Mortgage Banking Activity

3 Months Ended

Mar. 31, 2026

Mortgage Banking [Abstract]

Mortgage Banking Activity

Mortgage Banking Activity

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 can 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.

FHN records estimated losses related to prior mortgage loan sales within a repurchase and foreclosure accrual. FHN estimates losses based on prior origination levels, losses recognized upon repurchases, and the impact of current economic conditions on estimated loss content. Based on currently available information and experience

to date, FHN evaluated its loan repurchase, make-whole, foreclosure, and certain related exposures and accrued for losses of $12 million as of both March 31, 2026 and December 31, 2025.

At March 31, 2026, FHN had approximately $26 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 2026 and 2025, with no new originations or loan sales, and only an insignificant amount of repurchases. These loans are excluded from the following table, which summarizes activity relating to residential mortgage loans held for sale for the three months ended March 31, 2026 and the year ended December 31, 2025.

MORTGAGE LOAN ACTIVITY
(Dollars in millions)	March 31, 2026		December 31, 2025
Balance at beginning of period	$	147	$	81
Originations and purchases	339		1,253
Sales, net of gains	(323)		(1,187)
Balance at end of period	$	163	$	147

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, 2026 and December 31, 2025.

MORTGAGE SERVICING RIGHTS
	March 31, 2026						December 31, 2025
(Dollars in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Mortgage servicing rights	$	25	$	(8)	$	17	$	23	$	(7)	$	16

In addition, there was an insignificant amount of non-mortgage and commercial servicing rights as of March 31, 2026 and December 31, 2025. Total mortgage servicing fees included in mortgage banking income were less than $1 million and $1 million for the three months ended March 31, 2026 and 2025, respectively.