All right, everyone, good morning. My name is Michael Rose. I'm a research analyst here at Raymond James. I am very pleased to have First Horizon with us up next. Based in Memphis, the company has nearly $82 billion in assets and has a market cap of roughly $7.8 billion. With us today from the company is CFO Hope Dmuchowski and Director of Investor Relations, Natalie Flanders. I think we're just gonna jump into fireside chat questions, and I'll leave some time at the end for any questions in the audience. Maybe, Hope, we can just start off on the credit front, just in light of everything that's happened in the market with NYCB and, you know, the countless number of news articles that have been written out there.
If you can just maybe give a, you know, a brief overview of your office exposure, you know, average size, and why you think the markets that you're in, which are exceptionally strong, will produce a better, you know, outlook than maybe what we're seeing in some targeted pockets in the Northeast and other areas of the country.
Michael, thanks for having me here. We feel really good about the Southeast footprint. It is a good time to be in the Southeast with the way that our markets are holding up during this credit crisis. You asked about our average size. For us, our average commercial loan is about $3 million. We work on geographic diversity and also diversity within the sector. One of the things that we've talked a lot about recently is when high-rises are the one thing that are really getting hit pretty hard in this CRE issue. We don't underwrite loans for buildings higher than 10 floors. So when we look at the CRE exposure we have, we're looking at it more in that suburban footprint, the 10-story or lower. You know, in the Southeast, we do have some one-off credit losses.
We're still seeing deterioration of credit. We're seeing some downgrades. We're also seeing some upgrades. One of the unique things about First Horizon is 70% of our portfolio is floating rate, which means those higher rates have already been priced in for our clients, or they have already started to figure out how to run their business with those higher rates. We don't have the wall that some of our peers have.
Perfect. And maybe just, you know, kind of touching on your underwriting processes, have you guys made any, you know, changes since COVID that, you know, would kind of inherently limit, you know, loss given default or severity? And just if you can just broadly... I know Susan, Susan's not here, but, if you could just broadly kind of talk to your underwriting philosophy and process and maybe how that's evolved over time.
Yeah, I would say it's evolved over time, but not materially. First Horizon will celebrate 160 years, March 25 of this year. And one of the ways you get to be a 160-year bank is to underwrite for a through-the-cycle lending. We don't underwrite for today's economic environment. Prior to this rate hike cycle, we were underwriting for plus 200 basis points. I remember being at a conference talking about it, and like, "Well, do you really think there's gonna be 200 basis points of increase?" We're like, "Probably not." And the answer was, "Yes, it'll be 550 basis points." And so we're still looking at credits today for an uprate. When we underwrite them, we're looking at how will they perform in a different market environment, in a tougher market environment.
What will the cash flow look like? The big change that I think has been made since the 2008, 2009 great financial crisis is the loan-to-value, and so we sit at about a 60% loan-to-value on our portfolio.
And then maybe just, you know, just talking more broadly about your charge-off outlook. You know, I think maybe some people were a little surprised that you'd kind of guided to flat charge-offs for 2024, just given more broadly, we're seeing some greater pressures in certain asset classes. What gives you confidence that you'll be in that range? And maybe if you can give some historical context. I think you did a great job at dinner last night, but just for the benefit of the audience, would be appreciative.
Well, one, I would point out that flat charge-offs year-over-year has a large idiosyncratic credit of $72 million. So if you do take that out, it is slightly up year-over-year. What gives us confidence is that we're continuing to talk to our clients. We're looking at their financials every quarter. We're doing deep dives in our portfolio, and what we're seeing is pretty consistent downgrades. We're not seeing... Again, I mentioned it a couple of minutes ago, we don't have a wall of, you know, a large percentage of our portfolio that's about to have a 500 basis points increase all of a sudden, and they're gonna have cash flow issues. Our clients, 70% of our clients have been taking each interest rate hike as it comes, as we reprice it, and so that makes us feel pretty good.
But again, the Southeast, and when we look at vacancy rates, and we look at the vacancy rate, the vacancy rate for us in our portfolio is in the high teens. When you look at some of the cities where we see our peers have huge charge-offs, they're looking at 30, 40, 50% vacancy rates. That, that's hard to overcome in any type of lending scenario.
A lot of the focus, and I'll move on from credit, I promise, here in a second. But a lot of the focus on credit has been around office portfolios. But, you know, I think more recently in some of your markets, particularly in Nashville, there's been some articles written about just the multifamily supply that's coming online, and what that could potentially do to rents and occupancy levels, kind of across that market in particular, but just broadly in your multifamily portfolio. Any sort of, you know, trends that you're seeing by market? Any worrisome issues, you know, popping up, things like that?
We're not seeing any worrisome issues. We, we also don't have the concentration risk that others do. We really try to, within a market, have a diverse portfolio, so we don't go all in in one lending type. Nashville's interesting. I've seen those articles pop up, but what we hear from our local bankers is that there's still a housing shortage there, that there's still a huge influx of people coming. It tends to be a lot of people also have second homes there, so the ability to, for new people coming in to have housing, has been an issue. And we've had some recent deals where we've underwritten them to future rent, not current, and they've actually come in better in Nashville, once they were fully developed, what we were seeing the rent being.
And so I think it's, it's a watch and see, but we don't, we're not hearing from our bankers, we're not seeing in the local markets the stress that's been highlighted in the press just yet.
... Got it. And then maybe just kind of last one. I know you guys are at around $82 billion or so in assets, you know, kind of creeping up on that $100 billion. You guys have been very explicit about, you know, what the expectations for costs are. But just from a underwriting or credit review process, you know, just more specifically, what would anything change by crossing a $100 billion? What other credit safeguards would have to be put in place when you do cross?
Well, first of all, we're, we're still open for business. We're not shutting down any of our verticals. We're not getting out of our, any of our markets because of the $100 billion line. At $82 billion, we feel we have quite a few years left of organic growth, long before we have to really worry about that. We've guided to kind of low single-digit loan growth this year, and I think that's probably gonna be the environment for the next couple of years. So it keeps us pretty significantly under that. As we think about the $100 billion line, you know, the biggest thing that we are looking at in an industry is how does Basel III come in? The hardest thing to overcome is the TLAC requirement.
If we look at taking out the additional debt, we'd have to take out the negative carry on that, that's somewhere between $50-$75 million of additional debt just sitting on the balance sheet at a negative carry. If you—if we can see some tapering of that and start seeing a more phased-in approach, so a $100 billion bank isn't treated like a $1 trillion bank, the other costs, we feel that we can digest over the coming years. A lot of them, we believe, are also already being pushed in. We are one of the banks that continued to do stress testing even when they stopped requiring it for $50 billion banks. We feel it's a good tool to evaluate our company, and we publish it every year. So for us, that's something we've already been doing.
The Living Will's another big one that has a lot of expense to it, and the proposal is that it will be rolled out to banks over $50 billion later this year. There's 27 requirements to do a Living Will, and they're gonna require $50 billion banks to do 24 of them. And so it's not a small undertaking. And so part of that is we just think a lot of those costs are gonna come in organically over the next couple of years as we keep seeing regulations. On the credit front, I don't see us changing anything. We have always had a disciplined credit model. We continue to focus on servicing our clients. We want to be there for our clients through any cycle.
It's one of the reasons we keep our top-tier capital so that we can continue to lend, and we don't have to shut anything down. If we go over $100 billion organically or through a merger, we don't expect to have material changes to our credit philosophy.
Then maybe just from a risk perspective, I think you just promoted a new Chief Risk Officer. Can you just kind of explain how credit works with risk and, you know, what function that would kind of serve as a on a collective basis?
Yeah. We promoted a deputy chief risk officer who is a prior accountant, so love having her over there. She used to be our assistant controller and has a great background in that. But as we think about risk, what we're really looking at right now is all of the new regulation coming out. It's really hard to get our arms around all of it, whether it's Living Will, Basel III, the new ESG proposals that are supposed to come. Does climate control finally drop? And so what we're looking at is what's coming and how do we get prepared for it.
We're not just waiting for the reg to be written and saying, "Oh, now let's get prepared." And so one of the big things we're looking for in our risk, what our risk organization's doing, we partner with a lot of outside organizations, is trying to understand the amount of change that's coming to our industry and how do we get ahead of it. How do we make sure that before the reg goes into place, we're well prepared to digest that and our, and our business model, doesn't have to change? One of the big things we're really, really focusing on with all this change is we don't want it to impact the bankers. And so how do you put the framework around the company so the bankers can do what they do best, which is service our clients?
Well, maybe we can switch it up a little bit from credit and things like that. But then we'll go to everyone's next favorite topic, which is rates and net interest margins. You know, you guys are rate sensitive. You know, there's clearly some expectations out there for some rate cuts. That's been tampered down a little bit, but you guys do screen asset sensitive. And I think there was a little bit of surprise, you know, when you rolled out your guide for 2024, that, you know, despite being asset sensitive, despite some rate cuts, that, you know, you did guide NII higher.
I know the range is fairly wide, but maybe you can just talk about, you know, nearer term, you know, with, you know, point-to-point, you know, rates, Treasury yields up this quarter, and then also just, you know, what would cause you to be kind of towards the lower end of the range versus the higher end of the range? I know there's a lot in there to unpack, so I'll let you, have it.
Well, we'll start with your last question first. The lower end of the range, the biggest part there is deposits. So it's deposit mix, it's deposit rate. As we continue to say, it's not a game of solitaire in this deposit environment. It's constantly looking at what are our competitors doing. If they increase their rates, we have to match. Are they decreasing? We saw 10 basis points of margin increase last quarter. Our margin has troughed. We expect it to continue to increase quarter over quarter this year until we see rate decreases. And so that gives us the ability for our NII to grow. One of the unique things about First Horizon is our asset-sensitive balance sheet, and so we enter this year with our portfolio on yields about 60 basis points higher than they were this time last year.
So we carry that forward until we see our first rate decrease. We have given guidance with 4 rate decreases, the first one being in May, and so to be on the higher end of them, even with a 4 rate decrease, we think we can be on the higher end of that guidance if deposit pricing and loan yields continue to expand the way we think they are. But we could be higher if we don't see 4 rate cuts or they come later in the year. You know, it's hard to know what's gonna happen, but Powell has been pretty, pretty specific that he's not going to do a first-rate cut until he sees data that supports it, and we continue to just see 1 or 2 good months and then a surprise month.
I think we're probably a couple of months away, minimum, from that first rate cut.
I think one of the bigger debates in the, in the industry is when we do begin to see the Fed cut rates, you know, how quick will deposit betas be on the way down versus how quick they were on the way up. And, you know, we're doing a survey. We'll publish the results, you know, either on Wednesday or Thursday. But the results so far are kind of no consensus, you know, kind of all over the board. So we'd just love your thoughts and, you know, more specifically, as we think about savings and money market accounts, you know, what do you think will be the ability to bring some of those rates down as the Fed begins to cut?
I think we'll all be able to bring rates down. The question is, how quickly? And so as we look at it, four successive rate cuts, month to month to month, the consumers might be a little bit more sensitive to getting that email in their inbox or that call every month from the banker, and hearing, "Well, it's the fourth time in four months." If you see them spread out a little bit more, you would see, you know, one a quarter, I think we'd see a little bit more beta kind of at the same time versus a lag. On the way up, you know, we talk about how it, what happened. It was really a hockey stick.
We all kept rates pretty low for the first 100, 200 basis point cuts, and then we started to raise 25, 50 basis points, and then we had a liquidity crisis. And so when you hit March of last year, everybody's guidance went out the window. I remember conferences in, in second quarter last year, where CEOs and CFOs were refusing to give beta guidance. They're like: "We just don't know. Day by day, it's changing so quickly." And so on the way down, I hope we don't have that idiosyncratic event. I hope we don't have something that has us, you know, seesaw down and then have to increase rates again. But I, I think it's really gonna be a quarter-by-quarter game. I don't think we're gonna be able to price rates down the way we've seen in prior environments.
Our customers have become really attuned to how their money can make them money. It's been 15, 20 years since treasurers and CFOs and CEOs of this commercial bank had cash that was making them money. And so, you know, if you think about them getting a 500-525 basis point deposit rate now, we cut that 100-150 basis points. That's money in their pocket that they're using to operating their business right now. So I think they're gonna be very sensitive to that on the way down, and we're gonna have to just look, I think, you know, through the cycle, I think we'll get through 60, but the timing of it and the pace of it, I think, is gonna be kind of start and start and stop a couple times.
And then maybe just from a mix shift and a flow perspective, any, you know, recent behavior changes, or has it been kind of status quo? And, you know, I know you brought down, you know, some of the brokered balances as well. Will that, you know, kind of continue?
Yeah, we've seen pretty steady deposits. Q1 is a lower quarter for deposits anyway, as municipal money flows out, as clients spend their money at the beginning of the year. That's pretty typical to see some seasonal decreases. We saw January of about $500 million-$700 million go out of DDA, and in February, it stabilized. We'll see how what happens in March. You know, deposits continue to be the name of the game right now in banking. We all look at the H.8 data weekly, like we haven't done in a decade. Okay, we look at our balance sheet, but how are we comparing to the industry? We're not seeing the competition that we saw last year. We're not seeing any banks put up double-digit deposit growth. We aren't seeing huge promo rates out there.
So it's behaving pretty normally, but just with a shrinking balance sheet, all of us are looking at what the right composite of that is.
Then maybe this is just a broader question, but, you know, I think, you know, six months ago or so, when everyone was, you know, kind of talking about the Fed beginning to cut rates and when that would happen, and, you know, there's that long-term chart of non-interest-bearing deposit mix, and, you know, you guys have done a really good job, you know, helping to kind of stabilize. But, you know, how do you think NIB mix will evolve in a rate-cutting cycle?
I don't think we're gonna see much change. As I mentioned before, people are very sensitive to rate. They know that their money is making money now, and so whether it's 5.25 or 4.25 or 3.25, they're not gonna leave money in their checking account the way they were for a decade. Near zero interest rates for a decade made it indifferent. The pain of transferring your money from your checking to your money market, or if you're a treasurer, making sure that you operate right on the edge, it wasn't worth it. Now, it's worth it. Now, it's worth looking for treasurers, you know, where we have treasury management services, and we have the operating accounts, our business.
It's worth them looking a week out and saying: "How much money do I need in our DDA account versus how much do I want to sweep into a money market?" And so I don't expect that we're gonna see a big mix shift back to DDA in the coming years, as long as we stay with higher interest rates.
Then, just to wrap up on deposits, you know, any updates on, you know, kind of uninsured balances? You know, that's kind of gone in and out of focus for investors. Clearly, a year ago at this time, around this conference, became a really big issue. But any thoughts there on, you know, uninsured deposits, and, you know, are your customers still asking for it, or is it just kind of an issue that has kind of gone by the wayside at this point?
Our customers aren't asking much about it. We've actually seen a small pendulum swing back. In May and June, everyone was asking about it, and we did a lot of collateralized deposits. We did a lot of BAI sweeps, and that came with a charge to the client. So as the environment has kind of normalized and there's not that fear of bank runs anymore, we've seen a lot of our clients say, "Okay, I want my money back, and I'm not gonna pay to you know add the additional insurance anymore." So we've seen it. Still with us, it's just in a different product. We make generally the same money on either way, but we were passing the cost of insuring that over $250K through a BAI or a sweep through them.
So that's the one behavior we've seen, is a little bit less fear and willingness to look at the banking system as healthy from our customer standpoint.
Great. Well, I think we're about halfway through, so I wanna move over to fees, which I think is one of the really positive stories for the company. You guys gave some guidance for fee income growth, and you know, I think we've had some pressure, clearly, in your two bigger ones, which is Mortgage Warehouse and then the fixed income business. We've seen those trends begin to hopefully inflect and move the other way. The ADRs and the fixed income business, nice, nice bump up in the fourth quarter.
But maybe you could just give the outlook. I know we talked about this last night, but for the business and how that will operate in a declining rate environment, and then the impact of the steepness of the curve, which is also, you know, another big factor for the business.
... Yeah, we were really positively surprised in December to see the pickup that we saw at the end of the year in our fixed income business. And we've been positively surprised in Q1 that even with all the noise and rates, with an inverted curve, not knowing when the first rate cut's coming, we're still seeing our fixed income business have similar momentums that we saw in December. You know, that's not what we saw two or three years ago. We're not at the heyday, but we're seeing, you know, just some product, some production come through. We're seeing a lot about banks rebalancing their balance sheet, and so that does come through our sales and trading desk. On the mortgage warehouse, we're not seeing that come back just yet.
You know, Q1 does tend to be cyclical, end of the year is slow for buying houses, but in the higher rate environment, we're just not seeing houses be sold, or bought, for that matter. And so mortgage warehouse has been a little bit slower to come back. We're still sitting at about $2 billion, give or take, on that portfolio, but that compares to $6 billion two years ago. We do believe that we have picked up market share there. Many of our competitors have gotten out, and so as we've signed on new clients or increased their, ability to borrow with us, we think when it comes back, we'll pick up a larger market share.
That's one of those businesses that holds a lot of capital against it, so having top-tier capital being north of 11%, we're happy to be in that business, and we're ready for it to come back.
And then just to finish up on warehouse, I mean, what do you think is the straw that will break the camel's back or unlock, you know, kind of a broader... Is it 100 basis points down in mortgage rates? Is it something greater than that? I know we're not going back to COVID days, but-
You know, what we're hearing from our bankers is they think really 50-100 down is a kind of starting point for it to start. It's interesting because when you look at the housing market, it's kind of been static for four years.
Mm.
So there's still all this built-up demand of boomers that need to downsize, first-time home buyers that haven't bought. So it's, it's a little bit of a, what's the consumer behavior gonna be equal to, what's the rate scenario gonna be? And so we think 50-100 is probably when we'll start seeing that, that come up, but more importantly, we need to know that rates are done increasing. And we thought we were there at the end of the year. You started to see some positive activity with, with the housing market, and then the last month, you know, now there's a slight chance of a 25 basis point increase, and we've seen everything kind of grind to a halt again. The talk of an increase has spooked the mortgage market.
Got it. And then just on the fee side, you guys have an, you know, two obviously bigger streams of revenue, but, you know, as we think longer term about First Horizon, particularly as you, as you get bigger and cross 100, I mean, is there a need to maybe bolster on, you know, some non-bank type acquisitions or build out some different verticals within fees to drive that percentage higher? Just how conceptually you guys think about it.
Right now, we're not thinking about that in any front-footed way. Now, we're always opportunistic. You always get the marketing materials whenever anybody's putting themselves up for sale. We like the First Horizon balance sheet for this environment. We like the fee income businesses we're in. Our countercyclicals allow us to give the guidance we gave, which is, you know, generally PPNR positive year-over-year, even with 4 rate cuts. And that gives us a unique ability to drive shareholder value through the cycle. If we look back to COVID, when interest rates hit, you know, bottom as asset-sensitive bank, our loans reset to that lower rate, but our mortgage warehouse and our fixed income business hit almost record highs. And so we like the businesses we have now. We like how they operate.
We feel that we've stressed them on both sides of a zero rate—you know, about near zero rate environment, and then plus 500 basis points within three years, and we've seen an income stream on both sides that, you know, gives us top tier-top quartile returns for our shareholders. And so we're not really looking at anything net new right now.
Got it. That's helpful. And then, just 'cause we're running short on time, this is a short presentation, but I, I did want to touch on expenses. You know, I think maybe also some people are a little surprised at just the expense growth, but you guys have been very vocal and transparent about the, just the technology projects and the investments in the franchise that you're needed to make, you know, post the, the break with, with TD. Can you just describe some of that? And, you know, if the revenue doesn't come through, I mean, are you still committed to positive operating leverage this year by, you know, dialing back some of the expenses?
Absolutely. The biggest thing is, I think the technology spend gets the top-line headline, but a big part of our increase year over year, about half of that, is personnel and incentives. And so if the fixed income business, our mortgage business doesn't come back, that's naturally a business that the expenses just go away. They're a draw business. If they don't produce, they don't get paid. And so if you think about that, you know, we don't have to cut costs if our revenue doesn't come on the fee income side, the incentives will immediately come out. We're always looking at ways to create efficiencies in our businesses. We're always looking at where can we run our businesses smarter? Where's the opportunity to lean in and improve our client experience through technology?
One of the things we're looking at with our technology is: What are the efficiencies the company will gain? We don't... We're looking at $100 million of spend over three years. I expect that some of those projects will create efficiency. They will create cost saves, whether it's, you know, a technology project that automates something, and we're able to get out of software, or it actually cuts people out of the process. But there is continued focus on where can we self-fund some of this technology increase, and where are there efficiencies to be had in our business? We announced in Q3 last year a large restructuring of our regional bank, removing three regions.
We have announced a restructuring of our mortgage business to rightsize that in a down environment, and you'll continue to see those things come out from us as we're looking at what's the right way to run our business.
Are there any bigger systems? I think you talked last night about a new general ledger, you know, system. Any other kind of upgrades or third-party partnerships or anything like that that you know would be additive to you know kind of the efforts as we think about the efficiency of the company longer term?
... I think when we look at efficiency, there's a couple plays. One is where we're getting rid of older technology and putting new one, GL being a perfect example. We have a 40+-year-old GL that's in our data center, requires a lot of capital when you implement a new one. In the new cloud environment, we're able to put a GL in the cloud. We chose, you know, a service provider that does a cloud option, and they're able to put it in a year, and it's not this huge wave of technology costs.
And then you have, you know, you used to hear about ten-year depreciation cycles for general ledgers or loans and deposit systems, and every CFO out there was having to say, "How many millions of dollars is it gonna be?" Our new general ledger, it doesn't have that. It's a cloud-based solution, and so it's the annual licensing, but we don't have to have a huge capital investment. So I think we're seeing—I know we're seeing technology projects not cost what they used to. So the run rate might be a little bit higher on the back end, but it's not this huge upfront cost that you have to overcome. One of the things that we're also seeing when you talk about efficiencies is fraud. We're continuing to start new fraud projects, enhance new fraud tools, and that drives down expenses.
The more that we can stay in front of fraud, the less charge-offs that we have and the less client refunds we have.
Yeah, that was gonna be my follow-up question-
Yeah
... especially since we've seen some of it. Only a few minutes here, but I did want to touch on capital. You guys have some of the best capital ratios, you know, kind of out there. You did announce a pretty sizable buyback that was, you know, I think larger than, you know, what was in consensus expectations. It does look from the 10-K that you have begun to repurchase a little bit, so just wanted to get any sort of update there and how you guys think about the usage of the program.
Well, it's good every now and then when a bank can surprise you all to the upside. So I got a couple of those notes, and that was good. Normally, we get the, "Well, no, we thought this, we were gonna do this," and so we were excited to announce our share buyback program. And as we said, we're opportunistically out there. This has not been an interesting Q1 for banks, and we believe our stock was on sale in January, and we believe it's a better deal now. So we're opportunistically in the market buying our stock back. We are going to stay above 11% CET1 in the near term. It just gives us optionality. It gives us you know... We're not worried about running at 10 or 10.5 long term.
That's kind of where we think we'll, we'll get the business, but we just keep seeing shocks to the system. We're just not sure where it's gonna land. And so if something happens and we see capital or equity leave the system, if you're at 11, you can get down to 10.5 and still be operating in the zone that you want to be. If you're at 10, and you want to be between 10 and 10.5, if something happens, we don't want to really trip underneath there, in the near term. We keep thinking we're a couple quarters closer to the banks normalizing, and seeing stabilization in the environment, and we've seen some recent shocks that probably set us back.
And so we're gonna continue to buy shares back this year opportunistically, as long as we see the opportunity for that, but targeting not dipping under 11% CET1 this year.
Just the last follow-up on that, 11%, just what's the genesis of how that number was developed? Because it's clearly a different target at other banks, and just love some color there.
It was very mathematical. We had all of these quants run scenarios, which is we looked at what our peers were and said we want to be best in class. And so 11% kind of puts us at the top of the range for the regional banks. And having top-class capital right now, best-in-class capital, it really is a differentiator with our investors, but it's also a differentiator with our clients. When we had to get out there last March, April, and May and talk to clients about banks failing, every client that I talked to, our sophisticated- and even boards that I had talked to, they're like: "What is bank capital? Why do I care about this?
All I hear about, if you have more capital, you're not gonna fail, and my deposits are safe." And so not only is it a, you know, a prudent measure to have higher capital in this environment, it is a big differentiator for us with clients, from clients trying to figure out, "Is my money safe with First Horizon?
Last question for me. I saved the best for last, I guess, or at least the numbers question. Any updates to the guidance now with this webcast, and any changes?
No changes except for the one I mentioned, which is I do think our fixed income business has come in better, and then our DDA has come in slightly. We're still just seeing some downward migration in DDA, but I feel good about our full year guidance in Q1 and continue to be very, very positive on First Horizon, the year we're gonna have ahead.
Great. Any last-minute questions from the audience?
Yeah, not so long ago, you had a takeover offer from TD, right? I think it was approximately $25 per share. So, so what have you learned through that sort of process, and any reflections, any fundamental changes in the company and so on, as a result of the failed bid?
I don't think there's any fundamental changes in the company. We had an unsolicited offer for a 40% all cash premium. So what that told us is that we had a great franchise that was worth somebody buying when it wasn't for sale. We want to continue to run First Horizon to be a top quartile performer. You know, the failed bid, you know, it's hard to comment on that. There's not really any, you know, information that we can share that isn't already public about what's happened. We're all watching the Discover acquisition to see how that goes.
It's consolidation of fee, you think, in this area of U.S. or banking space in general?
I don't know how to correlate one unapproved deal in the last couple of years. I mean, it was a really unique situation, what we were dealing with in March, April, and May in the U.S. banking system, and then the regulators not approving our deal. We don't really have all the information on what their thinking was. They haven't come out publicly and stated it.
Any others? All right. Well, with that, I'm very thankful to have First Horizon here. We'll have a breakout session in Cordova 6. Please join me in thanking them.