Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2020

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, 2020 and December 31, 2019:

(Dollars in thousands)	September 30, 2020		December 31, 2019
Assets:
Other assets	$	154,783	$	91,873
Total assets	$	154,783	$	91,873
Liabilities:
Other liabilities	$	131,782	$	70,830
Total liabilities	$	131,782	$	70,830

Summary of the Impact of Qualifying LIHTC Investments

The following table summarizes the impact to the Provision (benefit) for income taxes on the Consolidated Statements of Income for the three and nine months ended September 30, 2020, and 2019 for LIHTC investments accounted for under the proportional amortization method.

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2020		2019		2020		2019
Provision (benefit) for income taxes:
Amortization of qualifying LIHTC investments	$	8,273	$	4,436	$	19,586	$	12,721
Low income housing tax credits	(6,738)		(3,607)		(16,094)		(10,758)
Other tax benefits related to qualifying LIHTC investments	(3,034)		(1,751)		(8,172)		(4,970)

Summary Of VIEs Not Consolidated By FHN

The following table summarizes FHN’s nonconsolidated VIEs as of September 30, 2020:

(Dollars in thousands)	Maximum Loss Exposure		Liability Recognized		Classification
Type
Low income housing partnerships	$	338,558	$	166,931	(a)
Other tax credit investments (b)	66,172		34,993		Other assets
Small issuer trust preferred holdings (c)	209,442		—		Loans and leases
On-balance sheet trust preferred securitization	32,031		82,143		(d)
Proprietary residential mortgage securitizations	471		—		Trading securities
Holdings of agency mortgage-backed securities (c)	7,386,169		—		(e)
Commercial loan troubled debt restructurings (f)	177,949		—		Loans and leases
Sale-leaseback transaction	17,993		—		(g)
Proprietary trust preferred issuances (h)	—		287,124		Term borrowings

(a)Maximum loss exposure represents $171.7 million of current investments and $166.9 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 $112.5 million classified as Loans and leases, and $1.7 million classified as Trading securities which are offset by $82.1 million classified as Term borrowings.

(e)Includes $0.9 billion classified as Trading securities and $6.5 billion classified as Securities available for sale.

(f)Maximum loss exposure represents $172.8 million of current receivables and contractual funding commitments on loans related to commercial borrowers involved in a troubled debt restructuring were $5.1 million.

(g)Maximum loss exposure represents the current loan balance plus additional funding commitments.

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

The following table summarizes FHN’s nonconsolidated VIEs as of December 31, 2019:

(Dollars in thousands)	Maximum Loss Exposure		Liability Recognized		Classification
Type
Low income housing partnerships	$	237,668	$	136,404	(a)
Other tax credit investments (b) (c)	6,282		—		Other assets
Small issuer trust preferred holdings (d)	238,397		—		Loans and leases
On-balance sheet trust preferred securitization	33,265		80,908		(e)
Proprietary residential mortgage securitizations	941		—		Trading securities
Holdings of agency mortgage-backed securities (d)	4,537,685		—		(f)
Commercial loan troubled debt restructurings (g)	45,169		—		Loans and leases
Sale-leaseback transaction	18,111		—		(h)
Proprietary trust preferred issuances (i)	—		167,014		Term borrowings

(a)Maximum loss exposure represents $101.3 million of current investments and $136.4 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 2023.

(b)A liability is not recognized as investments are written down over the life of the related tax credit.

(c)Maximum loss exposure represents current investment balance. As of December 31, 2019, there were no investments funded through loans from community development enterprises.

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

(e)Includes $112.5 million classified as Loans and leases, and $1.7 million classified as Trading securities which are offset by $80.9 million classified as Term borrowings.

(f)Includes $0.5 billion classified as Trading securities and $4.0 billion classified as securities available for sale.

(g)Maximum loss exposure represents $43.4 million of current receivables and $1.8 million of contractual funding commitments on loans related to commercial borrowers involved in a troubled debt restructuring.

(h)Maximum loss exposure represents the current loan balance plus additional funding commitments less amounts received from the buyer-lessor.

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