First Tennessee Bank N.A. ABOVE AVERAGE Ranking Affirmed As A Residential Mortgage Primary Servicer; Outlook Is Stable

OVERVIEW
  • We affirmed our overall ABOVE AVERAGE ranking on First Tennessee Bank N.A. as a residential mortgage primary loan servicer of subordinate-lien loans.
  • First Tennessee Bank N.A. is a primary loan servicer of subordinate-lien mortgages with its servicing operations primarily located in Tennessee.
  • The outlook is stable.
NEW YORK (S&P Global Ratings) Jan. 4, 2019--S&P Global Ratings today affirmed 
its ABOVE AVERAGE ranking on First Tennessee Bank N.A. (FTB) as a residential 
mortgage primary servicer of subordinate-lien loans. The outlook is stable.

Our ranking reflects:
  • Solid senior and middle management experience and tenure with very limited turnover;
  • A good internal control environment with no material internal or external audit issues identified;
  • Overall very low staff turnover levels throughout the operations;
  • Generally competitive servicing performance metrics with those of peer servicers we monitor;
  • Elevated abandonment rates in the customer service and default operations call centers related to the recent merger with Capital Bank Financial Corp (CBF); and
  • The recently increased subordinate-lien portfolio due to the merger; however, FTB's strategy is to continue to service the existing subordinate-lien portfolio through its eventual runoff.
Since our prior review (see "Servicer Evaluation: First Tennessee Bank N.A.," 
published Sept. 15, 2017), the following key changes and/or developments have 
occurred:
  • FTB merged with CBF in December 2017 to grow FTB's size and portfolio geographic footprint.
  • The head of customer service was replaced with a seasoned internal senior manager.
  • The subordinate-lien portfolio increased 16% since our last review due to the recent merger with CBF.
The outlook is stable. FTB has a good internal control environment, 
experienced and tenured senior and middle management teams, and an appropriate 
level of technology to support its operations. FTB also has generally 
competitive servicing performance metrics, but we will continue to monitor the 
company for any operational effects the merger may have on performance metrics 
and service levels. We believe FTB will continue to maintain a stable 
residential mortgage servicing operation.

The financial position is SUFFICIENT.