Mortgage Banking Activity

12 Months Ended

Dec. 31, 2023

Mortgage Banking [Abstract]

Mortgage Banking Activity

Mortgage Banking Activity

FHN originates mortgage loans for sale into the secondary market. These loans primarily consist of residential first lien mortgages that conform to standards established by GSEs that are major investors in U.S. home mortgages, but can also consist of junior lien and jumbo loans secured by residential property. These loans are primarily sold to private companies that are unaffiliated with the GSEs on a servicing-released basis. Gains and losses on these mortgage loans are included in mortgage banking and title income on the Consolidated Statements of Income.

At December 31, 2023, FHN had approximately $34 million of loans that remained from pre-2009 mortgage business operations of legacy First Horizon. Activity related to the pre-2009 mortgage loans was primarily limited to payments and write-offs in 2023, 2022, and 2021, with no new originations or loan sales, and only an insignificant amount of repurchases. These loans are excluded from the disclosure below.

The following table summarizes activity relating to residential mortgage loans held for sale for the years ended December 31, 2023, 2022, and 2021:

Table 8.7.1

MORTGAGE LOAN ACTIVITY

(Dollars in millions)	2023		2022		2021
Balance at beginning of period	$	44	$	250	$	409
Originations and purchases	692		1,275		2,836
Sales, net of gains	(674)		(1,481)		(3,025)
Mortgage loans transferred from (to) held for investment	—		—		30
Balance at end of period	$	62	$	44	$	250

Mortgage Servicing Rights

FHN records mortgage servicing rights at the lower of cost or market value and amortizes them over the remaining servicing life of the loans, with consideration given to prepayment assumptions.

Mortgage servicing rights are included in other assets on the Consolidated Balance Sheets. Mortgage servicing rights had the following carrying values as of the periods indicated in the table below.

Table 8.7.2

MORTGAGE SERVICING RIGHTS

	December 31, 2023
(Dollars in millions)	Gross  Carrying Amount		Accumulated Amortization		Net Carrying Amount
Mortgage servicing rights	$	25	$	(7)	$	18
	December 31, 2022
(Dollars in millions)	Gross  Carrying Amount		Accumulated Amortization		Net Carrying Amount
Mortgage servicing rights	$	21	$	(5)	$	16

In addition, there was an insignificant amount of non-mortgage and commercial servicing rights as of December 31, 2023 and 2022. Total mortgage servicing fees included in mortgage banking and title income were $4 million for each of the years ended December 31, 2023, 2022, and 2021. Mortgage servicing rights with a net carrying amount of $21 million were sold during 2022, resulting in a gain of $12 million for the year ended December 31, 2022 which is included in mortgage banking and title income on the Consolidated Statements of Income.