First Horizon’s strength is evident in second quarter

Special to the Banner
Posted 7/16/17

MEMPHIS —Double-digit year-over-year percentage increases in revenue, pre-tax income, loans and average deposits at First Tennessee Bank were drivers of a strong second quarter at First Horizon …

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First Horizon’s strength is evident in second quarter

Posted

MEMPHIS —Double-digit year-over-year percentage increases in revenue, pre-tax income, loans and average deposits at First Tennessee Bank were drivers of a strong second quarter at First Horizon National Corp. (NYSE:FHN).

“First Tennessee continues to be a market leader in Cleveland and across the state. Our loan and deposit balances continue to grow and our strong first and second quarter earnings are a good start to a great year,” said market president Michael Griffin.

Returns and profitability improved with higher return on tangible common equity (ROTCE) and return on assets (ROA). Growth in loans and deposits coupled with the Fed’s recent interest rate increases led to a 14 percent improvement in net interest income year over year. Credit quality trends remain excellent.

“Our people continue to deliver a differentiated experience for our customers, and that’s what drives our momentum,” said Bryan Jordan, First Horizon’s chairman and CEO. “Our bankers are expanding relationships and attracting new business in our growth markets in Middle Tennessee and the Mid-Atlantic as well as in established markets like East and West Tennessee. Our planned merger with Capital Bank will help us more quickly achieve critical financial targets, and teams from both sides are preparing us to leverage the strengths of both banks, capitalize on growth opportunities in attractive, high-growth Southeast markets and enhance our strong presence in Tennessee.”

2Q17 Financial

Highlights

(all comparisons vs 2Q16):

Diluted EPS: $0.38

Adjusted diluted EPS1: $0.27

ROA2: 1.3%

ROTCE1,2: 17.3%

Regional Bank:

• Average loans up 11%; average deposits up 10%

• Revenue up 11%

• Net interest income up 13%, fee income up 6%

• Credit quality remains excellent, with non-performing loans down 29% and net charge-offs down 60%

Consolidated:

• Net income available to common shareholders up 61%; diluted EPS up 58%

• Net interest income up 14%

• Average loans up 8% and average deposits up 11%

• Adjusted EPS for second quarter: $0.27. Notable items in the quarter were favorable impact of $20 million from mortgage repurchase reserve release, positive impact of $19.5 million related to an effective tax rate adjustment associated with the reversal of a capital loss deferred tax valuation allowance, acquisition expense of $6 million

Other Highlights:

• Coastal Securities acquisition by FTN Financial closed and integrated successfully

• Acquisition of Capital Bank expected to close in the fourth quarter will likely position First Horizon as fourth largest regional bank in the Southeast

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