FIRST HORIZON CORP

Significant Events and Transactions

FDIC Special Assessment

In November 2023, the FDIC approved a final rule to implement a special assessment on banks to replenish the deposit insurance fund following the failures of Silicon Valley Bank and Signature Bank. FHN recognized an estimated expense of $68 million for the special assessment in the fourth quarter of 2023. In February 2024, the FDIC indicated that it now expects a larger loss to the deposit insurance fund than originally estimated and that it plans to provide institutions with an updated estimate of their total special assessment amount with its first quarter 2024 special assessment invoice, to be

released in June 2024. This updated special assessment total resulted in $10 million in additional estimated FDIC expense recorded in first quarter 2024.

Preferred Stock Redemption

On May 1, 2024, FHN redeemed all outstanding shares of its Series D Preferred Stock with a carrying value of $94 million. The Series D Preferred Stock did not qualify as Tier 1 capital because the earliest redemption date was less than five years from the issuance date. Therefore, the redemption did not impact FHN's regulatory capital ratios. See Note 17 — Subsequent Events for more information.

Financial Performance Summary

FHN reported first quarter 2024 net income available to common shareholders of $184 million, or $0.33 per diluted share, compared to $175 million, or$0.31 per diluted share, in fourth quarter 2023 and $243 million, or $0.43 per diluted share, in first quarter 2023.

Net interest income of $625 million increased $8 million compared to fourth quarter 2023 from the benefit of loan and deposit repricing. Net interest income declined $63 million compared to first quarter 2023 driven by the impact of higher funding costs partially offset by higher yields on earning assets.

Provision for credit losses of $50 million remained unchanged compared to fourth quarter 2023 and first quarter 2023.

Noninterest income of $194 million increased $11 million compared to fourth quarter 2023 and $23 million compared to first quarter 2023, largely driven by higher fixed income production.

Noninterest expense of $515 million decreased $58 million from fourth quarter 2023, largely reflecting the impact of the estimated FDIC special assessment which was $10 million in first quarter 2024 and $68 million

in fourth quarter 2023. Compared with first quarter 2023, noninterest expense increased $37 million, or 8%, largely attributable to higher personnel and deposit insurance expense.

Period-end loans and leases of $61.8 billion increased $461 million, or 1%, from December 31, 2023 as commercial loan growth of $488 million was driven by growth in loans to mortgage companies and CRE loans.

Period-end deposits of $65.7 billion remained stable compared to December 31, 2023. Interest-bearing deposits increased $755 million and noninterest-bearing deposits decreased $794 million.

Tier 1 risk-based capital and total risk-based capital ratios at March 31, 2024 were 12.33% and 13.93%, down from 12.42% and 13.96% at December 31, 2023, respectively. The CET1 ratio was 11.31% at March 31, 2024 compared to 11.40% at December 31, 2023.

The following portions of this MD&A focus in more detail on the results of operations for the three months ended March 31, 2024, the three months ended December 31, 2023, and the three months ended March 31, 2023 and on information about FHN's financial condition, loan and

PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)

Table of Contents

lease portfolio, liquidity, funding sources, capital and other matters.

Table I.2.1

KEY PERFORMANCE INDICATORS

(a) Represents a non-GAAP measure which is reconciled in the non-GAAP to GAAP reconciliation in Table I.2.23.

(b) Calculated using annualized net income divided by average assets.

(c) Calculated using annualized net income available to common shareholders divided by average common equity.

(d) Calculated using annualized net income available to common shareholders divided by average tangible common equity.

(e) Net interest margin is computed using total net interest income adjusted to an FTE basis assuming a statutory federal income tax rate of 21% and, where applicable, state income taxes.

(f) Ratio is noninterest income excluding securities gains (losses) to total revenue excluding securities gains (losses).

(g) Ratio is noninterest expense to total revenue excluding securities gains (losses).