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Loans and Leases
 3 Months Ended
Mar. 31, 2022
Receivables [Abstract]  
Loans and Leases Loans and Leases
The loans 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 March 31, 2022 and December 31, 2021, excluding accrued interest of $134 million for both periods, which is included in other assets in the Consolidated Balance Sheets.
LOANS AND LEASES BY PORTFOLIO SEGMENT
(Dollars in millions)March 31, 2022December 31, 2021
Commercial:
Commercial and industrial (a) (b)$26,903 $26,550 
Loans to mortgage companies3,895 4,518 
   Total commercial, financial, and industrial 30,798 31,068 
Commercial real estate12,487 12,109 
Consumer:
HELOC1,894 1,964 
Real estate installment loans8,980 8,808 
   Total consumer real estate10,874 10,772 
Credit card and other853 910 
Loans and leases$55,012 $54,859 
Allowance for loan and lease losses(622)(670)
Net loans and leases$54,390 $54,189 
(a)Includes equipment financing leases of $867 million and $792 million as of March 31, 2022 and December 31, 2021, respectively.
(b)Includes PPP loans fully guaranteed by the SBA of $642 million and $1.0 billion as of March 31, 2022 and December 31, 2021, respectively.

Restrictions
Loans and leases with carrying values of $37.1 billion and $36.6 billion were pledged as collateral for borrowings at March 31, 2022 and December 31, 2021, 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, 2022, FHN had loans to mortgage companies of $3.9 billion and loans to finance and insurance companies of $3.6 billion. As a result, 24% 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, 2022 and December 31, 2021:
C&I PORTFOLIO
March 31, 2022
(Dollars in millions)20222021202020192018Prior to 2018LMC (a)Revolving
 Loans		Revolving
Loans Converted
to Term Loans (b)		Total
Credit Quality Indicator:
Pass (PD grades 1 through 12) (c)$1,445 $6,983 $3,529 $2,764 $1,045 $2,278 $3,895 $8,047 $12 $29,998 
Special Mention (PD grade 13)2 53 57 36 37 45 — 92 — 322 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)21 34 72 48 99 41 — 112 51 478 
Total C&I loans$1,468 $7,070 $3,658 $2,848 $1,181 $2,364 $3,895 $8,251 $63 $30,798 
December 31, 2021
(Dollars in millions)20212020201920182017Prior to 2017LMC (a)Revolving
 Loans		Revolving
Loans Converted
to Term Loans (b)		Total
Credit Quality Indicator:
Pass (PD grades 1 through 12) (c)$7,372 $3,576 $3,439 $1,455 $1,193 $2,267 $4,518 $6,386 $13 $30,219 
Special Mention (PD grade 13)25 39 50 48 36 43 — 100 4 345 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)24 61 67 103 24 48 — 129 48 504 
Total C&I loans$7,421 $3,676 $3,556 $1,606 $1,253 $2,358 $4,518 $6,615 $65 $31,068 
(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)    C&I loans were converted from revolving to term in 2022 and 2021 were not material.
(c)    Balances include PPP loans.

CRE PORTFOLIO
March 31, 2022
(Dollars in millions)20222021202020192018Prior to 2018Revolving
 Loans		Revolving Loans Converted to Term LoansTotal
Credit Quality Indicator:
Pass (PD grades 1 through 12) $1,224 $3,975 $2,837 $2,180 $538 $1,085 $264 $— $12,103 
Special Mention (PD grade 13)25 15 134 25 — 18 — — 217 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)1 89 24 15 2 25 11 — 167 
Total CRE loans$1,250 $4,079 $2,995 $2,220 $540 $1,128 $275 $— $12,487 
December 31, 2021
(Dollars in millions)20212020201920182017Prior to 2017Revolving
 Loans		Revolving Loans Converted to Term LoansTotal
Credit Quality Indicator:
Pass (PD grades 1 through 12)$3,441 $2,065 $2,514 $929 $691 $1,822 $204 $— $11,666 
Special Mention (PD grade 13)4 26 52 125 20 65 — — 292 
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)47 — 24 3 33 32 12 — 151 
Total CRE loans$3,492 $2,091 $2,590 $1,057 $744 $1,919 $216 $— $12,109 


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, 2022 and December 31, 2021. 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, 2022
(Dollars in millions)20222021202020192018Prior to 2018Revolving
 Loans		Revolving
Loans Converted
to Term Loans (a)		Total
FICO score 740 or greater$493 $2,004 $944 $657 $384 $1,885 $1,207 $112 $7,686 
FICO score 720-739101 268 137 83 45 212 136 24 1,006 
FICO score 700-71921 167 83 56 32 168 100 25 652 
FICO score 660-69991 197 109 95 58 224 121 41 936 
FICO score 620-65911 44 35 25 14 135 37 26 327 
FICO score less than 620 1 14 26 19 14 128 34 31 267 
Total$718 $2,694 $1,334 $935 $547 $2,752 $1,635 $259 $10,874 
December 31, 2021
(Dollars in millions)20212020201920182017Prior to 2017Revolving
 Loans		Revolving Loans Converted to Term Loans (a)Total
FICO score 740 or greater$1,594 $1,156 $825 $473 $394 $1,335 $1,086 $115 $6,978 
FICO score 720-739236 171 109 61 44 209 162 21 1,013 
FICO score 700-719143 112 81 68 45 153 141 23 766 
FICO score 660-699164 131 120 106 44 246 204 44 1,059 
FICO score 620-65942 36 55 23 13 118 66 27 380 
FICO score less than 620 26 84 42 32 45 272 42 33 576 
Total$2,205 $1,690 $1,232 $763 $585 $2,333 $1,701 $263 $10,772 
(a) $5 million and $43 million of HELOC loans were converted from revolving to term in 2022 and 2021, respectively.
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, 2022 and December 31, 2021.

CREDIT CARD & OTHER PORTFOLIO
March 31, 2022
(Dollars in millions)20222021202020192018Prior to 2018Revolving
 Loans		Revolving
Loans Converted
to Term Loans (a)		Total
FICO score 740 or greater$10 $61 $34 $33 $26 $89 $231 $17 $501 
FICO score 720-7392 12 3 4 2 8 39 3 73 
FICO score 700-7191 5 4 3 2 7 34 2 58 
FICO score 660-6991 8 4 4 4 13 115 3 152 
FICO score 620-6591 3 2 1 2 10 15 2 36 
FICO score less than 620 — 3 1 1 1 13 13 1 33 
Total$15 $92 $48 $46 $37 $140 $447 $28 $853 

December 31, 2021
(Dollars in millions)20212020201920182017Prior to 2017Revolving
 Loans		Revolving Loans Converted to Term Loans (a)Total
FICO score 740 or greater$56 $35 $29 $23 $13 $56 $200 $11 $423 
FICO score 720-73914 5 4 3 4 17 46 3 96 
FICO score 700-7198 5 4 4 3 17 42 1 84 
FICO score 660-69925 6 5 6 4 31 98 2 177 
FICO score 620-6594 3 2 4 3 18 22 1 57 
FICO score less than 620 24 3 3 4 4 16 18 1 73 
Total$131 $57 $47 $44 $31 $155 $426 $19 $910 
(a) $2 million and $9 million of other consumer loans were converted from revolving to term in 2022 and 2021, respectively.

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. In accordance with revised Interagency Guidance issued in 2020, FHN is not required to designate loans with deferrals granted in response to COVID-19 as past due because of such deferrals. If a borrower defers payment, this may result in no contractual payments being past due, and as such, loans would not be considered past due during the period of deferral, and as a result, are excluded from loans past due 30-89 days and loans 90+ days past due in the tables below.
The following table reflects accruing and non-accruing loans and leases by class on March 31, 2022 and December 31, 2021:
ACCRUING & NON-ACCRUING LOANS AND LEASES
March 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) $26,672 $72 $6 $26,750 $91 $27 $35 $153 $26,903 
Loans to mortgage companies3,895 — — 3,895 — — — — 3,895 
Total commercial, financial, and industrial30,567 72 6 30,645 91 27 35 153 30,798 
Commercial real estate:
CRE (b)12,427 49 — 12,476 7 1 3 11 12,487 
Consumer real estate:
HELOC (c)1,825 17 5 1,847 35 4 8 47 1,894 
Real estate installment loans (d)8,819 34 9 8,862 46 12 60 118 8,980 
Total consumer real estate10,644 51 14 10,709 81 16 68 165 10,874 
Credit card and other:
Credit card272 3 3 278 — — — — 278 
Other567 5 — 572 1 1 1 3 575 
Total credit card and other839 8 3 850 1 1 1 3 853 
Total loans and leases$54,477 $180 $23 $54,680 $180 $45 $107 $332 $55,012 
December 31, 2021
 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) $26,367 $53 $5 $26,425 $97 $1 $27 $125 $26,550 
Loans to mortgage companies4,518 — — 4,518 — — — — 4,518 
Total commercial, financial, and industrial30,885 53 5 30,943 97 1 27 125 31,068 
Commercial real estate:
CRE (b)12,087 13 — 12,100 6 1 2 9 12,109 
Consumer real estate:
HELOC (c)1,906 7 6 1,919 34 2 9 45 1,964 
Real estate installment loans (d)8,658 30 27 8,715 44 3 46 93 8,808 
Total consumer real estate10,564 37 33 10,634 78 5 55 138 10,772 
Credit card and other:
Credit card292 2 2 296 — — — — 296 
Other608 3 — 611 1 — 2 3 614 
Total credit card and other900 5 2 907 1 — 2 3 910 
Total loans and leases$54,436 $108 $40 $54,584 $182 $7 $86 $275 $54,859 
(a) $136 million and $99 million of C&I loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2022 and 2021, respectively.
(b) $11 million and $5 million of CRE loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2022 and 2021, respectively.
(c) $7 million of HELOC loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in both 2022 and 2021.
(d) $7 million and $50 million of real estate installment loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2022 and 2021, 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, 2022 and December 31, 2021, FHN had commercial loans with amortized cost of approximately $96 million and $120 million, respectively, that were based on the value of underlying collateral. Collateral-dependent C&I and CRE loans totaled $93 million and $3 million, respectively, at March 31, 2022. The collateral for these loans generally consists of business assets including land, buildings, equipment and financial assets. During the three months ended March 31, 2022, FHN recognized charge-offs of approximately $4 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 $20 million, respectively, as of both March 31, 2022 and December 31, 2021. Charge-offs during the three months ended March 31, 2022 and 2021 were not significant for collateral-dependent consumer loans.
Troubled Debt Restructurings
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. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated separately.
A modification is classified as a TDR if the borrower is experiencing financial difficulty and it is determined that
FHN has granted a concession to the borrower. 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. Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty. Concessions could include extension of the maturity date, reductions of the interest rate (which may make the rate lower than current market for a new loan with similar risk), reduction or forgiveness of accrued interest, or principal forgiveness. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty, and whether a concession has been granted, are subjective in nature and management’s judgment is required when determining whether a modification is classified as a TDR. In accordance with regulatory guidance, certain loan modifications that might ordinarily have qualified as TDRs were not accounted for as TDRs and have been excluded from the disclosures below. For loan modifications that were made during the year ended December 31, 2021 that met the TDR relief provisions outlined in either the CARES Act, as extended by the CAA, or revised Interagency Guidance, FHN has excluded these modifications from consideration as TDRs, and has excluded loans with these qualifying modifications from designation as TDRs in the information and discussion that follows.
On March 31, 2022 and December 31, 2021, FHN had $206 million of portfolio loans classified as TDRs for both periods. Additionally, $33 million and $35 million of loans held for sale as of March 31, 2022 and December 31, 2021, respectively, were classified as TDRs.
The following table presents the end of period balance for loans modified in a TDR during the periods indicated:
LOANS MODIFIED IN A TDR
 Three Months Ended March 31, 2022Three Months Ended March 31, 2021
(Dollars in millions)NumberPre-Modification Outstanding Recorded  InvestmentPost-Modification Outstanding Recorded  InvestmentNumberPre-Modification Outstanding Recorded  InvestmentPost-Modification Outstanding Recorded  Investment
C&I3 $— $— 17 $8 $8 
CRE— — — 1 12 10 
HELOC14 2 2 12 2 2 
Real estate installment loans86 16 16 9 2 2 
Credit card and other1 — — 13 — — 
Total TDRs104 $18 $18 52 $24 $22 
The following table presents TDRs which re-defaulted during the three months ended March 31, 2022 and 2021, 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
 Three Months Ended March 31, 2022Three Months Ended March 31, 2021
(Dollars in millions)NumberRecorded
Investment		NumberRecorded
Investment
C&I3 $— 7 $1 
CRE— — — — 
HELOC— — 1 — 
Real estate installment loans— — 3 2 
Credit card and other8 — — — 
Total TDRs11 $— 11 $3