Fair Value of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured on Recurring Basis

The following tables present the balances of assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 and 2019: 

	December 31, 2020
(Dollars in millions)	Level 1		Level 2		Level 3		Total
Trading securities:
U.S. treasuries	$	—	$	81	$	—	$	81
Government agency issued MBS	—		633		—		633
Government agency issued CMO	—		212		—		212
Other U.S. government agencies	—		62		—		62
States and municipalities	—		7		—		7
Corporate and other debt	—		181		—		181
Total trading securities	—		1,176		—		1,176
Loans held for sale (elected fair value)	—		393		12		405
Loans held for investment (elected fair value)	—		—		16		16
Securities available for sale:
U.S. treasuries	—		613		—		613
Government agency issued MBS	—		3,812		—		3,812
Government agency issued CMO	—		2,406		—		2,406
Other U.S. government agencies	—		684		—		684
States and municipalities	—		460		—		460
Corporate and other debt	—		40		—		40
Interest-only strips (elected fair value)	—		—		32		32
Total securities available for sale	—		8,015		32		8,047
Other assets:
Deferred compensation mutual funds	118		—		—		118
Equity, mutual funds, and other	25		—		—		25
Derivatives, forwards and futures	63		—		—		63
Derivatives, interest rate contracts	—		702		—		702
Derivatives, other	—		4		—		4
Total other assets	206		706		—		912
Total assets	$	206	$	10,290	$	60	$	10,556
Trading liabilities:
U.S. treasuries	$	—	$	307	$	—	$	307
Government issued agency MBS	—		3		—		3
Corporate and other debt	—		43		—		43
Total trading liabilities	—		353		—		353
Other liabilities:
Derivatives, forwards and futures	71		—		—		71
Derivatives, interest rate contracts	—		60		—		60
Derivatives, other	—		4		14		18
Total other liabilities	71		64		14		149
Total liabilities	$	71	$	417	$	14	$	502

	December 31, 2019
(Dollars in millions)	Level 1		Level 2		Level 3		Total
Trading securities:
U.S. treasuries	$	—	$	135	$	—	$	135
Government agency issued MBS	—		268		—		268
Government agency issued CMO	—		250		—		250
Other U.S. government agencies	—		125		—		125
States and municipalities	—		121		—		121
Corporate and other debt	—		445		—		445
Equity, mutual funds, and other	—		1		—		1
Total trading securities	—		1,345		—		1,345
Trading securities—mortgage banking	—		—		1		1
Loans held for sale (elected fair value)	—		—		14		14
Securities available for sale:
Government agency issued MBS	—		2,349		—		2,349
Government agency issued CMO	—		1,670		—		1,670
Other U.S. government agencies	—		306		—		306
States and municipalities	—		61		—		61
Corporate and other debt	—		40		—		40
Interest-only strips (elected fair value)	—		—		19		19
Total securities available for sale	—		4,426		19		4,445
Other assets:
Deferred compensation mutual funds	47		—		—		47
Equity, mutual funds, and other	23		—		—		23
Derivatives, forwards and futures	20		—		—		20
Derivatives, interest rate contracts	—		163		—		163
Total other assets	90		163		—		253
Total assets	$	90	$	5,934	$	34	$	6,058
Trading liabilities:
U.S. treasuries	$	—	$	407	$	—	$	407
Corporates and other debt	—		99		—		99
Total trading liabilities	—		506		—		506
Other liabilities:
Derivatives, forwards and futures	20		—		—		20
Derivatives, interest rate contracts	—		24		—		24
Derivatives, other	—		—		23		23
Total other liabilities	20		24		23		67
Total liabilities	$	20	$	530	$	23	$	573

Summary of Changes in Level 3 Assets Measured At Fair Value

Changes in Recurring Level 3 Fair Value Measurements

The changes in Level 3 assets and liabilities measured at fair value for the years ended December 31, 2020, 2019 and 2018 on a recurring basis are summarized as follows: 

	Year Ended December 31, 2020
(Dollars in millions)	Trading securities			Interest-only strips- AFS			Loans held for sale			Loans held for investment		Net  derivative liabilities
Balance on January 1, 2020	$	1		$	19		$	14		$	—	$	(23)
Acquired	—			—			—			14		—
Total net gains (losses) included in net income	(1)			(6)			1			—		(1)
Purchases	—			6			—			—		—
Sales	—			(11)			—			(4)		—
Settlements	—			—			(3)			(3)		10
Net transfers into (out of) Level 3	—			24		(b)	—			9		—
Balance on December 31, 2020	$	—		$	32		$	12		$	16	$	(14)
Net unrealized gains (losses) included in net income	$	—	(a)	$	(4)	(c)	$	1	(a)	$	—	$	(1)	(d)

	Year Ended December 31, 2019
(Dollars in millions)	Trading securities			Interest-only strips- AFS			Loans held for sale			Net  derivative liabilities
Balance on January 1, 2019	$	2		$	10		$	16		$	(32)
Total net gains (losses) included in net income	—			(5)			2			(4)
Purchases	—			—			—			—
Sales	—			(47)			—			—
Settlements	(1)			—			(4)			13
Net transfers into (out of) Level 3	—			61		(b)	—			—
Balance on December 31, 2019	$	1		$	19		$	14		$	(23)
Net unrealized gains (losses) included in net income	$	—	(a)	$	(2)	(c)	$	2	(a)	$	(4)	(d)

	Year Ended December 31, 2018
(Dollars in millions)	Trading securities			Interest-only strips- AFS			Loans held for sale			Net  derivative liabilities
Balance on January 1, 2018	$	2		$	1		$	19		$	(6)
Total net gains (losses) included in net income	1			—			1			(5)
Purchases	—			—			—			(28)		(e)
Sales	—			(17)			—			—
Settlements	(1)			—			(4)			7
Net transfers into (out of) Level 3	—			26		(b)	—			—
Balance on December 31, 2018	$	2		$	10		$	16		$	(32)
Net unrealized gains (losses) included in net income	$	—	(a)	$	(1)	(c)	$	1	(a)	$	(5)	(d)

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

(b)Transfers into interest-only strips - AFS 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.

(e)Increase related to Visa-related derivatives, see Note 22-Derivatives.

Summary of Changes in Level 3 Net Derivative Asset (Liability) Measured at Fair Value

Changes in Recurring Level 3 Fair Value Measurements

The changes in Level 3 assets and liabilities measured at fair value for the years ended December 31, 2020, 2019 and 2018 on a recurring basis are summarized as follows: 

	Year Ended December 31, 2020
(Dollars in millions)	Trading securities			Interest-only strips- AFS			Loans held for sale			Loans held for investment		Net  derivative liabilities
Balance on January 1, 2020	$	1		$	19		$	14		$	—	$	(23)
Acquired	—			—			—			14		—
Total net gains (losses) included in net income	(1)			(6)			1			—		(1)
Purchases	—			6			—			—		—
Sales	—			(11)			—			(4)		—
Settlements	—			—			(3)			(3)		10
Net transfers into (out of) Level 3	—			24		(b)	—			9		—
Balance on December 31, 2020	$	—		$	32		$	12		$	16	$	(14)
Net unrealized gains (losses) included in net income	$	—	(a)	$	(4)	(c)	$	1	(a)	$	—	$	(1)	(d)

	Year Ended December 31, 2019
(Dollars in millions)	Trading securities			Interest-only strips- AFS			Loans held for sale			Net  derivative liabilities
Balance on January 1, 2019	$	2		$	10		$	16		$	(32)
Total net gains (losses) included in net income	—			(5)			2			(4)
Purchases	—			—			—			—
Sales	—			(47)			—			—
Settlements	(1)			—			(4)			13
Net transfers into (out of) Level 3	—			61		(b)	—			—
Balance on December 31, 2019	$	1		$	19		$	14		$	(23)
Net unrealized gains (losses) included in net income	$	—	(a)	$	(2)	(c)	$	2	(a)	$	(4)	(d)

	Year Ended December 31, 2018
(Dollars in millions)	Trading securities			Interest-only strips- AFS			Loans held for sale			Net  derivative liabilities
Balance on January 1, 2018	$	2		$	1		$	19		$	(6)
Total net gains (losses) included in net income	1			—			1			(5)
Purchases	—			—			—			(28)		(e)
Sales	—			(17)			—			—
Settlements	(1)			—			(4)			7
Net transfers into (out of) Level 3	—			26		(b)	—			—
Balance on December 31, 2018	$	2		$	10		$	16		$	(32)
Net unrealized gains (losses) included in net income	$	—	(a)	$	(1)	(c)	$	1	(a)	$	(5)	(d)

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

(b)Transfers into interest-only strips - AFS 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.

(e)Increase related to Visa-related derivatives, see Note 22-Derivatives.

Nonrecurring Fair Value Measurements

For

assets measured at fair value on a nonrecurring basis which were still held on the Consolidated Balance Sheets at December 31, 2020, 2019 and 2018, respectively, the following tables provide the level of valuation assumptions used to determine each adjustment and the related carrying value.

	Carrying value at December 31, 2020								Year Ended December 31, 2020
(Dollars in millions)	Level 1		Level 2		Level 3		Total		Net gains (losses)
Loans held for sale—SBAs and USDA	$	—	$	508	$	1	$	509	$	(3)
Loans held for sale—first mortgages	—		—		1		1		—
Loans and leases (a)	—		—		77		77		(12)
OREO (b)	—		—		15		15		(1)
Other assets (c)	—		—		9		9		(2)
									$	(18)

	Carrying value at December 31, 2019								Year Ended December 31, 2019
(Dollars in millions)	Level 1		Level 2		Level 3		Total		Net gains (losses)
Loans held for sale—SBAs and USDA	$	—	$	493	$	1	$	494	$	(2)
Loans held for sale—first mortgages	—		—		1		1		—
Loans and leases (a)	—		—		42		42		(7)
OREO (b)	—		—		16		16		(1)
Other assets (c)	—		—		11		11		(2)
									$	(12)

	Carrying value at December 31, 2018								Year Ended December 31, 2018
(Dollars in millions)	Level 1		Level 2		Level 3		Total		Net gains (losses)
Loans held for sale—other consumer	$	—	$	19	$	—	$	19	$	(2)
Loans held for sale—SBAs and USDA	—		577		1		578		(2)
Loans held for sale—first mortgages	—		—		1		1		—
Loans and leases (a)	—		—		48		48		(1)
OREO (b)	—		—		22		22		(2)
Other assets (c)	—		—		9		9		(5)
									$	(12)

(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.

Schedule of Unobservable Inputs Utilized In Determining The Fair Value of Level 3 Recurring And Non-Recurring Measurements

The following tables provide information regarding the unobservable inputs utilized in determining the fair value of Level 3 recurring and non-recurring measurements as of December 31, 2020 and 2019:  

(Dollars in millions)
					Values Utilized
Level 3 Class	Fair Value at December 31, 2020		Valuation Techniques	Unobservable Input	Range	Weighted Average (d)
Available for sale securities SBA - interest only strips	$	32	Discounted cash flow	Constant prepayment rate	12%	12%
				Bond equivalent yield	15% - 17%	15%
Loans held for sale - residential real estate	$	13	Discounted cash flow	Prepayment speeds - First mortgage	5% - 15%	5%
				Foreclosure losses	59% - 70%	63%
				Loss severity trends - First mortgage	3% - 19% of UPB	12%
Loans held for sale - unguaranteed interest in SBA loans	$	1	Discounted cash flow	Constant prepayment rate	8% - 12%	10%
				Bond equivalent yield	7%-8%	7%
Loans held for investment	$	16	Discounted cash flow	Constant prepayment rate	0% - 26%	11%
				Constant default rate	0% - 14%	1%
				Loss severity trends	0% -100%	11%
Derivative liabilities, other	$	14	Discounted cash flow	Visa covered litigation resolution amount	$5.4 billion - $6.0 billion	$5.8 billion
				Probability of resolution scenarios	10% - 50%	16%
				Time until resolution	3 - 27 months	19 months
Loans and leases (a)	$	77	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)	$	15	Appraisals from comparable properties	Adjustment for value changes since appraisal	0% - 10% of appraisal	NM
Other assets (c)	$	9	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, 2019		Valuation Techniques	Unobservable Input	Range	Weighted Average (d)
Available for sale securities SBA - interest only strips	$	19	Discounted cash flow	Constant prepayment rate	12%	12%
				Bond equivalent yield	16% - 17%	16%
Loans held for sale - residential real estate	$	15	Discounted cash flow	Prepayment speeds - First mortgage	3% - 14%	4%
				Prepayment speeds - HELOC	0% - 12%	8%
				Foreclosure losses	50% - 66%	64%
				Loss severity trends - First mortgage	3% - 24% of UPB	14%
				Loss severity trends - HELOC	0% - 72% of UPB	50%
Loans held for sale - unguaranteed interest in SBA loans	$	1	Discounted cash flow	Constant prepayment rate	8% - 12%	10%
				Bond equivalent yield	9%	9%
Derivative liabilities, other	$	23	Discounted cash flow	Visa covered litigation resolution amount	$5.4 billion - $6.0 billion	$5.8 billion
				Probability of resolution scenarios	10% - 50%	16%
				Time until resolution	15 - 39 months	29 months
Loans and leases (a)	$	42	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)	$	16	Appraisals from comparable properties	Adjustment for value changes since appraisal	0% - 10% of appraisal	NM
Other assets (c)	$	11	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 tables reflect 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.

	December 31, 2020
(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	$	405	$	442	$	(37)
Nonaccrual loans	2		5		(3)
Loans held for investment reported at fair value:
Total loans	16		17		(1)
Nonaccrual loans	1		1		—
	December 31, 2019
(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	$	14	$	19	$	(5)
Nonaccrual loans	4		7		(3)

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: 

	Year Ended December 31,
(Dollars in millions)	2020		2019		2018
Changes in fair value included in net income:
Mortgage banking and title noninterest income
Loans held for sale	$	4	$	2	$	1

Summary of Book Value And Estimated Fair Value of Financial Instruments

The following tables summarize the book value and estimated fair value of financial instruments recorded in the Consolidated Balance Sheets as of December 31, 2020 and December 31, 2019:

	December 31, 2020
	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	$	32,651	$	—	$	—	$	32,582	$	32,582
Commercial real estate	12,033		—		—		12,079		12,079
Consumer:
Consumer real estate (a)	11,483		—		—		11,903		11,903
Credit card & other	1,102		—		—		1,131		1,131
Total loans and leases, net of allowance for loan and lease losses	57,269		—		—		57,695		57,695
Short-term financial assets:
Interest-bearing deposits with banks	8,351		8,351		—		—		8,351
Federal funds sold	65		—		65		—		65
Securities purchased under agreements to resell	380		—		380		—		380
Total short-term financial assets	8,796		8,351		445		—		8,796
Trading securities (b)	1,176		—		1,176		—		1,176
Loans held for sale:
Mortgage loans (elected fair value) (b)	405		—		393		12		405
USDA & SBA loans - LOCOM	509		—		511		1		512
Other loans - LOCOM	31		—		31		—		31
Mortgage loans - LOCOM	77		—		—		77		77
Total loans held for sale	1,022		—		935		90		1,025
Securities available for sale (b)	8,047		—		8,015		32		8,047
Derivative assets (b)	770		63		706		—		769
Other assets:
Tax credit investments	400		—		—		371		371
Deferred compensation mutual funds	118		118		—		—		118
Equity, mutual funds, and other (c)	288		25		—		263		288
Total other assets	806		143		—		634		777
Total assets	$	77,886	$	8,557	$	11,277	$	58,451	$	78,285
Liabilities:
Defined maturity deposits	$	5,070	$	—	$	5,083	$	—	$	5,083
Trading liabilities (b)	353		—		353		—		353
Short-term financial liabilities:
Federal funds purchased	845		—		845		—		845
Securities sold under agreements to repurchase	1,187		—		1,187		—		1,187
Other short-term borrowings	166		—		166		—		166
Total short-term financial liabilities	2,198		—		2,198		—		2,198
Term borrowings:
Real estate investment trust-preferred	46		—		—		47		47
Term borrowings—new market tax credit investment	45		—		—		45		45
Secured borrowings	15		—		—		15		15
Junior subordinated debentures	238		—		—		223		223
Other long term borrowings	1,326		—		1,455		—		1,455
Total term borrowings	1,670		—		1,455		330		1,785
Derivative liabilities (b)	149		71		64		14		149
Total liabilities	$	9,440	$	71	$	9,153	$	344	$	9,568

(a)In first quarter 2020, the Permanent Mortgage portfolio was combined into Consumer Real Estate portfolio, all prior periods were revised for comparability.

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

(c)Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $61 million and FRB stock of $202 million.

	December 31, 2019
	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	$	19,929	$	—	$	—	$	20,096	$	20,096
Commercial real estate	4,301		—		—		4,301		4,301
Consumer:
Consumer real estate	6,149		—		—		6,334		6,334
Credit card & other	482		—		—		487		487
Total loans and leases, net of allowance for loan and lease losses	30,861		—		—		31,218		31,218
Short-term financial assets:
Interest-bearing deposits with banks	482		482		—		—		482
Federal funds sold	46		—		46		—		46
Securities purchased under agreements to resell	587		—		587		—		587
Total short-term financial assets	1,115		482		633		—		1,115
Trading securities (a)	1,346		—		1,345		1		1,346
Loans held for sale:
Mortgage loans (elected fair value) (a)	14		—		—		14		14
USDA & SBA loans - LOCOM	494		—		496		1		497
Other loans - LOCOM	5		—		5		—		5
Mortgage loans - LOCOM	81		—		—		81		81
Total loans held for sale	594		—		501		96		597
Securities available for sale (a)	4,445		—		4,426		19		4,445
Securities held to maturity	10		—		—		10		10
Derivative assets (a)	183		20		163		—		183
Other assets:
Tax credit investments	247		—		—		245		245
Deferred compensation assets	47		47		—		—		47
Equity, mutual funds, and other (b)	229		23		—		207		230
Total other assets	523		70		—		452		522
Total assets	$	39,077	$	572	$	7,068	$	31,796	$	39,436
Liabilities:
Defined maturity deposits	$	3,618	$	—	$	3,631	$	—	$	3,631
Trading liabilities (a)	506		—		506		—		506
Short-term financial liabilities:
Federal funds purchased	548		—		548		—		548
Securities sold under agreements to repurchase	717		—		717		—		717
Other short-term borrowings	2,253		—		2,253		—		2,253
Total short-term financial liabilities	3,518		—		3,518		—		3,518
Term borrowings:
Real estate investment trust-preferred	46		—		—		47		47
Secured borrowings	22		—		—		22		22
Junior subordinated debentures	145		—		—		142		142
Other long term borrowings	578		—		574		—		574
Total term borrowings	791		—		574		211		785
Derivative liabilities (a)	67		20		24		23		67
Total liabilities	$	8,500	$	20	$	8,253	$	234	$	8,507

Certain previously reported amounts have been reclassified to agree with current presentation.

(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 $76 million and FRB stock of $131 million.

The following table presents the contractual amount and fair value of unfunded loan commitments and standby and other commitments as of December 31, 2020 and December 31, 2019:

	Contractual Amount				Fair Value
(Dollars in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Unfunded Commitments:
Loan commitments	$	20,796	$	12,355	$	2	$	4
Standby and other commitments	751		459		6		6