First Horizon Q2 Earnings Top Estimates as NII Rises, Expenses Decline

First Horizon Corporation’s FHN second-quarter 2025 adjusted earnings per share (excluding notable items) of 45 cents surpassed the Zacks Consensus Estimate of 41 cents. This compares favorably with 36 cents in the year-ago quarter.

Results benefited from a rise in net interest income (NII) and non-interest income, along with a decline in expenses. Also, lower provisions and a rise in loans and deposit balances were other positives. 

Net income available to its common shareholders (GAAP basis) was $233 million, up 27% year over year.

FHN’s Revenues Rise, Expenses Decline

Total quarterly revenues were $830 million, which rose 1.8% year over year. Also, the top line missed the Zacks Consensus Estimate by 0.9%.

NII increased nearly 2% year over year to $641 million. Additionally, the net interest margin increased 2 basis points from the prior-year quarter to 3.40%.

Non-interest income was $189 million, up 1.6% from the year-ago level.

Non-interest expenses decreased 1.8% year over year to $491 million. The fall was due to a decline in almost all cost components, except for occupancy and equipment costs, and salary and benefits.

The efficiency ratio was 59.20%, down from the year-ago period’s 61.44%. A fall in the efficiency ratio indicates a rise in profitability.

FHN’s Loans & Deposits Balances Increase

Total period-end loans and leases, net of unearned income, were $63.3 billion, which increased 1.7% from the end of the previous quarter. Total period-end deposits of $65.6 billion rose 2.1%.

FHN’s Credit Quality: Mixed Bag

Non-performing loans and leases of $593 million increased 3.3% from the prior-year period.

As of June 30, 2025, the ratio of total allowance for loans and lease losses to loans and leases was 1.29%, down from 1.31% in the prior-year quarter. The allowance for loan and lease losses of $814 million fell 0.8% from the year-ago period.

First Horizon witnessed net charge-offs of $34 million, which remained relatively flat on a year-over-year basis. Moreover, the provision for credit losses was $30 million, which plunged 45% from the year-earlier quarter.

FHN’s Capital Ratios Stable

As of June 30, 2025, the Common Equity Tier 1 ratio of 11% was stable compared with the year-ago quarter.

The total capital ratio was 14%, the same as the year-ago quarter level. The tier 1 leverage ratio was 10.6%, stable compared with the year-ago quarter level.

Our Viewpoint on FHN

First Horizon benefited from an increase in NII and reduced expenses. Also, a rise in loan and deposit balances is encouraging.

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 is scheduled to release second-quarter 2025 earnings on July 17. 

The consensus estimate for FITB’s quarterly earnings has been unchanged at 87 cents per share over the past seven days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Huntington Bancshares Inc. HBAN is slated to report second-quarter 2025 results on July 18.
 
Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been revised 8.6% upward to 38 cents per share.

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This article originally published on Zacks Investment Research (zacks.com).

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