FIRST HORIZON CORP - FORM 8-K - EX-99.1 - FINANCIAL SUPPLEMENT AND INVESTOR SLIDE PRESENTATION

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8-K - FORM 8-K - FIRST HORIZON CORP	d382051d8k.htm

Exhibit 99.1

LOGO

SECOND QUARTER 2012

FINANCIAL SUPPLEMENT

If you need further information, please contact:

Aarti Bowman, Investor Relations

901-523-4017

aagoorha@firsthorizon.com

TABLE OF CONTENTS


	Page
First Horizon National Corporation Segment Structure		3

Performance Highlights		4

Charges for Restructuring, Repositioning, & Efficiency Initiatives		6

Consolidated Results
Income Statement
Summary Results		7
Income Statement		8
Other Income and Other Expense		9
Balance Sheet
Period End Balance Sheet		10
Average Balance Sheet		11
Net Interest Income		12
Average Balance Sheet: Yields and Rates		13
Mortgage Servicing Rights		14

Business Segment Detail
Segment Highlights		15
Regional Banking		16
Capital Markets		17
Corporate		18
Non-Strategic		19

Capital Highlights		20

Asset Quality
Asset Quality: Consolidated		21
Asset Quality: Regional Banking and Corporate		23
Asset Quality: Non-Strategic		24
Rollforwards of Nonperforming Loans and ORE Inventory and Commercial Loans - Portfolio Metrics		25
Consumer Loans - Portfolio Metrics		26

Non-GAAP to GAAP Reconciliation		27

Glossary of Terms		28

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 to tangible assets, tangible book value per common share, tier 1 common to risk weighted assets, adjusted tangible common equity to risk weighted assets, and net interest margin adjusted for fully taxable equivalent (“FTE”). 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 the 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 capital ratios. Refer to the tabular reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items on page 27 of this financial supplement.


FIRST HORIZON NATIONAL CORPORATION SEGMENT STRUCTURE

LOGO

Regional Banking

•

Traditional lending and deposit taking, investments, financial planning, trust services, asset management, and cash management

•

Correspondent banking which provides credit, depository, and other banking related services to other financial institutions

Capital Markets

•

Fixed income sales, trading, and strategies for institutional clients in the U.S. and abroad

•

Other capital markets products such as portfolio advisory, derivatives, and loan trading

Corporate

•

Executive management, enterprise-wide risk management, corporate, finance, corporate communications, low income housing activities, legal functions and funding for the corporation including any impact from balance sheet positioning

•

Various charges related to restructuring, repositioning, and efficiency initiatives

Non-Strategic

•

Wind-down businesses that include:

•

National consumer lending loan portfolios

•

Trust preferred loan portfolio

•

Legacy mortgage servicing

•

Exited businesses such as First Horizon Msaver, Inc. (“Msaver”), First Horizon Insurance, Inc. (“FHI”), and Highland Capital Management Corporation (“Highland Capital”) and associated restructuring, repositioning, and efficiency charges

PERFORMANCE HIGHLIGHTS

Summary of Second Quarter 2012 Significant Items

(Millions)


Segment	Item	Income Statement	Amount	Comments

Non Strategic	Repurchase Provision	Noninterest Expense: Repurchase and foreclosure provision	$(250.0) million	Pre-tax charge related to repurchase obligations for mortgage loans (see discussion under Non-strategic section)

Non Strategic	Legal Expense	Noninterest Expense: Other	$(22.0) million	Pre-tax loss accrual related to pending legal matters

Non Strategic	Investment Security Gain	Noninterest Income: Security Gains/Losses	$5.1 million	Pre-tax gain on the sale of venture capital investment

(Second Quarter 2012 vs. First Quarter 2012)

Consolidated

• Net loss available to common shareholders was $124.8 million, or $.50 loss per diluted share, compared to net income of $30.5 million, or $.12 per diluted share in first quarter

• Net interest income (“NII”) increased slightly in second quarter to $172.7 million; The net interest margin (“NIM”) increased to 3.16 percent from 3.12 percent

• The increase in NII is primarily attributable to an increase in commercial loan fees coupled with lower funding costs

• The increase in NIM is largely due to a decline in excess cash held at the Fed and an increase in commercial loan fees which were partially offset by a lower yielding securities portfolio

• Noninterest income (including security gains) was $158.9 million in second quarter, a decrease of $43.5 million from first quarter

• Decrease primarily driven by lower fixed income revenue within capital markets in second quarter and a decline in mortgage banking income within the non-strategic segment

• Provision expense was $15.0 million in second quarter compared to $8.0 million in first quarter

• Noninterest expense was $527.2 million in second quarter compared to $322.0 million in first quarter

• Increase primarily driven by an increase to the repurchase and foreclosure provision

• These increases were partially offset by a decline in personnel costs within capital markets commensurate with lower fixed income revenue

• Period-end loans were $16.2 billion for the second quarter compared to $16.0 billion in first quarter; average loan balances were $16.0 billion for both quarters

• The increase in the period-end loan portfolio is primarily driven by the increase in loans to mortgage companies and real estate installment loans, partially offset by continued run-off within the non-strategic portfolios

• Average core deposits decreased slightly to $15.6 billion in second quarter, period-end decreased 5% to $15.5 billion

Regional Banking

• Net interest income increased $1.1 million in second quarter

• Increase in NII primarily attributable to higher commercial loan fees in second quarter

• Provision was $4.8 million in second quarter compared to a provision credit of $7.4 million in prior quarter

• Commercial reserve levels reflect continued stabilization of the commercial portfolio; slight increase in the level of consumer reserves

• Period-end loans increased $380.8 million to $12.0 billion primarily due to an increase in loans to mortgage companies and real estate installment loans

• Noninterest income increased to $64.8 million in second quarter from $59.9 million in first quarter

• Deposit fee income increased primarily due to seasonality in non-sufficient funds (“NSF”) fee structure

• Second quarter includes $1.8 million gain related to the sale of a branch

• Noninterest expense increased to $142.4 million in second quarter from $139.4 million in prior quarter

Capital Markets

• Fixed income revenues declined to $68.2 million in second quarter from $98.6 million in first quarter

• Fixed income average daily revenue (“ADR”) was $1.1 million in second quarter compared to $1.6 million in first quarter

• Noninterest expense decreased to $60.9 million in second quarter from $80.3 million in prior quarter

• Variable compensation costs decreased consistent with the decrease in fixed income ADR

Corporate

• NII was negative $4.1 million in second quarter compared to negative $4.7 million in first quarter

• Noninterest income (including securities gains) was $3.8 million in second quarter compared to $9.3 million in prior quarter

• Decline primarily resulting from lower deferred compensation income due to market conditions and is mirrored by a reduction in deferred compensation expense

• Noninterest expense decreased to $19.4 million in second quarter from $22.5 million in prior quarter

• The decline in deferred compensation expense was partially offset by an increase in restructuring costs, primarily severance

PERFORMANCE HIGHLIGHTS (continued)

(Second Quarter 2012 vs. First Quarter 2012)

Non-Strategic

• NII decreased $.9 million to $24.0 million in second quarter due to the continued contraction of loan portfolios

• Provision expense decreased to $10.2 million in second quarter from $15.4 million in prior quarter due to continued stabilization and runoff of the consumer portfolio

• Noninterest income (including securities gains) decreased to $15.3 million in second quarter from $26.5 million in prior quarter primarily due to a decline in mortgage banking income

• Positive net hedging results decreased to $1.8 million in second quarter from $9.1 million in prior quarter

• Mortgage banking was also negatively affected by a decline in servicing fees and adjustment made as a result of contingencies related to prior servicing sales

• Decline in mortgage banking income was partially offset by a $5.1 million gain on sale of a venture capital investment

• Noninterest expense increased to $304.5 million in second quarter from $79.8 million in prior quarter

• Provisioning for repurchase and foreclosure losses was $250.0 million in second quarter compared to $49.3 million in first quarter

• The repurchase liability for first lien mortgage loans increased to $360.5 million in second quarter from $161.2 million in first quarter

• Second quarter provision reflects a change in estimate of FHN’s repurchase obligations for alleged breaches of reps and warranties related to mortgage loans sold to Fannie and Freddie

• Change in estimate reflects significant new information from Fannie including loans currently selected for review; information supporting anticipated future selections (primarily from seriously delinquent and liquidated loan pools); and asset quality statistics for loans sold to Fannie (primarily loans no longer serviced by FHN)

• Data utilized to extrapolate probable incurred losses related to loans sold to Freddie; Ginnie loans were not included in the extrapolation

• Unless GSE repurchase practices or outcomes change significantly, FHN expects that the mortgage repurchase reserve established as of the end of the second quarter will be sufficient for losses resulting from current pending and projected repurchase requests from Fannie and Freddie

• Active pipeline increased to $430.6 million from $380.3 million in prior quarter

• Repurchase/make whole requests were $363.4 million as of the end of second quarter and primarily relate to requests from Fannie/Freddie

• Cumulative average rescission rates ranging between 45 percent and 55 percent with cumulative average loss severities ranging between 50 percent and 60 percent

• Second quarter includes a $22.0 million loss accrual related to pending legal matters

Asset Quality

• Allowance as a percentage of loans ratio decreased to 198 basis points from 217 basis points in prior quarter

• Second quarter allowance reflects continued stabilization of loan portfolios and improving asset quality metrics

• Provision expense increased to $15.0 million during second quarter from $8.0 million in prior quarter

• Annualized net charge-offs decreased to 101 basis points of average loans from 116 basis points in prior quarter

• Net charge-offs were $40.0 million in second quarter compared to $46.3 million in prior quarter

• Commercial net charge-offs were flat at $11.0 million in second quarter

• Consumer net charge-offs were $29.0 million in second quarter, a $6.6 million decline from prior quarter

• Nonperforming assets (“NPAs”) decreased 8.69 percent from prior quarter; NPA ratio declined to 232 basis points from 256 basis points

• Foreclosed assets declined as disposition activity more than offset new inflow

• Troubled debt restructurings (“TDRs”) were $478.1 million at the end of second quarter compared with $429.6 million prior quarter

• Commercial Portfolio:

• Reserves decreased $13.4 million from prior quarter primarily driven by the C&I portfolio within the regional bank

• Reserve levels reflect continued aggregate improvement of the portfolio as upgrades outpaced downgrades

• Some upgrades within the TRUPs and bank stock portfolio; the lowest tier borrowers remain stressed and are closely monitored

• Consumer Portfolio:

• Reserves decreased $11.5 million in second quarter from $180.4 million in first quarter driven by consumer real estate portfolio within the non-strategic segment

• Balances of consumer real estate loans increased within the regional banking segment, partially offsetting runoff from the non-strategic portfolios

• Performance of the home equity portfolio improved in second quarter; 30+ delinquency rates decreased to 129 basis points from 142 basis points in prior quarter

• Reserves for the Permanent Mortgage portfolio decreased $3.5 million; Allowance to loans increased to 3.77 percent from 3.62 percent

• The decrease in reserves was driven by lower delinquencies as 30+ delinquency declined to 149 basis points from 216 basis points in the prior quarter

• The decline was mitigated by an increase in TDR reserves in second quarter

Taxes

• Second quarter includes approximately $7 million of positive effect from permanent tax credits

• Permanent credits primarily relate to affordable housing credits, life insurance, and tax-exempt interest

Capital and Liquidity

• Paid $0.01 per share dividend July 1, 2012

• Increased stock repurchase program to $200 million; repurchased shares costing $36.9 million in second quarter

• Repurchased shares costing $44.5 million in prior quarter

• Volume weighted average price for all share repurchases under the stock repurchase program of $8.28 per share (before $.03 per share broker commission)

• Capital ratios (regulatory capital ratios estimated based on period-end balances)

• 8.13% for tangible common equity to tangible assets

• 13.10% for Tier 1

• 15.94% for Total Capital

• 10.63% for Tier 1 Common

CHARGES FOR RESTRUCTURING, REPOSITIONING, & EFFICIENCY INITIATIVES

Quarterly, Unaudited


(Thousands)	2Q12			1Q12			4Q11			3Q11			2Q11
By Income Statement Impact
Noninterest income
All other income and commissions (a)	$	(2,287	)	$	—		$	—		$	1,200		$	—
Gain on divestiture		—			200			—			—			—
Noninterest expense
Employee compensation, incentives, and benefits		2,191			(152	)		3,760			2,128			7,511
Occupancy		(219	)		44			39			1,031			59
Legal and professional fees		—			15			(27	)		—			—
All other expense		12			5			220			74			9,026

Total gain/(loss) before income taxes		(4,271	)		288			(3,992	)		(2,033	)		(16,596	)
Income/(loss) from discontinued operations (b)		485			(96	)		(84	)		8,951			441

Net impact resulting from restructuring, repositioning, and efficiency initiatives	$	(3,786	)	$	192		$	(4,076	)	$	6,918		$	(16,155	)

(a)	Reflects adjustment due to contingencies associated with prior mortgage servicing sales.

(b)	Includes amounts related to Msaver, First Horizon Insurance, and Highland Capital.

CONSOLIDATED SUMMARY RESULTS

Quarterly, Unaudited


																2Q12 Change vs.
(Dollars in thousands, except per share data)	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Income Statement Highlights
Net interest income	$	172,675		$	171,929		$	178,877		$	176,340		$	172,860				*			*
Noninterest income		153,842			202,113			180,993			185,725			187,592			(24	)%		(18	)%
Securities gains/(losses), net		5,065			328			203			35,162			1			NM			NM

Total revenue		331,582			374,370			360,073			397,227			360,453			(11	)%		(8	)%

Noninterest expense		527,177			321,994			312,036			322,708			344,455			64	%		53	%
Provision for loan losses		15,000			8,000			10,000			32,000			1,000			88	%		NM

Income/(loss) before income taxes		(210,595	)		44,376			38,037			42,519			14,998			NM			NM
Provision/(benefit) for income taxes		(88,178	)		10,570			(526	)		8,367			(4,167	)		NM			NM

Income/(loss) from continuing operations		(122,417	)		33,806			38,563			34,152			19,165			NM			NM
Income/(loss) from discontinued operations, net of tax		487			(435	)		(752	)		4,828			3,671			NM			(87	)%

Net income/(loss)		(121,930	)		33,371			37,811			38,980			22,836			NM			NM

Net income attributable to noncontrolling interest		2,844			2,844			2,871			2,875			2,844				*			*

Net income/(loss) available to common shareholders	$	(124,774	)	$	30,527		$	34,940		$	36,105		$	19,992			NM			NM


Common Stock Data
Diluted EPS from continuing operations	$	(0.50	)	$	0.12		$	0.13		$	0.12		$	0.06			NM			NM
Diluted EPS	$	(0.50	)	$	0.12		$	0.13		$	0.14		$	0.08			NM			NM
Diluted shares (thousands)		249,104			255,369			260,372			262,803			262,756			(2	)%		(5	)%
Period-end shares outstanding (thousands)		248,810			252,667			257,468			263,619			263,699			(2	)%		(6	)%
Cash dividends declared per share	$	0.01		$	0.01		$	0.01		$	0.01		$	0.01


Balance Sheet Highlights (Period-End)
Total loans, net of unearned income (Restricted—$ .1 billion) (a)	$	16,185,763		$	15,971,330		$	16,397,127		$	16,241,402		$	16,061,646			1	%		1	%
Total deposits		16,117,443			16,935,170			16,213,009			15,698,255			15,896,027			(5	)%		1	%
Total assets (Restricted—$ .1 billion) (a)		25,492,955			25,678,969			24,789,384			25,571,469			25,054,066			(1	)%		2	%
Total liabilities (Restricted—$ .1 billion) (a)		22,978,549			23,004,796			22,104,747			22,828,239			22,372,684				*		3	%
Total equity		2,514,406			2,674,173			2,684,637			2,743,230			2,681,382			(6	)%		(6	)%


Asset Quality Highlights
Allowance for loan losses (Restricted—$ 6.0 million) (a)	$	321,051		$	346,016		$	384,351		$	449,645		$	524,091			(7	)%		(39	)%
Allowance / period-end loans		1.98	%		2.17	%		2.34	%		2.77	%		3.26	%
Net charge-offs	$	39,965		$	46,335		$	75,294		$	106,446		$	66,037			(14	)%		(39	)%
Net charge-offs (annualized) / average loans		1.01	%		1.16	%		1.84	%		2.65	%		1.67	%
Non-performing assets (NPA) (b)	$	466,873		$	511,320		$	521,161		$	582,572		$	747,860			(9	)%		(38	)%
NPA % (b) (c)		2.32	%		2.56	%		2.57	%		3.02	%		4.09	%


Key Ratios & Other
Return on average assets (annualized) (d)		(1.96	)%		0.53	%		0.60	%		0.62	%		0.37	%
Return on average common equity (annualized)(e)		(21.06	)%		5.15	%		5.69	%		5.90	%		3.36	%
Net interest margin(f) (g)		3.16	%		3.12	%		3.23	%		3.23	%		3.20	%
Fee income to total revenue(h)		47.12	%		54.03	%		50.29	%		51.30	%		52.04	%
Efficiency ratio(i)		161.45	%		86.08	%		86.71	%		89.13	%		95.56	%
Book value per common share	$	8.92		$	9.42		$	9.28		$	9.29		$	9.05
Tangible book value per common share(g)	$	8.28		$	8.78		$	8.66		$	8.68		$	8.43
Adjusted tangible common equity to risk weighted assets(g)		9.96	%		10.79	%		10.73	%		11.09	%		11.05	%
Full time equivalent employees		4,619			4,629			4,718			4,812			5,036				*		(8	)%

NM - Not meaningful

* Amount is less than one percent.

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

(a)	Restricted balances parenthetically presented are as of June 30, 2012.

(b)	In 2Q12, the process for identifying current junior liens behind delinquent or modified first liens for nonaccrual status was refined. Q1 consumer NPLs have been represented to agree with Q2 presentation.

(c)	NPAs related to the loan portfolio over period-end loans plus foreclosed real estate and other assets.

(d)	Calculated using net income.

(e)	Calculated using net income available to common shareholders.

(f)	Net interest margin is computed using total net interest income adjusted for FTE.

(g)	Refer to the Non-GAAP to GAAP Reconciliation on page 27 of this financial supplement.

(h)	Ratio excludes securities gains/(losses).

(i)	Noninterest expense divided by total revenue excluding securities gains/(losses).

CONSOLIDATED INCOME STATEMENT

Quarterly, Unaudited


															2Q12 Change vs.
(Thousands)	2Q12			1Q12			4Q11			3Q11		2Q11			1Q12			2Q11
Interest income	$	200,735		$	201,503		$	209,715		$	208,360	$	206,757				*		(3	)%
Less: interest expense		28,060			29,574			30,838			32,020		33,897			(5	)%		(17	)%

Net interest income		172,675			171,929			178,877			176,340		172,860				*			*
Provision for loan losses (a)		15,000			8,000			10,000			32,000		1,000			88	%		NM

Net interest income after provision for loan losses		157,675			163,929			168,877			144,340		171,860			(4	)%		(8	)%

Noninterest income:
Capital markets		74,913			106,743			87,756			99,557		77,921			(30	)%		(4	)%
Mortgage banking		9,889			23,341			18,008			12,751		32,101			(58	)%		(69	)%
Deposit transactions and cash management (b)		30,123			28,741			31,349			35,701		34,726			5	%		(13	)%
Trust services and investment management		6,477			5,808			5,822			6,086		6,684			12	%		(3	)%
Brokerage management fees and commissions		8,759			8,496			7,572			9,576		7,662			3	%		14	%
Insurance commissions		830			568			1,399			739		764			46	%		9	%
Securities gains/(losses), net (c)		5,065			328			203			35,162		1			NM			NM
Gain on divestiture		—			200			—			—		—			NM				*
Other		22,851			28,216			29,087			21,315		27,734			(19	)%		(18	)%

Total noninterest income		158,907			202,441			181,196			220,887		187,593			(22	)%		(15	)%

Adjusted gross income after provision for loan losses		316,582			366,370			350,073			365,227		359,453			(14	)%		(12	)%

Noninterest expense:
Employee compensation, incentives, and benefits		149,616			175,458			149,013			153,540		151,160			(15	)%		(1	)%
Repurchase and foreclosure provision (d)		250,000			49,256			45,033			52,791		24,563			NM			NM
Operations services		9,477			9,127			10,601			11,978		13,907			4	%		(32	)%
Occupancy		11,486			12,119			12,168			13,523		13,061			(5	)%		(12	)%
Legal and professional fees		8,417			6,067			12,708			18,132		20,451			39	%		(59	)%
FDIC premium expense		6,801			6,336			5,504			5,904		8,839			7	%		(23	)%
Computer software		9,960			9,465			9,507			8,689		8,375			5	%		19	%
Contract employment and outsourcing (e)		10,844			11,115			12,514			14,352		8,142			(2	)%		33	%
Equipment rentals, depreciation, and maintenance		7,789			7,616			7,748			8,795		8,481			2	%		(8	)%
Foreclosed real estate		1,908			4,170			4,793			4,691		5,803			(54	)%		(67	)%
Communications and courier		4,484			4,499			4,384			4,428		5,069				*		(12	)%
Miscellaneous loan costs		1,298			1,327			1,354			959		859			(2	)%		51	%
Amortization of intangible assets		979			973			1,000			1,004		1,006			1	%		(3	)%
Other (f) (g)		54,118			24,466			35,709			23,922		74,739			NM			(28	)%

Total noninterest expense		527,177			321,994			312,036			322,708		344,455			64	%		53	%

Income/(loss) before income taxes		(210,595	)		44,376			38,037			42,519		14,998			NM			NM
Provision/(benefit) for income taxes		(88,178	)		10,570			(526	)		8,367		(4,167	)		NM			NM

Income/(loss) from continuing operations		(122,417	)		33,806			38,563			34,152		19,165			NM			NM
Income/(loss) from discontinued operations, net of tax		487			(435	)		(752	)		4,828		3,671			NM			(87	)%

Net income/(loss)		(121,930	)		33,371			37,811			38,980		22,836			NM			NM

Net income attributable to noncontrolling interest		2,844			2,844			2,871			2,875		2,844				*			*

Net income/(loss) available to common shareholders	$	(124,774	)	$	30,527		$	34,940		$	36,105	$	19,992			NM			NM

NM - Not meaningful

* Amount is less than one percent.

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

(a)	3Q11 includes approximately $36 million of losses on sales of nonperforming loans.

(b)	Fees impacted by the Durbin Amendment which became effective in 4Q11 resulting in lower interchange income.

(c)	2Q12 includes a $5.1 million gain on sale of venture capital investment; 3Q11 includes a $35.1 million gain associated with the sale of a portion of Visa Class B Shares.

(d)	2Q12 includes $250.0 million charge to the repurchase and foreclosure provision primarily related to a revision in estimate based on new information received from a GSE.

(e)	Beginning in 3Q11, FHN transitioned to a new mortgage subservicer resulting in elevated base servicing costs.

(f)	4Q11 includes an $8.3 million increase in derivative liabilities associated with prior sales of Visa shares related to the decline in the conversion ratio for Visa Class B shares.

(g)

2Q12 includes $22.0 million loss accrual related to pending legal matters, $3.4 million in ancillary expenses associated with legacy mortgage wind-down activities, and $2.8 million related to the write-off of unrecoverable servicing advances; 2Q11 includes $36.7 million associated with a litigation settlement.

OTHER INCOME AND OTHER EXPENSE

Quarterly, Unaudited


													2Q12 Changes vs.
(Thousands)	2Q12			1Q12		4Q11		3Q11			2Q11		1Q12			2Q11
Other Income
Bank owned life insurance	$	4,659		$	4,772	$	4,764	$	5,116		$	4,920		(2	)%		(5	)%
Bankcard income (a)		5,705			5,615		7,259		5,258			5,151		2	%		11	%
ATM interchange fees (b)		2,669			2,556		2,655		3,709			3,791		4	%		(30	)%
Other service charges		3,212			3,293		3,541		2,969			2,819		(2	)%		14	%
Electronic banking fees		1,632			1,706		1,546		1,609			1,536		(4	)%		6	%
Letter of credit fees		1,560			1,334		1,230		1,407			1,869		17	%		(17	)%
Deferred compensation (c)		(1,020	)		3,119		376		(2,093	)		221		NM			NM
Other (d)		4,434			5,821		7,716		3,340			7,427		(24	)%		(40	)%

Total	$	22,851		$	28,216	$	29,087	$	21,315		$	27,734		(19	)%		(18	)%


Other Expense
Losses from litigation and regulatory matters (e)	$	22,100		$	153	$	694	$	—		$	38,260		NM			(42	)%
Advertising and public relations		3,153			4,250		4,965		4,571			3,558		(26	)%		(11	)%
Low income housing expense		4,214			4,608		5,974		4,712			4,973		(9	)%		(15	)%
Other insurance and taxes		3,130			3,199		3,395		3,352			3,507		(2	)%		(11	)%
Travel and entertainment		2,435			1,864		2,342		2,075			2,137		31	%		14	%
Customer relations		1,348			855		1,301		1,185			1,152		58	%		17	%
Employee training and dues		1,230			1,092		1,172		1,009			1,342		13	%		(8	)%
Supplies		817			1,033		953		1,092			792		(21	)%		3	%
Bank examination costs		800			799		1,127		1,138			1,117			*		(28	)%
Loan insurance expense		636			589		676		744			706		8	%		(10	)%
Federal services fees		328			321		342		338			291		2	%		13	%
Other (f) (g)		13,927			5,703		12,768		3,706			16,904		NM			(18	)%

Total	$	54,118		$	24,466	$	35,709	$	23,922		$	74,739		NM			(28	)%

NM - Not meaningful

* Amount is less than one percent.

(a)	4Q11 includes $2.0 million related to Visa volume incentives.

(b)	Fees primarily impacted by the Durbin Amendment which became effective in 4Q11 resulting in lower interchange income.

(c)	Amounts driven by market conditions and are mirrored by changes in deferred compensation expense which is included in employee compensation expense.

(d)	1Q12 includes $2.3 million associated with resolution of a legal matter. 4Q11 includes $4.0 million of interest related to a tax refund.

(e)	2Q12 includes $22.0 million loss accrual related to pending legal matters; 2Q11 includes $36.7 million associated with a litigation settlement.

(f)	4Q11 includes an $8.3 million increase in derivative liabilities associated with prior sales of Visa shares related to the decline in the conversion ratio for Visa Class B shares.

(g)	2Q12 includes $3.4 million in ancillary expenses associated with legacy mortgage wind-down activities and $2.8 million related to the write-off of unrecoverable servicing advances.

CONSOLIDATED PERIOD-END BALANCE SHEET

Quarterly, Unaudited


																2Q12 Changes vs.
(Thousands)	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Assets
Investment securities	$	3,264,866		$	3,296,603		$	3,066,272		$	3,327,846		$	3,230,477			(1	)%		1	%
Loans held-for-sale		424,051			431,905			413,897			386,147			397,931			(2	)%		7	%
Loans, net of unearned income (Restricted—$.1 billion) (a)		16,185,763			15,971,330			16,397,127			16,241,402			16,061,646			1	%		1	%
Federal funds sold and securities purchased under agreements to resell		525,504			614,705			443,588			719,400			598,000			(15	)%		(12	)%
Interest-bearing cash (b)		484,430			761,098			452,856			358,537			263,441			(36	)%		84	%
Trading securities		1,361,717			1,238,041			988,217			1,227,197			1,196,380			10	%		14	%

Total earning assets		22,246,331			22,313,682			21,761,957			22,260,529			21,747,875				*		2	%

Cash and due from banks		330,931			349,604			384,667			339,895			313,416			(5	)%		6	%
Capital markets receivables		377,496			522,001			164,987			521,198			625,243			(28	)%		(40	)%
Mortgage servicing rights, net		129,291			142,956			144,069			150,803			186,958			(10	)%		(31	)%
Goodwill		134,242			134,242			133,659			133,659			135,683				*		(1	)%
Other intangible assets, net		24,659			25,638			26,243			27,243			28,384			(4	)%		(13	)%
Premises and equipment, net		311,753			314,903			321,253			326,667			330,392			(1	)%		(6	)%
Real estate acquired by foreclosure (c)		69,603			78,947			85,244			91,492			92,662			(12	)%		(25	)%
Allowance for loan losses (Restricted—$6.0 million) (a)		(321,051	)		(346,016	)		(384,351	)		(449,645	)		(524,091	)		(7	)%		(39	)%
Other assets (Restricted—$2.6 million) (a)		2,189,700			2,143,012			2,151,656			2,169,628			2,117,544			2	%		3	%

Total assets (Restricted—$.1 billion) (a)	$	25,492,955		$	25,678,969		$	24,789,384		$	25,571,469		$	25,054,066			(1	)%		2	%


Liabilities and Equity
Deposits
Savings	$	5,979,874		$	6,615,289		$	6,624,405		$	6,467,377		$	6,382,963			(10	)%		(6	)%
Other interest-bearing deposits		3,565,873			3,500,445			3,193,697			3,096,621			2,784,787			2	%		28	%
Time deposits		1,109,163			1,142,249			1,173,375			1,210,661			1,277,905			(3	)%		(13	)%

Total interest-bearing core deposits		10,654,910			11,257,983			10,991,477			10,774,659			10,445,655			(5	)%		2	%
Noninterest-bearing deposits		4,833,994			4,969,597			4,613,014			4,412,375			4,937,103			(3	)%		(2	)%

Total core deposits (d)		15,488,904			16,227,580			15,604,491			15,187,034			15,382,758			(5	)%		1	%

Certificates of deposit $100,000 and more		628,539			707,590			608,518			511,221			513,269			(11	)%		22	%

Total deposits		16,117,443			16,935,170			16,213,009			15,698,255			15,896,027			(5	)%		1	%

Federal funds purchased and securities sold under agreements to repurchase		1,780,990			1,801,234			1,887,052			2,101,953			2,005,999			(1	)%		(11	)%
Trading liabilities		470,631			567,571			347,285			471,120			498,915			(17	)%		(6	)%
Other short-term borrowings (e)		1,094,179			181,570			172,550			621,998			187,902			NM			NM
Term borrowings (Restricted—$ .1 billion) (a)		2,294,224			2,340,706			2,481,660			2,509,804			2,502,517			(2	)%		(8	)%
Capital markets payables		203,548			361,018			164,708			509,164			464,993			(44	)%		(56	)%
Other liabilities		1,017,534			817,527			838,483			915,945			816,331			24	%		25	%

Total liabilities (Restricted—$ .1 billion) (a)		22,978,549			23,004,796			22,104,747			22,828,239			22,372,684				*		3	%

Equity
Common stock(f)		155,506			157,917			160,918			164,762			164,812			(2	)%		(6	)%
Capital surplus(f)		1,528,161			1,560,343			1,601,346			1,641,878			1,638,423			(2	)%		(7	)%
Undivided profits		658,157			785,361			757,364			724,977			691,490			(16	)%		(5	)%
Accumulated other comprehensive loss, net		(122,583	)		(124,613	)		(130,156	)		(83,552	)		(108,508	)		(2	)%		13	%
Noncontrolling interest(g)		295,165			295,165			295,165			295,165			295,165				*			*

Total equity		2,514,406			2,674,173			2,684,637			2,743,230			2,681,382			(6	)%		(6	)%

Total liabilities and equity	$	25,492,955		$	25,678,969		$	24,789,384		$	25,571,469		$	25,054,066			(1	)%		2	%

NM - Not meaningful

* Amount is less than one percent.

(a)	Restricted balances parenthetically presented are as of June 30, 2012.

(b)	Includes excess balances held at Fed.

(c)	2Q12 includes $20.7 million of foreclosed assets related to government insured mortgages.

(d)	2Q12 average core deposits were $15.6 billion.

(e)	2Q12 includes increased FHLB borrowings as a result of deposit fluctuations and an increase in loans to mortgage companies near the end of the quarter.

(f)	Decreases in 2Q12, 1Q12 and 4Q11 relate to shares purchased under the share repurchase program.

(g)	Consists of preferred stock of subsidiary.

CONSOLIDATED AVERAGE BALANCE SHEET

Quarterly, Unaudited


																2Q12 Change vs.
(Thousands)	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Assets:
Earning assets:
Loans, net of unearned income:
Commercial, financial, and industrial (C&I)	$	7,712,551		$	7,709,856		$	7,740,802		$	7,181,058		$	6,867,893				*		12	%
Income CRE		1,236,016			1,255,713			1,295,079			1,308,059			1,362,459			(2	)%		(9	)%
Residential CRE		94,531			111,823			132,669			169,049			203,721			(15	)%		(54	)%
Consumer real estate		5,406,435			5,290,632			5,295,881			5,346,893			5,436,358			2	%		(1	)%
Permanent mortgage		755,391			771,187			814,335			985,359			1,009,804			(2	)%		(25	)%
Credit card and other		276,017			279,150			289,189			292,800			299,904			(1	)%		(8	)%
Restricted and secured real estate loans		479,327			622,931			654,142			681,469			708,966			(23	)%		(32	)%

Total loans, net of unearned income (Restricted - $ .1 billion) (a) (b)		15,960,268			16,041,292			16,222,097			15,964,687			15,889,105			(1	)%			*

Loans held-for-sale		425,176			424,086			399,271			384,108			366,557				*		16	%
Investment securities:
U.S. treasuries		42,424			40,088			42,935			43,812			62,970			6	%		(33	)%
U.S. government agencies		2,981,090			2,802,651			2,919,690			2,990,375			2,938,623			6	%		1	%
States and municipalities		18,005			18,070			17,681			19,365			23,869				*		(25	)%
Other		223,924			224,000			224,530			221,664			220,440				*		2	%

Total investment securities		3,265,443			3,084,809			3,204,836			3,275,216			3,245,902			6	%		1	%

Capital markets securities inventory		1,327,596			1,277,372			1,263,427			1,250,249			1,235,642			4	%		7	%
Mortgage banking trading securities		22,841			25,797			26,927			30,320			32,263			(11	)%		(29	)%
Other earning assets:
Federal funds sold and securities purchased under agreements to resell		632,019			632,972			641,464			660,048			653,984				*		(3	)%
Interest-bearing cash (c)		518,124			821,113			479,621			403,482			381,586			(37	)%		36	%

Total other earning assets		1,150,143			1,454,085			1,121,085			1,063,530			1,035,570			(21	)%		11	%

Total earning assets (Restricted—$ .1 billion) (a)		22,151,467			22,307,441			22,237,643			21,968,110			21,805,039			(1	)%		2	%

Allowance for loan losses (Restricted—$ 8.2 million) (a)		(336,642	)		(372,264	)		(424,774	)		(507,478	)		(567,923	)		(10	)%		(41	)%
Cash and due from banks (Restricted—$ 1.5 million) (a)		337,366			351,760			337,755			346,100			343,162			(4	)%		(2	)%
Capital markets receivables		100,408			91,430			108,815			124,192			112,289			10	%		(11	)%
Premises and equipment, net		312,313			317,621			323,569			328,172			324,584			(2	)%		(4	)%
Other assets (Restricted—$ 3.5 million) (a)		2,449,723			2,504,385			2,479,298			2,519,020			2,500,864			(2	)%		(2	)%

Total assets (Restricted—$ .1 billion) (a)	$	25,014,635		$	25,200,373		$	25,062,306		$	24,778,116		$	24,518,015			(1	)%		2	%

Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Other interest-bearing deposits	$	3,512,390		$	3,246,658		$	2,991,676		$	2,900,808		$	2,673,090			8	%		31	%
Savings		6,290,143			6,690,470			6,559,779			6,479,880			6,320,779			(6	)%			*
Time deposits		1,125,738			1,155,716			1,190,464			1,244,602			1,315,764			(3	)%		(14	)%

Total interest-bearing core deposits		10,928,271			11,092,844			10,741,919			10,625,290			10,309,633			(1	)%		6	%
Certificates of deposit $100,000 and more		675,688			660,256			544,394			507,086			547,262			2	%		23	%
Federal funds purchased and securities sold under agreements to repurchase		1,879,252			2,003,566			2,170,222			2,081,379			2,130,832			(6	)%		(12	)%
Capital markets trading liabilities		602,344			614,084			629,019			626,982			620,726			(2	)%		(3	)%
Other short-term borrowings		377,075			182,083			362,579			284,163			340,015			NM			11	%
Term borrowings (Restricted—$ .1 billion) (a)		2,317,247			2,457,291			2,506,088			2,491,227			2,499,794			(6	)%		(7	)%

Total interest-bearing liabilities		16,779,877			17,010,124			16,954,221			16,616,127			16,448,262			(1	)%		2	%

Noninterest-bearing deposits		4,696,844			4,623,457			4,519,590			4,546,876			4,574,342			2	%		3	%
Capital markets payables		73,312			71,180			68,662			102,831			79,463			3	%		(8	)%
Other liabilities		786,886			814,417			785,356			789,190			735,786			(3	)%		7	%
Equity		2,677,716			2,681,195			2,734,477			2,723,092			2,680,162				*			*

Total liabilities and equity (Restricted—$ .1 billion) (a)	$	25,014,635		$	25,200,373		$	25,062,306		$	24,778,116		$	24,518,015			(1	)%		2	%

NM - Not meaningful

* Amount is less than one percent.

(a)	Restricted balances parenthetically presented are quarterly averages as of June 30, 2012.

(b)	Includes loans on nonaccrual status.

(c)	Includes excess balances held at Fed.

CONSOLIDATED NET INTEREST INCOME (a)

Quarterly, Unaudited


																2Q12 Changes vs.
(Thousands)	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Interest Income:
Loans, net of unearned income (b)	$	162,698		$	163,070		$	169,169		$	163,774		$	162,281				*			*
Loans held-for-sale		3,628			3,738			3,859			5,126			3,267			(3	)%		11	%
Investment securities:
U.S. treasuries		39			66			67			66			88			(41	)%		(56	)%
U.S. government agencies		23,562			23,768			25,262			27,615			28,643			(1	)%		(18	)%
States and municipalities		63			76			99			116			197			(17	)%		(68	)%
Other		2,324			2,422			2,264			2,249			2,390			(4	)%		(3	)%

Total investment securities		25,988			26,332			27,692			30,046			31,318			(1	)%		(17	)%

Capital markets securities inventory		9,204			8,934			9,789			10,141			10,479			3	%		(12	)%
Mortgage banking trading securities		578			642			675			706			821			(10	)%		(30	)%
Other earning assets:
Federal funds sold and securities purchased under agreements to resell (c)		115			—			(32	)		(58	)		(93	)		NM			NM
Interest-bearing cash		280			446			213			180			181			(37	)%		55	%

Total other earning assets		395			446			181			122			88			(11	)%		NM

Interest income	$	202,491		$	203,162		$	211,365		$	209,915		$	208,254				*		(3	)%


Interest Expense:
Interest-bearing deposits:
Other interest-bearing deposits	$	1,655		$	1,518		$	1,407		$	1,650		$	1,638			9	%		1	%
Savings		4,744			5,619			5,921			6,773			7,018			(16	)%		(32	)%
Time deposits		5,541			5,916			6,363			7,096			7,783			(6	)%		(29	)%

Total interest-bearing core deposits		11,940			13,053			13,691			15,519			16,439			(9	)%		(27	)%
Certificates of deposit $100,000 and more		2,305			2,306			2,166			2,328			2,612				*		(12	)%
Federal funds purchased and securities sold under agreements to repurchase		1,114			1,223			1,269			1,159			1,237			(9	)%		(10	)%
Capital markets trading liabilities		2,843			2,515			3,363			3,703			4,102			13	%		(31	)%
Other short-term borrowings		36			142			171			230			233			(75	)%		(85	)%
Term borrowings		9,822			10,335			10,178			9,081			9,274			(5	)%		6	%

Interest expense		28,060			29,574			30,838			32,020			33,897			(5	)%		(17	)%

Net interest income—tax equivalent basis		174,431			173,588			180,527			177,895			174,357				*			*
Fully taxable equivalent adjustment		(1,756	)		(1,659	)		(1,650	)		(1,555	)		(1,497	)		6	%		17	%

Net interest income	$	172,675		$	171,929		$	178,877		$	176,340		$	172,860				*			*

NM - Not meaningful

* Amount is less than one percent.

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

(a)	Net interest income adjusted to a fully taxable equivalent (“FTE”) basis.

(b)	Includes loans on nonaccrual status.

(c)	4Q11, 3Q11 and 2Q11 driven by negative market rates on reverse repurchase agreements.

CONSOLIDATED AVERAGE BALANCE SHEET: YIELDS AND RATES

Quarterly, Unaudited


(Thousands)	2Q12			1Q12			4Q11			3Q11			2Q11
Assets:
Earning assets (a):
Loans, net of unearned income:
Commercial loans		3.92	%		3.90	%		3.95	%		3.84	%		3.90	%
Retail loans		4.33			4.32			4.42			4.37			4.31

Total loans, net of unearned income (b)		4.09			4.08			4.15			4.08			4.09

Loans held-for-sale		3.41			3.53			3.87			5.34			3.57
Investment securities:
U.S. treasuries		0.37			0.66			0.62			0.60			0.56
U.S. government agencies		3.16			3.39			3.46			3.69			3.90
States and municipalities		1.39			1.68			2.23			2.39			3.29
Other		4.15			4.33			4.03			4.06			4.34

Total investment securities		3.18			3.41			3.46			3.67			3.86

Capital markets securities inventory		2.77			2.80			3.10			3.24			3.39
Mortgage banking trading securities		10.12			9.96			10.03			9.31			10.17
Other earning assets:
Federal funds sold and securities purchased under agreements to resell (c)		.07			—			(0.02	)		(0.03	)		(0.06	)
Interest-bearing cash		0.22			0.22			0.18			0.18			0.19

Total other earning assets		0.14			0.12			0.06			0.05			0.03

Interest income/total earning assets		3.67	%		3.65	%		3.78	%		3.80	%		3.83	%

Liabilities:
Interest-bearing liabilities:
Interest-bearing deposits:
Other interest-bearing deposits		0.19	%		0.19	%		0.19	%		0.23	%		0.25	%
Savings		0.30			0.34			0.36			0.41			0.45
Time deposits		1.98			2.06			2.12			2.26			2.37

Total interest-bearing core deposits		0.44			0.47			0.51			0.58			0.64
Certificates of deposit $100,000 and more		1.37			1.40			1.58			1.82			1.91
Federal funds purchased and securities sold under agreements to repurchase		0.24			0.25			0.23			0.22			0.23
Capital markets trading liabilities		1.90			1.65			2.12			2.34			2.65
Other short-term borrowings		0.04			0.31			0.19			0.32			0.27
Term borrowings (d)		1.70			1.68			1.63			1.46			1.49

Interest expense / total interest-bearing liabilities		0.67			0.70			0.72			0.77			0.83

Net interest spread		3.00	%		2.95	%		3.06	%		3.03	%		3.00	%
Effect of interest-free sources used to fund earning assets		0.16			0.17			0.17			0.20			0.20

Net interest margin		3.16	%		3.12	%		3.23	%		3.23	%		3.20	%

Yields are adjusted to a fully taxable equivalent (“FTE”) basis. Refer to the Non-GAAP to GAAP Reconciliation on page 27 for reconciliation of net interest income (GAAP) to net interest income adjusted for impact of FTE—(non-GAAP).

(a)	Earning assets yields are expressed net of unearned income.

(b)	Includes loans on nonaccrual status.

(c)	4Q11, 3Q11 and 2Q11 driven by negative market rates on reverse repurchase agreements.

(d)	Rates are expressed net of unamortized debenture cost for term borrowings.

MORTGAGE SERVICING RIGHTS

Quarterly, Unaudited


																2Q12 Changes vs.
(Thousands)	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
First Liens
Fair value beginning balance	$	139,676		$	140,724		$	147,431		$	183,530		$	204,257
Reductions due to loan payments		(6,665	)		(5,499	)		(3,567	)		(5,286	)		(5,522	)
Reductions due to exercise of cleanup calls		—			—			—			—			(195	)
Changes in fair value due to:
Changes in valuation model inputs or assumptions (a)		(6,855	)		4,459			(3,140	)		(30,813	)		(15,010	)
Other changes in fair value		(71	)		(8	)		—			—			—

Fair value ending balance	$	126,085		$	139,676		$	140,724		$	147,431		$	183,530			(10	)%		(31	)%

Second Liens
Fair value beginning balance	$	222		$	231		$	241		$	251		$	259
Reductions due to loan payments		(7	)		(9	)		(10	)		(10	)		(8	)

Fair value ending balance	$	215		$	222		$	231		$	241		$	251			(3	)%		(14	)%

HELOC
Fair value beginning balance	$	3,058		$	3,114		$	3,131		$	3,177		$	3,232
Reductions due to loan payments		(79	)		(76	)		(54	)		(59	)		(59	)
Changes in fair value due to:
Other changes in fair value		12			20			37			13			4

Fair value ending balance	$	2,991		$	3,058		$	3,114		$	3,131		$	3,177			(2	)%		(6	)%

Total Consolidated
Fair value beginning balance	$	142,956		$	144,069		$	150,803		$	186,958		$	207,748
Reductions due to loan payments		(6,751	)		(5,584	)		(3,631	)		(5,355	)		(5,589	)
Reductions due to exercise of cleanup calls		—			—			—			—			(195	)
Changes in fair value due to:
Changes in valuation model inputs or assumptions (a)		(6,855	)		4,459			(3,140	)		(30,813	)		(15,010	)
Other changes in fair value		(59	)		12			37			13			4

Fair value ending balance	$	129,291		$	142,956		$	144,069		$	150,803		$	186,958			(10	)%		(31	)%

(a)	Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates.

BUSINESS SEGMENT HIGHLIGHTS

Quarterly, Unaudited


																2Q12 change vs.
(Thousands)	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Regional Banking
Net interest income	$	147,204		$	146,073		$	149,597		$	140,072		$	135,583			1	%		9	%
Noninterest income		64,838			59,901			64,559			68,096			67,853			8	%		(4	)%

Total revenues		212,042			205,974			214,156			208,168			203,436			3	%		4	%
Provision/(provision credit) for loan losses		4,828			(7,426	)		(12,654	)		(22,698	)		(13,748	)		NM			NM
Noninterest expense		142,428			139,359			136,428			137,294			143,346			2	%		(1	)%

Income before income taxes		64,786			74,041			90,382			93,572			73,838			(12	)%		(12	)%
Provision for income taxes		23,362			27,013			33,287			34,592			27,075			(14	)%		(14	)%

Net income	$	41,424		$	47,028		$	57,095		$	58,980		$	46,763			(12	)%		(11	)%

Capital Markets
Net interest income	$	5,613		$	5,684		$	5,527		$	5,552		$	5,509			(1	)%		2	%
Noninterest income		74,964			106,775			88,230			99,505			77,925			(30	)%		(4	)%

Total revenues		80,577			112,459			93,757			105,057			83,434			(28	)%		(3	)%
Noninterest expense (a)		60,886			80,302			66,721			77,168			103,383			(24	)%		(41	)%

Income/(loss) before income taxes		19,691			32,157			27,036			27,889			(19,949	)		(39	)%		NM
Provision/(benefit) for income taxes		7,421			12,240			10,302			10,656			(7,756	)		(39	)%		NM

Net income/(loss)	$	12,270		$	19,917		$	16,734		$	17,233		$	(12,193	)		(38	)%		NM

Corporate
Net interest income/(expense)	$	(4,110	)	$	(4,727	)	$	(3,764	)	$	(494	)	$	412			13	%		NM
Noninterest income		3,838			9,266			9,865			37,914			8,850			(59	)%		(57	)%

Total revenues		(272	)		4,539			6,101			37,420			9,262			NM			NM
Noninterest expense		19,374			22,521			29,244			19,013			36,287			(14	)%		(47	)%

Income/(loss) before income taxes		(19,646	)		(17,982	)		(23,143	)		18,407			(27,025	)		(9	)%		27	%
Provision/(benefit) for income taxes		(12,922	)		(11,805	)		(22,464	)		599			(18,917	)		(9	)%		32	%

Net income/(loss)	$	(6,724	)	$	(6,177	)	$	(679	)	$	17,808		$	(8,108	)		(9	)%		17	%

Non-Strategic
Net interest income	$	23,968		$	24,899		$	27,517		$	31,210		$	31,356			(4	)%		(24	)%
Noninterest income		15,267			26,499			18,542			15,372			32,965			(42	)%		(54	)%

Total revenues		39,235			51,398			46,059			46,582			64,321			(24	)%		(39	)%
Provision for loan losses		10,172			15,426			22,654			54,698			14,748			(34	)%		(31	)%
Noninterest expense (b) (c)		304,489			79,812			79,643			89,233			61,439			NM			NM

Loss before income taxes		(275,426	)		(43,840	)		(56,238	)		(97,349	)		(11,866	)		NM			NM
Benefit for income taxes		(106,039	)		(16,878	)		(21,651	)		(37,480	)		(4,569	)		NM			NM

Loss from continuing operations		(169,387	)		(26,962	)		(34,587	)		(59,869	)		(7,297	)		NM			NM
Income/(loss) from discontinued operations, net of tax		487			(435	)		(752	)		4,828			3,671			NM			(87	)%

Net loss	$	(168,900	)	$	(27,397	)	$	(35,339	)	$	(55,041	)	$	(3,626	)		NM			NM

Total Consolidated
Net interest income	$	172,675		$	171,929		$	178,877		$	176,340		$	172,860				*			*
Noninterest income		158,907			202,441			181,196			220,887			187,593			(22	)%		(15	)%

Total revenues		331,582			374,370			360,073			397,227			360,453			(11	)%		(8	)%
Provision for loan losses		15,000			8,000			10,000			32,000			1,000			88	%		NM
Noninterest expense		527,177			321,994			312,036			322,708			344,455			64	%		53	%

Income/(loss) before income taxes		(210,595	)		44,376			38,037			42,519			14,998			NM			NM
Provision/(benefit) for income taxes		(88,178	)		10,570			(526	)		8,367			(4,167	)		NM			NM

Income/(loss) from continuing operations		(122,417	)		33,806			38,563			34,152			19,165			NM			NM
Income/(loss) from discontinued operations, net of tax		487			(435	)		(752	)		4,828			3,671			NM			(87	)%

Net income	$	(121,930	)	$	33,371		$	37,811		$	38,980		$	22,836			NM			NM

NM - Not meaningful

* Amount is less than one percent.

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

(a)	2Q11 includes $36.7 million associated with a litigation settlement.

(b)	2Q12 includes $250.0 million charge to the repurchase and foreclosure provision primarily related to a revision in estimate based on new information received from Fannie Mae.

(c)	2Q12 includes $22.0 million loss accrual related to pending legal matters.

REGIONAL BANKING

Quarterly, Unaudited


																2Q12 Changes vs.
	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Income Statement (thousands)
Net interest income	$	147,204		$	146,073		$	149,597		$	140,072		$	135,583			1	%		9	%
Provision for loan losses		4,828			(7,426	)		(12,654	)		(22,698	)		(13,748	)		NM			NM
Noninterest income		64,838			59,901			64,559			68,096			67,853			8	%		(4	)%
Noninterest expense:
Employee compensation, incentives, and benefits		57,020			57,116			54,212			55,892			58,170				*		(2	)%
Other (a)		85,408			82,243			82,216			81,402			85,176			4	%			*

Total noninterest expense		142,428			139,359			136,428			137,294			143,346			2	%		(1	)%

Income before income taxes	$	64,786		$	74,041		$	90,382		$	93,572		$	73,838			(12	)%		(12	)%

Efficiency ratio (b)		67.17	%		67.66	%		63.70	%		65.95	%		70.46	%


Balance Sheet (millions)
Average loans	$	11,650		$	11,533		$	11,509		$	10,891		$	10,572			1	%		10	%
Average other earning assets		63			51			56			57			57			24	%		11	%
Total average earning assets		11,713			11,584			11,565			10,948			10,629			1	%		10	%
Average core deposits		14,413			13,991			13,402			13,078			12,736			3	%		13	%
Average other deposits		676			660			544			507			547			2	%		24	%
Total average deposits		15,089			14,651			13,946			13,585			13,283			3	%		14	%
Total period-end deposits		15,192			15,344			14,470			13,729			13,664			(1	)%		11	%
Total period-end assets		12,757			12,334			12,586			12,116			11,461			3	%		11	%

Net interest margin (c)		5.11	%		5.12	%		5.19	%		5.13	%		5.17	%
Loan yield		3.91			3.95			3.97			3.98			3.98
Deposit average yield		0.36			0.39			0.41			0.48			0.54


Noninterest Income Detail (thousands)
NSF / Overdraft fees (d)	$	12,263		$	11,282		$	13,466		$	14,239		$	13,316			9	%		(8	)%
Cash management fees		9,179			8,856			9,339			9,206			9,536			4	%		(4	)%
Debit card income		2,780			2,552			2,523			6,826			6,941			9	%		(60	)%
Other		5,799			5,952			5,906			5,256			4,738			(3	)%		22	%

Total deposit transactions and cash management		30,021			28,642			31,234			35,527			34,531			5	%		(13	)%
Insurance commissions		824			562			1,392			732			756			47	%		9	%
Trust services and investment management		6,493			5,824			5,837			6,098			6,714			11	%		(3	)%
Bankcard income (e)		5,504			5,457			7,025			5,025			4,912			1	%		12	%
Mortgage banking		1,092			859			1,389			1,121			947			27	%		15	%
Other service charges		2,643			2,770			2,662			2,605			2,513			(5	)%		5	%
Miscellaneous revenue (f)		18,261			15,787			15,020			16,988			17,480			16	%		4	%

Total noninterest income	$	64,838		$	59,901		$	64,559		$	68,096		$	67,853			8	%		(4	)%


Key Statistics
Financial center locations		173			174			176			176			178			(1	)%		(3	)%
Trust assets—total managed assets (millions)	$	3,837		$	3,472		$	3,345		$	3,296		$	3,421			11	%		12	%
First lien mortgage production (millions)	$	46		$	51		$	68		$	54		$	51			(10	)%		(10	)%

NM - Not meaningful

* Amount is less than one percent.

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

(a)	Includes allocated expenses, primarily company related benefits, technology and credit risk management.

(b)	Noninterest expense divided by total revenue.

(c)	Net interest margin is computed using total net interest income adjusted for FTE. Refer to the Non-GAAP to GAAP Reconciliation on page 27 of this supplement.

(d)	1Q12 decline primarily attributable to seasonality in NSF fee structure.

(e)	4Q11 includes $2.0 million related to Visa volume incentives.

(f)	2Q12 includes $1.8 million gain related to the sale of a branch.

CAPITAL MARKETS

Quarterly, Unaudited


																2Q12 Change vs.
	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Income Statement (thousands)
Net interest income	$	5,613		$	5,684		$	5,527		$	5,552		$	5,509			(1	)%		2	%
Noninterest income:
Fixed income		68,168			98,553			80,741			92,624			71,164			(31	)%		(4	)%
Other		6,796			8,222			7,489			6,881			6,761			(17	)%		1	%

Total noninterest income		74,964			106,775			88,230			99,505			77,925			(30	)%		(4	)%
Noninterest expense (a)		60,886			80,302			66,721			77,168			103,383			(24	)%		(41	)%

Income/(loss) before income taxes	$	19,691		$	32,157		$	27,036		$	27,889		$	(19,949	)		(39	)%		NM

Efficiency ratio (b)		75.56	%		71.41	%		71.16	%		73.45	%		NM
Fixed income average daily revenue	$	1,082		$	1,590		$	1,324		$	1,447		$	1,130			(32	)%		(4	)%


Balance Sheet (millions)
Average trading inventory	$	1,328		$	1,277		$	1,263		$	1,250		$	1,236			4	%		7	%
Average other earning assets		669			695			686			689			664			(4	)%		1	%
Total average earning assets		1,997			1,972			1,949			1,939			1,900			1	%		5	%
Total period-end assets		2,553			2,692			1,905			2,782			2,693			(5	)%		(5	)%

Net interest margin (c)		1.15	%		1.18	%		1.16	%		1.17	%		1.17	%

NM - Not meaningful

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

(a)	2Q11 includes $36.7 million associated with a litigation settlement.

(b)	Noninterest expense divided by total revenue.

(c)	Net interest margin is computed using total net interest income adjusted for FTE. Refer to the Non-GAAP to GAAP Reconciliation on page 27 of this supplement.

CORPORATE

Quarterly, Unaudited


																2Q12 Change vs.
	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Income Statement (thousands)
Net interest income/(expense)	$	(4,110	)	$	(4,727	)	$	(3,764	)	$	(494	)	$	412			13	%		NM
Noninterest income		3,838			8,938			9,662			2,767			8,848			(57	)%		(57	)%
Securities gains, net (a)		—			328			203			35,147			2			NM			NM
Noninterest expense (b)		19,374			22,521			29,244			19,013			36,287			(14	)%		(47	)%

Income/(loss) before income taxes	$	(19,646	)	$	(17,982	)	$	(23,143	)	$	18,407		$	(27,025	)		(9	)%		27	%


Average Balance Sheet (millions)
Average loans	$	124		$	137		$	152		$	170		$	154			(9	)%		(19	)%
Total earning assets	$	3,884		$	4,022		$	3,815		$	3,812		$	3,747			(3	)%		4	%
Net interest margin (c)		(.44	)%		(.49	)%		(.36	)%		(.01	)%		.04	%

NM - Not meaningful

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

(a)	3Q11 includes a $35.1 million gain associated with the sale of a portion of Visa Class B Shares.

(b)	4Q11 includes an $8.3 million increase in derivative liabilities associated with prior sales of Visa shares related to the decline in the conversion ratio for Visa Class B shares.

(c)	Net interest margin is computed using total net interest income adjusted for FTE. Refer to the Non-GAAP to GAAP Reconciliation on page 27 of this supplement.

NON-STRATEGIC

Quarterly, Unaudited


																2Q12 Change vs.
	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Income Statement (thousands)
Net interest income	$	23,968		$	24,899		$	27,517		$	31,210		$	31,356			(4	)%		(24	)%
Noninterest income:
Mortgage warehouse valuation		626			1,640			265			(7,084	)		1,820			(62	)%		(66	)%
Service fees		14,984			17,202			13,368			16,731			19,248			(13	)%		(22	)%
Change in MSR value - runoff		(6,665	)		(5,498	)		(3,567	)		(5,286	)		(5,526	)		(21	)%		(21	)%
Net hedging results		1,833			9,065			5,887			7,033			15,416			(80	)%		(88	)%
Other income (a)		(576	)		4,090			2,589			3,963			2,007			NM			NM

Total noninterest income		10,202			26,499			18,542			15,357			32,965			(62	)%		(69	)%
Securities gains/(losses), net (b)		5,065			—			—			15			—			NM			NM
Noninterest expense:
Repurchase and foreclosure provision (c)		250,000			49,256			45,032			52,790			24,563			NM			NM
Other expenses (d)		54,489			30,556			34,611			36,443			36,876			78	%		48	%

Total noninterest expense		304,489			79,812			79,643			89,233			61,439			NM			NM
Provision for loan losses		10,172			15,426			22,654			54,698			14,748			(34	)%		(31	)%

Loss before income taxes	$	(275,426	)	$	(43,840	)	$	(56,238	)	$	(97,349	)	$	(11,866	)		NM			NM


Average Balance Sheet (millions)
Loans	$	4,186		$	4,371		$	4,562		$	4,904		$	5,163			(4	)%		(19	)%
Loans held-for-sale		330			316			304			302			303			4	%		9	%
Trading securities		23			26			27			30			32			(12	)%		(28	)%
Mortgage servicing rights		137			141			149			174			194			(3	)%		(29	)%
Other assets		304			336			313			422			364			(10	)%		(16	)%
Total assets		4,980			5,190			5,355			5,832			6,056			(4	)%		(18	)%
Net interest margin (e)		2.11	%		2.11	%		2.24	%		2.36	%		2.27	%
Efficiency ratio (f)		NM			155.28	%		172.92	%		191.62	%		95.52	%


Mortgage Warehouse—Period-end (millions)
Ending warehouse balance (loans held-for-sale)	$	336		$	323		$	310		$	299		$	307			4	%		9	%


Key Servicing Metrics (g)
Ending servicing portfolio (millions) (h)	$	20,331		$	21,610		$	22,749		$	24,101		$	25,223			(6	)%		(19	)%
Average servicing portfolio (millions) (h)		20,978			22,184			23,466			24,562			25,666			(5	)%		(18	)%
Average number of loans serviced (h)		121,818			128,068			134,490			140,270			146,520			(5	)%		(17	)%


Portfolio Product Mix (average) (g)
GNMA (Ginnie)		3	%		3	%		3	%		3	%		3	%
FNMA/FHLMC (Fannie/Freddie)		35			35			35			36			36
Private		57			57			57			57			57

Sub-total		95			95			95			96			96
FHN permanent mortgage portfolio and warehouse		5			5			5			4			4

Total		100	%		100	%		100	%		100	%		100	%


Other Portfolio Statistics
Weighted average base servicing fee—legacy mortgage banking (i)		34			34			34			34			34
Weighted average base servicing fee—legacy equity lending (HELOCs and ILs)		50			50			50			50			50
Servicing cost per loan (annualized) (j)	$	279.17		$	293.33		$	295.20		$	223.03		$	135.34
Servicing book value (bps) (k) (l)		71			68			68			75			79
90+ delinquency rate, excluding foreclosures (m)		10.94	%		11.54	%		12.11	%		12.47	%		11.35	%

NM - Not meaningful

* Amount is less than one percent.

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

(a)	2Q12 includes a $2.3 million adjustment as a result of contingencies related to prior mortgage servicing sales.

(b)	2Q12 includes a $5.1 million gain on sale of venture capital investment.

(c)	2Q12 represents $250.0 million charge to the repurchase and foreclosure provision primarily related to a revision in estimate based on new information received from a GSE.

(d)	2Q12 includes $22.0 million loss accrual related to pending legal matters, $3.4 million in ancillary expenses associated with legacy mortgage wind-down activities, and $2.8 million related to the write-off of unrecoverable servicing advances.

(e)	Net interest margin is computed using total net interest income adjusted for FTE. Refer to the Non-GAAP to GAAP Reconciliation on page 27 of this supplement.

(f)	Noninterest expense divided by total revenue excluding securities gains/(losses).

(g)	Includes servicing of first liens, second liens, and HELOCs.

(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. Excludes UPB of loans transferred that did not qualify for sales treatment.

(i)	Includes weighted average fee of servicing assets and excess interest.

(j)	Calculated based on fees charged by subservicer divided by average number of loans serviced during the quarter.

(k)	Includes average MSR and mortgage trading securities divided by total average servicing portfolio.

(l)	For purposes of this calculation, average MSR excludes servicing transferred that did not qualify for sales treatment due to certain recourse provisions.

(m)	Excludes delinquent second liens and HELOCs.

CAPITAL HIGHLIGHTS

Quarterly, Unaudited


																2Q12 Changes vs.
(Dollars in thousands, except per share amounts)	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Tier 1 capital (a) (b)	$	2,626,268		$	2,841,064		$	2,850,452		$	2,875,113		$	2,818,535			(8	)%		(7	)%
Tier 2 capital (a) (b)	$	570,560		$	687,530		$	751,819		$	751,227		$	748,225			(17	)%		(24	)%

Total capital (a) (b)	$	3,196,828		$	3,528,594		$	3,602,271		$	3,626,340		$	3,566,760			(9	)%		(10	)%

Risk weighted assets (“RWA”) (a)	$	20,055,000		$	19,783,405		$	20,026,412		$	19,910,843		$	19,589,310			1	%		2	%
Tier 1 ratio (a)		13.10	%		14.36	%		14.23	%		14.44	%		14.39	%
Tier 2 ratio (a)		2.84	%		3.48	%		3.76	%		3.77	%		3.82	%

Total capital ratio (a)		15.94	%		17.84	%		17.99	%		18.21	%		18.21	%

Tier 1 common ratio (a) (c)		10.63	%		11.86	%		11.76	%		11.95	%		11.86	%
Leverage ratio (a)		10.56			11.31			11.41			11.65			11.54
Total equity to total assets		9.86			10.41			10.83			10.73			10.70
Adjusted tangible common equity to risk weighted assets (“TCE/RWA”) (a) (c) (e)		9.96			10.88			10.80			11.09			11.05
Tangible common equity/tangible assets (“TCE/TA”) (c) (d)		8.13			8.70			9.05			9.00			8.93

* Amount is less than one percent.

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

(a)	Current quarter is an estimate.

(b)	All quarters presented include $200 million of tier 1 qualifying trust preferred securities.

(c)	Refer to the Non-GAAP to GAAP Reconciliation on page 27 of this financial supplement.

(d)	Calculated using period-end balances.

(e)	See Glossary of Terms for definition of ratios.

ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited


																2Q12 Changes vs.
(Thousands)	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Allowance for Loan Losses Walk-Forward
Beginning reserve	$	346,016		$	384,351		$	449,645		$	524,091		$	589,128			(10	)%		(41	)%
Provision		15,000			8,000			10,000			32,000			1,000			88	%		NM
Charge-offs		(49,728	)		(57,083	)		(85,918	)		(120,655	)		(83,344	)		(13	)%		(40	)%
Recoveries		9,763			10,748			10,624			14,209			17,307			(9	)%		(44	)%

Ending balance (Restricted - $6.0 million) (a)	$	321,051		$	346,016		$	384,351		$	449,645		$	524,091			(7	)%		(39	)%

Reserve for unfunded commitments		4,434			5,358			6,945			9,220			12,522			(17	)%		(65	)%
Total allowance for loan losses plus reserve for unfunded commitments	$	325,485		$	351,374		$	391,296		$	458,865		$	536,613			(7	)%		(39	)%


Allowance for Loan Losses
Regional Banking	$	156,060		$	166,115		$	187,791		$	232,269		$	278,693			(6	)%		(44	)%
Non-Strategic		164,991			179,901			196,560			217,376			245,398			(8	)%		(33	)%
Corporate (b)		NM			NM			NM			NM			NM			NM			NM

Total allowance for loan losses	$	321,051		$	346,016		$	384,351		$	449,645		$	524,091			(7	)%		(39	)%


Nonperforming Assets
Regional Banking
Nonperforming loans (c)	$	178,650		$	192,560		$	199,000		$	239,666		$	283,754			(7	)%		(37	)%
Foreclosed real estate (g)		17,334			18,047			16,563			24,943			28,121			(4	)%		(38	)%

Total Regional Banking	$	195,984		$	210,607		$	215,563		$	264,609		$	311,875			(7	)%		(37	)%

Non-Strategic
Nonperforming loans - including held for sale (c) (d)	$	239,099		$	259,421		$	253,069		$	262,645		$	384,174			(8	)%		(38	)%
Foreclosed real estate (g)		31,583			41,085			52,322			55,111			50,671			(23	)%		(38	)%

Total Non-Strategic	$	270,682		$	300,506		$	305,391		$	317,756		$	434,845			(10	)%		(38	)%

Corporate
Nonperforming loans	$	207		$	207		$	207		$	207		$	1,140				*		(82	)%

Total nonperforming assets	$	466,873		$	511,320		$	521,161		$	582,572		$	747,860			(9	)%		(38	)%


Net Charge-Offs
Regional Banking	$	14,883		$	14,251		$	31,823		$	23,727		$	18,033			4	%		(17	)%
Non-Strategic		25,082			32,084			43,471			82,719			48,004			(22	)%		(48	)%

Total net charge-offs	$	39,965		$	46,335		$	75,294		$	106,446		$	66,037			(14	)%		(39	)%


Consolidated Key Ratios (e)
NPL %		2.03	%		2.20	%		2.16	%		2.55	%		3.62	%
NPA %		2.32			2.56			2.57			3.02			4.09
Net charge-offs %		1.01			1.16			1.84			2.65			1.67
Allowance / loans		1.98			2.17			2.34			2.77			3.26
Allowance / NPL		0.98	x		0.98	x		1.09	x		1.09	x		0.90	x
Allowance / NPA		0.85	x		0.84	x		0.91	x		0.91	x		0.79	x
Allowance / charge-offs		2.00	x		1.86	x		1.29	x		1.06	x		1.98	x


Other
Loans past due 90 days or more (f)	$	89,214		$	97,672		$	106,425		$	102,420		$	108,923			(9	)%		(18	)%
Guaranteed portion (f)		38,758			40,007			42,249			39,572			39,613			(3	)%		(2	)%
Foreclosed real estate from government insured loans		20,687			19,815			16,360			11,438			13,870			4	%		49	%
Period-end loans, net of unearned income (millions)		16,186			15,971			16,397			16,241			16,062			1	%		1	%
Remaining unfunded commitments (millions)		8,594			7,717			7,435			7,418			7,938			11	%		8	%

NM - Not meaningful

* Amount is less than one percent

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

(a)	Restricted balances parenthetically presented are as of June 30, 2012. See Glossary of Terms for definition of restricted balances.

(b)	The valuation adjustment taken upon exercise of clean-up calls includes expected losses.

(c)	In 2Q12, the process for identifying current junior liens behind delinquent or modified first liens for nonaccrual status was refined. Q1 consumer NPLs have been represented to agree with Q2 presentation.

(d)	2Q12 includes $89.5 million of loans held for sale before $46.9 million of negative fair value adjustments.

(e)	See Glossary of Terms for definitions of Consolidated Key Ratios.

(f)	Includes loans held for sale.

(g)	Excludes foreclosed real estate from government-insured mortgages.

ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited


																2Q12 Changes vs.
	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Key Portfolio Details
C&I
Period-end loans ($ millions)	$	7,982		$	7,705		$	8,015		$	7,706		$	7,180			4	%		11	%

30+ Delinq. % (a)		0.29	%		0.39	%		0.15	%		0.43	%		0.52	%
NPL %		1.97			2.00			2.02			2.60			2.96
Charge-offs % (qtr. annualized) (b)		0.42			0.08			1.62			0.70			0.35

Allowance / loans %		1.39	%		1.55	%		1.63	%		2.37	%		2.87	%
Allowance / charge-offs (b)		3.44	x		19.06	x		1.04	x		3.64	x		8.70	x


Income CRE
Period-end loans ($ millions)	$	1,225		$	1,247		$	1,257		$	1,287		$	1,311			(2	)%		(7	)%

30+ Delinq. % (a)		0.53	%		0.73	%		0.76	%		1.47	%		1.11	%
NPL %		4.67			5.59			5.50			6.27			8.54
Charge-offs % (qtr. annualized)		0.52			2.41			0.44			1.40			1.03

Allowance / loans %		2.39	%		2.64	%		3.15	%		3.67	%		6.04	%
Allowance / charge-offs		4.53	x		1.09	x		6.97	x		2.58	x		5.62	x


Residential CRE
Period-end loans ($ millions)	$	89		$	100		$	121		$	142		$	183			(11	)%		(51	)%

30+ Delinq. % (a)		6.69	%		1.06	%		0.72	%		0.61	%		5.14	%
NPL %		43.53			43.77			37.87			38.80			38.40
Charge-offs % (qtr. annualized)		5.74			5.70			5.96			8.01			8.19

Allowance / loans %		13.69	%		13.11	%		13.20	%		12.67	%		11.10	%
Allowance / charge-offs		2.25	x		2.06	x		2.02	x		1.33	x		1.22	x


Consumer Real Estate
Period-end loans ($ millions)	$	5,408		$	5,392		$	5,291		$	5,305		$	5,383				*			*

30+ Delinq. % (a)		1.29	%		1.42	%		1.70	%		1.61	%		1.52	%
NPL % (f)		0.65			0.72			0.67			0.80			0.64
Charge-offs % (qtr. annualized)		1.49			1.99			1.85			2.04			2.34

Allowance / loans %		2.12	%		2.26	%		2.63	%		2.55	%		2.47	%
Allowance / charge-offs		1.42	x		1.15	x		1.42	x		1.24	x		1.04	x


Permanent Mortgage
Period-end loans ($ millions) (c)	$	739		$	751		$	788		$	838		$	1,015			(2	)%		(27	)%

30+ Delinq. % (a)		1.49	%		2.16	%		3.33	%		5.21	%		4.00	%
NPL % (c)		4.35			4.47			4.15			2.87			13.53
Charge-offs % (qtr. annualized) (d)		1.36			2.08			2.74			18.83			3.21

Allowance / loans %		3.77	%		3.62	%		2.55	%		3.12	%		4.28	%
Allowance / charge-offs		2.71	x		1.70	x		0.90	x		0.14	x		1.34	x


Credit Card and Other
Period-end loans ($ millions)	$	279		$	271		$	284		$	299		$	295			3	%		(5	)%

30+ Delinq. % (a)		1.28	%		1.26	%		1.33	%		1.29	%		1.20	%
NPL %		0.74			0.79			0.75			1.69			3.21
Charge-offs % (qtr. annualized)		3.82			2.22			5.60			5.27			5.61

Allowance / loans %		2.27	%		2.27	%		2.49	%		2.84	%		3.08	%
Allowance / charge-offs		0.60	x		0.99	x		0.44	x		0.55	x		0.54	x


Restricted Real Estate Loans and Secured Borrowings
Period-end loans ($ millions) (e)	$	464		$	505		$	641		$	666		$	694			(8	)%		(33	)%

30+ Delinq. % (a)		2.74	%		2.71	%		3.15	%		2.98	%		2.85	%
NPL % (f)		1.27			1.80			1.04			0.87			0.80
Charge-offs % (qtr. annualized)		3.15			2.52			3.63			4.46			4.76

Allowance / loans %		4.37	%		5.04	%		4.97	%		4.86	%		4.76	%
Allowance / charge-offs		1.34	x		1.62	x		1.34	x		1.07	x		0.98	x

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

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

(b)	1Q12 includes recoveries of $4.8 million; 4Q11 includes a $20.6 million charge-off associated with one bank-related relationship (TRUP and bank holding company loan).

(c)	3Q11 includes the impact of the sale of $126 million in book value of nonperforming permanent mortgages.

(d)	3Q11 includes $40.2 million of net charge-offs (“NCO”) recognized due to sale of nonperforming mortgages.

(e)	2Q12 includes $447.5 million of consumer real estate loans and $16.9 million of permanent mortgage loans.

(f)	In 2Q12, the process for identifying current junior liens behind delinquent or modified first liens for nonaccrual status was refined. Q1 consumer NPLs have been represented to agree with Q2 presentation.

ASSET QUALITY: REGIONAL BANKING

Quarterly, Unaudited


																2Q12 Changes vs.
	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Total Regional Banking
Period-end loans ($ millions)	$	11,962		$	11,582		$	11,804		$	11,424		$	10,875			3	%		10	%

30+ Delinq. % (a)		0.51	%		0.59	%		0.41	%		0.61	%		0.81	%
NPL %		1.49			1.66			1.69			2.10			2.61
Charge-offs % (qtr. annualized)		0.51			0.50			1.10			0.86			0.68

Allowance / loans %		1.30	%		1.43	%		1.59	%		2.03	%		2.56	%
Allowance / charge-offs		2.61	x		2.90	x		1.49	x		2.47	x		3.85	x


Key Portfolio Details
C&I
Period-end loans ($ millions)	$	7,441		$	7,160		$	7,465		$	7,139		$	6,600			4	%		13	%

30+ Delinq. % (a)		0.31	%		0.41	%		0.16	%		0.45	%		0.56	%
NPL %		1.11			1.12			1.18			1.62			1.99
Charge-offs % (qtr. annualized) (b)		0.45			0.09			1.26			0.73			0.39

Allowance / loans %		1.14	%		1.29	%		1.36	%		1.95	%		2.43	%
Allowance / charge-offs (b)		2.64	x		14.78	x		1.12	x		2.89	x		6.59	x


Income CRE
Period-end loans ($ millions)	$	1,183		$	1,204		$	1,208		$	1,235		$	1,245			(2	)%		(5	)%

30+ Delinq. % (a)		0.55	%		0.76	%		0.43	%		0.63	%		1.17	%
NPL %		4.34			5.28			5.08			5.75			7.76
Charge-offs % (qtr. annualized)		0.53			1.88			0.40			1.17			0.91

Allowance / loans %		2.14	%		2.42	%		2.95	%		3.49	%		5.88	%
Allowance / charge-offs		3.99	x		1.28	x		7.08	x		2.96	x		6.37	x


Residential CRE
Period-end loans ($ millions)	$	79		$	86		$	93		$	103		$	124			(8	)%		(36	)%

30+ Delinq. % (a)		7.53	%		1.22	%		0.40	%		0.56	%		6.87	%
NPL %		40.77			41.83			40.28			36.74			35.22
Charge-offs % (qtr. annualized)		2.26			6.64			7.38			4.91			7.64

Allowance / loans %		14.72	%		14.07	%		14.33	%		14.27	%		12.62	%
Allowance / charge-offs		6.24	x		2.01	x		1.82	x		2.56	x		1.54	x


Consumer Real Estate
Period-end loans ($ millions)	$	2,981		$	2,861		$	2,757		$	2,654		$	2,618			4	%		14	%

30+ Delinq. % (a)		0.76	%		0.86	%		1.00	%		0.97	%		0.94	%
NPL % (c)		0.39			0.45			0.44			0.56			0.47
Charge-offs % (qtr. annualized)		0.38			0.56			0.54			0.60			0.62

Allowance / loans %		0.94	%		0.92	%		1.13	%		1.07	%		0.87	%
Allowance / charge-offs		2.48	x		1.66	x		2.13	x		1.81	x		1.40	x


Credit Card, Permanent Mortgage, and Other
Period-end loans ($ millions)	$	278		$	271		$	281		$	293		$	288			3	%		(3	)%

30+ Delinq. % (a)		1.32	%		1.40	%		1.30	%		1.19	%		1.23	%
NPL %		0.15			0.03			0.02			0.03			0.12
Charge-offs % (qtr. annualized)		2.99			2.38			3.08			3.52			3.52

Allowance / loans %		2.26	%		2.20	%		2.27	%		2.40	%		2.41	%
Allowance / charge-offs		0.76	x		0.91	x		0.73	x		0.70	x		0.68	x

ASSET QUALITY: CORPORATE

Permanent Mortgage
Period-end loans ($ millions)	$	119		$	127		$	141		$	161		$	175			(6	)%		(32	)%

30+ Delinq. % (a)		0.49	%		1.33	%		0.67	%		0.73	%		2.03	%
NPL %		0.17			0.16			0.15			0.13			0.65
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

* Amount is less than one percent

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

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

(b)	1Q12 includes recoveries of $4.6 million; 4Q11 includes an $11.7 million charge-off associated with one bank holding company loan.

(c)	In 2Q12, the process for identifying current junior liens behind delinquent or modified first liens for nonaccrual status was refined. Q1 consumer NPLs have been represented to agree with Q2 presentation.

ASSET QUALITY: NON-STRATEGIC

Quarterly, Unaudited


																2Q12 Changes vs.
	2Q12			1Q12			4Q11			3Q11			2Q11			1Q12			2Q11
Total Non-Strategic
Period-end loans ($ millions)	$	4,105		$	4,262		$	4,452		$	4,656		$	5,012			(4	)%		(18	)%

30+ Delinq. % (a)		1.72	%		1.89	%		2.53	%		2.90	%		2.29	%
NPL %		3.64			3.72			3.48			3.73			5.92
Charge-offs % (qtr. annualized)		2.41			2.95			3.78			6.69			3.73

Allowance / loans %		4.02	%		4.22	%		4.41	%		4.67	%		4.90	%
Allowance / charge-offs		1.64	x		1.39	x		1.14	x		0.66	x		1.27	x


Key Portfolio Details
C&I (b)
Period-end loans ($ millions)	$	541		$	546		$	549		$	567		$	580			(1	)%		(7	)%

30+ Delinq. % (a)		—	%		0.12	%		—	%		0.18	%		—	%
NPL %		13.77			13.58			13.50			14.93			13.99
Charge-offs % (qtr. annualized) (c)		—			NM			6.15			0.37			NM

Allowance / loans %		4.78	%		4.94	%		5.29	%		7.66	%		7.95	%
Allowance / charge-offs		NM			NM			0.84	x		20.42	x		NM


Income CRE
Period-end loans ($ millions)	$	42		$	43		$	49		$	52		$	66			(2	)%		(36	)%

30+ Delinq. % (a)		—	%		—	%		8.84	%		21.51	%		—	%
NPL %		14.07			14.45			15.93			18.80			23.20
Charge-offs % (qtr. annualized)		0.30			15.96			1.29			6.29			2.64

Allowance / loans %		9.51	%		9.00	%		8.08	%		7.82	%		9.01	%
Allowance / charge-offs		31.70	x		0.50	x		6.09	x		1.09	x		2.29	x


Residential CRE
Period-end loans ($ millions)	$	10		$	13		$	28		$	38		$	59			(23	)%		(83	)%

30+ Delinq. % (a)		—	%		—	%		1.79	%		0.76	%		1.49	%
NPL %		65.64			56.20			29.77			44.39			45.06
Charge-offs % (qtr. annualized)		30.43			1.59			1.70			15.10			9.22

Allowance / loans %		5.40	%		6.96	%		9.40	%		8.33	%		7.90	%
Allowance / charge-offs		0.15	x		2.82	x		4.65	x		0.41	x		0.71	x


Consumer Real Estate
Period-end loans ($ millions)	$	2,427		$	2,531		$	2,535		$	2,651		$	2,765			(4	)%		(12	)%

30+ Delinq. % (a)		1.95	%		2.06	%		2.46	%		2.26	%		2.07	%
NPL % (d)		0.96			1.04			0.92			1.05			0.81
Charge-offs % (qtr. annualized)		2.81			3.60			3.21			3.44			3.93

Allowance / loans %		3.56	%		3.77	%		4.27	%		4.02	%		3.98	%
Allowance / charge-offs		1.24	x		1.06	x		1.30	x		1.14	x		0.99	x


Permanent Mortgage
Period-end loans ($ millions) (e)	$	602		$	604		$	628		$	657		$	818				*		(26	)%

30+ Delinq. % (a)		1.61	%		2.25	%		3.95	%		6.35	%		4.46	%
NPL %		5.28			5.51			5.17			3.61			16.64
Charge-offs % (qtr. annualized) (f)		1.67			2.59			3.46			23.31			3.88

Allowance / loans %		4.56	%		4.45	%		3.17	%		3.94	%		5.24	%
Allowance / charge-offs		2.68	x		1.67	x		0.90	x		0.14	x		1.32	x


Other Consumer
Period-end loans ($ millions)	$	19		$	20		$	22		$	25		$	30			(5	)%		(37	)%

30+ Delinq. % (a)		3.52	%		3.04	%		2.85	%		4.32	%		2.07	%
NPL %		9.32			10.39			9.83			20.12			31.24
Charge-offs % (qtr. annualized)		11.66			NM			30.70			19.63			19.98

Allowance / loans %		2.13	%		2.68	%		3.98	%		6.98	%		9.27	%
Allowance / charge-offs		0.18	x		NM			0.12	x		0.33	x		0.41	x


Restricted Real Estate Loans and Secured Borrowings
Period-end loans ($ millions) (g)	$	464		$	505		$	641		$	666		$	694			(8	)%		(33	)%

30+ Delinq. % (a)		2.74	%		2.71	%		3.15	%		2.98	%		2.85	%
NPL % (d)		1.27			1.80			1.04			0.87			0.80
Charge-offs % (qtr. annualized)		3.15			2.52			3.63			4.46			4.76

Allowance / loans %		4.37	%		5.04	%		4.97	%		4.86	%		4.76	%
Allowance / charge-offs		1.34	x		1.62	x		1.34	x		1.07	x		0.98	x

NM - Not meaningful

* Amount is less than one percent

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

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

(b)	Includes trust preferred loan portfolio and other exited businesses.

(c)	4Q11 includes an $8.9 million charge-off associated with one TRUP loan.

(d)	In 2Q12, the process for identifying current junior liens behind delinquent or modified first liens for nonaccrual status was refined. Q1 consumer NPLs have been represented to agree with Q2 presentation.

(e)	3Q11 includes the impact of the sale of $126 million in book value of nonperforming permanent mortgages.

(f)	3Q11 includes $40.2 million of net charge-offs (“NCO”) recognized due to sale of nonperforming mortgages.

(g)	2Q12 includes $447.5 million of consumer real estate loans and $16.9 million of permanent mortgage loans.

ROLLFORWARDS OF NONPERFORMING LOANS AND ORE INVENTORY

Unaudited


(Millions)	2Q12			1Q12			4Q11			3Q11			2Q11
NPL Rollforward (a)
Beginning NPLs	$	270		$	279		$	341		$	404		$	462
+ Additions		21			22			17			36			31
+ Principal increase		1			1			1			2			2
- Resolutions and payments		(20	)		(19	)		(39	)		(54	)		(66	)
- Net charge-offs		(12	)		(10	)		(37	)		(22	)		(15	)
- Transfer to ORE		(1	)		(3	)		(3	)		(10	)		(5	)
- Upgrade to accrual		(4	)		—			(1	)		(15	)		(5	)

Ending NPLs	$	255		$	270		$	279		$	341		$	404

(a)	Includes Commercial and One-Time Close Portfolios only.


(Millions)	2Q12			1Q12			4Q11			3Q11			2Q11
ORE Inventory Rollforward (a)
Beginning balance	$	59.1		$	68.9		$	80.1		$	78.8		$	94.4
Valuation adjustments		(4.2	)		(5.2	)		(4.4	)		(4.3	)		(4.6	)

Adjusted balance		54.9			63.7			75.7			74.5			89.8
+ New ORE		8.1			10.2			13.9			17.0			17.0
+ Capitalized expenses		0.2			0.2			0.2			0.5			1.0
Disposals:
- Single transactions		(12.6	)		(13.7	)		(20.7	)		(10.2	)		(24.7	)
- Bulk sales		(1.7	)		(1.3	)		(0.2	)		(1.7	)		(4.3	)

Ending balance	$	48.9		$	59.1		$	68.9		$	80.1		$	78.8

(a)	ORE excludes foreclosed assets related to government insured mortgages.

COMMERCIAL LOANS: PORTFOLIO METRICS

Unaudited

C&I Portfolio: $8.0 Billion (49.3% of Total Loans)


	% OS
General Corporate, Commercial, and Business Banking Loans		77	%
Loans to Mortgage Companies		16	%
Trust Preferred Loans		5	%
Bank Holding Company Loans		2	%

Income CRE Portfolio: $1.2 Billion (7.6% of Total Loans)


Top 10 States as of June 30, 2012	% NPL			% OS
Tennessee		3.18	%		60	%
North Carolina		11.67	%		6	%
Georgia		8.20	%		6	%
Florida		14.16	%		5	%
Mississippi		11.95	%		5	%
South Carolina		—	%		4	%
Texas		2.76	%		3	%
West Virginia		—	%		3	%
Alabama		—	%		2	%
Virginia		0.80	%		1	%

CONSUMER LOANS: PORTFOLIO METRICS

Unaudited

Consumer Real Estate (primarily Home Equity) Portfolio: $5.9 Billion (36.2% of Total Loans) (a)


Origination LTV and FICO for Portfolio as of June 30, 2012	Loan-to-Value
(excludes whole loan insurance)	<=60%	60% - <=80%	80% - 90%	>90%
FICO score greater than or equal to 740	12 %	22 %	16 %	8 %
FICO score 720-739	2 %	4 %	4 %	2 %
FICO score 700-719	1 %	4 %	3 %	2 %
FICO score 660-699	2 %	5 %	2 %	3 %
FICO score 620-659	1 %	2 %	1 %	1 %
FICO score less than 620	— %	1 %	1 %	1 %

Origination LTV and FICO for Portfolio - Regional Bank as of June 30, 2012	Loan-to-Value
(excludes whole loan insurance)	<=60%	60% -<=80%	80% -90%	>90%
FICO score greater than or equal to 740	13 %	22 %	17 %	9 %
FICO score 720-739	1 %	4 %	3 %	2 %
FICO score 700-719	1 %	3 %	2 %	2 %
FICO score 660-699	2 %	4 %	3 %	3 %
FICO score 620-659	1 %	2 %	1 %	1 %
FICO score less than 620	1 %	1 %	1 %	1 %

Origination LTV and FICO for Portfolio - Non-Strategic as of June 30, 2012	Loan-to-Value
(excludes whole loan insurance)	<=60%	60% - <=80%	80% - 90%	>90%
FICO score greater than or equal to 740	11 %	23 %	16 %	7 %
FICO score 720-739	2 %	5 %	4 %	2 %
FICO score 700-719	2 %	4 %	4 %	2 %
FICO score 660-699	2 %	5 %	1 %	3 %
FICO score 620-659	1 %	1 %	1 %	1 %
FICO score less than 620	— %	1 %	1 %	1 %


Consumer Real Estate Portfolio Detail:
		Origination Characteristics								NCO’s %
Vintage	Balance ($ B)	W/A Age (mo.)	CLTV	FICO			% Broker (b)	% TN	% 1st lien	QTD
pre-2003	$0.2	127	76 %		714		17 %	44 %	32 %	0.59 %
2003	$0.4	108	75 %		729		16 %	32 %	38 %	0.69 %
2004	$0.6	95	79 %		725		29 %	21 %	27 %	1.42 %
2005	$0.9	83	81 %		730		19 %	17 %	16 %	2.81 %
2006	$0.8	72	78 %		734		6 %	23 %	17 %	4.10 %
2007	$0.9	60	80 %		738		15 %	26 %	18 %	2.77 %
2008	$0.4	49	75 %		747		8 %	72 %	51 %	(0.28) %
2009	$0.3	37	72 %		752		— %	87 %	58 %	0.20 %
2010	$0.3	37	80 %		750		— %	92 %	73 %	— %
2011	$0.6	11	77 %		760		— %	90 %	85 %	— %
2012	$0.5	3	76 %		764		— %	89 %	92 %	— %
Total	$5.9	61	78 %		740	(c)	11 %	46 %	41 %	1.64 %

(a)	For purposes of this disclosure, consumer real estate portfolio includes $447.5 million of restricted real estate loans and secured borrowings.

(b)	Correspondent and Wholesale.

(c)	740 average portfolio origination FICO; 731 weighted average portfolio FICO (refreshed).

Permanent Mortgage Portfolio: $0.8 Billion (4.7% of Total Loans) (a) (b) (c)


	Loan-to-Value
	<= 60%			60% - <=80%			80% - 90%			>90%
Origination LTV for Portfolio as of June 30, 2012		18	%		71	%		5	%		6	%


Top 10 States as of June 30, 2012	Del. %			% OS
California		3.57	%		24	%
Texas		4.58	%		10	%
Washington		1.90	%		8	%
Virginia		0.32	%		6	%
Maryland		0.36	%		4	%
Arizona		2.63	%		4	%
Oregon		8.70	%		4	%
North Carolina		5.71	%		3	%
Florida		9.52	%		3	%
Tennessee		4.77	%		3	%

(a)	For purposes of this disclosure, permanent mortgage portfolio includes $17.0 million of restricted real estate loans.

(b)	Documentation type: 69% full doc; 26% stated; 5% other.

(c)	Product type: 68% jumbo; 13% Alt A; 19% other.

NON-GAAP TO GAAP RECONCILIATION

Quarterly, Unaudited


(Thousands)	2Q12			1Q12			4Q11			3Q11			2Q11
Tangible Common Equity (Non-GAAP)
(A) Total equity (GAAP)	$	2,514,406		$	2,674,173		$	2,684,637		$	2,743,230		$	2,681,382
Less: Noncontrolling interest (a)		295,165			295,165			295,165			295,165			295,165

(B) Total common equity	$	2,219,241		$	2,379,008		$	2,389,472		$	2,448,065		$	2,386,217
Less: Intangible assets (GAAP) (b)		158,901			159,880			159,902			160,902			164,067

(C) Tangible common equity (Non-GAAP)	$	2,060,340		$	2,219,128		$	2,229,570		$	2,287,163		$	2,222,150
Less: Unrealized gains on AFS securities, net of tax		63,679			67,077			67,069			79,358			58,068

(D) Adjusted tangible common equity (Non-GAAP) (c)	$	1,996,661		$	2,152,051		$	2,162,501		$	2,207,805		$	2,164,082


Tangible Assets (Non-GAAP)
(E) Total assets (GAAP)	$	25,492,955		$	25,678,969		$	24,789,384		$	25,571,469		$	25,054,066
Less: Intangible assets (GAAP) (b)		158,901			159,880			159,902			160,902			164,067

(F) Tangible assets (Non-GAAP)	$	25,334,054		$	25,519,089		$	24,629,482		$	25,410,567		$	24,889,999


Period-end Shares Outstanding
(G) Period-end shares outstanding		248,810			252,667			257,468			263,619			263,699


Tier 1 Common (Non-GAAP)
(H) Tier 1 capital (d) (e)	$	2,626,268		$	2,841,064		$	2,850,452		$	2,875,113		$	2,818,535
Less: Noncontrolling interest—FTBNA preferred stock (a) (f)		294,816			294,816			294,816			294,816			294,816
Less: Trust preferred (g)		200,000			200,000			200,000			200,000			200,000

(I) Tier 1 common (Non-GAAP)	$	2,131,452		$	2,346,248		$	2,355,636		$	2,380,297		$	2,323,719


Risk Weighted Assets
(J) Risk weighted assets (d) (e)	$	20,055,000		$	19,783,405		$	20,026,412		$	19,910,843		$	19,589,310


Ratios
(C)/(F) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP)		8.13	%		8.70	%		9.05	%		9.00	%		8.93	%
(A)/(E) Total equity to total assets (GAAP)		9.86	%		10.41	%		10.83	%		10.73	%		10.70	%
(C)/(G) Tangible book value per common share (Non-GAAP)	$	8.28		$	8.78		$	8.66		$	8.68		$	8.43
(B)/(G) Book value per common share (GAAP)	$	8.92		$	9.42		$	9.28		$	9.29		$	9.05
(I)/(J) Tier 1 common ratio (Non-GAAP) (d)		10.63	%		11.86	%		11.76	%		11.95	%		11.86	%
(H)/(E) Tier 1 capital to total assets (GAAP) (d)		10.30	%		11.06	%		11.50	%		11.24	%		11.25	%
(D)/(J) Adjusted tangible common equity to risk weighted assets (Non-GAAP)
(“TCE/RWA”) (c) (d)		9.96	%		10.88	%		10.80	%		11.09	%		11.05	%


Net interest income adjusted for impact of fully taxable equivalent (“FTE”) (Non-GAAP)
Regional Banking
Net interest income (GAAP)	$	147,204		$	146,073		$	149,597		$	140,072		$	135,583
FTE adjustment		1,580			1,493			1,510			1,434			1,353

Net interest income adjusted for impact of FTE (Non-GAAP)	$	148,784		$	147,566		$	151,107		$	141,506		$	136,936


Capital Markets
Net interest income (GAAP)	$	5,613		$	5,684		$	5,527		$	5,552		$	5,509
FTE adjustment		160			140			106			81			76

Net interest income adjusted for impact of FTE (Non-GAAP)	$	5,773		$	5,824		$	5,633		$	5,633		$	5,585


Corporate
Net interest income (GAAP)	$	(4,110	)	$	(4,727	)	$	(3,764	)	$	(494	)	$	412
FTE adjustment		16			26			34			40			68

Net interest income adjusted for impact of FTE (Non-GAAP)	$	(4,094	)	$	(4,701	)	$	(3,730	)	$	(454	)	$	480


Non-Strategic
Net interest income (GAAP)	$	23,968		$	24,899		$	27,517		$	31,210		$	31,356
FTE adjustment		—			—			—			—			—

Net interest income adjusted for impact of FTE (Non-GAAP)	$	23,968		$	24,899		$	27,517		$	31,210		$	31,356


Total Consolidated
Net interest income (GAAP)	$	172,675		$	171,929		$	178,877		$	176,340		$	172,860
FTE adjustment		1,756			1,659			1,650			1,555			1,497

Net interest income adjusted for impact of FTE (Non-GAAP)	$	174,431		$	173,588		$	180,527		$	177,895		$	174,357

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)	See Glossary of Terms for definition of ratio.

(d)	Current quarter is an estimate.

(e)	Defined by and calculated in conformity with bank regulations.

(f)	Represents FTBNA preferred stock included in noncontrolling interest.

(g)	Included in Term borrowings on the Consolidated Balance Sheet.

GLOSSARY OF TERMS

Adjusted Tangible Equity/RWA: Common shareholders’ equity excluding intangible assets and unrealized gains/losses on available-for-sale securities divided by risk weighted assets.

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

Lower of Cost or Market (“LOCOM”): A method of accounting for certain assets by recording them at the lower of their historical cost or their current market value.

Restricted Real Estate Loans and Secured Borrowings: Restricted loans are assets of a consolidated variable interest entity that can be used only to settle obligations of the consolidated variable interest entity and liabilities of a consolidated variable interest entity for which creditors (or beneficial interest holders) do not have recourse to the general credit of the primary beneficiary. Line item also includes loans from nonconsolidated variable interest entities that did not qualify for sale treatment. Such loans secure borrowings that are classified as term borrowings.

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.

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.

First Horizon National Corporation

Second Quarter 2012 Earnings

July 20, 2012

Portions of this presentation use non-GAAP financial information. Each of those portions is so noted, and a

reconciliation

that

non-GAAP

information

comparable

GAAP

information

provided

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

detail

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.

Successful Execution:

2Q12 Accomplishments

Optimize

Business Mix for

Profitability &

Returns

Improve

Productivity

& Efficiency

Pre-tax

charge

$272mm,

after-tax

impact

$168mm,

EPS

impact

~$0.67

$250mm

addition

mortgage

repurchase

reserve

expected

cover

losses

resulting

from current pending and projected repurchase requests from Fannie and Freddie

$22mm of expense for addition to litigation reserve

Executing $139mm of cost saves in Core Businesses

Regional Banking expenses down 1%

Regional Banking revenue per FTE of $66k, up 12% from $59k

Tier 1 ratio at 13.1%

Tier 1 Common at 10.6%

TCE/TA at 8.1%

Repurchased $126mm of common stock since October 2011

15.1

million

volume

weighted

average

price

$8.28

per

Regional

Banking

pre-tax

pre-provision

net

revenue

$70mm,

$10mm

Regional Banking pre-tax income at $65mm, down $9mm

Regional Banking average loans up 10%

Regional Banking average core deposits up 13%

Capital Markets fixed income average daily revenues at $1.1mm

Non-Strategic average loans decreased 19%

Net charge-offs declined 39%

Nonperforming assets down 38%

Deploy Capital

In Disciplined

Manner

All data is 2Q12 compared to 2Q11 unless otherwise noted.

Pre-tax pre-provision net revenue and EPS impact are non-GAAP numbers,

and a reconciliation is provided on slide 6 and in the appendix,

respectively.

Core Businesses include Regional Banking, Capital Markets, and Corporate segments.

Tier 1 and Tier 1 Common: current quarter is estimate; Tier 1 Common and TCE, & TA are non-GAAP numbers, and a reconciliation is provided in the appendix.

Does not include $0.03 broker commission paid.

FINANCIAL RESULTS

Consolidated Financial Results

Core

Businesses

pre-tax

income

$65mm

Net loss available to common shareholders of

$125mm, with diluted EPS of $(0.50)

Total revenues at $332mm, down 11%

Regional Banking revenues up 3% due to higher NII

and improved fee income

Capital Markets revenues down 28% from lower

fixed income activity

Total average loans at $16B, down 1%

Regional Banking total average loans up 1%

Non-Strategic total average loans down 4%

Average core deposits at $16B, down 1%

Regional Banking average core deposits up 3%

Net interest margin at 3.16%, up 4bps due to lower

cash balances, higher loan fees and lower deposit costs

Total provision at $15mm

Net charge-offs at $40mm, down 14%

Significant Items:

$272mm expense related to GSE mortgage repurchase

and litigation reserves

$5mm of securities gain

Numbers and percentages may not add to total due to rounding.

All data is 2Q12 compared to 1Q12 unless otherwise noted.

Linked Quarter Comparison

Income Statement

Net interest income

$173

$172

$173

Noninterest income

$154

$202

$188

Securities gains / (losses), net

Total revenue

$332

$374

$360

Noninterest expense

$527

$322

$344

Pre-tax, pre-provision net revenue

($196)

$52

$16

Provision

$15

Pre-tax income / (loss)

($211)

$44

$15

Taxes

($88)

$11

($4)

Continuing operations

($122)

$34

$19

Net income / (loss)

($122)

$33

$23

Net income / (loss) available

to common shareholders

($125)

$31

$20

Common Stock Data

Diluted shares (in millions)

249

255

263

Diluted EPS from continuing ops

($0.50)

$0.12

$0.06

Diluted EPS

($0.50)

$0.12

$0.08

Balance Sheet

($ in billions)

Total average loans

$16.0

$15.9

Total average deposits

$16.3

$16.4

$15.4

Loan yield

4.09%

4.08%

4.09%

Interest-bearing core deposit rate

0.44%

0.47%

0.64%

1Q12

2Q11

2Q12

Core Businesses include Regional Banking, Capital Markets, and Corporate segments. Core Businesses’ pre-tax income is a non-GAAP number and reconciliation is provided in the appendix

($ in millions)

Strength in Core Businesses:

Regional Banking

Pre-tax pre-provision net revenue up 5% to $70mm

Net interest income up 1%, driven by higher loan fees

Fee income up 8%

Deposit transaction fees up 5% due to increase in NSF

fees, debit card income, and cash management fees

Expenses up 2% primarily from technology

investments

Period end loans up 3%

Total average loans up 1%

Commercial loans flat

Consumer loans up 4%

Linked Quarter Comparison

Numbers may not add to total due to rounding.

All data is 2Q12 compared to 1Q12 unless otherwise noted.

ROA, NIM, and NCO / Average Loans are annualized.

1Q12

2Q11

Income Statement

Net interest income

$147

$146

$136

NSF/overdraft fees

$12

$11

$13

(8)%

Cash mgmt fees

$10

(4)%

Debit card income

(60)%

Other

$41

$37

$38

Noninterest income

$65

$60

$68

(4)%

Total revenues

$212

$206

$203

Noninterest expense

$142

$139

$143

(1)%

Pre-tax pre-provision

net revenue

$70

$67

$60

16%

Loan loss provision

($7)

($14)

Pre-tax income

$65

$74

(12)%

Taxes

$23

$27

(14)%

Net income

$41

$47

(12)%

(11)%

Balance Sheet

Total average loans

$11.7

$11.5

$10.6

10%

Total average deposits

$15.1

$14.7

$13.3

14%

Loan yield

3.91%

3.95%

3.98%

Deposit rate

0.36%

0.39%

0.54%

Bonefish Ratios

ROA

1.3%

1.5%

1.7%

NIM

5.11%

5.12%

5.17%

NCOs / average loans

0.51%

0.50%

0.68%

Fee income / revenue

31%

29%

33%

Efficiency ratio

67%

68%

70%

Regional Banking

2Q12

1Q12

2Q11

2Q12 vs

($ in millions)

($ in billions)

Regional Banking Commercial Loan

Pipeline & Fundings

Regional Banking Total Average Loans & Deposits

$1.0B

Significant focus to enhance profitability of balance

sheet, with spread up 11bps year-over-year and

relatively stable linked quarter

Loan pipeline remains solid

Areas of demand include C&I and Consumer

Growth in loans to mortgage companies and

consumer lending

Competitive conditions on pricing and structure are

challenging

Pricing credit for attractive returns on capital

Strength in Core Businesses:

Regional Banking Balance Sheet

Regional Banking Yields and Rates

400bps

Numbers/percentages may not add due to rounding.

Spread is loan yield minus deposit rate.

$1.0B

$0.0

$0.2

$0.4

$0.6

$0.8

2Q11

1Q12

2Q12

Pipeline

Funded

$10

$11

$12

$13

$14

$15

$16B

2Q11

3Q11

4Q11

1Q12

2Q12

Total Average Deposits

Total Average Loans

100

200

300

2Q11

3Q11

4Q11

1Q12

2Q12

Spread

Deposit Rate

Loan Yield

344

350

356

355

Strength in Core Businesses:

Capital Markets

Pre-tax income of $19.7mm vs $32.2mm

Total revenue of $81mm vs $112mm

Fixed income ADR of $1.1mm vs $1.6mm, decrease

driven by slower customer activity due to uncertain

interest rate outlook

Expenses decreased 24% linked quarter and 9%

from 2Q11, excluding the 2Q11 litigation settlement

charge of $36.7mm

Linked Quarter Comparison

Numbers may not add to total due to rounding.

All data is 2Q12 compared to 1Q12 unless otherwise noted.

ROA, NIM, and NCO / Average Loans are annualized.

1Q12

2Q11

Income Statement

($ in millions)

Net interest income

(1)%

Noninterest income

$75

$107

$78

(30)%

(4)%

Total revenues

$81

$112

$83

(28)%

(3)%

Noninterest expense

$61

$80

$103

(24)%

(41)%

Pre-tax income / (loss)

$20

$32

($20)

(39)%

Taxes

$12

($8)

(39)%

Net income / (loss)

$12

$20

($12)

(38)%

Fixed income

average daily revenue

$1.1

$1.6

$1.1

(32)%

(4)%

Bonefish Ratios

ROA

2.1%

3.4%

(2.2)%

Efficiency ratio

76%

71%

Capital Markets

2Q12

1Q12

2Q11

2Q12 vs

Improving Productivity and Efficiency,

Expect Lower Environmental Costs

$139mm identified in cost savings, in addition to expected reduction in future Non-Strategic expenses over the long-

term

$123mm annualized impact in 2Q12 run rate

Executing

ongoing

efficiency

initiatives,

targeted

largely

completed

the

end

2012

$250mm of GSE-related mortgage repurchase expense in 2Q12 is expected to result in lower Non-Strategic expenses

Near-term offsets from technology investments and pension related expenses

Targeting

~$1B

annualized

level

consolidated

expenses

the

end

2012,

a 25-30% or ~$350mm reduction from the 2010 level

Core Businesses’

Expenses¹

$250mm

10%

$246²

$223

$150

$175

$200

$225

2Q11

2Q12

Numbers/percentages may not add due to rounding.

Core

Businesses

include

Regional

Banking,

Capital

Markets,

and

Corporate

segments.

Core

Businesses’

expense

non-GAAP

number

and

reconciliation

provided

the

appendix

Excludes the 2Q11 Capital Markets’

litigation settlement charge of $36.7mm.

Fannie

Freddie

Total GSE Loans Sold

Ginnie Loans Sold

Total Agency Loans Sold

Total Demands (Request Rate)

Resolved

Cumulative Average Rescission Rate

Average Loss Severity

Agency Mortgage Repurchase-Related Expenses

Mortgage Repurchase Reserve

Numbers may not add due to rounding.

As of 2Q12.

($ in millions)

Beginning Balance

Net Realized Losses

Provision

Ending Balance

2Q12

$161

$(51)

$250

$360

2Q11

$183

$(39)

$25

$169

3Q11

$169

$(53)

$53

$169

4Q11

$169

$(49)

$45

$165

1Q12

$165

$(53)

$49

$161

Originations: 2005-2008

Amount

$39.6B

$18.0B

$57.6B

$11.9B

$69.5B

$1.8B / 2.6%

$1.4B

45 -

55%

50 -

60%

Realized Losses plus Reserve through 1Q12

2Q12

Provision

Cumulative Total Losses plus Reserve

Total GSE Loans Sold 2005-08

Aggregate Expected Loss Ratio

% of Originations

% of Requests

% of Realized Losses

Repurchase %

31%

29%

25%

48%

69%

71%

75%

58%

~$500mm

~$250mm

~$750mm

$57.6B

1.3%

GSE Loans Sold

Fannie Freddie

GSE Loans Sold

Pipeline of requests increased to $431mm from $380mm in 1Q12

Agency requests increased by $85mm linked quarter, reflecting a backlog of requests

Mortgage insurer-related cancellations down $25mm from 2Q11 and down $2mm linked quarter

Resolutions up 6% linked quarter

2Q12 cumulative rescission rates continue to average in the 45-55% range

Average loss severity remains in the 50-60% range

No repurchase requests related to first lien FHN securitizations

Sold origination and servicing platform in August 2008

New Agency Repurchase

Requests by Vintage

Total Pipeline by Vintage

Total Pipeline of

Repurchase Requests

Mortgage Repurchase-Related Expenses

$300mm

$500mm

$50

$100

$150

$200

$250

2Q11

3Q11

4Q11

1Q12

2Q12

2006 & Prior

2007

2008

$100

$200

$300

$400

2Q11

3Q11

4Q11

1Q12

2Q12

New Requests

Resolved

Pipeline

$100

$200

$300

$400

2Q11

3Q11

4Q11

1Q12

2Q12

2006 & Prior

2007

2008

Numbers may not add due to rounding. Data as of 2Q12.

Based

UPB.

The

pipeline

represents

active

investor

claims

and

mortgage

insurance

(MI)

cancellations

under

review,

both

which

could

occur

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. ²Requests reflect pipeline as of each respective quarter end.

Successful Execution:

Asset Quality Trends Continue to Improve

2Q12 net charge-offs of $40mm

NCOs down 14% linked quarter and 39% vs 2Q11

Regional Banking NCOs down $3mm or 17% from 2Q11

Non-Strategic NCOs down $23mm or 48% vs 2Q11

Reserves for loan losses decreased $25mm linked quarter to $321mm or 1.98% of period end loans

Reserves and Net Charge-Offs

Numbers may not add due to rounding.

Data as of 2Q12, unless otherwise noted.

($ in millions)

4Q11

1Q12

2Q12

Beginning ORE

$80

$69

$59

Valuation Adjustments

($4)

($5)

($4)

Adjusted Balance

$76

$64

$55

+ New ORE

$14

$10

+ Capitalized Expenses

- Dispositions:

($21)

($15)

($14)

Single Transactions

($21)

($14)

($13)

Auctions

Bulk Sales

(0)

(1)

Ending ORE

$69

$59

$49

($ in millions)

4Q11

1Q12

2Q12

Beginning NPLs

$341

$279

$270

+ Additions

$17

$22

$21

+ Principal Increase

- Resolutions/Payments

($39)

($19)

($20)

- Net Charge-Offs

($37)

($10)

($12)

- Transfer to ORE

($3)

($1)

- Upgrade to Accrual

($1)

($4)

Ending NPLs

$279

$270

$255

Successful Execution:

Non-Performing Assets Decline

Non-Performing

Assets

NPAs down $44mm or 9% linked quarter and down

38% or $281mm year over year

NPA % at 2.32% in 2Q12 vs 4.09% in 2Q11

NPL levels down 8% linked quarter and down 38%

year over year

NPL % at 2.03% vs 3.62% in 2Q11

ORE balances declined from continued disposition

activity

NPL

Activity

from

Commercial

and

OTC

ORE

Activity

$1.2B

(1)%

(14)%

(9)%

(2)%

(11)%

(9)%

(22)%

(2)%

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

ORE

NPLs

Numbers

may

not

add

due

rounding.

2Q12,

the

process

for

identifying

currentjunior

liens

behind

delinquent

modified

first

liens

for

nonaccrual

status

was

refined.

1Q12

consumer

NPLs

have

been

representedto

agree

with

2Q12

presentation.

4Q11

net

charge-offs

include

$21mm

loss

from

one

bank-related

relationship

TRUP

and

bank

holding

company

loan.

ORE excludes foreclosed real estate from government insured loans.

Building Long-Term Earnings Power:

FHNC Bonefish –

Long-Term Targets

2Q12 Consolidated

2Q12 Core

Long-Term Targets

ROTCE

(22.6)%

15 -

20%

ROA

(1.96)%

0.94%

1.25 -

1.45%

NIM

3.16%

3.43%

3.50 -

4.00%

Tier 1 Common

10.6%

8.0 –

9.0%

NCO

Average

Loans

1.01%

0.51%

0.30 -

0.70%

Fee Income / Revenue

47%

49%

40 -

50%

Efficiency Ratio

161%

76%

60 -

65%

Equity / Assets

Return on Assets

1.25% - 1.45%

Risk Adjusted Margin

Return on Tangible

Common Equity

15% - 20%

Total Assets

Earning Assets

Pre-tax Income

Tax Rate

Efficiency Ratio

60% - 65%

Annualized Net Charge-Offs

0.30% - 0.70%

Net Interest Margin

3.50% - 4.00%

Tier 1 Common

8% - 9%

% Fee Income

40% - 50%

Core Businesses include Regional Banking, Capital Markets, and Corporate segment. Certain core data is non-GAAP and a reconciliation is provided in the appendix.

ROTCE, ROA, NIM, and NCO / Average Loans are annualized. ROTCE is a non-GAAP number, and a reconciliation is provided in the appendix.

Tier 1 Common: current quarter is estimate and a non-GAAP number, and a reconciliation is provided in the appendix.

Potential Impact of Recent NPR

Tier 1 Common Ratio

Current

Proforma

Estimated

NPR Impact

Expected

Improvements

& Run-Off

2Q12 Tier 1 Common

of 10.6%

currently under Basel I

NPR Impact: ~(240)bps

Estimated 2Q12 Tier 1 Common

of 8.2% under Basel III

Improvements and Run-Off

Impact of ~+230bps

Theoretical Tier 1 Common of

10.5% under Basel III

Basel III Impacts

11.8%

11.9%

10.6%

10%

11%

12%

4Q11

1Q12

2Q12

1Q12 Peer

Median²

2Q12 Tier 1 Common ratio is an estimate. Tier 1 Common is a non-GAAP number, and a reconciliation is provided in the appendix.

Source: SNL. Peer median includes top 50 publicly traded U.S. banks by total asset size at 1Q12.

The estimate of Tier 1 Common ratio reflects FHN’s current understanding of proposed Basel III rules and application of rules to its businesses

including expected improvements (for theoretical Tier 1 Common) such as assumptions on retained earnings, run-off of non-strategic portfolios, balance sheet positioning, and credit quality.

FHN Is Well Positioned For Long-Term Earnings Power

Building a Foundation for Long-Term Earnings Power

FHN is successfully executing on key priorities:

Controlling what we can control

Differentiated core businesses

Expense leverage from efficiency initiatives

Managing mortgage repurchase risk

Improving asset quality

Capital flexibility

APPENDIX

2Q12 Credit Quality Summary by Portfolio

Net Charge-offs³

($ in millions)

Commercial

(C&I & Other)

Income

CRE

Residential

CRE

HE &

HELOC

Other

Permanent

Mortgage

Commercial

(C&I & Other)

Income

CRE

Residential

CRE

HE &

HELOC

Permanent

Mortgage

Other

Total

Period End Loans

$7,441

$1,183

$79

$2,981

$278

$119

$541

$42

$10

$2,427

$602

$484

$16,186

30+ Delinquency

0.31%

0.55%

7.53%

0.76%

1.32%

0.49%

0.00%

1.95%

1.61%

2.78%

0.82%

Dollars

$23

$47

$10

$13

$133

NPL %

1.11%

4.34%

40.77%

0.39%

0.15%

0.17%

13.77%

14.07%

65.64%

0.96%

5.28%

1.59%

2.03%

Dollars

$83

$51

$32

$12

$74

$23

$32

$328

0.45%

0.53%

2.26%

0.38%

2.99%

0.00%

0.30%

30.43%

2.81%

1.67%

3.50%

1.01%

Dollars

$17

$40

Allowance

$85

$25

$12

$28

$26

$86

$27

$21

$321

Allowance / Loans %

1.14%

2.14%

14.72%

0.94%

2.26%

4.78%

9.51%

5.40%

3.56%

4.56%

4.28%

1.98%

Allowance / Charge-offs

2.64x

3.99x

6.24x

2.48x

0.76x

31.70x

0.15x

1.24x

2.68x

1.19x

2.00x

(1) Credit Card, Permanent Mortgage, and Other

(2) Restricted and Secured Consumer Real Estate Loans, OTC and Other Consumer.

(3) Net Charge-Offs are annualized

(NM) Not meaningful

(4) Exercised clean-up calls on jumbo securitizations in 2Q11 and 4Q10, which are now on balance sheet in the Corporate segment

Regional Banking

Non-Strategic

Corporate

Numbers

may

not

add

total

due

rounding.

Data

2Q12.

Data

2Q12.

TRUPs

loan

balance

net

LOCOM

$34.2mm.

C&I Portfolio

Consolidated C&I Portfolio

C&I Loan Composition

4Q11 charge-offs included $21mm charge-off from one

bank-related relationship

C&I: Period End Loans to Mortgage Companies

Numbers

may

not

add

total

due

rounding.

$1.6B

$8.0B portfolio, diversified by industry, managed

primarily in Regional Banking

Includes loans to mortgage companies (included

within correspondent banking) of $1.3B in 2Q12 vs

$1.1B in 1Q12

Net charge-offs up $6mm linked quarter

C&I consolidated reserves of 1.39% at 6/30/12

All Other C&I

75%

TRUPs¹

Bank-

Correspondent

Banking

18%

2Q11

3Q11

4Q11

1Q12

2Q12

$0.0

$0.4

$0.8

$1.2

2Q11

3Q11

4Q11

1Q12

2Q12

$0.6

$1.1

$1.4

$1.1

$1.3

30+ Delq.

NPLs/Total Loans

Offs (Ann.)

Net Charge

C&I Portfolio: TRUPs and Bank-Related Loans

2Q12

($ in millions)

TRUPs & Bank-Related Loans

Total C&I Portfolio

Period End Balances

$591

$7,982

Reserves

$63

$111

Reserve Coverage

10.60%

1.39%

NPL %

15.36%

1.97%

NCO %

0.04%

0.42%

TRUPS and Bank-Related Loan Coverage

$591mm balances in TRUPs and bank-related loans

$291mm whole-loan TRUPs to banks

$156mm whole-loan TRUPs to insurance companies

$144mm

loans

bank

holding

companies

and

loans

secured

bank

stock

Significant focus is directed at this portfolio

TRUPs and bank holding company loans are re-graded quarterly

Average TRUP size of $9mm

Ten TRUPs on deferral at 6/30/12

Numbers may not add to total due to rounding.

Data as of 2Q12.

Reserve coverage includes $34.2mm of LOCOM on TRUPs.

NCO % is annualized.

Income CRE Portfolio

Performance

Period end balances of $1.2B

97% managed in Regional Banking with relationship-

oriented customers

Proactively managing problem projects and maturities

to regulatory standards

Do not capitalize interest and do not fund interest on

distressed properties

Net charge-offs down $6mm linked quarter to $2mm

Reserves of 2.39% at 6/30/12

Continued improvement and stabilization

Loan Type

NPLs By Product Type

Collateral Type

Land

Other

Office

Retail

Multi-Family

Industrial

Hospitality

29.5%

12.3%

5.5%

1.3%

1.2%

1.0%

0.0%

Numbers

may

not

add

total

due

rounding.

Data

2Q12.

Net

charge-offs

are

annualized.

NPLs

percentage

each

portfolio.

3“Other”

includes

Non-Owner

Occupied

Single

Family

Residential

and

Multi-Use

Projects.

Home Equity: Performance and Characteristics

Portfolio Characteristics

Geographic Distribution

30+ Delinquency: Key Drivers

FICO Score-Origination

Lien Position

Channel

55%

% of portfolio

13%

12%

14%

89%

11%

% of portfolio

41%

59%

% of portfolio

First

Second

Total

Balance

$2.4B

$3.5B

$5.9B

Original FICO

746

736

740

Refreshed FICO

744

723

731

Original CLTV

74%

81%

78%

Full Doc

86%

71%

77%

Owner Occupied

90%

96%

94%

HELOCs

$0.8B

$2.7B

$3.5B

Weighted Average

HELOC Utilization

50%

61%

59%

Core

Banking

Customers

46%

12%

Other

36%

0.78%

1.86%

2.43%

2.84%

5.35%

>=740

720

739

700

719

660

699

<660

1.57%

2.80%

Retail

Wholesale

1.15%

2.09%

1st Lien

2nd Lien

Numbers and percentages may not add due to rounding.

Data as of 2Q12.

All charts and graphs include $447.5mm of restricted and secured consumer real estate loans.

Consumer Real Estate Portfolio

30+ Delinquency

Net Charge-Offs

Non-Strategic Portfolio Run-Off

Industry

= 6.75%

$50mm

$24

$40

$35

$31

$30

0.76%

2.04%

2Q11

3Q11

4Q11

1Q12

2Q12

$10

$20

$30

$40

2Q11

3Q11

4Q11

1Q12

2Q12

$4B

16%

14%

15%

18%

15%

10%

15%

20%

2Q11

3Q11

4Q11

1Q12

2Q12

PE Balance

Restricted

and

Secured

Balances

Constant Pre-Payment Rate (Right Axis)

All charts and graphs include $447.5mm of restricted and secured consumer real estate loans.

Source: McDash industry data as of April 2012.

Regional Banking

Non-Strategic

Restricted

Regional Banking

Non-Strategic

Mortgage Repurchases:

Origination and Loan Characteristics

Agency and Pipeline

Agency Originations

~$70B of Agency originations from 2005 to 2008

Received ~$1.8B

of Agency-related repurchase

requests to date or 2.6% of originations

Represent 99.5% of all active repurchase/make whole

requests

pipeline

6/30/12

Pipeline of requests at $431mm in 2Q12, down 4%

from 2Q11, but up from $380mm in 1Q12

$362mm of Agency-related repurchase claims

$46mm of mortgage insurer-related cancellations

$2mm of non-Agency whole loan-related claims

$21mm of other non-repurchase requests

Other Whole Loan Sales/Non-Agency

Represent 0.5% of all active repurchase/make whole

requests in 2Q12 pipeline

Repurchase requests in the pipeline largely driven by

MI cancellations

Loans

were

bundled

with

other

companies’

loans

and

securitized by the purchasers

A trustee has commenced a legal action seeking

repurchase of FHN loans

Certain purchasers of FHN loans have requested

indemnity related to securitizations

Mortgage Repurchases:

First Horizon Branded Private Securitizations

FHN Alt-A Securitizations

$10B

$5B

2004-2007 FHN Private Mortgage Securitizations

FHN Jumbo Securitizations

2004

2005

2006

2007

Jumbo Original Balance (~$13B)

Jumbo Remaining Balance (~$4B)

2004

2005

2006

2007

Alt-A Original Balance (~$20B)

Alt-A Remaining Balance (~$7B)

~$47B of FHN securitizations from 2000 to 2007

~$33B of FHN securitizations from 2004 to 2007

9 FHN securitizations of Jumbo loans called in 2Q11

and 4Q10

102 active first lien FHN mortgage securitizations,

comprised of 46 Jumbo and 56 Alt-A deals

Outstanding UPB of ~$11B

64% Alt-A

36% Jumbo

FHN private securitizations consisted of 60% Alt-A,

40% Jumbo, and no Subprime

Average FHN securitization size at origination of

$325mm was much smaller than the industry average

of $858mm

Data source: LoanPerformance, CPRCDR, Intex, PolyPaths, Bloomberg with company analysis. FHN has not verified data accuracy. Excludes inactive deals.

Data as of May 2012 with June remits. Supplemental private securitization data provided on FHN’s website at ir.fhnc.com.

Aggregate original UPB of $3.8B. Upon recognition by FHN called loans are no longer subject to repurchase risk.

First Horizon Branded Private Mortgage Securitizations:

Risk Remains Manageable

FHN Private Securitization Repurchase Risk

Different than GSE Risk

FHN

Private

Mortgage

Securitization

Facts

FHN private securitizations consisted of 60% Alt-A,

40% Jumbo, and no Subprime

Average FHN securitization size at origination of

$325mm was much smaller than the industry average

of $858mm

Six

FHN

securitization-related

lawsuits

outstanding

No repurchase requests related to first lien FHN

securitizations

67% of current UPB dollar-weighted 2004-2007 FHN

private securitizations are outperforming industry

cohort on cumulative loss

89% of current UPB dollar-weighted 2004-2007 FHN

private securitizations are outperforming industry

cohort on 60D+ delinquencies

100% of active FHN securitization deals are older

than 4 years

95% are older than 5 years

All deals will reach 5 years in age by year end 2012

Data source: LoanPerformance, CPRCDR, Intex, PolyPaths, Bloomberg with company analysis. FHN has not verified data accuracy. Excludes inactive deals. Data as of May 2012 with June remits.

Two suits are from 2H10 and the other 2, including a suit by FHFA, are from 3Q11. In 2 other suits, FHN is not a defendant but has received contractual indemnity claims from underwriter defendants.

Resolution

Representations

Access

Voting Rights

Generally, reps and warranties

are not as comprehensive as GSE

whole-loan reps and warranties

No specific representation and

warranty on third-party fraud in

the origination

Difficult for most non-agency

investors to access loan files

Investors can compel trustee loan

review and other action only if

they indemnify the trustee

Trustees can review loans and

seek repurchase on their own

Generally requires a coordinated

investor effort to compel trustees

to investigate and pursue

repurchase claims

Investor interests are not

necessarily aligned

Longer resolution process expected

Longer timeline may decrease

probability of successful claims

First Horizon Branded Private Mortgage Securitizations:

Delinquencies and Cumulative Losses

12%

11%

Vintage Remaining Balance / Total 2004-2007 Current Jumbo and Alt-A Balances

29%

19%

11%

12%

Vintage Original Balance / Total 2004-2007 Original Jumbo and Alt-A Balances

27%

18%

FHN

Industry

2004

2005

2006

2007

12%

18%

24%

2004

2005

2006

2007

14%

21%

28%

35%

2004

2005

2006

2007

12%

16%

2004

2005

2006

2007

Jumbo 60+ Day Delinquencies

Jumbo Cumulative Losses

Alt-A 60+ Day Delinquencies

Alt-A Cumulative Losses

Numbers and percentages may not add to total due to rounding. Data as of May 2012 with June Remits.

Data source: LoanPerformance, CPRCDR, Intex, PolyPaths, Bloomberg with company analysis. FHN has not verified the data accuracy.

Cohort (Industry) = Loans of similar type/vintage relevant reference group.

Supplemental private securitization data provided on FHN’s website at ir.fhnc.com.

FHFA Litigation Securitizations

$1.0B

$874mm*

*The original balance related to the FHFA lawsuit is $874mm, plus an additional $9mm of cost over par, totaling $883mm

Paid Off 54%

Performing UPB 34%

60D+ Delinquent²

Cumulative Loss

$0.0

$0.2

$0.4

$0.6

$0.8

($ in millions)

Alt-A Deal

FHFA-Related

Tranche

Original

UPB

Paid

Off

Current

UPB

Performing

UPB

60D+

Delinquent

Cumulative

Loss

FHAMS 2005-AA9

IIA1

$214

$118

$88

$74

$14

FHAMS 2005-AA10

IA1

$140

$80

$55

$47

FHAMS 2005-AA11

IA1

$129

$68

$51

$45

$10

FHAMS 2005-AA12

IIA1

$161

$70

$80

$66

$14

$11

FHAMS 2006-AA1

IA1

$230

$134

$81

$66

$16

$15

FHFA Total

$874

$471

$355

$297

$59

$48

Numbers

and

percentages

may

not

add

total

due

rounding.

Data

source:

June

2012

Trustee

Reports

and

the

FHFA

lawsuit

filed

9/2/11.

In April 2007, the

GSEs

purchased

the

remaining

$161mm

UPB

the

FHAMS

2005-AA12

IIA1

tranche,

reported

the

FHFA

lawsuit.

This

tranche

had

origination

balance

$213mm.

60D+ 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.

FHFA Litigation Certificate Breakdown

Reconciliation to GAAP Financials

Slides in this presentation use non-GAAP information of net interest income adjusted for impact of FTE. 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.

($ in millions)

2Q12

1Q12

4Q11

3Q11

2Q11

Regional Banking

Net interest income (GAAP)

$147.2

$146.1

$149.6

$140.1

$135.6

FTE adjustment

$1.6

$1.5

$1.4

Net interest income adjusted for impact of FTE (Non-GAAP)

$148.8

$147.6

$151.1

$141.5

$136.9

Capital Markets

Net interest income (GAAP)

$5.6

$5.7

$5.5

$5.6

$5.5

FTE adjustment

$0.2

$0.1

Net interest income adjusted for impact of FTE (Non-GAAP)

$5.8

$5.6

Corporate

Net interest income (GAAP)

($4.1)

($4.7)

($3.8)

($0.5)

$0.4

FTE adjustment

$0.0

$0.1

Net interest income adjusted for impact of FTE (Non-GAAP)

($4.1)

($4.7)

($3.7)

($0.5)

$0.5

Non-Strategic

Net interest income (GAAP)

$24.0

$24.9

$27.5

$31.2

$31.4

FTE adjustment

$0.0

Net interest income adjusted for impact of FTE (Non-GAAP)

$24.0

$24.9

$27.5

$31.2

$31.4

Total Consolidated

Net interest income (GAAP)

$172.7

$171.9

$178.9

$176.3

$172.9

FTE adjustment

$1.8

$1.7

$1.6

$1.5

Net interest income adjusted for impact of FTE (Non-GAAP)

$174.4

$173.6

$180.5

$177.9

$174.4

Reconciliation to GAAP Financials

Slides in this presentation use non-GAAP information of tangible assets, tangible common equity, tier 1 common

capital,

and

various

ratios

using

one

those

measures.

That

information

not

presented

according

generally accepted accounting principles (GAAP) and is reconciled to GAAP information below.

Numbers may not add to total due to rounding.

Includes goodwill and other intangible assets, net of amortization.

Current quarter is an estimate.

($ in millions)

2Q12

1Q12

4Q11

3Q11

2Q11

Tangible Common Equity (Non-GAAP)

Total equity (GAAP)

$2,514.4

$2,674.2

$2,684.6

$2,743.2

$2,681.4

Less: noncontrolling interest

295.2

Total common equity

2,219.2

2,379.0

2,389.5

2,448.1

2,386.2

Less:

intangible

assets

(GAAP)

158.9

159.9

160.9

164.1

Tangible common equity (Non-GAAP)

2,060.3

2,219.1

2,229.6

2,287.2

2,222.2

Less: unrealized gains on AFS securities, net of tax

63.7

67.1

79.4

58.1

Adjusted tangible common equity (Non-GAAP)

1,996.7

2,152.1

2,162.5

2,207.8

2,164.1

Tangible Assets (Non-GAAP)

Total assets (GAAP)

$25,493.0

$25,679.0

$24,789.4

$25,571.5

$25,054.1

Less:

intangible

assets

(GAAP)

158.9

159.9

160.9

164.1

Tangible assets (Non-GAAP)

25,334.1

25,519.1

24,629.5

25,410.6

24,890.0

Tier 1 Common (Non-GAAP)

Tier 1 capital

$2,626.3

$2,841.1

$2,850.5

$2,875.1

$2,818.5

Less:

noncontrolling

interest

FTBNA

preferred

stock

294.8

Less: trust preferred

200.0

Tier

common

(Non-GAAP)

2,131.5

2,346.2

2,355.6

2,380.3

2,323.7

Risk Weighted Assets

Risk

weighted

assets

$20,055.0

$19,783.4

$20,026.4

$19,910.8

$19,589.3

Ratios

Tangible common equity to tangible assets (TCE/TA) (Non-GAAP)

8.13%

8.70%

9.05%

9.00%

8.93%

Total equity to total assets (GAAP)

9.86%

10.41%

10.83%

10.73%

10.70%

Tier 1 common ratio (Non-GAAP)

10.63%

11.86%

11.76%

11.95%

11.86%

Tier

capital

total

assets

(GAAP)

10.30%

11.06%

11.50%

11.24%

11.25%

Tangible

common

equity

risk

weighted

assets

(TCE/RWA)

(Non-GAAP)

10.27%

11.22%

11.13%

11.49%

11.34%

Tangible

common

equity

plus

reserves

risk

weighted

assets

(Non-GAAP)

11.87%

12.97%

13.05%

13.75%

14.02%

Total equity plus reserves to total assets (GAAP)

11.12%

11.76%

12.38%

12.49%

12.79%

Reconciliation to GAAP Financials

Slides in this presentation use non-GAAP information of net interest income, assets, net interest margin, net charge-

offs,

fee

income,

revenue,

expense

and

various

ratios

using

one

those

measures.

That

information

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.

ROA and Net Charge-offs / Average loans are annualized.

2Q12

Return

on Assets

Net Interest

Margin

Net Charge-Offs/

Average Loans

Fee Income /

Total Revenue

Efficiency

Ratio

Regional Banking (GAAP)

1.35%

5.11%

0.51%

31%

67%

Capital Markets (GAAP)

2.07%

1.15%

0.0%

93%

76%

Corporate (GAAP)

-0.51%

-0.44%

Core Businesses (Non-GAAP)

0.94%

3.43%

0.51%

49%

76%

Non-Strategic (GAAP)

-13.64%

2.11%

2.41%

30%

891%

Consolidated (GAAP)

-1.96%

3.16%

1.01%

47%

161%

Regional

Banking

Revenue

Per

FTE

($ in 000s)

2Q12

1Q12

2Q11

Total Revenue

$212,042

$205,974

$203,436

FTEs

3,189

3,160

3,428

Revenue Per FTE

$66

$65

$59

2Q12

1Q12

2Q11

Regional Banking Pre-Tax Income (GAAP)

$65

$74

Capital Markets Pre-Tax Income (GAAP)

$20

$32

-$20

Corporate Pre-Tax Income (GAAP)

-$20

-$18

-$27

Core Businesses Pre-Tax Income (Non-GAAP)

$65

$88

$27

Non-Strategic Pre-Tax Income (GAAP)

-$275

-$44

-$12

Consolidated (GAAP)

-$211

$44

$15

2Q12

1Q12

2Q11

Regional Banking Noninterest Expense (GAAP)

$142

$139

$143

Capital Markets Noninterest Expense (GAAP)

$61

$80

$103

Less: Capital Markets Litigation Expense (Non-GAAP)

$37

Corporate Noninterest Expense (GAAP)

$19

$23

$36

Core Businesses Noninterest Expense (Non-GAAP)

$223

$242

$246

Non-Strategic Noninterest Expense (GAAP)

$304

$80

$61

Consolidated Noninterest Expense (GAAP)

$527

$322

$308

Pre-Tax Income

($ in millions)

Noninterest Expense

($ in millions)

Reconciliation to GAAP Financials

Numbers may not add to total due to rounding.

Because FHN recognized a net loss available to common shareholders in 2Q12, potentially issuable shares are excluded from diluted shares as they are anti-dilutive.

Excluding the previously announced repurchase and litigation charges, FHN would have recognized net income available to common shareholders.

As a result, pro-forma diluted shares are presented in order to include the dilutive impact of potentially issuable shares

Slides in this presentation use non-GAAP information of tangible common equity and per share impact to EPS data 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.

Per Share Impact (Non-GAAP)

(in millions, except per share)

2Q12

Previously

announced

pre-tax

repurchase

litigation

charges

($272)

Tax benefit (tax rate of 38.40%)

$104

After-tax

impact

repurchase

litigation

charges

($168)

Diluted shares (GAAP)

249

Add: Effect of dilutive securities (pro-forma)

Pro-forma diluted shares

251

Per share impact for charges (Non-GAAP)

($0.67)

Diluted EPS (GAAP)

(in millions, except per share)

2Q12

Net income available to common shareholders

($125)

Diluted shares

249

Diluted earnings per share

($0.50)

Return on Tangible Common Equity

($ in millions)

2Q12

Average Common Equity (GAAP)

$2,383

Intangibles (GAAP)

($159)

Tangible Common Equity (Non-GAAP)

$2,223

Net Income Available to Common Shareholders (GAAP)

($125)

Annualized Return on Tangible Common Equity (Non-GAAP)

-22.6%

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