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	fhn4q17earningsfinal.htm
8-K - 8-K - FIRST HORIZON CORP	a4q17financialsupplement8-.htm

FOURTH QUARTER 2017

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	7
Other Income and Other Expense	8
Balance Sheet
Period End Balance Sheet	9
Average Balance Sheet	10
Net Interest Income	11
Average Balance Sheet: Yields and Rates	12

Capital Highlights	13

Business Segment Detail
Segment Highlights	14
Regional Banking	15
Fixed Income and Corporate	16
Non-Strategic	17

Asset Quality
Asset Quality: Consolidated	18
Asset Quality: Regional Banking and Corporate	20
Asset Quality: Non-Strategic	21

Non-GAAP to GAAP Reconciliation	22

Glossary of Terms	23

Other Information

This financial supplement contains forward-looking statements involving significant risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking information. Those factors include general economic and financial market conditions, including expectations of and actual timing and amount of interest rate movements including the slope of the yield curve, competition, customer and investor responses to these conditions, ability to execute business plans, geopolitical developments, recent and future legislative and regulatory developments, natural disasters, and items mentioned in this financial supplement and in First Horizon National Corporation’s (“FHN”) most recent 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 22 of this financial supplement.



FIRST HORIZON NATIONAL CORPORATION SEGMENT STRUCTURE



FHN PERFORMANCE HIGHLIGHTS


Summary of Fourth Quarter 2017 Notable Items
Segment	Item	Income Statement	Amount Favorable/ (Unfavorable)	Comments
Corporate	Acquisition expenses	Noninterest expense: Various	$(46.7) million	Pre-tax acquisition-related expenses primarily associated with the Capital Bank Financial acquisition

Primarily Non-Strategic	Legal matters	Noninterest expense: Litigation and regulatory matters	$(32.1) million	Pre-tax loss accruals related to legal matters

Primarily Corporate & Regional Banking	Employee compensation	Noninterest expense: Employee compensation, incentives, and benefits	$(9.9) million	Pre-tax expense related to special employee bonuses

Corporate	Tax adjustments - Tax Reform	Provision for Income Taxes	$(82.0) million	Estimated after-tax effects of tax reform primarily associated with a decrease in the valuation of the net deferred tax asset balance (see note below)

Corporate	Tax adjustments - Capital Loss Carryforward/Other	Provision for Income Taxes	$10.7 million	Favorable effective tax rate adjustment primarily associated with the reversal of a capital loss deferred tax valuation allowance

Fourth Quarter 2017 vs. Third Quarter 2017

Consolidated


•	On November 30, 2017, FHN closed its previously announced merger with Capital Bank Financial ("Capital Bank" or "CBF") using the purchase business combinations method, increasing its balance sheet by $10.6 billion

•

In December 2017, Congress enacted the Tax Cuts and Jobs Act ("the Tax Act"), which resulted in an estimated $82.0 million impact primarily related to a decrease in the valuation of FHN's net deferred tax asset balance, significantly impacting FHN's results for both fourth quarter and 2017. The impact from the Tax Act may differ from this estimate, possibly materially, due to among other things, further refinement of FHN's calculations, changes in interpretations and assumptions FHN has made, guidance that may be issued and actions FHN make take as a result of the Tax Act


•	Net loss available to common shareholders was $52.8 million, or $.20 loss per diluted share in fourth quarter compared to net income available to common shareholders of $67.3 million, or $.28 per diluted share in third quarter


•	Net interest income (“NII”) increased to $242.1 million in fourth quarter from $209.8 million in third quarter; Net Interest Margin (“NIM”) increased to 3.27 percent in fourth quarter from 3.19 percent in prior quarter


•	The increase in NII in fourth quarter was primarily driven by loan and deposit growth associated with the CBF acquisition, the positive impact of higher market rates, and higher average balances of other commercial loans


•	The increase in NIM was also largely the result of loan and deposit growth associated with the CBF acquisition


•	Noninterest income (including securities gains) increased to $133.2 million in fourth quarter from $112.4 million in prior quarter


•	Fourth quarter includes a $1.3 million gain related to BOLI policy benefits


•	Third quarter includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction


•	Noninterest expense increased to $346.7 million in fourth quarter from $236.9 million in third quarter


•	The expense increase was driven by a $38.5 million increase in acquisition-related expenses associated with the CBF acquisition, a $23.9 million increase in loss accruals related to legal matters, $9.9 million of special bonuses, and a $5.6 million charitable contribution to the First Tennessee Foundation, somewhat offset by $4.3 million of deferred compensation BOLI gains


•	Provision for income taxes was $74.0 million and $13.6 million in the fourth and third quarters, respectively


•	Fourth quarter increase was primarily associated with the effects of the Tax Act


•	Period-end loans were $27.7 billion in fourth quarter and $20.2 billion in third quarter; average loans increased 13 percent to $22.5 billion in fourth quarter


•	Period-end deposits were $30.6 billion and $22.1 billion in fourth and third quarter, respectively; average deposits increased 13 percent linked quarter to $24.9 billion in fourth quarter

Regional Banking


•	Pre-tax income increased to $126.5 million in fourth quarter from $114.7 million in third quarter; pre-provision net revenue was $136.2 million and $123.2 million in fourth and third quarter, respectively


•	Period-end loans increased to $26.3 billion in fourth quarter from $18.8 billion in third quarter; average loans increased 15 percent to $21.1 billion in fourth quarter


•	The increase in period-end and average loans was primarily due to the addition of $7.4 billion in UPB of loans from the CBF acquisition.


•	Period-end deposits were $27.6 billion and $20.1 billion in fourth and third quarter, respectively; average deposits increased 12 percent to $22.4 billion


•	The increase in period-end and average deposits was primarily the result of $8.1 billion of deposits acquired in the CBF acquisition


•	NII increased to $244.3 million in fourth quarter from $209.3 million in third quarter


•	The increase in NII was largely due to loan and deposit growth associated with the CBF acquisition


•	Provision expense was $9.7 million in fourth quarter compared to $8.6 million in the prior quarter


•	Fourth quarter 2017 provision expense was primarily driven by a charge-off associated with a single larger credit resulting in fraud loss


•	Noninterest income increased to $70.5 million in fourth quarter from $64.4 million in third quarter


•	The increase in noninterest income was primarily due to higher fee income associated with deposit transactions and cash management and bankcard income largely driven by the CBF acquisition


•	Noninterest expense increased to $178.6 million in fourth quarter from $150.5 million in third quarter


•	Fourth quarter expense includes $19.1 million attributable to CBF activities, including $10.7 million of personnel-related expenses associated with a 27 percent increase in headcount, and $4.1 million in special bonuses


•	Third quarter expense includes $4.4 million of loss accruals related to legal matters associated with trust services



FHN PERFORMANCE HIGHLIGHTS (continued)


Fourth Quarter 2017 vs. Third Quarter 2017 (continued)

Fixed Income


•	Pre-tax income was $6.0 million in fourth quarter, down from $8.7 million in third quarter


•	NII was $5.9 million and $6.0 million in fourth quarter and third quarter, respectively


•	Noninterest income was $55.2 million in fourth quarter compared to $55.8 million in third quarter


•	Fixed income product revenue decreased to $40.6 million in fourth quarter from $45.0 million in third quarter


•	Fixed income product average daily revenue (“ADR”) was $655 thousand and $715 thousand in fourth and third quarter, respectively


•	Other product revenue increased $3.9 million to $14.6 million in fourth quarter largely due to increases in fees from loan sales


•	Noninterest expense increased to $55.1 million in fourth quarter from $53.1 million in third quarter

Corporate


•	Pre-tax loss was $83.1 million in fourth quarter compared to pre-tax loss of $47.4 million in third quarter


•	NII was negative $15.9 million and negative $14.0 million in fourth and third quarter, respectively


•	Estimated effective duration of the securities portfolio was 3.7 years in fourth quarter and was 3.8 years in third quarter


•	Noninterest income (including net securities gains) was positive $6.7 million in fourth quarter compared to negative $9.5 million in third quarter


•	Fourth quarter includes a $1.3 million gain related to BOLI policy benefits


•	Third quarter includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction


•	Noninterest expense was $74.0 million in fourth quarter compared to $23.9 million in third quarter


•	Fourth quarter expense includes $46.7 million of acquisition-related expenses primarily associated with the CBF acquisition, $5.7 million of special employee bonuses, and a $5.6 million charitable contribution to the First Tennessee Foundation, somewhat offset by $4.3 million of deferred compensation BOLI gains


•	FDIC expense increased $3.0 million in fourth quarter due to the loss recognized during fourth quarter


•	Third quarter expense includes $8.2 million of acquisition-related expenses primarily associated with the CBF and Coastal acquisitions

Non-Strategic


•	Pre-tax loss was $23.7 million in fourth quarter compared to pre-tax income of $9.4 million in third quarter


•	NII decreased to $7.8 million in fourth quarter from $8.5 million in third quarter


•	The provision credit decreased to $6.7 million in fourth quarter from a provision credit of $8.6 million in third quarter


•	The level of provision continues to reflect declining balances combined with stable performance within the legacy portfolio combined with higher recoveries in third and fourth quarter


•	Noninterest expense was $38.9 million in the fourth quarter compared to $9.4 million in third quarter


•	Fourth quarter expense includes $32.0 million of pre-tax loss accruals related to legal matters, compared to $3.6 million in third quarter

Asset Quality


•	Allowance for loan losses decreased to $189.6 million in fourth quarter from $194.9 million in third quarter; the allowance to loans ratio decreased 28 bps to 69 basis points in fourth quarter driven by the addition of loans acquired from Capital Bank at fair value which includes an estimate of lifetime credit losses


•	The decrease in reserves was primarily driven by the consumer portfolio within the non-strategic segment


•	To a lesser extent, the commercial portfolio within the regional banking segment declined due to lower average loss rates


•	Net charge-offs were $8.3 million in fourth quarter compared to $2.4 million in third quarter


•	Regional banking net charge-offs increased $5.9 million to $11.6 million in fourth quarter primarily due to a single larger credit within the C&I portfolio as a result of borrower fraud


•	Non-strategic net recoveries remained flat in fourth quarter at $3.3 million


•	Nonperforming loans (“NPLs”), excluding loans held-for-sale, increased to $130.6 million in fourth quarter from $125.0 million in third quarter; NPLs within all portfolios decreased or remained flat with the exception of C&I which increased $12.2 million primarily driven by a single larger credit


•	30+ delinquencies increased $16.3 million to $92.5 million in fourth quarter compared to $76.2 million in third quarter


•	The consumer portfolio increased $15.0 million of which Capital Bank contributed to $12.7 million of the increase

Taxes


•	The effective tax rates for fourth and third quarter were 288.93 percent and 15.93 percent, respectively

•

Fourth quarter effective rate was negatively impacted by the estimated effects of tax reform primarily associated with a decrease in the valuation of the net deferred tax asset balance. The impact from the tax reform may differ from this estimate, possibly materially, due to, among other things, further refinement of FHN's calculations, changes in interpretations and assumptions FHN has made, guidance that may be issued and actions FHN may take as a result of tax reform


•	Fourth quarter and third quarter effective rates were favorably impacted by the reversal of a capital loss deferred tax valuation allowance


•	The rates also reflect the favorable effect from permanent benefits. Permanent benefits primarily consist of tax credit investments, life insurance, contributions of appreciated property, and tax-exempt interest



FHN PERFORMANCE HIGHLIGHTS (continued)


Fourth Quarter 2017 vs. Third Quarter 2017 (continued)

Capital and Liquidity


•	Declared $.09 per common share quarterly dividend in fourth quarter, aggregating $21.0 million, which was paid on January 2, 2018


•	Declared aggregate preferred quarterly dividend of $1.6 million in fourth quarter which was paid on January 10, 2018


•	There were no repurchases of shares in fourth quarter under the current share repurchase program (unrelated to employee stock award programs); $189.7 million remains in the stock purchase authorization first announced in 2014, currently scheduled to expire January 31, 2018


•	Capital ratios (regulatory capital ratios calculated under the Basel III risk-based capital rules as phased-in; current quarter is an estimate; estimate does not include the favorable impact of reclassification from AOCI to retained earnings of approximately $58 million in connection with tax law change per bank regulatory guidance issued on January 18, 2018)


•	Total equity to total assets (GAAP) of 11.06 percent in fourth quarter compared to 9.73 percent in prior quarter


•	Tangible common equity to tangible assets (Non-GAAP) of 6.57 percent in fourth quarter compared to 7.54 percent in prior quarter


•	Common Equity Tier 1 of 8.68 percent in fourth quarter compared to 10.04 percent in prior quarter


•	Tier 1 of 9.64 percent in fourth quarter compared to 11.20 percent in prior quarter


•	Total Capital of 10.88 percent in fourth quarter compared to 12.18 percent in prior quarter


•	Leverage of 10.16 percent in fourth quarter compared to 9.60 percent in prior quarter




Consolidated Results for Fiscal Year 2017 vs. 2016


•	Net income available to common shareholders was $159.3 million, or $.65 per diluted share in 2017, compared to $220.8 million, or $.94 per diluted share in 2016


•	Net interest income ("NII") increased 16 percent in 2017 to $842.3 million from $729.1 million in 2016; Net interest margin ("NIM") increased to 3.12 percent from 2.94 percent


•	The increase in NII was primarily driven by organic loan growth within the regional banking commercial loan portfolio, the impact of higher market rates, and commercial and consumer loans added through the CBF acquisition, somewhat offset by lower average balances of consumer loans and loans to mortgage companies


•	The improvement in NIM in 2017 relative to 2016 was largely the result of the positive impact of higher market rates and an increase in average deposits, somewhat offset by an increase in average excess cash held at the Fed during 2017


•	Noninterest income (including securities gains) decreased to $490.2 million in 2017 from $552.4 million in 2016 primarily driven by a 19 percent decrease in fixed income sales revenue in 2017 and a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction recognized in 2017


•	Provision expense was $0 in 2017 compared to $11.0 million in 2016 reflecting continued strong performance in both the commercial and consumer portfolios


•	Reserves decreased $12.5 million from 2016 while net charge-offs decreased $6.7 million from 2016, both driven by the consumer portfolio


•	Noninterest expense increased to $1.0 billion in 2017 from $.9 billion in 2016 largely due to a $59.8 million increase in acquisition-related costs primarily associated with the CBF and Coastal Securities, Inc. ("Coastal") acquisitions in 2017 relative to 2016


•	To a lesser extent, a smaller repurchase and foreclosure provision expense reversal related to the settlement of certain repurchase claims in 2017 relative to 2016 ($22.5 million and $32.7 million, respectively) and a $10.0 million increase in pre-tax loss accruals related to legal matters recognized in 2017 relative to 2016 also contributed to the increase in expense


•	Period-end loans increased 41 percent to $27.7 billion; average loans were $20.1 billion in 2017 compared to $18.3 billion in 2016


•	The increase in period-end loans was largely due to the addition of $7.4 billion in UPB of loans from the CBF acquisition, and was within the C&I, Commercial real estate and Consumer real estate portfolios


•	Loans added through the CBF acquisition also impacted average loan balances in fourth quarter; however, the impact was less on an average basis due to the late-year timing of the acquisition


•	Period-end deposits increased 35 percent to $30.6 billion; average deposits were $23.1 billion in 2017 compared to $20.9 billion in 2016


•	Increase in period-end deposits was due primarily to the addition of $8.1 billion of deposits associated with the CBF acquisition


•	Commercial interest and consumer interest deposits increased 5 percent and 2 percent, respectively, as a percentage of total deposits in 2017 relative to 2016 on a period-end basis, while market-indexed deposits decreased 7 percent during the period


•	The fourth quarter 2017 CBF acquisition also contributed to the increase in average deposits in 2017; however due to the late-year timing of the acquisition, the impact was much less on an average basis

FHN CONSOLIDATED INCOME STATEMENT

Quarterly/Annually, Unaudited



																4Q17 Changes vs.							Twelve Months Ended						2017 vs.
(Dollars in thousands, except per share data)	4Q17			3Q17			2Q17			1Q17			4Q16				3Q17			4Q16			2017			2016			2016

Interest income	$	287,633		$	248,145		$	235,341		$	218,811		$	219,897			16		%	31		%	$	989,930		$	817,909		21		%
Less: interest expense	45,545			38,328			34,640			29,103			24,346				19		%	87		%	147,616			88,825			66		%
Net interest income	242,088			209,817			200,701			189,708			195,551				15		%	24		%	842,314			729,084			16		%
Provision/(provision credit) for loan losses	3,000			—			(2,000		)	(1,000		)	—				NM			NM			—			11,000			NM
Net interest income after provision for loan losses	239,088			209,817			202,701			190,708			195,551				14		%	22		%	842,314			718,084			17		%
Noninterest income:
Fixed income	55,079			55,758			55,110			50,678			51,923				(1	)	%	6		%	216,625			268,561			(19	)	%
Deposit transactions and cash management	30,158			28,011			27,858			24,565			27,504				8		%	10		%	110,592			108,553			2		%
Brokerage, management fees and commissions	12,642			11,937			12,029			11,906			11,003				6		%	15		%	48,514			42,911			13		%
Trust services and investment management	7,116			6,953			7,698			6,653			7,053				2		%	1		%	28,420			27,727			2		%
Bankcard income	8,237			6,170			5,605			5,455			6,353				34		%	30		%	25,467			24,430			4		%
Bank-owned life insurance	3,987			3,539			4,351			3,247			3,558				13		%	12		%	15,124			14,687			3		%
Securities gains/(losses), net	137			6			405			44			(132		)		NM			NM			592			1,341			(56	)	%
Other (a)	15,834			43			14,617			14,391			16,815				NM			(6	)	%	44,885			64,231			(30	)	%
Total noninterest income	133,190			112,417			127,673			116,939			124,077				18		%	7		%	490,219			552,441			(11	)	%
Adjusted gross income after provision for loan losses	372,278			322,234			330,374			307,647			319,628				16		%	16		%	1,332,533			1,270,525			5		%
Noninterest expense:
Employee compensation, incentives, and benefits (b)	177,593			137,798			139,088			134,932			137,324				29		%	29		%	589,411			562,948			5		%
Repurchase and foreclosure provision (c)	53			(609		)	(21,733		)	(238		)	(1,104		)		NM			NM			(22,527		)	(32,722		)	31		%
Legal fees	1,245			2,052			3,496			5,283			6,038				(39	)	%	(79	)	%	12,076			21,558			(44	)	%
Professional fees (d)	26,958			6,566			9,659			4,746			4,827				NM			NM			47,929			19,169			NM
Occupancy	15,887			13,619			12,800			12,340			12,818				17		%	24		%	54,646			50,880			7		%
Computer software	13,157			11,993			12,285			10,799			11,909				10		%	10		%	48,234			45,122			7		%
Contract employment and outsourcing (e)	5,979			2,762			3,255			2,958			2,696				NM			NM			14,954			10,061			49		%
Operations services	10,619			10,805			11,524			10,875			10,913				(2	)	%	(3	)	%	43,823			41,852			5		%
Equipment rentals, depreciation, and maintenance	9,530			6,626			7,036			6,351			7,959				44		%	20		%	29,543			27,385			8		%
FDIC premium expense	9,090			6,062			5,927			5,739			6,095				50		%	49		%	26,818			21,585			24		%
Advertising and public relations (f)	5,313			5,205			4,095			4,601			6,093				2		%	(13	)	%	19,214			21,612			(11	)	%
Communications and courier	5,379			4,328			4,117			3,800			3,593				24		%	50		%	17,624			14,265			24		%
Amortization of intangible assets	3,568			1,964			1,964			1,232			1,300				82		%	NM			8,728			5,198			68		%
Other (a)	62,299			27,698			24,404			18,787			27,436				NM			NM			133,188			116,291			15		%
Total noninterest expense	346,670			236,869			217,917			222,205			237,897				46		%	46		%	1,023,661			925,204			11		%
Income before income taxes	25,608			85,365			112,457			85,442			81,731				(70	)	%	(69	)	%	308,872			345,321			(11	)	%
Provision for income taxes (g)	73,989			13,596			17,253			27,054			24,008				NM			NM			131,892			106,810			23		%
Net income/(loss)	(48,381		)	71,769			95,204			58,388			57,723				NM			NM			176,980			238,511			(26	)	%
Net income attributable to noncontrolling interest	2,910			2,883			2,852			2,820			2,879				1		%	1		%	11,465			11,465			*
Net income/(loss) attributable to controlling interest	(51,291		)	68,886			92,352			55,568			54,844				NM			NM			165,515			227,046			(27	)	%
Preferred stock dividends	1,550			1,550			1,550			1,550			1,550				*			*			6,200			6,200			*
Net income/(loss) available to common shareholders	$	(52,841	)	$	67,336		$	90,802		$	54,018		$	53,294			NM			NM			$	159,315		$	220,846		(28	)	%
Common Stock Data
EPS	$	(0.20	)	$	0.29		$	0.39		$	0.23		$	0.23			NM			NM			$	0.66		$	0.95		(31	)	%
Basic shares (thousands)	265,169			233,749			233,482			233,076			232,731				13		%	14		%	241,436			232,700			4		%
Diluted EPS	$	(0.20	)	$	0.28		$	0.38		$	0.23		$	0.23			NM			NM			$	0.65		$	0.94		(31	)	%
Diluted shares (thousands)	265,169			236,340			236,263			236,855			235,590				12		%	13		%	244,453			235,292			4		%
Key Ratios & Other
Return on average assets (quarters are annualized) (h)	(0.58		)%	0.99		%	1.32		%	0.82		%	0.80		%								0.59		%	0.87		%
Return on average common equity (“ROE”) (quarters are annualized) (h)	(6.73		)%	10.79		%	15.26		%	9.40		%	9.00		%								6.18		%	9.60		%
Return on average tangible common equity (“ROTCE”)(quarters are annualized) (h) (i)	(8.78		)%	12.17		%	17.30		%	10.33		%	9.89		%								7.23		%	10.59		%
Fee income to total revenue (h)	35.47		%	34.89		%	38.80		%	38.13		%	38.84		%								36.76		%	43.05		%
Efficiency ratio (h)	92.41		%	73.51		%	66.44		%	72.47		%	74.40		%								76.85		%	72.27		%
Average full time equivalent employees	4,792			4,277			4,328			4,258			4,248										4,415			4,241

NM - Not meaningful

* Amount is less than one percent.

(a) Refer to the Other Income and Other Expense table on page 8 for additional information.

(b) 4Q17 includes $16.8 million of acquisition-related expenses associated with the CBF acquisition and $9.9 million of special employee bonuses,

somewhat offset by $4.3 million of deferred compensation BOLI gains.

(d) 4Q17 includes $20.3 million of acquisition-related expenses associated with the CBF acquisition; 3Q17 and 2Q17 increases largely driven by acquisition-related expenses primarily associated with the CBF and Coastal acquisitions.

(e) 4Q17 includes $.9 million of acquisition-related expenses associated with the CBF acquisition.

(f) 4Q16 includes $1.1 million related to CRA initiatives.

(g) 4Q17 increase primarily associated with the effects of the Tax Act; 4Q17, 3Q17 and 2Q17 include the impact of a favorable effective tax rate adjustment associated with the reversal of a capital loss deferred tax valuation allowance.

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

(i) This non-GAAP measure is reconciled to ROE (GAAP) in the Non-GAAP to GAAP reconciliation on page 22 of this financial supplement.

FHN OTHER INCOME AND OTHER EXPENSE

Quarterly/Annually, Unaudited



													4Q17 Changes vs.						Twelve Months Ended					2017 vs.
(Thousands)	4Q17		3Q17			2Q17		1Q17			4Q16		3Q17			4Q16			2017			2016		2016

Other Income
ATM and interchange fees	$	3,427	$	3,137		$	3,083	$	2,778		$	3,047	9		%	12		%	$	12,425		$	11,965	4		%
Electronic banking fees	1,171		1,282			1,306		1,323			1,301		(9	)	%	(10	)	%	5,082			5,477		(7	)	%
Letter of credit fees	1,292		1,211			1,122		1,036			946		7		%	37		%	4,661			4,103		14		%
Mortgage banking (a)	766		1,354			1,268		1,261			2,820		(43	)	%	(73	)	%	4,649			10,215		(54	)	%
Deferred compensation (b)	1,876		1,128			1,491		1,827			863		66		%	NM			6,322			3,025		NM
Insurance commissions	472		567			592		883			680		(17	)	%	(31	)	%	2,514			2,981		(16	)	%
Other service charges	3,485		2,954			3,109		2,984			3,018		18		%	15		%	12,532			11,731		7		%
Gain/(loss) on extinguishment of debt (c)	—		(14,329		)	—		—			—		NM			NM			(14,329		)	—		NM
Other	3,345		2,739			2,646		2,299			4,140		22		%	(19	)	%	11,029			14,734		(25	)	%
Total	$	15,834	$	43		$	14,617	$	14,391		$	16,815	NM			(6	)	%	$	44,885		$	64,231	(30	)	%

Other Expense
Litigation and regulatory matters	$	32,114	$	8,162		$	533	$	(292	)	$	4,684	NM			NM			$	40,517		$	30,469	33		%
Tax credit investments	822		762			942		942			1,024		8		%	(20	)	%	3,468			3,349		4		%
Travel and entertainment	3,154		2,798			3,162		2,348			3,240		13		%	(3	)	%	11,462			10,275		12		%
Employee training and dues	1,357		1,198			1,453		1,543			1,603		13		%	(15	)	%	5,551			5,691		(2	)	%
Customer relations	1,510		1,361			1,543		1,336			1,451		11		%	4		%	5,750			6,255		(8	)	%
Miscellaneous loan costs	673		757			699		622			628		(11	)	%	7		%	2,751			2,586		6		%
Supplies	1,222		928			1,093		863			1,320		32		%	(7	)	%	4,106			4,434		(7	)	%
OREO	53		303			446		204			648		(83	)	%	(92	)	%	1,006			773		30		%
Other insurance and taxes	2,457		2,396			2,443		2,390			1,939		3		%	27		%	9,686			10,891		(11	)	%
Other (d)	18,937		9,033			12,090		8,831			10,899		NM			74		%	48,891			41,568		18		%
Total	$	62,299	$	27,698		$	24,404	$	18,787		$	27,436	NM			NM			$	133,188		$	116,291	15		%

NM - Not meaningful

(a) 4Q16 includes a $1.5 million gain related to the reversal of a contingency accrual associated with prior sales of MSR.

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

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

(d) 4Q17 includes a $5.6 million charitable contribution to the First Tennessee Foundation and $6.2 million of acquisition-related expenses associated with the CBF acquisition; 2Q17 includes a $3.2 million charitable contribution to the First Tennessee Foundation.

FHN CONSOLIDATED PERIOD-END BALANCE SHEET

Quarterly, Unaudited



																4Q17 Changes vs.
(Thousands)	4Q17			3Q17			2Q17			1Q17			4Q16			3Q17			4Q16

Assets:
Investment securities	$	5,180,255		$	3,973,138		$	3,959,592		$	3,953,632		$	3,957,846		30		%	31		%
Loans held-for-sale (a)	699,377			339,780			432,771			105,456			111,248			NM			NM
Loans, net of unearned income	27,658,929			20,166,091			19,989,319			19,090,074			19,589,520			37		%	41		%
Federal funds sold	87,364			76,316			34,036			31,495			50,838			14		%	72		%
Securities purchased under agreements to resell	725,609			663,637			657,991			835,222			613,682			9		%	18		%
Interest-bearing cash (b)	1,185,600			604,326			573,666			2,106,597			1,060,034			96		%	12		%
Trading securities	1,416,345			1,469,402			1,315,891			1,167,310			897,071			(4	)	%	58		%
Total earning assets	36,953,479			27,292,690			26,963,266			27,289,786			26,280,239			35		%	41		%
Cash and due from banks	639,073			347,802			387,053			369,290			373,274			84		%	71		%
Fixed income receivables (c)	68,693			68,750			127,724			168,315			57,411			*			20		%
Goodwill (d)	1,386,853			236,335			236,335			191,371			191,371			NM			NM
Other intangible assets, net (d)	184,389			43,157			45,121			19,785			21,017			NM			NM
Premises and equipment, net	532,251			293,393			292,463			290,497			289,385			81		%	84		%
Other real estate owned ("OREO")	43,382			12,522			11,901			15,144			16,237			NM			NM
Allowance for loan losses	(189,555		)	(194,867		)	(197,257		)	(201,968		)	(202,068		)	(3	)	%	(6	)	%
Derivative assets	81,634			80,976			91,653			98,120			121,654			1		%	(33	)	%
Other assets	1,723,189			1,441,878			1,411,697			1,378,260			1,406,711			20		%	22		%
Total assets	$	41,423,388		$	29,622,636		$	29,369,956		$	29,618,600		$	28,555,231		40		%	45		%

Liabilities and Equity:
Deposits:
Consumer interest	$	12,730,766		$	9,164,017		$	9,429,788		$	9,367,537		$	8,943,616		39		%	42		%
Commercial interest	5,608,587			2,915,446			3,285,931			3,275,599			2,943,545			92		%	91		%
Market-indexed (e)	4,249,536			3,534,546			3,315,045			4,481,085			4,844,608			20		%	(12	)	%
Total interest-bearing deposits	22,588,889			15,614,009			16,030,764			17,124,221			16,731,769			45		%	35		%
Noninterest-bearing deposits	8,040,307			6,485,245			6,302,585			6,355,620			5,940,594			24		%	35		%
Total deposits	30,629,196			22,099,254			22,333,349			23,479,841			22,672,363			39		%	35		%
Federal funds purchased	399,820			292,650			314,892			504,805			414,207			37		%	(3	)	%
Securities sold under agreements to repurchase	647,768			516,867			743,684			406,354			453,053			25		%	43		%
Trading liabilities	638,515			579,028			555,793			848,190			561,848			10		%	14		%
Other short-term borrowings (f)	2,626,213			1,637,419			1,044,658			79,454			83,177			60		%	NM
Term borrowings (g)	1,218,097			1,059,507			1,033,329			1,035,036			1,040,656			15		%	17		%
Fixed income payables (c)	48,996			44,304			28,571			21,116			21,002			11		%	NM
Derivative liabilities	85,061			83,146			92,717			101,347			135,897			2		%	(37	)	%
Other liabilities	549,234			426,910			396,075			401,997			467,944			29		%	17		%
Total liabilities	36,842,900			26,739,085			26,543,068			26,878,140			25,850,147			38		%	43		%
Equity:
Common stock	204,211			146,395			146,336			146,177			146,015			39		%	40		%
Capital surplus	3,147,613			1,401,359			1,395,797			1,391,777			1,386,636			NM			NM
Undivided profits	1,102,888			1,177,126			1,131,162			1,061,409			1,029,032			(6	)	%	7		%
Accumulated other comprehensive loss, net	(265,279		)	(232,384		)	(237,462		)	(249,958		)	(247,654		)	14		%	7		%
Preferred stock	95,624			95,624			95,624			95,624			95,624			*			*
Noncontrolling interest (h)	295,431			295,431			295,431			295,431			295,431			*			*
Total equity	4,580,488			2,883,551			2,826,888			2,740,460			2,705,084			59		%	69		%
Total liabilities and equity	$	41,423,388		$	29,622,636		$	29,369,956		$	29,618,600		$	28,555,231		40		%	45		%

NM - Not meaningful

*Amount is less than one percent.

(a) 4Q17 increase driven by loans acquired from CBF that have been classified as held-for-sale; 2Q17 increase driven by the Coastal acquisition.

(b) Includes excess balances held at Fed; 4Q17 increase driven by the CBF acquisition; 2Q17 decrease due to loan growth and the Coastal acquisition; 1Q17 increase largely driven by an inflow of customer deposits.

(d) 4Q17 increase driven by the CBF acquisition; 2Q17 increase driven by the Coastal acquisition.

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

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

(h) Consists of preferred stock of subsidiaries.

FHN CONSOLIDATED AVERAGE BALANCE SHEET

Quarterly/Annually, Unaudited



																4Q17 Changes vs.							Twelve Months Ended						2017 vs.
(Thousands)	4Q17			3Q17			2Q17			1Q17			4Q16				3Q17			4Q16			2017			2016				2016

Assets:
Earning assets:
Loans, net of unearned income:
Commercial, financial, and industrial (C&I)	$	13,756,024		$	12,474,188		$	11,830,942		$	11,381,258		$	11,987,562			10		%	15		%	$	12,367,420		$	10,932,679			13		%
Commercial real estate	2,892,949			2,211,831			2,175,733			2,176,355			2,089,314				31		%	38		%	2,365,763			1,938,939				22		%
Consumer real estate	5,029,588			4,398,550			4,431,591			4,491,786			4,545,646				14		%	11		%	4,588,833			4,635,213				(1	)	%
Permanent mortgage	400,991			405,287			408,202			415,916			429,914				(1	)	%	(7	)	%	407,552			437,524				(7	)	%
Credit card and other	439,057			354,807			355,123			348,123			361,311				24		%	22		%	374,474			359,515				4		%
Total loans, net of unearned income (a)	22,518,609			19,844,663			19,201,591			18,813,438			19,413,747				13		%	16		%	20,104,042			18,303,870				10		%
Loans held-for-sale (b)	504,577			540,121			320,698			110,726			127,484				(7	)	%	NM			370,578			124,262				NM
Investment securities:
U.S. treasuries	99			109			100			100			100				(9	)	%	(1	)	%	102			100				2		%
U.S. government agencies	4,042,844			3,762,180			3,755,818			3,735,472			3,810,207				7		%	6		%	3,824,751			3,814,802				*
States and municipalities	182			—			—			4,350			4,344				NM			(96	)	%	1,118			5,124				(78	)	%
Corporate bonds	29,904			10,000			10,000			10,000			10,000				NM			NM			15,017			10,000				50
Other	203,395			188,361			188,229			186,670			186,452				8		%	9		%	191,701			186,385				3		%
Total investment securities	4,276,424			3,960,650			3,954,147			3,936,592			4,011,103				8		%	7		%	4,032,689			4,016,411				*
Trading securities	1,439,152			1,125,033			1,283,212			929,545			1,283,407				28		%	12		%	1,195,442			1,212,864				(1	)	%
Other earning assets:
Federal funds sold	24,980			29,852			36,936			17,015			19,323				(16	)	%	29		%	27,225			23,414				16		%
Securities purchased under agreements to resell	818,887			664,208			833,253			691,469			792,156				23		%	3		%	752,063			827,590				(9	)	%
Interest-bearing cash (c)	459,868			392,274			970,853			2,117,498			711,485				17		%	(35	)	%	978,958			671,681				46		%
Total other earning assets	1,303,735			1,086,334			1,841,042			2,825,982			1,522,964				20		%	(14	)	%	1,758,246			1,522,685				15		%
Total earning assets	30,042,497			26,556,801			26,600,690			26,616,283			26,358,705				13		%	14		%	27,460,997			25,180,092				9		%
Allowance for loan losses	(194,859		)	(196,631		)	(200,534		)	(202,618		)	(201,306		)		(1	)	%	(3	)	%	(198,634		)	(203,105		)		(2	)	%
Cash and due from banks	437,604			355,626			350,832			367,136			334,168				23		%	31		%	377,932			320,506				18		%
Fixed income receivables	79,162			54,286			64,779			41,688			83,019				46		%	(5	)	%	60,066			76,464				(21	)	%
Premises and equipment, net	367,196			293,286			291,769			289,202			282,849				25		%	30		%	310,530			277,979				12		%
Derivative assets	68,692			74,453			74,974			84,419			138,451				(8	)	%	(50	)	%	75,588			143,653				(47	)	%
Other assets	2,305,962			1,737,006			1,693,840			1,609,996			1,640,781				33		%	41		%	1,838,334			1,631,638				13		%
Total assets	$	33,106,254		$	28,874,827		$	28,876,350		$	28,806,106		$	28,636,667			15		%	16		%	$	29,924,813		$	27,427,227			9		%

Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Consumer interest	$	10,279,937		$	9,244,021		$	9,330,990		$	9,003,550		$	8,641,507			11		%	19		%	$	9,467,518		$	8,537,255			11		%
Commercial interest	3,684,643			2,876,398			3,086,139			3,097,922			2,819,980				28		%	31		%	3,187,034			2,812,222				13		%
Market-indexed (d)	3,958,224			3,523,450			3,809,281			4,666,292			4,787,912				12		%	(17	)	%	3,986,095			3,788,420				5		%
Total interest-bearing deposits	17,922,804			15,643,869			16,226,410			16,767,764			16,249,399				15		%	10		%	16,640,647			15,137,897				10		%
Federal funds purchased	425,900			376,150			435,854			552,820			528,266				13		%	(19	)	%	447,137			589,223				(24	)	%
Securities sold under agreements to repurchase	595,275			680,366			616,837			419,131			378,837				(13	)	%	57		%	578,666			425,452				36		%
Trading liabilities	741,063			597,269			762,667			642,456			745,011				24		%	(1	)	%	685,891			771,039				(11	)	%
Other short-term borrowings (e)	1,246,087			655,599			221,472			80,939			243,527				90		%	NM			554,502			198,440				NM
Term borrowings	1,121,268			1,112,735			1,034,020			1,039,719			1,064,206				1		%	5		%	1,077,257			1,130,169				(5	)	%
Total interest-bearing liabilities	22,052,397			19,065,988			19,297,260			19,502,829			19,209,246				16		%	15		%	19,984,100			18,252,220				9		%
Noninterest-bearing deposits	6,972,912			6,411,160			6,280,472			6,051,510			6,039,025				9		%	15		%	6,431,489			5,760,873				12		%
Fixed income payables	53,401			28,455			36,083			22,843			63,745				88		%	(16	)	%	35,261			48,089				(27	)	%
Derivative liabilities	65,843			80,916			85,119			84,928			123,460				(19	)	%	(47	)	%	79,154			130,315				(39	)	%
Other liabilities	455,536			421,551			399,247			421,328			454,363				8		%	*			424,501			544,252				(22	)	%
Total liabilities	29,600,089			26,008,070			26,098,181			26,083,438			25,889,839				14		%	14		%	26,954,505			24,735,749				9		%
Equity:
Common stock	165,991			146,354			146,246			146,098			145,902				13		%	14		%	151,214			145,943				4		%
Capital surplus	1,993,908			1,397,883			1,392,718			1,389,062			1,380,843				43		%	44		%	1,544,651			1,380,972				12		%
Undivided profits	1,194,840			1,159,451			1,085,326			1,044,388			1,015,742				3		%	18		%	1,121,519			949,642				18		%
Accumulated other comprehensive loss, net	(239,629		)	(227,986		)	(237,176		)	(247,935		)	(186,714		)		5		%	28		%	(238,131		)	(176,134		)		35		%
Preferred stock	95,624			95,624			95,624			95,624			95,624				*			*			95,624			95,624				*
Noncontrolling interest (f)	295,431			295,431			295,431			295,431			295,431				*			*			295,431			295,431				*
Total equity	3,506,165			2,866,757			2,778,169			2,722,668			2,746,828				22		%	28		%	2,970,308			2,691,478				10		%
Total liabilities and equity	$	33,106,254		$	28,874,827		$	28,876,350		$	28,806,106		$	28,636,667			15		%	16		%	$	29,924,813		$	27,427,227			9		%

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

NM - Not meaningful

*Amount is less than one percent.

(a) Includes loans on nonaccrual status.

(b) 2Q17 increase driven by the Coastal acquisition.

(c) Includes excess balances held at Fed; 1Q17 increase largely driven by an inflow of customer deposits; 3Q17 and 2Q17 decreases due to loan growth and the Coastal acquisition.

(d) 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.

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

(f) Consists of preferred stock of subsidiaries.

FHN CONSOLIDATED NET INTEREST INCOME (a)

Quarterly, Unaudited



																4Q17 Changes vs.
(Thousands)	4Q17			3Q17			2Q17			1Q17			4Q16			3Q17			4Q16

Interest Income:
Loans, net of unearned income (b)	$	242,950		$	207,845		$	195,162		$	183,031		$	187,158		17		%	30		%
Loans held-for-sale	6,601			6,123			3,510			1,283			1,602			8		%	NM
Investment securities:
U.S. government agencies	25,911			23,844			24,122			24,221			23,110			9		%	12		%
States and municipalities	3			—			—			101			102			NM			(97	)	%
Corporate bonds	355			131			132			131			131			NM			NM
Other	2,015			1,731			1,535			1,414			1,479			16		%	36		%
Total investment securities	28,284			25,706			25,789			25,867			24,822			10		%	14		%
Trading securities	11,285			8,604			9,846			6,602			8,616			31		%	31		%
Other earning assets:
Federal funds sold	113			131			146			54			52			(14	)	%	NM
Securities purchased under agreements to resell (c)	1,652			1,476			1,442			590			(186		)	12		%	NM
Interest-bearing cash	1,484			1,226			2,456			4,235			1,027			21		%	44		%
Total other earning assets	3,249			2,833			4,044			4,879			893			15		%	NM
Interest income	$	292,369		$	251,111		$	238,351		$	221,662		$	223,091		16		%	31		%

Interest Expense:
Interest-bearing deposits:
Consumer interest	$	4,977		$	5,032		$	5,448		$	3,852		$	2,926		(1	)	%	70		%
Commercial interest	7,220			4,970			4,797			3,927			3,102			45		%	NM
Market-indexed (d)	12,272			10,266			8,941			8,407			5,968			20		%	NM
Total interest-bearing deposits	24,469			20,268			19,186			16,186			11,996			21		%	NM
Federal funds purchased	1,387			1,173			1,106			1,056			731			18		%	90		%
Securities sold under agreements to repurchase	1,175			1,815			1,081			89			47			(35	)	%	NM
Trading liabilities	4,186			3,298			4,203			3,781			3,848			27		%	9		%
Other short-term borrowings	4,145			2,012			716			247			373			NM			NM
Term borrowings	10,183			9,762			8,348			7,744			7,351			4		%	39		%
Interest expense	45,545			38,328			34,640			29,103			24,346			19		%	87		%
Net interest income - tax equivalent basis	246,824			212,783			203,711			192,559			198,745			16		%	24		%
Fully taxable equivalent adjustment	(4,736		)	(2,966		)	(3,010		)	(2,851		)	(3,194		)	(60	)	%	(48	)	%
Net interest income	$	242,088		$	209,817		$	200,701		$	189,708		$	195,551		15		%	24		%

NM - Not meaningful

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

(b) Includes interest on loans in nonaccrual status.

(d) 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



	4Q17		3Q17		2Q17		1Q17		4Q16

Assets:
Earning assets (a):
Loans, net of unearned income (b):
Commercial loans	4.27	%	4.13	%	4.03	%	3.86	%	3.75		%
Consumer loans	4.33		4.23		4.21		4.13		4.06
Total loans, net of unearned income (c)	4.28		4.16		4.08		3.94		3.84
Loans held-for-sale	5.23		4.53		4.38		4.64		5.03
Investment securities:
U.S. government agencies	2.56		2.54		2.57		2.59		2.43
States and municipalities	7.04		—		—		9.33		9.39
Corporate bonds	4.74		5.25		5.25		5.25		5.25
Other	3.96		3.67		3.26		3.03		3.17
Total investment securities	2.65		2.60		2.61		2.63		2.48
Trading securities	3.14		3.06		3.07		2.84		2.69
Other earning assets:
Federal funds sold	1.79		1.75		1.58		1.28		1.07
Securities purchased under agreements to resell (d)	0.80		0.88		0.69		0.35		(0.09	)
Interest-bearing cash	1.28		1.24		1.02		0.81		0.57
Total other earning assets	0.99		1.03		0.88		0.70		0.23
Interest income/total earning assets	3.87	%	3.76	%	3.59	%	3.37	%	3.37		%
Liabilities:
Interest-bearing liabilities:
Interest-bearing deposits:
Consumer interest	0.19	%	0.22	%	0.23	%	0.17	%	0.13		%
Commercial interest	0.78		0.69		0.62		0.51		0.44
Market-indexed (e)	1.23		1.16		0.94		0.73		0.50
Total interest-bearing deposits	0.54		0.51		0.47		0.39		0.29
Federal funds purchased	1.29		1.24		1.02		0.77		0.55
Securities sold under agreements to repurchase	0.78		1.06		0.70		0.09		0.05
Trading liabilities	2.24		2.19		2.21		2.39		2.06
Other short-term borrowings	1.32		1.22		1.30		1.24		0.61
Term borrowings (f)	3.63		3.51		3.23		2.98		2.76
Interest expense/total interest-bearing liabilities	0.82		0.80		0.72		0.60		0.51
Net interest spread	3.05	%	2.96	%	2.87	%	2.77	%	2.86		%
Effect of interest-free sources used to fund earning assets	0.22		0.23		0.20		0.15		0.14
Net interest margin	3.27	%	3.19	%	3.07	%	2.92	%	3.00		%

Yields are adjusted to a FTE basis assuming a statutory federal income tax rate of 35 percent 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) 4Q16 driven by negative market rates on reverse repurchase agreements.

(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



																4Q17 Changes vs.
(Dollars and shares in thousands)	4Q17			3Q17			2Q17			1Q17			4Q16			3Q17		4Q16

Common equity tier 1 capital (a) (b)	$	2,906,544		$	2,477,210		$	2,418,578		$	2,409,219		$	2,377,987		17	%	22	%
Tier 1 capital (a) (b)	3,227,434			2,764,780			2,699,698			2,680,869			2,671,871			17	%	21	%
Total capital (a)	3,644,178			3,005,198			2,942,948			2,926,292			2,926,010			21	%	25	%

Risk-weighted assets (“RWA”) (a) (b)	33,492,100			24,678,030			24,566,487			23,623,224			23,914,158			36	%	40	%
Average assets for leverage (a) (b)	31,776,905			28,793,816			28,793,889			28,805,253			28,581,251			10	%	11	%

Common equity tier 1 ratio (a) (b)	8.68		%	10.04		%	9.85		%	10.20		%	9.94		%
Tier 1 ratio (a) (b)	9.64		%	11.20		%	10.99		%	11.35		%	11.17		%
Total capital ratio (a)	10.88		%	12.18		%	11.98		%	12.39		%	12.24		%
Leverage ratio (a) (b)	10.16		%	9.60		%	9.38		%	9.31		%	9.35		%

Total equity to total assets	11.06		%	9.73		%	9.63		%	9.25		%	9.47		%
Tangible common equity/tangible assets (“TCE/TA”) (c)	6.57		%	7.54		%	7.41		%	7.27		%	7.42		%
Period-end shares outstanding	326,736			234,231			234,135			233,883			233,624			39	%	40	%
Cash dividends declared per common share	$	0.09		$	0.09		$	0.09		$	0.09		$	0.07		*		29	%
Book value per common share	$	12.82		$	10.64		$	10.40		$	10.05		$	9.90
Tangible book value per common share (c)	$	8.01		$	9.45		$	9.20		$	9.14		$	9.00
Market capitalization (millions)	$	6,531.5		$	4,485.5		$	4,078.6		$	4,326.8		$	4,674.8

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

* Amount is less than one percent.

(a) Current quarter is an estimate; estimate does not include the favorable impact of reclassification from AOCI to retained earnings of approximately $58 million in connection with tax law change per bank regulatory guidance issued on January 18, 2018.

(b) See Glossary of Terms for definition.

(c) 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 22 of this financial supplement.

FHN BUSINESS SEGMENT HIGHLIGHTS

Quarterly/Annually, Unaudited



																4Q17 Changes vs.							Twelve Months Ended						2017 vs.
(Thousands)	4Q17			3Q17			2Q17			1Q17			4Q16				3Q17			4Q16			2017			2016			2016

Regional Banking
Net interest income	$	244,272		$	209,319		$	201,972		$	193,389		$	200,717			17		%	22		%	$	848,952		$	741,852			14		%
Noninterest income	70,527			64,369			64,737			58,976			63,324				10		%	11		%	258,609			249,003				4		%
Total revenues	314,799			273,688			266,709			252,365			264,041				15		%	19		%	1,107,561			990,855				12		%
Provision for loan losses	9,737			8,552			260			3,098			4,692				14		%	NM			21,647			38,887				(44	)	%
Noninterest expense (a)	178,598			150,464			152,647			148,064			160,851				19		%	11		%	629,773			615,821				2		%
Income before income taxes	126,464			114,672			113,802			101,203			98,498				10		%	28		%	456,141			336,147				36		%
Provision for income taxes	43,999			41,267			41,131			36,588			35,364				7		%	24		%	162,985			120,100				36		%
Net income	$	82,465		$	73,405		$	72,671		$	64,615		$	63,134			12		%	31		%	$	293,156		$	216,047			36		%

Fixed Income
Net interest income	$	5,901		$	5,979		$	4,979		$	1,151		$	2,541			(1	)	%	NM			$	18,010		$	10,765			67		%
Noninterest income	55,248			55,802			55,205			50,822			52,061				(1	)	%	6		%	217,077			269,339				(19	)	%
Total revenues	61,149			61,781			60,184			51,973			54,602				(1	)	%	12		%	235,087			280,104				(16	)	%
Noninterest expense	55,146			53,105			54,001			48,685			48,726				4		%	13		%	210,937			229,576				(8	)	%
Income before income taxes	6,003			8,676			6,183			3,288			5,876				(31	)	%	2		%	24,150			50,528				(52	)	%
Provision for income taxes	1,970			2,979			1,946			1,024			1,875				(34	)	%	5		%	7,919			18,070				(56	)	%
Net income	$	4,033		$	5,697		$	4,237		$	2,264		$	4,001			(29	)	%	1		%	$	16,231		$	32,458			(50	)	%

Corporate
Net interest income/(expense)	$	(15,855	)	$	(13,990	)	$	(14,970	)	$	(14,100	)	$	(17,501	)		(13	)	%	9		%	$	(58,915	)	$	(65,902	)		11		%
Noninterest income (b)	6,709			(9,477		)	6,218			5,476			4,670				NM			44		%	8,926			20,436				(56	)	%
Total revenues	(9,146		)	(23,467		)	(8,752		)	(8,624		)	(12,831		)		61		%	29		%	(49,989		)	(45,466		)		(10	)	%
Noninterest expense (c)	74,000			23,935			24,575			16,880			14,593				NM			NM			139,390			58,913				NM
Loss before income taxes	(83,146		)	(47,402		)	(33,327		)	(25,504		)	(27,424		)		(75	)	%	NM			(189,379		)	(104,379		)		(81	)	%
Provision/(benefit) for income taxes (d)	37,097			(34,255		)	(35,706		)	(13,058		)	(15,082		)		NM			NM			(45,922		)	(55,777		)		18		%
Net income/(loss)	$	(120,243	)	$	(13,147	)	$	2,379		$	(12,446	)	$	(12,342	)		NM			NM			$	(143,457	)	$	(48,602	)		NM

Non-Strategic
Net interest income	$	7,770		$	8,509		$	8,720		$	9,268		$	9,794			(9	)	%	(21	)	%	$	34,267		$	42,369			(19	)	%
Noninterest income (e)	706			1,723			1,513			1,665			4,022				(59	)	%	(82	)	%	5,607			13,663				(59	)	%
Total revenues	8,476			10,232			10,233			10,933			13,816				(17	)	%	(39	)	%	39,874			56,032				(29	)	%
Provision/(provision credit) for loan losses	(6,737		)	(8,552		)	(2,260		)	(4,098		)	(4,692		)		21		%	(44	)	%	(21,647		)	(27,887		)		22		%
Noninterest expense (f)	38,926			9,365			(13,306		)	8,576			13,727				NM			NM			43,561			20,894				NM
Income/(loss) before income taxes	(23,713		)	9,419			25,799			6,455			4,781				NM			NM			17,960			63,025				(72	)	%
Provision/(benefit) for income taxes	(9,077		)	3,605			9,882			2,500			1,851				NM			NM			6,910			24,417				(72	)	%
Net income/(loss)	$	(14,636	)	$	5,814		$	15,917		$	3,955		$	2,930			NM			NM			$	11,050		$	38,608			(71	)	%

Total Consolidated
Net interest income	$	242,088		$	209,817		$	200,701		$	189,708		$	195,551			15		%	24		%	$	842,314		$	729,084			16		%
Noninterest income	133,190			112,417			127,673			116,939			124,077				18		%	7		%	490,219			552,441				(11	)	%
Total revenues	375,278			322,234			328,374			306,647			319,628				16		%	17		%	1,332,533			1,281,525				4		%
Provision/(provision credit) for loan losses	3,000			—			(2,000		)	(1,000		)	—				NM			NM			—			11,000				NM
Noninterest expense	346,670			236,869			217,917			222,205			237,897				46		%	46		%	1,023,661			925,204				11		%
Income before income taxes	25,608			85,365			112,457			85,442			81,731				(70	)	%	(69	)	%	308,872			345,321				(11	)	%
Provision for income taxes	73,989			13,596			17,253			27,054			24,008				NM			NM			131,892			106,810				23		%
Net income/(loss)	$	(48,381	)	$	71,769		$	95,204		$	58,388		$	57,723			NM			NM			$	176,980		$	238,511			(26	)	%

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

NM - Not meaningful


(a)	4Q17 includes $4.1 million of special employee bonuses; 3Q17 includes $4.4 million of loss accruals related to legal matters; 4Q16 includes $2.7 million of loss accruals related to legal matters.


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

(c)

4Q17 includes $46.7 million of acquisition-related expenses primarily associated with the CBF acquisition, $5.7 million of special employee bonuses, and a $5.6 million charitable contribution to the First Tennessee Foundation, somewhat offset by $4.3 million of deferred compensation BOLI gain; 3Q17 includes $8.2 million of acquisition-related expenses primarily associated with the CBF and Coastal acquisitions; 2Q17 includes $6.4 million of acquisition-related expenses primarily associated with the CBF and Coastal acquisitions and a $3.2 million charitable contribution to the First Tennessee Foundation.


(d)	4Q17 increase primarily associated with the effects of the Tax Act; 4Q17, 3Q17 and 2Q17 include the impact of a favorable effective tax rate adjustment associated with the reversal of a capital loss deferred tax valuation allowance.


(e)	4Q16 includes a $1.5 million gain related to the reversal of a contingency accrual associated with prior sales of MSR.


(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; 2Q17 includes a $21.7 million reversal of repurchase and foreclosure provision as a result of the settlements/ recoveries of certain repurchase claims; 4Q16 includes $2.0 million of loss accruals related to legal matters.

FHN REGIONAL BANKING

Quarterly/Annually, Unaudited



																4Q17 Changes vs.				Twelve Months Ended						2017 vs.
	4Q17			3Q17			2Q17			1Q17			4Q16			3Q17		4Q16		2017			2016			2016

Income Statement (thousands)
Net interest income	$	244,272		$	209,319		$	201,972		$	193,389		$	200,717		17	%	22	%	$	848,952		$	741,852			14		%
Provision for loan losses	9,737			8,552			260			3,098			4,692			14	%	NM		21,647			38,887				(44	)	%
Noninterest income:
NSF / Overdraft fees (a)	10,111			9,888			8,726			6,316			9,707			2	%	4	%	35,041			38,264				(8	)	%
Cash management fees	9,396			8,923			9,641			9,196			8,659			5	%	9	%	37,155			33,979				9		%
Debit card income	3,688			3,638			3,658			3,407			3,516			1	%	5	%	14,391			13,697				5		%
Other	5,697			4,189			4,424			4,327			4,291			36	%	33	%	18,638			17,259				8		%
Total deposit transactions and cash management	28,892			26,638			26,449			23,246			26,173			8	%	10	%	105,225			103,199				2		%
Brokerage, management fees and commissions	12,642			11,936			12,029			11,906			11,003			6	%	15	%	48,513			42,911				13		%
Trust services and investment management	7,131			6,968			7,713			6,680			7,056			2	%	1	%	28,491			27,764				3		%
Bankcard income	8,125			6,057			5,495			5,342			6,230			34	%	30	%	25,020			23,945				4		%
Other service charges	3,096			2,603			2,722			2,618			2,596			19	%	19	%	11,039			10,084				9		%
Miscellaneous revenue (b)	10,641			10,167			10,329			9,184			10,266			5	%	4	%	40,321			41,100				(2	)	%
Total noninterest income	70,527			64,369			64,737			58,976			63,324			10	%	11	%	258,609			249,003				4		%
Noninterest expense:
Employee compensation, incentives, and benefits (c)	71,636			56,387			58,487			57,990			58,627			27	%	22	%	244,500			220,653				11		%
Other (d)	106,962			94,077			94,160			90,074			102,224			14	%	5	%	385,273			395,168				(3	)	%
Total noninterest expense	178,598			150,464			152,647			148,064			160,851			19	%	11	%	629,773			615,821				2		%
Income before income taxes	$	126,464		$	114,672		$	113,802		$	101,203		$	98,498		10	%	28	%	$	456,141		$	336,147			36		%
PPNR (e)	136,201			123,224			113,676			104,301			103,190			11	%	32	%	477,788			375,034				27		%
Efficiency ratio (f)	56.73		%	54.98		%	57.32		%	58.67		%	60.92		%					56.86		%	62.15		%

Balance Sheet (millions)
Average loans	$	21,146		$	18,402		$	17,679		$	17,199		$	17,692		15	%	20	%	$	18,617		$	16,409			13		%
Average other earning assets	87			44			50			34			37			98	%	NM		54			44				23		%
Total average earning assets	21,233			18,446			17,729			17,233			17,729			15	%	20	%	18,671			16,453				13		%
Total average deposits	22,390			20,075			20,139			19,660			19,022			12	%	18	%	20,572			18,513				11		%
Total period-end deposits	27,555			20,084			20,425			20,541			19,348			37	%	42	%	27,555			19,348				42		%
Total period-end assets	30,148			19,600			19,333			18,329			18,771			54	%	61	%	30,148			18,771				61		%
Net interest margin (g)	4.65		%	4.56		%	4.63		%	4.61		%	4.57		%					4.61		%	4.57		%
Net interest spread	3.86			3.72			3.62			3.57			3.52							3.70			3.46
Loan yield	4.15			4.00			3.88			3.78			3.68							3.96			3.61
Deposit average rate	0.29			0.28			0.26			0.21			0.16							0.26			0.15

Key Statistics
Financial center locations	347			163			163			162			162			NM		NM

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; 1Q17 decrease driven by seasonality and a modification of billing practices.


(b)	2Q17 includes $386 thousand of securities gains/(losses).


(c)	4Q17 includes $4.1 million of special employee bonuses.


(d)	3Q17 includes $4.4 million of loss accruals related to legal matters; 4Q16 includes $2.7 million of loss accruals related to legal matters.


(e)	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.


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


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

FHN FIXED INCOME

Quarterly/Annually, Unaudited



																4Q17 Changes vs.				Twelve Months Ended						2017 vs.
	4Q17			3Q17			2Q17			1Q17			4Q16			3Q17		4Q16		2017			2016			2016

Income Statement (thousands)
Net interest income (a)	$	5,901		$	5,979		$	4,979		$	1,151		$	2,541		(1)	%	NM		$	18,010		$	10,765			67	%
Noninterest income:
Fixed income product revenue	40,608			45,020			45,555			42,727			43,794			(10)	%	(7)	%	173,910			229,659				(24)	%
Other	14,640			10,782			9,650			8,095			8,267			36	%	77	%	43,167			39,680				9	%
Total noninterest income	55,248			55,802			55,205			50,822			52,061			(1)	%	6	%	217,077			269,339				(19)	%
Noninterest expense	55,146			53,105			54,001			48,685			48,726			4	%	13	%	210,937			229,576				(8)	%
Income before income taxes	$	6,003		$	8,676		$	6,183		$	3,288		$	5,876		(31)	%	2	%	$	24,150		$	50,528			(52)	%

Efficiency ratio (b)	90.18		%	85.96		%	89.73		%	93.67		%	89.24		%					89.73		%	81.96		%
Fixed income product average daily revenue	$	655		$	715		$	723		$	689		$	718		(8)	%	(9)	%	$	696		$	919			(24)	%

Balance Sheet (millions)
Average trading inventory (a)	$	1,437		$	1,122		$	1,281		$	927		$	1,281		28	%	12	%	$	1,193		$	1,210			(1)	%
Average loans held-for-sale (a)	363			443			220			7			20			(18)	%	NM		259			12				NM
Average other earning assets	850			690			851			696			798			23	%	7	%	773			829				(7)	%
Total average earning assets	2,650			2,255			2,352			1,630			2,099			18	%	26	%	2,225			2,051				8	%
Total period-end assets	2,990			2,751			2,745			2,395			1,817			9	%	65	%	2,990			1,817				65	%
Net interest margin (c)	0.94		%	1.12		%	0.92		%	0.33		%	0.57		%					0.87		%	0.60		%

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

NM - Not meaningful

(a) 2Q17 increase driven by the Coastal acquisition.

(b) Noninterest expense divided by total revenue.

(c) Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where

applicable, state income taxes.

FHN CORPORATE

Quarterly, Unaudited



																4Q17 Changes vs.					Twelve months ended						2017 vs.
	4Q17			3Q17			2Q17			1Q17			4Q16			3Q17			4Q16		2017			2016			2016

Income Statement (thousands)
Net interest income/(expense)	$	(15,855	)	$	(13,990	)	$	(14,970	)	$	(14,100	)	$	(17,501	)	(13	)	%	9	%	$	(58,915	)	$	(65,902	)	11		%
Noninterest income excluding securities gains/(losses) (a)	6,572			(9,483		)	6,199			5,432			4,802			NM			37	%	8,720			19,095			(54	)	%
Securities gains/(losses), net	137			6			19			44			(132		)	NM			NM		206			1,341			(85	)	%
Noninterest expense (b)	74,000			23,935			24,575			16,880			14,593			NM			NM		139,390			58,913			NM
Loss before income taxes	$	(83,146	)	$	(47,402	)	$	(33,327	)	$	(25,504	)	$	(27,424	)	(75	)	%	NM		$	(189,379	)	$	(104,379	)	(81	)	%

Average Balance Sheet (millions)
Average investment securities	$	4,273		$	3,959		$	3,950		$	3,931		$	4,007		8		%	7	%	$	4,029		$	4,012		*
Total earning assets	$	4,792		$	4,408		$	4,983		$	6,122		$	4,795		9		%	*		$	5,071		$	4,770		6		%

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

NM - Not Meaningful

* Amount is less than one percent.

(a) 4Q17 includes a $1.3 million gain related to BOLI policy benefits; 3Q17 includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction.

(b) 4Q17 includes $46.7 million of acquisition-related expenses primarily associated with the CBF acquisition, $5.7 million of special employee bonuses, and 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-related expenses primarily associated with the CBF and Coastal acquisitions; 2Q17 includes $6.4 million of acquisition-related expenses primarily associated with the CBF and Coastal acquisitions and a $3.2 million charitable contribution to the First Tennessee Foundation, somewhat offset by $2.2 million of deferred compensation BOLI gains.

FHN NON-STRATEGIC

Quarterly/Annually, Unaudited



																					4Q17 Changes vs.						Twelve Months Ended								2017 vs.
	4Q17				3Q17				2Q17				1Q17				4Q16				3Q17			4Q16			2017				2016				2016

Income Statement (thousands)
Net interest income	$	7,770			$	8,509			$	8,720			$	9,268			$	9,794			(9	)	%	(21	)	%	$	34,267			$	42,369			(19)	%
Provision/(provision credit) for loan losses	(6,737		)		(8,552		)		(2,260		)		(4,098		)		(4,692		)		21		%	(44	)	%	(21,647		)		(27,887		)		22	%
Noninterest income (a)	706				1,723				1,513				1,665				4,022				(59	)	%	(82	)	%	5,607				13,663				(59)	%
Noninterest expense (b)	38,926				9,365				(13,306		)		8,576				13,727				NM			NM			43,561				20,894				NM
Income/(loss) before income taxes	$	(23,713	)		$	9,419			$	25,799			$	6,455			$	4,781			NM			NM			$	17,960			$	63,025			(72)	%

Average Balance Sheet (millions)
Loans	$	1,282			$	1,358			$	1,441			$	1,535			$	1,636			(6	)	%	(22	)	%	$	1,403			$	1,800			(22)	%
Other assets	72				73				80				81				86				(1	)	%	(16	)	%	77				88				(13)	%
Total assets	1,354				1,431				1,521				1,616				1,722				(5	)	%	(21	)	%	1,480				1,888				(22)	%
Net interest margin (c)	2.26			%	2.34			%	2.27			%	2.29			%	2.25			%							2.29			%	2.22			%
Efficiency ratio (d)	NM				91.53			%	NM				78.44			%	99.36			%							NM				37.29			%

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

NM - Not meaningful

(a) 4Q16 includes a $1.5 million gain related to the reversal of a contingency accrual associated with prior sales of MSR.

(b) 4Q17 includes $32.0 million of loss accruals related to legal matters; 3Q17 includes $3.6 million of loss accruals related to legal matters; 2Q17 includes a $21.7 million reversal of repurchase and foreclosure provision as a result of the settlements/ recoveries of certain repurchase claims; 4Q16 includes $2.0 million of loss accruals related to legal matters.

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

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

FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited



																					4Q17 Changes vs.
(Dollars in thousands)	4Q17				3Q17				2Q17				1Q17				4Q16				3Q17	4Q16

Allowance for Loan Losses Walk-Forward
Beginning reserve	$	194,867			$	197,257			$	201,968			$	202,068			$	201,557			(1)%	(3)%
Provision/(provision credit) for loan losses	3,000				—				(2,000			)	(1,000			)	—				NM	NM
Charge-offs	(17,481			)	(10,670			)	(9,830			)	(8,413			)	(11,369			)	(64)%	(54)%
Recoveries	9,169				8,280				7,119				9,313				11,880				11%	(23)%
Ending balance	$	189,555			$	194,867			$	197,257			$	201,968			$	202,068			(3)%	(6)%
Reserve for unfunded commitments	5,079				4,372				5,554				5,284				5,312				16%	(4)%
Total allowance for loan losses plus reserve for unfunded commitments	$	194,634			$	199,239			$	202,811			$	207,252			$	207,380			(2)%	(6)%

Allowance for Loan Losses
Regional Banking	$	154,111			$	156,021			$	153,208			$	155,968			$	154,082			(1)%	*
Non-Strategic	35,444				38,846				44,049				46,000				47,986				(9)%	(26)%
Total allowance for loan losses	$	189,555			$	194,867			$	197,257			$	201,968			$	202,068			(3)%	(6)%

Nonperforming Assets
Regional Banking
Nonperforming loans	$	52,659			$	40,610			$	43,012			$	49,462			$	50,653			30%	4%
OREO (a)	34,844				2,848				3,266				4,422				5,081				NM	NM
Total Regional Banking	$	87,503			$	43,458			$	46,278			$	53,884			$	55,734			NM	57%
Non-Strategic
Nonperforming loans	$	75,803			$	82,203			$	84,959			$	92,409			$	93,808			(8)%	(19)%
Nonperforming loans held-for-sale after fair value adjustments	6,971				7,314				7,321				7,633				7,741				(5)%	(10)%
OREO (a)	4,722				5,029				3,772				5,837				6,154				(6)%	(23)%
Total Non-Strategic	$	87,496			$	94,546			$	96,052			$	105,879			$	107,703			(7)%	(19)%
Corporate
Nonperforming loans	$	2,157			$	2,173			$	1,819			$	1,521			$	1,186			(1)%	82%
Total nonperforming assets (a)	$	177,156			$	140,177			$	144,149			$	161,284			$	164,623			26%	8%

Net Charge-Offs
Regional Banking	$	11,647			$	5,739			$	3,020			$	1,211			$	2,007			NM	NM
Non-Strategic	(3,335			)	(3,349			)	(309			)	(2,111			)	(2,518			)	*	(32)%
Total net charge-offs/(recoveries)	$	8,312			$	2,390			$	2,711			$	(900		)	$	(511		)	NM	NM

Consolidated Key Ratios (b) (c)
30+ Delinq. % (d)	0.33		%		0.38		%		0.27		%		0.39		%		0.34		%
NPL %	0.47				0.62				0.65				0.75				0.74
NPA %	0.61				0.66				0.68				0.80				0.80
Net charge-offs %	0.15				0.05				0.06				NM				NM
Allowance / loans % (e)	0.69				0.97				0.99				1.06				1.03
Allowance / NPL	1.45		x		1.56		x		1.52		x		1.41		x		1.39		x
Allowance / NPA	1.11		x		1.47		x		1.44		x		1.31		x		1.29		x
Allowance / net charge-offs	5.75		x		20.55		x		18.14		x		NM				NM

Other
Loans past due 90 days or more and still accruing (f)	$	48,047			$	41,025			$	37,809			$	37,156			$	38,299			17%	25%
Guaranteed portion (f)	9,454				10,046				15,276				14,569				14,664				(6)%	(36)%
Period-end loans, net of unearned income (millions)	27,659				20,166				19,989				19,090				19,590				37%	41%

NM - Not meaningful

* Amount is less than one percent.

(a) Excludes OREO from government-insured mortgages.

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

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

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

(e) The 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.

(f) Includes loans held-for-sale.

FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited



																4Q17 Changes vs.
	4Q17			3Q17			2Q17			1Q17			4Q16			3Q17	4Q16

Key Portfolio Details
C&I
Period-end loans ($ millions)	$	16,057		$	12,792		$	12,598		$	11,704		$	12,148		26%	32%
30+ Delinq. % (a) (b) (c)	0.19		%	0.27		%	0.03		%	0.17		%	0.08		%
NPL %	0.19			0.15			0.20			0.26			0.27
Charge-offs % (qtr. annualized)	0.28			0.10			0.04			NM			NM
Allowance / loans %	0.61		%	0.77		%	0.73		%	0.80		%	0.74		%
Allowance / net charge-offs	2.53		x	7.97		x	18.21		x	NM			NM

Commercial Real Estate
Period-end loans ($ millions)	$	4,215		$	2,251		$	2,212		$	2,173		$	2,136		87%	97%
30+ Delinq. % (a)	0.11		%	0.02		%	0.01		%	0.03		%	0.01		%
NPL %	0.03			0.07			0.07			0.11			0.13
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			0.09
Allowance / loans %	0.67		%	1.32		%	1.38		%	1.42		%	1.59		%
Allowance / net charge-offs	NM			NM			NM			NM			17.56		x

Consumer Real Estate
Period-end loans ($ millions)	$	6,368		$	4,370		$	4,417		$	4,457		$	4,524		46%	41%
30+ Delinq. % (a)	0.65		%	0.74		%	0.81		%	0.86		%	0.93		%
NPL %	1.12			1.76			1.70			1.83			1.83
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	0.59		%	0.94		%	1.04		%	1.11		%	1.11		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Permanent Mortgage
Period-end loans ($ millions)	$	399		$	403		$	408		$	409		$	423		(1)%	(6)%
30+ Delinq. % (a)	1.85		%	1.51		%	2.57		%	2.57		%	2.36		%
NPL %	6.61			6.81			6.81			7.05			6.42
Charge-offs % (qtr. annualized)	0.10			NM			0.35			NM			NM
Allowance / loans %	3.90		%	3.90		%	4.02		%	3.88		%	3.85		%
Allowance / net charge-offs	37.67		x	NM			11.52		x	NM			NM

Credit Card and Other
Period-end loans ($ millions)	$	620		$	350		$	354		$	347		$	359		77%	73%
30+ Delinq. % (a)	1.24		%	0.89		%	0.92		%	1.00		%	1.17		%
NPL %	0.03			0.04			0.04			0.04			0.04
Charge-offs % (qtr. annualized)	2.30			2.80			2.71			3.08			3.25
Allowance / loans %	1.61		%	2.95		%	3.38		%	3.58		%	3.39		%
Allowance / net charge-offs	0.99		x	1.04		x	1.24		x	1.16		x	1.04		x

NM - Not meaningful

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

(b) 1Q17 increase was primarily driven by a few credits within the C&I portfolio, all of which were favorably resolved in second quarter 2017.

FHN ASSET QUALITY: REGIONAL BANKING

Quarterly, Unaudited



																4Q17 Changes vs.
	4Q17			3Q17			2Q17			1Q17			4Q16			3Q17	4Q16

Total Regional Banking
Period-end loans ($ millions)	$	26,359		$	18,788		$	18,529		$	17,537		$	17,935		40%	47%
30+ Delinq. % (a)	0.26		%	0.28		%	0.13		%	0.24		%	0.18		%
NPL %	0.20			0.22			0.23			0.28			0.28
Charge-offs % (qtr. annualized)	0.22			0.12			0.07			0.03			0.05
Allowance / loans %	0.58		%	0.83		%	0.83		%	0.89		%	0.86		%
Allowance / net charge-offs	3.34		x	6.85		x	12.65		x	31.75		x	19.30		x

Key Portfolio Details
C&I
Period-end loans ($ millions)	$	15,639		$	12,373		$	12,178		$	11,284		$	11,728		26%	33%
30+ Delinq. % (a) (b) (c)	0.20		%	0.28		%	0.03		%	0.18		%	0.08		%
NPL %	0.18			0.13			0.17			0.24			0.24
Charge-offs % (qtr. annualized)	0.29			0.10			0.04			NM			NM
Allowance / loans %	0.62		%	0.78		%	0.75		%	0.81		%	0.75		%
Allowance / net charge-offs	2.49		x	7.83		x	17.85		x	NM			NM

Commercial Real Estate
Period-end loans ($ millions)	$	4,215		$	2,251		$	2,212		$	2,173		$	2,136		87%	97%
30+ Delinq. % (a)	0.11		%	0.02		%	0.01		%	0.03		%	0.01		%
NPL %	0.03			0.07			0.07			0.11			0.13
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			0.11
Allowance / loans %	0.67		%	1.32		%	1.38		%	1.42		%	1.59		%
Allowance / net charge-offs	NM			NM			NM			NM			14.28		x

Consumer Real Estate
Period-end loans ($ millions)	$	5,774		$	3,714		$	3,695		$	3,655		$	3,643		55%	58%
30+ Delinq. % (a)	0.40		%	0.38		%	0.46		%	0.48		%	0.49		%
NPL %	0.39			0.61			0.54			0.55			0.52
Charge-offs % (qtr. annualized)	NM			0.04			NM			NM			—
Allowance / loans %	0.28		%	0.46		%	0.48		%	0.53		%	0.52		%
Allowance / net charge-offs	NM			11.04		x	NM			NM			NM

Credit Card, Permanent Mortgage, and Other
Period-end loans ($ millions)	$	731		$	450		$	444		$	425		$	428		62%	71%
30+ Delinq. % (a)	1.10		%	0.85		%	0.81		%	0.90		%	1.08		%
NPL %	0.07			0.10			0.09			0.09			0.09
Charge-offs % (qtr. annualized)	1.83			2.19			2.21			2.55			2.79
Allowance / loans %	1.70		%	2.79		%	3.13		%	3.36		%	3.09		%
Allowance / net charge-offs	1.25		x	1.27		x	1.44		x	1.33		x	1.12		x

ASSET QUALITY: CORPORATE

Permanent Mortgage
Period-end loans ($ millions)	$	53		$	58		$	63		$	67		$	71		(9)%	(25)%
30+ Delinq. % (a)	3.98		%	4.22		%	6.52		%	4.25		%	4.37		%
NPL %	4.03			3.75			2.90			2.25			1.66
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

NM - Not meaningful

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

(b) 1Q17 increase was primarily driven by a few credits within the C&I portfolio, all of which were favorably resolved in second quarter 2017.

FHN ASSET QUALITY: NON-STRATEGIC

Quarterly, Unaudited



																4Q17 Changes vs.
	4Q17			3Q17			2Q17			1Q17			4Q16			3Q17	4Q16

Total Non-Strategic
Period-end loans ($ millions)	$	1,247		$	1,320		$	1,397		$	1,486		$	1,584		(6)%	(21)%
30+ Delinq. % (a)	1.85		%	1.62		%	1.79		%	1.89		%	1.94		%
NPL %	6.08			6.23			6.08			6.22			5.92
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	2.84		%	2.94		%	3.15		%	3.10		%	3.03		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Key Portfolio Details
Commercial
Period-end loans ($ millions)	$	418		$	419		$	420		$	420		$	420		*	*
30+ Delinq. % (a)	—		%	—		%	—		%	—		%	—		%
NPL %	0.73			0.74			0.95			0.97			0.98
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	0.33		%	0.32		%	0.34		%	0.35		%	0.33		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Consumer Real Estate
Period-end loans ($ millions)	$	594		$	656		$	722		$	802		$	881		(9)%	(33)%
30+ Delinq. % (a)	3.06		%	2.80		%	2.62		%	2.60		%	2.76		%
NPL %	8.23			8.26			7.64			7.65			7.26
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	3.53		%	3.66		%	3.90		%	3.80		%	3.56		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Permanent Mortgage
Period-end loans ($ millions)	$	229		$	239		$	249		$	258		$	275		(4)%	(17)%
30+ Delinq. % (a)	2.12		%	1.20		%	2.38		%	2.78		%	2.29		%
NPL %	10.40			10.39			10.30			10.45			9.32
Charge-offs % (qtr. annualized)	0.18			NM			0.56			NM			NM
Allowance / loans %	5.70		%	5.62		%	5.80		%	5.45		%	5.49		%
Allowance / net charge-offs	31.54		x	NM			10.13		x	NM			NM

Other Consumer
Period-end loans ($ millions)	$	6		$	6		$	6		$	6		$	8		*	(25)%
30+ Delinq. % (a)	0.95		%	1.44		%	1.95		%	1.84		%	1.73		%
NPL %	1.89			1.92			1.93			1.90			1.82
Charge-offs % (qtr. annualized)	1.90			1.14			NM			NM			NM
Allowance / loans %	1.36		%	0.69		%	0.35		%	0.08		%	2.26		%
Allowance / net charge-offs	0.71		x	0.60		x	NM			NM			NM

NM - Not meaningful

* Amount is less than one percent.

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

FHN NON-GAAP TO GAAP RECONCILIATION

Quarterly/Annually, Unaudited



																	Twelve Months Ended
(Dollars and shares in thousands, except per share data)	4Q17				3Q17			2Q17			1Q17			4Q16			2017			2016

Tangible Common Equity (Non-GAAP)
(A) Total equity (GAAP)	$	4,580,488			$	2,883,551		$	2,826,888		$	2,740,460		$	2,705,084		$	4,580,488		$	2,705,084
Less: Noncontrolling interest (a)	295,431				295,431			295,431			295,431			295,431			295,431			295,431
Less: Preferred stock (a)	95,624				95,624			95,624			95,624			95,624			95,624			95,624
(B) Total common equity	$	4,189,433			$	2,492,496		$	2,435,833		$	2,349,405		$	2,314,029		$	4,189,433		$	2,314,029
Less: Intangible assets (GAAP) (b)	1,571,242				279,492			281,456			211,156			212,388			1,571,242			212,388
(C) Tangible common equity (Non-GAAP)	$	2,618,191			$	2,213,004		$	2,154,377		$	2,138,249		$	2,101,641		$	2,618,191		$	2,101,641

Tangible Assets (Non-GAAP)
(D) Total assets (GAAP)	$	41,423,388			$29,622,636			$29,369,956			$29,618,600			$28,555,231			$41,423,388			$	28,555,231
Less: Intangible assets (GAAP) (b)	1,571,242				279,492			281,456			211,156			212,388			1,571,242			212,388
(E) Tangible assets (Non-GAAP)	$	39,852,146			$29,343,144			$29,088,500			$29,407,444			$28,342,843			$39,852,146			$28,342,843

Average Tangible Common Equity (Non-GAAP)
(F) Average total equity (GAAP)	$	3,506,165			$	2,866,757		$	2,778,169		$	2,722,668		$	2,746,828		$	2,970,308		$	2,691,478
Less: Average noncontrolling interest (a)	295,431				295,431			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			95,624			95,624
(G) Total average common equity	$	3,115,110			$	2,475,702		$	2,387,114		$	2,331,613		$	2,355,773		$	2,579,253		$	2,300,423
Less: Average intangible assets (GAAP) (b)	726,958				280,575			281,326			211,757			213,019			376,306			214,915
(H) Average tangible common equity (Non-GAAP)	$	2,388,152			$	2,195,127		$	2,105,788		$	2,119,856		$	2,142,754		$	2,202,947		$	2,085,508

Net Income/(loss) Available to Common Shareholders
(I) Net income/(loss) available to common shareholders (quarters are annualized) (GAAP)	$	(209,641	)		$	267,148		$	364,206		$	219,073		$	212,017		$	159,315		$220,846

Period-end Shares Outstanding
(J) Period-end shares outstanding	326,736				234,231			234,135			233,883			233,624			326,736			233,624

Ratios
(I)/(G) Return on average common equity (“ROE”) (GAAP)	(6.73		)	%	10.79		%	15.26		%	9.40		%	9.00		%	6.18		%	9.60		%
(I)/(H) Return on average tangible common equity (“ROTCE”) (Non-GAAP)	(8.78		)	%	12.17		%	17.30		%	10.33		%	9.89		%	7.23		%	10.59		%
(A)/(D) Total equity to total assets (GAAP)	11.06			%	9.73		%	9.63		%	9.25		%	9.47		%	11.06		%	9.47		%
(C)/(E) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP)	6.57			%	7.54		%	7.41		%	7.27		%	7.42		%	6.57		%	7.42		%
(B)/(J) Book value per common share (GAAP)	$	12.82			$	10.64		$	10.40		$	10.05		$	9.90		$	12.82		$	9.90
(C)/(J) Tangible book value per common share (Non-GAAP)	$	8.01			$	9.45		$	9.20		$	9.14		$	9.00		$	8.01		$	9.00

(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