About Anthony Restel
Anthony Restel, Senior Executive Vice President and Chief Banking Officer at First Horizon, was referenced in a September 2024 CNBC interview with CEO Bryan Jordan. Jordan stated that the bank had "very good deposit growth in 2023 and very good retention of those deposits," and that it managed deposit costs to balance client compensation with balance sheet funding. He said the bank is "well positioned with a strong, stable funding base" and "a strong capital base to continue to be very aggressive in the marketplace" when opportunities arise.
Jordan described the economy as growing at a "modest or slow pace" with "relatively tight" financial conditions)Skip. He said a neutral interest rate environment "serves us very, very well," noting that lower rates would reduce net interest income slightly but would boost countercyclical fee businesses like mortgage lending and fixed income distribution. Regarding credit quality, Jordan said losses were 23 basis points (about $38 million) and that the bank feels "very, very good about the outlook for credit," attributing rising nonperforming assets to "idiosyncratic stories" rather than broad economic issues. He also characterized the 2023 regional banking turmoil as "more a crisis of a few banks" that was "business model related."
Source: AI-verified profile updated from Anthony Restel's recent appearances.
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Transcript (10 segments)
I
Interviewer0:03
Delivering an earnings beat for the year. Joining us in a CNBC exclusive is First Horizon CEO Bryan Jordan. Great to have you back. Thanks for being with us.
B
Bryan Jordan0:14
My pleasure.
I
Interviewer0:15
The Street is taking a good look at deposit cost, loan growth, pretty much above peers, at least what we have gotten so far, and wondering how you're managing to put all of that together.
B
Bryan Jordan0:26
Yes. We have a tremendous amount of momentum as we transition into 2024. Our bankers, our team have done a fantastic job. We did, I think, broadly speaking, a very good job of trying to control and manage deposit activities. We had very good deposit growth in 2023 and very good retention of those deposits. We managed deposit costs carefully so we created a balance between compensating our clients fairly and at the same time funding our balance sheet. Our capital levels have been strong and continue to build, and we think we're well positioned with a strong, stable funding base, a strong capital base to continue to be very aggressive in the marketplace when we see good opportunities to support our customers and our communities.
I
Interviewer1:15
So, when you think about challenges, are they centered around continued unrealized losses, efficiency and hiring, credit quality? What is top of that list?
B
Bryan Jordan1:26
Yeah, in terms of challenges, I think it really is an economy that continues to grow at a fairly modest or slow pace. Financial conditions have loosened a bit, in my view, since the December FOMC meeting. But they're still relatively tight. And I think that is probably the biggest obstacle we see in the near term, is an economy that is likely to look a lot like 2023 and 2024 with modest levels of growth. Maybe rate cuts coming at some point during the course of the year, but customers and businesses and consumers continuing to work through an environment with higher interest rates and slower growth.
I
Interviewer2:08
If the Fed were slower to lower those rates, what would that mean for your business? I ask because your deposit costs are pretty stable during the quarter. Other banks didn't have that luxury. So, would you rather see those cuts come sooner rather than later or is neutral actually serving you pretty well?
B
Bryan Jordan2:28
Leslie, I'd say neutral serves us very, very well. We position our balance sheet to operate with rates up or down. And versus a lot of our regional peers, we tend to have a very balanced business model in terms of countercyclical businesses. So, while lower rates would reduce our net interest income slightly, we would see a pick up in our countercyclical fee businesses, our mortgage lending business, our mortgage warehouse lending business, and most particularly, our fixed income distribution, FMH Financial.
I
Interviewer3:02
What about — as we teased this segment as being ten months post the March regional bank crisis. I see your net charge-offs came in around $36 million. That was lighter than estimates, nonperforming loans $462 million. As you kind of assess the marketplace right now and some of the takeaways almost a year after the Silicon Valley Bank, Signature Bank, First Republic, what happened with those last March, how would you assess kind of the quality of the sector in 2024?
B
Bryan Jordan3:35
Yeah, I think, you know, there's a sense that there was a regional banking crisis in the spring. And I would argue that it was more a crisis of a few banks and it was more business model related than it was anything, in my view. Credit quality has continued to be pretty good across the industry. We've seen overall stability in credit quality, as you noted, our losses during the quarter were 23 basis points, about 36, $38 million. We feel very, very good about the outlook for credit in the coming year. We think that we're not seeing any significant trends. Most of the issues we're experiencing are nonperforming assets are ticking up seem to be related to idiosyncratic stories. It's not a cross-section of the economy that is having issues. We're encouraged by that. We spent a tremendous amount of time over the really back half of 2023 doing deep dives and understanding how borrowers are performing, spending time with management teams, and we're encouraged that credit's going to hold up. And I think that's probably the biggest obstacle we see in the near term.
