FIRST HORIZON CORP

Significant Events and Transactions

Preferred Stock Redemption

On May 1, 2024, FHN redeemed all outstanding shares of its Series D Preferred Stock. The difference between the $100 million outstanding liquidation preference amount and the $94 million carrying value of the Series D Preferred Stock along with the related share repurchase tax resulted in $7 million in deemed dividends that were

included in net income available to common shareholders and EPS for the three and six months ended June 30, 2024. 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 7 — Preferred Stock for more information.

Financial Performance Summary

Second Quarter 2024 Highlights

FHN reported second quarter 2024 net income available to common shareholders of $184 million, or $0.34 per diluted share, compared to $184 million, or$0.33 per diluted share, in first quarter 2024 and $317 million, or $0.56 per diluted share, in second quarter 2023.

Net interest income of $629 million increased $4 million compared to first quarter 2024 from the benefit of higher loan volumes and yields, partially offset by continued mix shift within interest-bearing deposit products, higher use of wholesale funds, and seasonally lower public fund DDA. Net interest income declined $1 million compared to second quarter 2023 driven by the impact of higher funding costs partially offset by higher yields on earning assets.

Provision for credit losses was $55 million for second quarter 2024 compared to $50 million for both first quarter 2024 and second quarter 2023. Net charge-offs were $34 million, or 22 basis points, compared to $40 million, or 27 basis points, in first quarter 2024 and $23 million, or 16 basis points, in second quarter 2023.

Noninterest income of $186 million decreased $8 million compared to first quarter 2024 largely driven by a decrease in fixed income production partially offset by higher traditional banking fees. Noninterest income for second quarter 2024 decreased $214 million, or 54%,

compared to second quarter 2023, primarily driven by the gain on merger termination in 2023.

Noninterest expense of $500 million decreased $15 million from first quarter 2024, largely reflecting lower personnel and deposit insurance expense partially offset by increases in outside services expense. Compared with second quarter 2023, noninterest expense decreased $55 million, or 10%, largely reflecting a decline tied to the $50 million contribution to the First Horizon Foundation in second quarter 2023.

Year-to-Date and Period End Highlights

For the six months ended June 30, 2024, net income available to common shareholders was $368 million, or $0.67 per diluted share, compared to $560 million, or $1.00 per diluted share, for the six months ended June 30, 2023.

Net interest income decreased $65 million largely driven by higher funding costs partially offset by higher earning asset yields and loan growth.

Provision for credit losses of $105 million increased $5 million for the year-to-date period of 2024 compared to the same period of 2023.

Noninterest income decreased $190 million, or 33%, primarily from the gain on merger termination in 2023,

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

Table of Contents

partially offset by higher fixed income and mortgage banking income.

Noninterest expense decreased $18 million, or 2%, largely attributable to lower contributions expense tied to the $50 million contribution made to the First Horizon Foundation in 2023 and $15 million in Visa derivative valuation expense in 2023, partially offset by higher personnel expense, deposit insurance expense and legal and professional fees.

Period-end loans and leases of $62.8 billion increased $1.5 billion, or 2%, from December 31, 2023 as commercial loan growth of $1.3 billion was driven by growth in loans to mortgage companies and CRE loans.

Period-end deposits of $64.8 billion decreased $986 million compared to December 31, 2023. Interest-bearing

deposits decreased $130 million and noninterest-bearing deposits decreased $856 million.

Tier 1 risk-based capital and total risk-based capital ratios at June 30, 2024 were 12.05% and 13.67%, down from 12.42% and 13.96% at December 31, 2023, respectively. The CET1 ratio was 11.05% at June 30, 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 thethree and six months ended June 30, 2024, the three months ended March 31, 2024, and thethree and six months ended June 30, 2023 and on information about FHN's financial condition, loan and 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.2.26.

(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).