First Horizon Corporation · NYSE:FHN
First Horizon — First Horizon National — Q1 2016 Earnings Presentation
22 slides from First Horizon's earnings presentation, Apr 15, 2016
Slide 1: Less: interest expense 21,590 20,968 20,125 20,390 21,202 % 2 % Provision for loan
Less: interest expense 21,590 20,968 20,125 20,390 21,202 3 % 2 % Provision for loan losses 3,000 1,000 1,000 2,000 5,000 NM (40 )% Noninterest income: Deposit transactions and cash management 26,837 28,951 28,911 28,430 26,551 (7 )% 1 % Trust services and investment management 6,565 6,873 6,590 7,4
Slide 2: First Horizon National Corporation First Quarter 2016 Earnings
First Horizon National Corporation First Quarter 2016 Earnings April 15, 2016
Slide 3: ▪ Portions of this presentation use non - GAAP financial information. Each of those
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: First Quarter 2016 Accomplishments
3 First Quarter 2016 Accomplishments Strength in Core Businesses Focus on Positive Operating Leverage Capital Deployment Regional Bank: ▪ Pre - Provision Net Revenue up 9% ▪ Average loan growth of 13%, led by increases in specialty lending areas ▪ Average core deposits up 8% Fixed Income: ▪ Average
Slide 5: Financial Results
FINANCIAL RESULTS VA FIRST HORIZON NATIONAL CORPORATION,
Slide 6: 1Q16 Consolidated Financial Results
$19.4 +18% 1Q16 Consolidated Financial Results 5 Net Interest Income Fee Income Expense $ in millions Financial Results 1Q16 $172 Loan Loss Provision $134 $227 $3 $48 1Q16 vs +10% +4% - 40% - 40% NM 4Q15 $167 $132 $244 $1 $47 1Q15 $157 $130 $376 $5 $(77) 4Q15 +3% +2% - 7% NM +2% 1Q15 Actuals ▪ Net i
Slide 7: 1Q16 Segment Highlights
1Q16 Segment Highlights 6 Drivers and Impacts Net Income 1 $ in millions, except EPS 1Q16 Per Share Impact 2 Regional Banking Fixed Income Corporate 1 Non - Strategic Total 1 4Q15 $51 $7 $(8) $(3) $47 1Q15 $48 $7 $(18) $(114) $(77) 1Q16 $46 $7 $(15) $10 $48 $0.19 $0.03 $(0.06) $0.04 $0.20 ▪ Fixed in
Slide 8: Regional Banking Financial Results
Regional Banking Financial Results Strong Year over Year Balance Sheet and NII Growth 7 Net Interest Income Fee Income Expense $ in millions Financial Results 1Q16 $172 Loan Loss Provision $59 $145 $15 1Q16 vs +12% - 2% +7% NM 4Q15 $170 $63 $148 $6 1Q15 $154 $60 $135 $5 4Q15 +2% - 5% - 2% NM 1Q15 Ac
Slide 9: Profitable Growth Opportunities: Regional Banking
$3.38B $3.50B $3.65B $0.76B $0.89B $0.89B $1.88B $2.09B $2.16B $1.24B $1.58B $1.71B $2.11B $2.03B $2.02B $1.44B $1.55B $1.60B $1.44B $1.70B $1.79B $1.04B $1.21B $1.24B 1Q15 4Q15 1Q16 $0 $3 $6 $9 $12 $15 8 Profitable Growth Opportunities: Regional Banking Regional Banking Average Loans by Lending Are
Slide 10: Fixed Income - FTN Financial
Fixed Income - FTN Financial Solid Financial Results in Challenging Market Conditions 1Q16 Daily Fixed Income Product Revenue ▪ Fixed income product average daily revenue (ADR) at $944k in 1Q16, up 11% LQ and up 8% YOY ▪ Fixed income ADR increase driven by higher market volatility, decline in rates
Slide 11: Net Interest Income Sensitivity Impact
10 Net Interest Income Sensitivity Impact 1 Consolidated Net Interest Income and Net Interest Margin Strong NII Growth and Margin Expansion +1.0% $7mm +2.4% +$17mm 0% 1% 2% 3% 4% 5% +25bps +50bps ▪ NII up $15mm or 10% YOY ▪ NIM at 2.88%, up 6 bps LQ and up 14 bps YOY ▪ Loan growth of 15% from 1Q14 t
Slide 12: Asset Quality Trends
11 Allowance to Loans Ratio by Segment 1.36% 1.31% 1.26% 1.19% 1.16% 0.89% 0.91% 0.89% 0.88% 0.92% 4.25% 3.91% 3.83% 3.60% 3.19% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 1Q15 2Q15 3Q15 4Q15 1Q16 Consolidated Regional Banking Non-Strategic Net Charge - Offs Asset Quality Trends 0.00% 0.13% 0.25% 0.38% 0.50% $0
Slide 13: 1Q16 Consolidated Long-Term Targets
12 1Q16 Consolidated Long - Term Targets ROTCE 1 9.4% 15.0%+ ROA 1 0.79% 1.10 – 1.30% CET1 2 10.4% 8.0 – 9.0% NIM 1 2.88% 3.25 – 3.50% NCO / Average Loans 1 0.21% 0.20 - 0.60% Fee Income / Revenue 44% 40 - 50% Efficiency Ratio 74% 60 - 65% 1 ROTCE, ROA, NIM, and NCO / Average Loans are annualized. R
Slide 14: Building Blocks Provide Path to Bonefish Targets
13 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 15: Building a Foundation for Attractive Long-Term Earnings Power
14 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 16: Appendix
APPENDIX VA FIRST HORIZON NATIONAL CORPORATION, 15
Slide 17: Notable Items
Notable Items 16 2015 Notable Item 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 were not
Slide 18: 1Q16 Credit Quality Summary by Portfolio
17 1Q16 Credit Quality Summary by Portfolio Numbers may not add to total due to rounding. Data as of 1Q16. 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 securitizati
Slide 19: Select C&I and CRE Portfolio Metrics
18 Select C&I and CRE Portfolio Metrics Data as of 1Q16. Numbers may not add to total due to rounding. ▪ $10.2B C&I portfolio , diversified by industry ▪ $1.8B CRE portfolio, diversified by geography, comprising 11% of period - end consolidated loans ▪ Commercial (C&I and CRE) net charge - offs were
Slide 20: Consumer Portfolio Overview
19 Core Banking Customers TN 65% CA 7% VA 3% NC 3% GA 3% Other 20% Consumer Portfolio Overview $1.3 $0.7 $0.0 $0.5 $1.0 $1.5 $2.0 In Draw In Repayment HELOC Draw vs Repayment Balances Percent of Home Equity Portfolio: Months Left in Draw Period 16% 20% 10% 6% 6% 42% 0% 5% 10% 15% 20% 25% 30% 35% 40%
Slide 21: Mortgage Repurchase Reserve and Pipeline
($ in millions) 1Q15 2Q15 3Q15 4Q15 1Q16 Beginning Balance $119 $116 $117 $115 $115 Net Realized Losses $(3) $0 $(2) $(0) $(1) Provision $0 $0 $0 $0 $0 Ending Balance $116 $117 $115 $115 $114 $0 $100 $200 1Q15 2Q15 3Q15 4Q15 1Q16 GSE New Requests Other New Requests Resolved Pipeline 20 Agency & Non
Slide 22: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials 21 Slides in this presentation use non - GAAP information of return on tangible common equity, adjusted expense and adjusted net income available to common. That information is not presented according to generally accepted accounting principles (GAAP ) and is reconc
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