First Horizon (NYSE:FHN) Issues Quarterly Earnings Results, Beats Estimates By $0.01 EPS

First Horizon (NYSE:FHN) issued its quarterly earnings results on Thursday. The financial services provider reported $0.53 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.52 by $0.01, FiscalAI reports. The firm had revenue of $883.00 million for the quarter, compared to analyst estimates of $889.18 million. First Horizon had a return on equity of 12.24% and a net margin of 14.35%. During the same period in the previous year, the company posted $0.51 earnings per share.

Here are the key takeaways from First Horizon’s conference call:

• Strategic mortgage portfolio sale — First Horizon plans to sell approximately $4.5 billion of low-yielding, largely non-relationship mortgage loans, reducing its loan-to-deposit ratio to about 88% and improving balance-sheet flexibility.
• Management expects the transaction to provide approximately 4% EPS accretion and 150 basis points of ROTCE improvement in 2027, with additional upside from redeploying proceeds into higher-yielding commercial loans.
• Core client deposits grew by more than $1 billion during the quarter, while management expects net interest margin to improve from 3.48% into the 350-basis-point range; share repurchases are expected to resume in the fourth quarter.
• Third-quarter adjusted EPS was $0.53, pressured by lower fee income, higher expenses, and provision costs; revenue expectations were reduced due to weaker mortgage warehouse activity and an unusually strong fixed-income result in the prior-year fourth quarter.
• Credit metrics were mixed but broadly stable: nonperforming loans remained at 81 basis points, net charge-offs rose to 22 basis points, and the allowance for credit losses increased slightly to 1.25% of loans.

First Horizon Price Performance

FHN traded up $0.04 during midday trading on Friday, reaching $22.91. 8,429,464 shares of the company’s stock were exchanged, compared to its average volume of 6,575,271. The firm has a market capitalization of $10.85 billion, a price-to-earnings ratio of 16.48, a price-to-earnings-growth ratio of 0.98 and a beta of 0.61. The company has a quick ratio of 0.96, a current ratio of 0.97 and a debt-to-equity ratio of 0.16. First Horizon has a one year low of $20.00 and a one year high of $26.56. The business has a 50-day simple moving average of $24.15 and a two-hundred day simple moving average of $24.51.

First Horizon Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Thursday, October 1st. Investors of record on Friday, September 11th were given a $0.17 dividend. This represents a $0.68 annualized dividend and a yield of 3.0%. The ex-dividend date of this dividend was Friday, September 11th. First Horizon’s dividend payout ratio is 32.54%.

First Horizon News Summary

Here are the key news stories impacting First Horizon this week:

• Positive Sentiment: First Horizon reported third-quarter adjusted earnings of $0.53 per share, slightly above the $0.52 analyst consensus and up from $0.51 a year earlier. The result indicates underlying earnings remained relatively resilient despite significant balance-sheet repositioning. First Horizon Third-Quarter Results
• Positive Sentiment: Management is selling approximately $4.5 billion of consumer mortgages and making strategic balance-sheet changes intended to improve future earnings quality, capital efficiency and growth. Investors may view the move as a way to reduce lower-return assets, although execution and the eventual payoff remain important. First Horizon Mortgage Portfolio Sale
• Neutral Sentiment: Reported revenue of $883 million fell short of the $889.18 million consensus. The mortgage transaction drove a $94 million net loss, or $0.20 per share, creating a sharp contrast between the adjusted EPS beat and the weaker GAAP headline result. First Horizon Q3 Revenue and Net Loss
• Negative Sentiment: JPMorgan lowered its price target for FHN from $27 to $26 and maintained a neutral rating. Although the revised target still implies potential upside, the reduction signals limited near-term conviction following the mixed quarter and portfolio restructuring. JPMorgan First Horizon Price Target

Insiders Place Their Bets

In other First Horizon news, EVP Elizabeth Ardoin sold 18,313 shares of First Horizon stock in a transaction that occurred on Thursday, August 20th. The stock was sold at an average price of $24.85, for a total transaction of $455,078.05. Following the sale, the executive vice president directly owned 340,368 shares of the company’s stock, valued at approximately $8,458,144.80. The trade was a 5.11% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Insiders own 0.91% of the company’s stock.

Wall Street Analyst Weigh In

Several brokerages have recently weighed in on FHN. National Bank Financial set a $30.00 price objective on First Horizon in a report on Tuesday, September 8th. Weiss Ratings restated a “buy (b)” rating on shares of First Horizon in a research report on Friday, September 4th. JPMorgan Chase & Co. cut their target price on First Horizon from $27.00 to $26.00 and set a “neutral” rating for the company in a research note on Friday. Wall Street Zen lowered First Horizon from a “hold” rating to a “sell” rating in a research note on Sunday, October 11th. Finally, Citigroup reduced their target price on First Horizon from $28.50 to $28.00 and set a “buy” rating for the company in a research report on Tuesday, September 22nd. Eight research analysts have rated the stock with a Buy rating, twelve have issued a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat, the stock presently has a consensus rating of “Hold” and an average price target of $27.02.

About First Horizon

First Horizon Corporation (NYSE:FHN) is a financial services company headquartered in Memphis, Tennessee. Through its banking subsidiary, First Horizon Bank, the company provides a range of financial products and services to consumers, businesses, and institutions.

Its main activities include consumer and commercial banking, lending, deposit accounts, treasury and cash-management services, mortgage banking, and investment and wealth-management services. First Horizon also offers capital-markets and investment-banking services through its specialized businesses, serving clients across various industries and market segments.

The company traces its roots to First Tennessee Bank, which was founded in Memphis in 1864.