Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2023

Variable Interest Entities [Abstract]

Summary Of VIEs Consolidated By FHN

The following table summarizes the carrying value of assets and liabilities associated with rabbi trusts used for deferred compensation plans which are consolidated by FHN as of September 30, 2023 and December 31, 2022:

CONSOLIDATED VIEs
(Dollars in millions)	September 30, 2023		December 31, 2022
Assets:
Other assets	$	172	$	181
Liabilities:
Other liabilities	$	144	$	150

Summary of the Impact of Qualifying LIHTC Investments

The following table summarizes the impact to income tax expense on the Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022 for LIHTC investments accounted for under the proportional amortization method.

LIHTC IMPACTS ON TAX EXPENSE
	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2023		2022		2023		2022
Income tax expense (benefit):
Amortization of qualifying LIHTC investments	$	13	$	11	$	39	$	33
Low income housing tax credits	(14)		(11)		(41)		(35)
Other tax benefits related to qualifying LIHTC investments	(3)		(3)		(8)		(9)

Summary Of VIEs Not Consolidated By FHN

The following tables summarize FHN’s nonconsolidated VIEs as of September 30, 2023 and December 31, 2022:

NONCONSOLIDATED VIEs AT SEPTEMBER 30, 2023
(Dollars in millions)	Maximum Loss Exposure		Liability Recognized		Classification
Type
Low income housing partnerships	$	498	$	155	(a)
Other tax credit investments (b)	81		65		Other assets
Small issuer trust preferred holdings (c)	173		—		Loans and leases
On-balance sheet trust preferred securitization	27		87		(d)
Holdings of agency mortgage-backed securities (c)	7,907		—		(e)
Commercial loan modifications to borrowers experiencing financial difficulty (f)	39		—		Loans and leases
Proprietary trust preferred issuances (g)	—		167		Term borrowings

(a)Maximum loss exposure represents $343 million of current investments and $155 million of accrued contractual funding commitments. Accrued funding commitments represent unconditional contractual obligations for future funding events and are also recognized in other liabilities. FHN currently expects to be required to fund these accrued commitments by the end of 2024.

(b)Maximum loss exposure represents the value of current investments.

(c)Maximum loss exposure represents the value of current investments. A liability is not recognized as FHN is solely a holder of the trusts’ securities.

(d)Includes $112 million classified as loans and leases and $2 million classified as trading securities, which are offset by $87 million classified as term borrowings.

(e)Includes $147 million classified as trading securities, $1.3 billion classified as held to maturity and $6.4 billion classified as securities available for sale.

(f)Maximum loss exposure represents $39 million of current receivables with no additional contractual funding commitments on loans related to commercial loan modifications to borrowers experiencing financial difficulty.

(g)No exposure to loss due to nature of FHN's involvement.

NONCONSOLIDATED VIEs AT DECEMBER 31, 2022
(Dollars in millions)	Maximum Loss Exposure		Liability Recognized		Classification
Type
Low income housing partnerships	$	463	$	154	(a)
Other tax credit investments (b)	85		67		Other assets
Small issuer trust preferred holdings (c)	171		—		Loans and leases
On-balance sheet trust preferred securitization	27		87		(d)
Holdings of agency mortgage-backed securities (c)	8,652		—		(e)
Commercial loan troubled debt restructurings (f)	53		—		Loans and leases
Proprietary trust preferred issuances (g)	—		167		Term borrowings

(a)Maximum loss exposure represents $309 million of current investments and $154 million of accrued contractual funding commitments. Accrued funding commitments represent unconditional contractual obligations for future funding events and are also recognized in other liabilities. FHN currently expects to be required to fund these accrued commitments by the end of 2024.

(b)Maximum loss exposure represents current investments.

(c)Maximum loss exposure represents the value of current investments. A liability is not recognized as FHN is solely a holder of the trusts’ securities.

(d)Includes $112 million classified as loans and leases and $2 million classified as trading securities, which are offset by $87 million classified as term borrowings.

(e)Includes $205 million classified as trading securities, $1.4 billion classified as held to maturity and $7.1 billion classified as securities available for sale.

(f)Maximum loss exposure represents $53 million of current receivables with no additional contractual funding commitments on loans related to commercial borrowers involved in a troubled debt restructuring.

(g)No exposure to loss due to nature of FHN's involvement.