This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Positive Trends Continued At First Horizon In Fourth Quarter

MEMPHIS, Tenn., Jan. 18, 2013 (GLOBE NEWSWIRE) -- First Horizon National Corp. (NYSE:FHN) continued to see solid performance from its regional banking and capital markets businesses as the company announced fourth quarter earnings per share of $0.17 and net income available to common shareholders of $41 million. The company's $250 million charge in second quarter 2012 to address the GSE mortgage repurchase issue led to a loss to common shareholders of $28 million for 2012 but resulted in no mortgage repurchase provision in both the third and fourth quarters of 2012.

First Horizon executed on its strategic priorities throughout 2012, earning customer service honors, loaning more to both business and consumer customers, growing deposits, meeting efficiency goals, improving asset quality, returning capital to shareholders and increasing the positive impact of its core businesses of banking and capital markets by winding down its nonstrategic businesses.

"We finished 2012 with strong momentum, and our employees remain focused on giving our customers exceptional service, being easy to do business with and using our 'bonefish' model to create value for our shareholders," said Bryan Jordan, First Horizon chairman and CEO. "We executed on some tough actions in 2012 to position our company for long-term success, and we're energized as we enter 2013. This should be a good year for us."

Financial results

  • Loans and deposits increased in 2012, and the company continued to return capital to shareholders by paying dividends and repurchasing $131 million of common stock throughout the year. The $250 million charge for GSE-related repurchase requests in second quarter 2012 led to a net loss to common shareholders of $27.8 million ($0.11 per share) for the year.
  • First Tennessee remained the top bank in our West and East Tennessee regions and continued to gain market share in Middle Tennessee in 2012. In the regional bank, average loans were up 10 percent, core deposits were up 11 percent and revenues were up 3 percent for 2012.
  • FTN Financial, First Horizon's capital markets group, continued to be a major contributor to fee income and provided significant returns for First Horizon. Fixed income average daily revenue for the group was $1.2 million for 2012.             
  • First Horizon met its efficiency goals for 2012 by streamlining operations, consolidating branches based on customer preferences and cutting jobs based on business needs. The company offered a voluntary separation program to some employees who don't have direct contact with customers, and as of Dec. 31, 187 employees chose to participate. The program cost the company $17 million in the fourth quarter but will lead to ongoing cost savings each year.      

Credit quality trends

  • Asset quality continued to improve. Non-performing assets were down 20 percent and net charge-offs were down 43 percent from 2011 to 2012.   

Capital

  • Capital ratios remained strong, well above well-capitalized levels. 
  • Shareholders received a quarterly cash dividend of $.01 per share each quarter in 2012.
  • The company repurchased $131 million of common stock in 2012 compared to $44 million in 2011.   
 
FHN CONSOLIDATED SUMMARY RESULTS
Quarterly, Unaudited
 
            4Q12 Changes vs. Twelve months ended  2012 vs.
(Dollars in thousands, except per share data) 4Q12 3Q12 2Q12 1Q12 4Q11  3Q12   4Q11  2012 2011 2011
Income Statement Highlights                     
Net interest income  $ 170,598  $ 173,465  $ 172,675  $ 171,929  $ 178,877 (2)% (5)%  $ 688,667  $ 700,832 (2)%
Noninterest income   151,143  163,538  153,842  202,113  180,993 (8)% (16)%  670,636  749,847 (11)%
Securities gains/(losses), net  (4,700)  --  5,065  328  203 NM NM  693  36,164 (98)%
Total revenue  317,041  337,003  331,582  374,370  360,073 (6)% (12)%  1,359,996  1,486,843 (9)%
Noninterest expense   271,361  263,169  527,177  321,994  312,036 3% (13)%  1,383,701  1,292,995 7%
Provision for loan losses  15,000  40,000  15,000  8,000  10,000 (63)% 50%  78,000  44,000 77%
Income/(loss) before income taxes  30,680  33,834  (210,595)  44,376  38,037 (9)% (19)%  (101,705)  149,848 NM
Provision/(benefit) for income taxes  (12,914)  5,260  (88,178)  10,570  (526) NM NM  (85,262)  15,836 NM
Income/(loss) from continuing operations  43,594  28,574  (122,417)  33,806  38,563 53% 13%  (16,443)  134,012 NM
Income/(loss) from discontinued operations, net of tax  (12)  108  487  (435)  (752) NM 98%  148  8,618 (98)%
Net income/(loss)  43,582  28,682  (121,930)  33,371  37,811 52% 15%  (16,295)  142,630 NM
Net income attributable to noncontrolling interest   2,901  2,875  2,844  2,844  2,871 1% 1%  11,464  11,434 *
Net income/(loss) available to common shareholders  $ 40,681  $ 25,807  $ (124,774)  $ 30,527  $ 34,940 58% 16%  $ (27,759)  $ 131,196 NM
Common Stock Data                    
Diluted EPS from continuing operations  $ 0.17  $ 0.10  $ (0.50)  $ 0.12  $ 0.13 70% 31%  $ (0.11)  $ 0.47 NM
Diluted EPS  $ 0.17  $ 0.10  $ (0.50)  $ 0.12  $ 0.13 70% 31%  $ (0.11)  $ 0.50 NM
Diluted shares (thousands)  246,132  248,306  249,104  255,369  260,372 (1)% (5)%  248,349  262,861 (6)%
Period-end shares outstanding (thousands)  243,598  247,134  248,810  252,667  257,468 (1)% (5)%  243,598  257,468 (5)%
Cash dividends declared per share  $ 0.01  $ 0.01  $ 0.01  $ 0.01  $ 0.01 * *  $ 0.04  $ 0.04 *
Balance Sheet Highlights (Period-End)                    
Total loans, net of unearned income (Restricted  -- $.1 billion) (a)  $ 16,708,582  $ 16,523,783  $ 16,185,763  $ 15,971,330  $ 16,397,127 1% 2%      
Total deposits  16,629,709  16,228,111  16,117,443  16,935,170  16,213,009 2% 3%      
Total assets (Restricted -- $.1 billion) (a)  25,520,140  25,739,830  25,492,955  25,678,969  24,789,384 (1)% 3%      
Total liabilities (Restricted -- $.1 billion) (a)  23,010,934  23,207,942  22,978,549  23,004,796  22,104,747 (1)% 4%      
Total equity  2,509,206  2,531,888  2,514,406  2,674,173  2,684,637 (1)% (7)%      
Asset Quality Highlights                    
Allowance for loan losses (Restricted -- $4.3 million) (a)  $ 276,963  $ 281,744  $ 321,051  $ 346,016  $ 384,351          
Allowance / period-end loans 1.66% 1.71% 1.98% 2.17% 2.34%          
Net charge-offs   $ 19,781  $ 79,307  $ 39,965  $ 46,335  $ 75,294          
Net charge-offs (annualized) / average loans  0.48% 1.92% 1.01% 1.16% 1.84%          
Non-performing assets (NPA)   $ 419,369  $ 450,391  $ 466,873  $ 511,320  $ 521,161          
NPA % (b) 1.84% 2.15% 2.32% 2.56% 2.57%          
Key Ratios & Other                    
Return on average assets (annualized) (c)  0.69% 0.45% (1.96)% 0.53% 0.60%          
Return on average common equity (annualized) (d) 7.20% 4.59% (21.06)% 5.15% 5.69%          
Net interest margin (e) (f) 3.09% 3.15% 3.16% 3.12% 3.23%          
Fee income to total revenue (g) 46.98% 48.53% 47.12% 54.03% 50.29%          
Efficiency ratio (h) 84.34% 78.09% 161.45% 86.08% 86.71%          
Book value per common share  $ 9.09  $ 9.05  $ 8.92  $ 9.42  $ 9.28          
Tangible book value per common share (f)  $ 8.44  $ 8.41  $ 8.28  $ 8.78  $ 8.66          
Adjusted tangible common equity to risk weighted assets (f) (i) 9.90% 10.03% 9.97% 10.88% 10.80%          
Market capitalization (millions)  $ 2,414.1  $ 2,379.9  $ 2,152.2  $ 2,622.7  $ 2,059.7          
Full time equivalent employees  4,507  4,585  4,619  4,629  4,718          
NM - Not meaningful
* Amount is less than one percent.
(a) Restricted balances parenthetically presented are as of December 31, 2012.
(b) NPAs related to the loan portfolio over period-end loans plus foreclosed real estate and other assets.
(c) Calculated using net income.
(d) Calculated using net income available to common shareholders.
(e) Net interest margin is computed using total net interest income adjusted for FTE. 
(f) Refer to the Non-GAAP to GAAP Reconciliation.
(g) Ratio excludes securities gains/(losses).
(h) Noninterest expense divided by total revenue excluding securities gains/(losses).
(i) Current quarter is an estimate.

Use of non-GAAP measures

Certain measures are included in this release that are non-GAAP, meaning they are not presented in accordance with generally accepted accounting principles (GAAP) in the U.S. FHN's management believes such measures are relevant to understanding the capital position and results of the company. The non-GAAP items presented in this release are tangible book value per common share, adjusted tangible common equity to risk-weighted assets and net interest margin computed using net interest income adjusted for FTE. These measures are reported to FHN's management and board of directors through various internal reports. Additionally, disclosure of the non-GAAP capital ratios provides a meaningful base for comparability to other financial institutions as demonstrated by their use by the various banking regulators in reviewing the capital adequacy of financial institutions. 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 FHN. The reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items can be found in this table:

 
NON-GAAP to GAAP Reconciliation
(Period End, Dollars in Thousands except per share data) (Unaudited) 4Q12 3Q12 2Q12 1Q12 4Q11
Tangible Common Equity (Non-GAAP)          
(A) Total equity (GAAP) $2,509,206 $2,531,888 $2,514,406 $2,674,173 $2,684,637
Less: Noncontrolling interest (a)  295,165  295,165  295,165  295,165  295,165
(B) Total common equity  2,214,041  2,236,723  2,219,241  2,379,008  2,389,472
Less: Intangible assets (GAAP) (b)  156,942  157,921  158,901  159,880  159,902
(C) Tangible common equity (Non-GAAP) 2,057,099 2,078,802 2,060,340 2,219,128 2,229,570
Less: Unrealized gains on AFS securities, net of tax 55,250 63,923 63,679 67,077 67,069
(D) Adjusted tangible common equity (Non-GAAP)  $2,001,849 $2,014,879 $1,996,661 $2,152,051 $2,162,501
           
           
Period-end Shares Outstanding          
(E) Period-end shares outstanding  243,598  247,134  248,810  252,667  257,468
           
Risk Weighted Assets          
(F) Risk weighted assets (c) (d)  $ 20,211,000  $ 20,082,979  $ 20,022,430  $ 19,783,405  $ 20,026,412
           
Ratios          
(D)/(F) Adjusted tangible common equity to risk weighted assets ("TCE/RWA") (Non-GAAP) (c) 9.90% 10.03% 9.97% 10.88% 10.80%
(C)/(E) Tangible book value per common share (Non-GAAP)  $8.44 $8.41 $8.28 $8.78 $8.66
           
Net interest income adjusted for impact of fully taxable equivalent ("FTE") (Non-GAAP)        
Net interest income (GAAP) $170,598 $173,465 $172,675 $171,929 $178,877
FTE adjustment  1,842  1,752  1,756  1,659  1,650
Net interest income adjusted for impact of FTE (Non-GAAP) $172,440 $175,217 $174,431 $173,588 $180,527
Certain previously reported amounts have been reclassified to agree with current presentation.
(a) Included in Total equity on the Consolidated Balance Sheet.
(b) Includes goodwill and other intangible assets, net of amortization.
(c) Current quarter is an estimate. 
(d) Defined by and calculated in conformity with bank regulations. 

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.fhnc.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 877-303-6618. The number for international participants is 224-357-2205. The conference ID number is 86035250.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs