First Horizon National Corporation
) announced the pricing of a public offering of roughly $100
million worth of depositary shares. Each share represents a
1/4,000th interest in a share of the company's Series A
Non-Cumulative Perpetual Preferred Stock and carries a fixed
annual dividend of 6.20%.
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The deal is anticipated to be completed somewhere around Jan 31,
this year. The proceeds from the offering are aimed to be used
for general corporate purposes. We believe that includes
maintaining a healthy balance sheet to pursue opportunistic
J.P. Morgan Securities LLC of
JPMorgan Chase & Co.
), Citigroup Global Markets Inc. of
) along with
The Goldman Sachs Group Inc.
) will serve as the joint book-running managers for First
Horizon. Moreover, RBC Capital Markets, LLC, Barclays Capital
Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank
Securities Inc. will act as the co-managers.
On Jan 18, First Horizon had reported-fourth earnings per share
of 17 cents, in line with the Zacks Consensus Estimate and well
ahead of the prior quarter earnings of 10 cents a share. The
results were driven by considerably improved credit trends.
However, the pressure on revenue growth continued. Rising
expenses were also a headwind.
In our viewpoint, First Horizon's primary objective behind the
aforementioned offering is to raise capital as it is currently
facing a shrinking revenue base, with pressure on both interest
and fee income. For the full-year 2012, First Horizon's revenue
came in at $1.36 billion, down 9% year over year.
First Horizon currently retains a Zacks Rank #3 (Hold).