FIRST HORIZON CORP
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
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Executive Overview
Significant Events and Transactions
On August 1, 2025, FHN redeemed all outstanding shares of its Series B Preferred Stock with a carrying value of $77 million. Prior to the redemption, the Series B Preferred Stock qualified as Tier 1 capital. For more
information, see Note 7 — Preferred Stock in the Consolidated Financial Statements in Part I, Item 1 of this report.
Financial Performance Summary
Third Quarter 2025 Highlights
FHN reported third quarter 2025 net income available to common shareholders of $254 million, or $0.50 per diluted share, compared to $233 million, or $0.45 per diluted share, in second quarter 2025 and $213 million, or $0.40 per diluted share, in third quarter 2024.
Net interest income of $674 million increased $33 million compared to second quarter 2025, driven by average balance growth in higher yielding assets and cash basis income, as well as increased accretion of $12 million related to the Main Street Lending Program. Net interest income increased $47 million compared to third quarter 2024, largely driven by increased accretion of $15 million related to the Main Street Lending Program, lower interest-bearing deposit costs and the impact of the investment portfolio repositioning in fourth quarter 2024, partially offset by lower loan yields.
Provision for credit losses was a credit of $5 million for third quarter 2025 compared to an expense of $30 million for second quarter 2025 and an expense of $35 million for third quarter 2024. Net charge-offs were $26 million, or 17 basis points, compared to $34 million, or 22 basis points, in second quarter 2025, and $24 million, or 15 basis points, in third quarter 2024.
Noninterest income of $215 million increased $26 million compared to second quarter 2025, largely driven by improvement in the counter-cyclical businesses, as fixed income revenues increased $15 million and mortgage banking revenues increased $5 million. Noninterest income for third quarter 2025 increased $15 million, compared to third quarter 2024, largely driven by higher
fixed income revenues of $10 million and higher mortgage banking revenues of $6 million.
Noninterest expense of $550 million increased $59 million from second quarter 2025, largely reflecting a $20 million contribution to the First Horizon Foundation, $10 million in Visa derivative valuation expense, and increases in outside services and incentive-based compensation expense. Compared with third quarter 2024, noninterest expense increased $39 million, largely driven by a $20 million contribution to the First Horizon Foundation and higher personnel expense of $14 million.
Year-to-Date and Period End Highlights
For the nine months ended September 30, 2025, net income available to common shareholders was $699 million, or $1.36 per diluted share, compared to $581 million, or $1.06 per diluted share, for the nine months ended September 30, 2024.
Net interest income increased $65 million, largely driven by lower funding costs and the impact of the investment portfolio repositioning in fourth quarter 2024, partially offset by lower loan yields. Interest income and net interest margin also benefited from increased accretion of $18 million related to the Main Street Lending Program.
Provision for credit losses of $65 million decreased $75 million for the year-to-date period of 2025 compared to the same period of 2024. Net charge-offs of $89 million declined $9 million for the year-to-date period of 2025 compared to the same period of 2024. Nonperforming loans of $605 million increased $3 million from December 31, 2024 as increases in C&I and consumer real estate were partially offset by a reduction in CRE. The ACL to
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PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents
total loans and leases ratio decreased 5 basis points to 1.38% as of September 30, 2025 compared to December 31, 2024, largely driven by economic scenario weighting changes, lower specific reserves and lower CRE loan balances.
Noninterest income for the year-to-date period increased $4 million, or 1%, largely from higher fixed income and mortgage banking revenues, partially offset by lower deposit transactions and cash management fees.
Noninterest expense for the year-to-date period increased $2 million as increases in contributions, computer software and net occupancy expenses were offset by declines in deposit insurance, contract employment and outsourcing, and other expenses.
Period-end loans and leases of $63.1 billion increased $493 million, or 1%, from December 31, 2024. Commercial
loans increased $227 million, driven by an increase of $973 million in the C&I portfolio, partially offset by a $746 million decline in the CRE portfolio. Growth in loans to mortgage companies contributed $455 million of the increase in the C&I portfolio. Consumer loan growth was $266 million for the year-to-date period.
Period-end deposits were $65.5 billion compared to $65.6 billion as of December 31, 2024, as interest-bearing deposits decreased $58 million and noninterest-bearing deposits increased $2 million.
The Common Equity Tier 1 ratio was 10.96% at September 30, 2025 compared to 11.20% at December 31, 2024. Tier 1 risk-based capital and total risk-based capital ratios at September 30, 2025 were 11.86% and 13.77%, compared to 12.22% and 14.25% at December 31, 2024.
Table I.2.1
KEY PERFORMANCE INDICATORS
| As of or for the three months ended · As of or for the nine months ended | |||||
|---|---|---|---|---|---|
| (Dollars in millions, except per share data) | September 30, 2025 | June 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 |
| Pre-provision net revenue (a) | $339 | $339 | $316 | $1,002 | $935 |
| Diluted earnings per common share | $0.50 | $0.45 | $0.40 | $1.36 | $1.06 |
| Return on average assets (b) | 1.29% | 1.20% | 1.08% | 1.20% | 1.02% |
| Return on average common equity (c) | 11.74% | 11.14% | 10.10% | 11.07% | 9.28% |
| Return on average tangible common equity (a) (d) | 14.49% | 13.85% | 12.60% | 13.73% | 11.62% |
| Net interest margin (e) | 3.55% | 3.40% | 3.31% | 3.46% | 3.35% |
| Noninterest income to total revenue (f) | 24.16% | 22.73% | 24.06% | 23.09% | 23.52% |
| Efficiency ratio (g) | 61.92% | 59.20% | 61.89% | 60.43% | 62.08% |
| Allowance for loan and lease losses to total loans and leases | 1.23% | 1.29% | 1.32% | 1.23% | 1.32% |
| Net charge-offs (recoveries) to average loans and leases (annualized) | 0.17% | 0.22% | 0.15% | 0.19% | 0.21% |
| Total period-end equity to period-end assets | 11.11% | 11.28% | 11.27% | 11.11% | 11.27% |
| Tangible common equity to tangible assets (a) | 8.55% | 8.58% | 8.56% | 8.55% | 8.56% |
| Cash dividends declared per common share | $0.15 | $0.15 | $0.15 | $0.45 | $0.45 |
| Book value per common share | $17.19 | $16.78 | $16.15 | $17.19 | $16.15 |
| Tangible book value per common share (a) | $13.94 | $13.57 | $13.02 | $13.94 | $13.02 |
| Common equity Tier 1 | 10.96% | 10.99% | 11.23% | 10.96% | 11.23% |
| Market capitalization | $11,313 | $10,787 | $8,265 | $11,313 | $8,265 |
(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).
The following portions of this MD&A focus in more detail on the results of operations for thethree and nine months ended September 30, 2025, the three months ended June 30, 2025, and thethree and nine months ended September 30, 2024 and on information about FHN's financial condition, loan and lease portfolio, liquidity, funding sources, capital and other matters.
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