On October 16, 2024, First Horizon Corp (FHN, Financial) released its 8-K filing for the third quarter of 2024, showcasing a notable performance that exceeded analyst expectations. The company reported a net income available to common shareholders of $213 million, translating to earnings per share (EPS) of $0.40, surpassing the estimated EPS of $0.38. Revenue for the quarter reached $828 million, slightly above the forecasted $822.81 million.
First Horizon Corp is the parent company of First Tennessee Bank, a prominent regional bank with about 200 branches around Tennessee. The regional bank is responsible for roughly 65% of its revenue, while capital markets make a 25% contribution. The remainder is split between the firm's non-strategic (wind-down) and corporate operations. First Horizon concentrates on offering a variety of banking products mainly in its home state, where it has the second-largest deposit franchise with a 13% deposit market share.
Performance and Challenges
First Horizon Corp's third-quarter results reflect a robust performance, driven by strong contributions from its counter-cyclical businesses. The company achieved an 18% growth in earnings per share compared to the prior quarter, highlighting the strength of its diversified business model. However, the company faces challenges such as increased deposit costs and higher levels of brokered deposits, which have impacted net interest income.
Financial Achievements
The company's financial achievements are significant, particularly in the banking industry, where maintaining stable credit quality and managing costs are crucial. First Horizon reported a return on average tangible common equity (ROTCE) of 12.6% and an adjusted ROTCE of 13.2%, with a tangible book value per share of $13.02, up $0.81 from the previous quarter. These metrics underscore the company's ability to generate shareholder value and maintain financial stability.
Key Financial Metrics
First Horizon's income statement reveals a total revenue of $828 million, a 2% increase from the previous quarter. Net interest income slightly decreased to $627 million, while noninterest income rose by 8% to $200 million. The company's efficiency ratio stood at 61.89%, indicating effective cost management. The balance sheet showed average loans of $62.4 billion and average deposits of $66.3 billion, reflecting a stable financial position.
“We delivered 18% growth in earnings per share compared to the prior quarter, driven by strong performance from our counter-cyclical businesses. Our results reflect the strength of our diversified business model and our continued focus on growing and deepening client relationships,” said Chairman, President and Chief Executive Officer Bryan Jordan.
Analysis and Outlook
First Horizon Corp's performance in the third quarter of 2024 demonstrates its resilience and adaptability in a challenging economic environment. The company's ability to exceed analyst estimates and maintain strong financial metrics positions it well for future growth. However, the ongoing challenges related to deposit costs and market conditions will require careful management to sustain this momentum.
Overall, First Horizon Corp's third-quarter results highlight its strong operational performance and strategic focus, making it an attractive consideration for value investors seeking stability and growth in the banking sector.
Explore the complete 8-K earnings release (here) from First Horizon Corp for further details.
