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美国

证券交易委员会

华盛顿特区20549

_____________________________________

形式 10-Q

_____________________________________

(标记一)

☒			根据1934年《证券交易法》第13或15(D)条规定的季度报告

截至本季度末2024年9月30日

或

☐			根据1934年证券交易法第13或15（d）条提交的过渡报告

从 到

佣金文件编号001-15185

____________________________________ 

(注册人的确切姓名载于其章程)

 ______________________________________  

TN									62-0803242
(述明或其他司法管辖权 公司或组织)									(税务局雇主 识别号码)
麦迪逊大道165号
孟菲斯，			田纳西州						38103
（主要行政办公室地址）									(邮政编码)

（注册人的电话号码，包括地区代码）（901) 523-4444

(前姓名、前地址和前财政年度，如果自上次报告以来发生变化)

根据该法第12(B)条登记的证券：

每个班级的标题			交易代码			注册所在的交易所名称
0.625美元面值普通股			FHN			纽约证券交易所有限责任公司
存托股份，每股代表1/400权益 一股非累积永久优先股，B系列			FHN PR B			纽约证券交易所有限责任公司
存托股份，每股代表1/400权益 一股非累积永久优先股，C系列			FHN PR C			纽约证券交易所有限责任公司
存托股份，每股代表1/4，000权益 一股非累积永久优先股，E系列			FHN PR E			纽约证券交易所有限责任公司
存托股份，每股代表1/4，000权益 一股非累积永久优先股，F系列			FHN PR F			纽约证券交易所有限责任公司

用复选标记表示注册人(1)是否在过去12个月内(或在要求注册人提交此类报告的较短时间内)提交了1934年《证券交易法》第13条或第15(D)节要求提交的所有报告，以及(2)在过去90天内一直遵守此类提交要求。-☒：是的*☐*

通过勾选标记检查注册人是否已在过去12个月内（或在注册人被要求提交此类文件的较短期限内）以电子方式提交了根据S-t法规第405条（本章第232.405条）要求提交的所有交互数据文件。 ☒ 是的*☐*

用复选标记表示注册人是大型加速申报公司、加速申报公司、非加速申报公司、较小的报告公司或新兴成长型公司。请参阅《交易法》第12b-2条规则中“大型加速申报公司”、“加速申报公司”、“较小申报公司”和“新兴成长型公司”的定义。

大型加速文件服务器

☒

加速的文件管理器

☐

非加速文件管理器

☐

规模较小的新闻报道公司

☐

新兴市场和成长型公司

☐

如果是新兴成长型公司，用复选标记表示注册人是否已选择不使用延长的过渡期来遵守根据《交易法》第13(A)节提供的任何新的或修订的财务会计准则。-☐

通过勾选标记检查注册人是否是空壳公司（定义见《交易法》第120亿.2条）。是的 ☒ 没有

仅适用于制造商发行人：

注明截至最后实际可行日期，发行人所属各类普通股的流通股数量。

班级						2024年10月31日到期
普通股，面值0.625美元						530,138,241

---

10-Q报告目录

目录表

缩略语和术语词汇			1
前瞻性陈述			3
非GAAP信息			4
第一部分金融信息			5
项目1.财务报表			5
项目2.管理层对财务状况和经营结果的讨论和分析			73
项目3.关于市场风险的定量和定性披露			111
项目4.控制和程序			111
第二部分：其他信息			112
项目1.法律诉讼			112
第1A项。风险因素			112
第二项股权证券的未经登记的销售和收益的使用			112
项目3.高级证券违约			112
项目4.矿山安全信息披露			112
项目5.其他信息			112
项目6.展品			113
签名			115

---

首字母缩略词和术语
目录表

缩略语和术语词汇

以下是本报告中使用的常见缩写词和术语列表：

ACL			信贷损失准备
AFS			可供出售
空气			应计应收利息
美国铝业公司			资产/负债委员会
全部都是			贷款和租赁损失准备
ALM			资产/负债管理
AOCI			累计其他综合收益
ASC			FASb会计准则法典化
联想			FHN雇用的人员
ASU			会计准则更新
银行			第一地平线银行
博利			银行拥有的人寿保险
C&I			商业、金融和工业贷款组合
CECL			当前预期信贷损失
首席执行官			首席执行官
CMO			抵押抵押债券
CODM			主要经营决策者
公司			第一地平线公司
公司			第一地平线公司
克雷			商业地产
CRMC			信贷风险管理委员会
差热分析			递延税项资产
DTL			递延税项负债
EAD			默认风险
EPS			每股收益
联邦抵押协会			联邦全国抵押贷款协会
FASB			财务会计准则委员会
FDIC			美国联邦存款保险公司
美联储			联邦储备委员会
美联储			联邦储备委员会
FHA			联邦住房管理局
FHLB			联邦住房贷款银行
FHN			第一地平线公司
FHNF			FHN Financial; FHN的固定收益部门
菲科			费尔艾萨克公司
第一地平线			第一地平线公司
FRB			美联储银行或美联储委员会
房地美			联邦住房贷款抵押公司
FTE			完全应税等值物

公认会计原则			公认会计原则（美国）
温室气体			温室气体
GNMA			政府国家抵押贷款协会或Ginnie Mae
GSE			政府资助的企业，在本报告中提到了房利美和房地美
HELOC			房屋净值信用额度
HFS			持有待售
HTC			历史悠久的税收抵免
HTM			持有至到期
IBKC			IBERRIABANk Corporation
IBKC合并			FHN与IBKC的对等合并于2020年7月完成
ISDA			国际掉期和衍生品协会
美国国税局			美国国税局
LGD			违约造成的损失
伦敦银行同业拆借利率			伦敦银行间同业拆借利率
LIHTC			低收入住房税收抵免
有限责任公司			有限责任公司
LMC			向抵押贷款公司提供贷款
伦敦金属交易所			成本或市场较低者
LRRD			贷款恢复部
LTV			贷款价值比
MBS			抵押贷款支持证券
MD&A			管理层对财务状况和经营成果的探讨与分析
NAICS			北美行业分类系统
NII			净利息收入
NM			没有意义
NMT			新市场税收抵免
NPA			不良资产
非PCD			非购买信贷恶化的金融资产
不良贷款			不良贷款
奥利奥			拥有的其他房地产
帕姆			比例摊销法
PCAOB			上市公司会计监督委员会
PCD			购买信贷恶化的金融资产
PCI			购买信用减值
PD			违约概率
下午三点半			投资组合经理

			1			3 Q24表格10-Q报告

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首字母缩略词和术语
目录表

PPP			工资保障计划
PSU			绩效股票单位
关于			房地产
雷姆			关系经理
Roa			资产回报率
RPL			合理可能损失
SBA			小企业管理局
美国证券交易委员会			美国证券交易委员会
SOFR			安全的隔夜融资率
SVaR			压力风险价值
白破疫苗			多伦多道明银行
TD合并协议			FHN、TD和某些TD子公司之间的合并协议，双方于2023年5月4日相互终止
TD交易			TD合并协议中考虑的合并交易
TDR			问题债务重组
TRUP			信托优先贷款
UPB			未付本金余额
美国农业部			美国农业部
变量			风险价值
VIE			可变利息实体
我们/我们/我们			第一地平线公司

			2			3Q24 FORM 10-Q REPORT

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FORWARD-LOOKING STATEMENTS AND NON-GAAP INFORMATION
Table of Contents

Forward-Looking Statements

This report, including materials incorporated into it, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to FHN's beliefs, plans, goals, expectations, and estimates. Forward-looking statements are not a representation of historical information, but instead pertain to future operations, strategies, financial results or other developments. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “should,” “is likely,” “will,” “going forward,” and other expressions that indicate future events and trends identify forward-looking statements.

Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, operational, economic, and competitive uncertainties and contingencies, many of which are beyond our control, and many of which, with respect to future business decisions and actions (including acquisitions and divestitures), are subject to change and could cause our actual future results and outcomes to differ materially from those contemplated by forward-looking statements or historical performance. Examples of uncertainties and contingencies include, among other important factors:

•global, general and local economic and business conditions, including economic recession or depression;

•the stability or volatility of values and activity in the residential housing and commercial real estate markets;

•expectations of and actual timing and amount of interest rate movements, including the slope and shape of the yield curve, which can have a significant impact on a financial services institution;

•market and monetary fluctuations, including fluctuations in mortgage markets;

•the financial condition of borrowers and other counterparties;

•competition within and outside the financial services industry;

•the occurrence of natural or man-made disasters, global pandemics, conflicts, or terrorist attacks, or other adverse external events;

•effectiveness and cost-efficiency of FHN’s hedging practices;

•fraud, theft, or other incursions through conventional, electronic, or other means directly or

indirectly affecting FHN or its clients, business counterparties, or competitors;

•the ability to adapt products and services to changing industry standards and client preferences;

•risks inherent in originating, selling, servicing, and holding loans and loan-based assets, including prepayment risks, pricing concessions, fluctuation in U.S. housing and other real estate prices, fluctuation of collateral values, and changes in client profiles;

•changes in the regulation of the U.S. financial services industry;

•changes in laws, regulations, and administrative actions, including executive orders, whether or not specific to the financial services industry;

•potential claims alleging mortgage servicing failures, individually, on a class basis, or as master servicer of securitized loans;

•potential claims relating to participation in government programs, especially lending or other financial services programs;

•potential requirements for FHN to repurchase, or compensate for losses from, previously sold or securitized mortgages or securities based on such mortgages;

•changes in accounting policies, standards, and interpretations;

•evolving capital and liquidity standards under applicable regulatory rules;

•accounting policies and processes that require management to make estimates about matters that are uncertain;

•reputational risk and potential adverse reactions or changes to business or employee relationships; and

•other factors that may affect future results of FHN.

FHN assumes no obligation to update or revise any forward-looking statements that are made in this report or in any other statement, release, report, or filing from time to time. Actual results could differ and expectations could change, possibly materially, because of one or more factors, including those factors listed above or presented elsewhere in this report, those factors listed in material incorporated by reference into this report, and other factors not listed. In evaluating forward-looking statements and assessing our prospects, readers of this report should carefully consider the factors mentioned above along with the additional risk factors discussed in Item 2 of Part I and Item 1A of Part II of this report, and in the forepart, and in Items 1, 1A, and 7, of FHN’s most recent Annual Report on Form 10-K, among others.

			3			3Q24 FORM 10-Q REPORT

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FORWARD-LOOKING STATEMENTS AND NON-GAAP INFORMATION
Table of Contents

Non-GAAP Information

Certain measures included in this report are “non-GAAP,” meaning they are not presented in accordance with U.S. GAAP and also are not codified in U.S. banking regulations currently applicable to FHN. Although other entities may use calculation methods that differ from those used by FHN for non-GAAP measures, FHN’s management believes such measures are relevant to understanding the financial condition, capital position, and financial results of FHN and its business segments. Non-GAAP measures are reported to FHN’s management and Board of Directors through various internal reports.

The non-GAAP measures presented in this report are: pre-provision net revenue, return on average tangible common equity, tangible common equity to tangible assets, adjusted tangible common equity to risk-weighted assets, and tangible book value per common share. Table I.2.26 appearing in the MD&A (Item 2 of Part I) of this report provides a reconciliation of non-GAAP items presented in this report to the most comparable GAAP presentation.

Presentation of regulatory measures, even those which are not GAAP, provide a meaningful base for comparability to other financial institutions subject to the same regulations as FHN, as demonstrated by their use by banking regulators in reviewing capital adequacy of financial institutions. Although not GAAP terms, these regulatory measures are not considered “non-GAAP” under U.S. financial reporting rules as long as their presentation conforms to regulatory standards. Regulatory measures used in this report include: common equity tier 1 capital, generally defined as common equity less goodwill, other intangibles, and certain other required regulatory deductions; tier 1 capital, generally defined as the sum of core capital (including common equity and instruments that cannot be redeemed at the option of the holder) adjusted for certain items under risk based capital regulations; and risk-weighted assets, which is a measure of total on- and off-balance sheet assets adjusted for credit and market risk, used to determine regulatory capital ratios.

			4			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

PART I. FINANCIAL INFORMATION

 

Item 1.    Financial Statements

Consolidated Balance Sheets (unaudited)			6
Consolidated Statements of Income (unaudited)			7
Consolidated Statements of Comprehensive Income (Loss) (unaudited)			9
Consolidated Statements of Changes in Equity (unaudited)			10
Consolidated Statements of Cash Flows (unaudited)			12
Notes to the Consolidated Financial Statements (unaudited)			13
Note 1 Basis of Presentation and Accounting Policies			13
Note 2 Investment Securities			16
Note 3 Loans and Leases			19
Note 4 Allowance for Credit Losses			28
Note 5 Mortgage Banking Activity			31
Note 6 Goodwill and Other Intangible Assets			32
Note 7 Preferred Stock			33
Note 8 Components of Other Comprehensive Income (Loss)			34
Note 9 Earnings Per Share			36
Note 10 Contingencies and Other Disclosures			37
Note 11 Retirement Plans			39
Note 12 Business Segment Information			40
Note 13 Variable Interest Entities			45
Note 14 Derivatives			48
Note 15 Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions			55
Note 16 Fair Value of Assets and Liabilities			57

			5			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED BALANCE SHEETS

						(Unaudited)
						September 30,						December 31,
(Dollars in millions, except per share amounts)						2024						2023
Assets
Cash and due from banks						$	1,028					$	1,012
Interest-bearing deposits with banks						1,286						1,328
Federal funds sold and securities purchased under agreements to resell						1,008						719
Trading securities						1,549						1,412
Securities available for sale at fair value						8,248						8,391
Securities held to maturity (fair value of $1,144 and $1,161, respectively)						1,282						1,323
Loans held for sale (including $87 and $68 at fair value, respectively)						494						502
Loans and leases						62,445						61,292
Allowance for loan and lease losses						(823)						(773)
Net loans and leases						61,622						60,519
Premises and equipment						572						590
Goodwill						1,510						1,510
Other intangible assets						154						186
Other assets						3,882						4,169
Total assets						$	82,635					$	81,661
Liabilities
Noninterest-bearing deposits						$	16,212					$	17,204
Interest-bearing deposits						50,363						48,576
Total deposits						66,575						65,780
Trading liabilities						767						509
Short-term borrowings						2,585						2,549
Term borrowings						1,202						1,150
Other liabilities						2,190						2,382
Total liabilities						73,319						72,370
Equity
Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 16,750 and 26,750 shares, respectively						426						520
Common stock, $0.625 par value; authorized 700,000,000 shares; issued 532,180,686 and 558,838,694 shares, respectively						333						349
Capital surplus						4,947						5,351
Retained earnings						4,304						3,964
Accumulated other comprehensive loss, net						(989)						(1,188)
FHN shareholders' equity						9,021						8,996
Noncontrolling interest						295						295
Total equity						9,316						9,291
Total liabilities and equity						$	82,635					$	81,661

See accompanying notes to consolidated financial statements.

			6			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF INCOME

			Three Months Ended September 30,												Nine Months Ended September 30,
(Dollars in millions, except per share data; shares in thousands) (Unaudited)			2024						2023						2024						2023
Interest income
Interest and fees on loans and leases			$	996					$	941					$	2,923					$	2,624
Interest and fees on loans held for sale			10						15						27						40
Interest on investment securities			60						62						179						186
Interest on trading securities			22						19						64						57
Interest on other earning assets			31						43						91						107
Total interest income			1,119						1,080						3,284						3,014
Interest expense
Interest on deposits			434						409						1,231						845
Interest on trading liabilities			6						3						18						8
Interest on short-term borrowings			35						46						104						182
Interest on term borrowings			17						17						50						56
Total interest expense			492						475						1,403						1,091
Net interest income			627						605						1,881						1,923
Provision for credit losses			35						110						140						210
Net interest income after provision for credit losses			592						495						1,741						1,713
Noninterest income
Fixed income			47						28						138						97
Deposit transactions and cash management			45						46						134						133
Brokerage, management fees and commissions			27						21						76						66
Card and digital banking fees			19						20						58						61
Other service charges and fees			13						14						40						41
Trust services and investment management			12						12						36						35
Mortgage banking income			9						7						28						18
Gain on merger termination			—						—						—						225
Securities gains (losses), net			1						—						2						1
Other income			27						25						69						68
Total noninterest income			200						173						581						745
Noninterest expense
Personnel expense			282						266						862						821
Net occupancy expense			33						30						95						92
Computer software			30						26						89						82
Operations services			25						21						69						65
Legal and professional fees			15						13						47						33
Advertising and public relations			14						16						37						47
Contract employment and outsourcing			12						12						40						36
Deposit insurance expense			11						14						51						40
Amortization of intangible assets			11						12						33						36
Equipment expense			10						11						32						32
Communications and delivery			8						8						24						27
Contributions			4						3						6						60
Other expense			56						42						142						137
Total noninterest expense			511						474						1,527						1,508
Income before income taxes			281						194						795						950
Income tax expense			58						52						171						223
Net income			$	223					$	142					$	624					$	727
Net income attributable to noncontrolling interest			5						5						15						14
Net income attributable to controlling interest			$	218					$	137					$	609					$	713
Preferred stock dividends			5						8						28						24
Net income available to common shareholders			$	213					$	129					$	581					$	689

			7			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF INCOME (continued)
Basic earnings per common share			$	0.40					$	0.23					$	1.07					$	1.26
Diluted earnings per common share			$	0.40					$	0.23					$	1.06					$	1.23
Weighted average common shares			534,222						558,559						544,356						544,952
Diluted average common shares			537,971						561,421						547,629						561,930

See accompanying notes to consolidated financial statements.

			8			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

			Three Months Ended September 30,																								Nine Months Ended September 30,
(Dollars in millions) (Unaudited)			2024						2023																		2024						2023
Net income			$	223					$	142																	$	624					$	727
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale			232						(206)																		167						(197)
Net unrealized gains (losses) on cash flow hedges			58						(20)																		26						(22)
Net unrealized gains (losses) on pension and other postretirement plans			2						3																		6						5
Other comprehensive income (loss)			292						(223)																		199						(214)
Comprehensive income (loss)			515						(81)																		823						513
Comprehensive income attributable to noncontrolling interest			5						5																		15						14
Comprehensive income (loss) attributable to controlling interest			$	510					$	(86)																	$	808					$	499
Income tax expense (benefit) of items included in other comprehensive income:
Net unrealized gains (losses) on securities available for sale			$	75					$	(67)																	$	53					$	(65)
Net unrealized gains (losses) on cash flow hedges			19						(6)																		9						(7)
Net unrealized gains (losses) on pension and other postretirement plans			1						1																		2						2

See accompanying notes to consolidated financial statements.

			9			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Nine Months Ended September 30, 2024
						Preferred Stock												Common Stock
(Dollars in millions, except per share data; shares in thousands) (unaudited)						Shares						Amount						Shares						Amount						Capital Surplus						Retained Earnings						Accumulated Other Comprehensive Income (Loss) (a)						Noncontrolling Interest						Total
Balance, December 31, 2023						26,750						$	520					558,839						$	349					$	5,351					$	3,964					$	(1,188)					$	295					$	9,291
Adjustment to reflect adoption of ASU 2023-02						—						—						—						—						—						8						—						—						8
Net income						—						—						—						—						—						192						—						5						197
Other comprehensive income (loss)						—						—						—						—						—						—						(83)						—						(83)
Cash dividends declared:
Preferred stock						—						—						—						—						—						(8)						—						—						(8)
Common stock ($0.15 per share)						—						—						—						—						—						(84)						—						—						(84)
Common stock repurchased (b)						—						—						(11,052)						(7)						(152)						—						—						—						(159)
Excise tax on common stock repurchased						—						—						—						—						(2)						—						—						—						(2)
Common stock issued for:
Stock options exercised and restricted stock awards						—						—						850						—						—						—						—						—						—
Stock-based compensation expense						—						—						—						1						17						—						—						—						18
Dividends declared - noncontrolling interest of subsidiary preferred stock						—						—						—						—						—						—						—						(5)						(5)
Balance, March 31, 2024						26,750						520						548,637						343						5,214						4,072						(1,271)						295						9,173
Net income						—						—						—						—						—						199						—						5						204
Other comprehensive income (loss)						—						—						—						—						—						—						(10)						—						(10)
Cash dividends declared:
Preferred stock						—						—						—						—						—						(8)						—						—						(8)
Common stock ($0.15 per share)						—						—						—						—						—						(84)						—						—						(84)
Series D preferred stock redemption						(10,000)						(94)						—						—						—						(6)						—						—						(100)
Excise tax on preferred stock redemption						—						—						—						—						—						(1)						—						—						(1)
Common stock repurchased (b)						—						—						(14,896)						(9)						(219)						—						—						—						(228)
Excise tax on common stock repurchased						—						—						—						—						(1)						—						—						—						(1)
Common stock issued for:
Stock options exercised and restricted stock awards						—						—						3,135						1						1						—						—						—						2
Stock-based compensation expense						—						—						—						1						12						—						—						—						13
Dividends declared - noncontrolling interest of subsidiary preferred stock						—						—						—						—						—						—						—						(5)						(5)
Balance, June 30, 2024						16,750						426						536,876						336						5,007						4,172						(1,281)						295						8,955
Net income						—						—						—						—						—						218						—						5						223
Other comprehensive income (loss)						—						—						—						—						—						—						292						—						292
Cash dividends declared:
Preferred stock						—						—						—						—						—						(5)						—						—						(5)
Common stock ($0.15 per share)						—						—						—						—						—						(81)						—						—						(81)
Common stock repurchased (b)						—						—						(4,743)						(3)						(72)						—						—						—						(75)
Excise tax on common stock repurchased						—						—						—						—						(1)						—						—						—						(1)
Common stock issued for:
Stock options exercised and restricted stock awards						—						—						48						—						—						—						—						—						—
Stock-based compensation expense						—						—						—						—						13						—						—						—						13
Dividends declared - noncontrolling interest of subsidiary preferred stock						—						—						—						—						—						—						—						(5)						(5)
Balance, September 30, 2024						16,750						$	426					532,181						$	333					$	4,947					$	4,304					$	(989)					$	295					$	9,316

(a)Due to the nature of the preferred stock issued by FHN and its subsidiaries, all components of other comprehensive income (loss) have been attributed solely to FHN as the controlling interest holder.

(b)Includes $154 million, $212 million, and $75 million repurchased during first, second, and third quarter, respectively, under FHN's general purchase program.

			10			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (continued)

Nine Months Ended September 30, 2023
						Preferred Stock												Common Stock
(Dollars in millions, except per share data; shares in thousands) (unaudited)						Shares						Amount						Shares						Amount						Capital Surplus						Retained Earnings						Accumulated Other Comprehensive Income (Loss) (a)						Noncontrolling Interest						Total
Balance, December 31, 2022						31,686						$	1,014					537,101						$	336					$	4,840					$	3,430					$	(1,368)					$	295					$	8,547
Adjustment to reflect adoption of ASU 2022-02						—						—						—						—						—						4						—						—						4
Net income						—						—						—						—						—						251						—						4						255
Other comprehensive income						—						—						—						—						—						—						160						—						160
Cash dividends declared:
Preferred stock						—						—						—						—						—						(8)						—						—						(8)
Common stock ($0.15 per share)						—						—						—						—						—						(82)						—						—						(82)
Common stock repurchased						—						—						(159)						—						(4)						—						—						—						(4)
Common stock issued for:
Stock options exercised and restricted stock awards						—						—						677						—						5						—						—						—						5
Stock-based compensation expense						—						—						—						—						22						—						—						—						22
Dividends declared - noncontrolling interest of subsidiary preferred stock						—						—						—						—						—						—						—						(4)						(4)
Balance, March 31, 2023						31,686						1,014						537,619						336						4,863						3,595						(1,208)						295						8,895
Net income						—						—						—						—						—						325						—						4						329
Other comprehensive income (loss)						—						—						—						—						—						—						(151)						—						(151)
Cash dividends declared:
Preferred stock						—						—						—						—						—						(8)						—						—						(8)
Common stock ($0.15 per share)						—						—						—						—						—						(82)						—						—						(82)
Preferred stock conversion						(4,936)						(494)						—						—						—						—						—						—						(494)
Common stock repurchased						—						—						(575)						—						(5)						—						—						—						(5)
Common stock issued for:
Stock options exercised and restricted stock awards						—						—						1,872						—						—						—						—						—						—
Series G preferred stock conversion						—						—						19,743						12						481						—						—						—						493
Stock-based compensation expense						—						—						—						1						(14)						—						—						—						(13)
Dividends declared - noncontrolling interest of subsidiary preferred stock						—						—						—						—						—						—						—						(4)						(4)
Balance, June 30, 2023						26,750						520						558,659						349						5,325						3,830						(1,359)						295						8,960
Net income						—						—						—						—						—						137						—						5						142
Other comprehensive income (loss)						—						—						—						—						—						—						(223)						—						(223)
Cash dividends declared:
Preferred stock						—						—						—						—						—						(8)						—						—						(8)
Common stock ($0.15 per share)						—						—						—						—						—						(85)						—						—						(85)
Common stock repurchased						—						—						(17)						—						—						—						—						—						—
Common stock issued for:
Stock options exercised and restricted stock awards						—						—						67						—						—						—						—						—						—
Stock-based compensation expense						—						—						—						—						12						—						—						—						12
Dividends declared - noncontrolling interest of subsidiary preferred stock						—						—						—						—						—						—						—						(5)						(5)
Balance, September 30, 2023						26,750						$	520					558,709						$	349					$	5,337					$	3,874					$	(1,582)					$	295					$	8,793

(a)Due to the nature of the preferred stock issued by FHN and its subsidiaries, all components of other comprehensive income (loss) have been attributed solely to FHN as the controlling interest holder.

See accompanying notes to consolidated financial statements.

			11			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS

						Nine months ended September 30,
(Dollars in millions) (Unaudited)						2024						2023
Operating Activities
Net income						$	624					$	727
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses						140						210
Deferred income tax expense (benefit)						(21)						23
Depreciation and amortization of premises and equipment						41						41
Amortization of intangible assets						33						36
Net other amortization and accretion						8						14
Net (increase) decrease in trading securities						604						1,063
Net (increase) decrease in derivatives						(3)						(289)
Stock-based compensation expense						44						21
Securities (gains) losses, net						(2)						(1)
Loans held for sale:
Purchases and originations						(2,072)						(1,834)
Gross proceeds from settlements and sales						1,392						860
(Gain) loss due to fair value adjustments and other						(57)						32
Other operating activities, net						346						31
Total adjustments						453						207
Net cash provided by operating activities						1,077						934
Investing Activities
Proceeds from maturities of securities available for sale						614						678
Purchases of securities available for sale						(271)						(228)
Proceeds from prepayments of securities held to maturity						44						40
Proceeds from sales of premises and equipment						8						—
Purchases of premises and equipment						(27)						(23)
Net (increase) decrease in loans and leases						(1,221)						(3,784)
Net (increase) decrease in interest-bearing deposits with banks						43						(533)
Other investing activities, net						8						17
Net cash used in investing activities						(802)						(3,833)
Financing Activities
Common stock:
Stock options exercised						1						5
Cash dividends paid						(252)						(251)
Repurchase of shares						(462)						(10)
Preferred stock:
Series D preferred stock redemption						(100)						—
Cash dividends paid - preferred stock - noncontrolling interest						(15)						(12)
Cash dividends paid - preferred stock						(24)						(24)
Net increase (decrease) in deposits						794						3,526
Net increase (decrease) in short-term borrowings						37						1
Proceeds from issuance of term borrowings						25						—
Repayment of term borrowing						(6)						(450)
Increases (decreases) in term borrowings						32						9
Net cash provided by financing activities						30						2,794
Net increase (decrease) in cash and cash equivalents						305						(105)
Cash and cash equivalents at beginning of period						1,731						1,543
Cash and cash equivalents at end of period						$	2,036					$	1,438
Supplemental Disclosures
Total interest paid						$	1,392					$	961
Total taxes paid						93						122
Total taxes refunded						6						15
Transfer from loans to OREO						3						3
Transfer from loans HFS to trading securities						746						919
Preferred stock conversion to common stock						—						493

See accompanying notes to consolidated financial statements. 

			12			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 1—BASIS OF PRESENTATION & ACCOUNTING POLICIES

Notes to the Consolidated Financial Statements (Unaudited)

Note 1—Basis of Presentation and Accounting Policies

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes necessary for complete financial statements in accordance with GAAP. In the opinion of management, the accompanying unaudited consolidated financial statements contain all significant adjustments, consisting of normal and recurring items, considered necessary for fair presentation. These interim financial statements should be read in conjunction with FHN's audited consolidated financial statements and notes in FHN's Annual Report on Form 10-K for the year ended December 31, 2023. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year.

All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts reported in prior years have been reclassified to conform to the current period presentation. See the Glossary of Acronyms and Terms included in this Report for terms used herein.

Accounting Changes With Extended Transition Periods

In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which provides several optional expedients and exceptions to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The provisions of ASU 2020-04 primarily affect 1) contract modifications (e.g., loans, leases, debt, and derivatives) made in anticipation that a reference rate (e.g., LIBOR) will be discontinued and 2) the application of hedge accounting for existing relationships affected by those modifications. The provisions of ASU 2020-04 were effective upon release and apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Including the adoption of ASU 2022-06 (discussed below), the expedients and exceptions provided by ASU 2020-04 do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.

FHN identified contracts affected by reference rate reform, developed modification plans for those contracts

and implemented those modifications before the last quotation of LIBOR on June 30, 2023. FHN elected to utilize the optional expedients and exceptions provided by ASU 2020-04 for contract modifications that immediately converted the reference rate within each contract. FHN also elected that revisions to contractual fallback provisions, including modifications in accordance with the provisions of Regulation ZZ, did not require evaluation for modification accounting. Additionally, FHN elected that the revisions to derivative contracts implemented by central clearinghouses to convert centrally cleared derivative contracts from LIBOR to SOFR plus an appropriate spread adjustment were not considered changes requiring assessment for modification accounting.

During the transition period, for cash flow hedges that reference 1-month USD LIBOR, FHN applied expedients related to 1) the assumption of probability of cash flows when reference rates are changed on hedged items 2) avoiding dedesignation when critical terms (i.e., reference rates) change and 3) the allowed assumption of shared risk exposure for hedged items. Additionally, for its cash flow hedges that reference 1-month Term SOFR, FHN applied expedients related to 1) the allowed assumption of shared risk exposure for hedged items and 2) multiple allowed assumptions of conformity between hedged items and the hedging instrument when assessing effectiveness. FHN continued to utilize these expedients and exceptions through the final cash flows affected by the quotation of LIBOR.

In accordance with the provisions of ASU 2020-04, effective immediately after the end of the transition period for its cash flow hedges (i.e., no more cash flows were affected by LIBOR), FHN elected that the cessation of effectiveness assessments under the transition guidance and subsequent initiation of hedge effectiveness assessments under ASC 815 did not require dedesignation of the hedge relationships.

In December 2022, the FASB issued ASU 2022-06, "Deferral of the Sunset Date of Topic 848" which extends the transition window for ASU 2020-04 from December 31, 2022 to December 31, 2024, consistent with key USD LIBOR tenors continuing to be published through June 30, 2023.

In January 2021, the FASB issued ASU 2021-01, "Scope" to expand the scope of ASU 2020-04 to apply to certain contract modifications that were implemented in October 2020 by derivative clearinghouses for the use of the Secured Overnight Funding Rate (SOFR) in discounting, margining and price alignment for centrally cleared derivatives, including derivatives utilized in hedging relationships. ASU 2021-01 also applies to derivative

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 1—BASIS OF PRESENTATION & ACCOUNTING POLICIES

contracts affected by the change in discounting convention regardless of whether they are centrally cleared (i.e., bilateral contracts can also be modified) and regardless of whether they reference LIBOR. ASU 2021-01 was effective immediately upon issuance with retroactive application permitted. FHN elected to retroactively apply the provisions of ASU 2021-01 because FHN's centrally cleared derivatives were affected by the change in discounting convention and because FHN has other bilateral derivative contracts that may be modified to conform to the use of SOFR for discounting. Adoption did not have a significant effect on FHN's reported financial condition or results of operations.

Summary of Accounting Changes

ASU 2023-02

In March 2023, the FASB issued ASU 2023-02, “Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” which permits investors to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. The proportional amortization method results in the cost of the investment being amortized in proportion to the income tax credits and other income tax benefits received, with the amortization of the investment and the income tax credits being presented net in the income statement as a component of income tax provision (benefit). Prior to ASU 2023-02, the proportional amortization method was only available to qualifying low income housing equity investments. An investor is required to make an accounting policy election to apply the proportional amortization method on a tax-credit-program-by-tax-credit-program basis. An investor that applies the proportional amortization method to qualifying tax equity investments must account for the receipt of the investment tax credits using the flow-through method, even if the entity applies the deferral method for other investment tax credits received. ASU 2023-02 also requires specific disclosures that must be applied to all investments that generate income tax credits and other income tax benefits from a tax credit program for which the entity has elected to apply the proportional amortization method.

ASU 2023-02 was effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Adoption of ASU 2023-02 is applied on either a modified retrospective (cumulative catch up) or a retrospective (restatement of prior years) basis. FHN has assessed the applicability of ASU 2023-02 to its tax credit program equity investments, determined that its New Markets Tax Credit and Historic Tax Credit programs qualified, and made the proportional method election for them. The use of the proportional amortization method continued for FHN's Low-Income Housing Tax Credits

program. Upon adoption of ASU 2023-02, FHN recognized a cumulative effect adjustment that increased retained earnings by $8 million, net of tax, on January 1, 2024.

The adoption of ASU 2023-02 resulted in a revision to FHN’s accounting policy for equity investments in tax credit programs. FHN’s election to utilize the deferral method for investments that generate Investment Tax Credits is now made subsequent to the determination of whether a tax credit program will apply the proportional amortization method. This includes both solar and non-qualifying historic tax credit investments. Under the deferral approach the investment tax credits are recorded as an offset to the related investment on the balance sheet. Credit amounts are recognized in earnings over the life of the investment within the same income or expense accounts as used for the investment.

Accounting Changes Issued But Not Currently Effective

ASU 2023-07

In November 2023, the FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures" that requires public entities to provide disclosures of significant segment expenses, including interest expense, and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. The ASU requires a public entity to disclose, for each reportable segment, the significant expense categories and amounts that are regularly provided to the chief operating decision-maker (CODM) and included in each reported measure of a segment's profit or loss. ASU 2023-07 also requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024. Early adoption is permitted. The guidance is applied retrospectively to all periods presented in the financial statements, unless it is impracticable. FHN will adopt ASU 2023-07 as of December 31, 2024 and is currently assessing the effect on its reportable segment disclosures.

ASU 2023-09

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures" to enhance transparency and decision usefulness of income tax disclosures. The provisions of this ASU require disaggregated information about a reporting entity's effective tax rate reconciliation in both percentages and reporting currency amounts. Certain categories of reconciling items are required by the ASU with additional categories required if a specified quantitative threshold is met. Reporting entities are also required to provide a

			14			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 1—BASIS OF PRESENTATION & ACCOUNTING POLICIES

qualitative discussion of the primary state and local jurisdictions for income taxes and the type of reconciling categories. ASU 2023-09 also requires disaggregation of income taxes paid by jurisdiction.

For public business entities, ASU 2023-09 is effective for annual periods beginning after December 31, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. FHN is currently assessing the impact of adopting ASU 2023-09 on its income tax disclosures.

SEC Final Rule

In March 2024, the SEC adopted final rules, “The Enhancement and Standardization of Climate-Related Disclosures for Investors” (the “Climate Disclosures Rules”) to require registrants to disclose certain climate-related information in registration statements and annual reports. Information required for inclusion within the footnotes to the financial statements for severe weather events and other natural conditions includes 1) income statement effects before insurance recoveries above 1% of pre-tax income/loss, 2) balance sheet effects above 1% of shareholders’ equity, and 3) certain carbon offsets and renewable energy credits. Qualitative discussion is also required for material impacts on financial estimates and assumptions that are due to severe weather events and other natural conditions or disclosed climate-related targets or transition plans.

In April 2024 the SEC issued a stay of the Climate Disclosures Rules pending the completion of judicial review of various legal challenges. Therefore, the actual timing of the implementation of the Climate Disclosure Rules, if sustained through the judicial process, is uncertain. FHN is assessing the potential effects of the Climate Disclosure Rules on its financial statements.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 2—INVESTMENT SECURITIES

Note 2—Investment Securities

The following tables summarize FHN’s investment securities as of September 30, 2024 and December 31, 2023:

INVESTMENT SECURITIES AT SEPTEMBER 30, 2024
						September 30, 2024
(Dollars in millions)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Securities available for sale:
Government agency issued MBS						$	4,754					$	5					$	(460)					$	4,299
Government agency issued CMO						2,530						1						(276)						2,255
Other U.S. government agencies						1,251						5						(122)						1,134
States and municipalities						598						1						(39)						560
Total securities available for sale (a)						$	9,133					$	12					$	(897)					$	8,248
Securities held to maturity:
Government agency issued MBS						$	814					$	—					$	(77)					$	737
Government agency issued CMO						468						—						(61)						407
Total securities held to maturity (a)						$	1,282					$	—					$	(138)					$	1,144

(a)Includes $7.2 billion of securities available for sale and $1.3 billion of securities held to maturity pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.

INVESTMENT SECURITIES AT DECEMBER 31, 2023
						December 31, 2023
(Dollars in millions)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Securities available for sale:
Government agency issued MBS						$	5,061					$	2					$	(579)					$	4,484
Government agency issued CMO						2,487						—						(341)						2,146
Other U.S. government agencies						1,321						2						(151)						1,172
States and municipalities						627						3						(41)						589
Total securities available for sale (a)						$	9,496					$	7					$	(1,112)					$	8,391
Securities held to maturity:
Government agency issued MBS						$	852					$	—					$	(96)					$	756
Government agency issued CMO						471						—						(66)						405
Total securities held to maturity (a)						$	1,323					$	—					$	(162)					$	1,161

(a)Includes $7.6 billion of securities available for sale and $1.3 billion of securities held to maturity pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 2—INVESTMENT SECURITIES

The amortized cost and fair value by contractual maturity for the debt securities portfolio as of September 30, 2024 is provided below:

DEBT SECURITIES PORTFOLIO MATURITIES
			Held to Maturity												Available for Sale
(Dollars in millions)			Amortized Cost						Fair Value						Amortized Cost						Fair Value
Within 1 year			$	—					$	—					$	41					$	41
After 1 year through 5 years			—						—						123						117
After 5 years through 10 years			—						—						378						352
After 10 years			—						—						1,307						1,184
Subtotal			—						—						1,849						1,694
Government agency issued MBS and CMO (a)			1,282						1,144						7,284						6,554
Total			$	1,282					$	1,144					$	9,133					$	8,248

(a)Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

There were no sales of AFS securities for the three and nine months ended September 30, 2024 and 2023.

The following tables provide information on investments within the available-for-sale portfolio that had unrealized losses as of September 30, 2024 and December 31, 2023:

AFS INVESTMENT SECURITIES WITH UNREALIZED LOSSES

						As of September 30, 2024
						Less than 12 months												12 months or longer												Total
(Dollars in millions)						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
Government agency issued MBS						$	—					$	—					$	4,057					$	(460)					$	4,057					$	(460)
Government agency issued CMO						150						—						2,002						(276)						2,152						(276)
Other U.S. government agencies						—						—						909						(122)						909						(122)
States and municipalities						4						—						452						(39)						456						(39)
Total						$	154					$	—					$	7,420					$	(897)					$	7,574					$	(897)

 

						As of December 31, 2023
						Less than 12 months												12 months or longer												Total
(Dollars in millions)						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
Government agency issued MBS						$	140					$	(2)					$	4,231					$	(577)					$	4,371					$	(579)
Government agency issued CMO						32						—						2,098						(341)						2,130						(341)
Other U.S. government agencies						114						(2)						905						(149)						1,019						(151)
States and municipalities						14						—						465						(41)						479						(41)
Total						$	300					$	(4)					$	7,699					$	(1,108)					$	7,999					$	(1,112)

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 2—INVESTMENT SECURITIES

FHN has evaluated all AFS debt securities that were in unrealized loss positions in accordance with its accounting policy for recognition of credit losses. No AFS debt securities were determined to have credit losses. Total AIR not included in the fair value or amortized cost basis of AFS debt securities was $28 million and $32 million as of September 30, 2024 and December 31, 2023, respectively. Consistent with FHN's review of the related securities, there were no credit-related write-downs of AIR for AFS debt securities during the reporting periods. Additionally, for AFS debt securities with unrealized losses, FHN does not intend to sell them, and it is more likely than not that FHN will not be required to sell them prior to recovery. Therefore, no write-downs of these investments to fair value occurred during the reporting periods. There were no transfers to or from AFS or HTM during the three and nine month periods ended September 30, 2024 and 2023.

For HTM securities, an allowance for credit losses is required to absorb estimated lifetime credit losses. Total AIR not included in the fair value or amortized cost basis of HTM debt securities was $3 million as of both September 30, 2024 and December 31, 2023. FHN has assessed the risk of credit loss and has determined that no allowance for credit losses for HTM securities was necessary as of September 30, 2024 and December 31, 2023. The evaluation of credit risk includes consideration of third-party and government guarantees (both explicit and implicit), senior or subordinated status, credit ratings of the issuer, the effects of interest rate changes since purchase and observable market information such as issuer-specific credit spreads.

The carrying amount of equity investments without a readily determinable fair value was $91 million and $89 million at September 30, 2024 and December 31, 2023, respectively. The year-to-date 2024 and 2023 gross amounts of upward and downward valuation adjustments were not significant.

Unrealized gains of $4 million and $11 million were recognized in the three and nine months ended September 30, 2024, respectively, for equity investments with readily determinable fair values. Unrealized gains of less than $1 million and $7 million were recognized in the three and nine months ended September 30, 2023, respectively, for equity investments with readily determinable fair values.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 3—LOANS & LEASES

Note 3—Loans and Leases

The loans and leases portfolio is disaggregated into portfolio segments and then further disaggregated into classes for certain disclosures. GAAP defines a portfolio segment as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. A class is generally a disaggregation of a portfolio segment and is generally determined based on risk characteristics of the loan and FHN’s method for monitoring and assessing credit risk and performance. FHN's loan and lease portfolio segments are commercial and consumer. The classes of loans and leases are: (1) commercial, financial, and industrial, which

includes commercial and industrial loans and leases and loans to mortgage companies, (2) commercial real estate, (3) consumer real estate, which includes both real estate installment and home equity lines of credit, and (4) credit card and other.

The following table provides the amortized cost basis of loans and leases by portfolio segment and class as of September 30, 2024 and December 31, 2023, excluding accrued interest of $281 million and $287 million, respectively, which is included in other assets in the Consolidated Balance Sheets.

LOANS AND LEASES BY PORTFOLIO SEGMENT
(Dollars in millions)						September 30, 2024						December 31, 2023
Commercial:
Commercial and industrial (a) (b)						$	29,848					$	30,609
Loans to mortgage companies						3,244						2,024
Total commercial, financial, and industrial						33,092						32,633
Commercial real estate						14,705						14,216
Consumer:
HELOC						2,085						2,219
Real estate installment loans						11,876						11,431
Total consumer real estate						13,961						13,650
Credit card and other (c)						687						793
Loans and leases						$	62,445					$	61,292
Allowance for loan and lease losses						(823)						(773)
Net loans and leases						$	61,622					$	60,519

(a)Includes equipment financing leases of $1.4 billion and $1.2 billion for September 30, 2024 and December 31, 2023, respectively.

(b)Includes PPP loans fully guaranteed by the SBA of $15 million and $29 million as of September 30, 2024 and December 31, 2023, respectively.

(c)Includes $184 million and $180 million of commercial credit card balances as of September 30, 2024 and December 31, 2023, respectively.

Restrictions

Loans and leases with carrying values of $46.6 billion and $46.1 billion were pledged as collateral for borrowings at September 30, 2024 and December 31, 2023, respectively.

Concentrations of Credit Risk

Most of FHN’s business activity is with clients located in the southern United States. FHN’s lending activity is concentrated in its market areas within those states. As of September 30, 2024, FHN had loans to mortgage companies of $3.2 billion and loans to finance and insurance companies of $3.7 billion. As a result, 21% of the C&I portfolio is sensitive to impacts on the financial services industry.

Credit Quality Indicators

FHN employs a dual grade commercial risk grading methodology to assign an estimate for the probability of

default and the loss given default for each commercial loan using factors specific to various industry, portfolio, or product segments that result in a rank ordering of risk and the assignment of grades PD 1 to PD 16. This credit grading system is intended to identify and measure the credit quality of the loan and lease portfolio by analyzing the migration between grading categories. It is also integral to the estimation methodology utilized in determining the ALLL since an allowance is established for pools of commercial loans based on the credit grade assigned. Each PD grade corresponds to an estimated one-year default probability percentage. PD grades are continually evaluated but require a formal scorecard annually.

PD 1 through PD 12 are “pass” grades. PD grades 13-16 correspond to the regulatory-defined categories of special mention (13), substandard (14), doubtful (15), and loss (16). Special mention loans and leases have potential

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 3—LOANS & LEASES

weaknesses that, if left uncorrected, may result in deterioration of FHN's credit position at some future date. Substandard commercial loans and leases have well-defined weaknesses and are characterized by the distinct possibility that FHN will sustain some loss if the deficiencies are not corrected. Doubtful commercial loans and leases have the same weaknesses as substandard loans and leases with the added characteristics that the

probability of loss is high, and collection of the full amount is improbable.

The following tables provide the amortized cost basis of the commercial loan portfolio by year of origination and credit quality indicator as of September 30, 2024 and December 31, 2023:

C&I PORTFOLIO
						September 30, 2024
(Dollars in millions)						2024						2023						2022						2021						2020						Prior to 2020						LMC (a)						Revolving  Loans						Revolving Loans Converted to Term Loans						Total
Credit Quality Indicator:
Pass (PD grades 1 through 12) (b)						$	4,726					$	2,801					$	3,893					$	2,523					$	1,145					$	4,061					$	3,244					$	8,665					$	287					$	31,345
Special Mention (PD grade 13)						80						44						55						34						17						120						—						332						33						715
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)						63						145						139						155						37						181						—						274						38						1,032
Total C&I loans						$	4,869					$	2,990					$	4,087					$	2,712					$	1,199					$	4,362					$	3,244					$	9,271					$	358					$	33,092

						December 31, 2023
(Dollars in millions)						2023						2022						2021						2020						2019						Prior to 2019						LMC (a)						Revolving  Loans						Revolving Loans Converted to Term Loans						Total
Credit Quality Indicator:
Pass (PD grades 1 through 12) (b)						$	4,008					$	5,637					$	3,506					$	1,636					$	1,665					$	3,448					$	2,019					$	9,087					$	327					$	31,333
Special Mention (PD grade 13)						75						60						64						56						101						57						—						186						—						599
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)						41						135						94						51						39						100						5						187						49						701
Total C&I loans						$	4,124					$	5,832					$	3,664					$	1,743					$	1,805					$	3,605					$	2,024					$	9,460					$	376					$	32,633

(a)    LMC includes non-revolving commercial lines of credit to qualified mortgage companies primarily for the temporary warehousing of eligible mortgage loans prior to the borrower's sale of those mortgage loans to third-party investors. The loans are of short duration with maturities less than one year.

(b)    Balances include PPP loans.

CRE PORTFOLIO
						September 30, 2024
(Dollars in millions)						2024						2023						2022						2021						2020						Prior to 2020						Revolving  Loans						Revolving Loans Converted to Term Loans						Total
Credit Quality Indicator:
Pass (PD grades 1 through 12)						$	486					$	1,154					$	3,449					$	3,200					$	1,010					$	3,415					$	351					$	59					$	13,124
Special Mention (PD grade 13)						—						38						239						175						29						121						—						1						603
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)						—						17						199						174						120						462						6						—						978
Total CRE loans						$	486					$	1,209					$	3,887					$	3,549					$	1,159					$	3,998					$	357					$	60					$	14,705

			20			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 3—LOANS & LEASES

						December 31, 2023
(Dollars in millions)						2023						2022						2021						2020						2019						Prior to 2019						Revolving  Loans						Revolving Loans Converted to Term Loans						Total
Credit Quality Indicator:
Pass (PD grades 1 through 12)						$	853					$	3,473					$	3,518					$	1,162					$	1,216					$	2,853					$	393					$	18					$	13,486
Special Mention (PD grade 13)						5						1						129						86						175						82						—						—						478
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)						—						2						5						11						175						59						—						—						252
Total CRE loans						$	858					$	3,476					$	3,652					$	1,259					$	1,566					$	2,994					$	393					$	18					$	14,216

The consumer portfolio is comprised primarily of smaller-balance loans which are very similar in nature in that most are standard products and are backed by residential real estate. Because of the similarities of consumer loan types, FHN is able to utilize the FICO score, among other attributes, to assess the credit quality of consumer borrowers. FICO scores are refreshed on a quarterly basis in an attempt to reflect the recent risk profile of the borrowers. Accruing delinquency amounts are indicators of asset quality within the credit card and other consumer portfolio.

The following table reflects the amortized cost basis by year of origination and refreshed FICO scores for

consumer real estate loans as of September 30, 2024 and December 31, 2023. Within consumer real estate, classes include HELOC and real estate installment loans. HELOCs are loans which during their draw period are classified as revolving loans. Once the draw period ends and the loan enters its repayment period, the loan converts to a term loan and is classified as a revolving loan converted to a term loan. All loans classified in the following tables as revolving loans or revolving loans converted to term loans are HELOCs. Real estate installment loans are originated as fixed term loans and are classified below in their vintage year. All loans in the following tables classified in a vintage year are real estate installment loans.

			21			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 3—LOANS & LEASES

CONSUMER REAL ESTATE PORTFOLIO
						September 30, 2024
(Dollars in millions)						2024						2023						2022						2021						2020						Prior to 2020						Revolving  Loans						Revolving Loans Converted to Term Loans						Total
FICO score 740 or greater						$	803					$	1,524					$	2,043					$	1,623					$	690					$	1,611					$	1,419					$	57					$	9,770
FICO score 720-739						118						198						274						218						100						283						177						18						1,386
FICO score 700-719						76						143						220						183						74						255						147						20						1,118
FICO score 660-699						100						166						185						105						76						303						146						27						1,108
FICO score 620-659						8						11						17						22						21						127						31						9						246
FICO score less than 620						12						21						19						19						18						210						22						12						333
Total						$	1,117					$	2,063					$	2,758					$	2,170					$	979					$	2,789					$	1,942					$	143					$	13,961

						December 31, 2023
(Dollars in millions)						2023						2022						2021						2020						2019						Prior to 2019						Revolving  Loans						Revolving Loans Converted to Term Loans						Total
FICO score 740 or greater						$	1,572					$	2,099					$	1,720					$	730					$	465					$	1,332					$	1,522					$	50					$	9,490
FICO score 720-739						205						286						227						107						88						230						192						15						1,350
FICO score 700-719						154						232						193						81						52						224						159						17						1,112
FICO score 660-699						170						198						113						83						53						290						168						18						1,093
FICO score 620-659						11						20						23						22						36						106						36						7						261
FICO score less than 620						18						19						15						20						12						225						24						11						344
Total						$	2,130					$	2,854					$	2,291					$	1,043					$	706					$	2,407					$	2,101					$	118					$	13,650

The following tables reflect the amortized cost basis by year of origination and refreshed FICO scores for credit card and other loans as of September 30, 2024 and December 31, 2023.

CREDIT CARD & OTHER PORTFOLIO
						September 30, 2024
(Dollars in millions)						2024						2023						2022						2021						2020						Prior to 2020						Revolving  Loans						Revolving Loans Converted to Term Loans						Total
FICO score 740 or greater						$	21					$	29					$	13					$	6					$	3					$	23					$	194					$	6					$	295
FICO score 720-739						9						4						2						1						—						4						22						2						44
FICO score 700-719						1						2						2						—						—						3						14						—						22
FICO score 660-699						1						2						1						—						—						4						19						—						27
FICO score 620-659						2						1						—						—						—						1						9						—						13
FICO score less than 620						7						11						7						5						6						70						179						1						286
Total						$	41					$	49					$	25					$	12					$	9					$	105					$	437					$	9					$	687

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 3—LOANS & LEASES

						December 31, 2023
(Dollars in millions)						2023						2022						2021						2020						2019						Prior to 2019						Revolving  Loans						Revolving Loans Converted to Term Loans						Total
FICO score 740 or greater						$	52					$	26					$	10					$	5					$	3					$	27					$	207					$	5					$	335
FICO score 720-739						5						3						1						1						1						5						24						1						41
FICO score 700-719						5						4						1						1						1						4						25						1						42
FICO score 660-699						4						3						1						1						1						8						23						—						41
FICO score 620-659						2						1						1						—						—						3						7						—						14
FICO score less than 620						12						9						6						8						13						103						168						1						320
Total						$	80					$	46					$	20					$	16					$	19					$	150					$	454					$	8					$	793

Nonaccrual and Past Due Loans and Leases

Loans and leases are placed on nonaccrual if it becomes evident that full collection of principal and interest is at risk, impairment has been recognized as a partial charge-off of principal balance due to insufficient collateral value and past due status, or on a case-by-case basis if FHN continues to receive payments but there are other borrower-specific issues. Included in nonaccrual are loans

for which FHN continues to receive payments including residential real estate loans where the borrower has been discharged of personal obligation through bankruptcy.

Past due loans are loans contractually past due as to interest or principal payments, but which have not yet been put on nonaccrual status.

The following table reflects accruing and non-accruing loans and leases by class on September 30, 2024 and December 31, 2023:

ACCRUING & NON-ACCRUING LOANS AND LEASES
						September 30, 2024
						Accruing																								Non-Accruing
(Dollars in millions)						Current						30-89 Days Past Due						90+ Days Past Due						Total Accruing						Current						30-89 Days Past Due						90+ Days Past Due						Total Non- Accruing						Total Loans and Leases
Commercial, financial, and industrial:
C&I (a)						$	29,629					$	28					$	1					$	29,658					$	102					$	24					$	64					$	190					$	29,848
Loans to mortgage companies						3,244						—						—						3,244						—						—						—						—						3,244
Total commercial, financial, and industrial						32,873						28						1						32,902						102						24						64						190						33,092
Commercial real estate:
CRE (b)						14,441						5						—						14,446						181						—						78						259						14,705
Consumer real estate:
HELOC (c)						2,038						10						3						2,051						20						5						9						34						2,085
Real estate installment loans (d)						11,743						29						10						11,782						30						7						57						94						11,876
Total consumer real estate						13,781						39						13						13,833						50						12						66						128						13,961
Credit card and other:
Credit card						268						2						3						273						—						—						—						—						273
Other						411						2						—						413						—						—						1						1						414
Total credit card and other						679						4						3						686						—						—						1						1						687
Total loans and leases						$	61,774					$	76					$	17					$	61,867					$	333					$	36					$	209					$	578					$	62,445

			23			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 3—LOANS & LEASES

						December 31, 2023
						Accruing																								Non-Accruing
(Dollars in millions)						Current						30-89 Days Past Due						90+ Days Past Due						Total Accruing						Current						30-89 Days Past Due						90+ Days Past Due						Total Non- Accruing						Total Loans and Leases
Commercial, financial, and industrial:
C&I (a)						$	30,398					$	31					$	1					$	30,430					$	108					$	18					$	53					$	179					$	30,609
Loans to mortgage companies						2,018						1						—						2,019						5						—						—						5						2,024
Total commercial, financial, and industrial						32,416						32						1						32,449						113						18						53						184						32,633
Commercial real estate:
CRE (b)						14,072						8						—						14,080						41						—						95						136						14,216
Consumer real estate:
HELOC (c)						2,158						11						4						2,173						30						6						10						46						2,219
Real estate installment loans (d)						11,295						29						13						11,337						43						6						45						94						11,431
Total consumer real estate						13,453						40						17						13,510						73						12						55						140						13,650
Credit card and other:
Credit card						271						3						3						277						—						—						—						—						277
Other						512						2						—						514						1						—						1						2						516
Total credit card and other						783						5						3						791						1						—						1						2						793
Total loans and leases						$	60,724					$	85					$	21					$	60,830					$	228					$	30					$	204					$	462					$	61,292

(a)    $175 million and $178 million of C&I loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2024 and 2023, respectively.

(b)    $253 million and $129 million of CRE loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2024 and 2023, respectively.

(c)    $3 million and $4 million of HELOC loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2024 and 2023, respectively.

(d)    $9 million and $10 million of real estate installment loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2024 and 2023, respectively.

Collateral-Dependent Loans

Collateral-dependent loans are defined as loans for which repayment is expected to be derived substantially through the operation or sale of the collateral and where the borrower is experiencing financial difficulty. At a minimum, the estimated value of the collateral for each loan equals the current book value.

As of September 30, 2024 and December 31, 2023, FHN had commercial loans with amortized cost of approximately $376 million and $250 million, respectively, that were based on the value of underlying collateral. Collateral-dependent C&I and CRE loans totaled $134 million and $242 million, respectively, at September 30, 2024. The collateral for these loans generally consists of business assets including land, buildings, equipment, and financial assets. During the three and nine months ended September 30, 2024, FHN recognized charge-offs of $27 million and $67 million, respectively, on these loans related to reductions in estimated collateral values.

Consumer HELOC and real estate installment loans with amortized cost based on the value of underlying real estate collateral were approximately $6 million and $28 million, respectively, as of September 30, 2024 and $6 million and $27 million, respectively, as of December 31, 2023. Charge-offs relating to collateral-dependent consumer loans were $1 million for the nine

months ended September 30, 2024 and September 30, 2023.

Loan Modifications to Troubled Borrowers

As part of FHN’s ongoing risk management practices, FHN attempts to work with borrowers when necessary to extend or modify loan terms to better align with their current ability to repay. Modifications could include extension of the maturity date, reductions of the interest rate, reduction or forgiveness of accrued interest, or principal forgiveness. Combinations of these modifications may also be made for individual loans. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Principal reductions may be made in limited circumstances, typically for specific commercial loan workouts, and in the event of borrower bankruptcy. Each occurrence is unique to the borrower and is evaluated separately.

Troubled loans are considered those in which the borrower is experiencing financial difficulty. The assessment of whether a borrower is experiencing financial difficulty can be subjective in nature and management’s judgment may be required in making this determination. FHN may determine that a borrower is experiencing financial difficulty if the borrower is currently in default on any of its debt, or if it is probable that a borrower may default in the foreseeable future absent a modification. Many aspects of a borrower’s financial

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 3—LOANS & LEASES

situation are assessed when determining whether they are experiencing financial difficulty.

Troubled commercial loans are typically modified through forbearance agreements which could include reduced interest rates, reduced payments, term extension, or entering into short sale agreements. Principal reductions may occur in specific circumstances.

Modifications for troubled consumer loans are generally structured using parameters of U.S. government-sponsored programs. For HELOC and real estate installment loans, troubled loans are typically modified by an interest rate reduction and a possible maturity date extension to reach an affordable housing debt-to-income ratio. Despite the absence of a loan modification by FHN, the discharge of personal liability through bankruptcy proceedings is considered a court-imposed modification.

For the credit card portfolio, troubled loan modifications are typically enacted through either a short-term credit

card hardship program or a longer-term credit card workout program. In the credit card hardship program, borrowers may be granted rate and payment reductions for six months to one year. In the credit card workout program, borrowers are granted a rate reduction to 0% and a term extension for up to five years.

Modifications to Borrowers Experiencing Financial Difficulty

The following tables present the amortized cost basis at the end of the reporting period of loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of modification made, as well as the financial effect of the modifications made as of September 30, 2024:

LOAN MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

			Interest Rate Reduction
			September 30, 2024																		September 30, 2023
(Dollars in millions)			Balance						% of Total Class						Financial Effect						Balance						% of Total Class						Financial Effect
Consumer real estate (a)			$	—					—		%				Reduced weighted-average contractual interest rate from 9.93% to 6.56%						$	1					—		%				Reduced weighted-average contractual interest rate from 8.60% to 5.00%
Credit card and other (a)			—						—						Reduced weighted-average contractual interest rate from 4.78% to 3.65%						—						—						Reduced weighted-average contractual interest rate from 13.30% to 0.00%
Total			$	—					—		%										$	1					—		%
(a) Balance less than $1 million.

			Term Extension
			September 30, 2024																		September 30, 2023
(Dollars in millions)			Balance						% of Total Class						Financial Effect						Balance						% of Total Class						Financial Effect
C&I			$	111					0.3		%				Added a weighted-average 1.4 years to the life of loans, which reduced monthly payment amounts for the borrowers						$	81					0.2		%				Added a weighted-average 1 year to the life of loans, which reduced monthly payment amounts for the borrowers
CRE			116						0.8						Added a weighted-average 1.5 years to the life of loans, which reduced monthly payment amounts for the borrowers						42						0.3						Added a weighted-average 1 year to the life of loans, which reduced monthly payment amounts for the borrowers
Consumer real estate (a)			—						—						Added a weighted-average 22.0 years to the life of loans, which reduced monthly payment amounts for the borrowers						2						—						Added a weighted-average 10 years to the life of loans, which reduced monthly payment amounts for the borrowers
Total			$	227					0.4		%										$	125					0.2		%
(a) Balance less than $1 million.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 3—LOANS & LEASES

			Principal Forgiveness
			September 30, 2024																		September 30, 2023
(Dollars in millions)			Balance						% of Total Class						Financial Effect						Balance						% of Total Class						Financial Effect
Consumer real estate (a)			$	—					—		%				Less than $1 million of the principal of loans was legally discharged in bankruptcy during the period and the borrowers have not re-affirmed the debt as of period end						$	1					—		%				$1.3 million of the principal of loans was legally discharged in bankruptcy during the period and the borrowers have not re-affirmed the debt as of period end
Total			$	—					—		%										$	1					—		%
(a) Balance less than $1 million.

			Payment Deferrals
			September 30, 2024																		September 30, 2023
(Dollars in millions)			Balance						% of Total Class						Financial Effect						Balance						% of Total Class						Financial Effect
Consumer real estate			$	—					—		%				N/A						$	3					—		%				Payment deferral for 11 months, with a balloon payment at the end of the term
Total			$	—					—		%										$	3					—		%

			Combination - Term Extension and Interest Rate Reduction
			September 30, 2024																		September 30, 2023
(Dollars in millions)			Balance						% of Total Class						Financial Effect						Balance						% of Total Class						Financial Effect
Consumer real estate			$	3					—		%				Added a weighted-average 10.9 years to the life of loans and reduced weighted-average contractual interest rate from 8.66% to 4.06%						$	5					—		%				Added a weighted-average 13.5 years to the life of loans and reduced weighted-average contractual interest rate from 5.60% to 4.80%
Total			$	3					—		%										$	5					—		%

			Combination - Term Extension, Interest Rate Reduction, and Interest Forgiveness
			September 30, 2024																		September 30, 2023
(Dollars in millions)			Balance						% of Total Class						Financial Effect						Balance						% of Total Class						Financial Effect
C&I			$	—					—		%				N/A						$	2					—		%				Added a weighted-average 3.7 years to the life of loans, reduced weighted-average contractual interest rate from 11.25% to 7.50% and provided less than $1 million in interest forgiveness
Total			$	—					—		%										$	2					—		%

			Combination - Term Extension, Interest Rate Reduction, and Interest Deferrals
			September 30, 2024																		September 30, 2023
(Dollars in millions)			Balance						% of Total Class						Financial Effect						Balance						% of Total Class						Financial Effect
CRE			$	—					—		%				N/A						$	16					0.1		%				Added a weighted-average 1 year to the life of loans, reduced weighted-average contractual interest rate from 8.65% to 8.00% and provided less than $1 million in deferred interest
Total			$	—					—		%										$	16					—		%

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 3—LOANS & LEASES

Loan modifications to borrowers experiencing financial difficulty that had a payment default during the period and were modified in the 12 months before default totaled less than $1 million and $21 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. FHN closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table depicts the performance of loans that have been modified in the last 12 months:

PERFORMANCE OF LOANS THAT HAVE BEEN MODIFIED IN THE LAST 12 MONTHS
						September 30, 2024
(Dollars in millions)						Current						30-89 Days Past Due						90+ Days Past Due									Non-Accruing
C&I						$	101					$	—					$	—								$	26
CRE						3						—						—									2
Consumer Real Estate						87						—						—									29
Total						$	191					$	—					$	—								$	57

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 4—ALLOWANCE FOR CREDIT LOSSES

Note 4—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 lifetime 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 four years. After the reasonable and supportable forecast period, the Company immediately 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 is included as a component of other assets. The total amount of interest reversals from loans placed on nonaccrual status and the amount of income recognized on nonaccrual loans during the three and nine months ended September 30, 2024 and 2023 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 increase in the ACL balance as of September 30, 2024, as compared to December 31, 2023, largely reflects downgrades and an evolving macroeconomic outlook. In developing credit loss estimates for its loan and lease portfolios, FHN utilized two Moody’s forecast scenarios for its macroeconomic inputs. As of September 30, 2024, among other things, FHN's scenario selection process factored in the outlook for production, inflation, interest rates, employment, real estate prices and international conflict. FHN selected one scenario as its base case, which was the Moody's baseline scenario. The heaviest weight was placed on this scenario. A smaller weight was placed on the FHN-selected downside scenario which was the Moody's S3 alternative scenario. FHN's scenario selection process was consistent with the prior quarter.

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 nine months ended September 30, 2024 and 2023:

			28			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 4—ALLOWANCE FOR CREDIT LOSSES

ROLLFORWARD OF ALLL & RESERVE FOR UNFUNDED LENDING COMMITMENTS
(Dollars in millions)						Commercial, Financial, and Industrial (a)						Commercial Real Estate						Consumer Real Estate						Credit Card and Other						Total
						Three Months Ended September 30, 2024
Allowance for loan and lease losses:
Balance as of July 1, 2024						$	344					$	221					$	231					$	25					$	821
Charge-offs						(12)						(15)						(1)						(5)						(33)
Recoveries						4						1						3						1						9
Provision for loan and lease losses						16						11						(3)						2						26
Balance as of September 30, 2024						$	352					$	218					$	230					$	23					$	823
Reserve for remaining unfunded commitments:
Balance as of July 1, 2024						$	44					$	10					$	12					$	—					$	66
Provision for remaining unfunded commitments						11						(2)						—						—						9
Balance as of September 30, 2024						55						8						12						—						75
Allowance for credit losses as of September 30, 2024						$	407					$	226					$	242					$	23					$	898
						Three Months Ended September 30, 2023
Allowance for loan and lease losses:
Balance as of July 1, 2023						$	326					$	159					$	221					$	31					$	737
Charge-offs (b)						(91)						(5)						(1)						(7)						(104)
Recoveries						5						1						2						1						9
Provision for loan and lease losses						95						14						6						3						118
Balance as of September 30, 2023						$	335					$	169					$	228					$	28					$	760
Reserve for remaining unfunded commitments:
Balance as of July 1, 2023						$	55					$	24					$	11					$	—					$	90
Provision for remaining unfunded commitments						(6)						(3)						1						—						(8)
Balance as of September 30, 2023						49						21						12						—						82
Allowance for credit losses as of September 30, 2023						$	384					$	190					$	240					$	28					$	842

			29			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 4—ALLOWANCE FOR CREDIT LOSSES

(Dollars in millions)						Commercial, Financial, and Industrial (a)						Commercial Real Estate						Consumer Real Estate						Credit Card and Other						Total
						Nine Months Ended September 30, 2024
Allowance for loan and lease losses:
Balance as of January 1, 2024						$	339					$	172					$	233					$	29					$	773
Charge-offs						(64)						(47)						(2)						(15)						(128)
Recoveries						19						1						6						4						30
Provision for loan and lease losses						58						92						(7)						5						148
Balance as of September 30, 2024						$	352					$	218					$	230					$	23					$	823
Reserve for remaining unfunded commitments:
Balance as of January 1, 2024						$	49					$	22					$	12					$	—					$	83
Provision for remaining unfunded commitments						6						(14)						—						—						(8)
Balance as of September 30, 2024						55						8						12						—						75
Allowance for credit losses as of September 30, 2024						$	407					$	226					$	242					$	23					$	898
						Nine Months Ended September 30, 2023
Allowance for loan and lease losses:
Balance as of January 1, 2023						$	308					$	146					$	200					$	31					$	685
Adoption of ASU 2022-02						1						—						(7)						—						(6)
Charge-offs (b)						(124)						(15)						(3)						(17)						(159)
Recoveries						12						2						7						4						25
Provision for loan and lease losses						138						36						31						10						215
Balance as of September 30, 2023						$	335					$	169					$	228					$	28					$	760
Reserve for remaining unfunded commitments:
Balance as of January 1, 2023						$	55					$	22					$	10					$	—					$	87
Provision for remaining unfunded commitments						(6)						(1)						2						—						(5)
Balance as of September 30, 2023						49						21						12						—						82
Allowance for credit losses as of September 30, 2023						$	384					$	190					$	240					$	28					$	842

(a) C&I loans as of September 30, 2024 and 2023 include $15 million and $35 million in PPP loans, respectively, which due to the government guarantee and forgiveness provisions are considered to have no credit risk and therefore have no allowance for loan and lease losses.

(b) Charge-offs in the C&I portfolio in 2023 include $72 million from a single credit from a company in bankruptcy.

The following table presents gross charge-offs by year of origination for the nine months ended September 30, 2024 and 2023:

GROSS CHARGE-OFFS
(Dollars in millions)						2024						2023						2022						2021						2020						Prior to 2020						Revolving Loans						Total
C&I						$	—					$	13					$	13					$	23					$	1					$	11					$	3					$	64
CRE						—						—						1						—						16						30						—						47
Consumer Real Estate						—						1						—						—						—						1						—						2
Credit Card and Other						6						1						1						—						—						1						6						15
Total						$	6					$	15					$	15					$	23					$	17					$	43					$	9					$	128

						2023						2022						2021						2020						2019						Prior to 2019						Revolving Loans						Total
C&I (a)						$	74					$	13					$	6					$	4					$	9					$	13					$	5					$	124
CRE						—						—						—						—						2						13						—						15
Consumer Real Estate						—						—						—						1						—						2						—						3
Credit Card and Other						9						—						1						—						—						2						5						17
Total						$	83					$	13					$	7					$	5					$	11					$	30					$	10					$	159

(a) Includes $72 million from a single credit from a company in bankruptcy.

			30			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 5—MORTGAGE BANKING ACTIVITY

Note 5—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.

At September 30, 2024, FHN had approximately $31 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 2024 and 2023, 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 nine months ended September 30, 2024 and the year ended December 31, 2023.

MORTGAGE LOAN ACTIVITY
(Dollars in millions)						September 30, 2024						December 31, 2023
Balance at beginning of period						$	62					$	44
Originations and purchases						738						692
Sales, net of gains						(717)						(674)
Balance at end of period						$	83					$	62

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. Mortgage servicing rights had the following carrying values as of the dates indicated in the table below.

MORTGAGE SERVICING RIGHTS
						September 30, 2024																		December 31, 2023
(Dollars in millions)						Gross Carrying Amount									Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Mortgage servicing rights						$	29								$	(9)					$	20					$	25					$	(7)					$	18

In addition, there was an insignificant amount of non-mortgage and commercial servicing rights as of September 30, 2024 and December 31, 2023. Total mortgage servicing fees included in mortgage banking income were $3 million for the nine months ended September 30, 2024 and 2023.

			31			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 6—GOODWILL & OTHER INTANGIBLE ASSETS

Note 6—Goodwill and Other Intangible Assets

Goodwill

The following is a summary of goodwill by reportable segment included in the Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023.

GOODWILL
(Dollars in millions)						Regional Banking						Specialty Banking						Total
December 31, 2022 (a)						$	825					$	686					$	1,511
Additions						—						—						—
Divestitures (b)						—						(1)						(1)
December 31, 2023						$	825					$	685					$	1,510
Additions						—						—						—
Divestitures						—						—						—
September 30, 2024						$	825					$	685					$	1,510

(a)FHN reorganized its internal management structure and reallocated goodwill in its reportable segments effective January 1, 2024. Prior periods have been revised to reflect this reallocation.

(b)Reduction in goodwill is related to the divestiture of FHN Financial Main Street Advisors assets in December 2023.

FHN performed the required annual goodwill impairment test as of October 1, 2023. The annual qualitative impairment test did not indicate impairment in any of FHN’s reporting units as of the testing date. Following the testing date, management evaluated the events and circumstances that could indicate that goodwill might be impaired and concluded that it is not more likely than not that goodwill was impaired. If there are any triggering events between annual periods, management will evaluate whether an impairment analysis is warranted. FHN is currently in the process of performing its annual impairment analysis as of October 1, 2024.

Accounting estimates and assumptions were made about FHN's future performance and cash flows, as well as other

prevailing market factors (e.g., interest rates, economic trends, etc.) when determining fair value as part of the goodwill impairment test. While management used the best information available to estimate future performance for each reporting unit, future adjustments to management's projections may be necessary if conditions differ substantially from the assumptions used in making the estimates.

Other intangible assets

The following table, which excludes fully amortized intangibles, presents other intangible assets included in the Consolidated Balance Sheets:

OTHER INTANGIBLE ASSETS
						September 30, 2024																		December 31, 2023
(Dollars in millions)						Gross Carrying Amount						Accumulated Amortization						Net Carrying Value						Gross Carrying Amount						Accumulated Amortization						Net Carrying Value
Core deposit intangibles						$	368					$	(236)					$	132					$	368					$	(208)					$	160
Client relationships						32						(17)						15						32						(16)						16
Other (a)						27						(20)						7						27						(17)						10
Total						$	427					$	(273)					$	154					$	427					$	(241)					$	186

(a)Includes non-compete covenants and purchased credit card intangible assets. Also includes state banking licenses which are not subject to amortization.

			32			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 7—PREFERRED STOCK

Note 7—Preferred Stock

The following table presents a summary of FHN's non-cumulative perpetual preferred stock:

PREFERRED STOCK
(Dollars in millions)																																																						September 30, 2024						December 31, 2023
						Issuance Date						Earliest Redemption Date (a)																		Annual Dividend Rate						Dividend Payments						Shares Outstanding						Liquidation Amount						Carrying Amount						Carrying Amount
Series B						7/2/2020						8/1/2025																		6.625%			(b)			Semi-annually						8,000						$	80					$	77					$	77
Series C						7/2/2020						5/1/2026																		6.600%			(c)			Quarterly						5,750						58						59						59
Series D						7/2/2020						5/1/2024																		6.100%			(d)			Semi-annually						—						—						—						94
Series E						5/28/2020						10/10/2025																		6.500%						Quarterly						1,500						150						145						145
Series F						5/3/2021						7/10/2026																		4.700%						Quarterly						1,500						150						145						145
																																										16,750						$	438					$	426					$	520

                                                                                                

(a) Denotes earliest optional redemption date. Earlier redemption is possible, at FHN's election, if certain regulatory capital events occur.

(b) As a result of LIBOR transition, the fixed dividend rate will reset on August 1, 2025 to three-month CME Term SOFR plus 4.52361% (0.26161% plus 4.262%).

(c) As a result of LIBOR transition, the fixed dividend rate will reset on May 1, 2026 to three-month CME Term SOFR plus 5.18161% (0.26161% plus 4.920%).

(d) On May 1, 2024, FHN redeemed all outstanding shares of its Series D Preferred Stock. The fixed dividend rate was set to convert to three-month CME Term SOFR plus 4.12061% (0.26161% plus 3.859%) on May 1, 2024.

FHN redeemed all outstanding shares of Series D Preferred Stock effective May 1, 2024. The difference between the $100 million outstanding liquidation preference amount and the $94 million carrying value of the Series D Preferred Stock along with the related share repurchase tax resulted in $7 million in deemed dividends that were included in net income available to common shareholders and EPS for the nine months ended September 30, 2024.

Subsidiary Preferred Stock

First Horizon Bank has issued 300,000 shares of Class A Non-Cumulative Perpetual Preferred Stock (Class A Preferred Stock) with a liquidation preference of $1,000 per share. Dividends on the Class A Preferred Stock, if declared, accrue and are payable each quarter, in arrears, at a floating rate equal to the greater of three-month CME Term SOFR plus 1.11161% (0.26161% plus 0.85%) or 3.75% per annum. These securities qualify fully as Tier 1 capital for both First Horizon Bank and FHN. On September 30, 2024 and December 31, 2023, $295 million of Class A Preferred Stock was recognized as noncontrolling interest on the Consolidated Balance Sheets.

FT Real Estate Securities Company, Inc. (FTRESC), an indirect subsidiary of FHN, has issued 50 shares of 9.50% Cumulative Preferred Stock, Class B (Class B Preferred Shares), with a liquidation preference of $1 million per share; of those shares, 47 were issued to nonaffiliates. FTRESC is a real estate investment trust established for the purpose of acquiring, holding, and managing real estate mortgage assets. Dividends on the Class B Preferred

Shares are cumulative and are payable semi-annually. At September 30, 2024 and December 31, 2023, the Class B Preferred Shares qualified as Tier 2 regulatory capital. For all periods presented, these securities are presented in the Consolidated Balance Sheets as term borrowings.

The Class B Preferred Shares are mandatorily redeemable on March 31, 2031, and redeemable at the discretion of FTRESC in the event that the Class B Preferred Shares cannot be accounted for as Tier 2 regulatory capital or there is more than an insubstantial risk that dividends paid with respect to the Class B Preferred Shares will not be fully deductible for tax purposes.

			33			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 8—COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS)

Note 8—Components of Other Comprehensive Income (Loss)

The following table provides the changes in accumulated other comprehensive income (loss) by component, net of tax, for the three and nine months ended September 30, 2024 and 2023:

ACCUMULATED OTHER COMPREHENSIVE INCOME

(Dollars in millions)						Securities AFS						Cash Flow Hedges						Pension and Post-retirement Plans						Total
Balance as of July 1, 2024						$	(901)					$	(112)					$	(268)					$	(1,281)
Net unrealized gains (losses)						232						45						—						277
Amounts reclassified from AOCI						—						13						2						15
Other comprehensive income (loss)						232						58						2						292
Balance as of September 30, 2024						$	(669)					$	(54)					$	(266)					$	(989)
(Dollars in millions)						Securities AFS						Cash Flow Hedges						Pension and Post-retirement Plans						Total
Balance as of January 1, 2024						$	(836)					$	(80)					$	(272)					$	(1,188)
Net unrealized gains (losses)						167						(13)						—						154
Amounts reclassified from AOCI						—						39						6						45
Other comprehensive income (loss)						167						26						6						199
Balance as of September 30, 2024						$	(669)					$	(54)					$	(266)					$	(989)

(Dollars in millions)						Securities AFS						Cash Flow Hedges						Pension and Post-retirement Plans						Total
Balance as of July 1, 2023						$	(964)					$	(129)					$	(266)					$	(1,359)
Net unrealized gains (losses)						(206)						(34)						1						(239)
Amounts reclassified from AOCI						—						14						2						16
Other comprehensive income (loss)						(206)						(20)						3						(223)
Balance as of September 30, 2023						$	(1,170)					$	(149)					$	(263)					$	(1,582)
(Dollars in millions)						Securities AFS						Cash Flow Hedges						Pension and Post-retirement Plans						Total
Balance as of January 1, 2023						$	(973)					$	(127)					$	(268)					$	(1,368)
Net unrealized gains (losses)						(197)						(60)						(1)						(258)
Amounts reclassified from AOCI						—						38						6						44
Other comprehensive income (loss)						(197)						(22)						5						(214)
Balance as of September 30, 2023						$	(1,170)					$	(149)					$	(263)					$	(1,582)

			34			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 8—COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS)

Reclassifications from AOCI, and related tax effects, were as follows:

RECLASSIFICATIONS FROM AOCI
(Dollars in millions)						Three Months Ended September 30,																		Nine Months Ended September 30,
Details about AOCI						2024						2023																		2024						2023						Affected line item in the statement where net income is presented
Cash Flow Hedges:
Realized (gains) losses on cash flow hedges						$	17					$	18																	$	51					$	50					Interest and fees on loans and leases
Tax expense (benefit)						(4)						(4)																		(12)						(12)						Income tax expense
						13						14																		39						38
Pension and Postretirement Plans:
Amortization of prior service cost and net actuarial (gain) loss						$	3					$	3																	$	8					$	8					Other expense
Tax expense (benefit)						(1)						(1)																		(2)						(2)						Income tax expense
						2						2																		6						6
Total reclassification from AOCI						$	15					$	16																	$	45					$	44

			35			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 9—EARNINGS PER SHARE

Note 9—Earnings Per Share

The computations of basic and diluted earnings per common share were as follows:

EARNINGS PER SHARE COMPUTATIONS
			Three Months Ended September 30,																		Nine Months Ended September 30,
(Dollars in millions, except per share data; shares in thousands)			2024						2023																		2024						2023
Net income			$	223					$	142																	$	624					727
Net income attributable to noncontrolling interest			5						5																		15						14
Net income attributable to controlling interest			218						137																		609						713
Preferred stock dividends			5						8																		28						24
Net income available to common shareholders			$	213					$	129																	$	581					$	689
Weighted average common shares outstanding—basic			534,222						558,559																		544,356						544,952
Effect of dilutive restricted stock, performance equity awards and options			3,749						2,862																		3,273						4,250
Effect of dilutive convertible preferred stock (a)			—						—																		—						12,728
Weighted average common shares outstanding—diluted			537,971						561,421																		547,629						561,930
Basic earnings per common share			$	0.40					$	0.23																	$	1.07					$	1.26
Diluted earnings per common share			$	0.40					$	0.23																	$	1.06					$	1.23

(a) On February 28, 2022, FHN issued $494 million of Series G Convertible Preferred Stock, which was converted into common stock on June 26, 2023, following the termination of the TD Merger Agreement. Conversion occurred at the rate of 4,000 common shares per Series G preferred share resulting in 19,742,776 additional common shares outstanding. 2023 includes the impact of the Series G preferred shares based on the final conversion rate.

The following table presents average outstanding options and other equity awards that were excluded from the calculation of diluted earnings per share because they were either anti-dilutive (the exercise price was higher

than the weighted-average market price for the period) or the performance conditions have not been met:

ANTI-DILUTIVE EQUITY AWARDS
						Three Months Ended September 30,																		Nine Months Ended September 30,
(Shares in thousands)						2024						2023																		2024						2023
Stock options excluded from the calculation of diluted EPS						963						1,928																		1,024						—
Weighted average exercise price of stock options excluded from the calculation of diluted EPS						$	16.87					$	16.44																	$	16.99					$	24.36
Other equity awards excluded from the calculation of diluted EPS						3,964						7,589																		5,151						2,496

			36			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 10—CONTINGENCIES & OTHER DISCLOSURES

Note 10—Contingencies and Other Disclosures

Contingencies

Contingent Liabilities Overview

Contingent liabilities arise in the ordinary course of business. Often, they are related to lawsuits, arbitration, mediation, and other forms of litigation. Various litigation matters currently are threatened or pending against FHN and its subsidiaries. Also, FHN at times receives requests for information, subpoenas, or other inquiries from federal, state, and local regulators, from other government authorities, and from other parties concerning various matters relating to FHN’s current or former businesses. Certain matters of that sort are pending at most times, and FHN generally cooperates when those matters arise. Pending and threatened litigation matters sometimes are settled by the parties, and sometimes pending matters are resolved in court or before an arbitrator, or are withdrawn. Regardless of the manner of resolution, frequently the most significant changes in status of a matter occur over a short time period, often following a lengthy period of little substantive activity. In view of the inherent difficulty of predicting the outcome of these matters, particularly where the claimants seek very large or indeterminate damages, or where the cases present novel legal theories or involve a large number of parties, or where claims or other actions may be possible but have not been brought, FHN cannot reasonably determine what the eventual outcome of the matters will be, what the timing of the ultimate resolution of these matters may be, or what the eventual loss or impact related to each matter may be. FHN establishes a loss contingency liability for a litigation matter when loss is both probable and reasonably estimable as prescribed by applicable financial accounting guidance. If loss for a matter is probable and a range of possible loss outcomes is the best estimate available, accounting guidance requires a liability to be established at the low end of the range.

Based on current knowledge, and after consultation with counsel, management is of the opinion that loss contingencies related to threatened or pending litigation matters should not have a material adverse effect on the consolidated financial condition of FHN but may be material to FHN’s operating results for any particular reporting period depending, in part, on the results from that period.

Material Loss Contingency Matters

As used in this Note, except for matters that are reported as having been substantially settled or otherwise substantially resolved, FHN's “material loss contingency matters” generally fall into at least one of the following categories: (i) FHN has determined material loss to be probable and has established a material loss liability in accordance with applicable financial accounting guidance;

(ii) FHN has determined material loss to be probable but is not reasonably able to estimate an amount or range of material loss liability; or (iii) FHN has determined that material loss is not probable but is reasonably possible, and the amount or range of that reasonably possible material loss is estimable. As defined in applicable accounting guidance, loss is reasonably possible if there is more than a remote chance of a material loss outcome for FHN. FHN provides contingencies note disclosures for certain pending or threatened litigation matters each quarter, including all matters mentioned in categories (i) or (ii) and, occasionally, certain matters mentioned in category (iii). In addition, in this Note, certain other matters, or groups of matters, are discussed relating to FHN’s pre-2009 mortgage origination and servicing businesses. In all litigation matters discussed in this Note, unless settled or otherwise resolved, FHN believes it has meritorious defenses and intends to pursue those defenses vigorously.

FHN reassesses the liability for litigation matters each quarter as the matters progress. At September 30, 2024, the aggregate amount of liabilities established for all such loss contingency matters was $1 million. These liabilities are separate from those discussed under the heading Mortgage Loan Repurchase and Foreclosure Liability below.

In each material loss contingency matter, except as otherwise noted, there is more than a remote chance that any of the following outcomes will occur: the plaintiff will substantially prevail; the defense will substantially prevail; the plaintiff will prevail in part; or the matter will be settled by the parties. At September 30, 2024, FHN estimates that for all material loss contingency matters, estimable reasonably possible losses in future periods in excess of currently established liabilities could aggregate in a range from zero to less than $1 million.

As a result of the general uncertainties discussed above and the specific uncertainties discussed for each matter mentioned below, it is possible that the ultimate future loss experienced by FHN for any particular matter may materially exceed the amount, if any, of currently established liability for that matter.

Mortgage Loan Repurchase and Foreclosure Liability

FHN’s repurchase and foreclosure liability, primarily related to its pre-2009 mortgage origination, sale, securitization, and servicing businesses, is comprised of accruals to cover estimated loss content in the active pipeline, estimated future inflows, and estimated loss content related to certain known claims not currently included in the active pipeline. The active pipeline consists of mortgage loan repurchase and make-whole demands from loan purchasers or securitization participants, foreclosure/servicing demands from borrowers, and

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 10—CONTINGENCIES & OTHER DISCLOSURES

certain related exposures. FHN compares the estimated probable incurred losses determined under the applicable loss estimation approaches for the respective periods with current reserve levels. Changes in the estimated required liability levels are recorded as necessary through the repurchase and foreclosure provision.

Based on currently available information and experience to date, FHN has evaluated its loan repurchase, make-whole, foreclosure, and certain related exposures and has accrued for losses of $15 million and $16 million as of September 30, 2024 and December 31, 2023, respectively. Accrued liabilities for FHN’s estimate of these obligations are reflected in other liabilities on the Consolidated Balance Sheets. Charges/expense reversals to increase/decrease the liability are included within other income on the Consolidated Statements of Income. The estimates are based upon currently available information and fact patterns that exist as of each balance sheet date and could be subject to

future changes. Changes to any one of these factors could significantly impact the estimate of FHN’s liability.

Other Disclosures

Indemnification Agreements and Guarantees

In the ordinary course of business, FHN enters into indemnification agreements for legal proceedings against its directors and officers and standard representations and warranties for underwriting agreements, merger and acquisition agreements, loan sales, contractual commitments, and various other business transactions or arrangements.

The extent of FHN’s obligations under these agreements depends upon the occurrence of future events; therefore, it is not possible to estimate a maximum potential amount of payouts that could be required by such agreements.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 11—RETIREMENT PLANS

Note 11—Retirement Plans

FHN sponsors a noncontributory, qualified defined benefit pension plan to employees hired or re-hired on or before September 1, 2007. Pension benefits are based on years of service, average compensation near retirement or other termination, and estimated social security benefits at age 65. Benefits under the plan are “frozen” so that years of service and compensation changes after 2012 do not affect the benefit owed. Minimum contributions are based upon actuarially determined amounts necessary to fund the total benefit obligation. Decisions to contribute to the plan are based upon pension funding requirements under the Pension Protection Act, the maximum amount deductible under the Internal Revenue Code, the actual performance of plan assets, and trends in the regulatory environment. FHN made no contributions to the qualified pension plan in 2023. Management does not currently anticipate that FHN will make a contribution to the qualified pension plan in 2024.

FHN also maintains non-qualified plans including a supplemental retirement plan that covers certain

employees whose benefits under the qualified pension plan have been limited by tax rules. These other non-qualified plans are unfunded, and contributions to these plans cover all benefits paid under the non-qualified plans. Payments made under the non-qualified plans were $6 million for 2023. FHN anticipates making benefit payments under the non-qualified plans of $5 million in 2024.

Service cost is included in personnel expense in the Consolidated Statements of Income. All other components of net periodic benefit cost are included in other expense.

For more information on FHN's pension plan and other postretirement benefit plans, see Note 17 - Retirement Plans and Other Employee Benefits in FHN's 2023 Annual Report on Form 10-K.

The components of net periodic benefit cost for the three and nine months ended September 30 were as follows:

COMPONENTS OF NET PERIODIC BENEFIT COST
			Three Months Ended September 30,												Nine Months Ended September 30,
(Dollars in millions)			2024						2023						2024						2023
Components of net periodic benefit cost
Interest cost			$	8					$	10					$	25					$	26
Expected return on plan assets			(8)						(9)						(24)						(25)
Amortization of unrecognized:
Actuarial (gain) loss			3						3						9						9
Net periodic benefit cost			$	3					$	4					$	10					$	10

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 12—BUSINESS SEGMENT INFORMATION

Note 12—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.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 12—BUSINESS SEGMENT INFORMATION

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.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 12—BUSINESS SEGMENT INFORMATION

			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.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 12—BUSINESS SEGMENT INFORMATION

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.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 12—BUSINESS SEGMENT INFORMATION

			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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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 13—VARIABLE INTEREST ENTITIES

Note 13—Variable Interest Entities

FHN makes equity investments in various entities that are considered VIEs, as defined by GAAP. A VIE typically does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties. The Company’s variable interest arises from contractual, ownership, or other monetary interests in the entity, which change with fluctuations in the fair value of the entity's net assets. FHN consolidates a VIE if FHN is the primary beneficiary of the entity. FHN is the primary beneficiary of a VIE if FHN's variable interest provides it with the power to direct the activities that most significantly impact the VIE and the right to receive benefits (or the obligation to absorb losses) that could potentially be significant to the VIE. To determine whether or not a variable interest held could potentially be significant to the VIE, FHN considers both qualitative and quantitative factors regarding the nature, size and form of its involvement with the VIE. FHN assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis.

Consolidated Variable Interest Entities

FHN has established certain rabbi trusts related to deferred compensation plans offered to its employees.

FHN contributes employee cash compensation deferrals to the trusts and directs the underlying investments made by the trusts. The assets of these trusts are available to FHN’s creditors only in the event that FHN becomes insolvent. These trusts are considered VIEs as there is no equity at risk in the trusts since FHN provided the equity interest to its employees in exchange for services rendered. FHN is considered the primary beneficiary of the rabbi trusts as it has the power to direct the activities that most significantly impact the economic performance of the rabbi trusts through its ability to direct the underlying investments made by the trusts. Additionally, FHN could potentially receive benefits or absorb losses that are significant to the trusts due to its right to receive any asset values in excess of liability payoffs and its obligation to fund any liabilities to employees that are in excess of a rabbi trust’s assets.

The following table summarizes the carrying value of assets and liabilities associated with rabbi trusts used for deferred compensation plans which are consolidated by FHN as of September 30, 2024 and December 31, 2023:

CONSOLIDATED VIEs
(Dollars in millions)												September 30, 2024												December 31, 2023
Assets:
Other assets												$	193											$	177
Liabilities:
Other liabilities												$	167											$	150

Nonconsolidated Variable Interest Entities

Tax Credit Investments

Through designated wholly-owned subsidiaries, First Horizon Bank makes equity investments as a limited partner in various partnerships that sponsor affordable housing projects utilizing the LIHTC. Through designated subsidiaries, First Horizon Bank periodically makes equity investments as a non-managing member in various LLCs that sponsor community development projects utilizing the NMTC. First Horizon Bank also makes equity investments as a limited partner or non-managing member in entities that receive historic tax credits. The purpose of these investments is to achieve a satisfactory return on capital and to support FHN’s community reinvestment initiatives. These entities are considered VIEs as First Horizon Bank's subsidiaries represent the holders of the equity investment at risk, but do not have the ability to direct the activities that most significantly affect the performance of the entities. FHN is therefore not the primary beneficiary of any of these entities.

Accordingly, FHN does not consolidate these VIEs and accounts for these investments in other assets on the Consolidated Balance Sheets.

FHN accounts for qualifying LIHTC investments under the proportional amortization method (PAM). Effective for periods after 2023, all LIHTC investments qualify for the PAM. Commencing in 2024, FHN has determined that its equity investments in NMTC and historic tax credit entities qualify for the PAM and has made the election to apply the PAM for these programs. Under this method an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance as a component of income tax expense. Prior to 2024, LIHTC investments that did not qualify for the PAM were accounted for using the equity method. Expenses associated with non-qualifying LIHTC investments were not material for the three and nine months ended September 30, 2024 and 2023.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 13—VARIABLE INTEREST ENTITIES

The following table summarizes the impact to income tax expense on the Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023 for investments accounted for under the PAM. The impact of these investments is Included in other operating activities, net in the Consolidated Statements of Cash Flows.

TAX CREDIT IMPACTS ON TAX EXPENSE
						Three Months Ended September 30,												Nine Months Ended September 30,
(Dollars in millions)						2024						2023						2024						2023
Income tax expense (benefit):
Amortization of qualifying investments						$	18					$	13					$	48					$	39
Tax credits						(19)						(14)						(52)						(41)
Other tax benefits related to qualifying investments						(3)						(3)						(9)						(8)

Small Issuer Trust Preferred Holdings

First Horizon Bank holds variable interests in trusts which have issued mandatorily redeemable preferred capital securities (“trust preferreds”) for smaller banking and insurance enterprises. First Horizon Bank has no voting rights for the trusts’ activities. The trusts’ only assets are junior subordinated debentures of the issuing enterprises. The creditors of the trusts hold no recourse to the assets of First Horizon Bank. Since First Horizon Bank is solely a holder of the trusts’ securities, it has no rights which would give it the power to direct the activities that most significantly impact the trusts’ economic performance and thus it is not considered the primary beneficiary of the trusts. First Horizon Bank has no contractual requirements to provide financial support to the trusts.

On-Balance Sheet Trust Preferred Securitization

In 2007, First Horizon Bank executed a securitization of certain small issuer trust preferreds for which the underlying trust meets the definition of a VIE as the holders of the equity investment at risk do not have the power through voting rights, or similar rights, to direct the activities that most significantly impact the entity’s economic performance. Since First Horizon Bank did not retain servicing or other decision-making rights, First Horizon Bank is not the primary beneficiary as it does not have the power to direct the activities that most significantly impact the trust’s economic performance. Accordingly, First Horizon Bank has accounted for the funds received through the securitization as a term borrowing in its Consolidated Balance Sheets. First Horizon Bank has no contractual requirements to provide financial support to the trust.

Holdings in Agency Mortgage-Backed Securities

FHN holds securities issued by various Agency securitization trusts. Based on their restrictive nature, the trusts meet the definition of a VIE since the holders of the equity investments at risk do not have the power through voting rights, or similar rights, to direct the activities that most significantly impact the entities’ economic performance. FHN could potentially receive benefits or

absorb losses that are significant to the trusts based on the nature of the trusts’ activities and the size of FHN’s holdings. However, FHN is solely a holder of the trusts’ securities and does not have the power to direct the activities that most significantly impact the trusts’ economic performance and is not considered the primary beneficiary of the trusts. FHN has no contractual requirements to provide financial support to the trusts.

Commercial Loan Modifications to Borrowers Experiencing Financial Difficulty

For certain troubled commercial loans, First Horizon Bank modifies the terms of the borrower’s debt in an effort to increase the probability of receipt of amounts contractually due. Following a modification to borrowers experiencing financial difficulty, the borrower entity typically meets the definition of a VIE as the initial determination of whether an entity is a VIE must be reconsidered as events have proven that the entity’s equity is not sufficient to permit it to finance its activities without additional subordinated financial support or a restructuring of the terms of its financing. As First Horizon Bank does not have the power to direct the activities that most significantly impact such troubled commercial borrowers’ operations, it is not considered the primary beneficiary even in situations where, based on the size of the financing provided, First Horizon Bank is exposed to potentially significant benefits and losses of the borrowing entity. First Horizon Bank has no contractual requirements to provide financial support to the borrowing entities beyond certain funding commitments established upon restructuring of the terms of the debt that allows for preparation of the underlying collateral for sale.

Proprietary Trust Preferred Issuances

In conjunction with its acquisitions, FHN acquired junior subordinated debt underlying multiple issuances of trust preferred debt. All of the trusts are considered VIEs because the ownership interests from the capital contributions to these trusts are not considered “at risk” in evaluating whether the holders of the equity investments at risk in the trusts have the ability to direct the activities that most significantly impact the entities’

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 13—VARIABLE INTEREST ENTITIES

economic performance. Thus, FHN cannot be the trusts’ primary beneficiary because its ownership interests in the trusts are not considered variable interests as they are not considered “at risk”. Consequently, none of the trusts are

consolidated by FHN. The following tables summarize FHN’s nonconsolidated VIEs as of September 30, 2024 and December 31, 2023:

NONCONSOLIDATED VIEs AT SEPTEMBER 30, 2024
(Dollars in millions)						Maximum Loss Exposure						Liability Recognized						Classification
Type
Low income housing partnerships						$	592					$	201					(a)
Other tax credit investments (b)						98						82						Other assets
Small issuer trust preferred holdings (c)						171						—						Loans and leases
On-balance sheet trust preferred securitization						26						88						(d)
Holdings of agency mortgage-backed securities (c)						8,263						—						(e)
Commercial loan modifications to borrowers experiencing financial difficulty (f)						152						—						Loans and leases
Proprietary trust preferred issuances (g)						—						167						Term borrowings

(a)Maximum loss exposure represents $391 million of current investments and $201 million of accrued contractual funding commitments. Accrued funding commitments represent unconditional contractual obligations for future funding events and are also recognized in other liabilities. FHN currently expects to be required to fund these accrued commitments by the end of 2024.

(b)Maximum loss exposure represents the value of current investments.

(c)Maximum loss exposure represents the value of current investments. A liability is not recognized as FHN is solely a holder of the trusts’ securities.

(d)Includes $113 million classified as loans and leases and $2 million classified as trading securities, which are offset by $88 million classified as term borrowings.

(e)Includes $428 million classified as trading securities, $1.3 billion classified as held to maturity, and $6.6 billion classified as securities available for sale.

(f)Maximum loss exposure represents $152 million of current receivables with no additional contractual funding commitments on loans related to commercial loan modifications to borrowers experiencing financial difficulty.

(g)No exposure to loss due to nature of FHN's involvement.

NONCONSOLIDATED VIEs AT DECEMBER 31, 2023
(Dollars in millions)						Maximum Loss Exposure						Liability Recognized						Classification
Type
Low income housing partnerships						$	587					$	223					(a)
Other tax credit investments (b)						79						64						Other assets
Small issuer trust preferred holdings (c)						173						—						Loans and leases
On-balance sheet trust preferred securitization						26						88						(d)
Holdings of agency mortgage-backed securities (c)						8,402						—						(e)
Commercial loan modifications to borrowers experiencing financial difficulty (f)						129						—						Loans and leases
Proprietary trust preferred issuances (g)						—						167						Term borrowings

(a)Maximum loss exposure represents $364 million of current investments and $223 million of accrued contractual funding commitments. Accrued funding commitments represent unconditional contractual obligations for future funding events and are also recognized in other liabilities. FHN currently expects to be required to fund these accrued commitments by the end of 2024.

(b)Maximum loss exposure represents current investments.

(c)Maximum loss exposure represents the value of current investments. A liability is not recognized as FHN is solely a holder of the trusts’ securities.

(d)Includes $113 million classified as loans and leases and $2 million classified as trading securities, which are offset by $88 million classified as term borrowings.

(e)Includes $450 million classified as trading securities, $1.3 billion classified as held to maturity, and $6.6 billion classified as securities available for sale.

(f)Maximum loss exposure represents $129 million of current receivables with no additional contractual funding commitments on loans related to commercial loan modifications to borrowers experiencing financial difficulty.

(g)No exposure to loss due to nature of FHN's involvement.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 14—DERIVATIVES

Note 14—Derivatives

In the normal course of business, FHN utilizes various financial instruments (including derivative contracts and credit-related agreements) through its fixed income and risk management operations, as part of its risk management strategy and as a means to meet clients’ needs. Derivative instruments are subject to credit and market risks in excess of the amount recorded on the balance sheet as required by GAAP. The contractual or notional amounts of these financial instruments do not necessarily represent the amount of credit or market risk. However, they can be used to measure the extent of involvement in various types of financial instruments. Controls and monitoring procedures for these instruments have been established and are routinely reevaluated. The ALCO controls, coordinates, and monitors the usage and effectiveness of these financial instruments.

Credit risk represents the potential loss that may occur if a party to a transaction fails to perform according to the terms of the contract. The measure of credit exposure is the replacement cost of contracts with a positive fair value. FHN manages credit risk by entering into financial instrument transactions through national exchanges, primary dealers or approved counterparties, and by using mutual margining and master netting agreements whenever possible to limit potential exposure. FHN also maintains collateral posting requirements with certain counterparties to limit credit risk. Daily margin posted or received with central clearinghouses is considered a legal settlement of the related derivative contracts which results in a net presentation for each contract in the Consolidated Balance Sheets. Treatment of daily margin as a settlement has no effect on hedge accounting or gains/losses for the applicable derivative contracts. On September 30, 2024 and December 31, 2023, respectively, FHN had $323 million and $406 million of cash receivables and $28 million and $33 million of cash payables related to collateral posting under master netting arrangements, inclusive of collateral posted related to contracts with adjustable collateral posting thresholds and over-collateralized positions, with derivative counterparties. With exchange-traded contracts, the credit risk is limited to the clearinghouse used. For non-exchange traded instruments, credit risk may occur when there is a gain in the fair value of the financial instrument and the counterparty fails to perform according to the terms of the contract and/or when the collateral proves to be of insufficient value. See additional discussion regarding master netting agreements and collateral posting requirements later in this note under the heading “Master Netting and Similar Agreements.”

Market risk represents the potential loss due to the decrease in the value of a financial instrument caused primarily by changes in interest rates or the prices of debt instruments. FHN manages market risk by establishing and

monitoring limits on the types and degree of risk that may be undertaken. FHN continually measures this risk through the use of models that measure value-at-risk and earnings-at-risk.

Derivative Instruments

FHN enters into various derivative contracts both to facilitate client transactions and as a risk management tool. Where contracts have been created for clients, FHN enters into upstream transactions with dealers to offset its risk exposure. Contracts with dealers that require central clearing are novated to a clearing agent who becomes FHN’s counterparty. Derivatives are also used as a risk management tool to hedge FHN’s exposure to changes in interest rates or other defined market risks.

Forward contracts are over-the-counter contracts where two parties agree to purchase and sell a specific quantity of a financial instrument at a specified price, with delivery or settlement at a specified date. Futures contracts are exchange-traded contracts where two parties agree to purchase and sell a specific quantity of a financial instrument at a specified price, with delivery or settlement at a specified date. Interest rate option contracts give the purchaser the right, but not the obligation, to buy or sell a specified quantity of a financial instrument, at a specified price, during a specified period of time. Caps and floors are options that are linked to a notional principal amount and an underlying indexed interest rate. Interest rate swaps involve the exchange of interest payments at specified intervals between two parties without the exchange of any underlying principal. Swaptions are options on interest rate swaps that give the purchaser the right, but not the obligation, to enter into an interest rate swap agreement during a specified period of time.

Trading Activities

FHNF trades U.S. Treasury, U.S. Agency, government-guaranteed loan, mortgage-backed, corporate and municipal fixed income securities, and other securities for distribution to clients. When these securities settle on a delayed basis, they are considered forward contracts. FHNF also enters into interest rate contracts, including caps, swaps, and floors, for its clients. In addition, FHNF enters into futures and option contracts to economically hedge interest rate risk associated with a portion of its securities inventory. These transactions are measured at fair value, with changes in fair value recognized in noninterest income. Related assets and liabilities are recorded on the Consolidated Balance Sheets as derivative assets and derivative liabilities within other assets and other liabilities. The FHNF Risk Committee and the Credit Risk Management Committee collaborate to mitigate credit risk related to these transactions. Credit risk is controlled through credit approvals, risk control limits, and ongoing monitoring procedures. Total trading

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 14—DERIVATIVES

revenues were $38 million and $19 million for the three months ended September 30, 2024 and 2023, and $113 million and $68 million for the nine months ended September 30, 2024 and 2023, respectively. Trading revenues are inclusive of both derivative and non-derivative financial instruments and are included in fixed income on the Consolidated Statements of Income.

The following table summarizes derivatives associated with FHNF's trading activities as of September 30, 2024 and December 31, 2023:

DERIVATIVES ASSOCIATED WITH TRADING
						September 30, 2024
(Dollars in millions)						Notional						Assets						Liabilities
Customer interest rate contracts						$	4,158					$	37					$	132
Offsetting upstream interest rate contracts						4,329						89						38
Forwards and futures purchased						2,307						4						1
Forwards and futures sold						2,278						2						3

 

						December 31, 2023
(Dollars in millions)						Notional						Assets						Liabilities
Customer interest rate contracts						$	4,067					$	22					$	197
Offsetting upstream interest rate contracts						4,273						135						23
Forwards and futures purchased						777						9						—
Forwards and futures sold						912						—						9

Interest Rate Risk Management

FHN’s ALCO focuses on managing market risk by controlling and limiting earnings volatility attributable to changes in interest rates. Interest rate risk exists to the extent that interest-earning assets and interest-bearing liabilities have different maturity or repricing characteristics. FHN uses derivatives, primarily swaps, that are designed to moderate the impact on earnings as interest rates change. Interest paid or received for swaps utilized by FHN to hedge the fair value of long-term debt is recognized as an adjustment of the interest expense of the liabilities whose risk is being managed. FHN’s interest rate risk management policy is to use derivatives to hedge interest rate risk or market value of assets or liabilities,

not to speculate. In addition, FHN has entered into certain interest rate swaps and caps as a part of a product offering to commercial clients that includes customer derivatives paired with upstream offsetting market instruments that, when completed, are designed to mitigate interest rate risk. These contracts do not qualify for hedge accounting and are measured at fair value with gains or losses included in current earnings in noninterest expense on the Consolidated Statements of Income.

The following table summarizes FHN’s derivatives associated with interest rate risk management activities as of September 30, 2024 and December 31, 2023:

 

DERIVATIVES ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT
						September 30, 2024
(Dollars in millions)						Notional						Assets						Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts						$	8,385					$	48					$	257
Offsetting upstream interest rate contracts						8,385						255						48

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 14—DERIVATIVES

						December 31, 2023
(Dollars in millions)						Notional						Assets						Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts						$	8,375					$	21					$	392
Offsetting upstream interest rate contracts						8,375						389						22

The following table summarizes gains (losses) on FHN’s derivatives associated with interest rate risk management activities for the three and nine months ended September 30, 2024 and 2023:

DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT
						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
(Dollars in millions)						Gains (Losses)						Gains (Losses)						Gains (Losses)						Gains (Losses)
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts (a)						$	240					$	(95)					$	163					$	(63)
Offsetting upstream interest rate contracts (a)						(240)						95						(163)						63

(a)Gains (losses) included in other expense within the Consolidated Statements of Income.

Cash Flow Hedges

Prior to 2021, FHN entered into pay floating, receive fixed interest rate swaps designed to manage its exposure to the variability in cash flows related to interest payments on debt instruments. The debt instruments primarily consist of held-to-maturity commercial loans that have variable interest payments that historically were based on 1-month LIBOR. In second quarter 2023, the remaining hedge was revised to reference 1-month Term SOFR after the cessation of LIBOR-based cash flows. This hedge matured in first quarter 2024. In conjunction with the IBKC merger, FHN acquired interest rate contracts (floors and collars) which were re-designated as cash flow hedges. The debt instruments associated with these hedges also primarily consisted of held-to-maturity commercial loans that had variable interest payments that were based on 1-month LIBOR. The last hedge acquired in conjunction with the IBKC merger matured in second quarter 2023.

In 2022, FHN entered into interest rate contracts (floors and swaps) which have been designated as cash flow hedges. These hedges reference 1-month Term SOFR and FHN made certain elections under ASU 2020-04 to facilitate qualification for hedge accounting during the time that hedged items transitioned away from 1-month LIBOR.

In a cash flow hedge, the entire change in the fair value of the interest rate derivatives included in the assessment of hedge effectiveness is initially recorded in OCI and is subsequently reclassified from OCI to current period earnings (interest income or interest expense) in the same period that the hedged item affects earnings.

The following tables summarize FHN’s derivative activities associated with cash flow hedges as of September 30, 2024 and December 31, 2023:

DERIVATIVES ASSOCIATED WITH CASH FLOW HEDGES

September 30, 2024

(Dollars in millions)

Notional

Assets

Liabilities

Cash Flow Hedges

Hedging Instruments:

Interest rate contracts

$

5,000

$

—

$

9

Hedged Items:

Variability in cash flows related to debt instruments (primarily loans)

N/A

$

5,000

N/A

 

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 14—DERIVATIVES

						December 31, 2023
(Dollars in millions)						Notional						Assets						Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts						$	5,200					$	—					$	32
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)						N/A						$	5,200					N/A

The following table summarizes gains (losses) on FHN’s derivatives associated with cash flow hedges for the three and nine months ended September 30, 2024 and 2023:

DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH CASH FLOW HEDGES
						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
(Dollars in millions)						Gains (Losses)						Gains (Losses)						Gains (Losses)						Gains (Losses)
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts (a)						$	77					$	(30)					$	35					$	(44)
Gain (loss) recognized in other comprehensive income (loss)						45						(34)						(13)						(60)
Gain (loss) reclassified from AOCI into interest income						13						14						39						38

(a)Approximately $4 million of pre-tax losses are expected to be reclassified into earnings in the next twelve months.

Other Derivatives

FHN has mortgage banking operations that include the origination and sale of loans into the secondary market. As part of the origination of loans, FHN enters into interest rate lock commitments with borrowers. Additionally, FHN

enters into forward sales contracts with buyers for delivery of loans at a future date. Both of these contracts qualify as freestanding derivatives and are recognized at fair value through earnings. The notional and fair values of these contracts are presented in the table below.

DERIVATIVES ASSOCIATED WITH MORTGAGE BANKING HEDGES
						September 30, 2024
(Dollars in millions)						Notional						Assets						Liabilities
Mortgage Banking Hedges
Option contracts written						$	77					$	1					$	—
Forward contracts written						123						—						—

						December 31, 2023
(Dollars in millions)						Notional						Assets						Liabilities
Mortgage Banking Hedges
Option contracts written						$	55					$	1					$	—
Forward contracts written						93						—						1

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 14—DERIVATIVES

The following table summarizes gains (losses) on FHN's derivatives associated with mortgage banking activities for the three and nine months ended September 30, 2024 and 2023:

DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH MORTGAGE BANKING HEDGES
						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
(Dollars in millions)						Gains (Losses)						Gains (Losses)						Gains (Losses)						Gains (Losses)
Mortgage Banking Hedges
Option contracts written						$	—					$	—					$	—					$	(2)
Forward contracts written						3						(2)						(5)						2

In conjunction with pre-2020 sales of Visa Class B shares, FHN entered into derivative transactions whereby FHN will make or receive cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. As of September 30, 2024 and December 31, 2023, the derivative liabilities associated with the sales of Visa Class B shares were $32 million and $23 million, respectively. FHN recognized $15 million in derivative valuation adjustments related to prior sales of Visa Class B shares for both the three and nine months ended September 30, 2024 and the year ended December 31, 2023. See Note 16 - Fair Value of Assets and Liabilities for discussion of the valuation inputs and processes for these Visa-related derivatives.

FHN utilizes cross-currency swaps and cross-currency interest rate swaps to economically hedge its exposure to foreign currency risk and interest rate risk associated with non-U.S. dollar denominated loans. As of September 30, 2024 and December 31, 2023, these loans were valued at $11 million and $17 million, respectively. The balance sheet amount and the gains/losses associated with these derivatives were not significant.

Related to its loan participation/syndication activities, FHN enters into risk participation agreements, under which it assumes exposure for, or receives indemnification for, borrowers’ performance on underlying interest rate derivative contracts. FHN's counterparties in these contracts are other lending institutions involved in the loan participation/syndication arrangements for which the underlying interest rate derivative contract is intended to hedge interest rate risk for the borrower. FHN will make (other institution is the lead bank) or receive (FHN is the lead bank) payments for risk participations if the borrower defaults on its obligation to perform under the terms of its interest rate derivative agreement with the lead bank in the participation.

As of September 30, 2024 and December 31, 2023, the notional values of FHN’s risk participations were $326 million and $351 million of derivative assets and $918 million and $874 million of derivative liabilities, respectively. The notional value for risk participation/syndication agreements is consistent with the percentage

of participation in the lending arrangement. FHN's maximum exposure or benefit in the risk participation agreements is contingent on the fair value of the underlying interest rate derivative contracts for which the borrower is in a liability position at the time of default. FHN monitors the credit risk associated with the borrowers to which the risk participations relate through the same credit risk assessment process utilized for establishing credit loss estimates for its loan portfolio. These credit risk estimates are included in the determination of fair value for the risk participations. Assuming all underlying third-party customers referenced in the swap contracts defaulted at September 30, 2024 and December 31, 2023, the exposure from these agreements would not be material based on the fair value of the underlying swaps.

FHN holds certain certificates of deposit with the rate of return based on an equity index which is considered an embedded derivative as a written option that must be separately recognized. The risks of the written option are offset by purchasing an option with terms that mirror the written option, which is also carried at fair value on the Company’s Consolidated Balance Sheets. As of September 30, 2024 and December 31, 2023, FHN had recognized an insignificant amount of assets and liabilities associated with these contracts.

Master Netting and Similar Agreements

FHN uses master netting agreements, mutual margining agreements and collateral posting requirements to minimize credit risk on derivative contracts. Master netting and similar agreements are used when counterparties have multiple derivatives contracts that allow for a “right of setoff,” meaning that a counterparty may net offsetting positions and collateral with the same counterparty under the contract to determine a net receivable or payable. The following discussion provides an overview of these arrangements which may vary due to the derivative type and market in which a derivative transaction is executed.

Interest rate derivatives are subject to agreements consistent with standard agreement forms of the ISDA.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 14—DERIVATIVES

Currently, all interest rate derivative contracts are entered into as over-the-counter transactions and collateral posting requirements are based on the net asset or liability position with each respective counterparty. For contracts that require central clearing, novation to a counterparty with access to a clearinghouse occurs and initial margin is posted.

Cash margin received (posted) that is considered settlements for the derivative contracts is included in the respective derivative asset (liability) value. Cash margin that is considered collateral received (posted) for interest rate derivatives is recognized as a liability (asset) on FHN’s Consolidated Balance Sheets.

Interest rate derivatives with clients that are smaller financial institutions typically require posting of collateral by the counterparty to FHN. This collateral is subject to a threshold with daily adjustments based upon changes in the level or fair value of the derivative position. Positions and related collateral can be netted in the event of default. Collateral pledged by a counterparty is typically cash or securities. The securities pledged as collateral are not recognized within FHN’s Consolidated Balance Sheets. Interest rate derivatives associated with lending arrangements share the collateral with the related loan(s). The derivative and loan positions may be netted in the event of default. For disclosure purposes, the entire collateral amount is allocated to the loan.

Interest rate derivatives with larger financial institutions typically contain provisions whereby the collateral posting thresholds under the agreements adjust based on the credit ratings of both counterparties. If the credit rating of FHN and/or First Horizon Bank is lowered, FHN could be required to post additional collateral with the counterparties. Conversely, if the credit rating of FHN and/or First Horizon Bank is increased, FHN could have collateral released and be required to post less collateral in the future. Also, if a counterparty’s credit ratings were to decrease, FHN and/or First Horizon Bank could require the posting of additional collateral; whereas if a counterparty’s credit ratings were to increase, the counterparty could require the release of excess collateral. Collateral for these arrangements is adjusted daily based on changes in the net fair value position with each counterparty.

The net fair value, determined by individual counterparty, of all derivative instruments with adjustable collateral

posting thresholds was $19 million of assets and $114 million of liabilities on September 30, 2024, and $12 million of assets and $188 million of liabilities on December 31, 2023. As of September 30, 2024 and December 31, 2023, FHN had received collateral of $95 million and $95 million and posted collateral of $48 million and $83 million, respectively, in the normal course of business related to these agreements.

Certain agreements also contain accelerated termination provisions, inclusive of the right of offset, if a counterparty’s credit rating falls below a specified level. If a counterparty’s debt rating (including FHN’s and First Horizon Bank’s) were to fall below these minimums, these provisions would be triggered, and the counterparties could terminate the agreements and require immediate settlement of all derivative contracts under the agreements. The net fair value, determined by individual counterparty, of all interest rate derivative instruments with credit-risk-related contingent accelerated termination provisions was $19 million of assets and $114 million of liabilities on September 30, 2024, and $12 million of assets and $188 million of liabilities on December 31, 2023. As of September 30, 2024 and December 31, 2023, FHN had received collateral of $95 million and $95 million and posted collateral of $48 million and $83 million, respectively, in the normal course of business related to these contracts.

FHNF buys and sells various types of securities for its clients. When these securities settle on a delayed basis, they are considered forward contracts, and are generally not subject to master netting agreements. For futures and options, FHN transacts through a third party, and the transactions are subject to margin and collateral maintenance requirements. In the event of default, open positions can be offset along with the associated collateral.

For this disclosure, FHN considers the impact of master netting and other similar agreements which allow FHN to settle all contracts with a single counterparty on a net basis and to offset the net derivative asset or liability position with the related securities and cash collateral. The application of the collateral cannot reduce the net derivative asset or liability position below zero, and therefore any excess collateral is not reflected in the following tables.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 14—DERIVATIVES

The following table provides details of derivative assets and collateral received as presented on the Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023:

DERIVATIVE ASSETS & COLLATERAL RECEIVED
																								Gross amounts not offset in the Balance Sheets
(Dollars in millions)						Gross amounts of recognized assets						Gross amounts offset in the Balance Sheets						Net amounts of assets presented in the Balance Sheets (a)						Derivative liabilities available for offset						Collateral received						Net amount
Derivative assets:
September 30, 2024
Interest rate derivative contracts						$	431					$	—					$	431					$	(102)					$	(295)					$	34
Forward contracts						6						—						6						(2)						(1)						3
						$	437					$	—					$	437					$	(104)					$	(296)					$	37
December 31, 2023
Interest rate derivative contracts						$	567					$	—					$	567					$	(75)					$	(486)					$	6
Forward contracts						9						—						9						(4)						(3)						2
						$	576					$	—					$	576					$	(79)					$	(489)					$	8

(a)Included in other assets on the Consolidated Balance Sheets. As of September 30, 2024 and December 31, 2023, $1 million and $1 million, respectively, of derivative assets have been excluded from these tables because they are generally not subject to master netting or similar agreements.

The following table provides details of derivative liabilities and collateral pledged as presented on the Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023:

 

DERIVATIVE LIABILITIES & COLLATERAL PLEDGED
																								Gross amounts not offset  in the Balance Sheets
(Dollars in millions)						Gross amounts of recognized liabilities						Gross amounts offset in the Balance Sheets						Net amounts of liabilities presented in the Balance Sheets (a)						Derivative assets  available for offset						Collateral pledged						Net amount
Derivative liabilities:
September 30, 2024
Interest rate derivative contracts						$	484					$	—					$	484					$	(102)					$	(103)					$	279
Forward contracts						4						—						4						(2)						(2)						—
						$	488					$	—					$	488					$	(104)					$	(105)					$	279
December 31, 2023
Interest rate derivative contracts						$	666					$	—					$	666					$	(75)					$	(164)					$	427
Forward contracts						9						—						9						(4)						(5)						—
						$	675					$	—					$	675					$	(79)					$	(169)					$	427

(a)Included in other liabilities on the Consolidated Balance Sheets. As of September 30, 2024 and December 31, 2023, $32 million and $24 million, respectively, of derivative liabilities (primarily Visa-related derivatives) have been excluded from these tables because they are generally not subject to master netting or similar agreements.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 15—MASTER NETTING & SIMILAR AGREEMENTS

Note 15—Master Netting and Similar Agreements—Repurchase, Reverse Repurchase, and Securities Borrowing Transactions

For repurchase, reverse repurchase and securities borrowing transactions, FHN and each counterparty have the ability to offset all open positions and related collateral in the event of default. Due to the nature of these transactions, the value of the collateral for each transaction approximates the value of the corresponding receivable or payable. For repurchase agreements through FHN’s fixed income business (securities purchased under agreements to resell and securities sold under agreements to repurchase), transactions are collateralized by securities and/or government guaranteed loans which are delivered on the settlement date and are maintained throughout the term of the transaction. For FHN’s repurchase agreements through banking activities (securities sold under agreements to repurchase), securities are typically pledged at settlement and not released until maturity. For asset positions, the collateral is not included on FHN’s Consolidated Balance Sheets. For liability positions, securities collateral pledged by FHN is generally represented within FHN’s trading or available-for-sale securities portfolios.

For this disclosure, FHN considers the impact of master netting and other similar agreements that allow FHN to settle all contracts with a single counterparty on a net basis and to offset the net asset or liability position with the related securities collateral. The application of the collateral cannot reduce the net asset or liability position below zero, and therefore any excess collateral is not reflected in the tables below.

Securities purchased under agreements to resell is included in federal funds sold and securities purchased under agreements to resell in the Consolidated Balance Sheets. Securities sold under agreements to repurchase is included in short-term borrowings.

The following table provides details of securities purchased under agreements to resell and collateral pledged by counterparties as of September 30, 2024 and December 31, 2023:

SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL
																								Gross amounts not offset in the Balance Sheets
(Dollars in millions)						Gross amounts of recognized assets						Gross amounts offset in the Balance Sheets						Net amounts of assets presented in the Balance Sheets						Offsetting securities sold under agreements to repurchase						Securities collateral (not recognized on FHN’s Balance Sheets)						Net amount
Securities purchased under agreements to resell:
September 30, 2024						$	796					$	—					$	796					$	—					$	(791)					$	5
December 31, 2023						519						—						519						—						(516)						3

The following table provides details of securities sold under agreements to repurchase and collateral pledged by FHN as of September 30, 2024 and December 31, 2023:

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
																								Gross amounts not offset in the Balance Sheets
(Dollars in millions)						Gross amounts of recognized liabilities						Gross amounts offset in the Balance Sheets						Net amounts of liabilities presented in the Balance Sheets						Offsetting securities purchased under agreements to resell						Securities/ government guaranteed loans collateral						Net amount
Securities sold under agreements to repurchase:
September 30, 2024						$	1,611					$	—					$	1,611					$	—					$	(1,611)					$	—
December 31, 2023						1,921						—						1,921						—						(1,921)						—

Due to the short duration of securities sold under agreements to repurchase and the nature of collateral involved, the risks associated with these transactions are considered minimal.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 15—MASTER NETTING & SIMILAR AGREEMENTS

The following table provides details, by collateral type, of the remaining contractual maturity of securities sold under agreements to repurchase as of September 30, 2024 and December 31, 2023:

MATURITIES OF SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
						September 30, 2024
(Dollars in millions)						Overnight and Continuous						Up to 30 Days						Total
Securities sold under agreements to repurchase:
Government agency issued MBS						$	1,376					$	—					$	1,376
Government agency issued CMO						235						—						235
Total securities sold under agreements to repurchase						$	1,611					$	—					$	1,611
						December 31, 2023
(Dollars in millions)						Overnight and Continuous						Up to 30 Days						Total
Securities sold under agreements to repurchase:
Government agency issued MBS						$	1,717					$	—					$	1,717
Government agency issued CMO						161						—						161
Other U.S. government agencies						43						—						43
Total securities sold under agreements to repurchase						$	1,921					$	—					$	1,921

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

Note 16—Fair Value of Assets and Liabilities

FHN groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. This hierarchy requires FHN to maximize the use of observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Each fair value measurement is placed into the proper level based on the lowest level of significant input. These levels are:

•Level 1—Valuation is based upon quoted prices for identical instruments traded in active markets.

•Level 2—Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

•Level 3—Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models, and similar techniques.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

Recurring Fair Value Measurements

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023:

BALANCES OF ASSETS & LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
						September 30, 2024
(Dollars in millions)						Level 1						Level 2						Level 3						Total
Trading securities:
U.S. treasuries						$	—					$	20					$	—					$	20
Government agency issued MBS						—						110						—						110
Government agency issued CMO						—						317						—						317
Other U.S. government agencies						—						266						—						266
States and municipalities						—						67						—						67
Corporate and other debt						—						751						—						751
Equity, mutual funds, and other						—						1						—						1
Interest-only strips						—						—						17						17
Total trading securities						—						1,532						17						1,549
Loans held for sale (elected fair value)						—						71						16						87
Securities available for sale:
Government agency issued MBS						—						4,299						—						4,299
Government agency issued CMO						—						2,255						—						2,255
Other U.S. government agencies						—						1,134						—						1,134
States and municipalities						—						560						—						560
Total securities available for sale						—						8,248						—						8,248
Other assets:
Deferred compensation mutual funds						110						—						—						110
Equity, mutual funds, and other						35						—						—						35
Derivatives, forwards and futures						6						—						—						6
Derivatives, interest rate contracts						—						431						—						431
Total other assets						151						431						—						582
Total assets						$	151					$	10,282					$	33					$	10,466
Trading liabilities:
U.S. treasuries						$	—					$	667					$	—					$	667
Other U.S. government agencies						—						6						—						6
Corporate and other debt						—						94						—						94
Total trading liabilities						—						767						—						767
Other liabilities:
Derivatives, forwards and futures						5						—						—						5
Derivatives, interest rate contracts						—						484						—						484
Derivatives, other						—						—						32						32
Total other liabilities						5						484						32						521
Total liabilities						$	5					$	1,251					$	32					$	1,288

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

						December 31, 2023
(Dollars in millions)						Level 1						Level 2						Level 3						Total
Trading securities:
U.S. treasuries						$	—					$	3					$	—					$	3
Government agency issued MBS						—						114						—						114
Government agency issued CMO						—						336						—						336
Other U.S. government agencies						—						152						—						152
States and municipalities						—						17						—						17
Corporate and other debt						—						777						—						777
Interest-only strips						—						—						13						13
Total trading securities						—						1,399						13						1,412
Loans held for sale (elected fair value)						—						42						26						68
Securities available for sale:
Government agency issued MBS						—						4,484						—						4,484
Government agency issued CMO						—						2,146						—						2,146
Other U.S. government agencies						—						1,172						—						1,172
States and municipalities						—						589						—						589
Total securities available for sale						—						8,391						—						8,391
Other assets:
Deferred compensation mutual funds						102						—						—						102
Equity, mutual funds, and other						34						—						—						34
Derivatives, forwards and futures						9						—						—						9
Derivatives, interest rate contracts						—						568						—						568
Total other assets						145						568						—						713
Total assets						$	145					$	10,400					$	39					$	10,584
Trading liabilities:
U.S. treasuries						$	—					$	426					$	—					$	426
Government agency issued MBS						—						1						—						1
Corporate and other debt						—						82						—						82
Total trading liabilities						—						509						—						509
Other liabilities:
Derivatives, forwards and futures						10						—						—						10
Derivatives, interest rate contracts						—						666						—						666
Derivatives, other						—						—						23						23
Total other liabilities						10						666						23						699
Total liabilities						$	10					$	1,175					$	23					$	1,208

			59			3Q24 FORM 10-Q REPORT

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

Changes in Recurring Level 3 Fair Value Measurements

The changes in Level 3 assets and liabilities measured at fair value for the three months ended September 30, 2024 and 2023 on a recurring basis are summarized as follows:

CHANGES IN LEVEL 3 ASSETS & LIABILITIES MEASURED AT FAIR VALUE
																		Three Months Ended September 30, 2024
(Dollars in millions)																		Interest-only strips												Loans held for sale																		Net  derivative liabilities
Balance on July 1, 2024																		$	16											$	15																	$	(18)
Total net gains (losses) included in net income																		(1)												1																		(15)
Sales																		(5)												—																		—
Settlements																		—												(1)																		1
Net transfers into (out of) Level 3																		7						(b)						1																		—
Balance on September 30, 2024																		$	17											$	16																	$	(32)
Net unrealized gains (losses) included in net income																		$	—					(c)						$	1					(a)												$	(15)					(d)

																		Three Months Ended September 30, 2023
(Dollars in millions)																		Interest-only strips												Loans held for sale																		Net  derivative liabilities
Balance on July 1, 2023																		$	36											$	22																	$	(34)
Total net gains (losses) included in net income																		(4)												—																		—
Sales																		(30)												—																		—
Settlements																		—												(1)																		8
Net transfers into (out of) Level 3																		21						(b)						—																		—
Balance on September 30, 2023																		$	23											$	21																	$	(26)
Net unrealized gains (losses) included in net income																		$	(2)					(c)						$	—					(a)												$	—					(d)

(a)Primarily included in mortgage banking income on the Consolidated Statements of Income.

(b)Transfers into interest-only strips Level 3 measured on a recurring basis reflect movements from loans held for sale (Level 2 nonrecurring).

(c)Primarily included in fixed income on the Consolidated Statements of Income.

(d)Included in other expense on the Consolidated Statements of Income.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

The changes in Level 3 assets and liabilities measured at fair value for the nine months ended September 30, 2024 and 2023 on a recurring basis are summarized as follows:

CHANGES IN LEVEL 3 ASSETS & LIABILITIES MEASURED AT FAIR VALUE
																		Nine Months Ended September 30, 2024
(Dollars in millions)																		Interest-only strips												Loans held for sale																		Net  derivative liabilities
Balance on January 1, 2024																		$	13											$	26																	$	(23)
Total net gains (losses) included in net income																		(3)												1																		(15)
Purchases																		—												2																		—
Sales																		(15)												(13)																		—
Settlements																		—												(2)																		6
Net transfers into (out of) Level 3																		22						(b)						2																		—
Balance on September 30, 2024																		$	17											$	16																	$	(32)
Net unrealized gains (losses) included in net income																		$	(1)					(c)						$	1					(a)												$	(15)					(d)

																		Nine Months Ended September 30, 2023
(Dollars in millions)																		Interest-only strips												Loans held for sale																		Net  derivative liabilities
Balance on January 1, 2023																		$	25											$	22																	$	(27)
Total net gains (losses) included in net income																		(10)												—																		(15)
Purchases																		—												2																		—
Sales																		(38)												(2)																		—
Settlements																		—												(1)																		16
Net transfers into (out of) Level 3																		46						(b)						—																		—
Balance on September 30, 2023																		$	23											$	21																	$	(26)
Net unrealized gains (losses) included in net income																		$	(4)					(c)						$	—					(a)												$	(15)					(d)

(a)Primarily included in mortgage banking income on the Consolidated Statements of Income.

(b)Transfers into interest-only strips Level 3 measured on a recurring basis reflect movements from loans held for sale (Level 2 nonrecurring).

(c)Primarily included in fixed income on the Consolidated Statements of Income.

(d)Included in other expense on the Consolidated Statements of Income.

There were no net unrealized gains (losses) for Level 3 assets and liabilities included in other comprehensive income as of September 30, 2024 and 2023.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

Nonrecurring Fair Value Measurements

From time to time, FHN may be required to measure certain other financial assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower of cost or market (LOCOM) accounting or write-downs of individual assets. For assets

measured at fair value on a nonrecurring basis which were still held on the Consolidated Balance Sheets at September 30, 2024 and December 31, 2023, respectively, the following tables provide the level of valuation assumptions used to determine each adjustment and the related carrying value.

LEVEL OF VALUATION ASSUMPTIONS FOR ASSETS MEASURED AT FAIR VALUE ON A NONRECURRING BASIS
						Carrying value at September 30, 2024
(Dollars in millions)						Level 1						Level 2						Level 3						Total
Loans held for sale—SBAs and USDA						$	—					$	379					$	—					$	379
Loans and leases (a)						—						—						375						375
OREO (b)						—						—						4						4

 

						Carrying value at December 31, 2023
(Dollars in millions)						Level 1						Level 2						Level 3						Total
Loans held for sale—SBAs and USDA						$	—					$	406					$	—					$	406
Loans and leases (a)						—						—						245						245
OREO (b)						—						—						4						4
Other assets (c)						—						—						90						90

(a)Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for credit losses.

(b)Represents the fair value and related losses of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related to government-insured mortgages.

(c)Represents tax credit investments accounted for under the equity method.

For assets measured on a nonrecurring basis which were still held on the Consolidated Balance Sheets at period end, the following table provides information about the fair value adjustments recorded during the three and nine months ended September 30, 2024 and 2023:

FAIR VALUE ADJUSTMENTS ON ASSETS MEASURED ON A NONRECURRING BASIS
			Net gains (losses) Three Months Ended September 30,												Net gains (losses) Nine Months Ended September 30,
(Dollars in millions)			2024						2023						2024						2023
Loans held for sale—SBAs and USDA			$	(1)					$	(1)					$	(1)					$	(2)
Loans and leases (a)			(18)						(15)						(65)						(29)
Other assets (b)			—						(1)						—						(5)
			$	(19)					$	(17)					$	(66)					$	(36)

(a)Write-downs on these loans are recognized as part of provision for credit losses.

(b)Represents tax credit investments accounted for under the equity method.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

Lease asset impairments recognized represent the reduction in value of the right-of-use assets associated with leases that are being exited in advance of the contractual lease expiration.

Impairments are measured using a discounted cash flow methodology, which is considered a Level 3 valuation.

Impairments of long-lived tangible assets reflect locations where the associated land and building are either owned or leased. The fair values of owned sites were determined using estimated sales prices from appraisals and broker opinions less estimated costs to sell with adjustments

upon final disposition. The fair values of owned assets in leased sites (e.g., leasehold improvements) were determined using a discounted cash flow approach, based on the revised estimated useful lives of the related assets. Both measurement methodologies are considered Level 3 valuations. Impairment adjustments recognized upon disposition of a location are considered Level 2 valuations.

Fixed asset and leased asset impairments were immaterial for the three and nine months ended September 30, 2024 and 2023.

Level 3 Measurements

The following table provides information regarding the unobservable inputs utilized in determining the fair value of Level 3 recurring and nonrecurring measurements as of September 30, 2024 and December 31, 2023:

UNOBSERVABLE INPUTS USED IN LEVEL 3 FAIR VALUE MEASUREMENTS

(Dollars in millions)

Values Utilized

Level 3 Class

Fair Value at September 30, 2024

Valuation Techniques

Unobservable Input

Range

Weighted Average (c)

Trading securities - SBA interest-only strips

$

17

Discounted cash flow

Constant prepayment rate

16% - 25%

17%

Bond equivalent yield

7% - 18%

18%

Loans held for sale - residential real estate

$

16

Discounted cash flow

Prepayment speeds - First mortgage

2% - 7%

3%

Foreclosure losses

60% - 65%

65%

Loss severity trends - First mortgage

0% - 1% of UPB

0%

Derivative liabilities, other

$

32

Discounted cash flow

Visa covered litigation resolution amount

$3.1 billion - $4.1 billion

$3.8 billion

Probability of resolution scenarios

10% - 25%

19%

Time until resolution

6 - 36 months

26 months

Loans and leases (a)

$

375

Appraisals from comparable properties

Marketability adjustments for specific properties

0% - 25% of appraisal

NM

Other collateral valuations

Borrowing base certificates liquidation adjustment

25% - 50% of gross value

NM

Financial Statements liquidation adjustment

50% - 100% of reported value

NM

Auction appraisals marketability adjustment

0% - 10% of reported value

NM

OREO (b)

$

4

Appraisals from comparable properties

Adjustment for value changes since appraisal

0% - 10% of appraisal

NM

 NM - Not meaningful

(a)Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for credit losses.

(b)Represents the fair value of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related to government-insured mortgages.

(c)Weighted averages are determined by the relative fair value of the instruments or the relative contribution to an instrument's fair value.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

(Dollars in millions)

Values Utilized

Level 3 Class

Fair Value at December 31, 2023

Valuation Techniques

Unobservable Input

Range

Weighted Average (c)

Trading securities - SBA interest-only strips

$

13

Discounted cash flow

Constant prepayment rate

14% - 15%

14%

Bond equivalent yield

18% - 21%

18%

Loans held for sale - residential real estate

$

26

Discounted cash flow

Prepayment speeds - First mortgage

2% - 7%

3%

Foreclosure losses

64% - 68%

65%

Loss severity trends - First mortgage

0% - 3% of UPB

2%

Derivative liabilities, other

$

23

Discounted cash flow

Visa covered litigation resolution amount

$5.7 billion - $6.7 billion

$6.3 billion

Probability of resolution scenarios

10% - 25%

18%

Time until resolution

6 - 36 months

24 months

Loans and leases (a)

$

245

Appraisals from comparable properties

Marketability adjustments for specific properties

0% - 25% of appraisal

NM

Other collateral valuations

Borrowing base certificates liquidation adjustment

25% - 50% of gross value

NM

Financial Statements liquidation adjustment

50% - 100% of reported value

NM

Auction appraisals marketability adjustment

0% - 10% of reported value

NM

OREO (b)

$

4

Appraisals from comparable properties

Adjustment for value changes since appraisal

0% - 10% of appraisal

NM

Other assets (d)

$

90

Discounted cash flow

Adjustments to current sales yields for specific properties

0% - 15% adjustment to yield

NM

Appraisals from comparable properties

Marketability adjustments for specific properties

0% - 25% of appraisal

NM

NM - Not meaningful

(a)Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell. Write-downs on these loans are recognized as part of provision for credit losses.

(b)Represents the fair value of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related to government-insured mortgages.

(c)Weighted averages are determined by the relative fair value of the instruments or the relative contribution to an instrument's fair value.

(d)Represents tax credit investments accounted for under the equity method.

Trading Securities - SBA interest-only strips

Increases (decreases) in estimated prepayment rates and bond equivalent yields negatively (positively) affect the value of SBA interest-only strips. Management additionally considers whether the loans underlying related SBA interest-only strips are delinquent, in default or prepaying, and adjusts the fair value down 20 - 100% depending on the length of time in default.

Loans held for sale

Foreclosure losses and prepayment rates are significant unobservable inputs used in the fair value measurement

of FHN’s residential real estate loans held for sale. Loss severity trends are also assessed to evaluate the reasonableness of fair value estimates resulting from discounted cash flows methodologies as well as to estimate fair value for newly repurchased loans and loans that are near foreclosure. Significant increases (decreases) in any of these inputs in isolation would result in significantly lower (higher) fair value measurements. All observable and unobservable inputs are re-assessed quarterly.

Increases (decreases) in estimated prepayment rates and bond equivalent yields negatively (positively) affect the value of unguaranteed interests in SBA loans.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

Unguaranteed interest in SBA loans held for sale are carried at less than the outstanding balance due to credit risk estimates. Credit risk adjustments may be reduced if prepayment is likely or as consistent payment history is realized. Management also considers other factors such as delinquency or default and adjusts the fair value accordingly.

Derivative liabilities

In conjunction with pre-2020 sales of Visa Class B shares, FHN and the purchasers entered into derivative transactions whereby FHN will make, or receive, cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. FHN uses a discounted cash flow methodology in order to estimate the fair value of FHN’s derivative liabilities associated with its prior sales of Visa Class B shares. The methodology includes estimation of both the resolution amount for Visa’s Covered Litigation matters as well as the length of time until the resolution occurs. Significant increases (decreases) in either of these inputs in isolation would result in significantly higher (lower) fair value measurements for the derivative liabilities. Additionally, FHN performs a probability weighted multiple resolution scenario to calculate the estimated fair value of these derivative liabilities. Assignment of higher (lower) probabilities to the larger potential resolution scenarios would result in an increase (decrease) in the estimated fair value of the derivative liabilities. Since this estimation process requires application of judgment in developing significant unobservable inputs used to determine the possible outcomes and the probability weighting assigned to each scenario, these derivatives have been classified within Level 3 in fair value measurements disclosures.

Loans and leases and Other Real Estate Owned

Collateral-dependent loans and OREO are primarily valued using appraisals based on sales of comparable properties in the same or similar markets. Other collateral (receivables, inventory, equipment, etc.) is valued through borrowing base certificates, financial statements and/or auction valuations. These valuations are discounted based on the quality of reporting, knowledge of the marketability/collectability of the collateral and historical disposition rates.

Other assets – tax credit investments

Prior to 2024, the estimated fair value of tax credit investments accounted for under the equity method was

generally determined in relation to the yield (i.e., future tax credits to be received) an acquirer of these investments expected in relation to the yields experienced on current new issue and/or secondary market transactions. Thus, as tax credits were recognized, the future yield to a market participant was reduced, resulting in consistent impairment of the individual investments. Individual investments were reviewed for impairment quarterly, which included the consideration of additional marketability discounts related to specific investments which typically included consideration of the underlying property’s appraised value.

Fair Value Option

FHN previously elected the fair value option on a prospective basis for substantially all types of mortgage loans originated for sale purposes. FHN determined that the election reduces certain timing differences and better matches changes in the value of such loans with changes in the value of derivatives and forward delivery commitments used as economic hedges for these assets at the time of election.

Repurchased loans relating to mortgage banking operations conducted prior to the IBKC merger are recognized within loans held for sale at fair value at the time of repurchase, which includes consideration of the credit status of the loans and the estimated liquidation value. FHN has elected to continue recognition of these loans at fair value in periods subsequent to reacquisition. Due to the credit-distressed nature of the vast majority of repurchased loans and the related loss severities experienced upon repurchase, FHN believes that the fair value election provides a more timely recognition of changes in value for these loans that occur subsequent to repurchase. Absent the fair value election, these loans would be subject to valuation at the LOCOM value, which would prevent subsequent values from exceeding the initial fair value, determined at the time of repurchase, but would require recognition of subsequent declines in value. Thus, the fair value election provides for a more timely recognition of any potential future recoveries in asset values while not affecting the requirement to recognize subsequent declines in value.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

The following table reflects the differences between the fair value carrying amount of residential real estate loans held for sale measured at fair value in accordance with management’s election and the aggregate unpaid principal amount FHN is contractually entitled to receive at maturity.

DIFFERENCES BETWEEN FAIR VALUE CARRYING AMOUNTS AND CONTRACTUAL AMOUNTS OF RESIDENTIAL REAL ESTATE LOANS REPORTED AT FAIR VALUE
						September 30, 2024
(Dollars in millions)						Fair value carrying amount						Aggregate unpaid principal						Fair value carrying amount less aggregate unpaid principal
Residential real estate loans held for sale reported at fair value:
Total loans						$	87					$	91					$	(4)
Nonaccrual loans						3						5						(2)
						December 31, 2023
(Dollars in millions)						Fair value carrying amount						Aggregate unpaid principal						Fair value carrying amount less aggregate unpaid principal
Residential real estate loans held for sale reported at fair value:
Total loans						$	68					$	73					$	(5)
Nonaccrual loans						2						5						(3)
Loans 90 days or more past due and still accruing						1						1						—

Assets and liabilities accounted for under the fair value election are initially measured at fair value with subsequent changes in fair value recognized in earnings. Such changes in the fair value of assets and liabilities for which FHN elected the fair value option are included in current period earnings with classification in the income statement line item reflected in the following table:

CHANGES IN FAIR VALUE RECOGNIZED IN NET INCOME
			Three Months Ended September 30,												Nine Months Ended September 30,
(Dollars in millions)			2024						2023						2024						2023
Changes in fair value included in net income:
Mortgage banking noninterest income
Loans held for sale			$	—					$	(1)					$	1					$	—

For the three and nine months ended September 30, 2024 and 2023, the amount for residential real estate loans held for sale included an insignificant amount of gains in pre-tax earnings that are attributable to changes in instrument-specific credit risk. The portion of the fair value adjustments related to credit risk was determined based on estimated default rates and estimated loss severities. Interest income on residential real estate loans held for sale measured at fair value is calculated based on the note rate of the loan and is recorded in the interest income section of the Consolidated Statements of Income as interest on loans held for sale.

Determination of Fair Value

Fair values are based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following describes the

assumptions and methodologies used to estimate the fair value of financial instruments recorded at fair value in the Consolidated Balance Sheets and for estimating the fair value of financial instruments for which fair value is disclosed.

Short-term financial assets

Federal funds sold, securities purchased under agreements to resell, and interest-bearing deposits with other financial institutions and the Federal Reserve are carried at historical cost. The carrying amount is a reasonable estimate of fair value because of the relatively short time between the origination of the instrument and its expected realization.

Trading securities and trading liabilities

Trading securities and trading liabilities are recognized at fair value through current earnings. Trading inventory held for broker-dealer operations is included in trading

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

securities and trading liabilities. Broker-dealer long positions are valued at bid price in the bid-ask spread. Short positions are valued at the ask price. Inventory positions are valued using observable inputs including current market transactions, benchmark yields, credit spreads, and consensus prepayment speeds. Trading loans are valued using observable inputs including current market transactions, swap rates, mortgage rates, and consensus prepayment speeds.

Trading securities - SBA interest-only strips

Interest-only strips are valued at fair value based on an income approach using an internal valuation model. The internal valuation model includes assumptions regarding projections of future cash flows, prepayment rates, default rates and interest-only strip terms. These securities bear the risk of loan prepayment or default that may result in FHN not recovering all or a portion of its recorded investment. When appropriate, valuations are adjusted for various factors including default or prepayment status of the underlying SBA loans. Because of the inherent uncertainty of valuation, those estimated values may be higher or lower than the values that would have been used had a ready market for the securities existed, and may change in the near term.

Securities available for sale and held to maturity

Valuations of debt securities are performed using observable inputs obtained from market transactions in similar securities. Typical inputs include benchmark yields, consensus prepayment speeds, and credit spreads. Trades from similar securities and broker quotes are used to support these valuations.

Loans held for sale

FHN determines the fair value of loans held for sale using either current transaction prices or discounted cash flow models. Fair values are determined using current transaction prices and/or values on similar assets when available, including committed bids for specific loans or loan portfolios. Uncommitted bids may be adjusted based on other available market information.

The fair value of residential real estate loans held for sale is determined using a discounted cash flow model that incorporates both observable and unobservable inputs. Inputs in the discounted cash flow model include current mortgage rates for similar products, estimated prepayment rates, foreclosure losses, and various loan performance measures (delinquency, LTV, credit score). Adjustments for delinquency and other differences in loan characteristics are typically reflected in the model’s discount rates. Loss severity trends and the value of underlying collateral are also considered in assessing the appropriate fair value for severely delinquent loans and loans in foreclosure. The valuation of HELOCs also incorporates estimated cancellation rates for loans expected to become delinquent.

Non-mortgage consumer loans held for sale are valued using committed bids for specific loans or loan portfolios or current market pricing for similar assets with adjustments for differences in credit standing (delinquency, historical default rates for similar loans), yield, collateral values and prepayment rates. If pricing for similar assets is not available, a discounted cash flow methodology is utilized, which incorporates all of these factors into an estimate of investor required yield for the discount rate.

FHN utilizes quoted market prices of similar instruments or broker and dealer quotations to value the SBA and USDA guaranteed loans. FHN values SBA-unguaranteed interests in loans held for sale based on individual loan characteristics, such as industry type and pay history which generally follows an income approach. Furthermore, these valuations are adjusted for changes in prepayment estimates and are reduced due to restrictions on trading. The fair value of other non-residential real estate loans held for sale is approximated by their carrying values based on current transaction values.

Mortgage loans held for investment at fair value option

The fair value of mortgage loans held for investment at fair value option is determined by a third party using a discounted cash flow model using various assumptions about future loan performance (constant prepayment rate, constant default rate and loss severity trends) and market discount rates.

Loans held for investment

The fair values of mortgage loans are estimated using an exit price methodology that is based on present values using the interest rate that would be charged for a similar loan to a borrower with similar risk, weighted for varying maturity dates and adjusted for a liquidity discount based on the estimated time period to complete a sale transaction with a market participant.

Other loans and leases are valued based on present values using the interest rate that would be charged for a similar instrument to a borrower with similar risk, applicable to each category of instruments, and adjusted for a liquidity discount based on the estimated time period to complete a sale transaction with a market participant.

For loans measured using the estimated fair value of collateral less costs to sell, fair value is estimated using appraisals of the collateral. Collateral values are monitored and additional write-downs are recognized if it is determined that the estimated collateral values have declined further. Estimated costs to sell are based on current amounts of disposal costs for similar assets. Carrying value is considered to reflect fair value for these loans.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

Derivative assets and liabilities

The fair value for forwards and futures contracts is based on current transactions involving identical securities. Futures contracts are exchange-traded and thus have no credit risk factor assigned as the risk of non-performance is limited to the clearinghouse used.

Valuations of other derivatives (primarily interest rate contracts) are based on inputs observed in active markets for similar instruments. Typical inputs include benchmark yields, option volatility and option skew. Centrally cleared derivatives are discounted using SOFR as required by clearinghouses. In measuring the fair value of these derivative assets and liabilities, FHN has elected to consider credit risk based on the net exposure to individual counterparties. Credit risk is mitigated for these instruments through the use of mutual margining and master netting agreements as well as collateral posting requirements. For derivative contracts with daily cash margin requirements that are considered settlements, the daily margin amount is netted within derivative assets or liabilities. Any remaining credit risk related to interest rate derivatives is considered in determining fair value through evaluation of additional factors such as client loan grades and debt ratings. Foreign currency related derivatives also utilize observable exchange rates in the determination of fair value. The determination of fair value for FHN’s derivative liabilities associated with its prior sales of Visa Class B shares are classified within Level 3 in the fair value measurements disclosure as previously discussed in the unobservable inputs discussion.

The fair value of risk participations is determined in reference to the fair value of the related derivative contract between the borrower and the lead bank in the participation structure, which is determined consistent with the valuation process discussed above. This value is adjusted for the pro rata portion of the reference derivative’s notional value and an assessment of credit risk for the referenced borrower.

OREO

OREO primarily consists of properties that have been acquired in satisfaction of debt. These properties are carried at the lower of the outstanding loan amount or estimated fair value less estimated costs to sell the real estate. Estimated fair value is determined using appraised values with subsequent adjustments for deterioration in values that are not reflected in the most recent appraisal.

Other assets

For disclosure purposes, other assets consist of tax credit investments, FRB and FHLB Stock, deferred compensation mutual funds and equity investments (including other mutual funds) with readily determinable fair values. For periods prior to 2024, tax credit investments accounted for under the equity method were written down to estimated fair value quarterly based on the estimated

value of the associated tax credits which incorporated estimates of required yield for hypothetical investors. Subsequent to 2023, the fair value of tax credit investments is estimated using recent transaction information with adjustments for differences in individual investments. Deferred compensation mutual funds are recognized at fair value, which is based on quoted prices in active markets. Investments in the stock of the Federal Reserve Bank and Federal Home Loan Banks are recognized at historical cost in the Consolidated Balance Sheets which is considered to approximate fair value. Investments in mutual funds are measured at the funds’ reported closing net asset values. Investments in equity securities are valued using quoted market prices when available.

Defined maturity deposits

The fair value of these deposits is estimated by discounting future cash flows to their present value. Future cash flows are discounted by using the current market rates of similar instruments applicable to the remaining maturity. For disclosure purposes, defined maturity deposits include all time deposits.

Short-term financial liabilities

The fair value of federal funds purchased, securities sold under agreements to repurchase, and other short-term borrowings are approximated by the book value. The carrying amount is a reasonable estimate of fair value because of the relatively short time between the origination of the instrument and its expected realization.

Loan commitments

Fair values of these commitments are based on fees charged to enter into similar agreements taking into account the remaining terms of the agreements and the counterparties’ credit standing.

Other commitments

Fair values of these commitments are based on fees charged to enter into similar agreements.

The following fair value estimates are determined as of a specific point in time utilizing various assumptions and estimates. The use of assumptions and various valuation techniques, as well as the absence of secondary markets for certain financial instruments, reduces the comparability of fair value disclosures between financial institutions. Due to market illiquidity, the fair values for loans and leases, loans held for sale, and term borrowings as of September 30, 2024 and December 31, 2023, involve the use of significant internally-developed pricing assumptions for certain components of these line items. The assumptions and valuations utilized for this disclosure are considered to reflect inputs that market participants would use in transactions involving these instruments as of the measurement date. The valuations of legacy assets, particularly consumer loans and TRUPS loans within the

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

Corporate segment, are influenced by changes in economic conditions since origination and risk perceptions of the financial sector. These considerations affect the estimate of a potential acquirer’s cost of capital and cash flow volatility assumptions from these assets and the resulting fair value measurements may depart significantly from FHN’s internal estimates of the intrinsic value of these assets.

Assets and liabilities that are not financial instruments — such as premises and equipment, goodwill, other intangible assets such as the value of long-term relationships with deposit and trust clients, deferred

taxes, and certain other assets and other liabilities — have not been included in the following table. Additionally, the fair value measurements presented in the following table are solely for financial instruments as of the measurement date and do not consider the earnings potential of our various business lines. Accordingly, the total of the fair value amounts does not represent, and should not be construed to represent, the underlying value of FHN.

The following table summarizes the book value and estimated fair value of financial instruments recorded in the Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023:

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

BOOK VALUE AND ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
						September 30, 2024
						Book Value						Fair Value
(Dollars in millions)												Level 1						Level 2						Level 3						Total
Assets:
Loans and leases, net of allowance for loan and lease losses
Commercial:
Commercial, financial and industrial						$	32,740					$	—					$	—					$	32,231					$	32,231
Commercial real estate						14,487						—						—						14,262						14,262
Consumer:
Consumer real estate						13,731						—						—						13,374						13,374
Credit card and other						664						—						—						682						682
Total loans and leases, net of allowance for loan and lease losses						61,622						—						—						60,549						60,549
Short-term financial assets:
Interest-bearing deposits with banks						1,286						1,286						—						—						1,286
Federal funds sold						212						—						212						—						212
Securities purchased under agreements to resell						796						—						796						—						796
Total short-term financial assets						2,294						1,286						1,008						—						2,294
Trading securities (a)						1,549						—						1,532						17						1,549
Loans held for sale:
Mortgage loans (elected fair value) (a)						87						—						71						16						87
USDA & SBA loans - LOCOM						379						—						380						—						380
Mortgage loans - LOCOM						28						—						—						28						28
Total loans held for sale						494						—						451						44						495
Securities available for sale (a)						8,248						—						8,248						—						8,248
Securities held to maturity						1,282						—						1,144						—						1,144
Derivative assets (a)						437						6						431						—						437
Other assets:
Tax credit investments						690						—						—						668						668
Deferred compensation mutual funds						110						110						—						—						110
Equity, mutual funds, and other (b)						285						35						—						250						285
Total other assets						1,085						145						—						918						1,063
Total assets						$	77,011					$	1,437					$	12,814					$	61,528					$	75,779
Liabilities:
Defined maturity deposits						$	8,326					$	—					$	8,319					$	—					$	8,319
Trading liabilities (a)						767						—						767						—						767
Short-term financial liabilities:
Federal funds purchased						300						—						300						—						300
Securities sold under agreements to repurchase						1,610						—						1,610						—						1,610
Other short-term borrowings						675						—						675						—						675
Total short-term financial liabilities						2,585						—						2,585						—						2,585
Term borrowings:
Real estate investment trust-preferred						47						—						—						47						47
Term borrowings—new market tax credit investments						83						—						—						81						81
Secured borrowings						35						—						—						35						35
Junior subordinated debentures						151						—						—						150						150
Other long-term borrowings						886						—						879						—						879
Total term borrowings						1,202						—						879						313						1,192
Derivative liabilities (a)						521						5						484						32						521
Total liabilities						$	13,401					$	5					$	13,034					$	345					$	13,384

(a)Classes are detailed in the recurring measurement table.

(b)Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $47 million and FRB stock of $203 million.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

						December 31, 2023
						Book Value						Fair Value
(Dollars in millions)												Level 1						Level 2						Level 3						Total
Assets:
Loans and leases, net of allowance for loan and lease losses
Commercial:
Commercial, financial and industrial						$	32,294					$	—					$	—					$	31,673					$	31,673
Commercial real estate						14,044						—						—						13,831						13,831
Consumer:
Consumer real estate						13,417						—						—						12,605						12,605
Credit card and other						764						—						—						742						742
Total loans and leases, net of allowance for loan and lease losses						60,519						—						—						58,851						58,851
Short-term financial assets:
Interest-bearing deposits with banks						1,328						1,328						—						—						1,328
Federal funds sold						200						—						200						—						200
Securities purchased under agreements to resell						519						—						519						—						519
Total short-term financial assets						2,047						1,328						719						—						2,047
Trading securities (a)						1,412						—						1,399						13						1,412
Loans held for sale:
Mortgage loans (elected fair value) (a)						68						—						42						26						68
USDA & SBA loans - LOCOM						406						—						407						—						407
Mortgage loans - LOCOM						28						—						—						28						28
Total loans held for sale						502						—						449						54						503
Securities available for sale (a)						8,391						—						8,391						—						8,391
Securities held to maturity						1,323						—						1,161						—						1,161
Derivative assets (a)						577						9						568						—						577
Other assets:
Tax credit investments						665						—						—						653						653
Deferred compensation mutual funds						102						102						—						—						102
Equity, mutual funds, and other (b)						261						34						—						227						261
Total other assets						1,028						136						—						880						1,016
Total assets						$	75,799					$	1,473					$	12,687					$	59,798					$	73,958
Liabilities:
Defined maturity deposits						$	6,804					$	—					$	6,851					$	—					$	6,851
Trading liabilities (a)						509						—						509						—						509
Short-term financial liabilities:
Federal funds purchased						302						—						302						—						302
Securities sold under agreements to repurchase						1,921						—						1,921						—						1,921
Other short-term borrowings						326						—						326						—						326
Total short-term financial liabilities						2,549						—						2,549						—						2,549
Term borrowings:
Real estate investment trust-preferred						47						—						—						47						47
Term borrowings—new market tax credit investments						65						—						—						60						60
Secured borrowings						3						—						—						3						3
Junior subordinated debentures						150						—						—						150						150
Other long-term borrowings						885						—						824						—						824
Total term borrowings						1,150						—						824						260						1,084
Derivative liabilities (a)						699						10						666						23						699
Total liabilities						$	11,711					$	10					$	11,399					$	283					$	11,692

(a)Classes are detailed in the recurring measurement table.

(b)Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $24 million and FRB stock of $203 million.

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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 16—FAIR VALUE OF ASSETS AND LIABILITIES

The following table presents the contractual amount and fair value of unfunded loan commitments and standby and other commitments as of September 30, 2024 and December 31, 2023:

UNFUNDED COMMITMENTS
						Contractual Amount												Fair Value
(Dollars in millions)						September 30, 2024						December 31, 2023						September 30, 2024						December 31, 2023
Unfunded Commitments:
Loan commitments						$	21,379					$	24,579					$	1					$	1
Standby and other commitments						737						746						8						8

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PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

Item 2.     Management's Discussion and
Analysis of Financial Condition and Results of Operations

TABLE OF ITEM 2 TOPICS
Introduction			74
Executive Overview			74
Results of Operations			76
Analysis of Financial Condition			85
Capital			97
Risk Management			100
Repurchase Obligations			104
Market Uncertainties and Prospective Trends			104
Critical Accounting Policies and Estimates			108
Accounting Changes			108
Non-GAAP Information			110

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PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

Introduction

First Horizon Corporation (NYSE common stock trading symbol “FHN”) is a financial holding company headquartered in Memphis, Tennessee. FHN’s principal subsidiary, and only banking subsidiary, is First Horizon Bank. Through the Bank and other subsidiaries, FHN offers commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services.

At September 30, 2024, FHN had over 450 business locations in 24 states, including over 400 banking centers

in 12 states, and employed approximately 7,200 associates.

This MD&A should be read in conjunction with the accompanying unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements in Part I, Item 1, as well as other information contained in this document and FHN's 2023 Annual Report on Form 10-K.

Executive Overview

Financial Performance Summary

Third Quarter 2024 Highlights

FHN reported third quarter 2024 net income available to common shareholders of $213 million, or $0.40 per diluted share, compared to $184 million, or $0.34 per diluted share, in second quarter 2024 and $129 million, or $0.23 per diluted share, in third quarter 2023.

Net interest income of $627 million decreased $2 million compared to second quarter 2024 from increased deposit costs and higher levels of brokered deposits, partially offset by improvement in loan repricing. Net interest income increased $22 million compared to third quarter 2023, driven by the impact of higher yields on earning assets partially offset by higher funding costs.

Provision for credit losses was $35 million for third quarter 2024 compared to $55 million for second quarter 2024 and $110 million for third quarter 2023. Net charge-offs were $24 million, or 15 basis points, compared to $34 million, or 22 basis points, in second quarter 2024 and $95 million, or 61 basis points, in third quarter 2023. Third quarter 2023 included a single $72 million charge-off for a company in bankruptcy.

Noninterest income of $200 million increased $14 million compared to second quarter 2024, largely driven by an increase in fixed income production. Noninterest income for third quarter 2024 increased $27 million, or 16%, compared to third quarter 2023, also largely driven by higher fixed income production.

Noninterest expense of $511 million increased $11 million from second quarter 2024, largely resulting from $15 million in Visa derivative valuation expense. Compared with third quarter 2023, noninterest expense increased $37 million, or 8%, largely reflecting an increase in personnel expense, expenses related to strategic investments and Visa derivative valuation expense.

Year-to-Date and Period End Highlights

For the nine months ended September 30, 2024, net income available to common shareholders was

$581 million, or $1.06 per diluted share, compared to $689 million, or $1.23 per diluted share, for the nine months ended September 30, 2023.

Net interest income decreased $42 million, largely driven by higher funding costs partially offset by higher earning asset yields and loan growth.

Provision for credit losses of $140 million decreased $70 million for the year-to-date period of 2024 compared to the same period of 2023, largely reflecting the impact of a single large credit loss in 2023.

Noninterest income for the year-to-date period decreased $164 million, or 22%, primarily from the gain on merger termination in 2023, partially offset by higher fixed income, mortgage banking income and brokerage, management fees and commissions in 2024.

Noninterest expense for the year-to-date period increased $19 million, or 1%, largely attributable to higher personnel expense, deposit insurance expense and legal and professional fees partially offset by lower contributions expense.

Period-end loans and leases of $62.4 billion increased $1.2 billion, or 2%, from December 31, 2023. Commercial loan growth of $948 million was driven by growth in loans to mortgage companies and CRE loans partially offset by a decline in other C&I loans. Consumer loan growth of $205 million was largely driven by growth in consumer real estate loans.

Period-end deposits of $66.6 billion increased $795 million, or 1%, compared to December 31, 2023. Interest-bearing deposits increased $1.8 billion and noninterest-bearing deposits decreased $992 million.

The Common Equity Tier 1 ratio was 11.23% at September 30, 2024 compared to 11.40% at December 31, 2023. Tier 1 risk-based capital and total risk-based capital ratios at September 30, 2024 were 12.24% and 13.88%, down from 12.42% and 13.96% at December 31, 2023, respectively.

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PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

The following portions of this MD&A focus in more detail on the results of operations for the three and nine months ended September 30, 2024, the three months ended June 30, 2024, and the three and nine months ended

September 30, 2023 and on information about FHN's financial condition, loan and lease portfolio, liquidity, funding sources, capital and other matters.

Table I.2.1

KEY PERFORMANCE INDICATORS

			As of or for the three months ended																		As of or for the nine months ended
(Dollars in millions, except per share data)			September 30, 2024						June 30, 2024						September 30, 2023						September 30, 2024						September 30, 2023
Pre-provision net revenue (a)			$	316					$	315					$	304					$	935					$	1,160
Diluted earnings per common share			$	0.40					$	0.34					$	0.23					$	1.06					$	1.23
Return on average assets (b)			1.08		%				1.00		%				0.68		%				1.02		%				1.19		%
Return on average common equity (c)			10.10		%				8.98		%				6.28		%				9.28		%				11.86		%
Return on average tangible common equity (a) (d)			12.60		%				11.29		%				7.95		%				11.62		%				15.24		%
Net interest margin (e)			3.31		%				3.38		%				3.17		%				3.35		%				3.47		%
Noninterest income to total revenue (f)			24.06		%				22.75		%				22.23		%				23.52		%				27.88		%
Efficiency ratio (g)			61.89		%				61.44		%				60.96		%				62.08		%				56.53		%
Allowance for loan and lease losses to total loans and leases			1.32		%				1.31		%				1.23		%				1.32		%				1.23		%
Net charge-offs (recoveries) to average loans and leases (annualized)			0.15		%				0.22		%				0.61		%				0.21		%				0.30		%
Total period-end equity to period-end assets			11.27		%				10.89		%				10.65		%				11.27		%				10.65		%
Tangible common equity to tangible assets (a)			8.56		%				8.14		%				7.76		%				8.56		%				7.76		%
Cash dividends declared per common share			$	0.15					$	0.15					$	0.15					$	0.45					$	0.45
Book value per common share			$	16.15					$	15.34					$	14.28					$	16.15					$	14.28
Tangible book value per common share (a)			$	13.02					$	12.22					$	11.22					$	13.02					$	11.22
Common equity Tier 1			11.23		%				11.05		%				11.12		%				11.23		%				11.12		%
Market capitalization			$	8,265					$	8,467					$	6,157					$	8,265					$	6,157

(a)    Represents a non-GAAP measure which is reconciled in the non-GAAP to GAAP reconciliation in Table I.2.26.

(b)    Calculated using annualized net income divided by average assets.

(c)    Calculated using annualized net income available to common shareholders divided by average common equity.

(d)    Calculated using annualized net income available to common shareholders divided by average tangible common equity.

(e)    Net interest margin is computed using total net interest income adjusted to an FTE basis assuming a statutory federal income tax rate of 21% and, where applicable, state income taxes.

(f)    Ratio is noninterest income excluding securities gains (losses) to total revenue excluding securities gains (losses).

(g)    Ratio is noninterest expense to total revenue excluding securities gains (losses).

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PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
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Results of Operations

Net Interest Income

Net interest income is FHN's largest source of revenue and is the difference between the interest earned on interest-earning assets (generally loans, leases and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (generally deposits and borrowed funds). The level of net interest income is primarily a function of the difference between the effective yield on average interest-earning assets and the effective cost of interest-bearing liabilities. These factors are influenced by the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as local economic conditions, competition for loans and deposits, the monetary policy of the FRB and market interest rates.

The following tables present the major components of net interest income and net interest margin:

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PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents

Table I.2.2

QUARTER-TO-DATE AVERAGE BALANCES, NET INTEREST INCOME & YIELDS/RATES

						Three Months Ended
(Dollars in millions)						September 30, 2024																		June 30, 2024																		September 30, 2023
						Average Balance						Interest Income/Expense						Yield/Rate						Average Balance						Interest Income/Expense						Yield/Rate						Average Balance						Interest Income/Expense						Yield/Rate
Assets:
Loans and leases:
Commercial loans and leases						$	47,758					$	813					6.78		%				$	47,485					$	799					6.78		%				$	47,041					$	779					6.58		%
Consumer loans						14,655						186						5.05						14,544						179						4.91						14,391						165						4.55
Total loans and leases						62,413						999						6.37						62,029						978						6.34						61,432						944						6.10
Loans held for sale						491						10						7.77						462						9						7.50						782						15						7.88
Investment securities						9,400						61						2.58						9,261						60						2.58						9,811						63						2.54
Trading securities						1,469						22						6.05						1,367						21						6.30						1,099						19						7.03
Federal funds sold						24						—						5.63						55						1						5.64						23						—						5.87
Securities purchased under agreements to resell						583						8						5.22						621						8						5.28						292						4						5.00
Interest-bearing deposits with banks						1,741						23						5.40						1,448						20						5.46						2,867						39						5.34
Total earning assets / Total interest income						$	76,121					$	1,123					5.88		%				$	75,243					$	1,097					5.86		%				$	76,306					$	1,084					5.64		%
Cash and due from banks						905																		904																		997
Goodwill and other intangible assets, net						1,669																		1,680																		1,714
Premises and equipment, net						578																		585																		592
Allowance for loan and lease losses						(827)																		(810)																		(766)
Other assets						3,920																		4,119																		4,377
Total assets						$	82,366																	$	81,721																	$	83,220
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Savings						$	26,062					$	225					3.43		%				$	25,462					$	208					3.29		%				$	24,963					$	219					3.48		%
Other interest-bearing deposits						15,923						114						2.85						16,484						117						2.86						15,329						102						2.64
Time deposits						8,167						95						4.63						6,683						74						4.45						8,087						88						4.35
Total interest-bearing deposits						50,152						434						3.44						48,629						399						3.30						48,379						409						3.36
Federal funds purchased						423						6						5.46						531						7						5.53						285						4						5.42
Securities sold under agreements to repurchase						1,708						17						3.89						1,677						17						3.99						1,685						17						4.05
Trading liabilities						576						6						4.13						605						7						4.46						276						3						4.20
Other short-term borrowings						884						12						5.52						1,267						17						5.48						1,790						25						5.42
Term borrowings						1,188						17						5.64						1,170						17						5.64						1,161						17						5.82
Total interest-bearing liabilities / Total interest expense						$	54,931					$	492					3.56		%				$	53,879					$	464					3.46		%				$	53,576					$	475					3.52		%
Noninterest-bearing liabilities:
Noninterest-bearing deposits						16,111																		16,332																		18,144
Other liabilities						2,196																		2,561																		2,522
Total liabilities						73,238																		72,772																		74,242
Shareholders' equity						8,833																		8,654																		8,683
Noncontrolling interest						295																		295																		295
Total shareholders' equity						9,128																		8,949																		8,978
Total liabilities and shareholders' equity						$	82,366																	$	81,721																	$	83,220
Net earnings assets / Net interest income (TE) / Net interest spread						$	21,190					$	631					2.32		%				$	21,364					$	633					2.40		%				$	22,730					$	609					2.12		%
Taxable equivalent adjustment												(4)						0.99												(4)						0.98												(4)						1.05
Net interest income / Net interest margin (a)												$	627					3.31		%										$	629					3.38		%										$	605					3.17		%

(a) Calculated using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21% and, where applicable, state income taxes.

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Third Quarter 2024 versus Second Quarter 2024

Net interest income of $627 million in third quarter 2024 decreased $2 million from second quarter 2024 and the net interest margin decreased 7 basis points to 3.31%, driven by increased deposit costs and higher levels of brokered deposits, partially offset by improvement in loan repricing. Loan yield increased 3 basis points and the cost of interest-bearing deposits increased 14 basis points.

Average earning assets of $76.1 billion in third quarter 2024 increased $878 million from second quarter 2024, largely due to a $384 million increase in average loans and leases, a $293 million increase in average interest-bearing deposits with banks, a $139 million increase in average investment securities and a $102 million increase in average trading securities, partially offset by a $38 million decrease in average securities purchased under agreements to resell. Average interest-bearing liabilities increased $1.1 billion, largely reflecting a $1.5 billion increase in average interest-bearing deposits, partially offset by a $383 million decrease in average other short-term borrowings.

Third Quarter 2024 versus Third Quarter 2023

Net interest income increased $22 million from third quarter 2023 and the net interest margin increased 14 basis points to 3.31% in third quarter 2024, driven by higher yields on earning assets, partially offset by higher funding costs. Yields on earning assets increased 24 basis points while funding costs increased 4 basis points.

Average earning assets decreased $185 million from third quarter 2023, largely attributable to a $1.1 billion decrease in average interest-bearing deposits with banks, partially offset by a $981 million increase in average loans and leases. Average interest-bearing liabilities increased $1.4 billion, largely driven by a $1.8 billion increase in average interest-bearing deposits and a $300 million increase in average trading liabilities, partially offset by a $906 million decrease in average other short-term borrowings.

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Table I.2.3

YEAR-TO-DATE AVERAGE BALANCES, NET INTEREST INCOME & YIELDS/RATES

						Nine Months Ended
						September 30, 2024																		September 30, 2023
(Dollars in millions)						Average Balance						Interest Income/Expense						Yield/Rate						Average Balance						Interest Income/Expense						Yield/Rate
Assets:
Loans and leases:
Commercial loans and leases						$	47,335					$	2,395					6.76		%				$	45,988					$	2,174					6.33		%
Consumer loans						14,532						537						4.92						13,834						459						4.40
Total loans and leases						61,867						2,932						6.33						59,822						2,633						5.88
Loans held for sale						469						27						7.69						704						40						7.54
Investment securities						9,417						181						2.57						10,087						188						2.49
Trading securities						1,361						64						6.26						1,164						58						6.62
Federal funds sold						50						2						5.63						37						2						5.48
Securities purchased under agreements to resell						558						22						5.21						291						10						4.63
Interest-bearing deposits with banks						1,661						68						5.44						2,486						95						5.11
Total earning assets / Total interest income						$	75,383					$	3,296					5.84		%				$	74,591					$	3,026					5.42		%
Cash and due from banks						919																		1,019
Goodwill and other intangible assets, net						1,680																		1,726
Premises and equipment, net						583																		599
Allowance for loan and lease losses						(809)																		(729)
Other assets						4,023																		4,265
Total assets						$	81,779																	$	81,471
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Savings						$	25,640					$	639					3.33		%				$	22,788					$	456					2.68		%
Other interest-bearing deposits						16,379						350						2.86						14,948						236						2.11
Time deposits						7,163						242						4.51						5,665						153						3.63
Total interest-bearing deposits						49,182						1,231						3.34						43,401						845						2.60
Federal funds purchased						431						18						5.50						358						13						5.01
Securities sold under agreements to repurchase						1,687						50						3.96						1,348						35						3.47
Trading liabilities						548						18						4.30						272						8						3.96
Other short-term borrowings						896						36						5.48						3,446						134						5.19
Term borrowings						1,171						50						5.67						1,395						56						5.30
Total interest-bearing liabilities / Total interest expense						$	53,915					$	1,403					3.48		%				$	50,220					$	1,091					2.90		%
Noninterest-bearing liabilities:
Noninterest-bearing deposits						16,355																		20,012
Other liabilities						2,400																		2,334
Total liabilities						72,670																		72,566
Shareholders' equity						8,814																		8,610
Noncontrolling interest						295																		295
Total shareholders' equity						9,109																		8,905
Total liabilities and shareholders' equity						$	81,779																	$	81,471
Net earnings assets / Net interest income (TE) / Net interest spread						$	21,468					$	1,893					2.36		%				$	24,371					$	1,935					2.52		%
Taxable equivalent adjustment												(12)						0.99												(12)						0.95
Net interest income / Net interest margin (a)												$	1,881					3.35		%										$	1,923					3.47		%

(a) Calculated using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21% and, where applicable, state income taxes.

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For the nine months ended September 30, 2024, net interest income of $1.9 billion decreased $42 million from the same period one year ago, largely driven by higher funding costs, partially offset by higher earning asset yields and loan growth.

Total average earning assets increased $792 million in the first nine months of 2024, largely driven by average loan growth of $2.0 billion, partially offset by lower levels of investment securities and interest-bearing cash.

The year-to-date net interest margin of 3.35% decreased 12 basis points compared to 3.47% for the same period of 2023 as earning asset yields increased 42 basis points and the cost of interest-bearing liabilities increased 58 basis points.

Noninterest Income

The following table presents the significant components of noninterest income for each of the periods presented:

Table I.2.4

NONINTEREST INCOME

						Three Months Ended																		3Q24 vs. 2Q24												3Q24 vs. 3Q23
(Dollars in millions)						September 30, 2024						June 30, 2024						September 30, 2023						$ Change						% Change						$ Change						% Change
Noninterest income:
Fixed income						$	47					$	40					$	28					$	7					18		%				$	19					68		%
Deposit transactions and cash management						45						44						46						1						2						(1)						(2)
Brokerage, management fees and commissions						27						25						21						2						8						6						29
Card and digital banking fees						19						20						20						(1)						(5)						(1)						(5)
Other service charges and fees						13						14						14						(1)						(7)						(1)						(7)
Trust services and investment management						12						12						12						—						—						—						—
Mortgage banking income						9						10						7						(1)						(10)						2						29
Securities gains (losses), net						1						1						—						—						—						1						100
Other income						27						20						25						7						35						2						8
Total noninterest income						$	200					$	186					$	173					$	14					8		%				$	27					16		%

Third Quarter 2024 versus Second Quarter 2024

Noninterest income of $200 million increased $14 million, or 8%, from second quarter 2024, largely driven by an increase in fixed income production as well as an increase in various other noninterest income items.

Fixed income of $47 million increased $7 million from the prior quarter, driven by higher production as the market anticipated the decline in interest rates. Fixed income average daily revenue of $593 thousand increased 22% from $488 thousand in second quarter 2024.

Mortgage banking income of $9 million decreased $1 million, moderating slightly from home-buying season highs.

Other income increased $7 million, largely driven by a $3 million increase in deferred compensation income, $2 million in gains on disposition of fixed assets and a $1 million increase in bank owned life insurance benefits.

Third Quarter 2024 versus Third Quarter 2023

Noninterest income for third quarter 2024 increased $27 million, or 16%, compared to third quarter 2023, primarily driven by higher fixed income and brokerage, management fees and commissions.

Fixed income of $47 million increased $19 million from third quarter 2023, largely reflecting more favorable market conditions. Fixed income average daily revenue of $593 thousand increased $292 thousand, or 97%, compared to the same quarter of 2023.

Brokerage, management fees and commissions of $27 million increased $6 million, or 29%, as strong market performance improved wealth management fees.

Mortgage banking income of $9 million increased $2 million, driven by higher secondary volume.

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Table I.2.5

NONINTEREST INCOME

						Nine Months Ended
(Dollars in millions)						September 30, 2024						September 30, 2023						$ Change						% Change
Noninterest income:
Fixed income						$	138					$	97					$	41					42		%
Deposit transactions and cash management						134						133						1						1
Brokerage, management fees and commissions						76						66						10						15
Card and digital banking fees						58						61						(3)						(5)
Other service charges and fees						40						41						(1)						(2)
Trust services and investment management						36						35						1						3
Mortgage banking income						28						18						10						56
Securities gains (losses), net						2						1						1						100
Gain on merger termination						—						225						(225)						(100)
Other income						69						68						1						1
Total noninterest income						$	581					$	745					$	(164)					(22)		%

For the nine months ended September 30, 2024, noninterest income of $581 million decreased $164 million, or 22%, compared to the same period in 2023, primarily from the gain on merger termination in 2023, partially offset by higher fixed income, mortgage banking income and brokerage, management fees and commissions in 2024.

Fixed income of $138 million increased $41 million, or 42% compared to the same period one year ago. Fixed income product revenue of $113 million increased $45 million, largely driven by more favorable market conditions. Revenue from other products of $25 million decreased $4

million, primarily driven by lower investment advisory fees due to the sale of the assets of FHN Financial Main Street Advisors in fourth quarter 2023 and lower derivative sales.

Brokerage, management fees and commissions of $76 million increased $10 million, or 15%, as strong market performance improved wealth management fees.

Mortgage banking income of $28 million increased $10 million, driven by higher secondary volume.

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Noninterest Expense

The following tables present the significant components of noninterest expense for each of the periods presented:

Table I.2.6

NONINTEREST EXPENSE

						Three Months Ended																		3Q24 vs. 2Q24												3Q24 vs. 3Q23
(Dollars in millions)						September 30, 2024						June 30, 2024						September 30, 2023						$ Change						% Change						$ Change						% Change
Noninterest expense:
Personnel expense						$	282					$	279					$	266					$	3					1		%				$	16					6		%
Net occupancy expense						33						31						30						2						6						3						10
Computer software						30						29						26						1						3						4						15
Operations services						25						23						21						2						9						4						19
Legal and professional fees						15						18						13						(3)						(17)						2						15
Advertising and public relations						14						14						16						—						—						(2)						(13)
Contract employment and outsourcing						12						14						12						(2)						(14)						—						—
Deposit insurance expense						11						16						14						(5)						(31)						(3)						(21)
Amortization of intangible assets						11						11						12						—						—						(1)						(8)
Equipment expense						10						11						11						(1)						(9)						(1)						(9)
Communications and delivery						8						8						8						—						—						—						—
Contributions						4						1						3						3						300						1						33
Other expense						56						45						42						11						24						14						33
Total noninterest expense						$	511					$	500					$	474					$	11					2		%				$	37					8		%

Third Quarter 2024 versus Second Quarter 2024

Noninterest expense of $511 million increased $11 million, or 2%, compared with second quarter 2024, largely reflecting $15 million in Visa derivative valuation expense.

Personnel expense of $282 million increased $3 million from the linked quarter. Incentive-based compensation decreased $3 million despite higher fixed income revenue, primarily due to a decline in retention expense and lower incentives in other variable compensation businesses. Deferred compensation expense increased $3 million compared to the linked quarter, reflecting fluctuations in equity market valuations.

Deposit insurance expense declined $5 million, reflecting an expense credit of $2 million for the FDIC special assessment based on revised resolution loss totals received from the FDIC in third quarter 2024.

Third Quarter 2024 versus Third Quarter 2023

Noninterest expense of $511 million increased $37 million, or 8%, from third quarter 2023.

Personnel expense increased $16 million compared to third quarter 2023. Salaries and employee benefits increased $11 million, largely attributable to annual merit adjustments and higher medical insurance expense. Deferred compensation expense increased $7 million, reflecting fluctuations in equity market valuations relative to the prior year. Incentive-based compensation decreased $1 million, largely reflecting a decline from retention expense, partially offset by an increase in compensation tied to higher fixed income production.

Increases in occupancy, computer software, operations services and legal and professional fees were largely attributable to strategic investment initiatives in third quarter 2024.

Other expense increased $14 million, largely reflecting $15 million in Visa derivative valuation expense in third quarter 2024.

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Table I.2.7

NONINTEREST EXPENSE

						Nine Months Ended
(Dollars in millions)						September 30, 2024						September 30, 2023						$ Change						% Change
Noninterest expense:
Personnel expense						$	862					$	821					$	41					5		%
Net occupancy expense						95						92						3						3
Computer software						89						82						7						9
Operations services						69						65						4						6
Legal and professional fees						47						33						14						42
Deposit insurance expense						51						40						11						28
Contract employment and outsourcing						40						36						4						11
Advertising and public relations						37						47						(10)						(21)
Amortization of intangible assets						33						36						(3)						(8)
Equipment expense						32						32						—						—
Communications and delivery						24						27						(3)						(11)
Contributions						6						60						(54)						(90)
Other expense						142						137						5						4
Total noninterest expense						$	1,527					$	1,508					$	19					1		%

For the nine months ended September 30, 2024, noninterest expense of $1.5 billion increased $19 million, or 1%, compared to the same period of 2023.

Contributions expense decreased $54 million, largely attributable to a $50 million contribution made to the First Horizon Foundation in 2023.

Personnel expense of $862 million increased $41 million, largely reflecting higher salaries and benefits expense as well as higher deferred compensation expense.

Legal and professional fees increased $14 million and computer software increased $7 million, largely attributable to strategic investments.

Deposit insurance expense of $51 million increased $11 million, reflecting the impact of the FDIC special assessment.

Advertising and public relations expense decreased $10 million, largely attributable to a new-to-bank deposit campaign and brand awareness initiatives that were launched during 2023.

There were no merger and integration related expenses in the first nine months of 2024 compared to $51 million for the same period of 2023. Restructuring expenses were $10 million for both year-to-date periods of 2024 and 2023.

Provision for Credit Losses

Provision for credit losses includes the provision for loan and lease losses and the provision for unfunded lending commitments. The provision for credit losses is the expense necessary to maintain the ALLL and the accrual for unfunded lending commitments at levels appropriate to absorb management’s estimate of credit losses expected over the life of the loan and lease portfolio and the portfolio of unfunded loan commitments.

Provision for credit losses decreased to $35 million for the third quarter 2024, compared to $55 million for the

second quarter 2024 and $110 million for third quarter 2023. For the nine months ended September 30, 2024, provision for credit losses was $140 million, compared to $210 million for the same period of 2023. The provision in 2023 reflected the impact of a $72 million credit loss from a single borrower in bankruptcy. For additional information about general asset quality trends, refer to the Asset Quality section in this MD&A.

Income Taxes

FHN recorded income tax expense of $58 million in third quarter 2024 compared to $56 million in second quarter 2024 and $52 million in third quarter 2023. For the nine

months ended September 30, 2024 and 2023, FHN recorded income tax expense of $171 million and $223 million, respectively.

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The effective tax rate was approximately 20.6%, 21.5%, and 26.7% for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively. The effective tax rate was approximately 21.5% and 23.5% for the nine months ended September 30, 2024 and 2023, respectively.

FHN’s effective tax rate is favorably affected by recurring items such as tax credits and other tax benefits from tax credit investments, tax-exempt income, and bank-owned life insurance. The effective rate is unfavorably affected by the non-deductible portions of FDIC premium, executive compensation and merger expenses. FHN’s effective tax rate also may be affected by items that may occur in any given period but are not consistent from period to period, such as changes in unrecognized tax benefits. The rate also may be affected by items resulting from business combinations. For the three months ended September 30, 2024, FHN recognized $5 million of net favorable discrete items, primarily attributable to the lapse of the statute of limitations for uncertain tax positions. The higher rates for the three and nine months ended September 30, 2023 were primarily attributable to net unfavorable discrete items related to the termination of bank owned life insurance (BOLI) policies in the third quarter of 2023 and

the gain on merger agreement termination in the second quarter of 2023.

A deferred tax asset or deferred tax liability is recognized for the tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax consequence is calculated by applying current enacted statutory tax rates to these temporary differences in future years. As of September 30, 2024, FHN’s gross DTA and gross DTL were $715 million and $529 million, respectively, resulting in a net DTA of $186 million at September 30, 2024, compared with a net DTA of $215 million at December 31, 2023.

As of September 30, 2024, FHN had deferred tax asset balances related to federal and state income tax carryforwards of $29 million and $3 million, respectively, which will expire at various dates.

Based on current analysis, FHN believes that its ability to realize the net DTA is more likely than not. FHN monitors its net DTA and the need for a valuation allowance on a quarterly basis. A significant adverse change in FHN’s taxable earnings outlook could result in the need for a valuation allowance.

Business Segment Results

FHN's reportable segments include Regional Banking, Specialty Banking and Corporate. See Note 12 - Business Segment Information to the Consolidated Financial Statements in Part I, Item 1 of this report for additional disclosures related to FHN's segments.

Regional Banking

The Regional Banking segment generated pre-tax income of $269 million for third quarter 2024, an increase of $28 million compared to second quarter 2024. Net interest income of $517 million decreased $5 million, driven by higher interest-bearing deposit costs, partially offset by improvement in loan repricing. Provision for credit losses of $33 million decreased $24 million from the prior quarter. Noninterest income increased $5 million compared to the prior quarter, largely driven by higher wealth management fees and deposit transaction and cash management fees. Noninterest expense decreased $4 million compared to second quarter 2024. largely due to a decline in other losses.

Pre-tax income for third quarter 2024 increased $28 million to $269 million, compared to $241 million for third quarter 2023. Net interest income decreased $41 million from third quarter 2023, driven by a decline in average noninterest-bearing deposits and thus lower earnings credit under the funds transfer pricing methodology, as well as higher interest-bearing deposit costs, partially offset by higher loan balances and yields. The provision for credit losses decreased $80 million compared to third quarter 2023, largely reflecting a credit

loss on a single relationship in 2023. Noninterest expense increased $19 million compared to third quarter 2023, largely due to higher personnel expense and expenses related to strategic investments. Results also reflect an $8 million increase in noninterest income compared to third quarter 2023, largely driven by improvement in wealth management fees.

Pre-tax income of $795 million for the nine months ended September 30, 2024 decreased $105 million compared to the same period of 2023, largely from a $121 million decrease in revenue primarily driven by net interest income. Provision for credit losses decreased $65 million, largely reflecting a credit loss on a single relationship in 2023. Noninterest expense increased $49 million, largely attributable to higher personnel expense and expenses related to strategic investments.

Specialty Banking

Pre-tax income in the Specialty Banking segment of $126 million for third quarter 2024 increased $8 million compared to second quarter 2024, largely driven by higher fixed income production. Provision for credit losses increased $2 million and noninterest expense increased $1 million.

Fixed income of $47 million increased $7 million, driven by higher production as the market anticipated the decline in interest rates. Mortgage banking income of $8 million decreased $2 million, moderating slightly from home-buying season highs.

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Pre-tax income in the Specialty Banking segment increased $15 million compared to third quarter 2023. Revenue increased $24 million, primarily driven by higher fixed income production. Noninterest expense increased $8 million, largely driven by higher incentive-based compensation expense tied to the improvement in fixed income production.

Pre-tax income of $342 million for the nine months ended September 30, 2024 increased $46 million from the same period of 2023, largely reflecting a $47 million increase in noninterest income and a $9 million decrease in provision for credit losses, partially offset by a $19 million increase in noninterest expense. The increase in noninterest income was largely a result of higher fixed income and mortgage banking income. The increase in noninterest expense was largely attributable to higher personnel expense.

Corporate

Pre-tax loss for the Corporate segment was $114 million for third quarter 2024 compared to $99 million for second quarter 2024, largely reflecting a $14 million increase in noninterest expense. The increase in noninterest expense was largely attributable to $15 million in Visa derivative valuation expense. Results for third quarter 2024 also reflect $2 million in restructuring costs compared to $3 million in the prior quarter.

Pre-tax loss for the Corporate segment was $114 million compared to $158 million for third quarter 2023, largely reflecting a $57 million increase in net interest income, partially offset by a $10 million increase in noninterest expense. The increase in net interest income was tied to the impact of funds transfer pricing. The increase in noninterest expense was largely driven by $15 million in derivative valuation expense as well as higher personnel expense. The increase in personnel expense was largely driven by higher salaries and employee benefits and deferred compensation expense, partially offset by lower incentive-based compensation. These increases in noninterest expense were partially offset by a decline in deposit insurance expense compared to third quarter 2023.

Pre-tax loss of $342 million for the nine months ended September 30, 2024 compared to $246 million for the same period of 2023. The increase in loss was largely driven by the $225 million gain on merger termination in 2023, offset by the $50 million contribution to the First Horizon Foundation. Results in 2024 also reflect a $51 million decrease in merger and integration related expense and $10 million in net FDIC special assessment expense.

Analysis of Financial Condition

Earning assets consist of loans and leases, loans held for sale, investment securities, and other earning assets, such as trading securities and interest-bearing deposits with

banks. A detailed discussion of the major components of earning assets is provided in the following sections.

Loans and Leases

Period-end loans and leases of $62.4 billion as of September 30, 2024 increased $1.2 billion, or 2%, compared to December 31, 2023. Commercial loans and leases increased $948 million, primarily from growth in loans to mortgage companies and commercial real estate loans, partially offset by a decline in other C&I loans. Consumer loans increased $205 million, primarily from

growth in real estate installment loans, partially offset by declines in HELOCs, consumer construction and other consumer loans.

The following table provides detail regarding FHN's loans and leases as of September 30, 2024 and December 31, 2023.

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Table I.2.8

LOANS & LEASES

						As of September 30, 2024												As of December 31, 2023
(Dollars in millions)						Amount						Percent of total						Amount						Percent of total						Growth Rate
Commercial:
Commercial, financial, and industrial (a)						$	33,092					53		%				$	32,633					53		%				1		%
Commercial real estate						14,705						24						14,216						23						3
Total commercial						47,797						77						46,849						76						2
Consumer:
Consumer real estate						13,961						22						13,650						23						2
Credit card and other						687						1						793						1						(13)
Total consumer						14,648						23						14,443						24						1
Total loans and leases						$	62,445					100		%				$	61,292					100		%				2		%

(a)Includes equipment financing loans and leases.

Loans Held for Sale

Loans held for sale primarily consists of government guaranteed loans under SBA and USDA lending programs. Smaller amounts of other consumer and home equity loans are also included in loans HFS. Additionally, FHN's mortgage banking operations include origination and servicing 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 non-conforming loans are primarily sold to private

companies that are unaffiliated with the GSEs on a servicing-released basis. For further detail, see Note 5 - Mortgage Banking Activity to the Consolidated Financial Statements in Part I, Item 1 of this report.

On September 30, 2024 and December 31, 2023, loans HFS were $494 million and $502 million, respectively. Held-for-sale consumer mortgage loans secured by residential real estate in process of foreclosure totaled $2 million as of both September 30, 2024 and December 31, 2023.

Asset Quality

Loan and Lease Portfolio Composition

FHN groups its loans into portfolio segments based on internal classifications reflecting the manner in which the ALLL is established and how credit risk is measured, monitored, and reported. From time to time, and if conditions are such that certain subsegments are uniquely affected by economic or market conditions or are experiencing greater deterioration than other components of the loan portfolio, management may determine the ALLL at a more granular level. Commercial loans and leases are composed of C&I loans and leases and CRE loans. Consumer loans are composed of consumer real estate loans and credit card and other loans. FHN had a concentration of residential real estate

loans of 22% and 23% of total loans at September 30, 2024 and December 31, 2023, respectively. Industry concentrations are discussed under the C&I heading below.

Credit underwriting guidelines are outlined in Item 7 of FHN’s Annual Report on Form 10-K for the year ended December 31, 2023 in the Asset Quality section within the Analysis of Financial Condition discussion. FHN’s credit underwriting guidelines and loan product offerings as of September 30, 2024 are generally consistent with those reported and disclosed in FHN’s Form 10-K for the year ended December 31, 2023.

Commercial Loan and Lease Portfolios

C&I

C&I loans are the largest component of the loan and lease portfolio, comprising 53% of total loans as of both September 30, 2024 and December 31, 2023. The C&I portfolio increased $459 million to $33.1 billion as of September 30, 2024, compared to $32.6 billion at December 31, 2023. The C&I portfolio is comprised of

loans and leases used for general business purposes. Products offered in the C&I portfolio include term loan financing of owner-occupied real estate and fixed assets, direct financing and sales-type leases, working capital lines

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of credit, and trade credit enhancement through letters of credit.

The increase in C&I loans from December 31, 2023 was largely driven by growth in loans to mortgage companies partially offset by a decline in finance and insurance and various other portfolios. The largest geographical concentrations of balances in the C&I portfolio as of September 30, 2024 were in Tennessee (20%), Florida (12%), Texas (11%), North Carolina (7%), Louisiana (6%), California (6%), and Georgia (5%). No other state represented more than 5% of the portfolio.

The following table provides the composition of the C&I portfolio by industry as of September 30, 2024 and

December 31, 2023. For purposes of this disclosure, industries are determined based on the North American Industry Classification System (NAICS) industry codes used by Federal statistical agencies in classifying business establishments for the collection, analysis, and publication of statistical data related to the U.S. business economy.

Table I.2.9

C&I PORTFOLIO BY INDUSTRY

						September 30, 2024												December 31, 2023
(Dollars in millions)						Amount						Percent						Amount						Percent
Industry:
Real estate and rental and leasing (a)						$	3,804					11		%				$	3,858					12		%
Finance and insurance						3,681						11						4,083						12
Loans to mortgage companies						3,244						10						2,024						6
Health care and social assistance						2,580						8						2,676						8
Wholesale trade						2,382						7						2,147						7
Manufacturing						2,282						7						2,267						7
Accommodation and food service						2,273						7						2,288						7
Retail trade						1,816						5						1,866						6
Transportation and warehousing						1,550						5						1,580						5
Energy						1,263						4						1,293						4
Other (professional, construction, education, etc.) (b)						8,217						25						8,551						26
Total C&I loan portfolio						$	33,092					100		%				$	32,633					100		%

(a)Leasing, rental of real estate, equipment, and goods.

(b)Industries in this category each comprise less than 5%.

Industry Concentrations

Loan concentrations are considered to exist for a financial institution when there are loans to numerous borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. Loans to borrowers in the finance and insurance industry and loans to mortgage companies were 21% and 18% of FHN’s C&I loan portfolio as of September 30, 2024 and December 31, 2023, respectively, and as a result could be affected by items that uniquely impact the financial services industry. Loans to borrowers in the real estate and rental and leasing industry were 11% and 12% of FHN's C&I portfolio as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, FHN did not have any other concentrations of C&I loans in any single industry of 10% or more of total loans.

Real Estate and Rental and Leasing

Loans to borrowers in the real estate and rental and leasing industry were 11% and 12% of FHN's C&I portfolio

as of September 30, 2024 and December 31, 2023, respectively. This portfolio primarily consists of equipment financing loans and leases to clients across FHN's footprint in a broad range of industries and asset types. This portfolio also includes a smaller balance of loans and leases for solar and wind generating facilities.

Finance and Insurance

The finance and insurance component represented 11% and 12% of the C&I portfolio as of September 30, 2024 and December 31, 2023, respectively, and includes TRUPs (i.e., long-term unsecured loans to bank and insurance-related businesses), loans to bank holding companies, and asset-based lending to consumer finance companies. As of September 30, 2024, asset-based lending to consumer finance companies represented approximately $1.8 billion of the finance and insurance component.

Loans to Mortgage Companies

Loans to mortgage companies were 10% and 6% of the C&I portfolio as of September 30, 2024 and December 31,

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2023, respectively. This portfolio includes commercial lines of credit to qualified mortgage companies primarily for the temporary warehousing of eligible mortgage loans prior to the borrower’s sale of those mortgage loans to third-party investors. Balances in this portfolio generally fluctuate with mortgage rates and seasonal factors. Generally, new loan originations to mortgage lenders increase when there is a decline in mortgage rates and decrease when rates rise. In periods of economic uncertainty, this trend may not occur even if interest rates are declining. In third quarter 2024, 78% of the loan originations were home purchases and 22% were refinance transactions.

Commercial Real Estate

The CRE portfolio totaled $14.7 billion as of September 30, 2024 and $14.2 billion as of December 31, 2023. The CRE

portfolio includes financings for both commercial construction and non-construction loans. This portfolio contains loans, draws on lines, and letters of credit to commercial real estate developers for the construction and mini-permanent financing of income-producing real estate.

The largest geographical concentrations of CRE loan balances as of September 30, 2024 were in Florida (27%), Texas (12%), North Carolina (12%), Georgia (10%), Tennessee (9%), and Louisiana (8%). No other state represented more than 5% of the portfolio.

The following table represents subcategories of CRE loans by property type.

Table I.2.10

CRE PORTFOLIO BY PROPERTY TYPE

						September 30, 2024												December 31, 2023
(Dollars in millions)						Amount						Percent						Amount						Percent
Property Type:
Multi-family						$	5,245					36		%				$	4,409					31		%
Office						2,738						19						2,782						20
Retail						2,244						15						2,310						16
Industrial						2,200						15						2,236						16
Hospitality						1,375						9						1,467						10
Land/land development						262						2						307						2
Other CRE (a)						641						4						705						5
Total CRE loan portfolio						$	14,705					100		%				$	14,216					100		%

(a) Property types in this category each comprise less than 5%.

Consumer Loan Portfolios

Consumer Real Estate

The consumer real estate portfolio totaled $14.0 billion and $13.7 billion as of September 30, 2024 and December 31, 2023, respectively, and is primarily composed of home equity lines and installment loans. The largest geographical concentrations of balances as of September 30, 2024 were in Florida (29%), Tennessee (22%), Texas (12%), Louisiana (8%), North Carolina (7%), Georgia (5%), and New York (5%). No other state represented more than 5% of the portfolio.

As of September 30, 2024, approximately 89% of the consumer real estate portfolio was in a first lien position. At origination, the weighted average FICO score of this portfolio was 759, and the refreshed FICO scores averaged 756 as of September 30, 2024, representing no change from FICO scores as of December 31, 2023. Generally, performance of this portfolio is affected by life events that affect borrowers’ finances, the level of unemployment, and home prices.

As of September 30, 2024 and December 31, 2023, FHN had held-for-investment consumer mortgage loans secured by real estate that were in the process of foreclosure totaling $31 million and $29 million, respectively.

HELOCs comprised $2.1 billion and $2.2 billion of the consumer real estate portfolio as of September 30, 2024 and December 31, 2023, respectively. FHN’s HELOCs typically have a 5 or 10 year draw period followed by a 10 or 20 year repayment period, respectively. During the draw period, a borrower is able to draw on the line and is only required to make interest payments. The line is frozen if a borrower becomes past due on payments. Once the draw period has ended, the line is closed and the borrower is required to make both principal and interest payments monthly until the loan matures. The principal payment generally is fully amortizing, but payment amounts will adjust when variable rates reset to reflect changes in the prime rate.

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As of September 30, 2024, approximately 95% of FHN's HELOCs were in the draw period compared to 94% at December 31, 2023. It is expected that $583 million, or 29%, of HELOCs currently in the draw period will enter the repayment period during the next 60 months, based on current terms. Generally, delinquencies for HELOCs that

have entered the repayment period are initially higher than HELOCs still in the draw period because of the increased minimum payment requirement. However, over time, performance of these loans usually begins to stabilize. HELOCs nearing the end of the draw period are closely monitored.

The following table presents HELOCs currently in the draw period, broken down by months remaining in the draw period.

Table I.2.11

HELOC DRAW TO REPAYMENT SCHEDULE

						September 30, 2024												December 31, 2023
(Dollars in millions)						Repayment Amount						Percent						Repayment Amount						Percent
Months remaining in draw period:
0-12						$	71					4		%				$	30					1		%
13-24						86						4						90						4
25-36						121						6						110						5
37-48						159						8						163						8
49-60						146						7						178						9
>60						1,405						71						1,530						73
Total						$	1,988					100		%				$	2,101					100		%

Credit Card and Other

The credit card and other consumer loan portfolio totaled $687 million as of September 30, 2024 and $793 million as of December 31, 2023. This portfolio primarily consists of consumer-related credits, including home equity and

other personal consumer loans, credit card receivables, and automobile loans. The $106 million decrease was primarily driven by net repayments in the overall portfolio.

Allowance for Credit Losses

The ACL is maintained at a level sufficient to provide appropriate reserves to absorb estimated future credit losses in accordance with GAAP. For additional information regarding the ACL, see Note 4 to the Consolidated Financial Statements in Part I, Item 1 of this report and “Critical Accounting Policies and Estimates” and Note 4 to the Consolidated Financial Statements in Part I, Item 8 of FHN's 2023 Form 10-K.

The ALLL increased to $823 million as of September 30, 2024 from $773 million as of December 31, 2023. The increase in the ALLL balance as of September 30, 2024 reflects downgrades and an evolving macroeconomic

outlook. The ALLL to total loans and leases ratio increased 6 basis points to 1.32% compared to 1.26% as of December 31, 2023. The ACL to total loans and leases ratio was 1.44% and 1.40% as of September 30, 2024 and December 31, 2023, respectively. The ACL to total loans and leases ratio increased modestly from 1.41% in second quarter 2024, driven by $8 million of qualitative reserves for Hurricane Helene and continued grade migration, partially offset by more favorable economic scenarios.

Consolidated Net Charge-offs

Net charge-offs in third quarter 2024 were $24 million, or an annualized 15 basis points of total loans and leases, compared to net charge-offs of $95 million, or 61 basis

points of total loans and leases, in third quarter 2023. Third quarter 2023 included a $72 million charge-off related to one client relationship in the C&I portfolio.

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Table I.2.12

ANALYSIS OF ALLOWANCE FOR CREDIT LOSSES AND CHARGE-OFFS

(Dollars in millions)									September 30, 2024												December 31, 2023						September 30, 2023
Allowance for loan and lease losses
			C&I						$	352											$	339					$	335
			CRE						218												172						169
			Consumer real estate						230												233						228
			Credit card and other						23												29						28
			Total allowance for loan and lease losses						$	823											$	773					$	760
Reserve for remaining unfunded commitments
			C&I						$	55											$	49					$	49
			CRE						8												22						21
			Consumer real estate						12												12						12
			Total reserve for remaining unfunded commitments						$	75											$	83					$	82
Allowance for credit losses
			C&I						$	407											$	388					$	384
			CRE						226												194						190
			Consumer real estate						242												245						240
			Credit card and other						23												29						28
			Total allowance for credit losses						$	898											$	856					$	842
Period-end loans and leases
			C&I						$	33,092											$	32,633					$	33,163
			CRE						14,705												14,216						14,121
			Consumer real estate						13,961												13,650						13,685
			Credit card and other						687												793						809
			Total period-end loans and leases						$	62,445											$	61,292					$	61,778
ALLL / loans and leases %
			C&I						1.06		%										1.04		%				1.01		%
			CRE						1.48												1.21						1.19
			Consumer real estate						1.65												1.71						1.67
			Credit card and other						3.39												3.63						3.48
			Total ALLL / loans and leases %						1.32		%										1.26		%				1.23		%
ACL / loans and leases %
			C&I						1.23		%										1.19		%				1.16		%
			CRE						1.54												1.36						1.35
			Consumer real estate						1.73												1.79						1.75
			Credit card and other						3.39												3.63						3.48
			Total ACL / loans and leases %						1.44		%										1.40		%				1.36		%
Quarter-to-date net charge-offs (recoveries)
			C&I						$	8											$	29					$	86
			CRE						14												2						4
			Consumer real estate						(2)												—						(1)
			Credit card and other						4												5						6
			Total net charge-offs (recoveries)						$	24											$	36					$	95

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Average loans and leases
			C&I						$	33,074											$	32,520					$	33,042
			CRE						14,684												14,211						13,999
			Consumer real estate						13,935												13,664						13,575
			Credit card and other						720												802						816
			Total average loans and leases						$	62,413											$	61,197					$	61,432
Charge-off % (annualized)
			C&I						0.10		%										0.36		%				1.04		%
			CRE						0.39												0.06						0.12
			Consumer real estate						(0.05)												—						(0.05)
			Credit card and other						1.92												2.36						2.77
			Total charge-off %						0.15		%										0.23		%				0.61		%
ALLL / annualized net charge-offs
			C&I						1,090		%										292		%				98		%
			CRE						378												2,201						978
			Consumer real estate						NM												NM						NM
			Credit card and other						169												152						125
			Total ALLL / net charge-offs						856		%										543		%				202		%

NM - not meaningful

Nonperforming Assets

Nonperforming loans are loans placed on nonaccrual if it becomes evident that full collection of principal and interest is at risk, if impairment has been recognized as a partial charge-off of principal balance due to insufficient collateral value and past due status, or (on a case-by-case basis) if FHN continues to receive payments but there are other borrower-specific issues. Included in nonaccrual are loans for which FHN continues to receive payments, including residential real estate loans where the borrower has been discharged of personal obligation through bankruptcy. NPAs consist of nonperforming loans and OREO (excluding OREO from government insured mortgages).

Total NPAs (including NPLs HFS) increased to $585 million as of September 30, 2024 from $469 million as of

December 31, 2023, largely driven by an increase in non-accrual CRE loans partially offset by a decline in nonaccrual consumer real estate loans. The increase in nonaccrual CRE loans was largely driven by multi-family and office property types. This portfolio continues to maintain strong underwriting and client selection. In addition, over 60% of the commercial nonaccrual loan balance was current on payments as of September 30, 2024. The vast majority of NPAs have individual impairment reviews with no specific reserve required. The nonperforming loans and leases ratio increased 17 basis points to 0.92% as of September 30, 2024, compared to 0.75% as of December 31, 2023.

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Table I.2.13

NONACCRUAL/NONPERFORMING LOANS, FORECLOSED ASSETS, & OTHER DISCLOSURES

(Dollars in millions)
Nonperforming loans and leases									September 30, 2024												December 31, 2023
			C&I						$	190											$	184
			CRE						259												136
			Consumer real estate						128												140
			Credit card and other						1												2
			Total nonperforming loans and leases (a)						$	578											$	462
Nonperforming loans held for sale (a)									$	3											$	3
Foreclosed real estate and other assets (b)									4												4
			Total nonperforming assets (a) (b)						$	585											$	469
Nonperforming loans and leases to total loans and leases
			C&I						0.57		%										0.57		%
			CRE						1.76												0.96
			Consumer real estate						0.92												1.02
			Credit card and other						0.20												0.30
			Total NPL %						0.92		%										0.75		%
ALLL / NPLs
			C&I						185		%										184		%
			CRE						84												126
			Consumer real estate						180												167
			Credit card and other						1,672												1,202
			Total ALLL / NPLs						142		%										167		%

(a)Excludes loans and leases that are 90 or more days past due and still accruing interest.

(b)Excludes government-insured foreclosed real estate. There were no foreclosed real estate balances from GNMA loans at September 30, 2024 and December 31, 2023.

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The following table provides nonperforming assets by business segment:

Table I.2.14

NONPERFORMING ASSETS BY SEGMENT

(Dollars in millions)
Nonperforming loans and leases (a) (b)									September 30, 2024												December 31, 2023
			Regional Banking						$	426											$	323
			Specialty Banking						132												116
			Corporate						20												23
			Consolidated						$	578											$	462
Foreclosed real estate (c)
			Regional Banking						$	1											$	1
			Specialty Banking						2												3
			Corporate						1												—
			Consolidated						$	4											$	4
Nonperforming Assets (a) (b) (c)
			Regional Banking						$	427											$	324
			Specialty Banking						134												119
			Corporate						21												23
			Consolidated						$	582											$	466
Nonperforming loans and leases to loans and leases
			Regional Banking						1.04		%										0.74		%
			Specialty Banking						0.63												0.68
			Corporate						5.53												4.87
			Consolidated						0.92		%										0.75		%
NPA % (d)
			Regional Banking						1.04		%										0.74		%
			Specialty Banking						0.64												0.70
			Corporate						5.71												4.96
			Consolidated						0.93		%										0.76		%

(a)Excludes loans and leases that are 90 or more days past due and still accruing interest.

(b)Excludes loans classified as held for sale.

(c)Excludes foreclosed real estate and receivables related to government-insured mortgages. There were no foreclosed real estate balances from GNMA loans at September 30, 2024 or December 31, 2023.

(d)Ratio is non-performing assets to total loans and leases plus foreclosed real estate.

Past Due Loans and Potential Problem Assets

Past due loans are loans contractually past due as to interest or principal payments but which have not yet been put on nonaccrual status.

Loans 90 days or more past due and still accruing were $17 million as of September 30, 2024, compared to $21 million as of December 31, 2023. Loans 30 to 89 days past

due and still accruing decreased to $76 million as of September 30, 2024, compared to $85 million as of December 31, 2023, driven by a decrease of $4 million in C&I loans, a decrease of $3 million in CRE loans, and a decrease of $2 million in consumer loans.

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Table I.2.15

ACCRUING DELINQUENCIES & OTHER CREDIT DISCLOSURES

(Dollars in millions)
Accruing loans and leases 30+ days past due						September 30, 2024												December 31, 2023
			C&I			$	29											$	33
			CRE			5												8
			Consumer real estate			52												57
			Credit card and other			7												8
			Total accruing loans and leases 30+ days past due			$	93											$	106
Accruing loans and leases 30+ days past due %
			C&I			0.09		%										0.10		%
			CRE			0.03												0.06
			Consumer real estate			0.38												0.42
			Credit card and other			1.00												1.03
			Total accruing loans and leases 30+ days past due %			0.15		%										0.17		%
Accruing loans and leases 90+ days past due (a) (b) (c):
			C&I			$	1											$	1
			Consumer real Estate			13												17
			Credit card and other			3												3
			Total accruing loans and leases 90+ days past due			$	17											$	21
Loans held for sale
30 to 89 days past due						$	8											$	12
30 to 89 days past due - guaranteed portion (d)						7												8
90+ days past due						12												9
90+ days past due - guaranteed portion (d)						7												4

(a)Excludes loans classified as held for sale.

(b)Amounts are not included in nonperforming/nonaccrual loans.

(c)Amounts are also included in accruing loans and leases 30+ days past due.

(d)Guaranteed loans include FHA, VA, and GNMA loans repurchased through the GNMA buyout program.

Potential problem assets represent those assets where information about possible credit problems of borrowers has caused management to have serious doubts about the borrower’s ability to comply with present repayment terms. This definition is believed to be substantially consistent with the standards established by Federal banking regulators for loans classified as substandard. Potential problem assets in the loan portfolio increased to

$1.7 billion as of September 30, 2024 compared to $666 million as of December 31, 2023, reflecting an increase in commercial loans. This increase was largely attributable to grade migration in the multi-family and office portfolios. The current expectation of losses from potential problem assets has been included in management’s analysis for assessing the adequacy of the allowance for loan and lease losses.

Modifications to Borrowers Experiencing Financial Difficulty

As part of FHN’s ongoing risk management practices, FHN attempts to work with borrowers when appropriate to extend or modify loan terms to better align with their current ability to repay. Modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is

unique to the borrower and is evaluated separately. See Note 1 - Basis of Presentation and Accounting Policies, Note 3 - Loans and Leases, and Note 4 - Allowance for Credit Losses to the Consolidated Financial Statements in Part I, Item 1 of this Report for further discussion regarding troubled loan modifications.

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Commercial Loan Modifications

As part of FHN’s credit risk management governance processes, the Loan Rehab and Recovery Department (LRRD) is responsible for managing most commercial relationships with borrowers whose financial condition has deteriorated to such an extent that the credits are individually reviewed for expected credit losses, classified as substandard or worse, placed on nonaccrual status, foreclosed or in process of foreclosure, or in active or contemplated litigation. LRRD has the authority and responsibility to enter into workout and/or rehabilitation agreements with troubled commercial borrowers in order to mitigate and/or minimize the amount of credit losses recognized from these problem assets. While every circumstance is different, LRRD will generally use forbearance agreements (generally 6-12 months) as an element of commercial loan workouts, which might include reduced interest rates, reduced payments, release of guarantor, term extensions or entering into short sale agreements. Principal forgiveness may be granted in specific workout circumstances.

The individual expected credit loss assessments completed on commercial loans are used in evaluating the appropriateness of qualitative adjustments to quantitatively modeled loss expectations for loans that are not considered collateral dependent. If a loan is collateral dependent, the carrying amount of a loan is written down to the net realizable value of the collateral. Each assessment considers any modified terms and is comprehensive to ensure appropriate assessment of expected credit losses.

Consumer Loan Modifications

FHN does not currently participate in any of the loan modification programs sponsored by the U.S. government but does generally structure modified consumer loans using the parameters of the former Home Affordable Modification Program.

Within the HELOC and real estate installment loans classes of the consumer portfolio segment, troubled loans are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 1% for up to 5 years) and a possible maturity date extension to reach an affordable housing debt-to-income ratio. After 5 years, the interest rate generally returns to the original interest rate prior to modification; for certain modifications, the modified interest rate increases 2% per year until the original interest rate prior to modification is achieved.

Permanent mortgage troubled loans are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 2% for up to 5 years) and a possible maturity date extension to reach an affordable housing debt-to-income ratio. After 5 years, the interest rate steps up 1% every year until it reaches the Federal Home Loan Mortgage Corporation Weekly Survey Rate cap. Contractual maturities may be extended to 40 years on permanent mortgages and to 30 years for consumer real estate loans.

Within the credit card class of the consumer portfolio segment, troubled loans are typically modified through either a short-term credit card hardship program or a longer-term credit card workout program. In the credit card hardship program, borrowers may be granted rate and payment reductions for 6 months to 1 year. In the credit card workout program, clients are granted a rate reduction to 0% and term extensions for up to 5 years to pay off the remaining balance.

Consumer loans may also be modified through court-imposed principal reductions in bankruptcy proceedings, which FHN is required to honor unless a borrower reaffirms the related debt.

Investment Securities

FHN’s investment securities portfolio consists principally of debt securities available for sale. FHN maintains a securities portfolio consisting primarily of bank-eligible GSE and GNMA issued mortgage-backed securities and collateralized mortgage obligations. The securities portfolio provides a source of income and liquidity and is an important tool used to balance the interest rate risk of the loan and deposit portfolios. The securities portfolio is periodically evaluated in light of established ALM objectives, changing market conditions that could affect the profitability of the portfolio, the regulatory environment, and the level of interest rate risk to which FHN is exposed. These evaluations may result in steps taken to adjust the overall balance sheet positioning.

Investment securities were $9.5 billion and $9.7 billion on September 30, 2024 and December 31, 2023, respectively, representing 12% of total assets for both periods. For more information about the securities portfolio, see Note 2 - Investment Securities to the Consolidated Financial Statements in Part I, Item 1 of this report.

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Deposits

Total deposits of $66.6 billion as of September 30, 2024 increased $795 million, or 1%, compared to December 31, 2023. Interest-bearing deposits increased $1.8 billion and noninterest-bearing deposits decreased $992 million.

FHN continues to maintain a well-diversified and stable funding mix across its footprint and specialty lines of business. At September 30, 2024, commercial deposits were $37.3 billion, or 56% of total deposits, and consumer deposits were $29.3 billion, or 44% of total deposits. At December 31, 2023, commercial deposits were $35.9 billion, or 55% of total deposits, and consumer deposits were $29.9 billion, or 45% of total deposits.

At September 30, 2024, 37% of deposits were associated with Tennessee, 18% with Florida, 13% with North Carolina, and 12% with Louisiana, with no other state above 10%. This mix remained relatively consistent with December 31, 2023.

Total estimated uninsured deposits were $26.3 billion as of September 30, 2024 and $26.8 billion as of December 31, 2023, representing 39% and 41% of total deposits, respectively. Of the uninsured deposits at September 30, 2024, $4.2 billion, or 6% of total deposits, were collateralized. At December 31, 2023, collateralized deposits were $5.3 billion, or 8% of total deposits.

See Tables I.2.2 and I.2.3 - Average Balances, Net Interest Income and Yields/Rates in this Report for information on average deposits including average rates paid.

The following table summarizes the major components of deposits as of September 30, 2024 and December 31, 2023.

Table I.2.16

DEPOSITS

						September 30, 2024												December 31, 2023
(Dollars in millions)						Amount						Percent of total						Amount						Percent of total						Change						Percent
Savings						$	26,634					40		%				$	25,082					38		%				$	1,552					6		%
Time deposits						8,326						13						6,804						10						1,522						22
Other interest-bearing deposits						15,403						23						16,690						26						(1,287)						(8)
Total interest-bearing deposits						50,363						76						48,576						74						1,787						4
Noninterest-bearing deposits						16,212						24						17,204						26						(992)						(6)
Total deposits						$	66,575					100		%				$	65,780					100		%				$	795					1		%

Short-Term Borrowings

Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, trading liabilities, and other short-term borrowings. Total short-term borrowings increased to $3.4 billion as of September 30, 2024 compared to $3.1 billion as of December 31, 2023. FHLB borrowings increased $400 million and trading liabilities increased $258 million while securities sold under agreements to repurchase decreased $310 million.

Short-term borrowings balances fluctuate largely based on the level of FHLB borrowing as a result of loan demand, deposit levels and balance sheet funding strategies.

Trading liabilities fluctuate based on various factors, including levels of trading securities and hedging strategies. Federal funds purchased fluctuates depending on the amount of excess funding of FHN’s correspondent bank customers. Balances of securities sold under agreements to repurchase fluctuate based on cost attractiveness relative to FHLB borrowing levels and the ability to pledge securities toward such transactions.

Term Borrowings

Term borrowings include senior and subordinated borrowings with original maturities greater than one year. Total term borrowings were $1.2 billion as of both September 30, 2024 and December 31, 2023.

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Capital

Management’s objectives are to provide capital sufficient to cover the risks inherent in FHN’s businesses, to maintain excess capital to well-capitalized standards, and to ensure ready access to the capital markets.

Total equity was $9.3 billion at both September 30, 2024 and December 31, 2023. Significant changes included net income of $624 million and an increase of $199 million in AOCI, offset by $462 million in common stock repurchases, $270 million in common and preferred

dividends, and $100 million from the Series D Preferred Stock redemption.

The following tables provide a reconciliation of shareholders’ equity from the Consolidated Balance Sheets to Common Equity Tier 1, Tier 1 and Total Regulatory Capital as well as certain selected capital ratios:

Table I.2.17

REGULATORY CAPITAL DATA

(Dollars in millions)						September 30, 2024						December 31, 2023
Shareholders’ equity						$	9,021					$	8,996
Modified CECL transitional amount (a)						28						57
FHN non-cumulative perpetual preferred stock						(426)						(520)
Common equity tier 1 before regulatory adjustments						$	8,623					$	8,533
Regulatory adjustments:
Disallowed goodwill and other intangibles						(1,588)						(1,617)
Net unrealized (gains) losses on securities available for sale						669						836
Net unrealized (gains) losses on pension and other postretirement plans						266						273
Net unrealized (gains) losses on cash flow hedges						54						79
Common equity tier 1						$	8,024					$	8,104
FHN non-cumulative perpetual preferred stock						426						426
Qualifying noncontrolling interest— First Horizon Bank preferred stock						295						295
Tier 1 capital						$	8,745					$	8,825
Tier 2 capital						1,176						1,097
Total regulatory capital						$	9,921					$	9,922
Risk-Weighted Assets
First Horizon Corporation						$	71,463					$	71,074
First Horizon Bank						70,730						70,635
Average Assets for Leverage
First Horizon Corporation						82,138						82,540
First Horizon Bank						81,302						81,898

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Table I.2.18

REGULATORY RATIOS & AMOUNTS

						September 30, 2024												December 31, 2023
						Ratio						Amount						Ratio						Amount
Common Equity Tier 1
First Horizon Corporation						11.23		%				$	8,024					11.40		%				$	8,104
First Horizon Bank						11.23						7,943						11.40						8,055
Tier 1
First Horizon Corporation						12.24						8,745						12.42						8,825
First Horizon Bank						11.65						8,238						11.82						8,350
Total
First Horizon Corporation						13.88						9,921						13.96						9,922
First Horizon Bank						13.10						9,268						13.17						9,303
Tier 1 Leverage
First Horizon Corporation						10.65						8,745						10.69						8,825
First Horizon Bank						10.13						8,238						10.20						8,350
Other Capital Ratios
Total period-end equity to period-end assets						11.27												11.38
Tangible common equity to tangible assets (b)						8.56												8.48
Adjusted tangible common equity to risk-weighted assets (b)						10.63												10.72

(a)The modified CECL transitional amount includes the impact to retained earnings from the initial adoption of CECL plus 25% of the change in the adjusted allowance for credit losses since FHN’s initial adoption of CECL through December 31, 2021. For September 30, 2024 and December 31, 2023, 25% and 50%, respectively, of the full amount is phased out and not included in Common Equity Tier 1 capital.

(b)Tangible common equity to tangible assets and adjusted tangible common equity to risk-weighted assets are non-GAAP measures and are reconciled to total equity to total assets (GAAP) in the Non-GAAP to GAAP Reconciliation - Table I.2.26.

Banking regulators define minimum capital ratios for bank holding companies and their bank subsidiaries. Based on the capital rules and definitions prescribed by the banking regulators, should any depository institution’s capital ratios decline below predetermined levels, it would become subject to a series of increasingly restrictive regulatory actions.

The system categorizes a depository institution’s capital position into one of five categories ranging from well-capitalized to critically under-capitalized. For an institution the size of FHN to qualify as well-capitalized, Common Equity Tier 1, Tier 1 Capital, Total Capital, and Leverage capital ratios must be at least 6.50%, 8.00%, 10.00%, and 5.00%, respectively. Furthermore, a capital conservation buffer of 50 basis points above these levels must be maintained on the Common Equity Tier 1, Tier 1 Capital and Total Capital ratios to avoid restrictions on dividends, share repurchases and certain discretionary bonuses.

As of September 30, 2024, both FHN and First Horizon Bank had sufficient capital to qualify as well-capitalized institutions and to meet the capital conservation buffer

requirement. Capital ratios for both FHN and First Horizon Bank are calculated under the final rule issued by the banking regulators in 2020 to delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period.

For both FHN and First Horizon Bank, the risk-based regulatory capital ratios decreased at the end of third quarter 2024 relative to year-end 2023 primarily from the impact of common share repurchases and an increase in risk-weighted assets. The Tier 1 Leverage ratio for FHN and First Horizon Bank decreased from year-end 2023 largely as a result of common share repurchases. The Series D Preferred Stock redemption in second quarter 2024 did not impact FHN's regulatory capital ratios as it did not qualify as Tier 1 capital because the earliest redemption date was less than five years from the issuance date.

For the remainder of 2024 and in 2025, capital ratios are expected to remain above well-capitalized standards plus the required capital conservation buffer.

Common Stock Purchases

FHN may purchase shares of its common stock from time to time, subject to legal and regulatory restrictions. FHN's Board has authorized the common stock purchase program described below. FHN’s Board has not authorized a preferred stock purchase program.

January 2024 General Purchase Program

On January 23, 2024, FHN announced that its Board of Directors had approved a $650 million common share purchase program that was scheduled to expire on January 31, 2025. Purchases could be made in the open market or through privately negotiated transactions,

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including under Rule 10b5-1 plans as well as accelerated share repurchase and other structured transactions. The timing and exact amount of common share repurchases were at the discretion of senior management and were subject to various factors, including FHN's capital position, financial performance, expected capital impacts of strategic initiatives, market conditions, business conditions, and regulatory considerations. Absent a Rule 10b5-1 plan, FHN did not intend to purchase shares under this program during blackout periods when senior

executives were prohibited from purchasing FHN stock on the open market.

As of September 30, 2024, $441 million in purchases had been made life-to-date under the 2024 program at an average price per share of $15.03, or $15.01 excluding commissions. Program purchases made during the quarter ended September 30, 2024 are summarized in the following table.

Table I.2.19

COMMON STOCK PURCHASES—JANUARY 2024 PROGRAM

(Dollar values and volume in thousands, except per share data)						Total number of shares purchased						Average price paid per share (a)						Total number of shares purchased as part of publicly announced programs						Maximum approximate dollar value that may yet be purchased under the programs
2024
July 1 to July 31						990						$	16.64					990						$	267,264
August 1 to August 31						3,245						15.56						3,245						216,781
September 1 to September 30						501						15.69						501						208,921
Total						4,736						$	15.80					4,736

(a) Represents total costs including commissions paid. Average price paid does not reflect the one percent excise tax charged on public company share repurchases.

October 2024 General Purchase Program

On October 29, 2024, FHN announced that its Board of Directors had approved a new $1.0 billion common share purchase program to replace the January 2024 program discussed above. The new October program is scheduled to expire on January 31, 2026. The January 2024 program discussed above was terminated effective the close of business on October 29, 2024. Purchases under the new program may be made in the open market or through privately negotiated transactions, including under Rule 10b5-1 plans as well as accelerated share repurchase and other structured transactions. The timing and exact amount of common share repurchases are at the discretion of senior management and are subject to various factors, including FHN's capital position, financial performance, expected capital impacts of strategic initiatives, market conditions, business conditions, and

regulatory considerations. Absent a Rule 10b5-1 plan, FHN does not purchase shares under this program during blackout periods when senior executives are prohibited from purchasing FHN stock on the open market.

Stock Award Purchases

As authorized by the Board's Compensation Committee, FHN makes automatic stock purchases by withholding stock-based award shares to cover tax obligations associated with those awards. Those limited, off-market purchases are not associated with an announced purchase program and are made any time an associated tax obligation arises, whether or not a blackout period is in effect. Tax withholding purchases made during the quarter ended September 30, 2024 are summarized in the following table.

Table I.2.20

COMMON STOCK PURCHASES—TAX WITHHOLDING FOR STOCK AWARDS

(Dollar values and volume in thousands, except per share data)						Total number of shares purchased						Average price paid per share						Total number of shares purchased as part of publicly announced programs						Maximum number of shares that may yet be purchased under the programs
2024
July 1 to July 31						0.1						$	15.77					N/A						N/A
August 1 to August 31						3.4						14.75						N/A						N/A
September 1 to September 30						3.2						15.73						N/A						N/A
Total						6.7						$	15.23					N/A

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Risk Management

There have been no significant changes to FHN’s risk management practices as described under “Risk Management” included in Item 7 of FHN’s 2023 Annual Report on Form 10-K.

Market Risk Management

Value-at-Risk and Stress Testing

VaR is a statistical risk measure used to estimate the potential loss in value from adverse market movements over an assumed fixed holding period within a stated confidence level. FHN employs a model to compute daily VaR measures for its trading securities inventory. FHN computes VaR using historical simulation with a 1-year

lookback period at a 99% confidence level with 1-day and 10-day time horizons. Additionally, FHN computes a Stressed VaR measure. The SVaR computation uses the same model but with model inputs reflecting historical data from a continuous 12-month period that reflects a period of significant financial stress appropriate for our trading securities portfolio.

A summary of FHN’s VaR and SVaR measures for 1-day and 10-day time horizons is presented in the following table:

Table I.2.21

VaR & SVaR MEASURES

						Three Months Ended September 30, 2024																		Nine Months Ended September 30, 2024																		As of September 30, 2024
(Dollars in millions)						Mean						High						Low						Mean						High						Low
1-day
VaR						$	3					$	4					$	2					$	3					$	4					$	2					$	3
SVaR						8						9						7						7						9						4						8
10-day
VaR						10						12						7						9						12						6						8
SVaR						36						43						28						32						43						21						41
						Three Months Ended September 30, 2023																		Nine Months Ended September 30, 2023																		As of September 30, 2023
(Dollars in millions)						Mean						High						Low						Mean						High						Low
1-day
VaR						$	3					$	3					$	2					$	3					$	4					$	2					$	2
SVaR						7						7						6						6						7						3						7
10-day
VaR						7						8						4						8						11						4						5
SVaR						24						29						19						23						30						12						27

						Year Ended December 31, 2023																		As of December 31, 2023
(Dollars in millions)						Mean						High						Low
1-day
VaR						$	3					$	4					$	2					$	3
SVaR						6						8						3						6
10-day
VaR						8						11						4						10
SVaR						24						34						12						28

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FHN’s overall VaR measure includes both interest rate risk and credit spread risk. Separate measures of these component risks are as follows:

Table I.2.22

SCHEDULE OF RISKS INCLUDED IN VaR

						As of September 30, 2024												As of September 30, 2023												As of December 31, 2023
(Dollars in millions)						1-day						10-day						1-day						10-day						1-day						10-day
Interest rate risk						$	1					$	2					$	—					$	1					$	1					$	2
Credit spread risk						1						1						2						3						1						1

The potential risk of loss reflected by FHN’s VaR measures assumes the trading securities inventory is static. Because FHN Financial procures fixed income securities for purposes of distribution to clients, its trading securities inventory turns over regularly. Additionally, FHNF traders actively manage the trading securities inventory continuously throughout each trading day. Accordingly, FHNF’s trading securities inventory is highly dynamic, rather than static. As a result, it would be rare for FHNF to incur a negative revenue day in its fixed income activities at the levels indicated by its VaR measures.

In addition to being used in FHN’s daily market risk management process, the VaR and SVaR measures are also used by FHN in computing its regulatory market risk capital requirements in accordance with the Market Risk Capital rules. For additional information regarding FHN's capital adequacy refer to the Capital section of this MD&A.

FHN also performs stress tests on its trading securities portfolio to calculate the potential loss under various assumed market scenarios. Key assumed stresses used in those tests are:

Down 25 bps - assumes an instantaneous downward move in interest rates of 25 basis points at all points on the interest rate yield curve.

Up 25 bps - assumes an instantaneous upward move in interest rates of 25 basis points at all points on the interest rate yield curve.

Curve flattening - assumes an instantaneous flattening of the interest rate yield curve through an increase in short-term rates and a decrease in long-term rates. The

2-year point on the Treasury yield curve is assumed to increase 15 basis points and the 10-year point on the Treasury yield curve is assumed to decrease 15 basis points. Shifts in other points on the yield curve are predicted based on their correlation to the 2-year and 10-year points.

Curve steepening - assumes an instantaneous steepening of the interest rate yield curve through a decrease in short-term rates and an increase in long-term rates. The 2-year point on the Treasury yield curve is assumed to decrease 15 basis points and the 10-year point on the Treasury yield curve is assumed to increase 15 basis points. Shifts in other points on the yield curve are predicted based on their correlation to the 2-year and 10-year points.

Credit spread widening - assumes an instantaneous increase in credit spreads (the difference between yields on Treasury securities and non-Treasury securities) of 25 basis points.

Model Validation

Trading risk management personnel within FHN have primary responsibility for model risk management with respect to the model used by FHN to compute its VaR measures and perform stress testing on the trading inventory. Among other procedures, these personnel monitor model results and perform periodic backtesting as part of an ongoing process of validating the accuracy of the model. These model risk management activities are subject to annual review by FHN’s Model Validation Group, an independent assurance group charged with oversight responsibility for FHN’s model risk management.

Interest Rate Risk Management

Net Interest Income Simulation Analysis

The information provided in this section, including the discussion regarding the outcomes of simulation analysis and rate shock analysis, is forward-looking. Actual results, if the assumed scenarios were to occur, could differ because of interest rate movements, the ability of management to execute its business plans, and other factors, including those presented in the Forward-Looking Statements section of this Report.

Management uses a simulation model to measure interest rate risk and to formulate strategies to improve balance sheet positioning, earnings, or both, within FHN’s interest rate risk, liquidity, and capital guidelines. Interest rate exposure is measured by forecasting 12 months of NII under various interest rate scenarios and comparing the percentage change in NII for each scenario to a base case scenario where interest rates remain unchanged. Assumptions are made regarding future balance sheet composition, interest rate movements, and loan and

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deposit pricing. In addition, assumptions are made about the magnitude of asset prepayments and earlier than anticipated deposit withdrawals. The results of these scenarios help FHN develop strategies for managing exposure to interest rate risk. While management believes the assumptions used and scenarios selected in its simulations are reasonable, simulation modeling provides only an estimate, not a precise calculation, of exposure to any given change in interest rates.

Based on a static balance sheet as of September 30, 2024, NII exposures over the next 12 months, assuming rate shocks of plus/minus 25 basis points, plus/minus 50 basis points, plus/minus 100 basis points, and plus/minus 200 basis points are estimated to have variances as shown in the table below.

Table I.2.23

INTEREST RATE SENSITIVITY

Shifts in Interest Rates (in bps)						% Change in Projected Net Interest Income
-200						(5.9)%
-100						(2.6)%
-50						(1.3)%
-25						(0.6)%
+25						0.5%
+50						1.0%
+100						2.0%
+200						3.4%

A steepening yield curve scenario, where long-term rates increase by 50 basis points and short-term rates are static, results in a favorable NII variance of 0.3%. A flattening yield curve scenario, where long-term rates decrease by 50 basis points and short-term rates are static, results in an unfavorable NII variance of 0.4%. These hypothetical scenarios are used to create a risk measurement framework, and do not necessarily represent management’s current view of future interest rates or market developments.

Short-term interest rates had reached their highest levels in 15 years prior to September 2024's 50 basis point rate cut. Coupled with market disruption from recent high profile bank failures, this high interest rate environment has increased competitive pressures on deposit costs.

The yield curve was inverted for much of the last half of 2022, throughout 2023, and during the first eight months of 2024 before flattening in September 2024. An inverted yield curve indicates market expectations that short-term rates have likely peaked and then could decline in future periods. Following the 50 basis point rate cut in September 2024 and a 25 basis point cut in November, market participants are now projecting zero or one further 25 basis point rate cut in 2024 with an additional two to four cuts projected in 2025. FHN continues to monitor current economic trends and potential exposures closely. For additional information, see Yield Curve within Market Uncertainties and Prospective Trends below.

Liquidity Risk Management

Among other things, ALCO is responsible for liquidity management: the funding of assets with liabilities of appropriate duration, while mitigating the risk of unexpected cash needs. ALCO and the Board of Directors have adopted a Liquidity Policy of which the objective is to ensure that FHN meets its cash and collateral obligations promptly, in a cost-effective manner and with the highest degree of reliability. The maintenance of adequate levels of asset and liability liquidity should provide FHN with the ability to meet both expected and unexpected cash and collateral needs. Key liquidity ratios, asset liquidity levels, and the amount available from funding sources are reported to ALCO on a regular basis. FHN’s Liquidity Policy establishes liquidity limits that are deemed appropriate for FHN’s risk profile.

In accordance with the Liquidity Policy, ALCO manages FHN’s exposure to liquidity risk through forecasts of its

liquidity position and funding needs. Base liquidity forecasts are reviewed by ALCO and are updated as financial conditions dictate. In addition to the baseline liquidity reports, robust stress testing of assumptions and funds availability are periodically reviewed. FHN maintains a contingency funding plan that may be executed should unexpected difficulties arise in accessing funding that affects FHN, the industry, or both. As of September 30, 2024, available liquidity sources included cash, incremental borrowing capacity at the FHLB, access to Federal Reserve Bank borrowings through the discount window, and unencumbered securities. Additional sources of liquidity included dealer and commercial customer repurchase agreements, access to the overnight and term Federal Funds markets, brokered deposits, loan sales, and syndications. The table below details FHN's sources of available liquidity at September 30, 2024.

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Table I.2.24

AVAILABLE LIQUIDITY

as of September 30, 2024

(Dollars in millions)						Total Capacity						Outstanding Borrowings						Available Liquidity
Cash on deposit with FRB (a)						$	1,194					$	—					$	1,194
FHLB						8,913						400						8,513
Discount Window						23,911						—						23,911
Unencumbered securities (b)						1,019						—						1,019
Total Available Liquidity																		$	34,637

(a) Included in interest-bearing deposits with banks on the Consolidated Balance Sheets.

(b) Subject to market haircuts on collateral.

Generally, a primary source of funding for a bank is core deposits from the bank's client base. The period-end loans-to-deposits ratio was 94% as of September 30, 2024 and 93% as of December 31, 2023.

FHN may also use unsecured short-term borrowings as a source of liquidity. Federal funds purchased from correspondent bank clients are considered to be substantially more stable than funds purchased in the national broker markets for federal funds due to the long, historical, and reciprocal nature of banking services provided by FHN to these correspondent banks. The remainder of FHN’s wholesale short-term borrowings consists of securities sold under agreements to repurchase transactions accounted for as secured borrowings with business clients or broker dealer counterparties.

Both FHN and First Horizon Bank have the ability to generate liquidity by issuing senior or subordinated unsecured debt, preferred equity, and common equity, subject to market conditions and compliance with applicable regulatory requirements. As of September 30, 2024, FHN had outstanding $798 million in senior and subordinated unsecured debt and $426 million in non-cumulative perpetual preferred stock. FHN redeemed all outstanding shares of its Series D Non-Cumulative Perpetual Preferred Stock during second quarter 2024. As of September 30, 2024, First Horizon Bank and subsidiaries had outstanding preferred shares of $295 million, which are reflected as noncontrolling interest on the Consolidated Balance Sheets.

Parent company liquidity is primarily provided by cash flows stemming from dividends and interest payments collected from subsidiaries. These sources of cash represent the primary sources of funds to pay cash dividends to shareholders and principal and interest to debt holders of FHN. Applying the dividend restrictions imposed under applicable federal and state rules, the Bank’s total amount available for dividends was $1.0 billion as of October 1, 2024.

First Horizon Bank declared and paid common dividends to the parent company in the amount of $310 million in first quarter 2024, $150 million in second quarter 2024, $350 million in third quarter 2024, and $300 million in fourth quarter 2024. Total common dividends of $220 million were declared and paid to the parent company in 2023. First Horizon Bank declared and paid preferred dividends in the first three quarters of 2024 and in 2023. Additionally, First Horizon Bank declared preferred dividends in fourth quarter 2024, payable in January 2025.

Payment of a dividend to shareholders of FHN is dependent on several factors which are considered by the Board. These factors include FHN’s current and prospective capital, liquidity, and other needs, applicable regulatory restrictions (including capital conservation buffer requirements) and availability of funds to FHN through a dividend from First Horizon Bank. Additionally, banking regulators generally require insured banks and bank holding companies to pay cash dividends only out of current operating earnings. Consequently, the decision of whether FHN will pay future dividends and the amount of dividends will be affected by current operating results.

FHN paid a cash dividend of $0.15 per common share on October 1, 2024. FHN paid cash dividends of $1,625 per Series E preferred share and $1,175 per Series F preferred share on October 10, 2024 and $165 per Series C preferred share on November 1, 2024. In addition, in October 2024, the Board approved cash dividends per share in the following amounts:

Table I.2.25

CASH DIVIDENDS

APPROVED BUT NOT PAID

Dividend/Share

Record Date

Payment Date

Common Stock

$

0.15

12/13/2024

01/02/2025

Preferred Stock

Series B

$

331.25

01/17/2025

02/03/2025

Series C

$

165.00

01/17/2025

02/03/2025

Series E

$

1,625.00

12/26/2024

01/10/2025

Series F

$

1,175.00

12/26/2024

01/10/2025

Off-Balance Sheet Arrangements

In the normal course of business, FHN is a party to a number of activities that contain credit, market and operational risk that are not reflected in whole or in part in the consolidated financial statements. Such activities include traditional off-balance sheet credit-related financial instruments. FHN enters into commitments to extend credit to borrowers, including loan commitments, lines of credit, standby letters of credit, and commercial letters of credit. Many of the commitments are expected to expire unused or be only partially used; therefore, the total amount of commitments does not necessarily represent future cash requirements. Based on its available

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liquidity and available borrowing capacity, FHN anticipates it will continue to have sufficient funds to meet its current commitments.

Repurchase Obligations

Prior to September 2008, legacy First Horizon originated loans through its pre-2009 mortgage business, primarily first lien home loans, with the intention of selling them. FHN's principal remaining exposures for those activities relate to (i) indemnification claims by underwriters, loan purchasers, and other parties which assert that FHN-originated loans caused or contributed to losses which FHN is legally obliged to indemnify, and (ii) indemnification or other claims related to FHN's servicing of pre-2009 mortgage loans.

FHN’s approach for determining the adequacy of the repurchase and foreclosure reserve has evolved, sometimes substantially, based on changes in information available. Repurchase/make-whole rates vary based on purchaser, vintage, and claim type. For those loans repurchased or covered by a make-whole payment, cumulative average loss severities range between 50 and 60 percent of the UPB.

Repurchase Accrual Approach

In determining potential loss content, claims are analyzed by purchaser, vintage, and claim type. FHN considers various inputs including claim rate estimates, historical average repurchase and loss severity rates, mortgage insurance cancellations, and mortgage insurance curtailment requests. Inputs are applied to claims in the

active pipeline, as well as to historical average inflows to estimate loss content related to potential future inflows. Management also evaluates the nature of claims from purchasers and/or servicers of loans sold to determine if qualitative adjustments are appropriate.

Repurchase and Foreclosure Liability

As discussed in Note 10 - Contingencies and Other Disclosures to the Consolidated Financial Statements in Part I, Item 1 of this report, FHN’s repurchase and foreclosure liability, primarily related to its pre-2009 mortgage origination, sale, securitization, and servicing businesses, is comprised of accruals to cover estimated loss content in the active pipeline, estimated future inflows, and estimated loss content related to certain known claims not currently included in the active pipeline. The active pipeline consists of mortgage loan repurchase and make-whole demands from loan purchasers or securitization participants, foreclosure/servicing demands from borrowers, and certain related exposures. The liability contemplates repurchase/make-whole and damages obligations and estimates for probable incurred

losses associated with loan populations excluded from the settlements with the GSEs, as well as other whole loans sold, mortgage insurance cancellation rescissions, and loans included in bulk servicing sales effected prior to the settlements with the GSEs. FHN compares the estimated probable incurred losses determined under the applicable loss estimation approaches for the respective periods with current reserve levels. Changes in the estimated required liability levels are recorded as necessary through the repurchase and foreclosure provision. The total repurchase and foreclosure liability, which includes both the legacy pre-2009 business and the current mortgage business, was $15 million and $16 million as of September 30, 2024 and December 31, 2023, respectively.

Market Uncertainties and Prospective Trends

FHN’s future results could be affected both positively and negatively by several known trends. Key among those are changes in the U.S. and global economy and outlook, government actions affecting interest rates, and government actions and proposals which could have positive or negative impacts on the economy at large or on certain businesses, industries, or sectors. Additional risks relate to political uncertainty, changes in federal policies (including those publicly discussed, formally

proposed, or recently implemented) and the potential impacts of those changes on our businesses and clients, and whether FHN’s strategic initiatives will succeed.

In addition to trends and events noted elsewhere in this MD&A, FHN believes the following trends and events are noteworthy at this time.

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Inflation, Recession, and Federal Reserve Policy

Economic Overview

The post-COVID economy in the U.S. has been marked by: strong inflation, which began in 2021, peaked in 2022, and abated, though not fully, starting in 2023; the Federal Reserve "tightening" in 2022 and the first half of 2023 to contain inflation by rapidly increasing short-term interest rates and ending asset purchases; low unemployment rates; moderate economic growth; and a profoundly inverted yield curve. Key aspects were:

•Although the U.S. economy flirted with recession in 2022, it did not officially enter one. In 2023 recession concerns moderated significantly. In 2024, recession expectations have remained generally low.

•The rise in short-term interest rates by the Federal Reserve in 2022 was both rapid and substantial, taking the overnight Fed Funds rate from 0.20% in March 2022 to 4.65% a year later. Hikes after that were much more modest and infrequent.

•In 2023 the Federal Reserve signaled an end to hikes. No rate actions were taken for more than a year, until a 50 basis point cut in September 2024. Future actions continue to depend upon future data.

•In response to 2022's extremely rapid and vigorous tightening of monetary policy, the inflation rate in the U.S. now is well below 2022's levels. However, measures of inflation generally remain higher than the Federal Reserve's stated long-term goal of 2%.

•Monetary tightening often creates yield curve inversion for a time. In the current cycle, traditional inversion (when ten-year treasury rates are below two-year rates) was both very deep and unusually sustained, with inversion lasting from the summer of 2022 to September 2024.

Key events and circumstances are noted in the following discussions.

Federal Reserve and Rates

The Federal Reserve raised short-term rates several times in 2022 and in the first part of 2023. All but one of the raises in 2022 were 75 and 50 basis points each—aggressive by historical standards—while the 2023 raises were the more-typical 25 basis points each. The Federal Reserve cut rates 50 basis points in September 2024 and 25 basis points in November 2024.

FHN cannot predict exactly when or how much short-term rates will be changed, how market-driven long-term rates will behave, nor how those actions may affect financial markets during the next several quarters.

Yield Curve

Unusual yield curve effects, including inversion, are common when monetary policy changes. A traditional

measure of inversion occurs when the two-year U.S. Treasury rate is higher than the ten-year rate. Traditional inversion was sustained continuously from the summer of 2022 until September 2024, an unusually long period. The degree of inversion varied during that period, but often was much deeper than is typical. Sustained traditional yield curve inversion is viewed, with statistical support, as a harbinger of economic recession, but recession did not occur.

Early in the fourth quarter of 2024, the yield curve is relatively flat, meaning the two-year U.S. Treasury rate is only modestly lower than the ten-year rate.

Yield curve flattening and inversion generally reduces the profit FHN can make from lending by compressing FHN's net interest margin, and also generally reduces FHN's revenues from bond trading. Both of those impacts occurred over the past two years, with fluctuations. Refer to Interest Rate & Yield Curve Risks, located in Item 1A. Risk Factors of FHN's Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of the risks to FHN associated with flattening and inversion.

Recession

The U.S. economy contracted (experienced negative growth) during the first two quarters of 2022, in both cases modestly. Although the occurrence of two consecutive quarters of contraction often coincides with recession, in 2022 it did not. The economy has expanded in each quarter since then. The expansion rate has varied without a sustained trend.

Recession expectations in the U.S. were high in 2022 and early 2023. They moderated significantly after that. In 2024 recession expectations have fluctuated but generally have remained low.

Fiscal Policy

The Federal Reserve controls monetary policy for the U.S. government, but not fiscal policy (spending and taxation). Fiscal policy directly affects U.S. government annual deficits or surpluses, along with the size and trajectory of the national debt. Fiscal policy often has a significant impact on the U.S. economy. Some of the unusual or unexpected aspects of the post-COVID economy likely were created or supported by historically unusual fiscal stimulus and other stimulative policies which pushed, and in some cases continue to push, substantial amounts of money into the economy.

The federal elections in November 2024 could result in significant changes in U.S. fiscal policy in 2025 and 2026.

2023 Banking Crisis

In March 2023, two large regional U.S. banks failed after sudden large deposit outflows, and a major Swiss bank was acquired by another bank at the behest of regulators.

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In May 2023, a third large regional U.S. bank failed after experiencing very large deposit outflows in March. In the aftermath of these failures, bank investors and clients across the U.S. became more focused on deposit mix, funding risk management, and other safety-soundness concerns. Most U.S. banks saw abrupt net outflows of deposits in the spring of 2023 following the failures. Most have since recouped those deposits, mainly by offering higher interest rates. In 2024, competition for deposits has been quite intense.

Impacts on FHN

In 2022, FHN benefited significantly from rising rates as the rise in lending rates outpaced the rise in deposit and other funding rates. In the first quarter of 2023, that outpacing ended, and FHN's net interest margin (NIM) started to compress. FHN was able to reverse the compression during 2023 fueled in part by using increased deposits and capital to reduce more-expensive borrowings. FHN's NIM further improved in the first half of 2024 compared with the second half of 2023. Third quarter NIM contracted modestly while remaining higher than in 2023.

In 2024 through third quarter, improvements in loan yields have been largely offset by higher funding costs, especially for deposits. Deposit costs have increased

largely in response to heightened competition in many of FHN's markets. Although that competitive environment is expected to continue, rate cuts are expected to moderate funding costs, especially as old commitments expire. A key uncertainty is whether rate cuts will impact loan yields as strongly as funding costs, and at the same times.

In addition, some of FHN's businesses have been negatively impacted by rate actions in the past two years and by the unusual yield curve. Rate increases pushed home mortgage rates in the U.S. much higher in 2022 and 2023, reducing demand. FHN's direct mortgage lending and lending to mortgage companies saw business decline significantly in 2022 and 2023. Mortgage rates modestly abated in 2024 through third quarter, and FHN's related businesses improved, but long-term rates remain well above the lows of a few years ago and even have trended upward since late in the third quarter. Moreover, FHN's revenues from bond trading and related activities fell significantly in 2022 and 2023 due to rising rates coupled with elevated market volatility. In 2024, bond trading revenues have improved markedly, but with significant volatility quarter-to-quarter. Bond revenues likely have fluctuated due to changing market expectations about rate moves, among other things.

Other Regulatory Proposals

In 2023, the Board of Governors of the Federal Reserve and other regulators proposed regulatory changes that would, if implemented, significantly increase regulatory constraints and costs on all U.S. banks with assets over $100 billion. A few new requirements would apply to banks, like FHN, with assets over $50 billion, but by far the main impacts would fall on banks greater than $100 billion in assets.

The proposals touch upon many regulatory requirements, including debt and equity capital requirements, credit risk standards, asset risk-weighting, and resolution planning. The increased requirements also would entail additional compliance costs.

The triggering of significant cost increases based on a single threshold financial measure—$100 billion in assets

—has been in place for many years and has impacted the U.S. banking industry. Compliance restrictions and costs increase as the threshold is approached but a step-up pattern remains. Those effects have added to the incentives for banks to consolidate, and the proposed new rules are likely to enhance that.

It appears likely that, if adopted as proposed, significant parts of the proposals will be challenged in court as being inconsistent with legislation enacted by Congress in 2018. Such a challenge would be technical and complex, and likely would take many years to resolve. Moreover, even if a challenge of that sort were successful, many parts of the proposals likely would remain intact and others might be modified without being rescinded.

Greenhouse Gas (GHG) Reporting Regimes

In October 2023, the state of California enacted laws which, taken together, will require most larger companies doing business in California to report annually their greenhouse gas ("GHG") emissions, with an external assurance requirement, and to report biennially their climate-related financial risks and risk-mitigation measures. The California laws include multi-year phase in periods and encompass Scope 1, Scope 2, and Scope 3 GHG emissions. As currently enacted, the laws require implementing regulations to be adopted by July 1, 2025,

and reporting for Scopes 1 and 2 to begin in 2026 for the 2025 fiscal year.

In March 2024, the U.S. Securities and Exchange Commission ("SEC") adopted final rules, “The Enhancement and Standardization of Climate-Related Disclosures for Investors” (the “SEC Climate Disclosures Rules”). These Rules would require all U.S. companies with publicly-traded securities to report annually their Scope 1 and 2 GHG emissions and related risk management processes, and would include a related financial statement

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and audit requirement, among other things. Refer to "Accounting Changes" below for additional information. The SEC Climate Disclosures Rules also have a lengthy phase-in period.

Europe also has adopted a GHG reporting regime. It is not applicable to FHN and is not further discussed here.

Three GHG Scopes

Scope 1 GHG emissions are those from a source the company owns or controls directly, such as a manufacturing plant. Scope 2 emissions are indirect emissions from company activities, such as from power consumed by company operations. Scope 1 and 2 emissions generally can be measured or estimated using information a company normally can obtain without significant external inquiry.

Scope 3 GHG emissions are those from sources and activities that a company neither owns nor controls. Scope 3 emissions are from a wide range of sources that touch upon a company, such as: vendors; employees (commuting, business travel, etc.); and customers. Scope 3 information generally is unknown to a company without significant external inquiry and/or estimation.

Potential Business Impacts

Direct compliance costs will include creating systems to measure or estimate and capture relevant data, staffing, and engagement of vendors, including a firm to provide required assurances (somewhat analogous to a financial statement auditor).

Potentially of more significance: California may require inquiry of customers rather than mere estimation about them. If FHN is allowed merely to estimate emissions from customers, that process may be costly but would not interfere with its business relationships. If, however, FHN is required to support Scope 3 reporting by obtaining

GHG-related information from customers, including customers that are not public companies and that do no business in California, then the California disclosure laws could interfere with FHN's business. In that case, effectively FHN would be required to impose costs and/or inconveniences on its customers. Other banks in FHN's markets, particularly those that are private and not doing business in California, could provide financial services without those requirements, putting FHN at a competitive disadvantage.

Legal Challenges

The California laws, especially the application of those laws to companies outside of California, have been challenged in court. Challengers assert that the laws, among other things, unconstitutionally burden interstate commerce, are pre-empted by federal law, and unconstitutionally compel or burden speech. Challenges could take many years to resolve. A key practical question will be whether the courts maintain a legal stay (a moratorium) on these laws nationwide while challenges are pending.

The SEC Climate Disclosures rules likewise are being challenged in court. Challengers assert, among other things, that the SEC lacks explicit Congressional authorization to create a regulatory reporting regime pertaining to GHG emissions. The several challenges have been consolidated in the U.S. (federal) 8th Circuit. Possibly anticipating a court-ordered stay, the SEC has suspended the effectiveness of its rules while the court challenges are pending.

Assuming that the various legal challenges leave the SEC Climate Disclosures Rules entirely or largely intact, the California laws might be further challenged by public companies as having been pre-empted by the SEC Rules.

Market Growth and Weather Events

FHN's principal markets are in the southern and southeastern United States, including most of the major gulf coast markets and several markets on the southern Atlantic seacoast. Many of FHN's markets, both coastal and non-coastal, have experienced significant population growth over at least the past twenty years, outpacing the growth rate for the U.S. as a whole. That population growth generally has been accompanied by economic growth.

Many of FHN's fastest growing markets, including most significantly those in Florida, can be impacted significantly by hurricanes and other severe coastal weather events. As those markets grow, FHN's economic commitment to them grows, as does FHN's financial exposure to those events.

Over the past two years it has been widely reported that the economic costs of hurricane and other severe weather

events in the southeastern U.S. have been rising significantly. FHN believes that rising costs are directly related to growth in those areas.

For example, much of the growth in Florida has been along the coast moving out from older cities. A gulf coast hurricane 50 or 60 years ago had a fair chance of making landfall in a relatively unpopulated area. Now, the chances of directly hitting a population center are much higher, the average population in that center is much higher, and the average value per building is much higher.

The reported significant increase in casualty risks and costs is being reflected in property insurance practices which currently are in significant flux. The insurance industry is being forced to revise its risk assessment and premium pricing practices in coastal and other impacted areas as loss experience has deviated from earlier predictions, sometimes badly. In Florida, for example,

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some smaller carriers have failed, some larger carriers have left markets, and remaining carriers have significantly increased the premiums of hurricane-related insurance, narrowed coverage, or both.

Coastal states such as Florida and Louisiana have created last-resort insurance pools for residents who cannot obtain or afford private property insurance. However, as the costs borne by those pools increase, either the premiums will have to rise or general taxation will have to cover the difference. In addition, those programs generally do not help business clients, nor are they offered in many states that can be severely impacted by hurricane-related flooding.

State and local building and water-control codes are being revised, but often unevenly and often not retroactive to

pre-existing structures and developments. The current transition period could be lengthy.

The availability, reliability, and cost of adequate property insurance is a significant concern for FHN as well as FHN's clients in affected markets. Instability in property insurance has made, and continues to make, FHN's business decisions more difficult. That instability increases FHN's risks of loan loss and business downturn.

More fundamentally, elevated insurance and casualty costs blunt a key factor driving growth in many of these high-growth markets: lower costs of living. If market growth slows, FHN's business could be impacted.

Critical Accounting Policies and Estimates

FHN has made no significant changes in its critical accounting policies and estimates from those disclosed in its 2023 Annual Report on Form 10-K.

Accounting Changes

In March 2024, the SEC adopted its Climate Disclosures Rules (refer to "Greenhouse Gas (GHG) Reporting Regimes" above). Those Rules, when effective, will require registrants to disclose certain climate-related information in registration statements and annual reports. Information required for inclusion within the footnotes to the financial statements for severe weather events and other natural conditions includes 1) income statement effects before insurance recoveries above 1% of pre-tax income/loss, 2) balance sheet effects above 1% of shareholders’ equity, and 3) certain carbon offsets and renewable energy credits. Qualitative discussion is also required for material impacts on financial estimates and assumptions that are due to severe weather events and other natural conditions or disclosed climate-related targets or transition plans.

Disclosures that are outside the financial statements include 1) Scope 1 and Scope 2 GHG emissions, if material, 2) how the Board of Directors oversees the assessment and management of climate-related risks, 3) management’s role in assessing and managing climate-related risks if the risks are material, 4) climate-related risks that have had or are reasonably likely to have a material effect on its business strategy, results of operations, or financial condition, including whether the risks are expected to manifest in the short term (i.e., next 12 months) and, separately, in the long term (i.e., beyond the next 12 months), 5) if a registrant has adopted a plan to manage material climate transition risks, the plan should be described and updated annually to specify its progress toward completing the transition plan, including any actions taken under the plan and how those actions

have affected the registrant’s business, results of operations, or financial condition, 6) if a registrant has adopted a plan to manage material climate transition risks, the plan should be described and updated annually to specify its progress toward completing the transition plan, including any actions taken under the plan and how those actions have affected the registrant’s business, results of operations, or financial condition, 7) quantitative price disclosures if a registrant uses an internal carbon price (e.g., a monetary cost assigned to carbon emissions for budgeting, forecasting, or performance management) and this use is material to how it evaluates material climate-related risks, 8) if a registrant uses a scenario analysis to assess its business in the context of climate-related risks and, on the basis of that analysis, determines that a climate-related risk is reasonably likely to have a material impact, the registrant must describe each scenario, including the parameters, assumptions, and projected financial impacts, 9) the registrant's processes for “identifying, assessing and managing” material climate-related risks, 10) information about the registrant's publicly announced or internal climate-related targets or goals if they materially affect or are reasonably likely to materially affect the registrant's business, results of operations, or financial condition (e.g., expenditures or operational changes needed to meet the targets or goals) and 11) quantitative and qualitative descriptions of the material expenditures incurred and material impacts on financial estimates and assumptions that, in management’s assessment, directly result from activities to mitigate or adapt to material climate-related risks.

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In April 2024, the SEC issued a stay of the Climate Disclosures Rules pending the completion of judicial review of various legal challenges. Therefore, the actual timing of the implementation of the Climate Disclosure Rules, if sustained through the judicial process, is uncertain. FHN is assessing the potential effects of the Climate Disclosure Rules on its registration statements and annual reports.

Refer to Note 1 – Basis of Presentation and Accounting Policies in the Consolidated Financial Statements in Part I, Item 1 of this report for a detail of accounting changes with extended transition periods, accounting changes adopted in the current year and accounting changes issued but not currently effective, which section is incorporated into MD&A by this reference.

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Non-GAAP Information

Table I.2.26

NON-GAAP TO GAAP RECONCILIATION

						Three Months Ended																					Nine Months Ended
(Dollars in millions; shares in thousands)						September 30, 2024						June 30, 2024						September 30, 2023												September 30, 2024						September 30, 2023
Pre-provision Net Revenue (Non-GAAP)
Net interest income (GAAP)						$	627					$	629					$	605											$	1,881					$	1,923
Plus: Noninterest income (GAAP)						200						186						173												581						745
Total revenues (GAAP)						827						815						778												2,462						2,668
Less: Noninterest expense (GAAP)						511						500						474												1,527						1,508
Pre-provision net revenue (Non-GAAP)						$	316					$	315					$	304											$	935					$	1,160
Average Tangible Common Equity (Non-GAAP)
Average total equity (GAAP)						$	9,128					$	8,949					$	8,978											$	9,109					$	8,905
Less: Average noncontrolling interest (a)						295						295						295												295						295
Less: Average preferred stock (a)						426						426						520												457						838
(A) Total average common equity						$	8,407					$	8,228					$	8,163											$	8,357					$	7,772
Less: Average goodwill and other intangible assets (GAAP)(b)						1,669						1,680						1,714												1,680						1,726
(B) Average tangible common equity (Non-GAAP)						$	6,738					$	6,548					$	6,449											$	6,677					$	6,046
Net Income Available to Common Shareholders
(C) Net income available to common shareholders (annualized) (GAAP)						$	849					$	739					$	513											$	776					$	922
Tangible Common Equity (Non-GAAP)
(D) Total equity (GAAP)						$	9,316					$	8,955					$	8,793											$	9,316					$	8,793
Less: Noncontrolling interest (a)						295						295						295												295						295
Less: Preferred stock (a)						426						426						520												426						520
(E) Total common equity						$	8,595					$	8,234					$	7,978											$	8,595					$	7,978
Less: Goodwill and other intangible assets (GAAP)(b)						1,664						1,675						1,709												1,664						1,709
(F) Tangible common equity (Non-GAAP)						6,931						6,559						6,269												6,931						6,269
Less: Unrealized gains (losses) on AFS securities, net of tax						(669)						(901)						(1,170)												(669)						(1,170)
(G) Adjusted tangible common equity (Non-GAAP)						$	7,600					$	7,460					$	7,439											$	7,600					$	7,439
Tangible Assets (Non-GAAP)
(H) Total assets (GAAP)						$	82,635					$	82,230					$	82,533											$	82,635					$	82,533
Less: Goodwill and other intangible assets (GAAP) (b)						1,664						1,675						1,709												1,664						1,709
(I) Tangible assets (Non-GAAP)						$	80,971					$	80,555					$	80,824											$	80,971					$	80,824
Risk-Weighted Assets
(J) Risk-weighted assets (c)						$	71,463					$	71,913					$	71,866											$	71,463					$	71,866
Period-end Shares Outstanding
(K) Period-end shares outstanding						532,181						536,876						558,709												532,181						558,709
Ratios
(C)/(A) Return on average common equity (GAAP)						10.10		%				8.98		%				6.28		%										9.28		%				11.86		%
(C)/(B) Return on average tangible common equity (Non-GAAP)						12.60						11.29						7.95												11.62						15.24
(D)/(H) Total period-end equity to period-end assets (GAAP)						11.27						10.89						10.65												11.27						10.65
(F)/(I) Tangible common equity to tangible assets (Non-GAAP)						8.56						8.14						7.76												8.56						7.76
(G)/(J) Adjusted tangible common equity to risk-weighted assets (Non-GAAP)						10.63						10.37						10.35												10.63						10.35
(E)/(K) Book value per common share (GAAP)						$	16.15					$	15.34					$	14.28											$	16.15					$	14.28
(F)/(K) Tangible book value per common share (Non-GAAP)						$	13.02					$	12.22					$	11.22											$	13.02					$	11.22

(a) Included in total equity on the Consolidated Balance Sheets.

(b) Includes goodwill and other intangible assets, net of amortization.

(c) Defined by and calculated in conformity with bank regulations applicable to FHN.

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PART I, ITEM 3. DISCLOSURES ABOUT MARKET RISK AND ITEM 4. CONTROLS & PROCEDURES
Table of Contents

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

The information called for by this item is contained in

(a) Management’s Discussion and Analysis of Financial Condition and Results of Operations included as Item 2 of Part I of this report, including in particular the section entitled “Risk Management” beginning on page 100 of this report and the subsections entitled “Market Risk Management” beginning on page 100 and “Interest Rate Risk Management” beginning on page 101 of this report, and

(b) Note 14 to the Consolidated Financial Statements appearing on pages 48-54 of this report, all of which materials are incorporated herein by reference. For additional information concerning market risk and our

management of it, refer to: Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in Item 7 to FHN’s Annual Report on Form 10-K for the year ended December 31, 2023, including in particular the section entitled “Risk Management” beginning on page 81 of that Report and the subsections entitled “Market Risk Management” beginning on page 82 and “Interest Rate Risk Management” beginning on page 84 of that Report; and Note 21 to the Consolidated Financial Statements appearing on pages 178-184 of Item 8 to FHN’s Annual Report on Form 10-K for the year ended December 31, 2023.

Item 4.    Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this quarterly report. Based on that evaluation, the chief executive officer and the chief financial officer have concluded that our disclosure controls and procedures

were effective as of the end of the period covered by this report.

(b)Changes in Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting during the third fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION, ITEMS 1. THROUGH 5.
Table of Contents

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

The “Contingencies” section of Note 10 to the Consolidated Financial Statements beginning on page 37 of this Report is incorporated into this Item by reference.

Item 1A. Risk Factors

Material changes from risk factor disclosures in FHN's Annual Report on Form 10-K for the year ended December 31, 2023:

Not applicable.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Equity Securities Sold

Not applicable

(b) Use of Proceeds If Rule 463 is Applicable

Not applicable

(c) Equity Repurchases

The "Common Stock Purchases” section including tables I.2.19 and I.2.20 and explanatory discussions included in

Item 2 of Part I of this report under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” beginning on page 98 of this report, is incorporated herein by reference.

Items 3. and 4.

Not applicable

Item 5.    Other Information

(a) Previously Unreported 8-K Disclosures

Not applicable

(b) Change in Nomination Procedures

Not applicable

(c) Trading Arrangement Disclosures

During the third quarter of 2024, the following directors or executive officers (those officers who are required to file stock ownership reports on SEC Forms 3, 4, and 5) adopted, modified, or terminated the Rule 10b5-1 trading arrangements, and the non-Rule 10b5-1 trading arrangements, shown in Table II.5c below.

Unless otherwise explicitly indicated in a footnote to the Table, each arrangement marked in the Table as "10b5-1"

under the "Arrangement Type" column is intended by its maker, as reported to FHN, to satisfy the affirmative defense requirements of SEC Rule 10b5-1(c).

If "Not applicable" appears in the Table, then for the third quarter of 2024 no director or executive officer of FHN adopted, modified, or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement.

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PART II—OTHER INFORMATION, ITEMS 1. THROUGH 5.
Table of Contents

Table II.5c

TRADING ARRANGEMENTS CREATED, MODIFIED, OR TERMINATED MOST RECENT QUARTER

Arrangement Type

Type of Action Taken During Quarter

Date Action Taken

Duration or Expiration Date

Total Shares to be

Name & Title

10b5-1

non-10b5-1

Bought

Sold

Not applicable

Item 6.    Exhibits

10-Q EXHIBIT TABLE

Exh. No.

Description of Exhibit to this Report

Filed Here

Mngt Exh

Furnished

Incorporated by Reference to

Form

Exh. No.

Filing Date

3.1

Amended and Restated Charter of First Horizon Corporation [2024]

8-K

3.1

7/24/2024

3.2

Bylaws of First Horizon Corporation, as amended and restated effective January 22, 2024

8-K

3.1

1/23/2024

4.2

FHN agrees to furnish to the Securities and Exchange Commission upon request a copy of each instrument defining the rights of the holders of the senior and subordinated long-term debt of FHN and its consolidated subsidiaries

10.1

Rate Applicable to Participating Directors under the Directors and Executives Deferred Compensation Plan

X

X

31(a)

Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

X

31(b)

Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

X

32(a)

18 USC 1350 Certifications of CEO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

X

X

32(b)

18 USC 1350 Certifications of CFO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

X

X

XBRL Exhibits

101

The following financial information from First Horizon Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL: (i) Consolidated Balance Sheets at September 30, 2024 and December 31, 2023; (ii) Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2024 and 2023; (iii) Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023; (iv) Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2024 and 2023; (v) Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023; and (vi) Notes to the Consolidated Financial Statements.

X

101. INS

XBRL Instance Document -- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101. SCH

Inline XBRL Taxonomy Extension Schema

X

101. CAL

Inline XBRL Taxonomy Extension Calculation Linkbase

X

101. LAB

Inline XBRL Taxonomy Extension Label Linkbase

X

101. PRE

Inline XBRL Taxonomy Extension Presentation Linkbase

X

			113			3Q24 FORM 10-Q REPORT

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PART II—OTHER INFORMATION, ITEM 6. EXHIBITS
Table of Contents

Exh. No.

Description of Exhibit to this Report

Filed Here

Mngt Exh

Furnished

Incorporated by Reference to

Form

Exh. No.

Filing Date

101. DEF

Inline XBRL Taxonomy Extension Definition Linkbase

X

104

Cover Page Interactive Data File, formatted in Inline XBRL (included in Exhibit 101)

X

In the Exhibit Table: the “Filed Here” column denotes each exhibit which is filed or furnished (as applicable) with this report; the “Mngt Exh” column denotes each exhibit that represents a management contract or compensatory plan or arrangement required to be identified as such; the “Furnished” column denotes each exhibit that is “furnished” pursuant to 18 U.S.C. Section 1350 or otherwise, and is not “filed” as part of this Report or as a separate disclosure document; and the phrase “2023 named executive officers” refers to those executive officers whose 2023 compensation was described in our 2024 Proxy Statement.

In many agreements filed as exhibits, each party makes representations and warranties to other parties. Those representations and warranties are made only to and for the benefit of those other parties in the context of a business contract. Exceptions to such representations and warranties may be partially or fully waived by such parties, or not enforced by such parties, in their discretion. No such representation or warranty may be relied upon by any other person for any purpose.

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SIGNATURES
Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

FIRST HORIZON CORPORATION (Registrant)

Date: November 7, 2024

By:

/s/ Hope Dmuchowski

Name:

Hope Dmuchowski

Title:

Senior Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)

			115			3Q24 FORM 10-Q REPORT