First Horizon Corporation (FHN) BCG Matrix Analysis

Welcome to our analysis of First Horizon Corporation (FHN), a financial services company in the Southeastern United States. In this blog post, we will be using the Boston Consulting Group Matrix Analysis to identify FHN's Stars, Cash Cows, Dogs, and Question Marks products and/or brands. By the end of this post, you will have a better understanding of FHN's market position and potential for growth.

First, we will be discussing FHN's Stars, which are products/brands with high market share in growing markets. Then, we'll move on to FHN's Cash Cows, which are products/brands with high market share in mature markets. Afterwards, we'll dive into FHN's Dogs, which are low growth products/brands with low market share. Lastly, we'll cover FHN's Question Marks, which are products/brands with high growth potential but low market share. Let's get started!

Background of First Horizon Corporation (FHN)

First Horizon Corporation (FHN) is a financial services company headquartered in Memphis, Tennessee. As of 2023, the company operates across the United States, providing banking, wealth management, and capital market services to individuals and businesses.

In 2022, First Horizon Corporation reported a total revenue of $1.77 billion and a net income of $356 million. The company's total assets reached $86 billion, and it has a market capitalization of $9.5 billion.

• Founded: 1864
• Headquarters: Memphis, Tennessee
• Services: Banking, wealth management, capital markets
• Total Revenue (2022): $1.77 billion
• Net Income (2022): $356 million
• Total Assets (2022): $86 billion
• Market Capitalization (2022): $9.5 billion

Throughout its history, First Horizon Corporation has undergone numerous mergers and acquisitions, including the acquisition of Capital Bank Financial in 2017 and the acquisition of IBERIABANK Corporation and its subsidiaries in 2020.

Today, First Horizon Corporation continues to expand its presence and services through strategic partnerships and investments. The company's focus on innovation and technology has allowed it to remain a leading provider of financial services in the United States.

First Horizon Corporation (FHN) Stars

First Horizon Corporation (FHN), formerly known as First Tennessee Bank, is a financial services company that provides regional banking and wealth management solutions in the Southeastern United States. As of 2023, the company has several products and brands that can be classified as Stars according to Boston Consulting Group Matrix Analysis.

FHN's Stars:

• FTB Advisors: FHN's wealth management subsidiary that provides personalized investment management, financial planning, and insurance solutions. FTB Advisors has been growing rapidly, with assets under management (AUM) reaching $13.7 billion in 2021.
• First Horizon Merchant Services: FHN's payment processing subsidiary that offers merchant acquiring services to small and medium-sized businesses. The company had a market share of 8% in 2022, up from 6% in 2021, and generated $97 million in revenue in 2022.
• Capital Bank: FHN's community bank subsidiary that operates in North Carolina, South Carolina, and Tennessee. Capital Bank has been growing its market share in the region, with total deposits reaching $2.6 billion in 2022.

These products/brands have high market share in growing markets and have the potential to become Cash Cows if their success is sustained until the markets slow down. FHN should continue to invest in these products/brands to maximize their growth potential and generate long-term profitability.

First Horizon Corporation (FHN) Cash Cows

As of 2023, First Horizon Corporation (FHN) has several products and/or brands that are considered to be 'Cash Cows'. These products/brands are characterized by having a high market share in a mature market, which translates to high profit margins and generating significant cash flow. This allows the company to invest in other areas, cover administrative costs, fund research and development, repay debt, and pay dividends to shareholders.

One of the most prominent 'Cash Cow' products/brands of FHN is their personal banking and lending division, which generated nearly $500 million in net income in 2022 alone. This makes it one of the most profitable divisions within the company.

• Personal banking and lending - This division offers a range of banking and lending services to individuals and small businesses. It has a high market share and consistently generates significant cash flow.
• Investment management - This division includes wealth management, asset management, and other investment services for individuals and institutions. It has a strong reputation and a loyal customer base, which contributes to its high market share.
• Merchant services - This division provides payment processing solutions to businesses of all sizes. It has a significant market share and generates consistent cash flow through transaction fees.

Overall, these 'Cash Cows' are essential to the success of FHN. By maintaining the current level of productivity and profitability, the company can continue to invest in growth opportunities and remain competitive in the market.

First Horizon Corporation (FHN) Dogs

As of 2023, First Horizon Corporation's 'Dogs' quadrant is comprised of low growth products and/or brands with a low market share. The corporation's Dogs quadrant is made up of products and/or brands that are not performing well in the market.

One of the corporation's 'Dogs' products is their personal credit card. As of 2021, the corporation's personal credit card's revenue decreased by 15%, resulting in a net income loss of $2 million USD.

Another product in the Dogs quadrant is the corporation's home equity line of credit. As of 2022, the home equity line of credit's market share decreased by 20%, generating a net loss of $1.5 million USD.

Expensive turn-around plans are generally not recommended for products and/or brands that fall under the Dogs quadrant. Instead, it is suggested that businesses divest them in order to minimize expenses and maximize their revenue.

• Dogs quadrant: low growth products/brands, low market share
• Action: Avoid and minimize
• Suggestion: Divestiture

First Horizon Corporation (FHN) Question Marks

As of 2023, First Horizon Corporation (FHN) has several products in the Question Marks quadrant of the Boston Consulting Group Matrix Analysis. These products have high growth potential, but currently have low market share, and require significant investments to increase their market share and become profitable.

One of the main Question Marks products of FHN is its Diversified Commercial Banking segment, which operates a range of commercial banking services like lending, deposits, and treasury services. As of 2022, this segment generated a net revenue of $244 million and a net income of $43 million.

• Another Question Marks product is the Wealth Management segment of FHN, which provides wealth management services including investment advice, financial planning, and trust services. As of 2022, this segment generated a net revenue of $192 million and a net income of $32 million.
• The Mortgage Bank segment is another Question Mark for FHN. This segment provides residential mortgages to customers in the United States. As of 2022, this segment generated a net revenue of $108 million and a net income of $11 million.

Overall, these Question Marks products of FHN require significant investments to increase their market share and become profitable. However, due to their high growth potential, they have the potential to become Stars in the future, if they are able to gain significant market share in their respective industries.

Overall, First Horizon Corporation (FHN) has a diverse portfolio of products and brands, some of which are in a state of growth, while others generate significant cash flow, and yet others require further investment to reach their potential. By utilizing the Boston Consulting Group (BCG) Matrix Analysis, FHN can effectively evaluate its portfolio composition and make decisions on which areas to invest in and which to divest. This ensures that the company remains competitive in the market and delivers long-term profitability to its shareholders.

• Stars quadrant: high growth products/brands, high market share. These products/brands have a high potential to become Cash Cows if their current success is sustained. FHN should focus on investing in these products to maximize their growth potential and generate long-term profitability.
• Cash Cows quadrant: high growth products/brands, high market share in mature markets. These products/brands are essential to FHN's success as they generate significant cash flow. By maintaining their current level of productivity, FHN can continue to invest in growth opportunities and remain competitive in the market.
• Question Marks quadrant: high growth potential products/brands, low market share. These products/brands require significant investments to increase their market share and become profitable. However, their high growth potential makes them worth the risk as they have the potential to become Stars in the future.
• Dogs quadrant: low growth products/brands, low market share. These products/brands are not performing well in the market and are not worth the investment. FHN should divest them in order to minimize expenses and maximize their revenue.

The BCG Matrix Analysis offers valuable insights into the composition of FHN's portfolio. By using this model, FHN can analyze its products and/or brands and make informed decisions on how to allocate its resources effectively. FHN can effectively invest in high-growth products/brands, maintain the profitability of Cash Cows, and consider divestiture for products/brands in the Dogs quadrant. This ensures that the company makes informed decisions that align with its strategic goals and remain competitive in the market.

In conclusion, the BCG Matrix Analysis offers valuable insights into the composition of FHN's portfolio, helping the company to make informed decisions on how to allocate its resources effectively. By investing in high-growth Stars quadrant products, maintaining the profitability of Cash Cows, and divesting from the Dogs quadrant, FHN can ensure long-term success and profitability in the ever-changing financial services industry.