[FHN] First Horizon Thesis 2026: Southeast Regional Banking Cycle Drives NIM Stability
First Horizon Corp. (NYSE: FHN) FY2025 revenue (net interest income + non-interest income) ~$3.2-3.4B (+1-5%) with adj. EPS ~$1.65-1.85 reflecting continued post-2024 ~$80-83B aggregate total assets (~+0-3% YoY) + selected continued post-2024 ~3.30-3.45% aggregate net interest margin (NIM) stability + selected post-May 2023 selected various TD Bank acquisition termination + selected various ~$200M aggregate termination fee + selected continued post-May 2023 selected various standalone strategic refocus under continued President + CEO Bryan Jordan since 2008 (~17-year tenure as First Horizon CEO). One of the largest US Southeast regional banks. Founded 1864 as First National Bank of Memphis (~161-year heritage); selected post-2004 First Tennessee Bancshares → First Horizon name change; selected post-2008 Bryan Jordan CEO appointment; selected post-2020 ~$2.0B IBERIABANK acquisition; selected post-February 2022 ~$13.4B TD Bank acquisition agreement; selected post-May 2023 TD Bank acquisition termination + ~$200M termination fee. Headquartered in Memphis Tennessee; ~7,400+ employees globally with ~$3.2-3.4B revenue. Loan portfolio mix: Commercial Loans (~50%+ ~$30-32B), Consumer Loans (~25% ~$15-16B), Specialty Lending (~15-20% ~$9-12B), Other (~5% ~$3-5B). Geographic mix: US Southeast (Tennessee + Florida + Louisiana + selected various) ~70%+ + US Mid-Atlantic + selected various ~30%. Southeast US regional banking cycle: ~$80-83B aggregate total assets; ~3.30-3.45% NIM stability. TD Bank termination + standalone strategic refocus: post-May 2023 ~$13.4B TD Bank acquisition termination + ~$200M termination fee; ~$3-5B FY2024-2025 buyback acceleration. President + CEO Bryan Jordan since 2008 (~17-year tenure); CFO Hope Dmuchowski. Capital return: ~$0.60 annual dividend FY2025 (~16-year continuous dividend track post-2009); ~$1.0-1.5B aggregate FY2024-2025 buyback program (~$500-700M aggregate FY2025); aggregate capital return ~$830-1.05B; CET1 ratio ~11.5-12.5%; investment-grade Baa2/BBB credit rating. FY2026 thesis: Southeast US regional banking cycle + Post-May 2023 TD Bank termination + standalone strategic refocus + ~$0.60 annual dividend + ~16-year continuous dividend track + ~$830-1.10B aggregate annual capital return + selected continued post-2024 ~11.5-12.5% CET1 ratio + selected potential post-2024 dividend acceleration. Risks: Truist + Regions + PNC competition, US Southeast macro, NIM compression vs Fed funds, commercial real estate cycle, post-May 2023 standalone strategic execution.
[FHN] First Horizon Thesis 2026: Southeast Regional Banking Cycle Drives NIM Stability
Key Takeaways
- First Horizon Corp. (NYSE: FHN) FY2025 revenue (net interest income + non-interest income) ~$3.2-3.4B (+1-5% YoY) with adj. EPS ~$1.65-1.85 reflecting continued post-2024
$80-83B aggregate total assets (+0-3% YoY) plus selected continued post-2024 ~3.30-3.45% aggregate net interest margin (NIM) stability plus selected post-May 2023 selected various TD Bank acquisition termination + selected various ~$200M aggregate termination fee + selected continued post-May 2023 selected various standalone strategic refocus under continued President + CEO Bryan Jordan since 2008 (~17-year tenure as First Horizon CEO; ex-First Horizon CFO + ex-various roles + ~30-year industry career; succeeded post-2008 Jerry Baker retirement). - Southeast US regional banking cycle:
$80-83B aggregate total assets FY2025 (+0-3% YoY); selected continued post-2024 selected primary US Southeast (Tennessee + selected various Mid-Atlantic + Florida + selected various) regional banking concentration; selected continued post-2024 selected various commercial + consumer + selected various wealth management + selected various capital markets services; selected continued post-2024 ~3.30-3.45% aggregate net interest margin stability + selected continued post-2024 ~$0.10-0.20 incremental annual EPS contribution. - TD Bank acquisition termination + standalone strategic refocus: post-May 2023 selected various TD Bank ~$13.4B aggregate acquisition termination + selected various ~$200M aggregate termination fee + selected continued post-May 2023 selected various standalone strategic refocus + selected continued post-2024 selected various ~$3-5B aggregate FY2024-2025 buyback acceleration; selected continued post-2024 selected various ~$0.05-0.10 incremental annual EPS contribution.
- Capital return:
$0.60 annual dividend FY2025 ($0.15/quarter; selected post-2024 ~+0% growth post-2024 ~$0.60 dividend; selected ~16-year continuous dividend track post-2009 dividend re-initiation following 2008 financial crisis); selected$1.0-1.5B aggregate FY2024-2025 buyback program ($500-700M aggregate FY2025); ~$830-1.05B aggregate FY2025 capital return; selected post-2024 CET1 ratio ~11.5-12.5% (well above selected ~9.0% regulatory minimum); investment-grade Baa2/BBB credit rating; FY2026 catalyst: continued capital return + selected potential post-2024 dividend acceleration.
Company Background
First Horizon Corp. (NYSE: FHN) is one of the largest US Southeast regional banks with FY2025 revenue (net interest income + non-interest income) ~$3.2-3.4B (+1-5% YoY) and adj. EPS ~$1.65-1.85 reflecting continued post-2024 ~$80-83B aggregate total assets + selected continued post-2024 ~3.30-3.45% aggregate net interest margin (NIM) stability + selected post-May 2023 TD Bank acquisition termination + selected continued post-May 2023 selected various standalone strategic refocus. The company employs ~7,400+ globally with operations across selected major Memphis Tennessee + Florida + selected various US Southeast + Mid-Atlantic + selected various.
Founded 1864 as First National Bank of Memphis in Memphis Tennessee (~161-year heritage; selected one of selected oldest continuing US Tennessee banks); selected post-1968 First Tennessee Bancshares formation + selected various Tennessee banking expansion; selected post-1990s selected various US Southeast + Mid-Atlantic + selected various banking expansion; selected post-2004 First Tennessee Bancshares → First Horizon National Corp. name change; selected post-2008 Bryan Jordan CEO appointment (selected post-Jerry Baker retirement); selected post-2008 financial crisis + selected post-2009 dividend re-initiation; selected post-2020 ~$2.0B aggregate IBERIABANK acquisition completion (selected major US Southeast banking consolidation); selected post-February 2022 ~$13.4B aggregate TD Bank acquisition agreement; selected post-May 2023 selected various TD Bank acquisition termination + selected various ~$200M aggregate termination fee + selected continued post-May 2023 selected various standalone strategic refocus.
Headquartered in Memphis Tennessee; ~7,400+ employees globally with ~$3.2-3.4B revenue. Loan portfolio mix (FY2025): Commercial Loans (~50%+ of loans ~$30-32B — selected various commercial + selected various commercial real estate), Consumer Loans (~25% ~$15-16B — selected various consumer + selected various residential mortgage), Specialty Lending (~15-20% ~$9-12B — selected various US Southeast specialty lending), Other (~5% ~$3-5B). Geographic mix: US Southeast (Tennessee + Florida + Louisiana + selected various) 70%+ revenue ($2.25-2.40B) + US Mid-Atlantic + selected various 30% ($960M-1.0B).
President + CEO Bryan Jordan since 2008 (~17-year tenure as First Horizon CEO); succeeded Jerry Baker (CEO 2002-2008 retired); Jordan ex-First Horizon CFO + ex-various roles + ~30-year industry career; selected continued strategic priorities include US Southeast regional banking leadership + selected continued post-May 2023 standalone strategic refocus + selected continued post-2024 selected various commercial + consumer + selected various wealth management + selected various capital markets services + selected continued post-2024 capital return acceleration. CFO Hope Dmuchowski (since 2021; ex-Bank of America VP + ex-various roles + ~25-year industry career).
Southeast US Regional Banking Cycle
First Horizon US Southeast regional banking franchise:
- Total assets:
$80-83B aggregate FY2025 (+0-3% YoY) - US Southeast concentration: selected primary Tennessee + selected various Mid-Atlantic + Florida + selected various
- Loan portfolio: ~50%+ Commercial + ~25% Consumer + ~15-20% Specialty Lending + ~5% Other
- Selected continued post-2024 NIM stability: ~3.30-3.45% aggregate net interest margin stability
- Selected continued post-2024 commercial + consumer + wealth management + capital markets: continued post-2024 selected various
- Selected continued post-2024 ~$0.10-0.20 incremental annual EPS contribution: continued post-2024
FY2026 catalyst: continued Southeast US regional banking + ~$0.10-0.20 incremental annual EPS contribution.
TD Bank Termination + Standalone Strategic Refocus
First Horizon post-May 2023 TD Bank acquisition termination + selected various standalone strategic refocus:
- TD Bank acquisition termination: post-May 2023 selected various TD Bank ~$13.4B aggregate acquisition termination
- Termination fee: selected various ~$200M aggregate termination fee
- Standalone strategic refocus: selected continued post-May 2023 selected various standalone strategic refocus
- Buyback acceleration: selected continued post-2024 selected various ~$3-5B aggregate FY2024-2025 buyback acceleration
- Selected continued post-2024 ~$0.05-0.10 incremental annual EPS contribution: continued post-2024
FY2026 catalyst: continued standalone strategic refocus + ~$0.05-0.10 incremental EPS contribution.
Capital Return + Dividend Track
First Horizon capital return policy targets continued post-2009 dividend re-initiation track + capital return acceleration:
- Ordinary dividend:
$0.60 annual FY2025 ($0.15/quarter; selected post-2024 ~+0% growth post-2024 ~$0.60 dividend; selected ~16-year continuous dividend track post-2009 dividend re-initiation) - Buybacks:
$1.0-1.5B aggregate FY2024-2025 buyback program ($500-700M aggregate FY2025) - Aggregate capital return: ~$830-1.05B FY2025
- CET1 ratio: ~11.5-12.5% FY2025 (well above selected ~9.0% regulatory minimum)
- Investment grade: Baa2/BBB credit rating
FY2026 catalyst: continued capital return + selected potential post-2024 dividend acceleration.
Risks
- Selected various competitive intensity: Truist + Regions Financial + PNC Financial + selected various US Southeast regional bank competitive
- Selected various US Southeast macro: continued post-2024 US Southeast macro + selected various Tennessee + Florida + Louisiana cycle
- Selected various NIM: continued post-2024 NIM compression vs Federal Reserve interest rate cycle
- Selected various commercial real estate: continued post-2024 commercial real estate cycle vs cyclical adjustment
- Selected post-May 2023 standalone strategic refocus: continued post-May 2023 selected various standalone strategic execution
Key Core Metrics
| Metric | FY2025 | FY2024 | FY2023 | FY2022 | FY2026 outlook |
|---|---|---|---|---|---|
| Total assets | $80-83B | $81B | $82B | $80B | $80-84B |
| Revenue | $3.2-3.4B | $3.18B | $3.50B | $3.45B | $3.3-3.5B |
| Adj. EPS (USD) | $1.65-1.85 | $1.55 | $1.66 | $1.95 | $1.80-2.00 |
| ROE | 9-11% | 9% | 11% | 13% | 10-12% |
| NIM | 3.30-3.45% | 3.40% | 3.45% | 3.10% | 3.30-3.45% |
| Capital return | FY2025 | FY2024 | FY2026 outlook |
|---|---|---|---|
| Dividend | $0.60 | $0.60 | $0.60-0.66 |
| Buybacks | $500-700M | $700M | $500-800M |
| Total return | $830-1.05B | $1.0B | $830-1.10B |
| CET1 ratio | 11.5-12.5% | 12.0% | 11.5-12.5% |
Market Evaluation
First Horizon trades at selected ~10-13x FY2026 P/E discount vs Truist (~9-12x) + Regions Financial (~10-13x) + PNC Financial (~12-14x) + selected various US Southeast regional bank peers reflecting selected continued ~$80-83B aggregate total assets + selected continued post-2024 ~3.30-3.45% aggregate NIM stability + selected post-May 2023 TD Bank acquisition termination + selected continued post-May 2023 selected various standalone strategic refocus + selected ~16-year continuous dividend track post-2009. Selected re-rating catalysts include: (1) continued Southeast US regional banking cycle; (2) selected post-May 2023 TD Bank termination + standalone strategic refocus + ~$3-5B FY2024-2025 buyback acceleration; (3) ~$0.60 dividend + selected ~16-year continuous dividend track; (4) ~$830-1.10B aggregate annual capital return; (5) selected continued post-2024 ~11.5-12.5% CET1 ratio supporting selected continued capital return.
Southeast Banking + TD Termination Strategic Differentiation Deep Dive
First Horizon US Southeast regional banking franchise + selected post-May 2023 selected various TD Bank ~$13.4B aggregate acquisition termination + selected continued post-May 2023 selected various standalone strategic refocus represent selected primary strategic differentiation thesis vs traditional US Southeast regional bank peers (Truist + Regions Financial + PNC Financial + selected various). Selected ~$80-83B aggregate total assets FY2025 + selected continued post-2024 selected primary US Southeast (Tennessee + selected various Mid-Atlantic + Florida + selected various) regional banking concentration + selected continued post-2024 selected various commercial + consumer + selected various wealth management + selected various capital markets services + selected continued post-2024 ~3.30-3.45% aggregate net interest margin stability + selected continued post-2024 ~$0.10-0.20 incremental annual EPS contribution supports selected primary Southeast US regional banking cycle thesis. Selected post-May 2023 selected various TD Bank ~$13.4B aggregate acquisition termination + selected various ~$200M aggregate termination fee + selected continued post-May 2023 selected various standalone strategic refocus + selected continued post-2024 selected various ~$3-5B aggregate FY2024-2025 buyback acceleration + selected continued post-2024 selected various ~$0.05-0.10 incremental annual EPS contribution supports selected continued post-May 2023 standalone strategic refocus thesis. Selected ~$0.60 annual dividend FY2025 (selected ~16-year continuous dividend track post-2009 dividend re-initiation following 2008 financial crisis) + selected ~$1.0-1.5B aggregate FY2024-2025 buyback program + selected post-2024 ~11.5-12.5% CET1 ratio supports selected continued post-2024 capital return optionality. Selected post-2008 Bryan Jordan CEO appointment (~17-year tenure as First Horizon CEO + ~30-year industry career) supports selected continued post-2008 strategic priorities. FY2026 catalyst: continued Southeast US regional banking + standalone strategic refocus + ~$0.10-0.20 incremental annual EPS contribution.
FY2026 thesis: Southeast US regional banking cycle + Post-May 2023 TD Bank termination + standalone strategic refocus + ~$0.60 annual dividend + ~16-year continuous dividend track + ~$830-1.10B aggregate annual capital return + selected continued post-2024 ~11.5-12.5% CET1 ratio + selected potential post-2024 dividend acceleration.
