Derivatives (Tables)

9 Months Ended

Sep. 30, 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 September 30, 2023 and December 31, 2022:

DERIVATIVES ASSOCIATED WITH TRADING
	September 30, 2023
(Dollars in millions)	Notional		Assets		Liabilities
Customer interest rate contracts	$	3,724	$	4	$	311
Offsetting upstream interest rate contracts	3,958		222		6
Forwards and futures purchased	1,202		1		7
Forwards and futures sold	1,275		8		1

 

	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 September 30, 2023 and December 31, 2022:

DERIVATIVES ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT
	September 30, 2023
(Dollars in millions)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	8,563	$	1	$	631
Offsetting upstream interest rate contracts	8,563		626		2

	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 and nine months ended September 30, 2023 and 2022:

DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
(Dollars in millions)	Gains (Losses)		Gains (Losses)		Gains (Losses)		Gains (Losses)
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts (a)	$	(95)	$	271	$	(63)	$	788
Offsetting upstream interest rate contracts (a)	95		(271)		63		(788)

(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 September 30, 2023 and December 31, 2022:

DERIVATIVES ASSOCIATED WITH CASH FLOW HEDGES
	September 30, 2023
(Dollars in millions)	Notional		Assets		Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts	$	5,200	$	—	$	118
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)	N/A		$	5,200	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 and nine months ended September 30, 2023 and 2022:

DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH CASH FLOW HEDGES
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
(Dollars in millions)	Gains (Losses)		Gains (Losses)		Gains (Losses)		Gains (Losses)
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts (a)	$	(30)	$	(138)	$	(44)	$	(105)
Gain (loss) recognized in other comprehensive income (loss)	(34)		(103)		(60)		(149)
Gain (loss) reclassified from AOCI into interest income	14		4		38		7

(a)Approximately $29 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
	September 30, 2023
(Dollars in millions)	Notional		Assets		Liabilities
Mortgage Banking Hedges
Option contracts written	$	84	$	1	$	—
Forward contracts written	129		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 and nine months ended September 30, 2023 and 2022:

DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH MORTGAGE BANKING HEDGES
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
(Dollars in millions)	Gains (Losses)		Gains (Losses)		Gains (Losses)		Gains (Losses)
Mortgage Banking Hedges
Option contracts written	$	—	$	4	$	(2)	$	5
Forward contracts written	(2)		6		2		33

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 September 30, 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:
September 30, 2023
Interest rate derivative contracts	$	853	$	—	$	853	$	(96)	$	(662)	$	95
Forward contracts	8		—		8		(4)		—		4
	$	861	$	—	$	861	$	(100)	$	(662)	$	99
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 September 30, 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 September 30, 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:
September 30, 2023
Interest rate derivative contracts	$	1,068	$	—	$	1,068	$	(96)	$	(238)	$	734
Forward contracts	8		—		8		(4)		(1)		3
	$	1,076	$	—	$	1,076	$	(100)	$	(239)	$	737
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 September 30, 2023 and December 31, 2022, $27 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.