FHN Financial poised for public finance growth after merger

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FHN Financial reports large strides in its public finance business amid a rebranding and bank merger with eyes on a larger piece of the pie.

The firm changed its name to FHN Financial from FTN Financial on Oct. 25 in connection with the overall branding strategy of parent First Horizon National Corp.


Ajay Thomas, who heads FHN’s public finance department, said the firm is making steady progress in becoming a major player on municipal bond deals. FHN was credited with $2.595 billion of business in 2019 compared to $1.611 billion in 2018, according to data from Refinitiv, with much of last year’s growth achieved in the second half as the merger took effect.

FHN is targeting even bigger growth next year following a November merger between Memphis-based First Horizon and Iberiabank of Lafayette, Louisiana, that will that will make the combined entity a top 25 U.S. bank in deposits with assets totaling more than $75 billion once the deal is completed in 2020.

Thomas noted that roughly 66% of FHN’s par amount was executed in the last six months of the year largely driven by issuers seeking low taxable interest rates for refundings. He said the firm expanded throughout the Northeast from deals in New York, Connecticut, Pennsylvania and the District of Columbia with North Carolina volume also increasing in 2019 aided by the opening of a Charlotte public finance office in mid-2018.

"We’re really excited about the progress we have made in public finance over the last couple of years,” Thomas said. “We want to continue to grow our footprint meaningfully and get deeper in the south and southeast and certainly in the northeast and expand into new markets where we think the firm will resonate and can be identified.”

FHN‘s busy late 2019 included leading a $152.2 million general obligation offering from Yonkers, New York and $17.6 million refunding deal for Norwalk, Connecticut, in November which Thomas said demonstrates the firm's extended footprint. The Nov. 6 Yonkers deal priced two weeks after FHN’s name change, which Thomas said has enabled it to identify as more of a national brand instead of a regional bank that has traditionally been centered mainly in the Deep South.

Thomas said in 2020 FHN will focus more attention on the southwest and southeast regions where the bank’s overall footprint is growing to a size that nears the nation’s largest regional banks. He also wants to target new business in Pennsylvania after involvement with 2019 transactions last year issued by Pennsylvania Turnpike Commission and the city of Philadelphia.

“We have had great momentum and some nice wins,” said Michael Solomon, an FHN senior vice president who works out of the firm’s New York office. "We’re evolving to that next level and are excited about 2020.”

While Iberia doesn’t have much of a fixed income business, Thomas said the merger benefits FHN’s public finance efforts in terms of branding and visibility at its commercial and retail bank locations throughout the Southeast.

Since the merger was announced, Thomas said FHN has sought to educate municipal market participants about its underwriting services as well as financial advisory work that may resonate more in certain markets. Thomas said the firm would also like to eventually gain more of a presence in the Midwest region and is looking to recruit new banking talent for a few concentrated municipal sectors such as transportation and higher education.

“We’re certainly at a point in time in our business where we need to add resources and add talent in different markets,” Thomas said. “As we look to strategically target new markets as well as get deeper in the ones we’re competing in, I think there is an opportunity to recruit really talented individuals to an organization and a platform that is committed long-term to public finance.”

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