First Tennessee National Corp. will move its subprime and other consumer lending into a new federal savings bank, the Office of Thrift Supervision said Monday.

Starting in November, First Horizon, as the thrift will be known, will open a walk-in branch in Bristol, Va., and 64 loan production offices.

The thrift will also operate a branch in Dallas to serve employees of FT Mortgage Cos., another subsidiary of Memphis-based First Tennessee.

Almost half of First Horizon's portfolio will be in subprime loans, or those to borrowers with unfavorable credit histories. Consequently, the OTS is requiring First Horizon to maintain a capital ratio of 12% on all loans that are not secured by real estate and have a loan-to-value ratio of 80% or less, plus 8% of the remaining assets.

First Tennessee plans to move more than $80 million in consumer finance loans to First Horizon initially, said Terry Renoux, president of consumer finance for the banking company. "The most advantageous or convenient vehicle to allow us to open these loan production offices nationwide is a savings and loan charter," Mr. Renoux said. -- Katharine Fraser

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