First Tennessee Bank’s parent company Thursday posted a first-quarter profit after a nearly quarter billion dollar loss in the fourth quarter of 2007.
But, its earnings in the first quarter were down 89 percent compared with the same period a year ago, the company reported.
Memphis-based First Horizon National Corp. reported net income of $7.9 million, or 6 cents per share, compared with earnings of $70.5 million, or 55 cents a share, for the first quarter in 2007.
The company’s earnings of 6 cents a share fell short of analysts’ average estimate of 13 cents a share.
First Horizon’s stock price closed Thursday at $12.64 a share, up 5 cents for the day.
Frank Schriner, president of First Tennessee’s Chattanooga market, said while the parent company is working to recover from problems in its real estate business, it has had business as usual in the area.
“Our growth is very good locally,” he said.
Mr. Schriner said the company is moving ahead with its growth strategy in the state by adding branches in Chattanooga in 2009 and 2010. The company will build about 12 branches in the state this year.
Despite the stable market for banking in Chattanooga, the company as a whole has not done so well elsewhere.
In a continuing effort to downsize its mortgage banking business, the company sold nearly $8 billion of its loan servicing portfolio during the quarter and has a commitment to sell $9 billion in the second quarter, said Jerry Baker, chief executive of First Horizon.
The company sold $7 billion in loans in the fourth quarter.
“Part of our strategy in managing our overall company is to manage down the size of the balance sheet by selling loans or reducing the number of loans that are in the real estate category, and particularly because they are not delivering the kind of returns we get from investing in Tennessee,” Mr. Baker said.
First Horizon reported $677 million in revenue during the quarter compared with $520.6 million in the first quarter of 2007.
The company increased its provision for loan losses to $240 million in the first quarter, up from $156.6 million in the fourth quarter of 2007 and $28.5 million in the first quarter of 2007. The quarterly dividend remained at 20 cents per share.
“We have a tremendous banking franchise in Tennessee,” Mr. Baker said, responding to reports the bank could be in a position to be acquired. “The strength of our long-term success is the strength of our Tennessee franchise, I have confidence in our ability to grow revenue and grow bottom line earnings over the quarters ahead.”