FIRST HORIZON CORPFHN
FIRST HORIZON CORP Leases Disclosure
Premises, Equipment, and Leases
(a) Primarily comprised of land and buildings.
Premises and equipment was comprised of the following at December 31, 2025 and 2024.
Table 8.5.1
PREMISES & EQUIPMENT
| (Dollars in millions) | December 31, 2025 | December 31, 2024 | ||||||||||||
| Land | $ | 162 | $ | 163 | ||||||||||
| Buildings | 575 | 570 | ||||||||||||
| Leasehold improvements | 91 | 88 | ||||||||||||
| Furniture, fixtures, and equipment | 316 | 304 | ||||||||||||
| Fixed assets held for sale (a) | 1 | 1 | ||||||||||||
| Total premises and equipment | 1,145 | 1,126 | ||||||||||||
| Less accumulated depreciation and amortization | (601) | (552) | ||||||||||||
| Premises and equipment, net | $ | 544 | $ | 574 | ||||||||||
In 2025, FHN recognized $1 million of leased asset impairments, and fixed asset impairments were immaterial. Fixed asset and leased asset impairments were immaterial for 2024 and 2023. Net gains related to the sales of fixed assets were $1 million for 2025, $3 million for 2024, and immaterial for 2023.
First Horizon as Lessee
FHN has operating, financing, and short-term leases for branch locations, corporate offices and certain equipment. Substantially all of these leases are classified as operating leases.
The following table provides details of the classification of FHN's right-of-use assets and lease liabilities included in the Consolidated Balance Sheets.
Table 8.5.2
RIGHT-OF-USE ASSETS & LEASE LIABILITIES
| (Dollars in millions) | December 31, 2025 | December 31, 2024 | ||||||||||||
| Lease right-of-use assets: | Classification | |||||||||||||
| Operating lease right-of-use assets | $ | 321 | $ | 296 | ||||||||||
| Finance lease right-of-use assets | 2 | 2 | ||||||||||||
| Total lease right-of-use assets | $ | 323 | $ | 298 | ||||||||||
| Lease liabilities: | ||||||||||||||
| Operating lease liabilities | $ | 368 | $ | 330 | ||||||||||
| Finance lease liabilities | 2 | 3 | ||||||||||||
| Total lease liabilities | $ | 370 | $ | 333 | ||||||||||
The calculated amounts of ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to determine the present value of the minimum lease payments. The following table details the weighted average remaining lease term and discount rate for FHN's operating and finance leases as of December 31, 2025 and 2024.
Table 8.5.3
REMAINING LEASE TERMS
& DISCOUNT RATES
| December 31, 2025 | December 31, 2024 | ||||||||||
| Weighted Average Remaining Lease Terms | |||||||||||
| Operating leases | 11.65 years | 11.68 years | |||||||||
| Finance leases | 8.31 years | 8.60 years | |||||||||
| Weighted Average Discount Rate | |||||||||||
| Operating leases | 3.69 | % | 3.19 | % | |||||||
| Finance leases | 2.00 | % | 2.16 | % | |||||||
The following table provides a detail of the components of lease expense and other lease information for the years ended December 31, 2025, 2024, and 2023.
Table 8.5.4
LEASE EXPENSE & OTHER INFORMATION
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Lease cost | |||||||||||||||||
| Operating lease cost | $ | 46 | $ | 44 | $ | 45 | |||||||||||
| Sublease income | (1) | (1) | (2) | ||||||||||||||
| Total lease cost | $ | 45 | $ | 43 | $ | 43 | |||||||||||
| Other information | |||||||||||||||||
| (Gain) loss on right-of-use asset impairment - operating leases | $ | 1 | $ | — | $ | 1 | |||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases | 34 | 43 | 46 | ||||||||||||||
| Right-of-use assets obtained in exchange for new lease obligations: | |||||||||||||||||
| Operating leases | 60 | 22 | 11 | ||||||||||||||
The following table provides a detail of the maturities of FHN's operating and finance lease liabilities as of December 31, 2025.
Table 8.5.5
LEASE LIABILITY MATURITIES
| (Dollars in millions) | December 31, 2025 | ||||
| 2026 | $ | 45 | |||
| 2027 | 49 | ||||
| 2028 | 45 | ||||
| 2029 | 42 | ||||
| 2030 | 37 | ||||
| 2031 and thereafter | 243 | ||||
| Total lease payments | 461 | ||||
| Less lease liability interest | (91) | ||||
| Total lease liability | $ | 370 | |||
FHN had aggregate undiscounted contractual obligations of less than $1 million for lease arrangements that have not commenced as of December 31, 2025. Payments under these arrangements are expected to occur from 2026 through 2031.
First Horizon as Lessor
As a lessor, FHN engages in the leasing of equipment to commercial clients primarily through direct financing and sales-type leases. Direct financing and sales-type leases are similar to other forms of installment lending in that lessors generally do not retain benefits and risks incidental to ownership of the property subject to leases. Such arrangements are essentially financing transactions that permit lessees to acquire and use property. As lessor, the sum of all minimum lease payments over the lease term and the estimated residual value, less unearned interest income, is recorded as the net investment in the lease on the commencement date and is included in loans and leases in the Consolidated Balance Sheets. Interest income is accrued as earned over the term of the lease based on the net investment in leases. Fees incurred to originate the lease are deferred on the commencement date and recognized as an adjustment of the yield on the lease.
FHN’s portfolio of direct financing and sales-type leases contains terms of 3 to 23 years, some of which contain options to extend the lease for various periods of time and/or to purchase the equipment subject to the lease at various points in time. These direct financing and sales-type leases typically include a payment structure set at lease inception and do not provide any additional services. Expenses associated with the leased equipment, such as maintenance and insurance, are paid by the lessee directly to third parties. The lease agreement typically contains an option for the purchase of the leased property by the lessee at the end of the lease term at either the property’s residual value or a specified price. In all cases, FHN expects to sell or re-lease the equipment at the end of the lease term. Due to the nature and structure of FHN’s
direct financing and sales-type leases, there is no selling profit or loss on these transactions.
The components of the Company’s net investment in leases as of December 31, 2025 and 2024 were as follows.
Table 8.5.6
LEASE NET INVESTMENTS
| (Dollars in millions) | December 31, 2025 | December 31, 2024 | |||||||||
| Lease receivable | $ | 1,371 | $ | 1,300 | |||||||
| Unearned income | (315) | (279) | |||||||||
| Guaranteed residual | 164 | 166 | |||||||||
| Unguaranteed residual | 250 | 228 | |||||||||
| Total net investment | $ | 1,470 | $ | 1,415 | |||||||
Interest income for direct financing or sales-type leases totaled $73 million, $64 million, and $50 million for the years ended December 31, 2025, 2024, and 2023, respectively. There was no profit or loss recognized at the commencement date for direct financing or sales-type leases for the years ended December 31, 2025, 2024, and 2023.
Maturities of the Company's lease receivables as of December 31, 2025 were as follows.
Table 8.5.7
LEASE RECEIVABLE MATURITIES
| (Dollars in millions) | December 31, 2025 | ||||
| 2026 | $ | 188 | |||
| 2027 | 165 | ||||
| 2028 | 158 | ||||
| 2029 | 117 | ||||
| 2030 | 165 | ||||
| 2031 and thereafter | 578 | ||||
| Total future minimum lease payments | $ | 1,371 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 23, 2024 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.