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Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2025
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
Management's estimate of expected credit losses in the loan and lease portfolios is recorded in the ALLL and the reserve for unfunded lending commitments, collectively referred to as the Allowance for Credit Losses, or the ACL. The ALLL and the reserve for unfunded lending commitments are reported on the Consolidated Balance Sheets in the allowance for loan and lease losses and in other liabilities, respectively. Provisions for credit losses related to loans and leases and unfunded lending commitments are reported in the Consolidated Statements of Income as provision for credit losses.
The ACL is maintained at a level management believes to be appropriate to absorb expected credit losses over the contractual life of the loan and lease portfolio and unfunded lending commitments. The determination of the ACL is based on periodic evaluation of the loan and lease portfolios and unfunded lending commitments considering a number of relevant underlying factors, including key assumptions and evaluation of quantitative and qualitative information.
The expected loan losses are the product of multiplying FHN’s estimates of probability of default ("PD"), loss given default ("LGD"), and individual loan level exposure at default ("EAD"), including amortization and prepayment assumptions, on an undiscounted basis. FHN uses models or assumptions to develop the expected loss forecasts, which incorporate multiple macroeconomic forecasts over a reasonable and supportable forecast period of at most three years. After the reasonable and supportable forecast period, the Company reverts to its historical loss averages, evaluated over the historical observation period, for the remaining estimated life of the loans. In order to capture the unique risks of the loan portfolio within the PD, LGD, and prepayment models, FHN segments the portfolio into pools, generally incorporating loan grades for commercial loans. As there can be no certainty that actual economic performance will precisely follow any specific macroeconomic forecast, FHN uses qualitative adjustments where current loan characteristics or current or forecasted economic conditions differ from historical periods.
The evaluation of quantitative and qualitative information is performed through assessments of groups of assets that share similar risk characteristics and certain individual loans and leases that do not share similar risk characteristics with the collective group. As described in Note 3 - Loans and Leases, loans are grouped generally by product type and significant loan portfolios are assessed for credit losses using analytical or statistical models. The quantitative component utilizes economic forecast information as its foundation and is primarily based on analytical models that use known or estimated data as of the balance sheet date and forecasted data over the reasonable and supportable period. The ACL is also
affected by qualitative factors that FHN considers to reflect current judgment of various events and risks that are not measured in the quantitative calculations, including alternative economic forecasts.
In accordance with its accounting policy elections, FHN does not recognize a separate allowance for expected credit losses for AIR and records reversals of AIR as reductions of interest income. FHN reverses previously accrued but uncollected interest when an asset is placed on nonaccrual status. AIR and the related allowance for expected credit losses are included as components of other assets. The total amounts of interest reversals from loans placed on nonaccrual status and the amounts of income recognized on nonaccrual loans during the three and six months ended June 30, 2025 and 2024 were not material.
Expected credit losses for unfunded commitments are estimated for periods where the commitment is not unconditionally cancellable. The measurement of expected credit losses for unfunded commitments mirrors that of loans and leases with the additional estimate of future draw rates (timing and amount).
The ACL balance as of June 30, 2025, as compared to December 31, 2024, is largely reflective of deterioration in macroeconomic forecasts and emerging concerns around potential economic instability, offset by lower criticized balances in the CRE portfolio. In developing credit loss estimates for its loan and lease portfolios, FHN utilized multiple scenarios for its macroeconomic inputs, including a baseline scenario, an upside scenario, and a downside scenario from Moody’s. As of June 30, 2025, among other things, FHN's scenario selection process factored in the outlook for production, inflation, interest rates, employment, real estate prices, and the uncertainty around tariff policy. FHN selected one scenario as its base case, which was the Moody's baseline scenario. The heaviest weight was placed on this scenario. Smaller weights were placed on the FHN-selected downside scenario and on the FHN-selected upside scenario.

Management also made qualitative adjustments to reflect estimated recoveries based on a review of prior charge-off and recovery levels, for default risk associated with large balances with individual borrowers, for estimated loss amounts not reflected in historical factors due to specific portfolio risk or identified model limitations, and for instances where limited data for acquired loans is considered to affect modeled results.
The following table provides a rollforward of the ALLL and the reserve for unfunded lending commitments by portfolio type for the three and six months ended June 30, 2025 and 2024.

ROLLFORWARD OF ALLL & RESERVE FOR UNFUNDED LENDING COMMITMENTS
(Dollars in millions)Commercial, Financial, and IndustrialCommercial Real EstateConsumer Real EstateCredit Card and OtherTotal
Three Months Ended June 30, 2025
Allowance for loan and lease losses:
Balance as of April 1, 2025$345 $225 $230 $22 $822 
Charge-offs(28)(7)(2)(6)(43)
Recoveries6 — 1 2 9 
Provision for loan and lease losses 24 (5)4 3 26 
Balance as of June 30, 2025$347 $213 $233 $21 $814 
Reserve for remaining unfunded commitments:
Balance as of April 1, 2025$63 $9 $11 $— $83 
Provision for remaining unfunded commitments 5 1 (2)— 4 
Balance as of June 30, 202568 10 9 — 87 
Allowance for credit losses as of June 30, 2025$415 $223 $242 $21 $901 
Three Months Ended June 30, 2024
Allowance for loan and lease losses:
Balance as of April 1, 2024$348 $181 $231 $27 $787 
Charge-offs(24)(19)(1)(5)(49)
Recoveries 12 — 2 1 15 
Provision for loan and lease losses 8 59 (1)2 68 
Balance as of June 30, 2024$344 $221 $231 $25 $821 
Reserve for remaining unfunded commitments:
Balance as of April 1, 2024$49 $18 $12 $— $79 
Provision for remaining unfunded commitments (5)(8)— — (13)
Balance as of June 30, 202444 10 12 — 66 
Allowance for credit losses as of June 30, 2024$388 $231 $243 $25 $887 
(Dollars in millions)Commercial, Financial, and IndustrialCommercial Real EstateConsumer Real EstateCredit Card and OtherTotal
Six Months Ended June 30, 2025
Allowance for loan and lease losses:
Balance as of January 1, 2025$345 $227 $221 $22 $815 
Charge-offs(62)(10)(2)(10)(84)
Recoveries12 3 3 3 21 
Provision for loan and lease losses52 (7)11 6 62 
Balance as of June 30, 2025$347 $213 $233 $21 $814 
Reserve for remaining unfunded commitments:
Balance as of January 1, 2025$57 $11 $11 $— $79 
Provision for remaining unfunded commitments 11 (1)(2)— 8 
Balance as of June 30, 202568 10 9 — 87 
Allowance for credit losses as of June 30, 2025$415 $223 $242 $21 $901 
Six Months Ended June 30, 2024
Allowance for loan and lease losses:
Balance as of January 1, 2024$339 $172 $233 $29 $773 
Charge-offs(52)(32)(1)(10)(95)
Recoveries 14 — 4 3 21 
Provision for loan and lease losses 43 81 (5)3 122 
Balance as of June 30, 2024$344 $221 $231 $25 $821 
Reserve for remaining unfunded commitments:
Balance as of January 1, 2024$49 $22 $12 $— $83 
Provision for remaining unfunded commitments(5)(12)— — (17)
Balance as of June 30, 202444 10 12 — 66 
Allowance for credit losses as of June 30, 2024$388 $231 $243 $25 $887 

The following table presents gross charge-offs by year of origination for the six months ended June 30, 2025 and 2024.
 GROSS CHARGE-OFFS
Six Months Ended June 30, 2025
(Dollars in millions)20252024202320222021Prior to 2021Revolving LoansTotal
C&I$3 $3 $1 $7 $19 $26 $3 $62 
CRE— — — 5 — 5 — 10 
Consumer Real Estate— — 1 1 — — — 2 
Credit Card and Other3 — — 1 2 1 3 10 
Total$6 $3 $2 $14 $21 $32 $6 $84 
Six Months Ended June 30, 2024
(Dollars in millions)20242023202220212020Prior to 2020Revolving LoansTotal
C&I $— $9 $11 $20 $1 $9 $2 $52 
CRE— — — — 9 23 — 32 
Consumer Real Estate— — — — — 1 — 1 
Credit Card and Other4 — 1 — — 1 4 10 
Total$4 $9 $12 $20 $10 $34 $6 $95