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Investment Securities | 9 Months Ended
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Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment Securities The following tables summarize FHN’s investment securities on September 30, 2018 and December 31, 2017:
|  | September 30, 2018
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Securities available-for-sale: |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | 100 |  |  | $ | — |  |  | $ | (2 | ) |  | $ | 98 |
Government agency issued mortgage-backed securities (“MBS”) |  | 2,504,101 |  |  | 2,987 |  |  | (92,211 | ) |  | 2,414,877 |
Government agency issued collateralized mortgage obligations (“CMO”) |  | 2,077,326 |  |  | 216 |  |  | (86,358 | ) |  | 1,991,184 |
Other U.S. government agencies |  | 114,053 |  |  | — |  |  | (965 | ) |  | 113,088 |
Corporates and other debt |  | 55,495 |  |  | 270 |  |  | (691 | ) |  | 55,074 |
States and municipalities |  | 24,151 |  |  | — |  |  | (450 | ) |  | 23,701 |
|  | $ | 4,775,226 |  |  | $ | 3,473 |  |  | $ | (180,677 | ) |  | 4,598,022 |
AFS debt securities recorded at fair value through earnings: |  |  |  |  |  |  |  |
SBA-interest only strips (a) |  |  |  |  |  |  |  | 10,361 |
Total securities available-for-sale (b) |  |  |  |  |  |  |  | $ | 4,608,383 |
Securities held-to-maturity: |  |  |  |  |  |  |  |
Corporates and other debt |  | $ | 10,000 |  |  | $ | — |  |  | $ | (244 | ) |  | $ | 9,756 |
Total securities held-to-maturity |  | $ | 10,000 |  |  | $ | — |  |  | $ | (244 | ) |  | $ | 9,756 |
(a) | SBA-interest only strips are recorded at elected fair value. See Note 16 - Fair Value of Assets and Liabilities for additional information.
(b) | Includes $3.6 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.
|  | December 31, 2017
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Securities available-for-sale: |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | 100 |  |  | $ | — |  |  | $ | (1 | ) |  | $ | 99 |
Government agency issued MBS |  | 2,580,442 |  |  | 10,538 |  |  | (13,604 | ) |  | 2,577,376 |
Government agency issued CMO |  | 2,302,439 |  |  | 1,691 |  |  | (34,272 | ) |  | 2,269,858 |
Corporates and other debt |  | 55,799 |  |  | 23 |  |  | (40 | ) |  | 55,782 |
Equity and other (a) |  | 265,863 |  |  | 7 |  |  | — |  |  | 265,870 |
|  | $ | 5,204,643 |  |  | $ | 12,259 |  |  | $ | (47,917 | ) |  | 5,168,985 |
AFS debt securities recorded at fair value through earnings: |  |  |  |  |  |  |  |
SBA-interest only strips (b) |  |  |  |  |  |  |  | 1,270 |
Total securities available-for-sale (c) |  |  |  |  |  |  |  | $ | 5,170,255 |
Securities held-to-maturity: |  |  |  |  |  |  |  |
Corporates and other debt |  | $ | 10,000 |  |  | $ | — |  |  | $ | (99 | ) |  | $ | 9,901 |
Total securities held-to-maturity |  | $ | 10,000 |  |  | $ | — |  |  | $ | (99 | ) |  | $ | 9,901 |
(a) | Includes restricted investments in FHLB-Cincinnati stock of $87.9 million and FRB stock of $134.6 million. The remainder is money market, mutual funds, and cost method investments. Equity investments were reclassified to Other assets upon adoption of ASU 2016-01 on January 1, 2018.
(b) | SBA-interest only strips are recorded at elected fair value. See Note 16 - Fair Value of Assets and Liabilities for additional information.
(c) | Includes $4.0 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 debt securities portfolios on September 30, 2018 are provided below:
|  | Held-to-Maturity |  | Available-for-Sale
(Dollars in thousands) |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Within 1 year |  | $ | — |  |  | $ | — |  |  | $ | 15,188 |  |  | $ | 15,025 |
After 1 year; within 5 years |  | — |  |  | — |  |  | 154,460 |  |  | 153,261 |
After 5 years; within 10 years |  | 10,000 |  |  | 9,756 |  |  | — |  |  | 3,741 |
After 10 years |  | — |  |  | — |  |  | 24,151 |  |  | 30,295 |
Subtotal |  | 10,000 |  |  | 9,756 |  |  | 193,799 |  |  | 202,322 |
Government agency issued MBS and CMO (a) |  | — |  |  | — |  |  | 4,581,427 |  |  | 4,406,061 |
Total |  | $ | 10,000 |  |  | $ | 9,756 |  |  | $ | 4,775,226 |  |  | $ | 4,608,383 |
(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 debt investment securities for the three and nine months ended September 30, 2018. Equity securities are included for periods prior to 2018.
|  | Three Months Ended September 30 |  | Nine Months Ended September 30
(Dollars in thousands) |  | 2018 |  | 2017 |  | 2018 |  | 2017
Gross gains on sales of securities |  | $ | — |  |  | $ | 6 |  |  | $ | 52 |  |  | $ | 455 |
Gross (losses) on sales of securities |  | — |  |  | — |  |  | — |  |  | — |
Net gain/(loss) on sales of securities (a) (b) |  | $ | — |  |  | $ | 6 |  |  | $ | 52 |  |  | $ | 455 |
(a) | Cash proceeds from the sale of available-for-sale securities for the three and nine months ended September 30, 2018 and 2017 were not material.
(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.
The following tables provide information on investments within the available-for-sale portfolio that had unrealized losses as of September 30, 2018 and December 31, 2017:
|  | As of September 30, 2018
|  | Less than 12 months |  | 12 months or longer |  | Total
(Dollars in thousands) |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
U.S. treasuries |  | $ | — |  |  | $ | — |  |  | $ | 98 |  |  | $ | (2 | ) |  | $ | 98 |  |  | $ | (2 | )
Government agency issued MBS |  | 1,500,317 |  |  | (52,607 | ) |  | 732,470 |  |  | (39,604 | ) |  | 2,232,787 |  |  | (92,211 | )
Government agency issued CMO |  | 1,000,444 |  |  | (28,664 | ) |  | 963,763 |  |  | (57,694 | ) |  | 1,964,207 |  |  | (86,358 | )
Other U.S. government agencies |  | 113,088 |  |  | (965 | ) |  | — |  |  | — |  |  | 113,088 |  |  | (965 | )
Corporates and other debt |  | 40,024 |  |  | (691 | ) |  | — |  |  | — |  |  | 40,024 |  |  | (691 | )
States and municipalities |  | 23,701 |  |  | (450 | ) |  | — |  |  | — |  |  | 23,701 |  |  | (450 | )
Total temporarily impaired securities |  | $ | 2,677,574 |  |  | $ | (83,377 | ) |  | $ | 1,696,331 |  |  | $ | (97,300 | ) |  | $ | 4,373,905 |  |  | $ | (180,677 | )
|  | As of December 31, 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
U.S. treasuries |  | $ | 99 |  |  | $ | (1 | ) |  | $ | — |  |  | $ | — |  |  | $ | 99 |  |  | $ | (1 | )
Government agency issued MBS |  | 1,455,476 |  |  | (4,738 | ) |  | 331,900 |  |  | (8,866 | ) |  | 1,787,376 |  |  | (13,604 | )
Government agency issued CMO |  | 1,043,987 |  |  | (7,464 | ) |  | 832,173 |  |  | (26,808 | ) |  | 1,876,160 |  |  | (34,272 | )
Corporates and other debt |  | 15,294 |  |  | (40 | ) |  | — |  |  | — |  |  | 15,294 |  |  | (40 | )
Total temporarily impaired securities |  | $ | 2,514,856 |  |  | $ | (12,243 | ) |  | $ | 1,164,073 |  |  | $ | (35,674 | ) |  | $ | 3,678,929 |  |  | $ | (47,917 | )
FHN has reviewed debt 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. The carrying amount of equity investments without a readily determinable fair value was $21.6 million and $16.3 million at September 30, 2018 and January 1, 2018, respectively. The year-to-date 2018 gross amounts of upward and downward valuation adjustments were not significant. Unrealized gains of $1.0 million and $2.1 million were recognized in the three and nine months ended September 30, 2018, respectively, for equity investments with readily determinable fair values. In third quarter 2018 FHN sold its remaining holdings of Visa Class B Shares resulting in a pre-tax gain of $212.9 million recognized within the Corporate segment. See the Visa Matters section of Note 10 - Contingencies and Other Disclosures and Other Derivatives section of Note 14 - Derivatives for more information regarding FHN’s Visa shares.

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