First Horizon Corp (FHN) Reports Q3 2023 Earnings: Net Income Drops to $129 Million
First Horizon Corp (NYSE:FHN) reports Q3 2023 net income available to common shareholders of $129 million, or $0.23 per share, down from $317 million, or $0.56 per share, in Q2 2023.
Period-end deposits increased by $1.6 billion QoQ, or 2%, up 6% year-to-date.
Period-end loans increased by $0.5 billion QoQ, or 1%, up 6% year-to-date.
Return on tangible common equity (ROTCE) of 8.0% and adjusted ROTCE of 9.2%.
First Horizon Corp (NYSE:FHN) released its Q3 2023 earnings report on October 18, 2023. The company reported a net income available to common shareholders of $129 million, or $0.23 per share, a decrease from the second quarter 2023 net income of $317 million, or $0.56 per share. Despite the decrease in net income, the company demonstrated resilience with increased deposits and loans.
Financial Highlights
First Horizon Corp (NYSE:FHN) reported total revenue of $778 million, a decrease of $253 million from the previous quarter. This decrease was primarily due to a decline in noninterest income, which dropped to $173 million from $400 million in Q2 2023. The company's net interest income also decreased by $26 million to $605 million. Despite these decreases, the company's period-end deposits increased by $1.6 billion, or 2%, and period-end loans increased by $0.5 billion, or 1%, both up 6% year-to-date.
Company Performance and Future Outlook
First Horizon Corp (NYSE:FHN) reported a return on average common equity (ROCE) of 6.3%, a return on tangible common equity (ROTCE) of 8.0%, and an adjusted ROTCE of 9.2%. The company's common equity tier 1 ratio stood at 11.1%. Despite the decrease in net income, the company's CEO, Bryan Jordan, expressed confidence in the company's resilience and its ability to generate strong shareholder returns over the long term.
Notable Items and Asset Quality
The company's third-quarter results were impacted by notable items, including a net $20 million after-tax, or $0.04 per share, compared with a benefit of $98 million, or $0.17 per share, in the second quarter of 2023. The company's provision expense of $110 million increased by $60 million, largely driven by a credit loss on a single relationship and loan growth. Despite this, the company's allowance for credit losses to loans ratio increased slightly to 1.36% as of September 30, 2023.
Summary
Despite a decrease in net income, First Horizon Corp (NYSE:FHN) demonstrated resilience in Q3 2023 with increased deposits and loans. The company remains confident in its ability to generate strong shareholder returns over the long term.
This article first appeared on GuruFocus.
