First Horizon Corporation · NYSE:FHN
First Horizon — Debt Investor Presentation (December 2024)
20 slides from First Horizon's debt investor presentation, Dec 3, 2024
Slide 1: Fixed Income Investor Materials
Fixed Income Investor Materials December 2024
Slide 2: Disclaimers
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. FHN’s management belie
Slide 3: First Horizon at-a-glance
First Horizon at-a-glance ~1 million 416 12 ~7,200 clients banking state footprint bankers & centers in southeast associates 24% Consumer 24% 76% Fees C&I 23% NIB 76% NII 53% CRE 24% Int. Bearing $3B+ $62B $67B in annual revenue in loans in deposits Data as of 9/30/24 and is period end unless otherw
Slide 4: Proven record of balancing safety & soundness, profitability, and growth
Proven record of balancing safety & soundness, profitability, and growth Disciplined Credit Culture: Reserves / Loans Strong Capital Base: CET1 Ratio NCO % 1.7% 11.4% 9.8% 9.7% 9.9% 10.2% 1.3% 9.2% 1.2% 1.2% 0.7% 0.6% 0.26% 0.28% 0.06% 0.09% 0.11% 0.00% 2018 2019 2020 2021 2022 2023 2018 2019 2020 2
Slide 5: Well-capitalized even under stressed scenarios
Well-capitalized even under stressed scenarios Capital Ratios • The CET1 ratio of 11.2%, slightly above the near-term 11% target 14.0% 13.9% 13.3% – Continued to generate capital through retained earnings, while 12.6% 12.3% supporting customer needs through organic deployment of capital 11.9% 11.2%
Slide 6: Funding diversified by client type, product, and geography
Funding diversified by client type, product, and geography Banking centers in attractive Southeast footprint1 • Stable, cost-effective deposits from a diverse commercial and consumer client base across 12-state footprint and specialty lines of business • Commercial deposits of $37 billion or 56% and
Slide 7: Prudent risk management reflected in lower net charge-offs
Prudent risk management reflected in lower net charge-offs Net charge-offs 0.51% 0.44% • Proven ability to deliver through the cycle, with net charge- 0.40% offs below the BKX index average in all but one year 0.35% 0.39% 0.26% • Strong performance is enabled through a well-diversified 0.21% 0.28% l
Slide 8: Granular C&I portfolio and real estate backed consumer portfolio
Granular C&I portfolio and real estate backed consumer portfolio • The C&I portfolio is both geographically diverse and Consumer Portfolio by Product benefits from a lack of industry concentration – No more than 11% C&I exposure to any industry 5% – Southeastern footprint is economically and 14% dem
Slide 9: High credit quality, diversified CRE portfolio
High credit quality, diversified CRE portfolio Maturity Schedule $7.0B • Disciplined risk management practice and underwriting standards across CRE portfolio 39% • No significant upcoming repricing event, as ~72% of loans are floating and maturities are dispersed over time $3.4B $3.1B • Granular por
Slide 10: Strong underwriting in the office and multi-family portfolios
Strong underwriting in the office and multi-family portfolios Office CRE Multi-Family CRE1 • Medical office comprises 49% of office exposure • Average debt service coverage of 1.2x • Only 13 projects are 10 stories or taller • Average stabilized LTV of 52% • Within the traditional office portfolio1:
Slide 11: Strong returns supported by stable, diversified business mix
Strong returns 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, loans to mortgage compa
Slide 12: FHN Financial's strong full-cycle returns are counter-cyclical to bank franchise
FHN Financial’s strong full-cycle returns are counter-cyclical to bank franchise • FHN Financial provides fixed income sales & trading, Fed Funds investment advisory, interest rate derivatives and other Average ADR 6.00% in$2.0 millions services to financial institutions, municipalities and other FO
Slide 13: Outstanding Long-Term Debt & Preferred Stock
Outstanding Long-Term Debt & Preferred Stock Maturity Callable Principal Credit Ratings4 Regulatory Issuance Coupon Date Date Outstanding Moody's Fitch Capital Subordinated Debt 4/27/20 5/1/30 2/1/30 5.75% $450mm Baa3 BBB Tier 2 3MS + Preferred Stock 3/23/05 Perpetual 4/10/10 $300mm Ba2 BB Tier 1 11
Slide 14: FHN's Top Priorities
Prudently managing the business through the cycle Safety & soundness 1 Proven ability to navigate economic cycles due to our prudent risk management and strong balance sheet Profitability Diversified business model includes asset sensitive balance sheet complemented by counter-cyclical lines of busi
Slide 15: Appendix
APPENDIX 15
Slide 16: Investment portfolio prudently managed to support liquidity and IRR
Investment portfolio prudently managed to support liquidity and IRR Investment portfolio • 3Q24 investment portfolio represents ~11% of total assets $9.8B $9.4B $9.6B $9.3B $9.4B – Moderate total portfolio effective duration of 4.6 – Low reliance on HTM designation at ~14% of total portfolio 2.54% 2
Slide 17: Actively managing balance sheet sensitivity
Actively managing balance sheet sensitivity Interest rate sensitivity managed in part with interest rate hedges Loan repricing profile Balance sheet hedges Modest interest rate sensitivity1 ARMs 12% +100bps -100bps Swaps +2.0% -2.6% 40% $62.4B Variable $5.0B change in the next 12 months' NII for Fix
Slide 18: 2024 Company-Run Stress Test Results
2024 Company-Run Stress Test Results Company-run stress test results demonstrate strong ability to navigate the Fed DFAST Severely Adverse Scenario while maintaining capital levels well above regulatory minimums Federal Reserve DFAST Severely Adverse Scenario Capital1 • Severe global recession with
Slide 19: 2024 Company-Run Stress Test Results
2024 Company-Run Stress Test Results Counter-cyclical businesses help First Horizon outperform peers in latest stress test • Pre-Provision Net Revenue (PPNR) as a percent of FHN Key Stress Test Ratios1 Assets is nearly 2x greater than peers due to DFAST Peers countercyclical contribution from loans
Slide 20: Reconciliation to GAAP financials
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 2024 YTD 2019 2020 2021 2022 2023 An
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