First Horizon Shares Gain as Q4 Earnings Beat on Y/Y NII Growth

Core Viewpoint - First Horizon Corporation (FHN) reported better-than-expected fourth-quarter 2025 results, with adjusted earnings per share of 52 cents, exceeding the Zacks Consensus Estimate of 47 cents and up from 43 cents in the same quarter last year [1][9] Financial Performance - The company's net income available to common shareholders (GAAP basis) was $257 million, a 63% increase year over year, benefiting from higher net interest income (NII) and a significant rise in non-interest income, with no provision for credit losses recorded [2][11] - For the full year 2025, adjusted earnings per share reached $1.89, surpassing the Zacks Consensus Estimate of $1.84, and reflecting a 22% increase from the previous year [3] - Total quarterly revenues were $888 million, a 22% year-over-year increase, exceeding the Zacks Consensus Estimate by 2.9% [4] Revenue and Expenses - Total revenues for 2025 were $3.42 billion, growing 7% year over year and also surpassing the Zacks Consensus Estimate of $3.39 billion [4] - NII increased by 7% year over year to $676 million, with the net interest margin rising 18 basis points to 3.51% [4] - Non-interest income was reported at $212 million, more than double the year-ago level, primarily due to the absence of securities portfolio restructuring losses [5] Efficiency and Cost Management - The efficiency ratio improved to 61.33%, down from 61.98% in the same quarter last year, indicating enhanced profitability [6] - Non-interest expenses rose 7% year over year to $545 million, driven by higher personnel costs and other operational expenses [5] Loan and Deposit Growth - Total period-end loans and leases were $64.16 billion, a 3% increase from the year-ago quarter, while total period-end deposits rose to $67.47 billion, also up 3% year over year [7] Credit Quality - Non-performing loans and leases totaled $604 million, slightly up from the previous year, while the allowance for credit losses to loans and leases ratio decreased to 1.31% from 1.43% [8] - Net charge-offs increased to $30 million from $13 million in the year-ago quarter, with no provision for credit losses recorded in the fourth quarter [8][9] Capital Ratios - As of December 31, 2025, the common equity tier 1 ratio was 10.6%, down from 11.2% a year ago, and the total capital ratio decreased to 13.4% from 14.2% [10]