First Horizon Corp., a Memphis, Tenn.-based financial services company, Wednesday reported fourth-quarter net profits of $258 million, or 45 cents per share, essentially unchanged from the third quarter.
The results were well below analysts expectations of 57 cents per share, as estimated by Jeffries Financial Group.
The quarterly results were reduced by a net $34 million after taxes, or 6 cents per share, of notable items that include merger expenses related to First Horizon’s acquisition of IberiaBank Corp. (IBKC) and planned merger with TD Bank Group. Excluding notable items, the adjusted fourth-quarter net income was $293 million, or 51 cents per share, up from $252 million, or 44 cents per share, in the third quarter.
Fourth quarter pre-tax net notable items include TD Bank transaction-related costs of $31 million, and IBKC merger-related expenses of $4 million. Other notable items include a $1 million additional gain on the sale of its title services business, the company said.
For the full year of 2022, the company reported adjusted net income of $994 million, or $1.68 per share, down from $1.19 billion, or $2.07 per share, a year earlier. The full-year results also missed analysts expectations of $1.74 per share.
“Our results for the quarter and year reflect the strength of our markets and the continued momentum of our attractive business mix,” Chairman & CEO Bryan Jordan said. “Amid global uncertainty and a challenging macroeconomic landscape, we delivered exceptional net interest income, net interest margin, strong loan growth, and successfully achieved our annualized net cost save target (related to the IBKC merger) of $200 million.”
For the fourth quarter, First Horizon reported total revenue of $882 million, up $7 million from the third quarter, mostly on the strength of net interest income (NII). NII in the quarter totaled $709 million, up $47 million, or 7%, despite a $6 million reduction in net merger-related and PPP (Paycheck Protection Program) benefits, the company said.
Core net income rose $53 million, primarily due to higher interest rates, the bank said.
Average loans were up $1.1 billion as an increase in commercial balances and residential real estate was partially offset by a $617 million decrease in loans to mortgage companies, the company said.
First Horizon’s merger with IberiaBank Corp. closed in July 2020. TD Bank announced plans to acquire First Horizon for $13.4 billion in February of last year. First Horizon said Wednesday that TD Bank expects the deal to close in the first half of its 2023 fiscal year, subject to regulatory approval.
“I am incredibly proud of our associates for their steadfast commitment to drive value for our clients, communities, and shareholders as we look forward to completing the pending transaction with The Toronto-Dominions Bank,” Jordan said.
