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Fair Value of Assets and Liabilities (Tables)
12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Schedule of Assets and Liabilities Measured on Recurring Basis
The following table presents the balance of assets and liabilities measured at fair value on a recurring basis as of December 31, 2019: 
 
 
December 31, 2019
(Dollars in thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
Trading securities—fixed income:
 
 
 
 
 
 
 
 
U.S. treasuries
 
$
—

 
$
134,844

 
$
—

 
$
134,844

Government agency issued MBS
 
—

 
268,024

 
—

 
268,024

Government agency issued CMO
 
—

 
250,652

 
—

 
250,652

Other U.S. government agencies
 
—

 
124,972

 
—

 
124,972

States and municipalities
 
—

 
120,744

 
—

 
120,744

Corporate and other debt
 
—

 
445,253

 
—

 
445,253

Equity, mutual funds, and other
 
—

 
777

 
—

 
777

Total trading securities—fixed income
 
—

 
1,345,266

 
—

 
1,345,266

Trading securities—mortgage banking
 
—

 
—

 
941

 
941

Loans held-for-sale (elected fair value)
 
—

 
—

 
14,033

 
14,033

Securities available-for-sale:
 
 
 
 
 
 
 
 
U.S. treasuries
 
—

 
100

 
—

 
100

Government agency issued MBS
 
—

 
2,348,517

 
—

 
2,348,517

Government agency issued CMO
 
—

 
1,670,492

 
—

 
1,670,492

Other U.S. government agencies
 
—

 
306,092

 
—

 
306,092

States and municipalities
 
—

 
60,526

 
—

 
60,526

Corporate and other debt
 
—

 
40,540

 
—

 
40,540

Interest-Only Strip (elected fair value)
 
—

 
—

 
19,136

 
19,136

Total securities available-for-sale
 
—

 
4,426,267

 
19,136

 
4,445,403

Other assets:
 
 
 
 
 
 
 
 
Deferred compensation mutual funds
 
46,815

 
—

 
—

 
46,815

Equity, mutual funds, and other
 
22,643

 
—

 
—

 
22,643

Derivatives, forwards and futures
 
20,640

 
—

 
—

 
20,640

Derivatives, interest rate contracts
 
—

 
162,413

 
—

 
162,413

Derivatives, other
 
—

 
62

 
—

 
62

Total other assets
 
90,098

 
162,475

 
—

 
252,573

Total assets
 
$
90,098

 
$
5,934,008

 
$
34,110

 
$
6,058,216

Trading liabilities—fixed income:
 
 
 
 
 
 
 
 
U.S. treasuries
 
$
—

 
$
406,380

 
$
—

 
$
406,380

Other U.S.government agencies
 
—

 
88

 
—

 
88

Government agency issued MBS
 
—

 
33

 
—

 
33

Corporate and other debt
 
—

 
99,080

 
—

 
99,080

Total trading liabilities—fixed income
 
—

 
505,581

 
—

 
505,581

Other liabilities:
 
 
 
 
 
 
 
 
Derivatives, forwards and futures
 
19,807

 
—

 
—

 
19,807

Derivatives, interest rate contracts
 
—

 
24,412

 
—

 
24,412

Derivatives, other
 
—

 
466

 
22,795

 
23,261

Total other liabilities
 
19,807

 
24,878

 
22,795

 
67,480

Total liabilities
 
$
19,807

 
$
530,459

 
$
22,795

 
$
573,061


The following table presents the balance of assets and liabilities measured at fair value on a recurring basis as of December 31, 2018: 
 
 
December 31, 2018
(Dollars in thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
Trading securities—fixed income:
 
 
 
 
 
 
 
 
U.S. treasuries
 
$
—

 
$
169,799

 
$
—

 
$
169,799

Government agency issued MBS
 
—

 
133,373

 
—

 
133,373

Government agency issued CMO
 
—

 
330,456

 
—

 
330,456

Other U.S. government agencies
 
—

 
76,733

 
—

 
76,733

States and municipalities
 
—

 
54,234

 
—

 
54,234

Corporates and other debt
 
—

 
682,068

 
—

 
682,068

Equity, mutual funds, and other
 
—

 
(19
)
 
—

 
(19
)
Total trading securities—fixed income
 
—

 
1,446,644

 
—

 
1,446,644

Trading securities—mortgage banking
 
—

 
—

 
1,524

 
1,524

Loans held-for-sale (elected fair value)
 
—

 
—

 
16,273

 
16,273

Securities available-for-sale:
 
 
 
 
 
 
 
 
U.S. treasuries
 
—

 
98

 
—

 
98

Government agency issued MBS
 
—

 
2,420,106

 
—

 
2,420,106

Government agency issued CMO
 
—

 
1,958,695

 
—

 
1,958,695

Other U.S. government agencies
 
—

 
149,786

 
—

 
149,786

States and municipalities
 
—

 
32,573

 
—

 
32,573

Corporate and other debt
 
—

 
55,310

 
—

 
55,310

Interest-only strips (elected fair value)
 
—

 
—

 
9,902

 
9,902

Total securities available-for-sale
 
—

 
4,616,568

 
9,902

 
4,626,470

Other assets:
 


 


 


 


Deferred compensation mutual funds
 
37,771

 
—

 
—

 
37,771

Equity, mutual funds, and other
 
22,248

 
—

 
—

 
22,248

Derivatives, forwards and futures
 
28,826

 
—

 
—

 
28,826

Derivatives, interest rate contracts
 
—

 
52,214

 
—

 
52,214

Derivatives, other
 
—

 
435

 
—

 
435

Total other assets
 
88,845

 
52,649

 
—

 
141,494

Total assets
 
$
88,845

 
$
6,115,861

 
$
27,699

 
$
6,232,405

Trading liabilities—fixed income:
 
 
 
 
 
 
 
 
U.S. treasuries
 
$
—

 
$
207,739

 
$
—

 
$
207,739

Other U.S. government agencies
 
—

 
98

 
—

 
98

Corporates and other debt
 
—

 
127,543

 
—

 
127,543

Total trading liabilities—fixed income
 
—

 
335,380

 
—

 
335,380

Other liabilities:
 
 
 
 
 
 
 
 
Derivatives, forwards and futures
 
30,236

 
—

 
—

 
30,236

Derivatives, interest rate contracts
 
—

 
71,853

 
—

 
71,853

Derivatives, other
 
—

 
84

 
31,540

 
31,624

Total other liabilities
 
30,236

 
71,937

 
31,540

 
133,713

Total liabilities
 
$
30,236

 
$
407,317

 
$
31,540

 
$
469,093




Summary of Changes in Level 3 Assets Measured At Fair Value
Changes in Recurring Level 3 Fair Value Measurements
The changes in Level 3 assets and liabilities measured at fair value for the years ended December 31, 2019, 2018 and 2017 on a recurring basis are summarized as follows: 
 
 
Year Ended December 31, 2019
 
(Dollars in thousands)
 
Trading
securities
 
Interest-only strips- AFS
 
Loans held-
for-sale
 
Net  derivative
liabilities
 
Balance on January 1, 2019
 
$
1,524

 
$
9,902

 
$
16,273

 
$
(31,540
)
 
Total net gains/(losses) included in:
 
 
 

 
 
 
 
 
Net income
 
(285
)
 
(4,725
)
 
1,828

 
(3,946
)
 
Purchases
 
—

 
86

 
10

 
—


Sales
 
—

 
(47,469
)
 
—

 
—

 
Settlements
 
(298
)
 
—

 
(4,078
)
 
12,691

 
Net transfers into/(out of) Level 3
 
—

 
61,342

(b)
—

(d)
—

 
Balance on December 31, 2019
 
$
941

 
$
19,136

 
$
14,033

 
$
(22,795
)
 
Net unrealized gains/(losses) included in net income
 
$
(66
)
(a)
$
(1,984
)
(c)
$
1,828

(a)
$
(3,946
)
(e) 
 
 
 
Year Ended December 31, 2018
 
(Dollars in thousands)
 
Trading
securities
 
Interest-only strips- AFS
 
Loans held-
for-sale
 
Net  derivative
liabilities
 
Balance on January 1, 2018
 
$
2,151

 
$
1,270

 
$
18,926

 
$
(5,645
)
 
Total net gains/(losses) included in:
 
 
 
 
 
 
 
 
 
Net income
 
173

 
(398
)
 
1,239

 
(4,677
)
 
Purchases
 
—

 
—

 
62

 
(28,100
)
(f) 
Sales
 
—

 
(16,840
)
 
—

 
—

 
Settlements
 
(800
)
 
—

 
(3,598
)
 
6,882

 
Net transfers into/(out of) Level 3
 
—

 
25,870

(b)
(356
)
(d)
—

 
Balance on December 31, 2018
 
$
1,524

 
$
9,902

 
$
16,273

 
$
(31,540
)
 
Net unrealized gains/(losses) included in net income
 
$
6

(a)
$
(1,025
)
(c)
$
1,239

(a)
$
(4,677
)
(e) 

 
 
Year Ended December 31, 2017
 
(Dollars in thousands)
 
Trading
securities
 
Interest-only strips- AFS
 
Loans held-
for-sale
 
Net  derivative
liabilities
 
Balance on January 1, 2017
 
$
2,573

 
$
—

 
$
21,924

 
$
(6,245
)
 
Total net gains/(losses) included in:
 
 
 
 
 
 
 
 
 
Net income
 
448

 
1,021

 
1,547

 
(596
)
 
Purchases
 
—

 
1,413

 
168

 
—

 
Sales
 
(5
)
 
(11,431
)
 
—

 
—

 
Settlements
 
(865
)
 
—

 
(4,346
)
 
1,196

 
Net transfers into/(out of) Level 3
 
—

 
10,267

(b)
(367
)
(d)
—

 
Balance on December 31, 2017
 
$
2,151

 
$
1,270

 
$
18,926

 
$
(5,645
)
 
Net unrealized gains/(losses) included in net income
 
$
303

(a)
$
(171
)
(c)
$
1,547

(a)
$
(596
)
(e)
(a)
Primarily included in mortgage banking income on the Consolidated Statements of Income.
(b)
Transfers into interest-only strips - AFS level 3 measured on a recurring basis reflect movements from loans held-for-sale (Level 2 nonrecurring).
(c)
Primarily included in fixed income on the Consolidated Statements of Income.
(d)
Transfers out of loans held-for-sale level 3 measured on a recurring basis generally reflect movements into OREO (level 3 nonrecurring).
(e)
Included in Other expense.
(f)
Increase related to Visa-related derivatives, see Note 22-Derivatives.

Summary of Changes in Level 3 Net Derivative Asset (Liability) Measured at Fair Value
Changes in Recurring Level 3 Fair Value Measurements
The changes in Level 3 assets and liabilities measured at fair value for the years ended December 31, 2019, 2018 and 2017 on a recurring basis are summarized as follows: 
 
 
Year Ended December 31, 2019
 
(Dollars in thousands)
 
Trading
securities
 
Interest-only strips- AFS
 
Loans held-
for-sale
 
Net  derivative
liabilities
 
Balance on January 1, 2019
 
$
1,524

 
$
9,902

 
$
16,273

 
$
(31,540
)
 
Total net gains/(losses) included in:
 
 
 

 
 
 
 
 
Net income
 
(285
)
 
(4,725
)
 
1,828

 
(3,946
)
 
Purchases
 
—

 
86

 
10

 
—


Sales
 
—

 
(47,469
)
 
—

 
—

 
Settlements
 
(298
)
 
—

 
(4,078
)
 
12,691

 
Net transfers into/(out of) Level 3
 
—

 
61,342

(b)
—

(d)
—

 
Balance on December 31, 2019
 
$
941

 
$
19,136

 
$
14,033

 
$
(22,795
)
 
Net unrealized gains/(losses) included in net income
 
$
(66
)
(a)
$
(1,984
)
(c)
$
1,828

(a)
$
(3,946
)
(e) 
 
 
 
Year Ended December 31, 2018
 
(Dollars in thousands)
 
Trading
securities
 
Interest-only strips- AFS
 
Loans held-
for-sale
 
Net  derivative
liabilities
 
Balance on January 1, 2018
 
$
2,151

 
$
1,270

 
$
18,926

 
$
(5,645
)
 
Total net gains/(losses) included in:
 
 
 
 
 
 
 
 
 
Net income
 
173

 
(398
)
 
1,239

 
(4,677
)
 
Purchases
 
—

 
—

 
62

 
(28,100
)
(f) 
Sales
 
—

 
(16,840
)
 
—

 
—

 
Settlements
 
(800
)
 
—

 
(3,598
)
 
6,882

 
Net transfers into/(out of) Level 3
 
—

 
25,870

(b)
(356
)
(d)
—

 
Balance on December 31, 2018
 
$
1,524

 
$
9,902

 
$
16,273

 
$
(31,540
)
 
Net unrealized gains/(losses) included in net income
 
$
6

(a)
$
(1,025
)
(c)
$
1,239

(a)
$
(4,677
)
(e) 

 
 
Year Ended December 31, 2017
 
(Dollars in thousands)
 
Trading
securities
 
Interest-only strips- AFS
 
Loans held-
for-sale
 
Net  derivative
liabilities
 
Balance on January 1, 2017
 
$
2,573

 
$
—

 
$
21,924

 
$
(6,245
)
 
Total net gains/(losses) included in:
 
 
 
 
 
 
 
 
 
Net income
 
448

 
1,021

 
1,547

 
(596
)
 
Purchases
 
—

 
1,413

 
168

 
—

 
Sales
 
(5
)
 
(11,431
)
 
—

 
—

 
Settlements
 
(865
)
 
—

 
(4,346
)
 
1,196

 
Net transfers into/(out of) Level 3
 
—

 
10,267

(b)
(367
)
(d)
—

 
Balance on December 31, 2017
 
$
2,151

 
$
1,270

 
$
18,926

 
$
(5,645
)
 
Net unrealized gains/(losses) included in net income
 
$
303

(a)
$
(171
)
(c)
$
1,547

(a)
$
(596
)
(e)
(a)
Primarily included in mortgage banking income on the Consolidated Statements of Income.
(b)
Transfers into interest-only strips - AFS level 3 measured on a recurring basis reflect movements from loans held-for-sale (Level 2 nonrecurring).
(c)
Primarily included in fixed income on the Consolidated Statements of Income.
(d)
Transfers out of loans held-for-sale level 3 measured on a recurring basis generally reflect movements into OREO (level 3 nonrecurring).
(e)
Included in Other expense.
(f)
Increase related to Visa-related derivatives, see Note 22-Derivatives.

Nonrecurring Fair Value Measurements For assets measured at fair value on a nonrecurring basis which were still held on the balance sheet at December 31, 2019, 2018 and 2017, respectively, the following tables provide the level of valuation assumptions used to determine each adjustment, the related carrying value, and the fair value adjustments recorded during the respective periods.
 
 
 
Carrying value at December 31, 2019
 
Year Ended December 31, 2019
(Dollars in thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Net gains/(losses)
Loans held-for-sale—SBAs and USDA
 
$
—

 
$
492,595

 
$
929

 
$
493,524

 
 
$
(1,817
)
Loans held-for-sale—first mortgages
 
—

 
—

 
516

 
516

 
 
32

Loans, net of unearned income (a)
 
—

 
—

 
42,208

 
42,208

 
 
(7,341
)
OREO (b)
 
—

 
—

 
15,660

 
15,660

 
 
(927
)
Other assets (c)
 
—

 
—

 
10,608

 
10,608

 
 
(1,809
)
 
 
 
 
 
 
 
 
 
 
 
$
(11,862
)
 
 
 
Carrying value at December 31, 2018
 
Year Ended December 31, 2018
(Dollars in thousands) 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Net gains/(losses)
Loans held-for-sale—other consumer
 
$
—

 
$
18,712

 
$
—

 
$
18,712

 
 
$
(1,809
)
Loans held-for-sale—SBAs and USDA
 
—

 
577,280

 
1,011

 
578,291

 
 
(2,541
)
Loans held-for-sale—first mortgages
 
—

 
—

 
541

 
541

 
 
13

Loans, net of unearned income (a)
 
—

 
—

 
48,259

 
48,259

 
 
(841
)
OREO (b)
 
—

 
—

 
22,387

 
22,387

 
 
(2,599
)
Other assets (c)
 
—

 
—

 
8,845

 
8,845

 
 
(4,712
)
 
 
 
 
 
 
 
 
 
 
 
$
(12,489
)
 
 
 
Carrying value at December 31, 2017
 
Year Ended December 31, 2017
(Dollars in thousands) 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Net gains/(losses)
Loans held-for-sale—SBAs and USDA
 
$
—

 
$
465,504

 
$
1,473

 
$
466,977

 
 
$
(1,629
)
Loans held-for-sale—first mortgages
 
—

 
—

 
618

 
618

 
 
36

Loans, net of unearned income (a)
 
—

 
—

 
26,666

 
26,666

 
 
(1,687
)
OREO (b)
 
—

 
—

 
39,566

 
39,566

 
 
(996
)
Other assets (c)
 
—

 
—

 
26,521

 
26,521

 
 
(3,468
)
 
 
 
 
 
 
 
 
 
 
 
$
(7,744
)

(a)
Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for loan losses.
(b)
Represents the fair value and related losses of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related to government insured mortgages.
(c)
Represents tax credit investments accounted for under the equity method.
Schedule of Unobservable Inputs Utilized In Determining The Fair Value of Level 3 Recurring And Non-Recurring Measurements
The following tables provide information regarding the unobservable inputs utilized in determining the fair value of level 3 recurring and non-recurring measurements as of December 31, 2019 and 2018:  
(Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
Values Utilized
Level 3 Class
 
Fair Value at
December 31, 2019
 
Valuation Techniques
 
Unobservable Input
 
Range
 
Weighted Average (d)
Available-for-sale- securities SBA-interest only strips
 
$
19,136

 
Discounted cash flow
 
Constant prepayment rate
 
12%
 
12%
 
 
 
 
 
 
Bond equivalent yield
 
16% - 17%
 
16%
Loans held-for-sale - residential real estate
 
14,549

 
Discounted cash flow
 
Prepayment speeds - First mortgage
 
3% - 14%
 
4.1%
 
 
 
 
 
 
Prepayment speeds - HELOC
 
0% - 12%
 
7.6%
 
 
 
 
 
 
Foreclosure losses
 
50% - 66%
 
64%
 
 
 
 
 
 
Loss severity trends - First mortgage
 
3% - 24% of UPB
 
14.3%
 
 
 
 
 
 
Loss severity trends - HELOC
 
0% - 72% of UPB
 
50%
Loans held-for-sale- unguaranteed interest in SBA loans
 
929

 
Discounted cash flow
 
Constant prepayment rate
 
8% - 12%
 
10%
 
 
 
 
 
 
Bond equivalent yield
 
9%
 
9%
Derivative liabilities, other
 
22,795

 
Discounted cash flow
 
Visa covered litigation resolution amount
 
$5.4 billion - $6.0 billion
 
$5.8 billion
 
 
 
 
 
 
Probability of resolution scenarios
 
10% - 50%
 
16%
 
 
 
 
 
 
Time until resolution
 
15 - 39 months
 
29 months
Loans, net of unearned
income (a)
 
42,208

 
Appraisals from comparable properties
 
Marketability adjustments for specific properties
 
0% - 10% of appraisal
 
NM
 
 
 
 
Other collateral valuations
 
Borrowing base certificates adjustment
 
20% - 50% of gross value
 
NM
 
 
 
 
 
 
Financial Statements/Auction values adjustment
 
0% - 25% of reported value
 
NM
OREO (b)
 
15,660

 
Appraisals from comparable properties
 
Adjustment for value changes since appraisal
 
0% - 10% of appraisal
 
NM
Other assets (c)
 
10,608

 
Discounted cash flow
 
Adjustments to current sales yields for specific properties
 
0% - 15% adjustment to yield
 
NM
 
 
 
 
Appraisals from comparable properties
 
Marketability adjustments for specific properties
 
0% - 25% of appraisal
 
NM
NM - Not meaningful.
(a)
Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for loan losses.
(b)
Represents the fair value of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related to government insured mortgages.
(c)
Represents tax credit investments accounted for under the equity method.
(d)
Weighted averages are determined by the relative fair value of the instruments or the relative contribution to an instrument's fair value

(Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Values Utilized
Level 3 Class
 
Fair Value at
December 31, 2018
 
Valuation Techniques
 
Unobservable Input
 
Range
 
Weighted Average (d)
Available-for-sale- securities SBA-interest only strips
 
$
9,902

 
Discounted cash flow
 
Constant prepayment rate
 
11% - 12%
 
11%
 
 
 
 
 
 
Bond equivalent yield
 
14% - 15%
 
14%
Loans held-for-sale - residential real estate
 
16,815

 
Discounted cash flow
 
Prepayment speeds - First mortgage
 
2% - 10%
 
3%
 
 
 
 
 
 
Prepayment speeds - HELOC
 
5% - 12%
 
7.5%
 
 
 
 
 
 
Foreclosure losses
 
50% - 66%
 
63%

 

 

 
Loss severity trends - First mortgage
 
2% - 25% of UPB
 
17%
 
 
 
 
 
 
Loss severity trends - HELOC
 
50% - 100% of UPB
 
50%
Loans held-for-sale- unguaranteed interest in SBA loans
 
1,011

 
Discounted cash flow
 
Constant prepayment rate
 
8% - 12%
 
10%

 


 

 
Bond equivalent yield
 
9%
 
9%
Derivative liabilities, other
 
31,540

 
Discounted cash flow
 
Visa covered litigation resolution amount
 
$5.0 billion - $5.8 billion
 
$5.6 billion
 
 
 
 
 
 
Probability of resolution scenarios
 
10% - 25%
 
23%
 
 
 
 
 
 
Time until resolution
 
18 - 48 months
 
36 months
Loans, net of unearned
income (a)
 
48,259

 
Appraisals from comparable properties
 
Marketability adjustments for specific properties
 
0% - 10% of appraisal
 
NM
 
 
 
 
Other collateral valuations
 
Borrowing base certificates adjustment
 
20% - 50% of gross value
 
NM
 
 
 
 
 
 
Financial Statements/Auction values adjustment
 
0% - 25% of reported value
 
NM
OREO (b)
 
22,387

 
Appraisals from comparable properties
 
Adjustment for value changes since appraisal
 
0% - 10% of appraisal
 
NM
Other assets (c)
 
8,845

 
Discounted cash flow
 
Adjustments to current sales yields for specific properties
 
0% - 15% adjustment to yield
 
NM
 
 
 
 
Appraisals from comparable properties
 
Marketability adjustments for specific properties
 
0% - 25% of appraisal
 
NM
 
NM - Not meaningful.
(a)
Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for loan losses.
(b)
Represents the fair value of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related to government insured mortgages.
(c)
Represents tax credit investments accounted for under the equity method.
(d)
Weighted averages are determined by the relative fair value of the instruments or the relative contribution to an instrument's fair value
Summary of Differences Between The Fair Value Carrying Amount of Mortgages Held-For-Sale and Aggregate Unpaid Principal Amount
The following tables reflect the differences between the fair value carrying amount of residential real estate loans held-for-sale measured at fair value in accordance with management’s election and the aggregate unpaid principal amount FHN is contractually entitled to receive at maturity.
 
 
December 31, 2019
(Dollars in thousands)
 
Fair value
carrying
amount
 
Aggregate
unpaid
principal
 
Fair value carrying amount
less aggregate unpaid
principal
Residential real estate loans held-for-sale reported at fair value:
 
 
 
 
 
 
Total loans
 
$
14,033

 
$
19,278

 
$
(5,245
)
Nonaccrual loans
 
3,532

 
6,646

 
(3,114
)
Loans 90 days or more past due and still accruing
 
163

 
268

 
(105
)
 
 
 
 
 
 
 
 
 
December 31, 2018
(Dollars in thousands)
 
Fair value
carrying
amount
 
Aggregate
unpaid
principal
 
Fair value carrying amount
less aggregate unpaid
principal
Residential real estate loans held-for-sale reported at fair value:
 
 
 
 
 
 
Total loans
 
$
16,273

 
$
23,567

 
$
(7,294
)
Nonaccrual loans
 
4,536

 
8,128

 
(3,592
)
Loans 90 days or more past due and still accruing
 
171

 
281

 
(110
)

Changes In Fair Value of Assets and Liabilities Which Fair Value Option Included In Current Period Earnings
Assets and liabilities accounted for under the fair value election are initially measured at fair value with subsequent changes in fair value recognized in earnings. Such changes in the fair value of assets and liabilities for which FHN elected the fair value option are included in current period earnings with classification in the income statement line item reflected in the following table: 
 
Year Ended December 31
(Dollars in thousands)
2019
 
2018
 
2017
Changes in fair value included in net income:
 
 
 
 
 
Mortgage banking noninterest income
 
 
 
 
 
Loans held-for-sale
$
1,828

 
$
1,239

 
$
1,547


Summary Of Book Value And Estimated Fair Value Of Financial Instruments
The following tables summarize the book value and estimated fair value of financial instruments recorded in the Consolidated Statements of Condition as of December 31, 2019 and December 31, 2018:
 
 
December 31, 2019
 
 
Book
Value
 
Fair Value
(Dollars in thousands) 
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
Loans, net of unearned income and allowance for loan losses
 
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
 
Commercial, financial and industrial
 
$
19,928,605

 
$
—

 
$
—

 
$
20,096,397

 
$
20,096,397

Commercial real estate
 
4,300,905

 
—

 
—

 
4,300,489

 
4,300,489

Consumer:
 
 
 
 
 
 
 
 
 
 
Consumer real estate
 
5,987,125

 
—

 
—

 
6,153,016

 
6,153,016

Permanent mortgage
 
161,571

 
—

 
—

 
181,171

 
181,171

Credit card & other
 
482,598

 
—

 
—

 
487,079

 
487,079

Total loans, net of unearned income and allowance for loan losses
 
30,860,804

 
—

 
—

 
31,218,152

 
31,218,152

Short-term financial assets:
 
 
 
 
 
 
 
 
 
 
Interest-bearing cash
 
482,405

 
482,405

 
—

 
—

 
482,405

Federal funds sold
 
46,536

 
—

 
46,536

 
—

 
46,536

Securities purchased under agreements to resell
 
586,629

 
—

 
586,629

 
—

 
586,629

Total short-term financial assets
 
1,115,570

 
482,405

 
633,165

 
—

 
1,115,570

Trading securities (a)
 
1,346,207

 
—

 
1,345,266

 
941

 
1,346,207

Loans held-for-sale
 
 
 
 
 
 
 
 
 
 
Mortgage loans (elected fair value) (a)
 
14,033

 
—

 
—

 
14,033

 
14,033

USDA & SBA loans- LOCOM
 
493,525

 
—

 
495,323

 
947

 
496,270

Other consumer loans- LOCOM
 
5,197

 
—

 
5,197

 
—

 
5,197

Mortgage loans- LOCOM
 
81,035

 
—

 
—

 
81,035

 
81,035

Total loans held-for-sale
 
593,790

 
—

 
500,520

 
96,015

 
596,535

Securities available-for-sale (a)
 
4,445,403

 
—

 
4,426,267

 
19,136

 
4,445,403

Securities held-to-maturity
 
10,000

 
—

 
—

 
10,001

 
10,001

Derivative assets (a)
 
183,115

 
20,640

 
162,475

 
—

 
183,115

Other assets:
 
 
 
 
 
 
 
 
 
 
Tax credit investments
 
247,075

 
—

 
—

 
244,755

 
244,755

Deferred compensation mutual funds
 
46,815

 
46,815

 
—

 
—

 
46,815

Equity, mutual funds, and other (b)
 
229,352

 
22,643

 
—

 
206,709

 
229,352

Total other assets
 
523,242

 
69,458

 
—

 
451,464

 
520,922

Total assets
 
$
39,078,131

 
$
572,503

 
$
7,067,693

 
$
31,795,709

 
$
39,435,905

Liabilities:
 
 
 
 
 
 
 
 
 
 
Defined maturity deposits
 
$
3,618,337

 
$
—

 
$
3,631,090

 
$
—

 
$
3,631,090

Trading liabilities (a)
 
505,581

 
—

 
505,581

 
—

 
505,581

Short-term financial liabilities:
 
 
 
 
 
 
 
 
 
 
Federal funds purchased
 
548,344

 
—

 
548,344

 
—

 
548,344

Securities sold under agreements to repurchase
 
716,925

 
—

 
716,925

 
—

 
716,925

Other short-term borrowings
 
2,253,045

 
—

 
2,253,045

 
—

 
2,253,045

Total short-term financial liabilities
 
3,518,314

 
—

 
3,518,314

 
—

 
3,518,314

Term borrowings:
 
 
 
 
 
 
 
 
 
 
Real estate investment trust-preferred
 
46,236

 
—

 
—

 
47,000

 
47,000

Secured borrowings
 
21,975

 
—

 
—

 
21,975

 
21,975

Junior subordinated debentures
 
144,593

 
—

 
—

 
142,375

 
142,375

Other long term borrowings
 
578,564

 
—

 
574,287

 
—

 
574,287

Total term borrowings
 
791,368

 
—

 
574,287

 
211,350

 
785,637

Derivative liabilities (a)
 
67,480

 
19,807

 
24,878

 
22,795

 
67,480

Total liabilities
 
$
8,501,080

 
$
19,807

 
$
8,254,150

 
$
234,145

 
$
8,508,102

 
(a)
Classes are detailed in the recurring and nonrecurring measurement tables.
(b)
Level 1 primarily consists of mutual funds with readily determinable fair value. Level 3 includes restricted investments in FHLB-Cincinnati stock of $76.0 million and FRB stock of $130.7 million.











 
 
December 31, 2018
 
 
Book
Value
 
Fair Value
(Dollars in thousands)
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
Loans, net of unearned income and allowance for loan losses
 
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
 
Commercial, financial and industrial
 
$
16,415,381

 
$
—

 
$
—

 
$
16,438,272

 
$
16,438,272

Commercial real estate
 
3,999,559

 
—

 
—

 
3,997,736

 
3,997,736

Consumer:
 
 
 
 
 
 
 
 
 
 
Consumer real estate
 
6,223,077

 
—

 
—

 
6,194,066

 
6,194,066

Permanent mortgage
 
211,448

 
—

 
—

 
227,254

 
227,254

Credit card & other
 
505,643

 
—

 
—

 
507,001

 
507,001

Total loans, net of unearned income and allowance for loan losses
 
27,355,108

 
—

 
—

 
27,364,329

 
27,364,329

Short-term financial assets:
 
 
 
 
 
 
 
 
 
 
Interest-bearing cash
 
1,277,611

 
1,277,611

 
—

 
—

 
1,277,611

Federal funds sold
 
237,591

 
—

 
237,591

 
—

 
237,591

Securities purchased under agreements to resell
 
386,443

 
—

 
386,443

 
—

 
386,443

Total short-term financial assets
 
1,901,645

 
1,277,611

 
624,034

 
—

 
1,901,645

Trading securities (a)
 
1,448,168

 
—

 
1,446,644

 
1,524

 
1,448,168

Loans held-for-sale:
 
 
 
 
 
 
 
 
 
 
Mortgage loans (elected fair value) (a)
 
16,273

 
—

 
—

 
16,273

 
16,273

USDA & SBA loans- LOCOM
 
578,291

 
—

 
582,476

 
1,015

 
583,491

Other consumer loans- LOCOM
 
25,134

 
—

 
6,422

 
18,712

 
25,134

Mortgage loans- LOCOM
 
59,451

 
—

 
—

 
59,451

 
59,451

Total loans held-for-sale
 
679,149

 
—

 
588,898

 
95,451

 
684,349

Securities available-for-sale (a)
 
4,626,470

 
—

 
4,616,568

 
9,902

 
4,626,470

Securities held-to-maturity
 
10,000

 
—

 
—

 
9,843

 
9,843

Derivative assets (a)
 
81,475

 
28,826

 
52,649

 
—

 
81,475

Other assets:
 
 
 
 
 
 
 
 
 
 
Tax credit investments
 
163,300

 
—

 
—

 
159,452

 
159,452

Deferred compensation mutual funds
 
37,771

 
37,771

 
—

 
—

 
37,771

Equity, mutual funds, and other (b)
 
240,780

 
22,248

 
—

 
218,532

 
240,780

Total other assets
 
441,851

 
60,019

 
—

 
377,984

 
438,003

Total assets
 
36,543,866

 
1,366,456

 
7,328,793

 
27,859,033

 
36,554,282

Liabilities:
 
 
 
 
 
 
 
 
 
 
Defined maturity deposits
 
$
4,105,777

 
$
—

 
$
4,082,822

 
$
—

 
$
4,082,822

Trading liabilities (a)
 
335,380

 
—

 
335,380

 
—

 
335,380

Short-term financial liabilities:
 
 
 
 
 
 
 
 
 
 
Federal funds purchased
 
$
256,567

 
$
—

 
$
256,567

 
$
—

 
$
256,567

Securities sold under agreements to repurchase
 
762,592

 
—

 
762,592

 
—

 
762,592

Other short-term borrowings
 
114,764

 
—

 
114,764

 
—

 
114,764

Total short-term financial liabilities
 
1,133,923

 
—

 
1,133,923

 
—

 
1,133,923

Term borrowings:
 
 
 
 
 
 
 
 
 
 
Real estate investment trust-preferred
 
46,168

 
—

 
—

 
47,000

 
47,000

Term borrowings—new market tax credit investment
 
2,699

 
—

 
—

 
2,664

 
2,664

Secured borrowings
 
19,588

 
—

 
—

 
19,588

 
19,588

Junior subordinated debentures
 
143,255

 
—

 
—

 
134,266

 
134,266

Other long term borrowings
 
959,253

 
—

 
960,483

 
—

 
960,483

Total term borrowings
 
1,170,963

 
—

 
960,483

 
203,518

 
1,164,001

Derivative liabilities (a)
 
133,713

 
30,236

 
71,937

 
31,540

 
133,713

Total liabilities
 
6,879,756

 
30,236

 
6,584,545

 
235,058

 
6,849,839

(a)
Classes are detailed in the recurring and nonrecurring measurement tables.
(b)
Level 1 primarity consists of mutual funds with readily determinable fair value. Level 3 includes restricted investments in FHLB-Cincinnati stock of $87.9 million and FRB stock of $130.7 million.
 
 
Contractual Amount
 
Fair Value
(Dollars in thousands)
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
Unfunded Commitments:
 
 
 
 
 
 
 
 
Loan commitments
 
$
12,355,220

 
$
10,884,975

 
$
3,656

 
$
2,551

Standby and other commitments
 
459,268

 
446,958

 
5,513

 
5,043