Summary of First Horizon (FHN) Q4 2025 Earnings Call

1Key Financial Results and Metrics:

Earnings Per Share (EPS):: $0.52

Net Interest Margin (NIM):: 3.512%, with a slight compression of four basis points; however, excluding Main Street Lending Program impacts, NIM expanded by two basis points.

Net Interest Income (NII):: Grew by approximately $2 million quarter-over-quarter.

Loan Growth:: Period-end loans increased by $1.1 billion (2% quarter-over-quarter), with significant growth in loans to mortgage companies.

Return on Tangible Common Equity (ROTCE):: Achieved 15% for the year.

Capital Returns:: Returned nearly $900 million in stock repurchases and over $300 million in dividends.

Common Equity Tier 1 (CET1) Ratio:: Ended at 10.64%, with a target of 10.75%.

2Strategic Updates and Business Highlights:

Focused on improving balance sheet profitability through better loan mix and disciplined deposit cost management.

Increased yields on market-based commercial real estate lending for new 2025 originations by 534 basis points.

Continued investment in technology and personnel to enhance service delivery and client relationships.

Announced a new $1.2 billion share repurchase program in October 2025, with approximately $1 billion remaining for future buybacks.

3Forward Guidance and Outlook:

2026 Revenue Growth:: Expected to range from 3% to 7%, driven by mid-single-digit loan growth and improvements in fee income.

Expense Outlook:: Anticipated to remain flat, with potential increases tied to performance-based incentives.

Loan Growth Expectations:: Mid-single-digit growth anticipated, with optimism about commercial lending pipelines and mortgage warehouse growth.

Net Charge-Offs:: Expected to remain in the range of 15 to 25 basis points, reflecting confidence in underwriting standards.

4Bad News, Challenges, or Points of Concern:

Credit Quality:: Net charge-offs increased to $30 million, with a net charge-off ratio of 19 basis points. Concerns about the potential for fluctuations in credit quality amidst economic uncertainties.

Regulatory Environment:: Uncertainty regarding regulatory changes and their potential impact on capital management and M&A opportunities.

Market Volatility:: Potential disruptions from macroeconomic factors (e.g., geopolitical tensions) could affect loan growth and client sentiment.

5Notable Q&A Insights:

Revenue Outlook:: Management indicated that the revenue growth forecast is based on current economic conditions and loan growth expectations, with potential upside if economic conditions improve.

Expense Management:: The company reiterated its commitment to maintaining flat expenses while acknowledging that higher revenues could lead to increased commission expenses.

Commercial Real Estate (CRE) Outlook:: Management expressed cautious optimism for CRE growth, citing improved pipeline activity and a stabilization in commitments.

Mortgage Warehouse Growth:: Continued client acquisition is expected, with a mix of new and existing clients contributing to growth in this segment.

C&I Loan Growth:: Broad-based growth across various sectors, with an optimistic outlook for increased utilization rates as customer confidence improves. Overall, First Horizon demonstrated solid financial performance in Q4 2025, with a positive outlook for 2026, while acknowledging potential challenges in credit quality and regulatory environments.