UPDATE 1-First Horizon better capitalized than a year ago-Stifel

lunes 13 de octubre de 2008 17:50 CEST

(Recasts; adds details, share movement)

Oct 13 (Reuters) - First Horizon National Corp (FHN.N: Cotización) has executed an "impressive" restructuring over the past year and is a much better capitalized, focused and managed company than it was a year earlier, Stifel Nicolaus analyst Anthony Davis said.

Davis, who said the company faces very little risk of a deposit run, liquidity shortfall or securities impairment, upgraded shares of the largest Tennessee bank to "buy" from "hold." He set a $13 price target on the stock.

"In a takeout, we think the Tennessee deposit base is worth at least $15 per share," the analyst wrote in a note to clients. Davis expects the company to lose 17 cents a share in 2008 and earn 41 cents a share in 2009.

"We estimate First Horizon has normalized EPS (earnings per share) power of around $1.45 and believe it can return to that level by the second half of 2010," he said.

Though problems related to asset quality continue to hurt earnings, "we do not envision the tangible equity ratio falling below 7.5 percent or Tier 1 dropping below 10 percent," Davis said.

First Horizon's Tier-1 capital ratio, a measure of a bank's ability to cover losses, was 10.4 percent in the second quarter, and 8.1 percent in the first quarter.

First Horizon shares rose to a high of $9.86, before falling back to trade up 86 cents at $8.97 Monday morning on the New York Stock Exchange. (Reporting by Ratul Ray Chaudhuri in Bangalore; Editing by Pratish Narayanan)