Mortgage Banking Activity

3 Months Ended

Mar. 31, 2025

FHN originates mortgage loans for sale into the secondary market. These loans primarily consist of residential first lien mortgages that conform to standards established by GSEs that are major investors in U.S. home mortgages, but may also consist of junior lien and jumbo loans secured by residential property. These loans are primarily sold to private companies that are unaffiliated with the GSEs on a servicing-released basis. Gains and losses on these mortgage loans are included in mortgage banking income on the Consolidated Statements of Income.

At March 31, 2025, FHN had approximately $30 million of loans that remained from pre-2009 mortgage business

operations of legacy First Horizon. Activity related to the pre-2009 mortgage loans was primarily limited to payments and write-offs in 2025 and 2024, with no new originations or loan sales, and only an insignificant amount of repurchases. These loans are excluded from the disclosure below.

The following table summarizes activity related to residential mortgage loans held for sale as of and for the three months ended March 31, 2025 and the year ended December 31, 2024.


MORTGAGE LOAN ACTIVITY
(Dollars in millions)	March 31, 2025		December 31, 2024
Balance at beginning of period	$	81	$	62

Originations and purchases	234		951
Sales, net of gains	(207)		(932)

Balance at end of period	$	108	$	81

Mortgage Servicing Rights

FHN records mortgage servicing rights at the lower of cost or market value and amortizes them over the remaining servicing life of the loans, with consideration given to prepayment assumptions.

Mortgage servicing rights are included in other assets on the Consolidated Balance Sheets. The following table presents the carrying values of mortgage servicing rights as of March 31, 2025 and December 31, 2024.


MORTGAGE SERVICING RIGHTS
	March 31, 2025						December 31, 2024
(Dollars in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Mortgage servicing rights	$	32	$	(10)	$	22		$	30	$	(9)	$	21

In addition, there was an insignificant amount of non-mortgage and commercial servicing rights as of March 31, 2025 and December 31, 2024. Total mortgage servicing fees included in mortgage banking income were $1 million for the three months ended March 31, 2025 and 2024.