Regional banking company First Horizon (NYSE: FHN) fell short of the market’s revenue expectations in Q1 CY2026, but sales rose 5.8% year on year to $862 million. Its non-GAAP profit of $0.53 per share was 6.7% above analysts’ consensus estimates.
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First Horizon (FHN) Q1 CY2026 Highlights:
- Net Interest Income: $667 million vs analyst estimates of $665 million (5.7% year-on-year growth, in line)
- Net Interest Margin: 3.5% vs analyst estimates of 3.5% (5.1 basis point beat)
- Revenue: $862 million vs analyst estimates of $872.1 million (5.8% year-on-year growth, 1.2% miss)
- Efficiency Ratio: 58.5% vs analyst estimates of 58.8% (27.1 basis point beat)
- Adjusted EPS: $0.53 vs analyst estimates of $0.50 (6.7% beat)
- Tangible Book Value per Share: $14.34 vs analyst estimates of $14.30 (8.9% year-on-year growth, in line)
- Market Capitalization: $11.58 billion
Company Overview
Tracing its roots back to 1864 during the Civil War era, First Horizon (NYSE: FHN) is a Tennessee-based bank holding company that provides commercial and consumer banking, wealth management, and specialty financial services across multiple states.
Sales Growth
In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees. Over the last five years, First Horizon grew its revenue at a sluggish 3.3% compounded annual growth rate. This fell short of our benchmark for the banking sector and is a tough starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. First Horizon’s annualized revenue growth of 4.1% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, First Horizon’s revenue grew by 5.8% year on year to $862 million, missing Wall Street’s estimates.
Net interest income made up 74.7% of the company’s total revenue during the last five years, meaning lending operations are First Horizon’s largest source of revenue.
Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.
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Tangible Book Value Per Share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.
First Horizon’s TBVPS grew at a solid 6.8% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 8.6% annually over the last two years from $12.16 to $14.34 per share.
Over the next 12 months, Consensus estimates call for First Horizon’s TBVPS to grow by 5.7% to $15.15, lousy growth rate.
Key Takeaways from First Horizon’s Q1 Results
It was good to see First Horizon beat analysts’ net interest margin and EPS expectations this quarter. On the other hand, its revenue slightly missed and net interest income and tangible book value per share were just in line. Overall, this was a mixed quarter. The stock remained flat at $24.40 immediately following the results.
Is First Horizon an attractive investment opportunity at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
