First Horizon Posts Surprise 3Q Profit On Lower Loss Reserve

Date : 10/15/2010 @ 8:41AM
Source : Dow Jones News
Stock : First Horizon National Corp. (FHN)
Quote : 17.62  -0.16 (-0.90%) @ 3:59PM

First Horizon Posts Surprise 3Q Profit On Lower Loss Reserve

First Horizon (NYSE:FHN)
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First Horizon National Corp. (FHN) posted a surprise third-quarter profit as it cut the amount set aside to cover risky loans for the sixth-straight quarter and revenue fell less than analysts had feared it would.

The parent of First Tenessee Bank has seen results improve in recent quarters, setting aside much less to cover loan losses as credit quality has improved. Fitch Ratings last week indicated a near-term downgrade of the company is no longer likely, citing its improved funding profile.

In the latest quarter, loan-loss provisions were $50 million, down from $185 million a year earlier and $70 million in the prior quarter.

First Horizon posted a profit of $30.8 million, or 7 cents a share, compared with a year-earlier loss of $38 million, or 23 cents a share. Revenue dropped 12% to $434.4 million amid a 17% drop in noninterest income.

Analysts polled by Thomson Reuters most recently forecast a 2-cent loss on $406 million in revenue.

Net charge-offs, or loans lenders don't think are collectible, fell to 2.63% of average loans from 3.1% the prior quarter and 4.24% a year earlier. Nonperforming assets, those near default, were 5% of assets, compared with 4.92% and 6.38%, respectively.

Shares closed Thursday at $10.89 and were inactive in recent premarket trading. The stock is down 15% this year.

-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com

 
 

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