FIRST HORIZON CORP

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 of $9.3 billion increased $744 million compared to December 31, 2022. Significant changes included net income of $916 million and a $180 million increase in AOCI offset by $367 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:

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Table 7.19a

REGULATORY CAPITAL DATA

Table 7.19b

REGULATORY RATIOS & AMOUNTS

(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, 2023.

(b) The $94 million carrying value of the Series D preferred stock does not qualify as Tier 1 capital because the earliest redemption date is less than five years from the issuance date.

(c) Tangible common equity to tangible assets and adjusted tangible common equity to risk-weighted assets are non-GAAP measures and are reconciled to total equity to total assets (GAAP) in the Non-GAAP to GAAP Reconciliation - Table 7.28.

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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 December 31, 2023, both FHN and First Horizon Bank had sufficient capital to qualify as well-capitalized institutions and to meet the capital conservation buffer requirement. Capital ratios for both FHN and First Horizon Bank as of December 31, 2023 are 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 Tier 1 and Total risk-based regulatory capital ratios increased in 2023 relative to 2022 primarily from the impact of net income less dividends. The increase in the Common Equity Tier 1 ratio for FHN was largely driven by the conversion of the Series G Preferred Stock to common stock.

During 2024, capital ratios are expected to remain above well-capitalized standards plus the required capital conservation buffer.

Stress Testing

The Economic Growth, Regulatory Relief, and Consumer Protection Act, along with an interagency regulatory statement effectively exempted both FHN and First Horizon Bank from Dodd-Frank Act stress testing requirements starting in 2018.

For 2023, FHN and First Horizon Bank completed a company run stress test using the Comprehensive Capital Analysis and Review (CCAR) scenarios published in February 2023. Results of these tests indicate that both FHN and First Horizon Bank would be able to maintain capital well in excess of Basel III Adequately Capitalized standards under the hypothetical severe global recession of the 2023 CCAR Severely Adverse scenario. A summary of those results was posted in the “Fixed Income - Stress

Test Results” section on FHN’s investor relations website on September 29, 2023. Neither FHN’s stress test posting, nor any other material found on FHN’s website generally, is part of this report or incorporated herein.

FHN anticipates that it will continue performing an annual enterprise-wide stress test as part of its capital and risk management process. Results of this test will be presented to executive management and the Board.

The disclosures in this “Stress Testing” section include forward-looking statements. Please refer to “Forward-Looking Statements” for additional information concerning the characteristics and limitations of statements of that type.

Common Stock Purchase Programs

If and as authorized by its Board of Directors, FHN may repurchase shares of its common stock from time to time and will evaluate the level of capital and take action designed to generate or use capital, as appropriate, for the interests of the shareholders, subject to legal and regulatory restrictions. FHN's Board authorized two common stock purchase programs, described below, that operated and expired during the fourth quarter of 2023. In 2024, FHN's Board replaced one of those programs. FHN’s Board has not authorized a preferred stock purchase program.

2021 General Purchase Program

On January 27, 2021, FHN announced that its Board of Directors approved a new $500 million common share purchase program that was to expire on January 31, 2023. On October 26, 2021, FHN announced that the 2021 program had been increased by $500 million and

extended to October 31, 2023. The 2021 program was not further extended.

The 2021 program was not tied to any compensation plan. Purchases could 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 were subject to various factors, including FHN's capital position, financial performance, expected capital impacts of strategic initiatives, market conditions, business conditions, and regulatory considerations. FHN did not purchase shares under this program during blackout periods when senior executives were prohibited from purchasing FHN stock on the open market.

As of expiration at October 31, 2023, $401 million in purchases had been made under the 2021 program at an average price per share of $16.60, or $16.58 excluding

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commissions. The pendency of the TD Transaction resulted in no purchases under the 2021 program since the Transaction was announced in 2022. No additional

purchases were made under the 2021 program in 2023 before it expired.

Table 7.20a

COMMON STOCK PURCHASES—2021 GENERAL PROGRAM

(a) Represents total costs including commissions paid

(b) For October, value given as of immediately prior to program expiration on October 31, 2023.

2024 General Purchase Program

On January 23, 2024, FHN announced that its Board of Directors approved a new $650 million common share purchase program that is scheduled to expire on January 31, 2025. The 2024 program is not tied to any compensation plan. Purchases 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 subject to various factors, including FHN's capital position, financial performance, expected capital impacts of strategic initiatives, market conditions, business conditions, and regulatory considerations. FHN does not purchase shares under this program during blackout periods when senior executives are prohibited from purchasing FHN stock on the open market.

2004 Compensation Plans Purchase Program

A consolidated compensation plan share purchase program was announced on August 6, 2004. This program consolidated into a single share purchase program all of the previously authorized compensation plan share programs as well as the renewal of the authorization to purchase shares for use in connection with compensation plans for which the share purchase authority had expired. The primary objectives of this program were to mitigate dilution resulting from shares issued in connection with

FHN's various stock-based compensation plans, and to implement automatic stock purchases related to tax withholding obligations associated with stock-based awards. For many years, the program was used entirely for the second objective.

The total amount authorized under this consolidated compensation plan share purchase program was 29.6 million shares calculated before adjusting for stock dividends distributed through January 1, 2011. The authorization was reduced for that portion which related to compensation plans for which no stock option awards remain outstanding. The program expired on December 31, 2023. Prior to expiration, purchases could have been made in the open market or through privately negotiated transactions and were subject to various factors including FHN's capital position, financial performance, capital impacts of strategic initiatives, market conditions and regulatory considerations. However, as mentioned above, even though general repurchases were authorized, for many years FHN's use of this program was limited to automatically withholding shares associated with vested stock awards to cover tax obligations.

As of December 31, 2023, immediately prior to expiration, the maximum number of shares that could be purchased under the program was 22 million shares.

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Table 7.20b

COMMON STOCK PURCHASES—2004 COMPENSATION PLANS PROGRAM

(a) For December, number given as of immediately prior to program expiration on December 31, 2023.

Automatic Off-Market Tax Withholding Purchases

The 2004 compensation plans program has not been renewed or replaced with a formal program. After 2023, as authorized by FHN's Board and the Board's Compensation Committee, FHN will continue to make automatic stock purchases by withholding shares associated with stock-based awards to cover tax

obligations associated with those awards. Those limited, off-market purchases no longer will be connected to a traditional, announced purchase program. As has been true in the past, automatic tax withholding purchases are not subject to trading blackouts which affect senior executives or the general purchase program.