First Horizon National Corp. (FHN) in Memphis, Tenn., missed second-quarter profit estimates as its lending and fee income slid.
The $25.1 billion-asset company reported Friday that it earned a quarterly profit of $45.2 million, compared to a loss of nearly $125 million in the same period of 2012, when it took a $272 million charge on buybacks of soured mortgage loans it had sold to Fannie Mae and Freddie Mac. Per-share earnings of 17 cents fell 2 cents short of the average estimate of analysts polled by Bloomberg.
Net interest income dipped by 7%, to $160 million, as net interest margin decreased by 20 basis points, to 2.96%. Noninterest income also declined 7%, to $143 million.
Cost cuts partially made up for First Horizon's lower revenue, as noninterest expenses declined to $227 million from about $255 million, excluding the charge for putbacks, in the second quarter of 2012. In October, the company offered buyouts to 400 workers.
The provision for loan losses held steady, at $15 million, but net chargeoffs fell 54%, to $18.3 million. Total nonperforming assets rose 9%, to $506.7 million.
The company added $433 million of assets in the quarter through its Federal Deposit Insurance Corp.-assisted purchase of the failed Mountain National Bank in Sevierville, Tenn.