First Horizon Earns $0.29 Per Share in Third Quarter
16 October 2015 - 9:30PM
First Horizon National Corp. (NYSE:FHN), parent company of First
Tennessee Bank and FTN Financial, earned $0.29 per common share for
third quarter 2015, with total average loans up 6 percent and total
average core deposits up 20 percent from third quarter 2014. First
Tennessee Bank continued to generate business in specialty lending
areas such as asset-based lending, corporate banking and commercial
real estate, although seasonal housing trends reduced loans to
mortgage companies in the quarter. First Horizon completed its
acquisition of Raleigh, N.C.-based TrustAtlantic Bank and its
parent company, TrustAtlantic Financial Corp., on Oct. 2.
"Our First Tennessee bankers and the professionals in our FTN
Financial fixed income group continue to do what they do best –
building relationships with customers and earning business," said
Bryan Jordan, First Horizon's chairman and CEO. "We will keep
our focus on investing in our people, simplifying processes,
controlling costs and developing the technologies, products and
services that meet our customers' banking
needs."
Financial highlights
- Net income available to common shareholders in third quarter
2015 was $67 million, or $0.29 per share, compared to $46 million,
or $0.20 per share, a year ago. This quarter's results
included an $8 million pre-tax gain from employee benefits
amendments, a $6 million pre-tax gain from retirement of debt and a
$4.5 million benefit to taxes. Third quarter 2014's results
included a $40 million gain from loan sales and net litigation
expenses of $35 million.
- First Tennessee, the regional bank, had another strong quarter,
with average core deposits up 16 percent, average loans up 11
percent, net income up 7 percent and net interest income up 7
percent compared to third quarter 2014. Loans to businesses
were up across markets, products and industries, with growth in
sectors such as commercial real estate, transportation,
manufacturing and distribution.
- FTN Financial, the fixed income group, showed solid
performance, with average daily revenue of $671,000 for third
quarter 2015.
- Asset quality trends remained strong, with non-performing
assets declining 15 percent year over year.
- Capital levels also remained strong, with the estimated Common
Equity Tier 1 ratio at 10.8 percent.
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CONSOLIDATED
SUMMARY RESULTS |
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3Q15 Changes vs. |
(Dollars in thousands, except per share
data) |
3Q15 |
2Q15 |
3Q14 |
2Q15 |
3Q14 |
Income Statement
Highlights |
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Net interest income |
$ 163,562 |
$ 166,640 |
$ 159,541 |
(2)% |
3% |
Noninterest income |
125,448 |
130,293 |
158,677 |
(4)% |
(21)% |
Securities gains/(losses), net |
(345) |
8 |
(862) |
NM |
60% |
Total revenue |
288,665 |
296,941 |
317,356 |
(3)% |
(9)% |
Noninterest expense |
203,853 |
218,394 |
244,016 |
(7)% |
(16)% |
Provision for loan losses |
1,000 |
2,000 |
6,000 |
(50)% |
(83)% |
Income/(loss) before income
taxes |
83,812 |
76,547 |
67,340 |
9% |
24% |
Provision/(benefit) for income
taxes |
12,107 |
21,590 |
16,842 |
(44)% |
(28)% |
Net income/(loss) |
71,705 |
54,957 |
50,498 |
30% |
42% |
Net income attributable to
noncontrolling interest |
2,977 |
2,851 |
2,875 |
4% |
4% |
Net income/(loss) attributable to controlling
interest |
68,728 |
52,106 |
47,623 |
32% |
44% |
Preferred stock dividends |
1,550 |
1,550 |
1,550 |
* |
* |
Net income/(loss)
available to common shareholders |
$ 67,178 |
$ 50,556 |
$ 46,073 |
33% |
46% |
Common Stock Data |
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Diluted EPS |
$ 0.29 |
$ 0.22 |
$ 0.19 |
32% |
53% |
Diluted shares (thousands) |
235,058 |
234,669 |
236,862 |
* |
(1)% |
Period-end shares outstanding
(thousands) |
234,237 |
234,021 |
235,249 |
* |
* |
Balance Sheet Highlights
(Period-End) |
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Total loans, net of unearned income |
$ 16,725,492 |
$ 16,936,772 |
$ 15,812,017 |
(1)% |
6% |
Total deposits |
18,865,220 |
18,674,473 |
16,144,771 |
1% |
17% |
Total assets |
25,384,109 |
25,239,767 |
23,982,597 |
1% |
6% |
Total liabilities |
22,795,491 |
22,721,862 |
21,370,783 |
* |
7% |
Total equity |
2,588,618 |
2,517,905 |
2,611,814 |
3% |
(1)% |
Asset Quality
Highlights |
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Allowance for loan losses |
$ 210,814 |
$ 221,351 |
$ 238,641 |
(5)% |
(12)% |
Allowance / period-end loans |
1.26% |
1.31% |
1.51% |
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Net charge-offs |
$ 11,537 |
$ 8,977 |
$ 10,987 |
29% |
5% |
Net charge-offs (annualized) / average
loans |
0.28% |
0.21% |
0.28% |
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Non-performing assets (NPA) |
$ 217,199 |
$ 238,548 |
$ 256,938 |
(9)% |
(15)% |
NPA % (a) |
1.25% |
1.37% |
1.57% |
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Key Ratios & Other |
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Return on average assets (annualized)
(b) |
1.12% |
0.87% |
0.84% |
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Return on average common equity (annualized)
(c) |
12.37% |
9.56% |
8.16% |
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Net interest margin (d) |
2.85% |
2.92% |
2.97% |
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Efficiency ratio (e) |
70.53% |
73.55% |
76.68% |
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Tier 1 ratio (f) |
12.16% |
11.98% |
14.47% |
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Market capitalization (millions) |
$ 3,321.5 |
$ 3,667.1 |
$ 2,888.9 |
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Certain previously reported
amounts have been reclassified to agree with current
presentation. |
NM - Not meaningful |
* Amount is less than one
percent. |
(a) NPAs related to the loan
portfolio over period-end loans plus foreclosed real estate and
other assets. |
(b) Calculated using net
income. |
(c) Calculated using net income
available to common shareholders. |
(d) Net interest margin is
computed using net interest income adjusted to a fully taxable
equivalent ("FTE") basis assuming a statutory federal income tax
rate of 35 percent and, where applicable, state income taxes. |
(e) Noninterest expense divided
by total revenue excluding securities gains/(losses). |
(f) Current quarter is an
estimate. |
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Conference call
Management will hold a conference call at 8:30 a.m. Central Time
today to review earnings and performance trends. There will also be
a live webcast accompanied by the slide presentation available in
the investor relations section of www.FirstHorizon.com. The
call and slide presentation may involve forward-looking
information, including guidance.
Participants can call toll-free starting at 8:15 a.m. by dialing
888-317-6003 and entering pin number 0228490. The number for
international participants is 412-317-6061. Participants can also
listen to the live audio webcast with the accompanying slide
presentation through the website. A replay will be available from
noon today until 8:00 a.m. Nov. 3. To listen to the replay, dial
877-344-7529 or 412-317-0088. The access code is 10073479. The
event also will be archived and available on the website by
midnight Central Time tomorrow.
Other information
This press release contains forward-looking statements involving
significant risks and uncertainties. A number of important factors
could cause actual results to differ materially from those in the
forward-looking information. Those factors include general economic
and financial market conditions, including expectations of and
actual timing and amount of interest rate movements including the
slope of the yield curve, competition, ability to execute business
plans, geopolitical developments, recent and future legislative and
regulatory developments, inflation or deflation, market
(particularly real estate market) and monetary fluctuations,
natural disasters, customer, investor and regulatory responses to
these conditions and items already mentioned in this press release,
as well as critical accounting estimates and other factors
described in First Horizon's annual report on Form 10-K and other
recent filings with the SEC. First Horizon disclaims any obligation
to update any such factors or to publicly announce the result of
any revisions to any of the forward-looking statements included
herein or therein to reflect future events or developments or
changes in expectations.
Debt Investor Materials
First Horizon expects to post additional materials for debt
investors Nov. 2 in the investor relations section of
www.FirstHorizon.com First Horizon will also provide these
materials to analysts at upcoming meetings. The debt investor
materials posted may contain forward-looking statements, including
guidance, involving significant risks and uncertainties, which will
be identified by words such as "believe," "expect," "anticipate,"
"intend," "estimate," "should," "is likely," "will," "going
forward" and other expressions that indicate future events and
trends and may be followed by or reference cautionary statements. A
number of factors could cause actual results to differ materially
from those in the forward-looking information. These factors are
outlined in our most recent earnings press release and in more
detail in our most current 10-Q and 10-K reports. First Horizon
disclaims any obligation to update any of the forward-looking
statements that are made from time to time to reflect future events
or developments or changes in expectations.
About First Horizon
The 4,200 employees of First Horizon National Corp. (NYSE:FHN)
provide financial services through more than 170 First Tennessee
Bank locations in and around Tennessee and 26 FTN Financial Group
offices in the U.S. The company was founded during the Civil War in
1864 and has the 14th oldest national bank charter in the
country. First Tennessee has the number one market share in
Tennessee and one of the highest customer retention rates of any
bank in the country, and FTN Financial is a capital markets
industry leader in fixed income sales, trading and strategies for
institutional customers in the U.S. and abroad. First Horizon has
been recognized as one of the nation's best employers by Forbes,
Working Mother and American Banker magazines. More information is
available at www.FirstHorizon.com.
FHN-G
CONTACT: First Horizon Investor Relations, Aarti Bowman, (901) 523-4017
First Horizon Media Relations, Jack Bradley, (901) 523-4813
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