Chattanooga's biggest banks boosted their profits above what analysts expected this spring as the improving economy boosted loans and deposits while keeping down credit losses.
First Horizon Corp., the parent company of First Tennessee Bank, said Friday its second quarter earnings totaled $52.1 million, or 22 cents per share. The results surpassed Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of 20 cents per share.
The First Tennessee Bank building is located between Market and Broad Streets in downtown Chattanooga.First Tennessee is the biggest bank in Chattanooga with more than $2 billion in deposits in metropolitan Chattanooga and is the biggest bank in Tennessee with statewide deposits of more than $15.5 billion.
The bank holding company posted revenue of $296.9 million in the period, also beating Wall Street forecasts. Eight analysts surveyed by Zacks expected $289.8 million.
"Over the past few quarters we have seen our momentum build in the local communities we serve," First Horizon Chairman and CEO Bryan Jordan said in a statement. "Our bankers continue to build relationships with new and existing customers to support that growing momentum, particularly in Nashville, Chattanooga and the Carolinas."
SunTrust Banks, the Atlanta-based banking firm which operates Chattanooga's second biggest bank with more than $1.5 billion of local deposits, said Friday it earned $483 million in the second quarter before paying preferred dividends, up from $399 million a year earlier. On a per-share basis, earnings rose to 89 cents from 72 cents.
Analysts anticipated 81 cents a share in profit on $2 billion in revenue, according to Thomson Reuters. Despite the improved profits, SunTrust revenues slid 5.6 percent from a year prior to $2.1 billion.
"Our performance this quarter demonstrates solid execution of our key strategies - deepening client relationships, optimizing the balance sheet, and improving efficiency," SunTrust CEO William Rogers said in the quarterly earnings report. "As we look forward, we are confident in our strategies and remain intensely focused on delivering further value to our clients and shareholders."
Despite the earnings gain, SunTrust shares lost 60 cents per share, or 1.3 percent, in trading Friday to close at $44.75 per share. So far this year, however, SunTrust shares are up 6.8 percent.
First Horizon shares have fared far better.
Shares of First Horizon fell 5 cents per share in trading Friday to close at $15.91. So far this year, however, First Horizon shares are up nearly 18 percent and the company's stock is up nearly 32 percent in the past 12 months.
A litigation charge related to the mortgage business the company sold in 2008 resulted in a $162.5 million pre-tax charge for First Horizon in the first quarter, which led to a net loss in that quarter of $76.7 million, or 33 cents per share.Excluding the litigation charge, net income available to common shareholders in the first quarter would have been $41.8 million1, or 81 cents per share.
Chattanooga's second biggest bank, Regions Financial Corp., is due to report its second quarter results on Tuesday.