First Horizon Q3 Earnings Top Estimates on Y/Y NII & Fee Income Growth

Core Insights - First Horizon Corporation's (FHN) third-quarter 2025 adjusted earnings per share (EPS) of 51 cents exceeded the Zacks Consensus Estimate of 45 cents and increased from 42 cents in the same quarter last year [1][9] - The results were driven by an increase in net interest income (NII) and non-interest income, along with provision benefits, although there was a decline in loan and deposit balances [10] Financial Performance - Net income available to common shareholders on a GAAP basis was $254 million, reflecting a year-over-year increase of 19.2% [2] - Total quarterly revenues reached $889 million, up 7.4% year over year, and surpassed the Zacks Consensus Estimate by 5.1% [3] - NII rose nearly 7.5% year over year to $674 million, with the net interest margin increasing by 24 basis points to 3.55% [3] - Non-interest income was $215 million, also up 7.5% from the previous year [3] Expense Analysis - Non-interest expenses increased by 7.8% year over year to $551 million, attributed to rising costs across nearly all components except for amortization of intangible assets [4] - The efficiency ratio was 61.92%, slightly up from 61.89% in the prior year, indicating a slight deterioration in profitability [4] Loan and Deposit Trends - Total period-end loans and leases were $63.05 billion, showing a slight decrease from the previous quarter [5] - Total period-end deposits were $65.52 billion, which also declined moderately [5] Credit Quality Assessment - Non-performing loans and leases increased by 4.7% year over year to $605 million [6] - The allowance for loan and lease losses was $777 million, down 5.6% from the previous year, with the ratio of total allowance to loans and leases at 1.23%, down from 1.32% [6][8] - Net charge-offs were $26 million, an increase of 8.3% year over year, while provision benefits were recorded at $5 million compared to a provision for credit losses of $35 million in the prior year [7] Capital Ratios - As of September 30, 2025, the Common Equity Tier 1 ratio was 11%, down from 11.2% a year earlier [8] - The total capital ratio decreased to 13.8% from 14.2% in the prior year [8] - The tier 1 leverage ratio was 10.5%, down from 10.6% in the previous year [8]