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Investment Securities | 9 Months Ended
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Sep. 30, 2017
Marketable Securities [Abstract] |
Investment Securities | The following tables summarize FHN’s investment securities on September 30, 2017 and December 31, 2016:
|  | September 30, 2017
(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”) |  | 2,081,677 |  |  | 15,993 |  |  | (10,165 | ) |  | 2,087,505 |
Government agency issued collateralized mortgage obligations (“CMO”) |  | 1,701,467 |  |  | 4,295 |  |  | (19,767 | ) |  | 1,685,995 |
Equity and other (a) |  | 186,413 |  |  | 2 |  |  | — |  |  | 186,415 |
|  | $ | 3,969,657 |  |  | $ | 20,290 |  |  | $ | (29,932 | ) |  | 3,960,015 |
AFS debt securities recorded at fair value through earnings: |  |  |  |  |  |  |  |
SBA-interest only strips (b) |  |  |  |  |  |  |  | 3,123 |
Total securities available-for-sale (c) |  |  |  |  |  |  |  | $ | 3,963,138 |
Securities held-to-maturity: |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 10,000 |  |  | $ | — |  |  | $ | (15 | ) |  | $ | 9,985 |
Total securities held-to-maturity |  | $ | 10,000 |  |  | $ | — |  |  | $ | (15 | ) |  | $ | 9,985 |
(a) | Includes restricted investments in FHLB-Cincinnati stock of $87.9 million and FRB stock of $68.6 million. The remainder is money market, mutual funds, and cost method investments.
(b) | SBA-interest only strips are recorded at elected fair value. See Note 16 - Fair Value for additional information.
(c) | Includes $3.3 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.
|  | December 31, 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 MBS |  | 2,217,593 |  |  | 14,960 |  |  | (23,866 | ) |  | 2,208,687 |
Government agency issued CMO |  | 1,566,986 |  |  | 4,909 |  |  | (23,937 | ) |  | 1,547,958 |
Equity and other (a) |  | 186,756 |  |  | — |  |  | (2 | ) |  | 186,754 |
Total securities available-for-sale (b) |  | $ | 3,971,435 |  |  | $ | 19,869 |  |  | $ | (47,805 | ) |  | $ | 3,943,499 |
Securities held-to-maturity: |  |  |  |  |  |  |  |
States and municipalities |  | $ | 4,347 |  |  | $ | 393 |  |  | $ | — |  |  | $ | 4,740 |
Corporate bonds |  | 10,000 |  |  | 33 |  |  | — |  |  | 10,033 |
Total securities held-to-maturity |  | $ | 14,347 |  |  | $ | 426 |  |  | $ | — |  |  | $ | 14,773 |
(a) | Includes restricted investments in FHLB-Cincinnati stock of $87.9 million and FRB stock of $68.6 million. The remainder is money market, mutual funds, and cost method investments.
(b) | Includes $3.3 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.
The amortized cost and fair value by contractual maturity for the available-for-sale and held-to-maturity securities portfolios on September 30, 2017 are provided below:
|  | Held-to-Maturity |  | Available-for-Sale
(Dollars in thousands) |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Within 1 year |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
After 1 year; within 5 years |  | — |  |  | — |  |  | 100 |  |  | 120 |
After 5 years; within 10 years |  | 10,000 |  |  | 9,985 |  |  | — |  |  | 1,464 |
After 10 years |  | — |  |  | — |  |  | — |  |  | 1,639 |
Subtotal |  | 10,000 |  |  | 9,985 |  |  | 100 |  |  | 3,223 |
Government agency issued MBS and CMO (a) |  | — |  |  | — |  |  | 3,783,144 |  |  | 3,773,500 |
Equity and other |  | — |  |  | — |  |  | 186,413 |  |  | 186,415 |
Total |  | $ | 10,000 |  |  | $ | 9,985 |  |  | $ | 3,969,657 |  |  | $ | 3,963,138 |
(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 investment securities for the three and nine months ended September 30:
| Three Months Ended September 30 |  | Nine Months Ended September 30
(Dollars in thousands) | 2017 |  | 2016 |  | 2017 |  | 2016
Gross gains on sales of securities | $ | 6 |  |  | $ | — |  |  | $ | 455 |  |  | $ | 3,999 |
Gross (losses) on sales of securities | — |  |  | — |  |  | — |  |  | (2,326 | )
Net gain/(loss) on sales of securities (a) (b) | 6 |  |  | — |  |  | 455 |  |  | 1,673 |
Net OTTI recorded (c) | — |  |  | (200 | ) |  | — |  |  | (200 | )
Total securities gain/(loss) | $ | 6 |  |  | $ | (200 | ) |  | $ | 455 |  |  | $ | 1,473 |
(a) | Cash proceeds from the sale of available-for-sale securities for the three and nine months ended September 30, 2017 were not material. There were no cash proceeds from the sale of available-for-sale securities for the three months ended September 30, 2016. Cash proceeds from the sale of available-for-sale securities for the nine months ended September 30, 2016 were $1.5 million and included a $1.7 million gain from an exchange of approximately $294 million of AFS debt securities.
(b) | Nine months ended September 30, 2017 includes a $.4 million gain associated with the call of a $4.4 million held-to-maturity municipal bond.
(c) | OTTI recorded is related to equity securities.
The following tables provide information on investments within the available-for-sale portfolio that had unrealized losses as of September 30, 2017 and December 31, 2016:
|  | As of September 30, 2017
|  | 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 |  | $ | 885,926 |  |  | $ | (10,936 | ) |  | $ | 311,471 |  |  | $ | (8,831 | ) |  | $ | 1,197,397 |  |  | $ | (19,767 | )
Government agency issued MBS |  | 875,307 |  |  | (8,770 | ) |  | 34,184 |  |  | (1,395 | ) |  | 909,491 |  |  | (10,165 | )
Total temporarily impaired securities |  | 1,761,233 |  |  | (19,706 | ) |  | 345,655 |  |  | (10,226 | ) |  | 2,106,888 |  |  | (29,932 | )
|  | As of December 31, 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 |  | $ | 1,059,471 |  |  | $ | (19,052 | ) |  | $ | 116,527 |  |  | $ | (4,885 | ) |  | $ | 1,175,998 |  |  | $ | (23,937 | )
Government agency issued MBS |  | 1,912,126 |  |  | (23,866 | ) |  | — |  |  | — |  |  | 1,912,126 |  |  | (23,866 | )
Total debt securities |  | 2,971,597 |  |  | (42,918 | ) |  | 116,527 |  |  | (4,885 | ) |  | 3,088,124 |  |  | (47,803 | )
Equity |  | 7 |  |  | (2 | ) |  | — |  |  | — |  |  | 7 |  |  | (2 | )
Total temporarily impaired securities |  | $ | 2,971,604 |  |  | $ | (42,920 | ) |  | $ | 116,527 |  |  | $ | (4,885 | ) |  | $ | 3,088,131 |  |  | $ | (47,805 | )
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.

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