First Horizon (FHN) Financials

First Horizon’s financial statements show a banking business that has strengthened its earnings and loan base since 2022, although results remain sensitive to funding costs, deposit trends and balance-sheet liquidity. The latest data covers the quarter ended June 30, 2026.

• Earnings have improved. Consolidated net income increased to $274 million in Q2 2026 from $204 million in Q2 2024 and $245 million in Q2 2025. Reported diluted EPS was $0.54 in Q2 2026, compared with $0.34 in Q2 2024 and $0.45 in Q2 2025.
• Net interest income has remained resilient. Net interest income was $676 million in Q2 2026, up from $629 million in Q2 2024 and $641 million in Q2 2025. This suggests First Horizon has maintained its core banking spread despite elevated funding costs.
• The loan portfolio has expanded. Loans and leases increased to $65.3 billion at June 30, 2026, from $62.8 billion two years earlier and $61.8 billion at September 30, 2022. Continued loan growth can support future interest income if credit quality remains stable.
• Credit-loss provisions have declined substantially. The provision for credit losses fell to $15 million in Q2 2026 from $30 million in Q2 2025 and $55 million in Q2 2024. The lower provision contributed directly to the improvement in pretax income, although investors should confirm that the decline reflects stable credit performance rather than overly optimistic provisioning.
• Operating cash flow rebounded sharply. Net cash from operating activities rose to $585 million in Q2 2026 from $83 million in Q2 2025 and negative $150 million in Q2 2024. The latest result was helped by a $726 million favorable change in operating assets and liabilities.
• Capital returns remain meaningful. First Horizon repurchased $121 million of common stock and paid $95 million in dividends during Q2 2026. These distributions may support per-share value and shareholder income, provided capital levels remain comfortably above regulatory requirements.
• Common equity and retained earnings have grown over the longer term. Total common equity was $8.5 billion at June 30, 2026, up from $7.0 billion at September 30, 2022. Retained earnings also increased to $5.4 billion from $3.3 billion over the same period.
• Deposits have recovered from 2023 lows but the mix has changed. Total deposits reached approximately $68.1 billion in Q2 2026, compared with $65.4 billion in Q2 2024 and $65.0 billion in Q3 2022. However, non-interest-bearing deposits declined to $16.0 billion from $25.8 billion in Q3 2022, while interest-bearing deposits increased to $52.1 billion, potentially raising funding costs.
• Liquidity and securities activity remain significant. First Horizon held $1.0 billion of cash, $594 million of federal funds sold and $1.2 billion of interest-bearing deposits at other banks at the end of Q2 2026. The bank also recorded a $753 million investing cash outflow, primarily from purchasing $996 million of investment securities.
• Non-interest expenses are rising faster than revenue recently. Q2 2026 non-interest expense increased to $532 million from $491 million in Q2 2025, while total revenue rose from $830 million to $887 million. Salaries and employee benefits increased 5.3% year over year, and occupancy and equipment expense rose 7.4%, which could limit operating leverage.
• Funding costs remain elevated. Interest expense was $354 million in Q2 2026, including $296 million of deposit interest expense. Although total interest expense declined from $403 million in Q2 2024, it increased from $337 million in Q1 2026, highlighting the ongoing sensitivity of earnings to deposit pricing and interest rates.
• Debt reliance is higher than in 2022. Short-term debt stood at $3.0 billion at June 30, 2026, more than double the $1.4 billion reported at September 30, 2022. While short-term debt has declined from the $6.9 billion recorded in Q2 2023, reliance on wholesale funding can increase liquidity and refinancing risk.
• Accumulated other comprehensive losses remain a drag on reported equity. Accumulated other comprehensive income was negative $846 million in Q2 2026. Although this is an improvement from the negative $1.6 billion recorded in Q3 2023, unrealized losses can continue to pressure tangible capital and book-value metrics.
• The supplied Q2 2026 income statement contains a material inconsistency. It reports consolidated net income of $274 million, but also lists $520 million of net income attributable to common shareholders, which does not reconcile after preferred dividends and noncontrolling interest. Investors should rely on the company’s filed statements or later restatements before using the common-income figure for valuation.

Overall, First Horizon’s recent trend is generally constructive: loan balances, operating cash flow and consolidated earnings have improved, while credit-loss provisions have fallen. The main risks are rising operating costs, a more expensive deposit mix, increased short-term debt and the need to verify the latest common-shareholder income data.