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VOL. 133 | NO. 44 | Thursday, March 1, 2018

Year of Milestones, Major News for First Horizon

By Andy Meek

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Ahead of its annual meeting of shareholders next month, First Tennessee Bank announced this week customers had given it top grades in the Phoenix-Hecht 2018 Quality Index for Middle Market Banking, an index that includes businesses with revenue between $20 million and $500 million.

As part of its top marks across five categories, First Tennessee also got a “best in class” A+ rating for overall customer service. “We appreciate (the) loyalty and trust of our customers, and we’re grateful that they recommend us to others,” David Popwell, president of banking for First Tennessee’s parent company, First Horizon National Corp., said about the news.

Bryan Jordan

Meanwhile, shares of First Horizon year-to-date were down almost 4 percent through the middle of the week, making the stock an underperformer compared to the broader market. That’s despite the fact First Horizon just closed the books on a 12-month period that CEO Bryan Jordan has called “outstanding and transformative” for the company, which is now a $41 billion institution thanks to the completion of its merger with North Carolina-based Capital Bank.

For these and other reasons, investors have plenty to think about in advance of the company’s annual meeting April 24, the location of which is shifting from the usual setting of the company’s Downtown headquarters to its newly renovated First Ops office near Memphis International Airport.

Among the highlights of 2017 for First Tennessee Bank’s parent company:

• Completing the $2.2 billion acquisition of Capital Bank, a $10 billion institution with more than 150 branches in four states

• Completing the acquisition of Houston-based Coastal Securities, a national leader in the trading, securitization and analysis of Small Business Administration loans that becomes part of its capital markets division, FTN Financial

• Hiking its annual common dividend rate by 29 percent in 2017 – then again early this year by another 33 percent

• Growing its regional banking pre-tax income by 36 percent, compared to 2016.

“Our strategic and operating results in 2017 were outstanding,” Jordan wrote to shareholders in a letter that provided details about the upcoming meeting. “We completed three acquisitions, growing our total assets to $41 billion and becoming the fourth largest regional bank in the Southeast, with over 800,000 customers and nearly 350 branches in Tennessee, North Carolina, South Carolina, Florida, Mississippi, Georgia, Texas and Virginia.

“Loan and deposit growth was exceptional across First Tennessee, and we retained our No. 1 deposit market share in Tennessee and continued to grow organically in our other markets. First Horizon continued to receive recognition as a great banking organization and a great place to work.”

The major developments extended into the new year, with First Horizon joining the growing ranks of companies using planned savings from the recently enacted federal tax legislation to hand out raises and bonuses. First Horizon announced at the end of 2017 it would award one-time $1,000 bonuses to about 70 percent of its employees, and the company in recent weeks also bumped up the minimum pay level of employees to $15 an hour.

The agenda for the shareholders’ meeting so far has a routine list of items that include the election of 12 directors to serve until the 2019 meeting, a vote on technical amendments to modernize the company’s restated charter, a vote on an advisory resolution to approve executive compensation, and a ratification of the appointment of auditors.

The company’s board of directors appears satisfied with the direction and performance of the organization. At the end of October, the board approved a $5.5 million bonus for Jordan, who has been the company’s chairman since 2012 and its chief executive since 2008.

“We believe the future for our business and industry is strong,” Jordan told CNBC’s Jim Cramer in an interview at the end of January.

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