Tuesday, January 25, 2011

First Horizon National (NYSE:FHN) Weighed Down on Repurchase Requests

The credit trends of First Horizon National (NYSE:FHN) continue to improve, but its exposure to repurchase requests will continue to weigh on the share price of the bank.

FBR says, "On a positive note, credit trends showed marked improvement as management continues to proactively address problem assets. However, we believe First Horizon continues to be relatively overexposed to potential losses given its robust pipeline of repurchase requests. This exposure, combined with concerns about its earnings power in a weak macroeconomic environment, represent a headwind to shares. In light of 4Q10 earnings, we are adjusting our FY11E GAAP EPS estimate to $0.40 from $0.30 and introducing our FY12E EPS estimate of $0.75."

FBR Capital maintains a "Market Perform" rating on First Horizon National (FHN), which closed Monday at $11.39, losing $0.40, or 3.39 percent. FBR has a price target of $11 on First Horizon.

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