FHN — First Horizon Corporation

First Horizon Corporation (FHN) 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.
• 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%.
• Adjusted Pre-Provision Net Revenue (PPNR): Increased by 8% compared to the previous year.
• Common Equity Tier 1 (CET1) Ratio: 10.53%, with a Tier 1 capital ratio of 11.95%.
• Tangible Book Value per Share: $14.34, a 9% increase year-over-year.

2. Strategic Updates and Business Highlights:

• Continued focus on relationship banking, with strong growth in Commercial & Industrial (C&I) loans, which increased by $624 million in the quarter.
• The company successfully executed a buyback of approximately $230 million in common shares and issued $400 million of Series H preferred stock.
• Emphasis on enhancing client relationships and expanding treasury and wealth management services.
• Progress on a $100 million PPNR opportunity, driven by improved CRE pricing and deeper integration of regional and specialty banking.

3. Forward Guidance and Outlook:

• Maintained full-year revenue growth expectations of 3% to 7%, with potential for higher growth if economic conditions improve.
• Anticipated seasonal increases in loans to mortgage companies in Q2, though overall mortgage origination remains low.
• Continued focus on expense discipline while investing in growth, with a flat expense outlook year-over-year.
• Optimism regarding the lending environment, particularly in C&I, despite macroeconomic uncertainties.

4. Challenges and Points of Concern:

• Deposit Competition: Increased competition for deposits with rising interest rates, leading to a slight uptick in deposit costs expected in Q2 and Q3.
• Commercial Real Estate (CRE): Ongoing headwinds in CRE loan balance growth, although strong pipelines are noted for future stabilization.
• Consumer Loan Portfolio: Experienced a decline of $198 million, indicating challenges in consumer lending.
• Economic Uncertainty: Concerns regarding discretionary spending due to rising energy prices and geopolitical tensions, which could impact credit performance.

5. Notable Q&A Insights:

• C&I Lending Outlook: CEO D. Bryan Jordan expressed optimism about C&I pipelines remaining strong despite macro uncertainties, with business leaders looking to invest and grow.
• Mortgage Warehouse Lending: CFO Hope Dmuchowski indicated expectations for seasonal increases in warehouse balances but acknowledged the low mortgage origination environment.
• Credit Quality: Chief Credit Officer Thomas Hung noted consistent credit performance but highlighted the need to monitor sectors tied to consumer discretionary spending.
• Expense Management: The company is focused on maintaining flat expenses while investing in new talent and technology, with a cautious approach to economic uncertainties impacting revenue growth.

Overall, FHN demonstrated strong financial performance in Q1 2026, with a positive outlook on C&I lending and strategic initiatives aimed at enhancing profitability, despite facing challenges in deposit competition and consumer lending.