First Horizon Corporation's Momentum Continues with Strong First Quarter 2025 Results

Net Income Available to Common Shareholders of $213 Million with an EPS of $0.41, a $0.12 Increase from Prior Quarter; $217 Million or $0.42 on an Adjusted Basis, Down $0.01 from Prior Quarter*

MEMPHIS, TN (April 16, 2025) - First Horizon Corporation (NYSE: FHN or "First Horizon") today reported first quarter net income available to common shareholders ("NIAC") of $213 million or earnings per share of $0.41, compared with fourth quarter 2024 NIAC of $158 million or earnings per share of $0.29. First quarter 2025 results were reduced by net $4 million after-tax, or $0.01 per share, of notable items compared with $71 million, or $0.13 per share, in fourth quarter 2024. Excluding notable items, adjusted first quarter 2025 NIAC was $217 million or $0.42 per share compared to $228 million or $0.43 per share in fourth quarter 2024.

"We are pleased to report strong performance as we begin 2025. Our commitment to delivering value to our shareholders through consistent returns is achieved by meeting client needs with tailored solutions, maintaining a strong associate culture, and supporting our communities with unwavering resolve," said President and CEO Bryan Jordan.

He continued, "Our business model prioritizes safety and soundness, profitability, and growth, equipping us to manage uncertainties and adapt to economic changes. For 161 years, First Horizon has demonstrated its ability to perform through diverse economic conditions and is well-positioned to achieve sustainable growth and continue delivering results that benefit our stakeholders for the long term."

Notable Items

Notable Items
Quarterly, Unaudited ($ in millions, except per share data)			1Q25						4Q24						1Q24
Summary of Notable Items:
Loss on AFS portfolio restructuring			$	-					$	(91)					$	-
FDIC special assessment (other noninterest expense)			(1)						1						(10)
Other notable expenses			(5)						(3)						(5)
Total notable items (pre-tax)			$	(6)					$	(94)					$	(15)
Total notable items (after-tax)			$	(4)					$	(71)					$	(12)
Numbers may not total due to rounding.

First quarter notable items included $1 million of expense for the FDIC special assessment and a $5 million impact related to Visa derivative valuation expenses.

First Quarter 2025 versus Fourth Quarter 2024

Net interest income

Net interest income (FTE) increased $1 million to $634 million and net interest margin of 3.42% increased 9 basis points. Both changes were driven by a 38 basis point reduction in interest-bearing deposit costs and partially offset by the impact of lower loan yields and loan volumes.

Noninterest income

Noninterest income increased $82 million to $181 million, as fourth quarter 2024 contained a $91 million notable loss associated with an opportunistic restructuring of a portion of the securities portfolio. Adjusted noninterest income decreased by $9 million from fourth quarter 2024 as deferred compensation income was $4 million lower. Fixed income remained flat from prior quarter despite average daily revenue (ADR) reduction to $586k, as revenue from other products within that business increased. Typical fluctuation levels in brokerage, trust and insurance income and other noninterest income resulted in reductions of $3 million and $2 million, respectively.

Noninterest expense

Noninterest expense of $488 million decreased $21 million from the prior quarter. First quarter notable items included $1 million of expense for the FDIC special assessment and a $5 million impact related to Visa derivative valuation expenses. Adjusted noninterest expense of $482 million decreased $24 million, including $4 million lower deferred compensation. Personnel expense, excluding deferred compensation, was $9 million higher due to annual merit adjustments and incremental expense associated with performance award adjustments. Outside services declined by $8 million as completed technology projects drove lower vendor costs. Other noninterest expense decreased by $22 million reflecting reductions from 4Q24 expenses that included a $10 million charitable contribution as well as checking account promotion expenses.

Loans and leases

Average loan and lease balances of $61.6 billion represented a $773 million decline compared to the prior quarter, while period-end balances were $62.2 billion, decreasing $350 million from fourth quarter 2024. Loans to mortgage companies (LMC) saw typical seasonal reductions while CRE balances declined due to pay downs. Loan yields of 5.89% decreased 20 basis points driven by lower short-term rates following the rate cuts by the Federal Reserve in fourth quarter 2024.

Deposits

Average deposits of $64.5 billion decreased $1.6 billion from fourth quarter 2024, which included a pay down of $0.7 billion of brokered CDs. Period-end deposits of $64.2 billion declined $1.4 billion, driven by the pay-off of $0.6 billion of brokered CDs. Interest-bearing deposit cost of 2.72% decreased 38 basis points from the prior quarter, with a spot rate of approximately 2.70% at the end of the quarter.

Asset quality

Provision expense of $40 million increased $30 million from the previous quarter. Net charge-offs were $29 million or 19 basis points, up from $13 million or 8 basis points in prior quarter. Nonperforming loans of $609 million increased $8 million, with an increase in C&I partially offset by reductions in commercial and consumer real estate. The ACL to loans ratio increased from fourth quarter 2024 to 1.45%, driven by uncertainty in the economic outlook.

Capital

CET1 ratio was 10.9%, slightly down from fourth quarter 2024 as $360 million of excess capital was returned to shareholders through the share repurchase program.

Income taxes

The effective tax rate and the adjusted effective tax rate for first quarter 2025 were both 22.0%, compared with an effective tax rate of 19.3% and adjusted tax rate of 21.0% for fourth quarter 2024.

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SUMMARY RESULTS
Quarterly, Unaudited
																								1Q25 Change vs.
($s in millions, except per share and balance sheet data)						1Q25						4Q24						1Q24						4Q24												1Q24
																								$/bp						%						$/bp						%
Income Statement
Interest income - taxable equivalent1						$	1,017					$	1,071					$	1,076					$	(54)					(5)		%				$	(59)					(5)		%
Interest expense- taxable equivalent1						383						438						448						(55)						(13)						(65)						(14)
Net interest income- taxable equivalent						634						634						628						1						-						6						1
Less: Taxable-equivalent adjustment						3						4						4						-						(6)						-						(11)
Net interest income						631						630						625						1						-						7						1
Noninterest income						181						99						194						82						83						(13)						(7)
Total revenue						812						729						819						84						11						(7)						(1)
Noninterest expense						488						508						515						(21)						(4)						(27)						(5)
Pre-provision net revenue3						325						220						304						104						47						21						7
Provision for credit losses						40						10						50						30						NM						(10)						(20)
Income before income taxes						285						210						254						74						35						31						12
Provision for income taxes						63						41						57						22						54						5						10
Net income						222						170						197						52						31						25						13
Net income attributable to noncontrolling interest						4						4						5						-						(9)						(1)						(17)
Net income attributable to controlling interest						218						165						192						53						32						26						14
Preferred stock dividends						5						8						8						(3)						(34)						(3)						(37)
Net income available to common shareholders						$	213					$	158					$	184					$	55					35		%				$	29					16		%
Adjusted net income4						$	227					$	240					$	209					$	(14)					(6)		%				$	17					8		%
Adjusted net income available to common shareholders4						$	217					$	228					$	195					$	(11)					(5)		%				$	22					11		%
Common stock information
EPS						$	0.41					$	0.29					$	0.33					$	0.12					41		%				$	0.08					24		%
Adjusted EPS4						$	0.42					$	0.43					$	0.35					$	(0.01)					(2)		%				$	0.07					20		%
Diluted shares8						523						534						558						(11)						(2)		%				(34)						(6)		%
Key performance metrics
Net interest margin6						3.42		%				3.33		%				3.37		%				9		bp										5		bp
Efficiency ratio						60.06						61.98						62.92						(192)												(286)
Adjusted efficiency ratio4						59.09						61.43						60.78						(234)												(169)
Effective income tax rate						21.96						19.32						22.48						264												(52)
Return on average assets						1.11						0.82						0.97						29												14
Adjusted return on average assets4						1.14						1.17						1.03						(3)												11
Return on average common equity ("ROCE")						10.3						7.4						8.8						292												154
Return on average tangible common equity ("ROTCE")4						12.8						9.2						11.0						364												186
Adjusted ROTCE4						13.1						13.3						11.6						(19)												143
Noninterest income as a % of total revenue						22.29						23.20						23.72						(91)												(143)
Adjusted noninterest income as a % of total revenue4						22.20		%				23.10		%				23.61		%				(90)		bp										(141)		bp
Balance Sheet (billions)
Average loans						$	61.6					$	62.4					$	61.2					$	(0.8)					(1)		%				$	0.5					1		%
Average deposits						64.5						66.1						65.4						(1.6)						(2)						(0.9)						(1)
Average assets						81.0						82.0						81.2						(1.0)						(1)						(0.3)						-
Average common equity						$	8.4					$	8.5					$	8.4					$	(0.1)					(1)		%				$	-					(1)		%
Asset Quality Highlights
Allowance for credit losses to loans and leases4						1.45		%				1.43		%				1.40		%				2		bp										5		bp
Nonperforming loan and leases ratio						0.98		%				0.96		%				0.82		%				2		bp										16		bp
Net charge-off ratio						0.19		%				0.08		%				0.27		%				11		bp										(8)		bp
Net charge-offs						$	29					$	13					$	40					$	16					119		%				$	(11)					(28)		%
Capital Ratio Highlights (current quarter is an estimate)
Common Equity Tier 1						10.9		%				11.2		%				11.3		%				(27)		bp										(38)		bp
Tier 1						12.0						12.2						12.3						(27)												(38)
Total Capital						13.7						13.9						13.9						(19)												(25)
Tier 1 leverage						10.5		%				10.6		%				10.8		%				(15)		bp										(33)		bp

Numbers may not total due to rounding.

See footnote disclosures on page 19 and glossary of terms on page 25.

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