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VOL. 132 | NO. 205 | Monday, October 16, 2017

First Tennessee Bank Parent Wraps Solid Third Quarter

By Andy Meek

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The Memphis-based parent company of First Tennessee Bank is starting to wind down 2017 optimistic about its business and the direction of the economy, which helped the company grow its net income 7 percent during the quarter.

The Memphis-based parent company of First Tennessee Bank posted solid third quarter results, which included a 7 percent growth in net income. (Daily News File/Andrew J. Breig)

First Horizon National Corp. saw its net income climb to $67.3 million from $63.2 million during the year-ago period. Elsewhere across the company, things are more or less where executives would like them to be, such as the company’s earnings per share, up 2 cents to 29 cents compared to the year-ago quarter; average deposits up 8 percent at First Tennessee; and revenue also up 7 percent, in addition to First Tennessee having maintained its No. 1 deposit market share position in the state.

The latest market share data from the Federal Deposit Insurance Corp. came out this month. It ranks all banks in local, metro and state markets according to their share of customer deposits.

“We saw very good loan and deposit trends across the business,” First Horizon chairman and CEO Bryan Jordan told analysts during the quarterly earnings presentation Friday, Oct. 13. “(We) feel very, very good about the credit quality, what we were able to put on the balance sheet, and really the mix of new relationships. New-to-bank relationships that we were able to build over the last several quarters culminated in loan closings in the third quarter.”

Looking out over the next few quarters, Jordan said loan pipelines also look steady and the bank is “reasonably optimistic” about what the fourth quarter holds heading into 2018. That also brings the company closer to its merger with North Carolina-based Capital Bank, with the current third-quarter earnings possibly being one of the last before that merger is finished.

The two banks earlier this year announced that merger in a $2.2 billion deal that will create the fourth-largest regional bank in the Southeast.

First Tennessee’s West Tennessee president, Bo Allen, said the company is continuing to see “good loan and deposit growth with strong credit quality” in its Memphis-area market. And that 2017 is shaping to be an overall solid year for the bank.

Among other results for the quarter:

• Average loans at First Tennessee were up 9 percent during the quarter. The bank also grew its net interest income 10 percent as a result of loan growth and short-term rate increases.

• The company’s efficiency ratio, however, took an upward swing during the quarter. That’s a key banking performance metric that’s calculated by dividing expenses by total revenue. During the quarter, that ratio for First Horizon was 73.5 percent, meaning the company spent 73.5 cents to make a dollar. In the year-ago quarter, First Tennessee spent only 69.9 cents to make a dollar.

Jordan said he feels good about the organization’s focus on expense control, “which is especially important as we go into the final stages of merger integration planning and continuing to build that momentum in execution as we integrate the merger in the early part of 2018 with Capital Bank.

“The economy, from our perspective, continues to look steady. We see an environment very much like over the last several years, where you have sort of low single-digit economic growth. Customers continue to be somewhat optimistic. There's a bit more optimism about fiscal or tax reform, and the ability to see that improved growth rates in the economy.”

PROPERTY SALES 57 280 1,209
MORTGAGES 55 244 916
BUILDING PERMITS 158 699 2,751