FIRST HORIZON CORP

Results of Operations

Net Interest Income

Net interest income is FHN's largest source of revenue and is the difference between the interest earned on interest-earning assets (generally loans, leases and investment securities) and the interest expense incurred in connection with interest-bearing liabilities (generally deposits and borrowed funds). The level of net interest income is primarily a function of the difference between the effective yield on average interest-earning assets and the effective cost of interest-bearing liabilities. These factors are influenced by the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as economic conditions, competition for loans and deposits, the monetary policy of the FRB and market interest rates.

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

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Table I.2.2

The following table presents the major components of net interest income and net interest margin.

QUARTER-TO-DATE AVERAGE BALANCES, NET INTEREST INCOME & YIELDS/RATES

(a) Calculated using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21% and, where applicable, state income taxes.

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

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Net interest income increased $36 million from first quarter 2025 and net interest margin increased 10 basis points to 3.52% in first quarter 2026. Net interest income and net interest margin primarily benefited from lower interest-bearing deposit costs, which decreased 44 basis points from first quarter 2025. This benefit was partially offset by the impact of lower yields on earning assets, which decreased 21 basis points compared to the same period of 2025.

Average earning assets increased $2.1 billion from first quarter 2025, driven by increases of $1.5 billion in average

loans and leases, $354 million in trading securities, and $245 million in investment securities. Average interest-bearing liabilities increased $2.0 billion, driven by increases of $1.6 billion in average interest-bearing deposits, $478 million in federal funds purchased, and $213 million in other short-term borrowings. These increases were partially offset by a decrease of $308 million in average securities sold under agreements to repurchase.

Noninterest Income

The following table presents the significant components of noninterest income for the three months ended March 31, 2026 and 2025.

Table I.2.3

NONINTEREST INCOME

Noninterest income for first quarter 2026 increased $14 million, or 8%, compared to first quarter 2025.

Fixed income of $53 million increased $4 million compared to first quarter 2025. Fixed income product revenue increased $9 million as average daily revenue of $742 thousand increased $157 thousand compared to the same quarter of 2025, reflecting more favorable market conditions. Revenue from other products decreased $5 million, largely attributable to decreases in revenues from loan sales.

Deposit transactions and cash management revenues increased $3 million, largely driven by higher cash management fees.

Brokerage, management fees and commissions increased $3 million, or 12%, largely reflecting improvements related to the outsourcing of FHN's retail brokerage and wealth management operations in third quarter 2025.

Other service charges and fees increased $4 million, largely driven by elevated income related to the equipment finance lease business.

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

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Noninterest Expense

The following table presents the significant components of noninterest expense for the three months ended March 31, 2026 and 2025.

Table I.2.4

NONINTEREST EXPENSE

Noninterest expense of $505 million increased $18 million, or 4%, compared to first quarter 2025.

Personnel expense increased $10 million in first quarter 2026, largely reflecting a $10 million increase in salaries and benefits expense tied to higher associate headcount compared to first quarter 2025. Incentives and commissions expense declined $1 million as higher incentives expense was more than offset by lower equity based compensation.

Computer software expense increased $6 million, largely attributable to the timing of technology-related expenditures.

Provision for Credit Losses

Provision for credit losses includes the provision for loan and lease losses and the provision for unfunded lending commitments. The provision for credit losses is the expense necessary to maintain the ALLL and the accrual for unfunded lending commitments at levels appropriate to absorb management’s estimate of credit losses expected over the life of the loan and lease portfolio and the portfolio of unfunded loan commitments.

Provision for credit losses was $15 million for the first quarter 2026, compared to $40 million for first quarter 2025. Net charge-offs in first quarter 2026 were $28 million, or 18 basis points, compared to $29 million, or 19 basis points, in first quarter 2025.

The ACL to total loans and leases ratio decreased 3 basis points to 1.28% as of March 31, 2026 from 1.31% as of December 31, 2025, largely driven by improved grade migration and lower CRE and consumer loan balances. For additional information about the allowance for credit losses and general asset quality trends, refer to the Asset Quality section in this MD&A.

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

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Income Taxes

FHN recorded income tax expense of $76 million in first quarter 2026, compared to $63 million in first quarter 2025.

The effective tax rate was approximately 22.2% and 22.0% for the three months ended March 31, 2026 and March 31, 2025, respectively.

FHN’s effec tive tax rate is favorably affected by recurring items such as tax credits and other tax benefits from tax credit investments, tax-exempt income, and bank-owned life insurance. The effective rate is unfavorably affected by the non-deductible portions of FDIC premium and executive compensation. FHN’s effective tax rate also may be affected by items that may occur in any given period but are not consistent from period to period, such as changes in unrecognized tax benefits. The rate also may be affected by items resulting from business combinations.

A deferred tax asset ("DTA") or deferred tax liability ("DTL") is recognized for the tax consequences of

temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax consequence is calculated by applying current enacted statutory tax rates to these temporary differences in future years. As of March 31, 2026, FHN’s gross DTA after valuation allowance and gross DTLwere $642 million and $567 million, respectively, resulting in a net DTA of $75 million at March 31, 2026, compared with a net DTA of $92 million at December 31, 2025.

As of March 31, 2026, FHN had DTA balances related to federal and state income tax carryforwards of $21 million and $3 million, respectively, which will expire at various dates.

Based on current analysis, FHN believes that its ability to realize the net DTA is more likely than not. FHN monitors its net DTA and the needfor a valuation allowance on a quarterly basis. A significant adverse change in FHN’s taxable earnings outlook could result in the need for a valuation allowance.

Business Segment Results

FHN's reportable segments include Commercial, Consumer & Wealth; Wholesale; and Corporate. See Note 12 - Business Segment Information to the Consolidated Financial Statements in Part I, Item 1 of this report for additional disclosures related to FHN's segments.

Commercial, Consumer & Wealth

Pre-tax income for first quarter 2026 increased $32 million to $393 million, compared to $361 million for first quarter 2025, driven by a $26 million increase in total revenue and a $30 million decrease in the provision for credit losses, partly offset by a $24 million increase in noninterest expense. Total revenue increased $26 million as net interest income increased $17 million and noninterest income increased $9 million compared to first quarter 2025. The increase in net interest income was largely driven by lower rates paid on interest-bearing deposits. The increase in noninterest income was largely driven by higher deposit transactions and cash management fees, brokerage, management fees and commissions, and other service charges and fees. Noninterest expense increased $24 million compared to first quarter 2025, largely due to increased advertising and public relations and technology expenses allocated to the segment in the current year, as well as higher personnel expense tied to increased incentive-based compensation and increased salary expense reflecting higher associate headcount.

Wholesale

Pre-tax income in the Wholesale segment increased $3 million compared to first quarter 2025. Revenue

increased $17 million, as net interest income increased $12 million and noninterest income increased $5 million compared to first quarter 2025. The increase in noninterest income was largely driven by a $4 million increase in fixed income, reflecting higher ADR tied to more favorable market conditions during first quarter 2026, partially offset by lower other product revenue. Provision for credit losses increased $6 million compared to first quarter 2025. Noninterest expense increased $8 million, largely driven by higher personnel expense tied to an increase in incentive-based compensation.

Corporate

Pre-tax loss for the Corporate segment was $85 million for first quarter 2026 compared to $107 million for first quarter 2025, largely reflecting a $7 million decrease in net interest expense, a $14 million decrease in noninterest expense, and a $1 million decrease in the provision for credit losses. The decrease in noninterest expense was largely attributable to increased advertising and public relations and technology expense allocations from Corporate to the Commercial, Consumer & Wealth segment, partially offset by higher computer software and operations services expense. Results for 2026 also reflect decreases of $5 million in Visa derivative valuation expense and $1 million in FDIC special assessment expense.