UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

- or -

☐	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to__________

Commission File Number: 001-15185

(Exact name of registrant as specified in its charter)

TN			62-0803242
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
165 Madison Avenue
Memphis,	Tennessee		38103
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code:  901-523-4444

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
$.625 Par Value Common Capital Stock	FHN	New York Stock Exchange LLC
Depositary Shares, each representing a 1/400th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series C	FHN PR C	New York Stock Exchange LLC
Depositary Shares, each representing a 1/4,000th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series E	FHN PR E	New York Stock Exchange LLC
Depositary Shares, each representing a 1/4,000th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series F	FHN PR F	New York Stock Exchange LLC

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☒ Yes ☐ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. 

☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such

reports), and (2) has been subject to such filing requirements for the past 90 days.  ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted

pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period

that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller

reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller

reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer	☒		Accelerated filer	☐		Non-accelerated filer	☐
Smaller reporting company	☐		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the

effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))

by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the

registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-

based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to

§240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

At June 30, 2025, the aggregate market value of registrant common stock held by non-affiliates of the registrant was

approximately $10.7 billion based on the closing stock price reported for that date.

At January 30, 2026, the registrant had 483,188,645 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Proxy Statement to be furnished to shareholders in connection with the annual meeting of shareholders

scheduled for April 28, 2026 or provided in an amendment to this Annual Report: Part III of this Report

Auditor Name:KPMG LLPAuditor Location:  Memphis, TNAuditor Firm ID: 185

   

	1	2025 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS and GLOSSARY

Table of Contents

		Page
Glossary		2
Forward-Looking Statements		4
Part I
Item 1.	Business	5
Item 1A.	Risk Factors	21
Item 1B.	Unresolved Staff Comments	34
Item 1C.	Cybersecurity	35
Item 2.	Properties	35
Item 3.	Legal Proceedings	35
Item 4.	Mine Safety Disclosures	35
Supplemental Part I Information		36
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	38
Item 6.	[Reserved]	39
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	84
Item 8.	Financial Statements and Supplementary Data	85
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	186
Item 9A.	Controls and Procedures	186
Item 9B.	Other Information	186
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	186
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	187
Item 11.	Executive Compensation	189
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	190
Item 13.	Certain Relationships and Related Transactions, and Director Independence	191
Item 14.	Principal Accountant Fees and Services	191
Part IV
Item 15.	Exhibits and Financial Statement Schedules	192
Item 16.	Form 10-K Summary	196
Signatures		197

MD&A and Financial Statement References:

In this report: "2025 MD&A" and "2025 MD&A (Item 7)" generally refer to Management’s Discussion and Analysis of Financial

Condition and Results of Operations appearing in Item 7 within Part II of this report; and "2025 Financial Statements" and

"2025 Financial Statements (Item 8)" generally refer to our Consolidated Balance Sheets, our Consolidated Statements of

Income, our Consolidated Statements of Comprehensive Income (Loss), our Consolidated Statements of Changes in Equity,

our Consolidated Statements of Cash Flows, and the Notes to the Consolidated Financial Statements, all appearing in Item 8

within Part II of this report.

   

	2	2025 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS and GLOSSARY

Glossary

The following is a list of common acronyms and terms used throughout this report:

ACL	Allowance for credit losses
AFS	Available for sale
AIR	Accrued interest receivable
ALCO	Asset/Liability Committee
ALLL	Allowance for loan and lease losses
ALM	Asset/liability management
AOCI	Accumulated other comprehensive income
ASC	FASB Accounting Standards Codification
Associate	Person employed by FHN
ASU	Accounting Standards Update
ATM	Automated teller machine
Bank	First Horizon Bank
BHCA	Bank Holding Company Act of 1956
BOLI	Bank-owned life insurance
C&I	Commercial, financial, and industrial loan portfolio
CAS	Credit Assurance Services
CBF	Capital Bank Financial
CECL	Current expected credit loss
CEO	Chief Executive Officer
CFPB	Consumer Financial Protection Bureau
CIO	Chief Information Officer
CME	Chicago Mercantile Exchange
CMO	Collateralized mortgage obligations
CODM	Chief Operating Decision-Maker
Company	First Horizon Corporation
Corporation	First Horizon Corporation
CRA	Community Reinvestment Act
CRE	Commercial Real Estate
CRMC	Credit Risk Management Committee
CSIRP	Computer Security Incident Response Plan
DIF	Deposit Insurance Fund
DTA	Deferred tax asset
DTL	Deferred tax liability
EAD	Exposure at default
ECP	Equity Compensation Plan
EPS	Earnings per share
ETR	Effective tax rate
Fannie Mae	Federal National Mortgage Association
FASB	Financial Accounting Standards Board
FCRA	Fair Credit Reporting Act
FDIA	Federal Deposit Insurance Act
FDIC	Federal Deposit Insurance Corporation

Federal Reserve	Federal Reserve Board
Fed	Federal Reserve Board
FHA	Federal Housing Administration
FHLB	Federal Home Loan Bank
FHN	First Horizon Corporation
FHNF	FHN Financial; FHN's fixed income division
FICO	Fair Isaac Corporation
First Horizon	First Horizon Corporation
FRB	Federal Reserve Bank or the Federal Reserve Board
Freddie Mac	Federal Home Loan Mortgage Corporation
FTE	Fully taxable equivalent
FTP	Funds transfer pricing
FTRESC	FT Real Estate Securities Company, Inc.
GAAP	Generally accepted accounting principles (U.S.)
GHG	Greenhouse Gas
GNMA	Government National Mortgage Association or Ginnie Mae
GSE	Government sponsored enterprises, in this filing references Fannie Mae and Freddie Mac
HELOC	Home equity line of credit
HFS	Held for sale
HR	Human Resources
HTM	Held to maturity
IBKC	IBERIABANK Corporation
IBKC merger	FHN's merger of equals with IBKC that closed July 2020
ISDA	International Swap and Derivatives Association
LGD	Loss given default
LIBOR	London Inter-Bank Offered Rate
LIHTC	Low Income Housing Tax Credit
LLC	Limited Liability Company
LMC	Loans to mortgage companies
LMI	Low- and moderate-income
LOCOM	Lower of cost or market
LTV	Loan-to-value
MBS	Mortgage-backed securities
MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations
NAICS	North American Industry Classification System
NII	Net interest income

   

	3	2025 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS and GLOSSARY

NIM	Net interest margin
NM	Not meaningful
NMTC	New Market Tax Credit
NOL	Net operating loss
NPA	Nonperforming asset
NPL	Nonperforming loan
NYSE	New York Stock Exchange
OCI	Other comprehensive income
OREO	Other Real Estate Owned
PAM	Proportional amortization method
PCA	Prompt corrective action
PCAOB	Public Company Accounting Oversight Board
PCD	Purchased credit deteriorated financial assets
PCI-DSS	Payment Card Industry Data Security Standard
PD	Probability of default
PM	Portfolio managers
PPNR	Pre-provision net revenue
PSU	Performance Stock Unit
PTNI	Pre-tax net income
RE	Real estate
RM	Relationship managers
ROU	Right-of-use
RWA	Risk-weighted assets
SAD	Special Assets Department
SBA	Small Business Administration
SEC	Securities and Exchange Commission
SOFR	Secure Overnight Funding Rate
SOX	Sarbanes-Oxley Act of 2002
SVaR	Stressed Value-at-Risk
TD	The Toronto-Dominion Bank
TD Merger Agreement	Merger agreement between FHN, TD, and certain TD subsidiaries, which the parties mutually terminated on May 4, 2023
TD Transaction	The acquisition of FHN by TD contemplated by the TD Merger Agreement
TDFI	Tennessee Department of Financial Institutions
TPRM	Third-Party Risk Management
TRUP	Trust preferred loan
UPB	Unpaid principal balance
USDA	United States Department of Agriculture
U.S.	United States
VaR	Value-at-Risk
VIE	Variable Interest Entities
we/us/our	First Horizon Corporation

   

	4	2025 FORM 10-K ANNUAL REPORT

FORWARD-LOOKING STATEMENTS
Table of Contents

Forward-Looking Statements

This report, including materials incorporated into it,

contains forward-looking statements within the meaning

of the Private Securities Litigation Reform Act of 1995,

Section 27A of the Securities Act of 1933, as amended,

and Section 21E of the Securities Exchange Act of 1934, as

amended, with respect to FHN's beliefs, plans, goals,

expectations, and estimates. Forward-looking statements

are not a representation of historical information, but

instead pertain to future operations, strategies, financial

results or other developments. Forward-looking

statements often use words such as “believe,” “expect,”

“anticipate,” “intend,” “estimate,” “should,” “is likely,”

“will,” “going forward,” and other similar expressions that

indicate future events and trends.

Forward-looking statements are necessarily based upon

estimates and assumptions that are inherently subject to

significant business, operational, economic, and

competitive uncertainties and contingencies, many of

which are beyond our control, and many of which, with

respect to future business decisions and actions (including

acquisitions and divestitures), are subject to change and

could cause our actual future results and outcomes to

differ materially from those contemplated by forward-

looking statements or historical performance. While there

is no assurance that any list of uncertainties and

contingencies is complete, examples of factors which

could cause actual results to differ from those

contemplated by forward-looking statements or historical

performance include:

• global, national, and local economic and business

conditions, including economic recession or

depression;

• the stability or volatility of values and activity in the

residential housing and commercial real estate

markets;

• expectations of and actual timing and amount of

interest rate movements, including the slope and

shape of the yield curve, which can have a significant

impact on a financial services institution;

• market and monetary fluctuations, including

fluctuations in mortgage markets;

• the financial condition of borrowers and other

counterparties;

• the financial condition and stability of major financial

and market participants, including private financial

institutions as well as governments and governmental

agencies;

• competition within and outside the financial services

industry;

• the occurrence of natural or man-made disasters,

pandemics, conflicts, or terrorist attacks, or other

adverse external events;

• effectiveness and cost-efficiency of FHN’s hedging

practices;

• fraud, theft, or other incursions through conventional,

electronic, or other means directly or indirectly

affecting FHN or its clients, business counterparties,

or competitors;

• the ability to adapt products and services to changing

industry standards and client preferences;

• risks inherent in originating, selling, servicing, and

holding loans and loan-based assets, including

prepayment risks, pricing concessions, fluctuation in

U.S. housing and other real estate prices, fluctuation

of collateral values, and changes in client profiles;

• changes in the regulation of the U.S. financial services

industry;

• changes in laws, regulations, and administrative

actions, including executive orders, whether or not

specific to the financial services industry;

• changes in trade policies, including the imposition of

tariffs and retaliatory responses;

• potential claims alleging mortgage servicing failures,

individually, on a class basis, or as master servicer of

securitized loans;

• potential claims relating to participation in

government programs, especially lending or other

financial services programs;

• changes in accounting policies, standards, and

interpretations;

• evolving capital and liquidity standards under

applicable regulatory rules;

• accounting policies and processes that require

management to make estimates about matters that

are uncertain; and

• other factors that may affect future results of FHN.

Any forward-looking statements made by or on behalf of

FHN speak only as of the date they are made, and FHN

assumes no obligation to update or revise any forward-

looking statements that are made in this report or in any

other statement, release, report, or filing from time to

time. Actual results could differ and expectations could

change, possibly materially, because of one or more

factors, including those factors listed above or presented

elsewhere in this report, those factors listed in material

incorporated by reference into this report, and other

factors not listed. In evaluating forward-looking

statements and assessing our prospects, readers of this

report should carefully consider the factors mentioned

above along with the additional risks and factors discussed

in Items 1, 1A, and 7 of this report, among others. Readers

should also consult any further disclosures of a forward-

looking nature in any subsequent Annual Reports on Form

10-K, Quarterly Reports on Form 10-Q, or Current Reports

on Form 8-K.

   

	5	2025 FORM 10-K ANNUAL REPORT

ITEM 1. BUSINESS
Table of Contents

PART  I

Item 1.Business

Our Businesses

General

First Horizon Corporation is a Tennessee corporation. We

incorporated in 1968, and are headquartered in Memphis,

Tennessee. We are registered as a bank holding company

and have elected to be treated as a financial holding

company. Our common stock is listed on the New York

Stock Exchange under the symbol “FHN.” At December 31,

2025 , we had total consolidated assets of $84 billion.

We provide commercial, private banking, consumer, small

business, wealth and trust management, retail brokerage,

capital markets, fixed income, and mortgage banking

services principally through our wholly-owned subsidiary,

First Horizon Bank. Founded in 1864 as First National Bank

of Memphis, the Bank is a Tennessee banking corporation

headquartered in Memphis, Tennessee. At December 31,

2025, the Bank had $84 billion in total assets, $68 billion in

total deposits, and $64 billion in total loans (including

certain leases, before considering the allowance for loan

and lease losses).

In addition to the Bank, as of December 31, 2025, First

Horizon's consolidated operating subsidiaries include, but

are not limited to: two subsidiaries which are registered

with the SEC as investment advisors; two subsidiaries

which are registered with the SEC as broker-dealers; and

three subsidiaries which are licensed as insurance

agencies.

At December 31, 2025, First Horizon had over 450

business locations in 23 U.S. states, excluding off-premises

ATMs. Most of those locations (412) were banking centers

located in southern states, including Tennessee (137),

North Carolina (78), Florida (74), and Louisiana (55).

Loans

Loan Portfolios

Lending is a major source of revenue for us, and loans are

our largest asset type. Table 1.1 shows our total loans

(including certain leases) at year-end 2025, along with

some details regarding the composition of our loans. Most

of our loans are commercial.

As shown in Table 1.1, 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.

Table 1.1

Loan Types & Portfolios¹

Commercial	$49 B	77%
Consumer	15 B	23
Total Loans	$64 B	100%
Commercial Portfolios	% of Type	% of Total
C&I	73%	56%
CRE	27	21
Consumer Portfolios	% of Type	% of Total
Consumer real estate	96%	22%
Credit card/other	4	1

¹Dollars and percentages at December 31, 2025.

Geographic Mix

Geographically, a significant majority of our loans

originate from five states: Florida, Tennessee, Texas,

North Carolina, and Louisiana. The geographic dispersion

of our loans varies considerably among our three major

loan portfolios, as shown in Table 1.2.

   

	6	2025 FORM 10-K ANNUAL REPORT

ITEM 1. BUSINESS
Table of Contents

Table 1.2

Major Loan Portfolios¹ by Geography

C&I ($36B)			CRE ($14B)			Cons. RE ($14B)
Tennessee	20%		Florida	26%		Florida	29%
Florida	12		Texas	13		Tennessee	22
Texas	10		N. Carolina	12		Texas	12
California	7		Tennessee	8		Louisiana	8
N. Carolina	6		Georgia	8		N. Carolina	6
Louisiana	6		Louisiana	8		Georgia	6
All other	39		All other	25		All other	17

¹Dollars and percentages at December 31, 2025.

C&I Loans

The C&I portfolio, our largest portfolio by far, was $36

billion at December 31, 2025. Our C&I portfolio has an

industry concentration: about 25% of C&I loans are to

businesses in the financial services industry, which

includes finance and insurance companies and mortgage

lending companies, while 11% of our C&I loans are to

borrowers in the real estate and rental and leasing

industry. The rest of C&I covers a wide range of industries,

as shown in Table 1.3a.

Table 1.3a

C&I Loans¹ by Industry/Line of Business

Loans to mortgage companies	13%
Finance and insurance	12
Real estate and rental and leasing (a)	11
Wholesale trade	7
Health care and social assistance	7
Accommodation and food service	7
Manufacturing	6
Retail trade	5
Transportation and warehousing	5
Other C&I	27

  ¹ Percentages of C&I portfolio at December 31, 2025.

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

CRE Loans

The CRE portfolio was $14 billion at December 31, 2025.

The largest property type within CRE is multi-family, as

shown in Table 1.3b. 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.

Table 1.3b

CRE Loans¹ by Property Type

Multi-family	33%
Office	20
Retail	17
Industrial	15
Hospitality	9
Other CRE	6

¹ Percentages of CRE portfolio at December 31, 2025.

Consumer Loans

Consumer loans totaled $15 billion at December 31, 2025,

as shown in Table 1.1 above. A substantial majority of

consumer loans consists of home equity loans, mortgages,

and other secured consumer real estate loans.

Further information regarding our loans is provided in

Note 3 beginning on page 113 appearing in our 2025

Financial Statements (Item 8), and under the captions

Analysis of Financial Condition and Asset Quality,

beginning on pages 48 and 51, respectively, of our 2025

MD&A (Item 7).

Deposits

Deposits comprise our largest resource to fund lending.

Deposits overall also tend to be our lowest-cost funding

source. At year-end 2025, we had total deposits of $67

billion. Most of our deposits are held in our commercial,

consumer & wealth banking segment. Table 1.4 provides a

deposit overview at December 31, 2025.

Further information regarding deposits is provided: in

Note 8 beginning on page 128 appearing in our 2025

Financial Statements (Item 8); under the caption Deposits

beginning on page 62 appearing in our 2025 MD&A (Item

7); and in other parts of this report referenced under

Deposits.

   

	7	2025 FORM 10-K ANNUAL REPORT

ITEM 1. BUSINESS
Table of Contents

Table 1.4

Deposit¹ Overview

Client Types	% of Total		Acct Types	% of Total		FDIC Insured Status	% of Total		Source	% of Total
Commercial	58%		Savings	39%		Estimated Insured	58%		Tennessee	34%
Consumer	42		Time deposits	10		Est. Uninsured - Total	42		Florida	16
			Other interest	28		Est. Uninsured - Collateralized	8		N. Carolina	12
			Noninterest	23					Louisiana	12
									All other	26

¹Percentages of deposits at December 31, 2025.

Business Segments

Segment Overview

Our financial results of operations are reported through

operational business segments which are not closely

related to the legal structure of our subsidiaries. During

2024, we reorganized our internal management structure

and, accordingly, reclassified our reportable business

segments. Prior to the 2024 reclassification, we operated

through three business segments: (1) regional, (2)

specialty, and (3) corporate. As a result of the 2024

reclassification, our reportable business segments are now

composed of the following: (1) commercial, consumer &

wealth, (2) wholesale, and (3) corporate. In this report,

segment information for prior periods has been

reclassified to conform with our current segments.

Financial and other additional information concerning our

segments—including information concerning assets,

revenues, and financial results—appears in our 2025

MD&A (Item 7) and in our 2025 Financial Statements

(Item 8), especially in Note 19—Business Segment

Information. Note 19 begins on page 150.

Commercial, Consumer & Wealth and Wholesale

Banking Segments

By far most of our loans and deposits are in the

commercial, consumer & wealth and wholesale banking

segments. Similarly, those segments are the sources of

most of our revenues and expenses. 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 1.5

provides high-level financial information for each of those

two segments, highlighting these points.

Table 1.5

Commercial, Consumer & Wealth (CCW) vs

Wholesale Banking Snapshot

(Dollars in millions)	CCW		Wholesale
2025 Average assets	$58,820		$9,360
2025 Net interest income	2,569		233
2025 Noninterest income	464		256
2025 Pre-tax income	1,540		157

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 investment, wealth management,

financial planning, trust and asset management

services

• asset-based lending

• commercial real estate

• equipment finance/leasing

• energy finance

• international banking

• healthcare finance

• transportation and logistics finance

• treasury management solutions

• loan syndications

• corporate banking services

The principal lines of business in the wholesale banking

segment are:

• fixed income securities sales, trading, underwriting,

and strategies for institutional clients

• loan sales

• portfolio advisory services

   

	8	2025 FORM 10-K ANNUAL REPORT

ITEM 1. BUSINESS
Table of Contents

• derivative sales

• mortgage warehouse lending

• franchise finance

• correspondent banking

• mortgage origination

Geographically, commercial, consumer & wealth banking's

traditional lending and deposit taking activities mainly

serve commercial and consumer clients located in markets

associated with our banking center footprint. Many of the

businesses within wholesale banking, as well as several

specialty lines of business within commercial, consumer &

wealth banking, have much broader geographic reach.

Business Developments

In July 2020, we completed a merger of equals transaction

with IBERIABANK Corporation and purchased 30 branches

from Truist Bank, making 2020 a transformative year. In

February 2022, we completed the principal systems

conversion work related to that merger.

On February 27, 2022, FHN entered into an Agreement

and Plan of Merger with The Toronto-Dominion Bank, a

Canadian chartered bank (“TD”) and certain TD

subsidiaries. Under that agreement, TD was to acquire

FHN for an all-cash purchase price of $25 per FHN

common share, with the price modestly increasing if the

transaction closed later than a certain date. FHN and TD

agreed to terminate the transaction on May 4, 2023, after

TD informed FHN that TD did not expect to receive the

necessary regulatory approvals in time to complete the

transaction on schedule.

Over the past few years, our strategic priorities have

focused on:

• targeted and opportunistic expansion of consumer

and commercial banking products and services;

• targeted and opportunistic expansion of commercial

lending;

• rigorous expense management;

• 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 our

competitors; and

• investments in technology and other infrastructure to

attract and retain clients and to support expansion.

In 2025, we sought to advance these priorities by focusing

on three sets of strategic initiatives:

• Quality and Execution. Consolidating and optimizing

processes to deliver improvements in scalability,

efficiency and controls, and pursuing selected

technology investments to enhance our digital and

data capabilities;

• Clients. Delivering premium service and value to our

clients to enhance our value proposition, which

focuses on relationship banking; and

• Associates. Investing in talent to elevate our

capabilities and performance, effectively assessing

performance and making appropriate and timely

decisions based upon those assessments, and

ensuring high levels of associate engagement and

commitment to Company goals.

We made strong progress in advancing these initiatives

throughout 2025, including by:

• Continuing to thoughtfully develop new methods,

processes, and systems for providing services for

clients, while preserving the high level of service our

associates bring to clients and fulfilling the promise of

our marketing slogan: Big Bank Muscle, Small Bank

Hustle;

• Creating and filling a new senior executive role to lead

strategic development and execution of a

comprehensive client experience for our consumer

segment;

• Engaging in strategic hiring to add banker talent,

enhance specific products and product groups and to

better serve specific retail markets;

• Developing and implementing a new framework to

operationalize our strategic priorities for our

associates and to ensure alignment of associate

efforts with those priorities; and

• Continuing to implement our multi-year technology

plan to transform our digital systems by:

◦ building an Enterprise Data Hub as the enterprise

data backbone;

◦ improving client experiences by modernizing

digital account opening, enhancing payments

capabilities, strengthening authentication,

improving fraud prevention, and elevating our

mobile experience;

◦ setting up a scalable and modular future-state

architecture to advance our cloud maturity and

API-first approach; and

◦ introducing new product and banking capabilities

to allow us to serve more complex business

needs, attract new clients and position the bank

for growth.

We continue to focus on these strategic priorities and

initiatives in 2026.

   

	9	2025 FORM 10-K ANNUAL REPORT

ITEM 1. 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.

Our traditional lending and deposit taking businesses,

especially our consumer businesses, primarily compete in

those areas within the southern U.S. where we have

banking center locations. Our commercial businesses also

have a geographic linkage, but it is weaker. Some areas of

specialty lending, such as franchise finance, mortgage

warehouse lending, asset-based lending, and certain other

specialty businesses are multi-regional or national in

scope rather than being heavily centered on banking

center locations.

Key traditional competitors in many of our markets

include Bank of America N.A., Fifth Third Bank National

Association, First-Citizens Bank & Trust Company (dba

First Citizens Bank), Hancock Whitney Bank, Huntington

National Bank, JPMorgan Chase Bank National Association,

Regions Bank, Pinnacle Bank, PNC Bank National

Association, Truist Bank, and Wells Fargo Bank N.A.,

among many others including many community banks and

credit unions.

A number of recent technologies created or operated by

non-banks have been integrated into the financial systems

used by traditional banks. In addition, certain financial

companies or their affiliates that traditionally were not

banks have been able to compete more directly with the

Bank for deposits and other traditional banking services

and products. Non-traditional companies competing with

us for traditional banking products and services include

investment banks, brokerage firms, insurance company

affiliates, specialty finance companies, and extremely

short-term consumer loan companies.

More recent entrants into markets for traditional banking

services include: financial technology firms that offer

checking, savings, and payment services through digital

applications; digital‑asset providers (including exchanges,

blockchain‑based payment networks, stablecoin issuers,

and digital‑asset lending and financing platforms); and

private credit firms that provide direct lending and other

alternative financing to businesses. These entities operate

under regulatory and supervisory frameworks that differ

from those applicable to banks and, in many cases, may

be less comprehensive and less costly.

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

products such as online and mobile banking.

Our fixed income business, which is part of our wholesale

banking segment, serves institutional clients, broadly

segregated into depositories (including banks, thrifts, and

credit unions) and non-depositories (including money

managers, insurance companies, governmental units and

agencies, public funds, pension funds, and hedge funds).

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.

Human Resources Management

Our 160-year history is rooted in our people-focused

culture, centered around teamwork and collaboration to

achieve best in class results. Everything we do is aligned

with our Purpose, Core Values and Commitment, holding

ourselves to the highest standards of ethical conduct and

operational excellence.

Our Purpose: To help our clients unlock their full potential

with capital and counsel.

Our Core Values:

• We Put Clients First

• We Care About People

• We're Committed to Excellence in Everything We Do

• We Expand Access

• We Foster Team Success

Commitment: As teammates and as individuals, we must

own the moment.  We listen, understand and deliver.

Continuously adapting to the changing needs and

expectations of our workforce remains a priority to ensure

we attract and retain top talent, have a highly engaged

workforce and are well positioned to serve our associates,

clients, communities and shareholders.

We strive to offer a workplace in which our associates feel

valued, motivated and empowered to grow and excel.  In

addition to competitive health care benefits, wellness

programs and parental and caregiver support, we offer

professional development opportunities through

mentoring and career development programs. Associates

can actively engage with their colleagues at work and be

involved in the community in a variety of ways, including

   

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through volunteerism and by participating in our

numerous associate resource groups.

We regularly communicate through a variety of channels

and seek input through formal surveys and through the

Firstpower Council, a group of associates representing

various areas of the company that provide direct feedback

on opportunities to enhance our culture and

organizational effectiveness. In 2025, we implemented an

enhanced performance management process to improve

performance measurement, increase engagement

between associates and their leaders, and better align

associate and leader goals. In January 2026, we launched

HorizonU, a new platform for centralized learning,

performance, and career development for associates.

At December 31, 2025, First Horizon had 7,404 associates,

including 7,277 full-time associates and 127 part-time

associates, or 7,338 full-time-equivalent associates, not

including contract labor for certain services.

Available Information

Our current primary internet address is

www.firsthorizon.com. A link to the Investor Relations

section of our internet website (ir.firsthorizon.com)

appears near the bottom of the home page of our

website. Near the top of the Investor Relations homepage

there is a "SEC Filings" link in the banner. Clicking that link

makes available to the public, free of charge, our annual

reports on Form 10-K, quarterly reports on Form 10-Q,

current reports on Form 8-K, proxy statements, and

amendments thereto as soon as reasonably practicable

after we file such material with, or furnish such material

to, the Securities and Exchange Commission. We also use

the Investor Relations section of our website as a means

of disclosing material non-public information and for

complying with our disclosure obligations under

Regulation FD. Accordingly, investors should monitor this

channel in addition to our press releases, SEC filings, and

public conference calls and webcasts. Additional

information regarding materials available on our website

is provided in Item 10 of this report beginning on page

187. No information external to this report and its

exhibits, unless specifically noted otherwise, is

incorporated into this report.

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.

This section summarizes certain statutes and regulations

and does not provide a comprehensive analysis of all

applicable laws. You should refer to the applicable

statutes and regulations for more information. In addition,

proposals to change the laws and regulations applicable to

bank and financial holding companies are frequently

raised at both the state and federal levels. The likelihood

and timing of any changes in these laws and regulations,

and the impact such changes may have on our business,

are difficult to predict. Changes in applicable laws and

regulations, or their interpretation by regulatory agencies

or courts, may have a material adverse effect on our

business.

Overview

First Horizon Corporation is a bank holding company and

financial holding company and is regulated under the Bank

Holding Company Act of 1956, as amended (the “BHCA”).

We and our subsidiaries are subject to the regulation and

supervision of, and to examination by, the Federal Reserve

under the BHCA.

First Horizon Bank, our most significant subsidiary, is a

Tennessee banking corporation subject to the regulation

and supervision of, and to examination by, the Tennessee

Department of Financial Institutions ("TDFI"). In addition

to general supervision and examination powers, the TDFI

has the power to approve mergers with the Bank, the

Bank’s issuance of preferred stock or capital notes, the

establishment of banking centers, and many other

corporate actions.

We are also subject to the Tennessee Bank Structure Act

of 1974 which, among other things, prohibits (subject to

certain exceptions) a bank holding company from

acquiring a bank for which the home state is Tennessee (a

“Tennessee bank”) if, upon consummation, the company

would directly or indirectly control 30% or more of the

total deposits in insured depository institutions in

Tennessee. As of June 30, 2025, the FDIC reports that the

Bank held approximately 13% of such deposits.

The Bank has chosen to be a member of the Federal

Reserve and, consequently, is also supervised and

regulated by the Federal Reserve. The Bank is insured by,

   

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ITEM 1. BUSINESS
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and subject to regulation by, the FDIC and is subject to

regulation in certain respects by the Consumer Financial

Protection Bureau ("CFPB").

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 non-

depository creditors or our security holders.

First Horizon Corporation is also under the jurisdiction of

the SEC and is subject to the disclosure and other

regulatory requirements of the Securities Act of 1933, as

amended, and the Securities Exchange Act of 1934, as

amended. First Horizon Corporation's stock is listed for

trading on the NYSE and, consequently, we are subject to

the rules of the NYSE for listed companies.

Permissible Activities other than Banking

Federal Law

A bank holding company that is not a financial holding

company is limited to engaging in "banking," managing or

controlling banks, and other activities found by the

Federal Reserve to be "closely related to banking." Eligible

bank holding companies that elect to become financial

holding companies may engage in, or acquire shares of a

company engaged in, a broader range of activities that are

(i) financial in nature or incidental to a financial activity (as

determined by the Federal Reserve in consultation with

the Secretary of the Treasury), or (ii) complementary to a

financial activity and do not pose a substantial risk to the

safety and soundness of depository institutions or the

financial system generally (as determined solely by the

Federal Reserve). Activities that are financial in nature

include: insurance underwriting and brokerage; merchant

banking; securities underwriting, dealing, and market-

making; and real estate development.

To maintain financial holding company status, a financial

holding company and all of its depository institution

subsidiaries must be “well capitalized” and “well

managed.” A depository institution subsidiary is

considered to be “well capitalized” if it satisfies the

requirements for this status as discussed in “Prompt

Corrective Action (PCA)” below. A depository institution

subsidiary is considered “well managed” if it received a

composite rating and management rating of at least

“satisfactory” in its most recent examination. A financial

holding company’s status will also depend upon it

maintaining its status as “well capitalized” and “well

managed” under applicable Federal Reserve regulations.

If a financial holding company ceases to meet these

capital and management requirements, the BHCA, and the

Federal Reserve’s regulations provide that the financial

holding company must enter into a confidential

agreement with the Federal Reserve to comply with all

applicable capital and management requirements. Until

the financial holding company returns to compliance, the

Federal Reserve may impose limitations or conditions on

the conduct of its activities, and the company may not

commence any of the broader financial activities

permissible for financial holding companies or acquire a

company engaged in such financial activities without prior

Federal Reserve approval. Bank holding companies and

banks must also be both well capitalized and well

managed in order to acquire banks located outside their

home state.

In order for a financial holding company to commence any

new activity permitted by the BHCA or to acquire a

company engaged in any new activity permitted by the

BHCA, each insured depository institution subsidiary of

the financial holding company must have received a rating

of at least “satisfactory” in its most recent CRA

performance evaluation, as discussed in “Community

Reinvestment Act (“CRA”)” below.

The Federal Reserve has the power to order any bank

holding company or its subsidiaries to terminate any

activity or to terminate its ownership or control of any

subsidiary when the Federal Reserve has reasonable

grounds to believe that continuation of such activity or

such ownership or control constitutes a serious risk to the

financial soundness, safety, or stability of any bank

subsidiary of the bank holding company.

A state-chartered member bank may similarly engage in

broader financial activities indirectly through “financial”

subsidiaries, subject to a number of legal requirements,

including that the bank and each of its depository

institution affiliates are well capitalized and well managed.

At December 31, 2025, we are a financial holding

company and the Bank has a number of financial

subsidiaries, as discussed under the caption General

within the Our Businesses discussion at page 5 above.

Tennessee Law

Tennessee law does not expressly restrict the activities of

a bank holding company or its non-bank affiliates.

However, no Tennessee bank may maintain a branch

office on the premises of an affiliate if the affiliate is

engaged in activities that are not permissible for a bank

holding company, a financial holding company, a national

bank, or a national bank subsidiary under federal law.

Tennessee law permits Tennessee banks to establish

subsidiaries and to engage in any activities permissible for

a national bank located in Tennessee, subject to

compliance with Tennessee regulations relating to the

conduct of such activities for the purpose of maintaining

bank safety and soundness.

   

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ITEM 1. BUSINESS
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Payment of Dividends

First Horizon Corporation is a legal entity separate and

distinct from First Horizon Bank and other subsidiaries.

Our principal source of cash flow, including cash flow to

pay dividends on our stock or to pay principal (including

premium, if any) and interest on debt securities, is

dividends from the Bank. There are statutory and

regulatory limitations on the payment of dividends by the

Bank to us, as well as by us to our shareholders.

The Corporation

Under Tennessee corporate law, we are not permitted to

pay cash dividends if, after giving effect to such payment,

we would not be able to pay our debts as they become

due in the usual course of business or our total assets

would be less than the sum of our total liabilities plus any

amounts needed to satisfy any preferential rights if we

were dissolving. In addition, in deciding whether or not to

declare a dividend of any particular size, our Board must

consider our current and prospective capital, liquidity, and

other needs, including the needs of the Bank which we are

obligated to support.

The Bank

Under Tennessee corporate law, the Bank (like the

Corporation, discussed above) may not pay a dividend if

the Bank would not be able to pay its debts when due or if

the Bank’s assets would be inadequate, in a dissolution, to

pay liabilities and preferential rights. Similarly, the Bank’s

Board must consider current and prospective needs in

making a decision to declare a dividend.

In addition, in order to pay cash dividends, the Bank must

obtain the prior approval of the Federal Reserve and the

TDFI Commissioner if the total of all dividends declared by

the Bank’s board of directors in any calendar year exceeds

the total of (i) the Bank’s retained net income for that year

plus (ii) the Bank’s retained net income for the preceding

two years, less certain required capital transfers, as

applicable. Federal law also prohibits state-chartered

member banks, such as the Bank, from paying dividends

that would be greater than the bank’s undivided profits.

Applying the dividend restrictions imposed under

applicable federal and state rules, the Bank’s total amount

available for dividends, without obtaining regulatory

approval, was $88 million at January 1, 2026.

Other Factors Affecting Dividends

If, in the opinion of the Federal Reserve, we or the Bank

are engaged in or about to engage in an unsafe or

unsound practice (which, depending on the financial

condition of FHN or the Bank, could include the payment

of dividends), the Federal Reserve may require us or the

Bank to cease and desist from that practice.

In addition, under the Federal Deposit Insurance Act, an

FDIC-insured depository institution (such as the Bank) may

not make any capital distributions, pay any management

fees to its holding company, or pay any dividend if it is

undercapitalized or if such payment would cause it to

become undercapitalized.

The payment of cash dividends by us or by the Bank also

may be affected or limited by other factors, such as the

requirement to maintain adequate capital above

regulatory guidelines, as discussed under Capital

Adequacy within this Supervision and Regulation

discussion below.

The Federal Reserve generally requires insured banks and

bank holding companies to pay dividends only out of

current operating earnings and has indicated generally

that it may be an unsafe and unsound practice for bank

holding companies to pay dividends unless the bank

holding company's net income over the preceding year is

sufficient to fund the dividends and the expected rate of

earnings retention is consistent with the company's

capital needs, asset quality and overall financial condition.

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.

Transactions with Affiliates

The Bank’s ability to lend or extend credit to us or our

other affiliates is restricted. The Bank and its subsidiaries

generally may not extend credit to us or to any other

affiliate of ours in an amount which, individually and in the

aggregate, exceeds certain limits based, in part, on the

amount of the Bank's capital. Extensions of credit and

other transactions between the Bank and us or such other

affiliates must be on terms and under circumstances that

are substantially the same or at least as favorable to the

Bank as those prevailing at the time for comparable

transactions with non-affiliated companies, and

extensions of credit by the Bank to us or our other

subsidiaries must be secured by specified amounts and

types of collateral.

   

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ITEM 1. BUSINESS
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There are similar legal restrictions on other types of

transactions, including: the Bank’s purchases of or

investments in the securities of and purchases of assets

from us or other affiliates; the Bank’s loans or extensions

of credit to third parties collateralized by the securities or

obligations of us or other affiliates; the issuance of

guaranties, acceptances, and letters of credit on behalf of

us or other affiliates; and certain Bank transactions with

us or other affiliates, or with respect to which we or other

affiliates act as agent, participate, or have a financial

interest.

Federal law also limits the Bank’s authority to extend

credit to its directors, executive officers and 10%

stockholders, as well as to entities controlled by such

persons. Among other things, extensions of credit to

insiders are required to be made on terms that are

substantially the same as, and follow credit underwriting

procedures that are not less stringent than, those

prevailing at the time for comparable transactions with

unaffiliated persons. Also, the terms of such extensions of

credit may not involve more than the normal risk of

repayment or present other unfavorable features and may

not exceed certain limitations on the amount of credit

extended to such persons individually and in the

aggregate.

Capital Adequacy

Each of the Company and the Bank is required to maintain

minimum capital levels under risk-based capital rules

issued by the U.S. Federal banking regulators (the "Capital

Rules"). The capital rules in the U.S. are based on

international standards known as “Basel III.” The Federal

Reserve may from time to time require that a banking

organization maintain capital above the minimum levels

discussed below, due to the banking organization’s

financial condition or actual or anticipated growth. Under

the Capital Rules, we and the Bank apply the Standardized

Approach in measuring risk-weighted assets (“RWA”) and

regulatory capital.

The Capital Rules define qualifying capital instruments and

specify minimum amounts of capital as a percentage of

assets that banking organizations are required to

maintain.

Under the Capital Rules, risk-based capital ratios are

calculated by dividing Common Equity Tier 1 (“CET1”)

capital, Tier 1 capital, and total risk-based capital,

respectively, by RWA. Assets and off-balance sheet credit

equivalents are assigned a risk weight based primarily on

supervisory assessments of relative credit risk.

Under the Capital Rules, we and the Bank are each

required to maintain the following:

• CET1 to RWA of at least 4.5%;

• Tier 1 capital to RWA of at least 6%;

• Total risk-based capital to RWA of at least 8%; and

• Tier 1 capital to average consolidated assets (the

“leverage ratio”) of at least 4%.

In addition, the Capital Rules require a capital

conservation buffer, consisting solely of CET1 capital in an

amount above the minimum risk-based capital

requirements for “adequately capitalized” institutions

equal to 2.5% of total RWA, resulting in a requirement for

the Company and the Bank effectively to maintain CET1,

Tier 1 and total capital ratios of 7%, 8.5% and 10.5%,

respectively. Banking institutions with a ratio of CET1

capital to RWA above the minimum requirement but

below the capital conservation buffer face restrictions on

the ability to pay dividends, pay discretionary bonuses,

and to engage in share repurchases based on the amount

of the shortfall and the institution’s “eligible retained

income” (the greater of (i) net income for the preceding

four quarters, net of distributions and associated tax

effects not reflected in net income, and (ii) average net

income over the preceding four quarters).

CET1 capital consists of common stock instruments that

meet the eligibility criteria in the Capital Rules, including

common stock and related surplus, net of treasury stock,

retained earnings, and certain minority interests. The

Capital Rules provide for a number of deductions from and

adjustments to CET1 capital. As a “non-advanced

approaches” firm under the Capital Rules, the Company is

subject to rules that provide for simplified capital

requirements relating to the threshold deductions for

mortgage servicing assets, deferred tax assets arising from

temporary differences that a banking organization could

not realize through net operating loss carrybacks, and

investments in the capital of unconsolidated financial

institutions, as well as the inclusion of minority interests in

regulatory capital. The Company and the Bank, as non-

advanced approaches banking organizations, made a one-

time, permanent election under the Capital Rules to

exclude the effects of certain components of accumulated

other comprehensive income (“AOCI”) included in

shareholders’ equity under U.S. GAAP in determining

regulatory capital ratios.

Federal regulators may also consider concentration of

credit risk and certain risks arising from non-traditional

activities, and the management of such risks, as important

qualitative factors in assessing the Bank's and our overall

capital adequacy.

Failure to meet capital guidelines could result in actions by

regulators that could have a material adverse impact on

our operations or financial condition, including the

termination of deposit insurance by the FDIC, the inability

to receive regulatory approval for expansion or new

   

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ITEM 1. BUSINESS
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activities, restrictions on our business, and in certain

circumstances the appointment of a conservator or

receiver.

At December 31, 2025, our CET1 capital ratio was 10.63%

and the Bank’s was 10.98%; our Tier 1 capital ratio was

11.51% and the Bank’s was 11.38%; our total capital ratio

was 13.35% and the Bank’s was 13.04%; and our leverage

ratio was 10.19% and the Bank’s was 10.09%.

In addition to the Capital Rules, the Bank is required to

have a capital structure that the TDFI determines is

adequate, based on TDFI’s assessment of the Bank’s

businesses and risks. The TDFI may require the Bank to

increase its capital, if found to be inadequate.

Prompt Corrective Action (PCA)

Under the Federal Deposit Insurance Act (the "FDIA"),

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: "well

capitalized," "adequately capitalized," "undercapitalized,"

"significantly undercapitalized," and "critically

undercapitalized."

Regulators must take certain mandatory supervisory

actions, and are authorized to take other discretionary

actions, with respect to institutions that are less than

adequately capitalized, with supervisory actions

progressively becoming more punitive as the institution’s

capital category declines. Supervisory actions include: (i)

restrictions on payment of capital distributions and

management fees, (ii) requirements that a federal bank

regulator monitor the condition of the institution and its

efforts to restore its capital, (iii) submission of a capital

restoration plan, (iv) restrictions on the growth of the

institution’s assets, and (v) requirements for prior

regulatory approval of certain expansion proposals.

A bank that is “critically undercapitalized” (i.e., has a ratio

of tangible equity to total assets that is equal to or less

than 2.0%) will be subject to further restrictions and

generally will be placed in conservatorship or receivership

within 90 days.

To be well capitalized, the Bank must maintain at least the

following capital ratios: a CET1 ratio of at least 6.5%, Tier 1

Capital ratio of at least 8%, Total Capital ratio of at least

10%, and a Leverage ratio of at least 5%, and must not be

subject to any written agreement, order, capital directive,

or prompt corrective action directive to meet and

maintain a specific capital level for any capital measure.

At December 31, 2025, the Bank had sufficient capital to

qualify as “well capitalized” under the regulatory capital

requirements discussed above. An institution may be

deemed to be in a capitalization category that is lower

than is indicated by its actual capital position if it receives

an unsatisfactory examination rating.

The FDIA’s prompt corrective action provisions apply only

to depository institutions such as the Bank, and not to

bank holding companies. Under the Federal Reserve’s

regulations, a bank holding company, such as the

Company, is considered “well capitalized” if the bank

holding company (i) has a total risk based capital ratio of

at least 10%, (ii) has a Tier 1 risk-based capital ratio of at

least 6%, and (iii) is not subject to any written agreement

order, capital directive, or prompt corrective action

directive to meet and maintain a specific capital level for

any capital measure. At December 31, 2025, we had

sufficient capital to qualify as “well capitalized” under

these regulations. Although prompt corrective action

regulations apply only to depository institutions and not

to bank holding companies, a bank that is required to

submit a capital restoration plan generally must

concurrently submit a performance guarantee by its

parent holding company. The liability of the parent

holding company under any such guarantee is limited to

the lesser of five percent of the bank’s assets at the time it

became “undercapitalized” or the amount needed to

comply.

Resolution Planning

The FDIC requires certain insured depository institutions

with more than $50 billion in total assets to periodically

submit resolution plans to provide the FDIC with

information about the bank that is essential to effective

resolution planning and to support the execution of a

resolution, if necessary. In June 2024, the FDIC amended

its insured depository institution resolution plan rule,

which requires the Bank, as a “Group B” insured

depository institution with between $50 billion and $100

billion in total assets, to submit informational filings on a

three-year cycle and provide limited interim supplements

in each of the off-years. The final rule became effective

October 1, 2024. The Bank’s initial information filing

submission is due on or before April 1, 2026.

   

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Safety and Soundness Compliance Planning

Under Section 39 of the Federal Deposit Insurance Act

(FDIA), when an insured depository institution is notified

that it is not meeting prescribed safety and soundness

standards, the federal banking agencies are authorized

but not required to order the institution to submit a

compliance plan. If the institution is given notice to submit

a compliance plan and fails to submit an acceptable plan

or fails in any material respect to implement an

acceptable plan, the agency must issue an order directing

the institution to correct the deficiency and may issue an

order directing other actions that could include imposing

restrictions comparable to those applicable to

undercapitalized institutions. Failure to comply with an

agency order may result in judicial enforcement and the

imposition of civil money penalties.

Enhanced Prudential Standards

The Federal Reserve has established enhanced prudential

standards for larger bank holding companies based on size

and certain risk-based indicators. Under the Federal

Reserve's regulations, bank holding companies with total

consolidated assets of $250 billion or less generally are

not subject to certain enhanced capital and liquidity

prudential standards, including company-run stress

testing, capital planning, liquidity coverage ratio, and

resolution planning requirements, among others.

Although we are beneath the $250 billion asset threshold

for mandatory company-run stress testing, we perform

certain stress tests internally and incorporate the

economic models and information developed through our

stress testing program into our risk management and

capital planning activities, which continue to be subject to

the regular supervisory processes of the Federal Reserve.

If we were to become a "Category IV" firm under the

Federal Reserve's regulations (i.e., if our total consolidated

assets were to exceed $100 billion), we would become

subject to certain enhanced prudential standards, which

would significantly increase our regulatory compliance

costs.  These additional standards would include

additional liquidity risk management requirements, more

onerous internal liquidity stress testing and liquidity buffer

requirements, supervisory stress testing, the stress capital

buffer, additional capital planning requirements,

additional reporting to the Federal Reserve and more

comprehensive resolution plan filings with the FDIC.

Source of Strength Requirement

Under the Dodd-Frank Act, we are required to act as a

source of financial strength to, and to commit resources to

support, the Bank. This support may be required even at

times when we might not be able to provide it without

adversely affecting our ability to meet other obligations. In

addition, any capital loans by a bank holding company to

any of its subsidiary banks are subordinate in right of

payment to deposits and to certain other indebtedness of

the subsidiary bank. In the event of a bank holding

company’s bankruptcy, any commitment by the bank

holding company to a federal bank regulatory agency to

maintain the capital of a subsidiary bank will be assumed

by the bankruptcy trustee and entitled to a priority of

payment.

Interstate Branching & Mergers

The Bank generally must have TDFI’s approval to establish

a new banking center (technically, a “branch”). For a new

banking center located outside of Tennessee, Tennessee

law requires the Bank to comply with branching laws

applicable to the state where the new banking center will

be located. Federal law allows the Bank to establish or

acquire a branch in another state to the same extent that

a bank chartered in that other state would be allowed to

establish or acquire a branch in that state.

Federal law permits a bank holding company, with Federal

Reserve approval, to acquire banking institutions outside

the bank holding company's home state through merger

or acquisition without regard to whether the transaction is

prohibited under state law, but subject to any state

requirement that the bank has been organized and

operating for a minimum period of time, not to exceed

five years. In addition, the acquiring bank must be well-

capitalized and well-managed; concentration limits on

liabilities and deposits may not be exceeded; regulators

must assess the transaction for incremental systemic risk;

and the acquiring bank must have at least “satisfactory”

standing under the federal Community Reinvestment Act

(discussed immediately below). Moreover, mergers and

acquisitions that are large enough are subject to anti-trust

review by the U.S. Department of Justice.

Once a bank has established branches in a state through

de novo or acquired branching or through an interstate

merger or acquisition transaction, the bank may then

establish or acquire additional branches within that state

   

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ITEM 1. BUSINESS
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to the same extent that a bank chartered in that state is

allowed to establish or acquire branches within the state.

Community Reinvestment Act (“CRA”)

The CRA requires each U.S. bank, consistent with safe and

sound operation, to help meet the credit needs of each

community where the bank accepts deposits, including

low- and moderate-income (“LMI”) communities. The

Federal Reserve assesses the Bank periodically for CRA

compliance, and that assessment is made public. The

Bank's CRA performance is evaluated on the distribution,

responsiveness, and impact of its lending, investment and

service activities within its assessment areas with

particular emphasis on meeting the credit and community

development needs of LMI communities.

A CRA rating below “Satisfactory” can slow or halt a bank’s

plans to expand by branching, acquisition, or merger, and

can prevent a bank holding company from becoming a

financial holding company. In its most recent publicly

reported CRA assessment, for 2024, the Bank received

ratings of "High Satisfactory" in Lending and in Service,

"Outstanding" in Investment, and "Satisfactory" overall.

In 2023, federal banking agencies adopted final rules

establishing a significantly revised framework for applying

the CRA. The new rules were preliminarily enjoined by a

federal district court in 2024. In July 2025, the agencies

proposed a rule to rescind the revised CRA framework and

to replace it with the framework that existed prior to the

2023 rule, though no assurance can be given regarding the

final regulatory outcome or timing.

Regulatory approaches to CRA compliance continue to

evolve, and future rulemakings or judicial actions could

result in additional compliance obligations, data collection

requirements, or examination methodologies, any of

which may increase operational costs or potentially affect

the Bank's ability to achieve favorable CRA ratings.

Management maintains a comprehensive CRA compliance

and data governance program designed to monitor

performance, support regulatory exams, and ensure

alignment with evolving regulatory expectations.

Interchange Fee Restrictions

Regulations cap interchange fees which the Bank may

charge merchants for debit card transactions.

Regulatory changes proposed in 2023, if adopted, would

lower that cap, but a recent federal court ruling vacating

the existing regulations makes the future of proposed

changes unclear. In early 2026, these proposed changes

remained pending.

Volcker Rule

The so-called Volcker Rule (1) generally prohibits banks

from engaging in proprietary trading, which is engaging as

principal (for the bank’s own account) in any purchase or

sale of one or more of certain types of financial

instruments, and (2) limits banks’ ability to invest in or

sponsor hedge funds or private equity funds. The Volcker

Rule regulation contains exemptions for market-making,

hedging, underwriting, and trading in U.S. government

and agency obligations, and also permits certain

ownership interests in certain types of covered funds to

be retained. It also permits the offering and sponsoring of

covered funds under certain conditions. The Company

does not engage in any significant covered fund activities

that are affected by the Volcker Rule.

Anti-Money Laundering

A major focus of U.S. federal governmental policy as it

relates to financial institutions is aimed at combating

money laundering and terrorist financing.  Financial

institutions are required to take certain measures to

identify their customers, prevent money laundering,

monitor customer transactions, and report suspicious

activity to U.S. law enforcement agencies. Financial

institutions also are required to respond to requests for

information from federal banking agencies and law

enforcement agencies.

Financial institutions that hold correspondent accounts for

foreign banks or provide private banking services to

foreign individuals are required to take measures to avoid

dealing with certain foreign individuals or entities,

including foreign banks with profiles that raise money

laundering concerns, and are prohibited from dealing with

foreign shell banks and persons from jurisdictions of

particular concern. Financial institutions also are required

to establish internal anti-money laundering programs.

The failure of a financial institution to maintain and

implement adequate programs to combat money

laundering and terrorist financing, or to comply with the

relevant laws and regulations, could have serious

consequences for the financial institution, including large

   

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ITEM 1. BUSINESS
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fines and causing the applicable bank regulatory

authorities to not approve merger or acquisition

transactions or to prohibit such transactions even if prior

approval is not required.

Office of Foreign Assets Control Regulation

The Office of Foreign Assets Control ("OFAC"), within the

U.S. Department of the Treasury, administers and

enforces economic and trade sanctions against targeted

foreign countries and regimes, under authority of various

laws. OFAC publishes lists of specially designated targets,

issues regulations, and implements executive orders that

restrict dealings with certain individuals, entities,

countries, and territories. The Bank is responsible for,

among other things, blocking accounts of, and

transactions with, such targets and countries, prohibiting

unlicensed trade and financial transactions with them and

reporting blocked transactions after their occurrence.

Failure to comply with these sanctions could have serious

legal and other consequences.

Consumer Regulation

We and the Bank are subject to federal and state laws

designed to protect consumers and prohibit unfair or

deceptive business practices, including the Equal Credit

Opportunity Act, the Fair Housing Act, the Home

Ownership Protection Act, the Fair Credit Reporting Act

(“FCRA”), as amended by the Fair and Accurate Credit

Transactions Act of 2003 (“FACT Act”), the Gramm-Leach-

Bliley Act of 1999 (“GLBA”), the Truth in Lending Act, the

CRA, the Home Mortgage Disclosure Act, the Real Estate

Settlement Procedures Act, the National Flood Insurance

Act and various state law counterparts. These laws and

regulations require certain disclosure and regulate the

manner in which financial institutions must interact with

customers when taking deposits, making loans, collecting

loans, and providing other services.

In addition, the CFPB adopts and administers significant

rules affecting consumer lending and consumer financial

services. Key rules for the Bank include detailed regulation

of mortgage servicing practices and detailed regulation of

mortgage origination and underwriting practices. The

latter rules, among other things, establish the definition of

a “qualified mortgage” using traditional underwriting

practices involving down payments, credit history, income

levels and verification, and so forth. The rules do not

prohibit, but do tend to discourage, lenders from

originating non-qualified mortgages.

During 2025, the CFPB announced a plan to reduce its

staff by over 80%, but implementation of the plan has

been enjoined while a federal appeals court considers the

plan's legality. The effects of these developments on

banking organizations subject to CFPB regulation and

supervision, including us and the Bank, are uncertain.

Federal law permits states to adopt consumer protection

laws and standards that are more stringent than those

adopted at the federal level and, in certain circumstances,

permits state attorneys general to enforce compliance

with both the state and federal laws and regulations.

States and state attorneys general may increase

regulatory, investigative and enforcement activity with

respect to consumer protection, in response to changes in

regulation, supervision and enforcement of consumer

protection laws by federal regulators.

FCRA

Use of consumer reports in underwriting is regulated

under the FCRA, and the FCRA also regulates reporting

information to consumer reporting agencies, prescreening

individuals for credit offers, sharing of consumer reports

between affiliates, and using affiliate credit data for

marketing purposes. Similar state laws may impose

additional requirements on the Bank. A notice of

proposed rulemaking to revise the FCRA was published in

December 2024, with comments to the proposal due in

March 2025. The CFPB subsequently withdrew the

proposed rule in May 2025.

Mortgage Reform

The Dodd-Frank Act prescribes certain standards that

mortgage lenders must consider before making a

residential mortgage loan, including verifying a borrower’s

ability to repay such mortgage loan, and allows borrowers

to assert violations of certain provisions of the Truth in

Lending Act as a defense to foreclosure proceedings.

Under the Dodd-Frank Act, prepayment penalties are

prohibited for certain mortgage transactions and creditors

are prohibited from financing insurance policies in

connection with a residential mortgage loan or home

equity line of credit. In addition, the Dodd-Frank Act

prohibits mortgage originators from receiving

   

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ITEM 1. BUSINESS
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compensation based on the terms of residential mortgage

loans and generally limits the ability of a mortgage

originator to be compensated by others if compensation is

received from a consumer. The Dodd-Frank Act requires

mortgage lenders to make additional disclosures prior to

the extension of credit, in each billing statement, and for

negative amortization loans and hybrid adjustable rate

mortgages.

Data Security, Privacy & Portability

Security & Privacy

Federal law restricts the Bank’s ability to share certain

information with affiliates and non-affiliates for marketing

and/or non-marketing purposes, or to contact clients with

marketing offers. Affiliate and non-affiliate sharing

initiated by the Bank generally is permitted unless the

client elects not to permit sharing.

Federal law also requires banks to implement a

comprehensive information security program that

includes administrative, technical, and physical

safeguards. Banks are required to have appropriate data

governance practices and risk management processes as

key functions supporting their operational resilience.

In the event of a cyber- or computer-related security

incident, federal banking regulations require a bank to

notify its primary federal regulator of certain "computer-

security" incidents within 36 hours after the bank

determines that a computer-security incident has

occurred. Under these regulations, we and the Bank are

required to notify the Federal Reserve of any incident that

has materially disrupted or degraded, or is reasonably

likely to materially disrupt or degrade the banking

organization’s ability to deliver services to a material

portion of its customer base, jeopardize the viability of key

operations of the banking organization, or pose a threat to

U.S. financial stability.

Data privacy and protection increasingly is an area of

significant state legislative focus. One prominent example

is the California Data Privacy Protection Act, which applies

to for-profit businesses that conduct business in California

and meet revenue or data collection thresholds, including

the Bank. Subject to certain exemptions, the statute gives

California consumers the right to request disclosure of

information collected about them, and whether that

information has been sold or shared with others, the right

to request deletion of personal information, the right to

opt out of the sale of the consumer’s personal

information, and the right not to be discriminated against

for exercising these rights. Similar laws have been adopted

by other states and may be adopted by additional states in

the future, including states in which we or the Bank do

business.

Open Banking

In October 2024, the CFPB adopted a new "Personal

Financial Data Rights" rule. Under the CFPB rule, banks will

be required to make client data available upon request to

the client and authorized third parties in a secure and

reliable manner without charge. The CFPB will implement

its data portability rule in phases, with banks that hold at

least $10 billion in total assets, but less than $250 billion,

required to comply by April 1, 2027. The rule is the subject

of litigation, and enforcement is currently stayed while the

CFPB considers revisions to the rule.

Climate-Related Laws and Regulations

Several states have enacted or proposed statutes or

regulations addressing climate-related issues. For

example, in 2023, California enacted two laws which,

taken together, will require most larger companies doing

business in California to report annually their greenhouse

gas (GHG) emissions and to report biennially their climate-

related financial risks and risk-mitigation measures. The

California laws have been challenged in court, and certain

of those challenges remain pending.

In addition, in March 2024, the SEC adopted final rules

which 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. There is considerable

uncertainty as to whether these rules will be implemented

as adopted, both because the SEC has suspended

effectiveness of those rules while legal challenges are

pending and because shifts in executive and legislative

branches of government could lead the SEC to withdraw

or significantly alter those rules.

FDIC Insurance Assessments; DIF

U.S. bank deposits generally are insured up to $250,000,

subject to applicable limitations, 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

   

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ITEM 1. BUSINESS
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to 42 basis points annually. (A basis point is equal to

0.01%.) These rates reflect a temporary increase generally

equal to 2 basis points implemented by the FDIC in 2023.

Also, for eight quarters starting in 2024, the FDIC has

imposed a special assessment, of 3.36 basis points per

quarter, intended to replenish the DIF in the aftermath of

three large regional bank failures that occurred in March

and May of 2023. In December 2025, the FDIC determined

it would not be necessary to extend the initial eight-

quarter collection period; in addition, the FDIC reduced

the special assessment rate to 2.97 basis points for the

eighth collection quarter, which has an invoice payment

date of March 30, 2026.

Key factors in the grid include: the institution’s risk

category (I to IV); whether the institution is deemed large

and highly complex; whether the institution qualifies for

an unsecured debt adjustment; and whether the

institution is burdened with a brokered deposit

adjustment. Other factors can impact the base against

which the applicable rate is applied, including (for

example) whether a net loss is realized.

Insurance of deposits may be terminated by the FDIC

upon a finding that the institution has engaged in unsafe

and unsound practices, is in an unsafe or unsound

condition to continue operations, or has violated any

applicable law, regulation, rule, order, or condition

imposed by a federal bank regulatory agency.

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 claims of the parent

bank holding company, in the “liquidation or other

resolution” of such an institution by any receiver.

Limitations on Acquisitions of Our Common Stock

The Change in Bank Control Act prohibits a person or

group of persons acting in concert from acquiring

“control” of a bank holding company unless the Federal

Reserve has been notified and has not objected to the

transaction. Under a rebuttable presumption established

by the Federal Reserve, the acquisition of 10% or more of

a class of voting securities of a bank holding company with

a class of securities registered under Section 12 of the

Exchange Act would generally constitute the acquisition of

control of a bank holding company. In addition, the BHCA

prohibits any company from acquiring control of a bank or

bank holding company without first having obtained the

approval of the Federal Reserve. Under the BHCA, a

company is deemed to control a bank or bank holding

company if the company owns, controls or holds with

power to vote 25% or more of a class of voting securities

of the bank or bank holding company, controls in any

manner the election of a majority of directors or trustees

of the bank or bank holding company, or the Federal

Reserve determines that the company has the power to

exercise a controlling influence over the management or

policies of the bank or bank holding company.

Securities Regulation

Certain of our subsidiaries are subject to various securities

laws and regulations and capital adequacy requirements

promulgated by the regulatory and exchange authorities

of the jurisdictions in which they operate.

Our registered broker-dealer subsidiaries are subject to

the SEC’s net capital rule, Rule 15c3-1. That rule requires

the maintenance of minimum net capital and limits the

ability of the broker-dealer to transfer large amounts of

capital to a parent company or affiliate. Compliance with

the rule could limit operations that require intensive use

of capital, such as underwriting and trading.

As of December 31, 2025, two of our subsidiaries were

registered investment advisers which are regulated under

the Investment Advisers Act of 1940. Advisory contracts

with clients automatically terminate under these laws

upon an assignment of the contract by the investment

adviser unless appropriate consents are obtained.

Insurance Activities

Certain of our subsidiaries sell various types of insurance

as agent in a number of states. 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.

   

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ITEM 1. BUSINESS
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Compensation & Risk Management

The Federal Reserve has issued guidance intended to

ensure that incentive compensation arrangements at

financial organizations take into account risk and are

consistent with safe and sound practices. The guidance is

based on three “key principles” calling for incentive

compensation plans to: appropriately balance risks and

rewards; be compatible with effective controls and risk

management; and be backed up by strong corporate

governance. In response: we operate an enhanced risk

management process for assessing risk in incentive

compensation plans; several key incentive programs use a

net profit approach rather than a revenues-only approach;

and mandatory deferral features are used in several key

programs, including an executive program.

In 2016 federal agencies proposed regulations which could

significantly change the regulation of incentive

compensation programs at financial institutions, including

FHN and the Bank. In July 2024, the OCC, FDIC, Federal

Housing Finance Agency and National Credit Union

Administration jointly re-proposed the regulatory text of

the 2016 proposal, but the FDIC rescinded its support for

the re-proposal in March 2025. The Federal Reserve and

the SEC did not join the re-proposal, and the proposed

rule will not be published in the Federal Register until the

agencies have joined. The proposed regulations have not

been finalized and future implementation remains

uncertain.

Non-Discrimination in Banking

In recent years, certain states have enacted, or have

proposed to enact, statutes, regulations or policies that

prohibit financial institutions from denying or canceling

products or services to a person or business, or otherwise

discriminating against a person or business in making

available products or services, on the basis of certain

social or political factors or other activities. In August

2025, President Trump signed Executive Order 14331,

“Guaranteeing Fair Banking Access for All Americans,”

which states that it is the policy of the United States that

no American should be denied access to financial services

because of their constitutionally or statutorily protected

beliefs, affiliations, or political views. The Executive Order

directs the Treasury Secretary and federal banking

regulators to address politicized or unlawful debanking

activities.

   

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ITEM 1A. RISK FACTORS
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Item 1A.Risk Factors

This Item highlights risks that could impact us in material

ways. In this Item we have outlined risks that we believe

are important to us at the present time. However, other

risks may prove to be important in the future, and new

risks may emerge at any time. We cannot predict all

potential developments that could materially affect our

financial performance or condition. Before making an

investment decision, you should carefully consider the

risks and uncertainties together with all of the other

information included or incorporated by reference in this

report.

Traditional Competition Risks

We are subject to intense competition for clients, and

the nature of that competition is changing. Our

competitors include national, state, and non-US banks,

savings and loan associations, credit unions, 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

financial services companies that serve in our markets.

The emergence of non-traditional, disruptive service

providers (see Industry Disruption within this Item 1A

beginning on page 22 ) 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.

We compete for talent. Our most significant competitors

for clients also tend to be our most significant competitors

for top talent. See Operational Risks below within this

Item 1A for additional information concerning this risk.

We compete to raise capital in the equity and debt

markets. See Liquidity and Funding Risks beginning on

page 30 of this Item 1A for additional information

concerning this risk.

Traditional Strategic Risks

We may be unable to successfully implement our

strategies to organically grow our businesses. We believe

that the successful execution of organic growth depends

upon a number of key elements, including:

• attracting and retaining clients in our commercial and

consumer banking market areas and in our specialty

banking markets;

• achieving and maintaining growth in our earnings

while pursuing new business opportunities;

• maintaining a high level of client service while

optimizing our operational infrastructures effectively

and efficiently;

• managing the liquidity and capital requirements

associated with growth; and

• managing effectively and efficiently the changes and

adaptations necessitated by a complex and evolving

regulatory environment.

We have in place strategies designed to achieve those

elements that we believe are significant to us at present.

Our challenge is to execute those strategies and adjust

them, or adopt new strategies, as conditions change.

We may fail to achieve one or more key elements

needed for successful business acquisitions. Our strategy

for growth also includes consideration of acquisitions or

strategic transactions if appropriate opportunities present

themselves. To the extent we engage in such transactions,

we face various additional risks relating to our ability to:

realize planned strategic and tactical objectives; correctly

identify, analyze, and assess the risks in the transaction;

integrate the acquired business quickly and cost-

effectively; and retain core clients and key associates.

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. Actions of

this sort typically are elevated in the first few years after a

significant merger. We face various risks associated with

exiting a business. We may be unable to: price a sale

transaction appropriately and otherwise negotiate

acceptable terms; identify and implement key client,

personnel, technology systems, and other transition

actions to avoid or minimize negative effects on retained

businesses; mitigate the loss of any pre-tax income that

the exited business produced; assess and manage any loss

of synergies that the exited business had with our retained

businesses; or manage capital, liquidity, and other

challenges that may arise if an exit results in significant

legacy cash expenditures or financial loss.

Negative sentiment of stakeholders, including clients,

associates, investors, regulators, and the communities

we serve, could negatively impact our business. One of

our key assets is our stakeholders' perception that we are

trustworthy, highly ethical and competent. This

   

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perception could be affected by our business practices, as

well as by the practices of our competitors, our industry as

a whole, and the parties with whom we have important

relationships. Senior management oversees processes for

monitoring and actively reporting on stakeholder

sentiment and for ensuring that the Company and its

brand continue to be viewed positively by both internal

and external stakeholders.

Negative sentiment among stakeholders could hinder our

ability to access the capital markets or otherwise impact

our liquidity, could hamper our ability to attract new

clients and retain existing ones, could impact the market

value of our stock, and could undermine our ability to

attract and retain talented associates, among other things.

Negative sentiment regarding the reputation of our

industry as a whole may result in greater regulatory and/

or legislative scrutiny, which may lead to laws or

regulations that change or constrain our business or

operations. Negative stakeholder sentiment also may

increase our litigation risk. In the most extreme cases,

negative stakeholder sentiment could jeopardize the

safety and soundness of an institution.

Political and social fragmentation in the U.S., combined

with access to social media platforms, can increase the

risk of negative stakeholder sentiment 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 perceptions by key

stakeholders as trustworthy, highly ethical and

competent, banks generally tend to avoid involvement in

political or social controversy. Increasingly, though, certain

groups—having highly specific political or social agendas

and with the ability to communicate their views effectively

using social media platforms—have made it more difficult

to maintain a traditional approach. While the potential for

interest group pressure has always existed, special

interest groups today, using social media platforms, are

more able and willing to publicize their criticisms. Those

criticisms, in turn, could result in negative stakeholder

sentiment  which could lead to action by legislators or

regulators.

Industry Disruption

Technological innovations continue to change financial

services at a rapid pace, creating new competitive

challenges. We provide a large number of services

remotely (online and mobile). Technology has helped us

reduce costs and improve service, but also has created

new competitive challenges by allowing disruptors, such

as peer-to-peer lending arrangers, non-bank deposit

acceptors, and non-bank digital asset financial service

providers, to enter traditional banking areas, and by

enabling banks to make client inroads unrelated to

physical presence. The competitive risks from

technological innovation are especially pronounced from

the largest U.S. banks, and from online-only banks and

non-bank financial technology firms (including

blockchain‑based payment networks, stablecoin issuers,

and digital‑asset lending and financing platforms), due in

part to the large investments they are able to sustain in

their digital platforms.

We seek to meet these competitive challenges through

increased investments in our own digital platforms, and

through strategic equity investments, but there can be no

assurance that these efforts will be successful.

New technologies proliferating in the financial services

industry are subject to risks and uncertainties that could

impair their effectiveness or have a negative impact on

our business. New technologies, services, and systems

based wholly or in part on artificial intelligence are

proliferating within our industry, including at our

Company as we are seeking to accelerate both our data

capabilities and our responsible use of artificial

intelligence to deliver excellent client and associate

outcomes. These technologies are subject to risks that

algorithms and datasets may be flawed or insufficient or

contain biased or incorrect information, risks that are

exacerbated because models and processes related to

artificial intelligence are not always transparent.

Responding successfully to the ongoing technology-

driven evolution in the financial services industry

requires substantial investment in information

technology systems and innovation to develop workable

proprietary solutions. The responses to technological

innovation and disruption that will be successful in the

long run remain unclear. Even with a substantial IT

budget, we cannot match the technology spending of

largest U.S. banking institutions. Therefore, like most U.S.

banks, our strategy must be focused on leveraging

products and solutions which are within our means,

including those developed by external vendors. Our goal

must be to keep pace with industry developments with a

focus on improving the client’s differentiated experience

with us by recognizing and responding to client needs.

Key risks for us are whether we will be able: to catch up to

breakthroughs quickly enough to avoid client attrition; to

adopt and enhance breakthroughs frequently enough, and

without significant technical failures, to attract clients

from competitors; and, if we are able to truly innovate, to

press our advantage quickly before competitors adopt our

innovation.

To thrive as our industry is disrupted, we will need to

continue to embrace some of the attitudes of a

   

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ITEM 1A. RISK FACTORS
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technology company and shed some of the traditional

attitudes often associated with banking, while continuing

to meet all applicable supervisory and regulatory

standards. This has required, and will continue to require,

an evolution in our corporate culture which, in turn,

creates implementation risk. In this evolutionary process it

is critical that we not lose sight of how our clients

experience working with us and our systems, including

those clients who still want traditionally-delivered

services, those who seek and embrace the latest

innovations, and those who mainly want services to be

convenient, personalized, and understandable.

Just as disruptive business changes driven by new

technologies and new client preferences can adversely

impact us and our entire industry, similar events can

adversely impact our commercial clients. In time, a major

business disruption can cause dominant businesses to fail

and can shrink or even end entire lines of business. To the

extent disruptions impact our clients, we may experience

elevated loan losses and loss of ongoing business which

we may not be able to recapture with new clients.

Operational Risks

Fraud is a major, and increasing, operational risk for us

and all banks. Two traditional areas—deposit fraud (check

forging, check kiting, wire fraud, check washing, etc.) and

loan fraud—continue to be major sources of fraud

attempts and actual loss. Fraud directed against clients—

generally using deception to persuade clients to transfer

funds—has emerged as a third large source of fraud loss.

The methods used to perpetrate and combat fraud

continue to evolve as technology changes. In addition to

cybersecurity risk (discussed below), new technologies—

including the use of artificial intelligence—have made it

easier for bad actors to obtain and use client personal

information, mimic communications to or from clients,

mimic signatures, and otherwise create false instructions

and documents that appear genuine.

Our anti-fraud actions are both preventive (anticipating

lines of attack, educating associates and clients, etc.) and

responsive (detecting, halting, and remediating actual

attacks). Our regulators require us to report actual and

suspected fraud promptly, and regulators often advise

banks of new schemes so that the entire industry can

adapt as quickly as possible. However, some level of fraud

loss is unavoidable, and the risk of a major loss cannot be

eliminated.

Our ability to conduct and grow our businesses is

dependent in part upon our ability to create, maintain,

expand, and evolve an appropriate operational and

organizational infrastructure, manage expenses, and

recruit and retain personnel with the ability to manage a

complex business. Operational risk can arise in many

ways, including: errors related to failed or inadequate

physical, operational, information technology, or other

processes; faulty or disabled computer or other

technology systems; fraud, theft, physical security

breaches, electronic data and related security breaches

(see Cybersecurity Risks below), or other criminal conduct

by associates or third parties; and exposure to other

external events. Inadequacies may present themselves in

myriad ways. Also, our efforts to control expenses, which

are a significant priority for us, increase our operational

challenges as we strive to maintain client service and

compliance at high quality and low cost.

We expect to continue making investments in

operational systems that may not result in significant

immediate returns. Investments in new platforms and

processes support continued improvements in operations

and client experiences, reductions in ongoing operating

costs, and future growth. We expect to continue making 

investments of this sort over the next several years.

Although we believe these investments are necessary and 

appropriate, the financial returns from such investments

may not result in significant immediate returns.

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. 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 72 of

our 2025 MD&A (Item 7).

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. Examples

of the risks created or compounded by the widespread

and rapid adoption of relatively new technologies include:

security incursions; operational malfunctions or other

disruptions; and legal claims of patent or other intellectual

property infringement.

We use third-party service providers for certain bank

functions. The failure, interruption, or poor performance

of these third parties, whether due to cyber incidents,

financial distress, operational breakdowns, or regulatory

actions, could disrupt our operations, compromise data

security, interfere with client services, compromise client

privacy, or result in violations of laws or regulations

   

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applicable to us and the Bank. In addition, transitioning to

alternative providers may be difficult, costly or time-

consuming and could require regulatory approval. Any

significant disruption or deficiency involving our third-

party service providers could materially and adversely

affect our business, financial condition, and results of

operations.

Competition for talent is substantial and increasing.

Moreover, revenue retention and growth in some

business lines depends substantially upon top talent. In

recent years the cost of hiring and retaining top revenue-

producing talent, especially in specialty areas, has

increased, and that trend is likely to continue. The primary

tools we use to attract and retain talent are:  salaries;

commission, incentive, and retention compensation

programs; retirement benefits; change in control

severance benefits; health and other welfare benefits; and

our corporate culture. To the extent we are unable to use

these tools effectively, we face the risk that, over time,

our talent will leave us and we will be unable to replace

those persons effectively.

Incentives might operate poorly or have unintended

adverse effects. 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.

Moreover, incentive programs may create unintended

adverse consequences. For example, a program focused

entirely on revenue production, without proper controls,

may result in costs growing faster than revenues.

We provide a wide range of services to clients, and the

provision of these services may create claims against us

that we provided them in a manner that harmed the

client or a third party, or was not compliant with

applicable laws or rules. Our services include commercial,

private banking, consumer, small business, wealth and

trust management, retail brokerage, capital markets, fixed

income, and mortgage banking services, among others.

We manage these risks primarily through training

programs, compliance programs, and supervision

processes.

Our ability to successfully manage expenses is important

to our long-term success, but in part is subject to risks

beyond our control. Many factors can influence the

amount of our expenses, as well as how quickly they grow.

As our businesses change, 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 recent years we have

actively sought to make strategic businesses more

efficient primarily by investing in technology, rethinking

and right-sizing our physical facilities, and rethinking and

right-sizing our workforce and incentive programs.

We have also employed economic profit analysis, which

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.

Despite our efforts to control expenses, our costs could

rise due to adverse structural changes, market shifts,

inflationary pressures, or errors in judgment. In addition,

our costs could be impacted by increased regulatory

compliance expense as we approach and surpass $100

billion in assets, which is the next regulatory tier above us

now, but the extent of any additional regulatory

compliance costs remains uncertain due to evolving

regulatory policies and possible legislative or regulatory

change.

Cybersecurity Risks

An information technology security (cybersecurity)

breach or other similar incident is a major type of

operational risk. A cybersecurity incident can cause

significant damage, and can be difficult to detect even

after it occurs. Among other things, that damage can

occur due to outright theft, loss or extortion of our funds

or our clients’ funds, fraud or identity theft perpetrated on

clients, loss of confidential or proprietary information,

business disruption, or adverse publicity associated with a

breach or incident and its potential effects. 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.

Attempted cybersecurity breaches or similar events

happen frequently; they are an unavoidable part of

doing business. Often, but not always, we detect and

block the attempt. Often, but not always, the number of

clients impacted is modest and our loss is minimal or

none. However, even with significant loss prevention and

mitigation systems, the risk of a financially or

reputationally significant incursion cannot be eliminated.

For that reason, the key goals of our processes are: block

or prevent as many incursions as is practical, and detect

and mitigate rapidly those that get through.

Common categories of cybersecurity incidents relevant to

us, as a bank, include: account takeover, client spoofing,

and payment fraud; ransomware and other malware;

   

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client interface attacks (attempts to shut down or slow

down our website or mobile app); and cloud (remote

server) incursions. Common vulnerabilities include: clients,

associates and third-party vendors 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. Bad

actors can range from amateurs to criminal organizations

to nation-states.

Cybersecurity risks for banks and other financial

institutions have increased significantly in recent years in

part because of the proliferation of technology-based

products and services and the increased sophistication

and activities of organized crime, hackers, terrorists,

nation-states, nation state-supported actors, activists and

other external parties. This increase is expected to

continue and further intensify. The techniques used by

cyber criminals change frequently, may be difficult to

detect over extended periods, and can be initiated from a

variety of sources, including terrorist organizations and

hostile foreign governments. In addition, the effectiveness

of these techniques may be further enhanced by the use

of artificial intelligence.

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. We expect

our systems and regulatory requirements will continue to

evolve as technology and criminal techniques also

continue to evolve.

Additional information concerning cybersecurity risks and

our management of them, all of which is incorporated into

this Item 1A by this reference, appears under the caption

Cybersecurity Risk Management beginning on page 72 of

our 2025 MD&A (Item 7).

The operational functions we outsource to third parties

may experience similar disruptions that could adversely

impact us and over which we may have limited control

and, in some cases, limited ability to obtain an alternate

vendor quickly. To the extent we rely on third party

vendors to perform or assist operational functions, the

challenge of managing the associated risks may become

more difficult. We manage this risk by assessing the

adequacy of cybersecurity prevention and detection

systems and programs of critical vendors.

The operational functions of business counterparties, or

businesses with which we have no relationship, may

experience disruptions that could adversely impact us

and over which we may have limited or no control.

Although these events cannot be predicted individually,

they have occurred in the past and, over time and in the

aggregate, are certain to occur in the future. Possible

points of incursion or disruption not within our control

include retailers, utilities, insurers, health care service

providers, internet service and electronic mail providers,

social media portals, distant-server (“cloud”) service

providers, electronic data security providers,

telecommunications companies, and smart phone

manufacturers. Although our systems are not breached by

these third-party incursions, they can increase fraud

impacting accounts at our Bank and can cause us to take

costly steps to avoid significant theft loss to our Bank and

to our clients. Our ability to recoup our losses may be

limited legally or practically in many situations.

Risks from Economic Downturns & Changes

Generally, in an economic downturn, our realized credit

losses increase, demand for our products and services

declines, and the credit quality of our loan portfolio

declines. Delinquencies and realized credit losses

generally increase during economic downturns due to an

increase in liquidity problems for clients and downward

pressure on collateral values. Likewise, demand for loans

(at a given level of creditworthiness), deposit and other

products, and financial services may decline during an

economic downturn, and may be adversely affected by

other global, national, regional, or local economic factors

that impact demand for loans and other financial products

and services. Such factors include, for example, changes in

employment rates, interest rates, real estate prices, or

expectations concerning rates or prices, changes in

regulatory, trade (including tariffs), and tax policies and

laws, and geopolitical instability or conflict. Accordingly,

an economic downturn or other adverse economic change

(local, regional, national, or global) can hurt our financial

performance in the form of higher loan losses, lower loan

production levels, lower deposit levels, compression of

our net interest margin, and lower fees from transactions

and services. Those effects can continue for many years

after the downturn technically ends.

Because all banks are sensitive to the risk of downturns,

the stock prices of all banks typically decline, sometimes

substantially, if the market believes that a downturn has

become more likely or is imminent. This effect can and

often does occur indiscriminately, initially without much

regard to different risk postures of different banks.

   

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Risks Associated with Monetary Events

In recent years, the Federal Reserve has implemented

significant economic strategies that have impacted

interest rates, inflation, asset values, and the shape of

the yield curve. These strategies have had, and will

continue to have, a significant impact on our business

and on many of our clients. Federal Reserve strategies

can, and often are intended to, affect the domestic money

supply, inflation, interest rates, and the shape of the yield

curve. Among other things, easing strategies are intended

to lower interest rates, encourage borrowing, expand the

money supply, and stimulate economic activity, while

tightening strategies are intended to increase interest

rates, discourage borrowing, tighten the money supply,

and restrain economic activity. These effects significantly

impact our business, including through impacts on deposit

levels, and may also materially affect many of our

customers.

Many external factors may interfere with the effects of

the Federal Reserve's plans or cause them to be changed,

perhaps quickly. Such factors include significant economic

trends or events, as well as political pressures and

significant international monetary policies and events.

Such strategies also can affect the U.S. and worldwide

financial systems in ways that may be difficult to predict.

We may be adversely affected by economic and political

situations outside the U.S. The U.S. economy and the

businesses of many of our clients are linked significantly to

economic and market conditions outside the U.S.,

especially in North and Central America, Europe, and Asia,

and increasingly in South America. Although our direct

exposure to non-U.S.-dollar-denominated assets or non-

U.S. sovereign debt is insignificant, in the future major

adverse events outside the U.S. could have a substantial

indirect adverse impact upon us. Key potential events

which could have such an impact include (1) sovereign

debt default, (2) bank and/or corporate debt default, (3)

market and other liquidity disruptions, (4) the collapse of

governments, alliances, or currencies, and (5) military

conflicts. The methods by which such events could

adversely affect us are highly varied but broadly include

the following: an increase in our cost of borrowed funds

or, in a worst case, the unavailability of borrowed funds

through conventional markets; impacts upon our hedging

and other counterparties; impacts upon our clients;

impacts upon the U.S. economy, especially in the areas of

employment rates, real estate values, interest rates, and

inflation rates; and impacts upon us from substantial and

unpredictable shifts in our regulatory environment from

possible political responses to major financial disruptions.

Credit Risks

We face the risk that our clients may not repay their

loans or make payments on their leases and that the

realizable value of collateral and other credit support

may be insufficient to avoid a charge-off. We also face

risks that other counterparties, in a wide range of

situations, may fail to honor their obligations to pay us. In

our business some level of credit charge-offs is

unavoidable and overall levels of credit charge-offs have

varied substantially over time, but it is extremely difficult

for banks, and for investors, to know whether an upturn

or downturn in credit loss is merely idiosyncratic or

instead portends a major credit cycle change.

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. We

further manage credit risk by diversifying our loan and

lease portfolio, by managing its granularity, and by

following per-relationship lending limits. 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. As

indicated in this Item 1A under the caption Accounting

Risks beginning on page 33, these guidelines and rules 

have changed in the past and could do so again in the

future, causing 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. Moreover, the SEC or

PCAOB could take accounting positions applicable to our

holding company that may be inconsistent with those

taken by the Federal Reserve or other banking regulators.

Our credit and other loan-management models could be

wrong, or could become wrong if external factors

change. A significant challenge for us is to keep the credit

and other models and approaches we use to originate and

manage loans updated to take into account changes in the

competitive environment, in real estate prices and other

collateral values, in the economy, and in the regulatory

environment, among other things, based on our

experience originating loans and servicing loan portfolios.

Changes in modeling could have significant impacts upon

our reported financial results and condition. In addition,

we use those models and approaches to manage our loan

portfolios and lending businesses. To the extent our

models and approaches are not consistent with underlying

real-world conditions, our management decisions could be

   

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ITEM 1A. RISK FACTORS
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misguided or otherwise affected with substantial adverse

consequences to us.

As interest rates rise, default risk generally also rises. As

borrowers’ obligations to pay interest increases, financial

weaknesses generally become more evident. Initially this

results in lower consumer credit scores and deteriorating

commercial loan grading, and later results in higher

default rates. Although interest rates began to decline in

last half of 2024, the full effects of the 2022-23 rate hikes

may not yet be fully reflected in loan default rates. In

addition, there can be no assurance that the recent

decline in interest rates will persist.

The composition of our loans inherently increases our

sensitivity to certain credit risks. Our total loans and

leases consist of the commercial, financial, and industrial

(C&I) portfolio, the commercial real estate (CRE) portfolio,

and the consumer loan portfolio.

Two large components of the C&I portfolio at year end

were loans to mortgage companies and loans to finance

and insurance companies. Taken together, approximately

25% of the C&I portfolio was sensitive to impacts on the

financial services industry. The financial services industry

is more sensitive to interest rate and yield curve changes,

monetary policy, regulatory policy, changes in real estate

and other asset values, and changes in general economic

conditions, than many other industries. Negative impacts

on the industry could dampen new lending in these lines

of business and could create credit impacts for the loans

in our portfolio.

The stability and value of the CRE portfolio depends

substantially upon the financial health of the underlying

real estate assets and upon commercial real estate market

values generally. Many CRE assets are rental properties,

and for those occupancy and vacancy rates are critical

factors along with business trends that impact tenants.

Most of the remainder are owner-occupied, significantly

dependent on the financial health of the borrower. Part of

our rental CRE consists of traditional office space. The

COVID pandemic disrupted traditional office space

demand and utilization. It is uncertain what demand and

utilization will be once that disruption fully ends. Another

part of our CRE portfolio consists of multi-family

properties, a sector which has also been subject to recent

stress.

The consumer real estate portfolio contains a number of

concentrations which affect credit risk assessment of the

portfolio.

• Product and collateral concentration. The consumer

real estate portfolio consists primarily of consumer

installment loans, and much of the remainder consists

of home equity lines of credit. This entire category is

secured by residential real estate.

• Geographic concentration. At year end, about 63% of

the consumer real estate portfolio related to clients in

three states: Florida, Tennessee, and Texas.

The consumer real estate category is highly sensitive to

economic impacts on consumer clients and on residential

real estate values.

Volatility in the oil and gas industry can impact us. At

year end, approximately 2% of our total loans were

directly related to the oil and gas industry. In addition to

general credit and other risks mentioned elsewhere in this

Item 1A, these businesses and their related assets are

sensitive to a number of factors specific to that industry.

Key among those is global demand for energy and other

products from oil and gas in relation to supply. Significant

oil-price volatility caused by shifts in global demand,

macroeconomic and geopolitical risks, and weather

conditions have had in the past, and could have in the

future, an impact on our overall business in this industry.

Another set of risks specific to that industry relate to

environmental concerns and the risks of adverse changes

in consumption habits generally.

Regulatory, Legislative, & Legal Risks

We operate in a heavily regulated industry, and our

business, operations and income may be adversely

affected by changes in statutes, rules, regulations, and

policies governing our operations. We are subject to

many banking, deposit, insurance, securities brokerage

and underwriting, investment management, and

consumer lending regulations in addition to the rules

applicable to all companies publicly traded in the U.S.

securities markets and, in particular, on the New York

Stock Exchange. We also are subject to Federal and state

regulations that significantly limit the types of activities in

which we, as a financial institution, may engage, and to a

wide array of other regulations that govern other aspects

of how we conduct our business, such as in the areas of

employment and intellectual property. Failure to comply

with applicable laws and regulations could result in

financial, structural, and operational penalties. In addition,

efforts to comply with applicable laws and regulations

have in the past increased, and may in the future further

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

10, for additional information concerning financial

industry regulation.

Changes to statutes, regulations or regulatory policies, or

their interpretation or implementation, and/or

regulatory practices, requirements or expectations, could

affect us in substantial and unpredictable ways. In

particular, the potential effects of a number of proposed

regulations on us remain uncertain due to legal challenges

   

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and the 2025 changes in the U.S. presidential

administration and control of the U.S. Senate, which have

resulted in, and could result in additional, changing federal

or state regulatory priorities.

We are unable to predict the form or nature of any future

changes to statutes or regulation, including the

interpretation or implementation thereof. Changes to

statutes, regulations, or regulatory policies, including

changes in interpretation or implementation of statutes,

regulations, or policies, have and could in the future

subject us to additional costs, limit the types of financial

services and products we may offer, and/or increase the

ability of non-banks to offer competing financial services

and products, among other things. Failure to comply with

laws, regulations, policies or supervisory guidance, and

any such changes, could result in enforcement and other

legal actions by Federal or state authorities, including

criminal and civil penalties, the loss of FDIC insurance,

revocation of a banking charter, other sanctions by

regulatory agencies, civil money penalties, and/or damage

to our brand, any of which could have a material adverse

effect on our business, financial condition, and results of

operations.

We and the Bank both are required to maintain certain

regulatory capital levels and ratios. U.S. capital standards

are discussed in Item 1 of this report. Pressures to

maintain appropriate capital levels and address business

needs in a changing economy may lead to actions that

could be dilutive or otherwise adverse to our

shareholders. 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.

Regulation of banks is tiered based on asset size; we are

close to reaching $100 billion, which is currently the next

tier above us. Regulatory restrictions and costs tend to

increase based on asset tier. For us, significant impacts of

crossing the $100 billion threshold, under current

regulatory standards, 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 could be significant,

and many of those costs will need to be borne (and are

already being borne) as we approach the $100 billion tier

and proceed with upgrading compliance systems,

processes, and staffing. However, current regulatory

standards applicable to banks crossing the $100-billion

threshold could change, possibly reducing compliance

requirements and costs, due to evolving regulatory

policies and possible legislative or regulatory change.

Legal disputes are an unavoidable part of business, and

the outcome of pending or threatened litigation cannot

be predicted with any certainty. We face the risk of

litigation from clients, associates, vendors, contractual

parties, and other persons, either singly or in class actions,

and from federal or state regulators. Matters of that sort

are pending currently. We manage litigation risks through

internal controls, personnel training, insurance, litigation

management, our compliance and ethics processes, and

other means. However, the commencement, outcome,

and magnitude of litigation cannot be predicted or

controlled with any certainty. 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.

Political volatility within the federal government creates

the potential for significant abrupt shifts in federal

policy, as well as government shutdowns. Political

conflict within and among branches of government has

and could in the future result in abrupt policy shifts

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. Moreover, political conflict within and among

branches of government, and within and among

government agencies, has in the past risen to, and could

again rise to, a level where day-to-day functions could be

interrupted or impaired, including as a result of

government shutdowns. Most recently, in October 2025,

the U.S. government entered into a prolonged shutdown,

which ended on November 12, 2025, as well as a briefer

partial shutdown in February 2026, negatively impacting

companies, likely including some of our commercial

clients, who do substantial business with, or related to,

the U.S. government. As of early 2026, the risk of

additional U.S. government shutdowns, and their

potential impacts, continues.

Data privacy is becoming an area of heightened

legislative and regulatory focus. One prominent example

is the California Consumer Privacy Act, which applies to

for-profit businesses that conduct business in California

and meet certain revenue and data collection thresholds,

including the Bank. Further general regulation to protect

data privacy appears likely. 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. Any enlargement of

general or banking industry data privacy laws or

regulations could adversely affect our business if it

requires us to alter our systems or change our business

practices.

Public expectations concerning corporate controls on

emissions of carbon dioxide, methane, and other

greenhouse gases (GHG) could, in the future, increase

our operating costs and curtail some aspects of our

business. At present, federal environmental regulations

do not require us to monitor the direct or indirect GHG

   

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emissions associated with building, operating, or

maintaining our physical facilities, nor are we taxed or

fined in relation to those emissions. Changing

expectations could pressure us to physically measure,

monitor, and curtail direct emissions and to estimate

indirect emissions or impacts and eventually could result

in federal environmental legal requirements to take those

actions or to pay for measured or estimated emissions.

Recent state laws and federal disclosure rules concerning

GHG emissions could impose significant additional costs

upon us. Recent state and federal disclosure laws and

regulations related to GHG emissions are discussed in Item

1 of this report. Should these laws become effective as

adopted, they could impose significant direct and indirect

costs on us, including creating systems to capture relevant

data and engaging vendors to provide required

assurances.

General regulation of GHG 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.

Geographic Risks

We are subject to risks of operating in various

jurisdictions. 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. where we do most of our traditional

lending and deposit taking business. If, as on some

occasions in the past, those regions of the U.S. were to

experience adversity not shared by other parts of the

country, we could experience adversity to a degree not

shared by those competitors which have a broader or

different regional footprint.

Cost increases and uncertainties impacting clients and

communities in our coastal markets may jeopardize the

substantial growth trends of those markets and could

have a significant impact on us. A significant part of our

growth prospects are concentrated in the major gulf coast

markets and several markets on the southern Atlantic

seacoast of the U.S. Many of our fastest growing markets,

including most significantly those in Florida, have been

and can be impacted significantly by hurricanes and other

severe coastal weather events.

In recent years it has been widely reported that the

economic costs of hurricane and other severe weather

events in the U.S. gulf and southern Atlantic coastal areas

have been rising significantly, triggering concerns

regarding the availability, reliability, and cost of adequate

property insurance. Instability in property insurance has

made, and will continue to make, our business decisions

more difficult, while also increasing our risks of loan loss.

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 could be impacted.

We have international assets, mainly in the form of loans

and letters of credit. Holding non-U.S. assets creates a

number of risks: the risk that taxes, fees, prohibitions, and

other barriers and constraints may be created or

increased by the U.S. or other countries that would impact

our holdings; the risk that currency exchange rates could

move unfavorably so as to diminish the U.S. dollar value of

assets, or to enlarge the U.S. dollar value of liabilities; and

the risk that legal recourse against foreign counterparties

may be limited in unexpected ways. Our ability to manage

those and other risks depends upon a number of factors,

including: our ability to recognize and anticipate

differences in legal, cultural, and other expectations

applicable to clients, regulators, vendors, and other

business partners and counterparties; and our ability to

recognize and manage any exchange rate risks to which

we are exposed.

Insurance

Our property and casualty insurance may not cover, or

may be inadequate to fully cover, the risks that we face,

and we may be adversely affected by a default by

insurers. We use insurance to mitigate a number of risks,

including damage or destruction of property and losses as

well as legal and other liability, including for cyber-related

incidents. Not all such risks are insured, in any given

insured situation our insurance may be inadequate to

cover all loss, and many risks we face are uninsurable. For

those risks that are insured, we also face the risks that the

insurer may default on its obligations or refuse to honor

them. We treat the risk of default as a type of credit risk,

which we manage by reviewing the insurers that we use

and by striving to use more than one insurer when

practical. The risk of refusal, whether due to honest

disagreement or bad faith, is inherent in any contractual

situation.

A portion of our consumer loan portfolio involves

mortgage default insurance. If a default insurer were to

experience a significant credit downgrade or were to

become insolvent, that could adversely affect the carrying

value of loans insured by that company, which could result

in an immediate increase in our loan loss provision or

write-down of the carrying value of those loans on our

   

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balance sheet and, in either case, a corresponding impact

on our financial results. If many default insurers were to

experience downgrades or insolvency at the same time,

the risk of a financial impact would be amplified.

We own certain bank-owned life insurance policies as

assets on our balance sheet. Some of those policies are

“general account” and others are “separate account.” The

general account policies are subject to the risk that the

carrier might experience a significant downgrade or

become insolvent. The separate account policies are less

susceptible to carrier risk, but do carry a higher risk of

value fluctuations in securities which underlie those

policies. Both risks are managed through periodic reviews

of the carriers and the underlying security values.

However, particularly for the general account policies, our

ability to liquidate a policy in anticipation of an adverse

carrier event is significantly limited by applicable

insurance contracts and regulations as well as by a

substantial tax penalty which could be levied upon early

policy termination.

Liquidity & Funding Risks

Liquidity is essential to our business model and a lack of

liquidity, or an increase in the cost of liquidity, may

materially and adversely affect our businesses, results of

operations, financial condition, and cash flows. 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 2025 were met principally by deposits, by

financing from other financial institutions, and by funds

obtained from the capital markets.

Deposits traditionally have provided our most affordable

funds and deposits by far are the largest portion of our

funding. However, deposit trends can shift with

economic conditions and with public perception of risk in

the banking industry or of risk in our Bank in particular.

That shift can be sudden and extreme. If public

confidence fails, deposit levels in our Bank could fall,

perhaps quickly, 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 rates 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, following the failure of three large

U.S. regional banks, we experienced significant but much

more modest levels of run-off, which we successfully

countered with a significant deposit campaign.

In the aftermath of the 2023 bank failures, the following

factors appear to have been key to institutional risk:

deposits not insured by FDIC insurance were much more

likely to depart rapidly when risk perceptions changed

suddenly; deposit clients who were not traditional clients

with primary banking relationships were much more likely

to depart rapidly; and deposits concentrated in fewer,

high-balance accounts (with FDIC insurance coverage on

only a small portion of the balances) were much more

likely to depart rapidly than deposits spread among many

more-typical clients and accounts. All but the very largest

banks, including our Bank, faced all three of these factors

to an extent.

Deposit levels may be affected, fairly quickly, by changes

in monetary policy. 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, and rate reductions continued in 2025,

leading to decreased competition for deposits. However,

even in a declining interest rate environment, quantitative

tightening by the Federal Reserve can trigger increased

competition for deposits. Whether, and to what extent,

economic conditions will support continued short-term

rate reductions in 2026 remains uncertain.

Loss of deposits or a change in deposit mix could increase

our funding costs. Deposits generally are a low cost and

stable source of funding. We compete with banks and

other financial institutions, including (more recently)

digital asset providers, for deposits and as a result, we

could lose deposits in the future, or we may need to raise

interest rates to avoid deposit attrition. Funding costs may

also increase if deposits lost are replaced with wholesale

funding. 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. 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.

Although mid-sized banks, like ours, are only lightly

impacted by this rule, if some large banks in our markets

take aggressive actions we could lose deposit share or be

compelled to adjust our deposit pricing and practices in

ways that could increase our costs.

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. Those facilities

provide funding quickly when we need it, up to program

limits. Program limits are based, in part, on the fair value

   

	31	2025 FORM 10-K ANNUAL REPORT

ITEM 1A. RISK FACTORS
Table of Contents

of potential collateral we can provide, which fluctuates

with market conditions. We also have and use access to

the discount window at the Federal Reserve. 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.

We also depend upon financing from private institutional

or other investors by means of the capital markets. In the

past, we have issued and sold preferred stock, as well as

senior and subordinated notes. We expect to, and believe

we could, access the capital markets in the future. 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. These include, but are not limited to,

our financial results, organizational or political changes,

adverse impacts on key stakeholder sentiment, changes in

the activities of our business partners, disruptions in the

capital markets, specific events that adversely impact the

financial services industry, counterparty availability,

changes affecting our loan portfolio or other assets,

changes affecting our corporate and regulatory structure,

interest rate fluctuations, ratings agency actions, general

economic conditions, and the legal, regulatory,

accounting, and tax environments governing our funding

transactions. 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 could become more difficult due to

economic and other factors beyond our control.

Credit Ratings

Our credit ratings directly affect the availability and cost

of our unsecured funding. Our holding company (the

Corporation) and our Bank currently receive ratings from

rating agencies for unsecured borrowings. A rating below

investment grade typically reduces availability and

increases the cost of market-based funding. At

December 31, 2025, both rating agencies rated the

unsecured senior debt of the Corporation and of the Bank

as investment grade. To the extent that in the future we

depend on institutional borrowing and the capital markets

for funding and capital, we could experience reduced

liquidity and increased cost of unsecured funding if our

debt ratings were lowered, particularly if lowered below

investment grade. In addition, other actions by ratings

agencies can create uncertainty about our ratings in the

future and thus can adversely affect the cost and

availability of funding, including placing us on negative

outlook or on watchlist.

Reductions in our credit ratings could result in

counterparties reducing or terminating their

relationships with us. Some parties with whom we do

business have internal policies restricting the business

that can be done with financial institutions that have

credit ratings lower than a certain threshold.

Reductions in our credit ratings could allow some

counterparties to terminate and immediately force us to

settle certain derivatives agreements, and could force us

to provide additional collateral with respect to certain

derivatives agreements. Under our margin agreements,

we are required to post collateral in the amount of our

derivative liability positions with derivative

counterparties. FHN could be asked to post collateral of an

undetermined amount based on changes in credit ratings

and derivative value.

Interest Rate & Yield Curve Risks

We are subject to interest rate risk because a significant

portion of our business involves borrowing and lending

money and investing in financial instruments. A

considerable portion of our funding comes from short-

term and demand deposits, while a sizable portion of our

lending and investing is in medium-term and long-term

instruments. Changes in interest rates directly impact our

revenues and expenses and could expand or compress our

net interest margin. 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.

A flat or inverted yield curve may reduce our net interest

margin and adversely affect our lending and fixed income

businesses. The yield curve is a reflection of interest rates,

at various maturities, applicable to assets and liabilities.

Historically, the yield curve is usually upward sloping

(higher rates for longer terms and lower rates for shorter

terms). However, the yield curve can be relatively flat or

inverted (downward sloping). Inversion normally is rare

but has happened several times in the past. A flat or

inverted yield curve tends to decrease net interest margin,

which adversely impacts our lending businesses, and it

   

	32	2025 FORM 10-K ANNUAL REPORT

ITEM 1A. RISK FACTORS
Table of Contents

tends to reduce demand for long-term debt securities,

which adversely impacts the revenues of our fixed income

business.

Expectations by the market regarding the direction of

future interest rate movements can impact the demand

for and value of our fixed income investments and can

impact the revenues of our fixed income business.

Demand for, and the value of, our fixed income

investments is negatively impacted during times of rising

interest rates. The last rising rate cycle started in 2022 and

continued through 2023. The improvement in the shape of

the yield curve in the second half of 2024, which

continued in 2025, subsequently resulted in an increase in

fixed income values and revenues.

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.

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. In the course of that business we hold trading

securities inventory and loan positions for purposes of

distribution to clients, and we are exposed to certain

market risks attributable principally to interest rate risk

and credit risk associated with those assets. 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. Additional information concerning

these risks and our management of them appears under

the caption Market Risk Management beginning on page

68 of our 2025 MD&A (Item 7).

Declines, disruptions, or precipitous changes in markets

or market prices can adversely affect our fees and other

income sources. We earn fees and other income related

to our brokerage business and our management of assets

for clients. Declines, disruptions, or precipitous changes in

markets or market prices can adversely affect those

revenue sources.

Significant changes to the securities market’s

performance can have a material impact upon our assets,

liabilities, and financial results. We have a number of

assets and obligations that are linked, directly or

indirectly, to major securities markets. Significant changes

in market performance can have a material impact upon

our assets, liabilities, and financial results.

Our hedging activities may be ineffective, may not

adequately hedge our risks, and are subject to credit risk.

In the normal course of our businesses we attempt to

create partial or full economic hedges of various, though

not all, financial risks. Hedging creates certain risks for us,

including the risk that the other party to the hedge

transaction will fail to perform (counterparty risk), and the

risk that the hedge will not fully protect us from loss as

intended (hedge ineffectiveness risk). Unexpected

counterparty failure or hedge ineffectiveness could have a

significant adverse effect on our liquidity and earnings.

Mortgage Business Risks

Two of our mortgage-related businesses—mortgage

origination and lending to mortgage companies—are

highly sensitive to interest rates and rate cycles. When

rates are higher, client activity (and our related income)

tends to be muted. Lower rates tend to foster higher

activity. The U.S. experienced extremely low interest rates

for several years, ending in early 2022. Higher rates since

2022 have negatively impacted our income from these

businesses.

We have contractual risks from our mortgage business.

Our traditional mortgage business includes home

mortgages some of which we sell, rather than hold, as well

as home mortgages which qualify for a government-

guarantee program. The mortgage terms conform to the

requirements of the mortgage buyers or government

agencies, and we make representations to those buyers or

agencies concerning conformity of each mortgage at

origination. Although the buyers and agencies generally

take the risk that a mortgage defaults, we retain the risk

that our representations were materially incorrect. In such

a case, the buyer or agency generally has the power to

force us to take the loan back for its face value, or to make

the buyer or agency whole for its loss.

Some government mortgage programs could impose

penalties on us for misrepresentations at the time of

obtaining benefits under the program. Penalties can be

severe, up to three times the agency’s loss. As a result,

mortgage origination processes need to emphasize being

thorough and correct, in compliance with all agency

standards.

The mortgage servicing business creates regulatory risks. 

Servicing requires continual interaction with consumer

clients. Federal, state, and sometimes local laws regulate

   

	33	2025 FORM 10-K ANNUAL REPORT

ITEM 1A. RISK FACTORS
Table of Contents

when and how we interact with consumer clients. The

requirements can be complex and difficult for us to

administer, especially if a client experiences difficulty with

the mortgage loan. Failure to follow the applicable rules

can result in significant penalties or other loss for us.

Accounting Risks

The preparation of our consolidated financial statements

in conformity with U.S. generally accepted accounting

principles requires management to make significant

subjective and complex 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. However, other estimates can be highly

significant at discrete times or during periods of varying

length, for example the valuation (or impairment) of our

deferred tax assets. Estimates are made at specific points

in time. Accordingly, as actual events unfold, estimates

may be adjusted. If our estimates are inaccurate or need

to be adjusted, our financial condition and results of

operations could be materially impacted.

A significant merger or acquisition requires us to make

many estimates, including the fair values of acquired

assets and liabilities. 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

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.

Changes in accounting rules can significantly affect how

we record and report assets, liabilities, revenues,

expenses, and earnings. Although such changes generally

affect all companies in a given industry, in practice

changes sometimes have a disparate impact due to

differences in the circumstances or business operations of

companies within the same industry. Changes in

accounting rules are beyond our control, can be hard to

predict, and have had in the past, and could have in the

future, a material impact how we report our results of

operations and financial condition. We could be required

to apply a new or revised standard retrospectively, which

may result in us having to revise our prior period financial

statements by material amounts.

Changes in regulatory rules can create significant

accounting impacts for us. Because we operate in a

regulated industry, we prepare regulatory financial

reports based on regulatory accounting standards.

Changes in those standards have had in the past, and

could have in the future, significant impacts upon us in

terms of regulatory compliance and financial reporting.

Our controls and procedures may fail or be

circumvented. Internal controls, disclosure controls and

procedures, and corporate governance policies and

procedures (“controls and procedures”) must be effective

in order to provide assurance that financial reports are

materially accurate. 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.

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. First Horizon Corporation

primarily depends upon common dividends from the Bank

for cash to fund dividends we pay to our common and

preferred shareholders, and to service our outstanding

debt. Whether the Bank is able to pay dividends depends

on its ability to generate sufficient net income to meet

certain regulatory requirements, and the amount of such

dividends may then be limited by federal and state laws.

In addition, in certain circumstances, regulatory

constraints might limit or prevent the Bank from declaring

and paying dividends to us without regulatory approval.

Also, we are required to provide financial support to the

Bank. Accordingly, at any given time a portion of our funds

may need to be used for that purpose and therefore

would be unavailable for dividends.

Our shareholders may suffer dilution if we raise capital

through public or private equity financings to fund our

operations, to increase our capital, or to expand. 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. We may also issue equity securities directly

as consideration for acquisitions we may make that would

be dilutive to shareholders in terms of voting power and

share-of-ownership, and could be dilutive financially or

economically. We have engaged in securities issuances in

the past that have resulted in the effects described in this

paragraph and could do so again in the future.

   

	34	2025 FORM 10-K ANNUAL REPORT

ITEM 1A. RISK FACTORS
Table of Contents

We must pay all preferred dividends ahead of any

common dividends. Currently we have four series of

preferred stock outstanding, one issued by the Bank and

three by First Horizon Corporation. Under the terms of the

preferred stock, no dividends can be declared or paid on

shares of common stock, and no shares of common stock

can be repurchased, redeemed or otherwise acquired by

First Horizon or the Bank, unless the full dividends for the

most recently completed dividend period for each series

of preferred stock have been declared and paid in full or

declared and a sum sufficient for payment of those

dividends has been set aside. Subject to capital needs and

market conditions, additional series of preferred stock

may be issued in the future.

Provisions of Tennessee law, and certain provisions of

our charter and bylaws, could make it more difficult for a

third party to acquire control of us or could have the

effect of discouraging a third party from attempting to

acquire control of us. These provisions could make it

more difficult for a third party to acquire us even if an

acquisition might be at a price attractive to many of our

shareholders. In addition, federal banking laws prohibit

non-financial-industry companies from owning a bank and

require regulatory approval of any change in control of a

bank, and Tennessee banking laws require prior regulatory

approval of the acquisition of control of a Tennessee bank

(or a person controlling such a bank).

Certain legal rights of holders of our common stock and

of depositary shares related to our preferred stock to

pursue claims against us or the depositary, as applicable,

are limited by our bylaws and by the terms of the deposit

agreements. 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 C preferred

stock, 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.

The foregoing exclusive forum clauses may have the effect

of discouraging lawsuits against us or our directors,

officers or other associates, or against the depositary, as

applicable. 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.

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. To the

extent these exclusive forum clauses restrict the courts in

which holders of our common stock or depositary shares

may bring claims arising under the federal securities laws,

there is uncertainty as to whether a court would enforce

such provisions. 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.

   

	35	2025 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.

Item 1C.Cybersecurity

The Cybersecurity Risk Management section within our 2025 MD&A (Item 7), beginning on page 72 of this report, is

incorporated herein by reference.

Item 2.Properties

We own or lease no single physical property that we

consider to be materially important to our financial

condition or results from operations. In addition to the

banking centers and other offices mentioned in Item 1, we

own or lease other offices and office buildings, such as our

headquarters building at 165 Madison Avenue in

downtown Memphis, Tennessee. Although some of these

other offices contain banking centers or other client-facing

offices, primarily they are used for operational and

administrative functions. Our operational and

administrative offices are located in several cities where

we have banking centers. At December 31, 2025, we

believe our physical properties are suitable and adequate

for the businesses we conduct.

Item 3.Legal Proceedings

The Contingencies section from Note 16—Contingencies and Other Disclosures, beginning on page 141 of this report within

our 2025 Financial Statements (Item 8), is incorporated herein by reference.

Item 4.Mine Safety Disclosures

Not applicable.

   

	36	2025 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, 2026. The executive officers generally are

elected at the April meeting of our Board of Directors for a

term of one year and until their successors are elected

and qualified.

Mr. Jordan has an Employment Agreement with us. Under

it, Mr. Jordan will continue to be employed as President

and Chief Executive Officer for a term expiring August 3,

2028. Mr. 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. Ardoin Age: 56	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. 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. Argo Age: 47	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. 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: 47 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. (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. Fleming Age: 64 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).
Tanya L. Hart Age: 56	Senior Executive Vice President—Chief Human Resources Officer of First Horizon & the Bank (2024) Mrs. 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. Hart served in several roles with First Horizon and the Bank, most recently (before her current role) Executive Vice President—Total Rewards (2016-2021)
Thomas Hung Age: 44	Senior Executive Vice President—Chief Credit Officer of First Horizon & the Bank (2024) Mr. 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).  Prior to that, he served as Executive Vice President – Franchise Finance (2022-2024) and before that, Senior Vice President – Franchise Finance (2019-2022).

   

	37	2025 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. Bryan Jordan Age: 64 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. He resumed being Chairman in 2022 on the second anniversary of the IBKC merger. From 2007 until 2008 Mr. Jordan was Executive Vice President and Chief Financial Officer of First Horizon and the Bank. From 2000 until 2002 Mr. Jordan was Comptroller, and from 2002 until 2007 Mr. Jordan was Chief Financial Officer, of Regions Financial Corp. During that time he was also an Executive Vice President and a Senior Executive Vice President of Regions.
Tammy S. LoCascio Age: 57	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. 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.
Anthony J. Restel Age: 56	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. 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). During his tenure as Chief Financial Officer, Mr. Restel also served as Chief Credit Officer of IBERIABANK (2007-2009).
T. Lang Wiseman Age: 54	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. 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.

Selected Other Corporate Officers

Shannon M. Hernandez

Senior Vice President, Assistant

General Counsel, and Corporate

Secretary

Dane P. Smith

Senior Vice President

Corporate Treasurer

   

	38	2025 FORM 10-K ANNUAL REPORT

ITEM 5. MARKET FOR COMMON EQUITY, STOCKHOLDER MATTERS, & EQUITY PURCHASES AND ITEM 6.
Table of Contents

PART  II

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. At December 31, 2025, there were

approximately 7,873 shareholders of record of our

common stock.

Sales of Unregistered Common and Preferred Stock

Common Stock. Not applicable.

Preferred Stock. Not applicable.

Repurchases 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 

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. We evaluate the

level of capital and take action designed to generate or

use capital as appropriate for the interests of the

shareholders.

Additional information concerning repurchase activity

during the final three months of 2025 is presented in

Tables 7.22, 7.23 and 7.24, and the surrounding notes and

other text under the caption Common Stock Purchase

Programs beginning on page 65 of our 2025 MD&A (Item

7), which information is incorporated herein by this

reference.

Total Shareholder Return Performance Graph

The “Total Shareholder Return 2020-2025” performance

graph below, along with Table 5.1, is “furnished” and not

“filed” as part of this report, and is not deemed to be

soliciting material. 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 2020-2025” performance graph nor

Table 5.1 shall be incorporated by reference into any such

filings.

The “Total Shareholder Return 2020-2025” performance

graph compares the yearly percentage change in our

cumulative total shareholder return with returns based on

the Standard and Poor’s 500, the Keefe, Bruyette &

Woods (KBW) Nasdaq Regional Banking Index (KRX), and

the KBW Nasdaq Bank Index (BKX). The graph assumes

$100 is invested on December 31, 2020 and dividends are

reinvested. Returns are market-capitalization weighted.

At year-end 2020 and later, FHN is included in the KBW

Nasdaq Bank Index (BKX). The change in index from the

KBW Nasdaq Regional Banking Index for 2019 and earlier

resulted from the merger of equals in 2020 between FHN

and IBERIABANK Corporation.

At year-end 2022, FHN's stock price was significantly

boosted by the then-pending acquisition of FHN by TD for

an all-cash purchase price of over $25 per FHN share.

   

	39	2025 FORM 10-K ANNUAL REPORT

ITEM 5. MARKET FOR COMMON EQUITY, STOCKHOLDER MATTERS, & EQUITY PURCHASES AND ITEM 6.
Table of Contents

After TD was unable to obtain regulatory approval, the TD

Transaction was terminated by the parties in May 2023.

Table 5.1 

TOTAL SHAREHOLDER RETURN DATA

	2020	2021	2022	2023	2024	2025
First Horizon Corporation (FHN)	$100.00	$132.63	$204.16	$123.51	$182.38	$222.72
S&P 500 Index	$100.00	$128.68	$105.36	$133.03	$166.28	$195.98
KBW Nasdaq Regional Banking Index (KRX)	$100.00	$136.65	$127.19	$126.69	$143.42	$152.74
KBW Nasdaq Bank Index (BKX)	$100.00	$138.34	$108.74	$107.77	$147.87	$196.02

Data source: Bloomberg

Item 6.[Reserved]

   

	40	2025 FORM 10-K ANNUAL REPORT

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

Item 7.Management's Discussion and Analysis

of Financial Condition and Results of

Operations

TABLE OF ITEM 7 TOPICS

Introduction	41
Financial Performance Summary	41
Results of Operations	42
Analysis of Financial Condition	48
Capital	63
Risk Management	67
Market Uncertainties and Prospective Trends	77
Critical Accounting Policies and Estimates	80
Accounting Changes	82
Non-GAAP Information	82

   

	41	2025 FORM 10-K ANNUAL REPORT

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

Introduction

First Horizon Corporation (NYSE common stock trading

symbol “FHN”) is a financial holding company

headquartered in Memphis, Tennessee. FHN’s principal

subsidiary, and only banking subsidiary, is First Horizon

Bank. 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, 2025, FHN had over 450 business locations

in 23 states, including over 400 banking centers in 12

states, and employed approximately 7,400 associates.

This MD&A should be read in conjunction with the

accompanying audited Consolidated Financial Statements

and Notes to the Consolidated Financial Statements in

Part II, Item 8 of this Form 10-K, as well as with the other

information contained in this report.

Financial Performance Summary

Table 7.1

SELECTED FINANCIAL DATA

	For the years ended December 31,
(Dollars in millions, except per share data)	2025		2024		2023
Pre-provision net revenue (a)	$1,345		$1,155		$1,388
Diluted earnings per common share	$1.87		$1.36		$1.54
Return on average assets (b)	1.22%		0.97%		1.12%
Return on average common equity (c)	11.30%		8.80%		11.01%
Return on average tangible common equity (a) (d)	14.01%		10.99%		14.10%
Net interest margin (e)	3.47%		3.35%		3.42%
Noninterest income to total revenue (f)	23.30%		23.44%		26.83%
Efficiency ratio (g)	60.66%		62.06%		59.91%
Allowance for loan and lease losses to total loans and leases	1.15%		1.30%		1.26%
Net charge-offs (recoveries) to average loans and leases	0.19%		0.18%		0.28%
Total period-end equity to period-end assets	10.90%		11.09%		11.38%
Tangible common equity to tangible assets (a)	8.37%		8.37%		8.48%
Cash dividends declared per common share	$0.60		$0.60		$0.60
Book value per common share	$17.53		$16.00		$15.17
Tangible book value per common share (a)	$14.20		$12.85		$12.13
Common equity Tier 1	10.63%		11.20%		11.40%
Market capitalization	$11,587		$10,559		$7,913

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

(b) Calculated using net income divided by average assets.

(c) Calculated using net income available to common shareholders divided by average common equity.

(d) Calculated using net income available to common shareholders divided by average tangible common equity.

(e) Net interest margin is computed using total net interest income adjusted to an FTE basis assuming a statutory federal income tax rate of 21% and,

where applicable, state income taxes.

(f) Ratio is noninterest income excluding securities gains (losses) to total revenue excluding securities gains (losses).

(g) Ratio is noninterest expense to total revenue excluding securities gains (losses).

2025 Financial Performance Review

FHN reported net income available to common

shareholders of $956 million, or $1.87 per diluted share,

for the year ended December 31, 2025, an increase of

$218 million compared to $738 million, or $1.36 per

diluted share, for the same period of 2024.

Net interest income of $2.6 billion increased $111 million

compared to 2024, largely driven by lower deposit pricing

and higher loan balances, specifically in high-yielding loans

to mortgage companies. The net interest margin increased

12 basis points to 3.47% compared to 3.35% in 2024.

Provision for credit losses decreased to $65 million

compared to $150 million in 2024, largely reflecting

declines in criticized and classified loans and a more

favorable portfolio mix. Net charge-offs were $120 million,

   

	42	2025 FORM 10-K ANNUAL REPORT

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

or 19 basis points, compared to $112 million, or 18 basis

points in 2024. The ACL to loans ratio decreased to 1.31%

from 1.43% in 2024, reflecting criticized and classified loan

resolutions throughout the year as well as a favorable

portfolio mix shift.

Noninterest income of $797 million increased $118

million, or 17%, from 2024, largely driven by the prior year

impact of $91 million in net securities losses from a

restructuring of the securities portfolio. In addition, the

countercyclical businesses improved during 2025 as fixed

income increased $19 million and mortgage banking

income increased $8 million.

Noninterest expense of $2.1 billion increased $39 million,

or 2%, from 2024, largely attributable to higher personnel

expense from talent additions and increases in occupancy,

software, and legal and professional fees, partially offset

by lower deposit insurance expense.

Period-end loans and leases of $64.2 billion increased

$1.6 billion from December 31, 2024, largely driven by

commercial loan growth, as loans to mortgage companies

and other C&I loans each grew $1.2 billion, offset by a

decline in CRE loans of $858 million. 

Period-end deposits of $67.5 billion increased $1.9 billion

from December 31, 2024, as interest-bearing deposits

increased $2.1 billion and noninterest-bearing deposits

decreased $198 million.

Tier 1 risk-based capital and total risk-based capital ratios

at December 31, 2025 were 11.51% and 13.35%,

respectively, compared to 12.22% and 14.25% at

December 31, 2024. The CET1 ratio was 10.63% at

December 31, 2025 compared to 11.20% at December 31,

2024.

Results of Operations—2025 compared to 2024

Following is a discussion of FHN's results of operations for 2025 compared to 2024. For a description of FHN's results of

operations for 2024, see Results of Operations - 2024 compared to 2023 in Item 7 in the 2024 Form 10-K which is incorporated

herein by reference.

Net Interest Income

Net interest income is FHN's largest source of revenue and

is the difference between the interest earned on interest-

earning assets (generally loans, leases and investment

securities) and the interest expense incurred in

connection with interest-bearing liabilities (generally

deposits and borrowed funds). The level of net interest

income is primarily a function of the difference between

the effective yield on average interest-earning assets and

the effective cost of interest-bearing liabilities. These

factors are influenced by the pricing and mix of interest-

earning assets and interest-bearing liabilities which, in

turn, are impacted by external factors such as local

economic conditions, competition for loans and deposits,

the monetary policy of the FRB, and market interest rates.

Net interest income of $2.6 billion in 2025 increased

$111 million, or 4%, from 2024. The increase was largely

attributable to lower deposit pricing, partially offset by

lower loan yields. Interest income decreased $166 million,

largely driven by lower interest on loans and leases of

$176 million. Interest expense decreased $277 million,

largely due to lower interest expense on deposits of $281

million.

FHN's net interest margin increased 12 basis points to

3.47% in 2025 compared to 2024 and the net interest

spread increased 31 basis points to 2.69% over the same

period. The increase in the margin was attributable to a 57

basis point decrease in the cost of interest-bearing

liabilities, partially offset by a 26 basis point decrease in

earning asset yields.

Total average earning assets increased $469 million in

2025, largely driven by average loan growth of $605

million and a $220 million increase in average trading

securities, partially offset by lower average interest-

bearing deposits with banks of $351 million. Total average

interest-bearing liabilities increased $937 million, largely

driven by an increase of $514 million in federal funds

purchased and securities sold under agreements to

repurchase, $206 million in term borrowings, and average

interest-bearing deposit growth of $224 million.

The following table presents the major components of net

interest income and net interest margin.

   

	43	2025 FORM 10-K ANNUAL REPORT

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

Table 7.2

AVERAGE BALANCES, NET INTEREST INCOME AND YIELDS/RATES

(Dollars in millions)		2025						2024						2023
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		$47,762		$2,964		6.21%		$47,429		$3,166		6.68%		$46,175		$2,958		6.41%
Consumer loans		14,848		745		5.01		14,576		720		4.93		13,994		630		4.48
Total loans and leases		62,610		3,709		5.92		62,005		3,886		6.27		60,169		3,588		5.96
Loans held for sale		497		34		6.79		472		36		7.61		664		51		7.71
Investment securities		9,295		284		3.06		9,386		244		2.60		9,912		250		2.52
Trading securities		1,619		92		5.66		1,399		85		6.12		1,179		78		6.62
Federal funds sold		8		—		4.73		39		2		5.61		61		4		5.56
Securities purchased under agreements to resell		658		27		4.12		566		29		5.01		318		15		4.81
Interest-bearing deposits with banks		1,254		54		4.32		1,605		85		5.29		2,504		130		5.20
Total earning assets / Total interest income		$75,941		$4,200		5.53%		$75,472		$4,367		5.79%		$74,807		$4,116		5.50%
Cash and due from banks		878						917						1,012
Goodwill and other intangible assets, net		1,633						1,674						1,720
Premises and equipment, net		560						580						596
Allowance for loan and lease losses		(809)						(812)						(740)
Other assets		3,816						3,991						4,288
Total assets		$82,019						$81,822						$81,683
Liabilities and shareholders' equity:
Interest-bearing deposits:
Savings		$26,366		$704		2.67%		$25,941		$848		3.27%		$23,547		$679		2.88%
Other interest-bearing deposits		16,729		389		2.32		16,215		449		2.77		15,300		351		2.30
Time deposits		6,509		246		3.77		7,224		323		4.47		6,095		236		3.87
Total interest-bearing deposits		49,604		1,339		2.70		49,380		1,620		3.28		44,942		1,266		2.82
Federal funds purchased		801		34		4.32		420		22		5.34		349		18		5.12
Securities sold under agreements to repurchase		1,853		57		3.07		1,720		66		3.83		1,426		52		3.66
Trading liabilities		644		26		4.01		555		24		4.22		301		12		4.16
Other short-term borrowings		685		30		4.37		781		42		5.38		2,688		140		5.19
Term borrowings		1,386		78		5.65		1,180		67		5.63		1,335		72		5.39
Total interest-bearing liabilities / Total interest expense		$54,973		$1,564		2.84%		$54,036		$1,841		3.41%		$51,041		$1,560		3.06%
Noninterest-bearing deposits		15,831						16,297						19,341
Other liabilities		2,073						2,353						2,396
Total liabilities		72,877						72,686						72,778
Shareholders' equity		8,847						8,841						8,610
Noncontrolling interest		295						295						295
Total shareholders' equity		9,142						9,136						8,905
Total liabilities and shareholders' equity		$82,019						$81,822						$81,683
Net earning assets / Net interest income (TE) / Net interest spread		$20,968		$2,636		2.69%		$21,436		$2,526		2.38%		$23,766		$2,556		2.44%
Taxable equivalent adjustment				(14)		0.78				(15)		0.97				(16)		0.98
Net interest income / Net interest margin (a)				$2,622		3.47%				$2,511		3.35%				$2,540		3.42%

(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.

   

	44	2025 FORM 10-K ANNUAL REPORT

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

The following table presents the changes in interest income and interest expense due to changes in both average rate and

average volume.

Table 7.3

ANALYSIS OF CHANGES IN NET INTEREST INCOME

		2025 Compared to 2024						2024 Compared to 2023
		Increase (Decrease) Due to (a)						Increase (Decrease) Due to (a)
(Dollars in millions)		Rate (b)		Volume (b)		Total		Rate (b)		Volume (b)		Total
Interest income:
Loans and leases (c)		$(213)		$36		$(177)		$183		$115		$298
Loans held for sale		(4)		2		(2)		(1)		(14)		(15)
Investment securities (c)		43		(3)		40		7		(13)		(6)
Trading securities		(6)		13		7		(6)		13		7
Other earning assets:
Federal funds sold		—		(2)		(2)		—		(2)		(2)
Securities purchased under agreements to resell		(6)		4		(2)		1		13		14
Interest-bearing deposits with banks		(14)		(17)		(31)		2		(47)		(45)
Total other earning assets		(20)		(15)		(35)		3		(36)		(33)
Total change in interest income - earning assets		$(200)		$33		$(167)		$186		$65		$251
Interest expense:
Interest-bearing deposits:
Savings		$(158)		$14		$(144)		$96		$73		$169
Other interest-bearing deposits		(74)		14		(60)		75		23		98
Time deposits		(47)		(30)		(77)		39		48		87
Total interest-bearing deposits		(279)		(2)		(281)		210		144		354
Federal funds purchased		(5)		17		12		1		3		4
Securities sold under agreements to repurchase		(14)		5		(9)		2		12		14
Trading liabilities		(1)		3		2		—		12		12
Other short-term borrowings		(7)		(5)		(12)		4		(102)		(98)
Term borrowings		—		11		11		3		(8)		(5)
Total change in interest expense - interest-bearing liabilities		(306)		29		(277)		220		61		281
Net interest income, taxable equivalent		$106		$4		$110		$(34)		$4		$(30)

(a)The changes in interest due to both rate and volume have been allocated to change due to rate and change due to volume in proportion to the absolute

amounts of the changes in each.

(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.

   

	45	2025 FORM 10-K ANNUAL REPORT

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

Provision for Credit Losses

Provision for credit losses includes the provision for loan

and lease losses and the provision for unfunded lending

commitments. The provision for credit losses is the

expense necessary to maintain the ALLL and the accrual

for unfunded lending commitments at levels appropriate

to absorb management’s estimate of credit losses

expected over the life of the loan and lease portfolio and

the portfolio of unfunded loan commitments.

Provision for credit losses decreased to $65 million in

2025, compared to $150 million in 2024, largely reflecting

declines in criticized and classified loans and a more

favorable portfolio mix. Net charge-offs were $120 million

in 2025 compared to $112 million in 2024.

For additional information about general asset quality

trends, refer to the Allowance for Credit Losses and the

Asset Quality sections in this MD&A.

Noninterest Income

The following table presents the significant components of noninterest income for each of the periods presented.

Table 7.4

NONINTEREST INCOME

								2025 vs. 2024				2024 vs. 2023
(Dollars in millions)		2025		2024		2023		$ Change		% Change		$ Change		% Change
Noninterest income
Fixed income		$206		$187		$133		$19		10%		$54		41%
Deposit transactions and cash management		169		176		179		(7)		(4)		(3)		(2)
Brokerage, management fees and commissions		105		101		90		4		4		11		12
Card and digital banking fees		74		77		77		(3)		(4)		—		—
Other service charges and fees		60		51		54		9		18		(3)		(6)
Trust services and investment management		51		48		47		3		6		1		2
Mortgage banking income		43		35		23		8		23		12		52
Gain on merger termination		—		—		225		—		—		(225)		(100)
Securities gains (losses), net		1		(89)		(4)		90		NM		(85)		NM
Other income		88		93		103		(5)		(5)		(10)		(10)
Total noninterest income		$797		$679		$927		$118		17%		$(248)		(27)%

NM – Not meaningful

Noninterest income of $797 million increased $118 million

from $679 million in 2024, largely driven by prior year

securities losses of $91 million from a restructuring of the

AFS portfolio, as well as increases in fixed income and

mortgage banking income. Noninterest income

represented 23% and 21% of total revenue for 2025 and

2024, respectively.

Fixed income improved $19 million, or 10%, for 2025

compared to 2024. Fixed income product revenue

increased $13 million, largely driven by more favorable

market conditions. Revenue from other products

increased $6 million, largely driven by increases in

revenues from loan sales.

Deposit transactions and cash management fees

decreased $7 million, largely attributable to lower

overdraft fees.

Other service charges and fees increased $9 million,

largely driven by elevated income related to the

equipment finance lease business.

Mortgage banking income of $43 million increased

$8 million from $35 million in 2024, largely driven by a $5

million gain from a sale of mortgage servicing rights.

   

	46	2025 FORM 10-K ANNUAL REPORT

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

Noninterest Expense

The following table presents the significant components of noninterest expense for each of the periods presented.

Table 7.5

NONINTEREST EXPENSE

								2025 vs. 2024				2024 vs. 2023
(Dollars in millions)		2025		2024		2023		$ Change		% Change		$ Change		% Change
Noninterest expense
Personnel expense		$1,159		$1,137		$1,100		$22		2%		$37		3%
Net occupancy expense		139		130		123		9		7		7		6
Computer software		138		121		111		17		14		10		9
Operations services		96		94		87		2		2		7		8
Legal and professional fees		86		64		49		22		34		15		31
Advertising and public relations		54		48		71		6		13		(23)		(32)
Deposit insurance expense		42		64		122		(22)		(34)		(58)		(48)
Contract employment and outsourcing		38		51		49		(13)		(25)		2		4
Amortization of intangible assets		38		44		47		(6)		(14)		(3)		(6)
Contributions		26		18		61		8		44		(43)		(70)
Other expense		258		264		259		(6)		(2)		5		2
Total noninterest expense		$2,074		$2,035		$2,079		$39		2%		$(44)		(2)%

Noninterest expense of $2.1 billion increased $39 million,

or 2%, compared to 2024.

Personnel expense of $1.2 billion increased $22 million

compared to 2024, reflecting talent additions throughout

the year, partially offset by a decline in deferred

compensation expense.

Net occupancy expense increased $9 million , computer

software expense increased $17 million and legal and

professional fees increased $22 million in 2025, largely

attributable to strategic investments in various

technology, risk and product initiatives.

Deposit insurance expense declined $22 million, largely

attributable to a $9 million special assessment expense

credit in 2025, compared to $9 million in special

assessment expense in 2024.

Contract employment and outsourcing decreased $13

million compared to 2024, as expenses related to recent

technology projects were completed.

Contributions expense increased $8 million, largely driven

by a $20 million contribution to the First Horizon

Foundation in 2025, compared to a $10 million

contribution in 2024.

Other expense included $25 million in Visa derivative

valuation expense in 2025 compared to $15 million in

2024, offset by declines in other miscellaneous losses

when comparing the periods.

Income Taxes

FHN recorded income tax expense of $282 million in 2025

compared to $211 million in 2024 , resulting in an effective

tax rate of 22.1% and 21.0%, respectively.

FHN’s effective tax rate is favorably affected by recurring

items such as tax credits and other tax benefits from tax

credit investments, tax-exempt income, and bank-owned

life insurance. The effective rate is unfavorably affected by

the non-deductible portions of FDIC premium and

executive compensation. FHN's effective tax rate also may

be affected by items that may occur in any given period

but are not consistent from period to period, such as

changes in unrecognized tax benefits. The rate also may

be affected by items resulting from business

combinations.

A deferred tax asset ("DTA") or deferred tax liability

("DTL") is recognized for the tax consequences of

temporary differences between the financial statement

carrying amounts and the tax bases of existing assets and

liabilities. The tax consequence is calculated by applying

current enacted statutory tax rates to these temporary

differences in future years. As of December 31, 2025,

FHN’s gross DTA after valuation allowance and gross DTL

were $672 million and $580 million, respectively, resulting

in a net DTA of $92 million at December 31, 2025,

   

	47	2025 FORM 10-K ANNUAL REPORT

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

compared with a net DTA of $227 million at December 31,

2024.

As of December 31, 2025, FHN had DTA balances related

to federal and state income tax carryforwards of $36

million and $4 million, respectively, which will expire at

various dates. Refer to Note 14 - Income Taxes for

additional information.

Based on current analysis, FHN believes that its ability to

realize the net DTA is more likely than not. FHN monitors

its net DTA and the need for a valuation allowance on a

quarterly basis. A significant adverse change in FHN’s

taxable earnings outlook could result in the need for a

valuation allowance.

FHN and its eligible subsidiaries are included in a

consolidated federal income tax return. FHN files separate

returns for subsidiaries that are not eligible to be included

in a consolidated federal income tax return. Based on the

laws of the applicable states where it conducts business

operations, FHN either files consolidated, combined, or

separate returns. The statute of limitations for FHN’s

consolidated federal income tax returns remains open for

tax years 2022 through 2024. Additionally, 2019-2021

could be subject to limited review related to refund claims

and amended returns filed. With few exceptions, the

statute of limitations for FHN's state income tax returns

remains open for tax years 2021 through 2024. Most

states have a three to four year limitation for

assessments. On occasion, as federal or state auditors

examine the tax returns of FHN and its subsidiaries, FHN

may extend the statute of limitations for a reasonable

period. Otherwise, the statutes of limitations remain open

only for tax years in accordance with federal and state

statutes. The earliest year under state audit is 2016. See

Note 14 - Income Taxes to the Consolidated Financial

Statements in Part II, Item 8 of this Report for additional

information.

Federal Tax Legislation

On July 4, 2025, federal legislation commonly referred to

as the “One Big Beautiful Bill Act” was enacted, resulting

in changes to U.S. federal income tax law. The legislation

includes several provisions that may impact the timing and

magnitude of certain tax deductions and tax credits. The

accelerated federal tax deductions for bonus depreciation

and research or experimental expenditures will reduce

FHN's federal tax liability starting in 2025. Since these

provisions solely reflect differences in timing for tax

deductions, they do not affect the recorded amounts of

income tax expense. FHN does not expect a significant

impact from provisions that sunset certain Section 48E

Clean Electricity Tax Credits on its future financial results.

FHN applies the deferral method to all Section 48E credits,

resulting in offset of the credit amount against the related

loan/lease and amortization of the credit to interest

income over the life of the loan/lease, which typically

have long durations. Provisions limiting the deductibility of

annual corporate charitable deductions to amounts in

excess of 1% of taxable income may affect the timing and

amount of charitable donations.

Business Segment Results

FHN's reportable segments include Commercial,

Consumer & Wealth, Wholesale, and Corporate. See Note

19 - Business Segment Information to the Consolidated

Financial Statements in Part II, Item 8 of this Report for

additional disclosures related to FHN's segments.

Commercial, Consumer & Wealth

The Commercial, Consumer & Wealth segment generated

pre-tax income of $1.5 billion in 2025 compared to

$1.4 billion in 2024, an increase of $123 million.

Net interest income of $2.6 billion increased $38 million,

reflecting lower deposit pricing, partially offset by the

impact of lower loan yields.

Provision for credit losses decreased $108 million, largely

reflecting the impact of reductions in criticized and

classified loans and a more favorable portfolio mix.

Noninterest income increased $3 million, as increases in

other service charges and fees and brokerage,

management fees and commissions were offset by

declines in deposit transactions and cash management

income and insurance commissions.

Noninterest expense increased $26 million, largely driven

by higher technology-related expenses and operations

expenses allocated to the segment in the current year,

partially offset by a decline in other expenses.

Wholesale

Pre-tax income of $157 million in the Wholesale segment

increased $35 million compared to 2024, largely reflecting

a $65 million increase in revenue, partially offset by a $21

million increase in noninterest expense.

Net interest income increased $39 million, primarily

attributable to higher income from growth in loans to

mortgage companies. Fixed income of $206 million

increased $19 million, largely driven by more favorable

market conditions. Mortgage banking income of

$41 million increased $8 million, largely reflecting a $5

million gain on mortgage servicing rights sold during 2025.

Noninterest expense of $320 million increased

$21 million, largely due to an increase in incentive-based

compensation expense tied to the improvement in fixed

income and mortgage banking income.

Corporate

Pre-tax loss for the Corporate segment was $417 million

for 2025 compared to $534 million for 2024.

   

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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
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Net interest income (expense) improved $34 million

compared to 2024, primarily driven by higher yields on

investment securities and the impact of the funds transfer

pricing methodology.

Noninterest income increased $89 million, largely

attributable to $91 million in net securities losses in 2024

tied to an opportunistic restructuring of a portion of the

AFS securities portfolio. 

Noninterest expense of $311 million for 2025 decreased

$8 million compared to 2024, as lower FDIC special

assessment expense and contract employment and

outsourcing expense were partially offset by increases in

computer software, legal and professional fees, and Visa

derivative valuation expense. Restructuring expenses

were immaterial in 2025 and totaled $14 million in 2024.

Analysis of Financial Condition

Investment Securities

The following table presents the carrying value of securities by category as of December 31 for the years indicated.

Table 7.6

COMPOSITION OF SECURITIES PORTFOLIO

	2025				2024
(Dollars in millions)	Balance		Mix		Balance		Mix
Securities available for sale at fair value:
Government agency issued MBS and CMO (a)	$6,510		69%		$6,469		70%
Other U.S. government agencies (a)	1,317		14		1,073		12
States and municipalities	338		4		354		4
Total securities available for sale	$8,165		87%		$7,896		86%
Securities held to maturity at amortized cost:
Government agency issued MBS and CMO (a)	$1,216		13%		$1,270		14%
Total investment securities	$9,381		100%		$9,166		100%

(a) Includes securities issued by government sponsored entities which are not backed by the full faith and credit of the U.S. 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. The securities portfolio is

periodically evaluated in light of established ALM

objectives, changing market conditions that could affect

the profitability of the portfolio, the regulatory

environment, and the level of interest rate risk to which

FHN is exposed. These evaluations may result in steps

taken to adjust the overall balance sheet positioning.

Investment securities were $9.4 billion and $9.2 billion on

December 31, 2025 and 2024, representing 11% of total

assets for both periods. During 2024, as part of an

opportunistic restructuring of a portion of the securities

portfolio, FHN sold $1.2 billion of AFS securities, which

resulted in realized losses of $91 million for the year

ended December 31, 2024. See Note 2 - Investment

Securities to the Consolidated Financial Statements in Part

II, Item 8 of this Report for more information about the

securities portfolio.

The following table presents an analysis of the amortized

cost, remaining contractual maturities, and weighted-

average yields by contractual maturity for the debt

securities portfolio.

   

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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
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Table 7.7

CONTRACTUAL MATURITIES OF INVESTMENT SECURITIES

	As of December 31, 2025
					After 1 year				After 5 years
	Within 1 year				Within 5 years				Within 10 years				After 10 years				Total
(Dollars in millions)	Amount		Yield (b)		Amount		Yield (b)		Amount		Yield (b)		Amount		Yield (b)		Amount		Yield (b)
Securities available for sale:
Government agency issued MBS and CMO (a)	$188		2.21	%	$1,446		3.33	%	$665		3.44	%	$4,757		2.60	%	$7,056		3.06	%
Other U.S. government agencies	1		1.39		101		1.37		351		4.07		971		2.99		1,424		3.20
States and municipalities	10		1.39		23		1.29		177		2.50		151		3.24		361		3.31
Total securities available for sale	$199		2.16	%	$1,570		3.17	%	$1,193		3.49	%	$5,879		2.68	%	$8,841		3.09	%
Securities held to maturity:
Government agency issued MBS and CMO (a)	$—		—	%	$265		3.46	%	$54		3.70	%	$897		2.57	%	$1,216		2.82	%
Total securities held to maturity	$—		—	%	$265		3.46	%	$54		3.70	%	$897		2.57	%	$1,216		2.82	%

(a)Represents government agency-issued mortgage-backed securities and collateralized mortgage obligations which, when adjusted for early paydowns,

have an estimated average life of 4.5 years.

(b)Weighted average yields were calculated using amortized cost on a fully taxable equivalent basis, assuming a 24.5% tax rate where applicable.

Loans and Leases

Period-end loans and leases increased $1.6 billion, or 3%,

to $64.2 billion as of December 31, 2025. Commercial

loans and leases increased $1.6 billion, primarily from

growth in loans to mortgage companies and other C&I

loans, partially offset by a decline in CRE loans. Consumer

loans decreased $28 million, primarily due to declines in

consumer construction loans, other consumer loans, and

real estate installment loans, partially offset by growth in

HELOCs. Average loans and leases increased to $62.6

billion in 2025 compared to $62.0 billion in 2024, primarily

driven by a $333 million increase in commercial loans and

a $272 million increase in consumer loans.

The following table provides detail regarding FHN's

period-end loans and leases.

Table 7.8

 LOANS AND LEASES

(Dollars in millions)		2025		Percent  of total		2025 Growth Rate		2024		Percent  of total		2024 Growth Rate		2023		Percent  of total		2023 Growth Rate
Commercial:
Commercial, financial, and industrial (a)		$35,905		56%		7%		$33,428		53%		2%		$32,633		53%		3%
Commercial real estate		13,563		21		(6)		14,421		23		1		14,216		23		7
Total commercial		49,468		77		3		47,849		76		2		46,849		76		4
Consumer:
Consumer real estate		14,108		22		—		14,047		23		3		13,650		23		11
Credit card and other		580		1		(13)		669		1		(16)		793		1		(6)
Total consumer		14,688		23		—		14,716		24		2		14,443		24		10
Total loans and leases		$64,156		100%		3%		$62,565		100%		2%		$61,292		100%		5%

(a) Includes equipment financing loans and leases.

   

	50	2025 FORM 10-K ANNUAL REPORT

ITEM 7. 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, 2025.

Table 7.9

CONTRACTUAL MATURITIES OF LOANS AND LEASES

(Dollars in millions)	Within 1 Year		After 1 Year Within 5 Years		After 5 Years Within 15 Years		After 15 Years		Total
Commercial, financial, and industrial	$9,478		$19,225		$6,484		$718		$35,905
Commercial real estate	3,879		7,862		1,777		45		13,563
Consumer real estate	32		146		1,002		12,928		14,108
Credit card and other	214		266		61		39		580
Total loans and leases	$13,603		$27,499		$9,324		$13,730		$64,156
For maturities over one year at fixed interest rates:
Commercial, financial, and industrial			$5,462		$4,461		$676		$10,599
Commercial real estate			2,363		736		40		3,139
Consumer real estate			119		869		3,101		4,089
Credit card and other			55		23		27		105
Total loans and leases at fixed interest rates			$7,999		$6,089		$3,844		$17,932
For maturities over one year at floating interest rates:
Commercial, financial, and industrial			$13,763		$2,023		$42		$15,828
Commercial real estate			5,499		1,041		5		6,545
Consumer real estate			27		133		9,827		9,987
Credit card and other			211		38		12		261
Total loans and leases at floating interest rates			$19,500		$3,235		$9,886		$32,621
Total maturities over one year			$27,499		$9,324		$13,730		$50,553

Because of various factors, the contractual maturities of

consumer loans are not indicative of the actual lives of

such loans. A significant component of FHN’s loan

portfolio consists of consumer real estate loans, a majority

of which are home equity lines of credit and home equity

installment loans. These loans have an initial period where

the borrower is only required to pay the periodic interest.

After the interest-only period, the loan will require the

payment of both principal and interest over the remaining

term. Numerous factors can contribute to the actual life of

a home equity line or installment loan. As a result, the

actual average life of home equity lines and loans is

difficult to predict, and changes in any of these factors

could result in changes in projections of average lives.

Loans Held for Sale

Loans held for sale primarily consists of government

guaranteed loans under SBA and USDA lending programs.

Smaller amounts of other consumer and home equity

loans are also included in loans HFS. Additionally, FHN's

mortgage banking operations include origination and

servicing of residential first lien mortgages that conform

to standards established by GSEs that are major investors

in U.S. home mortgages but can also consist of junior lien

and jumbo loans secured by residential property. These

non-conforming loans are primarily sold to private

companies that are unaffiliated with the GSEs on a

servicing-released basis. For further detail, see Note 7 -

Mortgage Banking Activity to the Consolidated Financial

Statements in Part II, Item 8 of this Report.

On December 31, 2025 and 2024, loans HFS were $406

million and $551 million, respectively. Held-for-sale

consumer mortgage loans secured by residential real

estate in process of foreclosure totaled $1 million for both

December 31, 2025 and 2024.

   

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

Loan and Lease Portfolio Composition

FHN groups its loans into portfolio segments based on

internal classifications reflecting the manner in which the

ALLL is established and how credit risk is measured,

monitored, and reported. From time to time, and if

conditions are such that certain subsegments are uniquely

affected by economic or market conditions or are

experiencing greater deterioration than other

components of the loan portfolio, management may

determine the ALLL at a more granular level. Commercial

loans are comprised of C&I loans and leases and CRE

loans. Consumer loans are comprised of consumer real

estate loans and credit card and other loans. FHN had a

concentration of residential real estate loans of 22% and

23% of total loans as of December 31, 2025 and 2024,

respectively. Industry concentrations are discussed under

the C&I heading below.

Underwriting Policies and Procedures

The following sections describe each portfolio as well as

general underwriting procedures for each. As economic

and real estate conditions develop, enhancements to

underwriting and credit policies and procedures may be

necessary or desirable. Loan policies and procedures for

all portfolios are reviewed by credit risk working groups

and management risk committees comprised of business

line managers and credit administration professionals, as

well as by various other reviewing bodies within FHN.

Policies and procedures are approved by key executives

and/or senior managers leading the applicable credit risk

working groups, as well as by management risk

committees.

The credit risk working groups and management risk

committees strive to ensure that the approved policies

and procedures address the associated risks and establish

reasonable underwriting criteria that appropriately

mitigate risk. Policies and procedures are reviewed,

revised, and re-issued periodically at established review

dates or earlier if changes in the economic environment,

portfolio performance, size of portfolio or industry

concentrations, or regulatory guidance warrant an earlier

review.

Commercial Loan and Lease Portfolios

FHN’s commercial loan approval process grants lending

authority based upon job description, experience, and

performance. The lending authority is delegated to Line of

Business Leaders, Relationship Managers ("RMs"),

Portfolio Managers ("PMs"), and Credit Officers. While

individual limits vary, the predominant amount of

approval authority is vested with the Credit function.

Portfolio, industry, and borrower concentration limits for

the various portfolios are established by executive

management and approved by the Risk Committee of the

Board.

FHN’s commercial lending process incorporates an RM

and a PM for most commercial credits. 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.

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. Loan closing officers

and the construction loan management unit specialize in

loan documentation and the management of the

construction lending process. FHN strives to identify

problem assets early through comprehensive policies and

guidelines, targeted portfolio reviews, more frequent

servicing on lower rated borrowers, and an emphasis on

frequent grading. 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 two underwriting units

in order to originate and grade these credits more

efficiently and consistently. Decisioning of income-

producing CRE loans is managed within Centralized

Commercial Lending ($5 million or less in CRE exposure) or

the CRE Credit unit (greater than $5 million in CRE

exposure).

C&I

C&I loans are the largest component of the loan and lease

portfolio, comprising 56% and 53% of total loans and

leases as of December 31, 2025 and 2024, respectively.

The C&I portfolio is comprised of loans used for general

business purposes. Products offered in the C&I portfolio

include term loan financing of owner-occupied real estate

and fixed assets, direct financing and sales-type leases,

working capital lines of credit, and trade credit

enhancement through letters of credit.

   

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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
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Income-producing C&I loans are underwritten in

accordance with a well-defined credit origination process.

This process includes applying minimum underwriting

standards, as well as separation of origination and credit

approval roles on transaction sizes over PM authorization

limits. Underwriting typically includes due diligence of the

borrower and the applicable industry of the borrower,

analysis of the borrower’s available financial information,

identification and analysis of the various sources of

repayment, and identification of the primary risk

attributes. Stress testing the borrower’s financial capacity,

adherence to loan documentation requirements, and

assigning credit risk grades using internally developed

scorecards are also used to help quantify the risk when

appropriate. Underwriting parameters also include loan-

to-value ratios which vary depending on collateral type,

use of guaranties, loan agreement requirements, and

other recommended terms such as equity requirements,

amortization, and maturity. Approval decisions also

consider various financial ratios and performance

measures of the borrowers, such as cash flow and balance

sheet leverage, liquidity, coverage of fixed charges, and

working capital. Additionally, approval decisions consider

the capital structure of the borrower, sponsorship, and

quality/value of collateral. Generally, guideline and policy

exceptions are identified and mitigated during the

approval process. Pricing of C&I loans is based upon tenor

and the determined credit risk specific to the individual

borrower. Historically, the majority of these loans typically

have variable rates tied to SOFR or Prime Rate of interest

plus or minus the appropriate margin.

The largest geographical concentrations of C&I balances as

of December 31, 2025 were in Tennessee (20%), Florida

(12%), Texas (10%), California (7%), North Carolina (6%), 

and Louisiana (6%), with no other state representing more

than 5% of the portfolio. This mix was generally consistent

with December 31, 2024.

The following table provides the composition of the C&I

portfolio by industry as of December 31, 2025 and 2024.

For purposes of this disclosure, industries are determined

based on the North American Industry Classification

System ("NAICS") industry codes used by Federal

statistical agencies in classifying business establishments

for the collection, analysis, and publication of statistical

data related to the U.S. business economy.

Table 7.10

C&I PORTFOLIO BY INDUSTRY

		December 31, 2025				December 31, 2024
(Dollars in millions)		Amount		Percent		Amount		Percent
Industry:
Loans to mortgage companies		$4,703		13%		$3,471		10%
Finance and insurance		4,117		12		3,666		11
Real estate and rental and leasing (a)		3,965		11		3,888		12
Wholesale trade		2,645		7		2,433		7
Health care and social assistance		2,564		7		2,576		8
Accommodation and food service		2,322		7		2,198		7
Manufacturing		2,305		6		2,312		7
Retail trade		1,802		5		1,756		5
Transportation and warehousing		1,740		5		1,616		5
Other (construction, professional, energy, etc.) (b)		9,742		27		9,512		28
Total C&I loan portfolio		$35,905		100%		$33,428		100%

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

(b) Industries in this category each comprise less than 5%.

Industry Concentrations

Loan concentrations are considered to exist for a financial

institution when there are loans to numerous borrowers

engaged in similar activities that would cause them to be

similarly impacted by economic or other conditions. Loans

to mortgage companies and borrowers in the finance and

insurance industry were 25% and 21% of FHN’s C&I loan

portfolio as of December 31, 2025 and 2024, respectively,

and as a result could be affected by items that uniquely

impact the financial services industry. Loans to borrowers

in the real estate and rental and leasing industry were

11% and 12% of FHN's C&I portfolio as of December 31,

2025 and 2024, respectively. As of December 31, 2025,

FHN did not have any other concentrations of C&I loans in

any single industry of 10% or more of total loans.

Loans to Mortgage Companies

Loans to mortgage companies were 13% and 10% of the

C&I portfolio as of December 31, 2025 and 2024,

respectively. This portfolio includes commercial lines of

credit to qualified mortgage companies primarily for the

temporary warehousing of eligible mortgage loans prior to

   

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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
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the borrower's sale of those mortgage loans to third party

investors. The high quality of the collateral and prudent

risk management practices have resulted in low credit

losses historically, including a net charge-off rate of 0% as

of both December 31, 2025 and 2024. Balances in this

portfolio generally fluctuate with mortgage rates and

seasonal factors. Generally, new loan originations to

mortgage lenders increase when there is a decline in

mortgage rates and decrease when rates rise. In periods

of economic uncertainty, this trend may not occur even if

interest rates are declining. In 2025, approximately 73% of

the loan originations were home purchases and 27% were

refinance transactions.

Finance and Insurance

The finance and insurance component represented 12%

and 11% of the C&I portfolio as of December 31, 2025 and

2024, respectively, and includes TRUPs (i.e., long-term

unsecured loans to bank and insurance-related

businesses), loans to bank holding companies, and asset-

based lending to consumer finance companies. As of

December 31, 2025, asset-based lending to consumer

finance companies represents approximately $1.7 billion

of the finance and insurance component.

Real Estate and Rental and Leasing

Loans to borrowers in the real estate and rental and

leasing industry were 11% and 12% of the C&I portfolio as

of December 31, 2025 and 2024, respectively. This

portfolio primarily consists of equipment financing loans

and leases to clients across FHN's footprint in a broad

range of industries and asset types. This portfolio also

includes a smaller balance of loans and leases for solar

and wind generating facilities.

Commercial Real Estate

The CRE portfolio totaled $13.6 billion as of December 31,

2025, an $858 million, or 6%, decrease compared to

December 31, 2024, largely attributable to paydowns as

stabilized projects moved to permanent markets. The CRE

portfolio includes financings for both commercial

construction and non-construction loans. This portfolio

contains loans, draws on credit lines, and letters of credit

to commercial real estate developers for the construction

and mini-permanent financing of income-producing real

estate.

Residential CRE loans include loans to residential builders

and developers for the purpose of constructing single-

family homes, condominiums, and town homes, and on a

limited basis, for developing residential subdivisions. The

residential CRE class is not currently an area of growth for

the bank.

Commercial real estate collateral valuations are

performed in accordance with applicable regulatory

requirements. In most cases, evaluations are outsourced

to third party appraisers. Appraisals and evaluations are

ordered and reviewed prior to making a final credit

decision. FHN follows policies and procedures which

outline when a new appraisal or evaluation is required,

considering any decline in market conditions and/or credit

weakness, or when there is an event, such as a loan

modification, renewal, or subsequent transaction.

Income-producing CRE loans

Income-producing CRE loans are underwritten in

accordance with credit policies and underwriting

guidelines that are formally reviewed at a minimum of

once every three years and revised as necessary based on

market conditions. Loans are underwritten based upon

project type, size, location, sponsorship, and other

market-specific data. Generally, minimum requirements

for equity, debt service coverage ratios, and level of pre-

leasing activity are established based on perceived risk in

each subcategory. Loan-to-value limits are set below

regulatory prescribed ceilings and generally range

between 50% and 80% depending on the underlying

property type. Term and amortization requirements are

set based on prudent standards for real estate lending.

Equity requirements are established based on the quality

and liquidity of the primary source of repayment. For

example, more equity would be required for a speculative

construction project or land loan than for a property fully

leased to a credit tenant or a roster of tenants. Typically, a

borrower must have at least 15% of cost invested in a

project before FHN will provide loan funding. Income

properties are generally required to achieve a debt service

coverage ratio greater than or equal to 1.25x at inception

or stabilization of the project based on loan amortization

and a minimum underwriting interest rate. Some product

types that possess a greater risk profile require a higher

level of equity, as well as a higher debt service coverage

ratio threshold. A proprietary minimum underwriting

interest rate is used to calculate compliance with

underwriting standards. Generally, specific levels of pre-

leasing must be met for construction loans on income

properties, where applicable. A global cash flow analysis is

typically performed at the sponsor level.

The credit administration and ongoing monitoring consists

of multiple internal control processes. Construction loans

are closed by a centralized control unit and construction

loan management is administered centrally for loans $3

million and over. Underwriters and credit approval

personnel stress the borrower’s/project’s financial

capacity utilizing numerous attributes such as interest

rates, vacancy, capitalization rates, and debt service

coverage ratios under various scenarios. Key information

is captured from the various portfolios and then stressed

at the aggregate level. Results are utilized to assist with

the assessment of the adequacy of the ALLL and to steer

portfolio management strategies.

The largest geographical concentrations of CRE balances

as of December 31, 2025 were in Florida (26%), Texas

(13%), North Carolina (12%), Tennessee (8%), Georgia

   

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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
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(8%), and Louisiana (8%), with no other state representing

more than 5% of the portfolio. The mix was generally

consistent with December 31, 2024.

The following table represents subcategories of CRE loans

by property type.

Table 7.11

CRE PORTFOLIO BY PROPERTY TYPE

		December 31, 2025				December 31, 2024
		Amount		Percent		Amount		Percent
Property Type:
Multi-family		$4,452		33%		$5,122		36%
Office		2,694		20		2,785		19
Retail		2,354		17		2,167		15
Industrial		2,075		15		2,130		15
Hospitality		1,154		9		1,332		9
Other CRE (a)		834		6		885		6
Total CRE loan portfolio		$13,563		100%		$14,421		100%

(a) Property types in this category each comprise less than 5%.

Consumer Loan Portfolios

Consumer Real Estate

The consumer real estate portfolio is primarily comprised

of home equity lines and installment loans. This portfolio

totaled $14.1 billion and $14.0 billion as of December 31,

2025 and 2024, respectively. The largest geographical

concentrations of balances in the consumer real estate

portfolio as of December 31, 2025 were in Florida (29%),

Tennessee (22%), Texas (12%), Louisiana (8%), North

Carolina (6%), and Georgia (6%), with no other state

representing 5% or more of the portfolio. The mix was

generally consistent with December 31, 2024.

As of December 31, 2025, approximately 89% of the

consumer real estate portfolio was in a first lien position.

At origination, the weighted average FICO score of this

portfolio was 760 and the refreshed FICO scores averaged

779 as of December 31, 2025, compared to FICO scores of

759 and 756, respectively, as of December 31, 2024.

Generally, performance of this portfolio is affected by life

events that affect borrowers’ finances, the level of

unemployment, and home prices.

As of December 31, 2025 and 2024, FHN had held-to-

maturity consumer mortgage loans secured by real estate

totaling $27 million and $26 million, respectively, that

were in the process of foreclosure.

HELOCs comprised $2.2 billion and $2.1 billion of the

consumer real estate portfolio as of December 31, 2025

and 2024, respectively. FHN’s HELOCs typically have a 5-

or 10- year draw period followed by a 10- or 20- year

repayment period, respectively. During the draw period, a

borrower is able to draw on the line and is only required

to make interest payments. The line is restricted if a

borrower becomes past due on payments. Once the draw

period has ended, the line is closed, and the borrower is

required to make both principal and interest payments

monthly until the loan matures. The principal payment

generally is fully amortizing, but payment amounts will

adjust when variable rates reset to reflect changes in the

Prime Rate.

As of both December 31, 2025 and 2024, approximately

95% of FHN's HELOCs were in the draw period. It is

expected that $612 million, or 30%, of HELOCs currently in

the draw period will enter the repayment period during

the next 60 months, based on current terms. Generally,

delinquencies for HELOCs that have entered the

repayment period are initially higher than HELOCs still in

the draw period because of the increased minimum

payment requirement. However, over time, performance

of these loans usually begins to stabilize. HELOCs nearing

the end of the draw period are closely monitored.

The following table presents HELOCs currently in the draw

period, broken down by months remaining in the draw

period.

   

	55	2025 FORM 10-K ANNUAL REPORT

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

Table 7.12

HELOC DRAW TO REPAYMENT SCHEDULE

		December 31, 2025				December 31, 2024
(Dollars in millions)		Repayment Amount		Percent		Repayment Amount		Percent
Months remaining in draw period:
0-12		$80		4%		$79		4%
13-24		117		6		90		5
25-36		126		6		134		7
37-48		130		6		147		7
49-60		159		8		148		7
>60		1,449		70		1,404		70
Total		$2,061		100%		$2,002		100%

Underwriting

For loans in this portfolio, underwriting decisions are

made through a centralized loan underwriting center. To

obtain a consumer real estate loan, the loan applicant(s)

must first meet a minimum qualifying FICO score.

Management establishes minimum FICO score

requirements, as well as maximum loan amounts, loan-to-

value ratios, and debt-to-income ratios for each consumer

real estate product. Applicants must have the financial

capacity (or available income) to service the debt by not

exceeding a calculated debt-to-income ratio. The amount

of the loan is limited to a percentage of the lesser of the

current appraised value or sales price of the collateral.

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. 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. FHN’s underwriting

guidelines require borrowers to qualify at an interest rate

that is 200 basis points above the note rate. This mitigates

risk to FHN in the event of a sharp rise in interest rates

over a relatively short time horizon.

HELOC Portfolio Risk Management

FHN performs continuous HELOC account reviews to

identify higher-risk home equity lines and initiate

preventative and corrective actions. The reviews consider

a number of account activity patterns and characteristics,

such as the number of times delinquent within recent

periods, changes in credit bureau score since origination,

score degradation, performance of the first lien, where

applicable, and account utilization. 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

$580 million as of December 31, 2025 and $669 million as

of December 31, 2024. This portfolio primarily consists of

consumer-related credits, including home equity and

other personal consumer loans, credit card receivables,

and automobile loans. The $89 million decrease was

driven by net repayments.

Allowance for Credit Losses

The ACL is maintained at a level sufficient to provide

appropriate reserves to absorb estimated future credit

losses in accordance with GAAP. For additional

information regarding the ACL, see Notes 1 and 4 to the

Consolidated Financial Statements in Part II, Item 8 of this

Report.

The ALLL decreased to $738 million as of December 31,

2025 , or 1.15% of total loans and leases, compared to

$815 million, or 1.30% of total loans and leases, at the end

of 2024. The ACL to total loans and leases ratio decreased

to 1.31% as of December 31, 2025 from 1.43% as of

December 31, 2024, reflecting a reduction in criticized and

classified loans as well as a favorable portfolio mix shift.

   

	56	2025 FORM 10-K ANNUAL REPORT

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

Consolidated Net Charge-offs

Net charge-offs were $120 million in 2025 compared to

$112 million in 2024. As a percentage of average total

loans and leases, net charge-offs were 0.19%, compared

to 0.18% in 2024. Net charge-offs in 2023 were elevated

primarily as the result of a $72 million idiosyncratic

charge-off related to one client relationship.

See Note 1 — Significant Accounting Policies to the

Consolidated Financial Statements in Part II, Item 8 of this

Report for FHN's charge-off policies.

Table 7.13

ANALYSIS OF ALLOWANCE FOR CREDIT LOSSES AND CHARGE-OFFS

			December 31,
(Dollars in millions)			2025		2024		2023
Allowance for loan and lease losses
	C&I		$335		$345		$339
	CRE		177		227		172
	Consumer real estate		206		221		233
	Credit card and other		20		22		29
	Total allowance for loan and lease losses		$738		$815		$773
Reserve for remaining unfunded commitments
	C&I		$81		$57		$49
	CRE		11		11		22
	Consumer real estate		9		11		12
	Total reserve for remaining unfunded commitments		$101		$79		$83
Allowance for credit losses
	C&I		$416		$402		$388
	CRE		188		238		194
	Consumer real estate		215		232		245
	Credit card and other		20		22		29
	Total allowance for credit losses		$839		$894		$856
Period-end loans and leases
	C&I		$35,905		$33,428		$32,633
	CRE		13,563		14,421		14,216
	Consumer real estate		14,108		14,047		13,650
	Credit card and other		580		669		793
	Total period-end loans and leases		$64,156		$62,565		$61,292
ALLL / loans and leases %
	C&I		0.93%		1.03%		1.04%
	CRE		1.30		1.57		1.21
	Consumer real estate		1.46		1.57		1.71
	Credit card and other		3.40		3.28		3.63
	Total ALLL / loans and leases %		1.15%		1.30%		1.26%

   

	57	2025 FORM 10-K ANNUAL REPORT

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

ACL / loans and leases %
	C&I		1.16%		1.20%		1.19%
	CRE		1.38		1.65		1.36
	Consumer real estate		1.53		1.65		1.79
	Credit card and other		3.40		3.28		3.63
	Total ACL / loans and leases %		1.31%		1.43%		1.40%
Net charge-offs (recoveries)
	C&I		$94		$47		$142
	CRE		12		55		15
	Consumer real estate		(1)		(6)		(5)
	Credit card and other		15		16		18
	Total net charge-offs		$120		$112		$170
Average loans and leases
	C&I		$33,831		$32,871		$32,390
	CRE		13,931		14,558		13,785
	Consumer real estate		14,235		13,836		13,179
	Credit card and other		613		740		815
	Total average loans and leases		$62,610		$62,005		$60,169
Charge-off %
	C&I		0.28%		0.14%		0.44%
	CRE		0.09		0.38		0.10
	Consumer real estate		(0.01)		(0.04)		(0.04)
	Credit card and other		2.51		2.11		2.18
	Total charge-off %		0.19%		0.18%		0.28%
ALLL / net charge-offs
	C&I		359%		738%		239%
	CRE		1,487		411		1,097
	Consumer real estate		NM		NM		NM
	Credit card and other		128		141		162
	Total ALLL / net charge-offs		616%		731%		455%

NM - not meaningful

Nonperforming Assets

Nonperforming loans are loans placed on nonaccrual if it

becomes evident that full collection of principal and

interest is at risk, if impairment has been recognized as a

partial charge-off of principal balance due to insufficient

collateral value and past due status, or (on a case-by-case

basis) if FHN continues to receive payments but there are

other borrower-specific issues. Included in nonaccrual are

loans for which FHN continues to receive payments,

including residential real estate loans where the borrower

has been discharged of personal obligation through

bankruptcy. NPAs consist of nonperforming loans and

leases, nonperforming loans held for sale, and OREO.

Total NPAs were $617 million as of December 31, 2025,

compared to $608 million as of December 31, 2024.

Nonperforming loans and leases increased $2 million,

largely driven by an increase in nonaccrual C&I loans,

partially offset by a decline in nonaccrual CRE loans. The

increase in nonaccrual C&I loans was largely driven by

loans in the wholesale trade, finance and insurance and

manufacturing industries, partially offset by loans in the

construction industry. These portfolios continue to

maintain strong underwriting and client selection. The

vast majority of NPAs have individual impairment reviews

with no specific reserve required. The nonperforming

loans and leases ratio decreased 2 basis points to 0.94% as

of December 31, 2025.

   

	58	2025 FORM 10-K ANNUAL REPORT

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

Table 7.14

NONPERFORMING ASSETS

			December 31,
(Dollars in millions)			2025		2024		2023
Nonperforming loans and leases
	C&I		$224		$173		$184
	CRE		239		294		136
	Consumer real estate		140		133		140
	Credit card and other		1		2		2
	Total nonperforming loans and leases (a) (c)		$604		$602		$462
Nonperforming loans held for sale (a)			$10		$3		$3
Foreclosed real estate and other assets			3		3		4
	Total nonperforming assets (a)		$617		$608		$469
Nonperforming loans and leases to total loans and leases (b)
	C&I		0.62%		0.52%		0.57%
	CRE		1.76		2.04		0.96
	Consumer real estate		0.99		0.95		1.02
	Credit card and other		0.16		0.23		0.30
	Total NPL %		0.94%		0.96%		0.75%
ALLL / NPLs (b)
	C&I		150%		199%		184%
	CRE		74		77		126
	Consumer real estate		147		167		167
	Credit card and other		2,096		1,438		1,202
	Total ALLL / NPLs		122%		136%		167%

(a) Excludes loans and leases that are 90 or more days past due and still accruing interest.

(b) Excludes loans classified as held for sale.

(c) Under the original terms of the loans, estimated interest income would have been approximately $41 million, $43 million, and $35 million

during 2025, 2024, and 2023, respectively.

   

	59	2025 FORM 10-K ANNUAL REPORT

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

The following table provides nonperforming assets by business segment.

Table 7.15

NONPERFORMING ASSETS BY SEGMENT

		December 31,
(Dollars in millions)			2025		2024		2023
Nonperforming loans and leases (a) (b)
	Commercial, Consumer & Wealth		$587		$572		$401
	Wholesale		8		12		38
	Corporate		9		18		23
	Consolidated		$604		$602		$462
Foreclosed real estate
	Commercial, Consumer & Wealth		$—		$1		$1
	Wholesale		2		1		2
	Corporate		1		1		1
	Consolidated		$3		$3		$4
Nonperforming Assets (a) (b)
	Commercial, Consumer & Wealth		$587		$573		$402
	Wholesale		10		13		40
	Corporate		10		19		24
	Consolidated		$607		$605		$466
Nonperforming loans and leases to total loans and leases (b)
	Commercial, Consumer & Wealth		1.04%		1.01%		0.71%
	Wholesale		0.11		0.20		0.87
	Corporate		1.84		5.46		4.68
	Consolidated		0.94%		0.96%		0.75%
NPA % (b) (c)
	Commercial, Consumer & Wealth		1.04%		1.02%		0.71%
	Wholesale		0.14		0.23		0.93
	Corporate		1.98		5.65		4.81
	Consolidated		0.95%		0.97%		0.76%

(a) Excludes loans and leases that are 90 or more days past due and still accruing interest.

(b) Excludes loans classified as held for sale.

(c) Ratio is non-performing assets to total loans and leases plus foreclosed real estate.

   

	60	2025 FORM 10-K ANNUAL REPORT

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

Past Due Loans and Potential Problem Assets

Past due loans are loans contractually past due as to

interest or principal payments, but which have not yet

been put on nonaccrual status.

Loans 90 days or more past due and still accruing were $8

million as of December 31, 2025, compared to $21 million

as of December 31, 2024. Loans 30 to 89 days past due

and still accruing were $83 million as of December 31,

2025 compared to $89 million as of December 31, 2024 ,

largely reflecting lower past due consumer real estate loan

balances, partially offset by higher past due C&I loan

balances.

Table 7.16

ACCRUING DELINQUENCIES & OTHER CREDIT DISCLOSURES

		December 31,
(Dollars in millions)			2025		2024		2023
Accruing loans and leases 30+ days past due (a)
	C&I		$35		$33		$33
	CRE		3		3		8
	Consumer real estate		47		69		57
	Credit card and other		6		5		8
	Total accruing loans and leases 30+ days past due		$91		$110		$106
Accruing loans and leases 30+ days past due % (a)
	C&I		0.10%		0.10%		0.10%
	CRE		0.02		0.02		0.06
	Consumer real estate		0.33		0.50		0.42
	Credit card and other		1.05		0.79		1.03
	Total accruing loans and leases 30+ days past due %		0.14%		0.18%		0.17%
Accruing loans and leases 90+ days past due (a) (b) (c)
	C&I		$1		$1		$1
	Consumer real estate		6		19		17
	Credit card and other		1		1		3
	Total accruing loans and leases 90+ days past due		$8		$21		$21
Loans held for sale
	30 to 89 days past due (b)		$3		$8		$12
	30 to 89 days past due - guaranteed portion (b) (d)		—		6		8
	90+ days past due (b)		—		7		9
	90+ days past due - guaranteed portion (b) (d)		—		4		4

(a) Excludes loans classified as held for sale.

(b) Amounts are not included in nonperforming/nonaccrual loans.

(c) Amounts are also included in accruing loans and leases 30+ days past due.

(d) Guaranteed loans include FHA, VA, and GNMA loans repurchased through the GNMA buyout program.

Potential problem assets represent those assets where

information about possible credit problems of borrowers

has caused management to have serious doubts about the

borrower’s ability to comply with present repayment

terms and includes loans past due 90 days or more and

still accruing. This definition is believed to be substantially

consistent with the standards established by the Federal

banking regulators for loans classified as substandard.

Potential problem assets in the loan portfolio totaled $1.7

billion as of December 31, 2025, compared to $1.9 billion

as of December 31, 2024. The current expectation of

losses from potential problem assets has been included in

management’s analysis for assessing the adequacy of the

allowance for loan and lease losses.

   

	61	2025 FORM 10-K ANNUAL REPORT

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

Modifications to Borrowers Experiencing Financial Difficulty

As part of FHN’s ongoing risk management practices, FHN

attempts to work with borrowers when appropriate to

extend or modify loan terms to better align with their

current ability to repay. Modifications to loans are made

in accordance with internal policies and guidelines which

conform to regulatory guidance. Each occurrence is

unique to the borrower and is evaluated separately. See

Note 1 - Significant Accounting Policies, Note 3 - Loans and

Leases and Note 4 - Allowance for Credit Losses to the

Consolidated Financial Statements in Part II, Item 8 of this

Report for further discussion regarding troubled loan

modifications.

Commercial Loan Modifications

As part of FHN’s credit risk management governance

processes, the Special Assets Department ("SAD") is

responsible for managing most commercial relationships

with borrowers whose financial condition has deteriorated

to such an extent that the credits are individually

reviewed for expected credit losses, classified as

substandard or worse, placed on nonaccrual status,

foreclosed or in process of foreclosure, or in active or

contemplated litigation. SAD has the authority and

responsibility to enter into workout and/or rehabilitation

agreements with troubled commercial borrowers in order

to mitigate and/or minimize the amount of credit losses

recognized from these problem assets. While every

circumstance is different, SAD will generally use

forbearance agreements (generally 6-12 months) as an

element of commercial loan workouts, which might

include reduced interest rates, reduced payments, release

of a guarantor, term extensions or entering into short sale

agreements.  Principal forgiveness may be granted in

specific workout circumstances.

The individual expected credit loss assessments

completed on commercial loans may be used in evaluating

the appropriateness of qualitative adjustments to

quantitatively modeled loss expectations for loans that

are not considered collateral dependent. If a loan is

considered collateral dependent, it is individually

evaluated based on data specific to the borrower and

related collateral, if any. Such estimates may be based on

current loss forecasts, an evaluation of the fair value of

the collateral, or, in certain circumstances, the present

value of expected cash flows discounted at the loan’s

effective interest rate. 

The fair value of collateral is generally based on appraisals

periodically updated, recent sales of foreclosed properties

and/or relevant property specific market information, less

estimated costs to sell, if applicable. Commercial loans are

typically secured by real estate, business equipment,

inventories, and other types of collateral. Each assessment

considers any modified terms and is comprehensive to

ensure appropriate assessment of expected credit losses.

Consumer Loan Modifications

FHN does not currently participate in any of the loan

modification programs sponsored by the U.S. government

for its portfolio loans, but does generally structure

modified consumer loans using the parameters of the

former Home Affordable Modification Program.

Within the HELOC and permanent mortgage installment

loans in the consumer portfolio segment, troubled loans

are typically modified by reducing the interest rate (in

increments of 25 basis points to a minimum of 3%) and a

possible maturity date extension of up to 30 years to

reach an affordable housing expense-to-income ratio.

Within the credit card class of the consumer portfolio

segment, troubled loans are typically modified through

either a short-term credit card hardship program or a

longer-term credit card workout program. In the credit

card hardship program, borrowers may be granted rate

and payment reductions for 6 months to 1 year. In the

credit card workout program, clients are granted a rate

reduction to 0% and term extensions for up to 5 years to

pay off the remaining balance.

Consumer loans may also be modified through court-

imposed principal reductions in bankruptcy proceedings,

which FHN is required to honor unless a borrower

reaffirms the related debt.

   

	62	2025 FORM 10-K ANNUAL REPORT

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

Deposits

Total deposits of $67.5 billion as of December 31, 2025

increased $1.9 billion compared to December 31, 2024, as

interest-bearing deposits increased $2.1 billion and

noninterest-bearing deposits decreased $198 million.

FHN continues to maintain a well-diversified and stable

funding mix across its footprint and specialty lines of

business. At December 31, 2025, commercial deposits

were $39.4 billion, or 58% of total deposits, and consumer

deposits were $28.1 billion , or 42% of total deposits. At

December 31, 2024 , commercial deposits were

$36.2 billion, or 55% of total deposits, and consumer

deposits were $29.4 billion, or 45% of total deposits.

At December 31, 2025, 34% of deposits were associated

with Tennessee, 16% with Florida, 12% with North

Carolina, and 12% with Louisiana, with no other state

above 10%. This mix remained relatively consistent with

the previous year-end.

Total estimated uninsured deposits were $28.1 billion, or

42% of total deposits, and $26.7 billion, or 41% of total

deposits, as of December 31, 2025 and 2024, respectively.

Of the uninsured deposits as of December 31, 2025,

$5.2 billion, or 8% of total deposits, were collateralized. As

of December 31, 2024, collateralized deposits were

$4.7 billion, or 7% of total deposits.

The following tables present the major components of

FHN's total deposits for 2025 and 2024, FHN's total

estimated uninsured deposits for the years ended

December 31, 2025 and 2024, and the maturities of FHN's

uninsured time deposits as of December 31, 2025 and

2024. See Table 7.2 - Average Balances, Net Interest

Income and Yields/Rates in this Report for information on

average deposits, including average rates paid.

Table 7.17

DEPOSITS

(Dollars in millions)		2025		Percent of  Total		2024		Percent of  Total		Change		Percent
Savings		$26,010		39%		$26,695		41%		$(685)		(3)%
Time deposits		6,485		10		6,613		10		(128)		(2)
Other interest-bearing deposits		19,158		28		16,252		25		2,906		18
Total interest-bearing deposits		51,653		77		49,560		76		2,093		4
Noninterest-bearing deposits		15,823		23		16,021		24		(198)		(1)
Total deposits		$67,476		100%		$65,581		100%		$1,895		3%

Table 7.18

ESTIMATED UNINSURED DEPOSITS

	For the Year Ended December 31,
(Dollars in millions)	2025		2024
Uninsured deposits	$28,054		$26,679

Table 7.19

UNINSURED TIME DEPOSITS BY MATURITY

(Dollars in millions)	December 31, 2025		December 31, 2024
Portion of U.S. time deposits in excess of insurance limit	$1,162		$1,068
Remaining maturity:
3 months or less	280		328
Over 3 months through 6 months	318		379
Over 6 months through 12 months	319		332
Over 12 months	245		29

   

	63	2025 FORM 10-K ANNUAL REPORT

ITEM 7. 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 $3.9 billion and $4.0 billion as of

December 31, 2025 and 2024 , respectively. Other short-

term borrowings decreased $804 million, largely reflecting

a $550 million decrease in FHLB borrowings. This decrease

was partly offset by a $658 million increase in federal

funds purchased and securities sold under agreements to

repurchase and a $57 million increase in trading liabilities.

Short-term borrowings balances fluctuate largely based on

the level of FHLB borrowing as a result of loan demand,

deposit levels and balance sheet funding strategies.

Trading liabilities fluctuate based on various factors,

including levels of trading securities and hedging

strategies. The amount of federal funds purchased

fluctuates depending on the amount of excess funding of

FHN's correspondent bank customers. Balances of

securities sold under agreements to repurchase fluctuate

based on cost attractiveness relative to FHLB borrowing

levels and the ability to pledge securities toward such

transactions. See Note 9 - Short-Term Borrowings to the

Consolidated Financial Statements in Part II, Item 8 of this

Report for additional information.

Term Borrowings

Term borrowings include senior and subordinated

borrowings with original maturities greater than one year.

Total term borrowings were $1.3 billion and $1.2 billion as

of December 31, 2025 and 2024, respectively. This

increase primarily reflects the issuance of $500 million of

senior notes during first quarter 2025, partially offset by

the retirement of $350 million in senior notes during

second quarter 2025. See Note 10 - Term Borrowings to

the Consolidated Financial Statements in Part II, Item 8 of

this Report for additional information.

Capital

Management’s objectives are to provide capital sufficient

to cover the risks inherent in FHN’s businesses, to

maintain excess capital to well-capitalized standards, and

to ensure ready access to the capital markets.

Total equity of $9.1 billion increased $31 million compared

to December 31, 2024. Significant changes included net

income of $998 million and an increase of $318 million in

AOCI, offset by $918 million in common stock

repurchases, $330 million in common and preferred

dividends, and $80 million from the Series B Preferred

Stock redemption.

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.

   

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Table 7.20

REGULATORY CAPITAL DATA

(Dollars in millions)		December 31, 2025		December 31, 2024
FHN shareholders’ equity		$8,847		$8,816
Modified CECL transitional amount (a)		—		28
FHN non-cumulative perpetual preferred		(349)		(426)
Common equity tier 1 before regulatory adjustments		$8,498		$8,418
Regulatory adjustments:
Disallowed goodwill and other intangibles		$(1,548)		$(1,578)
Net unrealized (gains) losses on securities available for sale		512		782
Net unrealized (gains) losses on pension and other postretirement plans		256		252
Net unrealized (gains) losses on cash flow hedges		42		94
Disallowed deferred tax assets		—		(1)
Common equity tier 1		$7,760		$7,967
FHN non-cumulative perpetual preferred		349		426
Qualifying noncontrolling interest—First Horizon Bank preferred stock		295		295
Tier 1 capital		$8,404		$8,688
Tier 2 capital		1,344		1,442
Total regulatory capital		$9,748		$10,130
Risk-Weighted Assets
First Horizon Corporation		$73,036		$71,108
First Horizon Bank		72,283		70,418
Average Assets for Leverage
First Horizon Corporation		$82,492		$81,645
First Horizon Bank		81,560		80,791

Table 7.21

REGULATORY RATIOS & AMOUNTS

		December 31, 2025				December 31, 2024
(Dollars in millions)		Ratio		Amount		Ratio		Amount
Common Equity Tier 1
First Horizon Corporation		10.63%		$7,760		11.20%		$7,967
First Horizon Bank		10.98		7,934		11.12		7,834
Tier 1
First Horizon Corporation		11.51		8,404		12.22		8,688
First Horizon Bank		11.38		8,229		11.54		8,129
Total
First Horizon Corporation		13.35		9,748		14.25		10,130
First Horizon Bank		13.04		9,425		13.38		9,424
Tier 1 Leverage
First Horizon Corporation		10.19		8,404		10.64		8,688
First Horizon Bank		10.09		8,229		10.06		8,129
Other Capital Ratios
Total period-end equity to period-end assets		10.90				11.09
Tangible common equity to tangible assets (b)		8.37				8.37

(a)The modified CECL transitional amount includes the impact to retained earnings from the initial adoption of CECL plus 25% of the change in the adjusted

allowance for credit losses since FHN’s initial adoption of CECL through December 31, 2021. For December 31, 2024, 25% of the full amount was phased

out and not included in Common Equity Tier 1 capital.

(b)Tangible common equity to tangible assets is a non-GAAP measure and is reconciled to total equity to total assets (GAAP) in the Non-GAAP to GAAP

Reconciliation - Table 7.33.

   

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Banking regulators define minimum capital ratios for bank

holding companies and their bank subsidiaries. Based on

the capital rules and definitions prescribed by the banking

regulators, should any depository institution’s capital

ratios decline below predetermined levels, it would

become subject to a series of increasingly restrictive

regulatory actions.

The system categorizes a depository institution’s capital

position into one of five categories ranging from well-

capitalized to critically under-capitalized. For an institution

to qualify as well-capitalized, Common Equity Tier 1, Tier 1

Capital, Total Capital, and Leverage capital ratios must be

at least 6.50%, 8.00%, 10.00%, and 5.00%, respectively.

Furthermore, a capital conservation buffer of 50 basis

points above these levels must be maintained on the

Common Equity Tier 1, Tier 1 Capital, and Total Capital

ratios to avoid restrictions on dividends, share

repurchases, and certain discretionary bonuses.

As of December 31, 2025, both FHN and First Horizon

Bank had sufficient capital to qualify as well-capitalized

institutions and to meet the capital conservation buffer

requirement. For December 31, 2024, capital ratios for

both FHN and First Horizon Bank  were 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.

For FHN, the risk-based regulatory capital and Tier 1

leverage ratios decreased in 2025, relative to year-end

2024, primarily from the impact of common share

repurchases, the Series B Preferred Stock redemption, and

an increase in risk-weighted assets (or average assets in

the case of the Tier 1 leverage ratio), partially offset by net

income less dividends. For First Horizon Bank, the risk-

based regulatory capital ratios decreased from year-end

2024, largely from an increase in risk-weighted assets,

partially offset by the impact of net income less dividends.

The Tier 1 leverage ratio for First Horizon Bank increased

from year-end 2024, largely from the impact of net

income less dividends.

During 2026, capital ratios are expected to remain above

well-capitalized standards plus the required capital

conservation buffer.

Stress Testing

The Economic Growth, Regulatory Relief, and Consumer

Protection Act, along with an interagency regulatory

statement effectively exempted both FHN and First

Horizon Bank from Dodd-Frank Act stress testing

requirements starting in 2018.

For 2025, FHN and First Horizon Bank completed a

company run stress test using the Dodd-Frank Act Stress

Test ("DFAST") scenarios published in February 2025.

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 2025

DFAST Severely Adverse scenario. A summary of FHN's

results was posted in the “Fixed Income - Stress Test

Results” section on FHN’s investor relations website on

July 30, 2025. Neither FHN’s stress test posting, nor any

other material found on FHN’s website generally, is part of

this report or incorporated herein.

FHN anticipates that it will continue performing an annual

enterprise-wide stress test as part of its capital and risk

management process. Results of this test will be

presented to executive management and the Board.

The disclosures in this “Stress Testing” section include

forward-looking statements. Please refer to “Forward-

Looking Statements” for additional information

concerning the characteristics and limitations of

statements of that type.

Common Stock Purchase Programs

FHN may purchase shares of its common stock from time

to time, subject to legal and regulatory restrictions. FHN's

Board has authorized the common stock purchase

programs described below. FHN’s Board has not

authorized a preferred stock purchase program.

October 2024 General Purchase Program

On October 29, 2024, FHN announced that its Board of

Directors had approved a $1.0 billion common share

purchase program to replace the $650 million January

2024 program. The October 2024 program was scheduled

to expire on January 31, 2026. Purchases under the

program could be made in the open market or through

privately negotiated transactions, including under Rule

10b5-1 plans as well as accelerated share repurchase and

other structured transactions. The timing and exact

amount of common share repurchases were at the

discretion of senior management and 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, 2025, $820 million in purchases had

been made life-to-date under the October 2024 program

at an average price per share of $20.80, or $20.78

excluding commissions. Program purchases made during

the quarter ended December 31, 2025 are summarized in

the following table. The program was terminated effective

the close of business on October 27, 2025 with $180

million in authorization unused.

   

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Table 7.22

COMMON STOCK PURCHASES—OCTOBER 2024 PROGRAM ^(a)

(Dollar values and volume in thousands, except per share data)		Total number of shares purchased		Average price paid per share (b)		Total number of shares purchased as part of publicly announced programs		Maximum approximate dollar value that may yet be purchased under the programs
2025
October 1 to October 31		6,400		$20.62		6,400		N/A
November 1 to November 30		N/A		N/A		N/A		N/A
December 1 to December 31		N/A		N/A		N/A		N/A
Total		6,400		$20.62		6,400

(a) This table is limited to purchases made under the October 2024 program which was terminated effective the close of business on October 27, 2025.

(b) Represents total costs including commissions paid. Average price paid does not reflect the one percent excise tax charged on public company share

repurchases.

October 2025 General Purchase Program

On October 27, 2025, FHN announced that its Board of

Directors had approved a new $1.2 billion common share

purchase program to replace the $1.0 billion October 2024

program discussed above. The new October 2025 program

is scheduled to expire on January 31, 2027. Purchases

under the new program may be made in the open market

or through privately negotiated transactions, including

under Rule 10b5-1 plans, as well as accelerated share

repurchase and other structured transactions. The timing

and exact amount of common share repurchases are at

the discretion of senior management and 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.

As of December 31, 2025, $203 million in purchases had

been made life-to-date under the October 2025 program

at an average price per share of $21.80, or $21.78

excluding commissions. Program purchases made during

the quarter ended December 31, 2025 are summarized in

the following table.

Table 7.23

COMMON STOCK PURCHASES—OCTOBER 2025 PROGRAM ^(a)

(Dollar values and volume in thousands, except per share data)		Total number of shares purchased		Average price paid per share (b)		Total number of shares purchased as part of publicly announced programs		Maximum approximate dollar value that may yet be purchased under the programs
2025
October 1 to October 31		1,600		$21.06		1,600		$1,166,310
November 1 to November 30		5,850		21.46		5,850		1,040,751
December 1 to December 31		1,850		23.52		1,850		997,234
Total		9,300		$21.80		9,300

(a) This table is limited to purchases made under the October 2025 program which was effective beginning October 28, 2025.

(b) Represents total costs including commissions paid. Average price paid does not reflect the one percent excise tax charged on public company share

repurchases.

Tax Withholding for Stock Awards

As authorized by the Board's Compensation Committee,

FHN makes automatic stock purchases by withholding

stock-based award shares to cover tax obligations

associated with those awards. Those limited, off-market

purchases are not associated with an announced purchase

program and are made any time an associated tax

obligation arises, whether or not a blackout period is in

effect. Tax withholding purchases made during the

quarter ended December 31, 2025 are summarized in the

following table.

   

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Table 7.24

COMMON STOCK PURCHASES—TAX WITHHOLDING FOR STOCK AWARDS

(Dollar values and volume in thousands, except per share data)		Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced programs		Maximum number of shares that may yet be purchased under the programs
2025
October 1 to October 31		16		$21.37		N/A		N/A
November 1 to November 30		7		21.51		N/A		N/A
December 1 to December 31		3		22.76		N/A		N/A
Total		26		$21.58

Risk Management

FHN derives revenue from providing services and, in many

cases, assuming and managing risk for profit, which

exposes FHN to strategic, liquidity, market, capital

adequacy, operational, compliance, and credit risks that

require ongoing oversight and management. FHN has an

enterprise-wide approach to risk governance,

measurement, management, and reporting, including an

economic capital allocation process that is tied to risk

profiles used to measure risk-adjusted returns. Through an

enterprise-wide risk governance structure and a Risk

Appetite Statement approved by the Board, management

continually evaluates the balance of risk/return and

earnings volatility with shareholder value.

FHN’s enterprise-wide risk governance structure begins

with the Board. The Board, working with the Risk

Committee of the Board, establishes FHN’s risk appetite

by approving policies and limits that provide standards for

the nature and the level of risk FHN is willing to assume.

The Board regularly receives reports on management’s

performance against FHN’s risk appetite primarily through

the Board’s Risk and Audit Committees.

To further support the risk governance provided by the

Board, FHN has established accountabilities, control

processes, procedures, and a management governance

structure designed to align risk management with risk-

taking throughout FHN. The control procedures are

aligned with FHN’s four components of risk governance:

(1) Specific Risk Committees; (2) the Risk Management

Organization; (3) Business Unit Risk Management; and

(4) Independent Assurance Functions.

1. Specific Risk Committees: The Board has delegated

authority to the Chief Executive Officer to manage

Strategic Risk and the general business affairs of FHN

under the Board’s oversight. The CEO utilizes the

executive management team to carry out these duties

in conjunction with the Risk governance structure. The

Management Risk Committee is chaired by the Chief

Risk Officer and is comprised of the CEO and certain

officers that oversee all risk areas and analyzes both

existing and emerging risks. The Management Risk

Committee is supported by a set of specific risk

committees focused on unique risk types (e.g.,

liquidity, credit, operational, etc.). These risk

committees provide a mechanism that assembles the

necessary expertise and perspectives of the

management team to discuss emerging risk issues,

monitor FHN’s risk-taking activities, and evaluate

specific transactions and exposures. These committees

also monitor the direction and trend of risks relative to

business strategies and market conditions and direct

management to respond to risk issues.

2. The Risk Management Organization: FHN’s risk

management organization, led by the Chief Risk Officer

and Chief Credit Officer, provides objective oversight

of risk-taking activities. The risk management

organization translates FHN’s overall risk appetite into

approved limits and formal policies and is supported by

corporate staff functions, including the Corporate

Secretary, Legal, Finance, Human Resources

Operations, and Technology. Risk management works

with business units and functional experts to establish

appropriate operating standards and monitor business

practices in relation to those standards. Additionally,

risk management proactively works with business units

and senior management to focus management on key

risks in FHN and emerging trends that may change

FHN’s risk profile. The Chief Risk Officer has overall

responsibility and accountability for enterprise risk

management and aggregate risk reporting.

3. Business Unit Risk Management: FHN’s business units

are responsible for identifying, acknowledging,

quantifying, mitigating, and managing all risks arising

within their respective units. They determine and

execute their business strategies, which puts them

closest to the changing nature of risks, and they are

best able to take the needed actions to manage and

mitigate those risks. The business units are supported

by the risk management organization that helps

identify and consider risks when making business

   

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decisions. Management processes, structure, and

policies are designed to help ensure compliance with

laws and regulations as well as provide organizational

clarity for authority, decision-making, and

accountability. Business units have designated control

processes to help mitigate their identified risks, and

business units attest to the effectiveness of those

controls. The risk governance structure supports and

promotes the escalation of material items to executive

management and the Board.

4. Independent Assurance Functions: Internal Audit,

Credit Assurance Services ("CAS"), Compliance Testing,

and Model Validation provide an independent and

objective assessment of the design and execution of

FHN’s internal control system, including management

processes, risk governance, and policies and

procedures. 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.

Internal Audit and CAS are independent third line

functions within FHN for the purpose of providing

unfettered objective assurance. The Internal Audit

function reports to the Chief Audit Executive, who is

appointed by and reports functionally to the Audit

Committee of the Board and administratively to the

CEO. The CAS function reports to the CAS Director,

who is appointed by and reports functionally to the

Risk Committee of the Board and administratively to

the Chief Audit Executive.  Internal Audit provides

quarterly reports to the Audit Committee of the Board,

while CAS provides quarterly reports to the Risk

Committee of the Board. 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. Market risk is

inherent in the financial instruments associated with

FHN’s operations, primarily trading activities within FHN

Financial, but also through non-trading activities which are

primarily affected by interest rate risk that is managed by

the ALCO within FHN.

FHN is exposed to market risk related to the trading

securities inventory and loans held for sale maintained by

FHN Financial in connection with its fixed income

distribution activities. Various types of securities inventory

positions are procured for distribution to clients by the

sales staff. When these securities settle on a delayed

basis, they are considered forward contracts. Refer to the

"Determination of Fair Value - Trading securities and

trading liabilities" section of Note 23 - Fair Value of Assets

and Liabilities, which section is incorporated into this

MD&A by this reference.

FHN’s market risk appetite is approved by the Risk

Committee of the Board of Directors and executed

through management policies and procedures of ALCO

and the FHN Financial Risk Committee. These policies

contain various market risk limits including, for example,

VaR limits for the trading securities inventory, and

individual position limits and sector limits for products

with credit risk, among others. Risk measures are

computed and reviewed on a daily basis to ensure

compliance with market risk management policies.

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. FHN

computes VaR using historical simulation with a 1-year

lookback period at a 99% confidence level with 1-day and

10-day time horizons. Additionally, FHN computes a

Stressed VaR measure. The SVaR computation uses the

same model but with model inputs reflecting historical

data from a continuous 12-month period that reflects a

period of significant financial stress appropriate for our

trading securities portfolio.

A summary of FHN's VaR and SVaR measures for 1-day

and 10-day time horizons is presented in the following

table.

   

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Table 7.25

VaR & SVaR MEASURES

		Year Ended December 31, 2025						As of December 31, 2025
(Dollars in millions)		Mean		High		Low
1-day
VaR		$2		$3		$1		$2
SVaR		7		9		6		7
10-day
VaR		6		8		3		7
SVaR		37		47		28		37
		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

FHN’s overall VaR measure includes both interest rate risk and credit spread risk. Separate measures of these component risks

are as follows.

Table 7.26

SCHEDULE OF RISKS INCLUDED IN VaR

		As of December 31, 2025				As of December 31, 2024
(Dollars in millions)		1-day		10-day		1-day		10-day
Interest rate risk		$1		$2		$1		$2
Credit spread risk		—		1		—		1

The potential risk of loss reflected by FHN’s VaR measures

assumes the trading securities inventory is static. Because

FHN Financial procures fixed income securities for

purposes of distribution to clients, its trading securities

inventory turns over regularly. Additionally, FHNF traders

actively manage the trading securities inventory

continuously throughout each trading day. Accordingly,

FHNF’s trading securities inventory is highly dynamic,

rather than static. As a result, it would be rare for FHNF to

incur a negative revenue day in its fixed income activities

at the levels indicated by its VaR measures.

In addition to being used in FHN’s daily market risk

management process, the VaR and SVaR measures are

used by FHN in computing its regulatory market risk

capital requirements in accordance with the market risk

capital rules. For additional information regarding FHN's

capital adequacy refer to the Capital section of this

MD&A.

FHN also performs stress tests on its trading securities

portfolio to calculate the potential loss under various

assumed market scenarios. Key assumed stresses used in

those tests are:

Down 25 bps - assumes an instantaneous downward

move in interest rates of 25 basis points at all points on

the interest rate yield curve.

Up 25 bps - assumes an instantaneous upward move in

interest rates of 25 basis points at all points on the

interest rate yield curve.

Curve flattening - assumes an instantaneous flattening

of the interest rate yield curve through an increase in

short-term rates and a decrease in long-term rates. The

2-year point on the Treasury yield curve is assumed to

increase 15 basis points and the 10-year point on the

Treasury yield curve is assumed to decrease 15 basis

points. Shifts in other points on the yield curve are

predicted based on their correlation to the 2-year and

10-year points.

Curve steepening - assumes an instantaneous

steepening of the interest rate yield curve through a

decrease in short-term rates and an increase in long-

   

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term rates. The 2-year point on the Treasury yield curve

is assumed to decrease 15 basis points and the 10-year

point on the Treasury yield curve is assumed to increase

15 basis points. Shifts in other points on the yield curve

are predicted based on their correlation to the 2-year

and 10-year points.

Credit spread widening - assumes an instantaneous

increase in credit spreads (the difference between

yields on Treasury securities and non-Treasury

securities) of 25 basis points.

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. Among other procedures, these personnel

monitor model results and perform periodic backtesting

as part of an ongoing process of validating the accuracy of

the model. Backtesting compares the previous day’s VaR

measurement to a regulatory-prescribed calculation of

daily trading profit/loss in the trading inventory. During

the years ended December 31, 2025 and 2024, there were

no days in which the regulatory-prescribed calculation

reflected a loss in the trading inventory that exceeded the

corresponding daily VaR measurement, resulting in zero

backtesting exceptions. Model risk management activities

are subject to annual review by FHN’s Model Validation

Group, an independent assurance group charged with

oversight responsibility for FHN’s model risk management.

Interest Rate Risk Management

Interest rate risk is the risk to earnings or capital arising

from movement in interest rates. ALCO is responsible for

overseeing the management of existing and emerging

interest rate risk for the company within risk tolerances

established by the Board. FHN primarily manages interest

rate risk by structuring the balance sheet to maintain a

desired level of associated earnings and to protect the

economic value of FHN’s capital.

Net interest income and the value of equity are affected

by changes in the level of market interest rates because of

the differing repricing characteristics of assets and

liabilities, the exercise of prepayment options held by loan

clients, the early withdrawal options held by deposit

clients, and changes in the basis between and changing

shapes of the various yield curves used to price assets and

liabilities. To isolate the repricing, basis, option, and yield

curve components of overall interest rate risk, FHN

employs Gap, Net Interest Income at Risk, and Economic

Value of Equity analyses generated by a balance sheet

simulation model.

Net Interest Income Simulation Analysis

The information provided in this section, including the

discussion regarding the outcomes of simulation analysis

and rate shock analysis, is forward-looking. Actual results,

if the assumed scenarios were to occur, could differ

because of interest rate movements, the ability of

management to execute its business plans, and other

factors, including those presented in the Forward-Looking

Statements section of this Report.

Management uses a simulation model to measure interest

rate risk and to formulate strategies to improve balance

sheet positioning, earnings, or both, within FHN’s interest

rate risk, liquidity, and capital guidelines. Interest rate

exposure is measured by forecasting 12 months of NII

under various interest rate scenarios and comparing the

percentage change in NII for each scenario to a base case

scenario where interest rates remain unchanged.

Assumptions are made regarding future balance sheet

composition, interest rate movements, and loan and

deposit pricing. In addition, assumptions are made about

the magnitude of asset prepayments and earlier than

anticipated deposit withdrawals. The results of these

scenarios help FHN develop strategies for managing

exposure to interest rate risk. While management believes

the assumptions used and scenarios selected in its

simulations are reasonable, simulation modeling provides

only an estimate, not a precise calculation, of exposure to

any given change in interest rates.

Based on a static balance sheet as of December 31, 2025,

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.

Table 7.27

INTEREST RATE SENSITIVITY

Shifts in Interest Rates (in bps)		% Change in Projected Net Interest Income
-200		(4.5)%
-100		(2.3)%
-50		(1.0)%
-25		(0.5)%
+25		0.5%
+50		0.9%
+100		1.6%
+200		2.6%

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 0.3%. A flattening

yield curve scenario, where long-term rates decrease by

50 basis points and short-term rates are static, results in

an unfavorable NII variance of 0.3%. These hypothetical

scenarios are used to create a risk measurement

   

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framework, and do not necessarily represent

management’s current view of future interest rates or

market developments.

Fair Value Shock Analysis

Interest rate risk and the slope of the yield curve also

affect the fair value of FHN's trading inventory that is

reflected in noninterest income.

Generally, low or declining interest rates with a positively

sloped yield curve tend to increase income through higher

demand for fixed income products. Additionally, the fair

value of FHN's trading inventory can fluctuate as a result

of differences between current interest rates and the

interest rates of fixed income securities in the trading

inventory.

Use of Derivatives to Manage Interest Rate Risk

In the normal course of business, FHN utilizes various

financial instruments (including derivative contracts and

credit-related agreements) to manage the risk of loss

arising from adverse changes in the fair value of certain

financial instruments generally caused by changes in

interest rates, including FHN's securities inventory, certain

term borrowings, and certain loans. Additionally, FHN may

enter into derivative contracts in order to meet clients'

needs. However, such derivative contracts are typically

offset with a derivative contract entered into with an

upstream counterparty in order to mitigate risk associated

with changes in interest rates.

The simulation models and related hedging strategies

discussed above exclude the dynamics related to how fee

income and noninterest expense may be affected by

actual changes in interest rates or expectations of

changes. See Note 21 - Derivatives to the Consolidated

Financial Statements in Part II, Item 8 of this Report for

additional discussion of these instruments.

FHN engages in balance sheet hedging activity, principally

for asset and liability management purposes. Cash flow

hedges are executed to modify interest rate

characteristics of designated commercial loans in order to

reduce the impact of changes in future cash flows due to

market interest rate changes. The following table presents

all swap and floor positions that are utilized for purposes

of managing exposures to the variability of interest rates.

Table 7.28

INTEREST RATE DERIVATIVES DESIGNATED AS CASH FLOW HEDGES

		December 31, 2025
(Dollars in millions)		Notional Value	Fair Value	Weighted-Average Maturity (in years)	Weighted Average Fixed Rate (swaps)/Strike Rate (floors)
Receive fixed SOFR swaps - Loans		$2,000	$(29)	2.5	2.78%
Floors		3,000	15	2.4	1.88%
Total		$5,000	$(14)
		December 31, 2024
(Dollars in millions)		Notional Value	Fair Value	Weighted-Average Maturity (in years)	Weighted Average Fixed Rate (swaps)/Strike Rate (floors)
Receive fixed SOFR swaps - Loans		$2,000	$(85)	3.5	2.78%
Floors		3,000	18	3.4	1.88%
Total		$5,000	$(67)

   

	72	2025 FORM 10-K ANNUAL REPORT

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

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. The Capital & Stress Testing

Committee, chaired by the Corporate Treasurer, reports

to ALCO and is responsible for capital management

oversight and provides a forum for addressing

management issues related to capital adequacy. This

committee reviews sources and uses of capital, key capital

ratios, and segment economic capital allocation

methodologies; coordinates the annual enterprise-wide

stress testing process; and considers other factors in

monitoring and managing current capital levels, as well as

potential future sources and uses of capital. The Capital &

Stress Testing Committee also recommends capital

management policies, which are submitted for approval to

ALCO and the Risk Committee of the Board as necessary.

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. Categories of operational risk typically include the

following:

• Business Resilience Risk

• Business Process Risk

• Fraud Risk

• Physical Security Risk

• Financial Reporting and Recording Risk

• Technology Risk

• Cybersecurity Risk

• Model Risk

• Third Party Risk

Management, measurement, and reporting of operational

risks are overseen by the Operational Risk Committee

which includes key representatives from the business

segments and support functions. Operational risk is

assessed and aggregated across the enterprise quarterly

and reported to the Risk Committee.

Cybersecurity Risk Management

Overview

Cybersecurity risk includes the risks from cyber fraud,

cyber theft, cyber vandalism, cyber ransom, data and

system security, and other unauthorized incursions into

FHN's IT systems. Additional information on this topic is

presented in Cybersecurity Risks within Item 1A beginning

on page 24.

Key Cybersecurity Risk Management Goals

Cybersecurity risk management has two primary goals:

defend FHN and its clients from fraudulent and other

unauthorized incursions; and, when an incursion happens,

detect and respond as soon as practical. The optimal

cybersecurity program will defend as much as is practical

while also detecting rapidly those incursions that get

through.

Management Structure & Key Processes

Operational risk, including cybersecurity risk, is overseen

by FHN's Operational Risk Committee. Members of the

Operational Risk Committee include senior-level

representatives from across FHN. The Operational Risk

Committee reports to FHN's Management Risk

Committee, which is headed by FHN's Chief Risk Officer.

The IT & Information Security Working Group meets

quarterly to discuss emerging cyber risks, regulatory

changes, vendor risk, audits, and outstanding-issue

resolution. The Group also provides updates to the

Operational Risk Committee on cybersecurity aspects of

compliance, policies, and security standards.

The key leaders for these committees, groups, and

processes at FHN are the Chief Information Officer and

Chief Information Security Officer. The Chief Information

Officer has substantial banking, IT, and related experience:

has held roles at FHN since 2009 related to IT and data

systems, culminating in CIO in 2020; prior to joining FHN,

had roles at a large regional bank, including technology

leader of the bank's electronic payments platform related

to treasury management and enterprise IT architect; and,

earned an MS in computer science as well as an MBA. The

Chief Information Security Officer who held that position

during 2025 had over twenty years of banking, IT, and

related experience: oversaw information security and

many related systems and processes; established risk-

based security programs to meet regulatory requirements

and align with business needs; and implemented

numerous data protection, data access, and identity

management systems. In 2026, FHN appointed a new

Chief Information Security Officer who: prior to joining

FHN, had roles at two large U.S. banks and a financial

services firm; has over twenty-five years of leadership

experience in information security, risk management, and

technology; directed complex programs in technology

strategy, program and project management, business

development, application development, and large-scale

system implementations; and led the execution of a multi-

year enterprise-wide cyber strategy.

   

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

FHN has a written Computer Security Incident Response

Plan ("CSIRP") outlining FHN's incident response and

communication processes. FHN's Chief Information

Security Officer or certain other managers have the

authority to initiate the execution of the CSIRP if an

incident occurs. A working group called the Computer

Security Incident Response Team has primary

responsibility to implement or coordinate many of the

CSIRP actions, along with FHN's IT & Information Security

Working Group. Key goals of the CSIRP are to: contain,

remediate, and recover; mitigate impact on FHN and

clients; report findings to Operational Risk and other

senior management; and manage external

communications. FHN periodically conducts response

readiness exercises, including simulated cyber-attack

scenarios, to test the effectiveness of the CSIRP and

ensure resources are prepared to execute response

actions in real time.

FHN engages third-party vendors to conduct several

periodic cybersecurity reviews:  Network Penetration

testing; Cyber Security Maturity Assessment; Red Team

(simulated cyber-attack) testing; SOX (financial reporting

controls and data integrity) testing; and, PCI-DSS

(proprietary data security standard for payment systems)

attestation of compliance and SOC 1 Type II reports

(attesting to the design and operation of cybersecurity

systems) for lockbox and electronic bill pay. The frequency

of these reviews ranges from several times per year to

every three years. FHN also has a cybersecurity incident

specialty firm on retainer for incident response, as

needed.

FHN has a dedicated Third-Party Risk Management

("TPRM") department which oversees third party vendors

and reports up through the Chief Risk Officer. Among

other responsibilities, 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,

which encompasses cybersecurity risk. The Risk

Committee, as well as the full Board, each quarter

receives a risk management update from FHN's Chief Risk

Officer. Each update includes a written presentation

covering all major operational risk areas, including

cybersecurity risk.

Tactical, Operational & Other Impacts

FHN conducts mandatory cybersecurity training for

associates and offers best practices and training programs

for clients to enhance awareness and effectively combat

cyber threats. FHN also actively engages in partnerships

with leading cybersecurity firms and participates in

industry groups to enhance security measures and

intelligence sharing.

FHN invests in technological capabilities that improve

speed and efficiency in combating cyber risks and

implements advanced detection tools and software for

early identification and mitigation of threats.

The measures FHN takes to manage cybersecurity risk

affect how associates and clients use FHN's platforms and

systems. For every safeguard considered or implemented,

FHN must weigh potential and actual inconveniences

against security concerns. Practical realities make it

impossible to maximize security and ignore resulting

restrictions on the ability of associates and clients to

conduct banking and financial business. Primarily for that

reason, cybersecurity risks are and will be a major risk

management concern, and losses from incursions will be

impossible to avoid. As mentioned above, FHN's goals are

to prevent what can be prevented, and detect and

respond to incursions that get through as quickly as

possible.

For those incursions that are not blocked, FHN's processes

are designed to detect them quickly enough so that the

financial and operational impact on FHN is zero or modest.

But the risk of a major incursion occurring cannot be

reduced to zero. A major incursion could have a material

financial impact on FHN's business operations and

earnings.

Compliance Risk Management

Compliance risk is the risk of legal or regulatory sanctions,

material financial or other loss that the Company may

suffer as a result of its failure to operate in a safe and

sound manner, failure to comply with laws, regulations,

rules, related self-regulatory organization standards, and

codes of conduct applicable to its financial services

activities. Management, measurement, and reporting of

compliance risk are overseen by the Compliance Risk

Committee and other key Corporate Governance

Committees. Summary reports of Committee activities

and decisions are provided to the appropriate Board

governance committees.

Credit Risk Management

Credit risk is the risk of loss due to adverse changes in a

borrower’s or counterparty’s ability or willingness to meet

its financial obligations under agreed upon terms. FHN is

subject to credit risk in lending, trading, investing,

   

	74	2025 FORM 10-K ANNUAL REPORT

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

liquidity/funding, and asset management activities

although lending activities have the most exposure to

credit risk. The nature and amount of credit risk depends

on the types of transactions, the structure of those

transactions, collateral received, the use of guarantors

and the parties involved.

FHN assesses and manages credit risk through a series of

policies, processes, measurement systems, and controls.

The Credit Risk Management Committee ("CRMC") is

responsible for overseeing the management of existing

and emerging credit risks in the company within the broad

risk tolerances established by the Board. The CRMC

reports through the Management Risk Committee. 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.

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. Adherence to these

approved limits is vigorously monitored by Credit Risk

which provides recommendations to slow or cease lending

to the business lines as commitments near established

lending limits. Credit Risk also ensures subject matter

experts are providing oversight, support and credit

approvals, particularly in the specialty and wholesale

lending areas where industry-specific knowledge is

required. Management emphasizes general portfolio

servicing such that emerging risks are able to be spotted

early enough to correct potential deficiencies, prevent

further credit deterioration, and mitigate 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. The CRMC

reviews on a periodic basis various reports issued by

assurance functions which provide an independent

assessment of the adequacy of loan servicing, grading

accuracy, and other key functions. Additionally, CRMC is

presented with and discusses various portfolios, lending

activity and lending-related projects.

All of the above activities are subject to independent

review by FHN’s Credit Assurance Services Group ("CAS").

CAS reports to the CAS Director who is appointed by and

reports functionally to the Risk Committee of the Board

(and administratively to the Chief Audit Executive) and

provides quarterly reports to that Committee. CAS is

charged with providing the Risk Committee of the Board

and executive management with independent, objective,

and timely assessments of FHN’s portfolio quality, credit

policies, and credit risk management processes.

Liquidity Risk Management

Among other things, ALCO is responsible for liquidity

management: the funding of assets with liabilities of

appropriate duration, while mitigating the risk of

unexpected cash needs. ALCO and the Board of Directors

have adopted a Liquidity Policy with the objective of

ensuring that FHN meets its cash and collateral obligations

promptly, in a cost-effective manner, and with the highest

degree of reliability. The maintenance of adequate levels

of asset and liability liquidity should provide FHN with the

ability to meet both expected and unexpected cash and

collateral needs. Key liquidity ratios, asset liquidity levels,

and the amount available from funding sources are

reported to ALCO on a regular basis. FHN’s Liquidity Policy

establishes liquidity limits that are deemed appropriate

for FHN’s risk profile.

In accordance with the Liquidity Policy, ALCO manages

FHN’s exposure to liquidity risk through forecasts of its

liquidity position and funding needs. Base liquidity

forecasts are reviewed by ALCO and are updated as

financial conditions dictate. In addition to the baseline

liquidity reports, stress testing of assumptions and funds

availability is periodically conducted. FHN maintains a

contingency funding plan that may be executed should

unexpected difficulties arise in accessing funding that

affects FHN, the industry, or both. As of December 31,

2025, available liquidity sources included cash,

incremental borrowing capacity at the FHLB, access to

Federal Reserve Bank borrowings through the discount

window, and unencumbered securities. Additional sources

of liquidity included dealer and commercial customer

repurchase agreements, access to Federal Funds markets,

brokered deposits, loan sales, and syndications. The table

below details FHN’s sources of available liquidity as of

December 31, 2025.

   

	75	2025 FORM 10-K ANNUAL REPORT

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

Table 7.29

AVAILABLE LIQUIDITY

as of December 31, 2025

(Dollars in millions)		Total Capacity		Outstanding Borrowings		Available Liquidity
Cash on deposit with FRB (a)		$1,035		$—		$1,035
FHLB		9,356		50		9,306
Discount Window		21,169		—		21,169
Unencumbered securities (b)		1,069		—		1,069
Total available liquidity						$32,579

(a) Included in interest-bearing deposits with banks on the

Consolidated Balance Sheets.

(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% as of both December 31,

2025 and 2024.

FHN may also use unsecured short-term borrowings as a

source of liquidity. Federal funds purchased from

correspondent bank clients are considered to be

substantially more stable than funds purchased in the

national broker markets for federal funds due to the long,

historical, and reciprocal nature of banking services

provided by FHN to these correspondent banks. The

remainder of FHN’s wholesale short-term borrowings

consists of securities sold under agreements to repurchase

transactions accounted for as secured borrowings with

business clients or broker-dealer counterparties.

Both FHN and First Horizon Bank have the ability to

generate liquidity by issuing senior or subordinated

unsecured debt, preferred equity, and common equity,

subject to market conditions and compliance with

applicable regulatory requirements. During first quarter

2025, FHN issued $500 million of Fixed Rate/Floating Rate

Senior Notes. FHN retired $350 million in senior notes

during second quarter 2025. As of December 31, 2025,

FHN had outstanding $946 million in senior and

subordinated unsecured debt and $349 million in non-

cumulative perpetual preferred stock. FHN redeemed all

outstanding shares of its Series B Non-Cumulative

Perpetual Preferred Stock during third quarter 2025. Refer

to Note 11 - Preferred Stock to the Consolidated Financial

Statements in Part II, Item 8 of this Report for additional

information. As of December 31, 2025, First Horizon Bank

and subsidiaries had outstanding preferred shares of

$295 million, which are reflected as noncontrolling

interest on the Consolidated Balance Sheets.

Parent company liquidity is primarily provided by cash

flows stemming from dividends and interest payments

collected from subsidiaries. These sources of cash

represent the primary sources of funds to pay cash

dividends to shareholders and principal and interest to

debt holders of FHN. The amount paid to the parent

company through First Horizon Bank common dividends is

managed as part of FHN’s overall cash management

process, subject to applicable regulatory restrictions.

Certain regulatory restrictions exist regarding the ability of

First Horizon Bank to transfer funds to FHN in the form of

cash, common dividends, loans, or advances. At any given

time, the pertinent portions of those regulatory

restrictions allow First Horizon Bank to declare preferred

or common dividends without prior regulatory approval in

an aggregate amount equal to First Horizon Bank’s

retained net income for the two most recently completed

years plus the current year-to-date period. 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 $88 million as of January 1, 2026.

Consequently, on that date the Bank could pay common

dividends up to that amount to its sole common

shareholder, FHN, or to its preferred shareholders without

prior regulatory approval. Additionally, a capital

conservation buffer must be maintained (as described in

the Capital section of this Report) to avoid restrictions on

dividends.

First Horizon Bank declared and paid common dividends

to the parent company in the amount of $1.0 billion in

2025 and $1.1 billion in 2024. In January 2026, First

Horizon Bank declared and paid a common dividend to the

parent company in the amount of $50 million. First

Horizon Bank declared and paid preferred dividends in

each quarter of 2025 and 2024. Additionally, First Horizon

Bank declared preferred dividends in first quarter 2026,

payable in April 2026.

Payment of a dividend to shareholders of FHN is

dependent on several factors which are considered by the

Board. These factors include FHN’s current and

prospective capital, liquidity, and other needs, applicable

regulatory restrictions (including capital conservation

buffer requirements) and availability of funds to FHN

through a dividend from First Horizon Bank.  Additionally,

banking regulators generally require insured banks and

bank holding companies to pay cash dividends only out of

current operating earnings. Consequently, the decision of

whether FHN will pay future dividends and the amount of

dividends will be affected by current operating results.

FHN paid a cash dividend of $0.15 per common share on

January 2, 2026. FHN paid cash dividends of $1,625 per

Series E preferred share and $1,175 per Series F preferred

share on January 12, 2026 and $165 per Series C preferred

share on February 2, 2026. In addition, in January 2026,

the Board approved cash dividends per share in the

following amounts:

   

	76	2025 FORM 10-K ANNUAL REPORT

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

Table 7.30

CASH DIVIDENDS APPROVED BUT NOT PAID

		Dividend/ Share		Record Date		Payment Date
Common Stock		$0.17		3/13/2026		4/1/2026
Preferred Stock
Series C		$165.00		4/16/2026		5/1/2026
Series E		$1,625.00		3/26/2026		4/10/2026
Series F		$1,175.00		3/26/2026		4/10/2026

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. Such activities

include traditional off-balance sheet credit-related

financial instruments. FHN enters into commitments to

extend credit to borrowers, including loan commitments,

lines of credit, standby letters of credit, and commercial

letters of credit. Many of the commitments are expected

to expire unused or be only partially used; therefore, the

total amount of commitments does not necessarily

represent future cash requirements and are not included

in the table below. Based on its available liquidity and

available borrowing capacity, FHN anticipates it will

continue to have sufficient funds to meet its current

commitments. See Note 16 - Contingencies and Other

Disclosures to the Consolidated Financial Statements in

Part II, Item 8 of this Report for more information.

Contractual Obligations

The following table sets forth contractual obligations

representing required and potential cash outflows as of

December 31, 2025. Purchase obligations represent

obligations under agreements to purchase goods or

services that are enforceable and legally binding on FHN

and that specify all significant terms, including fixed or

minimum quantities to be purchased; fixed, minimum, or

variable price provisions; and the approximate timing of

the transaction.

Table 7.31

CONTRACTUAL OBLIGATIONS

as of December 31, 2025

		Payments due by period (a)
		Less than		1 year -		3 years -		After 5
(Dollars in millions)		1 year		< 3 years		< 5 years		years		Total
Contractual obligations:
Time deposit maturities (b) (c)		$6,037		$397		$45		$6		$6,485
Short-term borrowings (b) (d)		3,861		—		—		—		3,861
Term borrowings (b) (e)		—		—		450		889		1,339
Annual rental commitments under noncancelable leases (b) (f)		45		94		79		243		461
Purchase obligations		261		266		61		21		609
Total contractual obligations		$10,204		$757		$635		$1,159		$12,755

(a) Excludes a $12 million liability for unrecognized tax benefits as the timing of payment cannot be reasonably estimated.

(b) Amounts do not include interest.

(c) See Note 8 - Deposits for further details.

(d) See Note 9 - Short-Term Borrowings for further details.

(e) See Note 10 - Term Borrowings for further details.

(f) See Note 5 - Premises, Equipment, and Leases for further details.

   

	77	2025 FORM 10-K ANNUAL REPORT

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

Credit Ratings

FHN is currently able to fund a majority of the balance

sheet through core deposits, which are generally not

directly tied to FHN’s credit ratings as are other types of

funding. However, maintaining adequate credit ratings on

debt issuances and preferred stock is critical to liquidity

should FHN need to access funding from other sources,

including from long-term debt issuances and certain

brokered deposits, at an attractive rate. The availability

and cost of funds other than core deposits is also

dependent upon marketplace perceptions of the financial

soundness of FHN, which include such factors as capital

levels, asset quality, and reputation. The availability of

core deposit funding is stabilized by federal deposit

insurance, which can be removed only in extraordinary

circumstances, but may also be influenced to some extent

by the same factors that affect other funding sources.

FHN’s credit ratings are also referenced in various respects

in agreements with certain derivative counterparties as

discussed in Note 21 - Derivatives to the Consolidated

Financial Statements in Part II, Item 8 of this Report.

The following table provides FHN’s most recent credit

ratings.

Table 7.32

CREDIT RATINGS

		Moody's (a)		Fitch (b)
First Horizon Corporation
	Overall credit rating: Long-term/Short-term/Outlook	Baa3/--/Positive		BBB+/F2/Stable
	Long-term senior debt	Baa3		BBB+
	Subordinated debt (c)	Baa3		BBB+
	Junior subordinated debt (c)	Ba1		BB
	Preferred stock	Ba2		BB
First Horizon Bank
	Overall credit rating: Long-term/Short-term/Outlook	Baa3/P-2/Positive		BBB+/F2/Stable
	Long-term/short-term deposits	A3/P-2		A-/F2
	Long-term/short-term senior debt (c)	Baa3/P-2		BBB+/F2
	Subordinated debt	Baa3		BBB
	Preferred stock	Ba2		BB
FT Real Estate Securities Company, Inc.
	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 positive ("Positive") on June 11, 2025.

(b) Last change in ratings was on October 3, 2024. Outlook changed to stable ("Stable") on May 5, 2023.

(c) Ratings are preliminary/implied.

Market Uncertainties and Prospective Trends

FHN’s future results could be affected both positively and

negatively by several known trends. Key among those are

changes in the U.S. and global economy and outlook,

government actions affecting interest rates, and

government actions and proposals which could have

positive or negative impacts on the economy at large or

on certain businesses, industries, or sectors, including

changes in fiscal policy and changes in trade policy, such

as the imposition of tariffs and related retaliatory

responses. Additional risks relate to political uncertainty,

changes in federal policies (including those publicly

discussed, formally proposed, or recently implemented)

and the potential impacts of those changes on our

businesses and clients, and whether FHN’s strategic

initiatives will succeed.

In addition to trends and events noted elsewhere in this

MD&A, FHN believes the following trends and events are

noteworthy at this time.

   

	78	2025 FORM 10-K ANNUAL REPORT

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

Federal Reserve Policy, the Yield Curve, Recession, Fiscal & Trade Policy, Other Events

Federal Reserve and Rates

The Federal Reserve raised short-term rates several times

in 2022 and 2023 to contain strong inflation which began

in 2021 and peaked in 2022. The rise in short-term

interest rates by the Federal Reserve in 2022 was both

rapid and substantial, taking the overnight Fed Funds rate

from 0.20% in March 2022 to 5.33% by the fall of 2023. As

a result of Federal Reserve rate cuts of 50 basis points in

September 2024 and cuts of 25 basis points in both

November and December of that year, the overnight Fed

Funds fell back to 4.33% by the end of 2024. But despite

the Federal Reserve's rapid and vigorous tightening of

monetary policy in 2022 and 2023 and limited rate cuts in

2024, measures of inflation still generally remain higher

than the Federal Reserve's stated goal of 2%.

In each of September, October, and December of 2025,

the Federal Reserve announced 25 basis point cuts in the

Fed Funds rate, lowering the target range to 3.50% to

3.75%, but in January 2026 the Federal Reserve decided to

hold the target range steady. In its statement announcing

its January decision to maintain the target range, the

Federal Reserve noted that economic activity had been

expanding at a solid pace and the unemployment rate

showed signs of stabilization, but inflation remained

somewhat elevated. Looking ahead to 2026, market

consensus points to the possibility of two additional 25

basis point cuts, contingent on inflation trends and

broader economic conditions.

FHN continues to closely monitor economic developments

and assess potential exposures. FHN cannot predict when

or how much short-term rates will be changed, how

market-driven long-term rates will behave, or how those

actions may affect economic or business conditions or

financial markets.

Yield Curve

Historically, the yield curve is usually upward sloping

(higher rates for longer terms and lower rates for shorter

terms). However, the yield curve can be relatively flat or

inverted (downward sloping). Inversion normally is rare

but has happened several times in the past, including

most recently, from the summer of 2022 until September

2024. Since the fall of 2024, the yield curve has continued

to modestly steepen.

Yield curve flattening and inversion generally reduce the

profit FHN can make from lending by compressing FHN's

net interest margin ("NIM"), and also generally reduce

FHN's revenues from its fixed income bond trading. Both

of those impacts occurred from 2022 through 2024, with

fluctuations. During each quarter of 2025, net interest

margin consistently exceeded the level of the comparable

quarter in 2024, as the yield curve maintained its more

typical upward slope, while fixed income bond trading

revenues fluctuated during the year due to changing

market conditions with revenue from bond trading and

related activities showing improvement in the first, third

and fourth quarters, but declining in the second quarter

due to less favorable market conditions. While NIM for

2025 as a whole expanded as compared with 2024,

quarterly results for 2025 varied with strong quarter-to-

quarter expansions of NIM in the first and third quarters

and small quarter-to-quarter declines in the second and

fourth quarters.

FHN cannot predict whether these trends will continue.

Other Impacts on FHN of Rate Actions

Rate increases pushed home mortgage rates in the U.S.

much higher in 2022 and 2023, reducing demand. FHN's

direct mortgage lending and lending to mortgage

companies saw business decline significantly in 2022 and

2023. Mortgage rates have modestly abated since 2023

and FHN's mortgage business has seen improvement, but

rates have remained elevated. However, the negative

impacts of these higher rates have been offset by gains in

market share. Changes in interest rates and interest rate

policy could have a material impact on our business and

financial results.

Recession

The U.S. economy contracted (experienced negative

growth) during the first two quarters of 2022, in both

cases modestly. Although the occurrence of two

consecutive quarters of contraction often coincides with

recession, in 2022, it did not. The economy has expanded

in each quarter since then, except for a slight decline in

the first quarter of 2025 before expansion resumed in the

second quarter of 2025. The expansion rate has varied

without a sustained trend. Recession expectations have

moderated significantly since 2023, but recession still

remains possible.

2023 Banking Crisis

In 2023, three large regional U.S. banks failed after sudden

large deposit outflows. In the aftermath of these failures,

bank investors and clients across the U.S. became more

focused on deposit mix, funding risk management, and

other safety-soundness concerns. Most U.S. banks saw

abrupt net outflows of deposits in the spring of 2023

following the failures. Most have since recouped those

deposits, mainly by offering higher interest rates. In 2024,

competition for deposits was quite intense. Increased

competition for deposits has continued in 2025 and could

continue throughout the remainder of 2026.

Fiscal Policy

Fiscal policy (spending and taxation) directly affects U.S.

government annual deficits or surpluses, along with the

size and trajectory of the national debt. Fiscal policy often

has a significant impact on the U.S. economy. The changes

   

	79	2025 FORM 10-K ANNUAL REPORT

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

in the executive and legislative branches of government in

2025 have resulted in significant changes in U.S. fiscal

policy, including through the enactment on July 4, 2025 of

federal legislation commonly referred to as the "One Big

Beautiful Bill Act." The legislation includes several

provisions that may impact the timing and magnitude of

certain tax deductions and tax credits. The accelerated

federal tax deductions for bonus depreciation and

research or experimental expenditures will reduce FHN's

federal tax liability starting in 2025. FHN does not expect a

significant impact from provisions that sunset certain

Section 48E Clean Electricity Tax Credits on its future

financial results. Provisions limiting the deductibility of

annual corporate charitable deductions to amounts in

excess of 1% of taxable income may affect the timing and

amount of charitable donations. Refer to the Income

Taxes section of this MD&A for additional information

regarding the impact of this legislation on FHN. 

Trade Policy

In 2025, the U.S. government announced new tariffs on a

variety of goods and services. As of early February 2026,

the timing, scope and duration of tariffs, as well as the

timing, scope and duration of any retaliatory measures by

foreign governments, remain uncertain, as does the

impact of tariffs on economic growth, inflation rates, and

employment rates. Any significant change in economic

conditions related to tariffs could materially affect our

financial condition and results of operations.

Other Regulatory Proposals

In 2023, the Board of Governors of the Federal Reserve

and other regulators proposed regulatory changes that

would, if implemented, significantly increase regulatory

constraints and costs on all U.S. banks with assets over

$100 billion, but those regulations appear unlikely to be

adopted in the form originally proposed. 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. The increased

requirements also would entail additional compliance

costs.

Greenhouse Gas (GHG) Reporting Regimes

Regulatory Proposals

Several states have enacted or proposed statutes or

regulations addressing climate-related issues. For

example, in 2023, California enacted two laws which,

taken together, will require most larger companies doing

business in California to report annually their greenhouse

gas (GHG) emissions and to report biennially their climate-

related financial risks and risk-mitigation measures. The

California laws have been challenged in court and certain

of those challenges remain pending.

In addition, in March 2024, the SEC adopted final rules

which 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. There is considerable

uncertainty as to whether these rules will be implemented

as adopted, both because the SEC has suspended

effectiveness of those rules while legal challenges are

pending and because shifts in executive and legislative

branches of government could lead the SEC to withdraw

or significantly alter those rules.

In March 2025, the SEC voted to end its defense of its

climate disclosure rules in the pending legal action, but

the SEC has not withdrawn or modified those rules nor has

the legal challenge to those rules been dismissed. On

September 12, 2025, the U.S. Court of Appeals for the

Eighth Circuit ordered the litigation to be held in abeyance

until the SEC reconsiders its rules through formal notice-

and-comment rulemaking or renews its defense of the

rules.

Potential Business Impacts

Direct compliance costs related to the SEC's and

California's GHG reporting regimes, if implemented, 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).

   

	80	2025 FORM 10-K ANNUAL REPORT

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

Market Growth and Weather Events

FHN's principal markets are in the southern and

southeastern United States, including most of the major

gulf coast markets and several markets on the southern

Atlantic seacoast. Many of FHN's markets, both coastal

and non-coastal, have experienced significant population

growth over at least the past twenty years, outpacing the

growth rate for the U.S. as a whole. 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.

Especially since 2022, it has been widely reported that the

economic costs of hurricane and other severe weather

events in the southeastern U.S. have been rising

significantly.

This reported increase in casualty risks and costs is being

reflected in property insurance practices which currently

are in significant flux. The insurance industry and

insurance regulators are being forced to revise their risk

assessment and premium pricing policies in coastal and

other impacted areas as loss experience has deviated from

earlier predictions, sometimes substantially. In Florida, for

example, some smaller carriers failed, some larger carriers

left markets, and other carriers significantly increased the

premiums of hurricane-related insurance, narrowed

coverage, or both, resulting in numerous proposals for

legislative and regulatory reform.

The availability, reliability, and cost of adequate property

insurance is a significant concern for FHN as well as FHN's

clients in affected markets. 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.

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. Management believes the accounting

estimate related to the ALLL is a “critical accounting

estimate” as: (1) changes in it can materially affect the

provision for loan and lease losses and net income; (2) it

requires management to predict borrowers’ likelihood or

capacity to repay, including evaluation of inherently

uncertain future economic conditions; (3) prepayment

activity must be projected to estimate the life of loans

that often are shorter than contractual terms; (4) it

requires estimation of a reasonable and supportable

forecast period for credit losses for loan portfolio

segments before reversion to historical loss levels over the

remaining life of a loan; and (5) expected future recoveries

of amounts previously charged off must be estimated.

Accordingly, this is a highly subjective process and

requires significant judgment since it is difficult to

evaluate current and future economic conditions in

relation to an overall credit cycle and estimate the timing

and extent of loss events that are expected to occur prior

to the end of a loan’s or lease's estimated life.

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.

While management uses the best information available to

establish the ALLL, future adjustments to the ALLL and

   

	81	2025 FORM 10-K ANNUAL REPORT

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

methodology may be necessary if economic or other

conditions differ substantially from the assumptions used

in making the estimates. Such adjustments to prior

estimates, as necessary, are made in the period in which

these factors and other relevant considerations indicate

that loss levels vary from previous estimates.

Selection and weighting of macroeconomic forecasts are

the most significant inputs in quantitative ALLL

calculations. 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, 2025, FHN utilized Moody's

Baseline, S1 (upside) and S3 (adverse) scenarios for the

calculation of the ALLL. FHN placed the most weight on

the Moody's Baseline scenario but included the S1 and S3

scenarios to reflect the uncertainty of macroeconomic

forecasts related to ongoing economic conditions.

Due to the dynamic relationship of macroeconomic inputs

in modeling calculations, quantifying the effects of

changing individual inputs is highly challenging.

Additionally, management applies judgment in developing

qualitative adjustments that are considered necessary to

appropriately reflect elements of credit risk that are not

captured in the quantitative model results. To provide

some hypothetical sensitivity analysis, FHN prepared two

alternate quantitative calculations, applying 100%

weighting to Moody's Baseline and S3 (adverse) scenarios. 

These hypothetical calculations resulted in a 7% reduction

and 31% increase, respectively, in ALLL in comparison to

the ALLL recorded as of December 31, 2025, inclusive of

qualitative adjustments that are affected by the weighting

of forecast scenarios.

See Note 1 - Significant Accounting Policies and Note 4 -

Allowance for Credit Losses to the Consolidated Financial

Statements in Part II, Item 8 of this Report for detail

regarding FHN’s processes, models, and methodology for

determining the ALLL.

Income Taxes

FHN is subject to the income tax laws of the U.S. and the

states and jurisdictions in which it operates. FHN accounts

for income taxes in accordance with ASC 740, "Income

Taxes." Significant judgments and estimates are required

in the determination of the consolidated income tax

expense. FHN's income tax expense, deferred tax assets

and liabilities, and liabilities for unrecognized tax benefits

reflect management’s best estimates of current and future

taxes to be paid.

Income tax expense consists of both current and deferred

taxes. Current income tax expense is an estimate of taxes

to be paid or refunded for the current period and includes

income tax expense related to uncertain tax positions. A

DTA or a DTL is recognized for the tax consequences of

temporary differences between the financial statement

carrying amounts and the tax bases of existing assets and

liabilities. Deferred taxes can be affected by changes in tax

rates applicable to future years, either as a result of

statutory changes or the alteration of business activities in

jurisdictions in which FHN is or may become subject to

taxation. Additionally, DTAs are subject to a “more likely

than not” test to determine whether the full amount of

the DTAs should be realized in the financial statements.

FHN evaluates the likelihood of realization of the DTA

based on both positive and negative evidence available at

the time, including (as appropriate) scheduled reversals of

DTLs, projected future taxable income, tax planning

strategies, and recent financial performance. Realization is

dependent on generating sufficient taxable income prior

to the expiration of the carryforwards attributable to or

generated with respect to the DTA. In projecting future

taxable income, FHN incorporates assumptions including

the amount of future state and federal pre-tax operating

income, the reversal of temporary differences, and the

implementation of feasible and prudent tax planning

strategies. These assumptions require significant

judgment about the forecasts of future taxable income

and are consistent with the plans and estimates used to

manage the underlying business. If the “more likely than

not” test is not met, a valuation allowance must be

established against the DTA.

The income tax laws of the jurisdictions in which FHN

operates are complex and subject to different

interpretations by the taxpayer and the relevant

government taxing authorities. In determining if a tax

position should be recognized and in establishing a

provision for income tax expense, FHN must make

judgments and interpretations about the application of

these inherently complex tax laws. Interpretations may be

subjected to review during examination by taxing

authorities and disputes may arise over the respective tax

positions. FHN attempts to resolve disputes that may arise

during the tax examination and audit process. However,

certain disputes may ultimately be resolved through the

federal and state court systems.

FHN monitors relevant tax authorities and revises

estimates of accrued income taxes on a quarterly basis.

Changes in estimates may occur due to changes in income

tax laws and their interpretation by the courts and

regulatory authorities. Revisions of estimates may also

result from income tax planning and from the resolution

of income tax controversies. Revisions in estimates may

be material to operating results for any given period.

See Note 14 - Income Taxes to the Consolidated Financial

Statements in Part II, Item 8 of this Report for additional

   

	82	2025 FORM 10-K ANNUAL REPORT

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

information including discussion of valuation allowances

related to deferred tax assets and the potential impact of

unrecognized tax benefits on future earnings.

Contingent Liabilities

A liability is contingent if the amount or outcome is not

presently known but may become known in the future as

a result of the occurrence of some uncertain future event.

FHN estimates its contingent liabilities based on

management’s ability to reasonably estimate the loss or

range of loss related to probable loss outcomes and

management's estimates of reasonably possible loss

associated with less-than-probable, but more-than-

remote, loss outcomes. Accounting standards require that

a liability be recorded if management determines that it is

probable that a loss has occurred and the loss can be

reasonably estimated. In addition, it must be probable

that the loss will be confirmed by some future event. As

part of the estimation process, management is required to

make assumptions about matters that are, by their nature,

highly uncertain and difficult to estimate.

The assessment of contingent liabilities, including legal

contingencies, involves the use of critical estimates,

assumptions, and judgments. Management’s estimates

are based on its belief that future events will validate the

current assumptions regarding the ultimate outcome of

these exposures. However, there can be no assurance that

future events, such as court decisions or decisions of

arbitrators, will not differ from management’s

assessments. Whenever practicable, management

consults with third-party experts (e.g., attorneys,

accountants, claims administrators, etc.) to assist with the

gathering and evaluation of information related to

contingent liabilities. Based on internally and/or externally

prepared evaluations, management makes a

determination whether the potential exposure requires

accrual in the financial statements.

See Note 16 - Contingencies and Other Disclosures to the

Consolidated Financial Statements in Part II, Item 8 of this

Report for additional information regarding FHN's existing

material contingent liabilities, including those with and

without loss accruals, and discussion of reasonably

possible loss amounts for pending litigation matters.

Accounting Changes

Refer to Note 1 – Significant Accounting Policies to the

Consolidated Financial Statements in Part II, Item 8 of this

Report for a summary of accounting changes and

accounting changes issued but not currently effective,

which section is incorporated into this MD&A by this

reference.

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. Although other entities may

use calculation methods that differ from those used by

FHN for non-GAAP measures, FHN’s management believes

such measures are relevant to understanding the financial

condition, capital position, and financial results of FHN

and its business segments. Non-GAAP measures are

reported to FHN’s management and Board of Directors

through various internal reports.

The non-GAAP measures presented in this report are pre-

provision net revenue, return on average tangible

common equity, tangible common equity to tangible

assets, and tangible book value per common share. Table

7.33 provides a reconciliation of non-GAAP items

presented in this report to the most comparable GAAP

presentation.

Presentation of regulatory measures, even those which

are not GAAP, provides a meaningful basis 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. Although not GAAP terms, these

regulatory measures are not considered “non-GAAP”

under U.S. financial reporting rules as long as their

presentation conforms to regulatory standards.

Regulatory measures used in this MD&A include: common

equity tier 1 capital, generally defined as common equity

less goodwill, other intangibles, and certain other required

regulatory deductions; tier 1 capital, generally defined as

the sum of core capital (including common equity and

instruments that cannot be redeemed at the option of the

holder) adjusted for certain items under risk based capital

regulations; and risk-weighted assets, which is a measure

of total on- and off-balance sheet assets adjusted for

credit and market risk, used to determine regulatory

capital ratios.

The following table provides a reconciliation of non-GAAP

items presented in this MD&A to the most comparable

GAAP presentation.

   

	83	2025 FORM 10-K ANNUAL REPORT

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

Table 7.33

NON-GAAP TO GAAP RECONCILIATION

(Dollars in millions; shares in thousands)		2025		2024		2023
Pre-provision Net Revenue (Non-GAAP)
Net interest income (GAAP)		$2,622		$2,511		$2,540
Plus: Noninterest income (GAAP)		797		679		927
Total revenues (GAAP)		3,419		3,190		3,467
Less: Noninterest expense (GAAP)		2,074		2,035		2,079
Pre-provision net revenue (Non-GAAP)		$1,345		$1,155		$1,388
Tangible Common Equity (Non-GAAP)
(A) Total equity (GAAP)		$9,142		$9,111		$9,291
Less: Noncontrolling interest (a)		295		295		295
Less: Preferred stock (a)		349		426		520
(B) Total common equity		8,498		8,390		8,476
Less: Goodwill and other intangible assets (GAAP) (b)		1,615		1,653		1,696
(C) Tangible common equity (Non-GAAP)		$6,883		$6,737		$6,780
Tangible Assets (Non-GAAP)
(D) Total assets (GAAP)		$83,876		$82,152		$81,661
Less: Goodwill and other intangible assets (GAAP) (b)		1,615		1,653		1,696
(E) Tangible assets (Non-GAAP)		$82,261		$80,499		$79,965
Average Tangible Common Equity (Non-GAAP)
Average total equity (GAAP)		$9,142		$9,136		$8,905
Less: Average noncontrolling interest (a)		295		295		295
Less: Average preferred stock (a)		388		450		758
(F) Total average common equity		8,459		8,391		7,852
Less: Average goodwill and other intangible assets (GAAP) (b)		1,633		1,674		1,720
(G) Average tangible common equity (Non-GAAP)		$6,826		$6,717		$6,132
Net Income Available to Common Shareholders
(H) Net income available to common shareholders (GAAP)		$956		$738		$865
Period-end shares outstanding
(I) Period-end shares outstanding		484,825		524,280		558,839
Ratios
(A)/(D) Total period-end equity to period-end assets (GAAP)		10.90%		11.09%		11.38%
(C)/(E) Tangible common equity to tangible assets (Non-GAAP)		8.37		8.37		8.48
(H)/(F) Return on average common equity (GAAP)		11.30		8.80		11.01
(H)/(G) Return on average tangible common equity (Non-GAAP)		14.01		10.99		14.10
(B)/(I) Book value per common share (GAAP)		$17.53		$16.00		$15.17
(C)/(I) Tangible book value per common share (Non-GAAP)		$14.20		$12.85		$12.13

(a) Included in total equity on the Consolidated Balance Sheets.

(b) Includes goodwill and other intangible assets, net of amortization.

   

	84	2025 FORM 10-K ANNUAL REPORT

ITEM 7A. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Table of Contents

Item 7A.Quantitative and Qualitative Disclosures

About Market Risk

The information called for by this Item is incorporated

herein by reference to: 2025 MD&A (Item 7), which begins

on page 40 of this report; Note 21—Derivatives, which

begins on page 160 of this report; and Note 22—Master

Netting and Similar Agreements - Repurchase, Reverse

Repurchase, and Securities Borrowing Transactions, which

begins on page 167 of this report. Within 2025 MD&A,

these sections are especially pertinent to this Item 7A:

Market Risk Management and Interest Rate Risk

Management which begin, respectively, on pages 68 and

70 of this report. Notes 21 and 22 are part of our 2025

Financial Statements (Item 8).

   

	85	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	ITEM 8 TOPICS

Item 8.Financial Statements and Supplementary

Data

TABLE OF ITEM 8 TOPICS

Report of Management on Internal Control over Financial Reporting	86
Report of Independent Registered Public Accounting Firm	87
Consolidated Balance Sheets	91
Consolidated Statements of Income	92
Consolidated Statements of Comprehensive Income (Loss)	94
Consolidated Statements of Changes in Equity	95
Consolidated Statements of Cash Flows	96
Notes to the Consolidated Financial Statements	98
Note 1 Significant Accounting Policies	98
Note 2 Investment Securities	110
Note 3 Loans and Leases	113
Note 4 Allowance for Credit Losses	121
Note 5 Premises, Equipment, and Leases	124
Note 6 Goodwill and Other Intangible Assets	126
Note 7 Mortgage Banking Activity	127
Note 8 Deposits	128
Note 9 Short-Term Borrowings	129
Note 10 Term Borrowings	130
Note 11 Preferred Stock	132
Note 12 Regulatory Capital and Restrictions	133
Note 13 Components of Other Comprehensive Income (Loss)	135
Note 14 Income Taxes	136
Note 15 Earnings Per Share	140
Note 16 Contingencies and Other Disclosures	141
Note 17 Retirement Plans and Other Employee Benefits	142
Note 18 Stock Options and Restricted Stock	147

Note 19 Business Segment Information	150
Note 20 Variable Interest Entities	157
Note 21 Derivatives	160
Note 22 Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions	167
Note 23 Fair Value of Assets and Liabilities	169
Note 24 Parent Company Financial Information	184

   

	86	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	MANAGEMENT REPORT ON ICOFR

Report of Management on Internal Control over Financial Reporting

Management at First Horizon Corporation is responsible for establishing and maintaining adequate internal control over

financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. First Horizon

Corporation’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles.

Even effective internal controls, no matter how well designed, have inherent limitations such as the possibility of human error

or of circumvention or overriding of controls, and consideration of cost in relation to benefit of a control. Moreover,

effectiveness must necessarily be considered according to the existing state of the art of internal control. 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, 2025. 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).

Based on our assessment and those criteria, management believes that First Horizon Corporation maintained effective

internal control over financial reporting as of December 31, 2025.

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. That report appears on the

following page.

   

	87	2025 FORM 10-K ANNUAL REPORT

ITEM 8. 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, 2025, 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, 2025, 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, 2025 and 2024, the related consolidated

statements of income, comprehensive income (loss), changes in equity, and cash flows for each of the years in the three-year

period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report

dated February 26, 2026 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its

assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of

Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s

internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and

are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the

applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform

the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in

all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal

control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and

operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other

procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our

opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to

permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and

expenditures of the company are being made only in accordance with authorizations of management and directors of the

company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or

disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,

projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Memphis, Tennessee

February 26, 2026

   

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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, 2025 and 2024, the related consolidated statements of income, comprehensive income (loss), changes in

equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes

(collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all

material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations

and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally

accepted accounting principles.

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, 2025, 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 26, 2026 expressed an unqualified opinion on the effectiveness of the Company’s

internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express

an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with

the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform

the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material

misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material

misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that

respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We

believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial

statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts

or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging,

subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the

consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,

providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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, 2025, was $738 million, of which a portion related to the allowance for loan losses for loans

collectively evaluated for impairment (the collective ALLL). The collective ALLL includes the measure of expected

credit losses on a collective (pooled) basis for those loans that share similar risk characteristics. 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

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	OPINION ON CONSOLIDATED FINANCIAL STATEMENTS

conditions that affect the collectability of future cash flows. 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

default (EAD), including amortization and prepayment assumptions, on an undiscounted basis. The Company uses

models or assumptions to develop expected loss forecasts, inclusive of qualitative adjustments that are affected by

the weighting of multiple macroeconomic forecast scenarios over a three-year reasonable and supportable forecast

period. After the reasonable and supportable forecast period, the Company reverts on a straight-line basis to its

historical loss averages, evaluated over the historical observation period, for the remaining estimated life of the

loans. In order to capture the unique risks of the loan portfolio within the PD, LGD, and prepayment models, the

Company segments the portfolio into pools, generally incorporating loan grades for commercial loans. The Company

uses qualitative adjustments to adjust historical loss information in situations where current loan characteristics

differ from those in the historical loss information and for differences in economic conditions and other factors.

We identified the assessment of the collective ALLL as a critical audit matter. A high degree of audit effort, including

specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the

collective ALLL due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation

of the collective ALLL methodology, including the methods and models used to estimate the PD, LGD, and

prepayment and their significant assumptions, which included the selection of the economic forecast scenarios and

the weighting of each economic scenario. The assessment also included the evaluation of certain qualitative

adjustments and their significant assumptions. The significant assumptions are sensitive to variation, such that minor

changes in the assumption can cause significant changes in the estimates. The assessment also included an

evaluation of the conceptual soundness and performance of the PD, LGD, and prepayment models. In addition,

auditor judgment was required to evaluate the sufficiency of audit evidence obtained.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the

design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of

the collective ALLL estimate, including controls over the:

• assessment of the collective ALLL methodology

• performance monitoring of the PD, LGD and prepayment models

• continued use and appropriateness of changes to the PD, LGD, and prepayment models, including the

significant assumptions used in the PD, LGD, and prepayment models

• selection of the economic scenarios and the weighting of each economic scenario

• development of the qualitative adjustments, including the significant assumptions used in the measurement

of the qualitative adjustments

• analysis of the collective ALLL results, trends, and ratios.

We evaluated the Company’s process to develop the collective ALLL estimate by testing certain sources of data,

factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors,

and assumptions. 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

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	OPINION ON CONSOLIDATED FINANCIAL STATEMENTS

• evaluating the methodology used to develop the qualitative adjustments and the effect of those

adjustments on the collective ALLL compared with relevant credit risk factors and consistency with credit

trends and identified limitations of the underlying quantitative models.

We also assessed the sufficiency of the audit evidence obtained related to the collective ALLL estimate by evaluating

the:

• cumulative results of the audit procedures

• qualitative aspects of the Company’s accounting practice

• potential bias in the accounting estimates.

We have served as the Company’s auditor since 2002.

Memphis, Tennessee

February 26, 2026

   

	91	2025 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)		2025		2024
Assets
Cash and due from banks		$961		$906
Interest-bearing deposits with banks		1,125		1,538
Federal funds sold and securities purchased under agreements to resell		634		631
Trading securities		1,904		1,387
Securities available for sale at fair value		8,165		7,896
Securities held to maturity (fair value of $1,073 and $1,083, respectively)		1,216		1,270
Loans held for sale (including $151 and $85 at fair value, respectively)		406		551
Loans and leases		64,156		62,565
Allowance for loan and lease losses		(738)		(815)
Net loans and leases		63,418		61,750
Premises and equipment		544		574
Goodwill		1,510		1,510
Other intangible assets		105		143
Other assets		3,888		3,996
Total assets		$83,876		$82,152
Liabilities
Noninterest-bearing deposits		$15,823		$16,021
Interest-bearing deposits		51,653		49,560
Total deposits		67,476		65,581
Trading liabilities		607		550
Short-term borrowings		3,254		3,400
Term borrowings		1,321		1,195
Other liabilities		2,076		2,315
Total liabilities		74,734		73,041
Equity
Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 8,750 and 16,750 shares, respectively		349		426
Common stock, $0.625 par value; authorized 700,000,000 shares; issued 484,825,395 and 524,280,412 shares, respectively		303		328
Capital surplus		3,974		4,808
Retained earnings		5,031		4,382
Accumulated other comprehensive loss, net		(810)		(1,128)
FHN shareholders' equity		8,847		8,816
Noncontrolling interest		295		295
Total equity		9,142		9,111
Total liabilities and equity		$83,876		$82,152

See accompanying notes to consolidated financial statements.

   

	92	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL 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)		2025		2024		2023
Interest income
Interest and fees on loans and leases		$3,698		$3,874		$3,575
Interest and fees on loans held for sale		34		36		51
Interest on investment securities		282		241		247
Interest on trading securities		91		85		78
Interest on other earning assets		81		116		149
Total interest income		4,186		4,352		4,100
Interest expense
Interest on deposits		1,339		1,620		1,266
Interest on trading liabilities		26		24		12
Interest on short-term borrowings		121		130		210
Interest on term borrowings		78		67		72
Total interest expense		1,564		1,841		1,560
Net interest income		2,622		2,511		2,540
Provision for credit losses		65		150		260
Net interest income after provision for credit losses		2,557		2,361		2,280
Noninterest income
Fixed income		206		187		133
Deposit transactions and cash management		169		176		179
Brokerage, management fees and commissions		105		101		90
Card and digital banking fees		74		77		77
Other service charges and fees		60		51		54
Trust services and investment management		51		48		47
Mortgage banking income		43		35		23
Gain on merger termination		—		—		225
Securities gains (losses), net		1		(89)		(4)
Other income		88		93		103
Total noninterest income		797		679		927
Noninterest expense
Personnel expense		1,159		1,137		1,100
Net occupancy expense		139		130		123
Computer software		138		121		111
Operations services		96		94		87
Legal and professional fees		86		64		49
Advertising and public relations		54		48		71
Deposit insurance expense		42		64		122
Contract employment and outsourcing		38		51		49
Amortization of intangible assets		38		44		47
Contributions		26		18		61
Other expense		258		264		259
Total noninterest expense		2,074		2,035		2,079
Income before income taxes		1,280		1,005		1,128
Income tax expense		282		211		212
Net income		$998		$794		$916

   

	93	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	CONSOLIDATED STATEMENTS OF INCOME

Net income attributable to noncontrolling interest		16		19		19
Net income attributable to controlling interest		$982		$775		$897
Preferred stock dividends		26		37		32
Net income available to common shareholders		$956		$738		$865
Basic earnings per share		$1.89		$1.37		$1.58
Diluted earnings per share		$1.87		$1.36		$1.54
Weighted average common shares		505,130		540,317		548,410
Diluted average common shares		511,107		544,285		561,732

See accompanying notes to consolidated financial statements.

   

	94	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Consolidated Statements of Comprehensive Income (Loss)

		Year Ended December 31,
(Dollars in millions)		2025		2024		2023
Net income		$998		$794		$916
Other comprehensive income, net of tax:
Net unrealized gains on securities available for sale		270		54		137
Net unrealized gains (losses) on cash flow hedges		52		(14)		47
Net unrealized (losses) gains on pension and other postretirement plans		(4)		20		(4)
Other comprehensive income		318		60		180
Comprehensive income		1,316		854		1,096
Comprehensive income attributable to noncontrolling interest		16		19		19
Comprehensive income attributable to controlling interest		$1,300		$835		$1,077
Income tax expense (benefit) of items included in other comprehensive income:
Net unrealized gains on securities available for sale		$88		$17		$44
Net unrealized gains (losses) on cash flow hedges		17		(5)		15
Net unrealized (losses) gains on pension and other postretirement plans		(1)		7		(1)

See accompanying notes to consolidated financial statements.

   

	95	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Consolidated Statements of Changes in Equity

		Preferred Stock				Common Stock
(Dollars in millions, except per share data)		Shares		Amount		Shares		Amount		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss) (a)		Noncontrolling Interest		Total
Balance, December 31, 2022		31,686		$1,014		537,100,615		$336		$4,840		$3,430		$(1,368)		$295		$8,547
Adjustment to reflect adoption of ASU 2022-02		—		—		—		—		—		4		—		—		4
Net income		—		—		—		—		—		897		—		19		916
Other comprehensive income		—		—		—		—		—		—		180		—		180
Cash dividends declared:
Preferred stock		—		—		—		—		—		(32)		—		—		(32)
Common stock ($0.60 per share)		—		—		—		—		—		(335)		—		—		(335)
Preferred stock conversion		(4,936)		(494)		—		—		—		—		—		—		(494)
Common stock repurchased		—		—		(806,360)		(1)		(9)		—		—		—		(10)
Common stock issued for:
Stock options exercised and restricted stock awards		—		—		2,801,663		—		5		—		—		—		5
Series G preferred stock conversion		—		—		19,742,776		12		481		—		—		—		493
Stock-based compensation expense		—		—		—		2		34		—		—		—		36
Dividends declared - noncontrolling interest of subsidiary preferred stock		—		—		—		—		—		—		—		(19)		(19)
Balance, December 31, 2023		26,750		520		558,838,694		349		5,351		3,964		(1,188)		295		9,291
Adjustment to reflect adoption of ASU 2023-02		—		—		—		—		—		8		—		—		8
Net income		—		—		—		—		—		775		—		19		794
Other comprehensive income		—		—		—		—		—		—		60		—		60
Cash dividends declared:
Preferred stock		—		—		—		—		—		(29)		—		—		(29)
Common stock ($0.60 per share)		—		—		—		—		—		(329)		—		—		(329)
Series D preferred stock redemption		(10,000)		(94)		—		—		—		(6)		—		—		(100)
Excise tax on preferred stock redemption		—		—		—		—		—		(1)		—		—		(1)
Common stock repurchased (b)		—		—		(39,202,433)		(25)		(601)		—		—		—		(626)
Excise tax on common stock repurchased		—		—		—		—		(6)		—		—		—		(6)
Common stock issued for:
Stock options exercised and restricted stock awards		—		—		4,644,151		1		8		—		—		—		9
Stock-based compensation expense		—		—		—		3		56		—		—		—		59
Dividends declared - noncontrolling interest of subsidiary preferred stock		—		—		—		—		—		—		—		(19)		(19)
Balance, December 31, 2024		16,750		426		524,280,412		328		4,808		4,382		(1,128)		295		9,111
Net income		—		—		—		—		—		982		—		16		998
Other comprehensive income		—		—		—		—		—		—		318		—		318
Cash dividends declared:
Preferred stock		—		—		—		—		—		(23)		—		—		(23)
Common stock ($0.60 per share)		—		—		—		—		—		(307)		—		—		(307)
Series B preferred stock redemption		(8,000)		(77)		—		—		—		(3)		—		—		(80)
Common stock repurchased (b)		—		—		(43,442,126)		(27)		(891)		—		—		—		(918)
Excise tax on common stock repurchased		—		—		—		—		(8)		—		—		—		(8)
Common stock issued for:
Stock options exercised and restricted stock awards		—		—		3,987,109		—		6		—		—		—		6
Stock-based compensation expense		—		—		—		2		59		—		—		—		61
Dividends declared - noncontrolling interest of subsidiary preferred stock		—		—		—		—		—		—		—		(16)		(16)
Balance, December 31, 2025		8,750		$349		484,825,395		$303		$3,974		$5,031		$(810)		$295		$9,142

(a) Due to the nature of the preferred stock issued by FHN and its subsidiaries, all components of other comprehensive income (loss) have been attributed

solely to FHN as the controlling interest holder.

(b) 2025 and 2024 include $894 million and $604 million, respectively, repurchased under FHN's general purchase programs.

See accompanying notes to consolidated financial statements.

   

	96	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	CONSOLIDATED STATEMENTS OF CASH FLOWS

Consolidated Statements of Cash Flows

		Year Ended December 31,
(Dollars in millions)		2025		2024		2023
Operating Activities
Net income		$998		$794		$916
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		65		150		260
Deferred income tax expense (benefit)		49		(17)		44
Depreciation and amortization of premises and equipment		56		55		55
Amortization of intangible assets		38		44		47
Net other amortization (accretion)		(30)		2		—
Net decrease in trading securities (a)		530		1,011		1,163
Net (increase) decrease in derivatives		5		(2)		(314)
Stock-based compensation expense		61		59		36
Securities (gains) losses, net		(1)		89		4
Loans held for sale:
Purchases and originations		(3,077)		(2,758)		(2,295)
Gross proceeds from settlements and sales		2,187		1,792		1,183
Gain due to fair value adjustments and other		(19)		(75)		(12)
Other operating activities, net		(234)		124		212
Total adjustments		(370)		474		383
Net cash provided by operating activities		628		1,268		1,299
Investing Activities
Proceeds from sales of securities available for sale		—		1,155		—
Proceeds from payments on securities available for sale		957		831		856
Purchases of securities available for sale		(874)		(1,538)		(261)
Proceeds from payments on securities held to maturity		57		57		53
Proceeds from sales of premises and equipment		3		8		1
Purchases of premises and equipment		(33)		(44)		(37)
Proceeds from BOLI		24		13		14
Net increase in loans and leases		(1,647)		(1,337)		(3,303)
Net decrease (increase) in interest-bearing deposits with banks		413		(209)		56
Other investing activities, net		6		6		16
Net cash used in investing activities		(1,094)		(1,058)		(2,605)
Financing Activities
Common stock:
Stock options exercised		6		9		5
Cash dividends paid		(314)		(332)		(335)
Repurchase of shares		(918)		(626)		(10)
Preferred stock:
Preferred stock redemption		(80)		(100)		—
Cash dividends paid - preferred stock - noncontrolling interest		(16)		(19)		(17)
Cash dividends paid - preferred stock		(26)		(29)		(32)
Net increase (decrease) in deposits		1,894		(201)		2,289
Net (decrease) increase in short-term borrowings		(146)		851		43
Proceeds from issuance of term borrowings		513		16		—
Repayment of term borrowings		(366)		(6)		(450)
(Decreases) increases in secured borrowings		(23)		33		1
Net cash provided by (used in) financing activities		524		(404)		1,494

   

	97	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	CONSOLIDATED STATEMENTS OF CASH FLOWS

Net increase (decrease) in cash and cash equivalents		58		(194)		188
Cash and cash equivalents at beginning of period		1,537		1,731		1,543
Cash and cash equivalents at end of period		$1,595		$1,537		$1,731
Supplemental Disclosures
Total interest paid		$1,584		$1,869		$1,428
Total taxes paid		62		106		123
Total taxes refunded		2		7		19
Transfer from loans to OREO		5		3		4
Transfer from loans HFS to trading securities		1,053		992		1,212
Transfer from loans HFS to loans		1		—		—
Preferred stock conversion to common stock		—		—		493

(a) Includes transfers from loans HFS to trading securities.

See accompanying notes to consolidated financial statements.

   

	98	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 1—SIGNIFICANT ACCOUNTING POLICIES

Notes to the Consolidated Financial Statements

Note 1—Significant Accounting Policies

Basis of Accounting

The consolidated financial statements of FHN, including its

subsidiaries, have been prepared in conformity with

accounting principles generally accepted in the United

States of America and follow general practices within the

industries in which it operates. This preparation requires

management to make estimates and assumptions that

affect the amounts reported in the financial statements

and accompanying notes. These estimates and

assumptions are based on information available as of the

date of the financial statements and could differ from

actual results.

Principles of Consolidation

The consolidated financial statements include the

accounts of FHN and other entities in which it has a

controlling financial interest. Variable interest entities for

which FHN or a subsidiary has been determined to be the

primary beneficiary are also consolidated. Affiliates for

which FHN is not considered the primary beneficiary and

in which FHN does not have a controlling financial interest

are accounted for under the equity method. These

investments are included in other assets, and FHN’s

proportionate share of income or loss is included in

noninterest income. All significant intercompany

transactions and balances have been eliminated.

Revenues

Revenue is recognized when the performance obligations

under the terms of a contract with a client are satisfied in

an amount that reflects the consideration to which FHN

expects to be entitled. FHN derives a significant portion of

its revenues from fee-based services. Noninterest income

from transaction-based fees is generally recognized

immediately upon completion of the transaction.

Noninterest income from service-based fees is generally

recognized over the period in which FHN provides the

service. Any services performed over time generally

require that FHN render services each reporting period

and, therefore, FHN measures progress in completing

these services based upon the passage of time and

recognizes revenue for the elapsed portion of the service

period.

Following is a discussion of FHN's key revenues within the

scope of ASC 606, "Revenue from Contracts with

Customers," except as noted.

Fixed Income

Fixed income includes fixed income securities sales,

trading, and strategies, as well as loan sales and derivative

sales, which are not within the scope of revenue from

contracts with customers. Fixed income also includes

investment banking fees earned for services related to

underwriting debt securities and fees for performing

portfolio advisory services. FHN's performance obligation

for underwriting services is satisfied on the trade date,

while the performance obligation for advisory services is

satisfied over time.

Deposit Transactions and Cash Management

Deposit transactions and cash management activities

include fees for services related to consumer and

commercial deposit products (such as service charges on

checking accounts), cash management products and

services such as electronic transaction processing

(Automated Clearing House and Electronic Data

Interchange), account reconciliation services, cash vault

services, lockbox processing, and information reporting to

large corporate clients. FHN's obligation for transaction-

based services is satisfied at the time of the transaction

when the service is delivered, while FHN's obligation for

service-based fees is satisfied over the course of each

month.

Brokerage, Management Fees and Commissions

Brokerage, management fees and commissions include

fees for portfolio management, trade commissions, and

annuity and mutual fund sales. Asset-based management

fees are charged based on the market value of the client’s

assets. The services associated with these revenues, which

include investment advice and active management of

client assets, are generally performed and recognized over

a month or quarter. Transactional revenues are based on

the size and number of transactions executed at the

client’s direction and are generally recognized on the

trade date.

Card and Digital Banking Fees

Card and digital banking fees include credit interchange

and network revenues and various card-related fees.

Interchange income is recognized concurrently with the

delivery of services on a daily basis. Card-related fees such

as late fees, currency conversion, and cash advance fees

are loan-related and excluded from the scope of ASC 606.

Trust Services and Investment Management

Trust services and investment management fees include

investment management, personal trust, employee

benefits, and custodial trust services. Obligations for trust

services are generally satisfied over time but may be

satisfied at points in time for certain activities that are

transactional in nature.

Mortgage Banking Income

Mortgage banking income is associated with 1) the sale of

loans, 2) the settlement of derivatives, 3) changes in the

fair value of loans, derivatives, and servicing rights, and 4)

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
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the servicing of loans. These revenues are not within the

scope of revenue from contracts with customers.

Contract Balances

As of December 31, 2025 and 2024, accounts receivable

related to products and services on noninterest income

were $13 million and $14 million, respectively. For the

year ended December 31, 2025, FHN had no material

impairment losses on noninterest accounts receivable,

and there were no material contract assets, contract

liabilities, or deferred contract costs recorded on the

Consolidated Balance Sheets as of December 31, 2025.

Credit risk is assessed on these accounts receivable each

reporting period, and the amount of estimated

uncollectible receivables is not material.

Transaction Price Allocated to Remaining Performance

Obligations

For the year ended December 31, 2025, revenue

recognized from performance obligations related to prior

periods was not material. Revenue expected to be

recognized in any future year related to remaining

performance obligations, excluding revenue pertaining to

contracts that have an original expected duration of one

year or less and contracts where revenue is recognized as

invoiced, is not material.

Refer to Note 19 - Business Segment Information for a

reconciliation of disaggregated revenue by major product

line and reportable segment.

Statements of Cash Flows

For purposes of these statements, cash and due from

banks, federal funds sold, and securities purchased under

agreements to resell are considered cash and cash

equivalents. Federal funds are usually sold for one-day

periods, and securities purchased under agreements to

resell are short-term, highly liquid investments.

Interest-Bearing Deposits With Banks

Interest-bearing deposits with banks primarily consist of

funds on deposit with the Federal Reserve and collateral

posted with derivative counterparties. Interest is earned

at overnight rates.

Debt Investment Securities

Debt securities that may be sold prior to maturity are

classified as AFS and are carried at fair value. The

unrealized gains and losses on debt securities AFS,

including securities for which no credit impairment exists,

are excluded from earnings and are reported, net of tax,

as a component of other comprehensive income within

shareholders’ equity and the Consolidated Statements of

Comprehensive Income (Loss). Debt securities which

management has the intent and ability to hold to maturity

are reported at amortized cost. See Note 23 - Fair Value of

Assets and Liabilities for additional information. Realized

gains and losses (i.e., from sales) for debt investment

securities are determined by the specific identification

method and reported in noninterest income.

The evaluation of credit risk for HTM debt securities

mirrors the process described below for loans held for

investment. AFS debt securities are reviewed for potential

credit impairment at the individual security level. The

evaluation of credit risk includes consideration of third-

party and government guarantees (both explicit and

implicit), senior or subordinated status, credit ratings of

the issuer, the effects of interest rate changes since

purchase, and observable market information such as

issuer-specific credit spreads. Credit losses for AFS debt

securities are recognized through establishment of an

allowance for credit losses that cannot exceed the amount

by which amortized cost exceeds fair value. Charge-offs

are recorded as reductions of the security’s amortized cost

and the credit allowance. Subsequent improvements in

estimated credit losses result in reduction of the credit

allowance, but not beyond zero. However, if FHN has the

intent to sell or if it is more likely than not that it will be

compelled to sell a security with an unrecognized loss, the

difference between the security's carrying value and fair

value is recognized through earnings and a new amortized

cost basis is established for the security (i.e., no allowance

for credit losses is recognized).

FHN has elected to exclude accrued interest receivable

from the fair value and amortized cost basis on debt

securities when assessing whether these securities have

experienced credit impairment. Additionally, FHN has

elected to not measure an allowance for credit losses on

AIR for debt securities based on its policy to write off

uncollectible interest in a timely manner, which generally

occurs when delinquency reaches no more than 90 days

for all security types. Any such write-offs are recognized as

a reduction of interest income. AIR for debt securities is

included within other assets in the Consolidated Balance

Sheets.

Equity Investments

Equity investments include FRB stock, FHLB stock, and

other equity investments, and are classified within other

assets on the Consolidated Balance Sheets. Ownership of

FRB and FHLB stock is a requirement for all banks seeking

membership into and access to the services provided. FRB

and FHLB stock are recorded at cost and are subject to

impairment reviews. Other equity investments primarily

consist of mutual funds, which are marked to fair value

through earnings, and equity investments without a

readily determinable fair value, which are recorded at cost

minus impairment, with adjustments through earnings for

observable price changes in orderly transactions for the

identical or a similar investment of the same issuer.

Dividends received on equity investments are included

within other noninterest income on the Consolidated

Statements of Income.

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
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Federal Funds Sold and Purchased

Federal funds sold and purchased represent unsecured

overnight funding arrangements between participants in

the Federal Reserve system primarily to assist banks in

meeting their regulatory cash reserve requirements.

Federal funds sold are evaluated for credit risk each

reporting period. Due to the short duration of each

transaction and the history of no credit losses, no credit

loss has been recognized.

Securities Purchased Under Agreements to Resell and

Securities Sold Under Agreements to Repurchase

FHN purchases short-term securities under agreements to

resell, which are accounted for as collateralized financings

except where FHN does not have an agreement to sell the

same or substantially the same securities before maturity

at a fixed or determinable price. All of FHN’s securities

purchased under agreements to resell are recognized as

collateralized financings. Securities delivered under these

transactions are delivered to either the dealer custody

account at the FRB or to the applicable counterparty.

Securities sold under agreements to repurchase are

offered to cash management clients as an automated,

collateralized investment account. Securities sold under

agreements to repurchase are also used by the consumer

or commercial bank to obtain favorable borrowing rates

on its purchased funds. All of FHN's securities sold under

agreements to repurchase are secured borrowings.

Collateral is valued daily and FHN may require

counterparties to deposit additional securities or cash as

collateral, or FHN may return cash or securities previously

pledged by counterparties, or FHN may be required to

post additional securities or cash as collateral, based on

the contractual requirements for these transactions.

FHN’s fixed income business utilizes securities borrowing

arrangements as part of its trading operations. Securities

borrowing transactions generally require FHN to deposit

cash with the securities lender. The amount of cash

advanced is recorded within securities purchased under

agreements to resell in the Consolidated Balance Sheets.

These transactions are not considered purchases and the

securities borrowed are not recognized by FHN. FHN does

not conduct securities lending transactions.

Securities purchased under agreements to resell and

securities borrowing arrangements are evaluated for

credit risk each reporting period. As presented in Note 22 -

Master Netting and Similar Agreements - Repurchase,

Reverse Repurchase, and Securities Borrowing

Transactions, these agreements are collateralized by the

related securities and collateral maintenance provisions

with counterparties, including replenishment and

adjustment on a transaction-specific basis. This collateral

includes both the securities collateral for each transaction

as well as offsetting securities sold under agreements to

repurchase with the same counterparty. Given the history

of no credit losses and collateralized nature of these

transactions, no credit loss has been recognized.

Loans Held for Sale

Loans originated or purchased for which management

lacks the intent to hold are included in loans held for sale

in the Consolidated Balance Sheets. FHN generally

accounts for loans held for sale at the lower of amortized

cost or market value, with an exception for certain

mortgage loans held for sale and repurchased loans that

are not government insured which are accounted for

under the fair value option of reporting.

• Fair Value Option Election. These loans consist of

originated fixed-rate single-family residential

mortgage loans that are committed to be sold in the

secondary market. Gains and losses on these

mortgage loans are included in mortgage banking

income.

• Other loans held for sale. For these loans, gains on

sale are recognized through noninterest income. Net

unrealized losses, if any, are recognized through a

valuation allowance that is also recorded as a charge

to noninterest income.

Loans and Leases

Generally, loans are stated at principal amounts

outstanding, net of unearned income. Interest on loans is

recognized on an accrual basis at the applicable interest

rate on the principal amount outstanding. Loan origination

fees and direct costs, as well as premiums and discounts,

are amortized as level yield adjustments over the

respective loan terms. Unamortized net fees or costs,

premiums, and discounts are recognized in interest

income upon early repayment of the loans. Loan

commitment fees are generally deferred and amortized on

a straight-line basis over the commitment period.

Equipment financing leases to commercial clients are

primarily classified as direct financing and sales-type

leases. Equipment financing leases are reported at the net

lease investment, which represents the sum of minimum

lease payments over the lease term and the estimated

residual value, less unearned interest income. Interest

income is accrued as earned over the term of the lease

based on the net investment in leases. Fees incurred to

originate the lease are deferred and recognized as an

adjustment of the yield on the lease.

FHN has elected to exclude accrued interest receivable

from the amortized cost basis on its held-for-investment

loan portfolio. FHN has also elected to not measure an

allowance for credit losses on AIR for loans held for

investment based on its policy to write off uncollectible

interest in a timely manner, which occurs when a loan is

placed on nonaccrual status. Such write-offs are

recognized as a reduction of interest income. AIR for held-

for-investment loans is included within other assets in the

Consolidated Balance Sheets.

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 1—SIGNIFICANT ACCOUNTING POLICIES

Nonaccrual and Past Due Loans

Generally, loans are placed on nonaccrual status if it

becomes evident that full collection of principal and

interest is at risk, impairment has been recognized as a

partial charge-off of principal balance due to insufficient

collateral value and past due status, or on a case-by-case

basis if FHN continues to receive payments, but there are

other borrower-specific issues. Consumer loans are

generally placed into nonaccrual status no later than 90

days past due. Generally, commercial and consumer loans

within each portfolio segment and class that have been

placed on nonaccrual status can be returned to accrual

status if all principal and interest is current and FHN

expects full repayment of the remaining contractual

principal and interest. This typically requires that a

borrower make payments in accordance with the

contractual terms for a sustained period of time (generally

for a minimum of six months) before being returned to

accrual status. Residential real estate loans discharged

through Chapter 7 bankruptcy and not reaffirmed by the

borrower (“discharged bankruptcies”) are placed on

nonaccrual. They are not returned to accrual status even if

current and performing in the future. Current second-lien

residential real estate loans that are junior to first liens are

placed on nonaccrual status if in bankruptcy. The second

lien may be returned to accrual upon payoff or cure of the

first lien.

When commercial and consumer loans within each

portfolio segment and class are placed on nonaccrual

status, accrued but uncollected interest is reversed and

charged against interest income. Management may elect

to continue the accrual of interest when the estimated net

realizable value of collateral is sufficient to recover the

principal balance and accrued interest. Interest payments

received on nonaccrual loans are normally applied to

outstanding principal first. Once all principal has been

received, additional interest payments are recognized on a

cash basis as interest income.

Charge-offs

For all commercial and consumer loan portfolio segments,

all losses of principal are charged to the ALLL in the period

in which the loan is deemed to be uncollectible.

For consumer loans, the timing of a full or partial charge-

off generally depends on the loan type and delinquency

status. Generally, for the consumer real estate segment, a

loan will be either partially or fully charged off when it

becomes 180 days past due. At this time, if the collateral

value does not support foreclosure, balances are fully

charged off and other avenues of recovery are pursued. If

the collateral value supports foreclosure, the loan is

charged down to net realizable value (collateral value less

estimated costs to sell) and is placed on nonaccrual status.

For residential real estate loans discharged in Chapter 7

bankruptcy and not reaffirmed by the borrower, the fair

value of the collateral position is assessed at the time FHN

is made aware of the discharge and the loan is charged

down to the net realizable value (collateral value less

estimated costs to sell). Within the credit card and other

portfolio segment, credit cards are fully charged off as

unsecured loans upon reaching 120 days past due,

whereas other non-real estate consumer loans are

charged off, in whole or in part, upon reaching 120 days

past due to the extent unsecured by collateral.

For acquired PCD loans where all or a portion of the loan

balance had been charged off prior to acquisition, and for

which active collection efforts are still underway, the ALLL

recorded at acquisition is immediately charged off if

required by FHN’s existing charge-off policy. Additionally,

FHN is required to consider its existing policies in

determining whether to charge off any financial assets,

regardless of whether a charge-off was recorded by the

predecessor company. The initial ALLL recognized on PCD

assets includes the gross-up of the loan balance reduced

by immediate charge-offs for loans previously charged off

by the predecessor company or which meet FHN’s charge-

off policy on the date of acquisition. Charge-offs against

the allowance related to such acquired PCD loans do not

result in an income statement impact.

Purchased Credit-Deteriorated Loans

At the time of acquisition, FHN evaluates all acquired

loans to determine if they have experienced a more-than-

insignificant deterioration in credit quality since

origination. PCD loans can be identified on either an 1)

individual or a 2) pooled basis when the loans share

similar risk characteristics. FHN evaluates various absolute

factors to assist in the identification of PCD loans,

including criteria such as existing PCD status, risk rating of

special mention or lower, nonaccrual or impaired status,

identification of prior loan modifications, and delinquency

status. FHN also utilizes relative factors to identify PCD

loans, such as commercial loan grade migration,

expansion of borrower credit spreads, declines in external

risk ratings and changes in consumer loan characteristics

(e.g., FICO decline or LTV increase). Factors reflective of

broad economic considerations are also considered in

identifying PCD loans. These include industry, collateral

type, and the geographic location of the borrower’s

operations. Internal factors for the origination of new

loans that are similar to the acquired loans are also

evaluated to assess loans for PCD status, including

increases in required yields, the necessity of borrowers

providing additional collateral and/or guarantees, and

changes in acceptable loan duration. Other indicators may

also be used to evaluate loans for PCD status depending

on borrower-specific communications and actions, such as

public statements, initiation of loan modification

discussions, and obtaining emergency funding from

alternate sources.

Upon acquisition, the expected credit losses are allocated

to the purchase price of individual PCD loans to determine

each individual asset's amortized cost basis, typically

   

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resulting in a reduction of the discount that is accreted

prospectively to interest income. At the acquisition date

and prospectively, only the unpaid principal balance is

incorporated within the estimation of expected credit

losses for PCD loans. Otherwise, the process for

estimation of expected credit losses is consistent with that

discussed below. As discussed below, FHN applies

undiscounted cash flow methodologies for the estimation

of expected credit losses, which results in the calculated

amount of credit losses at acquisition that is added to the

amortized cost basis of the related PCD loans to exceed

the discounted value of estimated credit losses included in

the loan valuation.

For PCD loans where all or a portion of the loan balance

has been previously written off, or would be subject to

write-off under FHN’s charge-off policy, the initial ALLL

included as part of the grossed-up loan balance at

acquisition was immediately written off, resulting in a zero

period-end allowance balance and no impact on the ALLL

rollforward.

Allowance for Credit Losses

The nature of the process by which FHN determines the

appropriate ACL requires the exercise of considerable

judgment. The ACL is determined in accordance with ASC

326-20, "Financial Instruments—Credit Losses". See Note

4 - Allowance for Credit Losses for a discussion of FHN’s

ACL methodology and a description of the models utilized

in the estimation process for the commercial and

consumer loan portfolios.

Future adjustments to the ACL may be necessary if

economic or other conditions differ substantially from the

assumptions used in making the estimates or, if required

by regulators, based upon information at the time of their

examinations or upon future regulatory guidance. Such

adjustments to original estimates, as necessary, are made

in the period in which these factors and other relevant

considerations indicate that loss levels vary from previous

estimates.

Management's estimate of expected credit losses in the

loan and lease portfolio is recorded in the ALLL and the

reserve for unfunded lending commitments, together

referred to as the ACL. The ACL is maintained at a level

that management determines is appropriate to absorb

current expected credit losses in the loan and lease

portfolio and unfunded lending commitments.

Management uses analytical models to estimate expected

credit losses in the loan and lease portfolio and unfunded

lending commitments as of the balance sheet date. The

models are carefully reviewed to identify trends that may

not be captured in the modeled loss estimates.

Management uses qualitative adjustments for those items

not reflected in the modeled loss information such as

recent changes from the macroeconomic forecasts utilized

in model calculations, results of additional stressed

modeling scenarios, observed and/or expected changes

affecting borrowers in specific industries or geographic

areas, exposure to large lending relationships, and

expected recoveries of prior charge-offs. Qualitative

adjustments are also used to accommodate for the

imprecision of certain assumptions and uncertainties

inherent in the model calculations as well as to align

certain differences in models used by acquired loan

portfolios to the methodologies described herein. Loans

accounted for at elected fair value are excluded from CECL

measurements.

The ALLL is increased by the provision for loan and lease

losses and is decreased by loan charge-offs. Credit loss

estimation is based on the amortized cost of loans, which

includes the following:

1. Unpaid principal balance for originated assets or

acquisition price for purchased assets

2. Accrued interest (see elections discussed previously)

3. Accretion or amortization of premium, discount, and

net deferred fees or costs

4. Collection of cash

5. Charge-offs

Premiums, discounts, and net deferred origination costs/

fees affect the calculated amount of expected credit

losses, but they are not considered when determining the

amount of expected credit losses that are recorded.

Under CECL, a loan must be pooled when it shares similar

risk characteristics with other loans. Loans that do not

share similar risk characteristics are evaluated individually.

Expected credit loss is estimated for the remaining life of

loan(s), which is limited to the remaining contractual

term(s), adjusted for prepayment estimates, which are

included as separate inputs into modeled loss estimates.

Renewals and extensions are not anticipated unless they

are included in existing loan documentation and are not

unconditionally cancellable by the lender.

Management has developed multiple current expected

credit losses models which segment the loan and lease

portfolio by borrower type and loan or lease type to

estimate expected lifetime expected credit losses for loans

and leases that share similar risk characteristics. Estimates

of expected credit losses incorporate consideration of

available information that is relevant to assessing the

collectability of future cash flows. This includes internal

and external information relating to past events, current

conditions, and reasonable and supportable forecasts of

future conditions. FHN utilizes internal and external

historical loss information, as applicable, for all available

historical periods as the initial point for estimating

expected credit losses. Given the duration of historical

information available, FHN considers its internal loss

history to fully incorporate the effects of prior credit

cycles dating back to the Great Recession. The historical

loss information may be adjusted in situations where

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
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current loan characteristics (e.g., underwriting criteria)

differ from those in existence at the time the historical

losses occurred. Historical loss information is also adjusted

for differences in economic conditions, macroeconomic

forecasts and other factors management considers

relevant over a period extending beyond the

measurement date which is considered reasonable and

supportable.

FHN generally measures expected credit losses using

undiscounted cash flow methodologies. Credit

enhancements (e.g., guarantors) that are not freestanding

are considered in the estimation of uncollectible cash

flows. Estimation of expected credit losses for loan

agreements involving collateral maintenance provisions

includes consideration of the value of the collateral and

replenishment requirements, with the maximum loss

limited to the difference between the amortized cost of

the loan and the fair value of the collateral. Expected

credit losses for loans for which foreclosure is probable

are measured at the fair value of collateral, less estimated

costs to sell when disposition through sale is anticipated.

Additionally, for borrowers experiencing financial

difficulty, certain loans are valued at the fair value of

collateral when repayment is expected to be provided

substantially through the operation of the collateral. The

fair value of the collateral is reduced for estimated costs

to sell when repayment is expected through sale of the

collateral. For both commercial and consumer portfolio

segments, an adjustment to the ACL is generally not

recorded at the time of modification because FHN

includes these modified loans in its quantitative loss

estimation processes. In the event of principal forgiveness,

which primarily occurs for commercial loan workouts and

consumer loans experiencing bankruptcy, FHN records the

reduction in expected collectible principal balance as a

charge-off against the ALLL.

Expected recoveries of previously charged-off amounts

are also included as a qualitative adjustment in the

estimation of expected credit losses, which reduces the

amount of the allowance recognized. Estimates of

recoveries on previously charged-off assets included in the

allowance for loan losses do not exceed the aggregate of

amounts previously written off and expected to be written

off for an individual loan or pool.

Since CECL requires the estimation of credit losses for the

entire expected life of loans, loss estimates are highly

sensitive to changes in macroeconomic forecasts,

especially when those forecasts change dramatically in

short time periods. Additionally, under CECL, credit loss

estimates are more likely to increase rapidly in periods of

loan growth.

Expected credit losses for unfunded commitments are

estimated for periods where the commitment is not

unconditionally cancellable by FHN. The measurement of

expected credit losses for unfunded commitments mirrors

that of loans with the additional estimate of future draw

rates (timing and amount). The liability for credit losses

inherent in lending-related commitments, such as letters

of credit and unfunded loan commitments, is included in

other liabilities on the Consolidated Balance Sheets and

established through a charge to the provision for credit

losses.

Premises and Equipment

Premises and equipment are carried at cost less

accumulated depreciation and amortization and include

additions that materially extend the useful lives of existing

premises and equipment. All other maintenance and

repair expenditures are expensed as incurred. Premises

and equipment held for sale are generally valued at

appraised values which reference recent disposition

values for similar property types but also consider

marketability discounts for vacant properties. The

valuations of premises and equipment held for sale are

reduced by estimated costs to sell. Impairments, and any

subsequent recoveries, are recorded in noninterest

expense. Gains and losses on dispositions are reflected in

noninterest income and expense, respectively.

Depreciation and amortization are computed on the

straight-line method over the estimated useful lives of the

assets and are recorded as noninterest expense.

Leasehold improvements are amortized over the lesser of

the lease periods or the estimated useful lives using the

straight-line method. Useful lives utilized in determining

depreciation for furniture, fixtures, and equipment and for

buildings are three years to fifteen years and seven years

to forty-five years, respectively.

Other Real Estate Owned

Real estate acquired by foreclosure or other real estate-

owned consists of properties that have been acquired in

satisfaction of debt. These properties are carried at the

lower of the outstanding loan amount or estimated fair

value less estimated costs to sell the real estate. At the

time acquired, and in conjunction with the transfer from

loans to OREO, there is a charge-off against the ALLL if the

estimated fair value less costs to sell is less than the loan’s

cost basis. Subsequent declines in fair value and gains or

losses on dispositions, if any, are charged to other

expense on the Consolidated Statements of Income.

Required developmental costs associated with acquired

property under construction are capitalized and included

in determining the estimated net realizable value of the

property, which is reviewed periodically, and any write-

downs are charged against current earnings.

Goodwill and Other Intangible Assets

Goodwill represents the excess of cost over net assets of

acquired businesses less identifiable intangible assets. On

an annual basis, or more frequently if necessary, FHN

assesses goodwill for impairment. Other intangible assets

primarily represent client lists and relationships, acquired

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 1—SIGNIFICANT ACCOUNTING POLICIES

contracts, covenants not to compete, and premiums on

purchased deposits, which are amortized over their

estimated useful lives. Intangible assets related to

acquired deposit bases are primarily amortized over 10

years using an accelerated method. Management

evaluates whether events or circumstances have occurred

that indicate the remaining useful life or carrying value of

amortizing intangibles should be revised. Other

intangibles also include smaller amounts of non-

amortizing intangibles for state banking licenses.

Servicing Rights

FHN recognizes the rights to service mortgage and other

loans as separate assets, which are recorded in other

assets in the Consolidated Balance Sheets, when

purchased or when servicing is contractually separated

from the underlying loans by sale with servicing rights

retained. For loan sales with servicing retained, a servicing

right, generally an asset, is recorded at fair value at the

time of sale for the right to service the loans sold. All

servicing rights are identified by class and amortized over

the remaining life of the loan with periodic reviews for

impairment.

Transfers of Financial Assets

Transfers of financial assets, or portions thereof which

meet the definition of a participating interest, are

accounted for as sales when control over the assets has

been surrendered. Control over transferred assets is

deemed to be surrendered when 1) the assets have been

legally isolated from FHN, 2) the transferee has the right

to pledge or exchange the assets with no conditions that

constrain the transferee and provide more than a trivial

benefit to FHN, and 3) FHN does not maintain effective

control over the transferred assets. If the transfer does

not satisfy all three criteria, the transaction is recorded as

a secured borrowing. If the transfer is accounted for as a

sale, the transferred assets are derecognized from FHN’s

balance sheet and a gain or loss on sale is recognized. If

the transfer is accounted for as a secured borrowing, the

transferred assets remain on FHN’s balance sheet and the

proceeds from the transaction are recognized as a liability.

Derivative Financial Instruments

FHN accounts for derivative financial instruments in

accordance with ASC 815, which requires recognition of all

derivative instruments on the balance sheet as either an

asset or liability measured at fair value through

adjustments to either accumulated other comprehensive

income within shareholders’ equity or current earnings.

Fair value is defined as the price that would be received to

sell a derivative asset or paid to transfer a derivative

liability in an orderly transaction between market

participants on the transaction date. Fair value is

determined using available market information and

appropriate valuation methodologies. FHN has elected to

present its derivative assets and liabilities gross on the

Consolidated Balance Sheets. Amounts of collateral

posted or received have not been netted with the related

derivatives unless the collateral amounts are considered

legal settlements of the related derivative positions. See

Note 21 - Derivatives for discussion on netting of

derivatives.

FHN prepares written hedge documentation identifying

the risk management objective and designating the

derivative instrument as a fair value hedge or cash flow

hedge, as applicable, or as a free-standing derivative

instrument entered into as an economic hedge or to meet

clients’ needs. All transactions designated as ASC 815

hedges must be assessed at inception and on an ongoing

basis as to the effectiveness of the derivative instrument

in offsetting changes in fair value or cash flows of the

hedged item. For a fair value hedge, changes in the fair

value of the derivative instrument and changes in the fair

value of the hedged asset or liability attributable to the

hedged risk are recognized currently in earnings. For a

cash flow hedge, changes in the fair value of the derivative

instrument are recorded in accumulated other

comprehensive income and subsequently reclassified to

earnings as the hedged transaction impacts net income.

For fair value hedges, the entire change in the fair value of

the hedging instrument included in the assessment of

effectiveness is recorded to the same financial statement

line item (e.g., interest expense) used to present the

earnings effect of the hedged item. For cash flow hedges,

the entire fair value change of the hedging instrument

that is included in the assessment of hedge effectiveness

is initially recorded in other comprehensive income and

later recycled into earnings as the hedged transaction(s)

affect net income with the income statement effects

recorded in the same financial statement line item used to

present the earnings effect of the hedged item (e.g.,

interest income). For free-standing derivative instruments,

changes in fair values are recognized currently in earnings.

See Note 21 - Derivatives for additional information.

Cash flows from derivative contracts are reported as

operating activities on the Consolidated Statements of

Cash Flows.

Leases

At inception, all arrangements are evaluated to determine

if they contain a lease, which is defined as a contract, or

part of a contract, that conveys the right to control the

use of identified property, plant, or equipment for a

period of time in exchange for consideration. Control is

deemed to exist when a lessor has granted and a lessee

has received both the right to obtain substantially all of

the economic benefits from use of the identified asset and

the right to direct the use of the identified asset

throughout the period of use.

Lessee

As a lessee, FHN recognizes lease (right-of-use) assets and

lease liabilities for all leasing arrangements with lease

terms that are greater than one year. The lease asset and

   

	105	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 1—SIGNIFICANT ACCOUNTING POLICIES

lease liability are recognized at the present value of

estimated future lease payments, including estimated

renewal periods, with the discount rate reflecting a fully-

collateralized rate matching the estimated lease term.

Renewal options are included in the estimated lease term

if they are considered reasonably certain of exercise.

Periods covered by termination options are included in

the lease term if it is reasonably certain they will not be

exercised. Additionally, prepaid or accrued lease

payments, lease incentives, and initial direct costs related

to lease arrangements are recognized within the right-of-

use asset. Each lease is classified as a financing or

operating lease depending on the relationship of the

lessee’s rights to the economic value of the leased asset.

For finance leases, interest on the lease liability is

recognized separately from amortization of the right-of-

use asset in earnings, resulting in higher expense in the

earlier portion of the lease term. For operating leases, a

single lease cost is calculated so that the cost of the lease

is allocated over the lease term on a generally straight-line

basis. Substantially all of FHN’s lessee arrangements are

classified as operating leases. For leases with a term of 12

months or less, FHN does not recognize lease assets and

lease liabilities and expense is generally recognized on a

straight-line basis over the lease term.

Lease assumptions and classification are reassessed upon

the occurrence of events that result in changes to the

estimated lease term or consideration. Modifications to

lease contracts are evaluated to determine 1) if a right to

use an additional asset has been obtained, 2) if only the

lease term and/or consideration have been revised, or 3)

if a full or partial termination has occurred. If an additional

right-of-use asset has been obtained, the modification is

treated as a separate contract and its classification is

evaluated as a new lease arrangement. If only the lease

term or consideration are changed, the lease liability is

revalued with an offset to the lease asset and the lease

classification is reassessed. If a modification results in a

full or partial termination of the lease, the lease liability is

revalued through earnings along with a proportionate

reduction in the value of the related lease asset and

subsequent expense recognition is similar to a new lease

arrangement.

Lease assets are evaluated for impairment when triggering

events occur, such as a change in management intent

regarding the continued occupation of the leased space. If

a lease asset is impaired, it is written down to the present

value of estimated future cash flows and the prospective

expense recognition for that lease follows the accelerated

expense recognition methodology applicable to finance

leases, even if it remains classified as an operating lease.

Sublease arrangements are accounted for consistent with

the lessor accounting described below. Sublease

arrangements are evaluated to determine if changes to

estimates for the primary lease are warranted or if the

sublease terms reflect impairment of the related lease

asset.

Lease assets are recognized in other assets and lease

liabilities are recognized in other liabilities in the

Consolidated Balance Sheets. Since substantially all of its

leasing arrangements relate to real estate, FHN records

lease expense, and any related sublease income, within

net occupancy expense in the Consolidated Statements of

Income.

Lessor

As a lessor, FHN also evaluates its lease arrangements to

determine whether a finance lease or an operating lease

exists and utilizes the rate implicit in the lease

arrangement as the discount rate to calculate the present

value of future cash flows. Depending upon the terms of

the individual agreements, finance leases represent either

sales-type or direct financing leases, both of which require

derecognition of the asset being leased with offsetting

recognition of a lease receivable that is evaluated for

impairment similar to loans. Other than equipment leases

entered into as part of commercial lease financing

arrangements, all of FHN's lessor arrangements are

considered operating leases.

Lease income for operating leases is recognized over the

life of the lease, generally on a straight-line basis. Lease

incentives and initial direct costs are capitalized and

amortized over the estimated life of the lease. Lease

income is not significant for any reporting periods and is

classified as a reduction of net occupancy expense in the

Consolidated Statements of Income.

Tax Credit Investments

FHN has elected to apply the proportional amortization

method ("PAM") to all qualifying equity investments

generating low income housing tax credits, new markets

tax credits, and historic tax credits. Under the PAM, the

initial cost of a qualifying equity investment is amortized

in proportion to the tax credits and other tax benefits

received and the net investment performance is

recognized as a component of income tax expense.

FHN has elected to utilize the deferral method for

investments that generate investment tax credits. This

includes both renewable energy tax credit investments

and historic tax credit equity investments that do not

qualify for the proportional amortization method. Under

this approach, the investment tax credits are recorded as

an offset to the related investment on the balance sheet.

Credit amounts are recognized in earnings over the life of

the investment within the same income or expense

accounts as used for the investment.

Advertising and Public Relations

Advertising and public relations costs are generally

expensed as incurred.

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 1—SIGNIFICANT ACCOUNTING POLICIES

Income Taxes

FHN accounts for income taxes using the asset and liability

method pursuant to ASC 740, “Income Taxes,” which

requires the recognition of deferred tax assets and

liabilities for the expected future tax consequences of

events that have been included in the financial

statements. Under this method, FHN’s deferred tax assets

and liabilities are determined based on differences

between financial statement carrying amounts and the

corresponding tax basis of certain assets and liabilities

using enacted tax rates in effect for the year in which the

differences are expected to reverse. The effect of a

change in tax rates on DTAs and DTLs is recognized in

income in the period that includes the enactment date.

Additionally, DTAs are subject to a “more likely than not”

test to determine whether the full amount of the DTAs

should be recognized in the financial statements. FHN

evaluates the likelihood of realization of the DTA based on

both positive and negative evidence available at the time,

including (as appropriate) scheduled reversals of DTLs,

projected future taxable income, tax planning strategies,

and recent financial performance. If the “more likely than

not” test is not met, a valuation allowance must be

established against the DTA. In the event FHN determines

that DTAs are realizable in the future in excess of their net

recorded amount, FHN would make an adjustment to the

valuation allowance, which would reduce income tax

expense.

FHN records uncertain tax positions in accordance with

ASC 740 on the basis of a two-step process in which 1) it is

determined whether it is more likely than not that the tax

positions will be sustained on the basis of the technical

merits of the position and 2) for those tax positions that

meet the more-likely-than-not recognition threshold, the

largest amount of tax benefit that is more than 50 percent

likely to be realized upon ultimate settlement with the

related tax authority is recognized. FHN's ASC 740 policy is

to recognize interest and penalties related to

unrecognized tax benefits as a component of income tax

expense. Accrued interest and penalties are included

within the related tax asset or liability line in the

Consolidated Balance Sheets.

FHN and its eligible subsidiaries are included in a

consolidated federal income tax return. FHN files separate

returns for subsidiaries that are not eligible to be included

in a consolidated federal income tax return. Based on the

laws of the applicable state where it conducts business

operations, FHN either files consolidated, combined, or

separate returns.

Earnings per Share

Earnings per share is computed by dividing net income or

loss available to common shareholders by the weighted

average number of common shares outstanding for each

period. Diluted earnings per share in net income periods is

computed by dividing net income available to common

shareholders by the weighted average number of

common shares outstanding adjusted to include the

number of additional common shares that would have

been outstanding if the potential dilutive common shares

resulting from performance shares and units, restricted

shares and units, and options granted under FHN’s equity

compensation plans and deferred compensation

arrangements had been issued. FHN utilizes the treasury

stock method in this calculation. Diluted earnings per

share does not reflect an adjustment for potentially

dilutive shares in periods in which a net loss available to

common shareholders exists.

Equity Compensation

FHN accounts for its employee stock-based compensation

plans using the grant date fair value of an award to

determine the expense to be recognized over the life of

the award. Stock options are valued using an option-

pricing model, such as Black-Scholes. Restricted and

performance shares and share units are valued at the

stock price on the grant date. For awards with service

vesting criteria, expense is recognized using the straight-

line method over the requisite service period (generally

the vesting period). Forfeitures are recognized when they

occur. For awards vesting based on a performance

measure, anticipated performance is projected to

determine the number of awards expected to vest, and

the corresponding aggregate expense is adjusted to reflect

the elapsed portion of the performance period. If a

performance period extends beyond the required service

term, total expense is adjusted for changes in estimated

achievement through the end of the performance period.

Some performance awards include a total shareholder

return modifier (“TSR Modifier”) that operates after

determination of the performance criteria, affecting only

the quantity of awards issued if the minimum

performance threshold is attained. The effect of the TSR

Modifier is considered in the grant-date fair value of the

related performance awards. The fair value of equity

awards with cash payout requirements, as well as awards

for which fair value cannot be estimated at grant date, is

remeasured each reporting period through vesting date.

Performance awards with pre-grant date achievement

criteria are expensed over the period from the start of the

performance period through the end of the service vesting

term. Awards are amortized using the nonsubstantive

vesting methodology, which requires that expense

associated with awards having only service vesting criteria

that continue vesting after retirement be recognized over

a period ending no later than an associate’s retirement

eligibility date.

Cash settled awards with payouts partially or fully based

on changes in share price are accounted for as liability

awards and are remeasured based on changes in their fair

value until the end of the performance period.

Compensation cost for each reporting period is based on

the change in the fair value of the award within each

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 1—SIGNIFICANT ACCOUNTING POLICIES

reporting period adjusted for the portion of required

service that occurred during the reporting period.

Repurchase and Foreclosure Provision

The repurchase and foreclosure provision is the charge to

earnings necessary to maintain the liability at a level that

reflects management’s best estimate of losses associated

with the repurchase of loans previously transferred in

whole loans sales or securitizations or make-whole

requests as of the balance sheet date.

Legal Costs

Generally, legal costs are expensed as incurred. Costs

related to equity issuances are netted against capital

surplus. Costs related to debt issuances are included in

debt issuance costs that are recorded within term

borrowings. Costs related to equity issuances are recorded

as a reduction of the proceeds from the related issuance.

Contingency Accruals

Contingent liabilities arise in the ordinary course of

business, including those related to lawsuits, arbitration,

mediation, and other forms of litigation. FHN establishes

loss contingency liabilities for matters when loss is both

probable and reasonably estimable in accordance with

ASC 450-20-50, “Contingencies – Accruals for Loss

Contingencies.” If loss for a matter is probable and a range

of possible loss outcomes is the best estimate available,

accounting guidance generally requires a liability to be

established at the low end of the range. Expected

recoveries from insurance and indemnification

arrangements are recognized if they are considered

equally as probable and reasonably estimable as the

related loss contingency up to the recognized amount of

the estimated loss. Gain contingencies and expected

recoveries from insurance and indemnification

arrangements in excess of the associated recorded

estimated losses are generally recognized when received.

Recognized recoveries are recorded as offsets to the

related expense in the Consolidated Statements of

Income. The favorable resolution of a gain contingency

generally results in the recognition of other income in the

Consolidated Statements of Income. Contingencies

assumed in business combinations are evaluated through

the end of the one-year post-closing measurement

period. If the acquisition-date fair value of the contingency

can be determined during the measurement period,

recognition occurs as part of the acquisition-date fair

value of the acquired business. If the acquisition-date fair

value of the contingency cannot be determined, but loss is

considered probable as of the acquisition date and can be

reasonably estimated within the measurement period,

then the estimated amount is recorded within acquisition

accounting. If the requirements for inclusion of the

contingency as part of the acquisition are not met,

subsequent recognition of the contingency is included in

earnings.

Business Combinations

Assets and liabilities acquired in business combinations

are generally recognized at their fair values as of the

acquisition date, with the related transaction costs

expensed in the period incurred. Specified items such as

net investment in leases as lessor, acquired operating

lease assets and liabilities as lessee, employee benefit

plans, and income tax-related balances are recognized in

accordance with accounting guidance that results in

measurements that may differ from fair value. FHN may

record provisional amounts at the time of acquisition

based on available information. The provisional valuation

estimates may be adjusted for a period of up to one year

(“measurement period”) from the date of acquisition if

new information is obtained about facts and

circumstances that existed as of the acquisition date that,

if known, would have affected the measurement of the

amounts recognized as of that date. Business

combinations are included in the financial statements

from the respective dates of acquisition. Adjustments

recorded during the measurement period are recognized

in the current reporting period.

The excess of purchase price over the valuation of

specifically identified assets and liabilities is recorded as

goodwill. In certain circumstances the net values of assets

and liabilities acquired may exceed the purchase price,

which is recognized within noninterest income as a

purchase accounting gain.

Summary of Accounting Changes

ASU 2023-09

In December 2023, the FASB issued ASU 2023-09,

"Improvements to Income Tax Disclosures" to enhance

transparency and decision usefulness of income tax

disclosures. The provisions of this ASU require

disaggregated information about a reporting entity's

effective tax rate reconciliation in both percentages and

reporting currency amounts. Certain categories of

reconciling items are required by the ASU with additional

categories required if a specified quantitative threshold is

met. Reporting entities are also required to provide a

qualitative discussion of the primary state and local

jurisdictions for income taxes and the type of reconciling

categories. ASU 2023-09 also requires disaggregation of

income taxes paid by jurisdiction.

For public business entities, ASU 2023-09 was effective for

annual periods beginning after December 15, 2024. FHN

adopted ASU 2023-09 as of December 31, 2025 and its

requirements have been applied retrospectively to all

periods presented in Note 14 - Income Taxes.

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 1—SIGNIFICANT ACCOUNTING POLICIES

Accounting Changes Issued But Not Currently Effective

ASU 2024-03

In November 2024, the FASB issued ASU 2024-03,

"Disaggregation of Income Statement Expenses" that

requires tabular disclosure, on an annual and interim

basis, of additional disaggregated information about

prescribed expense categories if they are present in any

expense caption on the face of the income statement

within continuing operations. The prescribed categories

applicable to FHN are employee compensation,

depreciation, and intangible asset amortization. Other

required expense disclosures must be included in the

tabular disclosure when they are included in the same

income statement caption as a prescribed expense

category. ASU 2024-03 also requires disclosure of the total

amount of selling expenses and, annually, an entity’s

definition of selling expenses.

ASU 2024-03 is effective for fiscal years beginning after

December 15, 2026, and for interim periods beginning

after December 15, 2027. The guidance is required to be

applied prospectively. Early adoption and retrospective

application are permitted. FHN is currently assessing the

effects of adopting ASU 2024-03 on its financial statement

disclosures.

ASU 2025-06

In September 2025, the FASB issued ASU 2025-06,

“Targeted Improvements to the Accounting for Internal-

Use Software,” which simplifies the capitalization

guidance by removing all references to software

development project stages. The ASU requires entities to

begin capitalizing incurred software costs after

management authorizes and commits to funding the

software project, and it is probable that the project will be

completed and the software will be used for its intended

purpose.

ASU 2025-06 is effective for fiscal years beginning after

December 15, 2027, including interim periods within those

fiscal years, with early adoption permitted. The

amendments in this update permit an entity to apply the

new guidance using a prospective, retrospective or

modified transition approach. FHN is currently assessing

the effects of adopting ASU 2025-06 on its Consolidated

Financial Statements and related disclosures.

ASU 2025-08

In November 2025, the FASB issued ASU 2025-08,

“Purchased Loans”, which amends the guidance in ASC

326 on the accounting for certain purchased loans. Under

ASU 2025-08, entities must account for acquired loans

(excluding credit cards) that meet certain criteria at

acquisition (purchased seasoned loans) by recognizing

them at their purchase price plus an allowance for

expected credit losses (gross-up approach) which

eliminates the credit mark double-count that was

previously recognized for all non-PCD loans.  Purchased

seasoned loans are defined as either: (1) non-PCD loans

that are obtained in a business combination, or (2) non-

PCD loans that (a) are obtained in an asset acquisition or

upon consolidation of a variable interest entity that is not

a business and (b) are acquired more than 90 days after

their origination date by a transferee that was not

involved in their origination. ASU 2025-08 also introduces

an accounting policy election related to the subsequent

measurement of expected credit losses for entities that

use a method other than a discounted cash flow analysis

to estimate credit losses on purchased seasoned loans. If

this accounting policy is elected, entities can use the

amortized cost basis of the asset to subsequently measure

their credit loss allowance which facilitates pooling of

purchased seasoned loans with originated loans for the

determination of ACL post-acquisition.

ASU 2025-08 is effective for fiscal years beginning after

December 15, 2026, including interim periods within those

fiscal years, with early adoption permitted. The guidance

is required to be applied prospectively to loans that are

acquired on or after the initial application date. FHN early

adopted ASU 2025-08 beginning January 1, 2026. Since

ASU 2025-08 only affects prospective loan acquisitions

there was no effect of adoption on FHN’s consolidated

financial statements.

ASU 2025-09

In November 2025, the FASB issued ASU 2025-09, “Hedge

Accounting Improvements”, which amends the guidance

in ASC 815 to more closely align hedge accounting with

the economics of an entity’s risk management activities.

The amendment expands the hedged risks permitted to be

aggregated in a group of individual forecasted

transactions for cash flow hedges and increases the

variable price components eligible to be designated as the

hedged risk in the forecasted purchase or sale of

nonfinancial assets. It also eliminates the requirement to

apply the net written option test when certain compound

derivatives are used in interest rate hedges.

In addition, the amendment simplifies the application of

hedge accounting for entities hedging forecasted interest

payments on choose-your-rate debt instruments and

addresses application issues related to “dual hedges,”

where a foreign-currency-denominated debt instrument is

designated as a hedging instrument and a hedged item.

ASU 2025-09 is effective for fiscal years beginning after

December 15, 2026, including interim periods within those

fiscal years, with early adoption permitted. The guidance

is required to be applied prospectively for all hedging

relationships, and entities may elect to adopt the

amendments in ASU 2025-09 for hedging relationships

that exist as of the date of adoption. FHN early adopted

ASU 2025-09 beginning January 1, 2026. There were no

effects on FHN’s existing accounting hedges as a result of

adoption.

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 1—SIGNIFICANT ACCOUNTING POLICIES

ASU 2025-10

In December 2025, the FASB issued ASU 2025-10,

“Accounting for Government Grants Received by Business

Entities” to provide guidance on how business entities

should recognize, measure, and present government

grants received.

ASU 2025-10 is effective for annual reporting periods

beginning after December 15, 2028, including interim

periods within those fiscal years, with early adoption

permitted. The amendments in this update may be

applied using a modified prospective, modified

retrospective, or retrospective approach. FHN is currently

assessing the effects of adopting ASU 2025-10 on its

consolidated financial statements and related disclosures.

ASU 2025-11

In December 2025, the FASB issued ASU 2025-11,

“Narrow-Scope Improvements” to provide clarifications

intended to improve the consistency and usability of

interim disclosure requirements. The ASU includes a

comprehensive listing of required interim disclosures and

a new disclosure principle for reporting material events

occurring after the most recent annual period.

ASU 2025-11 is effective for interim periods within annual

reporting periods beginning after December 15, 2027, and

early adoption is permitted. The amendments in this

update permit an entity to apply the new guidance using a

prospective or retrospective approach. FHN is currently

assessing the effects of adopting ASU 2025-11 on its

financial statement disclosures.

SEC Final Rule

In March 2024, the SEC adopted final rules, “The

Enhancement and Standardization of Climate-Related

Disclosures for Investors” (the “Climate Disclosures

Rules”) to require registrants to disclose certain climate-

related information in registration statements and annual

reports. Information required for inclusion within the

footnotes to the financial statements for severe weather

events and other natural conditions includes 1) income

statement effects before insurance recoveries above 1%

of pre-tax income/loss, 2) balance sheet effects above 1%

of shareholders’ equity, and 3) certain carbon offsets and

renewable energy credits. Qualitative discussion is also

required for material impacts on financial estimates and

assumptions that are due to severe weather events and

other natural conditions or disclosed climate-related

targets or transition plans. 

In April 2024, the SEC issued a stay of the Climate

Disclosures Rules pending the completion of judicial

review of various legal challenges. On March 27, 2025, the

SEC voted to end the legal defense of the Climate

Disclosures Rules, and in a July 23, 2025 court filing, the

SEC stated it did not intend to review or reconsider its

Climate Disclosures Rules prior to the court ruling on the

pending petitions challenging those rules. On September

12, 2025, the U.S. Court of Appeals for the Eighth Circuit

ordered the litigation to be held in abeyance until the SEC

reconsiders its Climate Disclosures Rules through formal

notice-and-comment rulemaking or renews its defense of

the rules. As a result of the SEC's and the Court's actions,

the actual timing of any implementation of the Climate

Disclosures Rules, and the form of the rules if

implemented, remains uncertain. FHN is assessing the

potential effects of the Climate Disclosures Rules on its

financial statements.

   

	110	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 2—INVESTMENT SECURITIES

Note 2—Investment Securities

The following table summarizes FHN’s investment securities as of December 31, 2025 and 2024.

Table 8.2.1

INVESTMENT SECURITIES AT DECEMBER 31, 2025
		December 31, 2025
(Dollars in millions)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:
Government agency issued MBS		$3,964		$9		$(332)		$3,641
Government agency issued CMO		3,092		6		(229)		2,869
Other U.S. government agencies		1,424		2		(109)		1,317
States and municipalities		361		2		(25)		338
Total securities available for sale (a)		$8,841		$19		$(695)		$8,165
Securities held to maturity:
Government agency issued MBS		$758		$—		$(76)		$682
Government agency issued CMO		458		—		(67)		391
Total securities held to maturity (a)		$1,216		$—		$(143)		$1,073

(a) Includes $7.2 billion of securities available for sale and $1.1 billion of securities held to maturity pledged to secure public deposits, securities sold under

agreements to repurchase, and for other purposes.

INVESTMENT SECURITIES AT DECEMBER 31, 2024
		December 31, 2024
(Dollars in millions)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale:
Government agency issued MBS		$4,223		$1		$(522)		$3,702
Government agency issued CMO		3,079		—		(312)		2,767
Other U.S. government agencies		1,234		—		(161)		1,073
States and municipalities		394		—		(40)		354
Total securities available for sale (a)		$8,930		$1		$(1,035)		$7,896
Securities held to maturity:
Government agency issued MBS		$804		$—		$(109)		$695
Government agency issued CMO		466		—		(78)		388
Total securities held to maturity (a)		$1,270		$—		$(187)		$1,083

(a) Includes $6.9 billion of securities available for sale and $1.2 billion of securities held to maturity pledged to secure public deposits, securities sold under

agreements to repurchase, and for other purposes.

   

	111	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 2—INVESTMENT SECURITIES

The amortized cost and fair value by contractual maturity for the debt securities portfolio as of December 31, 2025 is provided

below.

Table 8.2.2

DEBT SECURITIES PORTFOLIO MATURITIES 

		Held to Maturity				Available for Sale
(Dollars in millions)		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within 1 year		$—		$—		$12		$11
After 1 year through 5 years		—		—		124		116
After 5 years through 10 years		—		—		527		508
After 10 years		—		—		1,122		1,020
Subtotal		—		—		1,785		1,655
Government agency issued MBS and CMO (a)		1,216		1,073		7,056		6,510
Total		$1,216		$1,073		$8,841		$8,165

(a) Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or

prepayment penalties.

There were no sales of AFS securities for the years ended

December 31, 2025 and 2023. During the fourth quarter of

2024, as part of an opportunistic restructuring of a portion

of the securities portfolio, FHN sold $1.2 billion of AFS

securities, which resulted in realized losses of $91 million

for the year ended December 31, 2024.

The following tables provide information on investments

within the available-for-sale portfolio that had unrealized

losses as of December 31, 2025 and 2024.

Table 8.2.3

AFS INVESTMENT SECURITIES WITH UNREALIZED LOSSES  

		As of December 31, 2025
		Less than 12 months				12 months or longer				Total
(Dollars in millions)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government agency issued MBS		$190		$(1)		$2,791		$(331)		$2,981		$(332)
Government agency issued CMO		353		—		1,706		(229)		2,059		(229)
Other U.S. government agencies		281		(1)		796		(108)		1,077		(109)
States and municipalities		1		—		236		(25)		237		(25)
Total		$825		$(2)		$5,529		$(693)		$6,354		$(695)

		As of December 31, 2024
		Less than 12 months				12 months or longer				Total
(Dollars in millions)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government agency issued MBS		$663		$(9)		$2,992		$(513)		$3,655		$(522)
Government agency issued CMO		675		(2)		1,744		(310)		2,419		(312)
Other U.S. government agencies		210		(6)		863		(155)		1,073		(161)
States and municipalities		66		(1)		256		(39)		322		(40)
Total		$1,614		$(18)		$5,855		$(1,017)		$7,469		$(1,035)

FHN has evaluated all AFS debt securities that were in

unrealized loss positions in accordance with its accounting

policy for recognition of credit losses. No AFS debt

securities were determined to have credit losses. Total AIR

not included in the fair value or amortized cost basis of

AFS debt securities were $28 million and $29 million as of

December 31, 2025 and 2024. Consistent with FHN's

review of the related securities, there were no credit-

related write downs of AIR for AFS debt securities during

the reporting periods. Additionally, for AFS debt securities

   

	112	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 2—INVESTMENT SECURITIES

with unrealized losses, FHN does not intend to sell them

and it is more likely than not that FHN will not be required

to sell them prior to recovery. Therefore, no write downs

of these investments to fair value occurred during the

reporting periods. There were no transfers to or from AFS

or HTM securities during the years ended December 31,

2025, 2024, or 2023.

For HTM securities, an allowance for credit losses is

required to absorb estimated lifetime credit losses. Total

AIR not included in the fair value or amortized cost basis

of HTM debt securities was $3 million as of both

December 31, 2025 and 2024. FHN has assessed the risk of

credit loss and has determined that no allowance for

credit losses for HTM securities was necessary as of

December 31, 2025 and 2024. The evaluation of credit risk

includes consideration of third-party and government

guarantees (both explicit and implicit), senior or

subordinated status, credit ratings of the issuer, the

effects of interest rate changes since purchase and

observable market information such as issuer-specific

credit spreads.

The carrying amount of equity investments without a

readily determinable fair value was $119 million and $96

million as of December 31, 2025 and 2024, respectively.

The year-to-date 2025 and 2024 gross amounts of upward

and downward valuation adjustments were not

significant.

For equity investments with readily determinable fair

values, net unrealized gains of $10 million, $11 million,

and $11 million were recognized during 2025, 2024 and

2023, respectively.

   

	113	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 3—LOANS & LEASES

Note 3—Loans and Leases

The loan and lease portfolio is disaggregated into portfolio

segments and then further disaggregated into classes for

certain disclosures. GAAP defines a portfolio segment as

the level at which an entity develops and documents a

systematic method for determining its allowance for

credit losses. A class is generally a disaggregation of a

portfolio segment and is generally determined based on

risk characteristics of the loan and FHN’s method for

monitoring and assessing credit risk and performance.

FHN's loan and lease portfolio segments are commercial

and consumer. The classes of loans and leases are: (1)

commercial, financial, and industrial, which includes

commercial and industrial loans and leases and loans to

mortgage companies, (2) commercial real estate, (3)

consumer real estate, which includes both real estate

installment and home equity lines of credit, and (4) credit

card and other.

The following table provides the amortized cost basis of

loans and leases by portfolio segment and class as of

December 31, 2025 and 2024, excluding accrued interest

of $257 million and $271 million, respectively, which is

included in other assets in the Consolidated Balance

Sheets.

Table 8.3.1

LOANS AND LEASES BY PORTFOLIO SEGMENT

		December 31,
(Dollars in millions)		2025		2024
Commercial:
Commercial and industrial (a)		$31,202		$29,957
Loans to mortgage companies		4,703		3,471
Total commercial, financial, and industrial		35,905		33,428
Commercial real estate		13,563		14,421
Consumer:
HELOC		2,164		2,092
Real estate installment loans		11,944		11,955
Total consumer real estate		14,108		14,047
Credit card and other (b)		580		669
Loans and leases		$64,156		$62,565
Allowance for loan and lease losses		(738)		(815)
Net loans and leases		$63,418		$61,750

(a) Includes equipment financing leases of $1.5 billion and $1.4 billion as of December 31, 2025 and 2024, respectively.

(b) Includes $143 million and $174 million of commercial credit card balances as of December 31, 2025 and 2024, respectively.

Restrictions

Loans and leases with carrying values of $45.1 billion and

$45.8 billion were pledged as collateral for borrowings as

of December 31, 2025 and 2024 , respectively.

Concentrations of Credit Risk

Most of FHN’s business activity is with clients located in

the southern United States. FHN’s lending activity is

concentrated in its market areas within those states. As of

December 31, 2025, FHN had loans to mortgage

companies of $4.7 billion and loans to finance and

insurance companies of $4.1 billion. As a result, 25% of

the C&I portfolio is sensitive to impacts on the financial

services industry.

Credit Quality Indicators

FHN employs a dual grade commercial risk grading

methodology to assign an estimate for the probability of

default and the loss given default for each commercial

loan using factors specific to various industry, portfolio, or

product segments that result in a rank ordering of risk and

the assignment of grades PD 1 to PD 16. This credit

grading system is intended to identify and measure the

credit quality of the loan and lease portfolio by analyzing

the migration between grading categories. It is also

integral to the estimation methodology utilized in

determining the ALLL since an allowance is established for

pools of commercial loans based on the credit grade

assigned. Each PD grade corresponds to an estimated one-

year default probability percentage. PD grades are

continually evaluated but require a formal scorecard

annually.

PD 1 through PD 12 are “pass” grades. PD grades 13-16

correspond to the regulatory-defined categories of special

mention (13), substandard (14), doubtful (15), and loss

(16). Special mention commercial loans and leases have

potential weaknesses that, if left uncorrected, may result

in deterioration of FHN's credit position at some future

date. Substandard commercial loans and leases have well-

defined weaknesses and are characterized by the distinct

   

	114	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 3—LOANS & LEASES

possibility that FHN will sustain some loss if the

deficiencies are not corrected. Doubtful commercial loans

and leases have the same weaknesses as substandard

loans and leases with the added characteristics that the

probability of loss is high and collection of the full amount

is improbable.

The following tables provide the amortized cost basis of

the commercial loan portfolio by year of origination and

credit quality indicator as of December 31, 2025 and 2024.

Table 8.3.2

C&I PORTFOLIO

		December 31, 2025
(Dollars in millions)		2025		2024		2023		2022		2021		Prior to 2021		LMC (a)		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Credit Quality Indicator:
Pass (PD grades 1 through 12)		$4,492		$5,124		$2,012		$2,706		$1,749		$3,997		$4,703		$9,448		$210		$34,441
Special Mention (PD grade 13)		7		55		42		78		30		61		—		123		6		402
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)		52		86		92		207		152		182		—		283		8		1,062
Total C&I loans		$4,551		$5,265		$2,146		$2,991		$1,931		$4,240		$4,703		$9,854		$224		$35,905

		December 31, 2024
(Dollars in millions)		2024		2023		2022		2021		2020		Prior to 2020		LMC (a)		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Credit Quality Indicator:
Pass (PD grades 1 through 12)		$5,590		$2,607		$3,649		$2,336		$1,055		$3,853		$3,471		$8,784		$248		$31,593
Special Mention (PD grade 13)		106		27		78		47		33		57		—		279		2		629
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)		84		184		113		179		33		169		—		383		61		1,206
Total C&I loans		$5,780		$2,818		$3,840		$2,562		$1,121		$4,079		$3,471		$9,446		$311		$33,428

(a) LMC includes non-revolving commercial lines of credit to qualified mortgage companies primarily for the temporary warehousing of eligible mortgage

loans prior to the borrower's sale of those mortgage loans to third party investors. The loans are of short duration with maturities of less than one year.

Table 8.3.3

CRE PORTFOLIO

		December 31, 2025
(Dollars in millions)		2025		2024		2023		2022		2021		Prior to 2021		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Credit Quality Indicator:
Pass (PD grades 1 through 12)		$1,362		$1,011		$1,726		$2,314		$1,873		$3,457		$293		$93		$12,129
Special Mention (PD grade 13)		—		—		1		191		92		88		33		—		405
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)		10		11		9		480		152		321		46		—		1,029
Total CRE loans		$1,372		$1,022		$1,736		$2,985		$2,117		$3,866		$372		$93		$13,563

   

	115	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 3—LOANS & LEASES

		December 31, 2024
(Dollars in millions)		2024		2023		2022		2021		2020		Prior to 2020		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Credit Quality Indicator:
Pass (PD grades 1 through 12)		$694		$1,296		$3,282		$2,778		$894		$3,281		$340		$47		$12,612
Special Mention (PD grade 13)		—		42		280		198		37		130		—		1		688
Substandard, Doubtful, or Loss (PD grades 14,15, and 16)		3		31		251		278		116		436		6		—		1,121
Total CRE loans		$697		$1,369		$3,813		$3,254		$1,047		$3,847		$346		$48		$14,421

The consumer portfolio is comprised primarily of smaller-

balance loans which are very similar in nature in that most

are standard products and are backed by residential real

estate. Because of the similarities of consumer loan types,

FHN is able to utilize the FICO score, among other

attributes, to assess the credit quality of consumer

borrowers. FICO scores are refreshed on a quarterly basis

in an attempt to reflect the recent risk profile of the

borrowers. Accruing delinquency amounts are indicators

of asset quality within the credit card and other consumer

portfolio.

The following table reflects the amortized cost basis by

year of origination and refreshed FICO scores for

consumer real estate loans as of December 31, 2025 and

2024. Within consumer real estate, classes include HELOC

and real estate installment loans. HELOCs are loans which

during their draw period are classified as revolving loans.

Once the draw period ends and the loan enters its

repayment period, the loan converts to a term loan and is

classified as a revolving loan converted to a term loan. All

loans classified in the following table as revolving loans or

revolving loans converted to term loans are HELOCs. Real

estate installment loans are originated as fixed term loans

and are classified below in their vintage year. All loans in

the following tables classified in a vintage year are real

estate installment loans.

Table 8.3.4

CONSUMER REAL ESTATE PORTFOLIO

		December 31, 2025
(Dollars in millions)		2025		2024		2023		2022		2021		Prior to 2021		Revolving Loans		Revolving Loans Converted to Term Loans		Total
FICO score 740 or greater		$920		$922		$1,330		$1,830		$1,430		$1,924		$1,551		$75		$9,982
FICO score 720-739		119		139		173		250		193		324		182		17		1,397
FICO score 700-719		94		90		125		202		159		250		134		14		1,068
FICO score 660-699		92		128		145		163		90		268		115		19		1,020
FICO score 620-659		9		11		10		16		18		102		22		5		193
FICO score less than 620		25		25		20		19		23		306		15		15		448
Total consumer real estate loans		$1,259		$1,315		$1,803		$2,480		$1,913		$3,174		$2,019		$145		$14,108

   

	116	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 3—LOANS & LEASES

		December 31, 2024
(Dollars in millions)		2024		2023		2022		2021		2020		Prior to 2020		Revolving Loans		Revolving Loans Converted to Term Loans		Total
FICO score 740 or greater		$1,045		$1,493		$2,009		$1,592		$675		$1,554		$1,430		$56		$9,854
FICO score 720-739		149		197		270		213		99		271		175		17		1,391
FICO score 700-719		98		140		217		175		72		242		150		18		1,112
FICO score 660-699		133		160		183		100		75		294		146		25		1,116
FICO score 620-659		11		10		17		21		20		122		30		9		240
FICO score less than 620		18		22		19		18		18		203		25		11		334
Total consumer real estate loans		$1,454		$2,022		$2,715		$2,119		$959		$2,686		$1,956		$136		$14,047

The following table reflects the amortized cost basis by year of origination and refreshed FICO scores for credit card and other

loans as of December 31, 2025 and 2024.

Table 8.3.5

CREDIT CARD & OTHER PORTFOLIO

		December 31, 2025
(Dollars in millions)		2025		2024		2023		2022		2021		Prior to 2021		Revolving Loans		Revolving Loans Converted to Term Loans		Total
FICO score 740 or greater		$25		$8		$8		$3		$2		$8		$197		$6		$257
FICO score 720-739		2		1		1		—		—		1		13		1		19
FICO score 700-719		2		1		—		1		—		—		12		1		17
FICO score 660-699		1		—		—		—		—		1		6		1		9
FICO score 620-659		1		1		—		—		—		—		7		1		10
FICO score less than 620		5		4		4		3		2		48		202		—		268
Total credit card and other loans		$36		$15		$13		$7		$4		$58		$437		$10		$580

		December 31, 2024
(Dollars in millions)		2024		2023		2022		2021		2020		Prior to 2020		Revolving Loans		Revolving Loans Converted to Term Loans		Total
FICO score 740 or greater		$21		$22		$10		$4		$2		$19		$197		$8		$283
FICO score 720-739		7		3		1		1		—		3		20		2		37
FICO score 700-719		1		2		2		—		—		2		14		—		21
FICO score 660-699		1		2		1		—		—		3		15		4		26
FICO score 620-659		2		1		—		—		—		1		9		—		13
FICO score less than 620		8		8		5		4		4		78		181		1		289
Total credit card and other loans		$40		$38		$19		$9		$6		$106		$436		$15		$669

   

	117	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 3—LOANS & LEASES

Nonaccrual and Past Due Loans and Leases

Loans and leases are placed on nonaccrual if it becomes

evident that full collection of principal and interest is at

risk, impairment has been recognized as a partial charge-

off of principal balance due to insufficient collateral value

and past due status, or on a case-by-case basis if FHN

continues to receive payments but there are other

borrower-specific issues. Included in nonaccrual are loans

for which FHN continues to receive payments including

residential real estate loans where the borrower has been

discharged of personal obligation through bankruptcy.

Past due loans are loans contractually past due as to

interest or principal payments, but which have not yet

been put on nonaccrual status.

The following table reflects accruing and non-accruing

loans and leases by class on December 31, 2025 and 2024.

Table 8.3.6

ACCRUING & NON-ACCRUING LOANS & LEASES

		December 31, 2025
		Accruing								Non-Accruing
(Dollars in millions)		Current		30-89 Days Past Due		90+ Days Past Due		Total Accruing		Current		30-89 Days Past Due		90+ Days Past Due		Total Non- Accruing		Total Loans and Leases
Commercial, financial, and industrial:
C&I (a)		$30,943		$34		$1		$30,978		$120		$35		$69		$224		$31,202
Loans to mortgage companies		4,703		—		—		4,703		—		—		—		—		4,703
Total commercial, financial, and industrial		35,646		34		1		35,681		120		35		69		224		35,905
Commercial real estate:
CRE (b)		13,321		3		—		13,324		218		11		10		239		13,563
Consumer real estate:
HELOC (c)		2,115		14		—		2,129		17		7		11		35		2,164
Real estate installment loans (d)		11,806		27		6		11,839		40		9		56		105		11,944
Total consumer real estate		13,921		41		6		13,968		57		16		67		140		14,108
Credit card and other:
Credit card		224		3		1		228		—		—		—		—		228
Other		349		2		—		351		—		—		1		1		352
Total credit card and other		573		5		1		579		—		—		1		1		580
Total loans and leases		$63,461		$83		$8		$63,552		$395		$62		$147		$604		$64,156

		December 31, 2024
		Accruing								Non-Accruing
(Dollars in millions)		Current		30-89 Days Past Due		90+ Days Past Due		Total Accruing		Current		30-89 Days Past Due		90+ Days Past Due		Total Non- Accruing		Total Loans and Leases
Commercial, financial, and industrial:
C&I (a)		$29,751		$32		$1		$29,784		$101		$26		$46		$173		$29,957
Loans to mortgage companies		3,471		—		—		3,471		—		—		—		—		3,471
Total commercial, financial, and industrial		33,222		32		1		33,255		101		26		46		173		33,428
Commercial real estate:
CRE (b)		14,124		3		—		14,127		221		10		63		294		14,421
Consumer real estate:
HELOC (c)		2,045		11		2		2,058		19		4		11		34		2,092
Real estate installment loans (d)		11,800		39		17		11,856		31		10		58		99		11,955
Total consumer real estate		13,845		50		19		13,914		50		14		69		133		14,047
Credit card and other:
Credit card		262		2		1		265		—		—		—		—		265
Other		400		2		—		402		—		1		1		2		404
Total credit card and other		662		4		1		667		—		1		1		2		669
Total loans and leases		$61,853		$89		$21		$61,963		$372		$51		$179		$602		$62,565

(a)$211 million and $172 million of C&I loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance in 2025

and 2024, respectively.

(b)$238 million and $287 million of CRE loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance for 2025

and 2024, respectively.

(c)$3 million of HELOC loans are nonaccrual loans that have been specifically reviewed for impairment with no related allowance for both 2025 and 2024.

   

	118	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 3—LOANS & LEASES

(d)$8 million and $9 million of real estate installment loans are nonaccrual loans that have been specifically reviewed for impairment with no related

allowance for 2025 and 2024, respectively.

Collateral-Dependent Loans

Collateral-dependent loans are defined as loans for which

repayment is expected to be derived substantially through

the operation or sale of the collateral and where the

borrower is experiencing financial difficulty. At a

minimum, the estimated value of the collateral for each

loan equals the current book value.

As of December 31, 2025 and 2024, FHN had commercial

loans with amortized cost of approximately $400 million

and $352 million, respectively, that were based on the

value of underlying collateral. Collateral-dependent C&I

and CRE loans totaled $160 million and $240 million,

respectively, as of December 31, 2025. The collateral for

these loans generally consists of business assets including

land, buildings, equipment, and financial assets. During

the years ended December 31, 2025 and 2024, FHN

recognized charge-offs of $66 million and $75 million,

respectively, on these loans related to reductions in

estimated collateral values.

Consumer HELOC and real estate installment loans with

amortized cost based on the value of underlying real

estate collateral were approximately $5 million and

$46 million, respectively, as of December 31, 2025, and

$6 million and $36 million, respectively, as of

December 31, 2024. Charge-offs were $3 million and

$2 million for collateral-dependent consumer loans during

the years ended December 31, 2025 and 2024,

respectively.

Loan Modifications to Troubled Borrowers

As part of FHN’s ongoing risk management practices, FHN

attempts to work with borrowers when necessary to

extend or modify loan terms to better align with their

current ability to repay. Modifications could include

extension of the maturity date, reductions of the interest

rate, reduction or forgiveness of accrued interest, or

principal forgiveness. Combinations of these modifications

may also be made for individual loans. Extensions and

modifications to loans are made in accordance with

internal policies and guidelines which conform to

regulatory guidance. Principal reductions may be made in

limited circumstances, typically for specific commercial

loan workouts, and in the event of borrower bankruptcy.

Each occurrence is unique to the borrower and is

evaluated separately.

Troubled loans are considered those in which the

borrower is experiencing financial difficulty. The

assessment of whether a borrower is experiencing

financial difficulty can be subjective in nature and

management’s judgment may be required in making this

determination. FHN may determine that a borrower is

experiencing financial difficulty if the borrower is currently

in default on any of its debt, or if it is probable that a

borrower may default in the foreseeable future absent a

modification. Many aspects of a borrower’s financial

situation are assessed when determining whether they

are experiencing financial difficulty.

Troubled commercial loans are typically modified through

forbearance agreements which could include reduced

interest rates, reduced payments, term extension, or

entering into short sale agreements. Principal reductions

may occur in specific circumstances.

Modifications for troubled consumer loans are generally

structured using parameters of U.S. government-

sponsored programs. For HELOC and real estate

installment loans, troubled loans are typically modified by

an interest rate reduction and a possible maturity date

extension to reach an affordable housing expense-to-

income ratio. Despite the absence of a loan modification

by FHN, the discharge of personal liability through

bankruptcy proceedings is considered a court-imposed

modification.

For the credit card portfolio, troubled loan modifications

are typically effected through either a short-term credit

card hardship program or a longer-term credit card

workout program. In the credit card hardship program,

borrowers may be granted rate and payment reductions

for six months to one year. In the credit card workout

program, borrowers are granted a rate reduction to 0%

and a term extension for up to five years.

Modifications to Borrowers Experiencing Financial

Difficulty

The following table presents the amortized cost basis at

the end of the reporting period of loans modified to

borrowers experiencing financial difficulty, disaggregated

by class of financing receivable and type of modification

made, as of December 31, 2025, 2024, and 2023.

   

	119	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 3—LOANS & LEASES

Table 8.3.7

LOAN MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

		Amortized Cost
		Interest Rate Reduction		Term Extension		Principal Forgiven/ Payment Deferred		Combination (a)		Total		% of Total Class
(Dollars in millions)
As of December 31, 2025
C&I		$—		$188		$—		$7		$195		0.54%
CRE		45		191		—		47		283		2.09
Consumer real estate		—		—		1		2		3		0.02
Total		$45		$379		$1		$56		$481		0.75%
As of December 31, 2024
C&I		$—		$132		$—		$8		$140		0.42%
CRE		—		180		—		61		241		1.67
Consumer real estate		—		—		—		3		3		0.02
Total		$—		$312		$—		$72		$384		0.60%
As of December 31, 2023
C&I		$—		$90		$—		$2		$92		0.28%
CRE		—		40		—		15		55		0.39
Consumer real estate		2		2		5		6		15		0.11
Total		$2		$132		$5		$23		$162		0.26%
(a) Combination modifications consist primarily of loans modified with both an interest rate reduction and a term extension.

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty.

Table 8.3.8

FINANCIAL EFFECT OF MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY (a)
								Combination
(Dollars in millions)		Weighted-average Interest Rate Reduction		Weighted-average Term Extension (in years)		Amount of Principal Forgiven/Payment Deferred		Weighted-average Interest Rate Reduction		Weighted-average Term Extension (in years)
As of December 31, 2025
C&I		—%		1.05		$—		1.23%		1.20
CRE		0.68		1.43		—		0.90		2.33
As of December 31, 2024
C&I		—%		1.29		$—		0.50%		0.76
CRE		—		1.25		—		0.35		2.03
As of December 31, 2023
C&I		—%		1.00		$—		3.88%		3.85
CRE		—		0.80		—		0.72		1.12
Consumer real estate		3.60		12.00		1.3		1.09		12.38
(a) Certain disclosures related to financial effects of modifications do not include those deemed to be immaterial.

   

	120	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 3—LOANS & LEASES

Loan modifications to borrowers experiencing financial

difficulty that had a payment default during the period

and were modified in the 12 months before default

totaled $16 million, $19 million, and $28 million for the

years ended December 31, 2025, 2024, and 2023,

respectively. FHN closely monitors the performance of the

loans that are modified to borrowers experiencing

financial difficulty to understand the effectiveness of its

modification efforts.

The following table depicts the performance of loans that

have been modified in the last 12 months as of

December 31, 2025, 2024, and 2023.

Table 8.3.9

PERFORMANCE OF LOANS THAT HAVE BEEN MODIFIED IN THE LAST 12 MONTHS
		December 31, 2025
(Dollars in millions)		Current		30-89 Days Past Due		90+ Days Past Due		Non-Accruing		Total
C&I		$133		$7		$—		$55		$195
CRE		155		—		—		128		283
Consumer real estate		1		—		—		2		3
Total		$289		$7		$—		$185		$481

		December 31, 2024
(Dollars in millions)		Current		30-89 Days Past Due		90+ Days Past Due		Non-Accruing		Total
C&I		$116		$—		$—		$24		$140
CRE		195		—		—		46		241
Consumer real estate		2		—		—		1		3
Total		$313		$—		$—		$71		$384

		December 31, 2023
(Dollars in millions)		Current		30-89 Days Past Due		90+ Days Past Due		Non-Accruing		Total
C&I		$70		$—		$—		$22		$92
CRE		8		—		—		47		55
Consumer real estate		4		—		—		11		15
Total		$82		$—		$—		$80		$162

   

	121	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 4—ALLOWANCE FOR CREDIT LOSSES

Note 4—Allowance for Credit Losses

Management's estimate of expected credit losses in the

loan and lease portfolios is recorded in the ALLL and the

reserve for unfunded lending commitments, collectively

referred to as the Allowance for Credit Losses, or the ACL.

See Note 1 - Significant Accounting Policies for further

discussion of FHN's ACL methodology.

The ACL is maintained at a level management believes to

be appropriate to absorb expected credit losses over the

contractual life of the loan and lease portfolio and

unfunded lending commitments. The determination of the

ACL is based on periodic evaluation of the loan and lease

portfolios and unfunded lending commitments

considering a number of relevant underlying factors,

including key assumptions and evaluation of quantitative

and qualitative information.

The expected loan losses are the product of multiplying

FHN’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. FHN uses models

or assumptions to develop the expected loss forecasts,

which incorporate multiple macroeconomic forecasts over

a reasonable and supportable forecast period of at most

three years. After the reasonable and supportable

forecast period, the Company reverts on a straight-line

basis to its historical loss averages, evaluated over the

historical observation period, for the remaining estimated

life of the loans. In order to capture the unique risks of the

loan portfolio within the PD, LGD, and prepayment

models, FHN segments the portfolio into pools, generally

incorporating loan grades for commercial loans. As there

can be no certainty that actual economic performance will

precisely follow any specific macroeconomic forecast, FHN

uses qualitative adjustments where current loan

characteristics or current or forecasted economic

conditions differ from historical periods.

The evaluation of quantitative and qualitative information

is performed through assessments of groups of assets that

share similar risk characteristics and certain individual

loans and leases that do not share similar risk

characteristics with the collective group. As described in

Note 3 - Loans and Leases, loans are grouped generally by

product type and significant loan portfolios are assessed

for credit losses using analytical or statistical models. The

quantitative component utilizes economic forecast

information as its foundation and is primarily based on

analytical models that use known or estimated data as of

the balance sheet date and forecasted data over the

reasonable and supportable period. The ACL is also

affected by qualitative factors that FHN considers to

reflect current judgment of various events and risks that

are not measured in the quantitative calculations,

including alternative economic forecasts.

In accordance with its accounting policy elections, FHN

does not recognize a separate allowance for expected

credit losses for AIR and records reversals of AIR as

reductions of interest income. FHN reverses previously

accrued but uncollected interest when an asset is placed

on nonaccrual status. AIR and the related allowance for

expected credit losses are included as a component of

other assets. The total amount of interest reversals from

loans placed on nonaccrual status and the amount of

income recognized on nonaccrual loans during the years

ended December 31, 2025, 2024, and 2023 were not

material.

Expected credit losses for unfunded commitments are

estimated for periods where the commitment is not

unconditionally cancellable. The measurement of

expected credit losses for unfunded commitments mirrors

that of loans and leases with the additional estimate of

future draw rates (timing and amount).

The decrease in the ACL balance as of December 31, 2025,

as compared to December 31, 2024, was largely driven by

reductions in criticized and classified loan balances, lower

specific reserves in the CRE portfolio, and lower CRE loan

balances. In developing credit loss estimates for its loan

and lease portfolios, FHN utilized multiple scenarios for its

macroeconomic inputs, including a baseline scenario, an

upside scenario, and a downside scenario from Moody’s.

As of December 31, 2025, among other things, FHN's

scenario selection process factored in inflation, interest

rates, employment, and real estate prices. FHN selected

one scenario as its base case, which was the Moody's

baseline scenario. The heaviest weight was placed on this

scenario. Smaller weights were placed on the FHN-

selected downside scenario and on the FHN-selected

upside scenario.

Management also made qualitative adjustments to reflect

estimated recoveries based on a review of prior charge-off

and recovery levels, for default risk associated with large

balances with individual borrowers, for estimated loss

amounts not reflected in historical factors due to specific

portfolio risk or identified model limitations, and for

instances where limited data for acquired loans is

considered to affect modeled results.

The following table provides a rollforward of the ALLL and

the reserve for unfunded lending commitments by

portfolio type for December 31, 2025, 2024, and 2023.

   

	122	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 4—ALLOWANCE FOR CREDIT LOSSES

Table 8.4.1

ROLLFORWARD OF ALLL & RESERVE FOR UNFUNDED LENDING COMMITMENTS

(Dollars in millions)		Commercial, Financial, and Industrial		Commercial Real Estate		Consumer Real Estate		Credit Card and Other		Total
Allowance for loan and lease losses:
Balance as of January 1, 2025		$345		$227		$221		$22		$815
Charge-offs		(126)		(15)		(5)		(20)		(166)
Recoveries		32		3		6		5		46
Provision for loan and lease losses		84		(38)		(16)		13		43
Balance as of December 31, 2025		335		177		206		20		738
Reserve for remaining unfunded commitments:
Balance as of January 1, 2025		$57		$11		$11		$—		$79
Provision for unfunded lending commitments		24		—		(2)		—		22
Balance as of December 31, 2025		81		11		9		—		101
Allowance for credit losses as of December 31, 2025		$416		$188		$215		$20		$839
Allowance for loan and lease losses:
Balance as of January 1, 2024		$339		$172		$233		$29		$773
Charge-offs		(77)		(56)		(3)		(21)		(157)
Recoveries		30		1		9		5		45
Provision for loan and lease losses		53		110		(18)		9		154
Balance as of December 31, 2024		345		227		221		22		815
Reserve for remaining unfunded commitments:
Balance as of January 1, 2024		$49		$22		$12		$—		$83
Provision for unfunded lending commitments		8		(11)		(1)		—		(4)
Balance as of December 31, 2024		57		11		11		—		79
Allowance for credit losses as of December 31, 2024		$402		$238		$232		$22		$894
Allowance for loan and lease losses
Balance as of January 1, 2023		$308		$146		$200		$31		$685
Adoption of ASU 2022-02		1		—		(7)		—		(6)
Charge-offs (a)		(156)		(17)		(4)		(22)		(199)
Recoveries		14		2		9		4		29
Provision for loan and lease losses		172		41		35		16		264
Balance as of December 31, 2023		339		172		233		29		773
Reserve for remaining unfunded commitments:
Balance as of January 1, 2023		$55		$22		$10		$—		$87
Provision for unfunded lending commitments		(6)		—		2		—		(4)
Balance as of December 31, 2023		49		22		12		—		83
Allowance for credit losses as of December 31, 2023		$388		$194		$245		$29		$856

(a)Charge-offs in the C&I portfolio in 2023 include $72 million from a single credit from a company in bankruptcy.

   

	123	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 4—ALLOWANCE FOR CREDIT LOSSES

The following table represents gross charge-offs by year of origination for the years ended December 31, 2025, 2024, and

2023.

Table 8.4.2

GROSS CHARGE-OFFS
(Dollars in millions)		2025		2024		2023		2022		2021		Prior to 2021		Revolving Loans		Total
C&I		$3		$5		$13		$22		$30		$39		$14		$126
CRE		—		—		—		9		—		6		—		15
Consumer real estate		—		—		2		1		—		2		—		5
Credit card and other		7		—		1		1		2		1		8		20
Total		$10		$5		$16		$33		$32		$48		$22		$166
(Dollars in millions)		2024		2023		2022		2021		2020		Prior to 2020		Revolving Loans		Total
C&I		$1		$16		$15		$23		$3		$15		$4		$77
CRE		—		—		5		—		17		34		—		56
Consumer real estate		—		1		—		—		—		2		—		3
Credit card and other		8		1		1		—		—		2		9		21
Total		$9		$18		$21		$23		$20		$53		$13		$157
(Dollars in millions)		2023		2022		2021		2020		2019		Prior to 2019		Revolving Loans		Total
C&I		$1		$17		$82		$5		$10		$34		$7		$156
CRE		—		—		—		—		2		15		—		17
Consumer real estate		—		1		—		—		—		3		—		4
Credit card and other		12		1		—		—		—		2		7		22
Total		$13		$19		$82		$5		$12		$54		$14		$199

   

	124	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 5—PREMISES, EQUIPMENT, & LEASES

Note 5—Premises, Equipment, and Leases

Premises and equipment was comprised of the following

at December 31, 2025 and 2024.

Table 8.5.1

PREMISES & EQUIPMENT

(Dollars in millions)		December 31, 2025		December 31, 2024
Land		$162		$163
Buildings		575		570
Leasehold improvements		91		88
Furniture, fixtures, and equipment		316		304
Fixed assets held for sale (a)		1		1
Total premises and equipment		1,145		1,126
Less accumulated depreciation and amortization		(601)		(552)
Premises and equipment, net		$544		$574

(a) Primarily comprised of land and buildings.

In 2025, FHN recognized $1 million of leased asset

impairments, and fixed asset impairments were

immaterial. Fixed asset and leased asset impairments

were immaterial for 2024 and 2023. Net gains related to

the sales of fixed assets were $1 million for 2025,

$3 million for 2024, and immaterial for 2023.

First Horizon as Lessee

FHN has operating, financing, and short-term leases for

branch locations, corporate offices and certain equipment.

Substantially all of these leases are classified as operating

leases.

The following table provides details of the classification of

FHN's right-of-use assets and lease liabilities included in

the Consolidated Balance Sheets.

Table 8.5.2

RIGHT-OF-USE ASSETS & LEASE LIABILITIES

(Dollars in millions)		December 31, 2025		December 31, 2024
Lease right-of-use assets:	Classification
Operating lease right-of-use assets	Other assets	$321		$296
Finance lease right-of-use assets	Other assets	2		2
Total lease right-of-use assets		$323		$298
Lease liabilities:
Operating lease liabilities	Other liabilities	$368		$330
Finance lease liabilities	Other liabilities	2		3
Total lease liabilities		$370		$333

The calculated amounts of ROU assets and lease liabilities

in the table above are impacted by the length of the lease

term and the discount rate used to determine the present

value of the minimum lease payments. The following table

details the weighted average remaining lease term and

discount rate for FHN's operating and finance leases as of

December 31, 2025 and 2024.

Table 8.5.3

REMAINING LEASE TERMS

& DISCOUNT RATES

	December 31, 2025		December 31, 2024
Weighted Average Remaining Lease Terms
Operating leases	11.65 years		11.68 years
Finance leases	8.31 years		8.60 years
Weighted Average Discount Rate
Operating leases	3.69%		3.19%
Finance leases	2.00%		2.16%

The following table provides a detail of the components of

lease expense and other lease information for the years

ended December 31, 2025, 2024, and 2023.

Table 8.5.4

LEASE EXPENSE & OTHER INFORMATION

(Dollars in millions)	2025		2024		2023
Lease cost
Operating lease cost	$46		$44		$45
Sublease income	(1)		(1)		(2)
Total lease cost	$45		$43		$43
Other information
(Gain) loss on right-of- use asset impairment - operating leases	$1		$—		$1
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	34		43		46
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	60		22		11

   

	125	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 5—PREMISES, EQUIPMENT, & LEASES

The following table provides a detail of the maturities of

FHN's operating and finance lease liabilities as of

December 31, 2025.

Table 8.5.5

LEASE LIABILITY MATURITIES

(Dollars in millions)	December 31, 2025
2026	$45
2027	49
2028	45
2029	42
2030	37
2031 and thereafter	243
Total lease payments	461
Less lease liability interest	(91)
Total lease liability	$370

FHN had aggregate undiscounted contractual obligations

of less than $1 million for lease arrangements that have

not commenced as of December 31, 2025. Payments

under these arrangements are expected to occur from

2026 through 2031.

First Horizon as Lessor

As a lessor, FHN engages in the leasing of equipment to

commercial clients primarily through direct financing and

sales-type leases. Direct financing and sales-type leases

are similar to other forms of installment lending in that

lessors generally do not retain benefits and risks incidental

to ownership of the property subject to leases. Such

arrangements are essentially financing transactions that

permit lessees to acquire and use property. As lessor, the

sum of all minimum lease payments over the lease term

and the estimated residual value, less unearned interest

income, is recorded as the net investment in the lease on

the commencement date and is included in loans and

leases in the Consolidated Balance Sheets. Interest income

is accrued as earned over the term of the lease based on

the net investment in leases. Fees incurred to originate

the lease are deferred on the commencement date and

recognized as an adjustment of the yield on the lease.

FHN’s portfolio of direct financing and sales-type leases

contains terms of 3 to 23 years, some of which contain

options to extend the lease for various periods of time

and/or to purchase the equipment subject to the lease at

various points in time. These direct financing and sales-

type leases typically include a payment structure set at

lease inception and do not provide any additional services.

Expenses associated with the leased equipment, such as

maintenance and insurance, are paid by the lessee directly

to third parties. The lease agreement typically contains an

option for the purchase of the leased property by the

lessee at the end of the lease term at either the property’s

residual value or a specified price. In all cases, FHN

expects to sell or re-lease the equipment at the end of the

lease term. Due to the nature and structure of FHN’s

direct financing and sales-type leases, there is no selling

profit or loss on these transactions.

The components of the Company’s net investment in

leases as of December 31, 2025 and 2024 were as follows.

Table 8.5.6

LEASE NET INVESTMENTS

(Dollars in millions)	December 31, 2025		December 31, 2024
Lease receivable	$1,371		$1,300
Unearned income	(315)		(279)
Guaranteed residual	164		166
Unguaranteed residual	250		228
Total net investment	$1,470		$1,415

Interest income for direct financing or sales-type leases

totaled $73 million, $64 million, and $50 million for the

years ended December 31, 2025, 2024, and 2023,

respectively. There was no profit or loss recognized at the

commencement date for direct financing or sales-type

leases for the years ended December 31, 2025, 2024, and

2023.

Maturities of the Company's lease receivables as of

December 31, 2025 were as follows.

Table 8.5.7

LEASE RECEIVABLE MATURITIES

(Dollars in millions)	December 31, 2025
2026	$188
2027	165
2028	158
2029	117
2030	165
2031 and thereafter	578
Total future minimum lease payments	$1,371

   

	126	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 6—GOODWILL & OTHER INTANGIBLE ASSETS

Note 6—Goodwill and Other Intangible Assets

Goodwill

FHN performed the required annual goodwill impairment

test as of October 1, 2025. The annual impairment test did

not indicate impairment in any of FHN’s reporting units as

of the testing date. Following the testing date,

management evaluated the events and circumstances that

could indicate that goodwill might be impaired and

concluded that it is not more likely than not that goodwill

was impaired. If there are any triggering events between

annual evaluations, management will evaluate whether an

interim impairment analysis is warranted.

Accounting estimates and assumptions were made about

FHN’s future performance and cash flows, as well as other

prevailing market factors (e.g., interest rates, economic

trends, etc.) when determining fair value as part of the

goodwill impairment test. While management used the

best information available to estimate future performance

for each reporting unit, future adjustments to

management’s projections may be necessary if conditions

differ substantially from the assumptions used in making

the estimates.

As further discussed in Note 19 - Business Segment

Information, FHN reorganized its management reporting

structure during 2024 and, accordingly, its segment

reporting structure and reporting units used in the

assessment of goodwill impairment. In connection with

the reorganization, goodwill was reallocated to segments

and reporting units.

The following is a summary of goodwill by reportable

segment included in the Consolidated Balance Sheets as of

December 31, 2025.

Table 8.6.1

GOODWILL

(Dollars in millions)		Commercial, Consumer & Wealth		Wholesale		Total
December 31, 2022		$1,217		$294		$1,511
Additions		—		—		—
Divestitures (a)		—		(1)		(1)
December 31, 2023		$1,217		$293		$1,510
Additions		—		—		—
December 31, 2024		$1,217		$293		$1,510
Additions		—		—		—
December 31, 2025		$1,217		$293		$1,510

(a) Reduction in goodwill is related to the divestiture of FHN Financial

Main Street Advisors assets in December 2023.

Other intangible assets

The following table, which excludes fully amortized

intangibles, presents other intangible assets included in

the Consolidated Balance Sheets.

Table 8.6.2

OTHER INTANGIBLE ASSETS

		December 31, 2025						December 31, 2024
(Dollars in millions)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Core deposit intangibles		$354		$(264)		$90		$356		$(233)		$123
Client relationships		32		(20)		12		32		(18)		14
Other (a)		11		(8)		3		27		(21)		6
Total		$397		$(292)		$105		$415		$(272)		$143

(a) Includes non-compete covenants and purchased credit card intangible assets. Also includes state banking licenses which are not subject to amortization.

Amortization expense was $38 million, $44 million, and

$47 million for the years ended December 31, 2025, 2024

and 2023, respectively. Estimated aggregate amortization

expense for each of the next five years, based on existing

asset balances as of December 31, 2025, is as follows.

Table 8.6.3

ESTIMATED AMORTIZATION EXPENSE

(Dollars in millions)
2026		$33
2027		29
2028		17
2029		15
2030		7

   

	127	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 7—MORTGAGE BANKING ACTIVITY

Note 7—Mortgage Banking Activity

FHN originates mortgage loans for sale into the secondary

market. These loans primarily consist of residential first

lien mortgages that conform to standards established by

GSEs that are major investors in U.S. home mortgages, but

can also consist of junior lien and jumbo loans secured by

residential property. These loans are primarily sold to

private companies that are unaffiliated with the GSEs on a

servicing-released basis. Gains and losses on these

mortgage loans are included in mortgage banking income

on the Consolidated Statements of Income.

FHN records estimated losses related to prior mortgage

loan sales within a repurchase and foreclosure accrual. 

FHN estimates losses based on prior origination levels,

losses recognized upon repurchases and the impact of

current economic conditions on estimated loss content. 

Based on currently available information and experience

to date, FHN has evaluated its loan repurchase, make-

whole, foreclosure, and certain related exposures and has

accrued for losses of $12 million and $15 million as of

December 31, 2025 and 2024, respectively.

As of December 31, 2025, FHN had approximately

$27 million of loans that remained from pre-2009

mortgage business operations of legacy First Horizon.

Activity related to the pre-2009 mortgage loans was

primarily limited to payments and write-offs in 2025,

2024, and 2023, with no new originations or loan sales

and only an insignificant amount of repurchases. These

loans are excluded from the disclosure below.

The following table summarizes activity relating to

residential mortgage loans held for sale for the years

ended December 31, 2025, 2024, and 2023.

Table 8.7.1

MORTGAGE LOAN ACTIVITY

(Dollars in millions)		2025		2024		2023
Balance at beginning of period		$81		$62		$44
Originations and purchases		1,253		951		692
Sales, net of gains		(1,187)		(932)		(674)
Balance at end of period		$147		$81		$62

Mortgage Servicing Rights

FHN records mortgage servicing rights at the lower of cost

or market value and amortizes them over the remaining

servicing life of the loans, with consideration given to

prepayment assumptions.

Mortgage servicing rights are included in other assets on

the Consolidated Balance Sheets. The following table

presents the carrying values of mortgage servicing rights

as of December 31, 2025 and 2024.

Table 8.7.2

MORTGAGE SERVICING RIGHTS

	December 31, 2025
(Dollars in millions)	Gross  Carrying Amount		Accumulated Amortization		Net Carrying Amount
Mortgage servicing rights	$23		$(7)		$16
	December 31, 2024
(Dollars in millions)	Gross  Carrying Amount		Accumulated Amortization		Net Carrying Amount
Mortgage servicing rights	$30		$(9)		$21

In addition, there was an insignificant amount of non-

mortgage and commercial servicing rights as of December

31, 2025 and 2024. Total mortgage servicing fees included

in mortgage banking income were $4 million for each of

the years ended December 31, 2025, 2024, and 2023.

Mortgage servicing rights with a net carrying amount of

$10 million were sold during 2025, resulting in a gain of

$5 million which is included in mortgage banking income

on the Consolidated Statements of Income.

   

	128	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 8—DEPOSITS

Note 8—Deposits

The composition of deposits is presented in the following

table.

Table 8.8.1

DEPOSITS

(Dollars in millions)		2025		2024
Savings		$26,010		$26,695
Time deposits		6,485		6,613
Other interest-bearing deposits		19,158		16,252
Total interest-bearing deposits		51,653		49,560
Noninterest-bearing deposits		15,823		16,021
Total deposits		$67,476		$65,581

Time deposits in denominations that exceed the FDIC

insurance limit of $250,000 as of December 31, 2025 and

2024 were $1.8 billion and $1.9 billion , respectively.

Scheduled maturities of time deposits as of December 31,

2025 were as follows.

Table 8.8.2

TIME DEPOSIT MATURITIES

(Dollars in millions)
2026		$6,037
2027		363
2028		34
2029		29
2030		16
2031 and thereafter		6
Total		$6,485

   

	129	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 9—SHORT-TERM BORROWINGS

Note 9—Short-Term Borrowings

A summary of short-term borrowings for the years 2025, 2024 and 2023 is presented in the following table.

Table 8.9.1

SHORT-TERM BORROWINGS

(Dollars in millions)		Trading Liabilities		Federal Funds Purchased		Securities Sold Under Agreements to Repurchase		Other Short-term Borrowings
2025
Average balance		$644		$801		$1,853		$685
Year-end balance		607		1,039		1,973		242
Maximum month-end outstanding		759		1,138		2,205		2,636
Average rate for the year		4.01%		4.32%		3.07%		4.37%
Average rate at year-end		3.71%		3.67%		2.53%		3.81%
2024
Average balance		$555		$420		$1,720		$781
Year-end balance		550		259		2,096		1,045
Maximum month-end outstanding		767		626		2,096		2,067
Average rate for the year		4.22%		5.34%		3.83%		5.38%
Average rate at year-end		4.20%		4.40%		3.23%		4.48%
2023
Average balance		$301		$349		$1,426		$2,688
Year-end balance		509		302		1,921		326
Maximum month-end outstanding		509		622		1,957		7,476
Average rate for the year		4.16%		5.12%		3.66%		5.19%
Average rate at year-end		4.48%		5.40%		3.98%		5.36%

Federal funds purchased and securities sold under

agreements to repurchase generally have maturities of

less than 90 days. Trading liabilities, which represent short

positions in securities, are generally held for less than 90

days. Other short-term borrowings have original

maturities of one year or less. On December 31, 2025,

fixed income trading securities with a fair value of $5

million were pledged to secure other short-term

borrowings.

   

	130	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 10—TERM BORROWINGS

Note 10—Term Borrowings

Term borrowings include senior and subordinated borrowings with original maturities greater than one year. The following

table presents information pertaining to term borrowings as of December 31, 2025 and 2024.

Table 8.10.1

TERM BORROWINGS

(Dollars in millions)		2025		2024
First Horizon Bank:
Subordinated notes (a)
Maturity date – May 1, 2030 - 5.75%		$449		$448
Other collateralized borrowings - Maturity date – December 22, 2037
4.28% on December 31, 2025 and 4.92% on December 31, 2024 (b)		89		88
Other collateralized borrowings - SBA loans (c)		12		37
First Horizon Corporation:
Senior notes
Maturity date – May 26, 2025 - 4.00%		—		350
Maturity date – March 7, 2031 - 5.51%		497		—
Junior subordinated debentures (d)
Maturity date – June 28, 2035 - 5.66% on December 31, 2025 and 6.30% on December 31, 2024		3		3
Maturity date – December 15, 2035 - 5.35% on December 31, 2025 and 5.99% on December 31, 2024		19		18
Maturity date – March 15, 2036 - 5.38% on December 31, 2025 and 6.02% on December 31, 2024		10		9
Maturity date – March 15, 2036 - 5.52% on December 31, 2025 and 6.16% on December 31, 2024		12		12
Maturity date – June 30, 2036 - 5.27% on December 31, 2025 and 5.91% on December 31, 2024		28		28
Maturity date – July 7, 2036 - 5.72% on December 31, 2025 and 6.47% on December 31, 2024		19		19
Maturity date – June 15, 2037 - 5.63% on December 31, 2025 and 6.27% on December 31, 2024		53		53
Maturity date – September 6, 2037 - 5.43% on December 31, 2025 and 6.14% on December 31, 2024		9		9
Tax Credit Investment Subsidiaries:
Notes payable - New Market Tax Credit investments; 17 to 34 year term, 0.93% to 4.75% on December 31, 2025; 17 to 35 year term, 0.93% to 4.75% on December 31, 2024		74		74
FT Real Estate Securities Company, Inc.:
Cumulative preferred stock (e)
Maturity date – March 31, 2031 - 9.50%		47		47
Total		$1,321		$1,195

(a) Qualifies for Tier 2 capital under the risk-based capital guidelines for First Horizon Bank as well as First Horizon Corporation up to certain limits for

minority interest capital instruments.

(b) Secured by trust preferred loans.

(c) Collateralized borrowings associated with SBA loan sales that did not meet sales criteria. The loans have remaining terms of 0 to 18 years. These

borrowings had a weighted average interest rate of 6.82% and 7.08% on December 31, 2025 and 2024, respectively.

(d) Acquired in conjunction with the acquisition of CBF. A portion qualifies for Tier 2 capital under the risk-based capital guidelines. All are floating rate

debentures tied to 3-month CME Term SOFR plus a term spread adjustment of 0.26161%.

(e) Qualifies for Tier 2 capital under the risk-based capital guidelines for both First Horizon Bank and First Horizon Corporation up to certain limits for

minority interest capital instruments.

   

	131	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 10—TERM BORROWINGS

Annual principal repayment requirements as of

December 31, 2025 are as follows.

Table 8.10.2

ANNUAL PRINCIPAL REPAYMENT SCHEDULE

(Dollars in millions)
2026		$—
2027		—
2028		—
2029		—
2030 and after		1,339

In conjunction with its acquisition of CBF, FHN obtained

junior subordinated debentures, each of which is held by a

wholly-owned trust that has issued trust preferred

securities to external investors and loaned the funds to

FHN as junior subordinated debt. The book value for each

issuance represents the purchase accounting fair value as

of the CBF acquisition closing date less accumulated

amortization of the associated discount, as applicable.

Through various contractual arrangements, FHN assumed

a full and unconditional guarantee for each trust’s

obligations with respect to the securities. While the

maturity dates are typically 30 years from the original

issuance date, FHN has the option to redeem each of the

junior subordinated debentures at par on any future

interest payment date, which would trigger redemption of

the related trust preferred securities. A portion of FHN's

remaining junior subordinated notes qualifies as Tier 2

capital under the risk-based capital guidelines.

   

	132	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 11—PREFERRED STOCK

Note 11—Preferred Stock

FHN Preferred Stock

The following table presents a summary of FHN's non-cumulative perpetual preferred stock.

Table 8.11.1

PREFERRED STOCK

													December 31,
(Dollars in millions)													2025		2024
	Issuance Date		Earliest Redemption Date (a)		Annual Dividend Rate		Dividend Payments		Shares Outstanding		Liquidation Amount		Carrying Amount		Carrying Amount
Series B	7/2/2020		8/1/2025		6.625%	(b)	Semi-annually		—		$—		$—		$77
Series C	7/2/2020		5/1/2026		6.600%	(c)	Quarterly		5,750		58		59		59
Series E	5/28/2020		10/10/2025		6.500%		Quarterly		1,500		150		145		145
Series F	5/3/2021		7/10/2026		4.700%		Quarterly		1,500		150		145		145
									8,750		$358		$349		$426

(a)Denotes earliest optional redemption date. Earlier redemption is possible, at FHN's election, if certain regulatory capital events occur.

(b)On August 1, 2025, FHN redeemed all outstanding shares of its Series B Preferred Stock. The fixed dividend rate was set to convert to three-month CME

Term SOFR plus 4.52361% (0.26161% plus 4.262%) on August 1, 2025.

(c)The fixed dividend rate will reset on May 1, 2026 to three-month CME Term SOFR plus 5.18161% (0.26161% plus 4.920%).

FHN redeemed all outstanding shares of its Series B

Preferred Stock effective August 1, 2025. The difference

between the $80 million outstanding liquidation

preference amount and the $77 million carrying value of

the Series B Preferred Stock resulted in $3 million in

deemed dividends that were included in net income

available to common shareholders and EPS for the year

ended December 31, 2025.

Subsidiary Preferred Stock

First Horizon Bank has issued 300,000 shares of Class A

Non-Cumulative Perpetual Preferred Stock ("Class A

Preferred Stock") with a liquidation preference of $1,000

per share. Dividends on the Class A Preferred Stock, if

declared, accrue and are payable each quarter, in arrears,

at a floating rate equal to the greater of three-month CME

Term SOFR plus 1.11161% (0.26161% plus 0.85%) or

3.75% per annum. These securities qualify fully as Tier 1

capital for both First Horizon Bank and FHN. On

December 31, 2025 and 2024, $295 million of Class A

Preferred Stock was recognized as noncontrolling interest

on the Consolidated Balance Sheets.

FT Real Estate Securities Company, Inc. ("FTRESC"), an

indirect subsidiary of FHN, has issued 50 shares of 9.50%

Cumulative Preferred Stock, Class B ("Class B Preferred

Shares"), with a liquidation preference of $1 million per

share; of those shares, 47 were issued to nonaffiliates.

FTRESC is a real estate investment trust established for

the purpose of acquiring, holding, and managing real

estate mortgage assets. Dividends on the Class B Preferred

Shares are cumulative and are payable semi-annually. As

of December 31, 2025 and 2024, the Class B Preferred

Shares qualified as Tier 2 regulatory capital. For all periods

presented, these securities are presented in the

Consolidated Balance Sheets as term borrowings.

The Class B Preferred Shares are mandatorily redeemable

on March 31, 2031, and redeemable at the discretion of

FTRESC in the event that the Class B Preferred Shares

cannot be accounted for as Tier 2 regulatory capital or

there is more than an insubstantial risk that dividends paid

with respect to the Class B Preferred Shares will not be

fully deductible for tax purposes.

   

	133	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 12—REGULATORY CAPITAL & RESTRICTIONS

Note 12—Regulatory Capital and Restrictions

Regulatory Capital

FHN is subject to various regulatory capital requirements

administered by the federal banking agencies. Failure to

meet minimum capital requirements can initiate certain

mandatory, and possibly additional discretionary actions

by regulators that, if undertaken, could have a direct

material effect on FHN’s financial statements. Under

capital adequacy guidelines and the regulatory framework

for prompt corrective action, FHN must meet specific

capital guidelines that involve quantitative measures of

assets, liabilities, and certain off-balance sheet items

calculated pursuant to regulatory directives. Capital

amounts and classification are also subject to qualitative

judgment by the regulators such as capital components,

asset risk weightings, and other factors.

Management believes that, as of December 31, 2025, FHN

and First Horizon Bank met all capital adequacy

requirements to which they were subject. As of

December 31, 2025, First Horizon Bank was classified as

well-capitalized under the regulatory framework for

prompt corrective action. To be categorized as well-

capitalized, an institution must maintain minimum Total

Risk-Based, Tier 1 Risk-Based, Common Equity Tier 1, and

Tier 1 Leverage ratios, as set forth in the following table.

Management believes that no events or changes have

occurred subsequent to year-end that would change this

designation.

Quantitative measures established by regulation to ensure

capital adequacy require FHN to maintain minimum ratios

as set forth in the following table. FHN and First Horizon

Bank are also subject to a 2.5% capital conservation

buffer, which is an amount above the minimum levels

designed to ensure that banks remain well-capitalized,

even in adverse economic scenarios.

The actual capital amounts and ratios of FHN and First

Horizon Bank are presented in the following table.

Table 8.12.1

CAPITAL AMOUNTS & RATIOS

(Dollars in millions)		First Horizon Corporation				First Horizon Bank
		Amount		Ratio		Amount		Ratio
December 31, 2025
Actual:
Total Capital		$9,748		13.35%		$9,425		13.04%
Tier 1 Capital		8,404		11.51		8,229		11.38
Common Equity Tier 1		7,760		10.63		7,934		10.98
Leverage		8,404		10.19		8,229		10.09
Minimum Requirement for Capital Adequacy Purposes:
Total Capital		5,843		8.00		5,783		8.00
Tier 1 Capital		4,382		6.00		4,337		6.00
Common Equity Tier 1		3,287		4.50		3,253		4.50
Leverage		3,300		4.00		3,262		4.00
Minimum Requirement to be Well Capitalized Under Prompt Corrective Action Provisions:
Total Capital						7,228		10.00
Tier 1 Capital						5,783		8.00
Common Equity Tier 1						4,698		6.50
Leverage						4,078		5.00
December 31, 2024
Actual:
Total Capital		$10,130		14.25%		$9,424		13.38%
Tier 1 Capital		8,688		12.22		8,129		11.54
Common Equity Tier 1		7,967		11.20		7,834		11.12
Leverage		8,688		10.64		8,129		10.06

   

	134	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 12—REGULATORY CAPITAL & RESTRICTIONS

Minimum Requirement for Capital Adequacy Purposes:
Total Capital		5,689		8.00		5,633		8.00
Tier 1 Capital		4,266		6.00		4,225		6.00
Common Equity Tier 1		3,200		4.50		3,169		4.50
Leverage		3,266		4.00		3,232		4.00
Minimum Requirement to be Well Capitalized Under Prompt Corrective Action Provisions:
Total Capital						7,042		10.00
Tier 1 Capital						5,633		8.00
Common Equity Tier 1						4,577		6.50
Leverage						4,040		5.00

Restrictions on cash and due from banks

Effective March 26, 2020, the Federal Reserve reduced its

reserve requirement to zero, and as a result, on December

31, 2025 and 2024, First Horizon Bank was not required to

maintain cash reserves.

Restrictions on dividends

Cash dividends are paid by FHN from its assets, which are

mainly provided by dividends from its subsidiaries. Certain

regulatory restrictions exist regarding the ability of First

Horizon Bank to transfer funds to FHN in the form of cash,

dividends, loans, or advances. As of December 31, 2025,

First Horizon Bank had undivided profits of $3.2 billion, of

which a limited amount was available for distribution to

FHN as dividends without prior regulatory approval.  At

any given time, the pertinent portions of those regulatory

restrictions allow First Horizon Bank to declare preferred

or common dividends without prior regulatory approval in

an amount equal to First Horizon Bank's retained net

income for the two most recent completed years plus the

current year-to-date period. 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, First Horizon

Bank’s total amount available for dividends was $88

million as of January 1, 2026. First Horizon Bank declared

and paid common dividends to the parent company in the

amount of $1.0 billion in 2025 and $1.1 billion in 2024.

During 2025 and 2024, First Horizon Bank declared and

paid dividends on its preferred stock according to the

payment terms of its issuances as noted in Note 11 -

Preferred Stock.

The payment of cash dividends by FHN and First Horizon

Bank may also be affected or limited by other factors, such

as the requirement to maintain adequate capital above

regulatory guidelines. Furthermore, the Federal Reserve

generally requires insured banks and bank holding

companies to pay dividends only out of current operating

earnings.

Restrictions on intercompany transactions

Under current Federal banking laws, First Horizon Bank

may not enter into covered transactions with any affiliate

including the parent company and certain financial

subsidiaries in excess of 10% of the bank’s capital stock

and surplus, as defined, or $963 million, on December 31,

2025. Covered transactions include a loan or extension of

credit to an affiliate, a purchase of or an investment in

securities issued by an affiliate, and the acceptance of

securities issued by the affiliate as collateral for any loan

or extension of credit. The equity investment, including

retained earnings, in certain of a bank’s financial

subsidiaries is also treated as a covered transaction. On

December 31, 2025, the parent company had no covered

transactions from First Horizon Bank and 840 Denning LLC,

a parent company subsidiary, had a covered transaction of

$2 million. Two of the bank’s financial subsidiaries, FHN

Financial Securities Corp. and First Horizon Advisors, Inc.,

had covered transactions from First Horizon Bank totaling

$463 million and $46 million, respectively. In addition, the

aggregate amount of covered transactions with all

affiliates, as defined, is limited to 20% of the bank’s capital

stock and surplus, as defined, or $1.9 billion, on

December 31, 2025. First Horizon Bank’s total covered

transactions with all affiliates including the parent

company on December 31, 2025 were $511 million.

   

	135	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 13—COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS)

Note 13—Components of Other Comprehensive Income (Loss)

The following table provides the changes in accumulated other comprehensive income (loss) by component, net of tax, for the

years ended December 31, 2025, 2024, and 2023.

Table 8.13.1

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

(Dollars in millions)		Securities AFS		Cash Flow Hedges		Pension and Postretirement Plans		Total
Balance as of December 31, 2022		$(973)		$(127)		$(268)		$(1,368)
Net unrealized gains (losses)		137		(5)		(11)		121
Amounts reclassified from AOCI		—		52		7		59
Other comprehensive income (loss)		137		47		(4)		180
Balance as of December 31, 2023		$(836)		$(80)		$(272)		$(1,188)
Net unrealized gains (losses)		(15)		(63)		12		(66)
Amounts reclassified from AOCI		69		49		8		126
Other comprehensive income (loss)		54		(14)		20		60
Balance as of December 31, 2024		$(782)		$(94)		$(252)		$(1,128)
Net unrealized gains (losses)		270		17		(12)		275
Amounts reclassified from AOCI		—		35		8		43
Other comprehensive income (loss)		270		52		(4)		318
Balance as of December 31, 2025		$(512)		$(42)		$(256)		$(810)

Reclassifications from AOCI, and related tax effects, were as follows.

Table 8.13.2

RECLASSIFICATIONS FROM AOCI

(Dollars in millions)
Details about AOCI		2025		2024		2023		Affected line item in the statement where net income is presented
Securities AFS:
Realized (gains) losses on securities AFS		$—		$91		$—		Securities gains (losses), net
Tax expense (benefit)		—		(22)		—		Income tax expense
		—		69		—
Cash flow hedges:
Realized (gains) losses on cash flow hedges		$46		$65		$69		Interest and fees on loans and leases
Tax expense (benefit)		(11)		(16)		(17)		Income tax expense
		$35		$49		$52
Pension and Postretirement Plans:
Amortization of prior service cost and net actuarial (gain) loss		$11		$11		$9		Other expense
Tax expense (benefit)		(3)		(3)		(2)		Income tax expense
		8		8		7
Total reclassification from AOCI		$43		$126		$59

   

	136	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 14—INCOME TAXES

Note 14—Income Taxes

The aggregate amount of income taxes included in the Consolidated Statements of Income and the Consolidated Statements

of Changes in Equity for the years ended December 31 were as follows.

Table 8.14.1

INCOME TAX EXPENSE

(Dollars in millions)		2025		2024		2023
Consolidated Statements of Income:
Income tax expense		$282		$211		$212
Consolidated Statements of Changes in Equity:
Income tax expense (benefit) related to:
Net unrealized gains (losses) on securities available for sale		88		17		44
Net unrealized gains (losses) on cash flow hedges		17		(5)		15
Net unrealized gains (losses) on pension and other postretirement plans		(1)		7		(1)
Total		$386		$230		$270

All income (loss) from continuing operations before income tax expense (benefit) is domestic.

Table 8.14.2

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE (BENEFIT)

(Dollars in millions)		2025		2024		2023
United States		$1,280		$1,005		$1,128

The components of income tax expense (benefit) for the years ended December 31 were as follows.

Table 8.14.3

INCOME TAX EXPENSE COMPONENTS

(Dollars in millions)		2025		2024		2023
Current:
Federal		$201		$204		$140
State		32		24		28
		233		228		168
Deferred:
Federal		44		(14)		37
State		5		(3)		7
		49		(17)		44
Total:
Federal		245		190		177
State		37		21		35
Total income tax expense (benefit)		$282		$211		$212

   

	137	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 14—INCOME TAXES

A reconciliation of expected income tax expense (benefit) at the federal statutory rate of 21% for 2025, 2024, and 2023,

respectively, to total income tax expense follows.

Table 8.14.4

RECONCILIATION FROM STATUTORY RATES

		2025				2024				2023
(Dollars in millions)		Amount		Percent		Amount		Percent		Amount		Percent
U.S. federal statutory income tax rate		$269		21.0%		$211		21.0%		$237		21.0%
Domestic federal
Tax credits
LIHTC credits and benefits, net of amortization		(17)		(1.2)		(13)		(1.3)		(15)		(1.3)
Other tax credits		(1)		(0.1)		(1)		(0.1)		(5)		(0.5)
Nontaxable and nondeductible items
Tax-exempt interest		(10)		(0.8)		(12)		(1.1)		(12)		(1.0)
FDIC premium		10		0.8		12		1.1		11		1.0
Other nontaxable and nondeductible items		3		0.2		1		0.1		(1)		(0.1)
Termination of BOLI policies		—		—		—		—		21		1.9
Other		(3)		(0.2)		(5)		(0.5)		(8)		(0.7)
Domestic state and local income taxes, net of federal effect (a)		32		2.5		20		2.0		34		3.0
Changes in unrecognized tax benefits		(1)		(0.1)		(2)		(0.2)		(50)		(4.5)
Reported income tax (benefit) expense and ETR		$282		22.1%		$211		21.0%		$212		18.8%

(a) In 2025, state and local income taxes in Tennessee, Florida, and California comprise the majority of the tax effect in this category. In 2024 and 2023, state

and local income taxes in Tennessee and Florida comprise the majority of the tax effect in this category.

As of December 31, 2025, FHN had net deferred tax asset balances related to federal and state income tax carryforwards of

$36 million and $4 million , respectively, which will expire at various dates as follows.

Table 8.14.5

TAX CARRYFORWARD DTA EXPIRATION DATES

(Dollars in millions)		Expiration Dates		Net Deferred Tax Asset Balance
Losses - federal		2028 - 2035		$25
Credits - federal		2045		11
Net operating losses - states		2026 - 2035		2
Net operating losses - states		2036 - 2041		1
Credits - states		2030		1

We believe it is more likely than not that the benefit from

certain state NOL carryforwards will not be realized. In

recognition of this risk, we have provided an immaterial

valuation allowance on the DTAs related to these state

NOL carryforwards. If our assumptions change and we

determine that we will be able to realize these NOLs, the

tax benefits related to any reversal of the valuation

allowance on DTAs will be recognized as a reduction of

income tax expense.

A DTA or DTL is recognized for the tax consequences of

temporary differences between the financial statement

carrying amounts and the tax bases of existing assets and

liabilities. The tax consequence is calculated by applying

enacted statutory tax rates, applicable to future years, to

these temporary differences. In order to support the

recognition of the DTA, FHN’s management must believe

that the realization of the DTA is more likely than not. FHN

evaluates the likelihood of realization of the DTA based on

both positive and negative evidence available at the time,

including (as appropriate) scheduled reversals of DTLs,

projected future taxable income, tax planning strategies,

and recent financial performance. Realization is

dependent on generating sufficient taxable income prior

to the expiration of the carryforwards attributable to the

DTA. In projecting future taxable income, FHN

incorporates assumptions including the estimated amount

of future state and federal pre-tax operating income, the

reversal of temporary differences, and the

implementation of feasible and prudent tax planning

strategies. These assumptions require significant

judgment about the forecasts of future taxable income

and are consistent with the plans and estimates used to

manage the underlying business.

   

	138	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 14—INCOME TAXES

As of December 31, 2025, FHN's net DTA was $92 million

compared to $227 million at December 31, 2024. At

December 31, 2025, FHN's gross DTA (net of a valuation

allowance) and gross DTL were $672 million and $580

million, respectively. Although realization is not assured,

FHN believes that it meets the more-likely-than-not

requirement with respect to the net DTA after valuation

allowance.

On July 4, 2025, President Trump signed into law H.R. 1,

the budget reconciliation bill known as the "One Big

Beautiful Bill" ("OBBB" or the "bill"). The bill modified the

first-year depreciation deduction to 100% for qualified

property acquired and placed in service after January 19,

2025. The bill also allowed for the immediate deduction of

domestic research or experimental expenditures and a

one-year deduction for unamortized amounts incurred in

prior tax years. Due to these provisions in OBBB, FHN

recognized a reduction to the DTA as of the enactment

date of $34 million. These provisions of OBBB have no

impact on FHN's effective tax rate.

Temporary differences which gave rise to deferred tax assets and deferred tax liabilities on December 31, 2025 and 2024 were

as follows.

Table 8.14.6

COMPONENTS OF DTAs & DTLs

(Dollars in millions)		2025		2024
Deferred tax assets:
Securities available for sale and financial instruments (a)		$180		$284
Loan valuations and loss reserves		179		152
Employee benefits		121		119
Lease liability		91		82
Depreciation and amortization		19		54
Federal carryforwards		36		29
State carryforwards		4		3
Other		42		45
Gross deferred tax assets		$672		$768
Deferred tax liabilities:
Leasing		$398		$363
ROU lease asset		80		73
Other intangible assets		67		71
Other		35		34
Gross deferred tax liabilities		580		541
Net deferred tax assets		$92		$227

(a)Tax effects of unrealized gains and losses are tracked on a portfolio basis.

Total unrecognized tax benefits at December 31, 2025 and

2024 were $12 million and $13 million, respectively. To

the extent such unrecognized tax benefits as of

December 31, 2025 are subsequently recognized, $12

million of tax benefits could impact tax expense and FHN’s

effective tax rate in future periods.

FHN recognizes interest accrued and penalties related to

unrecognized tax benefits within income tax expense. FHN

had approximately $2 million accrued for the payment of

interest as of both December 31, 2025 and 2024. The total

amount of interest and penalties recognized in the

Consolidated Statements of Income during 2025 was

immaterial. The amount recognized during 2024 was a net

benefit of $1 million.

The rollforward of unrecognized tax benefits is shown in

the following table.

   

	139	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 14—INCOME TAXES

Table 8.14.7

ROLLFORWARD OF UNRECOGNIZED TAX BENEFITS

(Dollars in millions)
Balance at December 31, 2023		$15
Increases related to prior year tax positions		2
Increases related to current year tax positions		3
Lapse of statutes		(7)
Balance at December 31, 2024		$13
Increases related to prior year tax positions		1
Increases related to current year tax positions		4
Settlements		(3)
Lapse of statutes		(3)
Balance at December 31, 2025		$12

The following table presents income taxes paid, net of refunds received, by jurisdiction for the years ended December 31,

2025, 2024, and 2023.

Table 8.14.8

INCOME TAXES PAID (NET OF REFUNDS RECEIVED)

(Dollars in millions)		2025		2024		2023
U.S. federal		$31		$74		$56
U.S. state and local:
California		6		*		*
North Carolina		4		*		*
Tennessee		3		*		15
New York State		3		*		*
Florida		*		*		6
Other		13		25		27
Total		$60		$99		$104

* Jurisdiction below the threshold for the period presented.

   

	140	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 15—EARNINGS PER SHARE

Note 15—Earnings Per Share

The computations of basic and diluted earnings per common share were as follows.

Table 8.15.1

EARNINGS PER SHARE COMPUTATIONS

(Dollars in millions, except per share data; shares in thousands)		2025		2024		2023
Net income		$998		$794		$916
Net income attributable to noncontrolling interest		16		19		19
Net income attributable to controlling interest		982		775		897
Preferred stock dividends		26		37		32
Net income available to common shareholders		$956		$738		$865
Weighted average common shares outstanding—basic		505,130		540,317		548,410
Effect of dilutive restricted stock, performance equity awards and options		5,977		3,968		3,802
Effect of dilutive convertible preferred stock (a)		—		—		9,520
Weighted average common shares outstanding—diluted		511,107		544,285		561,732
Basic earnings per common share		$1.89		$1.37		$1.58
Diluted earnings per common share		$1.87		$1.36		$1.54
(a) On February 28, 2022, FHN issued $494 million of Series G Convertible Preferred Stock, which was converted into common stock on June 26, 2023, following the termination of the TD Merger Agreement. Conversion occurred at the rate of 4,000 common shares per Series G preferred share resulting in 19,742,776 additional common shares outstanding. 2023 includes the impact of the Series G based on the final conversion rate.

The following table presents average outstanding options and other equity awards that were excluded from the calculation of

diluted earnings per share because they were either anti-dilutive (the exercise price was higher than the weighted-average

market price for the period) or the performance conditions have not been met.

Table 8.15.2

ANTI-DILUTIVE EQUITY AWARDS

(Shares in thousands)		2025		2024		2023
Stock options excluded from the calculation of diluted EPS		—		26		—
Weighted average exercise price of stock options excluded from the calculation of diluted EPS		$—		$19.73		$24.36
Other equity awards excluded from the calculation of diluted EPS		2,398		2,439		2,242

   

	141	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 16—CONTINGENCIES & OTHER DISCLOSURES

Note 16—Contingencies and Other Disclosures

Contingencies

Contingent Liabilities Overview

Contingent liabilities arise in the ordinary course of

business. Often they are related to lawsuits, arbitration,

mediation, and other forms of litigation. Various litigation

matters currently are threatened or pending against FHN

and its subsidiaries. Also, FHN at times receives requests

for information, subpoenas, or other inquiries from

federal, state, and local regulators, from other

government authorities, and from other parties

concerning various matters relating to FHN’s current or

former businesses. Certain matters of that sort are

pending at most times, and FHN generally cooperates

when those matters arise. Pending and threatened

litigation matters sometimes are settled by the parties,

and sometimes pending matters are resolved in court or

before an arbitrator or are withdrawn. Regardless of the

manner of resolution, frequently the most significant

changes in status of a matter occur over a short time

period, often following a lengthy period of little

substantive activity. In view of the inherent difficulty of

predicting the outcome of these matters, particularly

where the claimants seek very large or indeterminate

damages, or where the cases present novel legal theories

or involve a large number of parties, or where claims or

other actions may be possible but have not been brought,

FHN cannot reasonably determine what the eventual

outcome of the matters will be, what the timing of the

ultimate resolution of these matters may be, or what the

eventual loss or impact related to each matter may be.

FHN establishes a loss contingency liability for a litigation

matter when loss is both probable and reasonably

estimable as prescribed by applicable financial accounting

guidance. If loss for a matter is probable and a range of

possible loss outcomes is the best estimate available,

accounting guidance requires a liability to be established

at the low end of the range.

Based on current knowledge, and after consultation with

counsel, management is of the opinion that loss

contingencies related to threatened or pending litigation

matters should not have a material adverse effect on the

consolidated financial condition of FHN, but may be

material to FHN’s operating results for any particular

reporting period depending, in part, on the results from

that period.

Material Loss Contingency Matters

As used in this Note, except for matters that are reported

as having been substantially settled or otherwise

substantially resolved, FHN's “material loss contingency

matters” generally fall into at least one of the following

categories: (i) FHN has determined material loss to be

probable and has established a material loss liability in

accordance with applicable financial accounting guidance;

(ii) FHN has determined material loss to be probable but is

not reasonably able to estimate an amount or range of

material loss liability; or (iii) FHN has determined that

material loss is not probable but is reasonably possible,

and the amount or range of that reasonably possible

material loss is estimable. As defined in applicable

accounting guidance, loss is reasonably possible if there is

more than a remote chance of a material loss outcome for

FHN. FHN provides contingencies note disclosures for

certain pending or threatened litigation matters each

quarter, including all matters mentioned in categories (i)

or (ii) and, occasionally, certain matters mentioned in

category (iii). In all litigation matters discussed in this

Note, unless settled or otherwise resolved, FHN believes it

has meritorious defenses and intends to pursue those

defenses vigorously.

FHN reassesses the liability for litigation matters each

quarter as the matters progress. At December 31, 2025,

the aggregate amount of liabilities established for all such

loss contingency matters was $1 million.

In each material litigation-related loss contingency matter,

except as otherwise noted, there is more than a remote

chance that any of the following outcomes will occur: the

plaintiff will substantially prevail; the defense will

substantially prevail; the plaintiff will prevail in part; or the

matter will be settled by the parties. At December 31,

2025, FHN estimates that for all material litigation-related

loss contingency matters, estimable reasonably possible

losses in future periods in excess of currently established

liabilities could aggregate in a range from zero to less than

$1 million.

As a result of the general uncertainties discussed above

and the specific uncertainties discussed for the matters

mentioned below, it is possible that the ultimate future

loss experienced by FHN for any particular matter may

materially exceed the amount, if any, of currently

established liability for that matter.

Other Disclosures

Indemnification Agreements and Guarantees

In the ordinary course of business, FHN enters into

indemnification agreements for legal proceedings against

its directors and officers and standard representations and

warranties for underwriting agreements, merger and

acquisition agreements, loan sales, contractual

commitments, and various other business transactions or

arrangements.

The extent of FHN’s obligations under these agreements

depends upon the occurrence of future events; therefore,

it is not possible to estimate a maximum potential amount

of payouts that could be required by such agreements.

   

	142	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 17—RETIREMENT PLANS & OTHER EMPLOYEE BENEFITS

Note 17—Retirement Plans and Other Employee Benefits

Pension Plan

FHN sponsors a noncontributory, qualified defined benefit

pension plan to employees hired or re-hired on or before

September 1, 2007. Pension benefits are based on years

of service, average compensation near retirement or

other termination, and estimated Social Security benefits

at age 65. Benefits under the plan are “frozen” so that

years of service and compensation changes after 2012 do

not affect the benefit owed. Minimum contributions are

based upon actuarially determined amounts necessary to

fund the total benefit obligation. Decisions to contribute

to the plan are based upon pension funding requirements

under the Pension Protection Act, the maximum amount

deductible under the Internal Revenue Code, the actual

performance of plan assets, and trends in the regulatory

environment. FHN made no contributions to the qualified

pension plan in 2025, 2024, and 2023. Management does

not currently anticipate that FHN will make a contribution

to the qualified pension plan in 2026.

FHN also maintains non-qualified plans including a

supplemental retirement plan that covers certain

employees whose benefits under the qualified pension

plan have been limited by tax rules. These other non-

qualified plans are unfunded, and contributions to these

plans cover all benefits paid under the non-qualified plans.

Payments made under the non-qualified plans were

$5 million for 2025, $4 million for 2024, and $6 million for

2023. FHN anticipates making benefit payments under the

non-qualified plans of $5 million in 2026.

Savings Plan

FHN provides all qualifying full-time employees with the

opportunity to participate in FHN's tax-qualified 401(k)

savings plan. The qualified plan allows employees to defer

receipt of earned salary, up to tax law limits, on a tax-

advantaged basis. Accounts, which are held in trust, may

be invested in a wide range of mutual funds and in FHN

common stock. Up to tax law limits, FHN provides a 100%

match for the first 6% of salary deferred, with company

matching contributions invested according to a

participant’s current investment election. Through a non-

qualified savings restoration plan, FHN provides a

restorative benefit to certain highly compensated

employees who participate in the savings plan and whose

contribution elections are capped by tax limitations.

FHN also provides “flexible dollars” to assist employees

with the cost of annual benefits and/or allow the

employee to contribute to his or her qualified savings plan

account. These “flexible dollars” are pre-tax contributions

and are based upon the employees’ years of service and

qualified compensation. Contributions made by FHN

through the flexible benefits plan and the company

matches were $50 million, $49 million, and $48 million for

2025, 2024, and 2023, respectively.

Other Employee Benefits

FHN provides postretirement life insurance benefits to

certain employees and also provides postretirement

medical insurance benefits to retirement-eligible

employees, including certain prescription drug benefits.

The postretirement medical plan is contributory with FHN

contributing a fixed amount for certain participants.

Actuarial Assumptions

FHN’s process for developing the long-term expected rate

of return of pension plan assets is based on capital market

exposure as the source of investment portfolio returns.

Capital market exposure refers to the plan’s allocation of

its assets to asset classes, which primarily represent fixed

income investments. FHN also considers expectations for

inflation, real interest rates, and various risk premiums

based primarily on the historical risk premium for each

asset class. The expected return is based upon a time

horizon of 30 years. Given its funded status, the asset

allocation strategy for the qualified pension plan primarily

utilizes fixed income instruments that closely match the

estimated duration of payment obligations.

The discount rates for the three years ended 2025 for

pension and other benefits were determined by using a

hypothetical AA yield curve represented by a series of

annualized individual discount rates from one-half to 30

years. The discount rates are selected based upon data

specific to FHN’s plans and employee population. The

bonds used to create the hypothetical yield curve were

subjected to several requirements to ensure that the

resulting rates were representative of the bonds that

would be selected by management to fulfill the company’s

funding obligations. In addition to the AA rating, only non-

callable bonds were included. Each bond issue was

required to have at least $300 million par outstanding so

that each issue was sufficiently marketable. Finally, bonds

more than two standard deviations from the average yield

were removed. When selecting the discount rate, FHN

matches the duration of high-quality bonds with the

duration of the obligations of the plan as of the

measurement date. For all years presented, the

measurement date of the benefit obligations and net

periodic benefit costs was December 31.

The actuarial assumptions used in the defined benefit

pension plans and other employee benefit plans were as

follows.

   

	143	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 17—RETIREMENT PLANS & OTHER EMPLOYEE BENEFITS

Table 8.17.1

ACTUARIAL ASSUMPTIONS FOR DEFINED BENEFIT PLANS

		Benefit Obligations						Net Periodic Benefit Cost
		2025		2024		2023		2025		2024		2023
Discount rate
Qualified pension		5.44%		5.66%		5.00%		5.67%		5.00%		5.20%
Nonqualified pension		5.10%		5.50%		4.90%		5.50%		4.90%		5.10%
Other nonqualified pension		4.56%		5.20%		4.75%		5.20%		4.75%		4.94%
Postretirement benefits		4.91% - 5.59%		5.40% - 5.74%		4.84% - 5.06%		5.06% - 5.74%		4.84% - 5.49%		4.88% - 5.25%
Expected long- term rate of return
Qualified pension/ postretirement benefits		N/A		N/A		N/A		5.65%		5.00%		5.15%
Postretirement benefit (retirees post January 1, 1993)		N/A		N/A		N/A		5.75%		5.25%		5.50%
Postretirement benefit (retirees prior to January 1, 1993)		N/A		N/A		N/A		N/A		N/A		N/A

Since the benefits in the defined benefit pension plan are

frozen, the rate of compensation increase has no effect on

qualified pension benefits.

FHN has one pension plan where participants' benefits are

affected by interest crediting rates. The plan's projected

benefit obligation as of December 31, 2025, 2024 and

2023 and interest crediting rates for the respective years

were as follows.

Table 8.17.2

PROJECTED BENEFIT OBLIGATION

& CREDITING RATE

(Dollars in millions)		2025		2024		2023
Projected benefit obligation		$6		$7		$8
Interest crediting rate		12.80%		12.25%		12.04%

The components of net periodic benefit cost for the plan years 2025, 2024 and 2023 were as follows.

Table 8.17.3

COMPONENTS OF NET PERIODIC BENEFIT COST

(Dollars in millions)		Pension Benefits						Other Benefits
		2025		2024		2023		2025		2024		2023
Components of net periodic benefit cost
Interest cost		$31		$32		$33		$2		$2		$2
Expected return on plan assets		(31)		(32)		(32)		(1)		(1)		(1)
Amortization of unrecognized:
Actuarial (gain) loss		12		13		13		(1)		(1)		(1)
Net periodic benefit cost		$12		$13		$14		$—		$—		$—

The long-term expected rate of return is applied to the

market-related value of plan assets in determining the

expected return on plan assets. FHN determines the

market-related value of plan assets using a hybrid

methodology which recognizes liability-hedging assets at

current fair value while return-seeking assets use a

calculated value that recognizes changes in fair value over

five years, as permitted by GAAP.

FHN utilizes a spot rate approach which applies duration-

specific rates from the full yield curve to estimated future

benefit payments for the determination of interest cost.

   

	144	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 17—RETIREMENT PLANS & OTHER EMPLOYEE BENEFITS

The following table presents the plans’ benefit obligations and plan assets for 2025 and 2024.

Table 8.17.4

BENEFIT OBLIGATIONS & PLAN ASSETS

(Dollars in millions)		Pension Benefits				Other Benefits
		2025		2024		2025		2024
Change in benefit obligation
Benefit obligation, beginning of year		$599		$675		$30		$31
Interest cost		31		32		2		2
Actuarial (gain) loss (a)		18		(38)		—		(1)
Actual benefits paid		(41)		(42)		(2)		(2)
Premium paid for annuity purchase (b)		—		(28)		—		—
Benefit obligation, end of year		$607		$599		$30		$30
Change in plan assets
Fair value of plan assets, beginning of year		$578		$638		$24		$23
Actual return on plan assets		33		7		2		2
Employer contributions		3		3		—		1
Actual benefits paid – settlement payments		(40)		(41)		(2)		(2)
Actual benefits paid – other payments		(1)		(1)		—		—
Premium paid for annuity purchase (b)		—		(28)		—		—
Fair value of plan assets, end of year		$573		$578		$24		$24
Funded (unfunded) status of the plans		$(34)		$(21)		$(6)		$(6)
Amounts recognized in the Balance Sheets
Other assets		$—		$1		$23		$22
Other liabilities		(34)		(22)		(29)		(28)
Net asset (liability) at end of year		$(34)		$(21)		$(6)		$(6)

(a) Variances in the actuarial (gain) loss are due to normal activity such as changes in discount rates, updates to participant demographic information and

revisions to life expectancy assumptions.

(b) Amounts represent settlements of certain retired participants in the qualified pension plan that occurred during the year.

The projected benefit obligation for unfunded plans was as follows.

Table 8.17.5

BENEFIT OBLIGATION - UNFUNDED PLANS

		Pension Benefits				Other Benefits
(Dollars in millions)		2025		2024		2025		2024
Projected benefit obligation		$21		$22		$29		$28

The qualified pension plan was underfunded by $13

million and overfunded by $1 million as of December 31,

2025 and 2024, respectively. Because of the frozen status

of the pension plans, as of both December 31, 2025 and

2024, the pension benefit obligation is equivalent to the

accumulated benefit obligation. FHN's funded

postretirement plan was in an overfunded status as of

December 31, 2025 and 2024.

Unrecognized actuarial gains and losses and unrecognized

prior service costs and credits are recognized as a

component of accumulated other comprehensive income.

Balances reflected in accumulated other comprehensive

income on a pre-tax basis for the years ended

December 31, 2025 and 2024 consist of the following.

   

	145	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 17—RETIREMENT PLANS & OTHER EMPLOYEE BENEFITS

Table 8.17.6

PRE-TAX ACTUARIAL (GAINS) LOSSES REFLECTED IN AOCI

(Dollars in millions)		Pension Benefits				Other Benefits
		2025		2024		2025		2024
Amounts recognized in accumulated other comprehensive income
Net actuarial (gain) loss		$346		$341		$(8)		$(9)

The pre-tax amounts recognized in other comprehensive income during 2025, 2024, and 2023 were as follows.

Table 8.17.7

PRE-TAX AMOUNTS RECOGNIZED IN OCI

(Dollars in millions)		Pension Benefits						Other Benefits
		2025		2024		2023		2025		2024		2023
Changes in plan assets and benefit obligation recognized in other comprehensive income
Net actuarial (gain) loss arising during measurement period		$16		$(13)		$17		$—		$(2)		$—
Items amortized during the measurement period:
Net actuarial gain (loss)		(12)		(13)		(13)		1		1		1
Total recognized in other comprehensive income		$4		$(26)		$4		$1		$(1)		$1

FHN utilizes the minimum amortization method in

determining the amount of actuarial gains or losses to

include in plan expense. Under this approach, the net

deferred actuarial gain or loss that exceeds a threshold is

amortized over the average remaining service period of

active plan participants. The threshold is measured as the

greater of 10% of a plan’s projected benefit obligation as

of the beginning of the year or 10% of the market-related

value of plan assets as of the beginning of the year. FHN

amortizes actuarial gains and losses using the estimated

average remaining life expectancy of the remaining

participants since all participants are considered inactive

due to the freeze.

The following table provides detail on expected benefit

payments, which reflect expected future service, as

appropriate.

Table 8.17.8

EXPECTED BENEFIT PAYMENTS

(Dollars in millions)		Pension Benefits		Other Benefits
2026		$44		$2
2027		45		2
2028		46		2
2029		46		2
2030		46		2
2031-2035		229		12

Plan Assets

FHN’s overall investment goal is to create, over the life of

the pension plan and retiree medical plan, an adequate

pool of sufficiently liquid assets to support the qualified

pension benefit obligations to participants, retirees, and

beneficiaries, as well as to partially support the medical

obligations to certain retirees and beneficiaries. Thus, the

qualified pension plan and retiree medical plan seek to

achieve a level of investment return consistent with

changes in projected benefit obligations.

Qualified pension plan assets primarily consist of fixed

income securities which include U.S. treasuries, corporate

bonds of companies from diversified industries, municipal

bonds, and foreign bonds. Fixed income investments

generally have long durations consistent with the

estimated pension liabilities of FHN. This duration-

matching strategy is intended to hedge substantially all of

the plan’s risk associated with future benefit payments.

Retiree medical funds are kept in short-term investments,

primarily money market funds and mutual funds. On

December 31, 2025 and 2024, FHN did not have any

significant concentrations of risk within the plan assets

related to the pension plan or the retiree medical plan.

The fair value of FHN’s pension plan assets at

December 31, 2025 and 2024, by asset category classified

using the fair value measurement hierarchy, is shown in

the table below. See Note 23 – Fair Value of Assets and

Liabilities for more details about fair value measurements.

   

	146	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 17—RETIREMENT PLANS & OTHER EMPLOYEE BENEFITS

Table 8.17.9

FAIR VALUE OF PENSION ASSETS

(Dollars in millions)		December 31, 2025
		Level 1		Level 2		Level 3		Total
Cash equivalents and money market funds		$11		$—		$—		$11
Fixed income securities:
U.S. treasuries		—		11		—		11
Corporate, municipal and foreign bonds		—		302		—		302
Common and collective funds:
Fixed income		—		249		—		249
Total		$11		$562		$—		$573

(Dollars in millions)		December 31, 2024
		Level 1		Level 2		Level 3		Total
Cash equivalents and money market funds		$11		$—		$—		$11
Fixed income securities:
U.S. treasuries		—		8		—		8
Corporate, municipal and foreign bonds		—		295		—		295
Common and collective funds:
Fixed income		—		264		—		264
Total		$11		$567		$—		$578

The HR Investment and Risk Committee, comprised of

senior managers within the organization, meets regularly

to review asset performance and potential portfolio

revisions.

Adjustments to the qualified pension plan asset allocation

primarily reflect changes in anticipated liquidity needs for

plan benefits.

The fair value of FHN’s retiree medical plan assets at December 31, 2025 and 2024 by asset category is as follows.

Table 8.17.10

FAIR VALUE OF RETIREE MEDICAL PLAN ASSETS

(Dollars in millions)		December 31, 2025
		Level 1		Level 2		Level 3		Total
Mutual funds:
Equity mutual funds		$7		$—		$—		$7
Fixed income mutual funds		17		—		—		17
Total		$24		$—		$—		$24

(Dollars in millions)		December 31, 2024
		Level 1		Level 2		Level 3		Total
Mutual funds:
Equity mutual funds		$8		$—		$—		$8
Fixed income mutual funds		16		—		—		16
Total		$24		$—		$—		$24

   

	147	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 18—STOCK OPTIONS AND RESTRICTED STOCK

Note 18—Stock Options and Restricted Stock

Equity Compensation Plans

FHN currently has one plan which authorizes the grant of

new stock-based awards, the 2021 Incentive Plan (the IP).

New awards under the IP may be granted to any of FHN's

directors, officers, or associates. The IP was approved by

shareholders in April 2021 and again in April 2024.

The IP authorizes a broad range of award types, including

restricted shares, stock units, cash units, and stock

options. Stock units may be paid in shares or cash,

depending upon the terms of the award. The IP also

authorizes the grant of stock appreciation rights, though

no such grants have been made under the IP or recent

predecessor plans. Unvested awards have service and/or

performance conditions which must be met in order for

the shares to vest. Awards generally have service-vesting

conditions, meaning that the associate must remain

employed by FHN for certain periods in order for the

award to vest. Some outstanding awards also have

performance conditions. FHN operates the IP by

establishing award programs, each of which is intended to

cover a specific need. Programs are created, changed, or

terminated as needs change.

On December 31, 2025, there were 10,793,408 shares

available for new awards under the IP. This includes the

new/additional shares originally authorized under the IP

along with shares underlying ECP awards that have been

forfeited or canceled since the IP was approved by

shareholders, net of shares underlying IP awards that are

outstanding or have been paid.

Service condition full-value awards

Awards may be granted with service conditions only. In

recent years, programs using these awards have included

annual programs for executives and selected management

associates, a mandatory deferral program for executives

tied to annual bonuses earned, other mandatory or

elective deferral programs, various retention programs,

and special hiring-incentive situations. Details of the

awards vary by program, but most are settled in shares at

vesting rather than cash, and vesting generally begins no

earlier than the third anniversary of grant and rarely

extends beyond the fifth anniversary of grant.

Performance condition awards

Under FHN’s long-term incentive and corporate

performance programs, performance stock units ("PSUs")

(executives) and cash units (selected management

employees) are granted annually and vest only if

predetermined performance measures are met. The

measures are changed each year based on goals and

circumstances prevailing at the time of grant. In recent

years the performance periods have been three years,

with service-vesting near the third anniversary of the

grant. PSUs granted from 2014 to 2020 had a post-vest

holding period of two years. Recent annual performance

awards require pro-rated forfeiture (in relation to the

maximum possible) for performance falling between a

threshold level and a maximum. Performance awards

sometimes are used to provide a narrow, targeted

incentive to a single person or small group. Of the annual

program awards paid during 2025 or outstanding on

December 31, 2025: the 2020 and 2022 units vested in

2023 and 2025 at the 187.5% and 128.3% payout level,

respectively; the three-year performance period of the

2023 units has ended but performance is measured

relative to peers and has not yet been determined; and,

the three-year performance periods for the 2024 and

2025 units have not ended.

Director awards

Non-employee directors receive cash and annual grants of

service-conditioned stock units under a program approved

by the board of directors. Director stock units granted vest

in the year following the year of grant and settle in shares.

In 2025 and 2024, each director received a base stock unit

award of $140,000 representing a portion of their annual

retainer. Each director is permitted to increase the portion

paid as stock units.

   

	148	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 18—STOCK OPTIONS AND RESTRICTED STOCK

A summary of restricted and performance stock and unit activity during the year ended December 31, 2025, is presented

below.

Table 8.18.1

RESTRICTED AND PERFORMANCE EQUITY AWARD ACTIVITY

		Shares/ Units (a)		Weighted average grant date fair value (per share) (b)
January 1, 2025		11,840,085		$15.71
Shares/units granted		2,655,176		21.15
Shares/units vested/distributed		(3,660,353)		17.83
Shares/units canceled		(184,658)		15.29
December 31, 2025		10,650,250		$16.35

(a) Includes only units that settle in shares; nonvested performance units are included at 100% payout level.

(b) The weighted average grant date fair value for shares/units granted in 2024 and 2023 was $15.24 and $16.08, respectively.

On December 31, 2025, there was $84 million of

unrecognized compensation cost related to nonvested

restricted stock awards. That cost is expected to be

recognized over a weighted-average period of two years.

The total grant date fair value of shares vested during

2025, 2024 and 2023, was $64 million, $65 million, and

$32 million, respectively.

Stock option awards

In 2021, FHN ended its only remaining stock option

program, making only one grant related to a 2020

commitment. Options under that program, for executives,

had service-vesting requirements and have seven-year

terms.

In the past, option programs varied widely in their uses

and terms. Of the old-program options, several options

granted to executives under the ECP remain outstanding

today. All options granted since 2005 provide for the

issuance of FHN common stock at a price fixed at its fair

market value on the grant date. Except for converted

options and a special retention stock option award to the

CEO in 2016, all options granted since 2008 vested fully no

later than the fourth anniversary of grant, and all such

options expire seven years from the grant date. CBF

converted options and IBKC converted options granted

prior to November 3, 2019 (the IBKC merger agreement

date) are fully vested and expire ten years from the grant

date. IBKC converted options granted subsequent to the

merger agreement fully vested no later than the fifth

anniversary of the grant date and expire ten years from

the grant date. The 2016 retention award vested on the

fourth through sixth anniversaries of grant and had a

seven-year term.

The summary of stock option activity for the year ended

December 31, 2025, is shown below.

Table 8.18.2

STOCK OPTION ACTIVITY

		Options Outstanding		Weighted Average Exercise Price (per share)		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (millions)
January 1, 2025		958,622		$16.16
Options granted		—		—
Options exercised		(380,202)		16.50
Options expired/canceled		(265)		11.67
December 31, 2025		578,155		$15.94		1.76		$5
Options exercisable		578,155		15.94		1.76		5
Options expected to vest		—		—		—		—

The total intrinsic value of options exercised during 2025,

2024 and 2023 was $2 million, $2 million, and $4 million,

respectively.

On December 31, 2025, there was no unrecognized

compensation cost related to nonvested stock options.

FHN did not grant or convert stock options in 2025, 2024

and 2023.

Expected lives of options granted are determined based

on the vesting period, historical exercise patterns and

contractual term of the options. FHN uses a blend of

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 18—STOCK OPTIONS AND RESTRICTED STOCK

historical and implied volatility in determining expected

volatility. A portion of the weighted average volatility rate

is derived by compiling daily closing stock prices over a

historical period approximating the expected lives of the

options. Additionally, because of market volatility due to

economic conditions and the impact on stock prices of

financial institutions, FHN also incorporates a measure of

implied volatility so as to incorporate more recent market

conditions in the estimation of future volatility.

Compensation Cost

The compensation cost that has been included in the

Consolidated Statements of Income pertaining to stock-

based awards was $61 million, $59 million, and $36

million for 2025, 2024, and 2023, respectively. The

corresponding total income tax benefits recognized were

$15 million, $14 million and $8 million in 2025, 2024, and

2023, respectively.

Authorization

Consistent with Tennessee state law, only authorized, but

unissued, stock may be utilized in connection with any

issuance of FHN common stock which may be required as

a result of stock-based compensation awards. Prior

authorizations to repurchase shares issued in connection

with compensation plans expired on December 31, 2023.

After 2023, as authorized by FHN's Board and the Board's

Compensation Committee, FHN continued to make

automatic stock purchases by withholding shares

associated with stock-based awards to cover tax

obligations associated with those awards. Those limited,

off-market purchases are not connected to a traditional,

announced purchase program. Automatic tax withholding

purchases are not subject to trading blackouts affecting

senior executives and the general purchase program.

   

	150	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 19—BUSINESS SEGMENT INFORMATION

Note 19—Business Segment Information

During 2024, FHN reorganized its internal management

structure and, accordingly, reclassified its reportable

business segments. Prior to the 2024 reclassification, FHN's

reportable segments were: (1) Regional Banking, (2)

Specialty Banking, and (3) Corporate. As a result of the

2024 reclassification, FHN revised its reportable segments

as described below. Segment information for prior periods

has been reclassified to conform to the current period

presentation.

FHN's operating segments are composed of the following:

• Commercial, Consumer & Wealth segment offers

financial products and services, including traditional

lending and deposit taking, to commercial and

consumer clients primarily in the southern U.S. and

other selected markets. Commercial, Consumer &

Wealth also consists of lines of business that deliver

product offerings and services with niche industry

knowledge including asset-based lending, commercial

real estate, equipment finance/leasing, energy,

international banking, healthcare, and transportation

and logistics. Additionally, Commercial, Consumer &

Wealth provides investment, wealth management,

financial planning, trust and asset management

services for consumer clients as well as delivering

treasury management solutions, loan syndications,

and corporate banking services.

• Wholesale segment consists of lines of business that

deliver product offerings and services with

differentiated industry knowledge. Wholesale’s lines

of business include mortgage warehouse lending,

franchise finance, correspondent banking, and

mortgage. Additionally, Wholesale has a line of

business focused on fixed income securities sales,

trading, underwriting, and strategies for institutional

clients in the U.S. and abroad, as well as loan sales,

portfolio advisory services, and derivative sales.

• Corporate segment consists primarily of corporate

support functions including risk management, audit,

accounting, finance, executive office, and corporate

communications. Shared support services such as

human resources, marketing, properties, technology,

credit risk and bank operations are allocated to the

activities of Commercial, Consumer & Wealth,

Wholesale, and Corporate.  Additionally, the

Corporate segment includes centralized management

of capital and funding to support the business

activities of the company including management of

balance sheet funding, liquidity, and capital

management and allocation. The Corporate segment

also includes the revenue and expense associated with

run-off businesses such as pre-2009 mortgage banking

elements, run-off consumer and trust preferred loan

portfolios, and other exited businesses.

Basis of Presentation

Results of individual segments are presented based on

FHN's internal management reporting practices. There is

no comprehensive, authoritative body of guidance for

management accounting equivalent to GAAP; therefore,

the financial results of FHN's individual segments are not

necessarily comparable with similar information for any

other company.

Periodically, FHN adapts its segments to reflect managerial

or strategic changes. FHN may also modify its methodology

of allocating expenses and equity among segments, which

could change historical segment results. Business segment

revenue, expense, asset, and equity levels reflect those

which are specifically identifiable, or which are allocated

based on an internal allocation method. Because the

allocations are based on internally developed assignments

and allocations, to an extent they are subjective. Generally,

all assignments and allocations have been consistently

applied for all periods presented.

Funds Transfer Pricing

Net interest income in segment results reflects FHN's

internal funds transfer pricing methodology which is

designed to consider interest rate and liquidity risks. Under

this methodology, assets receive a funding charge while

liabilities and capital receive a funding credit based on

market interest rates, product characteristics, and other

factors. 

The transfer pricing framework considers the application

of funding curves and methodologies consistently across

the balance sheet. A residual gain or loss from funds

transfer pricing operations is retained within Corporate.

Segment Allocations

Financial results are presented, to the extent practicable,

as if each segment operated on a stand-alone basis and

include expense allocations for corporate overhead

services used by the segments.

FHN has allocated the ALLL and the reserve for unfunded

lending commitments based on the loan exposures within

each segment’s portfolio.

The Company's Chief Operating Decision Maker ("CODM")

is comprised of the chief executive officer and segment

leadership.

For both the Commercial, Consumer & Wealth and

Wholesale segments, the CODM uses both Pre-Provision

Net Revenue ("PPNR") and Pre-Tax Net Income ("PTNI") to

evaluate performance and allocate resources. The

measure of PPNR focuses on the Company's primary

businesses principally by excluding the volatility associated

with credit risk estimates due to the CECL life-of-loan

estimation requirement, which is highly sensitive to

changes in economic forecasts. PPNR also represents a

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 19—BUSINESS SEGMENT INFORMATION

metric utilized by regulatory agencies in stress testing

assessments. PTNI is used to incorporate credit risk

estimates for a holistic view of pre-tax results in the

evaluation of segment performance.

For the Corporate segment, the CODM uses after-tax

income to evaluate performance and allocate resources.

After-tax income is most relevant for the Corporate

segment because of minimal credit risk and inclusion of

the impacts from all consolidated tax matters, which are

not allocated, in addition to all other methodologies

affecting pre-tax income among reported segments (e.g.,

FTP and cost allocations).

The following table presents financial information for each

reportable business segment for the years ended

December 31.

Table 8.19.1

SEGMENT FINANCIAL INFORMATION

		2025
(Dollars in millions)		Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Interest income		$3,317		$555		$314		$4,186
Interest expense		1,156		107		301		1,564
Funds transfer pricing		408		(215)		(193)		—
Net interest income (expense)		2,569		233		(180)		2,622
Noninterest income		464		256		77		797
Total revenues		3,033		489		(103)		3,419
Noninterest expense (c)(d)		1,443		320		311		2,074
Pre-provision net revenue (f)		1,590		169		(414)		1,345
Provision for credit losses		50		12		3		65
Income (loss) before income taxes		1,540		157		(417)		1,280
Income tax expense (benefit)		367		37		(122)		282
Net income (loss)		$1,173		$120		$(295)		$998
Average assets		$58,820		$9,360		$13,839		$82,019
Depreciation and amortization		19		7		38		64
Expenditures for long-lived assets		18		1		9		28

		2024
(Dollars in millions)		Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Interest income		$3,538		$525		$289		$4,352
Interest expense		1,413		125		303		1,841
Funds transfer pricing		406		(206)		(200)		—
Net interest income (expense)		2,531		194		(214)		2,511
Noninterest income (a)		461		230		(12)		679
Total revenues		2,992		424		(226)		3,190
Noninterest expense (c)(d)		1,417		299		319		2,035
Pre-provision net revenue (f)		1,575		125		(545)		1,155
Provision for credit losses		158		3		(11)		150
Income (loss) before income taxes		1,417		122		(534)		1,005
Income tax expense (benefit)		334		29		(152)		211
Net income (loss)		$1,083		$93		$(382)		$794
Average assets		$59,398		$8,120		$14,304		$81,822
Depreciation and amortization		38		6		57		101
Expenditures for long-lived assets		26		1		18		45

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 19—BUSINESS SEGMENT INFORMATION

		2023
(Dollars in millions)		Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Interest income		$3,286		$478		$336		$4,100
Interest expense		1,115		100		345		1,560
Funds transfer pricing		312		(201)		(111)		—
Net interest income (expense)		2,483		177		(120)		2,540
Noninterest income (a)		448		174		305		927
Total revenues		2,931		351		185		3,467
Noninterest expense (b)(c)(d)		1,372		277		430		2,079
Pre-provision net revenue (f)		1,559		74		(245)		1,388
Provision for credit losses		260		15		(15)		260
Income (loss) before income taxes		1,299		59		(230)		1,128
Income tax expense (benefit) (e)		305		14		(107)		212
Net income (loss)		$994		$45		$(123)		$916
Average assets		$58,109		$7,581		$15,993		$81,683
Depreciation and amortization		34		7		61		102
Expenditures for long-lived assets		16		1		17		34

(a) 2024 includes a $91 million loss on securities following the restructuring of a portion of the AFS securities portfolio. 2023 includes a $225 million gain on

merger termination and a $6 million loss on equities valuation adjustments in the Corporate segment and a $9 million gain on an FHN Financial asset

disposition in the Wholesale segment.

(b) 2023 includes $51 million in merger and integration expenses related to the TD Transaction in the Corporate Segment.

(c) 2025 includes an FDIC special assessment expense credit of $9 million and a $4 million expense credit related to an accrual release in deferred

compensation in the Corporate segment. 2024 includes $14 million of restructuring costs and an FDIC special assessment of $9 million in the Corporate

segment. 2023 includes $10 million of restructuring costs, an FDIC special assessment of $68 million, and a $50 million contribution to the First Horizon

Foundation in the Corporate segment.

(d) 2025, 2024, and 2023 include $25 million, $15 million, and $15 million, respectively, in derivative valuation adjustments related to prior Visa Class B share

sales in the Corporate segment.

(e) 2023 includes $24 million in expense related to the surrender of bank-owned life insurance policies and a $59 million benefit from merger-related tax

items in the Corporate segment.

(f) Pre-provision net revenue is a non-GAAP measure and is reconciled to income (loss) before income taxes (GAAP) in this table.

   

	153	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 19—BUSINESS SEGMENT INFORMATION

The following table presents a disaggregation of FHN’s noninterest income by major product line and reportable segment for

the years ended December 31, 2025, 2024, and 2023.

Table 8.19.2

NONINTEREST INCOME DETAIL BY SEGMENT

		December 31, 2025
(Dollars in millions)		Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest income:
Fixed income (a)		$—		$206		$—		$206
Deposit transactions and cash management		158		3		8		169
Brokerage, management fees and commissions		105		—		—		105
Card and digital banking fees		64		—		10		74
Other service charges and fees		57		3		—		60
Trust services and investment management		50		—		1		51
Mortgage banking income		1		41		1		43
Securities gains (losses), net (b)		—		—		1		1
Other income (c)		29		3		56		88
Total noninterest income		$464		$256		$77		$797
		December 31, 2024
(Dollars in millions)		Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest income:
Fixed income (a)		$—		$187		$—		$187
Deposit transactions and cash management		163		4		9		176
Brokerage, management fees and commissions		101		—		—		101
Card and digital banking fees		67		—		10		77
Other service charges and fees		48		2		1		51
Trust services and investment management		47		—		1		48
Mortgage banking income		1		33		1		35
Securities gains (losses), net (b)		—		—		(89)		(89)
Other income (c)		34		4		55		93
Total noninterest income		$461		$230		$(12)		$679

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 19—BUSINESS SEGMENT INFORMATION

		December 31, 2023
(Dollars in millions)		Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest income:
Fixed income (a)		$—		$134		$(1)		$133
Deposit transactions and cash management		165		4		10		179
Brokerage, management fees and commissions		90		—		—		90
Card and digital banking fees		67		—		10		77
Other service charges and fees		51		3		—		54
Trust services and investment management		46		—		1		47
Mortgage banking income		1		21		1		23
Gain on merger termination		—		—		225		225
Securities gains (losses), net (b)		—		—		(4)		(4)
Other income (c)		28		12		63		103
Total noninterest income		$448		$174		$305		$927

(a) 2025, 2024, and 2023 include $40 million, $42 million, and $42 million, respectively, of underwriting, portfolio advisory, and other noninterest income in scope of ASC 606,

"Revenue from Contracts with Customers."

(b) Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile total noninterest income.

(c) Includes letter of credit fees and insurance commissions in scope of ASC 606.

   

	155	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 19—BUSINESS SEGMENT INFORMATION

The following table presents a disaggregation of FHN’s noninterest expense by major product line and reportable segment for

the years ended December 31, 2025, 2024, and 2023.

Table 8.19.3

NONINTEREST EXPENSE DETAIL BY SEGMENT

	December 31, 2025
(Dollars in millions)		Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest expense:
Personnel expense		$542		$214		$403		$1,159
Net occupancy expense		77		9		53		139
Computer software		32		7		99		138
Operations services		17		23		56		96
Legal and professional fees		17		4		65		86
Advertising and public relations		7		1		46		54
Deposit insurance expense		—		—		42		42
Contract employment and outsourcing		5		4		29		38
Amortization of intangible assets		35		1		2		38
Contributions		1		—		25		26
Other expense		80		27		151		258
Cost allocations		630		30		(660)		—
Total noninterest expense		$1,443		$320		$311		$2,074

	December 31, 2024
(Dollars in millions)		Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest expense:
Personnel expense		$539		$196		$402		$1,137
Net occupancy expense		76		9		45		130
Computer software		32		5		84		121
Operations services		17		22		55		94
Legal and professional fees		11		3		50		64
Advertising and public relations		7		1		40		48
Deposit insurance expense		—		—		64		64
Contract employment and outsourcing		5		3		43		51
Amortization of intangible assets		39		2		3		44
Contributions		2		—		16		18
Other expense		96		27		141		264
Cost allocations		593		31		(624)		—
Total noninterest expense		$1,417		$299		$319		$2,035

   

	156	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 19—BUSINESS SEGMENT INFORMATION

	December 31, 2023
(Dollars in millions)		Commercial, Consumer & Wealth		Wholesale		Corporate		Consolidated
Noninterest expense:
Personnel expense		$526		$178		$396		$1,100
Net occupancy expense		72		9		42		123
Computer software		29		5		77		111
Operations services		19		25		43		87
Legal and professional fees		10		3		36		49
Advertising and public relations		7		1		63		71
Deposit insurance expense		—		—		122		122
Contract employment and outsourcing		6		4		39		49
Amortization of intangible assets		42		2		3		47
Contributions		2		—		59		61
Other expense		94		27		138		259
Cost allocations		565		23		(588)		—
Total noninterest expense		$1,372		$277		$430		$2,079

   

	157	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 20—VARIABLE INTEREST ENTITIES

Note 20—Variable Interest Entities

FHN makes equity investments in various entities that are

considered VIEs, as defined by GAAP. A VIE typically does

not have sufficient equity at risk to finance its activities

without additional subordinated financial support from

other parties. The Company’s variable interest arises from

contractual, ownership or other monetary interests in the

entity, which change with fluctuations in the fair value of

the entity's net assets. FHN consolidates a VIE if FHN is the

primary beneficiary of the entity. FHN is the primary

beneficiary of a VIE if FHN's variable interest provides it

with the power to direct the activities that most

significantly impact the VIE and the right to receive

benefits (or the obligation to absorb losses) that could

potentially be significant to the VIE. To determine whether

or not a variable interest held could potentially be

significant to the VIE, FHN considers both qualitative and

quantitative factors regarding the nature, size, and form

of its involvement with the VIE. FHN assesses whether or

not it is the primary beneficiary of a VIE on an ongoing

basis.

Consolidated Variable Interest Entities

FHN has established certain rabbi trusts related to

deferred compensation plans offered to its employees.

FHN contributes employee cash compensation deferrals to

the trusts and directs the underlying investments made by

the trusts. The assets of these trusts are available to FHN’s

creditors only in the event that FHN becomes insolvent.

These trusts are considered VIEs as there is no equity at

risk in the trusts since FHN provided the equity interest to

its employees in exchange for services rendered. FHN is

considered the primary beneficiary of the rabbi trusts as it

has the power to direct the activities that most

significantly impact the economic performance of the

rabbi trusts through its ability to direct the underlying

investments made by the trusts. Additionally, FHN could

potentially receive benefits or absorb losses that are

significant to the trusts due to its right to receive any asset

values in excess of liability payoffs and its obligation to

fund any liabilities to employees that are in excess of a

rabbi trust’s assets.

The following table summarizes the carrying value of

assets and liabilities associated with rabbi trusts used for

deferred compensation plans which are consolidated by

FHN as of December 31, 2025 and 2024.

Table 8.20.1

CONSOLIDATED VIEs

(Dollars in millions)		December 31, 2025		December 31, 2024
Assets:
Other assets		$202		$195
Liabilities:
Other liabilities		$176		$165

Nonconsolidated Variable Interest Entities

Tax Credit Investments

Through designated wholly-owned subsidiaries, First

Horizon Bank makes equity investments as a limited

partner in various partnerships that sponsor affordable

housing projects utilizing the LIHTC. Through designated

subsidiaries, First Horizon Bank periodically makes equity

investments as a non-managing member in various LLCs

that sponsor community development projects utilizing

the NMTC. First Horizon Bank also makes equity

investments as a limited partner or non-managing

member in entities that receive historic tax credits. The

purpose of these investments is to achieve a satisfactory

return on capital and to support FHN’s community

reinvestment initiatives. These entities are considered

VIEs as First Horizon Bank's subsidiaries represent the

holders of the equity investment at risk, but do not have

the ability to direct the activities that most significantly

affect the performance of the entities. FHN is therefore

not the primary beneficiary of any of these entities.

Accordingly, FHN does not consolidate these VIEs and

accounts for these investments in other assets on the

Consolidated Balance Sheets.

FHN accounts for qualifying LIHTC investments under the

PAM. Effective for periods after 2023, all LIHTC

investments qualify for the PAM. Commencing in 2024,

FHN determined that its equity investments in NMTC and

historic tax credit entities qualify for the PAM and made

the election to apply the PAM for these programs.

Expenses associated with non-qualifying LIHTC

investments were not significant for 2023.

The following table summarizes the impact to income tax

expense on the Consolidated Statements of Income for

the years ended December 31, 2025, 2024, and 2023 for

investments accounted for under the PAM. The impact of

these investments is included in other operating activities,

net in the Consolidated Statements of Cash Flows.

Table 8.20.2

TAX CREDIT IMPACTS ON TAX EXPENSE

(Dollars in millions)		2025		2024		2023
Income tax expense (benefit):
Amortization of qualifying investments		$66		$65		$54
Tax credits		(78)		(70)		(55)
Other tax benefits related to qualifying investments		(5)		(9)		(13)

   

	158	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 20—VARIABLE INTEREST ENTITIES

Small Issuer Trust Preferred Holdings

First Horizon Bank holds variable interests in trusts which

have issued mandatorily redeemable preferred capital

securities (“trust preferreds”) for smaller banking and

insurance enterprises. First Horizon Bank has no voting

rights for the trusts’ activities. The trusts’ only assets are

junior subordinated debentures of the issuing enterprises.

The creditors of the trusts hold no recourse to the assets

of First Horizon Bank. Since First Horizon Bank is solely a

holder of the trusts’ securities, it has no rights which

would give it the power to direct the activities that most

significantly impact the trusts’ economic performance and

thus it is not considered the primary beneficiary of the

trusts. First Horizon Bank has no contractual requirements

to provide financial support to the trusts.

On-Balance Sheet Trust Preferred Securitization

In 2007, First Horizon Bank executed a securitization of

certain small issuer trust preferreds for which the

underlying trust meets the definition of a VIE, as the

holders of the equity investment at risk do not have the

power through voting rights, or similar rights, to direct the

activities that most significantly impact the entity’s

economic performance. Since First Horizon Bank did not

retain servicing or other decision-making rights, First

Horizon Bank is not the primary beneficiary as it does not

have the power to direct the activities that most

significantly impact the trust’s economic performance.

Accordingly, First Horizon Bank has accounted for the

funds received through the securitization as a term

borrowing in its Consolidated Balance Sheets. First

Horizon Bank has no contractual requirements to provide

financial support to the trust.

Holdings in Agency Mortgage-Backed Securities

FHN holds securities issued by various Agency

securitization trusts. Based on their restrictive nature, the

trusts meet the definition of a VIE since the holders of the

equity investments at risk do not have the power through

voting rights, or similar rights, to direct the activities that

most significantly impact the entities’ economic

performance. FHN could potentially receive benefits or

absorb losses that are significant to the trusts based on

the nature of the trusts’ activities and the size of FHN’s

holdings. However, FHN is solely a holder of the trusts’

securities and does not have the power to direct the

activities that most significantly impact the trusts’

economic performance and is not considered the primary

beneficiary of the trusts. FHN has no contractual

requirements to provide financial support to the trusts.

Commercial Loan Modifications to Borrowers

Experiencing Financial Difficulty

For certain troubled commercial loans, First Horizon Bank

modifies the terms of the borrower’s debt in an effort to

increase the probability of receipt of amounts

contractually due. Following a modification to borrowers

experiencing financial difficulty, the borrower entity

typically meets the definition of a VIE as the initial

determination of whether an entity is a VIE must be

reconsidered as events have proven that the entity’s

equity is not sufficient to permit it to finance its activities

without additional subordinated financial support or a

restructuring of the terms of its financing. As First Horizon

Bank does not have the power to direct the activities that

most significantly impact such troubled commercial

borrowers’ operations, it is not considered the primary

beneficiary even in situations where, based on the size of

the financing provided, First Horizon Bank is exposed to

potentially significant benefits and losses of the borrowing

entity. First Horizon Bank has no contractual requirements

to provide financial support to the borrowing entities

beyond certain funding commitments established upon

restructuring of the terms of the debt that allows for

preparation of the underlying collateral for sale.

Proprietary Trust Preferred Issuances

In conjunction with its acquisitions, FHN acquired junior

subordinated debt underlying multiple issuances of trust

preferred debt. All of the trusts are considered VIEs

because the ownership interests from the capital

contributions to these trusts are not considered “at risk”

in evaluating whether the holders of the equity

investments at risk in the trusts have the ability to direct

the activities that most significantly impact the entities’

economic performance. Thus, FHN cannot be the trusts’

primary beneficiary because its ownership interests in the

trusts are not considered variable interests as they are not

considered “at risk”. Consequently, none of the trusts are

consolidated by FHN.

   

	159	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 20—VARIABLE INTEREST ENTITIES

The following tables summarize FHN’s nonconsolidated VIEs as of December 31, 2025 and 2024.

Table 8.20.3

NONCONSOLIDATED VIEs AT DECEMBER 31, 2025

(Dollars in millions)		Maximum Loss Exposure		Liability Recognized		Classification
Type:
Low income housing partnerships		$733		$260		(a)
Other tax credit investments (b)		92		74		Other assets
Small issuer trust preferred holdings (c)		166		—		Loans and leases
On-balance sheet trust preferred securitization		25		89		(d)
Holdings of agency mortgage-backed securities (c)		8,405		—		(e)
Commercial loan modifications to borrowers experiencing financial difficulty (f)		478		—		Loans and leases
Proprietary trust preferred issuances (g)		—		167		Term borrowings

(a)Maximum loss exposure represents $473 million of current investments and $260 million of accrued contractual funding commitments. Current

investments are recognized in other assets. Accrued funding commitments represent unconditional contractual obligations for future funding events and

are recognized in other liabilities. FHN currently expects to be required to fund substantially all of these accrued commitments by the end of 2026.

(b)Maximum loss exposure represents the value of current investments.

(c)Maximum loss exposure represents the value of current investments. A liability is not recognized as FHN is solely a holder of the trusts’ securities.

(d)Includes $113 million classified as loans and leases and $1 million classified as trading securities, which are offset by $89 million classified as term

borrowings.

(e)Includes $678 million classified as trading securities, $1.2 billion classified as securities held to maturity, and $6.5 billion classified as securities available

for sale.

(f)Maximum loss exposure represents $478 million of current receivables with $1 million in additional contractual funding commitments on loans related to

commercial loan modifications to borrowers experiencing financial difficulty.

(g)No exposure to loss due to nature of FHN's involvement.

Table 8.20.4

NONCONSOLIDATED VIEs AT DECEMBER 31, 2024

(Dollars in millions)		Maximum Loss Exposure		Liability Recognized		Classification
Type:
Low income housing partnerships		$617		$222		(a)
Other tax credit investments (b)		90		73		Other assets
Small issuer trust preferred holdings (c)		171		—		Loans and leases
On-balance sheet trust preferred securitization		26		88		(d)
Holdings of agency mortgage-backed securities (c)		8,017		—		(e)
Commercial loan modifications to borrowers experiencing financial difficulty (f)		381		—		Loans and leases
Proprietary trust preferred issuances (g)		—		167		Term borrowings

(a) Maximum loss exposure represents $395 million of current investments and $222 million of accrued contractual funding commitments. Current

investments are recognized in other assets. Accrued funding commitments represent unconditional contractual obligations for future funding events and

are recognized in other liabilities. FHN currently expects to be required to fund substantially all of these accrued commitments by the end of 2026.

(b) Maximum loss exposure represents the value of current investments.

(c) Maximum loss exposure represents the value of current investments. A liability is not recognized as FHN is solely a holder of the trusts’ securities.

(d) Includes $113 million classified as loans and leases and $2 million classified as trading securities, which are offset by $88 million classified as term

borrowings.

(e) Includes $278 million classified as trading securities, $1.3 billion classified as securities held to maturity, and $6.5 billion classified as securities available

for sale.

(f) Maximum loss exposure represents $381 million of current receivables with no additional contractual funding commitments on loans related to

commercial loan modifications to borrowers experiencing financial difficulty.

(g) No exposure to loss due to nature of FHN's involvement.

   

	160	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 21—DERIVATIVES

Note 21—Derivatives

In the normal course of business, FHN utilizes various

financial instruments (including derivative contracts and

credit-related agreements) through its fixed income and

risk management operations, as part of its risk

management strategy and as a means to meet clients’

needs. Derivative instruments are subject to credit and

market risks in excess of the amount recorded on the

balance sheet as required by GAAP. The contractual or

notional amounts of these financial instruments do not

necessarily represent the amount of credit or market risk.

However, they can be used to measure the extent of

involvement in various types of financial instruments.

Controls and monitoring procedures for these instruments

have been established and are routinely reevaluated. The

ALCO controls, coordinates, and monitors the usage and

effectiveness of these financial instruments.

Credit risk represents the potential loss that may occur if a

party to a transaction fails to perform according to the

terms of the contract. The measure of credit exposure is

the replacement cost of contracts with a positive fair

value. FHN manages credit risk by entering into financial

instrument transactions through national exchanges,

primary dealers or approved counterparties, and by using

mutual margining and master netting agreements

whenever possible to limit potential exposure. FHN also

maintains collateral posting requirements with certain

counterparties to limit credit risk. Daily margin posted or

received with central clearinghouses is considered a legal

settlement of the related derivative contracts which

results in a net presentation for each contract in the

Consolidated Balance Sheets. Treatment of daily margin as

a settlement has no effect on hedge accounting or gains/

losses for the applicable derivative contracts. On

December 31, 2025 and 2024, respectively, FHN had $243

million and $541 million of cash receivables and $20

million and $25 million of cash payables related to

collateral posting under master netting arrangements,

inclusive of collateral posted related to contracts with

adjustable collateral posting thresholds and over-

collateralized positions, with derivative counterparties.

With exchange-traded contracts, the credit risk is limited

to the clearinghouse used. For non-exchange traded

instruments, credit risk may occur when there is a gain in

the fair value of the financial instrument and the

counterparty fails to perform according to the terms of

the contract and/or when the collateral proves to be of

insufficient value. See additional discussion regarding

master netting agreements and collateral posting

requirements later in this note under the heading “Master

Netting and Similar Agreements.” Market risk represents

the potential loss due to the decrease in the value of a

financial instrument caused primarily by changes in

interest rates or the prices of debt instruments. FHN

manages market risk by establishing and monitoring limits

on the types and degree of risk that may be undertaken.

FHN continually measures this risk through the use of

models that measure value-at-risk and earnings-at-risk.

Derivative Instruments

FHN enters into various derivative contracts both to

facilitate client transactions and as a risk management

tool. Where contracts have been created for clients, FHN

enters into upstream transactions with dealers to offset its

risk exposure. Contracts with dealers that require central

clearing are novated to a clearing agent who becomes

FHN’s counterparty. Derivatives are also used as a risk

management tool to hedge FHN’s exposure to changes in

interest rates or other defined market risks.

Forward contracts are over-the-counter contracts where

two parties agree to purchase and sell a specific quantity

of a financial instrument at a specified price, with delivery

or settlement at a specified date. Futures contracts are

exchange-traded contracts where two parties agree to

purchase and sell a specific quantity of a financial

instrument at a specified price, with delivery or settlement

at a specified date. Interest rate option contracts give the

purchaser the right, but not the obligation, to buy or sell a

specified quantity of a financial instrument, at a specified

price, during a specified period of time. Caps and floors

are options that are linked to a notional principal amount

and an underlying indexed interest rate. Interest rate

swaps involve the exchange of interest payments at

specified intervals between two parties without the

exchange of any underlying principal. Swaptions are

options on interest rate swaps that give the purchaser the

right, but not the obligation, to enter into an interest rate

swap agreement during a specified period of time.

Trading Activities

FHNF trades U.S. Treasury, U.S. Agency, government-

guaranteed loan, mortgage-backed, corporate and

municipal fixed income securities, and other securities for

distribution to clients. When these securities settle on a

delayed basis, they are considered forward contracts.

FHNF also enters into interest rate contracts, including

caps, swaps, and floors, for its clients. In addition, FHNF

enters into futures and option contracts to economically

hedge interest rate risk associated with a portion of its

securities inventory. These transactions are measured at

fair value, with changes in fair value recognized in

noninterest income. Related assets and liabilities are

recorded on the Consolidated Balance Sheets as derivative

assets and derivative liabilities within other assets and

other liabilities. The FHNF Risk Committee and the Credit

Risk Management Committee collaborate to mitigate

credit risk related to these transactions. Credit risk is

controlled through credit approvals, risk control limits,

and ongoing monitoring procedures. Total trading

revenues were $167 million, $154 million and $97 million

for the years ended December 31, 2025, 2024 and 2023,

respectively. Trading revenues are inclusive of both

   

	161	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 21—DERIVATIVES

derivative and non-derivative financial instruments and

are included in fixed income on the Consolidated

Statements of Income.

The following table summarizes derivatives associated

with FHNF's trading activities as of December 31, 2025

and 2024.

Table 8.21.1

DERIVATIVES ASSOCIATED WITH TRADING

		December 31, 2025
(Dollars in millions)		Notional		Assets		Liabilities
Customer interest rate contracts		$4,301		$22		$104
Offsetting upstream interest rate contracts		4,446		70		22
Forwards and futures purchased		1,937		7		—
Forwards and futures sold		2,210		—		8

		December 31, 2024
(Dollars in millions)		Notional		Assets		Liabilities
Customer interest rate contracts		$4,096		$8		$190
Offsetting upstream interest rate contracts		4,265		134		9
Forwards and futures purchased		1,421		1		6
Forwards and futures sold		1,426		7		—

Interest Rate Risk Management

FHN’s ALCO focuses on managing market risk by

controlling and limiting earnings volatility attributable to

changes in interest rates. Interest rate risk exists to the

extent that interest-earning assets and interest-bearing

liabilities have different maturity or repricing

characteristics. FHN uses derivatives, primarily swaps, that

are designed to moderate the impact on earnings as

interest rates change. Interest paid or received for swaps

utilized by FHN to hedge the fair value of long-term debt is

recognized as an adjustment of the interest expense of

the liabilities whose risk is being managed. FHN’s interest

rate risk management policy is to use derivatives to hedge

interest rate risk or market value of assets or liabilities,

not to speculate. In addition, FHN has entered into certain

interest rate swaps and caps as a part of a product

offering to commercial clients that includes customer

derivatives paired with upstream offsetting market

instruments that, when completed, are designed to

mitigate interest rate risk. These contracts do not qualify

for hedge accounting and are measured at fair value with

gains or losses included in current earnings in noninterest

expense on the Consolidated Statements of Income.

The following table summarizes FHN’s derivatives

associated with interest rate risk management activities as

of December 31, 2025 and 2024.

Table 8.21.2

DERIVATIVES ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT

		December 31, 2025
(Dollars in millions)		Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts		$7,851		$43		$185
Offsetting upstream interest rate contracts		8,151		184		43

		December 31, 2024
(Dollars in millions)		Notional		Assets		Liabilities
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts		$8,301		$10		$372
Offsetting upstream interest rate contracts		8,301		369		11

   

	162	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 21—DERIVATIVES

The following table summarizes gains (losses) on FHN’s derivatives associated with interest rate risk management activities for

the years ended December 31, 2025, 2024, and 2023.

Table 8.21.3

DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH INTEREST RATE RISK MANAGEMENT

		Year Ended December 31,
		2025		2024		2023
(Dollars in millions)		Gains (Losses)		Gains (Losses)		Gains (Losses)
Customer Interest Rate Contracts Hedging
Hedging Instruments and Hedged Items:
Customer interest rate contracts (a)		$220		$10		$195
Offsetting upstream interest rate contracts (a)		(220)		(10)		(195)

(a) Gains (losses) included in other expense within the Consolidated Statements of Income.

Cash Flow Hedges

Prior to 2021, FHN entered into pay floating, receive fixed

interest rate swaps designed to manage its exposure to

the variability in cash flows related to interest payments

on debt instruments. The debt instruments primarily

consist of held-to-maturity commercial loans that have

variable interest payments that historically were based on

1-Month LIBOR. In second quarter 2023, the remaining

hedge was revised to reference 1-Month Term SOFR after

the cessation of LIBOR-based cash flows. This hedge

matured in first quarter 2024. In conjunction with the IBKC

merger, FHN acquired interest rate contracts (floors and

collars) which were re-designated as cash flow hedges.

The debt instruments associated with these hedges also

primarily consisted of held-to-maturity commercial loans

that had variable interest payments that were based on 1-

Month LIBOR. The last hedge acquired in conjunction with

the IBKC merger matured in second quarter 2023.

In 2022, FHN entered into interest rate contracts (floors

and swaps) which have been designated as cash flow

hedges. These hedges reference 1-Month Term SOFR and

FHN made certain elections under ASU 2020-04 to

facilitate qualification for hedge accounting during the

time that hedged items transitioned away from 1-Month

LIBOR.

In a cash flow hedge, the entire change in the fair value of

the interest rate derivatives included in the assessment of

hedge effectiveness is initially recorded in OCI and is

subsequently reclassified from OCI to current period

earnings (interest income or interest expense) in the same

period that the hedged item affects earnings.

The following tables summarize FHN’s derivative activities

associated with cash flow hedges as of December 31, 2025

and 2024.

Table 8.21.4

DERIVATIVES ASSOCIATED WITH CASH FLOW HEDGES

		December 31, 2025
(Dollars in millions)		Notional		Assets		Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts		$5,000		$—		$14
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)		N/A		$5,000		N/A

		December 31, 2024
(Dollars in millions)		Notional		Assets		Liabilities
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts		$5,000		$—		$67
Hedged Items:
Variability in cash flows related to debt instruments (primarily loans)		N/A		$5,000		N/A

   

	163	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 21—DERIVATIVES

The following table summarizes gains (losses) on FHN’s derivatives associated with cash flow hedges for the years ended

December 31, 2025, 2024, and 2023.

Table 8.21.5

DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH CASH FLOW HEDGES

		Year Ended December 31,
		2025		2024		2023
(Dollars in millions)		Gains (Losses)		Gains (Losses)		Gains (Losses)
Cash Flow Hedges
Hedging Instruments:
Interest rate contracts (a)		$69		$(19)		$45
Gain (loss) recognized in other comprehensive income (loss)		17		(63)		(5)
Gain (loss) reclassified from AOCI into interest income		35		49		52

(a) Approximately $7 million of pre-tax losses are expected to be reclassified into earnings in the next twelve months.

Other Derivatives

FHN has mortgage banking operations that include the

origination and sale of loans into the secondary market. As

part of the origination of loans, FHN enters into interest

rate lock commitments with borrowers. Additionally, FHN

enters into forward sales contracts with buyers for

delivery of loans at a future date. Both of these contracts

qualify as freestanding derivatives and are recognized at

fair value through earnings. The notional and fair values of

these contracts are presented in the table below.

Table 8.21.6

DERIVATIVES ASSOCIATED WITH MORTGAGE BANKING HEDGES

		December 31, 2025
(Dollars in millions)		Notional		Assets		Liabilities
Mortgage Banking Hedges
Option contracts written		$82		$1		$—
Forward contracts written		135		—		—

		December 31, 2024
(Dollars in millions)		Notional		Assets		Liabilities
Mortgage Banking Hedges
Option contracts written		$51		$—		$—
Forward contracts written		100		1		—

The following table summarizes gains (losses) on FHN's derivatives associated with mortgage banking activities for the years

ended December 31, 2025, 2024 and 2023.

Table 8.21.7

DERIVATIVE GAINS (LOSSES) ASSOCIATED WITH MORTGAGE BANKING HEDGES

			Year Ended December 31,
			2025		2024		2023
(Dollars in millions)			Gains (Losses)		Gains (Losses)		Gains (Losses)
Mortgage Banking Hedges
Option contracts written			$(2)		$1		$—
Forward contracts written			(1)		(2)		1

In conjunction with pre-2020 sales of Visa Class B shares,

FHN entered into derivative transactions whereby FHN

will make or receive cash payments whenever the

conversion ratio of the Visa Class B shares into Visa Class A

shares is adjusted. As of December 31, 2025 and 2024, the

derivative liabilities associated with the sales of Visa Class

B shares were $25 million and $15 million, respectively.

For the years ended December 31, 2025 and 2024, FHN

recognized $25 million and $15 million, respectively, in

derivative valuation adjustments related to prior sales of

Visa Class B shares. See Note 23 - Fair Value of Assets and

   

	164	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 21—DERIVATIVES

Liabilities for discussion of the valuation inputs and

processes for these Visa-related derivatives.

FHN utilizes cross-currency swaps and cross-currency

interest rate swaps to economically hedge its exposure to

foreign currency risk and interest rate risk associated with

non-U.S. dollar denominated loans. As of December 31,

2025 and 2024, these loans were valued at $19 million

and $16 million, respectively. The balance sheet amount

and the gains/losses associated with these derivatives

were not significant.

Related to its loan participation/syndication activities, FHN

enters into risk participation agreements, under which it

assumes exposure for, or receives indemnification for,

borrowers’ performance on underlying interest rate

derivative contracts. FHN’s counterparties in these

contracts are other lending institutions involved in the

loan participation/syndication arrangements for which the

underlying interest rate derivative contract is intended to

hedge interest rate risk for the borrower. FHN will make

(other institution is the lead bank) or receive (FHN is the

lead bank) payments for risk participations if the borrower

defaults on its obligation to perform under the terms of its

interest rate derivative agreement with the lead bank in

the participation.

As of December 31, 2025 and 2024, the notional values of

FHN’s risk participations were $184 million and $268

million of derivative assets and $1.0 billion and $916

million of derivative liabilities, respectively. The notional

value for risk participation/syndication agreements is

consistent with the percentage of participation in the

lending arrangement. FHN’s maximum exposure or

benefit in the risk participation agreements is contingent

on the fair value of the underlying interest rate derivative

contracts for which the borrower is in a liability position at

the time of default. FHN monitors the credit risk

associated with the borrowers to which the risk

participations relate through the same credit risk

assessment process utilized for establishing credit loss

estimates for its loan portfolio. These credit risk estimates

are included in the determination of fair value for the risk

participations. Assuming all underlying third-party

customers referenced in the swap contracts defaulted at

December 31, 2025 and 2024, the exposure from these

agreements would not be material based on the fair value

of the underlying swaps.

Master Netting and Similar Agreements

FHN uses master netting agreements, mutual margining

agreements and collateral posting requirements to

minimize credit risk on derivative contracts. Master

netting and similar agreements are used when

counterparties have multiple derivatives contracts that

allow for a “right of setoff,” meaning that a counterparty

may net offsetting positions and collateral with the same

counterparty under the contract to determine a net

receivable or payable. The following discussion provides

an overview of these arrangements which may vary due to

the derivative type and market in which a derivative

transaction is executed.

Interest rate derivatives are subject to agreements

consistent with standard agreement forms of the ISDA.

Currently, all interest rate derivative contracts are entered

into as over-the-counter transactions and collateral

posting requirements are based on the net asset or

liability position with each respective counterparty. For

contracts that require central clearing, novation to a

counterparty with access to a clearinghouse occurs and

initial margin is posted.

Cash margin received (posted) that is considered

settlements for the derivative contracts is included in the

respective derivative asset (liability) value. Cash margin

that is considered collateral received (posted) for interest

rate derivatives is recognized as a liability (asset) on FHN’s

Consolidated Balance Sheets.

Interest rate derivatives with clients that are smaller

financial institutions typically require posting of collateral

by the counterparty to FHN. This collateral is subject to a

threshold with daily adjustments based upon changes in

the level or fair value of the derivative position. Positions

and related collateral can be netted in the event of

default. Collateral pledged by a counterparty is typically

cash or securities. The securities pledged as collateral are

not recognized within FHN’s Consolidated Balance Sheets.

Interest rate derivatives associated with lending

arrangements share the collateral with the related loan(s).

The derivative and loan positions may be netted in the

event of default. For disclosure purposes, the entire

collateral amount is allocated to the loan.

Interest rate derivatives with larger financial institutions

typically contain provisions whereby the collateral posting

thresholds under the agreements adjust based on the

credit ratings of both counterparties. If the credit rating of

FHN and/or First Horizon Bank is lowered, FHN could be

required to post additional collateral with the

counterparties. Conversely, if the credit rating of FHN and/

or First Horizon Bank is increased, FHN could have

collateral released and be required to post less collateral

in the future. Also, if a counterparty’s credit ratings were

to decrease, FHN and/or First Horizon Bank could require

the posting of additional collateral; whereas if a

counterparty’s credit ratings were to increase, the

counterparty could require the release of excess

collateral. Collateral for these arrangements is adjusted

daily based on changes in the net fair value position with

each counterparty.

The net fair value, determined by individual counterparty,

of all derivative instruments with adjustable collateral

posting thresholds was $10 million of assets and $92

million of liabilities on December 31, 2025, and $5 million

of assets and $187 million of liabilities on December 31,

2024. As of December 31, 2025 and 2024, FHN had

   

	165	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 21—DERIVATIVES

received collateral of $68 million and $82 million and

posted collateral of $52 million and $96 million,

respectively, in the normal course of business related to

these agreements.

Certain agreements also contain accelerated termination

provisions, inclusive of the right of offset, if a

counterparty’s credit rating falls below a specified level. If

a counterparty’s debt rating (including FHN’s and First

Horizon Bank's) were to fall below these minimums, these

provisions would be triggered, and the counterparties

could terminate the agreements and require immediate

settlement of all derivative contracts under the

agreements. The net fair value, determined by individual

counterparty, of all interest rate derivative instruments

with credit-risk-related contingent accelerated

termination provisions was $11 million of assets and $92

million of liabilities on December 31, 2025, and $6 million

of assets and $187 million of liabilities on December 31,

2024. As of December 31, 2025 and 2024, FHN had

received collateral of $68 million and $82 million and

posted collateral of $52 million and $96 million,

respectively, in the normal course of business related to

these contracts.

FHNF buys and sells various types of securities for its

clients. When these securities settle on a delayed basis,

they are considered forward contracts. For futures and

options, FHN transacts through a third party, and the

transactions are subject to margin and collateral

maintenance requirements. In the event of default, open

positions can be offset along with the associated

collateral.

For this disclosure, FHN considers the impact of master

netting and other similar agreements which allow FHN to

settle all contracts with a single counterparty on a net

basis and to offset the net derivative asset or liability

position with the related securities and cash collateral.

The application of the collateral cannot reduce the net

derivative asset or liability position below zero, and

therefore any excess collateral is not reflected in the

following tables.

The following table provides details of derivative assets

and collateral received as presented on the Consolidated

Balance Sheets as of December 31, 2025 and 2024.

Table 8.21.8

DERIVATIVE ASSETS & COLLATERAL RECEIVED

								Gross amounts not offset in  the Balance Sheets
(Dollars in millions)		Gross amounts of recognized assets		Gross amounts offset in the Balance Sheets		Net amounts of assets presented in the Balance Sheets (a)		Derivative liabilities available for offset		Collateral received		Net amount
Derivative assets:
December 31, 2025
Interest rate derivative contracts		$320		$—		$320		$(79)		$(209)		$32
Forward contracts		7		—		7		(4)		(1)		2
		$327		$—		$327		$(83)		$(210)		$34
December 31, 2024
Interest rate derivative contracts		$522		$—		$522		$(73)		$(436)		$13
Forward contracts		8		—		8		(3)		(4)		1
		$530		$—		$530		$(76)		$(440)		$14

(a) Included in other assets on the Consolidated Balance Sheets. As of December 31, 2025 and 2024, less than $1 million and $2 million, respectively, of

derivative assets have been excluded from these tables because they are generally not subject to master netting or similar agreements.

   

	166	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 21—DERIVATIVES

The following table provides details of derivative liabilities and collateral pledged as presented on the Consolidated Balance

Sheets as of December 31, 2025 and 2024.

Table 8.21.9

DERIVATIVE LIABILITIES & COLLATERAL PLEDGED

								Gross amounts not offset  in the Balance Sheets
(Dollars in millions)		Gross amounts of recognized liabilities		Gross  amounts offset in the Balance Sheets		Net amounts of liabilities presented in the Balance Sheets (a)		Derivative assets available for offset		Collateral pledged		Net amount
Derivative liabilities:
December 31, 2025
Interest rate derivative contracts		$368		$—		$368		$(79)		$(94)		$195
Forward contracts		8		—		8		(4)		(4)		—
		$376		$—		$376		$(83)		$(98)		$195
December 31, 2024
Interest rate derivative contracts		$649		$—		$649		$(73)		$(168)		$408
Forward contracts		6		—		6		(3)		(1)		2
		$655		$—		$655		$(76)		$(169)		$410

(a) Included in other liabilities on the Consolidated Balance Sheets. As of December 31, 2025 and 2024, $26 million and $16 million, respectively, of

derivative liabilities (primarily Visa-related derivatives) have been excluded from these tables because they are generally not subject to master netting or

similar agreements.

   

	167	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 22—MASTER NETTING & SIMILAR AGREEMENTS

Note 22—Master Netting and Similar Agreements – Repurchase, Reverse Repurchase,

and Securities Borrowing Transactions

For repurchase, reverse repurchase, and securities

borrowing transactions, FHN and each counterparty have

the ability to offset all open positions and related

collateral in the event of default. Due to the nature of

these transactions, the value of the collateral for each

transaction approximates the value of the corresponding

receivable or payable. For repurchase agreements through

FHN’s fixed income business (securities purchased under

agreements to resell and securities sold under agreements

to repurchase), transactions are collateralized by

securities and/or government guaranteed loans which are

delivered on the settlement date and are maintained

throughout the term of the transaction. For FHN’s

repurchase agreements through banking activities

(securities sold under agreements to repurchase),

securities are typically pledged at settlement and not

released until maturity. For asset positions, the collateral

is not included on FHN’s Consolidated Balance Sheets. For

liability positions, securities collateral pledged by FHN is

generally represented within FHN’s trading or available-

for-sale securities portfolios.

For this disclosure, FHN considers the impact of master

netting and other similar agreements that allow FHN to

settle all contracts with a single counterparty on a net

basis and to offset the net asset or liability position with

the related securities collateral. The application of the

collateral cannot reduce the net asset or liability position

below zero, and therefore any excess collateral is not

reflected in the tables below.

Securities purchased under agreements to resell is

included in federal funds sold and securities purchased

under agreements to resell in the Consolidated Balance

Sheets. Securities sold under agreements to repurchase is

included in short-term borrowings.

The following table provides details of securities

purchased under agreements to resell and collateral

pledged by counterparties as of December 31, 2025 and

2024.

Table 8.22.1

SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL

								Gross amounts not offset in the Balance Sheets
(Dollars in millions)		Gross amounts of recognized assets		Gross amounts offset in the Balance Sheets		Net amounts of assets presented in the Balance Sheets		Offsetting securities sold under agreements to repurchase		Securities collateral (not recognized on FHN’s Balance Sheets)		Net amount
Securities purchased under agreements to resell:
2025		$613		$—		$613		$(5)		$(604)		$4
2024		572		—		572		—		(567)		5

The following table provides details of securities sold under agreements to repurchase and collateral pledged by FHN as of

December 31, 2025 and 2024.

Table 8.22.2

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

								Gross amounts not offset in the Balance Sheets
(Dollars in millions)		Gross amounts of recognized liabilities		Gross amounts offset in the Balance Sheets		Net amounts of liabilities presented in the Balance Sheets		Offsetting securities purchased under agreements to resell		Securities/ government guaranteed loans collateral		Net amount
Securities sold under agreements to repurchase:
2025		$1,973		$—		$1,973		$(5)		$(1,968)		$—
2024		2,096		—		2,096		—		(2,096)		—

Due to the short duration of securities sold under agreements to repurchase and the nature of collateral involved, the risks

associated with these transactions are considered minimal.

   

	168	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 22—MASTER NETTING & SIMILAR AGREEMENTS

The following table provides details, by collateral type, of the remaining contractual maturity of securities sold under

agreements to repurchase as of December 31, 2025 and 2024.

Table 8.22.3

MATURITIES OF SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

	December 31, 2025
(Dollars in millions)	Overnight and Continuous		Up to 30 Days		Total
Securities sold under agreements to repurchase:
U.S. treasuries	$5		$—		$5
Government agency issued MBS	1,558		—		1,558
Government agency issued CMO	386		—		386
Other U.S. government agencies	24		—		24
Total securities sold under agreements to repurchase	$1,973		$—		$1,973
	December 31, 2024
(Dollars in millions)	Overnight and Continuous		Up to 30 Days		Total
Securities sold under agreements to repurchase:
Government agency issued MBS	$1,535		$—		$1,535
Government agency issued CMO	561		—		561
Total securities sold under agreements to repurchase	$2,096		$—		$2,096

   

	169	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

Note 23—Fair Value of Assets and Liabilities

FHN groups its assets and liabilities measured at fair value

in three levels, based on the markets in which the assets

and liabilities are traded and the reliability of the

assumptions used to determine fair value. This hierarchy

requires FHN to maximize the use of observable market

data, when available, and to minimize the use of

unobservable inputs when determining fair value. Each

fair value measurement is placed into the proper level

based on the lowest level of significant input. These levels

are:

• Level 1—Valuation is based upon quoted prices for

identical instruments traded in active markets.

• Level 2—Valuation is based upon quoted prices for

similar instruments in active markets, quoted prices

for identical or similar instruments in markets that are

not active, and model-based valuation techniques for

which all significant assumptions are observable in

the market.

• Level 3—Valuation is generated from model-based

techniques that use significant assumptions not

observable in the market. These unobservable

assumptions reflect management’s estimates of

assumptions that market participants would use in

pricing the asset or liability. Valuation techniques

include the use of option pricing models, discounted

cash flow models, and similar techniques.

   

	170	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

Recurring Fair Value Measurements

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of

December 31, 2025 and 2024.

Table 8.23.1

ASSETS & LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

		December 31, 2025
(Dollars in millions)		Level 1		Level 2		Level 3		Total
Trading securities:
U.S. treasuries		$—		$8		$—		$8
Government agency issued MBS		—		352		—		352
Government agency issued CMO		—		326		—		326
Other U.S. government agencies		—		157		—		157
States and municipalities		—		86		—		86
Corporate and other debt		—		930		—		930
SBA interest-only strips		—		—		45		45
Total trading securities		—		1,859		45		1,904
Loans held for sale (elected fair value)		—		137		14		151
Securities available for sale:
Government agency issued MBS		—		3,641		—		3,641
Government agency issued CMO		—		2,869		—		2,869
Other U.S. government agencies		—		1,317		—		1,317
States and municipalities		—		338		—		338
Total securities available for sale		—		8,165		—		8,165
Other assets:
Deferred compensation mutual funds		110		—		—		110
Equity, mutual funds, and other		37		—		—		37
Derivatives, forwards and futures		7		—		—		7
Derivatives, interest rate contracts		—		320		—		320
Total other assets		154		320		—		474
Total assets		$154		$10,481		$59		$10,694
Trading liabilities:
U.S. treasuries		$—		$492		$—		$492
Corporate and other debt		—		115		—		115
Total trading liabilities		—		607		—		607
Other liabilities:
Derivatives, forwards and futures		9		—		—		9
Derivatives, interest rate contracts		—		368		—		368
Derivatives, other		—		—		25		25
Total other liabilities		9		368		25		402
Total liabilities		$9		$975		$25		$1,009

   

	171	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

		December 31, 2024
(Dollars in millions)		Level 1		Level 2		Level 3		Total
Trading securities:
U.S. treasuries		$—		$3		$—		$3
Government agency issued MBS		—		98		—		98
Government agency issued CMO		—		180		—		180
Other U.S. government agencies		—		252		—		252
States and municipalities		—		64		—		64
Corporate and other debt		—		767		—		767
SBA interest-only strips		—		—		23		23
Total trading securities		—		1,364		23		1,387
Loans held for sale (elected fair value)		—		69		16		85
Securities available for sale:
Government agency issued MBS		—		3,702		—		3,702
Government agency issued CMO		—		2,767		—		2,767
Other U.S. government agencies		—		1,073		—		1,073
States and municipalities		—		354		—		354
Total securities available for sale		—		7,896		—		7,896
Other assets:
Deferred compensation mutual funds		111		—		—		111
Equity, mutual funds, and other		35		—		—		35
Derivatives, forwards and futures		8		—		—		8
Derivatives, interest rate contracts		—		522		—		522
Derivatives, other		—		1		—		1
Total other assets		154		523		—		677
Total assets		$154		$9,852		$39		$10,045
Trading liabilities:
U.S. treasuries		$—		$440		$—		$440
Other U.S. government agencies		—		7		—		7
Corporate and other debt		—		103		—		103
Total trading liabilities		—		550		—		550
Other liabilities:
Derivatives, forwards and futures		6		—		—		6
Derivatives, interest rate contracts		—		649		—		649
Derivatives, other		—		1		15		16
Total other liabilities		6		650		15		671
Total liabilities		$6		$1,200		$15		$1,221

   

	172	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

Changes in Recurring Level 3 Fair Value Measurements

The changes in Level 3 assets and liabilities measured at fair value for the years ended December 31, 2025 , 2024 and 2023 on

a recurring basis are summarized as follows.

Table 8.23.2

CHANGES IN LEVEL 3 ASSETS & LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

	Year Ended December 31, 2025
(Dollars in millions)		SBA interest- only strips		Loans held for sale		Net  derivative liabilities
Balance on January 1, 2025		$23		$16		$(15)
Total net gains (losses) included in net income		(6)		1		(25)
Purchases		—		2		—
Sales		(11)		(5)		—
Settlements		—		(1)		15
Net transfers into (out of) Level 3		39	(b)	1		—
Balance on December 31, 2025		$45		$14		$(25)
Net unrealized gains (losses) included in net income		$(2)	(c)	$1	(a)	$(25)	(d)

	Year Ended December 31, 2024
(Dollars in millions)		SBA interest- only strips		Loans held for sale		Net  derivative liabilities
Balance on January 1, 2024		$13		$26		$(23)
Total net gains (losses) included in net income		(5)		1		(15)
Purchases		—		2		—
Sales		(17)		(13)		—
Settlements		—		(2)		23
Net transfers into (out of) Level 3		32	(b)	2		—
Balance on December 31, 2024		$23		$16		$(15)
Net unrealized gains (losses) included in net income		$(2)	(c)	$1	(a)	$(15)	(d)

	Year Ended December 31, 2023
(Dollars in millions)		SBA interest- only strips		Loans held for sale		Net  derivative liabilities
Balance on January 1, 2023		$25		$22		$(27)
Total net gains (losses) included in net income		(12)		4		(15)
Purchases		—		3		—
Sales		(54)		(3)		—
Settlements		—		(2)		19
Net transfers into (out of) Level 3		54	(b)	2		—
Balance on December 31, 2023		$13		$26		$(23)
Net unrealized gains (losses) included in net income		$(1)	(c)	$4	(a)	$(15)	(d)

(a) Primarily included in mortgage banking income on the Consolidated Statements of Income.

(b) Transfers into Level 3 SBA interest-only strips reflect transfers out of SBA loans held for sale, which are Level 2 assets measured on a nonrecurring basis.

Refer to Table 8.23.3.

(c) Primarily included in fixed income on the Consolidated Statements of Income.

(d) Included in other expense on the Consolidated Statements of Income.

There were no net unrealized gains (losses) for Level 3 assets and liabilities included in other comprehensive income as of

December 31, 2025, 2024 and 2023.

   

	173	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

Nonrecurring Fair Value Measurements

From time to time, FHN may be required to measure

certain other financial assets at fair value on a

nonrecurring basis in accordance with GAAP. These

adjustments to fair value usually result from the

application of lower of cost or market ("LOCOM")

accounting or write-downs of individual assets. For assets

measured at fair value on a nonrecurring basis which were

still held on the Consolidated Balance Sheets at

December 31, 2025, 2024 and 2023, respectively, the

following table provides the level of valuation

assumptions used to determine each adjustment and the

related carrying value.

Table 8.23.3

LEVEL OF VALUATION ASSUMPTIONS FOR ASSETS MEASURED AT FAIR VALUE ON A NONRECURRING BASIS

		Carrying value at December 31, 2025								Year Ended December 31, 2025
(Dollars in millions)		Level 1		Level 2		Level 3		Total		Net gains (losses)
Loans held for sale—SBAs and USDA		$—		$233		$—		$233		$—
Loans and leases (a)		—		—		370		370		(64)
OREO (b)		—		—		3		3		—
										$(64)

		Carrying value at December 31, 2024								Year Ended December 31, 2024
(Dollars in millions)		Level 1		Level 2		Level 3		Total		Net gains (losses)
Loans held for sale—SBAs and USDA		$—		$438		$—		$438		$(1)
Loans and leases (a)		—		—		344		344		(73)
OREO (b)		—		—		3		3		—
										$(74)

		Carrying value at December 31, 2023								Year Ended December 31, 2023
(Dollars in millions)		Level 1		Level 2		Level 3		Total		Net gains (losses)
Loans held for sale—SBAs and USDA		$—		$406		$—		$406		$(3)
Loans and leases (a)		—		—		245		245		(42)
OREO (b)		—		—		4		4		—
Other assets (c)		—		—		90		90		(7)
										$(52)

(a) Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell.

Write-downs on these loans are recognized as part of provision for credit losses.

(b) Represents the fair value and related losses of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance

excludes OREO related to government-insured mortgages.

(c) Represents tax credit investments accounted for under the equity method.

Lease asset impairments recognized represent the

reduction in value of the right-of-use assets associated

with leases that are being exited in advance of the

contractual lease expiration.

Impairments are measured using a discounted cash flow

methodology, which is considered a Level 3 valuation.

Impairments of long-lived tangible assets reflect locations

where the associated land and building are either owned

or leased. The fair values of owned sites were determined

using estimated sales prices from appraisals and broker

opinions less estimated costs to sell with adjustments

upon final disposition. The fair values of owned assets in

leased sites (e.g., leasehold improvements) were

determined using a discounted cash flow approach, based

on the revised estimated useful lives of the related assets.

Both measurement methodologies are considered Level 3

valuations. Impairment adjustments recognized upon

disposition of a location are considered Level 2 valuations.

In 2025, FHN recognized $1 million of leased asset

impairments, and fixed asset impairments were

immaterial. Fixed asset and leased asset impairments

were immaterial for the years ended December 31, 2024

and 2023.

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

Level 3 Measurements

The following table provides information regarding the unobservable inputs utilized in determining the fair value of Level 3

recurring and nonrecurring measurements as of December 31, 2025 and 2024.

Table 8.23.4

UNOBSERVABLE INPUTS USED IN LEVEL 3 FAIR VALUE MEASUREMENTS

(Dollars in millions)								Values Utilized
Level 3 Class		Fair Value at December 31, 2025		Valuation Techniques		Unobservable Input		Range		Weighted Average (c)
Trading securities - SBA interest-only strips		$45		Discounted cash flow		Constant prepayment rate		16% - 30%		17%
						Bond equivalent yield		4% - 14%		14%
Loans held for sale - residential real estate		$14		Discounted cash flow		Prepayment speeds - First mortgage		2% - 7%		3%
						Foreclosure losses		64% - 65%		64%
						Loss severity trends - First mortgage		0.0% - 1.3% of UPB		0.5%
Derivative liabilities, other		$25		Discounted cash flow		Visa covered litigation resolution amount		$3.7 billion -  $4.5 billion		$4.2 billion
						Probability of resolution scenarios		10% - 25%		20%
						Time until resolution		18 - 48 months		35 months
Loans and leases (a)		$370		Appraisals from comparable properties		Marketability adjustments for specific properties		0% - 25% of appraisal		NM
				Other collateral valuations		Borrowing base certificates liquidation adjustment		25% - 50% of gross value		NM
						Financial statements liquidation adjustment		50% - 100% of reported value		NM
						Auction appraisals marketability adjustment		0% - 10% of reported value		NM
OREO (b)		$3		Appraisals from comparable properties		Adjustment for value changes since appraisal		0% - 10% of appraisal		NM

NM - Not meaningful

(a) Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell.

Write-downs on these loans are recognized as part of provision for credit losses.

(b) Represents the fair value of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related

to government-insured mortgages.

(c) Weighted averages are determined by the relative fair value of the instruments or the relative contribution to an instrument's fair value.

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

(Dollars in millions)								Values Utilized
Level 3 Class		Fair Value at December 31, 2024		Valuation Techniques		Unobservable Input		Range		Weighted Average (c)
Trading securities - SBA interest-only strips		$23		Discounted cash flow		Constant prepayment rate		16% - 30%		17%
						Bond equivalent yield		3% - 18%		17%
Loans held for sale - residential real estate		$16		Discounted cash flow		Prepayment speeds - First mortgage		2% - 6%		3%
						Foreclosure losses		63% - 71%		64%
						Loss severity trends - First mortgage		0.0% - 0.2% of UPB		0.1%
Derivative liabilities, other		$15		Discounted cash flow		Visa covered litigation resolution amount		$3.1 billion -  $4.1 billion		$3.8 billion
						Probability of resolution scenarios		10% - 25%		18%
						Time until resolution		6 - 36 months		23 months
Loans and leases (a)		$344		Appraisals from comparable properties		Marketability adjustments for specific properties		0% - 25% of appraisal		NM
				Other collateral valuations		Borrowing base certificates liquidation adjustment		25% - 50% of gross value		NM
						Financial statements liquidation adjustment		50% - 100% of reported value		NM
						Auction appraisals marketability adjustment		0% - 10% of reported value		NM
OREO (b)		$3		Appraisals from comparable properties		Adjustment for value changes since appraisal		0% - 10% of appraisal		NM

NM - Not meaningful

(a) Represents carrying value of loans for which adjustments are required to be based on the appraised value of the collateral less estimated costs to sell.

Write-downs on these loans are recognized as part of provision for credit losses.

(b) Represents the fair value of foreclosed properties that were measured subsequent to their initial classification as OREO. Balance excludes OREO related

to government-insured mortgages.

(c) Weighted averages are determined by the relative fair value of the instruments or the relative contribution to an instrument's fair value.

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

Trading Securities - SBA Interest-only Strips

Increases (decreases) in estimated prepayment rates and

bond equivalent yields negatively (positively) affect the

value of SBA interest-only strips. Management additionally

considers whether the loans underlying related SBA

interest-only strips are delinquent, in default or prepaying,

and adjusts the fair value down 20 - 100% depending on

the length of time in default.

Loans Held for Sale

Foreclosure losses and prepayment rates are significant

unobservable inputs used in the fair value measurement

of FHN’s residential real estate loans held for sale. Loss

severity trends are also assessed to evaluate the

reasonableness of fair value estimates resulting from

discounted cash flow methodologies as well as to estimate

fair value for newly repurchased loans and loans that are

near foreclosure. Significant increases (decreases) in any

of these inputs in isolation would result in significantly

lower (higher) fair value measurements. All observable

and unobservable inputs are reassessed quarterly.

Derivative Liabilities

In conjunction with pre-2020 sales of Visa Class B shares,

FHN and the purchasers entered into derivative

transactions whereby FHN will make, or receive, cash

payments whenever the conversion ratio of the Visa Class

B shares into Visa Class A shares is adjusted. FHN uses a

discounted cash flow methodology in order to estimate

the fair value of FHN’s derivative liabilities associated with

its prior sales of Visa Class B shares. The methodology

includes estimation of both the resolution amount for

Visa’s Covered Litigation matters as well as the length of

time until the resolution occurs. Significant increases

(decreases) in either of these inputs in isolation would

result in significantly higher (lower) fair value

measurements for the derivative liabilities. Additionally,

FHN performs a probability-weighted multiple resolution

scenario to calculate the estimated fair value of these

derivative liabilities. Assignment of higher (lower)

probabilities to the larger potential resolution scenarios

would result in an increase (decrease) in the estimated fair

value of the derivative liabilities. Since this estimation

process requires application of judgment in developing

significant unobservable inputs used to determine the

possible outcomes and the probability weighting assigned

to each scenario, these derivatives have been classified

within Level 3 in fair value measurements disclosures.

Loans and Leases and Other Real Estate Owned

Collateral-dependent loans and OREO are primarily valued

using appraisals based on sales of comparable properties

in the same or similar markets. Other collateral

(receivables, inventory, equipment, etc.) is valued through

borrowing base certificates, financial statements and/or

auction valuations. These valuations are discounted based

on the quality of reporting, knowledge of the

marketability/collectability of the collateral and historical

disposition rates.

Fair Value Option

FHN previously elected the fair value option on a

prospective basis for substantially all types of mortgage

loans originated for sale purposes. FHN determined that

the election reduces certain timing differences and better

matches changes in the value of such loans with changes

in the value of derivatives and forward delivery

commitments used as economic hedges for these assets at

the time of election.

Repurchased loans relating to mortgage banking

operations conducted prior to the IBKC merger are

recognized within loans held for sale at fair value at the

time of repurchase, which includes consideration of the

credit status of the loans and the estimated liquidation

value. FHN has elected to continue recognition of these

loans at fair value in periods subsequent to reacquisition.

Due to the credit-distressed nature of the vast majority of

repurchased loans and the related loss severities

experienced upon repurchase, FHN believes that the fair

value election provides a more timely recognition of

changes in value for these loans that occur subsequent to

repurchase. Absent the fair value election, these loans

would be subject to valuation at the LOCOM value, which

would prevent subsequent values from exceeding the

initial fair value, determined at the time of repurchase,

but would require recognition of subsequent declines in

value. Thus, the fair value election provides for a more

timely recognition of any potential future recoveries in

asset values while not affecting the requirement to

recognize subsequent declines in value.

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

The following table reflects the differences between the fair value carrying amount of residential real estate loans held for

sale measured at fair value in accordance with management’s election and the aggregate unpaid principal amount FHN is

contractually entitled to receive at maturity.

Table 8.23.5

DIFFERENCES BETWEEN FAIR VALUE CARRYING AMOUNTS AND CONTRACTUAL AMOUNTS OF

RESIDENTIAL REAL ESTATE LOANS REPORTED AT FAIR VALUE

		December 31, 2025
(Dollars in millions)		Fair value carrying amount		Aggregate unpaid principal		Fair value carrying amount less aggregate unpaid principal
Residential real estate loans held for sale reported at fair value:
Total loans		$151		$154		$(3)
Nonaccrual loans		9		12		(3)
		December 31, 2024
(Dollars in millions)		Fair value carrying amount		Aggregate unpaid principal		Fair value carrying amount less aggregate unpaid principal
Residential real estate loans held for sale reported at fair value:
Total loans		$85		$89		$(4)
Nonaccrual loans		3		5		(2)

Assets and liabilities accounted for under the fair value election are initially measured at fair value with subsequent changes in

fair value recognized in earnings. Such changes in the fair value of assets and liabilities for which FHN elected the fair value

option are included in current period earnings with classification in the income statement line item reflected in the following

table.

Table 8.23.6

CHANGES IN FAIR VALUE RECOGNIZED IN NET INCOME

	Year Ended December 31,
(Dollars in millions)	2025		2024		2023
Changes in fair value included in net income:
Mortgage banking noninterest income
Loans held for sale	$2		$1		$1

For the years ended December 31, 2025 , 2024 and 2023,

the amount for residential real estate loans held for sale

included an insignificant amount of gains in pre-tax

earnings that are attributable to changes in instrument-

specific credit risk. The portion of the fair value

adjustments related to credit risk was determined based

on estimated default rates and estimated loss severities.

Interest income on residential real estate loans held for

sale measured at fair value is calculated based on the note

rate of the loan and is recorded in the interest income

section of the Consolidated Statements of Income as

interest on loans held for sale.

Determination of Fair Value

Fair values are based on the price that would be received

to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the

measurement date. The following describes the

assumptions and methodologies used to estimate the fair

value of financial instruments recorded at fair value in the

Consolidated Balance Sheets and for estimating the fair

value of financial instruments for which fair value is

disclosed.

Short-term financial assets

Federal funds sold, securities purchased under

agreements to resell, and interest-bearing deposits with

other financial institutions and the Federal Reserve are

carried at historical cost. The carrying amount is a

reasonable estimate of fair value because of the relatively

short time between the origination of the instrument and

its expected realization.

Trading securities and trading liabilities

Trading securities and trading liabilities are recognized at

fair value through current earnings. Trading inventory held

for broker-dealer operations is included in trading

securities and trading liabilities. Broker-dealer long

positions are valued at the bid price in the bid-ask spread.

Short positions are valued at the ask price. Inventory

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

positions are valued using observable inputs including

current market transactions, benchmark yields, credit

spreads, and consensus prepayment speeds. Trading loans

are valued using observable inputs including current

market transactions, swap rates, mortgage rates, and

consensus prepayment speeds.

Trading securities - SBA interest-only strips

Interest-only strips are valued at fair value based on an

income approach using an internal valuation model. The

internal valuation model includes assumptions regarding

projections of future cash flows, prepayment rates,

default rates and interest-only strip terms. These

securities bear the risk of loan prepayment or default that

may result in FHN not recovering all or a portion of its

recorded investment. When appropriate, valuations are

adjusted for various factors including default or

prepayment status of the underlying SBA loans. Because

of the inherent uncertainty of valuation, those estimated

values may be higher or lower than the values that would

have been used had a ready market for the securities

existed and may change in the near term.

Securities available for sale and held to maturity

Valuations of debt securities are performed using

observable inputs obtained from market transactions in

similar securities. Typical inputs include benchmark yields,

consensus prepayment speeds, and credit spreads. Trades

in similar securities and broker quotes are used to support

these valuations.

Loans held for sale

FHN determines the fair value of loans held for sale using

either current transaction prices or discounted cash flow

models. Fair values are determined using current

transaction prices and/or values on similar assets when

available, including committed bids for specific loans or

loan portfolios. Uncommitted bids may be adjusted based

on other available market information.

The fair value of residential real estate loans held for sale

is determined using a discounted cash flow model that

incorporates both observable and unobservable inputs.

Inputs in the discounted cash flow model include current

mortgage rates for similar products, estimated

prepayment rates, foreclosure losses, and various loan

performance measures (delinquency, LTV, credit score).

Adjustments for delinquency and other differences in loan

characteristics are typically reflected in the model’s

discount rates. Loss severity trends and the value of

underlying collateral are also considered in assessing the

appropriate fair value for severely delinquent loans and

loans in foreclosure. The valuation of HELOCs also

incorporates estimated cancellation rates for loans

expected to become delinquent.

Non-mortgage consumer loans held for sale are valued

using committed bids for specific loans or loan portfolios

or current market pricing for similar assets with

adjustments for differences in credit standing

(delinquency, historical default rates for similar loans),

yield, collateral values and prepayment rates. If pricing for

similar assets is not available, a discounted cash flow

methodology is utilized, which incorporates all of these

factors into an estimate of investor required yield for the

discount rate.

FHN utilizes quoted market prices of similar instruments

or broker and dealer quotations to value the SBA and

USDA guaranteed loans. FHN's valuation of SBA-

unguaranteed interests in loans held for sale is based on

individual loan characteristics, such as industry type and

pay history and generally follows an income approach.

Furthermore, these valuations are adjusted for changes in

prepayment estimates and are reduced due to restrictions

on trading. The fair value of other non-residential real

estate loans held for sale is approximated by their carrying

values based on current transaction values.

Mortgage loans held for investment at fair value option

The fair value of mortgage loans held for investment at

fair value option is determined by a third party using a

discounted cash flow model using various assumptions

about future loan performance (constant prepayment

rate, constant default rate and loss severity trends) and

market discount rates.

Loans held for investment

The fair values of mortgage loans are estimated using an

exit price methodology that is based on present values

using the interest rate that would be charged for a similar

loan to a borrower with similar risk, weighted for varying

maturity dates and adjusted for a liquidity discount based

on the estimated time period to complete a sale

transaction with a market participant.

Other loans and leases are valued based on present values

using the interest rate that would be charged for a similar

instrument to a borrower with similar risk, applicable to

each category of instruments, and adjusted for a liquidity

discount based on the estimated time period to complete

a sale transaction with a market participant.

For loans measured using the estimated fair value of

collateral less costs to sell, fair value is estimated using

appraisals of the collateral. Collateral values are

monitored and additional write-downs are recognized if it

is determined that the estimated collateral values have

declined further. Estimated costs to sell are based on

current amounts of disposal costs for similar assets.

Carrying value is considered to reflect fair value for these

loans.

Derivative assets and liabilities

The fair value for forwards and futures contracts is based

on current transactions involving identical securities.

Futures contracts are exchange-traded and thus have no

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

credit risk factor assigned as the risk of non-performance

is limited to the clearinghouse used.

Valuations of other derivatives (primarily interest rate

contracts) are based on inputs observed in active markets

for similar instruments. Typical inputs include benchmark

yields, option volatility and option skew. Centrally cleared

derivatives are discounted using SOFR as required by

clearinghouses. In measuring the fair value of these

derivative assets and liabilities, FHN has elected to

consider credit risk based on the net exposure to

individual counterparties. Credit risk is mitigated for these

instruments through the use of mutual margining and

master netting agreements as well as collateral posting

requirements. For derivative contracts with daily cash

margin requirements that are considered settlements, the

daily margin amount is netted within derivative assets or

liabilities. Any remaining credit risk related to interest rate

derivatives is considered in determining fair value through

evaluation of additional factors such as client loan grades

and debt ratings. Foreign currency related derivatives also

utilize observable exchange rates in the determination of

fair value. The determination of fair value for

FHN’s derivative liabilities associated with its prior sales of

Visa Class B shares are classified within Level 3 in the fair

value measurements disclosure as previously discussed in

the unobservable inputs discussion.

The fair value of risk participations is determined in

reference to the fair value of the related derivative

contract between the borrower and the lead bank in the

participation structure, which is determined consistent

with the valuation process discussed above. This value is

adjusted for the pro rata portion of the reference

derivative’s notional value and an assessment of credit

risk for the referenced borrower.

OREO

OREO primarily consists of properties that have been

acquired in satisfaction of debt. These properties are

carried at the lower of the outstanding loan amount or

estimated fair value less estimated costs to sell the real

estate. Estimated fair value is determined using appraised

values with subsequent adjustments for deterioration in

values that are not reflected in the most recent appraisal.

Other assets

For disclosure purposes, other assets consist of tax credit

investments, FRB and FHLB Stock, deferred compensation

mutual funds and equity investments (including other

mutual funds) with readily determinable fair values. The

fair value of tax credit investments is estimated using

recent transaction information with adjustments for

differences in individual investments. Deferred

compensation mutual funds are recognized at fair value,

which is based on quoted prices in active markets.

Investments in the stock of the Federal Reserve Bank and

Federal Home Loan Banks are recognized at historical cost

in the Consolidated Balance Sheets which is considered to

approximate fair value. Investments in mutual funds are

measured at the funds’ reported closing net asset values.

Investments in equity securities are valued using quoted

market prices when available.

Defined maturity deposits

The fair value of these deposits is estimated by

discounting future cash flows to their present value.

Future cash flows are discounted by using the current

market rates of similar instruments applicable to the

remaining maturity. For disclosure purposes, defined

maturity deposits include all time deposits.

Short-term financial liabilities

The fair value of federal funds purchased, securities sold

under agreements to repurchase, and other short-term

borrowings is approximated by the book value. The

carrying amount is a reasonable estimate of fair value

because of the relatively short time between the

origination of the instrument and its expected realization.

Loan commitments

Fair values of these commitments are based on fees

charged to enter into similar agreements taking into

account the remaining terms of the agreements and the

counterparties’ credit standing.

Other commitments

Fair values of these commitments are based on fees

charged to enter into similar agreements.

The following fair value estimates are determined as of a

specific point in time utilizing various assumptions and

estimates. The use of assumptions and various valuation

techniques, as well as the absence of secondary markets

for certain financial instruments, reduces the

comparability of fair value disclosures between financial

institutions. Due to market illiquidity, the fair values for

loans and leases, loans held for sale, and term borrowings

as of December 31, 2025 and 2024 involve the use of

significant internally developed pricing assumptions for

certain components of these line items. The assumptions

and valuations utilized for this disclosure are considered

to reflect inputs that market participants would use in

transactions involving these instruments as of the

measurement date. These considerations affect the

estimate of a potential acquirer’s cost of capital and cash

flow volatility assumptions from these assets and the

resulting fair value measurements may depart significantly

from FHN’s internal estimates of the intrinsic value of

these assets.

Assets and liabilities that are not financial instruments —

such as premises and equipment, goodwill, other

intangible assets such as the value of long-term

relationships with deposit and trust clients, deferred

taxes, and certain other assets and other liabilities — have

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

not been included in the following table. Additionally, the

fair value measurements presented in the following table

are solely for financial instruments as of the measurement

date and do not consider the earnings potential of our

various business lines. Accordingly, the total of the fair

value amounts does not represent, and should not be

construed to represent, the underlying value of FHN.

The following table summarizes the book value and

estimated fair value of financial instruments recorded in

the Consolidated Balance Sheets as of December 31, 2025

and 2024.

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

Table 8.23.7

BOOK VALUE AND ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

		December 31, 2025
		Book Value		Fair Value
(Dollars in millions)				Level 1		Level 2		Level 3		Total
Assets:
Loans and leases, net of allowance for loan and lease losses
Commercial:
Commercial, financial, and industrial		$35,570		$—		$—		$35,401		$35,401
Commercial real estate		13,386		—		—		13,289		13,289
Consumer:
Consumer real estate		13,902		—		—		13,707		13,707
Credit card and other		560		—		—		558		558
Total loans and leases, net of allowance for loan and lease losses		63,418		—		—		62,955		62,955
Short-term financial assets:
Interest-bearing deposits with banks		1,125		1,125		—		—		1,125
Federal funds sold		21		—		21		—		21
Securities purchased under agreements to resell		613		—		613		—		613
Total short-term financial assets		1,759		1,125		634		—		1,759
Trading securities (a)		1,904		—		1,859		45		1,904
Loans held for sale:
Mortgage loans (elected fair value)		151		—		137		14		151
USDA & SBA loans - LOCOM		233		—		233		—		233
Mortgage loans - LOCOM		22		—		—		22		22
Total loans held for sale		406		—		370		36		406
Securities available for sale (a)		8,165		—		8,165		—		8,165
Securities held to maturity		1,216		—		1,073		—		1,073
Derivative assets (a)		327		7		320		—		327
Other assets:
Tax credit investments		824		—		—		758		758
Deferred compensation mutual funds		110		110		—		—		110
Equity, mutual funds, and other (b)		281		37		—		244		281
Total other assets		1,215		147		—		1,002		1,149
Total assets		$78,410		$1,279		$12,421		$64,038		$77,738
Liabilities:
Defined maturity deposits		$6,485		$—		$6,466		$—		$6,466
Trading liabilities (a)		607		—		607		—		607
Short-term financial liabilities:
Federal funds purchased		1,039		—		1,039		—		1,039
Securities sold under agreements to repurchase		1,973		—		1,973		—		1,973
Other short-term borrowings		242		—		242		—		242
Total short-term financial liabilities		3,254		—		3,254		—		3,254
Term borrowings:
Real estate investment trust-preferred		47		—		—		47		47
Notes payable—New Market Tax Credit investments		74		—		—		73		73
Secured borrowings		12		—		—		12		12
Junior subordinated debentures		153		—		—		150		150
Other long-term borrowings		1,035		—		1,058		—		1,058
Total term borrowings		1,321		—		1,058		282		1,340
Derivative liabilities (a)		402		9		368		25		402
Total liabilities		$12,069		$9		$11,753		$307		$12,069

(a) Classes are detailed in the recurring measurement table.

(b) Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $41

million and FRB stock of $203 million .

   

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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

		December 31, 2024
		Book Value		Fair Value
(Dollars in millions)				Level 1		Level 2		Level 3		Total
Assets:
Loans and leases, net of allowance for loan and lease losses
Commercial:
Commercial, financial, and industrial		$33,083		$—		$—		$32,511		$32,511
Commercial real estate		14,194		—		—		13,894		13,894
Consumer:
Consumer real estate		13,826		—		—		13,262		13,262
Credit card and other		647		—		—		657		657
Total loans and leases, net of allowance for loan and lease losses		61,750		—		—		60,324		60,324
Short-term financial assets:
Interest-bearing deposits with banks		1,538		1,538		—		—		1,538
Federal funds sold		59		—		59		—		59
Securities purchased under agreements to resell		572		—		572		—		572
Total short-term financial assets		2,169		1,538		631		—		2,169
Trading securities (a)		1,387		—		1,364		23		1,387
Loans held for sale:
Mortgage loans (elected fair value)		85		—		69		16		85
USDA & SBA loans - LOCOM		439		—		439		—		439
Mortgage loans - LOCOM		27		—		—		27		27
Total loans held for sale		551		—		508		43		551
Securities available for sale (a)		7,896		—		7,896		—		7,896
Securities held to maturity		1,270		—		1,083		—		1,083
Derivative assets (a)		531		8		523		—		531
Other assets:
Tax credit investments		706		—		—		692		692
Deferred compensation mutual funds		111		111		—		—		111
Equity, mutual funds, and other (b)		289		35		—		254		289
Total other assets		1,106		146		—		946		1,092
Total assets		$76,660		$1,692		$12,005		$61,336		$75,033
Liabilities:
Defined maturity deposits		$6,613		$—		$6,591		$—		$6,591
Trading liabilities (a)		550		—		550		—		550
Short-term financial liabilities:
Federal funds purchased		259		—		259		—		259
Securities sold under agreements to repurchase		2,096		—		2,096		—		2,096
Other short-term borrowings		1,045		—		1,045		—		1,045
Total short-term financial liabilities		3,400		—		3,400		—		3,400
Term borrowings:
Real estate investment trust-preferred		47		—		—		47		47
Notes payable—New Market Tax Credit investments		74		—		—		70		70
Secured borrowings		37		—		—		37		37
Junior subordinated debentures		151		—		—		142		142
Other long-term borrowings		886		—		866		—		866
Total term borrowings		1,195		—		866		296		1,162
Derivative liabilities (a)		671		6		650		15		671
Total liabilities		$12,429		$6		$12,057		$311		$12,374

(a) Classes are detailed in the recurring measurement table.

(b) Level 1 primarily consists of mutual funds with readily determinable fair values. Level 3 includes restricted investments in FHLB-Cincinnati stock of $51

million and FRB stock of $203 million.

   

	183	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES

The following table presents the contractual amount and fair value of unfunded loan commitments and standby and other

commitments as of December 31, 2025 and 2024.

Table 8.23.8

UNFUNDED COMMITMENTS

		Contractual Amount				Fair Value
(Dollars in millions)		December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024
Unfunded Commitments:
Loan commitments		$21,676		$20,992		$1		$1
Standby and other commitments		804		753		10		9

   

	184	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 24—PARENT COMPANY FINANCIAL INFORMATION

Note 24—Parent Company Financial Information

Following are statements of the parent company.

Parent Company Balance Sheets

		December 31,
(Dollars in millions)		2025		2024
Assets:
Cash		$608		$837
Notes receivable		3		3
Investments in subsidiaries:
Bank		8,894		8,487
Non-bank		70		61
Other assets		258		251
Total assets		$9,833		$9,639
Liabilities and equity:
Accrued employee benefits and other liabilities		$489		$473
Term borrowings		497		350
Total liabilities		986		823
Total equity		8,847		8,816
Total liabilities and equity		$9,833		$9,639

Parent Company Statements of Income

		Year Ended December 31,
(Dollars in millions)		2025		2024		2023
Dividend income:
Bank		$1,005		$1,110		$220
Non-bank		5		—		—
Total dividend income		1,010		1,110		220
Other income		—		1		226
Total income		1,010		1,111		446
Interest expense - term borrowings		29		15		21
Personnel and other expense		110		111		114
Total expense		139		126		135
Income before income taxes		871		985		311
Income tax expense (benefit)		(27)		(27)		24
Income before equity in undistributed net income (loss) of subsidiaries		898		1,012		287
Equity in undistributed net income (loss) of subsidiaries:
Bank		88		(238)		613
Non-bank		(4)		1		(3)
Net income attributable to the controlling interest		$982		$775		$897

   

	185	2025 FORM 10-K ANNUAL REPORT

ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
Table of Contents	NOTE 24—PARENT COMPANY FINANCIAL INFORMATION

Parent Company Statements of Cash Flows

		Year Ended December 31,
(Dollars in millions)		2025		2024		2023
Operating activities:
Net income		$982		$775		$897
Less undistributed net income (loss) of subsidiaries		84		(237)		610
Income before undistributed net income (loss) of subsidiaries		898		1,012		287
Adjustments to reconcile income to net cash provided by operating activities:
Deferred income tax expense		16		15		8
Stock-based compensation expense		61		59		36
Other operating activities, net		(17)		(18)		—
Total adjustments		60		56		44
Net cash provided by operating activities		958		1,068		331
Investing activities:
Proceeds from sales and prepayments of securities		11		3		21
Purchases of securities		(1)		(1)		(1)
(Investment in) return on subsidiary		(12)		(9)		(10)
Net cash (used in) provided by investing activities		(2)		(7)		10
Financing activities:
Preferred stock redemption		(80)		(100)		—
Cash dividends paid - preferred stock		(26)		(29)		(32)
Common stock:
Stock options exercised		6		9		5
Cash dividends paid		(314)		(332)		(335)
Repurchase of shares		(918)		(626)		(10)
Proceeds from issuance of term borrowings		497		—		—
Repayment of term borrowings		(350)		—		(450)
Net cash used in financing activities		(1,185)		(1,078)		(822)
Net decrease in cash and cash equivalents		(229)		(17)		(481)
Cash and cash equivalents at beginning of year		837		854		1,335
Cash and cash equivalents at end of year		$608		$837		$854
Total interest paid		$31		$26		$33
Income taxes received from (paid to) subsidiaries		27		60		(46)
Federal excise taxes paid		6		—		—

   

	186	2025 FORM 10-K ANNUAL REPORT

ITEM 9. ACCOUNTANTS, ITEM 9A. CONTROLS & PROCEDURES, ITEM 9B. OTHER INFO, AND ITEM 9C. FOREIGN INSPECTIONS
Table of Contents

Item 9.Changes in and Disagreements with

Accountants on Accounting and

Financial Disclosure

Not applicable.

Item 9A.Controls and Procedures

Evaluation of Disclosure Controls & Procedures

Our management, with the participation of our Chief

Executive Officer and Chief Financial Officer, has evaluated

the effectiveness of our disclosure controls and

procedures (as defined in Exchange Act Rule 13a-15(e)) as

of the end of the period covered by this report. Based on

that evaluation, the Chief Executive Officer and the Chief

Financial Officer have concluded that our disclosure

controls and procedures were effective as of the end of

the period covered by this report.

Reports on Internal Control over Financial Reporting

The report of management required by Item 308(a) of

Regulation S-K appears at page 86, and the attestation

report required by Item 308(b) of Regulation S-K appears

starting at page 87, of our 2025 Financial Statements

(Item 8). Both are incorporated herein by this reference.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control

over financial reporting during our fourth fiscal quarter

that have materially affected, or are reasonably likely to

materially affect, our internal control over financial

reporting.

Item 9B.Other Information

Form 8-K Information not previously reported

Not applicable.

Trading Plans of Directors and Executive Officers

During our most recent fiscal quarter, no director (see

Item 10 beginning on page 187) or executive officer (see

the S upplemental Part I Information beginning on page 36 )

adopted or terminated (i) any contract, instruction, or

written plan for the purchase or sale of our securities

intended to satisfy the affirmative defense conditions of

SEC Rule 10b5-1(c) (a "Rule 10b5-1 trading arrangement");

and/or (ii) any "non-Rule 10b5-1 trading arrangement" as

defined in SEC Reg. S-K Item 408(c).

Item 9C.Disclosure Regarding Foreign

Jurisdictions that Prevent Inspections

Not applicable.

   

	187	2025 FORM 10-K ANNUAL REPORT

ITEM 10. DIRECTORS & EXECUTIVE OFFICERS
Table of Contents

PART III

Item 10.Directors, Executive Officers and

Corporate Governance

Required Item 10 Information

In 2025, there were no material amendments to the

procedures described in our 2026 Proxy Statement under

the caption Shareholder Recommendations and

Nominations, especially under the sub-caption Committee

Consideration of Shareholder Recommendations of

Nominees, by which security holders may recommend

nominees to our Board of Directors.

Our bylaws contain a process, if certain conditions are

met, for a shareholder to nominate a person for election

to the Board in advance of an annual meeting, and to

require us to include that nomination in our annual

meeting proxy statement. Additional information

regarding this process is available in our 2026 Proxy

Statement under the captions Shareholder

Recommendations and Nominations and 2027 Annual

Meeting—Proposal & Nomination Deadlines, which

information is incorporated herein by reference.

Our Board of Directors has adopted a Code of Ethics for

Senior Financial Officers that applies to the Chief

Executive Officer, Chief Financial Officer, and Chief

Accounting Officer and also applies to all professionals

serving in the financial, accounting, or audit areas of FHN

and its subsidiaries. A copy of the Code has been filed or

incorporated by reference as Exhibit 14 to this report and

is posted on our current internet website at

www.firsthorizon.com: click on “Investor Relations” at the

bottom of the web page, then hover over “Corporate

Governance” near the top of the page, then click on

“Governance Documents.” Scroll down the Governance

Documents page to find a link to the Code. A paper copy

of the Code is available without charge upon written

request addressed to our Corporate Secretary at our main

office, 165 Madison Avenue, Memphis, Tennessee 38103.

We intend to satisfy our disclosure obligations under Item

5.05 of Form 8-K related to Code amendments or waivers

by posting such information on our internet website, the

address for which is listed in this paragraph above.

We have adopted an Inside Information Policy and related

written Procedures for that Policy (collectively, our

"Insider Policy"). Our Insider Policy governs the purchase,

sale, and/or other dispositions of our securities by our

directors, officers, associates and certain other persons. It

is designed to promote compliance with insider trading

laws, rules, and regulations, and listing standards

applicable to us. By its terms as written, our Insider Policy

applies only to insiders (directors, officers, associates, and

certain other persons). In practice, senior management

applies the periodic and ad hoc blackout provisions to our

purchases of our securities in all market transactions, and

in all off-market transactions other than share-

withholding related to employee stock plan awards.

Exceptions to the blackout provisions must be approved

by our Chief Executive Officer in consultation with our

General Counsel. Our Inside Information Policy and its

Procedures have been filed or incorporated by reference

as Exhibits 19.1 and 19.2 to this report. In addition, the

following section of our 2026 Proxy Statement is

incorporated herein by reference: Policies on Insider

Trading and Hedging.

Other information required by this Item related to the

topics mentioned in Table 10.1 is incorporated herein by

reference to the disclosures indicated in the Table or is

provided in that Table.

   

	188	2025 FORM 10-K ANNUAL REPORT

ITEM 10. DIRECTORS & EXECUTIVE OFFICERS
Table of Contents

Table 10.1

ITEM 10 TOPICS TABLE

Item 10 Topics	Responses or Incorporated Disclosures
Directors and nominees for director of FHN, the Audit Committee of our Board of Directors, members of the Audit Committee, and Audit Committee financial experts	In our 2026 Proxy Statement: Independence & Categorical Standards, Committee Charters & Composition, Audit Committee, and Vote Item 1—Election of Directors (excluding the Audit Committee Report and the statements regarding the existence and location of the Audit Committee’s charter)
Executive officers	In the Supplemental Part I Information following Item 4 of this report: Executive Officers of the Registrant, begin ning on page 36
Compliance with Section 16(a) of the Securities Exchange Act of 1934	In our 2026 Proxy Statement: Delinquent Section 16(a) Reports

First Horizon Directors

Table 10.2

OUR BOARD OF DIRECTORS

(at February 20, 2026)

Jeffrey J. Brown Age 53 President, Hendrick Automotive Group, LLC, a privately held automotive retail organization		Velia Carboni Age 56 Chief Information Officer, SharkNinja, Inc., a global product design and technology company		John C. Compton Age 64 Partner, Clayton, Dubilier & Rice a private equity firm
Wendy P. Davidson Age 56 Former President and Chief Executive Officer, The Hain Celestial Group, Inc., an organic and natural products company		John W. Dietrich Age 61 Executive Vice President and Chief Financial Officer, FedEx Corporation, a provider of transportation, e- commerce and business services		D. Bryan Jordan Age 64 Chairman of the Board, President & Chief Executive Officer, First Horizon Corporation, a financial services company
J. Michael Kemp, Sr. Age 55 Founder and Chief Executive Officer, Kemp Management Solutions, a program management and consulting firm		Rick E. Maples Age 67 Retired Co-Head of Investment Banking, Stifel, Nicolaus and Company, Incorporated, a financial services company		Sital K. Mody Age 55 President, Natural Gas Pipelines Group, and Vice President, Kinder Morgan, Inc., an energy infrastructure company
Michael L. Moehn Age 57 Group President, Ameren Utilities, Ameren Corporation, a utility holding company		Vicki R. Palmer Age 72 President, The Palmer Group, LLC a general consulting firm		Colin V. Reed* Age 78 Executive Chairman, Ryman Hospitality Properties, Inc. a real estate investment trust
Cecelia D. Stewart Age 67 Retired President, U.S. Consumer & Commercial Banking, Citigroup, Inc. a financial services company				R. Eugene Taylor* Age 78 Retired Chairman of the Board and Chief Executive Officer, Capital Bank Financial Corp., a financial services company

* Indicates a director who has not been nominated for re-election at the 2026 Annual Meeting of Shareholders.

   

	189	2025 FORM 10-K ANNUAL REPORT

ITEM 11. EXECUTIVE COMPENSATION
Table of Contents

Item 11.Executive Compensation

The information called for by this Item is incorporated

herein by reference to the following sections of our 2026

Proxy Statement: Compensation Committee,

Compensation Committee Interlocks & Insider

Participation, Director Compensation, Policies on Insider

Trading and Hedging, Compensation Discussion &

Analysis, Recent Compensation, Post-Employment

Compensation, Pay Ratio of CEO to Median Employee,

Equity Grant Processes, and any Appendix to our Proxy

Statement referenced in those sections.

The subsection of our 2026 Proxy Statement captioned

Compensation Risk, within the Compensation Committee

section, provides information concerning our

management of certain risks associated with our

compensation policies and practices. We do not believe

those risks are reasonably likely to have a material

adverse effect upon us; accordingly, we do not believe

that information is required to be provided in this Item.

The information required by Item 407(e)(5) of Regulation

S-K is provided in our 2026 Proxy Statement within the

Compensation Committee section under the sub-section

captioned Compensation Committee Report.  As permitted

by the instructions for that Item, the information under

that subsection is not “filed” with this report.

As to the information required by Item 402(w) of

Regulation S-K: (i) refer to Clawback Policies & Practices

within Compensation Discussion & Analysis in our 2026

Proxy Statement; and (ii) the conditions for disclosures

beyond those incorporated by reference above have not

occurred. As to the information required by Item 402(x) of

Regulation S-K, refer to Equity Grant Processes within

Compensation Discussion & Analysis in our 2026 Proxy

Statement. Our Erroneously Awarded Compensation

Recovery Policy has been filed as Exhibit 97 to this report,

as shown in Item 15.

   

	190	2025 FORM 10-K ANNUAL REPORT

ITEM 12. SECURITY OWNERSHIP & RELATED STOCKHOLDER MATTERS
Table of Contents

Item 12.Security Ownership of Certain

Beneficial Owners and Management and

Related Stockholder Matters

Securities Authorized for Issuance under Equity Compensation

Plans

Equity Compensation Plan Information

Table 12.1 provides information as of December 31, 2025 

regarding shares of our common stock that may be issued

under the following plans:

• 2021 Incentive Plan, as amended February 25, 2024

("2021 Plan")

• Equity Compensation Plan (“ECP”)

• IBERIABANK Corporation 2019 Stock Incentive Plan

("SIP")

• The following IBERIABANK Corporation plans

(together with the SIP, the “IBKC Plans”): 2016 Stock

Incentive Plan; and Amended and Restated 2010

Stock Incentive Plan

• Capital Bank Financial Corp. 2013 Omnibus

Compensation Plan ("CBF Plan")

Table 12.1

EQUITY COMPENSATION PLAN INFORMATION

As of December 31, 2025

		A		B		C
Plan Category		Number of Securities to be Issued upon Exercise of Outstanding Options		Weighted Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in Col. A)
Equity Compensation Plans Approved by Shareholders (1)		578,155	(2)	$15.94		10,793,408
Equity Compensation Plans Not Approved by Shareholders		—		—		—
Total		578,155		$15.94		10,793,408

(1)Consists of the 2021 Plan, the ECP, the IBKC Plans, and the CBF Plan. The 2021 Plan was approved by shareholders in 2021 and, as amended, in 2024 and

remains active. The number of shares in Column C is entirely under the 2021 Plan; as provided in the 2021 Plan, the Column C number includes the new/

additional shares originally authorized under the 2021 Plan along with shares underlying ECP awards that have been forfeited or cancelled since the 2021

Plan was initially approved by shareholders, net of shares underlying 2021 Plan awards that are outstanding or have been paid. The ECP initially was

approved by shareholders in 2003, most recently was re-approved in 2016, and has terminated. The IBKC Plans were approved by IBKC's shareholders in

2011, 2014, 2016, 2019 and 2020, and all have terminated. FHN and IBKC closed a merger-of-equals transaction in 2020, as a result of which FHN became

the plan sponsor for the IBKC Plans and their awards. The CBF Plan was approved by shareholders of CBF, and has terminated. FHN merged with CBF in

2017, as a result of which FHN became the plan sponsor for the CBF Plan and its awards. "Terminated" means no new awards may be granted under the

plan.

(2)Consists entirely of outstanding options issued under terminated plans approved by shareholders.

Only the 2021 Plan permits new awards to be granted; all

other plans have terminated. At December 31, 2025, there

were no shares issuable upon exercise of outstanding

options under the 2021 Plan, and the total number of

shares issuable upon exercise of outstanding options

under the terminated plans was 578,155 shares.

Shares covered by outstanding options are shown in

column A of Table 12.1. Outstanding equity awards other

than options ("full-value awards"), consisting of unpaid

stock units, are not included in any column in that Table.

In total, 10,650,250 shares are covered by unpaid full-

value awards, all granted under the 2021 Plan. Of those,

10,149,590 are covered by awards to current associates,

and 500,660 are covered by awards to retired associates

that will be distributed based on previously scheduled

dates in the future without regard to continued service

requirements.

   

	191	2025 FORM 10-K ANNUAL REPORT

ITEM 12. SECURITY OWNERSHIP & RELATED STOCKHOLDER MATTERS
Table of Contents

Column C of Table 12.1 presents the total number of

shares available for new awards under the 2021 Plan at

December 31, 2025, assuming eventual full exercise or

vesting of all shares covered by awards outstanding on

that date. The 2021 Plan permits the grant of options and

full-value awards, as well as stock appreciation rights. Only

full-value awards have been granted under the plan.

Beneficial Ownership of Corporation Stock

The information required for this Item pursuant to Item

403(a) and (b) of Regulation S-K is presented in our 2026

Proxy Statement under the heading Stock Ownership

Information. That information is incorporated into this

Item by reference.

Change in Control Arrangements

We are not aware of any arrangements which may result in a change in control of First Horizon Corporation.

Item 13.Certain Relationships and Related

Transactions, and Director

Independence

The information called for by this Item is presented in the

following sections of our 2026 Proxy Statement:

• within the Corporate Governance section: Related

Party Transaction Procedures and Transactions with

Related Persons

• within the Board Matters section: Independence &

Categorical Standards.

That information is incorporated into this Item by

reference.

Our independent directors and nominees are identified in

the Independence discussion within the Independence &

Categorical Standards section of our 2026 Proxy

Statement, referenced above.

Item 14.Principal Accountant Fees and Services

The Information called for by this Item is presented in the

following section of our 2026 Proxy Statement: Vote Item

3—Auditor Ratification. That information is incorporated

into this Item by reference.

   

	192	2025 FORM 10-K ANNUAL REPORT

ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES
Table of Contents

PART IV

Item 15.Exhibits and Financial Statement

Schedules

Financial Statements & Related Reports

Our consolidated financial statements, the notes thereto,

and the reports of management and independent public

accountants, as listed below, are incorporated herein by

reference to the pages of 2025 Financial Statements (Item

8) indicated in Table 15.1.

Table 15.1

Item 8 Page	Statement, Note, or Report Incorporated into Item 15
86	Report of Management on Internal Control over Financial Reporting
87	Reports of Independent Registered Public Accounting Firm
91	Consolidated Balance Sheets as of December 31, 2025 and 2024
92	Consolidated Statements of Income for the years ended December 31, 2025, 2024, and 2023
94	Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024, and 2023
95	Consolidated Statements of Changes in Equity for the years ended December 31, 2025, 2024, and 2023
96	Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024, and 2023
98	Notes to the Consolidated Financial Statements

Financial Statement Schedules

Not applicable.

Exhibits

In the Exhibit Table that follows: the “Filed Here” column

denotes each exhibit which is filed or furnished (as

applicable) with this report; the “Mngt Exh” column

denotes each exhibit that represents a management

contract or compensatory plan or arrangement required

to be identified as such; and the “Furnished” column

denotes each exhibit that is “furnished” pursuant to 18

U.S.C. Section 1350 or otherwise, and is not “filed” as part

of this report or as a separate disclosure document. All

references to “First Horizon National Corporation” or to

"First Tennessee

National Corporation" refer to us, under previous

corporate names.

In many agreements filed as exhibits, each party makes

representations and warranties to other parties. Those

representations and warranties are made only to and for

the benefit of those other parties in the context of a

business contract. Exceptions to such representations and

warranties may be partially or fully waived by such parties,

or not enforced by such parties, in their discretion. No

such representation or warranty may be relied upon by

any other person for any purpose.

   

	193	2025 FORM 10-K ANNUAL REPORT

ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES
Table of Contents

Table 15.2

10-K EXHIBIT TABLE

Exh No	Description of Exhibit to this 10-K Report	Filed Here	Mngt Exh	Furnis hed	Incorporated by Reference to
					Form	Exh No	Filing Date
	Corporate Exhibits
3.1	Amended and Restated Charter of First Horizon Corporation [2024]				8-K	3.1	7/24/2024
3.2	Bylaws of First Horizon Corporation, as amended and restated October 27, 2025				8-K	3.1	10/28/2025
4.1	Deposit Agreement, dated as of July 1, 2020, by and among First Horizon National Corporation, Equiniti Trust Company, as depositary, and the holders from time to time of the depositary receipts described therein [Series C]				8-K	4.2	7/2/2020
4.2	Form of Depositary Receipt--Series C (included as part of Exhibit 4.1 to this report)				8-K	4.2	7/2/2020
4.3	Deposit Agreement, dated as of May 28, 2020, by and among First Horizon National Corporation, Equiniti Trust Company, as depositary, and the holders from time to time of the depositary receipts described therein [Series E]				8-K	4.1	5/28/2020
4.4	Form of certificate representing Series E Preferred Stock				8-K	4.2	5/28/2020
4.5	Form of Depositary Receipt--Series E (included as part of Exhibit 4.3 to this report)				8-K	4.1	5/28/2020
4.6	Deposit Agreement, dated as of May 3, 2021, by and among First Horizon Corporation, Equiniti Trust Company, as depositary, and the holders from time to time of the depositary receipts described therein [Series F]				8-K	4.1	5/3/2021
4.7	Form of certificate representing the Series F Preferred Stock				8-K	4.2	5/3/2021
4.8	Form of Depositary Receipt-Series F representing the Depositary Shares (included as part of Exhibit 4.6 to this report)				8-K	4.1	5/3/2021
4.9	Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934				10-Q 2Q24	4.1	8/2/2024
4.10	FHN agrees to furnish to the Securities and Exchange Commission upon request a copy of each instrument defining the rights of the holders of the senior and subordinated long- term debt of FHN and its consolidated subsidiaries
	Equity-Based Award Plans
10.1 (a)	2021 Incentive Plan (as amended February 25, 2024)		X		Proxy 2024	App. A	3/11/2024
10.1 (b)	Equity Compensation Plan (as amended and restated April 26, 2016)		X		Proxy 2016	App. A	3/14/2016
10.1 (c)	IBERIABANK Corporation 2019 Stock Incentive Plan		X		10-K 2020	10.1(b)	2/25/2021
10.1 (d)	IBERIABANK Corporation 2016 Stock Incentive Plan		X		10-K 2020	10.1(c)	2/25/2021
	Performance-Based Equity Award Documents
10.2 (a)	Form of Grant Notice for Executive Performance Stock Units [2023]		X		10-K 2022	10.2(e)	3/1/2023
10.2 (b)	Form of Grant Notice for CEO Special Equity Performance Stock Units [2023]		X		8-K	10.3	8/4/2023
10.2 (c)	Form of Grant Notice for Executive Performance Stock Units [2024]		X		10-K 2023	10.2(e)	2/22/2024
10.2 (d)	Form of Grant Notice for Executive Special Performance Stock Units [2024]		X		10-K 2023	10.2(f)	2/22/2024
10.2 (e)	Form of Grant Notice for Executive Performance Stock Units [2025]		X		10-K 2024	10.2(f)	2/27/2025
10.2 (f)	Form of Grant Notice for Executive Performance Stock Units [2026]	X	X

   

	194	2025 FORM 10-K ANNUAL REPORT

ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES
Table of Contents

Exh No	Description of Exhibit to this 10-K Report	Filed Here	Mngt Exh	Furnis hed	Incorporated by Reference to
					Form	Exh No	Filing Date
	Stock Option Award Documents
10.3 (a)	Form of Grant Notice for Executive Stock Options [2019]		X		10-Q 1Q19	10.2	5/8/2019
10.3  (b)	Form of Grant Notice for Executive Stock Options [2020]		X		10-Q 1Q20	10.2	5/8/2020
10.3  (c)	Form of IBERIABANK Corporation Stock Option Agreement		X		10-K 2020	10.3(l)	2/25/2021
	Other Equity-Based Award Documents
10.4 (a)	Form of Grant Notice for Executive Restricted Stock Units [2021]		X		10-Q 1Q21	10.2	5/6/2021
10.4 (b)	Form of Grant Notice for Executive Restricted Stock Units [2023]		X		10-K 2022	10.4(e)	3/1/2023
10.4 (c)	Form of Grant Notice for Executive Restricted Stock Units [2024]		X		10-K 2023	10.2(e)	2/22/2024
10.4 (d)	Form of Grant Notice for Executive Restricted Stock Units [2025]		X		10-K 2024	10.4(d)	2/27/2025
10.4 (e)	Form of Grant Notice for Executive Restricted Stock Units [2026]	X	X
10.4 (f)	Form of Grant Notice for Executive Special Restricted Stock Units [2024]		X		10-K 2023	10.2(f)	2/22/2024
10.4 (g)	Form of Grant Notice for CEO Special Equity Restricted Stock Units [2023]		X		8-K	10.4	8/4/2023
10.4 (h)	Form of Grant Notice for Restricted Cash Units (Modified Retention Program, Cliff Vesting) [2023]		X		10-K 2023	10.2(h)	2/22/2024
10.4 (i)	Director Compensation Policy	X	X
	Management Cash Incentive Plan Documents
10.5 (a)	Executive Bonus Plan		X		8-K	10.1	10/27/2021
	Other Exhibits relating to Employment, Retirement, Severance, or Separation
10.6 (a)	Executive Change in Control Severance Plan		X		8-K	10.1	1/29/2021
10.6 (b)	Form of Pension Restoration Plan (amended and restated as of January 1, 2008)		X		10-Q 3Q07	10.7(e)	11/7/2007
10.6 (c)	Form of Amendment to Pension Restoration Plan		X		10-K 2009	10.7(d2)	2/26/2010
10.6 (d)	Form of Amendment No. 3 to Pension Restoration Plan		X		10-Q 3Q11	10.2	11/8/2011
10.6  (e)	Form of First Horizon Corporation Savings Restoration Plan		X		8-K	10.1	7/17/2012
10.6 (f)	Conformed copy of Employment Agreement dated August 3, 2023 with D. Bryan Jordan		X		8-K	10.2	8/4/2023
10.6 (g)	Retention Agreement of Anthony J. Restel, dated November 3, 2019		X		8-K	10.1	7/2/2020
	Documents Related to Other Deferral Plans and Programs
10.7 (a)	Directors and Executives Deferred Compensation Plan [originally adopted 1985], as amended and restated [2017], with forms of deferral agreement and 2007 addendum to deferral agreement		X		10-Q 2Q17	10.4	8/8/2017
10.7 (b)	Form of Amendment to Directors and Executives Deferred Compensation Plan		X		10-Q 3Q07	10.1(a3)	11/7/2007
10.7 (c)	Rate Applicable to Participating Directors under the Directors and Executives Deferred Compensation Plan		X		10-Q 3Q25	10.1	11/6/2025
10.7 (d)	Schedule of Deferral Agreements [Non-Employee Directors, 1995]		X		10-K 2018	10.7(d)	2/28/2019

   

	195	2025 FORM 10-K ANNUAL REPORT

ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES
Table of Contents

Exh No	Description of Exhibit to this 10-K Report	Filed Here	Mngt Exh	Furnis hed	Incorporated by Reference to
					Form	Exh No	Filing Date
10.7 (e)	Form of First Horizon National Corporation Deferred Compensation Plan as Amended and Restated [formerly known as First Tennessee National Corporation Nonqualified Deferred Compensation Plan]		X		10-Q 3Q07	10.1(c)	11/7/2007
10.7 (f)	Conformed copy of Amendment No. 1 to the First Horizon National Corporation Deferred Compensation Plan [removing "National" from the plan name]		X		S-8 333- 273513	4.5	7/28/2023
10.7 (g)	Form of Deferred Compensation Agreement used under FHN’s Equity Compensation Plan and First Tennessee National Corporation Non-Qualified Deferred Compensation Plan, along with form of Salary, Commission, and Annual Bonus Deferral Programs Overview, form of Deferred Stock Option (“DSO”) Program Summary, and description of share receipt deferral feature		X		8-K	10(z)	1/3/2005
	Other Exhibits related to Management or Directors
10.8 (a)	Survivor Benefits Plan, as amended and restated July 18, 2006		X		10-Q 3Q06	10.8	11/8/2006
10.8 (b)	Other Compensation and Benefit Arrangements for Non- employee Directors		X		10-K 2020	10.8(b)	2/25/2021
10.8 (c)	Description of Long-Term Disability Program		X		10-Q 2Q17	10.2	8/8/2017
10.8 (d)	Form of Indemnity Agreement with directors and executive officers [2004 form]		X		10-Q 2Q17	10.3	8/8/2017
10.8 (e)	Form of amendment to 2004 form of Indemnity Agreement with directors and executive officers		X		8-K	10.4	4/28/2008
10.8 (f)	Form of Indemnity Agreement with directors and executive officers (April 2008 revision)		X		8-K	10.5	4/28/2008
10.8 (g)	List of Certain Benefits Available to Certain Executive Officers	X	X
	Other Exhibits
14	Code of Ethics for Senior Financial Officers				10-K 2022	14	3/1/2023
19.1	Inside Information Policy				10-Q 2Q23	19.1	8/4/2023
19.2	Inside Information Procedures				10-K 2024	19.2	2/27/2025
21	Subsidiaries of First Horizon Corporation	X
23	Accountant’s Consents	X
24	Power of Attorney	X
31(a)	Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002)	X
31(b)	Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002)	X
32(a)	18 USC 1350 Certifications of CEO (pursuant to Section 906 of Sarbanes-Oxley Act of 2002)	X		X
32(b)	18 USC 1350 Certifications of CFO (pursuant to Section 906 of Sarbanes-Oxley Act of 2002)	X		X
97	Erroneously Awarded Compensation Recovery Policy				10-K 2023	97	2/22/2024
	XBRL Exhibits

   

	196	2025 FORM 10-K ANNUAL REPORT

ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES
Table of Contents

Exh No	Description of Exhibit to this 10-K Report	Filed Here	Mngt Exh	Furnis hed	Incorporated by Reference to
					Form	Exh No	Filing Date
101	The following financial information from First Horizon Corporation’s Annual Report on Form 10-K for the year ended December 31, 2025, formatted in Inline XBRL: (i) Consolidated Balance Sheets at December 31, 2025 and 2024; (ii) Consolidated Statements of Income for the Years Ended December 31, 2025, 2024, and 2023; (iii) Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2025 , 2024, and 2023;  (iv) Consolidated Statements of Changes in Equity for the Years Ended December 31, 2025 , 2024, and 2023 ; (v) Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023; and (vi) Notes to the Consolidated Financial Statements.	X
101. INS	XBRL Instance Document-the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	X
101. SCH	Inline XBRL Taxonomy Extension Schema	X
101. CAL	Inline XBRL Taxonomy Extension Calculation Linkbase	X
101. DEF	Inline XBRL Taxonomy Extension Definition Linkbase	X
101. LAB	Inline XBRL Taxonomy Extension Label Linkbase	X
101. PRE	Inline XBRL Taxonomy Extension Presentation Linkbase	X
104	Cover Page Interactive Data File, formatted in Inline XBRL (included in Exhibit 101)	X

Item 16. Form 10-K Summary

Not applicable.

   

	197	2025 FORM 10-K ANNUAL REPORT

SIGNATURES
Table of Contents

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this

report to be signed on its behalf by the undersigned, thereunto duly authorized.

		FIRST HORIZON CORPORATION
Date: February 26, 2026		By:		/s/ Hope Dmuchowski
		Name:		Hope Dmuchowski
		Title:		Senior Executive Vice President and Chief Financial Officer
				(Duly Authorized Officer and Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature*	Title	Date*		Signature*	Title	Date*
D. Bryan Jordan D. Bryan Jordan	Chairman of the Board, President & Chief Executive Officer, and a Director (principal executive officer)	*		Hope Dmuchowski Hope Dmuchowski	Senior Executive Vice President and Chief Financial Officer (principal financial officer)	*
Jeff L. Fleming Jeff L. Fleming	Executive Vice President and Chief Accounting Officer (principal accounting officer)	*		Jeffrey J. Brown Jeffrey J. Brown	Director	*
Velia Carboni Velia Carboni	Director	*		John C. Compton John C. Compton	Director	*
Wendy P. Davidson Wendy P. Davidson	Director	*		John W. Dietrich John W. Dietrich	Director	*
J. Michael Kemp, Sr. J. Michael Kemp, Sr.	Director	*		Rick E. Maples Rick E. Maples	Director	*
Sital K. Mody Sital K. Mody	Director	*		Michael L. Moehn Michael L. Moehn	Director	*
Vicki R. Palmer Vicki R. Palmer	Director	*		Colin V. Reed Colin V. Reed	Director	*
Cecelia D. Stewart Cecelia D. Stewart	Director	*		R. Eugene Taylor R. Eugene Taylor	Director	*

	*By: /s/ Shannon M. Hernandez	February 26, 2026
	Shannon M. Hernandez
	As Attorney-in-Fact