First Tennessee Bank is ramping up its presence in the Mid-Atlantic states of North Carolina, South Carolina and Virginia and moving to a larger building in Raleigh, N.C. to make room for 10 additional employees and new services, the company announced today.
This will mark First Tennessee’s first notable expansion since the mid-2000s when new branch locations were built throughout the state.
David Popwell, First Tennessee president of banking, called the move a “reorganization” and said the bank is committed to growing its footprint outside of Tennessee and into both North Carolina (Winston-Salem, Charlotte and Raleigh) and Virginia (Richmond).
“Our growth and success in the Mid-Atlantic Region has resulted from combining experienced, responsive professionals with a complete set of financial products and the flexible operating framework of a boutique banking operation,” Popwell said in a press release. "The Mid-Atlantic Region shares many characteristics of our Tennessee regions. We are pleased by the response in the Raleigh market, which allows us to enhance the depth of our service to meet the expanding needs of businesses and individuals."
Expanded services will include private client banking, wealth management, corporate and commercial lending and commercial real estate, according to the release.
First Tennessee, a subsidiary of Memphis-based First Horizon National Corp. (Ticker: FHN), suffered massive losses in First Horizon’s mortgage division during the Great Recession. The bank sold off its mortgage division and has been in recovery mode ever since. It is now providing mortgages for property owners in Tennessee.
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.
Planters Bank has recruited from First Tennessee veteran Nashville business banker Hayse McGahey, who will be vice president of commercial banking at the Hopkinsville, Ky.-based institution which runs six branches in Clarksville. In addition to his time at First Tennessee, McGahey also has worked at Bank of America and Regions Bank. He'll fill a key role at Planters, which recently signed a deal to buy some Old National Bank offices in Western Kentucky. The bank has assets of about $680 million and in the first half of this year posted a profit of $5.4 million, up 12 percent from a year ago.
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