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First Horizon Shares Gain as Q4 Earnings Beat on Y/Y NII Growth
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Key Takeaways
FHN posted Q4 adjusted EPS of 52 cents, topping estimates and lifting shares 1.6% after the report.
First Horizon's results were driven by 7% y/y NII growth and non-interest income more than doubling.
FHN recorded no Q4 provision for credit losses, though expenses rose and net charge-offs increased.
Shares of First Horizon Corporation (FHN - Free Report) rose 1.6% in yesterday’s trading session after reporting better-than-expected results. The company posted fourth-quarter 2025 adjusted earnings per share of 52 cents surpassed the Zacks Consensus Estimate of 47 cents. This compares favorably with 43 cents in the year-ago quarter.
Results benefited from higher net interest income (NII) and a significant rise in non-interest income, along with the absence of provision for credit losses. However, the rise in expenses remains a headwind.
Results exclude after-tax reduction of 2 cents per share of notable items. After considering this, net income available to its common shareholders (GAAP basis) was $257 million, surging 63% year over year.
For 2025, adjusted earnings per share of $1.89 surpasses the Zacks Consensus Estimate of $1.84 per share. The metric rose 22% from the year-ago period. Net income available to its common shareholders (GAAP basis) was $956 million, up 29% year over year.
FHN’s Revenues & Expenses Rise
Total quarterly revenues were $888 million, which rose 22% year over year. The metric topped the Zacks Consensus Estimate by 2.9%.
For 2025, total revenues were $3.42 billion, which grew 7% year over year. The metric topped the Zacks Consensus Estimate of $3.39 billion.
NII increased 7% year over year to $676 million. Additionally, the net interest margin increased 18 basis points from the prior-year quarter to 3.51%.
Non-interest income was $212 million, more than double from the year-ago level, primarily driven by the absence of securities portfolio restructuring losses recorded in the fourth quarter of 2024.
Non-interest expenses increased 7% year over year to $545 million. The increase was due to higher personnel expenses, occupancy and equipment costs, and outside services, partially offset by lower amortization of intangible assets and other non-interest expenses.
The efficiency ratio was 61.33%, down from 61.98% in the same quarter last year. A decline in the efficiency ratio indicates an improvement in profitability.
FHN’s Loans & Deposits Balances Increase
Total period-end loans and leases, net of unearned income, were $64.16 billion, increasing 3% from the year-ago quarter. Total period-end deposits of $67.47 billion rose 3% year over year.
FHN’s Credit Quality: Mixed Bag
Non-performing loans and leases totaled $604 million, up slightly from the year-ago period.
The ratio of allowance for credit losses to loans and leases was 1.31%, down from 1.43% in the prior-year quarter.
Net charge-offs were $30 million, up from $13 million in the year-ago quarter. Notably, FHN recorded no provision for credit losses in the fourth quarter against a provision of $10 million in the prior-year quarter.
FHN’s Capital Ratios Deteriorate
As of Dec. 31, 2025, the common equity tier 1 ratio was 10.6%, down from 11.2% reported at the end of the year-ago quarter.
The total capital ratio was 13.4%, down from 14.2% in the year-ago quarter. The tier 1 leverage ratio declined to 10.2% from 10.6% a year ago.
Our Viewpoint on FHN
First Horizon benefited from solid revenue growth, higher net interest income, strong year-over-year non-interest income growth and stable credit performance. However, lower capital ratios, rising expenses and net charge-offs remain areas to watch going forward.
First Horizon Corporation Price, Consensus and EPS Surprise
Fifth Third Bancorp (FITB - Free Report) is scheduled to release fourth-quarter 2025 earnings on Jan. 20. The consensus estimate for FITB’s quarterly earnings has been unchanged at $1.01 per share over the past seven days.
Huntington Bancshares Inc. (HBAN - Free Report) is also slated to report fourth-quarter 2025 results on Jan. 22. Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 39 cents per share.
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First Horizon Shares Gain as Q4 Earnings Beat on Y/Y NII Growth
Key Takeaways
Shares of First Horizon Corporation (FHN - Free Report) rose 1.6% in yesterday’s trading session after reporting better-than-expected results. The company posted fourth-quarter 2025 adjusted earnings per share of 52 cents surpassed the Zacks Consensus Estimate of 47 cents. This compares favorably with 43 cents in the year-ago quarter.
Results benefited from higher net interest income (NII) and a significant rise in non-interest income, along with the absence of provision for credit losses. However, the rise in expenses remains a headwind.
Results exclude after-tax reduction of 2 cents per share of notable items. After considering this, net income available to its common shareholders (GAAP basis) was $257 million, surging 63% year over year.
For 2025, adjusted earnings per share of $1.89 surpasses the Zacks Consensus Estimate of $1.84 per share. The metric rose 22% from the year-ago period. Net income available to its common shareholders (GAAP basis) was $956 million, up 29% year over year.
FHN’s Revenues & Expenses Rise
Total quarterly revenues were $888 million, which rose 22% year over year. The metric topped the Zacks Consensus Estimate by 2.9%.
For 2025, total revenues were $3.42 billion, which grew 7% year over year. The metric topped the Zacks Consensus Estimate of $3.39 billion.
NII increased 7% year over year to $676 million. Additionally, the net interest margin increased 18 basis points from the prior-year quarter to 3.51%.
Non-interest income was $212 million, more than double from the year-ago level, primarily driven by the absence of securities portfolio restructuring losses recorded in the fourth quarter of 2024.
Non-interest expenses increased 7% year over year to $545 million. The increase was due to higher personnel expenses, occupancy and equipment costs, and outside services, partially offset by lower amortization of intangible assets and other non-interest expenses.
The efficiency ratio was 61.33%, down from 61.98% in the same quarter last year. A decline in the efficiency ratio indicates an improvement in profitability.
FHN’s Loans & Deposits Balances Increase
Total period-end loans and leases, net of unearned income, were $64.16 billion, increasing 3% from the year-ago quarter. Total period-end deposits of $67.47 billion rose 3% year over year.
FHN’s Credit Quality: Mixed Bag
Non-performing loans and leases totaled $604 million, up slightly from the year-ago period.
The ratio of allowance for credit losses to loans and leases was 1.31%, down from 1.43% in the prior-year quarter.
Net charge-offs were $30 million, up from $13 million in the year-ago quarter. Notably, FHN recorded no provision for credit losses in the fourth quarter against a provision of $10 million in the prior-year quarter.
FHN’s Capital Ratios Deteriorate
As of Dec. 31, 2025, the common equity tier 1 ratio was 10.6%, down from 11.2% reported at the end of the year-ago quarter.
The total capital ratio was 13.4%, down from 14.2% in the year-ago quarter. The tier 1 leverage ratio declined to 10.2% from 10.6% a year ago.
Our Viewpoint on FHN
First Horizon benefited from solid revenue growth, higher net interest income, strong year-over-year non-interest income growth and stable credit performance. However, lower capital ratios, rising expenses and net charge-offs remain areas to watch going forward.
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 fourth-quarter 2025 earnings on Jan. 20. The consensus estimate for FITB’s quarterly earnings has been unchanged at $1.01 per share over the past seven days.
Huntington Bancshares Inc. (HBAN - Free Report) is also slated to report fourth-quarter 2025 results on Jan. 22. Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 39 cents per share.