MEMPHIS, Tenn., July 20, 2004 (PRIMEZONE) -- First Horizon National Corporation (NYSE:FHN), formerly First Tennessee National Corporation, announced today four new financial reporting segments: Retail/Commercial Banking, Mortgage Banking, Capital Markets and Corporate. FHN formerly reported five segments by primary brand: First Horizon, First Tennessee Banking Group, FTN Financial, Transaction Processing and Corporate. By realigning the segments along similar operations and industry classifications, the underlying business mix and growth opportunities of each of the segments are more transparent.
"This new segmentation reflects the diverse national financial services company First Horizon is today," said Ken Glass, chairman and CEO of First Horizon. "Our national expansion strategy is picking up momentum as we have enhanced our ability to generate cross-selling opportunities with targeted customers across all of our business segments. We are pleased with our progress and believe we are uniquely positioned for continued success."
The four segments, along with their operating profiles, are outlined below:
Retail/Commercial Banking
Retail/Commercial Banking consists of deposit taking, commercial and consumer lending, investments, insurance, financial planning, trust services, asset management, credit card, cash management, transaction processing and correspondent services. Retail/Commercial Banking now includes portfolio lending activities such as equity lending and construction loans originated by First Horizon Home Loans which were previously in the First Horizon segment.
There are 194 full-service financial centers in Tennessee, Virginia and Mississippi and more than 500 ATMs providing our "All Things Financial" strategy to six metro areas. Consumer lending activities have been offered to all qualifying mortgage origination customers in the 42 states we serve nationwide. As a result, consumer loans have been growing 29 percent over the last two years. Additionally, commercial construction lending activities have been growing 22 percent as we have expanded into 25 metropolitan areas across the country. Wealth management and small business lending centers have begun their national expansion initiatives, reaching 12 and eight markets respectively. Continued growth in these initiatives will enable First Horizon to continue to serve more metropolitan markets with full-service financial centers each year and to reach dozens of markets with specialized sales forces.
Retail/Commercial Banking activities generated $274 million in revenues during the first quarter, representing 48 percent of First Horizon's total revenues and $89 million in pre-tax income, representing 50 percent of First Horizon's earnings.
Mortgage Banking
Mortgage Banking primarily consists of first lien mortgage originations and servicing. Additional activities related to the mortgage banking business include fees from appraisals, inspections, captive reinsurance, federal flood insurance, property tax payment service, credit report scoring services, and early GNMA buyout income. First Horizon Home Loans operates in 40 states across the country through approximately 1,800 relationship managers in 245 offices.
Mortgage Banking activities generated $163 million in revenues during the first quarter, representing 29 percent of First Horizon's total revenues and $62 million in pre-tax income, representing 34 percent of First Horizon's earnings.
Capital Markets
Capital Markets is a full-service brokerage operation focused on institutional investors. Traditionally, depository institutions have composed the majority of our customer base; however, recently mutual funds, municipalities, foundations and other money managers have become an increasingly larger percentage of the business. Revenues from other fee sources includes fee income from activities such as investment banking, equity research, portfolio advisory and the sale of Bank Owned Life Insurance. Capital Markets has offices in Memphis, New York, Chicago, Boston, Charlotte, Phoenix, Los Angeles, Dallas, Mobile, Kansas City, Cleveland and Nashville.
Capital Markets activities generated $120 million in revenues during the first quarter, representing 21 percent of First Horizon's total revenues and $31 million in pre-tax income, representing 17 percent of First Horizon's earnings.
Corporate
Corporate consists of executive management, enterprise-wide risk management, corporate finance, corporate communications and legal. Additionally, this segment now includes the funding function for the corporation and any impact from balance sheet positioning.
Corporate activities generated $11 million in expenses during the first quarter, representing 3 percent of First Horizon's total expenses and $2 million in net pre-tax loss.
About First Horizon
The 12,000 employees of First Horizon National Corp. (NYSE:FHN) provide financial services to individual and business customers through hundreds of offices located in more than 40 states. The corporation' s three major brands -- FTN Financial, First Horizon Home Loans and First Tennessee -- provide customers with a broad range of products and services including:
-- Capital Markets, with one of the nation's top underwriters
of U.S. government agency securities
-- Mortgage Banking, with one of the nation's top 15 mortgage
originators and servicers, which earned a top-10 ranking
in customer satisfaction from J.D. Power and Associates
-- Retail/Commercial Banking, with the largest market share
in Tennessee and one of the highest customer retention
rates of any bank in the country
FHN companies have been recognized as some of the nation's best employers by AARP, Working Mother, Business Week and Fortune magazines. FHN also was named one of the nation's 100 best corporate citizens by Business Ethics magazine. More information can be found at www.FirstHorizon.com.
BUSINESS SEGMENT INFORMATION
(unaudited)
------------------------------------------------------------------
(Thousands) 1Q04 4Q03 3Q03
------------ ------------ ------------
Total Consolidated
Net interest income $ 196,009 $ 196,442 $ 214,156
Provision 14,229 15,392 16,355
Noninterest income 370,125 386,558 392,349
Noninterest expense 371,976 382,004 409,934
------------ ------------ ------------
Pre-tax income 179,929 185,604 180,216
Income taxes 60,658 67,959 61,933
------------ ------------ ------------
Net income $ 119,271 $ 117,645 $ 118,283
============ ============ ============
Average assets $ 24,894,010 $ 24,630,536 $ 27,436,834
------------ ------------ ------------
Retail/Commercial
Banking
Net interest income $ 158,102 $ 157,888 $ 153,814
Provision 14,249 15,333 16,319
Noninterest income 115,982 130,998 105,390
Noninterest expense 170,402 186,280 175,347
------------ ------------ ------------
Pre-tax income 89,433 87,273 67,538
Income taxes 27,911 31,953 21,420
------------ ------------ ------------
Net income $ 61,522 $ 55,320 $ 46,118
============ ============ ============
Average assets $ 15,778,571 $ 15,169,385 $ 14,447,050
------------ ------------ ------------
Mortgage Banking
Net interest income $ 32,400 $ 31,232 $ 61,819
Provision (20) 59 36
Noninterest income 130,842 131,608 155,875
Noninterest expense 101,486 95,020 115,191
------------ ------------ ------------
Pre-tax income 61,776 67,761 102,467
Income taxes 22,676 25,870 37,774
------------ ------------ ------------
Net income $ 39,100 $ 41,891 $ 64,693
============ ============ ============
Average assets $ 4,619,952 $ 4,663,611 $ 7,894,688
------------ ------------ ------------
Capital Markets
Net interest income $ 291 $ 654 $ 1,028
Noninterest income 119,273 119,979 124,092
Noninterest expense 88,806 84,879 90,762
------------ ------------ ------------
Pre-tax income 30,758 35,754 34,358
Income taxes 11,776 13,107 12,906
------------ ------------ ------------
Net income $ 18,982 $ 22,647 $ 21,452
============ ============ ============
Average assets $ 1,597,700 $ 1,938,906 $ 2,455,052
------------ ------------ ------------
Corporate
Net interest income $ 5,216 $ 6,668 $ (2,505)
Noninterest income 4,028 3,973 6,992
Noninterest expense 11,282 15,825 28,634
------------ ------------ ------------
Pre-tax income (2,038) (5,184) (24,147)
Income taxes (1,705) (2,971) (10,167)
------------ ------------ ------------
Net income $ (333) $ (2,213) $ (13,980)
============ ============ ============
Average assets $ 2,897,787 $ 2,858,634 $ 2,640,044
------------ ------------ ------------
BUSINESS SEGMENT INFORMATION
(unaudited)
------------------------------------------------------------
(Thousands) 2Q03 1Q03
------------ ------------
Total Consolidated
Net interest income $ 200,906 $ 194,280
Provision 27,501 27,450
Noninterest income 446,499 442,178
Noninterest expense 448,370 427,364
------------ ------------
Pre-tax income 171,534 181,644
Income taxes 53,182 62,615
------------ ------------
Net income $ 118,352 $ 119,029
============ ============
Average assets $ 25,111,850 $ 23,315,468
------------ ------------
Retail/Commercial
Banking
Net interest income $ 144,021 $ 141,108
Provision 27,913 25,565
Noninterest income 108,561 97,940
Noninterest expense 178,473 169,034
------------ ------------
Pre-tax income 46,196 44,449
Income taxes 7,986 13,231
------------ ------------
Net income $ 38,210 $ 31,218
============ ============
Average assets $ 13,785,192 $ 13,088,150
------------ ------------
Mortgage Banking
Net interest income $ 54,053 $ 43,500
Provision (412) 1,885
Noninterest income 176,325 200,440
Noninterest expense 127,026 129,007
------------ ------------
Pre-tax income 103,764 113,048
Income taxes 38,293 41,804
------------ ------------
Net income $ 65,471 $ 71,244
============ ============
Average assets $ 7,061,986 $ 6,147,618
------------ ------------
Capital Markets
Net interest income $ 1,750 $ 2,189
Noninterest income 160,389 141,327
Noninterest expense 117,324 103,837
------------ ------------
Pre-tax income 44,815 39,679
Income taxes 16,720 15,062
------------ ------------
Net income $ 28,095 $ 24,617
============ ============
Average assets $ 1,899,032 $ 1,661,233
------------ ------------
Corporate
Net interest income $ 1,082 $ 7,483
Noninterest income 1,224 2,471
Noninterest expense 25,547 25,486
------------ ------------
Pre-tax income (23,241) (15,532)
Income taxes (9,817) (7,482)
------------ ------------
Net income $ (13,424) $ (8,050)
============ ============
Average assets $ 2,365,640 $ 2,418,467
------------ ------------
Certain previously reported amounts have been reclassified
to agree with current presentation.