First Horizon National Corp Q2 2020 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rahul Suresh Patil - Evercore ISI Institutional Equities, Research Division - Analyst : This is Rahul Patil on behalf of John. I just had a question around the loan mark. So I know in mid-April, you had provided an update around the loan mark. And I believe the total mark around that time was around $500 million to $550 million. And one could argue that the macro has kind of worsened since mid-April through the deal close in July. How come that didn't influence the credit mark? Because I'm looking at the total mark at $560 million right now. How come that didn't influence the credit mark? And then also, it looks like the rate mark of 40 bps is sort of consistent with the level that you had announced back in November 2019 and obviously, rates have come down quite a lot since then. And I'm just wondering REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 17, 2020 / 1:30PM, FHN.N - Q2 2020 First Horizon National Corp Earnings Call like how did that not influence your rate mark, because it looks like that also stayed at 40 bps? So just a couple of clarification questions around that.

Question: Rahul Suresh Patil - Evercore ISI Institutional Equities, Research Division - Analyst : Okay. And then just a question on First Horizon's stand-alone expense base. So I believe it was like 6 months ago, your expectations for First Horizon's expense base was around $280 million, $285 million per quarter. And I'm looking at 2Q numbers on a core basis, it came in around at $318 million. So that $30 million differential, obviously, partly driven by this stronger fixed income business performance. But how much of that differential in your expense base do you expect to normalize in coming quarters? Or should we kind of expect like that $320 million is like the normal sort of run rate for First Horizon, assuming fixed income kind of stays strong?

Question: Garrett Anthony Holland - Robert W. Baird & Co. Incorporated, Research Division - Analyst : I just have a near-term one on expenses. What's a good range for core expenses as we think about Q3 or the back half of the year?

Question: Garrett Anthony Holland - Robert W. Baird & Co. Incorporated, Research Division - Analyst : Combined would be great.

Question: Garrett Anthony Holland - Robert W. Baird & Co. Incorporated, Research Division - Analyst : Understand. I guess just bigger picture, I know the deal just closed, but you sound very positive on its potential. And clearly, the environment has changed, though, since you announced the transaction. How would you recast earnings power or advise thinking about the return potential for the combined company in this type of environment?