First Horizon Set to Report Q4 Earnings: What's in the Cards?

First Horizon Corporation FHN is slated to report fourth-quarter 2024 results on Jan. 16, before the opening bell. The company’s quarterly revenues and earnings are expected to have increased year over year.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, the results benefited from a rise in net interest income (NII) and non-interest income. Also, an increase in deposits and lower provisions were other positives. However, a rise in expenses and a fall in loan balances were major headwinds.FHN has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average beat being 3.50%.First Horizon Corporation Price and EPS Surprise  First Horizon Corporation price-eps-surprise | First Horizon Corporation QuoteThe Zacks Consensus Estimate for FHN’s fourth-quarter earnings of 38 cents per share has been unchanged in the past seven days. The figure indicates an 18.8% decline from the year-ago reported number.The consensus estimate for revenues is pegged at $822.5 million, indicating a year-over-year rise of 2.8%.Key Factors & Estimates for FHN in Q4Loans & NII: The Federal Reserve cut interest rates by 50 basis points to 4.25-4.5% in the fourth quarter. This, along with the rate cut in September, led funding/deposit costs to stabilize. The Zacks Consensus Estimate for NII is pegged at $623.3 million, indicating a 1% increase on a year-over-year basis.Also, the clarity on the Fed’s rate cut path and the stabilizing macroeconomic backdrop led the lending scenario to improve. Per the Fed’s latest data, the demand for overall loans was solid in the fourth quarter. Thus, FHN is likely to have witnessed a growth in loan demand, which is expected to have supported its average interest-earning asset growth in the fourth quarter.The Zacks Consensus Estimate for average total earning assets of $76.3 billion for the quarter under review indicates a 1% rise from the prior-year quarter’s reported level.Non-Interest Income: The improving consumer spending is likely to have aided the company’s card and digital banking fees. The Zacks Consensus Estimate for service card and digital banking fees is pegged at $19.7 million, indicating a 23% year-over-year increase. The Zacks Consensus Estimate for service charges and fees is pegged at $58.4 million, suggesting a marginal year-over-year rise.The Zacks Consensus Estimate for brokerage trust and insurance revenues is pegged at $39.4 million, implying 9.4% year-over-year growth.The Zacks Consensus Estimate for fixed income is pegged at $53.3 million, indicating a 43.9% increase on a year-over-year basis.Mortgage rates in the fourth quarter of 2024 were close to 6.8%, slightly higher than the 6.2% observed at the end of the third quarter. Despite this, refinancing activities and origination volumes were decent. This is likely to have supported FHN’s mortgage banking revenue growth in the quarter to be reported. The Zacks Consensus Estimate for mortgage banking revenue is pegged at $8.6 million, suggesting a significant rise from the prior-year quarter’s reported figure of $5 million.The Zacks Consensus Estimate for total non-interest income is pegged at $195.6 million, implying a 6.9% jump from the prior-year quarter’s reported figure.Expenses: Rising investment in technology and personnel expenses, as well as higher revenue-driven incentives, are likely to keep expenses high in the near term. While operational efficiencies will help offset some of the expenses, a continued increase in the cost  base will limit bottom-line growth in the quarter-to-be reported.Asset Quality: First Horizon is likely to have set aside a substantial amount of money for potential bad loans, given the expectations of higher for longer interest rate backdrop.The Zacks Consensus Estimate for non-performing assets is pegged at $611.9 million, indicating a 30.6% rise from the prior quarter's reported figure.What the Zacks Model Reveals for FHNOur proven model conclusively predicts an earnings beat for First Horizon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is the case here, as you can see below.You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Earnings ESP: The Earnings ESP for FHN is +3.18%.Zacks Rank: The company currently carries a Zacks Rank of 2.Other Stocks That Warrant a LookA couple of bank stocks that have the right combination of elements to post an earnings beat in their upcoming releases are Truist Financial Corporation TFC and State Street Corporation STT.TFC has an Earnings ESP of +1.45% and a Zacks Rank of 3 at present. The company is slated to report fourth-quarter and 2024 results on Jan. 17.STT is also scheduled to release fourth-quarter and 2024 earnings on Jan. 17. The company has an Earnings ESP of +0.67% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report State Street Corporation (STT): Free Stock Analysis Report First Horizon Corporation (FHN): Free Stock Analysis Report Truist Financial Corporation (TFC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks