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Acquisitions and Divestitures | 9 Months Ended
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Sep. 30, 2017
Business Combinations [Abstract] |
Acquisitions and Divestitures | Acquisitions and Divestitures On May 4, 2017, FHN and Capital Bank Financial Corp. (“Capital Bank” or "CBF") announced that they had entered into an agreement and plan of merger. Under the agreement FHN will acquire Capital Bank, which is headquartered in Charlotte, North Carolina, and reported approximately $10 billion of assets at June 30, 2017. At the time of announcement Capital Bank operated 193 branches in North and South Carolina, Tennessee, Florida and Virginia. Collectively, Capital Bank shareholders will receive approximately $411 million in cash plus FHN common shares which are expected to represent approximately 29 percent of FHN’s outstanding common shares immediately after consummation of the merger. The total transaction value, measured at the time of announcement, was approximately $2.2 billion. The agreement calls for two members of Capital Bank’s board of directors to join FHN’s board after closing. The transaction is expected to close in fourth quarter 2017, subject to regulatory approval of the sale of two branches and customary conditions. On April 3, 2017, FTN Financial acquired substantially all of the assets and assumed substantially all of the liabilities of Coastal Securities, Inc. (“Coastal”), a national leader in the trading, securiti zation, and analysis of Small Business Administration (“SBA”) loans, for appro ximately $131 million in cash. Coastal, which was based in Houston, TX, also traded United States Department of Agriculture (“USDA”) loans and fixed income products and provided municipal underwriting and advisory services to its clients. Coastal’s government-guaranteed loan products, combined with FTN Financial’s existing SBA trading activities, have established an additional major product sector for FTN Financial. The following schedule details acquired assets and liabilities and consideration paid, as well as adjustments to record the assets and liabilities at their estimated fair values as of April 3, 2017:
|  | Coastal Securities, Inc.
|  | Purchase Accounting/
|  | As |  | Fair Value |  | As recorded
(Dollars in thousands) |  | Acquired |  | Adjustments |  | by FHN
Assets: |  |  |  |  |  |
Cash and due from banks |  | $ | 7,502 |  |  | $ | — |  |  | $ | 7,502 |
Interest-bearing cash |  | 4,132 |  |  | — |  |  | 4,132 |
Trading securities |  | 423,662 |  |  | (284,580 | ) |  | 139,082 |
Loans held-for-sale |  | — |  |  | 236,088 |  |  | 236,088 |
Investment securities |  | — |  |  | 1,413 |  |  | 1,413 |
Other intangible assets, net |  | — |  |  | 27,300 |  |  | 27,300 |
Premises and equipment, net |  | 1,229 |  |  | — |  |  | 1,229 |
Other assets |  | 1,658 |  |  | 14 |  |  | 1,672 |
Total assets acquired |  | $ | 438,183 |  |  | $ | (19,765 | ) |  | $ | 418,418 |
Liabilities: |  |  |  |  |  |
Securities sold under agreements to repurchase |  | $ | 201,595 |  |  | $ | — |  |  | $ | 201,595 |
Other short-term borrowings |  | 33,509 |  |  | — |  |  | 33,509 |
Fixed income payables |  | 143,647 |  |  | (47,158 | ) |  | 96,489 |
Other liabilities |  | 958 |  |  | (642 | ) |  | 316 |
Total liabilities assumed |  | 379,709 |  |  | (47,800 | ) |  | 331,909 |
Net Assets Acquired |  | $ | 58,474 |  |  | $ | 28,035 |  |  | 86,509 |
Consideration paid: |  |  |  |  |  |
Cash |  |  |  |  |  | (131,473 | )
Goodwill |  |  |  |  |  | $ | 44,964 |
In relation to the acquisition, FHN has recorded $45.0 million in goodwill, representing the excess of acquisition consideration over the estimated fair value of net assets acquired (refer to Note 6 - Intangible Assets for additional information), and all of which is expected to be deductible for tax purposes. The goodwill is the result of adding an experienced workforce, establishing an additional major product sector for FTN Financial, expected synergies, and other factors. FHN's operating results for 2017 include the operating results of the acquired assets and assumed liabilities of Coastal subsequent to the acquisition on April 3, 2017. For the three and nine months ended September 30, 2017, FHN recognized $8.2 million and $14.6 million, respectively, of acquisition and integration-related expenses primarily associated with the CBF and Coastal acquisitions. These expenses were primarily included in Professional fees, Legal fees, Employee compensation, incentives and benefits, and All other expense on the Consolidated Condensed Statements of Income. On September 16, 2016, FTBNA acquired $537.4 million in unpaid principal balance (“UPB”) of restaurant franchise loans from GE Capital’s Southeast and Southwest regional portfolios. Subsequent to the acquisition the acquired loans were combined with existing FTBNA relationships to establish a franchise finance specialty banking business. In addition to the transactions mentioned above, FHN acquires or divests assets from time to time in transactions that are considered business combinations or divestitures but are not material to FHN individually or in the aggregate. The most recent transaction of that type closed in October 2017, when FTBNA acquired the operations and certain assets of Professional Mortgage Company, Inc. ("PMC"). PMC is a provider of institutional debt capital and commercial mortgage loan servicing. Eleven professionals joined FTBNA's commercial real estate ("CRE") team as a result of the transaction, expanding the capabilities of its CRE platform.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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