Executive Summary

Q1 2025 EPS was $0.41 and adjusted EPS $0.42; EPS rose $0.12 q/q and $0.08 y/y, while adjusted EPS dipped $0.01 q/q and rose $0.07 y/y .
Net interest margin expanded 9 bps to 3.42% on disciplined deposit repricing; interest-bearing deposit cost fell 38 bps q/q to 2.72% .
Provision increased to $40M (from $10M in Q4) as ACL/loans rose to 1.45% on macro uncertainty; NCO ratio rose to 0.19% but remained within guided range .
Management maintained FY2025 guidance (revenue flat–up 4%, expenses up 2–4%, NCOs 0.15–0.25%, tax 21–23%, CET1 10.5–11.0%); repurchased $360M of shares, ending CET1 at 10.9% .
Versus S&P consensus, EPS modestly beat; revenue missed as defined by S&P Global; the broader narrative centers on margin expansion, credit stability, and capital deployment (see Estimates Context). Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

“We delivered solid pre-provision net revenue growth through continued margin expansion and deposit pricing discipline” (CEO) .
Net interest margin up 9 bps to 3.42% on 38 bps reduction in interest-bearing deposit cost, aided by repricing success (retained ~95% of ~$16B promotional deposits while cutting weighted-average rate by 34 bps) .
Shareholder returns: $360M buybacks; TBVPS up $0.32 to $13.17; adjusted efficiency ratio improved to 59.09% .

What Went Wrong

Provision rose to $40M with ACL/loans up 2 bps to 1.45% amid increased macro uncertainty; NCOs rose to $29M (0.19%) vs $13M (0.08%) in Q4 .
Loans declined 1% q/q (seasonal LMC down $101M; CRE paydowns) and average deposits declined $1.6B q/q (brokered CD payoffs), pressuring balances .
Fixed income ADR fell to $586K (down 11% q/q) given March’s extreme rate volatility, though non-ADR product revenues offset .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
EPS (Diluted) ($)	$0.40	$0.29	$0.41
Adjusted EPS ($)	$0.42	$0.43	$0.42
Total Revenue (GAAP) ($MM)	$828	$729	$812
Net Interest Income (GAAP) ($MM)	$627	$630	$631
Net Interest Margin (%)	3.31%	3.33%	3.42%
Noninterest Expense (GAAP) ($MM)	$511	$508	$488
Adjusted Efficiency Ratio (%)	59.86%	61.43%	59.09%
PPNR (GAAP) ($MM)	$316	$220	$325
Provision for Credit Losses ($MM)	$35	$10	$40
NIAC ($MM)	$213	$158	$213
Net Charge-offs ($MM)	$24	$13	$29
NCO Ratio (%)	0.15%	0.08%	0.19%
CET1 Ratio (%)	13.9% total capital; CET1 11.2%	CET1 11.2%	CET1 10.9%

Segment results (Q1 2025):

Segment	Total Revenue ($MM)	Noninterest Expense ($MM)	Net Income ($MM)
Commercial, Consumer & Wealth	$734	$343	$269
Wholesale	$109	$77	$22
Corporate	($30)	$68	($69)

Key operating KPIs (Q1 2025):

KPI	Q3 2024	Q4 2024	Q1 2025
Average Loans ($B)	$62.4	$62.4	$61.6
Average Deposits ($B)	$66.3	$66.1	$64.5
Interest-bearing Deposit Cost (%)	2.61%	2.34%	2.72%
Total Funding Cost (%)	2.75%	2.47%	2.23%
NPLs ($MM)	$578	$602	$609
NPL Ratio (%)	0.92%	0.96%	0.98%
ACL/Loans (%)	1.44%	1.43%	1.45%
TBVPS ($)	$13.02	$12.85	$13.17
Loan-to-Deposit Ratio (Period-end, %)	94.0%	95.4%	96.9%
Fixed Income ADR ($000s)	$593	$659	$586
Diluted Shares (MM)	538	534	523
Cash Dividend per Share ($)	$0.15	$0.15	$0.15

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted Revenue (ex deferred comp)	FY2025	Flat–Up 4%	Flat–Up 4%	Maintained
Adjusted Expense (ex deferred comp)	FY2025	Up 2–4%	Up 2–4%	Maintained
Net Charge-offs	FY2025	0.15–0.25%	0.15–0.25%	Maintained
Tax Rate	FY2025	21–23%	21–23%	Maintained
CET1 Ratio Target	Near-term FY2025	~11%	10.5–11.0%	Maintained

Dividend declaration (Q1 window): Board declared $0.15/common per share payable July 1, 2025 (announced Apr 29, 2025) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 & Q4)	Current Period (Q1 2025)	Trend
Deposit pricing discipline	Q4: 34 bps decline avg rate; 95% retention on ~$18B promo; spot 2.80% ; Q3: promo repricing plan; spot improvement	38 bps decline in interest-bearing cost; retained ~95% of ~$16B promos; spot ~2.70%	Continued improvement
Net interest margin	Q4: NIM +2 bps to 3.33% ; Q3: NIM 3.31%	NIM 3.42% (+9 bps)	Expanding
Tariffs/macro uncertainty	Not a major Q3/Q4 theme; focus on rate cuts	CEO: tariff-related uncertainty; aiming to avoid recession; cautious optimism	New headwind
Mortgage warehouse	Q4: share gains; balances seasonality but strong pipeline	Seasonality in Jan/Feb; pickup in March; countercyclical hedge for falling rates	Seasonal uptick expected
Fixed income ADR/volatility	Q4: ADR $659K; favorable curve helped	ADR $586K; extreme volatility limited ADR, offset by other products	Mixed; volatile
Credit quality	Q4: NCO 0.08%; ACL 1.43%; NPL slight uptick	NCO 0.19%; ACL 1.45%; NPL 0.98%—still within range	Normalizing
Capital & buybacks	Q4: CET1 11.2%; $163M buybacks	CET1 10.9%; $360M buybacks; near-term 11% target	Active
Technology investments	Q4: GL and treasury conversions completed; run-the-bank spend	Outside services down on completed projects; focus shifting to client-facing	Transitioning

Management Commentary

CEO: “We delivered solid pre-provision net revenue growth through continued margin expansion and deposit pricing discipline while consistently prioritizing our credit quality.”
CFO: “Our net interest margin expansion to 3.42% was driven by a 27 bps decline in average total deposit costs, which more than offset a 20 bps reduction in average loan yield.”
CEO on capital: “We intend to target 11% CET1…at some point…we’ll bring that target down probably closer to the 10.5% area…we will continue to use [excess capital] to repurchase shares.”
CCO on reserves: “We increased reserves by 2 bps…prudent move…our ACL [covers] over 9x our average annualized charge-offs…among the strongest in our peer set.”
CFO on guidance: “Our 2025 guidance remains unchanged…focused on delivering PPNR growth while prioritizing safety and soundness.”

Q&A Highlights

PPNR outlook and rate scenarios: Management ran multiple scenarios; more than three cuts would pressure NII but be offset by fixed income and mortgage businesses .
CET1 and buybacks: Near-term CET1 ~11%; appetite to continue buybacks if organic growth deployment is limited .
C&I activity: Borrowers adopting “wait-and-see” amid tariffs; pipelines remain “reasonably strong” with optimism .
Reserves/CECL weighting: Increased downside scenario weighting in Moody’s models; unemployment baseline up to ~5% in scenarios .
Deposits: Q2 expected to be strong for deposit growth; new-to-bank checking offer; shorter 45-day promos to enable repricing .
Hedging: Balance sheet benefits from natural countercyclicals; ALCO evaluates ±300–400 bps shocks .

Estimates Context

Metric	S&P Consensus	Actual (S&P)	Surprise
Primary EPS ($)	0.399*	0.42*	+$0.02*
Revenue ($MM)	821.9*	772.0*	-$49.9*

Values retrieved from S&P Global.
Note: Company-reported total revenue was $812M (FTE $816M), reflecting smaller miss vs S&P consensus; differences arise from definition/aggregation used in S&P datasets .

Implications: Consensus likely to reflect continued NIM support from deposit cost reductions, stabilized deposit competition, and credit normalization; noninterest income remains sensitive to market volatility (ADR) .

Key Takeaways for Investors

Margin tailwind: 9 bps NIM expansion with 38 bps deposit cost decline indicates further ability to defend spread even without near-term rate cuts .
Credit remains controlled: NCOs at 0.19% and ACL/loans at 1.45% within guided range; reserve build prudent amid macro uncertainty .
Capital deployment: $360M buybacks and CET1 10.9% suggest continued capital return while targeting 10.5–11.0% CET1 through the year .
Countercyclical buffers: Mortgage warehouse and fixed income businesses provide offsets if rates decline; watch ADR and mortgage volume trends through Q2–Q3 .
Balance trends: Loans modestly down on CRE paydowns and LMC seasonality; deposits expected to grow in Q2 with campaigns and shorter promos aiding repricing .
Guidance intact: FY2025 revenue and expense ranges maintained; execution on deposit growth and expense discipline remains core to PPNR trajectory .
Strategic update: LPL partnership to transition First Horizon Advisors’ broker-dealer/advisory support (110 FAs; ~$16B client assets) in 2H25—potential long-term platform enhancement .

Additional Q1 2025 Press Releases

Dividend declaration: $0.15 per common share, payable July 1, 2025 .
LPL Financial strategic relationship: Transition support of First Horizon Advisors’ broker-dealer/advisory to LPL’s Institution Services in 2H25, subject to approvals .

Prior Two Quarters (for trend)

Q4 2024: EPS $0.29; adjusted EPS $0.43; NIM 3.33%; ADR $659K; NCO 0.08%; CET1 11.2% .
Q3 2024: EPS $0.40; adjusted EPS $0.42; NIM 3.31%; ADR $593K; NCO 0.15%; CET1 11.2% .

Overall, Q1 2025 shows strengthening margin, steady credit within range, continued capital returns, and maintained guidance, with revenue sensitives to market-driven fee lines and seasonal loan dynamics.

FIRST HORIZON CORP (FHN)·Q1 2025 Earnings Summary