First Horizon National Corp. (FHN) on Friday reported a $55.7 million net loss -- 27 cents per share -- for the fourth quarter 2008, less than half the loss reported the previous quarter. After reporting heavy losses in mid- and late-2008 and receiving a $866,540,000 injection from the TARP as a transaction under the Capital Purchase Program on Nov. 14, 2008, the company's balance sheet appears to be stabilizing somewhat. Despite continued economic weakness, average deposits remained flat for the quarter, signaling First Horizon may have weathered some of the worst economic decline of 2008. "Our early decisions to raise capital, sell assets and exit our lending businesses outside our banking region put us in a stronger position by the end of one of the worst years the financial services industry has faced," said CEO Bryan Jordan. "We're leveraging the money we received from the government's TARP program to facilitate lending to our consumer, small business and commercial customers. The TARP funds contributed to our ability to originate more than $900 million in new loans in the fourth quarter." But its mortgage business, as expected, was bleak. First Horizon reported lower origination income in the fourth quarter due to the completion of the sale of its mortgage servicing platform and origination offices outside of Tennessee in August. It also reported a $22 million quarterly provision due to "deterioration in permanent mortgage portfolios" as well as a $16.5 million expenditure for reinsurance due to increased mortgage default and a $1.8 million provision for foreclosure losses. It reported $6.4 million in fourth-quarter restructuring charges around its mortgage banking business. Total loan loss allowance for its mortgage banking business came to $28 million in the quarter. The corporation saw just $489,000 in warehouse assets on its mortgage banking balance sheet. It reported a negative $14.4 million in total mortgage origination income and $99.4 million in total mortgage servicing income. "Additionally, pre-tax earnings for third quarter were negatively affected by $14.4 million related to the adoption of new accounting standards, including the prospective election of fair value accounting for mortgage warehouse loans," the earnings statement read, in part. "Increased deterioration in the permanent mortgage portfolio resulted in higher provision expense in comparison to third quarter. Noninterest expense declined due to effects of the divestiture which were partially offset by increasing reinsurance reserves for increased defaults on insured mortgages." Read the full report. Write to Diana Golobay at Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.