FIRST HORIZON CORP
For the period ended Dec 31, 2024. Filed Feb 27, 2025.
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FY2024 · Filed Feb 27, 2025
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Financial Performance Summary
FHN reported net income available to common shareholders of $738 million, or $1.36 per diluted share, for the year ended December 31, 2024, compared to $865 million, or $1.54 per diluted share, for the same period of 2023.
Net interest income of $2.5 billion decreased $29 million compared to 2023, largely driven by higher funding costs, partially offset by higher loan yields and loan growth. The net interest margin decreased 7 basis points to 3.35% compared to 3.42% in 2023.
Provision for credit losses decreased to $150 million compared to $260 million in 2023, largely driven by lower net charge-offs in 2024. Net charge-offs were $112 million compared to $170 million in 2023, largely reflecting the prior year impact of an idiosyncratic credit loss on a single relationship.
Noninterest income of $679 million decreased $248 million from 2023, largely driven by a $225 million gain on merger termination in 2023. Results in 2024 were also impacted by $91 million in net securities losses from an opportunistic restructuring of a portion of the securities portfolio. The countercyclical businesses improved from cycle lows in 2023 as fixed income increased $54 million and mortgage banking income increased $12 million.
Noninterest expense of $2.0 billion decreased $44 million from 2023, largely attributable to $68 million in FDIC special assessment expense and a $50 million contribution to the First Horizon Foundation in the previous year, partially offset by increases in incentive-based compensation tied to higher commission-based revenue and strategic investments in technology.
Period-end loans and leases of $62.6 billion increased $1.3 billion from December 31, 2023, reflecting commercial loan growth of $1.0 billion, or 2%, and consumer loan growth of $273 million, or 2%.
Period-end deposits of $65.6 billion decreased $199 million from December 31, 2023, as a $1.2 billion decrease in noninterest-bearing deposits more than offset a $984 million increase in interest-bearing deposits.
Tier 1 risk-based capital and total risk-based capital ratios at December 31, 2024 were 12.22% and 13.87%, respectively, compared to 12.42% and 13.96% at December 31, 2023. The CET1 ratio was 11.20% at December 31, 2024 compared to 11.40% at December 31, 2023.
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents
Table 7.1
KEY PERFORMANCE INDICATORS
| For the years ended December 31, | |||
|---|---|---|---|
| (Dollars in millions, except per share data) | 2024 | 2023 | 2022 |
| Pre-provision net revenue (a) | $1,155 | $1,388 | $1,254 |
| Diluted earnings per common share | $1.36 | $1.54 | $1.53 |
| Return on average assets (b) | 0.97% | 1.12% | 1.08% |
| Return on average common equity (c) | 8.80% | 11.01% | 11.81% |
| Return on average tangible common equity (a) (d) | 10.99% | 14.11% | 15.58% |
| Net interest margin (e) | 3.35% | 3.42% | 3.10% |
| Noninterest income to total revenue (f) | 23.42% | 26.82% | 24.99% |
| Efficiency ratio (g) | 62.06% | 59.90% | 61.24% |
| Allowance for loan and lease losses to total loans and leases | 1.30% | 1.26% | 1.18% |
| Net charge-offs (recoveries) to average loans and leases | 0.18% | 0.28% | 0.11% |
| Total period-end equity to period-end assets | 11.09% | 11.38% | 10.83% |
| Tangible common equity to tangible assets (a) | 8.37% | 8.48% | 7.12% |
| Cash dividends declared per common share | $0.60 | $0.60 | $0.60 |
| Book value per common share | $16.00 | $15.17 | $13.48 |
| Tangible book value per common share (a) | $12.85 | $12.13 | $10.23 |
| Common equity Tier 1 | 11.20% | 11.40% | 10.17% |
| Market capitalization | $10,559 | $7,913 | $13,159 |
(a)Represents a non-GAAP measure which is reconciled in the non-GAAP to GAAP reconciliation in Table 7.28.
(b)Calculated using net income divided by average assets.
(c)Calculated using net income available to common shareholders divided by average common equity.
(d)Calculated using 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).
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