Core Viewpoint - First Horizon National's recent earnings report shows strong performance in adjusted earnings per share and revenue growth, despite challenges in loan and deposit balances and mixed credit quality indicators [2][4][6]. Financial Performance - Adjusted earnings per share for Q3 2025 were 51 cents, exceeding the Zacks Consensus Estimate of 45 cents and up from 42 cents in the previous year [2]. - Net income available to common shareholders was $254 million, reflecting a 19.2% year-over-year increase [3]. - Total quarterly revenues reached $889 million, a 7.4% increase year-over-year, surpassing the Zacks Consensus Estimate by 5.1% [4]. Income Sources - Net interest income (NII) rose nearly 7.5% year-over-year to $674 million, with the net interest margin increasing by 24 basis points to 3.55% [4]. - Non-interest income was $215 million, also up 7.5% from the previous year [4]. Expense Management - Non-interest expenses increased by 7.8% year-over-year to $551 million, driven by rising costs across most components [5]. - The efficiency ratio was 61.92%, slightly up from 61.89% in the prior year, indicating a slight deterioration in profitability [5]. Loan and Deposit Trends - Total loans and leases were $63.05 billion, showing a slight decrease from the previous quarter, while total deposits were $65.52 billion, also declining moderately [6]. Credit Quality - Non-performing loans and leases increased by 4.7% year-over-year to $605 million [7]. - The allowance for loan and lease losses decreased by 5.6% year-over-year to $777 million, with the ratio of total allowance to loans and leases at 1.23%, down from 1.32% [7]. Capital Ratios - The Common Equity Tier 1 ratio was 11%, down from 11.2% year-over-year, and the total capital ratio decreased to 13.8% from 14.2% [9]. Future Outlook - Adjusted revenues are expected to remain flat to rise by 4% from $3.28 billion reported in 2024, while adjusted non-interest expenses are anticipated to remain flat or increase by 2% [10]. - The net charge-off ratio is projected to be between 0.15-0.25%, reflecting continued credit normalization [11]. - The CET 1 ratio is expected to be between 10.5-11%, indicating modest loan growth and capital deployment [11]. Market Sentiment - Recent estimates for First Horizon have trended upward, leading to a Zacks Rank of 2 (Buy), suggesting an expectation of above-average returns in the coming months [12][14].

Core Insights - First Horizon Corporation (FHN) has experienced a volatile year, with operational performance showing better-than-expected earnings and solid credit metrics, but investor sentiment has been negatively impacted by management's openness to consider strategic options [1] Operational Performance - The company has reported better-than-expected earnings, indicating strong operational performance [1] - Solid credit metrics have been highlighted, suggesting a stable financial position [1] Investor Sentiment - Despite positive operational results, investors are concerned due to management's willingness to explore strategic options, which has created uncertainty in the market [1]

Core Viewpoint - First Horizon Corporation (FHN) has outperformed its industry with an 8.8% share price increase over the past six months, while the industry grew by 1.5% and the S&P 500 Index rose by 19.7% [1] Performance Summary - FHN's peers, Texas Capital Bancshares, Inc. (TCBI) and BOK Financial Corporation (BOKF), saw share price increases of 15.3% and 9.9%, respectively, during the same period [1] Factors Supporting FHN Stock - Steady loan growth is evident, with a five-year compound annual growth rate (CAGR) of 15% from 2019 to 2024, driven by strategic acquisitions and a diversified loan portfolio [4] - In the first nine months of 2025, loans increased year over year, supported by growth in commercial and industrial segments and stable mortgage lending activity [4] - Although deposits declined, management anticipates stabilization due to growth in promotional and noninterest-bearing deposits and strong customer retention [5] - FHN's net interest income (NII) has a five-year CAGR of 15.7% through 2024, with an upward trend continuing into 2025, aided by recent Fed rate cuts [6] - As of September 30, 2025, FHN held $2.1 billion in cash and interest-bearing deposits, indicating decent liquidity to support capital distributions [7] Shareholder Returns - FHN has maintained a consistent dividend, recently announcing a 7% increase to 15 cents per share, resulting in a dividend yield of 2.75%, higher than the industry average of 0.90% [9] - The company authorized a $1 billion share repurchase program in October 2024, with approximately $321 million remaining as of September 30, 2025 [10] Near-Term Challenges - Rising non-interest expenses have expanded at a five-year CAGR of 10.6%, primarily due to higher personnel and technology costs, which may weigh on margins [11] - As of September 2025, commercial and commercial real estate loans accounted for over 76% of total loans, exposing FHN to sector-specific risks [13] Estimates and Valuation Analysis - The Zacks Consensus Estimate for FHN's sales suggests a year-over-year increase of 5.6% for 2025 and 3.2% for 2026, with earnings expected to rise by 18.1% and 6.8% for the same years [14] - FHN stock is currently trading at a trailing price-to-earnings (P/E) ratio of 11.28X, lower than the industry's 12.6X [16] Investment Consideration - Despite near-term headwinds from elevated expenses and loan concentration risks, FHN is positioned to benefit from stable NII growth and improving funding conditions [19] - The company's strong fundamentals and sustainable capital distribution policy suggest potential for long-term shareholder value [20]

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First Horizon Corporation Conference Call Summary Company Overview - **Company**: First Horizon Corporation (NYSE:FHN) - **Assets**: $83 billion - **Branches**: Over 400 across the Southeast - **Headquarters**: Memphis, Tennessee - **Segments**: Regional banking, specialty banking, and corporate [1][3] Core Insights and Arguments Customer Sentiment and Loan Growth - Customers in the Southeast are optimistic and resilient despite past challenges like COVID and rising rates [4][5] - Loan growth is slower than previously anticipated, with expectations of high single-digit growth not materializing [5][6] - The mortgage warehouse business has been a bright spot for loan growth [5][8] Loan and Deposit Strategy - Focus on building long-term customer relationships rather than just selling products [7][8] - Emphasis on decentralized decision-making in local markets for deposit pricing [8][9] M&A Activity - Increased M&A activity in the Southeast with several competitors involved in mergers [10][11] - First Horizon has recently completed significant mergers and is now focused on organic growth [12][14] - The company is positioned to capitalize on opportunities arising from competitors' M&A disruptions [12][14] Interest Rate Environment and Asset Sensitivity - The company is optimistic about its countercyclical businesses, particularly FHN Financial, in a falling interest rate environment [17][18] - Mortgage warehouse business is expected to benefit from potential refinancing waves as rates decrease [20][26] Expense Management and Technology Investments - Commitment to keeping expenses flat while investing in technology and efficiency improvements [27][29] - Significant technology investments have been made to clear tech debt and enhance operational efficiency [31][32] - AI is being utilized to reduce costs and improve speed in developing new digital platforms [33][36] Credit Quality and Risk Management - Strong credit culture with a focus on client relationships and decentralized credit analysis [39][40] - Best-in-class charge-off rates, with a proactive approach to monitoring credit quality [41][45] - Increased vigilance regarding fraud and operational controls in response to industry challenges [49][50] ROTCE Target and Capital Management - Achieved a 15% ROTCE in Q4, with a goal to sustain and exceed this level [52][53] - Plans to return capital to shareholders primarily through loan growth, with share buybacks as a secondary option [59][60] - Maintaining a capital ratio of 11% with a long-term target of 10% [57][58] M&A Strategy - M&A is not a near-term priority; focus remains on organic growth and achieving top-tier returns [61][62] - The company is open to opportunities but prioritizes shareholder value and operational efficiency [64] Additional Important Points - The competitive deposit environment has quieted down, with clients aware of rate changes [66][68] - Technology expenses are being managed effectively, with a focus on client-facing projects [70][74] This summary encapsulates the key points discussed during the First Horizon Corporation conference call, highlighting the company's strategic focus, market conditions, and operational insights.

Financial Position - Total assets increased to $83.192 billion as of September 30, 2025, compared to $82.152 billion at the end of 2024, reflecting a growth of 1.27%[20] - Total deposits slightly decreased to $65.525 billion from $65.581 billion, a decline of 0.09%[20] - Total equity rose to $9.244 billion, compared to $9.111 billion, reflecting an increase of 1.46%[20] - Preferred stock decreased from $426 million to $349 million, a decline of 18.14%[20] - The total capital surplus as of September 30, 2025, is $313 million, a decrease from $318 million at June 30, 2025[27] Loan and Lease Performance - Net loans and leases reached $62.281 billion, up from $61.750 billion, indicating an increase of 0.86%[20] - The allowance for loan and lease losses was $777 million, down from $815 million, representing a reduction of 4.66%[20] - The loan and lease portfolio is segmented into commercial and consumer categories, with specific classes including commercial, real estate, and credit card loans[64] - As of September 30, 2025, total loans and leases amounted to $63,058 million, an increase from $62,565 million on December 31, 2024, representing a growth of 0.79%[66] - The commercial and industrial loans increased to $30,475 million from $29,957 million, reflecting a rise of 1.73%[66] Income and Earnings - Net income for Q3 2025 was $266 million, an increase of 19.3% from $223 million in Q3 2024[25] - Basic earnings per common share increased to $0.50 in Q3 2025, compared to $0.40 in Q3 2024, representing a 25% growth[23] - Total interest income for Q3 2025 was $1,077 million, a decrease of 3.7% from $1,119 million in Q3 2024[22] - Net interest income after provision for credit losses increased to $679 million in Q3 2025, compared to $592 million in Q3 2024, reflecting a growth of 14.7%[22] - Net income available to common shareholders for the nine months ended September 30, 2025, was $699 million, compared to $581 million for the same period in 2024, indicating a 20.3% increase[154] Expenses and Provisions - Total noninterest expense for Q3 2025 was $550 million, up from $511 million in Q3 2024, indicating a rise of 7.6%[22] - The provision for credit losses was a reversal of $5 million in Q3 2025, compared to a provision of $35 million in Q3 2024[22] - The provision for credit losses for the nine months ended September 30, 2025, was $65 million, down from $140 million in 2024, a reduction of 53.6%[188] - Noninterest expense for the nine months ended September 30, 2025, was $1,529 million, slightly increasing from $1,527 million in 2024, reflecting a marginal rise of 0.1%[188] Investment and Securities - As of September 30, 2025, total investment securities available for sale amounted to $8.102 billion, with unrealized losses of $750 million[49] - The total unrealized losses for available-for-sale securities as of September 30, 2025, were $750 million, compared to $1.035 billion as of December 31, 2024[57] - FHN has not recorded any credit-related write-downs for AFS debt securities during the reporting periods, indicating a stable investment strategy[59] - The amortized cost of securities held to maturity was $1.229 billion, with a fair value of $1.079 billion as of September 30, 2025[53] Shareholder Actions - The company repurchased a total of $190 million in common stock during the third quarter of 2025, part of a $1 billion repurchase program initiated in October 2024[28] - Cash dividends declared for common stock amount to $77 million for the third quarter of 2025[27] - The company declared $5 million in cash dividends for preferred stock in the third quarter of 2025[27] Credit Quality and Risk Management - The concentration of credit risk shows that 22% of the commercial and industrial portfolio is sensitive to impacts on the financial services industry, with loans to mortgage and finance companies totaling $3.9 billion each[69] - The credit quality indicators reveal that as of September 30, 2025, 32,707 million in commercial loans were classified as "pass" grades (PD grades 1-12), while 1,336 million were categorized as substandard, doubtful, or loss (PD grades 14-16)[73] - Nonaccrual loans and leases are classified when full collection of principal and interest is at risk, impacting the overall loan quality[84] - The company continues to monitor loans for potential impairment and borrower-specific issues, ensuring proactive risk management[84] Macroeconomic Factors - The SEC's Climate Disclosures Rules remain uncertain due to ongoing legal challenges, impacting FHN's assessment of potential effects on financial statements[46] - The company utilized multiple macroeconomic scenarios, including a baseline scenario from Moody's, to estimate expected credit losses[115]

Core Insights - First Horizon Corporation has appointed Kimberley Wolterstorff Gregorie as Senior Vice President, Head of Consumer Sales, to enhance consumer sales strategy and client experience [1][3] - Gregorie brings over 20 years of experience in financial services, having held various leadership roles at JPMorganChase, focusing on consumer banking and economic development initiatives [2] - The company emphasizes its commitment to a client-centric strategy and associate performance, aligning with Gregorie's goals for measurable results [3] Company Overview - First Horizon Corporation, with $83.2 billion in assets as of September 30, 2025, operates as a leading regional financial services company [3] - The company provides a wide range of services including commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking [3] - First Horizon has received recognition as one of the best employers by Fortune and Forbes magazines and is listed among the Top 10 Most Reputable U.S. Banks [3]

Core Insights - First Horizon Corporation has elected Sital K. Mody as an independent director to its Board of Directors and the First Horizon Bank Board of Directors, effective immediately [1][4]. Group 1: Leadership and Experience - Sital K. Mody, 54, is currently the President of the Natural Gas Pipelines Group and a Vice President of Kinder Morgan, Inc., overseeing all commercial and operational activities since 2023 [2][3]. - Mody has held various leadership roles at Kinder Morgan, including President of the Midstream Group from 2018 to 2023, where he managed strategic and operational initiatives [3]. - His career includes positions at El Paso Corporation, Deloitte, Tenneco Inc., and The Coca Cola Company, providing him with extensive experience in operations, strategic planning, finance, and environmental stewardship [3][4]. Group 2: Company Overview - First Horizon Corporation, as of September 30, 2025, has $83.2 billion in assets and operates primarily in the southern U.S. through its banking subsidiary, First Horizon Bank [6]. - The company offers a wide range of financial services, including commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services [6]. - First Horizon has been recognized as one of the best employers in the nation by Fortune and Forbes magazines and is noted as a Top 10 Most Reputable U.S. Bank [6].

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Core Points - First Horizon Corporation has authorized a new common stock repurchase program worth $1.2 billion, replacing the previous program which had approximately $180 million remaining [1][2] - The board declared a quarterly cash dividend of $0.15 per share on common stock, payable on January 2, 2026, to shareholders of record by December 12, 2025 [2] - The company reported total assets of $83.2 billion as of September 30, 2025, indicating a strong capital position [8] Stock Repurchase Program - The new repurchase program will be effective from October 27, 2025, and will expire on January 31, 2027 [1] - The execution of share repurchases may occur in the open market or through privately negotiated transactions, with the timing and amount at the discretion of senior management [3] Dividend Information - Cash dividends were declared for various preferred stocks, including: - Series C: $165.00 per share, payable on February 2, 2026 [4] - Series E: $1,625.00 per share, payable on January 12, 2026 [5] - Series F: $1,175.00 per share, payable on January 12, 2026 [6] - First Horizon Bank Class A: $13.15736 per share, payable on January 12, 2026 [7] Company Overview - First Horizon Corporation is a leading regional financial services company headquartered in Memphis, TN, operating in 12 states primarily in the southern U.S. [8][9] - The company offers a wide range of services including commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking [9]