MEMPHIS, Tenn. – First Horizon (NYSE:FHN) today announced second quarter 2018 results with reported earnings per share (EPS) of $0.25; on an adjusted basis, earnings per share were $0.36.1

 

“Our second quarter results demonstrate continued progress towards our goal of building a strong, differentiated and leading bank in the Southeast,” said Bryan Jordan, First Horizon’s chairman and CEO. “The current operating environment remains favorable, and we’re pleased with the strong momentum and customer activity we have seen across our portfolio, especially in our attractive high return specialty businesses. We believe First Horizon is well-positioned to deliver sustainable top-quartile returns and capitalize on our compelling growth and savings opportunities.”

 

Compelling growth opportunities following successful merger and systems conversion

 

In the second quarter, First Horizon completed its systems integration with Capital Bank, creating the fourth largest regional bank in the Southeast with approximately 300 branches and $40 billion in assets. The deal economics have improved since first announced in 2017, with 2019 EPS accretion estimated to be 17 percent, more than double original assumptions. The Company also expects to achieve $25 to $30 million of revenue synergies and $85 million of annual run-rate cost savings by 2019.

 

“We successfully completed the Capital Bank integration and systems conversion and appreciate our hardworking employees and loyal customers who have helped drive our success,” Jordan said. “With the integration complete, our focus is on driving organic growth, strengthening our presence in attractive markets in the Southeast, achieving operational efficiencies and building on the momentum in our profitable specialty businesses.”

 

 

Second Quarter 2018 Financial Highlights (all comparisons vs second quarter 2017)

 

 

Reported EPS /

Adjusted EPS:

$0.25 / $0.361

 

Reported ROTCE /

Adjusted ROTCE:

12.6%1 / 18.2%1

 

Reported ROA /

Adjusted ROA:

0.86% / 1.22%1

 

Regional Banking Highlights

  • Pre-tax income up 49 percent
  • Revenue up 45 percent from increased net interest income and higher fee income
  • Net interest income up 53 percent and fee income up 21 percent
  • Efficiency ratio improved to 55 percent from 57 percent
  • Average loans up 47 percent and average deposits up 36 percent

 

Other Highlights

 

  • Net interest margin expanded to 3.53 percent from 3.07 percent
  • Asset Quality remains stable
  • Total average assets of $40 billion

 

 

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