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Derivatives (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives Associated With Fixed Income Trading Activities

The following table summarizes derivatives associated with FHNF's trading activities as of March 31, 2023 and December 31, 2022:


DERIVATIVES ASSOCIATED WITH TRADING
	March 31, 2023
(Dollars in millions)	Notional		Assets		Liabilities
Customer interest rate contracts	$	3,312	$	11	$	207
Offsetting upstream interest rate contracts	3,312		94		15
Option contracts written	110		—		1
Forwards and futures purchased	1,607		9		1
Forwards and futures sold	1,757		1		10


	December 31, 2022
(Dollars in millions)	Notional		Assets		Liabilities
Customer interest rate contracts	$	3,076	$	3	$	270
Offsetting upstream interest rate contracts	3,076		91		6
Option contracts purchased	40		—		—
Forwards and futures purchased	1,127		5		2
Forwards and futures sold	1,256		4		5

Derivatives Associated With Interest Rate Risk Management Activities

The following tables summarize FHN’s derivatives associated with interest rate risk management activities as of March 31, 2023 and December 31, 2022:


DERIVATIVES ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT
	March 31, 2023
(Dollars in millions)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	8,424	$	16	$	423
Offsetting upstream interest rate contracts	8,424		413		21


	December 31, 2022
(Dollars in millions)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	8,377	$	3	$	570
Offsetting upstream interest rate contracts	8,377		351		5

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 months ended March 31, 2023 and 2022:


DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT
	Three Months Ended March 31,
	2023		2022
(Dollars in millions)	Gains (Losses)		Gains (Losses)
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts (a)	$	160	$	353
Offsetting upstream interest rate contracts (a)	(160)		(353)

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

Derivative Associated With Cash Flow Hedges

The following tables summarize FHN’s derivative activities associated with cash flow hedges as of March 31, 2023 and December 31, 2022:

DERIVATIVES ASSOCIATED WITH CASH FLOW HEDGES

March 31, 2023

(Dollars in millions)

Notional

Assets

Liabilities

Cash Flow Hedges

Hedging Instruments:

Interest rate contracts

5,350

—

Hedged Items:

Variability in cash flows related to debt instruments (primarily loans)

N/A

5,350

N/A



	December 31, 2022
(Dollars in millions)	Notional		Assets		Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts	$	5,350	$	—	$	71
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)	N/A		$	5,350	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 months ended March 31, 2023 and 2022:


DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH CASH FLOW HEDGES
	Three Months Ended March 31,
	2023		2022
(Dollars in millions)	Gains (Losses)		Gains (Losses)
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts (a)	$	53	$	(32)
Gain (loss) recognized in other comprehensive income (loss)	33		(20)
Gain (loss) reclassified from AOCI into interest income	11		(1)

(a)Approximately $10 million of pre-tax losses are expected to be reclassified into earnings in the next twelve months.

Derivatives Gains/Losses Associated With Mortgage Banking Hedges

The notional and fair values of these contracts are presented in the table below.


DERIVATIVES ASSOCIATED WITH MORTGAGE BANKING HEDGES
	March 31, 2023
(Dollars in millions)	Notional		Assets		Liabilities
Mortgage Banking Hedges

Option contracts written	$	60	$	1	$	—
Forward contracts written	144		—		1


	December 31, 2022
(Dollars in millions)	Notional		Assets		Liabilities
Mortgage Banking Hedges

Option contracts written	$	35	$	—	$	—

Forward contracts written	61		—		—

The following table summarizes gains (losses) on FHN's derivatives associated with mortgage banking activities for the three months ended March 31, 2023 and 2022:


DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH MORTGAGE BANKING HEDGES
	Three Months Ended March 31,
	2023		2022
(Dollars in millions)	Gains (Losses)		Gains (Losses)
Mortgage Banking Hedges

Option contracts written	$	(1)	$	(4)
Forward contracts written	(1)		18

Derivative Assets And Collateral Received

The following table provides details of derivative assets and collateral received as presented on the Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022:


DERIVATIVE ASSETS & COLLATERAL RECEIVED
							Gross amounts not offset in the Balance Sheets
(Dollars in millions)	Gross amounts of recognized assets		Gross amounts offset in the Balance Sheets		Net amounts of assets presented in the Balance Sheets (a)		Derivative liabilities available for offset		Collateral received		Net amount
Derivative assets:
March 31, 2023
Interest rate derivative contracts	$	535	$	—	$	535	$	(45)	$	(481)	$	9
Forward contracts	11		—		11		(7)		(2)		2
	$	546	$	—	$	546	$	(52)	$	(483)	$	11

December 31, 2022
Interest rate derivative contracts	$	449	$	—	$	449	$	(58)	$	(378)	$	13
Forward contracts	9		—		9		(6)		(2)		1
	$	458	$	—	$	458	$	(64)	$	(380)	$	14

(a)Included in other assets on the Consolidated Balance Sheets. As of March 31, 2023 and December 31, 2022, $2 million and $2 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 Balance Sheets as of March 31, 2023 and December 31, 2022:


DERIVATIVE LIABILITIES & COLLATERAL PLEDGED
							Gross amounts not offset in the Balance Sheets
(Dollars in millions)	Gross amounts of recognized liabilities		Gross amounts offset in the Balance Sheets		Net amounts of liabilities presented in the Balance Sheets (a)		Derivative assets available for offset		Collateral pledged		Net amount
Derivative liabilities:
March 31, 2023
Interest rate derivative contracts	$	687	$	—	$	687	$	(45)	$	(194)	$	448
Forward contracts	11		—		11		(7)		(3)		1
	$	698	$	—	$	698	$	(52)	$	(197)	$	449

December 31, 2022
Interest rate derivative contracts	$	921	$	—	$	921	$	(58)	$	(175)	$	688
Forward contracts	8		—		8		(6)		(1)		1
	$	929	$	—	$	929	$	(64)	$	(176)	$	689

(a)Included in other liabilities on the Consolidated Balance Sheets. As of March 31, 2023 and December 31, 2022, $24 million and $29 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.