First Horizon Corp Files 10-Q for Period Ending March 31, 2024

Ticker: FHN-PH · Form: 10-Q · Filed: May 3, 2024 · CIK: 36966

Sentiment: neutral

Topics: 10-Q, Financials, First Horizon Corp, SEC Filing, Quarterly Report

TL;DR

<b>First Horizon Corp has filed its quarterly report (10-Q) for the period ending March 31, 2024, detailing its financial position and operations.</b>

AI Summary

FIRST HORIZON CORP (FHN-PH) filed a Quarterly Report (10-Q) with the SEC on May 3, 2024. The filing is a 10-Q for First Horizon Corp, covering the period ending March 31, 2024. The company's principal executive offices are located at 165 Madison Avenue, Memphis, TN 38103. First Horizon Corp was formerly known as First Horizon National Corp and First Tennessee National Corp. The filing includes data related to common stock, preferred stock, additional paid-in capital, retained earnings, and accumulated other comprehensive income. The company is incorporated in Tennessee with its fiscal year ending on December 31.

Why It Matters

For investors and stakeholders tracking FIRST HORIZON CORP, this filing contains several important signals. This 10-Q filing provides investors and analysts with the latest financial performance and condition of First Horizon Corp, crucial for evaluating investment decisions. Understanding the details within this report, such as changes in equity and historical company names, is important for tracking the company's evolution and financial health.

Risk Assessment

Risk Level: — FIRST HORIZON CORP shows moderate risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain any immediate red flags or significant negative developments.

Analyst Insight

Review the detailed financial statements and equity changes within the 10-Q to assess First Horizon Corp's current financial health and operational performance.

Key Numbers

Key Players & Entities

FAQ

When did FIRST HORIZON CORP file this 10-Q?

FIRST HORIZON CORP filed this Quarterly Report (10-Q) with the SEC on May 3, 2024.

What is a 10-Q filing?

A 10-Q is a quarterly financial report with unaudited financials, management discussion, and interim business updates. This particular 10-Q was filed by FIRST HORIZON CORP (FHN-PH).

Where can I read the original 10-Q filing from FIRST HORIZON CORP?

You can access the original filing directly on the SEC's EDGAR system. The filing is publicly available and includes all exhibits and attachments submitted by FIRST HORIZON CORP.

What are the key takeaways from FIRST HORIZON CORP's 10-Q?

FIRST HORIZON CORP filed this 10-Q on May 3, 2024. Key takeaways: The filing is a 10-Q for First Horizon Corp, covering the period ending March 31, 2024.. The company's principal executive offices are located at 165 Madison Avenue, Memphis, TN 38103.. First Horizon Corp was formerly known as First Horizon National Corp and First Tennessee National Corp..

Is FIRST HORIZON CORP a risky investment based on this filing?

Based on this 10-Q, FIRST HORIZON CORP presents a moderate-risk profile. The filing is a standard quarterly report (10-Q) and does not contain any immediate red flags or significant negative developments.

What should investors do after reading FIRST HORIZON CORP's 10-Q?

Review the detailed financial statements and equity changes within the 10-Q to assess First Horizon Corp's current financial health and operational performance. The overall sentiment from this filing is neutral.

How does FIRST HORIZON CORP compare to its industry peers?

First Horizon Corp operates within the National Commercial Banks industry (SIC 6021). This sector is characterized by deposit-taking, lending, and other financial services.

Are there regulatory concerns for FIRST HORIZON CORP?

As a publicly traded company, First Horizon Corp is subject to the reporting requirements of the Securities and Exchange Commission (SEC), including the filing of quarterly (10-Q) and annual (10-K) reports.

Industry Context

First Horizon Corp operates within the National Commercial Banks industry (SIC 6021). This sector is characterized by deposit-taking, lending, and other financial services.

Regulatory Implications

As a publicly traded company, First Horizon Corp is subject to the reporting requirements of the Securities and Exchange Commission (SEC), including the filing of quarterly (10-Q) and annual (10-K) reports.

What Investors Should Do

  1. Analyze the balance sheet and equity sections for changes in capital structure.
  2. Compare the reported period's financial data with previous periods to identify trends.
  3. Note any disclosures regarding accounting standards updates or significant business events.

Key Dates

Glossary

10-Q
A quarterly report required by the U.S. Securities and Exchange Commission (SEC). (Provides a comprehensive overview of a company's financial performance during a specific quarter.)
Conformed Period of Report
The period for which the financial information in the filing is presented. (Indicates the specific dates covered by the financial statements in the report.)

Year-Over-Year Comparison

This filing represents the first quarterly report for First Horizon Corp in 2024, following the year-end 10-K filing.

Filing Stats: 4,581 words · 18 min read · ~15 pages · Grade level 20 · Accepted 2024-05-03 16:17:57

Filing Documents

Forward-Looking Statements

Forward-Looking Statements 3 Non-GAAP Information 4

Financial Information

Part I. Financial Information 5

Financial Statements

Item 1. Financial Statements 5

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 68

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 101

Controls and Procedures

Item 4. Controls and Procedures 101

Other Information

Part II. Other Information 102

Legal Proceedings

Item 1. Legal Proceedings 102

Risk Factors

Item 1A. Risk Factors 102

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 102

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 102

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 102

Other Information

Item 5. Other Information 103

Exhibits

Item 6. Exhibits 104

Signatures

Signatures 106 GLOSSARY OF ACRONYMS & TERMS Table of Contents Glossary of Acronyms and Terms 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 Bank First Horizon Bank BOLI Bank-owned life insurance C&I Commercial, financial, and industrial loan portfolio CBF Capital Bank Financial CECL Current expected credit loss CEO Chief Executive Officer CMO Collateralized mortgage obligations CODM Chief Operating Decision-Maker Company First Horizon Corporation Corporation First Horizon Corporation CRE Commercial Real Estate CRMC Credit Risk Management Committee DTA Deferred tax asset DTL Deferred tax liability EAD Exposure as default EPS Earnings per share Fannie Mae Federal National Mortgage Association FASB Financial Accounting Standards Board 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 GAAP Generally accepted accounting principles (U.S.) GHG Greenhouse Gas GNMA Government National Mortgage Association or Ginnie Mae GSE Government sponsored enterprises, in this report references Fannie Mae and Freddie Mac HELOC Home equity line of credit HFS Held for Sale HTC Historic tax credit HTM Held to maturity IBKC IBERIABANK Corporation IBKC merger FH

FORWARD-LOOKING STATEMENTS AND NON-GAAP INFORMATION

FORWARD-LOOKING STATEMENTS AND NON-GAAP INFORMATION Table of Contents

Forward-Looking Statements

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 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. The words "believe," "expect," "anticipate," "intend," "estimate," "should," "is likely," "will," "going forward," and other expressions that indicate future events and trends identify forward-looking statements. 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. Examples of uncertainties and contingencies include, among other important factors: global, general 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; potential requirements for FHN to repurchase, or compensate for losses from, previously sold or securitized mortgages or securities based on such mortgages; 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; 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 f

FORWARD-LOOKING STATEMENTS AND NON-GAAP INFORMATION

FORWARD-LOOKING STATEMENTS AND NON-GAAP INFORMATION Table of Contents 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, adjusted tangible common equity to risk-weighted assets, and tangible book value per common share. Table I.2.23 a ppearing in the MD&A (Item 2 of Part I) of this report 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, provide a meaningful base for comparability to other financial institutions subject to the same regulations as FHN, as demonstrated by their use by banking regulators in reviewing capital adequacy of financial institutions. 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 report 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 bas

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets (unaudited) 6 Consolidated Statements of Income (unaudited) 7 Consolidated Statements of Comprehensive Income (Loss) (unaudited) 9 Consolidated Statements of Changes in Equity (unaudited) 10 Consolidated Statements of Cash Flows (unaudited) 11 Notes to the Consolidated Financial Statements (unaudited) 12 Note 1 Basis of Presentation and Accounting Policies 12 Note 2 Investment Securities 15 Note 3 Loans and Leases 18 Note 4 Allowance for Credit Losses 27 Note 5 Mortgage Banking Activity 29 Note 6 Goodwill and Other Intangible Assets 30 Note 7 Preferred Stock 31 Note 8 Components of Other Comprehensive Income (Loss) 32 Note 9 Earnings Per Share 33 Note 10 Contingencies and Other Disclosures 34 Note 11 Retirement Plans 36 Note 12 Business Segment Information 37 Note 13 Variable Interest Entities 40 Note 14 Derivatives 43 Note 15 Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions 50 Note 16 Fair Value of Assets and Liabilities 52 Note 17 Subsequent Events 67 5 1Q24 FORM 10-Q REPORT

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, (Dollars in millions, except per share amounts) 2024 2023 Assets Cash and due from banks $ 749 $ 1,012 Interest-bearing deposits with banks 1,885 1,328 Federal funds sold and securities purchased under agreements to resell 817 719 Trading securities 1,161 1,412 Securities available for sale at fair value 8,148 8,391 Securities held to maturity (fair value of $ 1,131 and $ 1,161 , respectively) 1,311 1,323 Loans held for sale (including $ 84 and $ 68 at fair value, respectively) 395 502 Loans and leases 61,753 61,292 Allowance for loan and lease losses ( 787 ) ( 773 ) Net loans and leases 60,966 60,519 Premises and equipment 586 590 Goodwill 1,510 1,510 Other intangible assets 175 186 Other assets 4,096 4,169 Total assets $ 81,799 $ 81,661 Liabilities Noninterest-bearing deposits $ 16,410 $ 17,204 Interest-bearing deposits 49,331 48,576 Total deposits 65,741 65,780 Trading liabilities 467 509 Short-term borrowings 2,703 2,549 Term borrowings 1,165 1,150 Other liabilities 2,550 2,382 Total liabilities 72,626 72,370 Equity Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 26,750 shares 520 520 Common stock, $ 0.625 par value; authorized 700,000,000 shares; issued 548,636,986 and 558,838,694 shares, respectively 343 349 Capital surplus 5,214 5,351 Retained earnings 4,072 3,964 Accumulated other comprehensive loss, net ( 1,271 ) ( 1,188 ) FHN shareholders' equity 8,878 8,996 Noncontrolling interest 295 295 Total equity 9,173 9,291 Total liabilities and equity $ 81,799 $ 81,661 See accompanying notes to consolidated financial statements. 6 1Q24 FORM 10-Q REPORT

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF INCOME Three Months Ended March 31, (Dollars in millions, except per share data; shares in thousands) (Unaudited) 2024 2023 Interest income Interest and fees on loans and leases $ 952 $ 806 Interest and fees on loans held for sale 9 11 Interest on investment securities 60 62 Interest on trading securities 20 20 Interest on other earning assets 32 21 Total interest income 1,073 920 Interest expense Interest on deposits 398 171 Interest on trading liabilities 5 3 Interest on short-term borrowings 28 38 Interest on term borrowings 17 20 Total interest expense 448 232 Net interest income 625 688 Provision for credit losses 50 50 Net interest income after provision for credit losses 575 638 Noninterest income Fixed income 52 39 Deposit transactions and cash management 44 42 Brokerage, management fees and commissions 24 22 Card and digital banking fees 19 20 Other service charges and fees 13 13 Trust services and investment management 11 11 Mortgage banking income 9 5 Other income 22 19 Total noninterest income 194 171 Noninterest expense Personnel expense 301 271 Net occupancy expense 31 31 Computer software 30 28 Deposit insurance expense 24 12 Operations services 21 22 Legal and professional fees 14 8 Contract employment and outsourcing 13 12 Amortization of intangible assets 11 12 Equipment expense 11 11 Advertising and public relations 8 14 Communications and delivery 8 9 Other expense 43 48 Total noninterest expense 515 478 Income before income taxes 254 331 Income tax expense 57 76 Net income $ 197 $ 255 Net income attributable to noncontrolling interest 5 4 Net income attributable to controlling interest $ 192 $ 251 Preferred stock dividends 8 8 Net income available to common shareholders $ 184 $ 243 7 1Q24 FORM 10-Q REPORT

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF INCOME (continued) Basic earnings per common share $ 0.33 $ 0.45 Diluted earnings per common share $ 0.33 $ 0.43 Weighted average common shares 554,977 536,938 Diluted average common shares 557,873 571,991 See accompanying notes to consolidated financial statements. 8 1Q24 FORM 10-Q REPORT

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Three Months Ended March 31, (Dollars in millions) (Unaudited) 2024 2023 Net income $ 197 $ 255 Other comprehensive income (loss), net of tax: Net unrealized gains (losses) on securities available for sale ( 55 ) 114 Net unrealized gains (losses) on cash flow hedges ( 30 ) 44 Net unrealized gains (losses) on pension and other postretirement plans 2 2 Other comprehensive income (loss) ( 83 ) 160 Comprehensive income (loss) 114 415 Comprehensive income attributable to noncontrolling interest 5 4 Comprehensive income (loss) attributable to controlling interest $ 109 $ 411 Income tax expense (benefit) of items included in other comprehensive income: Net unrealized gains (losses) on securities available for sale $ ( 18 ) $ 36 Net unrealized gains (losses) on cash flow hedges ( 10 ) 14 Net unrealized gains (losses) on pension and other postretirement plans 1 1 See accompanying notes to consolidated financial statements. 9 1Q24 FORM 10-Q REPORT

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Three Months Ended March 31, 2024 Preferred Stock Common Stock (Dollars in millions, except per share data; shares in thousands) (unaudited) Shares Amount Shares Amount Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) (a) Noncontrolling Interest Total Balance, December 31, 2023 26,750 $ 520 558,839 $ 349 $ 5,351 $ 3,964 $ ( 1,188 ) $ 295 $ 9,291 Adjustment to reflect adoption of ASU 2023-02 — — — — — 8 — — 8 Net income — — — — — 192 — 5 197 Other comprehensive income (loss) — — — — — — ( 83 ) — ( 83 ) Cash dividends declared: Preferred stock — — — — — ( 8 ) — — ( 8 ) Common stock ($ 0.15 per share) — — — — — ( 84 ) — — ( 84 ) Common stock repurchased (b) — — ( 11,052 ) ( 7 ) ( 152 ) — — — ( 159 ) Excise tax on share repurchases — — — — ( 2 ) — — — ( 2 ) Common stock issued for: Stock options exercised and restricted stock awards — — 850 — — — — — — Stock-based compensation expense — — — 1 17 — — — 18 Dividends declared - noncontrolling interest of subsidiary preferred stock — — — — — — — ( 5 ) ( 5 ) Balance, March 31, 2024 26,750 $ 520 548,637 $ 343 $ 5,214 $ 4,072 $ ( 1,271 ) $ 295 $ 9,173 (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) Includes $ 154 million repurchased under our general purchase program . Three Months Ended March 31, 2023 Preferred Stock Common Stock (Dollars in millions, except per share data; shares in thousands) (unaudited) Shares Amount Shares Amount Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) (a) Noncontrolling Interest Total Balance, December 31, 2022 31,686 $ 1,014 537,101 $ 336 $ 4,840 $ 3,430 $ ( 1,368 ) $ 295 $ 8,547 Adjustment to reflect adoption of ASU 2022-02 — — — — — 4 — — 4

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended March 31, (Dollars in millions) (Unaudited) 2024 2023 Operating Activities Net income $ 197 $ 255 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Provision for credit losses 50 50 Deferred income tax expense (benefit) ( 57 ) 6 Depreciation and amortization of premises and equipment 14 14 Amortization of intangible assets 11 12 Net other amortization and accretion 1 4 Net (increase) decrease in trading securities 591 375 Net (increase) decrease in derivatives 4 ( 266 ) Stock-based compensation expense 18 22 Loans held for sale: Purchases and originations ( 608 ) ( 477 ) Gross proceeds from settlements and sales 379 293 (Gain) loss due to fair value adjustments and other ( 6 ) 2 Other operating activities, net 244 ( 359 ) Total adjustments 641 ( 324 ) Net cash provided by (used in) operating activities 838 ( 69 ) Investing Activities Proceeds from maturities of securities available for sale 183 244 Purchases of securities available for sale ( 21 ) ( 221 ) Proceeds from prepayments of securities held to maturity 13 10 Purchases of premises and equipment ( 10 ) ( 5 ) Net (increase) decrease in loans and leases ( 488 ) ( 949 ) Net (increase) decrease in interest-bearing deposits with banks ( 557 ) ( 1,103 ) Other investing activities, net 4 2 Net cash provided (used in) by investing activities ( 876 ) ( 2,022 ) Financing Activities Common stock: Stock options exercised — 5 Cash dividends paid ( 85 ) ( 83 ) Repurchase of shares ( 159 ) ( 4 ) Preferred stock: Cash dividends paid - preferred stock - noncontrolling interest ( 5 ) ( 4 ) Cash dividends paid - preferred stock ( 8 ) ( 8 ) Net increase (decrease) in deposits ( 39 ) ( 2,049 ) Net increase (decrease) in short-term borrowings 154 3,979 Proceeds from issuance of term borrowings 11 — Increases (decreases) i

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents NOTE 1—BASIS OF PRESENTATION & ACCOUNTING POLICIES Notes to the Consolidated Financial Statements (Unaudited) Note 1— Basis of Presentation and Accounting Policies The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes necessary for complete financial statements in accordance with GAAP. In the opinion of management, the accompanying unaudited consolidated financial statements contain all significant adjustments, consisting of normal and recurring items, considered necessary for fair presentation. These interim financial statements should be read in conjunction with FHN's audited consolidated financial statements and notes in FHN's Annual Report on Form 10-K for the year ended December 31, 2023. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts reported in prior years have been reclassified to conform to the current period presentation. See the Glossary of Acronyms and Terms included in this Report for terms used herein. Accounting Changes With Extended Transition Periods In March 2020, the FASB issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting" which provides several optional expedients and exceptions to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The provisions of ASU 2020-04 primarily affect 1) contract modifications (e.g., loans, leases, debt, and derivatives) made in anticipation that a reference rate (e.g., LIBOR) will be discontinued and 2) the application of hedge accounting for

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