First Horizon National (FHN) used a gain from the sale of mortgage servicing rights to offset declines in revenue and fee income.
The Memphis, Tenn., company reported earnings of $45 million in the first quarter, which was 10% higher than a year earlier. Earnings per share of 19 cents beat estimates by 5 cents, according to analysts polled by Bloomberg.
Profits were boosted by $20 million in pretax income from the "receipt of previously unrecognized servicing fees" tied to a recent servicing sale, according to the company's first-quarter financial supplement. First Horizon, which exited its mortgage business in 2008, agreed in the third quarter to sell its remaining mortgage-servicing rights; the price and buyer were not disclosed at the time.
Meanwhile, First Horizon's revenue fell 6% year over year to $298 million. Net interest income also dropped 6%, to $152 million, as uncertain market conditions led to lower loan volume. The net interest margin was down seven basis points.
Noninterest income decreased 10% from a year earlier to $140 million.
Expenses fell 8% year over year.
Asset quality trends remained positive, as net chargeoffs were down to $16 million, a 38% drop from last year.