First Horizon National in Memphis, Tenn., swung to a first-quarter loss after it paid $212.5 million to settle an investigation into its pre-crisis mortgage dealings.
The $25.7 billion-asset company reported a loss of $76.7 million, or 33 cents a share. The results included a $162.5 million charge tied to the settlement. The company earned $45.6 million, or 19 cents a share, a year earlier.
Excluding the charge, First Horizon's net income would have been $41.8 million, or 18 cents a share.
First Horizon last month agreed to a settlement with the Department of Housing and Urban Development and the Justice Department to resolve a probe into its past underwriting and origination of certain loans. The probe dealt with a business that First Horizon sold in 2008.
Net interest income fell 3% from a year earlier, to $156.9 million. Total loans rose 11%, to $16.7 billion. The net interest margin compressed by 14 basis points, to 2.74%.
Fee income fell 8%, to $129.4 million, largely because First Horizon had a $39.7 million gain on the sale of mortgage loans a year earlier.
Excluding the settlement charge, noninterest expenses rose 2%, to $213.7 million.