 299,163 | |||||||
Fixed Income | Corporate And Other Debt | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Total trading liabilities - fixed income | 0 | 0 | |||||||
Fixed Income | Corporate And Other Debt | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 295,322 | 393,191 | |||||||
Total trading liabilities - fixed income | 212,016 | 299,163 | |||||||
Fixed Income | Corporate And Other Debt | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 5 | 5 | |||||||
Total trading liabilities - fixed income | 0 | 0 | |||||||
Fixed Income | Equity, Mutual Funds, And Other | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 5,326 | 3,602 | |||||||
Fixed Income | Equity, Mutual Funds, And Other | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Fixed Income | Equity, Mutual Funds, And Other | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 5,326 | 3,602 | |||||||
Fixed Income | Equity, Mutual Funds, And Other | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Mortgage Banking | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 2,821 | 4,924 | |||||||
Mortgage Banking | Level 1 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Mortgage Banking | Level 2 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | 0 | 0 | |||||||
Mortgage Banking | Level 3 | |||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||
Trading securities | $ 2,821 | $ 4,924 | |||||||
|
Fair Value Of Assets And Liabilities (Summary Of Changes In Level 3 Assets And Liabilities Measured At Fair Value) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
||||||||
Trading Account Assets [Member] | |||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||||
Beginning Balance | $ 3,057 | $ 5,326 | $ 4,377 | $ 5,642 | |||||||
Net income | 55 | 69 | 202 | 239 | |||||||
Other comprehensive income | 0 | 0 | 0 | 0 | |||||||
Purchases, assets | 0 | 0 | 0 | 0 | |||||||
Issuances, assets | 0 | 0 | 0 | 0 | |||||||
Sales, assets | 0 | 0 | 0 | 0 | |||||||
Settlements, assets | (286) | (466) | (1,753) | (952) | |||||||
Net transfers into/(out of) Level 3, assets | 0 | 0 | 0 | 0 | |||||||
Ending Balance | 2,826 | 4,929 | 2,826 | 4,929 | |||||||
Net unrealized gains/(losses) included in net income | [1] | (5) | 69 | 79 | 239 | ||||||
Loans Held For Sale [Member] | |||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||||
Beginning Balance | 26,287 | 26,700 | 27,418 | 27,910 | |||||||
Net income | 429 | 248 | 771 | 1,390 | |||||||
Other comprehensive income | 0 | 0 | 0 | 0 | |||||||
Purchases, assets | 327 | 324 | 475 | 1,178 | |||||||
Issuances, assets | 0 | 0 | 0 | 0 | |||||||
Sales, assets | 0 | 0 | 0 | 0 | |||||||
Settlements, assets | (1,132) | (329) | (2,497) | (2,819) | |||||||
Net transfers into/(out of) Level 3, assets | [2] | (173) | (418) | (429) | (1,134) | ||||||
Ending Balance | 25,738 | 26,525 | 25,738 | 26,525 | |||||||
Net unrealized gains/(losses) included in net income | [1] | 429 | 248 | 771 | 1,390 | ||||||
Investment Portfolio [Member] | |||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||||
Beginning Balance | 1,500 | 3,191 | 1,500 | 3,307 | |||||||
Net income | 0 | 0 | 0 | 0 | |||||||
Other comprehensive income | 0 | (14) | 0 | (28) | |||||||
Purchases, assets | 0 | 0 | 0 | 0 | |||||||
Issuances, assets | 0 | 0 | 0 | 0 | |||||||
Sales, assets | 0 | 0 | 0 | 0 | |||||||
Settlements, assets | 0 | (117) | 0 | (219) | |||||||
Net transfers into/(out of) Level 3, assets | 0 | 0 | 0 | 0 | |||||||
Ending Balance | 1,500 | 3,060 | 1,500 | 3,060 | |||||||
Net unrealized gains/(losses) included in net income | 0 | 0 | 0 | 0 | |||||||
Mortgage Servicing Rights Net [Member] | |||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||||
Beginning Balance | 1,725 | 2,342 | 1,841 | 2,517 | |||||||
Net income | 31 | 0 | 31 | 0 | |||||||
Other comprehensive income | 0 | 0 | 0 | 0 | |||||||
Purchases, assets | 0 | 0 | 0 | 0 | |||||||
Issuances, assets | 0 | 0 | 0 | 0 | |||||||
Sales, assets | (205) | 0 | (205) | 0 | |||||||
Settlements, assets | (145) | (184) | (261) | (359) | |||||||
Net transfers into/(out of) Level 3, assets | 0 | 0 | 0 | 0 | |||||||
Ending Balance | 1,406 | 2,158 | 1,406 | 2,158 | |||||||
Net unrealized gains/(losses) included in net income | 0 | 0 | 0 | 0 | |||||||
Net Derivative Liabilities [Member] | |||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||||
Beginning Balance | (4,620) | (5,005) | (4,810) | (5,240) | |||||||
Net income | (2,514) | (107) | (2,623) | (164) | |||||||
Other comprehensive income | 0 | 0 | 0 | 0 | |||||||
Purchases, liabilities | 0 | 0 | 0 | 0 | |||||||
Issuances, liabilities | 0 | 0 | 0 | 0 | |||||||
Sales, liabilities | 0 | 0 | 0 | 0 | |||||||
Settlements, liabilities | 299 | 302 | 598 | 594 | |||||||
Net transfers in/(out) level 3, liabilities | 0 | 0 | 0 | 0 | |||||||
Ending Balance | (6,835) | (4,810) | (6,835) | (4,810) | |||||||
Net unrealized gains/(losses) included in other expense | [3] | $ (2,514) | $ (107) | $ (2,623) | $ (164) | ||||||
|
Fair Value Of Assets And Liabilities (Nonrecurring Fair Value Measurements) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans held-for-sale | $ 25,738 | $ 26,525 | $ 25,738 | $ 26,525 | ||||||||||||
Loans, net of unearned income | [1] | 18,589,337 | 16,936,772 | 18,589,337 | 16,936,772 | $ 17,686,502 | ||||||||||
Real estate acquired by foreclosure | [2] | 20,053 | 40,268 | 20,053 | 40,268 | $ 33,063 | ||||||||||
Other assets | 229,616 | 144,729 | 229,616 | 144,729 | ||||||||||||
Net gains/(losses), Loans, net of unearned income | [3] | 353 | (479) | (4,319) | (1,841) | |||||||||||
Net gains/(losses), Real estate acquired by foreclosure | [4] | (314) | (1,284) | (850) | (1,660) | |||||||||||
Net gains/(losses), Other assets | [5] | (831) | (549) | (1,537) | (944) | |||||||||||
Gain (loss) on financial assets measured on non-recurring basis | (790) | (2,312) | (6,699) | (4,407) | ||||||||||||
Fair Value Measurements Nonrecurring [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans, net of unearned income | [3] | 35,314 | 38,913 | 35,314 | 38,913 | |||||||||||
Real estate acquired by foreclosure | [4] | 14,150 | 29,109 | 14,150 | 29,109 | |||||||||||
Other assets | [5] | 28,588 | 28,265 | 28,588 | 28,265 | |||||||||||
Fair Value Inputs Level1 [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans held-for-sale | 0 | 0 | 0 | 0 | ||||||||||||
Other assets | 52,794 | 32,640 | 52,794 | 32,640 | ||||||||||||
Fair Value Inputs Level1 [Member] | Fair Value Measurements Nonrecurring [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans, net of unearned income | [3] | 0 | 0 | 0 | 0 | |||||||||||
Real estate acquired by foreclosure | [4] | 0 | 0 | 0 | 0 | |||||||||||
Other assets | [5] | 0 | 0 | 0 | 0 | |||||||||||
Fair Value Inputs Level2 [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans held-for-sale | 0 | 0 | 0 | 0 | ||||||||||||
Other assets | 175,416 | 109,931 | 175,416 | 109,931 | ||||||||||||
Fair Value Inputs Level2 [Member] | Fair Value Measurements Nonrecurring [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans, net of unearned income | [3] | 0 | 0 | 0 | 0 | |||||||||||
Real estate acquired by foreclosure | [4] | 0 | 0 | 0 | 0 | |||||||||||
Other assets | [5] | 0 | 0 | 0 | 0 | |||||||||||
Fair Value Inputs Level3 [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans held-for-sale | 25,738 | 26,525 | 25,738 | 26,525 | ||||||||||||
Other assets | 1,406 | 2,158 | 1,406 | 2,158 | ||||||||||||
Fair Value Inputs Level3 [Member] | Fair Value Measurements Nonrecurring [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans, net of unearned income | [3] | 35,314 | 38,913 | 35,314 | 38,913 | |||||||||||
Real estate acquired by foreclosure | [4] | 14,150 | 29,109 | 14,150 | 29,109 | |||||||||||
Other assets | [5] | 28,588 | 28,265 | 28,588 | 28,265 | |||||||||||
First Mortgage [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Net gains/(losses), Loans held for sale | 2 | 0 | 7 | 38 | ||||||||||||
First Mortgage [Member] | Fair Value Measurements Nonrecurring [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans held-for-sale | 721 | 849 | 721 | 849 | ||||||||||||
First Mortgage [Member] | Fair Value Inputs Level1 [Member] | Fair Value Measurements Nonrecurring [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans held-for-sale | 0 | 0 | 0 | 0 | ||||||||||||
First Mortgage [Member] | Fair Value Inputs Level2 [Member] | Fair Value Measurements Nonrecurring [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans held-for-sale | 0 | 0 | 0 | 0 | ||||||||||||
First Mortgage [Member] | Fair Value Inputs Level3 [Member] | Fair Value Measurements Nonrecurring [Member] | ||||||||||||||||
Fair Value Of Assets And Liabilities [Line Items] | ||||||||||||||||
Loans held-for-sale | $ 721 | $ 849 | $ 721 | $ 849 | ||||||||||||
|
Fair Value Of Assets And Liabilities (Schedule Of Unobservable Inputs Utilized In Determining The Fair Value Of Level 3 Recurring And Non-Recurring Measurements) (Details) - USD ($) $ in Thousands |
6 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Trading securities | $ 1,162,959 | $ 1,133,490 | $ 881,450 | |||||||||
Loans held-for-sale | 25,738 | 26,525 | ||||||||||
Other Liabilities, Fair Value Disclosure | 170,619 | 109,815 | ||||||||||
Real estate acquired by foreclosure | [1] | 20,053 | 40,268 | 33,063 | ||||||||
Other assets | 229,616 | 144,729 | ||||||||||
Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Trading securities | 2,821 | 4,924 | ||||||||||
Residential Real Estate | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Real estate acquired by foreclosure | 9,600 | 18,700 | $ 14,600 | |||||||||
Non Recurring | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Real estate acquired by foreclosure | [2] | 14,150 | 29,109 | |||||||||
Other assets | [3] | 28,588 | 28,265 | |||||||||
Non Recurring | First Mortgages | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loans held-for-sale | 721 | 849 | ||||||||||
Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Other Liabilities, Fair Value Disclosure | 6,836 | 4,836 | ||||||||||
Other assets | 2 | |||||||||||
Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loans held-for-sale | 25,738 | 26,525 | ||||||||||
Other Liabilities, Fair Value Disclosure | 6,835 | 4,810 | ||||||||||
Other assets | 1,406 | 2,158 | ||||||||||
Level 3 | Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Trading securities | 2,821 | 4,924 | ||||||||||
Level 3 | Residential Real Estate | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loans held-for-sale | 26,459 | 27,374 | ||||||||||
Level 3 | Non Recurring | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loans, net of unearned income | [4] | 35,314 | 38,913 | |||||||||
Real estate acquired by foreclosure | [2] | 14,150 | 29,109 | |||||||||
Other assets | [3] | 28,588 | 28,265 | |||||||||
Level 3 | Non Recurring | First Mortgages | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loans held-for-sale | 721 | 849 | ||||||||||
Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Other Liabilities, Fair Value Disclosure | 6,835 | 4,810 | ||||||||||
Other assets | 0 | |||||||||||
Other Assets | Level 3 | Non Recurring | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Other assets | [3] | $ 28,588 | $ 28,265 | |||||||||
Discounted Cash Flow | Trading Securities | Level 3 | Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Valuation Techniques | Discounted cash flow | Discounted cash flow | ||||||||||
Discounted Cash Flow | Loans Held-For-Sale | Level 3 | Residential Real Estate | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Valuation Techniques | Discounted cash flow | Discounted cash flow | ||||||||||
Discounted Cash Flow | Derivative Liabilities, Other | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Valuation Techniques | Discounted cash flow | Discounted cash flow | ||||||||||
Discounted Cash Flow | Other Assets | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Valuation Techniques | Discounted cash flow | Discounted cash flow | ||||||||||
Appraisals From Comparable Properties | Loans, Net Of Unearned Income | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Valuation Techniques | Appraisals from comparable properties | Appraisals from comparable properties | ||||||||||
Appraisals From Comparable Properties | Real Estate Acquired By Foreclosure | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Valuation Techniques | Appraisals from comparable properties | Appraisals from comparable properties | ||||||||||
Appraisals From Comparable Properties | Other Assets | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Valuation Techniques | Appraisals from comparable properties | Appraisals from comparable properties | ||||||||||
Other Collateral Valuations | Loans, Net Of Unearned Income | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Valuation Techniques | Other collateral valuations | Other collateral valuations | ||||||||||
Maximum | Discounted Cash Flow | Derivative Liabilities, Other | Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Visa covered litigation resolution amount | $ 5,200,000 | $ 5,500,000 | ||||||||||
Maximum | Discounted Cash Flow | 38% - 47% Values Utilized | Trading Securities | Level 3 | Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Prepayment Speeds | 47.00% | |||||||||||
Maximum | Discounted Cash Flow | 42% - 43% Values Utilized | Trading Securities | Level 3 | Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Prepayment Speeds | 43.00% | |||||||||||
Maximum | Discounted Cash Flow | 28% - 68% Values Utilized | Trading Securities | Level 3 | Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Discount rate | 68.00% | |||||||||||
Maximum | Discounted Cash Flow | 5% - 56% Values Utilized | Trading Securities | Level 3 | Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Discount rate | 56.00% | |||||||||||
Maximum | Discounted Cash Flow | 2% - 20% Values Utilized | Loans Held-For-Sale | Level 3 | Residential Real Estate | First Mortgages | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Prepayment Speeds | 20.00% | 20.00% | ||||||||||
Maximum | Discounted Cash Flow | 5% - 15% Values Utilized | Loans Held-For-Sale | Level 3 | Residential Real Estate | Home Equity | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Prepayment Speeds | 15.00% | 15.00% | ||||||||||
Maximum | Discounted Cash Flow | 47% - 58% Values Utilized | Loans Held-For-Sale | Level 3 | Residential Real Estate | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Foreclosure losses | 58.00% | |||||||||||
Maximum | Discounted Cash Flow | 50% - 60% Values Utilized | Loans Held-For-Sale | Level 3 | Residential Real Estate | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Foreclosure losses | 60.00% | |||||||||||
Maximum | Discounted Cash Flow | 5% - 70% Of UPB | Loans Held-For-Sale | Level 3 | Residential Real Estate | First Mortgages | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loss severity trends | 70.00% | |||||||||||
Maximum | Discounted Cash Flow | 10% - 70% Of UPB | Loans Held-For-Sale | Level 3 | Residential Real Estate | First Mortgages | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loss severity trends | 70.00% | |||||||||||
Maximum | Discounted Cash Flow | 35% - 100% Of UPB | Loans Held-For-Sale | Level 3 | Residential Real Estate | Home Equity | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loss severity trends | 100.00% | 100.00% | ||||||||||
Maximum | Discounted Cash Flow | 5% - 12% Values Utilized | Loans Held-For-Sale | Level 3 | Residential Real Estate | Home Equity | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Draw rate | 12.00% | 12.00% | ||||||||||
Maximum | Discounted Cash Flow | 10% - 30% Values Utilized | Derivative Liabilities, Other | Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Probability of resolution scenarios | 30.00% | |||||||||||
Maximum | Discounted Cash Flow | 5% - 25% Values Utilized | Derivative Liabilities, Other | Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Probability of resolution scenarios | 25.00% | |||||||||||
Maximum | Discounted Cash Flow | 30 Months To 60 Months | Derivative Liabilities, Other | Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Time until resolution | 60 months | |||||||||||
Maximum | Discounted Cash Flow | 6 Months to 42 Months | Derivative Liabilities, Other | Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Time until resolution | 42 months | |||||||||||
Maximum | Discounted Cash Flow | 0% - 15% Adjustment to Yield | Other Assets | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Adjustments to current sales yields for specific properties | 15.00% | 15.00% | ||||||||||
Maximum | Appraisals From Comparable Properties | 0% - 10% of Appraisal | Loans, Net Of Unearned Income | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Marketability adjustments for specific properties | 10.00% | 10.00% | ||||||||||
Maximum | Appraisals From Comparable Properties | 0% - 10% of Appraisal | Real Estate Acquired By Foreclosure | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Adjustment for value changes since appraisal | 10.00% | 10.00% | ||||||||||
Maximum | Appraisals From Comparable Properties | 0% - 25% Of Appraisal | Other Assets | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Marketability adjustments for specific properties | 25.00% | 25.00% | ||||||||||
Maximum | Other Collateral Valuations | 20% - 50% Of Gross Value | Loans, Net Of Unearned Income | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Borrowing base certificates adjustment | 50.00% | 50.00% | ||||||||||
Maximum | Other Collateral Valuations | 0% - 25% Of Reported Value | Loans, Net Of Unearned Income | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Financial statements/auction values adjustment | 25.00% | 25.00% | ||||||||||
Minimum | Discounted Cash Flow | Derivative Liabilities, Other | Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Visa covered litigation resolution amount | $ 4,400,000 | $ 4,500,000 | ||||||||||
Minimum | Discounted Cash Flow | 38% - 47% Values Utilized | Trading Securities | Level 3 | Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Prepayment Speeds | 38.00% | |||||||||||
Minimum | Discounted Cash Flow | 42% - 43% Values Utilized | Trading Securities | Level 3 | Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Prepayment Speeds | 42.00% | |||||||||||
Minimum | Discounted Cash Flow | 28% - 68% Values Utilized | Trading Securities | Level 3 | Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Discount rate | 28.00% | |||||||||||
Minimum | Discounted Cash Flow | 5% - 56% Values Utilized | Trading Securities | Level 3 | Mortgage Banking | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Discount rate | 5.00% | |||||||||||
Minimum | Discounted Cash Flow | 2% - 20% Values Utilized | Loans Held-For-Sale | Level 3 | Residential Real Estate | First Mortgages | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Prepayment Speeds | 2.00% | 2.00% | ||||||||||
Minimum | Discounted Cash Flow | 5% - 15% Values Utilized | Loans Held-For-Sale | Level 3 | Residential Real Estate | Home Equity | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Prepayment Speeds | 5.00% | 5.00% | ||||||||||
Minimum | Discounted Cash Flow | 47% - 58% Values Utilized | Loans Held-For-Sale | Level 3 | Residential Real Estate | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Foreclosure losses | 47.00% | |||||||||||
Minimum | Discounted Cash Flow | 50% - 60% Values Utilized | Loans Held-For-Sale | Level 3 | Residential Real Estate | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Foreclosure losses | 50.00% | |||||||||||
Minimum | Discounted Cash Flow | 5% - 70% Of UPB | Loans Held-For-Sale | Level 3 | Residential Real Estate | First Mortgages | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loss severity trends | 5.00% | |||||||||||
Minimum | Discounted Cash Flow | 10% - 70% Of UPB | Loans Held-For-Sale | Level 3 | Residential Real Estate | First Mortgages | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loss severity trends | 10.00% | |||||||||||
Minimum | Discounted Cash Flow | 35% - 100% Of UPB | Loans Held-For-Sale | Level 3 | Residential Real Estate | Home Equity | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Loss severity trends | 35.00% | 35.00% | ||||||||||
Minimum | Discounted Cash Flow | 5% - 12% Values Utilized | Loans Held-For-Sale | Level 3 | Residential Real Estate | Home Equity | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Draw rate | 5.00% | 5.00% | ||||||||||
Minimum | Discounted Cash Flow | 10% - 30% Values Utilized | Derivative Liabilities, Other | Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Probability of resolution scenarios | 10.00% | |||||||||||
Minimum | Discounted Cash Flow | 5% - 25% Values Utilized | Derivative Liabilities, Other | Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Probability of resolution scenarios | 5.00% | |||||||||||
Minimum | Discounted Cash Flow | 30 Months To 60 Months | Derivative Liabilities, Other | Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Time until resolution | 30 months | |||||||||||
Minimum | Discounted Cash Flow | 6 Months to 42 Months | Derivative Liabilities, Other | Level 3 | Derivatives, Other | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Time until resolution | 6 months | |||||||||||
Minimum | Discounted Cash Flow | 0% - 15% Adjustment to Yield | Other Assets | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Adjustments to current sales yields for specific properties | 0.00% | 0.00% | ||||||||||
Minimum | Appraisals From Comparable Properties | 0% - 10% of Appraisal | Loans, Net Of Unearned Income | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Marketability adjustments for specific properties | 0.00% | 0.00% | ||||||||||
Minimum | Appraisals From Comparable Properties | 0% - 10% of Appraisal | Real Estate Acquired By Foreclosure | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Adjustment for value changes since appraisal | 0.00% | 0.00% | ||||||||||
Minimum | Appraisals From Comparable Properties | 0% - 25% Of Appraisal | Other Assets | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Marketability adjustments for specific properties | 0.00% | 0.00% | ||||||||||
Minimum | Other Collateral Valuations | 20% - 50% Of Gross Value | Loans, Net Of Unearned Income | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Borrowing base certificates adjustment | 20.00% | 20.00% | ||||||||||
Minimum | Other Collateral Valuations | 0% - 25% Of Reported Value | Loans, Net Of Unearned Income | Level 3 | ||||||||||||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||||||||||||
Financial statements/auction values adjustment | 0.00% | 0.00% | ||||||||||
|
Fair Value Of Assets And Liabilities (Summary Of Differences Between The Fair Value Carrying Amount Of Mortgages Held-For-Sale And Aggregate Unpaid Principal Amount) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Loans held-for-sale | $ 25,738 | $ 26,525 |
Fair Value Carrying Amount | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Loans held-for-sale | 25,738 | 26,525 |
Nonaccrual loans | 6,923 | 6,238 |
Loans 90 days or more past due and still accruing | 136 | 1,622 |
Aggregate Unpaid Principal | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Loans held-for-sale | 39,202 | 40,577 |
Nonaccrual loans | 13,837 | 12,316 |
Loans 90 days or more past due and still accruing | 214 | 2,056 |
Fair Value Carrying Amount Less Aggregate Unpaid Principal | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Loans held-for-sale | (13,464) | (14,052) |
Nonaccrual loans | (6,914) | (6,078) |
Loans 90 days or more past due and still accruing | $ (78) | $ (434) |
Fair Value Of Assets And Liabilities (Changes In Fair Value Of Assets And Liabilities Which Fair Value Option Included In Current Period Earnings) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Mortgage Banking Noninterest Income | Loans Held-For-Sale | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Changes in fair value included in net income | $ 429 | $ 248 | $ 771 | $ 1,390 |
Fair Value Of Assets And Liabilities (Summary Of Book Value And Estimated Fair Value Of Financial Instruments) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | $ 18,389,530 | $ 17,476,260 | $ 16,715,421 | |||||||||||||||
Short-term financial assets: | ||||||||||||||||||
Interest-bearing cash | 321,743 | 602,836 | 344,944 | |||||||||||||||
Federal funds sold | 40,570 | 114,479 | 77,039 | |||||||||||||||
Securities purchased under agreements to resell | 881,732 | 615,773 | 816,991 | |||||||||||||||
Trading securities | 1,162,959 | 881,450 | 1,133,490 | |||||||||||||||
Loans held-for-sale | [1] | 117,976 | 126,342 | 127,196 | ||||||||||||||
Securities available-for-sale | 4,009,243 | [2] | 3,929,846 | 3,648,860 | [3] | |||||||||||||
Securities held-to-maturity | 14,333 | 14,320 | 4,306 | |||||||||||||||
Derivative assets | 196,989 | 104,365 | 115,230 | |||||||||||||||
Other assets: | ||||||||||||||||||
Total other assets | 229,616 | 144,729 | ||||||||||||||||
Nonearning assets: | ||||||||||||||||||
Cash and due from banks | 283,648 | 300,811 | 274,256 | |||||||||||||||
Fixed income receivables | 219,939 | 63,660 | 91,069 | |||||||||||||||
Total assets | 27,541,070 | 26,192,637 | 25,237,392 | |||||||||||||||
Deposits: | ||||||||||||||||||
Total deposits | 20,630,177 | 19,967,478 | 18,674,473 | |||||||||||||||
Trading liabilities | 789,540 | 566,019 | 732,564 | |||||||||||||||
Short-term financial liabilities: | ||||||||||||||||||
Federal funds purchased | 508,669 | 464,166 | 556,862 | |||||||||||||||
Securities sold under agreements to repurchase | 451,129 | 338,133 | 311,760 | |||||||||||||||
Other short-term borrowings | 543,033 | 137,861 | 150,350 | |||||||||||||||
Term borrowings: | ||||||||||||||||||
Total term borrowings | 1,076,943 | 1,312,677 | 1,555,272 | |||||||||||||||
Derivative liabilities | 170,619 | 108,339 | 109,815 | |||||||||||||||
Other noninterest-bearing liabilities: | ||||||||||||||||||
Fixed income payables | 90,400 | 23,072 | 54,301 | |||||||||||||||
Total liabilities | 24,849,146 | $ 23,553,051 | 22,719,487 | |||||||||||||||
Carrying Reported Amount Fair Value Disclosure [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 18,389,530 | 16,715,421 | ||||||||||||||||
Short-term financial assets: | ||||||||||||||||||
Interest-bearing cash | 321,743 | 344,944 | ||||||||||||||||
Federal funds sold | 40,570 | 77,039 | ||||||||||||||||
Securities purchased under agreements to resell | 881,732 | 816,991 | ||||||||||||||||
Total short-term financial assets | 1,244,045 | 1,238,974 | ||||||||||||||||
Trading securities | [4] | 1,162,959 | 1,133,490 | |||||||||||||||
Loans held-for-sale | 117,976 | 127,196 | [4] | |||||||||||||||
Securities available-for-sale | [4] | 4,009,243 | [5] | 3,648,860 | [6] | |||||||||||||
Securities held-to-maturity | 14,333 | 4,306 | ||||||||||||||||
Derivative assets | [4] | 196,989 | 115,230 | |||||||||||||||
Other assets: | ||||||||||||||||||
Tax credit investments | 90,053 | 90,095 | ||||||||||||||||
Deferred compensation assets | 31,221 | 27,341 | ||||||||||||||||
Total other assets | 121,274 | 117,436 | ||||||||||||||||
Nonearning assets: | ||||||||||||||||||
Cash and due from banks | 283,648 | 274,256 | ||||||||||||||||
Fixed income receivables | 219,939 | 91,069 | ||||||||||||||||
Accrued interest receivable | 55,746 | 57,346 | ||||||||||||||||
Total nonearning assets | 559,333 | 422,671 | ||||||||||||||||
Total assets | 25,815,682 | 23,523,584 | ||||||||||||||||
Deposits: | ||||||||||||||||||
Defined maturity | 1,264,635 | 1,169,153 | ||||||||||||||||
Undefined maturity | 19,365,542 | 17,505,320 | ||||||||||||||||
Total deposits | 20,630,177 | 18,674,473 | ||||||||||||||||
Trading liabilities | [4] | 789,540 | 732,564 | |||||||||||||||
Short-term financial liabilities: | ||||||||||||||||||
Federal funds purchased | 508,669 | 556,862 | ||||||||||||||||
Securities sold under agreements to repurchase | 451,129 | 311,760 | ||||||||||||||||
Other short-term borrowings | 543,033 | 150,350 | ||||||||||||||||
Total short-term financial liabilities | 1,502,831 | 1,018,972 | ||||||||||||||||
Term borrowings: | ||||||||||||||||||
Real estate investment trust-preferred | 45,998 | 45,930 | ||||||||||||||||
Term borrowings - new market tax credit investment | 18,000 | 18,000 | ||||||||||||||||
Borrowings secured by residential real estate | 30,956 | 55,679 | ||||||||||||||||
Other long term borrowings | 981,989 | 1,435,663 | ||||||||||||||||
Total term borrowings | 1,076,943 | 1,555,272 | ||||||||||||||||
Derivative liabilities | [4] | 170,619 | 109,815 | |||||||||||||||
Other noninterest-bearing liabilities: | ||||||||||||||||||
Fixed income payables | 90,400 | 54,301 | ||||||||||||||||
Accrued interest payable | 9,846 | 16,382 | ||||||||||||||||
Total other noninterest-bearing liabilities | 100,246 | 70,683 | ||||||||||||||||
Total liabilities | 24,270,356 | 22,161,779 | ||||||||||||||||
Carrying Reported Amount Fair Value Disclosure [Member] | Commercial Financial And Industrial Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 11,098,473 | 9,753,813 | ||||||||||||||||
Carrying Reported Amount Fair Value Disclosure [Member] | Commercial Real Estate Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 1,939,148 | 1,379,223 | ||||||||||||||||
Carrying Reported Amount Fair Value Disclosure [Member] | Consumer Real Estate Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 4,581,698 | 4,784,814 | ||||||||||||||||
Carrying Reported Amount Fair Value Disclosure [Member] | Permanent Mortgage Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 421,414 | 465,302 | ||||||||||||||||
Carrying Reported Amount Fair Value Disclosure [Member] | Credit Card And Other Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 348,797 | 332,269 | ||||||||||||||||
Estimate Of Fair Value Fair Value Disclosure [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 18,085,685 | 16,414,521 | ||||||||||||||||
Short-term financial assets: | ||||||||||||||||||
Interest-bearing cash | 321,743 | 344,944 | ||||||||||||||||
Federal funds sold | 40,570 | 77,039 | ||||||||||||||||
Securities purchased under agreements to resell | 881,732 | 816,991 | ||||||||||||||||
Total short-term financial assets | 1,244,045 | 1,238,974 | ||||||||||||||||
Trading securities | [4] | 1,162,959 | 1,133,490 | |||||||||||||||
Loans held-for-sale | 117,976 | 127,196 | [4] | |||||||||||||||
Securities available-for-sale | [4] | 4,009,243 | [5] | 3,648,860 | [6] | |||||||||||||
Securities held-to-maturity | 15,101 | 5,356 | ||||||||||||||||
Derivative assets | [4] | 196,989 | 115,230 | |||||||||||||||
Other assets: | ||||||||||||||||||
Tax credit investments | 83,506 | 60,619 | ||||||||||||||||
Deferred compensation assets | 31,221 | 27,341 | ||||||||||||||||
Total other assets | 114,727 | 87,960 | ||||||||||||||||
Nonearning assets: | ||||||||||||||||||
Cash and due from banks | 283,648 | 274,256 | ||||||||||||||||
Fixed income receivables | 219,939 | 91,069 | ||||||||||||||||
Accrued interest receivable | 55,746 | 57,346 | ||||||||||||||||
Total nonearning assets | 559,333 | 422,671 | ||||||||||||||||
Total assets | 25,506,058 | 23,194,258 | ||||||||||||||||
Deposits: | ||||||||||||||||||
Defined maturity | 1,274,663 | 1,173,899 | ||||||||||||||||
Undefined maturity | 19,365,542 | 17,505,320 | ||||||||||||||||
Total deposits | 20,640,205 | 18,679,219 | ||||||||||||||||
Trading liabilities | [4] | 789,540 | 732,564 | |||||||||||||||
Short-term financial liabilities: | ||||||||||||||||||
Federal funds purchased | 508,669 | 556,862 | ||||||||||||||||
Securities sold under agreements to repurchase | 451,129 | 311,760 | ||||||||||||||||
Other short-term borrowings | 543,033 | 150,350 | ||||||||||||||||
Total short-term financial liabilities | 1,502,831 | 1,018,972 | ||||||||||||||||
Term borrowings: | ||||||||||||||||||
Real estate investment trust-preferred | 49,350 | 49,350 | ||||||||||||||||
Term borrowings - new market tax credit investment | 18,213 | 17,983 | ||||||||||||||||
Borrowings secured by residential real estate | 26,715 | 48,051 | ||||||||||||||||
Other long term borrowings | 955,542 | 1,411,226 | ||||||||||||||||
Total term borrowings | 1,049,820 | 1,526,610 | ||||||||||||||||
Derivative liabilities | [4] | 170,619 | 109,815 | |||||||||||||||
Other noninterest-bearing liabilities: | ||||||||||||||||||
Fixed income payables | 90,400 | 54,301 | ||||||||||||||||
Accrued interest payable | 9,846 | 16,382 | ||||||||||||||||
Total other noninterest-bearing liabilities | 100,246 | 70,683 | ||||||||||||||||
Total liabilities | 24,253,261 | 22,137,863 | ||||||||||||||||
Loan commitments | 2,058 | 2,761 | ||||||||||||||||
Standby and other commitments | 4,340 | 4,846 | ||||||||||||||||
Estimate Of Fair Value Fair Value Disclosure [Member] | Commercial Financial And Industrial Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 11,003,089 | 9,716,906 | ||||||||||||||||
Estimate Of Fair Value Fair Value Disclosure [Member] | Commercial Real Estate Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 1,915,942 | 1,362,420 | ||||||||||||||||
Estimate Of Fair Value Fair Value Disclosure [Member] | Consumer Real Estate Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 4,424,739 | 4,567,129 | ||||||||||||||||
Estimate Of Fair Value Fair Value Disclosure [Member] | Permanent Mortgage Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 391,879 | 434,145 | ||||||||||||||||
Estimate Of Fair Value Fair Value Disclosure [Member] | Credit Card And Other Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 350,036 | 333,921 | ||||||||||||||||
Contractual Amount [Member] | ||||||||||||||||||
Other noninterest-bearing liabilities: | ||||||||||||||||||
Loan commitments | 7,516,141 | 7,507,315 | ||||||||||||||||
Standby and other commitments | 293,319 | 304,860 | ||||||||||||||||
Fair Value Inputs Level1 [Member] | ||||||||||||||||||
Short-term financial assets: | ||||||||||||||||||
Securities available-for-sale | 25,055 | 25,825 | ||||||||||||||||
Other assets: | ||||||||||||||||||
Total other assets | 52,794 | 32,640 | ||||||||||||||||
Fair Value Inputs Level1 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Short-term financial assets: | ||||||||||||||||||
Interest-bearing cash | 321,743 | 344,944 | ||||||||||||||||
Federal funds sold | 0 | 0 | ||||||||||||||||
Securities purchased under agreements to resell | 0 | 0 | ||||||||||||||||
Total short-term financial assets | 321,743 | 344,944 | ||||||||||||||||
Trading securities | [4] | 0 | 0 | |||||||||||||||
Loans held-for-sale | 0 | 0 | [4] | |||||||||||||||
Securities available-for-sale | [4] | 25,055 | [5] | 25,825 | [6] | |||||||||||||
Securities held-to-maturity | 0 | 0 | ||||||||||||||||
Derivative assets | [4] | 21,573 | 5,299 | |||||||||||||||
Other assets: | ||||||||||||||||||
Tax credit investments | 0 | 0 | ||||||||||||||||
Deferred compensation assets | 31,221 | 27,341 | ||||||||||||||||
Total other assets | 31,221 | 27,341 | ||||||||||||||||
Nonearning assets: | ||||||||||||||||||
Cash and due from banks | 283,648 | 274,256 | ||||||||||||||||
Fixed income receivables | 0 | 0 | ||||||||||||||||
Accrued interest receivable | 0 | 0 | ||||||||||||||||
Total nonearning assets | 283,648 | 274,256 | ||||||||||||||||
Total assets | 683,240 | 677,665 | ||||||||||||||||
Deposits: | ||||||||||||||||||
Defined maturity | 0 | 0 | ||||||||||||||||
Undefined maturity | 0 | 0 | ||||||||||||||||
Total deposits | 0 | 0 | ||||||||||||||||
Trading liabilities | [4] | 0 | 0 | |||||||||||||||
Short-term financial liabilities: | ||||||||||||||||||
Federal funds purchased | 0 | 0 | ||||||||||||||||
Securities sold under agreements to repurchase | 0 | 0 | ||||||||||||||||
Other short-term borrowings | 0 | 0 | ||||||||||||||||
Total short-term financial liabilities | 0 | 0 | ||||||||||||||||
Term borrowings: | ||||||||||||||||||
Real estate investment trust-preferred | 0 | 0 | ||||||||||||||||
Term borrowings - new market tax credit investment | 0 | 0 | ||||||||||||||||
Borrowings secured by residential real estate | 0 | 0 | ||||||||||||||||
Other long term borrowings | 0 | 0 | ||||||||||||||||
Total term borrowings | 0 | 0 | ||||||||||||||||
Derivative liabilities | [4] | 19,618 | 4,788 | |||||||||||||||
Other noninterest-bearing liabilities: | ||||||||||||||||||
Fixed income payables | 0 | 0 | ||||||||||||||||
Accrued interest payable | 0 | 0 | ||||||||||||||||
Total other noninterest-bearing liabilities | 0 | 0 | ||||||||||||||||
Total liabilities | 19,618 | 4,788 | ||||||||||||||||
Fair Value Inputs Level1 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Commercial Financial And Industrial Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Fair Value Inputs Level1 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Commercial Real Estate Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Fair Value Inputs Level1 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Consumer Real Estate Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Fair Value Inputs Level1 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Permanent Mortgage Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Fair Value Inputs Level1 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Credit Card And Other Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Fair Value Inputs Level2 [Member] | ||||||||||||||||||
Short-term financial assets: | ||||||||||||||||||
Securities available-for-sale | 3,821,138 | 3,463,981 | ||||||||||||||||
Other assets: | ||||||||||||||||||
Total other assets | 175,416 | 109,931 | ||||||||||||||||
Fair Value Inputs Level2 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Short-term financial assets: | ||||||||||||||||||
Interest-bearing cash | 0 | 0 | ||||||||||||||||
Federal funds sold | 40,570 | 77,039 | ||||||||||||||||
Securities purchased under agreements to resell | 881,732 | 816,991 | ||||||||||||||||
Total short-term financial assets | 922,302 | 894,030 | ||||||||||||||||
Trading securities | [4] | 1,160,133 | 1,128,561 | |||||||||||||||
Loans held-for-sale | 5,478 | 0 | [4] | |||||||||||||||
Securities available-for-sale | [4] | 3,821,138 | [5] | 3,463,981 | [6] | |||||||||||||
Securities held-to-maturity | 0 | 0 | ||||||||||||||||
Derivative assets | [4] | 175,416 | 109,931 | |||||||||||||||
Other assets: | ||||||||||||||||||
Tax credit investments | 0 | 0 | ||||||||||||||||
Deferred compensation assets | 0 | 0 | ||||||||||||||||
Total other assets | 0 | 0 | ||||||||||||||||
Nonearning assets: | ||||||||||||||||||
Cash and due from banks | 0 | 0 | ||||||||||||||||
Fixed income receivables | 219,939 | 91,069 | ||||||||||||||||
Accrued interest receivable | 55,746 | 57,346 | ||||||||||||||||
Total nonearning assets | 275,685 | 148,415 | ||||||||||||||||
Total assets | 6,360,152 | 5,744,918 | ||||||||||||||||
Deposits: | ||||||||||||||||||
Defined maturity | 1,274,663 | 1,173,899 | ||||||||||||||||
Undefined maturity | 19,365,542 | 17,505,320 | ||||||||||||||||
Total deposits | 20,640,205 | 18,679,219 | ||||||||||||||||
Trading liabilities | [4] | 789,540 | 732,564 | |||||||||||||||
Short-term financial liabilities: | ||||||||||||||||||
Federal funds purchased | 508,669 | 556,862 | ||||||||||||||||
Securities sold under agreements to repurchase | 451,129 | 311,760 | ||||||||||||||||
Other short-term borrowings | 543,033 | 150,350 | ||||||||||||||||
Total short-term financial liabilities | 1,502,831 | 1,018,972 | ||||||||||||||||
Term borrowings: | ||||||||||||||||||
Real estate investment trust-preferred | 0 | 0 | ||||||||||||||||
Term borrowings - new market tax credit investment | 0 | 0 | ||||||||||||||||
Borrowings secured by residential real estate | 0 | 0 | ||||||||||||||||
Other long term borrowings | 955,542 | 1,411,226 | ||||||||||||||||
Total term borrowings | 955,542 | 1,411,226 | ||||||||||||||||
Derivative liabilities | [4] | 144,166 | 100,217 | |||||||||||||||
Other noninterest-bearing liabilities: | ||||||||||||||||||
Fixed income payables | 90,400 | 54,301 | ||||||||||||||||
Accrued interest payable | 9,846 | 16,382 | ||||||||||||||||
Total other noninterest-bearing liabilities | 100,246 | 70,683 | ||||||||||||||||
Total liabilities | 24,132,530 | 22,012,881 | ||||||||||||||||
Fair Value Inputs Level2 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Commercial Financial And Industrial Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Fair Value Inputs Level2 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Commercial Real Estate Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Fair Value Inputs Level2 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Consumer Real Estate Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Fair Value Inputs Level2 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Permanent Mortgage Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Fair Value Inputs Level2 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Credit Card And Other Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 0 | 0 | ||||||||||||||||
Fair Value Inputs Level3 [Member] | ||||||||||||||||||
Short-term financial assets: | ||||||||||||||||||
Securities available-for-sale | 1,500 | 3,060 | ||||||||||||||||
Other assets: | ||||||||||||||||||
Total other assets | 1,406 | 2,158 | ||||||||||||||||
Fair Value Inputs Level3 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 18,085,685 | 16,414,521 | ||||||||||||||||
Short-term financial assets: | ||||||||||||||||||
Interest-bearing cash | 0 | 0 | ||||||||||||||||
Federal funds sold | 0 | 0 | ||||||||||||||||
Securities purchased under agreements to resell | 0 | 0 | ||||||||||||||||
Total short-term financial assets | 0 | 0 | ||||||||||||||||
Trading securities | [4] | 2,826 | 4,929 | |||||||||||||||
Loans held-for-sale | 112,498 | 127,196 | [4] | |||||||||||||||
Securities available-for-sale | [4] | 163,050 | [5] | 159,054 | [6] | |||||||||||||
Securities held-to-maturity | 15,101 | 5,356 | ||||||||||||||||
Derivative assets | [4] | 0 | 0 | |||||||||||||||
Other assets: | ||||||||||||||||||
Tax credit investments | 83,506 | 60,619 | ||||||||||||||||
Deferred compensation assets | 0 | 0 | ||||||||||||||||
Total other assets | 83,506 | 60,619 | ||||||||||||||||
Nonearning assets: | ||||||||||||||||||
Cash and due from banks | 0 | 0 | ||||||||||||||||
Fixed income receivables | 0 | 0 | ||||||||||||||||
Accrued interest receivable | 0 | 0 | ||||||||||||||||
Total nonearning assets | 0 | 0 | ||||||||||||||||
Total assets | 18,462,666 | 16,771,675 | ||||||||||||||||
Deposits: | ||||||||||||||||||
Defined maturity | 0 | 0 | ||||||||||||||||
Undefined maturity | 0 | 0 | ||||||||||||||||
Total deposits | 0 | 0 | ||||||||||||||||
Trading liabilities | [4] | 0 | 0 | |||||||||||||||
Short-term financial liabilities: | ||||||||||||||||||
Federal funds purchased | 0 | 0 | ||||||||||||||||
Securities sold under agreements to repurchase | 0 | 0 | ||||||||||||||||
Other short-term borrowings | 0 | 0 | ||||||||||||||||
Total short-term financial liabilities | 0 | 0 | ||||||||||||||||
Term borrowings: | ||||||||||||||||||
Real estate investment trust-preferred | 49,350 | 49,350 | ||||||||||||||||
Term borrowings - new market tax credit investment | 18,213 | 17,983 | ||||||||||||||||
Borrowings secured by residential real estate | 26,715 | 48,051 | ||||||||||||||||
Other long term borrowings | 0 | 0 | ||||||||||||||||
Total term borrowings | 94,278 | 115,384 | ||||||||||||||||
Derivative liabilities | [4] | 6,835 | 4,810 | |||||||||||||||
Other noninterest-bearing liabilities: | ||||||||||||||||||
Fixed income payables | 0 | 0 | ||||||||||||||||
Accrued interest payable | 0 | 0 | ||||||||||||||||
Total other noninterest-bearing liabilities | 0 | 0 | ||||||||||||||||
Total liabilities | 101,113 | 120,194 | ||||||||||||||||
Fair Value Inputs Level3 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Commercial Financial And Industrial Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 11,003,089 | 9,716,906 | ||||||||||||||||
Fair Value Inputs Level3 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Commercial Real Estate Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 1,915,942 | 1,362,420 | ||||||||||||||||
Fair Value Inputs Level3 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Consumer Real Estate Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 4,424,739 | 4,567,129 | ||||||||||||||||
Fair Value Inputs Level3 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Permanent Mortgage Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 391,879 | 434,145 | ||||||||||||||||
Fair Value Inputs Level3 [Member] | Estimate Of Fair Value Fair Value Disclosure [Member] | Credit Card And Other Portfolio Segment [Member] | ||||||||||||||||||
Assets: | ||||||||||||||||||
Total loans, net of unearned income and allowance for loan losses | 350,036 | 333,921 | ||||||||||||||||
FHLB-Cincinnati Stock [Member] | Fair Value Inputs Level3 [Member] | ||||||||||||||||||
Other noninterest-bearing liabilities: | ||||||||||||||||||
Restricted investments | 87,900 | 87,900 | ||||||||||||||||
FRB Stock [Member] | Fair Value Inputs Level3 [Member] | ||||||||||||||||||
Other noninterest-bearing liabilities: | ||||||||||||||||||
Restricted investments | $ 68,600 | $ 65,800 | ||||||||||||||||
|
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