FHN — First Horizon Corporation

Summary of First Horizon Corporation 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 3% loan portfolio growth.
• Adjusted Pre-Provision Net Revenue: Increased by 8% compared to 2025.
• Common Equity Tier 1 (CET1) Ratio: 10.53%, with a target updated to 10.5%.
• Tangible Book Value per Share: $14.34, reflecting a 9% year-over-year increase.
• Net Charge-Offs: $29 million, with a net charge-off ratio of 18 basis points.

2. Strategic Updates and Business Highlights

• Continued focus on relationship banking, emphasizing tailored solutions for clients.
• Strong growth in Commercial & Industrial (C&I) loans, with a $624 million increase in the quarter.
• Diversified business model is positioned to adapt to changing economic conditions.
• Successful share buybacks totaling approximately $230 million during the quarter.
• Strong pipelines in C&I and Commercial Real Estate (CRE) are expected to support future growth.

3. Forward Guidance and Outlook

• The company maintains its full-year outlook, aiming for mid-single-digit loan growth and 3% to 7% revenue growth.
• Anticipates a seasonal increase in mortgage warehouse balances in Q2, though overall mortgage origination remains low.
• Management is optimistic about the lending environment, particularly in C&I, despite macroeconomic uncertainties.
• Focus on maintaining expense discipline while investing in growth opportunities.

4. Bad News, Challenges, or Points of Concern

• Deposit Competition: Increased competition for deposits is expected, which may pressure 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 be a headwind for loan growth, although strong pipelines are noted.
• Market Volatility: Recent geopolitical events and rising energy prices could impact consumer spending and lending.

5. Notable Q&A Insights

• C&I Pipelines: Management remains optimistic about C&I pipelines, noting no significant negative impact from macro uncertainties.
• Mortgage Warehouse Lending: Expected seasonal increases, but low mortgage origination rates could limit growth.
• Credit Quality: Credit performance remains stable, with a focus on sectors tied to consumer discretionary spending.
• Expense Management: The company aims for flat expenses year-over-year, with investments in new hires and technology factored in.
• M&A Strategy: No immediate plans for M&A; focus remains on core business profitability and opportunistic growth.

This summary encapsulates the key points from First Horizon Corporation's Q1 2026 earnings call, highlighting both the positive momentum and the challenges faced by the company.