First Horizon Corporation Reports Full Year 2023 Net Income Available to Common Shareholders of $865 Million or EPS of $1.54; $806 Million or $1.43 on an Adjusted Basis*

Rhea-AI Summary

First Horizon Corporation (FHN) reported a 4% increase in period end deposits and a 5% growth in period end loans in 2023. The net income available to common shareholders for the fourth quarter of 2023 was $175 million, or $0.31 per share, and $178 million, or $0.32 per share on an adjusted basis. The return on tangible common equity (ROTCE) for 4Q23 was 10.9%, and the adjusted ROTCE was 11.1%. The tangible book value per share was $12.13, up 8% quarter over quarter. The full-year 2023 net income available to common shareholders was $865 million, or $1.54 per share, compared to $868 million, or $1.53 per share in 2022. The company reported strong results and demonstrated the ability to execute strategic priorities amidst economic headwinds. First Horizon remains focused on credit discipline and expects to continue performing well over the cycle.

Positive

• 4% increase in period end deposits and a 5% growth in period end loans in 2023
• Strong full-year 2023 results with net income available to common shareholders of $865 million
• Return on tangible common equity (ROTCE) for 4Q23 was 10.9%, and the adjusted ROTCE was 11.1%
• Tangible book value per share was $12.13, up 8% quarter over quarter
• Successful execution of strategic priorities and prudent risk management

Negative

• None.

Insights

Financial Analyst

The reported increase in period-end deposits and loans indicates a positive trajectory for First Horizon Corporation's liquidity and asset growth. A 4% rise in deposits and 5% growth in loans suggest a solid expansion in the bank's core business activities. Deposits are a critical source of funds for banks to lend and loan growth is a direct indicator of earning asset expansion, which can lead to increased interest income.

Moreover, the reported net income and earnings per share (EPS) for both the fourth quarter and the full year provide insight into the bank's profitability. The net income available to common shareholders (NIAC) and the adjusted basis figures, which exclude the impact of notable items, give a clearer view of the bank's operating performance. The tangible book value per share, up 8% quarter over quarter, reflects a strengthening of the bank's balance sheet, which is an important metric for investors assessing the value and stability of a financial institution.

First Horizon's Return on Tangible Common Equity (ROTCE) is a measure of profitability that shows how well the company is generating profits from its tangible common equity. A ROTCE of 10.9% and an adjusted ROTCE of 11.1% are indicative of a strong return on equity, which is a key performance metric for banks. It is essential to compare these figures with industry averages and peer performance to assess First Horizon's relative standing.

Market Research Analyst

The banking industry is highly sensitive to economic conditions and First Horizon's ability to grow its loan and deposit base in a challenging economic environment is noteworthy. The successful deposit campaign that raised $6 billion in new-to-bank deposits reflects effective market strategy and execution. This is a significant achievement, as deposit growth can be challenging in competitive and low-interest-rate environments.

First Horizon's diversified business model and regional footprint are strategic advantages that can contribute to its resilience and growth potential. The reference to 'attractive footprint' suggests a strategic positioning in markets that may offer growth opportunities. Understanding the geographic and demographic trends of the regions First Horizon serves could provide further insights into potential market expansion and customer acquisition strategies.

It is also important to monitor the bank's credit discipline, as mentioned by the CEO. Credit quality is a critical factor for banks and maintaining strict credit standards can help mitigate the risk of loan defaults, particularly during economic downturns.

Economist

The financial performance of First Horizon, including the growth in loans and deposits, must be contextualized within the broader economic landscape. Loan growth can be indicative of economic expansion and consumer confidence, while deposit growth reflects consumer saving behavior. However, the economic 'headwinds' alluded to by First Horizon's CEO may include factors such as interest rate fluctuations, regulatory changes, or macroeconomic uncertainties.

Understanding the interplay between the bank's performance and the economic environment can help stakeholders gauge the sustainability of the reported growth. For instance, if the loan growth is primarily in sectors that are sensitive to economic cycles, there could be potential risks in the event of an economic downturn. Conversely, a strong deposit base can provide a buffer against market volatility, offering stability to the bank's operations.

It is also important to consider the potential impact of inflation on the bank's interest margins and the cost of funds. Inflationary pressures can lead to higher interest rates, which can affect borrowing costs and consumer demand for loans, as well as the interest paid on deposits.

Period End Deposits Increased $2 Billion or 4% and Period End Loans Grew $3 Billion or 5% in 2023

Fourth Quarter 2023 Net Income Available to Common Shareholders of $175 Million or EPS of $0.31; $178 Million or $0.32 on an Adjusted Basis*

4Q23 ROTCE of 10.9% and Adjusted ROTCE of 11.1% with Tangible Book Value per Share of $12.13, up 8% QoQ*

MEMPHIS, Tenn., Jan. 18, 2024 /PRNewswire/ -- First Horizon Corporation (NYSE: FHN or "First Horizon") today reported full year 2023 net income available to common shareholders ("NIAC") of $865 million or earnings per share of $1.54, compared with full year 2022 NIAC of $868 million or earnings per share of $1.53. 2023 results benefited from a net $59 million after-tax or $0.11 per share of notable items compared with a net reduction of $82 million or $0.15 per share in 2022.

"We reported strong fourth quarter and full-year 2023 results demonstrating our ability to successfully execute on our strategic priorities and navigate the economic headwinds during the year. Prudent risk management, strong liquidity, and robust capital levels supported loan growth of 5% during the year. We ran a successful deposit campaign mid-year, raising $6 billion of new-to-bank deposits," said Chairman, President and Chief Executive Officer Bryan Jordan. "We remain intently focused on credit discipline and expect to continue to perform well over the cycle." 

"I am exceptionally proud of the resilience of our team, their unwavering dedication to our clients and the many accomplishments achieved during the year. As we enter 2024 and celebrate 160 years in business, we are well-positioned to capitalize on our exceptional client relationships, diversified business model, and attractive footprint," continued Jordan.

Conference Call Information

Analysts, investors and interested parties may call toll-free starting at 8:15 a.m. CT on January 18, 2024 by dialing 1-833-470-1428 (if calling from the U.S.) or 404-975-4839 (if calling from outside the U.S) and entering access code 172464. The conference call will begin at 8:30 a.m. CT.

Participants can also opt to listen to the live audio webcast at https://ir.firsthorizon.com/events-and-presentations/default.aspx.

A replay of the call will be available beginning at noon CT on January 18 until midnight CT on February 1, 2024. To listen to the replay, dial 1-866-813-9403 (U.S. callers); the access code is 404538. A replay of the webcast will also be available on our website on January 18 and will be archived on the site for one year.

Forward-Looking Statements 

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements pertain to FHN's beliefs, plans, goals, expectations, and estimates. Forward-looking statements are not a representation of historical information, but instead pertain to future operations, strategies, financial results, or other developments. Forward-looking statements can be identified by the words "believe," "expect," "anticipate," "intend," "estimate," "should," "is likely," "will," "going forward," and other expressions that indicate future events and trends.

Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, operational, economic, and competitive uncertainties and contingencies, many of which are beyond FHN's control, and many of which, with respect to future business decisions and actions (including acquisitions and divestitures), are subject to change and could cause FHN's actual future results and outcomes to differ materially from those contemplated or implied by forward-looking statements or historical performance. Examples of uncertainties and contingencies include those mentioned: in this document; in Items 2.02 and 7.01 of FHN's Current Report on Form 8-K to which this document has been filed as an exhibit; in the forepart, and in Items 1, 1A, and 7, of FHN's most recent Annual Report on Form 10-K, as amended; and in the forepart, and in Item 1A of Part II, of FHN's Quarterly Report(s) on Form 10-Q filed after that Annual Report.

FHN assumes no obligation to update or revise any forward-looking statements that are made in this document or in any other statement, release, report, or filing from time to time.

Use of Non-GAAP Measures and Regulatory Measures that are not GAAP

Certain measures included in this report are "non-GAAP," meaning they are not presented in accordance with generally accepted accounting principles in the U.S. and also are not codified in U.S. banking regulations currently applicable to FHN. Although other entities may use calculation methods that differ from those used by FHN for non-GAAP measures, FHN's management believes such measures are relevant to understanding the financial condition, capital position, and financial results of FHN and its business segments. Non-GAAP measures are reported to FHN's management and Board of Directors through various internal reports.

The non-GAAP measures presented in this earnings release are fully taxable equivalent measures, pre-provision net revenue ("PPNR"), Loans to Mortgage Companies ("LMC"), return on average tangible common equity ("ROTCE"), tangible common equity ("TCE") to tangible assets ("TA"), tangible book value ("TBV") per common share, and various consolidated and segment results and performance measures and ratios adjusted for notable items.

Presentation of regulatory measures, even those which are not GAAP, provide a meaningful base for comparability to other financial institutions subject to the same regulations as FHN, as demonstrated by their use by banking regulators in reviewing capital adequacy of financial institutions. Although not GAAP terms, these regulatory measures are not considered "non-GAAP" under U.S. financial reporting rules as long as their presentation conforms to regulatory standards. Regulatory measures used in this financial supplement include: common equity tier 1 capital ("CET1"), generally defined as common equity less goodwill, other intangibles, and certain other required regulatory deductions; tier 1 capital, generally defined as the sum of core capital (including common equity and instruments that cannot be redeemed at the option of the holder) adjusted for certain items under risk based capital regulations; and risk-weighted assets, which is a measure of total on- and off-balance sheet assets adjusted for credit and market risk, used to determine regulatory capital ratios.

Refer to the tabular reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items beginning on page 22 of FHN's complete 4Q23 earnings release available at https://ir.firsthorizon.com. 

First Horizon Corp. (NYSE: FHN), with $81.7 billion in assets as of December 31, 2023, is a leading regional financial services company, dedicated to helping our clients, communities and associates unlock their full potential with capital and counsel. Headquartered in Memphis, TN, the banking subsidiary First Horizon Bank operates in 12 states across the southern U.S. The Company and its subsidiaries offer commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services. First Horizon has been recognized as one of the nation's best employers by Fortune and Forbes magazines and a Top 10 Most Reputable U.S. Bank. More information is available at www.FirstHorizon.com. 

*ROTCE, PPNR, Core net interest income (NII), tangible book value per share, loans and leases excluding PPP and/or LMC, and "Adjusted" results are Non-GAAP Financial Measures; NII, Total Revenue, NIM and PPNR are presented on a fully taxable equivalent basis; References to loans include leases and EPS are based on diluted shares; Capital ratios are preliminary. Please reference the 4Q23 earnings materials at https://ir.firsthorizon.com for a description of our use of Non-GAAP measures and a reconciliation of these measures to GAAP presentation.

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SOURCE First Horizon Corporation

FAQ

What was the net income available to common shareholders for the fourth quarter of 2023?

The net income available to common shareholders for the fourth quarter of 2023 was $175 million, or $0.31 per share, and $178 million, or $0.32 per share on an adjusted basis.

What was the return on tangible common equity (ROTCE) for 4Q23?

The return on tangible common equity (ROTCE) for 4Q23 was 10.9%, and the adjusted ROTCE was 11.1%.

What was the tangible book value per share for the company?

The tangible book value per share was $12.13, up 8% quarter over quarter.

What was the full-year 2023 net income available to common shareholders?

The full-year 2023 net income available to common shareholders was $865 million, or $1.54 per share, compared to $868 million, or $1.53 per share in 2022.

What were the results of the period end deposits and loans in 2023?

First Horizon Corporation (FHN) reported a 4% increase in period end deposits and a 5% growth in period end loans in 2023.