First Horizon Corporation · NYSE:FHN
First Horizon — Investor Day (November 2018)
22 slides from First Horizon's investor day presentation, Nov 6, 2018
Slide 1: Customer Focused, Bonefish Driven
Customer Focused, Bonefish Driven Proven | Focused | Better David Popwell | President of Banking
Slide 2: Non-GAAP and forward-looking statements
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. Annualized, pro forma, projected and es
Slide 3: Our Business Model Is Proven, Focused, and Better
Our Business Model Is Proven, Focused, and Better 1 We have a strong economic profit and risk focus 2 We make decisions close to our customers 3 We have high return specialty banking areas 4 We have strong growth opportunities in new markets Proven | Focused | Better 2
Slide 4: We doubled Regional Banking Economic Profit from 2014 to 2017
Economic Profit = Net Income Less Cost of Capital Other ($7) Specialty We doubled Regional Comm'l / Loans $27 Banking Economic Profit Specialty Deposits $155 from 2014 to 2017 $18 Retail Deposits $70 $46 2014 2017 Economic Profit Economic Profit Proven 3
Slide 5: Total Tennessee Deposits
67% Faster Deposit CAGR Since 3Q13 (Vs Peers)1 Total Deposit CAGR (5yr) FHN 14% Peers 9% Deposits have meaningfully driven 45% Faster Deposit Growth (Vs TN Market)2 Economic Profit $24.0B Total Tennessee Deposits 8% CAGR $16.6B 2013 2018 Proven For footnoted items, refer to slide 21 for additional i
Slide 6: Strong Specialty Loan Growth Since 3Q13
Strong Specialty Loan Growth Since 3Q13 Total Specialty Loans ($B) $10.4 134% $4.4 3Q13 3Q18 Diversified portfolio of 27% 29% high growth, high return RAROC Efficiency Ratio Specialty Banking areas Correspondent drive Economic Profit 3% Energy 3% Franchise Finance 7% Healthcare CRE 7% 30% Specialty
Slide 7: Our goal is to double economic profit again in 5 years
Our goal is to double economic profit again in 5 years Proven 6
Slide 8: We are building from a position of strength
We are building from a position of strength Proven 7
Slide 9: Bonefish is in our DNA
Bonefish is in our DNA Focused 8
Slide 10: Economic Profit Permeates Our Whole Company
Economic Profit Permeates Our Whole Company Front Line Executive Employees Audience Management RAROC Relationship Product Bonefish Pricing Profitability Profitability Financial Tool Reports Reports Reports Individual Segment-level tool Portfolio-level view of economic profitability transaction-level
Slide 11: Economic Profit Drives Incentives
Risk-Adjusted Full Returns Relationships Economic Profit Drives Relationship EP Drivers Incentives We incentivize based on the 3 main drivers of relationship economic profit growth Growth Focused 10
Slide 12: We have a differentiated market approach
We have a differentiated market approach Focused 11
Slide 13: Decisions Made Closest to the Customer
Bank President Market Specialty Leaders LOB Leaders Decisions Made Closest Customer- Facing Customer- Facing to the Customer Employees Employees Market and LOB leaders report directly to Bank President Credit leaders located in market, facilitating nimble Relationship Customer Local Credit Manager L
Slide 14: Our success in Nashville is our blueprint for growth
Invest in Talent Elevate the Brand Our success in Nashville is our blueprint for growth Targeted Industry Focus Focused 13
Slide 15: We have better growth opportunities ahead
We have better growth opportunities ahead Better 14
Slide 16: Profitably growing in key markets and businesses
Specialty Businesses Profitably growing Key in key markets Markets and businesses Small Business & Affluent Better 15
Slide 17: Capital Bank Enhances Growth Opportunities
Capital Bank Enhances Growth Opportunities North and South Carolina Tennessee 16% % of FHN 1.3x 77% 1.1x Deposits in Market1 5yr HH Income Growth vs Nat’l Avg2 % of FHN 5yr HH Income Deposits in Growth vs Nat’l Avg2 Market1 1.9x 5yr Population 1.3x Growth vs Nat’l Avg2 5yr Population Growth vs Nat’l
Slide 18: Our credit culture enables soundness, profitability, and growth
Our credit culture enables soundness, profitability, and growth Better 17
Slide 19: Our Loan Portfolio Provides Strong, Sustainable Returns
Our Loan Portfolio Provides Strong, Sustainable Returns Commercial Loans by Geography CRE to Total Capital SC GA 4% 5% 166% TX 112% 6% Other 30% FL 8% FHN Peers¹ Regional Banking NCO% NC 0.20% 16% TN 0.06% 31% 3Q13 3Q18 Better Commercial Loans by Geography as of 3Q18. CRE to Total Capital as of 2Q18
Slide 20: Our Business Model Is Proven, Focused, and Better
Our Business Model Is Proven, Focused, and Better 1 We have a strong economic profit and risk focus 2 We make decisions close to our customers 3 We have high return specialty banking areas 4 We have strong growth opportunities in new markets Proven | Focused | Better 19
Slide 21: Customer Focused, Bonefish Driven
Customer Focused, Bonefish Driven Proven | Focused | Better David Popwell | President of Banking
Slide 22: Notes
Notes Slide Note Comment CAGRs calculated on average deposit balances from 3Q13 to 3Q18. Peers include BKU, BOKF, BXS, CBSH, CFR, FCNC.A, HWC, IBKC, PB, PNFP, 4 (1) SNV, TCBI, UMBF. 4 (2) Deposit data as of 6.30.13 and 6.30.18, respectively. Source: FDIC. 16 (1) Percentages of FHN deposits in key MS