First Horizon National Corporation
Fourth Quarter 2018 Earnings
January 18, 2019
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 estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. This presentation also includes certain non-GAAP financial measures related to "tangible common equity" and certain financial measures excluding notable items, including merger-related charges. Notable items include certain revenue or expense items that may occur in a reporting period which management does not consider indicative of ongoing financial performance. Management believes it is useful for the investment community to consider financial metrics with and without notable items in order to enable a better understanding of company results, facilitate comparability of period-to-period financial results, and to evaluate and forecast those results. Although FHN has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components, they have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of results under GAAP. For more information on these calculations and to view the reconciliations to the most comparable GAAP measures, please refer to the appendix of this presentation.
This presentation contains forward-looking statements, which may include 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 statements. These factors are outlined in our recent earnings and other press releases and in more detail in the most current 10-Q and 10-K. FHN disclaims any obligation to update any such forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements to reflect future events or developments.
4Q18 & 2018 Highlights
Strong Fundamentals, Delivering Profitable Growth & High Returns
Dominate Tennessee
•Deposit growth of 5% LQ
•Loan growth of 1% LQ
Profitably grow key markets & specialty areas
•Strong growth in Middle-TN, Mid-Atlantic, & South Florida○Deposits up 5% LQ○Loans up 2% LQ
2018 EPS
Reported$1.65+154%
Adjusted1$1.41+27%
2018 ROE
Reported12.1%+609bpsAdjusted110.5%+57bps
Optimize the expense base
•Expense decline of 4% LQ
•Achieved merger cost saves for 2018
Effective capital deployment
•Repurchased ~$80mm shares in 4Q182
•Total payout ratio of 124% of 4Q18
•TBV per share up ~3% LQ
2018 ROTCE1
Reported20.3%+1,305bpsAdjusted117.7%+506bps
2018 ROA
Reported1.38%+79bpsAdjusted11.19%+22bps
All comparisons are 2018 vs 2017, unless otherwise noted. All Deposit and Loan growth metrics are calculated with period-end balances. LQ - Linked Quarter.
1Adjusted EPS, Adjusted ROE, ROTCE, Adjusted ROTCE , Adjusted ROA are Non-GAAP numbers and are reconciled in the appendix. Adjusted numbers exclude notable items as outlined in the appendix.
2Weighted average price for shares repurchased in 4Q18 was $15.00.
FINANCIAL RESULTS
Financial Results
•NII slightly down from lower accretion and loans to mortgage company seasonality
•Fee income decline driven by $8mm in deferred compensation and non-recurring $4mm gain in 3Q18
•Expenses down due to deferred compensation ($9mm) and FDIC insurance ($3mm)
•Loan loss provision at $6mm reflecting stability at Regional Bank and a decreased provision credit in Non-Strategic
•Strong core loan and deposit growth
○Regional Bank period-end loans up 1% LQ
○Regional Bank period-end deposits up 6% LQ
4Q18
$ in millions except per share data
Net Interest Income
Fee Income
Total Revenue
Expense
Loan Loss Provision
Pre-Tax Income
NIAC2
EPS
Avg Loans ($B)
Avg Deposits ($B)
3Q18 Actual
$306
Adjusted
4Q18 Adjusted¹
3Q18 Adjusted¹
LQ % Change
$303
$306
$121
$136
$423
$270
$442
$283
$6
$2
$147
$113
$157
$118
$0.35
$0.36
$27.2
$31.8
$27.3
$30.8
4Q18 Net Income Available to Common (NIAC) & EPS Reconciliation
$ in millions except per share data
4Q18 Adjusted1Notable Items:
4Q18 Reported
Return of excess fees from Capital Bank Debit Cards
Acquisition Related Items
NM - Not Meaningful. LQ - Linked Quarter. Numbers may not add to total due to rounding.
1Adjusted Fee Income, Revenue, Expense, Pre-Tax Income, NIAC, and EPS are Non-GAAP numbers and are reconciled in the appendix. Adjusted numbers exclude notable items as outlined in the appendix. EPS and Adjusted EPS calculated using 323.9mm shares.2Net Income Available to Common (NIAC) includes the impact from $3mm of noncontrolling interest and $1.6mm of preferred stock dividends.
-1%
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Disclaimer
First Horizon National Corporation published this content on 18 January 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 18 January 2019 12:18:13 UTC