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# First Horizon Agrees To Sell About $4.5 Billion Of Mortgages At A 10% Discount, Easing Need For A Deposit Deal
- URL: https://www.bullished.co/first-horizon-agrees-to-sell-about-4-5-billion-of-mortgages-at-a-10-discount-easing-need-c0022c8c/
- Published: 2026-10-15T15:06:00.000Z
- Updated: 2026-10-15T15:06:00.000Z
- Description: CEO Bryan Jordan says the sale lowers the loan-to-deposit ratio to roughly 88% and makes a small acquisition "significantly less of a priority."
- Author: Matteo Parrino
- Tags: Earnings, FHN, Industry: Financials

[First Horizon](https://www.bullished.co/tag/fhn/) plans to sell about [$4.5 billion](https://www.sec.gov/Archives/edgar/data/36966/000003696626000178/fhn-20261015.htm?ref=bullished.co) of low-yielding residential mortgages, and Chairman, President and CEO Bryan Jordan said on the bank's third-quarter earnings call Thursday that the sale "in many ways deals with that need" for liquidity that a small deposit-gathering acquisition would have met. Chief Financial Officer Hope Dmuchowski said on the same call that the loans carry a weighted average coupon of 3.85% and are going at an approximate 10% discount all in.

## What management said about the sale

Dmuchowski said the loans are concentrated in the lowest-yielding part of the mortgage book and come with only about $200 million of deposits. The sale is expected to settle early in the fourth quarter, and it moves the loan-to-deposit ratio to roughly 88%.

Management expects the deal to add about 4% to 2027 earnings per share, before any benefit from lending out the proceeds. Dmuchowski also cited an improved return metric, transcribed as "RODSI," of approximately 150 basis points, or 1.5 percentage points.

The near-term plan is to use the cash to pay down wholesale funding and buy short-term floating-rate securities. Jordan said management's working assumption is that about half the $4.5 billion, a little over $2 billion, can go into incremental loans over the next two to three years. He said roughly two-thirds of the benefit should begin in the fourth quarter.

## Acquisition and buybacks

Asked by a Morgan Stanley analyst whether capital now matters less for a deposit-gathering acquisition, Jordan said he had spent the past year discussing the optionality of doing "something small that would create incremental liquidity." He said the sale makes that "significantly less of a priority."

He put customer growth first among capital priorities and buybacks second, with "a little over $660 million of capacity remaining." Dmuchowski said buybacks resume in the fourth quarter. Jordan said the bank is comfortable with common equity capital of 10.25% to 10.5% after the sale.

A UBS analyst asked whether the move says anything about staying independent. Jordan replied that it increases optionality and that the bank is not changing or reducing any optionality for the future.

## The quarter around it

The bank swung to a third-quarter net loss of $83 million, the [Associated Press](https://finance.yahoo.com/markets/stocks/articles/first-horizon-q3-earnings-snapshot-104115905.html?ref=bullished.co) reported, because the mortgages were reclassified as held for sale. The [earnings release](https://www.prnewswire.com/news-releases/first-horizon-corporation-reports-third-quarter-2026-results-and-announces-strategic-balance-sheet-changes-to-support-earnings-and-growth-302909351.html?ref=bullished.co) put notable items at $347 million after tax. Adjusted earnings were $0.53 a share.

Shares were up 3.00% to $23.35 in Thursday trading, according to market data.

Jordan said the sale agreement is signed and settlement is expected early in the fourth quarter, when buybacks resume.

### Sources

- [fhn-20261015](https://www.sec.gov/Archives/edgar/data/36966/000003696626000178/fhn-20261015.htm?ref=bullished.co) — sec.gov
- [First Horizon: Q3 Earnings Snapshot](https://finance.yahoo.com/markets/stocks/articles/first-horizon-q3-earnings-snapshot-104115905.html?ref=bullished.co) — Associated Press
- [Seeking Clues to First Horizon (FHN) Q3 Earnings? A Peek Into Wall Street Projections for Key Metrics](https://finance.yahoo.com/markets/stocks/articles/seeking-clues-first-horizon-fhn-121507739.html?ref=bullished.co) — Yahoo Finance
- [Impostors got past First Horizon's help desk, suits allege | American Banker](https://www.americanbanker.com/news/impostors-got-past-first-horizons-help-desk-suits-allege?ref=bullished.co) — americanbanker.com
- [First Horizon Corporation Reports Third Quarter 2026 Results and Announces Strategic Balance Sheet Changes to Support Earnings and Growth](https://www.prnewswire.com/news-releases/first-horizon-corporation-reports-third-quarter-2026-results-and-announces-strategic-balance-sheet-changes-to-support-earnings-and-growth-302909351.html?ref=bullished.co) — prnewswire.com

### More on First Horizon

- [First Horizon's $473 Million Mortgage Sale Loss Turns A $0.53 Adjusted Quarter Into A $0.20 Loss](https://www.bullished.co/first-horizons-473-million-mortgage-sale-loss-turns-a-0-53-adjusted-quarter-into-a-0-20-a95e2678/)
- [Millennium And Israel Englander Report 5.6% Passive Stake In First Horizon](https://www.bullished.co/millennium-and-israel-englander-report-5-6-passive-stake-in-first-horizon-b57cbc1d/)

[All First Horizon (FHN) coverage →](https://www.bullished.co/tag/fhn/)