First Horizon(FHN) - 2025 Q1 - Quarterly Results

Financial Performance - First Horizon reported net income available to common shareholders of $213 million, with an EPS of $0.41, a 41% increase from the prior quarter's EPS of $0.29[1] - Adjusted net income for the first quarter was $217 million or $0.42 per share, down from $228 million or $0.43 per share in the fourth quarter of 2024[1] - Total revenue for Q1 2025 was $812 million, reflecting an 11% increase from $729 million in Q4 2024[26] - Net income for Q1 2025 was $222 million, up 31% from $170 million in Q4 2024[26] - Diluted EPS for Q1 2025 was $0.41, representing a 41% increase compared to $0.29 in Q4 2024[26] - Adjusted net income available to common shareholders for Q1 2025 was $217 million, reflecting an 11% increase from $195 million in Q1 2024[28] - Adjusted diluted EPS for Q1 2025 was $0.42, a 20% increase from $0.35 in Q1 2024[28] Income and Expenses - Net interest income increased by $1 million to $634 million, with a net interest margin of 3.42%, up 9 basis points from the previous quarter[6] - Noninterest income rose by $82 million to $181 million, primarily due to the absence of a $91 million notable loss from the previous quarter's securities portfolio restructuring[7] - Noninterest expense decreased by $21 million to $488 million, with adjusted noninterest expense down $24 million to $482 million[8] - Total noninterest expense decreased to $488 million in Q1 2025, down 4% from $508 million in Q4 2024[26] - Adjusted total noninterest expense decreased by 5% to $482 million in Q1 2025, compared to $506 million in Q4 2024[28] Asset and Liability Management - Average loan and lease balances decreased by $773 million to $61.6 billion, while period-end balances were $62.2 billion, down $350 million from the fourth quarter[9] - Average deposits fell by $1.6 billion to $64.5 billion, with period-end deposits declining by $1.4 billion[10] - Total assets decreased by $660 million to $81.491 billion, a 1% decline from Q4 2024[37] - Total deposits fell by $1.373 billion to $64.208 billion, a 2% decrease compared to Q4 2024[37] - Loans and leases net of unearned income decreased by $350 million to $62.215 billion, a 1% decline from Q4 2024[37] Credit Quality - Provision expense for credit losses increased by $30 million to $40 million, with net charge-offs rising to $29 million, or 19 basis points[11] - Provision for credit losses increased to $40 million in Q1 2025, compared to $10 million in Q4 2024[26] - Total nonperforming loans and leases increased to $609 million in Q1 2025, up 1% from $602 million in Q4 2024 and up 21% from $505 million in Q1 2024[42] - The asset quality ratio for total nonperforming loans and leases to loans and leases was 0.98% in Q1 2025, compared to 0.96% in Q4 2024 and 0.82% in Q1 2024[42] - The allowance for loan and lease losses at the end of 1Q25 was $822 million, reflecting a 1% increase from $815 million in Q4 24[48] Capital and Ratios - The Common Equity Tier 1 (CET1) ratio was 10.9%, slightly down from the previous quarter, as $360 million of excess capital was returned to shareholders[12] - The effective tax rate for the first quarter was 22.0%, compared to 19.3% in the fourth quarter of 2024[13] - Return on average assets improved to 1.11%, a 29 basis point increase compared to Q4 2024 and a 14 basis point increase from Q1 2024[35] - Return on average common equity (ROCE) rose to 10.30%, up 292 basis points from Q4 2024 and 154 basis points from Q1 2024[35] - Adjusted ROTCE for Q1 2025 was 13.1%, slightly down from 13.3% in Q4 2024[28] Operational Efficiency - Adjusted efficiency ratio improved to 59.1% in Q1 2025, down from 60.8% in Q1 2024[28] - Efficiency ratio improved to 60.06%, down 192 basis points from Q4 2024[35] - The efficiency ratio (GAAP) improved to 60.06% in Q1 2025 from 61.98% in Q4 2024, indicating enhanced operational efficiency[69] - The adjusted efficiency ratio (Non-GAAP) improved to 59.09% in Q1 2025 from 61.43% in Q4 2024, indicating better cost management[69] Segment Performance - In the Wholesale segment, net interest income was $50 million in Q1 2025, down 8% from Q4 2024[56] - The net income for the Wholesale segment was $22 million in Q1 2025, a decrease of 17% from Q4 2024[56] - Net income for Q1 2025 was a loss of $69 million, an improvement of 52% compared to a loss of $143 million in Q4 2024[59] - Total revenues decreased by 30% to $(30) million in Q1 2025 from $(134) million in Q4 2024[59] - Noninterest income was $12 million, down from $75 million in Q4 2024, representing a decline of 84%[59]