- First Horizon had a strong core earnings result in the third quarter, with double-digit outperformance on pre-provision profits and lower provisioning, but NIM and expense guidance were soft.
- The Street may have been too hasty in the negative reaction to guidance, as management is only just beginning to optimize Iberiabank's deposit and cost base, and lending is healthy.
- Management has to show improved credit quality over the last cycle, as well as improved profitability, to get a better valuation, and both will take time to establish.
- I continue to believe that First Horizon is materially undervalued at today's price.
For further details see:
Messy Initial Results Should Not Obscure The Long-Term Value At First Horizon