MEMPHIS, Tenn., July 30, 2024 /PRNewswire/ -- First Horizon Corporation (NYSE: FHN) ("First Horizon" or "the Company") announced today its 2024 Company-run capital stress test results. The 2024 test showed that, under hypothetical severe economic and business downturns, First Horizon would maintain capital ratios well above regulatory-required minimums. These internally generated results, which utilized the 2024 Severely Adverse Scenario published by the Federal Reserve on February 15, 2024, reflect continued strong risk discipline.
"Our 2024 capital stress test results in a minimum Common Equity Tier 1 capital ratio of 9.5% which is 500 bps over the required regulatory minimum," said Chief Financial Officer Hope Dmuchowski. "That buffer is driven by FHN's diversified loan portfolio, countercyclical businesses, and strong risk culture that enables the bank to support clients as well as pursue opportunistic relationships through economic cycles."
The following table reflects the Company's starting, ending, and minimum capital ratios under the Federal Reserve's Severely Adverse Scenario compared to required regulatory minimums.
% Regulatory Ratio | Actual | Projected Stressed Capital Ratios | Regulatory Capital Ratios | |
4Q23 | Ending | Minimum | Minimum | |
Common equity tier 1 capital ratio | 11.4 % | 11.1 % | 9.5 % | 4.5 % |
Tier 1 risk-based capital ratio | 12.4 % | 12.1 % | 10.5 % | 6.0 % |
Total risk-based capital ratio | 14.0 % | 14.0 % | 12.7 % | 8.0 % |
Tier 1 leverage ratio | 10.7 % | 10.9 % | 9.3 % | 4.0 % |
These results include a $0.15 quarterly common stock dividend throughout the nine-quarter scenario horizon.
First Horizon's loan portfolio stressed loss rate of 2.5% is significantly lower than the 6.8% loss rate from the Federal Reserve-published median DFAST result. FHN's lower loss rate benefits from portfolio mix including low loss loans to mortgage companies and limited exposure to high loss rate credit cards. Additionally, the Company's pre-provision net revenue as a percentage of total assets of 4.6% exceeded the peer median of 1.9%. FHN's stresses to pre-provision net revenue are buffered by its countercyclical businesses of loans to mortgage companies, mortgage warehouse, and FHN Financial.
For more information, please see First Horizon's 2024 stress test disclosure at https://ir.firsthorizon.com/fixed-income/stress-test-results/default.aspx.
About First Horizon
First Horizon Corp. (NYSE: FHN), with $82.2 billion in assets as of June 30, 2024, is a leading regional financial services company, dedicated to helping our clients, communities and associates unlock their full potential with capital and counsel. Headquartered in Memphis, TN, the banking subsidiary First Horizon Bank operates in 12 states across the southern U.S. The Company and its subsidiaries offer commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services. First Horizon has been recognized as one of the nation's best employers by Fortune and Forbes magazines and a Top 10 Most Reputable U.S. Bank. More information is available at www.FirstHorizon.com.
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SOURCE First Horizon Corporation
