FIRST QUARTER 2009
FINANCIAL SUPPLEMENT
If you need further information, please contact:
Dave Miller, Investor Relations
901-523-4162
dwmiller@firsthorizon.com
Dave Miller, Investor Relations
901-523-4162
dwmiller@firsthorizon.com
TABLE OF CONTENTS |
Page | ||||
First Horizon National Corporation Segment Structure | 3 | |||
Performance Highlights | 4 | |||
Charges for Restructuring, Repositioning, & Efficiency Initiatives | 6 | |||
Consolidated Results | ||||
Income Statement | ||||
Summary Income Statement | 7 | |||
Income Statement | 8 | |||
Other Income and Other Expense | 9 | |||
Balance Sheet | ||||
Period End Balance Sheet | 10 | |||
Average and Period End Loans | 11 | |||
Average Balance Sheet | 12 | |||
Average Balance Sheet: Income & Expense | 13 | |||
Average Balance Sheet: Yields & Rates | 14 | |||
Mortgage Servicing Rights | 15 | |||
Business Segment Detail | ||||
Segment Highlights | 16 | |||
Regional Banking | 17 | |||
Capital Markets | 18 | |||
National Specialty Lending | 19 | |||
Mortgage Banking | 20 | |||
Mortgage Banking: Servicing | 21 | |||
Corporate | 22 | |||
Capital Highlights | 23 | |||
Asset Quality | ||||
Asset Quality: Consolidated | 24 | |||
Analysis of FAS 114 Loans, ORE, & NPL Rollforward | 26 | |||
Asset Quality: Regional Banking | 27 | |||
Asset Quality: National Specialty Lending | 28 | |||
Asset Quality: Mortgage Banking & Capital Markets | 29 | |||
Asset Quality Highlights: Key Portfolios — Commercial | 30 | |||
Asset Quality Highlights: Key Portfolios — Consumer | 31 | |||
Asset Quality Process | 32 | |||
Glossary of Terms | 33 | |||
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 FHN’s 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 factors or to publicly announce the result of any revisions to any of the forward-looking statements included herein or therein to reflect future events or developments.
FIRST HORIZON NATIONAL CORPORATION SEGMENT STRUCTURE |
Regional Banking
- Traditional banking services for consumers and business | |||
- Activities include lending and deposit taking, investments, insurance, financial planning, trust services, asset management, cash management, and health savings accounts | |||
- Primarily southeastern US footprint, with approximately 200 financial centers in Tennessee and nearby markets | |||
- First Tennessee banking franchise and middle market lending are key businesses | |||
- First Horizon Banks included for periods prior to divestiture |
Capital Markets
- Fixed income sales, trading, and strategies for institutional clients in U.S. and abroad | |||
- Other capital markets products include: |
- Equity research, portfolio advisory, derivatives, and loan trading |
- Correspondent banking provides credit, depository, and other banking related services to other financial institutions |
National Specialty Lending
- Wind-down portfolio that includes lending activities such as consumer lending and construction lending outside Regional Banking footprint | |||
- Construction lending includes national home builder, one-time close, and commercial real estate portfolios |
- In January 2008, FHN announced the discontinuation of national home builder and commercial real estate lending through its First Horizon Construction Lending offices |
- Consumer lending consists mainly of national retail-originated home equity loans and lines |
Mortgage Banking
- Primarily consists of first lien mortgage originations and servicing | |||
- In a transaction that closed on August 31, 2008, First Horizon National Corp sold its mortgage servicing platform and origination offices outside Tennessee to MetLife Bank, N.A. |
Corporate
- Includes executive management, enterprise-wide risk management, corporate finance, corporate communications, and legal functions | |||
- Also includes funding function for the corporation and any impact from balance sheet positioning |
3
PERFORMANCE HIGHLIGHTS |
Summary of First Quarter 2009 Significant Items (in millions)
Segment | Item | Income Statement | Pre-Tax | Comments | ||||||
National Specialty Lending | Repurchase Reserves | Noninterest income: Other | $ | (10.0 | ) | Increase in repurchase reserves due to higher repurchase activity. | ||||
Mortgage Banking | Reinsurance Reserve | Noninterest expense: Other | $ | (14.3 | ) | Increase in reserves for PMI reinsurance contracts due to increasing mortgage default expectations. | ||||
Foreclosure Reserve | Noninterest expense: Other | $ | (12.3 | ) | Increase in repurchase reserves due to higher repurchase activity. | |||||
Foreclosure Reserve | Noninterest income: Mortgage Banking | $ | 3.4 | Adjustment of reserves due to expiration of contingency periods on prior loan sales. | ||||||
Various | Life Insurance Reserve | Noninterest expense: Employee compensation, incentives and benefits | $ | (10.7 | ) | Adjustment of liability for employee life insurance obligation. Allocated to all segments. | ||||
Corporate | Restructuring, Repositioning & Efficiency Initiatives | Noninterest expense: Various | $ | (3.6 | ) | Expenses from severance and office closures. Detailed further on page 6. | ||||
Restructuring, Repositioning & Efficiency Initiatives | Noninterest income: Mortgage Banking | $ | (1.1 | ) | Servicing sale costs. Detailed further on page 6. | |||||
(First Quarter 2009 vs. Fourth Quarter 2008)
Asset Quality
- | Provision increased to $300.0 million in the first quarter compared to $280.0 million in fourth quarter 2008 |
- | Portfolio deterioration in first quarter 2009 due to declining economic conditions | |
- | Continuing commercial portfolio deterioration |
- | C&I and Income CRE experiencing negative grade migration | |
- | Residential CRE seeing downward trend in provisioning as credits are further along in credit cycle |
- | Experiencing increased delinquencies |
- | Consumer portfolios experiencing continued stress |
- | Consumer real estate seeing deterioration within Home Equity portfolio |
- | Delinquency trends improving |
- | OTC provisioning reflects recognition of higher inherent loss content |
- | Permanent mortgage portfolio experiencing increased delinquencies |
- | Net charge-offs were 397 annualized basis points of average loans driven by residential CRE, C&I, and home equity and OTC portfolios |
- | Net charge-offs of $208.3 million in first quarter compared to $191.2 million in prior quarter | |
- | Charging off almost all impaired commercial loan balances down to most likely estimate of collateral value net of costs to sell |
- | NPAs increased to 598 basis points from 538 basis points reflecting portfolio deterioration from current economic conditions |
- | Total NPAs increased to $1.3 billion from $1.2 billion primarily from deterioration in the commercial portfolio |
- | Allowance as a percentage of loans ratio increased to 457 basis points from 399 basis points in prior quarter |
Capital
- | Continued quarterly dividend payable in common stock |
- | Current ratios also continue to benefit from balance sheet contraction (estimated based on period end balances) |
- | 7.07% for tangible common equity to tangible assets |
- | 20 basis point negative impact from $868 million excess Fed balances |
- | 15.0% for Tier I |
- | 20.1% for Total Capital |
- | CPP Preferred dividend of $15.0 million in first quarter |
- | $11.0 million effect of cash dividend | |
- | $4.0 million of amortization to accrete initial discounted book value up to face value |
4
PERFORMANCE HIGHLIGHTS (continued) |
(First Quarter 2009 vs. Fourth Quarter 2008)
Regional Banking
- | Net interest margin decreased to 3.88% compared to 4.21% in fourth quarter |
- | Reflects declining deposit spreads from the low interest rate environment. |
- | Noninterest income declined to $76.3 million from $82.7 million |
- | Seasonal decrease in fee income, primarily from deposit accounts |
- | Provision expense decreased to $97.8 million from $105.8 million |
- | Reflects continued deterioration in commercial loans |
- | Noninterest expense increased to $173.7 million compared to $168.1 million in prior quarter |
- | Primarily from higher personnel costs due to life insurance reserve adjustment |
Capital Markets
- | Fixed income revenues were $197.0 million in first quarter compared to $156.5 million in prior quarter |
- | Reflects the strength of an extensive distribution network combined with favorable market conditions |
- | Other product revenues were $19.7 million in first quarter compared to $20.8 million in fourth quarter |
- | Provision expense increased to $14.0 million from $8.1 million |
- | Current stress in financial system continuing to impact correspondent banking and trust preferred loans |
- | Increase in noninterest expense resulted from higher production levels |
National Specialty Lending
- | Sequential decline in net interest income as loan portfolios continue to wind down |
- | Net interest margin decreased to 1.81% compared to 1.84% in fourth quarter |
- | Primarily results from an increase in nonaccrual loans |
- | Provision for loan losses continues to reflect deterioration within national construction and consumer lending portfolios |
- | Noninterest income decreased sequentially |
- | Charge of $10.0 million recognized in first quarter for repurchase reserves |
- | Increase in expected repurchase activity | |
- | $2.3 million charge recognized in fourth quarter |
- | $2.7 million reduction in value of MSR in first quarter primarily due to interest rate changes |
- | $5.1 million reduction in fourth quarter |
- | Noninterest expense increased due to higher losses on foreclosed properties and higher compensation costs |
Mortgage Banking
- | Increased origination income |
- | Negative warehouse valuation adjustments recognized in fourth quarter were not required in first quarter |
- | Warehouse valuation adjustments in first quarter were not significant |
- | Tennessee origination income also increased significantly in first quarter due to refinancing activity | |
- | $3.4 million of reductions in reserves in first quarter due to expiration of contingencies associated with prior loan sales |
- | Servicing hedging results positively impacted earnings by $84.7 million vs. $64.6 million in fourth quarter |
- | Represents positive carry on swaps and effects of widening spreads between mortgage and swap rates |
- | Servicing fees declined consistent with the decline in average MSR |
- | Servicing runoff increased to $18.6 million for first quarter from $9.9 million in prior quarter due to increased refinancing activity |
- | Other income increased over prior quarter |
- | $6.5 million charge recognized in fourth quarter related to servicing fee guarantees on prior servicing sales |
- | Net interest income decline consistent with the decrease in average interest-bearing servicing assets |
- | Minimal provision in first quarter for permanent mortgage portfolio |
- | $22.0 million of provision recognized in prior quarter |
- | Noninterest expense increased to $47.6 million in first quarter compared to $39.6 million in prior quarter |
- | First quarter includes $14.3 million of expense for PMI reinsurance liability due to increased mortgage default expectations |
- | $16.5 million of expense for PMI reinsurance liability recognized in fourth quarter |
- | Provisioning for foreclosure losses of $12.3 million in first quarter |
- | Primarily driven by increased repurchase activity |
- | Effect on foreclosure reserve partially offset by $3.4 million reserve adjustments recognized through origination income |
- | $1.8 million of expense in fourth quarter |
- | Fees associated with Tennessee mortgage operations increased consistent with associated origination volumes |
Taxes
- | Approximate $8 million positive quarterly effect from permanent tax credits |
Corporate Segment
- | Net charges of $4.7 million recognized for restructuring, repositioning and efficiency initiatives (detail on next page) |
- | Primarily for severance, servicing sale costs and office closures | |
- | Prior quarter included $10.3 million of net charges for these initiatives |
5
CHARGES FOR RESTRUCTURING, REPOSITIONING, & EFFICIENCY INITIATIVES Unaudited |
By Income Statement Impact | ||||||||||||||||||||
(Thousands, rounded) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | |||||||||||||||
Noninterest income | ||||||||||||||||||||
Mortgage banking | $ | (1,100 | ) | $ | — | $ | (700 | ) | $ | (9,300 | ) | $ | (2,700 | ) | ||||||
Losses on divestitures | — | (100 | ) | (17,500 | ) | (400 | ) | (1,000 | ) | |||||||||||
Noninterest expense | ||||||||||||||||||||
Employee compensation, incentives, and benefits | 2,700 | 600 | 10,700 | 5,700 | 7,400 | |||||||||||||||
Legal and professional fees | 100 | 300 | (100 | ) | 1,100 | 3,100 | ||||||||||||||
Occupancy | — | (200 | ) | 3,900 | 3,400 | 1,000 | ||||||||||||||
Equipment rentals, depreciation, and maintenance | — | — | 100 | 4,200 | — | |||||||||||||||
All other expense | 800 | 9,500 | 1,100 | 1,900 | 6,100 | |||||||||||||||
Total loss before income taxes | $ | (4,700 | ) | $ | (10,300 | ) | $ | (33,900 | ) | $ | (26,000 | ) | $ | (21,300 | ) |
6
CONSOLIDATED SUMMARY RESULTS Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Income Statement Highlights | ||||||||||||||||||||||||||||
Net interest income | $ | 196,587 | $ | 204,948 | $ | 223,147 | $ | 238,895 | $ | 228,092 | (4 | )% | (14 | )% | ||||||||||||||
Noninterest income | 407,871 | 336,672 | 305,383 | 400,018 | 383,130 | 21 | % | 6 | % | |||||||||||||||||||
Securities gains/(losses), net | (2 | ) | 1,346 | (210 | ) | (972 | ) | 65,946 | NM | NM | ||||||||||||||||||
Total revenue | 604,456 | 542,966 | 528,320 | 637,941 | 677,168 | 11 | % | (11 | )% | |||||||||||||||||||
Noninterest expense | 417,328 | 345,449 | 399,399 | 462,999 | 434,216 | 21 | % | (4 | )% | |||||||||||||||||||
Provision for loan losses | 300,000 | 280,000 | 340,000 | 220,000 | 240,000 | 7 | % | 25 | % | |||||||||||||||||||
Income/(loss) before income taxes | (112,872 | ) | (82,483 | ) | (211,079 | ) | (45,058 | ) | 2,952 | (37 | )% | NM | ||||||||||||||||
Benefit for income taxes | (47,777 | ) | (30,988 | ) | (88,859 | ) | (28,821 | ) | (8,146 | ) | (54 | )% | NM | |||||||||||||||
Income/(loss) from continuing operations | (65,095 | ) | (51,495 | ) | (122,220 | ) | (16,237 | ) | 11,098 | (26 | )% | NM | ||||||||||||||||
Income from discontinued operations, net of tax | — | — | — | — | 883 | NM | NM | |||||||||||||||||||||
Net income/(loss) | (65,095 | ) | (51,495 | ) | (122,220 | ) | (16,237 | ) | 11,981 | (26 | )% | NM | ||||||||||||||||
Net income/(loss) attributable to noncontrolling interest (g) | 2,750 | 4,236 | 2,875 | 2,844 | 4,061 | (35 | )% | (32 | )% | |||||||||||||||||||
Net income/(loss) attributable to controlling interest | (67,845 | ) | (55,731 | ) | (125,095 | ) | (19,081 | ) | 7,920 | (22 | )% | NM | ||||||||||||||||
Preferred stock dividends (h) | 14,956 | 7,413 | — | — | — | 102 | % | NM | ||||||||||||||||||||
Income/(loss) available to common shareholders | $ | (82,801 | ) | $ | (63,144 | ) | $ | (125,095 | ) | $ | (19,081 | ) | $ | 7,920 | (31 | )% | NM | |||||||||||
Common Stock Data | ||||||||||||||||||||||||||||
Diluted EPS from continuing operations (a) | $ | (0.39 | ) | $ | (0.30 | ) | $ | (0.59 | ) | $ | (0.10 | ) | $ | 0.05 | (30 | )% | NM | |||||||||||
Diluted EPS (a) | (0.39 | ) | (0.30 | ) | (0.59 | ) | (0.10 | ) | 0.06 | (30 | )% | NM | ||||||||||||||||
Diluted shares (a) | 210,413 | 210,346 | 210,345 | 184,992 | 136,496 | * | 54 | % | ||||||||||||||||||||
Period-end shares outstanding (a) | 211,595 | 210,758 | 210,773 | 210,930 | 136,618 | * | 55 | % | ||||||||||||||||||||
Dividends declared per share (b) | NM | (c) | NM | (d) | NM | (e) | $ | 0.19 | (f) | $ | 0.19 | (f) | NM | NM | ||||||||||||||
Balance Sheet Highlights (Period End) | ||||||||||||||||||||||||||||
Total loans, net of unearned income | $ | 20,572,477 | $ | 21,278,190 | $ | 21,601,898 | $ | 22,225,232 | $ | 21,932,020 | (3 | )% | (6 | )% | ||||||||||||||
Total loans held for sale-divestiture | — | — | — | — | 207,672 | NM | NM | |||||||||||||||||||||
Total deposits | 14,910,055 | 14,241,814 | 13,778,235 | 15,093,947 | 16,188,542 | 5 | % | (8 | )% | |||||||||||||||||||
Total deposits-divestiture | — | — | — | 296,632 | 118,720 | NM | NM | |||||||||||||||||||||
Total assets | 31,208,024 | 31,021,980 | 32,804,376 | 35,549,961 | 37,267,945 | 1 | % | (16 | )% | |||||||||||||||||||
Total assets-divestiture | — | — | — | 395,628 | 216,431 | NM | NM | |||||||||||||||||||||
Total liabilities | 27,700,348 | 27,447,348 | 29,931,458 | 32,557,238 | 34,860,441 | 1 | % | (21 | )% | |||||||||||||||||||
Total liabilities-divestiture | — | — | — | 298,098 | 120,590 | NM | NM | |||||||||||||||||||||
Total shareholders’ equity | 3,507,676 | 3,574,632 | 2,879,724 | 2,992,723 | 2,407,504 | (2 | )% | 46 | % | |||||||||||||||||||
Key Ratios & Other | ||||||||||||||||||||||||||||
Return on average assets | (0.87 | )% | (0.66 | )% | (1.46 | )% | (0.18 | )% | 0.13 | % | ||||||||||||||||||
Return on average common equity | (13.44 | )% | (9.30 | )% | (18.30 | )% | (3.02 | )% | 1.47 | % | ||||||||||||||||||
Net interest margin | 2.89 | % | 2.96 | % | 3.01 | % | 3.01 | % | 2.81 | % | ||||||||||||||||||
Efficiency ratio | 69.0 | % | 63.6 | % | 75.6 | % | 72.6 | % | 64.1 | % | ||||||||||||||||||
Book value per common share | $ | 11.46 | $ | 11.85 | $ | 12.23 | $ | 12.79 | $ | 15.46 | ||||||||||||||||||
Tangible book value per common share | $ | 10.35 | $ | 10.72 | $ | 11.09 | $ | 11.65 | $ | 13.67 | ||||||||||||||||||
FTE employees | 6,033 | 6,095 | 6,195 | 9,386 | 9,711 | (1 | )% | (38 | )% | |||||||||||||||||||
NM — Not meaningful | ||||
* | Amount is less than one percent. | |||
Certain previously reported amounts have been reclassified to agree with current presentation. | ||||
(a) | Shares restated for stock dividends paid through April 1, 2009. | |||
(b) | First and second quarters 2008 dividend declared paid in cash. | |||
(c) | Stock dividend rate of 2.6673% per share. | |||
(d) | Stock dividend rate of 1.837% per share. | |||
(e) | Stock dividend rate of 3.0615% per share. | |||
(f) | Cash dividends per share restated for stock dividends paid through April 1, 2008. | |||
(g) | Represents preferred dividends previously reported in NIOE. Currently reported as noncontrolling interest due to adoption of SFAS 160. | |||
(h) | 1Q 09 includes $4.0 million amortization of initial discounted book value of CPP preferred. |
7
CONSOLIDATED INCOME STATEMENT Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Interest income | $ | 270,093 | $ | 331,554 | $ | 383,243 | $ | 415,485 | $ | 476,443 | (19 | )% | (43 | )% | ||||||||||||||
Less interest expense | 73,506 | 126,606 | 160,096 | 176,590 | 248,351 | (42 | )% | (70 | )% | |||||||||||||||||||
Net interest income | 196,587 | 204,948 | 223,147 | 238,895 | 228,092 | (4 | )% | (14 | )% | |||||||||||||||||||
Provision for loan losses | 300,000 | 280,000 | 340,000 | 220,000 | 240,000 | 7 | % | 25 | % | |||||||||||||||||||
Net interest income/(loss) after provision for loan losses | (103,413 | ) | (75,052 | ) | (116,853 | ) | 18,895 | (11,908 | ) | (38 | )% | (768 | )% | |||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||||
Capital markets | 214,224 | 174,671 | 95,954 | 122,338 | 131,457 | 23 | % | 63 | % | |||||||||||||||||||
Deposit transactions and cash management | 39,032 | 43,882 | 45,802 | 46,797 | 42,553 | (11 | )% | (8 | )% | |||||||||||||||||||
Mortgage banking (a) (b) | 115,749 | 80,087 | 106,817 | 172,418 | 158,712 | 45 | % | (27 | )% | |||||||||||||||||||
Trust services and investment management | 6,820 | 7,675 | 8,154 | 8,883 | 9,109 | (11 | )% | (25 | )% | |||||||||||||||||||
Insurance commissions | 6,918 | 6,806 | 7,332 | 6,822 | 8,144 | 2 | % | (15 | )% | |||||||||||||||||||
Revenue from loan sales and securitizations | 969 | (782 | ) | 3,238 | (6,984 | ) | (4,097 | ) | 224 | % | 124 | % | ||||||||||||||||
Securities gains/(losses), net | (2 | ) | 1,346 | (210 | ) | (972 | ) | 65,946 | NM | NM | ||||||||||||||||||
Gains/(losses) on divestitures | — | (106 | ) | (17,489 | ) | (429 | ) | (995 | ) | NM | NM | |||||||||||||||||
Other (c) | 24,159 | 24,439 | 55,575 | 50,173 | 38,247 | (1 | )% | (37 | )% | |||||||||||||||||||
Total noninterest income | 407,869 | 338,018 | 305,173 | 399,046 | 449,076 | 21 | % | (9 | )% | |||||||||||||||||||
Adjusted gross income after provision for loan losses | 304,456 | 262,966 | 188,320 | 417,941 | 437,168 | 16 | % | (30 | )% | |||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||||
Employee compensation, incentives and benefits (b) (d) | 248,511 | 180,871 | 215,498 | 277,078 | 287,470 | 37 | % | (14 | )% | |||||||||||||||||||
Occupancy | 16,050 | 19,149 | 27,210 | 30,018 | 28,591 | (16 | )% | (44 | )% | |||||||||||||||||||
Operations services | 16,539 | 19,345 | 20,041 | 19,124 | 18,964 | (15 | )% | (13 | )% | |||||||||||||||||||
Equipment rentals, depreciation and maintenance | 8,698 | 11,454 | 12,336 | 18,268 | 15,011 | (24 | )% | (42 | )% | |||||||||||||||||||
Legal and professional fees (b) | 14,108 | 17,711 | 16,955 | 14,030 | 15,022 | (20 | )% | (6 | )% | |||||||||||||||||||
Communications and courier | 7,204 | 7,754 | 9,628 | 11,477 | 11,004 | (7 | )% | (35 | )% | |||||||||||||||||||
Amortization of intangible assets | 1,636 | 1,805 | 1,802 | 2,182 | 2,440 | (9 | )% | NM | ||||||||||||||||||||
Other (b) (e) (f) | 104,582 | 87,360 | 95,929 | 90,822 | 55,714 | 20 | % | 88 | % | |||||||||||||||||||
Total noninterest expense | 417,328 | 345,449 | 399,399 | 462,999 | 434,216 | 21 | % | * | ||||||||||||||||||||
Income/(loss) before income taxes | (112,872 | ) | (82,483 | ) | (211,079 | ) | (45,058 | ) | 2,952 | (37 | )% | NM | ||||||||||||||||
Benefit for income taxes | (47,777 | ) | (30,988 | ) | (88,859 | ) | (28,821 | ) | (8,146 | ) | (54 | )% | NM | |||||||||||||||
Income/(loss) from continuing operations | $ | (65,095 | ) | $ | (51,495 | ) | $ | (122,220 | ) | $ | (16,237 | ) | 11,098 | (26 | )% | NM | ||||||||||||
Income from discontinued operations, net of tax | — | — | — | — | 883 | NM | NM | |||||||||||||||||||||
Net income/(loss) | $ | (65,095 | ) | $ | (51,495 | ) | $ | (122,220 | ) | $ | (16,237 | ) | $ | 11,981 | (26 | )% | NM | |||||||||||
Net income/(loss) attributable to noncontrolling interest (g) | 2,750 | 4,236 | 2,875 | 2,844 | 4,061 | (35 | )% | (32 | )% | |||||||||||||||||||
Net income/(loss) attributable to controlling interest | $ | (67,845 | ) | $ | (55,731 | ) | $ | (125,095 | ) | $ | (19,081 | ) | $ | 7,920 | (22 | )% | NM | |||||||||||
Preferred stock dividends (h) | 14,956 | 7,413 | — | �� | — | 102 | % | NM | ||||||||||||||||||||
Net income/(loss) available to common shareholders | $ | (82,801 | ) | $ | (63,144 | ) | $ | (125,095 | ) | $ | (19,081 | ) | $ | 7,920 | (31 | )% | NM | |||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent. | |
Certain previously reported amounts have been reclassified to agree with current presentation. | ||
1Q09 Key Impacts | ||
(a) | Includes adjustment of reserves due to expiration of contingency periods on prior loan sales. | |
(b) | Includes a portion of net charges for $4.7 million, see Restructuring, Repositioning & Efficiency Initiatives page for further details. | |
(c) | Includes increase in National Specialty repurchase reserves. | |
(d) | Includes increase in reserves for employee life insurance obligation. | |
(e) | Includes increase in reinsurance reserves for PMI reinsurance contracts. | |
(f) | Includes increase in Mortgage Banking related repurchase reserves. | |
(g) | Represents preferred dividends previously reported in NIOE. Currently reported as noncontrolling interest due to adoption of SFAS 160. | |
(h) | 1Q 09 includes $4.0 million amortization of initial discounted book value of CPP preferred. |
8
OTHER INCOME AND OTHER EXPENSE Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Other Income | ||||||||||||||||||||||||||||
Brokerage management fees and commissions | $ | 6,632 | $ | 7,307 | $ | 7,824 | $ | 8,690 | $ | 8,413 | (9 | )% | (21 | )% | ||||||||||||||
Bank owned life insurance | 4,131 | 5,107 | 6,731 | 6,343 | 6,962 | (19 | )% | (41 | )% | |||||||||||||||||||
Bankcard income | 4,896 | 5,226 | 5,587 | 5,728 | 5,540 | (6 | )% | (12 | )% | |||||||||||||||||||
Other service charges | 3,521 | 3,002 | 3,043 | 3,189 | 3,396 | 17 | % | 4 | % | |||||||||||||||||||
Remittance processing | 3,143 | 3,160 | 3,314 | 3,206 | 3,273 | (1 | )% | (4 | )% | |||||||||||||||||||
Reinsurance fees | 2,796 | 2,624 | 2,830 | 3,320 | 3,145 | 7 | % | (11 | )% | |||||||||||||||||||
ATM interchange fees | 2,205 | 2,485 | 2,263 | 2,238 | 2,238 | (11 | )% | (1 | )% | |||||||||||||||||||
Deferred compensation | (2,743 | ) | (12,531 | ) | (5,145 | ) | 1,325 | (6,550 | ) | 78 | % | 58 | % | |||||||||||||||
Letter of credit | 1,360 | 1,322 | 1,603 | 1,274 | 1,458 | 3 | % | (7 | )% | |||||||||||||||||||
Electronic banking fees | 1,609 | 1,492 | 1,535 | 1,572 | 1,618 | 8 | % | (1 | )% | |||||||||||||||||||
Check clearing fees | 337 | 538 | 838 | 887 | 862 | (37 | )% | (61 | )% | |||||||||||||||||||
Federal flood certifications | — | — | 863 | 1,259 | 1,523 | NM | NM | |||||||||||||||||||||
Gain on repurchase of debt | 60 | 2,331 | 18,919 | 12,596 | — | (97 | )% | NM | ||||||||||||||||||||
Other (a) | (3,788 | ) | 2,376 | 5,370 | (1,454 | ) | 6,369 | NM | NM | |||||||||||||||||||
Total | $ | 24,159 | $ | 24,439 | $ | 55,575 | $ | 50,173 | $ | 38,247 | (1 | )% | (37 | )% | ||||||||||||||
Other Expense | ||||||||||||||||||||||||||||
Computer software | 6,896 | 7,151 | 7,162 | 8,120 | 7,956 | (4 | )% | (13 | )% | |||||||||||||||||||
Advertising and public relations | 5,820 | 7,366 | 9,142 | 7,179 | 9,327 | (21 | )% | (38 | )% | |||||||||||||||||||
Travel and entertainment | 2,679 | 3,314 | 3,358 | 5,672 | 5,027 | (19 | )% | (47 | )% | |||||||||||||||||||
Low income housing expense | 5,125 | 4,289 | 5,064 | 4,815 | 4,566 | 19 | % | 12 | % | |||||||||||||||||||
Contract employment (b) | 10,161 | 11,569 | 9,033 | 7,359 | 5,584 | (12 | )% | 82 | % | |||||||||||||||||||
Foreclosed real estate (d) | 22,300 | 10,941 | 4,979 | 10,720 | 6,362 | 104 | % | 251 | % | |||||||||||||||||||
Supplies | 304 | 2,053 | 2,725 | 2,942 | 3,020 | (85 | )% | (90 | )% | |||||||||||||||||||
Loan closing costs | 5,139 | 3,129 | 10,314 | 11,718 | 13,060 | 64 | % | (61 | )% | |||||||||||||||||||
Customer relations | 2,288 | 1,897 | 2,727 | 2,544 | 1,707 | 21 | % | 34 | % | |||||||||||||||||||
Other insurance and taxes | 2,928 | 2,850 | 1,394 | 2,381 | 2,121 | 3 | % | 38 | % | |||||||||||||||||||
Employee training and dues | 1,439 | 1,771 | 1,485 | 1,632 | 1,398 | (19 | )% | 3 | % | |||||||||||||||||||
Fed services fees | 1,367 | 1,526 | 1,975 | 1,941 | 1,611 | (10 | )% | (15 | )% | |||||||||||||||||||
Complimentary check expense | 1,123 | 1,065 | 1,259 | 1,154 | 1,298 | 5 | % | (13 | )% | |||||||||||||||||||
Loan insurance expense | 1,912 | 1,482 | 1,477 | 1,198 | 1,113 | 29 | % | 72 | % | |||||||||||||||||||
Bank examination costs | 1,248 | 514 | 1,523 | 1,054 | 1,053 | 143 | % | 19 | % | |||||||||||||||||||
Deposit insurance premium | 7,628 | 4,288 | 4,146 | 3,403 | 2,827 | 78 | % | 170 | % | |||||||||||||||||||
Other (b) (c) | 26,225 | 22,155 | 28,166 | 16,990 | (12,316 | ) | 18 | % | NM | |||||||||||||||||||
Total | $ | 104,582 | $ | 87,360 | $ | 95,929 | $ | 90,822 | $ | 55,714 | 20 | % | 88 | % | ||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent. | |
Certain previously reported amounts have been reclassified to agree with current presentation. 1Q09 Key Impacts | ||
(a) | Includes increase in National Specialty repurchase reserves. | |
(b) | Includes a portion of net charges for $.8 million, see Restructuring, Repositioning & Efficiency Initiatives page for further details. | |
(c) | Includes increase in reinsurance reserves for PMI reinsurance contracts. | |
(d) | Includes increase in Mortgage Banking related repurchase reserves. |
9
CONSOLIDATED PERIOD-END BALANCE SHEET Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Investment securities | $ | 3,016,013 | $ | 3,125,153 | $ | 2,840,739 | $ | 2,896,928 | $ | 3,034,798 | (3 | )% | (1 | )% | ||||||||||||||
Loans held for sale | 643,518 | 566,654 | 718,029 | 2,554,030 | 3,616,018 | 14 | % | (82 | )% | |||||||||||||||||||
Loans held for sale-divestiture (a) | — | — | — | — | 207,672 | NM | NM | |||||||||||||||||||||
Loans, net of unearned income | 20,572,477 | 21,278,190 | 21,601,898 | 22,225,232 | 21,932,020 | (3 | )% | (6 | )% | |||||||||||||||||||
Federal funds sold and securities purchased under agreements to resell | 515,858 | 772,357 | 921,295 | 1,166,982 | 898,615 | (33 | )% | (43 | )% | |||||||||||||||||||
Interest bearing cash (b) | 1,174,442 | 207,792 | 37,546 | 39,829 | 46,382 | 465 | % | NM | ||||||||||||||||||||
Trading securities | 933,316 | 945,766 | 1,561,024 | 1,473,815 | 1,553,053 | (1 | )% | (40 | )% | |||||||||||||||||||
Trading securities-divestiture (a) | — | — | — | 89,239 | — | NM | NM | |||||||||||||||||||||
Total earning assets | 26,855,624 | 26,895,912 | 27,680,531 | 30,446,055 | 31,288,558 | * | (14 | )% | ||||||||||||||||||||
Cash and due from banks | 438,181 | 552,423 | 815,935 | 838,376 | 851,875 | (21 | )% | (49 | )% | |||||||||||||||||||
Capital markets receivables | 1,502,033 | 1,178,932 | 1,651,547 | 994,571 | 1,680,057 | 27 | % | (11 | )% | |||||||||||||||||||
Mortgage servicing rights, net | 381,024 | 376,844 | 798,491 | 903,634 | 895,923 | 1 | % | (57 | )% | |||||||||||||||||||
Mortgage servicing rights, net-divestiture (a) | — | — | — | 235,761 | — | NM | NM | |||||||||||||||||||||
Goodwill | 192,408 | 192,408 | 192,408 | 192,408 | 192,408 | * | * | |||||||||||||||||||||
Other intangible assets, net | 43,446 | 45,081 | 46,887 | 48,615 | 52,017 | (4 | )% | (16 | )% | |||||||||||||||||||
Premises and equipment, net | 330,299 | 333,931 | 336,078 | 344,410 | 382,488 | (1 | )% | (14 | )% | |||||||||||||||||||
Real estate acquired by foreclosure (c) | 132,653 | 125,538 | 151,461 | 141,857 | 106,018 | 6 | % | 25 | % | |||||||||||||||||||
Allowance for loan losses | (940,932 | ) | (849,210 | ) | (760,456 | ) | (575,149 | ) | (483,203 | ) | (11 | )% | (95 | )% | ||||||||||||||
Other assets | 2,273,288 | 2,170,121 | 1,891,494 | 1,908,795 | 2,293,045 | 5 | % | (1 | )% | |||||||||||||||||||
Other assets-divestiture (a) | — | — | — | 70,628 | 8,759 | NM | NM | |||||||||||||||||||||
Total assets | $ | 31,208,024 | $ | 31,021,980 | $ | 32,804,376 | $ | 35,549,961 | $ | 37,267,945 | 1 | % | (16 | )% | ||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||
Savings | $ | 4,396,213 | $ | 4,824,939 | $ | 4,350,832 | $ | 4,041,352 | $ | 4,217,215 | (9 | )% | 4 | % | ||||||||||||||
Other interest-bearing deposits | 1,868,902 | 1,783,362 | 1,638,731 | 1,880,678 | 1,986,556 | 5 | % | (6 | )% | |||||||||||||||||||
Time deposits | 2,152,837 | 2,294,644 | 2,510,344 | 2,468,521 | 2,648,339 | (6 | )% | (19 | )% | |||||||||||||||||||
Interest bearing deposits-divestiture (a) | — | — | — | — | 99,370 | NM | NM | |||||||||||||||||||||
Total interest-bearing core deposits | 8,417,952 | 8,902,945 | 8,499,907 | 8,390,551 | 8,951,480 | (5 | )% | (6 | )% | |||||||||||||||||||
Noninterest-bearing deposits | 4,908,175 | 3,956,633 | 3,808,239 | 4,453,332 | 4,995,696 | 24 | % | (2 | )% | |||||||||||||||||||
Noninterest-bearing deposits-divestiture (a) | — | — | — | 296,632 | 18,197 | NM | NM | |||||||||||||||||||||
Total core deposits | 13,326,127 | 12,859,578 | 12,308,146 | 13,140,515 | 13,965,373 | 4 | % | (5 | )% | |||||||||||||||||||
Certificates of deposit $100,000 and more | 1,583,928 | 1,382,236 | 1,470,089 | 1,953,432 | 2,222,016 | 15 | % | (29 | )% | |||||||||||||||||||
Certificates of deposit $100,000 and more-divestiture (a) | — | — | — | — | 1,153 | NM | NM | |||||||||||||||||||||
Total deposits | 14,910,055 | 14,241,814 | 13,778,235 | 15,093,947 | 16,188,542 | 5 | % | (8 | )% | |||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 2,264,077 | 1,751,079 | 1,890,681 | 2,620,014 | 3,678,217 | 29 | % | (38 | )% | |||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase-divestiture (a) | — | — | — | — | 11,572 | NM | NM | |||||||||||||||||||||
Trading liabilities | 288,029 | 359,502 | 380,896 | 464,225 | 531,259 | (20 | )% | (46 | )% | |||||||||||||||||||
Other short term borrowings and commercial paper (d) | 3,827,278 | 4,279,689 | 6,149,073 | 5,998,810 | 4,753,582 | (11 | )% | (19 | )% | |||||||||||||||||||
Term borrowings | 3,353,464 | 4,022,297 | 4,545,791 | 5,783,407 | 6,060,795 | (17 | )% | (45 | )% | |||||||||||||||||||
Other collateralized borrowings | 736,172 | 745,363 | 749,797 | 767,010 | 809,273 | (1 | )% | (9 | )% | |||||||||||||||||||
Total long-term debt | 4,089,636 | 4,767,660 | 5,295,588 | 6,550,417 | 6,870,068 | (14 | )% | (40 | )% | |||||||||||||||||||
Capital markets payables | 1,383,447 | 1,115,428 | 1,645,118 | 868,883 | 1,688,870 | 24 | % | (18 | )% | |||||||||||||||||||
Other liabilities | 937,826 | 932,176 | 785,061 | 959,476 | 1,136,461 | 1 | % | (17 | )% | |||||||||||||||||||
Other liabilities-divestiture (a) | — | — | — | 1,466 | 1,870 | NM | NM | |||||||||||||||||||||
Total liabilities | 27,700,348 | 27,447,348 | 29,924,652 | 32,557,238 | 34,860,441 | 1 | % | (21 | )% | |||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||
Preferred stock capital surplus — (CPP) | 786,582 | 782,680 | — | — | — | * | NM | |||||||||||||||||||||
Common stock | 132,247 | 128,302 | 125,996 | 122,345 | 79,242 | 3 | % | 67 | % | |||||||||||||||||||
Capital surplus | 1,087,252 | 1,048,602 | 1,016,498 | 980,428 | 362,823 | 4 | % | 200 | % | |||||||||||||||||||
Capital surplus common stock warrant — (CPP) | 83,860 | 83,860 | — | — | — | * | NM | |||||||||||||||||||||
Undivided profits | 1,265,073 | 1,387,854 | 1,489,990 | 1,646,272 | 1,704,559 | (9 | )% | (26 | )% | |||||||||||||||||||
Accumulated other comprehensive loss, net | (142,503 | ) | (151,831 | ) | (48,037 | ) | (51,599 | ) | (34,397 | ) | 6 | % | (314 | )% | ||||||||||||||
Noncontrolling interest | 295,165 | 295,165 | 295,277 | 295,277 | 295,277 | * | * | |||||||||||||||||||||
Total shareholders’ equity | 3,507,676 | 3,574,632 | 2,879,724 | 2,992,723 | 2,407,504 | (2 | )% | 46 | % | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 31,208,024 | $ | 31,021,980 | $ | 32,804,376 | $ | 35,549,961 | $ | 37,267,945 | 1 | % | (16 | )% | ||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent. | |
Certain previously reported amounts have been reclassified to agree with current presentation. | ||
(a) | Second quarter 2008 associated with the sale of certain mortgage operations, prior periods associated with the sale of First Horizon Bank branches. | |
(b) | Includes excess balances held at Fed. | |
(c) | First quarter 2009 includes $13.6 million of foreclosed assets related to government insured mortgages. | |
(d) | First quarter 2009 includes $3.5 billion of FRB Term Auction Facility borrowings. |
10
CONSOLIDATED AVERAGE AND PERIOD-END LOANS Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Average Loans (Net) | ||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||
Commercial, financial and industrial | $ | 7,781,708 | $ | 7,516,557 | $ | 7,530,724 | $ | 7,212,907 | $ | 7,121,890 | 4 | % | 9 | % | ||||||||||||||
Real estate commercial (a) | 1,492,906 | 1,479,582 | 1,497,773 | 1,401,267 | 1,347,377 | 1 | % | 11 | % | |||||||||||||||||||
Real estate construction (b) | 1,689,863 | 1,917,647 | 2,162,817 | 2,481,680 | 2,713,253 | (12 | )% | (38 | )% | |||||||||||||||||||
Total commercial loans | 10,964,477 | 10,913,786 | 11,191,314 | 11,095,854 | 11,182,520 | * | (2 | )% | ||||||||||||||||||||
Retail | ||||||||||||||||||||||||||||
Real estate residential (c) | 8,095,128 | 8,172,174 | 8,166,295 | 7,878,845 | 7,774,415 | (1 | )% | 4 | % | |||||||||||||||||||
Real estate construction (d) | 880,537 | 1,087,752 | 1,350,092 | 1,666,007 | 1,909,061 | (19 | )% | (54 | )% | |||||||||||||||||||
Other retail | 135,537 | 137,185 | 138,848 | 138,242 | 141,961 | (1 | )% | (5 | )% | |||||||||||||||||||
Credit card receivables | 184,244 | 190,189 | 193,517 | 193,850 | 195,081 | (3 | )% | (6 | )% | |||||||||||||||||||
Real estate loans pledged against other collateralized borrowings (e) | 709,144 | 716,925 | 721,760 | 735,828 | 755,071 | (1 | )% | (6 | )% | |||||||||||||||||||
Total retail loans | 10,004,590 | 10,304,225 | 10,570,512 | 10,612,772 | 10,775,589 | (3 | )% | (7 | )% | |||||||||||||||||||
Total loans, net of unearned income | $ | 20,969,067 | $ | 21,218,011 | $ | 21,761,826 | $ | 21,708,626 | $ | 21,958,109 | (1 | )% | (5 | )% | ||||||||||||||
Period-End Loans (Net) | ||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||
Commercial, financial and industrial | $ | 7,716,733 | $ | 7,863,727 | $ | 7,642,684 | $ | 7,717,110 | $ | 7,238,630 | (2 | )% | 7 | % | ||||||||||||||
Real estate commercial (a) | 1,501,964 | 1,454,040 | 1,492,323 | 1,463,726 | 1,345,526 | 3 | % | 12 | % | |||||||||||||||||||
Real estate construction (b) | 1,550,158 | 1,778,140 | 2,020,455 | 2,271,533 | 2,602,968 | (13 | )% | (40 | )% | |||||||||||||||||||
Total commercial loans | 10,768,855 | 11,095,907 | 11,155,462 | 11,452,369 | 11,187,124 | (3 | )% | (4 | )% | |||||||||||||||||||
Retail | ||||||||||||||||||||||||||||
Real estate residential (c) | 8,016,018 | 8,161,435 | 8,192,926 | 8,196,622 | 7,858,109 | (2 | )% | 2 | % | |||||||||||||||||||
Real estate construction (d) | 772,982 | 980,798 | 1,201,911 | 1,513,845 | 1,814,863 | (21 | )% | (57 | )% | |||||||||||||||||||
Other retail | 132,452 | 135,779 | 139,441 | 138,970 | 138,253 | (2 | )% | (4 | )% | |||||||||||||||||||
Credit card receivables | 180,282 | 189,554 | 194,966 | 195,703 | 191,119 | (5 | )% | (6 | )% | |||||||||||||||||||
Real estate loans pledged against other collateralized borrowings (e) | 701,888 | 714,717 | 717,192 | 727,723 | 742,552 | (2 | )% | (5 | )% | |||||||||||||||||||
Total retail loans | 9,803,622 | 10,182,283 | 10,446,436 | 10,772,863 | 10,744,896 | (4 | )% | (9 | )% | |||||||||||||||||||
Total loans, net of unearned income | $ | 20,572,477 | $ | 21,278,190 | $ | 21,601,898 | $ | 22,225,232 | $ | 21,932,020 | (3 | )% | (6 | )% | ||||||||||||||
* | Amount is less than one percent. | |
Certain previously reported amounts have been reclassified to agree with current presentation. | ||
(a) | Includes nonconstruction income property loans. | |
(b) | Includes home builder, condominium, and income property construction loans. | |
(c) | Includes home equity loans, home equity lines of credit and permanent mortgages. | |
(d) | Includes one-time close product. | |
(e) | Includes on balance sheet securitizations of home equity loans. |
11
CONSOLIDATED AVERAGE BALANCE SHEET Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Earning assets: | ||||||||||||||||||||||||||||
Loans, net of unearned income (a) | $ | 20,969,067 | $ | 21,218,011 | $ | 21,761,826 | $ | 21,708,626 | $ | 21,958,109 | (1 | )% | (5 | )% | ||||||||||||||
Loans held for sale | 626,679 | 650,844 | 1,950,831 | 3,606,621 | 3,728,008 | (4 | )% | (83 | )% | |||||||||||||||||||
Loans held for sale-divestiture (b) | — | — | — | 195,175 | 248,751 | NM | NM | |||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||
U.S. Treasuries | 48,593 | 48,415 | 47,843 | 47,123 | 43,305 | * | 12 | % | ||||||||||||||||||||
U.S. government agencies | 2,685,774 | 2,576,587 | 2,524,895 | 2,649,651 | 2,725,948 | 4 | % | (1 | )% | |||||||||||||||||||
States and municipalities | 63,425 | 75,084 | 31,682 | 31,347 | 12,847 | (16 | )% | 394 | % | |||||||||||||||||||
Other | 292,151 | 282,639 | 268,939 | 257,907 | 232,472 | 3 | % | 26 | % | |||||||||||||||||||
Total investment securities | 3,089,943 | 2,982,725 | 2,873,359 | 2,986,028 | 3,014,572 | 4 | % | 3 | % | |||||||||||||||||||
Capital markets securities inventory | 1,117,165 | 1,135,270 | 1,355,501 | 1,630,501 | 1,961,964 | (2 | )% | (43 | )% | |||||||||||||||||||
Mortgage banking trading securities | 171,978 | 242,930 | 304,278 | 387,469 | 405,579 | (29 | )% | (58 | )% | |||||||||||||||||||
Mortgage banking trading securities-divestiture (b) | — | — | 62,131 | 981 | — | NM | NM | |||||||||||||||||||||
Other earning assets: | ||||||||||||||||||||||||||||
Federal funds sold and securities purchased under agreements to resell | 806,704 | 911,387 | 1,213,510 | 1,275,548 | 1,304,707 | (11 | )% | (38 | )% | |||||||||||||||||||
Interest bearing cash (c) | 656,841 | 546,732 | 39,666 | 36,573 | 46,093 | 20 | % | NM | ||||||||||||||||||||
Total other earning assets | 1,463,545 | 1,458,119 | 1,253,176 | 1,312,121 | 1,350,800 | * | 8 | % | ||||||||||||||||||||
Total earning assets | 27,438,377 | 27,687,899 | 29,561,102 | 31,827,522 | 32,667,783 | (1 | )% | (16 | )% | |||||||||||||||||||
Allowance for loan losses | (889,630 | ) | (741,076 | ) | (619,977 | ) | (529,124 | ) | (359,600 | ) | 20 | % | 147 | % | ||||||||||||||
Cash and due from banks | 482,260 | 495,500 | 638,467 | 697,013 | 786,693 | (3 | )% | (39 | )% | |||||||||||||||||||
Capital markets receivables | 269,417 | 432,614 | 196,285 | 251,667 | 297,908 | (38 | )% | (10 | )% | |||||||||||||||||||
Premises and equipment, net | 332,241 | 334,642 | 339,575 | 373,403 | 390,291 | (1 | )% | (15 | )% | |||||||||||||||||||
Other assets | 2,834,546 | 2,839,665 | 3,219,952 | 3,517,017 | 3,367,729 | * | (16 | )% | ||||||||||||||||||||
Other assets-divestiture (b) | — | — | 46,091 | 8,603 | 11,581 | NM | NM | |||||||||||||||||||||
Total assets | $ | 30,467,211 | $ | 31,049,244 | $ | 33,381,495 | $ | 36,146,101 | $ | 37,162,385 | (2 | )% | (18 | )% | ||||||||||||||
Liabilities and shareholders’ equity: | ||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||||
Interest bearing deposits-divestiture (b) | $ | — | $ | — | $ | — | $ | 30,695 | $ | 127,352 | NM | NM | ||||||||||||||||
Other interest-bearing deposits | 1,792,241 | 1,615,764 | 1,724,504 | 1,911,341 | 1,922,506 | 11 | % | (7 | )% | |||||||||||||||||||
Savings | 4,629,345 | 4,741,073 | 4,002,907 | 4,180,739 | 4,134,308 | (2 | )% | �� | 12 | % | ||||||||||||||||||
Time deposits | 2,216,411 | 2,461,921 | 2,422,189 | 2,530,300 | 2,763,335 | (10 | )% | (20 | )% | |||||||||||||||||||
Total interest-bearing core deposits | 8,637,997 | 8,818,758 | 8,149,600 | 8,653,075 | 8,947,501 | (2 | )% | (3 | )% | |||||||||||||||||||
Certificates of deposit $100,000 and more | 1,507,482 | 1,491,297 | 1,839,651 | 2,022,972 | 2,696,781 | 1 | % | (44 | )% | |||||||||||||||||||
Certificates of deposit $100,000 and more-divestiture (b) | — | — | — | 279 | 4,770 | NM | NM | |||||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 2,266,424 | 2,021,033 | 2,593,485 | 3,810,955 | 5,236,736 | 12 | % | (57 | )% | |||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase-divestiture (b) | — | — | — | 3,102 | 16,171 | NM | NM | |||||||||||||||||||||
Capital markets trading liabilities | 575,446 | 488,102 | 708,875 | 768,565 | 846,369 | 18 | % | (32 | )% | |||||||||||||||||||
Other short-term borrowings and commercial paper (d) | 4,212,480 | 5,096,108 | 6,083,691 | 5,513,454 | 3,850,704 | (17 | )% | 9 | % | |||||||||||||||||||
Long term debt: | ||||||||||||||||||||||||||||
Term borrowings | 3,534,657 | 4,266,510 | 5,193,319 | 5,886,694 | 6,013,433 | (17 | )% | (41 | )% | |||||||||||||||||||
Other collateralized borrowings | 742,491 | 747,824 | 756,999 | 792,388 | 790,811 | (1 | )% | (6 | )% | |||||||||||||||||||
Total long-term debt | 4,277,148 | 5,014,334 | 5,950,318 | 6,679,082 | 6,804,244 | (15 | )% | (37 | )% | |||||||||||||||||||
Total interest-bearing liabilities | 21,476,977 | 22,929,632 | 25,325,620 | 27,451,484 | 28,403,276 | (6 | )% | (24 | )% | |||||||||||||||||||
Noninterest-bearing deposits | 4,388,807 | 3,652,161 | 4,031,157 | 4,619,333 | 4,743,479 | 20 | % | (7 | )% | |||||||||||||||||||
Other noninterest-bearing deposits-divestiture (b) | — | — | 3,038 | 8,902 | 21,327 | NM | NM | |||||||||||||||||||||
Capital markets payables | 198,358 | 374,368 | 178,289 | 232,282 | 292,846 | (47 | )% | (32 | )% | |||||||||||||||||||
Other liabilities | 823,929 | 692,759 | 827,244 | 995,931 | 1,234,695 | 19 | % | (33 | )% | |||||||||||||||||||
Other liabilities-divestiture (b) | — | — | 1,397 | 1,022 | 2,335 | NM | NM | |||||||||||||||||||||
Shareholders’ equity | 3,579,140 | 3,400,324 | 3,014,750 | 2,837,147 | 2,464,427 | 5 | % | 45 | % | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 30,467,211 | $ | 31,049,244 | $ | 33,381,495 | $ | 36,146,101 | $ | 37,162,385 | (2 | )% | (18 | )% | ||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent. | |
Certain previously reported amounts have been reclassified to agree with current presentation. | ||
(a) | Includes loans on nonaccrual status. | |
(b) | Third and second quarters 2008 associated with the sale of certain mortgage operations, prior periods associated with the sale of First Horizon Bank branches. | |
(c) | Includes excess balances held at Fed. | |
(d) | In first quarter 2009, FRB Term Auction Facility borrowings averaged $3.1 billion and FHLB borrowings averaged $.8 billion. |
12
CONSOLIDATED AVERAGE BALANCE SHEET: INCOME & EXPENSE Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||
Earning assets: | ||||||||||||||||||||||||||||
Loans, net of unearned income (a) | $ | 205,825 | $ | 254,946 | $ | 281,777 | $ | 285,539 | $ | 331,803 | (19 | )% | (38 | )% | ||||||||||||||
Loans held for sale | 7,732 | 9,821 | 29,078 | 54,217 | 58,438 | (21 | )% | (87 | )% | |||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||
U.S. Treasuries | 223 | 233 | 250 | 249 | 340 | (4 | )% | (34 | )% | |||||||||||||||||||
U.S. government agencies | 37,331 | 36,565 | 34,886 | 36,573 | 37,954 | 2 | % | (2 | )% | |||||||||||||||||||
States and municipalities | 371 | 944 | 372 | 324 | 220 | (61 | )% | 69 | % | |||||||||||||||||||
Other | 2,258 | 6,080 | 3,336 | 2,159 | 2,290 | (63 | )% | (1 | )% | |||||||||||||||||||
Total investment securities | 40,183 | 43,822 | 38,844 | 39,305 | 40,804 | (8 | )% | (2 | )% | |||||||||||||||||||
Capital markets securities inventory | 10,198 | 12,790 | 15,898 | 18,131 | 22,652 | (20 | )% | (55 | )% | |||||||||||||||||||
Mortgage banking trading securities | 5,500 | 8,253 | 11,781 | 12,120 | 13,363 | (33 | )% | (59 | )% | |||||||||||||||||||
Other earning assets: | ||||||||||||||||||||||||||||
Federal funds sold and securities purchased under agreements to resell | 505 | 1,493 | 5,944 | 6,266 | 9,341 | (66 | )% | (95 | )% | |||||||||||||||||||
Interest bearing cash | 360 | 850 | 253 | 189 | 357 | (58 | )% | 1 | % | |||||||||||||||||||
Total other earning assets | 865 | 2,343 | 6,197 | 6,455 | 9,698 | (63 | )% | (91 | )% | |||||||||||||||||||
Total earning assets/interest income | $ | 270,303 | $ | 331,975 | $ | 383,575 | $ | 415,767 | $ | 476,758 | (19 | )% | (43 | )% | ||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||||
Other interest-bearing deposits | $ | 1,068 | $ | 1,552 | $ | 2,849 | $ | 3,556 | $ | 5,906 | (31 | )% | (82 | )% | ||||||||||||||
Savings | 15,404 | 18,666 | 17,005 | 18,362 | 25,888 | (17 | )% | (40 | )% | |||||||||||||||||||
Time deposits | 18,243 | 21,739 | 22,443 | 25,540 | 31,502 | (16 | )% | (42 | )% | |||||||||||||||||||
Total interest-bearing core deposits | 34,715 | 41,957 | 42,297 | 47,458 | 63,296 | (17 | )% | (45 | )% | |||||||||||||||||||
Certificates of deposit $100,000 and more | 9,459 | 12,680 | 15,184 | 17,361 | 31,069 | (25 | )% | (70 | )% | |||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 1,169 | 2,738 | 10,696 | 17,834 | 38,521 | (57 | )% | (97 | )% | |||||||||||||||||||
Capital markets trading liabilities | 5,468 | 5,876 | 8,304 | 9,400 | 9,615 | (7 | )% | (43 | )% | |||||||||||||||||||
Other short-term borrowings and commercial paper | 3,094 | 20,164 | 36,496 | 31,591 | 31,527 | (85 | )% | (90 | )% | |||||||||||||||||||
Long term debt: | ||||||||||||||||||||||||||||
Term borrowings | 18,085 | 38,062 | 41,598 | 47,129 | 66,303 | (52 | )% | (73 | )% | |||||||||||||||||||
Other collateralized borrowings | 1,515 | 5,129 | 5,521 | 5,817 | 8,020 | (70 | )% | (81 | )% | |||||||||||||||||||
Total long-term debt | 19,600 | 43,191 | 47,119 | 52,946 | 74,323 | (55 | )% | (74 | )% | |||||||||||||||||||
Total interest-bearing liabilities/interest expense | $ | 73,505 | $ | 126,606 | $ | 160,096 | $ | 176,590 | $ | 248,351 | (42 | )% | (70 | )% | ||||||||||||||
Net interest income-tax equivalent basis | $ | 196,798 | $ | 205,369 | $ | 223,479 | $ | 239,177 | $ | 228,407 | (4 | )% | (14 | )% | ||||||||||||||
Fully taxable equivalent adjustment | (211 | ) | (421 | ) | (332 | ) | (282 | ) | (315 | ) | 50 | % | 33 | % | ||||||||||||||
Net interest income | $ | 196,587 | $ | 204,948 | $ | 223,147 | $ | 238,895 | $ | 228,092 | (4 | )% | (14 | )% | ||||||||||||||
NM — Not meaningful | ||
Certain previously reported amounts have been reclassified to agree with current presentation. | ||
Income amounts are adjusted to a fully taxable equivalent. Earning assets income is expressed net of unearned income. | ||
(a) | Includes loans on nonaccrual status. |
13
CONSOLIDATED AVERAGE BALANCE SHEET: YIELDS & RATES Quarterly, Unaudited |
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | |||||||||||||||
Assets: | ||||||||||||||||||||
Earning assets: | ||||||||||||||||||||
Loans, net of unearned income (a) | 3.97 | % | 4.78 | % | 5.16 | % | 5.29 | % | 6.07 | % | ||||||||||
Loans held for sale | 4.94 | 6.04 | 5.96 | 5.70 | 5.88 | |||||||||||||||
Investment securities: | ||||||||||||||||||||
U.S. Treasuries | 1.86 | 1.92 | 2.08 | 2.13 | 3.15 | |||||||||||||||
U.S. government agencies | 5.56 | 5.68 | 5.53 | 5.52 | 5.57 | |||||||||||||||
States and municipalities | 2.34 | 5.03 | 4.70 | 4.14 | 6.87 | |||||||||||||||
Other | 3.09 | 8.60 | 4.96 | 3.35 | 3.94 | |||||||||||||||
Total investment securities | 5.20 | 5.88 | 5.41 | 5.27 | 5.41 | |||||||||||||||
Capital markets securities inventory | 3.65 | 4.51 | 4.69 | 4.45 | 4.62 | |||||||||||||||
Mortgage banking trading securities | 12.79 | 13.59 | 12.86 | 12.48 | 13.18 | |||||||||||||||
Other earning assets: | ||||||||||||||||||||
Federal funds sold and securities purchased under agreements to resell | .25 | .65 | 1.95 | 1.98 | 2.88 | |||||||||||||||
Interest bearing cash | .22 | .62 | 2.54 | 2.08 | 3.11 | |||||||||||||||
Total other earning assets | .24 | .64 | 1.97 | 1.98 | 2.89 | |||||||||||||||
Total earning assets/interest income | 3.98 | % | 4.78 | % | 5.17 | % | 5.24 | % | 5.86 | % | ||||||||||
Liabilities: | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||
Other interest-bearing deposits | .24 | % | .38 | % | .66 | % | .74 | % | 1.19 | % | ||||||||||
Savings | 1.35 | 1.57 | 1.69 | 1.76 | 2.50 | |||||||||||||||
Time deposits | 3.34 | 3.51 | 3.69 | 4.06 | 4.55 | |||||||||||||||
Total interest-bearing core deposits | 1.63 | 1.89 | 2.06 | 2.21 | 2.85 | |||||||||||||||
Certificates of deposit $100,000 and more | 2.54 | 3.38 | 3.28 | 3.45 | 4.63 | |||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | .21 | .54 | 1.64 | 1.88 | 2.95 | |||||||||||||||
Capital markets trading liabilities | 3.85 | 4.79 | 4.66 | 4.92 | 4.57 | |||||||||||||||
Other short-term borrowings and commercial paper | .30 | 1.57 | 2.39 | 2.30 | 3.29 | |||||||||||||||
Long term debt: | ||||||||||||||||||||
Term borrowings | 2.05 | 3.57 | 3.21 | 3.20 | 4.41 | |||||||||||||||
Other collateralized borrowings | .82 | 2.74 | 2.92 | 2.94 | 4.06 | |||||||||||||||
Total long-term debt | 1.83 | 3.45 | 3.17 | 3.17 | 4.37 | |||||||||||||||
Total interest-bearing liabilities/interest expense | 1.38 | % | 2.20 | % | 2.52 | % | 2.58 | % | 3.51 | % | ||||||||||
Net interest spread | 2.60 | % | 2.58 | % | 2.65 | % | 2.66 | % | 2.35 | % | ||||||||||
Effect of interest-free sources used to fund earning assets | .29 | .38 | .36 | .35 | .46 | |||||||||||||||
Net interest margin | 2.89 | % | 2.96 | % | 3.01 | % | 3.01 | % | 2.81 | % | ||||||||||
Certain previously reported amounts have been reclassified to agree with current presentation.
Yields are adjusted to a fully taxable equivalent.
Earning assets yields are expressed net of unearned income.
Rates are expressed net of unamortized debenture cost for long-term debt.
Net interest margin is computed using total net interest income.
(a) Includes loans on nonaccrual status.
14
MORTGAGE SERVICING RIGHTS Quarterly, Unaudited | ||
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
First Liens | ||||||||||||||||||||||||||||
Fair value beginning balance | $ | 354,394 | $ | 770,635 | $ | 1,111,204 | $ | 865,855 | $ | 1,122,415 | (54 | )% | (68 | )% | ||||||||||||||
Addition of mortgage servicing rights | 189 | 1,073 | 61,501 | 100,305 | 78,871 | |||||||||||||||||||||||
Reductions due to loan payments | (17,480 | ) | (10,771 | ) | (22,179 | ) | (38,598 | ) | (37,448 | ) | ||||||||||||||||||
Reductions due to sale | — | (52,006 | ) | (317,640 | ) | (72,271 | ) | (43,842 | ) | |||||||||||||||||||
Changes in fair value due to: | ||||||||||||||||||||||||||||
Changes in valuation model inputs or assumptions (a) | 26,740 | (354,558 | ) | (63,061 | ) | 255,890 | (254,076 | ) | ||||||||||||||||||||
Other changes in fair value | (2,500 | ) | 21 | 810 | 23 | (65 | ) | |||||||||||||||||||||
Fair value ending balance | $ | 361,343 | $ | 354,394 | $ | 770,635 | $ | 1,111,204 | $ | 865,855 | 2 | % | (58 | )% | ||||||||||||||
Second Liens | ||||||||||||||||||||||||||||
Fair value beginning balance | $ | 13,558 | $ | 17,513 | $ | 18,138 | $ | 20,126 | $ | 25,832 | (23 | )% | (48 | )% | ||||||||||||||
Addition of mortgage servicing rights | — | — | — | — | — | |||||||||||||||||||||||
Reductions due to loan payments | (2,524 | ) | (1,517 | ) | (614 | ) | (1,737 | ) | (2,617 | ) | ||||||||||||||||||
Changes in fair value due to: | ||||||||||||||||||||||||||||
Changes in valuation model inputs or assumptions (a) | (5 | ) | (2,438 | ) | (14 | ) | (254 | ) | (3,089 | ) | ||||||||||||||||||
Other changes in fair value | — | — | 3 | 3 | — | |||||||||||||||||||||||
Fair value ending balance | $ | 11,029 | $ | 13,558 | $ | 17,513 | $ | 18,138 | $ | 20,126 | (19 | )% | (45 | )% | ||||||||||||||
HELOC | ||||||||||||||||||||||||||||
Fair value beginning balance | $ | 8,892 | $ | 10,343 | $ | 10,053 | $ | 9,942 | $ | 11,573 | (14 | )% | (23 | )% | ||||||||||||||
Addition of mortgage servicing rights | 11 | 43 | 43 | 215 | 887 | |||||||||||||||||||||||
Reductions due to loan payments | (419 | ) | (432 | ) | (483 | ) | (491 | ) | (707 | ) | ||||||||||||||||||
Changes in fair value due to: | ||||||||||||||||||||||||||||
Changes in valuation model inputs or assumptions (a) | — | (1,401 | ) | — | (230 | ) | (1,935 | ) | ||||||||||||||||||||
Other changes in fair value | 168 | 339 | 730 | 617 | 124 | |||||||||||||||||||||||
Fair value ending balance | $ | 8,652 | $ | 8,892 | $ | 10,343 | $ | 10,053 | $ | 9,942 | (3 | )% | (13 | )% | ||||||||||||||
Total Consolidated | ||||||||||||||||||||||||||||
Fair value beginning balance | $ | 376,844 | $ | 798,491 | $ | 1,139,395 | $ | 895,923 | $ | 1,159,820 | (53 | )% | (68 | )% | ||||||||||||||
Addition of mortgage servicing rights | 200 | 1,116 | 61,544 | 100,520 | 79,758 | |||||||||||||||||||||||
Reductions due to loan payments | (20,423 | ) | (12,720 | ) | (23,276 | ) | (40,826 | ) | (40,772 | ) | ||||||||||||||||||
Reductions due to sale | — | (52,006 | ) | (317,640 | ) | (72,271 | ) | (43,842 | ) | |||||||||||||||||||
Changes in fair value due to: | ||||||||||||||||||||||||||||
Changes in valuation model inputs or assumptions (a) | 26,735 | (358,397 | ) | (63,075 | ) | 255,406 | (259,100 | ) | ||||||||||||||||||||
Other changes in fair value | (2,332 | ) | 360 | 1,543 | 643 | 59 | ||||||||||||||||||||||
Fair value ending balance | $ | 381,024 | $ | 376,844 | $ | 798,491 | $ | 1,139,395 | $ | 895,923 | 1 | % | (57 | )% | ||||||||||||||
Certain previously reported amounts have been reclassified to agree with current presentation.
(a) | Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates. |
15
BUSINESS SEGMENT HIGHLIGHTS Quarterly, Unaudited | ||
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Regional Banking | ||||||||||||||||||||||||||||
Total revenues (a) | $ | 182,259 | $ | 199,884 | $ | 210,193 | $ | 212,837 | $ | 207,687 | (9 | )% | (12 | )% | ||||||||||||||
Provision for loan losses | 97,826 | 105,825 | 58,200 | 89,477 | 75,265 | (8 | )% | 30 | % | |||||||||||||||||||
Noninterest expenses | 173,725 | 168,130 | 157,652 | 149,048 | 151,154 | 3 | % | 15 | % | |||||||||||||||||||
Pre-tax loss | (89,292 | ) | (74,071 | ) | (5,659 | ) | (25,688 | ) | (18,732 | ) | (21 | )% | (377 | )% | ||||||||||||||
Benefit for income taxes | (38,930 | ) | (29,247 | ) | (12,705 | ) | (20,690 | ) | (15,409 | ) | (33 | )% | (153 | )% | ||||||||||||||
Net income/(loss) from continuing operations | (50,362 | ) | (44,824 | ) | 7,046 | (4,998 | ) | (3,323 | ) | (12 | )% | NM | ||||||||||||||||
Income from discontinued operations, net of tax | — | — | — | — | 883 | NM | NM | |||||||||||||||||||||
Net income/(loss) | $ | (50,362 | ) | $ | (44,824 | ) | $ | 7,046 | $ | (4,998 | ) | $ | (2,440 | ) | (12 | )% | NM | |||||||||||
National Specialty Lending | ||||||||||||||||||||||||||||
Total revenues (a) | $ | 26,691 | $ | 36,212 | $ | 49,304 | $ | 38,867 | $ | 54,773 | (26 | )% | (51 | )% | ||||||||||||||
Provision for loan losses | 188,573 | 144,049 | 240,471 | 108,000 | 149,482 | 31 | % | 26 | % | |||||||||||||||||||
Noninterest expenses | 30,588 | 24,094 | 25,183 | 28,072 | 26,495 | 27 | % | 15 | % | |||||||||||||||||||
Pre-tax loss | (192,470 | ) | (131,931 | ) | (216,350 | ) | (97,205 | ) | (121,204 | ) | (46 | )% | (59 | )% | ||||||||||||||
Benefit for income taxes | (72,523 | ) | (49,712 | ) | (80,144 | ) | (34,106 | ) | (46,964 | ) | (46 | )% | (54 | )% | ||||||||||||||
Net loss | $ | (119,947 | ) | $ | (82,219 | ) | $ | (136,206 | ) | $ | (63,099 | ) | $ | (74,240 | ) | (46 | )% | (62 | )% | |||||||||
Mortgage Banking | ||||||||||||||||||||||||||||
Total revenues (a) | $ | 130,475 | $ | 94,933 | $ | 137,865 | $ | 222,289 | $ | 198,059 | 37 | % | (34 | )% | ||||||||||||||
Provision for loan losses | (408 | ) | 22,018 | 2,878 | 4,001 | 222 | (102 | )% | NM | |||||||||||||||||||
Noninterest expenses | 47,627 | 39,640 | 92,925 | 153,728 | 149,587 | 20 | % | (68 | )% | |||||||||||||||||||
Pre-tax income | 83,256 | 33,275 | 42,062 | 64,560 | 48,250 | 150 | % | 73 | % | |||||||||||||||||||
Provision for income taxes | 31,371 | 12,124 | 15,255 | 21,399 | 17,472 | 159 | % | 80 | % | |||||||||||||||||||
Net income | $ | 51,885 | $ | 21,151 | $ | 26,807 | $ | 43,161 | $ | 30,778 | 145 | % | 69 | % | ||||||||||||||
Capital Markets | ||||||||||||||||||||||||||||
Total revenues (a) | $ | 240,097 | $ | 197,445 | $ | 117,555 | $ | 143,221 | $ | 153,688 | 22 | % | 56 | % | ||||||||||||||
Provision for loan losses | 14,009 | 8,108 | 38,451 | 18,522 | 15,031 | 73 | % | (7 | )% | |||||||||||||||||||
Noninterest expenses | 151,830 | 115,454 | 87,334 | 100,265 | 115,812 | 32 | % | 31 | % | |||||||||||||||||||
Pre-tax income/(loss) | 74,258 | 73,883 | (8,230 | ) | 24,434 | 22,845 | 1 | % | 225 | % | ||||||||||||||||||
Provision/(benefit) for income taxes | 27,911 | 27,713 | (3,237 | ) | 9,098 | 8,446 | 1 | % | 230 | % | ||||||||||||||||||
Net income/(loss) | $ | 46,347 | $ | 46,170 | $ | (4,993 | ) | $ | 15,336 | $ | 14,399 | * | 222 | % | ||||||||||||||
Corporate | ||||||||||||||||||||||||||||
Total revenues (a) | $ | 24,934 | $ | 14,492 | $ | 13,403 | $ | 20,727 | $ | 62,961 | 72 | % | (60 | )% | ||||||||||||||
Noninterest expenses | 13,558 | (1,869 | ) | 36,305 | 31,886 | (8,832 | ) | NM | NM | |||||||||||||||||||
Pre-tax income/(loss) | 11,376 | 16,361 | (22,902 | ) | (11,159 | ) | 71,793 | (30 | )% | (84 | )% | |||||||||||||||||
Provision/(benefit) for income taxes | 4,394 | 8,134 | (8,028 | ) | (4,522 | ) | 28,309 | (46 | )% | (84 | )% | |||||||||||||||||
Net income/(loss) | $ | 6,982 | $ | 8,227 | $ | (14,874 | ) | $ | (6,637 | ) | $ | 43,484 | (15 | )% | (84 | )% | ||||||||||||
Total Consolidated | ||||||||||||||||||||||||||||
Total revenues (a) | $ | 604,456 | $ | 542,966 | $ | 528,320 | $ | 637,941 | $ | 677,168 | 11 | % | (11 | )% | ||||||||||||||
Provision for loan losses | 300,000 | 280,000 | 340,000 | 220,000 | 240,000 | 7 | % | 25 | % | |||||||||||||||||||
Noninterest expenses | 417,328 | 345,449 | 399,399 | 462,999 | 434,216 | 21 | % | (4 | )% | |||||||||||||||||||
Pre-tax income/(loss) | (112,872 | ) | (82,483 | ) | (211,079 | ) | (45,058 | ) | 2,952 | (37 | )% | NM | ||||||||||||||||
Benefit for income taxes | (47,777 | ) | (30,988 | ) | (88,859 | ) | (28,821 | ) | (8,146 | ) | (54 | )% | NM | |||||||||||||||
Net income/(loss) from continuing operations | (65,095 | ) | (51,495 | ) | (122,220 | ) | (16,237 | ) | 11,098 | (26 | )% | NM | ||||||||||||||||
Income from discontinued operations, net of tax | — | — | — | — | 883 | NM | NM | |||||||||||||||||||||
Net income/(loss) | $ | (65,095 | ) | $ | (51,495 | ) | $ | (122,220 | ) | $ | (16,237 | ) | $ | 11,981 | (26 | )% | NM | |||||||||||
NM — Not meaningful
* | Amount is less than one percent. |
Certain previously reported amounts have been reclassified to agree with current presentation.
(a) | Includes noninterest income and net interest income. |
16
REGIONAL BANKING Quarterly, Unaudited | ||
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||
Net interest income | $ | 105,969 | $ | 117,163 | $ | 122,162 | $ | 120,153 | $ | 120,483 | (10 | )% | (12 | )% | ||||||||||||||
Noninterest income | 76,290 | 82,721 | 88,031 | 92,684 | 87,204 | (8 | )% | (13 | )% | |||||||||||||||||||
Securities gains/(losses), net | — | — | — | — | — | NM | NM | |||||||||||||||||||||
Total revenue | 182,259 | 199,884 | 210,193 | 212,837 | 207,687 | (9 | )% | (12 | )% | |||||||||||||||||||
Total noninterest expense | 173,725 | 168,130 | 157,652 | 149,048 | 151,154 | 3 | % | 15 | % | |||||||||||||||||||
Provision | 97,826 | 105,825 | 58,200 | 89,477 | 75,265 | (8 | )% | 30 | % | |||||||||||||||||||
Pretax income/(loss) | $ | (89,292 | ) | $ | (74,071 | ) | $ | (5,659 | ) | $ | (25,688 | ) | $ | (18,732 | ) | (21 | )% | (377 | )% | |||||||||
Efficiency ratio | 95.32 | % | 84.11 | % | 75.00 | % | 70.03 | % | 72.78 | % | ||||||||||||||||||
Balance Sheet (millions) | ||||||||||||||||||||||||||||
Average loans | $ | 10,887 | $ | 10,898 | $ | 10,915 | $ | 10,801 | $ | 10,705 | * | 2 | % | |||||||||||||||
Other earning assets | 203 | 163 | 65 | 242 | 339 | 25 | % | (40 | )% | |||||||||||||||||||
Total earning assets | 11,090 | 11,061 | 10,980 | 11,043 | 11,044 | * | * | |||||||||||||||||||||
Core deposits | 10,250 | 9,753 | 9,564 | 9,970 | 10,059 | 5 | % | 2 | % | |||||||||||||||||||
Other deposits | 996 | 978 | 976 | 1,053 | 1,160 | 2 | % | (14 | )% | |||||||||||||||||||
Deposits — divestiture | — | — | — | 37 | 153 | NM | NM | |||||||||||||||||||||
Total deposits | 11,246 | 10,731 | 10,540 | 11,060 | 11,372 | 5 | % | (1 | )% | |||||||||||||||||||
Total period end deposits | 11,493 | 10,993 | 10,621 | 11,035 | 11,370 | 5 | % | 1 | % | |||||||||||||||||||
Total period end assets | $ | 11,525 | $ | 12,001 | $ | 12,303 | $ | 12,228 | $ | 12,175 | (4 | )% | (5 | )% | ||||||||||||||
Net interest margin | 3.88 | % | 4.21 | % | 4.43 | % | 4.38 | % | 4.39 | % | (8 | )% | (12 | )% | ||||||||||||||
Noninterest Income Detail | ||||||||||||||||||||||||||||
Deposit transactions & cash mgmt | $ | 37,438 | $ | 42,388 | $ | 44,470 | $ | 45,404 | $ | 41,230 | (12 | )% | (9 | )% | ||||||||||||||
Insurance commissions | 6,966 | 7,027 | 7,160 | 7,033 | 7,854 | (1 | )% | (11 | )% | |||||||||||||||||||
Trust services & investment mgmt | 6,840 | 7,697 | 8,192 | 8,915 | 9,147 | (11 | )% | (25 | )% | |||||||||||||||||||
Bankcard income | 4,129 | 4,416 | 4,706 | 4,752 | 4,491 | (6 | )% | (8 | )% | |||||||||||||||||||
Other service charges | 3,485 | 3,500 | 3,556 | 3,780 | 4,037 | * | (14 | )% | ||||||||||||||||||||
Miscellaneous revenue | 17,432 | 17,693 | 19,947 | 22,800 | 20,445 | (1 | )% | (15 | )% | |||||||||||||||||||
Total noninterest income | $ | 76,290 | $ | 82,721 | $ | 88,031 | $ | 92,684 | $ | 87,204 | (8 | )% | (13 | )% | ||||||||||||||
Key Statistics | ||||||||||||||||||||||||||||
Locations | ||||||||||||||||||||||||||||
Financial Centers | 202 | 202 | 200 | 198 | 206 | * | (2 | )% | ||||||||||||||||||||
First Tennessee | 202 | 202 | 200 | 198 | 197 | * | 3 | % | ||||||||||||||||||||
Full Service | 168 | 169 | 166 | 163 | 161 | (1 | )% | 4 | % | |||||||||||||||||||
Teller-Only | 34 | 33 | 34 | 35 | 36 | 3 | % | (6 | )% | |||||||||||||||||||
First Horizon Bank | — | — | — | — | 9 | NM | NM | |||||||||||||||||||||
Trust Assets | ||||||||||||||||||||||||||||
Total assets (millions) | $ | 8,872 | $ | 9,606 | $ | 11,015 | $ | 11,291 | $ | 11,681 | (8 | )% | (24 | )% | ||||||||||||||
Total managed assets (millions) | 4,467 | 4,664 | 5,089 | 5,373 | 5,641 | (4 | )% | (21 | )% | |||||||||||||||||||
NM — Not meaningful
* Amount is less than one percent.
Certain previously reported amounts have been reclassified to agree with current presentation.
17
CAPITAL MARKETS Quarterly, Unaudited | ||
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||
Net interest income | ||||||||||||||||||||||||||||
Correspondent Banking | $ | 14,144 | �� | $ | 12,381 | $ | 11,908 | $ | 12,518 | $ | 12,963 | 14 | % | 9 | % | |||||||||||||
Capital Markets | 9,263 | 7,779 | 7,133 | 6,070 | 6,820 | 19 | % | 36 | % | |||||||||||||||||||
Total net interest income | 23,407 | 20,160 | 19,041 | 18,588 | 19,783 | 16 | % | 18 | % | |||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||||
Fixed income | 197,005 | 156,522 | 80,104 | 105,002 | 152,208 | 26 | % | 29 | % | |||||||||||||||||||
Other | 19,685 | 20,763 | 18,410 | 19,631 | (18,303 | ) | (5 | )% | NM | |||||||||||||||||||
Total noninterest income | 216,690 | 177,285 | 98,514 | 124,633 | 133,905 | 22 | % | 62 | % | |||||||||||||||||||
Total revenue | 240,097 | 197,445 | 117,555 | 143,221 | 153,688 | 22 | % | 56 | % | |||||||||||||||||||
Noninterest expense | 151,830 | 115,454 | 87,334 | 100,265 | 115,812 | 32 | % | 31 | % | |||||||||||||||||||
Provision | 14,009 | 8,108 | 38,451 | 18,522 | 15,031 | 73 | % | (7 | )% | |||||||||||||||||||
Pretax income/(loss) | $ | 74,258 | $ | 73,883 | $ | (8,230 | ) | $ | 24,434 | $ | 22,845 | 1 | % | 225 | % | |||||||||||||
Efficiency ratio | 63.24 | % | 58.47 | % | 74.29 | % | 70.01 | % | 75.36 | % | ||||||||||||||||||
Balance Sheet (millions) | ||||||||||||||||||||||||||||
Trading inventory | $ | 1,117 | $ | 1,135 | $ | 1,356 | $ | 1,631 | $ | 1,962 | (2 | )% | (43 | )% | ||||||||||||||
Average Loans (a) | 1,962 | 1,720 | 1,759 | 1,491 | 1,465 | 14 | % | 34 | % | |||||||||||||||||||
Other earning assets | 874 | 980 | 1,275 | 1,656 | 1,728 | (11 | )% | (49 | )% | |||||||||||||||||||
Total earning assets | 3,953 | 3,835 | 4,390 | 4,778 | 5,155 | 3 | % | (23 | )% | |||||||||||||||||||
Total period end assets | $ | 5,219 | $ | 5,051 | $ | 5,960 | $ | 5,582 | $ | 6,142 | 3 | % | (15 | )% | ||||||||||||||
Net interest margin: | ||||||||||||||||||||||||||||
Correspondent Banking | 3.86 | % | 3.47 | % | 2.99 | % | 3.09 | % | 3.32 | % | ||||||||||||||||||
Capital Markets | 1.52 | % | 1.28 | % | 1.01 | % | .78 | % | .76 | % | ||||||||||||||||||
Total Capital Markets | 2.40 | % | 2.09 | % | 1.73 | % | 1.56 | % | 1.54 | % | ||||||||||||||||||
NM — Not meaningful
* | Amount is less than one percent. |
Certain previously reported amounts have been reclassified to agree with current presentation.
(a) | Includes trust preferred warehouse loans moved from loans held for sale to loans held to maturity in 2Q08. |
18
NATIONAL SPECIALTY LENDING Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||
Net interest income | $ | 33,361 | $ | 36,773 | $ | 45,182 | $ | 53,465 | $ | 54,221 | (9 | )% | (38 | )% | ||||||||||||||
Noninterest income | (6,670 | ) | (561 | ) | 4,122 | (14,598 | ) | 552 | NM | NM | ||||||||||||||||||
Total revenue | 26,691 | 36,212 | 49,304 | 38,867 | 54,773 | (26 | )% | (51 | )% | |||||||||||||||||||
Total noninterest expense | 30,588 | 24,094 | 25,183 | 28,072 | 26,495 | 27 | % | 15 | % | |||||||||||||||||||
Provision | 188,573 | 144,049 | 240,471 | 108,000 | 149,482 | 31 | % | 26 | % | |||||||||||||||||||
Pretax (loss) | $ | (192,470 | ) | $ | (131,931 | ) | $ | (216,350 | ) | $ | (97,205 | ) | $ | (121,204 | ) | (46 | )% | (59 | )% | |||||||||
Efficiency ratio | 114.60 | % | 66.54 | % | 51.08 | % | 72.23 | % | 48.37 | % | ||||||||||||||||||
Balance Sheet (millions) | ||||||||||||||||||||||||||||
Average loans | $ | 7,484 | $ | 7,922 | $ | 8,415 | $ | 8,966 | $ | 9,393 | (6 | )% | (20 | )% | ||||||||||||||
Other earning assets | 9 | 9 | 8 | 17 | 21 | * | (57 | )% | ||||||||||||||||||||
Total earning assets | 7,493 | 7,931 | 8,423 | 8,983 | 9,414 | (6 | )% | (20 | )% | |||||||||||||||||||
Total deposits | 134 | 140 | 181 | 240 | 291 | (4 | )% | (54 | )% | |||||||||||||||||||
Total period end deposits | 131 | 126 | 156 | 208 | 260 | 4 | % | (50 | )% | |||||||||||||||||||
Net interest margin | 1.81 | % | 1.84 | % | 2.13 | % | 2.39 | % | 2.32 | % | ||||||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent. | |
Certain previously reported amounts have been reclassified to agree with current presentation. |
19
MORTGAGE BANKING Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||
Net interest income | $ | 7,563 | $ | 8,904 | $ | 22,045 | $ | 31,827 | $ | 30,045 | NM | NM | ||||||||||||||||
Noninterest income | ||||||||||||||||||||||||||||
Net origination fees | 14,454 | (14,383 | ) | 19,828 | 134,095 | 84,056 | NM | NM | ||||||||||||||||||||
Net servicing fees | 101,202 | 99,402 | 80,603 | 42,614 | 69,344 | NM | NM | |||||||||||||||||||||
Other fees | 7,256 | 1,011 | 15,389 | 13,753 | 14,614 | NM | NM | |||||||||||||||||||||
Total noninterest income | 122,912 | 86,030 | 115,820 | 190,462 | 168,014 | NM | NM | |||||||||||||||||||||
Total revenue | 130,475 | 94,934 | 137,865 | 222,289 | 198,059 | NM | NM | |||||||||||||||||||||
Noninterest expense | 47,627 | 39,640 | 92,925 | 153,728 | 149,587 | NM | NM | |||||||||||||||||||||
Provision | (408 | ) | 22,018 | 2,878 | 4,001 | 222 | NM | NM | ||||||||||||||||||||
Pretax income | $ | 83,256 | $ | 33,276 | $ | 42,062 | $ | 64,560 | $ | 48,250 | NM | NM | ||||||||||||||||
Efficiency ratio | 36.50 | % | 41.76 | % | 67.40 | % | 69.16 | % | 75.53 | % | ||||||||||||||||||
Average Balance Sheet (millions) | ||||||||||||||||||||||||||||
Warehouse | $ | 430 | $ | 489 | $ | 1,810 | $ | 3,182 | $ | 3,230 | NM | NM | ||||||||||||||||
Trading securities | 164 | 235 | 359 | 372 | 387 | NM | NM | |||||||||||||||||||||
Mortgage servicing rights | 396 | 633 | 1,003 | 974 | 1,020 | NM | NM | |||||||||||||||||||||
Permanent Mortgages & other assets | 1,571 | 1,347 | 1,658 | 1,687 | 1,467 | NM | NM | |||||||||||||||||||||
Total assets | 2,561 | 2,704 | 4,830 | 6,215 | 6,104 | NM | NM | |||||||||||||||||||||
Escrow balances | 1,165 | 725 | 989 | 1,516 | 1,691 | NM | NM | |||||||||||||||||||||
Net interest margin | 2.18 | % | 2.31 | % | 2.99 | % | 3.16 | % | 2.98 | % | ||||||||||||||||||
Warehouse Spread | NM | NM | 3.83 | % | 3.14 | % | 2.63 | % | ||||||||||||||||||||
Noninterest Expense Detail | ||||||||||||||||||||||||||||
Commissions & incentives | $ | — | $ | 130 | $ | 18,415 | $ | 41,369 | $ | 45,956 | ||||||||||||||||||
FAS 91 cost deferral | 57 | 492 | 1,097 | 1,789 | 764 | |||||||||||||||||||||||
Other salaries & benefits | (27 | ) | (2,090 | ) | 22,011 | 39,228 | 35,700 | |||||||||||||||||||||
Total salaries & benefits | 30 | (1,468 | ) | 41,523 | 82,386 | 82,420 | NM | NM | ||||||||||||||||||||
Contract labor & outsourcing | 7,247 | 7,381 | 5,207 | 3,654 | 2,781 | |||||||||||||||||||||||
Equipment & occupancy | 945 | 3,448 | 8,882 | 13,513 | 14,895 | |||||||||||||||||||||||
Foreclosure provision | 12,267 | 2,752 | 849 | 5,535 | 2,395 | |||||||||||||||||||||||
Other expenses | 25,175 | 25,674 | 32,636 | 43,535 | 45,115 | |||||||||||||||||||||||
Total expenses before FAS 91 reclass | 45,664 | 37,787 | 89,097 | 148,623 | 147,606 | NM | NM | |||||||||||||||||||||
FAS 91 reclassification (a) | (73 | ) | (517 | ) | (3,064 | ) | (4,520 | ) | (3,962 | ) | ||||||||||||||||||
Total noninterest expense before segment allocations | 45,591 | 37,270 | 86,033 | 144,103 | 143,644 | |||||||||||||||||||||||
Segment allocations | 2,036 | 2,370 | 6,892 | 9,625 | 5,943 | |||||||||||||||||||||||
Total noninterest expense | $ | 47,627 | $ | 39,640 | $ | 92,925 | $ | 153,728 | $ | 149,587 | NM | NM | ||||||||||||||||
Origination Income | ||||||||||||||||||||||||||||
Origination fees | $ | 26 | $ | (55 | ) | $ | 22,995 | $ | 48,555 | $ | 54,636 | |||||||||||||||||
FAS 91 fee deferral | 57 | 496 | 937 | 1,381 | — | |||||||||||||||||||||||
Appraisal, final inspection, credit report fees | — | 45 | 2,824 | 5,537 | 5,953 | |||||||||||||||||||||||
Total origination fees | $ | 83 | $ | 486 | $ | 26,756 | $ | 55,473 | $ | 60,589 | NM | NM | ||||||||||||||||
Total origination income | $ | 14,454 | $ | (14,383 | ) | $ | 19,828 | $ | 134,095 | $ | 84,056 | NM | NM | |||||||||||||||
Warehouse/Pipeline (millions) | ||||||||||||||||||||||||||||
Ending Warehouse Balance | $ | 442 | $ | 408 | $ | 541 | $ | 2,433 | $ | 3,130 | NM | NM | ||||||||||||||||
Production (millions) | ||||||||||||||||||||||||||||
First lien production | $ | 408 | $ | 88 | $ | 3,107 | $ | 6,826 | $ | 7,510 | NM | NM | ||||||||||||||||
NM — Not meaningful due to Mortgage sale in 3Q08 | ||
* | Amount is less than one percent. | |
Certain previously reported amounts have been reclassified to agree with current presentation. | ||
(a) | See Glossary of Terms. |
20
MORTGAGE BANKING: SERVICING Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Servicing Income | ||||||||||||||||||||||||||||
Gross Service Fees | $ | 40,120 | $ | 47,810 | $ | 57,326 | $ | 74,941 | $ | 88,891 | ||||||||||||||||||
Guarantee Fees | (6,884 | ) | (7,626 | ) | (11,073 | ) | (16,762 | ) | (18,791 | ) | ||||||||||||||||||
Sub-Service Fee Income | — | 103 | 394 | 504 | 243 | |||||||||||||||||||||||
Lender Paid MI | — | 5 | (1,029 | ) | (3 | ) | (4 | ) | ||||||||||||||||||||
Net Service Fees | 33,236 | 40,292 | 45,618 | 58,680 | 70,339 | (18 | )% | (53 | )% | |||||||||||||||||||
Early Payoff Interest Expense | (3,716 | ) | (1,562 | ) | (1,733 | ) | (4,477 | ) | (5,446 | ) | ||||||||||||||||||
Ancillary Fees | 5,511 | 5,949 | 5,994 | 8,991 | 9,214 | |||||||||||||||||||||||
Total Service Fees | 35,031 | 44,679 | 49,879 | 63,194 | 74,107 | (22 | )% | (53 | )% | |||||||||||||||||||
Change in MSR Value — Runoff | (18,559 | ) | (9,899 | ) | (20,091 | ) | (37,079 | ) | (37,449 | ) | (87 | )% | 50 | % | ||||||||||||||
Net hedging results: | ||||||||||||||||||||||||||||
Change in MSR Value — Other than Runoff | 27,282 | (327,310 | ) | (39,180 | ) | 237,816 | (255,485 | ) | ||||||||||||||||||||
MSR Hedge Gains/(Losses) | 25,112 | 385,354 | 91,804 | (219,454 | ) | 280,935 | ||||||||||||||||||||||
Change in Trading Asset Value | 18,339 | (99,354 | ) | (11,198 | ) | 83,543 | (74,136 | ) | ||||||||||||||||||||
Trading Asset Hedge Gains/(Losses) | (13,997 | ) | 108,742 | 21,505 | (78,832 | ) | 86,322 | |||||||||||||||||||||
Option Expense on Servicing Hedges | — | (2,811 | ) | (12,116 | ) | (6,574 | ) | (4,950 | ) | |||||||||||||||||||
Total net hedging results | 84,730 | 64,621 | 50,815 | 16,499 | 32,686 | 31 | % | 159 | % | |||||||||||||||||||
Total Servicing Income | $ | 101,202 | $ | 99,401 | $ | 80,603 | $ | 42,614 | $ | 69,344 | 2 | % | 46 | % | ||||||||||||||
Key Servicing Metrics (millions) | ||||||||||||||||||||||||||||
Beginning Servicing Portfolio | $ | 63,661 | $ | 65,346 | $ | 98,385 | $ | 99,022 | $ | 103,709 | ||||||||||||||||||
Additions to portfolio | 306 | (83 | ) | 3,107 | 6,991 | 7,650 | ||||||||||||||||||||||
Prepayments | (3,492 | ) | (1,146 | ) | (1,350 | ) | (2,811 | ) | (4,144 | ) | ||||||||||||||||||
Amortization | (342 | ) | (420 | ) | (550 | ) | (672 | ) | (675 | ) | ||||||||||||||||||
Service Release Sales | — | (31 | ) | (117 | ) | (76 | ) | (69 | ) | |||||||||||||||||||
Bulk Sale | — | (5 | ) | (34,129 | ) | (4,069 | ) | (7,449 | ) | |||||||||||||||||||
Ending Servicing Portfolio (Owned) | $ | 60,133 | $ | 63,661 | $ | 65,346 | $ | 98,385 | $ | 99,022 | (6 | )% | (39 | )% | ||||||||||||||
Avg. Servicing Portfolio (Owned) | $ | 61,870 | $ | 64,550 | $ | 81,130 | $ | 95,124 | $ | 103,794 | (4 | )% | (40 | )% | ||||||||||||||
Average Loans Serviced (#) | 338,799 | 351,157 | 450,651 | 547,828 | 618,505 | (4 | )% | (45 | )% | |||||||||||||||||||
Portfolio Product Mix (Average) | ||||||||||||||||||||||||||||
GNMA | 3 | % | 4 | % | 5 | % | 10 | % | 8 | % | ||||||||||||||||||
FNMA/FHLMC | 51 | % | 58 | % | 64 | % | 63 | % | 64 | % | ||||||||||||||||||
Private | 45 | % | 37 | % | 30 | % | 24 | % | 25 | % | ||||||||||||||||||
Sub-Total | 99 | % | 99 | % | 99 | % | 97 | % | 97 | % | ||||||||||||||||||
Warehouse | 1 | % | 1 | % | 1 | % | 3 | % | 3 | % | ||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||
Other Portfolio Statistics | ||||||||||||||||||||||||||||
Net Service Fees — Annualized (bps) | 21 | 25 | 22 | 25 | 27 | |||||||||||||||||||||||
Total Service Fees — Annualized (bps) | 23 | 28 | 25 | 27 | 29 | |||||||||||||||||||||||
Ancillary Income per Loan (Annualized) | $ | 65.07 | $ | 67.77 | $ | 53.20 | $ | 65.65 | $ | 59.59 | (4 | )% | 9 | % | ||||||||||||||
Servicing Cost per Loan (Annualized) | $ | 82.15 | $ | 79.80 | $ | 62.45 | $ | 61.22 | $ | 56.39 | 3 | % | 46 | % | ||||||||||||||
Average Servicing Asset (millions) | 395 | 632 | 1,002 | 973 | 1,019 | |||||||||||||||||||||||
Servicing Book Value (bps) | 64 | 98 | 124 | 102 | 98 | |||||||||||||||||||||||
90+ Delinquency Rate, excluding foreclosures | 6.14 | % | 3.47 | % | 2.58 | % | 2.08 | % | 1.73 | % | ||||||||||||||||||
Change in MSR Asset / Average Servicing Asset | (51 | )% | (105 | )% | (13 | )% | 8 | % | 5 | % | ||||||||||||||||||
Run-Off Rate — Annualized | 23 | % | 10 | % | 10 | % | 14 | % | 18 | % | ||||||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent. | |
Certain previously reported amounts have been reclassified to agree with current presentation. |
21
CORPORATE Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||
Net interest income/(expense) | $ | 26,813 | $ | 22,502 | $ | 15,083 | $ | 15,005 | $ | 3,681 | 19 | % | 628 | % | ||||||||||||||
Net interest expense from deferred compensation | (526 | ) | (554 | ) | (366 | ) | (143 | ) | (121 | ) | 5 | % | (335 | )% | ||||||||||||||
Total net interest income/(expense) | 26,287 | 21,948 | 14,717 | 14,862 | 3,560 | 20 | % | 638 | % | |||||||||||||||||||
Noninterest income | 1,392 | 3,729 | 4,041 | 5,512 | 5 | (63 | )% | NM | ||||||||||||||||||||
Noninterest income from deferred compensation | (2,743 | ) | (12,531 | ) | (5,145 | ) | 1,325 | (6,550 | ) | 78 | % | 58 | % | |||||||||||||||
Total noninterest income | (1,351 | ) | (8,802 | ) | (1,104 | ) | 6,837 | (6,545 | ) | 85 | % | 79 | % | |||||||||||||||
Securities gains/(losses), net | (2 | ) | 1,346 | (210 | ) | (972 | ) | 65,946 | NM | NM | ||||||||||||||||||
Total revenue | 24,934 | 14,492 | 13,403 | 20,727 | 62,961 | 72 | % | (60 | )% | |||||||||||||||||||
Noninterest expense | 16,453 | 12,734 | 43,760 | 30,066 | (755 | ) | 29 | % | NM | |||||||||||||||||||
Deferred compensation expense | (2,895 | ) | (14,603 | ) | (7,455 | ) | 1,820 | (8,077 | ) | 80 | % | 64 | % | |||||||||||||||
Total noninterest expense | 13,558 | (1,869 | ) | 36,305 | 31,886 | (8,832 | ) | NM | NM | |||||||||||||||||||
Pretax income/(loss) | $ | 11,376 | $ | 16,361 | $ | (22,902 | ) | $ | (11,159 | ) | $ | 71,793 | (30 | )% | (84 | )% | ||||||||||||
Average Balance Sheet (millions) | ||||||||||||||||||||||||||||
Total earning assets | 3,489 | 3,329 | 2,835 | 2,974 | 3,001 | 5 | % | 16 | % | |||||||||||||||||||
Net interest margin | 3.06 | % | 2.62 | % | 2.07 | % | 2.01 | % | .48 | % | ||||||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent. | |
Certain previously reported amounts have been reclassified to agree with current presentation. |
22
CAPITAL HIGHLIGHTS Quarterly, Unaudited | ||
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Dollars in millions, except per share amounts) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Tier 1 Capital (a) | $ | 3,709.6 | $ | 3,784.1 | $ | 2,934.0 | $ | 3,034.7 | $ | 2,443.9 | (2 | )% | 52 | % | ||||||||||||||
Tier 2 Capital (a) | 1,295.3 | 1,299.5 | 1,313.7 | 1,341.7 | 1,421.0 | * | (9 | )% | ||||||||||||||||||||
Total Capital (a) | $ | 5,004.9 | $ | 5,083.6 | $ | 4,247.7 | $ | 4,376.4 | $ | 3,864.9 | (2 | )% | 29 | % | ||||||||||||||
Risk-Adjusted Assets (a) | $ | 24,762.1 | $ | 25,185.4 | $ | 26,427.2 | $ | 28,884.7 | $ | 29,709.3 | (2 | )% | (17 | )% | ||||||||||||||
Tier 1 Ratio (a) | 14.98 | % | 15.03 | % | 11.10 | % | 10.51 | % | 8.23 | % | ||||||||||||||||||
Tier 2 Ratio (a) | 5.23 | 5.15 | 4.97 | 4.64 | 4.78 | |||||||||||||||||||||||
Total Capital Ratio (a) | 20.21 | % | 20.18 | % | 16.07 | % | 15.15 | % | 13.01 | % | ||||||||||||||||||
Leverage Ratio (a) | 12.22 | % | 12.22 | % | 8.84 | % | 8.45 | % | 6.62 | % | ||||||||||||||||||
Shareholders’ Equity/Assets Ratio (b) | 11.24 | 11.52 | 8.76 | 8.42 | 6.46 | |||||||||||||||||||||||
Tangible Common Equity/RWA (a) | 8.61 | 8.80 | 8.78 | 8.45 | 6.17 | |||||||||||||||||||||||
Tangible Common Equity/Tangible Assets | 7.07 | 7.34 | 7.18 | 6.96 | 5.04 | |||||||||||||||||||||||
Tangible Book Value (c) | $ | 10.35 | $ | 10.72 | $ | 11.09 | $ | 11.65 | $ | 13.67 | ||||||||||||||||||
Book Value per Share (c) | 11.46 | 11.85 | 12.23 | 12.79 | 15.46 | |||||||||||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent. | |
Certain previously reported amounts have been reclassified to agree with current presentation. | ||
(a) | Current quarter is an estimate. | |
(b) | Calculated on period-end balances. | |
(c) | Shares restated for stock dividends paid through April 1, 2009. |
23
ASSET QUALITY: CONSOLIDATED Quarterly, Unaudited | ||
1Q09 Change vs. | ||||||||||||||||||||||||||||
(Thousands) | 1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | |||||||||||||||||||||
Allowance for Loan Losses Walk-Forward | ||||||||||||||||||||||||||||
Beginning Reserve | $ | 849,210 | $ | 760,456 | $ | 575,149 | $ | 483,203 | $ | 342,341 | 12 | % | 148 | % | ||||||||||||||
Provision | 300,000 | 280,000 | 340,000 | 220,000 | 240,000 | 7 | % | 25 | % | |||||||||||||||||||
Divestitures/acquisitions/transfers | — | — | — | (382 | ) | — | NM | NM | ||||||||||||||||||||
Charge-offs | (217,161 | ) | (199,075 | ) | (160,200 | ) | (131,385 | ) | (101,756 | ) | 9 | % | 113 | % | ||||||||||||||
Recoveries | 8,883 | 7,829 | 5,507 | 3,713 | 2,618 | 13 | % | 239 | % | |||||||||||||||||||
Ending Balance | $ | 940,932 | $ | 849,210 | $ | 760,456 | $ | 575,149 | $ | 483,203 | 11 | % | 95 | % | ||||||||||||||
Reserve for off-balance sheet commitments | 19,511 | 18,752 | 19,109 | 22,303 | 11,786 | 4 | % | 66 | % | |||||||||||||||||||
Total allowance for loan losses plus reserve | $ | 960,443 | $ | 867,962 | $ | 779,565 | $ | 597,452 | $ | 494,989 | 11 | % | 94 | % | ||||||||||||||
Allowance for Loan Losses | ||||||||||||||||||||||||||||
Regional Banking | $ | 348,435 | $ | 311,399 | $ | 269,397 | $ | 240,507 | $ | 184,472 | 12 | % | 89 | % | ||||||||||||||
Capital Markets | 72,001 | 63,554 | 63,654 | 42,745 | 24,338 | 13 | % | 196 | % | |||||||||||||||||||
National Specialty Lending | 495,936 | 446,254 | 420,220 | 287,212 | 273,127 | 11 | % | 82 | % | |||||||||||||||||||
Mortgage Banking | 24,560 | 28,003 | 7,185 | 4,685 | 1,266 | (12 | )% | NM | ||||||||||||||||||||
Total allowance for loan losses | $ | 940,932 | $ | 849,210 | $ | 760,456 | $ | 575,149 | $ | 483,203 | 11 | % | 95 | % | ||||||||||||||
Non-Performing Assets | ||||||||||||||||||||||||||||
Regional Banking | ||||||||||||||||||||||||||||
Nonperforming loans | $ | 192,796 | $ | 163,933 | $ | 133,138 | $ | 115,264 | $ | 81,244 | 18 | % | 137 | % | ||||||||||||||
Foreclosed real estate | 31,305 | 31,665 | 32,078 | 37,594 | 38,019 | (1 | )% | (18 | )% | |||||||||||||||||||
Total Regional Banking | 224,101 | 195,598 | 165,216 | 152,858 | 119,263 | 15 | % | 88 | % | |||||||||||||||||||
Capital Markets | ||||||||||||||||||||||||||||
Nonperforming loans | 40,383 | 27,339 | 27,284 | 41,527 | 13,030 | 48 | % | 210 | % | |||||||||||||||||||
Foreclosed real estate | 641 | 600 | 600 | 600 | 600 | 7 | % | 7 | % | |||||||||||||||||||
Total Capital Markets | 41,024 | 27,939 | 27,884 | 42,127 | 13,630 | 47 | % | 201 | % | |||||||||||||||||||
National Specialty Lending | ||||||||||||||||||||||||||||
Nonperforming loans | 845,964 | 834,042 | 718,624 | 582,523 | 433,285 | 1 | % | 95 | % | |||||||||||||||||||
Foreclosed real estate | 64,586 | 52,725 | 57,251 | 45,384 | 29,680 | 22 | % | 118 | % | |||||||||||||||||||
Total National Specialty Lending | 910,550 | 886,767 | 775,875 | 627,907 | 462,965 | 3 | % | 97 | % | |||||||||||||||||||
Mortgage Banking | ||||||||||||||||||||||||||||
Nonperforming loans — including held for sale (a) | 53,569 | 28,335 | 20,930 | 30,704 | 9,693 | 89 | % | 453 | % | |||||||||||||||||||
Foreclosed real estate | 22,514 | 19,318 | 25,589 | 22,542 | 15,373 | 17 | % | 46 | % | |||||||||||||||||||
Total Mortgage Banking | 76,083 | 47,653 | 46,519 | 53,246 | 25,066 | 60 | % | 204 | % | |||||||||||||||||||
Total nonperforming assets | $ | 1,251,758 | $ | 1,157,957 | $ | 1,015,494 | $ | 876,138 | $ | 620,924 | 8 | % | 102 | % | ||||||||||||||
Net Charge-Offs | ||||||||||||||||||||||||||||
Regional Banking | $ | 60,791 | $ | 63,822 | $ | 29,310 | $ | 33,337 | $ | 29,942 | (5 | )% | 103 | % | ||||||||||||||
Capital Markets | 5,563 | 8,207 | 17,543 | 114 | 4,215 | (32 | )% | 32 | % | |||||||||||||||||||
National Specialty Lending | 138,889 | 118,017 | 107,462 | 93,640 | 64,906 | 18 | % | 114 | % | |||||||||||||||||||
Mortgage Banking | 3,035 | 1,200 | 378 | 581 | 75 | 153 | % | NM | ||||||||||||||||||||
Total net charge-offs | $ | 208,278 | $ | 191,246 | $ | 154,693 | $ | 127,672 | $ | 99,138 | 9 | % | 110 | % | ||||||||||||||
Consolidated Key Ratios (b) | ||||||||||||||||||||||||||||
NPL % | 5.44 | % | 4.91 | % | 4.12 | % | 3.42 | % | 2.41 | % | ||||||||||||||||||
NPA % | 5.98 | 5.38 | 4.63 | 3.88 | 2.78 | |||||||||||||||||||||||
Net charge-offs % | 3.97 | 3.61 | 2.84 | 2.35 | 1.81 | |||||||||||||||||||||||
Allowance / Loans | 4.57 | 3.99 | 3.52 | 2.59 | 2.20 | |||||||||||||||||||||||
Allowance to loans excluding insured loans | 4.69 | 4.11 | 3.63 | 2.68 | 2.26 | |||||||||||||||||||||||
Allowance / NPL | .84x | .81x | .85x | .76x | .92x | |||||||||||||||||||||||
Allowance / NPA | .76x | .74x | .76x | .66x | .79x | |||||||||||||||||||||||
Allowance / Charge-offs | 1.13x | 1.11x | 1.23x | 1.13x | 1.22x | |||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
Loans past due 90 days or more (c)(e) | $ | 250,801 | $ | 133,067 | $ | 119,588 | $ | 157,277 | $ | 300,185 | 88 | % | (16 | )% | ||||||||||||||
Guaranteed portion (c) | 40,205 | 42,478 | 50,419 | 64,696 | 223,572 | (5 | )% | (82 | )% | |||||||||||||||||||
Foreclosed real estate from GNMA loans | 13,607 | 21,230 | 35,943 | 35,737 | 22,346 | (36 | )% | (39 | )% | |||||||||||||||||||
Period-end loans, net of unearned income (millions) | $ | 20,572 | $ | 21,278 | $ | 21,602 | $ | 22,225 | $ | 21,932 | (3 | )% | (6 | )% | ||||||||||||||
Insured loans (millions) | 528 | 591 | 652 | 739 | 809 | (11 | )% | (35 | )% | |||||||||||||||||||
Total loans excluding insured loans (millions) | $ | 20,044 | $ | 20,687 | $ | 20,950 | $ | 21,486 | $ | 21,123 | (3 | )% | (5 | )% | ||||||||||||||
Off-balance sheet commitments (millions) (d) | $ | 6,077 | $ | 6,442 | $ | 6,746 | $ | 6,444 | $ | 6,826 | (6 | )% | (11 | )% | ||||||||||||||
Certain previously reported amounts have been reclassified to agree with current presentation. | ||
NM — Not meaningful | ||
* | Amount is less than one percent | |
(a) | 1Q 2009 includes $39,057 of loans held-to-maturity. | |
(b) | See Glossary of Terms for definitions of Consolidated Key Ratios. | |
(c) | Includes loans held for sale. | |
(d) | Amount of off-balance sheet commitments for which a reserve has been provided. | |
(e) | Includes some administrative delinquencies resolved subsequent to quarter end. |
24
ASSET QUALITY: CONSOLIDATED Quarterly, Unaudited | ||
1Q09 Change vs. | ||||||||||||||||||||||||||||
1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | ||||||||||||||||||||||
Key Portfolio Details | ||||||||||||||||||||||||||||
Commercial (C&I & Other) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 7,676 | $ | 7,806 | $ | 7,618 | $ | 7,721 | $ | 7,225 | (2 | )% | 6 | % | ||||||||||||||
30+ Delinq. % | 1.53 | % | .53 | % | 1.15 | % | 1.46 | % | .93 | % | ||||||||||||||||||
NPL % | 1.35 | 1.03 | 1.05 | 1.20 | .64 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 1.55 | 2.21 | 1.64 | .84 | .83 | |||||||||||||||||||||||
Allowance / Loans % | 2.97 | % | 2.46 | % | 2.29 | % | 1.90 | % | 1.59 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.89x | 1.16x | 1.41x | 2.46x | 2.31x | |||||||||||||||||||||||
Income CRE (Income-producing Commercial Real Estate) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 1,938 | $ | 1,988 | $ | 2,038 | $ | 2,039 | $ | 1,982 | (3 | )% | (2 | )% | ||||||||||||||
30+ Delinq. % | 4.23 | % | 2.42 | % | 3.47 | % | 1.43 | % | .57 | % | ||||||||||||||||||
NPL % | 6.30 | 5.02 | 3.72 | 3.54 | 2.01 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 3.36 | 2.73 | .24 | .63 | 1.94 | |||||||||||||||||||||||
Allowance / Loans % | 5.21 | % | 4.71 | % | 3.73 | % | 2.89 | % | 2.47 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.53x | 1.70x | 15.48x | 4.82x | 1.28x | |||||||||||||||||||||||
Residential CRE (Homebuilder and Condominium Construction) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 1,133 | $ | 1,288 | $ | 1,480 | $ | 1,739 | $ | 1,980 | (12 | )% | (43 | )% | ||||||||||||||
30+ Delinq. % | 10.43 | % | 3.74 | % | 5.73 | % | 6.36 | % | 2.73 | % | ||||||||||||||||||
NPL % | 36.34 | 30.71 | 23.64 | 16.65 | 12.07 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 18.10 | 15.79 | 11.95 | 6.23 | 5.93 | |||||||||||||||||||||||
Allowance / Loans % | 8.59 | % | 8.25 | % | 7.55 | % | 5.26 | % | 3.64 | % | ||||||||||||||||||
Allowance / Charge-offs | .44x | .49x | .58x | .76x | .58x | |||||||||||||||||||||||
Consumer Real Estate (Home Equity Installment and HELOC) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 7,609 | $ | 7,749 | $ | 7,830 | $ | 7,909 | $ | 7,964 | (2 | )% | (4 | )% | ||||||||||||||
30+ Delinq. % | 2.01 | % | 1.97 | % | 1.49 | % | 1.27 | % | 1.55 | % | ||||||||||||||||||
NPL % | .07 | .07 | .07 | .09 | .11 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 2.38 | 1.81 | 1.41 | 1.78 | .93 | |||||||||||||||||||||||
Allowance / Loans % | 3.06 | % | 2.35 | % | 1.58 | % | 1.70 | % | 1.19 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.27x | 1.29x | 1.12x | 0.95x | 1.28x | |||||||||||||||||||||||
OTC (Consumer Residential Construction Loans) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 773 | $ | 981 | $ | 1,202 | $ | 1,522 | $ | 1,815 | (21 | )% | (57 | )% | ||||||||||||||
30+ Delinq. % | 2.82 | % | 4.43 | % | 4.92 | % | 2.69 | % | 2.67 | % | ||||||||||||||||||
NPL % | 55.19 | 43.03 | 28.94 | 17.61 | 11.01 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 21.10 | 14.80 | 12.29 | 9.90 | 4.63 | |||||||||||||||||||||||
Allowance / Loans % | 23.74 | % | 20.44 | % | 20.16 | % | 7.75 | % | 6.49 | % | ||||||||||||||||||
Allowance / Charge-offs | 0.99x | 1.25x | 1.46x | 0.78x | 1.33x | |||||||||||||||||||||||
Permanent Mortgage | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 1,109 | $ | 1,127 | $ | 1,080 | $ | 1,004 | $ | 647 | (2 | )% | 71 | % | ||||||||||||||
30+ Delinq. % | 10.11 | % | 6.94 | % | 7.38 | % | 6.36 | % | 7.73 | % | ||||||||||||||||||
NPL % | 4.44 | 3.73 | 2.94 | 3.04 | – | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 3.47 | .57 | .22 | 1.15 | .41 | |||||||||||||||||||||||
Allowance / Loans % | 7.06 | % | 4.76 | % | 1.17 | % | 1.24 | % | .20 | % | ||||||||||||||||||
Allowance / Charge-offs | 2.04x | 8.59x | 5.48x | 1.12x | 1.75x | |||||||||||||||||||||||
Credit Card and Other | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 335 | $ | 339 | $ | 354 | $ | 291 | $ | 319 | (1 | )% | 5 | % | ||||||||||||||
30+ Delinq. % | 2.33 | % | 2.47 | % | 2.08 | % | 2.11 | % | 2.37 | % | ||||||||||||||||||
NPL % | – | – | – | – | – | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 4.81 | % | 5.09 | % | 5.30 | % | 3.29 | % | 5.14 | % | ||||||||||||||||||
Allowance / Loans % | 6.04 | % | 6.35 | % | 5.52 | % | 5.43 | % | 4.58 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.26x | 1.24x | 1.06x | 1.45x | .89x | |||||||||||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent | |
Certain previously reported amounts have been reclassified to agree with current presentation. |
25
Analysis of FAS 114 Loans, ORE, & NPL Rollforward Unaudited |
($ in millions)
Commercial Portfolio
Reserves
Reserves
Reserves | Balances | % | ||||||||||
FAS 114 Impaired Loans with Reserves | $ | 5.8 | $ | 21.4 | 26.91 | % | ||||||
FAS 114 Impaired Loans without Reserves | — | 504.9 | — | |||||||||
All Other Loans | 420.3 | 10,242.6 | 4.10 | % | ||||||||
Total | $ | 426.1 | $ | 10,768.9 | 3.96 | % | ||||||
NRV Assessment of Commercial FAS 114 Impaired Assets with no Reserves
Book Bal / | ||||||||||||||||||||||||
# | Appraised Value | Legal Balance | Cumulative C/O | Book Balance | Appraised Val | |||||||||||||||||||
FAS 114 Relationships with no Reserves | 186 | $837.2 | $740.5 | $235.7 | $504.8 | 60.3 | % | |||||||||||||||||
ORE Inventory Rollforward
1Q09 | 4Q08 | 3Q08 | 2Q08 | |||||||||||||
Beginning ORE | $ | 104.3 | $ | 115.5 | $ | 106.1 | $ | 83.7 | ||||||||
- Dispositions | (6.6 | ) | (33.0 | ) | (28.2 | ) | (12.9 | ) | ||||||||
+ Additions | 21.3 | 21.8 | 37.6 | 35.3 | ||||||||||||
Ending ORE | $ | 119.0 | $ | 104.3 | $ | 115.5 | $ | 106.1 | ||||||||
NPL Rollforward (a)
1Q09 | 4Q08 | 3Q08 | 2Q08 | |||||||||||||
Beginning NPLs | $ | 998 | $ | 854 | $ | 722 | $ | 501 | ||||||||
+ Additions | 316 | 393 | 356 | 365 | ||||||||||||
+ Principal Increase | 13 | 7 | 4 | 3 | ||||||||||||
- Payments | �� | (81 | ) | (82 | ) | (75 | ) | (36 | ) | |||||||
- Charge-Offs | (149 | ) | (150 | ) | (122 | ) | (86 | ) | ||||||||
- Transfer to ORE | (33 | ) | (18 | ) | (30 | ) | (24 | ) | ||||||||
- Upgrade to Accrual | (1 | ) | (6 | ) | (1 | ) | (1 | ) | ||||||||
Ending NPLs | $ | 1,064 | $ | 998 | $ | 854 | $ | 722 | ||||||||
(a) Includes Commercial & One Time Close Portfolios only |
26
ASSET QUALITY: REGIONAL BANKING Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | ||||||||||||||||||||||
Total Regional Banking | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 10,727 | $ | 11,017 | $ | 11,008 | $ | 11,037 | $ | 10,803 | (3 | )% | (1 | )% | ||||||||||||||
30+ Delinq. % | 1.87 | % | 1.07 | % | 1.45 | % | 1.50 | % | 1.23 | % | ||||||||||||||||||
NPL % | 1.80 | 1.49 | 1.21 | 1.04 | .75 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 2.23 | 2.34 | 1.07 | 1.23 | 1.16 | |||||||||||||||||||||||
Allowance / Loans % | 3.25 | % | 2.83 | % | 2.45 | % | 2.18 | % | 1.71 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.43 | x | 1.22 | x | 2.30 | x | 1.80 | x | 1.54 | x | ||||||||||||||||||
Key Portfolio Details | ||||||||||||||||||||||||||||
Commercial (C&I & Other) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 5,855 | $ | 6,132 | $ | 6,064 | $ | 6,107 | $ | 6,134 | (5 | )% | (5 | )% | ||||||||||||||
30+ Delinq. % | 1.56 | % | .54 | % | 1.37 | % | 1.40 | % | .98 | % | ||||||||||||||||||
NPL % | 1.33 | 1.18 | 1.09 | .92 | .62 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 1.96 | 2.36 | .96 | 1.03 | .75 | |||||||||||||||||||||||
Allowance / Loans % | 2.93 | % | 2.34 | % | 2.10 | % | 1.92 | % | 1.59 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.46 | x | 1.01 | x | 2.21 | x | 1.98 | x | 2.29 | x | ||||||||||||||||||
Income CRE (Income-producing Commercial Real Estate) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 1,438 | $ | 1,462 | $ | 1,504 | $ | 1,484 | $ | 1,365 | (2 | )% | 5 | % | ||||||||||||||
30+ Delinq. % | 2.82 | % | 1.25 | % | 1.21 | % | .99 | % | .52 | % | ||||||||||||||||||
NPL % | 3.57 | 2.31 | 1.73 | 1.60 | 1.42 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 2.57 | 1.50 | .07 | .46 | 2.57 | |||||||||||||||||||||||
Allowance / Loans % | 5.07 | % | 4.70 | % | 3.45 | % | 2.80 | % | 2.35 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.94 | x | 3.09 | x | 49.80 | x | 6.68 | x | .93 | x | ||||||||||||||||||
�� | ||||||||||||||||||||||||||||
Residential CRE (Homebuilder and Condominium Construction) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 396 | $ | 435 | $ | 473 | $ | 528 | $ | 526 | (9 | )% | (25 | )% | ||||||||||||||
30+ Delinq. % | 6.61 | % | 4.97 | % | 3.94 | % | 5.43 | % | 2.61 | % | ||||||||||||||||||
NPL % | 16.10 | 13.27 | 8.71 | 6.68 | 4.68 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 8.81 | 9.97 | 4.55 | 2.02 | 2.30 | |||||||||||||||||||||||
Allowance / Loans % | 10.19 | % | 8.54 | % | 8.52 | % | 5.61 | % | 3.92 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.09 | x | .83 | x | 1.75 | x | 2.93 | x | 1.65 | x | ||||||||||||||||||
Consumer Real Estate (Home Equity Installment and HELOC) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 2,696 | $ | 2,644 | $ | 2,606 | $ | 2,614 | $ | 2,486 | 2 | % | 8 | % | ||||||||||||||
30+ Delinq. % | 1.32 | % | 1.41 | % | 1.32 | % | 1.22 | % | 1.83 | % | ||||||||||||||||||
Charge-offs % (qtr. annualized) | 1.45 | 1.23 | .81 | 1.50 | .76 | |||||||||||||||||||||||
Allowance / Loans % | 1.79 | % | 1.70 | % | 1.26 | % | 1.36 | % | .70 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.24 | x | 1.40 | x | 1.57 | x | .90 | x | .92 | x | ||||||||||||||||||
Credit Card, Permanent Mortgage, and Other | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 342 | $ | 345 | $ | 361 | $ | 304 | $ | 293 | (1 | )% | 17 | % | ||||||||||||||
30+ Delinq. % | 1.83 | % | 2.09 | % | 1.66 | % | 1.71 | % | 1.89 | % | ||||||||||||||||||
Charge-offs % (qtr. annualized) | 3.48 | 4.04 | 4.69 | 2.37 | 4.69 | |||||||||||||||||||||||
Allowance / Loans % | 4.56 | % | 5.07 | % | 5.31 | % | 5.55 | % | 4.43 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.31 | x | 1.25 | x | 1.16 | x | 2.34 | x | .95 | x | ||||||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent | |
Certain previously reported amounts have been reclassified to agree with current presentation. |
27
ASSET QUALITY: NATIONAL SPECIALTY LENDING Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | ||||||||||||||||||||||
Total National Specialty Lending | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 7,143 | $ | 7,668 | $ | 8,058 | $ | 8,622 | $ | 9,114 | (7 | )% | (22 | )% | ||||||||||||||
30+ Delinq. % | 4.49 | % | 3.46 | % | 3.67 | % | 2.67 | % | 1.85 | % | ||||||||||||||||||
NPL % | 11.84 | 10.88 | 8.92 | 6.76 | 4.75 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 7.47 | 6.00 | 5.14 | 4.18 | 2.80 | |||||||||||||||||||||||
Allowance / Loans % | 6.94 | % | 5.82 | % | 5.21 | % | 3.33 | % | 3.00 | % | ||||||||||||||||||
Allowance / Charge-offs | .89 | x | .95 | x | .98 | x | .77 | x | 1.05 | x | ||||||||||||||||||
Key Portfolio Details | ||||||||||||||||||||||||||||
Income CRE (Income-producing Commercial Real Estate) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 341 | $ | 356 | $ | 378 | $ | 395 | $ | 428 | (4 | )% | (20 | )% | ||||||||||||||
30+ Delinq. % | 9.03 | % | 7.51 | % | 13.37 | % | .80 | % | .55 | % | ||||||||||||||||||
NPL % | 20.52 | 18.22 | 12.77 | 12.15 | 4.65 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 7.66 | 8.74 | .91 | 1.43 | .87 | |||||||||||||||||||||||
Allowance / Loans % | 5.23 | % | 4.67 | % | 4.28 | % | 2.63 | % | 3.07 | % | ||||||||||||||||||
Allowance / Charge-offs | .67 | x | .50 | x | 4.53 | x | 1.72 | x | 3.67 | x | ||||||||||||||||||
Residential CRE (Homebuilder and Condominium Construction) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 682 | $ | 780 | $ | 927 | $ | 1,133 | $ | 1,363 | (12 | )% | (50 | )% | ||||||||||||||
30+ Delinq. % | 12.47 | % | 3.19 | % | 5.05 | % | 6.62 | % | 2.78 | % | ||||||||||||||||||
NPL % | 48.91 | 40.97 | 32.03 | 22.02 | 15.36 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 22.50 | 19.26 | 16.06 | 8.18 | 7.45 | |||||||||||||||||||||||
Allowance / Loans % | 7.55 | % | 8.03 | % | 6.79 | % | 4.90 | % | 3.53 | % | ||||||||||||||||||
Allowance / Charge-offs | .31 | x | .38 | x | .38 | x | .50 | x | .46 | x | ||||||||||||||||||
Consumer Real Estate (Home Equity Installment and HELOC) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 4,913 | $ | 5,105 | $ | 5,223 | $ | 5,295 | $ | 5,478 | (4 | )% | (10 | )% | ||||||||||||||
30+ Delinq. % | 2.38 | % | 2.26 | % | 1.57 | % | 1.30 | % | 1.44 | % | ||||||||||||||||||
NPL % | .10 | .10 | .11 | .13 | .12 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 2.88 | 2.10 | 1.70 | 1.91 | 1.02 | |||||||||||||||||||||||
Allowance / Loans % | 3.76 | % | 2.68 | % | 1.74 | % | 1.84 | % | 1.43 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.28 | x | 1.26 | x | 1.01 | x | .96 | x | 1.41 | x | ||||||||||||||||||
OTC (Consumer Residential Construction Loans) | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 773 | $ | 981 | $ | 1,202 | $ | 1,522 | $ | 1,815 | (21 | )% | (57 | )% | ||||||||||||||
30+ Delinq. % | 2.82 | % | 4.43 | % | 4.92 | % | 2.69 | % | 2.67 | % | ||||||||||||||||||
NPL % | 55.19 | 43.03 | 28.94 | 17.61 | 11.01 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 21.10 | 14.80 | 12.29 | 9.90 | 4.63 | |||||||||||||||||||||||
Allowance / Loans % | 23.74 | % | 20.44 | % | 20.16 | % | 7.75 | % | 6.49 | % | ||||||||||||||||||
Allowance / Charge-offs | 0.99 | x | 1.25 | x | 1.46 | x | .78 | x | 1.33 | x | ||||||||||||||||||
Permanent Mortgage | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 407 | $ | 417 | $ | 297 | $ | 249 | n/a | (2 | )% | NM | ||||||||||||||||
30+ Delinq. % | 15.72 | % | 12.60 | % | 18.39 | % | 16.43 | % | n/a | |||||||||||||||||||
NPL % | 2.50 | 5.32 | 6.71 | 7.14 | n/a | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | .06 | — | — | — | n/a | |||||||||||||||||||||||
Allowance / Loans % | 13.14 | % | 6.13 | % | 1.84 | % | 2.38 | % | n/a | |||||||||||||||||||
Allowance / Charge-offs | 8.14 | x | NM | — | — | n/a | ||||||||||||||||||||||
Other Consumer | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 26 | $ | 29 | $ | 30 | $ | 28 | $ | 29 | (10 | )% | (11 | )% | ||||||||||||||
30+ Delinq. % | 8.56 | % | 8.14 | % | 6.65 | % | 6.39 | % | 6.90 | % | ||||||||||||||||||
NPL % | — | — | — | — | — | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 15.27 | % | 11.31 | % | 11.66 | % | 13.26 | 9.13 | ||||||||||||||||||||
Allowance / Loans % | 18.94 | % | 13.87 | % | 7.84 | % | 4.06 | % | 5.46 | % | ||||||||||||||||||
Allowance / Charge-offs | 1.16 | x | 1.22 | x | .66 | x | .31 | x | .60 | x | ||||||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent | |
Certain previously reported amounts have been reclassified to agree with current presentation. |
28
ASSET QUALITY: MORTGAGE BANKING & CAPITAL MARKETS Quarterly, Unaudited |
1Q09 Change vs. | ||||||||||||||||||||||||||||
1Q09 | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q08 | 1Q08 | ||||||||||||||||||||||
Total Mortgage Banking | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 668 | $ | 674 | $ | 746 | $ | 715 | $ | 647 | (1 | )% | 3 | % | ||||||||||||||
30+ Delinq. % | 7.09 | % | 3.63 | % | 3.35 | % | 2.88 | % | 7.73 | % | ||||||||||||||||||
Allowance / Loans % | 3.67 | % | 4.15 | % | .96 | % | .66 | % | .20 | % | ||||||||||||||||||
Total Capital Markets | ||||||||||||||||||||||||||||
Period-end loans ($ millions) | $ | 2,034 | $ | 1,918 | $ | 1,790 | $ | 1,851 | $ | 1,368 | 6 | % | 49 | % | ||||||||||||||
30+ Delinq. % | 2.13 | % | .68 | % | 1.45 | % | 2.44 | % | .82 | % | ||||||||||||||||||
NPL % | 1.99 | 1.43 | 1.52 | 2.24 | .95 | |||||||||||||||||||||||
Charge-offs % (qtr. annualized) | 1.14 | 1.91 | 3.99 | .03 | 1.23 | |||||||||||||||||||||||
Allowance / Loans % | 3.54 | % | 3.31 | % | 3.56 | % | 2.31 | % | 1.78 | % | ||||||||||||||||||
Allowance / Charge-offs | 3.24 | x | 1.94 | x | .91 | x | 93.74 | x | 1.44 | x | ||||||||||||||||||
NM — Not meaningful | ||
* | Amount is less than one percent | |
Certain previously reported amounts have been reclassified to agree with current presentation. |
29
ASSET QUALITY HIGHLIGHTS: KEY PORTFOLIOS — COMMERCIAL Unaudited |
C&I Portfolio: $7.7 Billion (37% of Total Loans)
- | Impacted by deterioration in economic conditions and impacts of housing market | ||
- | Diverse and granular portfolio | ||
- | Mostly relationship customers in TN and regional middle market lending efforts |
Homebuilder Portfolio: $1.1 Billion (6% of Total Loans)
- | Loans to residential builders and developers | ||
- | Performance under pressure from housing market (oversupply & lack of mortgage availability) | ||
- | Most severe market conditions in Florida, California, Virginia/DC , Arizona, Maryland and Colorado | ||
- | Condominium construction balances small ($158.6 million) but individual commitments tend to be larger | ||
- | Managing existing relationships (shrinking business into 2009) | ||
- | Devoting additional resources to manage problem loans | ||
- | In early 2008 ceased originations for national CRE lending: wind-down portfolio |
Top 10 States | |||||||||
% OS | % NPL | ||||||||
TN | 23.52 | % | 14.36 | % | |||||
WA | 10.34 | % | 22.40 | % | |||||
FL | 9.81 | % | 59.37 | % | |||||
CA | 6.57 | % | 47.30 | % | |||||
NC | 6.36 | % | 19.09 | % | |||||
VA | 4.62 | % | 46.50 | % | |||||
TX | 4.40 | % | 16.37 | % | |||||
CO | 3.94 | % | 52.69 | % | |||||
MD | 3.65 | % | 47.49 | % | |||||
AZ | 3.43 | % | 52.89 | % |
As of 3/31/09
Income CRE Portfolio: $1.9 Billion (9% of Total Loans)
- | Traditional commercial real estate construction and mini-permanent loans | ||
- | Three-Fourths managed by Regional Banking segment (approx) | ||
- | Less than 18% in national CRE business: wind-down portfolio (approx) | ||
- | Performance showing spillover impact from housing market |
Top 10 States | |||||||||
% OS | % NPL | ||||||||
TN | 43.19 | % | 2.35 | % | |||||
NC | 8.71 | % | 9.95 | % | |||||
FL | 7.90 | % | 31.54 | % | |||||
GA | 6.22 | % | 0.43 | % | |||||
WA | 3.83 | % | 0.20 | % | |||||
TX | 3.80 | % | 0.00 | % | |||||
MS | 3.72 | % | 0.02 | % | |||||
AZ | 2.84 | % | 10.08 | % | |||||
SC | 2.60 | % | 0.00 | % | |||||
CA | 2.15 | % | 17.03 | % |
As of 3/31/09
30
ASSET QUALITY HIGHLIGHTS: KEY PORTFOLIOS — CONSUMER Unaudited |
Consumer Real Estate (primarily Home Equity) Portfolio: $7.6 Billion (37% of Total Loans)
- Performance continues to show deterioration in Q1 primarily related to areas with significant home price depreciation. | |||
- Geographically diverse |
- Top States (TN= 33%, CA = 15%, VA = 4%, WA = 4%, MD = 4%, FL = 3%, GA = 3%) |
- Strong borrower quality |
- 735 avg. portfolio origination FICO; 730 avg. portfolio FICO (refreshed) |
- Good collateral position |
- High LTV loans managed through whole loan insurance | |||
- 28% 1st lien and 72% second lien | |||
- 86% of uninsured portfolio <90 CLTV | |||
- 14% of uninsured portfolio is HLTV, 65% of which (or 8.6%) have FICO >700 | |||
- No longer originating loans >89.9% CLTV |
- Good borrower capacity (37% avg. DTI) | |||
- Primarily retail-sourced (85% retail) | |||
- Mix of older vintage loans |
- 50% originated prior to 2006 |
Top 10 States | |||||||||||||
% OS | Del. % | C/O % | |||||||||||
TN | 33 | % | 1.24 | % | 1.06 | % | |||||||
CA | 15 | % | 2.59 | % | 3.51 | % | |||||||
VA | 4 | % | 1.98 | % | 3.10 | % | |||||||
WA | 4 | % | 1.57 | % | 2.53 | % | |||||||
MD | 4 | % | 1.91 | % | 2.56 | % | |||||||
FL | 3 | % | 4.03 | % | 5.38 | % | |||||||
GA | 3 | % | 1.81 | % | 3.77 | % | |||||||
AZ | 3 | % | 4.94 | % | 7.13 | % | |||||||
PA | 2 | % | 1.26 | % | 1.97 | % | |||||||
NJ | 2 | % | 1.92 | % | 1.43 | % |
As of 3/31/09
Retail vs. Wholesale Originations | |||||||||||||
% OS | Del. % | C/O % | |||||||||||
Retail | 85.50 | % | 1.69 | % | 2.05 | % | |||||||
Wholesale | 12.18 | % | 4.36 | % | 5.50 | % | |||||||
Other | 2.31 | % | 1.77 | % | 2.65 | % |
As of 3/31/09
Portfolio Breakdown by LTV and FICO | ||||||||||||
<=80% | 80% - 90% | >90% | ||||||||||
>=740 | 32.3 | % | 14.2 | % | 5.0 | % | ||||||
720-739 | 7.1 | % | 4.6 | % | 1.9 | % | ||||||
700-719 | 7.0 | % | 4.3 | % | 1.8 | % | ||||||
660-699 | 7.8 | % | 4.0 | % | 3.1 | % | ||||||
620-659 | 2.5 | % | 1.4 | % | 1.3 | % | ||||||
<620 | .8 | % | .3 | % | .4 | % | ||||||
* excludes whole loan insurance |
As of 3/31/09
Balance | Origination Characteristics | QTD | YTD | |||||||||||||||||||||||||||||
Vintage | % | CLTV | FICO | % Broker * | % TN | % 1st lien | NCO’s % | NCO’s % | ||||||||||||||||||||||||
pre-2002 | 6 | % | 76 | % | 717 | 17 | % | 50 | % | 37 | % | 1.96 | % | 1.96 | % | |||||||||||||||||
2003 | 9 | % | 73 | % | 731 | 14 | % | 38 | % | 47 | % | 1.33 | % | 1.33 | % | |||||||||||||||||
2004 | 14 | % | 79 | % | 729 | 22 | % | 26 | % | 29 | % | 2.08 | % | 2.08 | % | |||||||||||||||||
2005 | 21 | % | 80 | % | 732 | 20 | % | 20 | % | 17 | % | 3.13 | % | 3.13 | % | |||||||||||||||||
2006 | 18 | % | 77 | % | 735 | 6 | % | 25 | % | 18 | % | 3.51 | % | 3.51 | % | |||||||||||||||||
2007 | 20 | % | 79 | % | 741 | 15 | % | 27 | % | 19 | % | 2.50 | % | 2.50 | % | |||||||||||||||||
2008 | 10 | % | 76 | % | 750 | 10 | % | 70 | % | 52 | % | 1.73 | % | 1.73 | % | |||||||||||||||||
2009 | 2 | % | 71 | % | 759 | 2 | % | 84 | % | 70 | % | .00 | % | .00 | % | |||||||||||||||||
Total | 100 | % | 78 | % | 735 | 15 | % | 33 | % | 27 | % | 2.38 | % | 2.38 | % | |||||||||||||||||
* Correspondent and Wholesale |
One-Time Close (OTC) Portfolio: $773 Million (4% of Total Loans)
- | Construction-to-perm loans with short duration | ||
- | Performance under pressure from housing market, borrower stress | ||
and lack of product salability in the secondary market | |||
- | Actively identifying and remediating problem accounts | ||
- | Devoting additional resources to manage problem loans |
- | In early 2008 ceased originations for national OTC lending: wind-down portfolio |
Top 10 States | |||||||||
% OS | % NPL | ||||||||
CA | 30 | % | 55 | % | |||||
UT | 10 | % | 76 | % | |||||
TX | 10 | % | 40 | % | |||||
FL | 7 | % | 97 | % | |||||
WA | 7 | % | 50 | % | |||||
ID | 6 | % | 86 | % | |||||
AZ | 5 | % | 72 | % | |||||
OR | 4 | % | 34 | % | |||||
MD | 2 | % | 69 | % | |||||
NC | 2 | % | 61 | % |
As of 3/31/09
31
ASSET QUALITY: PROCESS HIGHLIGHTS |
Product | Current Process |
Commercial Loans (Real Estate / C&I)
Risk Grading
Reserves are established using historical loss factors by grade level. Relationship managers risk rate each loan using grades that reflect both the probability of default and estimated loss in the event of default. Loans with emerging weaknesses receive increased oversight through our Watch List process.
Portfolio Reviews are conducted regularly to provide oversight of risk grading decisions for larger credits.
Watch List Process
For new Watch List loans, senior credit management reviews risk grade appropriateness and action plans. After initial identification, relationship managers prepare regular updates for review and discussion by more senior business line and credit officers. This oversight is intended to bring consistent grading and allow timely identification of loans that need to be further downgraded or placed on non-accrual status.
Classified & Non-Accruals
When a loan becomes classified, the asset generally transfers to the specialists in our Loan Rehab and Recovery group where the accounts receive more detailed monitoring; at this time, new appraisals are typically ordered for real estate collateral dependent credits.
Loans are placed on non-accrual status if it becomes evident that full collection of principal and interest is at risk or if the loans become 90 days or more past due.
Impairment Assessment
Generally, classified non-accrual loans over $1 million are deemed to be impaired in accordance with SFAS 114 and are assessed for impairment measurement. For impaired assets viewed as collateral dependent, fair value estimates are obtained from a recently received and reviewed appraisal. Appraised values are adjusted down for costs associated with asset disposal and for our estimate of any further deterioration in values since the most recent appraisal. Upon the determination of impairment, we charge off the full difference between book value and our best estimate of the asset’s net realizable value.
One-Time Close (OTC) Loans
For OTC real estate construction loans, reserve levels are established based on portfolio modeling and monthly portfolio reviews conducted with business line managers and credit officers. The inherent risk in credits is examined and evaluated based on factors such as draw inactivity and borrower conditions, often recognizing problems prior to delinquency. In addition, OTC loans that reach 90 days past due are placed on non-accrual. A new appraisal is ordered for loans that reach 90 days past due or are classified as substandard during the monthly portfolio review. Loans are initially written down to current appraised value. Loans are then assessed for charge down again when they reach 180 days past due, and again when they are taken into OREO.
Home Equity Loans & Lines
For home equity loans and lines, reserve levels are established through the use of several models that look at historical losses, cumulative vintage performance, and roll rates. Loans are classified substandard at 90 days delinquent. Our collateral position is assessed prior to the asset becoming 180 days delinquent. If the value does not support foreclosure, balances are charged-off and other avenues of recovery are pursued. If the value supports foreclosure, the loan is charged down to net realizable value and is placed on non-accrual status. When collateral is taken to OREO, the asset is assessed for further write down to appraised value.
32
GLOSSARY OF TERMS |
Appraisal Fees:A fee charged to the borrower for the cost of appraising a property.
Credit Report Fee:A fee charged to the borrower for the cost of obtaining the borrower’s credit report.
FAS 91 Fee Deferral:The timing difference between collecting and recognizing origination fees on a loan not carried at elected fair value. For loans held for sale not carried at elected fair value, origination fees are recognized at the time the loan is sold, not at the time the loan is originated.
FAS 91 Reclassification:The reclassification of the cost of originating mortgage warehouse loans, not carried at elected fair value, sold during the period.
FAS 114 Loans:Commercial loans over $1 million that are not expected to pay all contractually due principal and interest and consumer loans that have experienced a troubled debt restructuring. These loans are generally written down to an estimate of collateral value less cost to sell.
Final Inspection Fee:A fee charged to the borrower to inspect a property.
Lower of Cost or Market (LOCOM):A method of accounting for certain assets by recording them at the lower of their historical cost or their current market value.
Origination Fees:A fee charged to the borrower by the lender to originate a loan. Usually stated as a percentage of the face value of the loan.
Tangible Equity/RWA:Shareholders’ equity excluding intangible assets and unrealized gains/losses on available for sale securities and cash flow hedges divided by risk weighted assets.
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 to loans excluding insured loans:Ratio is allowance for loan losses to total period end loans excluding insured 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.
33
First Horizon National Corporation First Quarter 2009 Earnings April 17, 2009 |
Portions of this presentation use non-GAAP financial information. Each of those portions is so noted, and a reconciliation of that non-GAAP information to comparable GAAP information is provided in a footnote or in the Appendix at the end of this presentation. This presentation contains forward-looking statements, which may include guidance, involving significant risks and uncertainties which will be identified by words such as "believe" "expect" "anticipate" "intend" "estimate" "should" "is likely" "will" "going forward" and other expressions that indicate future events and trends and may be followed by or reference cautionary statements. A number of factors could cause actual results to differ materially from those in the forward-looking information. These factors are outlined in our recent earnings and other press releases and in more detail in the most current 10-Q and 10-K. First Horizon disclaims any obligation to update any of the forward-looking statements that are made from time to time to reflect future events or developments. |
Financial Highlights: First Quarter 2009 Earnings per share of $(0.39) Net loss of $(83) million Includes $(15) million impact of TARP CPP preferred Loan loss reserve built by $92 million to 4.57% of total loans Solid financial performance with pretax, pre-provision income1 of $187 million, an annualized 2.49% PTPP ROA2 Net interest margin stabilizing at 2.89%, down 7 bps linked quarter NPLs up $79 million or 8% linked-quarter, the smallest rate of growth in 8 quarters Capital ratios remain strong Tier I at 15.0%3 TCE/TA at 7.1%3 1Pretax, pre-provision is a non-GAAP number and is pretax income excluding provision. Pretax loss was $(113)mm and provision was $300mm at 1Q09. 2PTPP ROA is a non-GAAP number and the reconciliation is available on page 28. 3Current quarter is estimate. |
Significant Strategic Progress in First Quarter 2009 Attractive Growth Opportunities Industry-Leading Strengths Rate of NPL and NPA growth slowed to 8% Charge-offs at expected level of $208mm in 1Q09 Increased reserves/loans to 4.57% Retired $600mm of debt in 1Q09 Core deposits up ~$500mm or 4% linked-quarter Sources of excess liquidity estimated at $7B Ability To Execute Tier 1 ratio steady at 15.0%1 in 1Q09 TCE/TA at 7.1%1 in 1Q09 (~20bps impact from $900mm of excess Fed balances) TCE + Reserves / RWA improved to 12.6%1 Core deposit growth of 3% linked-quarter Increased consumer and commercial deposits, including net checking account growth NIM nearing cyclical low Continued attention to efficiency & productivity Proactive on Asset Quality Strong Capital Position Solid Liquidity Position Strong Regional Banking Franchise Focused Capital Markets Business 2nd straight record quarter with $240mm revenues Strong fixed income distribution platform with diverse product offering More than 6,000 depositories and total return clients Positioned to benefit from current market conditions 1Current quarter is estimate Total assets stable at $31.2B (higher Fed balances offset other declines); RWA declined by $0.4B Reduced national lending portfolios by $0.5B Reduced mortgage servicing by ~$4B; additional $14B sale completed on April 1 Reducing Balance Sheet Risk |
Actively Lending in Core Banking Franchise Facilitating lending to consumers Made roughly 2,700 new and renewed lending commitments totaling $239 million in 1Q09 Originated over 2,300 mortgage loans totaling $409 million in 1Q09 Facilitating lending to small businesses & commercial clients Originated new and renewed loans of $244 million in 1Q091 Significant new and renewed lending relationships1 Supported customers through commitment of balance sheet Improving infrastructure and productivity to increase lending capacity Consumer Lending Transformation Streamlining centralized operations as well as consolidating processing and underwriting Shortened approval turnaround time on loan closings Commercial Lending Transformation Streamlining workflows and standards Increasing Relationship Manager's time with clients and prospects 1Includes new loans to existing customers |
Asset Quality |
21% Asset Quality Overview Net charge-offs totaled $208 million, annualized 3.97% of loans1 9% increase ($17mm) smallest in 7 quarters Reserves increased $92 million to $941 million, 4.57% of loans1 Reserve build similar to 4Q08 Expected reserve increase in home equity and perm mortgage Somewhat higher than expected for OTC and commercial NPL & NPA growth of 8% linked-quarter, rate of growth slowing compared to prior quarters 8% NPL increase of $79mm reflects smallest increase in 8 quarters 1Asset quality ratios as of 1Q09 2Includes Commercial & One Time Close Portfolios only NPL Flows-Moderating Additions2 NPL & NCO Growth Moderating 1Q08 2Q08 3Q08 4Q08 1Q09 Net Charge-Offs 99.138 127.672 154.693 191.246 208.278 NPLs 537.252 770.018 899.976 1053.648 1132.712 17% 17% 43% 8% 29% 24% 9% NPLs at 3/31/09 OTC & ResCRE 73 Remaining Market 27 OTC & National Res CRE 73% Other 27% |
Home Equity Portfolio 30+ Delinquency: National vs. Regional1 Net-Charge Offs2 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Regional Banking 0.52 0.004 0.0064 0.0076 0.015 0.0081 0.0123 0.0145 National Specialty 0.74 0.0034 0.0062 0.0102 0.0191 0.017 0.021 0.0288 <=2002 2003 2004 2005 2006 2007 2008 2009 O/S % 0.059 0.091 0.138 0.214 0.176 0.202 0.097 0.023 1Q09 NCOs % 0.047 0.049 0.116 0.269 0.249 0.203 0.068 0 WA Age 91 69 56 44 33 21 10 1 Vintage Mix 1Q08 2Q08 3Q08 4Q08 1Q09 Period End Balance 5385.04 5263.97 5140.65 5044.12 4856.63 Constant Pre-Payment Rate (right axis) 0.16 0.15 0.11 0.09 0.15 National Portfolio Run-Off 30 Day Del. 1/8/2008 2/8/2008 3/8/2008 4/8/2008 5/8/2008 6/8/2008 7/8/2008 8/8/2008 9/8/2008 10/8/2008 11/8/2008 12/8/2008 1/1/2009 2/1/2009 3/1/2009 Regional Banking 0.0154 0.016 0.0164 0.0145 0.0131 0.0112 0.011 0.0121 0.0123 0.0127 0.0139 0.0133 0.0125 0.0132 0.0125 National Specialty 0.0149 0.0149 0.0145 0.0137 0.0134 0.0131 0.0134 0.0147 0.016 0.0175 0.0214 0.0229 0.0233 0.0241 0.0241 Industry 0.0328 0.0349 0.0347 0.0356 0.0368 0.0382 0.0394 0.0417 0.0431 0.0442 0.0486 Industry = 13.00% 1Source: McDash industry data as of February 2009. FHN data excludes FHB. 2Net Charge-Offs are annualized 91 Weighted Average Age in Months 69 56 44 33 21 10 |
One-Time Close and Permanent Mortgage Portfolios 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 OTC Commitments 3.4 3 2.6 2 1.5 1.3 1 OTC Balances 2.2 2 1.8 1.5 1.2 0.981 0.773 57% One-Time Close Permanent Mortgage 1Q08 2Q08 3Q08 4Q08 1Q09 Perm Mortgage Balances 647 1004 1080 1127 1109 Charge-Offs 0.663175 2.8865 0.594 1.605975 9.620575 OTC balances down another $208mm in Q1; balances expected to decline throughout 2009 Completed loans either paid off, modified to the permanent mortgage portfolio, or managed as problem assets Payoffs remain significant; modifications to perm portfolio have slowed Loans modifying into perm portfolio decreasing quarterly $1.1B in balances; heterogeneous pools, varying performance Reserves and charge offs rising as LOCOM on certain loans previously transferred from held- for-sale is depleted Charge-Offs $mm |
10 Residential CRE and Income CRE Portfolios 1Q08 2Q08 3Q08 4Q08 1Q09 Regional Bank 0.526 0.528 0.473 0.435 0.396 National 1.4 1.1 0.927 0.78 0.682 NPLs as % of portfolio 0.1207 0.1665 0.2364 0.3071 0.3634 Res CRE 1Q08 2Q08 3Q08 4Q08 1Q09 Regional Bank 1.365 1.484 1.504 1.462 1.438 National 0.428 0.395 0.378 0.356 0.341 NPL as % of portfolio 0.0201 0.0354 0.0372 0.0502 0.063 Income CRE National balances down 12% in 1Q09, down 52% since announced wind-down National commitments down 12% or $125mm in 1Q09; down 61% or $1.4B since wind-down announced January 2008 Metrics continue deterioration due to market stress and wind-down nature of portfolio Reserves down $9mm in 1Q09 Reflects benefits of proactive problem loan identification as well as wind-down nature Majority of approximate $2B portfolio originated by Regional Banking (17% national segment) Diversified by product type and geography, no tenant concentration Stressed economic conditions driving deterioration in portfolio performance Reserve increase due to grade migration in 1Q09 Regional Bank National NPLs as % of portfolio |
C&I Portfolio Performance Bank Exposure1 2Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 30+ Delq. 0.52 0.005 0.0093 0.0146 0.0115 0.0053 0.0153 Net Charge-Offs (Ann.) 0.74 0.002 0.0083 0.0084 0.0164 0.0221 0.0155 NPLs 0.0064 0.012 0.0105 0.0103 0.0135 Largely TN portfolio, diversified by industry Balances of $7.7B at 1Q09 NCOs at $30mm in 1Q09 Less than 4Q08's $41mm as expected Expect modest increase in quarterly rate throughout remainder of 2009 Ongoing, proactive reviews of portfolio continue in order to appropriately manage the portfolio in a stressed environment TRUPs and other bank related balances of ~$800mm at 1Q09 39 bank TRUPs with $8mm average size Solid banks overall: avg. Tier 1 ratio2 = 10.7%, avg. Leverage ratio2 = 8.8% 54% are TARP CPP participants2 Two elected interest deferral to date ($17.5mm total) Other BHC/BHC stock secured Graded individually quarterly with reserves adjusted as profile requires C&I Insurance TRUPs Bank TRUPs Other Bank Related Balances 7676 164.3 305.4 300.6 Total C&I $7.7B Insurance TRUPS $0.2B Bank TRUPS $0.3B Other Bank related balances $0.3B 1Outstanding balances as 3/31/09 2Measures are weighted averages by funded balances |
Trends generally consistent with previously communicated expectations Actual 1Q09 vs. 1H09 expectation Charge-offs as expected Reserve growth due largely to revised OTC inherent loss estimate, updated commercial loss factors Credit Expectations and Risks Summary 2Other includes permanent mortgage, other consumer, and credit card |
Financial Results |
14 Consolidated Financial Results Solid pretax, pre-provision income1 of $187mm 2.49% annualized PTPP ROA Revenues up 11% linked-quarter NII down 4% or $8mm linked-quarter Asset contraction from national lending wind-down NIM compression from falling short term rates Fees up 21% or $71mm linked-quarter Record fixed income sales Mortgage originations, MSR hedge results Expenses up 21% or $72mm linked-quarter Capital Markets production Environmental: foreclosure, FDIC, deferred comp Life insurance reserve adjustment Seasonality Provision of $300mm exceeded $208mm in net charge-offs ($92mm reserve build) Reserve increased to 4.57%2 of total loans Period-end shares increased to 212mm2 Prior quarters restated to reflect stock dividend Adoption of SFAS 160 Net loss attributable to non-controlling interests: preferred dividends previously reported in NIOE Numbers may not add to total due to rounding 1Pretax, pre-provision is a non-GAAP number and is pretax income excluding provision. 2 At 3/31/09 |
1Q08 2Q08 3Q08 4Q08 1Q09 Core Deposits 13.965 13.141 12.308 12.86 13.326 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Consolidated NIM 0.0284 0.0279 0.0287 0.0277 0.0281 0.0301 0.0301 0.0296 0.0289 Reducing Balance Sheet Risk, Growing Deposits Consolidated Net Interest Margin 1Q09 compression from impact of falling short term rates on deposits Excess Fed balances: ~(6bps) in 1Q09 Successful step-down of 4Q08 promotional deposit rates Widening spreads on new loans NIM expected to expand over remainder of 2009 Numbers may not add to total due to rounding 1Includes divestiture balances. Mortgage I/O assets included in Trading Securities. Mortgage hedge assets and included in Other. 2Includes excess Fed balances of ~$900mm at 3/31/09. Core Deposits P/E 4% Assets +$1.0 Billion |
Strong Fee Income Driven by Core Business 1Excludes national specialty segment and corporate fee income 1Q08 2Q08 3Q08 4Q08 1Q09 Regional Banking 87204 92684 88033 82720 76289 Capital Markets 133905 124632 98514 177285 216690 Mortgage/Other 162021 182701 118837 76667 114892 Fee Income by Businesses Line1 13% Fees up 21% or $72mm linked-quarter Fees from core businesses up 13% linked- quarter and 33% from last year Capital Markets achieved record fixed income sales Strong distribution capabilities Market conditions (volatility, liquidity) Diverse product offering Seasonal, economic factors adversely impacting banking fees Mortgage fees benefiting from continued favorable hedging conditions Also, increased origination activity in TN |
Continued Focus on Efficiency and Productivity 1Q08 2Q08 3Q08 4Q08 1Q09 Regional Banking 151 149 158 168 174 Capital Markets 116 100 87 115 152 Mortgage/Other 167 214 154 62 92 Headcount 1Excludes national specialty segment and corporate fee income 1Q09 expenses up $72mm linked-quarter Production-based variable compensation Includes credit costs, FDIC insurance adjustment, seasonality, Visa litigation reversal in 4Q08 Base salaries down $5mm linked-quarter Continued emphasis on driving down efficiency ratio through productivity, fixed cost reduction Expenses 1Q08 2Q08 3Q08 4Q08 1Q09 Core Businesses 6030 6023 5768 5842 5830 Wind-Down Business 3680 3363 428 253 203 9711 9711 9386 6195 6095 6033 Total headcount down 1% linked-quarter Core businesses areas headcount down 3% YoY and slightly linked-quarter Includes Regional Banking, Capital Markets, Corporate and service providers |
Segment Results: Regional Banking Strong linked-quarter core deposit growth of 3% Target client wallet share focus Promotion balance retention Net checking growth NIM decreased 33 bps in 1Q09 Full effect of 4Q08 Fed rate moves Transfer pricing impact, offset in Corporate Improving new loan spreads Expenses up linked-quarter, though headcount declined Environmental costs: credit, FDIC Life insurance Seasonality Pretax, pre-provision income1 of $9mm Continued elevated provision drove pretax loss of $89mm Numbers may not add to total due to rounding 1Pretax, pre-provision is a non-GAAP number and is pretax income excluding provision. |
Segment Results: Capital Markets Pretax income of $74 million Record fixed income revenues, up $40 million linked quarter Strong distribution capabilities Market conditions (volatility, liquidity) Diverse product offering Expense increase due to increase in production Modest provision increase of $6mm from 4Q08 Continued management of balance sheet usage from trading inventory Trading desk procures inventory principally for sale to customers Benefit of strong distribution network Numbers may not add to total due to rounding 1Pretax, pre-provision is a non-GAAP number and is pretax income excluding provision |
Liquidity and Capital Remain Strong 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 4Q08 Peer Median Tangible Common Equity 0.0623 0.0629 0.085 0.0885 0.0897 0.0884 0.0628 Reserves 0.0113 0.0163 0.0199 0.0288 0.0337 0.038 0.0149 TCE+Res / RWA 0.0736 0.0791 0.105 0.1173 0.1234 0.1264 0.0777 Numbers may not add to total due to rounding 11Q09 ratios estimated at 3/31/09. Peer median includes Top 50 banks at 4Q08. 2Excluding Securities Sold Repos, Trading Liabilities and sub-debt and other collateralized borrowings of $4.0B 1 TCE + Reserves / RWA 7.9% 12.3% 12.6% 7.8% Liquidity Wholesale Funding2-PE Balances Capital Ratios 1Q09 TCE/TA: ~(20)bps impact from ~$900mm excess Fed balances 1 Continued strong core deposit growth Asset reductions, deposit growth offsetting debt maturities Retired ~$600mm of debt in 1Q09 Sources of excess liquidity at ~$7B ~2X net funding needs of our business Wholesale funding in non-credit sensitive sources 1 |
Summary & Outlook Solid earnings power from core franchises, opportunity for improvement NIM stabilizing and expected to improve Strong core deposit growth in Regional Banking Capital Markets distribution model benefiting from environment Meaningful efficiency and productivity opportunities Flattening NPLs, charge-offs growth reflect proactive approach on asset quality Further de-risking of balance sheet through national wind-down Significant loan loss reserves Capital and liquidity remain strong |
Appendix |
Credit Quality Majority of credit deterioration observed in National Specialty Lending portfolios Remainder of portfolio showing some deterioration related to general economic conditions Substantially all of our impaired assets greater than $1mm are considered collateral- dependent and written-down to net realizable values Numbers may not add to total due to rounding |
1st Lien 2nd Lien Lien Position 0.0133 0.0228 Retail Non-Retail Channel Mix 0.0205 0.0504 Portfolio Characteristics Home Equity - Differentiated Portfolio Characteristics 30+ Delinquency: Key Drivers 86% 14% % of portfolio 28% 72% % of portfolio FICO Score Channel Lien Position Geographic Distribution >=740 720-739 700-719 660-699 <660 FICO Score (Refreshed) 0.0081 0.0199 0.0254 0.0339 0.0554 % of portfolio 50% 14% 13% 15% 9% First Second Total Balance $2.1B $5.5B $7.6B Original FICO 734 736 735 Original CLTV 70% 80% 78% Full Doc 77% 69% 71% Owner Occupied 85% 96% 93% HELOCs $0.7B $3.7B $4.5B Weighted Avg. HELOC Utilization 50% 58% 56% TN 0.33 CA 0.15 VA 0.04 WA 0.04 MD 0.04 FL 0.03 GA 0.03 AZ 0.03 PA 0.02 NJ 0.02 Other 0.37 |
Income CRE Portfolio Traditional commercial real estate construction and mini-permanent loans Balances of $2B at 1Q09 Three-fourths managed in regional banking Housing market and broader economic conditions impacting performance of portfolio TN 0.432 NC 0.087 FL 0.079 GA 0.062 TX 0.038 MS 0.037 WA 0.038 Other 0.226 Retail Multi-Family Office Land Other Industrial Hospitality Income CRE by balances 0.219 0.182 0.142 0.157 0.133 0.099 0.068 Construction Land Mini-Perm/Non-Construction Property Type 0.23 0.16 0.62 Portfolio Characteristics Performance Geography1 Collateral Type1 Loan Type1 2Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 30+ Delq. 0.52 0.0196 0.0057 0.0143 0.0347 0.0242 0.0423 Net Charge-Offs (ann.) 0.74 0.0013 0.0194 0.0063 0.0024 0.0273 0.0336 1As of 3/31/09 Construction 23% Land 16%% Mini-Perm/ Construction 61% |
Appraised Value Pre-Charge Down Balance Cumulative Charge Down Book Balance (3/31/09) East 837.2 740.5 504.8 504.8 235.7 Problem Loans Written Down to Realizable Values, Reserves Largely for Performing Credits FAS 114 Charge-Downs1 Commercial Loan Reserves 837 741 505 32% write-down (237) 60% of appraised value Generally, classified non-accrual loans over $1mm are assessed for impairment in accordance with FAS-114 Commercial loans typically charged-down to net realizable value rather than holding reserves OTC loans: loans 90 DPD or classified substandard initially written-down to current (new) appraised value then written down again at 180 DPD and when taken into ORE to a percentage of appraisal 1 Approximation based on appraisals |
Rate of NPA growth continues to slow Inflows into NPL slowed in 1Q09 while outflows remained steady Resolutions continuing in-line with carrying values 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 NPLs 208.3 307.1 537.3 770 900 1054.4 1132.7 ORE 60 85.3 83.7 106.1 115.5 103.6 119 Problem Loans - Inflows Declining, Resolutions Steady ORE Flows NPL Flows1 Non-Performing Assets 1Includes Commercial & One Time Close Portfolios only 43% 16% 14% 8% |
Reconciliation to GAAP Financials Slide 3 uses non-GAAP information of pretax, pre-provision earnings ROA. That information is not presented according to generally accepted accounting principles (GAAP), and is reconciled to GAAP information below. |