First Horizon Corp Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Rose - Raymond James Financial, Inc. - Analyst : Hey. Good morning, everyone. Thanks for taking my questions. Just wanted to get, Bryan, just some background and color as to where clients stand at this point. I think we're seeing a little bit better loan growth. It was good to see the decent C&I growth this quarter. CRE was down a little bit, but I think we're hearing more and more banks talk about CRE opportunities and especially on the construction side as well. Can you just give us a sense -- I know utilization is flat -- but just where the health of the borrower is and if you are starting to see increased activity? I know you have talked about kind of low-single-digit loan growth next year. So any updates to that as well would be great. Thanks.

Question: Michael Rose - Raymond James Financial, Inc. - Analyst : Great. And maybe just as one follow-up. I think we've seen a lot of progress on the de-regulatory front. You guys still have the CET1 target of 10.5% to 11%. Is there any chance that that could be kind of moved down? And then just crossing that with the fact that the stock has done pretty well here recently, the earn back on the buyback is getting a little longer. Just wanted to gauge your appetite for buybacks as we move forward. Thanks.

Question: Andrew Leischner - Keefe Bruyette & Woods Inc - Analyst : Hey. How's it going? This is Andrew Leischner on for Chris McGratty. I know you've had strong deposit pricing so far this cycle. And I know the core ticked up slightly on the brokered to fund mortgage warehouse. But do you see any incremental deposit repricing opportunities going forward? Thanks.

Question: Andrew Leischner - Keefe Bruyette & Woods Inc - Analyst : Great. Thank you. That was really helpful. And then just one more from me. Creditors remained strong and within your guided range, but can you speak to any verticals or geographies that you're seeing signs of stress in or more concerned about right now? Thank you.

Question: Jon Arfstrom - RBC Capital Markets Inc - Analyst : Hey. Thanks. Good morning. Hope, what kind of expectations do you have for mortgage warehouse balances? You've got a big step-up in period-end versus average, and it's been a really strong business for you. But do you expect this to continue into Q3? Do you expect to retreat in the balances?

Question: Jon Arfstrom - RBC Capital Markets Inc - Analyst : Okay. That's helpful. And then, Hope, for you, maybe just a simple question. The adjusted expense guidance, does that -- does the high end of the revenue range -- if you hit that at 4%, does that equate to hitting 2% of expenses? Or if things are higher on the revenue trend, you might have to adjust that back higher again on expenses?

Question: John McDonald - Truist Securities, Inc. - Analyst : Hi. Good morning. Got a follow-up question on loan growth. What are you seeing in terms of momentum and the potential for loan growth in some of your specialty verticals?

Question: John McDonald - Truist Securities, Inc. - Analyst : Okay. And Tom, maybe on CRE, what's the dynamic you're seeing between new business in your pipelines versus continued pay-downs there?

Question: John Rowan - Barclays - Analyst : Hi. This is [John Rowan] on for Jared. Just quickly on the $600,000 to $700,000 ADR comment, is that what you're expecting for the second half of the year? Or is that like a longer-term target?

Question: John Rowan - Barclays - Analyst : Okay. Great. Thank you for that color. And then I guess, on the $100 million PPNR opportunity that's been talked about, I'm wondering how much of that is on the revenue side versus the expense side? And is that mostly driven by, I guess, would the revenue side be more driven by fees than NII, just some more examples of what's behind that [$100 million] number?

Question: Anthony Elian - JPMorgan Chase & Co - Analyst : Hi. Good morning. Maybe for Hope, you reduced your expense outlook tied to lower commissions. That's left the revenue guide unchanged. Is it fair to say that the mix of revenue growth you expect for this year is now skewed more towards NII rather than fee income compared to a quarter ago?

Question: Anthony Elian - JPMorgan Chase & Co - Analyst : Thank you. And then my follow-up, just on the additional $100 million incremental opportunity for pretax income, do you have all of the -- any incremental tech build infrastructure? Is that all in place to be able to support the incremental opportunities you'd expect from -- you mentioned earlier, increasing loans, getting more deposits, more treasury management. Is that all built out to support the incremental pretax income you'd see? Thank you.

Question: Nicholas Holowko - UBS AG - Analyst : Hi. Good morning. Thanks for taking my question. Appreciated all your thoughts on the buyback and how you're thinking about evaluating the right level of CET1 in the future. But I'm just curious if you have any updated thoughts on the regulatory development of the past couple of months and whether there are any proposals either in the works or that could be on the horizon that might change the way you're thinking about other uses of capital?

Question: Nicholas Holowko - UBS AG - Analyst : Perfect. Appreciate the color. And then just maybe as a follow-up, thinking about the direction of the margin and NII over the next couple of quarters [here], any color you can give on the trends you're seeing on loan repricing and any spread compression that you might be observing in the market? Thank you.