Subject: ERP
First Horizon Announces Results of its 2022 Company-Run Stress Test
MEMPHIS, Tenn., Aug. 8, 2022 /PRNewswire/ -- First Horizon Corporation (NYSE: FHN) ("First Horizon" or "the Company") announced today the results of its 2022 Bank Holding Company-run capital stress test results which demonstrate the ability to successfully navigate periods of economic stress and maintain capital ratios well above regulatory-required minimums. These internally generated results, which utilized the 2022 Severely Adverse Scenario published by the Federal Reserve on February 10, 2022, reflect continued strong risk discipline.
"Our 2022 stress test results illustrate the resilience of our business model, commitment to prudent risk management and strong capital position," said Chief Financial Officer Hope Dmuchowski. "Our minimum common equity tier 1 capital ratio of 8.4% reflects an additional $3.3 billion of pre-tax loss absorption capacity beyond the required regulatory minimums and our stressed loss rates and pre-provision net revenue results once again outperformed the Federal Reserve published CCAR-bank median."
The following table reflects the Company's ending and minimum capital ratios under the Federal Reserve's Severely Adverse Scenario compared to the required regulatory minimums.
% Regulatory Ratio | Actual | Projected Stressed Capital Ratios | Minimum Regulatory Capital Ratios | |
4Q21 | Ending | Minimum | ||
Common equity tier 1 capital ratio | 9.9 % | 8.7 % | 8.4 % | 4.5 % |
Tier 1 risk-based capital ratio | 11.0 % | 10.5 % | 10.3 % | 6.0 % |
Total risk-based capital ratio | 12.3 % | 12.7 % | 12.4 % | 8.0 % |
Tier 1 leverage ratio | 8.1 % | 7.9 % | 7.6 % | 4.0 % |
The Company's minimum common equity tier 1 ratio under stress of 8.4% reflects an additional $3.3 billion in pre-tax loss absorption capacity above the 4.5% regulatory required minimum. These results include a $0.15 quarterly common stock dividend throughout the nine-quarter forecast horizon.
First Horizon's loan portfolio stressed loss rate of 2.5% was 3.9 percentage points below the Federal Reserve-published median CCAR-bank result. The Company's stress test utilized Current Expected Credit Loss-based models for allowance and credit losses and reflected total cumulative losses of $1.3 billion. Additionally, the Company's pre-provision net revenue as a percentage of total assets of 2.3% exceeded the peer median of 2.1%.
For more information, please see First Horizon's 2022 stress test disclosure at https://ir.firsthorizon.com/investor-relations/news-and-events/stress-testing-results/default.aspx.
About First Horizon
First Horizon Corp. (NYSE: FHN), with $85.1 billion in assets as of June 30, 2022, 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, mortgage, and title insurance 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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CONTACT: | Investor Relations, Ellen Taylor, (901) 523-4450 |
Media Relations, Beth Ardoin, (337) 278-6868 |
SOURCE First Horizon Corporation
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