First Horizon Corporation · NYSE:FHN
First Horizon — Q3 2025 Earnings Presentation
30 slides from First Horizon's earnings presentation, July 2025
Slide 1: Q3 Economic Update
Q3 Economic Update July 2025 1
Slide 2: Presenter: Sophia Kearney-Lederman
P RES E N T E R Sophia Kearney-Lederman Senior Economist FHN Financial 2
Slide 3: Economic Update: Uncertainty is the new norm
Economic Update: Uncertainty is the new norm
Slide 4: Tariff uncertainty & deadlines still dominate
Tariff uncertainty & deadlines still dominate US average tariff rate on imports 1901: 32.5% 28.8% 30.0% 27.5% 1910: 23.9% Smoot-Hawley Tariff Act 25.0% of 1930: Fitch estimate pre-May 12 19.8% 22.0% 22.5% 20.0% 17.5% 2025 Fitch Estimate: 15.0% 12.2% 12.5% 2008: 10.0% 1.2% Trump 2018 Tariffs: 2.7% 7.
Slide 5: GDP bounce back in Q2; H1 avg = 1.0%
GDP bounce back in Q2; H1 avg = 1.0% Real GDP Atlanta Fed Q2 6.0% Qrt/Qtr Annualized w/ Sector Contributions GDPNow 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% Consumption Bus. Fixed Invest Residential Invest. Government -5.0% Inventories Net Exports Real GDP, Qtr/Qtr -6.0% Q1-22 Q2-22 Q3-
Slide 6: Domestic demand slowest since 2022
Domestic demand slowest since 2022 Final Sales to Domestic Purchasers 6.0% Qrt/Qtr Annualized w/ Sector Contributions Atlanta Fed Q2 GDPNow 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% Consumption Bus. Fixed Invest Residential Invest. Government Final Sales, Qtr/Qtr -2.0% Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23
Slide 7: Consumer sentiment lifted off lows, still subdued
Consumer sentiment lifted off lows, still subdued University of Michigan Consumer Sentiment Conference Board Consumer Confidence Index 190 by Income Bracket 120 Present Situation Top 33% Expectations 170 110 Bottom 33% 100 150 90 130 80 110 70 90 60 70 50 40 50 2018 2019 2020 2021 2022 2023 2024 202
Slide 8: Consumers worried essentials will eat up more budget
Consumers worried essentials will eat up more budget SCE Household Spending Survey 8.0% Expected change in nominal spending over coming 12-months 7.0% Expectations, Total Spending Expectations: Essentials 6.0% Expectations: Non-essentials 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2016 2017 2018 2019 2020 2021 2
Slide 9: Housing market suffering from lack of demand
Housing market suffering from lack of demand New and Existing Home Sales Growth New Privately Owned Units Under Construction 1100k Yr/Yr% Exisiting Home Sales 60% 1000k New Home Sales 1 Unit 40% 900k 5 or more units 20% 800k 700k 0% 600k -20% 500k -40% 400k 2018 2019 2020 2021 2022 2023 2024 2025 20
Slide 10: Difference in momentum in home values and rents
Difference in momentum in home values and rents Zillow Home Value Index $600,000 2019 2022 2023 2024 2025 $400,000 $200,000 $0 Austin Dallas Houston Miami Orlando Tampa Charlotte Raleigh Nashville Zillow Rental Value Index $3,000 2019 2022 2023 2024 2025 $2,500 $2,000 $1,500 $1,000 $500 $0 Austin Da
Slide 11: Bumpy retail sales in 1H
Bumpy retail sales in 1H Retail Sales Growth 2.00% Mth/Mth%, ctg by category 1.50% 1.00% 0.50% 0.00% -0.50% -1.00% Motor Vehicle & Parts Nonstore Retailers Restaurants & Bars Food & Bev Stores -1.50% General Merch Gas Building Materials Health Care Stores Clothing Home Furnishings Misc. Stores Sport
Slide 12: Uncertainty puts businesses on the defensive
Uncertainty puts businesses on the defensive ISM Indices: New Orders Contraction < 50 < Expansion 65 Manufacturing Services 60 55 50 45 40 2022 2023 2024 2025 ISM Indices: Prices Paid ISM Indices: Employment 60 Contraction < 50 < Expansion Manufacturing 90 Contraction < 50 < Expansion Manufacturing
Slide 13: June CPI ticked up a little
June CPI ticked up a little CPI Inflation Contributions Core services, m/m (left) 0.70% 7.0% Core goods, m/m (left) Food, m/m (left) 0.60% Energy, m/m (left) 6.0% 0.50% Yr/Yr% (right) 0.40% 5.0% 0.30% 4.0% 0.20% 3.0% 0.10% 0.00% 2.0% -0.10% 1.0% -0.20% -0.30% 0.0% Jan '23 Apr '23 Jul '23 Oct '23 Jan
Slide 14: All eyes on inflation for tariff impact
All eyes on inflation for tariff impact Headline Inflation 5.0% Core Inflation (ex food & energy) 5.0% PPI, Yr/Yr% Core PPI, Yr/Yr% CPI, Yr/Yr% 4.5% Core CPI, Yr/Yr% 4.5% PCE, Yr/Yr% Core PCE, Yr/Yr% 2.00% 2.00% 4.0% 4.0% 3.5% 3.5% 3.0% 3.0% 2.5% 2.5% 2.0% 2.0% 1.5% 1.5% 1.0% 1.0% Jan '24 Apr '24 Ju
Slide 15: Earnings growth softening
Earnings growth softening Average Hourly Earnings Growth 9.0% Yr/Yr% 8.0% Nominal 7.0% Real 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Bureau of Labor Statistics, Macrobond. FHN Financial 15
Slide 16: Modest headline job growth, soft private sector hiring
Modest headline job growth, soft private sector hiring Nonfarm Payrolls 400k Monthly change Government Services Goods Total 12mth Avg 350k 300k 250k 200k 150k 100k 50k 0k Jan '24 Apr '24 Jul '24 Oct '24 Jan '25 Apr '25 Source: Bureau of Labor Statistics, Macrobond, FHN Financial 16
Slide 17: Unemployment rate reflects changes to labor force
Unemployment rate reflects changes to labor force Unemployment Rate 4.50% 4.23% 4.24% 4.40% 4.22% Unemployment Rate 4.30% 3mth avg 4.20% 4.10% 4.00% 4.09% 3.90% 3.80% 3.70% 3.60% 3.67% 3.50% 3.40% 3.45% 3.30% 3.20% Jan '22 Jul '22 Jan '23 Jul '23 Jan '24 Jul '24 Jan '25 Source: Bureau of Labor Stati
Slide 18: No immigration = limited labor force growth
No immigration = limited labor force growth $24.0tn Labor Force, Index Jan '20 = 1.0 1.20 172m Foreign Born, +16Yr Native Born, +16Yr 1.10 170m $23.0tn 1.00 168m $22.0tn 0.90 166m 2020 2021 2022 2023 2024 2025 $21.0tn 164m $20.0tn 162m 160m $19.0tn Real GDP (left) 158m $18.0tn Civilian Labor Force (
Slide 19: FOMC walks careful line
FOMC walks careful line • Fed has been in wait-and-see mode all year • Committee acknowledges rates are modestly restrictive, but is worried about inflation that could still be coming as result of tariffs • Updated dot plot median in June still showed 50bps of cuts this year, but almost even number
Slide 20: Updated SEP: Slower growth, higher inflation (again)
Updated SEP: Slower growth, higher inflation (again) Evolution of median participants' projections: Real GDP Evolution of median participants' projections: PCE Sept '24 Dec '24 Mar '25 Jun '25 2.5% Sept '24 Dec '24 Mar '25 Jun '25 Hundreds 3.5% Hundreds 2.0% 3.0% 3.0% 1.8% 2.5% 1.5% 1.6% 2.4% 2.0% 1
Slide 21: Median FF unchanged for 2025, higher in '26 & '27
Median FF unchanged for 2025, higher in ’26 & ‘27 Evolution of median participants' projections: Fed funds rate 4.50% Hundreds Sept '24 Dec '24 Mar '25 Jun '25 4.00% 3.9% 3.6% 3.50% 3.4% 3.00% 3.0% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2025 2026 2027 Longer Run Source: Federal Reserve Board, FHN Finan
Slide 22: Dots divided for this year
Dots divided for this year The June 2025 Dot Plot Expected fed funds rate at year-end 5.5 % Median 5.0 % 4.5 % Current rate 4.0 % 3.5 % 3.0 % 2.5 % Jun-25 2.0 % 2025 2026 2027 Longer Run Note: Each dot represents the expectations of one FOMC member. Median projection 3.875% for 2025, 3.625% for 2026
Slide 23: Shifting market rate cut expectations this year
Shifting market rate cut expectations this year FF futures implied qtr-point cuts '25 0.0 Market expectations v. FOMC dot plot median 0.5 1.0 1.5 Number of 25bp point cuts 2.0 2.5 3.0 3.5 Mkt expected cuts in '25 4.0 Median FOMC expected cuts '25 4.5 Jan '25 Feb '25 Mar '25 Apr '25 May '25 Jun '25 J
Slide 24: More than just the Fed impacting long-term yields
More than just the Fed impacting long-term yields 6.0% Fed funds target rate - upper 5.5% US 10-Yr Yield 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2021 2022 2023 2024 2025 Source: Bloomberg, Federal Reserve, FHN Financial 24
Slide 25: Key takeaways
Key takeaways • The economy has slowed; job market is slowing, too • Slowing job and income growth is impacting consumer uncertainty • Immigration impact not only on labor market but also growth this year • Tariff inflation impact has been relatively muted so far • Governors Waller and Bowman have b
Slide 26: Disclaimer
Disclaimer This document or presentation was prepared by an FHN Financial Economist and is not subject to all of the independence and disclosure standards applicable to retail investors. This report may not be independent of FHN Financial’s proprietary interests. FHN Financial sales representatives,
Slide 27: Q&A
Q&A 2) FINANCIAL.
Slide 28: Closing: Sophia Kearney-Lederman
CLOS IN G Sophia Kearney-Lederman Senior Economist FHN Financial 28
Slide 29: Please reach out to your banker with any questions
Please reach out to your banker with any questions or to set up a meeting with our Economist. A recording of this event will be forwarded next week. Next virtual event: September 18 Market Update: Quarterly Conversations 29
Slide 30: Thank you.
Thank you. Py rigs BY HORIZON BANK. FINANCIAL.