Loans and deposits were up double-digit percentages, revenue grew 9 percent while expenses declined 12 percent, return on equity (ROE) improved to 9.6 percent and return on tangible common equity (ROTCE) increased to 10.6 percent in 2016.  These metrics illustrate that momentum at First Horizon National Corp. (NYSE:FHN) remains strong as the 152-year-old financial services company focuses on long-term profitability.

“Throughout the year our people remained focused on the right things:  supporting our customers, growing our business, making the best use of our strong capital position, managing the impact of interest rates and improving our operating leverage by investing in ways that drive business,” said Bryan Jordan, First Horizon’s chairman and CEO.  “We made meaningful progress toward each of our bonefish targets, and that momentum is positioning this company for long-term success.”

2016 Financial Highlights and Accomplishments (all comparisons vs 2015)

Diluted EPS $0.94   ROA0.87%   ROTCE*10.6%   CET1**9.9%
   
Regional Bank   -- Average loans up 15%; average core deposits up 7%
    -- Strategic investments in recruiting, technology and growth markets yielded revenue growth that significantly outpaced expense growth
    -- Recruited 27 experienced bankers in expansion of specialty banking groups focused on franchise finance, specialty healthcare, equipment finance and music and entertainment
   
Fixed Income   -- Fixed income product average daily revenue (ADR) up 18%, to $919,000
    -- Other product revenues up 12%, to $40 million
    -- ROA at 1.4%*; ROE at 23%*
    -- #1 underwriter of callable GSE debt
    -- Top-10 competitive municipal underwriter
   
Consolidated   -- Revenues grew 9%, driven largely by 12% net interest income gain; expenses decreased 12%***
    -- Average loans up 10%; average core deposits up 11%
    -- Net interest margin rose 11 basis points, driven by higher interest rates, strong deposit market share and continued loan growth
    -- Non-performing assets down 22%
    -- ROE up 596 basis points to 9.6% and ROTCE up 662 basis points to 10.6%***
                   
Capital Deployment   -- Acquired franchise finance loan portfolio; agreed to acquire Coastal Securities
    -- Repurchased approximately 7.4 million shares at an average price of $12.67; closing price for First Horizon shares on Jan. 12 was $20.27
    -- Declared common dividends of $0.28 per share
     

* Business segment revenue, expense, asset and equity levels reflect those that are specifically identifiable or that are allocated based on an internal allocation method. ROTCE (return on tangible common equity) is a non-GAAP financial measure reconciled to ROE in the Non-GAAP to GAAP Reconciliation table below. ** Current estimate.*** Expenses included net litigation accruals of $188 million in 2015, which dropped to $30 million in 2016. 

Consolidated summary results

                                           
                4Q16 Changes vs.     Twelve months ended   2016 vs.
(Dollars in thousands, except per share data) 4Q16   3Q16   4Q15   3Q16   4Q15       2016 2015     2015
Income Statement Highlights                                       
Net interest income $    195,551     $ 185,195     $ 166,652   6   %   17   %     $    729,084   $ 653,720     12   %
Noninterest income     124,209       148,745       130,793   (16 ) %   (5 ) %         551,100     515,947     7   %
Securities gains/(losses), net     (132 )     (200 )     1,439   34   %   NM           1,341     1,378     (3 ) %
  Total revenue   319,628       333,740       298,884   (4 ) %   7   %       1,281,525     1,171,045     9   %
Noninterest expense     237,897       233,558       243,740   2   %   (2 ) %         925,204     1,053,791     (12 ) %
Provision for loan losses     -       4,000       1,000   NM     NM           11,000     9,000     22   %
Income before income taxes     81,731       96,182       54,144   (15 ) %   51   %         345,321     108,254     NM  
Provision for income taxes     24,008       28,547       2,715   (16 ) %   NM           106,810     10,941     NM  
Net income     57,723       67,635       51,429   (15 ) %   12   %         238,511     97,313     NM  
Net income attributable to noncontrolling interest     2,879       2,883       2,848   *     1   %         11,465     11,434     *  
Net income attributable to controlling interest     54,844       64,752       48,581   (15 ) %   13   %         227,046     85,879     NM  
Preferred stock dividends     1,550       1,550       1,550   *     *           6,200     6,200     *  
  Net income available to common shareholders $    53,294     $ 63,202     $ 47,031   (16 ) %   13   %     $    220,846   $ 79,679     NM  
Common Stock Data                                      
EPS $    0.23     $ 0.27     $ 0.20   (15 ) %   15   %     $    0.95   $ 0.34     NM  
Basic shares (thousands)     232,731       231,856       237,983   *     (2 ) %         232,700     234,189     (1 ) %
Diluted EPS $    0.23     $ 0.27     $ 0.20   (15 ) %   15   %     $    0.94   $ 0.34     NM  
Diluted shares (thousands)     235,590       234,092       240,072   1   %   (2 ) %         235,292     236,266     *  
Period-end shares outstanding (thousands)     233,624       233,235       238,587   *     (2 ) %         233,624     238,587     (2 ) %
Balance Sheet Highlights (Period-End)                                  
Total loans, net of unearned income $    19,589,520     $ 19,555,787     $ 17,686,502   *     11   %                  
Total deposits     22,672,363       21,574,180       19,967,478   5   %   14   %                  
Total assets     28,555,231       28,449,222       26,192,637   *     9   %                  
Total liabilities     25,850,147       25,704,640       23,553,051   1   %   10   %                  
Total equity     2,705,084       2,744,582       2,639,586   (1 ) %   2   %                  
Asset Quality Highlights                                      
Allowance for loan losses $    202,068     $ 201,557     $ 210,242   *     (4 ) %                  
Allowance / period-end loans   1.03   %   1.03   %   1.19 %                            
Net charge-offs $    (511 )   $ 2,250     $ 1,572   NM     NM                    
Net charge-offs (annualized) / average loans   NM       0.05   %   0.04 %                            
Non-performing assets (NPA) $    164,623     $ 173,519     $ 211,921   (5 ) %   (22 ) %                  
NPA % (a)   0.80   %   0.85   %   1.15 %                            
Key Ratios & Other                                      
Return on average assets ("ROA") (quarters are annualized) (b)     0.80   %   0.97   %   0.78 %                   0.87 %   0.38 %      
Return on average common equity ("ROE") (quarters are annualized) (c)     9.00   %   10.80   %   8.23 %                   9.60 %   3.64 %      
Return on tangible common equity ("ROTCE") (quarters are annualized) (d)     9.89   %   11.90   %   9.07 %                   10.59 %   3.97 %      
Net interest margin (e)     3.00   %   2.96   %   2.82 %                   2.94 %   2.83 %      
Efficiency ratio (f)     74.40   %   69.94   %   81.94 %                   72.27 %   90.09 %      
Common equity tier 1 ratio ("CET1") (g)     9.94   %   9.81   %   10.45 %                            
Tier 1 ratio (g)     11.17   %   11.03   %   11.79 %                            
Market capitalization (millions) $    4,674.8     $ 3,552.2     $ 3,464.3                              
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) This non-GAAP measure is reconciled to ROE in the non-GAAP to GAAP reconciliation.                
(e) 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.
(f) Noninterest expense divided by total revenue excluding securities gains/(losses). 
(g) Current quarter is an estimate. 
                     

Use of Non-GAAP MeasuresA financial measure is included in this release that is non-GAAP, meaning it is not presented in accordance with generally accepted accounting principles (GAAP) in the U.S.  The non-GAAP item presented in this release is return on tangible common equity, or ROTCE. This measure is reported to FHN’s management and directors through various internal reports. FHN’s management believes this measure is relevant to understanding the financial condition, capital position, and financial results of FHN and its business segments. Non-GAAP measures are not formally defined by GAAP or codified in the federal banking regulations, and other entities may use calculation methods that differ from those used by First Horizon. First Horizon has reconciled ROTCE to a comparable GAAP measure, ROE, below:

Non-GAAP to GAAP Reconciliation

Quarterly/Annually, Unaudited                            
                               
                        Twelve months ended  
(Thousands) 4Q16     3Q16     4Q15       2016       2015  
Average Tangible Common Equity (Non-GAAP)                            
Average total equity (GAAP) $   2,746,828     $ 2,718,319     $ 2,659,575     $   2,691,478     $ 2,581,187  
Less: Average noncontrolling interest (a)     295,431       295,431       295,431         295,431       295,431  
Less: Average preferred stock (a)     95,624       95,624       95,624         95,624       95,624  
(A) Total average common equity $   2,355,773     $ 2,327,264     $ 2,268,520     $   2,300,423     $ 2,190,132  
Less: Average intangible assets (GAAP) (b)     213,019       214,260       211,757         214,915       183,127  
(B) Average tangible common equity (Non-GAAP) $   2,142,754     $ 2,113,004     $ 2,056,763     $   2,085,508     $ 2,007,005  
                               
Net Income Available to Common Shareholders                            
(C) Net income available to common shareholders (quarters are annualized) $    212,017     $ 251,434     $ 186,590     $    220,846     $ 79,679  
                               
Ratios                            
(C)/(A) Return on average common equity ("ROE") (GAAP)   9.0 %     10.8 %     8.2 %     9.6 %     3.6 %
(C)/(B) Return on average tangible common equity ("ROTCE") (Non-GAAP)   9.9 %     11.9 %     9.1 %     10.6 %     4.0 %
(a) Included in Total equity on the Consolidated Balance Sheet.                                      
(b) Includes goodwill and other intangible assets, net of amortization.
   

Conference callManagement 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 0550065. 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 midnight Jan. 28. To listen to the replay, dial 877-344-7529 or 412-317-0088. The access code is 10098105. The event also will be archived and available on the website by midnight Central Time.

Other informationThis 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 MaterialsFirst Horizon expects to post additional materials for debt investors Jan. 27 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 HorizonThe 4,300 employees of First Horizon National Corp. (NYSE:FHN) provide financial services through more than 160 bank locations across Tennessee and the southern U.S. and 29 FTN Financial offices across 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 largest deposit market share in Tennessee and one of the highest customer retention rates of any bank in the country. 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 Working Mother and American Banker. More information is available at www.FirstHorizon.com.

FHN-G

CONTACT:
First Horizon Investor Relations, Aarti Bowman, (901) 523-4017
First Horizon Media Relations, James Dowd, (901) 523-4305
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