First Horizon (FHN) investor relations material

Operating environment and macro trends

• Volatility in oil and fuel prices, driven by geopolitical conflict, has impacted the economic outlook.

• Significant backup in interest rates over the past 6–8 months, accelerating in Q3.

• Borrower psychology and commercial activity remain cautiously optimistic, with pipelines strong but utilization drifting down.

• Commercial real estate lending is rebounding, while mortgage warehouse business has softened due to higher rates.

Strategic framework and relationship focus

• The Five Flags framework, rolled out over the past 18 months, guides strategic decisions and targets small to midsize commercial businesses.

• Emphasis on deepening customer relationships beyond loan-only transactions, with cross-selling of treasury management and wealth services.

• Improved spreads and profitability in commercial real estate lending, with a $100+ million pre-tax profitability improvement goal for 2026.

• Progress on this goal is ongoing, with a two to three-year timeframe for full realization.

Balance sheet, deposits, and specialty businesses

• Deposit growth has been strong in Q3, supported by incentives and relationship-building efforts.

• Specialty businesses, such as mortgage warehouse lending, focus on maximizing relationships through services like escrow and derivatives.

• Wealth management has grown due to platform upgrades and deeper penetration in legacy markets, with expectations for continued profitability growth.