First Horizon just dropped its Q3 2026 scorecard and the stock barely flinched. Shares closed at US$22.89, almost flat on the day, even as the quarter flipped from steady profits to a loss with basic earnings per share at US$0.20 in the red and net income excluding extra items at a US$94 million deficit.
That muted 0.11% move comes after the bank outlined a sharp repositioning of its loan book, including the sale of about US$4.5b of low yield mortgages. Management argues this shift should support net interest margin and future returns. Price action says shrug. The fundamentals tell a more complicated story.
Like the idea of First Horizon cleaning up its loan book but uneasy about a quarter that swung to a loss and the muted share reaction? Benchmark this against a list of solid balance sheet and fundamentals stocks (25 results) to see banks and lenders where balance sheet strength and fundamentals are the clear focus.
Q3 2026 Earnings Summary
- Total Revenue (Q3 2026 vs. Q3 2025): US$432 million vs. US$894 million (revenue more than halved year on year)
- Net Income/Loss, Excluding Extra Items (Q3 2026 vs. Q3 2025): loss of US$94 million vs. profit of US$254 million (swung from profit to loss)
- Basic EPS (Q3 2026 vs. Q3 2025): loss of US$0.20 per share vs. earnings of US$0.50 per share (moved from positive to negative)
- Net Interest Margin, NIM (Q3 2026 trailing 12 months vs. Q4 2025 trailing 12 months): 22.4% net profit margin vs. 26.9% net profit margin (profitability margin compressed year on year)
Earnings are one thing, but if you care about valuation you focus on the cash that actually comes in and out of First Horizon over time. On those cash flows alone, First Horizon's stock could be a striking 49% undervalued.
First Horizon’s Revenue Uplift Plan Meets A Tough Quarter
Supporters of First Horizon’s plan focus on a long runway of self help revenue. The bank has set a clear ambition.
"First Horizon is still targeting a multi year, $100m plus pre tax pre provision revenue uplift from deeper commercial relationships, with management now indicating progress of roughly 30% to 50% toward that goal, which can continue to support revenue and PPNR."
Q3 results cut against that upbeat framing. Total revenue almost halved to US$432 million. Net income excluding extra items moved from a US$254 million profit to a US$94 million loss. PPNR momentum is hard to see in a quarter where earnings power reset this sharply.
Margin Pressure And Execution Risk Show Up In Q3
The more cautious narrative questions whether First Horizon can push through this plan while margins stay under strain.
"If the targeted multi year pre tax pre provision uplift from deeper commercial relationships, wealth cross sell and better commercial real estate pricing stalls before management reaches the remaining 50% to 70% of the goal, the expected improvement in revenue and PPNR may not materialise and earnings growth could slow."
Q3 output gives that concern real weight. Revenue and earnings both weakened, the bank reported a loss, and the net profit margin over the trailing period compressed from 26.9% to 22.4%. That mix of thinner profitability and a loss suggests execution risk, funding costs, and repositioning charges are already biting into the uplift plan.
Not everyone reads the same price the same way. → See the higher figure this Narrative lands on, and how it gets there.
Hunt Quiet Disconnects In Plain Sight
First Horizon just showed how a big repositioning quarter can leave the share price almost unmoved. The real opportunity is finding stocks that could be undervalued before the market corrects them.
- Company 1 - 35% below our estimate - uses acquired banks and digital deposit platforms to broaden lending exposure and diversify funding sources.
- Company 2 - 49% below our estimate - expands silver and gold capacity as new mines and integration projects extend operating life and adjust cost lines.
- Company 3 - 23% below our estimate - designs power systems and liquid cooling hardware that data centre builders need for dense AI racks and reduced water use.
Three companies from the same screener. Open every one of the 33 undervalued companies on it →
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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