The mortgage portfolio sale is the key catalyst — watch for Q4 2026 settlement and subsequent redeployment of capital into higher-yielding loans. The lowered revenue growth guidance and CET1 target suggest management is being cautious on near-term earnings power. Monitor NIM trajectory and deposit cost trends for signs of stabilization.
Price Chart
Executive Summary
First Horizon reported a GAAP net loss of $0.20 per share for Q3 2026, driven by a $473M pre-tax loss on the pending sale of $4.5B of lower-yielding consumer mortgages. Adjusted EPS of $0.53 was slightly below the $0.54 consensus, while adjusted PPNR of $362M was down 1% QoQ but up 3% YoY. The strategic mortgage sale is expected to close early Q4 2026 and be accretive to future earnings, but the headline GAAP loss and lowered CET1 ratio to 10.3% create near-term uncertainty.
Key Financial Metrics
Key Facts
- GAAP net loss available to common shareholders of $(94)M, or $(0.20) per diluted share, vs net income of $260M ($0.54) in Q2 2026
- Adjusted diluted EPS of $0.53, down $0.01 QoQ and up $0.02 YoY, versus consensus of $0.54 (a ~1.8% miss)
- Adjusted PPNR (FTE) of $362M, down 1% QoQ and up 3% YoY
- NII (FTE) increased $7M QoQ to $686M; NIM compressed 1bp to 3.48%
- Noninterest income swung to a loss of $(276)M from $211M in Q2, driven by a $473M loss on reclassification of mortgage loans to held for sale
- Company announced sale of ~$4.5B of select lower-yielding consumer mortgages, expected to settle early Q4 2026; transaction accretive to go-forward EPS and ROTCE
- CET1 ratio declined 12bps to 10.3%, reflecting notable items and the mortgage reclassification
- Net charge-offs of $36M (22bps), up from $33M (20bps) in Q2; NPLs decreased $49M to $482M
- Adjusted provision expense of $20M, up from $15M in Q2
- 2026 outlook updated: adjusted revenue growth lowered to low end of 3-7% range; CET1 target lowered to 10.25-10.5%
Financial Impact
GAAP net loss of $94M vs net income of $260M in Q2; adjusted EPS of $0.53 vs consensus $0.54; $4.5B mortgage portfolio sale with $473M pre-tax loss
Risk Factors
- Mortgage sale closing delayed or terms change, preventing expected accretion
- Further NIM compression from rising deposit costs and competitive pressure
- Credit deterioration if NCOs continue to trend upward from current 22bps
- CET1 ratio at 10.3% limits capital return flexibility (buybacks were only $4M in Q3)
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0000036966-26-000178 |
| Document: a3q26earningsslides-fina.htm | 0000036966-26-000178 |
| Document: fhn-20261015.htm | 0000036966-26-000178 |
| Document: 0000036966-26-000178-index-headers.html | 0000036966-26-000178 |
| Document: 0000036966-26-000178-index.html | 0000036966-26-000178 |
| Document: 0000036966-26-000178.txt | 0000036966-26-000178 |
| 8-K Data (Synthetic) | 0000036966-26-000178 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 27, 2026 today | 8-K | $23.52 | awaiting T+5 | — | $23.35 (−0.72%) |
Oct 26, 2026 1d ago | Press Release | $23.36 | awaiting T+5 | — | $23.35 (−0.04%) |
Oct 22, 2026 5d ago | SC 13G/A | $23.54 | awaiting T+5 | — | $23.35 (−0.81%) |
Oct 21, 2026 6d ago | Institutional Cluster | $23.54 | awaiting T+5 | — | $23.35 (−0.81%) |
Oct 19, 2026 8d ago | Press Release | $22.73 $23.43 | ▲ +3.08% | ▲ +3.22% | $23.35 (+2.73%) |
Oct 15, 2026 12d ago | 8-K | $22.86 $23.54 | ▲ +2.97% | ▲ +3.99% | $23.35 (+2.14%) |
Oct 15, 2026 12d ago | Press Release | $22.86 $23.54 | ▼ −2.97% | ▼ −3.99% | $23.35 (−2.14%) |
Oct 15, 2026 13d ago | Court Ruling | $22.88 $23.44 | ▲ +2.45% | ▲ +2.88% | $23.35 (+2.05%) |
Oct 11, 2026 17d ago | Court Ruling | $23.06 $22.73 | ▼ −1.43% | ▲ +0.06% | $23.35 (+1.26%) |
Oct 5, 2026 22d ago | SC 13G | $23.34 $22.77 | ▼ −2.44% | ▼ −2.30% | $23.35 (+0.04%) |
US Market Status
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