The Investor
15 Oct 2026, 15:02
First Horizon Rises 2.8% as Strategic Mortgage Sale Points to Better Future Earnings
First Horizon (NYSE: FHN) shares rose about 2.8% after the bank reported a third-quarter net loss but announced a major balance-sheet repositioning designed to improve future earnings and free capacity for loan growth.
The company reported a net loss available to common shareholders of $94 million, or $0.20 per share. However, results included $347 million after tax, or $0.73 per share, of notable items, primarily tied to the reclassification of roughly $4.5 billion of lower-yielding consumer mortgages to held for sale.
Excluding those items, adjusted EPS was $0.53, down slightly from $0.54 in the second quarter but above $0.51 a year earlier.
First Horizon said it entered into an agreement in early October to sell the approximately $4.5 billion mortgage portfolio. Management expects the transaction to close early in the fourth quarter and said the sale should be accretive to earnings going forward by removing lower-yielding assets and creating additional balance-sheet flexibility.
Deposit trends were also constructive, with average client deposits increasing by $1.3 billion during the quarter.
The 2.8% gain appears to reflect investor focus on the forward earnings benefit of the mortgage portfolio sale rather than the reported quarterly loss. The key catalyst is the expectation that redeploying capital away from lower-yielding mortgages can improve profitability and support stronger loan growth over time.
First Horizon (NYSE: FHN) shares rose about 2.8% after the bank reported a third-quarter net loss but announced a major balance-sheet repositioning designed to improve future earnings and free capacity for loan growth.
The company reported a net loss available to common shareholders of $94 million, or $0.20 per share. However, results included $347 million after tax, or $0.73 per share, of notable items, primarily tied to the reclassification of roughly $4.5 billion of lower-yielding consumer mortgages to held for sale.
Excluding those items, adjusted EPS was $0.53, down slightly from $0.54 in the second quarter but above $0.51 a year earlier.
First Horizon said it entered into an agreement in early October to sell the approximately $4.5 billion mortgage portfolio. Management expects the transaction to close early in the fourth quarter and said the sale should be accretive to earnings going forward by removing lower-yielding assets and creating additional balance-sheet flexibility.
Deposit trends were also constructive, with average client deposits increasing by $1.3 billion during the quarter.
The 2.8% gain appears to reflect investor focus on the forward earnings benefit of the mortgage portfolio sale rather than the reported quarterly loss. The key catalyst is the expectation that redeploying capital away from lower-yielding mortgages can improve profitability and support stronger loan growth over time.
