First Horizon Q1 Earnings Beat, Expenses & Provisions Decline Y/Y

Core Viewpoint - First Horizon Corporation's first-quarter 2025 adjusted earnings per share of 42 cents exceeded the Zacks Consensus Estimate of 40 cents and improved from 35 cents in the prior year, driven by a slight increase in net interest income and reduced expenses, although challenges included a decline in fee income and a weakening capital position [1][2][11]. Financial Performance - Net income available to common shareholders was $213 million, reflecting a year-over-year increase of 15.8$812 million, a slight decrease year-over-year, and fell short of the Zacks Consensus Estimate of $818.3 million [3]. - Net interest income rose nearly 1$631 million, with the net interest margin increasing by 5 basis points to 3.42% [3]. - Non-interest income was $181 million, down 6.7$488 million, attributed to reductions in nearly all cost components except for occupancy and equipment costs [4]. - The efficiency ratio improved to 60.06%, down from 62.92% in the prior year, indicating enhanced profitability [5]. Loan and Deposit Trends - Total period-end loans and leases were $62.22 billion, showing a slight decrease from the previous quarter, while total period-end deposits were$64.21 billion, down 2.1% [6]. Credit Quality - Non-performing loans and leases increased by 20.6% year-over-year to $609 million, with the allowance for loan and lease losses rising 4.4$822 million [7]. - The ratio of total allowance for loans and lease losses to loans and leases was 1.32%, up from 1.06% in the prior year [7]. - Net charge-offs decreased by 27.5% year-over-year to $29 million, and the provision for credit losses fell by 20$40 million [8]. Capital Ratios - As of March 31, 2025, the Common Equity Tier 1 ratio was 10.9%, down from 11.3% a year earlier, while the total capital ratio decreased to 13.7% from 13.9% [9]. Share Repurchase Activity - In the reported quarter, the company repurchased $360 million worth of common stock [10].