First Horizon Corporation (FHN): history, ownership, mission, how it works & makes money

A Brief History of First Horizon Corporation

Company Overview

First Horizon Corporation, incorporated in 1995, is a bank holding company based in Memphis, Tennessee. It primarily operates through its subsidiary, First Horizon Bank, offering a variety of financial services including personal banking, business banking, and wealth management.

Significant Milestones

• 1995: First Horizon Corporation was established following the merger of First Tennessee National Corporation and the Bank of Memphis.
• 2004: The company expanded its footprint by acquiring the banking operations of Capital Bank.
• 2020: Announced a significant merger deal with TD Bank, which was later terminated in 2022.
• 2023: Completed the acquisition of the banking operations of the First National Bank of Pennsylvania.

Recent Financial Performance

As of June 30, 2024, First Horizon reported a net income of $401 million for the first half of 2024, a decrease from $585 million in the same period of 2023. This represents earnings of $0.67 per diluted share compared to $1.00 per diluted share in the prior year.

Key Financial Metrics

Capital and Assets

As of June 30, 2024, First Horizon's total equity was $8.95 billion, down from $9.29 billion at the end of 2023. The Tier 1 risk-based capital ratio was reported at 12.05%, compared to 12.42% at the end of 2023.

Market Presence

First Horizon operates over 300 branches across the southeastern United States. It is recognized for its strong community banking services and commitment to customer service.

Outlook and Strategy

First Horizon continues to focus on expanding its market presence through strategic acquisitions and enhancing its digital banking services to meet evolving customer needs. The company aims to leverage its strong regional brand and customer relationships to drive growth and profitability in the coming years.

Recent Challenges

The company faced challenges in 2024, including increased funding costs and a competitive lending environment, which have impacted net interest income and overall profitability.

Conclusion

First Horizon Corporation remains a key player in the regional banking landscape, with a robust financial foundation and strategic initiatives aimed at growth and customer satisfaction.

A Who Owns First Horizon Corporation (FHN)

Major Shareholders

As of 2024, the ownership structure of First Horizon Corporation (FHN) is characterized by a diverse group of institutional and retail investors. The largest shareholders include:

Recent Stock Performance

As of the second quarter of 2024, FHN's stock performance has shown fluctuations, with a closing price of $15.34 per share on June 30, 2024. The market capitalization of First Horizon Corporation is approximately $8.47 billion.

Executive Ownership

Key executives also hold significant shares in FHN, including:

Insider Transactions

In recent months, insider transactions have included:

Institutional Ownership Trends

Institutional ownership has increased by approximately 2% over the past year, indicating growing confidence among institutional investors in FHN's financial performance and strategic direction.

Summary of Financial Performance

For the six months ending June 30, 2024, First Horizon reported a net income available to common shareholders of $368 million, or $0.67 per diluted share, compared to $560 million, or $1.00 per diluted share, for the same period in 2023 .

First Horizon Corporation (FHN) Mission Statement

Mission Statement Overview

First Horizon Corporation (FHN) is dedicated to providing exceptional financial services to its clients while maintaining a strong commitment to community engagement and sustainable practices. The company aims to deliver innovative banking solutions that empower its customers to achieve their financial goals.

Core Values

• Integrity: FHN emphasizes honesty and transparency in all interactions.
• Customer Focus: The organization prioritizes the needs of its customers to enhance their banking experience.
• Community Engagement: FHN actively participates in initiatives that support local communities and promote economic growth.
• Innovation: The company is committed to leveraging technology to improve service delivery and operational efficiency.

Financial Performance Summary

As of June 30, 2024, First Horizon Corporation reported significant financial metrics that reflect its operational effectiveness and market position.

Market Position and Growth Strategy

First Horizon operates in a competitive banking landscape, with a focus on expanding its market share through strategic acquisitions and organic growth. The company continues to enhance its digital banking capabilities to meet the evolving needs of its customers.

Community and Sustainability Initiatives

FHN is committed to making a positive impact in the communities it serves. The organization allocates resources to various community development programs and environmental sustainability initiatives. This includes a $50 million contribution to the First Horizon Foundation aimed at supporting educational and economic opportunities within local communities.

Employee Engagement and Development

FHN recognizes that its employees are vital to achieving its mission. The company invests in employee training and development programs to foster a culture of excellence and innovation.

Conclusion

First Horizon Corporation's mission statement reflects its commitment to delivering high-quality financial services while being a responsible corporate citizen. Through its focus on customer satisfaction, community engagement, and sustainable practices, FHN aims to strengthen its position as a leading financial institution in the United States.

How First Horizon Corporation (FHN) Works

Business Overview

First Horizon Corporation (FHN) operates primarily through its banking subsidiary, First Horizon Bank, providing a variety of financial services across commercial and retail banking. As of June 30, 2024, FHN operated over 450 business locations in 24 states and employed approximately 7,300 associates.

Financial Performance

In the second quarter of 2024, FHN reported net income available to common shareholders of $184 million, or $0.34 per diluted share, compared to $184 million, or $0.33 per diluted share, in the first quarter of 2024 and $317 million, or $0.56 per diluted share, in the second quarter of 2023. The year-to-date net income available to common shareholders for the six months ended June 30, 2024, was $368 million, or $0.67 per diluted share, down from $560 million, or $1.00 per diluted share, in the same period of 2023.

Segment Performance

FHN's operations are divided into three primary segments: Regional Banking, Specialty Banking, and Corporate. Each segment contributes differently to the overall financial performance of the corporation.

Regional Banking

In Q2 2024, the Regional Banking segment generated a pre-tax income of $241 million, down from $342 million in Q2 2023. The net interest income for this segment was $522 million, reflecting a decrease compared to the prior year.

Specialty Banking

The Specialty Banking segment reported pre-tax income of $118 million in Q2 2024, an increase from $93 million in Q2 2023. The segment's net interest income was $156 million.

Corporate

The Corporate segment reported a pre-tax loss of $99 million in Q2 2024, compared to a loss of $10 million in Q2 2023, primarily due to the absence of a significant gain on merger termination that occurred in the previous year.

Loan and Lease Portfolio

As of June 30, 2024, total loans and leases amounted to $62.8 billion, with a composition primarily of commercial loans, consumer real estate loans, and credit card loans.

Asset Quality

FHN maintains an allowance for credit losses (ACL) of $821 million as of June 30, 2024, reflecting an increase from $773 million at the end of 2023. The ratio of ACL to total loans and leases is 1.31%.

Deposits and Funding

As of June 30, 2024, total deposits were $64.8 billion, a decrease of $986 million from December 31, 2023. Interest-bearing deposits decreased by $130 million, while noninterest-bearing deposits decreased by $856 million.

Capital Ratios

FHN's capital ratios as of June 30, 2024, include a Tier 1 risk-based capital ratio of 12.05% and a total risk-based capital ratio of 13.67%, both reflecting a decrease from the end of 2023.

How First Horizon Corporation (FHN) Makes Money

Net Interest Income

First Horizon Corporation's primary revenue source is net interest income, which totaled $1.25 billion for the six months ended June 30, 2024. This represents a decrease of $65 million compared to the same period in 2023. The net interest margin was 3.38% for the same period, down from 3.62% in 2023.

As of June 30, 2024, the average balance of loans and leases was approximately $61.6 billion, yielding an interest income of $1.93 billion at an average yield of 6.31% compared to $1.69 billion at a yield of 5.77% for the same period in 2023.

Noninterest Income

Noninterest income for the first half of 2024 was $381 million, a decrease of $190 million, or 33%, from $571 million in the same period in 2023. This decline was primarily due to the absence of the $225 million gain on merger termination recorded in 2023. Key components of noninterest income included:

Provision for Credit Losses

The provision for credit losses for the first half of 2024 was $105 million, up from $100 million in the same period of 2023. Net charge-offs for the second quarter of 2024 were $34 million, representing 22 basis points of total loans and leases, compared to $23 million, or 16 basis points, for the second quarter of 2023.

Noninterest Expense

Noninterest expenses totaled $1.02 billion for the first six months of 2024, down from $1.03 billion in 2023. This reflects a decrease of $18 million, primarily due to lower contributions to the First Horizon Foundation and reduced merger-related expenses.

Regional and Specialty Banking Segments

First Horizon's operations are divided into Regional Banking and Specialty Banking segments. For the six months ended June 30, 2024, the contributions from each segment were:

Conclusion of Financial Performance

As of June 30, 2024, total assets stood at $82.2 billion, with total loans and leases of $62.8 billion and total deposits of $64.8 billion. The company continues to navigate a competitive banking environment while managing its cost structure and loan portfolio effectively.