- First Horizon's fourth quarter outperformance was driven largely by lower credit costs, but the 5% core pre-provision profit beat was still welcome, as were the improved credit metrics.
- Near-term guidance is still pressured by a tough spread environment and increasing charge-offs, but the bank's capital and reserve position are fine.
- As credit worries ease, attention should shift toward First Horizon's growth and margin opportunities; this is definitely a "show me" story, but First Horizon has a credible plan in place.
- As the market becomes more comfortable with the credit, growth, and margin outlook, I believe there's upside into the high-teens and long-term annualized potential in the double-digits.
For further details see:
First Horizon Still Undervalued With Wall Street In Show Me Mode