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Fair Value Of Assets And Liabilities (Tables)
 3 Months Ended
Mar. 31, 2017
Fair Value Of Assets And Liabilities [Abstract]  
Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis
Recurring Fair Value Measurements
The following table presents the balance of assets and liabilities measured at fair value on a recurring basis as of March 31, 2017:
March 31, 2017
(Dollars in thousands)Level 1  Level 2  Level 3  Total
Trading securities - fixed income:      
U.S. treasuries$-  $107,264  $-  $107,264  
Government agency issued MBS-  323,058  -  323,058  
Government agency issued CMO-  213,949  -  213,949  
Other U.S. government agencies-  88,613  -  88,613  
States and municipalities-  83,872  -  83,872  
Corporate and other debt-  346,743  5  346,748  
Equity, mutual funds, and other-  1,476  -  1,476  
Total trading securities - fixed income -  1,164,975  5  1,164,980  
Trading securities - mortgage banking-  -  2,330  2,330
Loans held-for-sale-  1,224  21,221  22,445  
Securities available-for-sale:      
U.S. treasuries-  100  -  100  
Government agency issued MBS-  2,159,922  -  2,159,922  
Government agency issued CMO-  1,592,311  -  1,592,311  
Equity, mutual funds, and other25,221  -  -  25,221  
Total securities available-for-sale25,221  3,752,333  -  3,777,554  
Other assets:      
Deferred compensation assets34,109--34,109
Derivatives, forwards and futures17,227  -  -  17,227  
Derivatives, interest rate contracts -  80,893  -  80,893  
Total other assets51,336  80,893  -  132,229  
Total assets$76,557  $4,999,425  $23,556  $5,099,538  
Trading liabilities - fixed income:      
U.S. treasuries$-  $657,059  $-  $657,059  
States and municipalities-  11,048  -  11,048  
Corporate and other debt-  180,083  -  180,083  
Total trading liabilities - fixed income-  848,190  -  848,190  
Other liabilities:  
Derivatives, forwards and futures18,365  -  -  18,365  
Derivatives, interest rate contracts -  76,986  -  76,986  
Derivatives, other-  46  5,9505,996
Total other liabilities18,36577,0325,950101,347
Total liabilities$18,365  $925,222  $5,950  $949,537  

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis as of December 31, 2016:
  December 31, 2016
(Dollars in thousands)Level 1  Level 2  Level 3  Total
Trading securities - fixed income:      
U.S. treasuries$-  $146,988  $-  $146,988
Government agency issued MBS-  256,611  -  256,611
Government agency issued CMO-  150,058  -  150,058
Other U.S. government agencies-  52,314  -  52,314
States and municipalities-  60,351  -  60,351
Corporate and other debt-  227,934  5  227,939
Equity, mutual funds, and other-  242  -242
Total trading securities - fixed income -  894,498  5  894,503
Trading securities - mortgage banking-  -  2,568  2,568
Loans held-for-sale-  2,345  21,924  24,269
Securities available-for-sale:      
U.S. treasuries-  100  -  100
Government agency issued MBS-  2,208,687  -  2,208,687
Government agency issued CMO-  1,547,958  -  1,547,958
Equity, mutual funds, and other25,249  -  -  25,249
Total securities available-for-sale25,249  3,756,745  -  3,781,994
Other assets:
Mortgage servicing rights-  -  985  985
Deferred compensation assets32,840  -  -  32,840
Derivatives, forwards and futures33,587  -  -  33,587
Derivatives, interest rate contracts-  88,025  -  88,025
Derivatives, other-42-42
Total other assets66,427  88,067  985  155,479
Total assets$91,676  $4,741,655  $25,482  $4,858,813
Trading liabilities - fixed income:      
U.S. treasuries$-  $381,229  $-  $381,229
Other U.S. government agencies-844-844
Corporate and other debt-179,775-179,775
Total trading liabilities - fixed income-  561,848  -  561,848
Other liabilities:
Derivatives, forwards and futures33,274  -  -  33,274
Derivatives, interest rate contracts-  96,371  -  96,371
Derivatives, other-  7  6,245  6,252
Total other liabilities33,274  96,378  6,245  135,897
Total liabilities$33,274  $658,226  $6,245  $697,745
Summary Of Changes In Level 3 Assets And Liabilities Measured At Fair Value
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 March 31, 2017 and 2016, on a recurring basis are summarized as follows:
Three Months Ended March 31, 2017
TradingLoans held-Net derivative
(Dollars in thousands)securitiesfor-saleliabilities
Balance on January 1, 2017$2,573  $21,924  $(6,245)
Total net gains/(losses) included in:
Net income17  922  (1)
Purchases-  32  -  
Settlements(255)(1,574)296  
Net transfers into/(out of) Level 3-  (83) (b)  -  
Balance on March 31, 2017$2,335  $21,221  $(5,950)
Net unrealized gains/(losses) included in net income$(27) (a)  $922 (a)  $(1) (c)

Three Months Ended March 31, 2016
SecuritiesMortgage
TradingLoans held-available-servicingNet derivative
(Dollars in thousands)securitiesfor-salefor-salerights, netliabilities
Balance on January 1, 2016$4,377  $27,418  $1,500$1,841  $(4,810)
Total net gains/(losses) included in:
Net income147  342--  (109)
Purchases-  148  --  -
Settlements(1,467)(1,365)-(116)299
Net transfers into/(out of) Level 3 -  (256) (b)--  -
Balance on March 31, 2016$3,057  $26,287  $1,500$1,725  $(4,620)
Net unrealized gains/(losses) included in net income$(115) (a)$342 (a)$-$-$(109) (c)

  • Primarily included in mortgage banking income on the Consolidated Condensed Statements of Income.
  • Transfers out of loans held-for-sale level 3 measured on a recurring basis generally reflect movements into real estate acquired by foreclosure (level 3 nonrecurring).
  • Included in Other expense.
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 lower of cost or market (“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 March 31, 2017, and December 31, 2016, respectively, the following tables provide the level of valuation assumptions used to determine each adjustment and the related carrying value.

  
Carrying value at March 31, 2017
(Dollars in thousands)  Level 1  Level 2  Level 3  Total
Loans held-for-sale - SBAs  $-  $3,476  $-  $3,476
Loans held-for-sale - first mortgages  -  -  606  606
Loans, net of unearned income (a)-  -  30,838  30,838
Real estate acquired by foreclosure (b)-  -  10,259  10,259
Other assets (c)-  -  28,667  28,667
        

Carrying value at December 31, 2016
(Dollars in thousands)  Level 1  Level 2  Level 3  Total   
Loans held-for-sale - SBAs  $-  $4,286  $-  $4,286  
Loans held-for-sale - first mortgages  -  -  638  638  
Loans, net of unearned income (a)-  -  31,070  31,070  
Real estate acquired by foreclosure (b)-  -  11,235  11,235  
Other assets (c)-  -  29,609  29,609  
          

  • 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.
  • 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.
  • Represents tax credit investments accounted for under the equity method.
Gains/(losses) on Noncurring Fair Value Measurements
For assets measured on a nonrecurring basis which were still held on the consolidated balance sheet at period end, the following table provides information about the fair value adjustments recorded during the three months ended March 31, 2017 and 2016:
Net gains/(losses)
Three months ended March 31,
(Dollars in thousands)20172016
Loans held-for-sale - SBAs$(33)$-
Loans held-for-sale - first mortgages35
Loans, net of unearned income (a)484(4,672)
Real estate acquired by foreclosure (b)(445)(536)
Other assets (c)(942)(706)
$(933)$(5,909)

  • Write-downs on these loans are recognized as part of provision for loan losses.
  • Represents 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 accounted for under the equity method.
Schedule Of Unobservable Inputs Utilized In Determining The Fair Value Of Level 3 Recurring And Non-Recurring Measurements
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 March 31, 2017 and December 31, 2016:
(Dollars in Thousands)
Fair Value at
Level 3 ClassMarch 31, 2017Valuation TechniquesUnobservable InputValues Utilized
Loans held-for-sale - residential real estate21,827Discounted cash flowPrepayment speeds - First mortgage2% - 12%
Prepayment speeds - HELOC3% - 15%
Foreclosure losses50% - 70%
Loss severity trends - First mortgage5% - 50% of UPB
Loss severity trends - HELOC15% - 100% of UPB
Derivative liabilities, other5,950Discounted cash flowVisa covered litigation resolution amount$4.4 billion - $5.2 billion
Probability of resolution scenarios10% - 30%
Time until resolution21 - 51 months
Loans, net of unearned income (a)30,838Appraisals from comparable propertiesMarketability adjustments for specific properties0% - 10% of appraisal
Other collateral valuationsBorrowing base certificates adjustment20% - 50% of gross value
Financial Statements/Auction values adjustment0% - 25% of reported value
Real estate acquired by foreclosure (b)10,259Appraisals from comparable propertiesAdjustment for value changes since appraisal0% - 10% of appraisal
Other assets (c)28,667Discounted cash flowAdjustments to current sales yields for specific properties0% - 15% adjustment to yield
Appraisals from comparable propertiesMarketability adjustments for specific properties0% - 25% of appraisal

  • 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 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.
  • Represents tax credit investments accounted for under the equity method.

(Dollars in Thousands)
Fair Value at
Level 3 ClassDecember 31, 2016Valuation TechniquesUnobservable InputValues Utilized
Loans held-for-sale - residential real estate22,562Discounted cash flowPrepayment speeds - First mortgage2% - 13%
Prepayment speeds - HELOC3% - 15%
Foreclosure Losses50% - 70%
Loss severity trends - First mortgage5% - 50% of UPB
Loss severity trends - HELOC15% - 100% of UPB
Derivative liabilities, other6,245Discounted cash flowVisa covered litigation resolution amount$4.4 billion - $5.2 billion
Probability of resolution scenarios10% - 30%
Time until resolution24 - 54 months
Loans, net of unearned income (a)31,070Appraisals from comparable propertiesMarketability adjustments for specific properties0% - 10% of appraisal
Other collateral valuationsBorrowing base certificates adjustment20% - 50% of gross value
Financial Statements/Auction values adjustment0% - 25% of reported value
Real estate acquired by foreclosure (b)11,235Appraisals from comparable propertiesAdjustment for value changes since appraisal0% - 10% of appraisal
Other assets (c)29,609Discounted cash flowAdjustments to current sales yields for specific properties0% - 15% adjustment to yield
Appraisals from comparable propertiesMarketability adjustments for specific properties0% - 25% of appraisal

  • 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 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.
  • Represents tax credit investments accounted for under the equity method.
Summary Of Differences Between The Fair Value Carrying Amount Of Mortgages Held-For-Sale And Aggregate Unpaid Principal Amount
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 management’s election and the aggregate unpaid principal amount FHN is contractually entitled to receive at maturity.
March 31, 2017
(Dollars in thousands)Fair value carrying amountAggregate unpaid principalFair value carrying amount less aggregate unpaid principal
Residential real estate loans held-for-sale reported at fair value:    
Total loans$22,444  $32,427  $(9,983)
Nonaccrual loans6,689  12,305  (5,616)
Loans 90 days or more past due and still accruing120  158  (38)
December 31, 2016
(Dollars in thousands)Fair value carrying amountAggregate unpaid principalFair value carrying amount less aggregate unpaid principal
Residential real estate loans held-for-sale reported at fair value:    
Total loans$24,269  $35,262  $(10,993)
Nonaccrual loans6,775  12,910  (6,135)
Loans 90 days or more past due and still accruing211  331  (120)
Changes In Fair Value Of Assets And Liabilities Which Fair Value Option Included In Current Period Earnings
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
March 31
(Dollars in thousands)20172016
Changes in fair value included in net income:
Mortgage banking noninterest income
Loans held-for-sale$922$342
Summary Of Book Value And Estimated Fair Value Of Financial Instruments
The following table summarizes the book value and estimated fair value of financial instruments recorded in the Consolidated Condensed Statements of Condition as of March 31, 2017:
  March 31, 2017
BookFair Value
(Dollars in thousands)  Value  Level 1  Level 2  Level 3  Total
Assets:          
Loans, net of unearned income and allowance for loan losses          
Commercial:          
Commercial, financial and industrial  $11,610,889  $-  $-  $11,520,970  $11,520,970  
Commercial real estate  2,142,423  -  -  2,112,591  2,112,591
Consumer:          
Consumer real estate 4,407,131  -  -  4,325,035  4,325,035  
Permanent mortgage 393,342  -  -  393,859  393,859  
Credit card & other  334,321  -  -  334,868  334,868  
Total loans, net of unearned income and allowance for loan losses  18,888,106  -  -  18,687,323  18,687,323  
Short-term financial assets:          
Interest-bearing cash  2,106,597  2,106,597  -  -  2,106,597  
Federal funds sold  31,495  -  31,495  -  31,495  
Securities purchased under agreements to resell  835,222  -  835,222  -  835,222  
Total short-term financial assets2,973,3142,106,597866,717-2,973,314
Trading securities (a)1,167,310  -  1,164,975  2,335  1,167,310  
Loans held-for-sale 105,456  -  4,700  100,756  105,456  
Securities available-for-sale (a) (b)3,939,278  25,221  3,752,333  161,724  3,939,278  
Securities held-to-maturity14,354  -  -  14,803  14,803  
Derivative assets (a)98,120  17,227  80,893  -  98,120
  
Other assets:  
Tax credit investments  96,824--94,88494,884  
Deferred compensation assets34,10934,109--34,109
Total other assets  130,933  34,109  -  94,884  128,993
Nonearning assets:    
Cash & due from banks  369,290  369,290  -  -  369,290  
Fixed income receivables  168,315  -  168,315  -  168,315  
Accrued interest receivable  61,832  -  61,832  -  61,832  
Total nonearning assets  599,437  369,290  230,147  -  599,437
Total assets  $27,916,308  $2,552,444  $6,099,765  $19,061,825  $27,714,034
          
Liabilities:    
Deposits:    
Defined maturity$1,385,818  $-  $1,391,170  $-  $1,391,170  
Undefined maturity22,094,023-22,094,023-22,094,023
Total deposits23,479,841  -23,485,193-23,485,193  
Trading liabilities (a)848,190  -  848,190  -  848,190
Short-term financial liabilities:    
Federal funds purchased504,805-504,805-504,805
Securities sold under agreements to repurchase  406,354  -  406,354  -  406,354  
Other short-term borrowings79,454-79,454-79,454
Total short-term financial liabilities  990,613  -  990,613  -  990,613
Term borrowings:    
Real estate investment trust-preferred  46,049  -  -  49,350  49,350  
Term borrowings - new market tax credit investment  18,000  -  -  17,934  17,934  
Borrowings secured by residential real estate19,819--18,82818,828
Other long term borrowings951,168-967,792-967,792
Total term borrowings1,035,036  -  967,792  86,112  1,053,904  
Derivative liabilities (a)101,347  18,365  77,032  5,950  101,347
  
Other noninterest-bearing liabilities:    
Fixed income payables  21,116  -  21,116  -  21,116  
Accrued interest payable  17,696  -  17,696  -  17,696  
Total other noninterest-bearing liabilities38,812  -  38,812  -38,812
Total liabilities$26,493,839  $18,365  $26,407,632  $92,062$26,518,059

  • 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.

The following table summarizes the book value and estimated fair value of financial instruments recorded in the Consolidated Statements of Condition as of December 31, 2016:
  December 31, 2016
BookFair Value
(Dollars in thousands)  Value  Level 1  Level 2  Level 3  Total
Assets:          
Loans, net of unearned income and allowance for loan losses          
Commercial:          
Commercial, financial and industrial$12,058,689  $-  $-  $11,918,374  $11,918,374  
Commercial real estate  2,101,671  -  -  2,078,306  2,078,306
Consumer:          
Consumer real estate4,473,395  -  -  4,385,669  4,385,669  
Permanent mortgage406,836  -  -  404,930  404,930  
Credit card & other  346,861  -  -  347,577  347,577  
Total loans, net of unearned income and allowance for loan losses19,387,452  -  -  19,134,856  19,134,856  
Short-term financial assets:          
Interest-bearing cash  1,060,034  1,060,034  -  -  1,060,034  
Federal funds sold50,838-50,838-50,838
Securities purchased under agreements to resell  613,682  -  613,682  -  613,682  
Total short-term financial assets  1,724,554  1,060,034  664,520  -  1,724,554  
Trading securities (a)897,071  -  894,498  2,573  897,071  
Loans held-for-sale 111,248  -  6,631  104,617  111,248  
Securities available-for-sale (a) (b)3,943,499  25,249  3,756,745  161,505  3,943,499  
Securities held-to-maturity14,347--14,77314,773
Derivative assets (a)121,654  33,587  88,067  -  121,654  
Other assets:          
Tax credit investments  100,105  -  -  98,400  98,400  
Deferred compensation assets  32,840  32,840  -  -  32,840  
Total other assets  132,945  32,840  -  98,400  131,240  
Nonearning assets:          
Cash & due from banks  373,274  373,274  -  -  373,274  
Fixed income receivables  57,411  -  57,411  -  57,411  
Accrued interest receivable  62,887  -  62,887  -  62,887  
Total nonearning assets  493,572  373,274  120,298  -  493,572  
Total assets$26,826,342  $1,524,984  $5,530,759  $19,516,724  $26,572,467  
          
Liabilities:          
Deposits:          
Defined maturity  $1,355,133  $-  $1,361,104  $-  $1,361,104  
Undefined maturity  21,317,230  -  21,317,230  -  21,317,230  
Total deposits  22,672,363  -  22,678,334  -  22,678,334  
Trading liabilities (a)561,848  -  561,848  -  561,848  
Short-term financial liabilities:          
Federal funds purchased414,207-414,207-414,207
Securities sold under agreements to repurchase  453,053  -  453,053  -  453,053  
Other short-term borrowings  83,177  -  83,177  -  83,177  
Total short-term financial liabilities  950,437  -  950,437  -  950,437  
Term borrowings:          
Real estate investment trust-preferred  46,032  -  -  49,350  49,350  
Term borrowings - new market tax credit investment  18,000  -  -  17,918  17,918  
Borrowings secured by residential real estate  23,126  -  -  21,969  21,969  
Other long term borrowings  953,498  -  965,066  -  965,066  
Total term borrowings1,040,656-965,06689,2371,054,303
Derivative liabilities (a)135,897  33,274  96,378  6,245  135,897  
Other noninterest-bearing liabilities:          
Fixed income payables  21,002  -  21,002  -  21,002  
Accrued interest payable  10,336  -  10,336  -  10,336  
Total other noninterest-bearing liabilities  31,338  -  31,338  -  31,338  
Total liabilities  $25,392,539  $33,274  $25,283,401  $95,482  $25,412,157  

Certain previously reported amounts have been reclassified to agree with current presentation.

  • 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.

The following table presents the contractual amount and fair value of unfunded loan commitments and standby and other commitments as of March 31, 2017 and December 31, 2016:
Contractual AmountFair Value
(Dollars in thousands)March 31, 2017December 31, 2016March 31, 2017December 31, 2016
Unfunded Commitments:  
Loan commitments$9,430,508  $8,744,649$2,612  $2,924
Standby and other commitments273,029  277,5494,230  4,037