With less money tied up in covering troubled loans, First Horizon National, the parent company of First Tennessee Bank, saw its 2011 second quarter profit more than double from the same period a year ago, despite a decline in revenues.
The Memphis-based company, which has said one of its major recovery efforts would be to focus on strengthening its loan portfolio and credit quality, had loan-loss provisions of $1 million for the second quarter, down 99 percent from 2010. Last quarter, loan-loss provisions were also $1 million; in 2010’s second quarter, the amount dedicated to failing loans was $70 million.
In addition, net charge-offs, or loans that lenders have written off as bad debt, were 1.7 percent of total loans, as compared to 3.1 percent a year earlier. Non-performing assets also decreased by 17 percent from a year ago and 9 percent from 2011’s first quarter.
First Horizon reported a net income of $42.6 million, or 16 cents a share, which is up from a profit of $17.6 million, or 1 cent per share, in 2010’s second quarter.
“As the economy continues to recover, there are many things we can control, and that’s where our employees are focused: winning more business from our current and new customers, investing in technology, improving processes, controlling expenses and providing outstanding customer service,” said Bryan Jordan, First Horizon’s CEO.
The company also said it “delivered solid performances in its core businesses of regional banking through First Tennessee and capital markets through FTN Financial, improved credit quality, maintained strong capital ratios and improved productivity and efficiency throughout the company.”
Revenues for First Horizon fell about 15 percent year-over-year, as the company’s total loans issued dropped 6 percent; however, total deposits increased by 5 percent.
On midday Friday, First Horizon shares were trading at $9.78, up 30 cents or 3.16 percent from the previous day.