First Horizon to Settle Key Mortgage Matter
April 09 2015 - 04:05PM
First Tennessee Bank has reached an agreement in principle to
settle a key outstanding matter related to the mortgage business
the company sold in 2008.
First Tennessee, the regional bank for First Horizon National
Corp. (NYSE:FHN), has an agreement in principle with the United
States Department of Housing and Urban Development and the United
States Department of Justice to settle certain potential claims
related to First Tennessee's underwriting and origination of
FHA-insured mortgage loans from Jan. 1, 2006, through Dec. 31,
2008, which have gone to claim not later than Apr. 2, 2015. Final
legal resolution remains subject to negotiation and execution of a
formal written settlement agreement satisfactory to all
parties.
Under the agreement in principle First Tennessee has committed
to make a cash payment of $212.5 million. First Horizon previously
reserved $50 million for this matter and expects to report a
pre-tax expense of $162.5 million related to the agreement in
principle in first quarter financial results. First Horizon plans
to announce financial results for the first quarter on Apr. 17,
2015.
This is another major legal resolution as First Tennessee
unwinds from the mortgage business the company sold in 2008.
In the past several years First Tennessee has resolved a number of
other legal matters related to its former mortgage business, and
has sold substantial amounts of nonstrategic mortgage loans and
mortgage servicing.
Other information
This press release contains forward-looking statements involving
significant risks and uncertainties. A number of important factors
could cause actual results to differ materially from those in the
forward-looking information. Those factors include general economic
and financial market conditions, including expectations of and
actual timing and amount of interest rate movements including the
slope of the yield curve, competition, ability to execute business
plans, geopolitical developments, recent and future legislative and
regulatory developments, inflation or deflation, market
(particularly real estate market) and monetary fluctuations,
natural disasters, customer, investor and regulatory responses to
these conditions and items already mentioned in this press release,
as well as critical accounting estimates and other factors
described in First Horizon's annual report on Form 10-K and other
recent filings with the SEC. First Horizon disclaims any obligation
to update any such factors or to publicly announce the result of
any revisions to any of the forward-looking statements included
herein or therein to reflect future events or developments.
About First Tennessee and First Horizon
First Tennessee is part of the First Horizon National Corp.
(NYSE:FHN) family of companies. First Horizon's 4,300 employees
provide financial services through more than 170 First Tennessee
Bank locations in and around Tennessee and 26 FTN Financial offices
in the U.S. The company was founded during the Civil War in 1864
and has the 14th oldest national bank charter in the
country. First Tennessee has one of the highest customer
retention rates of any bank in the country, and FTN Financial is a
capital markets industry leader in fixed income sales, trading and
strategies for institutional clients in the U.S. and abroad. First
Horizon has been recognized as one of the nation's best employers
by Forbes, Working Mother and American Banker magazines. More
information is available at www.FirstHorizon.com.
FHN-G
CONTACT: First Horizon Investor Relations, Aarti Bowman, (901) 523-4017
First Horizon Media Relations, Jack Bradley, (901) 523-4813
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