FIRST HORIZON CORP
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Executive Overview
Financial Performance Summary
Third Quarter 2024 Highlights
FHN reported third quarter 2024 net income available to common shareholders of $213 million, or $0.40 per diluted share, compared to $184 million, or$0.34 per diluted share, in second quarter 2024 and $129 million, or $0.23 per diluted share, in third quarter 2023.
Net interest income of $627 million decreased $2 million compared to second quarter 2024 from increased deposit costs and higher levels of brokered deposits, partially offset by improvement in loan repricing. Net interest income increased $22 million compared to third quarter 2023, driven by the impact of higher yields on earning assets partially offset by higher funding costs.
Provision for credit losses was $35 million for third quarter 2024 compared to $55 million for second quarter 2024 and $110 million for third quarter 2023. Net charge-offs were $24 million, or 15 basis points, compared to $34 million, or 22 basis points, in second quarter 2024 and $95 million, or 61 basis points, in third quarter 2023. Third quarter 2023 included a single $72 million charge-off for a company in bankruptcy.
Noninterest income of $200 million increased $14 million compared to second quarter 2024, largely driven by an increase in fixed income production. Noninterest income for third quarter 2024 increased $27 million, or 16%, compared to third quarter 2023, also largely driven by higher fixed income production.
Noninterest expense of $511 million increased $11 million from second quarter 2024, largely resulting from $15 million in Visa derivative valuation expense. Compared with third quarter 2023, noninterest expense increased $37 million, or 8%, largely reflecting an increase in personnel expense, expenses related to strategic investments and Visa derivative valuation expense.
Year-to-Date and Period End Highlights
For the nine months ended September 30, 2024, net income available to common shareholders was
$581 million, or $1.06 per diluted share, compared to $689 million, or $1.23 per diluted share, for the nine months ended September 30, 2023.
Net interest income decreased $42 million, largely driven by higher funding costs partially offset by higher earning asset yields and loan growth.
Provision for credit losses of $140 million decreased $70 million for the year-to-date period of 2024 compared to the same period of 2023, largely reflecting the impact of a single large credit loss in 2023.
Noninterest income for the year-to-date period decreased $164 million, or 22%, primarily from the gain on merger termination in 2023, partially offset by higher fixed income, mortgage banking income and brokerage, management fees and commissions in 2024.
Noninterest expense for the year-to-date period increased $19 million, or 1%, largely attributable to higher personnel expense, deposit insurance expense and legal and professional fees partially offset by lower contributions expense.
Period-end loans and leases of $62.4 billion increased $1.2 billion, or 2%, from December 31, 2023. Commercial loan growth of $948 million was driven by growth in loans to mortgage companies and CRE loans partially offset by a decline in other C&I loans. Consumer loan growth of $205 million was largely driven by growth in consumer real estate loans.
Period-end deposits of $66.6 billion increased $795 million, or 1%, compared to December 31, 2023. Interest-bearing deposits increased $1.8 billion and noninterest-bearing deposits decreased $992 million.
The Common Equity Tier 1 ratio was 11.23% at September 30, 2024 compared to 11.40% at December 31, 2023. Tier 1 risk-based capital and total risk-based capital ratios at September 30, 2024 were 12.24% and 13.88%, down from 12.42% and 13.96% at December 31, 2023, respectively.
| 74 | 3Q24 FORM 10-Q REPORT |
PART I, ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
Table of Contents
The following portions of this MD&A focus in more detail on the results of operations for thethree and nine months ended September 30, 2024, the three months ended June 30, 2024, and thethree and nine months ended
September 30, 2023 and on information about FHN's financial condition, loan and lease portfolio, liquidity, funding sources, capital and other matters.
Table I.2.1
KEY PERFORMANCE INDICATORS
| As of or for the three months ended · As of or for the nine months ended | |||||
|---|---|---|---|---|---|
| (Dollars in millions, except per share data) | September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 |
| Pre-provision net revenue (a) | $316 | $315 | $304 | $935 | $1,160 |
| Diluted earnings per common share | $0.40 | $0.34 | $0.23 | $1.06 | $1.23 |
| Return on average assets (b) | 1.08% | 1.00% | 0.68% | 1.02% | 1.19% |
| Return on average common equity (c) | 10.10% | 8.98% | 6.28% | 9.28% | 11.86% |
| Return on average tangible common equity (a) (d) | 12.60% | 11.29% | 7.95% | 11.62% | 15.24% |
| Net interest margin (e) | 3.31% | 3.38% | 3.17% | 3.35% | 3.47% |
| Noninterest income to total revenue (f) | 24.06% | 22.75% | 22.23% | 23.52% | 27.88% |
| Efficiency ratio (g) | 61.89% | 61.44% | 60.96% | 62.08% | 56.53% |
| Allowance for loan and lease losses to total loans and leases | 1.32% | 1.31% | 1.23% | 1.32% | 1.23% |
| Net charge-offs (recoveries) to average loans and leases (annualized) | 0.15% | 0.22% | 0.61% | 0.21% | 0.30% |
| Total period-end equity to period-end assets | 11.27% | 10.89% | 10.65% | 11.27% | 10.65% |
| Tangible common equity to tangible assets (a) | 8.56% | 8.14% | 7.76% | 8.56% | 7.76% |
| Cash dividends declared per common share | $0.15 | $0.15 | $0.15 | $0.45 | $0.45 |
| Book value per common share | $16.15 | $15.34 | $14.28 | $16.15 | $14.28 |
| Tangible book value per common share (a) | $13.02 | $12.22 | $11.22 | $13.02 | $11.22 |
| Common equity Tier 1 | 11.23% | 11.05% | 11.12% | 11.23% | 11.12% |
| Market capitalization | $8,265 | $8,467 | $6,157 | $8,265 | $6,157 |
(a) Represents a non-GAAP measure which is reconciled in the non-GAAP to GAAP reconciliation in Table I.2.26.
(b) Calculated using annualized net income divided by average assets.
(c) Calculated using annualized net income available to common shareholders divided by average common equity.
(d) Calculated using annualized net income available to common shareholders divided by average tangible common equity.
(e) Net interest margin is computed using total net interest income adjusted to an FTE basis assuming a statutory federal income tax rate of 21% and, where applicable, state income taxes.
(f) Ratio is noninterest income excluding securities gains (losses) to total revenue excluding securities gains (losses).
(g) Ratio is noninterest expense to total revenue excluding securities gains (losses).
| 75 | 3Q24 FORM 10-Q REPORT |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.