First Horizon (FHN) 8-K Regulation FD Disclosure

Exhibit 99.1

SECOND QUARTER 2008

FINANCIAL SUPPLEMENT

If you need further information, please contact:

Dave Miller, Investor Relations

901-523-4162

dwmiller@firsthorizon.com

TABLE OF CONTENTS
					Page
First Horizon National Corporation Segment Structure					3
Performance Highlights					4
Efficiency and Restructuring 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: Origination Income		21
			Mortgage Banking: Origination Metrics		22
			Mortgage Banking: Servicing		23
		Corporate			24
Capital Highlights					25
Asset Quality
		Asset Quality: Consolidated			26
		Analysis of FAS 114 Loans & ORE			28
		Asset Quality: Regional Banking			29
		Asset Quality: National Specialty Lending			30
		Asset Quality: Mortgage Banking & Capital Markets			31
		Asset Quality Highlights: Key Portfolios - Commercial			32
		Asset Quality Highlights: Key Portfolios - Consumer			33
		Asset Quality Process			34
Glossary of Terms					35
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, 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 FHNs 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 TN and nearby markets
-First Tennessee banking franchise and middle market lending are key businesses
-First Horizon Banks included for periods prior to divestiture
-Formerly included in prior "Retail/Commercial Banking" segment
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, structured finance, and investment banking
-Correspondent banking provides credit, depository, and other banking related services to other financial institutions
	-Formerly included in prior "Retail/Commercial Banking" segment
National Specialty Lending
-Primarily portfolio 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
-Formerly included in prior "Retail/Commercial Banking" segment
Mortgage Banking
-Primarily consists of first lien mortgage originations and servicing
-Minimal change compared to prior segment disclosure
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
-Minimal change compared to prior segment disclosure

3

PERFORMANCE HIGHLIGHTS
Summary of Second Quarter 2008 Significant Items (in millions)
Segment			Item	Income Statement	Pre-Tax	Comments
Regional Banking			Loan losses	Provision for loan losses	$(89.4)	Provisioning for deterioration in commercial portfolio and remodeled home equity expectations.
Capital Markets			Loan losses	Provision for loan losses	$(18.5)	Provisioning for deterioration in correspondent banking loans.
National Specialty Lending			Loan losses	Provision for loan losses	$(108.1)	Provisioning reflects deterioration in national construction and home equity portfolios.
			Repurchase reserves	Noninterest income: Revenue from loan sales and securitizations	$(8.7)	Increase in estimated loan repurchase obligation from prior sales of consumer loans due to increased repurchase activity.
			Residual valuation adjustment	Noninterest income: Revenue from loan sales and securitizations	$(7.2)	Reduction in valuation of residual interest in prior securitizations primarily due to credit risk.
Mortgage Banking			Foreclosure reserve	Noninterest income: Mortgage Banking	$(15.9)	Increase in estimated loan repurchase obligations from prior loan sales.
Corporate			Debt repurchases	Noninterest income: other	$12.6	Gains on repurchases of $152.1 million of debt.
			Restructuring, Repositioning & Efficiency Initiatives	Noninterest expense: Various	$(16.3)	Expenses from severance, office closures and Mortgage and First Horizon Bank divestitures.  Detailed further on page 6.
			Restructuring, Repositioning & Efficiency Initiatives	Noninterest income: Various	$(9.7)	Transaction costs for sales of MSR.  Disposition of First Horizon Bank Atlanta branches.  Detailed further on page 6.
(Second Quarter 2008 vs. First Quarter 2008)
Asset Quality
- Provision decreased to $220.0 million in the current quarter compared to $240.0 million in in first quarter 2008
	- Portfolio deterioration in current quarter due to declining economic conditions
	- Continuing commercial portfolio grade deterioration
		- More rapid deterioration of homebuilder finance portfolio in high risk states
	- Consumer portfolios experiencing increased loss severities
		- Home equity loss trends prompted the need for additional reserves given increased loss severities being experienced
- Net charge-offs were 235 annualized basis points of average loans driven by national construction, home equity and C&I portfolios
	- Net charge-offs of $127.7 million in current quarter compared to $99.1 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 388 basis points from 278 basis points reflecting  portfolio deterioration from current economic conditions
	- Total NPAs increased to $876.2 million from $620.9 million primarily from deterioration in national construction portfolios
- Allowance as a percentage of loans ratio increased to 259 basis points from 220 basis points in prior quarter
Capital
- Common stock issuance increased equity by $659.8 million
	- 69 million additional common shares outstanding
- Declared quarterly dividend payable in common stock
- Current ratios significantly benefit from equity issuance (estimated based on period end balances)
	- 7.0% for tangible common equity to tangible assets
	- 10.4% for Tier I
	- 15.0% for Total Capital

4

PERFORMANCE HIGHLIGHTS (continued)

(Second Quarter 2008 vs. First Quarter 2008)
Regional Banking
- Net interest margin remained stable at 4.38% compared to 4.39% in first quarter
	- Reflects improved ability to pass through effects Federal Reserve rate cuts to deposit customers
- Noninterest income increased to $92.5 million from $87.1 million
	- Seasonal increase in fee income, primarily from deposit accounts
- Provision expense in current quarter primarily reflects grade migration in commercial loans and remodeled home equity expectations
- Noninterest expense remained flat at $150.3 million compared to $150.5 million in prior quarter
	- Effects of efficiency initiatives and seasonal decreases in personnel costs offset by increase in unfunded commitment reserve
- Completed disposition of final 9 First Horizon Bank branches in Atlanta
Capital Markets
- Fixed income revenues were $105.0 million in current quarter compared to $152.2 million in prior quarter
	- Continuing strength due to Federal Reserve's rate reductions resulting in a steeper yield curve
	- Decline from prior quarter's record levels was anticipated as Federal Reserve slowed the pace of rate decreases
- Other product revenues increased to $19.6 million from $(18.3) million
	- $36.2 million LOCOM adjustment on trust preferred warehouse recognized in prior quarter
	- Net trust preferred warehouse of $345.3 million transferred to portfolio during current quarter
- Provision increased to $18.5 million from $15.0 million to reflect deterioration of correspondent banking loans
- Decrease in noninterest expense resulted from lower production levels
National Specialty Lending
- Total loans declined to $8.6 billion from $9.1 billion reflecting continuing wind down
	- Produced a sequential decline in net interest income
- Net interest margin increased to 2.40% compared to 2.31% in first quarter
	- Primarily results from wider spreads on consumer loans
- Provision for loan losses continues to reflect deterioration within national construction and home equity portfolios
- Contraction of portfolios will continue since origination activity has been significantly curtailed
- Noninterest income declined sequentially
	- Expense of $8.7 million recognized in current quarter as repurchase reserves were increased
	- Value of residual interests in prior securitizations declined by $7.2 million primarily due to credit risk adjustments
		- Remaining value of $3.8 million
	- Partially offset by first quarter decline in valuation of servicing rights due to interest rate changes
- Noninterest expense increased primarily due to the higher foreclosure losses
Mortgage Banking
- Net effect of adopting new accounting standards negatively affected pre-tax earnings by $7.2 million
	- $42.4 million positive effect on first quarter 2008
- Increased origination income
	- 2% decrease in deliveries and 9% decrease in originations
	- Originations remain strong as lower rates are driving refinance activity
	- Gain (loss) on sale margin improved to 118 basis points from (20) basis points
		- Significantly higher percentage of government loans in current quarter
		- Gains from favorable rate moves at the end of the current quarter
		- LOCOM adjustments of $8.3 million in current quarter compared to $17.0 million in prior quarter
- Hedging results positively impacted earnings by $16.5 million vs. $32.7 million in first quarter
	- Resulted from yield curve steepening at a slower rate in current quarter in comparison to prior quarter
	- Foreclosure reserves expense of $15.9 million in current quarter related to increased repurchase activity
- Net interest income increased in line with increase in warehouse spread
- Servicing runoff stable at $37.1 million for current quarter from $37.4 million in prior quarter
- Noninterest expense remained relatively flat at $149.1 million in current quarter compared to $147.5 million in prior quarter
	- Declines in personnel costs from lower production volumes and seasonality were offset by increase in foreclosure losses
- Provision of $4.0 million in current quarter due to deterioration of loans previously moved to portfolio
- Approximately $330 million of jumbo loans were transferred to the loan portfolio in second quarter
	- Future jumbo originations, represented in current lending commitments only, will also be for the portfolio
		- $7.6 million reserve for unfunded commitments  represents prior value of associated derivative interest rate locks
Taxes
- Approximate $8 million positive quarterly effect from permanent tax credits
- $3.1 million positive pre-tax impact in current quarter from resolution of state tax audits
Corporate Segment
- $12.6 million of gains recognized in current quarter related to repurchases of debt
	- $152.1 million of debt repurchased with maturity dates ranging from January 2009 to February 2011
- Net charges of $26.0 million recognized for restructuring, repositioning and efficiency initiatives (detail on next page)
	- Current quarter included $16.2 million of expenses, including $5.8 million of asset impairments
	- $9.3 million of transaction costs from sale of mortgage servicing rights presented as reduction of Mortgage Banking income
	- $0.4 million of losses related to First Horizon bank branch sales presented in (Losses)/Gains on Divestitures
	- Prior quarter included $21.3 million of net charges for these initiatives
- Prior quarter included $95.9 million improvement in pre-tax earnings from Visa IPO
	- Equity securities gains of $65.9 million for shares redeemed in conjunction with IPO
	- $30.0 million of expense reversals associated with Visa's funding of escrow account for certain Visa litigation matters

5

EFFICIENCY AND RESTRUCTURING INITIATIVES
Unaudited
Charges for Restructuring, Repositioning, and Efficiency
By Income Statement Impact (Thousands, rounded)		2Q08			1Q08			4Q07			3Q07			2Q07
Provision for loan losses	$	-		$	-		$	-		$	-		$	7,700
Noninterest income
Mortgage banking		(9,300	)		(2,700	)		(6,400	)		-			-
Losses/gains on divestitures		(400	)		(1,000	)		15,700			-			-
Noninterest expense
Employee compensation, incentives, and benefits		5,700			7,400			8,400			9,300			8,000
Occupancy		3,400			1,000			5,500			5,100			3,700
Operations services		-			-			400			-			-
Equipment rentals, depreciation, and maintenance		4,200			-			500			800			5,200
All other expense		3,000			9,200			21,100			17,600			14,700
Total Income before income taxes	$	(26,000	)	$	(21,300	)	$	(26,600	)	$	(32,800	)	$	(39,300	)

Expect $35 to $50 million of cumulative changes throughout remainder of 2008, primarily associated with mortgage divestiture.

6

CONSOLIDATED SUMMARY INCOME STATEMENT
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08			2Q07
Net interest income	$	238,895		$	228,092		$	225,987		$	237,804		$	239,432			5	%		*
Noninterest income		400,018			383,130			103,429			203,475			281,313			4	%		42	%
Securities (losses)/gains, net		(972	)		65,946			(10,442	)		-			(1,014	)	NM				NM
Total revenue		637,941			677,168			318,974			441,279			519,731			(6	)%		23	%
Noninterest expense		465,843			438,277			561,559			421,622			457,240			6	%		2	%
Provision		220,000			240,000			156,519			43,352			44,408			(8	)%		395	%
Pretax (loss)/income		(47,902	)		(1,109	)		(399,104	)		(23,695	)		18,083		NM			NM
Benefit for income taxes		(28,821	)		(8,146	)		(146,342	)		(9,330	)		(3,861	)	NM			NM
(Loss)/income from continuing operations		(19,081	)		7,037			(252,762	)		(14,365	)		21,944		NM				NM
Income from discontinued operations, net of tax		-			883			4,137			209			179			NM			NM
Net (loss)/income	$	(19,081	)	$	7,920		$	(248,625	)	$	(14,156	)	$	22,123		NM				NM
Common Stock Data
Diluted EPS from continuing operations	$	(.11	)	$	.06		$	(2.00	)	$	(.11	)	$	.17			NM			NM
Diluted EPS		(.11	)		.06			(1.97	)		(.11	)		.17			NM			NM
Diluted shares		171,680			126,660			126,089			126,058			128,737			36	%		33	%
Period-end shares outstanding		195,751			126,786			126,366			126,388			126,237			54	%		55	%
Dividends declared per share	$	.20		$	.20		$	.45		$	.45		$	.45			-			(56	)%
Key Ratios & Other
Return on average assets		(.21	)%		.09	%		(2.65	)%		(.15	)%		.23	%
Return on average equity		(3.02	)%		1.47	%		(42.52	)%		(2.31	)%		3.57	%
Net interest margin		3.01	%		2.81	%		2.77	%		2.87	%		2.79	%
Tax rate	NM			NM			NM			NM			NM
Efficiency ratio		73.02	%		64.72	%		176.05	%		95.55	%		87.98	%
FTE employees		9,245			9,555			9,941			11,052			11,903			(3	)%		(22	)%
NM - Not meaningful
* Amount is less than one percent

7

CONSOLIDATED INCOME STATEMENT
Quarterly, Unaudited
																	2Q08 Change vs.
(Thousands)			2Q08			1Q08			4Q07			3Q07			2Q07			1Q08			2Q07
Interest income		$	415,485		$	476,443		$	545,136		$	582,735		$	594,903			(13	)%		(30	)%
Less interest expense			176,590			248,351			319,149			344,931			355,471			(29	)%		(50	)%
	Net interest income		238,895			228,092			225,987			237,804			239,432			5	%		*
Provision for loan losses			220,000			240,000			156,519			43,352			44,408			(8	)%		395	%
	Net interest income after
	provision for loan losses		18,895			(11,908	)		69,468			194,452			195,024			(259	)%		(90	)%
Noninterest income:
	Capital markets		122,338			131,457			98,482			63,722			85,054			(7	)%		44	%
	Deposit transactions
	and cash management		46,797			42,553			47,971			44,863			43,079			10	%		9	%
	Mortgage banking  (a) (b) (c) (d)		172,418			158,712			(113,965	)		39,022			71,300			9	%		142	%
	Trust services and investment
	management		8,883			9,109			10,097			9,922			10,628			(2	)%		(16	)%
	Insurance commissions		6,822			8,144			7,529			6,747			7,674			(16	)%		(11	)%
	Revenue from loan sales and      securitizations (e)		(6,984	)		(4,097	)		(171	)		4,774			9,615			70	%		(173	)%
	Securities (losses)/gains, net		(972	)		65,946			(10,442	)		-			(1,014	)	NM				(4	)%
	(Losses)/gains on divestitures (a)		(429	)		(995	)		15,695			-			-			(57	)%	NM
	Other		50,173			38,247			37,791			34,425			53,963			31	%		(7	)%
Total noninterest income			399,046			449,076			92,987			203,475			280,299			(11	)%		42	%
	Adjusted gross income after
	provision for loan losses		417,941			437,168			162,455			397,927			475,323			(4	)%		(12	)%
Noninterest expense:
	Employee compensation,
	incentives and benefits (a) (d)		277,078			287,470			226,905			236,683			258,191			(4	)%		7	%
	Occupancy (a)		30,018			28,591			34,209			34,778			33,402			5	%		(10	)%
	Operations services (a)		19,124			18,964			20,148			18,774			17,457			1	%		10	%
	Equipment rentals, depreciation
	and maintenance (a)		18,268			15,011			16,252			17,270			21,791			22	%		(16	)%
	Communications and courier (d)		11,477			11,004			10,664			10,959			10,746			4	%		7	%
	Amortization of intangible assets		2,182			2,440			2,864			2,647			2,623			(11	)%		(17	)%
	Goodwill impairment		-			-			71,074			13,010			-		NM			NM
	Other (a) (d)		107,696			74,797			179,443			87,501			113,030			44	%		(5	)%
Total noninterest expense			465,843			438,277			561,559			421,622			457,240			6	%		2	%
Pretax (loss)/income			(47,902	)		(1,109	)		(399,104	)		(23,695	)		18,083		NM				(365	)%
	(Benefit) for income taxes		(28,821	)		(8,146	)		(146,342	)		(9,330	)		(3,861	)		254	%		646	%
(Loss)/income from continuing operations		$	(19,081	)		7,037			(252,762	)		(14,365	)		21,944			(371	)%		(187	)%
Income from discontinued operations,
net of tax			-			883			4,137			209			179			(100	)%		(100	)%
Net (loss)/income		$	(19,081	)	$	7,920		$	(248,625	)	$	(14,156	)	$	22,123			(341	)%		(186	)%
* Amount is less than one percent.
NM - Not meaningful
2Q08 Key Impacts
(a)	Includes a portion of net charges for $26.0 million, see Restructuring, Repositioning and Efficiency Initiatives page for further details
(b)	Includes LOCOM and other loan sale adjustments
(c)	Include effects of electing fair value for mortgage warehouse loans
(d)	Includes effect of adopting new accounting standards
(e)	Includes effect of expenses for consumer lending repurchase reserves and changes in value of residual interests in consumer lending securitizations

8

OTHER INCOME AND OTHER EXPENSE
Quarterly, Unaudited
															2Q08 Change vs.
(Thousands)		2Q08		1Q08			4Q07			3Q07			2Q07			1Q08		2Q07
Other Income
Brokerage management fees and
commissions	$	8,690	$	8,413		$	8,747		$	9,189		$	10,263			3	%	(15	)%
Bank owned life insurance		6,343		6,962			6,697			6,260			6,250			(9	)%	1	%
Bankcard income		5,728		5,540			6,221			6,329			6,319			3	%	(9	)%
Other service charges		3,189		3,396			3,357			3,581			3,677			(6	)%	(13	)%
Remittance processing		3,206		3,273			3,450			3,171			3,330			(2	)%	(4	)%
Reinsurance fees		3,320		3,145			2,794			2,418			2,056			6	%	61	%
ATM interchange fees		2,238		2,238			2,224			2,200			2,131			-		5	%
Deferred compensation		1,325		(6,550	)		(1,667	)		526			7,603			NM		(83	)%
Letter of credit		1,274		1,458			1,759			1,864			1,495			(13	)%	(15	)%
Electronic banking fees		1,572		1,618			1,636			1,631			1,639			(3	)%	(4	)%
Check clearing fees		887		862			1,125			1,275			1,284			3	%	(31	)%
Federal flood certifications		1,259		1,523			1,084			1,207			1,383			(17	)%	(9	)%
Other		11,142		6,369			364			(5,226	)		6,533			75	%	71	%
Total	$	50,173	$	38,247		$	37,791		$	34,425		$	53,963			31	%	(7	)%
Other Expense
Legal and professional fees (a)	$	14,030	$	15,022		$	17,629		$	13,532		$	14,130			(7	)%	(1	)%
Computer software  (a)		8,120		7,956			26,185			9,334			9,237			2	%	(12	)%
Advertising and public relations (a)		7,179		9,327			10,297			10,475			11,312			(23	)%	(37	)%
Travel and entertainment  (a)		5,672		5,027			5,829			7,065			7,391			13	%	(23	)%
Low income housing expense		4,815		4,566			6,605			4,483			5,082			5	%	(5	)%
Contract employment  (a)		7,359		5,584			5,202			5,770			5,549			32	%	33	%
Distributions on preferred stock
of subsidiary		2,844		4,061			4,679			4,761			4,701			(30	)%	(40	)%
Foreclosed real estate		10,720		6,362			8,871			1,393			3,492			69	%	207	%
Supplies (a)		2,942		3,020			3,496			3,382			3,430			(3	)%	(14	)%
Loan closing costs (b)		11,718		13,060			1,279			4,857			3,623			(10	)%	223	%
Customer relations		2,544		1,707			2,834			2,605			2,420			49	%	5	%
Other insurance and taxes		2,036		1,758			2,684			1,751			2,003			16	%	2	%
Employee training and dues		1,632		1,398			1,183			1,703			2,028			17	%	(20	)%
Fed services fees		1,941		1,611			1,463			1,540			1,599			20	%	21	%
Complimentary check expense		1,154		1,298			1,206			1,237			1,324			(11	)%	(13	)%
Loan insurance expense		1,198		1,113			1,073			1,123			1,167			8	%	3	%
Bank examination costs		1,054		1,053			1,142			1,141			1,091			*		(3	)%
Deposit insurance premium		3,403		2,827			1,223			615			606			20	%	462	%
Other  (a)		17,335		(11,953	)		76,563			10,734			32,845			NM		(47	)%
Total	$	107,696	$	74,797		$	179,443		$	87,501		$	113,030			44	%	(5	)%
* Amount is less than one percent
NM - Not meaningful
2Q08 Key Impacts
(a)  Includes a portion of net charges for $3.0 million, see Efficiency and Restructuring Initiatives
(b)  Includes effect of electing fair value for mortgage warehouse loans

9

CONSOLIDATED PERIOD-END BALANCE SHEET
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08			2Q07
Assets
Investment securities	$	2,896,928		$	3,034,798		$	3,032,791		$	3,076,360		$	3,374,853			(5	)%		(14	)%
Loans held for sale		2,554,030			3,616,018			3,461,712			2,900,464			3,330,489			(29	)%		(23	)%
Loans held for sale-divestiture (a)		-			207,672			289,878			565,492			-			(100	)%	NM
Loans, net of unearned income		22,225,232			21,932,020			22,103,516			21,973,004			22,382,303			1	%		(1	)%
Federal funds sold and securities
purchased under agreements to resell		1,166,982			898,615			1,089,495			1,096,624			1,121,052			30	%		4	%
Interest bearing deposits with other financial institutions		39,829			46,382			39,422			30,993			58,241			(14	)%		(32	)%
Trading securities		1,473,815			1,553,053			1,768,763			1,734,653			2,291,704			(5	)%		(36	)%
Trading securities-divestiture (a)		89,239			-			-			-			-		NM			NM
Total earning assets		30,446,055			31,288,558			31,785,577			31,377,590			32,558,642			(3	)%		(6	)%
Cash and due from banks		838,376			851,875			1,170,220			936,707			799,428			(2	)%		5	%
Capital markets receivables		994,571			1,680,057			524,419			1,219,720			1,240,456			(41	)%		(20	)%
Mortgage servicing rights, net		903,634			895,923			1,159,820			1,470,589			1,522,966			1	%		(41	)%
Mortgage servicing rights, net-divestiture (a)		235,761			-			-			-			-		NM			NM
Goodwill		192,408			192,408			192,408			267,228			279,825			-			(31	)%
Other intangible assets, net		48,615			52,017			56,907			58,738			61,947			(7	)%		(22	)%
Premises and equipment, net		344,410			382,488			399,305			411,515			438,807			(10	)%		(22	)%
Real estate acquired by foreclosure		141,857			106,018			103,982			75,656			67,499			34	%		110	%
Allowance for loan losses		(575,149	)		(483,203	)		(342,341	)		(236,611	)		(229,919	)		19	%		150	%
Other assets		1,908,795			2,293,045			1,949,308			1,874,497			1,654,433			(17	)%		15	%
Other assets-divestiture (a)		70,628			8,759			15,856			22,623			-			706	%	NM
Total assets	$	35,549,961		$	37,267,945		$	37,015,461		$	37,478,252		$	38,394,084			(5	)%		(7	)%
Liabilities and Shareholders' Equity
Deposits
Savings	$	4,041,352		$	4,217,215		$	3,872,684		$	3,592,732		$	3,520,757			(4	)%		15	%
Other interest-bearing deposits		1,880,678			1,986,556			1,946,933			1,674,624			1,822,076			(5	)%		3	%
Time deposits		2,468,521			2,648,339			2,826,301			2,822,792			2,885,307			(7	)%		(14	)%
Interest bearing deposits-divestiture (a)		-			99,370			189,051			361,368			-			(100	)%	NM
Total interest-bearing core deposits		8,390,551			8,951,480			8,834,969			8,451,516			8,228,140			(6	)%		2	%
Noninterest-bearing deposits		4,453,332			4,995,696			5,026,417			4,928,233			5,516,735			(11	)%		(19	)%
Noninterest-bearing deposits-divestiture (a)		296,632			18,197			28,750			72,404			-		NM			NM
Total core deposits		13,140,515			13,965,373			13,890,136			13,452,153			13,744,875			(6	)%		(4	)%
Certificates of deposit $100,000 and more		1,953,432			2,222,016			3,129,532			5,142,169			8,016,808			(12	)%		(76	)%
Certificates of deposit $100,000 and more-divestiture (a)		-			1,153			12,617			41,037			-			(100	)%	NM
Total deposits		15,093,947			16,188,542			17,032,285			18,635,359			21,761,683			(7	)%		(31	)%
Federal funds purchased and securities
sold under agreements to repurchase		2,620,014			3,678,217			4,829,597			4,039,827			3,841,251			(29	)%		(32	)%
Federal funds purchased and securities
sold under agreements to repurchase-divestiture (a)		-			11,572			20,999			-			-			(100	)%	NM
Trading liabilities		464,225			531,259			556,144			543,060			658,533			(13	)%		(30	)%
Commercial paper and other short-term borrowings		5,998,810			4,753,582			3,422,995			2,396,316			246,815			26	%	NM
Term borrowings		5,783,407			6,060,795			6,027,967			5,980,513			5,828,138			(5	)%		(1	)%
Other collateralized borrowings		767,010			809,273			800,450			820,040			821,966			(5	)%		(7	)%
Total long-term debt		6,550,417			6,870,068			6,828,417			6,800,553			6,650,104			(5	)%		(1	)%
Capital markets payables		868,883			1,688,870			586,358			1,053,349			1,144,029			(49	)%		(24	)%
Other liabilities		959,476			1,136,461			1,305,868			1,253,295			1,332,910			(16	)%		(28	)%
Other liabilities-divestiture (a)		1,466			1,870			1,925			39,389			-			(22	)%	NM
Total liabilities		32,557,238			34,860,441			34,584,588			34,761,148			35,635,325			(7	)%		(9	)%
Preferred stock of subsidiary		295,277			295,277			295,277			295,277			295,277			-			-
Shareholders' Equity
Common stock		122,345			79,242			78,979			78,992			78,898			54	%		55	%
Capital surplus		980,428			362,823			361,826			360,016			352,138			170	%		178	%
Undivided profits		1,646,272			1,704,559			1,742,892			2,048,689			2,120,014			(3	)%		(22	)%
Accumulated other comprehensive loss, net		(51,599	)		(34,397	)		(48,101	)		(65,870	)		(87,568	)		50	%		(41	)%
Total shareholders' equity		2,697,446			2,112,227			2,135,596			2,421,827			2,463,482			28	%		9	%
Total liabilities and shareholders' equity	$	35,549,961		$	37,267,945		$	37,015,461		$	37,478,252		$	38,394,084			(5	)%		(7	)%
* Amount is less than one percent
NM - Not meaningful
(a) Second quarter 2008 associated with the sale of certain mortgage operations, prior periods associated with the sale of First Horizon Bank branches

10

CONSOLIDATED AVERAGE AND PERIOD-END LOANS
Quarterly, Unaudited
												2Q08 Change vs.
(Thousands)			2Q08		1Q08		4Q07		3Q07		2Q07		1Q08		2Q07
Average Loans (Net)
Commercial
	Commercial, financial and industrial	$	7,212,907	$	7,121,890	$	6,957,498	$	7,061,103	$	7,292,380		1	%	(1	)%
	Real estate commercial  (a)		1,401,267		1,347,377		1,301,866		1,363,363		1,260,196		4	%	11	%
	Real estate construction  (b)		2,481,680		2,713,253		2,825,210		2,875,296		2,919,522		(9	)%	(15	)%
	Total commercial loans		11,095,854		11,182,520		11,084,574		11,299,762		11,472,098		(1	)%	(3	)%
Retail
	Real estate residential   (c)		7,878,845		7,774,415		7,605,345		7,601,422		7,854,784		1	%	*
	Real estate construction  (d)		1,666,007		1,909,061		2,096,561		2,144,902		2,095,021		(13	)%	(20	)%
	Other retail		138,242		141,961		144,116		149,714		149,976		(3	)%	(8	)%
	Credit card receivables		193,850		195,081		201,153		194,376		194,732		(1	)%	*
	Real estate loans pledged against
	other collateralized borrowings   (e)		735,828		755,071		779,013		808,247		543,771		(3	)%	35	%
	Total retail loans		10,612,772		10,775,589		10,826,188		10,898,661		10,838,284		(2	)%	(2	)%
	Total loans, net of unearned income	$	21,708,626	$	21,958,109	$	21,910,762	$	22,198,423	$	22,310,382		(1	)%	(3	)%
Period-End Loans (Net)
Commercial
	Commercial, financial and industrial	$	7,717,110	$	7,238,630	$	7,140,087	$	6,978,643	$	7,218,582		7	%	7	%
	Real estate commercial  (a)		1,463,726		1,345,526		1,294,922		1,326,261		1,389,963		9	%	5	%
	Real estate construction  (b)		2,271,533		2,602,968		2,753,475		2,828,545		2,830,856		(13	)%	(20	)%
	Total commercial loans		11,452,369		11,187,124		11,188,484		11,133,449		11,439,401		2	%	*
Retail
	Real estate residential   (c)		8,196,622		7,858,109		7,791,885		7,544,048		7,614,887		4	%	8	%
	Real estate construction  (d)		1,513,845		1,814,863		2,008,289		2,160,593		2,158,775		(17	)%	(30	)%
	Other retail		138,970		138,253		144,019		144,526		149,157		1	%	(7	)%
	Credit card receivables		195,703		191,119		204,812		196,967		194,715		2	%	1	%
	Real estate loans pledged against
	other collateralized borrowings   (e)		727,723		742,552		766,027		793,421		825,368		(2	)%	(12	)%
	Total retail loans		10,772,863		10,744,896		10,915,032		10,839,555		10,942,902		*		(2	)%
	Total loans, net of unearned income	$	22,225,232	$	21,932,020	$	22,103,516	$	21,973,004	$	22,382,303		1	%	(1	)%
* Amount is less than one percent
(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
																	2Q08 Change vs.
(Thousands)		2Q08			1Q08				4Q07			3Q07			2Q07			1Q08			2Q07
Assets:
Earning assets:
Loans, net of unearned income*	$	21,708,626		$	21,958,109			$	21,910,762		$	22,198,423		$	22,310,382			(1	)%		(3	)%
Loans held for sale		3,606,621			3,728,008				3,337,237			3,963,650			4,087,446			(3	)%		(12	)%
Loans held for sale-divestiture (a)		-			248,751				467,424			-			-			(100	)%	NM
Investment securities:
U.S. Treasuries		47,123			43,305				36,062			151,831			156,865			9	%		(70	)%
U.S. government agencies		2,649,651			2,725,948				2,787,078			2,836,619			3,005,463			(3	)%		(12	)%
States and municipalities		31,347			12,847				1,740			1,750			1,769			144	%		1672	%
Other		257,907			232,472				230,808			237,291			232,850			11	%		11	%
Total investment securities		2,986,028			3,014,572				3,055,688			3,227,491			3,396,947			(1	)%		(12	)%
Capital markets securities inventory		1,630,501			1,961,964				1,934,055			1,810,703			2,546,668			(17	)%		(36	)%
Mortgage banking trading securities		387,469			405,579				527,453			545,201			528,457			(4	)%		(27	)%
Mortgage banking trading securities-divestiture (a)		981			-				-			-			-		NM			NM
Other earning assets:
Federal funds sold and securities
purchased under agreements to resell		1,275,548			1,304,707				1,237,957			1,224,193			1,442,951			(2	)%		(12	)%
Interest bearing deposits with other financial institutions		36,573			46,093				28,968			41,118			32,310			(21	)%		13	%
Total other earning assets		1,312,121			1,350,800				1,266,925			1,265,311			1,475,261			(3	)%		(11	)%
Total earning assets		31,632,347			32,667,783				32,499,544			33,010,779			34,345,161			(3	)%		(8	)%
Allowance for loan losses		(529,124	)		(359,600	)			(246,916	)		(236,188	)		(229,157	)		47	%		131	%
Cash and due from banks		697,013			786,693				846,793			788,636			804,816			(11	)%		(13	)%
Capital markets receivables		251,667			297,908				182,358			141,519			165,433			(16	)%		52	%
Premises and equipment, net		373,403			390,291				407,212			435,480			443,428			(4	)%		(16	)%
Other assets		3,712,192			3,367,729				3,540,575			3,613,812			3,540,463			10	%		5	%
Other assets-divestiture (a)		8,603			11,581				20,868			-			-			(26	)%	NM
Total assets	$	36,146,101		$	37,162,385			$	37,250,434		$	37,754,038		$	39,070,144			(3	)%		(7	)%
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest bearing deposits-divestiture (a)	$	30,695		$	127,352			$	292,615		$	-		$	-			(76	)%	NM
Other interest-bearing deposits		1,911,341			1,922,506				1,685,749			1,777,982			1,892,479			(1	)%		1	%
Savings		4,180,739			4,134,308				3,749,222			3,475,981			3,538,198			1	%		18	%
Time deposits		2,530,300			2,763,335				2,850,719			2,913,872			2,874,932			(8	)%		(12	)%
Total interest-bearing core deposits		8,653,075			8,947,501				8,578,305			8,167,835			8,305,609			(3	)%		4	%
Certificates of deposit $100,000 and more		2,022,972			2,696,781				4,464,070			6,802,371			8,271,191			(25	)%		(76	)%
Certificates of deposit $100,000 and more-divestiture (a)		279			4,770				30,499			-			-			(94	)%	NM
Federal funds purchased and securities
sold under agreements to repurchase		3,810,955			5,236,736				4,936,968			4,964,072			4,967,888			(27	)%		(23	)%
Federal funds purchased and securities
sold under agreements to repurchase-divestiture (a)		3,102			16,171				33,370			-			-			(81	)%	NM
Capital markets trading liabilities		768,565			846,369				812,969			773,576			1,054,718			(9	)%		(27	)%
Commercial paper and other short-term
borrowings		5,513,454			3,850,704				2,651,882			1,165,801			560,721			43	%		883	%
Long term debt:
Term borrowings		5,886,694			6,013,433				5,981,215			5,837,370			5,887,063			(2	)%		**
Other collateralized borrowings		792,388			790,811				813,075			807,143			550,604			**			44	%
Total long-term debt		6,679,082			6,804,244				6,794,290			6,644,513			6,437,667			(2	)%		4	%
Total interest-bearing liabilities		27,451,484			28,403,276				28,302,353			28,518,168			29,597,794			(3	)%		(7	)%
Noninterest-bearing deposits		4,619,333			4,743,479				4,838,363			5,096,766			5,304,752			(3	)%		(13	)%
Other noninterest-bearing deposits-divestiture (a)		8,902			21,327				54,928			-			-			(58	)%	NM
Capital markets payables		232,282			292,846				173,351			139,170			182,960			(21	)%		27	%
Other liabilities		995,931			1,234,695		��		1,262,345			1,276,262			1,206,237			(19	)%		(17	)%
Other liabilities-divestiture (a)		1,022			2,335				3,885			-			-			(56	)%	NM
Preferred stock of subsidiary		295,277			295,277				295,277			295,277			295,277			-			-
Shareholders' equity		2,541,870			2,169,150				2,319,932			2,428,395			2,483,124			17	%		2	%
Total liabilities and shareholders' equity	$	36,146,101		$	37,162,385			$	37,250,434		$	37,754,038		$	39,070,144			(3	)%		(7	)%
* Includes loans on nonaccrual status
** Amount is less than one percent
(a) Second quarter 2008 associated with the sale of certain mortgage operations, prior periods associated with the sale of First Horizon Bank branches.

12

CONSOLIDATED AVERAGE BALANCE SHEET: INCOME & EXPENSE
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08			2Q07
Assets:
Earning assets:
Loans, net of unearned income*	$	285,539		$	331,803		$	385,027		$	413,376		$	413,340			(14	)%		(31	)%
Loans held for sale		54,217			58,438			62,249			66,570			65,923			(7	)%		(18	)%
Investment securities:
U.S. Treasuries		249			340			434			1,856			1,853			(27	)%		(87	)%
U.S. government agencies		36,573			37,954			39,027			40,293			42,474			(4	)%		(14	)%
States and municipalities		324			220			4			4			4			47	%	NM
Other		2,159			2,290			2,904			2,838			2,776			(6	)%		(22	)%
Total investment securities		39,305			40,804			42,369			44,991			47,107			(4	)%		(17	)%
Capital markets securities inventory		18,131			22,652			25,261			25,321			34,087			(20	)%		(47	)%
Mortgage banking trading securities		12,120			13,363			16,436			16,647			16,029			(9	)%		(24	)%
Other earning assets:
Federal funds sold and securities
purchased under agreements to resell		6,266			9,341			13,485			15,297			18,142			(33	)%		(65	)%
Interest bearing deposits with other financial institutions		189			357			450			705			410			(47	)%		(54	)%
Total other earning assets		6,455			9,698			13,935			16,002			18,552			(33	)%		(65	)%
Total earning assets/interest income	$	415,767		$	476,758		$	545,277		$	582,907		$	595,038			(13	)%		(30	)%
Allowance for loan losses
Cash and due from banks
Capital markets receivables
Premises and equipment, net
Other assets
Total assets
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Other interest-bearing deposits	$	3,556		$	5,906		$	5,976		$	6,179		$	6,808			(40	)%		(48	)%
Savings		18,362			25,888			30,864			29,140			29,919			(29	)%		(39	)%
Time deposits		25,540			31,502			35,234			34,745			33,555			(19	)%		(24	)%
Total interest-bearing core deposits		47,458			63,296			72,074			70,064			70,282			(25	)%		(32	)%
Certificates of deposit $100,000 and more		17,361			31,069			59,851			92,556			110,630			(44	)%		(84	)%
Federal funds purchased and securities
sold under agreements to repurchase		17,834			38,521			52,635			60,287			61,745			(54	)%		(71	)%
Capital markets trading liabilities		9,400			9,615			10,588			10,295			14,272			(2	)%		(34	)%
Commercial paper and other short-term
borrowings		31,591			31,527			30,229			14,827			7,187			**			340	%
Long term debt:
Term borrowings		47,129			66,303			82,870			85,241			83,529			(29	)%		(44	)%
Other collateralized borrowings		5,817			8,020			10,902			11,661			7,826			(27	)%		(26	)%
Total long-term debt		52,946			74,323			93,772			96,902			91,355			(29	)%		(42	)%
Total interest-bearing liabilities/interest expense	$	176,590		$	248,351		$	319,149		$	344,931		$	355,471			(29	)%		(50	)%
Noninterest-bearing deposits
Capital markets payables
Other liabilities
Preferred stock of subsidiary
Shareholders' equity
Total liabilities and shareholders' equity
Net interest income-tax equivalent basis	$	239,177		$	228,407		$	226,128		$	237,976		$	239,567			5	%		**
Fully taxable equivalent adjustment		(282	)		(315	)		(141	)		(172	)		(135	)		(10	)%		109	%
Net interest income	$	238,895		$	228,092		$	225,987		$	237,804		$	239,432			5	%		**

* Includes loans on nonaccrual status

** Amount is less than one percent.

Income amounts are adjusted to a fully taxable equivalent. Earning assets income is expressed net of unearned income

NM - Not meaningful

13

CONSOLIDATED AVERAGE BALANCE SHEET: YIELDS & RATES
Quarterly, Unaudited
(Thousands)	2Q08		1Q08		4Q07			3Q07		2Q07
Assets:
Earning assets:
Loans, net of unearned income*	5.29	%	6.07	%	6.98	%		7.39	%	7.43	%
Loans held for sale	5.70		5.88		6.54			6.72		6.45
Investment securities:
U.S. Treasuries	2.13		3.15		4.77			4.85		4.74
U.S. government agencies	5.52		5.57		5.60			5.68		5.65
States and municipalities	4.14		6.87		.82			.83		.98
Other	3.35		3.94		5.03			4.78		4.77
Total investment securities	5.27		5.41		5.55			5.57		5.55
Capital markets securities inventory	4.45		4.62		5.22			5.59		5.35
Mortgage banking trading securities	12.48		13.18		12.46			12.21		12.13
Other earning assets:
Federal funds sold and securities
purchased under agreements to resell	1.98		2.88		4.32			4.96		5.04
Interest bearing deposits with other financial institutions	2.08		3.11		6.17			6.80		5.10
Total other earning assets	1.98		2.89		4.36			5.02		5.04
Total earning assets/interest income	5.24	%	5.86	%	6.67	%		7.02	%	6.94	%
Allowance for loan losses
Cash and due from banks
Capital markets receivables
Premises and equipment, net
Other assets
Total assets
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Other interest-bearing deposits	.74	%	1.19	%	1.33	%		1.38	%	1.44	%
Savings	1.76		2.50		3.19			3.33		3.39
Time deposits	4.06		4.55		4.73			4.73		4.68
Total interest-bearing core deposits	2.21		2.85		3.33			3.40		3.39
Certificates of deposit $100,000 and more	3.45		4.63		5.28			5.40		5.36
Federal funds purchased and securities
sold under agreements to repurchase	1.88		2.95		4.20			4.82		4.99
Capital markets trading liabilities	4.92		4.57		5.17			5.28		5.43
Commercial paper and other short-term
borrowings	2.30		3.29		4.52			5.05		5.14
Long term debt:
Term borrowings	3.20		4.41		5.55			5.85		5.68
Other collateralized borrowings	2.94		4.06		5.36			5.78		5.69
Total long-term debt	3.17		4.37		5.52			5.84		5.68
Total interest-bearing liabilities/interest expense	2.58	%	3.51	%	4.49	%		4.81	%	4.81	%
Noninterest-bearing deposits
Capital markets payables
Other liabilities
Other liabilities - divestiture
Preferred stock of subsidiary
Shareholders' equity
Total liabilities and shareholders' equity
Net interest spread	2.66	%	2.35	%	2.18	%		2.21	%	2.13	%
Effect of interest-free sources used to fund
earning assets	.35		.46		.59			.66		.66
Net interest margin	3.01	%	2.81	%	2.77	%		2.87	%	2.79	%

* Includes loans on nonaccrual status

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.

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

14

MORTGAGE SERVICING RIGHTS
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08		2Q07
First Liens
Fair value beginning balance	$	865,855		$	1,122,415		$	1,429,245		$	1,481,727		$	1,500,337			(23	)%	(42	)%
Addition of mortgage servicing rights		100,305			78,871			67,300			97,084			100,550
Reductions due to loan payments		(38,598	)		(37,448	)		(40,930	)		(48,964	)		(62,661	)
Reductions due to sale		(72,271	)		(43,842	)		(96,502	)		-			-
Changes in fair value due to:
Changes in valuation model inputs
or assumptions (a)		255,890			(254,076	)		(236,695	)		(100,602	)		118,048
Reclassification to trading assets		-			-			-			-			(174,547	)
Other changes in fair value		23			(65	)		(3	)		-			-
Fair value ending balance	$	1,111,204		$	865,855		$	1,122,415		$	1,429,245		$	1,481,727			28	%	(25	)%
Second Liens
Fair value beginning balance	$	20,126		$	25,832		$	28,747		$	27,608		$	25,710			(22	)%	(22	)%
Addition of mortgage servicing rights		-			-			-			3,587			3,997
Reductions due to loan payments		(1,737	)		(2,617	)		(2,097	)		(2,559	)		(2,169	)
Changes in fair value due to:
Changes in valuation model inputs
or assumptions (a)		(254	)		(3,089	)		(834	)		32			67
Other changes in fair value		3			-			16			79			3
Fair value ending balance	$	18,138		$	20,126		$	25,832		$	28,747		$	27,608			(10	)%	(34	)%
HELOC
Fair value beginning balance	$	9,942		$	11,573		$	12,597		$	13,631		$	13,994			(14	)%	(29	)%
Addition of mortgage servicing rights		215			887			174			87			791
Reductions due to loan payments		(491	)		(707	)		(736	)		(1,124	)		(1,154	)
Changes in fair value due to:
Changes in valuation model inputs
or assumptions (a)		(230	)		(1,935	)		(462	)		(39	)		-
Other changes in fair value		617			124			-			42			-
Fair value ending balance	$	10,053		$	9,942		$	11,573		$	12,597		$	13,631			1	%	(26	)%
Total Consolidated
Fair value beginning balance	$	895,923		$	1,159,820		$	1,470,589		$	1,522,966		$	1,540,041			(23	)%	(42	)%
Addition of mortgage servicing rights		100,520			79,758			67,474			100,758			105,338
Reductions due to loan payments		(40,826	)		(40,772	)		(43,763	)		(52,647	)		(65,984	)
Reductions due to sale		(72,271	)		(43,842	)		(96,502	)		-			-
Changes in fair value due to:
Changes in valuation model inputs
or assumptions (a)		255,406			(259,100	)		(237,991	)		(100,609	)		118,115
Reclassification to trading assets		-			-			-			-			(174,547	)
Other changes in fair value		643			59			13			121			3
Fair value ending balance	$	1,139,395		$	895,923		$	1,159,820		$	1,470,589		$	1,522,966			27	%	(25	)%

(a) Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates

15

BUSINESS SEGMENT HIGHLIGHTS
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08			2Q07
Regional Banking
Total revenues(a)	$	212,920		$	207,636		$	229,118		$	228,572		$	229,301			3	%		(7	)%
Provision for loan losses		89,371			75,178			15,831			18,523			14,071			19	%		535	%
Noninterest expenses		150,294			150,523			159,880			153,814			161,336			*			(7	)%
Pre-tax (loss)/income		(26,745	)		(18,065	)		53,407			56,235			53,894			(48	)%		NM
(Benefit)/provision for income taxes		(19,799	)		(13,508	)		27,024			19,797			11,826			(47	)%		NM
Net (loss)/income from continuing operations		(6,946	)		(4,557	)		26,383			36,438			42,068			(52	)%	NM
Income from discontinued operations, net of tax		-			883			4,137			209			179			(100	)%		(100	)%
Net (loss)/income	$	(6,946	)	$	(3,674	)	$	30,520		$	36,647		$	42,247			(89	)%		NM
National Specialty Lending
Total revenues(a)	$	39,052		$	55,040		$	54,328		$	62,419		$	71,886			(29	)%		(46	)%
Provision for loan losses		108,106			149,569			139,398			22,807			19,104			(28	)%		466	%
Noninterest expenses		26,675			25,146			31,069			33,624			38,212			6	%		(30	)%
Pre-tax (loss)/income		(95,729	)		(119,675	)		(116,139	)		5,988			14,570			(20	)%	NM
(Benefit)/provision for income taxes		(33,567	)		(46,392	)		(43,857	)		1,811			5,987			(28	)%	NM
Net (loss)/income	$	(62,162	)	$	(73,283	)	$	(72,282	)	$	4,177		$	8,583			15	%	NM
Mortgage Lending
Total revenues(a)	$	222,297		$	198,066		$	(79,826	)	$	69,059		$	103,327			12	%		115	%
Provision for loan losses		4,001			222			46			4			(112	)	NM			NM
Noninterest expenses		149,062			147,543			174,203			108,303			115,461			1	%		29	%
Pre-tax income/(loss)		69,234			50,301			(254,075	)		(39,248	)		(12,022	)		38	%	NM
Provision/(benefit) for income taxes		22,960			18,129			(99,185	)		(13,984	)		(6,854	)		27	%	NM
Net income/(loss)	$	46,274		$	32,172		$	(154,890	)	$	(25,264	)	$	(5,168	)		44	%	NM
Capital Markets
Total revenues(a)	$	143,150		$	153,579		$	119,191		$	78,622		$	106,690			(7	)%		34	%
Provision for loan losses		18,522			15,031			1,244			2,018			3,673			23	%		404	%
Noninterest expenses		100,559			115,728			87,042			73,921			80,480			(13	)%		25	%
Pre-tax income		24,069			22,820			30,905			2,683			22,537			5	%		7	%
Provision for income taxes		8,960			8,437			11,572			900			8,411			6	%		7	%
Net income	$	15,109		$	14,383		$	19,333		$	1,783		$	14,126			5	%		7	%
Corporate
Total revenues(a)	$	20,522		$	62,847		$	(3,837	)	$	2,607		$	8,527			(67	)%		141	%
Provision for loan losses		-			-			-			-			7,672		NM				(100	)%
Noninterest expenses		39,253			(663	)		109,365			51,960			61,751		NM				(36	)%
Pre-tax income/(loss)		(18,731	)		63,510			(113,202	)		(49,353	)		(60,896	)		NM		NM
Provision/(benefit) for income taxes		(7,375	)		25,188			(41,896	)		(17,854	)		(23,231	)		NM		NM
Net income/(loss)	$	(11,356	)	$	38,322		$	(71,306	)	$	(31,499	)	$	(37,665	)	NM			NM
Total Consolidated
Total revenues(a)	$	638,913		$	677,168		$	318,974		$	441,279		$	519,731			(6	)%		23	%
Provision for loan losses		220,000			240,000			156,519			43,352			44,408			(8	)%		395	%
Noninterest expenses		466,815			438,277			561,559			421,622			457,240			6	%		2	%
Pre-tax (loss)/income		(47,902	)		(1,109	)		(399,104	)		(23,695	)		18,083		NM				NM
(Benefit)/provision for income taxes		(28,821	)		(8,146	)		(146,342	)		(9,330	)		(3,861	)	NM			NM
Net income/(loss) from continuing operations		(19,081	)		7,037			(252,762	)		(14,365	)		21,944		NM				NM
Income from discontinued operations, net of tax		-			883			4,137			209			179			(100	)%		(100	)%
Net income/(loss)	$	(19,081	)	$	7,920		$	(248,625	)	$	(14,156	)	$	22,123		NM				NM

(a) Includes noninterest income and net interest income/(expense)

NM - Not meaningful

* Amount is less than one percent

16

REGIONAL BANKING
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08			2Q07
Income Statement
Net interest income	$	120,384		$	120,565		$	133,613		$	136,935		$	137,677			*			(13	)%
Noninterest income		92,536			87,071			95,511			91,644			91,629			6	%		1	%
Securities gains/(losses), net		-			-			1			(1	)		-		NM			NM
Total revenue		212,920			207,636			229,125		$	228,578			229,306			3	%		(7	)%
Total noninterest expense		150,294			150,523			159,882			153,816			161,338			*			(7	)%
Provision		89,371			75,178			15,831			18,523			14,071			19	%		535	%
Pretax (loss)/income	$	(26,745	)	$	(18,065	)	$	53,412		$	56,239		$	53,897			48	%		(150	)%
Efficiency ratio		70.59	%		72.49	%		69.78	%		67.29	%		70.36	%
Balance Sheet (millions)
Average loans	$	10,801		$	10,705		$	10,667		$	11,162		$	11,162			1	%		(3	)%
Other earning assets		242			339			525			35			23			(29	)%		952	%
Total earning assets		11,043			11,044			11,192			11,197			11,185			*			(1	)%
Core deposits		9,970			10,059			9,854			10,153			10,217			(1	)%		(2	)%
Other deposits		1,053			1,160			1,369			1,368			1,265			(9	)%		(17	)%
Deposits - divestiture		37			153			378			-			-			(76	)%	NM
Total deposits		11,060			11,372			11,601			11,521			11,482			(3	)%		(4	)%
Total period end assets	$	12,233		$	12,172		$	12,674		$	12,688		$	12,427			1	%		(2	)%
Net interest margin		4.38	%		4.39	%		4.74	%		4.85	%		4.94	%
Noninterest Income Detail
Deposit transactions & cash mgmt	$	45,404		$	41,230		$	46,648		$	43,631		$	41,901			10	%		8	%
Insurance commissions		7,033			7,854			7,485			6,507			7,890			(10	)%		(11	)%
Trust services & investment mgmt		8,915			9,147			10,137			9,972			10,671			(3	)%		(16	)%
Bankcard Income		4,752			4,491			5,035			5,065			5,027			6	%		(5	)%
Other service charges		3,780			4,037			4,152			4,185			4,724			(6	)%		(20	)%
Miscellaneous revenue		22,652			20,312			22,054			22,284			21,416			12	%		6	%
Total noninterest income	$	92,536		$	87,071		$	95,511		$	91,644		$	91,629			6	%		1	%
Key Statistics
Locations
Full-Service Financial Centers		198			206			216			233			233			(4	)%		(15	)%
First Tennessee		198			197			197			199			199			1	%		(1	)%
First Horizon Bank		-			9			19			34			34		NM			NM
Trust Assets
Total assets (millions)	$	11,291		$	11,681		$	12,300		$	12,954		$	12,954			(3	)%		(13	)%
Total managed assets (millions)		5,373			5,641			5,880			6,645			6,811			(5	)%		(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
																	2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07				1Q08			2Q07
Income Statement
Net interest income
Correspondent Banking	$	12,399		$	12,808		$	11,437		$	12,483		$	13,776				(3	)%		(10	)%
Capital Markets		6,094			6,841			4,389			1,655			(83	)			(11	)%	NM
Total net interest income		18,493			19,649			15,826			14,138			13,693				(6	)%		35	%
Noninterest income:
Fixed income		105,002			152,208			77,126			46,003			48,258				(31	)%		118	%
Other		19,655			(18,278	)		26,239			18,481			44,739			NM				(56	)%
Total noninterest income		124,657			133,930			103,365			64,484			92,997				(7	)%		34	%
Total revenue		143,150			153,579			119,191			78,622			106,690				(7	)%		34	%
Noninterest expense		100,559			115,728			87,042			73,921			80,480				(13	)%		25	%
Provision		18,522			15,031			1,244			2,018			3,673				23	%		404	%
Pretax income	$	24,069		$	22,820		$	30,905		$	2,683		$	22,537				5	%		7	%
Efficiency ratio		70.25	%		75.35	%		73.03	%		94.02	%		75.43	%
Balance Sheet (millions)
Trading inventory	$	1,631		$	1,962		$	1,934		$	1,810		$	2,546				(17	)%		(36	)%
Average Loans (a)		1,491			1,465			1,402			1,291			1,418				2	%		5	%
Other earning assets		1,656			1,728			1,708			1,532			1,685				(4	)%		(2	)%
Total earning assets		4,778			5,155			5,044			4,633			5,649				(7	)%		(15	)%
Total period end assets	$	5,605		$	6,154		$	5,265		$	5,868		$	5,990				(9	)%		(6	)%
Net interest margin:
Correspondent Banking		3.06	%		3.28	%		3.01	%		3.17	%		3.33	%			(7	)%		(8	)%
Capital Markets		.78	%		.77	%		.49	%		.21	%		(.01	)%			1	%	NM
Total Capital Markets		1.56	%		1.53	%		1.24	%		1.21	%		.97	%			2	%		60	%

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
																	2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07				1Q08			2Q07
Income Statement
Net interest income	$	53,555		$	54,389		$	58,698		$	61,218		$	59,433				(2	)%		(10	)%
Noninterest income		(14,503	)		651			(4,377	)		1,195			12,448			NM				NM
Total revenue		39,052			55,040			54,321			62,413			71,881				(29	)%		(46	)%
Total noninterest expense		26,675			25,146			31,067			33,622			38,210				6	%		(30	)%
Provision		108,106			149,569			139,398			22,807			19,104				(28	)%		466	%
Pretax (loss)/income	$	(95,729	)	$	(119,675	)	$	(116,144	)	$	5,984		$	14,567				NM			NM
Efficiency ratio		68.31	%		45.69	%		57.19	%		53.87	%		53.16	%
Balance Sheet (millions)
Income Property	$	380		$	399		$	379		$	542		$	540				(5	)%		(30	)%
Homebuilder Finance		1,042			1,279			1,382			1,260			1,334				(19	)%		(22	)%
One-Time Close Product		1,436			1,740			2,007			2,083			2,053				(17	)%		(30	)%
Permanent Mortgage (a)		194			95			14			8			8				104	%	NM
HELOC and Other Installment Loans		5,901			5,871			5,668			5,452			5,389				1	%		10	%
Average loans		8,953			9,384			9,450			9,345			9,324				(5	)%		(4	)%
Other earning assets		17			21			175			355			319				(19	)%		(95	)%
Total earning assets		8,970			9,405			9,625			9,700			9,643				(5	)%		(7	)%
Total deposits		240			291			353			423			424				(18	)%		(43	)%
Net interest margin		2.40	%		2.33	%		2.42	%		2.50	%		2.47	%			3	%		(3	)%

NM - Not meaningful

* Amount is less than one percent.

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

(a) Includes One-Time Close Loans that have modified into permanent mortgage loans.

19

MORTGAGE BANKING
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08			2Q07
Income Statement
Net interest income	$	31,835		$	30,052		$	22,852		$	26,939		$	28,382			6	%		12	%
Noninterest income
Net origination fees (a)		134,095			84,056			5,008			(17,494	)		67,281			60	%		99	%
Net servicing fees		42,614			69,343			(118,107	)		49,738			(3,496	)		(39	)%	NM
Other fees		13,753			14,615			10,421			9,876			11,160			(6	)%		23	%
Total noninterest income		190,462			168,014			(102,678	)		42,120			74,945			13	%		154	%
Total revenue		222,297			198,066			(79,826	)		69,059			103,327			12	%		115	%
Noninterest expense (b)		149,062			147,543			174,203			108,303			115,461			1	%		29	%
Provision		4,001			222			46			4			(112	)	NM			NM
Pretax income/(loss)	$	69,234		$	50,301		$	(254,075	)	$	(39,248	)	$	(12,022	)		38	%	NM
Efficiency ratio		67.06	%		74.49	%		(218.23	)%		156.83	%		111.74	%
Balance Sheet (millions)
Warehouse	$	3,182		$	3,230		$	2,672		$	3,311		$	3,531			(1	)%		(10	)%
Permanent mortgages (HTM)		432			389			377			379			390			11	%		11	%
Trading securities		372			387			511			524			495			(4	)%		(25	)%
Mortgage servicing rights		974			1,020			1,354			1,465			1,371			(5	)%		(29	)%
Other assets		1,274			1,093			971			947			998			17	%		28	%
Total assets	$	6,234		$	6,119		$	5,885		$	6,626		$	6,785			2	%		(8	)%
Escrow balances	$	1,516		$	1,691		$	1,709		$	1,894		$	2,032			(10	)%		(25	)%
Net interest margin		3.15	%		2.98	%		2.48	%		2.47	%		2.52	%
Warehouse Spread		3.14	%		2.63	%		1.54	%		1.34	%		1.14	%
Noninterest Expense Detail
Commissions & incentives (a)	$	41,369		$	45,956		$	39,359		$	45,112		$	50,660
FAS 91 cost deferral (a)		1,789			764			(3,878	)		6,392			(3,832	)
Other salaries & benefits		39,228			35,700			38,727			49,147			55,408
Total salaries & benefits		82,386			82,420			74,208			100,651			102,236			*			(19	)%
Contract labor & outsourcing		3,654			2,781			1,968			2,941			2,468
Equipment & occupancy		13,513			14,895			14,814			17,177			16,639
Foreclosure provision		5,535			2,395			4,872			(241	)		2,225
Other expenses (a)		43,536			45,115			120,155			44,327			50,603
Total expenses before FAS 91 reclass		148,624			147,606			216,017			164,855			174,171			1	%		(15	)%
FAS 91 reclassification (a)(c)		(4,520	)		(3,962	)		(46,133	)		(61,505	)		(62,996	)
Total noninterest expense before
segment allocations		144,104			143,644			169,884			103,350			111,175
Segment allocations		4,958			3,899			4,319			4,953			4,286
Total noninterest expense	$	149,062		$	147,543		$	174,203		$	108,303		$	115,461			1	%		29	%

NM - Not meaningful

* Amount is less than one percent.

(a) 2Q08 and 1Q08 includes effect of adopting accounting standards, including fair value election for warehouse loans

(b) 4Q07 includes $71.1 million of goodwill impairment

(c) See Glossary of Terms

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

20

MORTGAGE BANKING: ORIGINATION INCOME
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08		2Q07
Origination Income
Origination fees	$	48,555		$	54,636		$	47,789		$	56,042		$	68,609
FAS 91 fee deferral (a)		1,381			-			(4,818	)		5,563			(2,436	)
Appraisal, final inspection,
credit report fees		5,537			5,953			5,387			6,864			7,860
Total origination fees		55,473			60,589			48,358			68,469			74,033			(8	)%	(25	)%
Secondary marketing income
Prime
OMSR, SRP		98,787			77,899			66,443			96,527			98,072
Marketing G/L (Trading Gains)		39,447			(33,243	)		(17,247	)		(57,655	)		13,435
Concessions		(36,016	)		(41,146	)		(26,174	)		(49,551	)		(45,609	)
LOCOM		(4,566	)		(16,582	)		(17,631	)		(11,530	)		(6,880	)
Subtotal Prime		97,652			(13,072	)		5,391			(22,209	)		59,018		NM			65	%
Non-Prime
OMSR, SRP		(6,824	)		(1,482	)		(1,430	)		727			(1,170	)
LOCOM		(458	)		(433	)		(1,178	)		(2,976	)		(1,604	)
Subtotal Non-Prime		(7,282	)		(1,915	)		(2,608	)		(2,249	)		(2,774	)		280	%	163	%
Total Secondary Marketing income		90,370			(14,987	)		2,783			(24,458	)		56,244		NM			61	%
FAS 91 Reclassification (a)		(4,520	)		(3,962	)		(46,133	)		(61,505	)		(62,996	)		14	%	(93	)%
Accounting Standards Adoption (b)		(7,228	)		42,416			-			-			-
Total Origination Income	$	134,095		$	84,056		$	5,008		$	( 17,494	)	$	67,281			60	%	99	%
Margins
Marketing margin on deliveries (bps):
OMSR, SRP		127			104			118			132			132
Marketing G/L (Trading Gains)		55			(45	)		(31	)		(78	)		18
Concessions		(50	)		(56	)		(48	)		(67	)		(62	)
LOCOM		(7	)		(23	)		(34	)		(20	)		(12	)
Total Marketing Margin on Deliveries		125			(20	)		5			(33	)		76

NM - Not meaningful

(a) 1Q08 decrease due to effects of fair value election for warehouse loans.

(b) Net effect of adopting SFAS 157, SFAS 159, and SAB 109 in 2Q08 and 1Q08.

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

21

MORTGAGE BANKING: ORIGINATION METRICS
Quarterly, Unaudited
																2Q08 Change vs.
($ in millions)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08		2Q07
Production
First lien production	$	6,826		$	7,510		$	6,308		$	6,672		$	8,092			(9	)%	(16	)%
Breakdown by Product Type
Prime
Conventional Fixed		53	%		65	%		63	%		58	%		56	%
Conventional ARM		1	%		7	%		3	%		5	%		3	%
Jumbo Fixed		2	%		2	%		6	%		7	%		9	%
Jumbo ARM		-			2	%		3	%		6	%		8	%
Alt A		-			2	%		6	%		12	%		14	%
Government		42	%		21	%		17	%		9	%		7	%
Non Prime		-			-			-			-			1	%
Other		2	%		1	%		2	%		3	%		2	%
Breakdown by Payment Type
Fully amortizing		97	%		92	%		89	%		78	%		71	%
Interest only - fixed		2	%		3	%		7	%		13	%		18	%
Interest only - ARM		1	%		5	%		4	%		9	%		11	%
Option ARM's		-			-			-			-			-
Production Refinanced %		48	%		64	%		47	%		31	%		38	%
Production Purchased %		52	%		36	%		53	%		69	%		62	%
ARMs % (Excluding Gov't ARMS)		1	%		9	%		6	%		13	%		15	%
Sales Force
Total Sales Force		1,394			1,565			1,696			2,124			2,508
Warehouse/Pipeline
Ending Warehouse Balance	$	2,433		$	3,130		$	2,971		$	2,083		$	2,950			(22	)%	(18	)%
Ending Pipeline Balance (Locked)		1,913			5,293			3,363			4,088			4,288			(64	)%	(55	)%
Loan Sales (Deliveries)
Prime		7,247			7,410			5,504			7,398			7,302			(2	)%	(1	)%
Non-Prime		-			-			-			1			55		NM			(100	)%
Total Loan Sales	$	7,247		$	7,410		$	5,504		$	7,399		$	7,357			(2	)%	(1	)%

Definitions:
Prime:	Mortgages made to borrowers who typically have good credit history, full documentation, and standard structures;
	"A" market conventional loans have limited credit and other risks.
Alt-A & GSE Expanded Approval:  Resembles prime mortgages but lack full documentation or have non-standard structures.
	They have more potential risks than prime, but less than non-prime mortgages.
Non-Prime:	Mortgage loans made to borrowers who typically have derogatory information in their credit history;
	non-prime loans are also made to borrowers w/ acceptable credit history but have other non-standard loan features.
Government:	FHA/VA loans that are eligible for GNMA securitizations and government guarantees.
NM - Not meaningful
* Amount is less than one percent.

22

MORTGAGE BANKING: SERVICING
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08			2Q07
Servicing Income
Gross Service Fees	$	74,941		$	88,891		$	90,153		$	90,694		$	90,282
Guarantee Fees		(16,762	)		(18,791	)		(19,775	)		(19,312	)		(18,874	)
Sub-Service Fee Income		504			243			244			1			11
Lender Paid MI		(3	)		(4	)		(21	)		(9	)		(20	)
Net Service Fees		58,680			70,339			70,601			71,374			71,399			(17	)%		(18	)%
Early Payoff Interest Expense		(4,477	)		(5,446	)		(3,626	)		(3,409	)		(5,036	)
Ancillary Fees		8,991			9,214			9,192			8,696			7,509
Total Service Fees		63,194			74,107			76,167			76,661			73,872			(15	)%		(14	)%
Change in MSR Value - Runoff		(37,079	)		(37,449	)		(40,930	)		(48,963	)		(62,661	)		(1	)%		(41	)%
Net hedging results:
Change in MSR Value - Other than Runoff**		237,816			(255,485	)		(234,998	)		(102,887	)		115,739
MSR Hedge (Losses)/Gains		(219,454	)		280,935			119,651			126,742			(116,955	)
Change in Trading Asset Value**		83,543			(74,136	)		(73,496	)		(24,046	)		28,003
Trading Asset Hedge (Losses)/Gains		(78,832	)		86,322			59,022			29,343			(35,790	)
Option Expense on Servicing Hedges		(6,574	)		(4,950	)		(23,523	)		(7,112	)		(5,704	)
Total net hedging results		16,499			32,686			(153,344	)		22,040			(14,707	)		(50	)%	NM
Total Servicing Income	$	42,614		$	69,344		$	( 118,107	)	$	49,738		$	( 3,496	)		(39	)%	NM
Key Servicing Metrics (millions)
Beginning Servicing Portfolio	$	99,022		$	103,709		$	108,401		$	105,652		$	102,822
Additions to portfolio		6,991			7,650			6,399			6,484			7,778
Prepayments		(2,811	)		(4,144	)		(2,931	)		(2,829	)		(3,944	)
Amortization		(672	)		(675	)		(725	)		(707	)		(708	)
Service Release Sales		(76	)		(69	)		(166	)		(199	)		(296	)
Bulk Sale		(4,069	)		(7,449	)		(7,269	)		-			-
Ending Servicing Portfolio (Owned)	$	98,385		$	99,022		$	103,709		$	108,401		$	105,652			(1	)%		(7	)%
Avg. Servicing Portfolio (Owned)	$	95,124		$	103,794		$	107,259		$	107,073		$	104,208			(8	)%		(9	)%
Average Loans Serviced (#)		547,828			618,505			632,482			652,479			643,314			(11	)%		(15	)%
Portfolio Product Mix (Average)
GNMA		10	%		8	%		8	%		7	%		8	%
FNMA/FHLMC		63	%		64	%		65	%		65	%		64	%
Private		24	%		25	%		24	%		25	%		25	%
Sub-Total		97	%		97	%		97	%		97	%		97	%
Warehouse		3	%		3	%		3	%		3	%		3	%
Total		100	%		100	%		100	%		100	%		100	%
Other Portfolio Statistics
Net Service Fees - Annualized (bps)		25			27			26			27			27
Total Service Fees - Annualized (bps)		27			29			28			29			28
Ancillary Income per Loan (Annualized)	$	65.65		$	59.59		$	58.13		$	53.31		$	46.68			10	%		41	%
Servicing Cost per Loan (Annualized)	$	61.22		$	56.39		$	50.56		$	48.15		$	49.51			9	%		24	%
Average Servicing Asset (millions)***		973			1,019			1,353			1,465			1,371
Servicing Book Value (bps)		102			98			126			137			132
90+  Delinquency Rate, excluding foreclosures		2.08	%		1.73	%		1.48	%		1.18	%		.96	%
Change in MSR Asset /
Average Servicing Asset		8	%		5	%		46	%		7	%		19	%
Run-Off Rate - Annualized		14	%		18	%		14	%		13	%		18	%

NM - Not meaningful

* Amount is less than one percent.

** 4Q07 includes a portion of the $135 million valuation adjustment

*** Includes valuation reserve/MSRs only

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

23

CORPORATE
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08			2Q07
Income Statement
Net interest income/(expense)	$	14,771		$	3,558		$	(4,795	)	$	(1,224	)	$	454			315	%	NM
Net interest expense from
deferred compensation		(143	)		(121	)		(207	)		(202	)		(207	)		18	%		(31	)%
Total net interest income/(expense)		14,628			3,437			(5,002	)		(1,426	)		247			326	%	NM
Noninterest income		5,541			14			13,275			3,506			1,691		NM				228	%
Noninterest income from
deferred compensation		1,325			(6,550	)		(1,667	)		526			7,603		NM				(83	)%
Total noninterest income		6,866			(6,536	)		11,608			4,032			9,294		NM				(26	)%
Securities (losses)/gains, net		(972	)		65,946			(10,443	)		1			(1,014	)		(101	)%		(4	)%
Total revenue		20,522			62,847			(3,837	)		2,607			8,527			(67	)%		141	%
Noninterest expense		36,797			7,414			110,753			51,345			51,921			396	%		(29	)%
Deferred compensation expense		2,456			(8,077	)		(1,388	)		615			9,830		NM				(75	)%
Total noninterest expense		39,253			(663	)		109,365			51,960			61,751		NM				(36	)%
Provision		-			-			-			-			7,672			-			(100	)%
Pretax (loss)/income	$	(18,731	)	$	63,510		$	(113,202	)	$	(49,353	)	$	(60,896	)		(129	)%		(69	)%
Balance Sheet (millions)
Total earning assets		2,974			3,001			2,986			3,163			3,341			(1	)%		(11	)%
Net interest margin		1.98	%		.46	%		(.66	)%		(.18	)%		.03	%

NM - Not meaningful

* Amount is less than one percent.

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

24

CAPITAL HIGHLIGHTS
Quarterly, Unaudited
																	2Q08 Change vs.
(Dollars in millions, except per share amounts)		2Q08			1Q08			4Q07			3Q07			2Q07				1Q08		2Q07
Tier 1 Capital (a)	$	3,034.7		$	2,443.9		$	2,459.5		$	2,666.8		$	2,711.3				24	%	12	%
Tier 2 Capital (a)		1,346.3			1,421.0			1,400.5			1,321.4			1,316.2				(5	)%	2	%
Total Capital (a)	$	4,381.0		$	3,864.9		$	3,860.0		$	3,988.2		$	4,027.5				13	%	9	%
Risk-Adjusted Assets (a)	$	29,275.4		$	29,709.3		$	30,271.9		$	31,041.9		$	31,224.1				(1	)%	(6	)%
Tier 1 Ratio (a)		10.37	%		8.23	%		8.12	%		8.59	%		8.68	%
Tier 2 Ratio (a)		4.59			4.78			4.63			4.26			4.22
Total Capital Ratio (a)		14.96	%		13.01	%		12.75	%		12.85	%		12.90	%
Leverage Ratio (a)		8.45	%		6.62	%		6.64	%		7.12	%		7.00	%
Shareholders' Equity/Assets Ratio (b)		7.59			5.67			5.77			6.46			6.42
Tangible Equity/RWA (a)		8.34			6.17			6.16			6.75			6.86
Tangible Common Equity/Tangible Assets		6.96			5.04			5.13			5.64			5.58
Tangible Book Value	$	12.52		$	14.67		$	14.86		$	16.51		$	16.73
Book Value		13.74			16.59			16.83			19.08			19.43

NM - Not meaningful

* Amount is less than one percent.

(a)  Current quarter is an estimate

(b)  Calculated on period-end balances

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

25

ASSET QUALITY: CONSOLIDATED
Quarterly, Unaudited
																2Q08 Change vs.
(Thousands)		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08		2Q07
Allowance for Loan Losses Walk-Forward
Beginning Reserve	$	483,203		$	342,341		$	236,611		$	229,919		$	220,806			41	%	119	%
Provision		220,000			240,000			156,519			43,352			44,408			(8	)%	395	%
Divestitures/acquisitions/transfers		(382	)		-			4			(5,276	)		(12,326	)	NM			(97	)%
Charge-offs		(131,385	)		(101,756	)		(54,891	)		(35,858	)		(26,493	)		29	%	396	%
Recoveries		3,713			2,618			4,098			4,474			3,524			42	%	5	%
Ending Balance	$	575,149		$	483,203		$	342,341		$	236,611		$	229,919			19	%	150	%
Reserve for off-balance sheet commitments		22,303			11,786			10,726			9,002			10,494			89	%	113	%
Total allowance for loan losses plus reserve	$	597,452		$	494,989		$	353,067		$	245,613		$	240,413			21	%	149	%
Allowance for Loan Losses
Regional Banking	$	240,507		$	184,472		$	139,150		$	135,736		$	137,237			30	%	75	%
Capital Markets		42,745			24,338			13,522			15,072			15,738			76	%	172	%
National Specialty Lending		287,212			273,127			188,550			84,787			75,941			5	%	278	%
Mortgage Banking		4,685			1,266			1,119			1,016			1,003			270	%	367	%
Total allowance for loan losses	$	575,149		$	483,203		$	342,341		$	236,611		$	229,919			19	%	150	%
Non-Performing Assets
Regional Banking
Nonperforming loans	$	115,264		$	81,244		$	30,608		$	37,102		$	20,692			42	%	457	%
Foreclosed real estate		37,594			38,019			35,026			27,214			27,289			(1	)%	38	%
Total Regional Banking		152,858			119,263			65,634			64,316			47,981			28	%	219	%
Capital Markets
Nonperforming loans		41,527			13,030			8,970			10,051			11,921			219	%	248	%
Foreclosed real estate		600			600			810			810			810			*		(26	)%
Total Capital Markets		42,127			13,630			9,780			10,861			12,731			209	%	231	%
National Specialty Lending
Nonperforming loans		582,523			433,285			243,711			142,645			95,411			34	%	511	%
Foreclosed real estate		45,384			29,680			34,120			18,030			14,276			53	%	218	%
Total National Specialty Lending		627,907			462,965			277,831			160,675			109,687			36	%	472	%
Mortgage Banking
Nonperforming loans - including held for sale (i)		30,704			9,693			23,797			18,508			12,484			217	%	146	%
Foreclosed real estate		22,542			15,373			15,385			13,992			11,214			47	%	101	%
Total Mortgage Banking		53,246			25,066			39,182			32,500			23,698			112	%	125	%
Total nonperforming assets	$	876,138		$	620,924		$	392,427		$	268,352		$	194,097			41	%	351	%
Net Charge-Offs
Regional Banking	$	33,337		$	29,942		$	12,421		$	14,748		$	12,772			11	%	161	%
Capital Markets		114			4,215			2,794			2,684			2,304			(97	)%	(95	)%
National Specialty Lending		93,640			64,906			35,635			13,961			8,026			44	%	1067	%
Mortgage Banking		581			75			(57	)		(9	)		(133	)		675	%	(537	)%
Total net charge-offs	$	127,672		$	99,138		$	50,793		$	31,384		$	22,969			29	%	456	%
Consolidated Key Ratios
NPL % (a)		3.42	%		2.41	%		1.28	%		.86	%		.57	%
NPA % (b)		3.88			2.78			1.66			1.13			.81
Net charge-offs % (c)		2.35			1.81			.93			.57			.41
Allowance / Loans		2.59			2.20			1.55			1.08			1.03
Allowance to loans excluding insured loans		2.68			2.26			1.62			1.12			1.07
Allowance / NPL (d)		.76	x		.92	x		1.21	x		1.25	x		1.80	x
Allowance / NPA (e)		.66	x		.79	x		.93	x		.95	x		1.27	x
Allowance / Charge-offs (f)		1.13	x		1.22	x		1.68	x		1.88	x		2.50	x
Other
Loans past due 90 days or more (g)	$	157,277		$	300,185		$	251,509		$	206,660		$	171,027			(48	)%	(8	)%
Guaranteed portion (g)		64,696			223,572			190,899			158,780			130,858			(71	)%	(51	)%
Foreclosed real estate from GNMA loans		35,737			22,346			18,642			15,610			13,910			60	%	157	%
Period-end loans, net of unearned income (millions)	$	22,225		$	21,932		$	22,104		$	21,973		$	22,382			1	%	(1	)%
Insured loans		739			809			913			928			987			(9	)%	(25	)%
Total loans excluding insured loans	$	21,486		$	21,123		$	21,191		$	21,045		$	21,395			2	%	*
Off-balance sheet commitments (millions) (h)	$	6,444		$	6,826		$	6,929		$	7,106		$	7,202			(6	)%	(11	)%

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

NM - Not meaningful

* Amount is less than one percent

(a)  Ratio is nonperforming loans in the loan portfolio to total loans

(b)  Ratio is nonperforming assets related to the loan portfolio to total loans plus foreclosed real estate and other assets

(c)  Ratio is annualized net charge-offs to average total loans

(d)  Ratio is allowance to nonperforming loans in the loan portfolio

(e)  Ratio is allowance to nonperforming assets related to the loan portfolio

(f)   Ratio is allowance to annualized net charge-offs

(g)  Includes loans held for sale.

(h) Amount of off-balance sheet commitments for which a reserve has been provided.

(i) 2Q 2008 includes $20,788 of loans held-to-maturity.

26

ASSET QUALITY: CONSOLIDATED
Quarterly, Unaudited
																2Q08 Change vs.
		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08		2Q07
Key Portfolio Details
Commercial (C&I & Other)
Period-end loans ($ millions)	$	7,721		$	7,225		$	6,969		$	7,189		$	7,162			7	%	8	%
30+ Delinq. %		1.46	%		.93	%		.50	%		.41	%		.66	%
NPL %		1.20			.64			.24			.33			.31
Charge-offs % (qtr. annualized)		.84			.83			.20			.57			.45
Allowance / Loans %		1.90	%		1.59	%
Allowance / Charge-offs		2.46	x		2.31	x
Income CRE (Income-producing Commercial Real Estate)
Period-end loans ($ millions)	$	2,039		$	1,982		$	1,948		$	1,970		$	1,921			3	%	6	%
30+ Delinq. %		1.43	%		.57	%		1.96	%		.86	%		.38	%
NPL %		3.54			2.01			.27			.06			.06
Charge-offs % (qtr. annualized)		.63			1.94			.13			.12			.04
Allowance / Loans %		2.89	%		2.47	%
Allowance / Charge-offs		4.82	x		1.28	x
Residential CRE (Homebuilder and Condominium Construction)
Period-end loans ($ millions)	$	1,739		$	1,980		$	2,093		$	2,211		$	2,271			(12	)%	(23	)%
30+ Delinq. %		6.36	%		2.73	%		3.56	%		1.25	%		1.96	%
NPL %		16.65			12.07			6.43			3.93			1.67
Charge-offs % (qtr. annualized)		6.23			5.93			3.82			.51			.29
Allowance / Loans %		5.26	%		3.64	%
Allowance / Charge-offs		.76	x		.58	x
Consumer Real Estate (Home Equity Installment and HELOC)
Period-end loans ($ millions)	$	7,909		$	7,964		$	8,182		$	7,648		$	8,064			(1	)%	(2	)%
30+ Delinq. %		1.27	%		1.55	%		1.43	%		1.25	%		1.01	%
NPL %		.09			.11			.09			.09			.09
Charge-offs % (qtr. annualized)		1.78			.93			.62			.37			.37
Allowance / Loans %		1.70	%		1.19	%
Allowance / Charge-offs		0.95	x		1.28	x
OTC (Consumer Residential Construction Loans)
Period-end loans ($ millions)	$	1,522		$	1,815		$	2,008		$	2,160		$	2,157			(16	)%	(29	)%
30+ Delinq. %		2.69	%		2.67	%		2.50	%		1.91	%		1.08	%
NPL %		17.61			11.01			5.68			3.21			2.60
Charge-offs % (qtr. annualized)		9.90			4.63			2.18			1.16			.68
Allowance / Loans %		7.75	%		6.49	%
Allowance / Charge-offs		0.78	x		1.33	x
Permanent Mortgage
Period-end loans ($ millions)	$	964		$	647		$	562		$	459		$	475			49	%	103	%
30+ Delinq. %		6.36	%		7.73	%		5.59	%		1.29	%		1.29	%
NPL %		3.16			-			-			-			-
Charge-offs % (qtr. annualized)		1.15			.41			.55			.47			.40
Allowance / Loans %		1.06	%		.20	%
Allowance / Charge-offs		1.08	x		1.75	x
Other Consumer and Credit Card
Period-end loans ($ millions)	$	331		$	319		$	342		$	336		$	332			4	%	*
30+ Delinq. %		2.11	%		2.37	%		2.17	%		2.19	%		1.96	%
NPL %		-			-			-			-			-
Charge-offs % (qtr. annualized)		3.29			5.14	%		2.45	%		2.05	%		2.19	%
Allowance / Loans %		5.44	%		4.58	%
Allowance / Charge-offs		1.66	x		.89	x

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

* Amount is less than one percent

27

ANALYSIS OF FAS 114 LOANS & ORE
Unaudited
Commercial Portfolio
Reserves		Reserves	Balances	%
	FAS 114 Impaired Loans w/ Reserves	$5.4	$38.5	14.03%
	FAS 114 Impaired Loans w/o Reserves	$0.0	$334.0	0.00%
	All Other Loans	$291.4	$11,079.9	2.63%
	Total	$296.8	$11,452.4	2.59%
NRV Assessment of FAS 114 Impaired Assets w/ no Reserves
		#	Appraised Value	Legal Balance	Cumulative C/O	Book Balance	Book Bal / Appraised Val
	FAS114 Relationships with No Reserves	113	$536.7	$424.8	$90.7	$334.0	62.2%
Inventory
	ORE
	Beginning ORE	$83.6
	- Dispositions	$12.9
	+ Additions	$35.3
	Ending ORE	$106.1

28

ASSET QUALITY: REGIONAL BANKING
Quarterly, Unaudited
																2Q08 Change vs.
		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08		2Q07
Total Regional Banking
Period-end loans ($ millions)	$	11,037		$	10,803		$	10,631		$	11,161		$	11,085			2	%	*
30+ Delinq. %		1.50	%		1.23	%		1.16	%		.73	%		.81	%
NPL %		1.04			.75			.29			.33			.19
Charge-offs % (qtr. annualized)		1.23			1.16			.50			.51			.50
Allowance / Loans %		2.18	%		1.71	%		1.31	%		1.22	%		1.24	%
Allowance / Charge-offs		1.80	x		1.54	x		2.80	x		2.30	x		2.69	x
Key Portfolio Details
Commercial (C&I & Other)
Period-end loans ($ millions)	$	6,107		$	6,134		$	5,940		$	6,264		$	6,197			*		(1	)%
30+ Delinq. %		1.40	%		.98	%		.50	%		.41	%		.72	%
NPL %		.92			.62			.30			.28			.29
Charge-offs % (qtr. annualized)		1.03			.75			.31			.67			.53
Allowance / Loans %		1.92	%		1.59	%
Allowance / Charge-offs		1.98	x		2.29	x
Income CRE (Income-producing Commercial Real Estate)
Period-end loans ($ millions)	$	1,484		$	1,365		$	1,320		$	1,350		$	1,346			9	%	10	%
30+ Delinq. %		.99	%		.52	%		2.60	%		.91	%		.28	%
NPL %		1.60			1.42			.04			.08			.08
Charge-offs % (qtr. annualized)		.46			2.57			.04			.07			.08
Allowance / Loans %		2.80	%		2.35	%
Allowance / Charge-offs		6.68	x		.93	x
Residential CRE (Homebuilder and Condominium Construction)
Period-end loans ($ millions)	$	528		$	526		$	570		$	622		$	628			*		(16	)%
30+ Delinq. %		5.43	%		2.61	%		2.10	%		.59	%		.40	%
NPL %		6.68			4.68			2.14			2.98			.29
Charge-offs % (qtr. annualized)		2.02			2.30			2.30			.02			.19
Allowance / Loans %		5.61	%		3.92	%
Allowance / Charge-offs		2.93	x		1.65	x
Consumer Real Estate (Home Equity Installment and HELOC)
Period-end loans ($ millions)	$	2,614		$	2,486		$	2,491		$	2,616		$	2,605			5	%	*
30+ Delinq. %		1.22	%		1.83	%		1.70	%		1.33	%		1.32	%
Charge-offs % (qtr. annualized)		1.50			.76			.64			.40			.59
Allowance / Loans %		1.36	%		.70	%
Allowance / Charge-offs		.90	x		.92	x
Other Consumer and Credit Card
Period-end loans ($ millions)	$	304		$	293		$	310		$	309		$	309			4	%	(2	)%
30+ Delinq. %		1.71	%		1.89	%		1.77	%		1.82	%		1.63	%
Charge-offs % (qtr. annualized)		2.37			4.69			1.71			1.53			1.74
Allowance / Loans %		5.55	%		4.43	%
Allowance / Charge-offs		2.34	x		.95	x

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

* Amount is less than one percent

29

ASSET QUALITY: NATIONAL SPECIALTY LENDING
Quarterly, Unaudited
																	2Q08 Change vs.
		2Q08			1Q08			4Q07			3Q07			2Q07				1Q08		2Q07
Total National Specialty Lending
Period-end loans ($ millions)	$	8,622		$	9,114		$	9,554		$	9,079		$	9,509				(5	)%	(9	)%
30+ Delinq. %		2.67	%		1.85	%		2.02	%		1.38	%		1.21	%
NPL %		6.76			4.75			2.55			1.57			1.00
Charge-offs % (qtr. annualized)		4.18			2.80			1.50			.61			.35
Allowance / Loans %		3.33	%		3.00	%		1.97	%		.93	%		.80	%
Allowance / Charge-offs		0.77	x		1.05	x		1.32	x		1.52	x		2.37	x
Key Portfolio Details
Income CRE (Income-producing Commercial Real Estate)
Period-end loans ($ millions)	$	395		$	428		$	393		$	376		$	349				(8	)%	13	%
30+ Delinq. %		.80	%		.55	%		.76	%		1.37	%		.42	%
NPL %		12.15			4.65			1.18			-			-
Charge-offs % (qtr. annualized)		1.43			.87			-			.49			-
Allowance / Loans %		2.63	%		3.07	%
Allowance / Charge-offs		1.72	x		3.67	x
Residential CRE (Homebuilder and Condominium Construction)
Period-end loans ($ millions)	$	1,133		$	1,363		$	1,431		$	1,479		$	1,512				(17	)%	(25	)%
30+ Delinq. %		6.62	%		2.78	%		4.28	%		1.13	%		2.76	%
NPL %		22.02			15.36			7.80			4.18			2.00
Charge-offs % (qtr. annualized)		8.18			7.45			4.01			.63			.16
Allowance / Loans %		4.90	%		3.53	%
Allowance / Charge-offs		.50	x		.46	x
Consumer Real Estate (Home Equity Installment and HELOC)
Period-end loans ($ millions)	$	5,295		$	5,478		$	5,691		$	5,032		$	5,459				(3	)%	(3	)%
30+ Delinq. %		1.30	%		1.44	%		1.33	%		1.14	%		.89	%
NPL %		.13			.12			.09			.09			.10
Charge-offs % (qtr. annualized)		1.91			1.02			.62			.34			.28
Allowance / Loans %		1.84	%		1.43	%
Allowance / Charge-offs		0.96	x		1.41	x
OTC (Consumer Residential Construction Loans)
Period-end loans ($ millions)	$	1,522		$	1,815		$	2,008		$	2,160		$	2,157				(16	)%	(29	)%
30+ Delinq. %		2.69	%		2.67	%		2.50	%		1.91	%		1.08	%
NPL %		17.61			11.01			5.68			3.21			2.60
Charge-offs % (qtr. annualized)		9.90			4.63			2.18			1.16			.68
Allowance / Loans %		7.75	%		6.49	%
Allowance / Charge-offs		0.78	x		1.33	x
Permanent Mortgage
Period-end loans ($ millions)	$	249			n/a			n/a			n/a			n/a				-		-
30+ Delinq. %		16.43	%		n/a			n/a			n/a			n/a
NPL %		7.14			n/a			n/a			n/a			n/a
Charge-offs % (qtr. annualized)		-			n/a			n/a			n/a			n/a
Allowance / Loans %		2.38	%		n/a
Allowance / Charge-offs		-			n/a
Other Consumer
Period-end loans ($ millions)	$	28		$	29		$	32		$	32		$	30				(3	)%	(7	)%
30+ Delinq. %		6.39	%		6.90	%		6.00	%		5.56	%		4.89	%
NPL %		-			-			-			-			-
Charge-offs % (qtr. annualized)		13.26			9.13			9.61			6.91			6.20
Allowance / Loans %		4.06	%		5.46	%
Allowance / Charge-offs		.31	x		.60	x

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

30

ASSET QUALITY: MORTGAGE BANKING & CAPITAL MARKETS
Quarterly, Unaudited
																2Q08 Change vs.
		2Q08			1Q08			4Q07			3Q07			2Q07			1Q08		2Q07
Total Mortgage Banking
Period-end loans ($ millions)	$	715		$	647		$	562		$	459		$	475			11	%	51	%
30+ Delinq. %		2.88	%		7.73	%		5.59	%		1.29	%		1.29	%
Allowance / Loans %		.66	%		.20	%		.20	%		.22	%		.21	%
Total Capital Markets
Period-end loans ($ millions)	$	1,851		$	1,368		$	1,356		$	1,274		$	1,315			35	%	41	%
30+ Delinq. %		2.44	%		.82	%		.99	%		.56	%		.38	%
NPL %		2.24			.95			.66			.79			.91
Charge-offs % (qtr. annualized)		.03			1.23			.86			.85			.49
Allowance / Loans %		2.31	%		1.78	%		1.00	%		1.18	%		1.20	%
Allowance / Charge-offs		93.74	x		1.44	x		1.21	x		1.40	x		1.71	x

31

ASSET QUALITY HIGHLIGHTS: KEY PORTFOLIOS - COMMERCIAL
Unaudited
C&I Portfolio: $7.7 Billion (35% 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: $1.7 Billion (8% of Total Loans)		Top 10 States
			% OS	% NPL
	- Loans to residential builders and developers	TN	20.00%	5.30%
	- Performance under pressure from housing market (oversupply & lack of mortgage availability)	FL	12.20%	46.80%
	- Most severe market conditions in Florida, California, Virginia/DC, Texas, Arizona, and Colorado	WA	10.10%	5.20%
	- Condominium construction balances small ($207 million) but individual commitments tend to be larger	CA	7.80%	24.10%
	- Managing existing relationships (shrinking business into 2008)	NC	4.80%	4.20%
	- Devoting additional resources to manage problem loans	VA	4.60%	20.50%
	- Ceased originations for national CRE business in January: wind-down portfolio	TX	4.30%	14.00%
		MD	4.30%	3.90%
		CO	4.00%	8.30%
		AZ	3.60%	11.80%
		As  of  06/30/08
Income CRE Portfolio: $2.0 Billion (9% of Total Loans)		Top 10 States
			% OS	% NPL
	- Traditional commercial real estate construction and mini-permanent loans	TN	40.90%	1.50%
	- Two-thirds managed by Regional Banking segment	NC	10.20%	0.00%
	- One-third in national CRE business: wind-down portfolio	FL	7.80%	15.50%
	- Performance showing spillover impact from housing market	GA	6.00%	1.60%
		WA	4.10%	0.00%
		MS	3.70%	0.30%
		SC	3.40%	0.00%
		TX	3.30%	14.50%
		AZ	2.70%	0.00%
		CA	2.10%	18.30%
		As  of  06/30/08

32

ASSET QUALITY HIGHLIGHTS: KEY PORTFOLIOS - CONSUMER
Unaudited
Consumer Real Estate (primarily Home Equity) Portfolio: $7.9 Billion (36% of Total Loans)
- Performance continues to show deterioration in Q2 primarily related to areas								Top 10 States
with significant home price depreciation, however, delinquency trends have   improved compared to Q1.									% OS	Del. %	C/O %
- Geographically diverse								TN	27%	1.26%	.93%
- Top States (TN= 27%, CA = 14%, WA = 4%, MD = 4%, VA = 4%, FL = 3%)								CA	14%	1.25%	1.70%
- Strong borrower quality								WA	4%	.48%	.40%
- 733 avg. portfolio origination FICO; 731 avg. portfolio FICO (refreshed)								MD	4%	1.12%	1.40%
- Good collateral position								VA	4%	1.51%	6.19%
- High LTV loans managed through whole loan insurance								FL	3%	2.47%	4.73%
-26% 1st lien and 74% second lien								GA	3%	1.42%	2.34%
- 85% of uninsured portfolio <90 CLTV								AZ	2%	1.28%	2.76%
- 15% of uninsured portfolio is HLTV, 64% of which (or 9.5%) have FICO >700								PA	2%	1.39%	1.02%
- No longer originating loans >89.9% CLTV								NJ	2%	1.30%	1.44%
- Good borrower capacity (35% avg. DTI)								As  of  06/30/08
- Primarily retail-sourced (85% retail)
- Mix of older vintage loans								Retail vs. Wholesale Originations
- 54% originated prior to 2006									% OS	Del. %	C/O %
								Retail	84.80%	1.08%	1.49%
								Wholesale	12.70%	2.41%	3.05%
								Other	2.50%	2.43%	2.28%
								As  of  06/30/08
								Portfolio Breakdown by LTV and FICO
									<=80%	80% - 90.0%	>90%
								>=740	31.1%	13.4%	5.4%
								720-739	7.1%	4.5%	2.1%
								700-719	7.2%	4.5%	2.0%
								660-699	8.1%	4.1%	3.4%
								620-659	2.7%	1.5%	1.4%
								<620	0.9%	0.3%	0.4%
								*excludes whole loan insurance
								As  of  06/30/08
	Balance	Origination Characteristics					QTD	YTD
Vintage	%	CLTV	FICO	% Broker *	% TN	% 1st lien	NCO's %	NCO's %
pre-2002	7%	76%	715	17%	51%	37%	2.53%	1.91%
2003	10%	73%	729	13%	39%	49%	0.66%	0.47%
2004	15%	79%	728	21%	26%	30%	1.57%	1.14%
2005	22%	80%	731	20%	20%	17%	3.05%	2.49%
2006	19%	77%	734	6%	26%	18%	2.11%	1.96%
2007	21%	78%	741	15%	22%	20%	0.82%	0.55%
2008	6%	77%	748	16%	25%	46%	0.00%	0.00%
Total		78%	733	15%	27%	26%	1.71%	1.38%
* Correspondent and Wholesale
One-Time Close (OTC) Portfolio: $1.5 Billion (7% of Total Loans)								Top 10 States
									% OS	% NPL
	- Construction-to-perm loans with short duration							CA	23%	24%
	- Performance under pressure from housing market, borrower stress							TX	14%	6%
	and lack of product salability in the secondary market							UT	9%	8%
	- Actively identifying and remediating problem accounts							WA	8%	2%
	- Devoting additional resources to manage problem loans							ID	7%	15%
	- Ceased originations for national OTC lending: wind-down portfolio							FL	6%	19%
								AZ	5%	8%
								OR	4%	2%
								VA	2%	2%
								MD	2%	1%
								As  of  06/30/08

33

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 conducted quarterly by senior credit officers to provide independent 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, RMs prepare monthly Watch List updates for review and discussion by more senior Line and Credit officers.  This oversight brings consistent grading and allows timely identification of loans that need to be further downgraded or placed on non-accrual.
	Classified & Non-Accruals
	When a loan becomes Classified, the asset generally transfers to the specialists in our Loan Rehab and Recovery group. Accounts receive expert workout attention; new appraisals are generally ordered.
	Loans are placed on non-accrual 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
	All classified non-accrual loans over $1 million are assessed for impairment in accordance with FAS-114.  Although we occasionally use the Discounted Cash Flow approach, most non-accrual assets are viewed as collateral dependent and assessed using a Fair Value of Collateral approach.
	Fair Value estimates start with appraised values, normally 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 non-accrual, we charge off the full difference between book value and our most likely estimate of the asset’s net realizable value. Possible guarantor support is not factored into the impairment estimates for collateral dependent loans.
One-Time Close (OTC) Loans
	Monthly portfolio reviews conducted with line managers and credit officers.  We examine the inherent risk in credits based on factors such as draw inactivity and borrower conditions, often recognizing problems prior to delinquency.  In addition, all OTC loans that reach 90 days delinquent 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 charged down to 85% of appraised value when they reach 180 days past due, and to 78% of value when they are taken into OREO.
	Reserve levels established based on portfolio modeling.
Home Equity Loans & Lines
	Loans are classified Substandard at 90 days delinquent. No later than 180 days delinquent, we assess our collateral position. If value does not support foreclosure, balances are charged off and other avenues of recovery are pursued. If value supports foreclosure, the loan is charged down to realizable value and is placed on non-accrual. When collateral is taken to OREO, the loan is further written down to between 60% and 85% of appraised value depending on the loan amount.
	Reserve levels set through the use of several models that look at historical losses, cumulative vintage performance, and  roll rates.

34

GLOSSARY OF TERMS

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 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. 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.

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.

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.

35

1

First Horizon National Corporation

Second Quarter 2008 Earnings

July 15, 2008

2

■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 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.

3

Financial Highlights: Second Quarter 2008

1Pretax, pre-provision is a non-GAAP number and is pretax income less provision

■Earnings per share of $(0.11)

■Net Income of $(19) million

■Solid core operating performance with pre-tax, pre-provision income1 of $172 million

■Provision of $220 million reflects $92 million of additional reserves

■Period-end tangible book value of $12.52 at June 30, 2008

§  Ceased originating all construction and consumer loans outside

      regional banking footprint

§  National Specialty Lending segment loans contracted by $400 million

Strategic Actions Overview

Winding Down
National Lending

Proactively Managing
Problem Loans

Strong Regional
Banking Franchise

Liquidating

National Mortgage

§Agreement to sell our national mortgage platform to MetLife

§Contracted to sell $35B of servicing (MetLife and 3 other transactions)

§Expect mortgage assets to decline $3-$4B further through year-end

§Writing most non-performing loans down to net realizable values

§Increased reserves/loans to 2.59%

§2008 outlook for net loan losses remains within expected range of
$385-$485 million

§Completed divestiture of First Horizon bank branches in Atlanta

§Awarded #2 JD Power ranking in retail banking satisfaction

§Gaining customer market share across TN

Bolstering Capital
Position

§Issued $690 million in common equity

§Replaced quarterly cash dividend with stock

§Reduced balance sheet by $1.7B in 2Q08; ~$4B further contraction
expected by year-end 2008

Diversified Capital
Markets

§Fixed income benefiting from favorable environment

§Trust preferred warehouse loans transferred to HTM, no incremental
LOCOM

5

GA

AL

MS

AR

MO

KY

NC

SC

TENNESSEE

Source:Internal analysis, Claritas, FDIC, third party surveys from Market Solutions.

■Actively reducing wholesale funding, including wholesale deposits

■FDIC deposit share expected to decline reflecting ~$5.6B reduction in wholesale and public funding
due to exit of national real estate businesses

■First Tennessee’s estimated adjusted 2Q07 TN FDIC market share of 15% (down from 20%)

■Estimated adjusted 2Q07 Mid-South (Shelby County) FDIC market share of 44% (down from 58%)

§Share of households and businesses in major markets up over last year

Customer Market Share Shows Continued Growth

6

■Improve capital ratios and reduce balance sheet risk

■Manage asset quality issues aggressively

■Identify problem loans and recognize losses

■Use appropriate workout resources

■Complete sale of national mortgage business and reduce remaining servicing assets

■Wind-down national lending portfolios

■Continue to implement/identify efficiency and productivity initiatives

■Maintain focus on building a strong regional financial services company

Priorities for 2008

7

Asset Quality

8

Asset Quality Overview

■Net charge-offs totaled $128 million

■$6 million impact from change in loss recognition on legal/bankruptcy accounts in home equity

■$4 million impact from focused efforts in Florida OTC

■Reserves increased by $92 million to 2.59% of total loans

■National Specialty Lending reserves increased to 3.33% of loans

■Downward grade migration of commercial loans

■Continued higher loss severities in home equity, despite favorable delinquency trends

■NPLs increased to 3.4% of loans

■New inflows stable in 2Q08 vs. 1Q08

■Continued aggressive loss recognition: charge-down to net realizable values vs. reserve

■2008 charge-off outlook remains within $385 to $485 million range

9

National Portfolios Driving Majority of Problem Assets

Other2

HE & HELOC

Commercial

(C&I & Other)1

Residential CRE1

Income CRE1

$7.7bn

$1.6bn

$0.6bn

$2.6bn

$1.1bn

National

HE & HELOC

National

Residential CRE

National

Income CRE

National

OTC

$1.5bn

$0.4bn

$1.1bn

$5.3bn

Loans at 6/30/08
(Total $22.2 Billion)

■National Specialty Lending segment
represents 39% of loans / 77% of
NPLs

■Aggressively managing challenges

■Targeted problem asset identification
processes

■Proactive loss recognition

■Increased remediation resources
(more than tripled professional staff)

■Focused on reserve adequacy

1 Includes loans in Regional Banking and Capital Markets segments

2Includes all other loans not allocated to a segment on this page

Other

National

$0.3bn

10

One-Time Close1 - - Performance Overview

1OTC loans are consumer construction to perm loans with short duration

2Loans remained in balance sheet of National Specialty Lending segment.

OTC Construction Loans

$1,400

$1,500

$1,600

$1,700

$1,800

$1,900

$2,000

$2,100

4Q07

1Q08

2Q08

■2Q08 losses in-line with expectations

■Problem loans concentrated in higher
risk markets

■Approximately $200mm of OTC loans
modified into permanent loans in
2Q082

■By year end 2008, OTC construction
balances should decline to less than
$1B

■Ongoing monthly portfolio reviews

11

2008

6%

2006

19%

2005

22%

2007

21%

Portfolio Characteristics

Geographic Distribution

<=2004

32%

Channel Mix

Vintage Profile

1Broker includes wholesale and correspondent

Balance

$2.1bn

$5.8bn

$7.9bn

Original FICO

730

735

733

Original CLTV

70%

81%

78%

Full Doc

72%

70%

70%

Owner Occupied

91%

98%

97%

HELOCs

$0.6bn

$3.8bn

$4.4bn

Weighted Avg.

HELOC Utilization

45%

53%

52%

WA

4%

Other

35%

TN

27%

CA

14%

MD

4%

VA

4%

FL

3%

GA

3%

AZ

2%

PA

2%

NJ 2%

Retail

85%

Broker

1

15%

Home Equity - Differentiated Portfolio Characteristics

12

Home Equity - Delinquency & Severity Trends

30-59 Day Delinquency

60-89 Day Delinquency

90+ Day Delinquency

Loss Severity

0.27%

0.48%

93%

0.52%

0.68%

0.33%

0.67%

$0

$10

$20

$30

$40

$50

$60

$0

$10

$20

$30

$40

$50

$60

$0

$10

$20

$30

$40

$50

$60

20%

40%

60%

80%

100%

2Q07

3Q07

4Q07

1Q08

2Q08

Regional Banking

National Specialty

13

§Expect residential CRE portfolio to shrink to ~$1.5 billion by year-end 2008

§2Q08 losses in-line with expectations

1Annualized

2Q07

3Q07

4Q07

1Q08

2Q08

Total Balance

$2.3 bn

$2.2 bn

$2.1 bn

$2.0 bn

$1.7 bn

National Balance

$1.5 bn

$1.5 bn

$1.4 bn

$1.4 bn

$1.1 bn

Total Commitment

$3.5 bn

$3.4 bn

$3.2 bn

$2.8 bn

$2.4 bn

% Funded

65%

65%

66%

70%

70%

30+ Delinquency %

1.96%

1.25%

3.56%

2.73%

6.36%

NPL %

1.67%

3.93%

6.43%

12.07%

16.65%

Charge-offs %

1

0.29%

0.51%

3.82%

5.93%

6.23%

Residential CRE - Performance Overview

14

Geographic Concentration

§Geographically diverse portfolio with 20% in Tennessee

§Performance remains under pressure in higher-risk national markets

§Discontinued national originations 1Q08, portfolios in wind-down mode

§Condo balances reduced ($207mm at 2Q08)

§Managing existing relationships in footprint (shrinking business through 2008)

Reserve Coverage

($ Millions)

1Q08

2Q08

% Change

Total Balances

$1,980

$1,739

-12%

FAS-5 Balances

$1,722

$1,495

-13%

FAS-114 Balances

$258

$244

-5%

Reserves

$72

$92

28%

Reserves/Loans

3.64%

5.26%

Reserves/Non FAS-114 Loans

4.18%

6.28%

CA

8%

AZ

4%

CO

4%

MD

4%

VA

5%

NC

5%

TX

4%

WA

10%

FL

12%

TN

20%

Other

24%

Residential CRE - Performance Overview

15

C & I and Income CRE Summary

§2Q08 losses in-line with expectations

§Impacted by broader economic deterioration

§Increased reserves over past two quarters

§Increased risk grade training, portfolio reviews, and mandated re-grading

§Continued economic reserving factors

16

0

100

200

300

400

500

600

Appraised

Value

Pre-Charge

Down Balance

Cumulative

Charge Down

Book Balance

(6/30/08)

Problem Loans Written Down to Net Realizable Value

FAS 114 Charge-Downs

FAS 114 Loan Reserves

537

425

334

21%

write-down

(91)

38% below

appraised

value

Reserves /

FAS114 Impaired Loans w/o

Reserves

$0

$334

0.00%

FAS114 Impaired Loans w/

Reserves

$5

$39

14.03%

Other Commercial Loans

$292

$11,080

2.63%

Total

$297

$11,452

2.59%

■All classified non-accrual loans over $1mm are assessed for impairment in
accordance with FAS-114

■Loans typically charged down to net realizable value, rather than holding reserves

17

§Prior expectations and current outlook assume continued slow economic conditions
and continued home price declines into 2009

§2008 charge-off outlook remains within previously communicated $385 to $485
million range

Expectations and Risks Summary

1Source: First Horizon public disclosure: 8-K, 4/28/08 and Analyst Packet, 5/7/2008

2Other includes permanent mortgage, other consumer and credit card

Balance

Allowance

Portfolio

at 6/30/08

($bn)

at 6/30/08

($mm)

1Q08

(Actual)

2Q08

(Actual)

Low End

High End

Current Outlook

(Range)

Residential CRE

$1.7

$92

$29

$30

$99

$129

In

One-Time Close

1.5

118

22

38

112

162

In

Home Equity

7.9

132

19

36

79

99

Moderately Above

Commercial

7.7

146

15

15

60

60

In

Income CRE

2.0

60

10

3

20

20

In

Other

2

1.4

27

4

6

14

14

Moderately Above

Total

$22.2

$575

$99

$128

$384

$484

In Range

($mm)

Expectations ($mm)

1

2008 Charge-Offs

Net Charge-Offs

18

Financial Results

19

1Pretax, pre-provision is a non-GAAP number and is pretax income less provision

2Estimated capital ratios at 6/30/08

($ Millions)

2Q07

1Q08

2Q08

NII

239

$

228

$

239

$

Fee income

281

383

400

Revenue before sec. G/(L)

521

611

639

Securities G/(L)

(1)

66

(1)

Total revenue

520

677

638

Noninterest expense

(457)

(438)

(466)

Pretax pre-provision

1

62

239

172

Provision

(44)

(240)

(220)

Pretax income

18

(1)

(48)

Taxes

4

8

29

Disc. ops.

0

1

-

Net income/(loss)

22

$

8

$

(19)

$

Diluted shares

129

127

172

Diluted EPS

0.17

$

0.06

$

(0.11)

$

Consolidated Financial Results

■Revenue, before securities gains, up 5%
linked quarter

■Improvement in NII

■Higher fee income

■NIM up 20 bps linked quarter to 3.01%

■Provision down linked quarter to $220mm

■Period-end shares increased to $196mm

■Capital ratios improved significantly2

■TCE/TA = 7.0%

■Tier 1 = 10.4%

■Period-end tangible book value of $12.52

20

2Q08

Pre-tax Impact

Restructuring, repositioning, & efficiency related initiatives

Employee & other costs (mortgage, national specialty, FH Bank)

(16.3)

Servicing portfolio repositioning and other disposition costs

(9.7)

Other

Repurchase of debt

12.6

State tax audits resolution

3.1

Increase in mortgage foreclosure reserve

(15.9)

Repurchase reserves (home equity / mortgage)

(8.7)

Write-down of HELOC residual

(7.2)

Other Significant Items

21

Consolidated Net Interest Margin

1Includes divestiture balances.Mortgage I/O assets included in Trading Securities.Mortgage hedge assets included in Other

Period-End Assets

Expected Changes

($ Billions)

4Q07

1Q08

2Q08

In 2H08

Total loans

$22.1

$21.9

$22.2

$(0.8 - 1.2)

Loans HFS

1

3.8

3.8

2.6

(2.0 - 2.2)

Trading securities

1

1.8

1.6

1.6

(0.2 - 0.3)

MSR

1

1.2

0.9

1.1

(0.3 - 0.5)

Other

1

2.79%

2.87%

2.77%

2.81%

3.01%

2.50%

2.75%

3.00%

3.25%

2Q07

3Q07

4Q07

1Q08

2Q08

Further Balance Sheet Reductions Expected

■Lower wholesale borrowing costs

■Reductions in national businesses

■Additional free funding benefit

■Fewer interest reversals on new
non-accrual construction loans

■Minimal margin compression in
Regional Bank

22

§Capital ratios improved significantly in 2Q081

§Ratios expected to build further through end
of 2008

§All other things being equal, $4B of balance
sheet shrinkage would improve TCE/TA ratio
by 90 bps

1Current quarter is an estimate

2Broker estimates as of July 11, 2008 includes Fox Pitt, Merrill Lynch, Janney Montgomery, Stern Agee.

3TCE/TA of 5% is a benchmark, rather than a regulatory minimum.

Summary

Pro-Forma Assumptions

§Q3-Q4 pre-tax pre-provision earnings of
$310.3mm based on median broker
estimates2

§Dividend paid in stock

§Asset reduction assumed to be $4B (70%
risk-weighting)

§35% tax rate

§Illustrates excess capital to regulatory
minimums

Regulatory

3

1

Excess Capital to

Tier 1 RBC

6.0%

8.2%

10.4%

11.7%

$1,510

Total Capital

10.0%

13.0%

15.0%

16.7%

$1,790

TCE/TA

5.0%

5.0%

7.0%

8.0%

$960

Tangible Book Value Per Share

$14.67

$12.52

$12.50

12/31/2008 Proforma Assuming

Capital Position Strengthened

23

1Pretax, pre-provision is a non-GAAP number and is pretax income less provision

($ Millions)

2Q07

1Q08

2Q08

NII

138

$

121

$

120

$

Deposit fees / cash mgmt

42

41

45

Other fees

50

46

47

Fee income

92

87

93

Total revenue

229

208

213

Noninterest expense

(161)

(151)

(150)

Pretax pre-provision

1

68

57

63

Provision

(14)

(75)

(89)

Pretax income

54

$

(18)

$

(27)

$

Balance Sheet (average)

Average loans

11,162

10,705

10,801

Core Deposits

10,217

10,059

9,970

Total deposits (excl. divest.)

11,482

11,219

11,023

NIM

4.94%

4.39%

4.38%

Segment Results: Regional Banking

■Revenue up 3% linked quarter

■Refocus driving continued customer growth

■Targeted marketing investments

■New branches in key TN-area metros

■Deposit fees income up 8% over 2Q07

■NIM steadied in 2Q08

■Better competitive environment

■Targeted deposit rate adjustments

■Expenses down 7% linked quarter & annually

■Efficiency efforts

■First Horizon Bank divestitures

■Pretax pre-provision income increased 10%
sequentially to $63mm

■Elevated provision drove pretax loss of
$(27)mm

■Commercial loan grade migration

■Reserves increased to 2.20% of loans

24

1Pretax, pre-provision is a non-GAAP number and is pretax income less provision

($ Millions)

2Q07

1Q08

2Q08

NII

14

$

20

$

18

$

Fixed Income

48

152

105

Other fees

45

(18)

20

Fee income

93

134

125

Total revenue

107

154

143

Noninterest expense

(80)

(116)

(101)

Pretax pre-provision

1

26

38

43

Provision

(4)

(15)

(19)

Pretax income

23

$

23

$

24

$

Balance Sheet (average)

Trading inventory

2,546

1,962

1,631

Loans

1,418

1,465

1,491

Other earning assets

1,685

1,728

1,656

Total earning assets

5,649

5,155

4,778

Segment Results: Capital Markets

■Fixed income sales remained strong, although
down from 1Q08 record levels

■Other Product revenues increased linked quarter

■Primarily due to trust preferred warehouse valuation
adjustments in 1Q08

■Transferred all of the trust preferred warehouse
to HTM

■$340 million net balance

■Continued limited investor demand

■~40 individual bank and insurance issuer loans

■Geographically diverse

■Attractive yields

■Valuation allowance of ~10%

■Managing correspondent banking credit portfolio

■Relationship-based approach

■Loans of $1.3 billion, down 6% from last year

25

1Other includes mortgage hedging assets

2HTM-Held to Maturity

($ Millions)

2Q07

1Q08

2Q08

NII

28

$

30

$

32

$

Net origination fees

67

84

134

Net servicing fees

(3)

69

43

Other fees

11

15

14

Fee income

75

168

190

Total revenue

103

198

222

Noninterest expense

(115)

(148)

(149)

Provision

(0)

(0)

(4)

Pretax income

(12)

$

50

$

69

$

Balance Sheet

(average)

Warehouse

3,531

3,230

3,182

Permanent mortgages

390

389

432

Trading securities

495

387

372

MSR

1,371

1,020

974

Other

1

998

1,093

1,274

Total assets, period-end

6,314

6,066

5,703

($ Millions)

Origination

Servicing

NII

24

$

8

$

Fees

Revenue

162

60

Expense

(131)

(18)

Provision

(4)

-

Pretax

27

$

42

$

Pre-Tax Income by Activity

(2Q08 Estimated)

Segment Results: Mortgage Banking

■Gain-on-Sale margin of 118 bps, up from
(20) bps last quarter

■Higher mix of government loans (~40%)

■Originations of $6.8 billion as low rates
continue to drive refinances

■MSR hedging resulted in a positive $16mm

26

■Proactively addressing asset quality challenges

■Identifying, reserving for, and charging down problem loans

■Expectations for losses in 2008 remain within the range of prior expectations

■Pre-tax, pre-provision1 earnings of $172 million

■Core businesses remain strong: Regional Banking and Capital Markets

■Divesting national mortgage business, reducing its balance sheet usage

■Winding down national lending portfolios

■Implementing efficiency and productivity initiatives

■Improving capital position and reducing balance sheet risk

■TCE/TA estimated at 7.0%, Tier 1 at 10.4%

■Assets expected to contract approximately $4 billion further by year-end 2008

1Pretax, pre-provision is a non-GAAP number and is pretax income less provision

Summary