First Horizon National Corporation (FHN) reported fourth quarter net loss of 32 cents, worse than the Zacks Consensus Estimate of a loss of 22 cents.
Net loss deteriorated to $70.6 million in the fourth quarter of 2009 from a loss of $52.9 million in the prior quarter and a loss of $63.1 million in the year-ago quarter. The decline is due to a fall in fee income and higher expenses, partially offset by an improvement in credit quality.
For the full year 2009, First Horizon’s net loss available to common shareholders was $329.4 million or $1.49 per share, compared to $199.4 million or $1.03 per share in the year-ago quarter.
For the reported quarter, total revenue shrank 12% sequentially and 18% year-over-year to $436.1 million. Net interest income declined 1% sequentially and 7% year-over-year to $189.9 million. However, net interest margin improved 5 basis points (bps) sequentially and 23 bps year-over-year.
Non-interest income was $246.2 million, down 19% sequentially and 25% year-over-year. Non-interest expense was $390.3 million, up 12% sequentially and 17% year-over-year. As a result of continued restructuring initiatives, First Horizon experienced $31.2 million in net pre-tax charges. However, provisions for loan losses shrank to $135 million from $185 million in the prior quarter and $280 million in the year-earlier quarter.
Credit metrics showed an improvement, with net charge-offs declining 9% sequentially and 4% year-over-year to $182.9 million. Net charge-offs were 400 annualized bps of average loans, down from 424 bps in the prior quarter. Non-performing assets also decreased 14% sequentially and 9% year-over-year to $1.1 billion. Results were driven by reduced national construction balances, a decline in gross in-flows and an active disposition program.
Tier 1 capital and Tier 1 common ratio deteriorated sequentially but were up year-over-year. Tier 1 capital ratio was 13.37%, down 10 bps sequentially but up 117 bps year-over-year to 13.37%. Tier 1 common ratio was 9.77%, down 11 bps sequentially but up 21 bps year-over-year. The tangible common equity ratio was 7.75%, down 10 bps sequentially but up 41 bps year-over-year.
Book value stood at $9.95 per share, representing a decline from $10.28 per share in the prior quarter and $11.31 per share in the year-ago quarter.
Some of the positive signs during the quarter were an improvement in overall credit quality, average core deposit growth and an expansion in net interest margin. However, until the overall economy improves, First Horizon’s results will remain under pressure.
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