First Horizon: Funding Cost Concerns Limit Upside

First Horizon Corp. is a 'hold' at current ~$25 levels, reflecting solid credit quality but deposit mix and reserve concerns. Click for this FHN stock update.

Shares of First Horizon Corporation (FHN) have been a solid performer over the past year, gaining about 17%. While the company reported a solid Q2 earnings beat, the stock was actually trading about 3% lower, reflecting the Summary - First Horizon Corporation remains a 'hold' at current ~$25 levels, reflecting solid credit quality but deposit mix and reserve concerns. - FHN's Q2 earnings beat was driven by a low tax rate, not core operations; deposit growth relied on expensive brokered funds, pressuring margins.

- NIM compressed in Q2 and faces near-term headwinds, but loan repricing offers longer-term upside; loan growth is steady, with manageable CRE and NDFI exposure. - Capital return continues via buybacks and a 2.7% dividend, but guidance was merely reiterated, and upside appears limited versus peers. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours.

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