First Horizon Announces Results of its 2026 Company-Run Stress Test

Rhea-AI Summary

First Horizon (NYSE: FHN) released results of its 2026 company-run capital stress test using the Federal Reserve’s 2026 Dodd-Frank Act Severely Adverse Scenario. The company reported that, even under hypothetical severe economic and market stress, all projected capital ratios remain well above regulatory minimum requirements.

Projected stressed ratios include a CET1 ratio of 9.3% versus a 4.5% regulatory minimum, Tier 1 risk-based capital of 10.2% vs 6.0%, total risk-based capital of 12.2% vs 8.0%, and a Tier 1 leverage ratio of 9.1% vs 4.0%. These projections assume a $0.17 quarterly common dividend throughout the nine-quarter horizon.

The company reported a stressed loan portfolio loss rate of 2.3%, compared with the Federal Reserve-published median DFAST loss rate of 6.7%. Pre-provision net revenue as a percentage of total assets was 5.1%, above the peer median of 3.0%, supported by diversified, partly counter-cyclical businesses.

Positive

• All stressed capital ratios above regulatory minimums (CET1 9.3% vs 4.5%; Tier 1 10.2% vs 6.0%; Total 12.2% vs 8.0%; Leverage 9.1% vs 4.0%)
• CET1 ratio projected at 9.3% under severe stress vs 4.5% minimum
• Loan portfolio stressed loss rate 2.3% vs 6.7% Federal Reserve median DFAST loss rate
• Pre-provision net revenue / assets 5.1% vs 3.0% peer median
• $0.17 quarterly common dividend assumed to continue through nine-quarter stress horizon

Negative

• Under severe stress, CET1 ratio declines from 10.6% actual to 9.3% minimum projected
• Tier 1 leverage ratio falls from 10.2% actual to 9.1% minimum projected under stress

News Market Reaction – FHN

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MEMPHIS, Tenn., July 29, 2026 /PRNewswire/ -- First Horizon Corporation (NYSE: FHN) ("First Horizon" or "the Company") announced today its 2026 company-run capital stress test results. The 2026 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 2026 Dodd-Frank Act Stress Test Severely Adverse Scenario published by the Federal Reserve on February 4, 2026, reflect continued strong risk discipline.

"First Horizon's 2026 stress test results reinforce the strength of our capital position and the resilience built into our business model," said Hope Dmuchowski, Chief Financial Officer. "Our ability to maintain a CET1 ratio of 9.3% and a loan loss rate less than half that of our peer median - even amid a scenario of severe recession and market stress - demonstrates the value of our diversified revenue streams and prudent risk culture. Through disciplined capital management and unwavering focus on our clients, we are well equipped to deliver on our commitments, sustain our dividend, and support economic opportunity in our communities, regardless of the environment."

The following table reflects the Company's actual and projected stressed 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
	4Q25	Minimum	Minimum
Common Equity Tier 1 Capital ratio	10.6 %	9.3 %	4.5 %
Tier 1 Risk-based Capital ratio	11.5 %	10.2 %	6.0 %
Total Risk-based Capital ratio	13.3 %	12.2 %	8.0 %
Tier 1 Leverage ratio	10.2 %	9.1 %	4.0 %

These results include a $0.17 quarterly common stock dividend throughout the nine-quarter scenario horizon.

First Horizon's loan portfolio stressed loss rate of 2.3% is significantly lower than the 6.7% loss rate from the Federal Reserve-published median DFAST result. FHN's lower loss rate benefits from its portfolio mix, including lower-loss loans to mortgage companies and limited exposure to higher-loss rate credit cards. Additionally, the Company's pre-provision net revenue as a percentage of total assets of 5.1% exceeded the peer median of 3.0%. FHN's stresses to pre-provision net revenue are buffered by its counter-cyclical businesses of fixed income, loans to mortgage companies, and mortgage.

For more information, please see First Horizon's 2026 stress test disclosure at https://ir.firsthorizon.com/fixed-income/stress-test-results/default.aspx.

About First Horizon
First Horizon Corporation (NYSE: FHN), with $84.4 billion in assets as of June 30, 2026, 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 concentrated in 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

FAQ

What did First Horizon (NYSE: FHN) report in its 2026 company-run stress test results?

First Horizon reported that all projected capital ratios remain above regulatory minimums under the 2026 Severely Adverse Scenario. According to First Horizon, stressed CET1, Tier 1, total risk-based, and leverage ratios all exceed required thresholds, while still assuming ongoing quarterly common stock dividends.

What are First Horizon’s projected stressed capital ratios in 2026 compared to regulatory minimums?

First Horizon projects a CET1 ratio of 9.3%, Tier 1 of 10.2%, total risk-based of 12.2%, and leverage of 9.1%. According to First Horizon, these compare favorably to minimums of 4.5%, 6.0%, 8.0%, and 4.0%, respectively, under the Severely Adverse Scenario.

How did First Horizon’s stressed loan loss rate compare with the Federal Reserve median DFAST result?

First Horizon reported a stressed loan portfolio loss rate of 2.3%, below the Federal Reserve-published median DFAST loss rate of 6.7%. According to First Horizon, this lower rate reflects its portfolio mix, including lower-loss loans and limited higher-loss credit card exposure.

What pre-provision net revenue did First Horizon report in its 2026 stress test?

First Horizon reported pre-provision net revenue equal to 5.1% of total assets under stress. According to First Horizon, this exceeds the 3.0% peer median and is supported by counter-cyclical businesses such as fixed income, loans to mortgage companies, and mortgage operations.

Does First Horizon’s 2026 stress test assume continued dividends for FHN shareholders?

Yes, the 2026 stress test assumes a $0.17 quarterly common stock dividend throughout the nine-quarter scenario. According to First Horizon, the company maintains projected capital ratios above regulatory minimums even while sustaining this dividend level under severe economic conditions.

Which stress scenario did First Horizon use for its 2026 company-run capital stress test?

First Horizon used the Federal Reserve’s 2026 Dodd-Frank Act Stress Test Severely Adverse Scenario, published February 4, 2026. According to First Horizon, its internally generated results apply this severe recession and market stress framework to assess capital resilience and risk discipline.