First Horizon Q3 2026 slides: mortgage sale to boost returns 150bps

DA Davidson reiterated a Neutral rating and $27.00 price target on First Horizon (FHN) after the bank announced plans to sell $4.5B in low-yielding mortgage loans, expecting a 4% EPS boost by 2027. FHN shares trade at $23.25, with a P/E ratio of 16.49 and a 2.97% dividend yield. The bank reported Q3 adjusted EPS of $0.53, beating estimates, and plans to resume share repurchases in Q4.

First Horizon Corp reported Q3 2026 earnings with adjusted EPS declining to $0.53 due to lower fee income and higher provision expense. The company sold $4.5 billion in residential mortgage loans, expecting a 4% EPS accretion in 2027. Tangible book value per share fell 5% to $13.84. The mortgage sale aims to free up balance sheet capacity for higher-yielding loans and client relationships. Deposit costs increased 12 basis points to 2.45%, with competitive pressures expected to persist.

First Horizon Corp. is selling $4.5B in residential mortgage loans, citing high rates. PNC, Wells Fargo, and U.S. Bancorp reported mortgage income declines. BofA's mortgage loans fell to $115B. High rates hurt mortgage origination and refinancing.

First Horizon Corporation sold $4.5B in low-yielding mortgage loans at a 10% discount to boost profitability. The move aims to redeploy capital into higher-yielding loans, expecting a 4% EPS boost by 2027. Q3 saw $1.5B in client deposit growth, reducing reliance on expensive brokered deposits. Management plans to resume share buybacks in Q4 and targets a $100M+ PPNR opportunity.

First Horizon (FHN) reported Q3 2026 adjusted EPS of $0.53, with CEO D. Jordan noting $2B growth in commercial loans over the past year. The company plans to sell ~$4.5B in mortgage loans, aiming for ~4% EPS accretion by 2027 and expects net interest margin in the 3.50s.

First Horizon Corp. reported a net loss of $94 million, or $0.20 per share, for Q3, missing Wall Street expectations. Adjusted EPS was $0.53, down from Q2 but up from Q3 2025.