FIRST HORIZON CORP

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 $63.3 billion as of June 30, 2025 increased $695 million, or 1%, compared to December 31, 2024. Commercial loans and leases increased $446 million, primarily from growth in loans to mortgage companies and other C&I loans, partially offset

by a decrease in commercial real estate loans. Consumer loans increased $249 million, primarily from growth in real estate installment loans, partially offset by declines in consumer construction and other consumer loans.

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The following table provides details regarding FHN's loans and leases as of June 30, 2025 and December 31, 2024.

Table I.2.8

LOANS & LEASES

(a)Includes equipment financing loans and leases.

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 include 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 to the Consolidated Financial Statements in Part I, Item 1 of this Report.

On June 30, 2025 and December 31, 2024, loans HFS were $402 million and $551 million, respectively. Held-for-sale consumer mortgage loans secured by residential real estate in process of foreclosure totaled $2 million and $1 million as of June 30, 2025 and December 31, 2024, respectively.

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 comprised of C&I loans and leases and CRE loans. Consumer loans are comprised of consumer real estate loans and credit card and other loans.

FHN had a concentration of residential real estate loans of 23% of total loans as of both June 30, 2025 and December 31, 2024. 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, 2024 in the Asset Quality section within the Analysis of Financial Condition discussion. FHN’s credit underwriting guidelines and loan product offerings as of June 30, 2025 are generally consistent with those reported and disclosed in FHN’s Form 10-K for the year ended December 31, 2024.

Commercial Loan and Lease Portfolios

C&I

C&I loans are the largest component of the loan and lease portfolio, comprising 54% and 53% of the total portfolio as of June 30, 2025 and December 31, 2024, respectively.

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

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leases, working capital lines of credit, and trade credit enhancement through letters of credit. Total C&I loans and leases increased $931 million to $34.4 billion as of June 30, 2025, compared to December 31, 2024, largely driven by a $587 million increase in loans to mortgage companies. The largest geographical concentrations of balances in the C&I portfolio as of June 30, 2025 were in Tennessee (20%), Florida (13%), Texas (10%), North Carolina (7%), Louisiana (6%), and California (6%). No other state represented more than 5% of the portfolio. This mix was generally consistent with December 31, 2024.

The following table provides the composition of the C&I portfolio by industry as of June 30, 2025 and December 31, 2024. 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.

Table I.2.9

C&I PORTFOLIO BY INDUSTRY

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

(b)Each industry in this category makes up less than 5% of the total.

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 borrowers in the finance and insurance industry and loans to mortgage companies were 23% of FHN’s C&I loan portfolio as of June 30, 2025 and 21% as of December 31, 2024, 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 11% and 12% of FHN's C&I portfolio as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, 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 12% and 10% of the C&I portfolio as of June 30, 2025 and December 31, 2024, 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 second quarter 2025, 77% of the loan originations were home purchases and 23% were refinance transactions.

Real Estate and Rental and Leasing

Loans to borrowers in the real estate and rental and leasing industry were 11% and 12% of FHN's C&I portfolio as of June 30, 2025 and December 31, 2024, respectively. 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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Finance and Insurance

The finance and insurance component represented 11% of the C&I portfolio as of both June 30, 2025 and December 31, 2024, 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 June 30, 2025, asset-based lending to consumer finance companies represented approximately $1.6 billion of the finance and insurance component.

Commercial Real Estate

The CRE portfolio decreased to $13.9 billion as of June 30, 2025 compared to $14.4 billion as of December 31, 2024,

largely attributable to paydowns. The CRE portfolio includes financings for both commercial construction and non-construction loans. This portfolio contains loans, draws on credit 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 June 30, 2025 were in Florida (26%), Texas (13%), North Carolina (12%), Georgia (10%), Tennessee (9%), and Louisiana (7%). No other state represented more than 5% of the portfolio. The mix was generally consistent with December 31, 2024.

The following table represents subcategories of CRE loans by property type.

Table I.2.10

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 is primarily composed of home equity lines and installment loans. This portfolio totaled $14.4 billion and $14.0 billion as of June 30, 2025 and December 31, 2024, respectively. The largest geographical concentrations of balances as of June 30, 2025 were in Florida (28%), Tennessee (22%), Texas (12%), Louisiana (8%), North Carolina (7%), Georgia (6%), and New York (5%). No other state represented more than 5% of the portfolio. The mix was generally consistent with December 31, 2024.

As of June 30, 2025, 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 June 30, 2025, representing no change from FICO scores as of December 31, 2024. Generally, performance of this portfolio is affected by life events that

affect borrowers’ finances, the level of unemployment, and home prices.

As of June 30, 2025 and December 31, 2024, FHN had held-to-maturity consumer mortgage loans secured by real estate totaling $32 million and $26 million, respectively, that were in the process of foreclosure.

HELOCs comprised $2.1 billion of the consumer real estate portfolio as of both June 30, 2025 and December 31, 2024. 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.

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As of June 30, 2025, approx imately 95% of FHN's HELOCs were in the draw period, which was consistent with December 31, 2024. It is expected that $612 million, or 30%, 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.

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

Table I.2.11

HELOC DRAW TO REPAYMENT SCHEDULE

Credit Card and Other

The credit card and other consumer loan portfolio totaled $597 million as of June 30, 2025 and $669 million as of December 31, 2024. This portfolio primarily consists of consumer-related credits, including home equity and

other personal consumer loans, credit card receivables, and automobile loans. The $72 million decrease was primarily 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 to the Consolidated Financial Statements in Part I, Item 1 of this report and “Critical Accounting Policies and Estimates” and Note 4 to the Consolidated Financial Statements in Part II, Item 8 of FHN's 2024 Form 10-K.

The ALLL totaled $814 million as of June 30, 2025 compared to $815 million as of December 31, 2024. The

ALLL balance as of June 30, 2025 is largely reflective of deterioration in macroeconomic forecasts and emerging concerns around potential economic instability, offset by lower criticized balances in the CRE portfolio. The ALLL to total loans and leases ratio decreased 1 basis point to 1.29% compared to 1.30% as of December 31, 2024. The ACL to total loans and leases ratio was 1.42% and 1.43% as of June 30, 2025 and December 31, 2024, respectively.

Consolidated Net Charge-offs

Net charge-offs in second quarter 2025 were $34 million, or an annualized 22 basis points of total loans and leases, compared to net charge-offs of $13 million, or 8 basis

points, in fourth quarter 2024, and $34 million, or 22 basis points, in second quarter 2024.

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Table I.2.12

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) decreased to $606 million as of June 30, 2025 from $608 million as of December 31, 2024, largely driven by a decline in nonaccrual CRE loans, partially offset by an increase in nonaccrual C&I loans. The increase in nonaccrual C&I loans was largely driven by loans in the finance and insurance industry, partially offset by loans in the construction industry. This portfolio continues to maintain strong underwriting and client selection. The vast majority of NPAs have individual impairment reviews with no specific reserve required. The nonperforming loans and leases ratio decreased 2 basis points to 0.94% as of June 30, 2025, compared to 0.96% as of December 31, 2024.

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Table I.2.13

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 June 30, 2025 and December 31, 2024.

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The following table provides nonperforming assets by business segment:

Table I.2.14

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 June 30, 2025 or December 31, 2024.

(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 $8 million as of June 30, 2025, compared to $21 million as of

December 31, 2024. Loans 30 to 89 days past due and still accruing increased to $114 million as of June 30, 2025, compared to $89 million as of December 31, 2024, driven by an increase in past due C&I and CRE loans, partially offset by a decrease in past due consumer loans.

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Table I.2.15

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 totaled $2.0 billion as of June 30, 2025 compared to $1.9 billion as of December 31, 2024. 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.

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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 to the Consolidated Financial Statements in Part I, Item 1 of this Report for further discussion regarding troubled loan modifications.

Commercial Loan Modifications

As part of FHN’s credit risk management governance processes, the Special Assets Department ("SAD") 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. SAD 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, SAD 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 may be 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 for its portfolio loans, but does generally structure modified consumer loans using the parameters of the former Home Affordable Modification Program.

Within the HELOC and permanent mortgage installment loans in the consumer portfolio segment, troubled loans are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 3%) and a possible maturity date extension of up to 30 years to reach an affordable housing expense-to-income ratio.

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 securities portfolio consisting primarily of bank-eligible GSE and GNMA 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 $9.4 billion and $9.2 billion on June 30, 2025 and December 31, 2024, respectively,

representing 11% of total assets for both periods. For more information about the securities portfolio, see Note 2 - Investment Securities to the Consolidated Financial Statements in Part I, Item 1 of this report.

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Deposits

Total deposits of $65.6 billion as of June 30, 2025 remained largely unchanged from December 31, 2024, with interest-bearing deposits increasing $125 million and noninterest-bearing deposits decreasing $129 million. The $657 million increase in time deposits from year-end was largely driven by a $1.0 billion increase in brokered certificates of deposit.

FHN continues to maintain a well-diversified and stable funding mix across its footprint and specialty lines of business. At June 30, 2025, commercial deposits were $37.1 billion, or 57% of total deposits, and consumer deposits were $28.5 billion, or 43% of total deposits. At December 31, 2024, commercial deposits were $36.2 billion, or 55% of total deposits, and consumer deposits were $29.4 billion, or 45% of total deposits.

At June 30, 2025, 37% of deposits were associated with Tennessee, 18% with Florida, 13% with North Carolina,

and 13% with Louisiana, with no other state above 10%. This mix remained relatively consistent with December 31, 2024.

Total estimated uninsured deposits were $26.9 billion as of June 30, 2025 and $26.7 billion as of December 31, 2024, representing 41% of total deposits for both periods. Of the uninsured deposits as of June 30, 2025, $4.6 billion, or 7% of total deposits, were collateralized. As of December 31, 2024, collateralized deposits were $4.7 billion, or 7% of total deposits.

See Tables I.2.2 and I.2.3 - 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 June 30, 2025 and December 31, 2024.

Table I.2.16

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 borrow ings decreased to $3.9 billion as of June 30, 2025 compared to $4.0 billion as of December 31, 2024. Trading liabilities decreased $81 million and other short-term borrowings decreased $785 million, primarily reflecting a $600 million decrease in FHLB borrowings. These decreases were partially offset by an increase of $846 million in federal funds purchased and securities sold under agreements to repurchase.

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 increased to $1.3 billion as of June 30, 2025 from $1.2 billion as of December 31, 2024.

This increase primarily reflects the issuance of $500 million of senior notes during first quarter 2025, partially offset by the retirement of $350 million in senior notes during second quarter 2025.