FIRST HORIZON CORP

Table 7.1

(a)Represents a non-GAAP measure which is reconciled in the non-GAAP to GAAP reconciliation in Table 7.33.

(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).

2025 Financial Performance Review

FHN reported net income available to common shareholders of $956 million, or $1.87 per diluted share, for the year ended December 31, 2025, an increase of $218 million compared to $738 million, or $1.36 per diluted share, for the same period of 2024.

Net interest income of $2.6 billion increased $111 million compared to 2024, largely driven by lower deposit pricing

and higher loan balances, specifically in high-yielding loans to mortgage companies. The net interest margin increased 12 basis points to 3.47% compared to 3.35% in 2024.

Provision for credit losses decreased to $65 million compared to $150 million in 2024, largely reflecting declines in criticized and classified loans and a more favorable portfolio mix. Net charge-offs were $120 million,

ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)

Table of Contents

or 19 basis points, compared to $112 million, or 18 basis points in 2024. The ACL to loans ratio decreased to 1.31% from 1.43% in 2024, reflecting criticized and classified loan resolutions throughout the year as well as a favorable portfolio mix shift.

Noninterest income of $797 million increased $118 million, or 17%, from 2024, largely driven by the prior year impact of $91 million in net securities losses from a restructuring of the securities portfolio. In addition, the countercyclical businesses improved during 2025 as fixed income increased $19 million and mortgage banking income increased $8 million.

Noninterest expense of $2.1 billion increased $39 million, or 2%, from 2024, largely attributable to higher personnel expense from talent additions and increases in occupancy, software, and legal and professional fees, partially offset by lower deposit insurance expense.

Period-end loans and leases of $64.2 billion increased $1.6 billion from December 31, 2024, largely driven by commercial loan growth, as loans to mortgage companies and other C&I loans each grew $1.2 billion, offset by a decline in CRE loans of $858 million.

Period-end deposits of $67.5 billion increased $1.9 billion from December 31, 2024, as interest-bearing deposits increased $2.1 billion and noninterest-bearing deposits decreased $198 million.

Tier 1 risk-based capital and total risk-based capital ratios at December 31, 2025 were 11.51% and 13.35%, respectively, compared to 12.22% and 14.25% at December 31, 2024. The CET1 ratio was 10.63% at December 31, 2025 compared to 11.20% at December 31, 2024.