Moody's confirmed the evaluation of the stand-alone core credit of the Baa2 subsidiary. In addition, it was rated A3 / Prime-2 for long-term and short-term deposits. On the other hand, the parent company has a long-term issuer rating and an unsecured senior Baa3 rating.
The rating agency also assigned provisional ratings to First Horizon's listing. The shelf was rated (P) Baa3 for senior unsecured persons, (P) Baa3 for subordinates, (P) Ba1 for subordinate subordinates, (P) Ba1 for cumulative preferred shares and (P) ) Ba2 for non-cumulative preferred shares.
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First Horizon's improved asset risk, as well as its strong retail banking base in Tennessee, which supports its core deposit financing profile, is the primary reason for the confirmation of the rating.
The Company's asset risk has improved as evidenced by lower problem loans and the liquidation of its non-strategic lending portfolio, which consists primarily of exposure to domestic debt securities from its traditional mortgage activities. According to Moody's, the merger of Capital Bank is considered a positive development in credit and an indication of a conservative credit culture.
In addition, Moody & # 39; s found that First Horizon's credit quality had improved in recent years, particularly with respect to credit losses and the net chargeback ratio. In addition, the rating agency estimates that the profitability of First Horizon, which was previously affected by acquisition-related costs and the low interest rate, has not improved. However, it is still lagging behind its counterparts in US regional banks of the same rating.
Moody's believes First Horizon's financing profile is impressive because it is backed by strong deposit financing, which fully finances the loan portfolio and reflects the strength of its dominant position in the Tennessee market. First Horizon, which acquired Capital Bank in November 2017, posted a 6.7% growth in deposits in 2018, driven by successful deposit campaigns in its new markets.
By contrast, ratings reflect lower capitalization and profitability than peers. After analyzing its capital deployment activities, Moody's is of the opinion that First Horizon seeks to be at the lower end of its CET1 target range of between 9.5% and 10%, which is less than its competitors.
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An upward rating change may occur if the Company is able to improve and maintain capitalization and demonstrate a favorable capital management approach to the bondholders, while maintaining a good performance of the bonds. assets.
On the other hand, downward pressure on ratings could result from further weakening of First Horizon's capitalization and / or a significant deterioration in the quality of assets in its portfolio. Origin or in its acquired portfolio.
The company's shares have lost 15.4% in the last six months, compared to a 13.3% drop in the sector to which it belongs.
First Horizon is currently ranked Zacks at rank 4 (sale).
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<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "DNB Financial Corp. DNBF attended slight revisions of 39, upward estimates Over the last 30 days, the stock has appreciated over 19% over the last year and is currently ranked Zacks at rank 2 (buy). You will find here the complete list of Zacks actions n ° 1 of the current rank (strong purchase). DNB Financial Corp DNBF has seen slight upward revisions over the past 30 days, and the stock has appreciated over 19% during the year. is currently ranked second in the Zacks (Zacks) ranking. Buy) you can see You will find here the complete list of Zacks actions n ° 1 of the current rank (strong purchase).
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