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UPDATE 2-First Horizon posts eighth straight quarterly loss
April 16, 2010 / 11:54 AM / in 8 years

UPDATE 2-First Horizon posts eighth straight quarterly loss

* 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)

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