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Investment Securities | 6 Months Ended
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Jun. 30, 2020
Marketable Securities [Abstract] |
Investment Securities | Investment Securities The following tables summarize FHN’s investment securities on June 30, 2020 and December 31, 2019:
|  | June 30, 2020
(Dollars in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Securities available-for-sale: |  |  |  |  |  |  |  |
U.S. treasuries |  | $ | 999,974 |  |  | $ | 5 |  |  | $ | (4 | ) |  | $ | 999,975 |
Government agency issued mortgage-backed securities (“MBS”) |  | 2,383,956 |  |  | 103,506 |  |  | (80 | ) |  | 2,487,382 |
Government agency issued collateralized mortgage obligations (“CMO”) |  | 1,383,703 |  |  | 31,570 |  |  | (8 | ) |  | 1,415,265 |
Other U.S. government agencies |  | 403,008 |  |  | 14,284 |  |  | — |  |  | 417,292 |
Corporates and other debt |  | 39,950 |  |  | 463 |  |  | — |  |  | 40,413 |
States and municipalities |  | 83,155 |  |  | 7,228 |  |  | — |  |  | 90,383 |
|  | $ | 5,293,746 |  |  | $ | 157,056 |  |  | $ | (92 | ) |  | 5,450,710 |
AFS debt securities recorded at fair value through earnings: |  |  |  |  |  |  |  |
SBA-interest only strips (a) |  |  |  |  |  |  |  | 25,446 |
Total securities available-for-sale (b) |  |  |  |  |  |  |  | $ | 5,476,156 |
Securities held-to-maturity: |  |  |  |  |  |  |  |
Corporates and other debt |  | $ | 10,000 |  |  | $ | — |  |  | $ | (119 | ) |  | $ | 9,881 |
Total securities held-to-maturity |  | $ | 10,000 |  |  | $ | — |  |  | $ | (119 | ) |  | $ | 9,881 |
(a) | SBA-interest only strips are recorded at elected fair value. See Note 16 - Fair Value for additional information.
(b) | Includes $4.7 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.
|  | December 31, 2019
(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 |  | 2,316,381 |  |  | 34,692 |  |  | (2,556 | ) |  | 2,348,517 |
Government agency issued CMO |  | 1,667,773 |  |  | 9,916 |  |  | (7,197 | ) |  | 1,670,492 |
Other U.S. government agencies |  | 303,463 |  |  | 3,750 |  |  | (1,121 | ) |  | 306,092 |
Corporates and other debt |  | 40,054 |  |  | 486 |  |  | — |  |  | 40,540 |
States and municipalities |  | 57,232 |  |  | 3,324 |  |  | (30 | ) |  | 60,526 |
|  | $ | 4,385,003 |  |  | $ | 52,168 |  |  | $ | (10,904 | ) |  | 4,426,267 |
AFS debt securities recorded at fair value through earnings: |  |  |  |  |  |  |  |
SBA-interest only strips (a) |  |  |  |  |  |  |  | 19,136 |
Total securities available-for-sale (b) |  |  |  |  |  |  |  | $ | 4,445,403 |
Securities held-to-maturity: |  |  |  |  |  |  |  |
Corporates and other debt |  | $ | 10,000 |  |  | $ | 1 |  |  | $ | — |  |  | $ | 10,001 |
Total securities held-to-maturity |  | $ | 10,000 |  |  | $ | 1 |  |  | $ | — |  |  | $ | 10,001 |
(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 $3.8 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 June 30, 2020 are provided below:
|  | Held-to-Maturity |  | Available-for-Sale
(Dollars in thousands) |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Within 1 year |  | $ | — |  |  | $ | — |  |  | $ | 1,106,238 |  |  | $ | 1,108,000 |
After 1 year; within 5 years |  | — |  |  | — |  |  | 137,571 |  |  | 142,491 |
After 5 years; within 10 years |  | 10,000 |  |  | 9,881 |  |  | 3,573 |  |  | 9,623 |
After 10 years |  | — |  |  | — |  |  | 278,705 |  |  | 313,395 |
Subtotal |  | 10,000 |  |  | 9,881 |  |  | 1,526,087 |  |  | 1,573,509 |
Government agency issued MBS and CMO (a) |  | — |  |  | — |  |  | 3,767,659 |  |  | 3,902,647 |
Total |  | $ | 10,000 |  |  | $ | 9,881 |  |  | $ | 5,293,746 |  |  | $ | 5,476,156 |
(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 six months ended June 30, 2020 and 2019.
| Three Months Ended June 30 |  | Six Months Ended June 30
(Dollars in thousands) | 2020 |  | 2019 |  | 2020 |  | 2019
Gross gains on sales of securities | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Gross (losses) on sales of securities | — |  |  | (267 | ) |  | — |  |  | (267 | )
Net gain/(loss) on sales of securities (a) | $ | — |  |  | $ | (267 | ) |  | $ | — |  |  | $ | (267 | )
(a) | Cash proceeds for the three and six months ended June 30, 2020 were not material. Cash pro ceeds for the three and six months ended June 30, 2019 were $171.4 million.
The following tables provide information on investments within the available-for-sale portfolio that had unrealized losses as of June 30, 2020 and December 31, 2019:
|  | As of June 30, 2020
|  | 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 |  | $ | 499,895 |  |  | $ | (4 | ) |  | $ | — |  |  | $ | — |  |  | $ | 499,895 |  |  | $ | (4 | )
Government agency issued MBS |  | 40,798 |  |  | (80 | ) |  | — |  |  | — |  |  | 40,798 |  |  | (80 | )
Government agency issued CMO |  | 15,982 |  |  | (8 | ) |  | — |  |  | — |  |  | 15,982 |  |  | (8 | )
Total temporarily impaired securities |  | $ | 556,675 |  |  | $ | (92 | ) |  | $ | — |  |  | $ | — |  |  | $ | 556,675 |  |  | $ | (92 | )
|  | As of December 31, 2019
|  | 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 |  | $ | — |  |  | $ | — |  |  | $ | 100 |  |  | $ | — |  |  | $ | 100 |  |  | $ | — |
Government agency issued MBS |  | 174,983 |  |  | (495 | ) |  | 192,755 |  |  | (2,061 | ) |  | 367,738 |  |  | (2,556 | )
Government agency issued CMO |  | 378,815 |  |  | (1,970 | ) |  | 361,124 |  |  | (5,227 | ) |  | 739,939 |  |  | (7,197 | )
Other U.S. government agencies |  | 98,471 |  |  | (1,121 | ) |  | — |  |  | — |  |  | 98,471 |  |  | (1,121 | )
States and municipalities |  | 3,551 |  |  | (30 | ) |  | — |  |  | — |  |  | 3,551 |  |  | (30 | )
Total temporarily impaired securities |  | $ | 655,820 |  |  | $ | (3,616 | ) |  | $ | 553,979 |  |  | $ | (7,288 | ) |  | $ | 1,209,799 |  |  | $ | (10,904 | )
For periods subsequent to 2019, FHN has evaluated all AFS debt securities that were in unrealized loss positions in accordance with its accounting policy for recognition of credit losses. No AFS debt securities were determined to have credit losses because the primary cause of the decline in value was attributable to changes in interest rates. Total AIR not included in the fair value or amortized cost basis of AFS debt securities was $12.4 million as of June 30, 2020. Consistent with its review of the related securities, there were no credit-related write downs of AIR for AFS debt securities during the reporting period. Additionally, for AFS 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. Therefore, no write downs of these investments to fair value occurred during the reporting period. For periods prior to 2020, FHN reviewed debt investment securities that were in unrealized loss positions in accordance with its accounting policy for OTTI and did not consider them other-than-temporarily impaired. For debt securities with unrealized losses, FHN did not intend to sell them and it is more-likely-than-not that FHN would not be required to sell them prior to recovery. The decline in value was primarily attributable to changes in interest rates and not credit losses. The carrying amount of equity investments without a readily determinable fair value was $24.7 million and $25.6 million at June 30, 2020 and December 31, 2019, respectively. The year-to-date 2020 and 2019 gross amounts of upward and downward valuation adjustments were not significant. Unrealized gains of $4.8 million and $1.2 million were recognized in the three months ended June 30, 2020 and 2019, respectively, and unrealized losses of $0.9 million and unrealized gains of $4.6 million were recognized in the six months ended June 30, 2020 and 2019, respectively, for equity investments with readily determinable fair values.

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