Reuters: Regulatory News: UPDATE 1-First Horizon to take $272 mln charge in 2nd-qtr

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UPDATE 1-First Horizon to take $272 mln charge in 2nd-qtr Jun 25th 2012, 21:08 Mon Jun 25, 2012 5:08pm EDT * To add $250 mln to mortgage buyback reserve in Q2 * To realize a loss of about $60 mln in qtr June 25 (Reuters) - First Horizon National Corp said it expects to incur pre-tax charges of about $272 million in the second quarter, mainly relating to mortgage buyback demand from government-controlled entities Fannie Mae and Freddie Mac. The bank said it will add about $250 million to its mortgage repurchase reserve during the quarter and record it as an expense. Investors have been pressing U.S. banks to buy back now-soured home loans made during the housing boom. The loans were bundled into mortgage-backed securities and bought by outside investors, who now allege the loans do not meet guarantees made by the banks at the time they were packaged and sold. Earlier this month, PNC Financial Services Group Inc said it will add $350 million to its reserves in the quarter to cover increased mortgage buyback demand. First Horizon said the expected second-quarter charges were not related to whole-loan sales to buyers other than Fannie and Freddie. The Memphis, Tennessee-based bank expects to realize a loss of about $60 million which will be charged against the reserve. The reserve, which stood at $161 million at the end of the first quarter, will increase to about $351 million at June 30, the bank said in a statement. First Horizon's shares, which closed at $7.91 on Monday on the New York Stock Exchange, were down 2.65 percent after the bell. Link this Share this Digg this Email Reprints

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