This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

First Horizon Ups Its Bad Mortgage Risk

First Horizon in April increased its share buyback program to $200 million, after repurchasing $44.5 million worth of common stock during the first quarter. CEO Bryan Jordan said during the conference call that "we don't see this, in isolation, having an impact on our repurchase program."

First Horizon's shares closed at $7.91 Monday, down 1% year-to-date, following a 32% decline during 2011.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

The shares trade for 0.9 times their reported March 31 tangible book value of $8.78, and for 10 times the consensus 2013 earnings estimate of 80 cents a share, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is 53 cents.

FBR analyst Paul Miller on Monday reiterated his "Underperform" rating for First Horizon, while lowering his price target for the shares to $6.50 from $8.00 and lowering his second-quarter 2012 EPS estimate to a loss of 56 cents from earning of 11 cents a share. The analyst lowered his full-year 2012 EPS estimate to a loss of 30 cents from earnings of 45 cents, and lowered his 2013 EPS estimate to 50 cents from 68 cents.

Miller said First Horizon's second-quarter charge would work out to "$177M after-tax or $0.69 per share" and also said that "the company has yet to receive material private-label repurchase requests where it has meaningful exposure," and that "while its securities are performing relatively well, we believe private-label putbacks could ultimately prove to be costly."

FBR estimates that First Horizon "still needs to work through approximately $1.0 billion of expenses before putting mortgage repurchases to rest."

KBW analyst Jefferson Harralson late on Monday reiterated his "Market Perform" rating for First horizon, with an $8.00 price target, saying that "while agency exposure now appears mostly ring-fenced, private label remains relatively unknown with FHN providing little additional color."

Harralson estimates that First Horizon will post a second-quarter net loss of 60 cents, and lowered his 2012 EPS estimate to a loss of 10 cents, from earnings of 30 cents. The analyst left unchanged his 2013 EPS estimate of 65 cents.

Interested in more on First Horizon? See TheStreet Ratings' report card for this stock.

RELATED STORIES:


-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
FHN $14.06 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs