First Horizon Announces Results of Its 2026 Stress Test
First Horizon Corporation (NYSE: FHN) announced the results of its 2026 company-run capital stress test, showing that it would maintain capital ratios well above regulatory minimums under severe economic downturn scenarios. The firm used the Federal Reserve's Severely Adverse Scenario for its analysis and reported a projected Common Equity Tier 1 (CET1) ratio of 9.3%, significantly higher than the required 4.5%. CFO Hope Dmuchowski highlighted First Horizon’s strong capital position, diversified revenue streams, and prudent risk management as key factors in maintaining resilience during economic stress. The company's loan portfolio loss rate under stress was projected at 2.3%, much lower than the peer median of 6.7%, due to its mix of low-risk loans such as those extended to mortgage companies. Additionally, First Horizon’s pre-provision net revenue (PPNR) ratio stood at 5.1% compared to a peer median of 3.0%. These results support the company's ability to sustain dividends and continue operations even in challenging economic conditions.
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