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Loans and Leases
 3 Months Ended
Mar. 31, 2023
Receivables [Abstract]  
Loans and Leases Loans and Leases
The loans and leases portfolio is disaggregated into portfolio segments and then further disaggregated into classes for certain disclosures. GAAP defines a portfolio segment as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. A class is generally a disaggregation of a portfolio segment and is generally determined based on risk characteristics of the loan and FHN’s method for monitoring and assessing credit risk and performance. FHN's loan and lease portfolio segments are commercial and consumer. The classes of loans and leases are: (1) commercial, financial, and industrial, which
includes commercial and industrial loans and leases and loans to mortgage companies, (2) commercial real estate, (3) consumer real estate, which includes both real estate installment and home equity lines of credit, and (4) credit card and other.
The following table provides the amortized cost basis of loans and leases by portfolio segment and class as of March 31, 2023 and December 31, 2022, excluding accrued interest of $227 million and $226 million, respectively, which is included in other assets in the Consolidated Balance Sheets.
LOANS AND LEASES BY PORTFOLIO SEGMENT
(Dollars in millions)March 31, 2023December 31, 2022
Commercial:
Commercial and industrial (a) (b)$30,132 $29,523 
Loans to mortgage companies2,040 2,258 
   Total commercial, financial, and industrial 32,172 31,781 
Commercial real estate13,398 13,228 
Consumer:
HELOC2,114 2,028 
Real estate installment loans10,554 10,225 
   Total consumer real estate12,668 12,253 
Credit card and other807 840 
Loans and leases$59,045 $58,102 
Allowance for loan and lease losses(715)(685)
Net loans and leases$58,330 $57,417 
(a)Includes equipment financing leases of $1.1 billion for March 31, 2023 and December 31, 2022.
(b)Includes PPP loans fully guaranteed by the SBA of $53 million and $76 million as of March 31, 2023 and December 31, 2022, respectively.

Restrictions
Loans and leases with carrying values of $39.6 billion and $38.3 billion were pledged as collateral for borrowings at March 31, 2023 and December 31, 2022, respectively.
Concentrations of Credit Risk
Most of FHN’s business activity is with clients located in the southern United States. FHN’s lending activity is concentrated in its market areas within those states. As of March 31, 2023, FHN had loans to mortgage companies of $2.0 billion and loans to finance and insurance companies of $4.2 billion. As a result, 19% of the C&I portfolio is sensitive to impacts on the financial services industry.
Credit Quality Indicators
FHN employs a dual grade commercial risk grading methodology to assign an estimate for the probability of default and the loss given default for each commercial loan using factors specific to various industry, portfolio, or product segments that result in a rank ordering of risk and
the assignment of grades PD 1 to PD 16. This credit grading system is intended to identify and measure the credit quality of the loan and lease portfolio by analyzing the migration between grading categories. It is also integral to the estimation methodology utilized in determining the ALLL since an allowance is established for pools of commercial loans based on the credit grade assigned. Each PD grade corresponds to an estimated one-year default probability percentage. PD grades are continually evaluated but require a formal scorecard annually.
PD 1 through PD 12 are “pass” grades. PD grades 13-16 correspond to the regulatory-defined categories of special mention (13), substandard (14), doubtful (15), and loss (16). Special mention loans and leases have potential weaknesses that, if left uncorrected, may result in deterioration of FHN's credit position at some future date. Substandard commercial loans and leases have well-defined weaknesses and are characterized by the distinct possibility that FHN will sustain some loss if the
deficiencies are not corrected. Doubtful commercial loans and leases have the same weaknesses as substandard loans and leases with the added characteristics that the probability of loss is high, and collection of the full amount is improbable.
The following tables provide the amortized cost basis of the commercial loan portfolio by year of origination and credit quality indicator as of March 31, 2023 and December 31, 2022:
C&I PORTFOLIO
March 31, 2023
(Dollars in millions)20232022202120202019Prior to 2019LMC (a)Revolving
 Loans		Revolving
Loans Converted
to Term Loans		Total
Credit Quality Indicator:
Pass (PD grades 1 through 12) (b)$893 $5,814 $3,977 $1,800 $1,995 $4,717 $2,040 $9,411 $351 $30,998 
Special Mention (PD grade 13)1 24 59 17 128 87 — 177 1 494 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)36 34 57 132 43 189 — 104 85 680 
Total C&I loans$930 $5,872 $4,093 $1,949 $2,166 $4,993 $2,040 $9,692 $437 $32,172 
December 31, 2022
(Dollars in millions)20222021202020192018Prior to 2018LMC (a)Revolving
 Loans		Revolving
Loans Converted
to Term Loans		Total
Credit Quality Indicator:
Pass (PD grades 1 through 12) (b)$5,856 $4,040 $1,980 $2,099 $1,229 $3,710 $2,258 $9,165 $371 $30,708 
Special Mention (PD grade 13)19 63 19 141 9 90 — 126 — 467 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)41 54 51 38 67 124 — 134 97 606 
Total C&I loans$5,916 $4,157 $2,050 $2,278 $1,305 $3,924 $2,258 $9,425 $468 $31,781 
(a)    LMC includes non-revolving commercial lines of credit to qualified mortgage companies primarily for the temporary warehousing of eligible mortgage loans prior to the borrower's sale of those mortgage loans to third-party investors. The loans are of short duration with maturities less than one year.
(b)    Balances include PPP loans.

CRE PORTFOLIO
March 31, 2023
(Dollars in millions)20232022202120202019Prior to 2019Revolving
 Loans		Revolving Loans Converted to Term LoansTotal
Credit Quality Indicator:
Pass (PD grades 1 through 12) $240 $2,846 $3,442 $1,386 $1,704 $3,251 $233 $19 $13,121 
Special Mention (PD grade 13)— — 1 2 85 57 — — 145 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)— 1 4 11 48 59 9 — 132 
Total CRE loans$240 $2,847 $3,447 $1,399 $1,837 $3,367 $242 $19 $13,398 
December 31, 2022
(Dollars in millions)20222021202020192018Prior to 2018Revolving
 Loans		Revolving Loans Converted to Term LoansTotal
Credit Quality Indicator:
Pass (PD grades 1 through 12)$2,637 $3,324 $1,488 $1,855 $808 $2,565 $274 $20 $12,971 
Special Mention (PD grade 13)— 3 3 37 68 5 1 — 117 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)1 4 12 50 31 31 11 — 140 
Total CRE loans$2,638 $3,331 $1,503 $1,942 $907 $2,601 $286 $20 $13,228 

The consumer portfolio is comprised primarily of smaller-balance loans which are very similar in nature in that most are standard products and are backed by residential real estate. Because of the similarities of consumer loan types, FHN is able to utilize the FICO score, among other attributes, to assess the credit quality of consumer borrowers. FICO scores are refreshed on a quarterly basis in an attempt to reflect the recent risk profile of the borrowers. Accruing delinquency amounts are indicators of asset quality within the credit card and other consumer portfolio.
The following table reflects the amortized cost basis by year of origination and refreshed FICO scores for
consumer real estate loans as of March 31, 2023 and December 31, 2022. Within consumer real estate, classes include HELOC and real estate installment loans. HELOCs are loans which during their draw period are classified as revolving loans. Once the draw period ends and the loan enters its repayment period, the loan converts to a term loan and is classified as a revolving loan converted to a term loan. All loans classified in the following tables as revolving loans or revolving loans converted to term loans are HELOCs. Real estate installment loans are originated as fixed term loans and are classified below in their vintage year. All loans in the following tables classified in a vintage year are real estate installment loans.

CONSUMER REAL ESTATE PORTFOLIO
March 31, 2023
(Dollars in millions)20232022202120202019Prior to 2019Revolving
 Loans		Revolving
Loans Converted
to Term Loans		Total
FICO score 740 or greater$397 $2,157 $1,822 $800 $512 $1,516 $1,383 $60 $8,647 
FICO score 720-73945 292 245 114 97 258 184 17 1,252 
FICO score 700-71934 241 202 92 54 249 151 21 1,044 
FICO score 660-69942 207 136 88 55 328 192 21 1,069 
FICO score 620-6591 21 24 25 40 120 45 8 284 
FICO score less than 620 2 15 19 31 12 261 18 14 372 
Total$521 $2,933 $2,448 $1,150 $770 $2,732 $1,973 $141 $12,668 
December 31, 2022
(Dollars in millions)20222021202020192018Prior to 2018Revolving
 Loans		Revolving Loans Converted to Term Loans Total
FICO score 740 or greater$2,154 $1,847 $819 $523 $278 $1,294 $1,297 $63 $8,275 
FICO score 720-739292 246 116 98 34 238 183 18 1,225 
FICO score 700-719242 206 93 55 35 226 142 22 1,021 
FICO score 660-699214 137 90 55 62 278 192 23 1,051 
FICO score 620-65921 24 25 41 20 105 47 9 292 
FICO score less than 620 15 19 32 12 23 256 16 16 389 
Total$2,938 $2,479 $1,175 $784 $452 $2,397 $1,877 $151 $12,253 

The following tables reflect the amortized cost basis by year of origination and refreshed FICO scores for credit card and other loans as of March 31, 2023 and December 31, 2022.

CREDIT CARD & OTHER PORTFOLIO
March 31, 2023
(Dollars in millions)20232022202120202019Prior to 2019Revolving
 Loans		Revolving
Loans Converted
to Term Loans 		Total
FICO score 740 or greater$8 $31 $14 $6 $7 $28 $252 $8 $354 
FICO score 720-7391 3 2 2 1 4 33 1 47 
FICO score 700-7191 3 3 1 1 4 28 — 41 
FICO score 660-699— 3 1 1 1 8 31 1 46 
FICO score 620-659— 1 2 — — 2 14 — 19 
FICO score less than 620 2 7 6 6 10 85 183 1 300 
Total$12 $48 $28 $16 $20 $131 $541 $11 $807 

December 31, 2022
(Dollars in millions)20222021202020192018Prior to 2018Revolving
 Loans		Revolving Loans Converted to Term Loans Total
FICO score 740 or greater$36 $14 $10 $10 $4 $25 $291 $6 $396 
FICO score 720-7393 2 2 1 — 4 30 1 43 
FICO score 700-7193 3 1 1 — 4 33 1 46 
FICO score 660-6993 2 1 1 2 7 30 1 47 
FICO score 620-6591 3 1 — — 3 18 — 26 
FICO score less than 620 7 6 6 10 7 71 174 1 282 
Total$53 $30 $21 $23 $13 $114 $576 $10 $840 
Nonaccrual and Past Due Loans and Leases
Loans and leases are placed on nonaccrual if it becomes evident that full collection of principal and interest is at risk, impairment has been recognized as a partial charge-off of principal balance due to insufficient collateral value and past due status, or on a case-by-case basis if FHN continues to receive payments but there are other borrower-specific issues. Included in nonaccrual are loans
for which FHN continues to receive payments including residential real estate loans where the borrower has been discharged of personal obligation through bankruptcy.
Past due loans are loans contractually past due as to interest or principal payments, but which have not yet been put on nonaccrual status.

The following table reflects accruing and non-accruing loans and leases by class on March 31, 2023 and December 31, 2022:
ACCRUING & NON-ACCRUING LOANS AND LEASES
March 31, 2023
 AccruingNon-Accruing 
(Dollars in millions)Current30-89
Days
Past Due		90+
Days
Past Due		Total
Accruing		Current30-89
Days
Past Due		90+
Days
Past Due		Total
Non-
Accruing		Total
Loans and Leases
Commercial, financial, and industrial:
C&I (a) $29,902 $26 $— $29,928 $127 $6 $71 $204 $30,132 
Loans to mortgage companies2,040 — — 2,040 — — — — 2,040 
Total commercial, financial, and industrial31,942 26 — 31,968 127 6 71 204 32,172 
Commercial real estate:
CRE (b)13,330 5 — 13,335 19 26 18 63 13,398 
Consumer real estate:
HELOC (c)2,049 15 5 2,069 33 5 7 45 2,114 
Real estate installment loans (d)10,415 27 2 10,444 56 12 42 110 10,554 
Total consumer real estate12,464 42 7 12,513 89 17 49 155 12,668 
Credit card and other:
Credit card286 4 5 295 — — — — 295 
Other508 2 — 510 1 1 — 2 512 
Total credit card and other794 6 5 805 1 1 — 2 807 
Total loans and leases$58,530 $79 $12 $58,621 $236 $50 $138 $424 $59,045 
December 31, 2022
 AccruingNon-Accruing 
(Dollars in millions)Current30-89
Days
Past Due		90+
Days
Past Due		Total
Accruing		Current30-89
Days
Past Due		90+
Days
Past Due		Total
Non-
Accruing		Total
Loans and Leases
Commercial, financial, and industrial:
C&I (a) $29,309 $50 $11 $29,370 $64 $10 $79 $153 $29,523 
Loans to mortgage companies2,258 — — 2,258 — — — — 2,258 
Total commercial, financial, and industrial31,567 50 11 31,628 64 10 79 153 31,781 
Commercial real estate:
CRE (b)13,208 11 — 13,219 7 — 2 9 13,228 
Consumer real estate:
HELOC (c)1,967 12 5 1,984 32 4 8 44 2,028 
Real estate installment loans (d)10,079 25 13 10,117 56 5 47 108 10,225 
Total consumer real estate12,046 37 18 12,101 88 9 55 152 12,253 
Credit card and other:
Credit card287 5 4 296 — — — — 296 
Other540 2 — 542 1 — 1 2 544 
Total credit card and other827 7 4 838 1 — 1 2 840 
Total loans and leases$57,648 $105 $33 $57,786 $160 $19 $137 $316 $58,102 
(a) $204 million and $147 million of C&I loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2023 and 2022, respectively.
(b) $55 million and $5 million of CRE loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2023 and 2022, respectively.
(c) $7 million and $5 million of HELOC loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2023 and 2022, respectively.
(d) $10 million and $7 million of real estate installment loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2023 and 2022, respectively.

Collateral-Dependent Loans
Collateral-dependent loans are defined as loans for which repayment is expected to be derived substantially through the operation or sale of the collateral and where the borrower is experiencing financial difficulty. At a minimum, the estimated value of the collateral for each loan equals the current book value.
As of March 31, 2023 and December 31, 2022, FHN had commercial loans with amortized cost of approximately $256 million and $124 million, respectively, that were based on the value of underlying collateral. Collateral-dependent C&I and CRE loans totaled $199 million and $57 million, respectively, at March 31, 2023. The collateral for these loans generally consists of business assets including land, buildings, equipment and financial assets. During the three months ended March 31, 2023, FHN recognized charge-offs of $12 million on these loans related to reductions in estimated collateral values.
Consumer HELOC and real estate installment loans with amortized cost based on the value of underlying real estate collateral were approximately $7 million and $29 million, respectively, as of March 31, 2023 and $7 million and $26 million, respectively, as of December 31, 2022. Charge-offs during the three months ended March 31, 2023 and March 31, 2022 were not significant for collateral-dependent consumer loans.
Loan Modifications to Troubled Borrowers
As part of FHN’s ongoing risk management practices, FHN attempts to work with borrowers when necessary to extend or modify loan terms to better align with their current ability to repay. Modifications could include extension of the maturity date, reductions of the interest rate, reduction or forgiveness of accrued interest, or principal forgiveness. Combinations of these modifications may also be made for individual loans. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Principal reductions may be made in limited circumstances, typically for specific commercial loan workouts, and in the event of borrower bankruptcy. Each occurrence is unique to the borrower and is evaluated separately.
Troubled loans are considered those in which the borrower is experiencing financial difficulty. The assessment of whether a borrower is experiencing financial difficulty can be subjective in nature and management’s judgment may be required in making this determination. FHN may determine that a borrower is experiencing financial difficulty if the borrower is currently in default on any of its debt, or if it is probable that a borrower may default in the foreseeable future absent a
modification. Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty.
Troubled commercial loans are typically modified through forbearance agreements which could include reduced interest rates, reduced payments, term extension, or entering into short sale agreements. Principal reductions may occur in specific circumstances.
Modifications for troubled consumer loans are generally structured using parameters of U.S. government-sponsored programs. For HELOC and real estate installment loans, troubled loans are typically modified by an interest rate reduction and a possible maturity date extension to reach an affordable housing debt-to-income ratio. Despite the absence of a loan modification by FHN, the discharge of personal liability through bankruptcy proceedings is considered a court-imposed modification.
For the credit card portfolio, troubled loan modifications are typically enacted through either a short-term credit card hardship program or a longer-term credit card workout program. In the credit card hardship program, borrowers may be granted rate and payment reductions for six months to one year. In the credit card workout program, borrowers are granted a rate reduction to 0% and a term extension for up to five years.
Modifications to Borrowers Experiencing Financial Difficulty
For periods subsequent to December 31, 2022, information regarding loans modified when a borrower is experiencing financial difficulty are included in the tables below.
The following tables present the amortized cost basis at the end of the reporting period of loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of modification made, as well as the financial effect of the modifications made as of March 31, 2023.














LOAN MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY
March 31, 2023
Term Extension
(Dollars in millions)Balance% of Total ClassFinancial Effect
C&I$63 0.2 %
Added a weighted-average 1 year to the life of loans, which reduced monthly payment amounts for the borrowers
CRE32 0.2 
Added a weighted-average 0.6 years to the life of loans, which reduced monthly payment amounts for the borrowers
Consumer Real Estate1 — 
Added a weighted-average 14.9 years to the life of loans, which reduced monthly payment amounts for the borrowers
Credit Card and Other— — N/A
Total$96 0.2 %

March 31, 2023
Payment Deferrals
(Dollars in millions)Balance% of Total ClassFinancial Effect
C&I$— — %N/A
CRE— — N/A
Consumer Real Estate4 — 
Payment deferral for 11 months, with a balloon payment at the end of the term
Credit Card and Other— — N/A
Total$4 — %

March 31, 2023
Combination - Term Extension and Interest Rate Reduction
(Dollars in millions)Balance% of Total Class Financial Effect
C&I$— — %N/A
CRE— — N/A
Consumer Real Estate2 — 
Added a weighted-average 8.8 years to the life of loans and reduced weighted-average contractual interest rate from 5.0% to 4.9%
Credit Card and Other— — N/A
Total$2 — %

March 31, 2023
Combination - Principal Forgiveness and Term Extension
(Dollars in millions)Balance% of Total Class Financial Effect
C&I$18 0.1 %
Reduced the balance of the loans by $2 million and added a weighted-average 6.2 years to the life of loans
CRE— — N/A
Consumer Real Estate— — N/A
Credit Card and Other— — N/A
Total$18 — %
Loan modifications to borrowers experiencing financial difficulty that had a payment default during the period were insignificant as of March 31, 2023. FHN closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.
The following table depicts the performance of loans that have been modified in the last 12 months:

PERFORMANCE OF LOANS THAT HAVE BEEN MODIFIED IN THE LAST 12 MONTHS
March 31, 2023
(Dollars in millions)Current30-89 Days Past Due90+ Days Past DueNon-Accruing
C&I$63 $— $— $18 
CRE32 — — — 
Consumer Real Estate1 — — 6 
Credit Card and Other— — — — 
Total$96 $— $— $24 
Troubled Debt Restructurings

Prior to January 1, 2023, a modification was classified as a TDR if the borrower was experiencing financial difficulty and it was determined that FHN granted a concession to the borrower. Concessions represented modifications that FHN would not otherwise consider if a borrower had not been experiencing financial difficulty. Evaluation of whether a concession was granted, was subjective in nature and management’s judgment was required in making the determination of whether a modification was
classified as a TDR. All non-reaffirmed residential real estate loans discharged in Chapter 7 bankruptcy were considered concessions and classified as nonaccruing TDRs.

On December 31, 2022, FHN had $180 million of portfolio loans classified as TDRs. Additionally, $30 million of loans held for sale as of December 31, 2022 were classified as TDRs.

The following table presents the end of period balance for loans modified in a TDR during the year ended December 31, 2022:
LOANS MODIFIED IN A TDR
 Year Ended December 31, 2022
(Dollars in millions)NumberPre-Modification Outstanding Recorded  InvestmentPost-Modification Outstanding Recorded  Investment
C&I6 $30 $24 
CRE1 1 1 
HELOC98 7 7 
Real estate installment loans181 41 41 
Credit card and other81 12 12 
Total TDRs367 $91 $85 
The following table presents TDRs which re-defaulted during 2022 and as to which the modification occurred 12 months or less prior to the re-default. For purposes of this disclosure, FHN generally defines payment default as 30 or more days past due.
LOANS MODIFIED IN A TDR THAT RE-DEFAULTED
 Year Ended December 31, 2022
(Dollars in millions)NumberRecorded
Investment
C&I5 $— 
CRE— — 
HELOC22 1 
Real estate installment loans54 15 
Credit card and other17 — 
Total TDRs98 $16