Investment Securities

12 Months Ended

Dec. 31, 2012

Investment Securities [Abstract]

Investment Securities

Note 3 – Investment Securities

The following tables summarize FHN’s available for sale (“AFS”) securities on December 31, 2012 and 2011:
	December 31, 2012
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
Securities available for sale:
U.S. treasuries	$	39,997	$	2	$	-	$	39,999
Government agency issued mortgage-backed securities ("MBS")		1,072,425		64,155		-		1,136,580
Government agency issued collateralized mortgage obligations ("CMO")		1,623,202		26,490		(481)		1,649,211
Other U.S. government agencies		3,504		249		-		3,753
States and municipalities		15,255		-		-		15,255
Equity (a)		216,489		11		-		216,500
Other		510		-		-		510
Total securities available for sale (b)	$	2,971,382	$	90,907	$	(481)	$	3,061,808

• Includes restricted investments in FHLB-Cincinnati stock of $125.5million and FRB stock of $66.0million. The remainder is money market, venture capital, and cost method investments.
• Includes $2.8billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes. Of this amount, $.6 billion was pledged as collateral for securities sold under repurchase agreements.

	December 31, 2011
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
Securities available for sale:
U.S. treasuries	$	40,030	$	91	$	-	$	40,121
Government agency issued MBS		1,334,174		76,054		-		1,410,228
Government agency issued CMO		1,325,011		32,932		-		1,357,943
Other U.S. government agencies		15,277		674		-		15,951
States and municipalities		18,070		-		-		18,070
Equity (a)		223,430		-		-		223,430
Other		511		18		-		529
Total securities available for sale (b)	$	2,956,503	$	109,769	$	-	$	3,066,272

• Includes restricted investments in FHLB-Cincinnati stock of $125.5million and FRB stock of $66.1million. The remainder is money market, venture capital, and cost method investments.
• Includes $2.7 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes. Of this amount, $.8billion was pledged as collateral for securities sold under repurchase agreements.

National banks chartered by the federal government are, by law, members of the Federal Reserve System. Each member bank is required to own stock in its regional Federal Reserve Bank (“FRB”). Given this requirement, FRB stock may not be sold, traded, or pledged as collateral for loans. Membership in the Federal Home Loan Bank (“FHLB”) network requires ownership of capital stock. Member banks are entitled to borrow funds from the FHLB and are required to pledge mortgage loans as collateral. Investments in the FHLB are non-transferable and, generally, membership is maintained primarily to provide a source of liquidity as needed.

The amortized cost and fair value by contractual maturity for the available for sale securities portfolio on December 31, 2012 are provided below:
		Available for Sale
		Amortized		Fair
(Dollars in thousands)		Cost		Value
Within 1 year		$	40,507	$	40,509
After 1 year; within 5 years			5,004		5,253
After 5 years; within 10 years			-		-
After 10 years			13,755		13,755
	Subtotal		59,266		59,517
Government agency issued MBS and CMO			2,695,627		2,785,791
Equity			216,489		216,500
Total		$	2,971,382	$	3,061,808

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 twelve months ended December 31:
	Available for Sale
(Dollars in thousands)	2012		2011		2010
Gross gains on sales of securities (a)	$	5,433	$	44,787	$	15,709
Gross (losses) on sales of securities		-		(8,623)		(1)
Net gain/(loss) on sales of securities (b)	$	5,433	$	36,164	$	15,708
Venture capital investments (c)		(4,700)		-		(4,598)
Net other than temporary impairment ("OTTI") recorded (d)		(40)		-		(188)
Total securities gain/(loss), net	$	693	$	36,164	$	10,922

(a)2011 and 2010include $35.1 millionand $14.8 million, respectively, related to sale of Visa Class B shares.

(b)Proceeds from sales during the 2012, 2011 and 2010were $47.5 million, $495.1 million and $528.8 millionrespectively.

(c)Generally includes write-offs and /or unrealized fair value adjustments related to venture capital investments.

(d) OTTI recorded in 2012 and 2010 is related to equity securities.

There were no unrealized losses within the available for sale portfolio on December 31, 2011. The following table provides information on investments within the available for sale portfolio that had unrealized losses on December 31, 2012:
	On December 31, 2012
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
Government agency issued CMO	$	145,435	$	(481)	$	-	$	-	$	145,435	$	(481)
Total temporarily impaired securities	$	145,435	$	(481)	$	-	$	-	$	145,435	$	(481)

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 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.