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What changed in FIRST HORIZON CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FIRST HORIZON CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+763 added−772 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-23)

Top changes in FIRST HORIZON CORP's 2024 10-K

763 paragraphs added · 772 removed · 625 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

212 edited+48 added−34 removed207 unchanged
Biggest changeTable 1.7 Regional vs Specialty Banking Snapshot (Dollars in millions) Regional Specialty 2023 Average assets $ 45,858 $ 20,161 2023 Net interest income $ 2,354 $ 518 2023 Noninterest income $ 433 $ 209 2023 Pre-tax income $ 1,262 $ 313 Regional and Specialty Lines of Business The principal lines of business in the regional banking segment are: • commercial banking (larger business enterprises) • business banking (smaller business enterprises) • consumer banking • private client and wealth management The principal lines of business in the specialty banking segment are: • fixed income/capital markets • professional commercial real estate (Pro-CRE) • mortgage warehouse lending • asset-based (secured) lending • franchise finance • equipment finance • energy finance • healthcare finance • tax credit finance 8 2023 FORM 10-K ANNUAL REPORT ITEM 1.
Biggest changeTable 1.7 Commercial, Consumer & Wealth (CCW) vs Wholesale Banking Snapshot (Dollars in millions) CCW Wholesale 2024 Average assets $ 59,402 $ 8,209 2024 Net interest income 2,543 194 2024 Noninterest income 461 230 2024 Pre-tax income 1,429 122 Commercial, Consumer & Wealth and Wholesale Lines of Business The principal lines of business in the commercial, consumer & wealth banking segment are: • commercial banking (larger business enterprises) • business banking (smaller business enterprises) • consumer banking • private client and wealth management 10 2024 FORM 10-K ANNUAL REPORT ITEM 1.
As shown in Table 1.3, our loans are broken into two major types, commercial and consumer. Each type is broken into portfolios. Our three major portfolios are: traditional, unsecured commercial, financial, and industrial (“C&I”) loans; secured commercial real estate (“CRE”) loans; and secured consumer real estate loans. A fourth portfolio consists of consumer credit card and other consumer debt.
As shown in Table 1.3, our loans are broken into two major types: commercial and consumer. Each type is broken into portfolios. Our three major portfolios are: traditional, unsecured commercial, and financial and industrial (“C&I”) loans; secured commercial real estate (“CRE”) loans; and secured consumer real estate loans. A fourth portfolio consists of consumer credit card and other consumer debt.
Subsequent to the extension, TD informed FHN that TD did not expect that the necessary regulatory approvals to be received in time to complete the transaction by May 27, 2023. On May 4, 2023, FHN and TD agreed to terminate the transaction.
Subsequent to the extension, TD informed FHN that TD did not expect the necessary regulatory approvals to be received in time to complete the transaction by May 27, 2023. On May 4, 2023, FHN and TD agreed to terminate the transaction.
If the yield curve remains relatively steep, with long-term interest rates noticeably higher than short rates, our net interest margin will tend not to be significantly compressed by the lower rate environment, since lower short rates will keep our funding costs down while higher long rates will support the rates we can charge on lending.
If the yield curve remains relatively steep, with long-term interest rates noticeably higher than short-term rates, our net interest margin will tend not to be significantly compressed by the lower rate environment, since lower short rates will keep our funding costs down while higher long rates will support the rates we can charge on lending.
We further manage credit risk by diversifying our loan portfolio, by managing its granularity, by following per-relationship lending limits, and by recording and managing an allowance for loan and lease losses based on the factors mentioned above and in accordance with applicable accounting rules.
We further manage credit risk by diversifying our loan and lease portfolio, by managing its granularity, by following per-relationship lending limits, and by recording and managing an allowance for loan and lease losses based on the factors mentioned above and in accordance with applicable accounting rules.
Actions of this sort typically are elevated in the first few years after a significant merger. For example, in 2021 we closed/consolidated several dozen banking locations in the wake of the 2020 IBKC merger, and we divested our title insurance business in 2022. Other dispositions have occurred in recent years and likely will continue in the future.
Actions of this sort typically are elevated in the first few years after a significant merger. For example, in 2021 we closed or consolidated several dozen banking locations in the wake of the 2020 IBKC merger, and we divested our title insurance business in 2022. Other dispositions have occurred in recent years and likely will continue in the future.
Our Purpose: To help our clients unlock their full potential with capital and counsel. Our Values: • Put Clients First – Go above and beyond to listen, understand and solve the client’s needs. Follow through and exceed expectations every step of the way. • Care About People – Treat others with respect and dignity. Foster a culture of collaboration.
Our Purpose: To help our clients unlock their full potential with capital and counsel. Our Core Values: • Put Clients First – Go above and beyond to listen, understand and solve the client’s needs. Follow through and exceed expectations every step of the way. • Care About People – Treat others with respect and dignity. Foster a culture of collaboration.
Incentive programs are difficult to design well, and even if well-designed, often they must be updated to address changes in our business. A poorly designed incentive program—where goals are too difficult, too easy, or not well related to desired outcomes—could provide little useful motivation to key associates, could increase turnover, and could impact client retention.
Incentive programs are difficult to design well, and even if well-designed, often must be updated to address changes in our business. A poorly designed incentive program—where goals are too difficult, too easy, or not well related to desired outcomes—could provide little useful motivation to key associates, could increase turnover, and could impact client retention.
We further manage other counterparty credit risk in a variety of ways, some of which are discussed in other parts of this Item 1A and all of which have as a primary goal the avoidance of having too much risk concentrated with any single counterparty. We record loan charge-offs in accordance with accounting and regulatory guidelines and rules.
We further manage other counterparty credit risk in a variety of ways, some of which are discussed in other parts of this Item 1A and all of which have as a primary goal the avoidance of having too much risk concentrated with any single counterparty. We record loan and lease charge-offs in accordance with accounting and regulatory guidelines and rules.
The stressed outflow estimate is based a standard set of hypothetical assumptions set forth in regulatory requirements. The LCR is designed to ensure banks hold a buffer of high-quality liquid assets so that they can meet their short-term liquidity needs and remain stable and strong in a stressed environment.
The stressed outflow estimate is based on a standard set of hypothetical assumptions set forth in regulatory requirements. The LCR is designed to ensure banks hold a buffer of high-quality liquid assets so that they can meet their short-term liquidity needs and remain stable and strong in a stressed environment.
Common vulnerabilities include: clients and associates that fall victim to malicious emails or other communications and inappropriately share credentials allowing access to accounts or systems; older software or systems that do not have up-to-date security and are not sufficiently isolated from other systems; third-party software vulnerabilities; and third-party systems vulnerabilities.
Common vulnerabilities include: clients and associates that fall victim to malicious "phishing" emails or other communications and inappropriately share credentials allowing access to accounts or systems; older software or systems that do not have up-to-date security and are not sufficiently isolated from other systems; third-party software vulnerabilities; and third-party systems vulnerabilities.
Different topics have different cut-off points for the tiers. Within each topic, different rules apply to the different tiers. Cut-off points vary significantly. However, as a rough generalization, for many regulatory topics the critical cut-off points are $10 billion, $100 billion, and $250 billion.
Different topics have different cut-off points for the tiers. Within each topic, different rules apply to the different tiers. Cut-off points vary significantly. However, as a rough generalization, for many regulatory topics the critical cut-off points are $10 billion, $100 billion, $250 billion, and $700 billion.
Our ability to manage credit risks depends primarily upon our ability to assess the creditworthiness of loan clients and other counterparties and the value of any collateral, including real estate, among other things.
Our ability to manage credit risks depends primarily upon our ability to assess the creditworthiness of loan and lease clients and other counterparties and the value of any collateral, including real estate, among other things.
BUSINESS Table of Contents Competition In all aspects of the businesses in which we engage, we face substantial competition from banks doing business in our markets as well as from savings and loan associations, credit unions, other financial institutions, consumer finance companies, trust companies, investment counseling firms, money market and other mutual funds, insurance companies and agencies, securities firms, mortgage banking companies, hedge funds, and other firms offering financial products or services.
Competition In all aspects of the businesses in which we engage, we face substantial competition from banks doing business in our markets as well as from savings and loan associations, credit unions, other financial institutions, consumer finance companies, trust companies, investment counseling firms, money market and other mutual funds, insurance companies and agencies, securities firms, mortgage banking companies, hedge funds, and other firms offering financial products or services.
The emergence of non-traditional, disruptive service providers (see Industry Disruption within this Item 1A beginning on page 31 ) has intensified the competitive environment. Some competitors are traditional banks, subject to the same regulatory framework as we are, while others are not banks and in many cases experience a significantly different or reduced degree of regulation.
The emergence of non-traditional, disruptive service providers (see Industry Disruption within this Item 1A beginning on page 33 ) has intensified the competitive environment. Some competitors are traditional banks, subject to the same regulatory framework as we are, while others are not banks and in many cases experience a significantly different or reduced degree of regulation.
(a) Leasing, rental of real estate, equipment, and goods. CRE Loans The CRE portfolio was $14 billion at December 31, 2023. The largest property type within CRE is multi-family, as shown in Table 1.5b. The next three largest property types were office, retail, and industrial. At year-end, nearly half of the office loans were for medical industry office space.
(a) Leasing, rental of real estate, equipment, and goods. CRE Loans The CRE portfolio was $14 billion at December 31, 2024. The largest property type within CRE is multi-family, as shown in Table 1.5b. The next three largest property types were office, retail, and industrial. At year-end, nearly half of the office loans were for medical industry office space.
Political and social fragmentation in the U.S., combined with access to social media platforms, can increase reputation risk in ways that might not be easily avoided by traditional means. The predominant culture within the banking industry remains traditional: in order to preserve their business reputations, banks generally prefer to avoid direct, public involvement in political or social controversy.
Political and social fragmentation in the U.S., combined with access to social media platforms, can increase reputation risk in ways that might not be easily avoided by traditional means. The predominant culture within the banking industry remains traditional: in order to preserve their business reputations, banks generally tend to avoid direct, public involvement in political or social controversy.
Perpetrators potentially can be associates, clients, and certain vendors, all of whom legitimately have access to some portion of our systems, as well as outsiders with no legitimate access. Cybersecurity incidents happen frequently; they are an unavoidable part of doing business. Often, but not always, we detect and block the attempt.
Perpetrators potentially can be associates, clients, third parties, and certain vendors, all of whom legitimately have access to some portion of our systems, as well as outsiders with no legitimate access. Cybersecurity incidents happen frequently; they are an unavoidable part of doing business. Often, but not always, we detect and block the attempt.
As indicated in this Item 1A under the caption Accounting Risks beginning on page 46 , these guidelines and rules could change and cause provision expense or charge-offs to be more volatile, or to be recognized on an accelerated basis, for reasons not always related to the underlying performance of our portfolio.
As indicated in this Item 1A under the caption Accounting Risks beginning on page 49 , these guidelines and rules could change and cause provision expense or charge-offs to be more volatile, or to be recognized on an accelerated basis, for reasons not always related to the underlying performance of our portfolio.
The impact of those factors on our operating results can be substantial, especially if they consistently move up or down at the same time. Our traditional banking businesses are crucially dependent on the level of interest rates, whether federal monetary policy is easing or tightening, and on the shape of the interest rate yield curve.
The impact of those factors on our operating results can be substantial, especially if they consistently move up or down at the same time. Our traditional banking businesses are highly dependent on the level of interest rates, whether federal monetary policy is easing or tightening, and on the shape of the interest rate yield curve.
ITEM 1. BUSINESS Table of Contents Loans Loan Portfolios Lending is a major source of revenue for us, and loans are our largest asset type. Table 1.3 shows our total loans (including certain leases) at year-end 2023, along with some details regarding the composition of our loans. Most of our loans are commercial.
ITEM 1. BUSINESS Table of Contents Loans Loan Portfolios Lending is a major source of revenue for us, and loans are our largest asset type. Table 1.3 shows our total loans (including certain leases) at year-end 2024, along with some details regarding the composition of our loans. Most of our loans are commercial.
Fixed Income Our fixed income and capital markets business, reported as part of our specialty banking segment, is significantly affected by interest rate cycles which, in turn, are affected by general economic and business cycles. In broad terms, the typical impact of Federal Reserve interest and monetary policy on our fixed income business is summarized in Table 1.9.
Fixed Income Our fixed income and capital markets business, reported as part of our wholesale banking segment, is significantly affected by interest rate cycles which, in turn, are affected by general economic and business cycles. In broad terms, the typical impact of Federal Reserve interest and monetary policy on our fixed income business is summarized in Table 1.9.
We believe that the successful execution of organic growth depends upon a number of key elements, including: • our ability to attract and retain clients in our banking market areas; • our ability to achieve and maintain growth in our earnings while pursuing new business opportunities; • our ability to maintain a high level of client service while optimizing our physical banking center count due to changing client demand, all while expanding our remote banking services and expanding or enhancing our information processing, technology, compliance, and other operational infrastructures effectively and efficiently; • our ability to manage the liquidity and capital requirements associated with growth, especially organic growth and cash-funded acquisitions; and • our ability to manage effectively and efficiently the changes and adaptations necessitated by a complex, burdensome, and evolving regulatory environment.
We believe that the successful execution of organic growth depends upon a number of key elements, including: • our ability to attract and retain clients in our commercial and consumer banking market areas and in our specialty banking markets; • our ability to achieve and maintain growth in our earnings while pursuing new business opportunities; • our ability to maintain a high level of client service while optimizing our physical banking center count due to changing client demand, all while expanding our remote banking services and expanding or enhancing our information processing, technology, compliance, and other operational infrastructures effectively and efficiently; • our ability to manage the liquidity and capital requirements associated with growth, especially organic growth and cash-funded acquisitions; and • our ability to manage effectively and efficiently the changes and adaptations necessitated by a complex, burdensome, and evolving regulatory environment.
Although our current strategies are expected to evolve as business conditions change, currently our primary strategies are to (1) invest resources in our banking businesses, (2) seek to exploit growth opportunities, especially within the markets we serve, and (3) seek to exploit opportunities to cut cost without significant revenue impact.
Although our current strategies are expected to evolve as business conditions change, currently our primary strategies are to (1) invest resources in our banking businesses, (2) seek to exploit growth opportunities, especially within the markets we serve, and (3) seek to exploit opportunities to cut costs without significant revenue impact.
Because of the potential for very serious consequences associated with these risks, our electronic systems and their upgrades need to address internal and external security concerns to a high degree, and our systems must comply with applicable banking and other regulations pertaining to bank safety and client protection.
Because of the potential for very serious consequences associated with cybersecurity risks, our electronic systems and their upgrades need to address internal and external security concerns to a high degree, and our systems must comply with applicable banking and other regulations pertaining to bank safety and client protection.
In addition, efforts to comply with applicable regulations may increase our costs and/or limit our ability to pursue certain business opportunities. See Supervision and Regulation within Item 1 of this report, beginning on page 19 , for additional information concerning financial industry regulations.
In addition, efforts to comply with applicable regulations may increase our costs and/or limit our ability to pursue certain business opportunities. See Supervision and Regulation within Item 1 of this report, beginning on page 21 , for additional information concerning financial industry regulations.
In addition to being sensitive to economic conditions generally, those specialty business lines can be very strongly impacted or benefited by changes in interest rates or in the shape of the yield curve. Those business lines are fixed income/capital markets, mortgage warehouse lending, and mortgage origination.
In addition to being sensitive to economic conditions generally, those wholesale business lines can be very strongly impacted or benefited by changes in interest rates or in the shape of the yield curve. Those business lines are fixed income/capital markets, mortgage warehouse lending, and mortgage origination.
Various consumer laws and regulations also affect the operations of the Bank. In addition, several of the Bank’s subsidiaries are regulated separately, as discussed in Subsidiaries within this Item 1 under the Other Business Information discussion above, which begins on page 16 .
Various consumer laws and regulations also affect the operations of the Bank. In addition, several of the Bank’s subsidiaries are regulated separately, as discussed in Subsidiaries within this Item 1 under the Other Business Information discussion above, which begins on page 19 .
Competition for clients related to regional and specialty banking products and services is most pronounced in rate pricing (loan rates, loan spreads, and deposit rates), services pricing, scope of services offered, quality of service, convenience, and ease of use for self-service areas such as online and mobile banking.
Competition for clients related to traditional and specialty banking products and services is most pronounced in rate pricing (loan rates, loan spreads, and deposit rates), services pricing, scope of services offered, quality of service, convenience, and ease of use for self-service areas such as online and mobile banking.
BUSINESS Table of Contents Table 1.11 REQUIREMENTS FOR PCA CAPITALIZATION CATEGORIES Well capitalized • Common Equity Tier 1 Capital ratio of at least 6.5% • Tier 1 Capital ratio of at least 8% • Total Capital ratio of at least 10% • Leverage ratio of at least 5% • Not subject to a directive, order, or written agreement to meet and maintain specific capital levels Adequately capitalized • Common Equity Tier 1 Capital ratio of at least 4.5% • Tier 1 Capital ratio of at least 6% • Total Capital ratio of at least 8% • Leverage ratio of at least 4% • Not subject to a directive, order, or written agreement to meet and maintain specific capital levels Undercapitalized Failure to maintain any requirement to be adequately capitalized Significantly Undercapitalized Failure to maintain Common Equity Tier 1 Capital ratio of at least 3%, Tier 1 Capital ratio of at least 4%, Total Capital ratio of at least 6%, or a Leverage ratio of at least 3% Critically Undercapitalized Failure to maintain a level of tangible equity equal to at least 2% of total assets At December 31, 2023, the Bank had sufficient capital to qualify as “well capitalized” under the regulatory capital requirements discussed above.
Table 1.11 REQUIREMENTS FOR PCA CAPITALIZATION CATEGORIES Well capitalized • Common Equity Tier 1 Capital ratio of at least 6.5% • Tier 1 Capital ratio of at least 8% • Total Capital ratio of at least 10% • Leverage ratio of at least 5% • Not subject to a directive, order, or written agreement to meet and maintain specific capital levels Adequately capitalized • Common Equity Tier 1 Capital ratio of at least 4.5% • Tier 1 Capital ratio of at least 6% • Total Capital ratio of at least 8% • Leverage ratio of at least 4% • Not subject to a directive, order, or written agreement to meet and maintain specific capital levels Undercapitalized Failure to maintain any requirement to be adequately capitalized Significantly Undercapitalized Failure to maintain Common Equity Tier 1 Capital ratio of at least 3%, Tier 1 Capital ratio of at least 4%, Total Capital ratio of at least 6%, or a Leverage ratio of at least 3% Critically Undercapitalized Failure to maintain a level of tangible equity equal to at least 2% of total assets At December 31, 2024, the Bank had sufficient capital to qualify as “well capitalized” under the regulatory capital requirements discussed above.
Risks associated with interest rates and the yield curve are discussed in this Item 1A under the caption Interest Rate and Yield Curve Risks beginning on page 44 . We may be adversely affected by economic and political situations outside the U.S.
Risks associated with interest rates and the yield curve are discussed in this Item 1A under the caption Interest Rate and Yield Curve Risks beginning on page 46 . We may be adversely affected by economic and political situations outside the U.S.
Services We Provide At December 31, 2023, we provided the following services through our subsidiaries and divisions: • general banking services for consumers, businesses, financial institutions, and governments • fixed income sales and trading; underwriting of bank-eligible securities and other fixed-income securities eligible for underwriting by financial subsidiaries; loan sales; advisory services; and derivative sales • mortgage banking services • brokerage services • correspondent banking • transaction processing: nationwide check clearing services and remittance processing • trust, fiduciary, and agency services • credit card products • equipment finance services • investment and financial advisory services • mutual fund sales as agent • retail insurance sales as agent Information about the net interest income and noninterest income we obtained from our largest categories of products and services appears under the caption Results of Operations—2023 Compared to 2022 beginning on page 56 of our 2023 MD&A (Item 7). 9 2023 FORM 10-K ANNUAL REPORT ITEM 1.
Services We Provide At December 31, 2024, we provided the following services through our subsidiaries and divisions: • general banking services for consumers, businesses, financial institutions, and governments • fixed income sales and trading; underwriting of bank-eligible securities and other fixed-income securities eligible for underwriting by financial subsidiaries; loan sales; advisory services; and derivative sales • mortgage banking services • brokerage services • correspondent banking • transaction processing: nationwide check clearing services and remittance processing • trust, fiduciary, and agency services • credit card products • equipment finance services • investment and financial advisory services • mutual fund sales as agent • retail insurance sales as agent Information about the net interest income and noninterest income we obtained from our largest categories of products and services appears under the caption Results of Operations—2024 Compared to 2023 beginning on page 59 of our 2024 MD&A (Item 7). 11 2024 FORM 10-K ANNUAL REPORT ITEM 1.
BUSINESS Table of Contents Holding Company Structure and Support of Subsidiary Banks Because we are a holding company, our right to participate in the assets of any subsidiary upon the latter’s liquidation or reorganization will be subject to the prior claims of the subsidiary’s creditors (including depositors in the case of the Bank), except to the extent that we may be a creditor with recognized claims against the subsidiary.
Holding Company Structure and Support of Subsidiary Banks Because we are a holding company, our right to participate in the assets of any subsidiary upon the latter’s liquidation or reorganization will be subject to the prior claims of the subsidiary’s creditors (including depositors in the case of the Bank), except to the extent that we may be a creditor with recognized claims against the subsidiary.
Two large components of the C&I portfolio at year end were loans to finance and insurance companies and loans to mortgage companies. Taken together, approximately 18% of the C&I portfolio was sensitive to impacts on the financial services industry.
Two large components of the C&I portfolio at year end were loans to finance and insurance companies and loans to mortgage companies. Taken together, approximately 21% of the C&I portfolio was sensitive to impacts on the financial services industry.
BUSINESS Table of Contents Depositor Preference Federal law provides that deposits and certain claims for administrative expenses and associate compensation against an insured depository institution would be afforded a priority over other general unsecured claims against such an institution, including federal funds and letters of credit, in the “liquidation or other resolution” of such an institution by any receiver.
Depositor Preference Federal law provides that deposits and certain claims for administrative expenses and associate compensation against an insured depository institution would be afforded a priority over other general unsecured claims against such an institution, including federal funds and letters of credit, in the “liquidation or other resolution” of such an institution by any receiver.
In 2016 federal agencies proposed rules which could significantly change the regulation of incentive compensation programs at financial institutions. The proposal would create four tiers of institutions based on asset size. Institutions in the top two tiers would be subject to rules much more detailed and proscriptive than are currently in effect.
BUSINESS Table of Contents In 2016 federal agencies proposed rules which could significantly change the regulation of incentive compensation programs at financial institutions. The proposal would create four tiers of institutions based on asset size. Institutions in the top two tiers would be subject to rules much more detailed and proscriptive than are currently in effect.
The regulatory framework governing banks and the financial industry is intended primarily to protect depositors and the Federal Deposit Insurance Fund, not to protect our Bank or our security holders. Regulatory Tiers Based on Asset Size Many rules dealing with critical regulatory topics divide banks into tiers based largely or entirely on asset size.
The regulatory framework governing banks and the financial industry is intended primarily to protect depositors, the Federal Deposit Insurance Fund, and the stability of the financial system, not to protect our Bank or our security holders. Regulatory Tiers Based on Asset Size Many rules dealing with critical regulatory topics divide banks into tiers based largely or entirely on asset size.
The delivery of financial services to clients and others increasingly depends upon technologies, systems, and multi-party infrastructures which are new, creating or enhancing several risks discussed elsewhere.
The delivery of financial services to clients and others increasingly depends upon technologies, systems, and multi-party infrastructures which are new, creating or exacerbating several risks discussed elsewhere.
RISK FACTORS Table of Contents Failure to build and maintain, or outsource, the necessary operational infrastructure, failure of that infrastructure to perform its functions, or failure of our disaster preparedness plans if primary infrastructure components suffer damage, can lead to risk of loss of service to clients, legal actions, and noncompliance with applicable regulatory requirements.
Failure to build and maintain, or outsource, the necessary operational infrastructure, failure of that infrastructure to perform its functions, or failure of our disaster preparedness plans if primary infrastructure components suffer damage, can lead to risk of loss of service to clients, legal actions, and noncompliance with applicable regulatory requirements.
BUSINESS Table of Contents Client Concentration Neither we nor any of our significant subsidiaries is dependent upon a single client or very few clients. Calendar-Year Seasonality We do not experience material seasonality. We do experience seasonal variation in certain revenues, expenses, and credit trends.
Client Concentration Neither we nor any of our significant subsidiaries is dependent upon a single client or very few clients. Calendar-Year Seasonality We do not experience material seasonality. We do experience seasonal variation in certain revenues, expenses, and credit trends.
At December 31, 2023, approximately 53% of total loans and leases consisted of the commercial, financial, and industrial (C&I) portfolio, approximately 23% of total loans and leases consisted of the commercial real estate (CRE) portfolio, and approximately 23% consisted of the consumer real estate portfolio.
At December 31, 2024, approximately 53% of total loans and leases consisted of the commercial, financial, and industrial (C&I) portfolio, approximately 23% of total loans and leases consisted of the commercial real estate (CRE) portfolio, and approximately 23% consisted of the consumer real estate portfolio.
BUSINESS Table of Contents Supervision and Regulation Scope of this Section This section describes certain of the material elements of the regulatory framework applicable to bank and financial holding companies and their subsidiaries, and to companies engaged in securities and insurance activities. It also provides certain specific information about us.
Supervision and Regulation Scope of this Section This section describes certain of the material elements of the regulatory framework applicable to bank and financial holding companies and their subsidiaries, and to companies engaged in securities and insurance activities. It also provides certain specific information about us.
Additional information concerning these risks and our management of them, all of which is incorporated into this Item 1A by this reference, appears under the captions Operational Risk Management and Compliance Risk Management , beginning on page 85 of our 2023 MD&A (Item 7). Regulatory, Legislative, & Legal Risks The regulatory environment continues to be challenging.
Additional information concerning these risks and our management of them, all of which is incorporated into this Item 1A by this reference, appears under the captions Operational Risk Management and Compliance Risk Management , beginning on page 90 of our 2024 MD&A (Item 7). Regulatory, Legislative, & Legal Risks The regulatory environment continues to be challenging.
Risks Related to Businesses We May Exit We may be unable to successfully implement a disposition or wind-down of businesses or units which no longer fit our strategic plans. We consider possible closures and divestitures as we continue to adapt to a changing business and regulatory environment.
RISK FACTORS Table of Contents Risks Related to Businesses We May Exit We may be unable to successfully implement a disposition or wind-down of businesses or units which no longer fit our strategic plans. We consider possible closures and divestitures as we continue to adapt to a changing business and regulatory environment.
We expect to make significant investments over the next several years in operational systems that are unlikely to result in significant immediate returns. In 2021 we started to invest significantly in new platforms and processes to modernize operations, provide a better client experience, reduce ongoing operating costs or otherwise improve efficiencies, and support future growth.
RISK FACTORS Table of Contents We expect to make significant investments over the next several years in operational systems that are unlikely to result in significant immediate returns. In 2021 we started to invest significantly in new platforms and processes to modernize operations, provide a better client experience, reduce ongoing operating costs or otherwise improve efficiencies, and support future growth.
TABLE OF ITEM 1A TOPICS Topic Page Topic Page Traditional Competition Risks 29 Risks of Expense Control 40 Traditional Strategic Risks 30 Geographic Risks 41 Industry Disruption 31 Insurance 42 Operational Risks 32 Liquidity & Funding Risks 42 Cybersecurity Risks 33 Credit Ratings 44 Risks from Economic Downturns & Changes 34 Interest Rate & Yield Curve Risks 44 Risks Associated with Monetary Events 34 Asset Inventories & Market Risks 45 Risks Related to Businesses We May Exit 35 Mortgage Business Risks 45 Reputation Risks 36 Pre-2009 Mortgage Business Risks 46 Credit Risks 36 Accounting Risks 46 Service Risks 38 Share Owning & Governance Risks 47 Regulatory, Legislative, and Legal Risks 38 Traditional Competition Risks We are subject to intense competition for clients, and the nature of that competition is changing quickly.
TABLE OF ITEM 1A TOPICS Topic Page Topic Page Traditional Competition Risks 31 Risks of Expense Control 42 Traditional Strategic Risks 32 Geographic Risks 43 Industry Disruption 33 Insurance 44 Operational Risks 34 Liquidity & Funding Risks 44 Cybersecurity Risks 35 Credit Ratings 46 Risks from Economic Downturns & Changes 36 Interest Rate & Yield Curve Risks 46 Risks Associated with Monetary Events 37 Asset Inventories & Market Risks 47 Risks Related to Businesses We May Exit 38 Mortgage Business Risks 48 Reputation Risks 38 Pre-2009 Mortgage Business Risks 48 Credit Risks 38 Accounting Risks 49 Service Risks 40 Share Owning & Governance Risks 50 Regulatory, Legislative, and Legal Risks 40 Traditional Competition Risks We are subject to intense competition for clients, and the nature of that competition is changing quickly.
Events Impacting Year-to-Year Comparisons TD Transaction 2022-2023 In February 2022, we agreed to be acquired by TD in a merger transaction. Our shareholders approved the TD transaction in May 2022. In May 2023, after TD failed to obtain timely regulatory approval, we and TD agreed to terminate the transaction. See Toronto-Dominion Transaction below for further information.
TD Transaction 2022-2023 In February 2022, we agreed to be acquired by TD in a merger transaction. Our shareholders approved the TD Transaction in May 2022. In May 2023, after TD failed to obtain timely regulatory approval, we and TD agreed to terminate the transaction. See Toronto-Dominion Transaction below for further information.
Examples of less-regulated activities include check-cashing services, independent ATM services, and “peer-to-peer” lending, where investors provide debt financing or other capital directly to borrowers. Competitive pressures shift with the business and rate environment. Over much of 2020 and 2021, with deposits relatively abundant, the competitive focus on lending and fee-based services was relatively high.
Examples of less-regulated activities include private credit from non-bank lenders, check-cashing services, independent ATM services, and “peer-to-peer” lending, where investors provide debt financing or other capital directly to borrowers. Competitive pressures shift with the business and rate environment. Over much of 2020 and 2021, with deposits relatively abundant, the competitive focus on lending and fee-based services was relatively high.
The Federal Reserve has released a supervisory letter advising, among other things, that a bank holding company should inform the Federal Reserve and should eliminate, defer, or significantly reduce its dividends if (i) the bank holding company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) the bank holding company’s prospective rate of earnings is not consistent with the bank holding company’s capital needs and overall current and prospective financial condition; or (iii) the bank holding company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
The Federal Reserve has released a supervisory letter advising, among other things, that a bank holding company should inform the Federal Reserve and should eliminate, defer, or significantly reduce its dividends if (i) the bank holding company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) the bank holding company’s prospective rate of earnings is not consistent with the bank holding company’s capital needs and overall current and prospective financial condition; or (iii) the bank holding company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. 23 2024 FORM 10-K ANNUAL REPORT ITEM 1.
Additional information concerning operational risks and our management of them, all of which is incorporated into this Item 1A by this reference, appears under the caption Operational Risk Management beginning on page 85 of our 2023 MD&A (Item 7).
Additional information concerning operational risks and our management of them, all of which is incorporated into this Item 1A by this reference, appears under the caption Operational Risk Management beginning on page 90 of our 2024 MD&A (Item 7).
The two segments create and use financial resources differently, and the revenues they generate have a very different mix of net interest income vs. noninterest income. In addition, regional banking is larger than specialty banking by many financial measures. Table 1.7 provides high-level financial information for each of those two segments, highlighting these points.
The two segments create and use financial resources differently, and the revenues they generate have a very different mix of net interest income vs. noninterest income. In addition, commercial, consumer & wealth banking is larger than wholesale banking by many financial measures. Table 1.7 provides high-level financial information for each of those two segments, highlighting these points.
The application of those restrictions to the Bank is discussed in more detail in the following sections, all of which is incorporated into this Item 1 by reference: under the caption Liquidity Risk Management in our 2023 MD&A (Item 7) beginning on page 88 of this report; and under the caption Restrictions on dividends in Note 12—Regulatory Capital and Restrictions of our 2023 Financial Statements (Item 8), beginning on page 154 .
The application of those restrictions to the Bank is discussed in more detail in the following sections, all of which is incorporated into this Item 1 by reference: under the caption Liquidity Risk Management in our 2024 MD&A (Item 7) beginning on page 93 of this report; and under the caption Restrictions on dividends in Note 12—Regulatory Capital and Restrictions of our 2024 Financial Statements (Item 8), beginning on page 157 .
Key risks associated with exiting a business include: • our ability to price a sale transaction appropriately and otherwise negotiate acceptable terms; • our ability to identify and implement key client, personnel, technology systems, and other transition actions to avoid or minimize negative effects on retained businesses; • our ability to mitigate the loss of any pre-tax income that the exited business produced; • our ability to assess and manage any loss of synergies that the exited business had with our retained businesses; and • our ability to manage capital, liquidity, and other challenges that may arise if an exit results in significant legacy cash expenditures or financial loss. 35 2023 FORM 10-K ANNUAL REPORT ITEM 1A.
Key risks associated with exiting a business include: • our ability to price a sale transaction appropriately and otherwise negotiate acceptable terms; • our ability to identify and implement key client, personnel, technology systems, and other transition actions to avoid or minimize negative effects on retained businesses; • our ability to mitigate the loss of any pre-tax income that the exited business produced; • our ability to assess and manage any loss of synergies that the exited business had with our retained businesses; and • our ability to manage capital, liquidity, and other challenges that may arise if an exit results in significant legacy cash expenditures or financial loss.
Sources & Availability of Funds Information concerning the sources and availability of funds for our businesses can be found in our 2023 MD&A (Item 7), including the subsection entitled Liquidity Risk Management beginning on page 88 , which material is incorporated herein by reference. 28 2023 FORM 10-K ANNUAL REPORT ITEM 1A. RISK FACTORS Table of Contents Item 1A.
Sources & Availability of Funds Information concerning the sources and availability of funds for our businesses can be found in our 2024 MD&A (Item 7), including the subsection entitled Liquidity Risk Management beginning on page 93 , which material is incorporated herein by reference. 30 2024 FORM 10-K ANNUAL REPORT ITEM 1A. RISK FACTORS Table of Contents Item 1A.
Cross-institutional management features may contribute to a de-linking of consumers to physical banking center networks. Our commercial businesses, especially in our specialty banking segment, also have a geographic linkage, but it is weaker.
Cross-institutional management features may contribute to a de-linking of consumers to physical banking center networks. Our commercial businesses, especially our specialty lines of business, also have a geographic linkage, but it is weaker.
Affiliate and non-affiliate sharing initiated by the Bank generally is permitted with client consent. Increasingly, banks are being required to permit, enable, and support client control of client data, including the sharing of client data with Bank affiliates and with outside organizations.
Affiliate and non-affiliate sharing initiated by the Bank generally is permitted unless the client elects not to permit sharing. Increasingly, banks are being required to permit, enable, and support client control of client data, including the sharing of client data with Bank affiliates and with outside organizations.
The concern is driven by major technological and societal shifts in the past 20 years, led by relatively unregulated firms such as Amazon.com, Alibaba, Facebook, and Google and their many clients worldwide.
The concern is driven by major technological and societal shifts in the past 20 years, led by relatively unregulated firms such as Alphabet (Google), Amazon.com, and Meta Platforms (Facebook) and their many clients worldwide.
Table 1.5a C&I Loans 1 by Industry/Line of Business Finance and insurance 12 % Real estate and rental and leasing (a) 12 Health care and social assistance 8 Accommodation and food service 7 Manufacturing 7 Wholesale trade 7 Loans to mortgage companies 6 Retail trade 6 Transportation and warehousing 5 Energy 4 Other C&I 26 1 Percentages of C&I portfolio at December 31, 2023.
Table 1.5a C&I Loans 1 by Industry/Line of Business Real estate and rental and leasing (a) 12 % Finance and insurance 11 Loans to mortgage companies 10 Health care and social assistance 8 Wholesale trade 7 Manufacturing 7 Accommodation and food service 7 Retail trade 5 Transportation and warehousing 5 Energy 4 Other C&I 24 1 Percentages of C&I portfolio at December 31, 2024.
Both client groups are widely dispersed geographically, predominantly within the U.S. We have many competitors within both groups, including major U.S. and international securities firms as well as numerous regional and local firms. Additional Information About Competition For additional information on the competitive position of FHN and the Bank, refer to the General subsection above within this Item 1.
We have many competitors within both groups, including major U.S. and international securities firms as well as numerous regional and local firms. Additional Information About Competition For additional information on the competitive position of FHN and the Bank, refer to the General subsection above within this Item 1.
The FHN Financial Municipal Advisors division of the Bank is registered with the SEC as a municipal adviser. • Martin & Company, Inc. and First Horizon Advisors, Inc. are registered with the SEC as investment advisers. • First Horizon Advisors, Inc. and FHN Financial Securities Corp. are registered as broker-dealers with the SEC and all states where they conduct business for which registration is required. • First Horizon Insurance Services, Inc. and FHIS, Inc. are licensed as insurance agencies in all states where they do business for which licensing is required. • First Horizon Advisors, Inc. is licensed as an insurance agency in the states where it does business for which licensing is required for the sale of annuity products. • Our financial subsidiaries under the Gramm-Leach-Bliley Act are: FHIS, Inc.; FHN Financial Securities Corp.; First Horizon Advisors, Inc.; First Horizon Insurance Agency, Inc.; and First Horizon Insurance Services, Inc. 16 2023 FORM 10-K ANNUAL REPORT ITEM 1.
The FHN Financial Municipal Advisors division of the Bank is registered with the SEC as a municipal adviser. • Martin & Company, Inc. and First Horizon Advisors, Inc. are registered with the SEC as investment advisers. • First Horizon Advisors, Inc. and FHN Financial Securities Corp. are registered as broker-dealers with the SEC and all states where they conduct business for which registration is required. • First Horizon Insurance Services, Inc. and FHIS, Inc. are licensed as insurance agencies in all states where they do business for which licensing is required. • First Horizon Advisors, Inc. is licensed as an insurance agency in the states where it does business for which licensing is required for the sale of annuity products. • Our financial subsidiaries under the Gramm-Leach-Bliley Act are: FHIS, Inc.; FHN Financial Securities Corp.; First Horizon Advisors, Inc.; First Horizon Insurance Agency, Inc.; and First Horizon Insurance Services, Inc.
BUSINESS Table of Contents Truist Bank). Those branches are in markets which we did not serve previously, or in which we did not have a leading market position. Along with the branch facilities, we acquired $0.4 billion of related loans and assumed $2.2 billion of deposits.
Those branches are in markets which we did not serve previously, or in which we did not have a leading market position. Along with the branch facilities, we acquired $0.4 billion of related loans and assumed $2.2 billion of deposits.
Common Equity Tier 1 Capital consists of core components of Tier 1 Capital. The core components consist of common stock plus retained earnings net of goodwill, other intangible assets, and certain other required deduction items. At December 31, 2023, our Common Equity Tier 1 Capital Ratio was 11.40% and the Bank’s was 11.40%. • Tier 1 Capital Ratio.
Common Equity Tier 1 Capital consists of core components of Tier 1 Capital. The core components consist of common stock plus retained earnings net of goodwill, other intangible assets, and certain other required deduction items. At December 31, 2024, our Common Equity Tier 1 Capital Ratio was 11.20% and the Bank’s was 11.12%. • Tier 1 Capital Ratio.
At December 31, 2023, our Leverage ratio was 10.69% and the Bank’s was 10.20%. • Leverage Ratio—Supplemental. For the largest internationally active supervised financial institutions, not including us or the Bank, a minimum supplementary Leverage ratio must be maintained that takes into account certain off-balance sheet exposures.
At December 31, 2024, our Leverage ratio was 10.64% and the Bank’s was 10.06%. • Leverage Ratio—Supplemental. For the largest internationally active supervised financial institutions, not including us or the Bank, a minimum supplementary Leverage ratio must be maintained that takes into account certain off-balance sheet exposures.
Additional information concerning credit risks and our management of them is set forth under the caption Asset Quality beginning on page 65 of our 2023 MD&A (Item 7).
Additional information concerning credit risks and our management of them is set forth under the caption Asset Quality beginning on page 70 of our 2024 MD&A (Item 7).
Additional information concerning market uncertainties and trends appears in Market Uncertainties and Prospective Trends within 2023 MD&A (Item 7) beginning on page 92 , especially under the caption Inflation, Recession, and Federal Reserve Policy. Other Business Information Associated with this Report For additional information concerning our business, refer to 2023 MD&A (Item 7) beginning on page 54 .
Additional information concerning market uncertainties and trends appears in Market Uncertainties and Prospective Trends within 2024 MD&A (Item 7) beginning on page 97 , especially under the caption Inflation, Recession, and Federal Reserve Policy. Other Business Information Associated with this Report For additional information concerning our business, refer to 2024 MD&A (Item 7) beginning on page 57 .
At December 31, 2023, our Tier 1 Capital Ratio was 12.42% and the Bank’s was 11.82%. • Total Capital Ratio. For all supervised financial institutions, including us and the Bank, the ratio of Total Capital to risk-weighted assets must be at least 8%. To be “well capitalized” the Total Capital ratios must be at least 10%.
At December 31, 2024, our Tier 1 Capital Ratio was 12.22% and the Bank’s was 11.54%. • Total Capital Ratio. For all supervised financial institutions, including us and the Bank, the ratio of Total Capital to risk-weighted assets must be at least 8%. To be “well capitalized” the Total Capital ratios must be at least 10%.
FDIC Insurance Assessments; DIFA U.S. bank deposits generally are insured by the Deposit Insurance Fund (“DIF”), administered by the FDIC. The system of FDIC insurance premium rates charged consists of a rate grid structure in which base rates range from 5 to 35 basis points annually, and in 2023 fully adjusted rates ranged from 2.5 to 42 basis points annually.
FDIC Insurance Assessments; DIFA U.S. bank deposits generally are insured by the Deposit Insurance Fund (“DIF”), administered by the FDIC. The system of FDIC insurance premium rates charged consists of a rate grid structure in which base rates range from 5 to 32 basis points annually, with fully adjusted rates ranging from 2.5 to 42 basis points annually.
Although most of such regulation focuses on insurance companies and their insurance products, insurance agents and their activities are also subject to regulation by the states, including, among other things, licensing and marketing and sales practices.
Insurance activities are subject to regulation by the states in which such business is transacted. Although most of such regulation focuses on insurance companies and their insurance products, insurance agents and their activities are also subject to regulation by the states, including, among other things, licensing and marketing and sales practices.
BUSINESS Table of Contents Financial Activities other than Banking Federal Law Federal law generally allows financial holding companies broad authority to engage in activities that are financial in nature or incidental to a financial activity.
Financial Activities other than Banking Federal Law Federal law generally allows financial holding companies broad authority to engage in activities that are financial in nature or incidental to a financial activity.
Although several factors likely contributed to the current inversion, we believe a key factor in this instance, especially in 2023, was that markets tried to anticipate when, and how aggressively, the Federal Reserve would start cutting short-term rates in order to avoid or mitigate a recession.
Although several factors likely contributed to the inversion during this period, we believe a key factor in this instance, especially in 2023 and the first half of 2024, was that markets tried to anticipate when, and how aggressively, the Federal Reserve would start cutting short-term rates in order to avoid or mitigate a recession.
Table 1.8 SELECTED CONSOLIDATED FINANCIAL DATA (Dollars in millions; financial condition data shown period-end, as of December 31) 2023 2022 2021 2020 2019 Net interest income $ 2,540 $ 2,392 $ 1,994 $ 1,662 $ 1,210 Noninterest income 927 815 1,076 1,492 654 Net income available to common shareholders 865 868 962 822 435 Total loans and leases 61,292 58,102 54,859 58,232 31,061 Provision (benefit) for credit losses 260 95 (310) 503 45 Net Charge-offs 170 59 2 120 27 Net interest margin 3.42 % 3.10 % 2.48 % 2.86 % 3.28 % Total assets 81,661 78,953 89,092 84,209 43,311 Total deposits 65,780 63,489 74,895 69,982 32,430 Total term borrowings 1,150 1,597 1,590 1,670 791 Total liabilities 72,370 70,406 80,598 75,902 38,235 Preferred stock 520 1,014 520 470 96 Total shareholders’ equity (financial statement) 9,291 8,547 8,494 8,307 5,076 Common Equity Tier 1 Capital (regulatory) 8,104 7,032 6,367 6,110 3,409 Priorities & Developments Over the past five years, our strategic priorities have focused on: • targeted and opportunistic expansion of consumer and commercial banking products and markets; • targeted and opportunistic expansion of commercial lending, mainly through strategic and tactical transactions, talent development, and talent acquisitions; • rigorous expense management with continued investment in revenue generating initiatives; • managing business units and products with a strong emphasis on risk-adjusted returns on invested capital; • providing exceptional client service and experience as a primary means to differentiate us from competitors; and • investment in scalable technology and other infrastructure to attract and retain clients and to support expansion.
Table 1.8 SELECTED CONSOLIDATED FINANCIAL DATA (Dollars in millions; financial condition data shown period-end, as of December 31) 2024 2023 2022 2021 2020 Net interest income $ 2,511 $ 2,540 $ 2,392 $ 1,994 $ 1,662 Noninterest income 679 927 815 1,076 1,492 Net income available to common shareholders 738 865 868 962 822 Total loans and leases 62,565 61,292 58,102 54,859 58,232 Provision (benefit) for credit losses 150 260 95 (310) 503 Net Charge-offs 112 170 59 2 120 Net interest margin 3.35 % 3.42 % 3.10 % 2.48 % 2.86 % Total assets 82,152 81,661 78,953 89,092 84,209 Total deposits 65,581 65,780 63,489 74,895 69,982 Total term borrowings 1,195 1,150 1,597 1,590 1,670 Total liabilities 73,041 72,370 70,406 80,598 75,902 Preferred stock 426 520 1,014 520 470 Total shareholders’ equity (financial statement) 9,111 9,291 8,547 8,494 8,307 Common Equity Tier 1 Capital (regulatory) 7,967 8,104 7,032 6,367 6,110 Priorities & Developments Over the past five years, our strategic priorities have focused on: • targeted and opportunistic expansion of consumer and commercial banking products and markets; • targeted and opportunistic expansion of commercial lending, mainly through strategic and tactical transactions, talent development, and talent acquisitions; • rigorous expense management with continued investment in revenue generating initiatives; • managing business units and products with a strong emphasis on risk-adjusted returns on invested capital; • providing exceptional client service and experience as a primary means to differentiate us from competitors; and • investment in scalable technology and other infrastructure to attract and retain clients and to support expansion.
Prompt Corrective Action (PCA) Federal banking regulators must take “prompt corrective action” regarding FDIC-insured depository institutions (such as the Bank) that do not meet minimum capital requirements. For this purpose, insured depository institutions are divided into five capital categories. The specific requirements applicable to our Bank are summarized in Table 1.11. 22 2023 FORM 10-K ANNUAL REPORT ITEM 1.
Prompt Corrective Action (PCA) Federal banking regulators must take “prompt corrective action” regarding FDIC-insured depository institutions (such as the Bank) that do not meet minimum capital requirements. For this purpose, insured depository institutions are divided into five capital categories. The specific requirements applicable to our Bank are summarized in Table 1.11.
Such actions could further limit the amount of interest or fees we can charge, could further restrict our ability to collect loans or realize on collateral, could affect the terms or profitability of the products and services we offer, or could materially affect us in other ways.
New laws and regulati ons could further limit the amount of interest or fees we can charge, could further restrict our ability to collect loans or realize on collateral, could affect the terms or profitability of the products and services we offer, and could materially affect us in other ways.
We and IBKC offered many of the same financial services before the merger, but IBKC exceeded us in several areas, most notably in equipment financing, mortgage, and title services. IBKC shareholders collectively were issued 243 million First Horizon common shares (on a net basis).
IBKC’s largest concentrations of banking centers were in Louisiana and Florida. We and IBKC offered many of the same financial services before the merger, but IBKC exceeded us in several areas, most notably in equipment financing, mortgage, and title services. IBKC shareholders collectively were issued 243 million First Horizon common shares (on a net basis).
Interchange Fee Restrictions Regulations severely cap interchange fees which the Bank may charge merchants for debit card transactions. Regulatory changes proposed in 2023, if adopted, would lower that cap.
Interchange Fee Restrictions Regulations severely cap interchange fees which the Bank may charge merchants for debit card transactions. Regulatory changes proposed in 2023, if adopted, would lower that cap. In early 2025, these proposed changes remained pending.
Additional information concerning monetary policy changes appears: under the caption Monetary Policy Shifts within the Significant Business Developments section of Item 1, which begins on page 10 ; under the caption Risks Associated with Monetary Events beginning on page 34 within Item 1A; and under the caption Inflation, Recession, and the Federal Reserve within the Market Uncertainties and Prospective Trends section of our 2023 MD&A (Item 7), which begins on page 92 .
Additional information concerning monetary policy changes appears: under the caption Monetary Policy Shifts within the Significant Business Developments section of Item 1, which begins on page 12 ; under the caption Risks Associated with Monetary Events beginning on page 37 within Item 1A; and under the caption Inflation, Recession, and Federal Reserve Policy within the Market Uncertainties and Prospective Trends section of our 2024 MD&A (Item 7), which begins on page 97 .
Further information regarding deposits is provided: in Note 8 beginning on page 148 appearing in our 2023 Financial Statements (Item 8); under the caption Deposits beginning on page 75 appearing in our 2023 MD&A (Item 7); and in other parts of this report referenced under Deposits .
Further information regarding deposits is provided: in Note 8 beginning on page 152 appearing in our 2024 Financial Statements (Item 8); under the caption Deposits beginning on page 81 appearing in our 2024 MD&A (Item 7); and in other parts of this report referenced under Deposits .
Monetary Policy Shifts Interest rates were low by historical standards in the first three of this five-year period, and generally fell during those years. This environment lowered our net interest margin from 2019 to 2021.
Monetary Policy Shifts Interest rates were low by historical standards in the first two years of this five-year period and generally fell during those years. This environment lowered our net interest margin in 2020 and 2021.
Additional information concerning monetary policy risks is presented: under the caption Cyclicality within the Other Business Information section of Item 1, which starts on page 16 ; within the Effect of Governmental Policies and Proposals section of Item 1 beginning on page 27 ; in Interest Rate and Yield Curve Risks beginning on page 44 ; and under the caption Inflation, Recession, and Federal Reserve Policy within the Market Uncertainties and Prospective Trends section of our 2023 MD&A (Item 7), beginning on page 92 .
Additional information concerning monetary policy risks is presented: under the caption Cyclicality within the Other Business Information section of Item 1, which starts on page 19 ; within the Effect of Governmental Policies and Proposals section of Item 1 beginning on page 30 ; in Interest Rate and Yield Curve Risks beginning on page 46 ; and under the caption Inflation, Recession, and Federal Reserve Policy within the Market Uncertainties and Prospective Trends section of our 2024 MD&A (Item 7), beginning on page 97 .
Table 1.3 Loan Types & Portfolios 1 Commercial $47 B 76 % Consumer $14 B 24 % Total Loans $61 B 100 % Commercial Portfolios % of Type % of Total C&I 70 % 53 % CRE 30 23 Consumer Portfolios % of Type % of Total Consumer real estate 95 % 23 % Credit card/other 5 1 1 Dollars and percentages at December 31, 2023.
Table 1.3 Loan Types & Portfolios 1 Commercial $48 B 76 % Consumer 15 B 24 Total Loans $63 B 100 % Commercial Portfolios % of Type % of Total C&I 70 % 53 % CRE 30 23 Consumer Portfolios % of Type % of Total Consumer real estate 95 % 23 % Credit card/other 5 1 1 Dollars and percentages at December 31, 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeActivities with higher capital usage bear a greater burden in economic profit analysis. The process is intended to allow us to more efficiently manage investment and utilization of resources. Economic profit analysis involves judgment regarding capital allocation and risk. Mistakes in those judgments could result in a mis-allocation of resources and diminished profitability over the long run.
Biggest changeEconomic profit analysis attempts to relate ordinary profit to the capital employed to create that profit with the goal of achieving higher risk-adjusted (more efficient) returns on capital employed overall. Activities with higher capital usage bear a greater burden in economic profit analysis. The process is intended to allow us to more efficiently manage investment and utilization of resources.
Our bylaws provide that, unless we consent in writing to an alternative forum, a state or federal court located within Shelby County in the State of Tennessee will be the sole and exclusive forum for (i) any derivative action or proceeding brought in our right or name, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other associate of ours to us or our shareholders, (iii) any action asserting a claim against us or any director, officer or other associate of ours arising pursuant to any provision of the Tennessee Business Corporation Act, of our charter or bylaws or (iv) any action asserting a claim against us or any director, officer or other associate of ours that is governed by the internal affairs doctrine.
Our bylaws provide that, unless we consent in writing to an alternative forum, a state or federal court located within Shelby County in the State of Tennessee will be the sole and exclusive forum for (i) any derivative action or proceeding brought in our right or name, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other associate of ours to us or our shareholders, (iii) any action asserting a claim against us or any director, officer or other associate of ours arising pursuant to any provision of the Tennessee Business Corporation Act or our charter or bylaws or (iv) any action asserting a claim against us or any director, officer or other associate of ours that is governed by the internal affairs doctrine.
In addition, each deposit agreement between us and the depositary, which governs the rights of the depositary shares related to our Series B, C, and D preferred stock (respectively), provides that any action or proceeding arising out of or relating in any way to the deposit agreement may only be brought in a state court located in the State of New York or in the United States District Court for the Southern District of New York.
In addition, each deposit agreement between us and the depositary, which governs the rights of the depositary shares related to our Series B and C preferred stock (respectively), provides that any action or proceeding arising out of or relating in any way to the deposit agreement may only be brought in a state court located in the State of New York or in the United States District Court for the Southern District of New York.
If we raise funds by issuing equity securities or instruments that are convertible into equity securities, the percentage ownership of our current common shareholders will be reduced, the new equity securities may have rights and preferences superior to those of our common or outstanding preferred stock, and additional issuances could be at a sales price which is dilutive to current shareholders.
If we raise funds by issuing equity securities or instruments that are convertible into equity securities, the percentage ownership of our current common shareholders will be reduced, the new equity securities may have rights and preferences superior to those of our common or outstanding preferred stock, and any additional issuances could be at a sales price which is dilutive to current shareholders.
Political dysfunction and volatility within the federal government, both at the regulatory and Congressional levels, creates significant potential for major and abrupt shifts in federal policy regarding bank regulation, taxes, and the economy, any of which could have significant impacts on our business and financial performance, as well as that of our commercial clients.
Political volatility within the federal government, both at the regulatory and Congressional levels, creates significant potential for major and abrupt shifts in federal policy regarding bank regulation, taxes, and the economy, any of which could have significant impacts on our business and financial performance, as well as that of our commercial clients.
We actively manage our balance sheet to control the risks of a reduction in net interest margin brought about by ordinary fluctuations in rates. In addition, our fixed income business tends to perform better when rates decline or markets are volatile, which tends to partially offset net interest margin compression.
We actively manage our balance sheet to control the risks of a reduction in net interest margin brought about by ordinary fluctuations in rates. In addition, our fixed income business tends to perform better when rates decline or markets are moderately volatile, which tends to partially offset net interest margin compression.
Whether or not legally required, any such actions that we take increase our operating costs. In addition, such expectations could pressure us to re-evaluate business relationships with certain clients, or groups of clients, that have suboptimal reputations for emissions. Recent state laws and federal disclosure proposals concerning greenhouse gas (GHG) emissions could impose significant additional costs upon us.
Whether or not legally required, any such actions that we take increase our operating costs. In addition, such expectations could pressure us to re-evaluate business relationships with certain clients, or groups of clients, that have suboptimal reputations for emissions. Recent state laws and federal disclosure rules concerning greenhouse gas (GHG) emissions could impose significant additional costs upon us.
In 2023 the state of California enacted two laws which, taken together, will require most larger companies doing business in California to report annually their greenhouse gas ("GHG") emissions, with an external assurance requirement, and to report biennially their climate-related financial risks and risk-mitigation measures. The U.S.
In 2023 the state of California enacted two laws which, taken together, will require most larger companies doing business in California to report annually their greenhouse gas ("GHG") emissions, with an external assurance requirement, and to report biennially their climate-related financial risks and risk-mitigation measures.
We manage the risks of holding inventories of securities and loans through certain market risk management policies and procedures, including, for example, hedging activities and Value-at-Risk (“VaR”) limits, trading policies, modeling, and stress analyses. Average fixed income trading securities (long positions) were $1.2 billion for 2023 and $1.4 billion for 2022.
We manage the risks of holding inventories of securities and loans through certain market risk management policies and procedures, including, for example, hedging activities and Value-at-Risk (“VaR”) limits, trading policies, modeling, and stress analyses. Average fixed income trading securities (long positions) were $1.4 billion for 2024 and $1.2 billion for 2023.
In general, the costs of our funding directly impact our costs of doing business and, therefore, can positively or negatively affect our financial results. Our funding requirements in 2023 were met principally by deposits, by financing from other financial institutions, and by funds obtained from the capital markets.
In general, the costs of our funding directly impact our costs of doing business and, therefore, can positively or negatively affect our financial results. Our funding requirements in 2024 were met principally by deposits, by financing from other financial institutions, and by funds obtained from the capital markets.
Currently we have six series of preferred stock outstanding, one issued by the Bank and five by First Horizon Corporation. Subject to capital needs and market conditions, additional series may be issued in the future.
Currently we have five series of preferred stock outstanding, one issued by the Bank and four by First Horizon Corporation. Subject to capital needs and market conditions, additional series may be issued in the future.
All banks, including our Bank, faced all three of these factors to an extent. Banks with higher-than-usual levels of one or more of these factors tended to be more strongly impacted by the banking crisis events in the first half of 2023. Deposit levels may be affected, fairly quickly, by changes in monetary policy.
All but the very largest banks, including our Bank, faced all three of these factors to an extent. Banks with higher-than-usual levels of one or more of these factors tended to be more strongly impacted by the banking crisis events in the first half of 2023. Deposit levels may be affected, fairly quickly, by changes in monetary policy.
Additional information concerning these risks and our management of them, all of which is incorporated into this Item 1A by this reference, appears under the caption Market Risk Management beginning on page 82 of our 2023 MD&A (Item 7). Declines, disruptions, or precipitous changes in markets or market prices can adversely affect our fees and other income sources.
Additional information concerning these risks and our management of them, all of which is incorporated into this Item 1A by this reference, appears under the caption Market Risk Management beginning on page 87 of our 2024 MD&A (Item 7). Declines, disruptions, or precipitous changes in markets or market prices can adversely affect our fees and other income sources.
Additional information concerning these risks, which is incorporated into this Item 1A by this reference, appears under the caption Greenhouse Gas (GHG) Reporting Regimes within the section captioned Market Uncertainties and Prospective Trends beginning on page 92 of our 2023 MD&A (Item 7).
Additional information concerning these risks, which is incorporated into this Item 1A by this reference, appears under the caption Greenhouse Gas (GHG) Reporting Regimes within the section captioned Market Uncertainties and Prospective Trends beginning on page 97 of our 2024 MD&A (Item 7).
If those regions of the U.S. were to experience adversity not shared by other parts of the country, we are likely to experience adversity to a degree not shared by those competitors which have a broader or different regional footprint.
If those regions of the U.S. were to experience adversity not shared by other parts of the country, we would be likely to experience adversity to a degree not shared by those competitors which have a broader or different regional footprint.
The two most significant impacts on us of crossing the $100 billion threshold are: becoming subject to Category IV enhanced prudential standards; and becoming at-risk for being subject to a liquidity coverage ratio requirement. Compliance costs associated with those and other over-$100-billion regulations are expected to be significant.
For us, significant impacts of crossing the $100 billion threshold include becoming subject to Category IV enhanced prudential standards and becoming at-risk for being subject to a liquidity coverage ratio requirement. Compliance costs associated with those and other over-$100-billion regulations are expected to be significant.
Moreover, political conflict within and among branches of government, and within and among government agencies, can rise to a level where day-to-day functions could be interrupted or impaired. Data privacy is becoming a major political concern. The laws governing it are new, and are likely to evolve and expand.
Moreover, political conflict within and among branches of government, and within and among government agencies, can rise to a level where day-to-day functions could be interrupted or impaired, including as a result of government shutdowns. Data privacy is becoming a major political concern. The laws governing it are new and are likely to evolve and expand.
At December 31, 2023, both rating agencies rated the unsecured senior debt of the Corporation and of the Bank as investment grade.
At December 31, 2024, both rating agencies rated the unsecured senior debt of the Corporation and of the Bank as investment grade.
Accounting Risks The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make significant estimates that affect the financial statements. The estimate that is consistently one of our most critical is the level of the allowance for credit losses.
RISK FACTORS Table of Contents Accounting Risks The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make significant estimates that affect the financial statements. The estimate that is consistently one of our most critical is the level of the allowance for credit losses.
Share Owning & Governance Risks The principal source of cash flow to pay dividends on our stock, as well as service our debt, is dividends and distributions from the Bank, and the Bank may become unable to pay dividends to us without regulatory approval.
RISK FACTORS Table of Contents Share Owning & Governance Risks The principal source of cash flow to pay dividends on our stock, as well as service our debt, is dividends and distributions from the Bank, and the Bank may become unable to pay dividends to us without regulatory approval.
These exclusive forum provisions do not mean that holders of our common stock or depositary shares have waived our obligations to comply with the federal securities laws and the rules and regulations thereunder. 48 2023 FORM 10-K ANNUAL REPORT ITEM 1B. UNRESOLVED STAFF COMMENTS THRU ITEM 4. MINE SAFETY DISCLOSURES Table of Contents Item 1B. Unresolved Staff Comments Not applicable.
These exclusive forum provisions do not mean that holders of our common stock or depositary shares have waived our obligations to comply with the federal securities laws and the rules and regulations thereunder. 51 2024 FORM 10-K ANNUAL REPORT ITEM 1B. UNRESOLVED STAFF COMMENTS THROUGH ITEM 4. MINE SAFETY DISCLOSURES Table of Contents Item 1B. Unresolved Staff Comments Not applicable.
In addition, the exclusive forum clauses in our bylaws and deposit agreements could apply to actions or proceedings that may arise under the federal securities laws, depending on the nature of the claim alleged.
RISK FACTORS Table of Contents In addition, the exclusive forum clauses in our bylaws and deposit agreements could apply to actions or proceedings that may arise under the federal securities laws, depending on the nature of the claim alleged.
Additional information concerning these risks, which is incorporated into this Item 1A by this reference, appears in: the Supervision & Regulation section of Item 1 which starts on page 19 ; and under the caption Other Regulatory Proposals within the section captioned Market Uncertainties and Prospective Trends beginning on page 92 of our 2023 MD&A (Item 7).
Additional information concerning these risks, which is incorporated into this Item 1A by this reference, appears in: the Supervision & Regulation section of Item 1 which starts on page 21 ; and under the caption Other Regulatory Proposals within the section captioned Market Uncertainties and Prospective Trends beginning on page 97 of our 2024 MD&A (Item 7).
Continued availability of Federal Home Loan Bank funding depends on policies set by the federal government and, ultimately, by the U.S. Congress; for that reason, long-term continuation of current programs is beyond our control. We have and use credit facilities with one of the Federal Home Loan Banks.
Continued availability of funding from the Federal Home Loan Bank and discount window at the Federal Reserve depends on policies set by federal agencies, the federal government and, ultimately, by the U.S. Congress; for that reason, long-term continuation of current programs is beyond our control. We have and use credit facilities with one of the Federal Home Loan Banks.
For example: our fixed income unit manages interest rate risk on a portion of its trading portfolio with short positions, futures, and options contracts; we hedge the risk of interest rate movements related to the gap between the time we originate mortgage loans and the time we sell them; and we use derivatives, including swaps, swaptions, caps, forward contracts, options, and collars, that are designed to moderate the impact on earnings as interest rates change.
For example: our fixed income unit manages interest rate risk on a portion of its trading portfolio with short positions, futures, and options contracts; we hedge the risk of interest rate movements related to the gap between the time we originate mortgage loans and the time we sell them; and we use derivatives, including swaps, swaptions, caps, forward contracts, options, and collars, that are designed to moderate the impact on earnings as interest rates change. 47 2024 FORM 10-K ANNUAL REPORT ITEM 1A.
Applying the dividend restrictions imposed under applicable federal and state rules, the Bank’s total amount available for dividends, without obtaining regulatory approval, was $1.2 billion at January 1, 2024. Also, we are required to provide financial support to the Bank.
Applying the dividend restrictions imposed under applicable federal and state rules, the Bank’s total amount available for dividends, without obtaining regulatory approval, was $374 million at January 1, 2025. Also, we are required to provide financial support to the Bank.
Banks in the U.S. already operate under privacy-protection laws and rules, but banking industry regulations in this area might be enlarged in response to this concern.
RISK FACTORS Table of Contents Banks in the U.S. already operate under privacy-protection laws and rules, but banking industry regulations in this area might be enlarged in response to this concern.
Additional information concerning rates and their impacts upon us is presented: under the caption Cyclicality within the Other Business Information section of Item 1, which starts on page 16 ; in Risks Associated with Monetary Events beginning on page 34 ; in Interest Rate and Yield Curve Risks beginning on page 44 ; and under the caption Inflation, Recession, and Federal Reserve Policy within the Market Uncertainties and Prospective Trends section of our 2023 MD&A (Item 7), beginning on page 92 .
Additional information concerning rates and their impacts upon us is presented: under the caption Cyclicality within the Other Business Information section of Item 1, which starts on page 19 ; in Risks Associated with Monetary Events beginning on page 37 ; in Interest Rate and Yield Curve Risks beginning on page 46 ; and under the caption Inflation, Recession, and Federal Reserve Policy within the Market Uncertainties and Prospective Trends section of our 2024 MD&A (Item 7), beginning on page 97 .
Additional information concerning these risks and our management of them, all of which is incorporated into this Item 1A by this reference, appears: under the captions Capital Adequacy and Prompt Corrective Action (PCA) within the Supervision & Regulation section of Item 1 which starts on page 19 ; under the captions Capital , Capital Risk Management and Adequacy , and Market Uncertainties and Prospective Trends beginning on pages 77 , 85 , and 92 , respectively, of our 2023 MD&A (Item); and under the caption Regulatory Capital in Note 12—Regulatory Capital and Restrictions, beginning on page 154 of our 2023 Financial Statements (Item 8).
Additional information concerning these risks and our management of them, all of which is incorporated into this Item 1A by this reference, appears: under the captions Capital Adequacy and Prompt Corrective Action (PCA) within the Supervision & Regulation section of Item 1 which starts on page 21 ; under the captions Capital , Capital Risk Management and Adequacy , and Market Uncertainties and Prospective Trends beginning on pages 82 , 90 , and 97 , respectively, of our 2024 MD&A (Item); and under the caption Regulatory Capital in Note 12—Regulatory Capital and Restrictions, beginning on page 157 of our 2024 Financial Statements (Item 8).
Additional information concerning litigation risks and our management of them, all of which is incorporated into this Item 1A by this reference, appears: under the caption Pre-2009 Mortgage Business Risks beginning on page 46 ; under the captions Repurchase Obligations , Market Uncertainties and Prospective Trends , and Contingent Liabilities beginning on pages 91 , 92 , and 98 , respectively, of our 2023 MD&A (Item 7); and under the caption Contingencies in Note 16—Contingencies and Other Disclosures, beginning on page 162 of our 2023 Financial Statements (Item 8).
Additional information concerning litigation risks and our management of them, all of which is incorporated into this Item 1A by this reference, appears: under the caption Pre-2009 Mortgage Business Risks beginning on page 48 ; under the captions Repurchase Obligations , Market Uncertainties and Prospective Trends , and Contingent Liabilities beginning on pages 96 , 97 , and 102 , respectively, of our 2024 MD&A (Item 7); and under the caption Contingencies in Note 16—Contingencies and Other Disclosures, beginning on page 165 of our 2024 Financial Statements (Item 8).
RISK FACTORS Table of Contents most other regional banks, we experienced significant but much more modest levels of run-off. We believe significant portions of the outgoing deposits transferred either to a few of the very largest U.S. banks or to money market funds which, though not FDIC insured, are supported by U.S. Treasury debt.
Along with most other regional banks, we experienced significant but much more modest levels of run-off, which we successfully countered with a significant deposit campaign. We believe significant portions of the outgoing deposits transferred either to a few of the very largest U.S. banks or to money market funds which, though not FDIC insured, are supported by U.S. Treasury debt.
To a significant degree our banking business is exposed to economic, regulatory, natural disaster, and other risks that primarily impact the south-eastern and south-central U.S. states where we do most of our regional banking business.
To a significant degree our banking business is exposed to economic, regulatory, natural disaster, and other risks that primarily impact the southeastern and south-central U.S. states where we do most of our traditional lending and deposit taking business.
RISK FACTORS Table of Contents Asset Inventories & Market Risks The trading securities inventories and loans held for sale in our fixed income business are subject to market and credit risks.
Asset Inventories & Market Risks The trading securities inventories and loans held for sale in our fixed income business are subject to market and credit risks.
RISK FACTORS Table of Contents the merger or acquisition over the fair value of the assets acquired, net of liabilities assumed, is recorded as goodwill. Goodwill is subject to periodic impairment assessment, a process that can result in impairment expense which may be significant and sudden.
In addition, the excess of the value “paid” by us in the merger or acquisition over the fair value of the assets acquired, net of liabilities assumed, is recorded as goodwill. Goodwill is subject to periodic impairment assessment, a process that can result in impairment expense which may be significant and sudden.
Additional information concerning ASU 2016-13 appears in Note 1—Significant Accounting Policies within our 2023 Financial Statements (Item 8) beginning on page 115 , and in Item 1 under the caption CECL Accounting and COVID-19 within the section entitled Significant Business Developments Over Past Five Years , which begins on page 10 , all of which information is incorporated into this Item 1A by reference.
Additional information concerning ASU 2016-13 appears in Item 1 under the caption CECL Accounting and COVID-19 within the section entitled Significant Business Developments Over Past Five Years , which begins on page 12 , all of which information is incorporated into this Item 1A by reference.
Additional information concerning monetary policy changes appears under the caption Risks Associated with Monetary Events beginning on page 34 within this Item 1A, and under the caption Federal Reserve Policy in Transition within the Market Uncertainties and Prospective Trends section of 2023 MD&A (Item 7), which begins on page 92 .
Additional information concerning monetary policy changes appears under the caption Risks Associated with Monetary Events beginning on page 37 within this Item 1A, and under the caption Inflation, Recession, and Federal Reserve Policy within the Market Uncertainties and Prospective Trends section of 2024 MD&A (Item 7), which begins on page 97 .
Average fixed income trading liabilities (short positions) were $301 million and $480 million for 2023 and 2022, respectively. Average loans held for sale in our fixed income business were $552 million and $693 million for 2023 and 2022, respectively.
Average fixed income trading liabilities (short positions) were $555 million and $301 million for 2024 and 2023, respectively. Average loans held for sale in our fixed income business were $347 million and $552 million for 2024 and 2023, respectively.
Risk remains, however, that capital markets may become unavailable to us for reasons beyond our control. A number of more general factors could make funding more difficult, more expensive, or unavailable on affordable terms.
We believe we could access the capital markets again if we desired to do so. Risk remains, however, that capital markets may become unavailable to us for reasons beyond our control. A number of more general factors could make funding more difficult, more expensive, or unavailable on affordable terms.
Generally, in the last example these hedged items include certain term borrowings and certain held-to-maturity loans.
RISK FACTORS Table of Contents Generally, in the last example these hedged items include certain term borrowings and certain held-to-maturity loans.
RISK FACTORS Table of Contents We have international assets, mainly in the form of loans and letters of credit.
We have international assets, mainly in the form of loans and letters of credit.
Exclusive forum clauses may also lead to increased costs to bring a claim, or may limit the ability of holders of our common stock or depositary shares to bring a claim in a judicial forum they find favorable.
Exclusive forum clauses may also lead to increased costs to bring a claim or may limit the ability of holders of our common stock or depositary shares to bring a claim in a judicial forum they find favorable. 50 2024 FORM 10-K ANNUAL REPORT ITEM 1A.
Moreover, we expect that a significant portion of those compliance costs, with or without the new regulations, will need to be borne as we approach the $100 billion tier, rather than commence abruptly when we enter the tier, as we upgrade compliance systems, processes, and staffing before they are fully needed.
With or without new regulations, we expect that a significant portion of those compliance costs will need to be borne as we approach the $100 billion tier, rather than commence abruptly when we enter the tier.
RISK FACTORS Table of Contents should eliminate, defer or significantly reduce its dividends if (i) the bank holding company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) the bank holding company’s prospective rate of earnings is not consistent with the bank holding company’s capital needs and overall current and prospective financial condition; or (iii) the bank holding company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
The Federal Reserve has released a supervisory letter advising bank holding companies, among other things, that as a general matter a bank holding company should inform the Federal Reserve and should eliminate, defer or significantly reduce its dividends if (i) the bank holding company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) the bank holding company’s prospective rate of earnings is not consistent with the bank holding company’s capital needs and overall current and prospective financial condition; or (iii) the bank holding company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
A failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, financial condition and results of operations.
A failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, financial condition and results of operations. 49 2024 FORM 10-K ANNUAL REPORT ITEM 1A.
Additional information concerning these risks, which is incorporated into this Item 1A by this reference, appears under the caption Coastal Market Growth and Rising Costs within the section captioned Market Uncertainties and Prospective Trends beginning on page 92 of our 2023 MD&A (Item 7). 41 2023 FORM 10-K ANNUAL REPORT ITEM 1A.
RISK FACTORS Table of Contents Additional information concerning these risks, which is incorporated into this Item 1A by this reference, appears under the caption Coastal Market Growth and Rising Costs within the section captioned Market Uncertainties and Prospective Trends beginning on page 97 of our 2024 MD&A (Item 7).
Typically, we are unable to estimate our loss exposure from legal claims until relatively late in the litigation process, which can make our financial recognition of loss from litigation unpredictable and highly uneven from one period to the next. For most of our pending legal matters we have established either no accrual (reserve) or no significant reserve.
Typically, we are unable to estimate our loss exposure from legal claims until relatively late in the litigation process, which can make our financial recognition of loss from litigation unpredictable and highly uneven from one period to the next.
If applicable to us, direct compliance costs will include creating systems to measure or estimate and capture relevant data, staffing, and engagement of vendors, including a firm to provide required assurances (somewhat analogous to a financial statement auditor).
Direct compliance costs related to these state and federal requirements, should they become effective, will include creating systems to measure or estimate and capture relevant data, staffing, and engagement of vendors, including a firm to provide required assurances (somewhat analogous to a financial statement auditor).
Examples of these kinds of risks include: earthquakes in Memphis; hurricanes in Florida, Louisiana, the Carolina coasts, or the Texas coast; a major change in national health insurance laws impacting our healthcare-industry clients in middle Tennessee; and automotive industry plant closures.
Examples of these kinds of risks include: earthquakes in Memphis; hurricanes in Florida, Louisiana, the Carolina coasts, the Texas coast, and other parts of our geographic footprint, including the inland areas of Georgia and North Carolina impacted by Hurricane Helene; a major change in national health insurance laws impacting our healthcare-industry clients in middle Tennessee; and automotive industry plant closures.
The market among banks for deposits may be impacted by regulatory funding and liquidity requirements . Regulatory rules generally provide favorable treatment for core deposits. Institutions with less than $100 billion of assets are not required to maintain a minimum Liquidity Coverage ratio. At or above $100 billion, the requirement increases with size and certain activities.
Higher funding costs reduce our net interest margin, net interest income, and net income. The market among banks for deposits may be impacted by regulatory funding and liquidity requirements . Regulatory rules generally provide favorable treatment for core deposits. Institutions with less than $100 billion of assets are not required to maintain a minimum Liquidity Coverage ratio.
In 2023 and this year it has been widely reported that the economic costs of hurricane events in the U.S. gulf and southern Atlantic coastal areas have been rising significantly. We believe that rising costs are directly related to growth in those areas.
In 2023 and 2024 it has been widely reported that the economic costs of hurricane events in the U.S. gulf and southern Atlantic coastal areas have been rising significantly. We believe that rising costs are directly related to growth in those areas. For example, much of the growth in Florida has been along the coasts moving out from older cities.
Moreover, we expect such costs to increase significantly as we approach that size. Additional information concerning these expenses appears in Regulatory, Legislative, and Legal Risks within this Item 1A beginning on page 38 . Geographic Risks We are subject to risks of operating in various jurisdictions.
Additional information concerning these expenses appears in Regulatory, Legislative, and Legal Risks within this Item 1A beginning on page 40 . Geographic Risks We are subject to risks of operating in various jurisdictions.
With larger transactions, fair value and other estimations can take up to four quarters to finalize. These estimates, and their revisions, can have a substantial effect on the presentation of our financial condition and operating results after the transaction closes. In addition, the excess of the value “paid” by us in 46 2023 FORM 10-K ANNUAL REPORT ITEM 1A.
With larger transactions, fair value and other estimations can take up to four quarters to finalize. These estimates, and their revisions, can have a substantial effect on the presentation of our financial condition and operating results after the transaction closes.
If public confidence fails, deposit levels in our Bank could fall, perhaps fairly quickly if a tipping point is reached, as depositors seek safety and are able to move their funds rapidly. In the mildest version of this scenario, we could be forced to raise interest we pay on our deposits, raising costs appreciably.
If public confidence fails, deposit levels in our Bank could fall, perhaps fairly quickly if a tipping point is reached, as depositors seek safety and are able to move their funds rapidly. In the mildest version of this scenario, we could be 44 2024 FORM 10-K ANNUAL REPORT ITEM 1A.
Additional information concerning risks related to our former mortgage businesses and our management of them, all of which is incorporated into this Item 1A by this reference, is set forth: under the captions Repurchase Obligations beginning on page 91 , and Contingent Liabilities beginning on page 98 , of our 2023 MD&A (Item 7); and under the captions Exposures from pre-2009 Mortgage Business and Mortgage Loan Repurchase and Foreclosure Liability , both within Note 16—Contingencies and Other Disclosures of our 2023 Financial Statements (Item 8), which Note begins on page 162 .
Additional information concerning risks related to our former mortgage businesses and our management of them, all of which is incorporated into this Item 1A by this reference, is set forth: under the captions Repurchase Obligations beginning on page 96 , and Contingent Liabilities beginning on page 102 , of our 2024 MD&A (Item 7); and under the caption Mortgage Loan Repurchase and Foreclosure Liability , w ithin Note 16—Contingencies and Other Disclosures of our 2024 Financial Statements (Item 8), which Note begins on page 165 . 48 2024 FORM 10-K ANNUAL REPORT ITEM 1A.
Despite our efforts, our costs could rise due to adverse structural changes, market shifts, or inflationary pressures. For example: in 2021 and 2022, compensation costs rose markedly due to high-demand/low-supply circumstances beyond our control. Regulatory compliance expense will increase substantially when we reach $100 billion in assets, which is the next regulatory tier above us now.
For example: in 2021 and 2022, compensation costs rose markedly due to high-demand/low-supply circumstances beyond our control. Regulatory compliance expense will increase substantially when we reach $100 billion in assets, which is the next regulatory tier above us now. Moreover, we expect such costs to increase significantly as we approach that size.
However, the yield curve can be relatively flat or inverted (downward sloping). Inversion normally is rare, but has happened several times in the past few years. In fact inversion has been continuous since the second half of 2022 through early 2024.
However, the yield curve can be relatively flat or inverted (downward sloping). Inversion normally is rare, but has happened several times in the past few years. In fact, inversion was continuous from the second half of 2022 through September 2024, when the Federal Reserve began to reduce short-term interest rates and the yield curve flattened.
The U.S. experienced extremely low interest rates for several years, ending in early 2022. Rising rates in 2022 substantially curtailed our income from these businesses. 45 2023 FORM 10-K ANNUAL REPORT ITEM 1A. RISK FACTORS Table of Contents For example, by late 2022 consumer mortgage refinancings fell to extremely low levels. These impacts largely continued throughout 2023.
The U.S. experienced extremely low interest rates for several years, ending in early 2022. Rising rates in 2022 substantially curtailed our income from these businesses. For example, by late 2022 consumer mortgage refinancings fell to extremely low levels.
Although lower mortgage rates in the future, if and when they occur, should moderate these impacts, it is very unlikely that the low rate environment of 2020-21 will return.
These impacts largely continued throughout 2023 and 2024, but modestly abated in the second half of 2024 as the Federal Reserve began reducing short-term rates. Although lower mortgage rates in the future, if and when they occur, should moderate these impacts, it is very unlikely that the low rate environment of 2020-21 will return.
The largest banks, which must maintain the highest minimum ratio, may be incented to compete for core deposits vigorously.
At or above $100 billion, the requirement increases with size and certain activities. The largest banks, which must maintain the highest minimum ratio, may be incented to compete for core deposits vigorously.
Many non-regulated, non-banking companies have gathered large amounts of personal details about millions of people, and have the ability to analyze that 39 2023 FORM 10-K ANNUAL REPORT ITEM 1A. RISK FACTORS Table of Contents data and act on that analysis very quickly. This situation has prompted governmental responses.
Many non-regulated, non-banking companies have gathered large amounts of personal details about millions of people and have the ability to analyze that data and act on that analysis very quickly. This situation has prompted governmental responses. Two prominent responses are the European Union General Data Protection Regulation and the California Consumer Privacy Act.
In a severe case, deposit flight could render the Bank insolvent. In the first half of 2023, actual events resulted in many of these impacts. Three large U.S. regional banks failed, largely as a result of massive deposit run-off. Along with 42 2023 FORM 10-K ANNUAL REPORT ITEM 1A.
RISK FACTORS Table of Contents forced to raise interest we pay on our deposits, raising costs appreciably. In a severe case, deposit flight could render the Bank insolvent. In the first half of 2023, actual events resulted in many of these impacts. Three large U.S. regional banks failed, largely as a result of massive deposit run-off.
Changes of that sort could curtail our ability to pursue profitable business opportunities. General regulation of greenhouse gas emissions, carbon taxation schemes, government subsidies for "green" industries over carbon-intensive ones, and other such political/governmental actions could substantially and directly impact us or our clients.
General regulation of greenhouse gas emissions, carbon taxation schemes, government subsidies for "green" industries over carbon-intensive ones, and other such political/governmental actions could substantially and directly impact us or our clients. Even if we are not directly impacted in any significant manner by such actions, impacts on clients could have a significant impact on us.
In 2020 we issued and sold $150 million of preferred stock, along with a total of $1.3 billion of senior and subordinated notes. In 2021, we issued and sold another $150 million of preferred stock. We believe we could access the capital markets again if we desired to do so.
We also depend upon financing from private institutional or other investors by means of the capital markets. In 2020 we issued and sold $150 million of preferred stock, along with a total of $1.3 billion of senior and subordinated notes. In 2021, we issued and sold another $150 million of preferred stock.
Instability in property insurance has made, and will continue to make, our business decisions more difficult. That instability increases our risks of loan loss and business downturn. More fundamentally, elevated insurance and casualty costs blunt a key factor driving growth in many of these high-growth markets: lower costs of living. If market growth slows, our business will be impacted.
More fundamentally, elevated insurance and casualty costs blunt a key factor driving growth in many of these high-growth markets: lower costs of living. If market growth slows, our business will be impacted. 43 2024 FORM 10-K ANNUAL REPORT ITEM 1A.
New regulations proposed in 2023 would substantially increase capital and other requirements, various restrictions, and costs.
New regulations proposed in 2023 would substantially increase capital and other requirements, various restrictions, and costs, but whether those regulations will be adopted, or their final form if adopted, remains uncertain.
As a result, disruptions in those areas may adversely impact our earnings in that business unit. 43 2023 FORM 10-K ANNUAL REPORT ITEM 1A. RISK FACTORS Table of Contents Credit Ratings Our credit ratings directly affect the availability and cost of our unsecured funding.
Events affecting interest rates, markets, and other factors may adversely affect the demand for our products and services in our fixed income business. As a result, disruptions in those areas may adversely impact our earnings in that business unit. Credit Ratings Our credit ratings directly affect the availability and cost of our unsecured funding.
Two prominent responses are the European Union General Data Protection Regulation and the California Consumer Privacy Act. Neither is a banking industry regulation, but both apply to banks in relation to certain clients. Further general regulation to protect data privacy appears likely.
Neither is a banking industry regulation, but both apply to banks in relation to certain clients. Further general regulation to protect data privacy appears likely. 41 2024 FORM 10-K ANNUAL REPORT ITEM 1A.
Many factors can influence the amount of our expenses, as well as how quickly they grow. As our businesses change—whether by acquisition, expansion, or contraction—additional expenses can arise from asset purchases, structural reorganization, evolving business strategies, and changing regulations, among other things.
As our businesses change—whether by acquisition, expansion, or contraction—additional expenses can arise from asset purchases, structural reorganization, evolving business strategies, and changing regulations, among other things. We manage controllable expenses and risk through a variety of means, including selectively outsourcing or multi-sourcing various functions and procurement coordination and processes.
In addition, our ability to raise funds is strongly affected by the general state of the U.S. and world economies and financial markets as well as the policies and capabilities of the U.S. government and its agencies, and may remain or become increasingly difficult due to economic and other factors beyond our control.
RISK FACTORS Table of Contents world economies and financial markets as well as the policies and capabilities of the U.S. government and its agencies, and may remain or become increasingly difficult due to economic and other factors beyond our control. For additional information concerning these risks, see Interest Rate and Yield Curve Risks beginning on page 46 .
Although compression eased late in 2023, margins are likely to continue below late 2022 levels as long as the yield curve remains inverted. Market-indexed deposit products are very sensitive to changes in short-term rates, and our use of them increases our exposure to such changes.
RISK FACTORS Table of Contents expanding as compared with both the third quarter of 2024 and the fourth quarter of 2023. Market-indexed deposit products are very sensitive to changes in short-term rates, and our use of them increases our exposure to such changes.
Coastal states such as Florida and Louisiana have created last-resort insurance pools for residents who cannot obtain or afford private property insurance. However, as the costs borne by those pools increase, either the premiums will have to rise or general taxation will have to cover the difference. In addition, those programs generally do not help business clients.
However, as the costs borne by those pools increase, either the premiums will have to rise or general taxation will have to cover the difference. In addition, those programs generally do not help business clients. State and local building and water-control codes are being revised, but often unevenly and often not retroactive to pre-existing structures and developments.
State and local building and water-control codes are being revised, but often unevenly and often not retroactive to pre-existing structures and developments. The current transition period could be lengthy. The availability, reliability, and cost of adequate property insurance is a significant concern for us as well as our clients in affected markets.
The current transition period could be lengthy. The availability, reliability, and cost of adequate property insurance is a significant concern for us as well as our clients in affected markets. Instability in property insurance has made, and will continue to make, our business decisions more difficult. That instability increases our risks of loan loss and business downturn.
The insurance industry is being forced to revise its risk assessment and premium pricing practices in coastal areas as loss experience has deviated from earlier predictions, sometimes badly. In Florida, for example, some smaller carriers have failed, some larger carriers have left markets, and remaining carriers have significantly increased the premiums of hurricane-related insurance, narrowed coverage, or both.
The reported significant increase in casualty risks and costs is being reflected in property insurance practices which currently are in significant flux. The insurance industry is being forced to revise its risk assessment and premium pricing practices in coastal areas as loss experience has deviated from earlier predictions, sometimes badly.
We manage controllable expenses and risk through a variety of means, including selectively outsourcing or multi-sourcing various functions and procurement coordination and processes. In recent years we have actively sought to make strategic businesses more efficient primarily by investing in technology, re-thinking and right-sizing our physical facilities, and re-thinking and right-sizing our workforce and incentive programs.
In recent years we have actively sought to make strategic businesses more efficient primarily by investing in technology, re-thinking and right-sizing our physical facilities, and re-thinking and right-sizing our workforce and incentive programs. These efforts usually entail additional near-term expenses in the 42 2024 FORM 10-K ANNUAL REPORT ITEM 1A.
The Federal Reserve currently has paused its 2022-23 tightening policy. The Federal Reserve has indicated it intends to consider whether and when to cut short-term rates in 2024 based on economic events during the year, including inflationary pressures, employment data, and overall economic activity.
The Federal Reserve began reducing short-term rates in the last half of 2024 based on economic events during the year, including reduced inflationary pressures, employment data, and overall economic activity. Whether, and to what extent, economic conditions will support continued short-term rate reductions in 2025 remains uncertain.
For example, much of the growth in Florida has been along the coasts moving out from older cities. A gulf coast hurricane 50 or 60 years ago had a fair chance of making landfall in a relatively unpopulated area.
A gulf coast hurricane 50 or 60 years ago had a fair chance of making landfall in a relatively unpopulated area. Now, the chances of directly hitting a population center are much higher, the average population in that center is much higher, and the average value per building is much higher.
These efforts usually entail additional near-term expenses in the form of technology purchases and implementation, facility closure or renovation costs, and severance costs, while expected benefits typically are realized with some uncertainty in the future. 40 2023 FORM 10-K ANNUAL REPORT ITEM 1A.
RISK FACTORS Table of Contents form of technology purchases and implementation, facility closure or renovation costs, and severance costs, while expected benefits typically are realized with some uncertainty in the future. We have also focused on the economic profit generated by our business activities and prospects.
Such actions could include: reduction or elimination of dividends; the issuance of common or preferred stock, or securities convertible into stock; or the issuance of any class of stock having rights that are adverse to those of the holders of our existing classes of common or preferred stock.
ITEM 1A. RISK FACTORS Table of Contents s that are adverse to those of the holders of our existing classes of common or preferred stock.
Securities and Exchange Commission ("SEC") has proposed, but not yet adopted, rules that would require all U.S. companies with publicly-traded securities to report annually their GHG emissions and related climate-oriented information.
These rules would require all U.S. companies with publicly-traded securities to report annually their Scope 1 and 2 GHG emissions and related risk-management processes, and would include a related financial statement and audit requirement, among other things.
Those facilities provide funding quickly when we need it, up to program limits. The curtailment or elimination of our access to Federal Home Loan Bank programs would significantly alter how we plan for and manage routine and contingency funding situations. We also depend upon financing from private institutional or other investors by means of the capital markets.
Although we do not view borrowing at the Federal Home Loan Bank or at the discount window at the Federal Reserve as a primary source of liquidity, the curtailment or elimination of our access to these funding sources would significantly alter how we plan for and manage routine and contingency funding situations.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeInformation concerning our business locations, including banking center and other client-facing facilities, at year-end 2023 is provided under the caption Principal Businesses, Brands, & Locations within the Our Businesses section of Item 1 of this report, which begins on page 6 ; that information is incorporated into this Item 2 by this reference.
Biggest changeInformation concerning our business locations, including banking center and other client-facing facilities, at year-end 2024 is provided under the caption Principal Businesses, Brands, & Locations within the Our Businesses section of Item 1 of this report, which begins on page 8 ; that information is incorporated into this Item 2 by this reference.
Our operational and administrative offices are located in several cities where we have banking centers. At December 31, 2023, we believe our physical properties are suitable and adequate for the businesses we conduct.
Our operational and administrative offices are located in several cities where we have banking centers. At December 31, 2024, we believe our physical properties are suitable and adequate for the businesses we conduct.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest change(Sept.-Nov. 2021); Executive Vice President, Chief Financial Officer Corporate Banking, Commercial Banking and Corporate Groups for Truist (2019-2021); Executive Vice President, Chief Financial Officer Group Director for BB&T Corp. (2017-2019); and Sr. Vice President, Chief Financial and Operations Officer—Enterprise Operations Services for BB&T (2013-2017). Her career with BB&T, a predecessor of Truist, started in 2007. Jeff L.
Biggest changeVice President, Chief Financial and Operations Officer—Enterprise Operations Services for BB&T (2013-2017). Her career with BB&T, a predecessor of Truist, started in 2007. Jeff L. Fleming Age: 63 Principal Accounting Officer Executive Vice President—Chief Accounting Officer and Corporate Controller of First Horizon & the Bank (2012) Mr.
Prior to the merger, she had several roles with IBERIABANK Corporation and IBERIABANK starting in 2002, the most recent of which was Senior Executive Vice President and Director of Communications (2002-2020), which included marketing, public relations, human resources, and corporate real estate, and she served as chief of staff to the CEO.
Prior to the merger, she had several roles with IBERIABANK Corporation and IBERIABANK starting in 2002, the most recent of which was Senior Executive Vice President and Director of Communications (2002-2020), which included marketing, public relations, human resources, and corporate real estate, and she served as chief of staff to the CEO. Ashley W.
Bryan Jordan Age: 62 Principal Executive Officer President and Chief Executive Officer (2008) and Chairman of the Board (2012-2020 and since 2022) of First Horizon & the Bank Mr. Jordan became President and Chief Executive Officer in 2008. He was Chairman of the Board from 2012 until we closed the merger of equals between First Horizon and IBKC in 2020.
Bryan Jordan Age: 63 Principal Executive Officer President & Chief Executive Officer (2008) and Chairman of the Board (2012-2020 and since 2022) of First Horizon & the Bank Mr. Jordan became President and Chief Executive Officer in 2008. He was Chairman of the Board from 2012 until we closed the merger of equals between First Horizon and IBKC in 2020.
Ardoin Age: 54 Senior Executive Vice President—Chief Communications Officer of First Horizon & the Bank (2020) Following the closing of the merger of equals between First Horizon and IBKC, Ms. Ardoin assumed the role of Senior Executive Vice President—Chief Communications Officer of First Horizon and the Bank.
Ardoin Age: 55 Senior Executive Vice President—Chief Communications Officer of First Horizon & the Bank (2020) Following the closing of the merger of equals between First Horizon and IBKC, Ms. Ardoin assumed the role of Senior Executive Vice President—Chief Communications Officer of First Horizon and the Bank.
Item 4. Mine Safety Disclosures Not applicable. 49 2023 FORM 10-K ANNUAL REPORT SUPPLEMENTAL PART I INFORMATION Table of Contents Supplemental Part I Information Executive Officers of the Registrant The following is a list of our executive officers, as defined by Securities and Exchange Commission rules, along with certain supplemental information, all presented as of February 20, 2024.
Item 4. Mine Safety Disclosures Not applicable. 52 2024 FORM 10-K ANNUAL REPORT SUPPLEMENTAL PART I INFORMATION Table of Contents Supplemental Part I Information Executive Officers of the Registrant The following is a list of our executive officers, as defined by Securities and Exchange Commission rules, along with certain supplemental information, all presented as of February 20, 2025.
Prior to the merger, starting in 2007, he served in several roles, the most recent of which (before his current role) was President—Regional Banking (2013-2020). From 2004 to 2007 Mr. Popwell was President of SunTrust Bank—Memphis, and prior to that was an Executive Vice President of National Commerce Financial Corp. Anthony J.
Prior to the merger, starting in 2007, he served in several roles, the most recent of which was President—Regional Banking (2013-2020). From 2004 to 2007 Mr. Popwell was President of SunTrust Bank—Memphis, and prior to that was an Executive Vice President of National Commerce Financial Corp. Anthony J.
Jordan’s employment will terminate when that term expires unless the parties mutually agree later to extend the term. Our mandatory retirement policy is waived during the Employment Agreement's term. Name & Age Current (Year First Elected to Office) and Recent Offices & Positions Terry L.
Jordan’s employment will terminate when that term expires unless the parties mutually agree later to extend the term. Our mandatory retirement policy is waived during the Employment Agreement's term. Name & Age Current (Year First Elected to Office) and Recent Offices & Positions Elizabeth A.
Prior to the merger, starting in 2011, she served in several roles with the Bank, most recently Executive Vice President—Consumer Banking (2017-2020). In that role she led the retail, private client/wealth management, mortgage, and small business units. David T.
LoCascio assumed the role of Senior Executive Vice President—Chief Human Resources Officer of First Horizon and the Bank. Prior to the merger, starting in 2011, she served in several roles with the Bank, most recently Executive Vice President—Consumer Banking (2017-2020). In that role she led the retail, private client/wealth management, mortgage, and small business units. David T.
Fleming Age: 62 Principal Accounting Officer Executive Vice President—Chief Accounting Officer and Corporate Controller of First Horizon & the Bank (2012) Mr. Fleming assumed the role of Executive Vice President—Chief Accounting Officer and Corporate Controller in 2012. Previously, starting in 1984, he held several positions with us, most recently (before his current role) Executive Vice President—Corporate Controller (2010-2011). D.
Fleming assumed the role of Executive Vice President—Chief Accounting Officer and Corporate Controller in 2012. Previously, starting in 1984, he held several positions with us, most recently (before his current role) Executive Vice President—Corporate Controller (2010-2011). Tanya L. Hart Age: 55 Senior Executive Vice President—Chief Human Resources Officer of First Horizon & the Bank (2024) Mrs.
Restel Age: 54 President—Regional Banking of First Horizon & the Bank (2021) Following the closing of the merger of equals between First Horizon and IBKC in 2020, Mr. Restel assumed the role of Senior Executive Vice President—Chief Operating Officer of First Horizon and the Bank. From July to November 2021, Mr. Restel also acted as interim Chief Financial Officer.
Restel Age: 55 Senior Executive Vice President—Chief Banking Officer of First Horizon & the Bank (2024) From 2021 through September 2024, Mr. Restel served as President—Regional Banking of First Horizon and the Bank. Following the closing of the merger of equals between First Horizon and IBKC in 2020, Mr.
LoCascio Age: 55 Senior Executive Vice President—Chief Operating Officer of First Horizon & the Bank (2021) Following the closing of the merger of equals between First Horizon and IBKC in 2020, Ms. LoCascio assumed the role of Senior Executive Vice President—Chief Human Resources Officer of First Horizon and the Bank.
During that time he was also an Executive Vice President and a Senior Executive Vice President of Regions. Tammy S. LoCascio Age: 56 Senior Executive Vice President—Chief Operating Officer of First Horizon & the Bank (2021) Following the closing of the merger of equals between First Horizon and IBKC in 2020, Ms.
During that time he was also an Executive Vice President and a Senior Executive Vice President of Regions. 50 2023 FORM 10-K ANNUAL REPORT SUPPLEMENTAL PART I INFORMATION Table of Contents Name & Age Current (Year First Elected to Office) and Recent Offices & Positions Tammy S.
Prior to that, he served as Executive Vice President – Franchise Finance (2022-2024) and before that, Senior Vice President – Franchise Finance (2019-2022). 53 2024 FORM 10-K ANNUAL REPORT SUPPLEMENTAL PART I INFORMATION Table of Contents Name & Age Current (Year First Elected to Office) and Recent Offices & Positions D.
Prior to the merger, he had several roles with IBERIABANK Corporation and IBERIABANK starting in 2001, the most recent of which was Vice Chairman and Chief Financial Officer (2005-2020). During his tenure as Chief Financial Officer, Mr. Restel also served as Chief Credit Officer of IBERIABANK (2007-2009). Susan L.
Restel assumed the role of Senior Executive Vice President—Chief Operating Officer of First Horizon and the Bank. From July to November 2021, Mr. Restel also acted as interim Chief Financial Officer. Prior to the merger, he had several roles with IBERIABANK Corporation and IBERIABANK starting in 2001, the most recent of which was Vice Chairman and Chief Financial Officer (2005-2020).
Popwell Age: 64 President—Specialty Banking of First Horizon & the Bank (2020) Following the closing of the merger of equals between First Horizon and IBKC, Mr. Popwell assumed the role of President—Specialty Banking of First Horizon and the Bank.
Popwell Age: 65 Senior Executive Vice President—Senior Strategic Executive of First Horizon & the Bank (2024) From the closing of the merger of equals between First Horizon and IBKC in 2020 until September 2024, Mr. Popwell served as President—Specialty Banking of First Horizon and the Bank.
Hope Dmuchowski Age: 45 Principal Financial Officer Senior Executive Vice President—Chief Financial Officer of First Horizon & the Bank (2021) Ms. Dmuchowski was elected to her current position in November 2021. Previously, she was Executive Vice President, Head of Financial Planning and Analysis and Management Reporting for Truist Financial Corp.
Argo served in several roles with First Horizon and the Bank, including (prior to her role as Deputy Chief Risk Officer) Director of Credit and Financial Risk (2020-2024). Hope Dmuchowski Age: 46 Principal Financial Officer Senior Executive Vice President—Chief Financial Officer of First Horizon & the Bank (2021) Ms. Dmuchowski was elected to her current position in November 2021.
Springfield Age: 59 Senior Executive Vice President—Chief Credit Officer of First Horizon & the Bank (2013) Ms. Springfield assumed the role of Executive Vice President—Chief Credit Officer of First Horizon & the Bank in 2013, with “Senior” added to her title in 2020.
Hart served in several roles with First Horizon and the Bank, most recently (before her current role) Executive Vice President, Total Rewards, Executive Vice President (2016-2021) Thomas Hung Age: 43 Senior Executive Vice President—Chief Credit Officer of First Horizon & the Bank (2024) Mr.
Akins Age: 60 Senior Executive Vice President—Chief Risk Officer of First Horizon & the Bank (2020) Following the closing of the merger of equals between First Horizon and IBKC, Ms. Akins assumed the role of Senior Executive Vice President—Chief Risk Officer of First Horizon and the Bank.
Argo Age: 46 Senior Executive Vice President—Chief Risk Officer of First Horizon & the Bank (2025) Mrs. Argo assumed the role of Senior Executive Vice President – Chief Risk Officer of First Horizon & the Bank in January 2025, after serving as Deputy Chief Risk Officer since 2024. Previously, starting in 2004, Mrs.
MARKET FOR COMMON EQUITY, STOCKHOLDER MATTERS, & EQUITY PURCHASES AND ITEM 6. Table of Contents PART II
Selected Other Corporate Officers Shannon M. Hernandez Senior Vice President, Assistant General Counsel, and Corporate Secretary Dane P. Smith Senior Vice President Corporate Treasurer 54 2024 FORM 10-K ANNUAL REPORT ITEM 5. MARKET FOR COMMON EQUITY, STOCKHOLDER MATTERS, & EQUITY PURCHASES AND ITEM 6. Table of Contents PART II
Removed
Prior to the merger, she had several roles with IBERIABANK Corporation and IBERIABANK starting in 2002, the most recent of which was Senior Executive Vice President and Chief Risk Officer (2017-2020). Elizabeth A.
Added
Previously, she was Executive Vice President, Head of Financial Planning and Analysis and Management Reporting for Truist Financial Corp. (Sept.-Nov. 2021); Executive Vice President, Chief Financial Officer Corporate Banking, Commercial Banking and Corporate Groups for Truist (2019-2021); Executive Vice President, Chief Financial Officer Group Director for BB&T Corp. (2017-2019); and Sr.
Removed
Previously, starting in 1998, she served the Bank in several roles, the most recent of which (before her current role) was Executive Vice President—Commercial Banking (2011-2013). Selected Other Corporate Officers Clyde A. Billings, Jr. Senior Vice President, Assistant General Counsel, and Corporate Secretary Dane P. Smith Senior Vice President Corporate Treasurer 51 2023 FORM 10-K ANNUAL REPORT ITEM 5.
Added
Hart assumed the role of Senior Executive Vice President—Chief Human Resources Officer of First Horizon & the Bank in October 2024, after serving as Executive Vice President—Chief Human Resources Officer since November 2021. Previously, starting in 1991, Mrs.
Added
Hung assumed the role of Senior Executive Vice President – Chief Credit Officer of First Horizon & the Bank in 2024. Previously, starting in 2019, he served the Bank in several roles, the most recent of which (before his current role) was Executive Vice President – Deputy Chief Credit Officer (2024).
Added
During his tenure as Chief Financial Officer, Mr. Restel also served as Chief Credit Officer of IBERIABANK (2007-2009). T. Lang Wiseman Age: 53 Senior Executive Vice President—General Counsel of First Horizon & the Bank (2025) Mr. Wiseman assumed the role of Senior Executive Vice President – General Counsel of First Horizon & the Bank in January 2025.
Added
Previously, starting in 2024, Mr. Wiseman joined the organization as Executive Vice President – Deputy General Counsel. From 2022-2024, he was a shareholder in the law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC. Previously, Mr. Wiseman served as Deputy Governor and Chief Counsel to the Governor of the State of Tennessee from 2019—2021.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRepurchases by Us of Our Common Stock Under authorizations from our Board of Directors, we may repurchase common shares from time to time for general purposes and for our compensation plans, subject to market conditions, accumulation of excess equity, prudent capital management, and legal and regulatory restrictions.
Biggest changeRepurchases by Us of Our Common Stock Under authorizations from our Board of Directors, we may repurchase common shares from time to time for general purposes, subject to various factors, including FHN's capital position, financial performance, expected capital market impacts of strategic initiatives, market conditions, business conditions, and regulatory considerations, as well as to cover tax obligations associated with stock-based awards under our compensation plans.
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Our Common Stock; Common Shareholders Our sole class of common stock, $0.625 par value, is listed and trades on the New York Stock Exchange LLC under the symbol FHN.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Our Common Stock; Common Shareholders Our sole class of common stock, $0.625 par value, is listed and trades on the New York Stock Exchange LLC under the symbol FHN.
Notwithstanding anything to the contrary set forth in this report or in any of our previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate future filings by reference, including this report in whole or in part, neither the “Total Shareholder Return 2018-2023” performance graph nor Table 5.1 shall be incorporated by reference into any such filings.
Notwithstanding anything to the contrary set forth in this report or in any of our previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate future filings by reference, including this report in whole or in part, neither the “Total Shareholder Return 2019-2024” performance graph nor Table 5.1 shall be incorporated by reference into any such filings.
The “Total Shareholder Return 2018-2023” performance graph compares the yearly percentage change in our cumulative total shareholder return with returns based on the Standard and Poor’s 500 and Keefe, Bruyette & Woods (KBW) Regional and Nasdaq Bank Indices. The graph assumes $100 is invested on December 31, 2018 and dividends are reinvested. Returns are market-capitalization weighted.
The “Total Shareholder Return 2019-2024” performance graph compares the yearly percentage change in our cumulative total shareholder return with returns based on the Standard and Poor’s 500 and Keefe, Bruyette & Woods (KBW) Regional and Nasdaq Bank Indices. The graph assumes $100 is invested on December 31, 2019 and dividends are reinvested. Returns are market-capitalization weighted.
At year-end 2019 and earlier, FHN was included in the KBW Regional Bank Index. At year-end 2020 and later, FHN is included in the KBW Nasdaq Bank Index. The change in index resulted from the merger of equals in 2020 between FHN and IBERIABANK Corporation. 52 2023 FORM 10-K ANNUAL REPORT ITEM 5.
At year-end 2019 and earlier, FHN was included in the KBW Regional Bank Index. At year-end 2020 and later, FHN is included in the KBW Nasdaq Bank Index. The change in index resulted from the merger of equals in 2020 between FHN and IBERIABANK Corporation. 55 2024 FORM 10-K ANNUAL REPORT ITEM 5.
Additional information concerning repurchase activity during the final three months of 2023 is presented in Tables 7.20a and 7.20b, and the surrounding notes and other text under the caption Common Stock Purchase Programs beginning on page 79 of our 2023 MD&A (Item 7), which information is incorporated herein by this reference.
Additional information concerning repurchase activity during the final three months of 2024 is presented in Tables 7.20a, 7.20b and 7.20c, and the surrounding notes and other text under the caption Common Stock Purchase Programs beginning on page 84 of our 2024 MD&A (Item 7), which information is incorporated herein by this reference.
Total Shareholder Return Performance Graph The “Total Shareholder Return 2018-2023” performance graph appearing on the next page, along with Table 5.1, is “furnished” and not “filed” as part of this report, and is not deemed to be soliciting material.
Total Shareholder Return Performance Graph The “Total Shareholder Return 2019-2024” performance graph appearing on the next page, along with Table 5.1, is “furnished” and not “filed” as part of this report, and is not deemed to be soliciting material.
At December 31, 2023, there were approximately 8,712 shareholders of record of our common stock. Sales of Unregistered Common and Preferred Stock Common Stock . Not applicable. Preferred Stock . Not applicable.
At December 31, 2024, there were approximately 8,317 shareholders of record of our common stock. Sales of Unregistered Common and Preferred Stock Common Stock . Not applicable. Preferred Stock . Not applicable.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

17 edited+5 added−5 removed6 unchanged
Biggest changeThe cost of interest-bearing liabilities increased 244 basis points largely driven by higher deposit costs. Total average earning assets decreased $2.8 billion in 2023 largely from a decrease in interest-bearing deposits with banks partially offset by an increase in loans and leases. Total average interest-bearing liabilities increased $4.3 billion driven by increases in short-term borrowings and interest-bearing deposits.
Biggest changeTotal average earning assets increased $665 million in 2024, largely driven by average loan growth of $1.8 billion, partially offset by lower levels of interest-bearing deposits with banks and investment securities. Total average interest-bearing liabilities increased $3.0 billion, largely driven by average interest-bearing deposit growth of $4.4 billion, partially offset by a decrease in other short-term borrowings.
(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).
(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).
Through the Bank and other subsidiaries, FHN offers commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services. At December 31, 2023, FHN had over 450 business locations in 24 states, including over 400 banking centers in 12 states, and employed approximately 7,300 associates.
Through the Bank and other subsidiaries, FHN offers commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services. At December 31, 2024, FHN had over 450 business locations in 24 states, including over 400 banking centers in 12 states, and employed approximately 7,200 associates.
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 local economic conditions, competition for loans and deposits, the monetary policy of the FRB and market interest rates. Net interest income of $2.5 billion in 2023 increased $148 million, or 6%, from 2022.
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 local economic conditions, competition for loans and deposits, the monetary policy of the FRB and market interest rates. Net interest income of $2.5 billion in 2024 decreased $29 million, or 1%, from 2023.
The following table presents the major components of net interest income and net interest margin: 56 2023 FORM 10-K ANNUAL REPORT
The following table presents the major components of net interest income and net interest margin. 60 2024 FORM 10-K ANNUAL REPORT
Results of Operations—2023 compared to 2022 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).
MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents Results of Operations—2024 compared to 2023 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).
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) 2023 2022 2021 Pre-provision net revenue (a) $ 1,388 $ 1,254 $ 974 Diluted earnings per common share $ 1.54 $ 1.53 $ 1.74 Return on average assets (b) 1.12 % 1.08 % 1.15 % Return on average common equity (c) 11.01 % 11.81 % 12.53 % Return on average tangible common equity (a) (d) 14.11 % 15.58 % 16.46 % Net interest margin (e) 3.42 % 3.10 % 2.48 % Noninterest income to total revenue (f) 26.82 % 24.99 % 34.77 % Efficiency ratio (g) 59.90 % 61.24 % 68.56 % Allowance for loan and lease losses to total loans and leases 1.26 % 1.18 % 1.22 % Net charge-offs (recoveries) to average loans and leases 0.28 % 0.11 % — % Total period-end equity to period-end assets 11.38 % 10.83 % 9.53 % Tangible common equity to tangible assets (a) 8.48 % 7.12 % 6.73 % Cash dividends declared per common share $ 0.60 $ 0.60 $ 0.60 Book value per common share $ 15.17 $ 13.48 $ 14.39 Tangible book value per common share (a) $ 12.13 $ 10.23 $ 11.00 Common equity Tier 1 11.40 % 10.17 % 9.92 % Market capitalization $ 7,913 $ 13,159 $ 8,713 (a) Represents a non-GAAP measure which is reconciled in the non-GAAP to GAAP reconciliation in Table 7.28.
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.
The CET1 ratio was 11.40% at December 31, 2023 compared to 10.17% at December 31, 2022. 55 2023 FORM 10-K ANNUAL REPORT ITEM 7.
The CET1 ratio was 11.20% at December 31, 2024 compared to 11.40% at December 31, 2023. 58 2024 FORM 10-K ANNUAL REPORT ITEM 7.
Net interest income of $2.5 billion increased $148 million from 2022 largely driven by higher earning asset yields and loan growth, partially offset by higher funding costs. The net interest margin increased 32 basis points to 3.42% compared to 3.10% in 2022.
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.
Period-end loans and leases of $61.3 billion increased $3.2 billion from December 31, 2022 reflecting commercial loan growth of $1.8 billion, or 4%, and consumer loan growth of $1.4 billion, or 10%.
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 $65.8 billion increased $2.3 billion, or 4%, from December 31, 2022 driven by an $8.6 billion increase in interest-bearing deposits offset by a $6.3 billion decrease in noninterest-bearing deposits. Tier 1 risk-based capital and total risk-based capital ratios at December 31, 2023 were 12.42% and 13.96%, respectively, compared to 11.92% and 13.33% at December 31, 2022.
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.
Management's Discussion and Analysis of Financial Condition and Results of Operations TABLE OF ITEM 7 TOPICS Introduction 55 Executive Overview 55 Results of Operations 56 Analysis of Financial Condition 62 Capital 77 Risk Management 81 Repurchase Obligations 91 Market Uncertainties and Prospective Trends 92 Critical Accounting Policies & Estimates 96 Accounting Changes 98 Non-GAAP Information 98 54 2023 FORM 10-K ANNUAL REPORT ITEM 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations TABLE OF ITEM 7 TOPICS Introduction 58 Financial Performance Summary 58 Results of Operations 59 Analysis of Financial Condition 67 Capital 82 Risk Management 86 Repurchase Obligations 96 Market Uncertainties and Prospective Trends 97 Critical Accounting Policies and Estimates 100 Accounting Changes 102 Non-GAAP Information 102 57 2024 FORM 10-K ANNUAL REPORT ITEM 7.
Provision for credit losses increased to $260 million compared to of $95 million in 2022, largely driven by loan growth, an uncertain macroeconomic outlook, and modest grade migration. Net charge-offs were $170 million compared to $59 million in 2022, largely reflecting the impact of an idiosyncratic credit loss on a single relationship.
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.
FHN recognized an estimated expense of $68 million for the entire assessment in the fourth quarter of 2023. 2023 Financial Performance Summary FHN reported net income available to common shareholders of $865 million, or $1.54 per diluted share, compared to net income of $868 million, or $1.53 per diluted share in 2022.
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.
The increase was largely driven by higher earning asset yields and loan growth partially offset by higher funding costs. FHN's net interest margin increased 32 basis points to 3.42% in 2023 compared to 2022 while the net interest spread decreased 41 basis points to 2.44% over the same period.
Interest expense increased $281 million, largely from higher interest expense on deposits of $354 million, partially offset by a decline in interest on short-term borrowings of $80 million. FHN's net interest margin decreased 7 basis points to 3.35% in 2024 compared to 2023 and the net interest spread decreased 6 basis points to 2.38% over the same period.
Table 5.1 TOTAL SHAREHOLDER RETURN DATA 2018 2019 2020 2021 2022 2023 First Horizon Corporation (FHN) $ 100.00 $ 130.43 $ 106.73 $ 141.55 $ 217.90 $ 131.82 S&P 500 Index 100.00 131.47 155.65 200.29 163.98 207.04 KBW Regional Bank Index (KRX) 100.00 123.87 113.11 154.57 143.87 143.30 KBW Nasdaq Bank Index (BKX) 100.00 136.12 122.09 168.90 132.76 131.58 Data source: Bloomberg Item 6. [Reserved] 53 2023 FORM 10-K ANNUAL REPORT ITEM 7.
Table 5.1 TOTAL SHAREHOLDER RETURN DATA 2019 2020 2021 2022 2023 2024 First Horizon Corporation (FHN) $ 100.00 $ 81.83 $ 108.52 $ 167.06 $ 101.06 $ 149.23 S&P 500 Index 100.00 118.39 152.34 124.73 157.48 196.85 KBW Regional Bank Index (KRX) 100.00 91.32 124.78 116.15 115.69 130.96 KBW Nasdaq Bank Index (BKX) 100.00 89.69 124.08 97.53 96.66 132.63 Data source: Bloomberg Item 6. [Reserved] 56 2024 FORM 10-K ANNUAL REPORT ITEM 7.
Noninterest income of $927 million increased $112 million from 2022, largely driven by the gain on merger termination partially offset by lower fixed income and mortgage banking and title income. Noninterest expense of $2.1 billion increased $126 million from 2022, largely attributable to the FDIC special assessment and the contribution to the First Horizon Foundation discussed above.
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.
Removed
Executive Overview Significant Events and Transactions TD Merger Termination On February 27, 2022, FHN entered into an Agreement and Plan of Merger (the TD Merger Agreement) with The Toronto-Dominion Bank, a Canadian chartered bank (TD), and certain TD subsidiaries. On May 4, 2023, FHN and TD mutually terminated the TD Merger Agreement.
Added
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.
Removed
Under the terms of the termination agreement, TD made a $200 million cash payment to FHN, in addition to the $25 million fee reimbursement due to FHN pursuant to the TD Merger Agreement. Of the $200 million cash payment, FHN contributed $50 million to the First Horizon Foundation.
Added
The countercyclical businesses improved from cycle lows in 2023 as fixed income increased $54 million and mortgage banking income increased $12 million.
Removed
FDIC Special Assessment In November 2023, the FDIC approved a final rule to implement a special assessment on banks to replenish the deposit insurance fund in connection with the three large bank failures in 2023.
Added
(g) Ratio is noninterest expense to total revenue excluding securities gains (losses). 59 2024 FORM 10-K ANNUAL REPORT ITEM 7.
Removed
The special assessment will be 13.4 basis points per year imposed on certain deposits over eight quarters, starting with the first quarterly assessment period of 2024.
Added
The decrease was largely attributable to higher funding costs, partially offset by higher loan yields and loan growth. Interest income increased $252 million, largely driven by higher interest on loans and leases of $299 million.
Removed
The net interest margin was favorably impacted by a 203 basis point increase in earning asset yields, largely reflecting the impact of higher interest rates and lower levels of excess cash. In addition, the tax-equivalent adjustment was favorably impacted by higher rates on floating rate tax-free commercial loans.
Added
The decline in the margin was attributable to a 35 basis point increase in the cost of interest-bearing liabilities, partially offset by a 29 basis point increase in earning asset yields.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

263 edited+67 added−97 removed136 unchanged
Biggest changeMANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents Table 7.2 AVERAGE BALANCES, NET INTEREST INCOME AND YIELDS/RATES (Dollars in millions) 2023 2022 2021 Assets: Average Balance Interest Income/Expense Yield/Rate Average Balance Interest Income/Expense Yield/Rate Average Balance Interest Income/Expense Yield/Rate Loans and leases: Commercial loans and leases $ 46,175 $ 2,958 6.41 % $ 43,691 $ 1,823 4.18 % $ 44,325 $ 1,498 3.38 % Consumer loans 13,994 630 4.48 12,261 479 3.89 11,973 469 3.92 Total loans and leases 60,169 3,588 5.96 55,952 2,302 4.11 56,298 1,967 3.49 Loans held for sale 664 51 7.71 884 39 4.41 956 33 3.44 Investment securities 9,912 250 2.52 9,976 200 2.01 8,623 123 1.43 Trading securities 1,179 78 6.62 1,438 58 4.04 1,366 30 2.17 Federal funds sold 61 4 5.56 191 4 2.09 37 — 0.15 Securities purchased under agreements to resell (a) 318 15 4.81 522 6 1.12 584 — (0.09) Interest-bearing deposits with banks 2,504 130 5.20 8,672 87 1.00 13,123 17 0.13 Total earning assets / Total interest income $ 74,807 $ 4,116 5.50 % $ 77,635 $ 2,696 3.47 % $ 80,987 $ 2,170 2.68 % Cash and due from banks 1,012 1,217 1,261 Goodwill and other intangible assets, net 1,720 1,777 1,836 Premises and equipment, net 596 636 712 Allowance for loan and lease losses (740) (648) (834) Other assets 4,288 3,600 3,647 Total assets $ 81,683 $ 84,217 $ 87,609 Liabilities and Shareholders' Equity: Interest-bearing deposits: Savings $ 23,547 $ 679 2.88 % $ 24,292 $ 94 0.39 % $ 27,283 $ 36 0.13 % Other interest-bearing deposits 15,300 351 2.30 15,641 72 0.47 15,688 20 0.13 Time deposits 6,095 236 3.87 2,963 18 0.60 4,281 25 0.57 Total interest-bearing deposits 44,942 1,266 2.82 42,896 184 0.43 47,252 81 0.17 Federal funds purchased 349 18 5.12 699 11 1.56 949 1 0.12 Securities sold under agreements to repurchase 1,426 52 3.66 881 7 0.77 1,235 4 0.30 Trading liabilities 301 12 4.16 480 12 2.56 540 6 1.11 Other short-term borrowings 2,688 140 5.19 229 5 2.26 124 — 0.09 Term borrowings 1,335 72 5.39 1,596 72 4.51 1,645 72 4.37 Total interest-bearing liabilities / Total interest expense $ 51,041 $ 1,560 3.06 % $ 46,781 $ 291 0.62 % $ 51,745 $ 164 0.32 % Noninterest-bearing deposits 19,341 26,851 25,879 Other liabilities 2,396 2,006 1,506 Total liabilities 72,778 75,638 79,130 Shareholders' equity 8,610 8,284 8,184 Noncontrolling interest 295 295 295 Total shareholders' equity 8,905 8,579 8,479 Total liabilities and shareholders' equity $ 81,683 $ 84,217 $ 87,609 Net earnings assets / Net interest income (TE) / Net interest spread $ 23,766 $ 2,556 2.44 % $ 30,854 $ 2,405 2.85 % $ 29,242 $ 2,006 2.36 % Taxable equivalent adjustment (16) 0.98 (13) 0.25 (12) 0.12 Net interest income / Net interest margin (b) $ 2,540 3.42 % $ 2,392 3.10 % $ 1,994 2.48 % (a) Negative yield is driven by negative market rates on reverse repurchase agreements.
Biggest changeMANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents Table 7.2 AVERAGE BALANCES, NET INTEREST INCOME AND YIELDS/RATES (Dollars in millions) 2024 2023 2022 Assets: Average Balance Interest Income/Expense Yield/Rate Average Balance Interest Income/Expense Yield/Rate Average Balance Interest Income/Expense Yield/Rate Loans and leases: Commercial loans and leases $ 47,429 $ 3,166 6.68 % $ 46,175 $ 2,958 6.41 % $ 43,691 $ 1,823 4.18 % Consumer loans 14,576 720 4.93 13,994 630 4.48 12,261 479 3.89 Total loans and leases 62,005 3,886 6.27 60,169 3,588 5.96 55,952 2,302 4.11 Loans held for sale 472 36 7.61 664 51 7.71 884 39 4.41 Investment securities 9,386 244 2.60 9,912 250 2.52 9,976 200 2.01 Trading securities 1,399 85 6.12 1,179 78 6.62 1,438 58 4.04 Federal funds sold 39 2 5.61 61 4 5.56 191 4 2.09 Securities purchased under agreements to resell 566 29 5.01 318 15 4.81 522 6 1.12 Interest-bearing deposits with banks 1,605 85 5.29 2,504 130 5.20 8,672 87 1.00 Total earning assets / Total interest income $ 75,472 $ 4,367 5.79 % $ 74,807 $ 4,116 5.50 % $ 77,635 $ 2,696 3.47 % Cash and due from banks 917 1,012 1,217 Goodwill and other intangible assets, net 1,674 1,720 1,777 Premises and equipment, net 580 596 636 Allowance for loan and lease losses (812) (740) (648) Other assets 3,991 4,288 3,600 Total assets $ 81,822 $ 81,683 $ 84,217 Liabilities and Shareholders' Equity: Interest-bearing deposits: Savings $ 25,941 $ 848 3.27 % $ 23,547 $ 679 2.88 % $ 24,292 $ 94 0.39 % Other interest-bearing deposits 16,215 449 2.77 15,300 351 2.30 15,641 72 0.47 Time deposits 7,224 323 4.47 6,095 236 3.87 2,963 18 0.60 Total interest-bearing deposits 49,380 1,620 3.28 44,942 1,266 2.82 42,896 184 0.43 Federal funds purchased 420 22 5.34 349 18 5.12 699 11 1.56 Securities sold under agreements to repurchase 1,720 66 3.83 1,426 52 3.66 881 7 0.77 Trading liabilities 555 24 4.22 301 12 4.16 480 12 2.56 Other short-term borrowings 781 42 5.38 2,688 140 5.19 229 5 2.26 Term borrowings 1,180 67 5.63 1,335 72 5.39 1,596 72 4.51 Total interest-bearing liabilities / Total interest expense $ 54,036 $ 1,841 3.41 % $ 51,041 $ 1,560 3.06 % $ 46,781 $ 291 0.62 % Noninterest-bearing deposits 16,297 19,341 26,851 Other liabilities 2,353 2,396 2,006 Total liabilities 72,686 72,778 75,638 Shareholders' equity 8,841 8,610 8,284 Noncontrolling interest 295 295 295 Total shareholders' equity 9,136 8,905 8,579 Total liabilities and shareholders' equity $ 81,822 $ 81,683 $ 84,217 Net earnings assets / Net interest income (TE) / Net interest spread $ 21,436 $ 2,526 2.38 % $ 23,766 $ 2,556 2.44 % $ 30,854 $ 2,405 2.85 % Taxable equivalent adjustment (15) 0.97 (16) 0.98 (13) 0.25 Net interest income / Net interest margin (a) $ 2,511 3.35 % $ 2,540 3.42 % $ 2,392 3.10 % (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. 61 2024 FORM 10-K ANNUAL REPORT ITEM 7.
The Credit Risk Management function assesses the asset quality trends and results, as well as lending processes, adherence to underwriting guidelines (portfolio-specific underwriting guidelines are discussed further in the Asset Quality Trends section), and utilizes this information to inform management regarding the current state of credit quality and as a factor of the estimation process for determining the allowance for credit losses.
The Credit Risk Management function assesses the asset quality trends and results, as well as lending processes, adherence to underwriting guidelines (portfolio-specific underwriting guidelines are discussed further in the Asset Quality Trends section), and utilizes this information to inform management regarding the current state of credit quality and as a factor in the estimation process for determining the allowance for credit losses.
Critical Accounting Policies & Estimates Allowance for Loan and Lease Losses Management’s policy is to maintain the ALLL at a level sufficient to absorb expected credit losses in the loan and lease portfolio. Management performs periodic and systematic detailed reviews of its loan and lease portfolio to identify trends and to assess the overall collectability of the portfolio.
Critical Accounting Policies and Estimates Allowance for Loan and Lease Losses Management’s policy is to maintain the ALLL at a level sufficient to absorb expected credit losses in the loan and lease portfolio. Management performs periodic and systematic detailed reviews of its loan and lease portfolio to identify trends and to assess the overall collectability of the portfolio.
Non-GAAP Information Certain measures are included in this report are “non-GAAP”, meaning they are not presented in accordance with U.S. GAAP and also are not codified in U.S. banking regulations currently applicable to FHN.
Non-GAAP Information Certain measures included in this report are “non-GAAP”, meaning they are not presented in accordance with U.S. GAAP and also are not codified in U.S. banking regulations currently applicable to FHN.
Value-at-Risk and Stress Testing VaR is a statistical risk measure used to estimate the potential loss in value from adverse market movements over an assumed fixed holding period within a stated confidence level. FHN employs a model to compute daily VaR measures for its trading securities inventory.
Value-at-Risk ("VaR") and Stress Testing ("SVaR") VaR is a statistical risk measure used to estimate the potential loss in value from adverse market movements over an assumed fixed holding period within a stated confidence level. FHN employs a model to compute daily VaR measures for its trading securities inventory.
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 are composed of C&I loans and CRE loans.
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 are composed of C&I loans and leases and CRE loans.
The RM is primarily responsible for communications with the borrower and maintaining the relationship, while the PM is responsible for assessing the credit quality of the borrower, beginning with the initial underwriting and continuing through the servicing period. Other specialists and the assigned RM/PM are organized into units called deal teams.
The RM is primarily responsible for communications with the borrower and maintaining the relationship, while the PM is responsible for assessing the credit quality of the borrower, beginning with the initial underwriting and continuing through the servicing period. Other specialists and the assigned RM/PM are organized into units called relationship teams.
Now, the chances of directly hitting a population center are much higher, the average population in that center is much higher, and the average value per building is much higher. The reported significant increase in casualty risks and costs is being reflected in property insurance practices which currently are in significant flux.
Now, the chances of a hurricane directly hitting a population center are much higher, the average population in that center is much higher, and the average value per building is much higher. The reported significant increase in casualty risks and costs is being reflected in property insurance practices which currently are in significant flux.
Impacts on FHN In 2022, FHN benefited significantly from rising rates as the rise in lending rates outpaced the rise in deposit and other funding rates. In the first quarter of 2023, that outpacing ended, and FHN's net interest margin started to compress.
Impacts on FHN In 2022, FHN benefited significantly from rising rates as the rise in lending rates outpaced the rise in deposit and other funding rates. In the first quarter of 2023, that outpacing ended, and FHN's net interest margin (NIM) started to compress.
Model Validation Trading risk management personnel within FHN Financial have primary responsibility for model risk management with respect to the model used by FHN to compute its VaR measures and perform stress testing on the trading inventory.
Model Validation Trading risk management personnel within FHN have primary responsibility for model risk management with respect to the model used by FHN to compute its VaR measures and perform stress testing on the trading inventory.
While every circumstance is different, LRRD 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.
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.
Table 7.23 INTEREST RATE SENSITIVITY Shifts in Interest Rates (in bps) % Change in Projected Net Interest Income -100 (3.6)% -50 (1.7)% -25 (0.9)% +25 0.7% +50 1.4% +100 2.6% +200 3.3% A steepening yield curve scenario, where long-term rates increase by 50 basis points and short-term rates are static, results in a favorable NII variance of 0.4%.
Table 7.23 INTEREST RATE SENSITIVITY Shifts in Interest Rates (in bps) % Change in Projected Net Interest Income -200 (4.7)% -100 (2.0)% -50 (0.9)% -25 (0.5)% +25 0.4% +50 0.7% +100 1.3% +200 2.2% A steepening yield curve scenario, where long-term rates increase by 50 basis points and short-term rates are static, results in a favorable NII variance of 0.2%.
Smaller amounts of other consumer and home equity loans are also included in loans HFS. Additionally, FHN's mortgage banking operations includes 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.
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.
Instability in property insurance has made, and continues to make, FHN's business decisions more difficult. That instability increases FHN's risks of loan loss and business downturn. More fundamentally, elevated insurance and casualty costs blunt a key factor driving growth in many of these high-growth markets: lower costs of living. If market growth slows, FHN's business will be impacted.
Instability in property insurance has made, and continues to make, FHN's business decisions more difficult. That instability increases FHN's risks of loan loss and business downturn. More fundamentally, elevated insurance and casualty costs blunt a key factor driving growth in many of these high-growth markets: lower costs of living. If market growth slows, FHN's business could be impacted.
A few new requirements would apply to banks, like FHN, with assets over $50 billion, but by far the main impacts would fall on banks greater than $100 billion in assets. The proposals touch upon many regulatory requirements, including debt and equity capital requirements, credit risk standards, asset risk-weighting, and resolution planning.
A few new requirements would apply to banks, like FHN, with assets over $50 billion, but by far the main impacts would fall on banks greater than $100 billion in assets. The proposals touch upon many regulatory requirements, including debt and equity capital requirements, credit risk standards, and asset risk-weighting.
Such loans can have elevated risks of default, particularly in a rising interest rate environment, potentially stressing borrower capacity to repay the loan at the higher interest rate. FHN’s current underwriting practice requires HELOC borrowers to qualify based on a sensitized interest rate (above the current note rate), fully amortized payment methodology.
Such loans can have elevated risk of default, particularly in a rising interest rate environment, potentially stressing borrower capacity to repay the loan at the higher interest rate. FHN’s current underwriting practice requires HELOC borrowers to qualify based on a sensitized interest rate (above the current note rate), fully amortized payment methodology.
Deal teams are constructed with specific job attributes that facilitate FHN’s ability to identify, mitigate, document, and manage ongoing risk. PMs and credit analysts provide enhanced analytical support during loan origination and servicing, including monitoring of the financial condition of the borrower and tracking compliance with loan agreements.
Relationship teams are constructed with specific job attributes that facilitate FHN’s ability to identify, mitigate, document, and manage ongoing risk. PMs and credit analysts provide enhanced analytical support during loan origination and servicing, including monitoring of the financial condition of the borrower and tracking compliance with loan agreements.
IT risk management also includes IT system reliability, data integrity, IT aspects of regulatory compliance, and risks associated with the use of artificial intelligence tools and systems. The discussion in this section focuses on cybersecurity. Additional information on this topic is presented in Cybersecurity Risks within Item 1A beginning on page 33 .
IT risk management also includes IT system reliability, data integrity, IT aspects of regulatory compliance, and risks associated with the use of artificial intelligence tools and systems. The discussion in this section focuses on cybersecurity. Additional information on this topic is presented in Cybersecurity Risks within Item 1A beginning on page 35 .
The individual expected credit loss assessments completed on commercial loans are 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.
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.
Capital ratios for both FHN and First Horizon Bank as of December 31, 2023 are calculated under the final rule issued by the banking regulators in 2020 to delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period.
Capital ratios for both FHN and First Horizon Bank as of December 31, 2024 are calculated under the final rule issued by the banking regulators in 2020 to delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period.
Based on a static balance sheet as of December 31, 2023, NII exposures over the next 12 months assuming rate shocks of plus/minus 25 basis points, plus/minus 50 basis points, plus/minus 100 basis points, and plus 200 basis points are estimated to have variances as shown in the table below.
Based on a static balance sheet as of December 31, 2024, NII exposures over the next 12 months, assuming rate shocks of plus/minus 25 basis points, plus/minus 50 basis points, plus/minus 100 basis points, and plus/minus 200 basis points are estimated to have variances as shown in the table below.
Results of these tests indicate that both FHN and First Horizon Bank would be able to maintain capital well in excess of Basel III Adequately Capitalized standards under the hypothetical severe global recession of the 2023 CCAR Severely Adverse scenario.
Results of these tests indicate that both FHN and First Horizon Bank would be able to maintain capital well in excess of Basel III Adequately Capitalized standards under the hypothetical severe global recession of the 2024 CCAR Severely Adverse scenario.
These groups’ activities are designed to provide reasonable assurance that risks are appropriately identified and communicated; resources are safeguarded; significant financial, managerial, and operating information is complete, accurate, and reliable; and employee actions are in compliance with FHN’s policies and applicable laws and regulations.
These groups’ activities are designed to provide reasonable assurance that risks are appropriately identified and communicated; resources are safeguarded; significant financial, managerial, and operating information is complete, accurate, and reliable; and associate actions are in compliance with FHN’s policies and applicable laws and regulations.
While the Credit Risk function oversees FHN’s credit risk management, there is significant coordination between the business lines and the Credit Risk function in order to manage FHN’s credit risk and maintain strong asset quality. The Credit Risk function recommends portfolio, industry/sector, and individual client limits to the Risk Committee of the Board for approval.
While the Credit Risk function oversees FHN’s credit risk management, there is significant coordination between the business lines and the Credit Risk function in order to manage FHN’s credit risk and maintain strong asset quality. The Credit Risk function recommends portfolio industry/sector and individual country limits to the Risk Committee of the Board for approval.
Presentation of regulatory measures, even those which are not GAAP, provide a meaningful base for comparability to other financial institutions subject to the same regulations as FHN, as demonstrated by their use by banking regulators in reviewing capital adequacy of financial institutions.
Presentation of regulatory measures, even those which are not GAAP, provides a meaningful base for comparability to other financial institutions subject to the same regulations as FHN, as demonstrated by their use by banking regulators in reviewing capital adequacy of financial institutions.
First Horizon Bank declared and paid preferred dividends in each quarter of 2023 and 2022. Additionally, First Horizon Bank declared preferred dividends in first quarter 2024, payable in April 2024. Payment of a dividend to shareholders of FHN is dependent on several factors which are considered by the Board.
First Horizon Bank declared and paid preferred dividends in each quarter of 2024 and 2023. Additionally, First Horizon Bank declared preferred dividends in first quarter 2025, payable in April 2025. Payment of a dividend to shareholders of FHN is dependent on several factors which are considered by the Board.
Management, measurement, and reporting of compliance risk are overseen by the Operational Risk Committee and other key Corporate Governance Committees. Key executives from the business segments, legal, compliance, risk management, and service functions are represented on the Committees. Summary reports of Committee activities and decisions are provided to the appropriate governance committees.
Management, measurement, and reporting of compliance risk are overseen by the Compliance Risk Committee and other key Corporate Governance Committees. Key executives from the business segments, legal, compliance, risk management, and service functions are represented on the Committees. Summary reports of Committee activities and decisions are provided to the appropriate Board governance committees.
Due to the sensitivity of the ALLL determination to macroeconomic forecasts, changes in those forecasts can result in materially different results between reporting periods. In the determination of the ALLL as of December 31, 2023, FHN utilized Moody's Baseline and S3 (adverse) scenarios for the calculation of the ALLL.
Due to the sensitivity of the ALLL determination to macroeconomic forecasts, changes in those forecasts can result in materially different results between reporting periods. In the determination of the ALLL as of December 31, 2024, FHN utilized Moody's Baseline and S3 (adverse) scenarios for the calculation of the ALLL.
Identified guideline and policy exceptions require established mitigating factors that have been approved for use by Credit Risk Management. HELOC interest rates are variable and adjust with movements in the index rate stated in the loan agreement.
Identified guideline and policy exceptions require established mitigating factors that have been approved for use by Credit. HELOC interest rates are variable and adjust with movements in the index rate stated in the loan agreement.
LRRD 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.
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.
Capital Risk Management & Adequacy The capital management objectives of FHN are to provide capital sufficient to cover the risks inherent in FHN’s businesses, to maintain excess capital to well-capitalized standards and Board policy, and to assure ready access to the capital markets.
Capital Risk Management & Adequacy The capital management objectives of FHN are to provide capital sufficient to cover the risks inherent in FHN’s businesses, to maintain excess capital to well-capitalized standards and Board policy, and to ensure ready access to the capital markets.
Major topics in the op risk portion of the Enterprise Risk Report each quarter include fraud and related incidents; process management, which includes many processes related to cybersecurity defenses; and information security, which addresses core cybersecurity processes and incidents.
Major topics in the operational risk portion of the Enterprise Risk Report each quarter include fraud and related incidents; process management, which includes many processes related to cybersecurity defenses; and information security, which addresses core cybersecurity processes and incidents.
In addition, in January 2024, the Board approved cash dividends per share in the following amounts: Table 7.25 CASH DIVIDENDS APPROVED BUT NOT PAID Dividend/Share Record Date Payment Date Common Stock $ 0.15 3/15/2024 4/1/2024 Preferred Stock Series C $ 165.00 4/16/2024 5/1/2024 Series D $ 305.00 4/16/2024 5/1/2024 Series E $ 1,625.00 3/26/2024 4/10/2024 Series F $ 1,175.00 3/26/2024 4/10/2024 Off-Balance Sheet Arrangements In the normal course of business, FHN is a party to a number of activities that contain credit, market and operational risk that are not reflected in whole or in part in the consolidated financial statements.
In addition, in January 2025, the Board approved cash dividends per share in the following amounts: Table 7.25 CASH DIVIDENDS APPROVED BUT NOT PAID Dividend/Share Record Date Payment Date Common Stock $ 0.15 3/14/2025 4/1/2025 Preferred Stock Series C $ 165.00 4/16/2025 5/1/2025 Series E $ 1,625.00 3/26/2025 4/10/2025 Series F $ 1,175.00 3/26/2025 4/10/2025 Off-Balance Sheet Arrangements In the normal course of business, FHN is a party to a number of activities that contain credit, market and operational risk that are not reflected in whole or in part in the consolidated financial statements.
The timing and exact amount of common share repurchases are subject to various factors, including FHN's capital position, financial performance, expected capital impacts of strategic initiatives, market conditions, business conditions, and regulatory considerations.
The timing and exact amount of common share repurchases were subject to various factors, including FHN's capital position, financial performance, expected capital impacts of strategic initiatives, market conditions, business conditions, and regulatory considerations.
As of December 31, 2023, both FHN and First Horizon Bank had sufficient capital to qualify as well-capitalized institutions and to meet the capital conservation buffer requirement.
As of December 31, 2024, both FHN and First Horizon Bank had sufficient capital to qualify as well-capitalized institutions and to meet the capital conservation buffer requirement.
(b) Subject to market haircuts on collateral. Generally, a primary source of funding for a bank is core deposits from the bank's client base. The period-end loans-to-deposits ratio was 93% and 92% as of December 31, 2023 and December 31, 2022, respectively. FHN may also use unsecured short-term borrowings as a source of liquidity.
(b) Subject to market haircuts on collateral. Generally, a primary source of funding for a bank is core deposits from the bank's client base. The period-end loans-to-deposits ratio was 95% and 93% as of December 31, 2024 and 2023, respectively. FHN may also use unsecured short-term borrowings as a source of liquidity.
Generally, performance of this portfolio is affected by life events that affect borrowers’ finances, the level of unemployment, and home prices. As of December 31, 2023 and 2022, FHN had held-to-maturity consumer mortgage loans secured by real estate totaling $29 million and $42 million, respectively, that were in the process of foreclosure.
Generally, performance of this portfolio is affected by life events that affect borrowers’ finances, the level of unemployment, and home prices. As of December 31, 2024 and 2023, FHN had held-to-maturity consumer mortgage loans secured by real estate totaling $26 million and $29 million, respectively, that were in the process of foreclosure.
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 but does generally structure modified consumer loans using the parameters of the former Home Affordable Modification Program.
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 ("HAMP").
MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents The following table provides detail of the contractual maturities of loans and leases at December 31, 2023.
MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents The following table provides detail of the contractual maturities of loans and leases at December 31, 2024.
The lending authority is delegated to the business line (Market Managers, Departmental Managers, Regional Presidents, Relationship Managers (RM) and Portfolio Managers (PM)) and to Credit Risk Managers. While individual limits vary, the predominant amount of approval authority is vested with the Credit Risk Management function.
The lending authority is delegated to the business line (Market Managers, Departmental Managers, Regional Presidents, Relationship Managers ("RM") and Portfolio Managers ("PM") and to Credit Officers. While individual limits vary, the predominant amount of approval authority is vested with the Credit function.
The total repurchase and foreclosure liability, which includes both the legacy pre-2009 business and the current mortgage business, was $16 million as of both December 31, 2023 and 2022. Market Uncertainties and Prospective Trends FHN’s future results could be affected both positively and negatively by several known trends.
The total repurchase and foreclosure liability, which includes both the legacy pre-2009 business and the current mortgage business, was $15 million and $16 million as of December 31, 2024 and 2023, respectively. Market Uncertainties and Prospective Trends FHN’s future results could be affected both positively and negatively by several known trends.
FHN believes that the principal assumptions underlying the accounting estimates made by management include: (1) the commercial loan portfolio has been properly risk graded based on information about borrowers in specific industries and specific issues with respect to single borrowers; (2) borrower specific information made available to FHN is current and accurate; (3) the loan portfolio has been segmented properly and individual loans have similar credit risk characteristics and will behave similarly; (4) the lives for loan portfolio pools have been estimated properly, including consideration of expected prepayments; (5) the economic forecasts utilized and associated weighting selected by management in the modeling of expected credit losses are reflective of future economic conditions; (6) entity-specific historical loss information has been properly assessed for all loan portfolio segments as the initial basis for estimating expected credit losses; (7) the reasonable and supportable periods for loan portfolio segments have been properly determined; (8) the reversion methodologies and timeframes for migration from the reasonable and supportable period to the use of historical loss rates are reasonable; (9) expected recoveries of prior charge off amounts have been properly estimated; and (10) qualitative adjustments to modeled loss results reasonably reflect expected future credit losses as of the date of the financial statements.
FHN believes that the principal assumptions underlying the accounting estimates made by management include: (1) the commercial loan portfolio has been properly risk graded based on information about borrowers in specific industries and specific issues with respect to single borrowers; (2) borrower-specific information made available to FHN is current and accurate; (3) the loan portfolio has been segmented properly and individual loans have similar credit risk characteristics and will behave similarly; (4) the lives for loan portfolio pools have been estimated properly, including consideration of expected prepayments; (5) the economic forecasts utilized and associated weighting selected by management in the modeling of expected credit losses are reflective of future economic conditions; (6) entity-specific historical loss information has been properly assessed for all loan portfolio segments as the initial basis for estimating expected credit losses; (7) the reasonable and supportable periods for loan portfolio segments have been properly determined; (8) the reversion methodologies and timeframes for migration from the reasonable and supportable period to the use of historical loss rates are reasonable; (9) expected recoveries of prior charge off amounts have been properly estimated; and (10) qualitative adjustments to modeled loss results 100 2024 FORM 10-K ANNUAL REPORT ITEM 7.
(b) Variances are computed on a line-by-line basis and are non-additive. (c) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, and where applicable, state income taxes. 58 2023 FORM 10-K ANNUAL REPORT ITEM 7.
(b) Variances are computed on a line-by-line basis and are non-additive. (c) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, and where applicable, state income taxes. 62 2024 FORM 10-K ANNUAL REPORT ITEM 7.
FHN cannot predict exactly when or how much short-term rates will be changed, how market-driven long-term rates will behave, nor how those actions may affect financial markets, during 2024. Yield Curve Unusual yield curve effects, including inversion, are common when monetary policy changes. A traditional measure of inversion occurs when the two-year U.S.
FHN cannot predict when or how much short-term rates will be changed, how market-driven long-term rates will behave, nor how those actions may affect financial markets during the next several quarters. Yield Curve Unusual yield curve effects, including inversion, are common when monetary policy changes. A traditional measure of inversion occurs when the two-year U.S.
For smaller commercial credits, generally $5 million or less, and income-producing CRE credits greater than $10 million to non-professional real estate developers and smaller professional real estate investors/developers, FHN utilizes a centralized underwriting unit in order to originate and grade small business loans more efficiently and consistently.
For smaller commercial credits, generally $5 million or less, and income-producing CRE credits greater than $10 million to non-professional real estate developers and smaller professional real estate investors/developers, FHN utilizes a centralized underwriting unit in order to originate and grade these credits more efficiently and consistently.
Loans to mortgage companies and borrowers in the finance and insurance industry were 18% and 20% of FHN’s C&I loan portfolio as of December 31, 2023 and 2022, respectively, and as a result could be affected by items that uniquely impact the financial services industry.
Loans to mortgage companies and borrowers in the finance and insurance industry were 21% and 18% of FHN’s C&I loan portfolio as of December 31, 2024 and 2023, respectively, and as a result could be affected by items that uniquely impact the financial services industry.
The principal payment generally is fully amortizing, but payment amounts will adjust when variable rates reset to reflect changes in the prime rate. As of December 31, 2023, approximately 94% of FHN's HELOCs were in the draw period compared to 92% at the end of 2022.
The principal payment generally is fully amortizing, but payment amounts will adjust when variable rates reset to reflect changes in the prime rate. As of December 31, 2024, approximately 95% of FHN's HELOCs were in the draw period compared to 94% at the end of 2023.
In accordance with FHN’s interpretation of regulatory guidance, FHN may block future draws on accounts in order to mitigate risk of loss to FHN. Credit Card and Other The credit card and other consumer loan portfolio totaled $793 million as of December 31, 2023 and $840 million as of December 31, 2022.
In accordance with FHN’s interpretation of regulatory guidance, FHN may block future draws on accounts in order to mitigate risk of loss to FHN. Credit Card and Other The credit card and other consumer loan portfolio totaled $669 million as of December 31, 2024 and $793 million as of December 31, 2023.
Loans to borrowers in the real estate and rental and leasing industry were 12% and 10% of FHN's C&I portfolio as of December 31, 2023 and 2022, respectively. As of December 31, 2023, FHN did not have any other concentrations of C&I loans in any single industry of 10% or more of total loans.
Loans to borrowers in the real estate and rental and leasing industry were 12% of FHN's C&I portfolio as of both December 31, 2024 and 2023. As of December 31, 2024, FHN did not have any other concentrations of C&I loans in any single industry of 10% or more of total loans.
The following tables provide a reconciliation of shareholders’ equity from the Consolidated Balance Sheets to Common Equity Tier 1, Tier 1 and Total Regulatory Capital as well as certain selected capital ratios: 77 2023 FORM 10-K ANNUAL REPORT ITEM 7.
The following tables provide a reconciliation of shareholders’ equity from the Consolidated Balance Sheets to Common Equity Tier 1, Tier 1, and Total Regulatory Capital, as well as certain selected capital ratios. 82 2024 FORM 10-K ANNUAL REPORT ITEM 7.
Compliance Testing and Model Validation report to the Chief Risk Officer and report annually to the Audit Committee of the Board. Market Risk Management Market risk is the risk that changes in market conditions will adversely impact the value of assets or liabilities, or otherwise negatively impact FHN’s earnings.
Compliance Testing and Model Validation report to the Chief Risk Officer and provide annual reports to the Audit Committee of the Board. Market Risk Management Market risk is the risk that changes in market conditions will adversely impact the value of assets or liabilities, or otherwise negatively impact FHN’s earnings.
Curve steepening - assumes an instantaneous steepening of the interest rate yield curve through a decrease in short-term rates and an increase in long- 83 2023 FORM 10-K ANNUAL REPORT ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents term rates.
Curve steepening - assumes an instantaneous steepening of the interest rate yield curve through a 88 2024 FORM 10-K ANNUAL REPORT ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents decrease in short-term rates and an increase in long-term rates.
Compliance Risk Management Compliance risk is the risk of legal or regulatory sanctions, material financial loss, or loss to reputation as a result of failure to comply with laws, regulations, rules, self-regulatory organization standards, and codes of conduct applicable to FHN’s activities.
Compliance Risk Management Compliance risk is the risk of legal or regulatory sanctions, material financial loss, or loss to reputation the Company may suffer as a result of its failure to comply with laws, regulations, rules, self-regulatory organization standards, and codes of conduct applicable to FHN’s activities.
FHN paid cash dividends of $1,625 per Series E preferred share and $1,175 per Series F preferred share on January 10, 2024 and $331.25 per Series B preferred share and $165 per Series C preferred share on February 1, 2024.
FHN paid cash dividends of $1,625 per Series E preferred share and $1,175 per Series F preferred share on January 10, 2025 and $331.25 per Series B preferred share and $165 per Series C preferred share on February 3, 2025.
Commercial Loan Modifications As part of FHN’s credit risk management governance processes, the Loan Rehab and Recovery Department (LRRD) 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.
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.
HELOCs comprised $2.2 billion and $2.0 billion of the consumer real estate portfolio for December 31, 2023 and 2022, respectively. FHN’s HELOCs typically have a 5 or 10 year draw period followed by a 10 or 20 year repayment period, respectively.
HELOCs comprised $2.1 billion and $2.2 billion of the consumer real estate portfolio for December 31, 2024 and 2023, respectively. FHN’s HELOCs typically have a 5 or 10 year draw period followed by a 10 or 20 year repayment period, respectively.
The largest geographical concentrations of balances in the consumer real estate portfolio as of December 31, 2023 were in Florida (29%), Tennessee (22%), Texas (11%), Louisiana (8%), North Carolina (7%), New York (5%), and Georgia (5%), with no other state representing 5% or more of the portfolio.
The largest geographical concentrations of balances in the consumer real estate portfolio as of December 31, 2024 were in Florida (29%), Tennessee (22%), Texas (12%), Louisiana (8%), North Carolina (7%), Georgia (6%), and New York (5%), with no other state representing 5% or more of the portfolio.
For any period, First Horizon Bank’s "retained net income" generally is equal to First Horizon Bank’s regulatory net income reduced by the preferred and common dividends declared by First Horizon Bank. Applying the dividend restrictions imposed under applicable federal and state rules as outlined above, the Bank’s total amount available for dividends was $1.2 billion as of January 1, 2024.
For any period, First Horizon Bank’s "retained net income" generally is equal to First Horizon Bank’s regulatory net income reduced by the preferred and common dividends declared by First Horizon Bank. Applying the dividend restrictions imposed under applicable federal and state rules as outlined above, the Bank’s total amount available for dividends was $374 million as of January 1, 2025.
A summary of FHN's VaR and SVaR measures for 1-day and 10-day time horizons is presented in the following table: 82 2023 FORM 10-K ANNUAL REPORT ITEM 7.
A summary of FHN's VaR and SVaR measures for 1-day and 10-day time horizons is presented in the following table. 87 2024 FORM 10-K ANNUAL REPORT ITEM 7.
The Credit Risk Management function, led by the Chief Credit Officer, provides strategic and tactical credit leadership by maintaining policies, overseeing credit approval, assessing new credit products, strategies and processes, and managing portfolio composition and performance.
The Credit Risk Management function, which is shared by the Chief Credit Officer and Chief Risk Officer, provides strategic and tactical credit leadership by maintaining policies, overseeing credit approval, assessing new credit products, strategies and processes, and managing portfolio composition and performance.
The following table provides a reconciliation of non-GAAP items presented in this MD&A to the most comparable GAAP presentation: 98 2023 FORM 10-K ANNUAL REPORT ITEM 7.
The following table provides a reconciliation of non-GAAP items presented in this MD&A to the most comparable GAAP presentation. 102 2024 FORM 10-K ANNUAL REPORT ITEM 7.
TPRM engages the IT Risk Working Group to perform cybersecurity assessments for new vendors during onboarding, re-assessments of existing vendors on a risk-based cadence, and continuous monitoring of critical third-parties. Board Oversight The Board's Risk Committee oversees all risk management functions for the enterprise, including op risk, IT risk, and cybersecurity risk.
TPRM engages the IT Risk and Control Team to perform cybersecurity assessments for new vendors during onboarding, re-assessments of existing vendors on a risk-based cadence, and continuous monitoring of critical third parties. Board Oversight The Board's Risk Committee oversees all risk management functions for the enterprise, including operational risk, IT risk, and cybersecurity risk.
MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents Table 7.21 VaR & SVaR MEASURES Year Ended December 31, 2023 As of December 31, 2023 (Dollars in millions) Mean High Low 1-day VaR $ 3 $ 4 $ 2 $ 3 SVaR 6 8 3 6 10-day VaR 8 11 4 10 SVaR 24 34 12 28 Year Ended December 31, 2022 As of December 31, 2022 (Dollars in millions) Mean High Low 1-day VaR $ 2 $ 4 $ 2 $ 3 SVaR 5 7 4 6 10-day VaR 8 11 3 10 SVaR 24 34 18 29 FHN’s overall VaR measure includes both interest rate risk and credit spread risk.
MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents Table 7.21 VaR & SVaR MEASURES Year Ended December 31, 2024 As of December 31, 2024 (Dollars in millions) Mean High Low 1-day VaR $ 3 $ 4 $ 2 $ 2 SVaR 7 9 4 6 10-day VaR 8 12 4 4 SVaR 32 43 21 31 Year Ended December 31, 2023 As of December 31, 2023 (Dollars in millions) Mean High Low 1-day VaR $ 3 $ 4 $ 2 $ 3 SVaR 6 8 3 6 10-day VaR 8 11 4 10 SVaR 24 34 12 28 FHN’s overall VaR measure includes both interest rate risk and credit spread risk.
Government. FHN’s investment securities portfolio consists principally of debt securities available for sale. FHN maintains a highly-rated securities portfolio consisting primarily of government agency 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.
Government. 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.
MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents 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 borrowings were $3.1 billion and $2.8 billion as of December 31, 2023 and December 31, 2022, respectively.
MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents 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 borrowings were $4.0 billion and $3.1 billion as of December 31, 2024 and 2023, respectively.
A summary of those results was posted in the “Fixed Income - Stress Test Results” section on FHN’s investor relations website on September 29, 2023. Neither FHN’s stress test posting, nor any other material found on FHN’s website generally, is part of this report or incorporated herein.
A summary of those results was posted in the “Fixed Income - Stress Test Results” section on FHN’s investor relations website on July 30, 2024. Neither FHN’s stress test posting, nor any other material found on FHN’s website generally, is part of this report or incorporated herein.
The following table shows the HELOCs currently in the draw period and expected timing of conversion to the repayment period. 68 2023 FORM 10-K ANNUAL REPORT ITEM 7.
The following table shows the HELOCs currently in the draw period and expected timing of conversion to the repayment period. 73 2024 FORM 10-K ANNUAL REPORT ITEM 7.
The largest geographical concentrations of balances as of December 31, 2023 were in Tennessee (21%), Florida (13%), Texas (11%), North Carolina (7%), Louisiana (6%), Georgia (5%), and California (5%) with no other state representing 5% or more of the portfolio. The following table provides the composition of the C&I portfolio by industry as of December 31, 2023 and 2022.
The largest geographical concentrations of balances as of December 31, 2024 were in Tennessee (20%), Florida (12%), Texas (11%), North Carolina (7%), California (6%), and Louisiana (6%) with no other state representing 5% or more of the portfolio. The following table provides the composition of the C&I portfolio by industry as of December 31, 2024 and 2023.
Operational Risk Management Operational risk is the risk of loss from inadequate or failed internal processes, people, or systems or from external events including data or network security breaches of FHN or of third parties affecting FHN or its clients. This risk is inherent in all businesses.
Operational Risk Management Operational risk is the risk of loss from inadequate or failed internal processes, people, or systems or from external events including data or network security breaches of FHN or of third parties affecting FHN or its clients.
For example, much of the growth in Florida has been along the coast moving out from older cities. A gulf coast hurricane 50 or 60 years ago had a fair chance of making landfall in a relatively unpopulated area.
For example, much of the growth in Florida has been along the coast. A gulf coast hurricane 50 or 60 years ago had a fair chance of making landfall in a relatively unpopulated area.
Generally, new loan originations to mortgage lenders increase when there is a decline in mortgage rates and decrease when rates rise; in 2023, rates rose. In periods of economic uncertainty, this trend may not occur even if interest rates are declining. In 2023, approximately 90% of the loan originations were home purchases and 10% were refinance transactions.
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 2024, approximately 78% of the loan originations were home purchases and 22% were refinance transactions.
C&I C&I loans are the largest component of the loan and lease portfolio, comprising 53% and 55% of total loans and leases at December 31, 2023 and 2022, respectively. The C&I portfolio is comprised of loans used for general business purposes.
C&I C&I loans are the largest component of the loan and lease portfolio, comprising 53% of total loans and leases at both December 31, 2024 and 2023. The C&I portfolio is comprised of loans used for general business purposes.
(b) Last change in ratings was on May 6, 2020. Outlook changed to stable (“Stable”) and ratings affirmed on May 5, 2023. (c) Ratings are preliminary/implied. Repurchase Obligations Prior to September 2008, legacy First Horizon originated loans through its pre-2009 mortgage business, primarily first lien home loans, with the intention of selling them.
(b) Last change in ratings was on October 3, 2024. Outlook changed to stable ("Stable") on May 5, 2023. (c) Ratings are preliminary/implied. Repurchase Obligations Prior to September 2008, legacy First Horizon originated loans through its pre-2009 mortgage business, primarily first lien home loans, with the intention of selling them.
MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) Table of Contents Greenhouse Gas (GHG) Reporting Regimes In October 2023 the state of California enacted two laws which, taken together, will require most larger companies doing business in California to report annually their greenhouse gas ("GHG") emissions, with an external assurance requirement, and to report biennially their climate-related financial risks and risk-mitigation measures.
Greenhouse Gas (GHG) Reporting Regimes In October 2023, the state of California enacted laws which, taken together, will require most larger companies doing business in California to report annually their greenhouse gas ("GHG") emissions, with an external assurance requirement, and to report biennially their climate-related financial risks and risk-mitigation measures.
Based on when draw periods are scheduled to end per the line agreement, it is expected that $571 million, or 27%, of HELOCs currently in the draw period will enter the repayment period during the next 60 months, based on current terms.
Based on when draw periods are scheduled to end per the line agreements, it is expected that $598 million, or 30%, of HELOCs currently in the draw period will enter the repayment period during the next 60 months, based on current terms.
Held-for-sale consumer mortgage loans secured by residential real estate in process of foreclosure totaled $2 million and $3 million for December 31, 2023 and 2022, respectively. 64 2023 FORM 10-K ANNUAL REPORT ITEM 7.
Held-for-sale consumer mortgage loans secured by residential real estate in process of foreclosure totaled $1 million and $2 million for December 31, 2024 and 2023, respectively. 69 2024 FORM 10-K ANNUAL REPORT ITEM 7.
Preferred stock Ba1 A rating is not a recommendation to buy, sell, or hold securities and is subject to revision or withdrawal at any time and should be evaluated independently of any other rating. (a) Last change in ratings was on May 14, 2015. Outlook changed to negative (“NEG”) and ratings affirmed on May 5, 2023.
Preferred stock Ba1 A rating is not a recommendation to buy, sell, or hold securities and is subject to revision or withdrawal at any time and should be evaluated independently of any other rating. (a) Last change in ratings was on May 14, 2015. Outlook changed to stable ("Stable") and ratings affirmed on June 25, 2024.
As of December 31, 2023, 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 December 31, 2023, no significant change from FICO scores of 757 and 754, respectively, as of December 31, 2022.
As of December 31, 2024, 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 December 31, 2024, no change from those as of December 31, 2023.
That population growth generally has been accompanied by economic growth. Many of FHN's fastest growing markets, including most significantly those in Florida, can be impacted significantly by hurricanes and other severe coastal weather events. As those markets grow, FHN's economic commitment to them grows, as does FHN's financial exposure to those events.
Many of FHN's fastest growing markets, including most significantly those in Florida, can be impacted significantly by hurricanes and other severe coastal weather events. As those markets grow, FHN's economic commitment to them grows, as does FHN's financial exposure to those events.
Separate measures of these component risks are as follows: Table 7.22 SCHEDULE OF RISKS INCLUDED IN VaR As of December 31, 2023 As of December 31, 2022 (Dollars in millions) 1-day 10-day 1-day 10-day Interest rate risk $ 1 $ 2 $ 1 $ 3 Credit spread risk 1 1 1 2 The potential risk of loss reflected by FHN’s VaR measures assumes the trading securities inventory is static.
Table 7.22 SCHEDULE OF RISKS INCLUDED IN VaR As of December 31, 2024 As of December 31, 2023 (Dollars in millions) 1-day 10-day 1-day 10-day Interest rate risk $ 1 $ 2 $ 1 $ 2 Credit spread risk — 1 1 1 The potential risk of loss reflected by FHN’s VaR measures assumes the trading securities inventory is static.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents CONSOLIDATED STATEMENTS OF INCOME Consolidated Statements of Income Year Ended December 31 (Dollars in millions, except per share data; shares in thousands) 2023 2022 2021 Interest income Interest and fees on loans and leases $ 3,575 $ 2,292 $ 1,957 Interest and fees on loans held for sale 51 39 33 Interest on investment securities 247 198 121 Interest on trading securities 78 58 30 Interest on other earning assets 149 96 17 Total interest income 4,100 2,683 2,158 Interest expense Interest on deposits 1,266 184 81 Interest on trading liabilities 12 12 6 Interest on short-term borrowings 210 23 5 Interest on term borrowings 72 72 72 Total interest expense 1,560 291 164 Net interest income 2,540 2,392 1,994 Provision (benefit) for credit losses 260 95 (310) Net interest income after provision for credit losses 2,280 2,297 2,304 Noninterest income Deposit transactions and cash management 179 171 175 Fixed income 133 205 406 Brokerage, management fees and commissions 90 92 88 Card and digital banking fees 77 84 78 Other service charges and fees 54 54 44 Trust services and investment management 47 48 51 Mortgage banking and title income 23 68 154 Gain on merger termination 225 — — Securities gains (losses), net (4) 18 13 Other income 103 75 67 Total noninterest income 927 815 1,076 Noninterest expense Personnel expense 1,100 1,101 1,210 Net occupancy expense 123 128 137 Deposit insurance expense 122 32 24 Computer software 111 113 116 Operations services 87 87 80 Advertising and public relations 71 50 37 Contributions 61 7 14 Legal and professional fees 49 62 68 Contract employment and outsourcing 49 54 67 Amortization of intangible assets 47 51 56 Equipment expense 42 45 47 Communications and delivery 35 37 37 Impairment of long-lived assets — — 34 Other expense 182 186 169 Total noninterest expense 2,079 1,953 2,096 109 2023 FORM 10-K ANNUAL REPORT ITEM 8.
Biggest changeFINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents CONSOLIDATED STATEMENTS OF INCOME Consolidated Statements of Income Year Ended December 31 (Dollars in millions, except per share data; shares in thousands) 2024 2023 2022 Interest income Interest and fees on loans and leases $ 3,874 $ 3,575 $ 2,292 Interest and fees on loans held for sale 36 51 39 Interest on investment securities 241 247 198 Interest on trading securities 85 78 58 Interest on other earning assets 116 149 96 Total interest income 4,352 4,100 2,683 Interest expense Interest on deposits 1,620 1,266 184 Interest on trading liabilities 24 12 12 Interest on short-term borrowings 130 210 23 Interest on term borrowings 67 72 72 Total interest expense 1,841 1,560 291 Net interest income 2,511 2,540 2,392 Provision for credit losses 150 260 95 Net interest income after provision for credit losses 2,361 2,280 2,297 Noninterest income Fixed income 187 133 205 Deposit transactions and cash management 176 179 171 Brokerage, management fees and commissions 101 90 92 Card and digital banking fees 77 77 84 Other service charges and fees 51 54 54 Trust services and investment management 48 47 48 Mortgage banking income 35 23 68 Gain on merger termination — 225 — Securities gains (losses), net (89) (4) 18 Other income 93 103 75 Total noninterest income 679 927 815 Noninterest expense Personnel expense 1,137 1,100 1,101 Net occupancy expense 130 123 128 Computer software 121 111 113 Operations services 94 87 87 Deposit insurance expense 64 122 32 Legal and professional fees 64 49 62 Contract employment and outsourcing 51 49 54 Advertising and public relations 48 71 50 Amortization of intangible assets 44 47 51 Equipment expense 42 42 45 Communications and delivery 32 35 37 Contributions 18 61 7 Other expense 190 182 186 Total noninterest expense 2,035 2,079 1,953 Income before income taxes 1,005 1,128 1,159 113 2024 FORM 10-K ANNUAL REPORT ITEM 8.
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents OPINION ON CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors First Horizon Corporation: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of First Horizon Corporation and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents OPINION ON CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors First Horizon Corporation: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of First Horizon Corporation and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents OPINION ON ICOFR Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors First Horizon Corporation: Opinion on Internal Control Over Financial Reporting We have audited First Horizon Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents OPINION ON ICOFR Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors First Horizon Corporation: Opinion on Internal Control Over Financial Reporting We have audited First Horizon Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Further, because of changes in conditions, the effectiveness of internal controls may diminish over time. Management assessed the effectiveness of First Horizon Corporation’s internal control over financial reporting as of December 31, 2023. This assessment was based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Further, because of changes in conditions, the effectiveness of internal controls may diminish over time. Management assessed the effectiveness of First Horizon Corporation’s internal control over financial reporting as of December 31, 2024. This assessment was based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in: • evaluating the Company’s collective ALLL methodology for compliance with U.S. generally accepted accounting principles • evaluating judgments made by the Company relative to the performance testing of the PD, LGD, and prepayment models by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices • assessing the conceptual soundness and performance testing of the PD, LGD, and prepayment models by inspecting the model documentation to determine whether the models are suitable for their intended use • evaluating the selection of the economic forecast scenarios and the weighting applied to each scenario by comparing them to the Company’s business environment and relevant industry practices 106 2023 FORM 10-K ANNUAL REPORT ITEM 8.
In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in: • evaluating the Company’s collective ALLL methodology for compliance with U.S. generally accepted accounting principles • evaluating judgments made by the Company relative to the performance testing of the PD, LGD, and prepayment models by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices • assessing the conceptual soundness and performance testing of the PD, LGD, and prepayment models by inspecting the model documentation to determine whether the models are suitable for their intended use • evaluating the selection of the economic forecast scenarios and the weighting applied to each scenario by comparing them to the Company’s business environment and relevant industry practices 110 2024 FORM 10-K ANNUAL REPORT ITEM 8.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
Based on our assessment and those criteria, management believes that First Horizon Corporation maintained effective internal control over financial reporting as of December 31, 2023. KPMG LLP, the independent registered public accounting firm that audited First Horizon Corporation's financial statements, issued an audit report on First Horizon Corporation’s internal control over financial reporting.
Based on our assessment and those criteria, management believes that First Horizon Corporation maintained effective internal control over financial reporting as of December 31, 2024. KPMG LLP, the independent registered public accounting firm that audited First Horizon Corporation's financial statements, issued an audit report on First Horizon Corporation’s internal control over financial reporting.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated February 22, 2024 expressed an unqualified opinion on those consolidated financial statements.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2025 expressed an unqualified opinion on those consolidated financial statements.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Assessment of the allowance for loan losses for loans collectively evaluated for impairment As discussed in Notes 1 and 4 to the consolidated financial statements, the Company’s total allowance for loan losses as of December 31, 2023 was $773 million, of which a portion related to the allowance for loan losses for loans collectively evaluated for impairment (the collective ALLL).
Assessment of the allowance for loan losses for loans collectively evaluated for impairment As discussed in Notes 1 and 4 to the consolidated financial statements, the Company’s total allowance for loan losses as of December 31, 2024 was $815 million, of which a portion related to the allowance for loan losses for loans collectively evaluated for impairment (the collective ALLL).
Quantitative and Qualitative Disclosures About Market Risk The information called for by this Item is incorporated herein by reference to: 2023 MD&A (Item 7), which begins on page 54 of this report; Note 21—Derivatives, which begins on page 178 of this report; and Note 22—Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions, which begins on page 185 of this report.
Quantitative and Qualitative Disclosures About Market Risk The information called for by this Item is incorporated herein by reference to: 2024 MD&A (Item 7), which begins on page 57 of this report; Note 21—Derivatives, which begins on page 185 of this report; and Note 22—Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions, which begins on page 192 of this report.
Within 2023 MD&A, these sections are especially pertin ent to this Item 7A: Market Risk Management and Interest Rate Risk Management which begin, respectively, on pages 82 and 84 of this report. Notes 21 and 22 are part of our 2023 Financial Statements (Item 8). 100 2023 FORM 10-K ANNUAL REPORT ITEM 8.
Within 2024 MD&A, these sections are especially pertin ent to this Item 7A: Market Risk Management and Interest Rate Risk Management which begin, respectively, on pages 87 and 89 of this report. Notes 21 and 22 are part of our 2024 Financial Statements (Item 8). 104 2024 FORM 10-K ANNUAL REPORT ITEM 8.
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents ITEM 8 TOPICS Note 19 Business Segment Information 172 Note 20 Variable Interest Entities 175 Note 21 Derivatives 178 Note 22 Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions 185 Note 23 Fair Value of Assets and Liabilities 187 Note 24 Parent Company Financial Information 202 102 2023 FORM 10-K ANNUAL REPORT ITEM 8.
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents ITEM 8 TOPICS Note 19 Business Segment Information 175 Note 20 Variable Interest Entities 182 Note 21 Derivatives 185 Note 22 Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions 192 Note 23 Fair Value of Assets and Liabilities 194 Note 24 Parent Company Financial Information 209 106 2024 FORM 10-K ANNUAL REPORT ITEM 8.
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Consolidated Statements of Comprehensive Income Year Ended December 31 (Dollars in millions) 2023 2022 2021 Net income $ 916 $ 912 $ 1,010 Other comprehensive income (loss), net of tax: Net unrealized gains (losses) on securities available for sale 137 (937) (144) Net unrealized gains (losses) on cash flow hedges 47 (129) (10) Net unrealized gains (losses) on pension and other postretirement plans (4) (14) 6 Other comprehensive income (loss) 180 (1,080) (148) Comprehensive income (loss) 1,096 (168) 862 Comprehensive income attributable to noncontrolling interest 19 12 11 Comprehensive income (loss) attributable to controlling interest $ 1,077 $ (180) $ 851 Income tax expense (benefit) of items included in other comprehensive income: Net unrealized gains (losses) on securities available for sale $ 44 $ (302) $ (46) Net unrealized gains (losses) on cash flow hedges 15 (42) (3) Net unrealized gains (losses) on pension and other postretirement plans (1) (5) 2 See accompanying notes to consolidated financial statements. 111 2023 FORM 10-K ANNUAL REPORT
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Consolidated Statements of Comprehensive Income (Loss) Year Ended December 31 (Dollars in millions) 2024 2023 2022 Net income $ 794 $ 916 $ 912 Other comprehensive income (loss), net of tax: Net unrealized gains (losses) on securities available for sale 54 137 (937) Net unrealized gains (losses) on cash flow hedges (14) 47 (129) Net unrealized gains (losses) on pension and other postretirement plans 20 (4) (14) Other comprehensive income (loss) 60 180 (1,080) Comprehensive income (loss) 854 1,096 (168) Comprehensive income attributable to noncontrolling interest 19 19 12 Comprehensive income (loss) attributable to controlling interest $ 835 $ 1,077 $ (180) Income tax expense (benefit) of items included in other comprehensive income: Net unrealized gains (losses) on securities available for sale $ 17 $ 44 $ (302) Net unrealized gains (losses) on cash flow hedges (5) 15 (42) Net unrealized gains (losses) on pension and other postretirement plans 7 (1) (5) See accompanying notes to consolidated financial statements. 115 2024 FORM 10-K ANNUAL REPORT
That report appears on the following page. 103 2023 FORM 10-K ANNUAL REPORT ITEM 8.
That report appears on the following page. 107 2024 FORM 10-K ANNUAL REPORT ITEM 8.
Financial Statements and Supplementary Data TABLE OF ITEM 8 TOPICS Report of Management on Internal Control Over Financial Reporting 103 Report of Independent Registered Public Accounting Firm 104 Consolidated Balance Sheets 108 Consolidated Statements of Income 109 Consolidated Statements of Comprehensive Income 111 Consolidated Statements of Changes in Equity 112 Consolidated Statements of Cash Flows 113 Notes to the Consolidated Financial Statements 115 Note 1 Significant Accounting Policies 115 Note 2 Investment Securities 128 Note 3 Loans and Leases 131 Note 4 Allowance for Credit Losses 140 Note 5 Premises, Equipment, and Leases 143 Note 6 Goodwill and Other Intangible Assets 146 Note 7 Mortgage Banking Activity 147 Note 8 Deposits 148 Note 9 Short-Term Borrowings 149 Note 10 Term Borrowings 150 Note 11 Preferred Stock 152 Note 12 Regulatory Capital and Restrictions 154 Note 13 Components of Other Comprehensive Income (Loss) 156 Note 14 Income Taxes 157 Note 15 Earnings Per Share 161 Note 16 Contingencies and Other Disclosures 162 Note 17 Retirement Plans and Other Employee Benefits 164 Note 18 Stock Options, Restricted Stock, and Dividend Reinvestment Plans 169 101 2023 FORM 10-K ANNUAL REPORT ITEM 8.
Financial Statements and Supplementary Data TABLE OF ITEM 8 TOPICS Report of Management on Internal Control o ver Financial Reporting 107 Report of Independent Registered Public Accounting Firm 108 Consolidated Balance Sheets 112 Consolidated Statements of Income 113 Consolidated Statements of Comprehensive Income (Loss) 115 Consolidated Statements of Changes in Equity 116 Consolidated Statements of Cash Flows 117 Notes to the Consolidated Financial Statements 119 Note 1 Significant Accounting Policies 119 Note 2 Investment Securities 132 Note 3 Loans and Leases 135 Note 4 Allowance for Credit Losses 144 Note 5 Premises, Equipment, and Leases 147 Note 6 Goodwill and Other Intangible Assets 150 Note 7 Mortgage Banking Activity 151 Note 8 Deposits 152 Note 9 Short-Term Borrowings 153 Note 10 Term Borrowings 154 Note 11 Preferred Stock 156 Note 12 Regulatory Capital and Restrictions 157 Note 13 Components of Other Comprehensive Income (Loss) 159 Note 14 Income Taxes 160 Note 15 Earnings Per Share 164 Note 16 Contingencies and Other Disclosures 165 Note 17 Retirement Plans and Other Employee Benefits 167 Note 18 Stock Options and Restricted Stock 172 105 2024 FORM 10-K ANNUAL REPORT ITEM 8.
The Company estimated the collective ALLL using a current expected credit losses methodology which is based on internal and external information relating to past events, current conditions, and reasonable and supportable forecasts of future conditions that affect the collectability of future cash flows.
The Company estimated the collective ALLL using a current expected credit losses methodology which is based on internal and external information relating to past events, current conditions, and reasonable and supportable forecasts of future conditions that affect the collectability of future cash flows. The expected credit losses are the product of multiplying 109 2024 FORM 10-K ANNUAL REPORT ITEM 8.
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents CONSOLIDATED STATEMENTS OF INCOME Income before income taxes 1,128 1,159 1,284 Income tax expense 212 247 274 Net income $ 916 $ 912 $ 1,010 Net income attributable to noncontrolling interest 19 12 11 Net income attributable to controlling interest $ 897 $ 900 $ 999 Preferred stock dividends 32 32 37 Net income available to common shareholders $ 865 $ 868 $ 962 Basic earnings per share $ 1.58 $ 1.62 $ 1.76 Diluted earnings per share $ 1.54 $ 1.53 $ 1.74 Weighted average common shares 548,410 535,033 546,354 Diluted average common shares 561,732 566,004 551,241 See accompanying notes to consolidated financial statements. 110 2023 FORM 10-K ANNUAL REPORT ITEM 8.
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents CONSOLIDATED STATEMENTS OF INCOME Income tax expense 211 212 247 Net income $ 794 $ 916 $ 912 Net income attributable to noncontrolling interest 19 19 12 Net income attributable to controlling interest $ 775 $ 897 $ 900 Preferred stock dividends 37 32 32 Net income available to common shareholders $ 738 $ 865 $ 868 Basic earnings per share $ 1.37 $ 1.58 $ 1.62 Diluted earnings per share $ 1.36 $ 1.54 $ 1.53 Weighted average common shares 540,317 548,410 535,033 Diluted average common shares 544,285 561,732 566,004 See accompanying notes to consolidated financial statements. 114 2024 FORM 10-K ANNUAL REPORT ITEM 8.
The expected credit losses are the product of multiplying the Company’s estimates of probability of default (PD), loss given default (LGD), and individual loan level exposure at 105 2023 FORM 10-K ANNUAL REPORT ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents OPINION ON CONSOLIDATED FINANCIAL STATEMENTS default (EAD), including amortization and prepayment assumptions, on an undiscounted basis.
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents OPINION ON CONSOLIDATED FINANCIAL STATEMENTS the Company’s estimates of probability of default (PD), loss given default (LGD), and individual loan level exposure at default (EAD), including amortization and prepayment assumptions, on an undiscounted basis.
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents CONSOLIDATED BALANCE SHEETS Consolidated Balance Sheets December 31, (Dollars in millions, except per share amounts) 2023 2022 Assets Cash and due from banks $ 1,012 $ 1,061 Interest-bearing deposits with banks 1,328 1,384 Federal funds sold and securities purchased under agreements to resell 719 482 Trading securities 1,412 1,375 Securities available for sale at fair value 8,391 8,836 Securities held to maturity (fair value of $1,161 and $1,209 , respectively) 1,323 1,371 Loans held for sale (including $68 and $51 at fair value, respectively) 502 590 Loans and leases 61,292 58,102 Allowance for loan and lease losses (773) (685) Net loans and leases 60,519 57,417 Premises and equipment 590 612 Goodwill 1,510 1,511 Other intangible assets 186 234 Other assets 4,169 4,080 Total assets $ 81,661 $ 78,953 Liabilities Noninterest-bearing deposits $ 17,204 $ 23,466 Interest-bearing deposits 48,576 40,023 Total deposits 65,780 63,489 Trading liabilities 509 335 Short-term borrowings 2,549 2,506 Term borrowings 1,150 1,597 Other liabilities 2,382 2,479 Total liabilities 72,370 70,406 Equity Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 26,750 and 31,686 shares, respectively 520 1,014 Common stock, $0.625 par value; authorized 700,000,000 shares; issued 558,838,694 and 537,100,615 shares, respectively 349 336 Capital surplus 5,351 4,840 Retained earnings 3,964 3,430 Accumulated other comprehensive loss, net (1,188) (1,368) FHN shareholders' equity 8,996 8,252 Noncontrolling interest 295 295 Total equity 9,291 8,547 Total liabilities and equity $ 81,661 $ 78,953 See accompanying notes to consolidated financial statements. 108 2023 FORM 10-K ANNUAL REPORT ITEM 8.
FINANCIAL STATEMENTS & SUPPLEMENTARY DATA Table of Contents CONSOLIDATED BALANCE SHEETS Consolidated Balance Sheets December 31, (Dollars in millions, except per share amounts) 2024 2023 Assets Cash and due from banks $ 906 $ 1,012 Interest-bearing deposits with banks 1,538 1,328 Federal funds sold and securities purchased under agreements to resell 631 719 Trading securities 1,387 1,412 Securities available for sale at fair value 7,896 8,391 Securities held to maturity (fair value of $1,083 and $1,161, respectively) 1,270 1,323 Loans held for sale (including $85 and $68 at fair value, respectively) 551 502 Loans and leases 62,565 61,292 Allowance for loan and lease losses (815) (773) Net loans and leases 61,750 60,519 Premises and equipment 574 590 Goodwill 1,510 1,510 Other intangible assets 143 186 Other assets 3,996 4,169 Total assets $ 82,152 $ 81,661 Liabilities Noninterest-bearing deposits $ 16,021 $ 17,204 Interest-bearing deposits 49,560 48,576 Total deposits 65,581 65,780 Trading liabilities 550 509 Short-term borrowings 3,400 2,549 Term borrowings 1,195 1,150 Other liabilities 2,315 2,382 Total liabilities 73,041 72,370 Equity Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 16,750 and 26,750 shares, respectively 426 520 Common stock, $0.625 par value; authorized 700,000,000 shares; issued 524,280,412 and 558,838,694 shares, respectively 328 349 Capital surplus 4,808 5,351 Retained earnings 4,382 3,964 Accumulated other comprehensive loss, net (1,128) (1,188) FHN shareholders' equity 8,816 8,996 Noncontrolling interest 295 295 Total equity 9,111 9,291 Total liabilities and equity $ 82,152 $ 81,661 See accompanying notes to consolidated financial statements. 112 2024 FORM 10-K ANNUAL REPORT ITEM 8.
Memphis, Tennessee February 22, 2024 104 2023 FORM 10-K ANNUAL REPORT ITEM 8.
Memphis, Tennessee February 27, 2025 108 2024 FORM 10-K ANNUAL REPORT ITEM 8.
Memphis, Tennessee February 22, 2024 107 2023 FORM 10-K ANNUAL REPORT ITEM 8.
Memphis, Tennessee February 27, 2025 111 2024 FORM 10-K ANNUAL REPORT ITEM 8.

Other FHN 10-K year-over-year comparisons