Investment Securities

12 Months Ended

Dec. 31, 2022

The following table summarizes FHN’s investment securities as of December 31, 2022 and 2021:

Table 8.2.1

INVESTMENT SECURITIES


	December 31, 2022
(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:

Government agency issued MBS	$	5,457	$	1	$	(695)	$	4,763
Government agency issued CMO	2,682		—		(369)		2,313
Other U.S. government agencies	1,325		—		(162)		1,163

States and municipalities	658		1		(62)		597
Total securities available for sale (a)	$	10,122	$	2	$	(1,288)	$	8,836




Securities held to maturity:
Government agency issued MBS	$	897	$	—	$	(109)	$	788
Government agency issued CMO	474		—		(53)		421
Total securities held to maturity	$	1,371	$	—	$	(162)	$	1,209

(a)Includes $6.5 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.


	December 31, 2021
(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:
Government agency issued MBS	$	5,062	$	42	$	(49)	$	5,055
Government agency issued CMO	2,296		8		(47)		2,257
Other U.S. government agencies	861		4		(15)		850
States and municipalities	535		11		(1)		545
Total securities available for sale (a)	$	8,754	$	65	$	(112)	$	8,707

Securities held to maturity:
Government agency issued MBS	$	509	$	—	$	(5)	$	504
Government agency issued CMO	203		—		(2)		201
Total securities held to maturity	$	712	$	—	$	(7)	$	705

(a)Includes $6.5 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.

The amortized cost and fair value by contractual maturity for the debt securities portfolio as of December 31, 2022 is provided below:

Table 8.2.2

DEBT SECURITIES PORTFOLIO MATURITIES


	Held to Maturity				Available for Sale
(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within 1 year	$	—	$	—	$	43	$	43
After 1 year through 5 years	—		—		120		115
After 5 years through 10 years	—		—		394		354
After 10 years	—		—		1,426		1,248
Subtotal	—		—		1,983		1,760
Government agency issued MBS and CMO (a)	1,371		1,209		8,139		7,076
Total	$	1,371	$	1,209	$	10,122	$	8,836

(a)Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Gross gains on sales of AFS securities for the years ended December 31, 2022, 2021 and 2020 were insignificant. Gross losses on sales of AFS securities were insignificant for the years ended December 31, 2022, and 2021, and $4 million for the year ended 2020. Cash proceeds from sales of AFS securities were insignificant for 2022 and

were $68 million and $629 million for 2021 and 2020, respectively.

The following table provides information on investments within the available-for-sale portfolio that had unrealized losses as of December 31, 2022 and 2021:

Table 8.2.3

AFS INVESTMENT SECURITIES WITH UNREALIZED LOSSES


	As of December 31, 2022
	Less than 12 months				12 months or longer				Total
(Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

Government agency issued MBS	$	2,314	$	(249)	$	2,350	$	(446)	$	4,664	$	(695)
Government agency issued CMO	1,104		(123)		1,209		(246)		2,313		(369)
Other U.S. government agencies	643		(67)		424		(95)		1,067		(162)

States and municipalities	493		(48)		54		(14)		547		(62)
Total	$	4,554	$	(487)	$	4,037	$	(801)	$	8,591	$	(1,288)


	As of December 31, 2021
	Less than 12 months				12 months or longer				Total
(Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government agency issued MBS	$	2,973	$	(41)	$	184	$	(8)	$	3,157	$	(49)
Government agency issued CMO	1,436		(37)		248		(10)		1,684		(47)
Other U.S. government agencies	459		(11)		90		(4)		549		(15)

States and municipalities	68		(1)		—		—		68		(1)
Total	$	4,936	$	(90)	$	522	$	(22)	$	5,458	$	(112)

FHN has evaluated all AFS debt securities that were in unrealized loss positions in accordance with its accounting policy for recognition of credit losses. No AFS debt securities were determined to have credit losses. Total AIR not included in the fair value or amortized cost basis of

AFS debt securities was $32 million and $23 million as of December 31, 2022 and 2021, respectively. Consistent with FHN's review of the related securities, there were no credit-related write downs of AIR for AFS debt securities during the reporting periods. Additionally, for AFS debt

securities with unrealized losses, FHN does not intend to sell them and it is more-likely-than-not that FHN will not be required to sell them prior to recovery. Therefore, no write downs of these investments to fair value occurred during the reporting periods.

For HTM securities, an allowance for credit losses is required to absorb estimated lifetime credit losses. Total AIR not included in the fair value or amortized cost basis of HTM debt securities was $3 million and $1 million as of December 31, 2022 and 2021, respectively. FHN has assessed the risk of credit loss and has determined that no allowance for credit losses for HTM securities was necessary as of December 31, 2022 and 2021. The evaluation of credit risk includes consideration of third-party and government guarantees (both explicit and implicit), senior or subordinated status, credit ratings of

the issuer, the effects of interest rate changes since purchase and observable market information such as issuer-specific credit spreads.

The carrying amount of equity investments without a readily determinable fair value was $79 million and $70 million at December 31, 2022 and 2021, respectively. The year-to-date 2022 and 2021 gross amounts of upward and downward valuation adjustments were not significant.

Unrealized losses of $11 million and unrealized gains of $3 million and $7 million were recognized during 2022, 2021 and 2020, respectively, for equity investments with readily determinable fair values.