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Business Segment Information | 9 Months Ended
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Sep. 30, 2024
Segment Reporting [Abstract] |
Business Segment Information | Business Segment Information FHN's operating segments are composed of the following: •Regional Banking segment offers financial products and services, including traditional lending and deposit taking, to commercial and consumer clients primarily in the southern U.S. and other selected markets. Regional Banking also provides investment, wealth management, financial planning, trust and asset management services for consumer clients. •Specialty Banking segment consists of lines of business that deliver product offerings and services with specialized industry knowledge. Specialty Banking’s lines of business include asset-based lending, mortgage warehouse lending, commercial real estate, franchise finance, correspondent banking, equipment finance, and mortgage. In addition to traditional lending and deposit taking, Specialty Banking also delivers treasury management solutions, loan syndications, and international banking. Additionally, Specialty Banking has a line of business focused on fixed income securities sales, trading, underwriting, and strategies for institutional clients in the U.S. and abroad, as well as loan sales, portfolio advisory services, and derivative sales. •Corporate segment consists primarily of corporate support functions including risk management, audit, accounting, finance, executive office, and corporate communications. Shared support services such as human resources, properties, technology, credit risk and bank operations are allocated to the activities of Regional Banking, Specialty Banking and Corporate. Additionally, the Corporate segment includes centralized management of capital and funding to support the business activities of the company including management of wholesale funding, liquidity, and capital management and allocation. The Corporate segment also includes the revenue and expense associated with run-off businesses such as pre-2009 mortgage banking elements, run-off consumer and trust preferred loan portfolios, and other exited businesses. Periodically, FHN adapts its segments to reflect managerial or strategic changes. FHN may also modify its methodology of allocating expenses and equity among segments which could change historical segment results. During the first quarter of 2024, FHN made organizational changes in its internal management structure, and accordingly, its segment reporting structure. Prior period segment information has been reclassified to conform to the current period presentation. Business segment revenue, expense, asset, and equity levels reflect those which are specifically identifiable, or which are allocated based on an internal allocation method. Because the allocations are based on internally developed assignments and allocations, to an extent they are subjective. Generally, all assignments and allocations have been consistently applied for all periods presented. The following tables present financial information for each reportable business segment for the three and nine months ended September 30, 2024 and 2023:
SEGMENT FINANCIAL INFORMATION
| Three Months Ended September 30, 2024
(Dollars in millions) | Regional Banking |  | Specialty Banking |  | Corporate |  | Consolidated
Net interest income (expense) | $ | 517 |  |  | $ | 166 |  |  | $ | (56) |  |  | $ | 627 |
Provision for credit losses | 33 |  |  | 3 |  |  | (1) |  |  | 35 |
Noninterest income | 114 |  |  | 67 |  |  | 19 |  |  | 200 |
Noninterest expense (a) | 329 |  |  | 104 |  |  | 78 |  |  | 511 |
Income (loss) before income taxes | 269 |  |  | 126 |  |  | (114) |  |  | 281 |
Income tax expense (benefit) | 63 |  |  | 31 |  |  | (36) |  |  | 58 |
Net income (loss) | $ | 206 |  |  | $ | 95 |  |  | $ | (78) |  |  | $ | 223 |
Average assets | $ | 43,425 |  |  | $ | 24,945 |  |  | $ | 13,996 |  |  | $ | 82,366 |
| Three Months Ended September 30, 2023
(Dollars in millions) | Regional Banking |  | Specialty Banking |  | Corporate |  | Consolidated
Net interest income (expense) | $ | 558 |  |  | $ | 160 |  |  | $ | (113) |  |  | $ | 605 |
Provision for credit losses | 113 |  |  | 2 |  |  | (5) |  |  | 110 |
Noninterest income | 106 |  |  | 49 |  |  | 18 |  |  | 173 |
Noninterest expense (a) | 310 |  |  | 96 |  |  | 68 |  |  | 474 |
Income (loss) before income taxes | 241 |  |  | 111 |  |  | (158) |  |  | 194 |
Income tax expense (benefit) (b) | 56 |  |  | 27 |  |  | (31) |  |  | 52 |
Net income (loss) | $ | 185 |  |  | $ | 84 |  |  | $ | (127) |  |  | $ | 142 |
Average assets | $ | 43,249 |  |  | $ | 24,084 |  |  | $ | 15,887 |  |  | $ | 83,220 |
(a)2024 includes $15 million in derivative valuation adjustments related to prior Visa Class B share sales, $2 million of restructuring costs, and a $2 million FDIC special assessment expense credit in the Corporate segment. 2023 includes $10 million of restructuring costs in the Corporate segment. (b)2023 includes $24 million in expense related to the surrender of bank-owned life insurance policies and an $11 million benefit from merger-related tax items in the Corporate segment.
| Nine Months Ended September 30, 2024 |  |  |  |  |  |  |
(Dollars in millions) | Regional Banking |  | Specialty Banking |  | Corporate |  | Consolidated |  |  |  |  |  |  |
Net interest income (expense) | $ | 1,572 |  |  | $ | 476 |  |  | $ | (167) |  |  | $ | 1,881 |  |  |  |  |  |  |  |
Provision for credit losses | 119 |  |  | 26 |  |  | (5) |  |  | 140 |  |  |  |  |  |  |  |
Noninterest income | 328 |  |  | 203 |  |  | 50 |  |  | 581 |  |  |  |  |  |  |  |
Noninterest expense (a) | 986 |  |  | 311 |  |  | 230 |  |  | 1,527 |  |  |  |  |  |  |  |
Income (loss) before income taxes | 795 |  |  | 342 |  |  | (342) |  |  | 795 |  |  |  |  |  |  |  |
Income tax expense (benefit) | 185 |  |  | 83 |  |  | (97) |  |  | 171 |  |  |  |  |  |  |  |
Net income (loss) | $ | 610 |  |  | $ | 259 |  |  | $ | (245) |  |  | $ | 624 |  |  |  |  |  |  |  |
Average assets | $ | 43,344 |  |  | $ | 24,432 |  |  | $ | 14,003 |  |  | $ | 81,779 |  |  |  |  |  |  |  |
| Nine Months Ended September 30, 2023 |  |  |  |  |  |  |
(Dollars in millions) | Regional Banking |  | Specialty Banking |  | Corporate |  | Consolidated |  |  |  |  |  |  |
Net interest income (expense) | $ | 1,705 |  |  | $ | 467 |  |  | $ | (249) |  |  | $ | 1,923 |  |  |  |  |  |  |  |
Provision for credit losses | 184 |  |  | 35 |  |  | (9) |  |  | 210 |  |  |  |  |  |  |  |
Noninterest income (b) | 316 |  |  | 156 |  |  | 273 |  |  | 745 |  |  |  |  |  |  |  |
Noninterest expense (a) | 937 |  |  | 292 |  |  | 279 |  |  | 1,508 |  |  |  |  |  |  |  |
Income (loss) before income taxes | 900 |  |  | 296 |  |  | (246) |  |  | 950 |  |  |  |  |  |  |  |
Income tax expense (benefit) (c) | 210 |  |  | 72 |  |  | (59) |  |  | 223 |  |  |  |  |  |  |  |
Net income (loss) | $ | 690 |  |  | $ | 224 |  |  | $ | (187) |  |  | $ | 727 |  |  |  |  |  |  |  |
Average assets | $ | 42,285 |  |  | $ | 23,353 |  |  | $ | 15,833 |  |  | $ | 81,471 |  |  |  |  |  |  |  |
(a)2024 includes $15 million in derivative valuation adjustments related to prior Visa Class B share sales, $10 million in restructuring costs and a net FDIC special assessment of $10 million in the Corporate segment. 2023 includes $10 million of restructuring costs, a $50 million contribution to the First Horizon Foundation, $15 million in derivative valuation adjustments related to prior Visa Class B share sales and $51 million in merger and integration expenses related to the TD Transaction in the Corporate segment. (b)2023 includes a $225 million gain on merger termination in the Corporate segment. (c)2023 includes $24 million in expense related to the surrender of bank-owned life insurance policies and an $11 million benefit from merger-related tax items in the Corporate segment. The following tables reflect a disaggregation of FHN’s noninterest income by major product line and reportable segment for the three and nine months ended September 30, 2024 and 2023:
NONINTEREST INCOME DETAIL BY SEGMENT
| Three Months Ended September 30, 2024
(Dollars in millions) | Regional Banking |  | Specialty Banking |  | Corporate |  | Consolidated
Noninterest income: |  |  |  |  |  |  |
Fixed income (a) | $ | — |  |  | $ | 47 |  |  | $ | — |  |  | $ | 47 |
Deposit transactions and cash management | 40 |  |  | 3 |  |  | 2 |  |  | 45 |
Brokerage, management fees and commissions | 27 |  |  | — |  |  | — |  |  | 27 |
Card and digital banking fees | 17 |  |  | — |  |  | 2 |  |  | 19 |
Other service charges and fees | 6 |  |  | 7 |  |  | — |  |  | 13 |
Trust services and investment management | 12 |  |  | — |  |  | — |  |  | 12 |
Mortgage banking income | — |  |  | 8 |  |  | 1 |  |  | 9 |
Securities gains (losses), net (b) | — |  |  | — |  |  | 1 |  |  | 1 |
Other income (c) | 12 |  |  | 2 |  |  | 13 |  |  | 27 |
Total noninterest income | $ | 114 |  |  | $ | 67 |  |  | $ | 19 |  |  | $ | 200 |
| Three Months Ended September 30, 2023
(Dollars in millions) | Regional Banking |  | Specialty Banking |  | Corporate |  | Consolidated
Noninterest income: |  |  |  |  |  |  |
Fixed income (a) | $ | — |  |  | $ | 28 |  |  | $ | — |  |  | $ | 28 |
Deposit transactions and cash management | 41 |  |  | 3 |  |  | 2 |  |  | 46 |
Brokerage, management fees and commissions | 21 |  |  | — |  |  | — |  |  | 21 |
Card and digital banking fees | 18 |  |  | 1 |  |  | 1 |  |  | 20 |
Other service charges and fees | 6 |  |  | 8 |  |  | — |  |  | 14 |
Trust services and investment management | 12 |  |  | — |  |  | — |  |  | 12 |
Mortgage banking income | — |  |  | 7 |  |  | — |  |  | 7 |
Other income (c) | 8 |  |  | 2 |  |  | 15 |  |  | 25 |
Total noninterest income | $ | 106 |  |  | $ | 49 |  |  | $ | 18 |  |  | $ | 173 |
(a)2024 and 2023 include $11 million and $13 million, respectively, of underwriting, portfolio advisory, and other noninterest income in scope of ASC 606, "Revenue from Contracts with Customers." (b)Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile total noninterest income. (c)Includes letter of credit fees and insurance commissions in scope of ASC 606.
| Nine Months Ended September 30, 2024
(Dollars in millions) | Regional Banking |  | Specialty Banking |  | Corporate |  | Consolidated
Noninterest income: |  |  |  |  |  |  |
Fixed income (a) | $ | — |  |  | $ | 138 |  |  | $ | — |  |  | $ | 138 |
Deposit transactions and cash management | 119 |  |  | 9 |  |  | 6 |  |  | 134 |
Brokerage, management fees and commissions | 76 |  |  | — |  |  | — |  |  | 76 |
Card and digital banking fees | 51 |  |  | 2 |  |  | 5 |  |  | 58 |
Other service charges and fees | 18 |  |  | 22 |  |  | — |  |  | 40 |
Trust services and investment management | 36 |  |  | — |  |  | — |  |  | 36 |
Mortgage banking income | — |  |  | 27 |  |  | 1 |  |  | 28 |
Securities gains (losses), net (b) | — |  |  | — |  |  | 2 |  |  | 2 |
Other income (c) | 28 |  |  | 5 |  |  | 36 |  |  | 69 |
Total noninterest income | $ | 328 |  |  | $ | 203 |  |  | $ | 50 |  |  | $ | 581 |
| Nine Months Ended September 30, 2023
(Dollars in millions) | Regional Banking |  | Specialty Banking |  | Corporate |  | Consolidated
Noninterest income: |  |  |  |  |  |  |
Fixed income (a) | $ | — |  |  | $ | 98 |  |  | $ | (1) |  |  | $ | 97 |
Deposit transactions and cash management | 118 |  |  | 9 |  |  | 6 |  |  | 133 |
Brokerage, management fees and commissions | 66 |  |  | — |  |  | — |  |  | 66 |
Card and digital banking fees | 54 |  |  | 2 |  |  | 5 |  |  | 61 |
Other service charges and fees | 18 |  |  | 23 |  |  | — |  |  | 41 |
Trust services and investment management | 35 |  |  | — |  |  | — |  |  | 35 |
Mortgage banking income | — |  |  | 18 |  |  | — |  |  | 18 |
Gain on merger termination | — |  |  | — |  |  | 225 |  |  | 225 |
Securities gains (losses), net (b) | — |  |  | — |  |  | 1 |  |  | 1 |
Other income (c) | 25 |  |  | 6 |  |  | 37 |  |  | 68 |
Total noninterest income | $ | 316 |  |  | $ | 156 |  |  | $ | 273 |  |  | $ | 745 |
(a)2024 and 2023 include $31 million and $32 million, respectively, of underwriting, portfolio advisory, and other noninterest income in scope of ASC 606, "Revenue from Contracts with Customers." (b)Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile total noninterest income. (c)Includes letter of credit fees and insurance commissions in scope of ASC 606.

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