Loans | Note 4 – Loans The following table provides the balance of loans by portfolio segment as of December 31, 2014 and 2013: December 31 (Dollars in thousands) 2014 2013 Commercial: Commercial, financial, and industrial $ 9,007,286 $ 7,923,576 Commercial real estate 1,277,717 1,133,279 Retail: Consumer real estate (a) 5,048,071 5,333,371 Permanent mortgage (b) 538,961 662,242 Credit card & other 358,131 336,606 Loans, net of unearned income $ 16,230,166 $ 15,389,074 Allowance for loan losses 232,448 253,809 Total net loans $ 15,997,718 $ 15,135,265 Balances as of December 31, 2014 and 2013, include $ 76.8 million and $ 333.8 million of restricted and secured real estate loans, respectively. See Note 22 - Variable Interest Entities for additional information. Balance as of December 31, 201 3, includes $ 11.2 million of restricted and secured real estate loans. See Note 22 - Variable Interest Entities for additional information. C OMPONENTS OF THE LOAN PORTFOLIO T he loan portfolio is disaggregated into segments and then further disaggregated into classes for certain disclosures. GAAP defines a portfolio segment as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. A class is generally determined based on the initial measurement attribute (i.e., amortized cost or purchased credit - impaired), risk characteristics of the loan, and FHN ’s method for monitoring and as sessing credit risk. Commercial loan portfolio segments include commercial, financial and industrial (" C&I ") and commercial real estate (" CRE ") . Commercial classes within C&I include general C&I, loans to mortgage companies, the trust preferred loans (" TRU P S") (i.e. long-term unsecured loans to bank and insurance - related businesses) portfolio and PCI loans . Loans to mortgage companies includes commercial lines of credit to qualified mortgage companies primarily for the temporary warehousing of eligible mo rtgage loans prior to the borrower’s sale of those mortgage loans to third party investors. Commercial classes within commercial real estate include income CRE , residential CRE and PCI loans . Retail loan portfolio segments include consumer real estate, per manent mortgage, and the credit card and other portfolio. Retail classes include HELOC , real estate (" R/E ") installment and PCI loans within the consumer real estate segment, permanent mortgage (which is both a segment and a class), and credit card and oth er. Concentrations FHN has a concentration of residential real estate loans ( 34 percent of total loans), the majority of which is in the consumer real estate portfolio ( 31 percent of tot al loans). Loans to finance and insurance companies total $ 2.0 billion ( 22 percent of the C&I portfolio, or 12 percent of the total loans). FHN had loans to mortgage companies totaling $ 1.2 billion ( 13 percent of the C&I portfolio, or 7 percent of total loans) as of December 31 , 2014 . As a result, 35 percent of the C& I category was sensitive to impacts on the financial services industry. Restrictions On December 31, 2014, $ 6.1 billion of commercial loans were pledged to secure potential discount window borrowings from the Federal Reserve Bank. Additionally, as of Dec ember 31, 2014 , FHN pledged all of its held-to-maturity first and second lien mortgages and HELOCs, excluding restricted real estate loans and secured borrowings, to secure potential borrowings from the FHLB-Cincinnati. Restricted and secured borrowings lo ans secure borrowings associated with both consolidated and nonconsolidated VIEs. See Note 22 – Variable Interest Entities for additional discussion. Loan Sales In third quarter 2014, FHN executed the sale of certain loans held-for-sale, see Note 25 – Fair Value of Assets & Liabilities for further detail. Acquisition On June 7, 2013, FHN acquired substantially all of the assets and liabilities of MNB from the FDIC. The acquisition included approximately $249 million of loans. These loans were initially recorded at fair value which incorporates expected credit losses, among other things, in accordance with ASC 805 resulting in no carryover of ALLL from the acquiree . At acquisition, FHN designated certain loans as PCI (see discussion below) with the remaining loans accounted for under ASC 310-20, "Nonrefundable Fees and Other Costs". For loans accounted for under ASC 310-20, the difference between the loans' book value to MNB and the estimated fair value at the time of the acquisition will b e accreted back into interest income over the remaining contractual life and the subsequent accounting and reporting will be similar to FHN's originated loan portfolio. The following table presents a rollforward of the accretable yield for the years ended December 31, 2014 and 2013: Years Ended December 31 (Dollars in thousands) 2014 2013 Balance, beginning of period $ 13,490 $ - Additions 495 6,650 Accretion (7,090) (2,234) Adjustment for payoffs (1,575) (104) Adjustment for charge-offs (79) (4) Increase in accretable yield (a) 9,473 9,182 Balance, end of period $ 14,714 $ 13,490 Includes changes in the accretable yield due to both transfers from the nonaccretable difference and the impact of changes in the expected timing of the cash flows. At December 31, 2014, the ALLL related to PCI loans was $3.2 million compared to $.8 million in 2013. Net charge-offs recognized during 2014 were $.1 million, compared to $.4 million in 2013. The loan loss provision incurred during 2014 and 2013 was $3.3 million and $1.2 million, respectively. The following table reflects the outstanding principal balance and carrying amounts of the PCI loans as of December 31, 2014 and 2013: December 31, 2014 December 31, 2013 (Dollars in thousands) Carrying value Unpaid balance Carrying value Unpaid balance Commercial, financial and industrial $ 5,044 $ 5,813 $ 7,077 $ 9,169 Commercial real estate 32,553 43,246 38,042 53,648 Consumer real estate 598 868 878 1,291 Credit card and other 10 14 12 21 Total $ 38,205 $ 49,941 $ 46,009 $ 64,129 Impaired Loans The following tables provide information at December 31, 2014 and 2013, by class related to individually impaired loans and consumer TDR's. Recorded investment is defined as the amount of the investment in a loan, before valuation allowance but which does reflect any direct write-down of the investment. For purposes of this disclosure, PCI loans and LOCOM have been excluded. 2014 Unpaid Average Interest Recorded Principal Related Recorded Income (Dollars in thousands) Investment Balance Allowance Investment Recognized Impaired loans with no related allowance recorded: Commercial: General C&I $ 9,558 $ 10,851 $ - $ 15,826 $ - TRUPS - - - 813 - Income CRE 8,528 16,242 - 7,671 - Residential CRE 1,148 1,827 - 718 - Total $ 19,234 $ 28,920 $ - $ 25,028 $ - Retail: HELOC (a) $ 13,379 $ 32,471 $ - $ 15,670 $ - R/E installment loans (a) 4,819 6,247 - 7,855 - Permanent mortgage (a) 7,258 9,374 - 7,798 - Total $ 25,456 $ 48,092 $ - $ 31,323 $ - Impaired loans with related allowance recorded: Commercial: General C&I $ 13,295 $ 17,644 $ 863 $ 23,382 $ 310 TRUPS 13,460 13,700 4,310 13,524 - Income CRE 8,384 9,756 650 9,944 286 Residential CRE 1,370 5,331 146 5,553 190 Total $ 36,509 $ 46,431 $ 5,969 $ 52,403 $ 786 Retail: HELOC $ 84,169 $ 86,252 $ 18,942 $ 77,306 $ 1,799 R/E installment loans 70,858 72,094 21,836 73,374 1,198 Permanent mortgage 106,201 119,421 16,627 111,528 2,823 Credit card & other 533 533 254 596 26 Total $ 261,761 $ 278,300 $ 57,659 $ 262,804 $ 5,846 Total commercial $ 55,743 $ 75,351 $ 5,969 $ 77,431 $ 786 Total retail $ 287,217 $ 326,392 $ 57,659 $ 294,127 $ 5,846 Total impaired loans $ 342,960 $ 401,743 $ 63,628 $ 371,558 $ 6,632 All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance. 2013 Unpaid Average Interest Recorded Principal Related Recorded Income (Dollars in thousands) Investment Balance Allowance Investment Recognized Impaired loans with no related allowance recorded: Commercial: General C&I $ 26,626 $ 28,089 $ - $ 46,486 $ 108 TRUPS 6,500 6,500 - 9,563 - Income CRE 8,524 16,552 - 21,304 168 Residential CRE - - - 8,145 122 Total $ 41,650 $ 51,141 $ - $ 85,498 $ 398 Retail: HELOC (a) $ 16,825 $ 38,624 $ - $ 19,418 $ - R/E installment loans (a) 11,009 14,062 - 11,955 - Permanent mortgage (a) 8,460 11,943 - 8,835 - Total $ 36,294 $ 64,629 $ - $ 40,208 $ - Impaired loans with related allowance recorded: Commercial: General C&I $ 16,741 $ 23,016 $ 1,548 $ 18,291 $ 185 TRUPS 33,610 33,610 12,747 37,791 - Income CRE 12,374 14,094 810 5,725 201 Residential CRE 6,914 12,249 790 3,148 153 Total $ 69,639 $ 82,969 $ 15,895 $ 64,955 $ 539 Retail: HELOC $ 70,297 $ 71,692 $ 16,506 $ 66,154 $ 1,821 R/E installment loans 72,291 73,230 27,667 72,408 1,340 Permanent mortgage 112,998 125,666 17,042 112,356 2,990 Credit card & other 545 545 224 698 29 Total $ 256,131 $ 271,133 $ 61,439 $ 251,616 $ 6,180 Total commercial $ 111,289 $ 134,110 $ 15,895 $ 150,453 $ 937 Total retail $ 292,425 $ 335,762 $ 61,439 $ 291,824 $ 6,180 Total impaired loans $ 403,714 $ 469,872 $ 77,334 $ 442,277 $ 7,117 All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance. Asset Quality Indicators FHN employs a dual grade commercial risk grading methodology to assign an estimate for the probability of default (" PD ") and the loss given default (" LGD ") for each commercial loan using factors specific to various industry, portfolio, or product segments that result in a rank ordering of risk and the assignment of grades PD 1 to PD 16. Each PD grade corresponds to an estimated one-year default probability percentage; a PD 1 has the lowest expected default probability, and probabilities increase as grades progress down the scale. PD 1 through PD 12 are “pass” grades. P D grades 13-16 correspond to the regulatory-defined categories of special mention (13), substandard (14), doubtful (15), and loss (16). Pass loan grades are required to be reassessed annually or earlier whenever there has been a material change in the financial condition of the borrower or risk characteristics of the relationship. All commercial loans over $ 1 million and certain commercial loans over $ 500,000 that are graded 13 or worse are reassessed on a quarterly basis. LGD grades are assigned based on a scale of 1-12 and represent FHN’s expected recovery based on collateral type in the event a loan default s . See Note 5 - Allowance for Loan Losses for further discussion on the credit grading system . The following tables provide the balances of commercial loan portfolio classes with associated allowance, disaggregated by PD grade as of December 31, 2014 and 2013. December 31, 2014 Loans to Allowance General Mortgage Income Residential Percentage for Loan (Dollars in thousands) C&I Companies TRUPS (a) CRE CRE Total of Total Losses PD Grade: 1 $ 450,465 $ - $ - $ 136 $ 60 $ 450,661 4 % $ 70 2 434,945 - - 1,344 236 436,525 4 130 3 566,364 134,230 - 73,812 230 774,636 8 201 4 589,341 202,287 - 45,084 232 836,944 8 408 5 821,012 247,058 - 216,628 3,835 1,288,533 13 2,372 6 1,162,551 314,671 - 175,007 5,218 1,657,447 16 5,286 7 1,325,968 157,410 - 224,226 6,669 1,714,273 17 8,517 8 699,334 42,730 - 200,463 7,664 950,191 9 9,307 9 531,979 58,997 - 117,782 834 709,592 7 8,901 10 244,574 5,635 - 38,253 739 289,201 3 4,806 11 287,940 - - 31,712 938 320,590 3 6,887 12 117,431 - - 29,453 1,038 147,922 1 4,622 13 87,840 - 325,882 6,116 1,166 421,004 4 3,590 14,15,16 157,868 - - 29,579 4,204 191,651 2 21,411 Collectively evaluated for impairment 7,477,612 1,163,018 325,882 1,189,595 33,063 10,189,170 99 76,508 Individually evaluated for impairment 22,853 - 12,845 16,912 2,518 55,128 1 5,969 Purchased credit-impaired loans 5,076 - - 33,914 1,715 40,705 - 3,108 Total commercial loans $ 7,505,541 $ 1,163,018 $ 338,727 $ 1,240,421 $ 37,296 $ 10,285,003 100 % $ 85,585 December 31, 2013 Loans to Allowance General Mortgage Income Residential Percent of for Loan (Dollars in thousands) C&I Companies TRUPS (a) CRE CRE Total Total Losses PD Grade: 1 $ 239,141 $ - $ - $ - $ - $ 239,141 3 % $ 85 2 216,173 - - 3,363 - 219,536 2 80 3 224,224 - - 739 83 225,046 2 206 4 321,423 - - 13,005 213 334,641 4 410 5 821,158 - - 42,420 225 863,803 10 1,331 6 876,982 96,287 - 229,098 9,989 1,212,356 13 1,643 7 1,135,378 172,236 - 216,744 6,527 1,530,885 17 2,578 8 953,398 295,436 - 218,619 136 1,467,589 16 4,426 9 683,223 167,533 - 111,260 953 962,969 11 8,381 10 402,532 48,802 - 64,893 1,850 518,077 6 7,276 11 387,907 10,169 - 29,774 1,637 429,487 5 9,687 12 129,741 - - 32,796 4,333 166,870 2 2,488 13 163,458 - 331,940 16,666 2,886 514,950 6 9,047 14,15,16 154,860 146 4,103 52,879 5,551 217,539 2 32,712 Collectively evaluated for impairment 6,709,598 790,609 336,043 1,032,256 34,383 8,902,889 99 80,350 Individually evaluated for impairment 43,367 - 36,864 20,898 6,914 108,043 1 15,895 Total commercial loans (b) $ 6,752,965 $ 790,609 $ 372,907 $ 1,053,154 $ 41,297 $ 9,010,932 100 % $ 96,245 Balances as of December 31 , 2014 and 2013 , presented net of $ 26.2 million and $ 29.4 million, respectively, in lower of cost or market (“LOCOM”) valuation allowance. Based on the underlying structure of the notes, the highest possible internal grade is " 13 ". December 31 , 2013 table excludes PCI loans amounting to $45.9 million ($.8 million of allowance) . The retail portfolio is comprised primarily of smaller-balance loans which are very similar in nature in that most are standard products and are backed by residential real estate. Because of the similarities of retail loan-types, FHN is able to utilize the Fair Isaac Corporation (“FICO”) score, among other attributes, to assess the quality of consumer borrowers. FICO scores are refreshed on a quarterly basis in an attempt to reflec t the recent risk profile of the borrowers. Accruing delinquency amounts are indicators of asset quality within the credit card and other retail portfolio. The following tables reflect period end balances and average FICO scores by origination vintage for the HELOC, real estate installment, and permanent mortgage classes of loans as of December 31, 2014 and 2013: HELOC December 31, 2014 December 31, 2013 Average Average Average Average (Dollars in thousands) Period End Origination Refreshed Period End Origination Refreshed Origination Vintage Balance FICO FICO Balance FICO FICO pre-2003 $ 56,335 708 701 $ 79,550 711 701 2003 102,073 721 710 141,215 725 711 2004 282,580 723 709 395,323 727 716 2005 451,757 731 722 531,839 732 720 2006 337,440 740 727 383,366 740 726 2007 357,290 744 729 406,299 744 728 2008 194,710 753 747 223,110 753 747 2009 101,594 751 743 115,863 750 744 2010 98,214 753 749 114,393 753 749 2011 96,982 759 753 112,595 758 753 2012 119,333 760 758 138,373 759 760 2013 151,005 758 760 164,665 759 762 2014 120,025 762 762 - - - Total $ 2,469,338 741 732 $ 2,806,591 740 730 R/E Installment Loans December 31, 2014 December 31, 2013 Average Average Average Average (Dollars in thousands) Period End Origination Refreshed Period End Origination Refreshed Origination Vintage Balance FICO FICO Balance FICO FICO pre-2003 $ 13,909 678 684 $ 23,827 681 683 2003 49,706 714 724 74,451 716 725 2004 41,414 699 695 54,240 701 700 2005 123,130 715 712 161,205 717 711 2006 134,055 713 702 173,994 715 701 2007 199,473 723 709 249,198 725 709 2008 64,244 720 714 85,192 723 720 2009 28,762 736 725 38,842 742 737 2010 101,310 747 752 125,094 748 755 2011 278,795 760 759 335,343 760 760 2012 608,684 764 766 690,461 764 764 2013 475,272 756 759 514,933 757 754 2014 459,979 756 752 - - - Total $ 2,578,733 748 747 $ 2,526,780 746 742 Permanent Mortgage December 31, 2014 December 31, 2013 Average Average Average Average (Dollars in thousands) Period End Origination Refreshed Period End Origination Refreshed Origination Vintage Balance FICO FICO Balance FICO FICO pre-2004 $ 150,217 723 721 $ 194,369 725 725 2004 17,349 712 712 22,720 713 694 2005 34,033 736 740 40,272 737 712 2006 62,053 731 724 79,367 730 711 2007 188,868 733 717 223,440 734 710 2008 86,441 741 709 102,074 741 714 Total $ 538,961 730 717 $ 662,242 731 714 Nonaccrual and Past Due Loans The following table reflects accruing and non-accruing loans by class on December 31, 2014: Accruing Non-Accruing 30-89 90+ 30-89 90+ Total Days Days Total Days Days Non- Total (Dollars in thousands) Current Past Due Past Due Accruing Current Past Due Past Due Accruing Loans Commercial (C&I): General C&I $ 7,477,410 $ 3,196 $ 218 $ $7,480,824 $ 636 $ 1,726 $ 17,279 $ $19,641 $ $7,500,465 Loans to mortgage companies 1,162,894 - - 1,162,894 - - 124 124 1,163,018 TRUPS (a) 325,882 - - 325,882 - - 12,845 12,845 338,727 Purchased credit-impaired loans 4,180 344 552 5,076 - - - - 5,076 Total commercial (C&I) 8,970,366 3,540 770 8,974,676 636 1,726 30,248 32,610 9,007,286 Commercial real estate: Income CRE 1,190,562 1,446 - 1,192,008 1,495 1,963 11,041 14,499 1,206,507 Residential CRE 34,541 183 - 34,724 - - 857 857 35,581 Purchased credit-impaired loans 35,511 3 115 35,629 - - - - 35,629 Total commercial real estate 1,260,614 1,632 115 1,262,361 1,495 1,963 11,898 15,356 1,277,717 Consumer real estate: HELOC 2,347,361 26,738 11,093 2,385,192 66,410 6,628 11,108 84,146 2,469,338 R/E installment loans 2,524,019 11,951 5,602 2,541,572 27,330 3,268 5,888 36,486 2,578,058 Purchased credit-impaired loans 675 - - 675 - - - - 675 Total consumer real estate 4,872,055 38,689 16,695 4,927,439 93,740 9,896 16,996 120,632 5,048,071 Permanent mortgage 495,619 3,624 5,640 504,883 16,681 2,382 15,015 34,078 538,961 Credit card & other Credit card 185,015 1,909 1,822 188,746 - - - - 188,746 Other 167,272 1,137 203 168,612 - - 763 763 169,375 Purchased credit-impaired loans 10 - - 10 - - - - 10 Total credit card & other 352,297 3,046 2,025 357,368 - - 763 763 358,131 Total loans, net of unearned $ 15,950,951 $ 50,531 $ $25,245 $ $16,026,727 $112,552 $ 15,967 $ $74,920 $ $203,439 $ $16,230,166 Total TRUPS i nclude s LOCOM valuation allowance of $ 26.2 million. The following table reflects accruing and non-accruing loans by class on December 31, 2013: Accruing Non-Accruing 30-89 90+ 30-89 90+ Total Days Days Total Days Days Non- Total (Dollars in thousands) Current Past Due Past Due Accruing Current Past Due Past Due Accruing Loans Commercial (C&I): General C&I $ 6,701,185 $ 8,606 $ 425 $ 6,710,216 $ 19,039 $ 3,668 $ 20,042 $ 42,749 $ 6,752,965 Loans to mortgage companies 790,463 - - 790,463 - - 146 146 790,609 TRUPS (a) 336,043 - - 336,043 - - 36,864 36,864 372,907 Purchased credit-impaired loans 5,710 - 1,385 7,095 - - - - 7,095 Total commercial (C&I) 7,833,401 8,606 1,810 7,843,817 19,039 3,668 57,052 79,759 7,923,576 Commercial real estate: Income CRE 1,030,910 5,822 - 1,036,732 4,339 395 11,688 16,422 1,053,154 Residential CRE 39,295 323 - 39,618 130 - 1,549 1,679 41,297 Purchased credit-impaired loans 34,786 2,964 1,078 38,828 - - - - 38,828 Total commercial real estate 1,104,991 9,109 1,078 1,115,178 4,469 395 13,237 18,101 1,133,279 Consumer real estate: HELOC 2,688,193 25,609 14,683 2,728,485 59,385 5,261 13,460 78,106 2,806,591 R/E installment loans 2,466,647 12,951 6,801 2,486,399 29,221 3,120 7,151 39,492 2,525,891 Purchased credit-impaired loans 889 - - 889 - - - - 889 Total consumer real estate 5,155,729 38,560 21,484 5,215,773 88,606 8,381 20,611 117,598 5,333,371 Permanent mortgage 606,707 11,235 6,129 624,071 14,868 952 22,351 38,171 662,242 Credit card & other Credit card 182,798 1,792 1,369 185,959 - - - - 185,959 Other 147,846 996 394 149,236 1,397 - - 1,397 150,633 Purchased credit-impaired loans 14 - - 14 - - - - 14 Total credit card & other 330,658 2,788 1,763 335,209 1,397 - - 1,397 336,606 Total loans, net of unearned $ 15,031,486 $ 70,298 $ 32,264 $ 15,134,048 $ 128,379 $ 13,396 $ 113,251 $ 255,026 $ 15,389,074 Total TRUP S i nclu des LOCOM valuation allowance of $ 29 .4 million. Troubled Debt Restructurings As part of FHN’s ongoing risk management practices, FHN attempts to work with borrowers when necessary to extend or modify loan terms to better align with their current ability to repay. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated separately. FHN considers regulatory guidelines when restructuring loans to ensure that prudent le nding practices are followed. As such, qualification criteria and payment terms consider the borrower’s current and prospective ability to comply with the modified terms of the loan. A modification is classified as a TDR if the borrower is experiencing fin ancial difficulty and it is determined that FHN has granted a concession to the borrower. FHN may determine that a borrower is experiencing financial difficulty if the borrower is currently in default on any of its debt, or if it is probable that a borrowe r may default in the foreseeable future. Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty, particularly as it relates to commercial borrowers due to the complex nature of loan structures, business/industry risk , and borrower/guarantor structures. Concessions could include extension of the maturity date, reductions of the interest rate (which may make the rate lower than current market for a new loan with similar risk ) , reductio n or forgiveness of accrued interest, or principal forgiveness. When evaluating whether a concession has been granted, FHN also considers whether the borrower has provided additional collateral or guarantors , among other things, and whether such additions adequately comp ensate FHN for the restructured terms. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty and whether a concession has been granted is subjective in nature and management’s judgment is required when dete rmining whether a modification is classified as a TDR. For all classes within the commercial portfolio segment, TDRs are typically modified through forbearance agreements (generally 6 to 12 months). Forbearance agreements could include reduced interest rat es, reduced payments, release of guarantor, or entering into short sale agreements. FHN’s proprietary modification programs for consumer loans are generally structured using parameters of U.S. government-sponsored programs such as Home Affordable Modificat ion Program (“HAMP”). Within the HELOC and R/E installment loans classes of the consumer portfolio segment, TDRs are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 1 percent for up to 5 years) and a possi ble maturity date extension to reach an affordable housing debt ratio. Permanent mortgage TDRs are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 2 percent for up to 5 years) and a possible maturity date extension to reach an affordable housing debt ratio. After 5 years the interest rate steps up 1 percent every year thereafter until it reaches the Federal Home Loan Mortgage Corporation Weekly Survey Rate cap. Contractual maturities may be extended to 40 years on permanent mortgages and to 30 years for consumer real estate loans. Within the credit card class of the consumer portfolio segment, TDRs are typically modified through either a short-term credit card hardship program or a longer-term credit card w orkout program. In the credit card hardship program, borrowers may be granted rate and payment reductions for 6 months to 1 year. In the credit card workout program, customers are granted a rate reduction to 0 percent and term extensions for up to 5 years to pay off the remaining balance. Despite the absence of a loan modification, the discharge of personal liability through bankruptcy proceedings is considered a concession and a s a result, FHN classifie s all non-reaffirmed residential real estate loans af ter bankruptcy as nonaccruing TDRs . On December 31 , 2014 and 2013 , FHN had $ 331.3 million and $ 352.3 million portfolio loans classified as TDRs, respectively. For TDRs in the loan portfolio, FHN had loan loss reserves of $ 59. 0 million and $ 64.6 million, or 18 percent as of December 31 , 2014 , and 18 percent as of December 31 , 2013 . Additionally, $ 80.1 million and $ 135.6 million of loans held-for-sale as of December 31 , 2014 and 2013 , respectively were classified as TDRs. The following table reflects portfolio loans that were classified as TDRs during the years ended December 31, 2014 and 2013: 2014 2013 Pre-Modification Post-Modification Pre-Modification Post-Modification Outstanding Outstanding Outstanding Outstanding (Dollars in thousands) Number Recorded Investment Recorded Investment Number Recorded Investment Recorded Investment Commercial (C&I): General C&I 4 $ 1,767 $ 1,492 13 $ 17,968 $ 17,784 Total commercial (C&I) 4 1,767 1,492 13 17,968 17,784 Commercial real estate: Income CRE 2 421 421 5 4,221 4,187 Residential CRE 1 976 960 - - - Total commercial real estate 3 1,397 1,381 5 4,221 4,187 Consumer real estate: HELOC 309 27,078 27,514 354 26,606 26,224 R/E installment loans 151 10,050 9,958 426 30,400 30,104 Total consumer real estate 460 37,128 37,472 780 57,006 56,328 Permanent mortgage 34 9,362 8,879 49 18,716 19,184 Credit card & other 64 327 315 50 233 221 Total troubled debt restructurings 565 $ 49,981 $ 49,539 897 $ 98,144 $ 97,704 The following table presents TDRs which re-defaulted during 2014 and 2013, and as to which the modification occurred 12 months or less prior to the re-default. Financing receivables that became classified as TDRs within the previous 12 months and for which there was a payment default during the period are calculated by first identifying TDRs that defaulted during the period and then determining whether they were modified within the 12 months prior to the default. For purposes of this disclosure, FHN generally defines payment default as 30 or more plus days past due. 2014 2013 Recorded Recorded (Dollars in thousands) Number Investment Number Investment Commercial (C&I): General C&I 6 $ 869 11 $ 6,705 Total commercial (C&I) 6 869 11 6,705 Commercial real estate: Income CRE 4 3,086 4 1,548 Residential CRE - - 1 33 Total commercial real estate 4 3,086 5 1,581 Consumer real estate: HELOC 7 485 13 604 R/E installment loans 9 530 8 428 Total consumer real estate 16 1,015 21 1,032 Permanent mortgage 3 1,128 17 7,832 Credit card & other 2 4 17 65 Total troubled debt restructurings 31 $ 6,102 71 $ 17,215 The determination of whether a TDR is placed on nonaccrual status generally follows the same internal policies and procedures as other portfolio loans. However, FHN will typically place a consumer real estate loan on nonaccrual status if it is 30 or more days delinquent upon modification into a TDR. For commercial loans, nonaccrual TDRs that are reasonably assured of repayment according to their modified terms may be returned to accrual status by FHN upon a de tailed credit evaluation of the borrower’s financial condition and prospects for repayment under the revised terms. For consumer loans, FHN’s evaluation supporting the decision to return a modified loan to accrual status includes consideration of the borro wer’s sustained historical repayment performance for a reasonable period prior to the date on which the loan is returned to accrual status, which is generally a minimum of six months. FHN may also consider a borrower’s sustained historical repayment perfor mance for a reasonable time prior to the restructuring in assessing whether the borrower can meet the restructured terms, as it may indicate that the borrower is capable of servicing the level of debt under the modified terms. Otherwise, FHN will continue to classify restructured loans as nonaccrual . Consistent with regulatory guidance, upon sustained performance and classification as a TDR over FHN’s year-end, the loan will be removed from TDR status as long as the modified terms were market-based at the t ime of modification. |