First Horizon Corporation · NYSE:FHN
First Horizon — First Horizon National — Q3 2017 Earnings Presentation
23 slides from First Horizon's earnings presentation, Oct 13, 2017
Slide 1: First Horizon National Corporation Third Quarter 2017 Earnings
First Horizon National Corporation Third Quarter 2017 Earnings October 13, 2017
Slide 2: Disclaimers and Other Information
Disclaimers and Other Information 2 Forward - Looking Statements This communication contains certain “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our beliefs, plans, goals, expectations, and estimates. Forward - looking sta
Slide 3: Third Quarter 2017 Highlights
3 Third Quarter 2017 Highlights Good Business Momentum with Strong Loan Growth; Capital Bank Integration on Track All comparisons 3Q17 vs 3Q16, unless otherwise noted. 1 Adjusted EPS, Adjusted ROA, ROTCE and Adjusted ROTCE are Non - GAAP numbers and are reconciled in the appendix. Adjusted numbers e
Slide 4: Financial Results
FINANCIAL RESULTS FIRST HORIZON (at NATIONALCORPORATION,
Slide 5: Consolidated Financial Results
Consolidated Financial Results Strong LQ Growth in Loans and Positive Operating Leverage 5 Numbers may not add to total due to rounding. LQ – Linked quarter. NM - Not Meaningful. 1 Adjusted Fee Income , Revenue, Expense, PPNR, Pre - Tax Income, Taxes, NIAC and EPS are adjusted for notable items as l
Slide 6: Business Segment Performance
Business Segment Performance Regional Banking Continues to Drive Consolidated Earnings 6 ($0.07) ($0.07) ($0.07) ($0.02) ($0.07) $0.02 $0.01 $0.02 $0.07 $0.02 $0.04 $0.02 $0.01 $0.02 $0.02 $0.28 $0.27 $0.27 $0.31 $0.31 3Q16 4Q16 1Q17 2Q17 3Q17 Regional Banking Fixed Income Non-Strategic Corporate $0
Slide 7: NII and NIM Trends Remain Strong
$185 $196 $190 $201 $210 2.80% 2.90% 3.00% 3.10% 3.20% $170 $180 $190 $200 $210 3Q16 4Q16 1Q17 2Q17 3Q17 NII (left axis) NIM (right axis) 7 NII and NIM Trends Remain Strong Driven by Loan Growth And Continued Funding Optimization ▪ NII up 5% LQ, 13% YOY, driven by: ▪ Average total loan growth of 3%
Slide 8: 3Q17 Reported vs Adjusted Financial Results
$ in millions 3Q17 Reported vs Adjusted 2 vs Financial Results Reported Adjusted 2 2Q17 3Q16 2Q17 3Q16 Net Interest Income $209 +4% +10% Fee Income $64 - 1% - 1% Total Revenue $274 +3% +7% Expense $150 $146 - 1% +4% - 4% - 2% PPNR 1 $123 $128 +8% +11% +12% +20% Loan Loss Provision $9 NM * Pre - Tax
Slide 9: Broad-Based Loan Growth in Regional Banking
9 Broad - Based Loan Growth in Regional Banking Loan Balances Up in Multiple Markets and Specialty Areas, Outpacing Industry LQ – Linked Quarter. YOY - Year over Year. Numbers may not add to total due to rounding. 1 H.8 data source: St. Louis Fed. H.8 release provides an estimated weekly aggregate b
Slide 10: Asset Quality Remains Excellent
10 Segment Allowance for Loan Losses $151 $154 $156 $153 $156 $50 $48 $46 $44 $39 0.5% 0.7% 0.9% 1.1% 1.3% 1.5% $100 $140 $180 $220 3Q16 4Q16 1Q17 2Q17 3Q17 Regional Banking Non-Strategic Consolidated Ratio (Right Axis) Net Charge - Offs Asset Quality Remains Excellent S table Credit Trends Reflect
Slide 11: Capital Bank Integration on Track
Capital Bank Integration on Track 11 Integration Progress ▪ Integration team formed with leads from both organizations in all functional areas ▪ Target Operating Models developed for all lines of business and departments ▪ Talent from both organizations identified for top three tiers of organization
Slide 12: Building Long-Term Earnings Power: Bonefish Targets
12 3Q17 Reported (GAAP) Adjusted 3 Long - Term Targets ROTCE 1 12.2% 13.5% 15.0%+ ROA 1 0.99% 1.08% 1.10 – 1.30% CET1 2 10.0% 8.0 – 9.0% NIM 1 3.19% 3.25 – 3.50% NCO / Average Loans 1 0.05% 0.20 - 0.60% Fee Income / Revenue 35% 30 - 40% Efficiency Ratio 74% 66% 60 - 65% 1 ROTCE, ROA, NIM, and NCO /
Slide 13: Building the Foundation for Attractive Long-Term Earnings Power
13 Building the Foundation for Attractive Long - Term Earnings Power ▪ Good business momentum with strong loan growth ▪ Expanding banking relationships with emphasis on economic profit ▪ Continuing to grow balance sheet profitably and prudently ▪ Focusing on expense discipline, improving operating l
Slide 14: Appendix
APPENDIX FIRST HORIZON (at NATIONALCORPORATION, 14
Slide 15: Notable Items
Notable Items 15 1Q 2Q 3Q 1 Pre - tax loss associated with legal matters in the Regional Banking segment ($22.0mm in 2Q16, $2.7mm in 4Q16 and $4.4mm in 3Q17) and Non - Strategic segment ($4.0mm in 2Q16, $4.5mm in 3Q16, $2.0mm in 4Q16 and $3.8mm in 3Q17). 2 Pre - tax expense reversal associated with
Slide 16: Strengthens Hold of #1 Deposit Market Share in Tennessee
16 Strengthens Hold of #1 Deposit Market Share in Tennessee First Tennessee Bank Grew Deposits Faster Than Overall Footprint Market Source: FDIC. Data as of 6.30.17. Numbers and percentages may not add to total due to rounding. Regional markets include only co unties in which First Tennessee operate
Slide 17: 3Q17 Credit Quality Summary by Portfolio
17 3 Q17 Credit Quality Summary by Portfolio Numbers may not add to total due to rounding. Data as of 9.30.2017. NM - Not meaningful. 1 Credit card, Permanent Mortgage, and Other. 2 Credit card, OTC, and Other Consumer. 3 Non - performing loan % excludes held - for - sale loans. 4 Net charge - offs
Slide 18: Solid Core Deposit Base Provides Funding Advantage
18 Solid Core Deposit Base Provides Funding Advantage Asset Sensitivity Remains Intact Data as of 9.30.2017 , unless otherwise noted. Numbers/Percentages may not add to total due to rounding . 1 Deposit beta equals change in average interest rate paid divided by change in average Fed funds rate. ▪ T
Slide 19: Select C&I and CRE Portfolio Metrics
19 Select C&I and CRE Portfolio Metrics Data as of 9.30.2017. Numbers may not add to total due to rounding. CRE retail exposure categories defined in the appendix. CRE: Retail Portfolio CRE: Collateral Type CRE: Geographic Distribution Retail 22% [CATE GORY NAME] [VALU E] TN 27% NC 20% TX 12% Indust
Slide 20: Consumer Portfolio Overview
20 Consumer Portfolio Overview $0.9 $0.6 $0.0 $0.5 $1.0 In Draw In Repayment HELOC Draw vs Repayment Balances Percent of Home Equity Portfolio: Months Left in Draw Period 13% 8% 6% 7% 8% 58% -10% 0% 10% 20% 30% 40% 50% 60% 0-12 13-24 25-36 37-48 49-60 >60 Home Equity Portfolio Characteristics 32.0%
Slide 21: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials 21 Slides in this presentation use non - GAAP information of return on tangible common equity and segment earnings per share. That information is not presented according to generally accepted accounting principles (GAAP ) and is reconciled to GAAP information below.
Slide 22: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials 22 Slides in this presentation use non - GAAP information of FHN adjusted fee income, revenue, noninterest expense, PPNR, pre - tax income, net income available to common, earnings per share, ROTCE, ROA, and efficiency ratio. That information is not presented accord
Slide 23: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials 23 Slides in this presentation use non - GAAP information of Regional Banking adjusted noninterest expense, PPNR, pre - tax income, net income available to common, and efficiency ratio. That information is not presented according to generally accepted accounting pri
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