Another wave of CRE handwringing
Posted on November 17, 2009 at 8:00 amIf you’re looking for even the slightest bit of optimism on the commercial real estate sector, you’re very much in the wrong spot. Fitch Ratings says the delinquency rate on office-building loans rose by a fifth in October.
“Though longer leases on office properties have historically mitigated sharp changes in performance, continued job losses are expected to increase pressure on the office sector,” said Managing Director and U.S. CMBS group head, Susan Merrick. “With the looming possibility of leases expiring on space under-utilized by companies that have downsized, office performance may not reach a trough for a few years.”
A page from First Horizon’s recently updated investor presentation provides a microcosmic view of how the property market is getting sicker. (Go to page 19.)
Worryingly, regional banks as a whole have a lot more CRE loans on their books as a percentage of their capital — although many bankers contend that this statistic is skewed by the inclusion of owner-occupied property loans, which they treat as more conventional C&I holdings.
SEE ALSO: Clusterstock’s concise, but detailed account of how we got here. For all the doom and gloom, it ends on a hopeful note (that I think isn’t meant to be ironic.)
Fortunately, this time around we have an advantage. We know how a contained credit problem can morph into a monster that destroys financial institutions and cripples the economy. Living through the housing bust may make us better able to cope with the commercial real estate bust. At least, it’s pretty to think so.
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First Tennessee still sees plenty of local opportunity
Posted on November 16, 2009 at 10:02 amIn an update of its analyst packet, First Horizon says its retail branch network in Middle Tennessee has the potential to grow big time, pointing to the lower deposit levels at its new branches. Getting the 25 office built since 2003 up to snuff would lift First Tennessee’s local deposits by more than $700 million. (In the most recent FDIC snapshot, First Tennessee checked with $1.6 billion in deposits, slipping to sixth in Nashville-area deposit market share.)
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First Horizon selling research unit
Posted on October 1, 2009 at 8:01 am
First Horizon has agreed to sell its FTN Equity Capital Markets unit to Point Capital Partners, a New Jersey investment firm. Disposing of the unit, which includes a West End office, means Memphis-based First Horizon will take a $14 million charge.
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Regional banks having another strong day
Posted on September 16, 2009 at 11:44 amBuoyed by another batch of improving economic data from the inflation and factory fronts, stocks are extending their September rally. Among the sectors leading the way are regional banks, with local players like Regions, Pinnacle and First Horizon picking up 6 percent or more.
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Two local health care players on IT best-of list
Posted on September 15, 2009 at 10:59 am
Healthways has been ranked 35th on the annual InformationWeek 500 list of top information technology organizations. The only other locally headquartered ranked in the top list’s top half is HCA. First Horizon, the Memphis-based parent of First Tennessee Bank, also ranks in the top 50.
SEE ALSO: Healthways’ release on the topic
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Stay healthy, get a raise
Posted on August 19, 2009 at 8:37 amWith a helping hand from one of Richard Branson’s ventures, First Horizon is giving its employees an incentive to shape up.
By wearing a GoZone pedometer and tracking daily activity, employees will accumulate points (HealthMiles) toward a reward based on their levels of activity. Moderate activity pays off — walking, playing with the kids, cycling. Participation is optional and requires employees to make a $2.50 contribution each payday, which is every two weeks, to the cost of the program.
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Fitch: First Tennessee not out of the woods
Posted on June 30, 2009 at 12:59 pmCredit ratings group Fitch says First Tennessee, which in many ways got a headstart on dealing with last year’s banking crisis, still has a credit mess on its hands.
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First Tennessee checks out of some stores
Posted on May 7, 2009 at 3:40 pmThe largest bank headquartered in Tennessee is saying goodbye to a number of its Memphis-area supermarket locations.
HT: The Bank Draft
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Rating agencies take aim at regional banks
Posted on April 24, 2009 at 12:56 amS&P has lowered its rating on First Horizon, saying the parent of First Tennessee is likely to face even more bad loans later this year. Over at Moody’s, analysts slashed their rating on SunTrust by three notches over concerns that the bank’s capital position will continue to deteriorate.
They also cited the bank’s commercial real estate exposure as a factor. Their peers at Deutsche yesterday said losses from that sector could reach $1 trillion, a number that is “likely to dominate the industry for the better part of a decade.”
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Analyst action: Cracker Barrel, regional banks
Posted on April 20, 2009 at 1:58 pmMKM Partners analyst Steve Anderson has lifted his rating for Cracker Barrel shares (Ticker: CBRL) to ‘buy’ from ‘neutral.’ He’s also raised his price target from $24 to a whopping $41, a good 25 percent above the stock’s level today, which is itself almost double its price of two months ago. Anderson last month said CBRL is set for a strong couple of quarters.
The recent run in regional bank stocks has analysts at Sterne Agee saying we should cool our jets a bit. They’ve downgraded shares of First Horizon (Ticker: FHN) and SunTrust (Ticker: STI) to ‘neutral’ from ‘buy.’ Still, their price targets of $14 and $20, respectively, are about 30 percent above the stocks’ current levels.
And staying in regional bank country, Wunderlich Securities has trimmed its price target for Green Bankshares (Ticker: GRNB) from $11 to $9.5.
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First Horizon loss bigger than expected
Posted on April 17, 2009 at 8:34 amThe parent of First Tennessee Bank lost $82.8 million in the first quarter as it increased its loan loss provision by $20 million and charge-offs rose to a shade under 4 percent. Per-share losses from continuing operations were 39 cents, well above the 25 cents analysts had been expecting. That has shares (Ticker: FHN) down almost 10 percent in early trading.
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Analyst: First Horizon won’t need to raise more capital
Posted on April 9, 2009 at 8:48 amKeefe Bruyette & Woods analyst Jefferson Harralson says loan losses at the Southeast’s top regional banks will rise further this year but that the parent of First Horizon has enough of a cushion to avoid needing to raise more capital. The same goes for Synovus, the parent of The Bank of Nashville, but Harralson expects Regions and SunTrust to have to make a move by the end of the year.
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Analyst action: Gaylord, CCA, First Horizon
Posted on April 3, 2009 at 8:20 amWachovia Capital Markets analyst Jeff Donnelly says investors should expect Gaylord to be range-bound after its recent burst from $5 to $9. He has downgraded the stock (Ticker: GET) to ‘market perform.’
Zacks’ Sean Smith says Corrections Corp.’s big federal contract win validates the company’s business model and sets it up for more such deals in the future. He has reitereated his ‘buy’ on the Nashville-baed company’s shares. (Ticker: CXW)
Citigroup has lowered its rating on First Horizon shares (Ticker: FHN) from ‘buy’ to ‘hold.’ The bank’s strong balance sheet is no longer a catalyst for price appreciation, its analysts said.
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Analyst action: First Horizon, LP
Posted on March 26, 2009 at 9:04 amThe banking team at Wunderlich Securities has lifted its price targets for a number of regional banks in the South and Southeast. Among them is First Horizon, which now has a $14 target. First Horizon shares (Ticker: FHN) are up slightly this morning and are trading around $10.60.
Over at Scotia Capital, analysts have lowered their opinion of Louisiana-Pacific shares (Ticker: LPX) from ’sector perform’ to ‘underperform.’
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Regional bank stocks fall further on Citi news
Posted on February 27, 2009 at 7:38 amPre-market investors are selling off shares of many of Nashville’s biggest banks after news that the government will take a 36 percent stake in Citigroup. Here’s a quick roundup as of 7:30 a.m. CST:
Regions Financial - down 16 percent to $3.31
Bank of America - down 21.6 percent to $4.17
SunTrust - down 12.4 percent to $11.35
Fifth Third - down 28 percent to $1.65
First Horizon - down 7.8 percent to $8.80
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