FIRST HORIZON CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

Attached files

file	filename
EX-99.2 - EXHIBIT 99.2 - FIRST HORIZON CORP	fhn3q18earnings101618.htm
8-K - 8-K - FIRST HORIZON CORP	a3q18financialsupplement8-.htm

THIRD QUARTER 2018

FINANCIAL SUPPLEMENT

If you need further information, please contact:

Aarti Bowman, Investor Relations

901-523-4017

aagoorha@firsthorizon.com

FHN TABLE OF CONTENTS




	Page

First Horizon National Corporation Segment Structure	3

Performance Highlights	4

Consolidated Results
Income Statement
Income Statement	6
Other Income and Other Expense	7
Balance Sheet
Period End Balance Sheet	8
Average Balance Sheet	9
Net Interest Income	10
Average Balance Sheet: Yields and Rates	11

Capital Highlights	12

Business Segment Detail
Segment Highlights	13
Regional Banking	14
Fixed Income and Corporate	15
Non-Strategic	16

Asset Quality
Asset Quality: Consolidated	17
Asset Quality: Regional Banking and Corporate	19
Asset Quality: Non-Strategic	20

Non-GAAP to GAAP Reconciliation	21

Glossary of Terms	22

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 earnings 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 forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements to reflect future events or developments.

Use of Non-GAAP Measures and Regulatory Measures that are not GAAP

Certain measures are included in this financial supplement that are “non-GAAP,” meaning (under U.S. financial reporting rules) they are not presented in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and also are not codified in U.S. banking regulations currently applicable to FHN. Although other entities may use calculation methods that differ from those used by FHN for non-GAAP measures, FHN’s management believes such measures are relevant to understanding the financial condition, capital position, and financial results of FHN and its business segments. Non-GAAP measures are reported to FHN’s management and Board of Directors through various internal reports.

Presentation of regulatory measures, some of which follow regulatory definitions rather than GAAP, provides a meaningful base for comparability to other financial institutions subject to the same regulations as FHN. Such measures are used by the various banking regulators in reviewing the performance, stability, and capital adequacy of financial institutions they regulate. Although not GAAP terms, these regulatory measures are not considered “non-GAAP” under U.S. financial reporting rules as long as their presentation conforms to regulatory standards. Regulatory measures used in this financial supplement include: common equity tier 1 capital, generally defined as common equity less goodwill, other intangibles, and certain other required regulatory deductions; tier 1 capital, generally defined as the sum of core capital (including common equity and instruments that cannot be redeemed at the option of the holder) adjusted for certain items under risk based capital regulations; risk weighted assets (“RWA”), which is a measure of total on- and off-balance sheet assets adjusted for credit and market risk, used to determine regulatory capital ratios; and pre-provision net revenue (“PPNR”), calculated by adding the provision/(provision credit) for loan losses to income before income taxes, excluding securities gains/(losses).

The non-GAAP measures presented in this financial supplement are return on average tangible common equity (“ROTCE”), tangible common equity (“TCE”) to tangible assets (“TA”), and tangible book value ("TBV") per common share.

Refer to the tabular reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items on page 21 of this financial supplement.



FIRST HORIZON NATIONAL CORPORATION SEGMENT STRUCTURE



FHN PERFORMANCE HIGHLIGHTS


Summary of Third Quarter 2018 Notable Items
Segment	Item	Income Statement	Amount Favorable/ (Unfavorable)	Comments
Corporate	Sale of Visa Shares	Noninterest income: Securities gains/(losses), net	$212.9 million	Pre-tax gain associated with sale of Visa Class B Shares

Corporate	Acquisition and integration expenses	Noninterest expense: various	$(11.4) million	Pre-tax acquisition- and integration-related expenses primarily associated with the Capital Bank Financial Corp. ("CBF") acquisition


Third Quarter 2018 vs. Second Quarter 2018

Consolidated


•	In 3Q18 FHN sold its remaining holdings of Visa Class B Shares resulting in a pre-tax gain of $212.9 million


•	Net income available to common shareholders was $270.3 million, or $.83 per diluted share in 3Q18 compared to $81.6 million, or $.25 per diluted share in 2Q18


•	Net interest income (“NII”) was $305.7 million in 3Q18 compared to $310.9 million in 2Q18


•	The decrease in NII in 3Q18 was primarily driven by lower loan accretion associated with the CBF acquisition, the effect of the 2Q18 loan sales, higher deposit costs, and the muted increase in LIBOR in 3Q18 relative to prior quarters


•	The decline was somewhat offset by the positive impact of an additional day in 3Q18 compared to 2Q18, higher average balances of loans to mortgage companies, and to a lesser extent an increase in cash basis interest income


•	Net interest margin (“NIM”) was 3.44 percent in 3Q18 compared to 3.53 percent in 2Q18


•	The decline in NIM was largely driven by lower loan accretion associated with the CBF acquisition, the effect of the 2Q18 loan sales, higher deposit costs, and the muted increase in LIBOR, somewhat offset by higher average balances of loans to mortgage companies


•	The provision for loan losses was $2.0 million in 3Q18 compared to $0 in 2Q18


•	Noninterest income (including securities gains) increased to $349.0 million in 3Q18 from $127.5 million in 2Q18 primarily driven by the gain on sale of Visa Class B Shares previously mentioned


•	To a lesser extent, an increase in Fixed income noninterest income within both the Non-Strategic and Fixed Income segments also contributed positively to noninterest income in 3Q18


•	Noninterest expense was $294.0 million in 3Q18 compared to $332.8 million in 2Q18


•	The expense decrease was largely driven by a $31.8 million decline in acquisition- and integration-related expenses primarily associated with the CBF acquisition


•	Provision for income taxes was $83.9 million in 3Q18 compared to $19.7 million in 2Q18 and was largely driven by an increase in pre-tax income associated with the gain on sale of Visa Class B Shares

Regional Banking


•	Pre-tax income was $166.7 million in 3Q18 compared to $172.7 million in 2Q18; PPNR was $174.7 million and $177.6 million in 3Q18 and 2Q18, respectively


•	Average loans increased to $26.1 billion in 3Q18 from $25.9 billion in 2Q18; period-end loans decreased 1 percent to $27.4 billion in 3Q18


•	Average deposits increased to $27.6 billion in 3Q18 from $27.4 billion in 2Q18; period-end deposits were flat at $27.8 billion in 3Q18


•	NII was $302.5 million in 3Q18 down from $307.0 million in 2Q18


•	The decrease in NII is primarily due to lower loan accretion associated with the CBF acquisition, higher deposit costs and the muted increase in LIBOR in 3Q18, somewhat offset by an additional day in 3Q18 relative to 2Q18, higher average balances of loans to mortgage companies, and an increase in cash basis interest income


•	Provision expense was $8.0 million in 3Q18 compared to $4.9 million in 2Q18 driven primarily by higher reserves associated with individually impaired loans within the C&I portfolio; the increase in reserves was partially offset by the effect of continued lower loss rates and lower net charge-offs


•	Noninterest income was $79.9 million and $80.3 million in 3Q18 and 2Q18, respectively


•	Noninterest expense was $207.6 million in 3Q18 down from $209.6 million in 2Q18

Fixed Income


•	Pre-tax income was $2.9 million in 3Q18 compared to pre-tax loss of $.4 million in 2Q18


•	NII was $9.0 million and $9.2 million in 3Q18 and 2Q18, respectively


•	Noninterest income increased to $41.1 million in 3Q18 from $38.4 million in 2Q18


•	Fixed income product revenue was $34.3 million in 3Q18 up from $29.9 million in 2Q18


•	Fixed income product average daily revenue (“ADR”) was $544 thousand and $468 thousand in 3Q18 and 2Q18, respectively


•	Other product revenue was $6.9 million in 3Q18 compared to $8.4 million in 2Q18


•	Noninterest expense decreased to $47.3 million in 3Q18 from $48.0 million in 2Q18



FHN PERFORMANCE HIGHLIGHTS (continued)


Third Quarter 2018 vs. Second Quarter 2018 (continued)

Corporate


•	Pre-tax income was $173.9 million in 3Q18 compared to a pre-tax loss of $75.5 million in 2Q18


•	NII was negative $15.4 million and negative $17.1 million in 3Q18 and 2Q18, respectively


•	Estimated effective duration of the securities portfolio was 4.8 years in 3Q18 and 4.6 years in 2Q18


•	Noninterest income (including net securities gains) was $222.6 million in 3Q18 compared to $8.7 million in 2Q18 and was primarily driven by the gain on sale of Visa Class B Shares


•	Noninterest expense was $33.3 million in 3Q18, down from $67.1 million in 2Q18


•	The decline was largely driven by a decrease in acquisition- and integration-related expenses primarily associated with the CBF acquisition

Non-Strategic


•	Pre-tax income was $15.2 million in 3Q18 compared to $8.9 million in 2Q18


•	NII decreased to $9.6 million in 3Q18 from $11.9 million in 2Q18 largely driven by the sale of approximately $120 million UPB of loans in 2Q18


•	The provision credit was $6.0 million in 3Q18 compared to a provision credit of $4.9 million in 2Q18


•	Noninterest income increased to $5.4 million in 3Q18 from $.1 million in 2Q18 largely driven by a $3.8 million gain from the reversal of a previous valuation adjustment due to sales of TRUPS loans


•	Noninterest expense decreased to $5.8 million in 3Q18 from $8.1 million in 2Q18

Asset Quality


•	Allowance for loan losses increased to $186.0 million in 3Q18 from $185.5 million in 2Q18; the allowance to loans ratio increased 1 bp to 68 bps in 3Q18


•	Net charge-offs were $1.5 million in 3Q18 compared to $1.7 million in 2Q18


•	Regional banking net charge-offs were $3.7 million in 3Q18 compared to $4.3 million in 2Q18


•	Non-strategic net recoveries were $2.2 million in 3Q18 compared to $2.6 million in 2Q18


•	Nonperforming loans (“NPLs”), excluding loans held-for-sale, increased to $146.4 million in 3Q18 from $124.8 million in 2Q18 primarily driven by one credit within the C&I portfolio


•	30+ delinquencies were $95.1 million in 3Q18 compared to $85.1 million in 2Q18 primarily driven by two credits

Taxes


•	The effective tax rates for 3Q18 and 2Q18 were 23.40 percent and 18.64 percent, respectively


•	The increase in effective tax rate in 3Q18 primarily reflects the decrease in discrete benefit from 2Q18. There was no discrete benefit in 3Q18; 2Q18 includes $3.0 million of favorable discrete items related to CBF purchase accounting adjustments and $1.1 million of favorable discrete items related to state audits


•	The rates also reflect the favorable net effect from permanent benefits. Permanent benefits primarily consist of tax credit investments, life insurance, and tax-exempt interest, offset by non-deductibility (under Tax Reform) of a portion of FDIC premiums and executive compensation expenses

Capital and Liquidity


•	Declared $.12 per common share quarterly dividend in 3Q18 ($38.9 million in the aggregate) which was paid on October 1, 2018


•	Declared aggregate preferred quarterly dividend of $1.6 million in 3Q18 which was paid on October 10, 2018


•	Repurchased 1.1 million shares costing $19.0 million in 3Q18 with a volume weighted average price of $17.84; $231.0 million remaining authorization under the stock purchase authorization announced in January 2018, currently scheduled to expire January 31, 2020


•	Capital ratios (regulatory capital ratios calculated under the Basel III risk-based capital rules as phased-in; current quarter is an estimate)


•	Total equity to total assets (GAAP) of 11.67 percent in 3Q18 compared to 11.08 percent in 2Q18


•	Tangible common equity to tangible assets (Non-GAAP) of 7.12 percent in 3Q18 compared to 6.54 percent in 2Q18


•	Common Equity Tier 1 of 9.86 percent in 3Q18 compared to 8.98 percent in 2Q18


•	Tier 1 of 10.88 percent in 3Q18 compared to 9.98 percent in 2Q18


•	Total Capital of 12.04 percent in 3Q18 compared to 11.25 percent in 2Q18


•	Leverage of 9.21 percent in 3Q18 compared to 8.56 percent in 2Q18

FHN CONSOLIDATED INCOME STATEMENT

Quarterly, Unaudited



										(a)						3Q18 Changes vs.
(Dollars in thousands, except per share data)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Interest income	$	393,669		$	387,811		$	363,355		$	287,633		$	248,145		2		%	59		%
Less: interest expense	87,969			76,879			62,182			45,545			38,328			14		%	NM
Net interest income	305,700			310,932			301,173			242,088			209,817			(2	)	%	46		%
Provision/(provision credit) for loan losses	2,000			—			(1,000		)	3,000			—			NM			NM
Net interest income after provision for loan losses	303,700			310,932			302,173			239,088			209,817			(2	)	%	45		%
Noninterest income:
Fixed income (b)	44,813			37,697			45,506			55,079			55,758			19		%	(20	)	%
Deposit transactions and cash management	35,792			36,083			35,984			30,158			28,011			(1	)	%	28		%
Brokerage, management fees and commissions	14,200			13,740			13,483			12,642			11,937			3		%	19		%
Trust services and investment management	7,438			8,132			7,277			7,116			6,953			(9	)	%	7		%
Bankcard income	6,878			6,635			6,445			8,237			6,170			4		%	11		%
Bank-owned life insurance	4,337			5,773			3,993			3,987			3,539			(25	)	%	23		%
Securities gains/(losses), net (c)	212,859			31			86			137			6			NM			NM
Other (d)	22,655			19,434			23,243			15,834			43			17		%	NM
Total noninterest income	348,972			127,525			136,017			133,190			112,417			NM			NM
Adjusted gross income after provision for loan losses	652,672			438,457			438,190			372,278			322,234			49		%	NM
Noninterest expense:
Employee compensation, incentives, and benefits (e)	164,839			165,890			171,254			177,312			137,383			(1	)	%	20		%
Repurchase and foreclosure provision (f)	(562		)	(252		)	(72		)	53			(609		)	NM			8		%
Legal fees	2,541			2,784			2,345			1,245			2,052			(9	)	%	24		%
Professional fees (g)	9,270			15,415			12,272			26,958			6,566			(40	)	%	41		%
Occupancy (h)	20,002			22,503			20,451			15,887			13,619			(11	)	%	47		%
Computer software	15,693			15,123			15,132			13,157			11,993			4		%	31		%
Contract employment and outsourcing (i)	4,314			5,907			4,053			5,979			2,762			(27	)	%	56		%
Operations services	13,121			14,653			15,561			10,619			10,805			(10	)	%	21		%
Equipment rentals, depreciation, and maintenance	9,423			10,708			10,018			9,530			6,626			(12	)	%	42		%
FDIC premium expense	7,850			9,978			8,614			9,090			6,062			(21	)	%	29		%
Advertising and public relations	8,365			5,070			3,599			5,313			5,205			65		%	61		%
Communications and courier	7,014			7,530			8,232			5,379			4,328			(7	)	%	62		%
Amortization of intangible assets	6,460			6,460			6,474			3,568			1,964			*			NM
Other (d)	25,701			50,999			35,332			62,580			28,113			(50	)	%	(9	)	%
Total noninterest expense	294,031			332,768			313,265			346,670			236,869			(12	)	%	24		%
Income before income taxes	358,641			105,689			124,925			25,608			85,365			NM			NM
Provision for income taxes (j)	83,925			19,697			29,931			73,989			13,596			NM			NM
Net income/(loss)	274,716			85,992			94,994			(48,381		)	71,769			NM			NM
Net income attributable to noncontrolling interest	2,883			2,852			2,820			2,910			2,883			1		%	*
Net income/(loss) attributable to controlling interest	271,833			83,140			92,174			(51,291		)	68,886			NM			NM
Preferred stock dividends	1,550			1,550			1,550			1,550			1,550			*			*
Net income/(loss) available to common shareholders	$	270,283		$	81,590		$	90,624		$	(52,841	)	$	67,336		NM			NM
Common Stock Data
EPS (c)	$	0.83		$	0.25		$	0.28		$	(0.20	)	$	0.29		NM			NM
Basic shares (thousands)	324,406			325,153			326,489			265,169			233,749			*			39		%
Diluted EPS	$	0.83		$	0.25		$	0.27		$	(0.20	)	$	0.28		NM			NM
Diluted shares (thousands)	327,252			328,426			330,344			265,169			236,340			*			38		%
Key Ratios & Other
Return on average assets (annualized) (c) (k)	2.72		%	0.86		%	0.95		%	(0.58		)%	0.99		%
Return on average common equity (“ROE”) (annualized) (c) (k)	25.41		%	7.86		%	8.79		%	(6.73		)%	10.79		%
Return on average tangible common equity (“ROTCE”) (annualized) (c) (k) (l)	40.51		%	12.63		%	14.06		%	(8.78		)%	12.17		%
Fee income to total revenue (k)	30.81		%	29.08		%	31.10		%	35.47		%	34.89		%
Efficiency ratio (k)	66.55		%	75.90		%	71.67		%	92.41		%	73.51		%
Average full time equivalent employees	5,623			5,873			5,835			4,792			4,277

NM - Not meaningful

* Amount is less than one percent.

(a) 4Q17 includes one month of activity related to the CBF acquisition.

(b) 3Q18 includes a $3.8 million gain from the reversal of a previous valuation adjustment due to sales of TRUPS loans.

(c) 3Q18 includes a pre-tax gain of $212.9 million from the sale of Visa Class B Shares which impacts certain performance measures.

(d) Refer to the Other Income and Other Expense table on page 7 for additional information.

(e) 3Q18, 2Q18, 1Q18 and 4Q17 include $3.2 million, $3.9 million, $3.9 million and $16.8 million, respectively of acquisition- and integration-related expenses associated with the CBF acquisition.

(f) Expense reversals driven by the settlements/recoveries of certain repurchase claims.

(g) 3Q18, 2Q18, 1Q18 and 4Q17 include $4.0 million, $8.7 million, $5.4 million and $20.3 million, respectively of acquisition- and integration-related expenses associated with the CBF acquisition; 3Q17 includes $3.0 million in acquisition- and integration-related expenses primarily associated with the CBF and Coastal acquisitions.

(h) 2Q18 includes $2.2 million of acquisition- and integration-related expenses associated with the CBF acquisition.

(i) 2Q18, 1Q18 and 4Q17 include $1.7 million, $1.4 million and $.9 million, respectively of acquisition- and integration-related expenses associated with the CBF acquisition.


(j)	3Q18 reflects the tax effect on the gain on the sale of Visa Class B Shares; 4Q17 increase primarily associated with the effects of the Tax Cuts and Jobs Act ("the Tax Act"); 4Q17 and 3Q17 include the impact of a favorable effective tax rate adjustment associated with the reversal of a capital loss deferred tax valuation allowance.

(k) See Glossary of Terms for definitions of Key Ratios.

(l) This non-GAAP measure is reconciled to ROE (GAAP) in the Non-GAAP to GAAP reconciliation on page 21 of this financial supplement.

FHN OTHER INCOME AND OTHER EXPENSE

Quarterly, Unaudited



								(a)					3Q18 Changes vs.
(Thousands)	3Q18			2Q18		1Q18		4Q17		3Q17			2Q18			3Q17

Other Income
ATM and interchange fees	$	3,263		$	3,413	$	3,267	$	3,427	$	3,137		(4	)	%	4		%
Dividend income (b)	2,757			3,124		2,249		—		—			(12	)	%	NM
Electronic banking fees	1,309			1,228		1,204		1,171		1,282			7		%	2		%
Letter of credit fees	1,307			1,295		1,249		1,292		1,211			1		%	8		%
Mortgage banking	2,533			2,431		2,546		766		1,354			4		%	87		%
Deferred compensation (c)	1,458			991		451		1,876		1,128			47		%	29		%
Insurance commissions	396			476		757		472		567			(17	)	%	(30	)	%
Other service charges	3,758			3,728		4,123		3,485		2,954			1		%	27		%
Gain/(loss) on extinguishment of debt (d)	(1		)	—		—		—		(14,329		)	NM			NM
Other (e)	5,875			2,748		7,397		3,345		2,739			NM			NM
Total	$	22,655		$	19,434	$	23,243	$	15,834	$	43		17		%	NM

Other Expense
Litigation and regulatory matters (f)	$	(1,541	)	$	16	$	2,134	$	32,114	$	8,162		NM			NM
Tax credit investments	1,370			1,079		1,137		822		762			27		%	80		%
Travel and entertainment (g)	3,988			5,131		2,983		3,154		2,798			(22	)	%	43		%
Employee training and dues	1,682			1,849		1,779		1,357		1,198			(9	)	%	40		%
Customer relations	1,328			1,358		1,063		1,510		1,361			(2	)	%	(2	)	%
Miscellaneous loan costs	543			1,035		1,142		673		757			(48	)	%	(28	)	%
Supplies	1,635			1,987		1,836		1,222		928			(18	)	%	76		%
OREO	1,256			810		108		53		303			55		%	NM
Other insurance and taxes	2,761			2,752		2,665		2,457		2,396			*			15		%
Non-service components of net periodic pension and post retirement cost (h)	1,585			1,530		504		363		454			4		%	NM
Other (i)	11,094			33,452		19,981		18,855		8,994			(67	)	%	23		%
Total	$	25,701		$	50,999	$	35,332	$	62,580	$	28,113		(50	)	%	(9	)	%

Certain previously reported amounts have been reclassified.

NM - Not meaningful

* Amount is less than one percent.


(a)	4Q17 includes one month of activity related to the CBF acquisition.


(b)	Effective 1/1/18 FHN adopted ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" and began recording dividend income from FRB and FHLB holdings in other income. Prior to 1Q18 these amounts were included in Interest income on the Income Statement.


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


(d)	3Q17 includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction.


(e)	3Q18 and 1Q18 include $.8 million and $3.3 million, respectively, of gains on the sales of buildings.


(f)	3Q18 includes a $1.6 million expense reversal related to a recovery of prior litigation losses within the Regional Banking segment.


(g)	2Q18 increase largely driven by higher acquisition- and integration-related expenses associated with the CBF acquisition and seasonality.


(h)	1Q18 includes a $1.0 million favorable adjustment related to benefits received.

(i)

3Q18, 2Q18, 1Q18, and 4Q17 include $1.5 million, $23.2 million, $17.0 million, and $6.2 million, respectively, of acquisition- and integration-related expenses associated with the CBF acquisition; 2Q18 includes $4.1 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares; 4Q17 includes a $5.6 million charitable contribution to the First Tennessee Foundation.

FHN CONSOLIDATED PERIOD-END BALANCE SHEET

Quarterly, Unaudited



																3Q18 Changes vs.
(Thousands)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Assets:
Investment securities (a)	$	4,618,383		$	4,734,411		$	4,836,155		$	5,180,255		$	3,973,138		(2	)	%	16		%
Loans held-for-sale (b)	725,651			692,659			770,412			699,377			339,780			5		%	NM
Loans, net of unearned income	27,350,214			27,701,740			27,249,793			27,658,929			20,166,091			(1	)	%	36		%
Federal funds sold	113,722			91,303			62,541			87,364			76,316			25		%	49		%
Securities purchased under agreements to resell	687,437			782,765			910,670			725,609			663,637			(12	)	%	4		%
Interest-bearing cash (c)	531,681			750,634			309,351			1,185,600			604,326			(29	)	%	(12	)	%
Trading securities	1,930,991			1,649,470			1,759,430			1,416,345			1,469,402			17		%	31		%
Total earning assets	35,958,079			36,402,982			35,898,352			36,953,479			27,292,690			(1	)	%	32		%
Cash and due from banks	642,051			602,952			459,820			639,073			347,802			6		%	85		%
Fixed income receivables (d)	177,802			68,148			94,036			68,693			68,750			NM			NM
Goodwill (e)	1,409,822			1,409,276			1,398,501			1,386,853			236,335			*			NM
Other intangible assets, net (e)	161,495			167,955			174,415			184,389			43,157			(4	)	%	NM
Premises and equipment, net	506,453			525,175			531,981			532,251			293,393			(4	)	%	73		%
Other real estate owned ("OREO")	28,628			29,712			35,715			43,382			12,522			(4	)	%	NM
Allowance for loan losses	(185,959		)	(185,462		)	(187,194		)	(189,555		)	(194,867		)	*			(5	)	%
Derivative assets	54,476			122,056			114,348			81,634			80,976			(55	)	%	(33	)	%
Other assets (a)	1,883,077			1,934,001			1,943,221			1,723,189			1,441,878			(3	)	%	31		%
Total assets	$	40,635,924		$	41,076,795		$	40,463,195		$	41,423,388		$	29,622,636		(1	)	%	37		%

Liabilities and Equity:
Deposits:
Consumer interest	$	12,800,892		$	12,780,195		$	12,674,251		$	12,877,955		$	9,164,017		*			40		%
Commercial interest	5,735,486			5,547,510			5,816,992			5,469,868			2,915,446			3		%	97		%
Market-indexed (f)	4,445,826			4,412,272			4,346,862			4,249,536			3,534,546			1		%	26		%
Total interest-bearing deposits	22,982,204			22,739,977			22,838,105			22,597,359			15,614,009			1		%	47		%
Noninterest-bearing deposits	8,025,881			8,237,890			7,980,846			8,023,003			6,485,245			(3	)	%	24		%
Total deposits	31,008,085			30,977,867			30,818,951			30,620,362			22,099,254			*			40		%
Federal funds purchased	437,474			351,655			392,714			399,820			292,650			24		%	49		%
Securities sold under agreements to repurchase	678,510			713,152			672,154			656,602			516,867			(5	)	%	31		%
Trading liabilities	739,694			743,721			827,362			638,515			579,028			(1	)	%	28		%
Other short-term borrowings (g)	1,069,912			1,836,852			1,332,141			2,626,213			1,637,419			(42	)	%	(35	)	%
Term borrowings (e) (h)	1,200,134			1,227,281			1,214,967			1,218,097			1,059,507			(2	)	%	13		%
Fixed income payables (d)	36,939			14,739			6,167			48,996			44,304			NM			(17	)	%
Derivative liabilities	170,324			135,349			121,394			85,061			83,146			26		%	NM
Other liabilities	552,921			526,430			504,817			549,234			426,910			5		%	30		%
Total liabilities	35,893,993			36,527,046			35,890,667			36,842,900			26,739,085			(2	)	%	34		%
Equity:
Common stock	202,464			203,127			204,496			204,211			146,395			*			38		%
Capital surplus	3,101,102			3,113,612			3,155,407			3,147,613			1,401,359			*			NM
Undivided profits	1,484,959			1,254,069			1,211,655			1,160,434			1,177,126			18		%	26		%
Accumulated other comprehensive loss, net (i)	(437,649		)	(412,114		)	(390,085		)	(322,825		)	(232,384		)	6		%	88		%
Preferred stock	95,624			95,624			95,624			95,624			95,624			*			*
Noncontrolling interest (j)	295,431			295,431			295,431			295,431			295,431			*			*
Total equity	4,741,931			4,549,749			4,572,528			4,580,488			2,883,551			4		%	64		%
Total liabilities and equity	$	40,635,924		$	41,076,795		$	40,463,195		$	41,423,388		$	29,622,636		(1	)	%	37		%

NM - Not meaningful

*Amount is less than one percent.


(a)	Effective 1/1/18 FHN adopted ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" which resulted in the reclassification of all equity investments from investment securities to other assets.


(b)	3Q18 includes $619.2 million of SBA and USDA loans, $77.7 million of mortgage loans, and $28.8 million of other consumer loans; 2Q18 decrease driven by the sales of approximately $120 million UPB of loans; 4Q17 increase driven by increases in SBA and USDA loans and loans acquired from CBF that were classified as held-for-sale.


(c)	Includes excess balances held at Fed; 4Q17 increase driven by the CBF acquisition.


(d)	Period-end balances fluctuate based on the level of pending unsettled trades.


(e)	4Q17 increase driven by the CBF acquisition.


(f)	Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.


(g)	Balance fluctuates largely based on the level of FHLB borrowings as a result of loan demand and deposit levels.


(h)	3Q18 decrease includes the retirement of $10.3 million of TRUPS debt.


(i)	Effective 12/31/17 FHN early adopted ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income."


(j)	Consists of preferred stock of subsidiaries.

FHN CONSOLIDATED AVERAGE BALANCE SHEET

Quarterly, Unaudited



										(a)						3Q18 Changes vs.
(Thousands)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Assets:
Earning assets:
Loans, net of unearned income:
Commercial, financial, and industrial (C&I)	$	16,038,920		$	15,958,162		$	15,535,621		$	13,756,024		$	12,474,188		1		%	29		%
Commercial real estate	4,226,580			4,198,275			4,230,217			2,892,949			2,211,831			1		%	91		%
Consumer real estate	6,199,910			6,217,618			6,302,365			5,029,588			4,398,550			*			41		%
Permanent mortgage	348,922			369,144			389,732			400,991			405,287			(5	)	%	(14	)	%
Credit card and other	532,890			555,588			594,130			439,057			354,807			(4	)	%	50		%
Total loans, net of unearned income (b)	27,347,222			27,298,787			27,052,065			22,518,609			19,844,663			*			38		%
Loans held-for-sale (c)	727,508			727,212			726,978			504,577			540,121			*			35		%
Investment securities:
U.S. treasuries	98			98			98			99			109			*			(10	)	%
U.S. government agencies	4,594,639			4,705,893			4,792,709			4,042,844			3,762,180			(2	)	%	22		%
States and municipalities	14,332			1,621			51			182			—			NM			NM
Corporate bonds	65,505			65,719			65,634			29,904			10,000			*			NM
Other (d)	7,307			4,114			5,153			203,395			188,361			78		%	(96	)	%
Total investment securities	4,681,881			4,777,445			4,863,645			4,276,424			3,960,650			(2	)	%	18		%
Trading securities	1,501,857			1,568,675			1,711,776			1,439,152			1,125,033			(4	)	%	33		%
Other earning assets:
Federal funds sold	43,396			35,165			27,797			24,980			29,852			23		%	45		%
Securities purchased under agreements to resell	764,743			728,785			881,429			818,887			664,208			5		%	15		%
Interest-bearing cash (e)	486,280			447,461			482,060			459,868			392,274			9		%	24		%
Total other earning assets	1,294,419			1,211,411			1,391,286			1,303,735			1,086,334			7		%	19		%
Total earning assets	35,552,887			35,583,530			35,745,750			30,042,497			26,556,801			*			34		%
Allowance for loan losses	(186,204		)	(187,253		)	(190,420		)	(194,859		)	(196,631		)	(1	)	%	(5	)	%
Cash and due from banks	597,578			564,554			563,555			437,604			355,626			6		%	68		%
Fixed income receivables	54,176			51,346			61,757			79,162			54,286			6		%	*
Premises and equipment, net	518,017			532,259			537,359			367,196			293,286			(3	)	%	77		%
Derivative assets	31,322			99,212			79,292			68,692			74,453			(68	)	%	(58	)	%
Other assets (d)	3,509,257			3,530,064			3,553,431			2,305,962			1,737,006			(1	)	%	NM
Total assets	$	40,077,033		$	40,173,712		$	40,350,724		$	33,106,254		$	28,874,827		*			39		%

Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Consumer interest	$	12,663,181		$	12,581,023		$	12,586,843		$	10,279,937		$	9,244,021		1		%	37		%
Commercial interest	5,580,371			5,618,245			5,540,090			3,684,643			2,876,398			(1	)	%	94		%
Market-indexed (f)	4,486,335			4,488,503			4,238,128			3,958,224			3,523,450			*			27		%
Total interest-bearing deposits	22,729,887			22,687,771			22,365,061			17,922,804			15,643,869			*			45		%
Federal funds purchased	454,670			368,321			464,300			425,900			376,150			23		%	21		%
Securities sold under agreements to repurchase	720,716			667,689			756,487			595,275			680,366			8		%	6		%
Trading liabilities	702,026			666,092			822,815			741,063			597,269			5		%	18		%
Other short-term borrowings (g)	861,865			1,399,580			1,698,490			1,246,087			655,599			(38	)	%	31		%
Term borrowings	1,235,166			1,220,494			1,219,916			1,121,268			1,112,735			1		%	11		%
Total interest-bearing liabilities	26,704,330			27,009,947			27,327,069			22,052,397			19,065,988			(1	)	%	40		%
Noninterest-bearing deposits	8,117,349			8,003,901			7,843,239			6,972,912			6,411,160			1		%	27		%
Fixed income payables	17,582			15,453			27,913			53,401			28,455			14		%	(38	)	%
Derivative liabilities	114,211			103,130			72,157			65,843			80,916			11		%	41		%
Other liabilities	512,259			488,735			506,430			455,536			421,551			5		%	22		%
Total liabilities	35,465,731			35,621,166			35,776,808			29,600,089			26,008,070			*			36		%
Equity:
Common stock	202,852			203,381			204,332			165,991			146,354			*			39		%
Capital surplus	3,108,721			3,121,578			3,151,931			1,993,908			1,397,883			*			NM
Undivided profits	1,323,826			1,240,809			1,192,462			1,194,840			1,159,451			7		%	14		%
Accumulated other comprehensive loss, net (h)	(415,152		)	(404,277		)	(365,864		)	(239,629		)	(227,986		)	3		%	82		%
Preferred stock	95,624			95,624			95,624			95,624			95,624			*			*
Noncontrolling interest (i)	295,431			295,431			295,431			295,431			295,431			*			*
Total equity	4,611,302			4,552,546			4,573,916			3,506,165			2,866,757			1		%	61		%
Total liabilities and equity	$	40,077,033		$	40,173,712		$	40,350,724		$	33,106,254		$	28,874,827		*			39		%

NM - Not meaningful

*Amount is less than one percent.

(a) 4Q17 includes the average impact of one month of balances related to the CBF acquisition.

(b) Includes loans on nonaccrual status.

(c) 3Q18 includes $618.9 million of SBA and USDA loans, $79.3 million of mortgage loans, and $29.3 million of other consumer loans; 1Q18 increase driven by the

CBF acquisition.

(d) Effective 1/1/18 FHN adopted ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" which resulted in the reclassification of all equity investments from investment securities to other assets.

(e) Includes excess balances held at Fed.

(f) Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.

(g) Balance fluctuates largely based on the level of FHLB borrowings as a result of loan demand and deposit levels.

(h) Effective 12/31/17 FHN early adopted ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income."

(i) Consists of preferred stock of subsidiaries.

FHN CONSOLIDATED NET INTEREST INCOME (a)

Quarterly, Unaudited



										(b)						3Q18 Changes vs.
(Thousands)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Interest Income:
Loans, net of unearned income (c)	$	333,088		$	326,069		$	301,411		$	242,950		$	207,845		2		%	60		%
Loans held-for-sale (d)	9,977			11,228			12,144			6,601			6,123			(11	)	%	63		%
Investment securities:
U.S. government agencies	31,106			31,692			31,870			25,911			23,844			(2	)	%	30		%
States and municipalities	129			13			—			3			—			NM			NM
Corporate bonds	714			720			745			355			131			(1	)	%	NM
Other (e)	592			342			363			2,015			1,731			73		%	(66	)	%
Total investment securities	32,541			32,767			32,978			28,284			25,706			(1	)	%	27		%
Trading securities	14,305			14,967			14,537			11,285			8,604			(4	)	%	66		%
Other earning assets:
Federal funds sold	273			207			145			113			131			32		%	NM
Securities purchased under agreements to resell	3,510			2,944			2,503			1,652			1,476			19		%	NM
Interest-bearing cash	2,257			1,950			1,684			1,484			1,226			16		%	84		%
Total other earning assets	6,040			5,101			4,332			3,249			2,833			18		%	NM
Interest income	$	395,951		$	390,132		$	365,402		$	292,369		$	251,111		1		%	58		%

Interest Expense:
Interest-bearing deposits:
Consumer interest	$	17,968		$	14,153		$	7,534		$	4,977		$	5,032		27		%	NM
Commercial interest	18,302			14,737			12,127			7,220			4,970			24		%	NM
Market-indexed (f)	22,820			19,859			15,372			12,272			10,266			15		%	NM
Total interest-bearing deposits	59,090			48,749			35,033			24,469			20,268			21		%	NM
Federal funds purchased	2,355			1,640			1,738			1,387			1,173			44		%	NM
Securities sold under agreements to repurchase	2,780			1,997			1,901			1,175			1,815			39		%	53		%
Trading liabilities	5,125			4,790			5,124			4,186			3,298			7		%	55		%
Other short-term borrowings	4,627			6,473			6,403			4,145			2,012			(29	)	%	NM
Term borrowings	13,992			13,230			11,983			10,183			9,762			6		%	43		%
Interest expense	87,969			76,879			62,182			45,545			38,328			14		%	NM
Net interest income - tax equivalent basis	307,982			313,253			303,220			246,824			212,783			(2	)	%	45		%
Fully taxable equivalent adjustment	(2,282		)	(2,321		)	(2,047		)	(4,736		)	(2,966		)	2		%	23		%
Net interest income	$	305,700		$	310,932		$	301,173		$	242,088		$	209,817		(2	)	%	46		%

NM - Not meaningful


(a)	Net interest income adjusted to a fully taxable equivalent (“FTE”) basis assuming a statutory federal income tax of 21 percent and 35 percent in 2018 and 2017, respectively, and, where applicable, state income taxes.


(b)	4Q17 includes one month of activity related to the CBF acquisition.


(c)	Includes interest on loans in nonaccrual status.


(d)	3Q18 decrease largely driven by the sale of approximately $120 million UPB of loans in 2Q18.


(e)	1Q18 decrease driven by the adoption of ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" which resulted in the reclassification of interest and dividend income on equity securities to noninterest income on a prospective basis. The remaining balance is primarily comprised of interest earned on SBA IO strips.


(f)	Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.

FHN CONSOLIDATED AVERAGE BALANCE SHEET: YIELDS AND RATES

Quarterly, Unaudited



	3Q18		2Q18		1Q18		4Q17		3Q17

Assets:
Earning assets (a)
Loans, net of unearned income (b)
Commercial loans	4.95	%	4.88	%	4.53	%	4.27	%	4.13	%
Consumer loans	4.51		4.52		4.48		4.33		4.23
Total loans, net of unearned income (c)	4.84		4.79		4.51		4.28		4.16
Loans held-for-sale	5.49		6.18		6.68		5.23		4.53
Investment securities:
U.S. government agencies	2.71		2.69		2.66		2.56		2.54
States and municipalities	3.60		3.12		3.37		7.04		—
Corporate bonds	4.36		4.38		4.54		4.74		5.25
Other (d)	31.97		32.48		27.65		3.96		3.67
Total investment securities	2.78		2.74		2.71		2.65		2.60
Trading securities	3.81		3.82		3.40		3.14		3.06
Other earning assets:
Federal funds sold	2.50		2.36		2.11		1.79		1.75
Securities purchased under agreements to resell	1.82		1.62		1.15		0.80		0.88
Interest-bearing cash	1.84		1.75		1.42		1.28		1.24
Total other earning assets	1.85		1.69		1.26		0.99		1.03
Interest income/total earning assets	4.43	%	4.39	%	4.13	%	3.87	%	3.76	%
Liabilities:
Interest-bearing liabilities:
Interest-bearing deposits:
Consumer interest	0.56	%	0.45	%	0.24	%	0.19	%	0.22	%
Commercial interest	1.30		1.05		0.89		0.78		0.69
Market-indexed (e)	2.02		1.77		1.47		1.23		1.16
Total interest-bearing deposits	1.03		0.86		0.64		0.54		0.51
Federal funds purchased	2.05		1.79		1.52		1.29		1.24
Securities sold under agreements to repurchase	1.53		1.20		1.02		0.78		1.06
Trading liabilities	2.90		2.88		2.53		2.24		2.19
Other short-term borrowings	2.13		1.86		1.53		1.32		1.22
Term borrowings (f)	4.53		4.34		3.93		3.63		3.51
Interest expense/total interest-bearing liabilities	1.31		1.14		0.92		0.82		0.80
Net interest spread	3.12	%	3.25	%	3.21	%	3.05	%	2.96	%
Effect of interest-free sources used to fund earning assets	0.32		0.28		0.22		0.22		0.23
Net interest margin	3.44	%	3.53	%	3.43	%	3.27	%	3.19	%

Total loan yield	4.84	%	4.79	%	4.51	%	4.28	%	4.16	%
Total deposit cost	0.76	%	0.64	%	0.47	%	0.39	%	0.36	%

Yields are adjusted to a FTE basis assuming a statutory federal income tax rate of 21 percent and 35 percent in 2018 and 2017, respectively, and, where applicable, state income taxes.

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

(b) Includes loan fees and cash basis interest income.

(d) 1Q18 increase driven by the adoption of ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" which resulted in the reclassification of interest and dividend income on equity securities to noninterest income on a prospective basis. The remaining balance is primarily comprised of higher-yielding SBA IO strips.

(e) Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.

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

FHN CAPITAL HIGHLIGHTS

Quarterly, Unaudited



																3Q18 Changes vs.
(Dollars and shares in thousands)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Common equity tier 1 capital (a) (b) (c)	$	3,252,825		$	3,002,958		$	2,991,223		$	2,962,155		$	2,477,210		8		%	31	%
Tier 1 capital (a) (b)	3,589,369			3,338,179			3,324,349			3,281,478			2,764,780			8		%	30	%
Total capital (a)	3,972,895			3,760,651			3,746,007			3,703,754			3,005,198			6		%	32	%

Risk-weighted assets (“RWA”) (a) (b)	33,002,430			33,437,145			33,293,821			33,373,877			24,678,030			(1	)	%	34	%
Average assets for leverage (a) (b) (d)	38,962,519			39,003,215			39,127,510			31,824,751			28,793,816			*			35	%

Common equity tier 1 ratio (a) (b) (c)	9.86		%	8.98		%	8.98		%	8.88		%	10.04		%
Tier 1 ratio (a) (b)	10.88		%	9.98		%	9.98		%	9.83		%	11.20		%
Total capital ratio (a)	12.04		%	11.25		%	11.25		%	11.10		%	12.18		%
Leverage ratio (a) (b) (e)	9.21		%	8.56		%	8.50		%	10.31		%	9.60		%

Total equity to total assets (c)	11.67		%	11.08		%	11.30		%	11.06		%	9.73		%
Tangible common equity/tangible assets (“TCE/TA”) (c) (f)	7.12		%	6.54		%	6.71		%	6.57		%	7.54		%
Period-end shares outstanding	323,943			325,003			327,194			326,736			234,231			*			38	%
Cash dividends declared per common share	$	0.12		$	0.12		$	0.12		$	0.09		$	0.09		*			33	%
Book value per common share (c)	$	13.43		$	12.80		$	12.78		$	12.82		$	10.64
Tangible book value per common share (c) (f)	$	8.58		$	7.94		$	7.97		$	8.01		$	9.45
Market capitalization (millions)	$	5,591.3		$	5,798.1		$	6,161.1		$	6,531.5		$	4,485.5

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

* Amount is less than one percent.

(a) Current quarter is an estimate.

(b) See Glossary of Terms for definition.

(d) 1Q18 increase driven by the average impact of three months of balances related to the CBF acquisition compared to one month in 4Q17.

(e) 4Q17 increase driven by the CBF acquisition.

(f) TCE/TA and Tangible book value per common share are non-GAAP measures and are reconciled to Total equity to total assets (GAAP) and to Book value per common share (GAAP), respectively, in the Non-GAAP to GAAP reconciliation on page 21 of this financial supplement.

FHN BUSINESS SEGMENT HIGHLIGHTS

Quarterly, Unaudited



																3Q18 Changes vs.
(Thousands)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Regional Banking
Net interest income	$	302,448		$	306,955		$	293,143		$	242,307		$	209,100		(1	)	%	45		%
Noninterest income	79,857			80,278			79,958			70,541			64,370			(1	)	%	24		%
Total revenues	382,305			387,233			373,101			312,848			273,470			(1	)	%	40		%
Provision for loan losses	8,045			4,925			4,458			9,431			8,552			63		%	(6	)	%
Noninterest expense (a)	207,591			209,610			202,082			177,473			150,445			(1	)	%	38		%
Income before income taxes	166,669			172,698			166,561			125,944			114,473			(3	)	%	46		%
Provision for income taxes	39,101			40,584			39,244			43,799			41,191			(4	)	%	(5	)	%
Net income	$	127,568		$	132,114		$	127,317		$	82,145		$	73,282		(3	)	%	74		%

Fixed Income
Net interest income	$	9,048		$	9,174		$	8,464		$	5,907		$	5,985		(1	)	%	51		%
Noninterest income	41,123			38,363			45,605			55,250			55,803			7		%	(26	)	%
Total revenues	50,171			47,537			54,069			61,157			61,788			6		%	(19	)	%
Noninterest expense	47,306			47,958			50,371			55,151			53,136			(1	)	%	(11	)	%
Income/(loss) before income taxes	2,865			(421		)	3,698			6,006			8,652			NM			(67	)	%
Provision/(benefit) for income taxes	532			(329		)	785			1,971			2,970			NM			(82	)	%
Net income/(loss)	$	2,333		$	(92	)	$	2,913		$	4,035		$	5,682		NM			(59	)	%

Corporate
Net interest income/(expense)	$	(15,415	)	$	(17,108	)	$	(16,128	)	$	(16,705	)	$	(13,769	)	10		%	(12	)	%
Noninterest income (b)	222,619			8,735			9,311			6,655			(9,476		)	NM			NM
Total revenues	207,204			(8,373		)	(6,817		)	(10,050		)	(23,245		)	NM			NM
Noninterest expense (c)	33,323			67,093			52,381			74,398			23,926			(50	)	%	39		%
Loss before income taxes	173,881			(75,466		)	(59,198		)	(84,448		)	(47,171		)	NM			NM
Provision/ (benefit) for income taxes (d)	40,529			(22,752		)	(13,524		)	36,599			(34,167		)	NM			NM
Net income/(loss)	$	133,352		$	(52,714	)	$	(45,674	)	$	(121,047	)	$	(13,004	)	NM			NM

Non-Strategic
Net interest income	$	9,619		$	11,911		$	15,694		$	10,579		$	8,501		(19	)	%	13		%
Noninterest income (e)	5,373			149			1,143			744			1,720			NM			NM
Total revenues	14,992			12,060			16,837			11,323			10,221			24		%	47		%
Provision/(provision credit) for loan losses	(6,045		)	(4,925		)	(5,458		)	(6,431		)	(8,552		)	(23	)	%	29		%
Noninterest expense (f)	5,811			8,107			8,431			39,648			9,362			(28	)	%	(38	)	%
Income/(loss) before income taxes	15,226			8,878			13,864			(21,894		)	9,411			72		%	62		%
Provision/(benefit) for income taxes	3,763			2,194			3,426			(8,380		)	3,602			72		%	4		%
Net income/(loss)	$	11,463		$	6,684		$	10,438		$	(13,514	)	$	5,809		71		%	97		%

Total Consolidated
Net interest income	$	305,700		$	310,932		$	301,173		$	242,088		$	209,817		(2	)	%	46		%
Noninterest income	348,972			127,525			136,017			133,190			112,417			NM			NM
Total revenues	654,672			438,457			437,190			375,278			322,234			49		%	NM
Provision/(provision credit) for loan losses	2,000			—			(1,000		)	3,000			—			NM			NM
Noninterest expense	294,031			332,768			313,265			346,670			236,869			(12	)	%	24		%
Income before income taxes	358,641			105,689			124,925			25,608			85,365			NM			NM
Provision for income taxes	83,925			19,697			29,931			73,989			13,596			NM			NM
Net income/(loss)	$	274,716		$	85,992		$	94,994		$	(48,381	)	$	71,769		NM			NM

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

NM - Not meaningful


(a)	3Q18 includes a $1.6 million expense reversal related to a recovery of prior litigation losses; 3Q17 includes $4.4 million of loss accruals related to legal matters.


(b)	3Q18 includes a pre-tax gain of $212.9 million from the sale of Visa Class B Shares; 3Q17 includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction.


(c)	3Q18, 2Q18, 1Q18 and 4Q17 include $11.4 million, $43.2 million, $31.4 million and $46.7 million, respectively of acquisition- and integration-related expenses primarily associated with the CBF acquisition; 3Q17 includes $8.2 million of acquisition- and integration-related expenses primarily associated with the CBF and Coastal acquisitions.


(d)	3Q18 reflects the tax effect on the gain on the sale of Visa Class B Shares; 4Q17 increase primarily associated with the effects of the Tax Act; 4Q17 and 3Q17 include the impact of a favorable effective tax rate adjustment associated with the reversal of a capital loss deferred tax valuation allowance.


(e)	3Q18 includes a $3.8 million gain from the reversal of a previous valuation adjustment due to sales of TRUPS loans.


(f)	4Q17 includes $32.0 million of loss accruals related to legal matters; 3Q17 includes $3.6 million of loss accruals related to legal matters.

FHN REGIONAL BANKING

Quarterly, Unaudited



																3Q18 Changes vs.
	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Income Statement (thousands)
Net interest income	$	302,448		$	306,955		$	293,143		$	242,307		$	209,100		(1	)	%	45		%
Provision for loan losses	8,045			4,925			4,458			9,431			8,552			63		%	(6	)	%
Noninterest income:
NSF / Overdraft fees (a)	13,584			12,663			12,255			11,409			9,878			7		%	38		%
Cash management fees	9,255			9,210			9,285			9,396			8,923			*			4		%
Debit card income	7,811			8,395			8,409			3,685			3,635			(7	)	%	NM
Other	3,358			4,262			4,788			4,385			4,185			(21	)	%	(20	)	%
Total deposit transactions and cash management	34,008			34,530			34,737			28,875			26,621			(2	)	%	28		%
Brokerage, management fees and commissions	14,200			13,740			13,483			12,642			11,936			3		%	19		%
Trust services and investment management	7,453			8,147			7,292			7,131			6,968			(9	)	%	7		%
Bankcard income	7,000			6,642			6,279			8,121			6,057			5		%	16		%
Other service charges	3,449			3,383			3,801			3,165			2,613			2		%	32		%
Miscellaneous revenue	13,747			13,836			14,366			10,607			10,175			(1	)	%	35		%
Total noninterest income	79,857			80,278			79,958			70,541			64,370			(1	)	%	24		%
Noninterest expense:
Employee compensation, incentives, and benefits	83,506			83,703			82,655			69,788			59,337			*			41		%
Other (b)	124,085			125,907			119,427			107,685			91,108			(1	)	%	36		%
Total noninterest expense	207,591			209,610			202,082			177,473			150,445			(1	)	%	38		%
Income before income taxes	$	166,669		$	172,698		$	166,561		$	125,944		$	114,473		(3	)	%	46		%
PPNR (c)	174,714			177,623			171,019			135,375			123,025			(2	)	%	42		%
Efficiency ratio (d)	54.30		%	54.13		%	54.16		%	56.73		%	55.09		%

Balance Sheet (millions)
Average loans	$	26,057		$	25,911		$	25,578		$	21,083		$	18,402		1		%	42		%
Average other earning assets	60			58			51			41			44			3		%	36		%
Total average earning assets	26,117			25,969			25,629			21,124			18,446			1		%	42		%
Total average deposits	27,595			27,427			27,120			22,382			20,067			1		%	38		%
Total period-end deposits	27,758			27,861			27,653			27,539			20,077			*			38		%
Total period-end assets	28,864			29,078			28,388			28,866			19,600			(1	)	%	47		%
Net interest margin (e)	4.63		%	4.77		%	4.67		%	4.64		%	4.56		%
Net interest spread	4.09			4.15			4.03			3.84			3.72
Loan average yield	4.70			4.65			4.39			4.13			4.00
Deposit average rate	0.61			0.50			0.36			0.29			0.28

Key Statistics
Financial center locations (f)	292			292			345			347			163			*			79		%

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

NM - Not meaningful

* Amount is less than one percent


(a)	Variability is driven by changes in consumer behavior and seasonality.


(b)	3Q18 includes a $1.6 million expense reversal related to a recovery of prior litigation losses; 3Q17 includes $4.4 million of loss accruals related to legal matters.


(c)	Pre-provision net revenue is not a GAAP number but is used in regulatory stress test reporting. The presentation of PPNR in this Financial Supplement follows the regulatory definition.


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


(e)	Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21 percent and 35 percent in 2018 and 2017, respectively, and, where applicable, state income taxes.


(f)	2Q18 decrease driven by branch consolidation and integration efforts; 4Q18 increase driven by the CBF acquisition.

FHN FIXED INCOME

Quarterly, Unaudited



																	3Q18 Changes vs.
	3Q18			2Q18				1Q18			4Q17			3Q17			2Q18			3Q17

Income Statement (thousands)
Net interest income	$	9,048		$	9,174			$	8,464		$	5,907		$	5,985		(1	)	%	51		%
Noninterest income:
Fixed income product revenue	34,268			29,940				38,047			40,608			45,020			14		%	(24	)	%
Other	6,855			8,423				7,558			14,642			10,783			(19	)	%	(36	)	%
Total noninterest income	41,123			38,363				45,605			55,250			55,803			7		%	(26	)	%
Noninterest expense	47,306			47,958				50,371			55,151			53,136			(1	)	%	(11	)	%
Income/(loss) before income taxes	$	2,865		$	(421	)		$	3,698		$	6,006		$	8,652		NM			(67	)	%

Efficiency ratio (a)	94.29		%	NM				93.16		%	90.18		%	86.00		%
Fixed income product average daily revenue	$	544		$	468			$	624		$	655		$	715		16		%	(24	)	%

Balance Sheet (millions)
Average trading inventory	$	1,500		$	1,566			$	1,710		$	1,437		$	1,122		(4	)	%	34		%
Average loans held-for-sale	617			539				487			363			443			14		%	39		%
Average other earning assets	826			797				933			850			690			4		%	20		%
Total average earning assets	2,943			2,902				3,130			2,650			2,255			1		%	31		%
Total period-end assets	3,743			3,465				3,655			2,990			2,751			8		%	36		%
Net interest margin (b)	1.26		%	1.29			%	1.09		%	0.94		%	1.13		%

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

NM - Not meaningful


(a)	Noninterest expense divided by total revenue.


(b)	Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21 percent and 35 percent in 2018 and 2017, respectively, and, where applicable, state income taxes.

FHN CORPORATE

Quarterly, Unaudited



																3Q18 Changes vs.
	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Income Statement (thousands)
Net interest income/(expense)	$	(15,415	)	$	(17,108	)	$	(16,128	)	$	(16,705	)	$	(13,769	)	10		%	(12	)	%
Noninterest income excluding securities gains/(losses) (a)	9,760			8,704			9,225			6,518			(9,482		)	12		%	NM
Securities gains/(losses), net (b)	212,859			31			86			137			6			NM			NM
Noninterest expense (c)	33,323			67,093			52,381			74,398			23,926			(50	)	%	39		%
Loss before income taxes	$	173,881		$	(75,466	)	$	(59,198	)	$	(84,448	)	$	(47,171	)	NM			NM

Average Balance Sheet (millions)
Average investment securities	$	4,675		$	4,773		$	4,859		$	4,273		$	3,959		(2	)	%	18		%
Total earning assets	$	5,223		$	5,267		$	5,394		$	4,796		$	4,408		(1	)	%	18		%

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

NM - Not Meaningful

(a) 3Q18 and 1Q18 include $.8 million and $3.3 million, respectively, of gains on the sales of buildings; 2Q18 and 4Q17 include $2.5 million and $1.3 million, respectively, of BOLI policy gains; 3Q17 includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction.

(b) 3Q18 includes a pre-tax gain of $212.9 million from the sale of Visa Class B Shares.

(c) 3Q18, 2Q18, 1Q18, and 4Q17 include $11.4 million, $43.2 million, $31.4 million, and $46.7 million, respectively, of acquisition- and integration-related expenses primarily associated with the CBF acquisition; 2Q18 includes $4.1 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares; 4Q17 includes a $5.6 million charitable contribution to the First Tennessee Foundation, somewhat offset by $4.3 million of deferred compensation BOLI gains; 3Q17 includes $8.2 million of acquisition- and integration-related expenses primarily associated with the CBF and Coastal acquisitions.

FHN NON-STRATEGIC

Quarterly, Unaudited



																					3Q18 Changes vs.
	3Q18				2Q18				1Q18				4Q17				3Q17				2Q18			3Q17

Income Statement (thousands)
Net interest income	$	9,619			$	11,911			$	15,694			$	10,579			$	8,501			(19	)	%	13		%
Provision/(provision credit) for loan losses	(6,045		)		(4,925		)		(5,458		)		(6,431		)		(8,552		)		(23	)	%	29		%
Noninterest income (a)	5,373				149				1,143				744				1,720				NM			NM
Noninterest expense (b)	5,811				8,107				8,431				39,648				9,362				(28	)	%	(38	)	%
Income/(loss) before income taxes	$	15,226			$	8,878			$	13,864			$	(21,894	)		$	9,411			72		%	62		%

Average Balance Sheet (millions)
Loans	$	1,170			$	1,274			$	1,372			$	1,342			$	1,358			(8	)	%	(14	)	%
Other assets	96				175				213				118				73				(45	)	%	32		%
Total assets	1,266				1,449				1,585				1,460				1,431				(13	)	%	(12	)	%
Net interest margin (c)	3.01			%	3.30			%	3.96			%	2.86			%	2.34			%
Efficiency ratio (d)	38.76			%	67.22			%	50.07			%	NM				91.60			%

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

NM - Not meaningful


(a)	3Q18 includes a $3.8 million gain from the reversal of a previous valuation adjustment due to sales of TRUPS loans.


(b)	4Q17 includes $32.0 million of loss accruals related to legal matters; 3Q17 includes $3.6 million of loss accrual related to legal matter.


(c)	Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21 percent and 35 percent in 2018 and 2017, respectively, and, where applicable, state income taxes.


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

FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited



																					3Q18 Changes vs.
(Dollars in thousands)	3Q18				2Q18				1Q18				4Q17				3Q17				2Q18	3Q17

Allowance for Loan Losses Walk-Forward
Beginning reserve	$	185,462			$	187,194			$	189,555			$	194,867			$	197,257			(1)%	(6)%
Provision/(provision credit) for loan losses	2,000				—				(1,000			)	3,000				—				NM	NM
Charge-offs	(9,482			)	(10,008			)	(8,483			)	(17,481			)	(10,670			)	5%	11%
Recoveries	7,979				8,276				7,122				9,169				8,280				(4)%	(4)%
Ending balance	$	185,959			$	185,462			$	187,194			$	189,555			$	194,867			*	(5)%
Reserve for unfunded commitments	7,581				6,536				4,613				5,079				4,372				16%	73%
Total allowance for loan losses plus reserve for unfunded commitments	$	193,540			$	191,998			$	191,807			$	194,634			$	199,239			1%	(3)%

Allowance for Loan Losses
Regional Banking	$	160,824			$	156,473			$	155,873			$	154,111			$	156,021			3%	3%
Non-Strategic	25,135				28,989				31,321				35,444				38,846				(13)%	(35)%
Total allowance for loan losses	$	185,959			$	185,462			$	187,194			$	189,555			$	194,867			*	(5)%

Nonperforming Assets (a)
Regional Banking
Nonperforming loans (b)	$	76,145			$	50,856			$	57,372			$	52,659			$	40,610			50%	88%
OREO (c)	20,571				22,095				27,614				34,679				2,848				(7)%	NM
Total Regional Banking	$	96,716			$	72,951			$	84,986			$	87,338			$	43,458			33%	NM
Non-Strategic
Nonperforming loans	$	68,485			$	72,190			$	72,519			$	75,803			$	82,203			(5)%	(17)%
Nonperforming loans held-for-sale after fair value adjustments	5,675				5,769				8,258				6,971				7,314				(2)%	(22)%
OREO (c)	5,155				4,361				4,761				4,887				5,029				18%	3%
Total Non-Strategic	$	79,315			$	82,320			$	85,538			$	87,661			$	94,546			(4)%	(16)%
Corporate
Nonperforming loans	$	1,727			$	1,746			$	2,140			$	2,157			$	2,173			(1)%	(21)%
Total nonperforming assets (c)	$	177,758			$	157,017			$	172,664			$	177,156			$	140,177			13%	27%

Net Charge-Offs (a)
Regional Banking	$	3,693			$	4,325			$	2,696			$	11,429			$	5,739			(15)%	(36)%
Non-Strategic	(2,190			)	(2,593			)	(1,335			)	(3,117			)	(3,349			)	16%	35%
Total net charge-offs/(recoveries)	$	1,503			$	1,732			$	1,361			$	8,312			$	2,390			(13)%	(37)%

Consolidated Key Ratios (d) (e)
30+ Delinq. % (f)	0.35		%		0.31		%		0.29		%		0.33		%		0.38		%
NPL % (g)	0.54				0.45				0.48				0.47				0.62
NPA %	0.63				0.55				0.60				0.61				0.66
Net charge-offs %	0.02				0.03				0.02				0.15				0.05
Allowance / loans % (h)	0.68				0.67				0.69				0.69				0.97
Allowance / NPL	1.27		x		1.49		x		1.42		x		1.45		x		1.56		x
Allowance / NPA	1.08		x		1.23		x		1.14		x		1.11		x		1.47		x
Allowance / net charge-offs	31.20		x		26.70		x		33.90		x		5.75		x		20.55		x

Other
Loans past due 90 days or more and still accruing (i)	$	49,352			$	44,467			$	52,700			$	48,047			$	41,025			11%	20%
Guaranteed portion (i)	7,772				8,412				9,076				9,454				10,046				(8)%	(23)%
Period-end loans, net of unearned income (millions)	27,350				27,702				27,250				27,659				20,166				(1)%	36%

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

NM - Not meaningful

* Amount is less than one percent.

(a) In 3Q18, the acquired CBF indirect auto portfolio was retrospectively reclassed through 4Q17 from the Regional Banking segment to the Non-Strategic segment.

(b) 3Q18 increase in NPLs was driven by one large credit.

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

(e) 4Q17 Asset Quality ratios were impacted by the addition of approximately $7.4 billion in loans as a result of the Capital Bank acquisition.

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

(g) 3Q18 increase in NPLs as a percentages of total loans was driven by one large credit.

(h) The 4Q17 decrease in allowance to loans reflects the addition of loans acquired from Capital Bank at fair value which includes an estimate of life of loan credit losses.

(i) Includes loans held-for-sale.

FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited



																3Q18 Changes vs.
	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18	3Q17

Key Portfolio Details
C&I
Period-end loans ($ millions)	$	16,044		$	16,439		$	15,828		$	16,057		$	12,792		(2)%	25%
30+ Delinq. % (a)	0.15		%	0.14		%	0.16		%	0.19		%	0.27		%
NPL % (b)	0.26			0.12			0.18			0.19			0.15
Charge-offs % (qtr. annualized)	0.01			0.06			0.01			0.28			0.10
Allowance / loans %	0.63		%	0.59		%	0.63		%	0.61		%	0.77		%
Allowance / net charge-offs	74.66		x	10.73		x	44.48		x	2.52		x	7.97		x

Commercial Real Estate
Period-end loans ($ millions)	$	4,237		$	4,136		$	4,234		$	4,215		$	2,251		2%	88%
30+ Delinq. % (a) (c)	0.20		%	0.06		%	0.08		%	0.15		%	0.02		%
NPL %	0.02			0.03			0.02			0.03			0.07
Charge-offs % (qtr. annualized)	NM			0.01			—			NM			NM
Allowance / loans %	0.80		%	0.82		%	0.69		%	0.67		%	1.32		%
Allowance / net charge-offs	NM			55.04		x	NM			NM			NM

Consumer Real Estate
Period-end loans ($ millions)	$	6,191		$	6,223		$	6,247		$	6,368		$	4,370		(1)%	42%
30+ Delinq. % (a)	0.74		%	0.68		%	0.57		%	0.65		%	0.74		%
NPL %	1.30			1.28			1.22			1.12			1.76
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	0.43		%	0.51		%	0.52		%	0.59		%	0.94		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Permanent Mortgage
Period-end loans ($ millions)	$	347		$	355		$	380		$	399		$	403		(2)%	(14)%
30+ Delinq. % (a)	2.59		%	1.92		%	2.63		%	1.85		%	1.51		%
NPL %	6.43			6.87			6.65			6.61			6.81
Charge-offs % (qtr. annualized)	NM			NM			0.10			0.10			NM
Allowance / loans %	3.88		%	3.97		%	4.07		%	3.90		%	3.90		%
Allowance / net charge-offs	NM			NM			40.18		x	37.67		x	NM

Credit Card and Other
Period-end loans ($ millions)	$	531		$	549		$	561		$	620		$	350		(3)%	52%
30+ Delinq. % (a)	1.64		%	1.80		%	0.98		%	1.24		%	0.89		%
NPL %	0.13			0.07			0.18			0.03			0.04
Charge-offs % (qtr. annualized)	3.32			2.61			2.15			2.30			2.80
Allowance / loans %	2.21		%	1.63		%	1.73		%	1.61		%	2.95		%
Allowance / net charge-offs	0.66		x	0.62		x	0.76		x	0.99		x	1.04		x

NM - Not meaningful

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

(b) 3Q18 increase in NPLs as a percentages of total loans was driven by one large credit.

FHN ASSET QUALITY: REGIONAL BANKING

Quarterly, Unaudited



																3Q18 Changes vs.
	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18	3Q17

Total Regional Banking (a)
Period-end loans ($ millions)	$	26,203		$	26,427		$	25,888		$	26,185		$	18,788		(1)%	39%
30+ Delinq. % (b)	0.26		%	0.22		%	0.20		%	0.24		%	0.28		%
NPL % (c)	0.29			0.19			0.22			0.20			0.22
Charge-offs % (qtr. annualized)	0.06			0.07			0.04			0.21			0.12
Allowance / loans %	0.61		%	0.59		%	0.60		%	0.59		%	0.83		%
Allowance / net charge-offs	10.98		x	9.02		x	14.25		x	3.40		x	6.85		x

Key Portfolio Details
C&I
Period-end loans ($ millions)	$	15,675		$	16,020		$	15,410		$	15,639		$	12,373		(2)%	27%
30+ Delinq. % (b)	0.15		%	0.15		%	0.16		%	0.19		%	0.28		%
NPL % (c)	0.25			0.10			0.16			0.18			0.13
Charge-offs % (qtr. annualized)	0.01			0.06			0.02			0.29			0.10
Allowance / loans %	0.63		%	0.60		%	0.64		%	0.62		%	0.78		%
Allowance / net charge-offs	71.90		x	10.57		x	43.61		x	2.48		x	7.83		x

Commercial Real Estate
Period-end loans ($ millions)	$	4,237		$	4,136		$	4,234		$	4,215		$	2,251		2%	88%
30+ Delinq. % (b) (d)	0.20		%	0.06		%	0.08		%	0.15		%	0.02		%
NPL %	0.02			0.03			0.02			0.03			0.07
Charge-offs % (qtr. annualized)	NM			0.01			—			NM			NM
Allowance / loans %	0.80		%	0.82		%	0.69		%	0.67		%	1.32		%
Allowance / net charge-offs	NM			55.04		x	NM			NM			NM

Consumer Real Estate
Period-end loans ($ millions)	$	5,749		$	5,734		$	5,707		$	5,774		$	3,714		*	55%
30+ Delinq. % (b)	0.56		%	0.51		%	0.38		%	0.40		%	0.38		%
NPL %	0.62			0.57			0.53			0.39			0.61
Charge-offs % (qtr. annualized)	0.03			NM			NM			NM			0.04
Allowance / loans %	0.25		%	0.27		%	0.27		%	0.28		%	0.46		%
Allowance / net charge-offs	9.09		x	NM			NM			NM			11.04		x

Credit Card, Permanent Mortgage, and Other (a)
Period-end loans ($ millions)	$	542		$	537		$	537		$	557		$	450		1%	20%
30+ Delinq. % (b)	0.74		%	0.71		%	0.59		%	0.68		%	0.85		%
NPL %	0.07			0.09			0.20			0.09			0.10
Charge-offs % (qtr. annualized)	2.39			1.80			1.85			1.88			2.19
Allowance / loans %	2.55		%	2.12		%	2.27		%	2.23		%	2.79		%
Allowance / net charge-offs	1.09		x	1.17		x	1.21		x	1.37		x	1.27		x

ASSET QUALITY: CORPORATE

Permanent Mortgage
Period-end loans ($ millions)	$	42		$	44		$	49		$	53		$	58		(5)%	(28)%
30+ Delinq. % (b)	4.21		%	3.32		%	5.51		%	3.98		%	4.22		%
NPL %	4.12			3.94			4.41			4.03			3.75
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	NM			NM			NM			NM			NM
Allowance / net charge-offs	NM			NM			NM			NM			NM

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

NM - Not meaningful

* Amount is less than one percent.

(a) In 3Q18, the acquired CBF indirect auto portfolio was retrospectively reclassed through 4Q17 from the Regional Banking segment to the Non-Strategic segment.

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

(d) 3Q18 increase in delinquencies primarily driven by two credits.

FHN ASSET QUALITY: NON-STRATEGIC

Quarterly, Unaudited



																3Q18 Changes vs.
	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18	3Q17

Total Non-Strategic (a)
Period-end loans ($ millions)	$	1,105		$	1,231		$	1,313		$	1,421		$	1,320		(10)%	(16)%
30+ Delinq. % (b)	2.31		%	1.97		%	1.82		%	1.92		%	1.62		%
NPL %	6.20			5.87			5.52			5.34			6.23
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	2.27		%	2.36		%	2.38		%	2.50		%	2.94		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Key Portfolio Details
Commercial
Period-end loans ($ millions)	$	369		$	419		$	418		$	418		$	419		(12)%	(12)%
30+ Delinq. % (b)	—		%	—		%	—		%	—		%	—		%
NPL %	0.80			0.71			0.72			0.73			0.74
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	0.35		%	0.31		%	0.30		%	0.33		%	0.32		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Consumer Real Estate
Period-end loans ($ millions)	$	442		$	489		$	540		$	594		$	656		(10)%	(33)%
30+ Delinq. % (b)	3.06		%	2.63		%	2.64		%	3.06		%	2.80		%
NPL %	10.09			9.55			8.60			8.23			8.26
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	2.81		%	3.28		%	3.17		%	3.53		%	3.66		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Permanent Mortgage
Period-end loans ($ millions)	$	191		$	201		$	217		$	229		$	239		(5)%	(20)%
30+ Delinq. % (b)	3.31		%	2.28		%	3.16		%	2.12		%	1.20		%
NPL %	10.60			11.08			10.43			10.40			10.39
Charge-offs % (qtr. annualized)	NM			NM			0.17			0.18			NM
Allowance / loans %	5.76		%	5.77		%	5.93		%	5.70		%	5.62		%
Allowance / net charge-offs	NM			NM			33.55		x	31.54		x	NM

Other Consumer (a)
Period-end loans ($ millions)	$	103		$	122		$	138		$	180		$	6		(16)%	NM
30+ Delinq. % (b)	5.47		%	5.63		%	2.04		%	2.41		%	1.44		%
NPL %	0.66			0.19			0.29			0.07			1.92
Charge-offs % (qtr. annualized)	4.47			3.71			1.61			1.49			1.14
Allowance / loans %	0.37		%	0.05		%	0.05		%	0.05		%	0.69		%
Allowance / net charge-offs	0.08		x	0.01		x	0.03		x	0.09		x	0.60		x

NM - Not meaningful

(a) In 3Q18, the acquired CBF indirect auto portfolio was retrospectively reclassed through 4Q17 from the Regional Banking segment to the Non-Strategic segment.

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

FHN NON-GAAP TO GAAP RECONCILIATION

Quarterly, Unaudited



(Dollars and shares in thousands, except per share data)	3Q18			2Q18			1Q18			4Q17				3Q17

Tangible Common Equity (Non-GAAP)
(A) Total equity (GAAP)	$	4,741,931		$	4,549,749		$	4,572,528		$	4,580,488			$	2,883,551
Less: Noncontrolling interest (a)	295,431			295,431			295,431			295,431				295,431
Less: Preferred stock (a)	95,624			95,624			95,624			95,624				95,624
(B) Total common equity	$	4,350,876		$	4,158,694		$	4,181,473		$	4,189,433			$	2,492,496
Less: Intangible assets (GAAP) (b)	1,571,317			1,577,231			1,572,916			1,571,242				279,492
(C) Tangible common equity (Non-GAAP)	$	2,779,559		$	2,581,463		$	2,608,557		$	2,618,191			$	2,213,004

Tangible Assets (Non-GAAP)
(D) Total assets (GAAP)	$	40,635,924		$	41,076,795		$	40,463,195		$	41,423,388			$	29,622,636
Less: Intangible assets (GAAP) (b)	1,571,317			1,577,231			1,572,916			1,571,242				279,492
(E) Tangible assets (Non-GAAP)	$	39,064,607		$	39,499,564		$	38,890,279		$	39,852,146			$	29,343,144

Average Tangible Common Equity (Non-GAAP)
(F) Average total equity (GAAP)	$	4,611,302		$	4,552,546		$	4,573,916		$	3,506,165			$	2,866,757
Less: Average noncontrolling interest (a)	295,431			295,431			295,431			295,431				295,431
Less: Average preferred stock (a)	95,624			95,624			95,624			95,624				95,624
(G) Total average common equity	$	4,220,247		$	4,161,491		$	4,182,861		$	3,115,110			$	2,475,702
Less: Average intangible assets (GAAP) (b)	1,572,886			1,569,449			1,568,029			726,958				280,575
(H) Average tangible common equity (Non-GAAP)	$	2,647,361		$	2,592,042		$	2,614,832		$	2,388,152			$	2,195,127

Annualized Net Income/(loss) Available to Common Shareholders
(I) Net income /(loss) available to common shareholders (annualized) (GAAP)	$	1,072,318		$	327,257		$	367,531		$	(209,641	)		$	267,148

Period-end Shares Outstanding
(J) Period-end shares outstanding	323,943			325,003			327,194			326,736				234,231

Ratios
(I)/(G) Return on average common equity (“ROE”) (GAAP)	25.41		%	7.86		%	8.79		%	(6.73		)	%	10.79		%
(I)/(H) Return on average tangible common equity (“ROTCE”) (Non-GAAP)	40.51		%	12.63		%	14.06		%	(8.78		)	%	12.17		%
(A)/(D) Total equity to total assets (GAAP)	11.67		%	11.08		%	11.30		%	11.06			%	9.73		%
(C)/(E) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP)	7.12		%	6.54		%	6.71		%	6.57			%	7.54		%
(B)/(J) Book value per common share (GAAP)	$	13.43		$	12.80		$	12.78		$	12.82			$	10.64
(C)/(J) Tangible book value per common share (Non-GAAP)	$	8.58		$	7.94		$	7.97		$	8.01			$	9.45

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.

FHN GLOSSARY OF TERMS

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

Common Equity Tier 1 Ratio: Ratio consisting of common equity adjusted for certain unrealized gains/(losses) on available-for-sale securities, less disallowed portions of goodwill, other intangibles, and deferred tax assets as well as certain other regulatory deductions divided by risk-weighted assets.

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

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

Market-Indexed Deposits: Deposits with pricing tied to an index not administered by FHN. For FHN these are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.

Risk-Weighted Assets: A regulatory risk-based calculation that takes into account the broad differences in risks among a banking organization’s assets and off-balance sheet financial instruments.

Tier 1 Capital Ratio: Ratio consisting of shareholders’ equity adjusted for certain unrealized gains/(losses) on available-for-sale securities, plus qualifying portions of noncontrolling interests, less disallowed portions of goodwill, other intangible assets, and deferred tax assets as well as certain other regulatory deductions divided by risk-weighted assets.

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

Key Ratios

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

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

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

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

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

Leverage Ratio: Ratio is tier 1 capital to average assets for leverage.

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.

Attached files

Stock widget

Investing forum

FIRST HORIZON CORP Reports