First Horizon Corporation · NYSE:FHN
First Horizon — First Horizon National — Q4 2015 Earnings Presentation
28 slides from First Horizon's earnings presentation, Jan 19, 2016
Slide 1: Financial statement table: interest expense, noninterest income and expense
Less: interest expense 20,968 20,125 20,390 21,202 20,398 4 % 3 % 82,685 81,531 1 % Provision for loan losses 1,000 1,000 2,000 5,000 6,000 * (83 )% 9,000 27,000 (67 )% Noninterest income: Deposit transactions and cash management 28,951 28,911 28,430 26,551 29,038 * * 112,843 111,951 1 % Mortgage ba
Slide 2: First Horizon National Corporation Fourth Quarter 2015 Earnings
First Horizon National Corporation Fourth Quarter 2015 Earnings January 19, 2016
Slide 3: Non-GAAP and forward-looking statements
2 ▪ 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 fo
Slide 4: 2015 Accomplishments
3 2015 Accomplishments Building Franchise Value ▪ Increased dividend by 20% in 1Q15 ▪ Closed TrustAtlantic Financial acquisition in 4Q15 ▪ Repurchased $28mm or 2mm shares in 2015; $133mm authorization remaining Non - Strategic Headwind Abating Strong Core Businesses Performance All comparisons are f
Slide 5: Financial Results
FINANCIAL RESULTS VA FIRST HORIZON sh NATIONAL CORPORATION,
Slide 6: Financial Results
$ in millions Financial Results Actuals FY 2014 FY 2015 vs Financial Results 5 Numbers may not add to total due to rounding. * Amount is less than 1% 1 Adjusted Fee Income, Adjusted Expense and Adjusted Net Income Available to Common Shareholders are Non - GAAP numbers and are reco nciled in the app
Slide 7: 2015 Adjusted Results
2015 Adjusted Results Numbers may not add to total due to rounding. 1 Notable items after - tax impact calculated using ~39% incremental tax rate. EPS impacts calculated by dividing the after - tax impact by the 240 million diluted shares outstanding in 4Q15 and 236 million sh ares outstanding in 20
Slide 8: 4Q15 Segment Highlights
4Q15 Segment Highlights 7 Drivers and Impacts Net Income 1 $ in millions, except EPS 4Q15 Per Share Impact 2 Regional Banking Fixed Income Corporate 1 Non - Strategic Total 1 3Q15 $55 $(3) $(2) $8 $59 4Q14 $51 $4 $(13) $5 $47 4Q15 $51 $7 $(8) $(3) $47 $0.21 $0.03 $(0.03) $(0.01) $0.20 ▪ Fixed income
Slide 9: Regional Banking Financial Results
Regional Banking Financial Results Solid Year over Year Balance Sheet and NII Growth 8 ▪ Net interest income growth driven primarily by higher loan balances ▪ Expense increase in 4Q15 primarily related to addition of TrustAtlantic and compensation enhancements; 3Q15 includes allocated benefits from
Slide 10: Profitable Growth Opportunities: Regional Banking
$3.25B $3.39B $3.50B $0.77B $0.75B $0.89B $1.86B $2.02B $2.09B $1.24B $1.39B $1.58B $2.13B $2.02B $2.03B $1.37B $1.53B $1.55B $1.40B $1.58B $1.70B $0.93B $1.41B $1.21B 4Q14 3Q15 4Q15 $0 $3 $6 $9 $12 $15 9 Profitable Growth Opportunities: Regional Banking Regional Banking Average Loans by Lending Are
Slide 11: Fixed Income - FTN Financial
Adjusted Net Income 2 10 Fixed Income - FTN Financial Financial Results Numbers may not add to total due to rounding. 1 2014 expense includes an insurance recovery and 2015 includes litigation expense. See notable items in appendix for further d eta ils. 2 Adjusted Expense and Adjusted Net Income ar
Slide 12: Net Interest Income Sensitivity Impact
11 Net Interest Income Sensitivity Impact 1 Consolidated Net Interest Income and Net Interest Margin Balance Sheet Positioned to Benefit from Rising Rates +1.1% $7mm +2.3% +$16mm +4.8% +$33mm +9.5% +$65mm 0% 2% 4% 6% 8% 10% +25bps +50bps +100bps +200bps ▪ NII up $8mm or 5% year over year 4Q ▪ NIM at
Slide 13: Improving Productivity & Efficiency
12 Improving Productivity & Efficiency 1 Peer data is from SNL Financial. Peer group listed in the appendix. 2 1Q15 to 3Q15 annualized for Peer. FHN excludes ~$4mm gain on Employee Benefit Plan Amendment in 3Q15. This number is Non - GAAP an d is reconciled in the appendix. 3 Notable Items are liste
Slide 14: Asset Quality Trends
13 Non - Performing Assets $0 $100 $200 $300 4Q14 1Q15 2Q15 3Q15 4Q15 NPLs NPLs Held for Sale ORE $300mm Net Charge - Offs Asset Quality Trends Stable to Improving Credit Trends 0.00% 0.13% 0.25% 0.38% 0.50% $0 $5 $10 $15 4Q14 1Q15 2Q15 3Q15 4Q15 NCOs $ Provision $ NCO %¹ $15mm ▪ Net charge - offs o
Slide 15: Consolidated Long-Term Targets: Bonefish Targets
14 4Q15 Consolidated Long - Term Targets ROTCE 1 9.1% 15.0%+ ROA 1 0.78% 1.10 – 1.30% CET1 2 10.5% 8.0 – 9.0% NIM 1 2.82% 3.25 – 3.50% NCO / Average Loans 1 0.04% 0.20 - 0.60% Fee Income / Revenue 44% 40 - 50% Efficiency Ratio 82% 60 - 65% 1 ROTCE, ROA, NIM, and NCO / Average Loans are annualized. R
Slide 16: Building Blocks Provide Path to Bonefish Targets
15 Building Blocks Provide Path to Bonefish Targets Building a Foundation for Long - Term Earnings Power Chart illustrates a quantified path to long - term goals; it contains no forecasts. Current Return/ Earnings Power Increased Fixed Income Activity Target Bonefish Return/ Earnings Power Growth Op
Slide 17: Building a Foundation for Attractive Long-Term Earnings Power
16 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 ▪ Organizational alignment on the path to achieving long - term bonefish prof
Slide 18: Appendix
APPENDIX VA FIRST HORIZON sh NATIONAL CORPORATION, 17
Slide 19: Notable Items
Notable Items 18 2015 Notable Item 2015 Pre - Tax Amount Employee Benefit Plan Amendment $8.3mm Retirement of Trust Preferred Debt $5.8mm 1Q 2Q Settlement with DOJ/HUD $(162.5)mm 3Q Refer to the financial supplement for further variance trend analysis. 1 TrustAtlantic acquisition expense amounts wer
Slide 20: 4Q15 Credit Quality Summary by Portfolio
19 4Q15 Credit Quality Summary by Portfolio Numbers may not add to total due to rounding. Data as of 4Q15. 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 21: Select C&I and CRE Portfolio Metrics
Construction 26% Land 3% Mini - Perm/Non - Construction 71% 20 Select C&I and CRE Portfolio Metrics $1.2 $1.6 $1.8 $1.4 $1.7 $0.9 $1.0 $1.6 $1.4 $1.2 $0.0 $0.5 $1.0 $1.5 $2.0 4Q14 1Q15 2Q15 3Q15 4Q15 Period End Average ▪ $10.4B C&I portfolio , diversified by industry, managed primarily in Regional B
Slide 22: Consumer Portfolio Overview
21 Core Banking Customers TN 64% CA 7% VA 3% GA 3% NC 3% Other 21% Consumer Portfolio Overview $1.4 $0.7 $0.0 $0.5 $1.0 $1.5 $2.0 In Draw In Repayment HELOC Draw vs Repayment Balances Percent of Home Equity Portfolio: Months Left in Draw Period 17% 19% 12% 6% 6% 40% 0% 5% 10% 15% 20% 25% 30% 35% 40%
Slide 23: Agency & Non-Agency Update: Repurchase Reserve
($ in millions) 4Q14 1Q15 2Q15 3Q15 4Q15 Beginning Balance $125 $119 $116 $117 $115 Net Realized Losses $(6) $(3) $0 $(2) $(0) Provision $0 $0 $0 $0 $0 Ending Balance $119 $116 $117 $115 $115 $0 $100 $200 4Q14 1Q15 2Q15 3Q15 4Q15 GSE New Requests Other New Requests Resolved Pipeline 22 Agency & Non
Slide 24: FH Proprietary Securitizations Litigation
FH Proprietary Securitizations Litigation Certificate Breakdown 23 $756mm Numbers/percentages may not add to total due to rounding. Data source: December 2015 Trustee Reports. Cumulative loss does no t n ecessarily determine possible damages. For the first six certificates, FHN is defending two suit
Slide 25: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials 24 Slides in this presentation use non - GAAP information of return on tangible common equity and adjusted fee income, expense, net income available to common and diluted EPS. That information is not presented according to generally accepted accounting principles (G
Slide 26: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials 25 Slides in this presentation use non - GAAP information of adjusted Regional Banking efficiency ratio, fee income, expense, net income available to common and diluted EPS. That information is not presented according to generally accepted accounting principles (GAA
Slide 27: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials 26 Slides in this presentation use non - GAAP information of adjusted fee income, expense, net income available to common and diluted EPS. That information is not presented according to generally accepted accounting principles (GAAP ) and is reconciled to GAAP infor
Slide 28: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials 27 Slides in this presentation use non - GAAP information of adjusted fee income, expense, net income available to common and diluted EPS. That information is not presented according to generally accepted accounting principles (GAAP ) and is reconciled to GAAP infor
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