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First Horizon Q4 Earnings Beat, Expenses & Provisions Decline Y/Y
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First Horizon Corporation’s (FHN - Free Report) fourth-quarter 2024 adjusted earnings per share (excluding notable items) of 43 cents surpassed the Zacks Consensus Estimate of 38 cents. This compares favorably with 32 cents reported in the year-ago quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
For 2024, adjusted earnings per share (excluding notable items) was $1.55, which beat the Zacks Consensus Estimate of $1.5. This compares favorably with $1.43 reported in the year-ago quarter.
Results benefited from a rise in net interest income (NII) and a decline in expenses. Also, lower provisions were another positive. However, a fall in fee income and a deteriorating capital position were major headwinds.
Net income available to its common shareholders (GAAP basis) was $158 million, down 9.7% year over year.
For 2024, the company reported net income available to its common shareholders (GAAP basis) of $738 million, which decreased 14.7% year over year.
FHN’s Revenues and Expenses Decline
Total quarterly revenues were $729 million, which decreased 8.9% year over year. Also, the top line missed the Zacks Consensus Estimate of $822.47 million.
Full-year revenues aggregated to $3.19 billion, which decreased 8% year over year. The top line missed the Zacks Consensus Estimate of $3.28 billion.
NII increased 2.1% year over year to $630 million. Additionally, the net interest margin increased 6 basis points from the prior-year quarter to 3.33%.
Non-interest income was $99 million, which declined 45.9% from the year-ago level. The decrease was primarily due to a securities loss of $91 million reported in the quarter.
Non-interest expenses decreased 11.2% year over year to $508 million. The fall was due to a decline in incentives and commission fees and deferred compensation expense.
The efficiency ratio was 61.98%, down from the year-ago period’s 71.14%. A fall in the efficiency ratio indicates a rise in profitability.
FHN’s Loans and Deposits Balances Decline
Total period-end loans and leases, net of unearned income, were $62.55 billion, which increased marginally from the end of the previous quarter. Total period-end deposits of $65.6 billion decreased 1.5%.
FHN’s Credit Quality: Mixed Bag
Non-performing loans and leases of $602 million increased 30.3% from the prior-year period.
As of Dec. 31, 2024, the ratio of total allowance for loan and lease losses to loans and leases was 1.3%, up from 1.26% reported in the prior-year quarter. The allowance for loan and lease losses of $815 million rose 5.4% from the year-ago period.
First Horizon witnessed net charge-offs of $13 million, which decreased 63.9% year over year. Moreover, the provision for credit losses was $10 million, which plunged 80% from the year-earlier quarter.
FHN’s Capital Ratios Deteriorates
As of Dec. 31, 2024, the Common Equity Tier 1 ratio was 11.2%, down from 11.4% reported at the end of the year-ago quarter.
The total capital ratio was 13.9%, down from the year-ago quarter’s 14%. The tier 1 leverage ratio was 10.6%, down from 10.7% in the year-ago quarter.
FHN’s Share Repurchase Update
In the reported quarter, the company repurchased $163 million shares of common stock.
Our Viewpoint on FHN
First Horizon benefited from an increase in NII and reduced expenses. However, a decline in loan and deposit balances could pose long-term challenges to its financial performance.
First Horizon Corporation Price, Consensus and EPS Surprise
Prosperity Bancshares, Inc. (PB - Free Report) is scheduled to release fourth-quarter 2024 earnings on Jan. 29. The company carries a Zacks Rank #3 (Hold) at present.
The Zacks Consensus Estimate for PB’s quarterly earnings has remained unchanged at $1.33 per share over the past seven days.
Cullen/Frost Bankers, Inc. (CFR - Free Report) is scheduled to release fourth-quarter 2024 earnings on Jan. 30. The company carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for CFR’s quarterly earnings has remained unchanged at $2.15 per share over the past seven days.
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First Horizon Q4 Earnings Beat, Expenses & Provisions Decline Y/Y
First Horizon Corporation’s (FHN - Free Report) fourth-quarter 2024 adjusted earnings per share (excluding notable items) of 43 cents surpassed the Zacks Consensus Estimate of 38 cents. This compares favorably with 32 cents reported in the year-ago quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
For 2024, adjusted earnings per share (excluding notable items) was $1.55, which beat the Zacks Consensus Estimate of $1.5. This compares favorably with $1.43 reported in the year-ago quarter.
Results benefited from a rise in net interest income (NII) and a decline in expenses. Also, lower provisions were another positive. However, a fall in fee income and a deteriorating capital position were major headwinds.
Net income available to its common shareholders (GAAP basis) was $158 million, down 9.7% year over year.
For 2024, the company reported net income available to its common shareholders (GAAP basis) of $738 million, which decreased 14.7% year over year.
FHN’s Revenues and Expenses Decline
Total quarterly revenues were $729 million, which decreased 8.9% year over year. Also, the top line missed the Zacks Consensus Estimate of $822.47 million.
Full-year revenues aggregated to $3.19 billion, which decreased 8% year over year. The top line missed the Zacks Consensus Estimate of $3.28 billion.
NII increased 2.1% year over year to $630 million. Additionally, the net interest margin increased 6 basis points from the prior-year quarter to 3.33%.
Non-interest income was $99 million, which declined 45.9% from the year-ago level. The decrease was primarily due to a securities loss of $91 million reported in the quarter.
Non-interest expenses decreased 11.2% year over year to $508 million. The fall was due to a decline in incentives and commission fees and deferred compensation expense.
The efficiency ratio was 61.98%, down from the year-ago period’s 71.14%. A fall in the efficiency ratio indicates a rise in profitability.
FHN’s Loans and Deposits Balances Decline
Total period-end loans and leases, net of unearned income, were $62.55 billion, which increased marginally from the end of the previous quarter. Total period-end deposits of $65.6 billion decreased 1.5%.
FHN’s Credit Quality: Mixed Bag
Non-performing loans and leases of $602 million increased 30.3% from the prior-year period.
As of Dec. 31, 2024, the ratio of total allowance for loan and lease losses to loans and leases was 1.3%, up from 1.26% reported in the prior-year quarter. The allowance for loan and lease losses of $815 million rose 5.4% from the year-ago period.
First Horizon witnessed net charge-offs of $13 million, which decreased 63.9% year over year. Moreover, the provision for credit losses was $10 million, which plunged 80% from the year-earlier quarter.
FHN’s Capital Ratios Deteriorates
As of Dec. 31, 2024, the Common Equity Tier 1 ratio was 11.2%, down from 11.4% reported at the end of the year-ago quarter.
The total capital ratio was 13.9%, down from the year-ago quarter’s 14%. The tier 1 leverage ratio was 10.6%, down from 10.7% in the year-ago quarter.
FHN’s Share Repurchase Update
In the reported quarter, the company repurchased $163 million shares of common stock.
Our Viewpoint on FHN
First Horizon benefited from an increase in NII and reduced expenses. However, a decline in loan and deposit balances could pose long-term challenges to its financial performance.
First Horizon Corporation Price, Consensus and EPS Surprise
First Horizon Corporation price-consensus-eps-surprise-chart | First Horizon Corporation Quote
First Horizon currently sports Zacks Rank #1 (Strong Buy). You can see Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings Dates & Expectations of Bank Stocks
Prosperity Bancshares, Inc. (PB - Free Report) is scheduled to release fourth-quarter 2024 earnings on Jan. 29. The company carries a Zacks Rank #3 (Hold) at present.
The Zacks Consensus Estimate for PB’s quarterly earnings has remained unchanged at $1.33 per share over the past seven days.
Cullen/Frost Bankers, Inc. (CFR - Free Report) is scheduled to release fourth-quarter 2024 earnings on Jan. 30. The company carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for CFR’s quarterly earnings has remained unchanged at $2.15 per share over the past seven days.