First Horizon Corporation (NYSE: FHN) has reported a strong second quarter of 2025, with net income available to common shareholders (NIAC) of $233 million, resulting in earnings per share (EPS) of $0.45. This represents an increase of $0.04 from the prior quarter. On an adjusted basis, the NIAC was $229 million, or $0.45 per share, up $0.03 from the previous quarter.
The notable items for the second quarter included a $1 million expense credit for the FDIC special assessment and a $4 million expense credit related to an accrual release in deferred compensation related to a business unit divested over a decade ago. These notable items had a significant impact on the company's financial performance.
Comparing the second quarter of 2025 to the first quarter, several key metrics showed noteworthy changes. Net interest income (NII) increased by $10 million to $645 million, driven by loan portfolio growth. The net interest margin (NIM) decreased by 2 basis points to 3.40%, primarily due to higher deposit costs associated with increased brokered deposit balances.
Noninterest income saw a $7 million increase to $189 million, with adjusted noninterest income rising by the same amount due to higher deferred compensation income. However, fixed income declined by $7 million from the prior quarter.
Noninterest expense increased by $3 million to $491 million, with adjusted noninterest expense rising by $14 million. This increase included $9 million in higher deferred compensation and a $7 million increase in outside services, mostly due to seasonal advertising spend.
Average loan and lease balances increased by $906 million to $62.6 billion, with period-end balances rising by $1.0 billion to $63.3 billion. Average deposits increased by $0.2 billion to $64.7 billion, while period-end deposits saw a larger increase of $1.4 billion to $65.6 billion, driven by an increase of $1.6 billion in brokered deposits.
The provision expense decreased by $10 million to $30 million, while net charge-offs increased to $34 million from $29 million in the prior quarter.
The company's CET1 ratio increased by 7 basis points to 11.0% from the first quarter of 2025, as a majority of excess capital was deployed into loan growth.
In terms of income taxes, the effective and adjusted effective tax rates were 20.8% for the second quarter of 2025, compared to 22.0% for the first quarter.
The market has reacted to these announcements by moving the company's shares 1.91% to a price of $21.625. For more information, read the company's full 8-K submission here.
