Earning Preview: First Horizon National Q1 revenue is expected to increase by 5.56%, and institutional views are bullish

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Market Forecast

The main business is expected to be anchored by the Commercial, Consumer and Wealth franchise, which remains the largest revenue contributor and should benefit from a higher mix of net interest income as funding costs normalize against March’s curve repricing. The most promising segment for incremental earnings power appears to be the Commercial, Consumer and Wealth unit, which generated 3.03 billion US dollars in revenue in the latest segment disclosure; year-over-year segment growth was not provided.

Last Quarter Review

A key highlight was operating efficiency, with EBIT of 354.00 million US dollars advancing 12.74% year over year as expense discipline and credit performance supported throughput from higher revenue. By line of business, Commercial, Consumer and Wealth accounted for 3.03 billion US dollars of revenue, Wholesale contributed 489.00 million US dollars, and Corporate reported negative 103.00 million US dollars; year-over-year segment comparisons were not disclosed, but the mix underscores the centrality of relationship-driven banking and wealth to total income.

Current Quarter Outlook (with major analytical insights)

Core earnings drivers in the Commercial, Consumer and Wealth franchise

The practical effect for the print is likely to be seen in net interest income resilience and controlled operating expense growth. On the revenue line, management’s earlier commentary and external sell-side assessments indicate that First Horizon National ranks among more asset-sensitive regional peers, which typically translates into quicker pass-through of rate changes to earnings. That can support faster gross earnings capture in the first half of 2026, even if loan growth remains modest, because reinvestment and variable-rate assets reprice ahead of lagged funding resets. On the cost side, the company’s fourth-quarter efficiency carried into 2026, and while seasonal first-quarter expense signals bear watching, the EBIT forecast implies a modestly positive operating leverage setup. The most important watch item within this franchise is deposit mix—namely the proportion of noninterest-bearing and low-cost balances—which will dictate the pace at which net interest margin can expand or at least hold near fourth-quarter levels.

Credit quality and provisioning will also influence how much of the forecast EBIT converts to adjusted EPS. Fourth-quarter results showed manageable credit costs within the context of strong net income margins, and there has been no disclosed deterioration that would suggest a need to materially change reserve trajectories into the first quarter. If credit remains benign and fee line items associated with wealth and treasury services track seasonal norms, the franchise can deliver the projected mid-teens EBIT growth and approximately 24.52% year-over-year growth in adjusted EPS embedded in consensus.

Fee-income opportunities and the most promising near-term catalyst

The trajectory of mortgage and capital markets-related fees will be sensitive to rate volatility and the shape of the curve. External institutional commentary has noted that a flatter curve and higher mortgage rates can weigh on fixed-income and mortgage businesses, yet the same commentary also pointed to a greater net interest income mix after March’s repricing. This tension suggests fee lines tied to mortgage origination and capital markets may act more as a swing factor than a core driver, while treasury, wealth, and service charges provide steadier ballast. If volatility remains elevated but directionally favorable for client hedging and balance-sheet repositioning, capital markets fees could surprise positively; however, the core investment case for the quarter does not require such a surprise, given the embedded operating leverage in the spread-based engine.

From a capital deployment standpoint, the company exited 2025 with robust profitability and tangible common equity trends that give it flexibility to support organic growth. While broader capital return policies are not the focus of the near-term print, a stable capital base allows continued investment in client-facing platforms in wealth and commercial banking, which enhances the multi-product penetration necessary for sustained fee uplift. The upshot is that, even if mortgage and certain market-sensitive fees are choppy, the core relationship businesses can still deliver on the forecast revenue and EPS, and any upside from transactional fees becomes additive rather than required.

Key swing factors into the print and how they could affect valuation

Second, loan growth and utilization trends in commercial and consumer portfolios will set the tone for top-line momentum. Incremental loan demand following year-end and early-year budget cycles often comes through late in the first quarter or into the second; the earnings trajectory can still advance with flat balances if yield dynamics carry the day, but a modest pickup in utilization would underpin both NII and fee-generating activity. Third, fee income sensitivity to the rate environment—especially in fixed income distribution and mortgage—remains an overhang in a flatter curve scenario. However, in prior quarters the company has shown that a broad-based revenue mix can offset muted transactional fees with steadier service and advisory lines.

Finally, operating expenses and credit costs will influence EBIT conversion. The consensus EBIT forecast of 350.45 million US dollars implies controlled expense growth off the fourth-quarter base. If management sustains that discipline while credit costs remain consistent with recent experience, a beat on adjusted EPS is plausible given the 24.52% year-over-year improvement embedded in estimates. If, instead, fee headwinds coincide with higher short-term funding costs, the company would likely land near the midpoint of consensus ranges, with upside deferred to later quarters as balance sheets reflect ongoing repricing.

Analyst Opinions

Notably, one major institution reaffirmed an Outperform stance in mid-January 2026 and lifted its price target to 28.00 US dollars, emphasizing the company’s earnings trajectory as it exited 2025 and the resilience of profit drivers expected to carry into the first half of 2026. In early February 2026, another global investment bank reiterated a Buy and nudged its price target higher, underscoring constructive expectations for net interest income as rate dynamics reprice through the balance sheet and credit performance remains intact. Across this bullish subset, a common thread is that First Horizon National’s adjusted EPS cadence appears set to improve in the near term, with the first-quarter 2026 estimate of 0.495 reflecting a 24.52% year-over-year advance and offering room for incremental upside if net interest margin and deposit mix trends come in better than feared.

From an earnings-modeling perspective, bullish analysts point to a few concrete factors that support their stance. The fourth-quarter 2025 results delivered both top-line upside, at 888.00 million US dollars, and solid throughput, with EBIT of 354.00 million US dollars and adjusted EPS of 0.52, all while maintaining a 29.50% net profit margin on the quarter. Those metrics imply a clean exit rate into 2026, helping justify projections for a 15.94% year-over-year increase in first-quarter EBIT and a mid-single-digit revenue expansion of 5.56%. Bulls also note that the franchise’s asset sensitivity can be a structural advantage around inflection points in rates: repricing boosts asset yields relatively quickly, and with deposit costs stabilizing, incremental spread capture translates efficiently into earnings. Furthermore, the depth of the Commercial, Consumer and Wealth platform supports steadier fee lines—treasury services, wealth management, and service charges—buffering the volatility of more market-sensitive revenue.

Valuation implications within the bullish narrative tie back to the durability of these drivers. If the company executes in line with the forecast—delivering the 869.23 million US dollars in revenue and 350.45 million US dollars in EBIT—and if credit costs remain well-behaved, the embedded operating leverage should carry adjusted EPS toward or modestly above the 0.495 mark. In that scenario, price targets clustered in the mid-to-high 20s are framed as attainable as the market discounts sustained profitability and potential capital deployment flexibility later in the year. Importantly, this view does not require unusually strong fee performance; it rests primarily on spread income dynamics and expense discipline, suggesting a reasonably visible path to the quarter’s objectives.

In sum, the majority of directional institutional commentary since January 1, 2026 coalesces around a constructive, earnings-led thesis for First Horizon National into the first-quarter print. The bullish case is anchored in a favorable mix shift toward net interest income following March’s curve repricing, evidence of operating leverage and expense control from the late-2025 run rate, and the potential for upside if deposit mix and margin trends outperform conservative assumptions. While neutral or Hold ratings exist in the broader set, the directional calls that explicitly take a side tilt positive, aligning with a consensus that sees both revenue and adjusted EPS expanding year over year this quarter.