First Tennessee Bank

First Tennessee Bank boosted first quarter earnings by 42 percent to $41 million, or 17 cents per share.

As the market remained flat overall, the bank slashed costs by reducing headcount and pension obligations, while still generating across-the-board growth in loans and deposits. First Tennessee grew average loans by 6 percent, and grew average deposits by 4 percent, while reducing expenses by 8 percent.

"It's really kind of a culmination of several years of work and progress that we've been making," said BJ Losch, chief financial officer of First Horizon, holding company for First Tennessee. "As a company, we've been focusing on returns and profitability."

In spite of the jump in earnings, the amount of total money coming in fell from the first quarter of 2012, when the bank brought in $374.3 million in total revenue and $172 million in net interest income. In the first quarter of 2013, First Tennessee generated just $317.8 million in total revenue, including $161 million in net interest income.

"I think a phrase that we use across the company is, it's a marathon, not a sprint," Losch said.

Still, the bank has done especially well in Chattanooga, where First Tennessee has remained the largest institution in terms of deposits.

"Even though the markets are only growing in low single digits, we're able to grow loans because of our service," said Keith Sanford, market president at First Tennessee Bank. "We have maintained a fully functioning local real estate office here in Chattanooga throughout the whole economic downturn."

While the bank has worked to make loans, it's still generating more cash than it can lend, said Losch. As a result, First Tennessee increased its quarterly dividend to 5 cents per share and repurchased $30 million in common shares as part of a $300 million share buyback program.

"The first place we look to use the capital is to lend to customers, and we do as much as we can in a prudent manner and we're taking share, but there's not a lot of inherent economic demand," Losch said. "If you look at those two factors and you still have plenty of capital, one way to use it is to, in this environment, give it back."

Contact staff writer Ellis Smith at esmith@timesfree press.com or 423-757-6315.