Investment Securities

12 Months Ended

Dec. 31, 2013

Investment Securities [Abstract]

Investment Securities

Note 3 – Investment Securities

The following tables summarize FHN’s available-for-sale (“AFS”) securities on December 31, 2013 and 2012:
	December 31, 2013
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
U.S. treasuries	$	39,997	$	-	$	(1)	$	39,996
Government agency issued mortgage-backed securities ("MBS")		796,835		32,353		(5,499)		823,689
Government agency issued collateralized mortgage obligations ("CMO")		2,335,718		12,399		(57,180)		2,290,937
Other U.S. government agencies		2,202		124		-		2,326
States and municipalities		15,155		-		-		15,155
Equity and other (a)		226,376		-		(22)		226,354
Total securities available for sale (b)	$	3,416,283	$	44,876	$	(62,702)	$	3,398,457

• Includes restricted investments in FHLB-Cincinnati stock of $128.0million and FRB stock of $66.0million. The remainder is money market, venture capital, and cost method investments.
• Includes $3.1billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.

	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 MBS		1,072,425		64,155		-		1,136,580
Government agency issued 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 and other (a)		216,999		11		-		217,010
Total securities available for sale (b)	$	2,971,382	$	90,907	$	(481)	$	3,061,808
Certain previously reported amounts have been reclassified to agree with current presentation.

• Includes restricted investments in FHLB-Cincinnati stock of $125.5 million and FRB stock of $66.0million. The remainder is money market, venture capital, and cost method investments.
• Includes $2.8 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 securities portfolio on December 31, 2013, are provided below:
		Available-for-Sale
		Amortized		Fair
(Dollars in thousands)		Cost		Value
Within 1 year		$	39,997	$	39,996
After 1 year; within 5 years			3,702		3,826
After 5 years; within 10 years			-		-
After 10 years			13,655		13,655
	Subtotal		57,354		57,477
Government agency issued MBS and CMO			3,132,553		3,114,626
Equity and other			226,376		226,354
Total		$	3,416,283	$	3,398,457

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)	2013		2012		2011
Gross gains on sales of securities (a)	$	4,078	$	5,433	$	44,787
Gross (losses) on sales of securities		(1,193)		-		(8,623)
Net gain/(loss) on sales of securities (b)	$	2,885	$	5,433	$	36,164
Venture capital investments (c)		-		(4,700)		-
Net OTTI recorded (d)		(1,125)		(40)		-
Total securities gain/(loss), net	$	1,760	$	693	$	36,164

• 2011 includes $35.1 million related to sale of Visa Class B shares.
• Proceeds from sales during 2013, 2012 and 2011 were $63.8 million, $47.5 million and $495.1 million respectively.
• Generally includes write-offs and/or unrealized fair value adjustments related to venture capital investments.
• OTTI recorded in 2013 and 2012 is related to equity securities.

The following tables provide information on investments within the available-for-sale portfolio that had unrealized losses on December 31, 2013 and 2012:
	On December 31, 2013
	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	$	1,639,254	$	(57,117)	$	10,010	$	(63)	$	1,649,264	$	(57,180)
Government agency issued MBS		147,792		(5,499)		-		-		147,792		(5,499)
U.S. treasuries		24,997		(1)		-		-		24,997		(1)
Total debt securities		1,812,043		(62,617)		10,010		(63)		1,822,053		(62,680)
Equity		43		(22)		-		-		43		(22)
Total temporarily impaired securities	$	1,812,086	$	(62,639)	$	10,010	$	(63)	$	1,822,096	$	(62,702)
	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.