Loans | Loans The following table provides the balance (amortized cost basis) of loans, net of unearned income, by portfolio segment as of June 30, 2020 and December 31, 2019 : June 30 December 31 (Dollars in thousands) 2020 2019 Commercial: Commercial, financial, and industrial $ 21,393,893 $ 20,051,091 Commercial real estate 4,813,341 4,337,017 Consumer: Consumer real estate (a) 6,052,393 6,177,139 Credit card & other 449,310 495,864 Loans, net of unearned income $ 32,708,937 $ 31,061,111 Allowance for loan losses 537,881 200,307 Total net loans $ 32,171,056 $ 30,860,804 (a) In first quarter 2020, the Permanent Mortgage portfolio was combined into Consumer Real Estate portfolio; all prior periods were revised for comparability. COMPONENTS OF THE LOAN PORTFOLIO The loan portfolio is disaggregated into 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 determined based on the initial measurement attribute (i.e., amortized cost or purchased credit-impaired), risk characteristics of the loan, and FHN’s method for monitoring and assessing credit risk. Commercial loan portfolio segments include commercial, financial and industrial (“C&I”) and commercial real estate ("CRE"). Commercial classes within C&I include general C&I, loans to mortgage companies ("LMC"), the trust preferred loans (“TRUPS”) (i.e. long-term unsecured loans to bank and insurance-related businesses) portfolio and purchased credit-impaired (“PCI”) loans (for periods prior to 2020). Loans to mortgage companies include 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. Commercial classes within CRE include income CRE, residential CRE and PCI loans (for periods prior to 2020). Consumer loan portfolio segments include consumer real estate, and the credit card and other portfolio. Consumer classes include home equity lines of credit (“HELOCs”), real estate (“R/E”) installment and PCI loans (for periods prior to 2020) within the consumer real estate segment and credit card and other. Credit Risk Characteristics Inherent in the Loan Portfolio Credit risk is the risk of loss due to adverse changes in a borrower’s or counterparty’s ability to meet its financial obligations under agreed upon terms. FHN is subject to credit risk in lending, trading, investing, liquidity/funding, and asset management activities although lending activities have the most exposure to credit risk. The nature and amount of credit risk depends on the types of transaction, the structure of those transactions, collateral received, the use of guarantors and the parties involved. FHN assesses and manages credit risk through a series of policies, processes, measurement systems, and controls. FHN’s credit risk function ensures subject matter experts are providing oversight, support and credit approvals, particularly in the specialty lending areas where industry-specific knowledge is required. Management emphasizes general portfolio servicing such that emerging risks are able to be identified early enough to correct potential deficiencies, prevent further credit deterioration, and mitigate credit losses. Commercial Loans The C&I portfolio is comprised of loans used for general business purposes. Typical products including working capital lines of credit, term loan financing of owner-occupied real estate and fixed assets, and trade credit enhancement through letters of credit. FHN utilizes deal teams comprised of relationship managers (RMs), portfolio managers (PMs), credit analysts and other specialists to identify, mitigate, document, and manage ongoing risk. Their function includes enhanced analytical support during loan origination and servicing, monitoring the financial condition of the borrower, and tracking compliance with loan agreements. FHN strives to identify problem assets early through comprehensive policies and guidelines, targeted portfolio reviews, more frequent servicing on lower rated borrowers, and an emphasis on frequent grading. To the extent a guarantor/sponsor is used to support a commercial lending decision, FHN analyzes capability to pay, factoring in, among other things, liquidity and direct/indirect cash flows. A strong, legally enforceable guaranty can mitigate the risk of default or loss, justify a less severe rating, and consequently reduce the level of allowance or charge-off that might otherwise be deemed appropriate. Loans to mortgage companies include 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. Approximately 95 percent of the loans to mortgage companies are collateralized with government guaranteed loans. The loans are of short duration with maturities less than one year. TRUPS loans are long-term unsecured loans to bank and insurance-related businesses. TRUPS lending was originally extended as a form of “bridge” financing to participants in the pooled trust preferred securitization program offered primarily to smaller banking (generally less than $15 billion in total assets) and insurance institutions through FHN’s fixed income business. Origination of TRUPS lending ceased in early 2008. Individual TRUPS are regraded at least quarterly as part of FHN’s commercial loan review process. Commercial Real Estate loans include financings for commercial construction and nonconstruction loans. The income-producing CRE class contains loans and 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 residential CRE class includes loans to residential builders and developers for the purpose of constructing single-family homes, condominiums, and town homes and on a limited basis, for developing residential subdivisions. Active residential CRE lending is primarily focused in certain core markets with nearly all new originations made to “strategic” clients. FHN considers a “strategic” residential CRE borrower as a homebuilder who demonstrates the ability to withstand cyclical downturns, maintains active development and investment activities providing for regular financing opportunities, and is fundamentally sound as evidenced by a prudent loan structure, appropriate covenants and recourse, and capable and willing sponsors in markets with positive homebuilding and economic dynamics. The credit administration and ongoing monitoring of these portfolios consists of multiple internal control processes including stressing a borrower’s or project’s financial capacity utilizing numerous attributes such as interest rates, vacancy, and discount rates. Key information captured from the various portfolios is aggregated and utilized to assist with the assessment and adequacy of the ALLL and to steer portfolio management strategies. Paycheck Protection Program Loans Included in commercial loans are $2.1 billion of C&I loans made under the Paycheck Protection Program ("PPP Loans") of the Small Business Administration ("SBA"). PPP Loans have been extended to businesses in response to the economic effects of the COVID-19 pandemic. PPP Loans are fully government guaranteed with the SBA making prepayments through a provision whereby partial or complete forgiveness is granted based on the nature and extent of each borrower's expenditures in relation to program requirements for payroll-related and other types of expenses. PPP Loans have maximum terms ranging from two to five years, with SBA prepayments expected to occur in the latter half of 2020 and the first half of 2021. Amounts not forgiven by the SBA will amortize over the applicable remaining loan term. Due to the government guarantee and forgiveness provisions, PPP Loans are considered to have no credit risk and receive no risk weighting for capital calculations. Consumer Loans The consumer real estate portfolio is primarily comprised of home equity lines and installment loans within FHN’s regional banking segment and jumbo mortgages and one-time-close (“OTC”) completed construction loans in FHN’s non-strategic segment that were originated through pre-2009 mortgage businesses. The corporate segment also includes loans that were previously included in off-balance sheet proprietary securitization trusts that were brought back into the loan portfolios at fair value through the execution of cleanup calls due to the relatively small balances left in the securitization and should continue to run-off. Generally performance of this portfolio is affected by life events that affect borrowers’ finances, the level of unemployment, and home prices. FHN obtains first lien performance information from third parties and through loss mitigation activities. FHN performs continuous HELOC account review processes in order to identify higher-risk home equity lines and initiate preventative and corrective actions. The reviews consider a number of account activity patterns and characteristics such as the number of times delinquent within recent periods, changes in credit bureaus score since origination, scored degradation, performance of the first lien, and account utilization. In accordance with FHN’s interpretation of regulatory guidance, FHN may block future draws on accounts in order to mitigate risk of loss to FHN. The credit card and other portfolio is primarily comprised of automobile loans, credit card receivables, and other consumer-related credits. As discussed in Note 1 - Summary of Significant Accounting Policies, the ALLL estimation process was revised on January 1, 2020 to reflect the adoption of ASU 2016-13. All information contained in the following disclosures reflects the application of requirements from the adoption of ASU 2016-13 for periods after 2019. Information for periods prior to 2020 has been retained with the content consistent with prior disclosures. Concentrations FHN has a concentration of residential real estate loans ( 19 percent of total loans). Loans to finance and insurance companies total $2.5 billion ( 12 percent of the C&I portfolio, or 8 percent of the total loans). FHN had loans to mortgage companies totaling $4.0 billion ( 19 percent of the C&I segment, or 12 percent of total loans) as of June 30, 2020 . As a result, 31 percent of the C&I segment is sensitive to impacts on the financial services industry. Asset Quality Indicators FHN employs a dual grade commercial risk grading methodology to assign an estimate for the probability of default (“PD”) and the loss given default (“LGD”) 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 portfolio by analyzing the migration of loans between grading categories. PD grades assigned through FHN’s risk rating process are used as a loan level input to inform probability of default forecasts under certain macroeconomic scenarios. Each PD grade corresponds to an estimated one-year default probability percentage; a PD 1 has the lowest expected default probability, and probabilities increase as grades progress down the scale. 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 ). Pass loan grades are required to be reassessed annually or earlier whenever there has been a material change in the financial condition of the borrower or risk characteristics of the relationship. All commercial loans over $1 million and certain commercial loans over $500,000 that are graded 13 or worse are reassessed on a quarterly basis. Loan grading discipline is regularly reviewed internally by Credit Assurance Services to determine if the process continues to result in accurate loan grading across the portfolio. FHN may utilize availability of guarantors/sponsors to support lending decisions during the credit underwriting process and when determining the assignment of internal loan grades. LGD grades are assigned based on a scale of 1 - 12 and represent FHN’s expected recovery based on collateral type in the event a loan defaults. See Note 5 – Allowance for Loan Losses for further discussion on the credit grading system. The following tables provide the amortized cost basis of the commercial loan portfolio by year of origination and credit quality indicator as of June 30, 2020 : C&I (Dollars in thousands) 2020 2019 2018 2017 2016 prior to 2016 (a) LMC (b) Revolving Revolving Total PD Grade: 1 (d) $ 2,078,712 $ 99,978 $ 121,167 $ 75,521 $ 106,700 $ 108,574 $ — $ 83,309 $ 56 $ 2,674,017 2 56,810 223,191 100,816 79,318 168,838 90,484 — 95,035 126 814,618 3 42,983 153,671 49,176 89,945 30,381 97,338 741,382 125,470 3,490 1,333,836 4 261,626 335,130 145,047 122,185 129,859 142,129 685,876 259,379 10,653 2,091,884 5 304,710 496,565 220,632 145,650 96,325 163,676 700,944 384,874 12,654 2,526,030 6 360,649 714,704 246,607 195,634 53,597 155,755 1,198,775 667,570 558 3,593,849 7 309,088 723,728 339,953 145,385 100,069 171,016 552,192 598,772 48,291 2,988,494 8 343,391 593,106 194,030 175,289 36,044 96,204 93,900 379,261 7,110 1,918,335 9 171,524 293,768 89,519 66,927 65,539 75,753 25,198 283,883 10,670 1,082,781 10 96,735 171,901 85,644 60,721 50,429 54,729 15,325 227,301 5,082 767,867 11 53,872 82,677 74,977 58,964 70,190 38,059 — 148,656 3,233 530,628 12 51,861 33,083 52,013 47,162 20,214 29,674 6,999 95,943 477 337,426 13 39,047 57,585 10,231 15,916 51,816 45,984 — 114,971 498 336,048 14,15,16 10,898 23,808 39,008 29,306 40,627 13,194 — 98,165 2,548 257,554 Collectively evaluated for impairment 4,181,906 4,002,895 1,768,820 1,307,923 1,020,628 1,282,569 4,020,591 3,562,589 105,446 21,253,367 Individually evaluated for impairment 21,146 6,613 12,454 21,995 1,909 22,114 — 50,319 3,976 140,526 Total C&I loans $ 4,203,052 $ 4,009,508 $ 1,781,274 $ 1,329,918 $ 1,022,537 $ 1,304,683 $ 4,020,591 $ 3,612,908 $ 109,422 $ 21,393,893 (a) TRUPS loans were originated prior to 2016. Total balance of TRUPS as of June 30, 2020 is $209.2 million , with $3.3 million in PD 3, $60.9 million in PD 4, $47.9 million in PD 5, $38.6 million in PD 6, $13.4 million in PD 7, $20.7 million in PD 9, $18.6 million in PD 10, and $5.8 million in PD 13. (b) 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. (c) $22.7 million of C&I loans were converted from revolving to term in 2020. (d) 2020 balance includes PPP loans. Income CRE (Dollars in thousands) 2020 2019 2018 2017 2016 prior to 2016 Revolving Revolving Total PD Grade: 1 $ 21,886 $ — $ 392 $ 106 $ 158 $ 1,190 $ — $ — $ 23,732 2 7,798 30,919 405 216 617 3,145 — — 43,100 3 97,338 212,413 75,483 34,863 42,468 25,511 78,004 181 566,261 4 90,915 292,657 100,058 130,549 94,836 45,975 839 238 756,067 5 320,904 279,229 138,520 152,573 112,018 45,048 37,306 6,224 1,091,822 6 264,892 215,714 125,075 107,697 33,716 119,742 37,800 7,930 912,566 7 164,896 293,784 121,601 64,796 20,076 24,648 40,187 1,224 731,212 8 23,028 93,700 55,579 11,850 28,382 50,403 6,845 128 269,915 9 35,357 36,942 25,157 22,936 2,219 19,126 280 — 142,017 10 23,623 8,323 7,323 2,803 9,125 17,320 — — 68,517 11 6,936 21,414 6,890 7,347 3,862 19,638 — 1,330 67,417 12 2,962 14,437 2,383 905 652 13,476 64 228 35,107 13 525 455 771 16,185 — 570 328 — 18,834 14,15,16 515 10,808 45 19,065 128 3,882 7,553 — 41,996 Collectively evaluated for impairment 1,061,575 1,510,795 659,682 571,891 348,257 389,674 209,206 17,483 4,768,563 Individually evaluated for impairment — — — — — 160 — — 160 Total CRE-IP $ 1,061,575 $ 1,510,795 $ 659,682 $ 571,891 $ 348,257 $ 389,834 $ 209,206 $ 17,483 $ 4,768,723 Residential CRE (Dollars in thousands) 2020 2019 2018 2017 2016 prior to 2016 Revolving Revolving Total PD Grade: 1 $ — $ — $ — $ — $ — $ 20 $ — $ — $ 20 2 — — — — — — — — — 3 — 151 268 482 — 95 — — 996 4 — 722 — — — 106 — — 828 5 93 — — — 76 12 — — 181 6 14,512 106 43 333 30 234 — — 15,258 7 348 470 2,904 1,776 — 241 13 — 5,752 8 467 24 443 — 6 89 100 — 1,129 9 325 520 262 — 490 76 — — 1,673 10 179 960 277 — — 6 — — 1,422 11 4,093 8,660 218 156 — 50 — — 13,177 12 154 1,530 44 — — 538 — — 2,266 13 1,310 — — — — 132 — — 1,442 14,15,16 171 264 — — — 39 — — 474 Collectively evaluated for impairment 21,652 13,407 4,459 2,747 602 1,638 113 — 44,618 Individually evaluated for impairment — — — — — — — — — Total CRE-RES $ 21,652 $ 13,407 $ 4,459 $ 2,747 $ 602 $ 1,638 $ 113 $ — $ 44,618 The following table provides the balances of commercial loan portfolio classes with associated allowance, disaggregated by PD grade as of December 31, 2019. December 31, 2019 (Dollars in thousands) General C&I Loans to Mortgage Companies TRUPS (a) Income CRE Residential CRE Total Percentage of Total Allowance for Loan Losses PD Grade: 1 $ 696,040 $ — $ — $ 1,848 $ — $ 697,888 3 % $ 69 2 767,048 — — 48,906 38 815,992 4 165 3 743,123 877,210 3,314 474,067 806 2,098,520 9 274 4 1,237,772 692,971 46,375 680,223 477 2,657,818 11 738 5 1,986,761 670,402 72,512 993,628 1,700 3,725,003 15 8,265 6 2,511,290 1,410,387 27,263 717,062 17,027 4,683,029 19 12,054 7 2,708,707 509,616 18,378 641,345 30,925 3,908,971 16 20,409 8 1,743,364 136,771 — 269,407 16,699 2,166,241 9 22,514 9 1,101,873 77,139 31,909 169,586 13,007 1,393,514 6 17,484 10 563,635 21,229 18,536 59,592 2,153 665,145 3 10,197 11 495,140 — — 81,682 2,302 579,124 2 13,454 12 262,906 15,158 — 28,807 1,074 307,945 1 8,471 13 232,823 — — 32,966 1,126 266,915 1 8,142 14,15,16 263,076 — — 43,400 626 307,102 1 29,318 Collectively evaluated for impairment 15,313,558 4,410,883 218,287 4,242,519 87,960 24,273,207 100 151,554 Individually evaluated for impairment 82,438 — — 1,563 — 84,001 — 6,196 Purchased credit-impaired loans 25,925 — — 4,155 820 30,900 — 848 Total commercial loans $ 15,421,921 $ 4,410,883 $ 218,287 $ 4,248,237 $ 88,780 $ 24,388,108 100 % $ 158,598 (a) Balances presented net of a $19.1 million valuation allowance. 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 Fair Isaac Corporation (“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 as of June 30, 2020 . Within consumer real estate, classes include home equity line of credit ("HELOC") and real estate installment. 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 revolving loans converted to term loans. All loans classified in the following table as revolving loans or revolving loans converted to term loans are HELOCs. Real estate installment loans are originated as a fixed term loan and are classified below in their vintage year from prior to 2016 to 2020. All loans in the following table classified in a vintage year are real estate installment loans. Consumer Real Estate (Dollars in thousands) 2020 2019 2018 2017 2016 Prior to 2016 Revolving Revolving Total FICO score 740 or greater $ 394,137 $ 576,132 $ 410,188 $ 420,822 $ 527,019 $ 1,255,357 $ 626,844 $ 135,436 $ 4,345,935 FICO score 720-739 43,808 67,904 26,383 37,259 48,677 132,407 76,045 28,913 461,396 FICO score 700-719 31,459 66,155 28,201 26,164 45,038 110,244 54,941 29,613 391,815 FICO score 660-699 41,314 51,096 33,382 32,745 36,625 153,335 76,593 44,067 469,157 FICO score 620-659 12,524 17,140 10,922 12,789 13,178 70,067 24,185 29,940 190,745 FICO score less than 620 2,180 11,168 5,832 9,227 14,456 79,599 25,526 45,357 193,345 Total $ 525,422 $ 789,595 $ 514,908 $ 539,006 $ 684,993 $ 1,801,009 $ 884,134 $ 313,326 $ 6,052,393 (a) $10.8 million of HELOC loans were converted from revolving to term in 2020. The following table reflects the amortized cost basis by year of origination and refreshed FICO scores for other consumer loans as of June 30, 2020 . Other Consumer (Dollars in thousands) 2020 2019 2018 2017 2016 Prior to 2016 Revolving Revolving Total FICO score 740 or greater $ 16,160 $ 36,450 $ 21,476 $ 10,499 $ 3,988 $ 14,774 $ 173,832 $ 4,401 $ 281,580 FICO score 720-739 3,238 5,226 2,784 1,615 747 1,844 27,603 1,319 44,376 FICO score 700-719 2,168 4,246 2,542 1,521 706 1,980 19,983 1,052 34,198 FICO score 660-699 3,654 6,546 3,149 2,172 1,423 2,737 27,534 1,581 48,796 FICO score 620-659 1,269 2,386 1,576 891 836 1,813 10,759 963 20,493 FICO score less than 620 333 1,059 1,044 522 2,311 3,167 10,037 1,394 19,867 Total $ 26,822 $ 55,913 $ 32,571 $ 17,220 $ 10,011 $ 26,315 $ 269,748 $ 10,710 $ 449,310 (a) $3.9 million of other consumer loans were converted from revolving to term in 2020. The following table reflects the percentage of balances outstanding by average, refreshed FICO scores for the HELOC and real estate installment classes of loans as of December 31, 2019. December 31, 2019 (Dollars in thousands) HELOC R/E Installment Loans (b) FICO score 740 or greater 62.0 % 71.9 % FICO score 720-739 8.6 8.3 FICO score 700-719 7.6 6.3 FICO score 660-699 10.8 8.1 FICO score 620-659 4.7 2.8 FICO score less than 620 (a) 6.3 2.6 Total 100.0 % 100.0 % (a) For this group, a majority of the loan balances had FICO scores at the time of the origination that exceeded 620 but have since deteriorated as the loans have seasoned. (b) In first quarter 2020, the Permanent Mortgage portfolio was combined into Consumer Real Estate portfolio, all prior periods were revised for comparability. Nonaccrual and Past Due Loans Nonperforming loans are loans 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 nonaccruals are loans that FHN continues to receive payments including residential real estate loans where the borrower has been discharged of personal obligation through bankruptcy, and second liens, regardless of delinquency status, behind first liens that are 90 or more days past due, are bankruptcies, or are TDRs. 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 by class on June 30, 2020 : Accruing Non-Accruing (Dollars in thousands) 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 Commercial (C&I): General C&I (a) $ 17,031,822 $ 4,671 $ 287 $ 17,036,780 $ 79,022 $ 254 $ 48,069 $ 127,345 $ 17,164,125 Loans to mortgage companies 4,019,766 825 — 4,020,591 — — — — 4,020,591 TRUPS (b) 209,177 — — 209,177 — — — — 209,177 Total commercial (C&I) 21,260,765 5,496 287 21,266,548 79,022 254 48,069 127,345 21,393,893 Commercial real estate: Income CRE 4,766,561 95 — 4,766,656 797 — 1,270 2,067 4,768,723 Residential CRE 44,618 — — 44,618 — — — — 44,618 Total commercial real estate 4,811,179 95 — 4,811,274 797 — 1,270 2,067 4,813,341 Consumer real estate: HELOC 1,136,288 5,736 6,800 1,148,824 41,608 1,720 5,308 48,636 1,197,460 R/E installment loans 4,787,467 13,778 6,000 4,807,245 31,786 2,077 13,825 47,688 4,854,933 Total consumer real estate 5,923,755 19,514 12,800 5,956,069 73,394 3,797 19,133 96,324 6,052,393 Credit card & other: Credit card 164,527 1,520 1,297 167,344 — — — — 167,344 Other 281,066 531 114 281,711 86 77 92 255 281,966 Total credit card & other 445,593 2,051 1,411 449,055 86 77 92 255 449,310 Total loans, net of unearned income $ 32,441,292 $ 27,156 $ 14,498 $ 32,482,946 $ 153,299 $ 4,128 $ 68,564 $ 225,991 $ 32,708,937 (a) $65.3 million of general C&I loans are nonaccrual loans with no related allowance. (b) TRUPS is presented net of an amortizing discount of $18.4 million . The following table reflects accruing and non-accruing loans by class on December 31, 2019 : Accruing Non-Accruing (Dollars in thousands) 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 Commercial (C&I): General C&I $ 15,314,292 $ 7,155 $ 237 $ 15,321,684 $ 36,564 $ 14,385 $ 23,363 $ 74,312 $ 15,395,996 Loans to mortgage companies 4,410,883 — — 4,410,883 — — — — 4,410,883 TRUPS (a) 218,287 — — 218,287 — — — — 218,287 Purchased credit-impaired loans 23,840 287 1,798 25,925 — — — — 25,925 Total commercial (C&I) 19,967,302 7,442 2,035 19,976,779 36,564 14,385 23,363 74,312 20,051,091 Commercial real estate: Income CRE 4,242,044 679 — 4,242,723 — 19 1,340 1,359 4,244,082 Residential CRE 87,487 7 — 87,494 — 466 — 466 87,960 Purchased credit-impaired loans 4,752 128 95 4,975 — — — — 4,975 Total commercial real estate 4,334,283 814 95 4,335,192 — 485 1,340 1,825 4,337,017 Consumer real estate: HELOC 1,217,344 9,156 5,669 1,232,169 43,007 4,227 7,472 54,706 1,286,875 R/E installment loans (b) 4,812,446 12,894 9,170 4,834,510 20,710 1,076 9,202 30,988 4,865,498 Purchased credit-impaired loans 18,720 2,770 3,276 24,766 — — — — 24,766 Total consumer real estate 6,048,510 24,820 18,115 6,091,445 63,717 5,303 16,674 85,694 6,177,139 Credit card & other: Credit card 198,917 1,076 1,178 201,171 — — — — 201,171 Other 291,700 1,802 337 293,839 101 44 189 334 294,173 Purchased credit-impaired loans 323 98 99 520 — — — — 520 Total credit card & other 490,940 2,976 1,614 495,530 101 44 189 334 495,864 Total loans, net of unearned income $ 30,841,035 $ 36,052 $ 21,859 $ 30,898,946 $ 100,382 $ 20,217 $ 41,566 $ 162,165 $ 31,061,111 Certain previously reported amounts have been reclassified to agree with current presentation. (a) TRUPS is presented net of the valuation allowance of $19.1 million . (b) In first quarter 2020, the Permanent Mortgage portfolio was combined into Consumer Real Estate portfolio, all prior periods were revised for comparability. Troubled Debt Restructurings 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. Extensions and 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. A modification is classified as a TDR if the borrower is experiencing financial difficulty and it is determined that FHN has granted a concession to the borrower. 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. Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty. Concessions could include extension of the maturity date, reductions of the interest rate (which may make the rate lower than current market for a new loan with similar risk), reduction or forgiveness of accrued interest, or principal forgiveness. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty, and whether a concession has been granted, are subjective in nature and management’s judgment is required when determining whether a modification is classified as a TDR. For all classes within the commercial portfolio segment, TDRs are typically modified through forbearance agreements (generally 6 to 12 months ). Forbearance agreements could include reduced interest rates, reduced payments, release of guarantor, or entering into short sale agreements. FHN’s proprietary modification programs for consumer loans are generally structured using parameters of U.S. government-sponsored programs such as the former Home Affordable Modification Program (“HAMP”). Within the HELOC and R/E installment loans classes of the consumer portfolio segment, TDRs are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 1 percent 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 percent per year until the original interest rate prior to modification is achieved. Prior to 2020, Consumer real estate mortgage TDRs (previously classified as permanent mortgage) were typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 2 percent 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 stepped up 1 percent every year until it reached the Federal Home Loan Mortgage Corporation Weekly Survey Rate cap. Contractual maturities may be extended to 40 years for consumer real estate loans. Within the credit card class of the consumer portfolio segment, TDRs 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, customers are granted a rate reduction to 0 percent and term extensions for up to 5 years to pay off the remaining balance. Despite the absence of a loan modification, the discharge of personal liability through bankruptcy proceedings is considered a concession. As a result, FHN classifies all non-reaffirmed residential real estate loans discharged in Chapter 7 bankruptcy as nonaccruing TDRs. On June 30, 2020 and December 31, 2019 , FHN had $192.6 million and $206.3 million of portfolio loans classified as TDRs, respectively. For TDRs in the loan portfolio, FHN had loan loss reserves of $13.6 million , or 7 percent as of June 30, 2020 , and $19.7 million , or 10 percent as of December 31, 2019 . Additionally, $45.1 million and $51.1 million of loans held-for-sale as of June 30, 2020 and December 31, 2019 , respectively, were classified as TDRs. The following tables reflect portfolio loans that were classified as TDRs during the three and six months ended June 30, 2020 and 2019 : Three Months Ended June 30, 2020 Six Months Ended June 30, 2020 (Dollars in thousands) Number Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial (C&I): General C&I 1 $ 4,649 $ 4,699 4 $ 10,576 $ 9,132 Total commercial (C&I) 1 4,649 4,699 4 10,576 9,132 Consumer real estate: HELOC 4 152 151 12 1,064 1,042 R/E installment loans 40 7,793 7,741 50 9,304 9,238 Total consumer real estate 44 7,945 7,892 62 10,368 10,280 Credit card & other 16 96 91 40 254 237 Total troubled debt restructurings 61 $ 12,690 $ 12,682 106 $ 21,198 $ 19,649 Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 (Dollars in thousands) Number Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial (C&I): General C&I 1 $ 222 $ 222 3 $ 14,117 $ 14,042 Total commercial (C&I) 1 222 222 3 14,117 14,042 Consumer real estate: HELOC 25 3,27 |