第一地平线银行 2024年度报告

Dear Fellow Shareholders, 2024 was a milestone year for our company. We proudly celebrated our 160th year in business,honoring our predecessors, associates, clients, partners, communities and shareholders, all of whomhave contributed to making First Horizon the highly regarded financial institution it is today. At First Horizon, our value is created through a focus on three clear principles – safety and soundness,profitability and growth – in that order. We execute on these priorities by operating in an attractivefootprint with a distinctive business model that performs across economic cycles. We believe thatdelivering on these priorities positions us to achieve a 15% or higher return on tangible common equity*in the coming years. A foundation of safety and soundness. Our safety and soundness principle shows up in our disciplined underwriting. In 2024, our net chargeoff rate was 18 basis points for the year (including only 8 basis points of net charge offs in the fourthquarter). Our performance last year reflects the same credit culture we have seen across multiple yearsand the same standards that take us into 2025. We also focus on maintaining prudent capital levels anda secure source of funding. At year-end 2024, our CET1 ratio was 11.2% even with $933 million in sharerepurchases and common dividends in the year. With the expectation of crossing $100 billion in total assets in the comingyears, we are investing now to prepare for the regulatory requirements andexpectations that come with being a Large Financial Institution. Many ofthose investments will greatly help our business. For example, efforts tofurther develop our use of data across the organization should help usidentify value creation opportunities. Finally, we remain focused on thecriticality of cybersecurity and continuously invest in talent andtechnology to protect our company and clients.ngandf Businesses that create sustainable profit. In 2024, our net income available to common shareholders of $738million, which created earnings per share of $1.36 (this includes $0.19of after tax per share notable items†), reflected a strong net interestmargin of 3.35% that was achieved across a volatile interest rateenvironment. Particularly notable was our two-basis point expansionof net interest margin in the fourth quarter, which occurred amidst aone hundred basis point reduction in the Fed Funds rate that beganin the third quarter. Moreover, our counter cyclical businessmodel, which includes our fixed income business, FHN Financial,along with our mortgage warehouse and mortgage bankingbusinesses, supported our revenue through the decreasingD. Bryan JordanChairman of the Board, Presidentand Chief Executive Officer interest rate environment in the second half of 2024. This business diversification sets First Horizon apart.As macroeconomic inputs change, our revenue drivers naturally adapt and reduce earnings volatility. We also remain disciplined with expense management and operational excellence. Our StrategicInvestment Board (“SIB”) reviews and approves projects to ensure alignment with our companypriorities and maintains a focus on returns on investment for these initiatives. We continue todevelop and deliver automation capabilities that leverage artificial intelligence (“AI”), robotic processautomation (“RPA”) and other digital integrations leveraging our cloud environment to enhance thespeed, accuracy and scalability of our processes. We also actively invest in fraud prevention to preventlosses and enhance our client experience. I am also proud of the continued process improvements we have made across the organization.Through a cross functional team and formalized process, our Quality Council, which consists of front-line bankers, shares ideas for process, technology and product improvements to enhance the bankerand client experiences and improve productivity. More than 300 initiatives identified in this processwere completed in 2024. A growth engine for the future. The Southeast United States is the epicenter of the country’s population and economic growth resultingin significant value creation through First Horizon’s geographic footprint. Our banking center footprintincludes 10 of the top 25 fastest growing metro areas by GDP in the U.S. This attractive footprintallowed us to grow our average loan balances by 3% and average deposit balances by 2% in 2024. Wecontinue to add client-facing talent across our markets to further capture future growth opportunities. As we move from the merger activities and technology infrastructure uplifts of the last three years, ourongoing investments provide unique tailwinds for First Horizon’s growth in 2025. We see opportunitiesin treasury management services as our core middle market clients benefit from the commercial onlinebanking solution implemented in late 2024. Our private client and wealth management clients will seevalue from enhanced product capabilities that will be completed in the coming m