First Horizon Q4 Earnings Call Highlights

Core Viewpoint - First Horizon reported a strong finish to 2025, highlighting improved profitability metrics, solid loan and deposit trends, and substantial capital returns, while providing an optimistic outlook for 2026 with expected revenue growth and expense discipline [4]. Financial Performance - The company ended Q4 with earnings per share of $0.52, a net interest margin (NIM) of 3.51%, and 2% loan growth, benefiting from deposit pricing and loan growth in certain categories [3][6]. - Net interest income increased by approximately $2 million compared to the prior quarter, although NIM compressed by four basis points [2]. - The average interest-bearing deposit cost declined by 25 basis points to 2.53% [1]. Loan and Deposit Trends - Period-end loans increased by $1.1 billion, or 2%, from the prior quarter, with significant growth in loans to mortgage companies, which rose by $776 million [7]. - The company also reported broad-based strength in commercial and industrial lending, with a $727 million increase in the C&I portfolio [8]. Fee Income and Expenses - Fee income rose by $3 million from the prior quarter, primarily driven by service charges and elevated activity in the equipment finance lease business [9]. - Adjusted expenses increased by $4 million, with personnel expenses rising by $12 million due to annual bonus adjustments [10][11]. Credit Trends and Capital Return - Credit results remained stable, with net charge-offs increasing by $4 million to $30 million, and the net charge-off ratio at 19 basis points [14]. - The company ended the quarter with a Common Equity Tier 1 (CET1) ratio of 10.64%, having repurchased nearly $335 million of common shares in Q4 and a total of $894 million for 2025 [16][17]. 2026 Outlook - For 2026, management expects PPNR-driven revenue growth of 3%–7%, with NIM around the mid-340s and net charge-offs projected at 15–25 basis points [5][20]. - The company aims to deepen client relationships and invest in technology while maintaining efficiency and discipline [13][19].