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VOL. 123 | NO. 154 | Thursday, August 7, 2008

First Horizon Shares Fall with Broader Sector

AP

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NEW YORK (AP) - Shares of regional bank First Horizon National Corp. tumbled Wednesday morning as the broader financial services sector fell sharply amid renewed concerns about the health of the mortgage and credit markets.

First Horizon shares fell 33 cents, or 3.2 percent, to $10.08 in morning trading. First Horizon shares have traded between $4.52 and $36.96 during the past year.

The broader financial services sector fell after mortgage financier Freddie Mac posted a wider-than-expected loss during the quarter, demonstrating there are still problems in the mortgage market.

In a sign that mortgage delinquencies and defaults are likely to continue rising, Freddie set aside $2.5 billion for loss provisions during the quarter.

Like nearly all other banks, Memphis, Tenn.-based First Horizon is facing mounting losses in its lending portfolios, especially those tied to residential real estate. First Horizon set aside $220 million to cover loan losses during the second quarter.

The news at Freddie is also bad for regional banks because the banks rely on Freddie and sister company Fannie Mae to purchase mortgages from them. If Fannie and Freddie have to begin reducing their portfolios or cut back on purchasing loans, it could lead to a decline in revenue and lending options for banks such as First Horizon as they may not have as much capital to originate new mortgages.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 59 59 4,335
MORTGAGES 48 48 4,862
FORECLOSURE NOTICES 0 0 749
BUILDING PERMITS 100 100 10,251
BANKRUPTCIES 45 45 3,194
BUSINESS LICENSES 23 23 2,115
UTILITY CONNECTIONS 22 22 1,268
MARRIAGE LICENSES 16 16 824