First Horizon Corporation reported a $94 million net loss available to common shareholders for the third quarter of 2026, as reclassifying mortgages for a pending sale drove most of the quarter’s notable items. The bank’s diluted loss was $0.20 per share. Its income statement also recorded a $473 million loss related to the transaction.
First Horizon said the accounting change for selected mortgages designated for sale accounted for most of its notable items. Those items affected results by $0.73 per share, or $347 million after tax. Adjusted diluted earnings were $0.53 per share, a non-GAAP measure. That figure was one cent below the second quarter’s $0.54 and two cents above the year-earlier quarter’s $0.51. The company labels adjusted earnings as non-GAAP and provides a reconciliation to GAAP results.
The bank said it began evaluating a sale of selected, lower-yielding consumer mortgages during the quarter and reached an agreement in early October. The agreement covers about $4.5 billion of selected consumer mortgages. First Horizon said the planned sale is intended to align its balance sheet with its growth priorities. The company expects it to add to future earnings and provide more flexibility for lending.
At Sept. 30, loans and leases totaled $59.8 billion, down $5.5 billion from the prior quarter. Consumer real estate balances declined $4.6 billion, a change the company linked to the mortgage reclassification. Average deposits increased $1.8 billion from the second quarter to $68.6 billion. Chairman, President and CEO Bryan Jordan said average client deposits grew by $1.3 billion. Period-end deposits were $67.7 billion, down $372 million from the previous quarter.
First Horizon’s preliminary common equity Tier 1 ratio was 10.3% at quarter-end, compared with 10.5% in the second quarter. The bank attributed the decline mainly to notable items, particularly the mortgage reclassification. It expects the mortgage sale to settle early in the fourth quarter.
