First Horizon Corporation · NYSE:FHN
First Horizon — First Horizon National — Investor Day (November 2018)
27 slides from First Horizon's investor day presentation, Nov 6, 2018
Slide 1: Proven | Focused | Better
Proven | Focused | Better Bryan Jordan | CEO
Slide 2: Non-GAAP and forward-looking statements disclaimer
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. Annualized, pro forma, projected and es
Slide 3: Proven success, Focused strategy, Better opportunities
Proven success Focused strategy Better opportunities Proven 3
Slide 4: Building From a Position Of Strength
Building From a Position Of Strength 2018 Expansion Recovery Growth Profitability Credit Crisis Soundness 2008 Proven 4
Slide 5: We do what we say we will do
We do what we say we will do Proven 5
Slide 6: Capital Bank Integration Efforts Were Significant
Capital Bank Integration Efforts Were Significant 572K new clients 1,300 team members involved 23,000 335 test scripts ambassadors 30K 210K proactive calls to clients training hours 700 vendors exited branch 51 consolidations Proven 6
Slide 7: 2018 efforts position us well for 2019
Successfully integrate Capital Bank 2018 efforts position Deliver merger cost saves us well for 2019 Build merger revenue synergies Strengthen the balance sheet Proven 7
Slide 8: We Are Exceeding Our Bonefish Financial Targets
17%+ RETURN ON TANGIBLE COMMON EQUITY 1 We Are Exceeding Our Bonefish Financial Targets 1.20%+ RETURN ON ASSETS 1 Proven For footnoted items, refer to slide 24 for additional information. 8
Slide 9: We Have Profitably Grown Our Balance Sheet
We Have Profitably Grown Our Balance Sheet Loans Deposits $27.3 $7.3B 6% Added Loans 9% CAGR from Capital Bank CAGR $30.8 $16.6 $15.3 $8.1B Added Deposits from Capital Bank 3Q13 3Q18 3Q13 3Q18 Proven 3Q13 and 3Q18 average balances. CAGRs calculated from 2013 and 2017 average balances. 9
Slide 10: Total Loan Portfolio Mix
Total Loan Portfolio Mix 3Q13 3Q18 We have shifted the loan 33% 27% portfolio toward more 37% 40% economically profitable Specialty Banking areas 30% 33% Consumer Commercial Specialty Proven Reflects average loan balances. 10
Slide 11: Our deposit base has expanded into higher growth markets
Total Deposit Mix 2013 2018 3% 3% 5% Our deposit base has 15% expanded into higher growth markets 77% 97% Tennessee North Carolina Florida Rest of US Proven Reflects period-end balance as of 2Q13 and 2Q18, respectively. Source: FDIC. 11
Slide 12: We deployed capital effectively
10% 23% OF COMPANY @ DISCOUNT TO REPURCHASED1 CURRENT PRICE1 We deployed capital effectively 7 $161mm SUCCESSFUL VISA B SHARE ACQUISITIONS MONETIZATION 2 Proven For footnoted items, refer to slide 24 for additional information. 12
Slide 13: We created shareholder value
Five Year Total Shareholder Return1 FHN 60% KRX 48% We created EPS Quarterly Dividends shareholder value $1.80 +140% $0.12 $1.41 +22% CAGR $0.05 $0.53 ($0.15) 3Q13 3Q18 3Q13 YTD 3Q18 YTD Reported Adjusted2 Proven YTD EPS is annualized. For footnoted items, refer to slide 24 for additional informatio
Slide 14: We play to our strengths
We play to our strengths Focused 14
Slide 15: Specialization is our advantage
Specialization is our advantage Focused 15
Slide 16: Our success is a matter of business model
Our success is a matter of business model Focused 16
Slide 17: High Quality Lending Portfolio
High Quality Lending Portfolio Consumer Real Estate 24% We have a Commercial & lower risk model Other Consumer Industrial (C&I) 2% 59% Commericial Real Estate (CRE) 15% Better Reflects average balances as of 3Q18. 17
Slide 18: Investment Grade Equivalent Commercial Loans
Investment Grade Equivalent Commercial Loans 38% We have a 18% lower risk model 20% 3Q13 3Q18 Better Reflects period-end balances. Investment grade equivalent refers to PD Grades 1-5. 18
Slide 19: Significantly Lower Stressed Loss Rates
Significantly Lower Stressed Loss Rates1 We have a 9 Quarter Cumulative FHN 2.9% lower risk model Loss Rates DFAST Peers 6.4% Better For footnoted item, refer to slide 24 for additional information. 19
Slide 20: We have better opportunities
82% of FHN Deposits in Markets with Top 5 134% Share Specialty Banking Loan Growth Over Past 5 Years We have better opportunities $730B Size of NC, SC, and South Florida Deposit 1.9x Expected Population Markets Growth in Our Newer Markets vs. US as a Whole1 Better For footnoted item, refer to slide
Slide 21: Strategic Priorities
Dominate Tennessee Profitably Grow Key Markets and Specialty Businesses Strategic Priorities Transform the Customer Experience Optimize the Expense Base Better 21
Slide 22: The FHN Investment Thesis
The FHN Investment Thesis 1 We have delivered results 2 We have a strong return profile 3 We have multiple growth opportunities 4 We have capital to deploy 5 We have a lower risk model Proven 22
Slide 23: Proven | Focused | Better
Proven | Focused | Better Bryan Jordan | CEO
Slide 24: Notes
Notes Slide Note Comment ROTCE, Adjusted ROTCE, and Adjusted ROA are Non-GAAP numbers and are reconciled on slide 26. Adjusted numbers exclude notable items as 8 (1) outlined on slide 25. 23mm shares repurchased from beginning of 2013 to 11.02.18 at volume weighted average price of $12.70. Percentag
Slide 25: Notable Items
Notable Items Pre-tax Pre-tax 3Q13 YTD Notable Items Amount 3Q18 YTD Notable Items Amount Restructuring Charges ($3.0mm) Acquisition Expense ($86.0mm) Legal Accrual ($6.1mm) Gain on property sale $3.3mm Acquisition Expense ($2.9mm) Other Expense (Visa Shares) ($4.1mm) Settlement of a legal matter $1
Slide 26: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials Slides in this presentation use Non-GAAP information of 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 accounting principles (GAAP)
Slide 27: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials Slides in this presentation use Non-GAAP information of adjusted earnings per share. That information is not presented according to generally accepted accounting principles (GAAP) and is reconciled to GAAP information below. (CAGR) 3Q18 3Q13 3Q18 YTD Adjusted Earnin
First Horizon National — Investor Day (November 2018) on 6ix