Glossary This section defines key acronyms and terms used throughout the report to enhance clarity and understanding - The glossary provides definitions for common acronyms and terms used throughout the report, aiding in comprehension of financial and operational discussions[10](index=10&type=chunk) Forward-Looking Statements This section outlines statements regarding future expectations, which are subject to inherent risks and uncertainties, not historical facts - Forward-looking statements are not historical information but pertain to future operations, strategies, financial results, or other developments, often using words like 'believe,' 'expect,' and 'anticipate'[12](index=12&type=chunk) - These statements are based on estimates and assumptions inherently subject to significant business, operational, economic, and competitive uncertainties and contingencies beyond the company's control[13](index=13&type=chunk) - Factors that could cause actual results to differ materially include global economic conditions, interest rate movements, market fluctuations, financial condition of counterparties, competition, regulatory changes, and natural disasters[14](index=14&type=chunk)[15](index=15&type=chunk) Non-GAAP Information This section explains the use of non-GAAP financial measures, their relevance to management, and where reconciliations can be found - Certain measures in this report are non-GAAP, not presented in accordance with U.S. GAAP, but are considered relevant by management for understanding the financial condition, capital position, and results[18](index=18&type=chunk) - Non-GAAP measures include pre-provision net revenue, return on average tangible common equity, tangible common equity to tangible assets, and tangible book value per common share, with reconciliations provided in the MD&A[19](index=19&type=chunk) - Regulatory measures such as common equity tier 1 capital, tier 1 capital, and risk-weighted assets are not considered 'non-GAAP' under U.S. financial reporting rules if they conform to regulatory standards[20](index=20&type=chunk) PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=10&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, income statements, comprehensive income statements, changes in equity, cash flows, and detailed notes explaining the basis of presentation, accounting policies, and specific financial components [Consolidated Balance Sheets (unaudited)](index=11&type=section&id=Consolidated%20Balance%20Sheets%20(unaudited)) | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------------- | :----------------------- | :------------------------- | | Total Assets | $82,084 | $82,152 | | Total Liabilities | $72,827 | $73,041 | | Total Equity | $9,257 | $9,111 | | Loans and Leases (Net) | $62,446 | $61,750 | | Total Deposits | $65,577 | $65,581 | | Common Stock Shares Issued | 508,835,780 | 524,280,412 | [Consolidated Statements of Income (unaudited)](index=12&type=section&id=Consolidated%20Statements%20of%20Income%20(unaudited)) | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | :--------- | | Total Interest Income | $1,044 | $1,093 | $(49) | (4.5%) | | Total Interest Expense | $403 | $464 | $(61) | (13.1%) | | Net Interest Income | $641 | $629 | $12 | 1.9% | | Provision for Credit Losses | $30 | $55 | $(25) | (45.5%) | | Total Noninterest Income | $189 | $186 | $3 | 1.6% | | Total Noninterest Expense | $491 | $500 | $(9) | (1.8%) | | Net Income | $245 | $204 | $41 | 20.1% | | Diluted EPS | $0.45 | $0.34 | $0.11 | 32.4% | | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | :--------- | | Total Interest Income | $2,058 | $2,165 | $(107) | (4.9%) | | Total Interest Expense | $786 | $912 | $(126) | (13.8%) | | Net Interest Income | $1,272 | $1,253 | $19 | 1.5% | | Provision for Credit Losses | $70 | $105 | $(35) | (33.3%) | | Total Noninterest Income | $370 | $381 | $(11) | (2.9%) | | Total Noninterest Expense | $978 | $1,015 | $(37) | (3.6%) | | Net Income | $467 | $401 | $66 | 16.5% | | Diluted EPS | $0.86 | $0.67 | $0.19 | 28.4% | [Consolidated Statements of Comprehensive Income (unaudited)](index=14&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(unaudited)) | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | :--------- | | Net Income | $245 | $204 | $41 | 20.1% | | Other Comprehensive Income (Loss) | $71 | $(10) | $81 | NM | | Comprehensive Income | $316 | $194 | $122 | 62.9% | | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | :--------- | | Net Income | $467 | $401 | $66 | 16.5% | | Other Comprehensive Income (Loss) | $216 | $(93) | $309 | NM | | Comprehensive Income | $683 | $308 | $375 | 121.8% | [Consolidated Statements of Changes in Equity (unaudited)](index=15&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity%20(unaudited)) - Total equity increased from **$9,111 million** at December 31, 2024, to **$9,257 million** at June 30, 2025[30](index=30&type=chunk) - Common stock repurchases totaled **$393 million** for the six months ended June 30, 2025, under the **$1 billion** general purchase program[30](index=30&type=chunk)[31](index=31&type=chunk) - Accumulated Other Comprehensive Loss improved from **$(1,128) million** at December 31, 2024, to **$(912) million** at June 30, 2025[30](index=30&type=chunk) [Consolidated Statements of Cash Flows (unaudited)](index=17&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | Change (Millions) | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | | Net Cash Provided by Operating Activities | $432 | $688 | $(256) | | Net Cash Used in Investing Activities | $(83) | $(1,284) | $1,201 | | Net Cash (Used in) Provided by Financing Activities | $(371) | $321 | $(692) | | Net Decrease in Cash and Cash Equivalents | $(22) | $(275) | $253 | | Cash and Cash Equivalents at End of Period | $1,515 | $1,456 | $59 | [Notes to the Consolidated Financial Statements (unaudited)](index=18&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20(unaudited)) [Note 1 Basis of Presentation and Accounting Policies](index=18&type=section&id=Note%201%20Basis%20of%20Presentation%20and%20Accounting%20Policies) - ASU 2023-07, 'Improvements to Reportable Segment Disclosures,' was adopted as of December 31, 2024, and applied retrospectively to all periods presented in Note 12[41](index=41&type=chunk)[42](index=42&type=chunk) - ASU 2023-09, 'Improvements to Income Tax Disclosures,' is effective for annual periods beginning after December 15, 2024, requiring disaggregated information about effective tax rate reconciliation and income taxes paid by jurisdiction[43](index=43&type=chunk)[44](index=44&type=chunk) - The SEC's 'Climate Disclosures Rules,' requiring certain climate-related information, are currently stayed pending judicial review, with the actual timing of implementation uncertain[47](index=47&type=chunk)[48](index=48&type=chunk) [Note 2 Investment Securities](index=21&type=section&id=Note%202%20Investment%20Securities) | Category | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :----------------------------- | :----------------------- | :------------------------- | | Total Securities AFS (Fair Value) | $8,117 | $7,896 | | Total Securities HTM (Amortized Cost) | $1,245 | $1,270 | | Total Securities HTM (Fair Value) | $1,083 | $1,083 | - Gross unrealized losses on available-for-sale (AFS) securities decreased from **$1,035 million** at December 31, 2024, to **$821 million** at June 30, 2025[50](index=50&type=chunk)[52](index=52&type=chunk) - No AFS debt securities were determined to have credit losses, and no write-downs of these investments to fair value occurred during the reporting periods[58](index=58&type=chunk) [Note 3 Loans and Leases](index=24&type=section&id=Note%203%20Loans%20and%20Leases) | Category | June 30, 2025 (Millions) | December 31, 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :----------------------- | :------------------------- | :---------------- | :--------- | | Commercial and industrial | $30,301 | $29,957 | $344 | 1.1% | | Loans to mortgage companies | $4,058 | $3,471 | $587 | 16.9% | | Commercial real estate | $13,936 | $14,421 | $(485) | (3.4%) | | Consumer real estate | $14,368 | $14,047 | $321 | 2.3% | | Credit card and other | $597 | $669 | $(72) | (10.8%) | | Total Loans and Leases | $63,260 | $62,565 | $695 | 1.1% | - Loans and leases with carrying values of **$45.5 billion** were pledged as collateral for borrowings at June 30, 2025[67](index=67&type=chunk) - Nonaccrual loans and leases totaled **$593 million** at June 30, 2025, compared to **$602 million** at December 31, 2024[88](index=88&type=chunk) - Loan modifications to troubled borrowers included interest rate reductions for CRE loans (from **7.61% to 6.96%**) and term extensions for C&I loans (adding **1.1 years** to life)[101](index=101&type=chunk)[102](index=102&type=chunk) [Note 4 Allowance for Credit Losses](index=34&type=section&id=Note%204%20Allowance%20for%20Credit%20Losses) | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------------- | :----------------------- | :------------------------- | | Allowance for Loan and Lease Losses (ALLL) | $814 | $815 | | Reserve for Unfunded Commitments | $87 | $79 | | Total Allowance for Credit Losses (ACL) | $901 | $894 | - The ACL balance at June 30, 2025, reflects deterioration in macroeconomic forecasts and emerging concerns around potential economic instability, offset by lower criticized balances in the CRE portfolio[114](index=114&type=chunk) - Gross charge-offs for the six months ended June 30, 2025, were **$84 million**, compared to **$95 million** for the same period in 2024[118](index=118&type=chunk)[119](index=119&type=chunk) [Note 5 Mortgage Banking Activity](index=38&type=section&id=Note%205%20Mortgage%20Banking%20Activity) | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :----------------------------- | :----------------------- | :------------------------- | | Loans Held for Sale (End of Period) | $109 | $81 | | Originations and Purchases (6 months) | $542 | $951 (Year Ended) | | Sales, Net of Gains (6 months) | $(513) | $(932) (Year Ended) | | Net Carrying Amount of Mortgage Servicing Rights | $24 | $21 | - FHN originates mortgage loans for sale into the secondary market, primarily residential first lien mortgages conforming to GSE standards[121](index=121&type=chunk) [Note 6 Goodwill and Other Intangible Assets](index=39&type=section&id=Note%206%20Goodwill%20and%20Other%20Intangible%20Assets) | Category | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :----------------------------- | :----------------------- | :------------------------- | | Total Goodwill | $1,510 | $1,510 | | Total Other Intangible Assets (Net Carrying Value) | $123 | $143 | - The required annual goodwill impairment test as of October 1, 2024, did not indicate impairment in any of FHN's reporting units[132](index=132&type=chunk) [Note 7 Preferred Stock](index=40&type=section&id=Note%207%20Preferred%20Stock) | Series | Issuance Date | Earliest Redemption Date | Annual Dividend Rate | | :------- | :------------ | :----------------------- | :------------------- | | Series B | 7/2/2020 | 8/1/2025 | 6.625% | | Series C | 7/2/2020 | 5/1/2026 | 6.600% | | Series E | 5/28/2020 | 10/10/2025 | 6.500% | | Series F | 5/3/2021 | 7/10/2026 | 4.700% | - FHN provided notice on July 2, 2025, of its intent to redeem all outstanding shares of its Series B Preferred Stock on August 1, 2025[139](index=139&type=chunk) - First Horizon Bank's Class A Non-Cumulative Perpetual Preferred Stock, totaling **$295 million**, is recognized as noncontrolling interest on the Consolidated Balance Sheets[140](index=140&type=chunk) [Note 8 Components of Other Comprehensive Income (Loss)](index=41&type=section&id=Note%208%20Components%20of%20Other%20Comprehensive%20Income%20(Loss)) | Component | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------------- | :----------------------- | :------------------------- | | Securities AFS | $(613) | $(782) | | Cash Flow Hedges | $(51) | $(94) | | Pension and Post-retirement Plans | $(248) | $(252) | | Total AOCI | $(912) | $(1,128) | - Net unrealized gains on securities available for sale were **$169 million** for the six months ended June 30, 2025, compared to net unrealized losses of **$(65) million** for the same period in 2024[145](index=145&type=chunk) [Note 9 Earnings Per Share](index=43&type=section&id=Note%209%20Earnings%20Per%20Share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Basic EPS | $0.46 | $0.34 | | Diluted EPS | $0.45 | $0.34 | | Weighted Average Common Shares (Diluted) | 513,606 thousand | 547,093 thousand | - Anti-dilutive equity awards excluded from the calculation of diluted EPS included **3,522 thousand** other equity awards for the three months ended June 30, 2025[150](index=150&type=chunk) [Note 10 Contingencies and Other Disclosures](index=44&type=section&id=Note%2010%20Contingencies%20and%20Other%20Disclosures) - Aggregate liabilities established for all loss contingency matters totaled **$3 million** at June 30, 2025[155](index=155&type=chunk) - 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**[156](index=156&type=chunk) - The mortgage loan repurchase and foreclosure liability was **$15 million** as of both June 30, 2025, and December 31, 2024[160](index=160&type=chunk) [Note 11 Retirement Plans](index=47&type=section&id=Note%2011%20Retirement%20Plans) - FHN sponsors a noncontributory, qualified defined benefit pension plan for associates hired on or before September 1, 2007, with benefits frozen after 2012[165](index=165&type=chunk) - Net periodic benefit cost for the three months ended June 30, 2025, was **$3 million**, compared to **$4 million** in the same period of 2024[168](index=168&type=chunk) - FHN made no contributions to the qualified pension plan in 2024 and does not currently anticipate making a contribution in 2025[165](index=165&type=chunk) [Note 12 Business Segment Information](index=48&type=section&id=Note%2012%20Business%20Segment%20Information) - FHN reorganized its reportable business segments in the fourth quarter of 2024 into: Commercial, Consumer & Wealth; Wholesale; and Corporate[171](index=171&type=chunk)[178](index=178&type=chunk) | Segment | Q2 2025 Pre-tax Income (Loss) (Millions) | Q2 2024 Pre-tax Income (Loss) (Millions) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Commercial, Consumer & Wealth | $379 | $339 | | Wholesale | $29 | $26 | | Corporate | $(99) | $(105) | - The Chief Operating Decision Maker (CODM) uses Pre-Provision Net Revenue (PPNR) and Pre-Tax Net Income (PTNI) for Commercial, Consumer & Wealth and Wholesale segments, and after-tax income for the Corporate segment[178](index=178&type=chunk)[179](index=179&type=chunk) [Note 13 Variable Interest Entities](index=56&type=section&id=Note%2013%20Variable%20Interest%20Entities) - FHN consolidates rabbi trusts related to deferred compensation plans, with **$200 million** in assets and **$171 million** in liabilities at June 30, 2025[202](index=202&type=chunk)[203](index=203&type=chunk) - Nonconsolidated VIEs include equity investments in low-income housing, other tax credit entities, small issuer trust preferred holdings, and holdings in agency mortgage-backed securities[204](index=204&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk) - Maximum loss exposure for nonconsolidated VIEs totaled **$9,698 million** at June 30, 2025, primarily from holdings of agency mortgage-backed securities (**$8,191 million**)[215](index=215&type=chunk) [Note 14 Derivatives](index=61&type=section&id=Note%2014%20Derivatives) - FHN utilizes various derivative contracts for client transactions and as a risk management tool to hedge exposure to changes in interest rates or other defined market risks[227](index=227&type=chunk) - Trading revenues from derivatives and non-derivative financial instruments were **$34 million** for the three months ended June 30, 2025, and **$70 million** for the six months ended June 30, 2025[230](index=230&type=chunk) - Notional amounts for derivatives associated with interest rate risk management were **$8,016 million** (customer contracts) and **$8,316 million** (offsetting upstream contracts) at June 30, 2025[235](index=235&type=chunk) - Cash flow hedges, primarily interest rate contracts, had a notional value of **$5,000 million** at June 30, 2025, with the entire change in fair value initially recorded in OCI[240](index=240&type=chunk)[242](index=242&type=chunk) [Note 15 Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions](index=69&type=section&id=Note%2015%20Master%20Netting%20and%20Similar%20Agreements%20-%20Repurchase,%20Reverse%20Repurchase,%20and%20Securities%20Borrowing%20Transactions) - FHN uses master netting agreements for repurchase, reverse repurchase, and securities borrowing transactions to offset open positions and related collateral, minimizing credit risk[271](index=271&type=chunk) - Securities purchased under agreements to resell totaled **$493 million** at June 30, 2025, collateralized by securities and/or government guaranteed loans[274](index=274&type=chunk)[275](index=275&type=chunk) - Securities sold under agreements to repurchase totaled **$2,205 million** at June 30, 2025, primarily government agency issued MBS and CMO, with risks considered minimal due to short duration and collateral[278](index=278&type=chunk)[281](index=281&type=chunk) [Note 16 Fair Value of Assets and Liabilities](index=71&type=section&id=Note%2016%20Fair%20Value%20of%20Assets%20and%20Liabilities) - FHN categorizes fair value measurements into Level 1, 2, and 3 based on the observability of inputs, maximizing observable market data and minimizing unobservable inputs[282](index=282&type=chunk)[283](index=283&type=chunk) | Category | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------------- | :----------------------- | :------------------------- | | Total Assets Measured at Fair Value (Recurring) | $10,191 | $10,045 | | - Level 1 | $157 | $154 | | - Level 2 | $9,995 | $9,852 | | - Level 3 | $39 | $39 | | Total Liabilities Measured at Fair Value (Recurring) | $924 | $1,221 | | - Level 1 | $12 | $6 | | - Level 2 | $899 | $1,200 | | - Level 3 | $13 | $15 | - Unobservable inputs for Level 3 measurements include constant prepayment rates and bond equivalent yields for SBA interest-only strips, and Visa covered litigation resolution amounts and probabilities for derivative liabilities[306](index=306&type=chunk)[311](index=311&type=chunk)[316](index=316&type=chunk) [Note 17 Subsequent Events](index=88&type=section&id=Note%2017%20Subsequent%20Events) - FHN redeemed all outstanding shares of its **6.625%** Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series B, and related depositary shares on August 1, 2025[359](index=359&type=chunk) - The redemption price was **$25.00** per Series B Depository Share, corresponding to **$10,000** per share of Series B Preferred Stock[360](index=360&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=90&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, including an executive overview, detailed analysis of results of operations, financial condition, capital, risk management, repurchase obligations, market uncertainties, and critical accounting policies [Introduction](index=90&type=section&id=Introduction) - First Horizon Corporation (FHN) is a financial holding company headquartered in Memphis, Tennessee, offering commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services[363](index=363&type=chunk) - As of June 30, 2025, FHN had over **450** business locations in **24** states, including over **400** banking centers in **12** states, and employed approximately **7,300** associates[364](index=364&type=chunk) [Executive Overview](index=90&type=section&id=Executive%20Overview) - FHN reported second quarter 2025 net income available to common shareholders of **$233 million** (**$0.45** diluted EPS), compared to **$184 million** (**$0.34** diluted EPS) in second quarter 2024[366](index=366&type=chunk) - Net interest income for Q2 2025 increased **$12 million** YoY to **$641 million**, driven by lower interest-bearing deposit costs and investment portfolio repositioning[367](index=367&type=chunk) - Provision for credit losses was **$30 million** for Q2 2025, down from **$55 million** in Q2 2024. Net charge-offs were **$34 million** (**22 basis points**)[368](index=368&type=chunk) - Period-end loans and leases increased **$695 million** (**1%**) to **$63.3 billion** from December 31, 2024, with commercial loans up **$446 million** and consumer loans up **$249 million**[377](index=377&type=chunk) - The Common Equity Tier 1 ratio was **10.99%** at June 30, 2025, compared to **11.20%** at December 31, 2024[378](index=378&type=chunk) [Results of Operations](index=93&type=section&id=Results%20of%20Operations) [Net Interest Income](index=93&type=section&id=Net%20Interest%20Income) - Net interest income for Q2 2025 increased **$10 million** from Q1 2025 to **$641 million**, driven by loan growth, primarily in loans to mortgage companies[388](index=388&type=chunk) - Net interest margin decreased **2 basis points** to **3.40%** in Q2 2025 compared to Q1 2025, attributable to higher deposit costs associated with increased brokered deposit balances[388](index=388&type=chunk) - For the six months ended June 30, 2025, net interest income increased **$19 million** to **$1.3 billion**, largely driven by lower funding costs and the impact of investment portfolio repositioning[395](index=395&type=chunk) [Noninterest Income](index=97&type=section&id=Noninterest%20Income) - Noninterest income increased **$8 million** (**4%**) to **$189 million** in Q2 2025 compared to Q1 2025, largely driven by higher deferred compensation income, service charges and fees, and mortgage banking income[399](index=399&type=chunk) - Compared to Q2 2024, noninterest income for Q2 2025 increased **$3 million** (**2%**) to **$189 million**, primarily due to higher deferred compensation income[400](index=400&type=chunk)[401](index=401&type=chunk) - For the six months ended June 30, 2025, noninterest income decreased **$11 million** (**3%**) to **$370 million** compared to the same period of 2024, mainly from lower deposit transactions and cash management fees and deferred compensation income[404](index=404&type=chunk)[405](index=405&type=chunk)[406](index=406&type=chunk) [Noninterest Expense](index=100&type=section&id=Noninterest%20Expense) - Noninterest expense increased **$4 million** (**1%**) to **$491 million** in Q2 2025 compared to Q1 2025, reflecting higher personnel and advertising expenses, partially offset by a reduction in Visa derivative valuation expense[410](index=410&type=chunk)[411](index=411&type=chunk)[412](index=412&type=chunk) - Compared to Q2 2024, noninterest expense decreased **$9 million** (**2%**) to **$491 million**, largely driven by lower FDIC special assessment expense, contract employment and outsourcing expense, and other expense[413](index=413&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk) - For the six months ended June 30, 2025, noninterest expense decreased **$37 million** (**4%**) to **$978 million** compared to the same period of 2024, primarily from lower personnel, deposit insurance, and contract employment expenses[417](index=417&type=chunk)[418](index=418&type=chunk)[421](index=421&type=chunk) [Provision for Credit Losses](index=101&type=section&id=Provision%20for%20Credit%20Losses) - Provision for credit losses was **$30 million** for Q2 2025, compared to **$40 million** for Q1 2025 and **$55 million** for Q2 2024[368](index=368&type=chunk)[420](index=420&type=chunk) - Net charge-offs in Q2 2025 were **$34 million** (**22 basis points**), consistent with Q2 2024[368](index=368&type=chunk)[422](index=422&type=chunk) - The Allowance for Credit Losses (ACL) to total loans and leases ratio decreased **3 basis points** from Q1 2025 to **1.42%**, driven by growth in loans to mortgage companies and lower nonperforming loans[423](index=423&type=chunk) [Income Taxes](index=101&type=section&id=Income%20Taxes) - Income tax expense was **$64 million** in Q2 2025, with an effective tax rate of approximately **20.8%**[424](index=424&type=chunk)[426](index=426&type=chunk) - FHN's net Deferred Tax Asset (DTA) was **$140 million** at June 30, 2025, compared with **$227 million** at December 31, 2024[428](index=428&type=chunk) - Federal legislation, the 'One Big Beautiful Bill Act,' enacted July 4, 2025, may impact the timing and magnitude of certain tax deductions and credits, with FHN assessing the impact of Section 48E Clean Electricity Tax Credits[432](index=432&type=chunk) [Business Segment Results](index=103&type=section&id=Business%20Segment%20Results) - The Commercial, Consumer & Wealth segment generated pre-tax income of **$379 million** for Q2 2025, an increase of **$26 million** compared to Q1 2025, largely driven by loan growth and higher loan yield, and a **$25 million** decrease in provision for credit losses[430](index=430&type=chunk) - Pre-tax income in the Wholesale segment was **$29 million** for Q2 2025, remaining flat compared to Q1 2025, with a **$3 million** increase in provision for credit losses offsetting a **$2 million** increase in revenue[437](index=437&type=chunk) - The Corporate segment's pre-tax loss was **$99 million** for Q2 2025, compared to **$97 million** for Q1 2025, reflecting a **$12 million** increase in provision for credit losses, partly offset by increased revenue and decreased noninterest expense[442](index=442&type=chunk) [Analysis of Financial Condition](index=105&type=section&id=Analysis%20of%20Financial%20Condition) [Earning Assets](index=105&type=section&id=Earning%20Assets) - 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[445](index=445&type=chunk) [Loans and Leases](index=105&type=section&id=Loans%20and%20Leases) - Period-end loans and leases increased **$695 million** (**1%**) to **$63.3 billion** at June 30, 2025, compared to December 31, 2024[446](index=446&type=chunk)[448](index=448&type=chunk) - Commercial loans increased **$446 million**, primarily driven by a **$587 million** increase in loans to mortgage companies and other C&I loans, partially offset by a **$485 million** decline in commercial real estate (CRE) balances[446](index=446&type=chunk)[458](index=458&type=chunk) - Consumer loans increased **$249 million**, primarily from growth in real estate installment loans[446](index=446&type=chunk) - Loans to mortgage companies and finance and insurance companies represented **23%** of FHN's C&I loan portfolio at June 30, 2025, indicating sensitivity to the financial services industry[463](index=463&type=chunk) [Loans Held for Sale](index=107&type=section&id=Loans%20Held%20for%20Sale) - Loans held for sale were **$402 million** at June 30, 2025, down from **$551 million** at December 31, 2024[452](index=452&type=chunk) - This portfolio primarily consists of government guaranteed loans under SBA and USDA lending programs, and residential first lien mortgages from mortgage banking operations[451](index=451&type=chunk) [Asset Quality](index=107&type=section&id=Asset%20Quality) [Loan and Lease Portfolio Composition](index=107&type=section&id=Loan%20and%20Lease%20Portfolio%20Composition) - FHN groups its loans into commercial (C&I, CRE) and consumer (consumer real estate, credit card and other) portfolio segments based on credit risk characteristics[453](index=453&type=chunk) - Residential real estate loans constituted **23%** of total loans as of June 30, 2025[455](index=455&type=chunk) [Commercial Loan and Lease Portfolios](index=107&type=section&id=Commercial%20Loan%20and%20Lease%20Portfolios) - Total C&I loans and leases increased **$931 million** to **$34.4 billion** as of June 30, 2025, largely driven by a **$587 million** increase in loans to mortgage companies[458](index=458&type=chunk) - The largest geographical concentrations in the C&I portfolio were in Tennessee (**20%**), Florida (**13%**), and Texas (**10%**)[458](index=458&type=chunk) - The CRE portfolio decreased to **$13.9 billion** as of June 30, 2025, compared to **$14.4 billion** as of December 31, 2024, largely attributable to paydowns[467](index=467&type=chunk) | Property Type | June 30, 2025 (Millions) | Percent | | :-------------- | :----------------------- | :------ | | Multi-family | $4,765 | 34 % | | Office | $2,680 | 19 % | | Retail | $2,204 | 16 % | | Industrial | $2,056 | 15 % | | Hospitality | $1,325 | 9 % | | Other CRE | $906 | 7 % | [Consumer Loan Portfolios](index=111&type=section&id=Consumer%20Loan%20Portfolios) - The consumer real estate portfolio totaled **$14.4 billion** as of June 30, 2025, with approximately **89%** in a first lien position[471](index=471&type=chunk)[472](index=472&type=chunk) - The refreshed FICO scores for the consumer real estate portfolio averaged **756** as of June 30, 2025, consistent with December 31, 2024[472](index=472&type=chunk) - Approximately **95%** of FHN's HELOCs were in the draw period as of June 30, 2025, with **$612 million** (**30%**) expected to enter the repayment period within the next **60 months**[475](index=475&type=chunk) - The credit card and other consumer loan portfolio decreased **$72 million** to **$597 million** as of June 30, 2025, primarily due to net repayments[478](index=478&type=chunk)[479](index=479&type=chunk) [Allowance for Credit Losses](index=113&type=section&id=Allowance%20for%20Credit%20Losses) - The Allowance for Loan and Lease Losses (ALLL) totaled **$814 million** as of June 30, 2025, and the ALLL to total loans and leases ratio was **1.29%**[479](index=479&type=chunk)[480](index=480&type=chunk)[482](index=482&type=chunk) - The Allowance for Credit Losses (ACL) to total loans and leases ratio was **1.42%** as of June 30, 2025[480](index=480&type=chunk)[482](index=482&type=chunk) - Net charge-offs in Q2 2025 were **$34 million**, or an annualized **22 basis points** of total loans and leases[481](index=481&type=chunk)[482](index=482&type=chunk) [Nonperforming Assets](index=115&type=section&id=Nonperforming%20Assets) - Total Nonperforming Assets (NPAs), including nonperforming loans held for sale, decreased to **$606 million** as of June 30, 2025, from **$608 million** at December 31, 2024[485](index=485&type=chunk)[487](index=487&type=chunk) - The nonperforming loans and leases ratio decreased **2 basis points** to **0.94%** as of June 30, 2025[485](index=485&type=chunk)[487](index=487&type=chunk) - The ALLL to NPLs ratio was **137%** at June 30, 2025[487](index=487&type=chunk) [Past Due Loans and Potential Problem Assets](index=117&type=section&id=Past%20Due%20Loans%20and%20Potential%20Problem%20Assets) - Accruing loans **30 to 89 days** past due increased to **$114 million** as of June 30, 2025, compared to **$89 million** as of December 31, 2024, driven by increases in C&I and CRE loans[493](index=493&type=chunk)[495](index=495&type=chunk) - Loans **90 days** or more past due and still accruing were **$8 million** as of June 30, 2025[493](index=493&type=chunk)[495](index=495&type=chunk) - Potential problem assets in the loan portfolio totaled **$2.0 billion** as of June 30, 2025, compared to **$1.9 billion** as of December 31, 2024[497](index=497&type=chunk) [Modifications to Borrowers Experiencing Financial Difficulty](index=119&type=section&id=Modifications%20to%20Borrowers%20Experiencing%20Financial%20Difficulty) - FHN works with troubled commercial and consumer borrowers to extend or modify loan terms to better align with their current ability to repay[498](index=498&type=chunk) - Commercial loan modifications typically involve forbearance agreements, which may include reduced interest rates, reduced payments, term extensions, or short sale agreements[499](index=499&type=chunk) - Consumer loan modifications for HELOC and real estate installment loans often involve interest rate reductions and possible maturity date extensions to achieve an affordable housing expense-to-income ratio[503](index=503&type=chunk) [Investment Securities](index=119&type=section&id=Investment%20Securities) - FHN's investment securities portfolio totaled **$9.4 billion** at June 30, 2025, representing **11%** of total assets[506](index=506&type=chunk) - The portfolio consists principally of debt securities available for sale, primarily bank-eligible GSE and GNMA issued mortgage-backed securities and collateralized mortgage obligations[500](index=500&type=chunk) [Deposits](index=121&type=section&id=Deposits) - Total deposits of **$65.6 billion** as of June 30, 2025, remained largely unchanged from December 31, 2024[507](index=507&type=chunk)[512](index=512&type=chunk) - Interest-bearing deposits increased **$125 million**, while noninterest-bearing deposits decreased **$129 million**[507](index=507&type=chunk)[512](index=512&type=chunk) - Commercial deposits constituted **57%** and consumer deposits **43%** of total deposits at June 30, 2025[508](index=508&type=chunk) - Total estimated uninsured deposits were **$26.9 billion** (**41%** of total deposits) as of June 30, 2025[510](index=510&type=chunk) [Short-Term Borrowings](index=121&type=section&id=Short-Term%20Borrowings) - Total short-term borrowings decreased to **$3.9 billion** as of June 30, 2025, compared to **$4.0 billion** as of December 31, 2024[513](index=513&type=chunk) - Balances fluctuate largely based on the level of FHLB borrowing as a result of loan demand, deposit levels, and balance sheet funding strategies[514](index=514&type=chunk) [Term Borrowings](index=121&type=section&id=Term%20Borrowings) - Total term borrowings increased to **$1.3 billion** as of June 30, 2025, from **$1.2 billion** as of December 31, 2024[515](index=515&type=chunk) - This increase primarily reflects the issuance of **$500 million** of senior notes during Q1 2025, partially offset by the retirement of **$350 million** in senior notes during Q2 2025[517](index=517&type=chunk) [Capital](index=123&type=section&id=Capital) [Regulatory Capital Data](index=123&type=section&id=Regulatory%20Capital%20Data) | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------------- | :----------------------- | :------------------------- | | FHN Shareholders' Equity | $8,962 | $8,816 | | Common Equity Tier 1 | $7,885 | $7,967 | | Tier 1 Capital | $8,606 | $8,688 | | Total Regulatory Capital | $10,011 | $10,130 | | Risk-Weighted Assets | $71,745 | $71,108 | | Ratio | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Common Equity Tier 1 Ratio | 10.99% | 11.20% | | Tier 1 Ratio | 12.00% | 12.22% | | Total Capital Ratio | 13.95% | 14.25% | | Tier 1 Leverage Ratio | 10.56% | 10.64% | - Both FHN and First Horizon Bank had sufficient capital to qualify as well-capitalized institutions and to meet the capital conservation buffer requirement as of June 30, 2025[526](index=526&type=chunk)[528](index=528&type=chunk) [Common Stock Purchase Program](index=125&type=section&id=Common%20Stock%20Purchase%20Program) - FHN's Board approved a new **$1.0 billion** common share purchase program on October 29, 2024, scheduled to expire on January 31, 2026[527](index=527&type=chunk) - As of June 30, 2025, **$498 million** in purchases had been made life-to-date under the October 2024 program at an average price per share of **$20.38**[531](index=531&type=chunk) | Period | Total Shares Purchased (thousands) | Average Price Paid Per Share | | :---------------- | :------------------------------- | :--------------------------- | | April 1 to April 30 | 241 | $17.85 | | May 1 to May 31 | 271 | $18.20 | | June 1 to June 30 | — | N/A | | Total (Q2 2025) | 512 | $18.04 | [Risk Management](index=128&type=section&id=Risk%20Management) [Market Risk Management](index=128&type=section&id=Market%20Risk%20Management) - FHN employs Value-at-Risk (VaR) and Stressed VaR (SVaR) models to estimate potential loss in value from adverse market movements for its trading securities inventory[538](index=538&type=chunk) | Metric | Q2 2025 Mean (Millions) | Q2 2025 High (Millions) | Q2 2025 Low (Millions) | | :------- | :---------------------- | :---------------------- | :--------------------- | | 1-day VaR | $2 | $3 | $2 | | 1-day SVaR | $7 | $8 | $6 | | 10-day VaR | $6 | $7 | $3 | | 10-day SVaR | $35 | $39 | $29 | - Stress tests are performed on the trading securities portfolio under various assumed market scenarios, including instantaneous interest rate shifts (e.g., **+/- 25, 50, 100, 200 basis points**), curve flattening/steepening, and credit spread widening[544](index=544&type=chunk)[545](index=545&type=chunk)[546](index=546&type=chunk)[547](index=547&type=chunk)[548](index=548&type=chunk) - There were no backtesting exceptions during the three and six months ended June 30, 2025, indicating the model's accuracy[549](index=549&type=chunk) [Interest Rate Risk Management](index=131&type=section&id=Interest%20Rate%20Risk%20Management) - Management uses a simulation model to measure interest rate risk and forecast **12 months** of Net Interest Income (NII) under various interest rate scenarios[551](index=551&type=chunk) | Shifts in Interest Rates (bps) | % Change in Projected Net Interest Income | | :----------------------------- | :---------------------------------------- | | -200 | (6.1)% | | -100 | (2.9)% | | -50 | (1.3)% | | -25 | (0.6)% | | +25 | 0.5% | | +50 | 1.0% | | +100 | 2.0% | | +200 | 3.5% | - A steepening yield curve scenario (long-term rates **+50 bps**, short-term static) results in a favorable NII variance of **0.3%**, while a flattening scenario results in an unfavorable **0.3%** variance[554](index=554&type=chunk)[555](index=555&type=chunk) [Liquidity Risk Management](index=133&type=section&id=Liquidity%20Risk%20Management) - ALCO manages FHN's exposure to liquidity risk through forecasts of its liquidity position and funding needs, maintaining a Liquidity Policy to ensure prompt and cost-effective cash and collateral obligations[560](index=560&type=chunk)[561](index=561&type=chunk) | Source | Available Liquidity (Millions) | | :----------------------------- | :--------------------------- | | Cash on deposit with FRB | $813 | | FHLB | $8,663 | | Discount Window | $22,962 | | Unencumbered securities | $1,192 | | Total Available Liquidity | $33,630 | - The period-end loans-to-deposits ratio was **96%** as of June 30, 2025, compared to **95%** as of December 31, 2024[563](index=563&type=chunk) - Parent company liquidity is primarily provided by cash flows from dividends and interest payments collected from subsidiaries, with **$542 million** available for dividends from the Bank as of July 1, 2025[566](index=566&type=chunk) [Repurchase Obligations](index=135&type=section&id=Repurchase%20Obligations) - FHN's principal remaining exposures for pre-2009 mortgage business operations relate to indemnification claims by underwriters, loan purchasers, and other parties, and claims related to servicing pre-2009 mortgage loans[573](index=573&type=chunk) - The total repurchase and foreclosure liability, including both legacy and current mortgage business, was **$15 million** as of both June 30, 2025, and December 31, 2024[579](index=579&type=chunk) - For loans repurchased or covered by a make-whole payment, cumulative average loss severities range between **50%** and **60%** of the Unpaid Principal Balance (UPB)[575](index=575&type=chunk) [Market Uncertainties and Prospective Trends](index=137&type=section&id=Market%20Uncertainties%20and%20Prospective%20Trends) [Inflation, Recession, and Federal Reserve Policy](index=137&type=section&id=Inflation,%20Recession,%20and%20Federal%20Reserve%20Policy) - Federal Reserve rate cuts in late 2024 brought the overnight Fed Funds rate to **4.33%** by year-end, but inflation measures still generally remain higher than the **2%** target[582](index=582&type=chunk) - The yield curve was inverted continuously from summer 2022 until September 2024, an unusually long period, but an economic recession did not occur[584](index=584&type=chunk) - Recession expectations moderated significantly since 2023 but reemerged in early 2025 due to uncertainties with respect to anticipated changes in trade and fiscal policies[588](index=588&type=chunk) [Fiscal Policy](index=139&type=section&id=Fiscal%20Policy) - The 'One Big Beautiful Bill Act' enacted on July 4, 2025, may have a significant impact on general economic and business conditions and, accordingly, could materially affect FHN's financial condition and results of operations[589](index=589&type=chunk) [Trade Policy](index=139&type=section&id=Trade%20Policy) - The U.S. government announced new tariffs on a variety of goods and services in 2025, with uncertain timing, scope, and impact on economic growth, inflation rates, and employment rates[590](index=590&type=chunk) [2023 Banking Crisis](index=139&type=section&id=2023%20Banking%20Crisis) - The 2023 banking crisis led to increased focus on deposit mix and funding risk management across the U.S. banking sector, resulting in intense competition for deposits that has continued into the first half of 2025[591](index=591&type=chunk)[592](index=592&type=chunk) [Impacts on FHN](index=139&type=section&id=Impacts%20on%20FHN) - FHN's net interest margin (NIM) expanded in Q1 2025 but declined by **2 basis points** in Q2 2025 compared to Q1 2025, as increased deposit rates exceeded increases in loan yields[593](index=593&type=chunk) - Mortgage lending and bond trading revenues were negatively impacted by rising rates in 2022-2023, but showed improvement in 2024 and Q1 2025, though bond trading declined in Q2 2025 due to less favorable market conditions[594](index=594&type=chunk) [Other Regulatory Proposals](index=139&type=section&id=Other%20Regulatory%20Proposals) - Proposed regulatory changes in 2023 could significantly increase regulatory constraints and costs on U.S. banks with assets over **$100 billion**, including debt and equity capital requirements, credit risk standards, and asset risk-weighting[595](index=595&type=chunk) [Greenhouse Gas (GHG) Reporting Regimes](index=141&type=section&id=Greenhouse%20Gas%20(GHG)%20Reporting%20Regimes) - California enacted laws requiring most larger companies doing business in the state to annually report GHG emissions (Scopes 1, 2, and 3) starting in 2026 for the 2025 fiscal year, with legal challenges pending[596](index=596&type=chunk) - The SEC's 'Climate Disclosures Rules,' requiring Scope 1 and 2 GHG emissions reporting, are stayed pending judicial review, with considerable uncertainty regarding their implementation[597](index=597&type=chunk)[599](index=599&type=chunk) - Direct compliance costs for GHG reporting regimes include creating data systems, staffing, and vendor engagement, potentially putting FHN at a competitive disadvantage if other banks are not subject to similar requirements[600](index=600&type=chunk)[601](index=601&type=chunk) [Market Growth and Weather Events](index=142&type=section&id=Market%20Growth%20and%20Weather%20Events) - FHN's principal markets in the southern and southeastern U.S. have experienced significant population and economic growth, but are also susceptible to hurricanes and other severe coastal weather events[602](index=602&type=chunk)[603](index=603&type=chunk) - Rising economic costs from severe weather events are causing significant flux in property insurance practices, leading to increased premiums, narrowed coverage, and legislative reform proposals[604](index=604&type=chunk) - Instability in property insurance increases FHN's risks of loan loss and business downturn, potentially blunting market growth in these high-growth areas[605](index=605&type=chunk)[606](index=606&type=chunk) [Critical Accounting Policies and Estimates](index=143&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - FHN has made no significant changes in its critical accounting policies and estimates from those disclosed in its 2024 Annual Report on Form 10-K[608](index=608&type=chunk) [Accounting Changes](index=143&type=section&id=Accounting%20Changes) - Refer to Note 1 – Basis of Presentation and Accounting Policies in the Consolidated Financial Statements for a detailed discussion of accounting changes adopted in the current year and those issued but not currently effective[609](index=609&type=chunk) [Non-GAAP Information](index=144&type=section&id=Non-GAAP%20Information) | Metric | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Pre-provision net revenue (Non-GAAP) | $339 million | $664 million | | Return on average tangible common equity (Non-GAAP) | 13.85% | 13.33% | | Tangible common equity to tangible assets (Non-GAAP) | 8.58% | 8.58% | | Tangible book value per common share (Non-GAAP) | $13.57 | $13.57 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=145&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the 'Risk Management' section in Item 2 of this report and FHN's 2024 Annual Report on Form 10-K for detailed disclosures on market risk and its management - Information regarding quantitative and qualitative disclosures about market risk and its management is incorporated by reference from Item 2 of this report and FHN's 2024 Annual Report on Form 10-K[615](index=615&type=chunk)[617](index=617&type=chunk) [Item 4. Controls and Procedures](index=145&type=section&id=Item%204.%20Controls%20and%20Procedures) This section states that management, with the participation of the chief executive officer and chief financial officer, evaluated the effectiveness of disclosure controls and procedures, concluding they were effective as of the end of the reporting period. No material changes in internal control over financial reporting occurred during the second fiscal quarter - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of the end of the period covered by this report[616](index=616&type=chunk) - There have been no material changes in internal control over financial reporting during the second fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[616](index=616&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=146&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the 'Contingencies' section of Note 10 to the Consolidated Financial Statements for information on legal proceedings - Information regarding legal proceedings is incorporated by reference from the 'Contingencies' section of Note 10 to the Consolidated Financial Statements[619](index=619&type=chunk) [Item 1A. Risk Factors](index=146&type=section&id=Item%201A.%20Risk%20Factors) This section states that there are no material changes from the risk factor disclosures in FHN's Annual Report on Form 10-K for the year ended December 31, 2024 - There are no material changes from the risk factor disclosures in FHN's Annual Report on Form 10-K for the year ended December 31, 2024[620](index=620&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=146&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section refers to the 'Common Stock Purchase Program' section in Item 2 of Part I for details on equity repurchases - Information on equity repurchases is incorporated by reference from the 'Common Stock Purchase Program' section, including tables I.2.19 and I.2.20, in Item 2 of Part I of this report[621](index=621&type=chunk) [Item 3. Defaults Upon Senior Securities](index=146&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the current report - This item is not applicable[621](index=621&type=chunk) [Item 4. Mine Safety Disclosures](index=146&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the current report - This item is not applicable[621](index=621&type=chunk) [Item 5. Other Information](index=147&type=section&id=Item%205.%20Other%20Information) This section discloses that there were no previously unreported 8-K disclosures or changes in nomination procedures. It also states that no directors or executive officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of 2025 - No previously unreported 8-K disclosures or changes in nomination procedures occurred[622](index=622&type=chunk) - No directors or executive officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of 2025[624](index=624&type=chunk) [Item 6. Exhibits](index=147&type=section&id=Item%206.%20Exhibits) This section provides a table of exhibits filed or furnished with the report, including certifications, charter, bylaws, and XBRL financial information - Exhibits include Rule 13a-14(a) Certifications of CEO and CFO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002) and 18 USC 1350 Certifications of CEO and CFO (pursuant to Section 906)[627](index=627&type=chunk)[629](index=629&type=chunk) - The Amended and Restated Charter and Bylaws of First Horizon Corporation are included as exhibits[627](index=627&type=chunk) - XBRL financial information, including consolidated financial statements and notes, is provided in Inline XBRL format[629](index=629&type=chunk) Signatures This section contains the official signatures certifying the accuracy and completeness of the report - The report is duly signed on behalf of First Horizon Corporation by Hope Dmuchowski, Senior Executive Vice President and Chief Financial Officer, on August 7, 2025[630](index=630&type=chunk)

About First Horizon MEMPHIS, Tenn., July 30, 2025 /PRNewswire/ -- First Horizon Corporation (NYSE: FHN) ("First Horizon" or "the Company") announced today its 2025 company-run capital stress test results. The 2025 test showed that, under hypothetical severe economic and business downturns, First Horizon would maintain capital ratios well above regulatory-required minimums. These internally generated results, which utilized the 2025 Dodd-Frank Act Stress Test Severely Adverse Scenario published by the Federa ...

Newsweek America's Greatest Workplaces 2025 Newsweek America's Greatest Workplaces 2025 This recognition reflects Newsweek and Plant-A Insights Group's rigorous review of leading workplaces nationwide. The assessment included direct associate feedback, thorough company evaluations, publicly sourced information and analysis of more than 120 performance criteria. Being named to this esteemed list highlights First Horizon's dedication to creating a collaborative, inclusive, and growth-focused environment for a ...

Core Viewpoint - First Horizon Corporation (FHN) reported second-quarter 2025 adjusted earnings per share (EPS) of 45 cents, exceeding the Zacks Consensus Estimate of 41 cents and up from 36 cents in the same quarter last year [1][10] Financial Performance - Net income available to common shareholders on a GAAP basis was $233 million, reflecting a 27% year-over-year increase [2] - Total quarterly revenues reached $830 million, a 1.8% increase year over year, although it missed the Zacks Consensus Estimate by 0.9% [3][10] - Net interest income (NII) rose nearly 2% year over year to $641 million, with the net interest margin increasing by 2 basis points to 3.40% [3] - Non-interest income was $189 million, up 1.6% from the previous year [3] Expense Management - Non-interest expenses decreased by 1.8% year over year to $491 million, attributed to declines in most cost components except for occupancy, equipment costs, and salary and benefits [4] - The efficiency ratio improved to 59.20%, down from 61.44% in the prior year, indicating enhanced profitability [4] Loan and Deposit Growth - Total period-end loans and leases were $63.3 billion, a 1.7% increase from the previous quarter [5] - Total period-end deposits rose to $65.6 billion, up 2.1% [5] Credit Quality - Non-performing loans and leases increased by 3.3% year over year to $593 million [6] - The allowance for loan and lease losses decreased by 0.8% year over year to $814 million, with the ratio of total allowance to loans and leases at 1.29%, down from 1.31% [6] - Net charge-offs remained flat year over year at $34 million, while the provision for credit losses dropped 45% to $30 million [7] Capital Ratios - As of June 30, 2025, the Common Equity Tier 1 ratio was stable at 11%, with the total capital ratio also unchanged at 14% [8]

Financial Data and Key Metrics Changes - The company reported an adjusted EPS of $0.45 per share, reflecting a $0.03 increase from the prior quarter [8] - Pre-provision net revenue (PPNR) grew by $4 million from the first quarter, primarily driven by a $10 million increase in net interest income [8][9] - Total expenses, excluding deferred compensation, increased by only $4 million from the last quarter [16] Business Line Data and Key Metrics Changes - The loan portfolio increased by 2% quarter over quarter, with significant growth in loans to mortgage companies, which rose by $689 million [13] - Fee income decreased by $3 million from the prior quarter, with fixed income performance declining slightly [14] - Non-interest bearing deposits increased by $57 million, supported by successful seasonal marketing promotions [12] Market Data and Key Metrics Changes - Period end balances for both loans and deposits finished 2% higher quarter over quarter [10] - The average rate paid on interest-bearing deposits increased to 2.76%, up from 2.72% in the first quarter [12] - The charge-off ratio remained stable at 22 basis points, in line with expectations [17] Company Strategy and Development Direction - The company aims to achieve a 15% plus return on tangible common equity (ROTCE) over the next two to three years [20] - Focus remains on organic loan growth and enhancing client relationships to drive profitability [20][22] - The company is committed to maintaining capital levels in line with a near-term target of 11% CET1 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic fundamentals in their southern footprint, expecting stability through 2025 and into 2026 [7] - There is a recognition of increased deposit pressure and competition, but the company remains focused on expense and pricing discipline [8] - Management noted that borrowers are showing resilience and optimism, with expectations for improved activity in the latter half of the year [28] Other Important Information - The company retained approximately 95% of balances associated with clients who had a repricing event in the quarter [12] - The company has a strong credit culture, with years of disciplined underwriting providing stability across economic cycles [17] - The company is exploring opportunities to grow PPNR by $100 million or more through synergies and deepening client relationships [20][78] Q&A Session Summary Question: Client health and loan growth outlook - Management noted that borrowers are resilient and optimistic, with expectations for improved activity as tariff questions settle [28] Question: CET1 target and buyback appetite - Management indicated that they are comfortable with the current CET1 target and will evaluate capital levels based on growth opportunities [30][32] Question: Deposit repricing opportunities - Management acknowledged potential deposit repricing opportunities but noted that competition is heating up, leading to a zigzag pattern in deposit pricing [38] Question: Signs of stress in credit sectors - Management highlighted consumer-facing industries like trucking and auto finance as areas to watch closely for stress [42] Question: Expectations for mortgage warehouse balances - Management expects mortgage warehouse balances to remain stable or increase, depending on the mortgage industry's trends [48] Question: Fee income trends and expense guidance - Management indicated that fee income is under pressure, but they do not expect expenses to exceed a 2% increase [66] Question: Regulatory developments and capital deployment - Management is optimistic about regulatory changes that may allow for greater capital flexibility in the future [100] Question: Trends in loan repricing and spread compression - Management noted increased competition on both deposit and lending sides, with expectations for continued competitive pressures [106]

Financial Data and Key Metrics Changes - The company reported an adjusted EPS of $0.45 per share, reflecting a $0.03 increase from the prior quarter [7] - Pre-provision net revenue (PPNR) grew by $4 million from the first quarter, primarily driven by a $10 million increase in net interest income [7][8] - Total expenses, excluding deferred compensation, increased by only $4 million from the last quarter [15] Business Line Data and Key Metrics Changes - The loan portfolio saw a 2% increase quarter over quarter, with significant growth in loans to mortgage companies, which rose by $689 million [13] - The commercial and industrial (C&I) portfolio also grew, with period-end balances up $316 million quarter over quarter [13] - Fee income performance decreased by $3 million from the prior quarter, with fixed income performance declining slightly [14] Market Data and Key Metrics Changes - Period-end deposit balances increased by $1.4 billion compared to the prior quarter, driven by a $1.6 billion increase in brokered CDs [12] - The average rate paid on interest-bearing deposits increased to 2.76%, up from 2.72% in the first quarter [12] - The charge-off ratio remained stable at 22 basis points, consistent with expectations for the year [16] Company Strategy and Development Direction - The company aims to achieve a return on tangible common equity (ROTCE) of over 15% in the next two to three years, focusing on operational efficiency and profitability [19][22] - There is a strong emphasis on organic loan growth and enhancing client relationships to drive pre-provision net revenue [19][22] - The company is committed to maintaining capital levels in line with a near-term target of 11% CET1, with ongoing discussions about potential adjustments [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic fundamentals in their southern footprint, expecting stability through the latter half of 2025 and into 2026 [6] - There is a recognition of increased competition and deposit pressure, but the company remains focused on profitability and sustainable growth [6][7] - Management noted that borrowers are showing resilience and optimism, which is expected to lead to improved activity in the second half of the year [27] Other Important Information - The company retained over half of its $1 billion share repurchase authorization, using $9 million in the second quarter [17] - The company is seeing opportunities to grow PPNR by $100 million or more over the coming years through synergies and deepening client relationships [19][22] Q&A Session Summary Question: Client health and loan growth outlook - Management noted that borrowers are resilient and optimistic, with expectations for improved activity as tariff questions are settled [27] Question: CET1 target and buyback appetite - Management indicated that they are comfortable with the current CET1 target and will evaluate capital deployment based on loan growth opportunities [30][31] Question: Deposit repricing opportunities - Management sees potential for deposit repricing but expects fluctuations based on market conditions and competition [36][38] Question: Signs of stress in credit sectors - Management highlighted consumer-facing industries like trucking and auto finance as areas to watch closely for stress [42] Question: Expectations for mortgage warehouse balances - Management expects mortgage warehouse balances to remain stable or increase, depending on mortgage industry trends [50] Question: Expense guidance and fee income trends - Management confirmed that the high end of the expense guidance is not expected to exceed 2%, with a focus on maintaining cost discipline [95] Question: Regulatory developments and capital deployment - Management is optimistic about potential regulatory changes that could facilitate M&A opportunities but remains focused on organic growth [102] Question: Trends in loan repricing and margin - Management noted increased competition on both deposit and lending sides, with expectations for continued competitive pressures [106][108]

Financial Performance - Net income available to common shareholders (NIAC) increased to $233 million, a 27% increase compared to 2Q24[7] - Diluted EPS increased to $045, a 32% increase compared to 2Q24[7] - Adjusted ROTCE was 136%, an increase of 57bps from 1Q25[12] - Adjusted PPNR was $338 million, up 1% from 1Q25[14] Balance Sheet - Period end loans increased by $1 billion from 1Q25, driven by loans to mortgage companies (LMC) seasonality and continuing growth within C&I[10] - Period end deposits increased by $14 billion from 1Q25, reflecting incremental brokered deposits and DDA growth[10] - The loan-to-deposit ratio was 96%, down slightly from 1Q25[10] - Tangible book value per share (TBVPS) increased by $040 to $1357, driven by strong earnings & mark-to-market impact[10] Asset Quality & Capital - CET1 ratio was maintained at 110%, in line with the near-term target[10] - ACL/loans ratio decreased by 3bps to 142%, reflecting loans to mortgage companies (LMC) growth and upgrades[10]

Group 1 - First Horizon National (FHN) reported quarterly earnings of $0.45 per share, exceeding the Zacks Consensus Estimate of $0.41 per share, and up from $0.36 per share a year ago, representing an earnings surprise of +9.76% [1] - The company posted revenues of $834 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.89%, compared to $815 million in the same quarter last year [2] - First Horizon has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates two times over the same period [2] Group 2 - The stock has gained approximately 5.4% since the beginning of the year, while the S&P 500 has increased by 6.2% [3] - The current consensus EPS estimate for the upcoming quarter is $0.43 on revenues of $845.07 million, and for the current fiscal year, it is $1.71 on revenues of $3.33 billion [7] - The Zacks Industry Rank for Banks - Southwest is in the top 17% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[First Horizon Corporation Second Quarter 2025 Results](index=1&type=section&id=First%20Horizon%20Corporation%20Second%20Quarter%202025%20Results) [Executive Summary and Highlights](index=1&type=section&id=Executive%20Summary%20and%20Highlights) First Horizon reported strong Q2 2025 results, with net income available to common shareholders rising to $233 million Financial Performance Summary | Metric | 2Q25 (Actual) | 1Q25 (Actual) | Change (QoQ) | Change (QoQ %) | | :--- | :--- | :--- | :--- | :--- | | Net Income Available to Common Shareholders (NIAC) | $233 million | $213 million | +$20 million | +9.4% | | EPS (Diluted) | $0.45 | $0.41 | +$0.04 | +9.8% | | Adjusted NIAC (Excl. Notable Items) | $229 million | $217 million | +$12 million | +5.5% | | Adjusted EPS (Excl. Notable Items) | $0.45 | $0.42 | +$0.03 | +7.1% | - The CEO expressed satisfaction with the strong performance, attributing it to the company's commitment to safety, soundness, profitability, and growth[2](index=2&type=chunk)[3](index=3&type=chunk) Notable Items Summary | Notable Items (Pre-tax) | 2Q25 | 1Q25 | 2Q24 | | :--- | :--- | :--- | :--- | | Deferred compensation adjustment | $4 | — | — | | FDIC special assessment | $1 | ($1) | ($2) | | Other notable expenses | — | ($5) | ($3) | | **Total notable items (pre-tax)** | **$4** | **($6)** | **($5)** | | **Total notable items (after-tax)** | **$3** | **($4)** | **($11)** | [Quarterly Financial Performance Analysis (2Q25 vs 1Q25)](index=2&type=section&id=Quarterly%20Financial%20Performance%20Analysis%20(2Q25%20vs%201Q25)) Net interest income grew from loan expansion, while noninterest income and expense both rose due to deferred compensation adjustments Key Financial Metrics (QoQ) | Metric | 2Q25 | 1Q25 | Change (QoQ) | | :--- | :--- | :--- | :--- | | Net Interest Income (FTE) | $645 million | $634 million | +$10 million | | Net Interest Margin | 3.40% | 3.42% | -2 basis points | | Noninterest Income | $189 million | $181 million | +$7 million | | Adjusted Noninterest Income | $189 million | $181 million | +$7 million | | Noninterest Expense | $491 million | $488 million | +$3 million | | Adjusted Noninterest Expense | $495 million | $482 million | +$14 million | - Net interest income increase was primarily driven by **loan portfolio growth**, while the net interest margin decrease was due to higher deposit costs[7](index=7&type=chunk) - Noninterest income growth was largely due to a **$10 million increase in deferred compensation income**, partially offset by a $7 million decline in fixed income revenue[8](index=8&type=chunk) - Adjusted noninterest expense increased by **$14 million**, including $9 million in higher deferred compensation and $7 million in outside services[9](index=9&type=chunk) [Summary Results Tables](index=3&type=section&id=Summary%20Results%20Tables) Summary results show a 9% quarter-over-quarter increase in net income, with improvements in key return and efficiency metrics Income Statement (in millions) | Income Statement (in millions) | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 ($) | Change vs. 1Q25 (%) | Change vs. 2Q24 ($) | Change vs. 2Q24 (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net interest income (taxable equivalent) | $645 | $634 | $633 | $10 | 2% | $12 | 2% | | Noninterest income | $189 | $181 | $186 | $7 | 4% | $3 | 1% | | Total revenue | $830 | $812 | $815 | $17 | 2% | $15 | 2% | | Noninterest expense | $491 | $488 | $500 | $3 | 1% | ($9) | (2)% | | Pre-provision net revenue | $339 | $325 | $315 | $14 | 4% | $24 | 8% | | Provision for credit losses | $30 | $40 | $55 | ($10) | (25)% | ($25) | (45)% | | Net income available to common shareholders | $233 | $213 | $184 | $20 | 9% | $49 | 27% | | EPS | $0.45 | $0.41 | $0.34 | $0.04 | 10% | $0.11 | 32% | Key Performance Metrics | Key Performance Metrics | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 (bp) | Change vs. 2Q24 (bp) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net interest margin | 3.40% | 3.42% | 3.38% | (2)bp | 2 bp | | Efficiency ratio | 59.20% | 60.06% | 61.44% | (86)bp | (224)bp | | Return on average assets | 1.20% | 1.11% | 1.00% | 9 bp | 20 bp | | Return on average common equity ("ROCE") | 11.1% | 10.3% | 9.0% | 84 bp | 216 bp | | Return on average tangible common equity ("ROTCE") | 13.8% | 12.8% | 11.3% | 104 bp | 256 bp | | Common Equity Tier 1 | 11.0% | 10.9% | 11.0% | 7 bp | (5)bp | | Nonperforming loan and leases ratio | 0.94% | 0.98% | 0.91% | (4)bp | 3 bp | | Net charge-off ratio | 0.22% | 0.19% | 0.22% | 3 bp | — bp | Average Balance Sheet (in billions) | Balance Sheet (in billions) | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 ($) | Change vs. 1Q24 ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Average loans | $62.6 | $61.6 | $62.0 | $0.9 | $0.5 | | Average deposits | $64.7 | $64.5 | $65.0 | $0.2 | ($0.2) | | Average assets | $82.0 | $81.0 | $81.7 | $1.0 | $0.2 | [Adjusted Financial Data & Notable Items](index=8&type=section&id=Adjusted%20Financial%20Data%20%26%20Notable%20Items) Adjusted financial data reflects a positive impact from notable items, leading to higher adjusted net income and EPS Adjusted Financial Data (in millions) | Adjusted Financial Data (in millions) | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 ($) | Change vs. 2Q24 ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Adjusted total noninterest income | $189 | $181 | $186 | $7 | $3 | | Adjusted total noninterest expense | $495 | $482 | $495 | $14 | $1 | | Adjusted pre-provision net revenue | $338 | $334 | $324 | $4 | $14 | | Adjusted net income available to common shareholders | $229 | $217 | $195 | $12 | $34 | | Adjusted diluted EPS | $0.45 | $0.42 | $0.36 | $0.03 | $0.09 | | Adjusted ROTCE | 13.6% | 13.1% | 12.0% | N/A | N/A | | Adjusted efficiency ratio | 59.5% | 59.1% | 60.5% | N/A | N/A | Summary of Notable Items (in millions) | Summary of Notable Items (in millions) | 2Q25 | 1Q25 | 4Q24 | 3Q24 | 2Q24 | | :--- | :--- | :--- | :--- | :--- | :--- | | Loss on AFS portfolio restructuring | — | — | ($91) | — | — | | Deferred compensation adjustment | $4 | — | — | — | — | | FDIC special assessment | $1 | ($1) | $1 | $2 | ($2) | | Other notable expenses | — | ($5) | ($3) | ($17) | ($3) | | **Total notable items (pre-tax)** | **$4** | **($6)** | **($94)** | **($14)** | **($5)** | | **Net income/(loss) available to common shareholders impact** | **($3)** | **$4** | **$71** | **$11** | **$11** | | **EPS impact of notable items** | **—** | **$0.01** | **$0.13** | **$0.02** | **$0.02** | - Second quarter notable items included a **$1 million expense credit** for the FDIC special assessment and a **$4 million expense credit** from deferred compensation[5](index=5&type=chunk) [Financial Ratios](index=10&type=section&id=Financial%20Ratios) Q2 2025 financial ratios demonstrated improved profitability and capital strength, with higher returns and a stronger CET1 ratio Key Financial Ratios | Financial Ratios | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 (bp) | Change vs. 2Q24 (bp) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net interest margin | 3.40% | 3.42% | 3.38% | (2)bp | 2 bp | | Return on average assets | 1.20% | 1.11% | 1.00% | 9 bp | 20 bp | | Return on average common equity ("ROCE") | 11.14% | 10.30% | 8.98% | 84 bp | 216 bp | | Return on average tangible common equity ("ROTCE") | 13.85% | 12.81% | 11.29% | 104 bp | 256 bp | | Efficiency ratio | 59.20% | 60.06% | 61.44% | (86)bp | (224)bp | | Allowance for credit losses to loans and leases | 1.42% | 1.45% | 1.41% | (3)bp | 1 bp | | Nonperforming loan and leases ratio | 0.94% | 0.98% | 0.91% | (4)bp | 3 bp | | Net charge-off ratio | 0.22% | 0.19% | 0.22% | 3 bp | — bp | Capital Data | Capital Data | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 (bp) | Change vs. 2Q24 (bp) | | :--- | :--- | :--- | :--- | :--- | :--- | | Common Equity Tier 1 | 11.0% | 10.9% | 11.0% | 7 bp | (5)bp | | Tier 1 capital ratio | 12.0% | 11.9% | 12.1% | 6 bp | (4)bp | | Total capital ratio | 14.0% | 14.1% | 14.0% | (9)bp | (7)bp | | Tier 1 leverage ratio | 10.6% | 10.5% | 10.6% | 7 bp | (5)bp | | Risk-weighted assets (billions) | $71.7 | $70.8 | $71.9 | $0.9 | ($0.3) | | Tangible common equity/tangible assets ("TCE/TA") | 8.58% | 8.37% | 8.14% | 21 bp | 44 bp | Selected Balance Sheet Data | Selected Balance Sheet Data | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 | Change vs. 2Q24 | | :--- | :--- | :--- | :--- | :--- | :--- | | Book value per common share | $16.78 | $16.40 | $15.34 | +$0.37 | +$1.44 | | Tangible book value per common share | $13.57 | $13.17 | $12.22 | +$0.40 | +$1.35 | | Full-time equivalent associates | 7,255 | 7,190 | 7,297 | +65 | -42 | [Consolidated Balance Sheet](index=11&type=section&id=Consolidated%20Balance%20Sheet) The Q2 2025 balance sheet expanded, with asset and deposit growth driven by loans to mortgage companies and brokered deposits Period-End Balance Sheet (in millions) | Period-End Balance Sheet (in millions) | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 ($) | Change vs. 2Q24 ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total assets | $82,084 | $81,491 | $82,230 | $592 | ($147) | | Loans and leases, net of unearned income | $63,260 | $62,215 | $62,781 | $1,045 | $479 | | Total deposits | $65,576 | $64,208 | $64,794 | $1,369 | $783 | | Total interest-bearing deposits | $49,685 | $48,373 | $48,446 | $1,312 | $1,239 | | Noninterest-bearing deposits | $15,892 | $15,835 | $16,348 | $57 | ($457) | | Total liabilities | $72,826 | $72,447 | $73,275 | $379 | ($449) | | Total shareholders' equity | $9,257 | $9,044 | $8,955 | $213 | $302 | | Loans to mortgage companies | $4,058 | $3,369 | $2,934 | $689 | $1,124 | Average Balance Sheet (in millions) | Average Balance Sheet (in millions) | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 ($) | Change vs. 2Q24 ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total assets | $81,958 | $80,965 | $81,721 | $993 | $237 | | Loans and leases, net of unearned income | $62,551 | $61,645 | $62,029 | $906 | $523 | | Total deposits | $64,742 | $64,504 | $64,960 | $238 | ($218) | | Total interest-bearing deposits | $48,891 | $48,970 | $48,629 | ($78) | $263 | | Noninterest-bearing deposits | $15,851 | $15,535 | $16,332 | $317 | ($481) | | Total liabilities | $72,861 | $71,854 | $72,772 | $1,007 | $89 | | Total shareholders' equity | $9,097 | $9,111 | $8,949 | ($14) | $148 | | Loans to mortgage companies | $3,533 | $2,819 | $2,440 | $714 | $1,093 | - Period-end loans and leases increased by **$1.0 billion**, with Loans to Mortgage Companies contributing **$689 million**[10](index=10&type=chunk)[38](index=38&type=chunk) - Period-end deposits increased by **$1.4 billion**, primarily driven by a **$1.6 billion increase in brokered deposits**[11](index=11&type=chunk)[38](index=38&type=chunk) [Consolidated Net Interest Income and Average Balance Sheet: Yields and Rates](index=14&type=section&id=Consolidated%20Net%20Interest%20Income%20and%20Average%20Balance%20Sheet%3A%20Yields%20and%20Rates) Net interest income increased due to loan growth and higher yields, though the net interest margin compressed slightly from rising deposit costs Net Interest Income and Margin Analysis | Metric (in millions, except rates) | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 ($) | Change vs. 2Q24 ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Interest income | $1,047 | $1,017 | $1,097 | $30 | ($50) | | Interest expense | $403 | $383 | $464 | $20 | ($61) | | Net interest income - tax equivalent | $645 | $634 | $633 | $10 | $12 | | Net interest income | $641 | $631 | $629 | $10 | $12 | | Total loan yield | 5.92% | 5.89% | 6.34% | +3 bp | -42 bp | | Total deposit cost | 2.09% | 2.07% | 2.47% | +2 bp | -38 bp | | Net interest margin | 3.40% | 3.42% | 3.38% | -2 bp | +2 bp | - **Commercial loan yields increased to 6.21%** from 6.18% QoQ, contributing to the overall loan yield increase[41](index=41&type=chunk) - Interest-bearing deposit costs rose, with **savings deposit cost at 2.73%** (up 6 bp) and **time deposit cost at 3.88%** (down 12 bp) from 1Q25[41](index=41&type=chunk) [Consolidated Asset Quality](index=16&type=section&id=Consolidated%20Asset%20Quality) Asset quality improved in Q2 2025, marked by lower nonperforming loans and a decreased provision for credit losses Asset Quality Metrics (in millions) | Asset Quality Metric (in millions) | 2Q25 | 1Q25 | 2Q24 | Change vs. 1Q25 ($) | Change vs. 2Q24 ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total nonperforming loans and leases | $593 | $609 | $574 | ($17) | $19 | | Nonperforming loans and leases to loans and leases | 0.94% | 0.98% | 0.91% | -4 bp | +3 bp | | Total loans and leases 90 days or more past due and accruing | $8 | $8 | $6 | $0 | $3 | | Total net charge-offs | $34 | $29 | $34 | $5 | $0 | | Total loans and leases annualized net charge-off rate | 0.22% | 0.19% | 0.22% | +3 bp | +0 bp | | Allowance for loan and lease losses - ending | $814 | $822 | $821 | ($8) | ($7) | | Reserve for unfunded commitments - ending | $87 | $83 | $66 | $4 | $21 | | Total allowance for credit losses - ending | $901 | $905 | $887 | ($4) | $14 | | Total allowance for credit losses to loans and leases | 1.42% | 1.45% | 1.41% | -3 bp | +1 bp | | Total allowance for credit losses to nonperforming loans and leases | 152% | 148% | 155% | +4% | -3% | - **Provision expense decreased by $10 million** to $30 million from the previous quarter[12](index=12&type=chunk) - **Nonperforming loans decreased by $17 million**, with an increase in C&I offset by reductions in commercial real estate[12](index=12&type=chunk) - The **ACL to loans ratio decreased to 1.42%**, primarily due to a higher balance of loans to mortgage companies and positive net risk grade migration[12](index=12&type=chunk) [Segment Reporting](index=20&type=section&id=Segment%20Reporting) Segment performance was varied, with Commercial, Consumer, and Wealth showing increased net income, while Wholesale saw loan growth Commercial, Consumer, and Wealth Segment (in millions) | Metric | 2Q25 | 1Q25 | Change vs. 1Q25 ($) | Change vs. 1Q25 (%) | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $634 | $624 | $10 | 2% | | Noninterest income | $113 | $110 | $3 | 3% | | Total revenue | $747 | $734 | $13 | 2% | | Net income | $289 | $268 | $21 | 8% | | Total loans and leases (Avg) | $56.3B | $56.2B | $0.1B | 0% | | Return on average assets | 1.98% | 1.85% | +13 bp | N/A | | Efficiency ratio | 47.43% | 46.85% | +58 bp | N/A | Wholesale Segment (in millions) | Metric | 2Q25 | 1Q25 | Change vs. 1Q25 ($) | Change vs. 1Q25 (%) | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $57 | $50 | $8 | 15% | | Noninterest income | $53 | $59 | ($6) | (10)% | | Total revenue | $111 | $109 | $2 | 1% | | Net income | $22 | $23 | $0 | (2)% | | Total loans and leases (Avg) | $5.8B | $5.0B | $0.8B | 16% | | Fixed income product average daily revenue (thousands) | $550 | $586 | ($35) | (6)% | | Efficiency ratio | 68.29% | 69.58% | (129)bp | N/A | Corporate Segment (in millions) | Metric | 2Q25 | 1Q25 | Change vs. 1Q25 ($) | Change vs. 1Q25 (%) | | :--- | :--- | :--- | :--- | :--- | | Net interest income/(expense) | ($50) | ($42) | ($8) | (18)% | | Noninterest income | $22 | $12 | $10 | 84% | | Total revenues | ($28) | ($30) | $2 | 8% | | Net income/(loss) | ($67) | ($69) | $2 | 2% | | Interest bearing assets (Avg) | $11.0B | $10.8B | $0.2B | 1% | - The Commercial, Consumer, and Wealth segment offers traditional lending, deposit taking, investment, and wealth management services[56](index=56&type=chunk) - The Wholesale segment focuses on specialized product offerings like mortgage warehouse lending and fixed income securities sales[59](index=59&type=chunk) - The Corporate segment manages corporate support functions, centralized capital and funding, and includes run-off businesses[62](index=62&type=chunk) [Non-GAAP to GAAP Reconciliations](index=23&type=section&id=Non-GAAP%20to%20GAAP%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures to their most comparable GAAP measures for transparency Tangible Common Equity (Non-GAAP) (in millions) | Metric | 2Q25 | 1Q25 | 2Q24 | | :--- | :--- | :--- | :--- | | Total equity (GAAP) | $9,257 | $9,044 | $8,955 | | Total common equity | $8,536 | $8,322 | $8,234 | | Intangible assets (GAAP) | $1,633 | $1,643 | $1,674 | | Tangible common equity (Non-GAAP) | $6,903 | $6,680 | $6,560 | | Total assets (GAAP) | $82,084 | $81,491 | $82,230 | | Tangible assets (Non-GAAP) | $80,451 | $79,849 | $80,556 | | Tangible common equity to tangible assets ("TCE/TA") | 8.58% | 8.37% | 8.14% | | Tangible book value per common share | $13.57 | $13.17 | $12.22 | Adjusted Diluted EPS & ROA (in millions, except per share data) | Metric | 2Q25 | 1Q25 | 2Q24 | | :--- | :--- | :--- | :--- | | Net income available to common shareholders (GAAP) | $233 | $213 | $184 | | Adjusted net income available to common shareholders (Non-GAAP) | $229 | $217 | $195 | | Diluted EPS (GAAP) | $0.45 | $0.41 | $0.34 | | Adjusted diluted EPS (Non-GAAP) | $0.45 | $0.42 | $0.36 | | Net Income ("NI") (GAAP) | $244 | $222 | $204 | | Adjusted NI (Non-GAAP) | $241 | $227 | $208 | | ROA (GAAP) | 1.20% | 1.11% | 1.00% | | Adjusted ROA (Non-GAAP) | 1.18% | 1.14% | 1.02% | Adjusted Efficiency Ratio (in millions) | Metric | 2Q25 | 1Q25 | 2Q24 | | :--- | :--- | :--- | :--- | | Noninterest expense (GAAP) | $491 | $488 | $500 | | Adjusted noninterest expense (Non-GAAP) | $495 | $482 | $495 | | Revenue (GAAP) | $830 | $812 | $815 | | Adjusted revenue (Non-GAAP) | $833 | $816 | $819 | | Efficiency ratio (GAAP) | 59.20% | 60.06% | 61.44% | | Adjusted efficiency ratio (Non-GAAP) | 59.47% | 59.09% | 60.47% | [Glossary of Terms](index=28&type=section&id=Glossary%20of%20Terms) This section defines key financial, regulatory, and operational terms used throughout the report to ensure clarity - Definitions are provided for key capital, profitability, and asset quality ratios, including CET1, FTE, ROA, ROCE, ROTCE, and NPL ratios[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - Operating segments are defined as Commercial, Consumer, and Wealth; Wholesale; and Corporate, outlining their respective services and focus areas[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) [General Information](index=5&type=section&id=General%20Information) This section provides disclosures on forward-looking statements, non-GAAP measures, and conference call information - The document contains forward-looking statements subject to significant business, operational, economic, and competitive uncertainties[17](index=17&type=chunk) - Certain non-GAAP measures are used by management to understand financial condition and are reconciled to GAAP measures[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - Conference call details for July 16, 2025, including dial-in numbers, webcast link, and replay information, are provided[23](index=23&type=chunk)[24](index=24&type=chunk) - First Horizon Corporation (NYSE: FHN) is a leading regional financial services company with **$82.1 billion in assets** as of June 30, 2025[25](index=25&type=chunk)

Financial Performance - First Horizon Corporation reported a net income available to common shareholders of $233 million for the second quarter of 2025, translating to earnings per share (EPS) of $0.45, an increase of $0.04 from the prior quarter's EPS of $0.41 [1] - Adjusted net income for the second quarter was $229 million or $0.45 per share, up from $217 million or $0.42 per share in the first quarter of 2025, reflecting a $0.03 increase [1] Management Commentary - The President and CEO, Bryan Jordan, expressed satisfaction with the company's strong performance, emphasizing a commitment to safety, soundness, profitability, and growth [2] - Jordan highlighted the strengths of the business model and geographic footprint as key factors contributing to the positive results in the second quarter and the first half of the year [2] Company Overview - First Horizon Corporation, headquartered in Memphis, TN, has $82.1 billion in assets as of June 30, 2025, and operates in 12 states primarily in the southern U.S. [12] - The company offers a range of financial services including commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services [12]