VOL. 129 | NO. 76 | Friday, April 18, 2014
First Horizon Grows Net Income in First Quarter
By Andy Meek
The first earnings announcement of the 150th anniversary year for First Tennessee Bank’s parent company was one of those seemingly uncommon things in banking these days – a surprise to the upside.
First Horizon National Corp.’s earnings were expected to fall during the first quarter. But net income was up 12 percent from the first quarter in 2013.
(Daily News File/Brandon Dill)
Analysts polled before the announcement Thursday, April 17, on average said they expected Memphis-based First Horizon National Corp.’s earnings to fall during the first quarter compared to one year ago. But, in fact, net income during the quarter for First Horizon was $45 million, equal to 19 cents per share.
That’s up from 17 cents during the first quarter of 2013, a 12 percent increase. Expenses also were down 8 percent company-wide during the quarter, and at the company’s banking unit, First Tennessee Bank, both deposits and lending were up.
“We’re preparing our company for the next 150 years,” said First Horizon chairman and CEO Bryan Jordan by way of putting the results in context and at the same time giving a nod to the company’s status as having the 14th oldest national bank charter in the country.
It was a theme he also stressed in an interview with The Daily News this month before the earnings call, looking back at what the bank has accomplished to reach its current milestone – and what the future holds.
At a private gathering Downtown in recent days to celebrate the company’s anniversary, for example, Jordan told The Daily News, “We had people there who (via their businesses) have been banking with us in excess of 100 years. The only way you have long-term success like that is through strong customer relationships.”
Wunderlich Securities Inc. bank analyst Kevin Reynolds, in an analyst note following First Horizon’s earnings presentation, described the company’s performance during the just-ended quarter as “respectable.” The “earnings beat,” he explained, was mostly due to a greater than expected decline in noninterest expenses for the bank.
Another bright spot he noted: First Horizon’s so-called efficiency row has come down and is getting closer to where the company wants it to be. The first-quarter efficiency ratio was 75.3 percent, down from 88.66 percent during the fourth quarter and 75.6 percent during the first quarter of 2013.
That ratio essentially reflects total expenses divided by total revenue. A ratio of 75 percent means First Horizon spends 75 cents to make a dollar.
Among the quarter’s other results, net charge offs were down 38 percent. The company currently has about 4,300 employees who provide services through more than 170 First Tennessee Bank locations in and around the state and 21 FTN Financial offices in the U.S. and abroad.
Outside of the quarter, the company has been making news in recent weeks for announcements such as the honor it received for technology innovation. First Horizon said it has been ranked 21st on the InfoWeek Elite 100 list of the top business technology innovators, which measures technology-based investments, strategies and results of innovative IT users around the country.
First Horizon chief investment officer Bruce Livesay said that honor reflects the company’s investments in technology to provide a differentiated experience for customers and employees.
Also this month, the company announced an expansion into its newest market outside the state. First Tennessee has expanded to Houston and tapped a longtime banker in the area to lead its efforts there.
Houston is now the fifth banking region for the bank, joining three in Tennessee – the east, middle and west regions – plus the Mid-Atlantic region that includes the Carolinas, Virginia and North Florida.