Under the hypothetical severely adverse conditions modeled by the Federal Reserve, First Horizon projected a Common Equity Tier 1 capital ratio of 9.3%, more than double the 4.5% regulatory floor. Chief Financial Officer Hope Dmuchowski pointed to the bank’s diversified revenue streams and disciplined risk management as the primary drivers behind these results. The firm also maintained its quarterly common stock dividend of $0.17 throughout the projected nine-quarter horizon.
First Horizon Reports Strong Capital Resilience in 2026 Stress Tests
Memphis-based First Horizon Corporation cleared its 2026 company-run capital stress tests with flying colors, demonstrating that its balance sheet remains robust even under the Federal Reserve's most severe economic downturn scenarios. The results confirm the bank's ability to maintain capital ratios significantly higher than minimum regulatory requirements.
The bank’s performance was bolstered by a loan portfolio loss rate of 2.3%, a figure substantially lower than the 6.7% median reported by peers in the Dodd-Frank Act Stress Test (DFAST). This outperformance stems from a strategic portfolio mix that limits exposure to high-risk credit cards while leaning into mortgage-related sectors. Additionally, the company’s pre-provision net revenue reached 5.1% of total assets, outpacing the peer median of 3.0%. These figures underscore the bank’s capacity to absorb economic shocks while continuing to support its regional client base.
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