First Horizon Corp. (FHN) Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. First Horizon Corporation (FHN) is a financial holding company headquartered in Memphis, Tennessee, with its principal subsidiary being First Horizon Bank. The company operates through three segments: Commercial, Consumer & Wealth; Wholesale; and Corporate. As of March 31, 2026, FHN had over 450 business locations in 23 states and approximately 7,400 associates.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Income (Attributable to Common) | $257 million | $213 million |
| Diluted EPS | $0.53 | $0.41 |
| Total Revenue | $862 million | $812 million |
| Net Interest Income | $667 million | $631 million |
| Noninterest Income | $195 million | $181 million |
| Noninterest Expense | $505 million | $487 million |
| Provision for Credit Losses | $15 million | $40 million |
| Net Charge-offs (Annualized) | 18 bps | 19 bps |
| Net Interest Margin (NIM) | 3.52% | 3.42% |
| Efficiency Ratio | 58.54% | 60.06% |
| Total Assets | $84.1 billion | $81.5 billion |
| Total Loans and Leases | $64.4 billion | $62.2 billion |
| Total Deposits | $66.5 billion | $67.5 billion |
| Common Equity Tier 1 (CET1) Ratio | 10.53% | 10.93% |
| Tangible Common Equity to Tangible Assets | 8.27% | 8.37% |
Material Changes vs. Prior Period
- Profitability: Net income available to common shareholders increased 21% year-over-year, driven by a $36 million increase in net interest income and a $25 million reduction in the provision for credit losses.
- Net Interest Income: NII rose due to a 44 basis point decrease in interest-bearing deposit costs, partially offset by a 21 basis point decline in loan yields. NIM expanded to 3.52%.
- Asset Quality: The provision for credit losses dropped significantly to $15 million from $40 million in Q1 2025. Net charge-offs remained stable at 18 basis points. The Allowance for Loan and Lease Losses (ALLL) to total loans ratio decreased to 1.13%.
- Balance Sheet: Total loans increased $221 million quarter-over-quarter, led by Commercial & Industrial (C&I) growth. Total deposits declined $994 million, primarily due to a decrease in interest-bearing deposits.
- Capital Actions: FHN issued $400 million of Series H Preferred Stock in March 2026, boosting Tier 1 capital. The company also repurchased $235 million of common stock during the quarter.
Guidance, Outlook, and Risks
Management Commentary: Management highlighted improved grade migration and lower CRE and consumer loan balances as drivers for the reduced provision for credit losses. The Commercial, Consumer & Wealth segment saw a $32 million increase in pre-tax income, while the Wholesale segment increased pre-tax income by $3 million.
Subsequent Events: On May 1, 2026, FHN redeemed all outstanding shares of its Series C Preferred Stock ($59 million carrying value). The Series C Depositary Shares were suspended from trading on the NYSE on May 1, 2026.
Risks and Contingencies:
- Interest Rate Risk: FHN remains sensitive to Federal Reserve policy and yield curve movements. A flattening yield curve could compress net interest margins.
- Regulatory Environment: The company is evaluating the impact of the revised Basel III Endgame proposal issued in March 2026. Additionally, uncertainty remains regarding the implementation of SEC climate disclosure rules and California GHG reporting regimes.
- Market Conditions: Risks include potential economic recession, volatility in commercial real estate markets, and the impact of tariffs and trade policy changes on economic growth.
- Legal Proceedings: FHN faces various litigation matters, though management believes established liabilities ($1 million) and reasonably possible losses (zero to less than $1 million) should not have a material adverse effect on financial condition.
Investor Verification Checklist
- Preferred Stock Redemption: Verify the impact of the Series C Preferred Stock redemption on Tier 1 capital ratios in the subsequent quarter.
- Deposit Trends: Monitor the stability of interest-bearing deposits, which declined $1.1 billion quarter-over-quarter, and the cost of funds.
- Commercial Real Estate (CRE) Exposure: Review the $13.4 billion CRE portfolio, specifically the hospitality and office sectors, for potential credit deterioration given the 1.81% nonperforming loan ratio in this segment.
- Share Repurchase Program: Track the remaining capacity under the $1.2 billion common stock purchase program authorized in October 2025 ($764.7 million remaining as of March 31, 2026).
- Regulatory Capital: Confirm that CET1 and Tier 1 ratios remain above the "well-capitalized" thresholds plus the capital conservation buffer following the Series H issuance and subsequent loan growth.