UPDATE 1-First Horizon National profit falls

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WASHINGTON, July 19 (Reuters) - First Horizon National Corp. (FHN.N: Quote, Profile, Research), the largest bank in Tennessee, on Thursday posted an unexpectedly large drop in second quarter earnings, as it set aside more money for loan losses.

The bank is hoping to boost profitability by focusing more on Tennessee and decreasing focus on some markets and businesses outside that state. First Horizon said it is looking to sell 34 branches in Atlanta, Baltimore, Dallas and northern Virginia.

The bank said it earned 17 cents, or $22.1 million in the second quarter, compared with 82 cents, or $104.3 million, in the year ago period.

Excluding legal settlements, restructuring expenses, and other items, First Horizon earned 40 cents a share, or 19 cents share below analysts average expectations, according to Reuters Estimates.

"(E)arnings... were far from satisfactory," said Jerry Baker, chief executive officer of First Horizon.

Baker attributed the earnings drop to a challenging operating environment and charges related to restructuring initiatives.

Total revenues were $519.8 million in the second quarter, compared with $588.6 million, the bank said.

Analysts on average expected revenues of $540.6 million for the second quarter.