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First Tennessee Bank has
reached an agreement in principle to settle a key outstanding matter related
to the mortgage business the company sold in 2008.
First Tennessee, the regional bank for First Horizon National Corp.
, has an agreement in principle with the United States Department of
Housing and Urban Development and the United States Department of Justice to
settle certain potential claims related to First Tennessee's underwriting and
origination of FHA-insured mortgage loans from Jan. 1, 2006, through Dec. 31,
2008, which have gone to claim not later than Apr. 2, 2015. Final legal
resolution remains subject to negotiation and execution of a formal written
settlement agreement satisfactory to all parties.
Under the agreement in principle First Tennessee has committed to make a cash
payment of $212.5 million. First Horizon previously reserved $50 million for
this matter and expects to report a pre-tax expense of $162.5 million related
to the agreement in principle in first quarter financial results. First
Horizon plans to announce financial results for the first quarter on Apr. 17,
2015.
This is another major legal resolution as First Tennessee unwinds from the
mortgage business the company sold in 2008. In the past several years First
Tennessee has resolved a number of other legal matters related to its former
mortgage business, and has sold substantial amounts of nonstrategic mortgage
loans and mortgage servicing.
Other information
This press release contains forward-looking statements involving significant
risks and uncertainties. A number of important factors could cause actual
results to differ materially from those in the forward-looking information.
Those factors include general economic and financial market conditions,
including expectations of and actual timing and amount of interest rate
movements including the slope of the yield curve, competition, ability to
execute business plans, geopolitical developments, recent and future
legislative and regulatory developments, inflation or deflation, market
(particularly real estate market) and monetary fluctuations, natural
disasters, customer, investor and regulatory responses to these conditions and
items already mentioned in this press release, as well as critical accounting
estimates and other factors described in First Horizon's annual report on Form
10-K and other recent filings with the SEC. First Horizon disclaims any
obligation to update any such factors or to publicly announce the result of
any revisions to any of the forward-looking statements included herein or
therein to reflect future events or developments.
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