Investment Securities

9 Months Ended

Sep. 30, 2024

The following tables summarize FHN’s investment securities as of September 30, 2024 and December 31, 2023:


INVESTMENT SECURITIES AT SEPTEMBER 30, 2024
	September 30, 2024
(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:

Government agency issued MBS	$	4,754	$	5	$	(460)	$	4,299
Government agency issued CMO	2,530		1		(276)		2,255
Other U.S. government agencies	1,251		5		(122)		1,134

States and municipalities	598		1		(39)		560
Total securities available for sale (a)	$	9,133	$	12	$	(897)	$	8,248

Securities held to maturity:
Government agency issued MBS	$	814	$	—	$	(77)	$	737
Government agency issued CMO	468		—		(61)		407
Total securities held to maturity (a)	$	1,282	$	—	$	(138)	$	1,144

(a)Includes $7.2 billion of securities available for sale and $1.3 billion of securities held to maturity pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.


INVESTMENT SECURITIES AT DECEMBER 31, 2023
	December 31, 2023
(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:

Government agency issued MBS	$	5,061	$	2	$	(579)	$	4,484
Government agency issued CMO	2,487		—		(341)		2,146
Other U.S. government agencies	1,321		2		(151)		1,172

States and municipalities	627		3		(41)		589
Total securities available for sale (a)	$	9,496	$	7	$	(1,112)	$	8,391

Securities held to maturity:
Government agency issued MBS	$	852	$	—	$	(96)	$	756
Government agency issued CMO	471		—		(66)		405
Total securities held to maturity (a)	$	1,323	$	—	$	(162)	$	1,161

(a)Includes $7.6 billion of securities available for sale and $1.3 billion of securities held to maturity 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 September 30, 2024 is provided below:


DEBT SECURITIES PORTFOLIO MATURITIES
	Held to Maturity				Available for Sale
(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within 1 year	$	—	$	—	$	41	$	41
After 1 year through 5 years	—		—		123		117
After 5 years through 10 years	—		—		378		352
After 10 years	—		—		1,307		1,184
Subtotal	—		—		1,849		1,694
Government agency issued MBS and CMO (a)	1,282		1,144		7,284		6,554
Total	$	1,282	$	1,144	$	9,133	$	8,248

(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.

There were no sales of AFS securities for the three and nine months ended September 30, 2024 and 2023.

The following tables provide information on investments within the available-for-sale portfolio that had unrealized losses as of September 30, 2024 and December 31, 2023:

AFS INVESTMENT SECURITIES WITH UNREALIZED LOSSES


	As of September 30, 2024
	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	$	—	$	—	$	4,057	$	(460)	$	4,057	$	(460)
Government agency issued CMO	150		—		2,002		(276)		2,152		(276)
Other U.S. government agencies	—		—		909		(122)		909		(122)

States and municipalities	4		—		452		(39)		456		(39)
Total	$	154	$	—	$	7,420	$	(897)	$	7,574	$	(897)


	As of December 31, 2023
	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	$	140	$	(2)	$	4,231	$	(577)	$	4,371	$	(579)
Government agency issued CMO	32		—		2,098		(341)		2,130		(341)
Other U.S. government agencies	114		(2)		905		(149)		1,019		(151)

States and municipalities	14		—		465		(41)		479		(41)
Total	$	300	$	(4)	$	7,699	$	(1,108)	$	7,999	$	(1,112)

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 $28 million and $32 million as of September 30, 2024 and December 31, 2023, 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. There were no transfers to or from AFS or HTM during the three and nine month periods ended September 30, 2024 and 2023.

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 as of both September 30, 2024 and December 31, 2023. FHN has assessed the risk of credit loss and has determined that no allowance for credit losses for HTM securities was necessary as of September 30, 2024 and December 31, 2023. 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 $91 million and $89 million at September 30, 2024 and December 31, 2023, respectively. The year-to-date 2024 and 2023 gross amounts of upward and downward valuation adjustments were not significant.

Unrealized gains of $4 million and $11 million were recognized in the three and nine months ended September 30, 2024, respectively, for equity investments with readily determinable fair values. Unrealized gains of less than $1 million and $7 million were recognized in the three and nine months ended September 30, 2023, respectively, for equity investments with readily determinable fair values.