First Horizon reported a third-quarter 2026 net loss available to common shareholders of $94 million, or $0.20 per share, compared with net income of $254 million, or $0.50 per share, in the same quarter a year earlier. The results were hit by $347 million in notable items after tax tied mainly to the planned sale of about $4.5 billion of lower-yielding consumer mortgages.
On an adjusted basis, earnings were $0.53 per share, down $0.01 from the second quarter and up $0.02 from third quarter 2025.
Revenue and margins moved in different directions. Total revenue on a fully taxable equivalent basis fell to $410 million from $893 million a year earlier, while net interest income rose $7 million from the prior quarter to $686 million. Net interest margin slipped 1 basis point to 3.48%. Average loan yield increased 6 basis points to 5.73%, but interest-bearing deposit costs climbed 12 basis points to 2.45%.
Expenses were little changed on an adjusted basis. Noninterest expense was $529 million, down $2 million from the previous quarter. Adjusted noninterest income was $197 million, down $14 million sequentially.
Credit metrics were mixed. The company recorded a $25 million provision benefit, versus a $15 million provision expense in the second quarter. Excluding the mortgage sale impact, provision expense was $20 million, up from $15 million. Net charge-offs increased to $36 million, or 22 basis points, from $33 million, or 20 basis points. Nonperforming loans fell $49 million to $482 million.
Balance sheet shifts were pronounced. Period-end loans and leases dropped to $59.8 billion from $65.3 billion in the prior quarter, a decline of $5.5 billion, driven by a $4.6 billion reduction in consumer real estate and an $891 million decline in loans to mortgage companies. Average loans and leases decreased $206 million to $64.5 billion.
Deposits moved higher on average but lower at period end. Average deposits rose $1.8 billion to $68.6 billion, while period-end deposits slipped $372 million to $67.7 billion, mainly because of lower brokered CDs. Average client deposit balances increased $1.3 billion, and average brokered deposit balances rose $500 million.
Capital also eased. The CET1 ratio was 10.3%, down from the second quarter, as the mortgage reclassification reduced capital. The market has reacted to these announcements by moving the company's shares -0.44% to a price of $22.67. For more information, read the company's full 8-K submission here.
