In an effort to combat the declining top line, First Tennessee Bank – a subsidiary of First Horizon National Corp. (FHN) – will expand its footprint and develop its services in the states of NC, SC and VA.
Additionally, the bank will move its office located in Raleigh, NC to a larger and more important location. The new Raleigh office will be headed by Ken Reece, Senior Vice President of the company. It will offer increased services and create new relationships in its private client, wealth management, corporate and commercial lending, and commercial real estate operations. In mid April, First Tennessee anticipates to move into its new office at Oberlin Road.
First Tennessee will add jobs to cater to the influx of business, especially in the private client and commercial banking operations. Management believes that the bank’s success in the Mid-Atlantic Region is primarily attributable to the presence of experienced professionals along with a diverse range of financial products. Further, the flexible framework, coupled with consumer-friendly approach, has driven the bank’s success.
Recently, First Tennessee Bank forayed into Mid-Atlantic Region to recreate the success of the existing locations in West, Middle and East Tennessee. Management believes that the regional bank is focused on opportunistically diversifying its footprints in regions with vast growth potential.
We believe that First Tennessee Bank’s venture into newer locations is part of its strategy to mitigate the shrinking revenue base, regulatory issues and tepid economic recovery given the low interest rate environment, as these factors would become the headwinds in the short term.
Further, First Tennessee Bank’s endeavor to lower its exposure to problem loans is impressive. It is also aiming at controlling costs and improving long-term profitability by focusing on strengthening its core Tennessee banking franchise, which would augur well going forward.
First Horizon retains a Zacks Rank #3 (Hold). Other regional banking stocks that are performing better include Customers Bancorp, Inc. (CUUU), Monarch Financial Holdings, Inc. (MNRK) and Bank of Kentucky Financial Corp. (BKYF). All these companies carry a Zacks Rank #1 (Strong Buy).
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