First Horizon (FHN): Is a Put Option the Right Move?

First Horizon Corporation is a financial holding company providing diversified financial services through its subsidiaries, principally 'First Horizon Bank'. The 'Bank' offers general banking services, mortgage lending, and fixed income services. 'FHN Financial' provides fixed income and capital markets services. 'First Horizon Advisors' offers insurance brokerage, wealth management, and brokerage services. Its target markets include consumers, businesses, financial institutions, and governments. The company operates through three segments: commercial, consumer & wealth; wholesale; and corporate. The commercial, consumer & wealth segment serves larger and smaller business enterprises, consumers, and private clients. The wholesale banking segment focuses on fixed income/capital markets and mortgage-related services. First Horizon aims to differentiate itself through targeted expansion of consumer and commercial banking, rigorous expense management, exceptional client service, and investment in scalable technology.

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FHN's technical outlook is bearish. The stock price has experienced a significant decline over the past 90 days, falling from a high near $23.00 in late July to approximately $21.21 recently, indicating a strong downtrend. The price remains below its 21-day EMA of 21.37, and key moving averages like the 50-day SMA (22.14) and 200-day SMA (20.65) are showing bearish crossover. Momentum indicators confirm this weakness; the MACD is negative (-0.33), with the MACD line below the signal line, and the RSI is at 49.31, indicating persistent selling pressure. Furthermore, the STOCHk is at 37.35 and STOCHd is at 32.42, both suggesting oversold conditions, but with the overall trend being strongly negative, any bounce is likely to be temporary. Given these signals, FHN is likely to continue its downward trajectory over the next 1-3 months, unless there is a significant shift in market sentiment or a catalyst to reverse the current trend.

First Horizon Corporation (FHN) reported a mixed performance in Q2 2025. Net income available to common shareholders increased to $233 million, or $0.45 per diluted share, compared to $184 million, or $0.34 per diluted share, in Q2 2024. Net interest income rose to $641 million, a $12 million increase year-over-year, driven by lower interest-bearing deposit costs and investment portfolio repositioning, though partially offset by lower loan yields. Noninterest income also saw a slight increase of $3 million, primarily from higher deferred compensation income. However, noninterest expense decreased by $9 million, or 2%, due to lower FDIC special assessment and contract employment expenses. For the six months ended June 30, 2025, net interest income increased by $19 million compared to the same period last year. Despite these gains, the company acknowledges market uncertainties, including inflation, potential recession, and Federal Reserve policy, which could impact future results. The company issued $500 million in senior notes and retired $350 million in senior notes, showing active capital management. The Common Equity Tier 1 ratio was 10.99% at June 30, 2025, compared to 11.05% last year. Management anticipates two additional rate reductions over the remainder of the year, depending on inflation and economic conditions. FHN's Board of Directors has approved a new $1.0 billion common share purchase program to replace the $650 million January 2024 program.

First Horizon's Q2 2025 earnings call struck a moderately bullish tone, highlighting strong balance sheet growth and profitability, though tempered by increased competition. Bryan Jordan stated, 'borrowers have been very resilient' and expressed optimism for improved activity in the latter half of the year. Adjusted EPS was reported at $0.45, a $0.03 increase from the previous quarter, driven by a $10 million increase in net interest income and controlled expenses. The net interest margin compressed slightly to 3.40%, attributed to increased deposit costs. Deposit balances increased by $1.4 billion, largely driven by brokered CDs. The company is maintaining its full-year 2025 revenue guidance, but has 'made an adjustment to lower our expense range to flat to up 2%'. Loan growth was 2% quarter-over-quarter, driven by mortgage warehouse lending, where Hope Dmuchowski expects Q3 balances to be 'at this level or higher'. While credit quality remains strong, with a charge-off ratio of 22 basis points, the bank acknowledges increased competition in both deposit pricing and lending spreads. Overall, First Horizon projects achieving a 15%-plus ROTCE in the next 2-3 years, supported by $100 million or more in PPNR growth from existing businesses.

FHN's financial performance presents a relatively stable picture with mixed signals. Revenue has fluctuated, starting at $1246M in Q1 2024 and reaching $1292M in the most recent quarter (Q3 2025). Gross profit ratios have remained relatively consistent, hovering around 0.60, except for Q3 2025 which reports a ratio of 0, suggesting a possible data anomaly or a significant shift in cost structure that requires further investigation. Operating cash flow has been positive in most quarters, with the latest available data from Q3 2023 showing $698M, indicating the company's ability to generate cash from its operations. Total debt has increased from $3868M in Q1 2024 to $5599M in Q3 2025, reflecting increased leverage. Overall, FHN demonstrates consistent revenue and profitability, but the increasing debt and the data anomaly in the latest gross profit ratio warrant attention. The company's ability to consistently generate positive operating cash flow provides a buffer, but careful monitoring of debt levels is crucial for future financial health.

The company demonstrates a moderately bullish profile, characterized by solid revenue growth and improving profitability. Revenue has consistently increased, indicating strong market demand. The gross margin exhibits stability, suggesting efficient cost management. Return on Equity (ROE) has shown positive movement, signaling enhanced profitability and efficient use of shareholder equity. The Price-to-Earnings (P/E) ratio, while elevated, might be justifiable given the growth trajectory and positive ROE trend. The Debt-to-Equity ratio shows a slight increase, which warrants monitoring, but is counterbalanced by a healthy Current Ratio, implying sufficient liquidity to meet short-term obligations. Overall, the company presents a favorable picture with growth and profitability, though the leverage should be watched closely. The combination of growth and profitability suggests potential for continued positive performance over the next 12 months.