Tennessee's biggest bank is reaping the benefits from its merger with Louisiana's biggest bank last summer to boost its operating profits, revenues and stock price in the first quarter.
First Horizon Bank reported Wednesday quarterly earnings of 51 cents per share, beating the consensus estimate of Wall Street analysts for 37 cents per share in the three-month period. The results for the first quarter of 2021 also topped the comparable earnings of 5 cents per share a year ago. The results were adjusted for non-recurring expenses related to First Horizon's purchase last year of Iberiabank in Lafayette, Louisiana.
First Horizon CEO Bryan Jordan said the bank was able to generate about $10 million in annual revenue after securing $400 million of commercial loan commitments. Many of those relationships are tied to asset-backed lending and equipment finance products that Iberiabank offered.
First Horizon did not include revenue opportunities in its projections for the $3.9 billion merger, which closed in July.
First Horizon posted revenues of $806 million for the quarter ended March 2021, surpassing the consensus estimate by 4.6%.
"Our balanced business model and countercyclical businesses continued to perform well in the first quarter," Jordan said. "Credit quality improved, and our expense discipline resulted in incremental cost savings."
Jordan said he expects the U.S. economy to improve throughout 2021 and to do better than the national average in the Southeast states where First Horizon operates, including Tennessee, Georgia, Florida and Louisiana.
In Chattanooga, where First Horizon is the biggest bank, the first quarter results mirrored those across the company, according to Southeast Tennessee Market President Jay Dale.
"We could not have envisioned last March that we would have such strong 2021 Q1 earnings coming out of the pandemic," Dale said. "Our economy continues to recover, and our clients are cautiously optimistic about the rest of the year."
In response to the quarterly earnings, First Horizon shares rose more than 5.4% Wednesday in trading on the New York Stock Exchange. First Horizon's stock has risen by 39.5% so far in 2021 and is up by more than 136% from its price a year ago at this time.
First Horizon directors authorized a $500 million share buyback in January and company officials said they expect to make such stock repurchases from time to time as they deem appropriate.
"We are bullish on ourselves and so we do expect to opportunistically buy back our shares," Jordan said.
- Compiled by Dave Flessner who may be reached at dflessner@timesfreepress.com or at 757-6340.