Few Volunteers Willing to Step Up to First Horizon

Originally Published In the News April 28 2008 1:10 PM
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First Horizon’s (FHN-NYSE) ambition’s to become one of the larger mortgage lenders in the country has put shareholders in a house of pain. An intra-day upgrade from Friedman Billing’s might arrest the slide, but this stock’s upside is in doubt, according to FBR:

Firm expect that FHN’s $690 mln common equity raise will be sufficient to sustain strong regulatory capital ratios and will limit further downside to the shares for the immediate term, although one risk to firm’s analysis is possible losses associated with the disposition or wind-down of FHN’s mortgage operations, which could be material. In firm’s opinion, FHN’s outlook for credit costs of approx $100 mln per qtr remains optimistic, and while firm expects that the capital raise will be sufficient, greater-than-expected losses remain a risk. Given firm’s expectation for growing credit costs, continued losses, and an eroding book value, they also see little near-term upside for the shares. Briefing.com

Barron’s prematurely called a bottom in the stock several months ago; this stock has made fools of everyone who thought it was worth a look, including yours truly. Not even a windfall from its stake in Visa (V-NYSE) was enough to stave off lower prints in the stock.

This is one ugly chart.

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