Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022:

BALANCES OF ASSETS & LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
	September 30, 2023
(Dollars in millions)	Level 1		Level 2		Level 3		Total
Trading securities:
U.S. treasuries	$	—	$	24	$	—	$	24
Government agency issued MBS	—		53		—		53
Government agency issued CMO	—		94		—		94
Other U.S. government agencies	—		252		—		252
States and municipalities	—		26		—		26
Corporate and other debt	—		759		—		759
Interest-only strips (elected fair value)	—		—		23		23
Total trading securities	—		1,208		23		1,231
Loans held for sale (elected fair value)	—		67		21		88
Securities available for sale:
Government agency issued MBS	—		4,325		—		4,325
Government agency issued CMO	—		2,100		—		2,100
Other U.S. government agencies	—		1,128		—		1,128
States and municipalities	—		547		—		547
Total securities available for sale	—		8,100		—		8,100
Other assets:
Deferred compensation mutual funds	99		—		—		99
Equity, mutual funds, and other	23		—		—		23
Derivatives, forwards and futures	10		—		—		10
Derivatives, interest rate contracts	—		853		—		853
Total other assets	132		853		—		985
Total assets	$	132	$	10,228	$	44	$	10,404
Trading liabilities:
U.S. treasuries	$	—	$	301	$	—	$	301
Other U.S. government agencies	—		9		—		9
Government agency issued MBS	—		1		—		1
Corporate and other debt	—		55		—		55
Total trading liabilities	—		366		—		366
Other liabilities:
Derivatives, forwards and futures	8		—		—		8
Derivatives, interest rate contracts	—		1,068		—		1,068
Derivatives, other	—		—		26		26
Total other liabilities	8		1,068		26		1,102
Total liabilities	$	8	$	1,434	$	26	$	1,468

	December 31, 2022
(Dollars in millions)	Level 1		Level 2		Level 3		Total
Trading securities:
U.S. treasuries	$	—	$	101	$	—	$	101
Government agency issued MBS	—		144		—		144
Government agency issued CMO	—		61		—		61
Other U.S. government agencies	—		115		—		115
States and municipalities	—		54		—		54
Corporate and other debt	—		875		—		875
Interest-only strips (elected fair value)	—		—		25		25
Total trading securities	—		1,350		25		1,375
Loans held for sale (elected fair value)	—		29		22		51
Securities available for sale:
Government agency issued MBS	—		4,763		—		4,763
Government agency issued CMO	—		2,313		—		2,313
Other U.S. government agencies	—		1,163		—		1,163
States and municipalities	—		597		—		597
Total securities available for sale	—		8,836		—		8,836
Other assets:
Deferred compensation mutual funds	112		—		—		112
Equity, mutual funds, and other	22		—		—		22
Derivatives, forwards and futures	9		—		—		9
Derivatives, interest rate contracts	—		449		—		449
Derivatives, other	—		2		—		2
Total other assets	143		451		—		594
Total assets	$	143	$	10,666	$	47	$	10,856
Trading liabilities:
U.S. treasuries	$	—	$	275	$	—	$	275
Government agency issued MBS	—		2		—		2
Corporate and other debt	—		58		—		58
Total trading liabilities	—		335		—		335
Other liabilities:
Derivatives, forwards and futures	8		—		—		8
Derivatives, interest rate contracts	—		922		—		922
Derivatives, other	—		1		27		28
Total other liabilities	8		923		27		958
Total liabilities	$	8	$	1,258	$	27	$	1,293

Summary Of Changes In Level 3 Assets And Liabilities Measured At Fair Value

The changes in Level 3 assets and liabilities measured at fair value for the three months ended September 30, 2023 and 2022 on a recurring basis are summarized as follows:

CHANGES IN LEVEL 3 ASSETS & LIABILITIES MEASURED AT FAIR VALUE
	Three Months Ended September 30, 2023
(Dollars in millions)	Interest-only strips			Loans held for sale			Net  derivative liabilities
Balance on July 1, 2023	$	36		$	22		$	(34)
Total net gains (losses) included in net income	(4)			—			—
Sales	(30)			—			—
Settlements	—			(1)			8
Net transfers into (out of) Level 3	21		(b)	—			—
Balance on September 30, 2023	$	23		$	21		$	(26)
Net unrealized gains (losses) included in net income	$	(2)	(c)	$	—	(a)	$	—	(d)

	Three Months Ended September 30, 2022
(Dollars in millions)	Interest-only strips			Loans held for sale			Net  derivative liabilities
Balance on July 1, 2022	$	26		$	34		$	(28)
Total net gains (losses) included in net income	(2)			—			(1)
Sales	(23)			(14)			—
Settlements	—			—			9
Repayments	—			(1)			—
Net transfers into (out of) Level 3	22		(b)	1			—
Balance on September 30, 2022	$	23		$	20		$	(20)
Net unrealized gains (losses) included in net income	$	(1)	(c)	$	—	(a)	$	(1)	(d)

(a)Primarily included in mortgage banking and title income on the Consolidated Statements of Income.

(b)Transfers into interest-only strips 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)Included in other expense.

The changes in Level 3 assets and liabilities measured at fair value for the nine months ended September 30, 2023 and 2022 on a recurring basis are summarized as follows:

CHANGES IN LEVEL 3 ASSETS & LIABILITIES MEASURED AT FAIR VALUE
	Nine Months Ended September 30, 2023
(Dollars in millions)	Interest-only strips			Loans held for sale			Net  derivative liabilities
Balance on January 1, 2023	$	25		$	22		$	(27)
Total net gains (losses) included in net income	(10)			—			(15)
Purchases	—			2			—
Sales	(38)			(2)			—
Settlements	—			(1)			16
Net transfers into (out of) Level 3	46		(b)	—			—
Balance on September 30, 2023	$	23		$	21		$	(26)
Net unrealized gains (losses) included in net income	$	(4)	(c)	$	—	(a)	$	(15)	(d)

	Nine Months Ended September 30, 2022
(Dollars in millions)	Interest-only strips			Loans held for sale			Net  derivative liabilities
Balance on January 1, 2022	$	38		$	28		$	(23)
Total net gains (losses) included in net income	(5)			—			(13)
Purchases	—			1			—
Sales	(61)			(14)			—
Settlements	—			(1)			16
Repayments	—			(1)			—
Net transfers into (out of) Level 3	51		(b)	7			—
Balance on September 30, 2022	$	23		$	20		$	(20)
Net unrealized gains (losses) included in net income	$	(2)	(c)	$	—	(a)	$	(13)	(d)

(a)Primarily included in mortgage banking and title income on the Consolidated Statements of Income.

(b)Transfers into interest-only strips 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)Included in other expense.

Nonrecurring Fair Value Measurements

For assets measured at fair value on a nonrecurring basis which were still held on the Consolidated Balance Sheets at September 30, 2023, and December 31, 2022, respectively, the following tables provide the level of valuation assumptions used to determine each adjustment and the related carrying value.

LEVEL OF VALUATION ASSUMPTIONS FOR ASSETS MEASURED AT FAIR VALUE ON A NON-RECURRING BASIS
	Carrying value at September 30, 2023
(Dollars in millions)	Level 1		Level 2		Level 3		Total
Loans held for sale—SBAs and USDA	$	—	$	496	$	—	$	496
Loans and leases (a)	—		—		223		223
OREO (b)	—		—		4		4
Other assets (c)	—		—		92		92

	Carrying value at December 31, 2022
(Dollars in millions)	Level 1		Level 2		Level 3		Total
Loans held for sale—SBAs and USDA	$	—	$	506	$	—	$	506
Loans and leases (a)	—		—		135		135
OREO (b)	—		—		3		3
Other assets (c)	—		—		91		91

(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 credit 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.

Gains/(losses) on Nonrecurring Fair Value Measurements

For assets measured on a nonrecurring basis which were still held on the Consolidated Balance Sheets at period end, the following table provides information about the fair value adjustments recorded during the three and nine months ended September 30, 2023 and 2022:

FAIR VALUE ADJUSTMENTS ON ASSETS MEASURED ON A NONRECURRING BASIS
	Net gains (losses) Three Months Ended September 30,				Net gains (losses) Nine Months Ended September 30,
(Dollars in millions)	2023		2022		2023		2022
Loans held for sale—SBAs and USDA	$	(1)	$	(2)	$	(2)	$	(4)
Loans and leases (a)	(15)		(6)		(29)		(7)
Other assets (b)	(1)		(4)		(5)		(8)
	$	(17)	$	(12)	$	(36)	$	(19)

(a)Write-downs on these loans are recognized as part of provision for credit losses.

(b)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 table provides information regarding the unobservable inputs utilized in determining the fair value of Level 3 recurring and non-recurring measurements as of September 30, 2023 and December 31, 2022:

UNOBSERVABLE INPUTS USED IN LEVEL 3 FAIR VALUE MEASUREMENTS
(Dollars in millions)					Values Utilized
Level 3 Class	Fair Value at September 30, 2023		Valuation Techniques	Unobservable Input	Range	Weighted Average (d)
Trading securities - SBA interest-only strips	$	23	Discounted cash flow	Constant prepayment rate	12% - 13%	13%
				Bond equivalent yield	18% - 19%	18%
Loans held for sale - residential real estate	$	21	Discounted cash flow	Prepayment speeds - First mortgage	2% - 7%	3%
				Foreclosure losses	64% - 73%	65%
				Loss severity trends - First mortgage	0% - 8% of UPB	4%
Derivative liabilities, other	$	26	Discounted cash flow	Visa covered litigation resolution amount	$5.7 billion - $6.7 billion	$6.3 billion
				Probability of resolution scenarios	10% - 25%	18%
				Time until resolution	12 - 36 months	26 months
Loans and leases (a)	$	223	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)	$	4	Appraisals from comparable properties	Adjustment for value changes since appraisal	0% - 10% of appraisal	NM
Other assets (c)	$	92	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 credit 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 millions)					Values Utilized
Level 3 Class	Fair Value at December 31, 2022		Valuation Techniques	Unobservable Input	Range	Weighted Average (d)
Trading securities - SBA interest-only strips	$	25	Discounted cash flow	Constant prepayment rate	12% - 13%	12%
				Bond equivalent yield	17%	17%
Loans held for sale - residential real estate	$	22	Discounted cash flow	Prepayment speeds - First mortgage	2% - 8%	3%
				Foreclosure losses	63% - 75%	65%
				Loss severity trends - First mortgage	0% - 11% of UPB	5%
Derivative liabilities, other	$	27	Discounted cash flow	Visa covered litigation resolution amount	$5.6 billion - $6.0 billion	$5.9 billion
				Probability of resolution scenarios	5% - 25%	20%
				Time until resolution	12 - 42 months	28 months
Loans and leases (a)	$	135	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)	$	3	Appraisals from comparable properties	Adjustment for value changes since appraisal	0% - 10% of appraisal	NM
Other assets (c)	$	91	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 credit 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 table reflects the differences between the fair value carrying amount of residential real estate loans held for sale and held for investment measured at fair value in accordance with management’s election and the aggregate unpaid principal amount FHN is contractually entitled to receive at maturity.

DIFFERENCES BETWEEN FAIR VALUE CARRYING AMOUNTS AND CONTRACTUAL AMOUNTS OF RESIDENTIAL REAL ESTATE LOANS REPORTED AT FAIR VALUE
	September 30, 2023
(Dollars in millions)	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	$	88	$	96	$	(8)
Nonaccrual loans	2		5		(3)
	December 31, 2022
(Dollars in millions)	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	$	51	$	58	$	(7)
Nonaccrual loans	5		8		(3)
Loans 90 days or more past due and still accruing	1		1		—

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:

CHANGES IN FAIR VALUE RECOGNIZED IN NET INCOME
	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2023		2022		2023		2022
Changes in fair value included in net income:
Mortgage banking and title noninterest income
Loans held for sale	$	(1)	$	(4)	$	—	$	(10)

Summary Of Book Value And Estimated Fair Value Of Financial Instruments

The following table summarizes the book value and estimated fair value of financial instruments recorded in the Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022:

BOOK VALUE AND ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
	September 30, 2023
	Book Value		Fair Value
(Dollars in millions)			Level 1		Level 2		Level 3		Total
Assets:
Loans and leases, net of allowance for loan and lease losses
Commercial:
Commercial, financial and industrial	$	32,828	$	—	$	—	$	32,205	$	32,205
Commercial real estate	13,952		—		—		13,661		13,661
Consumer:
Consumer real estate	13,457		—		—		12,480		12,480
Credit card and other	781		—		—		755		755
Total loans and leases, net of allowance for loan and lease losses	61,018		—		—		59,101		59,101
Short-term financial assets:
Interest-bearing deposits with banks	1,917		1,917		—		—		1,917
Federal funds sold	53		—		53		—		53
Securities purchased under agreements to resell	363		—		363		—		363
Total short-term financial assets	2,333		1,917		416		—		2,333
Trading securities (a)	1,231		—		1,208		23		1,231
Loans held for sale:
Mortgage loans (elected fair value) (a)	88		—		67		21		88
USDA & SBA loans - LOCOM	496		—		500		—		500
Mortgage loans - LOCOM	29		—		—		29		29
Total loans held for sale	613		—		567		50		617
Securities available for sale (a)	8,100		—		8,100		—		8,100
Securities held to maturity	1,335		—		1,104		—		1,104
Derivative assets (a)	863		10		853		—		863
Other assets:
Tax credit investments	578		—		—		570		570
Deferred compensation mutual funds	99		99		—		—		99
Equity, mutual funds, and other (b)	277		23		—		254		277
Total other assets	954		122		—		824		946
Total assets	$	76,447	$	2,049	$	12,248	$	59,998	$	74,295
Liabilities:
Defined maturity deposits	$	7,783	$	—	$	7,830	$	—	$	7,830
Trading liabilities (a)	366		—		366		—		366
Short-term financial liabilities:
Federal funds purchased	309		—		309		—		309
Securities sold under agreements to repurchase	1,706		—		1,706		—		1,706
Other short-term borrowings	492		—		492		—		492
Total short-term financial liabilities	2,507		—		2,507		—		2,507
Term borrowings:
Real estate investment trust-preferred	46		—		—		47		47
Term borrowings—new market tax credit investment	65		—		—		59		59
Secured borrowings	12		—		—		12		12
Junior subordinated debentures	150		—		—		150		150
Other long-term borrowings	884		—		809		—		809
Total term borrowings	1,157		—		809		268		1,077
Derivative liabilities (a)	1,102		8		1,068		26		1,102
Total liabilities	$	12,915	$	8	$	12,580	$	294	$	12,882

(a)Classes are detailed in the recurring and nonrecurring measurement tables.

(b)Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $51 million and FRB stock of $203 million.

	December 31, 2022
	Book Value		Fair Value
(Dollars in millions)			Level 1		Level 2		Level 3		Total
Assets:
Loans and leases and allowance for loan and lease losses
Commercial:
Commercial, financial and industrial	$	31,473	$	—	$	—	$	31,329	$	31,329
Commercial real estate	13,082		—		—		12,909		12,909
Consumer:
Consumer real estate	12,053		—		—		11,934		11,934
Credit card and other	809		—		—		810		810
Total loans and leases, net of allowance for loan and lease losses	57,417		—		—		56,982		56,982
Short-term financial assets:
Interest-bearing deposits with banks	1,384		1,384		—		—		1,384
Federal funds sold	129		—		129		—		129
Securities purchased under agreements to resell	353		—		353		—		353
Total short-term financial assets	1,866		1,384		482		—		1,866
Trading securities (a)	1,375		—		1,350		25		1,375
Loans held for sale:
Mortgage loans (elected fair value) (a)	51		—		29		22		51
USDA & SBA loans - LOCOM	506		—		512		—		512
Mortgage loans - LOCOM	33		—		—		33		33
Total loans held for sale	590		—		541		55		596
Securities available for sale (a)	8,836		—		8,836		—		8,836
Securities held to maturity	1,371		—		1,209		—		1,209
Derivative assets (a)	460		9		451		—		460
Other assets:
Tax credit investments	547		—		—		542		542
Deferred compensation mutual funds	112		112		—		—		112
Equity, mutual funds, and other (b)	275		22		—		253		275
Total other assets	934		134		—		795		929
Total assets	$	72,849	$	1,527	$	12,869	$	57,857	$	72,253
Liabilities:
Defined maturity deposits	$	2,887	$	—	$	2,890	$	—	$	2,890
Trading liabilities (a)	335		—		335		—		335
Short-term financial liabilities:
Federal funds purchased	400		—		400		—		400
Securities sold under agreements to repurchase	1,013		—		1,013		—		1,013
Other short-term borrowings	1,093		—		1,093		—		1,093
Total short-term financial liabilities	2,506		—		2,506		—		2,506
Term borrowings:
Real estate investment trust-preferred	46		—		—		47		47
Term borrowings—new market tax credit investment	66		—		—		59		59
Secured borrowings	3		—		—		3		3
Junior subordinated debentures	148		—		—		150		150
Other long-term borrowings	1,334		—		1,301		—		1,301
Total term borrowings	1,597		—		1,301		259		1,560
Derivative liabilities (a)	958		8		923		27		958
Total liabilities	$	8,283	$	8	$	7,955	$	286	$	8,249

(a)Classes are detailed in the recurring and nonrecurring measurement tables.

(b)Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $50 million and FRB stock of $203 million.

The following table presents the contractual amount and fair value of unfunded loan commitments and standby and other commitments as of September 30, 2023 and December 31, 2022:

UNFUNDED COMMITMENTS
	Contractual Amount				Fair Value
(Dollars in millions)	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Unfunded Commitments:
Loan commitments	$	25,402	$	25,953	$	2	$	1
Standby and other commitments	728		754		7		7