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First Horizon Q1 Earnings Beat Estimates on Higher NII & Fee Income
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Key Takeaways
FHN beat Q1 estimates with EPS of 53 cents, up from 42 cents a year ago.
First Horizon saw 6% revenue growth, driven by higher NII and rising non-interest income.
FHN faced higher expenses and weaker capital ratios, while credit metrics stayed stable overall.
First Horizon Corporation (FHN - Free Report) posted first-quarter 2026 earnings per share of 53 cents, surpassing the Zacks Consensus Estimate of 49 cents. This compares favorably with 42 cents in the year-ago quarter.
Results benefited from higher net interest income (NII) and a rise in non-interest income, along with improved credit quality. However, the rise in expenses remains a headwind.
Net income available to its common shareholders was $257 million, up 21% year over year.
FHN’s Revenues & Expenses Rise
Total quarterly revenues were $862 million, which increased 6% year over year. The top line missed the Zacks Consensus Estimate of $866 million.
NII increased 6% year over year to $667 million. Additionally, the net interest margin expanded 10 basis points from the prior-year quarter to 3.52%.
Non-interest income was $195 million, rising 7% year over year. Growth was driven by higher service charges and fees, mortgage banking revenues, brokerage, trust and insurance income, and fixed income revenues.
Non-interest expenses increased 4% year over year to $505 million. The rise was mainly due to higher salaries and benefits, occupancy and equipment costs, and outside services expenses.
The efficiency ratio was 58.54%, down from 60.06% in the same quarter last year. A decline in the efficiency ratio indicates improved profitability.
FHN’s Loans & Deposits Balances Increase
Average loans and leases were $63.2 billion, rising 3% year over year.
Average deposits were $66.2 billion, which increased 3% year over year.
FHN’s Credit Quality Improves
Non-performing loans and leases totaled roughly $606 million, slightly lower than the prior-year quarter.
The allowance for credit losses to loans and leases ratio was 1.28%, down from 1.45% in the year-ago quarter.
Net charge-offs were $29 million, relatively stable year over year. Provision for credit losses was $15 million compared with $40 million in the year-ago quarter.
FHN’s Capital Ratios Deteriorate
The common equity tier 1 (CET1) ratio was 10.5%, down from 10.9% in the year-ago quarter.
The total capital ratio was 13.7%, down from 14.1% a year ago. The tier 1 leverage ratio improved slightly to 10.6% from 10.5% in the prior-year quarter.
Notably, the company repurchased $233 million worth of shares during the quarter.
Our Viewpoint on FHN
First Horizon benefited from solid revenue growth, higher net interest income, improving margins and steady fee income growth. However, rising expenses and lower capital ratios remain concerns. Credit metrics were relatively stable but warrant monitoring going forward.
First Horizon Corporation Price, Consensus and EPS Surprise
Fifth Third Bancorp (FITB - Free Report) is scheduled to release first-quarter 2026 earnings on April 17. The consensus estimate for FITB’s quarterly earnings has been revised lower to 84 cents per share over the past seven days.
Huntington Bancshares Inc. (HBAN - Free Report) is slated to report first-quarter 2026 earnings on April 23. Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 36 cents per share.
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First Horizon Q1 Earnings Beat Estimates on Higher NII & Fee Income
Key Takeaways
First Horizon Corporation (FHN - Free Report) posted first-quarter 2026 earnings per share of 53 cents, surpassing the Zacks Consensus Estimate of 49 cents. This compares favorably with 42 cents in the year-ago quarter.
Results benefited from higher net interest income (NII) and a rise in non-interest income, along with improved credit quality. However, the rise in expenses remains a headwind.
Net income available to its common shareholders was $257 million, up 21% year over year.
FHN’s Revenues & Expenses Rise
Total quarterly revenues were $862 million, which increased 6% year over year. The top line missed the Zacks Consensus Estimate of $866 million.
NII increased 6% year over year to $667 million. Additionally, the net interest margin expanded 10 basis points from the prior-year quarter to 3.52%.
Non-interest income was $195 million, rising 7% year over year. Growth was driven by higher service charges and fees, mortgage banking revenues, brokerage, trust and insurance income, and fixed income revenues.
Non-interest expenses increased 4% year over year to $505 million. The rise was mainly due to higher salaries and benefits, occupancy and equipment costs, and outside services expenses.
The efficiency ratio was 58.54%, down from 60.06% in the same quarter last year. A decline in the efficiency ratio indicates improved profitability.
FHN’s Loans & Deposits Balances Increase
Average loans and leases were $63.2 billion, rising 3% year over year.
Average deposits were $66.2 billion, which increased 3% year over year.
FHN’s Credit Quality Improves
Non-performing loans and leases totaled roughly $606 million, slightly lower than the prior-year quarter.
The allowance for credit losses to loans and leases ratio was 1.28%, down from 1.45% in the year-ago quarter.
Net charge-offs were $29 million, relatively stable year over year. Provision for credit losses was $15 million compared with $40 million in the year-ago quarter.
FHN’s Capital Ratios Deteriorate
The common equity tier 1 (CET1) ratio was 10.5%, down from 10.9% in the year-ago quarter.
The total capital ratio was 13.7%, down from 14.1% a year ago. The tier 1 leverage ratio improved slightly to 10.6% from 10.5% in the prior-year quarter.
Notably, the company repurchased $233 million worth of shares during the quarter.
Our Viewpoint on FHN
First Horizon benefited from solid revenue growth, higher net interest income, improving margins and steady fee income growth. However, rising expenses and lower capital ratios remain concerns. Credit metrics were relatively stable but warrant monitoring 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 #3 (Hold). 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 first-quarter 2026 earnings on April 17. The consensus estimate for FITB’s quarterly earnings has been revised lower to 84 cents per share over the past seven days.
Huntington Bancshares Inc. (HBAN - Free Report) is slated to report first-quarter 2026 earnings on April 23. Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 36 cents per share.