First Horizon Corporation

Good morning and welcome to First Horizon National Corporation First Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, This event is being recorded. I'd now like to turn the conference over to Ms. Artie Bowman, Investor Relations. Please go ahead.

Thank you, Nick. Please note that the earnings release, financial supplements, and slide presentation we'll use in this call are posted in the Investor Relations section of our website at www.firsthorizon.com. In this call, we will mention forward-looking and non-GAAP information. Actual results may differ from the forward-looking information for a number of reasons outlined in our earnings materials in our most recent annual and quarterly report. Our forward-looking statements reflect our views today and we are not obligated to update them. The non-GAAP information is identified as such in our earnings materials and in the slide presentation for this call and is reconciled to GAAP information in those materials. Also, please remember that this webcast on our website is the only authorized record of this call. This morning's speakers include our CEO, Brian Jordan, our CFO, BJ Loesch, and our Chief Credit Officer, Susan Springfield. I'll now turn it over to Brian.

Thank you, Artie. Good morning, everyone, and thank you for joining our call. I hope that everyone is staying healthy and safe in this environment. The COVID-19 health crisis is certainly unprecedented and causing significant economic uncertainty across the world, not to mention here in the United States. While early in the game, I'm encouraged by the efforts of the Federal Reserve to provide liquidity and orderly markets and the stimulus passed by the Congress and signed by President Trump. Before we go into the quarterly trends, I'll talk about how we're responding to the COVID-19 crisis. We are focused on supporting the well-being of our employees, our customers, and our communities. For our employees, we provided resources and flexibility to work remotely and offered extra sick time and financial assistance for childcare. We understand how critical the role of banks is now, and our employees are working incredibly hard to support customers and our communities. Our bankers are proactively reaching out to customers to discuss challenges and solutions. We're participating in the PPP program, So far, we've approved approximately 5,500 applications and processed $1.6 billion of loans. We're also working with our customers to provide payment deferrals, liquidity lines, and fee waivers. On slide five, our business diversification combined with our strong capital and liquidity gives us a position of strength from which to successfully manage through the current economic challenges. First quarter results demonstrated our solid foundation. PPNR was up 19% year-over-year and reasonably steady linked quarter, driven by profitable balance sheet growth, strong counter-cyclical business performance, and excellent expense management. Earnings, however, were impacted by a $145 million loan loss provision, building reserves to incorporate the steep decline in the economic outlook in March. We also adopted CECL accounting rule on January 1st. Net charge-offs remain modest, or $7 million in the court. We will continue to closely monitor and evaluate COVID-19's potential impact on the economy, our customer base, and our loan portfolio. Our current loan loss allowance represents 74% of 2019 stress test losses over a nine-quarter period. As the full impact of the economic shutdown becomes clearer, we will make appropriate adjustments if necessary. Balance sheet trends were strong, with period-end loan and deposit growth of $2.3 billion and $2 billion, respectively, linked quarter. Loan growth was driven by increases in loans to mortgage companies and higher line draws. Low rates drove an uptick in volume in loans to mortgage companies and draws increased from customers preparing for economic uncertainty. Period-end deposits reflected significant customer inflow. So far, in April, we've seen deposit growth continue while line draws have moderated. We have also seen some decline in loans to mortgage companies, which increased sharply in the last week of March. Our capital and overall liquidity position remains strong with excess funding capacity that will allow us to continue to utilize our balance sheet to support our customers' needs. Our period and capital ratios were impacted by an increase in risk-weighted assets, primarily due to loan growth, combined with an incremental provision bill. I'll give a quick update on our merger and branch acquisition before turning the call over to BJ to provide more financial details. Our merger of equals with Iberia Bank is on track. We've made good progress in integration planning and processes, and we've completed initial regulatory and shareholder filings. Our shareholder votes are set for April the 24th, and the two major proxy advisory firms have recommended votes for the merger. We anticipate closing the merger by the end of the second quarter of 2020 after final regulatory approval. Regarding the branch acquisition, we've agreed with Truist to postpone finalizing the transaction until the third quarter due to the ongoing pandemic situation. The postponement will alleviate customer disruption in this uncertain time and allow us to comply with social distancing guidelines. We believe both of these transactions will enhance our long-term value with improved funding, additional earnings accretion, and capital generation. I'll now turn the call over to BJ to go through the financial highlights. BJ?