First Horizon National Corporation disclaims any obligation to update any forward-looking statements that are made from time to time to reflect future events or developments. In addition, non-GAAP financial information may be noted in this conference call. A reconciliation of that non-GAAP information to comparable GAAP information will be provided as needed in a footnote or appendix of the slide presentation available in the Investor Relations area of our website.Listeners are encouraged to review any such reconciliations after this call. Also, please remember that this webcast on our website is the only authorized record of this call. This morning's speakers include our CEO, Bryan Jordan; our CFO, BJ Losch and our Chief Credit Officer, Greg Jardine. With that, I will turn it over to Bryan. Bryan Jordan Thank you, Aarti. Good morning and thanks for joining the call. Second quarter's results demonstrate that the successful execution of our strategic plan is paying off. Our proactive approach to credit quality, aggressive de-risking efforts and the re-focus on core businesses have resulted on First Horizon's first bottom-line profit since the first quarter of 2008. Income from continuing operations was $20 million, a significant turnaround both year over year and linked quarter. Improved credit quality was a major driver. Linked quarter, provision expense decreased to $70 million, charge-offs were down 27% and NPAs declined 14%. We also benefited from our re-focus on the Regional Banking and Capital Markets businesses as both showed good performance in the second quarter. FTN Financial remains a high return on capital business for us. Average daily revenue declined towards normalized levels but is still solid. Regional bank profitability was sharply improved due to lower credit costs and higher revenue. The Regional Bank continues to demonstrate customer deposit growth, improved fee revenue and strengthening net interest margin. Loan demand remains soft but we've seen signs of increased borrowing activity in our corporate lending line of business and from mortgage warehouse lending. Additionally, the loan pipeline is improving.
We are proud of the profitability we achieved this quarter but mindful that the economic and operating environment will remain tough near-term. We believe that the economy will continue to recover but at a gradual pace. High unemployment and a weak housing market are likely to remain, restraining organic growth prospects and keeping environmental costs elevated.Against a backdrop of likely low single-digit economic growth and – excuse me – low single digit economic growth, we expect interest rates to remain low for an extended period and we also expect loan growth to be low overall but benefiting from our customer acquisition efforts. And while we support financial regulatory reform, the legislation is expected to pressure industry revenue and elevate expenses. There are still a lot of unknowns but we are already taking steps to mitigate revenue losses. The new rules are not expected to adversely affect our capital markets business. The elimination of trust preferred securities as a source of Tier 1 capital should not materially affect our capital position. Our TRUPS account for only $300 million of Tier 1 capital or 144 basis points of our strong Tier 1 ratio of 16.8%. Although a slow economy and regulatory reform provide uncertainty and challenges, they also provide opportunities, opportunities that we are fully prepared to take advantage of. We have the team, the product capability, the systems and the capital. We have made significant progress in reducing our balance sheet risk and cleaning up problem loans. We've made headway in lowering operating costs and improving efficiency. Near-term, modest organic growth, credit cost reduction and efficiency improvements will likely drive our bottom-line improvement. I'm confident in our ability to take market share as revenue growth opportunities surface. BJ will now take you through the financial results for the quarter and I'll be back as we take your questions. BJ.
BJ LoschThanks Bryan. Good morning, everybody. Starting on slide five, to give you an idea of our consolidated earnings view, second quarter net income available to common shareholders was $3 million for an EPS of a penny, an improvement from first quarter's loss of about $0.12 a share. Our pretax net income was $18 million. Read the rest of this transcript for free on seekingalpha.com