First Horizon Cites Bad Mortgage News; Stock Hit

First Horizon National Corp., Memphis, saw its share price fall 4% Aug. 29 after announcing that third-quarter earnings would be hurt by what it calls a "further deterioration" in the residential mortgage market. First Horizon, the parent of First Horizon Home Loans, Irving, Texas, said the "current mortgage environment" will reduce pretax operating earnings by $35 million (compared with those of the second quarter). FHHL is the nation's 19th-largest residential funder, according to the Quarterly Data Report, a MortgageWire affiliate. First Horizon singled out lower gain-on-sale margins and an inverted yield curve as contributing to its woes. It also said a legal settlement involving a predecessor mortgage company will reduce quarterly earnings by about $21 million (after taxes).