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First Horizon (FHN) Tops Q4 Earnings, Records Tax Expense
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First Horizon National Corporation (FHN - Free Report) reported fourth-quarter 2017 adjusted earnings per share of 30 cents, surpassing the Zacks Consensus Estimate of 29 cents by 3.4%. Results exclude tax reform-related adjustments and other one-time items.
Including these adjustments, the company reported net loss available to common shareholders of $52.8 million or 20 cents per share compared with net income of $53.3 million or 23 cents recorded in the prior-year quarter.
Organic growth was reflected, aided by higher loans and deposits balances benefiting revenues. Also, rise in margins supported the results. However, rise in expenses and provisions remained a major drag.
For 2017, net income available to common shareholders was approximately $159.3 million or 65 cents per share, compared with $220.8 million or 94 cents reported in the prior-year period. On an adjusted basis, earnings came in at $271.2 million or $1.11 per share.
Segment wise, quarterly net income at Regional Banking and Fixed Income segments jumped 31% and 1% year over year, respectively. The Non-Strategic segment witnessed net loss compared with net income recorded in the year-ago period, while Corporate segment reported net loss in both the quarters.
Higher Revenues Offset Rise in Expenses
For 2017, total revenues came in at $1.3 billion, up 4% on a year-over-year basis.
Total revenues for the quarter were $375.3 million, up 17% year over year. However, the figure missed the Zacks Consensus Estimate of $385 million.
Net interest income for the quarter ascended 24% year over year to $242.1 million. Net interest margin of 3.27% expanded 27 basis points (bps) from 3.00% in the prior-year quarter. Further, non-interest income climbed 7% year over year to $133.1 million, due to rise in almost all components of income.
Non-interest expenses flared up 46% year over year to $346.7 million, mainly due to rise in all components of expenses, partially offset by lower legal fees. Adjusted expenses were $258 million.
Efficiency ratio came in at 92.4% compared with 74.4% reported in the year-earlier quarter. A rise in efficiency ratio indicates lower profitability.
Total loans, net of unearned income, came in at $27.7 billion, up 41% from the prior-year quarter. Total deposits amounted to $30.6 billion, up 35% year over year.
Credit Quality: A Mixed Bag
During the quarter, the company recorded $3 million provision for loan losses as against nil provision in the prior-year quarter. Also, non-performing assets escalated 8% year over year to $177.2 million. The quarter witnessed net charge-offs of $8.3 million as against recoveries of $0.5 million recorded in the comparable quarter last year.
Yet, allowance for loan losses was down 6% year over year to $189.6 million. As a percentage of period-end loans on an annualized basis, allowance for loan losses was 0.69%, down 34 bps.
Strong Capital Position
Tier 1 common equity ratio was 8.68% compared with 9.94% reported at the end of the prior-year quarter. Also, tier 1 capital ratio was 9.64% compared with 11.17% in the year-ago quarter.
As of Dec 31, 2017, return on assets was 0.59%, while adjusted ROA was 0.96%. Return on tangible common equity was 7.2%, while adjusted was 12.6%.
Our Viewpoint
Continued growth in loans and deposits, aiding revenues, will likely support First Horizon’s financial strength. Though escalating costs and provisions remain a concern, improving margins due to rising interest rates should continue easing margin pressure.
First Horizon National Corporation Price, Consensus and EPS Surprise
Hancock Holding Company released fourth-quarter and full-year 2017 results. Adjusted earnings per share for the quarter came in at 86 cents, surpassing the Zacks Consensus Estimate of 83 cents. Also, the bottom line compares favorably with the prior-year quarter’s earnings of 64 cents. Results benefited from an improvement in both net interest income and non-interest income. Further, growth in loans and deposits remained strong. However, an increase in expenses and higher provisions were the key dampeners.
Driven by top-line strength, Regions Financial Corporation (RF - Free Report) recorded an impressive earnings surprise of 3.8% in fourth-quarter 2017. Reported earnings of 27 cents per share outpaced the Zacks Consensus Estimate of 26 cents. Moreover, results compared favorably with the prior-year quarter’s earnings of 23 cents. Results included certain one-time items of 7 cents per share.
Among others, BancorpSouth, Inc. will report fourth-quarter results on Jan 24.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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First Horizon (FHN) Tops Q4 Earnings, Records Tax Expense
First Horizon National Corporation (FHN - Free Report) reported fourth-quarter 2017 adjusted earnings per share of 30 cents, surpassing the Zacks Consensus Estimate of 29 cents by 3.4%. Results exclude tax reform-related adjustments and other one-time items.
Including these adjustments, the company reported net loss available to common shareholders of $52.8 million or 20 cents per share compared with net income of $53.3 million or 23 cents recorded in the prior-year quarter.
Organic growth was reflected, aided by higher loans and deposits balances benefiting revenues. Also, rise in margins supported the results. However, rise in expenses and provisions remained a major drag.
For 2017, net income available to common shareholders was approximately $159.3 million or 65 cents per share, compared with $220.8 million or 94 cents reported in the prior-year period. On an adjusted basis, earnings came in at $271.2 million or $1.11 per share.
Segment wise, quarterly net income at Regional Banking and Fixed Income segments jumped 31% and 1% year over year, respectively. The Non-Strategic segment witnessed net loss compared with net income recorded in the year-ago period, while Corporate segment reported net loss in both the quarters.
Higher Revenues Offset Rise in Expenses
For 2017, total revenues came in at $1.3 billion, up 4% on a year-over-year basis.
Total revenues for the quarter were $375.3 million, up 17% year over year. However, the figure missed the Zacks Consensus Estimate of $385 million.
Net interest income for the quarter ascended 24% year over year to $242.1 million. Net interest margin of 3.27% expanded 27 basis points (bps) from 3.00% in the prior-year quarter. Further, non-interest income climbed 7% year over year to $133.1 million, due to rise in almost all components of income.
Non-interest expenses flared up 46% year over year to $346.7 million, mainly due to rise in all components of expenses, partially offset by lower legal fees. Adjusted expenses were $258 million.
Efficiency ratio came in at 92.4% compared with 74.4% reported in the year-earlier quarter. A rise in efficiency ratio indicates lower profitability.
Total loans, net of unearned income, came in at $27.7 billion, up 41% from the prior-year quarter. Total deposits amounted to $30.6 billion, up 35% year over year.
Credit Quality: A Mixed Bag
During the quarter, the company recorded $3 million provision for loan losses as against nil provision in the prior-year quarter. Also, non-performing assets escalated 8% year over year to $177.2 million. The quarter witnessed net charge-offs of $8.3 million as against recoveries of $0.5 million recorded in the comparable quarter last year.
Yet, allowance for loan losses was down 6% year over year to $189.6 million. As a percentage of period-end loans on an annualized basis, allowance for loan losses was 0.69%, down 34 bps.
Strong Capital Position
Tier 1 common equity ratio was 8.68% compared with 9.94% reported at the end of the prior-year quarter. Also, tier 1 capital ratio was 9.64% compared with 11.17% in the year-ago quarter.
As of Dec 31, 2017, return on assets was 0.59%, while adjusted ROA was 0.96%. Return on tangible common equity was 7.2%, while adjusted was 12.6%.
Our Viewpoint
Continued growth in loans and deposits, aiding revenues, will likely support First Horizon’s financial strength. Though escalating costs and provisions remain a concern, improving margins due to rising interest rates should continue easing margin pressure.
First Horizon National Corporation Price, Consensus and EPS Surprise
First Horizon National Corporation Price, Consensus and EPS Surprise | First Horizon National Corporation Quote
Currently, First Horizon carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of other Southeast banks
Hancock Holding Company released fourth-quarter and full-year 2017 results. Adjusted earnings per share for the quarter came in at 86 cents, surpassing the Zacks Consensus Estimate of 83 cents. Also, the bottom line compares favorably with the prior-year quarter’s earnings of 64 cents. Results benefited from an improvement in both net interest income and non-interest income. Further, growth in loans and deposits remained strong. However, an increase in expenses and higher provisions were the key dampeners.
Driven by top-line strength, Regions Financial Corporation (RF - Free Report) recorded an impressive earnings surprise of 3.8% in fourth-quarter 2017. Reported earnings of 27 cents per share outpaced the Zacks Consensus Estimate of 26 cents. Moreover, results compared favorably with the prior-year quarter’s earnings of 23 cents. Results included certain one-time items of 7 cents per share.
Among others, BancorpSouth, Inc. will report fourth-quarter results on Jan 24.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>