(Bloomberg) --Loan growth remains a sore spot for U.S. regional banks, as investors look skeptically at lenders that expand too quickly, First Horizon Corp. Chief Financial Officer Hope Dmuchowski said.
"The pipeline has really, really come down in the last two quarters," Dmuchowski said on Bloomberg Television Thursday. "Last quarter is our first negative growth on the loan side."
First Horizon predicted last month that loan growth would be modest. Dmuchowski said investors are growing increasingly nervous about banks that expand their loan portfolios too quickly after the collapse of Silicon Valley Bank and other regional lenders last year, seeing it as a sign that they might be taking on too much risk.
Net interest income — the difference between what a bank pays depositors and what it earns on loans — increased about 6% at First Horizon last year, and the company predicted the metric would grow 1% to 4% this year.
In the wide-ranging discussion, Dmuchowski also said Memphis-based First Horizon is not in merger talks and isn't considering acquisitions in the near term.
Toronto-Dominion Bank announced a $13 billion merger with the company in 2022, but scrapped that plan last May after the regional-banking crisis and a series of rate increases by the Federal Reserve. Concerns about Toronto-Dominion's handling of suspicious customer transactions held up the deal's approval and ultimately contributed to the banks' decision to abandon the transaction.
