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VOL. 133 | NO. 142 | Wednesday, July 18, 2018

First Horizon Reports Strong Q2 as Capital Bank Merger Wraps Up

By Patrick Lantrip

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With the Capital Bank merger and integration complete, Memphis-based First Horizon National Corp. is now the fourth-largest bank in the Southeast, boasting roughly 300 branches and $40 billion in assets.

This in turn has First Horizon, the parent company of First Tennessee Bank, bullish on its direction, with expectations of $25 million to $30 million in revenue synergies and $85 million of annual cost savings by the end of the year.

“We are very excited about having the system integration completed and moving into the execution phase,” Bryan Jordan, First Horizon’s chairman and CEO said Tuesday, July 17, during the company’s second-quarter earnings call. “We feel very, very good about our position in new markets and the opportunities we have to grow.”

During the call, First Horizon reported non-adjusted earnings per share, or EPS, of $0.25 and an adjusted EPS of $0.36. As a result of the merger, the company now estimates a 2019 EPS accretion of 17 percent, which is more than double its original projections when the deal was announced.

“We remain more confident about the deal today than when we announced it last year,” First Horizon chief financial officer William “BJ” Losch said. “As you can see, we now estimate EPS accretion up more than twice the original announcement due to great execution on things that we can control, like higher cost saves and tangible revenue synergies, as well as benefiting from tax reform.”

Losch said that with more cost savings, revenue synergies and growth to come, the company expects to continue to improve its profitability and growth profile.

“Our second-quarter performance was very strong, and we’re pleased with the trajectory that it provides to us the rest of the year and into 2019,” Losch said.

He added that First Horizon’s key priorities in the near term are to deliver on the aforementioned higher earnings accretion from Capital Bank via cost savings and revenue synergies, maintain strong performance and build momentum in the new markets in the Carolinas and Florida, and continue to enhance relationships that drive customer acquisition and retention.

Other highlights touched on during the earnings report included a 49 percent increase in pre-tax income, a 45 percent increase in revenue from increased net interest income and higher fee income, a 47 percent increase in average loans, and a 36 percent increase in average deposits.

“I’m pleased with our second-quarter results and excited about our momentum going into the second half of 2018 and into 2019,” Jordan said.

On Nov. 6, First Horizon will hold an investor day in Nashville where the company plans to lay out more information on its strategies and plans.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 57 280 1,209
MORTGAGES 55 244 916
FORECLOSURE NOTICES 8 52 151
BUILDING PERMITS 158 699 2,751
BANKRUPTCIES 37 157 618
BUSINESS LICENSES 12 77 276
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0