First Horizon Corporation · NYSE:FHN
First Horizon — First Horizon National — Q3 2016 Earnings Presentation
23 slides from First Horizon's earnings presentation, Oct 14, 2016
Slide 1: Less: interest expense 21,777 21,112 21,590 20,968 20,125 % 8 % Provision for loan
Less: interest expense 21,777 21,112 21,590 20,968 20,125 3 % 8 % Provision for loan losses 4,000 4,000 3,000 1,000 1,000 * NM Noninterest income: Deposit transactions and cash management 27,221 26,991 26,837 28,951 28,911 1 % (6 )% Trust services and investment management 6,885 7,224 6,565 6,873 6,
Slide 2: First Horizon National Corporation Third Quarter 2016 Earnings
First Horizon National Corporation Third Quarter 2016 Earnings October 14, 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: Third Quarter 2016 Accomplishments
3 Third Quarter 2016 Accomplishments Strong Balance Sheet Growth Across Multiple Areas Driving Higher Profitability Strong Balance Sheet Growth Across Multiple Areas Focus on Positive Operating Leverage Regional Bank: ▪ PPNR 3 of $111mm, up 20% ▪ Average loan growth of 18%, led by increases in speci
Slide 5: Financial Results
FINANCIAL RESULTS VA FIRST HORIZON sh NATIONAL CORPORATION,
Slide 6: 3Q16 Consolidated Financial Results
3Q16 Consolidated Financial Results 5 Net Interest Income Fee Income Expense $ in millions Financial Results 3Q16 $185 Loan Loss Provision $149 $234 $4 $63 3Q16 vs +13% +19% +8% NM +7% 2Q16 $176 $146 $227 $4 $57 3Q15 $164 $125 $215 $1 $59 2Q16 +5% +2% +3% * +12% 3Q15 Actuals ▪ Diluted EPS of $0.27 i
Slide 7: Regional Banking Financial Results
Adjusted Expense 2 Regional Banking Financial Results Strong Year - over - Year Balance Sheet, NII and PPNR Growth 6 Net Interest Income Fee Income Expense $ in millions Financial Results 3Q16 $191 $65 $145 3Q16 vs +15% +4% +7% 2Q16 $178 $61 $164 3Q15 $165 $63 $136 2Q16 +7% +6% - 12% 3Q15 Actuals ▪
Slide 8: Profitable Growth Opportunities: Regional Banking
7 Profitable Growth Opportunities: Regional Banking Regional Banking Average Loan Growth by Lending Area LQ – Linked Quarter. YOY - Year over Year. Numbers may not add to total due to rounding. 1 Other includes new specialty lines of Franchise Finance and Specialty Healthcare. 2 Other Specialty incl
Slide 9: Fixed Income - FTN Financial
Fixed Income - FTN Financial Solid Financial Results in Shifting Fixed Income Market 3Q16 Daily Fixed Income Product Revenue ▪ Fixed income product average daily revenue (ADR) remains strong at $922k in 3Q16 vs $1.1mm in 2Q16 ▪ Fixed income ADR LQ decrease driven by lower volatility in latter part o
Slide 10: Net Interest Income and Net Interest Margin
9 Net Interest Income Sensitivity Impact 2 Consolidated Net Interest Income and Net Interest Margin Strong NII Growth and Margin Expansion ▪ NII up 5% LQ, up $22mm or 13% YOY ▪ NIM at 2.96%, up 4 bps LQ and up 11 bps YOY ▪ Average loan growth of 5% LQ and 12% YOY ▪ Average core deposits up 4% LQ and
Slide 11: Asset Quality: Stable Credit Trends
10 Allowance to Loans Ratio by Segment 1.26% 1.19% 1.16% 1.07% 1.03% 0.89% 0.88% 0.92% 0.88% 0.85% 3.83% 3.60% 3.19% 2.97% 2.97% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 3Q15 4Q15 1Q16 2Q16 3Q16 Consolidated Regional Banking Non-Strategic Net Charge - Offs Asset Quality Stable Credit Trends Reflect Strong Unde
Slide 12: Long-Term Targets: Bonefish Targets
11 3Q16 Consolidated Long - Term Targets ROTCE 1 11.9% 15.0%+ ROA 1 0.97% 1.10 – 1.30% CET1 2 9.8% 8.0 – 9.0% NIM 1 2.96% 3.25 – 3.50% NCO / Average Loans 1 0.05% 0.20 - 0.60% Fee Income / Revenue 45% 40 - 50% Efficiency Ratio 70% 60 - 65% 1 ROTCE, ROA, NIM, and NCO / Average Loans are annualized. R
Slide 13: Building Blocks Provide Path to Bonefish Targets
12 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 14: Building a Foundation for Attractive Long-Term Earnings Power
13 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 15: Appendix
APPENDIX VA FIRST HORIZON sh NATIONAL CORPORATION, 14
Slide 16: Notable Items
Notable Items 15 2015 Pre - Tax Amount Employee Benefit Plan Amendment $8.3mm Retirement of Trust Preferred Debt $5.8mm 1Q 2Q 3Q Refer to the financial supplement for further variance trend analysis. 1 Pre - tax loss associated with resolution of legal matters in the Fixed Income segment. 2 Pre - ta
Slide 17: 3Q16 Segment Highlights
3Q16 Segment Highlights 16 Drivers and Impacts Net Income 1 $ in millions, except EPS 3Q16 Per Share Impact 2 Regional Banking Fixed Income Corporate 1 Non - Strategic Total 1 2Q16 $42 $12 $(19) $22 $57 3Q15 $55 $(3) $(2) $9 $59 3Q16 $65 $9 $(16) $4 $63 $0.28 $0.04 $(0.07) $0.02 $0.27 ▪ Fixed income
Slide 18: #1 Deposit Market Share in Tennessee
17 #1 Deposit Market Share in Tennessee First Tennessee Bank Grew Deposits Faster Than Overall Footprint Market Source: FDIC. Data as of 6.30.16. Numbers and percentages may not add to total due to rounding. 1 West Tennessee and East Tennessee markets include $0.5B of deposits in Mississippi and Geo
Slide 19: 3Q16 Credit Quality Summary by Portfolio
18 3Q16 Credit Quality Summary by Portfolio Numbers may not add to total due to rounding. Data as of 3Q16. 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 are an
Slide 20: Select C&I and CRE Portfolio Metrics
19 Select C&I and CRE Portfolio Metrics Data as of 3Q16. Numbers may not add to total due to rounding. ▪ $12.1B C&I portfolio , diversified by industry ▪ $2.1B CRE portfolio, diversified by geography and product type, comprising 11% of period - end consolidated loans ▪ Commercial (C&I and CRE) net c
Slide 21: Consumer Portfolio Overview
20 Core Banking Customers TN 68% CA 6% NC 3% VA 3% GA 3% Other 18% Consumer Portfolio Overview $1.1 $0.7 $0.0 $0.5 $1.0 $1.5 In Draw In Repayment HELOC Draw vs Repayment Balances Percent of Home Equity Portfolio: Months Left in Draw Period 21% 13% 8% 6% 6% 46% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 5
Slide 22: Mortgage Repurchase Reserve and Pipeline
($ in millions) 3Q15 4Q15 1Q16 2Q16 3Q16 Beginning Balance $117 $115 $115 $114 $67 Net Realized Losses $(2) $(0) $(1) $(16) $0 Provision $0 $0 $0 $(31) $(0) Ending Balance $115 $115 $114 $67 $67 $0 $100 $200 3Q15 4Q15 1Q16 2Q16 3Q16 GSE New Requests Other New Requests Resolved Pipeline 21 Agency & N
Slide 23: Reconciliation to GAAP Financials
Reconciliation to GAAP Financials 22 Slides in this presentation use non - GAAP information of return on tangible common equity, adjusted expense, adjusted pre - provision net revenue and adjusted pre - tax income. That information is not presented according to generally accepted accounting principl
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