FHN Stock Forecast & Price Target

First Horizon Corp's strong financial performance is underscored by a notable increase in net interest income of $34 million, reaching $675 million and exceeding forecasts, alongside a 15 basis point rise in net interest margin to 3.55%. Additionally, the company has demonstrated robust consumer loan growth, particularly in consumer real estate, which constitutes a significant portion of its total loans, and has successfully reduced its Series B preferred stock by $80 million. With remaining share buyback authorization exceeding $300 million and a 13.2% increase in core fee income, First Horizon is well-positioned for continued growth in its competitive markets.

First Horizon Corp's stock has faced significant downward pressure due to unexpected messaging regarding merger and acquisition (M&A) activities, which caused shares to decline over 9% and overshadowed previously noted positive fundamental trends. The company reported a decline in average deposits of approximately $1.1 billion, now totaling $64.6 billion year-to-date, highlighting concerns about deposit retention amid competitive market pressures. Furthermore, while nonperforming assets indicated a slight decline in the recent quarter, they had previously peaked at $609 million, reflecting increasing risks associated with certain loan segments, particularly in office and multifamily loans.