Executives at First Tennessee say they will next year begin replacing customers' credit cards with chip cards, which have a much higher level of security. The bank's announcement came on the same day that JPMorgan Chase disclosed that it was hacked this summer and that information on 83 million accounts was compromised.
"There will be a period of adjustment for consumers," said Dondi Black, who manages retail payments for First Tennessee. "For example, chip cards are not swiped, but rather inserted into the terminal where they remain for the duration of the transaction." With some terminals, customers will be able to touch the EMV card to the terminal to complete the payment. First Tennessee's EMV cards will have this capability right away. "We believe customers are fatigued by numerous merchant breaches and will welcome a solution like ours that provides an additional layer of protection and makes the purchase process faster and more convenient," Black said.
It looks like Nashville was kind to First Tennessee Bank in the second quarter. The bank's parent company, First Horizon National Corp., said its Middle Tennessee loan book grew by 8 percent in the three months ended June 30. That was double the company's overall growth rate.
Customers of First Tennessee Bank should soon find it easier to make remote deposits to their bank accounts without the inconvenience of taking a paper check to a teller or ATM.
First Tennessee, which is part of First Horizon National Corp., has selected WAUSAU Financial Systems to provide remote deposit capture (RDC) services. Terms of the deal were not disclosed in a release.
The solution, called Deposit 24/7, is expected to go live in July. It will include location awareness tracking to identify where RDC deposits are captured and transmitted.
RDC services allow a customer to scan checks and transmit the images to the bank to create a digital deposit. First Tennessee, an early adopter of RDC, said it wanted a partner that could provide improved risk monitoring functionality to meet regulatory and compliance requirements as well as more RDC functionality. That includes payment capture, accounts receivable system integration and export features.
First Tennessee also sought training and support for its RDC customers as well as the ability to offer more options for scanners and drivers while simplifying the scanner licensing process.
WAUSAU Financial System’s Location Awareness provides alerts if deposits are made somewhere other than the expected location, making any fraudulent activities easier to spot.
“First Tennessee Bank prides itself on maintaining a high customer retention rate, which speaks to our positive customer satisfaction rating. To ensure satisfaction, we recognize the importance of the customer experience,” said Taylor Vaughan, director of Treasury Management Services at First Tennessee Bank. “It’s our hope that through a more flexible RDC offering and robust implementation and training courses offered by WAUSAU, our customers, too, will be pleased with this partnership.”
First Tennessee Bank is getting serious about building a commercial presence in Houston, the nation's fifth-largest metro area. The bank has recruited former Whitney Bank and Sovereign Bank regional executive Gary Olander to lead its efforts and build a team there. Houston becomes the fifth bank region for First Tennessee, joining three in in Tennessee and the Mid-Atlantic.
"Houston is one of the most exciting, diverse communities in the country, and the Texas economy is expanding more than twice as fast as the national rate," said Bryan Jordan, First Horizon's chairman and CEO. "Businesses in Texas are benefitting from income and employment rates that are growing faster than the nation's as a whole, and manufacturers are increasingly taking advantage of Houston's location to more efficiently distribute their goods. We see this as a great time to introduce First Tennessee Bank to the business leaders of Houston."
Shares of First Horizon National, the parent of First Tennessee Bank, will soon leave the benchmark Standard & Poor's 500 Index. The parent of the largest bank headquartered in Tennessee will make way for what until recently was called Pfizer Animal Health. Shares of First Horizon (Ticker: FHN) were off only slightly Monday — they might slide some more in the coming days as index fund managers shift their holdings — but are still up 10 percent on the year.
Memphis-based First Horizon National Corp. announced Wednesday a quarterly dividend increase to 5 cents from 1 cent per share of common stock and a $100 million increase in its stock buyback program.
The cash dividend is payable April 1 to common shareholders of record on March 15.
First Horizon (Ticker: FHN) ended trading Wednesday at $10.02, down 7 cents per share.
"Returning capital to our shareholders is an important part of our plan to create shareholder value," Bryan Jordan, First Horizon chairman and CEO, said in a release. "This is a good way to start 2013, by rewarding our shareholders for their investment in us."
The $100 million addition increases the total for the stock buyback program the company initiated in October 2011 to $300 million, and the program has been extended through January 2014.
By the end of 2012, First Horizon, the parent of First Tennessee Bank, had purchased $175 million of common stock through the program, and with the addition, the company has $125 million for future purchases. Under the program First Horizon is repurchasing the company's common stock in the open market, privately negotiated transactions or otherwise, subject to market conditions.
Mike Turner at Compass Point Research has downgraded shares of three of the biggest banking names in Middle Tennessee, saying they are fully valued given the broader economic environment and the specific issues each faces. Turner lowered Regions Financial and SunTrust Banks to 'neutral' from 'buy' and First Horizon National to 'sell' from 'neutral.' Investors in Regions will need faster loan growth, he writes, while SunTrust needs to get a better relationship between its costs and revenues. First Horizon gets a 'sell' rating because it faces higher litigation risk in the next few quarters and because "revenue growth will continue to underwhelm."
Shares of SunTrust are fighting off the downgrade in Monday morning trading while Regions and First Horizon are solidly in the red.
Marty Mosby at Guggenheim Securities says First Horizon National, the parent of First Tennessee Bank, remains on track with a multi-year cost-cutting program that is repositioning the Memphis-based company to a more appropriate post-housing boom size. A big part of that, he says, is squeezing out another $50 million in expenses in 2013, $30 million of which will come from lower pension costs.
Thus, the two tactical improvements to core earnings continue to make progress and we believe are still moving FHN to an earnings power around $1 in 2013.
First Horizon National has told investors it is taking a charge of $272 million to cover extra costs it expects to incur by having to buy back mortgages from Freddie Mac and Fannie Mae. As of March 31, the bank holding company's reserve against putbacks was just $161 million. The news prompted analyst Paul Miller at FBR Capital to lower his price target to $6.50 from $8. Miller has an 'underperform' rating on First Horizon (Ticker: FHN), which closed Monday at $7.91.
During a conference call late on Monday, First Horizon National CFO William Losch expressed confidence that the company wouldn't see further unexpected rises in mortgage loan putback demands from Fannie Mae, as the GSE had given "a view of how they've historically selected loans for repurchase requests, how they anticipate to select loans, both liquidated and delinquent, in the future, and gave us a lot of insight into how they come up with that."
SEE ALSO: The company's 8-K filing detailing the charge
The post-Great Recession recovery of First Horizon National has been one of the quieter stories of the regional banking sector. But in an update to its investor presentation, the parent of First Tennessee Bank details its steady progress on a number of fronts — even if the stock (Ticker FHN) hasn't yet reflected those improvements. One of the cleanest up-up-and-away charts in the deck? The one that shows First Horizon's book with mortgage lenders more than tripling last year.
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