First Horizon (FHN) Q4 2025 earnings summary

Executive summary

• Achieved strong financial performance in 2025, with net income available to common shareholders up 29% to $956 million and EPS up 38% to $1.87; adjusted ROTCE reached 15% in Q4 and 14.2% for the year, reflecting progress toward a sustained 15%+ target.

• Pre-provision net revenue and return on tangible common equity reached 15% in the back half of 2025, with adjusted PPNR up 6% to $1.37 billion.

• Returned $894 million in share repurchases and over $300 million in dividends in 2025, deploying over $1.2 billion in excess capital.

• Optimistic outlook for 2026, focusing on profitability, disciplined expense management, and continued capital returns.

• Notable items for 2025 included a $7 million FDIC special assessment credit and Visa derivative valuation expenses.

Financial highlights

• Net interest income for 2025 was $2.6 billion, up 4% year-over-year, with net interest margin at 3.51% in Q4 and 3.47% for the year.

• Total revenue for 2025 grew 7% to $3.42 billion, with fee income up 17% and NII up 4%.

• Noninterest income for 2025 was $797 million, up $118 million, driven by fixed income and mortgage banking revenue.

• Adjusted expenses rose due to higher personnel and outside services costs; efficiency ratio improved to 60.66%.

• Provision for credit losses was $65 million in 2025, down from $150 million in 2024; net charge-offs were $120 million (0.19% of loans), stable year-over-year.

Outlook and guidance

• 2026 guidance targets 3%-7% adjusted revenue growth, mid-single-digit loan growth, and flat adjusted expenses, with net charge-offs expected at 0.15%-0.25%.

• CET1 ratio expected to remain in the 10.5%-10.75% range, with plans to gradually lower to 10%-10.5% as conditions allow.

• Strategic focus on achieving sustained 15%+ adjusted ROTCE through disciplined capital management and efficiency initiatives.

• $1.2 billion share repurchase program authorized, with nearly $1 billion remaining.

• $100 million+ incremental PPNR improvement opportunity targeted for 2026-2027.