First Horizon in Memphis, Tenn., reported a notable operational trifecta of an expanding margin, improved asset quality and controlled expenses during the fourth quarter.
The $28.6 billion-asset company, as a result, reported a 13% increase in profit from a year earlier, to $53.3 million, or 23 cents a share. The performance narrowly missed the average estimate of analysts polled by Bloomberg.
Net interest income rose by 17%, to $196 million. Total loans increased by 11%, to $19.6 billion, while the net interest margin widened by 4 basis points, to 3%. The company noted in its press release that two-thirds of its loans have floating rates.
Noninterest income fell by 6%, to $124 million, reflecting a decline in revenue tied to fixed income and deposit services.
Noninterest expense decreased by 2%, to $238 million, although legal expenses rose slightly, to $6 million.
Asset quality improved, as nonperforming loans fell 22% to $165 million, or 0.8% of total loans. The company recorded $510,000 in net recoveries in the quarter.
