FIRST HORIZON CORP (FHN)

Item 2.     Management's Discussion and

Analysis of Financial Condition and Results of Operations

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 March 31, 2026, 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 unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements in Part I, Item 1, as well as other information contained in this document and FHN's 2025 Annual Report on Form 10-K.

Executive Overview

Significant Events and Transactions

On March 12, 2026, FHN issued 4,000 shares of Series H Preferred Stock with an aggregate liquidation preference of $400 million. Dividends on the Series H Preferred Stock, if declared, accrue and are payable quarterly, in arrears, at a rate of 6.75% per annum. For the issuance, FHN issued depositary shares, each of which represents a fractional ownership interest in a share of FHN's preferred stock. The Series H Preferred Stock qualifies as Tier 1 capital. For more information, see Note 7 — Preferred Stock in the

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

TABLE OF ITEM 7 TOPICS

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

(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,

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.

Table 7.2

AVERAGE BALANCES, NET INTEREST INCOME AND YIELDS/RATES

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

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

(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.

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

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.

Noninterest Expense

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

Table 7.5

NONINTEREST EXPENSE

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,

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.

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

(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.

Table 7.7

CONTRACTUAL MATURITIES OF INVESTMENT SECURITIES

(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

(a) Includes equipment financing loans and leases.

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

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.

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.

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

(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

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

(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

(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.

Table 7.12

HELOC DRAW TO REPAYMENT SCHEDULE

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.

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

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.

Table 7.14

NONPERFORMING ASSETS