J.P Morgan Comments On First Horizon National Following Management Meetings

J.P Morgan recently met with First Horizon's FHN CEO, Bryan Jordan. Although J.P Morgan views leadership at FHN as one of the strongest in the group, with top-line growth likely to remain a challenge for the bank in 2011, tied in part to a very large run-off portfolio, and with prospects for improved credit quality now seemingly captured in the valuation of the stock, JPM believes the opportunity for the stock to be an outperformer in 2011 is tied to opportunities to deploy excess capital. J.P Morgan believes the most likely avenues for the bank are to either let already strong capital levels further build, pursue smaller and perhaps lesser competitive deals, which will not do much to move the needle, or pursue larger deals, which will likely come with a higher price tag. Given already rich pricing being seen at this early stage of the traditional M&A cycle, J.P Morgan believes the best M&A play remains to own the sellers rather than the buyers. J.P Morgan has a $13 PT and Neutral rating on FHN FHN closed Thursday at $11.83