First Horizon Posts Mixed Q2 Earnings, Reports Over 32K New-To-Bank Clients Bringing $3.5B In Deposit Balances

First Horizon Corporation FHN reported Q2 FY23 revenues of $1.031 billion, up 39% Y/Y, beating the consensus of $921.53 million.

Adjusted revenue of $810 million decreased $53 million or 6%, primarily due to an 8% decline in net interest income driven by a 50 bp reduction in NIM.

"Our results this quarter reflect the continued strength, resilience, and momentum of our diversified business mix, the benefit of our attractive markets..." said Chairman, President & CEO Bryan Jordan.

Net interest income of $631 million decreased 8%, as the benefit of higher loan rates and loan balances were more than offset by higher funding costs.

"Despite a challenging macroeconomic environment, we continued to serve our clients, growing period end loans by $2.3 billion and period end deposits by $4.0 billion, with over 32,000 new-to-bank clients bringing $3.5 billion in deposit balances," Jordan added.

Period-end loans increased by 4%, driven by a $1.4 billion increase in commercial and a $0.8 billion increase in consumer.

Period-end deposits of $65.4 billion increased $4.0 billion, reflecting a $6.3 billion increase in interest-bearing deposits partially offset by a $2.3 billion decrease in noninterest-bearing.

Average deposits of $61.4 billion decreased 1%, driven by a $2.6 billion decrease in DDA and other noninterest-bearing deposits partially offset by a $1.8 billion increase in interest-bearing deposits. 

Total deposit costs of 173 basis points increased 62 basis points.

Adjusted EPS of $0.39 marginally missed the consensus of $0.40.

First Horizon and TD Bank Group TD mutually terminated their previously announced $13.4 billion merger agreement in May. The companies said TD Bank has no timetable for regulatory approvals, and there is uncertainty over the approval.

Price Action: FHN shares are up 2.57% at $13.15 during the premarket session on the last check Wednesday.