First Horizon, holding company for First Tennessee Bank, nearly doubled its profits in the third quarter of 2011 compared to the previous year, even as the overall market was stagnant, executives said.
In the Chattanooga market, First Tennessee continued to dominate the deposits battle in Hamilton County for the second year in a row, and in Bradley County for the first time, executives said.
Tennessee's biggest bank grew deposits by 14.8 percent in metropolitan Chattanooga, while the overall market was flat, according to FDIC data.
B.J. Losch, the chief financial officer for First Horizon, said First Tennessee grew deposits by an average of 6.5 percent across all its markets, compared to a market average in those areas of 2.5 percent deposit growth.
The company reported third-quarter net income of $39 million, or 14 cents per share after bringing in $397.2 million in revenue for the quarter.
For the same quarter in 2010, the company earned $33.7 million, or 7 cents per share, on $428.8 million in revenue.
Losch said the company was "very pleased with the quarter," which saw the bank leading customers online toward do-it-yourself banking, and away from more expensive banking at the local branch.
"We've done a lot of difficult things to move our expenses down," Losch said. "In this environment, it's a lot of running in place to generate revenue because of the cautiousness and uncertainty in the market."
For instance, total revenue is down, but by cutting the number of bad loans and reducing the number of full-time employees to 4,748 from 5,506, earnings have actually increased in the past year, according to First Horizon's financial report released Monday.
The company's recent launch of its mobile check deposit feature -- among the first banks in the Chattanooga market to offer it -- has been "astounding," Losch said.
Keith Sanford, market president for the Southeast, noted that winning customer-driven awards, such as the Chattanooga-area "Best of the Best" contest, has driven additional business growth from customers seeking better service.
The bank offers customers alternate paths when dealing with banking fees, allowing consumers to avoid costly new account charges if they're willing to change their banking behavior.
"We do have some service charges, but we offer customers ways they can get those rebated if they do certain activities like banking online and having direct deposit instead of using more costly delivery services," Sanford said. "Obviously, we've cut some expenses here locally, because fewer people are coming into branches. But at the same time here in Hamilton County we've grown deposits 15 percent year-over-year."
Despite the earnings improvement over last year, First Horizon results were still below analysts' expectations for the quarter, pushing the company's stock down by 30 cents per share, or nearly 4.6 percent, to close at $6.26 per share in trading on the New York Stock Exchange.