Mortgage Banking Activity

12 Months Ended

Dec. 31, 2022

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.

Prior to the IBKC merger, FHN’s mortgage banking operations were not significant. At December 31, 2022, FHN had approximately $39 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 2022, 2021, and 2020, 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, 2022, 2021, and 2020:

Table 8.7.1

MORTGAGE LOAN ACTIVITY

(Dollars in millions)	2022		2021		2020
Balance at beginning of period	$	250	$	409	$	4
Acquired	—		—		320
Originations and purchases	1,275		2,836		2,499
Sales, net of gains	(1,481)		(3,025)		(2,405)
Mortgage loans transferred from (to) held for investment	—		30		(9)
Balance at end of period	$	44	$	250	$	409

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 period indicated.

Table 8.7.2

MORTGAGE SERVICING RIGHTS

	December 31, 2022
(Dollars in millions)	Gross  Carrying Amount		Accumulated Amortization		Net Carrying Amount
Mortgage servicing rights	$	21	$	(5)	$	16
	December 31, 2021
(Dollars in millions)	Gross  Carrying Amount		Accumulated Amortization		Net Carrying Amount
Mortgage servicing rights	$	39	$	(9)	$	30

In addition, there was an insignificant amount of non-mortgage and commercial servicing rights as of December 31, 2022 and 2021. Total mortgage servicing fees included in mortgage banking and title income were $4 million for the years ended December 31, 2022 and 2021 and $2 million for the year ended December 31, 2020. 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.