First Horizon's (NYSE:FHN) Earnings Power Concern in Weak Economy

First Horizon National (NYSE:FHN) has attracted more attention than usual lately on the news they're raising capital to pay back TARP, and concerns over whether or not they have strong enough earnings in an ongoing weak economy.

FBR noted, "We reiterate our rating and maintain our $11 price target following FHN's announcement of a $250M common stock offering and a $400M subordinated debt offering. Recall that FHN has approximately $866M of TARP remaining, and the company plans to repay TARP with the proceeds from the offering. FHN completed the equity offering at $10.50, which is a favorable price. We also point out that FHN is raising far less capital than expected to repay TARP. While we believe that management is taking the right steps, we remain concerned about First Horizon's earnings power given a weak macro economy and the company's legacy liabilities. Until we get more clarity on the details surrounding the debt offering, we are maintaining our FY10 GAAP EPS estimate of ($0.04) and our FY11 EPS estimate of $0.35."

FBR Capital maintains a "Market Perform" rating on First Horizon National, which closed Tuesday at $10.45, down $0.47, or 4.30 percent. Volume was over 5 times the 3-month daily average.