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Derivatives (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives Associated With Fixed Income Trading Activities

The following tables summarize derivatives associated with FHNF's trading activities as of September 30, 2022 and December 31, 2021:


DERIVATIVES ASSOCIATED WITH TRADING
	September 30, 2022
(Dollars in millions)	Notional		Assets		Liabilities
Customer interest rate contracts	$	3,112	$	3	$	291
Offsetting upstream interest rate contracts	3,112		80		3
Option contracts purchased	10		—		—
Forwards and futures purchased	2,089		4		36
Forwards and futures sold	2,204		40		3


	December 31, 2021
(Dollars in millions)	Notional		Assets		Liabilities
Customer interest rate contracts	$	3,587	$	84	$	41
Offsetting upstream interest rate contracts	3,587		4		8
Option contracts purchased	13		—		—
Forwards and futures purchased	4,430		2		9
Forwards and futures sold	5,044		10		2

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, 2022 and December 31, 2021:


DERIVATIVES ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT
	September 30, 2022
(Dollars in millions)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	8,315	$	—	$	611
Offsetting upstream interest rate contracts	8,315		184		—


	December 31, 2021
(Dollars in millions)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	8,037	$	202	$	29
Offsetting upstream interest rate contracts	8,037		4		15

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, 2022 and 2021:


DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
(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)	$	271	$	(29)	$	788	$	(197)
Offsetting upstream interest rate contracts (a)	(271)		29		(788)		197

(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, 2022 and December 31, 2021:

DERIVATIVES ASSOCIATED WITH CASH FLOW HEDGES

September 30, 2022

(Dollars in millions)

Notional

Assets

Liabilities

Cash Flow Hedges

Hedging Instruments:

Interest rate contracts

5,525

—

Hedged Items:

Variability in cash flows related to debt instruments (primarily loans)

N/A

5,525

N/A



	December 31, 2021
(Dollars in millions)	Notional		Assets		Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts	$	1,100	$	13	$	—
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)	N/A		$	1,100	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, 2022 and 2021:


DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH CASH FLOW HEDGES
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
(Dollars in millions)	Gains (Losses)		Gains (Losses)		Gains (Losses)		Gains (Losses)
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts (a)	$	(138)	$	(6)	$	(105)	$	(20)
Gain (loss) recognized in other comprehensive income (loss)	(103)		—		(149)		(1)
Gain (loss) reclassified from AOCI into interest income	4		(1)		7		(4)

(a)Approximately $20 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, 2022
(Dollars in millions)	Notional		Assets		Liabilities
Mortgage Banking Hedges

Option contracts written	$	92	$	—	$	1
Forward contracts written	136		5		—


	December 31, 2021
(Dollars in millions)	Notional		Assets		Liabilities
Mortgage Banking Hedges

Option contracts written	$	241	$	4	$	—

Forward contracts written	404		—		—

The following table summarizes gains (losses) on FHN's derivatives associated with mortgage banking activities for the three and nine months ended September 30, 2022 and 2021:


DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH MORTGAGE BANKING HEDGES
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
(Dollars in millions)	Gains (Losses)		Gains (Losses)		Gains (Losses)		Gains (Losses)
Mortgage Banking Hedges

Option contracts written	$	4	$	(3)	$	5	$	(12)
Forward contracts written	6		—		33		—
Forward contracts purchased	—		(2)		—		10

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, 2022 and December 31, 2021:


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, 2022
Interest rate derivative contracts	$	267	$	—	$	267	$	(54)	$	(196)	$	17
Forward contracts	44		—		44		(11)		(28)		5
	$	311	$	—	$	311	$	(65)	$	(224)	$	22

December 31, 2021
Interest rate derivative contracts	$	311	$	—	$	311	$	(32)	$	(181)	$	98
Forward contracts	12		—		12		(4)		(3)		5
	$	323	$	—	$	323	$	(36)	$	(184)	$	103

(a)Included in other assets on the Consolidated Balance Sheets. As of September 30, 2022 and December 31, 2021, $7 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, 2022 and December 31, 2021:


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, 2022
Interest rate derivative contracts	$	988	$	—	$	988	$	(54)	$	(180)	$	754
Forward contracts	39		—		39		(11)		(10)		18
	$	1,027	$	—	$	1,027	$	(65)	$	(190)	$	772
December 31, 2021
Interest rate derivative contracts	$	93	$	—	$	93	$	(32)	$	(38)	$	23
Forward contracts	10		—		10		(4)		(1)		5
	$	103	$	—	$	103	$	(36)	$	(39)	$	28

(a)Included in other liabilities on the Consolidated Balance Sheets. As of September 30, 2022 and December 31, 2021, $21 million and $24 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.