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Why Is First Horizon (FHN) Up 0.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for First Horizon National (FHN - Free Report) . Shares have added about 0.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is First Horizon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
First Horizon Q2 Earnings Top Estimates as NII Rises, Expenses Decline
First Horizon's second-quarter 2025 adjusted earnings per share (excluding notable items) of 45 cents surpassed the Zacks Consensus Estimate of 41 cents. This compares favorably with 36 cents in the year-ago quarter.
Results benefited from a rise in net interest income and non-interest income, along with a decline in expenses. Also, lower provisions and a rise in loans and deposit balances were other positives.
Net income available to its common shareholders (GAAP basis) was $233 million, up 27% year over year.
Revenues Rise, Expenses Decline
Total quarterly revenues were $830 million, which rose 1.8% year over year. Also, the top line missed the Zacks Consensus Estimate by 0.9%.
NII increased nearly 2% year over year to $641 million. Additionally, the net interest margin increased 2 basis points from the prior-year quarter to 3.40%.
Non-interest income was $189 million, up 1.6% from the year-ago level.
Non-interest expenses decreased 1.8% year over year to $491 million. The fall was due to a decline in almost all cost components, except for occupancy and equipment costs, and salary and benefits.
The efficiency ratio was 59.20%, down from the year-ago period’s 61.44%. A fall in the efficiency ratio indicates a rise in profitability.
Loans & Deposits Balances Increase
Total period-end loans and leases, net of unearned income, were $63.3 billion, which increased 1.7% from the end of the previous quarter. Total period-end deposits of $65.6 billion rose 2.1%.
Credit Quality: Mixed Bag
Non-performing loans and leases of $593 million increased 3.3% from the prior-year period.
As of June 30, 2025, the ratio of total allowance for loans and lease losses to loans and leases was 1.29%, down from 1.31% in the prior-year quarter. The allowance for loan and lease losses of $814 million fell 0.8% from the year-ago period.
First Horizon witnessed net charge-offs of $34 million, which remained relatively flat on a year-over-year basis. Moreover, the provision for credit losses was $30 million, which plunged 45% from the year-earlier quarter.
Capital Ratios Stable
As of June 30, 2025, the Common Equity Tier 1 ratio of 11% was stable compared with the year-ago quarter.
The total capital ratio was 14%, the same as the year-ago quarter level. The tier 1 leverage ratio was 10.6%, stable compared with the year-ago quarter level.
2025 Outlook
Adjusted revenues are expected to be flat to rise 4% from the $3.28 billion reported in 2024.
Adjusted non-interest expenses are expected to remain flat or rise 2% from the $1.98 billion reported in 2024, due to strong expense management in the first quarter and lower commissions in countercyclical fee businesses.
The net charge-off ratio is anticipated to be 0.15-0.25% bps compared with the 2024 reported figure of 0.18%, reflecting continued credit normalization and the benefit of declining rates.
The CET 1 ratio is envisioned to be 10.5-11%, reflecting expectations for modest loan growth in addition to opportunistic deployment of excess capital.
The effective tax rate is forecast to be 21-23%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a flat trend in estimates review.
VGM Scores
At this time, First Horizon has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
First Horizon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is First Horizon (FHN) Up 0.3% Since Last Earnings Report?
A month has gone by since the last earnings report for First Horizon National (FHN - Free Report) . Shares have added about 0.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is First Horizon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
First Horizon Q2 Earnings Top Estimates as NII Rises, Expenses Decline
First Horizon's second-quarter 2025 adjusted earnings per share (excluding notable items) of 45 cents surpassed the Zacks Consensus Estimate of 41 cents. This compares favorably with 36 cents in the year-ago quarter.
Results benefited from a rise in net interest income and non-interest income, along with a decline in expenses. Also, lower provisions and a rise in loans and deposit balances were other positives.
Net income available to its common shareholders (GAAP basis) was $233 million, up 27% year over year.
Revenues Rise, Expenses Decline
Total quarterly revenues were $830 million, which rose 1.8% year over year. Also, the top line missed the Zacks Consensus Estimate by 0.9%.
NII increased nearly 2% year over year to $641 million. Additionally, the net interest margin increased 2 basis points from the prior-year quarter to 3.40%.
Non-interest income was $189 million, up 1.6% from the year-ago level.
Non-interest expenses decreased 1.8% year over year to $491 million. The fall was due to a decline in almost all cost components, except for occupancy and equipment costs, and salary and benefits.
The efficiency ratio was 59.20%, down from the year-ago period’s 61.44%. A fall in the efficiency ratio indicates a rise in profitability.
Loans & Deposits Balances Increase
Total period-end loans and leases, net of unearned income, were $63.3 billion, which increased 1.7% from the end of the previous quarter. Total period-end deposits of $65.6 billion rose 2.1%.
Credit Quality: Mixed Bag
Non-performing loans and leases of $593 million increased 3.3% from the prior-year period.
As of June 30, 2025, the ratio of total allowance for loans and lease losses to loans and leases was 1.29%, down from 1.31% in the prior-year quarter. The allowance for loan and lease losses of $814 million fell 0.8% from the year-ago period.
First Horizon witnessed net charge-offs of $34 million, which remained relatively flat on a year-over-year basis. Moreover, the provision for credit losses was $30 million, which plunged 45% from the year-earlier quarter.
Capital Ratios Stable
As of June 30, 2025, the Common Equity Tier 1 ratio of 11% was stable compared with the year-ago quarter.
The total capital ratio was 14%, the same as the year-ago quarter level. The tier 1 leverage ratio was 10.6%, stable compared with the year-ago quarter level.
2025 Outlook
Adjusted revenues are expected to be flat to rise 4% from the $3.28 billion reported in 2024.
Adjusted non-interest expenses are expected to remain flat or rise 2% from the $1.98 billion reported in 2024, due to strong expense management in the first quarter and lower commissions in countercyclical fee businesses.
The net charge-off ratio is anticipated to be 0.15-0.25% bps compared with the 2024 reported figure of 0.18%, reflecting continued credit normalization and the benefit of declining rates.
The CET 1 ratio is envisioned to be 10.5-11%, reflecting expectations for modest loan growth in addition to opportunistic deployment of excess capital.
The effective tax rate is forecast to be 21-23%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a flat trend in estimates review.
VGM Scores
At this time, First Horizon has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
First Horizon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.