UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of report (Date of earliest event reported): April 17, 2015

 

 

First Horizon National Corporation

(Exact Name of Registrant as Specified in Charter)

 

 

 

TN 001-15185 62-0803242
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)

 

165 MADISON AVENUE 38103
MEMPHIS, TENNESSEE (Zip Code)
(Address of principal executive office)

Registrant’s telephone number, including area code: (901) 523-4444

 

 

(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


ITEM 2.02. Results of Operations and Financial Condition.

ITEM 7.01. Regulation FD Disclosure.

Furnished as Exhibit 99.2 is a copy of First Horizon National Corporation Investor Slide Presentation for the quarter ended March 31, 2015, which was released today.

The foregoing information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition,” and Item 7.01, “Regulation FD Disclosure.” The exhibit speaks as of the date thereof and First Horizon National Corporation (“First Horizon”) does not assume any obligation to update in the future the information therein.

ITEM 2.02. Results of Operations and Financial Condition.

ITEM 8.01. Other Events.

Filed as Exhibit 99.1 is a copy of the First Horizon National Corporation Financial Supplement for the quarter ended March 31, 2015, which was released today.

The exhibit speaks as of the date thereof and First Horizon does not assume any obligation to update in the future the information therein.

ITEM 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit #

Description

99.1

First Horizon National Corporation Financial Supplement for the quarter ended March 31, 2015.

99.2 First Horizon National Corporation Investor Slide Presentation for the quarter ended March 31, 2015.

Exhibit 99.2 is furnished pursuant to Items 2.02 and 7.01, is not to be considered “filed” under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and shall not be incorporated by reference into any of First Horizon’s previous or future filings under the Securities Act of 1933, as amended, or the Exchange Act.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

First Horizon National Corporation
(Registrant)
Date: April 17, 2015 By: /s/ William C. Losch III
William C. Losch III
Executive Vice President and Chief Financial Officer


EXHIBIT INDEX

 

Exhibit #

Description

99.1

First Horizon National Corporation Financial Supplement for the quarter ended March 31, 2015.

99.2

First Horizon National Corporation Investor Slide Presentation for the quarter ended March 31, 2015.

Exhibit 99.2 is furnished pursuant to Items 2.02 and 7.01, is not to be considered “filed” under the Exchange Act, and shall not be incorporated by reference into any of First Horizon’s previous or future filings under the Securities Act of 1933, as amended, or the Exchange Act.



Exhibit 99.1

 

 

 

LOGO

FIRST QUARTER 2015

FINANCIAL SUPPLEMENT

 

If you need further information, please contact:

Aarti Bowman, Investor Relations

901-523-4017

aagoorha@firsthorizon.com


FHN TABLE OF CONTENTS

 

  

  
                
      Page        

First Horizon National Corporation Segment Structure

     3        

Performance Highlights

     4        

Consolidated Results

     

Income Statement

     

Income Statement

     6        

Other Income and Other Expense

     7        

Balance Sheet

     

Period End Balance Sheet

     8        

Average Balance Sheet

     9        

Net Interest Income

     10        

Average Balance Sheet: Yields and Rates

     11        

Capital Highlights

     12        

Business Segment Detail

     

Segment Highlights

     13        

Regional Banking

     14        

Capital Markets and Corporate

     15        

Non-Strategic

     16        

Asset Quality

     

Asset Quality: Consolidated

     17        

Asset Quality: Regional Banking and Corporate

     19        

Asset Quality: Non-Strategic

     20        

Portfolio Metrics

     21        

Non-GAAP to GAAP Reconciliation

     22        

Glossary of Terms

     23        

Other Information

This financial supplement contains forward-looking statements involving significant risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking information. Those factors include general economic and financial market conditions, including expectations of and actual timing and amount of interest rate movements including the slope of the yield curve, competition, customer and investor responses to these conditions, ability to execute business plans, geopolitical developments, recent and future legislative and regulatory developments, natural disasters, and items mentioned in this financial supplement and in First Horizon National Corporation’s (“FHN”) most recent press release, as well as critical accounting estimates and other factors described in FHN’s recent filings with the SEC. FHN disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements included herein or therein to reflect future events or developments.

Use of Non-GAAP Measures

Certain ratios are included in this financial supplement that are non-GAAP, meaning they are not presented in accordance with generally accepted accounting principles (“GAAP”) in the U.S. FHN’s management believes such ratios are relevant to understanding the capital position and results of the Company. The non-GAAP ratios presented in this financial supplement are tangible common equity (“TCE”) to tangible assets (“TA”), tangible book value per common share, tier 1 common to risk weighted assets (“RWA”) (for periods prior to first quarter 2015), pre-tax pre-provision net revenue (“PPNR”), net income available to common shareholders excluding litigation charges, and diluted earnings per share (“EPS”) excluding litigation charges. These ratios are reported to FHN’s management and Board of Directors through various internal reports. Additionally, disclosure of non-GAAP capital ratios provides a meaningful base for comparability to other financial institutions as demonstrated by their use by the various banking regulators in reviewing the capital adequacy of financial institutions. Non-GAAP measures are not formally defined by GAAP or codified in currently effective federal banking regulations, and other entities may use calculation methods that differ from those used by FHN. Tier 1 capital is a regulatory term and is generally defined as the sum of core capital (including common equity and instruments that can not be redeemed at the option of the holder) adjusted for certain items under risk based capital regulations. Also a regulatory term, risk weighted assets includes total assets adjusted for credit risk and is used to determine regulatory capital ratios. Refer to the tabular reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items on page 22 of this financial supplement.

 

2


FIRST HORIZON NATIONAL CORPORATION SEGMENT STRUCTURE LOGO

 

 

 

LOGO

 

3


FHN PERFORMANCE HIGHLIGHTS

 

 

First Quarter 2015 vs. Fourth Quarter 2014

 

Consolidated

  Net loss available to common shareholders was $76.7 million, or $.33 loss per diluted share in first quarter, compared to net income of $47.1 million, or $.20 per diluted share in fourth quarter
  Reached an agreement in principle (“AIP”) with two federal agencies, the Department of Justice (“DOJ”) and the Department of Housing and Urban Development Office of Inspector General (“HUD”), to settle potential claims related to FHN’s underwriting and origination of FHA-insured mortgage loans which resulted in a $162.5 million pre-tax charge to litigation and regulatory matters
    Excluding the litigation charge net income available to common shareholders would have been $41.8 million, or $.18 per diluted share in first quarter
  Adopted ASU 2014-01, “Investments – Equity Method and Joint Ventures: Accounting for Investments in Qualified Affordable Housing Projects”. ASU 2014-01 allows for both pre-tax effects and related tax benefits for certain qualified investments in housing projects to be classified within tax expense provided certain technical requirements are met. Historically, such amounts were presented separately within other expense and tax expense. ASU 2014-01 required retrospective application. Accordingly all historical periods presented in this financial supplement have been revised to reflect this adoption
  Net interest income (“NII”) was $156.9 million in first quarter compared to $159.1 million in fourth quarter; Net interest margin (“NIM”) decreased to 2.74 percent in first quarter from 2.86 percent in prior quarter
    The decline in NIM was primarily driven by an increase in average excess cash held at the Fed during the quarter
  Noninterest income (including securities gains) was $129.7 million in first quarter compared to $119.6 million in prior quarter
    The increase in noninterest income was largely driven by an increase in capital markets fixed income sales revenue
  Noninterest expense was $376.2 million in first quarter compared to $207.3 million in fourth quarter primarily due to an increase in litigation and regulatory loss accruals
  Period-end loans grew 3 percent to $16.7 billion in first quarter; average loans were $16.1 billion and $15.9 billion in first and fourth quarters, respectively
  Period-end core deposits increased to $18.2 billion in first quarter from $17.6 billion in prior quarter; Average core deposits increased 7 percent linked quarter to $17.8 billion in first quarter

Regional Banking

  Pre-tax income was $73.9 million in first quarter compared to $78.8 million in fourth quarter; pre-tax, pre-provision net revenue was $78.8 million and $84.3 million in first and fourth quarters, respectively
  Average loans increased 3 percent, or $383.6 million to $13.5 billion in first quarter primarily driven by higher balances of commercial loans including loans to mortgage companies and asset based lending; period-end loans increased 5 percent to $14.2 billion
  Average core deposits increased 6 percent to $16.3 billion in first quarter from $15.3 billion in fourth quarter; period-end core deposits increased 6 percent linked quarter to $16.8 billion
    Increase in average core deposits was largely driven by timing of commercial customer deposits, a new product offering, and a seasonal increase in public funds
    Increase in period-end core deposits was largely driven by a new product offering which resulted in a shift in funding mix
  NII was $154.4 million in first quarter compared to $157.6 million in fourth quarter; NIM decreased to 4.68 percent in first quarter from 4.78 percent in fourth quarter
    The decrease in NII was primarily attributable to fewer days in first quarter compared to fourth quarter and lower loan fees relative to the prior quarter, which were somewhat offset by higher commercial loan balances
    The decline in NIM was largely driven by the continuing impact of low rates and a decrease in commercial loan fees relative to fourth quarter
  Provision for loan losses was $4.9 million in first quarter compared to $5.6 million in prior quarter
  Noninterest income was $60.2 million in first quarter compared to $64.3 million in fourth quarter
    Deposit fee income decreased primarily due to seasonality in non-sufficient funds (“NSF”) fee structure
  Noninterest expense decreased to $135.8 million in first quarter from $137.5 million in prior quarter

Capital Markets

  Pre-tax income increased to $11.2 million in first quarter from $6.0 million in fourth quarter
  Fixed income revenue increased 37 percent to $53.5 million in first quarter from $39.0 million in fourth quarter
    Fixed income average daily revenue (“ADR”) was $877 thousand in first quarter, up from $630 thousand in fourth quarter
  Noninterest expense was $54.7 million in first quarter compared to $46.2 million in the prior quarter
    The increase was primarily due to an increase in variable compensation costs and the seasonal first quarter FICA reset

Corporate

  Pre-tax loss was $24.9 million in first quarter compared to a loss of $27.7 million in prior quarter
  NII was negative $16.1 million in first quarter compared to negative $18.0 million in fourth quarter
    Estimated effective duration of the securities portfolio was 2.5 years in first quarter compared to 3.0 years in fourth quarter
    Estimated modified duration of the securities portfolio was 3.6 years in first quarter compared to 3.7 years in prior quarter
  Noninterest income increased to $5.4 million in first quarter from $4.4 million in fourth quarter
    Increase primarily relates to higher deferred compensation income driven by market conditions; changes in deferred compensation income are mirrored by changes in deferred compensation expense
  Noninterest expense was relatively flat at $14.2 million in first quarter

 

4


FHN PERFORMANCE HIGHLIGHTS (continued)

 

 

First Quarter 2015 vs. Fourth Quarter 2014 (continued)

 

 

Non-Strategic

  Pre-tax loss was $154.9 million in first quarter compared to pre-tax income of $8.3 million in fourth quarter
  Noninterest expense increased to $171.6 million in first quarter from $9.5 million in fourth quarter
    The increase was driven by $162.5 million of net loss accruals recognized in first quarter related to the AIP entered into to settle potential claims related to FHN’s underwriting and origination of FHA-insured mortgage loans
  NII was $14.2 million in first quarter compared to $15.9 million in fourth quarter due to continued run-off of the non-strategic loan portfolios
  Noninterest income was relatively flat at $2.5 million in first quarter

Asset Quality

  Allowance for loan losses declined to $228.3 million in first quarter from $232.4 million in fourth quarter; the allowance to loans ratio was 136 basis points in first quarter compared to 143 basis points in fourth quarter
    The decline in the allowance was primarily driven by a $4.2 million reduction of non-strategic consumer real estate reserves
  Net charge-offs (“NCOs”) were $9.1 million in first quarter compared to $12.2 million in fourth quarter; annualized net charge-offs decreased to 23 basis points of average loans in first quarter from 30 basis points in prior quarter
    Total commercial net charge-offs decreased to $1.7 million in the first quarter from $2.9 million in fourth quarter; total consumer net charge-offs decreased $1.8 million from the prior quarter
  Nonperforming loans (“NPLs”) in the portfolio declined to $200.2 million in the first quarter from $203.4 million in fourth quarter
  Nonperforming assets (“NPAs”), including loans held-for-sale, decreased to $236.8 million in first quarter from $241.5 million in the prior quarter
    Decrease due to declines in both nonperforming loans and foreclosed assets
  Total 30+ delinquencies increased to $78.0 million in first quarter compared to $75.8 million in prior quarter
    Commercial delinquencies increased by $5.4 million, driven by a $2.7 million increase in regional bank C&I and a $2.5 million increase in regional bank commercial real estate which was driven by one relationship. The past due commercial real estate relationship is now current.
    Consumer delinquencies declined by $3.2 million and was primarily driven by improvement in consumer real estate which more than offset an increase in permanent mortgage delinquencies
  Troubled debt restructurings (“TDRs”) decreased to $395.8 million in first quarter from $411.3 million in prior quarter

Taxes

  The effective tax rates for first quarter and fourth quarter were 23.52 percent and 20.97 percent, respectively. The rates reflect the favorable effect on the tax rate from permanent benefits. The rates are not comparable because of the different levels of pre-tax income
    Permanent benefits primarily consist of: life insurance, tax-exempt income, and tax credit investments
    The amortization of qualified tax credit investments is included in the effective tax rate for each period, under ASU 2014-01, which reduces the effective tax rate benefit from the credits
    A reversal of the capital loss and the state NOL deferred tax valuation allowances lowered the rate in fourth quarter. The rate for fourth quarter was also reduced by discrete tax benefits realized during that period.

Capital and Liquidity

  Paid $0.06 per common share quarterly dividend on April 1, 2015
  Paid preferred quarterly dividend of $1.6 million on April 10, 2015
  Repurchased shares costing $15.8 million in first quarter under the $100 million share repurchase program announced in January 2014
    Cumulative shares repurchased since the program’s inception are $54.3 million with a volume weighted average price of $12.79 per share (before $.02 per share broker commission)
  Capital ratios (regulatory capital ratios estimated based on period-end balances under the new Basel III risk-based capital rules as phased in)
    7.57 percent for tangible common equity to tangible assets
    10.26 percent for Common Equity Tier 1
    11.79 percent for Tier 1
    14.00 percent for Total Capital
    9.59 percent for Leverage

 

5


FHN CONSOLIDATED INCOME STATEMENT

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
(Dollars in thousands, except per share data) 1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14  

Interest income

  $178,068        $179,448       $178,858        $177,359        $173,584        (1)  

Less: interest expense

  21,202        20,398       19,317        20,591        21,225        4     *   

Net interest income

  156,866        159,050       159,541        156,768        152,359        (1)  

Provision for loan losses

  5,000        6,000       6,000        5,000        10,000        (17)   (50)

Net interest income after provision for loan losses

  151,866        153,050       153,541        151,768        142,359        (1)  

Noninterest income:

Capital markets

  61,619        48,486       47,589        47,680        56,840        27  

Deposit transactions and cash management

  26,551        29,038       28,546        27,911        26,456        (9)   *   

Brokerage, management fees and commissions

  11,399        11,647       12,333        12,843        12,276        (2)   (7)

Mortgage banking (a)

  1,584        1,808       41,559        8,861        19,029        (12)   (92)

Trust services and investment management

  6,698        6,945       6,779        7,309        6,744        (4)   (1)

Bankcard income (b)

  5,186        5,737       5,521        7,919        4,520        (10)   15 

Bank-owned life insurance (c)

  3,462        3,503       3,547        3,312        6,032        (1)   (43)

Other service charges

  2,848        2,830       3,064        3,143        2,845        1     *   

Insurance commissions

  596        616       593        611        437        (3)   36 

Securities gains/(losses), net

  276             (862)      (1,923)      5,657        NM      (95)

Other (d)

  9,470        8,988       9,146        9,235        4,894        5     94 

Total noninterest income

  129,689        119,598       157,815        126,901        145,730        8     (11)

Adjusted gross income after provision for loan losses

  281,555        272,648       311,356        278,669        288,089        3     (2)

Noninterest expense:

Employee compensation, incentives, and benefits

  131,444        118,529       120,742        119,659        119,229        11     10 

Repurchase and foreclosure provision (e)

  -             (4,300)      -        -        NM      NM   

Legal and professional fees (f)

  7,257        12,552       10,463        6,151        15,039        (42)   (52)

Occupancy (g)

  12,218        12,077       12,405        11,944        17,592        1     (31)

Computer software

  10,942        10,574       10,614        11,087        10,656        3    

Contract employment and outsourcing

  4,584        4,578       5,199        5,318        4,325        *     

Operations services

  9,337        8,417       9,044        8,804        8,982        11    

Equipment rentals, depreciation, and maintenance

  7,220        7,523       7,150        7,442        7,849        (4)   (8)

FDIC premium expense (h)

  3,448        2,881       3,456        1,136        3,991        20     (14)

Advertising and public relations

  4,733        4,077       4,386        4,312        5,908        16     (20)

Communications and courier

  3,876        4,274       3,628        3,948        4,224        (9)   (8)

Foreclosed real estate

  (131)      492       788        439        784        NM      NM   

Amortization of intangible assets

  1,298        1,225       982        981        982        6     32

Other (d)

  179,995        20,110       59,459        (18,059)      18,483        NM      NM   

Total noninterest expense

  376,221        207,309       244,016        163,162        218,044        81   73

Income/(loss) before income taxes

  (94,666)      65,339       67,340        115,507        70,045        NM      NM   

Provision/(benefit) for income taxes

  (22,261)      13,699       16,842        33,578        20,066        NM      NM   

Net income/(loss)

  (72,405)      51,640       50,498        81,929        49,979        NM      NM   

Net income attributable to noncontrolling interest

  2,758        2,980       2,875        2,859        2,813        (7)   (2)

Net income/(loss) attributable to controlling interest

  (75,163)      48,660       47,623        79,070        47,166        NM      NM   

Preferred stock dividends

  1,550        1,550       1,550        1,550        1,550        *      *   

Net income/(loss) available to common shareholders

  $(76,713)      $47,110       $46,073        $77,520        $45,616        NM      NM   

Common Stock Data

EPS

  $(0.33)      $0.20       $0.20        $0.33        $0.19        NM      NM   

Shares (thousands)(i)

  232,816        233,693       235,329        235,797        235,183        *      (1)

Diluted EPS

  $(0.33)      $0.20       $0.19        $0.33        $0.19        NM      NM   

Diluted shares (thousands)

  232,816        235,448       236,862        237,250        237,401        (1)   (2) %   

Key Ratios & Other

Return on average assets (annualized) (j)

  (1.15)   0.83    0.84     1.39     0.85  

Return on average common equity (annualized) (j)

  (14.04)   8.26    8.14     14.30     8.63  

Fee income to total revenue (j)

  45.21     42.92    49.86     45.11     47.90  

Efficiency ratio (j)

  NM      74.40    76.68     57.13     74.56  

Full time equivalent employees

  4,226        4,250       4,193        4,216        4,251                 

Certain previously reported amounts have been reclassified to agree with current presentation.

NM - Not meaningful

* Amount is less than one percent.

(a) 3Q14 includes a $39.7 million gain on the sales of mortgage loans HFS; 2Q14 includes an $8.2 million positive fair value adjustment to the held-for-sale portfolio; 1Q14 includes the receipt of previously unrecognized servicing fees in conjunction with transfers of servicing in 1Q14.
(b) 2Q14 includes $2.8 million of Visa volume incentives.
(c) 1Q14 includes $2.8 million of policy benefits received.
(d) Refer to the Other Income and Other Expense table on page 7 for additional information.
(e) 3Q14 expense reversal associated with the settlement of certain repurchase claims.
(f) 2Q14 includes an $8.5 million expense reversal related to agreements with insurance companies for the recovery of Sentinel legal expenses.
(g) 1Q14 includes $4.6 million of lease abandonment expense.
(h) 2Q14 includes the effect of $3.3 million of FDIC premium refunds.
(i) 1Q15, 4Q14 and 3Q14 decreases primarily relate to shares purchased under the share repurchase program.
(j) See Glossary of Terms for definitions of Key Ratios.

 

6


FHN OTHER INCOME AND OTHER EXPENSE

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
(Thousands) 1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14  

Other Income

ATM and interchange fees

  $2,761        $2,961        $2,739        $2,746        $2,497        (7)   11  

Electronic banking fees

  1,428        1,561        1,560        1,535        1,534        (9)   (7)

Letter of credit fees

  1,123        1,111        917        1,173        1,663        1     (32)

Deferred compensation (a)

  1,033        242        (41)      1,184        657        NM      57  

Gain /(loss) on extinguishment of debt (b)

  -        184        -        -        (4,350)      NM      NM   

Other

  3,125        2,929        3,971        2,597        2,893        7     8  

Total

  $9,470        $8,988        $9,146        $9,235        $4,894        5     94  

Other Expense

Litigation and regulatory matters (c)

  $162,500        $-        $35,390        $(38,200)      $90        NM      NM   

Other insurance and taxes

  3,329        2,722        3,909        3,209        3,060        22     9  

Tax credit investments (d)

  395        589        311        862        325        (33)   22  

Travel and entertainment

  1,614        2,462        2,164        2,645        1,824        (34)   (12)

Employee training and dues

  1,132        1,258        1,194        1,200        866        (10)   31  

Customer relations

  1,314        1,397        1,406        1,680        1,243        (6)   6  

Miscellaneous loan costs

  361        540        597        839        714        (33)   (49)

Supplies

  927        1,046        779        804        1,116        (11)   (17)

Other (e)

  8,423        10,096        13,709        8,902        9,245        (17)   (9) %   

Total

  $179,995        $20,110        $59,459        $(18,059)      $18,483        NM      NM   

Certain previously reported amounts have been reclassified to agree with current presentation.

NM - Not meaningful

(a) Amounts driven by market conditions and are mirrored by changes in deferred compensation expense which is included in employee compensation expense.
(b) 1Q14 loss associated with the collapse of two HELOC securitization trusts.
(c) 1Q15 loss accruals relate to an AIP to settle potential claims related to FHN’s underwriting and origination of FHA-insured mortgage loans; 3Q14 includes $50.0 million of loss accruals related to legal matters, partially offset by $15.0 million of expense reversals associated with agreements with insurance companies for the recovery of expenses FHN incurred related to litigation losses in previous periods; 2Q14 includes $38.6 million expense recovery related to the Sentinel litigation matter which was settled in 2011.
(d) Represents new market and historic tax credits and affordable housing projects which do not qualify for accounting changes allowed under ASU 2014-01. All historical periods have been revised.
(e) 3Q14 and 1Q14 include $3.2 million and $2.3 million, respectively, of negative valuation adjustments associated with derivatives related to prior sales of Visa Class B shares.

 

7


FHN CONSOLIDATED PERIOD-END BALANCE SHEET

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
(Thousands) 1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14  

Assets:

Investment securities

  $3,676,630        $3,560,905        $3,538,957        $3,580,821        $3,575,453        3     3  

Loans held-for-sale (a)

  133,958        141,285        151,915        358,945        361,359        (5)   (63)

Loans, net of unearned income

  16,732,123        16,230,166        15,812,017        15,795,709        15,119,461        3     11  

Federal funds sold

  43,052        63,080        55,242        51,537        16,555        (32)   NM   

Securities purchased under agreements to resell

  831,541        659,154        561,802        624,477        605,276        26     37  

Interest-bearing cash (b)

  438,633        1,621,967        275,485        255,920        685,540        (73)   (36)

Trading securities

  1,532,463        1,194,391        1,338,022        1,150,280        1,194,749        28     28  

Total earning assets

  23,388,400        23,470,948        21,733,440        21,817,689        21,558,393        *      8  

Cash and due from banks

  282,800        349,171        292,687        417,108        450,270        (19)   (37)

Capital markets receivables (c)

  190,662        42,488        197,507        174,224        51,082        NM      NM   

Goodwill (d)

  145,932        145,932        141,943        141,943        141,943        *      3  

Other intangible assets, net (d)

  28,220        29,518        19,044        20,025        21,007        (4)   34  

Premises and equipment, net (d)

  301,069        302,996        295,833        300,533        299,183        (1)   1  

Real estate acquired by foreclosure

  39,776        39,922        47,996        57,552        66,035        *      (40)

Allowance for loan losses

  (228,328)      (232,448)        (238,641)      (243,628)      (247,246)      (2)   (8)

Derivative assets

  148,153        134,088        137,742        162,067        166,465        10     (11)

Other assets

  1,419,204        1,385,572        1,358,140        1,377,019        1,438,984        2     (1)

Total assets

  $25,715,888        $25,668,187        $23,985,691        $24,224,532        $23,946,116        *      7  

Liabilities and Equity:

Deposits:

Savings

  $7,428,000        $7,455,354        $6,371,156        $6,317,197        $6,630,142        *      12  

Other interest-bearing deposits

  4,939,240        4,140,991        3,955,152        4,014,071        4,071,699        19     21  

Time deposits

  792,914        831,666        767,699        808,822        898,223        (5)   (12)

Total interest-bearing core deposits

  13,160,154        12,428,011        11,094,007        11,140,090        11,600,064        6     13  

Noninterest-bearing deposits

  5,060,897        5,195,656        4,603,826        4,513,800        4,534,245        (3)   12  

Total core deposits (e)

  18,221,051        17,623,667        15,697,833        15,653,890        16,134,309        3     13  

Certificates of deposit $100,000 and more

  417,503        445,272        446,938        503,597        538,434        (6)   (22)

Total deposits

  18,638,554        18,068,939        16,144,771        16,157,487        16,672,743        3     12  

Federal funds purchased

  703,352        1,037,052        928,159        947,946        1,135,665        (32)   (38)

Securities sold under agreements to repurchase

  309,297        562,214        479,384        475,530        411,795        (45)   (25)

Trading liabilities

  813,141        594,314        532,234        706,119        667,257        37     22  

Other short-term borrowings (f)

  158,745        157,218        790,080        1,073,250        204,023        1     (22)

Term borrowings (g)

  1,573,215        1,880,105        1,491,138        1,501,209        1,507,048        (16)   4  

Capital markets payables (c)

  91,176        18,157        329,960        95,299        39,510        NM      NM   

Derivative liabilities

  133,273        119,239        123,442        138,336        137,863        12     (3)

Other liabilities

  795,878        649,359        551,615        507,894        628,420        23     27  

Total liabilities

  23,216,631        23,086,597        21,370,783        21,603,070        21,404,324        1     8  

Equity:

Common stock (h)

  145,937        146,387        147,030        148,217        147,866        *      (1)

Capital surplus (h)

  1,370,711        1,380,809        1,390,081        1,416,012        1,417,170        (1)   (3)

Undivided profits

  760,713        851,585        819,577        788,289        725,820        (11)   5  

Accumulated other comprehensive loss, net

  (169,159)      (188,246)      (132,835)      (122,111)      (140,119)      (10)   21  

Preferred stock

  95,624        95,624        95,624        95,624        95,624        *      *   

Noncontrolling interest (i)

  295,431        295,431        295,431        295,431        295,431        *      *   

Total equity

  2,499,257        2,581,590        2,614,908        2,621,462        2,541,792        (3)   (2) %     

Total liabilities and equity

  $25,715,888        $25,668,187        $23,985,691        $24,224,532        $23,946,116        *      7

Certain previously reported amounts have been reclassified to agree with current presentation.

NM - Not meaningful

* Amount is less than one percent.

(a) 3Q14 decrease related to the sale of mortgage loans HFS.
(b) Includes excess balances held at Fed. 4Q14 increase driven by inflow of customer deposits and proceeds from the issuance of senior notes.
(c) Period-end balances fluctuate based on the level of pending unsettled trades.
(d) 4Q14 increase related to the acquisition of bank branches.
(e) 1Q15 average core deposits were $17.8 billion.
(f) 3Q14 and 2Q14 include increased FHLB borrowings as a result of loan growth and deposit fluctuations.
(g) In 1Q15 $304 million of FTBNA subordinated notes matured. In 4Q14 FTBNA issued $400 million of senior bank notes.
(h) 1Q15, 4Q14 and 3Q14 decreases relate to shares purchased under the share repurchase program.
(i) Consists of preferred stock of subsidiaries.

 

8


FHN CONSOLIDATED AVERAGE BALANCE SHEET

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
(Thousands) 1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14  

Assets:

Earning assets:

Loans, net of unearned income:

Commercial, financial, and industrial (C&I)

  $8,965,657       $8,584,065       $8,395,553       $7,994,788       $7,639,584       4 %      17 %   

Commercial real estate

  1,290,246       1,287,816       1,260,715       1,203,631       1,139,749       *        13 %   

Consumer real estate

  4,988,532       5,087,104       5,173,088       5,230,107       5,305,596       (2)%      (6)%   

Permanent mortgage

  526,616       552,065       581,876       607,296       637,642       (5)%      (17)%   

Credit card and other

  351,503       357,321       352,133       345,748       336,454       (2)%      4 %   

Total loans, net of unearned income (a)

  16,122,554       15,868,371       15,763,365       15,381,570       15,059,025       2 %      7 %   

Loans held-for-sale (b)

  138,373       144,061       318,743       355,822       367,899       (4)%      (62)%   

Investment securities:

U.S. treasuries

  100       100       26,764       39,995       41,828       *        NM    

U.S. government agencies

  3,391,297       3,363,053       3,345,739       3,330,598       3,222,642       1 %      5 %   

States and municipalities

  14,410       14,493       17,458       19,430       19,425       (1)%      (26)%   

Other

  181,858       181,806       184,934       189,449       211,891       *        (14)%   

Total investment securities

  3,587,665       3,559,452       3,574,895       3,579,472       3,495,786       1 %      3 %   

Trading securities

  1,371,514       1,182,762       1,060,123       1,118,425       1,108,747       16 %      24 %   

Other earning assets:

Federal funds sold

  23,710       26,543       37,274       29,490       21,615       (11)%      10 %   

Securities purchased under agreements to resell

  777,989       672,764       644,022       664,194       622,466       16 %      25 %   

Interest-bearing cash (c)

  1,451,826       1,011,983       288,192       363,674       972,537       43 %      49 %   

Total other earning assets

  2,253,525       1,711,290       969,488       1,057,358       1,616,618       32 %      39 %   

Total earning assets

  23,473,631       22,465,936       21,686,614       21,492,647       21,648,075       4 %      8 %   

Allowance for loan losses

  (232,655)      (238,850)      (240,433)      (246,779)      (249,733)      (3)%      (7)%   

Cash and due from banks

  342,512       341,338       321,427       308,890       336,543       *        2 %   

Capital markets receivables

  48,937       63,384       55,937       46,864       54,654       (23)%      (10)%   

Premises and equipment, net

  301,989       301,512       297,636       299,899       301,065       *        *     

Derivative assets

  139,086       141,146       154,988       165,684       181,586       (1)%      (23)%   

Other assets

  1,571,104       1,538,612       1,525,659       1,582,789       1,643,095       2 %      (4)%   

Total assets

  $25,644,604       $24,613,078       $23,801,828       $23,649,994       $23,915,285       4 %      7 %   

Liabilities and equity:

Interest-bearing liabilities:

Interest-bearing deposits:

Savings

  $7,377,045       $6,929,750       $6,327,556       $6,427,265       $6,683,749       6 %      10 %   

Other interest-bearing deposits

  4,483,907       3,895,022       3,697,854       3,779,293       3,830,839       15 %      17 %   

Time deposits

  812,749       830,412       785,154       859,551       924,025       (2)%      (12)%   

Total interest-bearing core deposits

  12,673,701       11,655,184       10,810,564       11,066,109       11,438,613       9 %      11 %   

Certificates of deposit $100,000 and more

  423,480       451,669       464,792       512,527       545,845       (6)%      (22)%   

Federal funds purchased

  1,079,531       1,137,909       1,028,852       1,080,347       1,161,594       (5)%      (7)%   

Securities sold under agreements to repurchase

  474,448       471,712       406,219       458,608       454,937       1 %      4 %   

Capital markets trading liabilities

  728,553       634,375       621,880       671,930       607,114       15 %      20 %   

Other short-term borrowings (d)

  165,408       302,353       1,093,014       540,389       184,721       (45)%      (10)%   

Term borrowings (e)

  1,621,983       1,664,924       1,499,959       1,505,860       1,702,107       (3)%      (5)%   

Total interest-bearing liabilities

  17,167,104       16,318,126       15,925,280       15,835,770       16,094,931       5 %      7 %   

Noninterest-bearing deposits

  5,098,361       4,974,748       4,602,292       4,547,838       4,536,080       2 %      12 %   

Capital markets payables

  34,800       40,273       36,762       34,293       33,144       (14)%      5 %   

Derivative liabilities

  124,305       124,530       130,997       138,282       152,596       *        (19)%   

Other liabilities

  612,513       502,641       470,520       528,531       563,824       22 %      9 %   

Total liabilities

  23,037,083       21,960,318       21,165,851       21,084,714       21,380,575       5 %      8 %   

Equity:

Common stock (f)

  146,225       146,789       147,820       148,085       147,751       *        (1)%   

Capital surplus

  1,377,178       1,387,116       1,408,682       1,416,811       1,417,642       (1)%      (3)%   

Undivided profits

  868,605       847,687       814,300       740,313       713,425       2 %      22 %   

Accumulated other comprehensive loss, net

  (175,542)      (119,887)      (125,880)      (130,984)      (135,163)      46 %      30 %   

Preferred stock

  95,624       95,624       95,624       95,624       95,624       *        *     

Noncontrolling interest (g)

  295,431       295,431       295,431       295,431       295,431       *        *     

Total equity

  2,607,521       2,652,760       2,635,977       2,565,280       2,534,710       (2)%      3 %   

Total liabilities and equity

  $25,644,604       $24,613,078       $23,801,828       $23,649,994       $23,915,285       4 %      7 %   

Certain previously reported amounts have been reclassified to agree with current presentation.

NM - Not meaningful

* Amount is less than one percent.
(a) Includes loans on nonaccrual status.
(b) 4Q14 decrease related to the sale of mortgage loans HFS in third quarter.
(c) Includes excess balances held at Fed. 1Q15 and 4Q14 increase driven by inflow of customer deposits and proceeds from the issuance of senior notes in fourth quarter.
(d) 3Q14 and 2Q14 include increased FHLB borrowings as a result of loan growth and deposit fluctuations.
(e) In 1Q15 $304 million of FTBNA subordinated notes matured. In 4Q14 FTBNA issued $400 million of senior bank notes. In 1Q14 FHN resolved the collateralized borrowings for three previously on-balance sheet consumer loan securitizations.
(f) 1Q15, 4Q14 and 3Q14 decreases relate to shares repurchased under the share repurchase program.
(g) Consists of preferred stock of subsidiaries.

 

9


FHN CONSOLIDATED NET INTEREST INCOME (a)

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
(Thousands) 1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14  

Interest Income:

Loans, net of unearned income (b)

  $146,192       $148,078       $146,931       $144,975       $140,487       (1)%      4 %   

Loans held-for-sale

  1,491       1,483       3,263       3,209       3,215       1 %      (54)%   

Investment securities:

U.S. treasuries

                           NM        NM     

U.S. government agencies

  20,955       21,317       21,376       21,530       20,837       (2)%      1 %   

States and municipalities

  125       159       109       97       117       (21)%      7 %   

Other

  1,876       1,875       1,866       2,103       2,281       *        (18)%   

Total investment securities

  22,956       23,351       23,356       23,737       23,240       (2)%      (1)%   

Trading securities

  9,281       8,701       7,944       7,839       8,222       7 %      13 %   

Other earning assets:

Federal funds sold

  57       69       92       73       53       (17)%      8 %   

Securities purchased under agreements to resell (c)

  (252)      (217)      (363)      (218)      (192)      (16)%      (31)%   

Interest-bearing cash

  874       611       134       182       546       43 %      60 %   

Total other earning assets

  679       463       (137)      37       407       47 %      67 %   

Interest income

  $180,599       $182,076       $181,357       $179,797       $175,571       (1)%      3 %   

Interest Expense:

Interest-bearing deposits:

Savings

  $3,307       $3,087       $2,600       $2,792       $3,083       7 %      7 %   

Other interest-bearing deposits

  957       760       754       746      818       26 %      17 %   

Time deposits (d)

  1,432       1,742       1,786       2,486       3,062       (18)%      (53)%   

Total interest-bearing core deposits

  5,696       5,589       5,140       6,024       6,963       2 %      (18)%   

Certificates of deposit $100,000 and more (e)

  882       513       685       869       1,023       72 %      (14)%   

Federal funds purchased

  673       729       654       683       726       (8)%      (7)%   

Securities sold under agreements to repurchase

  95       83       63       109       118       14 %      (19)%   

Capital markets trading liabilities

  3,914       3,950       3,782       4,087       3,571       (1)%      10 %   

Other short-term borrowings

  278       388       548       403       261       (28)%      7 %   

Term borrowings (f)

  9,664       9,146       8,445       8,416       8,563       6 %      13 %   

Interest expense

  21,202       20,398       19,317      20,591       21,225       4 %      *     

Net interest income - tax equivalent basis

  159,397       161,678       162,040       159,206       154,346       (1)%      3 %   

Fully taxable equivalent adjustment

  (2,531)      (2,628)      (2,499)      (2,438)      (1,987)      4 %      (27)%   

Net interest income

  $156,866       $159,050       $159,541       $156,768       $152,359       (1)%      3 %   

NM - Not meaningful

* Amount is less than one percent.

(a) Net interest income adjusted to a fully taxable equivalent (“FTE”) basis assuming a statutory federal income tax of 35 percent and, where applicable, state income taxes.
(b) Includes interest on loans in nonaccrual status.
(c) Driven by negative market rates on reverse repurchase agreements.
(d) 1Q15 includes the effect of amortizing the premium valuation adjustment for acquired time deposits related to branch acquisitions.
(e) Prior to 1Q15 includes the effect of amortizing the premium valuation adjustment for acquired time deposits related to acquisitions.
(f) 4Q14 increase related to the issuance of $400 million of senior notes.

 

10


FHN CONSOLIDATED AVERAGE BALANCE SHEET: YIELDS AND RATES

Quarterly, Unaudited

 

   1Q15       4Q14       3Q14       2Q14       1Q14            

Assets:

Earning assets (a):

Loans, net of unearned income (b):

Commercial loans

  3.50 %      3.55 %      3.51 %      3.59 %      3.60 %       

Retail loans

  3.96          3.97          4.01          4.06          4.01           

Total loans, net of unearned income (c)

  3.67          3.71          3.70          3.78          3.77           

Loans held-for-sale

  4.31          4.12          4.09          3.61          3.50           

Investment securities:

U.S. treasuries

  NM          NM          0.07          0.07          0.05           

U.S. government agencies

  2.47          2.54          2.56          2.59          2.59           

States and municipalities

  3.46          4.38          2.50          1.99          2.41           

Other

  4.13          4.13          4.04          4.44          4.31           

Total investment securities

  2.56          2.62          2.61          2.65          2.66           

Trading securities

  2.71          2.94          3.00          2.80          2.97           

Other earning assets:

Federal funds sold

  0.97          1.02          0.98          1.00          0.99           

Securities purchased under agreements to resell (d)

  (0.13)         (0.13)         (0.22)         (0.13)         (0.13)          

Interest-bearing cash

  0.24          0.24          0.19          0.20          0.23           

Total other earning assets

  0.12          0.11          (0.06)         0.01          0.10           

Interest income/total earning assets

  3.11 %      3.22 %      3.33 %      3.35 %      3.27 %       

Liabilities:

Interest-bearing liabilities:

Interest-bearing deposits:

Savings

  0.18 %      0.18 %      0.16 %      0.17 %      0.19 %       

Other interest-bearing deposits

  0.09          0.08          0.08          0.08          0.09           

Time deposits(e)

  0.71          0.83          0.90          1.16          1.34           

Total interest-bearing core deposits

  0.18          0.19          0.19          0.22          0.25           

Certificates of deposit $100,000 and more (f)

  0.84          0.45          0.59          0.68          0.76           

Federal funds purchased

  0.25          0.25          0.25          0.25          0.25           

Securities sold under agreements to repurchase

  0.08          0.07          0.06          0.10          0.11           

Capital markets trading liabilities

  2.18          2.47          2.41          2.44          2.39           

Other short-term borrowings

  0.68          0.51          0.20          0.30          0.57           

Term borrowings (g)

  2.39          2.20          2.25          2.24          2.01           

Interest expense/total interest-bearing liabilities

  0.50          0.50          0.48          0.52          0.53           

Net interest spread

  2.61 %      2.72 %      2.85 %      2.83 %      2.74 %       

Effect of interest-free sources used to fund earning assets

  0.13          0.14          0.12          0.14          0.14           

Net interest margin

  2.74 %      2.86 %      2.97 %      2.97 %      2.88 %       

Yields are adjusted to a FTE basis assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes.

NM - Not meaningful

(a) Earning assets yields are expressed net of unearned income.
(b) Includes loan fees and cash basis interest income.
(c) Includes loans on nonaccrual status.
(d) Driven by negative market rates on reverse repurchase agreements.
(e) 1Q15 rate includes the effect of amortizing the premium valuation adjustment for acquired time deposits related to branch acquisitions.
(f) Rates prior to 1Q15 include the effect of amortizing the premium valuation adjustment for acquired time deposits related to acquisitions.
(g) Rates are expressed net of unamortized debenture cost for term borrowings.

 

11


FHN CAPITAL HIGHLIGHTS

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
(Dollars and shares in thousands) 1Q15       4Q14       3Q14       2Q14       1Q14       4Q14   1Q14  

Common equity tier 1 capital (a) (c)

  2,133,336         N/A         N/A          N/A          N/A          NM          NM       

Tier 1 capital (a) (b) (c)

  2,452,075         $2,813,503         $2,783,147         $2,751,933         $2,666,486         (13)%      (8)%   

Total capital (a) (d)

  2,912,360         $3,148,336         $3,121,359         $3,092,212         $3,048,105         (7)%      (4)%   

Risk-weighted assets (“RWA”) (a)

  20,795,400         $19,452,656         $19,238,109         $19,400,096         $18,694,719         7%      11%   

Average assets for leverage (a) (c)

  25,569,095         $24,625,820         $23,748,667         $23,579,425         $23,828,049         4%      7%   

Common equity tier 1 ratio (a) (c)

  10.26%      N/A          N/A          N/A          N/A       

Tier 1 ratio (a) (c)

  11.79%      14.46 %      14.47 %      14.19 %      14.26 %   

Total capital ratio (a)

  14.00%      16.18 %      16.22 %      15.94 %      16.30 %   

Leverage ratio (a)

  9.59%      11.43 %      11.72 %      11.67 %      11.19 %   

Tier 1 common to risk-weighted assets (c) (e)

  N/A          11.43 %      11.40 %      11.14 %      11.10 %   

Total equity to total assets

  9.72 %      10.06 %      10.90 %      10.82 %      10.61 %   

Tangible common equity/tangible assets (“TCE/TA”) (e)

  7.57 %      7.90 %      8.66 %      8.60 %      8.36 %   

Period-end shares outstanding (f)

  233,499         234,220         235,249         237,147         236,586         *         (1) %   

Cash dividends declared per common share

  $0.06         $0.05         $0.05         $0.05         $0.05         20 %      20 %   

Book value per common share

  $9.03         $9.35         $9.45         $9.41         $9.09      

Tangible book value per common share (e)

  $8.28         $8.60         $8.77         $8.72         $8.40      

Market capitalization (millions)

  $3,336.7         $3,180.7         $2,888.9         $2,812.6         $2,919.5                  

Certain previously reported amounts have been reclassified to agree with current presentation.

* Amount is less than one percent.
(a) Current quarter is an estimate and reflects revisions to regulatory capital definitions under the new Basel III risk-based capital rules as phased-in.
(b) 1Q15 includes $50 million of Tier 1 qualifying trust preferred securities. All periods in 2014 include $200 million of Tier 1 qualifying trust preferred securities.
(c) See Glossary of Terms for definition of ratio.
(d) 1Q15 includes $150 million of Tier 2 qualifying trust preferred which are excluded from Tier 1 under Basel III.
(e) Refer to the Non-GAAP to GAAP reconciliation on page 22 of this financial supplement.
(f) 1Q15, 4Q14 and 3Q14 decreases relate to shares purchased under the share repurchase program.

 

12


FHN BUSINESS SEGMENT HIGHLIGHTS

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
(Thousands) 1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14  

Regional Banking

Net interest income

  $154,409        $157,557        $153,868        $148,675        $142,026        (2)%       9%    

Noninterest income

  60,204        64,331        64,155        66,227        59,992        (6)%       *       

Total revenues

  214,613        221,888        218,023        214,902        202,018        (3)%       6%    

Provision for loan losses

  4,915        5,568        2,204        8,425        12,990        (12)%       (62)%    

Noninterest expense

  135,780        137,546        135,903        132,996        132,543        (1)%       2%    

Income before income taxes

  73,918        78,774        79,916        73,481        56,485        (6)%       31%    

Provision for income taxes

  26,381        28,057        28,561        26,070        20,083        (6)%       31%    

Net income

  $47,537        $50,717        $51,355        $47,411        $36,402        (6)%       31%    

Capital Markets

Net interest income

  $4,323        $3,675        $2,950        $2,587        $3,476        18%       24%    

Noninterest income

  61,565        48,506        49,896        47,564        56,759        27%       8%    

Total revenues

  65,888        52,181        52,846        50,151        60,235        26%       9%    

Noninterest expense (a)

  54,683        46,218        47,915        116        52,598        18%       4%    

Income before income taxes

  11,205        5,963        4,931        50,035        7,637        88%       47%    

Provision for income taxes

  4,167        2,059        1,696        19,143        2,843        NM          47%    

Net income

  $7,038        $3,904        $3,235        $30,892        $4,794        80%       47%    

Corporate

Net interest income/(expense)

  $(16,084)       $(18,038)       $(14,246)       $(11,968)       $(9,923)       11%       (62)%    

Noninterest income

  5,385        4,400        4,139        5,215        13,215        22%       (59)%    

Total revenues

  (10,699)       (13,638)       (10,107)       (6,753)       3,292        22%       NM       

Noninterest expense

  14,169        14,017        16,511        13,532        17,327        1%       (18)%    

Loss before income taxes

  (24,868)       (27,655)       (26,618)       (20,285)       (14,035)       10%       (77)%    

Benefit for income taxes

  (11,640)       (19,601)       (16,928)       (16,369)       (10,628)       41%       (10)%    

Net loss

  $(13,228)       $(8,054)       $(9,690)       $(3,916)       $(3,407)       (64)%       NM       

Non-Strategic

Net interest income

  $14,218        $15,856        $16,969        $17,474        $16,780        (10)%       (15)%    

Noninterest income (b)

  2,535        2,361        39,625        7,895        15,764        7%       (84)%    

Total revenues

  16,753        18,217        56,594        25,369        32,544        (8)%       (49)%    

Provision/(provision credit) for loan losses

  85        432        3,796        (3,425)       (2,990)       (80)%       NM       

Noninterest expense (c)

  171,589        9,528        43,687        16,518        15,576        NM          NM       

Income/(loss) before income taxes

  (154,921)       8,257        9,111        12,276        19,958        NM          NM       

Provision/(benefit) for income taxes

  (41,169)       3,184        3,513        4,734        7,768        NM          NM       

Net income/(loss)

  $(113,752)       $5,073        $5,598        $7,542        $12,190        NM          NM       

Total Consolidated

Net interest income

  $156,866        $159,050        $159,541        $156,768        $152,359        (1)%       3%    

Noninterest income

  129,689        119,598        157,815        126,901        145,730        8%       (11)%    

Total revenues

  286,555        278,648        317,356        283,669        298,089        3%       (4)%    

Provision for loan losses

  5,000        6,000        6,000        5,000        10,000        (17)%       (50)%    

Noninterest expense

  376,221        207,309        244,016        163,162        218,044        81%       73%    

Income/(loss) before income taxes

  (94,666)       65,339        67,340        115,507        70,045        NM          NM       

Provision/(benefit) for income taxes

  (22,261)       13,699        16,842        33,578        20,066        NM          NM       

Net income/(loss)

  $(72,405)       $51,640        $50,498        $81,929        $49,979        NM          NM       

Certain previously reported amounts have been reclassified to agree with current presentation.

NM - Not meaningful

* Amount is less than one percent.
(a) 2Q14 includes $47.1 million related to agreements with insurance companies for the recovery of expenses FHN incurred in connection with the Sentinel litigation matter which was settled in 2011.
(b) 3Q14 includes $39.7 million of gains on the sales of HFS mortgage loans.
(c) 1Q15 includes $162.5 million of loss accruals related to an AIP to settle potential claims related to FHN’s underwriting and origination of FHA-insured mortgage loans; 3Q14 includes $50.0 million of loss accruals related to legal matters, partially offset by $15.0 million of expense reversals related to agreements with insurance companies for the recovery of expenses FHN incurred related to litigation losses in previous periods.

 

13


FHN REGIONAL BANKING

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
   1Q15     4Q14     3Q14     2Q14     1Q14     4Q14     1Q14      

Income Statement (thousands)

Net interest income

  $154,409          $157,557          $153,868          $148,675          $142,026          (2)%         9%       

Provision for loan losses

  4,915          5,568          2,204          8,425          12,990          (12)%         (62)%     

Noninterest income:

NSF / Overdraft fees (a)

  9,144          11,619          11,425          10,636          9,156          (21)%         *         

Cash management fees

  8,878          8,719          8,522          8,537          8,916          2%         *         

Debit card income

  3,064          3,117          2,945          2,934          2,655          (2)%         15%       

Other

  4,537          4,655          4,705          4,850          4,864          (3)%         (7)%     

Total deposit transactions and cash management

  25,623          28,110          27,597          26,957          25,591          (9)%         *       

Brokerage, management fees and commissions

  11,399          11,647          12,333          12,844          12,276          (2)%         (7)%     

Trust services and investment management

  6,713          6,960          6,794          7,325          6,760          (4)%         (1)%     

Bankcard income (b)

  4,915          5,469          5,224          7,648          4,255          (10)%         16%       

Other service charges

  2,422          2,395          2,630          2,628          2,356          1%          3%       

Miscellaneous revenue

  9,132          9,750          9,577          8,825          8,754          (6)%          4%       

Total noninterest income

  60,204          64,331          64,155          66,227          59,992          (6)%         *         

Noninterest expense:

Employee compensation, incentives, and benefits

  48,272          46,175          46,259          46,055          44,945          5%          7%       

Other

  87,508          91,371          89,644          86,941          87,598          (4)%         *         

Total noninterest expense

  135,780          137,546          135,903          132,996          132,543          (1)%         2%       

Income before income taxes

  $73,918          $78,774          $79,916          $73,481          $56,485          (6)%         31%       

PPNR (Non-GAAP) (c)

  78,833          84,342          82,120          81,906          69,475          (7)%         13%       

Efficiency ratio (d)

  63.27%      61.99%      62.33%      61.89%      65.61%               

Balance Sheet (millions)

Average loans

  $13,513          $13,129          $12,886          $12,372          $11,897          3%          14%       

Average other earning assets

  48          52          63          57          50          (8)%         (4)%     

Total average earning assets

  13,561          13,181          12,949          12,429          11,947          3%          14%       

Average core deposits

  16,263          15,335          14,639          14,808          14,857          6%          9%       

Average other deposits

  423          452          464          513          546          (6)%         (23)%     

Total average deposits

  16,686          15,787          15,103          15,321          15,403          6%          8%       

Total period-end deposits

  17,240          16,373          15,119          15,418          15,723          5%          10%       

Total period-end assets

  14,894          14,350          13,695          13,700          12,889          4%          16%       

Net interest margin (e)

  4.68%      4.78%      4.74%      4.82%      4.84%   

Net interest spread

  3.37          3.36          3.41          3.46          3.41       

Loan yield

  3.51          3.50          3.56          3.63          3.61       

Deposit average yield

  0.14          0.14          0.15          0.17          0.20                   

Key Statistics

Financial center locations (f)

  178          178          172          172          172          *          3%       

Certain previously reported amounts have been reclassified to agree with current presentation.

* Amount is less than one percent.

(a) 1Q15 and 1Q14 levels primarily attributable to seasonality in NSF fees.
(b) 2Q14 includes $2.8 million of Visa volume incentives.
(c) Pre-tax, pre-provision, net revenue is a Non-GAAP number and is calculated by adding the provision/(provision credit) for loan losses (GAAP) to Income before income taxes (GAAP).
(d) Noninterest expense divided by total revenue.
(e) Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes.
(f) 4Q14 increase related to the acquisition of bank branches.

 

14


FHN CAPITAL MARKETS

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
   1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14  

Income Statement (thousands)

Net interest income

  $4,323       $3,675       $2,950       $2,587       $3,476       18    24 

Noninterest income:

Fixed income

  53,510       39,030       41,216       40,457       49,614       37   

Other

  8,055       9,476       8,680       7,107       7,145       (15 ) %    13 

Total noninterest income

  61,565       48,506       49,896       47,564       56,759       27   

Noninterest expense (a)

  54,683       46,218       47,915       116       52,598       18   

Income before income taxes

  $11,205       $5,963       $4,931       $50,035       $7,637       88    47 

Efficiency ratio (b)

  82.99    88.57    90.67    NM       87.32 

Fixed income average daily revenue

  $877       $630       $644       $642       $813       39   

Balance Sheet (millions)

Average trading inventory

  $1,366       $1,177       $1,054       $1,112       $1,102       16    24  % 

Average other earning assets

  781       677       648       668       628       15    24 

Total average earning assets

  2,147       1,854       1,702       1,780       1,730       16    24 

Total period-end assets

  2,808       2,138       2,338       2,197       2,095       31    34 

Net interest margin (c)

  0.83    0.85    0.75    0.61    0.82             

Certain previously reported amounts have been reclassified to agree with current presentation.

NM - Not meaningful

(a) 2Q14 includes $47.1 million related to agreements with insurance companies for the recovery of expenses FHN incurred in connection with the Sentinel litigation matter which was settled in 2011.
(b) Noninterest expense divided by total revenue.
(c) Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes.

FHN CORPORATE

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
   1Q15     4Q14     3Q14     2Q14     1Q14     4Q14   1Q14  

Income Statement (thousands)

Net interest income/(expense)

  $(16,084)          $(18,038)          $(14,246)          $(11,968)          $(9,923)          11%        (62)%   

Noninterest income excluding securities gains/(losses)

  5,109           4,400           4,005           5,139           7,558           16%        (32)%   

Securities gains/(losses), net (a)

  276           -            134           76           5,657           NM           (95)%   

Noninterest expense

  14,169           14,017           16,511           13,532           17,327           1%        (18)%   

Loss before income taxes

  $(24,868)          $(27,655)          $(26,618)          $(20,285)          $(14,035)          10%        (77)%   

Average Balance Sheet (millions)

Average loans

  $138           $148           $153           $159           $169           (7)%      (18)%   

Total earning assets

  $5,162           $4,703           $3,999           $4,082           $4,617           10%        12%     

Net interest margin (b)

  (1.28)%      (1.40)%      (1.25)%      (1.04)%      (0.81)%               

Certain previously reported amounts have been reclassified to agree with current presentation.

NM - Not meaningful

(a) 1Q14 includes a gain of $5.6 million on the sale of cost method investments.
(b) Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes.

 

15


FHN NON-STRATEGIC

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
   1Q15       4Q14       3Q14       2Q14       1Q14       4Q14   1Q14  

Income Statement (thousands)

Net interest income

  $14,218          $15,856          $16,969          $17,474          $16,780          (10)%      (15)%   

Noninterest income:

Mortgage warehouse valuation (a)

  1,228          1,240          41,287          8,213          1,045          (1)%      18 %   

Miscellaneous revenue (b)

  1,307          1,121          (667)         1,682          14,719          17 %      (91)%   

Total noninterest income excluding securities gains/(losses)

  2,535          2,361          40,620          9,895          15,764          7 %      (84)%   

Securities gains/(losses), net

  -          -          (995)         (2,000)         -          NM        NM     

Noninterest expense:

Repurchase and foreclosure provision (c)

  -          -          (4,300)         -          -          NM        NM     

Other expenses (d)

  171,589          9,528          47,987          16,518          15,576          NM        NM     

Total noninterest expense

  171,589          9,528          43,687          16,518          15,576          NM        NM     

Provision/(provision credit) for loan losses

  85          432          3,796          (3,425)         (2,990)         (80)%      NM     

Income/(loss) before income taxes

  $(154,921)         $8,257          $9,111          $12,276          $19,958          NM        NM     

Average Balance Sheet (millions)

Loans

  $2,472          $2,592          $2,724          $2,851          $2,993          (5)%      (17)%   

Loans held-for-sale (e)

  120          125          298          335          344          (4)%      (65)%   

Trading securities

  5          6          6          7          7          (17)%      (29)%   

Allowance for loan losses

  (105)         (110)         (111)         (117)         (126)         (5)%      (17)%   

Other assets

  63          72          78          102          186          (13)%      (66)%   

Total assets

  2,555          2,685          2,995          3,178          3,404          (5)%      (25)%   

Net interest margin (f)

  2.19 %      2.32 %      2.23 %      2.18 %      2.01 %   

Efficiency ratio (g)

  NM          52.30 %      75.86 %      60.35 %      47.86 %               

Mortgage Warehouse - Period-end (millions)

Ending warehouse balance (loans held-for-sale) (e)

  $108          $115          $120          $330          $332          (6)%      (67)%   

Key Servicing Metric

Ending servicing portfolio (millions) (h)

  $966          $1,013          $1,090          $1,456          $1,679          (5)%      (42)%   

Certain previously reported amounts have been reclassified to agree with current presentation.

NM - Not meaningful

(a) 3Q14 includes $39.7 million of gains on the sale of HFS mortgage loans; 2Q14 fair value adjustments reflect new information on market pricing for similar assets primarily related to the non-performing portion of the held-for-sale portfolio.
(b) 1Q14 includes the receipt of previously unrecognized servicing fees in conjunction with transfers of servicing in 1Q14.
(c) 3Q14 expense reversal associated with the settlement of certain repurchase claims.
(d) 1Q15 includes $162.5 million of loss accruals related to an AIP to settle potential claims related to FHN’s underwriting and origination of FHA-insured mortgage loans; 3Q14 includes $50.0 million of loss accruals related to legal matters, partially offset by $15.0 million of expense reversals associated with agreements with insurance companies for the recovery of expenses FHN incurred related to litigation losses in previous periods.
(e) 4Q14 and 3Q14 decreases relate to the sale of mortgage loans HFS late in third quarter.
(f) Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes.
(g) Noninterest expense divided by total revenue excluding securities gains/(losses).
(h) Includes mortgage loans serviced from FHN’s legacy mortgage banking business, legacy equity lending serviced for others, and mortgage loans in portfolio and warehouse.

 

16


FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
(Thousands) 1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14  

Allowance for Loan Losses Walk-Forward

Beginning reserve

  $232,448        $238,641        $243,628        $247,246        $253,809        (3)%      (8)%   

Provision

  5,000        6,000        6,000        5,000        10,000        (17)%      (50)%   

Charge-offs

  (17,999)      (23,306)      (23,684)      (18,764)      (24,692)      (23)%      (27)%   

Recoveries

  8,879        11,113        12,697        10,146        8,129        (20)%      9%    

Ending balance

  $228,328        $232,448        $238,641        $243,628        $247,246        (2)%      (8)%   

Reserve for unfunded commitments

  4,135        4,770        2,313        2,209        2,882        (13)%      43%    

Total allowance for loan losses plus reserve for unfunded commitments

  $232,463        $237,218        $240,954        $245,837        $250,128        (2)%      (7)%   

Allowance for Loan Losses

Regional Banking

  $125,982        $126,812        $127,873        $131,801        $128,234        (1)%      (2)%   

Non-Strategic

  102,346        105,636        110,768        111,827        119,012        (3)%      (14)%   

Corporate (a)

  NM      NM      NM      NM      NM      NM      NM    

Total allowance for loan losses

  $228,328        $232,448        $238,641        $243,628        $247,246        (2)%      (8)%   

Nonperforming Assets

Regional Banking

Nonperforming loans

  $63,620        $64,654        $70,805        $89,191        $83,275        (2)%      (24)%   

Foreclosed real estate (b)

  19,704        20,451        25,404        26,598        27,705        (4)%      (29)%   

Total Regional Banking

  $83,324        $85,105        $96,209        $115,789        $110,980        (2)%      (25)%   

Non-Strategic

Nonperforming loans (c)

  $133,804        $135,740        $139,038        $138,789        $153,972        (1)%      (13)%   

Nonperforming loans held-for-sale after fair value adjustments (d)

  6,888        7,643        7,931        69,184        61,631        (10)%      (89)%   

Foreclosed real estate (b)

  9,977        9,979        9,857        12,183        15,265        *      (35)%   

Total Non-Strategic

  $150,669        $153,362        $156,826        $220,156        $230,868        (2)%      (35)%   

Corporate

Nonperforming loans

  $2,805        $3,045        $3,903        $3,636        $3,672        (8)%      (24)%   

Total nonperforming assets

  $236,798        $241,512        $256,938        $339,581        $345,520        (2)%      (31)%   

Net Charge-Offs

Regional Banking

  $5,745        $6,629        $6,132        $4,858        $5,783        (13)%      (1)%   

Non-Strategic

  3,375        5,564        4,855        3,760        10,780        (39)%      (69)%   

Total net charge-offs

  $9,120        $12,193        $10,987        $8,618        $16,563        (25)%      (45)%   

Consolidated Key Ratios (e)

NPL %

  1.20  %      1.25  %      1.35  %      1.47  %      1.59  %   

NPA %

  1.37        1.44        1.57        1.71        1.87     

Net charge-offs %

  0.23        0.30        0.28        0.22        0.45     

Allowance / loans

  1.36        1.43        1.51        1.54        1.64     

Allowance / NPL

  1.14     1.14     1.12     1.05     1.03  

Allowance / NPA

  0.99     0.99     0.96     0.90     0.87  

Allowance / charge-offs

  6.17     4.81     5.47     7.05     3.68              

Other

Loans past due 90 days or more (f)

  $46,889        $50,699        $57,786        $68,369        $63,747        (8)%      (26)%   

Guaranteed portion (f)

  18,552        24,036        27,020        32,782        35,063        (23)%      (47)%   

Foreclosed real estate from government insured loans

  10,096        9,492        12,735        18,771        23,065        6%       (56)%   

Period-end loans, net of unearned income (millions)

  16,732        16,230        15,812        15,796        15,119        3%       11%    

NM - Not meaningful

* Amount is less than one percent.

(a) The valuation adjustment taken upon exercise of clean-up calls included expected losses.
(b) Excludes foreclosed real estate from government-insured mortgages.
(c) 2Q14 decrease is primarily related to a TRUPS sale.
(d) 3Q14 decrease is related to the sale of held-for-sale mortgage loans.
(e) See Glossary of Terms for definitions of Consolidated Key Ratios.
(f)  Includes loans held-for-sale.

 

17


FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
   1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14  

Key Portfolio Details

C&I

Period-end loans ($ millions)

  $9,638      $9,007      $8,477      $8,403      $7,753      7%           24%        

30+ Delinq. % (a)

  0.07   0.05   0.10   0.19   0.27

NPL %

  0.35      0.36      0.49      0.58      0.68   

Charge-offs % (qtr. annualized)

  0.07      0.19      NM      0.20      0.22               

Allowance / loans %

  0.70   0.74   0.82   0.82   0.94

Allowance / charge-offs

  10.41   4.05   NM      4.35   4.27            

Commercial Real Estate

Period-end loans ($ millions)

  $1,321      $1,278      $1,278      $1,232      $1,152      3%           15%        

30+ Delinq. % (a)

  0.33   0.14   0.33   1.10   1.61

NPL %

  1.01      1.20      1.11      1.14      1.30   

Charge-offs % (qtr. annualized)

  0.03      NM      0.47      NM      0.12               

Allowance / loans %

  1.34   1.45   1.21   1.28   1.35

Allowance / charge-offs

  45.39   NM      2.64   NM      10.97            

Consumer Real Estate

Period-end loans ($ millions)

  $4,923      $5,048      $5,131      $5,219      $5,258      (2)%          (6)%       

30+ Delinq. % (a)

  0.98   1.10   1.04   0.93   1.01

NPL %

  2.43      2.39      2.41      2.51      2.51   

Charge-offs % (qtr. annualized)

  0.31      0.38      0.60      0.20      0.56               

Allowance / loans %

  2.22   2.24   2.31   2.26   2.35

Allowance / charge-offs

  7.06   5.85   3.83   11.30   4.17            

Permanent Mortgage

Period-end loans ($ millions)

  $512      $539      $573      $594      $622      (5)%          (18)%       

30+ Delinq. % (a)

  2.76   1.72   2.73   1.71   1.44

NPL %

  6.43      6.32      5.93      6.23      6.46   

Charge-offs % (qtr. annualized)

  0.44      1.00      0.25      0.12      1.04               

Allowance / loans %

  3.94   3.55   3.53   3.99   3.62

Allowance / charge-offs

  8.80   3.46   14.17   31.85   3.39            

Credit Card and Other

Period-end loans ($ millions)

  $338      $358      $353      $348      $334      (6)%          1%        

30+ Delinq. % (a)

  1.20   1.42   1.44   1.39   1.30

NPL %

  0.22      0.21      0.20      0.39      0.42   

Charge-offs % (qtr. annualized)

  3.51      3.33      3.19      3.35      3.71               

Allowance / loans %

  4.01   4.11   4.17   5.01   3.91

Allowance / charge-offs

  1.10   1.24   1.31   1.51   1.05            

NM - Not meaningful

(a) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.

 

18


FHN ASSET QUALITY: REGIONAL BANKING

Quarterly, Unaudited

 

                            1Q15 Changes vs.  
   1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14  

Total Regional Banking

Period-end loans ($ millions)

  $14,200      $13,568      $13,002      $12,853      $12,042      5 %      18  % 

30+ Delinq. % (a)

  0.24   0.22   0.29   0.43   0.52

NPL %

  0.45      0.48      0.54      0.69      0.69   

Charge-offs % (qtr. annualized)

  0.17      0.20      0.19      0.16      0.20               

Allowance / loans %

  0.89   0.93   0.98   1.03   1.06

Allowance / charge-offs

  5.41   4.82   5.26   6.76   5.47            

Key Portfolio Details

C&I

Period-end loans ($ millions)

  $9,185      $8,553      $8,022      $7,947      $7,287      7  %    26  % 

30+ Delinq. % (a)

  0.07   0.05   0.09   0.20   0.26%   

NPL %

  0.24      0.24      0.37      0.57      0.55   

Charge-offs % (qtr. annualized)

  0.08      0.21      NM      0.09      0.07               

Allowance / loans %

  0.68   0.72   0.81   0.84   0.93

Allowance / charge-offs

  9.42   3.62   NM      10.12   13.74            

Commercial Real Estate

Period-end loans ($ millions)

  $1,320      $1,273      $1,274      $1,226      $1,145      4  %    15  % 

30+ Delinq. % (a) (b)

  0.32   0.14   0.33   1.10   1.62

NPL %

  1.00      1.14      1.04      1.06      1.05   

Charge-offs % (qtr. annualized)

  0.03      NM      0.49      NM      0.10               

Allowance / loans %

  1.33   1.43   1.18   1.25   1.31

Allowance / charge-offs

  52.33   NM      2.46   NM      13.38            

Consumer Real Estate

Period-end loans ($ millions)

  $3,358      $3,385      $3,356      $3,334      $3,280      (1)   2  % 

30+ Delinq. % (a)

  0.55   0.57   0.61   0.64   0.62

NPL %

  0.84      0.86      0.83      0.90      0.92   

Charge-offs % (qtr. annualized)

  0.15      0.11      0.39      0.18      0.18               

Allowance / loans %

  0.97   0.95   0.99   0.97   0.99

Allowance / charge-offs

  6.45   8.55   2.55   5.32   5.42            

Credit Card, Permanent Mortgage, and Other

Period-end loans ($ millions)

  $337      $357      $351      $346      $330      (6)   2  % 

30+ Delinq. % (a)

  1.29   1.51   1.49   1.43   1.38

NPL %

  0.15      0.14      0.15      0.14      0.27   

Charge-offs % (qtr. annualized)

  3.22      3.00      3.01      3.05      3.43               

Allowance / loans %

  3.88   4.06   4.07   4.98   3.91

Allowance / charge-offs

  1.16   1.36   1.36   1.64   1.13            

ASSET QUALITY: CORPORATE

Permanent Mortgage

Period-end loans ($ millions)

  $123      $136      $147      $155      $164      (10)   (25)

30+ Delinq. % (a)

  3.41   2.32   2.24   1.91   1.83

NPL %

  2.29      2.25      2.65      2.34      2.24   

Charge-offs % (qtr. annualized)

  NM      NM      NM      NM      NM               

Allowance / loans %

  NM      NM      NM      NM      NM   

Allowance / charge-offs

  NM      NM      NM      NM      NM               

NM - Not meaningful

(a) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
(b) 1Q15 increase was primarily driven by one relationship

 

19


FHN ASSET QUALITY: NON-STRATEGIC

Quarterly, Unaudited

 

                            1Q15 Changes vs.
   1Q15   4Q14   3Q14   2Q14   1Q14   4Q14   1Q14

Total Non-Strategic

Period-end loans ($ millions)

  $2,409      $2,527      $2,663      $2,788      $2,913      (5)%        (17)%    

30+ Delinq. % (a)

  1.67  %    1.67  %    1.73  %    1.24  %    1.38  % 

NPL % (b)

  5.55      5.37      5.22      4.98      5.28   

Charge-offs % (qtr. annualized)

  0.55      0.85      0.71      0.53      1.46           

Allowance / loans %

  4.25  %    4.18  %    4.16  %    4.01  %    4.08  % 

Allowance / charge-offs

  7.48  x    4.79  x    5.75  x    7.41  x    2.72  x         

Key Portfolio Details

C&I

Period-end loans ($ millions)

  $453      $454      $456      $456      $466      *        (3)%    

30+ Delinq. % (a)

  0.08  %    0.05  %    0.23  %    0.02  %    0.43  % 

NPL % (b)

  2.68      2.64      2.64      0.58      2.64   

Charge-offs % (qtr. annualized)

  NM      NM      NM      1.99      2.48           

Allowance / loans %

  1.09  %    1.10  %    1.01  %    0.38  %    1.02  % 

Allowance / charge-offs

  NM      NM      NM      0.19  x    0.39  x         

Commercial Real Estate

Period-end loans ($ millions)

  $1      $5      $5      $5      $7      (80)%        (86)%    

30+ Delinq. % (a)

  14.87  %    -  %    -  %    -  %    -  % 

NPL %

  18.31      17.47      20.01      19.34      40.93   

Charge-offs % (qtr. annualized)

  2.64      6.91      NM      NM      3.46           

Allowance / loans %

  8.22  %    9.25  %    9.36  %    9.41  %    7.43  % 

Allowance / charge-offs

  1.06  x    1.27  x    NM      NM      1.80  x         

Consumer Real Estate

Period-end loans ($ millions)

  $1,565      $1,663      $1,775      $1,885      $1,978      (6)%        (21)%    

30+ Delinq. % (a)

  1.92  %    2.17  %    1.84  %    1.45  %    1.65  % 

NPL %

  5.83      5.51      5.40      5.35      5.14   

Charge-offs % (qtr. annualized)

  0.64      0.91      0.98      0.23      1.17           

Allowance / loans %

  4.90  %    4.86  %    4.79  %    4.54  %    4.60  % 

Allowance / charge-offs

  7.36  x    5.19  x    4.76  x    19.65  x    3.86  x         

Permanent Mortgage

Period-end loans ($ millions)

  $379      $393      $415      $427      $446      (4)%        (15)%    

30+ Delinq. % (a)

  2.50  %    1.40  %    2.88  %    1.59  %    1.21  % 

NPL %

  7.82      7.78      7.13      7.71      7.99   

Charge-offs % (qtr. annualized)

  0.59      1.44      0.29      0.15      1.46           

Allowance / loans %

  5.32  %    4.83  %    4.84  %    5.52  %    5.00  % 

Allowance / charge-offs

  8.82  x    3.30  x    16.57  x    35.18  x    3.36  x         

Other Consumer

Period-end loans ($ millions)

  $11      $12      $12      $15      $16      (8)%        (31)%    

30+ Delinq. % (a)

  1.40  %    2.48  %    2.24  %    1.79  %    1.95  % 

NPL %

  6.66      6.22      5.38      9.16      9.03   

Charge-offs % (qtr. annualized)

  9.24      8.21      6.74      7.81      6.83           

Allowance / loans %

  4.69  %    3.43  %    4.48  %    2.94  %    2.12  % 

Allowance / charge-offs

  0.49  x    0.41  x    0.63  x    0.36  x    0.30  x         

NM - Not meaningful

* Amount is less than one percent.
(a) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
(b) 3Q14 increase related to interest deferral elected by an insurance TRUPS; 2Q14 NPL decrease related to TRUPS sales.

 

20


FHN: PORTFOLIO METRICS

Unaudited

 

   
C&I Portfolio: $9.6 Billion (57.6% of Total Loans) as of March 31, 2015       
      % OS            

General Corporate, Commercial, and Business Banking Loans

     78%         

Loans to Mortgage Companies

     17%         

Trust Preferred Loans

     4%         

Bank Holding Company Loans

     1%         

Consumer Real Estate (primarily Home Equity) Portfolio: $4.9 Billion (29.4% of Total Loans)

 

Origination LTV and FICO for Portfolio as of March 31, 2015    Loan-to-Value
(excludes whole loan insurance)    <=60%        >60% - <=80%   >80% - 90%   >90%      

FICO score greater than or equal to 740

       11%            23 %       17 %       9%         

FICO score 720-739

       2%            4 %       4 %       3%         

FICO score 700-719

       1%            3 %       4 %       2%         

FICO score 660-699

       1%            4 %       3 %       3%         

FICO score 620-659

       1%            1 %       1 %       1%         

FICO score less than 620

       -%            1 %       - %       1%         

 

Origination LTV and FICO for Portfolio - Regional Bank as of March 31, 2015    Loan-to-Value
(excludes whole loan insurance)    <=60%   >60% - <=80%   >80% - 90%   >90%      

FICO score greater than or equal to 740

       12 %       24 %       18 %       11 %      

FICO score 720-739

       1 %       4 %       4 %       3 %      

FICO score 700-719

       1 %       3 %       2 %       2 %      

FICO score 660-699

       1 %       3 %       3 %       2 %      

FICO score 620-659

       1 %       1 %       1 %       1 %      

FICO score less than 620

       - %       1 %       - %       1 %      

 

Origination LTV and FICO for Portfolio - Non-Strategic as of March 31, 2015    Loan-to-Value
(excludes whole loan insurance)    <=60%   >60% - <=80%   >80% - 90%   >90%      

FICO score greater than or equal to 740

       8 %       21 %       15 %       5 %      

FICO score 720-739

       2 %       6 %       6 %       2 %      

FICO score 700-719

       2 %       6 %       6 %       2 %      

FICO score 660-699

       2 %       5 %       4 %       3 %      

FICO score 620-659

       - %       1 %       1 %       1 %      

FICO score less than 620

       - %       - %       - %       2 %      

 

Consumer Real Estate Portfolio Detail:    
          Origination Characteristics
        Vintage    Balances ($B)        W/A Age (mo.)        CLTV               FICO                % TN   % 1st lien    

pre-2003

   $0.1    158    78%   702    42%   30%

2003

   $0.1    141    77%   718    30%   36%

2004

   $0.3    128    80%   720    19%   27%

2005

   $0.5    116    81%   728    16%   16%

2006

   $0.5    105    79%   732    22%   18%

2007

   $0.5    93    81%   737    26%   19%

2008

   $0.2    82    75%   745    72%   50%

2009

   $0.1    70    72%   748    87%   57%

2010

   $0.2    56    80%   750    91%   73%

2011

   $0.4    44    77%   759    89%   86%

2012

   $0.7    33    77%   763    90%   91%

2013

   $0.6    22    78%   756    86%   85%

2014

   $0.6    9    81%   757    86%   89%

2015

   $0.1    1    77%   757    86%   91%

Total

   $4.9    66    79%   745    60%   57%

 

(a) 745 average portfolio origination FICO; 739 weighted average portfolio FICO (refreshed).

 

 

21


FHN NON-GAAP TO GAAP RECONCILIATION

Quarterly, Unaudited

 

           
(Dollars and shares in thousands, except per share data) 1Q15   4Q14   3Q14   2Q14   1Q14          

Tangible Common Equity (Non-GAAP)

(A) Total equity (GAAP)

  $2,499,257       $2,581,590       $2,614,908       $2,621,462       $2,541,792           

Less: Noncontrolling interest (a)

  295,431       295,431       295,431       295,431       295,431           

Less: Preferred stock

  95,624       95,624       95,624       95,624       95,624           

(B) Total common equity

  $2,108,202       $2,190,535       $2,223,853       $2,230,407       $2,150,737           

Less: Intangible assets (GAAP) (b)

  174,152       175,450       160,987       161,968       162,950           

(C) Tangible common equity (Non-GAAP)

  $1,934,050       $2,015,085       $2,062,866       $2,068,439       $1,987,787           

Tangible Assets (Non-GAAP)

(D) Total assets (GAAP)

  $25,715,888       $25,668,187       $23,985,691       $24,224,532       $23,946,116           

Less: Intangible assets (GAAP) (b)

  174,152       175,450       160,987       161,968       162,950           

(E) Tangible assets (Non-GAAP)

  $25,541,736       $25,492,737       $23,824,704       $24,062,564       $23,783,166           

Period-end Shares Outstanding

(F) Period-end shares outstanding

  233,499       234,220       235,249       237,147       236,586           

Tier 1 Common (Non-GAAP)

(G) Tier 1 capital (c) (d)

  $2,452,075       $2,813,503       $2,783,147       $2,751,933       $2,666,486           

Less: Noncontrolling interest - FTBNA preferred stock (a) (e)

  N/A       294,816       294,816       294,816       294,816           

Less: Preferred Stock

  N/A       95,624       95,624       95,624       95,624           

Less: Trust preferred (f)

  N/A       200,000       200,000       200,000       200,000           

(H) Tier 1 common (Non-GAAP)

  N/A       $2,223,063       $2,192,707       $2,161,493       $2,076,046           

Risk Weighted Assets

(I) Risk weighted assets (c) (d)

  $20,795,400       $19,452,656       $19,238,109       $19,400,096       $18,694,719           

Ratios

(C)/(E) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP)

  7.57    7.90    8.66    8.60    8.36 %       

(A)/(D) Total equity to total assets (GAAP)

  9.72    10.06    10.90    10.82    10.61 %       

(C)/(F) Tangible book value per common share (Non-GAAP)

  $8.28       $8.60       $8.77       $8.72       $8.40           

(B)/(F) Book value per common share (GAAP)

  $9.03       $9.35       $9.45       $9.41       $9.09           

(H)/(I) Tier 1 common to risk weighted assets (Non-GAAP) (c)

  N/A       11.43    11.40    11.14    11.10 %       

(G)/(D) Tier 1 capital to total assets (GAAP) (c)

  9.54    10.96    11.60    11.36    11.14 %       

Net Income Available to Common Shareholders Excluding Litigation Charges (Non-GAAP)

Income/(loss) before income taxes (GAAP)

  $(94,666)   

Less: Litigation and regulatory matters expense (GAAP)

  (162,500)   

Adjusted income/(loss) before income taxes (Non-GAAP)

  67,834    

Adjusted provision/(benefit) for income taxes (Non-GAAP) (g)

  21,754    

Adjusted net income/(loss) (Non-GAAP)

  46,080    

Net income attributable to noncontrolling interest (GAAP)

  2,758    

Preferred stock dividends (GAAP)

  1,550    

Adjusted net income/(loss) available to common shareholders (Non-GAAP)

  $41,772    

Adjusted diluted shares (thousands) (Non-GAAP) (h)

  235,120    

Adjusted diluted EPS (Non-GAAP)

  $0.18                            

Certain previously reported amounts have been reclassified to agree with current presentation.

(a) Included in Total equity on the Consolidated Balance Sheet.
(b) Includes goodwill and other intangible assets, net of amortization.
(c) Current quarter is an estimate and reflects revisions to regulatory capital definitions under the new Basel III risk-based capital rules as phased-in.
(d) Defined by and calculated in conformity with bank regulations.
(e) Represents FTBNA preferred stock included in noncontrolling interest.
(f) Included in Term borrowings on the Consolidated Balance Sheet.
(g) Calculated using an effective tax rate of 32.07 percent.
(h) Because FHN recognized a net loss available to common shareholders in first quarter 2015, potentially issuable shares are excluded from diluted shares because they are antidilutive. Excluding the litigation charge, FHN would have recognized net income available to common shareholders. As a result, adjusted shares are presented in order to include the dilute impact of potentially issuable shares.

 

22


FHN GLOSSARY OF TERMS

 

 

 

 

Average Assets for Leverage: The amount of assets a company uses to calculate the leverage ratio, which includes average total assets less disallowed portions of goodwill, other intangibles, and deferred tax assets, as well as certain other regulatory adjustments made to Tier 1 capital.

Common Equity Tier 1: A measure of a company’s capital position under U.S. Basel III capital rules first applicable to FHN in 2015, which includes common equity less goodwill, other intangibles and certain other required regulatory deductions as defined in those rules. Common Equity Tier 1 capital under U.S. Basel III in 2015 is not the same as the non-regulatory Tier 1 Common capital commonly used prior to 2015; comparisons between the two are not meaningful.

Core Businesses: Management considers regional banking, capital markets, and corporate as FHN’s core businesses. Non-strategic has significant legacy assets and operations that are being wound down.

Fully Taxable Equivalent (“FTE”): Reflects the amount of tax-exempt income adjusted to a level that would yield the same after-tax income had that income been subject to taxation.

Tier 1 Capital Ratio: Ratio consisting of shareholders’ equity adjusted for certain unrealized gains/(losses) on available-for-sale securities, reduced by goodwill, certain other intangible assets, the disallowable portion of mortgage servicing rights and other disallowed assets divided by risk-adjusted assets. The components of Tier 1 capital, including the risk-adjustment of assets, changed significantly for FHN beginning in 2015 so that comparisons of a Tier 1 capital ratio after 2014 with a ratio prior to 2015 may not be meaningful.

Tier 1 Common: A measure of a company’s capital position associated with U.S. capital rules applicable to FHN prior to 2015, which includes Tier 1 capital as then defined less preferred stock amounts.

Troubled Debt Restructuring (“TDR”): A restructuring of debt whereby a creditor for economic or legal reasons related to the borrower’s financial difficulties grants a concession to the borrower that it would not otherwise consider. Such concession is granted in an attempt to protect as much of the creditor’s investment as possible by increasing the probability of repayment.

 

 

Key Ratios

 

Return on Average Assets: Ratio is annualized net income to average total assets.

Return on Average Common Equity: Ratio is annualized net income available to common shareholders to average common equity.

Fee Income to Total Revenue: Ratio is fee income excluding securities gains/(losses) to total revenue excluding securities gains/(losses).

Efficiency Ratio: Ratio is noninterest expense to total revenue excluding securities gains/(losses).

 

 

Asset Quality - Consolidated Key Ratios

 

NPL %: Ratio is nonperforming loans in the loan portfolio to total period-end loans.

NPA %: Ratio is nonperforming assets related to the loan portfolio to total period-end loans plus foreclosed real estate and other assets.

Net charge-offs %: Ratio is annualized net charge-offs to total average loans.

Allowance / loans: Ratio is allowance for loan losses to total period-end loans.

Allowance / NPL: Ratio is allowance for loan losses to nonperforming loans in the loan portfolio.

Allowance / NPA: Ratio is allowance for loan losses to nonperforming assets related to the loan portfolio.

Allowance / charge-offs: Ratio is allowance for loan losses to annualized net charge-offs.

 

 

 

23



First Horizon National Corporation
First Quarter 2015 Earnings
April 17, 2015
Exhibit 99.2


2
Portions of this presentation use non-GAAP financial information. Each of those portions is so noted, and a
reconciliation
of
that
non-GAAP
information
to
comparable
GAAP
information
is
provided
in
a
footnote
or
in
the
appendix at the end of this presentation.
This presentation contains forward-looking statements, which may include guidance, involving significant risks and
uncertainties
which
will
be
identified
by
words
such
as
“believe”,“expect”,“anticipate”,“intend”,“estimate”,
“should”,“is
likely”,“will”,“going
forward”
and
other
expressions
that
indicate
future
events
and
trends
and
may
be
followed by or reference cautionary statements.
A number of factors could cause actual results to differ materially
from those in the forward-looking information.
These factors are outlined in our recent earnings and other press
releases
and
in
more
detail
in
the
most
current
10-Q
and
10-K.
FHN
disclaims
any
obligation
to
update
any
such
factors or to publicly announce the result of any revisions to any of the forward-looking statements included herein
or therein to reflect future events or developments.


Building Franchise Value
Executing “Blue Chip”
Priorities
Being easy to do business with
Providing differentiated customer service
Using the Bonefish to drive profitability
3


4
All
Non-GAAP
numbers
are
reconciled
in
the
appendix.
1
Regional
Banking
pre-tax
pre-provision
net
revenue
is
a
Non-GAAP
number.
2
EPS
and
expenses
excluding
litigation
charge
are
Non-GAAP
numbers.
3
Revenue
excluding
positive
impact
of
mortgage
servicing
sale
was
$278mm
in
1Q14
and
excludes
$20mm
of
previously
unrecognized
servicing
fees
associated
with
the
MSR
sale.
This
number
is
Non-GAAP.
Regional Bank Pre-Tax, Pre-Provision Net Revenue (PPNR) up 13% year over
year
1
Regional Bank average loan growth of 14% year over year
Regional Bank average core deposits up 9% year over year
Capital markets’
pre-tax income increased ~50% year over year
EPS,
excluding
litigation
charge,
at
$0.18
2
First Quarter 2015 Accomplishments
Core Business
Strength
Improving
Productivity
& Efficiency
Deploying Capital
Prudently
Reached an agreement in principle with DOJ/HUD to settle potential claims
on FHA loans
Improved Regional Bank efficiency ratio 234 bps year over year
Revenues, excluding positive impact of mortgage servicing sale, up 3% year
over year
3
Expenses,
excluding
litigation
charge,
declined
2%
year
over
year
2
Repurchased $16 million or 1 million common shares in 1Q15
TrustAtlantic acquisition progressing


FINANCIAL RESULTS
5


1Q15 Consolidated Financial Results
6
Net Interest Income
Fee Income
Expense
NIAC
Excluding
Litigation
Charge
(Non-GAAP)
1
$ in millions, except EPS
Financial Results
1Q15
$157
Loan Loss Provision
$130
$376
$5
$(77)
$(0.33)
1Q15 vs
+$5
-$16
+$158
-$5
-$122
-$0.52
4Q14
$159
$120
$207
$6
$47
$0.20
1Q14
$152
$146
$218
$10
$46
$0.19
4Q14
-$2
+$10
+$169
-$1
-$124
-$0.53
1Q14
Actuals
Revenue,
excluding
positive
impact
of
mortgage
servicing
sale,
up
3%
linked
quarter
and
year
over
year
2
Expense,
excluding
litigation
charge,
up
3%
linked
quarter
and
down
2%
year
over
year
1
Total average loans up 2% linked quarter and 7% year over year
Total average core deposits up 7% linked quarter and 11% year over year
Net interest income slightly down linked quarter due to fewer days in 1Q15 but up 3% year over year
Loan
loss
provision
of
$5mm
with
NCOs
of
$9mm
in
1Q15
vs
$6mm
of
provision
and
$12mm
of
NCOs
in
4Q14
Common
Equity
Tier
1
(CET1)
of
10.3%
3
Net Income Available to Common Shareholders (NIAC)
Expense
Excluding
Litigation
Charge
(Non-GAAP)
1
$214
EPS
$42
EPS
Excluding
Litigation
Charge
(Non-GAAP)
1
$0.18
Adjusted Financial Results
$46
$0.19
$207
$47
$0.20
$218
-$4
-$4
-$0.01
+$7
-$5
-$0.02
EPS
excluding
DOJ/HUD
settlement
is
based
on
diluted
share
count
of
235mm
FHN
would
have
reported
assuming
net
income
available
to
common
instead
of
net
loss
available
to
common.
Numbers
may
not
add
to
total
due
to
rounding.
1
Expense,
NIAC
and
EPS
excluding
litigation
charge
are
Non-GAAP
numbers
and
a
reconciliation
is
provided
in
the
appendix.
3
1Q15
Common
Equity
Tier
1
is
an
estimate.
This
number
is
Non-GAAP.
2
Revenue
excluding
positive
impact
of
mortgage
servicing
sale
was
$278mm
in
1Q14
and
excludes
$20mm
of
previously
unrecognized
servicing
fees
associated
with
the
MSR
sale.


1Q15 Segment Highlights
7
1
Corporate and Consolidated show net income available to common, which reflects $3mm of noncontrolling interest and $1.6mm of preferred stock dividends in each quarter.
2
Segment
EPS
impacts
are
Non-GAAP
numbers
and
reconciled
in
the
table.
EPS
impacts
are
calculated
using
the
1Q15
net
income
column
divided
by
the
233
million
diluted
shares
outstanding.
3
Regional Banking pre-tax pre-provision net revenue is a Non-GAAP number and a reconciliation is provided in the appendix.
Drivers and Impacts
Net Income
$ in millions,
except EPS
1Q15
Per Share
Impact
Regional
Banking
Capital
Markets
Corporate
Non-
Strategic
Total
4Q14
$51
$4
$(13)
$5
$47
1Q14
$36
$5
$(8)
$12
$46
1Q15
$48
$7
$(18)
$(114)
$(77)
$0.20
$0.03
$(0.07)
$(0.49)
$(0.33)
Fixed income ADR of $877k in 1Q15 vs $630k in 4Q14
Expenses up 18% linked quarter and 4% year over year, primarily due to
variable compensation
1Q15 included $163mm expense related to legal matters
Loan loss provision of $0.1mm in 1Q15 vs $0.4mm in 4Q14 and credit of
$3mm in 1Q14
PPNR up 13% year over year
NII up 9% year over year, but down 2% linked quarter primarily due to
day count
Average loans up 3% linked quarter and 14% year over year
1Q15 provision of $5mm vs 4Q14 provision of $6mm
Tax benefit of $12mm in 1Q15 vs $20mm in 4Q14
Security gains of $0.3 in 1Q15 vs $6mm in 1Q14
Numbers may not add to total due to rounding.
1
2
3
1
1


Regional Banking Financial Results
8
Net Interest Income
Fee Income
Expense
$ in millions
Financial Results
1Q15
$154
Loan Loss Provision
Pre-Provision Net Revenue
1
$60
$136
$79
$5
1Q15 vs
+$12
$0
+$3
+$9
-$8
4Q14
$158
$64
$138
$84
$6
1Q14
$142
$60
$133
$69
$13
4Q14
-$3
-$4
-$2
-$6
-$1
1Q14
Actuals
PPNR and net income up 13% and 31%, respectively, year over year, but down linked quarter largely due
to seasonal factors
Average loans increased 3% linked quarter and 14% year over year
Average core deposits up 6% linked quarter and up 9% year over year
Revenues down 3% linked quarter, but up 6% year over year
NII down 2% from fewer days in quarter, but up 9% year over year
Fee income down 6% linked quarter largely due to seasonal decline in deposit, brokerage and trust fees
Efficiency ratio improvement of 234
bps
year over year
1Q15 net charge-offs of $6mm,
or annualized 0.17%
of average loans, compared to $7mm, or annualized
0.20%, in 4Q14
Numbers may not add to total due to rounding.
Net Income
$48
$51
$36
+11
-$3
1
Regional Banking pre-tax pre-provision net revenue is a Non-GAAP number and a reconciliation is provided in the appendix.


9
1
Average Regional Banking loan growth from 4Q14 to 1Q15.
Profitable Growth Opportunities: Regional Banking
Double Digit Loan Growth Year over Year
Regional
Banking
Loan
Growth
by
Lending
Area
1
Regional Banking average loan growth of 14% year
over year and 3% linked quarter
Commercial loans up 15% year over year and 4%
linked quarter
Commercial loan utilization rate up ~300bps       
linked quarter
Continued growth in specialty lending areas
Asset-based lending growth due to funding of
commitments
Loans to mortgage companies increase driven by
higher refi activity
+3%
Loans to Mortgage Companies
Commercial
Asset-Based Lending
Regional
Bank
Areas
of
Linked
Quarter
Loan
Growth
1
Commercial
Business
PC/WM
Retail
Loans to
Mortgage Cos
CRE
ABL
Other
Specialty
$3.26B
$3.39B
$0.76B
$0.76B
$1.86B
$1.88B
$2.13B
$2.11B
$0.93B
$1.04B
$1.24B
$1.24B
$1.37B
$1.44B
$1.58B
$1.66B
4Q14
1Q15
$0
$2
$4
$6
$8
$10
$12
$14B
12%
5%
4%


10
FTN Financial Capital Markets
Capital Markets’
Distribution Platform Demonstrates Strength
$750mm
Capital Markets Revenue and Expense
Fixed income average daily revenue at $877k in 1Q15, up
~40% linked quarter
Increased flows due to higher rate volatility
Expenses up linked quarter due to higher variable
compensation and seasonal FICA expense in 1Q15
Focused on investing in extensive fixed income distribution
platform:
Expansion of municipal products platform
Continued development of public finance capability
Numbers may not add to total due to rounding.
$3mm
Left Axis:
Right Axis:
NII
Fee Income
$ in millions, except ADR
Financial Results
1Q15
$4
Pre-Tax Income
$62
$11
1Q15 vs
+$1
+$5
+$4
4Q14
$4
$49
$6
1Q14
$3
$57
$8
4Q14
+$1
+$13
+$5
1Q14
Actuals
Expense
$55
+$2
$46
$53
+$8
Average Daily Revenue (ADR)
$877k
$630k
$813k
+$64k
+$247k
$0
$1
$2
$0
$250
$500
Revenue
Expense
ADR
2
1Q15 annualized.
These are Non-GAAP numbers and a reconciliation is provided in the appendix.
1
2011 excludes $36.7mm of expense associated with the Sentinel settlement. 2014 excludes the $47mm recovery of the Sentinel settlement expense and legal fees.


11
Numbers may not add to total due to rounding.
1
NII sensitivity analysis uses FHN’s balance sheet as of 1Q15 and is Non-GAAP. Long End +50bps assumes yield curve spreads widen ~50bps. Long end -50bps assumes yield  curve spreads compress
~50bps. Bps impact assumes increase in Fed Funds rate. Non-Strategic is interest rate neutral, thus nearly all the sensitivity impact would be allocated to the Core Businesses.
Net Interest Income Sensitivity Impact
1
NII and Net Interest Margin
Balance Sheet Positioned to Benefit from Rising Rates
Average core deposits up 7% linked quarter, 11% YOY
Regional Banking average deposit rate paid of 14bps in
1Q15 and 4Q14
Floating rate loans comprise 66% of loan portfolio vs
fixed rate loans at 34%
Attractive and stable low-cost funding mix in Regional
Banking with 58% DDA and interest checking deposits
Average Deposit Growth
15%
1Q15
$157
2.74%
NII and NIM Change Drivers
NII
NIM 
($ in millions)
4Q14
$159
2.86%
Deposit Growth/Higher Fed Balances
Loan Fees & Cash Basis Income/Other
Commercial Loan Yields
Reduction of Non-Strategic Loans
Pre-Funding
of
Debt
Maturity
Increased Commercial Loan Volumes
+4%
+6%
+9%
+14%
Linked Quarter:
Year Over Year:
Consumer
Consumer
Commercial
Commercial
Fewer Days in Quarter
-$0.8
-5bp
-1bp
-$0.5
-1bp
$0.5
-$1.2
-6bp
1bp
$1.9
-
-
-$2.1
-
-1.7%
-$11mm
+1.5%
+$9mm
+6.3%
+$40mm
+12.2%
+$78mm
Long End
-50bps
Long End
+50bps
+100bps
+200bps
-3%
0%
3%
6%
9%
12%


12
Delivering Efficiencies
Expenses down 2% year over year
Annualized noninterest expense declined 22% since 2012
Ongoing efficiency opportunities:
Continued wind-down of Non-Strategic segment (decreased legal/professional fees, credit, and repurchase
expense)
Streamline end-to-end processes
Reduce corporate real estate footprint
Right-size branch network as consumer usage shifts to FHN’s expanded digital banking platforms
All
Non-GAAP
numbers
are
reconciled
in
the
appendix.
1
Expenses
excluding
litigation
charge
is
a
Non-GAAP
number.
2
1Q12 excludes ~$49mm in mortgage repurchase provision. 1Q13 excludes ~$5mm in litigation expense. 1Q14 excludes ~$0.1mm in litigation expense,
and 1Q15 excludes ~$163mm in litigation expense. These are Non-GAAP numbers .
3
Non-Strategic excludes ~$0.1mm and ~$163mm in litigation expense in 2014 and 2015 respectively. These are Non-GAAP numbers.
Annualized Noninterest Expense
-22%
Noninterest Expense Trends by Segment 1Q14-1Q15
Regional Banking
Capital Markets
Corporate
Non-Strategic
$1,090mm
$941mm
$872mm
$855mm
1Q12
1Q13
1Q14
1Q15
-41%
-
18%
4%
2%
Annualized
Annualized
Annualized
Annualized
3
2
1
2


13
Non-Performing Assets
Net Charge-Offs
Asset Quality Trends
Continued Improvement in Credit Trends
Reserves
Net charge-offs of $9mm in 1Q15, compared to
$12mm in 4Q14 and $17mm in 1Q14
Annualized net charge-off ratio improvement of 7
bps to 0.23% from 4Q14
NPL levels at $207mm, down 2% linked quarter and
32% year over year
Commercial
NPLs
down
2%
linked
quarter
and 
30% year over year
Numbers may not add to total due to rounding.
1
Net charge-off % is annualized.
$0
$100
$200
$300
1Q14
2Q14
3Q14
4Q14
1Q15
NPLs
NPLs Held for Sale
ORE
1.00%
1.25%
1.50%
1.75%
2.00%
$200
$220
$240
1Q14
2Q14
3Q14
4Q14
1Q15
Reserves $
Reserves / Loans %
0.00%
0.13%
0.25%
0.38%
0.50%
$0
$5
$10
$15
1Q14
2Q14
3Q14
4Q14
1Q15
NCOs $
Provision $
NCO %¹
$400mm
$260mm
$20mm


Tier 1 Common to Common Equity Tier 1:
Remain Well Capitalized
14
Numbers
may
not
add
to
total
due
to
rounding
1
4Q14
Tier
1
Common
is
a
Non-GAAP
number
and
a
reconciliation
is
provided
in
the
appendix.
2
1Q15
Common
Equity
Tier
1
is
an
estimate.
4Q14
Tier 1
Common
1
1Q15
Common
Equity
Net Retained 
Income
Excluding
After-tax
DOJ/HUD
Settlement
Phase-in of         
Basel III
11.4%
-10bp
-60bp
10.3%
+10bp
DOJ/HUD
Settlement
Transition
to
Common
Equity
Tier
1
(CET1)
from
Tier
1
Common
due
to
phase-in
of
Basel
III
Utilizing excess capital via earning asset growth
Strong capital ratios provide continued flexibility
RWA Increase
from Earning
Asset Growth /
Other
-50bp
Tier 1
2
0%
2%
4%
6%
8%
10%
12%


15
1Q15
Consolidated
Core Businesses
4
Long-Term Targets
ROTCE
1,2
8.30%
8.99%
15.0 –
20.0%
ROA
1,2
0.73%
0.73%
1.25 -
1.45%
NIM
2.74%
2.81%
3.50 -
4.00%
CET1 (Consolidated) &
Allocated CET1 (Core)
10.3%
9.7%
8.0 –
9.0%
NCO / Average Loans
0.23%
0.17%
0.30 -
0.70%
Fee Income / Revenue
45%
47%
40 -
50%
Efficiency Ratio
75%
76%
60 -
65%
Building Long-Term Earnings Power: Bonefish Targets
Focused on Growing Our Company Selectively and Profitably While Positioning
Our Balance Sheet for Sustainable, Higher Returns in the Long Term
Annualized Net Charge-Offs
0.30% -
0.70%
% Fee Income
40% -
50%
Efficiency Ratio
60% -
65%
Return on Tangible
Common Equity
15% -
20%
Equity / Assets
Risk Adjusted Margin
Total Assets
Earning Assets
Pre-tax Income
Tax Rate
Common Equity
Tier 1
8% -
9%
Return on Assets
1.25% -
1.45%
Net Interest Margin
3.50% -
4.00%
1
3
1
2
2
Consolidated ROTCE, ROA and Efficiency Ratio are adjusted for litigation expense and are Non-GAAP numbers. 
3
Common Equity Tier 1 (CET1): Current quarter is an estimate. Allocated CET1 refers to implied CET1 of ~9.7% in core businesses.
4
Core Businesses include Regional Banking, Capital Markets, and Corporate segments. Core data is Non-GAAP.
All Non-GAAP numbers are reconciled in the appendix. ¹ROTCE, ROA, NIM, and NCO / Average Loans are annualized.


16
Closing the Gap to Bonefish Targets
Building a Foundation for Long-Term Earnings Power
Current
ROTCE /
EPS
Rise in
Interest
Rates
1
Target
Bonefish
ROTCE /
EPS
Growth
Opportunities
Economic
Profit
Improvement
Optimize/
Redeploy
Capital
Continued
Efficiencies
Non-Strategic
Wind-Down
Infrastructure
Reductions
Established
Market
Profitability/
Growth
Product/
Relationship
Profitability
Improvement
Sales
Productivity
Improvement
Process
Improvements
Branch
Network
Rationalization
Dividends
Share
Buybacks
M&A
Latent Income
Embedded in
Asset-Sensitive
Balance Sheet
Specialty
Lending
Mid-Atlantic 
Middle TN
Houston
Wealth /
Investments
Municipals
(FTN
Financial)
1
Rise in interest rates represents cumulative growth rate in net interest income over a 3-year strategic time horizon.
Chart illustrates a quantified path to long-term goals; it contains no forecasts.
0.5% to 1.0%
1.0% to 1.5%
1.0% to 1.5%
1.0% to 1.5%
1.0% to 2.5%
3.0% to 3.8%
Latent Income
Embedded in
Fixed Income
Platform
Capacity
ADR at
$1.0-$1.5mm
Increased
Capital
Markets
Activity


17
Building a Foundation for Attractive Long-Term Earnings Power
Proven execution capabilities
Unique size, scope, and strengths
Focused
on
efficiency,
productivity,
economic
profitability,
and
growth
opportunities
Organizational alignment on the path to achieving long-term bonefish profitability
Breadth and depth of talent that will be able to profitably run and grow the company
Successfully Executing on Key Priorities
FHN is Well Positioned for Attractive Long-Term Earnings Power


APPENDIX
18


Notable Items
19
Impact to EPS²
Previously Unrecognized Servicing Fees
Associated with the MSR Sale
$12.3mm
After-Tax Amount¹
$0.05
Securities Gain on an Equity Investment
$3.4mm
$0.01
Notable Item
Pre-Tax Amount
$20.0mm
$5.6mm
Refer to financial supplements for other notable items. 
1
After-tax
impact
assumes
a
tax
rate
of
~38.6%
in
1Q14,
~33.3%
in
2Q14,
~37%
in
3Q14,
and
~23.6%
in
1Q15,.
2
EPS impact calculated by dividing the after-tax impact by the 237mm diluted shares outstanding in 1Q14-3Q14.
3
EPS impact of agreement in principle with DOJ/HUD is reconciled in the appendix.
Lease Abandonment & Other Restructuring
Charges
($3.5)mm
$(0.01)
$(5.7)mm
Held-for-Sale (Primarily NPL) Portfolio Valuation
Adjustment
$5.5mm
$0.02
$8.2mm
Net Impact from Resolution/ Collapse of On-
Balance Sheet Consumer Securitizations
($3.9)mm
$(0.02)
$(6.4)mm
Litigation Expense Recovery
$31.4mm
$0.13
$47.1mm
Gains on Sales of Held-for-Sale Loans in Non-
Strategic Portfolio
$25.2mm
$0.11
$39.7mm
Loss Accruals Related to Legal Matters
$(31.5)mm
$(0.13)
$(50.0)mm
Litigation Expense Recovery
$9.5mm
$0.04
$15.0mm
$(35.0)mm
$(22.0)mm
$(0.09)
Net Loss Accruals Related to Legal Matters
None
Agreement in principle with DOJ/HUD to settle
potential claims on FHA loans
$(162.5)mm
$(124.1)mm
$(0.51)³


20
1Q15 Credit Quality Summary by Portfolio
Numbers
may
not
add
to
total
due
to
rounding.
Data
as
of
1Q15.
NM:
Not
meaningful.
($ in millions)
CRE
HE &
HELOC
Other
1
Total
Permanent
Mortgage
Commercial
(C&I & Other)
CRE
HE &
HELOC
Permanent
Mortgage
Other
2
Total
Period End Loans
$9,185
$1,320
$3,358
$337
$14,200
$123
$453
$1
$1,565
$379
$11
$16,732
30+ Delinquency
0.07%
0.32%
0.55%
1.29%
0.24%
3.41%
0.08%
14.87%
1.92%
2.50%
1.40%
0.47%
Dollars
$7
$4
$18
$4
$34
$4
$0
$0
$30
$9
$0
$78
NPL %
0.24%
1.00%
0.84%
0.15%
0.45%
2.29%
2.68%
18.31%
5.83%
7.82%
6.66%
1.20%
Dollars
$22
$13
$28
$0
$64
$3
$12
$0
$91
$30
$1
$200
Net Charge-offs
3
%
0.08%
0.03%
0.15%
3.22%
0.17%
NM
NM
2.64%
0.64%
0.59%
9.24%
0.23%
Dollars
$2
$0
$1
$3
$6
NM
$0
$0
$3
$1
$0
$9
Allowance
$63
$18
$33
$13
$126
NM
$5
$0
$77
$20
$1
$228
Allowance / Loans %
0.68%
1.33%
0.97%
3.88%
0.89%
NM
1.09%
8.22%
4.90%
5.32%
4.69%
1.36%
Allowance / Charge-offs
9.42x
52.33x
6.45x
1.16x
5.41x
NM
NM
1.06x
7.36x
8.82x
0.49x
6.17x
Regional Banking
Corporate
4
Non-Strategic
Commercial
(C&I & Other)
1
Creditcard,
Permanent
Mortgage,
and
Other.
2
Credit
card,OTC,
and
Other
Consumer.
3
Net
charge-offs
are
annualized.
4
Exercised
clean-up
calls
on
jumbo
securitizations
in
1Q13,
3Q12,
2Q11,
and
4Q10,
which
are
now
on
balance
sheet
in
the
Corporate
segment.


21
C&I and CRE Portfolio Detail
$9.6B C&I portfolio, diversified by industry, managed
primarily in Regional Banking
$1.3B CRE portfolio, comprising 8% of period-end
consolidated loans
Commercial (C&I and CRE) net charge-offs were $2mm
for the quarter
Charge-offs were $4.3mm with recoveries of
$2.6mm
Data as of 1Q15. Numbers may not add to total due to rounding.
CRE: Loan Type
CRE: Collateral Type
C&I: Loans to Mortgage Companies
Construction
29%
Land
4%
Mini-
Perm/Non-
Construction
66%
Retail
25%
Multi-Family
31%
Office
14%
Industrial
11%
Land
4%
Other
6%
Hospitality
8%
$0.0
$0.4
$0.8
$1.2
$1.6
1Q14
2Q14
3Q14
4Q14
1Q15
Period End
Average


22
Consumer Portfolio Overview
Data as of 1Q15. Numbers may not add to total due to rounding.
HELOC Draw vs
Repayment Balances
Percent of Home Equity Portfolio:
Months Left in Draw Period
Home Equity Portfolio Characteristics
Home Equity Geographic Distribution
Non-Strategic Consumer
Real Estate Run-Off
First
Second
Total
Balance
$2.8B
$2.1B
$4.9B
Original FICO
753
735
745
Refreshed FICO
752
723
739
Original CLTV
77%
81%
79%
Full Doc
93%
74%
85%
Owner Occupied
93%
95%
94%
HELOCs
$0.7B
$1.7B
$2.4B
Weighted Average
HELOC Utilization
47%
56%
54%
22%
15%
17%
8%
5%
32%
0%
5%
10%
15%
20%
25%
30%
35%
0-12
13-24
25-36
37-48
49-60
>60
$1.7
$0.7
$0.0
$0.5
$1.0
$1.5
In Draw
In
Repayment
19%
19%
21%
25%
28%
15%
18%
21%
24%
27%
30%
$0.0
$0.5
$1.0
$1.5
$2.0
1Q14
2Q14
3Q14
4Q14
1Q15
Period End Balance
Constant Pre-Payment Rate (Right Axis)
Core
Banking
Customers
TN
60%
CA
8%
VA
3%
GA
3%
Other
26%
$2.0B
$2.5B


23
Agency & Non-Agency Update
Repurchase Resolution Agreements with Both GSEs
Data
as
of
1Q15.
Numbers
may
not
add
to
total
due
to
rounding.
1
Based
on
UPB.
The
pipeline
represents
active
investor
claims
and
mortgage
insurance
(MI)
cancellations
under
review,
both
of
which
could occur on the same loan. Excludes MI cancellation notices that have been reviewed and coverage has been lost. MI cancellations that have resulted in lost coverage are included in management’s
assessment
of
the
adequacy
of
repurchase
reserves.
1Q14,
2Q14,
3Q14,
4Q14,
and
1Q15
resolutions
include
$13.7mm,
$6.5mm,
$4.8mm,
$4.2mm,
and
$5.0mm
in
other
claims,
respectively,
that
pose
no risk to the repurchase reserve but require formal acknowledgment with Fannie.
Total
Pipeline
of
Repurchase
Requests
1
$300mm
Mortgage Repurchase Reserve
($ in millions)
Beginning Balance
Net Realized Losses
Ending Balance
Provision
2Q14
$145
$(4)
$141
$0
3Q14
$141
$(13)
$125
$(4)
4Q14
$125
$(6)
$119
$0
1Q14
$165
$(20)
$145
$0
Other Whole Loan Sales and Non-Agency
Represent 48% of all active repurchase/make whole
requests in 1Q15 pipeline
Some non-Agency FHN loans were bundled with other
companies’
loans and securitized by the purchasers
A trustee for a bundler has commenced a legal
action seeking repurchase of FHN loans
Certain purchasers have requested indemnity
related to FHN loans included in their
securitizations
Loan file review process regarding certain bundled
FHN loans has been initiated
1Q15
$119
$(3)
$116
$0
Loan Sales
$0
$2
$0
$0
$0
$0
$150
1Q14
2Q14
3Q14
4Q14
1Q15
GSE New Requests
Other New Requests
Resolved
Pipeline


FH Proprietary Securitizations Litigation
Certificate Breakdown
24
$627mm
FHAMS 2005-FA10
($ in millions)
Deal
FHASI 2007-AR2
1
(Schwab)
Senior
$50.0
$33.4
$14.3
$12.6
$1.7
$2.3
FHAMS 2006-FA6
(FDIC Alabama)
Senior
$11.1
$3.4
$6.2
$5.1
$1.1
$1.5
FHAMS 2006-FA6
(FDIC Alabama)
Senior
$15.2
$5.1
$8.9
$7.2
$1.7
$1.3
FHAMS 2006-FA7
(FDIC Alabama)
Senior
$20.7
$6.7
$11.4
$9.4
$2.0
$2.6
FHAMS 2007-FA4
1
(FDIC Alabama)
Senior
$14.4
$4.1
$8.3
$6.7
$1.6
$1.9
FHAMS 2007-FA1
(FDIC New York)
Senior
$44.5
$15.1
$23.2
$18.9
$4.3
$6.2
FHAMS 2007-FA2
(FDIC New York)
Senior
$34.9
$12.5
$17.9
$14.4
$3.5
$4.5
FHAMS 2005-FA8
(FHLB Indemnification)
Senior
$100.0
$79.6
$19.9
$17.7
$2.2
$0.5
FHAMS 2007-FA3
(MetLife Indemnification)
Senior
$103.0
$61.6
$33.0
$27.1
$5.9
$8.5
2
(Royal Park Indemnification)
Senior
$100.0
$66.3
$29.6
$26.1
$3.5
$4.1
FHAMS 2006-FA2
1
(Royal Park Indemnification)
Senior
$30.0
$23.5
$5.3
$4.5
$0.8
$1.2
FHAMS 2005-FA9
(Integra REC Indemnification)
Junior
$2.3
$0.1
$0.0
$0.0
$0.0
$2.2
FHAMS 2006-FA8
(Integra REC Indemnification)
Senior
$101.5
$63.4
$30.5
$25.3
$5.1
$7.6
Total
$627.5
$374.7
$208.4
$175.1
$33.3
$44.4
Cumulative
Loss
Certificate
Original
UPB
Paid
Off
Current
UPB
Performing
UPB
60D+
Delinquent
Paid Off
60%
Performing UPB
28%
60D+ Delinquent
³
5%
Cumulative Loss 7%
Numbers and percentages may not add to total due to rounding. Data source: March 2015 Trustee Reports.
Table excludes three FHAMS certificates at issue in the Tennessee CRS matter as to which FHN is not a defendant but indemnity recently has been demanded.
1
The complainants only purchased a portion of these tranches. Original UPB estimated based on the purchase price stated in the complaints.  All other metrics prorated based on the ratio of
purchase price to the total original UPB of the entire tranche. ²Royal Park is asking for indemnification on $100mm of the $190mm tranche as stated in the indemnification request. ³60D+
Delinquent defined as a delinquency status of 60 days or more and also bankruptcies, foreclosures and REO in such status for 60 days or more.


Reconciliation to GAAP Financials
25
Slides in this presentation use non-GAAP information of risk weighted assets, tangible common equity, net income, non-controlling
interest,
average
common
equity,
intangibles,
and
various
ratios
using
those
measures.
That
information
is
not
presented
according
to
generally
accepted
accounting
principles
(GAAP)
and
is
reconciled
to
GAAP
information
below.
Numbers may not add to total due to rounding.
1
Core Businesses include the Regional Banking, Capital Markets, and Corporate segments.
($ in millions)
1Q15
Core Businesses Return On Tangible Common Equity
(Segment equity based on internal risk-based methodology)
Corporate Average Equity (GAAP)
$1,145
Less: Corporate Non-Controlling Interest (GAAP)
$295
Less: Corporate Preferred Stock (GAAP)
$96
Corporate Average Common Equity (GAAP)
$754
Regional Banking Average Common Equity (GAAP)
$936
Capital Markets Average Common Equity (GAAP)
$156
Core
Businesses
Average
Common
Equity
(Non-GAAP)
1
$1,846
Non-Strategic Average Common Equity (GAAP)
$371
FHN Average Common Equity (GAAP)
$2,216
Regional Banking Average Intangible Assets (GAAP)
$62
Capital Markets Average Intangible Assets (GAAP)
$113
Coporate Average Intangible Assets (GAAP)
$0
Core
Businesses
Average
Intangible
Assets
(Non-GAAP)
1
$175
Non-Strategic Average Intangible Assets (GAAP)
$0
FHN Average Intangible Assets (GAAP)
$175
FHN Average Common Equity (GAAP)
$2,216
Less: FHN Average Intangible Assets (GAAP)
$175
FHN Average Tangible Common Equity (Non-GAAP)
$2,042
Core
Businesses
Average
Common
Equity
(Non-GAAP)
1
$1,846
Less: Core Businesses Average Intangible Assets (Non-GAAP)
$175
Core Businesses Average Tangible Common Equity (Non-GAAP)
$1,671
Core Businesses Net Income Available to Common
Corporate Net Income (GAAP)
-$13
Less: Corporate Non-Controlling Interest (GAAP)
$3
Less: Corporate Preferred Stock Dividends (GAAP)
$2
Corporate Net Income Available to Common (GAAP)
-$18
Regional Banking Net Income Available to Common (GAAP)
$48
Capital Markets Net Income Available to Common (GAAP)
$7
Core Businesses Net Income Available to Common (Non-GAAP)
$37
Non-Strategic Net Income Available to Common (GAAP)
-$114
FHN Net Income Available to Common (GAAP)
-$77
Core Businesses Return on Tangible Common Equity
FHN Annualized Return on Average Common Equity (Non-GAAP)
-15.24%
Core Businesses Annualized Return on Average Common Equity (Non-GAAP)
8.99%
1
1
1
1
1
1
1


Reconciliation to GAAP Financials
26
Numbers may not add to total due to rounding.
1
Core Businesses include the Regional Banking, Capital Markets, and Corporate segments.
2
All else equal, a 200bps rate shock results in ~$78mm increase in Core Businesses annual NII (see slide 11), as Non-Strategic is interest rate neutral.
Slides in this presentation use non-GAAP information of expense, revenue, repurchase provision, and various ratios using one or
more of those measures. That information is not presented according to generally accepted accounting principles (GAAP) and is
reconciled to GAAP information below.
Net Interest Margin
($ in millions)
1Q15
4Q14
3Q14
2Q14
1Q14
Regional Banking Net Interest Income (GAAP)
$154
$158
$154
$149
$142
Regional Banking FTE Adjustment
$2
$2
$2
$2
$2
Regional Banking Net Interest Income Adjusted for Impact of FTE (Non-GAAP)
$157
$160
$156
$151
$144
Capital Markets Net Interest Income (GAAP)
$4
$4
$3
$3
$3
Capital Markets FTE Adjustment
$0
$0
$0
$0
$0
Capital Markets Net Interest Income Adjusted for Impact of FTE (Non-GAAP)
$5
$4
$3
$3
$4
Corporate Net Interest Income (GAAP)
-$16
-$18
-$14
-$12
-$10
Corporate FTE Adjustment
$0
$0
$0
$0
$0
Corporate Net Interest Income Adjusted for Impact of FTE (Non-GAAP)
-$16
-$18
-$14
-$12
-$10
Core Businesses Net Interest Income (Non-GAAP)
1
$143
$143
$143
$139
$136
Core Businesses FTE Adjustment (Non-GAAP)
1
$3
$3
$2
$2
$2
Core Businesses Net Interest Income Adjusted for Impact of FTE (Non-GAAP)
$145
$146
$145
$142
$138
Non-Strategic Net Interest Income (GAAP)
$14
$16
$17
$17
$17
Non-Strategic FTE Adjustment
$0
$0
$0
$0
$0
Non-Strategic Net Interest Income Adjusted for Impact of FTE (Non-GAAP)
$14
$16
$17
$17
$17
Consolidated Net Interest Income (GAAP)
$157
$159
$160
$157
$152
Consolidated FTE Adjustment
$3
$3
$2
$2
$2
Consolidated Net Interest Income Adjusted for Impact of FTE (Non-GAAP)
$159
$162
$162
$159
$154
Average Earning Assets
1Q15
Regional Banking Earning Assets (GAAP)
$13,561
Capital Markets Earning Assets (GAAP)
$2,147
Corporate Earning Assets (GAAP)
$5,162
Core Businesses Earning Assets (Non-GAAP)
$20,870
Non-Strategic Earning Assets (GAAP)
$2,604
Consolidated Earning Assets (GAAP)
$23,474
Core Businesses NIM with 200bps Rate Shock
1
1Q15
Annualized Core Businesses Net Interest Income Adjusted for Impact of FTE (Non-GAAP)
a
$589
Core Businesses Average Earning Assets (Non-GAAP)
b
$20,870
Core Businesses NIM (Non-GAAP)
a/b
2.81%
Core Businesses Additional Annual NII from a 200bps Rate Shock (Non-GAAP)
c
$78
Core Businesses NIM with 200bps Rate Shock (Non-GAAP)
(a+c)/b
3.19%
Annualized Consolidated Net Interest Income Adjusted for Impact of FTE (Non-GAAP)
d
$646
Consolidated Average Earning Assets (GAAP)
e
$23,474
Consolidated NIM (GAAP)
d/e
2.74%
Consolidated Additional Annual NII from a 200bps Rate Shock (Non-GAAP)
f
$78
Consolidated NIM with 200bps Rate Shock (Non-GAAP)
(d+f)/e
3.09%
²
²
1
1


Reconciliation to GAAP Financials
27
Numbers may not add to total due to rounding.
1
Includes goodwill and other intangible assets, net of amortization.                             
2
Current quarter is an estimate.                             
Slides in this presentation use non-GAAP information of expense, revenue, repurchase provision, and various ratios using one or
more of those measures. That information is not presented according to generally accepted accounting principles (GAAP) and is
reconciled to GAAP information below.
($ in millions)
1Q15
4Q14
3Q14
2Q14
1Q14
Tangible Common Equity (Non-GAAP)
Total Equity (GAAP)
$2,499
$2,582
$2,615
$2,621
$2,542
Less: Noncontrolling Interest
$295
$295
$295
$295
$295
Less: Preferred Stock
$96
$96
$96
$96
$96
Total Common Equity
$2,108
$2,191
$2,224
$2,230
$2,151
$174
$175
$161
$162
$163
Tangible Common Equity (Non-GAAP)
$1,934
$2,015
$2,063
$2,068
$1,988
Tangible Assets (Non-GAAP)
Total Assets (GAAP)
$25,716
$25,668
$23,986
$24,225
$23,946
$174
$175
$161
$162
$163
Tangible Assets (Non-GAAP)
$25,542
$25,493
$23,825
$24,063
$23,783
Tier 1 Common (Non-GAAP)
Tier 1 Capital
$2,452
$2,814
$2,783
$2,752
$2,666
Less:
Noncontrolling
Interest
-
FTBNA
Preferred
Stock
N/A
$295
$295
$295
$295
Less: Preferred Stock
N/A
$96
$96
$96
$96
Less: Trust Preferred
N/A
$200
$200
$200
$200
Tier 1 Common (Non-GAAP)
N/A
$2,223
$2,193
$2,161
$2,076
Risk Weighted Assets
Risk Weighted Assets
$20,795
$19,453
$19,238
$19,400
$18,695
Ratios
Tangible Common Equity to Tangible Assets (TCE/TA) (Non-GAAP)
7.57%
7.90%
8.66%
8.60%
8.36%
Total Equity to Total Assets (GAAP)
9.72%
10.06%
10.90%
10.82%
10.61%
Tier 1 Common to Risk Weighted Assets (Non-GAAP)
N/A
11.43%
11.40%
11.14%
11.10%
Tier 1 Capital to Total Assets (GAAP)
9.54%
10.96%
11.60%
11.36%
11.14%
Less: Intangible Assets (GAAP)
Less: Intangible Assets (GAAP)
1
1
2
2
2
2
2


28
Slides in this presentation use non-GAAP information of expense, revenue, repurchase provision, and various ratios using one or
more of those measures. That information is not presented according to generally accepted accounting principles (GAAP) and is
reconciled to GAAP information below.
Numbers may not add to total due to rounding.
1
Core Businesses include the Regional Banking, Capital Markets, and Corporate segments.
2
ROA  and Net Charge-offs / Average loans are annualized for 1Q15.
Reconciliation to GAAP Financials
($ in millions)
Net Interest Available to Common/EPS Excluding Litigation Charge
1Q15
-$95
$163
$68
$22
$46
$3
$2
$42
235
$0.18
Impact to EPS of Litigation Charge 
Earnings Per Share (GAAP)
-$0.33
Less: Earnings Per Share Excluding Litigation Charge (Non-GAAP)
$0.18
Impact to EPS of Litigation Charge (Non-GAAP)
-$0.51
Adjusted Annualized Net Income Available to Common Shareholders Excluding Litigation Charge (Non-GAAP)
$169
FHN Average Tangible Common Equity (GAAP)
$2,042
Consolidated Return on Average Tangible Common Equity Excluding Litigation Charge (Non-GAAP)
8.30%
$187
Average Total Assets (GAAP)
$25,645
Consolidated Return on Assets Excluding Litigation Charge (Non-GAAP)
0.73%
Consolidated Efficiency Ratio Excluding Litigation Charge
Adjusted Consolidated Noninterest Expense (Non-GAAP)
$214
Total Revenue Excluding Securities Gains (GAAP)
$286
Consolidated Efficiency Ratio Excluding Litigation Charge (Non-GAAP)
75%
Return
on Assets²
Net Interest
Margin
   Regional Banking (GAAP)
1.35%
4.68%
   Capital Markets (GAAP)
1.17%
0.83%
   Corporate (GAAP)
-0.84%
-1.28%
   Core Businesses (Non-GAAP)¹
0.73%
2.81%
   Non-Strategic (GAAP)
-18.05%
2.19%
   Consolidated (GAAP)
-1.15%
2.74%
Adjusted Annualized Consolidated Net Income Excluding Litigation Charge (Non-GAAP)
Less: Preferred Stock Dividends (GAAP)
Assumed Diluted Shares with Net Income Instead of Net Loss (Non-GAAP)
Consolidated Return on Assets Excluding Litigation Charge
Consolidated Return on Average Tangible Common Equity Excluding Litigation Charge
Key Ratios Excluding Litigation Charge
Earnings Per Share Excluding Litigation Charge (Non-GAAP)
Net Income Available to Common Shareholders Excluding Litigation Charge (Non-GAAP)
Consolidated Pre-tax Loss (GAAP)
Plus: Litigation Charge (GAAP)
Adjusted Consolidated Pre-tax Income (Non-GAAP)
Less: Adjusted Tax Using Estimated Tax Rate of ~32% (Non-GAAP)
Less: Net Income Attributable to Noncontrolling Interest (GAAP)
Adjusted Net Income Excluding Litigation Charge (Non-GAAP)
0.55%
15%
NM
0.23%
45%
NM
Net Charge-Offs/
Average Loans²
Fee Income /
Total Revenue
Efficiency
Ratio
0.17%
28%
63%
0.00%
93%
83%
NM
NM
NM
0.17%
47%
76%


29
Slides in this presentation use non-GAAP information of expense, revenue, repurchase provision, and various ratios using one or
more of those measures. That information is not presented according to generally accepted accounting principles (GAAP) and is
reconciled to GAAP information below.
Numbers may not add to total due to rounding.
Reconciliation to GAAP Financials
($ in millions)
1Q15
4Q14
1Q14
Regional Banking Pre-Provision Net Revenue
$215
$222
$202
$136
$138
$133
$79
$84
$69
1Q15 Changes vs
Adjusted Consolidated Noninterest Expense
1Q15
1Q14
1Q13
1Q12
1Q14
1Q12
$376
$218
$241
$322
73%
17%
$0
$0
$0
$49
$163
$0
$5
$0
$214
$218
$235
$273
-2%
-22%
$855
$872
$941
$1,090
2014
2011
Capital Markets Noninterest Expense  (GAAP)
$147
$321
Sentinel Noninterest Expense/(Recovery) (GAAP)
($47)
$37
Adjusted Capital Markets Noninterest Expense (Non-GAAP)
$194
$284
1Q15
1Q14
Change
$172
$16
$0
$0
$163
$0
$9
$15
-41%
Adjusted Capital Markets Noninterest Expense
Adjusted Annualized Noninterest Expense (Non-GAAP)
Regional Banking Total Revenue (GAAP)
Regional Banking Total Expense (GAAP)
Regional Banking Pre-Provision Net Revenue (Non-GAAP)
Consolidated Noninterest Expense (GAAP)
Less: Repurchase and Foreclosure Provision (GAAP)
Adjusted Non-Strategic
Adjusted Non-Strategic Noninterest Expense (Non-GAAP)
Less: Repurchase and Foreclosure Provision (GAAP)
Less: Litigation Charge (GAAP)
Less: Litigation Charge (GAAP)
Adjusted Consolidated Noninterest Expense (Non-GAAP)
Non-Strategic Noninterest Expense (GAAP)
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