First Horizon Corporation · NYSE:FHN
First Horizon — First Horizon National — Debt Investor Presentation (October 2015)
27 slides from First Horizon's debt investor presentation, Oct 23, 2015
Slide 1: First Horizon National Corporation Debt Investor Presentation
First Horizon National Corporation Debt Investor Presentation October 20, 2015
Slide 2: Non-GAAP and forward-looking statements
2 Certain measures are included in this presentation are “non - GAAP”, meaning (under U.S. financial reporting rules) they are not presented in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and also are not codified in U.S. ban king regulations currently applicable to
Slide 3: Key Credit Investment Highlights
Key Credit Investment Highlights ▪ FHN is the 35th largest publicly traded bank holding company in the U.S. with $25B of assets, $19B of deposits, and a $3.3B market capitalization as of 9/30/15 1 ▪ First Tennessee Bank National Association was founded in 1864 and has the leading deposit market shar
Slide 4: Strong First Horizon Management Team
Strong First Horizon Management Team ▪ Chairman, President & CEO of First Horizon and First Tennessee ▪ CFO of First Horizon and First Tennessee from May 2007 - September 2008 ▪ From 2000 - May 2007, served in various positions at Regions Financial and its subsidiary Regions Bank, including as Senio
Slide 5: Higher Year-Over-Year Stock Price Appreciation Than Over 75% of US Banks
Higher Year - Over - Year Stock Price Appreciation Than Over 75% of US Banks >$10B in Assets Market Continues to View FHN as a Strong Investment -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 9/30/14 12/31/14 3/31/15 6/30/15 9/30/15 First Horizon KBW Bank Index S&P 500 5 +15% - 2% Data as of 3Q15, unless ot
Slide 6: Corporate Structure Reflects Strategic Focus
6 Corporate Structure Reflects Strategic Focus First Horizon National Corporation (FHNC) Fixed Income (FTN Financial) Regional Banking (First Tennessee Bank) Corporate Non - Strategic First Tennessee Bank National Association (FTBNA) Bank Holding Company Primary Subsidiary Segments ▪ FTBNA comprises
Slide 7: First Tennessee Bank: Differentiated Banking Franchise
First Tennessee Bank: Differentiated Banking Franchise First Tennessee Overview Loans Deposits Wealth Assets Under Advisement Branches ATMs 7 $14 billion $17 billion $25 billion 174 380 ▪ First Tennessee Bank was founded in 1864 and currently has the 14 th oldest active national bank charter ▪ First
Slide 8: FTN Financial: Unique Business Model with Strong Returns
FTN Financial: Unique Business Model with Strong Returns 8 Geographic Distribution of Domestic Clients $0mm $1mm $2mm $3mm $0mm $200mm $400mm $600mm $800mm 2008 2009 2010 2011¹ 2012 2013 2014¹ 3Q15 Annualized Revenue (left axis) Expense (left axis) ADR (right axis) FTN Financial Revenue and Expense
Slide 9: Regional Banking Financial Results
Regional Banking Financial Results Solid Year over Year Balance Sheet and NII Growth 9 Net Interest Income Fee Income Expense $ in millions Financial Results 3Q15 $165 Loan Loss Provision $63 $136 $7 3Q15 vs +7% - 2% * NM 2Q15 $166 $66 $144 $17 3Q14 $154 $64 $136 $2 2Q15 * - 5% - 6% - 61% 3Q14 Actua
Slide 10: Diverse Revenue Streams
Diverse Revenue Streams Revenue Breakdown ▪ FHN’s fee income to total revenue is 43% in 3Q15 versus the 2Q15 peer median of 32% 1 ▪ FTN Financial is a significant differentiator versus peers on fee income ▪ FHN is currently more asset sensitive than most peers ▪ Average floating rate loans comprise
Slide 11: Economic Profit Focus Delivering Tangible Results
Front - li ne/ F i e l d M a n a g e m ent/Exe c ut i ve Economic Profit Focus Delivering Tangible Results Using Economic Profit Data to Optimize Business Mix Timeline: ▪ 2013 – Identified need for impactful, action - oriented profitability reporting and accompanying tools ▪ Mid - 2014 – Initial com
Slide 12: Preparing for Rise in Interest Rates: Asset Sensitive Balance Sheet
29% 5% 66% 12 Preparing for Rise in Interest Rates: Factors Leading to an Asset Sensitive Balance Sheet ▪ Loan portfolio comprised of 67% floating rate loans ▪ Approximately 8% of floating rate commercial loans have in - the - money floors 1 ▪ ~70% of floating rate loans are tied to LIBOR ▪ Securiti
Slide 13: Balance Sheet Positioned to Benefit from Rising Rates
13 ▪ Leading deposit market share in Tennessee 1 ▪ Granular deposit base ▪ 47% consumer vs 53% commercial deposits ▪ Not bound by Liquidity Coverage Ratio ▪ Increased focus on pricing analytic tools ▪ Flexibility to adjust asset sensitivity profile as balance sheet needs change ▪ Exploring initiativ
Slide 14: Successfully Implementing Efficiency Initiatives
$1,039mm $815mm 3Q12 Annualized 3Q15 Annualized 14 Successfully Implementing Efficiency Initiatives Numbers/percentages may not add to total due to rounding. 1 Peer data is from SNL Financial. The 16% peer increase is from 2Q12 to 2Q15. FHN’s 21% decrease is from 3Q12 to 3Q15. Peers d efi ned in app
Slide 15: Solid Reserve Position
15 Solid Reserve Position Reserves / Loans 0.5% 0.7% 0.9% 1.1% 1.3% 1.5% 1.7% 3Q14 4Q14 1Q15 2Q15 3Q15 FHN Peer Median¹ ▪ Consolidated allowance to loans ratio of 1.26% in 3Q15 compared to the 2Q15 peer median of 1.03% 1 ▪ Non - Strategic allowance to loans ratio of 3.83% ▪ Net charge - offs and pro
Slide 16: Optimizing Portfolio Mix to Prudently Manage Profitability
Optimizing Portfolio Mix to Prudently Manage Profitability FHN Loan Composition 31% 24% 21% 17% 13% 69% 76% 79% 83% 87% $0B $3B $6B $9B $12B $15B $18B 3Q11 3Q12 3Q13 3Q14 3Q15 Core Businesses¹ Non-Strategic 16 Continued Wind - Down of Non - Strategic Loans ▪ Transformational progress made over last
Slide 17: Securities Portfolio Overview
Gov't Agencies 95% States/ Municipalities 0.4% Other² 5% Securities to Total Assets 17 Numbers may not add to total due to rounding. Data as of 3Q15, unless otherwise noted. 1 Duration is estimated as of 9.30.15. 2 Other is primarily composed of FHLB and Federal Reserve Bank stock. Not included in d
Slide 18: Strong Deposit Market Share
$109mm $92mm $74mm $50mm FHN STI RF Average of All Others Strong Deposit Market Share Deposit Composition 69% 69% 69% 69% 70% 3% 3% 4% 3% 2% 28% 28% 27% 29% 29% $0B $5B $10B $15B $20B 3Q11 3Q12 3Q13 3Q14 3Q15 Interest Bearing CDs > $100k Non-Interest Bearing 18 ▪ First Tennessee has the leading depo
Slide 19: Reduced Reliance on Wholesale Funding
▪ Core deposits are the primary source of funding ▪ Attractive and stable low - cost funding mix ▪ FHLB advances are overnight ▪ Fed Funds & Repos are primarily composed of customer accounts ▪ FHN maintains a contingency funding plan that may be executed should unexpected difficulties arise in acces
Slide 20: Outstanding Long-Term Debt and Preferred Stock
Outstanding Long - Term Debt and Preferred Stock 20 1 Principal Outstanding may not align with book value due effects of hedging interest rate risk. 2 Floor of 3.75%. Issuance Coupon Rate Callable Date Maturity Principal Outstanding FTBNA Senior Debt¹ 11/21/14 2.95% 11/1/19 12/1/19 $400mm Sub Debt¹
Slide 21: Strong Capital Position
Strong Capital Position Holding Company Capital 1 Bank Level Capital 1,2 10.8% 6.5% 12.2% 8.0% 13.4% 10.0% 3Q15 FHN Basel III Well- Capitalized 21 ▪ With 10.8% Common Equity Tier 1, 12.2% Tier 1, and 13.4% Total Capital, FHN’s capitalization significantly exceeds Basel III standards ▪ Similarly, FTB
Slide 22: Successfully Executing on Key Priorities
Successfully Executing on Key Priorities 22 Building a Foundation for Attractive Long - Term Earnings Power ▪ Proven execution capabilities ▪ Unique size, scope, and strengths ▪ Focused on efficiency, productivity, economic profitability, and growth opportunities ▪ Breadth and depth of talent that w
Slide 23: Appendix
APPENDIX 23
Slide 24: 3Q15 Credit Quality Summary by Portfolio
24 3Q15 Credit Quality Summary by Portfolio Numbers may not add to total due to rounding. Data as of 3Q15. NM: Not meaningful. 1 Credit card, Permanent Mortgage, and Other. 2 Credit card, OTC, and Other Consumer. 3 Net charge - offs are annualized. 4 Exercised clean - up calls on jumbo securitizatio
Slide 25: C&I and CRE Portfolio Detail
Construction 29% Land 3% Mini - Perm/Non - Construction 67% 25 C&I and CRE Portfolio Detail $1.0 $1.2 $1.6 $1.8 $1.4 $0.9 $0.9 $1.0 $1.6 $1.4 $0.0 $0.5 $1.0 $1.5 $2.0 3Q14 4Q14 1Q15 2Q15 3Q15 Period End Average ▪ $9.6B C&I portfolio , diversified by industry, managed primarily in Regional Banking ▪
Slide 26: Consumer Portfolio Overview
26 Core Banking Customers TN 63% CA 7% VA 3% GA 3% NC 3% Other 21% Consumer Portfolio Overview $1.5 $0.7 $0.0 $0.5 $1.0 $1.5 $2.0 In Draw In Repayment HELOC Draw vs Repayment Balances Percent of Home Equity Portfolio: Months Left in Draw Period 17% 20% 13% 7% 6% 37% 0% 5% 10% 15% 20% 25% 30% 35% 40%
Slide 27: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials 27 Slides in this presentation use non - GAAP information of return on tangible common equity and noninterest expense. That information is not presented according to generally accepted accounting principles (GAAP ) and is reconciled to GAAP information below. Number
First Horizon National — Debt Investor Presentation (October 2015) on 6ix