Loans | Note 4 – Loans The following table provides the balance of loans by portfolio segment as of September 30, 2016 and 2015, and December 31, 2015: September 30 December 31 (Dollars in thousands) 2016 2015 2015 Commercial: Commercial, financial, and industrial $ 12,118,298 $ 9,610,295 $ 10,436,390 Commercial real estate 2,065,595 1,488,044 1,674,935 Consumer: Consumer real estate (a) 4,578,371 4,813,936 4,766,518 Permanent mortgage 436,100 463,893 454,123 Credit card & other 357,423 349,324 354,536 Loans, net of unearned income $ 19,555,787 $ 16,725,492 $ 17,686,502 Allowance for loan losses 201,557 210,814 210,242 Total net loans $ 19,354,230 $ 16,514,678 $ 17,476,260 Balances as of September 3 0 , 2016 and 2015, and December 31, 2015, include $ 38.5 million, $ 59 . 3 million, and $ 52.8 million of restricted real estate loans, respectively. See Note 13 - Variable Interest Entities for additional information. C OMPONENTS OF THE LOAN PORTFOLIO T he loan portfolio is disaggregated into segments and then further disaggregated into classes for certain disclosures. GAAP defines a portfolio segment as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. A class is generally determined based on the initial measurement attribute (i.e., amortized cost or purchased credit - impaired), risk characteristics of the loan, and FHN ’s method for monitoring and as sessing credit risk. Commercial loan portfolio segments include commercial, financial and industrial (" C&I ") and commercial real estate (" CRE ") . Commercial classes within C&I include general C&I, loans to mortgage companies, the trust preferred loans (" TRU P S") (i.e. long-term unsecured loans to bank and insurance - related businesses) portfolio and purchased credit-impaired (“PCI”) loans . Loans to mortgage companies include commercial lines of credit to qualified mortgage companies primarily for the tempora ry warehousing of eligible mortgage loans prior to the borrower’s sale of those mortgage loans to third party investors. Commercial classes within CRE include income CRE , residential CRE and PCI loans . Consumer loan portfolio segments include consumer real estate, permanent mortgage, and the credit card and other portfolio. Consumer classes include home equity lines of credit (“ HELOC s”), real estate (" R/E ") installment and PCI loans within the consumer real estate segment, permanent mortgage (which is both a segment and a class), and credit card and other. Concentrations FHN has a concentration of residential real estate loans ( 26 percent of total loans), the majority of which is in the consumer real estate segment ( 23 percent of total loans). Loans to fin ance and insurance companies total $ 2.3 billion ( 19 percent of the C&I portfolio, or 12 percent of the total loans). FHN had loans to mortgage companies totaling $2.5 billion ( 20 percent of the C&I segment, or 1 3 percent of total loans) as of September 30 , 2016 . As a result, 39 percent of the C&I segment was sensitive to impacts on the financial services industry. Acquisition On September 16, 2016, FHN completed its acquisition of restaurant franchise loans from GE Capital . The acquisition included $ 537.4 million in unpaid principal balance of loans. On October 2, 2015 , FHN completed its acquisition of TAF, and its wholly-owned bank subsidiary TAB. The acquisition included $ 298.1 million in unpaid principal balance of loans with a fair value of $ 281.9 mil lion. Generally, the fair value for the acquired loans is estimated using a discounted cash flow analysis with significant unobservable inputs ( Level 3) including adjustments for expected credit losses, prepayment speeds, current market rates for similar loans, and an adjustment for investor-required yield given product-type and various risk characteristics.. At each acquisition, FHN designated certain loans as PCI with the remaining loans accounted for under ASC 310-20, "Nonrefundable Fees and Other Cost s." For loans accounted for under ASC 310-20, the difference between each loan’s book value and the estimated fair value at the time of the acquisition will be accreted into interest income over its remaining contractual life and the subsequent accounting and reporting will be similar to a loan in FHN's originated portfolio. Purchased Credit-Impaired Loans The following table reflects FHN's contractually required payment receivable, cash flows expected to be collected and the fair value of PCI loans at the acquisition date of September 16, 2016. (Dollars in thousands) September 16, 2016 Contractually required payments including interest $ 40,143 Less: nonaccretable difference (1,030) Cash flows expected to be collected 39,113 Less: accretable yield (2,883) Fair value of loans acquired $ 36,230 The following table presents a rollforward of the accretable yield for the three and nine months ended September 30, 2016 and 2015: Three Months Ended Nine Months Ended September 30 September 30 (Dollars in thousands) 2016 2015 2016 2015 Balance, beginning of period $ 6,171 $ 8,348 $ 8,542 $ 14,714 Additions 2,883 - 2,883 - Accretion (837) (1,037) (2,984) (5,985) Adjustment for payoffs (179) (835) (4,408) (2,931) Adjustment for charge-offs - - (674) - Increase in accretable yield (a) 686 500 5,398 1,178 Other - - (33) - Balance, end of period $ 8,724 $ 6,976 $ 8,724 $ 6,976 Includes changes in the accretable yield due to both transfers from the nonaccretable difference and the impact of changes in the expected timing of the cash flows. At September 30, 2016, the ALLL related to PCI loans was $ 1.2 milli on compared to $2.9 million at September 30, 2015. A loan loss provision expense of $ .3 million was recognized during the three months ended September 30, 2016, as comp ared to $. 1 million recognized during the three months ended September 30, 2015. The PCI provision was not material for the nine months ended September 30, 2016, and was a provision credit of $. 4 million for the nine months ended September 30, 2015. The following table reflects the outstanding principal balance and carrying amounts of the acquired PCI loans as of September 30, 2016 and 2015, and December 31, 2015: September 30, 2016 September 30, 2015 December 31, 2015 (Dollars in thousands) Carrying value Unpaid balance Carrying value Unpaid balance Carrying value Unpaid balance Commercial, financial and industrial $ 46,189 $ 47,882 $ 4,767 $ 5,353 $ 16,063 $ 18,573 Commercial real estate 8,661 11,340 17,998 21,138 19,929 25,504 Consumer real estate 1,233 1,733 1,968 2,636 3,672 4,533 Credit card and other 51 65 6 10 52 76 Total $ 56,134 $ 61,020 $ 24,739 $ 29,137 $ 39,716 $ 48,686 Impaired Loans The following tables provide information at September 30, 2016 and 2015, by class related to individually impaired loans and consumer TDRs, regardless of accrual status. Recorded investment is defined as the amount of the investment in a loan, before valuation allowance but which does reflect any direct write-down of the investment. For purposes of this disclosure, PCI loans and net LOCOM have been excluded. September 30, 2016 Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Unpaid Average Interest Average Interest Recorded Principal Related Recorded Income Recorded Income (Dollars in thousands) Investment Balance Allowance Investment Recognized Investment Recognized Impaired loans with no related allowance recorded: Commercial: General C&I $ 13,127 $ 20,666 $ - $ 13,708 $ - $ 12,088 $ - Income CRE - - - 1,234 - 2,057 - Total $ 13,127 $ 20,666 $ - $ 14,942 $ - $ 14,145 $ - Consumer: HELOC (a) $ 11,359 $ 24,541 $ - $ 11,273 $ - $ 11,100 $ - R/E installment loans (a) 4,084 5,094 - 4,158 - 4,333 - Permanent mortgage (a) 4,279 6,654 - 4,280 - 4,292 - Total $ 19,722 $ 36,289 $ - $ 19,711 $ - $ 19,725 $ - Impaired loans with related allowance recorded: Commercial: General C&I $ 32,982 $ 34,915 $ 4,262 $ 33,433 $ 289 $ 29,896 $ 668 TRUPS 3,242 3,700 925 3,258 - 3,291 - Income CRE 1,968 2,246 113 3,211 15 4,376 55 Residential CRE 1,334 1,803 103 1,355 5 1,376 17 Total $ 39,526 $ 42,664 $ 5,403 $ 41,257 $ 309 $ 38,939 $ 740 Consumer: HELOC $ 86,967 $ 89,500 $ 15,769 $ 87,919 $ 546 $ 88,266 $ 1,527 R/E installment loans 56,499 57,686 13,692 57,775 357 58,890 1,019 Permanent mortgage 89,792 102,355 14,611 90,697 544 92,716 1,602 Credit card & other 340 340 139 348 4 353 10 Total $ 233,598 $ 249,881 $ 44,211 $ 236,739 $ 1,451 $ 240,225 $ 4,158 Total commercial $ 52,653 $ 63,330 $ 5,403 $ 56,199 $ 309 $ 53,084 $ 740 Total consumer $ 253,320 $ 286,170 $ 44,211 $ 256,450 $ 1,451 $ 259,950 $ 4,158 Total impaired loans $ 305,973 $ 349,500 $ 49,614 $ 312,649 $ 1,760 $ 313,034 $ 4,898 All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance. September 30, 2015 Three Months Ended Nine Months Ended September 30, 2015 September 30, 2015 Unpaid Average Interest Average Interest Recorded Principal Related Recorded Income Recorded Income (Dollars in thousands) Investment Balance Allowance Investment Recognized Investment Recognized Impaired loans with no related allowance recorded: Commercial: General C&I $ 5,586 $ 7,266 $ - $ 8,994 $ - $ 11,202 $ - Income CRE 2,468 9,389 - 3,328 - 4,631 - Residential CRE - - - - - 191 - Total $ 8,054 $ 16,655 $ - $ 12,322 $ - $ 16,024 $ - Consumer: HELOC (a) $ 11,000 $ 28,486 $ - $ 11,788 $ - $ 12,455 $ - R/E installment loans (a) 4,404 5,756 - 4,682 - 4,696 - Permanent mortgage (a) 5,983 8,255 - 6,193 - 6,743 - Total $ 21,387 $ 42,497 $ - $ 22,663 $ - $ 23,894 $ - Impaired loans with related allowance recorded: Commercial: General C&I $ 21,319 $ 25,515 $ 846 $ 25,934 $ 238 $ 24,702 $ 727 TRUPS 13,369 13,700 5,310 13,384 - 13,414 - Income CRE 6,424 7,709 496 6,606 32 6,962 95 Residential CRE 1,417 1,886 91 1,468 6 1,512 19 Total $ 42,529 $ 48,810 $ 6,743 $ 47,392 $ 276 $ 46,590 $ 841 Consumer: HELOC $ 89,199 $ 91,382 $ 17,200 $ 88,245 $ 474 $ 86,359 $ 1,383 R/E installment loans 65,465 66,431 16,718 66,367 352 68,274 1,010 Permanent mortgage 99,071 111,683 15,696 99,913 613 102,341 1,841 Credit card & other 380 380 168 399 3 453 11 Total $ 254,115 $ 269,876 $ 49,782 $ 254,924 $ 1,442 $ 257,427 $ 4,245 Total commercial $ 50,583 $ 65,465 $ 6,743 $ 59,714 $ 276 $ 62,614 $ 841 Total consumer $ 275,502 $ 312,373 $ 49,782 $ 277,587 $ 1,442 $ 281,321 $ 4,245 Total impaired loans $ 326,085 $ 377,838 $ 56,525 $ 337,301 $ 1,718 $ 343,935 $ 5,086 All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance. Asset Quality Indicators FHN employs a dual grade commercial risk grading methodology to assign an estimate for the probability of default (" PD ") and the loss given default (" LGD ") for each commercial loan using factors specific to various industry, portfolio, or product segments that result in a rank ordering of risk and the assignment of grades PD 1 to PD 16. Each PD grade corresponds to an estimated one-year default probability percentage; a PD 1 has the lowes t expected default probability, and probabilities increase as grades progress down the scale. PD 1 through PD 12 are “pass” grades. P D grades 13-16 correspond to the regulatory-defined categories of special mention (13), substandard (14), doubtful (15), an d loss ( 16 ). Pass loan grades are required to be reassessed annually or earlier whenever there has been a material change in the financial condition of the borrower or risk characteristics of the relationship. All commercial loans over $ 1 million and certa in commercial loans over $ 500,000 that are graded 13 or worse are reassessed on a quarterly basis. LGD grades are assigned based on a scale of 1 - 12 and represent FHN’s expected recovery based on collateral type in the event a loan defaults . See Note 5 - Al lowance for Loan Losses for further discussion on the credit grading system. The following tables provide the balances of commercial loan portfolio classes with associated allowance, disaggregated by PD grade as of September 30, 2016 and 2015: September 30, 2016 Loans to Allowance General Mortgage Income Residential Percentage for Loan (Dollars in thousands) C&I Companies TRUPS (a) CRE CRE Total of Total Losses PD Grade: 1 $ 475,708 $ - $ - $ 1,109 $ - $ 476,817 3 % $ 85 2 689,620 - - 11,586 91 701,297 5 332 3 445,832 645,764 - 133,661 - 1,225,257 9 298 4 924,003 409,470 - 230,460 - 1,563,933 11 1,001 5 1,148,228 286,413 - 299,750 561 1,734,952 12 6,330 6 1,417,978 762,294 - 297,287 13,145 2,490,704 18 10,367 7 1,431,070 209,511 - 479,531 3,286 2,123,398 15 13,302 8 995,678 93,661 - 321,942 4,174 1,415,455 10 23,930 9 634,142 32,537 - 105,274 4,079 776,032 5 14,419 10 367,947 40,099 - 57,528 12,708 478,282 3 8,401 11 218,754 - - 24,245 4,532 247,531 2 6,229 12 118,425 - - 12,678 6,701 137,804 1 4,290 13 216,314 - 304,527 8,990 135 529,966 4 7,262 14,15,16 154,412 70 - 18,207 1,441 174,130 1 16,804 Collectively evaluated for impairment 9,238,111 2,479,819 304,527 2,002,248 50,853 14,075,558 99 113,050 Individually evaluated for impairment 46,109 - 3,242 1,968 1,334 52,653 - 5,403 Purchased credit-impaired loans 46,490 - - 8,758 434 55,682 1 833 Total commercial loans $ 9,330,710 $ 2,479,819 $ 307,769 $ 2,012,974 $ 52,621 $ 14,183,893 100 % $ 119,286 September 30, 2015 Loans to Allowance General Mortgage Income Residential Percentage for Loan (Dollars in thousands) C&I Companies TRUPS (a) CRE CRE Total of Total Losses PD Grade: 1 $ 529,836 $ - $ - $ 707 $ - $ 530,543 5 % $ 127 2 590,614 - - 10,835 126 601,575 5 322 3 453,831 327,776 - 90,588 - 872,195 8 311 4 822,515 315,061 - 110,165 302 1,248,043 11 949 5 1,190,085 239,391 - 234,729 7,015 1,671,220 15 6,901 6 1,201,553 350,401 - 347,740 2,793 1,902,487 17 10,630 7 1,278,443 98,262 - 354,457 4,670 1,735,832 16 13,891 8 747,760 18,189 - 150,375 561 916,885 8 13,953 9 377,998 26,240 - 42,995 2,212 449,445 4 8,310 10 188,711 - - 30,515 89 219,315 2 4,635 11 186,974 - - 28,004 747 215,725 2 5,861 12 80,836 - - 9,095 516 90,447 1 2,975 13 112,423 - 305,382 3,600 260 421,665 4 4,256 14,15,16 123,345 - - 23,195 1,277 147,817 1 14,533 Collectively evaluated for impairment 7,884,924 1,375,320 305,382 1,437,000 20,568 11,023,194 99 87,654 Individually evaluated for impairment 26,904 - 12,755 8,892 1,417 49,968 1 6,743 Purchased credit-impaired loans 5,010 - - 18,533 1,634 25,177 - 2,414 Total commercial loans $ 7,916,838 $ 1,375,320 $ 318,137 $ 1,464,425 $ 23,619 $ 11,098,339 100 % $ 96,811 Balances as of September 30 , 2016 and 2015 , presented net of $ 25.5 million and $ 26.2 million, respectively, in lower of cost or market (“LOCOM”) valuation adjustment . Based on the underlying structure of the notes , the highest possible internal grade is " 13 ". The consumer portfolio is comprised primarily of smaller-balance loans which are very similar in nature in that most are standard products and are backed by residential real estate. Because of the similarities of consumer loan-types, FHN is able to utilize the Fair Isaac Corporation (“FICO”) score, among other attributes, to assess the credit quality of consumer borrowers. FICO scores are refreshed on a quarterly basis in an attempt to reflect the recent risk profile of th e borrowers. Accruing delinquency amounts are indicators of asset quality within the credit card and other consumer portfolio. The following table reflects the percentage of balances outstanding by average, refreshed FICO scores for the HELOC, real estate installment, and permanent mortgage classes of loans as of September 30, 2016 and 2015: September 30, 2016 September 30, 2015 HELOC R/E Installment Loans Permanent Mortgage HELOC R/E Installment Loans Permanent Mortgage FICO score greater than or equal to 740 56.3 % 68.7 % 43.6 % 55.4 % 67.6 % 43.1 % FICO score 720-739 8.9 9.1 9.5 8.8 8.1 9.2 FICO score 700-719 8.8 7.1 11.9 9.2 7.9 10.0 FICO score 660-699 13.2 8.8 16.5 12.9 8.8 16.8 FICO score 620-659 5.9 3.4 8.7 6.5 4.1 8.4 FICO score less than 620 (a) 6.9 2.9 9.8 7.2 3.5 12.5 Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % For this group, a majority of the FICO scores at the time of the origination exceeded 620 but have since deteriorated as the loans have seasoned Nonaccrual and Past Due Loans The following table reflects accruing and non-accruing loans by class on September 30, 2016: Accruing Non-Accruing 30-89 90+ 30-89 90+ Total Days Days Total Days Days Non- Total (Dollars in thousands) Current Past Due Past Due Accruing Current Past Due Past Due Accruing Loans Commercial (C&I): General C&I $ 9,253,922 $ 3,570 $ 96 $ 9,257,588 $ 9,897 $ 2,440 $ 14,295 $ 26,632 $ 9,284,220 Loans to mortgage companies 2,478,708 1,041 - 2,479,749 - - 70 70 2,479,819 TRUPS (a) 304,527 - - 304,527 - - 3,242 3,242 307,769 Purchased credit-impaired loans 45,311 711 468 46,490 - - - - 46,490 Total commercial (C&I) 12,082,468 5,322 564 12,088,354 9,897 2,440 17,607 29,944 12,118,298 Commercial real estate: Income CRE 2,000,553 1,071 - 2,001,624 113 468 2,011 2,592 2,004,216 Residential CRE 50,221 1,141 - 51,362 - - 825 825 52,187 Purchased credit-impaired loans 7,697 390 1,105 9,192 - - - - 9,192 Total commercial real estate 2,058,471 2,602 1,105 2,062,178 113 468 2,836 3,417 2,065,595 Consumer real estate: HELOC 1,693,312 16,054 10,031 1,719,397 50,377 4,101 10,126 64,604 1,784,001 R/E installment loans 2,754,910 9,932 3,129 2,767,971 19,251 2,319 3,263 24,833 2,792,804 Purchased credit-impaired loans 1,315 - 251 1,566 - - - - 1,566 Total consumer real estate 4,449,537 25,986 13,411 4,488,934 69,628 6,420 13,389 89,437 4,578,371 Permanent mortgage 396,285 4,331 6,380 406,996 11,113 3,867 14,124 29,104 436,100 Credit card & other: Credit card 186,482 1,464 1,230 189,176 - - - - 189,176 Other 167,015 843 190 168,048 - - 148 148 168,196 Purchased credit-impaired loans 51 - - 51 - - - - 51 Total credit card & other 353,548 2,307 1,420 357,275 - - 148 148 357,423 Total loans, net of unearned income $ 19,340,309 $ 40,548 $ 22,880 $ 19,403,737 $ $90,751 $ 13,195 $ $48,104 $ $152,050 $ $19,555,787 Total TRUPS i nclude s LOCOM valuation adjustment of $25.5 million . The following table reflects accruing and non-accruing loans by class on September 30, 2015: Accruing Non-Accruing 30-89 90+ 30-89 90+ Total Days Days Total Days Days Non- Total (Dollars in thousands) Current Past Due Past Due Accruing Current Past Due Past Due Accruing Loans Commercial (C&I): General C&I $ 7,888,633 $ 6,095 $ 349 $ 7,895,077 $ 5,359 $ 1,553 $ 9,839 $ 16,751 $ 7,911,828 Loans to mortgage companies 1,373,103 2,102 - 1,375,205 - - 115 115 1,375,320 TRUPS (a) 305,382 - - 305,382 - - 12,755 12,755 318,137 Purchased credit-impaired loans 4,705 - 305 5,010 - - - - 5,010 Total commercial (C&I) 9,571,823 8,197 654 9,580,674 5,359 1,553 22,709 29,621 9,610,295 Commercial real estate: Income CRE 1,435,395 2,394 - 1,437,789 914 - 7,189 8,103 1,445,892 Residential CRE 21,905 80 - 21,985 - - - - 21,985 Purchased credit-impaired loans 16,172 3,845 150 20,167 - - - - 20,167 Total commercial real estate 1,473,472 6,319 150 1,479,941 914 - 7,189 8,103 1,488,044 Consumer real estate: HELOC 2,056,044 19,459 10,146 2,085,649 63,667 5,150 9,126 77,943 2,163,592 R/E installment loans 2,599,513 11,423 3,211 2,614,147 26,293 2,174 5,258 33,725 2,647,872 Purchased credit-impaired loans 2,383 - 89 2,472 - - - - 2,472 Total consumer real estate 4,657,940 30,882 13,446 4,702,268 89,960 7,324 14,384 111,668 4,813,936 Permanent mortgage 420,727 4,051 5,270 430,048 14,044 3,228 16,573 33,845 463,893 Credit card & other: Credit card 187,770 2,049 1,171 190,990 - - - - 190,990 Other 156,664 718 202 157,584 - - 743 743 158,327 Purchased credit-impaired loans 7 - - 7 - - - - 7 Total credit card & other 344,441 2,767 1,373 348,581 - - 743 743 349,324 Total loans, net of unearned income $ 16,468,403 $ 52,216 $ 20,893 $ 16,541,512 $ 110,277 $ 12,105 $ 61,598 $ 183,980 $ 16,725,492 Total TRUPS i nclu des LOCOM valuation adjustment of $26.2 million. Troubled Debt Restructurings As part of FHN’s ongoing risk management practices, FHN attempts to work with borrowers when necessary to extend or modify loan terms to better align with their current ability to repay. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated separately. A modification is classified as a TDR if the borrower is experiencing financial diffi culty and it is determined that FHN has granted a concession to the borrower. FHN may determine that a borrower is experiencing financial difficulty if the borrower is currently in default on any of its debt, or if it is probable that a borrower may defaul t in the foreseeable future. Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty. Concessions could include extension of the maturity date, reductions of the interest rate (which may make the rate lower than current market for a new loan with similar risk), reduction or forgiveness of accrued interest, or principal forgiveness. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty, and whether a concession has been granted, are subjective in nature and management’s judgment is required when determining whether a modification is classified as a TDR. For all classes within the commercial portfolio segment, TDRs are typically modified through forbearance agreements (generally 6 to 12 months). Forbearance agreements could include reduced interest rates, reduced payments, release of guarantor, or entering into short sale agreements. FHN’s proprietary modification programs for consumer loa ns are generally structured using parameters of U.S. government-sponsored programs such as Home Affordable Modification Program (“HAMP”). Within the HELOC and R/E installment loans classes of the consumer portfolio segment, TDRs are typically modified by r educing the interest rate (in increments of 25 basis points to a minimum of 1 percent for up to 5 years) and a possible maturity date extension to reach an affordable housing debt ratio. After 5 years, the interest rate generally returns to the original interest rat e prior to modification ; for certain modifications, the modified interest rate increase s 2 percent per year until the original interest rate prior to modification is achieved. Permanent mortgage TDRs are typi cally modified by reducing the interest rate (in increments of 25 basis points to a minimum of 2 percent for up to 5 years ) and a possible maturity date extension to reach an affordable housing debt ratio. After 5 years, the interest rate steps up 1 percen t every year until it reaches the Federal Home Loan Mortgage Corporation Weekly Survey Rate cap. Contractual maturities may be extended to 40 years on permanent mortgages and to 30 years for consumer real estate loans. Within the credit card class of the c onsumer portfolio segment, TDRs are typically modified through either a short-term credit card hardship program or a longer-term credit card workout program. In the credit card hardship program, borrowers may be granted rate and payment reductions for 6 mo nths to 1 year. In the credit card workout program, customers are granted a rate reduction to 0 percent and term extensions for up to 5 years to pay off the remaining balance. Despite the absence of a loan modification, the discharge of personal liability through bankruptcy proceedings is considered a concession. As a result, FHN classifies all non-reaffirmed residential real estate loans discharged in Chapter 7 bankruptcy as nonaccruing TDRs. On September 30 , 2016 and 2015 , FHN had $ 289.6 million and $ 304.7 million portfolio loans classified as TDRs, respectively. For TDRs in the loan portfolio, FHN had loan loss reserves of $ 48.7 million and $ 5 1. 2 million, or 17 percent as of September 30 , 2016 and 2015 . Additionally, $ 71.2 million and $ 72.6 million of loans held-for-sale as of September 30 , 2016 and 2015 , respectively , were classified as TDRs. The following tables reflect portfolio loans that were classified as TDRs during the three and nine months ended September 30, 2016 and 2015: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Pre-Modification Post-Modification Pre-Modification Post-Modification Outstanding Outstanding Outstanding Outstanding (Dollars in thousands) Number Recorded Investment Recorded Investment Number Recorded Investment Recorded Investment Commercial (C&I): General C&I 2 $ 419 $ 419 7 $ 20,302 $ 19,194 Total commercial (C&I) 2 419 419 7 20,302 19,194 Commercial real estate: Income CRE 1 100 99 1 100 99 Total commercial real estate 1 100 99 1 100 99 Consumer real estate: HELOC 48 5,720 5,573 200 18,418 18,189 R/E installment loans 10 345 337 44 4,569 4,846 Total consumer real estate 58 6,065 5,910 244 22,987 23,035 Permanent mortgage 2 710 704 6 1,551 1,544 Credit card & other 10 45 44 15 66 64 Total troubled debt restructurings 73 $ 7,339 $ 7,176 273 $ 45,006 $ 43,936 Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Pre-Modification Post-Modification Pre-Modification Post-Modification Outstanding Outstanding Outstanding Outstanding (Dollars in thousands) Number Recorded Investment Recorded Investment Number Recorded Investment Recorded Investment Commercial (C&I): General C&I - $ - $ - 2 $ 1,388 $ 1,325 Total commercial (C&I) - - - 2 1,388 1,325 Commercial real estate: Income CRE - - - - - - Total commercial real estate - - - - - - Consumer real estate: HELOC 56 6,918 6,820 158 17,882 17,674 R/E installment loans 20 988 974 58 4,254 4,267 Total consumer real estate 76 7,906 7,794 216 22,136 21,941 Permanent mortgage - - - 6 2,039 2,054 Credit card & other 3 11 10 15 59 56 Total troubled debt restructurings 79 $ 7,917 $ 7,804 239 $ 25,622 $ 25,376 The following tables present TDRs which re-defaulted during the three and nine months ended September 30, 2016 and 2015, and as to which the modification occurred 12 months or less prior to the re-default. For purposes of this disclosure, FHN generally defines payment default as 30 or more days past due. Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Recorded Recorded (Dollars in thousands) Number Investment Number Investment Commercial real estate: Residential CRE - $ - - $ - Total commercial real estate - - - - Consumer real estate: HELOC - - 2 138 R/E installment loans - - 1 180 Total consumer real estate - - 3 318 Credit card & other - - - - Total troubled debt restructurings - $ - 3 $ 318 Three Months Ended Nine Months Ended September 30, 2015 September 30, 2015 Recorded Recorded (Dollars in thousands) Number Investment Number Investment Commercial real estate: Residential CRE - $ - 1 $ 896 Total commercial real estate - - 1 896 Consumer real estate: HELOC - - 7 308 R/E installment loans 2 50 4 162 Total consumer real estate 2 50 11 470 Credit card & other 1 2 4 10 Total troubled debt restructurings 3 $ 52 16 $ 1,376 |