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Section 1: 8-K (FORM 8-K)

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

Form 8-K
_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): April 16, 2019  

First Horizon National Corporation
(Exact Name of Registrant as Specified in Charter)

TENNESSEE001-1518562-0803242
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

165 MADISON AVENUE, MEMPHIS, TENNESSEE 38103
(Address of Principal Executive Offices) (Zip Code)

(901) 523-4444
(Registrant's telephone number, including area code)


(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [   ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [   ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 
 

Item 2.02. Results of Operations and Financial Condition.

 

Item 7.01. Regulation FD Disclosure.

Furnished as Exhibit 99.1 is a copy of the First Horizon National Corporation ("First Horizon" or "FHN”) earnings release for the quarter ended March 31, 2019, which is scheduled to be released April 16, 2019.

The foregoing information is furnished pursuant to Item 2.02, "Regulation of Operations and Financial Condition," and Item 7.01, "Regulation FD Disclosure." The exhibit speaks as of the date thereof and FHN does not assume any obligation to update in the future the information therein.

Use of Non-GAAP Measures and Regulatory Measures that are not GAAP in the Exhibit

Certain measures are included in the exhibit that are “non-GAAP,” meaning (under U.S. financial reporting rules) they are not presented in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and also are not codified in the U.S. banking regulations currently applicable to FHN. Although other entities may use calculation methods that differ from those used by FHN for non-GAAP measures, FHN’s management believes such measures are relevant to understanding the financial condition, capital position, and financial results of FHN and its business segments. Non-GAAP measures are reported to FHN’s management and directors through various internal reports.

Presentation of regulatory measures, some of which follow regulatory definitions rather than GAAP, provides a meaningful base for comparability to other financial institutions subject to the same regulations as FHN. Such measures are used by the various banking regulators in reviewing the performance, stability, and capital adequacy of financial institutions they regulate. Although not GAAP terms, these regulatory measures are not considered “non-GAAP” under U.S. financial reporting rules as long as their presentation conforms to regulatory standards. Regulatory measures used in the exhibit include: common equity tier 1 capital, generally defined as common equity less goodwill, other intangibles, and certain other required regulatory deductions; tier 1 capital, generally defined as the sum of core capital (including common equity and instruments that cannot be redeemed at the option of the holder) adjusted for certain items under risk based capital regulations; and risk weighted assets (“RWA”), which is a measure of total on- and off-balance sheet assets adjusted for credit and market risk, used to determine regulatory capital ratios. The non-GAAP measures presented in the exhibit include: Return on average tangible common equity (“ROTCE”), adjusted ROTCE, adjusted return on average assets ("ROA"), adjusted return on average common equity ("ROCE"), and adjusted earnings per share ("EPS").

Reconciliations of non-GAAP to GAAP measures and presentation of the most comparable GAAP items are presented at the end of the earnings release.

Forward-Looking Statements

This earnings release contains forward-looking statements involving significant risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking information. Those factors include general economic and financial market conditions, including expectations of and actual timing and amount of interest rate movements including the slope of the yield curve, competition, customer and investor responses to these conditions, ability to execute business plans, geopolitical developments, recent and future legislative and regulatory developments, natural disasters, and items mentioned in this earnings release and in FHN's most recent financial supplement and investor slide presentation, as well as critical accounting estimates and other factors described in FHN’s recent filings with the SEC. FHN disclaims any obligation to update any such forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements to reflect future events or developments.

Item 9.01. Financial Statements and Exhibits.

(d)   Exhibits

The following exhibit is furnished pursuant to Items 2.02 and 7.01, is not to be considered "filed" under the Securities Exchange Act 1934, as amended ("Exchange Act"), and shall not be incorporated by reference into any of First Horizon's previous or future filings under the Securities Act of 1933, as amended, or the Exchange Act.

Exhibit #
Description
   
99.1 First Horizon National Corporation earnings release issued for the quarter ended March 31, 2019.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 First Horizon National Corporation
   
  
Date: April 16, 2019By: /s/ William C. Losch III        
  William C. Losch III
  Executive Vice President and Chief Financial Officer
  

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Section 2: EX-99.1 (PRESS RELEASE)

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EXHIBIT 99.1

First Horizon Reports First Quarter Results and Highlights

Company Successfully Executing on Strategic Priorities

MEMPHIS, Tenn., April 16, 2019 (GLOBE NEWSWIRE) -- First Horizon National Corp. (NYSE:FHN) today announced its first quarter 2019 financial results. Reported earnings per share (EPS) were $0.31, up three percent from fourth quarter 2018; on an adjusted basis1, earnings per share were $0.35.

“During the first quarter, we delivered on our priorities to drive profitable growth in our key markets and specialty areas, improve efficiency, effectively return capital to shareholders, and identify opportunities to provide more value to our customers,” said Bryan Jordan, First Horizon’s chairman and CEO. “Looking ahead, we remain focused on executing on our strategic plan and are confident in our ability to achieve our objectives as we navigate evolving market conditions.”

The earnings results indicate the company’s focus on its strategic priorities announced last November, which are to dominate Tennessee; profitably grow key markets and specialty areas; transform the customer experience; and optimize the expense base.

Highlights for the quarter include:

First Quarter 2019 Financial Highlights
       
 Diluted EPS/
Adjusted EPS1
$0.31/ $0.35
  ROA/
Adjusted ROA1
1.03% / 1.16%
  ROCE /
Adjusted ROCE1
9.1% / 10.3%
 ROTCE1/
Adjusted ROTCE1
14.2% / 16.1%
       

1These are non-GAAP numbers that are reconciled to reported GAAP numbers in the FHN Non-GAAP to GAAP Reconciliation table.


Consolidated Highlights

Quarterly, Unaudited

       1Q19 Changes vs.
(Dollars in Thousands)1Q19 4Q18 1Q18 4Q181Q18
Income Statement          
Net interest income$294,508  $302,512  $301,173  (3)%(2)%
Noninterest income141,045  110,274  136,017  28 %4 %
  Total revenues435,553  412,786  437,190  6 %*  
Provision /(Provision Credit) for loan losses9,000  6,000  (1,000) 50 %NM  
Noninterest expense296,090  281,932  313,265  5 %(5)%
  Income before income taxes130,463  124,854  124,925  4 %4 %
Provision for income taxes27,058  24,049  29,931  13 %(10)%
  Net income103,405  100,805  94,994  3 %9 %
Net income attributable to noncontrolling interest2,820  2,910  2,820  (3)%*  
Preferred stock dividends1,550  1,550  1,550  *  *  
  Net income available to common shareholders$99,035  $96,345  $90,624  3 %9 %
           
NIM3.31 %3.38 %3.43 %(2)%(3)%
Diluted Shares319,581  323,885  330,344  (1)%(3)%
           
Balance Sheet          
Average Loans$27,313,300  $27,154,643  $27,052,065  1 %1 %
Average Deposits32,497,478  31,847,754  30,208,300  2 %8 %
Average Assets40,883,192  40,302,528  40,350,724  1 %1 %
Average Common Equity4,418,180  4,339,643  4,182,861  2 %6 %
NM - Not meaningful          
* Amount is less than one percent.          
           

Consolidated Highlights include:

Regional Banking Highlights
Quarterly, Unaudited

       1Q19 Changes vs.
(Dollars in Thousands)1Q19 4Q18 1Q18 4Q181Q18
Net interest income$287,157  $299,640  $293,194  (4)%(2)%
Noninterest income72,117  69,208  79,963  4 %(10)%
  Total revenues359,274  368,848  373,157  (3)%(4)%
Provision for loan losses13,958  7,850  4,458  78 %NM  
Noninterest expense199,959  206,372  201,749  (3)%(1)%
  Income before income taxes$145,357  $154,626  $166,950  (6)%(13)%
NM - Not meaningful          
           

Regional Banking highlights include:

·  Regional Banking had strong deposit and loan growth driven by increases in key markets and specialty lending.

 

Fixed Income Highlights
Quarterly, Unaudited

       1Q19 Changes vs.
(Dollars in Thousands)1Q19 4Q18 1Q18 4Q181Q18
Net interest income$7,322  $9,002  $8,475  (19)%(14)%
Noninterest income53,807  39,678  45,605  36 %18 %
  Total revenues61,129  48,680  54,080  26 %13 %
Noninterest expense51,227  46,947  49,931  9 %3 %
  Income before income taxes$9,902  $1,733  $4,149  NM  NM  
NM - Not meaningful          
           

Fixed Income Highlights include:

Capital and Liquidity Highlights
Quarterly, Unaudited

       1Q19 Changes vs.
(Dollars in Thousands)1Q19 4Q18 1Q18 4Q181Q18
Common dividends declared$44.3  $38.4  $39.2  15 %13 %
Preferred dividends declared1.6  1.6  1.6  *  *  
Share repurchases51.5  80.5    (36)%NM  
Capital Ratios (a)          
Common Equity Tier 19.66 %9.77 %8.98 %    
Tier 110.69 %10.80 %9.98 %    
Total Capital11.82 %11.94 %11.25 %    
Leverage9.02 %9.09 %8.50 %    
(a) Regulatory capital ratios calculated under the Basel III risk-based capital rules as phased-in; current quarter is an estimate.
NM - Not meaningful          
* Amount is less than one percent.          
           

Capital Highlights include:

Asset Quality Highlights
Quarterly, Unaudited

       1Q19 Changes vs.
(Dollars in Thousands)1Q19 4Q18 1Q18 4Q181Q18
Allowance for loan losses$184,911  $180,424  $187,194  2 %(1)%
Allowance / loans %0.66% 0.66% 0.69%     
Net Charge-offs$4,513  $11,535  $1,361  (61)%NM  
Net charge-offs %0.07% 0.17% 0.02%     
Nonperforming Loans (a)$181,625  $147,749  $132,031  23 %38 %
NPL %0.65% 0.54% 0.48%     
30+ delinquencies63,693  75,164  79,352  (15)%(20)%
30+ delinquencies %0.23% 0.27% 0.29%     
(a) Excludes loans held-for-sale.          
NM - Not meaningful          
           
           

Asset Quality Highlights include:

Use of Non-GAAP Measures
Several financial measures in this release are non-GAAP, meaning they are not presented in accordance with generally accepted accounting principles (GAAP) in the U.S. The non-GAAP items presented in this release are adjusted earnings per share ("EPS"), adjusted return on average assets ("ROA"), adjusted return on average common equity (“ROCE”) and return on tangible common equity ("ROTCE"). These profitability measures are reported to First Horizon’s management and directors through various internal reports. First Horizon’s management believes these measures are relevant to understanding the financial results of First Horizon and its business segments. 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 First Horizon. First Horizon has reconciled each of these measures to a comparable GAAP measure below:

    
FHN NON-GAAP TO GAAP RECONCILIATION   
Quarterly, Unaudited   
(Dollars and shares in thousands, except per share data)   
    
Adjusted Diluted EPS 1Q19
  
Net income available to common ("NIAC") (GAAP)a$99,035  
Plus Tax effected notable items (Non-GAAP) (a) $13,660  
Adjusted NIAC (Non-GAAP)b$112,695  
    
Diluted Shares (GAAP)c319,581  
    
Diluted EPS (GAAP)a/c$0.31  
Adjusted diluted EPS (Non-GAAP)b/c$0.35  
    
    
Adjusted Return on Average Assets ("ROA") 1Q19
  
Net Income ("NI") (GAAP) $103,405  
Plus Tax effected notable items (Non-GAAP) (a) $13,660  
Adjusted NI (Non-GAAP) $117,065  
    
NI (annualized) (GAAP)d$419,365  
Adjusted NI (annualized) (Non-GAAP)e$474,764  
    
Average assets (GAAP)f$40,883,192  
    
ROA (GAAP)d/f1.03 %
Adjusted ROA (Non-GAAP)e/f1.16 %
    
    
Adjusted Return on Average Common Equity ("ROCE")/
Return on Average Tangible Common Equity ("ROTCE")
 1Q19
  
NIAC (GAAP) $99,035  
Plus Tax effected notable items (Non-GAAP) (a) $13,660  
Adjusted NIAC (Non-GAAP) $112,695  
    
NIAC (annualized) (GAAP)g$401,642  
Adjusted NIAC (annualized) (Non-GAAP)h$457,041  
    
Average Common Equity (GAAP)i$4,418,180  
Intangible Assets (GAAP) (b) $1,584,694  
Average Tangible Common Equity (Non-GAAP)j$2,833,486  
    
ROCE (GAAP)g/i9.09 %
Adjusted ROCE (Non-GAAP)h/i10.34 %
    
ROTCE (Non-GAAP)g/j14.17 %
Adjusted ROTCE (Non-GAAP)h/j16.13 %
    
    

(a) 1Q19 includes $12.2 million of pre-tax restructuring-related expenses associated with efficiency initiatives and $5.7 million of pre-tax acquisition-related expenses primarily associated with the Capital Bank Financial Corp. (“CBF”) acquisition, which impact certain performance measures, and have been adjusted using an incremental tax rate of approximately 23 percent.

(b) Includes goodwill and other intangible assets, net of amortization.

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.FirstHorizon.com.  The call and slide presentation may involve forward-looking information, including guidance.

Callers wishing to participate may call toll-free starting at 8:15 a.m. CT on April 16 by dialing 888-317-6003 and entering access code 7877722. The number for international participants is 412-317-6061 and the access code is 7877722.

Participants can also listen to the live audio webcast with the accompanying slide presentation through the investor relations section of www.fhnc.com. A replay will be available from noon CT on April 16, until midnight CT on April 30. To listen to the replay, dial 877-344-7529 or 412-317-0088. The access code is 10129815. The event also will be archived and available beginning April 16 by midnight CT in the events and presentations section of http://ir.fhnc.com.

Disclaimers and Other Information
This communication contains forward-looking statements involving significant risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking information. Those factors include general economic and financial market conditions, including expectations of and actual timing and amount of interest rate movements including the slope of the yield curve, competition, ability to execute business plans, geopolitical developments, recent and future legislative and regulatory developments, inflation or deflation, market (particularly real estate market) and monetary fluctuations, natural disasters, customer, investor and regulatory responses to these conditions and items already mentioned in this press release, as well as critical accounting estimates and other factors described in First Horizon's annual report on Form 10-K and other recent filings with the SEC. First Horizon disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements included herein or therein to reflect future events or developments or changes in expectations.

About First Horizon
First Horizon National Corp. (NYSE:FHN) provides financial services through its Capital Bank, First Tennessee Bank, FTB Advisors, and FTN Financial businesses. The banking subsidiary was founded in 1864, has the 14th oldest national bank charter in the country and the largest deposit market share in Tennessee. The company operates more than 250 bank locations across the Southeast and 28 FTN Financial offices across the U.S. FTB Advisors wealth management group has more than 300 financial professionals and about $4.8 billion in assets under management. FTN Financial is a capital markets industry leader in fixed income sales, trading and strategies for institutional customers in the U.S. and abroad. The company has been ranked by American Banker magazine among the Top 10 Most Reputable U.S. banks and as one of the nation’s best employers by the National Association for Female Executives and Fortune magazine. More information is available at www.FirstHorizon.com.

FHN-G

CONTACT:   
First Horizon Investor Relations, Aarti Bowman, (901) 523-4017
First Horizon Media Relations, Silvia Alvarez, (901) 523-4465

A PDF accompanying this announcement is available at 
http://ml.globenewswire.com/Resource/Download/ca037e03-e4bb-4969-9e0b-2a9cbe2e7211

 

 

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