Does Private Label Mortgage Increase Risk For FHN?

JP Morgan has published a research report on First Horizon National Corporation

following 3Q earnings results and has subsequently lowered the price target. In the report, JP Morgan writes "Although FHN reported its second quarter of profitability, as well as core EPS above forecast, the primary focus on the quarter was the risk from private label put-backs as well as procedural risk from foreclosures. Although the economic risk posed to FHN appears manageable on both fronts, these issues will likely result in an overhang on FHN shares until a track record is built demonstrating conclusively that the risk to capital from these issues is manageable. With the shares trading at only a modest discount on a P/TBV basis, and in line with peers on a 2014 earnings power basis, we see better opportunities in the group and maintain our Neutral [rating]." JP Morgan has lowered the price target from $13 to $12. First Horizon National Corp. closed Friday at $10.03.