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First Horizon National Corporation (NYSE:FHN)

Q1 2014 Earnings Conference Call

April 17, 2014 10:00 ET

Executives

Aarti Bowman - Head of Investor Relations

Bryan Jordan - Chairman, President, CEO, Corporation and the Bank

BJ Losch - CFO, EVP, Corporation and the Bank

Susan Springfield - EVP, CCO, Corporation and the Bank

Analysts

Steven Alexopoulos - JPMorgan

Emlen Harmon - Jefferies

John Pancari - Evercore

Nishil Patel - KBW

Kevin Barker - Compass Point

Operator

Good day, ladies and gentlemen, and welcome to the First Horizon National Corporation First Quarter 2014 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the call over to your host for today, Ms. Aarti Bowman, Investor Relations. Ma'am, you may begin.

Aarti Bowman

Thank you, operator. Please note that the press release and financial supplement which announced our earnings, as well as the slide presentation we'll use in the call this morning, are posted on the Investor Relations section of our Web site 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 announcement materials and our most recent annual and quarterly reports. 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 announcement 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 Web site is the only authorized record of this call.

This morning's speakers include our CEO, Bryan Jordan; and our CFO, BJ Losch. Additionally, our Chief Credit Officer, Susan Springfield, will be available with Bryan and BJ for questions.

I'll now turn it over to Bryan.

Bryan Jordan

Thanks Aarti. Good morning everyone and thank you joining the call.

I'm pleased with what we have accomplished in the first quarter as we continue to take actions to build franchise value and achieve our long-term bonefish target. We are investing in our core businesses while controlling costs and improving productivity and efficiency. We are winding down our non-strategic portfolio and taking steps to put legacy issues behind us. And we are taking an increasingly granular approach in our efforts to improve economic profitability.

Our core businesses are showing solid performance and the regional bank average core deposits were up 2% year-over-year especially lending portfolios continue to grow on average year-over-year basis, asset base lending was up 12%, commercial real estate grew 4% and Mid-Atlantic increased 4%. I'm especially pleased with this growth as it shows our focus on improving economic profitability is producing a higher return, new loan origination mix.

Although the economic recovery remains slow and borrowers are still somewhat cautious, I'm encouraged by the first quarter's improving loan pipeline as well as a modest improvement in commercial line utilization.

FTN Financial, our fixed income business, continues to contribute significantly to our overall fee income. Due to market conditions, we're still seeing lower average daily revenues. FTN Financial remains a high-return business even in the face of lower flows and activity. We see this part of the cycle is a great opportunity to continue to further invest in our extensive fixed income distribution platform. We are doing this through strategic hires of sales and trading resources and through ongoing focus on expanding our municipal product platform, and including the development of our public finance capability.

Managing expenses is particularly important these days and we remain committed to improving productivity and efficiency. Consolidated expenses were down 8% year-over-year. We are working hard to streamline our workflow processes and shortened delivery times for our customers. At the same time, we are continuing to make investments that enhance future growth potential.

For example, over the past several months we have opened banking offices in Charleston, Jacksonville and Houston. As I said earlier, we are making progress in winding down the non-strategic segment. Average loans declined 18% from last year and we settled with Freddie Mac in February.

Asset quality is showing stable trend, year-over-year net charge-offs declined 38% and the net charge-offs ratio remained below our bonefish target. Our capital ratios under Basel III remain strong with estimated Tier-1 common at 11.1%. We submitted our initial stress test to our regulators in March and expect to hear feedback from them later in the second quarter.

To sum up, we spend the first three months of the year continuing to work on optimizing economic profitability essentially building on the data and the initiatives we discussed with you last November at our Investor Day. We are focused across the organization and making profitable relationship oriented loan. We are making steady improvements. We are on track with our strategic priorities and we are doing what we said we would do.

I will now turn the call over to BJ for more financial details about the quarter. Then I will be back with some closing comments. BJ?

BJ Losch

Thanks Bryan. Good morning everybody.

I will start on Slide 7 with our consolidated financial results. You will see in the first quarter, our net income available to common was $45 million or $0.19 per share. If you look at Slide 8, first quarter earnings were inline with our expectations, so we did have several significant items that affected those reported results.

First, we had a pre-tax $20 million gain associated with unrecognized servicing fees from our agreement to sell our MSRs. We also had a $6 million securities gain on an equity investment. They were offset by $6 million expense related to efficiency initiatives essentially a lease abandonment charge as well as some severance related costs and at $6 million net pre-tax loss from certain on-balance sheet actions related to resolution and collapsing of some securitizations that we did.

Segment highlights for the different businesses start on Slide 9, in the first quarter our core businesses contributed $33 million in net income. And I will go into the details of Regional Banking, Capital Markets results in a couple of minutes. But let me hit on strategic first. You will see the net income in that segment is $12 million up $6 million linked quarter. The increase was primarily driven by the $20 million servicing gain that I mentioned earlier.

Loan loss provision was $3 million credit largely reflecting a reserve adjustment from the sale of three TRUPS all of which were on interest deferral. Expenses were $14 million in the segment for the first quarter down due to lower net litigation expense. And as expected we had no mortgage repurchase provision expense in the quarter.

Starting with the Regional Bank trends on Slide 10, you will see that net income in the bank was $36 million. Net interest income decreased 3% as expected from the first quarter due to lower loan balances predominantly in loans to mortgage companies and fewer days in the quarter.

Fee income declined 4% linked quarter. Deposit transaction fees were down seasonally and was somewhat offset by a 7% increase in wealth fees and trust income growth of 2%. Linked quarter expenses in the bank declined 4%. Loan loss provision in the bank was $13 million in the first quarter compared to three and the four. That increase was driven by some refinements in our credit card reserving process as well as some other macro economic factors. Overall, the consumer portfolio remained stable and we are pleased with all of our portfolios are performing and expect continued strong performance in the bank balance sheet.

Moving on to regional bank balance sheet trends on Slide 11, you will see linked quarter of the bank average core deposits were up 2%. Average loans were down slightly 1% despite a 24% decrease in loans to mortgage companies.

We saw linked quarter growth in other parts of the portfolio that somewhat offset that decline. They included asset based lending up 6%, CRE up 3% and Middle Tennessee and private clients wealth both up 1%. We recognized that loans to mortgage companies do add volatility to our portfolio balances. But as we talked about in November and in other places we believe the strong economic process and high returns on this line of business more than compensate for the volatility. And in addition, we were pleased to see growth in business lines and markets that we have discussed previously as being ones with current and future economic profit growth potential.

Competition for loans remains significant across our markets putting pressure on our loan yields. However, we are encouraged by the recent growth that we have seen in places like CRE and ABL as well as an improving C&I pipeline. Although overall our borrowers remain generally cautious. We are seeing some expansions from our larger commercial clients and some acquisition activity among our mid-sized customers.

And the consumer loan pipeline has rebounded substantially in the last month reflecting somewhat of a catch up after the soft winter season. We will continue to focus on our specialty lending areas that have higher returns and better economic profitability as well as our growth markets in Middle Tennessee and Mid-Atlantic.

Turning to capital markets on Slide 12, that business had net income of $5 million in the first quarter. Linked quarter our fixed income averaged daily revenues were roughly flat at $813,000 for the quarter. Expenses decreased primarily due to lower variable compensation and were partially offset by a seasonal payroll taxes.

ADR levels continue to be below our normalized expectations. The interest rate environment and the associated dynamics in the fixed income market associated with that continued to mute activity on the desks. In a more normalized environment we still believe that fixed income ADR levels are in the $1 million to $1.5 million range, however, for the next several quarters we expect those average daily revenues to remain generally consistent with what we have seen in the last couple of quarters.

Turning to consolidated balance sheet, margin trends on Slide 13, our average total assets remain stable was about $24 billion. Linked quarter consolidated NIM declined 10 basis points to 2.88%, the decrease was due to lower loan balances, continued pressure on commercial loan yields and a higher amount of balances at the Fed as well as fewer days in the quarter.

You will recall on our 4Q call, the margin was 298 and we discussed it being elevated by roughly 4 basis points from acquisition related loans and higher than expected cash basis income. Sitting here today, we still expect quarterly net interest margin in 2014 to be in the 2.85% to 2.95% range. We have several assumptions related to that may include rates staying at current levels or slightly rising. Loan yields continuing to decline due to competitive pressure. Loans to mortgage companies built-in modestly throughout the year. Deposit rates paid remaining lower, new investment securities yields modestly accretive to current yield, capital market inventory to remain stable and fed balances at normal levels.

Our balance sheet as you can see remains highly asset sensitive a 300 basis point raise to net interest income will increase roughly $11 million or add roughly 38 basis points to our core NIM. We recently began adding fixed rate products in both loans and securities with 3 to 5 year maturities. These actions have modestly affected our asset sensitivity and allow us to better compete for relationship lending opportunities in the current environment. But for the long-term we have prepared ourselves very well to materially benefit from an increase in short rates.

Turning to expenses on Slide 14, you will see that since 1Q 2011 our run rate of annualized expenses declined 30% and you see that we exceeded our 2014 expenses earlier than anticipated. We have improved the efficiency in our core businesses by reducing costs in areas such as occupancy, operations, foreclosed real estate while also rationalizing our branch network.

We will continue to work on reducing expense in the non-strategic segment. We saw a 52% decrease in contract -- using contracted employments as we have significantly reduced sub-servicing expense since we sold the vast majority of our servicing portfolio.

We have extensive work going on, you see on the page in many of our credit operational areas that will deliver lower cost and improved collections and better service. And we continue to work on ways to reduce our square footage across the firm. While we are obviously pleased with our expense discipline to-date, more can and will be done on expense control in 2014.

Looking at asset quality trends on Slide 15, you see linked quarter net charge-offs decline 2%, non-performing assets down 5%. As we mentioned we saw three TRUPs in the first quarter that were all on interest deferral further improving our risk profile. In our reserves loans that have 164 in the first quarter. We are seeing ongoing positive grade migration in our commercial portfolios. Our bankers remain disciplined on underwriting and we are actively monitoring our consumer portfolios. We expect continued stability in asset quality trends and are pleased with the performance we are seeing in credit.

Wrapping up on Slide 16, core business trends are solid with our 12-month trailing core ROA at 85 basis points and core ROTCE at 9.6%. Solid returns in Regional Banking, Capital Markets demonstrates the strength of those core businesses. Our Capital Markets business continue to provide us with good fee income while using capital efficiently. In the Regional Banks specialty lending areas, the market growth opportunities should drive profitable loan growth. Our continued focus on economic profit will drive better returns every time. We will continue to work on expense efficiencies. Our asset sensitivity provides meaningful upside. And with strong capital ratios and solid earnings our ability to profitably deploy capital over time should be meaningful.

So with that, I will turn it back over to Bryan for some final comments.

Bryan Jordan

Thanks BJ.

We are off to a good start in 2014. And over the remainder of the year, we will continue to successfully execute on our blue chip priorities. We will continue to strengthen our balance sheet, improve efficiency and wind down the non-strategic businesses.

We are focused on improving economic profitability. We should make progress towards achieving our bonefish targets in building franchise value.

Thank you to our First Horizon team for all that you do to develop our business and the momentum we have in each day.

Now with that, Ben, we will open it up to questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question comes from the line of Steven Alexopoulos of JPMorgan. Your line is open. Please go ahead.

Steven Alexopoulos - JPMorgan

Hey, good morning everyone.

Bryan Jordan

Good morning, Steve.

Steven Alexopoulos - JPMorgan

I’ll start looking at the ADR range on Slide 12 of the deck which goes back 10 years, it looks like really the only time over the past ten years, you are in or above the range was during the financial crisis. What makes you think that now that we are in the post-crisis period, we are going to go back to a level that's so much higher than you were back in 2004 to 2007?

Bryan Jordan

Yes. Steve, this is Bryan. I will start. If you look at the chart and the scale is a little broad there. But, we were running in the high $700,000, $800,000 even in those years. And you’ll remember, if you go back 10 years there were a couple of soft years in there preceding the 2007 timeframe.

That said, as we look at the business, we look at our positioning in the business and we look at what do you think the trends will be over the long-term. We are still optimistic as a way to describe it, we still believe that we have the share in the business that we can drive revenues and the business that are in that $1 million and $1.5 million a day.

As BJ said, in his prepared comments, as we look at across the remainder of 2014, we think it remains below that range. And its going to be a period where interest rates are going to have a tremendous amount of volatility if you look at the map or chart of the 10-year treasury for the last year, you see a tremendous amount of volatility in it. And you have some really good days and you have some really soft days.

And so all of that said, there is no science to it, it is – looking at our business and understanding it and trying to lay out what our long-term expectations are. It's still a very profitable business at $800,000 a day. It produces higher return, as I said. So that's a very long way of saying it, its our expectation, but given what we have see today, it is going to be below that for a little while and it could be that way in 2015, sure that's possible too.

BJ Losch

I think Steve, I will just add to what Bryan said to, if you think back to what happened during the financial crisis, we saw a lot of dislocation in markets and a lot of competitors left. So we think we picked up some incremental share there. We are also preparing very well for an environment that is very different as the GSEs change their shape and form. And so while we are very strong there today, the business is doing a great job of adding capabilities like municipal. And building that out such that we have an even more balanced platform.

And the third piece is that, our corporate desk has done very well building itself up through and into the crisis such to the point now that its actually the one that's up year-over-year and so that's providing us with a very balanced client base that we can take advantage of through any market. So as Bryan said, its hard to just pinpoint a range, but we do believe that we have made structural and strategic changes that allow us to be there and be well over the long-term.

Steven Alexopoulos - JPMorgan

Okay. That's actually very helpful. And maybe just a completely unrelated follow-up. BJ can you give us some color on the improvements in the C&I pipeline that you noted in your prepared comments and do you expect a pick in the C&I in the second quarter given what you are seeing in the pipeline? Thanks.

BJ Losch

Yes. I will start certainly and then Susan has a few comments that she can make as well. But, yes, we are very pleased with what we are seeing in our pipeline. You can see pockets of strength in C&I, ABL, CRE most particularly our bankers, we talk to our bankers as you know about balancing economic profit and loan growth. And so what we are doing is managing that over the long-term. But, what we are seeing is that our bankers calling efforts are building pipelines that we believe have a high probability of closing.

And what happens is, C&I pipelines is that you do see the funding, but they don't happen for a couple of quarters. But we do expect that second quarter should be stronger and we believe that we can maintain that momentum throughout the rest of the year.

Susan Springfield

Yes. Steve couple of things I would add is, actually in March, last March this quarter in terms of new fundings in the commercial side was almost doubled what it was in January and February. So we have some real momentum in March.

And as BJ said, we got some of the diversified pipelines in terms of some for commercial throughout our markets and our growth markets in Middle Tennessee and Atlanta as well as in our specialty business, its like CRE and asset based lending.

Bryan Jordan

This is Bryan, Steve. I will tag on. If you look at the pipeline and how its build and its sort of hard in the – how the seasonality effect things at times. But, if you look at the end of the year to the end of the first quarter and the pipeline as we enter March, the pipeline is up significantly in the order of 35%, 40%. So there is probability of follow out in that, but we think things are picking up. And as I commented we are seeing increased line utilization on C&I lending.

So it does appear to be some degree of strengthening. And as we look at these pipelines, I'm very, very encouraged by the relationship nature and the structure and the pricing that we have in place. So I think our bankers are doing a fantastic job developing business and doing it with a long-term profitability and customer relationship mentality, which I think is the right way to be doing business.

Steven Alexopoulos - JPMorgan

Okay. Thanks for the color. Appreciate that.

Bryan Jordan

Sure. Thank you.

Operator

Thank you. Our next question comes from the line of Emlen Harmon of Jefferies. Your line is open. Please go ahead.

Bryan Jordan

Emlen?

Emlen Harmon - Jefferies

Hey guys. Sorry, here I'm. sorry about that. I apologize just hopped on here. But thinking about the expense run rate, and look at the compensation expense for the quarter seems like its down pretty meaningfully, could you help us kind of cheese out the impact from payroll taxes this quarter? And then also how much of the decrease was a drop in salaries versus kind of incentive accruals whether on the bonus side or just kind of commission related stuff?

BJ Losch

Yes. It's BJ. I would say most of the salaries decline is related to variable comp and really mostly in fixed income. We did have some impact from continue declines sort of continued efficiencies that we are finding, you can see the FTE count is down from quarter-to-quarter. So obviously, there is some impact in there. But, I would say largely its been from lower variable comp.

Emlen Harmon - Jefferies

Got it. Thanks. And then if we look at – just kind of what the expense run rate is for the quarter, since its meaningfully below kind of what's your guidance in terms of $900 million annual run rate. Is there any pick up in expenses that you would be expecting as we kind of head into the rest of the year?

BJ Losch

Not particularly. I think our annualized run rate using the first quarter be around the 880 range. I would like to see be there at least for maybe a little lower. I don't see anything in particular on the horizon that would be make it to go up other than something it could be possible which should be higher fixed income revenues and higher ADR in that business.

But other than that based on all the work that we are doing finding efficiencies and some of the things that I see – I feel good about where our level is now and it should get even better.

Emlen Harmon - Jefferies

Okay. Great. Thank you very much.

BJ Losch

Sure.

Bryan Jordan

Thank you.

Operator

Thank you. Our next question comes from the line of John Pancari of Evercore. Your line is open. Please go ahead.

John Pancari - Evercore

Good morning.

Bryan Jordan

Good morning, John.

John Pancari - Evercore

Along those lines from the question in the comp expense real quick just – the similar run rate question, can you help us just think about what is a good run rate going into the second and third quarter on those salaries and benefits line. Is it closer to the mid 1.20s or is it closer to this one 1.19 level?

BJ Losch

Assuming that as we talked about fixed income stays roughly where it is. I would say its in that 1.20 range closer to where we are at today.

John Pancari - Evercore

Okay. All right. That's helpful. And then also back to the capital markets topic Bryan, I know you mentioned that the risk potential for that this pressured ADR level to persist into 2015, if that looks like that's shaping up to be the case. Is there any additional rationalization of that business that you think is needed in that instance?

Bryan Jordan

Well, yes, if – well, let me back up. That's a business where we, Mike Kisber and the team out of the FTN Financials spend an awful a lot of time through any business cycle looking at and controlling the cost. And so yes, they will continue to focus on their cost structure and make sure that we are allocating calls to the right activities and controlling cost appropriately.

In terms of rationalization in a broader sense, if you say, is there anything that you are doing that you need to stop doing from a product set or a customer perspective. No, I think we have got a very good business mix out there.

I would say if anything there will be additional opportunities for us to as I said earlier look for and hire specialized traders, sales folks, capabilities across our platform. Most particularly in our municipal finance businesses where we have made a tremendous amount of investment over the last couple of years and I would expect we would continue to invest in it.

So I would expect, yes, we will continue to look at our cost structure and control it. But we will also continue to look for opportunity to invest in that business and continue to position it for the long-term just like we are doing in the banking business and elsewhere in the organization.

John Pancari - Evercore

Okay. Thank you.

Bryan Jordan

You are welcome.

Operator

Thank you. Our next question comes from the line of Nishil Patel of KBW. Your line is open. Please go ahead.

Nishil Patel - KBW

Hey, guys. Just want to talk a little about litigation you already settled with the FHLMC and wrapped up a lot of good GSE issues and of course, I guess I just want to see, is there any update on the litigation front specifically with regard to the FHA HUD enquiry. And also, how you are thoughts around litigation now impacting the way you are looking at using your capital, accretive buy backs or just evaluating the common dividend?

Bryan Jordan

Good morning. This is Bryan. First, there is nothing in terms of an update on the FHA DoJ, I think somewhere in the appendices to the Slide deck already got sort of the current information and that's – there is – just not a whole lot happening there, its just a long process. There are other matters that continue to evolve from day-to-day but it's a bit of a slow grind. And we continue to work and to make progress. But nothing to report at this point.

With respect to capital, as we said, really going back into I guess it was October or so when we reported third quarter earnings. We talked about the fact that we wanted to continue to work through and resolve these matters since then we have resolved Fannie Mae and Freddie Mac and GSE repurchases that we discussed. We continued to work on and evaluate where the other risks are as it relates to the mortgage and overhang.

And also during that period we completed our stress testing effort, its not the first time we run this stress test. But it's the first formal process with the [deep task] (ph) that we submitted to the OCC and the Federal Reserve. As I mentioned in my comments earlier we should get some comments or feedbacks back on that later in the second quarter and we will continue to evaluate that.

All of that wrapped up, we continue to evaluate our capital position. We feel very good about the strength of our capital position. We'd like to get a little bit more information on some of these matters and get some feedback on the stress test before we make any significant changes in the way we are thinking about capital and capital return in the short-term.

Longer term we think our business will continue to produce significant returns – excuse me, significant return and generate significant excess capital through the cycle. We will be in a position to repatriate return to our shareholders. And we will do all of that in due courses as we think through all of these moving parts.

Nishil Patel - KBW

Thank you, guys.

Operator

Thank you. (Operator Instructions) Our next question comes from the line of Kevin Barker of Compass Point. Your line is open. Please go ahead.

Kevin Barker - Compass Point

Good morning. Given the very competitive market for loan portfolios out there, are you seeing any opportunity to significantly reduce non-strategic portfolio at or above fair value from where it is right now?

Bryan Jordan

Yes, Kevin. This is Bryan. Good morning. Well, a good example we sell three of the trust preferred loans that BJ mentioned. So we are looking selectively for opportunities to sell those assets at or above book value and if it makes sense, we’d sell them. In any contract or transaction that made sense.

It doesn't look to us like the market for loan asset has changed so significantly that there is a single, or three single transactions that could be completed in light rather slight clean in terms of those non-strategic wind down. But, let's not just say that we don't continue to look at it. And we won't continue to evaluate it in the future. But from our perspective we still believe that being very strategic in identifying transactions. And capitalizing when we have opportunities to sell those assets at attractive prices, its way to go. And for those where we continue to work through the resolution and to capture the run-off, the pay down at par value continues to be the smart way to approach it.

As I noted earlier those portfolios and the aggregate are down about 18% year-over-year. There is no reason to expect that trend line would not continue throughout 2014 given the age and maturity of it.

So that's a long – very long way I suppose we are saying. We don't take anything off the table. We are not saying that we have to do anything. We are very comfortable working through in the fashion that we have been working through and we will continue to evaluate opportunity as they present themselves.

Kevin Barker - Compass Point

Have you ever considered doing a marketing a large piece of the portfolio, or are you continuing to do it piece by piece?

Bryan Jordan

Well, we have Kevin over time continue to evaluate, I would say there is nothing that we can considered in the last year or three that where we thought about whether it made sense to do a large transaction. It was our view particularly with the largest pieces of it the home equity portfolio that the credit characteristics and the loss content in it was much better than market expectations. We still believe that continues to be the case. It is a – unfortunately so are very low yielding portfolio, which reflects the high credit quality that was retained on the balance sheet when it was originated in 2005, 2006, 2007 and 2008.

And so we have always believe that for the biggest piece and the most marketable piece that the home equity portion the economics of retaining that were better than the economics of selling it. And our loss curves and our history has – generally speaking to this point generally proven to be why we are seeing very good performance then and you will note in the appendices to the Slide deck that already put out this morning.

Credit quality remains strong, FICO scores are still north of 725 and the 730 plus range. Those are updated refreshed by FICOs. Then we still continue to see very good performance characteristics in the portfolio.

Kevin Barker - Compass Point

Now, concerning the home equity portfolio given the increase in payments or somewhat considered a payment shock in the next few years, as these loans were amortized, is there anything you are doing to prepare for that regarding maybe building reserves or modifying a significant amount of home equity portfolios are even selectively selling a portion of it?

Susan Springfield

I will take that question Kevin. As it relates to the home equity portfolio, we do see – we update on our analyses on a regular basis and we do shock the portfolio looking at potential interest rate increases. We also do analysis every quarter on – what's entering the repayment period from draw. We actually are seeing – look a little last five quarters as ones are – leaving the drop period and entering repayment. So we are actually seeing some increase on those 30-day delinquency and charge-off rate even after they – than we saw say few quarters ago.

Some of this tax expense we are using that will continue to manage the revs, improve outcomes. We are now reaching out to our home equity borrowers those in the non-strategic and regional bank portfolio. Further in advance of them leaving the drop period and entering repayment. And so letting them know up to 9 months in advance through different outreach methods, online banking statements, proactive calling. Your payment will change, please call us, we want to work with you. So we are doing a number of outreach activity to continue to help our customers and also improve – continue to improve the outcome.

Kevin Barker - Compass Point

Thank you for taking my question.

Bryan Jordan

Thank you.

Operator

Thank you. And ladies and gentlemen that does conclude our Q&A session for today. I would like to hand the conference back over to Mr. Bryan Jordan for any final remarks.

Bryan Jordan

Thank you, Ben. Thank you all for joining our call this morning. And thank you for your interest in First Horizon. Please let any of us know, if you have any further questions today or tomorrow or early next week or need any additional information. I hope you all have a great day. Thank you.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. And you may all disconnect. Have a great rest of your day.

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