First Horizon National posts quarterly loss
(Reuters) - First Horizon National Corp (FHN.N) posted a wider-than-expected second-quarter loss as it incurred a pre-tax charge related to mortgage buyback demand from government sponsored entities Fannie Mae and Freddie Mac.
The parent company of First Tennessee Bank took a $272 million charge relating to the mortgage buyback demand.
Investors have been pressing U.S. banks to buy back soured home loans made during the housing boom. The loans were bundled into mortgage-backed securities and bought by investors, who now allege the loans do not meet guarantees made by the banks at the time they were sold.
First Horizon said last month it would add $250 million to its mortgage repurchase reserve during the quarter and record it as an expense.
The lender reported a loss after five straight quarters of profit. Net loss for the second quarter was $124.8 million, or 50 cents per share, compared with net income of $42.6 million, or 16 cents per share a year earlier.
Analysts on average expected it to incur a loss of 49 cents per share, according to Thomson Reuters I/B/E/S.
Net interest income fell slightly to $172.7 million.
Provision for loan losses rose to $15 million in the quarter compared to just $1 million a year earlier.
Shares of the company, which have gained about 58 percent since touching a low of $5.38 last October, closed at $8.55 on Thursday on the New York Stock Exchange.
(Reporting by Eileen Anupa Soreng in Bangalore; Editing by Supriya Kurane)
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