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Double-Digit Growth in Both Loans and Deposits, Key Legal Resolution Continue Momentum Into 2015
In the first quarter of 2015 First Horizon National Corp. (NYSE:FHN) saw solid loan and deposit growth at its First Tennessee regional bank, a rebound at its FTN Financial capital markets group and a settlement of a key issue related to the mortgage business the company sold in 2008. Capital levels remain very strong at First Horizon, and the company continued to smartly deploy capital through loan growth, share buybacks and dividend payments during the quarter.
“Our people continued to demonstrate strong performance across the board in the first quarter,” said First Horizon Chairman and CEO Bryan Jordan. “They partnered with our customers to deepen relationships and did a great job of winning new customers. And they did it all with an eye on prudently managing expenses and investing in what matters to our customers.”
Financial highlights:
– During the first quarter First Horizon reached an agreement in principle with the Department of Justice and the Department of Housing and Urban Development to settle potential claims related to underwriting and origination of FHA-insured mortgage loans. That agreement resulted in a $162.5 million pre-tax charge for the quarter, driving a net loss available to common shareholders of $76.7 million, or $.33 per diluted share. Excluding the litigation charge, net income available to common shareholders in the first quarter would have been $41.8 million1, or $.18 per diluted share1.
– First Tennessee, the regional bank, had a very strong start to 2015. Average loans were up 14 percent, average core deposits were up 9 percent and net income was up 31 percent year over year. Loans were up by double-digit percentages year over year in commercial, asset-based lending and commercial real estate.
– FTN Financial, the capital markets group, capitalized on its broad-based delivery system and product capabilities to improve average daily fixed income revenues 8 percent year over year and increase net income 47 percent.
– Asset quality trends continued to be favorable, with nonperforming assets down 31 percent and net charge-offs down 45 percent year over year.
– First Horizon is committed to improving its efficiency ratio, or what it costs the company to earn each dollar, while continuing to make strategic investments to improve its businesses. While consolidated expenses as reported were up compared to a year ago, they were down 2 percent1 year over year excluding the litigation charge.
– Capital levels remain very strong, with a common equity tier 1 ratio of 10.3 percent estimated for the quarter.
