First Horizon (FHN) 8-K Regulation FD Disclosure

THIRD QUARTER 2006

FINANCIAL SUPPLEMENT

The following supplement is provided to assist in your financial analysis.

If you need further information, please contact:

Dave Miller, Investor Relations

901-523-4162

dwmiller@firsthorizon.com

         

First Horizon National Corporation

3Q 2006 Financial Supplement

Dear Investor,

In conjunction with the release of First Horizon National Corporation’s third quarter results for 2006, we have prepared this financial supplement to assist investors in understanding First Horizon National Corporation’s financial results.

This supplement compares current period results to earnings and other financial information from the previous four quarters.

Please feel free to call if you have any additional questions.

Regards,

Dave Miller, Investor Relations

901-523-4162

dwmiller@firsthorizon.com

CONSOLIDATED SUMMARY
Quarterly, Unaudited
(Thousands)		3Q06			2Q06			1Q06			4Q05			3Q05
Net interest income	$	251,621		$	253,598		$	245,721		$	254,812		$	260,160
Noninterest income		312,628			329,094			286,025			314,150			347,005
Divestitures		-			-			-			7,029			-
Security gain/(loss)		8,757			2,893			(80,281	)		(181	)		(406	)
Total revenue		573,006			585,585			451,465			575,810			606,759
Noninterest expense		456,357			419,986			443,215			413,292			426,175
Provision		23,694			18,653			17,799			16,175			22,608
Pretax income/(loss)		92,955			146,946			(9,549	)		146,343			157,976
Provision/(benefit) for income taxes		25,776			43,013			(12,959	)		42,695			49,862
Income from continuing operations		67,179			103,933			3,410			103,648			108,114
(Loss)/income from discontinued operations, net of tax		(69	)		376			210,273			5,369			4,830
Income before cumulative effect		67,110			104,309			213,683			109,017			112,944
Cumulative effect of changes in accounting
principle, net of tax		-			-			1,345			(3,098	)		-
Net income	$	67,110		$	104,309		$	215,028		$	105,919		$	112,944
Tax rate		28	%		29	%		NM			29	%		32	%
Efficiency ratio		80	%		72	%		98	%		72	%		70	%

NM - Not meaningful

1

SELECTED FINANCIAL DATA
Quarterly, Unaudited
(Dollars in thousands, except per share data)	3Q06			2Q06			1Q06			4Q05			3Q05
Income from continuing operations	$	67,179		$	103,933		$	3,410		$	103,648		$	108,114
(Loss)/income from discontinued operations, net of tax		(69	)		376			210,273			5,369			4,830
Cumulative effect of changes in accounting
principle, net of tax		-			-			1,345			(3,098	)		-
Net income		67,110			104,309			215,028			105,919			112,944
Common Stock Data
Diluted earnings per common share:
Diluted EPS from continuing operations	$	.53		$	.82		$	.03		$	.80		$	.83
Diluted EPS before cumulative effect of
changes in accounting principle		.53			.82			1.66			.84			.87
Diluted EPS		.53			.82			1.67			.81			.87
Diluted shares		127,523			127,280			129,100			130,043			129,924
Period-end shares outstanding		124,467			123,947			123,230			126,222			126,003
Dividends declared per share	$	.45		$	.45		$	.45		$	.45		$	.43
Selected Average Balances
Total assets	$	39,519,765		$	38,494,898		$	37,689,523		$	37,720,410		$	38,090,993
Total loans, net of unearned income		21,799,396			21,429,616			20,838,397			19,952,086			18,722,002
Investment securities		3,805,160			3,008,310			3,026,429			2,858,410			2,934,030
Earning assets		34,627,512			33,946,387			33,142,044			33,191,778			33,562,038
Deposits		22,926,483			21,981,445			22,939,767			23,918,717			23,981,764
Total long-term debt		5,538,323			5,160,610			3,805,307			2,665,867			2,374,568
Shareholders' equity		2,442,030			2,401,428			2,335,512			2,284,400			2,220,232
Selected Period-End Balances
Total assets	$	40,076,183		$	37,469,234		$	37,300,975		$	36,579,061		$	37,042,307
Total loans, net of unearned income		21,954,405			21,699,729			21,186,991			20,600,922			19,211,703
Investment securities		3,983,049			3,108,569			2,944,826			2,912,486			2,842,016
Earning assets		33,259,328			31,879,716			31,617,338			31,578,065			31,204,048
Deposits		25,284,541			21,693,442			21,517,047			23,317,557			25,269,302
Total long-term debt		5,487,188			5,606,294			4,599,339			3,437,643			2,000,113
Shareholders' equity		2,510,524			2,442,193			2,399,608			2,347,539			2,292,337
Selected Ratios and Other
Return on average assets		.67	%		1.09	%		2.31	%		1.11	%		1.18	%
Return on average equity		10.9			17.4			37.3			18.4			20.2
FTE employees		12,324			12,413			13,053			13,175			13,164

 

2

STATEMENTS OF INCOME
Quarterly, Unaudited
(Thousands)		3Q06			2Q06		1Q06			4Q05			3Q05
Interest income	$	612,598		$	578,582	$	533,369		$	519,475		$	497,438
Less interest expense		360,977			324,984		287,648			264,663			237,278
Net interest income		251,621			253,598		245,721			254,812			260,160
Provision for loan losses		23,694			18,653		17,799			16,175			22,608
Net interest income after
provision for loan losses		227,927			234,945		227,922			238,637			237,552
Noninterest income:
Mortgage banking		89,393			113,448		88,815			114,713			140,482
Capital markets		95,215			102,165		92,858			80,896			82,158
Deposit transactions
and cash management		44,503			42,756		38,023			42,196			41,268
Insurance commissions		10,534			12,461		14,686			13,144			12,673
Revenue from loan sales and securitizations		11,830			12,212		11,357			13,146			10,878
Trust services and investment
management		9,609			10,824		10,657			10,873			11,299
Gains on divestitures		-			-		-			7,029			-
Securities gains/(losses), net		8,757			2,893		(80,281	)		(181	)		(406	)
Other		51,544			35,228		29,629			39,182			48,247
Total noninterest income		321,385			331,987		205,744			320,998			346,599
Adjusted gross income after
provision for loan losses		549,312			566,932		433,666			559,635			584,151
Noninterest expense:
Employee compensation,
incentives and benefits		260,351			245,796		260,141			244,943			259,583
Occupancy		29,745			27,525		30,102			28,000			26,082
Operations services		17,976			17,075		17,440			18,363			18,739
Equipment rentals, depreciation,
and maintenance		17,893			17,858		20,264			19,108			19,033
Communications and courier		12,950			13,409		14,912			14,379			14,352
Amortization of intangible assets		3,233			2,881		2,888			2,667			2,893
Other		114,209			95,442		97,468			85,832			85,493
Total noninterest expense		456,357			419,986		443,215			413,292			426,175
Pretax income/(loss)		92,955			146,946		(9,549	)		146,343			157,976
Provision/(benefit) for income taxes		25,776			43,013		(12,959	)		42,695			49,862
Income from continuing operations		67,179			103,933		3,410			103,648			108,114
(Loss)/income from discontinued operations,
net of tax		(69	)		376		210,273			5,369			4,830
Income before cumulative effect		67,110			104,309		213,683			109,017			112,944
Cumulative effect of changes in accounting
principle, net of tax		-			-		1,345			(3,098	)		-
Net income	$	67,110		$	104,309	$	215,028		$	105,919		$	112,944

3

OTHER INCOME AND OTHER EXPENSE
Quarterly, Unaudited
(Thousands)	3Q06		2Q06			1Q06		4Q05			3Q05
All other income:
Bankcard income	$	6,441	$	6,362		$	6,916	$	7,391		$	6,998
Other service charges		5,074		5,806			5,766		5,531			5,968
Remittance processing		3,525		3,642			3,994		3,926			3,908
Check clearing fees		1,593		1,679			1,727		1,801			1,885
Other		34,911		17,739			11,226		20,533			29,488
Total	$	51,544	$	35,228		$	29,629	$	39,182		$	48,247
All other expense:
Advertising and public relations	$	13,272	$	10,998		$	11,995	$	11,066		$	11,246
Legal and professional fees		11,071		11,600			8,295		11,879			11,910
Travel and entertainment		8,164		8,652			6,972		7,834			7,446
Computer software		8,959		8,827			7,987		7,374			7,327
Contract employment		6,955		7,094			7,535		7,922			7,963
Supplies		3,961		4,260			3,674		4,468			4,652
Fed services fees		1,613		1,736			1,749		1,852			1,885
Foreclosed real estate		3,371		(437	)		8,341		1,835			3,547
Deposit insurance premium		737		801			895		782			795
Charitable contributions		454		530			490		418			938
Distributions on preferred stock		4,874		4,453			4,050		3,806			3,374
Other		50,778		36,928			35,485		26,596			24,410
Total	$	114,209	$	95,442		$	97,468	$	85,832		$	85,493

4

AVERAGE AND PERIOD-END LOANS
Quarterly, Unaudited
(Thousands)	3Q06		2Q06		1Q06			4Q05		3Q05
Average loans:
Loans, net of unearned income:
Commercial:
Commercial, financial and industrial	$	6,803,461	$	6,570,293	$	6,415,436		$	6,356,977	$	6,176,194
Real estate commercial		1,221,408		1,259,416		1,225,049			1,208,945		1,163,199
Real estate construction		2,575,590		2,380,430		2,197,693			1,973,121		1,735,883
Total commercial loans		10,600,459		10,210,139		9,838,178			9,539,043		9,075,276
Retail:
Real estate residential		8,503,198		8,544,548		8,629,370			8,123,581		7,593,720
Real estate construction		2,065,849		2,028,480		1,961,658			1,874,831		1,643,874
Other retail		160,446		162,573		164,567			170,470		167,475
Credit card receivables		201,319		197,706		238,089			244,161		241,657
Real estate loans pledged against
other collateralized borrowings (a)		268,125		286,170		6,535			-		-
Total retail loans		11,198,937		11,219,477		11,000,219			10,413,043		9,646,726
Total loans, net of unearned income	$	21,799,396	$	21,429,616	$	20,838,397		$	19,952,086	$	18,722,002
Period-end loans:
Loans, net of unearned income:
Commercial:
Commercial, financial and industrial	$	6,945,207	$	6,705,925	$	6,538,798		$	6,578,117	$	6,354,408
Real estate commercial		1,199,084		1,276,278		1,232,021			1,213,052		1,171,606
Real estate construction		2,660,415		2,453,579		2,277,825			2,108,121		1,849,075
Total commercial loans		10,804,706		10,435,782		10,048,644			9,899,290		9,375,089
Retail:
Real estate residential		8,428,027		8,545,198		8,486,345			8,357,143		7,603,249
Real estate construction		2,096,440		2,076,004		2,001,916			1,925,060		1,814,632
Other retail		163,134		163,121		161,617			168,413		170,684
Credit card receivables		202,866		202,117		194,908			251,016		248,049
Real estate loans pledged against
other collateralized borrowings (a)		259,232		277,507		293,561			-		-
Total retail loans		11,149,699		11,263,947		11,138,347			10,701,632		9,836,614
Total loans, net of unearned income	$	21,954,405	$	21,699,729	$	21,186,991		$	20,600,922	$	19,211,703

  (a) During first quarter 2006, FHN sold loans through an on-balance sheet securitization, which is structured as a financing for accounting purposes.

5

PERIOD-END STATEMENTS OF CONDITION
Quarterly, Unaudited
(Thousands)	3Q06		2Q06			1Q06			4Q05			3Q05
Assets:
Cash and due from banks	$	903,482	$	854,846		$	887,539		$	945,547		$	1,036,816
Federal funds sold and securities
purchased under agreements to resell		1,992,426		1,572,143			1,347,577			1,485,199			1,972,318
Total cash and cash equivalents		2,895,908		2,426,989			2,235,116			2,430,746			3,009,134
Investment in bank time deposits		17,798		75,903			25,319			10,687			6,373
Trading securities		2,512,744		2,183,102			2,508,615			2,133,428			2,013,535
Loans held for sale		2,798,906		3,240,270			3,604,010			4,435,343			5,158,103
Investment Securities		3,983,049		3,108,569			2,944,826			2,912,486			2,842,016
Loans, net of unearned income		21,954,405		21,699,729			21,186,991			20,600,922			19,211,703
Less: Allowance for loan losses		206,829		199,835			195,011			189,705			185,029
Total net loans		21,747,576		21,499,894			20,991,980			20,411,217			19,026,674
Capital markets receivables		1,027,927		1,058,690			858,072			511,508			1,453,451
Mortgage servicing rights, net		1,498,341		1,595,413			1,475,448			1,314,629			1,210,284
Goodwill		274,534		281,909			281,475			281,440			282,192
Other intangible assets, net		70,546		75,056			76,666			76,647			76,893
Premises and equipment, net		441,659		431,385			422,346			408,539			404,867
Real estate acquired by foreclosure		65,224		60,577			48,959			27,410			27,856
Discontinued assets		939,728		696			56,712			163,545			129,358
Other assets		1,802,243		1,430,781			1,771,431			1,461,436			1,401,571
Total assets	$	40,076,183	$	37,469,234		$	37,300,975		$	36,579,061		$	37,042,307
Liabilities and shareholders' equity:
Deposits:
Certificates of deposit under $100,000 and other time	$	2,906,424	$	2,819,597		$	2,692,046		$	2,478,946		$	2,338,365
Certificates of deposit $100,000 and more		11,920,226		8,053,119			8,228,543			10,931,695			12,497,183
Other interest-bearing deposits		4,998,956		5,141,528			5,122,441			4,705,072			4,620,547
Total interest-bearing core deposits		19,825,606		16,014,244			16,043,030			18,115,713			19,456,095
Noninterest-bearing deposits		5,458,935		5,679,198			5,474,017			5,201,844			5,813,207
Total deposits		25,284,541		21,693,442			21,517,047			23,317,557			25,269,302
Federal funds purchased and securities
sold under agreements to repurchase		2,416,974		3,387,711			4,337,243			3,735,742			2,357,973
Trading liabilities		847,453		929,694			766,479			793,638			906,626
Commercial paper and other short-term borrowings		926,292		721,227			749,979			802,017			1,217,904
Term borrowings		5,226,772		5,325,014			4,299,539			3,437,643			2,000,113
Other collateralized borrowings		260,416		281,280			299,800			-			-
Total long-term debt		5,487,188		5,606,294			4,599,339			3,437,643			2,000,113
Capital markets payables		989,332		1,057,617			941,911			591,404			1,507,563
Discontinued liabilities		6,977		8,422			233,402			122,026			90,125
Other liabilities		1,311,628		1,327,360			1,460,693			1,136,221			1,105,090
Total liabilities		37,270,385		34,731,767			34,606,093			33,936,248			34,454,696
Preferred stock of subsidiary		295,274		295,274			295,274			295,274			295,274
Shareholders' equity:
Common stock		77,792		77,467			77,019			78,889			78,752
Capital surplus		301,857		282,563			269,564			404,964			390,430
Undivided profits		2,124,312		2,113,514			2,065,285			1,905,930			1,856,776
Accumulated other comprehensive loss, net		6,563		(31,351	)		(12,260	)		(42,244	)		(33,621	)
Total shareholders' equity		2,510,524		2,442,193			2,399,608			2,347,539			2,292,337
Total liabilities and shareholders' equity	$	40,076,183	$	37,469,234		$	37,300,975		$	36,579,061		$	37,042,307

6

CONSOLIDATED AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
Quarterly, Unaudited
										Interest									Percent
	Average									Revenue/									Average
	Balance									Expense									Rate/Yield
(Fully taxable equivalent)
(Dollars in thousands)	3Q06			2Q06			1Q06			3Q06			2Q06			1Q06			3Q06			2Q06			1Q06
Assets:
Earning assets:
Loans, net of unearned income*	$	21,799,396		$	21,429,616		$	20,838,397		$	417,085		$	393,546		$	363,577			7.59	%		7.37	%		7.07	%
Loans held for sale		4,201,949			4,623,847			4,776,373			72,029			75,832			76,342			6.86			6.56			6.39
Investment securities:
U.S. Treasuries		50,989			53,561			72,265			632			624			781			4.92			4.67			4.38
U.S. government agencies		3,512,162			2,731,213			2,736,495			50,262			38,211			32,676			5.72			5.60			4.78
States and municipalities		1,869			1,893			1,916			6			7			7			1.28			1.39			1.37
Other		240,140			221,643			215,753			3,017			2,726			2,548			5.02			4.92			4.72
Total investment securities		3,805,160			3,008,310			3,026,429			53,917			41,568			36,012			5.67			5.53			4.76
Capital markets securities inventory		2,524,102			2,356,754			2,176,124			34,128			31,849			27,327			5.41			5.41			5.02
Mortgage banking trading securities		380,586			462,592			442,453			10,762			11,798			11,246			11.31			10.20			10.17
Other earning assets:
Federal funds sold and securities
purchased under agreements to resell		1,875,420			2,018,408			1,866,146			24,412			23,712			18,995			5.16			4.71			4.13
Investment in bank time deposits		40,899			46,860			16,122			544			580			179			5.27			4.96			4.51
Total other earning assets		1,916,319			2,065,268			1,882,268			24,956			24,292			19,174			5.17			4.72			4.13
Total earning assets/Interest income		34,627,512			33,946,387			33,142,044		$	612,877		$	578,885		$	533,678			7.04	%		6.83	%		6.50	%
Allowance for loan losses		(206,871	)		(202,003	)		(196,316	)
Cash and due from banks		816,342			794,019			831,172
Capital markets receivables		151,037			187,435			199,635
Premises and equipment, net		436,027			427,213			418,882
Other assets		3,695,718			3,341,847			3,294,106
Total assets	$	39,519,765		$	38,494,898		$	37,689,523
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Savings	$	264,932		$	279,269		$	282,558		$	157		$	149		$	105			.23	%		.21	%		.15	%
Checking interest and money market		4,827,837			4,867,053			4,512,081			31,488			28,039			20,792			2.59			2.31			1.87
Certificates of deposit under
$100,000 and other time		2,873,451			2,779,821			2,602,581			32,090			29,116			25,338			4.43			4.20			3.95
Total interest-bearing core deposits		7,966,220			7,926,143			7,397,220			63,735			57,304			46,235			3.17			2.90			2.53
Certificates of deposit $100,000 and more		9,694,677			8,859,178			10,626,088			130,875			110,068			119,296			5.36			4.98			4.55
Federal funds purchased and securities
sold under agreements to repurchase		4,650,930			4,975,223			4,745,621			56,639			58,084			47,821			4.83			4.68			4.09
Capital markets trading liabilities		1,358,976			1,368,933			1,304,492			19,233			19,923			18,347			5.61			5.84			5.70
Commercial paper and other short-term
borrowings		773,038			750,789			765,178			10,232			9,296			8,423			5.25			4.97			4.46
Total long-term debt		5,538,323			5,160,610			3,805,307			80,263			70,309			47,526			5.80			5.46			5.00
Total interest-bearing liabilities/Interest
expense		29,982,164			29,040,876			28,643,906		$	360,977		$	324,984		$	287,648			4.79	%		4.49	%		4.06	%
Demand deposits		1,762,753			1,817,045			1,712,247
Other noninterest-bearing deposits		3,502,833			3,379,079			3,204,212
Capital markets payables		213,104			236,481			229,867
Other liabilities		1,321,607			1,324,715			1,268,505
Preferred stock of subsidiary		295,274			295,274			295,274
Shareholders' equity		2,442,030			2,401,428			2,335,512
Total liabilities and shareholders' equity	$	39,519,765		$	38,494,898		$	37,689,523
Net interest income-tax equivalent basis										$	251,900		$	253,901		$	246,030
Fully taxable equivalent adjustment											(279	)		(303	)		(309	)
Net interest income										$	251,621		$	253,598		$	245,721
Net interest spread																				2.25	%		2.34	%		2.44	%
Effect of interest-free sources used to fund
earning assets																				.65			.66			.55
Net interest margin																				2.90	%		3.00	%		2.99	%
* Includes loans on nonaccrual status.
Yields and corresponding income amounts 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.

7

CONSOLIDATED AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
Quarterly, Unaudited
	Average Balance												Interest Revenue/Expense												% Average Rate/Yield
(Fully taxable equivalent)
(Dollars in thousands)	4Q05			3Q05			2Q05			1Q05			4Q05			3Q05			2Q05			1Q05			4Q05			3Q05			2Q05			1Q05
Assets:
Earning assets:
Loans, net of unearned income*	$	19,952,086		$	18,722,002		$	17,782,262		$	16,680,642		$	338,113		$	299,199		$	264,919		$	231,645			6.72	%		6.34	%		5.98	%		5.63	%
Loans held for sale		5,758,831			6,936,767			6,055,933			5,315,114			93,327			111,573			93,897			79,085			6.48			6.43			6.20			5.95
Investment securities:
U.S. Treasuries		42,419			40,315			40,208			43,843			394			232			230			216			3.68			2.29			2.30			2.00
U.S. government agencies		2,608,478			2,690,823			2,691,954			2,548,693			29,079			29,109			29,348			27,559			4.46			4.33			4.36			4.33
States and municipalities		2,787			3,544			5,459			6,913			23			37			73			101			3.25			4.30			5.35			5.85
Other		204,726			199,348			193,698			195,356			2,463			2,177			2,083			1,988			4.81			4.37			4.30			4.07
Total investment securities		2,858,410			2,934,030			2,931,319			2,794,805			31,959			31,555			31,734			29,864			4.47			4.30			4.33			4.27
Capital markets securities inventory		2,160,676			2,158,334			2,069,131			2,235,004			27,126			27,029			22,714			24,528			5.02			5.01			4.39			4.39
Mortgage banking trading securities		360,891			271,915			292,301			288,387			10,148			8,716			9,226			9,144			11.25			12.82			12.63			12.68
Other earning assets:
Federal funds sold and securities
purchased under agreements to resell		2,086,401			2,532,662			2,482,568			2,047,342			18,939			19,604			16,135			10,851			3.60			3.07			2.61			2.15
Investment in bank time deposits		14,483			6,328			5,702			5,874			154			47			50			30			4.22			2.92			3.57			2.09
Total other earning assets		2,100,884			2,538,990			2,488,270			2,053,216			19,093			19,651			16,185			10,881			3.61			3.07			2.61			2.15
Total earning assets/Interest income		33,191,778			33,562,038			31,619,216			29,367,168		$	519,766		$	497,723		$	438,675		$	385,147			6.23	%		5.90	%		5.56	%		5.29	%
Allowance for loan losses		(190,805	)		(176,167	)		(169,427	)		(164,598	)
Cash and due from banks		781,178			769,813			727,429			729,802
Capital markets receivables		288,292			393,513			742,190			880,462
Premises and equipment, net		410,361			400,533			387,475			378,041
Other assets		3,239,606			3,141,263			2,975,319			2,900,566
Total assets	$	37,720,410		$	38,090,993		$	36,282,202		$	34,091,441
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Savings	$	285,313		$	289,703		$	294,366		$	294,114		$	106		$	108		$	117		$	77			.15	%		.15	%		.16	%		.11	%
Checking interest and money market		4,409,563			4,287,166			4,319,510			4,273,739			18,460			16,153			13,656			11,206			1.66			1.49			1.27			1.06
Certificates of deposit under
$100,000 and other time		2,402,900			2,278,094			2,184,264			2,102,399			22,642			20,466			18,733			17,172			3.74			3.56			3.44			3.31
Total interest-bearing core deposits		7,097,776			6,854,963			6,798,140			6,670,252			41,208			36,727			32,506			28,455			2.30			2.13			1.92			1.73
Certificates of deposit $100,000 and more		11,393,018			11,467,752			10,557,321			10,147,069			116,707			102,061			80,433			64,782			4.06			3.53			3.06			2.59
Federal funds purchased and securities
sold under agreements to repurchase		4,760,566			4,913,288			4,651,584			3,991,180			43,751			39,395			31,387			22,040			3.65			3.18			2.71			2.24
Capital markets trading liabilities		1,351,785			1,665,342			1,589,408			1,470,515			19,556			23,237			20,591			16,807			5.74			5.54			5.20			4.64
Commercial paper and other short-term
borrowings		1,052,369			1,230,394			998,762			691,000			11,668			11,224			7,911			4,560			4.40			3.62			3.18			2.68
Total long-term debt		2,665,867			2,374,568			2,585,246			2,616,152			31,773			24,634			23,949			20,785			4.77			4.16			3.71			3.18
Total interest-bearing liabilities/Interest
expense		28,321,381			28,506,307			27,180,461			25,586,168		$	264,663		$	237,278		$	196,777		$	157,429			3.71	%		3.31	%		2.90	%		2.49	%
Demand deposits		2,018,721			1,941,952			1,835,618			1,784,963
Other noninterest-bearing deposits		3,409,202			3,717,097			3,331,828			3,001,739
Capital markets payables		275,721			350,531			423,810			569,760
Other liabilities		1,115,711			1,059,562			1,082,525			1,050,840
Preferred stock of subsidiary		295,274			295,312			295,432			29,998
Shareholders' equity		2,284,400			2,220,232			2,132,528			2,067,973
Total liabilities and shareholders' equity	$	37,720,410		$	38,090,993		$	36,282,202		$	34,091,441
Net interest income-tax equivalent basis													$	255,103		$	260,445		$	241,898		$	227,718
Fully taxable equivalent adjustment														(291	)		(285	)		(290	)		(271	)
Net interest income													$	254,812		$	260,160		$	241,608		$	227,447
Net interest spread																										2.52	%		2.59	%		2.66	%		2.80	%
Effect of interest-free sources used to fund
earning assets																										.54			.50			.40			.32
Net interest margin																										3.06	%		3.09	%		3.06	%		3.12	%
* Includes loans on nonaccrual status.
Yields and corresponding income amounts 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.

8

RETAIL/COMMERCIAL BANKING
Quarterly, Unaudited
(Thousands)	3Q06			2Q06			1Q06			4Q05			3Q05
Net interest income	$	231,967		$	230,718		$	224,863		$	227,698		$	224,895
Noninterest income		110,429			111,827			106,493			106,682			106,564
Divestitures		-			-			-			7,029			-
Security G/L		-			-			-			-			-
Total revenue		342,396			342,545			331,356			341,409			331,459
Total noninterest expense		204,109			211,873			215,555			203,154			199,653
Provision		23,550			18,361			18,026			15,897			22,428
Pretax income	$	114,737		$	112,311		$	97,775		$	122,358		$	109,378
Efficiency ratio		60	%		62	%		65	%		60	%		60	%
Average loans (millions)	$	21,381		$	21,096		$	20,596		$	19,785		$	18,613
Other earning assets (millions)		491			589			878			1,599			2,250
Total earning assets (millions)	$	21,872		$	21,685		$	21,474		$	21,384		$	20,863
Total deposits	$	11,951		$	11,773		$	11,510		$	11,280		$	10,916
Net interest margin		4.21	%		4.27	%		4.25	%		4.22	%		4.28	%
Noninterest revenue detail
Deposit transactions & cash mgmt	$	44,470		$	42,718		$	38,011		$	42,191		$	41,298
Insurance commissions		10,121			12,048			14,236			12,693			12,236
Trust services & investment mgmt		9,609			10,824			10,657			10,873			11,300
Bankcard Income		6,169			6,103			6,660			7,184			6,769
Other service charges		4,641			5,336			5,356			5,078			5,367
Check clearing fees		1,594			1,679			1,727			1,801			1,885
Revenue from loan sales and
securitizations (a)		10,068			10,548			8,238			10,630			8,638
Miscellaneous revenue		23,757			22,571			21,608			16,232			19,071
Total noninterest revenue	$	110,429		$	111,827		$	106,493		$	106,682		$	106,564
Statistics
Trust total assets (millions)(b)	$	12,197		$	11,541		$	11,838		$	11,971		$	12,451
Trust total managed assets (millions)(b)		6,284			6,223			6,379			6,707			6,984

(a) Includes gains from whole-loan sales and net revenue from asset securitizations

(b) Current quarter is an estimate

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

9

MORTGAGE BANKING
Quarterly, Unaudited
(Thousands)	3Q06			2Q06			1Q06			4Q05			3Q05
Net interest income	$	20,866		$	25,052		$	25,415		$	34,619		$	41,769
Noninterest income:
Net origination fees		67,705			107,392			72,339			87,545			115,541
Net servicing fees		15,701			(727	)		10,717			20,175			17,951
Other fees		13,917			7,355			11,648			12,182			17,762
Total noninterest income		97,323			114,020			94,704			119,902			151,254
Total revenue		118,189			139,072			120,119			154,521			193,023
Noninterest expense		143,601			109,581			125,699			115,261			132,253
Provision		144			292			(227	)		278			180
Pretax (loss)/income	$	(25,556	)	$	29,199		$	(5,353	)	$	38,982		$	60,590
Noninterest expense detail
Commissions & incentives	$	50,090		$	54,831		$	53,385		$	62,946		$	84,774
FAS 91 cost deferral		1,516			4,473			(1,743	)		4,813			4,616
Other salaries & benefits		56,584			50,420			63,709			58,646			61,184
Total salaries & benefits		108,190			109,724			115,351			126,405			150,574
Contract labor & outsourcing		4,025			4,170			4,771			4,938			5,059
Equipment & occupancy		17,095			16,074			17,953			17,633			16,554
Foreclosure provision		2,759			(646	)		7,051			1,264			3,063
Other expenses		67,729			46,554			44,872			42,536			50,126
Total expenses before FAS 91 reclass		199,798			175,876			189,998			192,776			225,376
FAS 91 reclassification		(59,480	)		(69,334	)		(67,178	)		(82,257	)		(97,429	)
Total noninterest expense before
segment allocations		140,318			106,542			122,820			110,519			127,947
Segment allocations		3,283			3,039			2,879			4,742			4,306
Total noninterest expense	$	143,601		$	109,581		$	125,699		$	115,261		$	132,253
Other information
Efficiency ratio		122	%		79	%		105	%		75	%		69	%
Warehouse (millions)	$	3,182		$	3,613		$	3,539		$	3,854		$	4,583
Other earning assets (millions)		827			850			724			580			394
Total earning assets (millions)	$	4,009		$	4,463		$	4,263		$	4,434		$	4,977
Escrow balances	$	1,965		$	1,903		$	1,641		$	2,034		$	2,334
Net interest margin		2.07	%		2.25	%		2.42	%		3.10	%		3.33	%
Warehouse Spread		1.18	%		1.44	%		1.77	%		2.06	%		2.33	%

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

*See Note 1 - Financial Glossary

10

MORTGAGE BANKING
Quarterly, Unaudited
(Thousands)	3Q06			2Q06			1Q06			4Q05			3Q05
ORIGINATION INCOME
Origination Fees	$	65,132		$	77,174		$	67,043		$	79,808		$	104,395
FAS 91 Fee Deferral		1,318			1,523			(126	)		4,932			4,846
Appraisal, Final Inspection,
Credit Report Fees		7,119			7,901			6,778			7,574			9,639
Total origination fees		73,569			86,598			73,695			92,314			118,880
Secondary Marketing Income:
Prime:
OMSR, SRP		71,303			89,999			73,896			88,023			110,813
Marketing G/L (Trading Gains)		13,908			37,907			22,277			21,236			15,167
Concessions		(34,401	)		(41,459	)		(34,093	)		(35,560	)		(39,370	)
LOCOM		(288	)		(398	)		666			614			(1,840	)
Subtotal Prime		50,522			86,049			62,746			74,313			84,770
Non-Prime:
OMSR, SRP		5,034			2,262			4,416			4,747			11,779
LOCOM		(1,940	)		1,817			(1,340	)		(1,572	)		(2,459	)
Subtotal Non-Prime		3,094			4,079			3,076			3,175			9,320
Total Secondary Marketing Fees -
Mortgage		53,616			90,128			65,822			77,488			94,090
FAS 91 Reclassification		(59,480	)		(69,334	)		(67,178	)		(82,257	)		(97,429	)
Total Origination Income	$	67,705		$	107,392		$	72,339		$	87,545		$	115,541
Margins:
Marketing Margin on Deliveries (bps):
Prime:
OMSR, SRP		114			128			116			118			110
Marketing G/L (Trading Gains)		22			54			35			28			15
Concessions		(55	)		(59	)		(53	)		(48	)		(39	)
LOCOM		-			(1	)		1			1			(2	)
Total Prime		81			122			99			99			84
Non-Prime:
OMSR, SRP		210			68			99			114			239
LOCOM		(81	)		55			(30	)		(38	)		(50	)
Total Non-Prime		129			123			69			76			189
Total Marketing Margin on Deliveries		83			122			97			98			89

11

MORTGAGE BANKING
Quarterly, Unaudited
($ in millions)	3Q06			2Q06			1Q06			4Q05			3Q05
KEY ORIGINATION METRICS
Production:
First Lien Production	$	6,351		$	7,482		$	6,865		$	7,991		$	10,557
Breakdown by Product Type:
Government		6	%		6	%		5	%		4	%		4	%
Conventional Fixed		55	%		55	%		51	%		44	%		43	%
Conventional ARM		13	%		15	%		19	%		19	%		22	%
Jumbo Fixed		10	%		10	%		10	%		14	%		11	%
Jumbo ARM		11	%		11	%		10	%		14	%		14	%
Other		1	%		1	%		1	%		1	%		1	%
Non Prime		4	%		2	%		4	%		4	%		5	%
Breakdown by Payment Type:
Fully amortizing		70	%		69	%		66	%		66	%		65	%
Interest Only - Fixed		10	%		10	%		11	%		8	%		6	%
Interest Only - ARM		18	%		17	%		19	%		22	%		26	%
Option ARM's		2	%		4	%		4	%		4	%		3	%
Production Refinanced %		33	%		33	%		41	%		41	%		42	%
Production Purchased %		67	%		67	%		59	%		59	%		58	%
ARMs % (Excluding Gov't ARMS)		27	%		28	%		33	%		37	%		41	%
Total Sales Force		2,495			2,467			2,609			2,630			2,602
Warehouse/Pipeline Balance:
Ending Warehouse Balance	$	2,277		$	2,604		$	2,813		$	2,942		$	3,159
Ending Pipeline Balance (Locked)		3,384			3,645			3,691			3,119			3,930
Loan Sales (Deliveries):
Prime		6,250			7,061			6,364			7,474			10,071
Non-Prime		240			330			443			416			492
Total Loan Sales		6,490			7,391			6,807			7,890			10,563

12

MORTGAGE BANKING
Quarterly, Unaudited
	3Q06					2Q06					1Q06					4Q05					3Q05
(Thousands)		$		bps			$		bps			$		bps			$		bps			$		bps
SERVICING INCOME
Gross Service Fees	$	98,594		40		$	95,043		39		$	93,454		39		$	91,735		39		$	88,866		38
Guarantee Fees		(15,778	)	(7	)		(17,348	)	(7	)		(18,876	)	(8	)		(18,980	)	(8	)		(18,900	)	(8	)
Sub-Service Fee Income		29		-			71		-			64		-			144		-			101		-
Lender Paid MI		(24	)	-			(20	)	-			108		-			(168	)	-			(145	)	-
Net Service Fees		82,821		33			77,746		32			74,750		31			72,731		31			69,922		30
Early Payoff Interest Expense		(3,718	)	(2	)		(4,324	)	(2	)		(3,838	)	(2	)		(5,164	)	(2	)		(6,844	)	(3	)
Ancillary Fees		7,112		3			6,820		3			6,934		3			6,698		3			6,601		3
Total Service Fees		86,215		34			80,242		33			77,846		32			74,265		32			69,679		30
MSR Asset - Value Changes
Change in MSR Value - Runoff		(60,326	)				(72,270	)				(58,836	)				(71,669	)				(71,981	)
Change in MSR Value - Other than Runoff		(133,067	)				69,564					95,961					55,684					129,596
MSR Hedge Gains/(Losses)		127,240					(72,104	)				(98,290	)				(32,673	)				(99,271	)
Total Net Change MSR Value		(66,153	)				(74,810	)				(61,165	)				(48,658	)				(41,656	)
Trading Asset & Associated Derivatives:
Change in Trading Asset Value		(13,628	)				3,044					8,467					3,720					15,892
Trading Asset Hedge Gains/(Losses)		13,940					(4,438	)				(10,932	)				(5,722	)				(15,766	)
Total Trading Asset & Associated Derivatives		312					(1,394	)				(2,465	)				(2,002	)				126
Option Expense on Servicing Hedges		(4,673	)				(4,765	)				(3,499	)				(3,430	)				(10,198	)
Total Servicing Income		15,701					(727	)				10,717					20,175					17,951
KEY SERVICING METRICS - ($ in millions)
Beginning Servicing Portfolio	$	99,304				$	97,303				$	95,284				$	93,589				$	90,823
Additions to portfolio		6,238					7,332					6,797					7,772					10,129
Prepayments		(3,476	)				(3,725	)				(3,278	)				(4,418	)				(5,791	)
Amortization		(692	)				(687	)				(688	)				(676	)				(681	)
Service Release Sales		(1,128	)				(919	)				(812	)				(983	)				(891	)
End. Servicing Portfolio (Owned)	$	100,246				$	99,304				$	97,303				$	95,284				$	93,589
Avg. Servicing Portfolio (Owned)	$	99,484				$	98,342				$	96,147				$	94,388				$	92,235
Average Loans Serviced (#)		629,897					626,527					620,476					616,649					610,895
Product Mix (Average)
Product Mix (%)
GNMA		8	%				8	%				9	%				9	%				9	%
FNMA/FHLMC		64	%				65	%				65	%				65	%				67	%
Private		25	%				24	%				23	%				22	%				20	%
Sub-Total		97	%				97	%				97	%				96	%				96	%
Warehouse		3	%				3	%				3	%				4	%				4	%
Total		100	%				100	%				100	%				100	%				100	%
Other Statistics
(Annualized)
Ancillary Income per Loan	$	45.16				$	43.54				$	44.70				$	43.45				$	43.22
Servicing Cost per Loan	$	49.36				$	50.60				$	53.01				$	51.96				$	51.80
Portfolio Data
(in millions)
Average Servicing Asset **		1,532					1,503					1,350					1,262					1,106
Valuation Reserve (Ending Balance)		-					-					-					1					1
Servicing Book Value (bps)		154					153					140					134					120
Change in MSR Asset /
Average Servicing Asset		17	%				20	%				18	%				15	%				15	%
Run-Off Rate		17	%				18	%				17	%				22	%				28	%

** Includes valuation reserve/MSRs only

13

CAPITAL MARKETS
Quarterly, Unaudited
(Thousands)	3Q06			2Q06			1Q06			4Q05			3Q05
Net interest income/(expense)	$	2,944		$	240		$	(594	)	$	(957	)	$	(2,563	)
Incremental cost of equity		(4,437	)		(4,769	)		(4,969	)		(4,856	)		(5,181	)
Net interest expense		(1,493	)		(4,529	)		(5,563	)		(5,813	)		(7,744	)
Noninterest income:
Fixed income		41,503			41,843			50,602			44,397			43,870
Other product revenue		56,734			62,179			45,901			39,800			41,110
Total product revenue		98,237			104,022			96,503			84,197			84,980
Other non-product revenue		3,365			(3,029	)		2,400			621			1,261
Total noninterest income		101,602			100,993			98,903			84,818			86,241
Total revenue		100,109			96,464			93,340			79,005			78,497
Noninterest expense		86,276			80,553			86,379			75,759			76,093
Pretax income	$	13,833		$	15,911		$	6,961		$	3,246		$	2,404
Efficiency ratio		86	%		84	%		93	%		96	%		97	%
Trading inventory (millions)	$	2,523		$	2,356		$	2,175		$	2,160		$	2,158
Other earning assets (millions)		2,231			2,262			2,149			2,285			2,512
Total earning assets (millions)	$	4,754		$	4,618		$	4,324		$	4,445		$	4,670
Net interest margin		(0.12	)%		(0.39	)%		(0.52	)%		(0.52	)%		(0.66	)%

14

CORPORATE
Quarterly, Unaudited
(Thousands)	3Q06			2Q06			1Q06			4Q05			3Q05
Net interest income	$	281		$	2,357		$	1,006		$	(1,692	)	$	1,240
Noninterest income		3,274			2,254			(14,075	)		2,748			2,946
Security gain/(loss)		8,757			2,893			(80,281	)		(181	)		(406	)
Total revenue		12,312			7,504			(93,350	)		875			3,780
Total noninterest expense		22,371			17,979			15,582			19,118			18,176
Pretax loss	$	(10,059	)	$	(10,475	)	$	(108,932	)	$	(18,243	)	$	(14,396	)

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

15

CAPITAL HIGHLIGHTS
Quarterly, Unaudited
(Dollars in millions, except per share amount)	3Q06			2Q06			1Q06			4Q05			3Q05
Tier 1 Capital (a)	$	2,660.3		$	2,612.2		$	2,558.3		$	2,524.2		$	2,465.2
Tier 2 Capital (a)		1,338.2			1,331.2			1,344.5			1,090.5			1,112.5
Total Capital (a)	$	3,998.5		$	3,943.4		$	3,902.8		$	3,614.7		$	3,577.7
Risk-Adjusted Assets (a)	$	31,943.5		$	30,016.3		$	29,166.8		$	29,111.9		$	28,221.6
Tier 1 Ratio (a)		8.33	%		8.70	%		8.77	%		8.67	%		8.74	%
Tier 2 Ratio (a)		4.19			4.44			4.61			3.75			3.94
Total Capital Ratio (a)		12.52	%		13.14	%		13.38	%		12.42	%		12.68	%
Leverage Ratio (a)		6.80	%		6.86	%		6.86	%		6.76	%		6.54	%
Shareholders' Equity/Assets Ratio (b)		6.26			6.52			6.43			6.42			6.19
Book Value	$	20.06		$	19.59		$	19.36		$	18.46		$	18.06

(a) Current quarter is an estimate

(b) Calculated on period-end balances

16

 Note 1□ Financial Glossary  

Appraisal Fees: A fee charged to the borrower for the cost of appraising a property.

Concessions: The net amount of the discount or premium pricing charged to borrowers upon loan origination. This also includes the servicing release premium paid to correspondents to purchase loans. Discount pricing is used to competitively price mortgage loans.

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. For loans held for sale, 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 the loans sold during the period.

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.

Marketing G/L (Trading Gains): The net result of hedging activities.

Originated Mortgage Servicing Rights (OMSR): The retained right to service a mortgage loan when a mortgage loan is sold on a servicing-retained basis. Represents the present value of the amount by which the estimated future net cash flows from servicing mortgage loans exceeds the cost of servicing mortgage loans.

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.

Servicing Released Premium (SRP): The premium received for selling loans on a servicing released basis.