First Horizon reports results of its 2025 company-run stress test

First Horizon’s (FHN) 2025 company-run capital stress test results showed that, under hypothetical severe economic and business downturns, First Horizon would maintain capital ratios well above regulatory-required minimums. “Our 2025 capital stress test results reflect the resilience of our diversified business model, prudent risk management, and strong capital position,” said CFO Hope Dmuchowski. “Our minimum Common Equity Tier 1 Capital ratio of 9.7% is well above the required regulatory minimum of 4.5% and represents approximately $4B of additional pre-tax loss absorption capacity. These results demonstrate our ability to maintain safety and soundness and support clients across a broad range of economic scenarios with a near term target CET1 ratio of 10.75%.” First Horizon’s loan portfolio stressed loss rate of 2.3% is lower than the 6.1% loss rate from the Federal Reserve-published median DFAST result. The company’s pre-provision net revenue as a percentage of total assets of 4.7% exceeded the peer median of 2.3%. FHN’s stresses to pre-provision net revenue are buffered by its counter-cyclical businesses of fixed income, loans to mortgage companies, and mortgage.