Several Firms Chime In on First Horizon National's (FHN) Above-Average GSE Mortgage Repurchase Exposure

June 26, 2012 4:01 PM EDT
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Price: $19.44 --0%

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    9 Buy, 14 Hold, 0 Sell

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    Up: 28 | Down: 28 | New: 23
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Three firms came out with comments on First Horizon National (NYSE: FHN), the day after the bank disclosed a $272 million pretax charge during Q2 related to mortgage repurchases and pending litigation matters. FHN said the amount would mainly be used to increase its reserve for exposure to Fannie Mae and Freddie Mac.

The first firm, Compass Point, cut FY12/13 EPS estimates. Analyst, Mike Turner said, "...We believe the event represents a significant milestone in putting the GSE exposure behind them and opens the door to reaching a settlement. That said, we continue to believe private-label related putbacks represent a more material risk as losses to date have been immaterial. We reiterate our Sell-rating and $8.00 price target."

The second firm, Morgan Stanley actually upgraded shares from Equalweight to Overweight.

Lastly, Barclays, which maintained an 'Equalweight' rating, but lowered Q2 and FY12 EPS estimates. Analyst, Jason M. Goldberg mentioned several other banks that had above average GSE Mortgage repurchase exposure.

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