First Horizon reported Q1 EPS of $0.46, NIM widened 4 bps to 3.64%. The bank plans a 10% standardized RWA cut in Q2 while maintaining CET1 around 10.5%.
First Horizon (FHN) expects to reduce standardized risk-weighted assets by roughly 10% in the second quarter while keeping its common equity Tier 1 ratio around 10.5%, management said during the bank's earnings call.
The Memphis-based regional lender reported adjusted earnings per share of $0.46 for the first quarter, up from $0.39 a year earlier. Net interest income rose 2% sequentially to $642 million, driven by loan growth and lower deposit costs. The net interest margin widened 4 basis points to 3.64%.
Loan balances grew 1% from the prior quarter. Commercial and industrial lending increased 2%. Deposits edged lower by 1%. The bank said it has been reducing its reliance on higher-cost wholesale funding, which helped support the NIM expansion.
Noninterest income fell 3% to $193 million, partly on lower service charges and mortgage banking revenue. Expenses rose 2% to $503 million, reflecting higher personnel costs and technology investments.
The CET1 ratio stood at 10.6% at quarter end, above the bank's 10.5% target. Management tied the planned RWA reduction to the final Basel III endgame rules, which take effect in 2026. The standardized RWA decline will be partially offset by higher operational risk charges, the bank said.
Credit quality remained stable. Net charge-offs were 0.28% of average loans, flat with the prior quarter. Nonperforming assets ticked up to 0.62% from 0.58%.
First Horizon maintained its 2026 outlook for mid-single-digit loan growth and a net interest margin in the 3.60% to 3.70% range.
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