First Horizon vs. JPMorgan: A Tale of Expense Discipline and Strategic Growth in 2025

In 2025, banks are navigating a landscape of rising deposit costs, competitive lending markets, and shifting global opportunities. Two institutions—First Horizon (FHN) and JPMorgan Chase (JPM)—are exemplifying contrasting strategies. While First Horizon focuses on U.S. loan growth and razor-sharp expense control, JPMorgan is doubling down on private credit and European equity plays. Let's dissect which approach offers better value for investors.

First Horizon: The Discipline of a Regional Powerhouse

First Horizon's Q2 results underscore a laser focus on PPNR growth and cost discipline. The bank reported a $10 million sequential rise in net interest income (NII), driven by a 2% loan growth in high-yield segments like mortgage warehouse lending (up $689 million) and C&I loans (up $316 million). This growth isn't reckless: credit quality remains strong, with NPLs down four basis points and ACL-to-loans at 1.42%.

The real magic? Expense management. Despite a $4 million sequential rise in total expenses, First Horizon slashed personnel costs by $3 million (via lower incentives) while investing in marketing (outside services up $7 million). This discipline allowed them to lower full-year expense guidance to “flat to 2% growth”—a stark contrast to peers struggling with rising deposit costs (their beta of 72% since Fed cuts shows pricing discipline).

Crucially, management sees a $100 million PPNR uplift over the next few years by deepening client relationships and leveraging tech synergies. With a CET1 ratio at 11% and $500 million remaining on its $1 billion buyback, the stock is positioned for organic growth.

JPMorgan: Betting Big on Private Credit and European Tech

Meanwhile, JPMorgan is playing a global, diversified game. In private credit, the bank is capitalizing on “normalizing but still elevated rates” to fuel wholesale lending growth in its Commercial & Investment Bank (CIB) segment. This aligns with its $2.8 billion credit costs, showing a balance between growth and risk management.

In Europe, JPMorgan is overweighting financials and industrials, betting on infrastructure spending and AI-driven growth. By trimming U.S. tech exposure and adding European industrials (post-May rebalancing), they're positioning for fiscal stimulus in sectors like defense and real estate. This strategy is underpinned by a belief that European equity valuations are more attractive than their U.S. counterparts.

The Showdown: Which Strategy Wins?

First Horizon's Edge:
- Predictability: Its focus on U.S. mortgage and C&I loans offers steady, low-risk growth.
- Expense Control: The $100 million PPNR target is achievable with disciplined spending and client retention.

JPMorgan's Play:
- Global Diversification: Private credit and European equities hedge against U.S. rate risks.
- Tech & Infrastructure: AI and infrastructure trends are secular winners, even if volatile in the short term.

Investment Considerations

• Buy First Horizon if you believe in regional banking resilience and low-risk PPNR growth. The stock's 2.83% dividend yield adds stability.
• Go JPMorgan for global macro plays and exposure to high-yield private markets. Its scale and balance sheet give it an edge in volatile environments.

Risks to Watch

• First Horizon: Deposit costs could rise further if Fed rates stay high, squeezing NIM. CRE loan payoffs might limit near-term growth.
• JPMorgan: European equity exposure faces geopolitical risks (e.g., trade wars), while private credit's illiquidity could hurt in a downturn.

Final Verdict

Both banks are doing what they do best: First Horizon as a regional efficiency machine, JPMorgan as a global growth engine. For conservative investors seeking PPNR clarity, FHN is the pick. For those willing to bet on private markets and European tech, JPM remains the titan.

Invest wisely—pick your battlefield!