Overview of First Horizon Bank

First Horizon Bank is a relatively large bank that has been operating for over a century and that first began operations in the year 1864. The bank’s primary office is located in the city of Memphis which is found in the state of Tennessee. Since 1934, the Federal Deposit Insurance Corporation has provided insurance to the bank. Along with the National Credit Union Administration (NCUA), the FDIC is the only other governmental agency that provides deposit insurance to American depositary institutions.   As a result of its size and presence, the bank is considered a national bank. Based on our estimates, we believe its asset base of $88,240 million ranks it in the 90th percentile of banks in the United States. First Horizon Bank is primarily a domestic bank and does not at the current time have operations outside of the United States. Domestically, the bank currently has 487 offices. In terms of headcount, the bank currently has 7,394 employees.

Details on the Bank’s Asset Composition

Some of the key components of the bank’s balance sheet are total assets of $88,240 million, total loans extended to customers of $55,760 million and customer deposits of $75,052 million. Approximately 22% of the bank’s deposits outstanding were transactional deposits, while domestic depositors made up 100% of the bank’s total deposit base. 49% of the domestic deposits outstanding are insured. Loans extended to customers of the bank currently comprise 64% of the bank’s total assets. Loans extended to customers for real estate purposes represented 54% of the total loans outstanding. In addition, 100% of real estate loans were domestic. First Horizon Bank has $11,540 million of outstanding 1-4 family residential loans (mortgages), which in total represents 20% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 1% and 26% of loans outstanding, respectively.

Contact Information For First Horizon Bank

  • Main Office Address: 165 Madison Ave., Memphis, TN 38103
  • Website: https://www.firsthorizon.com
  • Total Number of Branches: 487
  • Total Number of International Branches: None
  • Number of Employees: 7,394
  • FDIC Certificate Number: 4977
  • FDIC Community Bank: No
  • FDIC Field Office: Memphis
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 485559
  • Bank Charter Class: SM
  • Primary Regulator: FED

Financial Overview

first horizon bank-financial-metrics-sept-21

The bank had total assets of $88,240 million based on the latest available information. Its total assets have increased over the past year, with an increase of 6.7%. In terms of the bank’s lending activities, net loans represented 63.2% of its total assets, and stood at $55,760 million. The bank’s loan portfolio has decreased over the past year, with a decrease of 6.7%. Within the loan portfolio, residential mortgages make up 20% of the outstanding loans of the bank, and over the past year have registered a decrease of 13.6%. In addition, the bank provides loans to commercial and industrial businesses, which represents 26.3% of its total lending and stood at $14,833 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 0.2% of its total loan portfolio. Credit card-related lending represents 0.2% of the banks total lending. This represents the outstanding balance of credit cards that the bank has issued to its customers. Finally, the bank also engages in the provision of auto loans. These are loans provided to customers to help finance vehicle purchases. Auto loans represent 0.1% of the bank’s total lending.

Bank Liquidity and Funding

How a bank funds its activities is an important area to assess and monitor. As a depositor you want to make sure the bank is conservatively funded, and the same goes for customers. A large and growing deposit base is usually a good sign for a bank’s liquidity and funding. This is because customer deposits are often a cheap source of financing as many of those accounts do not pay interest or much interest. Looking at First Horizon Bank, they have total customer deposits of $75,052 million which over the past year has registered an increase of 7.4%. Furthermore, the bank has a loan to deposit ratio of 74% which is below the national average. Banks in the United States have a loan to deposit ratio of approximately 82%. A lower ratio is better since it means that a bank’s lending activities are more comfortably covered by its deposit base. The entirety of the bank’s deposit base stems from domestic depositors.

Bank Performance and Capital Metrics

first horizon bank-performance-metrics-sept-21

Above we have shown a summary of some of the performance metrics for First Horizon Bank compared with the average U.S. bank. Starting with its return on assets, over the past year it has declined. Importantly, on this metric we can also see that the bank is above the average bank. Return on assets tells us how productive a bank is being with its asset base. Moving on to the bank’s return on equity, which tells us how much of a return the bank has generated for its owners, over the past year it has declined. In addition, we can also see that the bank is above the average bank on this metric. Another metric that is helpful in contextualizing a bank’s return on equity is its leverage ratio. A lower ratio means that the bank has a higher reliance on borrowing to deliver its return on equity. In this case, the total leverage ratio is currently below the average U.S. bank, and has been relatively stable over the past year. Last but certainly not least is the tier 1 capital ratio. This is an important measure of the financial strength of a bank and its balance sheet. First Horizon Bank’s tier 1 capital ratio has improved over the past year, and is below the average U.S. bank.

Final Thoughts: First Horizon Bank

Overall, we believe First Horizon Bank deserves a rating of 3.1 out of 5.0, which is a above average rating. There are many factors that go into the calculation of our rating and almost all banks will have both positive and negative contributors. As an example, First Horizon Bank scores well on its cost of funds, which is above the national average. However when we consider the bank’s net interest margin, the bank does not have a good score mainly because it is below the national average which impacts its rating. As a reminder, our rating is based on our proprietary scoring system which uses data from an in-depth nationwide bank study we performed. None of the work presented is intended to be investment advice or advice of any sort and is presented purely for informational purposes.