First Horizon (NYSE:FHN)
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5 Years : From Jul 2012 to Jul 2017
First Horizon National Corp. (FHN) will shutter equity-research firm FTN Equity Capital Markets Corp., marking the end of a company credited with helping popularize field work in an industry dominated by number-crunching.
The Tennessee bank said Monday it will take a $10 million charge as it exits the institutional equity-research business. All of FTN Equity Capital's nearly 100 employees will be affected by the exit, First Horizon spokesman Anthony Hicks said. The employees will be offered severance.
FTN Equity Capital was no longer a "strategic fit" for First Horizon, Hicks said.
The move signals the collapse of a deal the bank announced in September to sell the unit to asset-management and merchant-banking firm Point Capital Partners LLC. Point Capital officials could not be reached for comment.
"They were one of the pioneers in terms of doing a lot of field work, channel checks, and to incorporate that very explicitly in their reports," Sanford Bragg, president and chief executive of industry tracker Integrity Research Associates said.
A "channel check" is an analyst's first-person look into a production line, sales, or another variable in a business. The check is often used to compare against projections. Such an approach can shed light on company guidance or Wall Street expectations where financial modeling cannot.
FTN Equity brought that first-hand approach to the technology and health-care coverage it was best known for, Bragg said.
First Horizon reported a wider loss last quarter compared to the year-ago period, disappointing analysts. The company said it was still dealing with "a challenging economy" when it announced those results on Jan. 19.
In September, when the bank announced the sale to Point Capital, First Horizon made clear it was shifting its efforts to other businesses.
"Over the past 18 months we have refocused on our highly successful FTN Financial and First Tennessee Bank businesses, and this sale further refines that focus," the company said.
First Horizon shares were off 1.4% to $12.77 in afternoon trading.
-By Brendan Conway, Dow Jones Newswires; (212) 416-2670; firstname.lastname@example.org