First Horizon ( NYSE: FHN ) stock is sliding 2% in after-hours trading as Q2 earnings on Tuesday came in mixed, but were helped somewhat by higher net interest income as well as robust credit quality.
Q2 adjusted EPS of $0.34 fell slightly short of the average analyst estimate of $0.35 and down from $0.38 in Q1 and $0.58 in Q2 a year ago.
Q2 revenue of $743M topped the Wall Street consensus of $732.3M and gained from $707M in Q1, but down from $781M in Q2 2021.
"Our results this quarter reflect strong net interest income and continued expense discipline which helped to mitigate the macroeconomic impact on our fixed income and wealth businesses and provision expense,” said CEO and Chairman Bryan Jordan.
And given First Horizon's ( FHN ) "continued strong credit quality and a highly asset-sensitive balance sheet, we are well positioned for the future and remain confident in the power of the proposed transaction with TD Bank Group ( TD ),” Jordan added.
Q2 pre-tax net notable items included TD transaction-related costs of $25M, and IBKC merger -related expense of $13M.
Net interest income came in at $542M, up from $479M in Q1 and $497M in the year-ago period.
Net interest margin climbed to 2.74% in Q2 from 2.37% in Q1 and 2.47% in Q2 2021.
Average loans mounted to $55.6M in Q2 vs. $54.1M in Q1 and $56.8M in Q2 of last year. Q2 average deposits of $71.9M fell from $74.2M in Q1 and $73.2M in Q2 2021.
Provision expense of $30M in Q2 compared with provision credit of $40M and $115M in Q1 and Q2 2021, respectively, driven by the impact of loan growth and revised macroeconomic outlook.
Towards the end of February, TD Bank to acquire First Horizon in all-cash deal of $13.4B .
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First Horizon Q2 earnings miss estimates slightly, but higher net interest income