First Horizon Corporation · NYSE:FHN
First Horizon — First Horizon National — Q2 2018 Earnings Presentation
18 slides from First Horizon's earnings presentation, Jul 17, 2018
Slide 1: First Horizon National Corporation Second Quarter 2018 Earnings
First Horizon National Corporation Second Quarter 2018 Earnings July 17, 2018
Slide 2: . Portions of this presentation use non-GAAP financial information. Each of those portions is
. Portions of this presentation use non-GAAP financial information. Each of those portions is so noted, and a reconciliation of that non-GAAP information to comparable GAAP information is provided in a footnote or in the appendix at the end of this presentation. . This presentation contains forward-
Slide 3: Second Quarter 2018 Highlights
Second Quarter 2018 Highlights Sustainable Earnings Growth, Delivering on Capital Bank Merger Commitments EPS ROTCE1 ROA Reported $0.25 -7% Reported 12.6% -143bps Reported 0.86% -9bps Adjusted1 $0.36 +6% Adjusted1 18.2% +85bps Adjusted1 1.22% +5bps . Accelerating earnings growth . Strong net interes
Slide 4: Financial Results
FINANCIAL RESULTS VA FIRST HORIZON a [NATIONAL CORPORATION
Slide 5: Financial Results
Financial Results Actuals vs Adjusted1 vs Financial Results 2Q18 Actuals Adjusted1 $ in millions except per share data 1 . Solid results reflect: Actuals Adjusted 1Q18 2Q17 1Q18 2Q17 Net Interest Income $311 $311 +3% +55% +3% +55% . Adjusted EPS up 6% LQ and Fee Income $128 $128 -6% -% -4% -% 33% YO
Slide 6: Successful Execution on Capital Bank Merger Priorities
Successful Execution on Capital Bank Merger Priorities Improved EPS Accretion From Higher Cost Savings and Revenue Synergies . Current earnings accretion estimate more than Current 2019 Earnings Accretion Estimate 2x Original 2x original announcement Current Estimate . Cost savings of $12mm achieved
Slide 7: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin Strong Performance Driven by Multiple Factors Loan Yield Betas Have Outpaced Deposit Betas . NIM expansion from 2.92% in 1Q17 to 3.53% in 6.00% 2Q18 driven by: 71% Loan Beta vs 32% Deposit Beta 4.79% 5.00% . Balance sheet growth 4.00% 3.65% . Net benefit f
Slide 8: Building Higher Return Balance Sheet
Building Higher Return Balance Sheet Economic Profit Focus Driving Improved Loan Portfolio Mix . Strong growth in highly profitable specialty lending areas, especially Loans to Mortgage Companies . Tennessee markets steady with solid growth in Middle-Tennessee . Capital Bank markets have strong post
Slide 9: Asset Quality
Asset Quality Stable Credit Trends Reflect Strong Underwriting Discipline . Credit quality environment remains stable Asset Quality Highlights . Net charge-offs at $2mm in 2Q18 ($ in millions) 2Q17 3Q17 4Q17 1Q18 2Q18 . 32% decline in criticized loans mainly from upgrade of ~$310mm of TRUPs loans Ch
Slide 10: Well-Positioned For Consistent Top-Quartile Returns
Well-Positioned For Consistent Top-Quartile Returns Strong Momentum and Current Tailwinds Are Positive ROTCE1 ROA Efficiency Ratio Below 60%2 17%-19%2 1.25%-1.45%2 75.9% 72.3% 17.4% 18.2% 65.1% 1.17% 1.22% 14.1% 62.2% 12.6% 0.95% 54.9% 54.9% 10.6% 0.87% 0.86% 2016 1Q18 2Q18 2016 1Q18 2Q18 2016 2Q18
Slide 11: FHN Key Priorities
FHN Key Priorities Building Momentum . Delivering earnings accretion from CBF cost saves and revenue synergies . Maintaining strong performance across TN and specialty businesses . Building momentum in Carolinas and Florida markets . Enhancing relationships to drive customer acquisition and retentio
Slide 12: Appendix
APPENDIX 4 FIRST HORIZON [NATIONAL CORPORATION
Slide 13: Notable Items
NOTABLE ITEMS Pre-Tax Pre-Tax 2017 2018 Amount1 Amount1 Acquisition Expense ($31.4mm) 1Q None Gain on property sale $3.3mm Mortgage Repurchase Reserve Release $20.0mm Acquisition Expense ($43.2mm) Acquisition Expense ($6.4mm) 2Q Effective tax rate adjustment associated with reversal of a capital los
Slide 14: 2Q18 Credit Quality Summary by Portfolio
2Q18 Credit Quality Summary by Portfolio Regional BankingCorporate5 Non-Strategic FHNC Commercial Commercial HE & Permanent HE & Permanent ($ in millions) (C&I & CRE Other1 Subtotal (C&I & Other2 Total HELOC Mortgage HELOC Mortgage Other) Other) Period End Loans $16,020 $4,136 $5,734 $653 $26,543 $4
Slide 15: Select C&I and CRE Portfolio Metrics
Select C&I and CRE Portfolio Metrics 2Q18 Average Regional Bank Commercial Loans C&I: Loans to Mortgage Companies Energy, 1% ($ in billions) Correspondent, 2% Healthcare, 4% $2.4 Franchise Finance, 4% $2.1 $2.1 Corporate, 6% $2.0 $1.9 $1.9 $1.9 $1.8 $1.5 $1.6 $1.5 Loans to Mortgage $1.3 Commercial,
Slide 16: Consumer Portfolio & Non-Strategic Overview
Consumer Portfolio & Non-Strategic Overview Percent of Home Equity Portfolio: HELOC Draw vs Repayment Balances Months Left in Draw Period 70% 60% 62% $1.2B 50% 40% 30% $0.5B 20% 10% 8% 6% 7% 8% 8% 0% In Draw In Repayment 0-12 13-24 25-36 37-48 49-60 >60 Non-Strategic Consumer Real Estate Run-Off Mor
Slide 17: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials Slides in this presentation use non-GAAP information of adjusted fee income, adjusted revenue, adjusted noninterest expense, adjusted pre-tax income, adjusted net income available to common, and adjusted earnings per share. That information is not presented accordin
Slide 18: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials Slides in this presentation use non-GAAP information of adjusted efficiency ratio, return on tangible common equity, adjusted return on tangible common equity, and adjusted return on average assets. That information is not presented according to generally accepted a
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