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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________

FORM 10-Q

_____________________________________


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to__________

Commission File Number: 001-15185

____________________________________

(Exact name of registrant as specified in its charter)

______________________________________


TN		62-0803242
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

165 Madison Avenue
Memphis,	Tennessee	38103
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number, including area code) (901) 523-4444

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

$0.625 Par Value Common Capital Stock

FHN

New York Stock Exchange LLC

Depositary Shares, each representing a 1/400th interest in

a share of Non-Cumulative Perpetual Preferred Stock, Series B*

FHN PR B

New York Stock Exchange LLC

Depositary Shares, each representing a 1/400th interest in
a share of Non-Cumulative Perpetual Preferred Stock, Series C

FHN PR C

New York Stock Exchange LLC

Depositary Shares, each representing a 1/4,000th interest in
a share of Non-Cumulative Perpetual Preferred Stock, Series E

FHN PR E

New York Stock Exchange LLC

Depositary Shares, each representing a 1/4,000th interest in
a share of Non-Cumulative Perpetual Preferred Stock, Series F

FHN PR F

New York Stock Exchange LLC

*Shares of Series B Preferred Stock, along with the related Series B Depositary Shares, were outstanding on June 30, 2025. All shares of Series B Preferred Stock were redeemed on August 1, 2025, which resulted in the redemption of the Series B Depositary Shares. The New York Stock Exchange suspended the Series B Depositary Shares from trading on August 1, 2025 and is expected to delist the securities on August 12, 2025.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding on July 31, 2025
Common Stock, $0.625 par value						507,747,624


10-Q REPORT TABLE OF CONTENTS

Table of Contents



Glossary			1
Forward-Looking Statements			3
Non-GAAP Information			5

Part I. Financial Information			6
Item 1. Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			74
Item 3. Quantitative and Qualitative Disclosures About Market Risk			111
Item 4. Controls and Procedures			111

Part II. Other Information			112
Item 1. Legal Proceedings			112
Item 1A. Risk Factors			112
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			112
Item 3. Defaults Upon Senior Securities			112
Item 4. Mine Safety Disclosures			112
Item 5. Other Information			113
Item 6. Exhibits			113









Signatures			115


GLOSSARY
Table of Contents

Glossary

The following is a list of common acronyms and terms used throughout this report:


ACL			Allowance for credit losses
AFS			Available for sale
AIR			Accrued interest receivable
ALCO			Asset/Liability Committee
ALLL			Allowance for loan and lease losses
ALM			Asset/liability management

AOCI			Accumulated other comprehensive income
ASC			FASB Accounting Standards Codification
Associate			Person employed by FHN
ASU			Accounting Standards Update
Bank			First Horizon Bank


C&I			Commercial, financial, and industrial loan portfolio


CECL			Current expected credit loss

CME			Chicago Mercantile Exchange
CMO			Collateralized mortgage obligations
CODM			Chief Operating Decision-Maker
Company			First Horizon Corporation
Corporation			First Horizon Corporation
CRE			Commercial Real Estate

DTA			Deferred tax asset
DTL			Deferred tax liability
EAD			Exposure at default
EPS			Earnings per share
Fannie Mae			Federal National Mortgage Association
FASB			Financial Accounting Standards Board
FDIC			Federal Deposit Insurance Corporation
Federal Reserve			Federal Reserve Board
Fed			Federal Reserve Board
FHA			Federal Housing Administration
FHLB			Federal Home Loan Bank
FHN			First Horizon Corporation
FHNF			FHN Financial; FHN's fixed income division
FICO			Fair Isaac Corporation
First Horizon			First Horizon Corporation
FRB			Federal Reserve Bank or the Federal Reserve Board
Freddie Mac			Federal Home Loan Mortgage Corporation
FTE			Fully taxable equivalent
FTP			Funds transfer pricing
FTRESC			FT Real Estate Securities Company, Inc.
GAAP			Generally accepted accounting principles (U.S.)


GHG			Greenhouse Gas
GNMA			Government National Mortgage Association or Ginnie Mae
GSE			Government sponsored enterprises, in this report references Fannie Mae and Freddie Mac
HELOC			Home equity line of credit
HFS			Held for Sale

HTM			Held to maturity
IBKC			IBERIABANK Corporation
IBKC merger			FHN's merger of equals with IBKC that closed July 2020
ISDA			International Swap and Derivatives Association

LGD			Loss given default
LIBOR			London Inter-Bank Offered Rate
LIHTC			Low Income Housing Tax Credit
LLC			Limited Liability Company
LMC			Loans to mortgage companies
LOCOM			Lower of cost or market

LTV			Loan-to-value
MBS			Mortgage-backed securities
MD&A			Management’s Discussion and Analysis of Financial Condition and Results of Operations
NAICS			North American Industry Classification System
NII			Net interest income
NIM			Net interest margin
NM			Not meaningful
NMTC			New Market Tax Credit
NPA			Nonperforming asset

NPL			Nonperforming loan
NYSE			New York Stock Exchange
OCI			Other comprehensive income
OREO			Other Real Estate Owned
PAM			Proportional amortization method



PD			Probability of default

PPNR			Pre-provision net revenue

PTNI			Pre-tax net income




SAD			Special Assets Department
SBA			Small Business Administration
SEC			Securities and Exchange Commission
SOFR			Secure Overnight Funding Rate
SVaR			Stressed Value-at-Risk




TRUP			Trust preferred loan
UPB			Unpaid principal balance
USDA			United States Department of Agriculture


			1			2Q25 FORM 10-Q REPORT


GLOSSARY
Table of Contents


VaR			Value-at-Risk
VIE			Variable Interest Entities
we / us / our			First Horizon Corporation


			2			2Q25 FORM 10-Q REPORT


FORWARD-LOOKING STATEMENTS
Table of Contents

Forward-Looking Statements

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

Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, operational, economic, and competitive uncertainties and contingencies, many of which are beyond our control, and many of which, with respect to future business decisions and actions (including acquisitions and divestitures), are subject to change and could cause our actual future results and outcomes to differ materially from those contemplated by forward-looking statements or historical performance. While there is no assurance that any list of uncertainties and contingencies is complete, examples of factors which could cause actual results to differ from those contemplated by forward-looking statements or historical performance include:

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

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

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

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

•the financial condition of borrowers and other counterparties;

•the financial condition and stability of major financial and market participants, including private financial institutions as well as governments and governmental agencies;

•competition within and outside the financial services industry;

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

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

•fraud, theft, or other incursions through conventional, electronic, or other means directly or indirectly affecting FHN or its clients, business counterparties, or competitors;

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

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

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

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

•changes in trade policies, including the imposition of tariffs and retaliatory responses;

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

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

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

•changes in accounting policies, standards, and interpretations;

•evolving capital and liquidity standards under applicable regulatory rules;

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

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

•other factors that may affect future results of FHN.

Any forward-looking statements made by or on behalf of FHN speak only as of the date they are made, and FHN assumes no obligation to update or revise any forward-looking statements that are made in this report or in any


			3			2Q25 FORM 10-Q REPORT


FORWARD-LOOKING STATEMENTS
Table of Contents

other statement, release, report, or filing from time to time. Actual results could differ and expectations could change, possibly materially, because of one or more factors, including those factors listed above or presented elsewhere in this report, those factors listed in material incorporated by reference into this report, and other factors not listed. In evaluating forward-looking statements and assessing our prospects, readers of this report should carefully consider the factors mentioned above along with the additional risks and factors discussed in Item 2 of Part I and Item 1A of Part II of this report, and in the forepart, and in Items 1, 1A, and 7, of FHN’s most recent Annual Report on Form 10-K, among others. Readers should also consult any further disclosures of a forward-looking nature in any subsequent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, or Current Reports on Form 8-K.


			4			2Q25 FORM 10-Q REPORT


NON-GAAP INFORMATION
Table of Contents

Non-GAAP Information

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

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

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


			5			2Q25 FORM 10-Q REPORT


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents



PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


Consolidated Balance Sheets (unaudited)			7

Consolidated Statements of Income (unaudited)			8

Consolidated Statements of Comprehensive Income (unaudited)			10

Consolidated Statements of Changes in Equity (unaudited)			11

Consolidated Statements of Cash Flows (unaudited)			13

Notes to the Consolidated Financial Statements (unaudited)			14
Note 1 Basis of Presentation and Accounting Policies			14

Note 2 Investment Securities			16
Note 3 Loans and Leases			19
Note 4 Allowance for Credit Losses			27
Note 5 Mortgage Banking Activity			30
Note 6 Goodwill and Other Intangible Assets			31

Note 7 Preferred Stock			32
Note 8 Components of Other Comprehensive Income (Loss)			33
Note 9 Earnings Per Share			35
Note 10 Contingencies and Other Disclosures			36
Note 11 Retirement Plans			38
Note 12 Business Segment Information			39
Note 13 Variable Interest Entities			46
Note 14 Derivatives			49
Note 15 Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions			56
Note 16 Fair Value of Assets and Liabilities			58
Note 17 Subsequent Events			73


			6			2Q25 FORM 10-Q REPORT


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED BALANCE SHEETS



	(Unaudited)
	June 30,		December 31,
(Dollars in millions, except per share amounts)	2025		2024
Assets
Cash and due from banks	$	988	$	906
Interest-bearing deposits with banks	911		1,538
Federal funds sold and securities purchased under agreements to resell	527		631
Trading securities	1,430		1,387
Securities available for sale at fair value	8,117		7,896
Securities held to maturity (fair value of $1,083 for both periods)	1,245		1,270
Loans held for sale (including $114 and $85 at fair value, respectively)	402		551
Loans and leases	63,260		62,565
Allowance for loan and lease losses	(814)		(815)
Net loans and leases	62,446		61,750
Premises and equipment	561		574
Goodwill	1,510		1,510
Other intangible assets	123		143
Other assets	3,824		3,996
Total assets	$	82,084	$	82,152

Liabilities
Noninterest-bearing deposits	$	15,892	$	16,021
Interest-bearing deposits	49,685		49,560
Total deposits	65,577		65,581
Trading liabilities	469		550
Short-term borrowings	3,461		3,400
Term borrowings	1,342		1,195
Other liabilities	1,978		2,315
Total liabilities	72,827		73,041

Equity
Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 16,750 shares	426		426
Common stock, $0.625 par value; authorized 700,000,000 shares; issued 508,835,780 and 524,280,412 shares, respectively	318		328
Capital surplus	4,459		4,808
Retained earnings	4,671		4,382
Accumulated other comprehensive loss, net	(912)		(1,128)
FHN shareholders' equity	8,962		8,816
Noncontrolling interest	295		295
Total equity	9,257		9,111
Total liabilities and equity	$	82,084	$	82,152

See accompanying notes to consolidated financial statements.


			7			2Q25 FORM 10-Q REPORT


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF INCOME




	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions, except per share data; shares in thousands) (Unaudited)	2025		2024			2025		2024
Interest income
Interest and fees on loans and leases	$	921	$	975		$	1,816	$	1,927
Interest and fees on loans held for sale	8		9			18		17
Interest on investment securities	71		59			139		119
Interest on trading securities	23		21			43		42
Interest on other earning assets	21		29			42		60
Total interest income	1,044		1,093			2,058		2,165
Interest expense
Interest on deposits	337		399			666		797
Interest on trading liabilities	6		7			14		12
Interest on short-term borrowings	38		41			66		70
Interest on term borrowings	22		17			40		33
Total interest expense	403		464			786		912
Net interest income	641		629			1,272		1,253
Provision for credit losses	30		55			70		105
Net interest income after provision for credit losses	611		574			1,202		1,148
Noninterest income
Fixed income	42		40			91		92
Deposit transactions and cash management	41		44			81		88
Brokerage, management fees and commissions	26		25			52		49
Card and digital banking fees	19		20			37		38
Other service charges and fees	14		14			26		27
Trust services and investment management	13		12			25		24
Mortgage banking income	10		10			18		19


Securities gains (losses), net	—		1			—		1
Other income	24		20			40		43
Total noninterest income	189		186			370		381
Noninterest expense
Personnel expense	282		279			561		580
Net occupancy expense	34		31			69		62
Computer software	34		29			66		59
Operations services	23		23			46		45
Legal and professional fees	17		18			31		33
Deposit insurance expense	12		16			25		40
Advertising and public relations	14		14			24		22

Equipment expense	11		11			22		22
Amortization of intangible assets	10		11			20		22
Contract employment and outsourcing	8		14			16		28
Communications and delivery	8		8			16		16

Other expense	38		46			82		86
Total noninterest expense	491		500			978		1,015
Income before income taxes	309		260			594		514
Income tax expense	64		56			127		113
Net income	$	245	$	204		$	467	$	401
Net income attributable to noncontrolling interest	4		5			8		10
Net income attributable to controlling interest	$	241	$	199		$	459	$	391


Preferred stock dividends	8		15			13		23
Net income available to common shareholders	$	233	$	184		$	446	$	368


			8			2Q25 FORM 10-Q REPORT


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents


CONSOLIDATED STATEMENTS OF INCOME (continued)

Basic earnings per common share	$	0.46	$	0.34	$	0.87	$	0.67
Diluted earnings per common share	$	0.45	$	0.34	$	0.86	$	0.67
Weighted average common shares	508,125		543,981		512,596		549,479
Diluted average common shares	513,606		547,093		518,701		552,539

See accompanying notes to consolidated financial statements.


			9			2Q25 FORM 10-Q REPORT


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions) (Unaudited)	2025		2024		2025		2024
Net income	$	245	$	204	$	467	$	401
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale	53		(10)		169		(65)
Net unrealized gains (losses) on cash flow hedges	16		(2)		43		(32)
Net unrealized gains on pension and other postretirement plans	2		2		4		4
Other comprehensive income (loss)	71		(10)		216		(93)
Comprehensive income	316		194		683		308
Comprehensive income attributable to noncontrolling interest	4		5		8		10
Comprehensive income attributable to controlling interest	$	312	$	189	$	675	$	298
Income tax expense (benefit) of items included in other comprehensive income:
Net unrealized gains (losses) on securities available for sale	$	17	$	(3)	$	56	$	(22)
Net unrealized gains (losses) on cash flow hedges	5		(1)		14		(10)
Net unrealized gains on pension and other postretirement plans	1		1		1		1

See accompanying notes to consolidated financial statements.


			10			2Q25 FORM 10-Q REPORT


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY




Six Months Ended June 30, 2025
	Preferred Stock			Common Stock
(In millions, except share and per share data) (unaudited)	Shares	Amount		Shares	Amount		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss) (a)		Noncontrolling Interest		Total
Balance, December 31, 2024	16,750	$	426	524,280,412	$	328	$	4,808	$	4,382	$	(1,128)	$	295	$	9,111

Net income	—	—		—	—		—		218		—		4		222
Other comprehensive income (loss)	—	—		—	—		—		—		145		—		145

Cash dividends declared:
Preferred stock	—	—		—	—		—		(5)		—		—		(5)
Common stock ($0.15 per share)	—	—		—	—		—		(78)		—		—		(78)

Common stock repurchased (b)	—	—		(17,657,334)	(11)		(354)		—		—		—		(365)
Excise tax on common stock repurchased	—	—		—	—		(3)		—		—		—		(3)
Common stock issued for:
Stock options exercised and restricted stock awards	—	—		692,106	—		3		—		—		—		3
Stock-based compensation expense	—	—		—	—		18		—		—		—		18
Dividends declared - noncontrolling interest of subsidiary preferred stock	—	—		—	—		—		—		—		(4)		(4)

Balance, March 31, 2025	16,750	426		507,315,184	317		4,472		4,517		(983)		295		9,044


Net income	—	—		—	—		—		241		—		4		245
Other comprehensive income (loss)	—	—		—	—		—		—		71		—		71

Cash dividends declared:
Preferred stock	—	—		—	—		—		(8)		—		—		(8)
Common stock ($0.15 per share)	—	—		—	—		—		(79)		—		—		(79)



Common stock repurchased (b)	—	—		(1,455,166)	(1)		(26)		—		—		—		(27)

Common stock issued for:
Stock options exercised and restricted stock awards	—	—		2,975,762	—		—		—		—		—		—

Stock-based compensation expense	—	—		—	2		13		—		—		—		15
Dividends declared - noncontrolling interest of subsidiary preferred stock	—	—		—	—		—		—		—		(4)		(4)

Balance, June 30, 2025	16,750	$	426	508,835,780	$	318	$	4,459	$	4,671	$	(912)	$	295	$	9,257

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

(b)Includes $360 million and $9 million repurchased during first and second quarter, respectively, under FHN's $1 billion general purchase program approved in October 2024 and scheduled to expire in January 2026.


			11			2Q25 FORM 10-Q REPORT


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (continued)


Six Months Ended June 30, 2024
	Preferred Stock			Common Stock
(In millions, except share and per share data) (unaudited)	Shares	Amount		Shares	Amount		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss) (a)		Noncontrolling Interest		Total
Balance, December 31, 2023	26,750	$	520	558,838,694	$	349	$	5,351	$	3,964	$	(1,188)	$	295	$	9,291
Adjustment to reflect adoption of ASU 2023-02	—	—		—	—		—		8		—		—		8

Net income	—	—		—	—		—		192		—		5		197
Other comprehensive income (loss)	—	—		—	—		—		—		(83)		—		(83)

Cash dividends declared:
Preferred stock	—	—		—	—		—		(8)		—		—		(8)
Common stock ($0.15 per share)	—	—		—	—		—		(84)		—		—		(84)

Common stock repurchased (b)	—	—		(11,051,980)	(7)		(152)		—		—		—		(159)
Excise tax on common stock repurchased	—	—		—	—		(2)		—		—		—		(2)
Common stock issued for:
Stock options exercised and restricted stock awards	—	—		850,272	—		—		—		—		—		—
Stock-based compensation expense	—	—		—	1		17		—		—		—		18
Dividends declared - noncontrolling interest of subsidiary preferred stock	—	—		—	—		—		—		—		(5)		(5)

Balance, March 31, 2024	26,750	520		548,636,986	343		5,214		4,072		(1,271)		295		9,173

Net income	—	—		—	—		—		199		—		5		204
Other comprehensive income (loss)	—	—		—	—		—		—		(10)		—		(10)

Cash dividends declared:
Preferred stock	—	—		—	—		—		(8)		—		—		(8)
Common stock ($0.15 per share)	—	—		—	—		—		(84)		—		—		(84)

Series D preferred stock redemption	(10,000)	(94)		—	—		—		(6)		—		—		(100)
Excise tax on preferred stock redemption	—	—		—	—		—		(1)		—		—		(1)
Common stock repurchased (b)	—	—		(14,896,091)	(9)		(219)		—		—		—		(228)
Excise tax on common stock repurchased	—	—		—	—		(1)		—		—		—		(1)
Common stock issued for:
Stock options exercised and restricted stock awards	—	—		3,134,855	1		1		—		—		—		2

Stock-based compensation expense	—	—		—	1		12		—		—		—		13
Dividends declared - noncontrolling interest of subsidiary preferred stock	—	—		—	—		—		—		—		(5)		(5)
Balance, June 30, 2024	16,750	$	426	536,875,750	$	336	$	5,007	$	4,172	$	(1,281)	$	295	$	8,955

(b)Includes $154 million and $212 million repurchased during first and second quarter, respectively, under FHN's $650 million general purchase program approved in January 2024 and terminated in October 2024.

See accompanying notes to consolidated financial statements.


			12			2Q25 FORM 10-Q REPORT


PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Six Months Ended June 30,
(Dollars in millions) (Unaudited)	2025		2024
Operating Activities
Net income	$	467	$	401
Adjustments to reconcile net income to net cash from operating activities:
Provision for credit losses	70		105
Deferred income tax expense (benefit)	20		(26)
Depreciation and amortization of premises and equipment	28		27
Amortization of intangible assets	20		22
Net other amortization and accretion	(7)		2
Net decrease in trading securities	433		712
Net (increase) decrease in derivatives	(10)		4




Stock-based compensation expense	33		31







Loans held for sale:
Purchases and originations	(1,241)		(1,372)
Gross proceeds from settlements and sales	916		867

Gain due to fair value adjustments and other	(7)		(15)










Other operating activities, net	(290)		(70)
Total adjustments	(35)		287
Net cash provided by operating activities	432		688
Investing Activities


Proceeds from maturities of securities available for sale	457		391
Purchases of securities available for sale	(457)		(24)

Proceeds from prepayments of securities held to maturity	27		28

Purchases of premises and equipment	(18)		(21)





Net increase in loans and leases	(732)		(1,539)

Net (increase) decrease in interest-bearing deposits with banks	626		(124)


Other investing activities, net	14		5
Net cash used in investing activities	(83)		(1,284)
Financing Activities
Common stock:
Stock options exercised	3		1
Cash dividends paid	(162)		(171)
Repurchase of shares	(393)		(387)

Preferred stock:
Series D preferred stock redemption	—		(100)

Cash dividends paid - preferred stock - noncontrolling interest	(8)		(10)
Cash dividends paid - preferred stock	(13)		(16)




Net decrease in deposits	(5)		(986)
Net increase in short-term borrowings	61		1,966
Proceeds from issuance of term borrowings	497		18
Repayment of term borrowing	(350)		—
Increases (decreases) in term borrowings	(1)		6
Net cash (used in) provided by financing activities	(371)		321
Net decrease in cash and cash equivalents	(22)		(275)
Cash and cash equivalents at beginning of period	1,537		1,731
Cash and cash equivalents at end of period	$	1,515	$	1,456






Supplemental Disclosures
Total interest paid	$	775	$	964
Total taxes paid	25		88
Total taxes refunded	2		4
Transfer from loans to OREO	1		2
Transfer from loans HFS to trading securities	480		552
Transfer from loans to loans HFS	(1)		—

See accompanying notes to consolidated financial statements.


			13			2Q25 FORM 10-Q REPORT


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

Notes to the Consolidated Financial Statements (Unaudited)

Note 1—Basis of Presentation and Accounting Policies

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes necessary for complete financial statements in accordance with GAAP. In the opinion of management, the accompanying unaudited consolidated financial statements contain all significant adjustments, consisting of normal and recurring items, considered necessary for fair presentation. These interim financial statements should be read in conjunction with FHN's audited consolidated financial statements and notes in FHN's Annual Report on Form 10-K for the year ended December 31, 2024. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year.

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

Summary of Accounting Changes

ASU 2023-07

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

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024. FHN adopted ASU 2023-07 as of December 31, 2024 and its requirements have been applied retrospectively to all periods presented in Note 12 — Business Segment Information.

Accounting Changes Issued But Not Currently Effective

ASU 2023-09

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

For public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The guidance must be applied on a prospective basis with the option to apply the standard retrospectively and early adoption is permitted. FHN will provide a full retrospective presentation of its income tax disclosures in accordance with the provisions of ASU 2023-09 within the financial statements included in its annual Form 10-K filing.

ASU 2024-03

In November 2024, the FASB issued ASU 2024-03, "Disaggregation of Income Statement Expenses" that requires tabular disclosure, on an annual and interim basis, of additional disaggregated information about prescribed expense categories if they are present in any expense caption on the face of the income statement within continuing operations. The prescribed categories applicable to FHN are employee compensation, depreciation, and intangible asset amortization. Other required expense disclosures must be included in the tabular disclosure when they are included in the same income statement caption as a prescribed expense category. ASU 2024-03 also requires disclosure of the total amount of selling expenses and, annually, an entity’s definition of selling expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. The guidance is required to be applied prospectively. Early adoption and retrospective application are permitted. FHN is currently assessing the effects of adopting ASU 2024-03 on its financial statement disclosures.


			14			2Q25 FORM 10-Q REPORT


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

SEC Final Rule

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

In April 2024, the SEC issued a stay of the Climate Disclosures Rules pending the completion of judicial review of various legal challenges. On March 27, 2025, the SEC voted to end the legal defense of the Climate Disclosures Rules, and in a July 23, 2025 court filing, the SEC stated it did not intend to review or reconsider its Climate Disclosure Rules prior to the court ruling on the pending petitions challenging those rules. Therefore, the actual timing of the implementation of the Climate Disclosures Rules, if sustained through the judicial process and not withdrawn or modified by the SEC, is uncertain. FHN is assessing the potential effects of the Climate Disclosures Rules on its financial statements.


			15			2Q25 FORM 10-Q REPORT


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

Note 2—Investment Securities

The following tables summarize FHN’s investment securities as of June 30, 2025 and December 31, 2024:


INVESTMENT SECURITIES AT JUNE 30, 2025
	June 30, 2025
(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:

Government agency issued MBS	$	4,139	$	6	$	(399)	$	3,746
Government agency issued CMO	3,188		4		(260)		2,932
Other U.S. government agencies	1,223		2		(123)		1,102

States and municipalities	376		—		(39)		337
Total securities available for sale (a)	$	8,926	$	12	$	(821)	$	8,117

Securities held to maturity:
Government agency issued MBS	$	782	$	—	$	(92)	$	690
Government agency issued CMO	463		—		(70)		393
Total securities held to maturity (a)	$	1,245	$	—	$	(162)	$	1,083

(a)Includes $7.0 billion of securities available for sale and $1.2 billion of securities held to maturity pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.


INVESTMENT SECURITIES AT DECEMBER 31, 2024
	December 31, 2024
(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:

Government agency issued MBS	$	4,223	$	1	$	(522)	$	3,702
Government agency issued CMO	3,079		—		(312)		2,767
Other U.S. government agencies	1,234		—		(161)		1,073

States and municipalities	394		—		(40)		354
Total securities available for sale (a)	$	8,930	$	1	$	(1,035)	$	7,896

Securities held to maturity:
Government agency issued MBS	$	804	$	—	$	(109)	$	695
Government agency issued CMO	466		—		(78)		388
Total securities held to maturity (a)	$	1,270	$	—	$	(187)	$	1,083

(a)Includes $6.9 billion of securities available for sale and $1.3 billion of securities held to maturity pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.


			16			2Q25 FORM 10-Q REPORT


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

The amortized cost and fair value by contractual maturity for the debt securities portfolio as of June 30, 2025 is provided below:


DEBT SECURITIES PORTFOLIO MATURITIES
	Held to Maturity				Available for Sale
(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within 1 year	$	—	$	—	$	15	$	15
After 1 year through 5 years	—		—		93		88
After 5 years through 10 years	—		—		318		293
After 10 years	—		—		1,173		1,043
Subtotal	—		—		1,599		1,439
Government agency issued MBS and CMO (a)	1,245		1,083		7,327		6,678
Total	$	1,245	$	1,083	$	8,926	$	8,117

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

There were no sales of AFS securities for the three and six months ended June 30, 2025 and 2024.

The following tables provide information on investments within the available-for-sale portfolio that had unrealized losses as of June 30, 2025 and December 31, 2024:

AFS INVESTMENT SECURITIES WITH UNREALIZED LOSSES


	As of June 30, 2025
	Less than 12 months				12 months or longer				Total
(Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

Government agency issued MBS	$	166	$	(1)	$	2,933	$	(398)	$	3,099	$	(399)
Government agency issued CMO	538		(1)		1,682		(259)		2,220		(260)
Other U.S. government agencies	104		(1)		818		(122)		922		(123)

States and municipalities	76		(1)		241		(38)		317		(39)
Total	$	884	$	(4)	$	5,674	$	(817)	$	6,558	$	(821)


	As of December 31, 2024
	Less than 12 months				12 months or longer				Total
(Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

Government agency issued MBS	$	663	$	(9)	$	2,992	$	(513)	$	3,655	$	(522)
Government agency issued CMO	675		(2)		1,744		(310)		2,419		(312)
Other U.S. government agencies	210		(6)		863		(155)		1,073		(161)

States and municipalities	66		(1)		256		(39)		322		(40)
Total	$	1,614	$	(18)	$	5,855	$	(1,017)	$	7,469	$	(1,035)


			17			2Q25 FORM 10-Q REPORT


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

FHN has evaluated all AFS debt securities that were in unrealized loss positions in accordance with its accounting policy for recognition of credit losses. No AFS debt securities were determined to have credit losses. Total AIR not included in the fair value or amortized cost basis of AFS debt securities was $28 million and $29 million as of June 30, 2025 and December 31, 2024, respectively. Consistent with FHN's review of the related securities, there were no credit-related write-downs of AIR for AFS debt securities during the reporting periods. Additionally, for AFS debt securities with unrealized losses, FHN does not intend to sell them, and it is more likely than not that FHN will not be required to sell them prior to recovery. Therefore, no write-downs of these investments to fair value occurred during the reporting periods. There were no transfers to or from AFS or HTM during the three and six months ended June 30, 2025 and 2024.

For HTM securities, an allowance for credit losses is required to absorb estimated lifetime credit losses. Total AIR not included in the fair value or amortized cost basis of HTM debt securities was $3 million as of both June 30, 2025 and December 31, 2024. FHN has assessed the risk of credit loss and has determined that no allowance for credit losses for HTM securities was necessary as of June 30, 2025 and December 31, 2024. The evaluation of credit risk includes consideration of third-party and government guarantees (both explicit and implicit), senior or subordinated status, credit ratings of the issuer, the effects of interest rate changes since purchase and observable market information such as issuer-specific credit spreads.

The carrying amount of equity investments without a readily determinable fair value was $109 million and $96 million at June 30, 2025 and December 31, 2024, respectively. The year-to-date 2025 and 2024 gross amounts of upward and downward valuation adjustments were not significant.

Net unrealized gains of $6 million and $3 million were recognized in the three and six months ended June 30, 2025, respectively, for equity investments with readily determinable fair values. Net unrealized gains of $2 million and $7 million were recognized in the three and six months ended June 30, 2024, respectively, for equity investments with readily determinable fair values.


			18			2Q25 FORM 10-Q REPORT


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

Note 3—Loans and Leases

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

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

The following table provides the amortized cost basis of loans and leases by portfolio segment and class as of June 30, 2025 and December 31, 2024, excluding accrued interest of $260 million and $271 million, respectively, which is included in other assets in the Consolidated Balance Sheets.


LOANS AND LEASES BY PORTFOLIO SEGMENT
(Dollars in millions)	June 30, 2025		December 31, 2024
Commercial:
Commercial and industrial (a)	$	30,301	$	29,957
Loans to mortgage companies	4,058		3,471
Total commercial, financial, and industrial	34,359		33,428
Commercial real estate	13,936		14,421
Consumer:
HELOC	2,128		2,092
Real estate installment loans	12,240		11,955
Total consumer real estate	14,368		14,047
Credit card and other (b)	597		669
Loans and leases	$	63,260	$	62,565
Allowance for loan and lease losses	(814)		(815)
Net loans and leases	$	62,446	$	61,750

(a)Includes equipment financing leases of $1.4 billion for both June 30, 2025 and December 31, 2024.

(b)Includes $162 million and $174 million of commercial credit card balances as of June 30, 2025 and December 31, 2024, respectively.

Restrictions

Loans and leases with carrying values of $45.5 billion and $45.8 billion were pledged as collateral for borrowings at June 30, 2025 and December 31, 2024, respectively.

Concentrations of Credit Risk

Most of FHN’s business activity is with clients located in the southern United States. FHN’s lending activity is concentrated in its market areas within those states. As of June 30, 2025, FHN had loans to mortgage companies of $4.1 billion and loans to finance and insurance companies of $3.7 billion. As a result, 23% of the C&I portfolio is sensitive to impacts on the financial services industry.

Credit Quality Indicators

FHN employs a dual grade commercial risk grading methodology to assign an estimate for the probability of default and the loss given default for each commercial loan using factors specific to various industry, portfolio, or product segments that result in a rank ordering of risk and the assignment of grades PD 1 to PD 16. This credit grading

system is intended to identify and measure the credit quality of the loan and lease portfolio by analyzing the migration between grading categories. It is also integral to the estimation methodology utilized in determining the ALLL since an allowance is established for pools of commercial loans based on the credit grade assigned. Each PD grade corresponds to an estimated one-year default probability percentage. PD grades are continually evaluated but require a formal scorecard annually.

PD 1 through PD 12 are “pass” grades. PD grades 13-16 correspond to the regulatory-defined categories of special mention (13), substandard (14), doubtful (15), and loss (16). Special mention commercial loans and leases have potential weaknesses that, if left uncorrected, may result in deterioration of FHN's credit position at some future date. Substandard commercial loans and leases have well-defined weaknesses and are characterized by the distinct possibility that FHN will sustain some loss if the deficiencies are not corrected. Doubtful commercial loans and leases have the same weaknesses as substandard loans and leases with the added characteristics that the


			19			2Q25 FORM 10-Q REPORT


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

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

The following tables provide the amortized cost basis of the commercial loan portfolio by year of origination and

credit quality indicator as of June 30, 2025 and December 31, 2024.


C&I PORTFOLIO
	June 30, 2025

(Dollars in millions)	2025		2024		2023		2022		2021		Prior to 2021		LMC (a)		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Credit Quality Indicator:
Pass (PD grades 1 through 12)	$	1,850	$	5,466	$	2,337	$	3,171	$	1,993	$	4,444	$	4,056	$	8,972	$	185	$	32,474












Special Mention (PD grade 13)	1		112		59		85		38		86		2		193		14		590
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)	13		103		154		250		161		237		—		349		28		1,295







Total C&I loans	$	1,864	$	5,681	$	2,550	$	3,506	$	2,192	$	4,767	$	4,058	$	9,514	$	227	$	34,359


	December 31, 2024

(Dollars in millions)	2024		2023		2022		2021		2020		Prior to 2020		LMC (a)		Revolving Loans		Revolving Loans Converted to Term Loans		Total

Credit Quality Indicator:
Pass (PD grades 1 through 12)	$	5,590	$	2,607	$	3,649	$	2,336	$	1,055	$	3,853	$	3,471	$	8,784	$	248	$	31,593












Special Mention (PD grade 13)	106		27		78		47		33		57		—		279		2		629
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)	84		184		113		179		33		169		—		383		61		1,206







Total C&I loans	$	5,780	$	2,818	$	3,840	$	2,562	$	1,121	$	4,079	$	3,471	$	9,446	$	311	$	33,428

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


CRE PORTFOLIO
	June 30, 2025

(Dollars in millions)	2025		2024		2023		2022		2021		Prior to 2021		Revolving Loans		Revolving Loans Converted to Term Loans		Total

Credit Quality Indicator:
Pass (PD grades 1 through 12)	$	348	$	856	$	1,570	$	2,832	$	2,274	$	3,864	$	344	$	90	$	12,178
Special Mention (PD grade 13)	—		—		8		198		286		129		43		—		664
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)	3		4		48		381		172		480		6		—		1,094







Total CRE loans	$	351	$	860	$	1,626	$	3,411	$	2,732	$	4,473	$	393	$	90	$	13,936


	December 31, 2024

(Dollars in millions)	2024		2023		2022		2021		2020		Prior to 2020		Revolving Loans		Revolving Loans Converted to Term Loans		Total

Credit Quality Indicator:
Pass (PD grades 1 through 12)	$	694	$	1,296	$	3,282	$	2,778	$	894	$	3,281	$	340	$	47	$	12,612











Special Mention (PD grade 13)	—		42		280		198		37		130		—		1		688
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)	3		31		251		278		116		436		6		—		1,121







Total CRE loans	$	697	$	1,369	$	3,813	$	3,254	$	1,047	$	3,847	$	346	$	48	$	14,421


			20			2Q25 FORM 10-Q REPORT


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

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

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

real estate loans as of June 30, 2025 and December 31, 2024. Within consumer real estate, classes include HELOC and real estate installment loans. HELOCs are loans which during their draw period are classified as revolving loans. Once the draw period ends and the loan enters its repayment period, the loan converts to a term loan and is classified as a revolving loan converted to a term loan. All loans classified in the following table as revolving loans or revolving loans converted to term loans are HELOCs. Real estate installment loans are originated as fixed term loans and are classified below in their vintage year. All loans in the following table classified in a vintage year are real estate installment loans.


CONSUMER REAL ESTATE PORTFOLIO
	June 30, 2025

(Dollars in millions)	2025		2024		2023		2022		2021		Prior to 2021		Revolving Loans		Revolving Loans Converted to Term Loans		Total
FICO score 740 or greater	$	636	$	996	$	1,436	$	1,931	$	1,512	$	2,054	$	1,526	$	65	$	10,156
FICO score 720-739	70		142		189		263		202		346		174		17		1,403
FICO score 700-719	60		98		137		209		167		267		129		14		1,081
FICO score 660-699	70		132		153		172		95		305		114		19		1,060
FICO score 620-659	4		10		10		17		19		111		22		6		199
FICO score less than 620	12		23		18		18		23		333		27		15		469
Total consumer real estate loans	$	852	$	1,401	$	1,943	$	2,610	$	2,018	$	3,416	$	1,992	$	136	$	14,368


	December 31, 2024

(Dollars in millions)	2024		2023		2022		2021		2020		Prior to 2020		Revolving Loans		Revolving Loans Converted to Term Loans		Total
FICO score 740 or greater	$	1,045	$	1,493	$	2,009	$	1,592	$	675	$	1,554	$	1,430	$	56	$	9,854
FICO score 720-739	149		197		270		213		99		271		175		17		1,391
FICO score 700-719	98		140		217		175		72		242		150		18		1,112
FICO score 660-699	133		160		183		100		75		294		146		25		1,116
FICO score 620-659	11		10		17		21		20		122		30		9		240
FICO score less than 620	18		22		19		18		18		203		25		11		334
Total consumer real estate loans	$	1,454	$	2,022	$	2,715	$	2,119	$	959	$	2,686	$	1,956	$	136	$	14,047


			21			2Q25 FORM 10-Q REPORT


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

The following table reflects the amortized cost basis by year of origination and refreshed FICO scores for credit card and other loans as of June 30, 2025 and December 31, 2024.


CREDIT CARD & OTHER PORTFOLIO
	June 30, 2025

(Dollars in millions)	2025		2024		2023		2022		2021		Prior to 2021		Revolving Loans		Revolving Loans Converted to Term Loans		Total
FICO score 740 or greater	$	16	$	13	$	12	$	5	$	3	$	15	$	184	$	9	$	257
FICO score 720-739	2		1		1		1		—		2		17		3		27
FICO score 700-719	2		1		1		1		—		2		17		—		24
FICO score 660-699	1		1		1		—		—		2		15		1		21
FICO score 620-659	—		1		1		—		—		1		8		—		11
FICO score less than 620	3		6		6		4		3		59		175		1		257
Total credit card and other loans	$	24	$	23	$	22	$	11	$	6	$	81	$	416	$	14	$	597


	December 31, 2024

(Dollars in millions)	2024		2023		2022		2021		2020		Prior to 2020		Revolving Loans		Revolving Loans Converted to Term Loans		Total
FICO score 740 or greater	$	21	$	22	$	10	$	4	$	2	$	19	$	197	$	8	$	283
FICO score 720-739	7		3		1		1		—		3		20		2		37
FICO score 700-719	1		2		2		—		—		2		14		—		21
FICO score 660-699	1		2		1		—		—		3		15		4		26
FICO score 620-659	2		1		—		—		—		1		9		—		13
FICO score less than 620	8		8		5		4		4		78		181		1		289
Total credit card and other loans	$	40	$	38	$	19	$	9	$	6	$	106	$	436	$	15	$	669

Nonaccrual and Past Due Loans and Leases

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

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

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


			22			2Q25 FORM 10-Q REPORT


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

The following table reflects accruing and non-accruing loans and leases by class on June 30, 2025 and December 31, 2024.


ACCRUING & NON-ACCRUING LOANS AND LEASES
	June 30, 2025
	Accruing								Non-Accruing
(Dollars in millions)	Current		30-89 Days Past Due		90+ Days Past Due		Total Accruing		Current		30-89 Days Past Due		90+ Days Past Due		Total Non- Accruing		Total Loans and Leases
Commercial, financial, and industrial:
C&I (a)	$	30,025	$	50	$	1	$	30,076	$	166	$	4	$	55	$	225	$	30,301

Loans to mortgage companies	4,058		—		—		4,058		—		—		—		—		4,058

Total commercial, financial, and industrial	34,083		50		1		34,134		166		4		55		225		34,359
Commercial real estate:
CRE (b)	13,674		26		—		13,700		124		95		17		236		13,936



Consumer real estate:
HELOC (c)	2,084		12		3		2,099		18		4		7		29		2,128
Real estate installment loans (d)	12,112		23		3		12,138		34		19		49		102		12,240
Total consumer real estate	14,196		35		6		14,237		52		23		56		131		14,368
Credit card and other:
Credit card	245		1		1		247		—		—		—		—		247
Other	347		2		—		349		—		—		1		1		350
Total credit card and other	592		3		1		596		—		—		1		1		597
Total loans and leases	$	62,545	$	114	$	8	$	62,667	$	342	$	122	$	129	$	593	$	63,260


	December 31, 2024
	Accruing								Non-Accruing
(Dollars in millions)	Current		30-89 Days Past Due		90+ Days Past Due		Total Accruing		Current		30-89 Days Past Due		90+ Days Past Due		Total Non- Accruing		Total Loans and Leases
Commercial, financial, and industrial:
C&I (a)	$	29,751	$	32	$	1	$	29,784	$	101	$	26	$	46	$	173	$	29,957

Loans to mortgage companies	3,471		—		—		3,471		—		—		—		—		3,471


Total commercial, financial, and industrial	33,222		32		1		33,255		101		26		46		173		33,428
Commercial real estate:
CRE (b)	14,124		3		—		14,127		221		10		63		294		14,421




Consumer real estate:
HELOC (c)	2,045		11		2		2,058		19		4		11		34		2,092
Real estate installment loans (d)	11,800		39		17		11,856		31		10		58		99		11,955

Total consumer real estate	13,845		50		19		13,914		50		14		69		133		14,047
Credit card and other:
Credit card	262		2		1		265		—		—		—		—		265
Other	400		2		—		402		—		1		1		2		404

Total credit card and other	662		4		1		667		—		1		1		2		669
Total loans and leases	$	61,853	$	89	$	21	$	61,963	$	372	$	51	$	179	$	602	$	62,565

(a) $207 million and $172 million of C&I loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2025 and 2024, respectively.

(b) $228 million and $287 million of CRE loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2025 and 2024, respectively.

(c) $3 million of HELOC loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in both 2025 and 2024.

(d) $12 million and $9 million of real estate installment loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2025 and 2024, respectively.

Collateral-Dependent Loans

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

As of June 30, 2025 and December 31, 2024, FHN had commercial loans with amortized cost of approximately $397 million and $352 million, respectively, that were based on the value of underlying collateral. Collateral-dependent C&I and CRE loans totaled $164 million and $233 million, respectively, at June 30, 2025. The collateral for these loans generally consists of business assets


			23			2Q25 FORM 10-Q REPORT


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

including land, buildings, equipment, and financial assets. During the three and six months ended June 30, 2025, FHN recognized charge-offs of $13 million and $37 million, respectively, on these loans related to reductions in estimated collateral values.

Consumer HELOC and real estate installment loans with amortized cost based on the value of underlying real estate collateral were approximately $5 million and $42 million, respectively, as of June 30, 2025 and $6 million and $36 million, respectively, as of December 31, 2024. Charge-offs relating to collateral-dependent consumer loans were $1 million for both the six months ended June 30, 2025 and June 30, 2024.

Loan Modifications to Troubled Borrowers

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

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

foreseeable future absent a modification. Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty.

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

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

For the credit card portfolio, troubled loan modifications are typically effected through either a short-term credit card hardship program or a longer-term credit card workout program. In the credit card hardship program, borrowers may be granted rate and payment reductions for six months to one year. In the credit card workout program, borrowers are granted a rate reduction to 0% and a term extension for up to five years.

Modifications to Borrowers Experiencing Financial Difficulty

The following table presents the amortized cost basis at the end of the reporting period of loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of modification made, as well as the financial effect of the modifications made as of June 30, 2025.

LOAN MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY


	Interest Rate Reduction
	June 30, 2025					June 30, 2024
(Dollars in millions)	Balance		% of Total Class		Financial Effect	Balance		% of Total Class		Financial Effect

CRE	$	47	0.3	%	Reduced weighted-average contractual interest rate from 7.61% to 6.96%	$	—	—	%	N/A
Consumer real estate (a)	—		—		Reduced weighted-average contractual interest rate from 11.10% to 6.58%	—		—		Reduced weighted-average contractual interest rate from 9.87% to 6.52%
Credit card and other (a)	—		—		Reduced weighted-average contractual interest rate from 17.36% to 0.00%	—		—		Reduced weighted-average contractual interest rate from 5.77% to 4.41%
Total	$	47	0.1	%		$	—	—	%
(a) Balance less than $1 million.


			24			2Q25 FORM 10-Q REPORT


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


	Term Extension
	June 30, 2025					June 30, 2024
(Dollars in millions)	Balance		% of Total Class		Financial Effect	Balance		% of Total Class		Financial Effect
C&I	$	122	0.4	%	Added a weighted-average 1.1 years to the life of loans, which reduced monthly payment amounts for the borrowers	$	95	0.3	%	Added a weighted-average 1.2 years to the life of loans, which reduced monthly payment amounts for the borrowers
CRE	124		0.9		Added a weighted-average 1.3 years to the life of loans, which reduced monthly payment amounts for the borrowers	28		0.2		Added a weighted-average 2.4 years to the life of loans, which reduced monthly payment amounts for the borrowers
Consumer real estate (a)	—		—		N/A	—		—		Added a weighted-average 22 years to the life of loans, which reduced monthly payment amounts for the borrowers

Total	$	246	0.4	%		$	123	0.2	%
(a) Balance less than $1 million.

Principal Forgiveness

June 30, 2025

June 30, 2024

(Dollars in millions)

Balance

% of Total Class

Financial Effect

Balance

% of Total Class

Financial Effect

Consumer real estate (a)

—

Less than $1 million of the principal of loans was legally discharged in bankruptcy during the period and the borrowers have not reaffirmed the debt as of period end

—

Less than $1 million of the principal of loans was legally discharged in bankruptcy during the period and the borrowers have not reaffirmed the debt as of period end

Total

—

(a) Balance less than $1 million.


	Combination - Term Extension and Interest Rate Reduction
	June 30, 2025					June 30, 2024
(Dollars in millions)	Balance		% of Total Class		Financial Effect	Balance		% of Total Class		Financial Effect
C&I (a)	$	—	—	%	Added a weighted-average 1.2 years to the life of loans and reduced weighted-average contractual interest rate from 9.19% to 8.17%	$	—	—	%	N/A
CRE	33		0.2		Added a weighted-average 2.0 years to the life of loans and reduced weighted-average contractual interest rate from 7.78% to 6.82%	—		—		N/A
Consumer real estate	1		—		Added a weighted-average 11.2 years to the life of loans and reduced weighted-average contractual interest rate from 8.43% to 4.35%	3		—		Added a weighted-average 10.8 years to the life of loans and reduced weighted-average contractual interest rate from 8.39% to 3.67%

Total	$	34	0.1	%		$	3	—	%
(a) Balance less than $1 million.

Loan modifications to borrowers experiencing financial difficulty that had a payment default during the period and were modified in the 12 months before default totaled $1 million and $8 million for the six months ended June 30, 2025 and June 30, 2024, respectively. FHN closely monitors the performance of the loans that are modified to

borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.


			25			2Q25 FORM 10-Q REPORT


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

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


PERFORMANCE OF LOANS THAT HAVE BEEN MODIFIED IN THE LAST 12 MONTHS
	June 30, 2025

(Dollars in millions)	Current		30-89 Days Past Due		90+ Days Past Due		Non-Accruing
C&I	$	127	$	8	$	—	$	27
CRE	247		—		—		148
Consumer Real Estate	1		—		—		1

Total	$	375	$	8	$	—	$	176


			26			2Q25 FORM 10-Q REPORT


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

Note 4—Allowance for Credit Losses

Management's estimate of expected credit losses in the loan and lease portfolios is recorded in the ALLL and the reserve for unfunded lending commitments, collectively referred to as the Allowance for Credit Losses, or the ACL. The ALLL and the reserve for unfunded lending commitments are reported on the Consolidated Balance Sheets in the allowance for loan and lease losses and in other liabilities, respectively. Provisions for credit losses related to loans and leases and unfunded lending commitments are reported in the Consolidated Statements of Income as provision for credit losses.

The ACL is maintained at a level management believes to be appropriate to absorb expected credit losses over the contractual life of the loan and lease portfolio and unfunded lending commitments. The determination of the ACL is based on periodic evaluation of the loan and lease portfolios and unfunded lending commitments considering a number of relevant underlying factors, including key assumptions and evaluation of quantitative and qualitative information.

The expected loan losses are the product of multiplying FHN’s estimates of probability of default ("PD"), loss given default ("LGD"), and individual loan level exposure at default ("EAD"), including amortization and prepayment assumptions, on an undiscounted basis. FHN uses models or assumptions to develop the expected loss forecasts, which incorporate multiple macroeconomic forecasts over a reasonable and supportable forecast period of at most three years. After the reasonable and supportable forecast period, the Company reverts to its historical loss averages, evaluated over the historical observation period, for the remaining estimated life of the loans. In order to capture the unique risks of the loan portfolio within the PD, LGD, and prepayment models, FHN segments the portfolio into pools, generally incorporating loan grades for commercial loans. As there can be no certainty that actual economic performance will precisely follow any specific macroeconomic forecast, FHN uses qualitative adjustments where current loan characteristics or current or forecasted economic conditions differ from historical periods.

The evaluation of quantitative and qualitative information is performed through assessments of groups of assets that share similar risk characteristics and certain individual loans and leases that do not share similar risk characteristics with the collective group. As described in Note 3 - Loans and Leases, loans are grouped generally by product type and significant loan portfolios are assessed for credit losses using analytical or statistical models. The quantitative component utilizes economic forecast information as its foundation and is primarily based on analytical models that use known or estimated data as of the balance sheet date and forecasted data over the reasonable and supportable period. The ACL is also

affected by qualitative factors that FHN considers to reflect current judgment of various events and risks that are not measured in the quantitative calculations, including alternative economic forecasts.

In accordance with its accounting policy elections, FHN does not recognize a separate allowance for expected credit losses for AIR and records reversals of AIR as reductions of interest income. FHN reverses previously accrued but uncollected interest when an asset is placed on nonaccrual status. AIR and the related allowance for expected credit losses are included as components of other assets. The total amounts of interest reversals from loans placed on nonaccrual status and the amounts of income recognized on nonaccrual loans during the three and six months ended June 30, 2025 and 2024 were not material.

Expected credit losses for unfunded commitments are estimated for periods where the commitment is not unconditionally cancellable. The measurement of expected credit losses for unfunded commitments mirrors that of loans and leases with the additional estimate of future draw rates (timing and amount).

The ACL balance as of June 30, 2025, as compared to December 31, 2024, is largely reflective of deterioration in macroeconomic forecasts and emerging concerns around potential economic instability, offset by lower criticized balances in the CRE portfolio. In developing credit loss estimates for its loan and lease portfolios, FHN utilized multiple scenarios for its macroeconomic inputs, including a baseline scenario, an upside scenario, and a downside scenario from Moody’s. As of June 30, 2025, among other things, FHN's scenario selection process factored in the outlook for production, inflation, interest rates, employment, real estate prices, and the uncertainty around tariff policy. FHN selected one scenario as its base case, which was the Moody's baseline scenario. The heaviest weight was placed on this scenario. Smaller weights were placed on the FHN-selected downside scenario and on the FHN-selected upside scenario.

Management also made qualitative adjustments to reflect estimated recoveries based on a review of prior charge-off and recovery levels, for default risk associated with large balances with individual borrowers, for estimated loss amounts not reflected in historical factors due to specific portfolio risk or identified model limitations, and for instances where limited data for acquired loans is considered to affect modeled results.

The following table provides a rollforward of the ALLL and the reserve for unfunded lending commitments by portfolio type for the three and six months ended June 30, 2025 and 2024.


			27			2Q25 FORM 10-Q REPORT


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


ROLLFORWARD OF ALLL & RESERVE FOR UNFUNDED LENDING COMMITMENTS
(Dollars in millions)	Commercial, Financial, and Industrial		Commercial Real Estate		Consumer Real Estate		Credit Card and Other		Total
	Three Months Ended June 30, 2025
Allowance for loan and lease losses:
Balance as of April 1, 2025	$	345	$	225	$	230	$	22	$	822
Charge-offs	(28)		(7)		(2)		(6)		(43)
Recoveries	6		—		1		2		9
Provision for loan and lease losses	24		(5)		4		3		26
Balance as of June 30, 2025	$	347	$	213	$	233	$	21	$	814

Reserve for remaining unfunded commitments:
Balance as of April 1, 2025	$	63	$	9	$	11	$	—	$	83
Provision for remaining unfunded commitments	5		1		(2)		—		4
Balance as of June 30, 2025	68		10		9		—		87
Allowance for credit losses as of June 30, 2025	$	415	$	223	$	242	$	21	$	901

	Three Months Ended June 30, 2024
Allowance for loan and lease losses:
Balance as of April 1, 2024	$	348	$	181	$	231	$	27	$	787
Charge-offs	(24)		(19)		(1)		(5)		(49)
Recoveries	12		—		2		1		15
Provision for loan and lease losses	8		59		(1)		2		68
Balance as of June 30, 2024	$	344	$	221	$	231	$	25	$	821

Reserve for remaining unfunded commitments:
Balance as of April 1, 2024	$	49	$	18	$	12	$	—	$	79
Provision for remaining unfunded commitments	(5)		(8)		—		—		(13)
Balance as of June 30, 2024	44		10		12		—		66
Allowance for credit losses as of June 30, 2024	$	388	$	231	$	243	$	25	$	887


			28			2Q25 FORM 10-Q REPORT


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


(Dollars in millions)	Commercial, Financial, and Industrial		Commercial Real Estate		Consumer Real Estate		Credit Card and Other		Total
	Six Months Ended June 30, 2025
Allowance for loan and lease losses:
Balance as of January 1, 2025	$	345	$	227	$	221	$	22	$	815
Charge-offs	(62)		(10)		(2)		(10)		(84)
Recoveries	12		3		3		3		21
Provision for loan and lease losses	52		(7)		11		6		62
Balance as of June 30, 2025	$	347	$	213	$	233	$	21	$	814

Reserve for remaining unfunded commitments:
Balance as of January 1, 2025	$	57	$	11	$	11	$	—	$	79
Provision for remaining unfunded commitments	11		(1)		(2)		—		8
Balance as of June 30, 2025	68		10		9		—		87
Allowance for credit losses as of June 30, 2025	$	415	$	223	$	242	$	21	$	901

	Six Months Ended June 30, 2024
Allowance for loan and lease losses:
Balance as of January 1, 2024	$	339	$	172	$	233	$	29	$	773
Charge-offs	(52)		(32)		(1)		(10)		(95)
Recoveries	14		—		4		3		21
Provision for loan and lease losses	43		81		(5)		3		122
Balance as of June 30, 2024	$	344	$	221	$	231	$	25	$	821

Reserve for remaining unfunded commitments:
Balance as of January 1, 2024	$	49	$	22	$	12	$	—	$	83
Provision for remaining unfunded commitments	(5)		(12)		—		—		(17)
Balance as of June 30, 2024	44		10		12		—		66
Allowance for credit losses as of June 30, 2024	$	388	$	231	$	243	$	25	$	887

The following table presents gross charge-offs by year of origination for the six months ended June 30, 2025 and 2024.


GROSS CHARGE-OFFS

	Six Months Ended June 30, 2025
(Dollars in millions)	2025		2024		2023		2022		2021		Prior to 2021		Revolving Loans		Total
C&I	$	3	$	3	$	1	$	7	$	19	$	26	$	3	$	62
CRE	—		—		—		5		—		5		—		10
Consumer Real Estate	—		—		1		1		—		—		—		2
Credit Card and Other	3		—		—		1		2		1		3		10
Total	$	6	$	3	$	2	$	14	$	21	$	32	$	6	$	84



	Six Months Ended June 30, 2024
(Dollars in millions)	2024		2023		2022		2021		2020		Prior to 2020		Revolving Loans		Total
C&I	$	—	$	9	$	11	$	20	$	1	$	9	$	2	$	52
CRE	—		—		—		—		9		23		—		32
Consumer Real Estate	—		—		—		—		—		1		—		1
Credit Card and Other	4		—		1		—		—		1		4		10
Total	$	4	$	9	$	12	$	20	$	10	$	34	$	6	$	95


			29			2Q25 FORM 10-Q REPORT


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

Note 5—Mortgage Banking Activity

FHN originates mortgage loans for sale into the secondary market. These loans primarily consist of residential first lien mortgages that conform to standards established by GSEs that are major investors in U.S. home mortgages, but may also consist of junior lien and jumbo loans secured by residential property. These loans are primarily sold to private companies that are unaffiliated with the GSEs on a servicing-released basis. Gains and losses on these mortgage loans are included in mortgage banking income on the Consolidated Statements of Income.

At June 30, 2025, FHN had approximately $28 million of loans that remained from pre-2009 mortgage business

operations of legacy First Horizon. Activity related to the pre-2009 mortgage loans was primarily limited to payments and write-offs in 2025 and 2024, with no new originations or loan sales, and only an insignificant amount of repurchases. These loans are excluded from the disclosure below.

The following table summarizes activity related to residential mortgage loans held for sale as of and for the six months ended June 30, 2025 and the year ended December 31, 2024.


MORTGAGE LOAN ACTIVITY
(Dollars in millions)	June 30, 2025		December 31, 2024
Balance at beginning of period	$	81	$	62

Originations and purchases	542		951
Sales, net of gains	(513)		(932)
Mortgage loans transferred from (to) held for investment	(1)		—
Balance at end of period	$	109	$	81

Mortgage Servicing Rights

FHN records mortgage servicing rights at the lower of cost or market value and amortizes them over the remaining servicing life of the loans, with consideration given to prepayment assumptions.

Mortgage servicing rights are included in other assets on the Consolidated Balance Sheets. The following table presents the carrying values of mortgage servicing rights as of June 30, 2025 and December 31, 2024.


MORTGAGE SERVICING RIGHTS
	June 30, 2025						December 31, 2024
(Dollars in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Mortgage servicing rights	$	34	$	(10)	$	24		$	30	$	(9)	$	21

In addition, there was an insignificant amount of non-mortgage and commercial servicing rights as of June 30, 2025 and December 31, 2024. Total mortgage servicing fees included in mortgage banking income were $2 million for the six months ended June 30, 2025 and 2024.


			30			2Q25 FORM 10-Q REPORT


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

Note 6—Goodwill and Other Intangible Assets

Goodwill

The following is a summary of goodwill by reportable segment included in the Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024.


GOODWILL
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Total
December 31, 2023 (a)	$	1,217	$	293	$	1,510
Additions	—		—		—

December 31, 2024	$	1,217	$	293	$	1,510
Additions	—		—		—

June 30, 2025	$	1,217	$	293	$	1,510

(a)FHN reorganized its management reporting structure and reallocated goodwill in its segments and reporting units during the fourth quarter of 2024. Prior periods have been revised to reflect this reallocation.

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

Accounting estimates and assumptions were made about FHN's future performance and cash flows, as well as other prevailing market factors (e.g., interest rates, economic

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

Other intangible assets

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


OTHER INTANGIBLE ASSETS
	June 30, 2025						December 31, 2024
(Dollars in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Core deposit intangibles	$	356	$	(250)	$	106	$	356	$	(233)	$	123
Client relationships	32		(19)		13		32		(18)		14
Other (a)	11		(7)		4		27		(21)		6
Total	$	399	$	(276)	$	123	$	415	$	(272)	$	143

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


			31			2Q25 FORM 10-Q REPORT


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

Note 7—Preferred Stock

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


PREFERRED STOCK
(Dollars in millions)									June 30, 2025		December 31, 2024
	Issuance Date	Earliest Redemption Date (a)	Annual Dividend Rate		Dividend Payments	Shares Outstanding	Liquidation Amount		Carrying Amount		Carrying Amount

Series B	7/2/2020	8/1/2025	6.625%	(b)	Semi-annually	8,000	$	80	$	77	$	77
Series C	7/2/2020	5/1/2026	6.600%	(c)	Quarterly	5,750	58		59		59

Series E	5/28/2020	10/10/2025	6.500%		Quarterly	1,500	150		145		145
Series F	5/3/2021	7/10/2026	4.700%		Quarterly	1,500	150		145		145

						16,750	$	438	$	426	$	426

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

(b) On July 2, 2025, FHN provided notice of its intent to redeem all outstanding shares of its Series B Preferred Stock on August 1, 2025. The fixed dividend rate was set to convert to three-month CME Term SOFR plus 4.52361% (0.26161% plus 4.262%) on August 1, 2025. See Note 17 — Subsequent Events for more information.

Subsidiary Preferred Stock

First Horizon Bank has issued 300,000 shares of Class A Non-Cumulative Perpetual Preferred Stock (Class A Preferred Stock) with a liquidation preference of $1,000 per share. Dividends on the Class A Preferred Stock, if declared, accrue and are payable each quarter, in arrears, at a floating rate equal to the greater of three-month CME Term SOFR plus 1.11161% (0.26161% plus 0.85%) or 3.75% per annum. These securities qualify fully as Tier 1 capital for both First Horizon Bank and FHN. On June 30, 2025 and December 31, 2024, $295 million of Class A Preferred Stock was recognized as noncontrolling interest on the Consolidated Balance Sheets.

FT Real Estate Securities Company, Inc. ("FTRESC"), an indirect subsidiary of FHN, has issued 50 shares of 9.50% Cumulative Preferred Stock, Class B (Class B Preferred Shares), with a liquidation preference of $1 million per share; of those shares, 47 were issued to nonaffiliates. FTRESC is a real estate investment trust established for the purpose of acquiring, holding, and managing real estate mortgage assets. Dividends on the Class B Preferred Shares are cumulative and are payable semi-annually. At June 30, 2025 and December 31, 2024, the Class B Preferred Shares qualified as Tier 2 regulatory capital. For all periods presented, these securities are presented in the Consolidated Balance Sheets as term borrowings.

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


			32			2Q25 FORM 10-Q REPORT


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

Note 8—Components of Other Comprehensive Income (Loss)

The following tables provide the changes in accumulated other comprehensive income (loss) by component, net of tax, for the three and six months ended June 30, 2025 and 2024:

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)


(Dollars in millions)	Securities AFS		Cash Flow Hedges		Pension and Post-retirement Plans		Total
Balance as of April 1, 2025	$	(666)	$	(67)	$	(250)	$	(983)
Net unrealized gains (losses)	53		7		—		60
Amounts reclassified from AOCI	—		9		2		11
Other comprehensive income (loss)	53		16		2		71
Balance as of June 30, 2025	$	(613)	$	(51)	$	(248)	$	(912)

(Dollars in millions)	Securities AFS		Cash Flow Hedges		Pension and Post-retirement Plans		Total
Balance as of January 1, 2025	$	(782)	$	(94)	$	(252)	$	(1,128)
Net unrealized gains (losses)	169		25		—		194
Amounts reclassified from AOCI	—		18		4		22
Other comprehensive income (loss)	169		43		4		216
Balance as of June 30, 2025	$	(613)	$	(51)	$	(248)	$	(912)


(Dollars in millions)	Securities AFS		Cash Flow Hedges		Pension and Post-retirement Plans		Total
Balance as of April 1, 2024	$	(891)	$	(110)	$	(270)	$	(1,271)
Net unrealized gains (losses)	(10)		(15)		—		(25)
Amounts reclassified from AOCI	—		13		2		15
Other comprehensive income (loss)	(10)		(2)		2		(10)
Balance as of June 30, 2024	$	(901)	$	(112)	$	(268)	$	(1,281)


(Dollars in millions)	Securities AFS		Cash Flow Hedges		Pension and Post-retirement Plans		Total
Balance as of January 1, 2024	$	(836)	$	(80)	$	(272)	$	(1,188)
Net unrealized gains (losses)	(65)		(58)		—		(123)
Amounts reclassified from AOCI	—		26		4		30
Other comprehensive income (loss)	(65)		(32)		4		(93)
Balance as of June 30, 2024	$	(901)	$	(112)	$	(268)	$	(1,281)


			33			2Q25 FORM 10-Q REPORT


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

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


RECLASSIFICATIONS FROM AOCI
(Dollars in millions)	Three Months Ended June 30,				Six Months Ended June 30,
Details about AOCI	2025		2024			2025		2024		Affected line item in the statement where net income is presented




Cash Flow Hedges:
Realized (gains) losses on cash flow hedges	$	12	$	17		$	24	$	34	Interest and fees on loans and leases
Tax expense (benefit)	(3)		(4)			(6)		(8)		Income tax expense
	9		13			18		26
Pension and Postretirement Plans:
Amortization of prior service cost and net actuarial (gain) loss	$	3	$	3		$	6	$	6	Other expense
Tax expense (benefit)	(1)		(1)			(2)		(2)		Income tax expense
	2		2			4		4
Total reclassification from AOCI	$	11	$	15		$	22	$	30


			34			2Q25 FORM 10-Q REPORT


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

Note 9—Earnings Per Share

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


EARNINGS PER SHARE COMPUTATIONS
	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions, except per share data; shares in thousands)	2025		2024			2025		2024
Net income	$	245	$	204		$	467	$	401
Net income attributable to noncontrolling interest	4		5			8		10
Net income attributable to controlling interest	241		199			459		391
Preferred stock dividends	8		15			13		23
Net income available to common shareholders	$	233	$	184		$	446	$	368

Weighted average common shares outstanding—basic	508,125		543,981			512,596		549,479
Effect of dilutive restricted stock, performance equity awards and options	5,481		3,112			6,105		3,060

Weighted average common shares outstanding—diluted	513,606		547,093			518,701		552,539

Basic earnings per common share	$	0.46	$	0.34		$	0.87	$	0.67
Diluted earnings per common share	$	0.45	$	0.34		$	0.86	$	0.67

The following table presents average outstanding options and other equity awards that were excluded from the calculation of diluted earnings per share because they

were either anti-dilutive (the exercise price was higher than the weighted-average market price for the period) or the performance conditions have not been met.


ANTI-DILUTIVE EQUITY AWARDS
	Three Months Ended June 30,				Six Months Ended June 30,
(Shares in thousands)	2025		2024		2025		2024
Stock options excluded from the calculation of diluted EPS	—		1,388		—		1,458
Weighted average exercise price of stock options excluded from the calculation of diluted EPS	$	—	$	16.48	$	—	$	16.59
Other equity awards excluded from the calculation of diluted EPS	3,522		6,828		2,752		6,819


			35			2Q25 FORM 10-Q REPORT


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

Note 10—Contingencies and Other Disclosures

Contingencies

Contingent Liabilities Overview

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

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

Material Loss Contingency Matters

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

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

FHN reassesses the liability for litigation matters each quarter as the matters progress. At June 30, 2025, the aggregate amount of liabilities established for all such loss contingency matters was $3 million. These liabilities are separate from those discussed under the heading Mortgage Loan Repurchase and Foreclosure Liability below.

In each material loss contingency matter, except as otherwise noted, there is more than a remote chance that any of the following outcomes will occur: the plaintiff will substantially prevail; the defense will substantially prevail; the plaintiff will prevail in part; or the matter will be settled by the parties. At June 30, 2025, FHN estimates that for all material loss contingency matters, estimable reasonably possible losses in future periods in excess of currently established liabilities could aggregate in a range from zero to less than $1 million.

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

Mortgage Loan Repurchase and Foreclosure Liability

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


			36			2Q25 FORM 10-Q REPORT


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

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

Based on currently available information and experience to date, FHN has evaluated its loan repurchase, make-whole, foreclosure, and certain related exposures and has accrued for losses of $15 million as of both June 30, 2025 and December 31, 2024. Accrued liabilities for FHN’s estimate of these obligations are reflected in other liabilities on the Consolidated Balance Sheets. Charges/expense reversals to increase/decrease the liability are included within other income on the Consolidated Statements of Income. The estimates are based upon currently available information and fact patterns that exist as of each balance sheet date and could be subject to

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

Other Disclosures

Indemnification Agreements and Guarantees

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

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


			37			2Q25 FORM 10-Q REPORT


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

Note 11—Retirement Plans

FHN sponsors a noncontributory, qualified defined benefit pension plan to associates hired or re-hired on or before September 1, 2007. Pension benefits are based on years of service, average compensation near retirement or other termination, and estimated social security benefits at age 65. Benefits under the plan are “frozen” so that years of service and compensation changes after 2012 do not affect the benefit owed. Minimum contributions are based upon actuarially determined amounts necessary to fund the total benefit obligation. Decisions to contribute to the plan are based upon pension funding requirements under the Pension Protection Act, the maximum amount deductible under the Internal Revenue Code, the actual performance of plan assets, and trends in the regulatory environment. FHN made no contributions to the qualified pension plan in 2024. Management does not currently anticipate that FHN will make a contribution to the qualified pension plan in 2025.

FHN also maintains non-qualified plans, including a supplemental retirement plan that covers certain associates whose benefits under the qualified pension plan have been limited by tax rules. These other non-qualified plans are unfunded, and contributions to these plans cover all benefits paid under the non-qualified plans. Payments made under the non-qualified plans were $4 million for 2024. FHN anticipates making benefit payments under the non-qualified plans of $5 million in 2025.

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

For more information on FHN's pension plan and other postretirement benefit plans, see Note 17 - Retirement Plans and Other Employee Benefits in FHN's 2024 Annual Report on Form 10-K.

The components of net periodic benefit cost for the three and six months ended June 30 were as follows.


COMPONENTS OF NET PERIODIC BENEFIT COST

	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2025		2024		2025		2024
Components of net periodic benefit cost

Interest cost	$	8	$	9	$	16	$	17
Expected return on plan assets	(8)		(8)		(16)		(16)
Amortization of unrecognized:

Actuarial (gain) loss	3		3		6		6

Net periodic benefit cost	$	3	$	4	$	6	$	7


			38			2Q25 FORM 10-Q REPORT


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

Note 12—Business Segment Information

During fourth quarter 2024, FHN reorganized its internal management structure and, accordingly, reclassified its reportable business segments. Prior to the 2024 reclassification, FHN's reportable segments were: (1) Regional Banking, (2) Specialty Banking, and (3) Corporate. As a result of the 2024 reclassification, FHN revised its reportable segments as described below. Segment information for periods prior to fourth quarter 2024 has been reclassified to conform to the current period presentation.

FHN's operating segments are composed of the following:

•Commercial, Consumer & Wealth segment offers financial products and services, including traditional lending and deposit taking, to commercial and consumer clients primarily in the southern U.S. and other selected markets. Commercial, Consumer & Wealth also consists of lines of business that deliver product offerings and services with niche industry knowledge including asset-based lending, commercial real estate, equipment finance/leasing, energy, international banking, healthcare, and transportation and logistics. Additionally, Commercial, Consumer & Wealth provides investment, wealth management, financial planning, trust and asset management services for consumer clients as well as delivering treasury management solutions, loan syndications, and corporate banking services.

•Wholesale segment consists of lines of business that deliver product offerings and services with differentiated industry knowledge. Wholesale’s lines of business include mortgage warehouse lending, franchise finance, correspondent banking, and mortgage. Additionally, Wholesale has a line of business focused on fixed income securities sales, trading, underwriting, and strategies for institutional clients in the U.S. and abroad, as well as loan sales, portfolio advisory services, and derivative sales.

•Corporate segment consists primarily of corporate support functions including risk management, audit, accounting, finance, executive office, and corporate communications. Shared support services such as human resources, marketing, properties, technology, credit risk and bank operations are allocated to the activities of Commercial, Consumer & Wealth, Wholesale, and Corporate. Additionally, the Corporate segment includes centralized management of capital and funding to support the business activities of the company including management of balance sheet funding, liquidity, and capital management and allocation. The Corporate segment also includes the revenue and expense associated with run-off businesses such as pre-2009 mortgage banking

elements, run-off consumer and trust preferred loan portfolios, and other exited businesses.

Basis of Presentation

Results of individual segments are presented based on FHN's internal management reporting practices. There is no comprehensive, authoritative body of guidance for management accounting equivalent to GAAP; therefore, the financial results of FHN's individual segments are not necessarily comparable with similar information for any other company.

Periodically, FHN adapts its segments to reflect managerial or strategic changes. FHN may also modify its methodology of allocating expenses and equity among segments, which could change historical segment results. Business segment revenue, expense, asset, and equity levels reflect those which are specifically identifiable, or which are allocated based on an internal allocation method. Because the allocations are based on internally developed assignments and allocations, to an extent they are subjective. Generally, all assignments and allocations have been consistently applied for all periods presented.

Funds Transfer Pricing

Net interest income in segment results reflects FHN's internal funds transfer pricing methodology which is designed to consider interest rate and liquidity risks. Under this methodology, assets receive a funding charge while liabilities and capital receive a funding credit based on market interest rates, product characteristics, and other factors.

The transfer pricing framework considers the application of funding curves and methodologies consistently across the balance sheet. A residual gain or loss from funds transfer pricing operations is retained within Corporate.

Segment Allocations

Financial results are presented, to the extent practicable, as if each segment operated on a stand-alone basis and include expense allocations for corporate overhead services used by the segments.

FHN has allocated the ALLL and the reserve for unfunded lending commitments based on the loan exposures within each segment’s portfolio.

The Company's Chief Operating Decision Maker ("CODM") is comprised of the chief executive officer and segment leadership.

For both the Commercial, Consumer & Wealth and Wholesale segments, the CODM uses both Pre-Provision Net Revenue ("PPNR") and Pre-Tax Net Income ("PTNI") to evaluate performance and allocate resources. The measure of PPNR focuses on the Company's primary businesses principally by excluding the volatility


			39			2Q25 FORM 10-Q REPORT


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

associated with credit risk estimates due to the CECL life-of-loan estimation requirement, which is highly sensitive to changes in economic forecasts. PPNR also represents a metric utilized by regulatory agencies in stress testing assessments. PTNI is used to incorporate credit risk estimates for a holistic view of pre-tax results in the evaluation of segment performance.

For the Corporate segment, the CODM uses after-tax income to evaluate performance and allocate resources.

After-tax income is most relevant for the Corporate segment because of minimal credit risk and inclusion of the impacts from all consolidated tax matters, which are not allocated, in addition to all other methodologies affecting pre-tax income among reported segments (e.g., FTP and cost allocations).

The following tables present financial information for each reportable business segment for the three and six months ended June 30, 2025 and 2024.


SEGMENT FINANCIAL INFORMATION
	Three Months Ended June 30, 2025
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Interest income	$	826	$	140	$	78	$	1,044
Interest expense	295		26		82		403
Funds transfer pricing	102		(56)		(46)		—
Net interest income (expense)	633		58		(50)		641
Noninterest income	113		53		23		189
Total revenues	746		111		(27)		830
Noninterest expense (a)	354		76		61		491
Pre-provision net revenue (b)	392		35		(88)		339
Provision for credit losses	13		6		11		30
Income (loss) before income taxes	379		29		(99)		309
Income tax expense (benefit)	90		7		(33)		64
Net income (loss)	$	289	$	22	$	(66)	$	245
Average assets	$	58,737	$	9,308	$	13,913	$	81,958
Depreciation and amortization	7		2		11		20
Expenditures for long-lived assets	5		—		2		7


	Three Months Ended June 30, 2024
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Interest income	$	894	$	131	$	68	$	1,093
Interest expense	352		34		78		464
Funds transfer pricing	95		(50)		(45)		—
Net interest income (expense)	637		47		(55)		629
Noninterest income	115		53		18		186
Total revenues	752		100		(37)		815
Noninterest expense (a)	357		73		70		500
Pre-provision net revenue (b)	395		27		(107)		315
Provision for credit losses	56		1		(2)		55
Income (loss) before income taxes	339		26		(105)		260
Income tax expense (benefit)	80		6		(30)		56
Net income (loss)	$	259	$	20	$	(75)	$	204
Average assets	$	59,684	$	8,021	$	14,016	$	81,721
Depreciation and amortization	3		2		15		20
Expenditures for long-lived assets	8		—		4		12

(a)2025 includes an FDIC special assessment expense credit of $1 million and a $4 million expense credit related to an accrual release in deferred compensation in the Corporate segment. 2024 includes $3 million of restructuring costs and an FDIC special assessment of $2 million in the Corporate segment.

(b)Pre-provision net revenue is a non-GAAP measure and is reconciled to income (loss) before income taxes (GAAP) in this table.


			40			2Q25 FORM 10-Q REPORT


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



	Six Months Ended June 30, 2025
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Interest income	$	1,639	$	264	$	155	$	2,058
Interest expense	585		55		146		786
Funds transfer pricing	204		(103)		(101)		—
Net interest income (expense)	1,258		106		(92)		1,272
Noninterest income	223		113		34		370
Total revenues	1,481		219		(58)		1,642
Noninterest expense (a)	698		151		129		978
Pre-provision net revenue (b)	783		68		(187)		664
Provision for credit losses	51		9		10		70
Income (loss) before income taxes	732		59		(197)		594
Income tax expense (benefit)	174		14		(61)		127
Net income (loss)	$	558	$	45	$	(136)	$	467
Average assets	$	58,727	$	8,903	$	13,834	$	81,464
Depreciation and amortization	17		4		20		41
Expenditures for long-lived assets	10		1		5		16


	Six Months Ended June 30, 2024
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Interest income	$	1,776	$	246	$	143	$	2,165
Interest expense	703		65		144		912
Funds transfer pricing	190		(93)		(97)		—
Net interest income (expense)	1,263		88		(98)		1,253
Noninterest income	225		115		41		381
Total revenues	1,488		203		(57)		1,634
Noninterest expense (a)	704		148		163		1,015
Pre-provision net revenue (b)	784		55		(220)		619
Provision for credit losses	100		8		(3)		105
Income (loss) before income taxes	684		47		(217)		514
Income tax expense (benefit)	161		11		(59)		113
Net income (loss)	$	523	$	36	$	(158)	$	401
Average assets	$	59,516	$	7,584	$	14,382	$	81,482
Depreciation and amortization	18		4		29		51
Expenditures for long-lived assets	11		—		10		21

(a)2025 includes a $4 million expense credit related to an accrual release in deferred compensation, and $5 million in derivative valuation adjustments related to prior Visa Class B share sales in the Corporate segment. 2024 includes $9 million in restructuring costs and an FDIC special assessment of $12 million in the Corporate segment.

(b)Pre-provision net revenue is a non-GAAP measure and is reconciled to income (loss) before income taxes (GAAP) in this table.


			41			2Q25 FORM 10-Q REPORT


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

The following tables reflect a disaggregation of FHN’s noninterest income by major product line and reportable segment for the three and six months ended June 30, 2025 and 2024.


NONINTEREST INCOME DETAIL BY SEGMENT
	Three Months Ended June 30, 2025
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest income:
Fixed income (a)	$	—	$	42	$	—	$	42
Deposit transactions and cash management	39		—		2		41
Brokerage, management fees and commissions	26		—		—		26
Card and digital banking fees	16		—		3		19
Other service charges and fees	13		1		—		14
Trust services and investment management	12		—		1		13
Mortgage banking income	—		10		—		10



Other income (c)	7		—		17		24
Total noninterest income	$	113	$	53	$	23	$	189


	Three Months Ended June 30, 2024
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest income:
Fixed income (a)	$	—	$	40	$	—	$	40
Deposit transactions and cash management	41		1		2		44
Brokerage, management fees and commissions	25		—		—		25
Card and digital banking fees	17		—		3		20
Other service charges and fees	12		2		—		14
Trust services and investment management	12		—		—		12
Mortgage banking income	—		10		—		10


Securities gains (losses), net (b)	—		—		1		1

Other income (c)	8		—		12		20
Total noninterest income	$	115	$	53	$	18	$	186

(a)2025 and 2024 each include $9 million of underwriting, portfolio advisory, and other noninterest income in scope of ASC 606, "Revenue from Contracts with Customers."

(b)Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile total noninterest income.

(c)Includes letter of credit fees and insurance commissions in scope of ASC 606.


			42			2Q25 FORM 10-Q REPORT


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



	Six Months Ended June 30, 2025
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest income:
Fixed income (a)	$	—	$	91	$	—	$	91
Deposit transactions and cash management	76		1		4		81
Brokerage, management fees and commissions	52		—		—		52
Card and digital banking fees	32		—		5		37
Other service charges and fees	25		1		—		26
Trust services and investment management	24		—		1		25
Mortgage banking income	—		18		—		18



Other income (c)	14		2		24		40
Total noninterest income	$	223	$	113	$	34	$	370


	Six Months Ended June 30, 2024
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest income:
Fixed income (a)	$	—	$	92	$	—	$	92
Deposit transactions and cash management	82		2		4		88
Brokerage, management fees and commissions	49		—		—		49
Card and digital banking fees	33		—		5		38
Other service charges and fees	24		2		1		27
Trust services and investment management	23		—		1		24
Mortgage banking income	—		18		1		19



Securities gains (losses), net (b)	—		—		1		1
Other income (c)	14		1		28		43
Total noninterest income	$	225	$	115	$	41	$	381

(a)2025 and 2024 include $18 million and $20 million, respectively, of underwriting, portfolio advisory, and other noninterest income in scope of ASC 606, "Revenue from Contracts with Customers."

(b)Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile total noninterest income.

(c)Includes letter of credit fees and insurance commissions in scope of ASC 606.


			43			2Q25 FORM 10-Q REPORT


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

The following tables present a disaggregation of FHN's noninterest expense by major product line and reportable segment for the three and six months ended June 30, 2025 and 2024.


NONINTEREST EXPENSE DETAIL BY SEGMENT
	Three Months Ended June 30, 2025
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest expense:
Personnel expense	$	133	$	52	$	97	$	282
Net occupancy expense	20		2		12		34
Computer software	8		2		24		34
Operations services	4		6		13		23
Legal and professional fees	3		1		13		17
Deposit insurance expense	—		—		12		12
Advertising and public relations	2		—		12		14

Equipment expense	3		—		8		11
Amortization of intangible assets	9		—		1		10
Contract employment and outsourcing	1		1		6		8
Communications and delivery	2		1		5		8

Other expense	15		5		18		38
Cost allocations	154		6		(160)		—
Total noninterest expense	$	354	$	76	$	61	$	491


	Three Months Ended June 30, 2024
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest expense:
Personnel expense	$	133	$	48	$	98	$	279
Net occupancy expense	19		2		10		31
Computer software	8		1		20		29
Operations services	4		6		13		23
Legal and professional fees	2		1		15		18
Deposit insurance expense	—		—		16		16
Advertising and public relations	2		—		12		14

Equipment expense	3		—		8		11
Amortization of intangible assets	10		—		1		11
Contract employment and outsourcing	1		1		12		14
Communications and delivery	3		1		4		8

Other expense	22		6		18		46
Cost allocations	150		7		(157)		—
Total noninterest expense	$	357	$	73	$	70	$	500


			44			2Q25 FORM 10-Q REPORT


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


	Six Months Ended June 30, 2025
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest expense:
Personnel expense	$	268	$	103	$	190	$	561
Net occupancy expense	41		4		24		69
Computer software	15		3		48		66
Operations services	8		11		27		46
Legal and professional fees	6		2		23		31
Deposit insurance expense	—		—		25		25
Advertising and public relations	3		—		21		24

Equipment expense	5		1		16		22
Amortization of intangible assets	17		1		2		20
Contract employment and outsourcing	2		2		12		16
Communications and delivery	5		2		9		16

Other expense	32		9		41		82
Cost allocations	296		13		(309)		—
Total noninterest expense	$	698	$	151	$	129	$	978


	Six Months Ended June 30, 2024
(Dollars in millions)	Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest expense:
Personnel expense	$	272	$	98	$	210	$	580
Net occupancy expense	37		4		21		62
Computer software	16		3		40		59
Operations services	9		11		25		45
Legal and professional fees	5		1		27		33
Deposit insurance expense	—		—		40		40
Advertising and public relations	4		—		18		22

Equipment expense	6		1		15		22
Amortization of intangible assets	19		1		2		22
Contract employment and outsourcing	2		2		24		28
Communications and delivery	5		2		9		16

Other expense	43		10		33		86
Cost allocations	286		15		(301)		—
Total noninterest expense	$	704	$	148	$	163	$	1,015


			45			2Q25 FORM 10-Q REPORT


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

Note 13—Variable Interest Entities

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

Consolidated Variable Interest Entities

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

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

The following table summarizes the carrying value of assets and liabilities associated with rabbi trusts used for deferred compensation plans which are consolidated by FHN as of June 30, 2025 and December 31, 2024.


CONSOLIDATED VIEs
(Dollars in millions)	June 30, 2025		December 31, 2024
Assets:




Other assets	$	200	$	195


Liabilities:

Other liabilities	$	171	$	165

Nonconsolidated Variable Interest Entities

Tax Credit Investments

Through designated wholly-owned subsidiaries, First Horizon Bank makes equity investments as a limited partner in various partnerships that sponsor affordable housing projects utilizing the LIHTC. Through designated subsidiaries, First Horizon Bank periodically makes equity investments as a non-managing member in various LLCs that sponsor community development projects utilizing the NMTC. First Horizon Bank also makes equity investments as a limited partner or non-managing member in entities that receive historic tax credits. The purpose of these investments is to achieve a satisfactory return on capital and to support FHN’s community reinvestment initiatives. These entities are considered VIEs as First Horizon Bank's subsidiaries represent the

holders of the equity investment at risk, but do not have the ability to direct the activities that most significantly affect the performance of the entities. FHN is therefore not the primary beneficiary of any of these entities. Accordingly, FHN does not consolidate these VIEs and accounts for these investments in other assets on the Consolidated Balance Sheets.

FHN accounts for qualifying LIHTC investments under the PAM. Effective for periods after 2023, all LIHTC investments qualify for the PAM. Commencing in 2024, FHN determined that its equity investments in NMTC and historic tax credit entities qualify for the PAM and made the election to apply the PAM for these programs. Expenses associated with non-qualifying LIHTC investments were not significant for the three and six months ended June 30, 2025 and 2024.


			46			2Q25 FORM 10-Q REPORT


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

The following table summarizes the impact to income tax expense on the Consolidated Statements of Income for the three and six months ended June 30, 2025 and 2024 for investments accounted for under the PAM. The impact of these investments is included in other operating activities, net in the Consolidated Statements of Cash Flows.


TAX CREDIT IMPACTS ON TAX EXPENSE
	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2025		2024		2025		2024
Income tax expense (benefit):
Amortization of qualifying investments	$	17	$	15	$	35	$	30
Tax credits	(21)		(17)		(40)		(33)
Other tax benefits related to qualifying investments	(3)		(3)		(5)		(5)

Small Issuer Trust Preferred Holdings

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

On-Balance Sheet Trust Preferred Securitization

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

Holdings in Agency Mortgage-Backed Securities

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

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

Commercial Loan Modifications to Borrowers Experiencing Financial Difficulty

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

Proprietary Trust Preferred Issuances

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


			47			2Q25 FORM 10-Q REPORT


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

primary beneficiary because its ownership interests in the trusts are not considered variable interests as they are not considered “at risk”. Consequently, none of the trusts are consolidated by FHN.

The following tables summarize FHN’s nonconsolidated VIEs as of June 30, 2025 and December 31, 2024.


NONCONSOLIDATED VIEs AT JUNE 30, 2025
(Dollars in millions)	Maximum Loss Exposure		Liability Recognized		Classification
Type:
Low income housing partnerships	$	697	$	282	(a)
Other tax credit investments (b)	88		73		Other assets
Small issuer trust preferred holdings (c)	165		—		Loans and leases
On-balance sheet trust preferred securitization	25		89		(d)

Holdings of agency mortgage-backed securities (c)	8,191		—		(e)
Commercial loan modifications to borrowers experiencing financial difficulty (f)	557		—		Loans and leases

Proprietary trust preferred issuances (g)	—		167		Term borrowings

(a)Maximum loss exposure represents $415 million of current investments and $282 million of accrued contractual funding commitments. Accrued funding commitments represent unconditional contractual obligations for future funding events and are also recognized in other liabilities. FHN currently expects to be required to fund these accrued commitments by the end of 2026.

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

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

(d)Includes $113 million classified as loans and leases and $2 million classified as trading securities, which are offset by $89 million classified as term borrowings.

(e)Includes $268 million classified as trading securities, $1.2 billion classified as securities held to maturity, and $6.7 billion classified as securities available for sale.

(f)Maximum loss exposure represents $557 million of current receivables with $1 million of additional contractual funding commitments on loans related to commercial loan modifications to borrowers experiencing financial difficulty.

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


NONCONSOLIDATED VIEs AT DECEMBER 31, 2024
(Dollars in millions)	Maximum Loss Exposure		Liability Recognized		Classification
Type:
Low income housing partnerships	$	617	$	222	(a)
Other tax credit investments (b)	90		73		Other assets
Small issuer trust preferred holdings (c)	171		—		Loans and leases
On-balance sheet trust preferred securitization	26		88		(d)

Holdings of agency mortgage-backed securities (c)	8,017		—		(e)
Commercial loan modifications to borrowers experiencing financial difficulty (f)	381		—		Loans and leases

Proprietary trust preferred issuances (g)	—		167		Term borrowings

(a)Maximum loss exposure represents $395 million of current investments and $222 million of accrued contractual funding commitments. Accrued funding commitments represent unconditional contractual obligations for future funding events and are also recognized in other liabilities. FHN currently expects to be required to fund these accrued commitments by the end of 2026.

(b)Maximum loss exposure represents current investments.

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

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

(e)Includes $278 million classified as trading securities, $1.3 billion classified as securities held to maturity, and $6.5 billion classified as securities available for sale.

(f)Maximum loss exposure represents $381 million of current receivables with no additional contractual funding commitments on loans related to commercial loan modifications to borrowers experiencing financial difficulty.

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


			48			2Q25 FORM 10-Q REPORT


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

Note 14—Derivatives

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

Credit risk represents the potential loss that may occur if a party to a transaction fails to perform according to the terms of the contract. The measure of credit exposure is the replacement cost of contracts with a positive fair value. FHN manages credit risk by entering into financial instrument transactions through national exchanges, primary dealers or approved counterparties, and by using mutual margining and master netting agreements whenever possible to limit potential exposure. FHN also maintains collateral posting requirements with certain counterparties to limit credit risk. Daily margin posted or received with central clearinghouses is considered a legal settlement of the related derivative contracts which results in a net presentation for each contract in the Consolidated Balance Sheets. Treatment of daily margin as a settlement has no effect on hedge accounting or gains/losses for the applicable derivative contracts. On June 30, 2025 and December 31, 2024, respectively, FHN had $323 million and $541 million of cash receivables and $18 million and $25 million of cash payables related to collateral posting under master netting arrangements, inclusive of collateral posted related to contracts with adjustable collateral posting thresholds and over-collateralized positions, with derivative counterparties. With exchange-traded contracts, the credit risk is limited to the clearinghouse used. For non-exchange traded instruments, credit risk may occur when there is a gain in the fair value of the financial instrument and the counterparty fails to perform according to the terms of the contract and/or when the collateral proves to be of insufficient value. See additional discussion regarding master netting agreements and collateral posting requirements later in this note under the heading “Master Netting and Similar Agreements.”

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

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

Derivative Instruments

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

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

Trading Activities

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


			49			2Q25 FORM 10-Q REPORT


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

revenues were $34 million and $31 million for the three months ended June 30, 2025 and 2024, and $70 million and $75 million for the six months ended June 30, 2025 and 2024, respectively. Trading revenues are inclusive of both derivative and non-derivative financial instruments and are included in fixed income on the Consolidated Statements of Income.

The following table summarizes derivatives associated with FHNF's trading activities as of June 30, 2025 and December 31, 2024.


DERIVATIVES ASSOCIATED WITH TRADING
	June 30, 2025
(Dollars in millions)	Notional		Assets		Liabilities
Customer interest rate contracts	$	4,264	$	24	$	122
Offsetting upstream interest rate contracts	4,442		84		24

Forwards and futures purchased	1,660		10		—
Forwards and futures sold	1,753		—		11


	December 31, 2024
(Dollars in millions)	Notional		Assets		Liabilities
Customer interest rate contracts	$	4,096	$	8	$	190
Offsetting upstream interest rate contracts	4,265		134		9

Forwards and futures purchased	1,421		1		6
Forwards and futures sold	1,426		7		—

Interest Rate Risk Management

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

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

The following table summarizes FHN’s derivatives associated with interest rate risk management activities as of June 30, 2025 and December 31, 2024.


DERIVATIVES ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT
	June 30, 2025
(Dollars in millions)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	8,016	$	39	$	226
Offsetting upstream interest rate contracts	8,316		225		40


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Table of Contents			NOTE 14—DERIVATIVES


	December 31, 2024
(Dollars in millions)	Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts	$	8,301	$	10	$	372
Offsetting upstream interest rate contracts	8,301		369		11

The following table summarizes gains (losses) on FHN’s derivatives associated with interest rate risk management activities for the three and six months ended June 30, 2025 and 2024.


DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
(Dollars in millions)	Gains (Losses)		Gains (Losses)		Gains (Losses)		Gains (Losses)
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts (a)	$	64	$	9	$	175	$	(77)
Offsetting upstream interest rate contracts (a)	(64)		(9)		(175)		77

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

Cash Flow Hedges

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

In a cash flow hedge, the entire change in the fair value of the interest rate derivatives included in the assessment of

hedge effectiveness is initially recorded in OCI and is subsequently reclassified from OCI to current period earnings (interest income or interest expense) in the same period that the hedged item affects earnings.

The following tables summarize FHN’s derivative activities associated with cash flow hedges as of June 30, 2025 and December 31, 2024.

DERIVATIVES ASSOCIATED WITH CASH FLOW HEDGES

June 30, 2025

(Dollars in millions)

Notional

Assets

Liabilities

Cash Flow Hedges

Hedging Instruments:

Interest rate contracts

5,000

—

Hedged Items:

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

N/A

5,000

N/A


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Table of Contents			NOTE 14—DERIVATIVES



	December 31, 2024
(Dollars in millions)	Notional		Assets		Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts	$	5,000	$	—	$	67
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)	N/A		$	5,000	N/A

The following table summarizes gains (losses) on FHN’s derivatives associated with cash flow hedges for the three and six months ended June 30, 2025 and 2024.


DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH CASH FLOW HEDGES
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
(Dollars in millions)	Gains (Losses)		Gains (Losses)		Gains (Losses)		Gains (Losses)
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts (a)	$	21	$	(2)	$	57	$	(41)
Gain (loss) recognized in other comprehensive income (loss)	7		(15)		25		(58)
Gain (loss) reclassified from AOCI into interest income	9		13		18		26

(a)Approximately $8 million of pre-tax losses are expected to be reclassified into earnings in the next twelve months.

Other Derivatives

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

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


DERIVATIVES ASSOCIATED WITH MORTGAGE BANKING HEDGES
	June 30, 2025
(Dollars in millions)	Notional		Assets		Liabilities
Mortgage Banking Hedges

Option contracts written	$	96	$	1	$	—
Forward contracts written	151		—		1


	December 31, 2024
(Dollars in millions)	Notional		Assets		Liabilities
Mortgage Banking Hedges

Option contracts written	$	51	$	—	$	—

Forward contracts written	100		1		—


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

The following table summarizes gains (losses) on FHN's derivatives associated with mortgage banking activities for the three and six months ended June 30, 2025 and 2024.


DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH MORTGAGE BANKING HEDGES
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
(Dollars in millions)	Gains (Losses)		Gains (Losses)		Gains (Losses)		Gains (Losses)
Mortgage Banking Hedges

Option contracts written	$	—	$	1	$	(1)	$	—
Forward contracts written	—		—		(2)		1

In conjunction with pre-2020 sales of Visa Class B shares, FHN entered into derivative transactions whereby FHN will make or receive cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. As of June 30, 2025 and December 31, 2024, the derivative liabilities associated with the sales of Visa Class B shares were $13 million and $15 million, respectively. FHN recognized $5 million and $15 million, respectively, in derivative valuation adjustments related to prior sales of Visa Class B shares for the six months ended June 30, 2025 and year ended December 31, 2024. See Note 16 - Fair Value of Assets and Liabilities for discussion of the valuation inputs and processes for these Visa-related derivatives.

FHN utilizes cross-currency swaps and cross-currency interest rate swaps to economically hedge its exposure to foreign currency risk and interest rate risk associated with non-U.S. dollar denominated loans. As of June 30, 2025 and December 31, 2024, these loans were valued at $5 million and $16 million, respectively. The balance sheet amount and the gains/losses associated with these derivatives were not significant.

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

As of June 30, 2025 and December 31, 2024, the notional values of FHN’s risk participations were $220 million and $268 million of derivative assets and $936 million and $916 million of derivative liabilities, respectively. The notional value for risk participation/syndication agreements is consistent with the percentage of

participation in the lending arrangement. FHN's maximum exposure or benefit in the risk participation agreements is contingent on the fair value of the underlying interest rate derivative contracts for which the borrower is in a liability position at the time of default. FHN monitors the credit risk associated with the borrowers to which the risk participations relate through the same credit risk assessment process utilized for establishing credit loss estimates for its loan portfolio. These credit risk estimates are included in the determination of fair value for the risk participations. Assuming all underlying third-party customers referenced in the swap contracts defaulted at June 30, 2025 and December 31, 2024, the exposure from these agreements would not be material based on the fair value of the underlying swaps.

Master Netting and Similar Agreements

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

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

Cash margin received (posted) that is considered settlements for the derivative contracts is included in the respective derivative asset (liability) value. Cash margin that is considered collateral received (posted) for interest


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

rate derivatives is recognized as a liability (asset) on FHN’s Consolidated Balance Sheets.

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

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

The net fair value, determined by individual counterparty, of all derivative instruments with adjustable collateral posting thresholds was $11 million of assets and $109 million of liabilities on June 30, 2025, and $5 million of assets and $187 million of liabilities on December 31, 2024. As of June 30, 2025 and December 31, 2024, FHN had received collateral of $69 million and $82 million and

posted collateral of $63 million and $96 million, respectively, in the normal course of business related to these agreements.

Certain agreements also contain accelerated termination provisions, inclusive of the right of offset, if a counterparty’s credit rating falls below a specified level. If a counterparty’s debt rating (including FHN’s and First Horizon Bank’s) were to fall below these minimums, these provisions would be triggered, and the counterparties could terminate the agreements and require immediate settlement of all derivative contracts under the agreements. The net fair value, determined by individual counterparty, of all interest rate derivative instruments with credit-risk-related contingent accelerated termination provisions was $11 million of assets and $109 million of liabilities on June 30, 2025, and $6 million of assets and $187 million of liabilities on December 31, 2024. As of June 30, 2025 and December 31, 2024, FHN had received collateral of $69 million and $82 million and posted collateral of $63 million and $96 million, respectively, in the normal course of business related to these contracts.

FHNF buys and sells various types of securities for its clients. When these securities settle on a delayed basis, they are considered forward contracts. For futures and options, FHN transacts through a third party, and the transactions are subject to margin and collateral maintenance requirements. In the event of default, open positions can be offset along with the associated collateral.

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


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

The following table provides details of derivative assets and collateral received as presented on the Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024.


DERIVATIVE ASSETS & COLLATERAL RECEIVED
							Gross amounts not offset in the Balance Sheets
(Dollars in millions)	Gross amounts of recognized assets		Gross amounts offset in the Balance Sheets		Net amounts of assets presented in the Balance Sheets (a)		Derivative liabilities available for offset		Collateral received		Net amount
Derivative assets:
June 30, 2025
Interest rate derivative contracts	$	373	$	—	$	373	$	(83)	$	(270)	$	20
Forward contracts	10		—		10		(4)		(1)		5
	$	383	$	—	$	383	$	(87)	$	(271)	$	25

December 31, 2024
Interest rate derivative contracts	$	522	$	—	$	522	$	(73)	$	(436)	$	13
Forward contracts	8		—		8		(3)		(4)		1
	$	530	$	—	$	530	$	(76)	$	(440)	$	14

(a)Included in other assets on the Consolidated Balance Sheets. As of June 30, 2025 and December 31, 2024, less than $1 million and $2 million, respectively, of derivative assets have been excluded from these tables because they are generally not subject to master netting or similar agreements.

The following table provides details of derivative liabilities and collateral pledged as presented on the Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024.


DERIVATIVE LIABILITIES & COLLATERAL PLEDGED
							Gross amounts not offset in the Balance Sheets
(Dollars in millions)	Gross amounts of recognized liabilities		Gross amounts offset in the Balance Sheets		Net amounts of liabilities presented in the Balance Sheets (a)		Derivative assets available for offset		Collateral pledged		Net amount
Derivative liabilities:
June 30, 2025
Interest rate derivative contracts	$	429	$	—	$	429	$	(83)	$	(107)	$	239
Forward contracts	11		—		11		(4)		(6)		1
	$	440	$	—	$	440	$	(87)	$	(113)	$	240

December 31, 2024
Interest rate derivative contracts	$	649	$	—	$	649	$	(73)	$	(168)	$	408
Forward contracts	6		—		6		(3)		(1)		2
	$	655	$	—	$	655	$	(76)	$	(169)	$	410

(a)Included in other liabilities on the Consolidated Balance Sheets. As of June 30, 2025 and December 31, 2024, $15 million and $16 million, respectively, of derivative liabilities (primarily Visa-related derivatives) have been excluded from these tables because they are generally not subject to master netting or similar agreements.


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

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

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

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

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

The following table provides details of securities purchased under agreements to resell and collateral pledged by counterparties as of June 30, 2025 and December 31, 2024.


SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL
							Gross amounts not offset in the Balance Sheets
(Dollars in millions)	Gross amounts of recognized assets		Gross amounts offset in the Balance Sheets		Net amounts of assets presented in the Balance Sheets		Offsetting securities sold under agreements to repurchase		Securities collateral (not recognized on FHN’s Balance Sheets)		Net amount
Securities purchased under agreements to resell:
June 30, 2025	$	493	$	—	$	493	$	—	$	(488)	$	5
December 31, 2024	572		—		572		—		(567)		5

The following table provides details of securities sold under agreements to repurchase and collateral pledged by FHN as of June 30, 2025 and December 31, 2024.


SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
							Gross amounts not offset in the Balance Sheets
(Dollars in millions)	Gross amounts of recognized liabilities		Gross amounts offset in the Balance Sheets		Net amounts of liabilities presented in the Balance Sheets		Offsetting securities purchased under agreements to resell		Securities/ government guaranteed loans collateral		Net amount
Securities sold under agreements to repurchase:
June 30, 2025	$	2,205	$	—	$	2,205	$	—	$	(2,205)	$	—
December 31, 2024	2,096		—		2,096		—		(2,096)		—

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


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

The following table provides details, by collateral type, of the remaining contractual maturity of securities sold under agreements to repurchase as of June 30, 2025 and December 31, 2024.


MATURITIES OF SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
	June 30, 2025
(Dollars in millions)	Overnight and Continuous		Up to 30 Days		Total
Securities sold under agreements to repurchase:

Government agency issued MBS	$	1,458	$	—	$	1,458
Government agency issued CMO	747		—		747


Total securities sold under agreements to repurchase	$	2,205	$	—	$	2,205

	December 31, 2024
(Dollars in millions)	Overnight and Continuous		Up to 30 Days		Total
Securities sold under agreements to repurchase:

Government agency issued MBS	$	1,535	$	—	$	1,535
Government agency issued CMO	561		—		561


Total securities sold under agreements to repurchase	$	2,096	$	—	$	2,096


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

Note 16—Fair Value of Assets and Liabilities

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

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

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

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


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

Recurring Fair Value Measurements

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024.


BALANCES OF ASSETS & LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
	June 30, 2025
(Dollars in millions)	Level 1		Level 2		Level 3		Total
Trading securities:

Government agency issued MBS	$	—	$	148	$	—	$	148
Government agency issued CMO	—		120		—		120
Other U.S. government agencies	—		41		—		41
States and municipalities	—		64		—		64
Corporate and other debt	—		1,030		—		1,030

SBA interest-only strips	—		—		27		27
Total trading securities	—		1,403		27		1,430

Loans held for sale (elected fair value)	—		102		12		114

Securities available for sale:

Government agency issued MBS	—		3,746		—		3,746
Government agency issued CMO	—		2,932		—		2,932
Other U.S. government agencies	—		1,102		—		1,102
States and municipalities	—		337		—		337


Total securities available for sale	—		8,117		—		8,117
Other assets:
Deferred compensation mutual funds	111		—		—		111
Equity, mutual funds, and other	36		—		—		36
Derivatives, forwards and futures	10		—		—		10
Derivatives, interest rate contracts	—		373		—		373

Total other assets	157		373		—		530
Total assets	$	157	$	9,995	$	39	$	10,191
Trading liabilities:
U.S. treasuries	$	—	$	328	$	—	$	328




Corporate and other debt	—		141		—		141

Total trading liabilities	—		469		—		469
Other liabilities:
Derivatives, forwards and futures	12		—		—		12
Derivatives, interest rate contracts	—		430		—		430
Derivatives, other	—		—		13		13
Total other liabilities	12		430		13		455
Total liabilities	$	12	$	899	$	13	$	924


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


	December 31, 2024
(Dollars in millions)	Level 1		Level 2		Level 3		Total
Trading securities:
U.S. treasuries	$	—	$	3	$	—	$	3
Government agency issued MBS	—		98		—		98
Government agency issued CMO	—		180		—		180
Other U.S. government agencies	—		252		—		252
States and municipalities	—		64		—		64
Corporate and other debt	—		767		—		767
SBA interest-only strips	—		—		23		23
Total trading securities	—		1,364		23		1,387

Loans held for sale (elected fair value)	—		69		16		85

Securities available for sale:

Government agency issued MBS	—		3,702		—		3,702
Government agency issued CMO	—		2,767		—		2,767
Other U.S. government agencies	—		1,073		—		1,073
States and municipalities	—		354		—		354

Total securities available for sale	—		7,896		—		7,896
Other assets:
Deferred compensation mutual funds	111		—		—		111
Equity, mutual funds, and other	35		—		—		35
Derivatives, forwards and futures	8		—		—		8
Derivatives, interest rate contracts	—		522		—		522
Derivatives, other	—		1		—		1
Total other assets	154		523		—		677
Total assets	$	154	$	9,852	$	39	$	10,045
Trading liabilities:
U.S. treasuries	$	—	$	440	$	—	$	440


Other U.S. government agencies	—		7		—		7
Corporate and other debt	—		103		—		103
Total trading liabilities	—		550		—		550
Other liabilities:
Derivatives, forwards and futures	6		—		—		6
Derivatives, interest rate contracts	—		649		—		649
Derivatives, other	—		1		15		16
Total other liabilities	6		650		15		671
Total liabilities	$	6	$	1,200	$	15	$	1,221


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

Changes in Recurring Level 3 Fair Value Measurements

The changes in Level 3 assets and liabilities measured at fair value for the three months ended June 30, 2025 and 2024 on a recurring basis are summarized as follows.


CHANGES IN LEVEL 3 ASSETS & LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
	Three Months Ended June 30, 2025
(Dollars in millions)	SBA interest-only strips			Loans held for sale			Net derivative liabilities
Balance on April 1, 2025	$	22		$	13		$	(18)


Total net gains (losses) included in net income	(2)			—			—

Sales	—			(1)			—
Settlements	—			—			5

Net transfers into (out of) Level 3	7		(b)	—			—
Balance on June 30, 2025	$	27		$	12		$	(13)
Net unrealized gains (losses) included in net income	$	(1)	(c)	$	—	(a)	$	—	(d)


	Three Months Ended June 30, 2024
(Dollars in millions)	SBA interest-only strips			Loans held for sale			Net derivative liabilities
Balance on April 1, 2024	$	19		$	14		$	(20)

Total net gains (losses) included in net income	(1)			—			—
Purchases	—			1			—
Sales	(8)			—			—
Settlements	—			(1)			2

Net transfers into (out of) Level 3	6		(b)	1			—
Balance on June 30, 2024	$	16		$	15		$	(18)
Net unrealized gains (losses) included in net income	$	—	(c)	$	—	(a)	$	—	(d)

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

(b)Transfers into Level 3 SBA interest-only strips reflect transfers out of SBA loans held for sale, which are Level 2 assets measured on a nonrecurring basis. Refer to the nonrecurring measurement table included in the following section of this Note.

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

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


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

The changes in Level 3 assets and liabilities measured at fair value for the six months ended June 30, 2025 and 2024 on a recurring basis are summarized as follows.


CHANGES IN LEVEL 3 ASSETS & LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
	Six Months Ended June 30, 2025
(Dollars in millions)	SBA interest-only strips			Loans held for sale			Net derivative liabilities
Balance on January 1, 2025	$	23		$	16		$	(15)


Total net gains (losses) included in net income	(4)			—			(5)

Sales	(3)			(5)			—
Settlements	—			—			7

Net transfers into (out of) Level 3	11		(b)	1			—
Balance on June 30, 2025	$	27		$	12		$	(13)
Net unrealized gains (losses) included in net income	$	(2)	(c)	$	—	(a)	$	(5)	(d)


	Six Months Ended June 30, 2024
(Dollars in millions)	SBA interest-only strips			Loans held for sale			Net derivative liabilities
Balance on January 1, 2024	$	13		$	26		$	(23)


Total net gains (losses) included in net income	(2)			—			—
Purchases	—			2			—
Sales	(10)			(13)			—
Settlements	—			(1)			5

Net transfers into (out of) Level 3	15		(b)	1			—
Balance on June 30, 2024	$	16		$	15		$	(18)
Net unrealized gains (losses) included in net income	$	(1)	(c)	$	—	(a)	$	—	(d)

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

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

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

There were no net unrealized gains (losses) for Level 3 assets and liabilities included in other comprehensive income as of June 30, 2025 and 2024.


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Nonrecurring Fair Value Measurements

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

measured at fair value on a nonrecurring basis which were still held on the Consolidated Balance Sheets at June 30, 2025 and December 31, 2024, respectively, the following tables provide the level of valuation assumptions used to determine each adjustment and the related carrying value.


LEVEL OF VALUATION ASSUMPTIONS FOR ASSETS MEASURED AT FAIR VALUE ON A NONRECURRING BASIS
	Carrying value at June 30, 2025
(Dollars in millions)	Level 1		Level 2		Level 3		Total

Loans held for sale—SBAs and USDA	$	—	$	264	$	—	$	264

Loans and leases (a)	—		—		379		379
OREO (b)	—		—		4		4


	Carrying value at December 31, 2024
(Dollars in millions)	Level 1		Level 2		Level 3		Total

Loans held for sale—SBAs and USDA	$	—	$	438	$	—	$	438

Loans and leases (a)	—		—		344		344
OREO (b)	—		—		3		3

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

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

For assets measured on a nonrecurring basis which were still held on the Consolidated Balance Sheets at period end, the following table provides information about the fair value adjustments recorded during the three and six months ended June 30, 2025 and 2024.


FAIR VALUE ADJUSTMENTS ON ASSETS MEASURED ON A NONRECURRING BASIS
	Net gains (losses) Three Months Ended June 30,				Net gains (losses) Six Months Ended June 30,
(Dollars in millions)	2025		2024		2025		2024

Loans held for sale—SBAs and USDA	$	—	$	(1)	$	—	$	(1)

Loans and leases (a)	(16)		(31)		(33)		(56)


	$	(16)	$	(32)	$	(33)	$	(57)

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


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

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

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

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

Fixed asset and leased asset impairments were immaterial for the three and six months ended June 30, 2025 and 2024.

Level 3 Measurements

The following table provides information regarding the unobservable inputs utilized in determining the fair value of Level 3 recurring and nonrecurring measurements as of June 30, 2025 and December 31, 2024.

UNOBSERVABLE INPUTS USED IN LEVEL 3 FAIR VALUE MEASUREMENTS

(Dollars in millions)

Values Utilized

Level 3 Class

Fair Value at June 30, 2025

Valuation Techniques

Unobservable Input

Range

Weighted Average (c)

Trading securities - SBA interest-only strips

Discounted cash flow

Constant prepayment rate

16% - 30%

17%

Bond equivalent yield

3% - 18%

17%

Loans held for sale - residential real estate

Discounted cash flow

Prepayment speeds - First mortgage

2% - 6%

Foreclosure losses

64% - 65%

64%

Loss severity trends - First mortgage

0.0% - 2.2% of UPB

0.8%

Derivative liabilities, other

Discounted cash flow

Visa covered litigation resolution amount

$2.9 billion - $3.7 billion

$3.5 billion

Probability of resolution scenarios

10% - 25%

22%

Time until resolution

6 - 36 months

23 months

Loans and leases (a)

379

Appraisals from comparable properties

Marketability adjustments for specific properties

0% - 25% of appraisal

Other collateral valuations

Borrowing base certificates liquidation adjustment

25% - 50% of gross value

Financial Statements liquidation adjustment

50% - 100% of reported value

Auction appraisals marketability adjustment

0% - 10% of reported value

OREO (b)

Appraisals from comparable properties

Adjustment for value changes since appraisal

0% - 10% of appraisal

NM - Not meaningful

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

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


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(Dollars in millions)

Values Utilized

Level 3 Class

Fair Value at December 31, 2024

Valuation Techniques

Unobservable Input

Range

Weighted Average (c)

Trading securities - SBA interest-only strips

Discounted cash flow

Constant prepayment rate

16% - 30%

17%

Bond equivalent yield

3% - 18%

17%

Loans held for sale - residential real estate

Discounted cash flow

Prepayment speeds - First mortgage

2% - 6%

Foreclosure losses

63% - 71%

64%

Loss severity trends - First mortgage

0.0% - 0.2% of UPB

0.1%

Derivative liabilities, other

Discounted cash flow

Visa covered litigation resolution amount

$3.1 billion - $4.1 billion

$3.8 billion

Probability of resolution scenarios

10% - 25%

18%

Time until resolution

6 - 36 months

23 months

Loans and leases (a)

344

Appraisals from comparable properties

Marketability adjustments for specific properties

0% - 25% of appraisal

Other collateral valuations

Borrowing base certificates liquidation adjustment

25% - 50% of gross value

Financial Statements liquidation adjustment

50% - 100% of reported value

Auction appraisals marketability adjustment

0% - 10% of reported value

OREO (b)

Appraisals from comparable properties

Adjustment for value changes since appraisal

0% - 10% of appraisal

NM - Not meaningful

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

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

Trading Securities - SBA Interest-only Strips

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

Loans Held for Sale

Foreclosure losses and prepayment rates are significant unobservable inputs used in the fair value measurement of FHN’s residential real estate loans held for sale. Loss severity trends are also assessed to evaluate the reasonableness of fair value estimates resulting from discounted cash flows methodologies as well as to estimate fair value for newly repurchased loans and loans that are near foreclosure. Significant increases (decreases) in any of these inputs in isolation would result in

significantly lower (higher) fair value measurements. All observable and unobservable inputs are reassessed quarterly.

Derivative Liabilities

In conjunction with pre-2020 sales of Visa Class B shares, FHN and the purchasers entered into derivative transactions whereby FHN will make, or receive, cash payments whenever the conversion ratio of the Visa Class B shares into Visa Class A shares is adjusted. FHN uses a discounted cash flow methodology in order to estimate the fair value of FHN’s derivative liabilities associated with its prior sales of Visa Class B shares. The methodology includes estimation of both the resolution amount for Visa’s Covered Litigation matters as well as the length of time until the resolution occurs. Significant increases (decreases) in either of these inputs in isolation would result in significantly higher (lower) fair value measurements for the derivative liabilities. Additionally,


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FHN performs a probability-weighted multiple resolution scenario to calculate the estimated fair value of these derivative liabilities. Assignment of higher (lower) probabilities to the larger potential resolution scenarios would result in an increase (decrease) in the estimated fair value of the derivative liabilities. Since this estimation process requires application of judgment in developing significant unobservable inputs used to determine the possible outcomes and the probability weighting assigned to each scenario, these derivatives have been classified within Level 3 in fair value measurements disclosures.

Loans and Leases and Other Real Estate Owned

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

Fair Value Option

FHN previously elected the fair value option on a prospective basis for substantially all types of mortgage loans originated for sale purposes. FHN determined that the election reduces certain timing differences and better

matches changes in the value of such loans with changes in the value of derivatives and forward delivery commitments used as economic hedges for these assets at the time of election.

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

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


DIFFERENCES BETWEEN FAIR VALUE CARRYING AMOUNTS AND CONTRACTUAL AMOUNTS OF RESIDENTIAL REAL ESTATE LOANS REPORTED AT FAIR VALUE
	June 30, 2025
(Dollars in millions)	Fair value carrying amount		Aggregate unpaid principal		Fair value carrying amount less aggregate unpaid principal
Residential real estate loans held for sale reported at fair value:
Total loans	$	114	$	118	$	(4)
Nonaccrual loans	7		11		(4)






	December 31, 2024
(Dollars in millions)	Fair value carrying amount		Aggregate unpaid principal		Fair value carrying amount less aggregate unpaid principal
Residential real estate loans held for sale reported at fair value:
Total loans	$	85	$	89	$	(4)
Nonaccrual loans	3		5		(2)

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


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CHANGES IN FAIR VALUE RECOGNIZED IN NET INCOME
	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2025		2024		2025		2024
Changes in fair value included in net income:
Mortgage banking noninterest income
Loans held for sale	$	—	$	1	$	2	$	1

For the three and six months ended June 30, 2025 and 2024, the amount for residential real estate loans held for sale included an insignificant amount of gains in pre-tax earnings that are attributable to changes in instrument-specific credit risk. The portion of the fair value adjustments related to credit risk was determined based on estimated default rates and estimated loss severities. Interest income on residential real estate loans held for sale measured at fair value is calculated based on the note rate of the loan and is recorded in the interest income section of the Consolidated Statements of Income as interest on loans held for sale.

Determination of Fair Value

Fair values are based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following describes the assumptions and methodologies used to estimate the fair value of financial instruments recorded at fair value in the Consolidated Balance Sheets and for estimating the fair value of financial instruments for which fair value is disclosed.

Short-term financial assets

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

Trading securities and trading liabilities

Trading securities and trading liabilities are recognized at fair value through current earnings. Trading inventory held for broker-dealer operations is included in trading securities and trading liabilities. Broker-dealer long positions are valued at bid price in the bid-ask spread. Short positions are valued at the ask price. Inventory positions are valued using observable inputs including current market transactions, benchmark yields, credit spreads, and consensus prepayment speeds. Trading loans are valued using observable inputs including current market transactions, swap rates, mortgage rates, and consensus prepayment speeds.

Trading securities - SBA interest-only strips

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

Securities available for sale and held to maturity

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

Loans held for sale

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

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


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incorporates estimated cancellation rates for loans expected to become delinquent.

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

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

Mortgage loans held for investment at fair value option

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

Loans held for investment

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

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

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

Derivative assets and liabilities

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

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

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

OREO

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

Other assets

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


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

Defined maturity deposits

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

Short-term financial liabilities

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

Loan commitments

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

Other commitments

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

The following fair value estimates are determined as of a specific point in time utilizing various assumptions and estimates. The use of assumptions and various valuation techniques, as well as the absence of secondary markets for certain financial instruments, reduces the comparability of fair value disclosures between financial institutions. Due to market illiquidity, the fair values for loans and leases, loans held for sale, and term borrowings as of June 30, 2025 and December 31, 2024 involve the use of significant internally developed pricing assumptions for certain components of these line items. The assumptions and valuations utilized for this disclosure are considered to reflect inputs that market participants would use in transactions involving these instruments as of the measurement date. The valuations of legacy assets, particularly consumer loans and TRUPs loans within the Corporate segment, are influenced by changes in economic conditions since origination and risk perceptions of the financial sector. These considerations affect the estimate of a potential acquirer’s cost of capital and cash flow volatility assumptions from these assets and the resulting fair value measurements may depart significantly from FHN’s internal estimates of the intrinsic value of these assets.

Assets and liabilities that are not financial instruments — such as premises and equipment, goodwill, other intangible assets such as the value of long-term relationships with deposit and trust clients, deferred taxes, and certain other assets and other liabilities — have not been included in the following table. Additionally, the fair value measurements presented in the following table are solely for financial instruments as of the measurement date and do not consider the earnings potential of our various business lines. Accordingly, the total of the fair value amounts does not represent, and should not be construed to represent, the underlying value of FHN.

The following table summarizes the book value and estimated fair value of financial instruments recorded in the Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024.


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BOOK VALUE AND ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
	June 30, 2025
	Book Value		Fair Value
(Dollars in millions)			Level 1		Level 2		Level 3		Total
Assets:
Loans and leases, net of allowance for loan and lease losses
Commercial:
Commercial, financial, and industrial	$	34,012	$	—	$	—	$	33,574	$	33,574
Commercial real estate	13,723		—		—		13,636		13,636
Consumer:
Consumer real estate	14,135		—		—		13,600		13,600

Credit card and other	576		—		—		595		595
Total loans and leases, net of allowance for loan and lease losses	62,446		—		—		61,405		61,405
Short-term financial assets:
Interest-bearing deposits with banks	911		911		—		—		911
Federal funds sold	34		—		34		—		34
Securities purchased under agreements to resell	493		—		493		—		493
Total short-term financial assets	1,438		911		527		—		1,438
Trading securities (a)	1,430		—		1,403		27		1,430
Loans held for sale:
Mortgage loans (elected fair value)	114		—		102		12		114
USDA & SBA loans - LOCOM	264		—		265		—		265

Mortgage loans - LOCOM	24		—		—		24		24
Total loans held for sale	402		—		367		36		403
Securities available for sale (a)	8,117		—		8,117		—		8,117
Securities held to maturity	1,245		—		1,083		—		1,083
Derivative assets (a)	383		10		373		—		383
Other assets:
Tax credit investments	784		—		—		733		733
Deferred compensation mutual funds	111		111		—		—		111
Equity, mutual funds, and other (b)	322		36		—		286		322
Total other assets	1,217		147		—		1,019		1,166
Total assets	$	76,678	$	1,068	$	11,870	$	62,487	$	75,425
Liabilities:
Defined maturity deposits	$	7,270	$	—	$	7,246	$	—	$	7,246
Trading liabilities (a)	469		—		469		—		469
Short-term financial liabilities:
Federal funds purchased	996		—		996		—		996
Securities sold under agreements to repurchase	2,205		—		2,205		—		2,205
Other short-term borrowings	260		—		260		—		260
Total short-term financial liabilities	3,461		—		3,461		—		3,461
Term borrowings:
Real estate investment trust-preferred	47		—		—		47		47
Notes payable—new market tax credit investments	74		—		—		72		72
Secured borrowings	34		—		—		34		34
Junior subordinated debentures	152		—		—		142		142
Other long-term borrowings	1,035		—		1,039		—		1,039
Total term borrowings	1,342		—		1,039		295		1,334
Derivative liabilities (a)	455		12		430		13		455
Total liabilities	$	12,997	$	12	$	12,645	$	308	$	12,965

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

(b)Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $83 million and FRB stock of $203 million.


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	December 31, 2024
	Book Value		Fair Value
(Dollars in millions)			Level 1		Level 2		Level 3		Total
Assets:
Loans and leases, net of allowance for loan and lease losses
Commercial:
Commercial, financial, and industrial	$	33,083	$	—	$	—	$	32,511	$	32,511
Commercial real estate	14,194		—		—		13,894		13,894
Consumer:
Consumer real estate	13,826		—		—		13,262		13,262
Credit card and other	647		—		—		657		657
Total loans and leases, net of allowance for loan and lease losses	61,750		—		—		60,324		60,324
Short-term financial assets:
Interest-bearing deposits with banks	1,538		1,538		—		—		1,538
Federal funds sold	59		—		59		—		59
Securities purchased under agreements to resell	572		—		572		—		572
Total short-term financial assets	2,169		1,538		631		—		2,169
Trading securities (a)	1,387		—		1,364		23		1,387
Loans held for sale:
Mortgage loans (elected fair value)	85		—		69		16		85
USDA & SBA loans - LOCOM	439		—		439		—		439

Mortgage loans - LOCOM	27		—		—		27		27
Total loans held for sale	551		—		508		43		551
Securities available for sale (a)	7,896		—		7,896		—		7,896
Securities held to maturity	1,270		—		1,083		—		1,083
Derivative assets (a)	531		8		523		—		531
Other assets:
Tax credit investments	706		—		—		692		692
Deferred compensation mutual funds	111		111		—		—		111
Equity, mutual funds, and other (b)	289		35		—		254		289
Total other assets	1,106		146		—		946		1,092
Total assets	$	76,660	$	1,692	$	12,005	$	61,336	$	75,033
Liabilities:
Defined maturity deposits	$	6,613	$	—	$	6,591	$	—	$	6,591
Trading liabilities (a)	550		—		550		—		550
Short-term financial liabilities:
Federal funds purchased	259		—		259		—		259
Securities sold under agreements to repurchase	2,096		—		2,096		—		2,096
Other short-term borrowings	1,045		—		1,045		—		1,045
Total short-term financial liabilities	3,400		—		3,400		—		3,400
Term borrowings:
Real estate investment trust-preferred	47		—		—		47		47
Notes payable—new market tax credit investments	74		—		—		70		70
Secured borrowings	37		—		—		37		37
Junior subordinated debentures	151		—		—		142		142
Other long-term borrowings	886		—		866		—		866
Total term borrowings	1,195		—		866		296		1,162
Derivative liabilities (a)	671		6		650		15		671
Total liabilities	$	12,429	$	6	$	12,057	$	311	$	12,374

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

(b)Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $51 million and FRB stock of $203 million.


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

The following table presents the contractual amount and fair value of unfunded loan commitments and standby and other commitments as of June 30, 2025 and December 31, 2024.


UNFUNDED COMMITMENTS
	Contractual Amount				Fair Value
(Dollars in millions)	June 30, 2025		December 31, 2024		June 30, 2025		December 31, 2024
Unfunded Commitments:
Loan commitments	$	20,937	$	20,992	$	1	$	1
Standby and other commitments	720		753		9		9


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PART I, ITEM 1. FINANCIAL STATEMENTS
Table of Contents			NOTE 17—SUBSEQUENT EVENTS

Note 17—Subsequent Events

Preferred Stock Redemption

On August 1, 2025 (the "Redemption Date"), FHN redeemed all outstanding shares of its 6.625% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series B (the "Series B Preferred Stock"), and all related outstanding depositary shares, each representing a 1/400th interest in a share of the Series B Preferred Stock ("the Series B Depositary Shares"). After the redemptions, no shares of Series B Preferred Stock, and no Series B Depositary Shares, remain outstanding.

The redemption price was $25.00 per Series B Depository Share, corresponding to $10,000 per share of Series B Preferred Stock. Accrued dividends were not included in either redemption price because the Redemption Date was also a dividend payment date. The regular Series B semi-annual dividend, which was declared in April, was paid separately in the customary manner on August 1, 2025 to shareholders of record at the close of business on July 17, 2025.


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

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




TABLE OF ITEM 2 TOPICS
Introduction			75

Executive Overview			75

Results of Operations			77



Analysis of Financial Condition			86



Capital			98

Risk Management			101

Repurchase Obligations			105

Market Uncertainties and Prospective Trends			106

Critical Accounting Policies and Estimates			109

Accounting Changes			109

Non-GAAP Information			110


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Introduction

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

At 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.

This MD&A should be read in conjunction with the accompanying unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements in Part I, Item 1, as well as other information contained in this document and FHN's 2024 Annual Report on Form 10-K.

Executive Overview

Significant Events and Transactions

Senior Notes Retirement

On May 26, 2025, FHN retired $350 million in senior notes that had reached the maturity date, utilizing part of the proceeds from the issuance of $500 million in Fixed Rate/Floating Rate Senior Notes in first quarter 2025.

Preferred Stock Redemption

On August 1, 2025, FHN redeemed all outstanding shares of its Series B Preferred Stock with a carrying value of $77 million. Prior to the redemption, the Series B Preferred Stock qualified as Tier 1 capital. See Note 17 — Subsequent Events for more information.

Financial Performance Summary

Second Quarter 2025 Highlights

FHN reported second quarter 2025 net income available to common shareholders of $233 million, or $0.45 per diluted share, compared to $213 million, or $0.41 per diluted share, in first quarter 2025 and $184 million, or $0.34 per diluted share, in second quarter 2024.

Net interest income of $641 million increased $10 million compared to first quarter 2025, driven by loan growth, primarily in loans to mortgage companies. Net interest income increased $12 million compared to second quarter 2024, driven by lower interest-bearing deposit costs and the impact of the investment portfolio repositioning in fourth quarter 2024, partially offset by lower loan yields.

Provision for credit losses was $30 million for second quarter 2025 compared to $40 million for first quarter 2025 and $55 million for second quarter 2024. Net charge-offs were $34 million, or 22 basis points, compared to $29 million, or 19 basis points, in first quarter 2025, and $34 million, or 22 basis points, in second quarter 2024.

Noninterest income of $189 million increased $8 million compared to first quarter 2025, largely driven by higher deferred compensation income, service charges and fees, and mortgage banking income, partially offset by lower fixed income. Noninterest income for second quarter 2025 increased $3 million, compared to second quarter 2024, largely driven by higher deferred compensation income.

Noninterest expense of $491 million increased $4 million from first quarter 2025 as increases in personnel and advertising and public relations expenses were partially offset by a reduction in Visa derivative valuation expense in the prior quarter. Compared with second quarter 2024, noninterest expense decreased $9 million, or 2%, largely driven by lower FDIC special assessment expense, contract employment and outsourcing expense and other expense, partially offset by an increase in computer software expense.

Year-to-Date and Period End Highlights

For the six months ended June 30, 2025, net income available to common shareholders was $446 million, or $0.86 per diluted share, compared to $368 million, or $0.67 per diluted share, for the six months ended June 30, 2024.

Net interest income increased $19 million, largely driven by lower funding costs and the impact of the investment portfolio repositioning in fourth quarter 2024, partially offset by lower loan yields.

Provision for credit losses of $70 million decreased $35 million for the year-to-date period of 2025 compared to the same period of 2024. Net charge-offs of $63 million declined $11 million for the year-to-date period of 2025 compared to $74 million for the same period of 2024. Nonperforming loans of $593 million decreased $9 million


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from December 31, 2024 as an increase in C&I offset a reduction in CRE.

Noninterest income for the year-to-date period decreased $11 million, or 3%, primarily from lower deposit transactions and cash management fees and lower deferred compensation income.

Noninterest expense for the year-to-date period decreased $37 million, or 4%, largely attributable to lower personnel expense, deposit insurance expense and contract employment and outsourcing.

Period-end loans and leases of $63.3 billion increased $695 million, or 1%, from December 31, 2024. Commercial loans increased $446 million, largely driven by an increase of $931 million in the C&I portfolio, partially offset by a

$485 million decline in CRE balances. Growth in loans to mortgage companies contributed $587 million of the increase in the C&I portfolio. Consumer loan growth was $249 million for the year-to-date period.

Period-end deposits of $65.6 billion remained largely unchanged from December 31, 2024, with interest-bearing deposits increasing $125 million and noninterest-bearing deposits decreasing $129 million.

The Common Equity Tier 1 ratio was 10.99% at June 30, 2025 compared to 11.20% at December 31, 2024. Tier 1 risk-based capital and total risk-based capital ratios at June 30, 2025 were 12.00% and 13.95%, down from 12.22% and 14.25% at December 31, 2024.

Table I.2.1

KEY PERFORMANCE INDICATORS


	As of or for the three months ended									As of or for the six months ended
(Dollars in millions, except per share data)	June 30, 2025			March 31, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Pre-provision net revenue (a)	$	339		$	325		$	315		$	664		$	619
Diluted earnings per common share	$	0.45		$	0.41		$	0.34		$	0.86		$	0.67
Return on average assets (b)	1.20		%	1.11		%	1.00		%	1.16		%	0.99		%
Return on average common equity (c)	11.14		%	10.30		%	8.98		%	10.72		%	8.87		%
Return on average tangible common equity (a) (d)	13.85		%	12.81		%	11.29		%	13.33		%	11.12		%
Net interest margin (e)	3.40		%	3.42		%	3.38		%	3.41		%	3.38		%
Noninterest income to total revenue (f)	22.73		%	22.29		%	22.75		%	22.51		%	23.24		%
Efficiency ratio (g)	59.20		%	60.06		%	61.44		%	59.63		%	62.18		%
Allowance for loan and lease losses to total loans and leases	1.29		%	1.32		%	1.31		%	1.29		%	1.31		%
Net charge-offs (recoveries) to average loans and leases (annualized)	0.22		%	0.19		%	0.22		%	0.20		%	0.24		%
Total period-end equity to period-end assets	11.28		%	11.10		%	10.89		%	11.28		%	10.89		%
Tangible common equity to tangible assets (a)	8.58		%	8.37		%	8.14		%	8.58		%	8.14		%
Cash dividends declared per common share	$	0.15		$	0.15		$	0.15		$	0.30		$	0.30
Book value per common share	$	16.78		$	16.40		$	15.34		$	16.78		$	15.34
Tangible book value per common share (a)	$	13.57		$	13.17		$	12.22		$	13.57		$	12.22
Common equity Tier 1	10.99		%	10.93		%	11.05		%	10.99		%	11.05		%
Market capitalization	$	10,787		$	9,852		$	8,467		$	10,787		$	8,467

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

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

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

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

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

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

The following portions of this MD&A focus in more detail on the results of operations for the three and six months ended June 30, 2025, the three months ended March 31, 2025, and the three and six months ended June 30, 2024 and on information about FHN's financial condition, loan and lease portfolio, liquidity, funding sources, capital and other matters.


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Results of Operations

Net Interest Income

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

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


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Table I.2.2

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


	Three Months Ended
	June 30, 2025						March 31, 2025						June 30, 2024
(Dollars in millions)	Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate
Assets:
Loans and leases:
Commercial loans and leases	$	47,704	$	738	6.21	%	$	46,951	$	715	6.18	%	$	47,485	$	799	6.78	%
Consumer loans	14,847		186		4.99		14,694		182		4.96		14,544		179		4.91
Total loans and leases	62,551		924		5.92		61,645		897		5.89		62,029		978		6.34
Loans held for sale	502		8		6.76		519		9		7.09		462		9		7.50






Investment securities	9,330		71		3.06		9,209		70		3.02		9,261		60		2.58
Trading securities	1,609		23		5.72		1,442		20		5.57		1,367		21		6.30

Federal funds sold	8		—		4.88		7		—		4.91		55		1		5.64
Securities purchased under agreements to resell	628		7		4.23		706		7		4.24		621		8		5.28
Interest-bearing deposits with banks	1,259		14		4.45		1,265		14		4.44		1,448		20		5.46

Total earning assets / Total interest income	$	75,887	$	1,047	5.53	%	$	74,793	$	1,017	5.50	%	$	75,243	$	1,097	5.86	%

Cash and due from banks	864						886						904
Goodwill and other intangible assets, net	1,638						1,648						1,680
Premises and equipment, net	565						570						585
Allowance for loan and lease losses	(828)						(827)						(810)
Other assets	3,832						3,895						4,119
Total assets	$	81,958					$	80,965					$	81,721

Liabilities and Shareholders' Equity:

Interest-bearing deposits:
Savings	$	25,899	$	177	2.73	%	$	26,544	$	175	2.67	%	$	25,462	$	208	3.29	%
Other interest-bearing deposits	16,362		96		2.36		16,096		92		2.31		16,484		117		2.86
Time deposits	6,630		64		3.88		6,329		62		4.00		6,683		74		4.45
Total interest-bearing deposits	48,891		337		2.76		48,969		329		2.72		48,629		399		3.30
Federal funds purchased	893		10		4.50		565		6		4.47		531		7		5.53
Securities sold under agreements to repurchase	1,799		14		3.16		1,914		15		3.18		1,677		17		3.99
Trading liabilities	613		6		4.07		693		7		4.29		605		7		4.46
Other short-term borrowings	1,208		13		4.47		681		8		4.40		1,267		17		5.48
Term borrowings	1,556		22		5.60		1,332		18		5.41		1,170		17		5.64
Total interest-bearing liabilities / Total interest expense	$	54,960	$	402	2.94	%	$	54,154	$	383	2.87	%	$	53,879	$	464	3.46	%

Noninterest-bearing liabilities:
Noninterest-bearing deposits	15,851						15,535						16,332
Other liabilities	2,050						2,165						2,561
Total liabilities	72,861						71,854						72,772

Shareholders' equity	8,802						8,816						8,654
Noncontrolling interest	295						295						295
Total shareholders' equity	9,097						9,111						8,949
Total liabilities and shareholders' equity	$	81,958					$	80,965					$	81,721

Net earnings assets / Net interest income (TE) / Net interest spread	$	20,927	$	645	2.59	%	$	20,639	$	634	2.63	%	$	21,364	$	633	2.40	%
Taxable equivalent adjustment			(4)		0.81				(3)		0.79				(4)		0.98
Net interest income / Net interest margin (a)			$	641	3.40	%			$	631	3.42	%			$	629	3.38	%

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


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Table of Contents

Second Quarter 2025 versus First Quarter 2025

Net interest income of $641 million in second quarter 2025 increased $10 million from first quarter 2025, and the net interest margin decreased 2 basis points to 3.40%. The increase in net interest income was driven by loan growth, primarily in loans to mortgage companies. The decline in the net interest margin was attributable to higher deposit costs associated with increased brokered deposit balances. Loan yield increased 3 basis points, and the cost of interest-bearing deposits increased 4 basis points.

Average earning assets of $75.9 billion in second quarter 2025 increased $1.1 billion from first quarter 2025, largely due to a $906 million increase in average loans and leases. Average interest-bearing liabilities increased $806 million, reflecting a $660 million increase in average short-term borrowings and a $224 million increase in average term borrowings, partially offset by a $78 million decrease in average interest-bearing deposits.

Second Quarter 2025 versus Second Quarter 2024

Net interest income increased $12 million from second quarter 2024 and the net interest margin increased 2 basis points to 3.40% in second quarter 2025, driven by lower interest-bearing deposit costs and the impact of the investment portfolio repositioning in fourth quarter 2024, partially offset by lower loan yields. Yields on earning assets decreased 33 basis points while funding costs decreased 52 basis points.

Average earning assets increased $644 million from second quarter 2024, largely driven by a $522 million increase in average loans and leases, a $242 million increase in average trading securities, and a $69 million increase in average investment securities, partially offset by a $189 million decrease in average interest-bearing deposits with banks. Average interest-bearing liabilities increased $1.1 billion, driven by a $262 million increase in average interest-bearing deposits, a $433 million increase in average short-term borrowings, and a $386 million increase in average term borrowings.


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Table I.2.3

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


	Six Months Ended
	June 30, 2025						June 30, 2024
(Dollars in millions)	Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate
Assets:
Loans and leases:
Commercial loans and leases	$	47,330	$	1,454	6.20	%	$	47,120	$	1,582	6.75	%
Consumer loans	14,771		367		4.97		14,471		351		4.85
Total loans and leases	62,101		1,821		5.90		61,591		1,933		6.31
Loans held for sale	510		18		6.93		458		17		7.65






Investment securities	9,270		141		3.04		9,425		121		2.56
Trading securities	1,526		43		5.65		1,306		42		6.38

Federal funds sold	7		—		4.90		64		2		5.63
Securities purchased under agreements to resell	667		14		4.23		546		14		5.20
Interest-bearing deposits with banks	1,262		28		4.44		1,620		44		5.46

Total earning assets / Total interest income	$	75,343	$	2,065	5.51	%	$	75,010	$	2,173	5.82	%

Cash and due from banks	875						926
Goodwill and other intangible assets, net	1,643						1,685
Premises and equipment, net	568						586
Allowance for loan and lease losses	(827)						(799)
Other assets	3,862						4,074
Total assets	$	81,464					$	81,482

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Savings	$	26,220	$	351	2.70	%	$	25,426	$	414	3.28	%
Other interest-bearing deposits	16,230		188		2.34		16,609		236		2.86
Time deposits	6,480		127		3.94		6,656		147		4.44
Total interest-bearing deposits	48,930		666		2.74		48,691		797		3.29
Federal funds purchased	730		16		4.49		435		12		5.52
Securities sold under agreements to repurchase	1,856		29		3.17		1,675		33		3.99
Trading liabilities	652		14		4.18		534		12		4.40
Other short-term borrowings	946		21		4.44		902		25		5.46
Term borrowings	1,445		40		5.51		1,163		33		5.68
Total interest-bearing liabilities / Total interest expense	$	54,559	$	786	2.90	%	$	53,400	$	912	3.43	%

Noninterest-bearing liabilities:
Noninterest-bearing deposits	15,694						16,479
Other liabilities	2,107						2,503
Total liabilities	72,360						72,382

Shareholders' equity	8,809						8,805
Noncontrolling interest	295						295
Total shareholders' equity	9,104						9,100
Total liabilities and shareholders' equity	$	81,464					$	81,482

Net earnings assets / Net interest income (TE) / Net interest spread	$	20,784	$	1,279	2.61	%	$	21,610	$	1,261	2.39	%
Taxable equivalent adjustment			(7)		0.80				(8)		0.99
Net interest income / Net interest margin (a)			$	1,272	3.41	%			$	1,253	3.38	%

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


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For the six months ended June 30, 2025, net interest income of $1.3 billion increased $19 million from the same period one year ago, largely driven by lower funding costs and the impact of the investment portfolio repositioning in fourth quarter 2024, partially offset by lower loan yields.

Total average earning assets increased $333 million in the first six months of 2025, largely driven by average loan growth of $510 million and higher average trading securities balances, partially offset by lower levels of investment securities and interest-bearing cash.

The year-to-date net interest margin of 3.41% increased 3 basis points compared to 3.38% for the same period of 2024 as earning asset yields decreased 31 basis points and the cost of interest-bearing liabilities decreased 53 basis points.

Noninterest Income

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

Table I.2.4

NONINTEREST INCOME


	Three Months Ended						2Q25 vs. 1Q25				2Q25 vs. 2Q24
(Dollars in millions)	June 30, 2025		March 31, 2025		June 30, 2024		$ Change		% Change		$ Change		% Change
Noninterest income:
Fixed income	$	42	$	49	$	40	$	(7)	(14)	%	$	2	5	%
Deposit transactions and cash management	41		40		44		1		3		(3)		(7)
Brokerage, management fees and commissions	26		26		25		—		—		1		4
Card and digital banking fees	19		18		20		1		6		(1)		(5)
Other service charges and fees	14		12		14		2		17		—		—
Trust services and investment management	13		12		12		1		8		1		8
Mortgage banking income	10		8		10		2		25		—		—
Securities gains (losses), net	—		—		1		—		NM		(1)		(100)


Other income	24		16		20		8		50		4		20
Total noninterest income	$	189	$	181	$	186	$	8	4	%	$	3	2	%

NM - not meaningful

Second Quarter 2025 versus First Quarter 2025

Noninterest income of $189 million increased $8 million, or 4%, compared to the prior quarter.

Fixed income of $42 million declined $7 million from the prior quarter as average daily revenue decreased 6% to $550 thousand as a result of less favorable market conditions, and revenue from other products also decreased.

Other income increased $8 million, largely driven by a $10 million increase in deferred compensation income.

Second Quarter 2025 versus Second Quarter 2024

Noninterest income for second quarter 2025 increased $3 million, or 2%, compared to second quarter 2024.

Fixed income of $42 million increased $2 million compared to second quarter 2024. Fixed income average

daily revenue of $550 thousand increased $62 thousand, or 13%, compared to the same quarter of 2024. Revenue from other products decreased $1 million compared to second quarter 2024.

Deposit transactions and cash management fees of $41 million decreased $3 million, largely attributable to lower overdraft fees.

Other income increased $4 million, largely driven by a $5 million increase in deferred compensation income.


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The following table presents the significant components of noninterest income for the six months ended June 30, 2025 and 2024.

Table I.2.5

NONINTEREST INCOME


	Six Months Ended
(Dollars in millions)	June 30, 2025		June 30, 2024		$ Change		% Change
Noninterest income:
Fixed income	$	91	$	92	$	(1)	(1)	%
Deposit transactions and cash management	81		88		(7)		(8)
Brokerage, management fees and commissions	52		49		3		6
Card and digital banking fees	37		38		(1)		(3)
Other service charges and fees	26		27		(1)		(4)
Trust services and investment management	25		24		1		4
Mortgage banking income	18		19		(1)		(5)
Securities gains (losses), net	—		1		(1)		(100)


Other income	40		43		(3)		(7)
Total noninterest income	$	370	$	381	$	(11)	(3)	%

For the six months ended June 30, 2025, noninterest income of $370 million decreased $11 million, or 3%, compared to the same period of 2024.

Fixed income remained relatively unchanged for the six months ended June 30, 2025, compared to the same period of 2024. Fixed income product revenue of $70 million decreased $6 million largely driven by less favorable market conditions. Revenue from other products of $21 million increased $5 million primarily driven by increases in revenues from loan sales.

Deposit transactions and cash management fees decreased $7 million, largely attributable to lower overdraft fees.

Brokerage, management fees and commissions increased $3 million, largely driven by higher wealth management fees.

Other income decreased $3 million, largely the result of a $6 million decline in deferred compensation income, partially offset by a $3 million increase in bank owned life insurance.


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Noninterest Expense

The following table presents the significant components of noninterest expense for each of the periods presented.

Table I.2.6

NONINTEREST EXPENSE


	Three Months Ended						2Q25 vs. 1Q25				2Q25 vs. 2Q24
(Dollars in millions)	June 30, 2025		March 31, 2025		June 30, 2024		$ Change		% Change		$ Change		% Change
Noninterest expense:
Personnel expense	$	282	$	279	$	279	$	3	1	%	$	3	1	%
Net occupancy expense	34		35		31		(1)		(3)		3		10
Computer software	34		32		29		2		6		5		17
Operations services	23		23		23		—		—		—		—
Legal and professional fees	17		14		18		3		21		(1)		(6)
Deposit insurance expense	12		13		16		(1)		(8)		(4)		(25)
Advertising and public relations	14		10		14		4		40		—		—
Equipment expense	11		10		11		1		10		—		—
Amortization of intangible assets	10		10		11		—		—		(1)		(9)
Contract employment and outsourcing	8		8		14		—		—		(6)		(43)
Communications and delivery	8		8		8		—		—		—		—

Other expense	38		45		46		(7)		(16)		(8)		(17)
Total noninterest expense	$	491	$	487	$	500	$	4	1	%	$	(9)	(2)	%

Second Quarter 2025 versus First Quarter 2025

Noninterest expense of $491 million increased $4 million, or 1%, compared to the prior quarter.

Personnel expense of $282 million increased $3 million from the prior quarter, reflecting higher deferred compensation expense of $6 million and higher salaries and benefits of $5 million, partially offset by lower incentive-based compensation expense of $8 million. Deferred compensation expense for the second quarter reflects the impact of a $4 million expense credit for an accrual release related to a business unit divested over a decade ago. The increase in salaries and benefits was primarily due to higher day count, seasonality in benefits, and strategic investments in personnel. The decrease in incentive-based compensation primarily reflects a reduction from first quarter adjustments and lower retention expense.

Advertising and public relations expense increased $4 million compared to the prior quarter, largely from a seasonal increase in advertising spend.

Other expense declined $7 million, largely attributable to $5 million in Visa derivative valuation expense in the prior quarter.

Second Quarter 2025 versus Second Quarter 2024

Noninterest expense of $491 million decreased $9 million, or 2%, compared to second quarter 2024.

Personnel expense increased $3 million compared to second quarter 2024, reflecting higher salaries and benefits of $9 million, partially offset by lower incentive-based compensation expense of $6 million.

Computer software expense increased $5 million, largely attributable to increased spend related to technology projects.

Deposit insurance expense declined $4 million and included a $1 million expense credit for the FDIC special assessment compared to an expense of $2 million in second quarter 2024.

Contract employment and outsourcing declined $6 million, largely attributable to the completion of recent technology projects.


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The following table presents the significant components of noninterest expense for the six months ended June 30, 2025 and 2024.

Table I.2.7

NONINTEREST EXPENSE


	Six Months Ended
(Dollars in millions)	June 30, 2025		June 30, 2024		$ Change		% Change
Noninterest expense:
Personnel expense	$	561	$	580	$	(19)	(3)	%
Net occupancy expense	69		62		7		11
Computer software	66		59		7		12
Operations services	46		45		1		2
Legal and professional fees	31		33		(2)		(6)
Deposit insurance expense	25		40		(15)		(38)
Advertising and public relations	24		22		2		9
Equipment expense	22		22		—		—
Amortization of intangible assets	20		22		(2)		(9)
Contract employment and outsourcing	16		28		(12)		(43)
Communications and delivery	16		16		—		—
Other expense	82		86		(4)		(5)
Total noninterest expense	$	978	$	1,015	$	(37)	(4)	%

For the six months ended June 30, 2025, noninterest expense decreased $37 million, or 4%, compared to the same period of 2024.

Personnel expense of $561 million decreased $19 million, reflecting lower deferred compensation expense and incentive-based compensation expense, partially offset by higher salaries expense.

Net occupancy expense increased $7 million for the year-to-date period, largely attributable to increased spending tied to property management services as well as various other maintenance projects.

Computer software expense increased $7 million for the year-to-date period, largely from increased spending related to technology projects.

Deposit insurance expense of $25 million decreased $15 million, largely attributable to lower FDIC special assessment expense.

Contract employment and outsourcing decreased $12 million, primarily due to expense reductions related to recently completed technology projects.

Provision for Credit Losses

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

Provision for credit losses was $30 million for the second quarter 2025, compared to $40 million for the first quarter 2025 and $55 million for second quarter 2024. Net charge-

offs in second quarter 2025 were $34 million, or 22 basis points, compared to $29 million, or 19 basis points, in the prior quarter, and $34 million, or 22 basis points, in second quarter 2024.

The ACL to total loans and leases ratio decreased 3 basis points from first quarter 2025 to 1.42%, largely driven by growth in loans to mortgage companies, which have a lower loss history, a $17 million decline in NPLs, and lower classified loan balances. For additional information about general asset quality trends, refer to the Asset Quality section in this MD&A.

Income Taxes

FHN recorded income tax expense of $64 million in second quarter 2025, compared to $63 million in first quarter

2025 and $56 million in second quarter 2024. For the six months ended June 30, 2025 and 2024, FHN recorded


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income tax expense of $127 million and $113 million, respectively.

The effective tax rate was approximately 20.8%, 22.0%, and 21.5% for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, respectively. The effective tax rate was approximately 21.3% and 22.0% for the six months ended June 30, 2025 and 2024, respectively.

FHN’s effective tax rate is favorably affected by recurring items such as tax credits and other tax benefits from tax credit investments, tax-exempt income, and bank-owned life insurance. The effective rate is unfavorably affected by the non-deductible portions of FDIC premium and executive compensation. FHN’s effective tax rate also may be affected by items that may occur in any given period but are not consistent from period to period, such as changes in unrecognized tax benefits. The rate also may be affected by items resulting from business combinations.

A deferred tax asset ("DTA") or deferred tax liability ("DTL") is recognized for the tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax consequence is calculated by applying current enacted statutory tax rates to these temporary differences in future years. As of June 30, 2025, FHN’s gross DTA and gross DTL were $691 million and $551 million, respectively, resulting in a net DTA of $140 million at June 30, 2025, compared with a net DTA of $227 million at December 31, 2024.

As of June 30, 2025, FHN had DTA balances related to federal and state income tax carryforwards of $25 million and $3 million, respectively, which will expire at various dates.

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

Federal Tax Legislation

On July 4, 2025, federal legislation commonly referred to as the “One Big Beautiful Bill Act” was enacted, resulting in changes to U.S. federal income tax law. The legislation includes several provisions that may impact the timing and magnitude of certain tax deductions and tax credits. FHN anticipates that the accelerated federal tax deductions for bonus depreciation and research or experimental expenditures will reduce its federal tax liability starting in 2025. Since these provisions solely reflect differences in timing for tax deductions they will not affect the recorded amounts of income tax expense. FHN is currently assessing the impact of provisions that sunset certain Section 48E Clean Electricity Tax Credits on its future financial results. FHN applies the deferral method to all Section 48E credits, resulting in offset of the credit amount against the related loan/lease and amortization of the credit to interest income over the life of the loan/lease, which typically have long-durations.

Business Segment Results

During fourth quarter 2024, FHN reorganized its internal management structure and, accordingly, its segment reporting structure. Prior to the restructure, FHN's reportable segments were Regional Banking, Specialty Banking, and Corporate. As a result of the restructure, FHN revised its reportable segments to include: (1) Commercial, Consumer & Wealth, (2) Wholesale, and (3) Corporate. Segment results for periods prior to fourth quarter 2024 have been recast to adjust for the realignment of the segment reporting structure. See Note 12 - Business Segment Information to the Consolidated Financial Statements in Part I, Item 1 of this report for additional disclosures related to FHN's segments.

Commercial, Consumer & Wealth

The Commercial, Consumer & Wealth segment generated pre-tax income of $379 million for second quarter 2025, an increase of $26 million compared to first quarter 2025. Net interest income of $633 million increased $9 million, largely driven by loan growth and higher loan yield. Provision for credit losses of $13 million decreased $25 million from the prior quarter. Noninterest income increased $3 million compared to the prior quarter, largely

driven by increases in deposit transactions and cash management and other service charges and fees. Noninterest expense increased $11 million compared to first quarter 2025, largely due to higher operations expenses, advertising and public relations expenses, and technology expenses allocated to the Commercial, Consumer & Wealth segment compared to the previous quarter.

Pre-tax income for second quarter 2025 increased $40 million to $379 million, compared to $339 million for second quarter 2024, largely driven by a $43 million decrease in the provision for credit losses. Total revenue decreased $6 million as net interest income decreased $4 million and noninterest income decreased $2 million compared to second quarter 2024. Noninterest expense decreased $3 million compared to second quarter 2024, largely due to a decrease in other expense, partly offset by an increase in operations expenses allocated to the segment compared to the prior year.

Pre-tax income of $732 million for the six months ended June 30, 2025 increased $48 million compared to the same period of 2024, largely from a $49 million decrease


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in the provision for credit losses. Noninterest expense decreased $6 million, largely attributable to lower personnel expense and other expense, partially offset by higher operations expenses and advertising and public relations expenses allocated to the segment in the current year.

Wholesale

Pre-tax income in the Wholesale segment of $29 million for second quarter 2025 remained flat compared to first quarter 2025, with a $3 million increase in the provision for credit losses offsetting a $2 million increase in revenue and $1 million decline in noninterest expense. Net interest income increased $8 million compared to the first quarter, largely driven by growth in loans to mortgage companies.

Fixed income of $42 million decreased $7 million from the prior quarter, as average daily revenue declined 6% and revenue from other products also decreased. Mortgage banking income of $10 million increased $2 million compared to the prior quarter as home purchase seasonality picked up slightly.

Pre-tax income in the Wholesale segment increased $3 million compared to second quarter 2024. Revenue increased $11 million, primarily driven by higher net interest income compared to the same quarter of 2024. The increase in net interest income was largely driven by loan growth, primarily in loans to mortgage companies. Provision for credit losses was $6 million compared to $1 million in second quarter 2024. Noninterest expense increased $3 million, largely driven by higher personnel expense.

Pre-tax income of $59 million for the six months ended June 30, 2025 increased $12 million from the same period of 2024, largely reflecting a $16 million increase in revenue partially offset by a $3 million increase in noninterest expense and a $1 million increase in the provision for credit losses. The increase in revenue was largely a result of higher net interest income driven by loan growth, primarily in loans to mortgage companies. The increase in noninterest expense was largely attributable to higher personnel expense.

Corporate

Pre-tax loss for the Corporate segment was $99 million for second quarter 2025 compared to $97 million for first quarter 2025. The higher pre-tax loss for second quarter 2025 largely reflected a $12 million increase in the provision for credit losses, partly offset by a $4 million increase in revenue and $6 million decrease in noninterest expense compared to first quarter 2025. The decrease in noninterest expense was largely attributable to lower deposit insurance expense tied to a $1 million FDIC special assessment expense credit in the current quarter and a decrease in other expense due to $5 million in Visa derivative valuation expense in the prior quarter.

Pre-tax loss for the Corporate segment was $99 million for second quarter 2025 compared to $105 million for second quarter 2024, largely reflecting a $5 million increase in net interest income, a $5 million increase in noninterest income and $9 million decrease in noninterest expense, partially offset by a $13 million increase in the provision for credit losses. The increase in noninterest income was largely a result of higher deferred compensation income compared to second quarter 2024. The decrease in noninterest expense reflects a $4 million expense credit related to an accrual release in deferred compensation during the current quarter, lower deposit insurance expense tied to an FDIC special assessment of $2 million in the prior year, and $3 million in restructuring costs incurred in second quarter 2024.

Pre-tax loss of $197 million for the six months ended June 30, 2025 compared to $217 million for the same period of 2024. The decrease in loss was largely driven by lower noninterest expense in the current year due to an FDIC special assessment of $12 million in the prior year, $9 million in restructuring costs incurred during the prior year, and a $4 million expense credit related to an accrual release in deferred compensation in the current year. These decreases were partially offset by $5 million in Visa derivative valuation expense in the current year.

Analysis of Financial Condition

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

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

Loans and Leases

Period-end loans and leases of $63.3 billion as of June 30, 2025 increased $695 million, or 1%, compared to December 31, 2024. Commercial loans and leases increased $446 million, primarily from growth in loans to mortgage companies and other C&I loans, partially offset

by a decrease in commercial real estate loans. Consumer loans increased $249 million, primarily from growth in real estate installment loans, partially offset by declines in consumer construction and other consumer loans.


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The following table provides details regarding FHN's loans and leases as of June 30, 2025 and December 31, 2024.

Table I.2.8

LOANS & LEASES


	As of June 30, 2025				As of December 31, 2024
(Dollars in millions)	Amount		Percent of total		Amount		Percent of total		Growth Rate
Commercial:
Commercial, financial, and industrial (a)	$	34,359	54	%	$	33,428	53	%	3	%
Commercial real estate	13,936		22		14,421		23		(3)
Total commercial	48,295		76		47,849		76		1
Consumer:
Consumer real estate	14,368		23		14,047		23		2
Credit card and other	597		1		669		1		(11)
Total consumer	14,965		24		14,716		24		2
Total loans and leases	$	63,260	100	%	$	62,565	100	%	1	%

(a)Includes equipment financing loans and leases.

Loans Held for Sale

Loans held for sale primarily consists of government guaranteed loans under SBA and USDA lending programs. Smaller amounts of other consumer and home equity loans are also included in loans HFS. Additionally, FHN's mortgage banking operations include origination and servicing of residential first lien mortgages that conform to standards established by GSEs that are major investors in U.S. home mortgages but can also consist of junior lien and jumbo loans secured by residential property. These non-conforming loans are primarily sold to private

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

On June 30, 2025 and December 31, 2024, loans HFS were $402 million and $551 million, respectively. Held-for-sale consumer mortgage loans secured by residential real estate in process of foreclosure totaled $2 million and $1 million as of June 30, 2025 and December 31, 2024, respectively.

Asset Quality

Loan and Lease Portfolio Composition

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

FHN had a concentration of residential real estate loans of 23% of total loans as of both June 30, 2025 and December 31, 2024. Industry concentrations are discussed under the C&I heading below.

Credit underwriting guidelines are outlined in Item 7 of FHN’s Annual Report on Form 10-K for the year ended December 31, 2024 in the Asset Quality section within the Analysis of Financial Condition discussion. FHN’s credit underwriting guidelines and loan product offerings as of June 30, 2025 are generally consistent with those reported and disclosed in FHN’s Form 10-K for the year ended December 31, 2024.

Commercial Loan and Lease Portfolios

C&I

C&I loans are the largest component of the loan and lease portfolio, comprising 54% and 53% of the total portfolio as of June 30, 2025 and December 31, 2024, respectively.

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


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leases, working capital lines of credit, and trade credit enhancement through letters of credit. Total C&I loans and leases increased $931 million to $34.4 billion as of June 30, 2025, compared to December 31, 2024, largely driven by a $587 million increase in loans to mortgage companies. The largest geographical concentrations of balances in the C&I portfolio as of June 30, 2025 were in Tennessee (20%), Florida (13%), Texas (10%), North Carolina (7%), Louisiana (6%), and California (6%). No other state represented more than 5% of the portfolio. This mix was generally consistent with December 31, 2024.

The following table provides the composition of the C&I portfolio by industry as of June 30, 2025 and December 31, 2024. For purposes of this disclosure, industries are determined based on the North American Industry Classification System (NAICS) industry codes used by Federal statistical agencies in classifying business establishments for the collection, analysis, and publication of statistical data related to the U.S. business economy.

Table I.2.9

C&I PORTFOLIO BY INDUSTRY


	June 30, 2025				December 31, 2024
(Dollars in millions)	Amount		Percent		Amount		Percent
Industry:
Loans to mortgage companies	$	4,058	12	%	$	3,471	10	%
Real estate and rental and leasing (a)	3,942		11		3,888		12
Finance and insurance	3,749		11		3,666		11
Health care and social assistance	2,565		8		2,576		8
Wholesale trade	2,529		7		2,433		7
Manufacturing	2,375		7		2,312		7
Accommodation and food service	2,184		6		2,198		7
Retail trade	1,777		5		1,756		5
Transportation and warehousing	1,631		5		1,616		5
Energy	1,139		3		1,273		4
Other (professional, construction, entertainment, etc.) (b)	8,410		25		8,239		24
Total C&I loan portfolio	$	34,359	100	%	$	33,428	100	%

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

(b)Each industry in this category makes up less than 5% of the total.

Industry Concentrations

Loan concentrations are considered to exist for a financial institution when there are loans to numerous borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. Loans to borrowers in the finance and insurance industry and loans to mortgage companies were 23% of FHN’s C&I loan portfolio as of June 30, 2025 and 21% as of December 31, 2024, and as a result could be affected by items that uniquely impact the financial services industry. Loans to borrowers in the real estate and rental and leasing industry were 11% and 12% of FHN's C&I portfolio as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, FHN did not have any other concentrations of C&I loans in any single industry of 10% or more of total loans.

Loans to Mortgage Companies

Loans to mortgage companies were 12% and 10% of the C&I portfolio as of June 30, 2025 and December 31, 2024, respectively. This portfolio includes commercial lines of credit to qualified mortgage companies primarily for the

temporary warehousing of eligible mortgage loans prior to the borrower’s sale of those mortgage loans to third-party investors. Balances in this portfolio generally fluctuate with mortgage rates and seasonal factors. Generally, new loan originations to mortgage lenders increase when there is a decline in mortgage rates and decrease when rates rise. In periods of economic uncertainty, this trend may not occur even if interest rates are declining. In second quarter 2025, 77% of the loan originations were home purchases and 23% were refinance transactions.

Real Estate and Rental and Leasing

Loans to borrowers in the real estate and rental and leasing industry were 11% and 12% of FHN's C&I portfolio as of June 30, 2025 and December 31, 2024, respectively. This portfolio primarily consists of equipment financing loans and leases to clients across FHN's footprint in a broad range of industries and asset types. This portfolio also includes a smaller balance of loans and leases for solar and wind generating facilities.


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Finance and Insurance

The finance and insurance component represented 11% of the C&I portfolio as of both June 30, 2025 and December 31, 2024, and includes TRUPs (i.e., long-term unsecured loans to bank and insurance-related businesses), loans to bank holding companies, and asset-based lending to consumer finance companies. As of June 30, 2025, asset-based lending to consumer finance companies represented approximately $1.6 billion of the finance and insurance component.

Commercial Real Estate

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

The largest geographical concentrations of CRE loan balances as of June 30, 2025 were in Florida (26%), Texas (13%), North Carolina (12%), Georgia (10%), Tennessee (9%), and Louisiana (7%). No other state represented more than 5% of the portfolio. The mix was generally consistent with December 31, 2024.

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

Table I.2.10

CRE PORTFOLIO BY PROPERTY TYPE


	June 30, 2025				December 31, 2024
(Dollars in millions)	Amount		Percent		Amount		Percent
Property Type:
Multi-family	$	4,765	34	%	$	5,122	36	%
Office	2,680		19		2,785		19
Retail	2,204		16		2,167		15
Industrial	2,056		15		2,130		15
Hospitality	1,325		9		1,332		9

Other CRE (a)	906		7		885		6
Total CRE loan portfolio	$	13,936	100	%	$	14,421	100	%

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

Consumer Loan Portfolios

Consumer Real Estate

The consumer real estate portfolio is primarily composed of home equity lines and installment loans. This portfolio totaled $14.4 billion and $14.0 billion as of June 30, 2025 and December 31, 2024, respectively. The largest geographical concentrations of balances as of June 30, 2025 were in Florida (28%), Tennessee (22%), Texas (12%), Louisiana (8%), North Carolina (7%), Georgia (6%), and New York (5%). No other state represented more than 5% of the portfolio. The mix was generally consistent with December 31, 2024.

As of June 30, 2025, approximately 89% of the consumer real estate portfolio was in a first lien position. At origination, the weighted average FICO score of this portfolio was 759, and the refreshed FICO scores averaged 756 as of June 30, 2025, representing no change from FICO scores as of December 31, 2024. Generally, performance of this portfolio is affected by life events that

affect borrowers’ finances, the level of unemployment, and home prices.

As of June 30, 2025 and December 31, 2024, FHN had held-to-maturity consumer mortgage loans secured by real estate totaling $32 million and $26 million, respectively, that were in the process of foreclosure.

HELOCs comprised $2.1 billion of the consumer real estate portfolio as of both June 30, 2025 and December 31, 2024. FHN’s HELOCs typically have a 5- or 10-year draw period followed by a 10- or 20-year repayment period, respectively. During the draw period, a borrower is able to draw on the line and is only required to make interest payments. The line is frozen if a borrower becomes past due on payments. Once the draw period has ended, the line is closed and the borrower is required to make both principal and interest payments monthly until the loan matures. The principal payment generally is fully amortizing, but payment amounts will adjust when variable rates reset to reflect changes in the prime rate.


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As of June 30, 2025, approximately 95% of FHN's HELOCs were in the draw period, which was consistent with December 31, 2024. It is expected that $612 million, or 30%, of HELOCs currently in the draw period will enter the repayment period during the next 60 months, based on current terms. Generally, delinquencies for HELOCs that

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

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

Table I.2.11

HELOC DRAW TO REPAYMENT SCHEDULE


	June 30, 2025				December 31, 2024
(Dollars in millions)	Repayment Amount		Percent		Repayment Amount		Percent
Months remaining in draw period:
0-12	$	79	4	%	$	79	4	%
13-24	100		5		90		5
25-36	137		7		134		7
37-48	133		6		147		7
49-60	163		8		148		7
>60	1,423		70		1,404		70
Total	$	2,035	100	%	$	2,002	100	%

Credit Card and Other

The credit card and other consumer loan portfolio totaled $597 million as of June 30, 2025 and $669 million as of December 31, 2024. This portfolio primarily consists of consumer-related credits, including home equity and

other personal consumer loans, credit card receivables, and automobile loans. The $72 million decrease was primarily driven by net repayments in the overall portfolio.

Allowance for Credit Losses

The ACL is maintained at a level sufficient to provide appropriate reserves to absorb estimated future credit losses in accordance with GAAP. For additional information regarding the ACL, see Note 4 to the Consolidated Financial Statements in Part I, Item 1 of this report and “Critical Accounting Policies and Estimates” and Note 4 to the Consolidated Financial Statements in Part II, Item 8 of FHN's 2024 Form 10-K.

The ALLL totaled $814 million as of June 30, 2025 compared to $815 million as of December 31, 2024. The

ALLL balance as of June 30, 2025 is largely reflective of deterioration in macroeconomic forecasts and emerging concerns around potential economic instability, offset by lower criticized balances in the CRE portfolio. The ALLL to total loans and leases ratio decreased 1 basis point to 1.29% compared to 1.30% as of December 31, 2024. The ACL to total loans and leases ratio was 1.42% and 1.43% as of June 30, 2025 and December 31, 2024, respectively.

Consolidated Net Charge-offs

Net charge-offs in second quarter 2025 were $34 million, or an annualized 22 basis points of total loans and leases, compared to net charge-offs of $13 million, or 8 basis

points, in fourth quarter 2024, and $34 million, or 22 basis points, in second quarter 2024.


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Table I.2.12

ANALYSIS OF ALLOWANCE FOR CREDIT LOSSES AND CHARGE-OFFS


(Dollars in millions)		June 30, 2025			December 31, 2024			June 30, 2024
Allowance for loan and lease losses
	C&I	$	347		$	345		$	344
	CRE	213			227			221
	Consumer real estate	233			221			231
	Credit card and other	21			22			25
	Total allowance for loan and lease losses	$	814		$	815		$	821


Reserve for remaining unfunded commitments
	C&I	$	68		$	57		$	44
	CRE	10			11			10
	Consumer real estate	9			11			12

	Total reserve for remaining unfunded commitments	$	87		$	79		$	66

Allowance for credit losses
	C&I	$	415		$	402		$	388
	CRE	223			238			231
	Consumer real estate	242			232			243
	Credit card and other	21			22			25
	Total allowance for credit losses	$	901		$	894		$	887

Period-end loans and leases
	C&I	$	34,359		$	33,428		$	33,452
	CRE	13,936			14,421			14,669
	Consumer real estate	14,368			14,047			13,909
	Credit card and other	597			669			751
	Total period-end loans and leases	$	63,260		$	62,565		$	62,781


ALLL / loans and leases %
	C&I	1.01		%	1.03		%	1.03		%
	CRE	1.53			1.57			1.51
	Consumer real estate	1.63			1.57			1.66
	Credit card and other	3.50			3.28			3.26
	Total ALLL / loans and leases %	1.29		%	1.30		%	1.31		%

ACL / loans and leases %
	C&I	1.21		%	1.20		%	1.16		%
	CRE	1.59			1.65			1.58
	Consumer real estate	1.69			1.65			1.75
	Credit card and other	3.50			3.28			3.26
	Total ACL / loans and leases %	1.42		%	1.43		%	1.41		%

Quarter-to-date net charge-offs (recoveries)
	C&I	$	22		$	1		$	13
	CRE	7			9			19
	Consumer real estate	1			(2)			(1)
	Credit card and other	4			5			3
	Total net charge-offs (recoveries)	$	34		$	13		$	34


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Average loans and leases
	C&I	$	33,634		$	33,108		$	32,909
	CRE	14,070			14,601			14,576
	Consumer real estate	14,224			14,008			13,783
	Credit card and other	623			701			761
	Total average loans and leases	$	62,551		$	62,418		$	62,029

Charge-off % (annualized)
	C&I	0.26		%	0.01		%	0.16		%
	CRE	0.22			0.25			0.53
	Consumer real estate	—			(0.05)			(0.04)
	Credit card and other	2.64			2.78			1.79
	Total charge-off %	0.22		%	0.08		%	0.22		%

ALLL / annualized net charge-offs
	C&I	398		%	9,402		%	672		%
	CRE	674			624			287
	Consumer real estate	NM			NM			NM
	Credit card and other	127			113			179
	Total ALLL / net charge-offs	599		%	1,539		%	603		%

NM - not meaningful

Nonperforming Assets

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

Total NPAs (including NPLs HFS) decreased to $606 million as of June 30, 2025 from $608 million as of December 31, 2024, largely driven by a decline in nonaccrual CRE loans, partially offset by an increase in nonaccrual C&I loans. The increase in nonaccrual C&I loans was largely driven by loans in the finance and insurance industry, partially offset by loans in the construction industry. This portfolio continues to maintain strong underwriting and client selection. The vast majority of NPAs have individual impairment reviews with no specific reserve required. The nonperforming loans and leases ratio decreased 2 basis points to 0.94% as of June 30, 2025, compared to 0.96% as of December 31, 2024.


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Table I.2.13

NONACCRUAL/NONPERFORMING LOANS, FORECLOSED ASSETS, & OTHER DISCLOSURES


(Dollars in millions)










Nonperforming loans and leases		June 30, 2025			December 31, 2024
	C&I	$	225		$	173
	CRE	236			294
	Consumer real estate	131			133
	Credit card and other	1			2
	Total nonperforming loans and leases (a)	$	593		$	602

Nonperforming loans held for sale (a)		$	9		$	3
Foreclosed real estate and other assets (b)		4			3
	Total nonperforming assets (a) (b)	$	606		$	608

Nonperforming loans and leases to total loans and leases
	C&I	0.65		%	0.52		%
	CRE	1.70			2.04
	Consumer real estate	0.91			0.95
	Credit card and other	0.21			0.23
	Total NPL %	0.94		%	0.96		%

ALLL / NPLs
	C&I	155		%	199		%
	CRE	90			77
	Consumer real estate	179			167
	Credit card and other	1,684			1,438
	Total ALLL / NPLs	137		%	136		%

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

(b)Excludes government-insured foreclosed real estate. There were no foreclosed real estate balances from GNMA loans at June 30, 2025 and December 31, 2024.


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The following table provides nonperforming assets by business segment:

Table I.2.14

NONPERFORMING ASSETS BY SEGMENT



(Dollars in millions)
Nonperforming loans and leases (a) (b)		June 30, 2025			December 31, 2024
	Commercial, Consumer & Wealth	$	573		$	572
	Wholesale	11			12
	Corporate	9			18
	Consolidated	$	593		$	602
Foreclosed real estate (c)
	Commercial, Consumer & Wealth	$	1		$	1
	Wholesale	2			1
	Corporate	1			1
	Consolidated	$	4		$	3
Nonperforming Assets (a) (b) (c)
	Commercial, Consumer & Wealth	$	574		$	573
	Wholesale	13			13
	Corporate	10			19
	Consolidated	$	597		$	605
Nonperforming loans and leases to loans and leases
	Commercial, Consumer & Wealth	1.01		%	1.01		%
	Wholesale	0.21			0.20
	Corporate	1.98			5.46
	Consolidated	0.94		%	0.96		%
NPA % (d)
	Commercial, Consumer & Wealth	1.02		%	1.02		%
	Wholesale	0.25			0.23
	Corporate	1.63			5.65
	Consolidated	0.94		%	0.97		%

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

(b)Excludes loans classified as held for sale.

(c)Excludes foreclosed real estate and receivables related to government-insured mortgages. There were no foreclosed real estate balances from GNMA loans at June 30, 2025 or December 31, 2024.

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

Past Due Loans and Potential Problem Assets

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

Loans 90 days or more past due and still accruing were $8 million as of June 30, 2025, compared to $21 million as of

December 31, 2024. Loans 30 to 89 days past due and still accruing increased to $114 million as of June 30, 2025, compared to $89 million as of December 31, 2024, driven by an increase in past due C&I and CRE loans, partially offset by a decrease in past due consumer loans.


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Table I.2.15

ACCRUING DELINQUENCIES & OTHER CREDIT DISCLOSURES


(Dollars in millions)
Accruing loans and leases 30+ days past due		June 30, 2025			December 31, 2024
	C&I	$	51		$	33
	CRE	26			3
	Consumer real estate	41			69
	Credit card and other	4			5
	Total accruing loans and leases 30+ days past due	$	122		$	110

Accruing loans and leases 30+ days past due %
	C&I	0.15		%	0.10		%
	CRE	0.19			0.02
	Consumer real estate	0.29			0.50
	Credit card and other	0.80			0.79
	Total accruing loans and leases 30+ days past due %	0.19		%	0.18		%






Accruing loans and leases 90+ days past due (a) (b) (c):

	C&I	$	1		$	1



	Consumer real Estate	6			19
	Credit card and other	1			1

	Total accruing loans and leases 90+ days past due	$	8		$	21



Loans held for sale
	30 to 89 days past due (b)	$	8		$	9
	30 to 89 days past due - guaranteed portion (b) (d)	4			6
	90+ days past due (b)	6			9
	90+ days past due - guaranteed portion (b) (d)	1			4

(a)Excludes loans classified as held for sale.

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

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

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

Potential problem assets represent those assets where information about possible credit problems of borrowers has caused management to have serious doubts about the borrower’s ability to comply with present repayment terms and includes loans past due 90 days or more and still accruing. This definition is believed to be substantially consistent with the standards established by Federal banking regulators for loans classified as substandard. Potential problem assets in the loan portfolio totaled $2.0 billion as of June 30, 2025 compared to $1.9 billion as of December 31, 2024. The current expectation of losses from potential problem assets has been included in management’s analysis for assessing the adequacy of the allowance for loan and lease losses.


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Modifications to Borrowers Experiencing Financial Difficulty

As part of FHN’s ongoing risk management practices, FHN attempts to work with borrowers when appropriate to extend or modify loan terms to better align with their current ability to repay. Modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated separately. See Note 1 - Basis of Presentation and Accounting Policies, Note 3 - Loans and Leases, and Note 4 - Allowance for Credit Losses to the Consolidated Financial Statements in Part I, Item 1 of this Report for further discussion regarding troubled loan modifications.

Commercial Loan Modifications

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

The individual expected credit loss assessments completed on commercial loans may be used in evaluating

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

Consumer Loan Modifications

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

Within the HELOC and permanent mortgage installment loans in the consumer portfolio segment, troubled loans are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 3%) and a possible maturity date extension of up to 30 years to reach an affordable housing expense-to-income ratio.

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

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

Investment Securities

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

Investment securities were $9.4 billion and $9.2 billion on June 30, 2025 and December 31, 2024, respectively,

representing 11% of total assets for both periods. For more information about the securities portfolio, see Note 2 - Investment Securities to the Consolidated Financial Statements in Part I, Item 1 of this report.


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Deposits

Total deposits of $65.6 billion as of June 30, 2025 remained largely unchanged from December 31, 2024, with interest-bearing deposits increasing $125 million and noninterest-bearing deposits decreasing $129 million. The $657 million increase in time deposits from year-end was largely driven by a $1.0 billion increase in brokered certificates of deposit.

FHN continues to maintain a well-diversified and stable funding mix across its footprint and specialty lines of business. At June 30, 2025, commercial deposits were $37.1 billion, or 57% of total deposits, and consumer deposits were $28.5 billion, or 43% of total deposits. At December 31, 2024, commercial deposits were $36.2 billion, or 55% of total deposits, and consumer deposits were $29.4 billion, or 45% of total deposits.

At June 30, 2025, 37% of deposits were associated with Tennessee, 18% with Florida, 13% with North Carolina,

and 13% with Louisiana, with no other state above 10%. This mix remained relatively consistent with December 31, 2024.

Total estimated uninsured deposits were $26.9 billion as of June 30, 2025 and $26.7 billion as of December 31, 2024, representing 41% of total deposits for both periods. Of the uninsured deposits as of June 30, 2025, $4.6 billion, or 7% of total deposits, were collateralized. As of December 31, 2024, collateralized deposits were $4.7 billion, or 7% of total deposits.

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

The following table summarizes the major components of deposits as of June 30, 2025 and December 31, 2024.

Table I.2.16

DEPOSITS


	June 30, 2025				December 31, 2024
(Dollars in millions)	Amount		Percent of total		Amount		Percent of total		Change		Percent
Savings	$	25,938	40	%	$	26,695	41	%	$	(757)	(3)	%
Time deposits	7,270		11		6,613		10		657		10
Other interest-bearing deposits	16,477		25		16,252		25		225		1

Total interest-bearing deposits	49,685		76		49,560		76		125		—
Noninterest-bearing deposits	15,892		24		16,021		24		(129)		(1)
Total deposits	$	65,577	100	%	$	65,581	100	%	$	(4)	—	%

Short-Term Borrowings

Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, trading liabilities, and other short-term borrowings. Total short-term borrowings decreased to $3.9 billion as of June 30, 2025 compared to $4.0 billion as of December 31, 2024. Trading liabilities decreased $81 million and other short-term borrowings decreased $785 million, primarily reflecting a $600 million decrease in FHLB borrowings. These decreases were partially offset by an increase of $846 million in federal funds purchased and securities sold under agreements to repurchase.

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

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

Term Borrowings

Term borrowings include senior and subordinated borrowings with original maturities greater than one year. Total term borrowings increased to $1.3 billion as of June 30, 2025 from $1.2 billion as of December 31, 2024.

This increase primarily reflects the issuance of $500 million of senior notes during first quarter 2025, partially offset by the retirement of $350 million in senior notes during second quarter 2025.


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Capital

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

Total equity was $9.3 billion and $9.1 billion at June 30, 2025 and December 31, 2024, respectively. Significant changes included net income of $467 million and an increase of $216 million in AOCI, offset by $392 million in

common stock repurchases, and $170 million in common and preferred dividends.

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

Table I.2.17

REGULATORY CAPITAL DATA


(Dollars in millions)	June 30, 2025		December 31, 2024
FHN shareholders’ equity	$	8,962	$	8,816
Modified CECL transitional amount (a)	—		28
FHN non-cumulative perpetual preferred stock	(426)		(426)
Common equity tier 1 before regulatory adjustments	$	8,536	$	8,418
Regulatory adjustments:
Disallowed goodwill and other intangibles	$	(1,562)	$	(1,578)
Net unrealized (gains) losses on securities available for sale	613		782
Net unrealized (gains) losses on pension and other postretirement plans	248		252
Net unrealized (gains) losses on cash flow hedges	51		94
Disallowed deferred tax assets	(1)		(1)

Common equity tier 1	$	7,885	$	7,967
FHN non-cumulative perpetual preferred stock	426		426
Qualifying noncontrolling interest— First Horizon Bank preferred stock	295		295

Tier 1 capital	$	8,606	$	8,688
Tier 2 capital	1,405		1,442
Total regulatory capital	$	10,011	$	10,130
Risk-Weighted Assets
First Horizon Corporation	$	71,745	$	71,108
First Horizon Bank	70,905		70,418
Average Assets for Leverage
First Horizon Corporation	$	81,519	$	81,645
First Horizon Bank	80,549		80,791

Table I.2.18

REGULATORY RATIOS & AMOUNTS


	June 30, 2025				December 31, 2024
(Dollars in millions)	Ratio		Amount		Ratio		Amount
Common Equity Tier 1
First Horizon Corporation	10.99	%	$	7,885	11.20	%	$	7,967
First Horizon Bank	11.28		8,000		11.12		7,834
Tier 1
First Horizon Corporation	12.00		8,606		12.22		8,688
First Horizon Bank	11.70		8,295		11.54		8,129
Total
First Horizon Corporation	13.95		10,011		14.25		10,130
First Horizon Bank	13.47		9,553		13.38		9,424
Tier 1 Leverage
First Horizon Corporation	10.56		8,606		10.64		8,688
First Horizon Bank	10.30		8,295		10.06		8,129
Other Capital Ratios
Total period-end equity to period-end assets	11.28				11.09
Tangible common equity to tangible assets (b)	8.58				8.37


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

(b)Tangible common equity to tangible assets is a non-GAAP measure and is reconciled to total equity to total assets (GAAP) in the Non-GAAP to GAAP Reconciliation - Table I.2.26.

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

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

As of June 30, 2025, both FHN and First Horizon Bank had sufficient capital to qualify as well-capitalized institutions

and to meet the capital conservation buffer requirement. For December 31, 2024, capital ratios for both FHN and First Horizon Bank were calculated under the final rule issued by the banking regulators in 2020 to delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period.

For FHN, the risk-based regulatory capital and Tier 1 leverage ratios decreased at the end of second quarter 2025 relative to year-end 2024 primarily from the impact of common share repurchases, partially offset by net income less dividends. For First Horizon Bank, the risk-based regulatory capital ratios increased from year-end 2024 largely from the impact of net income less dividends. The Tier 1 leverage ratio for First Horizon Bank increased from year-end 2024 largely from the impact of net income less dividends and a decrease in average assets.

During 2025, capital ratios are expected to remain above well-capitalized standards plus the required capital conservation buffer.

Common Stock Purchase Program

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

October 2024 General Purchase Program

On October 29, 2024, FHN announced that its Board of Directors had approved a new $1.0 billion common share purchase program to replace the $650 million January 2024 program. The October program is scheduled to expire on January 31, 2026. Purchases under the new program may be made in the open market or through privately negotiated transactions, including under Rule 10b5-1 plans as well as accelerated share repurchase and

other structured transactions. The timing and exact amount of common share repurchases are at the discretion of senior management and are subject to various factors, including FHN's capital position, financial performance, expected capital impacts of strategic initiatives, market conditions, business conditions, and regulatory considerations.

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, or $20.36 excluding commissions. Program purchases made during the quarter ended June 30, 2025 are summarized in the following table.

Table I.2.19

COMMON STOCK PURCHASES—OCTOBER 2024 PROGRAM


(Dollar values and volume in thousands, except per share data)	Total number of shares purchased	Average price paid per share (a)		Total number of shares purchased as part of publicly announced programs	Maximum approximate dollar value that may yet be purchased under the programs
2025
April 1 to April 30	241	$	17.85	241	$	506,834
May 1 to May 31	271	18.20		271	501,905
June 1 to June 30	—	N/A		—	501,905
Total	512	$	18.04	512


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

Stock Award Purchases

As authorized by the Board's Compensation Committee, FHN makes automatic stock purchases by withholding stock-based award shares to cover tax obligations associated with those awards. Those limited, off-market purchases are not associated with an announced purchase

program and are made any time an associated tax obligation arises, whether or not a blackout period is in effect. Tax withholding purchases made during the quarter ended June 30, 2025 are summarized in the following table.

Table I.2.20

COMMON STOCK PURCHASES—TAX WITHHOLDING FOR STOCK AWARDS


(Dollar values and volume in thousands, except per share data)	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced programs	Maximum number of shares that may yet be purchased under the programs
2025
April 1 to April 30	1.8	$	17.06	N/A	N/A
May 1 to May 31	936.2	20.01		N/A	N/A
June 1 to June 30	5.5	20.20		N/A	N/A
Total	943.5	$	20.01	N/A


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Risk Management

There have been no significant changes to FHN’s risk management practices as described under “Risk Management” included in Item 7 of FHN’s 2024 Annual Report on Form 10-K.

Market Risk Management

Value-at-Risk ("VaR") and Stress Testing ("SVaR")

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

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

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

Table I.2.21

VaR & SVaR MEASURES


	Three Months Ended June 30, 2025						Six Months Ended June 30, 2025						As of June 30, 2025
(Dollars in millions)	Mean		High		Low		Mean		High		Low
1-day
VaR	$	2	$	3	$	2	$	2	$	3	$	1	$	2
SVaR	7		8		6		7		8		6		6
10-day
VaR	6		7		3		5		7		3		6
SVaR	35		39		29		35		42		28		33

	Three Months Ended June 30, 2024						Six Months Ended June 30, 2024						As of June 30, 2024
(Dollars in millions)	Mean		High		Low		Mean		High		Low
1-day
VaR	$	3	$	3	$	2	$	3	$	3	$	2	$	3
SVaR	7		8		5		6		8		4		7
10-day
VaR	9		10		7		8		10		6		8
SVaR	33		40		24		29		40		21		31


	Year Ended December 31, 2024						As of December 31, 2024
(Dollars in millions)	Mean		High		Low
1-day
VaR	$	3	$	4	$	2	$	2
SVaR	7		9		4		6
10-day
VaR	8		12		4		4
SVaR	32		43		21		31


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

Table I.2.22

SCHEDULE OF RISKS INCLUDED IN VaR


	As of June 30, 2025				As of June 30, 2024				As of December 31, 2024
(Dollars in millions)	1-day		10-day		1-day		10-day		1-day		10-day
Interest rate risk	$	1	$	2	$	—	$	1	$	1	$	2
Credit spread risk	—		1		—		1		—		1

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

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

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

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

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

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

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

15 basis points. Shifts in other points on the yield curve are predicted based on their correlation to the 2-year and 10-year points.

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

Model Validation

Trading risk management personnel within FHN have primary responsibility for model risk management with respect to the model used by FHN to compute its VaR measures and perform stress testing on the trading inventory. Among other procedures, these personnel monitor model results and perform periodic backtesting as part of an ongoing process of validating the accuracy of the model. Backtesting compares the previous day’s VaR measurement to a regulatory-prescribed calculation of daily trading profit/loss in the trading inventory. During the three and six months ended June 30, 2025 and year ended December 31, 2024, there were no days in which the regulatory-prescribed calculation reflected a loss in the trading inventory that exceeded the corresponding daily VaR measurement, resulting in zero backtesting exceptions. Model risk management activities are subject to annual review by FHN’s Model Validation Group, an independent assurance group charged with oversight responsibility for FHN’s model risk management.


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Interest Rate Risk Management

Net Interest Income Simulation Analysis

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

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

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

Based on a static balance sheet as of June 30, 2025, NII exposures over the next 12 months, assuming rate shocks of plus/minus 25 basis points, plus/minus 50 basis points, plus/minus 100 basis points, and plus/minus 200 basis points, are estimated to have variances as shown in the table below.

Table I.2.23

INTEREST RATE SENSITIVITY


Shifts in Interest Rates (in bps)						% Change in Projected Net Interest Income
-200						(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, where long-term rates increase by 50 basis points and short-term rates are static, results in a favorable NII variance of 0.3%. A flattening yield curve scenario, where long-term rates decrease by

50 basis points and short-term rates are static, results in an unfavorable NII variance of 0.3%. These hypothetical scenarios are used to create a risk measurement framework, and do not necessarily represent management’s current view of future interest rates or market developments.

Short-term interest rates had reached their highest levels in 15 years before a series of rate cuts began in September 2024, starting with a 50 basis point reduction. This followed significant market disruption tied to high-profile bank failures in 2023, which, combined with the elevated interest rate environment, continues to drive increased competition for client deposits.

The yield curve was inverted for much of the second half of 2022, throughout 2023, and through the first eight months of 2024. After the initial September 2024 rate cut, the Federal Reserve implemented additional 25 basis point cuts in both November and December 2024. The market consensus now anticipates two additional rate reductions over the remainder of this year, depending on inflation and economic conditions.

FHN continues to closely monitor economic developments and assess potential exposures.

For additional information, see Yield Curve within Market Uncertainties and Prospective Trends below.


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Liquidity Risk Management

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

In accordance with the Liquidity Policy, ALCO manages FHN’s exposure to liquidity risk through forecasts of its liquidity position and funding needs. Base liquidity forecasts are reviewed by ALCO and are updated as financial conditions dictate. In addition to the baseline liquidity reports, robust stress testing of assumptions and funds availability are periodically reviewed. FHN maintains a contingency funding plan that may be executed should unexpected difficulties arise in accessing funding that affects FHN, the industry, or both. As of June 30, 2025, available liquidity sources included cash, incremental borrowing capacity at the FHLB, access to Federal Reserve Bank borrowings through the discount window, and unencumbered securities. Additional sources of liquidity included dealer and commercial customer repurchase agreements, access to Federal Funds markets, brokered deposits, loan sales, and syndications. The table below details FHN's sources of available liquidity at June 30, 2025.

Table I.2.24

AVAILABLE LIQUIDITY

as of June 30, 2025


(Dollars in millions)	Total Capacity		Outstanding Borrowings		Available Liquidity
Cash on deposit with FRB (a)	$	813	$	—	$	813
FHLB	8,663		—		8,663
Discount Window	22,962		—		22,962

Unencumbered securities (b)	1,192		—		1,192
Total available liquidity					$	33,630

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

(b) Subject to market haircuts on collateral.

Generally, a primary source of funding for a bank is core deposits from the bank's client base. The period-end

loans-to-deposits ratio was 96% as of June 30, 2025 and 95% as of December 31, 2024.

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

Both FHN and First Horizon Bank have the ability to generate liquidity by issuing senior or subordinated unsecured debt, preferred equity, and common equity, subject to market conditions and compliance with applicable regulatory requirements. During first quarter 2025, FHN issued $500 million of Fixed Rate/Floating Rate Senior Notes. On May 26, 2025, FHN retired $350 million in senior notes. As of June 30, 2025, FHN had outstanding $946 million in senior and subordinated unsecured debt and $426 million in non-cumulative perpetual preferred stock. On July 2, 2025, FHN provided notice of its intent to redeem all outstanding shares of its Series B Non-Cumulative Perpetual Preferred Stock, effective August 1, 2025. Following the redemption on August 1, 2025, no shares of Series B Preferred Stock remain outstanding. Refer to Note 17 — Subsequent Events for additional information. As of June 30, 2025, First Horizon Bank and subsidiaries had outstanding preferred shares of $295 million, which are reflected as noncontrolling interest on the Consolidated Balance Sheets.

Parent company liquidity is primarily provided by cash flows stemming from dividends and interest payments collected from subsidiaries. These sources of cash represent the primary sources of funds to pay cash dividends to shareholders and principal and interest to debt holders of FHN. Applying the dividend restrictions imposed under applicable federal and state rules, the Bank’s total amount available for dividends was $542 million as of July 1, 2025.

First Horizon Bank declared and paid common dividends to the parent company in the amount of $115 million in first quarter 2025, $230 million in second quarter 2025, and $200 million in third quarter 2025. Total common dividends of $1.1 billion were declared and paid to the parent company in 2024. First Horizon Bank declared and paid preferred dividends in first and second quarter 2025 and in each quarter of 2024. Additionally, First Horizon Bank declared preferred dividends in third quarter 2025, payable in October 2025.

Payment of a dividend to shareholders of FHN is dependent on several factors which are considered by the


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

FHN paid a cash dividend of $0.15 per common share on July 1, 2025. FHN paid cash dividends of $1,625 per Series E preferred share and $1,175 per Series F preferred share on July 10, 2025 and $331.25 per Series B preferred share and $165 per Series C preferred share on August 1, 2025. In addition, in July 2025, the Board approved cash dividends per share in the following amounts:

Table I.2.25

CASH DIVIDENDS

APPROVED BUT NOT PAID

Dividend/Share

Record Date

Payment Date

Common Stock

0.15

09/12/2025

10/01/2025

Preferred Stock

Series C

165.00

10/17/2025

11/03/2025

Series E

1,625.00

09/25/2025

10/10/2025

Series F

1,175.00

09/25/2025

10/10/2025

Off-Balance Sheet Arrangements

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

Repurchase Obligations

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

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

Repurchase Accrual Approach

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

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

Repurchase and Foreclosure Liability

As discussed in Note 10 - Contingencies and Other Disclosures to the Consolidated Financial Statements in Part I, Item 1 of this report, FHN’s repurchase and foreclosure liability, primarily related to its pre-2009

mortgage origination, sale, securitization, and servicing businesses, is comprised of accruals to cover estimated loss content in the active pipeline, estimated future inflows, and estimated loss content related to certain


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known claims not currently included in the active pipeline. The active pipeline consists of mortgage loan repurchase and make-whole demands from loan purchasers or securitization participants, foreclosure/servicing demands from borrowers, and certain related exposures. The liability contemplates repurchase/make-whole and damages obligations and estimates for probable incurred losses associated with loan populations excluded from the settlements with the GSEs, as well as other whole loans sold, mortgage insurance cancellation rescissions, and loans included in bulk servicing sales effected prior to the

settlements with the GSEs. FHN compares the estimated probable incurred losses determined under the applicable loss estimation approaches for the respective periods with current reserve levels. Changes in the estimated required liability levels are recorded as necessary through the repurchase and foreclosure provision. The total repurchase and foreclosure liability, which includes both the legacy pre-2009 business and the current mortgage business, was $15 million as of both June 30, 2025 and December 31, 2024.

Market Uncertainties and Prospective Trends

FHN’s future results could be affected both positively and negatively by several known trends. Key among those are changes in the U.S. and global economy and outlook, government actions affecting interest rates, and government actions and proposals which could have positive or negative impacts on the economy at large or on certain businesses, industries, or sectors, including changes in fiscal policy and changes in trade policy, such as the imposition of tariffs and related retaliatory responses. Additional risks relate to political uncertainty,

changes in federal policies (including those publicly discussed, formally proposed, or recently implemented) and the potential impacts of those changes on our businesses and clients, and whether FHN’s strategic initiatives will succeed.

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

Inflation, Recession, and Federal Reserve Policy

Federal Reserve and Rates

The Federal Reserve raised short-term rates several times in 2022 and 2023 to contain strong inflation which began in 2021 and peaked in 2022. The rise in short-term interest rates by the Federal Reserve in 2022 was both rapid and substantial, taking the overnight Fed Funds rate from 0.20% in March 2022 to 5.33% by the fall of 2023. As a result of Federal Reserve rate cuts of 50 basis points in September 2024 and cuts of 25 basis points in both November and December, the overnight Fed Funds fell back to 4.33% by the end of 2024. But despite the Federal Reserve's rapid and vigorous tightening of monetary policy in 2022 and 2023 and limited rate cuts in 2024, measures of inflation still generally remain higher than the Federal Reserve's stated goal of 2%.

With inflation remaining above the Federal Reserve's target and unemployment remaining low, the Federal Reserve has continued to hold rates steady throughout 2025. FHN cannot predict when or how much short-term rates will be changed, how market-driven long-term rates will behave, or how those actions may affect economic or business conditions or financial markets.

Yield Curve

Unusual yield curve effects, including inversion, are common when monetary policy changes. A traditional measure of inversion occurs when the two-year U.S. Treasury rate is higher than the ten-year rate. Traditional inversion was sustained continuously from the summer of 2022 until September 2024, an unusually long period. The

degree of inversion varied during that period, but often was much deeper than is typical. Sustained traditional yield curve inversion is viewed, with statistical support, as a harbinger of economic recession, but recession did not occur.

Since the fall of 2024, the yield curve has continued to modestly steepen as declines in short-term rates have outpaced declines in longer-term rates. FHN cannot predict whether this trend will continue.

Yield curve flattening and inversion generally reduce the profit FHN can make from lending by compressing FHN's net interest margin, and also generally reduce FHN's revenues from its fixed income bond trading. Both of those impacts occurred over the last three calendar years, with fluctuations. During the second quarter of 2025, net interest margin contracted slightly, compared to the first quarter of 2025, but remained above 2024 levels, as the yield curve maintained its more typical upward slope, while fixed income bond trading revenues declined due to overall less favorable market conditions. Refer to Interest Rate & Yield Curve Risks, located in Item 1A. Risk Factors of FHN's Annual Report on Form 10-K for the year ended December 31, 2024, for a discussion of the risks to FHN associated with flattening and inversion.

Recession

The U.S. economy contracted (experienced negative growth) during the first two quarters of 2022, in both cases modestly. Although the occurrence of two consecutive quarters of contraction often coincides with


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recession; in 2022, it did not. The economy has expanded in each quarter since then, except for a slight decline in the first quarter of 2025 before expansion resumed in the second quarter of 2025. The expansion rate has varied without a sustained trend.

Recession expectations moderated significantly since 2023, before reemerging in early 2025 due to uncertainties with respect to anticipated changes in trade and fiscal policies.

Fiscal Policy

Fiscal policy (spending and taxation) directly affects U.S. government annual deficits or surpluses, along with the size and trajectory of the national debt. Fiscal policy often has a significant impact on the U.S. economy. The changes in the executive and legislative branches of government in 2025 have resulted in significant changes in U.S. fiscal policy, including through the enactment on July 4, 2025 of federal legislation commonly referred to as the "One Big Beautiful Bill Act." This new legislation may have a significant impact on general economic and business conditions and, accordingly, could materially affect FHN's financial condition and results of operations. Refer to the Income Taxes section of this MD&A for additional information regarding the impact of this legislation on FHN,

Trade Policy

In 2025, the U.S. government announced new tariffs on a variety of goods and services. As of early August 2025, the timing, scope and duration of tariffs, as well as the timing, scope and duration of any retaliatory measures by foreign governments, remains uncertain, as does the impact of tariffs on economic growth, inflation rates, and employment rates. Any significant change in economic conditions related to tariffs could materially affect our financial condition and results of operations.

2023 Banking Crisis

In 2023, three large regional U.S. banks failed after sudden large deposit outflows. In the aftermath of these failures, bank investors and clients across the U.S. became more focused on deposit mix, funding risk management, and other safety-soundness concerns. Most U.S. banks saw abrupt net outflows of deposits in the spring of 2023 following the failures. Most have since recouped those

deposits, mainly by offering higher interest rates. In 2024, competition for deposits was quite intense. Increased competition for deposits has continued during the first half of 2025 and could continue throughout the remainder of 2025 and in 2026.

Impacts on FHN

In 2022, FHN benefited significantly from rising rates as the rise in lending rates outpaced the rise in deposit and other funding rates. In the first quarter of 2023, that outpacing ended, and FHN's net interest margin ("NIM") started to compress. FHN was able to somewhat relieve the compression during 2023 fueled in part by using increased deposits and capital to reduce more-expensive borrowings, so that NIM in 2023 improved over 2022. NIM for the entire year 2024 was flat, declining very modestly from 2023, as improvements in loan yields were largely offset by higher funding costs, especially for deposits. However, during the first quarter of 2025 NIM expanded, with declines in deposit rates more than offsetting declines in loan yields. NIM expansion over 2024 levels continued in the second quarter of 2025,though NIM declined by 2 basis points as compared with the first quarter of 2025, as increased deposit rates exceeded increases in loan yields.

In addition, some of FHN's businesses were negatively impacted by rate actions in 2022, 2023, and 2024 and by the unusual yield curve. Rate increases pushed home mortgage rates in the U.S. much higher in 2022 and 2023, reducing demand. FHN's direct mortgage lending and lending to mortgage companies saw business decline significantly in 2022 and 2023. Mortgage rates have modestly abated since 2023 and FHN's mortgage business has seen improvement, but rates have remained elevated. However, the negative impacts of these higher rates have been offset by gains in market share. Similarly, FHN's revenues from bond trading and related activities fell significantly in 2022 and 2023 due to rising rates coupled with elevated market volatility. In 2024, bond trading revenues improved markedly, but with significant volatility quarter-to-quarter due to changing market expectations about rate moves, among other things. During the first quarter of 2025, revenues from bond trading and related activities continued to show the improvement that marked 2024, but those revenues declined in second quarter due to less favorable market conditions.

Other Regulatory Proposals

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

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


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Greenhouse Gas (GHG) Reporting Regimes

In October 2023, the state of California enacted laws which, taken together, will require most larger companies doing business in California to annually report their greenhouse gas ("GHG") emissions, with an external assurance requirement, and to biennially report their climate-related financial risks and risk-mitigation measures. The California laws include multi-year phase in periods and encompass Scope 1, Scope 2, and Scope 3 GHG emissions. As currently enacted, the laws require reporting for Scopes 1 and 2 GHG emissions to begin in 2026 for the 2025 fiscal year. The California laws, especially the application of those laws to companies outside of California, have been challenged in court. While the federal court overseeing the litigation has dismissed certain challenges, others remain pending and, with appeals, these challenges could take many years to resolve. A motion for a preliminary injunction barring implementation of California's GHG regulations remains pending. Other states, including New York, New Jersey, and Illinois, are considering climate-related reporting measures similar to California's.

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

phase-in period. There is considerable uncertainty as to whether the SEC's Climate Disclosures Rules will be implemented as adopted, both because the SEC has suspended effectiveness of those rules while legal challenges are pending and because the shifts in the executive and legislative branches of government could lead the SEC to withdraw or significantly alter those rules. In March 2025, the SEC voted to end its defense of its Climate Disclosure Rules in the pending legal action, but the SEC has not withdrawn or modified its Climate Disclosure Rules nor has the legal challenge to those rules been dismissed. In a July 23, 2025 court filing, the SEC stated it did not intend to review or reconsider its Climate Disclosure Rules prior to the court ruling on the pending petitions challenging those rules.

Potential Business Impacts

Direct compliance costs related to the SEC's and California's GHG reporting regimes, if implemented, will include creating systems to measure or estimate and capture relevant data, staffing, and engagement of vendors, including a firm to provide required assurances (somewhat analogous to a financial statement auditor).

In addition, if FHN is required to support Scope 3 reporting by obtaining GHG-related information from customers, effectively FHN would be required to impose costs and/or inconveniences on its customers. Other banks in FHN's markets, particularly those that are private and not doing business in California, could provide financial services without those requirements, putting FHN at a competitive disadvantage.

Market Growth and Weather Events

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

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

Especially since 2022, it has been widely reported that the economic costs of hurricane and other severe weather events in the southeastern U.S. have been rising significantly. This reported increase in casualty risks and costs is being reflected in property insurance practices

which currently are in significant flux. The insurance industry and insurance regulators are being forced to revise their risk assessment and premium pricing policies in coastal and other impacted areas as loss experience has deviated from earlier predictions, sometimes badly. In Florida, for example, some smaller carriers failed, some larger carriers left markets, and other carriers significantly increased the premiums of hurricane-related insurance, narrowed coverage, or both, resulting in numerous proposals for legislative and regulatory reform.

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

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


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

Critical Accounting Policies and Estimates

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.

Accounting Changes

Refer to Note 1 – Basis of Presentation and Accounting Policies in the Consolidated Financial Statements in Part I, Item 1 of this report for a detail of accounting changes adopted in the current year and accounting changes issued but not currently effective, which section is incorporated into MD&A by this reference.


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

Non-GAAP Information

Table I.2.26

NON-GAAP TO GAAP RECONCILIATION


	Three Months Ended									Six Months Ended
(Dollars in millions; shares in thousands)	June 30, 2025			March 31, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Pre-provision Net Revenue (Non-GAAP)
Net interest income (GAAP)	$	641		$	631		$	629		$	1,272		$	1,253
Plus: Noninterest income (GAAP)	189			181			186			370			381
Total revenues (GAAP)	830			812			815			1,642			1,634
Less: Noninterest expense (GAAP)	491			487			500			978			1,015
Pre-provision net revenue (Non-GAAP)	$	339		$	325		$	315		$	664		$	619



Average Tangible Common Equity (Non-GAAP)
Average total equity (GAAP)	$	9,097		$	9,111		$	8,949		$	9,104		$	9,100
Less: Average noncontrolling interest (a)	295			295			295			295			295
Less: Average preferred stock (a)	426			426			426			426			473
(A) Total average common equity	8,376			8,390			8,228			$	8,383		$	8,332
Less: Average goodwill and other intangible assets (GAAP)(b)	1,638			1,648			1,680			1,643			1,685
(B) Average tangible common equity (Non-GAAP)	$	6,738		$	6,742		$	6,548		$	6,740		$	6,647

Net Income Available to Common Shareholders
(C) Net income available to common shareholders (annualized) (GAAP)	$	933		$	864		$	739		$	898		$	739

Tangible Common Equity (Non-GAAP)
(D) Total equity (GAAP)	$	9,257		$	9,044		$	8,955		$	9,257		$	8,955
Less: Noncontrolling interest (a)	295			295			295			295			295
Less: Preferred stock (a)	426			426			426			426			426
(E) Total common equity	8,536			8,323			8,234			$	8,536		$	8,234
Less: Goodwill and other intangible assets (GAAP)(b)	1,633			1,643			1,675			1,633			1,675
(F) Tangible common equity (Non-GAAP)	$	6,903		$	6,680		$	6,559		$	6,903		$	6,559

Tangible Assets (Non-GAAP)
(G) Total assets (GAAP)	$	82,084		$	81,491		$	82,230		$	82,084		$	82,230
Less: Goodwill and other intangible assets (GAAP) (b)	1,633			1,643			1,675			1,633			1,675
(H) Tangible assets (Non-GAAP)	$	80,451		$	79,848		$	80,555		$	80,451		$	80,555




Period-end Shares Outstanding
(I) Period-end shares outstanding	508,836			507,315			536,876			508,836			536,876

Ratios
(C)/(A) Return on average common equity (GAAP)	11.14		%	10.30		%	8.98		%	10.72		%	8.87		%
(C)/(B) Return on average tangible common equity (Non-GAAP)	13.85			12.81			11.29			13.33			11.12
(D)/(G) Total period-end equity to period-end assets (GAAP)	11.28			11.10			10.89			11.28			10.89
(F)/(H) Tangible common equity to tangible assets (Non-GAAP)	8.58			8.37			8.14			8.58			8.14
(E)/(I) Book value per common share (GAAP)	$	16.78		$	16.40		$	15.34		$	16.78		$	15.34
(F)/(I) Tangible book value per common share (Non-GAAP)	$	13.57		$	13.17		$	12.22		$	13.57		$	12.22

(a) Included in total equity on the Consolidated Balance Sheets.

(b) Includes goodwill and other intangible assets, net of amortization.


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PART I, ITEM 3. DISCLOSURES ABOUT MARKET RISK AND ITEM 4. CONTROLS & PROCEDURES
Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The information called for by this item is contained in

(a) Management’s Discussion and Analysis of Financial Condition and Results of Operations included as Item 2 of Part I of this report, including in particular the section entitled “Risk Management” beginning on page 101 of this report and the subsections entitled “Market Risk Management” beginning on page 101 and “Interest Rate Risk Management” beginning on page 103 of this report, and

(b) Note 14 to the Consolidated Financial Statements appearing on pages 4 9 -55 of this report, all of which materials are incorporated herein by reference. For additional information concerning market risk and our

management of it, refer to: Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in Item 7 to FHN’s Annual Report on Form 10-K for the year ended December 31, 2024, including in particular the section entitled “Risk Management” beginning on page 86 of that Report and the subsections entitled “Market Risk Management” beginning on page 87 and “Interest Rate Risk Management” beginning on page 89 of that Report; and Note 21 to the Consolidated Financial Statements appearing on pages 185-191 of Item 8 to FHN’s Annual Report on Form 10-K for the year ended December 31, 2024.

Item 4. Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this quarterly report. Based on that evaluation, the chief executive officer and the chief financial officer have concluded that our disclosure controls and procedures

were effective as of the end of the period covered by this report.

(b)Changes in Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting during the second fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


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PART II—OTHER INFORMATION, ITEMS 1. THROUGH 5.
Table of Contents



PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The “Contingencies” section of Note 10 to the Consolidated Financial Statements beginning on page 36 of this Report is incorporated into this Item by reference.

Item 1A. Risk Factors

Material changes from risk factor disclosures in FHN's Annual Report on Form 10-K for the year ended December 31, 2024:

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Equity Securities Sold

Not applicable

(b) Use of Proceeds If Rule 463 is Applicable

Not applicable

The "Common Stock Purchase Program” section including tables I.2.19 and I.2.20 and explanatory discussions

included in Item 2 of Part I of this report under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” beginning on page 99 of this report, is incorporated herein by reference.

Items 3. and 4.

Not applicable


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PART II—OTHER INFORMATION, ITEMS 1. THROUGH 5.
Table of Contents

Item 5. Other Information

(a) Previously Unreported 8-K Disclosures

Not applicable

(b) Change in Nomination Procedures

Not applicable

During the second quarter of 2025, the following directors or executive officers (those officers who are required to file stock ownership reports on SEC Forms 3, 4, and 5) adopted, modified, or terminated the Rule 10b5-1 trading arrangements, and the non-Rule 10b5-1 trading arrangements, shown in Table II.5c below.

Unless otherwise explicitly indicated in a footnote to the Table, each arrangement marked in the Table as "10b5-1" under the "Arrangement Type" column is intended by its maker, as reported to FHN, to satisfy the affirmative defense requirements of SEC Rule 10b5-1(c).

If "Not applicable" appears in the Table, then for the second quarter of 2025 no director or executive officer of FHN adopted, modified, or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement.

Table II.5c

TRADING ARRANGEMENTS CREATED, MODIFIED, OR TERMINATED MOST RECENT QUARTER

Arrangement Type

Type of Action Taken During Quarter

Date Action Taken

Duration or Expiration Date

Total Shares to be

Name & Title

10b5-1

non-10b5-1

Bought

Sold

Not applicable

Item 6. Exhibits

(a)Exhibits

In the Exhibit Table: the “Filed Here” column denotes each exhibit which is filed or furnished (as applicable) with this report; the “Mngt. Exh.” column denotes each exhibit that represents a management contract or compensatory plan or arrangement required to be identified as such; and the “Furnished” column denotes each exhibit that is “furnished” pursuant to 18 U.S.C. Section 1350 or otherwise, and is not “filed” as part of this Report or as a separate disclosure document.

In many agreements filed as exhibits, each party makes representations and warranties to other parties. Those representations and warranties are made only to and for the benefit of those other parties in the context of a business contract. Exceptions to such representations and warranties may be partially or fully waived by such parties, or not enforced by such parties, in their discretion. No such representation or warranty may be relied upon by any other person for any purpose.

10-Q EXHIBIT TABLE

Exh. No.

Description of Exhibit to this Report

Filed Here

Mngt. Exh.

Furnished

Incorporated by Reference to

Form

Exh. No.

Filing Date

3.1

Amended and Restated Charter of First Horizon Corporation [2024]

8-K

3.1

7/24/2024

3.2

Bylaws of First Horizon Corporation, as amended and restated effective April 28, 2025

8-K

3.1

4/29/2025

4.2

FHN agrees to furnish to the Securities and Exchange Commission upon request a copy of each instrument defining the rights of the holders of the senior and subordinated long-term debt of FHN and its consolidated subsidiaries

31(a)

Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

31(b)

Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

32(a)

18 USC 1350 Certifications of CEO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)


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PART II—OTHER INFORMATION, ITEM 6. EXHIBITS
Table of Contents

Exh. No.

Description of Exhibit to this Report

Filed Here

Mngt. Exh.

Furnished

Incorporated by Reference to

Form

Exh. No.

Filing Date

32(b)

18 USC 1350 Certifications of CFO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

XBRL Exhibits

101

The following financial information from First Horizon Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL: (i) Consolidated Balance Sheets at June 30, 2025 and December 31, 2024; (ii) Consolidated Statements of Income for the Three and Six Months Ended June 30, 2025 and 2024; (iii) Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024; (iv) Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2025 and 2024; (v) Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024; and (vi) Notes to the Consolidated Financial Statements.

101. INS

XBRL Instance Document -- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101. SCH

Inline XBRL Taxonomy Extension Schema

101. CAL

Inline XBRL Taxonomy Extension Calculation Linkbase

101. LAB

Inline XBRL Taxonomy Extension Label Linkbase

101. PRE

Inline XBRL Taxonomy Extension Presentation Linkbase

101. DEF

Inline XBRL Taxonomy Extension Definition Linkbase

104

Cover Page Interactive Data File, formatted in Inline XBRL (included in Exhibit 101)


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SIGNATURES
Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FIRST HORIZON CORPORATION

(Registrant)

Date: August 7, 2025

By:

/s/ Hope Dmuchowski

Name:

Hope Dmuchowski

Title:

Senior Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)


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