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

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EX-99.2 - EXHIBIT 99.2 INVESTOR SLIDES - FIRST HORIZON CORP	fhn2q18earningsslides.htm
8-K - 8-K - FIRST HORIZON CORP	a2q18financialsupplement8-.htm

SECOND 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 Second Quarter 2018 Notable Items
Segment	Item	Income Statement	Amount Favorable/ (Unfavorable)	Comments
Corporate	Acquisition and integration expenses	Noninterest expense: various	$(43.2) million	Pre-tax acquisition- and integration-related expenses primarily associated with the Capital Bank Financial Corp. ("CBF") acquisition

Corporate	Visa derivative valuation	Noninterest expense: other	$(4.1) million	Pre-tax negative valuation adjustments associated with derivatives related to prior sales of Visa Class B shares

Second Quarter 2018 vs. First Quarter 2018

Consolidated


•	Net income available to common shareholders was $81.6 million, or $.25 per diluted share in 2Q18 compared to $90.6 million, or $.27 per diluted share in 1Q18


•	Net interest income (“NII”) increased to $310.9 million in 2Q18 from $301.2 million in 1Q18


•	The increase in NII in 2Q18 was primarily due to higher loan accretion associated with the CBF acquisition, an additional day relative to 1Q18, and increases in loan fees and cash basis interest income


•	Net Interest Margin (“NIM”) improved to 3.53 percent in 2Q18 from 3.43 percent in 1Q18


•	The improvement in NIM was also largely the result of higher loan accretion associated with the CBF acquisition, and to a lesser extent higher loan fees and cash basis interest income


•	The provision for loan losses was $0 in 2Q18 compared to a credit of $1.0 million in 1Q18


•	Noninterest income (including securities gains) was $127.5 million in 2Q18 compared to $136.0 million in 1Q18 primarily driven by lower fixed income sales revenues


•	Noninterest expense was $332.8 million in 2Q18 compared to $313.3 million in 1Q18


•	The expense increase was largely driven by an $11.8 million increase in acquisition- and integration-related expenses associated with the CBF acquisition and $4.1 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares


•	Acquisition- and integration-related expenses in 2Q18 are primarily related to contract termination charges, professional fees, fees related to severance and retention, lease buyouts and asset impairments


•	Provision for income taxes decreased to $19.7 million in 2Q18 from $29.9 million in 1Q18


•	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


•	1Q18 includes $1.6 million of unfavorable discrete items related to CBF purchase accounting adjustments

Regional Banking


•	Pre-tax income increased to $168.9 million in 2Q18 from $167.0 million in 1Q18; PPNR was $175.0 million and $172.4 million in 2Q18 and 1Q18, respectively


•	Average loans increased to $26.0 billion in 2Q18 from $25.7 billion in 1Q18; period-end loans increased 2 percent to $26.5 billion in 2Q18


•	Average deposits increased to $27.4 billion in 2Q18 from $27.1 billion in 1Q18; period-end deposits increased 1 percent to $27.9 billion in 2Q18


•	NII increased to $308.9 million in 2Q18 from $298.7 million in 1Q18 primarily due to loan accretion associated with the CBF acquisition, an additional day relative to 1Q18, and increases in loan fees and cash basis interest income


•	Provision expense was $6.1 million in 2Q18 compared to $5.3 million in 1Q18


•	Noninterest income was $78.6 million and $78.9 million in 2Q18 and 1Q18, respectively


•	Noninterest expense was $212.4 million in 2Q18 compared to $205.2 million in 1Q18

Fixed Income


•	Pre-tax loss was $.8 million in 2Q18 compared to pre-tax income of $3.5 million in 1Q18


•	NII increased to $9.2 million in 2Q18 from $8.5 million in 1Q18


•	Noninterest income decreased to $38.4 million in 2Q18 from $45.6 million in 1Q18


•	Fixed income product revenue was $29.9 million in 2Q18 compared to $38.0 million in 1Q18


•	Fixed income product average daily revenue (“ADR”) was $468 thousand and $624 thousand in 2Q18 and 1Q18, respectively


•	Other product revenue increased to $8.4 million in 2Q18 from $7.6 million in 1Q18 due to increases in fees from loan and derivative sales


•	Noninterest expense was $48.3 million in 2Q18 compared to $50.5 million in 1Q18 driven by a decrease in variable compensation expense coupled with a decrease in FICA



FHN PERFORMANCE HIGHLIGHTS (continued)


Second Quarter 2018 vs. First Quarter 2018 (continued)

Corporate


•	Pre-tax loss was $71.2 million in 2Q18 compared to pre-tax loss of $54.8 million in 1Q18


•	NII was negative $14.0 million and negative $13.2 million in 2Q18 and 1Q18, respectively


•	Estimated effective duration of the securities portfolio was 4.6 years in 2Q18 and 4.5 years in 1Q18


•	Noninterest income (including net securities gains) was $8.8 million in 2Q18 compared to $9.5 million in 1Q18


•	2Q18 includes $2.5 million of BOLI policy gains


•	1Q18 includes a $3.3 million gain on the sale of a building


•	Noninterest expense was $66.0 million in 2Q18, up from $51.1 million in 1Q18


•	The increase was largely the result of an $11.8 million increase in acquisition- and integration-related expenses primarily associated with the CBF acquisition and $4.1 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares

Non-Strategic


•	Pre-tax income was $8.8 million in 2Q18 compared to pre-tax income of $9.2 million in 1Q18


•	NII was $6.9 million and $7.2 million in 2Q18 and 1Q18, respectively


•	The provision credit was $6.1 million in 2Q18 compared to a provision credit of $6.3 million in 1Q18


•	Noninterest income was $1.7 million and $2.1 million in 2Q18 and 1Q18, respectively


•	Noninterest expense decreased to $6.0 million in 2Q18 from $6.4 million in 1Q18

Asset Quality


•	Allowance for loan losses decreased to $185.5 million in 2Q18 from $187.2 million in 1Q18; the allowance to loans ratio decreased 2 bps to 67 bps in 2Q18


•	Net charge-offs were $1.7 million in 2Q18 compared to $1.4 million in 1Q18


•	Regional banking net charge-offs were $5.5 million in 2Q18 compared to $3.6 million in 1Q18


•	Non-strategic net recoveries were $3.8 million in 2Q18 compared to $2.2 million in 1Q18


•	Nonperforming loans (“NPLs”), excluding loans held-for-sale, decreased to $124.8 million in 2Q18 from $132.0 million in 1Q18 primarily driven by one credit within the C&I portfolio


•	30+ delinquencies were $85.1 million in 2Q18 compared to $79.4 million in 1Q18

Taxes


•	The effective tax rates for 2Q18 and 1Q18 were 18.64 percent and 23.96 percent, respectively


•	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


•	1Q18 includes $1.6 million of unfavorable discrete items related to CBF purchase accounting adjustments


•	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 2Q18 ($38.9 million in the aggregate) which was paid on July 2, 2018


•	Declared aggregate preferred quarterly dividend of $1.6 million in 2Q18 which was paid on July 10, 2018


•	There were no repurchases of shares in 2Q18 (other than those related to employee stock award programs). $250.0 million remains in the stock purchase authorization announced in January 2018, currently scheduled to expire January 31, 2020


•	Canceled approximately 2.4 million common shares in 2Q18 in connection with certain shareholders of CBF who rejected the terms of the merger agreement and instituted a dissenters' appraisal suit resulting in a reduction in common equity of $46.0 million


•	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 11.08 percent in 2Q18 compared to 11.30 percent in 1Q18


•	Tangible common equity to tangible assets (Non-GAAP) of 6.54 percent in 2Q18 compared to 6.71 percent in 1Q18


•	Common Equity Tier 1 of 8.95 percent in 2Q18 compared to 8.98 percent in 1Q18


•	Tier 1 of 9.95 percent in 2Q18 compared to 9.98 percent in 1Q18


•	Total Capital of 11.21 percent in 2Q18 compared to 11.25 percent in 1Q18


•	Leverage of 8.56 percent in 2Q18 compared to 8.50 percent in 1Q18

FHN CONSOLIDATED INCOME STATEMENT

Quarterly, Unaudited



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

Interest income	$	387,811		$	363,355		$	287,633		$	248,145		$	235,341		7		%	65		%
Less: interest expense	76,879			62,182			45,545			38,328			34,640			24		%	NM
Net interest income	310,932			301,173			242,088			209,817			200,701			3		%	55		%
Provision/(provision credit) for loan losses	—			(1,000		)	3,000			—			(2,000		)	NM			NM
Net interest income after provision for loan losses	310,932			302,173			239,088			209,817			202,701			3		%	53		%
Noninterest income:
Fixed income	37,697			45,506			55,079			55,758			55,110			(17	)	%	(32	)	%
Deposit transactions and cash management	36,083			35,984			30,158			28,011			27,858			*			30		%
Brokerage, management fees and commissions	13,740			13,483			12,642			11,937			12,029			2		%	14		%
Trust services and investment management	8,132			7,277			7,116			6,953			7,698			12		%	6		%
Bankcard income	6,635			6,445			8,237			6,170			5,605			3		%	18		%
Bank-owned life insurance	5,773			3,993			3,987			3,539			4,351			45		%	33		%
Securities gains/(losses), net	31			86			137			6			405			(64	)	%	(92	)	%
Other (b)	19,434			23,243			15,834			43			14,617			(16	)	%	33		%
Total noninterest income	127,525			136,017			133,190			112,417			127,673			(6	)	%	*
Adjusted gross income after provision for loan losses	438,457			438,190			372,278			322,234			330,374			*			33		%
Noninterest expense:
Employee compensation, incentives, and benefits (c)	165,890			171,254			177,312			137,383			138,276			(3	)	%	20		%
Repurchase and foreclosure provision (d)	(252		)	(72		)	53			(609		)	(21,733		)	NM			99		%
Legal fees	2,784			2,345			1,245			2,052			3,496			19		%	(20	)	%
Professional fees (e)	15,415			12,272			26,958			6,566			9,659			26		%	60		%
Occupancy (f)	22,503			20,451			15,887			13,619			12,800			10		%	76		%
Computer software	15,123			15,132			13,157			11,993			12,285			*			23		%
Contract employment and outsourcing (g)	5,907			4,053			5,979			2,762			3,255			46		%	81		%
Operations services	14,653			15,561			10,619			10,805			11,524			(6	)	%	27		%
Equipment rentals, depreciation, and maintenance	10,708			10,018			9,530			6,626			7,036			7		%	52		%
FDIC premium expense	9,978			8,614			9,090			6,062			5,927			16		%	68		%
Advertising and public relations	5,070			3,599			5,313			5,205			4,095			41		%	24		%
Communications and courier	7,530			8,232			5,379			4,328			4,117			(9	)	%	83		%
Amortization of intangible assets	6,460			6,474			3,568			1,964			1,964			*			NM
Other (b)	50,999			35,332			62,580			28,113			25,216			44		%	NM
Total noninterest expense	332,768			313,265			346,670			236,869			217,917			6		%	53		%
Income before income taxes	105,689			124,925			25,608			85,365			112,457			(15	)	%	(6	)	%
Provision for income taxes (h)	19,697			29,931			73,989			13,596			17,253			(34	)	%	14		%
Net income/(loss)	85,992			94,994			(48,381		)	71,769			95,204			(9	)	%	(10	)	%
Net income attributable to noncontrolling interest	2,852			2,820			2,910			2,883			2,852			1		%	*
Net income/(loss) attributable to controlling interest	83,140			92,174			(51,291		)	68,886			92,352			(10	)	%	(10	)	%
Preferred stock dividends	1,550			1,550			1,550			1,550			1,550			*			*
Net income/(loss) available to common shareholders	$	81,590		$	90,624		$	(52,841	)	$	67,336		$	90,802		(10	)	%	(10	)	%
Common Stock Data
EPS	$	0.25		$	0.28		$	(0.20	)	$	0.29		$	0.39		(11	)	%	(36	)	%
Basic shares (thousands)	325,153			326,489			265,169			233,749			233,482			*			39		%
Diluted EPS	$	0.25		$	0.27		$	(0.20	)	$	0.28		$	0.38		(7	)	%	(34	)	%
Diluted shares (thousands)	328,426			330,344			265,169			236,340			236,263			(1	)	%	39		%
Key Ratios & Other
Return on average assets (annualized) (i)	0.86		%	0.95		%	(0.58		)%	0.99		%	1.32		%
Return on average common equity (“ROE”) (annualized) (i)	7.86		%	8.79		%	(6.73		)%	10.79		%	15.26		%
Return on average tangible common equity (“ROTCE”) (annualized) (i) (j)	12.63		%	14.06		%	(8.78		)%	12.17		%	17.30		%
Fee income to total revenue (i)	29.08		%	31.10		%	35.47		%	34.89		%	38.80		%
Efficiency ratio (i)	75.90		%	71.67		%	92.41		%	73.51		%	66.44		%
Average full time equivalent employees	5,873			5,835			4,792			4,277			4,328

NM - Not meaningful

* Amount is less than one percent.

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

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

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

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

(e) 2Q18, 1Q18 and 4Q17 include $8.7 million, $5.4 million and $20.3 million, respectively of acquisition- and integration-related expenses associated with the CBF acquisition; 3Q17 and 2Q17 include $3.0 million and $4.9 million, respectively, acquisition- and integration-related expenses primarily associated with the CBF and Coastal acquisitions.

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

(g) 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.

(h) 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; 1Q18 includes $1.6 million of unfavorable discrete tax adjustments related to CBF purchase accounting adjustments; 4Q17 increase primarily associated with the effects of the Tax Cuts and Jobs Act ("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.

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

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

Other Income
ATM and interchange fees	$	3,413	$	3,267	$	3,427	$	3,137		$	3,083	4		%	11		%
Dividend income (b)	3,124		2,249		—		—			—		39		%	NM
Electronic banking fees	1,228		1,204		1,171		1,282			1,306		2		%	(6	)	%
Letter of credit fees	1,295		1,249		1,292		1,211			1,122		4		%	15		%
Mortgage banking	2,254		1,770		766		1,354			1,268		27		%	78		%
Deferred compensation (c)	991		451		1,876		1,128			1,491		NM			(34	)	%
Insurance commissions	476		757		472		567			592		(37	)	%	(20	)	%
Other service charges	3,905		5,124		3,485		2,954			3,109		(24	)	%	26		%
Gain/(loss) on extinguishment of debt (d)	—		—		—		(14,329		)	—		NM			NM
Other (e)	2,748		7,172		3,345		2,739			2,646		(62	)	%	4		%
Total	$	19,434	$	23,243	$	15,834	$	43		$	14,617	(16	)	%	33		%

Other Expense
Litigation and regulatory matters	$	16	$	2,134	$	32,114	$	8,162		$	533	(99	)	%	(97	)	%
Tax credit investments	1,079		1,137		822		762			942		(5	)	%	15		%
Travel and entertainment (f)	5,131		2,983		3,154		2,798			3,162		72		%	62		%
Employee training and dues	1,849		1,779		1,357		1,198			1,453		4		%	27		%
Customer relations	1,358		1,063		1,510		1,361			1,543		28		%	(12	)	%
Miscellaneous loan costs	1,035		1,142		673		757			699		(9	)	%	48		%
Supplies	1,987		1,836		1,222		928			1,093		8		%	82		%
OREO	810		108		53		303			446		NM			82		%
Other insurance and taxes	2,752		2,665		2,457		2,396			2,443		3		%	13		%
Non-service components of net periodic pension and post retirement cost (g)	1,530		504		363		454			851		NM			80		%
Other (h)	33,452		19,981		18,855		8,994			12,051		67		%	NM
Total	$	50,999	$	35,332	$	62,580	$	28,113		$	25,216	44		%	NM

NM - Not meaningful


(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)	1Q18 includes a $3.3 million gain on the sale of a building.


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


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

(h)

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



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

Assets:
Investment securities (a)	$	4,734,411		$	4,836,155		$	5,180,255		$	3,973,138		$	3,959,592		(2	)	%	20		%
Loans held-for-sale (b)	692,659			770,412			699,377			339,780			432,771			(10	)	%	60		%
Loans, net of unearned income	27,701,740			27,249,793			27,658,929			20,166,091			19,989,319			2		%	39		%
Federal funds sold	91,303			62,541			87,364			76,316			34,036			46		%	NM
Securities purchased under agreements to resell	782,765			910,670			725,609			663,637			657,991			(14	)	%	19		%
Interest-bearing cash (c)	750,634			309,351			1,185,600			604,326			573,666			NM			31		%
Trading securities	1,649,470			1,759,430			1,416,345			1,469,402			1,315,891			(6	)	%	25		%
Total earning assets	36,402,982			35,898,352			36,953,479			27,292,690			26,963,266			1		%	35		%
Cash and due from banks	602,952			459,820			639,073			347,802			387,053			31		%	56		%
Fixed income receivables (d)	68,148			94,036			68,693			68,750			127,724			(28	)	%	(47	)	%
Goodwill (e)	1,409,276			1,398,501			1,386,853			236,335			236,335			1		%	NM
Other intangible assets, net (e)	167,955			174,415			184,389			43,157			45,121			(4	)	%	NM
Premises and equipment, net	525,175			531,981			532,251			293,393			292,463			(1	)	%	80		%
Other real estate owned ("OREO")	29,712			35,715			43,382			12,522			11,901			(17	)	%	NM
Allowance for loan losses	(185,462		)	(187,194		)	(189,555		)	(194,867		)	(197,257		)	(1	)	%	(6	)	%
Derivative assets	122,056			114,348			81,634			80,976			91,653			7		%	33		%
Other assets (a)	1,934,001			1,943,221			1,723,189			1,441,878			1,411,697			*			37		%
Total assets	$	41,076,795		$	40,463,195		$	41,423,388		$	29,622,636		$	29,369,956		2		%	40		%

Liabilities and Equity:
Deposits:
Consumer interest	$	12,780,195		$	12,674,251		$	12,877,955		$	9,164,017		$	9,429,788		1		%	36		%
Commercial interest	5,547,510			5,816,992			5,469,868			2,915,446			3,285,931			(5	)	%	69		%
Market-indexed (f)	4,412,272			4,346,862			4,249,536			3,534,546			3,315,045			2		%	33		%
Total interest-bearing deposits	22,739,977			22,838,105			22,597,359			15,614,009			16,030,764			*			42		%
Noninterest-bearing deposits	8,237,890			7,980,846			8,023,003			6,485,245			6,302,585			3		%	31		%
Total deposits	30,977,867			30,818,951			30,620,362			22,099,254			22,333,349			1		%	39		%
Federal funds purchased	351,655			392,714			399,820			292,650			314,892			(10	)	%	12		%
Securities sold under agreements to repurchase	713,152			672,154			656,602			516,867			743,684			6		%	(4	)	%
Trading liabilities	743,721			827,362			638,515			579,028			555,793			(10	)	%	34		%
Other short-term borrowings (g)	1,836,852			1,332,141			2,626,213			1,637,419			1,044,658			38		%	76		%
Term borrowings (e)	1,227,281			1,214,967			1,218,097			1,059,507			1,033,329			1		%	19		%
Fixed income payables (d)	14,739			6,167			48,996			44,304			28,571			NM			(48	)	%
Derivative liabilities	135,349			121,394			85,061			83,146			92,717			11		%	46		%
Other liabilities	526,430			504,817			549,234			426,910			396,075			4		%	33		%
Total liabilities	36,527,046			35,890,667			36,842,900			26,739,085			26,543,068			2		%	38		%
Equity:
Common stock	203,127			204,496			204,211			146,395			146,336			(1	)	%	39		%
Capital surplus	3,113,612			3,155,407			3,147,613			1,401,359			1,395,797			(1	)	%	NM
Undivided profits	1,254,069			1,211,655			1,160,434			1,177,126			1,131,162			4		%	11		%
Accumulated other comprehensive loss, net (h)	(412,114		)	(390,085		)	(322,825		)	(232,384		)	(237,462		)	6		%	74		%
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	4,549,749			4,572,528			4,580,488			2,883,551			2,826,888			*			61		%
Total liabilities and equity	$	41,076,795		$	40,463,195		$	41,423,388		$	29,622,636		$	29,369,956		2		%	40		%

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) 2Q18 decrease driven by the sales of approximately $120 million UPB of loans; 2Q18 includes $579.5 million of SBA and USDA loans, $83.0 million of mortgage loans, and $30.2 million of other consumer loans; 4Q17 increase driven by increases in SBA and USDA loans and loans acquired from CBF that were classified as held-for-sale.

(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) 2Q18 and 1Q18 increases primarily driven by an increase in unrealized losses on AFS securities.

(i) Consists of preferred stock of subsidiaries.

FHN CONSOLIDATED AVERAGE BALANCE SHEET

Quarterly, Unaudited



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

Assets:
Earning assets:
Loans, net of unearned income:
Commercial, financial, and industrial (C&I)	$	15,958,162		$	15,535,621		$	13,756,024		$	12,474,188		$	11,830,942		3		%	35		%
Commercial real estate	4,198,275			4,230,217			2,892,949			2,211,831			2,175,733			(1	)	%	93		%
Consumer real estate	6,217,618			6,302,365			5,029,588			4,398,550			4,431,591			(1	)	%	40		%
Permanent mortgage	369,144			389,732			400,991			405,287			408,202			(5	)	%	(10	)	%
Credit card and other	555,588			594,130			439,057			354,807			355,123			(6	)	%	56		%
Total loans, net of unearned income (b)	27,298,787			27,052,065			22,518,609			19,844,663			19,201,591			1		%	42		%
Loans held-for-sale (c)	727,212			726,978			504,577			540,121			320,698			*			NM
Investment securities:
U.S. treasuries	98			98			99			109			100			*			(2	)	%
U.S. government agencies	4,705,893			4,792,709			4,042,844			3,762,180			3,755,818			(2	)	%	25		%
States and municipalities	1,621			51			182			—			—			NM			NM
Corporate bonds	65,719			65,634			29,904			10,000			10,000			*			NM
Other (d)	4,114			5,153			203,395			188,361			188,229			(20	)	%	(98	)	%
Total investment securities	4,777,445			4,863,645			4,276,424			3,960,650			3,954,147			(2	)	%	21		%
Trading securities	1,568,675			1,711,776			1,439,152			1,125,033			1,283,212			(8	)	%	22		%
Other earning assets:
Federal funds sold	35,165			27,797			24,980			29,852			36,936			27		%	(5	)	%
Securities purchased under agreements to resell	728,785			881,429			818,887			664,208			833,253			(17	)	%	(13	)	%
Interest-bearing cash (e)	447,461			482,060			459,868			392,274			970,853			(7	)	%	(54	)	%
Total other earning assets	1,211,411			1,391,286			1,303,735			1,086,334			1,841,042			(13	)	%	(34	)	%
Total earning assets	35,583,530			35,745,750			30,042,497			26,556,801			26,600,690			*			34		%
Allowance for loan losses	(187,253		)	(190,420		)	(194,859		)	(196,631		)	(200,534		)	(2	)	%	(7	)	%
Cash and due from banks	564,554			563,555			437,604			355,626			350,832			*			61		%
Fixed income receivables	51,346			61,757			79,162			54,286			64,779			(17	)	%	(21	)	%
Premises and equipment, net	532,259			537,359			367,196			293,286			291,769			(1	)	%	82		%
Derivative assets	99,212			79,292			68,692			74,453			74,974			25		%	32		%
Other assets (d)	3,530,064			3,553,431			2,305,962			1,737,006			1,693,840			(1	)	%	NM
Total assets	$	40,173,712		$	40,350,724		$	33,106,254		$	28,874,827		$	28,876,350		*			39		%

Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Consumer interest	$	12,581,023		$	12,586,843		$	10,279,937		$	9,244,021		$	9,330,990		*			35		%
Commercial interest	5,618,245			5,540,090			3,684,643			2,876,398			3,086,139			1		%	82		%
Market-indexed (f)	4,488,503			4,238,128			3,958,224			3,523,450			3,809,281			6		%	18		%
Total interest-bearing deposits	22,687,771			22,365,061			17,922,804			15,643,869			16,226,410			1		%	40		%
Federal funds purchased	368,321			464,300			425,900			376,150			435,854			(21	)	%	(15	)	%
Securities sold under agreements to repurchase	667,689			756,487			595,275			680,366			616,837			(12	)	%	8		%
Trading liabilities	666,092			822,815			741,063			597,269			762,667			(19	)	%	(13	)	%
Other short-term borrowings (g)	1,399,580			1,698,490			1,246,087			655,599			221,472			(18	)	%	NM
Term borrowings	1,220,494			1,219,916			1,121,268			1,112,735			1,034,020			*			18		%
Total interest-bearing liabilities	27,009,947			27,327,069			22,052,397			19,065,988			19,297,260			(1	)	%	40		%
Noninterest-bearing deposits	8,003,901			7,843,239			6,972,912			6,411,160			6,280,472			2		%	27		%
Fixed income payables	15,453			27,913			53,401			28,455			36,083			(45	)	%	(57	)	%
Derivative liabilities	103,130			72,157			65,843			80,916			85,119			43		%	21		%
Other liabilities	488,735			506,430			455,536			421,551			399,247			(3	)	%	22		%
Total liabilities	35,621,166			35,776,808			29,600,089			26,008,070			26,098,181			*			36		%
Equity:
Common stock	203,381			204,332			165,991			146,354			146,246			*			39		%
Capital surplus	3,121,578			3,151,931			1,993,908			1,397,883			1,392,718			(1	)	%	NM
Undivided profits	1,240,809			1,192,462			1,194,840			1,159,451			1,085,326			4		%	14		%
Accumulated other comprehensive loss, net (h)	(404,277		)	(365,864		)	(239,629		)	(227,986		)	(237,176		)	10		%	70		%
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	4,552,546			4,573,916			3,506,165			2,866,757			2,778,169			*			64		%
Total liabilities and equity	$	40,173,712		$	40,350,724		$	33,106,254		$	28,874,827		$	28,876,350		*			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) 2Q18 includes $546.1 million of SBA and USDA loans, $82.0 million of mortgage loans, and $99.1 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; 1Q17 level largely driven by an inflow of customer deposits; 3Q17 decrease due to loan growth and the Coastal 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) 2Q18 increase primarily driven by an increase in unrealized losses on AFS securities; 1Q18 increase reflects the early adoption of ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," and an increase in unrealized losses on AFS securities.

(i) Consists of preferred stock of subsidiaries.

FHN CONSOLIDATED NET INTEREST INCOME (a)

Quarterly, Unaudited



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

Interest Income:
Loans, net of unearned income (c)	$	326,069		$	301,411		$	242,950		$	207,845		$	195,162		8		%	67		%
Loans held-for-sale	11,228			12,144			6,601			6,123			3,510			(8	)	%	NM
Investment securities:
U.S. government agencies	31,692			31,870			25,911			23,844			24,122			(1	)	%	31		%
States and municipalities	13			—			3			—			—			NM			NM
Corporate bonds	720			745			355			131			132			(3	)	%	NM
Other (d)	342			363			2,015			1,731			1,535			(6	)	%	(78	)	%
Total investment securities	32,767			32,978			28,284			25,706			25,789			(1	)	%	27		%
Trading securities	14,967			14,537			11,285			8,604			9,846			3		%	52		%
Other earning assets:
Federal funds sold	207			145			113			131			146			43		%	42		%
Securities purchased under agreements to resell	2,944			2,503			1,652			1,476			1,442			18		%	NM
Interest-bearing cash	1,950			1,684			1,484			1,226			2,456			16		%	(21	)	%
Total other earning assets	5,101			4,332			3,249			2,833			4,044			18		%	26		%
Interest income	$	390,132		$	365,402		$	292,369		$	251,111		$	238,351		7		%	64		%

Interest Expense:
Interest-bearing deposits:
Consumer interest	$	14,153		$	7,534		$	4,977		$	5,032		$	5,448		88		%	NM
Commercial interest	14,737			12,127			7,220			4,970			4,797			22		%	NM
Market-indexed (e)	19,859			15,372			12,272			10,266			8,941			29		%	NM
Total interest-bearing deposits	48,749			35,033			24,469			20,268			19,186			39		%	NM
Federal funds purchased	1,640			1,738			1,387			1,173			1,106			(6	)	%	48		%
Securities sold under agreements to repurchase	1,997			1,901			1,175			1,815			1,081			5		%	85		%
Trading liabilities	4,790			5,124			4,186			3,298			4,203			(7	)	%	14		%
Other short-term borrowings	6,473			6,403			4,145			2,012			716			1		%	NM
Term borrowings	13,230			11,983			10,183			9,762			8,348			10		%	58		%
Interest expense	76,879			62,182			45,545			38,328			34,640			24		%	NM
Net interest income - tax equivalent basis	313,253			303,220			246,824			212,783			203,711			3		%	54		%
Fully taxable equivalent adjustment	(2,321		)	(2,047		)	(4,736		)	(2,966		)	(3,010		)	(13	)	%	23		%
Net interest income	$	310,932		$	301,173		$	242,088		$	209,817		$	200,701		3		%	55		%

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, where applicable, state income taxes.

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

(d) 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.

(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.

FHN CONSOLIDATED AVERAGE BALANCE SHEET: YIELDS AND RATES

Quarterly, Unaudited



	2Q18		1Q18		4Q17		3Q17		2Q17

Assets:
Earning assets (a)
Loans, net of unearned income (b)
Commercial loans	4.88	%	4.53	%	4.27	%	4.13	%	4.03	%
Consumer loans	4.52		4.48		4.33		4.23		4.21
Total loans, net of unearned income (c)	4.79		4.51		4.28		4.16		4.08
Loans held-for-sale	6.18		6.68		5.23		4.53		4.38
Investment securities:
U.S. government agencies	2.69		2.66		2.56		2.54		2.57
States and municipalities	3.12		3.37		7.04		—		—
Corporate bonds	4.38		4.54		4.74		5.25		5.25
Other (d)	32.48		27.65		3.96		3.67		3.26
Total investment securities	2.74		2.71		2.65		2.60		2.61
Trading securities	3.82		3.40		3.14		3.06		3.07
Other earning assets:
Federal funds sold	2.36		2.11		1.79		1.75		1.58
Securities purchased under agreements to resell	1.62		1.15		0.80		0.88		0.69
Interest-bearing cash	1.75		1.42		1.28		1.24		1.02
Total other earning assets	1.69		1.26		0.99		1.03		0.88
Interest income/total earning assets	4.39	%	4.13	%	3.87	%	3.76	%	3.59	%
Liabilities:
Interest-bearing liabilities:
Interest-bearing deposits:
Consumer interest	0.45	%	0.24	%	0.19	%	0.22	%	0.23	%
Commercial interest	1.05		0.89		0.78		0.69		0.62
Market-indexed (e)	1.77		1.47		1.23		1.16		0.94
Total interest-bearing deposits	0.86		0.64		0.54		0.51		0.47
Federal funds purchased	1.79		1.52		1.29		1.24		1.02
Securities sold under agreements to repurchase	1.20		1.02		0.78		1.06		0.70
Trading liabilities	2.88		2.53		2.24		2.19		2.21
Other short-term borrowings	1.86		1.53		1.32		1.22		1.30
Term borrowings (f)	4.34		3.93		3.63		3.51		3.23
Interest expense/total interest-bearing liabilities	1.14		0.92		0.82		0.80		0.72
Net interest spread	3.25	%	3.21	%	3.05	%	2.96	%	2.87	%
Effect of interest-free sources used to fund earning assets	0.28		0.22		0.22		0.23		0.20
Net interest margin	3.53	%	3.43	%	3.27	%	3.19	%	3.07	%

Total loan yield	4.79	%	4.51	%	4.28	%	4.16	%	4.08	%
Total deposit cost	0.64	%	0.47	%	0.39	%	0.36	%	0.34	%

Yields are adjusted to a FTE basis assuming a statutory federal income tax rate of 21 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) 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



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

Common equity tier 1 capital (a) (b)	$	3,002,958		$	2,991,223		$	2,962,155		$	2,477,210		$	2,418,578		*			24	%
Tier 1 capital (a) (b)	3,338,856			3,324,349			3,281,478			2,764,780			2,699,698			*			24	%
Total capital (a)	3,761,500			3,746,007			3,703,754			3,005,198			2,942,948			*			28	%

Risk-weighted assets (“RWA”) (a) (b)	33,555,300			33,293,821			33,373,877			24,678,030			24,566,487			1		%	37	%
Average assets for leverage (a) (b) (c)	39,003,208			39,127,510			31,824,751			28,793,816			28,793,889			*			35	%

Common equity tier 1 ratio (a) (b)	8.95		%	8.98		%	8.88		%	10.04		%	9.85		%
Tier 1 ratio (a) (b)	9.95		%	9.98		%	9.83		%	11.20		%	10.99		%
Total capital ratio (a)	11.21		%	11.25		%	11.10		%	12.18		%	11.98		%
Leverage ratio (a) (b) (d)	8.56		%	8.50		%	10.31		%	9.60		%	9.38		%

Total equity to total assets	11.08		%	11.30		%	11.06		%	9.73		%	9.63		%
Tangible common equity/tangible assets (“TCE/TA”) (e)	6.54		%	6.71		%	6.57		%	7.54		%	7.41		%
Period-end shares outstanding	325,003			327,194			326,736			234,231			234,135			(1	)	%	39	%
Cash dividends declared per common share	$	0.12		$	0.12		$	0.09		$	0.09		$	0.09		*			33	%
Book value per common share	$	12.80		$	12.78		$	12.82		$	10.64		$	10.40
Tangible book value per common share (e)	$	7.94		$	7.97		$	8.01		$	9.45		$	9.20
Market capitalization (millions)	$	5,798.1		$	6,161.1		$	6,531.5		$	4,485.5		$	4,078.6

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.

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

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

(e) 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



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

Regional Banking
Net interest income	$	308,870		$	298,699		$	244,021		$	208,975		$	201,658		3		%	53		%
Noninterest income	78,568			78,853			70,526			64,370			64,740			*			21		%
Total revenues	387,438			377,552			314,547			273,345			266,398			3		%	45		%
Provision for loan losses	6,139			5,312			9,737			8,552			260			16		%	NM
Noninterest expense (a)	212,445			205,201			178,605			150,445			152,637			4		%	39		%
Income before income taxes	168,854			167,039			126,205			114,348			113,501			1		%	49		%
Provision for income taxes	39,634			39,362			43,899			41,143			41,015			1		%	(3	)	%
Net income	$	129,220		$	127,677		$	82,306		$	73,205		$	72,486		1		%	78		%

Fixed Income
Net interest income	$	9,174		$	8,463		$	5,906		$	5,985		$	4,985		8		%	84		%
Noninterest income	38,363			45,605			55,250			55,803			55,207			(16	)	%	(31	)	%
Total revenues	47,537			54,068			61,156			61,788			60,192			(12	)	%	(21	)	%
Noninterest expense	48,300			50,544			55,151			53,136			54,022			(4	)	%	(11	)	%
Income/(loss) before income taxes	(763		)	3,524			6,005			8,652			6,170			NM			NM
Provision/(benefit) for income taxes	(414		)	742			1,971			2,970			1,941			NM			NM
Net income/(loss)	$	(349	)	$	2,782		$	4,034		$	5,682		$	4,229		NM			NM

Corporate
Net interest income/(expense)	$	(14,002	)	$	(13,190	)	$	(15,593	)	$	(13,646	)	$	(14,637	)	(6	)	%	4		%
Noninterest income (b)	8,848			9,479			6,711			(9,476		)	6,219			(7	)	%	42		%
Total revenues	(5,154		)	(3,711		)	(8,882		)	(23,122		)	(8,418		)	(39	)	%	39		%
Noninterest expense (c)	66,020			51,116			73,991			23,926			24,566			29		%	NM
Loss before income taxes	(71,174		)	(54,827		)	(82,873		)	(47,048		)	(32,984		)	(30	)	%	NM
Provision/ (benefit) for income taxes (d)	(21,691		)	(12,444		)	37,202			(34,120		)	(35,574		)	(74	)	%	39		%
Net income/(loss)	$	(49,483	)	$	(42,383	)	$	(120,075	)	$	(12,928	)	$	2,590		(17	)	%	NM

Non-Strategic
Net interest income	$	6,890		$	7,201		$	7,754		$	8,503		$	8,695		(4	)	%	(21	)	%
Noninterest income	1,746			2,080			703			1,720			1,507			(16	)	%	16		%
Total revenues	8,636			9,281			8,457			10,223			10,202			(7	)	%	(15	)	%
Provision/(provision credit) for loan losses	(6,139		)	(6,312		)	(6,737		)	(8,552		)	(2,260		)	3		%	NM
Noninterest expense (e)	6,003			6,404			38,923			9,362			(13,308		)	(6	)	%	NM
Income/(loss) before income taxes	8,772			9,189			(23,729		)	9,413			25,770			(5	)	%	(66	)	%
Provision/(benefit) for income taxes	2,168			2,271			(9,083		)	3,603			9,871			(5	)	%	(78	)	%
Net income/(loss)	$	6,604		$	6,918		$	(14,646	)	$	5,810		$	15,899		(5	)	%	(58	)	%

Total Consolidated
Net interest income	$	310,932		$	301,173		$	242,088		$	209,817		$	200,701		3		%	55		%
Noninterest income	127,525			136,017			133,190			112,417			127,673			(6	)	%	*
Total revenues	438,457			437,190			375,278			322,234			328,374			*			34		%
Provision/(provision credit) for loan losses	—			(1,000		)	3,000			—			(2,000		)	NM			NM
Noninterest expense	332,768			313,265			346,670			236,869			217,917			6		%	53		%
Income before income taxes	105,689			124,925			25,608			85,365			112,457			(15	)	%	(6	)	%
Provision for income taxes	19,697			29,931			73,989			13,596			17,253			(34	)	%	14		%
Net income/(loss)	$	85,992		$	94,994		$	(48,381	)	$	71,769		$	95,204		(9	)	%	(10	)	%

NM - Not meaningful

* Amount is less than one percent.


(a)	3Q17 includes $4.4 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)	2Q18, 1Q18 and 4Q17 include $43.2 million, $31.4 million and $46.7 million, respectively of acquisition- and integration-related expenses primarily associated with the CBF acquisition; 3Q17 and 2Q17 include $8.2 million and $6.4 million, respectively of acquisition- and integration-related expenses primarily associated with the CBF and Coastal acquisitions.

(d)

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; 1Q18 includes $1.6 million of unfavorable discrete tax adjustments related to CBF purchase accounting adjustments; 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)	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.

FHN REGIONAL BANKING

Quarterly, Unaudited



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

Income Statement (thousands)
Net interest income	$	308,870		$	298,699		$	244,021		$	208,975		$	201,658		3		%	53		%
Provision for loan losses	6,139			5,312			9,737			8,552			260			16		%	NM
Noninterest income:
NSF / Overdraft fees (a)	10,566			8,629			10,101			9,878			8,717			22		%	21		%
Cash management fees	9,210			9,285			9,396			8,923			9,641			(1	)	%	(4	)	%
Debit card income	8,394			8,410			3,685			3,635			3,655			*			NM
Other	6,351			8,416			5,694			4,185			4,421			(25	)	%	44		%
Total deposit transactions and cash management	34,521			34,740			28,876			26,621			26,434			(1	)	%	31		%
Brokerage, management fees and commissions	13,740			13,483			12,642			11,936			12,029			2		%	14		%
Trust services and investment management	8,147			7,292			7,131			6,968			7,713			12		%	6		%
Bankcard income	6,658			6,293			8,125			6,057			5,495			6		%	21		%
Other service charges	3,448			4,636			3,109			2,613			2,740			(26	)	%	26		%
Miscellaneous revenue (b)	12,054			12,409			10,643			10,175			10,329			(3	)	%	17		%
Total noninterest income	78,568			78,853			70,526			64,370			64,740			*			21		%
Noninterest expense:
Employee compensation, incentives, and benefits	89,503			89,406			74,561			59,337			61,561			*			45		%
Other (c)	122,942			115,795			104,044			91,108			91,076			6		%	35		%
Total noninterest expense	212,445			205,201			178,605			150,445			152,637			4		%	39		%
Income before income taxes	$	168,854		$	167,039		$	126,205		$	114,348		$	113,501		1		%	49		%
PPNR (d)	174,993			172,351			135,942			122,900			113,375			2		%	54		%
Efficiency ratio (e)	54.83		%	54.35		%	56.78		%	55.04		%	57.38		%

Balance Sheet (millions)
Average loans	$	26,046		$	25,748		$	21,147		$	18,402		$	17,679		1		%	47		%
Average other earning assets	150			190			86			44			50			(21	)	%	NM
Total average earning assets	26,196			25,938			21,233			18,446			17,729			1		%	48		%
Total average deposits	27,424			27,120			22,382			20,066			20,131			1		%	36		%
Total period-end deposits	27,861			27,653			27,538			20,076			20,416			1		%	36		%
Total period-end assets	29,225			28,668			29,035			19,600			19,333			2		%	51		%
Net interest margin (f)	4.76		%	4.70		%	4.64		%	4.55		%	4.62		%
Net interest spread	4.17			4.05			3.86			3.72			3.62
Loan average yield	4.67			4.41			4.15			4.00			3.88
Deposit average rate	0.50			0.36			0.29			0.28			0.26

Key Statistics
Financial center locations (g)	292			345			347			163			163			(15	)	%	79		%

NM - Not meaningful

* Amount is less than one percent


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


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


(c)	3Q17 includes $4.4 million of loss accruals related to legal matters.


(d)	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.


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


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


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

FHN FIXED INCOME

Quarterly, Unaudited



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

Income Statement (thousands)
Net interest income	$	9,174			$	8,463		$	5,906		$	5,985		$	4,985		8		%	84		%
Noninterest income:
Fixed income product revenue	29,940				38,047			40,608			45,020			45,555			(21	)	%	(34	)	%
Other	8,423				7,558			14,642			10,783			9,652			11		%	(13	)	%
Total noninterest income	38,363				45,605			55,250			55,803			55,207			(16	)	%	(31	)	%
Noninterest expense	48,300				50,544			55,151			53,136			54,022			(4	)	%	(11	)	%
Income/(loss) before income taxes	$	(763	)		$	3,524		$	6,005		$	8,652		$	6,170		NM			NM

Efficiency ratio (a)	NM				93.48		%	90.18		%	86.00		%	89.75		%
Fixed income product average daily revenue	$	468			$	624		$	655		$	715		$	723		(25	)	%	(35	)	%

Balance Sheet (millions)
Average trading inventory	$	1,566			$	1,710		$	1,437		$	1,122		$	1,281		(8	)	%	22		%
Average loans held-for-sale	539				487			363			443			220			11		%	NM
Average other earning assets	797				933			850			690			851			(15	)	%	(6	)	%
Total average earning assets	2,902				3,130			2,650			2,255			2,352			(7	)	%	23		%
Total period-end assets	3,464				3,655			2,989			2,751			2,745			(5	)	%	26		%
Net interest margin (b)	1.29			%	1.09		%	0.94		%	1.13		%	0.92		%

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, where

applicable, state income taxes.

FHN CORPORATE

Quarterly, Unaudited



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

Income Statement (thousands)
Net interest income/(expense)	$	(14,002	)	$	(13,190	)	$	(15,593	)	$	(13,646	)	$	(14,637	)	(6	)	%	4	%
Noninterest income excluding securities gains/(losses) (a)	8,816			9,393			6,574			(9,482		)	6,200			(6	)	%	42	%
Securities gains/(losses), net	32			86			137			6			19			(63	)	%	68	%
Noninterest expense (b)	66,020			51,116			73,991			23,926			24,566			29		%	NM
Loss before income taxes	$	(71,174	)	$	(54,827	)	$	(82,873	)	$	(47,048	)	$	(32,984	)	(30	)	%	NM

Average Balance Sheet (millions)
Average investment securities	$	4,773		$	4,859		$	4,273		$	3,959		$	3,950		(2	)	%	21	%
Total earning assets	$	5,257		$	5,382		$	4,792		$	4,408		$	4,983		(2	)	%	5	%

NM - Not Meaningful

(a) 2Q18 includes a $2.5 million gain related to BOLI policy gains; 1Q18 includes a $3.3 million gain on the sale of a building; 4Q17 includes a $1.3 million gain related to BOLI policy gains; 3Q17 includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction.

(b) 2Q18 includes $43.2 million of acquisition- and integration-related expenses primarily associated with the CBF acquisition and $4.1 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares; 1Q18 includes $31.4 million of acquisition- and integration-related expenses primarily associated with the CBF acquisition; 4Q17 includes $46.7 million of acquisition- and integration-related expenses primarily associated with the CBF acquisition 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- and integration-related expenses primarily associated with the CBF and Coastal acquisitions; 2Q17 includes $6.4 million of acquisition- and integration-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, Unaudited



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

Income Statement (thousands)
Net interest income	$	6,890			$	7,201			$	7,754			$	8,503			$	8,695			(4	)	%	(21	)	%
Provision/(provision credit) for loan losses	(6,139		)		(6,312		)		(6,737		)		(8,552		)		(2,260		)		3		%	NM
Noninterest income	1,746				2,080				703				1,720				1,507				(16	)	%	16		%
Noninterest expense (a)	6,003				6,404				38,923				9,362				(13,308		)		(6	)	%	NM
Income/(loss) before income taxes	$	8,772			$	9,189			$	(23,729	)		$	9,413			$	25,770			(5	)	%	(66	)	%

Average Balance Sheet (millions)
Loans	$	1,149			$	1,213			$	1,282			$	1,358			$	1,441			(5	)	%	(20	)	%
Other assets	69				71				73				73				81				(3	)	%	(15	)	%
Total assets	1,218				1,284				1,355				1,431				1,522				(5	)	%	(20	)	%
Net interest margin (b)	2.25			%	2.24			%	2.26			%	2.34			%	2.27			%
Efficiency ratio (c)	69.51			%	69.00			%	NM				91.58			%	NM

NM - Not meaningful

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

(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, where applicable, state income taxes.

FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited



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

Allowance for Loan Losses Walk-Forward
Beginning reserve	$	187,194			$	189,555			$	194,867			$	197,257			$	201,968			(1)%	(7)%
Provision/(provision credit) for loan losses	—				(1,000			)	3,000				—				(2,000			)	NM	NM
Charge-offs	(10,008			)	(8,483			)	(17,481			)	(10,670			)	(9,830			)	(18)%	(2)%
Recoveries	8,276				7,122				9,169				8,280				7,119				16%	16%
Ending balance	$	185,462			$	187,194			$	189,555			$	194,867			$	197,257			(1)%	(6)%
Reserve for unfunded commitments	6,536				4,613				5,079				4,372				5,554				42%	18%
Total allowance for loan losses plus reserve for unfunded commitments	$	191,998			$	191,807			$	194,634			$	199,239			$	202,811			*	(5)%

Allowance for Loan Losses
Regional Banking	$	156,473			$	155,873			$	154,111			$	156,021			$	153,208			*	2%
Non-Strategic	28,989				31,321				35,444				38,846				44,049				(7)%	(34)%
Total allowance for loan losses	$	185,462			$	187,194			$	189,555			$	194,867			$	197,257			(1)%	(6)%

Nonperforming Assets
Regional Banking
Nonperforming loans	$	51,092			$	57,767			$	52,659			$	40,610			$	43,012			(12)%	19%
OREO (a)	22,288				27,806				34,844				2,848				3,266				(20)%	NM
Total Regional Banking	$	73,380			$	85,573			$	87,503			$	43,458			$	46,278			(14)%	59%
Non-Strategic
Nonperforming loans	$	71,954			$	72,124			$	75,803			$	82,203			$	84,959			*	(15)%
Nonperforming loans held-for-sale after fair value adjustments	5,769				8,258				6,971				7,314				7,321				(30)%	(21)%
OREO (a)	4,168				4,569				4,722				5,029				3,772				(9)%	10%
Total Non-Strategic	$	81,891			$	84,951			$	87,496			$	94,546			$	96,052			(4)%	(15)%
Corporate
Nonperforming loans	$	1,746			$	2,140			$	2,157			$	2,173			$	1,819			(18)%	(4)%
Total nonperforming assets (a)	$	157,017			$	172,664			$	177,156			$	140,177			$	144,149			(9)%	9%

Net Charge-Offs
Regional Banking	$	5,539			$	3,550			$	11,647			$	5,739			$	3,020			56%	83%
Non-Strategic	(3,807			)	(2,189			)	(3,335			)	(3,349			)	(309			)	(74)%	NM
Total net charge-offs/(recoveries)	$	1,732			$	1,361			$	8,312			$	2,390			$	2,711			27%	(36)%

Consolidated Key Ratios (b) (c)
30+ Delinq. % (d)	0.31		%		0.29		%		0.33		%		0.38		%		0.27		%
NPL %	0.45				0.48				0.47				0.62				0.65
NPA %	0.55				0.60				0.61				0.66				0.68
Net charge-offs %	0.03				0.02				0.15				0.05				0.06
Allowance / loans % (e)	0.67				0.69				0.69				0.97				0.99
Allowance / NPL	1.49		x		1.42		x		1.45		x		1.56		x		1.52		x
Allowance / NPA	1.23		x		1.14		x		1.11		x		1.47		x		1.44		x
Allowance / net charge-offs	26.70		x		33.90		x		5.75		x		20.55		x		18.14		x

Other
Loans past due 90 days or more and still accruing (f)	$	44,467			$	52,700			$	48,047			$	41,025			$	37,809			(16)%	18%
Guaranteed portion (f)	8,412				9,076				9,454				10,046				15,276				(7)%	(45)%
Period-end loans, net of unearned income (millions)	27,702				27,250				27,659				20,166				19,989				2%	39%

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

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 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.

(f) Includes loans held-for-sale.

FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited



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

Key Portfolio Details
C&I
Period-end loans ($ millions)	$	16,439		$	15,828		$	16,057		$	12,792		$	12,598		4%	30%
30+ Delinq. % (a) (b)	0.14		%	0.16		%	0.19		%	0.27		%	0.03		%
NPL %	0.12			0.18			0.19			0.15			0.20
Charge-offs % (qtr. annualized)	0.06			0.01			0.28			0.10			0.04
Allowance / loans %	0.59		%	0.63		%	0.61		%	0.77		%	0.73		%
Allowance / net charge-offs	10.73		x	44.48		x	2.52		x	7.97		x	18.21		x

Commercial Real Estate
Period-end loans ($ millions)	$	4,136		$	4,234		$	4,215		$	2,251		$	2,212		(2)%	87%
30+ Delinq. % (a)	0.06		%	0.08		%	0.15		%	0.02		%	0.01		%
NPL %	0.03			0.02			0.03			0.07			0.07
Charge-offs % (qtr. annualized)	0.01			—			NM			NM			NM
Allowance / loans %	0.82		%	0.69		%	0.67		%	1.32		%	1.38		%
Allowance / net charge-offs	55.04		x	NM			NM			NM			NM

Consumer Real Estate
Period-end loans ($ millions)	$	6,223		$	6,247		$	6,368		$	4,370		$	4,417		*	41%
30+ Delinq. % (a)	0.68		%	0.57		%	0.65		%	0.74		%	0.81		%
NPL %	1.28			1.22			1.12			1.76			1.70
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	0.51		%	0.52		%	0.59		%	0.94		%	1.04		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Permanent Mortgage
Period-end loans ($ millions)	$	355		$	380		$	399		$	403		$	408		(7)%	(13)%
30+ Delinq. % (a)	1.92		%	2.63		%	1.85		%	1.51		%	2.57		%
NPL %	6.87			6.65			6.61			6.81			6.81
Charge-offs % (qtr. annualized)	NM			0.10			0.10			NM			0.35
Allowance / loans %	3.97		%	4.07		%	3.90		%	3.90		%	4.02		%
Allowance / net charge-offs	NM			40.18		x	37.67		x	NM			11.52		x

Credit Card and Other
Period-end loans ($ millions)	$	549		$	561		$	620		$	350		$	354		(2)%	55%
30+ Delinq. % (a)	1.80		%	0.98		%	1.24		%	0.89		%	0.92		%
NPL %	0.07			0.18			0.03			0.04			0.04
Charge-offs % (qtr. annualized)	2.61			2.15			2.30			2.80			2.71
Allowance / loans %	1.63		%	1.73		%	1.61		%	2.95		%	3.38		%
Allowance / net charge-offs	0.62		x	0.76		x	0.99		x	1.04		x	1.24		x

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

NM - Not meaningful

* Amount is less than one percent.

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

(b) 3Q17 increase in delinquencies driven by 2 larger relationships, one of which is a purchased credit-impaired loan.

FHN ASSET QUALITY: REGIONAL BANKING

Quarterly, Unaudited



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

Total Regional Banking
Period-end loans ($ millions)	$	26,543		$	26,020		$	26,359		$	18,788		$	18,529		2%	43%
30+ Delinq. % (a)	0.25		%	0.21		%	0.26		%	0.28		%	0.13		%
NPL %	0.19			0.22			0.20			0.22			0.23
Charge-offs % (qtr. annualized)	0.09			0.06			0.22			0.12			0.07
Allowance / loans %	0.59		%	0.60		%	0.58		%	0.83		%	0.83		%
Allowance / net charge-offs	7.04		x	10.82		x	3.34		x	6.85		x	12.65		x

Key Portfolio Details
C&I
Period-end loans ($ millions)	$	16,020		$	15,410		$	15,639		$	12,373		$	12,178		4%	32%
30+ Delinq. % (a) (b)	0.15		%	0.16		%	0.19		%	0.28		%	0.03		%
NPL %	0.10			0.16			0.18			0.13			0.17
Charge-offs % (qtr. annualized)	0.06			0.02			0.29			0.10			0.04
Allowance / loans %	0.60		%	0.64		%	0.62		%	0.78		%	0.75		%
Allowance / net charge-offs	10.57		x	43.61		x	2.48		x	7.83		x	17.85		x

Commercial Real Estate
Period-end loans ($ millions)	$	4,136		$	4,234		$	4,215		$	2,251		$	2,212		(2)%	87%
30+ Delinq. % (a)	0.06		%	0.08		%	0.15		%	0.02		%	0.01		%
NPL %	0.03			0.02			0.03			0.07			0.07
Charge-offs % (qtr. annualized)	0.01			—			NM			NM			NM
Allowance / loans %	0.82		%	0.69		%	0.67		%	1.32		%	1.38		%
Allowance / net charge-offs	55.04		x	NM			NM			NM			NM

Consumer Real Estate
Period-end loans ($ millions)	$	5,734		$	5,707		$	5,774		$	3,714		$	3,695		*	55%
30+ Delinq. % (a)	0.51		%	0.38		%	0.40		%	0.38		%	0.46		%
NPL %	0.57			0.53			0.39			0.61			0.54
Charge-offs % (qtr. annualized)	NM			NM			NM			0.04			NM
Allowance / loans %	0.27		%	0.27		%	0.28		%	0.46		%	0.48		%
Allowance / net charge-offs	NM			NM			NM			11.04		x	NM

Credit Card, Permanent Mortgage, and Other
Period-end loans ($ millions)	$	653		$	669		$	730		$	450		$	444		(2)%	47%
30+ Delinq. % (a)	1.62		%	0.88		%	1.10		%	0.85		%	0.81		%
NPL %	0.11			0.22			0.07			0.10			0.09
Charge-offs % (qtr. annualized)	2.20			1.93			1.83			2.19			2.21
Allowance / loans %	1.74		%	1.82		%	1.70		%	2.79		%	3.13		%
Allowance / net charge-offs	0.78		x	0.90		x	1.25		x	1.27		x	1.44		x

ASSET QUALITY: CORPORATE

Permanent Mortgage
Period-end loans ($ millions)	$	44		$	49		$	53		$	58		$	63		(10)%	(30)%
30+ Delinq. % (a)	3.32		%	5.51		%	3.98		%	4.22		%	6.52		%
NPL %	3.94			4.41			4.03			3.75			2.90
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) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.

(b) 3Q17 increase in delinquencies driven by 2 larger relationships, one of which is a purchased credit-impaired loan.

FHN ASSET QUALITY: NON-STRATEGIC

Quarterly, Unaudited



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

Total Non-Strategic
Period-end loans ($ millions)	$	1,115		$	1,181		$	1,247		$	1,320		$	1,397		(6)%	(20)%
30+ Delinq. % (a)	1.57		%	1.80		%	1.85		%	1.62		%	1.79		%
NPL %	6.45			6.10			6.08			6.23			6.08
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	2.60		%	2.65		%	2.84		%	2.94		%	3.15		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Key Portfolio Details
Commercial
Period-end loans ($ millions)	$	419		$	418		$	418		$	419		$	420		*	*
30+ Delinq. % (a)	—		%	—		%	—		%	—		%	—		%
NPL %	0.71			0.72			0.73			0.74			0.95
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	0.31		%	0.30		%	0.33		%	0.32		%	0.34		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Consumer Real Estate
Period-end loans ($ millions)	$	489		$	540		$	594		$	656		$	722		(9)%	(32)%
30+ Delinq. % (a)	2.63		%	2.64		%	3.06		%	2.80		%	2.62		%
NPL %	9.55			8.59			8.23			8.26			7.64
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	3.28		%	3.17		%	3.53		%	3.66		%	3.90		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Permanent Mortgage
Period-end loans ($ millions)	$	201		$	217		$	229		$	239		$	249		(7)%	(19)%
30+ Delinq. % (a)	2.28		%	3.16		%	2.12		%	1.20		%	2.38		%
NPL %	11.08			10.43			10.40			10.39			10.30
Charge-offs % (qtr. annualized)	NM			0.17			0.18			NM			0.56
Allowance / loans %	5.77		%	5.93		%	5.70		%	5.62		%	5.80		%
Allowance / net charge-offs	NM			33.55		x	31.54		x	NM			10.13		x

Other Consumer
Period-end loans ($ millions)	$	6		$	6		$	6		$	6		$	6		*	*
30+ Delinq. % (a)	1.31		%	1.61		%	0.95		%	1.44		%	1.95		%
NPL %	—			—			1.89			1.92			1.93
Charge-offs % (qtr. annualized)	NM			NM			1.90			1.14			NM
Allowance / loans %	1.11		%	1.28		%	1.36		%	0.69		%	0.35		%
Allowance / net charge-offs	NM			NM			0.71		x	0.60		x	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, Unaudited



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

Tangible Common Equity (Non-GAAP)
(A) Total equity (GAAP)	$	4,549,749		$	4,572,528		$	4,580,488			$	2,883,551		$	2,826,888
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	$	4,158,694		$	4,181,473		$	4,189,433			$	2,492,496		$	2,435,833
Less: Intangible assets (GAAP) (b)	1,577,231			1,572,916			1,571,242				279,492			281,456
(C) Tangible common equity (Non-GAAP)	$	2,581,463		$	2,608,557		$	2,618,191			$	2,213,004		$	2,154,377

Tangible Assets (Non-GAAP)
(D) Total assets (GAAP)	$	41,076,795		$	40,463,195		$	41,423,388			$	29,622,636		$	29,369,956
Less: Intangible assets (GAAP) (b)	1,577,231			1,572,916			1,571,242				279,492			281,456
(E) Tangible assets (Non-GAAP)	$	39,499,564		$	38,890,279		$	39,852,146			$	29,343,144		$	29,088,500

Average Tangible Common Equity (Non-GAAP)
(F) Average total equity (GAAP)	$	4,552,546		$	4,573,916		$	3,506,165			$	2,866,757		$	2,778,169
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	$	4,161,491		$	4,182,861		$	3,115,110			$	2,475,702		$	2,387,114
Less: Average intangible assets (GAAP) (b)	1,569,449			1,568,029			726,958				280,575			281,326
(H) Average tangible common equity (Non-GAAP)	$	2,592,042		$	2,614,832		$	2,388,152			$	2,195,127		$	2,105,788

Annualized Net Income/(loss) Available to Common Shareholders
(I) Net income /(loss) available to common shareholders (annualized) (GAAP)	$	327,257		$	367,531		$	(209,641	)		$	267,148		$	364,206

Period-end Shares Outstanding
(J) Period-end shares outstanding	325,003			327,194			326,736				234,231			234,135

Ratios
(I)/(G) Return on average common equity (“ROE”) (GAAP)	7.86		%	8.79		%	(6.73		)	%	10.79		%	15.26		%
(I)/(H) Return on average tangible common equity (“ROTCE”) (Non-GAAP)	12.63		%	14.06		%	(8.78		)	%	12.17		%	17.30		%
(A)/(D) Total equity to total assets (GAAP)	11.08		%	11.30		%	11.06			%	9.73		%	9.63		%
(C)/(E) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP)	6.54		%	6.71		%	6.57			%	7.54		%	7.41		%
(B)/(J) Book value per common share (GAAP)	$	12.80		$	12.78		$	12.82			$	10.64		$	10.40
(C)/(J) Tangible book value per common share (Non-GAAP)	$	7.94		$	7.97		$	8.01			$	9.45		$	9.20

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.

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