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Business Segment Information | 3 Months Ended
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Mar. 31, 2025
Segment Reporting [Abstract] |
Business Segment Information | Business Segment Information During fourth quarter 2024, FHN reorganized its internal management structure and, accordingly, reclassified its reportable business segments. Prior to the 2024 reclassification, FHN's reportable segments were: (1) Regional Banking, (2) Specialty Banking, and (3) Corporate. As a result of the 2024 reclassification, FHN revised its reportable segments as described below. Segment information for periods prior to fourth quarter 2024 has been reclassified to conform to the current period presentation. FHN's operating segments are composed of the following: •Commercial, Consumer & Wealth 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. Commercial, Consumer & Wealth also consists of lines of business that deliver product offerings and services with niche industry knowledge including asset-based lending, commercial real estate, equipment finance/leasing, energy, international banking, healthcare, and transportation and logistics. Additionally, Commercial, Consumer & Wealth provides investment, wealth management, financial planning, trust and asset management services for consumer clients as well as delivering treasury management solutions, loan syndications, and corporate banking services. •Wholesale segment consists of lines of business that deliver product offerings and services with differentiated industry knowledge. Wholesale’s lines of business include mortgage warehouse lending, franchise finance, correspondent banking, and mortgage. Additionally, Wholesale 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, marketing, properties, technology, credit risk and bank operations are allocated to the activities of Commercial, Consumer & Wealth, Wholesale, and Corporate. Additionally, the Corporate segment includes centralized management of capital and funding to support the business activities of the company including management of balance sheet 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. Basis of Presentation Results of individual segments are presented based on FHN's internal management reporting practices. There is no comprehensive, authoritative body of guidance for management accounting equivalent to GAAP; therefore, the financial results of FHN's individual segments are not necessarily comparable with similar information for any other company. 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. 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. Funds Transfer Pricing Net interest income in segment results reflects FHN's internal funds transfer pricing methodology which is designed to consider interest rate and liquidity risks. Under this methodology, assets receive a funding charge while liabilities and capital receive a funding credit based on market interest rates, product characteristics, and other factors. The transfer pricing framework considers the application of funding curves and methodologies consistently across the balance sheet. A residual gain or loss from funds transfer pricing operations is retained within Corporate. Segment Allocations Financial results are presented, to the extent practicable, as if each segment operated on a standalone basis and include expense allocations for corporate overhead services used by the segments. FHN has allocated the ALLL and the reserve for unfunded lending commitments based on the loan exposures within each segment’s portfolio. The Company's Chief Operating Decision Maker ("CODM") is comprised of the chief executive officer and segment leadership. For both the Commercial, Consumer & Wealth and Wholesale segments, the CODM uses both Pre-Provision Net Revenue ("PPNR") and Pre-Tax Net Income ("PTNI") to evaluate performance and allocate resources. The measure of PPNR focuses on the Company's primary businesses principally by excluding the volatility associated with credit risk estimates due to the CECL life-of-loan estimation requirement, which is highly sensitive to changes in economic forecasts. PPNR also represents a metric utilized by regulatory agencies in stress testing assessments. PTNI is used to incorporate credit risk estimates for a holistic view of pre-tax results in the evaluation of segment performance. For the Corporate segment, the CODM uses after-tax income to evaluate performance and allocate resources. After-tax income is most relevant for the Corporate segment because of minimal credit risk and inclusion of the impacts from all consolidated tax matters, which are not allocated, in addition to all other methodologies affecting pre-tax income among reported segments (e.g., FTP and cost allocations). The following tables present financial information for each reportable business segment for the three months ended March 31, 2025 and 2024.
SEGMENT FINANCIAL INFORMATION
| Three Months Ended March 31, 2025
(Dollars in millions) | Commercial, Consumer & Wealth |  | Wholesale |  | Corporate |  | Consolidated
Interest income | $ | 814 |  |  | $ | 124 |  |  | $ | 76 |  |  | $ | 1,014 |
Interest expense | 291 |  |  | 28 |  |  | 64 |  |  | 383 |
Funds transfer pricing | 101 |  |  | (46) |  |  | (55) |  |  | — |
Net interest income (expense) | 624 |  |  | 50 |  |  | (43) |  |  | 631 |
Noninterest income | 110 |  |  | 59 |  |  | 12 |  |  | 181 |
Total revenues | 734 |  |  | 109 |  |  | (31) |  |  | 812 |
Noninterest expense (a) | 343 |  |  | 77 |  |  | 67 |  |  | 487 |
Pre-provision net revenue (b) | 391 |  |  | 32 |  |  | (98) |  |  | 325 |
Provision for credit losses | 38 |  |  | 3 |  |  | (1) |  |  | 40 |
Income (loss) before income taxes | 353 |  |  | 29 |  |  | (97) |  |  | 285 |
Income tax expense (benefit) | 84 |  |  | 7 |  |  | (28) |  |  | 63 |
Net income (loss) | $ | 269 |  |  | $ | 22 |  |  | $ | (69) |  |  | $ | 222 |
Average assets | $ | 58,717 |  |  | $ | 8,495 |  |  | $ | 13,753 |  |  | $ | 80,965 |
Depreciation and amortization | 9 |  |  | 2 |  |  | 10 |  |  | 21 |
Expenditures for long-lived assets | 5 |  |  | 1 |  |  | 3 |  |  | 9 |
| Three Months Ended March 31, 2024
(Dollars in millions) | Commercial, Consumer & Wealth |  | Wholesale |  | Corporate |  | Consolidated
Interest income | $ | 882 |  |  | $ | 115 |  |  | $ | 76 |  |  | $ | 1,073 |
Interest expense | 351 |  |  | 31 |  |  | 66 |  |  | 448 |
Funds transfer pricing | 94 |  |  | (42) |  |  | (52) |  |  | — |
Net interest income (expense) | 625 |  |  | 42 |  |  | (42) |  |  | 625 |
Noninterest income | 110 |  |  | 62 |  |  | 22 |  |  | 194 |
Total revenues | 735 |  |  | 104 |  |  | (20) |  |  | 819 |
Noninterest expense (a) | 347 |  |  | 75 |  |  | 93 |  |  | 515 |
Pre-provision net revenue (b) | 388 |  |  | 29 |  |  | (113) |  |  | 304 |
Provision for credit losses | 44 |  |  | 7 |  |  | (1) |  |  | 50 |
Income (loss) before income taxes | 344 |  |  | 22 |  |  | (112) |  |  | 254 |
Income tax expense (benefit) | 81 |  |  | 5 |  |  | (29) |  |  | 57 |
Net income (loss) | $ | 263 |  |  | $ | 17 |  |  | $ | (83) |  |  | $ | 197 |
Average assets | $ | 59,348 |  |  | $ | 7,146 |  |  | $ | 14,749 |  |  | $ | 81,243 |
Depreciation and amortization | 9 |  |  | 2 |  |  | 15 |  |  | 26 |
Expenditures for long-lived assets | 4 |  |  | — |  |  | 5 |  |  | 9 |
(a)2025 includes an FDIC special assessment of $1 million and $5 million in derivative valuation adjustments related to prior Visa Class B share sales in the Corporate segment. 2024 includes $5 million of restructuring costs and an FDIC special assessment of $10 million in the Corporate segment. (b)Pre-provision net revenue is a non-GAAP measure and is reconciled to income (loss) before income taxes (GAAP) in this table. The following tables reflect a disaggregation of FHN’s noninterest income by major product line and reportable segment for the three months ended March 31, 2025 and 2024.
NONINTEREST INCOME DETAIL BY SEGMENT
| Three Months Ended March 31, 2025
(Dollars in millions) | Commercial, Consumer & Wealth |  | Wholesale |  | Corporate |  | Consolidated
Noninterest income: |  |  |  |  |  |  |
Fixed income (a) | $ | — |  |  | $ | 49 |  |  | $ | — |  |  | $ | 49 |
Deposit transactions and cash management | 37 |  |  | 1 |  |  | 2 |  |  | 40 |
Brokerage, management fees and commissions | 26 |  |  | — |  |  | — |  |  | 26 |
Card and digital banking fees | 16 |  |  | — |  |  | 2 |  |  | 18 |
Other service charges and fees | 12 |  |  | — |  |  | — |  |  | 12 |
Trust services and investment management | 12 |  |  | — |  |  | — |  |  | 12 |
Mortgage banking income | — |  |  | 8 |  |  | — |  |  | 8 |
Other income (b) | 7 |  |  | 1 |  |  | 8 |  |  | 16 |
Total noninterest income | $ | 110 |  |  | $ | 59 |  |  | $ | 12 |  |  | $ | 181 |
| Three Months Ended March 31, 2024
(Dollars in millions) | Commercial, Consumer & Wealth |  | Wholesale |  | Corporate |  | Consolidated
Noninterest income: |  |  |  |  |  |  |
Fixed income (a) | $ | — |  |  | $ | 52 |  |  | $ | — |  |  | $ | 52 |
Deposit transactions and cash management | 41 |  |  | 1 |  |  | 2 |  |  | 44 |
Brokerage, management fees and commissions | 24 |  |  | — |  |  | — |  |  | 24 |
Card and digital banking fees | 17 |  |  | — |  |  | 2 |  |  | 19 |
Other service charges and fees | 12 |  |  | — |  |  | 1 |  |  | 13 |
Trust services and investment management | 11 |  |  | — |  |  | — |  |  | 11 |
Mortgage banking income | — |  |  | 9 |  |  | — |  |  | 9 |
Other income (b) | 5 |  |  | — |  |  | 17 |  |  | 22 |
Total noninterest income | $ | 110 |  |  | $ | 62 |  |  | $ | 22 |  |  | $ | 194 |
(a)2025 and 2024 include $9 million and $10 million, respectively, of underwriting, portfolio advisory, and other noninterest income in scope of ASC 606, "Revenue from Contracts with Customers." (b)Includes letter of credit fees and insurance commissions in scope of ASC 606. The following tables present a disaggregation of FHN's noninterest expense by major product line and reportable segment for the three months ended March 31, 2025 and 2024.
NONINTEREST EXPENSE DETAIL BY SEGMENT
| Three Months Ended March 31, 2025
(Dollars in millions) | Commercial, Consumer & Wealth |  | Wholesale |  | Corporate |  | Consolidated
Noninterest expense: |  |  |  |  |  |  |
Personnel expense | $ | 135 |  |  | $ | 51 |  |  | $ | 93 |  |  | $ | 279 |
Net occupancy expense | 21 |  |  | 2 |  |  | 12 |  |  | 35 |
Computer software | 7 |  |  | 2 |  |  | 23 |  |  | 32 |
Operations services | 4 |  |  | 6 |  |  | 13 |  |  | 23 |
Legal and professional fees | 3 |  |  | 1 |  |  | 10 |  |  | 14 |
Deposit insurance expense | — |  |  | — |  |  | 13 |  |  | 13 |
Advertising and public relations | 1 |  |  | — |  |  | 9 |  |  | 10 |
Amortization of intangible assets | 9 |  |  | — |  |  | 1 |  |  | 10 |
Equipment expense | 2 |  |  | — |  |  | 8 |  |  | 10 |
Contract employment and outsourcing | 1 |  |  | 1 |  |  | 6 |  |  | 8 |
Communications and delivery | 2 |  |  | 1 |  |  | 5 |  |  | 8 |
Other expense | 17 |  |  | 5 |  |  | 23 |  |  | 45 |
Cost allocations | 141 |  |  | 8 |  |  | (149) |  |  | — |
Total noninterest expense | $ | 343 |  |  | $ | 77 |  |  | $ | 67 |  |  | $ | 487 |
| Three Months Ended March 31, 2024
(Dollars in millions) | Commercial, Consumer & Wealth |  | Wholesale |  | Corporate |  | Consolidated
Noninterest expense: |  |  |  |  |  |  |
Personnel expense | $ | 139 |  |  | $ | 51 |  |  | $ | 111 |  |  | $ | 301 |
Net occupancy expense | 19 |  |  | 2 |  |  | 10 |  |  | 31 |
Computer software | 8 |  |  | 1 |  |  | 21 |  |  | 30 |
Operations services | 4 |  |  | 6 |  |  | 11 |  |  | 21 |
Legal and professional fees | 2 |  |  | — |  |  | 12 |  |  | 14 |
Deposit insurance expense | — |  |  | — |  |  | 24 |  |  | 24 |
Advertising and public relations | 2 |  |  | — |  |  | 6 |  |  | 8 |
Amortization of intangible assets | 10 |  |  | — |  |  | 1 |  |  | 11 |
Equipment expense | 3 |  |  | — |  |  | 8 |  |  | 11 |
Contract employment and outsourcing | 1 |  |  | 1 |  |  | 11 |  |  | 13 |
Communications and delivery | 2 |  |  | 1 |  |  | 5 |  |  | 8 |
Other expense | 21 |  |  | 5 |  |  | 17 |  |  | 43 |
Cost allocations | 136 |  |  | 8 |  |  | (144) |  |  | — |
Total noninterest expense | $ | 347 |  |  | $ | 75 |  |  | $ | 93 |  |  | $ | 515 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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