First Horizon agrees to sell about $4.5 billion of lower-yielding mortgages

First Horizon disclosed on Oct. 15 that it had agreed in early October to sell approximately $4.5 billion of selected lower-yielding consumer mortgages. The agreement is a balance-sheet action announced with the bank’s third-quarter results, not a new mortgage offer or a sale of every mortgage the bank holds. Source.

An agreement, with inconsistent settlement wording

The opening of the earnings release filed with the Securities and Exchange Commission says First Horizon began evaluating the sale during the third quarter and entered an agreement in early October. That passage says settlement was expected early in the fourth quarter.

However, footnote 11 in the same release says the transaction closed early in the fourth quarter. Those statements do not consistently describe whether settlement had occurred when the release was issued. This article reports the disclosed agreement without treating either passage as a separately verified completion date. Reuters’ Oct. 15 report also describes a deal to sell the mortgages.

How the portfolio affected reported earnings

First Horizon reported a third-quarter loss available to common shareholders of $94 million, or 20 cents per share. It separately reported adjusted earnings of 53 cents per share, excluding notable items. The company said those notable items totaled $347 million after tax, or 73 cents per share, and were primarily connected with moving the targeted mortgages into the held-for-sale category.

The release’s detailed table identifies a $473 million pretax loss on the pending mortgage sale. Its footnote says this includes valuation adjustments and transaction costs. That pretax line is not the same measure as the after-tax total of notable items, and the adjusted per-share result should not be presented as the reported profit.

Reclassification also helps explain the bank’s period-end loan figures. The release says consumer real-estate balances declined by $4.6 billion, driven by moving certain mortgage loans into held for sale. That accounting movement should not be read simply as borrowers paying off $4.6 billion during the quarter.

What management expects

Management said the sale would support future earnings and give the balance sheet more flexibility for loan growth. Those are the company’s expectations, not established results from a completed future reporting period. The disclosure does not establish lower rates, lower payments or another specific benefit for the borrowers whose loans are included.

A portfolio’s face amount is also different from the cash purchase price. This report does not infer a discount, average coupon or buyer from the approximately $4.5 billion figure. Such terms require their own verified disclosure rather than arithmetic applied to the headline amount.

Takeaway for lenders and servicing professionals

The news is First Horizon’s selected-portfolio sale agreement and the related third-quarter accounting impact. Keep the agreement, the held-for-sale transfer, reported earnings and adjusted earnings separate. The conflicting settlement language remains an explicit source limitation, not a reason to supply an invented transaction date.

Sources

First Horizon Oct. 15, 2026 earnings release filed with the SEC.

Cover: First Horizon National Corporation logo (2020), a public-domain text logo; trademark rights remain with its owner. Editorial identification only. Provenance and rights.

Watch: the verified facts in 15 seconds

Transcript (on-screen text; original instrumental music, no narration): First Horizon discloses a $4.5bn mortgage sale agreement; Early October agreement: ~$4.5bn selected lower-yielding consumer mortgages; [Diagram] Portfolio to Held for sale, Q3; $94M Q3 reported common loss; $0.53 Adjusted EPS; Expected earnings benefit is a company projection, not a guarantee.; A loan sale, not new borrower rates.; Source: First Horizon earnings release (SEC), Oct. 15