Exhibit 99.2
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 |
| Portfolio Metrics | 21 |
| Non-GAAP to GAAP Reconciliation | 22 |
| Glossary of Terms | 23 |
Other Information
This financial supplement contains forward-looking statements involving significant risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking information. Those factors include general economic and financial market conditions, including expectations of and actual timing and amount of interest rate movements including the slope of the yield curve, competition, customer and investor responses to these conditions, ability to execute business plans, geopolitical developments, recent and future legislative and regulatory developments, natural disasters, and items mentioned in this financial supplement and in First Horizon National Corporation’s (“FHN”) most recent press release, as well as critical accounting estimates and other factors described in FHN’s recent filings with the SEC. FHN disclaims any obligation to update any such 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 capital position or financial results of FHN. Non-GAAP measures are reported to FHN’s management and Board of Directors through various internal reports.
Presentation of regulatory measures, even those which are not GAAP, provides a meaningful base for comparability to other financial institutions subject to the same regulations as FHN, as demonstrated by their use by the various banking regulators in reviewing the capital adequacy of financial institutions. 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: 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; common equity tier 1 capital (for periods after fourth quarter 2014), generally defined as common equity less goodwill, other intangibles, and certain other required regulatory deductions; 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. The regulatory common equity tier 1 capital used in 2015 and later periods is not the same as the non-regulatory, non-GAAP tier 1 common capital commonly used prior to 2015; comparisons between the two are not meaningful.
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”), tangible book value per common share, and tier 1 common to RWA (for periods prior to first quarter 2015).
Refer to the tabular reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items on page 22 of this financial supplement.
| FIRST HORIZON NATIONAL CORPORATION SEGMENT STRUCTURE |  |
| 3 |
| FHN PERFORMANCE HIGHLIGHTS | ||||||||||
| Summary of Third Quarter 2015 Notable Items | ||||||||||
| Segment | Item | Income Statement | Amount | Comments | ||||||
| · | Various, primarily Regional Bank | Employee benefit plan amendment | Employee compensation, incentives, and benefits | $8.3 million | Pre-tax gains related to an amendment of certain employee benefit plans. | |||||
| · | Corporate | Gain on call of trust preferred debt | Gains on extinguishment of debt | $5.8 million | Pre-tax gain on the extinguishment of junior subordinated notes underlying $200 million of trust preferred debt. | |||||
| · | Corporate | Discrete tax benefit and decrease in capital loss carryover | Provision/(benefit) for income taxes | $(4.5) million | After-tax benefits related to discrete items and the utilization of capital loss carryover against estimated capital gains from future building sales. | |||||
| Third Quarter 2015 vs. Second Quarter 2015 | ||||||||||
Consolidated
| · | Net income available to common shareholders was $67.2 million, or $.29 per diluted share in third quarter, compared to $50.6 million, or $.22 per diluted share in second quarter |
| · | Net interest income (“NII”) was $163.6 million in third quarter compared to $166.6 million in second quarter; net interest margin (“NIM”) was 2.85 percent in third quarter compared to 2.92 percent in prior quarter |
| · | The decrease in NII was primarily driven by lower average balances of loans to mortgage companies, a decrease in cash basis interest income, and lower commercial loan fees relative to the prior quarter, partially offset by more days in third quarter compared to second quarter |
| · | The decrease in NIM was largely the result of an increase in average excess cash held at the Fed during the quarter, a decrease in cash basis interest income, and lower commercial loan fees relative to the prior quarter, somewhat mitigated by lower fixed income trading balances |
| · | Noninterest income (including securities gains) was $125.1 million in third quarter compared to $130.3 million in prior quarter |
| · | Noninterest expense was $203.9 million in third quarter compared to $218.4 million in second quarter primarily due to lower personnel expense due in large part to gains associated with an employee benefit plan amendment |
| · | Period-end loans were $16.7 billion and $16.9 billion in third quarter and second quarter, respectively; average loans declined 1 percent to $16.6 billion in third quarter |
| · | Period-end core deposits increased to $18.6 billion in third quarter from $18.3 billion in prior quarter; average core deposits increased 2 percent linked quarter to $18.5 billion in third quarter |
Regional Banking
| · | Pre-tax income was $85.6 million in third quarter compared to $70.6 million in second quarter; pre-provision net revenue was $92.3 million and $87.7 million in third and second quarters, respectively including third quarter expense benefit allocation related to an employee benefit plan amendment |
| · | Average loans were $14.3 billion in third and second quarters; period-end loans decreased 1 percent to $14.5 billion in third quarter |
| · | Decrease in period-end loans was driven by lower balances of loans to mortgage companies, partially offset by increases in other commercial loans and real estate lending |
| · | Average and period-end core deposits increased 1 percent to $17.0 billion in third quarter from $16.8 billion in second quarter |
| · | NII was $165.3 million in third quarter compared to $165.9 million in second quarter; NIM deceased to 4.63 percent in third quarter from 4.69 percent in second quarter |
| · | Provision expense declined to $6.7 million in third quarter compared to $17.1 million in the prior quarter |
| · | Decline in provision expense was attributable to overall continued strong performance within the regional bank portfolios including a quarterly decline in nonperforming loans and historically low net charge-offs, as well as lower loan balances in third quarter relative to the prior quarter |
| · | Prior quarter included provision associated with a single larger credit related to fraud |
| · | Noninterest income was $62.8 million in third quarter compared to $66.0 million in second quarter |
| · | The decrease was driven by lower brokerage, trust, cash management and bankcard fee income, partially offset by an increase in fees from non-sufficient funds (“NSF”) |
| · | Noninterest expense decreased to $135.8 million in third quarter from $144.2 million in prior quarter |
| · | Expense decrease primarily driven by lower allocated personnel expenses due in large part to gains recognized in third quarter related to an employee benefit plan amendment |
Fixed Income
| · | Pre-tax income was $6.6 million in third quarter compared to $9.1 million in second quarter |
| · | Fixed income product revenue was $43.0 million in third quarter down from $46.7 million in prior quarter |
| · | Fixed income product average daily revenue (“ADR”) was $671 thousand and $729 thousand in third quarter and second quarter, respectively |
| · | Noninterest expense was $48.2 million in third quarter compared to $51.2 million in the prior quarter |
| · | Third quarter decline was driven by lower variable compensation costs |
Corporate
| · | Pre-tax loss was $22.0 million in third quarter compared to pre-tax loss of $27.2 million in prior quarter |
| · | NII was negative $19.0 million in third quarter compared to negative $17.4 million in second quarter |
| · | Estimated effective duration of the securities portfolio was 2.8 years in third quarter compared to 3.5 years in second quarter |
| · | Estimated modified duration of the securities portfolio was 3.8 years in third quarter compared to 4.2 years in prior quarter |
| · | Noninterest income was $8.6 million in third quarter, up from $3.9 million in second quarter |
| · | Increase primarily relates to a $5.8 million gain on the extinguishment of debt, partially offset by lower deferred compensation income driven by market conditions; changes in deferred compensation income are mirrored by changes in deferred compensation expense |
| · | Noninterest expense decreased to $11.5 million in third quarter from $13.8 million in second quarter |
| 4 |
| FHN PERFORMANCE HIGHLIGHTS (continued) | |||
| Third Quarter 2015 vs. Second Quarter 2015 (continued) | |||
Non-Strategic
| · | Pre-tax income was $13.7 million in third quarter compared to $24.1 million in second quarter |
| · | NII was $14.3 million in third quarter compared to $13.8 million in prior quarter |
| · | The non-strategic segment had a provision credit of $5.7 million in third quarter compared to a provision credit of $15.1 million in second quarter |
| · | Provision credit reflects continued wind-down of the non-strategic portfolio and sustained levels of low net charge offs, a continuation of positive delinquency trends, and continued stabilization/improvement of property values |
| · | Noninterest income was $2.0 million in third quarter compared to $4.4 million in prior quarter |
| · | Second quarter included a $2.7 million pre-tax gain on the sale of property |
| · | Noninterest expense declined to $8.4 million in third quarter from $9.2 million in second quarter due in large part to a $.9 million net expense reversal in litigation losses related to legal matters |
Asset Quality
| · | Allowance for loan losses declined to $210.8 million in third quarter from $221.4 million in second quarter; the allowance to loans ratio was 126 basis points in third quarter compared to 131 basis points in second quarter |
| · | The decline in the allowance was driven by a $7.1 million reduction in consumer real estate reserves and a $3.4 million reduction in commercial reserves |
| · | Net charge-offs (“NCOs”) were $11.5 million in third quarter compared to $9.0 million in second quarter; annualized net charge-offs increased to 28 basis points of average loans in third quarter from 21 basis points in prior quarter |
| · | Within the Regional Bank, net charge-offs were $10.5 million and $10.3 million in the third quarter and second quarter, respectively |
| · | Charge-offs included a net recovery within the non-strategic segment in the second quarter |
| · | Nonperforming loans (“NPLs”) in the portfolio were $184.0 million in the third quarter compared to $203.1 million in the second quarter |
| · | Commercial NPLs decreased $17.6 million from the second quarter primarily driven by the pay down of three large loans and charge-off of the larger credit affected by borrower fraud disclosed last quarter. |
| · | Nonperforming assets (“NPAs”), including loans held-for-sale, decreased to $217.2 million in third quarter from $238.5 million in the prior quarter |
| · | The decrease in NPAs largely corresponded to the decrease in NPLs |
| · | Total 30+ delinquencies increased to $73.1 million in third quarter compared to $71.4 million in prior quarter |
| · | Commercial delinquencies increased in third quarter relative to the prior quarter – due to 2 purchased credit impaired loans, but were somewhat mitigated by a decline in consumer delinquencies driven by improvement in permanent mortgage and consumer real estate |
| · | Troubled debt restructurings (“TDRs”) decreased to $377.3 million in third quarter from $391.4 million in prior quarter |
Taxes
| · | The effective tax rates (“ETR”) for third quarter and second quarter were 14.46 percent and 28.21 percent, respectively. The rates reflect the favorable effect from permanent benefits and the effect from discrete taxes/benefits |
| · | Permanent benefits primarily consist of benefits from life insurance, tax-exempt income, utilization of capital loss carryover, and tax credit investments |
| · | Third quarter tax expense includes a discrete benefit of $3.3 million and $1.1 million of benefit related to the utilization of capital loss carryover against estimated capital gains from future building sales (the capital loss carryover DTA had been offset by a valuation allowance) |
| · | Second quarter tax expense includes $2.9 million of discrete tax expenses and $3.4 million of tax expense to reduce the first quarter tax benefit (associated with FHN’s pre-tax loss through the first quarter) to the lower effective tax rate projected for the year |
Capital and Liquidity
| · | Paid $0.06 per common share quarterly dividend ($14.0 million) on October 1, 2015 |
| · | Paid aggregate preferred quarterly dividend of $1.6 million on October 13, 2015 |
| · | No shares were repurchased in third quarter under the $100 million share repurchase program announced in January 2014 due to restrictions related to the acquisition of TrustAtlantic Financial Corporation which closed in early October 2015 |
| · | Cumulative shares repurchased since the program’s inception are $54.3 million with a volume weighted average price of $12.79 per share (before $.02 per share broker commission) |
| · | Capital ratios (regulatory capital ratios based on period-end balances under the Basel III risk-based capital rules as phased-in) (current quarter is an estimate) |
| · | Tangible common equity to tangible assets of 8.04 percent in third quarter compared to 7.80 percent in prior quarter |
| · | Common Equity Tier 1 of 10.76 percent in third quarter compared to 10.41 percent in prior quarter |
| · | Tier 1 of 12.16 percent in third quarter compared to 11.98 percent in prior quarter |
| · | Total Capital of 13.44 percent in third quarter compared to 14.00 percent in prior quarter |
| · | Leverage of 9.99 percent in third quarter compared to 9.87 percent in prior quarter |
| 5 |
FHN CONSOLIDATED INCOME STATEMENT
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | |||||||||||||||||||||
| Interest income | $ | 183,687 | $ | 187,030 | $ | 178,068 | $ | 179,448 | $ | 178,858 | (2 | )% | 3 | % | ||||||||||||||
| Less: interest expense | 20,125 | 20,390 | 21,202 | 20,398 | 19,317 | (1 | )% | 4 | % | |||||||||||||||||||
| Net interest income | 163,562 | 166,640 | 156,866 | 159,050 | 159,541 | (2 | )% | 3 | % | |||||||||||||||||||
| Provision for loan losses | 1,000 | 2,000 | 5,000 | 6,000 | 6,000 | (50 | )% | (83 | )% | |||||||||||||||||||
| Net interest income after provision for loan losses | 162,562 | 164,640 | 151,866 | 153,050 | 153,541 | (1 | )% | 6 | % | |||||||||||||||||||
| Noninterest income: | ||||||||||||||||||||||||||||
| Fixed income | 51,804 | 56,241 | 61,619 | 48,486 | 47,589 | (8 | )% | 9 | % | |||||||||||||||||||
| Deposit transactions and cash management | 28,911 | 28,430 | 26,551 | 29,038 | 28,546 | 2 | % | 1 | % | |||||||||||||||||||
| Brokerage, management fees and commissions | 11,620 | 12,456 | 11,399 | 11,647 | 12,333 | (7 | )% | (6 | )% | |||||||||||||||||||
| Mortgage banking (a) | 761 | 376 | 1,584 | 1,808 | 41,559 | NM | (98 | )% | ||||||||||||||||||||
| Trust services and investment management | 6,590 | 7,416 | 6,698 | 6,945 | 6,779 | (11 | )% | (3 | )% | |||||||||||||||||||
| Bankcard income | 5,561 | 5,884 | 5,186 | 5,737 | 5,521 | (5 | )% | 1 | % | |||||||||||||||||||
| Bank-owned life insurance | 4,135 | 3,391 | 3,462 | 3,503 | 3,547 | 22 | % | 17 | % | |||||||||||||||||||
| Other service charges | 2,968 | 3,043 | 2,848 | 2,830 | 3,064 | (2 | )% | (3 | )% | |||||||||||||||||||
| Insurance commissions | 608 | 654 | 596 | 616 | 593 | (7 | )% | 3 | % | |||||||||||||||||||
| Securities gains/(losses), net | (345 | ) | 8 | 276 | — | (862 | ) | NM | 60 | % | ||||||||||||||||||
| Other (b) | 12,490 | 12,402 | 9,470 | 8,988 | 9,146 | 1 | % | 37 | % | |||||||||||||||||||
| Total noninterest income | 125,103 | 130,301 | 129,689 | 119,598 | 157,815 | (4 | )% | (21 | )% | |||||||||||||||||||
| Adjusted gross income after provision for loan losses | 287,665 | 294,941 | 281,555 | 272,648 | 311,356 | (2 | )% | (8 | )% | |||||||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||||||||
| Employee compensation, incentives, and benefits (c) | 116,219 | 127,970 | 131,444 | 118,529 | 120,742 | (9 | )% | (4 | )% | |||||||||||||||||||
| Repurchase and foreclosure provision (d) | — | — | — | — | (4,300 | ) | NM | NM | ||||||||||||||||||||
| Legal fees | 3,626 | 4,509 | 3,551 | 5,633 | 4,276 | (20 | )% | (15 | )% | |||||||||||||||||||
| Professional fees | 5,139 | 5,218 | 3,706 | 6,919 | 6,187 | (2 | )% | (17 | )% | |||||||||||||||||||
| Occupancy | 13,282 | 11,764 | 12,218 | 12,077 | 12,405 | 13 | % | 7 | % | |||||||||||||||||||
| Computer software | 11,010 | 11,340 | 10,942 | 10,574 | 10,614 | (3 | )% | 4 | % | |||||||||||||||||||
| Contract employment and outsourcing | 3,414 | 3,337 | 4,584 | 4,578 | 5,199 | 2 | % | (34 | )% | |||||||||||||||||||
| Operations services | 10,130 | 10,033 | 9,337 | 8,417 | 9,044 | 1 | % | 12 | % | |||||||||||||||||||
| Equipment rentals, depreciation, and maintenance | 7,093 | 7,983 | 7,220 | 7,523 | 7,150 | (11 | )% | (1 | )% | |||||||||||||||||||
| FDIC premium expense | 4,529 | 4,952 | 3,448 | 2,881 | 3,456 | (9 | )% | 31 | % | |||||||||||||||||||
| Advertising and public relations | 4,832 | 4,349 | 4,733 | 4,077 | 4,386 | 11 | % | 10 | % | |||||||||||||||||||
| Communications and courier | 4,054 | 3,801 | 3,876 | 4,274 | 3,628 | 7 | % | 12 | % | |||||||||||||||||||
| Foreclosed real estate | 431 | 1,329 | (131 | ) | 492 | 788 | (68 | )% | (45 | )% | ||||||||||||||||||
| Amortization of intangible assets | 1,298 | 1,298 | 1,298 | 1,225 | 982 | * | 32 | % | ||||||||||||||||||||
| Other (b) | 18,796 | 20,511 | 179,995 | 20,110 | 59,459 | (8 | )% | (68 | )% | |||||||||||||||||||
| Total noninterest expense | 203,853 | 218,394 | 376,221 | 207,309 | 244,016 | (7 | )% | (16 | )% | |||||||||||||||||||
| Income/(loss) before income taxes | 83,812 | 76,547 | (94,666 | ) | 65,339 | 67,340 | 9 | % | 24 | % | ||||||||||||||||||
| Provision/(benefit) for income taxes | 12,107 | 21,590 | (22,261 | ) | 13,699 | 16,842 | (44 | )% | (28 | )% | ||||||||||||||||||
| Net income/(loss) | 71,705 | 54,957 | (72,405 | ) | 51,640 | 50,498 | 30 | % | 42 | % | ||||||||||||||||||
| Net income attributable to noncontrolling interest | 2,977 | 2,851 | 2,758 | 2,980 | 2,875 | 4 | % | 4 | % | |||||||||||||||||||
| Net income/(loss) attributable to controlling interest | 68,728 | 52,106 | (75,163 | ) | 48,660 | 47,623 | 32 | % | 44 | % | ||||||||||||||||||
| Preferred stock dividends | 1,550 | 1,550 | 1,550 | 1,550 | 1,550 | * | * | |||||||||||||||||||||
| Net income/(loss) available to common shareholders | $ | 67,178 | $ | 50,556 | $ | (76,713 | ) | $ | 47,110 | $ | 46,073 | 33 | % | 46 | % | |||||||||||||
| Common Stock Data | ||||||||||||||||||||||||||||
| EPS | $ | 0.29 | $ | 0.22 | $ | (0.33 | ) | $ | 0.20 | $ | 0.20 | 32 | % | 45 | % | |||||||||||||
| Basic Shares (thousands) (e) | 233,111 | 232,800 | 232,816 | 233,693 | 235,329 | * | (1 | )% | ||||||||||||||||||||
| Diluted EPS | $ | 0.29 | $ | 0.22 | $ | (0.33 | ) | $ | 0.20 | $ | 0.19 | 32 | % | 53 | % | |||||||||||||
| Diluted shares (thousands) | 235,058 | 234,669 | 232,816 | 235,448 | 236,862 | * | (1 | )% | ||||||||||||||||||||
| Key Ratios & Other | ||||||||||||||||||||||||||||
| Return on average assets (annualized) (f) | 1.12 | % | 0.87 | % | (1.15 | )% | 0.83 | % | 0.84 | % | ||||||||||||||||||
| Return on average common equity (annualized) (f) | 12.37 | % | 9.56 | % | (14.04 | )% | 8.27 | % | 8.16 | % | ||||||||||||||||||
| Return on average tangible common equity (annualized) (f) (g) | 13.45 | % | 10.41 | % | (15.24 | )% | 8.92 | % | 8.79 | % | ||||||||||||||||||
| Fee income to total revenue (f) | 43.41 | % | 43.88 | % | 45.21 | % | 42.92 | % | 49.86 | % | ||||||||||||||||||
| Efficiency ratio (f) | 70.53 | % | 73.55 | % | NM | 74.40 | % | 76.68 | % | |||||||||||||||||||
| Full time equivalent employees | 4,202 | 4,212 | 4,226 | 4,250 | 4,193 | |||||||||||||||||||||||
NM - Not meaningful
* Amount is less than one percent.
| (a) | 3Q14 includes a $39.7 million gain on the sales of mortgage loans HFS. |
| (b) | Refer to the Other Income and Other Expense table on page 7 for additional information. |
| (c) | 3Q15 includes $8.3 million of gains associated with an employee benefit plan amendment. |
| (d) | 3Q14 expense reversal associated with the settlement of certain repurchase claims. |
| (e) | In periods prior to 2Q15, decreases primarily relate to shares purchased under share repurchase programs. |
| (f) | See Glossary of Terms for definitions of Key Ratios. |
| (g) | Refer to the Non-GAAP to GAAP reconciliation on page 22 of this financial supplement. |
| 6 |
FHN OTHER INCOME AND OTHER EXPENSE
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| (Thousands) | 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | |||||||||||||||||||||
| Other Income | ||||||||||||||||||||||||||||
| ATM and interchange fees | $ | 2,998 | $ | 3,025 | $ | 2,761 | $ | 2,961 | $ | 2,739 | (1 | )% | 9 | % | ||||||||||||||
| Electronic banking fees | 1,479 | 1,459 | 1,428 | 1,561 | 1,560 | 1 | % | (5 | )% | |||||||||||||||||||
| Letter of credit fees | 978 | 1,532 | 1,123 | 1,111 | 917 | (36 | )% | 7 | % | |||||||||||||||||||
| Deferred compensation (a) | (2,309 | ) | (35 | ) | 1,033 | 242 | (41 | ) | NM | NM | ||||||||||||||||||
| Gain on extinguishment of debt (b) | 5,794 | — | — | 184 | — | NM | NM | |||||||||||||||||||||
| Other (c) | 3,550 | 6,421 | 3,125 | 2,929 | 3,971 | (45 | )% | (11 | )% | |||||||||||||||||||
| Total | $ | 12,490 | $ | 12,402 | $ | 9,470 | $ | 8,988 | $ | 9,146 | 1 | % | 37 | % | ||||||||||||||
| Other Expense | ||||||||||||||||||||||||||||
| Litigation and regulatory matters (d) | $ | (650 | ) | $ | — | $ | 162,500 | $ | — | $ | 35,390 | NM | NM | |||||||||||||||
| Other insurance and taxes | 3,283 | 3,455 | 3,329 | 2,722 | 3,909 | (5 | )% | (16 | )% | |||||||||||||||||||
| Tax credit investments | 439 | 549 | 395 | 589 | 311 | (20 | )% | 41 | % | |||||||||||||||||||
| Travel and entertainment | 2,451 | 2,632 | 1,614 | 2,462 | 2,164 | (7 | )% | 13 | % | |||||||||||||||||||
| Employee training and dues | 1,272 | 1,449 | 1,132 | 1,258 | 1,194 | (12 | )% | 7 | % | |||||||||||||||||||
| Customer relations | 1,477 | 1,505 | 1,314 | 1,397 | 1,406 | (2 | )% | 5 | % | |||||||||||||||||||
| Miscellaneous loan costs | 726 | 734 | 361 | 540 | 597 | (1 | )% | 22 | % | |||||||||||||||||||
| Supplies | 974 | 880 | 927 | 1,046 | 779 | 11 | % | 25 | % | |||||||||||||||||||
| Other (e) | 8,824 | 9,307 | 8,423 | 10,096 | 13,709 | (5 | )% | (36 | )% | |||||||||||||||||||
| Total | $ | 18,796 | $ | 20,511 | $ | 179,995 | $ | 20,110 | $ | 59,459 | (8 | )% | (68 | )% | ||||||||||||||
NM - Not meaningful
| (a) | Amounts driven by market conditions and are mirrored by changes in deferred compensation expense which is included in employee compensation expense. |
| (b) | 3Q15 gain related to the extinguishment of $206 million of junior subordinated notes underlying $200 million of trust preferred debt. |
| (c) | 2Q15 includes $2.9 million of pre-tax gains on the sale of properties. |
| (d) | 3Q15 includes $1.2 million of expense reversals associated with the settlement of a legal matter; 1Q15 loss accruals relate to the settlement of potential claims related to FHN’s underwriting and origination of FHA-insured mortgage loans; 3Q14 includes $50.0 million of loss accruals related to legal matters, partially offset by $15.0 million of expense reversals associated with agreements with insurance companies for the recovery of expenses FHN incurred related to litigation losses in previous periods. |
| (e) | 3Q14 includes $3.2 million of negative valuation adjustments associated with derivatives related to prior sales of Visa Class B shares. |
| 7 |
FHN CONSOLIDATED PERIOD-END BALANCE SHEET
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| (Thousands) | 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | |||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investment securities | $ | 3,677,954 | $ | 3,653,166 | $ | 3,676,630 | $ | 3,560,905 | $ | 3,538,957 | 1 | % | 4 | % | ||||||||||||||
| Loans held-for-sale | 124,308 | 127,196 | 133,958 | 141,285 | 151,915 | (2 | )% | (18 | )% | |||||||||||||||||||
| Loans, net of unearned income | 16,725,492 | 16,936,772 | 16,732,123 | 16,230,166 | 15,812,017 | (1 | )% | 6 | % | |||||||||||||||||||
| Federal funds sold | 64,438 | 77,039 | 43,052 | 63,080 | 55,242 | (16 | )% | 17 | % | |||||||||||||||||||
| Securities purchased under agreements to resell | 793,098 | 816,991 | 831,541 | 659,154 | 561,802 | (3 | )% | 41 | % | |||||||||||||||||||
| Interest-bearing cash (a) | 596,689 | 344,944 | 438,633 | 1,621,967 | 275,485 | 73 | % | NM | ||||||||||||||||||||
| Trading securities | 1,229,180 | 1,133,490 | 1,532,463 | 1,194,391 | 1,338,022 | 8 | % | (8 | )% | |||||||||||||||||||
| Total earning assets | 23,211,159 | 23,089,598 | 23,388,400 | 23,470,948 | 21,733,440 | 1 | % | 7 | % | |||||||||||||||||||
| Cash and due from banks | 256,342 | 274,256 | 282,800 | 349,171 | 292,687 | (7 | )% | (12 | )% | |||||||||||||||||||
| Fixed income receivables (b) | 83,547 | 91,069 | 190,662 | 42,488 | 197,507 | (8 | )% | (58 | )% | |||||||||||||||||||
| Goodwill (c) | 145,932 | 145,932 | 145,932 | 145,932 | 141,943 | * | 3 | % | ||||||||||||||||||||
| Other intangible assets, net (c) | 25,624 | 26,922 | 28,220 | 29,518 | 19,044 | (5 | )% | 35 | % | |||||||||||||||||||
| Premises and equipment, net (c) (d) | 269,332 | 269,507 | 301,069 | 302,996 | 295,833 | * | (9 | )% | ||||||||||||||||||||
| Real estate acquired by foreclosure | 35,332 | 40,268 | 39,776 | 39,922 | 47,996 | (12 | )% | (26 | )% | |||||||||||||||||||
| Allowance for loan losses | (210,814 | ) | (221,351 | ) | (228,328 | ) | (232,448 | ) | (238,641 | ) | (5 | )% | (12 | )% | ||||||||||||||
| Derivative assets | 152,548 | 115,230 | 148,153 | 134,088 | 137,742 | 32 | % | 11 | % | |||||||||||||||||||
| Other assets | 1,415,107 | 1,408,336 | 1,419,204 | 1,385,572 | 1,355,046 | * | 4 | % | ||||||||||||||||||||
| Total assets | $ | 25,384,109 | $ | 25,239,767 | $ | 25,715,888 | $ | 25,668,187 | $ | 23,982,597 | 1 | % | 6 | % | ||||||||||||||
| Liabilities and Equity: | ||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||
| Savings | $ | 7,554,338 | $ | 7,462,642 | $ | 7,428,000 | $ | 7,455,354 | $ | 6,371,156 | 1 | % | 19 | % | ||||||||||||||
| Other interest-bearing deposits | 4,885,601 | 4,675,742 | 4,939,240 | 4,140,991 | 3,955,152 | 4 | % | 24 | % | |||||||||||||||||||
| Time deposits | 743,158 | 769,132 | 792,914 | 831,666 | 767,699 | (3 | )% | (3 | )% | |||||||||||||||||||
| Total interest-bearing core deposits | 13,183,097 | 12,907,516 | 13,160,154 | 12,428,011 | 11,094,007 | 2 | % | 19 | % | |||||||||||||||||||
| Noninterest-bearing deposits | 5,391,385 | 5,366,936 | 5,060,897 | 5,195,656 | 4,603,826 | * | 17 | % | ||||||||||||||||||||
| Total core deposits (e) | 18,574,482 | 18,274,452 | 18,221,051 | 17,623,667 | 15,697,833 | 2 | % | 18 | % | |||||||||||||||||||
| Certificates of deposit $100,000 and more | 290,738 | 400,021 | 417,503 | 445,272 | 446,938 | (27 | )% | (35 | )% | |||||||||||||||||||
| Total deposits | 18,865,220 | 18,674,473 | 18,638,554 | 18,068,939 | 16,144,771 | 1 | % | 17 | % | |||||||||||||||||||
| Federal funds purchased | 520,992 | 556,862 | 703,352 | 1,037,052 | 928,159 | (6 | )% | (44 | )% | |||||||||||||||||||
| Securities sold under agreements to repurchase | 332,329 | 311,760 | 309,297 | 562,214 | 479,384 | 7 | % | (31 | )% | |||||||||||||||||||
| Trading liabilities | 788,563 | 732,564 | 813,141 | 594,314 | 532,234 | 8 | % | 48 | % | |||||||||||||||||||
| Other short-term borrowings (f) | 99,887 | 150,350 | 158,745 | 157,218 | 790,080 | (34 | )% | (87 | )% | |||||||||||||||||||
| Term borrowings (g) | 1,341,186 | 1,557,647 | 1,573,215 | 1,880,105 | 1,491,138 | (14 | )% | (10 | )% | |||||||||||||||||||
| Fixed income payables (b) | 95,346 | 54,301 | 91,176 | 18,157 | 329,960 | 76 | % | (71 | )% | |||||||||||||||||||
| Derivative liabilities | 140,965 | 109,815 | 133,273 | 119,239 | 123,442 | 28 | % | 14 | % | |||||||||||||||||||
| Other liabilities | 611,003 | 574,090 | 795,878 | 649,359 | 551,615 | 6 | % | 11 | % | |||||||||||||||||||
| Total liabilities | 22,795,491 | 22,721,862 | 23,216,631 | 23,086,597 | 21,370,783 | * | 7 | % | ||||||||||||||||||||
| Equity: | ||||||||||||||||||||||||||||
| Common stock (h) | 146,398 | 146,263 | 145,937 | 146,387 | 147,030 | * | * | |||||||||||||||||||||
| Capital surplus (h) | 1,377,731 | 1,371,712 | 1,370,711 | 1,380,809 | 1,390,081 | * | (1 | )% | ||||||||||||||||||||
| Undivided profits | 850,110 | 797,123 | 760,713 | 851,585 | 816,483 | 7 | % | 4 | % | |||||||||||||||||||
| Accumulated other comprehensive loss, net | (176,676 | ) | (188,248 | ) | (169,159 | ) | (188,246 | ) | (132,835 | ) | (6 | )% | 33 | % | ||||||||||||||
| 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 | 2,588,618 | 2,517,905 | 2,499,257 | 2,581,590 | 2,611,814 | 3 | % | (1 | )% | |||||||||||||||||||
| Total liabilities and equity | $ | 25,384,109 | $ | 25,239,767 | $ | 25,715,888 | $ | 25,668,187 | $ | 23,982,597 | 1 | % | 6 | % | ||||||||||||||
NM - Not meaningful
* Amount is less than one percent.
| (a) | Includes excess balances held at Fed. 4Q14 increase driven by inflow of customer deposits and proceeds from the issuance of senior notes. |
| (b) | Period-end balances fluctuate based on the level of pending unsettled trades. |
| (c) | 4Q14 increase related to the acquisition of bank branches. |
| (d) | 2Q15 decrease related to sale of property. |
| (e) | 3Q15 average core deposits were $18.5 billion. |
| (f) | 3Q14 includes increased FHLB borrowings as a result of loan growth and deposit fluctuations. |
| (g) | In 3Q15 FHN called $206 million of junior subordinated notes underlying $200 million of trust preferred debt. In 1Q15 $304 million of FTBNA subordinated notes matured. In 4Q14 FTBNA issued $400 million of senior bank notes. |
| (h) | In periods prior to 2Q15, decreases primarily relate to shares purchased under share repurchase programs. |
| (i) | Consists of preferred stock of subsidiaries. |
| 8 |
FHN CONSOLIDATED AVERAGE BALANCE SHEET
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| (Thousands) | 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | |||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Earning assets: | ||||||||||||||||||||||||||||
| Loans, net of unearned income: | ||||||||||||||||||||||||||||
| Commercial, financial, and industrial (C&I) | $ | 9,539,650 | $ | 9,675,107 | $ | 8,965,657 | $ | 8,584,065 | $ | 8,395,553 | (1 | )% | 14 | % | ||||||||||||||
| Commercial real estate | 1,425,528 | 1,371,207 | 1,290,246 | 1,287,816 | 1,260,715 | 4 | % | 13 | % | |||||||||||||||||||
| Consumer real estate | 4,838,984 | 4,893,285 | 4,988,532 | 5,087,104 | 5,173,088 | (1 | )% | (6 | )% | |||||||||||||||||||
| Permanent mortgage | 475,684 | 500,093 | 526,616 | 552,065 | 581,876 | (5 | )% | (18 | )% | |||||||||||||||||||
| Credit card and other | 353,148 | 350,247 | 351,503 | 357,321 | 352,133 | 1 | % | * | ||||||||||||||||||||
| Total loans, net of unearned income (a) | 16,632,994 | 16,789,939 | 16,122,554 | 15,868,371 | 15,763,365 | (1 | )% | 6 | % | |||||||||||||||||||
| Loans held-for-sale (b) | 126,072 | 129,519 | 138,373 | 144,061 | 318,743 | (3 | )% | (60 | )% | |||||||||||||||||||
| Investment securities: | ||||||||||||||||||||||||||||
| U.S. treasuries | 100 | 100 | 100 | 100 | 26,764 | * | NM | |||||||||||||||||||||
| U.S. government agencies | 3,482,658 | 3,505,033 | 3,391,297 | 3,363,053 | 3,345,739 | (1 | )% | 4 | % | |||||||||||||||||||
| States and municipalities | 13,673 | 14,074 | 14,410 | 14,493 | 17,458 | (3 | )% | (22 | )% | |||||||||||||||||||
| Other | 181,817 | 181,749 | 181,858 | 181,806 | 184,934 | * | (2 | )% | ||||||||||||||||||||
| Total investment securities | 3,678,248 | 3,700,956 | 3,587,665 | 3,559,452 | 3,574,895 | (1 | )% | 3 | % | |||||||||||||||||||
| Trading securities | 1,137,877 | 1,363,165 | 1,371,514 | 1,182,762 | 1,060,123 | (17 | )% | 7 | % | |||||||||||||||||||
| Other earning assets: | ||||||||||||||||||||||||||||
| Federal funds sold | 35,191 | 31,765 | 23,710 | 26,543 | 37,274 | 11 | % | (6 | )% | |||||||||||||||||||
| Securities purchased under agreements to resell | 762,744 | 760,338 | 777,989 | 672,764 | 644,022 | * | 18 | % | ||||||||||||||||||||
| Interest-bearing cash (c) | 806,648 | 465,596 | 1,451,826 | 1,011,983 | 288,192 | 73 | % | NM | ||||||||||||||||||||
| Total other earning assets | 1,604,583 | 1,257,699 | 2,253,525 | 1,711,290 | 969,488 | 28 | % | 66 | % | |||||||||||||||||||
| Total earning assets | 23,179,774 | 23,241,278 | 23,473,631 | 22,465,936 | 21,686,614 | * | 7 | % | ||||||||||||||||||||
| Allowance for loan losses | (216,833 | ) | (227,765 | ) | (232,655 | ) | (238,850 | ) | (240,433 | ) | (5 | )% | (10 | )% | ||||||||||||||
| Cash and due from banks | 308,409 | 315,730 | 342,512 | 341,338 | 321,427 | (2 | )% | (4 | )% | |||||||||||||||||||
| Fixed income receivables | 59,470 | 51,913 | 48,937 | 63,384 | 55,937 | 15 | % | 6 | % | |||||||||||||||||||
| Premises and equipment, net (d) | 268,061 | 292,874 | 301,989 | 301,512 | 297,636 | (8 | )% | (10 | )% | |||||||||||||||||||
| Derivative assets | 113,927 | 138,935 | 139,086 | 141,146 | 154,988 | (18 | )% | (26 | )% | |||||||||||||||||||
| Other assets | 1,601,953 | 1,601,083 | 1,571,104 | 1,538,791 | 1,526,165 | * | 5 | % | ||||||||||||||||||||
| Total assets | $ | 25,314,761 | $ | 25,414,048 | $ | 25,644,604 | $ | 24,613,257 | $ | 23,802,334 | * | 6 | % | |||||||||||||||
| Liabilities and equity: | ||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||
| Savings | $ | 7,578,288 | $ | 7,437,016 | $ | 7,377,045 | $ | 6,929,750 | $ | 6,327,556 | 2 | % | 20 | % | ||||||||||||||
| Other interest-bearing deposits | 4,806,813 | 4,741,920 | 4,483,907 | 3,895,022 | 3,697,854 | 1 | % | 30 | % | |||||||||||||||||||
| Time deposits | 756,397 | 780,355 | 812,749 | 830,412 | 785,154 | (3 | )% | (4 | )% | |||||||||||||||||||
| Total interest-bearing core deposits | 13,141,498 | 12,959,291 | 12,673,701 | 11,655,184 | 10,810,564 | 1 | % | 22 | % | |||||||||||||||||||
| Certificates of deposit $100,000 and more | 354,376 | 405,696 | 423,480 | 451,669 | 464,792 | (13 | )% | (24 | )% | |||||||||||||||||||
| Federal funds purchased | 529,156 | 649,464 | 1,079,531 | 1,137,909 | 1,028,852 | (19 | )% | (49 | )% | |||||||||||||||||||
| Securities sold under agreements to repurchase | 330,114 | 339,874 | 474,448 | 471,712 | 406,219 | (3 | )% | (19 | )% | |||||||||||||||||||
| Trading liabilities | 722,031 | 713,133 | 728,553 | 634,375 | 621,880 | 1 | % | 16 | % | |||||||||||||||||||
| Other short-term borrowings (e) | 138,698 | 227,650 | 165,408 | 302,353 | 1,093,014 | (39 | )% | (87 | )% | |||||||||||||||||||
| Term borrowings (f) | 1,461,173 | 1,570,953 | 1,621,983 | 1,664,924 | 1,499,959 | (7 | )% | (3 | )% | |||||||||||||||||||
| Total interest-bearing liabilities | 16,677,046 | 16,866,061 | 17,167,104 | 16,318,126 | 15,925,280 | (1 | )% | 5 | % | |||||||||||||||||||
| Noninterest-bearing deposits | 5,392,294 | 5,189,939 | 5,098,361 | 4,974,748 | 4,602,292 | 4 | % | 17 | % | |||||||||||||||||||
| Fixed income payables | 26,220 | 27,608 | 34,800 | 40,273 | 36,762 | (5 | )% | (29 | )% | |||||||||||||||||||
| Derivative liabilities | 105,644 | 123,397 | 124,305 | 124,530 | 130,997 | (14 | )% | (19 | )% | |||||||||||||||||||
| Other liabilities | 568,013 | 695,114 | 612,513 | 503,851 | 475,162 | (18 | )% | 20 | % | |||||||||||||||||||
| Total liabilities | 22,769,217 | 22,902,119 | 23,037,083 | 21,961,528 | 21,170,493 | (1 | )% | 8 | % | |||||||||||||||||||
| Equity: | ||||||||||||||||||||||||||||
| Common stock (g) | 146,324 | 146,146 | 146,225 | 146,789 | 147,820 | * | (1 | )% | ||||||||||||||||||||
| Capital surplus (g) | 1,374,195 | 1,370,653 | 1,377,178 | 1,387,116 | 1,408,682 | * | (2 | )% | ||||||||||||||||||||
| Undivided profits | 818,909 | 775,881 | 868,605 | 846,656 | 810,164 | 6 | % | 1 | % | |||||||||||||||||||
| Accumulated other comprehensive loss, net | (184,939 | ) | (171,806 | ) | (175,542 | ) | (119,887 | ) | (125,880 | ) | 8 | % | 47 | % | ||||||||||||||
| Preferred stock | 95,624 | 95,624 | 95,624 | 95,624 | 95,624 | * | * | |||||||||||||||||||||
| Noncontrolling interest (h) | 295,431 | 295,431 | 295,431 | 295,431 | 295,431 | * | * | |||||||||||||||||||||
| Total equity | 2,545,544 | 2,511,929 | 2,607,521 | 2,651,729 | 2,631,841 | 1 | % | (3 | )% | |||||||||||||||||||
| Total liabilities and equity | $ | 25,314,761 | $ | 25,414,048 | $ | 25,644,604 | $ | 24,613,257 | $ | 23,802,334 | * | 6 | % | |||||||||||||||
NM - Not meaningful
* Amount is less than one percent.
| (a) | Includes loans on nonaccrual status. |
| (b) | 4Q14 decrease related to the sale of mortgage loans HFS in third quarter. |
| (c) | Includes excess balances held at Fed. 1Q15 and 4Q14 increase driven by inflow of customer deposits and proceeds from the issuance of senior notes in fourth quarter. |
| (d) | 2Q15 and 3Q15 decrease related to sale of property in second quarter. |
| (e) | 3Q14 includes increased FHLB borrowings as a result of loan growth and deposit fluctuations. |
| (f) | In 3Q15 FHN called $206 million of junior subordinated notes underlying $200 million of trust preferred debt. In 1Q15 $304 million of FTBNA subordinated notes matured. In 4Q14 FTBNA issued $400 million of senior bank notes. |
| (g) | Decreases primarily relate to shares purchased under share repurchase programs. |
| (h) | Consists of preferred stock of subsidiaries. |
| 9 |
FHN CONSOLIDATED NET INTEREST INCOME (a)
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| (Thousands) | 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | |||||||||||||||||||||
| Interest Income: | ||||||||||||||||||||||||||||
| Loans, net of unearned income (b) | $ | 152,795 | $ | 155,565 | $ | 146,192 | $ | 148,078 | $ | 146,931 | (2 | )% | 4 | % | ||||||||||||||
| Loans held-for-sale | 1,311 | 1,350 | 1,491 | 1,483 | 3,263 | (3 | )% | (60 | )% | |||||||||||||||||||
| Investment securities: | ||||||||||||||||||||||||||||
| U.S. treasuries | — | — | — | — | 5 | NM | NM | |||||||||||||||||||||
| U.S. government agencies | 21,366 | 21,432 | 20,955 | 21,317 | 21,376 | * | * | |||||||||||||||||||||
| States and municipalities | 97 | 97 | 125 | 159 | 109 | * | (11 | )% | ||||||||||||||||||||
| Other | 1,864 | 1,853 | 1,876 | 1,875 | 1,866 | 1 | % | * | ||||||||||||||||||||
| Total investment securities | 23,327 | 23,382 | 22,956 | 23,351 | 23,356 | * | * | |||||||||||||||||||||
| Trading securities | 8,476 | 9,289 | 9,281 | 8,701 | 7,944 | (9 | )% | 7 | % | |||||||||||||||||||
| Other earning assets: | ||||||||||||||||||||||||||||
| Federal funds sold | 88 | 79 | 57 | 69 | 92 | 11 | % | (4 | )% | |||||||||||||||||||
| Securities purchased under agreements to resell (c) | (112 | ) | (254 | ) | (252 | ) | (217 | ) | (363 | ) | 56 | % | 69 | % | ||||||||||||||
| Interest-bearing cash | 490 | 267 | 874 | 611 | 134 | 84 | % | NM | ||||||||||||||||||||
| Total other earning assets | 466 | 92 | 679 | 463 | (137 | ) | NM | NM | ||||||||||||||||||||
| Interest income | $ | 186,375 | $ | 189,678 | $ | 180,599 | $ | 182,076 | $ | 181,357 | (2 | )% | 3 | % | ||||||||||||||
| Interest Expense: | ||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||
| Savings | $ | 2,785 | $ | 2,970 | $ | 3,307 | $ | 3,087 | $ | 2,600 | (6 | )% | 7 | % | ||||||||||||||
| Other interest-bearing deposits | 1,118 | 1,104 | 957 | 760 | 754 | 1 | % | 48 | % | |||||||||||||||||||
| Time deposits | 1,230 | 1,324 | 1,432 | 1,742 | 1,786 | (7 | )% | (31 | )% | |||||||||||||||||||
| Total interest-bearing core deposits | 5,133 | 5,398 | 5,696 | 5,589 | 5,140 | (5 | )% | * | ||||||||||||||||||||
| Certificates of deposit $100,000 and more | 756 | 830 | 882 | 513 | 685 | (9 | )% | 10 | % | |||||||||||||||||||
| Federal funds purchased | 338 | 408 | 673 | 729 | 654 | (17 | )% | (48 | )% | |||||||||||||||||||
| Securities sold under agreements to repurchase | 32 | 42 | 95 | 83 | 63 | (24 | )% | (49 | )% | |||||||||||||||||||
| Trading liabilities | 4,258 | 3,770 | 3,914 | 3,950 | 3,782 | 13 | % | 13 | % | |||||||||||||||||||
| Other short-term borrowings | 294 | 276 | 278 | 388 | 548 | 7 | % | (46 | )% | |||||||||||||||||||
| Term borrowings (d) | 9,314 | 9,666 | 9,664 | 9,146 | 8,445 | (4 | )% | 10 | % | |||||||||||||||||||
| Interest expense | 20,125 | 20,390 | 21,202 | 20,398 | 19,317 | (1 | )% | 4 | % | |||||||||||||||||||
| Net interest income - tax equivalent basis | 166,250 | 169,288 | 159,397 | 161,678 | 162,040 | (2 | )% | 3 | % | |||||||||||||||||||
| Fully taxable equivalent adjustment | (2,688 | ) | (2,648 | ) | (2,531 | ) | (2,628 | ) | (2,499 | ) | (2 | )% | (8 | )% | ||||||||||||||
| Net interest income | $ | 163,562 | $ | 166,640 | $ | 156,866 | $ | 159,050 | $ | 159,541 | (2 | )% | 3 | % | ||||||||||||||
NM - Not meaningful
* Amount is less than one percent.
| (a) | Net interest income adjusted to a fully taxable equivalent (“FTE”) basis assuming a statutory federal income tax of 35 percent and, where applicable, state income taxes. |
| (b) | Includes interest on loans in nonaccrual status. |
| (c) | Driven by negative market rates on reverse repurchase agreements. |
| (d) | 4Q14 increase related to the issuance of $400 million of senior notes. |
| 10 |
FHN CONSOLIDATED AVERAGE BALANCE SHEET: YIELDS AND RATES
Quarterly, Unaudited
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | ||||||||||||||||
| Assets: | ||||||||||||||||||||
| Earning assets (a): | ||||||||||||||||||||
| Loans, net of unearned income (b): | ||||||||||||||||||||
| Commercial loans | 3.50 | % | 3.60 | % | 3.50 | % | 3.55 | % | 3.51 | % | ||||||||||
| Retail loans | 3.94 | 3.94 | 3.96 | 3.97 | 4.01 | |||||||||||||||
| Total loans, net of unearned income (c) | 3.65 | 3.71 | 3.67 | 3.71 | 3.70 | |||||||||||||||
| Loans held-for-sale | 4.16 | 4.17 | 4.31 | 4.12 | 4.09 | |||||||||||||||
| Investment securities: | ||||||||||||||||||||
| U.S. treasuries | NM | NM | NM | NM | 0.07 | |||||||||||||||
| U.S. government agencies | 2.45 | 2.45 | 2.47 | 2.54 | 2.56 | |||||||||||||||
| States and municipalities | 2.84 | 2.77 | 3.46 | 4.38 | 2.50 | |||||||||||||||
| Other | 4.10 | 4.08 | 4.13 | 4.13 | 4.04 | |||||||||||||||
| Total investment securities | 2.54 | 2.53 | 2.56 | 2.62 | 2.61 | |||||||||||||||
| Trading securities | 2.98 | 2.73 | 2.71 | 2.94 | 3.00 | |||||||||||||||
| Other earning assets: | ||||||||||||||||||||
| Federal funds sold | 1.00 | 1.00 | 0.97 | 1.02 | 0.98 | |||||||||||||||
| Securities purchased under agreements to resell (d) | (0.06 | ) | (0.13 | ) | (0.13 | ) | (0.13 | ) | (0.22 | ) | ||||||||||
| Interest-bearing cash | 0.24 | 0.23 | 0.24 | 0.24 | 0.19 | |||||||||||||||
| Total other earning assets | 0.12 | 0.03 | 0.12 | 0.11 | (0.06 | ) | ||||||||||||||
| Interest income/total earning assets | 3.20 | % | 3.27 | % | 3.11 | % | 3.22 | % | 3.33 | % | ||||||||||
| Liabilities: | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||
| Savings | 0.15 | % | 0.16 | % | 0.18 | % | 0.18 | % | 0.16 | % | ||||||||||
| Other interest-bearing deposits | 0.09 | 0.09 | 0.09 | 0.08 | 0.08 | |||||||||||||||
| Time deposits | 0.65 | 0.68 | 0.71 | 0.83 | 0.90 | |||||||||||||||
| Total interest-bearing core deposits | 0.15 | 0.17 | 0.18 | 0.19 | 0.19 | |||||||||||||||
| Certificates of deposit $100,000 and more | 0.85 | 0.82 | 0.84 | 0.45 | 0.59 | |||||||||||||||
| Federal funds purchased | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | |||||||||||||||
| Securities sold under agreements to repurchase | 0.04 | 0.05 | 0.08 | 0.07 | 0.06 | |||||||||||||||
| Trading liabilities | 2.34 | 2.12 | 2.18 | 2.47 | 2.41 | |||||||||||||||
| Other short-term borrowings | 0.84 | 0.49 | 0.68 | 0.51 | 0.20 | |||||||||||||||
| Term borrowings (e) | 2.55 | 2.47 | 2.39 | 2.20 | 2.25 | |||||||||||||||
| Interest expense/total interest-bearing liabilities | 0.48 | 0.48 | 0.50 | 0.50 | 0.48 | |||||||||||||||
| Net interest spread | 2.72 | % | 2.79 | % | 2.61 | % | 2.72 | % | 2.85 | % | ||||||||||
| Effect of interest-free sources used to fund earning assets | 0.13 | 0.13 | 0.13 | 0.14 | 0.12 | |||||||||||||||
| Net interest margin | 2.85 | % | 2.92 | % | 2.74 | % | 2.86 | % | �� | 2.97 | % | |||||||||
Yields are adjusted to a FTE basis assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes.
NM - Not meaningful
| (a) | Earning assets yields are expressed net of unearned income. |
| (b) | Includes loan fees and cash basis interest income. |
| (c) | Includes loans on nonaccrual status. |
| (d) | Driven by negative market rates on reverse repurchase agreements. |
| (e) | Rates are expressed net of unamortized debenture cost for term borrowings. |
| 11 |
FHN CAPITAL HIGHLIGHTS
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| (Dollars and shares in thousands) | 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | |||||||||||||||||||||
| Common equity tier 1 capital (a) (c) | $ | 2,234,562 | $ | 2,172,768 | $ | 2,133,554 | N/A | N/A | 3 | % | NM | |||||||||||||||||
| Tier 1 capital (a) (b) (c) | $ | 2,524,418 | $ | 2,500,612 | $ | 2,452,297 | $ | 2,813,503 | $ | 2,783,147 | 1 | % | (9 | )% | ||||||||||||||
| Total capital (a) (d) | $ | 2,789,383 | $ | 2,922,582 | $ | 2,912,671 | $ | 3,148,336 | $ | 3,121,359 | (5 | )% | (11 | )% | ||||||||||||||
| Risk-weighted assets (“RWA”) (a) | $ | 20,758,700 | $ | 20,869,862 | $ | 20,707,078 | $ | 19,452,656 | $ | 19,238,109 | (1 | )% | 8 | % | ||||||||||||||
| Average assets for leverage (a) (c) | $ | 25,281,704 | $ | 25,347,048 | $ | 25,570,905 | $ | 24,625,820 | $ | 23,748,667 | * | 6 | % | |||||||||||||||
| Common equity tier 1 ratio (a) (c) | 10.76 | % | 10.41 | % | 10.30 | % | N/A | N/A | ||||||||||||||||||||
| Tier 1 ratio (a) (c) | 12.16 | % | 11.98 | % | 11.84 | % | 14.46 | % | 14.47 | % | ||||||||||||||||||
| Total capital ratio (a) | 13.44 | % | 14.00 | % | 14.07 | % | 16.18 | % | 16.22 | % | ||||||||||||||||||
| Leverage ratio (a) (c) | 9.99 | % | 9.87 | % | 9.59 | % | 11.43 | % | 11.72 | % | ||||||||||||||||||
| Tier 1 common to risk-weighted assets (c) (e) | N/A | N/A | N/A | 11.43 | % | 11.40 | % | |||||||||||||||||||||
| Total equity to total assets | 10.20 | % | 9.98 | % | 9.72 | % | 10.06 | % | 10.89 | % | ||||||||||||||||||
| Tangible common equity/tangible assets (“TCE/TA”) (e) | 8.04 | % | 7.80 | % | 7.57 | % | 7.90 | % | 8.65 | % | ||||||||||||||||||
| Period-end shares outstanding (f) | 234,237 | 234,021 | 233,499 | 234,220 | 235,249 | * | * | |||||||||||||||||||||
| Cash dividends declared per common share | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.05 | $ | 0.05 | * | 20 | % | |||||||||||||||
| Book value per common share | $ | 9.38 | $ | 9.09 | $ | 9.03 | $ | 9.35 | $ | 9.44 | ||||||||||||||||||
| Tangible book value per common share (e) | $ | 8.65 | $ | 8.35 | $ | 8.28 | $ | 8.60 | $ | 8.76 | ||||||||||||||||||
| Market capitalization (millions) | $ | 3,321.5 | $ | 3,667.1 | $ | 3,336.7 | $ | 3,180.7 | $ | 2,888.9 | ||||||||||||||||||
Certain previously reported amounts have been reclassified to agree with current presentation.
NM - Not Meaningful
* Amount is less than one percent.
| (a) | Current quarter is an estimate. All quarters in 2015 reflect revisions to regulatory capital definitions under the Basel III risk-based capital rules as phased-in. |
| (b) | FHN’s outstanding trust preferred securities were redeemed in 3Q15. 2Q15 and 1Q15 include $50 million of Tier 1 qualifying trust preferred securities. All periods in 2014 include $200 million of Tier 1 qualifying trust preferred securities. |
| (c) | See Glossary of Terms for definition of ratio. |
| (d) | FHN’s outstanding trust preferred securities were redeemed in 3Q15. 2Q15 and 1Q15 include $150 million of Tier 2 qualifying trust preferred which are excluded from Tier 1 under Basel III. |
| (e) | Refer to the Non-GAAP to GAAP reconciliation on page 22 of this financial supplement. |
| (f) | In periods prior to 2Q15, decreases primarily relate to shares purchased under share repurchase programs. |
| 12 |
FHN BUSINESS SEGMENT HIGHLIGHTS
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| (Thousands) | 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | |||||||||||||||||||||
| Regional Banking | ||||||||||||||||||||||||||||
| Net interest income | $ | 165,258 | $ | 165,908 | $ | 154,409 | $ | 157,557 | $ | 153,868 | * | 7 | % | |||||||||||||||
| Noninterest income | 62,773 | 65,989 | 60,204 | 64,331 | 64,155 | (5 | )% | (2 | )% | |||||||||||||||||||
| Total revenues | 228,031 | 231,897 | 214,613 | 221,888 | 218,023 | (2 | )% | 5 | % | |||||||||||||||||||
| Provision for loan losses | 6,696 | 17,078 | 4,915 | 5,568 | 2,204 | (61 | )% | NM | ||||||||||||||||||||
| Noninterest expense | 135,776 | 144,203 | 135,780 | 137,546 | 135,903 | (6 | )% | * | ||||||||||||||||||||
| Income before income taxes | 85,559 | 70,616 | 73,918 | 78,774 | 79,916 | 21 | % | 7 | % | |||||||||||||||||||
| Provision for income taxes | 30,809 | 24,996 | 26,381 | 28,057 | 28,561 | 23 | % | 8 | % | |||||||||||||||||||
| Net income | $ | 54,750 | $ | 45,620 | $ | 47,537 | $ | 50,717 | $ | 51,355 | 20 | % | 7 | % | ||||||||||||||
| Fixed Income | ||||||||||||||||||||||||||||
| Net interest income | $ | 3,008 | $ | 4,297 | $ | 4,323 | $ | 3,675 | $ | 2,950 | (30 | )% | 2 | % | ||||||||||||||
| Noninterest income | 51,756 | 56,001 | 61,565 | 48,506 | 49,896 | (8 | )% | 4 | % | |||||||||||||||||||
| Total revenues | 54,764 | 60,298 | 65,888 | 52,181 | 52,846 | (9 | )% | 4 | % | |||||||||||||||||||
| Noninterest expense | 48,200 | 51,214 | 54,683 | 46,218 | 47,915 | (6 | )% | 1 | % | |||||||||||||||||||
| Income before income taxes | 6,564 | 9,084 | 11,205 | 5,963 | 4,931 | (28 | )% | 33 | % | |||||||||||||||||||
| Provision for income taxes | 2,115 | 3,171 | 4,167 | 2,059 | 1,696 | (33 | )% | 25 | % | |||||||||||||||||||
| Net income | $ | 4,449 | $ | 5,913 | $ | 7,038 | $ | 3,904 | $ | 3,235 | (25 | )% | 38 | % | ||||||||||||||
| Corporate | ||||||||||||||||||||||||||||
| Net interest income/(expense) | $ | (19,037 | ) | $ | (17,376 | ) | $ | (16,084 | ) | $ | (18,038 | ) | $ | (14,246 | ) | (10 | )% | (34 | )% | |||||||||
| Noninterest income | 8,559 | 3,901 | 5,385 | 4,400 | 4,139 | NM | NM | |||||||||||||||||||||
| Total revenues | (10,478 | ) | (13,475 | ) | (10,699 | ) | (13,638 | ) | (10,107 | ) | 22 | % | (4 | )% | ||||||||||||||
| Noninterest expense | 11,521 | 13,770 | 14,169 | 14,017 | 16,511 | (16 | )% | (30 | )% | |||||||||||||||||||
| Loss before income taxes | (21,999 | ) | (27,245 | ) | (24,868 | ) | (27,655 | ) | (26,618 | ) | 19 | % | 17 | % | ||||||||||||||
| Benefit for income taxes | (26,105 | ) | (15,882 | ) | (11,640 | ) | (19,601 | ) | (16,928 | ) | (64 | )% | (54 | )% | ||||||||||||||
| Net income/(loss) | $ | 4,106 | $ | (11,363 | ) | $ | (13,228 | ) | $ | (8,054 | ) | $ | (9,690 | ) | NM | NM | ||||||||||||
| Non-Strategic | ||||||||||||||||||||||||||||
| Net interest income | $ | 14,333 | $ | 13,811 | $ | 14,218 | $ | 15,856 | $ | 16,969 | 4 | % | (16 | )% | ||||||||||||||
| Noninterest income (a) | 2,015 | 4,410 | 2,535 | 2,361 | 39,625 | (54 | )% | (95 | )% | |||||||||||||||||||
| Total revenues | 16,348 | 18,221 | 16,753 | 18,217 | 56,594 | (10 | )% | (71 | )% | |||||||||||||||||||
| Provision/(provision credit) for loan losses | (5,696 | ) | (15,078 | ) | 85 | 432 | 3,796 | 62 | % | NM | ||||||||||||||||||
| Noninterest expense (b) | 8,356 | 9,207 | 171,589 | 9,528 | 43,687 | (9 | )% | (81 | )% | |||||||||||||||||||
| Income/(loss) before income taxes | 13,688 | 24,092 | (154,921 | ) | 8,257 | 9,111 | (43 | )% | 50 | % | ||||||||||||||||||
| Provision/(benefit) for income taxes | 5,288 | 9,305 | (41,169 | ) | 3,184 | 3,513 | (43 | )% | 51 | % | ||||||||||||||||||
| Net income/(loss) | $ | 8,400 | $ | 14,787 | $ | (113,752 | ) | $ | 5,073 | $ | 5,598 | (43 | )% | 50 | % | |||||||||||||
| Total Consolidated | ||||||||||||||||||||||||||||
| Net interest income | $ | 163,562 | $ | 166,640 | $ | 156,866 | $ | 159,050 | $ | 159,541 | (2 | )% | 3 | % | ||||||||||||||
| Noninterest income | 125,103 | 130,301 | 129,689 | 119,598 | 157,815 | (4 | )% | (21 | )% | |||||||||||||||||||
| Total revenues | 288,665 | 296,941 | 286,555 | 278,648 | 317,356 | (3 | )% | (9 | )% | |||||||||||||||||||
| Provision for loan losses | 1,000 | 2,000 | 5,000 | 6,000 | 6,000 | (50 | )% | (83 | )% | |||||||||||||||||||
| Noninterest expense | 203,853 | 218,394 | 376,221 | 207,309 | 244,016 | (7 | )% | (16 | )% | |||||||||||||||||||
| Income/(loss) before income taxes | 83,812 | 76,547 | (94,666 | ) | 65,339 | 67,340 | 9 | % | 24 | % | ||||||||||||||||||
| Provision/(benefit) for income taxes | 12,107 | 21,590 | (22,261 | ) | 13,699 | 16,842 | (44 | )% | (28 | )% | ||||||||||||||||||
| Net income/(loss) | $ | 71,705 | $ | 54,957 | $ | (72,405 | ) | $ | 51,640 | $ | 50,498 | 30 | % | 42 | % | |||||||||||||
NM - Not meaningful
* Amount is less than one percent.
| (a) | 3Q14 includes $39.7 million of gains on the sales of HFS mortgage loans. | |
| (b) | 1Q15 includes $162.5 million of loss accruals related to the settlement of potential claims related to FHN’s underwriting and origination of FHA-insured mortgage loans; 3Q14 includes $50.0 million of loss accruals related to legal matters, partially offset by $15.0 million of expense reversals related to agreements with insurance companies for the recovery of expenses FHN incurred related to litigation losses in previous periods. | |
| 13 |
FHN REGIONAL BANKING
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | ||||||||||||||||||||||
| Income Statement (thousands) | ||||||||||||||||||||||||||||
| Net interest income | $ | 165,258 | $ | 165,908 | $ | 154,409 | $ | 157,557 | $ | 153,868 | * | 7 | % | |||||||||||||||
| Provision for loan losses | 6,696 | 17,078 | 4,915 | 5,568 | 2,204 | (61 | )% | NM | ||||||||||||||||||||
| Noninterest income: | ||||||||||||||||||||||||||||
| NSF / Overdraft fees (a) | 11,678 | 10,664 | 9,144 | 11,619 | 11,425 | 10 | % | 2 | % | |||||||||||||||||||
| Cash management fees | 8,482 | 8,884 | 8,878 | 8,719 | 8,522 | (5 | )% | * | ||||||||||||||||||||
| Debit card income | 3,318 | 3,327 | 3,064 | 3,117 | 2,945 | * | 13 | % | ||||||||||||||||||||
| Other | 4,398 | 4,538 | 4,537 | 4,655 | 4,705 | (3 | )% | (7 | )% | |||||||||||||||||||
| Total deposit transactions and cash management | 27,876 | 27,413 | 25,623 | 28,110 | 27,597 | 2 | % | 1 | % | |||||||||||||||||||
| Brokerage, management fees and commissions | 11,620 | 12,456 | 11,399 | 11,647 | 12,333 | (7 | )% | (6 | )% | |||||||||||||||||||
| Trust services and investment management | 6,605 | 7,432 | 6,713 | 6,960 | 6,794 | (11 | )% | (3 | )% | |||||||||||||||||||
| Bankcard income | 5,269 | 5,562 | 4,915 | 5,469 | 5,224 | (5 | )% | 1 | % | |||||||||||||||||||
| Other service charges | 2,562 | 2,637 | 2,422 | 2,395 | 2,630 | (3 | )% | (3 | )% | |||||||||||||||||||
| Miscellaneous revenue | 8,841 | 10,489 | 9,132 | 9,750 | 9,577 | (16 | )% | (8 | )% | |||||||||||||||||||
| Total noninterest income | 62,773 | 65,989 | 60,204 | 64,331 | 64,155 | (5 | )% | (2 | )% | |||||||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||||||||
| Employee compensation, incentives, and benefits | 49,078 | 49,692 | 48,272 | 46,175 | 46,259 | (1 | )% | 6 | % | |||||||||||||||||||
| Other (b) | 86,698 | 94,511 | 87,508 | 91,371 | 89,644 | (8 | )% | (3 | )% | |||||||||||||||||||
| Total noninterest expense | 135,776 | 144,203 | 135,780 | 137,546 | 135,903 | (6 | )% | * | ||||||||||||||||||||
| Income before income taxes | $ | 85,559 | $ | 70,616 | $ | 73,918 | $ | 78,774 | $ | 79,916 | 21 | % | 7 | % | ||||||||||||||
| PPNR (c) | 92,255 | 87,694 | 78,833 | 84,342 | 82,120 | 5 | % | 12 | % | |||||||||||||||||||
| Efficiency ratio (d) | 59.54 | % | 62.18 | % | 63.27 | % | 61.99 | % | 62.33 | % | ||||||||||||||||||
| Balance Sheet (millions) | ||||||||||||||||||||||||||||
| Average loans | $ | 14,312 | $ | 14,326 | $ | 13,513 | $ | 13,129 | $ | 12,886 | * | 11 | % | |||||||||||||||
| Average other earning assets | 58 | 55 | 48 | 52 | 63 | 5 | % | (8 | )% | |||||||||||||||||||
| Total average earning assets | 14,370 | 14,381 | 13,561 | 13,181 | 12,949 | * | 11 | % | ||||||||||||||||||||
| Average core deposits | 16,976 | 16,752 | 16,263 | 15,335 | 14,639 | 1 | % | 16 | % | |||||||||||||||||||
| Average other deposits | 354 | 406 | 423 | 452 | 464 | (13 | )% | (24 | )% | |||||||||||||||||||
| Total average deposits | 17,330 | 17,158 | 16,686 | 15,787 | 15,103 | 1 | % | 15 | % | |||||||||||||||||||
| Total period-end deposits | 17,287 | 17,226 | 17,240 | 16,373 | 15,119 | * | 14 | % | ||||||||||||||||||||
| Total period-end assets | 15,163 | 15,264 | 14,894 | 14,350 | 13,695 | (1 | )% | 11 | % | |||||||||||||||||||
| Net interest margin (e) | 4.63 | % | 4.69 | % | 4.68 | % | 4.78 | % | 4.74 | % | ||||||||||||||||||
| Net interest spread | 3.33 | 3.35 | 3.37 | 3.36 | 3.41 | |||||||||||||||||||||||
| Loan yield | 3.45 | 3.48 | 3.51 | 3.50 | 3.56 | |||||||||||||||||||||||
| Deposit average yield | 0.12 | 0.13 | 0.14 | 0.14 | 0.15 | |||||||||||||||||||||||
| Key Statistics | �� | |||||||||||||||||||||||||||
| Financial center locations (f) | 174 | 175 | 178 | 178 | 172 | (1 | )% | 1 | % | |||||||||||||||||||
NM - Not meaningful
* Amount is less than one percent.
| (a) | 1Q15 levels primarily attributable to seasonality in NSF fees. |
| (b) | 3Q15 decrease primarily driven by lower allocated personnel expenses due in large part to gains recognized in third quarter related to an employee benefit plan amendment. |
| (c) | Pre-provision net revenue is not a GAAP number but is used in regulatory stress test reporting. The presentation of PPNR in this Financial Supplement follows the regulatory definition. |
| (d) | Noninterest expense divided by total revenue. |
| (e) | Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes. |
| (f) | 4Q14 increase related to the acquisition of bank branches. The five branches of TrustAtlantic Bank were not included at September 30, 2015, but are expected to be First Tennessee Bank branches by close of business on October 16, 2015. |
| 14 |
FHN FIXED INCOME
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | ||||||||||||||||||||||
| Income Statement (thousands) | ||||||||||||||||||||||||||||
| Net interest income | $ | 3,008 | $ | 4,297 | $ | 4,323 | $ | 3,675 | $ | 2,950 | (30 | )% | 2 | % | ||||||||||||||
| Noninterest income: | ||||||||||||||||||||||||||||
| Fixed income product revenue | 42,969 | 46,685 | 53,510 | 39,030 | 41,216 | (8 | )% | 4 | % | |||||||||||||||||||
| Other | 8,787 | 9,316 | 8,055 | 9,476 | 8,680 | (6 | )% | 1 | % | |||||||||||||||||||
| Total noninterest income | 51,756 | 56,001 | 61,565 | 48,506 | 49,896 | (8 | )% | 4 | % | |||||||||||||||||||
| Noninterest expense | 48,200 | 51,214 | 54,683 | 46,218 | 47,915 | (6 | )% | 1 | % | |||||||||||||||||||
| Income before income taxes | $ | 6,564 | $ | 9,084 | $ | 11,205 | $ | 5,963 | $ | 4,931 | (28 | )% | 33 | % | ||||||||||||||
| Efficiency ratio (a) | 88.01 | % | 84.93 | % | 82.99 | % | 88.57 | % | 90.67 | % | ||||||||||||||||||
| Fixed income product average daily revenue | $ | 671 | $ | 729 | $ | 877 | $ | 630 | $ | 644 | (8 | )% | 4 | % | ||||||||||||||
| Balance Sheet (millions) | ||||||||||||||||||||||||||||
| Average trading inventory | $ | 1,133 | $ | 1,358 | $ | 1,366 | $ | 1,177 | $ | 1,054 | (17 | )% | 7 | % | ||||||||||||||
| Average other earning assets | 763 | 761 | 781 | 677 | 648 | * | 18 | % | ||||||||||||||||||||
| Total average earning assets | 1,896 | 2,119 | 2,147 | 1,854 | 1,702 | (11 | )% | 11 | % | |||||||||||||||||||
| Total period-end assets | 2,361 | 2,273 | 2,808 | 2,138 | 2,338 | 4 | % | 1 | % | |||||||||||||||||||
| Net interest margin (b) | 0.73 | % | 0.87 | % | 0.83 | % | 0.85 | % | 0.75 | % | ||||||||||||||||||
* Amount is less than one percent.
| (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 35 percent and, where applicable, state income taxes. |
FHN CORPORATE
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | ||||||||||||||||||||||
| Income Statement (thousands) | ||||||||||||||||||||||||||||
| Net interest income/(expense) | $ | (19,037 | ) | $ | (17,376 | ) | $ | (16,084 | ) | $ | (18,038 | ) | $ | (14,246 | ) | (10 | )% | (34 | )% | |||||||||
| Noninterest income excluding securities gains/(losses) (a) | 8,904 | 3,893 | 5,109 | 4,400 | 4,005 | NM | NM | |||||||||||||||||||||
| Securities gains/(losses), net | (345 | ) | 8 | 276 | — | 134 | NM | NM | ||||||||||||||||||||
| Noninterest expense | 11,521 | 13,770 | 14,169 | 14,017 | 16,511 | (16 | )% | (30 | )% | |||||||||||||||||||
| Loss before income taxes | $ | (21,999 | ) | $ | (27,245 | ) | $ | (24,868 | ) | $ | (27,655 | ) | $ | (26,618 | ) | 19 | % | 17 | % | |||||||||
| Average Balance Sheet (millions) | ||||||||||||||||||||||||||||
| Average loans | $ | 120 | $ | 128 | $ | 138 | $ | 148 | $ | 153 | (6 | )% | (22 | )% | ||||||||||||||
| Total earning assets | $ | 4,592 | $ | 4,282 | $ | 5,162 | $ | 4,703 | $ | 3,999 | 7 | % | 15 | % | ||||||||||||||
| Net interest margin (b) | (1.63 | )% | (1.63 | )% | (1.28 | )% | (1.40 | )% | (1.25 | )% | ||||||||||||||||||
NM - Not meaningful
| (a) | 3Q15 includes a $5.8 million gain related to the extinguishment of debt. |
| (b) | Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes. |
| 15 |
FHN NON-STRATEGIC
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | ||||||||||||||||||||||
| Income Statement (thousands) | ||||||||||||||||||||||||||||
| Net interest income | $ | 14,333 | $ | 13,811 | $ | 14,218 | $ | 15,856 | $ | 16,969 | 4 | % | (16 | )% | ||||||||||||||
| Noninterest income: | ||||||||||||||||||||||||||||
| Mortgage warehouse valuation (a) | 698 | 270 | 1,228 | 1,240 | 41,287 | NM | (98 | )% | ||||||||||||||||||||
| Miscellaneous revenue (b) | 1,317 | 4,140 | 1,307 | 1,121 | (667 | ) | (68 | )% | NM | |||||||||||||||||||
| Total noninterest income excluding securities gains/(losses) | 2,015 | 4,410 | 2,535 | 2,361 | 40,620 | (54 | )% | (95 | )% | |||||||||||||||||||
| Securities gains/(losses), net | — | — | — | — | (995 | ) | NM | NM | ||||||||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||||||||
| Repurchase and foreclosure provision (c) | — | — | — | — | (4,300 | ) | NM | NM | ||||||||||||||||||||
| Other expenses (d) | 8,356 | 9,207 | 171,589 | 9,528 | 47,987 | (9 | )% | (83 | )% | |||||||||||||||||||
| Total noninterest expense | 8,356 | 9,207 | 171,589 | 9,528 | 43,687 | (9 | )% | (81 | )% | |||||||||||||||||||
| Provision/(provision credit) for loan losses | (5,696 | ) | (15,078 | ) | 85 | 432 | 3,796 | 62 | % | NM | ||||||||||||||||||
| Income/(loss) before income taxes | $ | 13,688 | $ | 24,092 | $ | (154,921 | ) | $ | 8,257 | $ | 9,111 | (43 | )% | 50 | % | |||||||||||||
| Average Balance Sheet (millions) | ||||||||||||||||||||||||||||
| Loans | $ | 2,201 | $ | 2,337 | $ | 2,472 | $ | 2,592 | $ | 2,724 | (6 | )% | (19 | )% | ||||||||||||||
| Loans held-for-sale (e) | 113 | 115 | 120 | 125 | 298 | (2 | )% | (62 | )% | |||||||||||||||||||
| Trading securities | 5 | 5 | 5 | 6 | 6 | * | (17 | )% | ||||||||||||||||||||
| Allowance for loan losses | (87 | ) | (99 | ) | (105 | ) | (110 | ) | (111 | ) | (12 | )% | (22 | )% | ||||||||||||||
| Other assets | 14 | 51 | 63 | 72 | 78 | (73 | )% | (82 | )% | |||||||||||||||||||
| Total assets | 2,246 | 2,409 | 2,555 | 2,685 | 2,995 | (7 | )% | (25 | )% | |||||||||||||||||||
| Net interest margin (f) | 2.46 | % | 2.25 | % | 2.19 | % | 2.32 | % | 2.23 | % | ||||||||||||||||||
| Efficiency ratio (g) | 51.11 | % | 50.53 | % | NM | 52.30 | % | 75.86 | % | |||||||||||||||||||
| Mortgage Warehouse - Period-end (millions) | ||||||||||||||||||||||||||||
| Ending warehouse balance (loans held-for-sale) | $ | 104 | $ | 106 | $ | 108 | $ | 115 | $ | 120 | (2 | )% | (13 | )% | ||||||||||||||
| Key Servicing Metric | ||||||||||||||||||||||||||||
| Ending servicing portfolio (millions) (h) | $ | 879 | $ | 922 | $ | 966 | $ | 1,013 | $ | 1,090 | (5 | )% | (19 | )% | ||||||||||||||
| NM - Not meaningful | |
| * Amount is less than one percent. | |
| (a) | 3Q14 includes $39.7 million of gains on the sale of HFS mortgage loans. |
| (b) | 2Q15 includes a $2.7 million pre-tax gain on sale of property. |
| (c) | 3Q14 expense reversal associated with the settlement of certain repurchase claims. |
| (d) | 1Q15 includes $162.5 million of loss accruals related to the settlement of potential claims related to FHN’s underwriting and origination of FHA-insured mortgage loans; 3Q14 includes $50.0 million of loss accruals related to legal matters, partially offset by $15.0 million of expense reversals associated with agreements with insurance companies for the recovery of expenses FHN incurred related to litigation losses in previous periods. |
| (e) | 4Q14 decrease relates to the sale of mortgage loans HFS late in third quarter. |
| (f) | Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes. |
| (g) | Noninterest expense divided by total revenue excluding securities gains/(losses). |
| (h) | Includes mortgage loans serviced from FHN's legacy mortgage banking business, legacy equity lending serviced for others, and mortgage loans in portfolio and warehouse. |
| 16 |
FHN ASSET QUALITY: CONSOLIDATED
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| (Thousands) | 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | |||||||||||||||||||||
| Allowance for Loan Losses Walk-Forward | ||||||||||||||||||||||||||||
| Beginning reserve | $ | 221,351 | $ | 228,328 | $ | 232,448 | $ | 238,641 | $ | 243,628 | (3 | )% | (9 | )% | ||||||||||||||
| Provision | 1,000 | 2,000 | 5,000 | 6,000 | 6,000 | (50 | )% | (83 | )% | |||||||||||||||||||
| Charge-offs | (21,810 | ) | (19,434 | ) | (17,999 | ) | (23,306 | ) | (23,684 | ) | 12 | % | (8 | )% | ||||||||||||||
| Recoveries | 10,273 | 10,457 | 8,879 | 11,113 | 12,697 | (2 | )% | (19 | )% | |||||||||||||||||||
| Ending balance | $ | 210,814 | $ | 221,351 | $ | 228,328 | $ | 232,448 | $ | 238,641 | (5 | )% | (12 | )% | ||||||||||||||
| Reserve for unfunded commitments | 6,231 | 5,561 | 4,135 | 4,770 | 2,313 | 12 | % | NM | ||||||||||||||||||||
| Total allowance for loan losses plus reserve for unfunded commitments | $ | 217,045 | $ | 226,912 | $ | 232,463 | $ | 237,218 | $ | 240,954 | (4 | )% | (10 | )% | ||||||||||||||
| Allowance for Loan Losses | ||||||||||||||||||||||||||||
| Regional Banking | $ | 128,942 | $ | 132,741 | $ | 125,982 | $ | 126,812 | $ | 127,873 | (3 | )% | 1 | % | ||||||||||||||
| Non-Strategic | 81,872 | 88,610 | 102,346 | 105,636 | 110,768 | (8 | )% | (26 | )% | |||||||||||||||||||
| Total allowance for loan losses | $ | 210,814 | $ | 221,351 | $ | 228,328 | $ | 232,448 | $ | 238,641 | (5 | )% | (12 | )% | ||||||||||||||
| Nonperforming Assets | ||||||||||||||||||||||||||||
| Regional Banking | ||||||||||||||||||||||||||||
| Nonperforming loans | $ | 50,986 | $ | 69,094 | $ | 63,620 | $ | 64,654 | $ | 70,805 | (26 | )% | (28 | )% | ||||||||||||||
| Foreclosed real estate (a) | 17,042 | 19,230 | 19,704 | 20,451 | 25,404 | (11 | )% | (33 | )% | |||||||||||||||||||
| Total Regional Banking | $ | 68,028 | $ | 88,324 | $ | 83,324 | $ | 85,105 | $ | 96,209 | (23 | )% | (29 | )% | ||||||||||||||
| Non-Strategic | ||||||||||||||||||||||||||||
| Nonperforming loans | $ | 129,951 | $ | 130,894 | $ | 133,804 | $ | 135,740 | $ | 139,038 | (1 | )% | (7 | )% | ||||||||||||||
| Nonperforming loans held-for-sale after fair value adjustments | 7,347 | 6,372 | 6,888 | 7,643 | 7,931 | 15 | % | (7 | )% | |||||||||||||||||||
| Foreclosed real estate (a) | 8,830 | 9,879 | 9,977 | 9,979 | 9,857 | (11 | )% | (10 | )% | |||||||||||||||||||
| Total Non-Strategic | $ | 146,128 | $ | 147,145 | $ | 150,669 | $ | 153,362 | $ | 156,826 | (1 | )% | (7 | )% | ||||||||||||||
| Corporate | ||||||||||||||||||||||||||||
| Nonperforming loans | $ | 3,043 | $ | 3,079 | $ | 2,805 | $ | 3,045 | $ | 3,903 | (1 | )% | (22 | )% | ||||||||||||||
| Total nonperforming assets | $ | 217,199 | $ | 238,548 | $ | 236,798 | $ | 241,512 | $ | 256,938 | (9 | )% | (15 | )% | ||||||||||||||
| Net Charge-Offs | ||||||||||||||||||||||||||||
| Regional Banking | $ | 10,495 | $ | 10,318 | $ | 5,745 | $ | 6,629 | $ | 6,132 | 2 | % | 71 | % | ||||||||||||||
| Non-Strategic | 1,042 | (1,341 | ) | 3,375 | 5,564 | 4,855 | NM | (79 | )% | |||||||||||||||||||
| Total net charge-offs | $ | 11,537 | $ | 8,977 | $ | 9,120 | $ | 12,193 | $ | 10,987 | 29 | % | 5 | % | ||||||||||||||
| Consolidated Key Ratios (b) | ||||||||||||||||||||||||||||
| NPL % | 1.10 | % | 1.20 | % | 1.20 | % | 1.25 | % | 1.35 | % | ||||||||||||||||||
| NPA % | 1.25 | 1.37 | 1.37 | 1.44 | 1.57 | |||||||||||||||||||||||
| Net charge-offs % | 0.28 | 0.21 | 0.23 | 0.30 | 0.28 | |||||||||||||||||||||||
| Allowance / loans | 1.26 | 1.31 | 1.36 | 1.43 | 1.51 | |||||||||||||||||||||||
| Allowance / NPL | 1.15 | x | 1.09 | x | 1.14 | x | 1.14 | x | 1.12 | x | ||||||||||||||||||
| Allowance / NPA | 1.00 | x | 0.95 | x | 0.99 | x | 0.99 | x | 0.96 | x | ||||||||||||||||||
| Allowance / net charge-offs | 4.61 | x | 6.15 | x | 6.17 | x | 4.81 | x | 5.47 | x | ||||||||||||||||||
| Other | ||||||||||||||||||||||||||||
| Loans past due 90 days or more (c) | $ | 38,455 | $ | 39,077 | $ | 46,889 | $ | 50,699 | $ | 57,786 | (2 | )% | (33 | )% | ||||||||||||||
| Guaranteed portion (c) | 16,856 | 16,221 | 18,552 | 24,036 | 27,020 | 4 | % | (38 | )% | |||||||||||||||||||
| Foreclosed real estate from government insured loans | 9,460 | 11,159 | 10,096 | 9,492 | 12,735 | (15 | )% | (26 | )% | |||||||||||||||||||
| Period-end loans, net of unearned income (millions) | 16,725 | 16,937 | 16,732 | 16,230 | 15,812 | (1 | )% | 6 | % | |||||||||||||||||||
| NM - Not meaningful | |
| * Amount is less than one percent. | |
| (a) | Excludes foreclosed real estate from government-insured mortgages. |
| (b) | See Glossary of Terms for definitions of Consolidated Key Ratios. |
| (c) | Includes loans held-for-sale. |
| 17 |
FHN ASSET QUALITY: CONSOLIDATED
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | ||||||||||||||||||||||
| Key Portfolio Details | ||||||||||||||||||||||||||||
| C&I | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 9,610 | $ | 9,833 | $ | 9,638 | $ | 9,007 | $ | 8,477 | (2 | )% | 13 | % | ||||||||||||||
| 30+ Delinq. % (a) | 0.09 | % | 0.08 | % | 0.07 | % | 0.05 | % | 0.10 | % | ||||||||||||||||||
| NPL % | 0.31 | 0.44 | 0.35 | 0.36 | 0.49 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 0.26 | 0.17 | 0.07 | 0.19 | NM | |||||||||||||||||||||||
| Allowance / loans % | 0.74 | % | 0.80 | % | 0.70 | % | 0.74 | % | 0.82 | % | ||||||||||||||||||
| Allowance / charge-offs | 2.83 | x | 4.85 | x | 10.41 | x | 4.05 | x | NM | |||||||||||||||||||
| Commercial Real Estate | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 1,488 | $ | 1,401 | $ | 1,321 | $ | 1,278 | $ | 1,278 | 6 | % | 16 | % | ||||||||||||||
| 30+ Delinq. % (a)(b) | 0.43 | % | 0.23 | % | 0.33 | % | 0.14 | % | 0.33 | % | ||||||||||||||||||
| NPL % | 0.54 | 0.84 | 1.01 | 1.20 | 1.11 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | NM | 0.22 | 0.03 | NM | 0.47 | |||||||||||||||||||||||
| Allowance / loans % | 1.70 | % | 1.53 | % | 1.34 | % | 1.45 | % | 1.21 | % | ||||||||||||||||||
| Allowance / charge-offs | NM | 7.29 | x | 45.37 | x | NM | 2.64 | x | ||||||||||||||||||||
| Consumer Real Estate | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 4,814 | $ | 4,870 | $ | 4,923 | $ | 5,048 | $ | 5,131 | (1 | )% | (6 | )% | ||||||||||||||
| 30+ Delinq. % (a) | 0.92 | % | 0.94 | % | 0.98 | % | 1.10 | % | 1.04 | % | ||||||||||||||||||
| NPL % | 2.32 | 2.35 | 2.43 | 2.39 | 2.41 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 0.18 | NM | 0.31 | 0.38 | 0.60 | |||||||||||||||||||||||
| Allowance / loans % | 1.71 | % | 1.75 | % | 2.22 | % | 2.24 | % | 2.31 | % | ||||||||||||||||||
| Allowance / charge-offs | 9.41 | x | NM | 7.06 | x | 5.85 | x | 3.83 | x | |||||||||||||||||||
| Permanent Mortgage | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 464 | $ | 488 | $ | 512 | $ | 539 | $ | 573 | (5 | )% | (19 | )% | ||||||||||||||
| 30+ Delinq. % (a) | 2.01 | % | 2.26 | % | 2.76 | % | 1.72 | % | 2.73 | % | ||||||||||||||||||
| NPL % | 7.30 | 6.66 | 6.43 | 6.32 | 5.93 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 0.67 | 0.11 | 0.44 | 1.00 | 0.25 | |||||||||||||||||||||||
| Allowance / loans % | 4.33 | % | 4.59 | % | 3.94 | % | 3.55 | % | 3.53 | % | ||||||||||||||||||
| Allowance / charge-offs | 6.25 | x | 40.53 | x | 8.79 | x | 3.46 | x | 14.17 | x | ||||||||||||||||||
| Credit Card and Other | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 349 | $ | 346 | $ | 338 | $ | 358 | $ | 353 | 1 | % | (1 | )% | ||||||||||||||
| 30+ Delinq. % (a) | 1.19 | % | 1.09 | % | 1.20 | % | 1.42 | % | 1.44 | % | ||||||||||||||||||
| NPL % | 0.21 | 0.22 | 0.22 | 0.21 | 0.20 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 2.79 | 5.73 | 3.51 | 3.33 | 3.19 | |||||||||||||||||||||||
| Allowance / loans % | 3.28 | % | 3.84 | % | 4.01 | % | 4.11 | % | 4.17 | % | ||||||||||||||||||
| Allowance / charge-offs | 1.16 | x | 0.66 | x | 1.10 | x | 1.24 | x | 1.31 | x | ||||||||||||||||||
| NM - Not meaningful | |
| Certain previously reported amounts have been reclassified to agree with current presentation. | |
| (a) | 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest. |
| (b) | 3Q15 increase was due to 2 purchased credit impaired loans from the 2013 MNB acquisition. |
| 18 |
FHN ASSET QUALITY: REGIONAL BANKING
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | ||||||||||||||||||||||
| Total Regional Banking | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 14,483 | $ | 14,556 | $ | 14,200 | $ | 13,568 | $ | 13,002 | (1 | )% | 11 | % | ||||||||||||||
| 30+ Delinq. % (a) | 0.25 | % | 0.21 | % | 0.24 | % | 0.22 | % | 0.29 | % | ||||||||||||||||||
| NPL % | 0.35 | 0.47 | 0.45 | 0.48 | 0.54 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 0.29 | 0.29 | 0.17 | 0.20 | 0.19 | |||||||||||||||||||||||
| Allowance / loans % | 0.89 | % | 0.91 | % | 0.89 | % | 0.93 | % | 0.98 | % | ||||||||||||||||||
| Allowance / charge-offs | 3.10 | x | 3.21 | x | 5.41 | x | 4.82 | x | 5.26 | x | ||||||||||||||||||
| Key Portfolio Details | ||||||||||||||||||||||||||||
| C&I | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 9,178 | $ | 9,398 | $ | 9,185 | $ | 8,553 | $ | 8,022 | (2 | )% | 14 | % | ||||||||||||||
| 30+ Delinq. % (a) | 0.10 | % | 0.08 | % | 0.07 | % | 0.05 | % | 0.09 | % | ||||||||||||||||||
| NPL % | 0.18 | 0.32 | 0.24 | 0.24 | 0.37 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 0.33 | 0.18 | 0.08 | 0.21 | NM | |||||||||||||||||||||||
| Allowance / loans % | 0.72 | % | 0.78 | % | 0.68 | % | 0.72 | % | 0.81 | % | ||||||||||||||||||
| Allowance / charge-offs | 2.21 | x | 4.48 | x | 9.42 | x | 3.62 | x | NM | |||||||||||||||||||
| Commercial Real Estate | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 1,488 | $ | 1,400 | $ | 1,320 | $ | 1,273 | $ | 1,274 | 6 | % | 17 | % | ||||||||||||||
| 30+ Delinq. % (a)(b) | 0.43 | % | 0.23 | % | 0.32 | % | 0.14 | % | 0.33 | % | ||||||||||||||||||
| NPL % | 0.54 | 0.84 | 1.00 | 1.14 | 1.04 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | NM | 0.22 | 0.03 | NM | 0.49 | |||||||||||||||||||||||
| Allowance / loans % | 1.70 | % | 1.53 | % | 1.33 | % | 1.43 | % | 1.18 | % | ||||||||||||||||||
| Allowance / charge-offs | NM | 7.22 | x | 52.33 | x | NM | 2.46 | x | ||||||||||||||||||||
| Consumer Real Estate | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 3,469 | $ | 3,413 | $ | 3,358 | $ | 3,385 | $ | 3,356 | 2 | % | 3 | % | ||||||||||||||
| 30+ Delinq. % (a) | 0.48 | % | 0.47 | % | 0.55 | % | 0.57 | % | 0.61 | % | ||||||||||||||||||
| NPL % | 0.75 | 0.78 | 0.84 | 0.86 | 0.83 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 0.11 | 0.08 | 0.15 | 0.11 | 0.39 | |||||||||||||||||||||||
| Allowance / loans % | 0.79 | % | 0.73 | % | 0.97 | % | 0.95 | % | 0.99 | % | ||||||||||||||||||
| Allowance / charge-offs | 7.62 | x | 9.73 | x | 6.45 | x | 8.55 | x | 2.55 | x | ||||||||||||||||||
| Credit Card, Permanent Mortgage, and Other | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 348 | $ | 345 | $ | 337 | $ | 357 | $ | 351 | 1 | % | (1 | )% | ||||||||||||||
| 30+ Delinq. % (a) | 1.33 | % | 1.18 | % | 1.29 | % | 1.51 | % | 1.49 | % | ||||||||||||||||||
| NPL % | 0.14 | 0.14 | 0.15 | 0.14 | 0.15 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized)(c) | 2.49 | 5.57 | 3.22 | 3.00 | 3.01 | |||||||||||||||||||||||
| Allowance / loans % | 3.00 | % | 3.72 | % | 3.88 | % | 4.06 | % | 4.07 | % | ||||||||||||||||||
| Allowance / charge-offs | 1.19 | x | 0.66 | x | 1.16 | x | 1.36 | x | 1.36 | x | ||||||||||||||||||
| ASSET QUALITY: CORPORATE | ||||||||||||||||||||||||||||
| Permanent Mortgage | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 107 | $ | 113 | $ | 123 | $ | 136 | $ | 147 | (5 | )% | (27 | )% | ||||||||||||||
| 30+ Delinq. % (a) | 2.95 | % | 2.51 | % | 3.41 | % | 2.32 | % | 2.24 | % | ||||||||||||||||||
| NPL % | 2.85 | 2.72 | 2.29 | 2.25 | 2.65 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | NM | NM | NM | NM | NM | |||||||||||||||||||||||
| Allowance / loans % | NM | NM | NM | NM | NM | |||||||||||||||||||||||
| Allowance / charge-offs | NM | NM | NM | NM | NM | |||||||||||||||||||||||
| NM - Not meaningful | |
| (a) | 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest. |
| (b) | 3Q15 increase was due to 2 purchased credit impaired loans from the 2013 MNB acquisition. |
| (c) | 2Q15 increase was primarily driven by charge-offs in a sub segment of the credit card portfolio which had previously been reserved for. |
| 19 |
FHN ASSET QUALITY: NON-STRATEGIC
Quarterly, Unaudited
| 3Q15 Changes vs. | ||||||||||||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | 2Q15 | 3Q14 | ||||||||||||||||||||||
| Total Non-Strategic | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 2,135 | $ | 2,268 | $ | 2,409 | $ | 2,527 | $ | 2,663 | (6 | )% | (20 | )% | ||||||||||||||
| 30+ Delinq. % (a) | 1.57 | % | 1.67 | % | 1.67 | % | 1.67 | % | 1.73 | % | ||||||||||||||||||
| NPL % | 6.08 | 5.77 | 5.55 | 5.37 | 5.22 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 0.19 | NM | 0.55 | 0.85 | 0.71 | |||||||||||||||||||||||
| Allowance / loans % | 3.83 | % | 3.91 | % | 4.25 | % | 4.18 | % | 4.16 | % | ||||||||||||||||||
| Allowance / charge-offs | 19.80 | x | NM | 7.48 | x | 4.79 | x | 5.75 | x | |||||||||||||||||||
| Key Portfolio Details | ||||||||||||||||||||||||||||
| C&I | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 432 | $ | 434 | $ | 453 | $ | 454 | $ | 456 | * | (5 | )% | |||||||||||||||
| 30+ Delinq. % (a) | 0.02 | % | 0.02 | % | 0.08 | % | 0.05 | % | 0.23 | % | ||||||||||||||||||
| NPL % | 3.08 | 3.07 | 2.68 | 2.64 | 2.64 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | NM | NM | NM | NM | NM | |||||||||||||||||||||||
| Allowance / loans % | 1.35 | % | 1.23 | % | 1.09 | % | 1.10 | % | 1.01 | % | ||||||||||||||||||
| Allowance / charge-offs | NM | NM | NM | NM | NM | |||||||||||||||||||||||
| Commercial Real Estate | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | — | $ | — | $ | 1 | $ | 5 | $ | 5 | NM | (100 | )% | |||||||||||||||
| 30+ Delinq. % (a) | — | % | — | % | 14.87 | % | — | % | — | % | ||||||||||||||||||
| NPL % | — | — | 18.31 | 17.47 | 20.01 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | NM | NM | 2.64 | 6.91 | NM | |||||||||||||||||||||||
| Allowance / loans % | 5.86 | % | 7.36 | % | 8.22 | % | 9.25 | % | 9.36 | % | ||||||||||||||||||
| Allowance / charge-offs | NM | NM | 1.06x | 1.27x | NM | |||||||||||||||||||||||
| Consumer Real Estate | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 1,345 | $ | 1,458 | $ | 1,565 | $ | 1,663 | $ | 1,775 | (8 | )% | (24 | )% | ||||||||||||||
| 30+ Delinq. % (a) | 2.07 | % | 2.06 | % | 1.92 | % | 2.17 | % | 1.84 | % | ||||||||||||||||||
| NPL % | 6.36 | 6.03 | 5.83 | 5.51 | 5.40 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 0.37 | NM | 0.64 | 0.91 | 0.98 | |||||||||||||||||||||||
| Allowance / loans % | 4.09 | % | 4.14 | % | 4.90 | % | 4.86 | % | 4.79 | % | ||||||||||||||||||
| Allowance / charge-offs | 10.67 | x | NM | 7.36 | x | 5.19 | x | 4.76 | x | |||||||||||||||||||
| Permanent Mortgage | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 348 | $ | 365 | $ | 379 | $ | 393 | $ | 415 | (5 | )% | (16 | )% | ||||||||||||||
| 30+ Delinq. % (a) | 1.58 | % | 2.12 | % | 2.50 | % | 1.40 | % | 2.88 | % | ||||||||||||||||||
| NPL % | 8.71 | 7.92 | 7.82 | 7.78 | 7.13 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 0.90 | 0.14 | 0.59 | 1.44 | 0.29 | |||||||||||||||||||||||
| Allowance / loans % | 5.75 | % | 6.11 | % | 5.32 | % | 4.83 | % | 4.84 | % | ||||||||||||||||||
| Allowance / charge-offs | 6.23 | x | 44.22 | x | 8.82 | x | 3.30 | x | 16.57 | x | ||||||||||||||||||
| Other Consumer | ||||||||||||||||||||||||||||
| Period-end loans ($ millions) | $ | 10 | $ | 11 | $ | 11 | $ | 12 | $ | 12 | (9 | )% | (17 | )% | ||||||||||||||
| 30+ Delinq. % (a) | 1.77 | % | 1.31 | % | 1.40 | % | 2.48 | % | 2.24 | % | ||||||||||||||||||
| NPL % | 7.09 | 6.86 | 6.66 | 6.22 | 5.38 | |||||||||||||||||||||||
| Charge-offs % (qtr. annualized) | 10.22 | 5.97 | 9.24 | 8.21 | 6.74 | |||||||||||||||||||||||
| Allowance / loans % | 10.34 | % | 4.95 | % | 4.69 | % | 3.43 | % | 4.48 | % | ||||||||||||||||||
| Allowance / charge-offs | 0.98 | x | 0.81 | x | 0.49 | x | 0.41 | x | 0.63 | x | ||||||||||||||||||
NM - Not meaningful
* Amount is less than one percent.
(a)30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
| 20 |
FHN: PORTFOLIO METRICS
Unaudited
C&I Portfolio: $9.6 Billion (57.5% of Total Loans) as of September 30, 2015
| % OS | ||||||||
| General Corporate, Commercial, and Business Banking Loans | 79 | % | ||||||
| Loans to Mortgage Companies | 17 | % | ||||||
| Trust Preferred Loans | 3 | % | ||||||
| Bank Holding Company Loans | 1 | % | ||||||
Consumer Real Estate (primarily Home Equity) Portfolio: $4.8 Billion (28.8% of Total Loans)
| Origination LTV and FICO for Portfolio as of September 30, 2015 | Loan-to-Value | ||||||||
| (excludes whole loan insurance) | <=60% | >60% - <=80% | >80% - 90% | >90% | |||||
| FICO score greater than or equal to 740 | 11% | 23% | 17% | 10% | |||||
| FICO score 720-739 | 1% | 4% | 4% | 3% | |||||
| FICO score 700-719 | 1% | 4% | 4% | 2% | |||||
| FICO score 660-699 | 1% | 4% | 3% | 3% | |||||
| FICO score 620-659 | —% | 1% | 1% | 1% | |||||
| FICO score less than 620 | —% | 1% | —% | 1% | |||||
| Origination LTV and FICO for Portfolio - Regional Bank as of September 30, 2015 | Loan-to-Value | ||||||||
| (excludes whole loan insurance) | <=60% | >60% - <=80% | >80% - 90% | >90% | |||||
| FICO score greater than or equal to 740 | 12% | 24% | 18% | 13% | |||||
| FICO score 720-739 | 1% | 4% | 4% | 3% | |||||
| FICO score 700-719 | 1% | 3% | 2% | 2% | |||||
| FICO score 660-699 | 1% | 3% | 3% | 2% | |||||
| FICO score 620-659 | —% | 1% | 1% | —% | |||||
| FICO score less than 620 | —% | 1% | —% | 1% | |||||
| Origination LTV and FICO for Portfolio - Non-Strategic as of September 30, 2015 | Loan-to-Value | ||||||||
| (excludes whole loan insurance) | <=60% | >60% - <=80% | >80% - 90% | >90% | |||||
| FICO score greater than or equal to 740 | 8% | 21% | 15% | 5% | |||||
| FICO score 720-739 | 2% | 6% | 6% | 2% | |||||
| FICO score 700-719 | 2% | 5% | 6% | 2% | |||||
| FICO score 660-699 | 2% | 5% | 4% | 4% | |||||
| FICO score 620-659 | —% | 1% | 2% | 1% | |||||
| FICO score less than 620 | —% | —% | —% | 1% | |||||
Consumer Real Estate Portfolio Detail:
| Origination Characteristics | |||||||||||||
| Vintage | Balances ($B) | W/A Age (mo.) | CLTV | FICO | % TN | % 1st lien | |||||||
| pre-2003 | $0.1 | 164 | 78% | 702 | 41% | 30% | |||||||
| 2003 | $0.1 | 147 | 77% | 717 | 30% | 36% | |||||||
| 2004 | $0.3 | 134 | 80% | 719 | 19% | 28% | |||||||
| 2005 | $0.4 | 122 | 82% | 726 | 15% | 15% | |||||||
| 2006 | $0.4 | 111 | 79% | 731 | 21% | 18% | |||||||
| 2007 | $0.5 | 99 | 81% | 736 | 26% | 19% | |||||||
| 2008 | $0.2 | 88 | 75% | 745 | 72% | 50% | |||||||
| 2009 | $0.1 | 76 | 72% | 748 | 86% | 56% | |||||||
| 2010 | $0.2 | 62 | 79% | 752 | 92% | 72% | |||||||
| 2011 | $0.3 | 50 | 77% | 760 | 89% | 86% | |||||||
| 2012 | $0.6 | 39 | 77% | 763 | 89% | 91% | |||||||
| 2013 | $0.6 | 27 | 78% | 756 | 86% | 85% | |||||||
| 2014 | $0.5 | 15 | 81% | 757 | 86% | 89% | |||||||
| 2015 | $0.5 | 4 | 80% | 759 | 84% | 90% | |||||||
| Total | $4.8 | 64 | 79% | 747 (a) | 63% | 61% | |||||||
| (a) | 747 average portfolio origination FICO; 742 weighted average portfolio FICO (refreshed). | ||||||||||||
| 21 |
FHN NON-GAAP TO GAAP RECONCILIATION
Quarterly, Unaudited
| (Dollars and shares in thousands, except per share data) | 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | |||||||||||||||
| Tangible Common Equity (Non-GAAP) | ||||||||||||||||||||
| (A) Total equity (GAAP) | $ | 2,588,618 | $ | 2,517,905 | $ | 2,499,257 | $ | 2,581,590 | $ | 2,611,814 | ||||||||||
| Less: Noncontrolling interest (a) | 295,431 | 295,431 | 295,431 | 295,431 | 295,431 | |||||||||||||||
| Less: Preferred stock | 95,624 | 95,624 | 95,624 | 95,624 | 95,624 | |||||||||||||||
| (B) Total common equity | $ | 2,197,563 | $ | 2,126,850 | $ | 2,108,202 | $ | 2,190,535 | $ | 2,220,759 | ||||||||||
| Less: Intangible assets (GAAP) (b) | 171,556 | 172,854 | 174,152 | 175,450 | 160,987 | |||||||||||||||
| (C) Tangible common equity (Non-GAAP) | $ | 2,026,007 | $ | 1,953,996 | $ | 1,934,050 | $ | 2,015,085 | $ | 2,059,772 | ||||||||||
| Tangible Assets (Non-GAAP) | ||||||||||||||||||||
| (D) Total assets (GAAP) | $ | 25,384,109 | $ | 25,239,767 | $ | 25,715,888 | $ | 25,668,187 | $ | 23,982,597 | ||||||||||
| Less: Intangible assets (GAAP) (b) | 171,556 | 172,854 | 174,152 | 175,450 | 160,987 | |||||||||||||||
| (E) Tangible assets (Non-GAAP) | $ | 25,212,553 | $ | 25,066,913 | $ | 25,541,736 | $ | 25,492,737 | $ | 23,821,610 | ||||||||||
| Average Tangible Common Equity (Non-GAAP) | ||||||||||||||||||||
| (F) Average total equity (GAAP) | $ | 2,545,544 | $ | 2,511,929 | $ | 2,607,521 | $ | 2,651,729 | $ | 2,631,841 | ||||||||||
| Less: Average noncontrolling interest (a) | 295,431 | 295,431 | 295,431 | 295,431 | 295,431 | |||||||||||||||
| Less: Average preferred stock | 95,624 | 95,624 | 95,624 | 95,624 | 95,624 | |||||||||||||||
| (G) Total average common equity | $ | 2,154,489 | $ | 2,120,874 | $ | 2,216,466 | $ | 2,260,674 | $ | 2,240,786 | ||||||||||
| Less: Average intangible assets (GAAP) (b) | 172,191 | 173,486 | 174,787 | 165,769 | 161,467 | |||||||||||||||
| (H) Average tangible common equity (Non-GAAP) | $ | 1,982,298 | $ | 1,947,388 | $ | 2,041,679 | $ | 2,094,905 | $ | 2,079,319 | ||||||||||
| Annualized Net Income/(Loss) Available to Common Shareholders | ||||||||||||||||||||
| (I) Net income/(loss) available to common shareholders (annualized) | $ | 266,521 | $ | 202,780 | $ | (311,114 | ) | $ | 186,904 | $ | 182,790 | |||||||||
| Period-end Shares Outstanding | ||||||||||||||||||||
| (J) Period-end shares outstanding | 234,237 | 234,021 | 233,499 | 234,220 | 235,249 | |||||||||||||||
| Tier 1 Common (Non-GAAP) | ||||||||||||||||||||
| (K) Tier 1 capital (c) | (f) | (f) | (f) | $ | 2,813,503 | $ | 2,783,147 | |||||||||||||
| Less: Noncontrolling interest - FTBNA preferred stock (d) | (f) | (f) | (f) | 294,816 | 294,816 | |||||||||||||||
| Less: Preferred Stock | (f) | (f) | (f) | 95,624 | 95,624 | |||||||||||||||
| Less: Trust preferred (e) | (f) | (f) | (f) | 200,000 | 200,000 | |||||||||||||||
| (L) Tier 1 common (Non-GAAP) | (f) | (f) | (f) | $ | 2,223,063 | $ | 2,192,707 | |||||||||||||
| Risk Weighted Assets | ||||||||||||||||||||
| (M) Risk weighted assets (c) | (f) | (f) | (f) | $ | 19,452,656 | $ | 19,238,109 | |||||||||||||
| �� | ||||||||||||||||||||
| Ratios | ||||||||||||||||||||
| (I)/(H) Return on average tangible common equity (“ROTCE”) (Non-GAAP) | 13.45 | % | 10.41 | % | (15.24 | )% | 8.92 | % | 8.79 | % | ||||||||||
| (I)/(G) Return on common equity (GAAP) | 12.37 | % | 9.56 | % | (14.04 | )% | 8.27 | % | 8.16 | % | ||||||||||
| (C)/(E) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP) | 8.04 | % | 7.80 | % | 7.57 | % | 7.90 | % | 8.65 | % | ||||||||||
| (A)/(D) Total equity to total assets (GAAP) | 10.20 | % | 9.98 | % | 9.72 | % | 10.06 | % | 10.89 | % | ||||||||||
| (C)/(J) Tangible book value per common share (Non-GAAP) | $ | 8.65 | $ | 8.35 | $ | 8.28 | $ | 8.60 | $ | 8.76 | ||||||||||
| (B)/(J) Book value per common share (GAAP) | $ | 9.38 | $ | 9.09 | $ | 9.03 | $ | 9.35 | $ | 9.44 | ||||||||||
| (L)/(M) Tier 1 common to risk weighted assets (Non-GAAP) | (f) | (f) | (f) | 11.43 | % | 11.40 | % | |||||||||||||
| (K)/(D) Tier 1 capital to total assets (GAAP) | (f) | (f) | (f) | 10.96 | % | 11.60 | % |
| (a) | Included in Total equity on the Consolidated Balance Sheet. |
| (b) | Includes goodwill and other intangible assets, net of amortization. |
| (c) | Defined by and calculated in conformity with bank regulations. |
| (d) | Represents FTBNA preferred stock included in noncontrolling interest. |
| (e) | Included in Term borrowings on the Consolidated Balance Sheet. |
| (f) | In periods prior to 1Q15, these measures were used to reconcile non-GAAP to GAAP information. |
| 22 |
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:A measure of a company’s capital position under U.S. Basel III capital rules first applicable to FHN in 2015, which includes common equity less goodwill, other intangibles and certain other required regulatory deductions as defined in those rules. Common Equity Tier 1 capital under U.S. Basel III in 2015 is not the same as the non-regulatory Tier 1 Common capital commonly used prior to 2015; comparisons between the two are not meaningful.
Core Businesses:Management considers regional banking, fixed income, and corporate as FHN’s core businesses. Non-strategic has significant 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.
Tier 1 Capital Ratio: Ratio consisting of shareholders’ equity adjusted for certain unrealized gains/(losses) on available-for-sale securities, reduced by goodwill, certain other intangible assets, the disallowable portion of mortgage servicing rights and other disallowed assets divided by risk-adjusted assets. The components of Tier 1 capital, including the risk-adjustment of assets, changed significantly for FHN beginning in 2015 so that comparisons of a Tier 1 capital ratio after 2014 with a ratio prior to 2015 may not be meaningful.
Tier 1 Common: A measure of a company’s capital position associated with U.S. capital rules applicable to FHN prior to 2015, which includes Tier 1 capital as then defined less preferred stock amounts.
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.
| 23 |