Big Earnings Movers: First Horizon National Corporation (NYSE:FHN)

First Horizon National Corporation (NYSE:FHN) reported earnings for the three months ended Mar2016 on April 15, 2016. The company earned $0.2 per share on revenue of $306.38M. Analysts had been modeling earning per share of $0.2 with $300.24M in revenue.

On April 15, 2016 The core businesses at First Horizon National Corporation (FHN)– regional banking through First Tennessee Bank and fixed income through FTN Financial – continued to deliver solid performances in the first quarter.

Building on its already-number-one market position, First Tennessee Bank generated average loan growth of 13 percent and average deposit growth of 8 percent for first quarter 2016 compared to first quarter 2015.  At FTN Financial average daily revenue was up 8 percent year over year.  Efforts throughout the company yielded a 7 percent increase in revenue for First Horizon from first quarter 2015 to first quarter 2016 and fully diluted earnings per share of $.20.

First Horizon continued to actively deploy capital, repurchasing $75 million of its own shares during the first quarter and increasing its common dividend by 17 percent.

“First quarter was another solid quarter at First Horizon.  Our focus on giving our customers a differentiated experience through our team of outstanding bankers and advisors is paying off with strong revenue and loan growth,” said Bryan Jordan, First Horizon’s chairman and CEO.  “Our bankers continue to deliver on the value of doing business with Tennessee’s bank, and our fixed income team continues to build on the strength of its extensive distribution platform.”

Financial highlights

• Net income available to common shareholders was $47.8 million, or $.20 per diluted share, in first quarter 2016 compared to $47.0 million, or $.20 per diluted share, in fourth quarter 2015.  Net interest income increased to $172.1 million in the first quarter from $166.7 million last quarter.  The net interest margin rose to 2.88 percent in the first quarter from 2.82 percent last quarter.  The December rate increase by the Federal Reserve contributed to increases in both net interest income and net interest margin for the quarter.


• Asset quality trends began to normalize.  First quarter’s net charge-offs of $9 million annualize to a net charge-off ratio of 0.21 percent.  Non-performing assets were down $18 million from first quarter 2015 but up $7 million from fourth quarter 2015.


• Capital levels remained strong, with the Common Equity Tier 1 ratio estimated at 10.35 percent.  First Horizon repurchased 6 million shares in the first quarter at an average price of $12.32 per share.  The company also returned capital to shareholders by increasing its quarterly cash dividend to 7 cents per share starting April 1.

First Horizon National Corporation earnings per share showed a decreasing trend of -62.6% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 105%.Analysts project EPS growth over the next 5 years at 8%. It has EPS annual growth over the past 5 fiscal years of 30% when sales declined -3.5. It reported 8.8% sales growth, and 161.3% EPS growth in the last quarter.

The stock is trading at $14.56, up 27.19% from 52-week low of $11.51. The stock trades down -9.72% from its peak of $16.35 and 0.76% above the consensus price target of $14.67. Its volume clocked up at 2 million shares which is higher than the average volume of 1.88 million shares. Its market capitalization currently stands at $3.39B.