Are Rising Expenses at First Horizon (FHN) Shifting the Narrative on Efficiency and Profitability?

• First Horizon Corporation recently reported third-quarter 2025 results, highlighting net income of US$262 million, US$0.50 earnings per share, and revenue growth driven by higher net interest income and margin expansion.
• Although results surpassed analyst expectations, investor focus shifted to rising costs and a higher-than-expected efficiency ratio, revealing expense concerns despite the strong performance headline numbers.
• We will examine how increased expenses, despite solid loan growth, could influence First Horizon’s previously discussed investment narrative.

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First Horizon Investment Narrative Recap

First Horizon appeals to shareholders who prioritize resilient earnings, disciplined capital allocation, and stable revenue growth, even as the banking sector faces ongoing macroeconomic uncertainty. The recent third-quarter results, while positive on revenue and net income, have not materially changed the most important near-term catalyst, cost discipline, though rising expenses and an efficiency ratio above expectations remain the biggest risk in focus for the business right now.

Among recent company announcements, the substantial share repurchase program, completing nearly 33 million shares bought back for US$688.11 million since late 2024, stands out. This reduction in outstanding shares supports earnings per share and capital deployment, but it does not address investor concerns about rising costs that could affect margins and net income outlook.

Yet, despite recent top-line strength, investors should be aware that cost inflation, if left unchecked, could quickly erode ...

Read the full narrative on First Horizon (it's free!)

First Horizon's outlook anticipates $3.7 billion in revenue and $965.0 million in earnings by 2028. This scenario assumes a 6.7% annual revenue growth rate and projects a $149.0 million earnings increase from current earnings of $816.0 million.

Uncover how First Horizon's forecasts yield a $25.07 fair value, a 24% upside to its current price.

Exploring Other Perspectives

Three members of the Simply Wall St Community value First Horizon between US$25.07 and US$37.23 per share. While some see share buybacks as a positive catalyst for EPS, rising expense concerns remain a key issue shaping how investors assess future performance.

Explore 3 other fair value estimates on First Horizon - why the stock might be worth just $25.07!

Build Your Own First Horizon Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your First Horizon research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free First Horizon research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate First Horizon's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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