FHN-PE — First Horizon Corporation

First Horizon Corporation (FHN-PE) Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Earnings Per Share (EPS): $0.53, up $0.11 year-over-year.
• Return on Average Assets (ROAA): 1.3%, an increase of 19 basis points from Q1 2025.
• Adjusted Return on Tangible Common Equity (ROTCE): 15.1%, up over 200 basis points year-over-year.
• Net Interest Income (NII): Grew 6% year-over-year, outpacing loan portfolio growth of 3%.
• Period-End Loans: Increased by $21 million quarter-over-quarter, with a notable $624 million growth in the C&I portfolio.
• Net Charge-Offs: Decreased slightly to $29 million, with a net charge-off ratio of 18 basis points.
• Common Equity Tier 1 (CET1) Ratio: 10.53%, with a Tier 1 capital ratio of 11.95% following a $400 million preferred stock issuance.
• Tangible Book Value per Share: Increased 9% year-over-year to $14.34.

2. Strategic Updates and Business Highlights:

• Continued focus on relationship banking, with strong client activity in C&I and commercial real estate (CRE) pipelines.
• Successful execution of a diversified business model that supports profitable growth, particularly in C&I lending.
• Ongoing efforts to deepen client relationships and enhance product offerings, contributing to improved profitability.
• Expense discipline maintained, with adjusted expenses decreasing by $32 million quarter-over-quarter.
• Share buybacks totaled approximately $230 million during the quarter, with $765 million remaining under board authorization.

3. Forward Guidance and Outlook:

• Full-year revenue growth expected in the range of 3% to 7%, driven by NII and fee income.
• Near-term CET1 target updated to 10.5%, with a focus on maintaining capital discipline while being opportunistic with share repurchases.
• Continued optimism for loan growth, particularly in C&I, with expectations for mid-single-digit growth across the portfolio.
• The company aims to achieve over $100 million in pre-provision net revenue (PPNR) in the coming years, with progress already noted.

4. Bad News, Challenges, or Points of Concern:

• Deposit Competition: Increased competition for deposits noted, with expectations for deposit costs to rise slightly in Q2 and Q3.
• Commercial Real Estate Headwinds: Ongoing challenges in the CRE sector, with stabilized loans moving to permanent markets impacting growth.
• Consumer Loan Portfolio Decline: A decrease of $198 million in the consumer loan portfolio, reflecting normal fluctuations.
• Economic Uncertainty: Potential risks from geopolitical events and rising energy prices affecting discretionary consumer spending.

5. Notable Q&A Insights:

• C&I Lending Outlook: CEO D. Bryan Jordan expressed optimism about C&I pipelines, noting strong demand despite macro uncertainties.
• Mortgage Warehouse Lending: CFO Hope Dmuchowski indicated expectations for seasonal increases in warehouse balances, though cautious about overall mortgage origination trends.
• Credit Quality Monitoring: Chief Credit Officer Thomas Hung highlighted vigilance regarding sectors tied to consumer discretionary spending, while overall credit performance remains stable.
• Expense Management: CFO noted that while expenses are expected to remain flat, variability may arise from marketing and technology project expenditures.
• M&A Stance: The company remains focused on organic growth but is open to opportunistic acquisitions that align with its strategic goals.

Overall, First Horizon Corporation demonstrated solid financial performance in Q1 2026, with a focus on maintaining growth and profitability amidst a competitive and evolving economic landscape.