This Day On The Street
Continue to site
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

'Storm Is Brewing' for Banks

First Horizon National Corp.
Shares of First Horizon National Corp. (FHN - Get Report) of Memphis, Tenn., closed at $8.33 Monday, returning 4% year-to-date, following 32% decline during 2011. FHN Chart FHN data by YCharts

The shares trade just below their reported March 31 tangible book value of $8.78, and for nine times the consensus 2013 earnings estimate of 89 cents, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is six cents, including an expected net loss of 50 cents a share when the company announces its second-quarter results on July 20, in the wake of a $272 million charge for mortgage putback reserves and related litigation.

Steven Alexopoulos rates First Horizon "Overweight," with an $11.50 price target, saying on Tuesday that "the biggest cat is already out of the bag," as "the company's preannouncement that it is taking a $272 million pre-tax charge related to mortgage putbacks and litigation expense in 2Q drove a rally in the shares as this was seen as a pull forward of expected provision needed for losses through 2013."

With JPMorgan expecting First Horizon's average loans to decline at an annualized pace of 8%, while securities grow 15% quarter-over-quarter, Alexopoulos expects to see some support to the company's net interest margin, contracting by two basis points to 3.10%.

The analyst also anticipates the company will announced that it repurchased 5.4 million shares during the second quarter, which is the same pace as in the first quarter.

JPMorgan estimates First Horizon to report core earnings of 28 cents a share this year, followed by core EPS of $1.09 in 2013.

Alexopoulos calls First Horizon "a turnaround story" and said on Tuesday that "while we could still see unexpected surprises, with each passing quarter not only is the company boosting earnings power via buybacks, but we also believe we get one step closer to the company evolving into one of the highest return on tangible equity banks in the industry."

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

2 of 7

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
Only $9.95
14-Days Free
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
AF $13.05 0.00%
BXS $24.24 0.00%
FRC $58.81 0.00%
FHN $14.18 0.00%
SBNY $132.50 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs