First Horizon Corporation Deposit Pressure Makes for Tough 2H Setup

Research evidence excerpt

First Horizon Corporation Deposit Pressure Makes for Tough 2H Setup

Forecast returns

Forecast price appreciation 8.9%

Forecast dividend yield 2.6%

Forecast stock return 11.5%

Market return assumption 9.2%

Forecast excess return 2.3%

Company Description

First Horizon is an $80bn+ asset bank headquartered in Memphis, TN, primarily serving clients

throughout the Southeastern US. The bank's 2020 acquisition of IBKC expanded its presence

beyond Tennessee and the Carolinas into Florida, Texas, Georgia, and other markets. FHN was

also the subject of a proposed acquisition by TD (which was terminated in 2023). The bank

provides commercial, retail, and mortgage banking services, as well as specialty lending

offerings and capital markets solutions.

Valuation Method and Risk Statement

Our FHN price target is derived by applying a target P/E multiple on our 2027E EPS. Our target

P/E multiple is informed by the company’s historical P/E multiple, its historical multiple vs.

peers, and market multiples for the banking industry. Downside risks include: 1) lower deposit

levels resulting from decreased liquidity levels in the financial system; 2) credit deterioration

and reduced industry-wide loan demand resulting from a potential recession; 3) net interest

margin pressure from additional rate cuts, and 4) lower profitability and capital returns

resulting from a more rigorous regulatory environment. Upside risks include: 1) enhanced

deposit gathering, loan production, and credit performance resulting from continued

economic growth; 2) net interest margin expansion resulting from a more moderate pace of

rate cuts; and 3) improved profitability and capital return to shareholders resulting from a

friendlier regulatory regime.

First Horizon Corporation 15 July 2026 ab 5