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v3.23.3

Preferred Stock | 9 Months Ended
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Sep. 30, 2023
Equity [Abstract] |
Preferred Stock | Preferred Stock The following table presents a summary of FHN's non-cumulative perpetual preferred stock:
PREFERRED STOCK
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | September 30, 2023 |  | December 31, 2022
|  | Issuance Date |  | Earliest Redemption Date (a) |  |  |  |  |  | Annual Dividend Rate |  | Dividend Payments |  | Shares Outstanding |  | Liquidation Amount |  | Carrying Amount |  | Carrying Amount
Series B |  | 7/2/2020 |  | 8/1/2025 |  |  |  |  |  | 6.625% | (b) | Semi-annually |  | 8,000 |  |  | $ | 80 |  |  | $ | 77 |  |  | $ | 77 |
Series C |  | 7/2/2020 |  | 5/1/2026 |  |  |  |  |  | 6.600% | (c) | Quarterly |  | 5,750 |  |  | 58 |  |  | 59 |  |  | 59 |
Series D |  | 7/2/2020 |  | 5/1/2024 |  |  |  |  |  | 6.100% | (d) | Semi-annually |  | 10,000 |  |  | 100 |  |  | 94 |  |  | 94 |
Series E |  | 5/28/2020 |  | 10/10/2025 |  |  |  |  |  | 6.500% |  | Quarterly |  | 1,500 |  |  | 150 |  |  | 145 |  |  | 145 |
Series F |  | 5/3/2021 |  | 7/10/2026 |  |  |  |  |  | 4.700% |  | Quarterly |  | 1,500 |  |  | 150 |  |  | 145 |  |  | 145 |
Series G |  | 2/28/2022 |  | 2/28/2027 |  |  |  |  |  | N/A |  | N/A |  | — |  |  | — |  |  | — |  |  | 494 |
|  |  |  |  |  |  |  |  |  |  |  |  |  | 26,750 |  |  | $ | 538 |  |  | $ | 520 |  |  | $ | 1,014 |
N/A - not applicable (a) Denotes earliest optional redemption date. Earlier redemption is possible, at FHN's election, if certain regulatory capital events occur. (b) Fixed dividend rate will reset on August 1, 2025 to three-month CME Term SOFR plus 4.52361% (0.26161% plus 4.262%). (c) Fixed dividend rate will reset on May 1, 2026 to three-month CME Term SOFR plus 5.18161% (0.26161% plus 4.920%). (d) Fixed dividend rate will reset on May 1, 2024 to three-month CME Term SOFR plus 4.12061% (0.26161% plus 3.859%). On February 28, 2022, in connection with the execution of the TD Merger Agreement, FHN issued $494 million of Series G Perpetual Convertible Preferred Stock (the Series G Convertible Preferred Stock). The Series G Convertible Preferred Stock was convertible into up to 4.9% of the outstanding shares of FHN common stock in certain circumstances, including termination of the TD Merger Agreement. Because regulatory approval of the TD Transaction was not obtained, conversion occurred, effective June 26, 2023, at a fixed rate of 4,000 shares of common stock for each share of Series G Convertible Preferred Stock, resulting in 19,742,776 additional common shares outstanding. The $494 million carrying value of the Series G Convertible Preferred Stock qualified as Tier 1 Capital as of December 31, 2022 and qualified for Common Equity Tier 1 Capital upon conversion to common stock on June 26, 2023. Subsidiary Preferred Stock First Horizon Bank has issued 300,000 shares of Class A Non-Cumulative Perpetual Preferred Stock (Class A Preferred Stock) with a liquidation preference of $1,000 per share. Dividends on the Class A Preferred Stock, if declared, accrue and are payable each quarter, in arrears, at a floating rate equal to the greater of three-month CME Term SOFR plus 1.11161% (0.26161% plus 0.85%) or 3.75% per annum. These securities qualify fully as Tier 1 capital for both First Horizon Bank and FHN. On September 30, 2023 and December 31, 2022, $295 million of Class A Preferred Stock was recognized as noncontrolling interest on the Consolidated Balance Sheets. LIBOR Change to SOFR On March 5, 2021, the U.K.'s Financial Conduct Authority announced that all tenors of LIBOR would cease publication or no longer be representative after June 30, 2023. On March 15, 2022, the Adjustable Interest Rate (LIBOR) Act was enacted in the U.S. The LIBOR Act provides that LIBOR will transition to a replacement benchmark based on the Secured Overnight Financing Rate (SOFR), plus a spread adjustment, in such covered contracts. Subsequently, the FRB adopted Regulation ZZ that identified CME Term SOFR, a forward term rate based on SOFR administered by CME Group Benchmark Administration, Ltd., plus a spread adjustment, as the replacement rate for securities for any interest rate calculations after June 30, 2023. On April 25, 2023, FHN announced that each reference to LIBOR in each applicable securities contract (which term includes preferred stock and related depositary shares) will transition to CME Term SOFR, plus a tenor-based spread adjustment, on the first business day after June 30, 2023 pursuant to the LIBOR Act and the implementing regulations. The information presented in this Note reflects that transition.

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