FIRST HORIZON CORP

Total period-end assets were $81.8 billion as of March 31, 2024 compared to $81.7 billion at December 31, 2023.

Earning assets consist of loans and leases, loans held for sale, investment securities, and other earning assets, such

as trading securities and interest-bearing deposits with banks. A detailed discussion of the major components of earning assets is provided in the following sections.

Loans and Leases

Period-end loans and leases of $61.8 billion as of March 31, 2024 increased $461 million, or 1%, compared to December 31, 2023. Year-to-date loan growth included a $488 million increase in commercial loans and leases primarily from growth in loans to mortgage companies and commercial real estate loans, offset by a $27 million

decrease in consumer loans primarily from a decline in credit card and other loans.

The following table provides detail regarding FHN's loans and leases as of March 31, 2024 and December 31, 2023.

Table I.2.5

LOANS & LEASES

(a)Includes equipment financing loans and leases.

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Loans Held for Sale

Loans held for sale primarily consists of government guaranteed loans under SBA and USDA lending programs. Smaller amounts of other consumer and home equity loans are also included in loans HFS. Additionally, FHN's mortgage banking operations includes origination and servicing of residential first lien mortgages that conform to standards established by GSEs that are major investors in U.S. home mortgages but can also consist of junior lien and jumbo loans secured by residential property. These

non-conforming loans are primarily sold to private companies that are unaffiliated with the GSEs on a servicing-released basis. For further detail, see Note 5 - Mortgage Banking Activity.

On March 31, 2024 and December 31, 2023, loans HFS were $395 million and $502 million, respectively. Held-for-sale consumer mortgage loans secured by residential real estate in process of foreclosure totaled $2 million for both March 31, 2024 and December 31, 2023.

Asset Quality

Loan and Lease Portfolio Composition

FHN groups its loans into portfolio segments based on internal classifications reflecting the manner in which the ALLL is established and how credit risk is measured, monitored, and reported. From time to time, and if conditions are such that certain subsegments are uniquely affected by economic or market conditions or are experiencing greater deterioration than other components of the loan portfolio, management may determine the ALLL at a more granular level. Commercial loans and leases are composed of C&I loans and leases and CRE loans. Consumer loans are composed of consumer real estate loans and credit card and other loans. FHN has a concentration of residential real estate

loans of 22% and 23% of total loans at March 31, 2024 and December 31, 2023, respectively. Industry concentrations are discussed under the C&I heading below.

Credit underwriting guidelines are outlined in Item 7 of FHN’s Annual Report on Form 10-K for the year ended December 31, 2023 in the Asset Quality Section within the Analysis of Financial Condition discussion. FHN’s credit underwriting guidelines and loan product offerings as of March 31, 2024 are generally consistent with those reported and disclosed in FHN’s Form 10-K for the year ended December 31, 2023.

Commercial Loan and Lease Portfolios

C&I

C&I loans are the largest component of the loan and lease portfolio, comprising 53% of total loans as of both March 31, 2024 and December 31, 2023. The C&I portfolio increased $278 million to $32.9 billion as of March 31, 2024 compared to $32.6 billion at December 31, 2023. The C&I portfolio is comprised of loans and leases used for general business purposes. Products offered in the C&I portfolio include term loan financing of owner-occupied real estate and fixed assets, direct financing and sales-type leases, working capital lines of credit, and trade credit enhancement through letters of credit.

The increase in C&I loans from December 31, 2023 was largely driven by growth in loans to mortgage companies and the wholesale trade portfolio, offset by a decline in

the finance and insurance portfolio. The largest geographical concentrations of balances in the C&I portfolio as of March 31, 2024 were in Tennessee (20%), Florida (13%), Texas (11%), North Carolina (7%), Louisiana (7%), California (5%), and Georgia (5%). No other state represented more than 5% of the portfolio.

The following table provides the composition of the C&I portfolio by industry as of March 31, 2024, and December 31, 2023. For purposes of this disclosure, industries are determined based on the North American Industry Classification System (NAICS) industry codes used by Federal statistical agencies in classifying business establishments for the collection, analysis, and publication of statistical data related to the U.S. business economy.

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Table I.2.6

C&I PORTFOLIO BY INDUSTRY

(a)Leasing, rental of real estate, equipment, and goods.

(b)Industries in this category each comprise less than 5% as of March 31, 2024.

Industry Concentrations

Loan concentrations are considered to exist for a financial institution when there are loans to numerous borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. Loans to mortgage companies andborro wers in the finance and insurance industry were 19% and 18% of FHN’s C&I loan portfolio as of March 31, 2024 and December 31, 2023, respectively, and as a result could be affected by items that uniquely impact the financial services industry. Loans to borrowers in the real estate and rental and leasing industry were 12% of FHN's C&I portfolio as of both March 31, 2024 and December 31, 2023. As of March 31, 2024, FHN did not have any other concentrations of C&I loans in any single industry of 10% or more of total loans.

Loans to Mortgage Companies

Loans to mortgage companies were 7% and 6% of the C&I portfolio as of March 31, 2024 and December 31, 2023, respectively. This portfolio includes commercial lines of credit to qualified mortgage companies primarily for the temporary warehousing of eligible mortgage loans prior to the borrower’s sale of those mortgage loans to third-party investors. Balances in this portfolio generally fluctuate with mortgage rates and seasonal factors. Generally, new loan originations to mortgage lenders increase when there is a decline in mortgage rates and decrease when rates rise. In periods of economic uncertainty, this trend may not occur even if interest rates are declining. In first quarter 2024, 80% of the loan originations were home purchases and 20% were refinance transactions.

Finance and Insurance

The finance and insurance component represented 12% of the C&I portfolio as of both March 31, 2024 and

December 31, 2023, and includes TRUPs (i.e., long-term unsecured loans to bank and insurance-related businesses), loans to bank holding companies, and asset-based lending to consumer finance companies. As of March 31, 2024, asset-based lending to consumer finance companies represented approximately $1.9 billion of the finance and insurance component.

Real Estate and Rental and Leasing

Loans to borrowers in the real estate and rental and leasing industry were 12% of FHN's C&I portfolio as of both March 31, 2024 and December 31, 2023. This portfolio primarily consists of equipment financing loans and leases to clients across FHN's footprint in a broad range of industries and asset types. This portfolio also includes a smaller balance of loans and leases for solar and wind generating facilities.

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Commercial Real Estate

The CRE portfolio totaled $14.4 billion as of March 31, 2024 and $14.2 billion as of December 31, 2023. The CRE portfolio includes financings for both commercial construction and non-construction loans. This portfolio contains loans, draws on lines, and letters of credit to commercial real estate developers for the construction and mini-perm anent financing of income-producing real estate.

The largest geographical concentr ations of CRE loan balances as of March 31, 2024 were in Florida (27%), Texas (13%), North Carolina (12%), Georgia (10%), Tennessee (9%), and Louisiana (8%). No other state represented more than 5% of the portfolio. The following table represents subcategories of CRE loans by property type:

Table I.2.7

CRE PORTFOLIO BY PROPERTY TYPE

(a) Property types in this category each comprise less than 5%.

Consumer Loan Portfolios

Consumer Real Estate

The consumer real estate portfolio totaled $13.6 billion and $13.7 billion as of March 31, 2024 and December 31, 2023, respectively, and is primarily composed of home equity lines and installment loans. The largest geographical concentrations of balances as of March 31, 2024 were in Florida (29%), Tennessee (22%), Texas (11%), Louisiana (8%), North Carolina (7%), Georgia (5%), and New York (5%). No other state represented more than 5% of the portfolio.

As of March 31, 2024, approximately 89% of the consumer real estate portfolio was in a first lien position. At origination, the weighted average FICO score of this portfolio was 759 and the refreshed FICO scores averaged 756 as of March 31, 2024, no change from FICO scores as of December 31, 2023. Generally, performance of this portfolio is affected by life events that affect borrowers’ finances, the level of unemployment, and home prices.

As of March 31, 2024 and December 31, 2023, FHN had held-for-investment consumer mortgage loans secured by real estate that were in the process of foreclosure totaling $30 million and $29 million, respectively.

HELOCs comprised $2.1 billion and $2.2 billion of the consumer real estate portfolio as of March 31, 2024 and December 31, 2023, respectively. FHN’s HELOCs typically have a 5 or 10 year draw period followed by a 10 or 20

year repayment period, respectively. During the draw period, a borrower is able to draw on the line and is only required to make interest payments. The line is frozen if a borrower becomes past due on payments. Once the draw period has ended, the line is closed and the borrower is required to make both principal and interest payments monthly until the loan matures. The principal payment generally is fully amortizing, but payment amounts will adjust when variable rates reset to reflect changes in the prime rate.

As of March 31, 2024, approx imately 95% of FHN's HELOCs were in the draw period compared to 94% at December 31, 2023. It is expected that $572 million, or 28%, of HELOCs currently in the draw period will enter the repayment period during the next 60 months, based on current terms. Generally, delinquencies for HELOCs that have entered the repayment period are initially higher than HELOCs still in the draw period because of the increased minimum payment requirement. However, over time, performance of these loans usually begins to stabilize. HELOCs nearing the end of the draw period are closely monitored.

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The following table presents HELOCs currently in the draw period, broken down by months remaining in the draw period.

Table I.2.8

HELOC DRAW TO REPAYMENT SCHEDULE

Credit Card and Other

The credit card and other consumer loan portfolio totaled $771 million as of March 31, 2024 and $793 million as of December 31, 2023. This portfolio primarily consists of

consumer-related credits, including home equity and other personal consumer loans, credit card receivables, and automobile loans. The $22 million decrease was driven by net repayments in the overall portfolio.

Allowance for Credit Losses

The ACL is maintained at a level sufficient to provide appropriate reserves to absorb estimated future credit losses in accordance with GAAP. For additional information regarding the ACL, see Note 4 of this Report and "Critical Accounting Policies and Estimates" and Note 4 in FHN's 2023 Form 10-K.

The ALLL increased to $787 million as of March 31, 2024 from $773 million as of December 31, 2023. The increase in the ALLL balance as of March 31, 2024 reflects an

evolving macroeconomic outlook, modest grade migration, and net commercial loan balance increases. The ALLL to total loans and leases ratio increased 1 basis point to 1.27% compared to 1.26% as of December 31, 2023. The ACL to total loans and leases ratio remained steady at 1.40% as of March 31, 2024 and December 31, 2023.

Consolidated Net Charge-offs

Net charge-offs in first quarter 2024 were $40 million, or an annualized 27 basis points of total loans and leases, compared to net charge-offs of $16 million, or 11 basis

points of total loans and leases, in first quarter 2023. The $24 million increase in net charge-offs was driven by higher charge-offs in the commercial portfolio.

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Table I.2.9

ANALYSIS OF ALLOWANCE FOR CREDIT LOSSES AND CHARGE-OFFS

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NM - not meaningful

Nonperforming Assets

Nonperforming loans are loans placed on nonaccrual if it becomes evident that full collection of principal and interest is at risk, if impairment has been recognized as a partial charge-off of principal balance due to insufficient collateral value and past due status, or (on a case-by-case basis) if FHN continues to receive payments but there are other borrower-specific issues. Included in nonaccrual are loans for which FHN continues to receive payments, including residential real estate loans where the borrower has been discharged of personal obligation through bankruptcy. NPAs consist of nonperforming loans and OREO (excluding OREO from government insured mortgages).

Total NPAs (including NPLs HFS) increased to $512 million as of March 31, 2024 from $469 million as of December 31, 2023, largely driven by an increase in commercial loans placed on non-accrual. The nonperforming loans and leases ratio increased 7 basis points to 0.82% as of March 31, 2024 compared to year-end 2023.

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Table I.2.10

NONACCRUAL/NONPERFORMING LOANS, FORECLOSED ASSETS, & OTHER DISCLOSURES

(a)Excludes loans and leases that are 90 or more days past due and still accruing interest.

(b)Excludes government-insured foreclosed real estate. There were no foreclosed real estate balances from GNMA loans at March 31, 2024 and December 31, 2023.

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The following table provides nonperforming assets by business segment:

Table I.2.11

NONPERFORMING ASSETS BY SEGMENT

(a)Excludes loans and leases that are 90 or more days past due and still accruing interest.

(b)Excludes loans classified as held for sale.

(c)Excludes foreclosed real estate and receivables related to government-insured mortgages. There were no foreclosed real estate balances from GNMA loans at March 31, 2024 and December 31, 2023.

(d)Ratio is non-performing assets to total loans and leases plus foreclosed real estate.

Past Due Loans and Potential Problem Assets

Past due loans are loans contractually past due as to interest or principal payments, but which have not yet been put on nonaccrual status.

Loans 90 days or more past due and still accruing were $10 million as of March 31, 2024 compared to $21 million as of December 31, 2023. Loans 30 to 89 days past due

and still accruing increased to $119 million as of March 31, 2024 compared to $85 million as of December 31, 2023, largely driven by an increase of $23 million in C&I loans and an increase of $11 million in consumer real estate loans.

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Table I.2.12

ACCRUING DELINQUENCIES & OTHER CREDIT DISCLOSURES

(a)Excludes loans classified as held for sale.

(b)Amounts are not included in nonperforming/nonaccrual loans.

(c)Amounts are also included in accruing loans and leases 30+ days past due.

(d)Guaranteed loans include FHA, VA, and GNMA loans repurchased through the GNMA buyout program.

Potential problem assets represent those assets where information about possible credit problems of borrowers has caused management to have serious doubts about the borrower’s ability to comply with present repayment terms and includes loans past due 90 days or more and still accruing. This definition is believed to be substantially consistent with the standards established by Federal

banking regulators for loans classified assubstandard. Potential problem assets in the loan portfolio were $712 million on March 31, 2024 and $666 million on December 31, 2023. The current expectation of losses from potential problem assets has been included in management’s analysis for assessing the adequacy of the allowance for loan and lease losses.

Modifications to Borrowers Experiencing Financial Difficulty

As part of FHN’s ongoing risk management practices, FHN attempts to work with borrowers when appropriate to extend or modify loan terms to better align with their current ability to repay. Modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated separately. See

Note 1 - Basis of Presentation and Accounting Policies, Note 3 - Loans and Leases, and Note 4 - Allowance for Credit Losses for further discussion regarding troubled loan modifications.

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Commercial Loan Modifications

As part of FHN’s credit risk management governance processes, the Loan Rehab and Recovery Department (LRRD) is responsible for managing most commercial relationships with borrowers whose financial condition has deteriorated to such an extent that the credits are individually reviewed for expected credit losses, classified as substandard or worse, placed on nonaccrual status, foreclosed or in process of foreclosure, or in active or contemplated litigation. LRRD has the authority and responsibility to enter into workout and/or rehabilitation agreements with troubled commercial borrowers in order to mitigate and/or minimize the amount of credit losses recognized from these problem assets. While every circumstance is different, LRRD will generally use forbearance agreements (generally 6-12 months) as an element of commercial loan workouts, which might include reduced interest rates, reduced payments, release of guarantor, term extensions or entering into short sale agreements. Principal forgiveness may be granted in specific workout circumstances.

The individual expected credit loss assessments completed on commercial loans are used in evaluating the appropriateness of qualitative adjustments to quantitatively modeled loss expectations for loans that are not considered collateral dependent. If a loan is collateral dependent, the carrying amount of a loan is written down to the net realizable value of the collateral. Each assessment considers any modified terms and is comprehensive to ensure appropriate assessment of expected credit losses.

Consumer Loan Modifications

FHN does not currently participate in any of the loan modification programs sponsored by the U.S. government but does generally structure modified consumer loans using the parameters of the former Home Affordable Modification Program.

Within the HELOC and real estate installment loans classes of the consumer portfolio segment, troubled loans are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 1% for up to 5 years) and a possible maturity date extension to reach an affordable housing debt-to-income ratio. After 5 years, the interest rate generally returns to the original interest rate prior to modification; for certain modifications, the modified interest rate increases 2% per year until the original interest rate prior to modification is achieved.

Permanent mortgage troubled loans are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 2% for up to 5 years) and a possible maturity date extension to reach an affordable housing debt-to-income ratio. After 5 years, the interest rate steps up 1 percent every year until it reaches the Federal Home Loan Mortgage Corporation Weekly Survey Rate cap. Contractual maturities may be extended to 40 years on permanent mortgages and to 30 years for consumer real estate loans.

Within the credit card class of the consumer portfolio segment, troubled loans are typically modified through either a short-term credit card hardship program or a longer-term credit card workout program. In the credit card hardship program, borrowers may be granted rate and payment reductions for 6 months to 1 year. In the credit card workout program, clients are granted a rate reduction to 0% and term extensions for up to 5 years to pay off the remaining balance.

Consumer loans may also be modified through court-imposed principal reductions in bankruptcy proceedings, which FHN is required to honor unless a borrower reaffirms the related debt.

Investment Securities

FHN’s investment securities portfolio consists principally of debt securities available for sale. FHN maintains a highly-rated securities portfolio consisting primarily of government agency issued mortgage-backed securities and collateralized mortgage obligations. The securities portfolio provides a source of income and liquidity and is an important tool used to balance the interest rate risk of the loan and deposit portfolios. The securities portfolio is periodically evaluated in light of established ALM objectives, changing market conditions that could affect

the profitability of the portfolio, the regulatory environment, and the level of interest rate risk to which FHN is exposed. These evaluations may result in steps taken to adjust the overall balance sheet positioning.

Investment securities were $9.5 billion and $9.7 billion on March 31, 2024 and December 31, 2023, respectively, representing 12% of total assets for both periods. See Note 2 - Investment Securities for more information about the securities portfolio.

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Deposits

Total deposits of $65.7 billion as of March 31, 2024 were stable compared to December 31, 2023. Interest-bearing deposits increased $755 million and noninterest-bearing deposits decreased $794 million. FHN continues to focus on building and deepening relationships to retain new clients obtained from the 2023 promotional campaigns.

FHN continues to maintain a well-diversified and stable funding mix across its footprint and specialty lines of business.

At March 31, 2024, commercial deposits were $36.2 billion, or 55% of total deposits and consumer deposits were $29.5 billion, or 45% of total deposits. At December 31, 2023, commercial deposits were $35.9 billion, or 55% of total deposits and consumer deposits were $29.9 billion, or 45% of total deposits.

At March 31, 2024, 38% of deposits were associated with Tennessee, 18% with Florida, 13% with North Carolina,

and 12% with Louisiana, with no other state above 10%. This mix remained consistent with December 31, 2023.

Total estimated uninsured deposits were $27.4 billion and $26.8 billion as of March 31, 2024 and December 31, 2023, representing 42% and 41% of total deposits, respectively. Of the uninsured deposits at March 31, 2024, $5.5 billion, or 8% of total deposits, were collateralized. At December 31, 2023, collateralized deposits were $5.3 billion, or 8% of total deposits.

See Table I.2.2 - Average Balances, Net Interest Income and Yields/Rates in this Report for information on average deposits including average rates paid.

The following table summarizes the major components of deposits as of March 31, 2024 and December 31, 2023.

Table I.2.13

DEPOSITS

Short-Term Borrowings

Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, trading liabilities, and other short-term borrowings. Total short-term borrowings were $3.2 billion as of March 31, 2024 compared to $3.1 billion as of December 31, 2023.

Short-term borrowings balances fluctuate largely based on the level of FHLB borrowing as a result of loan demand, deposit levels and balance sheet funding strategies.

Trading liabilities fluctuate based on various factors, including levels of trading securities and hedging strategies. Federal funds purchased fluctuates depending on the amount of excess funding of FHN’s correspondent bank customers. Balances of securities sold under agreements to repurchase fluctuate based on cost attractiveness relative to FHLB borrowing levels and the ability to pledge securities toward such transactions.

Term Borrowings

Term borrowings include senior and subordinated borrowings with original maturities greater than one year. Total term borrowings were $1.2 billion as of both March 31, 2024 and December 31, 2023.