First Horizon Corp. Reports Lower-Than-Expected Second Quarter Results

First Horizon Corp. (FHN) Shares Slip After Disappointing Second-Quarter Results

First Horizon Corp., the parent company of First Horizon Bank, saw its shares drop in intraday trading on Wednesday after reporting second-quarter results that fell short of analysts’ expectations. The regional bank reported lower net interest income (NII), which impacted its profits for the quarter.

According to reports, First Horizon reported NII of $629 million, slightly down from the previous year’s $631 million and below the $636 million that analysts had projected. This decline in NII also led to a decrease in revenue, which came in at $815 million, down from $1.03 billion in the same period last year.

Net income for the quarter also took a hit, falling to $204 million from $329 million in the previous year. Earnings per share were reported at $0.34, missing analysts’ estimates of $0.36.

As a result of the disappointing results, First Horizon shares were down nearly 6% to $16.44 as of 2:15 p.m. ET on Wednesday. In contrast, the KBW Nasdaq Regional Banking Index (KRX) moved higher during the same period.

The trend of lower NII seems to be affecting banks at both the national and regional levels, with rising deposit costs offsetting the benefits of higher interest rates on loan payments. Analysts are also predicting that potential interest rate cuts in the future could further impact banks’ NII in the coming years.

In response to the challenging environment, First Horizon lowered its full-year NII outlook, projecting a 2% to flat decrease compared to the fiscal 2023 mark of $2.56 billion. This adjustment comes after previous estimates of a 1% to 4% increase. Analysts are now expecting NII to remain relatively unchanged from last year.

Other regional banks, such as Citizens Financial Group (CFG), also reported lower NII in their recent earnings reports. CFG’s NII fell to $1.41 billion from $1.59 billion compared to the same period last year. This week, investors will be keeping an eye on earnings reports from M&T Bank (MTB) and Fifth Third Bancorp (FITB) to see how they have fared in the current economic climate.