FHN-PC — First Horizon Corporation

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

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%.
• Adjusted Pre-Provision Net Revenue (PPNR): Increased by 8% compared to the previous year.
• Common Equity Tier 1 (CET1) Ratio: 10.53%, with a target updated to 10.5%.
• Tangible Book Value per Share: $14.34, up 9% year-over-year.

2. Strategic Updates and Business Highlights

• Continued focus on building client relationships and providing tailored solutions, particularly in Commercial & Industrial (C&I) lending.
• Strong growth in C&I loan balances, with $624 million growth in the quarter.
• Successful buyback of approximately $230 million in common shares and issuance of $400 million in Series H preferred stock.
• Emphasis on expense discipline, with a $32 million reduction in adjusted expenses from the prior quarter.
• Strong pipelines in C&I and Commercial Real Estate (CRE), with optimism about future loan growth.

3. Forward Guidance and Outlook

• Maintaining full-year revenue growth guidance of 3% to 7%, driven by NII and fee income.
• Expectation for continued strong client activity and potential for improved economic conditions to drive loan growth.
• Anticipation of a seasonal increase in loans to mortgage companies in Q2, though overall mortgage origination remains low.
• Management remains optimistic about achieving over $100 million in incremental PPNR over the next couple of years.

4. Bad News, Challenges, or Points of Concern

• Deposit Competition: Increased competition for deposits noted, with expectations for slight upward pressure on deposit costs in Q2 and Q3.
• Consumer Loan Portfolio: Experienced a decline of $198 million, attributed to normal fluctuations.
• Commercial Real Estate (CRE): Continues to present headwinds for loan balance growth, though strong pipelines are noted.
• Economic Uncertainty: Concerns about macroeconomic factors, including geopolitical tensions and energy prices impacting discretionary spending.

5. Notable Q&A Insights

• C&I Lending: Management remains optimistic about C&I pipelines, noting no significant impact from macro uncertainties.
• Mortgage Warehouse Lending: Expected seasonal increases in Q2, but overall origination remains low due to rising rates.
• Credit Quality: Net charge-offs remain low at 18 basis points, but management is closely monitoring sectors tied to consumer discretionary spending.
• Expense Management: Management aims for flat year-over-year expenses while investing in growth and talent.
• M&A Activity: No immediate plans for M&A; focus remains on internal profitability and operational efficiency.

Overall, First Horizon Corporation demonstrated strong financial performance in Q1 2026, with positive momentum in client relationships and loan growth, while also navigating challenges in deposit competition and economic uncertainties.