Derivatives (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives Associated With Fixed Income Trading Activities

The following tables summarize FHN’s derivatives associated with fixed income trading activities as of June 30, 2020 and December 31, 2019:

	June 30, 2020
(Dollars in thousands)	Notional		Assets		Liabilities
Customer interest rate contracts	$	3,667,914	$	254,246	$	1,827
Offsetting upstream interest rate contracts	3,667,914		7,454		17,667
Forwards and futures purchased	7,351,632		31,853		787
Forwards and futures sold	7,744,323		3,555		29,696

	December 31, 2019
(Dollars in thousands)	Notional		Assets		Liabilities
Customer interest rate contracts	$	2,697,522	$	65,768	$	6,858
Offsetting upstream interest rate contracts	2,697,522		2,583		3,994
Option contracts purchased	40,000		131		—
Forwards and futures purchased	9,217,350		17,029		3,187
Forwards and futures sold	9,403,112		3,611		16,620

Derivatives Associated With Interest Rate Risk Management Activities

The following tables summarize FHN’s derivatives associated with interest rate risk management activities as of June 30, 2020 and December 31, 2019:

	June 30, 2020
(Dollars in thousands)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	3,679,991	$	297,233	$	258
Offsetting upstream interest rate contracts	3,679,991		4,877		24,922
Debt Hedging
Hedging Instruments:
Interest rate swaps	$	500,000	$	27	N/A
Hedged Items:
Term borrowings:
Par	N/A		N/A		$	500,000
Cumulative fair value hedging adjustments	N/A		N/A		2,142
Unamortized premium/(discount) and issuance costs	N/A		N/A		(296		)
Total carrying value	N/A		N/A		$	501,846

	December 31, 2019
(Dollars in thousands)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	3,044,067	$	90,394	$	3,515
Offsetting upstream interest rate contracts	3,044,067		3,537		9,735
Debt Hedging
Hedging Instruments:
Interest rate swaps	$	500,000	N/A		$	69
Hedged Items:
Term borrowings:
Par	N/A		N/A		$	500,000
Cumulative fair value hedging adjustments	N/A		N/A		(1,604		)
Unamortized premium/(discount) and issuance costs	N/A		N/A		(740		)
Total carrying value	N/A		N/A		$	497,656

Gains/(Losses) on Derivatives Associated with Interest Rate Risk Management Activities

The following table summarizes gains/(losses) on FHN’s derivatives associated with interest rate risk management activities for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30						Six Months Ended June 30
	2020			2019			2020			2019
(Dollars in thousands)	Gains/(Losses)			Gains/(Losses)			Gains/(Losses)			Gains/(Losses)
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts (a)	$	15,844		$	50,706		$	211,396		$	79,818
Offsetting upstream interest rate contracts (a)	(15,844		)	(50,706		)	(211,396		)	(79,818		)
Debt Hedging
Hedging Instruments:
Interest rate swaps (b)	$	(737	)	$	6,697		$	4,197		$	10,976
Hedged Items:
Term borrowings (a) (c)	720			(6,605		)	(3,745		)	(10,871		)

(a) Gains/losses included in All other expense within the Consolidated Condensed Statements of Income.

(b) Gains/losses included in the Interest expense.

(c)

Represents gains and losses attributable to changes in fair value due to interest rate risk as designated in ASC 815-20 hedging relationships.

Derivative Associated With Cash Flow Hedges

The following tables summarize FHN’s derivative activities associated with cash flow hedges as of June 30, 2020 and December 31, 2019:

	June 30, 2020
(Dollars in thousands)	Notional		Assets		Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate swaps	$	700,000	$	29	$	48
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)	N/A		$	700,000	N/A

	December 31, 2019
(Dollars in thousands)	Notional		Assets		Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate swaps	$	900,000	N/A		$	241
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)	N/A		$	900,000	N/A

Gains/(Losses) on Derivatives Associated with Cash Flow Hedges

The following table summarizes gains/(losses) on FHN’s derivatives associated with cash flow hedges for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30					Six Months Ended June 30
	2020			2019		2020			2019
(Dollars in thousands)	Gains/(Losses)			Gains/(Losses)		Gains/(Losses)			Gains/(Losses)
Cash Flow Hedges
Hedging Instruments:
Interest rate swaps (a)	$	69		$	11,896	$	17,443		$	19,114
Gain/(loss) recognized in Other comprehensive income/(loss)	1,640			7,575		14,795			11,511
Gain/(loss) reclassified from AOCI into Interest income	(1,623		)	1,334		(1,717		)	2,785

(a)

Approximately $9.6 million of pre-tax gains are expected to be reclassified into earnings in the next twelve months.

Derivative Assets And Collateral Received

The following table provides details of derivative assets and collateral received as presented on the Consolidated Condensed Statements of Condition as of June 30, 2020 and December 31, 2019:

							Gross amounts not offset in  the Statements of Condition
(Dollars in thousands)	Gross amounts of recognized assets		Gross amounts offset in the Statements of Condition		Net amounts of assets presented in the Statements of Condition (a)		Derivative liabilities available for offset			Collateral received			Net amount
Derivative assets:
June 30, 2020
Interest rate derivative contracts	$	564,037	$	—	$	564,037	$	(2,253	)	$	(348,497	)	$	213,287
Forward contracts	35,408		—		35,408		(6,927		)	(12,590		)	15,891
	$	599,445	$	—	$	599,445	$	(9,180	)	$	(361,087	)	$	229,178
December 31, 2019
Interest rate derivative contracts	$	162,344	$	—	$	162,344	$	(5,604	)	$	(143,334	)	$	13,406
Forward contracts	20,640		—		20,640		(13,292		)	(2,000		)	5,348
	$	182,984	$	—	$	182,984	$	(18,896	)	$	(145,334	)	$	18,754

(a)

Included in Derivative assets on the Consolidated Condensed Statements of Condition. As of June 30, 2020 and December 31, 2019, $.3 million and $.1 million, respectively, of derivative assets have been excluded from these tables because they are generally not subject to master netting or similar agreements.

Derivative Liabilities and Collateral Pledged

The following table provides details of derivative liabilities and collateral pledged as presented on the Consolidated Condensed Statements of Condition as of June 30, 2020 and December 31, 2019:

							Gross amounts not offset in the Statements of Condition
(Dollars in thousands)	Gross amounts of recognized liabilities		Gross amounts offset in the Statements of Condition		Net amounts of liabilities presented in the Statements of Condition (a)		Derivative assets available for offset			Collateral pledged			Net amount
Derivative liabilities:
June 30, 2020
Interest rate derivative contracts	$	44,743	$	—	$	44,743	$	(2,253	)	$	(38,832	)	$	3,658
Forward contracts	30,483		—		30,483		(6,927		)	(23,556		)	—
	$	75,226	$	—	$	75,226	$	(9,180	)	$	(62,388	)	$	3,658
December 31, 2019
Interest rate derivative contracts	$	24,431	$	—	$	24,431	$	(5,604	)	$	(18,689	)	$	138
Forward contracts	19,807		—		19,807		(13,292		)	(6,515		)	—
	$	44,238	$	—	$	44,238	$	(18,896	)	$	(25,204	)	$	138

 

(a)

Included in Derivative liabilities on the Consolidated Condensed Statements of Condition. As of June 30, 2020 and December 31, 2019, $19.2 million and $23.2 million, respectively, of derivative liabilities (primarily Visa-related derivatives) have been excluded from these tables because they are generally not subject to master netting or similar agreements.