First Horizon Corp. Files Q2 2024 10-Q

TL;DR

FHN Q2 10-Q filed. Details on common and preferred stock (Series B, C).

AI Summary

First Horizon Corp. reported its financial results for the period ending June 30, 2024. The company's filing details its capital stock and preferred stock series, including Series B and Series C, with specific par values and share representations. The report covers the fiscal period from January 1, 2024, to June 30, 2024.

Why It Matters

This filing provides investors with crucial details on First Horizon Corp.'s capital structure and preferred stock, essential for understanding the company's financial health and potential risks.

Risk Assessment

Risk Level: low — This filing is a standard quarterly report and does not contain immediate red flags.

Key Players & Entities

• FIRST HORIZON CORP (company) — Filer
• 0000036966 (company) — Central Index Key
• 20240630 (date) — Period of Report
• 20240802 (date) — Filing Date
• 165 MADISON AVENUE (address) — Business Address
• MEMPHIS (location) — City
• TN (location) — State
• 38103 (postal_code) — ZIP Code
• 9018186232 (phone_number) — Business Phone

FAQ

Key Financial Figures

• $0.625 — ) Name of Exchange on which Registered $0.625 Par Value Common Capital Stock FHN New

Filing Documents

• fhn-20240630.htm (10-Q) — 6336KB
• a2q24xexh4x1xdescriptionof.htm (EX-4.1) — 391KB
• a2q24xexh10x1xdirectorcomp.htm (EX-10.1) — 38KB
• exhibit31a2q2024.htm (EX-31.A) — 10KB
• exhibit31b2q2024.htm (EX-31.B) — 10KB
• exhibit32a2q2024.htm (EX-32.A) — 5KB
• exhibit32b2q2024.htm (EX-32.B) — 5KB
• fh_oneline-cmyka.jpg (GRAPHIC) — 823KB
• fhn-20240630_g1.jpg (GRAPHIC) — 18KB
• fhn-20240630_g2.jpg (GRAPHIC) — 5KB
• 0000036966-24-000084.txt ( ) — 29312KB
• fhn-20240630.xsd (EX-101.SCH) — 102KB
• fhn-20240630_cal.xml (EX-101.CAL) — 158KB
• fhn-20240630_def.xml (EX-101.DEF) — 664KB
• fhn-20240630_lab.xml (EX-101.LAB) — 1171KB
• fhn-20240630_pre.xml (EX-101.PRE) — 945KB
• fhn-20240630_htm.xml (XML) — 7150KB

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 73

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 111

Controls and Procedures

Item 4. Controls and Procedures 111

Other Information

Part II. Other Information 112

Legal Proceedings

Item 1. Legal Proceedings 112

Risk Factors

Item 1A. Risk Factors 112

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 112

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 112

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 112

Other Information

Item 5. Other Information 112

Exhibits

Item 6. Exhibits 113

Signatures

Signatures 115 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, 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. 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 and could cause our actual future results and outcomes to differ materially from those contemplated by forward-looking statements or historical performance. 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; 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; competition within and outside the fi

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.2.26 appe aring 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 (unaudited) 9 Consolidated Statements of Changes in Equity (unaudited) 10 Consolidated Statements of Cash Flows (unaudited) 12 Notes to the Consolidated Financial Statements (unaudited) 13 Note 1 Basis of Presentation and Accounting Policies 13 Note 2 Investment Securities 16 Note 3 Loans and Leases 19 Note 4 Allowance for Credit Losses 28 Note 5 Mortgage Banking Activity 31 Note 6 Goodwill and Other Intangible Assets 32 Note 7 Preferred Stock 33 Note 8 Components of Other Comprehensive Income (Loss) 34 Note 9 Earnings Per Share 36 Note 10 Contingencies and Other Disclosures 37 Note 11 Retirement Plans 39 Note 12 Business Segment Information 40 Note 13 Variable Interest Entities 45 Note 14 Derivatives 48 Note 15 Master Netting and Similar Agreements - Repurchase, Reverse Repurchase, and Securities Borrowing Transactions 55 Note 16 Fair Value of Assets and Liabilities 57 5 2Q24 FORM 10-Q REPORT

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, (Dollars in millions, except per share amounts) 2024 2023 Assets Cash and due from banks $ 969 $ 1,012 Interest-bearing deposits with banks 1,452 1,328 Federal funds sold and securities purchased under agreements to resell 487 719 Trading securities 1,249 1,412 Securities available for sale at fair value 7,924 8,391 Securities held to maturity (fair value of $ 1,108 and $ 1,161 , respectively) 1,297 1,323 Loans held for sale (including $ 117 and $ 68 at fair value, respectively) 471 502 Loans and leases 62,781 61,292 Allowance for loan and lease losses ( 821 ) ( 773 ) Net loans and leases 61,960 60,519 Premises and equipment 584 590 Goodwill 1,510 1,510 Other intangible assets 165 186 Other assets 4,162 4,169 Total assets $ 82,230 $ 81,661 Liabilities Noninterest-bearing deposits $ 16,348 $ 17,204 Interest-bearing deposits 48,446 48,576 Total deposits 64,794 65,780 Trading liabilities 423 509 Short-term borrowings 4,515 2,549 Term borrowings 1,175 1,150 Other liabilities 2,368 2,382 Total liabilities 73,275 72,370 Equity Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 16,750 and 26,750 shares, respectively 426 520 Common stock, $ 0.625 par value; authorized 700,000,000 shares; issued 536,875,750 and 558,838,694 shares, respectively 336 349 Capital surplus 5,007 5,351 Retained earnings 4,172 3,964 Accumulated other comprehensive loss, net ( 1,281 ) ( 1,188 ) FHN shareholders' equity 8,660 8,996 Noncontrolling interest 295 295 Total equity 8,955 9,291 Total liabilities and equity $ 82,230 $ 81,661 See accompanying notes to consolidated financial statements. 6 2Q24 FORM 10-Q REPORT

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF INCOME Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions, except per share data; shares in thousands) (Unaudited) 2024 2023 2024 2023 Interest income Interest and fees on loans and leases $ 975 $ 877 $ 1,927 $ 1,683 Interest and fees on loans held for sale 9 14 17 24 Interest on investment securities 59 63 119 125 Interest on trading securities 21 18 42 38 Interest on other earning assets 29 43 60 64 Total interest income 1,093 1,015 2,165 1,934 Interest expense Interest on deposits 399 265 797 436 Interest on trading liabilities 7 2 12 5 Interest on short-term borrowings 41 99 70 136 Interest on term borrowings 17 19 33 39 Total interest expense 464 385 912 616 Net interest income 629 630 1,253 1,318 Provision for credit losses 55 50 105 100 Net interest income after provision for credit losses 574 580 1,148 1,218 Noninterest income Deposit transactions and cash management 44 45 88 87 Fixed income 40 30 92 69 Brokerage, management fees and commissions 25 22 49 44 Card and digital banking fees 20 21 38 40 Other service charges and fees 14 14 27 27 Trust services and investment management 12 12 24 24 Mortgage banking income 10 6 19 11 Gain on merger termination — 225 — 225 Securities gains (losses), net 1 — 1 1 Other income 20 25 43 43 Total noninterest income 186 400 381 571 Noninterest expense Personnel expense 279 285 580 556 Net occupancy expense 31 30 62 61 Computer software 29 28 59 55 Operations services 23 22 45 44 Legal and professional fees 18 12 33 20 Deposit insurance expense 16 13 40 26 Contract employment and outsourcing 14 12 28 24 Advertising and public relations 14 17 22 31 Amortization of intangible assets 11 12 22 24 Equipment expense 11 10 22 21 Communications and delivery 8 9 16 18 Contributions 1 53 2 57 Other expense 45 52 84 96 Total noninterest expense 500 555 1,015 1,033 Income before i

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF INCOME (continued) Basic earnings per common share $ 0.34 $ 0.59 $ 0.67 $ 1.04 Diluted earnings per common share $ 0.34 $ 0.56 $ 0.67 $ 1.00 Weighted average common shares 543,981 539,120 549,479 538,035 Diluted average common shares 547,093 560,878 552,539 562,188 See accompanying notes to consolidated financial statements. 8 2Q24 FORM 10-Q REPORT

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) (Unaudited) 2024 2023 2024 2023 Net income $ 204 $ 329 $ 401 $ 585 Other comprehensive income (loss), net of tax: Net unrealized gains (losses) on securities available for sale ( 10 ) ( 105 ) ( 65 ) 9 Net unrealized gains (losses) on cash flow hedges ( 2 ) ( 46 ) ( 32 ) ( 2 ) Net unrealized gains (losses) on pension and other postretirement plans 2 — 4 2 Other comprehensive income (loss) ( 10 ) ( 151 ) ( 93 ) 9 Comprehensive income (loss) 194 178 308 594 Comprehensive income attributable to noncontrolling interest 5 4 10 9 Comprehensive income (loss) attributable to controlling interest $ 189 $ 174 $ 298 $ 585 Income tax expense (benefit) of items included in other comprehensive income: Net unrealized gains (losses) on securities available for sale $ ( 3 ) $ ( 34 ) $ ( 22 ) $ 2 Net unrealized gains (losses) on cash flow hedges ( 1 ) ( 15 ) ( 10 ) ( 1 ) Net unrealized gains (losses) on pension and other postretirement plans 1 1 1 1 See accompanying notes to consolidated financial statements. 9 2Q24 FORM 10-Q REPORT

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Six Months Ended June 30, 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 common stock repurchased — — — — ( 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 Net income — — — — — 199 — 5 204 Other comprehensive income (loss) — — — — — — ( 10 ) — ( 10 ) Cash dividends declared: Preferred stock — — — — — ( 8 ) — — ( 8 ) Common stock ($ 0.15 per share) — — — — — ( 84 ) — — ( 84 ) Series D preferred stock redemption ( 10,000 ) ( 94 ) — — — ( 6 ) — — ( 100 ) Excise tax on preferred stock redemption — — — — — ( 1 ) — — ( 1 ) Common stock repurchased (b) — — ( 14,896 ) ( 9 ) ( 219 ) — — — ( 228 ) Excise tax on common stock repurchased — — — — ( 1 ) — — — ( 1 ) Common stock issued for: Stock options exercised and restricted stock awards — — 3,135 1 1 — — — 2 Stock-based compensation expense — — — 1 12 — — — 13 Dividends declared - noncontrolling interest of subsidiary preferred st

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (continued) Six Months Ended June 30, 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 Net income — — — — — 251 — 4 255 Other comprehensive income — — — — — — 160 — 160 Cash dividends declared: Preferred stock — — — — — ( 8 ) — — ( 8 ) Common stock ($ 0.15 per share) — — — — — ( 82 ) — — ( 82 ) Common stock repurchased — — ( 159 ) — ( 4 ) — — — ( 4 ) Common stock issued for: Stock options exercised and restricted stock awards — — 677 — 5 — — — 5 Stock-based compensation expense — — — — 22 — — — 22 Dividends declared - noncontrolling interest of subsidiary preferred stock — — — — — — — ( 4 ) ( 4 ) Balance, March 31, 2023 31,686 1,014 537,619 336 4,863 3,595 ( 1,208 ) 295 8,895 Net income — — — — — 325 — 4 329 Other comprehensive income — — — — — — ( 151 ) — ( 151 ) Cash dividends declared: Preferred stock — — — — — ( 8 ) — — ( 8 ) Common stock ($ 0.15 per share) — — — — — ( 82 ) — — ( 82 ) Preferred stock conversion ( 4,936 ) ( 494 ) — — — — — — ( 494 ) Common stock repurchased — — ( 575 ) — ( 5 ) — — — ( 5 ) Common stock issued for: Stock options exercised and restricted stock awards — — 1,872 — — — — — — Series G preferred stock conversion — — 19,743 12 481 — — — 493 Stock-based compensation expense — — — 1 ( 14 ) — — — ( 13 ) Dividends declared - noncontrolling interest of subsidiary preferred stock — — — — — — — ( 4 ) ( 4 ) Balance, June 30, 2023 26,750 $ 520 558,659 $ 349 $ 5,325 $ 3,830 $ ( 1,359 ) $ 295 $ 8,960 (a) Due to the nature of the preferred stock is

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended June 30, (Dollars in millions) (Unaudited) 2024 2023 Operating Activities Net income $ 401 $ 585 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Provision for credit losses 105 100 Deferred income tax expense (benefit) ( 26 ) 1 Depreciation and amortization of premises and equipment 27 28 Amortization of intangible assets 22 24 Net other amortization and accretion 2 9 Net (increase) decrease in trading securities 712 860 Net (increase) decrease in derivatives 4 ( 298 ) Stock-based compensation expense 31 8 Securities (gains) losses, net ( 1 ) ( 1 ) Loans held for sale: Purchases and originations ( 1,372 ) ( 1,286 ) Gross proceeds from settlements and sales 867 527 (Gain) loss due to fair value adjustments and other ( 15 ) 16 Other operating activities, net ( 69 ) ( 337 ) Total adjustments 287 ( 349 ) Net cash provided by (used in) operating activities 688 236 Investing Activities Proceeds from maturities of securities available for sale 391 451 Purchases of securities available for sale ( 24 ) ( 221 ) Proceeds from prepayments of securities held to maturity 28 24 Purchases of premises and equipment ( 21 ) ( 14 ) Net (increase) decrease in loans and leases ( 1,539 ) ( 3,215 ) Net (increase) decrease in interest-bearing deposits with banks ( 124 ) ( 3,139 ) Other investing activities, net 5 8 Net cash provided by (used in) investing activities ( 1,284 ) ( 6,106 ) Financing Activities Common stock: Stock options exercised 1 5 Cash dividends paid ( 171 ) ( 167 ) Repurchase of shares ( 387 ) ( 10 ) Preferred stock: Series D preferred stock redemption ( 100 ) — Cash dividends paid - preferred stock - noncontrolling interest ( 10 ) ( 8 ) Cash dividends paid - preferred stock ( 16 ) ( 16 ) Net increase (decrease) in deposits ( 986 ) 1,944 Net increase (decrease) in

, ITEM 1. FINANCIAL STATEMENTS

PART I, ITEM 1. FINANCIAL STATEMENTS Table of Contents NOTE 1—BASIS OF PRESENTATION & ACCOUNTING POLICIES

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