* 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 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)