Within a week of reporting fourth quarter 2013 results, First Horizon National Corp. (FHN) announced that its board of directors has approved the payment of a quarterly cash dividend and a $100 million share buyback program.
A quarterly dividend of 5 cents per share will be paid on Apr 1, 2014, to shareholders of record as on Mar 14, 2014.
As for the share buyback program, First Horizon National can carry out the repurchases till Jan 31, 2016. The newly approved program replaces the $300 million authorization made in 2011. There was $37 million worth of repurchases left from this prior authorization exiting the fourth quarter of 2013. In the fourth quarter, First Horizon National paid the quarterly dividend of 5 cents to its shareholders while refraining from share buybacks.
Apart from the capital deployment plans, we believe First Horizon National’s efforts to control costs and improve long-term profitability will work in favour of the company. A brief snapshot of the company’s fourth quarter 2013 results has been provided below.
Total revenue at $292.2 million reflected an 8% year-over-year decline and was below the Zacks Consensus Estimate of $299.0 million. Despite the weak top-line performance, prudent expense management drove earnings per share to 21 cents. This was ahead of the Zacks Consensus Estimate as well as the year-ago figure of 17 cents.
Net interest income in the quarter declined 8% year over year to $159.2 million and non-interest income slipped 12% from the prior-year quarter to $132.9 million. Non-interest expense declined 4% from the prior-year quarter to $260.1 million. Allowance for loan losses were down 8% year over year to $253.8 million. Nonperforming assets rose 4% year over year to $435.0 million.
In the last 7 days, the Zacks Consensus Estimate for First Horizon National declined 8.3% to 66 cents for 2014 and 7.6% to 85 cents for 2014.
First Horizon National currently has a $2.9 billion market capitalization. The stock currently holds a Zacks Rank #3 (Hold). Some better-ranked Southeast banks include Bank of Kentucky Financial Corp. (BKYF), Capital City Bank Group Inc. (CCBG) and Pinnacle Financial Partners Inc. (PNFP). All these banks sport a Zacks Rank #1 (Strong Buy).