First Horizon Passes 2026 Stress Test with Capital Ratios Well Above Minimum — First Horizon Corporation (First Horizon Bank)

Event summary

First Horizon maintained a CET1 ratio of 9.3% under severe economic stress, above regulatory minimum of 4.5%.
Loan portfolio stressed loss rate of 2.3%, significantly lower than Federal Reserve median of 6.7%.
Pre-provision net revenue as % of total assets at 5.1%, exceeding peer median of 3.0%.
$0.17 quarterly common stock dividend sustained throughout nine-quarter scenario.
Stress test utilized the 2026 Dodd-Frank Act Stress Test Severely Adverse Scenario published by Federal Reserve on February 4, 2026.

The big picture

First Horizon's strong performance in the 2026 stress test underscores the resilience of regional banks with diversified revenue streams and prudent risk management. The results highlight the strategic advantage of lower-loss loan portfolios and counter-cyclical businesses like fixed income and mortgage services. This positions First Horizon favorably against peers as economic uncertainty persists.

What we're watching

Capital Resilience: How First Horizon's ability to maintain capital ratios above regulatory minimums will position it against peers in a severe economic downturn.
Portfolio Mix Advantage: Whether the lower-loss loan portfolio, particularly loans to mortgage companies, can sustain performance under prolonged stress.
Dividend Sustainability: The pace at which First Horizon can maintain its $0.17 quarterly dividend amid severe economic conditions.