First Horizon 8K Fourth Quarter 2006 Financial Supplement | FHN 17 Jan 07

FOURTH 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
4Q 2006 Financial Supplement

Dear Investor,

In conjunction with the release of First Horizon National Corporation’s fourth 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)		4Q06			3Q06			2Q06			1Q06			4Q05
Net interest income	$	245,997		$	251,621		$	253,598		$	245,721		$	254,812
Noninterest income		313,342			309,170			332,119			277,891			315,724
Divestitures		-			-			-			-			7,029
Security gain/(loss)		3,002			8,757			2,893			(80,281	)		(181	)
Total revenue		562,341			569,548			588,610			443,331			577,384
Noninterest expense		431,630			452,899			423,011			435,081			414,866
Provision		22,983			23,694			18,653			17,799			16,175
Pretax income/(loss)		107,728			92,955			146,946			(9,549	)		146,343
Provision/(benefit) for income taxes		31,448			25,776			43,013			(12,959	)		42,695
Income from continuing operations		76,280			67,179			103,933			3,410			103,648
Income/(loss) from discontinued operations, net of tax		187			(69	)		376			210,273			5,369
Income before cumulative effect		76,467			67,110			104,309			213,683			109,017
Cumulative effect of changes in accounting
principle, net of tax		-			-			-			1,345			(3,098	)
Net income	$	76,467		$	67,110		$	104,309		$	215,028		$	105,919

Tax rate		29.2	%		27.7	%		29.3	%		NM			29.2	%
Efficiency ratio		76.8	%		79.5	%		71.9	%		98.1	%		71.9	%

NM - Not meaningful

SELECTED FINANCIAL DATA
Quarterly, Unaudited


(Dollars in thousands, except per share data)		4Q06			3Q06			2Q06			1Q06			4Q05
Income from continuing operations	$	76,280		$	67,179		$	103,933		$	3,410		$	103,648
Income/(loss) from discontinued operations,
net of tax		187			(69	)		376			210,273			5,369
Cumulative effect of changes in accounting
principle, net of tax		-			-			-			1,345			(3,098	)
Net income		76,467			67,110			104,309			215,028			105,919
Common Stock Data

Diluted earnings per common share:
Diluted EPS from continuing operations	$	.60		$	.53		$	.82		$	.03		$	.80
Diluted EPS before cumulative effect of
changes in accounting principle		.60			.53			.82			1.66			.84
Diluted EPS		.60			.53			.82			1.67			.81

Diluted shares		127,784			127,523			127,280			129,100			130,043
Period-end shares outstanding		124,866			124,467			123,947			123,230			126,222
Dividends declared per share	$	.45		$	.45		$	.45		$	.45		$	.45
Selected Average Balances

Total assets	$	39,327,781		$	39,519,765		$	38,494,898		$	37,689,523		$	37,720,410
Total loans, net of unearned income		21,894,032			21,808,787			21,445,153			20,853,947			19,977,924
Investment securities		3,952,007			3,805,160			3,008,310			3,026,429			2,858,410
Earning assets		34,313,781			34,627,512			33,946,387			33,142,044			33,191,778
Deposits		23,155,050			22,926,483			21,981,445			22,939,767			23,918,717
Total long-term debt		5,718,968			5,538,323			5,160,610			3,805,307			2,665,867
Shareholders' equity		2,510,752			2,442,030			2,401,428			2,335,512			2,284,400
Selected Period-End Balances

Total assets	$	37,918,259		$	40,076,183		$	37,469,234		$	37,300,975		$	36,579,061
Total loans, net of unearned income		22,104,905			21,955,030			21,717,264			21,211,946			20,611,998
Investment securities		3,890,420			3,983,049			3,108,569			2,944,826			2,912,486
Earning assets		32,320,221			33,259,328			31,879,716			31,617,338			31,578,065
Deposits		20,213,232			25,284,541			21,693,442			21,517,047			23,317,557
Total long-term debt		5,836,360			5,487,188			5,606,294			4,599,339			3,437,643
Shareholders' equity		2,462,390			2,510,524			2,442,193			2,399,608			2,347,539
Selected Ratios and Other

Return on average assets		.77	%		.67	%		1.09	%		2.31	%		1.11	%
Return on average equity		12.1			10.9			17.4			37.3			18.4

FTE employees		12,131			12,324			12,413			13,053			13,175

STATEMENTS OF INCOME
Quarterly, Unaudited

(Thousands)		4Q06		3Q06			2Q06		1Q06			4Q05
Interest income	$	604,562	$	612,598		$	578,582	$	533,369		$	519,475
Less interest expense		358,565		360,977			324,984		287,648			264,663
Net interest income		245,997		251,621			253,598		245,721			254,812
Provision for loan losses		22,983		23,694			18,653		17,799			16,175
Net interest income after
provision for loan losses		223,014		227,927			234,945		227,922			238,637
Noninterest income:
Capital markets		92,809		95,215			102,165		92,858			80,896
Mortgage banking		87,524		85,935			116,472		80,682			116,288
Deposit transactions
and cash management		43,317		44,503			42,756		38,023			42,196
Revenue from loan sales and securitizations		16,276		11,830			12,212		11,357			13,146
Insurance commissions		8,951		10,534			12,461		14,686			13,144
Trust services and investment
management		10,424		9,609			10,824		10,657			10,873
Gains on divestitures		-		-			-		-			7,029
Securities gains/(losses), net		3,002		8,757			2,893		(80,281	)		(181	)
Other		54,041		51,544			35,229		29,628			39,181
Total noninterest income		316,344		317,927			335,012		197,610			322,572
Adjusted gross income after
provision for loan losses		539,358		545,854			569,957		425,532			561,209
Noninterest expense:
Employee compensation,
incentives and benefits		257,397		260,351			245,796		260,141			244,943
Occupancy		29,298		29,745			27,525		30,102			28,000
Equipment rentals, depreciation
and maintenance		17,867		17,893			17,858		20,264			19,108
Operations services		17,550		17,976			17,075		17,440			18,363
Communications and courier		11,978		12,950			13,409		14,912			14,379
Amortization of intangible assets		2,460		3,233			2,881		2,888			2,667
Other		95,080		110,751			98,467		89,334			87,406
Total noninterest expense		431,630		452,899			423,011		435,081			414,866
Pretax income/(loss)		107,728		92,955			146,946		(9,549	)		146,343
Provision/(benefit) for income taxes		31,448		25,776			43,013		(12,959	)		42,695
Income from continuing operations		76,280		67,179			103,933		3,410			103,648
Income/(loss) from discontinued operations,
net of tax		187		(69	)		376		210,273			5,369
Income before cumulative effect		76,467		67,110			104,309		213,683			109,017
Cumulative effect of changes in accounting
principle, net of tax		-		-			-		1,345			(3,098	)
Net income	$	76,467	$	67,110		$	104,309	$	215,028		$	105,919

OTHER INCOME AND OTHER EXPENSE
Quarterly, Unaudited

(Thousands)		4Q06		3Q06			2Q06		1Q06		4Q05
All other income:
Bankcard income	$	6,386	$	6,441		$	6,362	$	6,916	$	7,391
Other service charges		5,409		5,074			5,806		5,766		5,531
Remittance processing		3,576		3,525			3,642		3,994		3,926
Check clearing fees		1,386		1,593			1,679		1,727		1,801
Other		37,284		34,911			17,740		11,225		20,532
Total	$	54,041	$	51,544		$	35,229	$	29,628	$	39,181
All other expense:
Advertising and public relations	$	11,162	$	13,272		$	10,998	$	11,995	$	11,066
Legal and professional fees		12,046		11,071			11,600		8,295		11,879
Computer software		8,608		8,959			8,827		7,987		7,374
Travel and entertainment		8,518		8,164			8,652		6,972		7,834
Contract employment		5,836		6,955			7,094		7,535		7,922
Distributions on preferred stock		4,769		4,874			4,453		4,050		3,806
Supplies		3,177		3,961			4,260		3,674		4,468
Fed services fees		1,445		1,613			1,736		1,749		1,852
Foreclosed real estate		1,675		(86	)		2,587		208		3,409
Deposit insurance premium		765		737			801		895		782
Charitable contributions		339		454			530		490		418
Other		36,740		50,777			36,929		35,484		26,596
Total	$	95,080	$	110,751		$	98,467	$	89,334	$	87,406

AVERAGE AND PERIOD-END LOANS
Quarterly, Unaudited

(Thousands)		4Q06		3Q06		2Q06		1Q06		4Q05
Average loans:
Loans, net of unearned income:
Commercial:
Commercial, financial and industrial	$	6,903,708	$	6,803,461	$	6,570,293	$	6,415,436	$	6,356,977
Real estate commercial		1,187,431		1,221,408		1,259,416		1,225,049		1,208,945
Real estate construction		2,741,118		2,575,590		2,380,430		2,197,693		1,973,121
Total commercial loans		10,832,257		10,600,459		10,210,139		9,838,178		9,539,043
Retail:
Real estate residential		8,211,506		8,512,589		8,560,085		8,644,920		8,149,419
Real estate construction		2,081,885		2,065,849		2,028,480		1,961,658		1,874,831
Other retail		160,366		160,446		162,573		164,567		170,470
Credit card receivables		201,092		201,319		197,706		238,089		244,161
Real estate loans pledged against
other collateralized borrowings (a)		406,926		268,125		286,170		6,535		-
Total retail loans		11,061,775		11,208,328		11,235,014		11,015,769		10,438,881
Total loans, net of unearned income	$	21,894,032	$	21,808,787	$	21,445,153	$	20,853,947	$	19,977,924



Period-end loans:
Loans, net of unearned income:
Commercial:
Commercial, financial and industrial	$	7,201,009	$	6,945,207	$	6,705,925	$	6,538,798	$	6,578,117
Real estate commercial		1,136,590		1,199,084		1,276,278		1,232,021		1,213,052
Real estate construction		2,753,458		2,660,415		2,453,579		2,277,825		2,108,121
Total commercial loans		11,091,057		10,804,706		10,435,782		10,048,644		9,899,290
Retail:
Real estate residential		7,973,313		8,428,652		8,562,733		8,511,300		8,368,219
Real estate construction		2,085,133		2,096,440		2,076,004		2,001,916		1,925,060
Other retail		161,178		163,134		163,121		161,617		168,413
Credit card receivables		203,307		202,866		202,117		194,908		251,016
Real estate loans pledged against
other collateralized borrowings (a)		590,917		259,232		277,507		293,561		-
Total retail loans		11,013,848		11,150,324		11,281,482		11,163,302		10,712,708
Total loans, net of unearned income	$	22,104,905	$	21,955,030	$	21,717,264	$	21,211,946	$	20,611,998

(a) During 2006, FHN sold loans through on-balance sheet securitizations, which were structured as financings for accounting purposes.

PERIOD-END STATEMENTS OF CONDITION
Quarterly, Unaudited

(Thousands)		4Q06			3Q06		2Q06			1Q06			4Q05
Assets:
Cash and due from banks	$	976,619		$	903,482	$	854,846		$	887,539		$	945,547
Federal funds sold and securities
purchased under agreements to resell		1,202,537			1,992,426		1,572,143			1,347,577			1,485,199
Total cash and cash equivalents		2,179,156			2,895,908		2,426,989			2,235,116			2,430,746
Investment in bank time deposits		18,037			17,798		75,903			25,319			10,687
Trading securities		2,230,745			2,512,744		2,183,102			2,508,615			2,133,428
Loans held for sale		2,873,577			2,798,281		3,222,735			3,579,055			4,424,267
Investment Securities		3,890,420			3,983,049		3,108,569			2,944,826			2,912,486
Loans, net of unearned income		22,104,905			21,955,030		21,717,264			21,211,946			20,611,998
Less: Allowance for loan losses		216,285			206,829		199,835			195,011			189,705
Total net loans		21,888,620			21,748,201		21,517,429			21,016,935			20,422,293
Capital markets receivables		732,282			1,027,927		1,058,690			858,072			511,508
Mortgage servicing rights, net		1,533,942			1,498,341		1,595,413			1,475,448			1,314,629
Goodwill		275,582			274,534		281,909			281,475			281,440
Other intangible assets, net		64,530			70,546		75,056			76,666			76,647
Premises and equipment, net		451,708			441,659		431,385			422,346			408,539
Real estate acquired by foreclosure		63,519			65,224		60,577			48,959			27,410
Discontinued assets		416			939,728		696			56,712			163,545
Other assets		1,715,725			1,802,243		1,430,781			1,771,431			1,461,436
Total assets	$	37,918,259		$	40,076,183	$	37,469,234		$	37,300,975		$	36,579,061

Liabilities and shareholders' equity:
Deposits:
Savings	$	3,354,180		$	3,256,680	$	3,246,821		$	3,218,206		$	2,795,723
Interest-bearing demand deposits		1,969,700			1,742,276		1,894,707			1,904,235			1,909,349
Time deposits		2,924,050			2,906,424		2,819,597			2,692,046			2,478,946
Certificates of deposit $100,000 and more		6,517,629			11,920,226		8,053,119			8,228,543			10,931,695
Total interest-bearing deposits		14,765,559			19,825,606		16,014,244			16,043,030			18,115,713
Noninterest-bearing deposits		5,447,673			5,458,935		5,679,198			5,474,017			5,201,844
Total deposits		20,213,232			25,284,541		21,693,442			21,517,047			23,317,557
Federal funds purchased and securities
sold under agreements to repurchase		4,961,799			2,416,974		3,387,711			4,337,243			3,735,742
Trading liabilities		789,957			847,453		929,694			766,479			793,638
Commercial paper and other short-term borrowings		1,258,513			926,292		721,227			749,979			802,017
Term borrowings		5,243,961			5,226,772		5,325,014			4,299,539			3,437,643
Other collateralized borrowings		592,399			260,416		281,280			299,800			-
Total long-term debt		5,836,360			5,487,188		5,606,294			4,599,339			3,437,643
Capital markets payables		799,489			989,332		1,057,617			941,911			591,404
Discontinued liabilities		6,966			6,977		8,422			233,402			122,026
Other liabilities		1,294,283			1,311,628		1,327,360			1,460,693			1,136,221
Total liabilities		35,160,599			37,270,385		34,731,767			34,606,093			33,936,248
Preferred stock of subsidiary		295,270			295,274		295,274			295,274			295,274
Shareholders' equity:
Common stock		78,041			77,792		77,467			77,019			78,889
Capital surplus		312,521			301,857		282,563			269,564			404,964
Undivided profits		2,144,276			2,124,312		2,113,514			2,065,285			1,905,930
Accumulated other comprehensive (loss)/income, net		(72,448	)		6,563		(31,351	)		(12,260	)		(42,244	)
Total shareholders' equity		2,462,390			2,510,524		2,442,193			2,399,608			2,347,539
Total liabilities and shareholders' equity	$	37,918,259		$	40,076,183	$	37,469,234		$	37,300,975		$	36,579,061

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

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)		4Q06			3Q06			2Q06			1Q06			4Q06			3Q06			2Q06			1Q06			4Q06		3Q06		2Q06		1Q06
Assets:
Earning assets:
Loans, net of unearned income*	$	21,894,032		$	21,808,787		$	21,445,153		$	20,853,947		$	417,261		$	416,980		$	393,546		$	363,577			7.56	%	7.59	%	7.36	%	7.07	%
Loans held for sale		3,796,828			4,192,558			4,608,310			4,760,823			63,852			72,135			75,832			76,342			6.73		6.88		6.58		6.41
Investment securities:
U.S. Treasuries		50,891			50,989			53,561			72,265			646			632			624			781			5.04		4.92		4.67		4.38
U.S. government agencies		3,652,056			3,512,162			2,731,213			2,736,495			52,107			50,262			38,211			32,676			5.71		5.72		5.60		4.78
States and municipalities		1,771			1,869			1,893			1,916			4			6			7			7			.98		1.28		1.39		1.37
Other		247,289			240,140			221,643			215,753			3,141			3,017			2,726			2,548			5.08		5.02		4.92		4.72
Total investment securities		3,952,007			3,805,160			3,008,310			3,026,429			55,898			53,917			41,568			36,012			5.66		5.67		5.53		4.76
Capital markets securities inventory		2,514,046			2,524,102			2,356,754			2,176,124			34,251			34,128			31,849			27,327			5.45		5.41		5.41		5.02
Mortgage banking trading securities		327,842			380,586			462,592			442,453			9,895			10,762			11,798			11,246			12.07		11.31		10.20		10.17
Other earning assets:
Federal funds sold and securities
purchased under agreements to resell		1,810,935			1,875,420			2,018,408			1,866,146			23,466			24,412			23,712			18,995			5.14		5.16		4.71		4.13
Investment in bank time deposits		18,091			40,899			46,860			16,122			230			544			580			179			5.04		5.27		4.96		4.51
Total other earning assets		1,829,026			1,916,319			2,065,268			1,882,268			23,696			24,956			24,292			19,174			5.14		5.17		4.72		4.13
Total earning assets/Interest income		34,313,781			34,627,512			33,946,387			33,142,044		$	604,853		$	612,878		$	578,885		$	533,678			7.01	%	7.04	%	6.83	%	6.50	%
Allowance for loan losses		(213,569	)		(206,871	)		(202,003	)		(196,316	)
Cash and due from banks		828,291			816,342			794,019			831,172
Capital markets receivables		154,908			151,037			187,435			199,635
Premises and equipment, net		446,556			436,027			427,213			418,882
Other assets		3,797,814			3,695,718			3,341,847			3,294,106
Total assets	$	39,327,781		$	39,519,765		$	38,494,898		$	37,689,523
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand deposits	$	1,792,484		$	1,822,558		$	1,886,392		$	1,892,382		$	6,006		$	6,561		$	6,362		$	5,550			1.33	%	1.43	%	1.35	%	1.19	%
Savings		3,327,576			3,270,211			3,259,930			2,902,257			26,253			25,084			21,826			15,347			3.13		3.04		2.69		2.14
Time deposits		2,921,197			2,873,451			2,779,821			2,602,581			33,732			32,090			29,116			25,338			4.58		4.43		4.20		3.95
Total interest-bearing core deposits		8,041,257			7,966,220			7,926,143			7,397,220			65,991			63,735			57,304			46,235			3.26		3.17		2.90		2.53
Certificates of deposit $100,000 and more		9,820,358			9,694,677			8,859,178			10,626,088			132,938			130,875			110,068			119,296			5.37		5.36		4.98		4.55
Federal funds purchased and securities
sold under agreements to repurchase		3,888,492			4,650,930			4,975,223			4,745,621			46,321			56,639			58,084			47,821			4.73		4.83		4.68		4.09
Capital markets trading liabilities		1,322,664			1,358,976			1,368,933			1,304,492			18,560			19,233			19,923			18,347			5.57		5.61		5.84		5.70
Commercial paper and other short-term
borrowings		889,802			773,038			750,789			765,178			12,099			10,232			9,296			8,423			5.39		5.25		4.97		4.46
Total long-term debt		5,718,968			5,538,323			5,160,610			3,805,307			82,655			80,263			70,309			47,526			5.79		5.80		5.46		5.00
Total interest-bearing liabilities/Interest
expense		29,681,541			29,982,164			29,040,876			28,643,906		$	358,564		$	360,977		$	324,984		$	287,648			4.80	%	4.79	%	4.49	%	4.06	%
Noninterest-bearing deposits		5,293,435			5,265,586			5,196,124			4,916,459
Capital markets payables		247,738			213,104			236,481			229,867
Other liabilities		1,299,041			1,321,607			1,324,715			1,268,505
Preferred stock of subsidiary		295,274			295,274			295,274			295,274
Shareholders' equity		2,510,752			2,442,030			2,401,428			2,335,512
Total liabilities and shareholders' equity	$	39,327,781		$	39,519,765		$	38,494,898		$	37,689,523
Net interest income-tax equivalent basis													$	246,289		$	251,901		$	253,901		$	246,030
Fully taxable equivalent adjustment														(291	)		(279	)		(303	)		(309	)
Net interest income													$	245,998		$	251,622		$	253,598		$	245,721
Net interest spread																										2.21	%	2.25	%	2.34	%	2.44	%
Effect of interest-free sources used to fund
earning assets																										.65		.65		.66		.55
Net interest margin																										2.86	%	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.

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)		4Q05			3Q05			2Q05			1Q05			4Q05			3Q05			2Q05			1Q05			4Q05		3Q05		2Q05		1Q05
Assets:
Earning assets:
Loans, net of unearned income*	$	19,977,924		$	18,767,408		$	17,830,988		$	16,721,879		$	338,113		$	299,199		$	264,919		$	231,645			6.72	%	6.33	%	5.96	%	5.62	%
Loans held for sale		5,732,993			6,891,361			6,007,207			5,273,877			93,327			111,573			93,897			79,085			6.51		6.48		6.25		6.00
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:
Interest-bearing demand deposits	$	1,850,255		$	1,780,196		$	1,765,833		$	1,683,623		$	4,969		$	4,391		$	3,616		$	2,472			1.07	%	.98	%	.82	%	.60	%
Savings		2,844,621			2,796,673			2,848,043			2,884,230			13,597			11,870			10,157			8,811			1.90		1.68		1.43		1.24
Time deposits		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.

MORTGAGE SERVICING RIGHTS
Quarterly, Unaudited

(Thousands)		4Q06			3Q06			2Q06			1Q06
FIRST LIENS
Fair value beginning balance	$	1,464,360		$	1,565,649		$	1,449,472		$	1,318,219
Addition of mortgage servicing rights		86,306			90,970			117,197			95,624
Reductions due to loan payments		(66,937	)		(60,328	)		(72,270	)		(58,641	)
Changes in fair value due to:
Changes in current market interest rates		11,601			(131,646	)		70,933			94,249
Other changes in fair value		(115	)		(285	)		317			21
Fair value ending balance	$	1,495,215		$	1,464,360		$	1,565,649		$	1,449,472

SECOND LIENS
Fair value beginning balance	$	18,851		$	14,457		$	11,062		$	5,470
Addition of mortgage servicing rights		3,931			4,905			4,267			6,360
Reductions due to loan payments		(1,716	)		(1,172	)		(955	)		(797	)
Changes in fair value due to:
Changes in current market interest rates		11			(61	)		46			49
Changes in assumptions		2,400			722			-			-
Other changes in fair value		614			-			37			(20	)
Fair value ending balance	$	24,091		$	18,851		$	14,457		$	11,062

HELOC
Fair value beginning balance	$	15,130		$	15,307		$	14,914		$	14,384
Addition of mortgage servicing rights		1,028			1,559			1,891			1,971
Reductions due to loan payments		(1,385	)		(1,805	)		(2,021	)		(2,317	)
Changes in fair value due to:
Changes in current market interest rates		(1	)		61			523			506
Changes in assumptions		-			8			-			-
Other changes in fair value		(136	)		-			-			370
Fair value ending balance	$	14,636		$	15,130		$	15,307		$	14,914

TOTAL CONSOLIDATED
Fair value beginning balance	$	1,498,341		$	1,595,413		$	1,475,448		$	1,338,073
Addition of mortgage servicing rights		91,265			97,434			123,355			103,955
Reductions due to loan payments		(70,038	)		(63,305	)		(75,246	)		(61,755	)
Changes in fair value due to:
Changes in current market interest rates		11,611			(131,646	)		71,502			94,804
Changes in assumptions		2,400			730			-			-
Other changes in fair value		363			(285	)		354			371
Fair value ending balance	$	1,533,942		$	1,498,341		$	1,595,413		$	1,475,448

Effective first quarter 2006, FHN elected early adoption of SFAS No. 156, which requires servicing rights be initially measured at fair value.

In 2005 these amounts were included at the lower of cost, net of accumulated amortization, or fair value.

RETAIL/COMMERCIAL BANKING
Quarterly, Unaudited

(Thousands)		4Q06			3Q06			2Q06			1Q06			4Q05
Net interest income	$	228,034		$	231,932		$	230,678		$	224,851		$	227,682
Noninterest income		112,664			110,191			112,018			106,394			106,603
Divestitures		-			-			-			-			7,029
Security G/L		-			-			-			-			-
Total revenue		340,698			342,123			342,696			331,245			341,314
Total noninterest expense		209,143			203,365			211,973			215,004			202,624
Provision		23,264			23,550			18,361			18,026			15,897
Pretax income	$	108,291		$	115,208		$	112,362		$	98,215		$	122,793

Efficiency ratio		61	%		59	%		62	%		65	%		59	%

Balance Sheet
Average loans (millions)	$	21,465		$	21,381		$	21,096		$	20,596		$	19,785
Other earning assets (millions)		429			491			589			878			1,599
Total earning assets (millions)	$	21,894		$	21,872		$	21,685		$	21,474		$	21,384

Total deposits	$	12,046		$	11,951		$	11,773		$	11,510		$	11,280

Net interest margin		4.13	%		4.21	%		4.27	%		4.25	%		4.22	%

Noninterest income
Deposit transactions & cash mgmt	$	43,257		$	44,470		$	42,718		$	33,254		$	42,191
Insurance commissions		8,518			10,121			12,048			14,287			12,693
Trust services & investment mgmt		10,424			9,609			10,824			11,164			10,873
Bankcard Income		6,084			6,169			6,103			5,882			7,185
Other service charges		5,014			4,641			5,336			4,806			5,078
Check clearing fees		1,386			1,594			1,679			1,869			1,801
Revenue from loan sales and
securitizations (a)		13,886			10,068			10,548			8,238			10,630
Miscellaneous revenue		24,095			23,519			22,762			26,894			16,152
Total noninterest income	$	112,664		$	110,191		$	112,018		$	106,394		$	106,603

Key Statistics


Locations
Full-Service Financial Centers
First Tennesee		197			194			192			192			191
First Horizon Bank		32			27			23			21			17

Other
Trust total assets (millions)(b)	$	13,618		$	12,866		$	11,541		$	11,838		$	11,971
Trust total managed assets (millions)(b)		6,562			6,270			6,223			6,379			6,707

(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.

MORTGAGE BANKING
Quarterly, Unaudited

(Thousands)		4Q06			3Q06			2Q06			1Q06			4Q05
Net interest income	$	20,418		$	20,839		$	25,050		$	25,408		$	34,613
Noninterest income:
Net origination fees		69,230			64,248			110,416			64,205			89,120
Net servicing fees		11,826			15,701			(727	)		10,717			20,175
Other fees		10,497			10,418			9,913			8,800			10,317
Total noninterest income		91,553			90,367			119,602			83,722			119,612
Total revenue		111,971			111,206			144,652			109,130			154,225
Noninterest expense		108,751			136,661			115,099			114,629			115,020
Provision		(281	)		144			292			(227	)		278
Pretax (loss)/income	$	3,501		$	(25,599	)	$	29,261		$	(5,272	)	$	38,927

Noninterest expense detail
Commissions & incentives	$	47,428		$	50,090		$	54,831		$	53,385		$	62,946
FAS 91 cost deferral		(1,131	)		1,515			4,473			(1,743	)		4,813
Other salaries & benefits		56,462			56,584			50,420			63,708			58,646
Total salaries & benefits		102,759			108,189			109,724			115,350			126,405
Contract labor & outsourcing		3,103			4,025			4,170			4,771			4,938
Equipment & occupancy		17,362			17,095			16,074			17,953			17,633
Foreclosure provision		1,042			(698	)		2,379			(1,082	)		2,838
Other expenses		38,525			64,289			49,099			41,990			40,785
Total expenses before FAS 91 reclass		162,791			192,900			181,446			178,982			192,599
FAS 91 reclassification		(57,575	)		(59,480	)		(69,334	)		(67,178	)		(82,257	)
Total noninterest expense before
segment allocations		105,216			133,420			112,112			111,804			110,342
Segment allocations		3,535			3,241			2,987			2,825			4,678
Total noninterest expense	$	108,751		$	136,661		$	115,099		$	114,629		$	115,020

Other information
Efficiency ratio		97	%		123	%		80	%		105	%		75	%

Warehouse (millions)	$	3,124		$	3,173		$	3,598		$	3,524		$	3,828
Other earning assets (millions)		793			836			865			739			606
Total earning assets (millions)	$	3,917		$	4,009		$	4,463		$	4,263		$	4,434

Escrow balances	$	2,000		$	1,965		$	1,903		$	1,641		$	2,034

Net interest margin		2.07	%		2.06	%		2.25	%		2.42	%		3.10	%

Warehouse Spread		1.24	%		1.18	%		1.44	%		1.77	%		2.06	%

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

*See Note 1 - Financial Glossary

MORTGAGE BANKING
Quarterly, Unaudited

(Thousands)		4Q06			3Q06			2Q06			1Q06			4Q05
ORIGINATION INCOME
Origination Fees	$	63,255		$	65,132		$	77,174		$	67,043		$	79,808
FAS 91 Fee Deferral		(225	)		1,318			1,523			(126	)		4,932
Appraisal, Final Inspection,
Credit Report Fees		6,840			7,119			7,901			6,778			7,574
Total origination fees		69,870			73,569			86,598			73,695			92,314

Secondary Marketing Income:
Prime:
OMSR, SRP		68,373			72,323			90,933			74,603			88,996
Marketing G/L (Trading Gains)		25,897			13,915			37,906			22,281			21,237
Concessions		(33,293	)		(34,233	)		(41,355	)		(34,020	)		(35,803	)
LOCOM		(1,629	)		(288	)		(398	)		665			613
Subtotal Prime		59,348			51,717			87,086			63,529			75,043

Non-Prime:
OMSR, SRP		2,264			3,839			1,226			3,633			4,017
LOCOM		(2,164	)		(1,940	)		1,817			(1,340	)		(1,572	)
Recourse Provision*		(2,513	)		(3,457	)		3,023			(8,134	)		1,575
Subtotal Non-Prime		(2,413	)		(1,558	)		6,066			(5,841	)		4,020
Total Secondary Marketing Fees -
Mortgage		56,935			50,159			93,152			57,688			79,063

FAS 91 Reclassification		(57,575	)		(59,480	)		(69,334	)		(67,178	)		(82,257	)

Total Origination Income	$	69,230		$	64,248		$	110,416		$	64,205		$	89,120

Margins:
Marketing Margin on Deliveries (bps):
Prime:
OMSR, SRP		113			116			129			117			119
Marketing G/L (Trading Gains)		43			22			54			35			28
Concessions		(55	)		(55	)		(59	)		(53	)		(48	)
LOCOM		(3	)		-			(1	)		1			1
Total Prime		98			83			123			100			100
Non-Prime:
OMSR, SRP		118			164			37			83			98
LOCOM		(113	)		(83	)		56			(31	)		(38	)
Recourse Provision*		(131	)		(148	)		93			(186	)		38
Total Non-Prime		(126	)		(67	)		186			(134	)		98

Total Marketing Margin on Deliveries		91			77			126			85			100

*Represents the reclassification from expense to secondary marketing income of expected loss provisions related to the recourse obligation on sales of non-prime loans.

MORTGAGE BANKING
Quarterly, Unaudited

($ in millions)		4Q06			3Q06			2Q06			1Q06			4Q05
KEY ORIGINATION METRICS

Production:
First Lien Production	$	6,417		$	6,351		$	7,482		$	6,865		$	7,991

Breakdown by Product Type:
Government		7	%		6	%		6	%		5	%		4	%
Conventional Fixed		60	%		55	%		55	%		51	%		44	%
Conventional ARM		9	%		13	%		15	%		19	%		19	%
Jumbo Fixed		11	%		10	%		10	%		10	%		14	%
Jumbo ARM		10	%		11	%		11	%		10	%		14	%
Other		1	%		1	%		1	%		1	%		1	%
Non Prime		2	%		4	%		2	%		4	%		4	%

Breakdown by Payment Type:
Fully amortizing		70	%		70	%		69	%		66	%		66	%
Interest Only - Fixed		14	%		10	%		10	%		11	%		8	%
Interest Only - ARM		15	%		18	%		17	%		19	%		22	%
Option ARM's		1	%		2	%		4	%		4	%		4	%

Production Refinanced %		44	%		33	%		33	%		41	%		41	%
Production Purchased %		56	%		67	%		67	%		59	%		59	%

ARMs % (Excluding Gov't ARMS)		21	%		27	%		28	%		33	%		37	%

Total Sales Force		2,440			2,495			2,467			2,609			2,630

Warehouse/Pipeline Balance:
Ending Warehouse Balance	$	2,347		$	2,286		$	2,587		$	2,788		$	2,931
Ending Pipeline Balance (Locked)		3,074			3,384			3,645			3,691			3,119

Loan Sales (Deliveries):
Prime		6,062			6,257			7,066			6,371			7,481
Non-Prime		192			233			325			436			409
Total Loan Sales		6,254			6,490			7,391			6,807			7,890

MORTGAGE BANKING
Quarterly, Unaudited

		4Q06						3Q06						2Q06						1Q06						4Q05
(Thousands)		$		bps				$		bps				$		bps				$		bps				$		bps
SERVICING INCOME
Gross Service Fees	$	99,852			39		$	98,594			40		$	95,043			39		$	93,454			39		$	91,735		��	39
Guarantee Fees		(18,630	)		(7	)		(15,778	)		(7	)		(17,348	)		(7	)		(18,876	)		(8	)		(18,980	)		(8	)
Sub-Service Fee Income		7			-			29			-			71			-			64			-			144			-
Lender Paid MI		(13	)					(24	)		-			(20	)		-			108			-			(168	)		-
Net Service Fees		81,216			32			82,821			33			77,746			32			74,750			31			72,731			31

Early Payoff Interest Expense		(4,791	)		(2	)		(3,718	)		(2	)		(4,324	)		(2	)		(3,838	)		(2	)		(5,164	)		(2	)
Ancillary Fees		7,521			3			7,112			3			6,820			3			6,934			3			6,698			3
Total Service Fees		83,946			33			86,215			34			80,242			33			77,846			32			74,265			32

MSR Asset - Value Changes
Change in MSR Value - Runoff		(66,937	)					(60,326	)					(72,270	)					(58,836	)					(71,669	)
Change in MSR Value - Other than Runoff		10,351						(133,067	)					69,564						95,961						55,684
MSR Hedge Gains/(Losses)		(7,171	)					127,240						(72,104	)					(98,290	)					(32,673	)
Total Net Change MSR Value		(63,757	)					(66,153	)					(74,810	)					(61,165	)					(48,658	)

Trading Asset & Associated Derivatives:
Change in Trading Asset Value		12						(13,628	)					3,044						8,467						3,720
Trading Asset Hedge Gains/(Losses)		(844	)					13,940						(4,438	)					(10,932	)					(5,722	)
Total Trading Asset & Associated Derivatives		(832	)					312						(1,394	)					(2,465	)					(2,002	)

Option Expense on Servicing Hedges		(7,531	)					(4,673	)					(4,765	)					(3,499	)					(3,430	)

Total Servicing Income		11,826						15,701						(727	)					10,717						20,175

KEY SERVICING METRICS - ($ in millions)
Beginning Servicing Portfolio	$	100,246					$	99,304					$	97,303					$	95,284					$	93,589
Additions to portfolio		6,333						6,238						7,332						6,797						7,772
Prepayments		(3,909	)					(3,476	)					(3,725	)					(3,278	)					(4,418	)
Amortization		(687	)					(692	)					(687	)					(688	)					(676	)
Service Release Sales		(613	)					(1,128	)					(919	)					(812	)					(983	)
End. Servicing Portfolio (Owned)	$	101,370					$	100,246					$	99,304					$	97,303					$	95,284

Avg. Servicing Portfolio (Owned)	$	100,811					$	99,484					$	98,342					$	96,147					$	94,388
Average Loans Serviced (#)		633,293						629,897						626,527						620,476						616,649

Product Mix (Average)
Product Mix (%)
GNMA		8	%					8	%					8	%					9	%					9	%
FNMA/FHLMC		64	%					64	%					65	%					65	%					65	%
Private		25	%					25	%					24	%					23	%					22	%
Sub-Total		97	%					97	%					97	%					97	%					96	%
Warehouse		3	%					3	%					3	%					3	%					4	%
Total		100	%					100	%					100	%					100	%					100	%

Other Statistics
(Annualized)
Ancillary Income per Loan	$	47.51					$	45.16					$	43.54					$	44.70					$	43.45
Servicing Cost per Loan	$	49.45					$	49.36					$	50.60					$	53.01					$	51.96

Portfolio Data
(in millions)
Average Servicing Asset **		1,452						1,532						1,503						1,350						1,262
Valuation Reserve (Ending Balance)		-						-						-						-						1
Servicing Book Value (bps)		144						154						153						140						134

Change in MSR Asset /
Average Servicing Asset		18	%					17	%					20	%					18	%					15	%

Run-Off Rate		18	%					17	%					18	%					17	%					22	%

** Includes valuation reserve/MSRs only

CAPITAL MARKETS
Quarterly, Unaudited

(Thousands)		4Q06			3Q06			2Q06			1Q06			4Q05
Net interest income/(expense)	$	764		$	2,900		$	115		$	(722	)	$	(1,074	)
Incremental cost of equity		(4,260	)		(4,437	)		(4,769	)		(4,969	)		(4,856	)
Net interest expense		(3,496	)		(1,537	)		(4,654	)		(5,691	)		(5,930	)
Noninterest income:
Fixed income		46,235			41,503			41,843			50,602			44,397
Other product revenue		49,877			56,997			62,278			45,999			39,991
Total noninterest income		96,112			98,500			104,121			96,601			84,388
Total revenue		92,616			96,963			99,467			90,910			78,458
Noninterest expense		84,082			81,786			83,710			82,613			74,182
Pretax income	$	8,534		$	15,177		$	15,757		$	8,297		$	4,276


Efficiency ratio		91	%		84	%		84	%		91	%		95	%

Trading inventory (millions)	$	2,513		$	2,523		$	2,356		$	2,175		$	2,160
Other earning assets (millions)		1,889			2,231			2,262			2,149			2,285
Total earning assets (millions)	$	4,402		$	4,754		$	4,618		$	4,324		$	4,445


Net interest margin		(.32	)%		(.13	)%		(.40	)%		(.53	)%		(.53	)%

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

CORPORATE
Quarterly, Unaudited

(Thousands)		4Q06			3Q06			2Q06			1Q06			4Q05
Net interest income	$	900		$	280		$	2,358		$	1,006		$	(1,693	)
Net interest income from
deferred compensation		141			107			166			147			140
Total net interest income		1,041			387			2,524			1,153			(1,553	)

Noninterest income		4,825			3,274			2,254			(14,076	)		2,749
Noninterest income from
deferred compensation		8,188			6,838			(5,876	)		5,250			2,372
Total noninterest income		13,013			10,112			(3,622	)		(8,826	)		5,121

Security gain/(loss)		3,002			8,757			2,893			(80,281	)		(181	)
Total revenue		17,056			19,256			1,795			(87,954	)		3,387

Noninterest expense		19,486			22,371			17,979			15,582			19,118
Deferred compensation expense		10,168			8,716			(5,750	)		7,253			3,922
Total noninterest expense		29,654			31,087			12,229			22,835			23,040
Pretax loss	$	(12,598	)	$	(11,831	)	$	(10,434	)	$	(110,789	)	$	(19,653	)

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

See the following table for the impact of deferred compensation plans on each of the segments for the periods presented.

Impact of Deferred
Compensation	4Q06		3Q06		2Q06	1Q06		4Q05

Capital Markets
Revenue	(3,429	)	(3,146	)	3,003	(2,430	)	(547	)
Expense	(5,093	)	(4,490	)	3,157	(3,766	)	(1,577	)

Retail/Commercial Banking
Revenue	(541	)	(273	)	151	(111	)	(94	)
Expense	(678	)	(736	)	109	(544	)	(522	)

Mortgage Banking
Revenue	(4,359	)	(3,526	)	2,556	(2,856	)	(1,871	)
Expense	(4,397	)	(3,490	)	2,484	(2,943	)	(1,823	)

CAPITAL HIGHLIGHTS
Quarterly, Unaudited

(Dollars in millions, except per share amounts)		4Q06			3Q06			2Q06			1Q06			4Q05
Tier 1 Capital (a)	$	2,693.8		$	2,660.2		$	2,612.2		$	2,558.3		$	2,524.2
Tier 2 Capital (a)		1,320.1			1,338.2			1,331.2			1,344.5			1,090.5
Total Capital (a)	$	4,013.9		$	3,998.4		$	3,943.4		$	3,902.8		$	3,614.7

Risk-Adjusted Assets (a)	$	30,833.7		$	31,568.6		$	30,016.3		$	29,166.8		$	29,111.9

Tier 1 Ratio (a)		8.74	%		8.43	%		8.70	%		8.77	%		8.67	%
Tier 2 Ratio (a)		4.28			4.24			4.44			4.61			3.75
Total Capital Ratio (a)		13.02	%		12.67	%		13.14	%		13.38	%		12.42	%

Leverage Ratio (a)		6.94	%		6.80	%		6.86	%		6.86	%		6.76	%

Shareholders' Equity/Assets Ratio (b)		6.49			6.26			6.52			6.43			6.42

Book Value	$	19.61		$	20.06		$	19.59		$	19.36		$	18.46

(a) Current quarter is an estimate

(b) Calculated on period-end balances

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.

First Horizon (FHN) 8-KFourth Quarter 2006 Financial Supplement