FHN-PE — First Horizon Corporation

Summary of First Horizon (FHN-PE) Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted Earnings Per Share (EPS): Increased by $0.09, or 20%, year-over-year to $0.54.
• Adjusted Pre-Provision Net Revenue (PPNR): Grew by 1% to $364 million.
• Loan Balances: Period-end loan balances rose by approximately $2 billion compared to Q2 2025, with a $953 million increase from the prior quarter.
• Net Interest Income (NII): Increased by $9 million, despite a 3 basis point compression in Net Interest Margin (NIM), settling in the high 340s.
• Deposit Growth: Period-end deposits rose by $1.6 billion, primarily driven by brokered deposits.
• Capital Ratios: Common Equity Tier 1 (CET1) ratio stood at 10.5%, in line with targets, and tangible book value per share increased by 7% year-over-year to $14.53.

2. Strategic Updates and Business Highlights

• Client Relationship Focus: The bank emphasizes building long-term relationships and enhancing service offerings to clients, particularly in commercial and wealth management sectors.
• Wealth Management Growth: Increased brokerage, trust, and insurance income driven by a successful transition to the LPL platform and hiring of wealth advisors.
• Loan Growth: Strong production with new commitments up over 50% year-over-year, particularly in commercial real estate.
• Expense Management: Continued focus on expense discipline, with personnel costs rising due to hiring but overall expenses expected to remain flat.

3. Forward Guidance and Outlook

• Revenue Growth: Full-year revenue growth is expected to remain within the 3% to 7% range, contingent on macroeconomic conditions and loan growth.
• NIM Expectations: NIM is projected to stabilize in the mid to high 340s, with slight compression anticipated due to rising deposit costs.
• Credit Quality: The bank maintains a positive outlook on credit quality, with net charge-offs in line with expectations and a focus on minimizing losses.

4. Bad News, Challenges, or Points of Concern

• Deposit Cost Pressure: The competitive environment is leading to rising deposit costs, which could impact NIM and overall profitability.
• Market Volatility: Uncertainty in the macroeconomic environment, particularly related to geopolitical factors and interest rate movements, poses risks to revenue and credit quality.
• Fixed Income Revenue Decline: A decrease in fixed income revenues due to macroeconomic volatility and changing rates, although offset by growth in wealth management.

5. Notable Q&A Insights

• Deposit Costs: CFO Hope Dmuchowski indicated that deposit costs are expected to rise in the second half of the year, similar to trends seen in 2025, depending on the direction of interest rates.
• Loan Competition: CEO Bryan Jordan noted that while loan spreads are under pressure, optimism remains strong in the market, with robust pipelines for lending.
• Credit Quality Monitoring: Chief Credit Officer Thomas Hung confirmed that while consumer-sensitive sectors are being closely watched, they have shown resilience thus far.
• Hiring Strategy: The bank continues to attract talent, focusing on hiring in client-facing roles while avoiding unnecessary increases in support staff.

This summary encapsulates the key points from the earnings call, reflecting First Horizon's financial health, strategic direction, and the challenges it faces in a competitive and volatile environment.