Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Consolidated Statements of Income and Equity

The aggregate amount of income taxes included in the Consolidated Statements of Income and the Consolidated Statements of Changes in Equity for the years ended December 31, were as follows:

Table 8.14.1

INCOME TAX EXPENSE

(Dollars in millions)	2023		2022		2021
Consolidated Statements of Income:
Income tax expense	$	212	$	247	$	274
Consolidated Statements of Changes in Equity:
Income tax expense (benefit) related to:
Net unrealized gains (losses) on pension and other postretirement plans	(1)		(5)		2
Net unrealized gains (losses) on securities available for sale	44		(302)		(46)
Net unrealized gains (losses) on cash flow hedges	15		(42)		(3)
Total	$	270	$	(102)	$	227

Schedule of Components of Income Tax Expense/(Benefit)

The components of income tax expense (benefit) for the years ended December 31, were as follows:

Table 8.14.2

INCOME TAX EXPENSE COMPONENTS

(Dollars in millions)	2023		2022		2021
Current:
Federal	$	140	$	123	$	235
State	28		33		39
Deferred:
Federal	37		87		(1)
State	7		4		1
Total	$	212	$	247	$	274

Schedule of Computation of Income Tax Expense Differed from The Amounts Computed By Applying Statutory Federal Income Tax Rate To Income/(Loss) From Continuing Operations Before Income Taxes

A reconciliation of expected income tax expense (benefit) at the federal statutory rate of 21% for 2023, 2022, and 2021, respectively, to the total income tax expense follows:

Table 8.14.3

RECONCILIATION FROM STATUTORY RATES

(Dollars in millions)	2023			2022			2021
Federal income tax rate	21		%	21		%	21		%
Tax computed at statutory rate	$	237		$	243		$	270
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit	34			31			32
Bank-owned life insurance	(6)			(4)			(7)
Tax-exempt interest	(12)			(10)			(10)
FDIC premium	11			7			5
Non-deductible expenses	9			4			3
LIHTC credits and benefits, net of amortization	(15)			(16)			(14)
Other tax credits	(5)			(4)			(4)
Other changes in unrecognized tax benefits	(50)			(2)			4
Termination of BOLI policies	21			—			—
Other	(12)			(2)			(5)
Total	$	212		$	247		$	274

Schedule of Net DTA Balances Related to Income Tax Carryforwards

As of December 31, 2023, FHN had net deferred tax asset balances related to federal and state income tax carryforwards of $32 million and $3 million, respectively, which will expire at various dates as follows:

Table 8.14.4

TAX CARRYFORWARD DTA EXPIRATION DATES

(Dollars in millions)	Expiration Dates	Net Deferred Tax Asset Balance
Losses - federal	2028 - 2035	$	32
Net operating losses - states	2024 - 2033	2
Net operating losses - states	2034 - 2041	1

Schedule of Deferred Tax Assets and Liabilities

Temporary differences which gave rise to deferred tax assets and deferred tax liabilities on December 31, 2023 and 2022 were as follows:

Table 8.14.5

COMPONENTS OF DTAs & DTLs

(Dollars in millions)	2023		2022
Deferred tax assets:
Loan valuations and loss reserves	$	107	$	108
Employee benefits	128		93
Accrued expenses	21		22
Depreciation and amortization	37		24
Lease liability	85		91
Federal loss carryforwards	32		34
State loss carryforwards	3		2
Securities available for sale and financial instruments (a)	296		355
Other	28		32
Gross deferred tax assets	737		761
Deferred tax liabilities:
Equity investments	$	31	$	3
Other intangible assets	75		80
Prepaid expenses	20		17
ROU lease asset	76		82
Leasing	316		265
Other	4		1
Gross deferred tax liabilities	522		448
Net deferred tax assets	$	215	$	313

(a)    Tax effects of unrealized gains and losses are tracked on a security-by-security basis.

Schedule of Rollforward of Unrecognized Tax Benefits

The rollforward of unrecognized tax benefits is shown in the following table:

Table 8.14.6

ROLLFORWARD OF UNRECOGNIZED TAX BENEFITS

(Dollars in millions)
Balance at December 31, 2021	$	92
Increases related to prior year tax positions	3
Increases related to current year tax positions	1
Decreases related to prior year tax positions	(7)
Balance at December 31, 2022	$	89
Increases related to prior year tax positions	1
Increases related to current year tax positions	2
Settlements	(76)
Lapse of statutes	(1)
Balance at December 31, 2023	$	15