First Horizon Corporation · NYSE:FHN
First Horizon — Q1 2025 Earnings Presentation
31 slides from First Horizon's earnings presentation, Apr 16, 2025
Slide 1: First Quarter 2025 Earnings
First Quarter 2025 Earnings April 16, 2025
Slide 2: Disclaimers
2 Disclaimers Non-GAAP Information Certain measures included in this document are “non-GAAP,” meaning they are not presented in accordance with generally accepted accounting principles in the U.S. and also are not codified in U.S. banking regulations currently applicable to FHN. Although other entit
Slide 3: 1Q25 GAAP financial summary
3PPNR, TBVPS, and ROTCE are non-GAAP and are reconciled to GAAP measures in the Appendix. $ in millions except per share data Reported Results 1Q25 Change vs. 1Q25 4Q24 3Q24 2Q24 1Q24 4Q24 1Q24 Net interest income $631 $630 $627 $629 $625 $1 —% $7 1% Fee income 181 99 200 186 194 82 83% (13) (7%) To
Slide 4: Table of contents
4 1Q25 highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1Q25 adjusted financial results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 5: 1Q25 highlights
5Reflects 1Q25 vs. 4Q24 results. PPNR, ROTCE, TBVPS, ACL to loans ratio, and adjusted financial measures, including measures excluding deferred compensation, are non-GAAP and are reconciled to GAAP measures in the Appendix. Net interest income and margin are adjusted to a fully taxable equivalent (“
Slide 6: 1Q25 adjusted financial results
6PPNR, ROTCE, TBVPS, ACL to loans ratio, and adjusted financial measures, including measures excluding deferred compensation, are non-GAAP and are reconciled to GAAP measures in the Appendix. Net interest income and margin are adjusted to a fully taxable equivalent (“FTE”) basis assuming a statutory
Slide 7: 1Q25 notable items
7 1Q25 notable items Notable Items ($ in millions, except EPS) 1Q25 FDIC special assessment (other noninterest expense) ($1) Visa Derivative Valuation Expense (other noninterest expense) ($5) Pre-tax impact of notable items ($6) Tax impact on pre-tax notable items $1 NIAC impact of notable items ($4
Slide 8: Net interest income and NIM
8 • Net interest income increased $1 million and net interest margin expanded 9bps versus 4Q24 ◦ Continued momentum from last quarter as average interest-bearing deposit costs improved another 38bps, while loan yields decreased by 20bps • 4Q24 securities portfolio restructuring contributed ~$8mm of
Slide 9: Deposits
9 Period end deposits $65.7B $64.8B $66.6B $65.6B $64.2B $16.4 $16.3 $16.2 $16.0 $15.8 $19.2 $18.0 $16.3 $16.0 $16.2 $20.1 $20.3 $22.3 $21.5 $20.9 $9.0 $8.0 $9.2 $10.7 $10.5 $1.0 $2.1 $2.5 $1.4 $0.8 Noninterest bearing deposits Base rate deposits Promotional deposits & CDs Indexed deposits Brokered
Slide 10: Period end loans
10 Period end loans • 1Q25 period end loans of $62.2 billion, down 1% versus 4Q24 ◦ Loans to mortgage companies (LMC) saw typical seasonality, with balances down $101 million ◦ C&I excluding LMC grew $27 million ◦ CRE balances declined $282 million due to paydowns across the portfolio including clas
Slide 11: Stable fee income despite market volatility
11 • 1Q25 adjusted fee income excluding deferred compensation decreased $5 million from 4Q24 ◦ Fixed income remained flat with average daily revenue down 11%, offset by increased revenue associated with products not included in ADR ◦ Service charges and fees held steady, reflecting normalized run ra
Slide 12: Continued prioritization of expense efficiency
12 Continued prioritization of expense efficiency • 1Q25 adjusted expense excluding deferred compensation decreased $20 million versus 4Q24 ◦ Personnel expense excluding deferred compensation increased $9 million ▪ Salaries and benefits increased $2 million, as annual merit adjustments and benefits
Slide 13: Disciplined lending leads to strong performance across the cycle
13 Non-performing loans (NPLs)Allowance for credit losses (ACL) Net charge-offs FHN NCO%1 Average NCO% of BKX Index2 $40 $34 $24 $13 $29 0.27% 0.22% 0.15% 0.08% 0.19% 0.56% 0.57% 0.57% 0.62% 1Q24 2Q24 3Q24 4Q24 1Q25 FHN NCOs Disciplined lending leads to strong performance across the cycle ACL/ loans
Slide 14: Earnings power supported return of capital to shareholders
14 11.2% 0.31% (0.01)% (0.11)% (0.51)% 0.05% (0.01)% 10.9% 4Q24 Actual Adjusted NIAC Notable Items Common Dividend Share Buybacks Change in Loan Balances & Unfunded Commitments Other¹ 1Q25 Estimate Capital Ratios Common Equity Tier 1 (CET1) Tangible Book Value per Share (TBVPS) 13.9% 13.7% 13.9% 13.
Slide 15: Earnings Drivers and FY25 expectations
15 Earnings Drivers FY24 Adjusted Baseline FY25 vs FY24 Expectations Comments Adjusted Revenue (excluding deferred comp) $3,279 million Flat - Up 4% Composition of revenue will be driven by the quantity and pace of interest rate cuts and other macroeconomic variables. Adjusted Expense (excluding def
Slide 16: Strategic capital management and path to 15%+ ROTCE
16 Strategic capital management to opportunistically deploy excess capital and lower CET1 to 10% - 10.5% range Key steps to achieving intermediate term 15%+ ROTCE Highly attractive geographic footprint in growth markets with opportunities to drive loan and deposit growth Diversified business model w
Slide 17: Appendix
Appendix BS FIRST HORIZON.
Slide 18: Actively managing liquidity and interest rate sensitivity
18 Actively managing liquidity and interest rate sensitivity Variable 55% Fixed 32% ARMs 12% $62.2B Floors 60% Swaps 40% $5.0B Loan repricing profile Balance sheet hedges Modest interest rate sensitivity1 +100bps +1.4% -100bps -2.3% • Modestly asset-sensitive profile driven by 55% variable rate loan
Slide 19: Track record of strong results supported by stable, diversified business mix
19 Track record of strong results supported by stable, diversified business mix • Our diversified business model with a highly attractive geographic footprint provides opportunity to deliver strong performance through a variety of economic cycles • The counter-cyclical businesses (fixed income, loan
Slide 20: FHN Financial's full-cycle returns counter-cyclical to bank franchise
20 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 20 21 20 22 20 23 20 24 —% 2.00% 4.00% 6.00% $0.0 $0.5 $1.0 $1.5 $2.0 FHN Financial’s strong full-cycle returns are counter-cyclical to bank franchise Lower Revenue Market Factor Higher Revenue 2023 Environment 20
Slide 21: High credit quality, diversified CRE portfolio
21 <$5 $3.2B $5-$10 $1.9B $10-$20 $2.7B $20-$30 $2.4B $30-$40 $1.8B $40-$50 $1.4B >$50 $0.7B CRE by property typeCRE by loan size2 CRE by state3 $3.1B $3.3B $2.6B $5.1B Floating Fixed 2025 2026 2027 2028+ High credit quality, diversified CRE portfolio All loan balances are period end unless otherwis
Slide 22: Strong underwriting in the office and multi-family portfolios
22 • Medical office comprises 50% of office exposure • Less than 5% of projects are 10 stories or taller • Total office portfolio vacancy rate of 10% • Within the traditional office portfolio1: ◦ Average debt service coverage of 1.6x ◦ Average stabilized LTV of 61% $2.7 billion office CRE portfolio
Slide 23: Granular C&I portfolio and real estate backed consumer portfolio
23 82% 14% 4% Real estate installment loans HELOC Credit card and other C&I by state C&I by industry Consumer portfolio by product Granular C&I portfolio and real estate backed consumer portfolio 21% 21% 12% 10% 9% 7% 6% 6% 4% 4% All Other TN FL TX Other Southeastern NC LA CA GA AL 11% 10% 10% 8% 8%
Slide 24: Investment portfolio prudently managed to support liquidity and IRR
24 1Q25 investment portfolio composition1 Steady principal cash flows2 Investment portfolio $0.3B $0.3B $0.3B $0.3B 2Q25 3Q25 4Q25 1Q26 Agency MBS 41% Agency CMBS 27% Agency CMO 16% U.S. Agencies & Treasury 12% States & Municipalities 4% $9.6B $9.3B $9.4B $9.3B $9.2B 2.54% 2.58% 2.58% 2.69% 3.02% Av
Slide 25: Notable Items
25 Notable Items Numbers may not total due to rounding * 4Q24, 3Q24, 2Q24, and 1Q24 include $3 million, $2 million, $3 million, and $5 million of restructuring expenses; 1Q25 and 3Q24 include $5 million and $15 million of Visa derivative valuation expenses. ** 2Q24 includes $7 million deemed dividen
Slide 26: Reconciliation to GAAP financials
26 Reconciliation to GAAP financials Slides in this presentation use non-GAAP information. That information is not presented according to generally accepted accounting principles (GAAP) and is reconciled to GAAP information below. (a) Included in total equity on the Consolidated Balance Sheet. (b) I
Slide 27: Reconciliation to GAAP financials
27 Reconciliation to GAAP financials Slides in this presentation use non-GAAP information. That information is not presented according to generally accepted accounting principles (GAAP) and is reconciled to GAAP information below. $s in millions, except per share data Quarterly, Unaudited 1Q25 4Q24
Slide 28: Reconciliation to GAAP financials
28 Reconciliation to GAAP financials Slides in this presentation use non-GAAP information. That information is not presented according to generally accepted accounting principles (GAAP) and is reconciled to GAAP information below. $s in millions Quarterly, Unaudited 1Q25 4Q24 3Q24 2Q24 1Q24 Adjusted
Slide 29: Reconciliation to GAAP financials
29 Reconciliation to GAAP financials Slides in this presentation use non-GAAP information. That information is not presented according to generally accepted accounting principles (GAAP) and is reconciled to GAAP information below. $s in millions Period end Average 1Q25 4Q24 1Q25 vs. 4Q24 1Q25 4Q24 1
Slide 30: Reconciliation to GAAP financials
30 Reconciliation to GAAP financials Slides in this presentation use non-GAAP information. That information is not presented according to generally accepted accounting principles (GAAP) and is reconciled to GAAP information below. (a) Adjusted for notable items as detailed on page 25. Numbers may no
Slide 31: Reconciliation to GAAP financials
31 Reconciliation to GAAP financials Slides in this presentation use non-GAAP information. That information is not presented according to generally accepted accounting principles (GAAP) and is reconciled to GAAP information below. (a) Adjusted for notable items as detailed on page 25. Numbers may no