First Horizon National Corp., which recently surprised investors with an announcement that it would suspend its dividend, is now promoting its CFO to the position of president and chief executive as part of its succession plan.
CFO Bryan Jordan, 46, will begin his new role Sept. 1, replacing Jerry Baker, 65, who will become the bank’s vice chairman. The announcement follows months of discussion on the board level, in which directors mulled over Baker’s replacement, according to the company’s announcement. The bank has not yet named a CFO.
Jordan is a good fit for the job as the bank works to shrink its balance sheet to better weather the mortgage crisis, according to a research report by Keefe, Bruyette & Woods, a financial-services brokerage firm. First Horizon, parent of First Tennessee, is heavily exposed to the mortgage sector and reported $220 million in loan loss provisions in the second quarter. “We believe that tapping Mr. Jordan to run FHN is in line with the current focus and strategy of the company that has shifted to ensuring capital adequacy and improved financial performance (Mr. Jordan’s strength) and away from mortgage (Mr. Baker’s deepest experience),” according to the report.
The news coincided with the bank’s second-quarter earnings report, in which the company reported an 11-cent loss, three cents below consensus estimates. Still, the results were 23 cents better than KBW’s estimates.
First Horizon’s shares surged 31 percent on the earnings report and the management shuffling. The rise reversed a 25 percent drop in the share price on Monday, which was seen as a response to the company’s reporting of its second-quarter results earlier than it had planned.
First Horizon raised $690 million in the second quarter by selling new equity. Combined with the suspended dividend, the share sale enabled the bank to strengthen its capital ratios.