We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
First Horizon Q3 Earnings Top Estimates on Y/Y NII & Fee Income Growth
Read MoreHide Full Article
Key Takeaways
First Horizon's Q3 adjusted EPS of 51 cents beat estimates and rose from 42 cents a year earlier.
Revenue grew 7.4% year over year to $889 million, driven by gains in NII and non-interest income.
Loan and deposit balances slipped slightly, while credit quality showed mixed performance.
First Horizon Corporation’s (FHN - Free Report) third-quarter 2025 adjusted earnings per share (excluding notable items) of 51 cents surpassed the Zacks Consensus Estimate of 45 cents. This compares favorably with 42 cents in the year-ago quarter.
Results benefited from a rise in net interest income (NII) and non-interest income, along with provision benefits. However, a decline in loan and deposit balances acted as a headwind.
Net income available to its common shareholders (GAAP basis) was $254 million, up 19.2% year over year.
FHN’s Revenues & Expenses Rise
Total quarterly revenues were $889 million, which rose 7.4% year over year. Also, the top line surpassed the Zacks Consensus Estimate by 5.1%.
NII increased nearly 7.5% year over year to $674 million. Additionally, the net interest margin increased 24 basis points from the prior-year quarter to 3.55%.
Non-interest income was $215 million, up 7.5% from the year-ago level.
Non-interest expenses increased 7.8% year over year to $551 million. The increase was due to a rise in almost all cost components, except for amortization of intangible assets.
The efficiency ratio was 61.92%, up from the year-ago period’s 61.89%. An increase in the efficiency ratio indicates a deterioration in profitability.
FHN’s Loans & Deposits Balances Decrease
Total period-end loans and leases, net of unearned income, were $63.05 billion, which decreased slightly from the end of the previous quarter. Total period-end deposits of $65.52 billion also declined moderately.
FHN’s Credit Quality: Mixed Bag
Non-performing loans and leases of $605 million increased 4.7% from the prior-year period.
As of Sept. 30, 2025, the ratio of total allowance for loans and lease losses to loans and leases was 1.23%, down from 1.32% in the prior-year quarter. The allowance for loan and lease losses of $777 million fell 5.6% from the year-ago period.
First Horizon witnessed net charge-offs of $26 million, which increased 8.3% on a year-over-year basis. Moreover, the company recorded provision benefits of $5 million in the third quarter, against a provision for credit losses of $35 million in the prior-year quarter.
FHN’s Capital Ratios Deteriorate
As of Sept. 30, 2025, the Common Equity Tier 1 ratio was 11%, down from 11.2% reported at the end of the year-ago quarter.
The total capital ratio was 13.8%, down from the year-ago quarter’s 14.2%. The tier 1 leverage ratio was 10.5%, also down from 10.6% in the year-ago quarter.
Our Viewpoint on FHN
First Horizon benefited from higher NII and non-interest income, as well as provision benefits. However, the slight declines in loan and deposit balances pose some concern.
First Horizon Corporation Price, Consensus and EPS Surprise
Image: Bigstock
First Horizon Q3 Earnings Top Estimates on Y/Y NII & Fee Income Growth
Key Takeaways
First Horizon Corporation’s (FHN - Free Report) third-quarter 2025 adjusted earnings per share (excluding notable items) of 51 cents surpassed the Zacks Consensus Estimate of 45 cents. This compares favorably with 42 cents in the year-ago quarter.
Results benefited from a rise in net interest income (NII) and non-interest income, along with provision benefits. However, a decline in loan and deposit balances acted as a headwind.
Net income available to its common shareholders (GAAP basis) was $254 million, up 19.2% year over year.
FHN’s Revenues & Expenses Rise
Total quarterly revenues were $889 million, which rose 7.4% year over year. Also, the top line surpassed the Zacks Consensus Estimate by 5.1%.
NII increased nearly 7.5% year over year to $674 million. Additionally, the net interest margin increased 24 basis points from the prior-year quarter to 3.55%.
Non-interest income was $215 million, up 7.5% from the year-ago level.
Non-interest expenses increased 7.8% year over year to $551 million. The increase was due to a rise in almost all cost components, except for amortization of intangible assets.
The efficiency ratio was 61.92%, up from the year-ago period’s 61.89%. An increase in the efficiency ratio indicates a deterioration in profitability.
FHN’s Loans & Deposits Balances Decrease
Total period-end loans and leases, net of unearned income, were $63.05 billion, which decreased slightly from the end of the previous quarter. Total period-end deposits of $65.52 billion also declined moderately.
FHN’s Credit Quality: Mixed Bag
Non-performing loans and leases of $605 million increased 4.7% from the prior-year period.
As of Sept. 30, 2025, the ratio of total allowance for loans and lease losses to loans and leases was 1.23%, down from 1.32% in the prior-year quarter. The allowance for loan and lease losses of $777 million fell 5.6% from the year-ago period.
First Horizon witnessed net charge-offs of $26 million, which increased 8.3% on a year-over-year basis. Moreover, the company recorded provision benefits of $5 million in the third quarter, against a provision for credit losses of $35 million in the prior-year quarter.
FHN’s Capital Ratios Deteriorate
As of Sept. 30, 2025, the Common Equity Tier 1 ratio was 11%, down from 11.2% reported at the end of the year-ago quarter.
The total capital ratio was 13.8%, down from the year-ago quarter’s 14.2%. The tier 1 leverage ratio was 10.5%, also down from 10.6% in the year-ago quarter.
Our Viewpoint on FHN
First Horizon benefited from higher NII and non-interest income, as well as provision benefits. However, the slight declines in loan and deposit balances pose some concern.
First Horizon Corporation Price, Consensus and EPS Surprise
First Horizon Corporation price-consensus-eps-surprise-chart | First Horizon Corporation Quote
FHN currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Bank Stocks
Fifth Third Bancorp (FITB - Free Report) is scheduled to release third-quarter 2025 earnings on Oct. 17.
The consensus estimate for FITB’s quarterly earnings has been revised downward to 87 cents per share over the past seven days.
Huntington Bancshares Inc. (HBAN - Free Report) is also slated to report third-quarter 2025 results on Oct. 17.
Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 38 cents per share.