FIRST HORIZON CORP Q1 FY2025 earnings call

• Economic environment: Heightened macroeconomic uncertainty from tariffs and trade policies, but optimistic about avoiding recession. - Financial results: Adjusted EPS $0.42, pre-provision net revenue growth $16 million, net interest margin expanded 9 basis points, expense reduced $20 million, $360 million share repurchases, strong credit performance with 19 basis point charge-off ratio. - Deposit and loan performance: Deposit costs reduced 38 basis points, loan yields down due to portfolio restructuring and lower short-term rates. - Capital utilization: CET1 ratio 10.9% post share repurchases, focus on safety and soundness then profitable deployment of excess capital.

Net interest income increased by $1 million. Net interest margin expanded to 3.42% with a 27 basis point decline in average total deposit costs offsetting a 20 basis point reduction in average loan yield. Fee income, excluding deferred compensation, decreased by $5 million. Expenses decreased by $20 million, excluding deferred compensation. Provision expense increased by $30 million due to increased macroeconomic uncertainty. CET1 ratio ended at 10.9% after $360 million in share repurchases. Deposits: Period-end balances declined due to brokered CDs payoff, but base rate and noninterest-bearing deposits were stable; promotional deposits had strong retention with a 34 basis point reduction in weighted average rate. Loans: Period-end loans down 1% from prior quarter due to commercial real estate paydowns; average loan yields down 20 basis points.

2025 guidance unchanged: Total revenue growth within provided ranges, expense growth 2%-4%, net charge-off guidance 15-25 basis points, near-term CET1 target 11%. Expect three rate cuts starting in March, but rate expectations evolving; countercyclical businesses provide revenue hedge.

Macroeconomic uncertainty from tariffs and trade policies, potential recession risk, impact on loan portfolios and deposit costs. Volatility in fixed income and mortgage production affecting expense guidance. Uncertainty in credit quality due to macroeconomic factors.

Q: Michael Rose of Raymond James on PPNR growth outlook and rate cuts A: Hope Dmuchowski discussed confidence in guidance, rate cuts impact on NII and countercyclical businesses Q: Jon Arfstrom of RBC Capital Markets on C&I and reserve increase A: Bryan Jordan and Thomas Hung talked about borrower wait-and-see attitude and reserve increase for uncertainty Q: Ebrahim Poonawala of Bank of America on ROTCE A: Bryan Jordan discussed 15-plus percent target and time line Q: Timur Braziler of Wells Fargo on deposits and campaigns A: Hope Dmuchowski and Bryan Jordan talked about deposit growth and campaigns Q: Anthony Elian of JPMorgan on deposits and tariffs A: Hope Dmuchowski and Thomas Hung discussed deposit growth and loan portfolios affected by tariffs Q: Christopher Marinac of Janney Montgomery Scott on CRE lending A: Thomas Hung and Bryan Jordan talked about CRE pipeline and competition