First Horizon Corporation

What they do

First Horizon provides commercial and consumer banking services through First Horizon Bank. Its loan portfolio is heavily weighted to commercial loans and leases, which averaged $50.3 billion in Q2 2026, with consumer loans averaging $14.4 billion. The bank also generates noninterest income from brokerage, trust, insurance, and fixed income activities, and manages a $9.2 billion investment securities portfolio.

Revenue drivers

• Commercial loans and leases — Largest asset category, averaging $50.3 billion in Q2 2026, generating $735 million in interest income at a 5.87% yield.
• Consumer loans — Averaged $14.4 billion in Q2 2026, contributing $180 million in interest income at a 4.97% yield.
• Investment securities — Averaged $9.2 billion in Q2 2026, generating $70 million in interest income at a 3.05% yield.
• Noninterest income — Totaled $211 million in Q2 2026, driven by brokerage, trust, insurance, and fixed income operations.

Recent performance

In Q2 2026, First Horizon reported net income available to common shareholders of $260 million, up 12% year-over-year, with diluted EPS of $0.54 versus $0.45 in Q2 2025. Net interest income (FTE) rose $9 million sequentially to $679 million, while net interest margin contracted 3 basis points to 3.49%. Average loans and leases grew $1.5 billion from Q1 2026 to $64.7 billion. Provision for credit losses was $15 million, and net charge-offs were $33 million, or 20 basis points.

Strategy

Management emphasizes disciplined execution, client relationship development, and service quality as key priorities. The company is focused on loan growth, as evidenced by 3% year-over-year loan growth in the first half of 2026. It continues to manage deposit costs, noting higher brokered deposits contributed to a 5 basis point increase in interest-bearing deposit costs. The bank is also adapting to technology-driven changes, including managing fraud and cybersecurity risks as part of its operational strategy.

Risks

• Interest rate and margin compression — Net interest margin declined 3 basis points in Q2 2026 due to higher deposit costs, and further rate changes could pressure earnings.
• Credit quality deterioration — Nonperforming loans and net charge-offs are managed, but any economic downturn could elevate loan losses, especially in commercial and consumer portfolios.
• Cybersecurity and fraud — The company faces increasing operational risks from fraud, including deposit and loan fraud, and cybersecurity threats, which could lead to significant losses.
• Regulatory capital requirements — As a non-advanced approaches firm, First Horizon must maintain minimum capital ratios, and failure to do so could restrict dividends and share repurchases.

Outlook

Management projects continued strength in loan growth and client relationships, with first-half 2026 net income up 16% versus the prior year. The bank expects to manage deposit costs while growing the loan portfolio, and remains focused on operational efficiency and technology adaptation. No specific forward guidance was provided in the latest earnings release.