XML 50 R11.htm IDEA: XBRL DOCUMENT v3.24.0.1
Loans and Leases
 12 Months Ended
Dec. 31, 2023
Receivables [Abstract]  
Loans and Leases Loans and Leases
The loan and lease 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 December 31, 2023 and 2022, excluding accrued interest of $287 million and $226 million, respectively, which is included in other assets in the Consolidated Balance Sheets.
Table 8.3.1
LOANS AND LEASES BY PORTFOLIO SEGMENT
December 31,
(Dollars in millions)20232022
Commercial:
Commercial and industrial (a) (b)$30,614 $29,523 
Loans to mortgage companies2,019 2,258 
   Total commercial, financial, and industrial32,633 31,781 
Commercial real estate14,216 13,228 
Consumer:
HELOC2,219 2,028 
Real estate installment loans11,431 10,225 
   Total consumer real estate13,650 12,253 
Credit card and other (c)793 840 
Loans and leases$61,292 $58,102 
Allowance for loan and lease losses(773)(685)
Net loans and leases$60,519 $57,417 
(a)Includes equipment financing leases of $1.2 billion and $1.1 billion as of December 31, 2023 and 2022, respectively.
(b)Includes PPP loans fully guaranteed by the SBA of $29 million and $76 million as of December 31, 2023 and 2022, respectively.
(c)Includes $180 million and $193 million of commercial credit card balances as of December 31, 2023 and 2022, respectively.

Restrictions
Loans and leases with carrying values of $46.1 billion and $38.3 billion were pledged as collateral for borrowings at December 31, 2023 and 2022, respectively.
Concentrations of Credit Risk
Most of the 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 December 31, 2023, FHN had loans to mortgage companies of $2.0 billion and loans to finance and insurance companies of $4.1 billion. As a result, 18% 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 commercial 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 table provides the amortized cost basis of the commercial loan portfolio by year of origination and credit quality indicator as of December 31, 2023 and 2022:
Table 8.3.2
C&I PORTFOLIO
December 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)$4,009 $5,638 $3,507 $1,636 $1,666 $3,449 $2,014 $9,087 $327 $31,333 
Special Mention (PD grade 13)75 60 64 56 101 57 — 186 — 599 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)41 135 94 51 39 100 5 187 49 701 
Total C&I loans$4,125 $5,833 $3,665 $1,743 $1,806 $3,606 $2,019 $9,460 $376 $32,633 

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)$7,456 $3,634 $1,803 $1,912 $1,112 $3,170 $2,258 $9,166 $371 $30,882 
Special Mention (PD grade 13)17 56 17 125 8 80 — 126 — 429 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)36 48 41 34 25 55 — 134 97 470 
Total C&I loans$7,509 $3,738 $1,861 $2,071 $1,145 $3,305 $2,258 $9,426 $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)    Includes PPP loans.
Table 8.3.3
CRE PORTFOLIO
December 31, 2023
(Dollars in millions)20232022202120202019Prior to 2019Revolving
 Loans		Revolving
Loans Converted
to Term Loans		Total
Credit Quality Indicator:
Pass (PD grades 1 through 12)$853 $3,473 $3,518 $1,162 $1,216 $2,853 $393 $18 $13,486 
Special Mention (PD grade 13)5 1 129 86 175 82 — — 478 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)— 2 5 11 175 59 — — 252 
Total CRE loans$858 $3,476 $3,652 $1,259 $1,566 $2,994 $393 $18 $14,216 
December 31, 2022
(Dollars in millions)20222021202020192018Prior to 2018Revolving
 Loans		Revolving
Loans Converted
to Term Loans		Total
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 December 31, 2023 and 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 table 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.
Table 8.3.4
CONSUMER REAL ESTATE PORTFOLIO
December 31, 2023
(Dollars in millions)20232022202120202019Prior to 2019Revolving LoansRevolving Loans Converted to Term Loans Total
FICO score 740 or greater$1,572 $2,099 $1,720 $730 $465 $1,332 $1,522 $50 $9,490 
FICO score 720-739205 286 227 107 88 230 192 15 1,350 
FICO score 700-719154 232 193 81 52 224 159 17 1,112 
FICO score 660-699170 198 113 83 53 290 168 18 1,093 
FICO score 620-65911 20 23 22 36 106 36 7 261 
FICO score less than 62018 19 15 20 12 225 24 11 344 
Total$2,130 $2,854 $2,291 $1,043 $706 $2,407 $2,101 $118 $13,650 
December 31, 2022
(Dollars in millions)20222021202020192018Prior to 2018Revolving LoansRevolving Loans Converted to Term LoansTotal
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 62015 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 table reflects the amortized cost basis by year of origination and refreshed FICO scores for credit card and other loans as of December 31, 2023 and 2022.
Table 8.3.5
CREDIT CARD & OTHER PORTFOLIO
December 31, 2023
(Dollars in millions)20232022202120202019Prior to 2019Revolving LoansRevolving Loans Converted to Term LoansTotal
FICO score 740 or greater$52 $26 $10 $5 $3 $27 $207 $5 $335 
FICO score 720-7395 3 1 1 1 5 24 1 41 
FICO score 700-7195 4 1 1 1 4 25 1 42 
FICO score 660-6994 3 1 1 1 8 23 — 41 
FICO score 620-6592 1 1 — — 3 7 — 14 
FICO score less than 62012 9 6 8 13 103 168 1 320 
Total$80 $46 $20 $16 $19 $150 $454 $8 $793 
December 31, 2022
(Dollars in millions)20222021202020192018Prior to 2018Revolving LoansRevolving Loans Converted to Term LoansTotal
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 6207 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 December 31, 2023 and 2022:
Table 8.3.6
ACCRUING & NON-ACCRUING LOANS & LEASES
December 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) $30,403 $31 $1 $30,435 $108 $18 $53 $179 $30,614 
Loans to mortgage companies2,013 1 — 2,014 5 — — 5 2,019 
Total commercial, financial, and industrial32,416 32 1 32,449 113 18 53 184 32,633 
Commercial real estate:
CRE (b)14,072 8 — 14,080 41 — 95 136 14,216 
Consumer real estate:
HELOC (c)2,158 11 4 2,173 30 6 10 46 2,219 
Real estate installment loans (d)11,295 29 13 11,337 43 6 45 94 11,431 
Total consumer real estate13,453 40 17 13,510 73 12 55 140 13,650 
Credit card and other:
Credit card271 3 3 277 — — — — 277 
Other512 2 — 514 1 — 1 2 516 
Total credit card and other783 5 3 791 1 — 1 2 793 
Total loans and leases$60,724 $85 $21 $60,830 $228 $30 $204 $462 $61,292 
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)    $178 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)    $129 million and $5 million of CRE loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance for 2023 and 2022, respectively.
(c)    $4 million and $5 million of HELOC loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance for 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 for 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 December 31, 2023 and 2022, FHN had commercial loans with amortized cost of approximately $250 million and $124 million, respectively, that were based on the value of underlying collateral. Collateral-dependent C&I and CRE loans totaled $117 million and $133 million, respectively, at December 31, 2023. The collateral for these loans generally consists of business assets including land, buildings, equipment and financial assets. During the years ended December 31, 2023 and 2022, FHN recognized total charge-offs of approximately $144 million and $10 million, respectively, 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 $6 million and $27 million, respectively, as of December 31, 2023, and $7 million and $26 million, respectively, as of December 31, 2022. Charge-offs were $1 million for collateral-dependent consumer loans during the year ended December 31, 2023, and $2 million during the year ended December 31, 2022.
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 December 31, 2023:

Table 8.3.7
LOAN MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY
December 31, 2023
Interest Rate Reduction
(Dollars in millions)Balance% of Total ClassFinancial Effect
Consumer real estate$2 — %
Reduced weighted-average contractual interest rate from 8.60% to 5.00%
Credit card and other (a)— — 
Reduced weighted-average contractual interest rate from 11.20% to 0.00%
Total$2 — %
December 31, 2023
Term Extension
(Dollars in millions)Balance% of Total ClassFinancial Effect
C&I$90 0.3 %
Added a weighted-average 1 year to the life of loans, which reduced monthly payment amounts for the borrowers
CRE40 0.3 
Added a weighted-average 0.8 year to the life of loans, which reduced monthly payment amounts for the borrowers
Consumer real estate2 — 
Added a weighted-average 12 years to the life of loans, which reduced monthly payment amounts for the borrowers
Total$132 0.2 %
December 31, 2023
Principal Forgiveness
(Dollars in millions)Balance% of Total ClassFinancial Effect
Consumer real estate$2 — %
$1.3 million of the principal of consumer loans was legally discharged in bankruptcy during the period and the borrowers have not re-affirmed the debt as of period end
Total$2 — %
December 31, 2023
Payment Deferrals
(Dollars in millions)Balance% of Total ClassFinancial Effect
Consumer real estate$3 — %
Payment deferral for 11 months, with a balloon payment at the end of the term
Total$3 — %
December 31, 2023
Combination - Term Extension and Interest Rate Reduction
(Dollars in millions)Balance% of Total ClassFinancial Effect
C&I (a)$— — %
Added a weighted-average 1.2 years to the life of loans and reduced weighted-average contractual interest rate from 13.00% to 11.50%
Consumer real estate6 — 
Added a weighted-average 14.3 years to the life of loans and reduced weighted-average contractual interest rate from 5.00% to 4.70%
Total$6 — %
December 31, 2023
Combination - Term Extension, Interest Rate Reduction, and Interest Forgiveness
(Dollars in millions)Balance% of Total ClassFinancial Effect
C&I$2 — %
Added a weighted-average 3.7 years to the life of loans, reduced weighted-average contractual interest rate from 11.25% to 7.50% and provided less than $1 million in interest forgiveness
Total$2 — %
December 31, 2023
Combination - Term Extension, Interest Rate Reduction, and Interest Deferrals
(Dollars in millions)Balance% of Total ClassFinancial Effect
CRE$15 0.1 %
Added a weighted-average 1 year to the life of loans, reduced weighted-average contractual interest rate from 8.65% to 8.00% and provided less than $1 million in deferred interest
Total$15 — %
(a) Balance less than $1 million.
The balance of loan modifications to borrowers experiencing financial difficulty that had a payment default during the period totaled $28 million as of December 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:
Table 8.3.8
PERFORMANCE OF LOANS THAT HAVE BEEN MODIFIED IN THE LAST 12 MONTHS
December 31, 2023
(Dollars in millions)Current30-89 Days Past Due90+ Days Past DueNon-Accruing
C&I$70 $— $— $22 
CRE8 — — 47 
Consumer real estate4 — — 11 
Credit card and other— — — — 
Total$82 $— $— $80 
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:
Table 8.3.9
LOANS MODIFIED IN A TDR
 Year Ended December 31, 2022
(Dollars in millions)NumberPre-Modification
Outstanding
Recorded Investment		Post-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.
Table 8.3.10
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