10 Best Local Bank Stocks To Invest In Now

3. First Horizon Corporation (NYSE:FHN)

Number of Hedge Fund Holders In Q2 2024: 47

First Horizon Corporation (NYSE:FHN) is a Tennessee based bank that provides consumer banking, wealth management, brokerage, and other associated services. The bank’s hypothesis is dependent quite a lot on its net interest income due to its modest alternative income sources. During Q2, First Horizon Corporation (NYSE:FHN) earned $629 million in net interest income, while its non interest income sat at $186 million. The latter figure itself is dependent on market perception of interest rates, since out of this figure, $40 million – or 21.5% – came through fixed assets. These assets dropped in value in H1 2024 as the market shifted its Fed interest rate cut expectations forward. First Horizon Corporation (NYSE:FHN)’s dependence on NII made a 3% share price drop following its Q2 earnings unsurprising, as the bank cut its 2024 guidance for metric. Now, it expects 2024 NII to range between 0% to -2%, down from an earlier 1% to 4% growth, and the cut came at a time when First Horizon Corporation (NYSE:FHN)’s net income dropped by 38% annually in Q2. This further worried investors about costs increasing at a time when income was dropping.

Scout Investments mentioned First Horizon Corporation (NYSE:FHN) in its Q4 2023 investor letter. Here is what the fund said:

“First Horizon was the third-largest contributor. This bank holding company rose as the industry rallied due to the investor sentiment shift toward a soft economic landing or continued growth. A soft economic landing, should it occur, means that banks are likely to experience fewer loan losses than in a recession and steadier interest rate margins if extreme interest rate volatility is dampened.”