* Q1 loss $0.12/shr vs est loss $0.16/shr
* Net interest income falls 8 percent
* NIM flat at 3.19 pct from previous quarter
* Shares fall about 10 pct (Recasts; adds conference call details, analyst comments, share movement)
By Jochelle Mendonca
BANGALORE, April 16 (Reuters) - First Horizon National Corp (FHN.N), the largest bank in Tennessee, posted an eighth straight quarterly loss, hurt by lower net interest income, and a margin that stayed flat from the previous quarter.
Shares of the company fell as much as 10 percent to $13.85.
"We expect our margin to be flat throughout the rest of the year barring interest rate increases from the Fed," the bank said on a post-earnings conference call with analysts.
"The margin was stable, it didn't improve and several banks that reported have already had margin expansion, so we're disappointed in that regard," Stifel, Nicolaus & Co analyst Anthony Davis said.
Net interest margin -- the difference between what the bank pays on deposits and earns on loans -- stayed flat at 3.19 percent from the previous quarter.
Davis added that the balance sheet shrinkage was more than expected and would continue, given that the company was in "run-off" mode.
Chief Executive Bryan Jordan said he was looking to make significant progress on repaying funds received under the Treasury's Troubled Asset Relief Program, in 2010.
The Memphis, Tennessee-based bank had received an $866 million cash infusion in TARP funds in October 2008.
"In my models, I forecast them repaying TARP at the end of 2010," Raymond James analyst Michael Rose said.
For the first quarter, the lender posted a net loss attributable to common shareholders of $27.7 million, or 12 cents a share, compared with $82.8 million, or 37 cents a share, in the year-ago period.
Analysts on average had expected a loss of 16 cents a share, excluding items, according to Thomson Reuters I/B/E/S.
Net interest income fell 8 percent to $180.4 million from $196.6 million.
Provision for loan losses fell 22 percent to $105 million from $135 million in the previous quarter.
"The pace of improvement (in loan losses) slowed down. With the stock having previously run up, investors booked profits on a quarter that wasn't great," Wunderlich Securities analyst Kevin Reynolds said.
The company's shares were trading down 99 cents at $14.33 in late-morning trade Friday on the New York Stock Exchange.
About 1.3 million shares were traded on the exchange, more than the stock's 50-day moving average. (Reporting by Jochelle Mendonca in Bangalore; Editing by Maju Samuel)