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Is First Horizon Bank In Trouble?

Is First Horizon Bank In Trouble?

First Horizon National Corp logo (2020).png
First Horizon National Corporation logo, as of 2020

Many find themselves worried about their bank accounts these days. Banks are dropping like flies it seems, now, Silicon Valley, Signature Bank, who is next?

Now First Horizon’s stock drops from $25 to $14 and depositors worry!

Even though the bank is under acquisition by TD Bank, now it sits 38% Below the TD Bid. Many worry the acquisition won’t occur!

Probably not worry that is needed. But according to Bloomberg, traders think the deal fails to close.

Let’s take a look at the broader US Banking industry as well and their health!

Below we have a chart showing unrealized depreciation on Hold to Maturity Securities (HTM) for top 100 banks versus equity. 

These unrealized losses are NOT reflected in profits or a deduct to equity via Other Comprehensive Income (OCI) – only in the footnotes! Moreover, we don’t find these losses reflected in stress tests or measures of capital adequacy. 

Furthermore a 25 bp (1/4 of 1 percent) increase in rates for a 10-year security causes approximately 2 points in losses (100 par to 98 to reflect yield discount). 

Lately all we can read about these days are banks failing everywhere! Are we in a financial crisis? Now some worry Will Bank of America Collapse? And many others worry whether or not there is a Hawaii Bank Run? And of course, many others worry about the more local establishments. Will First Republic Bank Fail ?

And yes we all know about the FDIC: Federal Deposit Insurance Corporation‘s guarantee of $250,000 per US bank account and President Biden’s guarantee of all accounts. However, knowing your bank is safe still allows us all to sleep at night much better. That’s for sure!

First Horizon Bank, formerly known as First National Bank of Memphis, is a leading financial services company that has been providing innovative banking and financial solutions for over 150 years. The company has a rich history that spans more than a century and has played a significant role in the development of the American South.

The history of First Horizon Bank can be traced back to 1864 when it was founded as the First National Bank of Memphis. In the years that followed, the bank grew rapidly, expanding its operations to include a range of financial services, including commercial banking, mortgage lending, and wealth management.

Throughout the 20th century, First Horizon Bank continued to evolve and adapt to changing market conditions. The bank played a significant role in financing the growth of the American South, providing financing for businesses and individuals across the region.

In 2007, First Horizon Bank announced that it would rebrand itself as First Horizon National Corporation, reflecting the company’s focus on national growth and expansion. In 2019, the company announced that it would merge with IberiaBank to create a new, larger regional bank called First Horizon National Corporation.

Today, First Horizon Bank is a leading provider of banking and financial services in the southeastern United States. The company has a strong focus on customer service and innovation and is committed to helping consumers and businesses achieve their financial goals.

First Horizon Bank has also played a significant role in promoting financial literacy and education. The company has launched several initiatives aimed at helping consumers better understand their finances, including financial education programs and tools to help consumers manage their money more effectively.

In conclusion, First Horizon Bank has a rich history that spans over 150 years. The company has played a significant role in the development of the American South and has evolved to become one of the most innovative and customer-focused financial services companies in the world. With its commitment to customer service, innovation, and financial education, First Horizon Bank is well positioned to continue thriving in the years to come.

  1.  “First Tennessee National Corp. Changes Name To First Horizon National Corp” (Press release). Business Wire. April 20, 2004.
  2. ^ “First Horizon acquires Las Vegas-based Republic Mortgage”Reuters.
  3. ^ “First Horizon National Corp. Announces Sale of First Horizon Bank Branches” (Press release). Globe Newswire.
  4. ^ “First Horizon sells mortgage business to MetLife”American City Business Journals. June 4, 2008.
  5. ^ Meek, Andy (December 14, 2010). “First Horizon to Repay TARP Funds”Memphis Daily News.
  6. ^ “First Tennessee Bank, National Association, Memphis, Tennessee, Assumes All of the Deposits of Mountain National Bank, Sevierville, Tennessee” (Press release). Federal Deposit Insurance Corporation. June 7, 2013.

Is First Horizon Bank In Trouble?

Is US Bank In Trouble?

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US Bank Building in Sheboygan, Wisconsin

If you look at the stock price US Bank faces trouble. However, they are awash in cash and liquidity. And as well know, if we keep less than $250,000 in one account, we have the backing of the FDIC! See for details: FDIC insurance | U.S. Bank (usbank.com).

Of course at the same time, everyone wants to know how healthy their bank stands! And so let’s dig in!

Below we have a chart showing unrealized depreciation on Hold to Maturity Securities (HTM) for top 100 banks versus equity. 

These unrealized losses are NOT reflected in profits or a deduct to equity via Other Comprehensive Income (OCI) – only in the footnotes! Moreover, we don’t find these losses reflected in stress tests or measures of capital adequacy. 

Furthermore a 25 bp (1/4 of 1 percent) increase in rates for a 10-year security causes approximately 2 points in losses (100 par to 98 to reflect yield discount). 

Looks pretty fantastic for US Bank! Less than 20% of its net equity finds itself impaired by long-term loan losses. Bank of America claims sterling health and they find nearly half of their equity impaired by losses on loans. Of course, neither bank plans to sell these loans. However, as SVB showed us, when a bank run occurs, a bank needs every dollar it can access. See our piece: How Did Silicon Valley Bank Fail?

Of course, now things seem different as the Federal government decided to backstop all banks. So from an existential standpoint, there is no risk. Of course, who knows, politicians can change their minds!

For more coverage on the bank crisis see our pieces:

Will Wells Fargo Fail?

Is my money Safe in Schwab?

In fact with this federal backstop, even famous short seller and market cynic thins the crisis might be over. See our piece: What is Michael Burry holding?

Lately all we can read about these days are banks failing everywhere! Are we in a financial crisis? Now some worry will Bank of America collapse? And many others worry whether or not will Wells Fargo fail? 

And of course, many others worry about whether the more local establishments can keep breathing. Will First Republic Bank fail? Or is my money Safe in Schwab?

US Bank is a financial institution that provides a wide range of banking and financial services to individuals, businesses, and institutions.

US Bank was founded in 1863 as the First National Bank of Cincinnati. Over the years, the bank underwent several mergers and acquisitions, expanding its operations and geographic reach. In 1966, the bank changed its name to United States National Bank of Oregon and, in 1997, it adopted its current name, US Bank.

In the last two decades, US Bank grew significantly.

According to its financial reports, the bank’s total assets increased from $162 billion in 2001 to over $600 billion in assets today, representing a growth rate of over 240%. The bank also expanded its operations into new markets, acquired other financial institutions, and diversified its product offerings.

One of the key drivers of US Bank’s growth has been its focus on digital banking and technology. In recent years, the bank has invested heavily in digital infrastructure, launching mobile banking apps, online account management tools, and other digital services to meet the evolving needs of its customers.

The US Bank Tower in downtown Los Angeles, California

In conclusion, US Bank’s history finds itself marked by growth, innovation, and a commitment to providing high-quality banking services to its customers.

U.S. Bancorp logo.svg

U.S. Bancorp
 – U.S. Bancorp Annual Report 2010 (Referrer:About U.S. Bancorp–Annual Meeting

Is US Bank In Trouble?